EXHIBIT 3.10
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XXXXXXX PETROLEUM
AGREEMENT OF GENERAL PARTNERSHIP
BETWEEN
XXXXXXX PETROLEUM CORPORATION
OF THE FIRST PART
- AND -
867791 ALBERTA LTD.
OF THE SECOND PART
DATED THE 31ST DAY OF JANUARY, 2001.
TABLE OF CONTENTS
ARTICLE 1 ORGANIZATIONAL MATTERS...............................................................2
1.1 FORMATION..................................................................2
1.2 NAME.......................................................................2
1.3 PRINCIPAL PLACE OF BUSINESS................................................2
1.4 ADDRESSES..................................................................2
1.5 FILINGS....................................................................2
1.6 TERM AND EFFECTIVE TIME....................................................2
1.7 STATUS OF PARTNERS.........................................................3
1.8 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS......................3
ARTICLE 2 DEFINITIONS..........................................................................3
2.1 DEFINITIONS................................................................3
ARTICLE 3 PURPOSES AND POWERS..................................................................7
3.1 PURPOSES...................................................................7
3.2 POWERS.....................................................................8
ARTICLE 4 CAPITAL CONTRIBUTIONS................................................................9
4.1 INITIAL CAPITAL CONTRIBUTIONS..............................................9
4.2 SUBSEQUENT CAPITAL CONTRIBUTIONS...........................................9
4.3 TITLE TO PARTNERSHIP ASSETS................................................9
4.4 REDETERMINATION OF PARTNERSHIP INTEREST UPON SUBSEQUENT
CAPITAL CONTRIBUTION......................................................10
4.5 DETERMINATION OF PARTNERSHIP INTEREST UPON OCCURRENCE OF
OTHER EVENTS..............................................................11
4.6 MANDATORY ADDITIONAL CAPITAL CONTRIBUTIONS................................11
4.7 FAILURE TO CONTRIBUTE.....................................................12
ARTICLE 5 CAPITAL ACCOUNTS....................................................................13
5.1 MAINTENANCE OF CAPITAL ACCOUNTS...........................................13
ARTICLE 6 ALLOCATIONS OF INCOME AND LOSS; CASH DISTRIBUTIONS..................................13
6.1 EXPENSES OF THE PARTNERSHIP...............................................13
6.2 GENERAL ALLOCATION........................................................14
6.3 CURRENT ACCOUNT...........................................................14
6.4 CASH OR IN KIND DISTRIBUTIONS.............................................14
ARTICLE 7 TAX MATTERS.........................................................................14
7.1 PAYMENT OF TAXES..........................................................14
7.2 ELECTIONS.................................................................14
7.3 ALLOCATIONS...............................................................15
7.4 SPECIAL ALLOCATION........................................................15
ARTICLE 8 ACCOUNTING PROCEDURE, REPORTS AND INFORMATION.......................................15
8.1 FISCAL PERIOD.............................................................15
8.2 FINANCIAL RECORDS.........................................................15
8.3 FINANCIAL REPORTS.........................................................16
8.4 TAX REPORTS...............................................................16
ARTICLE 9 MANAGEMENT OF THE PARTNERSHIP.......................................................16
9.1 MANAGING PARTNER..........................................................16
9.2 MANAGEMENT AND CONTROL OF THE PARTNERSHIP.................................16
9.3 AGENTS, EMPLOYEES OF MANAGING PARTNER.....................................18
9.4 ARRANGEMENTS WITH THIRD PARTIES...........................................18
9.5 RESIGNATION OR REMOVAL OF THE MANAGING PARTNER............................19
9.6 POWER OF ATTORNEY.........................................................19
9.7 INDEMNITY OF MANAGING PARTNER.............................................21
9.8 REIMBURSEMENT AND REMUNERATION............................................21
ARTICLE 10 PARTNERSHIP PROPERTY...............................................................21
10.1 BENEFICIAL OWNERSHIP OF PARTNERSHIP PROPERTY..............................21
10.2 LEGAL TITLE...............................................................21
10.3 WAIVER OF RIGHTS OF PARTITION.............................................22
10.4 DATA......................................................................22
10.5 RIGHT TO COMPETE..........................................................22
ARTICLE 11 ADMISSION OF PARTNERS..............................................................22
11.1 ADMISSION TO PARTNERSHIP..................................................22
11.2 CONTINUATION OF PARTNERSHIP FOLLOWING ADMISSION...........................23
ARTICLE 12 NON-TRANSFERABILITY OF PARTNERSHIP INTEREST........................................23
12.1 LIMITATION ON ASSIGNMENT..................................................23
ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION...........................................23
13.1 SURVIVAL OF PARTNERSHIP...................................................23
13.2 DISSOLUTION...............................................................23
13.3 DISSOLUTION DATE..........................................................24
13.4 FINAL ACCOUNTING; LIQUIDATING AGENT.......................................24
13.5 WINDING UP OF THE PARTNERSHIP.............................................24
13.6 CERTAIN POWERS AND RIGHTS OF THE LIQUIDATING AGENT........................24
13.7 COMPLETE DISTRIBUTION.....................................................25
ARTICLE 14 WITHDRAWAL OF PARTNER..............................................................25
14.1 PAYMENT OF CAPITAL ACCOUNT DEFICIT........................................25
ARTICLE 15 GENERAL PROVISIONS.................................................................25
15.1 NOTICES...................................................................25
15.2 ENUREMENT.................................................................25
15.3 FURTHER ASSURANCES........................................................25
15.4 HEADINGS..................................................................26
15.5 WAIVER, CUMULATIVE REMEDIES...............................................26
15.6 SEVERABILITY..............................................................26
15.7 NUMBER AND GENDER.........................................................26
15.8 CURRENCY..................................................................26
15.9 GOVERNING LAW.............................................................26
15.10 COUNTERPARTS..............................................................26
XXXXXXX PETROLEUM
AGREEMENT OF GENERAL PARTNERSHIP
THIS AGREEMENT made this 31st day of January, 2001.
BETWEEN:
XXXXXXX PETROLEUM CORPORATION, a body corporate
carrying on business in the City of Calgary, in
the Province of Alberta (hereinafter called
"CPC')
OF THE FIRST PART
- and -
867791 ALBERTA LTD, a body corporate carrying
on business in the City of Calgary, in the
Province of Alberta (hereinafter called
"Alberta")
OF THE SECOND PART
WHEREAS the parties hereto carry on, among other things, the
business and activities of acquiring, exploring for, developing, processing,
producing and marketing crude oil, natural gas, natural gas liquids, bitumen and
sulphur;
AND WHEREAS the parties are desirous of forming a partnership
for the purpose of combining certain elements of their operations and assets for
the achievement of certain efficiencies and carrying on the business of owning
and operating certain assets and deem it advisable to enter into this Agreement
for the purpose of setting forth their respective rights and obligations in
relation to the Partnership and the matters herein set forth.
NOW THEREFORE TIES AGREEMENT WITNESSETH THAT in consideration
of the premises and of the mutual covenants and agreements hereinafter set
forth, the parties hereto covenant and agree as follows:
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ARTICLE 1
ORGANIZATIONAL MATTERS.
1.1 FORMATION
The Partners hereby agree to jointly carry on the business and to
thereby form and by executing this Agreement do hereby associate
themselves in a general partnership (the "Partnership") under and
pursuant to the laws of the Province of Alberta for the purposes
described herein. Except as otherwise provided herein, the rights and
liabilities of the Partners and the administration, dissolution and
termination of the Partnership shall be governed by the PARTNERSHIP ACT
R.S.A. 1980, c. P-2, as amended.
1.2 NAME
The name of the Partnership shall be "Xxxxxxx Petroleum" or such other
name or names as may be approved by the unanimous consent of the
Partners from time to time.
1.3 PRINCIPAL PLACE OF BUSINESS
The principal office of the Partnership shall, at all times, be the
principal office of such of the Partner or Partners as is designated by
the Managing Partner, or such other place as the Managing Partner may
from time to time designate. The Partnership may also establish and
maintain such other offices for the conduct of business of the
Partnership in such other places as the Managing Partner may authorize.
1.4 ADDRESSES
The addresses of the Partners shall be the addresses referred to in
Article 15, as such addresses may be changed from time to time in
accordance with such Article.
1.5 FILINGS
The Partners agree to execute, record, file and publish all documents,
declarations and certificates as may be necessary or desirable to
effect the formation, continuation and operation of the Partnership as
a general partnership or equivalent business organization in all
Provinces of Canada or other jurisdictions in which the Partnership may
conduct business.
1.6 TERM AND EFFECTIVE TIME
The Partnership shall come into being at 8:00 a.m. on January 31, 2001
(the "Effective Time), and shall continue in full force and effect
until the Partnership is dissolved pursuant to the terms hereof
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1.7 STATUS OF PARTNERS
Each of the Partners severally represents, warrants, covenants and
agrees with the Partnership and each other Partner that such Partner:
(a) is a corporation duly organized, incorporated or recognized
under the laws of the jurisdiction of its organization,
incorporation or recognition and is validly subsisting;
(b) has and shall maintain the capacity and corporate authority
necessary to be a Partner of the Partnership and to perform
its obligations under this Agreement, and such obligations do
not and will not conflict with or result in a breach of any of
its constating documents, by-laws or any agreement by which or
to which it or any of its property is or may become bound or
subject;
(c) is not relying upon, and no other Person has made to such
Partner, any statement, representation or warranty whatever as
to the deductibility by such Partner or by the Partnership of
any costs, outlays or expenses made or incurred by such
Partner or by the Partnership in computing the income or
taxable income of such Partner or the Partnership for purposes
of the INCOME TAX ACT (Canada) or the income tax legislation
of any province, territory or other jurisdiction whatever;
(d) is not and shall not become a "non-resident" of Canada as such
term is construed for purposes of the INCOME TAX ACT (Canada);
and
(e) shall not transfer its Partnership Interest in whole or in
part in a manner not permitted by this Agreement.
1.8 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
The representations, warranties and covenants made pursuant to section
1.7 above shall survive execution of this Agreement. Each Partner
expressly acknowledges and agrees that breach by it of any of the
representations, warranties and covenants set out in section 1.7 could
cause damage to the Partnership and each of the Partners.
ARTICLE 2
DEFINITIONS
2.1 DEFINITIONS
When used herein, including the recitals and Article 1:
(a) "Assets" means:
(i) Petroleum and Natural Gas Rights;
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(ii) Tangibles; and
(iii) Miscellaneous Interests.
(b) "Business Day" means a day, other than a Saturday, a Sunday,
or a statutory holiday in Calgary, Alberta.
(c) "Capital Account" means the amount from time to time standing
to the credit of a Partner in a Partner's Partnership capital
account which capital account is maintained pursuant to and is
more fully referenced in Article 5 hereof.
(d) "Contribution Agreement" means the agreements which may be
entered into from time to time by any Partner and the
Partnership by virtue of which the Partners will make
Subsequent Capital Contributions to the Partnership.
(e) "Current Account" means each Partner's account as maintained
pursuant to and as more fully referenced in section 6.3.
(f) "Delinquent Partner" has the meaning given that expression in
section 4.7.
(g) "Dissolution Date" has the meaning given that expression in
section 13.3.
(h) "Effective Time" means the date and time specified in section
1.6.
(i) "Income" means income before income taxes from the Partnership
business as calculated in accordance with generally accepted
accounting principles in Canada, consistently applied.
(j) "Initial Capital Contribution" means the cash contributed by
way of capital to the Partnership by the Partners pursuant to
Section 4.1.
(k) "Liquidating Agent" has the meaning given that expression in
section 13A.
(l) "Loss" means any loss from the Partnership business as
calculated in accordance with generally accepted accounting
principles in Canada, consistently applied.
(m) "Majority of the Partners" means one Partner having
individually, or a number of Partners having collectively a
Partnership Interest or Partnership Interests totalling more
than 50 percent.
(n) "Managing Partner" means CPC and any successor appointed in
accordance with section 9.5.
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(o) "Miscellaneous Interests" means the entire right, title,
estate and interest of a Person in and to all property, assets
and rights (other than the Petroleum and Natural Gas Rights or
the Tangibles) pertaining to the Petroleum and Natural Gas
Rights or the Tangibles and to which the Person was entitled
at the Effective Time including, without limitation, such
interests in:
(i) all contracts, agreements, books, records and
documents relating directly to the Petroleum and
Natural Gas Rights and the Tangibles;
(ii) all subsisting rights to enter upon, use and occupy
the surface of any lands which comprise part of the
Petroleum and Natural Gas Rights or any lands with
which the same have been pooled or unitized or any
lands upon which the Tangibles arc located;
(iii) all xxxxx, including well-bores and all casing
therein; and
(iv) all geological, engineering and other reports
including any seismic data.
(p) "Non-Delinquent Partners" has the meaning given that
expression in section 4.7.
(q) "Partner" means any one of the Partners.
(r) "Partners" means the parties hereto and any third parties who
may subsequently be admitted to the Partnership.
(s) "Partnership Interest" means in respect of each Partner, that
Partner's percentage interest in the Partnership determined
pursuant to the terms hereof.
(t) "Partnership Property" means the cash, Assets and any property
or other assets contributed to the Partnership pursuant to
Article 4 and all other property and assets, tangible and
intangible, in which the Partnership has an interest, legal,
beneficial or otherwise, acquired by the Partnership from time
to time or at any time.
(u) "Person" means an individual, a corporation, a partnership, a
joint venture, an unincorporated organization or association,
a trust a trustee in bankruptcy, a receiver, a government or
any department or agency thereof and the heirs, executors,
administrators or other legal representatives of an
individual.
(v) "Petroleum & Natural Gas Rights" means any right, title,
estate or interest, whether absolute or contingent, legal or
beneficial, present or future,
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vested or not, and whether or not an "interest in land", of a
Person in or to any of the following, by whatever name the
same are known:
(i) rights to explore for, drill for, produce, take, save
or market Petroleum Substances;
(ii) rights to a share of the production of Petroleum
Substances;
(iii) rights to a share of the proceeds of, or to receive
payments calculated by reference to the quantity or
value of, the production of Petroleum Substances
other than rights under agreements for the sale of
Petroleum Substances;
(iv) rights to acquire any of the rights described in
paragraphs (i) through (iii) of this definition; and
(v) interests in any rights described in paragraphs (i)
through (iv) of this definition;
and includes interests and rights known as working interests, royalty
interests, overriding royalty interests, gross overriding royalty
interests, production payments, profits interests, net profits
interests, revenue interests, net revenue interests, economic interests
and other interests and fractional or undivided interests in any of the
foregoing and freehold, leasehold or other interests.
(w) "Petroleum Substances"' means petroleum, crude bitumen,
natural gas, natural gas liquids, related hydrocarbons and all
other mines and minerals, whether liquid, solid or gaseous,
whether hydrocarbons or not, produced or producible in
association with any of the foregoing, including hydrogen
sulphide and sulphur.
(x) "Prime Rate" means the annual rate of interest established
from time to time by The Bank of Montreal as the reference
rate it will use to determine rates of interest on Canadian
Dollar loans to customers in Canada and which it designates as
its Prime Rate.
(y) "Subsequent Capital Contributions" means the fair market value
of any Assets, cash or other property or assets contributed by
way of capital to the Partnership by the Partners, from time
to time, less the amount of liabilities assumed by the
Partnership from the Partners pursuant to a Contribution
Agreement.
(z) "Tangibles" means any right, title, estate or interest,
whether absolute or contingent, legal or beneficial, present
or fiiture, vested or not, of a Person in or to any tangible
property, apparatus, plants, equipment, machinery or
facilities, fixed or non-fixed, real or personal, used or
capable of use in exploiting any Petroleum Substances whether
the Petroleum and Natural
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Gas Rights to which such Petroleum Substances are attributable
are owned by the same Person or by others or both, including:
(i) systems, plants and facilities used or useful in
producing, gathering, compressing, dehydrating,
scrubbing, processing, treating, separating,
collecting, refining, measuring, storing or
transporting Petroleum Substances;
(ii) tangible property and assets used or intended for use
in exploration for, producing, storing, injecting or
removing Petroleum Substances; and
(iii) all "extensions, additions and replacements to any
item descried in paragraphs (i) or (ii) of this
definition; excluding, the lands on which any system,
plant or facility, property or asset described in
paragraphs (i), (ii) or (iii) of this definition is
located, but including (whether they are fixtures at
law or otherwise) wellheads, buildings, plants,
erections, production equipment, improvements,
flowlines, pipelines, pipeline connections,
extraction facilities, meters, generators, motors,
compressors, separators, gas treating and processing
equipment, dehydrators, scrubbers, pumps, tanks,
boilers, communications equipment, enhanced recovery
systems and other machinery, apparatus and equipment
(aa) "Tax Pools" means the amount of Cumulative Canadian
Exploration Expense, Cumulative Canadian Development Expense,
and Cumulative Canadian Oil and Gas Property Expense,
Cumulative Foreign Resource Expense each as defined in the
INCOME TAX ACT (Canada).
(bb) "this Agreement", "hereto", "herein", "hereby", "hereof,
"hereunder", and similar expressions mean or refer to this
Agreement of General Partnership and any amendments hereto.
ARTICLE 3
PURPOSES AND POWERS
3.1 PURPOSES
The purposes of the Partnership shall be:
(a) to buy, sell, lease, hold and otherwise acquire and operate
and dispose of Assets and all other mineral interests;
(b) to explore for, drill for and develop Petroleum Substances;
(c) to treat, transport to market and market Petroleum Substances;
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(d) to develop reserves of Petroleum Substances by production,
drilling and development;
(e) to purchase or sell interests in Assets and to engage in such
operations by itself, in association with others, or through
an equity interest in a corporation;
(f) to construct and operate facilities for the treatment,
production, collection, storage, delivery and sale of
Petroleum Substances;
(g) to conduct geophysical, geological and other exploratory or
developmental work, and install and operate pressure
maintenance and secondary recovery systems of all kinds;
(h) to carry on any and all operations for the extraction,
production, fractionation, gathering, storage, transportation,
treatment, handling, terminalling, processing, delivery,
purchase, marketing and sale of propane, isobutane, normal
butane, mixed butane, pentanes and pentanes plus, each in a
segregated state, and any mixtures of any or all thereof,
which have been extracted from natural gas; and
(i) to carry on any and all such other undertakings, operations
and matters as may be incidental or ancillary to the purposes
set forth in subsections 3.1(a) to 3.1(h) of this section.
3.2 POWERS
The Partnership may do any act or thing incidental to or in furtherance
of the attainment of the purposes set forth in section 3.1, including,
without limitation:
(a) the acquisition of property by purchase, lease, license,
farm-in, pooling, unitization, exchange or otherwise;
(b) the operation of Partnership Property;
(c) the purchase, sale and exchange of Petroleum Substances;
(d) the establishment and operation of offices and places of
business;
(e) the borrowing or raising of money;
(f) the creation of mortgages, pledges, security interests or
other encumbrances on Partnership Property;
(g) the opening, operating and closing of bank accounts, including
drawing of cheques and other orders for the payment of moneys;
(h) the employment and termination of personnel;
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(i) the sale, exchange, farmout or other disposition of
Partnership Property; and
(j) the investment of funds not immediately required for the
operations of the Partnership.
ARTICLE 4
CAPITAL CONTRIBUTIONS
4.1 INITIAL CAPITAL CONTRIBUTIONS
Upon the execution of this Agreement, each Partner shall contribute as
its Initial Capital Contribution to the Partnership the following
amounts and shall be entitled to the following initial Partnership
Interest:
INITIAL CAPITAL PARTNERSHIP
CONTRIBUTION INTEREST
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CPC $45,000.00 95%
Alberta $5,000.00 5%
as of the Effective Time.
4.2 SUBSEQUENT CAPITAL CONTRIBUTIONS
Each Partner shall be entitled to make Subsequent Capital Contributions
to the Partnership from time to time, in accordance with the applicable
Contribution Agreements, with the prior consent of all other Partners
and upon such terms as are acceptable to all other Partners. A Partner
which effects a Subsequent Capital Contribution through a transfer of
property to the Partnership may require the Partnership, to the extent
permitted by the INCOME TAX ACT (Canada), to elect in accordance with
the provisions of subsection 97(2) at such amount as the Partner making
such contribution shall designate or such other amount as is required
under the INCOME TAX ACT (Canada) and the Managing Partner shall be
authorized to do all acts, matters or things necessary to give effect
to such election.
4.3 TITLE TO PARTNERSHIP ASSETS
Legal title to Partnership Assets transferred to the Partnership by any
Partner may be held in trust for the Partnership by the transferring
Partner or the Managing Partner and such Partner shall enter a formal
trust agreement confirming such trusteeship.
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4.4 REDETERMINATION OF PARTNERSHIP INTEREST UPON SUBSEQUENT CAPITAL
CONTRIBUTION
Upon the completion of any Subsequent Capital Contribution, each
Partner's Partnership Interest shall be redetermined effective as of
the effective time of such Subsequent Capital Contribution as follows:
(a) Each partner's Partnership Interest will be redetermined by
the Managing Partner by dividing
the sum of
(i) the fair market value of that Partner's Partnership
Interest, as determined by the Managing Partner,
immediately prior to the Subsequent Capital
Contribution;
plus
(ii) the fair market value, as determined by the Managing
Partner, of that Partner's Subsequent Capital
Contribution, as of the effective time of the
Subsequent Capital Contribution, if any,
by the total of the fair market value, as determined by the
Managing Partner, of all Partners' Partnership Interests
immediately prior to such effective time plus the fair market
value, as determined by the Managing Partner, of the subject
Subsequent Capital Contribution, and expressing the result as
a percentage and all appropriate adjustments to the Current
Accounts and the Capital Accounts shall be made effective as
of such effective time to give effect to the Partnership
Interest of each Partner as so redetermined.
(b) Within 60 days of the date of any redetermination of the
Partners' Partnership Interests following a Subsequent Capital
Contribution, any Partner may request that a review of the
redetermination of each Partner's Partnership Interest be
conducted as of the effective time of the Subsequent Capital
Contribution by an independent petroleum consultant and/or
accountant (or by any Partner if all Partners consent) for the
purpose of determining the accuracy of the redetermined
Partnership Interests. Determination of all matters concerning
such review, including, without limitation, scope of the
review, assumptions, matters to be considered and methodology
shall be solely within the discretion of the reviewer(s). If
the reviewer(s) determine(s) that the fair market value of the
Partner's Subsequent Capital Contribution or Partnership
Interest, as of the effective time, or that the fair market
value of all Partners' Partnership Interests immediately prior
thereto, is such that any Partner's recorded Partnership
Interest must be increased or decreased by at least 1%, such
Partnership Interest shall be re-allocated accordingly
effective as of the
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effective time of the Subsequent Capital Contribution and all
appropriate adjustments to the Current Accounts and the
Capital Accounts shall be made effective as of such effective
time to give effect to the Partnership Interest as so
reallocated.
(c) In the absence of a review referred to in subsection 4.4(b),
the Partnership Interest as redetermined by the Managing
Partner pursuant to subsection 4.4(a) shall be considered
final, provided that if at any time a Partner's Partnership
Interest is determined to be different than that determined
pursuant hereto by reason of:
(i) a decision of a court or tribunal of competent
jurisdiction;
(ii) an agreement with Canada Customs and Revenue Agency,
or
(iii) an agreement between the Partners;
then the Partnership Interest of that Partner shall be
increased or decreased accordingly effective as of the
effective time of the Subsequent Capital Contribution and all
appropriate adjustments to the Current Accounts and the
Capital Accounts shall be made effective as of such effective
time to give effect to the Partnership Interest as so
determined.
4.5 DETERMINATION OF PARTNERSHIP INTEREST UPON OCCURRENCE OF OTHER EVENTS
In the event of the occurrence of any of the following:
(a) the admission of any additional partner to the Partnership;
(b) the withdrawal of any Partner from the Partnership; or
(c) any disproportionate distribution to any Partner of any
Partnership Property,
the provisions of section 4.4 hereof shall apply MUTATIS MUTANDIS to
determine the Partnership Interest, Current Account and Capital Account
of each Partner effective as of the time of such occurrence.
4.6 MANDATORY ADDITIONAL CAPITAL CONTRIBUTIONS
From time to time, each Partner shall contribute, in proportion to its
Partnership Interest, such additional monies (or other assets
acceptable to the other Partners) as a Majority of the Partners
considers to be necessary or desirable to carry out the business of the
Partnership. Such contributions will be due within 30 days after
receipt of notice from the Managing Partner requesting an additional
mandatory contribution. Any contributions made pursuant to this section
4.6 shall be subject to the provisions of section 4.4 which shall apply
MUTATIS mutandis to determine the Partnership Interest of each Partner.
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4.7 FAILURE TO CONTRIBUTE
If any Partner fails to contribute, when due, all or any portion of any
mandatory contribution hereunder and such failure continues for more
than 15 days after receipt by such Partner (the "Delinquent Partnee) of
a notice from any Partner specifying such failure, then the other
Partners (the "Non-Delinquent Partners'), may exercise any of the
following remedies, the determination as to which will be by the
Non-Delinquent Partners:
(a) Take such action (including, without limitation, the filing of
a suit) as the Non-Delinquent Partners deem appropriate to
obtain payment by the Delinquent Partner of that portion of
its contribution which is in default, together with interest
thereon at a rate equal to 2% per annum in excess of the Prime
Rate, from the date that such contribution was due until the
date that such contribution, together with all interest
accrued thereon, is paid to the Partnership, all at the cost
and expense of the Delinquent Partner and with all amounts
recovered being first applied to principal and then to
interest earned and unpaid;
(b) Advance that portion of such contribution which is in default
on the following terms:
(i) the sums thus advanced shall be deemed to be loans
from the Non-Delinquent Partners to the Delinquent
Partner and a contribution of such sums to the
Partnership by the Delinquent Partner,
(ii) these loans shall earn interest at a rate equal to 2%
per annum in excess of the Prime Rate, from the date
that the advance was made until the date that such
advance, together with all interest accrued thereon,
is repaid to the Non-Delinquent Partners;
(iii) the repayment of these loans, if not otherwise paid
by the Delinquent Partner together with costs of
collection shall be made from the cash of the
Partnership to be distributed to the Non-Delinquent
Partners before any cash is distributed to the
Delinquent Partner before and after dissolution; and
(iv) all payments shall be first applied to interest
earned and unpaid and then to principal; or
(c) Exercise such other rights and remedies to which the
Non-Delinquent Partners may be entitled.
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ARTICLE 5
CAPITAL ACCOUNTS
5.1 MAINTENANCE OF CAPITAL ACCOUNTS
The Managing Partner shall maintain a Capital Account for each Partner
as follows:
(a) a Capital Account shall be maintained in the records of the
Partnership for each Partner which account will be credited
initially as at the Effective Time with the Initial Capital
Contribution of that Partner and thereafter will be credited
from time to time with any Subsequent Capital Contributions by
that Partner and shall be subject to adjustments pursuant to
sections 4.4 and 4.5 hereof, if any;
(b) the Capital Account of each Partner shall be charged with any
deficit balance in the Partner's Current Account as at the end
of each fiscal period but only after taking into account all
allocations of Income or Loss and distributions or repayments
for such fiscal period in accordance with Article 6 hereof;
(c) the Capital Account of each Partner shall be credited with any
positive balance in the Partner's Current Account as at the
end of each fiscal period but only after all allocations of
Income or Loss and distributions or repayments for such fiscal
period in accordance with Article 6 hereof; and
(d) the Capital Account of each Partner shall also be charged with
distributions made to such Partners in respect of
distributions on account of capital to the Partners on the
winding-up of the Partnership.
ARTICLE 6
ALLOCATIONS OF INCOME AND LOSS; CASH DISTRIBUTIONS
6.1 EXPENSES OF THE PARTNERSHIP
The Partnership will pay or reimburse the Managing Partner for all
reasonable expenses incurred on the Partnership's behalf by the Partner
in the performance of its duties hereunder, including but not limited
to reasonable costs directly incurred for the benefit of the
Partnership, professional fees and such portion of the reasonable
indirect and general office and administrative expenses of the Managing
Partner as are fairly allocable to the services rendered by the
Managing Partner under this Agreement or to the organization,
reorganization, maintenance or management of the Managing Partner for
the purpose of performing such services, but specifically excluding
expenses of any action, suit or other proceedings in which or in
relation to which the Managing Partner is adjudged to be in breach of
any duty or responsibility imposed on it hereunder.
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The Managing Partner may from time to time charge the Partnership a
reasonable management fee and incur expenses on behalf of and for the
account of the Partnership and any such expenses incurred by the
Managing Partner on behalf of and for the account of the Partnership
shall be reimbursed by the Partnership or, in the event that funds on
hand are insufficient for such reimbursement, may be incurred by the
Managing Partner and shall be considered an advance to the Partnership
from the Managing Partner without interest thereon.
6.2 GENERAL ALLOCATION
All Income and Loss of the Partnership, as determined in accordance
with Article 8 hereof and after deducting the amounts referred to in
section 6.1 hereof, shall be allocated at the end of each fiscal period
of the Partnership to the Partners in proportion to each Partner's
Partnership Interest.
6.3 CURRENT ACCOUNT
There shall be established for each Partner on the books of account of
the Partnership a Current Account to which that Partner's respective
share of all Income and Loss of the Partnership shall be credited or
charged and to which shall be credited or charged any repayments made
by each Partner or distributions made to each Partner in accordance
with this Agreement; provided however, that no repayment shall be made
by any Partner without the prior consent of all other Partners.
6.4 CASH OR IN KIND DISTRIBUTIONS
All cash, property or other assets of the Partnership which the
Managing Partner determines are not necessary to meet the obligations
or anticipated expenditures of the Partnership may be distributed to
any Partner at the times chosen by the Managing Partner.
ARTICLE 7
TAX MATTERS
7.1 PAYMENT OF TAXES
The Managing Partner shall cause the Partnership to pay any taxes
payable by the Partnership.
7.2 ELECTIONS
The Partnership (and the Partners, to the extent the Partnership or the
Partners are affected thereby) shall make such elections with respect
to the tax laws and regulations to which it and the Partners are
subject as the Majority of the Partners shall determine. In the absence
of a contrary determination by all of the Partners,
-15-
in respect of any particular fiscal period, the Partnership shall
claim, for purposes of Canadian income tax, maximum capital cost
allowances.
7.3 ALLOCATIONS
All income and gains of the Partnership for income tax purposes
(including, without limitation, proceeds of disposition of resource
properties and any amount deemed to be an item of income or gain of the
Partnership under the INCOME TAX ACT (Canada)) shall be allocated to
the Partners in accordance with their Partnership Interests as at the
end of the relevant fiscal period of the Partnership and all losses,
deductions and credits including Tax Pools for income tax purposes
shall also be allocated to the Partners in accordance with their
Partnership Interests as at the end of the relevant fiscal period of
the Partnership.
7.4 SPECIAL ALLOCATION
Notwithstanding Section 7.3, in the event that a Partner receives a
distribution of property, as a reduction of its capital account, any
income, gain or proceeds of disposition in respect of such transfer
arising under the INCOME TAX ACT (Canada), or any portion thereof, may
be allocated solely to the Partner to whom the distribution is effected
in order to reduce the amount of the income, gain or proceeds of
disposition which would otherwise be allocated to the remaining
Partners; or, in the event a Partner contributes or transfers property
to the Partnership, the Tax Pools, or any portion thereof, resulting
from such acquisition of property by the Partnership may be allocated
for income tax purposes to such contributing Partner.
ARTICLE 8
ACCOUNTING PROCEDURE, REPORTS AND INFORMATION
8.1 FISCAL PERIOD
The initial fiscal period of the Partnership shall terminate 12 months
from the date hereof and each succeeding fiscal period shall terminate
at the end of each 12 month period thereafter.
8.2 FINANCIAL RECORDS
The financial books and records of the Partnership shall be kept on an
accrual basis in accordance with generally accepted accounting
principles in Canada, consistently applied. The Partnership's books and
records shall be maintained at the Partnership's principal place of
business and shall be available for inspection by each Partner or its
representative (at such Partner's own expense) at all reasonable times.
From time to time, and within 30 days following the request of a
Majority of the Partners, the Managing Partner shall cause to be
prepared a report showing the financial and operating results of the
Partnership for the prior
-16-
month in such detail so as to keep the Partners well informed as to the
operation of the Partnership.
8.3 FINANCIAL REPORTS
As soon as practicable following the end of each fiscal period of the
Partnership, the Managing Partner shall cause to be furnished to each
Partner an annual report, including a statement of the Partnership's
accounts for and as at the end of such fiscal period (containing a
balance sheet, a statement of income, a statement of cash flows and a
statement of the Capital Account of each Partner) prepared in
accordance with generally accepted accounting principles in Canada,
consistently applied.
8.4 TAX REPORTS
As soon as practicable following the end of each fiscal period of the
Partnership, the Managing Partner shall cause to be furnished to the
Partners a statement setting forth all information relating to the
Partnership's operations for such fiscal period as is reasonably
required by the Partners for the completion of their respective income
tax returns.
ARTICLE 9
MANAGEMENT OF THE PARTNERSHIP
9.1 MANAGING PARTNER
The Partners hereby appoint CPC as the initial Managing Partner of the
Partnership and CPC hereby accepts such appointment
9.2 MANAGEMENT AND CONTROL OF THE PARTNERSHIP
Subject to and in accordance with the provisions of this agreement, the
Managing Partner shall be the true and lawful attorney and agent of
each Partner with respect to the affairs of the Partnership and shall
have full and exclusive power and authority on behalf of the
Partnership to manage, administer and operate the overall supervision
and control of the business and affairs of the Partnership and shall,
without limitation, have the right, power and responsibility to:
(a) deliver, file and record in the appropriate public offices and
publish:
(i) this agreement:
(ii) all instruments appropriate to reflect any amendment,
change or modification of this agreement or the
Partnership; and
(iii) all certificates, declarations in writing and other
instruments and all amendments thereto appropriate or
necessary to form, qualify or continue the
qualification of the Partnership in or otherwise
-17-
comply with the laws of the jurisdictions where the
Partnership may do business or own or lease property;
(b) expend the Partnership's funds in the conduct of Partnership
activities;
(c) accept transfers of and hold legal title to Partnership
Property, and to assign, pledge or hypothecate rights in
specific Partnership Property, for Partnership purposes;
(d) file instruments with appropriate registries and land titles
offices with respect to Partnership Property,
(e) appoint or change the accountants of the Partnership;
(f) employ or terminate personnel on behalf of the Partnership or
enter into an agreement with any Person for provision of
services to the Partnership;
(g) borrow money or incur debt for Partnership purposes and pledge
Partnership Property or create mortgages, pledges, security
interests or other encumbrances thereon in support thereof;
(h) open, maintain and close bank accounts and lines of credit on
behalf of the Partnership;
(i) deposit Partnership funds which, from time to time, are not
required for the operation of the Partnership in the
Partnership bank account, in interest-bearing accounts, or
invest such funds in commercial paper, collateralized
investment dealer call loans, certificates of deposit or other
securities issued or guaranteed as to principal and interest
by banks, the United States, Canada or the Provinces of Canada
or by a Person or entity controlled or supervised by and
acting as an instrumentality of the Government of the United
States, Canada or any Province of Canada or similar
securities, or such other investments approved by a Majority
of the Partners and to withdraw such funds as required for the
operation of the Partnership;
(j) commingle, in the Partnership bank account, funds held on
behalf of the Partnership with moneys held for its own
account;
(k) enter into and execute foreign exchange contracts on behalf of
the Partnership;
(l) enter into such other financial transactions, as may be
necessary to facilitate the business activities of the
Partnership;
(m) cause the Partnership to purchase insurance in the amounts and
of the kinds it considers necessary, to protect the
Partnership Property and its
-18
business against loss, and to protect the Partners from and against
liability to third parties arising out of Partnership activities;
(n) maintain the books and records of the Partnership referred to
in section 8.2 and the Current Account of each Partner as
referred to in Article 6 and the Capital Account of each
Partner as referred to in Article 5;
(o) furnish to the Partnership and the Partners the reports
described in sections 8.3 and 8.4;
(p) endorse cheques, bills of exchange or similar instruments on
behalf of the Partnership;
(q) sell, assign, transfer, or otherwise dispose of, whether
directly or indirectly, any Partnership Property or any
interest in a Partnership Property; provided however that the
Managing Partner shall not sell, assign, transfer, or
otherwise dispose of, whether directly or indirectly, all or
substantially all of the Partnership Property without fu-st
obtaining the consent of all other Partners;
(r) enter into any transaction, in furtherance of the purposes of
the Partnership described in section 3.1;
(s) cause the Partnership to perform any and all other acts or
activities customary to the carrying on of the Partnership's
business; and
(t) cause the Partnership to become a registrant for the purposes
of the goods and services tax pursuant to Part IX of the
EXCISE TAX ACT (Canada) and to comply with the provisions of
Part IX of the EXCISE TAX ACT (Canada) effective immediately
after the formation of the Partnership.
9.3 AGENTS, EMPLOYEES OF MANAGING PARTNER
In carrying out its responsibilities hereunder, the Managing Partner
may employ the services of any employee of the Managing Partner or
consultants retained by the Managing Partner. The Managing Partner
shall have complete discretion as to the selection of all such
employees and consultants and the determination of terms governing
their employment and retention. Delegation of its powers and duties
hereunder whether express or implied, by the Managing Partner to any
such employee or to an employee of the Partnership or to a consultant
in accordance with the internal policies and procedures of the Managing
Partner is hereby expressly approved.
9.4 ARRANGEMENTS WITH THIRD PARTIES
Any Person dealing with the Partnership or the Managing Partner may
rely upon a letter or a certificate signed by the Managing Partner as
to:
-19-
(a) the identity of the Managing Partner or any other Partner;
(b) the existence of any fact or facts that constitute conditions
precedent to acts by the Managing Partner or are in any other
manner germane to the affairs of the Partnership; or
(c) the Persons who are authorized to execute and deliver any
instrument or document of or on behalf of the Partnership.
Any document executed by the Managing Partner or by any Person referred
to in subsection 9.4(c) while acting in the name of the Partnership and
within its authority under the PARTNERSHIP ACT or the authority granted
to it under and in accordance with the provisions of this agreement,
shall be deemed to be the action of the Partnership VIS-A-VIS any third
parties.
9.5 RESIGNATION OR REMOVAL OF THE MANAGING PARTNER
The Managing Partner may resign as such upon 120 days prior written
notice to the other Partners. The Managing Partner shall be replaced
immediately if the Managing Partner is declared bankrupt or becomes
insolvent, or shall cease to be a Partner. In addition, if the Managing
Partner is in default of any of its duties or obligations under this
agreement for 60 days following the receipt by it of a notice of
default from another Partner, a Majority of the Partners may agree to
remove the Managing Partner. In the event of the resignation or the
removal of the Managing Partner, a successor shall be appointed by a
Majority of the Partners. A Managing Partner which has been removed may
not participate in the appointment of its successor.
9.6 POWER OF ATTORNEY
Each Partner hereby irrevocably nominates, constitutes and appoints the
Managing Partner as its true and lawful attorney to act on its behalf
with full power and authority in its name, place and stead:
(a) To execute and deliver on the Partner's behalf and in its name
and record or file as and where required in the opinion of the
Managing Partner:
(i) any certificate, amendment to this Agreement and any
other instruments or documents required to continue
and keep the Partnership in good standing, or
otherwise to comply with the laws of any jurisdiction
in which the Partnership may carry on business or own
or lease property and to comply with the applicable
laws of such jurisdiction (including such amendments
as may be necessary to reflect the admission to the
Partnership of new Partners or transferees of
Partnership Interests as contemplated by this
Agreement);
-2-
(ii) any instrument required in connection with the
dissolution and termination of the Partnership in
accordance with the provisions of this Agreement,
including any elections under the INCOME TAX ACT
(Canada) and under any similar legislation;
(iii) the documents necessary to be filed with the
appropriate governmental body or authority in
connection with the business, property, assets and
undertakings of the Partnership;
(iv) the documents as may be necessary to give effect to
the sale or assignment of a Partnership Interest or
to give effect to the admission of a transferee of a
Partnership Interest or a new Partner to the
Partnership in accordance with this Agreement;
(v) all other incidental instruments and documents as may
be deemed necessary by the Managing Partner to carry
out fully this Agreement in accordance with its
terms; and
(vi) Any information return, form of election or
determination or similar document or instrument as
may be required at any time under the INCOME TAX ACT
(Canada) and under any similar legislation of the
federal or a provincial government which relates to
the Partnership or to the members of the Partnership
in that capacity.
(b) Without restricting the generality of any of the foregoing,
but subject to obtaining the prior approval of the Partners,
to execute and deliver on such Partner's behalf and in its
name or join such Partner as a party to any and all documents
and instruments which the Managing Partner considers necessary
to secure or encumber (in accordance with or in conjunction
with the powers of the Managing Partner set forth herein) any
interests of whatsoever kind or nature such Partner may have
or claim to have in a Partnership Interest or in property or
assets of the Partnership (including without limitation such
interests as may, following the dissolution or winding up of
the Partnership, be acquired, generated or come into existence
in respect of the business or operations which at or prior to
the time of dissolution or winding up of the Partnership had
been carried on by or for the Partnership, whether acquired,
generated or brought into existence by means of the activities
of a receiver, receiver and manager or trustee in bankruptcy
of or pertaining to the Partnership or its business or
operations or otherwise).
(c) Without restricting the generality of any of the foregoing, to
execute and deliver on such Partner's behalf and in its name,
register, file, record or deliver caveats, security notices,
financing statements and other notices, and any renewals,
amendments or replacements thereof pertaining to any of the
foregoing.
-21-
The power of attorney granted in this Section 9.6 is irrevocable, is a
power coupled with an interest, shall survive the bankruptcy or
insolvency of a Partner and shall survive the transfer, to the extent
of the obligations of a Partner hereunder, by the Partner, of the whole
or any part of the Partner's Partnership Interest and extends to the
successors, transferees and assigns of the Partner, and may be
exercised by the Managing Partner on behalf of and in the name, place
and stead of each Partner in executing any instrument by a facsimile or
original signature or by listing all the Partners and executing such
instrument with a single signature as attorney and agent for all of
them, with the indication that it is acting on behalf of all of the
Partners. Each Partner agrees to be bound by any statements and actions
made or taken by the Managing Partner pursuant to the power of attorney
granted in this section 9.6 and hereby waives any and all defences
which may be available to negate or disaffirm the action of the
Managing Partner taken in good faith under such power of attorney.
9.7 INDEMNITY OF MANAGING PARTNER
Each Partner jointly and severally will save harmless and indemnify the
Managing Partner from and against any and all liabilities, claims,
losses, damages, charges or expenses that the Managing Partner may
suffer, sustain or incur arising out of or resulting from any act or
omission of the Managing Partner in carrying out its duties hereunder
except where such liability, claim, loss, damage, charge or expense is
the result of the gross negligence or wilful misconduct of the Managing
Partner.
9.8 REIMBURSEMENT AND REMUNERATION
All expenditures reasonably and necessarily incurred by the Managing
Partner in carrying out the overall supervision and control of the
business and affWrs of the Partnership, including all reasonable and
necessary overhead and administration expenses, shall be paid by the
Partnership and the Managing Partner shall be reimbursed therefor
within 30 days of requesting payment. The Managing Partner shall be
entitled to receive, as remuneration for its services as Managing
Partner of the Partnership, such compensation as shall be agreed upon,
from time to time, by a Majority of the Partners.
ARTICLE 10
PARTNERSHIP PROPERTY
10.1 BENEFICIAL OWNERSHIP OF PARTNERSHIP PROPERTY
Beneficial ownership of Partnership Property shall be vested in the
Partnership.
10.2 LEGAL TITLE
To the extent legal title to Partnership Property is not held by the
Partnership or by the Managing Partner on behalf of the Partners and
the Partnership, the holding
-22-
Partner or Partners will hold legal title to that Partnership Property,
as nominee and agent for the Partnership and the Partners, in
proportion to their respective Partnership Interests and such Partner
shall deal with such legal title in accordance with the direction of
the Managing Partner.
10.3 WAIVER OF RIGHTS OF PARTITION
Each Partner hereby irrevocably waives, until dissolution of the
Partnership, any right that it may have to maintain any action for
partition with respect to any Partnership Property.
10.4 DATA
All data and information (whether geological, geophysical, engineering
or other) hereafter acquired or developed by a Partner, the Partnership
or the Partners in connection with the Partnership or any Partnership
Property shall be Partnership Property and shall be utilized for the
benefit of the Partnership. No Partner independently of the Partnership
shall sell, trade, exchange or otherwise dispose of or furnish any of
the Partnership data or information to any other Person without the
consent of all other Partners, except insofar as any Partner may
otherwise be obligated to do under any relevant contractual
arrangements governing such data or information. Following the
dissolution of the Partnership, each Partner shall have the right to
utilize the Partnership data and information for its own account,
without any obligation to disclose such use to the other Partners,
provided that such utilization is in accordance with all relevant
contractual arrangements governing such data or information.
10.5 RIGHT TO COMPETE
Each Partner shall have the right to engage in any business or
undertaking of its choosing, including ones that compete with the
business of the Partnership and including, without limitation, the
ownership and operation of Assets without having to account to the
other Partners.
ARTICLE 11
ADMISSION OF PARTNERS
11.1 ADMISSION TO PARTNERSHIP
Subject to Article 12 a Person may become a Partner in the Partnership
upon:
(a) acceptance of the Person by the written consent of all of the
Partners;
(b) execution and delivery to the Managing Partner of a
counterpart of this agreement, or otherwise becoming bound by
the terms, covenants and conditions hereof, as a Partner; and
-23-
(c) delivery to the Partnership of the Assets or other property
and assets required to be contributed by the Person to be
admitted to the Partnership.
11.2 CONTINUATION OF PARTNERSHIP FOLLOWING ADMISSION
The Partnership and this agreement shall continue in existence and be
in full force and effect, notwithstanding any admission of any Person
to the Partnership.
ARTICLE 12
NON-TRANSFERABILITY OF PARTNERSHIP INTEREST
12.1 LIMITATION ON ASSIGNMENT
No Partner shall, Without the written consent of all other Partners,
sell,, assign, transfer, exchange, mortgage, pledge, grant a security
interest in, or otherwise dispose of or encumber any of its Partnership
Interest.
ARTICLE 13
DISSOLUTION, LIQUIDATION AND TERMINATION
13.1 SURVIVAL OF PARTNERSHIP
The Partnership and this agreement shall continue in existence and fidl
force and effect notwithstanding:
(a) the admission of any additional Partner to the Partnership by
the assignment of part of any one or more other Partner's
Partnership Interest or otherwise;
(b) the amending of this agreement;
(c) the change of name of the Partnership; or
(d) any other action or occurrence which according to law, equity,
statute or regulation would cause the dissolution of the
Partnership or termination of this agreement without the
agreement of all Partners; it being the intention of the
Partners that other than as provided for in section 13.2 the
Partnership shall be dissolved and this agreement shall be
terminated only upon the agreement of all Partners.
13.2 DISSOLUTION
The Partnership shall be dissolved upon the occurrence of any one or
more of the following events:
(a) the bankruptcy of a Partner, or
-24-
(b) the assignment of a Partner's Partnership Interest in trust
for the benefit of his creditors or any other act or event of
insolvency of a Partner,
provided however that nothing in this section 13.2 shall require the
wind-up of the affairs of the Partnership, if the remaining Majority of
the Partners elect to continue the Partnership, in which event sections
13.4 and 13.5 hereof shall not apply.
13.3 DISSOLUTION DATE
Dissolution of the Partnership shall be effective on the day on which
the event occurs giving rise to dissolution (the "Dissolution Date").
Notwithstanding the foregoing, this agreement shall not terminate until
the affairs of the Partnership have been wound-up and the assets of the
Partnership have been distributed as provided in section 13.5. Section
9.7 shall survive any such dissolution and termination and continue in
full force and effect indefinitely.
13.4 FINAL ACCOUNTING; LIQUIDATING AGENT
Upon the dissolution of the Partnership, an accounting shall be made
with respect to the accounts of the Partnership, from the date of the
last previous accounting to the Dissolution Date. The then Managing
Partner shall act as liquidating agent (the "Liquidating Agent" ). The
Liquidating Agent shall immediately proceed to wind up the business and
affairs of the Partnership.
13.5 WINDING UP OF THE PARTNERSHIP
The Liquidating Agent shall pay or provide for the liabilities
(including contingent liabilities) of the Partnership. All remaining
Partnership Properties shall be distributed in specie to the Partners
in accordance with their Partnership Interests.
If all liabilities (including contingent liabilities) of the
Partnership cannot be satisfied out of Partnership Property) then the
Partners shall make provision for any remaining liabilities in
proportion to their Partnership Interests and section 14.1 hereof shall
apply MUTATIS MUTANDIS to determine the Partnership Interest of each
Partner.
13.6 CERTAIN POWERS AND RIGHTS OF THE LIQUIDATING AGENT
The Liquidating Agent shall have all the powers conferred upon the
Managing Partner under the terms of this agreement but only to the
extent necessary or desirable in the good faith judgement of the
Liquidating Agent to carry out the duties and functions of the
Liquidating Agent hereunder.
The Liquidating Agent shall be entitled to receive such compensation
for its services as shall be agreed upon by a Majority of the Partners.
The Liquidating
-25-
Agent may resign at any time upon the giving of 15 days prior notice to
all Partners, in which event a successor and substitute Liquidating
Agent (who shall have and succeed to all the rights, powers and duties
of the original Liquidating Agent) shall, within 30 days thereafter, be
appointed by a Majority of the Partners.
13.7 COMPLETE DISTRIBUTION
Distribution of the Partnership Property to the Partners in accordance
with the provisions of section 13.5 shall constitute a complete return
to the Partners of their respective capital contributions. If such
distributions are insufficient to return to a Partner the full amount
of it's capital contribution, it shall have no recourse against the
Partnership or the other Partners, except as otherwise provided in
section 4.7.
ARTICLE 14
WITHDRAWAL OF PARTNER
14.1 PAYMENT OF CAPITAL ACCOUNT DEFICIT
Upon the withdrawal of any Partner from the Partnership such Partner
shall, if its Capital Account is at a deficit balance, make a
Subsequent Capital Contribution of sufficient fair market value, as
determined pursuant to Article 4 hereof, to eliminate its Capital
Account deficit.
ARTICLE 15
GENERAL PROVISIONS
15.1 NOTICES
Notices hereunder shall be in writing and shall be delivered or mailed
to the recipient Partner's then current registered office in Alberta.
15.2 ENUREMENT
Subject to Article 12, this agreement shall be binding upon and shall
enure to the benefit of the Partners, their heirs, executors,
administrators, legal representatives, successors and assigns.
15.3 FURTHER ASSURANCES
Each Partner agrees to execute, acknowledge and deliver such additional
documents and instruments and to perform such additional acts as may be
necessary or desirable to effect, carry out and perform all of the
terms, provisions and conditions of this agreement.
-26-
15.4 HEADINGS
The headings in this agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret,
define or limit the scope, extent or intent of this agreement or any
provision hereof
15.5 WAIVER, CUMULATIVE REMEDIES
No remedy conferred upon or reserved to a Partner pursuant to this
agreement is intended to be exclusive of any other remedy or remedies,
and each and every remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing at
law, equity, statute or regulation. No delay or omission of a Partner
to exercise any right or power accruing upon any default shall impair
any such right or power or shall be construed to be a waiver of any
such default or an acquiescence therein.
15.6 SEVERABILITY
Every provision of this agreement is intended to be severable. If any
term or provision is illegal or invalid for any reason whatsoever, such
illegality or invalidity shall not affect the validity of the remainder
hereof
15.7 NUMBER AND GENDER
Wherever the singular or masculine or neuter is used in this agreement,
the same shall be construed as meaning the plural or feminine or body
politic or corporate and vice-versa as the context requires.
15.8 CURRENCY
All dollar amounts set forth in this agreement are in Canadian dollars.
15.9 GOVERNING LAW
This agreement shall, in all respects, be subject to and be
interpreted, construed and enforced in accordance with the laws in
effect in the Province of Alberta without reference to conflicts of
laws. Each party hereto accepts the jurisdiction of the courts of the
Province of Alberta and all courts of appeal therefrom.
15.10 COUNTERPARTS
This agreement may be executed by the parties hereto or by their
respective attorneys on their behalf in any number of counterparts with
the same effect as if the parties hereto had all signed the same
document. All counterparts of this agreement shall be construed
together and shall constitute one instrument.
-27-
IN WITNESS WHEREOF, the undersigned have executed this agreement on the date
hereof.
XXXXXXX PETROLEUM CORPORATION
Per: /s/ Xxxx Xxxxxx
---------------------------
867791 ALBERTA LTD.
Per: /s/ Xxxxx X. Xxxxx
---------------------------
XXXXXXX PETROLEUM
AMENDING AGREEMENT
THIS AMENDING AGREEMENT is made as of July 11, 2001
BETWEEN:
XXXXXXX PETROLEUM CORPORATION, a body corporate carrying on
business in the City of Calgary, in the Province of Alberta
("CPCI
and
867791 ALBERTA LTD., a body corporate carrying on business in
the City of Calgary, in the Province of Alberta ("867791")
WHEREAS CPC and 867791, as partners (collectively, the "Partners")
formed a general partnership in the name of "Xxxxxxx Petroleum" (the
"Partnership") pursuant to an agreement of general partnership dated as of
January 31, 2001 (the "Partnership Agreement");
AND WHEREAS the Partners desire to amend the Partnership Agreement as
more particularly set out below;
NOW THEREFORE in consideration of the mutual covenants and agreements
herein contained and for other valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties agree as set forth
below.
1. Capitalized terms and expressions used in this Amending Agreement and
not otherwise defined herein shall have the same meanings as are ascribed
thereto in the Partnership Agreement.
2. The Partnership Agreement is hereby amended by inserting new Section
3.3 as follows:
"3.3 CLARIFICATION
For greater certainty and without limiting the generality of Sections
3.2(e) and (f) above, the powers of the Partnership shall include:
(a) the power to borrow money to finance the business of the
Partnership from any person, including without limitation, any
Partner, and from time to time drawing, making, executing and
issuing promissory notes and other negotiable or
non-negotiable instruments and evidences of indebtedness, and
securing the payment of the sum so borrowed and interest
thereon and hypothecating, mortgaging, pledging and assigning
pursuant to Section 426 of the BANK ACT (Canada) or otherwise,
or by way of fixed or floating change debentures, general
security agreements or otherwise, all
-2-
or any part of the Partnership Property, including without
limitation, the production and proceeds of production of
Petroleum Substances from the Partnership Property or
assigning any money owing or to be owing to the Partnership
and engaging in any other means of financing; and
(b) loaning or advancing money to any Partner, and entering into
any guarantee, contract of indemnity or contract of suretyship
for any person and in particular, without limitation, to
guarantee the obligations of any Partner of the Partnership
and the power to secure such guarantee by hypothecating,
mortgaging, pledging and assigning pursuant to Section 426 of
the BANK ACT (Canada) or otherwise, or by way of fixed or
floating change debentures, general security agreements or
otherwise, all or any part of the Partnership Property,
including without limitation, the production and proceeds of
production of Petroleum Substances from the Partnership
Property or assigning any money owing or to be owing to the
Partnership."
3. Save and except as amended pursuant to the terms of this Amending
Agreement, the Partnership Agreement is hereby ratified and confirmed.
4. This Amending Agreement shall ensure to the benefit of and be binding
upon each of the Partners and their respective successors and assigns.
5. This Amending Agreement may be executed in counterpart, each of which
when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF the undersigned have executed this Amending
Agreement an the date hereof.
XXXXXXX PETROLEUM CORPORATION
Per: /s/ Xxxxxx X. Xxxxxxx
-------------------------
867791 ALBERTA LTD.
Per: /s/ Xxxxxx X. Xxxxxxx
-------------------------
XXXXXXX PETROLEUM
SECOND AMENDING AGREEMENT
THIS SECOND AN[ENDING AGREEMENT is made as of July 16,2001
BETWEEN:
XXXXXXX PETROLEUM CORPORATION, a body corporate carrying on
business in the City of Calgary, in the Province of Alberta
("CPC")
and
000000 XXXXXXX LTD., a body corporate carrying on business in
the City of Calgary, in the Province of Alberta ("867791")
and
HORNET ENERGY LTD., a body corporate carrying on business in
the City of Calgary, in the Province of Alberta ("HORNET")
WHEREAS CPC and 867791, as initial partners (collectively, the "INITIAL
PARTNERS") formed a general partnership in the name of "Xxxxxxx Petroleum" (the
"PARTNERSHIP") pursuant to an agreement of general partnership dated as of
January 31, 2001 and amended by an amending agreement dated as of July 11, 2001
(the "PARTNERSHIP AGREEMENT");
AND WHEREAS the Initial Partners desire to further amend the
Partnership Agreement to include Hornet as an additional partner as more
particularly set out below.
NOW THEREFORE in consideration of the mutual covenants and agreements
herein contained and for other valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties agree as set forth
below.
1. Capitalized terms and expressions used in this Second Amending
Agreement and not otherwise defined herein shall have the same meanings as are.
ascribed thereto in the Partnership Agreement
2. Concurrent with its contribution of Assets to the Partnership pursuant
to Section 11.1(c) of the Partnership Agreement, Hornet hereby agrees to become
a party to the Partnership Agreement as an additional Partner of the
Partnership, and agrees to be bound by all of the terms, covenants and
conditions of the Partnership Agreement. Hornet agrees that it will perform and
cause to be performed such further and other acts and things and execute and
deliver or cause to be executed and delivered such further and other documents
as may be necessary or desirable to carry out the terms and intent of this
Second Amending Agreement.
-2-
3. The Initial Partners hereby consent to the admission of Hornet as an
additional Partner of the Partnership as of the date hereof.
4. Save and except as amended pursuant to the terms of this Second
Amending Agreement, the Partnership Agreement is hereby ratified and confirmed.
5. This Second Amending Agreement shall enure to the benefit of and be
binding upon each of the Partners and their respective successors and assigns.
6. This Second Amending Agreement may be executed in counterpart, each of
which when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF the undersigned have executed this Second Amending
Agreement on the date hereof.
XXXXXXX PETROLEUM CORPORATION
Per: /s/ Xxxx Xxxxxx
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867791 ALBERTA LTD.
Per: /s/ Xxxxxx X. Xxxxxxx
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HORNET ENERGY LTD.
Per: /s/ Xxxxxx X. Xxxxxxx
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