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Exhibit 3.4
AGREEMENT OF LIMITED PARTNERSHIP
OF
PDG/XXXXXX, L.P.
Agreement of Limited Partnership, effective as of the _________
day of December 1997, by and among PDG, Inc., a Pennsylvania corporation ("PDG")
(the "General Partner"), PDG Environmental, Inc., a Delaware corporation
("PDGE") and Xxxxxx Environmental Services Corporation, a Missouri corporation
("Xxxxxx") (PDGE and Xxxxxx are referred to as the "Limited Partner") (the
General Partner and the Limited Partners are sometimes referred to herein
collectively as the "Partners") (the "Agreement").
W I T N E S S E T H:
WHEREAS, the parties hereto desire to form a limited partnership
to engage in the business of carrying out the asbestos abatement in the building
commonly known as the Transportation and Safety Building (the "Project").
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE I
FORMATION OF PARTNERSHIP
1.01. The parties hereby enter into a limited partnership (the
"Partnership") under and pursuant to the provisions of the Pennsylvania Revised
Uniform Limited Partnership Act, 15 Pa.C.S.A.
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Section 8501 et seq., as amended ("Act"). The rights and liabilities of the
Partners shall be as provided in the Act except as herein otherwise expressly
stated.
1.02. The Partnership shall commence as of the effective date of
the filing of the Certificate of Limited Partnership with the Secretary of the
Commonwealth of Pennsylvania, and shall continue until December 31, 2001 unless
sooner terminated under the provisions of Article XI hereof.
ARTICLE II
DEFINITIONS
The following terms shall have the following meanings (except as
may be otherwise expressly provided in this Agreement or unless the context
otherwise requires).
2.01. "Adjusted Capital Account Deficit" means, with respect to
any Partner, the deficit balance, if any, in such Partner's Capital Account as
of the end of the relevant fiscal year, after giving effect to the following
adjustments:
(i) such Capital Account shall be deemed to be increased by
any amounts which such Partner is obligated to restore to the Partnership
(pursuant to this Agreement or otherwise) under Treasury Regulation section
1.704-l(b)(2)(ii)(c) or is deemed to be obligated to restore pursuant to the
second to last sentences of Treasury Regulation sections 1.704-2(g)(1) and
1.704-2(i)(5) (relating to allocations attributable to nonrecourse debt); and
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(ii) such Capital Account shall be deemed to be decreased by
the items described in Treasury Regulation sections 1.704-1(b)(2)(ii)(d)(4), (5)
and (6). The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Treasury Regulation section
1.704-1(b)(2)(ii)(d) and shall be interpreted and applied consistently
therewith.
2.02. "Capital Account" has the meaning set forth in Section 6.06.
2.03. "Capital Event" means a sale, transfer, conveyance,
distribution, exchange, lease, taking, financing, refinancing or disposition of
Partnership assets, including in connection with the liquidation of the
Partnership, other than any such transaction arising in the ordinary course of
business or any distribution made pursuant to Section 7.02
2.04. "Carrying Value" means, with respect to any asset of the
Partnership, the asset's adjusted basis as of the relevant date for federal
income tax purposes, except as follows:
(i) the aggregate Carrying Value of the assets as of the
formation of the Partnership pursuant to Section 1.02, after taking into account
the events occurring on such date, is equal to the sum of the amounts credited
to the Partners' Capital Accounts upon the formation of the Partnership,
increased by the amount of any liabilities assumed by the Partnership in
connection therewith;
(ii) the initial Carrying Value of any asset contributed by a
Partner to the Partnership after the formation of the Partnership
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shall be the gross fair market value of such asset, which shall be equal to the
amount credited to such Partner's Capital Account for such contribution
(increased by the amount of any liabilities by which the Partnership assumes or
takes subject to) as set forth herein or in any amendment or supplement hereto
providing for the contribution of such asset (the intent of the Partners is that
cash only will be contributed), resulting from or as required by the Project;
(iii) the Carrying Values of all Partnership assets shall be
adjusted, at the election of the General Partner, to equal its fair market
values (determined on a gross basis) as of the following times:
(A) the acquisition of an additional interest in the
Partnership by any new or existing Partner in exchange for more than a de
minimis capital contribution within the meaning of Treasury Regulation section
1.704-1(b)(2)(iv)(f)(5);
(B) the distribution by the Partnership to a Partner
of more than a de minimis amount of money or Partnership property as
consideration for an interest in the Partnership; and
(C) the liquidation of the Partnership within the
meaning of Treasury Regulation section 1.704-1(b)(2)(iv)(f)(5)(ii); and
(iv) if the Carrying Value of an asset has been determined or
adjusted pursuant to subsection (ii) or (iii) above, such Carrying Value shall
thereafter be adjusted by the depreciation taken into account with respect to
such asset for purposes of computing Profits and Losses and other items
allocated pursuant to Article VII.
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The foregoing definition of Carrying Value is intended to comply with the
provisions of Treasury Regulation section 1.704-1(b)(2)(iv) and shall be
interpreted and applied consistently therewith.
2.05. "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
2.06. "Excess Cash" means so much of the Partnership's cash on
hand at any time as is determined by the General Partner not to be necessary or
required for the continuing conduct of the Partnership's business. In making
such determination, any obligations of the Partnership to Partners shall be
repaid and any obligations of the Partnership owed to commercial or other
lenders, contractors, materialmen, subcontractors and equipment suppliers for
the Project shall next be repaid before any Excess Cash shall be deemed
available.
2.07. "Fiscal Year" means the calendar year.
2.08. "General Partner" means PDG, Inc., a Pennsylvania
corporation.
2.09. "Limited Partners" means the entities whose names are listed
on the first page of this Agreement as Limited Partners.
2.10. "Net Loss" means the net loss of the Partnership for federal
income tax purposes.
2.11. "Net Profit" means the net income of the Partnership for
federal income tax purposes.
2.12. "Partners" means the General Partner and the Limited
Partners.
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2.13. "Partnership Interest" means the entire legal and equitable
ownership interest of a Partner in the Partnership at any particular time.
2.14. "Profits and Losses" means, for each year or other
applicable period, the Partnership's taxable income or loss for such period
determined in accordance with Code section 703(a)(for this purpose, all items of
income, gain, loss or deduction required to be stated separately pursuant to
Code section 703(a)(1) shall be included in taxable income or loss) with the
following adjustments:
(i) any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Profits and Losses
pursuant to the definitions herein shall be added to such taxable income or
loss;
(ii) any expenditures of the Partnership described in Code
section 705(a)(2)(B) or treated as such pursuant to Treasury Regulation section
1.704-1(b)(2)(iv)(i) shall be subtracted from such taxable income or loss;
(iii) depreciation for financial reporting purposes for such
period shall be taken into account in lieu of the depreciation, amortization and
other cost recovery deductions taken into account in computing such taxable
income or loss;
(iv) gain or loss resulting from any disposition of
Partnership property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed with reference to
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the Carrying Value of the property disposed of, rather than the adjusted tax
basis of such property;
(v) if any property is distributed in kind to any Partner, the
difference between its fair market value and its Carrying Value at the time of
distribution shall be treated as Profit or Loss, as the case may be, recognized
by the Partnership;
(vi) such taxable income or loss shall not be deemed to
include items of income, gain, loss, deduction and Code section 705(a)(2)(B)
expenditures allocated pursuant to Sections 7.04(b) (relating to allocations
caused by the occurrence of deficit Capital Account balances); and
(vii) the amount of any adjustment to the Carrying Value of
any Partnership asset pursuant to clause (iii) of the definition of "Carrying
Value" herein shall be taken into account as Profit or Loss from the disposition
of such asset.
2.15. "Treasury Regulations" means the regulations issued by the
United States Treasury Department pursuant to the Code.
2.16. The Partners anticipate that only cash will be contributed
by the Partners to the capital of the Partnership. The Partnership's assets will
be primarily cash and accounts receivable. All other assets shall remain with
the individual Partners and, if used by the Partnership, the Partner that owns
such assets shall be paid an amount of rent to be agreed upon by the Partners.
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ARTICLE III
NAME
3.01. The business of the Partnership shall be conducted under the
name of PDG/Xxxxxx, L.P.
ARTICLE IV
PRINCIPAL PLACE OF BUSINESS
4.01. The principal office and place of business of the
Partnership shall be located at 000 Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx
00000, or such other location as the General Partner may from time to time
designate.
ARTICLE V
PURPOSE
5.01. The purpose of the Partnership is to engage in and carryout
the asbestos abatement in the building commonly known as the Transportation and
Safety Building located in Harrisburg, Pennsylvania.
ARTICLE VI
CAPITAL CONTRIBUTIONS
6.01. Initial Capital Contributions. Each Limited Partner shall
make initial capital contributions to the Partnership as set forth opposite such
Limited Partner's name on Schedule A attached hereto and made a part hereof,
and, in consideration thereof, shall have the percentage interest in the capital
and profits and losses of the Partnership set forth opposite such Limited
Partner's name on Schedule A ("Limited Partnership Interests").
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The General Partner shall contribute to the initial capital of
the Partnership the sum set forth opposite such General Partner's name on
Schedule A. The General Partner shall have the percentage interest in the
capital and profits and losses of the Partnership set forth opposite The General
Partner's name on Schedule A (the "General Partnership Interests").
6.02. Contributions for Additional Working Capital. In the event
the Partnership is in need of additional working capital for the Project that
the General Partner reasonably determines, the General Partner and the Limited
Partners shall be required to advance additional funds to the Partnership for
any such purpose in the percentage set forth opposite such Partner's name on
Schedule A.
6.03. No Interest on Capital Contribution. No interest shall be
paid by the Partnership or any Partner on the capital contribution of any
Partner.
6.04. Return of Capital Contribution. No Partner shall have the
right to withdraw or receive any return of such Partner's capital contribution,
except as may be specifically provided in this Agreement, and under
circumstances requiring a return of any capital contribution, no Partner shall
have the right to receive property other than cash, except as may be provided in
this Agreement.
6.05. Capital Accounts. A separate capital account shall be
maintained for each Partner (each a "Capital Account"), and the amount of each
Partner's contributions to the capital of the Partnership shall be credited to
its Capital Account. Except as expressly
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provided for herein, no Partner may withdraw any portion of its Capital Account
without the consent of the General Partner, which consent shall not be
unreasonably withheld.
(b) Capital Account Balances. The initial Capital Account
balance of each Partner shall be equal to the amount set forth opposite such
partner's name on Schedule A hereto, and such Capital Account shall thereafter
be further adjusted with respect to subsequent events as follows:
(i) increased by: (A) the aggregate amount of such
Partner's cash contributions to the Partnership, (B) the Carrying Value of
property contributed by such Partner to the Partnership, net of liabilities
secured by such property that the Partnership is considered to assume or take
subject to under Code section 752, and (C) Profits, items of income and gain
allocated to such Partner pursuant to Section 7.03; and
(ii) decreased by: (A) cash distributions to such
Partner from the Partnership, (B) the Carrying Value of property distributed in
kind to such Partner, net of liabilities secured by such property that such
Partner is deemed to assume or take subject to under Code section 752, and (C)
Losses and items of loss or deduction allocated to such Partner pursuant to
Section 7.03.
(c) Intent to Comply with Treasury Regulations. This Section
6.06 and the other provisions of this Agreement relating to the maintenance of
Capital Accounts are intended to comply with Treasury Regulation section
1.704-1(b), and shall be interpreted and
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applied in a manner consistent with such regulation. To the extent such
provisions are inconsistent with such regulation or are incomplete with respect
thereto, the Capital Accounts of the Partners shall be maintained in accordance
with such regulation.
6.07. Partition/Accounting. No Partner shall have the right to
demand a partition of the Partnership or an accounting, absent a material breach
of this Agreement by another Partner.
ARTICLE VII
ALLOCATION OF PROFITS AND LOSSES;
DISTRIBUTIONS TO PARTNERS
7.00. Introduction. Article VII generally sets forth the rules for
allocations to the Partners. Section 7.03 sets forth the allocations of Profits,
Losses and similar items, determined in accordance with the Partnership's method
of accounting, which is based on federal income tax principles as adjusted by
the Partnership allocation rules set forth in Treasury Regulation sections
1.704-l(b) and 1.704-2, rather than in accordance with either generally accepted
accounting principles (GAAP) or the method used in filing the Partnership's
federal income tax return. Section 7.04 sets forth the manner in which items of
income, gain, loss, deduction, credits and basis therefor will be allocated to
the Partners for income tax purposes to the extent such items may be allocated
differently from the allocations referred to in the preceding sentence.
7.01. Profits and Losses. As of the last day of each Fiscal Year
of the Partnership, the Partnership's Net Profit or Net Loss for
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such Fiscal Year shall be fixed and determined and each Partner's Capital
Account shall be increased by such Partner's allocable share of Net Profit and
decreased by such Partner's allocable share of Net Loss.
7.02. Distributions. The Partnership may, at the discretion of the
General Partner, distribute to the Partners in proportion to their Partnership
Interests an amount equal to at least the estimated federal and state income
taxes payable by the Partners on or with respect to the taxable income of the
Partnership, assuming that each Partner will pay taxes at the highest marginal
rate then in effect under the Code and under the laws of the Commonwealth of
Pennsylvania, irrespective of where each Partner resides. Such distribution
shall be made from time to time prior to the due date of each tax payment
required to be made by the Partners resulting in part from the inclusion of the
Partnership's taxable income in the gross income of the Partners. Within a
reasonable time after the close of each Fiscal Year, the Partnership shall also
distribute the Partnership's Excess Cash for such Fiscal Year in accordance with
each Partner's Partnership Share. The General Partner is authorized to withhold
from such distributions such sums as required under law. Distributions in
liquidation of the Partnership or a deemed liquidation pursuant to Code section
708 shall be made in accordance with Article XI.
7.03. Allocations. Section 7.03(a) sets forth the general rules
for allocations of Profit, Loss and similar items to the Partners. Section
7.03(b) sets forth various special rules which modify or clarify the general
rules of Section 7.03(a).
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(a) General Rule.
(i) Operating Profits and Losses. Profits and Losses
of the Partnership, other than Profits and Losses arising in connection with
Capital Events, shall be allocated to the Partners in proportion to their
respective Partnership Interests, as modified by Section 6.02.
(ii) Capital Event Allocations. Profits and Losses of
the Partnership with respect to a Capital Event shall be allocated as set forth
in this Section 7.03(a)(ii), before taking into account any distributions
(including liquidating distributions) occurring in connection therewith.
(A) Profits. Profits with respect to a Capital Event
shall be allocated as follows:
(1) first, to the Partners, if any, having
negative balances in their Capital Accounts, in the proportion that the negative
balance of each such Partner's negative Capital Account bears to the aggregate
negative balances in the Capital Accounts of all Partners, the least amount of
such Profits necessary to cause the balances in their Capital Accounts to equal
zero;
(2) second, so much of the remaining Profit
as is necessary to cause the positive balances in the Partners' Capital Accounts
(as adjusted to reflect any allocation made pursuant to clause (1) above), to
bear the same relationship as their respective Partnership Interests, shall be
allocated among the Partners in
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proportion to the amount of Profit required to be allocated to each Partner to
achieve such result; and
(3) thereafter, any remaining Profits shall
be allocated among the Partners in accordance with their respective Partnership
Interests.
(B) Losses. Losses with respect to a Capital Event
shall be allocated among the Partners as follows:
(1) first, the least amount of such Losses
necessary to cause the positive balances in the Partners' Capital Accounts to
bear the same relationship as their respective Partnership Interests shall be
allocated among the Partners in proportion to the amount of Losses required to
be allocated to each Partner to achieve such result; and
(2) thereafter, any remaining Losses shall
be allocated among the Partners in accordance with their respective Partnership
Interests.
(b) Special Rules. Notwithstanding the general allocation rule
set forth in Section 7.03(a), the following special allocation rules shall apply
under the circumstances described therein.
(A) Change in Regulations. If the Treasury
Regulations are hereafter changed or if new Treasury Regulations are hereafter
adopted, and such change or new regulations, in the opinion of independent
recognized tax counsel for the Partnership, make it necessary to revise the
regulatory Allocations or provide further special allocation rules in order to
avoid a significant risk that a
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material portion of any allocation set forth in this Article VII would not be
respected for federal income tax purposes, this Agreement shall be amended (with
the consent of all Partners, which consent shall not be unreasonably withheld)
in such a manner as, in the reasonable opinion of such counsel, is necessary or
desirable, taking into account the interests of the Partners as a whole and all
other relevant factors, to avoid or reduce significantly such risk to the extent
possible without materially changing the amounts distributable to any Partner
pursuant to this Agreement.
(B) Change in Partners' Interests. If there is a
change in any Partner's share of the Partnership's Profits, Losses or other
items during any Year, allocations among the Partners shall be made in
accordance with their Partnership Interests from time to time during such Year
in accordance with Code section 706, as of the end of the preceding month,
except that depreciation, amortization and similar items shall be deemed to
accrue ratably on a daily basis over the entire Year during which the
corresponding asset is owned by the Partnership for the entire Year, and over
the portion of a Year after such asset is placed in service by the Partnership
if such asset is placed in service during the Year.
7.04. Tax Allocations.
(a) Generally. Except as set forth in Section 7.04(b),
allocations for tax purposes of items of income, gain, loss and deduction, and
credits and basis therefor, shall be made in the same manner as allocations for
book purposes as set forth in Section 7.02.
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Allocations pursuant to this Section 7.04 are solely for purposes of federal,
state and local income taxes and shall not affect, or in any way be taken into
account in computing, any Partner's Capital Account or share of Profits, Losses,
other items or distributions pursuant to any provision of this Agreement.
(b) Special Rules.
(i) Elimination of Book/Tax Disparities. If any
Partnership property has a Carrying Value different than its adjusted tax basis
to the Partnership for federal income tax purposes (whether by reason of the
contribution of such property to the Partnership, the revaluation of such
property hereunder, or otherwise), allocations of taxable income, gain, loss and
deduction under this Section 7.04 with respect to such asset shall take account
of any variation between the adjusted tax basis of such asset for federal income
tax purposes and its Carrying Value in the manner prescribed by Code section
704(c) or the principles set forth in Treasury Regulation section
1.704-l(b)(2)(iv)(g), as the case may be.
(ii) Allocation of Items Among Partners. Each item of
income, gain, loss, deduction and credit and all other items governed by Code
section 702(a) shall be allocated among the Partners in proportion to the
allocation of Profits, Losses and other items to such Partners hereunder,
provided that any gain recognized from any disposition of a Partnership asset
which is treated as ordinary income because it is attributable to the recapture
of any depreciation or amortization shall be allocated among the Partners in the
same ratio
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as the prior allocations of Profits, Losses or other items which included such
depreciation or amortization, but not in excess of the gain otherwise allocable
to each such Partner.
(c) Special Allocations Concerning In-Kind Contributions.
(i) In accordance with Code Section 704(c) and the
Regulations thereunder, income gain, loss and deduction with respect to any
property contributed to the capital of the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take account of any variation
between the adjusted basis of such property to the Partnership for federal
income tax purposes and the Carrying Value of such assets. In the event that the
Carrying Value of an asset is adjusted, subsequent allocations of income, gain,
loss and deduction with respect to such asset shall also be adjusted.
Allocations pursuant to this Section 7.04(c) are solely for purposes of federal,
state and local taxes and shall not affect or be taken into account in computing
any Partner's Capital Account, share of profit or losses, or distributions
pursuant to this Agreement.
(ii) As of the date of the capital contribution of an
asset and at any subsequent adjustment date, the Partnership shall determine the
excess of the Carrying Value over the adjusted tax basis of the asset ("Built-in
Gain") or the excess of the adjusted tax basis over the Carrying Value
("Built-in Loss") of each item of property. Upon the disposition of the item of
property, the Built-in Gain or the Built-in Loss shall be allocated 100 percent
to the contributing Partner.
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(iii) To the extent that the disparity in Carrying
Value and adjusted tax basis causes a Partner to be allocated less depreciation
or amortization for tax purposes than it is allocated under Section 7.03,
additional items of income shall be allocated to the contributing Partner. In
the event of Built-in Loss property, additional items of income shall be
allocated to the non-contributing partner to eliminate the disparity between
Carrying Value and the adjusted basis of the asset.
(iv) If the amount of the difference between Carrying
Value and adjusted tax basis constitutes a "small disparity" as that term is
used in regulations issued under Code section 704(c), curative allocations shall
not be required and the General Partner may disregard the application of Code
section 704(c) to such items of property.
7.05. Elections. The General Partner may, in its discretion, elect
pursuant to Sections 734, 743 and 754 of the Code to adjust the basis of the
Partnership's assets for transfers of a Partnership Interest.
ARTICLE VIII
BOOKS OF ACCOUNT; ANNUAL ACCOUNTS AND REPORTS
8.01. Books of Account. The General Partner shall prepare or cause
to be prepared true, accurate and complete books of account for the Partnership.
The books of account shall be kept at the Partnership's principal place of
business, and each Partner shall,
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upon reasonable notice to the General Partner, have the right to inspect the
same.
8.02. Accounts and Reports. As of the close of each month of the
Partnership, the General Partner shall prepare or cause to be prepared a true,
accurate and complete account of the Net Profit or Net Loss for such month and
the Partnership's assets and liabilities as of the end of such month. The
General Partner shall cause such statements to be furnished to each Partner
within ten (10) days after the close of such month, along with a report
indicating such Partner's share of the Net Profit or Net Loss of the Partnership
for such month and any specially allocated items reported for taxing bodies or
other governmental agencies. The form of reports shall be as reasonably
requested by any Partner.
ARTICLE IX
RIGHTS AND DUTIES OF THE PARTNERS
9.01. Powers of General Partner.
(a) The General Partner shall have the right and power to
manage, direct and control the day-to-day business and affairs of the
Partnership, including, but not limited to, the power to: (i) manage and operate
the Partnership and its properties, including hiring, supervision and dismissal
of Partnership employees, agents and independent contractors; (ii) prepare or
cause to be prepared all financial, accounting and other reports of operations
which are furnished to the Partners or are required by taxing bodies or other
governmental agencies; (iii) negotiate and execute real and personal
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property leases related to the Project and to the purpose of the Partnership;
(iv) render services (either directly or through any affiliate) to the
Partnership as set forth herein or pursuant to other written agreements which
describe the services and the compensation to be paid therefor; (v) make tax
elections which will benefit the Limited Partners; (vi) make distributions from
Excess Cash; and (vii) do all things reasonably necessary to supervise the
business and affairs of the Partnership.
The General Partner is authorized to cause the Partnership to
enter into agreements with any Partner or any affiliate thereof for the
providing of goods or services to or from the Partnership; provided that any and
all such agreements shall be on terms at least as favorable to the Partnership
as those obtainable from unrelated parties and that the terms of any such
agreements with a value greater than $_______________ are fully disclosed in
advance to the Limited Partners.
(b) Limitations on Powers of General Partner.
(i) Notwithstanding any other provision of the
Agreement to the contrary, a unanimous vote of all of the Partners, both Limited
and General, shall be required to approve: (i) a change in the Business of the
Partnership from that described in Section 5.01; (ii) the sale, exchange, lease,
or other transfer of all, or substantially all, of the assets of the
Partnership, except that the transfer of a mortgage or a security interest in
such assets to secure any indebtedness may be made by the General Partner
without the
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consent of the Limited Partners; (iii) the liquidation or dissolution the
Partnership; (iv) the execution of any debt (including a capitalized lease) by
the General Partner that would cause the debts of the Partnership to exceed 95
percent of the net Carrying Value of the assets of the Partnership on its books
and records; (v) a settlement of any claim against the General Partner; or (vi)
a loan of funds to the General Partner.
(ii) Except as otherwise provided in this Agreement,
any amendment to the Partnership Agreement shall require the written consent of
a majority in interest of the Limited Partners. The written consent a Majority
in Interest of the Limited Partners also shall be required: (i) to merge or
consolidate the Partnership with or into another entity; (ii) to offer or to
sell Partnership Interests in the Partnership to persons who are not already
Limited Partners; or (iii) to approve a substitute General Partner in place of
the existing General Partner or the admission of an additional General Partner.
(c) Voting Rights. Unless otherwise specified herein, any and
all actions requiring a vote of the Partners shall require approval of the
Partners owning the requisite percentage of Partnership Interests. It is
expressly provided that any and all voting of the Partners shall be based upon
Partnership Interests and not one vote per Partner.
9.02. Reliance on Acts of the General Partner. No financial
institution or any other person, firm or corporation dealing with the General
Partner shall be required to ascertain whether the General
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Partner is acting in accordance with this Agreement, but such financial
institution or such other person, firm or corporation shall be protected in
relying solely upon the deed, transfer or assurance of and the execution of such
instrument or instruments by the General Partner.
9.03. Other Activities of Partners. Except as otherwise provided
in Sections 9.01 and 12.01, each Partner may, independently or with others,
engage in or possess an interest in any other business ventures of every nature
or description, including business ventures which may be in competition with the
Partnership.
9.04. Reimbursement of Expenses. Each of the Partners shall be
entitled to reimbursement of all reasonable, verifiable, direct, out-of-pocket
expenses they incurred while providing services for the Partnership (i.e.,
excluding overhead). A Partner seeking reimbursement shall furnish to the
General Partner for its review and approval a written statement itemizing the
expenses for which such Partner wishes to obtain reimbursement and setting forth
the Partnership purpose for which the expenses were incurred, which written
statement shall be retained in the Partnership records.
9.05. Compensation Due the General Partner. Other than the General
Partner's share of profits and losses under this Agreement and reimbursement of
Partnership expenses, the General Partner shall not be entitled to any other
compensation from the Partnership.
9.06. Power of Attorney Granted to General Partner. As related
solely to this Partnership, the Project and the purpose
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thereof, each of the Limited Partners hereby irrevocably constitutes and
appoints the General Partner as the Limited Partner's true and lawful attorney
in the name, place and stead of such Limited Partner to make, execute, swear to,
acknowledge, deliver and file:
(a) any certificate or other instruments which may be required
to be filed by the Partnership under the laws of the Commonwealth of
Pennsylvania or any other state in the United States;
(b) any documents, certificates or other instruments,
including, but not limited to, any and all amendments and modifications of this
Agreement or documents to be filed under subsection (a) of this section as may
be required or deemed desirable by the General Partner to effectuate the
provisions of any part of this Agreement, and, by way of extension and not in
limitation, to do all such other things as shall be necessary to continue and to
carry on the business of the Partnership, including, to the extent permitted by
law, the power to ratify the execution and delivery of notes or instruments
authorizing the confession of judgment against the Partnership; and
(c) all documents, certificates or other instruments which may
be required to effectuate the dissolution and termination of the Partnership.
The power of attorney granted hereby shall not constitute a
waiver of, or be used to avoid, the rights of the Limited Partners to (i)
approve certain transactions or (ii) be used in any other manner
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inconsistent with the status of the Partnership as a Limited Partnership.
9.07. Survival of Power of Attorney. It is expressly intended by
each of the Limited Partners that the power of attorney provided for in Section
9.06 is coupled with an interest, is irrevocable and shall survive the death, or
adjudication of insanity, incompetence, dissolution, or bankruptcy of a Limited
Partner or the making of an assignment for the benefit of creditors by any such
Limited Partner. The foregoing power of attorney shall survive the delivery of
an assignment by a Limited Partner of such Limited Partner's entire interest in
the Partnership, except that where an assignee of such entire interest has
become a substituted Limited Partner, then the foregoing power of attorney of
the assignor Limited Partner shall survive the delivery of such assignment for
the sole purpose of enabling the General Partner to execute, acknowledge and
file any and all instruments necessary to effectuate such substitution.
9.08. Liability of Limited Partner. No Limited Partner shall be
liable for any debt of or claim against the Partnership. No Limited Partner, in
his capacity as a Limited Partner, shall take part in the management or control
of the Partnership's business, except as permitted by the Act.
9.09. Liability of the General Partner.
(a) No General Partner shall be personally liable for the
return of all or any part of any Limited Partner's capital
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contributions to the Partnership. Any such return shall be made solely from the
assets of the Partnership.
(b) Neither the General Partner nor any affiliate of the
General Partner nor any of their respective partners, shareholders, officers,
directors, employees or agents shall be liable, in damages or otherwise, to the
Partnership or to any of the Limited Partners for any act or omission on its
part, except for (i) any act or omission resulting from its own gross
negligence, willful misconduct or bad faith, (ii) any breach by a General
Partner of its obligations as a fiduciary of the Partnership or (iii) any
willful breach by a General Partner of any of the material terms and provisions
of this Agreement. The Partnership and the Limited Partners shall indemnify,
defend and hold harmless, to the fullest extent permitted by law, the General
Partner and its affiliates, partners, shareholders, officers, directors,
employees and agents, from and against any claim or liability of any nature
whatsoever arising out of or in connection with the assets or business of the
Partnership, except where attributable to the gross negligence, willful
misconduct or bad faith of such entity or where relating to a breach by the
General Partner of its obligations as a fiduciary of the Partnership or to a
breach by General Partner of any of the terms and provisions of this Agreement.
9.10. Removal of the General Partner.
(a) The Limited Partners, by an affirmative vote of at least
two-thirds of all the Limited Partnership Interests, may remove the General
Partner; however, such removal may only be made for gross
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negligence, willful neglect or embezzlement. Written notice of the effective
date of such a determination setting forth the effective date of such removal
shall be served upon the General Partner so removed and, as of the effective
date, shall terminate all the General Partner's rights and powers as the General
Partner except as to the ability of the former General Partner to share in the
profits, losses and distributions in accordance with its General Partnership
Interest.
(b) If the Limited Partners shall remove the General Partner,
they shall have the power to appoint a Substitute General Partner. Additionally,
the Limited Partners shall be entitled to issue to the Substitute General
Partner a General Partnership Interest in the Partnership.
(c) The terminated General Partner, if the Limited Partners
elect to continue the Partnership, shall have its interest in the Partnership
purchased by the Substitute General Partner at an arm's length price.
9.11. Limited Partners In-Kind Contributions. PDGE will provide
insurance for the Project. Xxxxxx will provide a surety bond for the Project, as
well as certain supervisory personnel at the Project. Each Partner will
indemnify the other for any loss sustained directly or indirectly related to
such in-kind contributions. Each Partner shall be responsible for workers
compensation insurance and claims for its employees.
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ARTICLE X
TRANSFERS OF PARTNERSHIP SHARES
10.01. Restrictions on Transfers. Except as set forth in this
Article X or in section 11.03 hereof, no Limited Partner may sell, transfer or
assign part or all of such Limited Partner's Limited Partnership Interest to any
person, firm or entity without the written consent of the General Partner and
the written consent of a Majority in Interest of the Limited Partners. If the
General Partner intends to withdraw from the Partnership, other than under
Article XI, it shall give 90 days' written notice to the Limited Partners in
advance of withdrawal.
10.02. Absolute Restriction. Notwithstanding any provision of this
Agreement to the contrary, the sale or exchange of any Limited Partnership
Interest will not be permitted if the interest sought to be sold or exchanged,
when added to the total of all other interests sold or exchanged within the
period of 12 consecutive months ending with the proposed date of the sale or
exchange, results in the termination of the Partnership under Section 708 of the
Code or if such termination would materially and adversely affect the
Partnership or any Partner. Notwithstanding any provision of this Agreement to
the contrary, no transfer shall be permitted that would result in the loss of
applicable federal or state securities exemptions relating to the issuance and
sale of Limited Partnership Interests. In no event shall any Limited Partnership
Interest be transferable within twelve months and one day of the original
issuance of such Limited Partnership Interest to such Limited Partner.
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ARTICLE XI
DISSOLUTION AND LIQUIDATION
11.01. Causes of Termination and Dissolution of the Partnership.
The Partnership shall be dissolved upon the earliest to occur of the following:
(i) upon the bankruptcy or dissolution of a General Partner; (ii) upon the
affirmative vote or written consent of the Partners owning at least two-thirds
of the Partnership Interests; (iii) by decree of court; (iv) upon the sale of
all or substantially all of the assets of the Partnership; or (v) December 31,
2005.
11.02. Liquidation Procedures. Upon dissolution of the
Partnership, the assets of the Partnership shall be liquidated in a manner to be
determined by the General Partner to be in the best interest of the Partnership,
and the resulting cash or property shall be distributed as follows: after
payment to its creditors of all expenses of liquidation, debts and all other
liabilities of the Partnership in the order of priority as provided by law, all
remaining property of the Partnership shall be distributed to the Partners in
the following manner and order of priority:
(i) Each Partner shall receive the unpaid balance of any loans
made by such Partner to the Partnership; and
(ii) Each Partner shall receive such Partner's share of the
remaining property of the Partnership in proportion to the positive Capital
Account balances of that Partner, after adjusting the Capital Accounts for
unrealized gain or loss in accordance with Section 7.04(c).
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11.03. Change in Status of Limited Partner. If any Limited Partner
shall be dissolved, be adjudicated bankrupt, insolvent, insane, incompetent, or
file any petition in bankruptcy or make an assignment or enter any arrangement
for the benefit of creditors, the Partnership shall not terminate but the
executor, administrator, guardian or trustee shall become an assignee of such
Limited Partner's Limited Partnership Interest. As provided in Article X hereof.
The assignee may become a substitute Limited Partner upon the approval of the
General Partner, which acceptance or approval may be withheld in the sole
discretion of the General Partner. If a Limited Partner shall be liquidated, be
dissolved or be declared bankrupt, the Partnership shall not terminate but the
executor, administrator or trustee or heir shall be become an assignee and shall
become a substitute Limited Partner as soon as the assignee executes an
instrument in a form acceptable to the General Partner assuming such obligations
of such Limited Partner and adopting the terms of this Agreement, in accordance
with the provisions of Article X hereof.
11.04. Reserve. Notwithstanding any provision to the contrary
herein, the General Partner or its successor may retain such funds as they
reasonably deem necessary as a reserve for any contingent liabilities or
obligations of the Partnership, which funds shall, after the passage of a
reasonable period of time, be distributed in accordance with the provisions of
this Article.
11.05. Final Accounting. Each of the Partners shall be furnished
with a statement prepared by the Partnership's accountants which shall set forth
the assets and liabilities of the Partnership as
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of the date of the complete liquidation of the Partnership's assets. Upon
compliance by the General Partner (or its successor) with the terms and
conditions of this Article XI, the remaining General Partner of the Partnership
or liquidating trustee, if any, or, if none, a majority in interest of the
Limited Partners shall execute and cause to be filed a Certificate of
Cancellation of the Partnership and any and all other documents necessary with
respect to termination and cancellation of the Partnership.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.01. Confidential Information. Except as otherwise required by
law or herein, no Partner (or any related person, firm or entity) shall disclose
or use at any time, except in connection with activities on behalf of the
Partnership, during the term hereof, any secret or Confidential Information (as
hereinafter defined) or knowledge obtained from any other Partner in connection
with activities of the Partnership or otherwise developed by the Partnership.
Without limiting the generality of the foregoing, the term "Confidential
Information" shall include all technology, compositions, contracts, sales or
profit figures, the names of and relationships with customers or suppliers and
the terms of any contracts to which it is a party. "Confidential Information"
does not include: (i) any information which becomes generally available to the
public other than as a result of a disclosure by a Partner or employee of the
Partnership; (ii) any information that was available to the Partners on a
non-confidential basis prior to disclosure by the other;
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(iii) any information that is required to be disclosed by law or by any court or
governmental body; provided, however, that each Partner shall provide the other
with reasonable notice prior to disclosure of any such information; and (iv) any
information received from a third party not bound by confidentiality obligations
to any Limited Partner.
12.02. Amendment of Agreement. This Agreement may be amended only
by a subsequent writing executed by all of the Partners. The General Partner
shall have the power to amend this Agreement, without the consent of the Limited
Partners, to cure ambiguities, correct errors, and comply with Treasury
Regulations under the Code, and retain the tax classification of the Partnership
as a Partnership; provided however, that such amendment shall not: (i) affect
the voting rights of a Limited Partner; (ii) amend Section 12.01, or 12.02;
(iii) amend Article IX, Article X, or Article XI; (iv) affect the limited
liability of any Limited Partner; or (iv) materially affect the rights of a
Partner to share in the cash flow from the Partnership.
12.03. Notices. Any and all notices, reports, requests, demands,
and other communications required or permitted to be given by this Agreement or
by any rule of law with reference to the business of the Partnership or to this
Agreement shall be in writing and shall conclusively be deemed to have been duly
given if personally delivered to, or if enclosed in a stamped and sealed
envelope and mailed first class by certified mail, return receipt requested, in
the United States mails or by overnight courier addressed to, the Partner to
which it is authorized to be given to the last known address of such Partner as
shown on the books and records of the Partnership.
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12.04. Governing Law. This Agreement will be governed and
construed under and in accordance with the laws of the Commonwealth of
Pennsylvania without giving effect to its conflicts of law principles.
12.05. Binding Effect. This Agreement shall inure to the benefit
of and shall be binding upon and be enforceable against the parties hereto and
their respective successors and permitted assigns.
12.06. Severability. If and to the extent that any court of
competent jurisdiction shall determine that any provision of this Agreement is
invalid, unlawful or unenforceable, such holding shall in no way affect the
validity or enforceability of the remainder of this Agreement.
12.07. Headings and Interpretation. The Section headings contained
herein are for convenience only and shall not in any way affect the
interpretation or enforceability of any provision of this Agreement. Wherever
used in this Agreement, the singular shall include the plural, the plural the
singular, and use of any gender will be applicable to all genders.
12.08. Entire Agreement. This Agreement contains the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior oral or written communications or agreements between
the parties with respect to the subject matter hereof.
12.09. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one document.
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12.10. The Tax Matters Partner. EBITDA, Inc. shall be the Tax
Matters Partner, as defined in the Code, for the Partnership.
IN WITNESS WHEREOF, the parties hereto, by their duly authorized
representatives, have set their hands and seals as of the day and year first
written above with the intention of being legally bound thereby.
GENERAL PARTNER:
ATTEST: PDG, Inc.
/s/ XXXXX X'XXXX By: /s/ XXXXX X. XXXXXXXXX
------------------------------- ---------------------------------
Title: Xxxxx X'Xxxx Title: Xxxxx X. Xxxxxxxxx, Vice President
-------------------------- ------------------------------------
Assitant Secretary
LIMITED PARTNERS:
ATTEST: PDG Environmental, Inc.
/s/ XXXXX X'XXXX By: /s/ XXXX X. XXXXX
------------------------------- ---------------------------------
Title: Assistant Secretary Title: Xxxx X. Xxxxx, Chairman & CEO
-------------------------- ------------------------------------
Xxxxx X'Xxxx
ATTEST: Xxxxxx Environmental Services
Corporation
By: /s/ XXXX XXXXXX
------------------------------- ---------------------------------
Title: Senior Vice President-Law Title: Executive Vice President
-------------------------- ------------------------------------
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PDG/Xxxxxx, L.P.
Schedule A to Agreement of Limited Partnership
Amount of Initial
Capital Amount of Contributions Percentag
General Partner Contribution Under Section 6.02 Interest
--------------- ------------ ----------------- --------
PDG, Inc. $1.00 1.0% 1.0%
000 Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Limited Partners
----------------
PDG Environmental, Inc. $59.00 59.0% 59.0%
000 Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Xxxxxx Environmental $40.00 40.0% 40.0%
Services Corporation
0000 XxXxxxxxxx
Xxxxxxx, XX 00000
100.00%
