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EXHIBIT 3.1
MINNESOTA LOGOS, A PARTNERSHIP
PARTNERSHIP AGREEMENT
THIS PARTNERSHIP AGREEMENT is made this 1st day of February, 1995, by
and between Minnesota Logos, Inc., a Minnesota corporation ("MLI") and Global
Contracting, L.L.P., a Minnesota limited liability partnership ("GC").
MLI and GC each desire to form a general partnership for the
purposes of bidding, contracting and implementing the Minnesota highway
logo program, in addition to any other purpose allowed by law as all
partners may agree,
IT IS THEREFORE AGREED that MLI and GC hereby form a general partnership
under the laws of the Minnesota Partnership Act (the "Partnership") for the
sole purpose of bidding, contracting and implementing the Minnesota highway
logo program, in addition to any other purpose allowed by law as all partners
may agree, subject to the following terms and conditions:
1. Name. The name of the Partnership is "MINNESOTA LOGOS, A
PARTNERSHIP."
2. Term. The term of the Partnership shall begin with the date
first written above and continue until terminated under this Agreement or by
law.
3. Capital Contributions. The initial capital contributions of the
partners shall be $95.00 from MLI and $5.00 from GC. Each initial capital
contribution shall be paid to the Partnership upon the execution of this
Agreement by both partners. The capital account of each partner shall be
increased or decreased as may be provided in this Agreement. No interest shall
accrue on any
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capital account. No partner may withdraw its capital account except as both
partners agree or as provided in this Agreement. Each partner shall make any
additional capital contribution as all partners may agree, provided, the
partners' capital accounts shall be in proportion to their respective
Partnership Percentages. If there is a change in the Partnership Percentage
from the specified percentages stated in paragraph 6 of this Agreement,
distributions shall be made by the Partnership to adjust the net capital
account balances of each partner to be in direct proportion with the changed
Partnership Percentages.
4. Voting Rights. Each partner shall vote in accordance with their
interest in the profits and losses of the Partnership.
5. Changes to the Partnership. The Partnership shall not incur any
out-of-pocket expense expect an Administrative Fee payable to The Lamar
Corporation and other "direct local costs" as defined below, unless all the
partners otherwise agree in writing:
(a) Administrative Fee. The Partnership is authorized to
contract with The Lamar Corporation for billing, payables, payroll,
bookkeeping, accounting, reporting, collection, in-house artistic
services and similar services, and shall pay The Lamar Corporation
monthly an administrative fee of $2,500.00 ("Administrative Fee")
beginning with the month the Partnership contracts with the Minnesota
Department of Transportation for the Minnesota highway logo program, and
month-to-month thereafter until changed by agreement of all partners, so
long as the Partnership has a contract with Minnesota Department of
Transportation for the Minnesota highway logo program.
(b) Direct Local Costs. Other direct costs which the
Partnership may pay from time to time shall include only local expenses
of the operation of the Partnership such as sales personnel salaries,
expenses, commissions, bonuses, office rent and office staff and other
direct expenses of the Partnership's office or offices located
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in Minnesota, insurance and bond premiums, interest and principal
payments on any loans to the Partnership, and other such local expenses
directly and solely related to the business of the Partnership and not
included in the Administrative Fee; provided, however, each partner
shall pay all its own costs and expenses incurred prior to the date the
Partnership contracts with the Minnesota Department of Transportation
for its highway logo sign program; provided further, however, the cost
of any survey incurred by a partner on behalf of the Partnership and
expenses of any consultant incurred in submitting a proposal for such
contract (other than the time of any employee or agent of a partner or
affiliate) shall be reimbursable to that partner out of the revenues
generated by the Partnership if and when the Partnership contracts with
the Minnesota Department of Transportation for the Minnesota highway
logo sign program is made.
6. Allocation of Profits and Losses. Profits and losses shall be
allocated between the partners in the following percentages ("Partnership
Percentage"): Ninety-five percent (95%) to MLI and Five percent (5%) to GC.
Allocations of profits and losses shall be made at year end, and credited or
charged to each partner's respective capital account.
7. Cash Distributions. The Partnership shall distribute at least
annually to each partner, on or before the first day of April next following
the end of each calendar year, a cash amount equal to the net of "partner's
distributive share of income, expenses, gains, losses and credits" (as defined
under IRC Sec. 702) ("Partner's Distributive Share"), and charge each such
distribution to that partner's respective capital account. The Partnership
shall distribute out of Partnership funds on deposit, if available, to each
partner an amount at least sufficient for the partner or its owners to pay any
estimated income taxes required of the partner or its owners because of income
or gains to the
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Partnership, on or before each date the federal estimated income taxes are due,
as an advance towards the Partner's Distributive Share for the year.
8. Bond and Structure Financing. MLI will take all necessary
actions to obtain on behalf of the Partnership, at the expense of the
Partnership, all bonds required by the Minnesota Department of Transportation,
and all letters of credit, loan commitments, bank letters and other items of
financial responsibility which may be required for the construction of highway
logo sign structures to implement the Minnesota highway logo sign program,
including all security and guarantees which may be necessary; provided,
however, neither MLI nor GC nor their respective owners, officers or employees
shall be required to provide any security, personal guarantee or other
commitment with respect to any such bond or financing.
9. First Right of Refusal. No partners nor any owner of an interest
in a partner (in either case referred to as "Transferor") shall in any way
sell, transfer, assign, mortgage, pledge, encumber, or otherwise dispose of
("Transfer") its interest in the Partnership ("Subject Interest"), except in
strict accordance with this paragraph:
(a) Any Transferor desiring to Transfer its Subject Interest
pursuant to a bona fide offer from a third person shall first offer in
writing to the other partner (the "Optionee") to Transfer its Subject
Interest upon the same terms and for the purchase price or other
consideration offered by the proposed third party transferee.
Transferor's offer to the Optionee shall be delivered to the Optionee
and include the name of the prospective third party transferee, a
description of all the terms of the proposed transfer or other disposal,
and have attached thereto a copy of all agreements
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and other documents pertaining to the proposed Transfer to the third
party transferee.
(b) The option may only be exercised if the Optionee delivers
to the Transferor, within thirty (30) days following the date of
delivery of the option and all required information to the Optionee,
written notice of the Optionee's intent to exercise the option. If not
so exercised, the option shall lapse as to the proposed third party
Transfer communicated to the Optionee.
(c) In the event the Optionee timely exercises the option, the
purchase price or other consider action (or equivalent value) and the
terms and conditions as provided in the prospective agreement between
the Transferor and the proposed third party transferee shall be the same
for the Optionee. Upon closing the Optionee shall become the owner of
the Transferor's Subject Interest.
(d) Closing shall be within forty-five (45) days of the date
of the exercise of the option, on a date to be established by the
Optionee and communicated to the Transferor at least ten (10) days prior
to closing.
(e) In the event the Optionee does not timely exercise its
option, then the Transferor may Transfer its Subject Interest to the
proposed third party transferee strictly in accordance with the bona
fide offer from that third person communicated to the Optionee, provided
such transaction is closed within ninety (90) days of the date the first
right of refusal option of the Optionee lapsed, and, if the Subject
Interest includes any interest in the Partnership,
1) the proposed third party transferee agrees in
writing to be bound by all the terms and conditions of this
Partnership Agreement, and
2) the third party shall specifically assume all the
outstanding liabilities of the Partnership, as disclosed in
writing by the Partnership at or prior to closing.
(f) If all the conditions in the foregoing subparagraphs are
satisfied, such third party shall have Transferor's Subject Interest
which is the subject of the agreement between the Transferor and third-
party transferee. If the prospective transaction with a third party is
not timely closed, then the Transferor may be not Transfer its Subject
Interest to any prospective third party without again complying with the
terms of this Agreement.
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(g) Notwithstanding the foregoing, any proposed Transfer by
any Transferor or all or any part of its Subject Interest to a relative
of the transferring partner, or to any person, corporation, partnership,
firm or entity having an ownership interest in a partner, or the parent
corporation of a partner or any other subsidiary controlled by the
transferring partner's parent (all referred to as an "Affiliate") shall
not be subject to the restrictions on a Transfer of a Subject Interest
provided in this paragraph, so long as the proposed said third party
transferee Affiliate satisfies conditions 9(e)1 and 9(e)2 above, if
applicable.
Notwithstanding the foregoing provisions of this Article 9, MLI may
Transfer its Subject Interest as security or collateral for any of its
indebtedness or any of the indebtedness of Lamar Advertising Company (referred
to as "LAC" or any of LAC's subsidiaries or affiliates, including, but not
limited to, the Pledge Agreement (the "Pledge Agreement") dated May 15, 1993,
among LAC, LAC's subsidiaries and affiliates, Chase Manhattan Bank (National
Association), and certain other secured parties, as amended from time to time.
GC hereby expressly and irrevocably waives any and all rights that it may have
or hereafter acquire to purchase any and all of the Subject Interest of MLI
that may be Transferred in accordance with this paragraph of Article 9 by
exercise of a "right of first refusal" or other similar right. The pledgee of
MLI's Subject Interest or the holder of a security interest therein, as well as
their successors and assigns, shall not have any obligation to offer to GC or
the Partnership the opportunity to purchase any or all of MI's Subject Interest
transferred in accordance with this Article 9.
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10. Termination of Agreement, Dissolutions. This Agreement shall
terminate and the Partnership dissolve upon any of the following events:
(a) One partner becomes the sole owner of all interests in the
Partnership.
(b) Agreement in writing to terminate this Agreement and
dissolve the Partnership signed by both partners.
(c) Filing of a voluntary petition in bankruptcy by the
Partnership or a partner or the adjudication of the Partnership or a
partner as bankrupt or insolvent, or upon the appointment of a trustee,
receiver, conservator or liquidator of the Partnership or any partner or
its assets.
11. Continuation of Partnership Business. In the event the number of
partners is reduced to one, or in the event that any partner or partners
withdraw from the Partnership, the remaining partner shall be entitled to
continue the business of the Partnership under the Partnership name after
dissolution. All former partners shall have a continuing obligation in favor
of the sole remaining partner to cooperate in the orderly transfer of all
contracts with the State of Minnesota, or any of its subdivisions, to the sole
remaining partner.
12. Miscellaneous. The following additional provisions shall be
binding upon each partner:
(a) The Partnership shall cause to be kept full and accurate
records of all transactions of the Partnership, and provide full and
complete periodic financial statements to the partners at least
quarterly. The books of account of the Partnership shall be opened for
inspection and copying by any partner at any reasonable time.
(b) The fiscal year of the Partnership shall end October 31 of
each year.
(c) A partner's "interest in the Partnership" shall include
all the partner's right to income and distributions
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from the Partnership and all other rights and interests of the partner
in the Partnership, and, for purposes of this Agreement, the partner's
capital account balance.
(d) All notices or statements to be delivered by one partner
to another shall be deemed delivered when the notice of statement is
received personally by any officer of the partner or when mailed by U.S.
registered or certified mail, return receipt requested, postage prepaid,
to a partner at its following address, or such other address as a
partner may provide in writing to the Partnership and the other partner,
respectively:
Minnesota Logos, Inc.
c/o The Lamar Corporation
5551 Corporate Blvd., 2nd Floor
Baton Rouge, LA 70809
Attn: Keith Istre
Global Contracting, L.L.P.
c/o Global Specialty Contractors, Inc.
P. O. Box 908, Burnsville, MN 55337
Attn: Todd Johnson
(e) The partners will execute and deliver all necessary
documents that may be reasonably required to carry out the terms of this
Agreement.
(f) In the event of any breach of any provision of this
Agreement, the prevailing party shall be entitled to recover its
attorney fees and costs.
(g) All disputes of the partners arising under this Agreement
shall be resolved by arbitration conducted under the administration and
rules of the American Arbitration Association, which shall be conducted
by not more than one arbitrator to be selected pursuant to the
provisions of the American Arbitration Association currently in effect,
unless the parties mutually agree otherwise. An award rendered by the
arbitrator shall be final, and judgment may be entered upon in
accordance with applicable law and any court having jurisdiction
thereof. In no event shall the demand for arbitration be made after the
date when institution of legal or equitable proceedings based on such a
claim, dispute or other matter in question would be barred by the
applicable statutes of limitations. The agreement to arbitrate shall be
specifically enforceable in accordance with applicable law in any court
having jurisdiction thereof.
(h) This Agreement shall be governed by and construed
according to the laws of Minnesota.
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IN WITNESS WHEREOF the partners have each caused this Partnership
Agreement to be executed as of the day and date first written above.
MINNESOTA LOGOS, INC.
By: /s/ T. EVERETT STEWART
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GLOBAL CONTRACTING, L.L..
By: /s/ TODD JOHNSON
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