EXHIBIT 3.82
SECOND AMENDED AND RESTATED PARTNERSHIP AGREEMENT
THIS AMENDED AND RESTATED PARTNERSHIP AGREEMENT, dated as of September 28,
1991, by and among CAVENHAM FOREST INDUSTRIES INC., a Delaware corporation
("CFI"), CAVENHAM ENERGY RESOURCES INC., a Delaware corporation ("CER"), and
GOLD FIELDS MINING CORPORATION, a Delaware corporation ("GFMC") (each
individually, a "Partner" and, collectively, the "Partners").
R E C I T A L S :
2. CFI and GFMC formed a general partnership (the "Partnership") upon the
terms and conditions set forth in that certain Partnership Agreement, dated as
of March 3, 3991, by and between CFI and GFMC (the "Original Partnership
Agreement"), for the purposes of developing, exploiting and enhancing the
natural resources businesses owned by ▇▇▇▇▇▇ PLC and other businesses related to
natural resources as the Partnership may from time to time undertake, and, in
particular, the operation of the businesses involving timber and wood products
and gold and other mining (the "Businesses"), and to enhance the return and
financial strength of the Businesses.
3. As of ▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇ and GFMC amended and restated the Original
Partnership Agreement (the "Amended and Restated Partnership Agreement"), to,
among other things, add, as partners, CER, Gold Fields Operating Co.-Chimney
Creek, a Delaware corporation, Gold Fields Operating Co.-Mule Canyon, a Delaware
corporation, Gold Fields Operating Co.-Elkhorn, a Delaware corporation (each
individually, an "Additional Partner" and, collectively, the "Additional
Partners"), amend Articles 4, 7 and 9 thereof and make certain other changes to
the Original Partnership Agreement as therein provided.
4. The Partners pursuant to a contribution agreement among the Partners,
dated as of March 31, 1991 (the "Contribution Agreement"), and subject to
obtaining any necessary consents or approvals, transferred certain assets, to
the Partnership, which from such time has owned and operated, and is intended to
continue to own and operate, the Businesses associated with such assets.
5. Subsequent to March 31, 1991, all of the Additional Partners except
CER merged into GFMC (the "Merged Partners").
6. The Partners desire to amend the Amended and Restated Partnership
Agreement to provide for the deletion of references to the Merged Partners as
partners of the Partnership, and to make certain other modifications.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the Partners hereby covenant and agree as follows, and the
Amended and Restated Partnership Agreement is hereby further amended and
restated to read as follows:
ARTICLE 1
ORGANIZATIONAL MATTERS
1.1. The Partnership. Pursuant to the terms of the Original
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Partnership Agreement, CFI and GFMC associated themselves as a general
partnership (the "Partnership") under the laws of the State of Delaware, which
is hereby continued for the purposes and under the terms hereinafter set forth.
1.2. Name. The name of the Partnership shall be:
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"▇▇▇▇▇▇ Natural Resources Company"
The Businesses shall initially be operated as three divisions of the Partnership
(the "Divisions"), under the names "Cavenham Forest Industries Division",
"Cavenham Energy Resources Division" and "Gold Fields Mining Company", and three
subdivisions of Gold Fields Mining Company, under the names "Gold Fields
Operating Co.-Chimney Creek", "Gold Fields Operating Co.-Mesquite" and "Gold
Fields Operating Co.-Mule Canyon", and thereafter shall be called by such other
names as the Partners shall from time to time determine. The Partners shall
execute, publish and/or file all assumed or fictitious name, or other similar,
certificates required by law to be published and filed, or either, in connection
with the formation and operation of the Partnership in each state and locality
where it is necessary or desirable to publish or file any of the same in order
to form and maintain the Partnership and/or to operate the Businesses.
1.3. Principal Place of Business. The principal place of business of
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the Partnership shall be at Meadowood II Shopping Center, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇-▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other place as the Partnership, from
time to time, shall determine.
1.4. Partnership Act Ownership. Except as is expressly herein
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stipulated to the contrary, the rights and obligations of the Partners and the
administration and termination of the Partnership shall be governed by the
Uniform Partnership Act of the State of Delaware. The interest of each Partner
in the Partnership shall be personal property for all purposes. All real and
other property owned by the Partnership shall be deemed owned by the Partnership
as a partnership, and no Partner, individually, shall have any individual
ownership rights in and to such property.
1.5. Individual Authority. Each Partner, acting alone, shall have
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authority to act for, or undertake or assume any obligation or responsibility on
behalf of, the Partnership.
1.6. No Partner Responsible for Other's Commitments. No Partner
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shall be responsible or liable for any indebtedness or obligation of the other
Partner incurred either before or after the execution of this Agreement, nor
shall the Partnership be responsible or liable for any such indebtedness or
obligation of a Partner, except for those responsibilities, liabilities,
indebtedness or obligations assumed or incurred by the Partnership pursuant to
the terms of this Agreement or the
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Contribution Agreement (if and when such Contribution Agreement shall be
effective). Each Partner indemnifies and agrees to hold the other Partner and
the Partnership harmless from and against such obligations and indebtedness
except as aforesaid.
ARTICLE 2
PURPOSES AND POWERS
2.1. Purposes. The purpose of the Partnership is to own and operate
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the Businesses, to develop, exploit and enhance the resources of the
Partnership, to create an entity which will increase the financial leverage and
strength of the Businesses, and to carry out any other activities necessary or
incidental to the conduct, promotion or attainment of any of the purposes herein
specified as the Partners may from time to time direct.
2.2. Powers. The Partnership shall have such powers as are necessary
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or appropriate to carry out the purposes of the Partnership, including, without
limitation, the following powers:
(a) to purchase, borrow, acquire, hold, exchange, sell,
distribute, assign, transfer, lend, mortgage, pledge, hypothecate, convert,
redeem, escrow or reissue instruments evidencing its indebtedness;
(b) to issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and any other kinds of negotiable and non-negotiable
instruments and evidences of indebtedness, whether or not in connection with
borrowing money, and to guarantee the obligations of any subsidiary or any other
Affiliate (as defined hereinbelow) of the Partnership and to secure the payment
thereof (and of the interest thereon) by the creation of any interest in the
property or rights of the Partnership, or in any property owned by others when
the Partnership has the right so to do, whether owned by or subject to such
right of the Partnership at the time such indebtedness is incurred or
thereafter;
(c) to make such investments as the Partnership deems advisable
and approves;
(d) to form, own, manage and dissolve one or more subsidiaries;
(e) to have and maintain one or more offices within or without
the State of Delaware, and in connection therewith to rent, lease or purchase
office or manufacturing space, facilities and equipment, to engage and pay
personnel and do such other acts and things and incur such other expenses on its
behalf as may be necessary or advisable in connection with the maintenance of
such offices or manufacturing space or the conduct of the Businesses of the
Partnership;
(f) to open, maintain and close bank accounts, and to draw
checks and other orders for the payment of money;
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(g) to employ and dismiss from employment any and all employees,
agents or independent contractors;
(h) to ▇▇▇ and to defend suits, to prosecute, settle or
compromise claims against others, to compromise, settle or accept judgments or
claims against the Partnership and to execute all documents and make any
representations, admissions and waivers in connection therewith;
(i) to enter into, make and perform all such contracts,
agreements and other undertakings, including indemnity agreements, as may be
necessary or advisable or incident to the carrying out of the foregoing
purposes; and
(j) to execute federal mineral leases and to apply for and hold
federal leases, licenses and prospecting permits of all kinds, including, but
not limited to, leases or prospecting permits issued under the Mineral Lands
Leasing Act, the Mineral Leasing Act for Acquired Lands and Reorganization Plan
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(k) to take such other actions as the Partnership may deem
necessary or advisable in connection with the foregoing, including the retention
of agents, independent contractors, attorneys, accountants and other experts
selected by the Partnership, and in connection with the preparation and filing
of all Partnership tax returns.
The Partnership shall have all lawful powers necessary, suitable or
convenient for the furtherance of the aforesaid purposes, and, without limiting
the foregoing, the Partnership may carry out its objectives and accomplish its
purposes as principal or agent, directly or indirectly through one or more of
its subsidiaries or Affiliates, alone or with associates, or as a member or as a
participant in any firm, association, trust, partnership or other entity.
Although the Partnership may engage in any or all of the above activities, the
Partnership need not engage in any one or more of them.
As used herein, (i) "Affiliate" of a specified Person shall mean a
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, the Person specified, and
(ii) "Person" shall mean any individual, corporation, partnership, firm,
association or other entity.
ARTICLE 3
TERM
3.1. Term. The Partnership shall continue indefinitely, unless
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terminated as herein provided.
ARTICLE 4
CAPITAL CONTRIBUTIONS, INTERESTS
AND DISTRIBUTIONS
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4.1. Contribution by Partners. As of or prior to the date hereof,
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each Partner has contributed to the Partnership, as its initial capital
contribution, $100.00 (the "Initial Contribution"). On or about March 31, 1991
(or, to the extent required by the following sentence of Section 4.1, from time
to time thereafter), subject to obtaining any necessary consents or approvals,
each Partner shall contribute, or cause its subsidiaries to contribute, to the
Partnership, as its additional capital contribution, those assets which are
required to be contributed to the Partnership in accordance with the terms of
the Contribution Agreement, subject to the liabilities set forth in the
Contribution Agreement, which liabilities shall be expressly assumed by the
Partnership (the "Additional Capital Contributions"). To the extent that any
subsidiary of a Partner shall provide any Additional Capital Contributions and
shall not immediately thereafter be merged into such Partner, this Agreement
shall be amended to admit such subsidiaries as Partners. To the extent that any
assets which are required to be contributed to the Partnership in accordance
with the terms of the Contribution Agreement have not been contributed to the
Partnership as of the date of the Contribution Agreement, as a result of the
absence of contractual, regulatory, governmental or other consents or approvals
necessary to be obtained prior to such contribution, such assets shall be
contributed to the Partnership as soon as practicable after any such consent or
approval has been obtained. Each Partner shall use its best efforts to obtain
all consents and approvals necessary to contribute, in a timely fashion, to the
Partnership the assets which are required to be contributed to the Partnership
in accordance with the terms of the Contribution Agreement.
4.2. Capital Accounts.
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4.2.1. Initial Balance. Each Partner will have a capital
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account (a "Capital Account") which shall initially be equal to (a) the initial
Carrying Value (as hereinafter defined) of the assets contributed to the
Partnership by such Partner pursuant to the Contribution Agreement, plus (b) the
amount of any cash so contributed by such Partner, less (c) the amount of any
liability of such Partner assumed by the Partnership pursuant to the
Contribution Agreement.
4.2.2. Subsequent Adjustments. Each Partner's Capital Account
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generally shall be maintained and adjusted in accordance with sections 1.704-
1(b) and 1.704-1T(b) of the Treasury Regulations. There shall be credited to
each Partner's Capital Account (a) the amount of any cash, and the initial
Carrying Value of any assets other than cash, subsequently contributed by such
Partner to the capital of the Partnership, (b) such Partner's share of Net
Profit (as determined in accordance with Section 7.1.2), and (c) any items of
Gross Income or gain allocated to such Partner pursuant to Section 7.4, and
there shall be charged against each Partner's Capital Account (w) the amount of
all cash distributions to such Partner, (x) the fair market value of any
property distributed to such Partner by the Partnership (net of any liability
secured by such property that the Partner is considered to assume or take
subject to under section 752 of the Internal Revenue Code of 1986, as amended
(the
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"Code")), (y) such Partner's share of Net Loss (as determined in accordance with
Section 7.1.3), and (z) any items of deduction, loss or Section 705(a)(2)(B)
Expenditure (as hereinafter defined) allocated to such Partner pursuant to
Section 7.4.
4.2.3. In-Kind Distributions. If the Partnership at any time
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distributes any of its assets to any Partner in kind, the Capital Accounts of
the Partners shall be adjusted to account for the Partners' allocable shares (as
determined, in each case, in accordance with Article 7) of the Gross Income, Net
Profit or Net Loss that would have been realized by the Partnership had the
distributed assets been sold for their respective fair market values (taking
into account section 7701(g) of the Code) immediately prior to such
distribution.
4.2.4. Section 754 Elections. In the event that the Partnership
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makes an election under section 754 of the Code, the amount of any adjustments
to the bases (or Carrying Values) of the assets of the Partnership made pursuant
to section 743 of the Code shall not be reflected in the Capital Accounts of the
Partners, but the amounts of any adjustments to the bases (or Carrying Values)
of the assets of the Partnership made pursuant to section 734 of the Code as a
result of the distribution of property by the Partnership to a Partner (to the
extent that such adjustments have not previously been reflected in the Partners'
Capital Accounts) shall (a) be reflected in the Capital Account of the Partner
receiving such distribution in the case of a distribution in liquidation of such
Partner's interest in the Partnership and (b) otherwise be reflected in the
Capital Accounts of the Partners in the manner in which the unrealized income
and gain that is displaced by such adjustments would have been shared had the
property been sold at its Carrying Value immediately prior to such adjustments.
4.2.5. Transferee's Capital Accounts. In the event any
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interest in the Partnership is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of the transferor
to the extent related to the transferred interest.
4.2.6. Determinations. Except as otherwise provided in this
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Agreement, whenever it is necessary to determine the Capital Account of any
Partner, the Capital Account of such Partner shall be determined after giving
effect to all allocations pursuant to Article 7 with respect to transactions
effected, and all distributions made, prior to the date and time as of which
such determination is to be made.
4.2.7. Negative Balances. No Partner with a negative balance
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in its Capital Account shall have any obligation to the Partnership or any other
Partner to restore such negative balance.
4.2.8. Oil and Gas Properties. Any other provision of this
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Agreement to the contrary notwithstanding (a) each Partner's Capital Account
shall be adjusted in accordance with Treasury Regulation sections 1.704-1(b) (2)
(iv) (k) (3) and
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(4), dealing with depletion of oil and gas properties; and (b) allocations of
the total amount realized by the Partnership on its taxable disposition of an
oil or Was property shall' except to the extent governed by section 704(c) of
the Code or related principles under Treasury Regulation section 1.704-1(b) (4)
(i), be made in accordance with the sixth and seventh sentences of Treasury
Regulation section 1-704-1(b) (4) (v) in a manner consistent with Sections 7.1
and 7.2 hereof.
4.3. Additional Contributions. Except as expressly required by
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Section 4.1 hereof or as expressly agreed upon by the Partners, no Partner shall
have any right or obligation to make any contribution to the Partnership or to
advance any funds thereto.
4.4. Distributions. The Partnership shall distribute such cash or
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other property of the Partnership as may be approved by the Board (as defined in
Section 5.1 hereof) from time to time to the Partners, which distributions may
or may not, in the Board's discretion, be distributed according to the
Percentage Interests of the Partners, as calculated in accordance with Section
4.5 below.
4.5. Percentage Interests. The Percentage Interest of each Partner
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shall initially be equal to the percentage derived by dividing the amount of
such Partner's Capital Account, calculated immediately after the contribution
described in the second sentence of Section 4.1 hereof by the aggregate amount
of the Capital Accounts of all Partners so calculated, and shall be adjusted to
reflect any Additional Capital Contributions pursuant to Sections 4.1 and 4.3
hereof.
4.6. No Interest Payable. No Partner shall receive any interest on
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its contributions to the capital of the Partnership.
4.7. No Withdrawals. The capital of the Partnership shall not be
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withdrawn except as herein expressly stipulated
ARTICLE 5
MANAGEMENT OF THE PARTNERSHIP
5.1. Partnership Board. (a) The business and affairs of the
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Partnership shall be managed under the direction of a board (the "Board")
selected by the Partners, and the Board shall have all power and authority to
manage, and direct the management and the business and affairs of, the
Partnership. Any power not delegated pursuant to a policy of delegation adopted
by the Board shall remain with the Board. Approval by or action taken by the
Board in accordance with this Agreement shall constitute approval or action by
the Partnership and shall be binding on the Partners. The initial members of
the Board shall be as set forth in Exhibit A hereto, and their successors shall
be chosen by the affirmative vote of a majority of the Board then in office or
of the Partners.
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(b) In addition to the foregoing, each of the Divisions may select
their own boards, which shall direct the management, business and affairs of
such Divisions.
5.2. Operation of Board Proxies; Written Action. Meetings of the
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Board shall be held at such times and places as may be fixed by the Board.
Notice of meeting may be waived before or after a meeting by a written waiver of
notice signed by the member entitled to notice. A member's attendance at a
meeting shall constitute a waiver of notice unless the member states at the
beginning of the meeting his objection to the transaction of business because
the meeting was not lawfully called or convened. The vote of a majority of the
members of the Board present at a duly constituted meeting shall govern all of
the Board's actions and constitute approval by the Board. Each member of the
Board may vote by delivering his proxy to another member of the Board. The
Board may act without a meeting if the action taken is approved in advance in
writing by the unanimous consent of all members of the Board.
5.3. Officers. The Board (and the boards of each Division may
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appoint such officers, including, but not limited to, president, treasurer,
secretary, controller and one or more vice presidents (each, an "Officer") with
such titles and duties as may be approved by the Board (or the board of a
Division) .
5.4. Bank Accounts. The Partnership shall maintain bank accounts in
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such banks as the Board (or an Officer or Officers designated by the Board) may
designate exclusively for the deposit and disbursement of all funds of the
Partnership. All funds of the Partnership shall be promptly deposited in such
accounts. The Board (or an Officer or Officers designated by the Board) from
time to time shall authorize signatories for such accounts.
5.5. Fidelity Bonds and Insurance. The Partnership shall obtain
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fidelity bonds with reputable surety companies, covering all persons having
access to the Partnership's funds, and indemnifying the Partnership against loss
resulting from fraud, theft, dishonesty and other wrongful acts of such persons.
The Partnership shall carry or cause to be carried on its behalf with companies
acceptable to the Board all property, liability (including, without limitation,
product, general and employee medical liability) and workmen's compensation
insurance as shall be required under applicable mortgages, leases, agreements
and other instruments and statutes or as may be required by the Board, but never
in amounts less than those agreed upon by the Board.
ARTICLE 6
BOOKS AND RECORDS, AUDITS, ETC.
6.1. Books; Statements. The Partnership shall keep accurate, full
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and complete books and accounts showing its assets and liabilities, operations,
transactions and financial condition. The Board shall determine the methods to
be used in the preparation of financial statements and federal, state and
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municipal income and other tax or information returns for the Partnership, in
connection with all items of income and expense, including, but not limited to,
valuation of assets, the method of depreciation, elections, credits and
accounting procedures.
6.2. Other Information. The Partnership shall make available to each
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Partner such information and financial statements in addition to the foregoing
as shall be required by either of them in connection with the preparation of tax
returns, financial statements and other documents required to be filed under
foreign or federal laws and shall cooperate in the preparation of any such
documents.
6.3. Fiscal and Tax Year. The fiscal year and taxable year of the
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Partnership shall be April 1 through March 31, unless the Partners shall
hereafter in writing agree otherwise; the Partnership may, however, prepare
annual financial information as of any date convenient for the Partners and
their affiliates.
ARTICLE 7
ALLOCATIONS OF GROSS INCOME, NET PROFIT
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AND NET LOSS
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7.1. Basic Allocation Provisions.
7.1.1. Certain Definitions. (a) The term "Gross Income" means
the gross income, the term "Net Profit" means the taxable income, and the term
"Net Loss" means the taxable loss, in each case, as determined for federal
income tax purposes for the relevant period, with the following adjustments:
(i) items of gain, loss and deduction shall be computed
based upon the Carrying Value (as hereinafter defined) of each of the
Partnership's assets rather than upon the asset's adjusted basis for federal
income tax purposes;
(ii) any tax-exempt income received by the Partnership shall
be deemed for these purposes only to be an item of Gross Income;
(iii) the amount of any adjustment to the Carrying Value
of any asset of the Partnership pursuant to section 743 of the Code shall not be
taken into account;
(iv) any expenditure of the Partnership described in section
705(a)(2)(B) of the Code and any expenditure, considered to be an expenditure
described in section 705(a)(2)(B) of the Code pursuant to the Treasury
Regulations under section 704(b) of the Code (each such expenditure a "Section
705(a)(2)(B) Expenditure") shall be treated as a deductible expense;
(v) any percentage depletion in respect of an item of
depreciable property of the Partnership which exceeds the adjusted tax basis of
such property ("Excess Percentage Depletion") shall be excluded from the
computation of Net Profit and Net Loss; and
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(vi) any Gross Income, gain, loss, deduction or Section
7.05(a)(2)(B) Expenditure allocated to the Partners pursuant to Section 7.4
hereof shall be excluded from the computation of Net Profit and Net Loss.
(b) "Carrying Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(i) the initial Carrying Value of any asset contributed to
the Partnership shall be such asset's gross fair market value at the time of
such contribution:
(ii) if the Partnership elects to adjust the Capital Account
balances of the Partners to reflect the fair market value of the Partnership's
assets in accordance with Treasury Regulation section 1.704-l(b)(2)(iv)(f), the
Carrying Values of all Partnership assets shall be adjusted to equal their
respective gross fair market values at the time of such election; and
(iii) if the Carrying Value of an asset has been determined
pursuant to clause (i) or (ii) of this Section 7.1.1(b), such Carrying Value
shall thereafter be adjusted in the same manner as would the asset's adjusted
basis for federal income tax purposes.
(c) "Quarterly Preference Amount" with respect to a Partner for a
calendar quarter means the product of (i) 1.75%, and (ii) the positive amount,
if any, by which (A) the sum of the amount of cash and the initial Carrying
Value of any assets contributed to the Partnership by such Partner pursuant to
Section 4.1 or Section 4.3 hereof on or before the last day of such quarter,
less the liabilities of the Partner assumed by the Partnership in connection
with any such contribution, plus the aggregate Quarterly Preference Amount with
respect to such Partner for all calendar quarters preceding such quarter,
exceeds (B) the aggregate amount of cash distributions, and the aggregate value
of property distributions, received by such Partner from the Partnership
pursuant to Section 4.4, Section 9.3 or Section 9.4 hereof on or before the last
day of such quarter; provided, however, that appropriate adjustment shall be
made to the calculation of a Partner's Quarterly Preference Amount to reflect
contributions of cash or property, and/or distributions of cash or property,
occurring during the calendar quarter for which such Quarterly Preference Amount
is being determined.
(d) "Untaxed Preference Amount" of a Partner means, at any given
date, the excess, if any, of the aggregate of such Partner's Quarterly
Preference Amounts with respect to calendar quarters ending on or before such
date, over the amount by which (i) the aggregate amount of Net Profit previously
allocated to such Partner pursuant to Section 7.1.2(b) hereof, exceeds (ii) the
aggregate amount of Excess Depletion previously allocated to such Partner
(pursuant to Section 7.2.2 hereof) with respect to Gross Income underlying such
Net Profit.
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7.1.2. Allocation of Net Profit. Net Profit of the Partnership for
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each fiscal year shall, after giving effect to all Capital Account adjustments
attributable to contributions and distributions made during such year, be
allocated among the Partners as follows:
(a) First, to the Partners, in an amount not exceeding their
aggregate negative Capital Account balances (i) first, so as to cause their
respective negative Capital Account balances to be i the same proportions as are
their respective Percentage Interests, and (ii) thereafter, in accordance with
their respective Percentage Interests;
(b) Second, to the Partners, in proportion to their respective
untaxed Preference Amounts (determined as of the end of such year), until the
Net Profit so allocated, less the amount of Excess Depletion allocable to the
Partners (pursuant to Section 7.2.2 hereof) with respect to the Gross Income
underlying such Net Profit, equals their aggregate Untaxed Preference Amounts
(as so determined); and
(c) Third, to the Partners in accordance with their respective
Percentage Interests.
7.1.3. Allocation of Net Loss. Net Loss of the Partnership for
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each fiscal year shall, after giving effect to all Capital Account adjustments
attributable to contributions and distributions made during such year, be
allocated among the Partners as follows:
(a) First, to the Partners, in an amount not exceeding the amount
of Net Profit, if any, theretofore allocated pursuant to clause (i) to Section
7.1.2(a), in proportion to the respective amounts, if any, so allocated; and
(b) Second, to the Partners in accordance with their respective
Percentage Interests.
7.2. Tax Allocation Provisions.
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7.2.1. In General. For income tax purposes, all items of Gross
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Income, gain, loss, deduction and Section 705(a)(2)(B) Expenditure for a fiscal
year (other than items allocated pursuant to Section 7.2.2 or Section 7.2.3.)
hereof shall be allocated to the Partners in the same manner as is the
Partnership's Net Profit or Net Loss for such year; provided, however, that, if
the Carrying Value of any property of the Partnership differs from its adjusted
basis for federal income tax purposes, then items of gain, loss and deduction
the amount of which is affected by such adjusted basis (other than items
allocated pursuant to Section 7.2.2) shall be allocated among the Partners in a
manner that takes account of the variation between the adjusted basis of the
property for tax purposes and its Carrying Value in the manner provided for
under section 704(c)(1)(A) of the Code and the Treasury Regulations thereunder.
7.2.2. Excess Depletion. Excess Depletion, if any, for a fiscal
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year shall, pursuant to Treasury Regulation
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section 1.704-1(b)(4)(iii), be allocated in accordance with the allocation of
Gross Income for such year.
7.2.3. Special Allocations. Allocations pursuant to Section 7.4
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of items of Gross Income, gain, loss, deduction, and Section 705(a)(2)(B)
Expenditure of the Partnership shall, except as otherwise required by Treasury
Regulations under section 704(b) of the Code, consist of a pro rata portion of
each item of Gross Income, gain, loss, deduction, and Section 705(a)(2)(B)
Expenditure of the Partnership, as appropriate, for such fiscal year.
7.2.4. Credits. Any credits of the Partnership shall be
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allocated among the Partners in accordance with their respective Percentage
Interests.
7.3. Other Tax Matters.
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7.3.1. Designation of Tax Matters Partner. (a) GFMC shall be
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the tax matters partner (the "TMP") of the Partnership within the meaning of
section 6231(a)(7) of the Code. The TMP shall not extend the statute of
limitations on behalf of the Partnership, select the Partnership's choice of
litigation forum in a tax controversy or take any other action in its capacity
as TMP without the consent of the other Partners. The TMP shall keep the other
Partners fully advised of the progress of any audit and shall supply the other
Partners with copies of any written communications received from the Internal
Revenue Service or other taxing authority relating to any audit within ten days
after receipt thereof, and shall at least five business days prior to submitting
any materials to the Internal Revenue Service, or other taxing authority,
provide such materials to the other Partners. The TMP shall be reimbursed by the
Partnership for any reasonable expenses incurred in its capacity as TMP.
(b) Nothing in this Section 7.3.1 is intended to authorize the
TMP to take any action that is left to the determination of a Partner under
sections 6222 through 6233 of the Code.
7.3.2. Compliance with Treasury Regulations. The provisions of
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this Article 7 and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Treasury Regulation
sections 1.704-1(b) and 1.704-1T(b), and shall be interpreted and applied in a
manner consistent with such Treasury Regulations.
7.4. Special Allocation Provisions.
-----------------------------
7.4.1. Certain Definitions. (a) "Minimum Gain" for the
-------------------
Partnership means the amount determined by computing with respect to each non-
recourse liability of the Partnership the amount of Net Profit, if any, that
would be realized by the Partnership if it disposed of the property securing
such liability in full satisfaction thereof, and by then aggregating the amounts
so computed.
12
(b) "Share of Minimum Gain" means, for each Partner, the excess,
if any, of (i) the sum of the aggregate Non-Recourse Deductions allocated to
such Partner (and such Partner's predecessors in interest), cumulatively from
the inception of the Partnership, and the aggregate distributions to such
Partner (and such Partner's predecessors in interest), cumulatively from the
inception of the Partnership, of proceeds of a non-recourse liability that are
allocable to an increase in Partnership Minimum Gain, over (ii) the sum of such
Partner's (and such Partner's predecessors') aggregate share (determined as
described below) of any net decreases in Partnership Minimum Gain, cumulatively
from the inception of the Partnership. For purposes of this Section 7.4: (a) a
deduction shall constitute a "Non-Recourse Deduction" if, and to the extent
that, at the time such item was incurred it increased the amount of the
Partnership's Minimum Gain; (b) a Partner's share of the net decrease in
Partnership Minimum Gain during a taxable year shall be an amount that bears the
same relation to the net decrease in Minimum Gain during such year as such
Partner's Share of Minimum Gain at the end of the prior taxable year (or if
later at the time immediately following the last time that the capital accounts
of the Partners are increased pursuant to Treasury Regulation Section 1.704-
l(b)(2)(iv)(f) or (r) to reflect the revaluation of Partnership property subject
to one or more non-recourse liabilities of the Partnership) bears to the amount
of Minimum Gain at the end of such prior taxable year (or such later date); (c)
a Partner's share of any decrease in Partnership Minimum Gain resulting from a
revaluation of Partnership property equals the amount of the increase in such
Partner's Capital Account attributable to such revaluation to the extent of the
reduction in Minimum Gain caused by such revaluation; (d) in determining the net
increase or decrease in Partnership Minimum Gain during any Partnership taxable
year in which the Capital Accounts of the Partners are increased pursuant to a
revaluation of Partnership property subject to one or more non-recourse
liabilities of the Partnership, any decrease in Partnership Minimum Gain
attributable to each such revaluation shall be added back to the net decrease or
increase otherwise determined; and (e) a distribution to a Partner by the
Partnership that is allocable to the proceeds of any non-recourse liability of
the Partnership is allocable to an increase in the Partnership Minimum Gain to
the extent of the amount of the net increase, if any, in Partnership Minimum
Gain for such taxable year that is allocated to such non-recourse liability
under Treasury Regulation Section 1.704-1T(b)(4) (iv)(g)(2).
(c) "Partner Minimum Gain" means Minimum Gain that would result
if all partner non-recourse debt, as defined in Treasury Regulation Section
1.704-1T(b)(4)(iv)(k)(4) ("Partner Non-Recourse Debt"), were treated as non-
recourse liabilities of the Partnership and the Partnership had no other non-
recourse liabilities.
(d) "Share of Partner Minimum Gain" means, for each Partner,
such Partner's Share of Minimum Gain that would result if all Partner Non-
Recourse Debt were treated as non-recourse liabilities of the Partnership and
the Partnership had no other non-recourse liabilities.
13
7.4.2. Minimum Gain Chargeback. Notwithstanding any other
-----------------------
provisions in this Agreement to the contrary, if in any fiscal year there is a
net decrease in the amount of the Partnership's Minimum Gain or in the amount of
Partner Minimum Gain, each Partner shall be allocated income and gain (including
Gross Income) for such year or other period (and, if necessary, for subsequent
years) in proportion to, and to the extent of, an amount equal to the greater of
(i) the portion of such Partner's share of the net decrease in Minimum Gain or
Partner Minimum Gain during such year or period that is allocable to the
disposition of Partnership property subject to one or more non-recourse
liabilities of the Partnership (including Partner Non-Recourse Debt), or (ii)
the negative balances (computed with the adjustments described below) in such
Partner's Capital Accounts at the end of such year (prior to any allocation
pursuant to Section 7.1, Section 7.4.3, the last sentence of Section 7.4.4 or
the last sentence of Section 7.4.5). In determining a Partner's negative Capital
Account balance for purposes of this Section 7.4.2, a Partner's Capital Account
balance shall be increased by the amount, if any, that such Partner is obligated
to restore to the Partnership upon liquidation and shall be decreased by the
amounts of any net allocations, distributions or other items specified in the
first sentence of Section 7.4.3 that, as of the end of the taxable year, are
reasonably expected to be made to such Partner. For purposes of this Section
7.4.2 and Section 7.4.3, the amount that a Partner may be obligated to
contribute to the Partnership upon liquidation shall be considered to include:
(a) such Partner's allocable share (as determined under section 752 of the Code)
of any recourse indebtedness of the Partnership which could not be repaid out of
the Partnership's assets if all such assets were sold at their respective
Carrying Values; (b) any unconditional obligation of such Partner to contribute
additional amounts to the capital of the Partnership in the future (to the
extent not previously taken into account in determining such Partner's share of
recourse liabilities of the Partnership); (c) such Partner's Share of Minimum
Gain; and (d) such Partner's Share of Partnership Minimum Gain. In the event any
items of income and gain "including Gross Income) of the Partnership are
reallocated to a Partner pursuant to the first sentence of this Section 7.4.2,
subsequent items of loss, deduction, or Section 705(a)(2)(B) Expenditure of the
Partnership shall be allocated (prior to any allocation pursuant to Section 7.1,
but subject to Section 7.4.4) to the Partners in a manner designed to result in
each Partner having a Capital Account balance equal to what it would have been
had the reallocation of items of income and gain (including Gross Income)
pursuant to the first sentence of this Section 7.4.2 not occurred. Allocations
of income and gain (including Gross Income) made pursuant to this Section 7.4.2
shall be made with respect to Partnership Minimum Gain prior to any allocation
made pursuant to this Section 7.4.2 with respect to Partner Minimum Gain.
7.4.3. Qualified Income Offset. Notwithstanding any other
-----------------------
provision in this Agreement (other than Section 7.4.2), if (i) during any fiscal
year a Partner (a) is allocated pursuant to section 706(d) of the Code or
Treasury Regulation section 1.751-1(b)(2)(ii) any items of loss, deduction or
Section 705(a)(2)(B) Expenditure, (b) is distributed any cash or property
14
from the Partnership to the extent such distributions exceed offsetting
increases to such Partner's Capital Account that are reasonably expected to
occur during such year, or (c) receives any other adjustment, allocation or
distribution described in Treasury Regulation section 1.704-1(b)(2) (ii) (d)
(4), (5) or (6) and, as a result of such adjustment, allocation or distribution,
such Partner has a Qualified Income Offset Amount, then (ii) items of income and
gain (including Gross Income) for such fiscal year (and, if necessary,
subsequent years), shall (prior to any allocation pursuant to Section 7.1, the
last sentence of Section 7.4.4 or the last sentence of Section 7.4.5, but
subsequent to any allocation pursuant to Section 7.4.2) be allocated to such
Partner in an amount equal to his Qualified Income Offset Amount. As used
herein, the term "Qualified Income Offset Amount" for a Partner means the
excess, if any, of (x) the negative balance in a Partner's Capital Account
immediately after the adjustment, allocation or distribution described in clause
(i) of the preceding sentence (but without regard to any allocation pursuant to
clause (ii) of the preceding sentence), over (y) the maximum amount that such
Partner may be obligated to contribute to the Partnership upon liquidation as
determined pursuant to the third sentence of Section 7.4.2. In the event any
items of income and gain (including Gross Income) of the Partnership are
reallocated to a Partner pursuant to the first sentence of this Section 7.4.3,
subsequent items of loss, deduction or Section 705(a)(2)(B) Expenditure of the
Partnership shall be allocated (prior to any allocation pursuant to Section 7.1,
but subject to Sections 7.4.4 and 7.4.5) to the Partners in a manner designed to
result in each Partner having a Capital Account balance equal to what it would
have been had the reallocation of items of income and gain (including Gross
Income) pursuant to the first sentence of this Section 7.4.3 not occurred.
7.4.4. Limitations on Loss Allocation. Notwithstanding the
------------------------------
provisions of Section 7.1.4, in no event shall Net Loss (or items thereof) of
the Partnership be allocated to a Partner if such allocation would result in
such Partner having a Qualified Income Offset Amount. Any allocation to a
Partner which is prevented by the operation of the preceding sentence shall be
reallocated in accordance with Section 7.1.4, subject to the subsequent
provisions of this Section 7.4.4. For purposes of this Section 7.4.4, the
determination of whether an allocation of Net Loss (or items thereof) would
produce a Qualified Income Offset Amount for a Partner shall be made after
reducing the Partner's Capital Account by the amounts of any adjustment,
allocation or distribution described in clause (i) of the first sentence of
Section 7.4.3 that, as of the end of the fiscal year, are reasonably expected to
be made to the Partner. In the event any Net Loss of the Partnership is
reallocated from a Partner pursuant to the first sentence of this Section 7.4.4,
subsequent items of income and gain (including Gross Income) will first be
allocated (subject to Sections 7.4.2 and 7.4.3) to the Partners in a manner
designed to result in each Partner having a Capital Account balance equal to
what it would have been had the reallocation pursuant to the first sentence of
this Section 7.4.4 not occurred.
15
7.4.5. Allocation of Partner Non-Recourse Deductions. Items of
---------------------------------------------
loss, deduction and Section 705(a)(2)(B) Expenditures attributable, under
Treasury Regulation section 1.704-1T(b)(4)(iv)(h), to Partner Non-Recourse Debt
shall (prior to any allocation pursuant to Section 7.1, but subject to the
provisions of Section 7.4.4) be allocated, as provided in Treasury Regulation
section 1.704-1T(b)(4)(iv)(h), to the Partners in accordance with the ratios in
which they bear the economic risk of loss for such debt. In the event any items
of loss, deduction and Section 705(a)(2)(B) Expenditure of the Partnership are
allocated pursuant to the first sentence of this Section 7.4.5, subsequent items
of income and gain (including Gross Income) shall (prior to any allocation
pursuant to Section 7.1, and subject to Sections 7.4.2 and 7.4.3) be allocated
to the Partners in a manner designed to result in each Partner having a Capital
Account balance equal to what it would have been had the reallocation pursuant
to the first sentence of this Section 7.4.5 not occurred.
ARTICLE 8
ASSIGNMENT AND RIGHTS TO
SALE OF INTEREST
8.1. Consent Required. Except as provided in this Agreement, without
----------------
the prior written consent of the other Partner (which may be withheld for any or
no reason), no Partner, or any assignee or successor in interest of any Partner,
shall (voluntarily or involuntarily) sell, assign, give, pledge, hypothecate,
encumber or otherwise transfer its interest in the Partnership (including a
transfer pursuant to a foreclosure sale of any of the assets of a Partner), or
in any part thereof, except that a Partner may sell, assign or otherwise
transfer its interest in the Partnership to any of its Affiliates without such
prior written consent.
8.2. Other Assignment Void. Any purported assignment or transfer of
---------------------
an interest in the Partnership not permitted by this Article 8 shall be null and
void and have no effect whatsoever.
ARTICLE 9
DISSOLUTION
9.1. Right to Dissolve the Partnership. The Partnership shall
---------------------------------
continue until dissolved and terminated pursuant to the terms of this Agreement.
No Partner shall have the right to terminate this Agreement or dissolve the
Partnership by its express will or by withdrawal without the express written
consent of the other Partners or the Board as herein set forth. The Partnership
shall dissolve at any time upon the agreement of a majority of the Partners or
the approval of a majority of the Board.
9.2. Winding us of the Partnership. Upon dissolution of the
-----------------------------
Partnership, the Partnership's business shall be wound up and all its assets
distributed in liquidation; provided, however,
-------- -------
16
that the Businesses of the Partnership shall be operated in the normal course of
events during the winding up period (except for sales of assets of the
Businesses, or parts thereof, as approved by the Board). Upon dissolution, the
Partnership shall continue to act through the Board or an Officer designated by
the Board.
9.3. Distributions of Cash; Allocations. Upon the dissolution of the
----------------------------------
Partnership for any reason, during the period of liquidation and until
termination of the Partnership, the Partners shall continue to receive the cash
and/or other property and to share profits and losses for all tax and other
purposes as provided elsewhere in this Agreement.
9.4. Distribution of Proceeds of Liquidation. Regardless of the
---------------------------------------
capital and undistributed earnings accounts of the Partners or their shares of
profits and losses or their respective rights to receive distributions, the
proceeds from liquidation shall be applied and distributed in the following
order of priority:
(a) First, to the payment of (i) debts and liabilities of the
Partnership, except loans or advances that may have been made by any
of the Partners to the Partnership, and (ii) expenses of liquidation;
(b) Second, to the setting up of any reserves which the Board
may deem necessary for any contingent or unforeseen liabilities or
obligations of the Partnership or of the Partners arising out of or in
connection with the Partnership. Such reserves may be paid over by
the Partners to a bank or trust company acceptable to the Board to be
held in escrow for the purpose of disbursing such reserves in payment
of any of the aforementioned liabilities or obligations, and, at the
expiration of such period as the Board shall deem advisable,
distributing the balance, if any, thereafter remaining, in the manner
hereinafter provided:
(c) Third, to the repayment of any other loans that may have
been made by any of the Partners to the Partnership: and
(d) Fourth, any balance remaining shall be distributed to the
Partners in accordance with their respective positive Capital Account
balances.
No Partner shall be obliged to restore any negative balance in its Capital
Account.
If a liquidating distribution is to be made at a time when there is a
material difference between the aggregate Carrying Values and the aggregate fair
market values of the Partnership's properties, each Partner's Capital Account
shall be adjusted immediately before the distribution to reflect a revaluation
of the Partnership's properties to their respective fair market values in
accordance with the provisions of Treasury Regulation section 1.704-
1(b)(2)(iv)(f)(5).
17
ARTICLE 10
MISCELLANEOUS
10.1. Notices. All notices and other communications under this
-------
Agreement shall be in writing and shall be considered given when delivered, if
hand delivered, delivered by facsimile transmission, or mailed by prepaid
registered mail, return receipt requested, to the parties at the address given
below (or at such other address as a party may specify by notice pursuant to
this provision):
(a) If to CFI or CER, to:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(b) If to GFMC, to:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
10.2. Additional Documents and Acts. In connection with this
-----------------------------
Agreement, as well as all transactions contemplated by this Agreement, each
Partner agrees to execute and deliver such additional documents and instruments,
and to perform such additional acts, as may be necessary or appropriate to
effectuate, carry out and perform all of the terms, provisions and conditions of
this Agreement, and all such transactions. All approvals of either party
hereunder shall be in writing.
10.3. Interpretation. This Agreement and the rights and obligations
--------------
of the parties shall be construed in accordance with and governed by the laws of
the State of Delaware applicable to agreements made and to be performed wholly
within such jurisdiction.
10.4. Pronouns. All pronouns and any variations thereof shall be
--------
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person or persons may require.
10.5. Entire Agreement. This instrument contains all of the
----------------
understandings and agreements of whatsoever kind and nature existing between the
parties hereto with respect to this Agreement and the rights, interests,
understandings, agreements and obligations of the respective parties pertaining
to the Partnership.
10.6. References of this Agreement. Numbered or lettered articles,
----------------------------
sections and subsections herein contained refer to articles, sections and
subsections of this Agreement unless otherwise expressly stated.
18
10.7. Headings. All headings herein are inserted only for
--------
convenience and ease of reference and are not to be considered in the
construction or interpretation of any provision of this Agreement.
10.8. Binding Effect. Except as herein otherwise expressly
--------------
stipulated to the contrary, this Agreement shall be binding upon and inure to
the benefit of the parties signatory hereto, and their respective successors and
assigns.
10.9. Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original and each of which shall constitute one
and the same Agreement.
10.10. Amendments. This Agreement may not be amended, altered or
----------
modified except by a written instrument signed by each of the Partners.
10.11. Severability. If any term or condition of this Agreement
------------
shall be invalid or unenforceable to any extent or in any application, then the
remainder of this Agreement, and such term or condition except to such extent or
in such application, shall not be affected thereby, and each and every term and
condition of this Agreement shall be valid and enforceable to the fullest extent
and in the broadest application permitted by law.
19
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CAVENHAM FOREST INDUSTRIES INC., a
Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
-----------------------------
Title: ___________________________
CAVENHAM ENERGY RESOURCES INC., a
Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
-----------------------------
Title: ___________________________
GOLD FIELDS MINING CORPORATION, a
Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
-----------------------------
Title: ___________________________
20
EXHIBIT A
---------
INITIAL MEMBERS OF THE BOARD OF THE PARTNERSHIP
-----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
21
FIRST AMENDMENT OF
SECOND AMENDED AND RESTATED PARTNERSHIP AGREEMENT
THIS FIRST AMENDMENT OF SECOND AMENDED AND RESTATED PARTNERSHIP AGREEMENT
(this "Amendment"), dated as of June 25, 1993, by and among CAVENHAM FOREST
INDUSTRIES INC., a Delaware corporation, CAVENHAM ENERGY RESOURCES INC., a
Delaware corporation, and GOLD FIELDS MINING CORPORATION, a Delaware corporation
(each individually, a "Partner" and, collectively, the "Partners").
R E C I T A L S :
The Partners are parties of the Second Amended and Restated
Partnership Agreement, dated as of September 28, 1991 (the "Partnership
Agreement") which establishes a general partnership known as ▇▇▇▇▇▇ Natural
Resources Company (the "Partnership").
1. The Partnership, pursuant to the Asset Exchange Agreement dated
January 25, 1993, between Santa Fe Pacific Minerals Corporation and certain of
its affiliates and the Partnership, has acquired certain coal and coal related
properties and certain quarry and quarry related properties, and in exchange for
certain gold and gold related properties.
2. In view of the addition of the coal and quarry assets and related
assets to the assets of the Partnership, the Partners desire to make the
following amendment to the Partnership Agreement:.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the Partners hereby agree to amend the Partnership Agreement
as follows:
Section 1.2 of the Partnership Agreement is hereby amended to read as
follows:
"1.2 Name. The name of the Partnership shall be:
----
"▇▇▇▇▇▇ Natural Resources Company"
The Businesses shall be operated as five divisions of the Partnership (the
"Divisions"), under the names "Cavenham Forest Industries Division",
"Cavenham Energy Resources Division", "Gold Fields Mining Company", "▇▇▇
Ranch Coal Company" and "Western Rock Products", "Western Arizona Rock
Products", and "Cal West Rock Products" (and such other names as the
Partners may adopt from time to time for a division consisting of the
quarry and quarry related assets of the Partnership), and shall thereafter
be called by such other names as the Partners shall from time to time
determine. The Partners shall execute, publish and/or file all assumed or
fictitious name, or other similar, certificates required by law to be
published and filed, or either, in connection with the formation and
operation of the Partnership in each state and locality it is necessary or
desirable to publish or file any of the same in order to form and
maintained the Partnership and/or to operated the Businesses."
22
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written
CAVENHAM FOREST INDUSTRIES, INC., a
Delaware corporation
By: [Executed]
--------------------------------
Title: ______________________________
CAVENHAM ENERGY RESOURCES,
INC., a Delaware corporation
By: [Executed]
--------------------------------
Title: ______________________________
GOLD FIELDS MINING
CORPORATION,
a Delaware corporation
By: [Executed]
--------------------------------
Title: ______________________________
23