1
Exhibit 3.1
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
ORBCOMM GLOBAL, L.P.
2
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
ORBCOMM GLOBAL, L.P.
Table of Contents
Page
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SECTION 1 THE LIMITED PARTNERSHIP.....................................................1
1.1. Formation...............................................................1
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1.2. Name....................................................................2
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1.3. Nature of the Business..................................................2
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1.4. Principal Office........................................................2
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1.5. Fiscal Year.............................................................2
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1.6. Delaware Office; Agent for Service of Process...........................2
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SECTION 2 DEFINITIONS.................................................................2
2.1. Adjusted Property.......................................................2
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2.2. Affiliate...............................................................3
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2.3. Agreement...............................................................3
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2.4. Business Day............................................................3
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2.5. Capital Account.........................................................3
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2.6. Carrying Value..........................................................3
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2.7. Certificate ............................................................3
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2.8. Definitive Agreements ..................................................3
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2.9. Delaware Act ...........................................................3
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2.10. Event of Withdrawal....................................................3
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2.11. General Partner........................................................4
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2.12. Indemnified Party......................................................4
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2.13. Limited Partner........................................................4
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2.14. Master Agreement.......................................................4
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2.15. Net Income and Net Loss................................................4
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2.16. Net Value..............................................................4
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2.17. Omnibus Agreement......................................................4
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2.18. Original Agreement.....................................................4
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2.19. Participation Percentage...............................................4
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2.20. Partners...............................................................4
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2.21. Partnership............................................................4
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2.22. Partnership Interest...................................................5
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2.23. Partnership Year ......................................................5
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2.24. Recapture Income.......................................................5
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2.25. Restatement Date.......................................................5
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2.26. Section................................................................5
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2.27. Tax Matters Partner.......................................................5
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2.28. Transfer..................................................................5
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2.29. Unrealized Gain...........................................................5
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2.30. Unrealized Loss...........................................................5
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SECTION 3 PARTNERSHIP INTERESTS AND CAPITAL CONTRIBUTIONS................................5
3.1. Partnership Interests......................................................5
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3.2. Withdrawal of Capital Contributions........................................6
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3.3. Loans......................................................................6
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3.4 Additional Capital Contributions............................................6
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SECTION 4 DISTRIBUTIONS..................................................................7
4.1. Distributions..............................................................7
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4.2. Minimum Distribution.......................................................8
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4.3. Nature of Distributions....................................................8
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4.4. Tax Payments...............................................................8
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SECTION 5 PARTNERS' ACCOUNTS; ALLOCATION OF PARTNERSHIP INCOME AND EXPENSES..............8
5.1. Maintenance of Capital Accounts............................................8
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5.2. Allocations of Net Income and Net Loss....................................11
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SECTION 6 MANAGEMENT.....................................................................14
6.1. Authority of General Partner .............................................14
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6.2. OCC Approval..............................................................15
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6.3. OCC Approval..............................................................15
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6.4. OCC Approval..............................................................16
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6.5. Meetings .................................................................17
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6.6. Representation at Meetings; Reimbursement.................................17
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6.7. Designation of Officers...................................................17
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6.8. Removal of Officers ......................................................18
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SECTION 7 AGREEMENTS AND AUTHORITY OF THE PARTNERS......................................18
7.1. Rights and Duties of Limited Partners.....................................18
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7.2. Restrictions on General Partner's Authority; Loss Sharing.................19
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7.3. Exculpation...............................................................19
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7.4. Other Activities..........................................................19
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SECTION 8 ACCOUNTS......................................................................20
8.1. Books.....................................................................20
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8.2. Partners' Accounts........................................................20
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8.3. Certificates, Reports, Returns and Audits.................................20
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8.4. Auditors..................................................................21
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8.5. Review Policies...........................................................21
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SECTION 9 TRANSFERS OF PARTNERSHIP INTERESTS; WITHDRAWALS...............................21
9.1. Transfer of Partnership Interests.........................................21
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9.2. Prohibited Transfers Void.................................................21
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9.3. Withdrawal of Partners....................................................21
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SECTION 10 DISSOLUTION..................................................................22
10.1. Events of Dissolution....................................................22
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10.2. Final Accounting.........................................................22
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10.3. Liquidation..............................................................22
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10.4. Distribution in Kind ....................................................22
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10.5. Cancellation of Certificate..............................................22
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SECTION 11 NOTICES......................................................................23
11.1. Method of Notices........................................................23
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11.2. Routine Communications...................................................23
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11.3. Computation of Time......................................................23
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SECTION 12 GENERAL PROVISIONS...........................................................23
12.1. Entire Agreement.........................................................23
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12.2. Amendment; Waiver........................................................23
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12.3. Governing Law............................................................24
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12.4. Binding Effect...........................................................24
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12.5. Counterparts.............................................................24
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12.6. Separability.............................................................24
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12.7. Headings.................................................................24
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12.8. Gender and Number........................................................24
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12.9. Waiver of Partition and Dissolution......................................24
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12.10. Coordination with Master Agreement......................................24
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12.11. Dispute Resolution......................................................24
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AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
ORBCOMM GLOBAL, L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (the
"Agreement") of ORBCOMM GLOBAL, L.P. (the "Partnership") is made and entered
into as of January 1, 2000 by and between TELEGLOBE MOBILE PARTNERS, a Delaware
general partnership ("Teleglobe Mobile"), as general partner (the "General
Partner"), and ORBITAL COMMUNICATIONS CORPORATION, a Delaware corporation
("OCC"), and Teleglobe Mobile as limited partners (the "Limited Partners").
The General Partner and the Limited Partners are collectively referred to
herein as the "Partners". This Agreement amends and restates the Restated
Agreement of Limited Partnership of ORBCOMM Global, L.P. dated September 15,
1995, as amended by Amendment No. 1 to Restated Agreement of Limited
Partnership of ORBCOMM Global, L.P. dated as of December 2, 1996 (the "1995
Agreement") and by the Omnibus Agreement dated as of January 1, 2000 entered
into among the Partners, Orbital Sciences Corporation, a Delaware corporation
("Orbital"), and Teleglobe Inc., a Canadian corporation ("Teleglobe"), and the
Partnership (the "Omnibus Agreement").
WHEREAS, the Partnership was organized, in accordance with the
provisions of the Delaware Act (as hereinafter defined), by the filing of a
Certificate of Limited Partnership with the Secretary of State of the State of
Delaware (the "Certificate") pursuant to Section 17-201 of the Delaware Act;
WHEREAS, upon the filing of the Certificate, the Partners entered into
an Agreement of Limited Partnership dated as of June 30, 1993 (the "Original
Agreement") and the Partnership entered into agreements with OCC, Orbital and
Teleglobe for the development, construction, operation and marketing of the
ORBCOMM System (as hereinafter defined); and
WHEREAS, pursuant to the terms of the Omnibus Agreement, the Partners
revised the terms of the 1995 Agreement setting forth their agreements with
respect to the conduct of the business of the Partnership and each of their
rights and obligations as Partners.
NOW THEREFORE, the Partners, in consideration of the foregoing
premises, the agreements and covenants contained herein and other good and
valuable consideration received, the receipt and sufficiency of which are
hereby acknowledged, hereby agree as follows:
SECTION 1
THE LIMITED PARTNERSHIP
1.1. Formation. The Partnership was formed and is being continued
as a limited partnership pursuant to the Delaware Act.
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1.2. Name. The name of the Partnership shall be ORBCOMM Global,
L.P., but the business of the Partnership may be conducted under any other name
agreed to by the General Partner and, in such event, the General Partner shall
notify the Partners of such name change promptly thereafter.
1.3. Nature of the Business. The business of the Partnership shall
be to engage in the development, construction, operation and marketing of a
global digital satellite communications system of low-Earth orbit satellites
intended to provide two-way data and message communications and position
determination services throughout the world (the "ORBCOMM System"), to contract
with the General Partner and other Persons for the development, construction
and operation of the spacecraft, the launch vehicles, the master network
control center, satellite control center, United States gateway Earth stations
and any other components of the ORBCOMM System, to market or arrange for the
marketing of the services of the ORBCOMM System, to engage in research and
development in connection therewith and to do all things necessary, appropriate
or advisable in connection with each of the foregoing.
1.4. Principal Office. The location of the principal office of the
Partnership shall be 2455 Horse Pen Road, Herndon, Virginia 20171 or at such
other location as may be selected from time to time by the General Partner,
subject to Article 8.5 of the Omnibus Agreement. If the General Partner
changes the location of the principal office of the Partnership, the Partners
shall be notified promptly thereafter. The Partnership may maintain such other
office(s) at such other place(s) as the General Partner deems advisable.
1.5. Fiscal Year. The fiscal year of the Partnership, and the
taxable year of the Partnership for United States Federal income tax purposes,
shall be the calendar year (the "Partnership Year").
1.6. Delaware Office; Agent for Service of Process. The name of
the registered agent for service of process on the Partnership is Corporation
Service Company, 1013 Centre Road, Wilmington, Delaware. The address of the
Partnership's registered office in the State of Delaware shall be the address
of its registered agent.
SECTION 2
DEFINITIONS
Except as otherwise defined herein, all terms used herein have the
meanings specified in the Master Agreement (as hereinafter defined). The
following defined terms used in this Agreement shall have the respective
meanings specified below.
2.1. Adjusted Property. "Adjusted Property" means property the
Carrying Value of which has been adjusted pursuant to Section 5.1(d).
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2.2. Affiliate. "Affiliate" means, with respect to any Person, any
Person directly or indirectly controlled by, or under common control with, such
Person.
2.3. Agreement. "Agreement" shall have the meaning ascribed to such
term in the recitals hereto.
2.4. Business Day. "Business Day" means any day excluding
Saturday, Sunday and any other day which in Washington, D.C. or Montreal,
Quebec is a legal holiday or a day on which financial institutions are
authorized by law or by local proclamation to close.
2.5. Capital Account. The "Capital Account" of a Partner means the
account maintained for such Partner in accordance with the provisions of
Section 5.1.
2.6. Carrying Value. "Carrying Value" means (a) with respect to
Contributed Property, the fair value of such property at the time of its
contribution to the Partnership reduced (but not below zero) by all
amortization, depreciation and cost recovery deductions charged to the
Partners' Capital Accounts pursuant to Section 5 with respect to such property,
and (b) with respect to any other property, the adjusted basis of such property
for United States Federal income tax purposes, as of the time of determination,
subject to those adjustments specified in the following sentence. The Carrying
Value of any property shall be adjusted from time to time in accordance with
Sections 5.1(c), 5.1(d) and 5.1(e) and to reflect changes, additions or other
adjustments to the Carrying Value for dispositions, acquisitions or
improvements of Partnership property, as deemed appropriate by the General
Partner, and in a manner consistent with United States Federal income tax
principles.
2.7. Certificate. "Certificate" shall have the meaning ascribed to
such term in the recitals hereto.
2.8. Definitive Agreements. "Definitive Agreements" means this
Agreement, the Omnibus Agreement, the Master Agreement, the ORBCOMM System
Procurement Agreement dated as of September 12, 1995 entered into between the
Partnership and Orbital, the ORBCOMM Procurement Agreement dated as of February
1, 1999 entered into between the Partnership and Orbital, the ORBCOMM System
Construction Agreement, the Proprietary Information and Non-Competition
Agreement, and other agreements entered into pursuant to the terms of the
Omnibus Agreement, as such agreements may have been amended or restated or may
be amended or restated in the future.
2.9. Delaware Act. "Delaware Act" means the Delaware Revised
Uniform Limited Partnership Act, 6 Del. Code Ann. tit. 6, Sections 17-101, et.
seq., as it may be amended from time to time, and any successor thereto.
2.10. Event of Withdrawal. "Event of Withdrawal" shall have the
meaning ascribed to such term in Section 10.1(b).
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2.11. General Partner. "General Partner" shall have the meaning
ascribed to such term in the recitals hereto.
2.12. Indemnified Party. "Indemnified Party" shall have the meaning
ascribed to such term in Section 7.3.
2.13. Limited Partner. "Limited Partner" shall have the meaning
ascribed to such term in the recitals hereto.
2.14. Master Agreement. "Master Agreement" means the agreement
between Orbital, OCC, Teleglobe Mobile, and Teleglobe, dated as of June 30,
1993 and titled the "Master Agreement" as amended and restated from time to
time.
2.15. Net Income and Net Loss. "Net Income" or "Net Loss" means an
amount equal to the Partnership's taxable income or taxable loss for a relevant
period, adjusted as provided herein. Net Income and Net Loss shall be
determined in accordance with Section 703(a) of the Code (for this purpose, all
items of income, gain, loss or deduction required to be stated separately
pursuant to Section 703(a)(1) of the Code shall be included in taxable income
or loss), and adjusted as provided in Sections 5.1(b) through (e), and further
adjusted to reflect any adjustments resulting from amended returns, claims for
refund and tax audits.
2.16. Net Value. "Net Value" means, in the case of a contribution
of assets, the fair value of assets contributed to the Partnership reduced by
the outstanding balance of any indebtedness either assumed by the Partnership
upon such contribution or to which such assets are subject when contributed
and, in the case of a distribution of assets, the fair value of assets
distributed by the Partnership reduced by the outstanding balance of any
Partnership indebtedness assumed by the Partner receiving such distribution or
any indebtedness to which such distributed property is subject, as such fair
value is determined by the General Partner using such reasonable methods of
valuation as they in their sole discretion deem appropriate.
2.17. Omnibus Agreement. "Omnibus Agreement" shall have the meaning
ascribed to such term in the recitals hereto.
2.18. Original Agreement. "Original Agreement" shall have the
meaning ascribed to such term in the recitals hereto.
2.19. Participation Percentage. The "Participation Percentage" of a
Partner shall be the portion of such Partner's Partnership Interest described
as such in Section 3.1.
2.20. Partners. "Partners" shall have the meaning ascribed to such
term in the recitals hereto.
2.21. Partnership. "Partnership" shall have the meaning ascribed to
such term in the recitals hereto.
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2.22. Partnership Interest. The "Partnership Interest" of a Partner
shall be the total interest of such Partner in the Partnership.
2.23. Partnership Year. "Partnership Year" shall have the meaning
ascribed to such term in Section 1.5.
2.24. Recapture Income. "Recapture Income" means any gain
recognized by the Partnership (but computed without regard to any adjustment
required by Section 734 or 743 of the Code) upon the disposition of any
property or asset of the Partnership that does not constitute capital gain for
United States Federal income tax purposes because such gain represents the
recapture of deductions or reductions in basis for tax credits previously taken
with respect to such property or assets.
2.25. Restatement Date. "Restatement Date" means January 1, 2000.
2.26. Section. Except as otherwise provided herein, "Section" means
a section of this Agreement.
2.27. Tax Matters Partner. "Tax Matters Partner" shall have the
meaning ascribed to such term in Section 6231(a)(7) of the Code.
2.28. Transfer. "Transfer" means an assignment, sale, exchange,
gift, pledge, contribution, distribution, disposal, or other transfer.
2.29. Unrealized Gain. "Unrealized Gain" as of any date of
determination means the excess, if any, of the fair value of property (as
determined under Sections 5.1(d) or (e) as of such date of determination) over
the Carrying Value of such property as of such date of determination (prior to
any adjustment to be made pursuant to Sections 5.1(d) or (e) as of such date).
2.30. Unrealized Loss. "Unrealized Loss" as of any date of
determination means the excess, if any, of the Carrying Value of property as of
such date of determination (prior to any adjustment to be made pursuant to
Sections 5.1(d) or (e) as of such date) over the fair value of such property
(as determined under Sections 5.1(d) or (e) as of such date of determination).
SECTION 3
PARTNERSHIP INTERESTS AND CAPITAL CONTRIBUTIONS
3.1. Partnership Interests. The Partnership Interests shall be
expressed in terms of the Partners' Participation Percentages. Teleglobe
Mobile's Participation Percentage shall be sixty-four point twenty-six percent
(64.26%) and OCC's Participation Percentage shall be thirty-five point
seventy-four percent (35.74%) as of the Restatement Date after giving effect to
the contribution described in Subsection 3.2.2 of the Omnibus Agreement,
subject to adjustments thereafter pursuant to Section 3.4 hereof (such further
adjustments to include, without limitation,
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the adjustment resulting from the contribution described in Subsection 3.5.2 of
the Omnibus Agreement). The Partners shall be entitled to receive the
distributions set forth in Sections 4 and 10.
3.2. Withdrawal of Capital Contributions. No Partner shall have
the right to withdraw or reduce any part of its capital contributions except as
provided in this Agreement.
3.3. Loans.
(a) Optional Loans. The General Partner shall have the
right to make a loan of cash to the Partnership at any time on such
terms as the General Partner may determine; provided, however, that in
no event shall any such optional loan be secured by Partnership
assets, bear interest or original issue discount or be with recourse
to any Partner.
(b) Stock Option Plan Loans. To the extent (i) the
Partnership has agreed to reimburse OCC for the costs paid by OCC
pursuant to Section 6.06 of the Orbital Communications Corporation
1992 Stock Option Plan (including the payment by OCC of withholding
taxes with respect to the exercise of stock options) in purchasing
stock acquired by employees or former employees of the Partnership
(the "Stock Option Plan Costs"), and (ii) the Partnership is permitted
to reimburse OCC for the Stock Option Plan Costs under the terms of
the Indenture, the Partnership shall pay to OCC the Stock Option Plan
Costs including, without limitation, amounts owed under notes payable
by OCC to former employees of the Partnership."
3.4. Additional Capital Contributions. If the Partnership shall
require a capital contribution, the Partnership shall so notify the Partners
and each Partner shall have the opportunity, but not the obligation, to
contribute in cash or immediately available funds an amount equal to such
capital contribution multiplied by such Partner's Participation Percentage. If
either Partner declines to make a contribution within five (5) Business Days of
the date upon which the Partnership notified the Partners of such requirement
(it being understood that if a Partner has not contributed its share at the
expiration of such five (5) Business Day-period, it will be deemed to have
declined to contribute), then:
(a) The other Partner shall be entitled to contribute the
amount so declined to be contributed (in addition to any amount such
Partner is entitled to contribute pursuant to the preceding sentence)
within five (5) Business Days of the date upon which the other Partner
declined or was deemed to have declined to contribute its share, and
(b) Based on contributions so made, the Partners'
Participation Percentages shall be adjusted immediately following the
expiration of the five (5) Business Day-period referred to in
subsection (a) above as follows:
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(i) Teleglobe Mobile's Participation Percentage shall be
adjusted so as to equal the percentage equal to the result of the
following formula, rounded to the second decimal point:
299.354M + (TMAC X 1.75)
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$465.841M + [1.75 X (TMAC + OAC)] + (OCONV X $33.082M)
Where:
M = million
TMAC = the dollar amount expressed in millions rounded to the
third decimal point of all contributions made by
Teleglobe Mobile from January 1, 2000 to the date of
determination of the Partners' Participation
Percentages as provided in this Section 3.4(b),
excluding the contribution referred to in Subsection
3.2.2 of the Omnibus Agreement.
OAC = the dollar amount expressed in millions rounded to the
third decimal point of all contributions made by OCC
from January 1, 2000 to the date of determination of
the Partners' Participation Percentages as provided in
this Section 3.4(b), excluding the contribution
resulting from the conversion referred to in
Subsection 3.3.3 of the Omnibus Agreement.
OCONV = zero (0) until the conversion referred to in
Subsection 3.3.3 of theOmnibus Agreement is effected
and one (1) thereafter or, if such conversion is not
effected as provided in such Subsection 3.3.3, then
zero (0) thereafter.
(ii) OCC's Participation Percentage shall be adjusted so
as to equal one hundred per cent (100%) minus Teleglobe Mobile's
Participation Percentage (so adjusted)."
SECTION 4
DISTRIBUTIONS
4.1. Distributions. Subject to Sections 4.2, 4.3 and 10.3, the
amount and timing of distributions by the Partnership, either in cash or
property, shall be determined in the discretion of the General Partner,
provided, however, subject to Sections 4.4 and 10.3, that all distributions
(including, without limitation, those made pursuant to Section 4.2) shall be
made to the Partners pro rata in accordance with their respective Participation
Percentages as of the date of distribution and that if the General Partner
determines to effect a distribution both in cash and
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property, equal amounts of such cash and property shall be distributed to the
Partners pro rata in accordance with their respective Participation Percentages
as of the date of distribution. The Partners confirm that no distributions
under this Section 4.1 occurred prior to January 1, 2000.
4.2. Minimum Distribution. The Partnership shall, not later than
the end of the first quarter of each Partnership Year, make a distribution in
the proportions set forth in Section 4.1 in an amount sufficient to ensure that
each Partner shall have received at least an amount equal to the product of (a)
forty per cent (40%) multiplied by (b) the lesser of (i) such Partner's
distributive share of the Partnership's taxable income (if any) for the
preceding Partnership Year as determined based on the United States Federal
income tax return of the Partnership for such year, or (ii) the excess, if any,
of cumulative Net Income over cumulative Net Loss allocated to such Partner
since the inception of the Partnership. Notwithstanding the preceding
sentence, except with the approval of the General Partner no distribution shall
be made to a Partner if immediately prior to such distribution there is a zero
or negative balance in any Partner's Capital Account.
4.3. Nature of Distributions. The General Partner may determine to
make a distribution in kind or property to the Partners, but such property
shall be distributed in such a fashion as to ensure that the fair value thereof
is distributed and allocated in accordance with Sections 4, 5 and 10 hereof.
For purposes of (a) determining amounts to be distributed to Partners under
Section 4.1, (b) determining Net Income and Net Loss under Section 5, (c)
making adjustments to Capital Accounts under Section 5, and (d) allocations
under Section 5, any property to be distributed in kind shall have the fair
value assigned to such property by the General Partner, subject to the approval
of OCC which shall not be unreasonably withheld or delayed, provided, however,
that such approval shall not be required (a) once OCC's Participation
Percentage falls below 31.67%; or (b) if such fair value is determined by a
major investment banking firm selected by the Partnership which shall not have
rendered financial advisory services to the Partnership, Teleglobe or Orbital
during the preceding year."
4.4. Tax Payments. If the Partnership withholds or pays any tax
(including any addition to tax, penalty, or interest (other than an addition to
tax, penalty, or interest attributable solely to an act or omission of the Tax
Matters Partner)) in respect of any Partner's distributive share of Partnership
income or distributions to any Partner, such payment or withholding shall be
treated as a distribution pursuant to Section 4.1 to such Partner.
SECTION 5
PARTNERS' ACCOUNTS; ALLOCATION OF
PARTNERSHIP INCOME AND EXPENSES
5.1. Maintenance of Capital Accounts.
(a) General Rule. The Partnership shall maintain for
each Partner a separate Capital Account in accordance with Section 704
of the Code and the regulations
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thereunder ("Capital Account"). If a Partner is both a Limited
Partner and a General Partner, a single Capital Account shall be
maintained for such Partner. Each Partner's Capital Account shall be
increased by (i) the cash amount or Net Value of all capital
contributions made by such Partner to the Partnership and (ii) all
items of Net Income allocated to such Partner and decreased by (A) the
cash amount or Net Value of all actual and deemed distributions of
cash or property made to such Partner and (B) all items of Net Loss
allocated to such Partner.
(b) Computation of Items of Income, Gain, Loss or
Deduction. For purposes of computing the amount of any item of
income, gain, deduction or loss to be reflected in the Partners'
Capital Accounts, the determination, recognition and classification of
any such item shall be the same as its determination, recognition and
classification for United States Federal income tax purposes
(including any method of depreciation, cost recovery or amortization
used for this purpose), provided that:
(i) In accordance with the requirements of
Section 704(c) of the Code and Treasury Regulations Section
1.704-1(b)(2)(iv)(d), any deductions for depreciation, cost
recovery or amortization attributable to Contributed Property
shall be determined as if the adjusted basis of such property
on the date it was acquired by the Partnership was equal to
the fair value of such property. Upon an adjustment pursuant
to Section 5.1(d) to the Carrying Value of any Partnership
property subject to depreciation, cost recovery or
amortization, any further deductions for such depreciation,
cost recovery or amortization attributable to such property
shall be determined as if the adjusted basis of such property
was equal to the Carrying Value of such property immediately
following such adjustment.
(ii) Any income, gain or loss attributable to the
taxable disposition of any property shall be determined by the
Partnership as if the adjusted basis of such property as of
such date of disposition was equal in amount to the
Partnership's Carrying Value with respect to such property as
of such date.
(iii) The computation of all items of income, gain,
loss and deduction shall be made, as to those items described
in Section 705(a)(1)(B) or Section 705(a)(2)(B) of the Code,
without regard to the fact that such items are not includable
in gross income or are neither currently deductible nor
capitalizable for United States Federal income tax purposes.
For this purpose, amounts paid or incurred to organize the
Partnership or to promote the sale of interests in the
Partnership that are neither deductible nor amortizable under
Section 709 of the Code, and deductions for any losses
incurred in connection with the sale or exchange of
Partnership assets disallowed pursuant to Section 267(a)(1) or
Section 707(b) of the Code, shall be treated as expenditures
described in Section 705(a)(2)(B) of the Code.
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(c) Transferees. Generally, a transferee of a Partner's
Partnership Interest will succeed to the Capital Account relating to
the interest transferred. However, if the transfer causes a
termination of the Partnership under Section 708(b)(1)(B) of the Code,
the Partnership's properties shall be deemed to have been distributed
in liquidation of the Partnership to the Partners (including the
transferee of a Partnership Interest) and deemed recontributed by such
Partners in reconstitution of the Partnership. In such event, the
Carrying Values of the Partnership properties shall be adjusted
immediately prior to such deemed distribution pursuant to Section
5.1(e) (and such adjusted Carrying Values shall constitute the Net
Values of such properties upon this deemed contribution to the
reconstituted Partnership). The Capital Accounts of such
reconstituted Partnership shall be maintained in accordance with the
principles of this Section 5.1.
(d) Adjustments to Carrying Values. In accordance with
Treasury Regulations Section 1.704-1(b)(2)(iv)(f), in connection with
either (i) the contribution of money or other property (other than a
de minimis amount) to the Partnership by a new or existing Partner in
consideration for an interest in the Partnership or (ii) a
distribution of money or other property (other than a de minimis
amount) by the Partnership to a retiring or continuing Partner as
consideration for an interest in the Partnership, the Capital Accounts
of all Partners and the Carrying Values of all Partnership properties
may be, as determined by the General Partner, adjusted (consistent
with the provisions hereof) upwards or downwards to reflect any
Unrealized Gain or Unrealized Loss attributable to each Partnership
property, as if such Unrealized Gain or Unrealized Loss had been
recognized upon an actual sale of each such property at such time and
had been allocated to the Partners pursuant to Section 5.2. For
purposes of determining such Unrealized Gain or Unrealized Loss, the
fair value of Partnership assets shall be determined by the General
Partner using such reasonable methods of valuation as it in its sole
discretion deems appropriate, subject to the approval of OCC which
shall not be unreasonably withheld or delayed, provided, however, that
such approval shall not be required (i) once OCC's Participation
Percentage falls below 15%; or (ii) if such fair value is determined
by a major investment banking firm selected by the Partnership which
shall not have rendered financial advisory services to the
Partnership, Teleglobe or Orbital during the preceding year.
Without limiting the generality of the foregoing and notwithstanding
any other provision of this Agreement, the proportion that the dollar
amount of the Capital Account of a Partner bears to the dollar amount
of the Capital Account of the other Partner shall at all times be
equivalent to the proportion that the Participation Percentage of such
Partner bears to the Participation Percentage of such other Partner.
Accordingly, at any time a discrepancy arises between the respective
Participation Percentages of the Partners, the General Partner will
immediately adjust upwards and/or downwards the respective Capital
Accounts of the Partners as may be required to reflect the provisions
of the preceding sentence.
(e) Effect of Distributions in Kind on Capital Accounts.
In accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(e),
immediately prior to the actual or
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deemed distribution of any Partnership property in kind, the Capital
Accounts of all Partners and the Carrying Value of each such
Partnership property shall be adjusted (consistent with the provisions
hereof) upward or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to such Partnership property as if such
Unrealized Gain or Unrealized Loss had been recognized upon an actual
sale of each such property immediately prior to such distribution and
had been allocated to the Partners, at such time, pursuant to Section
5.2. For purposes of determining such Unrealized Gain or Unrealized
Loss, the fair values of relevant Partnership properties shall be
determined by the General Partner pursuant to Section 6.4 using such
reasonable methods of valuation as it in its sole discretion deems
appropriate.
5.2. Allocations of Net Income and Net Loss.
(a) In General. Subject to Section 5.2(b), Net Income
and Net Loss shall be allocated to the Capital Accounts as follows:
(i) Subject to Section 5.2(a)(iii), Net Income
shall be allocated to the Partners in proportion to their
Participation Percentages.
(ii) Subject to Section 5.2(a)(iii), Net Loss
shall be allocated to the Partners in proportion to their
Participation Percentages.
(iii) To the extent Net Loss allocated to a Partner
pursuant to Section 5.2(a)(ii) or this Section 5.2(a)(iii)
would, but for this Section 5.2(a)(iii), cause or increase any
deficit in the Capital Account maintained with respect to such
Partner as of the end of such Partnership Year, such Net Loss
shall be reallocated first to the other Partners in proportion
to, and to the extent of, their positive Capital Account
balances, and then to the General Partner in proportion to its
Participation Percentage. If any Net Loss is or was
reallocated pursuant to the preceding sentence (or its
counterpart in the Original Agreement), Net Income shall
thereafter be allocated so as to offset, to the extent
possible, such reallocations of Net Loss.
(b) Special Provisions Governing Capital Account
Allocations. To the extent inconsistent with the provisions of
Section 5.2(a) the following special provisions shall govern
allocations to Capital Accounts:
(i) If there is a net decrease in "partnership
minimum gain" (within the meaning of Treasury Regulations
Section 1.704-2(b)(2)) during a taxable year, each Partner
shall (subject to the exceptions set forth in Treasury
Regulations Section 1.704-2(f)) be allocated items of income
and gain for such year (and, if necessary, for subsequent
years) equal to the portion of such Partner's share of the net
decrease in partnership minimum gain. This Section 5.2(b)(i)
is intended to be a "minimum gain chargeback" within meaning
of Treasury Regulations
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Section 1.704-2(f), and is to be interpreted to comply with
the requirements of such regulation.
(ii) If any Partner unexpectedly receives any
adjustments, allocations or distributions described in
Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of
income and gain shall be specially allocated to such Partner
in an amount and manner sufficient to eliminate a deficit in
its Capital Account (after taking into account adjustments,
distributions and allocations described in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) in
excess of its obligations to restore such deficit (within the
meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(d))
created by such adjustments, allocations or distributions as
quickly as possible. This Section 5.2(b)(ii) is intended to
constitute a "qualified income offset" within the meaning of
Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(3) and is to
be interpreted to comply with the requirements of such
regulation.
(iii) The interest of the General Partner as
general partner, including the interests of any additional or
substituted general partner, taken together, in each material
item of Partnership income, gain, loss, deduction or credit
shall be equal to at least one percent (1%) of each such item
at all times during the existence of the Partnership.
(iv) In accordance with Treasury Regulations
Section 1.704-2,
(A) any items of partnership loss,
deduction or expenditure (including expenditures
described in Section 705(a)(2)(B) of the Code) that
are attributable to liabilities of the Partnership
for which no Partner bears the economic risk of loss
shall be allocated in the same manner as Net Losses
hereunder, and
(B) any items of partnership loss,
deduction or expenditure (including expenditures
described in Section 705(a)(2)(B) of the Code) that
are attributable to nonrecourse debt of the
Partnership for which one or more Partners bears the
economic risk of loss shall be allocated to each
Partner in proportion to the extent to which such
Partner bears such economic risk of loss.
(v) Any special allocations of items of income or
gain pursuant to Sections 5.2(b)(i), (ii), (iii) and (iv)
shall be taken into account in computing subsequent
allocations of items of income, gain, deduction or loss so
that the net amounts of any items so allocated shall, to the
extent possible and consistent with such Sections, be equal to
the net amounts that would have been allocated to each Partner
had the allocations made pursuant to such Sections not been
made.
(c) Allocations for Tax Purposes.
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(i) For United States Federal income tax
purposes, except as otherwise provided in this Section 5.2(c),
each item of income, gain, loss, and deduction of the
Partnership shall be allocated among the Partners in the same
proportions as items comprising Net Income or Net Loss, as the
case may be, are allocated among the Partners. Credits shall
be allocated as provided in Treasury Regulations Section
1.704-1(b)(4)(ii).
(ii) In the case of Contributed Property, items of
income, gain, loss, depreciation, amortization and cost
recovery shall be allocated among the Partners in a manner
consistent with the principles of Section 704(c) of the Code.
In the case of Adjusted Property, items of income, gain, loss,
depreciation and cost recovery deductions attributable thereto
shall (A) first, be allocated among the Partners in a manner
consistent with the principles of Section 704(c) of the Code
to take into account the Unrealized Gain or Unrealized Loss
attributable to such property and the allocation thereof
pursuant to Section 5.1(c) or 5.1(d), and (B) second, in the
event such property was originally Contributed Property, be
allocated among the Partners in a manner consistent with
subsection (ii) above.
(iii) To the extent permissible under applicable
Treasury Regulations, the amount of any gain from a
disposition allocated to (or recognized by) a Partner (or its
successor in interest) for United States Federal income tax
purposes pursuant to the above provisions shall be deemed to
be Recapture Income to the extent such Partner has been
allocated any deduction or credit directly or indirectly
giving rise to the treatment of such gain as Recapture Income.
(iv) All items of income, gain, loss, deduction
and credit recognized by the Partnership for United States
Federal income tax purposes and allocated to the Partners in
accordance with the provisions hereof shall be determined
without regard to any adjustment made pursuant to Section 743
of the Code; provided, however, that such allocations, once
made, shall be adjusted as necessary or appropriate to take
into account those adjustments permitted by Section 743 of the
Code, and any adjustments made pursuant to Section 734 of the
Code shall be allocated to the extent permitted under and in
accordance with the rules of Treasury Regulations Section
1.704-1(b)(2)(iv)(m).
(d) Other Rules Pertaining to Allocations. Subject to
Section 6.2(g), the Tax Matters Partner may adopt and employ such
methods and procedures for (i) the determination and allocation of
adjustments under Sections 704(c), 734 and 743 of the Code, (ii) the
provision of tax information and reports to Partners, (iii) the
adoption of reasonable conventions and methods for the valuation of
assets and the determination of tax basis, (iv) the allocation of
asset values and tax basis, and (v) conventions for the determination
of cost recovery, depreciation and amortization deductions and the
maintenance of inventories, as it determines in its sole discretion
are necessary and appropriate to execute the provisions of this
Agreement, and to comply with United
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States Federal and state tax laws. To the fullest extent permitted by
law, the Tax Matters Partner shall be indemnified and held harmless by
the Partnership for any expenses, penalties or other liabilities
arising as a result of decisions made in good faith on any of the
matters referred to in the preceding sentence.
SECTION 6
MANAGEMENT
6.1. Authority of General Partner. Except to the extent required
by law or specific provisions of this Agreement, the management of the
Partnership and all Partnership affairs shall be the exclusive responsibility
of the General Partner. Without limiting the generality of the foregoing,
subject to Sections 6.2, 6.3, 6.4 and 6.5 hereof, the General Partner is
authorized on behalf of the Partnership, without the consent of any other
Partner, to:
(a) expend the capital and revenues of the Partnership in
furtherance of the Partnership's business and pay, in accordance with
the provisions of this Agreement, all expenses, debts and obligations
of the Partnership to the extent that funds of the Partnership are
available therefor;
(b) invest and reinvest the Partnership's funds;
(c) enter into, amend or terminate agreements (including
without limitation partnership agreements) and contracts with any
Person or Persons, institute, defend and settle litigation arising
therefrom, and give receipts, releases and discharges with respect to
all of the foregoing and any matters incident thereto;
(d) maintain, at the expense of the Partnership, adequate
records and accounts of all operations and expenditures and furnish
the Partners with the reports referred to in Section 8;
(e) purchase, at the expense of the Partnership,
liability, casualty, fire and other insurance and bonds to protect the
Partnership's properties, business, partners and employees, the
General Partner, its stockholders and its respective directors,
officers and employees;
(f) borrow for working capital and, in connection
therewith, issue notes, debentures and other debt securities and
mortgage, pledge, encumber or hypothecate the assets of the
Partnership, to secure repayment of such borrowed sums;
(g) obtain replacement of any mortgage, encumbrance,
pledge, hypothecation or other security device and prepay, in whole or
in part, modify, consolidate or extend any such mortgage, encumbrance,
pledge, hypothecation or other security device, subject to the
limitations contained in this Agreement;
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(h) sell, lease, trade, exchange or otherwise dispose of
all or any portion of the property of the Partnership subject to the
limitations contained in this Agreement;
(i) employ, at the expense of the Partnership,
consultants, accountants, attorneys, brokers, engineers, escrow agents
and others and terminate such employment;
(j) execute and deliver any and all instruments necessary
or incidental to the conduct of the business of the Partnership;
(k) determine the amount, timing and character of
distributions to Partners pursuant to Sections 4.1 and 4.3;
(l) appoint or remove officers to the Partnership;
(m) act on behalf of the Partnership with respect to the
obligations of the Partnership under any of the Definitive Agreements;
and
(n) do such other things and engage in such other
activities related to the foregoing as may be necessary, convenient or
advisable with respect to the conduct of the business of the
Partnership, and have and exercise all of the powers and rights
conferred upon limited partnerships formed under the Delaware Act.
By executing this Agreement, each Partner shall be deemed to have
consented to any exercise by the General Partner of any of the foregoing
powers.
6.2. OCC Approval. The approval of OCC shall be required to:
(a) enter into any transaction (excluding the Definitive
Agreements) with an Affiliate of the General Partner;
(b) make on behalf of the Partnership an assignment for
the benefit of creditors, decide on behalf of the Partnership to
subject the Partnership to any proceedings under any bankruptcy or
insolvency law, decide to avail the Partnership of the benefit of any
other legislation for the benefit of debtors, or take steps to wind up
or terminate the Partnership existence; and
(c) amend this Section 6.2.
This Section 6.2 shall no longer apply and it shall be deemed deleted
once OCC's Participation Percentage falls below 15%.
6.3. OCC Approval. The approval of OCC shall be required to amend,
in a manner detrimental to OCC, the provisions of Sections 3, 4, 5, 6.3 and 10
of this Agreement, it being understood that any amendment to any such Sections
upon the admission of another Limited
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Partner that is not an Affiliate of the General Partner shall not be deemed to
be detrimental to OCC if all Limited Partners are treated substantially equally
in connection with such amendment.
6.4. OCC Approval. Subject to the terms hereof, the approval of
OCC shall be required to:
(a) transfer all or substantially all the assets of the
Partnership or contract to do so;
(b) merge or consolidate the Partnership with any other
Person; provided, however, that this subsection (b) shall not be
applicable in the event such merger or consolidation is deemed fair
from a financial point of view to the Partnership in the written
opinion of a major investment banking firm selected by the Partnership
which shall not have rendered financial advisory services to the
Partnership, Teleglobe or Orbital during the preceding year;
(c) permit the entry by the Partnership into any
additional lines of business other than those described in Section
1.3, as contemplated in the Omnibus Agreement or directly related
thereto;
(d) select or remove the independent certified public
accountant for the Partnership pursuant to Section 8.4 or adopt, or
modify in any material respect, any significant accounting policy or
tax policy;
(e) determine the value of the Partnership for purposes
of Article X of the Master Agreement; and
(f) amend any provision of this Agreement; provided,
however, that notwithstanding any other provision of this Agreement,
no Partner shall delay, frustrate or otherwise interfere with in any
way the raising of debt or equityfinancing by the Partnership from any
Person not currently admitted to the Partnership which financing has
been initiated or approved by the General Partner (it being understood
that the simultaneous raising of debt or equity financing by OCC or
Teleglobe Mobile shall be deemed for the purposes hereof to interfere
with the raising of debt or equity financing by the Partnership);
provided that in the case of any such equity financing, the
consideration expected to be received by the Partnership from such
financing shall be fair to the Partnership as determined by the
General Partner; and provided further that in the case of any such
equity financing (executed in one transaction or a series of
transactions) which is intended to result in the admission to the
Partnership of a Person or Persons who following such financing would
hold a Participation Percentage or Participation Percentages equal to
or greater than twenty-five percent (25%), the consideration expected
to be received by the Partnership from such financing shall be fair to
the Partnership, in the written opinion of a major investment banking
firm selected by the Partnership which shall not have rendered
financial advisory services to the Partnership, Teleglobe or Orbital
during the preceding year.
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This Section 6.4 shall no longer apply and it shall be deemed deleted
once OCC's Participation Percentage falls below 31.67%; provided,
however, that should OCC's Participation Percentage return to 31.67%
or higher after having fallen below 31.67% solely as a result of the
conversion referred to in Subsection 3.3.3 of the Omnibus Agreement,
then this Section 6.4 will apply again until OCC's Participation
Percentage thereafter falls below 31.67%, at which time this Section
6.4 shall no longer apply and it shall be deemed deleted.
6.5. Meetings. Meetings of the Partners may be called by the
General Partner and shall be held at the principal offices of the Partnership
or at such other location as shall be reasonably determined by the General
Partner. Except as otherwise specified in Section 8.5 hereof, the General
Partner shall have no obligation to call a meeting of the Partners at any time.
Notwithstanding any provision of applicable law, not less than forty-eight (48)
hours prior written notice of the time, place and purpose of each meeting of
the Partners shall be provided to each Partner, provided that any Partner may
waive compliance with such notice requirement. Any meeting may be adjourned
from time to time by the General Partner, and the meeting may be held as
adjourned without further notice. Any one or more Partners may participate in
any meeting by means of conference telephone, video or similar communications
equipment allowing all persons participating in the meeting to hear each other
at the same time. Participation by Partners in a meeting held by means of a
conference telephone, video or similar communications equipment shall
constitute presence in person at a meeting. Any action required or permitted
to be taken with the approval of one or more Partners may be taken without a
meeting upon the written consent of such Partners, which written consent shall
be filed with the records of the meetings of the Partners.
6.6. Representation at Meetings; Reimbursement. The General Partner
shall be represented at meetings of the Partners by up to three authorized
officers or other authorized agents, it being the expectation of the General
Partner that it will select three representatives who will use reasonable
efforts to attend each meeting of the Partners. At each meeting of the
Partners, one representative of the General Partner shall be entitled to vote
such Partner's Participation Percentage. The General Partner shall be entitled
to reimbursement of the reasonable out-of-pocket expenses incurred by it or its
representatives in attending meetings of the Partners. No amount so paid to
any such member shall be deemed to be a distribution of Partnership assets for
purposes of this Agreement or the Delaware Act. Except for the reimbursement
of expenses as provided in this Section 6.6, the General Partner or
representatives thereof shall not receive any compensation for its, his or her
services as such.
In addition, so long as OCC's Participation Percentage is not less
than fifteen percent (15%), then at each meeting of the Partners, two
representatives of OCC as well as the Chief Executive Officer of ORBCOMM shall
be entitled to be present as observers and OCC shall be entitled to
reimbursement of expenses to the extent set forth for the General Partner
herein with respect to its two representatives, except for travel expenses.
6.7. Designation of Officers. Officers of the Partnership shall be
nominated by the President of the Partnership and elected by the General
Partner and shall exercise such authority
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as they are granted by the General Partner. If an officer is an employee of
the General Partner, the Partnership will promptly reimburse the General
Partner the pro rata share of expenses, including compensation and overhead,
attributable to such officer of the Partnership by reference to the share of
his or her total time spent upon Partnership operations. Without limiting the
foregoing, the General Partner shall, no later than promptly following the
Restatement Date, appoint one or more officers to have such authority as the
General Partner determines to be appropriate to act for the Partnership with
respect to the Procurement Contract after the Restatement Date.
6.8. Removal of Officers. Any officer of the Partnership may be
removed at any time and for any reason by approval or written consent of the
General Partner. Any officer removed pursuant to this Section shall remain
entitled to exculpation and indemnification from the Partnership pursuant to
Section 7.3 with respect to any matter arising prior to his or her removal.
SECTION 7
AGREEMENTS AND AUTHORITY OF THE PARTNERS
7.1. Rights and Duties of Limited Partners.
(a) Except as otherwise specifically provided in this
Agreement, the Limited Partners in their capacities as such shall not
participate in the control, management, direction or operation of the
business or affairs of the Partnership and shall have no power to act
for or bind the Partnership.
(b) Pursuant to Delaware law (and provided that such
Limited Partner does not, in addition to the exercise of its rights
and powers as a Limited Partner, take part in the control of the
business of the Partnership), no Limited Partner shall be liable for
losses or debts of the Partnership in its capacity as a Limited
Partner beyond the aggregate amount of its capital contributions,
except that (i) when a Limited Partner has received a return of any
part of its capital contribution without violation of this Agreement
or the Delaware Act it shall be liable to the Partnership for one year
thereafter for the amount of the returned contribution, but only to
the extent necessary to discharge the Partnership's liabilities to
creditors who extended credit to the Partnership during the period the
capital contribution was held by the Partnership, and (ii) if the
Limited Partner has received the return of any part of its capital
contribution in violation of this Agreement or the Delaware Act, it is
liable to the Partnership for a period of six years thereafter for the
amount of such contribution wrongfully returned to it; provided,
however, that to the extent any Limited Partner repays to the
Partnership pursuant to the foregoing provision a greater percentage
of the distributions made to it than any or all other Limited Partners
similarly liable to the Partnership, such Limited Partner shall have a
right of contribution from each such other Limited Partner to the
extent that such other Limited Partner has repaid pursuant to such
provision a lesser percentage of the distributions made to it.
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7.2. Restrictions on General Partner's Authority; Loss Sharing.
(a) The General Partner may, without the approval or
written consent to the specific act by all of the Partners given in
this Agreement or by other written instrument executed and delivered
by the Partners subsequent to the date of this Agreement, do any of
the following:
(i) any act in contravention of this Agreement or
the Certificate;
(ii) any act which would make it impossible to
carry on the ordinary business of the Partnership, except as
otherwise provided in this Agreement; or
(iii) assign any rights in specific Partnership
property, for other than a Partnership purpose.
(b) The General Partner shall share responsibility for
all obligations and losses of the Partnership in excess of the
Partners' aggregate capital contributions in proportion to their
Participation Percentages.
7.3. Exculpation. The General Partner, and any of its officers,
directors, partners, employees or agents, including any Person who formerly
served in any of the foregoing capacities (each, an "Indemnified Party"), shall
not be liable, in damages or otherwise, to the Partnership or to any of the
Limited Partners for any act or omission by such Indemnified Party pursuant to
the authority granted by this Agreement except if such act or omission results
from gross negligence, willful or wanton misconduct or bad faith of such
Indemnified Party. The Partnership shall indemnify, defend and hold harmless
each Indemnified Party from and against any and all claims or liabilities of
any nature whatsoever, including reasonable attorneys' fees, arising out of or
in connection with any action taken or omitted by the General Partner or the
officers of the Partnership pursuant to the authority granted by this
Agreement, except where attributable to the gross negligence, willful or wanton
misconduct or bad faith of such Indemnified Party. An Indemnified Party shall
be entitled to rely on the advice of counsel, public accountants or other
independent experts experienced in the matter at issue, and any act or omission
of such Person pursuant to such advice shall in no event subject such
Indemnified Party to liability to the Partnership or any Partner.
7.4. Other Activities. Subject to the Proprietary Information and
Non-Competition Agreement among Orbital, OCC, Teleglobe, Teleglobe Mobile, the
Partnership, ORBCOMM USA, and ORBCOMM International, any Partner may engage in
or possess an interest in other business venture of any nature or description,
independently or with others, whether presently existing or hereafter created,
including the development, operation and commercial exploitation of aerospace
technology and communications systems, and neither the Partnership nor any
Partner shall have any rights in or to such independent ventures or the income
or profits derived therefrom.
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SECTION 8
ACCOUNTS
8.1. Books. Each Partner shall have the right to inspect the
Partnership's books and records (including a list of the names and addresses of
Partners) at any reasonable time upon advance written request to the General
Partner, which books and records shall be maintained by the Partnership.
8.2. Partners' Accounts. Separate Capital Accounts shall be
maintained for each Partner in accordance with the provisions of Section 5.
8.3. Certificates, Reports, Returns and Audits.
(a) The books of account shall be closed promptly after
the end of each Partnership Year. Within twenty (20) days of the end
of the Partnership Year, the General Partner shall provide each Person
who was a Partner at any time during such Partnership Year an
unaudited statement of profit and loss for such year. Within sixty
(60) days of the end of the Partnership Year, a written report shall
be made to each Person who was a Partner at any time during such
Partnership Year that shall include a statement of profit and loss and
a statement of cash flows for the year then ended, a balance sheet as
of the close of the Partnership Year and a statement of such Partner's
Capital Account, all of which shall be prepared in accordance with
generally accepted accounting principles in the United States, and
shall be audited by the Partnership's independent public accountants.
The annual report shall also contain such additional statements with
respect to the status of the Partnership's business, transactions by
the Partnership with any of the Partners or any of their Affiliates
and the distribution of Partnership funds as are considered necessary
by the General Partner to advise all Partners properly about their
investment in the Partnership. With the sole exception of the
mathematical errors in computation, the annual report and the
information contained therein shall be deemed conclusive and binding
upon each Partner unless written objection shall be lodged with the
General Partner within ninety (90) days after the giving of such
reports to such Partner.
(b) Within twenty (20) days after the close of each month
of the Partnership Year other than the final month of the Year,
commencing with the month of July, 1993, a written report shall be
made to each Person who was a Partner during the month then ended that
shall include details with respect to the Partnership's business and
unaudited financial statements and other relevant information
regarding the Partnership and its activities during the month,
including statements with respect to any transactions by the
Partnership with any of the Partners or any of their respective
Affiliates and the distribution of Partnership funds as are considered
necessary by the General Partner to advise all Partners properly about
their investment in the Partnership. All such monthly reports shall
be prepared in accordance with generally accepted accounting
principles in
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the United States, using Teleglobe Mobile financial formats, which
formats shall be approved by OCC, such approval not to be unreasonably
withheld or delayed.
(c) Teleglobe Mobile shall be the Tax Matters Partner of
the Partnership. The Tax Matters Partner shall prepare or cause to be
prepared all United States, state, local and foreign tax returns of
the Partnership for each year for which such returns are required to
be filed. The Partnership shall reimburse the Tax Matters Partner for
all expenses incurred by the Tax Matters Partner in carrying out its
responsibilities as such under the terms of this Agreement, other than
expenses that attributable to the gross negligence, willful or wanton
conduct or bad faith of the Tax Matters Partner.
(d) The General Partner shall be obligated to forward a
copy of this Agreement as filed, or any amendments hereto, to the
General Partner and only to such Limited Partners as expressly request
a copy in writing.
8.4. Auditors. For purposes of financial reporting and Federal
income tax return preparation, the independent certified public accounting firm
for the Partnership initially shall be Arthur Andersen; provided, however, that
so long as the Participation Percentage of Teleglobe Mobile is at least fifteen
percent (15%), the audit and tax partners from such independent certified
public accounting firm responsible for the Partnership shall be chosen by
Teleglobe Mobile.
8.5. Review Policies. So long as OCC's Participation Percentage is
not less than fifteen percent (15%), the financial performance and business of
the Partnership shall be reviewed at least quarterly by the General Partner at
a meeting of the Partners.
SECTION 9
TRANSFERS OF PARTNERSHIP INTERESTS; WITHDRAWALS
9.1. Transfer of Partnership Interests. No Partner shall be
permitted, without the consent of the General Partner (which may be withheld in
the General Partner's absolute discretion) (i) to substitute any other Person
for itself as a General or Limited Partner, (ii) to Transfer all or any portion
of its Partnership Interest, (iii) to assign its obligations as a General or
Limited Partner or (iv) to withdraw from the Partnership.
9.2. Prohibited Transfers Void. Any purported Transfer of all or
any portion of a Partner's Partnership Interest that is not in compliance with
Section 9.1 is hereby declared to be null and void and of no force or effect
whatsoever.
9.3. Withdrawal of Partners. If any Partner withdraws or resigns
from the Partnership in violation of this Agreement, the total amount that such
Partner may then or thereafter be required to contribute to the Partnership
pursuant to this Agreement or the Master Agreement
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shall become immediately due and payable and such Partner shall not be entitled
to any further distributions from the Partnership.
SECTION 10
DISSOLUTION
10.1. Events of Dissolution. The Partnership shall continue until
11:59 p.m. on December 31, 2013, unless sooner dissolved upon the earliest to
occur of the following events:
(a) removal, withdrawal, resignation, liquidation or
Bankruptcy (or death, in the case of an individual) (an "Event of
Withdrawal") of the last remaining General Partner unless a new
General Partner is appointed within ninety (90) days with the
unanimous consent of the remaining Partners; or
(b) at any time, with the written consent of the General
Partner.
10.2. Final Accounting. Upon the dissolution of the Partnership,
the Partnership shall prepare an accounting of such dissolution, which
accounting shall be audited by the Partnership's independent public accountants
from the date of the last previous accounting to the date of dissolution.
10.3. Liquidation. Upon the dissolution of the Partnership, the
General Partner, or, in the case of an Event of Withdrawal of the last
remaining General Partner, one of the Limited Partners elected by a majority
vote of the Limited Partners, shall act as liquidator to wind up the
Partnership. The liquidator shall have full power and authority to sell,
assign and encumber any or all of the Partnership's assets and to wind up and
liquidate the affairs of the Partnership in an orderly and business-like
manner. All proceeds from liquidation shall be distributed in the following
order of priority: (a) to the payment of the debts and liabilities of the
Partnership and expenses of liquidation; (b) to the setting up of such reserves
as the liquidator may reasonably deem necessary for any contingent liability of
the Partnership; and (c) the balance to the Partners pro rata in accordance to
their respective Participation Percentages.
10.4. Distribution in Kind. If the liquidate shall determine that a
portion of the Partnership's assets should be distributed in kind to the
Partners, the liquidate shall obtain an independent appraisal of the fair value
of each such asset as of a date reasonably close to the date of liquidation.
10.5. Cancellation of Certificate. Upon the completion of the
distribution of Partnership assets as provided in Section 10.3 and 10.4, the
Partnership shall be terminated and the Person acting as liquidate shall cause
the cancellation of the Certificate and shall take such other actions as may be
appropriate to terminate the Partnership.
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SECTION 11
NOTICES
11.1. Method of Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including any
facsimile transmission or similar writing), and shall be sent either by
telecopier or delivered in person by reputable overnight courier addressed as
follows: if to OCC, to Orbital Communication Corporations, 21700 Atlantic
Boulevard, Dulles, Virginia 20166, Attention: President; if to Teleglobe
Mobile, to it, c/o Teleglobe Inc., 1000, rue de La Gauchetiere ouest, Montreal,
Quebec, Canada H3B 4X5, Attention: Vice President, Chief Legal Officer and
Corporate Secretary (except that any Partner may from time to time give notice
changing its address for this purpose). Each such notice, request or other
communication shall be effective (a) if given by telecopy, when such telecopy
is transmitted to the telecopy number specified in this Section and the
appropriate answerback is received, (b) if given by reputable overnight
courier, one (1) business day after being delivered to such courier, or (c) if
given by any other means, when received at the address specified in this
Section.
11.2. Routine Communications. Notwithstanding the provisions of
Section 11.1, routine communications such as distribution checks or financial
statements of the Partnership (but not the notice of any meeting required to be
delivered pursuant to Section 6.4) may be sent by first-class mail, postage
prepaid.
11.3. Computation of Time. Except as may be otherwise provided
under the Delaware Act, in computing any period of time under this Agreement,
the day of the act, event or default from which the designated period of time
begins to run shall not be included. The last day of the period so computed
shall be included, unless it is a Saturday, Sunday or legal holiday, in which
event the period shall run until the end of the next day which is not a
Saturday, Sunday or legal holiday.
SECTION 12
GENERAL PROVISIONS
12.1. Entire Agreement. This Agreement, together with each of the
Definitive Agreements, constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes any prior agreement or
understanding among the parties with respect to the subject matter hereof.
12.2. Amendment; Waiver. Except as provided otherwise herein, this
Agreement may not be amended nor may any rights hereunder be waived except by
an instrument in writing signed by the parties.
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12.3. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware, without
giving effect to the provisions, policies or principles thereof relating to
choice or conflict of laws.
12.4. Binding Effect. Except as provided otherwise herein, this
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective successors and permitted assigns.
12.5. Counterparts. This Agreement may be executed in any number of
counterparts of the signature pages, each of which shall be considered an
original, but all of which together shall constitute one and the same
instrument.
12.6. Separability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
12.7. Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
12.8. Gender and Number. Whenever required by the context hereof,
the singular shall include the plural and the plural shall include the
singular. The masculine gender shall include the feminine and neuter genders,
and the neuter gender shall include the masculine and feminine genders.
12.9. Waiver of Partition and Dissolution. Each Partner hereby
irrevocably waives, during the term of the Partnership, any right that it may
have to maintain any actions (a) for partition with respect to any Partnership
property, and (b) for dissolution of the Partnership except upon any of the
events described in Section 10.
12.10. Coordination with Master Agreement. The provisions of this
Agreement shall be subject to the provisions of the Master Agreement. If there
is a conflict between this Agreement and the Master Agreement, the provisions
of the Master Agreement shall control.
12.11. Dispute Resolution. Any controversy or claim that may arise
under, out of, in connection with or relating to this Agreement shall be
resolved in accordance with Section 13.4 of the Master Agreement.
[remainder of page intentionally left blank - signature page to follow]
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IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the day and year first above written.
TELEGLOBE MOBILE PARTNERS
By: Teleglobe Mobile Investment Inc.,
its Managing Partner
By:
-----------------------------------------
Name: Andre Bourbonnais
Title: President
ORBITAL COMMUNICATIONS CORPORATION
By:
-----------------------------------------
Name:
Title:
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