EXHIBIT 10.41
This Agreement is subject to arbitration to the extent provided in Article VII
pursuant to the Uniform Arbitration Act, Section 15-48-10 et seq., Code of Laws
of South Carolina, 1976 (as amended).
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
PALMETTO MOBILENET, L.P.
A SOUTH CAROLINA LIMITED PARTNERSHIP
TABLE OF CONTENTS
ARTICLE I - Definitions.................................................. 1
ARTICLE II - Name, Purpose and Powers.................................... 4
SECTION 2.1 Continuation of the Partnership.......................... 4
SECTION 2.2 Name..................................................... 4
SECTION 2.3 Address.................................................. 4
SECTION 2.4 Purpose.................................................. 4
SECTION 2.5 Powers................................................... 5
ARTICLE III - Partners................................................... 5
SECTION 3.1 Units.................................................... 5
SECTION 3.2 Voting................................................... 5
SECTION 3.3 Issuance of Additional Units............................. 6
SECTION 3.4 Preemptive Rights........................................ 6
SECTION 3.5 Admission of Additional Partners......................... 7
SECTION 3.6 Contributions of the Partners............................ 7
SECTION 3.7 Capital Accounts......................................... 7
SECTION 3.8 Interest on Contributions................................ 7
SECTION 3.9 Use of Proceeds of Contributions......................... 7
SECTION 3.10 Loans.................................................... 8
ARTICLE IV - Representations and Warranties.............................. 8
SECTION 4.1 Representations and Warranties of the General Partner.... 8
SECTION 4.2 Representations and Warranties of the Limited Partners... 9
ARTICLE V - Allocation and Distributions................................. 10
SECTION 5.1 Net Income and Net Loss.................................. 10
SECTION 5.2 Net Gains and Net Losses from Capital Transactions....... 11
SECTION 5.3 Repayment of Advances, Reserves and Distributions........ 12
SECTION 5.4 Distributions upon Dissolution and Liquidation
of the Partnership.................................... 12
SECTION 5.5 Withholding Distributions................................ 12
SECTION 5.6 Allocation in Event of Transfer.......................... 12
ARTICLE VI - Accounting.................................................. 13
SECTION 6.1 Books and Records........................................ 13
SECTION 6.2 Fiscal Year.............................................. 13
SECTION 6.3 Reports.................................................. 13
SECTION 6.4 Bank Accounts............................................ 14
SECTION 6.5 Accounting Decisions..................................... 14
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SECTION 6.6 Federal Income Tax Returns and Elections................. 14
ARTICLE VII - Rights, Duties and Obligations of the General Partner...... 14
SECTION 7.1 Management............................................... 14
SECTION 7.2 Powers................................................... 15
SECTION 7.3 Employment of Agents..................................... 15
SECTION 7.4 Responsibility; Indemnification.......................... 15
SECTION 7.5 Limitations on Powers of the General Partner............. 16
SECTION 7.6 Expenses................................................. 17
SECTION 7.7 Maintenance of Partnership Status........................ 18
SECTION 7.8 Insurance................................................ 18
SECTION 7.9 Fiduciary Duty........................................... 19
SECTION 7.10 Termination of General Partner........................... 19
SECTION 7.11 Power of Attorney........................................ 20
ARTICLE VIII - Rights of and Limitations on Limited Partners............. 20
SECTION 8.1 Rights of Limited Partners............................... 20
SECTION 8.2 Limitation on Rights of Limited Partners................. 21
SECTION 8.3 Lack of Personal Liability of Limited Partners........... 21
SECTION 8.4 Permissible Ownership of Units........................... 21
SECTION 8.5 Remedy of Partnership.................................... 21
SECTION 8.6 Duty to Offer Stock of General Partner Upon Ceasing
to be a Limited Partner............................... 22
ARTICLE IX - Restriction on Transfer, Change in Control and Withdrawal... 22
SECTION 9.1 Restriction on Transfer.................................. 22
SECTION 9.2 Receipt of Bona Fide Offer............................... 22
SECTION 9.3 Offer by Partner......................................... 22
SECTION 9.4 Procedure................................................ 23
SECTION 9.5 Rights to Participate in a Bona Fide Offer............... 23
SECTION 9.6 Other Transfers.......................................... 23
SECTION 9.7 Call Option Upon Change in Control....................... 24
SECTION 9.8 Purchase Price........................................... 25
SECTION 9.9 Method of Payment........................................ 26
SECTION 9.10 Failure to Comply........................................ 26
SECTION 9.11 Closing.................................................. 26
SECTION 9.12 Permitted Transfer to Affiliate.......................... 26
SECTION 9.13 Governmental Approval.................................... 27
SECTION 9.14 Waiver/Voting by Offering Partner........................ 27
SECTION 9.15 Interests of Selling Partner............................. 27
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ARTICLE X - Withdrawal and Dissolution................................... 28
SECTION 10.1 Withdrawal.............................................. 28
SECTION 10.2 Dissolution and Winding Up.............................. 28
SECTION 10.3 Dissolution Event Terms................................. 29
ARTICLE XI - Miscellaneous............................................... 29
SECTION 11.1 Notices................................................. 29
SECTION 11.2 Amendment............................................... 30
SECTION 11.3 Captions................................................ 30
SECTION 11.4 Variation in Pronouns................................... 30
SECTION 11.5 Counterparts............................................ 30
SECTION 11.6 Applicable Law.......................................... 30
SECTION 11.7 Entire Agreement........................................ 30
SECTION 11.8 Validity................................................ 30
SECTION 11.9 Benefit................................................. 30
SECTION 11.10 Nature of Partnership Interest.......................... 30
SECTION 11.11 Meetings................................................ 31
SECTION 11.12 Confidentiality......................................... 31
CERTIFICATION SIGNATURE PAGE TO BE EXECUTED BY THE GENERAL
PARTNER............................................................... A-1
CERTIFICATION SIGNATURE PAGE TO BE EXECUTED BY EACH LIMITED PARTNER...... A-2
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AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
PALMETTO MOBILENET, L.P.
This Amended and Restated Agreement of Limited Partnership of Palmetto
MobileNet, L.P., a South Carolina limited partnership, is effective as of the
1st day of September, 1998 and is made by and among PMN, Inc., a South Carolina
corporation, as general partner and those Persons (as hereafter defined) who
shall execute a Certification Signature Page (as hereafter defined) as limited
partners.
WHEREAS, the Partners originally entered into that certain Agreement of
Limited Partnership of Palmetto MobileNet, L.P. (the "Original Partnership
Agreement") on February 8, 1990;
WHEREAS, the Original Partnership Agreement was amended by the Amendment to
the Agreement of Limited Partnership of Palmetto MobileNet, L.P., the Second
Amendment to the Agreement of Limited Partnership of Palmetto MobileNet, L.P.
and the Third Amendment to the Agreement of Limited Partnership of Palmetto
MobileNet, L.P. (collectively, the "Amendments");
WHEREAS, the Partners believe that it is in the best interest of the
Partnership and of the Partners to amend and restate the Original Partnership
Agreement to incorporate the changes to the Original Partnership Agreement set
forth in the Amendments and to make certain other changes to the provisions of
the Original Partnership Agreement;
WHEREAS, the Original Partnership Agreement, as amended, provided that it
could be modified or amended with the consent of the holders of 66 2/3% of the
outstanding Units (as defined herein); and
WHEREAS, the holders of more than 66 2/3% of the outstanding Units have
approved this Amended and Restated Agreement of Limited Partnership of Palmetto
MobileNet, L.P.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
ARTICLE I
Definitions
The following terms used in this Agreement, unless otherwise expressly
provided
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herein or unless the context otherwise requires, shall have the following
respective meanings:
"Act" means the South Carolina Uniform Limited Partnership Act as in
effect in South Carolina and set forth at Section 33-42-10, et seq. of the Code
of Laws of South Carolina 1976, as it may be amended from time to time.
"Agreement" means this Amended and Restated Agreement of Limited
Partnership of Palmetto MobileNet, L.P., as it may be amended from time to time.
"Assignee" means a Person who has acquired a beneficial interest in
one or more Units but who has not been admitted to the Partnership as a
substituted Partner.
"Bona Fide Offer" shall mean a legally enforceable offer in writing,
made and signed by an offeror who is a Person financially and legally capable of
carrying out the terms of such offer. Any offer to acquire less than all of a
Partner's Units is not a Bona Fide Offer.
"Capital Account" of a Partner means the account established for such
Partner as more specifically described in Section 3.7.
"Capital Transaction" means the sale or other disposition of all or
substantially all of the assets of the Partnership, the financing or refinancing
of substantially all Partnership Property or any other event resulting in an
extraordinary distribution.
"Certification Signature Page" means the Certification Signature Page
in the form attached hereto by which each Partner upon execution thereof agrees
to be bound by this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor federal revenue law.
"Contribution" means any cash, property, services rendered or
promissory note or other binding obligation to contribute cash or property or to
perform services which a Partner contributes to the Partnership in its capacity
as a Partner.
"Distribution" means cash or any other property from any source
distributed to the Partners pursuant to Sections 5.3, 5.4 or 5.5 of this
Agreement, but shall not include any payments to the General Partner made under
the provisions of Sections 7.4, 7.6 and 7.8 of this Agreement.
"General Partner" means PMN, Inc. and such additional Persons
succeeding it in
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such capacity.
"Limited Partners" mean the Persons having executed Certification
Signature Pages as limited partners, and any person admitted to the Partnership
pursuant to Section 3.3 or Section 9.1.
"Majority-in-Interest" means Partners holding 66 2/3% or more of the
outstanding Units, determined without regard to any partner prohibited from
voting pursuant to Section 3.2(b).
"Net Gains and Net Losses from Capital Transactions" mean the gains
and losses (including, without limitation, any interest on installments or
interest on principal in the event of an installment sale) realized by the
Partnership as a result of a Capital Transaction or the damage or destruction of
the Partnership Property.
"Net Income" or "Net Loss" mean, with respect to any fiscal year, the
net income or net loss recognized by the Partnership for federal income tax
purposes after taking into account all items of income, gain, loss, deduction
and credit, determined by the Partnership's method of accounting, recognized in
such fiscal year.
"Partner(s)" mean the General Partner and the Limited Partners where
the context clearly requires.
"Partnership" means Palmetto MobileNet, L.P., a South Carolina limited
partnership.
"Partnership Interest" shall mean all of the rights of each Partner
with respect to the Partnership, whether created under this Agreement or under
the Act, other than the right to serve as General Partner. Any Partner's
Partnership Interest relative to the Partnership Interests of the other Partners
shall be determined by the ratio of such Partner's Units to all issued and
outstanding Units of the Partnership.
"Partnership Property" means all right, title and interest to the
property of the Partnership, tangible or intangible, or real or personal, now
owned or hereafter acquired.
"Person" means any individual, partnership, corporation, limited
liability company, trust, association or other legal entity.
"Power of Attorney" means the special power of attorney rights
provided by the Limited Partners to the General Partner as more specifically set
forth in Section 7.11.
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"Prime Rate" means simple interest at a rate per annum equal to the
lesser of (a) a variable rate equal to the prime interest rate quoted in the
money rates section of the Wall Street Journal (Charlotte Edition), initially
set at such prime interest rate on the date which interest begins to accrue and
subsequently adjusted on the last business day of each succeeding calendar
quarter to such prime rate on such date of adjustment or (b) the maximum rate
permitted by applicable law.
"Registered Notice" means notice sent by registered or certified mail,
return receipt requested and first-class postage prepaid. Any notice which does
not contain all information required by this Agreement shall not be considered a
"Registered Notice" for the purposes of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Unit" shall mean a proportionate share of each Partner's Partnership
Interest, including but not limited to, such Partner's right to vote, Capital
Account and interest in Net Income, Net Loss, Net Gains and Net Losses from
Capital Transactions and Distributions made by the Partnership.
ARTICLE II
Name, Purpose and Powers
SECTION 2.1 Continuation of the Partnership. The Partners hereby enter into
this Agreement in accordance with and pursuant to the Act and other relevant
laws of the State of South Carolina which shall govern the rights and
liabilities of the Partners except as otherwise herein expressly stated. The
Partnership shall continue in existence until November 15, 2049 unless it is
earlier terminated pursuant to Section 10.2.
SECTION 2.2 Name. The business of the Partnership shall be conducted under
the name "Palmetto MobileNet, L.P." or such other assumed name as the
Partnership shall adopt from time to time.
SECTION 2.3 Address. The principal business address of the Partnership and
the address at which the Partnership's records shall be kept is 440 Knox Abbott
Drive, Suite 430, Cayce, South Carolina 29033, or such address as the General
Partner shall determine from time to time.
SECTION 2.4 Purpose. The purpose of the Partnership shall be to engage in
the telecommunications business, which shall be deemed to include owning
partnership interests, stock, limited liability company interests or other
ownership interests in an entity engaged in the
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telecommunications business, and, in connection therewith, the Partnership
specifically may:
(a) Acquire, own, hold, improve, construct, develop, lease, sublease,
encumber, sell, exchange and otherwise deal with the Partnership Property;
(b) Subject to the terms and limitations set forth in this Agreement,
do all things reasonably incident to the selling, constructing, managing,
operating and owning of the Partnership Property, including granting security
interests in, selling, leasing and subleasing or otherwise disposing of the
same;
(c) Borrow money for Partnership purposes, and, subject to the terms
and limitations of this Agreement, pledge, grant a security interest in or
otherwise encumber any interest in the Partnership Property in connection
therewith;
(d) Sell, buy, lease, sublease, exchange or otherwise dispose of the
Partnership Property for cash, stock, securities or any combination thereof,
upon such terms and conditions as the General Partner may from time to time
determine on the terms stated herein; and
(e) Do all things necessary or desirable in connection with the
foregoing or as otherwise contemplated by this Agreement.
The Partnership shall not engage in any other business, except with the
consent of the Partners as described in Section 7.5. The investment of
Partnership assets in short term securities or in interest-bearing accounts
pending Distributions shall not be considered any other business. The
Partnership shall not in any way be prohibited from or restricted in engaging in
or owning an interest in any other business venture of any nature, including any
venture which might be competitive with the business of a Partner.
SECTION 2.5 Powers. Subject to the terms, conditions and restrictions of
this Agreement, the Partnership shall have the authority and power in its own
name to do all things described in Section 2.4.
ARTICLE III
Partners
SECTION 3.1 Units. Each Partner shall be deemed to own the number of Units
set forth on the books and records of the Partnership. Units will be evidenced
by certificates, and the form of such certificates shall be as approved by the
General Partner. At the time a Person is admitted as a Partner, such Person will
be given a certificate by the General Partner setting forth the
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number of Units owned by such Person. Each Unit entitles its owner to (a) the
voting rights set forth in Section 3.2 and (b) the right to share with the
holders of other Units in Distributions as set forth in Article V and Article X.
SECTION 3.2 Voting.
(a) At each meeting of Partners, every Partner shall be permitted one
vote for each Unit it owns (less than whole votes shall be allowed). A quorum
for any issue at any meeting shall exist if a Majority-in-Interest are present
in person or voting by proxy or other written instructions. Any Partner may vote
on any matter if not present, by general or specific proxy to a Partner present
or by specific instructions in writing.
(b) A Partner shall not vote, however, and its Units shall not be
counted for the purposes of determining on any such issue whether a quorum
exists or whether the requisite percentage of outstanding Units have been voted
in the affirmative:
(i) If the Partner has given notice of withdrawal or other
disposition of its Partnership Interest from the Partnership, including but not
limited to notice of a change in control of such Partner; or
(ii) If the issue before the Partnership is whether the Partner
should be expelled from the Partnership or should be granted a temporary
withdrawal from the Partnership.
Furthermore, if a Partners is disqualified from voting pursuant to this Section
3.2(b) such Partner shall not be entitled to any notice of a meeting of the
Partners or to attend any meeting of the Partners or to participate in any
Partnership distributions occurring after such event.
(c) Excepting only as provided in Section 3.2(b), no Partner shall be
disqualified from voting on any issue, notwithstanding any interest it may have
therein which differs from the interest of the Partnership or the other
Partners.
SECTION 3.3 Issuance of Additional Units.
(a) The General Partner has the right, during any twelve-month period,
to raise capital for the Partnership through the issuance of Units with an
aggregate value of less than $5,000,000.
(b) Upon the approval of a Majority-in-Interest, the General Partner
may, during any twelve-month period, raise capital for the Partnership through
the issuance of Units with a value in excess of $5,000,000 in the aggregate.
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(c) Each Unit issued pursuant to this Section 3.3 shall be issued upon
the payment in full to the Partnership of an amount equal to the fair market
value of an Unit, as determined by the General Partner at the time of the
offering of such Units. The amount of such payment shall be deemed to be a
Contribution to the Partnership.
SECTION 3.4 Preemptive Rights.
(a) The General Partner shall give Registered Notice to each Partner
of its intention to offer Units pursuant to Section 3.3. Such Registered Notice
must contain the number of Units being offered and the price per Unit.
(b) For a period of 30 days after receipt of such Registered Notice,
each Partner shall have the right, at its sole option, to purchase, subject to
the limitations set forth in Section 8.4, its pro rata share of the Units
offered for sale pursuant to Section 3.3 upon the terms and conditions set forth
in the Registered Notice. To the extent that any Partner does not purchase its
pro rata share of the offered Units, such Units shall be reoffered to the
remaining other Partners to purchase their pro rata interest in such Units. If
the other Partners shall not, individually or together, purchase, within the
30-day period, all of the Units offered pursuant to Section 3.3, the General
Partner shall have the right to sell such remaining Units to any other Person
upon the terms and conditions and at a price equal to or greater than the price
set forth in the Registered Notice.
SECTION 3.5 Admission of Additional Partners. No Person who purchases Units
issued pursuant to Section 3.3 may be admitted to the Partnership as a Partner
unless such Person executes a Certification Signature Page. The General Partner
is authorized to execute on behalf of the Limited Partners such documents
consenting to the admission of such Persons as Partners as may be required by
the Agreement or the Act; provided however that such admission Person complies
with Section 3.3, and delivers a properly executed Certificate Signature Page.
SECTION 3.6 Contributions of the Partners. No Limited Partner shall be
required to contribute any additional capital or lend any funds to the
Partnership. The General Partner shall have no personal liability for the
repayment of the Contributions of the Limited Partners.
SECTION 3.7 Capital Accounts. Each Partner shall have a Capital Account
which shall be (a) credited with its Contributions; (b) increased by (i) the
amount of Net Income allocated to such Partner pursuant to Section 5.1; (ii) the
amount of Net Gains from Capital Transactions allocated to such Partner pursuant
to Section 5.2; (iii) an amount equal to any income of the Partnership which is
exempt from federal income tax; and (iv) the amount of additional Contributions,
including, but not limited to, Contributions pursuant to Section 3.3; and (c)
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decreased by (i) the amount of Net Losses allocated to such Partner pursuant to
Section 5.1; (ii) the amount of Net Losses from Capital Transactions allocated
to such Partner pursuant to Section 5.2; (iii) an amount equal to any
non-capital expenses which are not deductible for federal income tax purposes;
and (iv) the amount distributed to such Partner pursuant to Sections 5.3 and
5.5.
Notwithstanding anything to the contrary contained herein, all Capital
Accounts will be maintained in accordance with applicable tax accounting
principles.
SECTION 3.8 Interest on Contributions. No interest shall be paid by the
Partnership on any Contribution to the Partnership, and no Partner shall be
entitled to a return of his Contribution upon withdrawal from the Partnership.
SECTION 3.9 Use of Proceeds of Contributions. The proceeds of the
Contributions have been or shall be applied by the Partnership for Partnership
purposes, including, but not limited to, the purchase of Partnership Property,
the payment of fees and expenses in connection with the purchase of Partnership
Property and the funding of any reserve fund deemed necessary by the General
Partner.
SECTION 3.10 Loans. The Partnership is authorized to borrow funds from one
or more of the Partners, subject to Section 7.5. Any such loan to the
Partnership by a Partner shall not be deemed a Contribution but a debt due from
the Partnership to such Partner and shall be evidenced by a properly executed
promissory note and repaid with interest at the Prime Rate and on such terms as
may be negotiated at the time such loan is made.
ARTICLE IV
Representations and Warranties
SECTION 4.1 Representations and Warranties of the General Partner. The
General hereby represents and warrants to the Partnership and to each Limited
Partner that:
(a) It is a corporation duly organized, validly existing and in good
standing under the laws of the State of South Carolina;
(b) The execution, delivery and performance of this Agreement by the
General Partner (i) has been duly authorized by all requisite corporate action,
(ii) will not contravene or conflict with any provision of law or of the General
Partner's Articles of Incorporation or bylaws, as amended to the date hereof,
(iii) will not violate or be in conflict with, result in a breach of or
constitute (with or without notice or passage of time) a default under any
indenture, loan or other
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agreement or instrument to which the General Partner is a party or by which it
or any of its property is bound, or any other order, writ, injunction or decree
of any government instrumentality binding upon the General Partner or any of its
property and (iv) will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the property of the General Partner other than
any lien, security interest or other encumbrance arising under this Agreement;
(c) This Agreement is a legal, valid and binding obligation of the
General Partner enforceable against the General Partner in accordance with its
terms except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws, now or hereafter
in effect, relating to the relief of debtors generally and general principles of
equity;
(d) It is not in violation of or in default with respect to any term
or provision of any indenture, contract, agreement or instrument to which it is
a party or by which it is bound, or any judgment, order or decree of any court
or, to its knowledge, any governmental authority or any statute, rule or
regulation applicable to the General Partner or by which it is bound, in any
case and in any manner so as presently or at any future time to affect the
General Partner adversely in any material respect in connection with its
ownership of Units or its ability to perform its obligations under this
Agreement;
(e) It is not a party to any action, suit or proceeding in which an
adverse determination has or would have a material adverse effect on its
ownership of Units or its ability to perform its obligations under this
Agreement; and
(f) The General Partner shall take no action toward the dissolution of
the Partnership, a voluntary proceeding under federal and state bankruptcy laws
or the appointment of a receiver, and the General Partner shall not sell,
assign, pledge or otherwise transfer its interest as General Partner.
SECTION 4.2 Representations and Warranties of the Limited Partners. Each
Limited Partner hereby represents and warrants to the Partnership and to each
other that:
(a) It has purchased and will purchase Units for its own account and
not for the interest or benefit of others and not with a view toward resale or
distribution thereof;
(b) It understands that the Units have not been registered under the
Securities Act or applicable state securities laws (and that the Partnership is
not obligated to register the Units) and that it may only transfer its Units, or
a beneficial portion thereof, in compliance with the Securities Act or
applicable state securities laws and the rules and regulations promulgated
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thereunder;
(c) It is a corporation, limited liability company or co-operative
duly organized, validly existing and in good standing under the laws of its
state of incorporation or organization, as the case may be;
(d) The execution, delivery and performance of this Agreement by each
Limited Partner (i) has been duly authorized by all requisite action, (ii) will
not contravene or conflict with any provision of law or of the Limited Partner's
organizational documents as amended to the date hereof, (iii) will not violate
or be in conflict with, result in a breach of or constitute (with or without
notice or passage of time) a default under any indenture, loan or other
agreement or instrument to which the Limited Partner is a party or by which it
or any of its property is bound, or any other order, writ, injunction or decree
of any government instrumentality binding upon the Limited Partner or any of its
property and (iv) will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the property of the Limited Partner other than
any lien, security interest or other encumbrance arising under this Agreement;
(e) This Agreement is a legal, valid and binding obligation of the
Limited Partner enforceable against the Limited Partner in accordance with its
terms except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws, now or hereafter
in effect, relating to the relief of debtors generally and general principles of
equity;
(f) It is not in violation of or in default with respect to any term
or provision of any indenture, contract, agreement or instrument to which it is
a party or by which it is bound, or any judgment, order or decree of any court
or, to its knowledge, any governmental authority or any statute, rule or
regulation applicable to such Limited Partner or by which it is bound, in any
case and in any manner so as presently or at any future time to affect such
Limited Partner adversely in any material respect in connection with its
ownership of Units; and
(g) It is not a party to any action, suit or proceeding in which an
adverse determination has or would have a material adverse effect on its
ownership of Units or its ability to perform its obligations under this
Agreement.
ARTICLE V
Allocation and Distributions
SECTION 5.1 Net Income and Net Loss.
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(a) Except as provided in Sections 5.1(b), 5.1(c), 5.1(d) and 5.2, the
Net Income and Net Loss of the Partnership shall be allocated among the Partners
in accordance with each Partner's Partnership Interest.
(b) The General Partner shall be allocated the amount of any Net
Losses that, but for this Section 5.1(b), would have been allocated to any
Limited Partner, if such Limited Partner does not have a deficit balance in its
Capital Account and if the allocation to such Limited Partner would have
thereupon caused or increased a deficit balance in such Limited Partner's
Capital Account as of the end of the Partnership's fiscal year to which such
allocation relates (after taking into consideration the reduction set forth in
Section 5.1(e));
(c) Any Limited Partner which is not obligated to restore any deficit
balance in its Capital Account and which receives an allocation or distribution
specified in Section 5.1(e) which results in a deficit balance in such Limited
Partner's Capital Account shall be allocated Net Profits in an amount and manner
sufficient to eliminate such deficit balance as quickly as possible;
(d) In the event any Net Losses are allocated to the General Partner
pursuant to Section 5.1(b), Net Profits shall be subsequently allocated to the
General Partner until the aggregate amount of such allocations of Net Profits is
equal to the aggregate amount of any Net Losses allocated to the General Partner
pursuant to Section 5.1(b);
(e) For purposes of determining a Partner's Capital Account balance as
of the end of any fiscal year, such Capital Account shall be reduced by:
(i) The amount of Net Losses (or any item thereof) as of the end
of such fiscal year which reasonably are expected to be allocated to such
Partner pursuant to Code Sections 704(e)(2) and 706(d), and paragraph (b)(2)(ii)
of Section 1.751-1 of the Treasury Regulations promulgated under the Code; and
(ii) The amount of Distributions, as of the end of such fiscal
year, which reasonably are expected to be made to such Partner to the extent
that such Distributions exceed offsetting increases to such Partner's Capital
Account that reasonably are expected to occur during (or prior to) the end of
such fiscal year.
(f) Notwithstanding anything contained in this Section 5.1, income,
gain, loss and deductions with respect to any property contributed to the
capital of the Partnership shall be allocated, solely for tax purposes, among
the Partners so as to take into account the variation between the basis of such
property to the Partnership and its fair market value in accordance with Section
704(c) of the Code.
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SECTION 5.2 Net Gains and Net Losses from Capital Transactions.
(a) Net Gains from Capital Transactions shall be allocated as follows:
(i) First, proportionately among all Partners who have negative
balances in their Capital Accounts as of the end of the day immediately
preceding the day on which the Capital Transaction occurred until all negative
Capital Accounts of the Partners shall have been increased to zero; and
(ii) Second, to the Partners in accordance with each Partner's
Partnership Interest.
(b) Net Losses from Capital Transactions shall be allocated as
follows:
(i) First, proportionately among all Partners who have positive
balances in their Capital Accounts as of the end of the day immediately
preceding the day on which the Capital Transaction occurred until all Capital
Accounts have been reduced to zero; and
(ii) Second, to the Partners, in accordance with each Partner's
Partnership Interest.
(c) Notwithstanding anything contained in this Section 5.2, income,
gain, loss and deductions with respect to any property contributed to the
capital of the Partnership shall be allocated, solely for tax purposes, among
the Partners so as to take into account the variation between the basis of such
property to the Partnership and its fair market value in accordance with Section
704(c) of the Code.
SECTION 5.3 Repayment of Advances, Reserves and Distributions. Except as
provided in Section 5.5, any funds deemed available for Distribution (including
Contributions) by the General Partner in any year shall be distributed first, to
any Partner who has made a loan under Section 3.10 in payment of interest and
the principal then due and payable under the terms of such loan and second, to
the establishment of a working capital and maintenance reserve in any reasonable
amount deemed advisable by the General Partner; and then, all amounts in excess
thereof, if any, shall be distributed to the Partners and allocated among the
Partners in accordance with each Partner's Units.
SECTION 5.4 Distributions upon Dissolution and Liquidation of the
Partnership. Upon dissolution and liquidation of the Partnership and following
the payment of all debts and liabilities of the Partnership, including any
mortgage indebtedness owed by the Partnership with respect to
12
the Partnership Property, any liability to Partners for authorized but unpaid
Distributions and all expenses of dissolution and liquidation, and subject to
the right of the liquidating agent to establish such cash reserves as it may
deem reasonably necessary for any contingent or unforeseen liabilities and
obligations of the Partnership, all net liquidation proceeds shall, to the
extent available, be distributed to the Partners having positive balances in
their Capital Accounts as of the date of the Distribution in proportion to the
amounts of such positive balances. Any remaining net liquidation proceeds shall
be distributed to the Partners in accordance with Section 5.3.
SECTION 5.5 Withholding Distributions. The General Partner may, at its
election upon notice to any Limited Partner, withhold or cause to be withheld
from any Distribution to be made under this Agreement to such Limited Partner,
any sum or amount that the Limited Partner is in default in paying or
contributing to the Partnership or the General Partner under or by virtue of
this Agreement. The amount so withheld shall be paid over to the party (viz.,
the Partnership or the General Partner) entitled thereto. For purposes of all
computations hereunder (including the computations under this Article V), the
amounts so paid over to another party or withheld as aforesaid shall be deemed
to have been paid to the Limited Partner otherwise entitled to such
Distribution. The rights and remedies provided in this Section 5.5 are in
addition to, and not in limitation of, the rights and remedies provided the
Partnership and each Partner by law or by any other agreement.
SECTION 5.6 Allocation in Event of Transfer. Each item of income, gain,
loss, deduction or credit allocable to a Partner's Partnership Interest that is
transferred in whole or in part during any fiscal year shall be allocated, if
permitted by law, according to the varying Partnership Interests of the Partners
during such fiscal year. In applying this rule, the Partners shall (i) prorate
such items over the fiscal year or (ii) elect to utilize the precise method of
an interim closing of the Partnership's books.
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ARTICLE VI
Accounting
SECTION 6.1 Books and Records. At all times during the continuation of the
Partnership, the General Partner shall keep or cause to be kept true and full
books of account showing all receipts and expenditures, assets and liabilities,
income and losses, all agreements among the Partners and all other records
necessary for recording the Partnership's allocations and Distributions provided
for in Article V hereof and, in particular, the records required by Section
33-42-60 of the Act. The books of account of the Partnership shall be maintained
on a cash or accrual basis as determined by the General Partner. The General
Partner shall cause such books of account and records to be maintained at all
times at its principal office specified in Section 2.3, and such books of
account and records shall be available at reasonable times for inspection,
examination and copying by all Partners in person or by their fully authorized
representatives.
SECTION 6.2 Fiscal Year. The fiscal year of the Partnership shall end
December 31.
SECTION 6.3 Reports. The General Partner shall cause the Partnership to
prepare and deliver to the Partners and to file or deliver as and when required
the following:
(a) Within 90 days after each June 30, a semiannual unaudited
financial statement of the condition of the Partnership as of June 30 of each
fiscal year prepared in accordance with generally accepted accounting principles
including an itemized statement of income and expenses as of June 30, a
narrative summary of the previous 6 months' activities by the Partnership and
such other information as shall be necessary in order to keep the Partners
generally informed as to the status of the Partnership.
(b) Within six months after the expiration of each fiscal year, an
annual statement showing the taxable income and expenses of the Partnership, the
balance sheet, statement of changes in the financial condition as of the end of
the fiscal year and an itemized statement of receipts and operating expenses for
the fiscal year then ended. Such annual statement shall be audited and certified
by independent certified public accountants if so requested by a
Majority-in-Interest. Such annual statement shall be accompanied by a summary of
the Partnership's activities for the fiscal year then ended and such other
information as shall be necessary in order to keep the Partners reasonably
informed about the operations of the Partnership.
(c) Any and all periodic reports, returns or statements required to be
distributed to the Partners by any applicable law or regulatory authority and
any other reports required by any federal, state or local governmental agency.
14
(d) Within ten days after receipt thereof, a copy of any notice of
default under any material agreement to which the Partnership is a party or by
which it or any of its assets are bound.
SECTION 6.4 Bank Accounts. All funds of the Partnership shall be deposited
in its name in such checking or savings accounts or time certificates or other
investments as shall be designated from time to time by the General Partner.
Withdrawals therefrom shall be made upon such signature or signatures as the
General Partner may designate.
SECTION 6.5 Accounting Decisions. All decisions as to accounting
principles, except as may be specifically provided to the contrary herein, shall
be made by the General Partner.
SECTION 6.6 Federal Income Tax Returns and Elections.
(a) The federal, state or other local tax returns and reports required
to be filed by the Partnership shall be prepared by a firm of independent
certified public accountants chosen by the General Partner. All elections
required or permitted to be made by the Partnership under the Code shall be made
by the General Partner in such manner as, in its opinion, will be most
advantageous to a Majority-in-Interest of the Partners.
(b) Within six months after the expiration of each fiscal year, the
General Partner shall cause the Partnership to prepare and deliver to each
Partner a statement of each Partner's share of the Partnership's taxable income
or loss and all other information necessary for the preparation by each Partner
of its federal and state income tax returns, including a Form K-1.
(c) If requested to do so by the transferee of Units, the General
Partner shall make the election under Section 754 of the Code on behalf of the
Partnership, at such times and in such manner as to obtain all the benefits
provided for by such section and shall make the appropriate adjustments to
Capital Accounts to reflect any Section 743(b) basis adjustment; provided that
neither the Partnership nor the General Partner shall be held responsible or
liable for the failure to make such elections if the General Partner is not
given notice of the event giving rise to an adjustment for which such election
is needed at or prior to the close of the fiscal year during which the event
occurs.
ARTICLE VII
Rights, Duties and Obligations of the General Partner
SECTION 7.1 Management.
15
(a) The business and affairs of the Partnership shall be managed by
the General Partner. Subject to the terms, restrictions and limitations of this
Agreement, including, but not limited to, Section 7.5, the General Partner shall
have full, exclusive and complete discretion in the management and control of
the affairs of the Partnership and shall make all decisions affecting the
Partnership's affairs consistent with the terms of this Agreement.
(b) The General Partner shall conduct the Partnership's business and
affairs with the same care and attention as a reasonable man would use in the
prudent conduct of his business and shall devote such time to the Partnership as
shall be reasonably required for the Partnership's welfare and success. Nothing
herein contained, however, shall be deemed to restrict the General Partner from
engaging in any other business ventures for its own account or through other
partnerships, including business ventures which may compete with the
Partnership.
SECTION 7.2 Powers. The General Partner shall manage and control the
affairs of the Partnership to the best of its ability and shall use its best
efforts to carry out the purposes of the Partnership as set forth herein. In
addition to the powers given to it by law, subject to the terms, restrictions
and limitations of this Agreement, including, but not limited to, Section 7.5,
the General Partner is authorized hereby to engage in the activities described
in Section 2.4.
SECTION 7.3 Employment of Agents. Subject to the provisions of Section 7.6
of this Agreement, the General Partner may employ, on behalf of the Partnership,
such Persons, including, but not limited to, attorneys, contractors, engineers
and accountants, as the General Partner, in its sole judgment, shall deem
advisable for the management and usage of the Partnership Property and the
conduct of the business of the Partnership on such reasonable terms and for such
reasonable compensation as the General Partner, in its reasonable judgment,
shall determine. Any such Person also may be employed or retained by the General
Partner in connection with its other business ventures. The fact that a Partner
or a member of its family or an affiliate of such Partner is directly or
indirectly interested in or connected with a Person employed by the Partnership
or from whom the Partnership may buy services, merchandise, supplies or other
property shall not prohibit the General Partner from employing such Person or
from dealing with him or it on behalf of the Partnership, provided that such
arrangements are as favorable as those otherwise available to the Partnership
and the General Partner has notice of such family relation or affiliation.
SECTION 7.4 Responsibility; Indemnification.
(a) The General Partner, its officers, agents and employees shall not
be liable, responsible or accountable to any Partner for any loss or damage
incurred by such Partner or by the Partnership by reason of an act performed or
omitted to be performed by the General Partner
16
or its officers, agents or employees in good faith on behalf of the Partnership
and in a manner reasonably believed to be within the scope of authority granted
to the General Partner by this Agreement and in the best interests of the
Partnership except for acts of proven malfeasance, misfeasance or gross
negligence or any breach of the specific terms and provisions hereof.
(b) The Partnership or its receiver or trustee shall indemnify and
save harmless (and pay all judgments and claims against) the General Partner and
its officers, agents and employees from any liability or damage incurred by
reason of any act performed or omitted to be performed by them in connection
with the business of the Partnership, including reasonable attorneys' fees
incurred in connection with the defense of any action based on any such act or
omission and all liabilities under federal and state securities laws. If a claim
for indemnification (other than for expenses incurred in a successful defense)
is asserted against the Partnership under this Agreement or otherwise, the
question of whether such indemnification is against public policy shall be
settled by arbitration in accordance with the Rules of the American Arbitration
Association, unless in the opinion of counsel to the Partnership, the matter has
been settled by a controlling precedent. The satisfaction of any indemnification
and any saving harmless shall only be paid from and shall be limited to the
Partnership assets, and no Partner shall have any personal liability on account
thereof.
SECTION 7.5 Limitations on Powers of the General Partner.
(a) Notwithstanding any provisions of this Agreement to the contrary,
the General Partner shall not take any of the following actions without the
prior written consent of a Majority-In-Interest:
(i) Make any material change in the Partnership's business as of
the date hereof;
(ii) Establish an additional class of Units;
(iii) Cause the Partnership to purchase any real property or
invest in any other partnership, venture or similar investment, other than the
Partnership Property as described herein, where the purchase price or investment
is greater than $1,000,000;
(iv) Sell or exchange any partnership interest which relates to
an RSA owned by the Partnership; or
(v) Borrow or incur any similar obligation to pay a principal
amount in excess of $5,000,000 or a term in excess of one year.
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(b) Notwithstanding any other provisions in this Agreement to the
contrary, the General Partner shall not take any of the following actions
without the prior written consent of the holders of at least 75% of the
outstanding Units:
(i) Admit any Person as a Partner except as provided in Section
3.5;
(ii) Do any act in contravention of this Agreement which would
make it impossible to carry on the ordinary business of the Partnership;
(iii) Confess a judgment against the Partnership;
(iv) Possess any Partnership Property or assign the rights of the
Partners in any Partnership Property for other than a Partnership purpose;
(v) Assign the Partnership Property in trust for creditors on the
basis of an assignee's promise or undertaking to pay the debts or obligations of
the Partnership or file, on behalf of the Partnership, a voluntary petition for
relief under bankruptcy laws or similar voluntary petition under state laws;
(vi) Sell, exchange, convey or otherwise dispose of (by sale,
lease or otherwise) all or substantially all of the Partnership Property;
(vii) Agree to a merger or consolidation of the Partnership with
another entity;
(viii) Make any loans of any Partnership funds to the General
Partner or others except purchase money loans to a purchaser of the Partnership
Property pursuant to a sale of all or a portion of the same and except for
investment of Partnership assets in short term securities of reputable issuers
or in interest-bearing accounts pending Distribution to the Partners;
(ix) Call for additional Contributions from the Partners except
as set forth in Section 3.4; or
(x) Commence a public offering of Units, debt obligations or
other interests in the Partnership except as set forth in Section 3.3; or
(xi) Employ, or permit to be employed, the funds or assets of the
Partnership in any manner except for the exclusive benefit of the Partnership.
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(c) No act of the Partnership or the General Partner in contravention
of a restriction provided in this Section 7.5 shall bind the Partnership.
SECTION 7.6 Expenses. The Partnership shall pay all expenses of the
Partnership and shall reimburse the General Partner for all expenses payable to
third parties incurred in connection with the Partnership's business and
affairs, including, but not limited to:
(a) All costs of personnel employed by the Partnership and equipment
and facilities required for the business and affairs of the Partnership;
(b) All costs of borrowed money, taxes, assessments on the Partnership
Property and other taxes applicable to the Partnership;
(c) Legal, audit, accounting, brokerage and other fees;
(d) Fees and expenses paid to independent contractors, mortgage
bankers and services, consultants, technicians, insurance brokers and other
agents;
(e) Expenses incurred in connection with the acquisition, disposition,
leasing, refinancing and management of the Partnership Property;
(f) The cost of insurance as required in connection with the business
of the Partnership;
(g) Expenses payable to third parties for organizing, revising,
amending, converting, modifying or terminating the Partnership;
(h) Expenses in connection with Distributions made by the Partnership
to, and communications and bookkeeping and clerical work necessary in
maintaining relations with, the Partners; and
(i) The cost of preparation and dissemination of all Partnership tax
returns, reports and filings as required hereunder or as required by law.
SECTION 7.7 Maintenance of Partnership Status.
(a) The General Partner at all times shall use its best efforts to
cause the Partnership to comply with such conditions as may be required from
time to time to permit the Partnership to be classified, for federal income tax
purposes, as a limited partnership and not as an association taxable as a
corporation.
19
(b) The General Partner shall take all action which shall be necessary
or appropriate for the continuation of the Partnership's valid existence as a
limited partnership under the laws of the State of South Carolina.
SECTION 7.8 Insurance. The Partnership shall carry and maintain in force
the following minimum levels of insurance, the premiums for which shall be a
cost and expense in connection with the operation of the Partnership;
(a) Workman's compensation insurance covering all employees of the
Partnership and the Partners employed in, on or about the Partnership Property
or any location of the Partnership, providing statutory benefits as required by
the laws of the State of South Carolina;
(b) Comprehensive general liability insurance on an occurrence basis
against claims for personal injury liability, including, without limitation,
bodily injury, death or property damage liability; such insurance shall also
include coverage against liability for bodily injury or property damage arising
out of the use, by or on behalf of the Partnership, of any owned, non-owned or
hired automotive equipment;
(c) Excess (umbrella) liability coverage;
(d) Insurance against loss or damage to the Partnership Property by
fire and the risks embraced within the term "Extended Coverage" in such amount
or amounts as required to protect the value of the interest of the Partnership
in such assets and insurance against such other hazards and risks as may be
reasonably deemed necessary by the General Partner in such amount or amounts as
required above, with such insurance company or companies as the General Partner
may approve, and the General Partner shall retain the policies of such insurance
and of any additional insurance which shall be taken out upon the Partnership
Property;
(e) Appropriate flood insurance; and
(f) Such other insurance as may be deemed desirable to protect the
Partnership and the Partners.
All such aforesaid policies shall be issued in the name of the Partnership.
SECTION 7.9 Fiduciary Duty. The General Partner shall be under a fiduciary
duty to conduct the affairs of the Partnership in the best interests of the
Partnership and the Partners, including the safekeeping and use of all
Partnership funds and assets and the use thereof for the exclusive benefit of
the Partnership.
20
SECTION 7.10 Termination of General Partner. The General Partner shall
cease being a General Partner and its rights and powers to act as such shall
terminate if the General Partner:
(a) Is removed for any act or acts constituting willful malfeasance or
gross neglect by the vote of those Limited Partners holding 50% or more of the
outstanding Units;
(b) Voluntarily retires upon not less than 90 days written notice to
the Limited Partners; or
(c) Is removed with or without cause by the affirmative vote of the
holders of at least 75% of the outstanding Units.
SECTION 7.11 Power of Attorney. Each Partner, by the execution of this
Agreement, hereby constitutes and appoints the General Partner as
attorney-in-fact for such Partner with full power and authority to act in its
name and on its behalf in the execution, acknowledgment and filing of documents
including, but not limited to, the following:
(a) Any certificates, instruments and documents, including fictitious
name or assumed name certificates, as may be required by or appropriate under
the laws of any state or other jurisdiction in which the Partnership is doing or
intends to do business in connection with the use of the name of the Partnership
by the Partnership;
(b) Any other instrument which may be required to be filed by the
Partnership under the laws of any state or by any governmental agency or which
the General Partner deems advisable to file; and
(c) Any document which may be required to effect the continuation of
the Partnership, the admission of an additional or substituted Partner as
provided herein, the preservation of the status of the Partnership as a
partnership for federal income tax purposes or the dissolution or termination of
the Partnership; provided, that such continuation, admission, preservation or
dissolution and termination is in accordance with the terms of this Agreement.
The power of attorney hereby granted by each Partner to the General Partner
is a special power of attorney coupled with an interest and (a) is irrevocable,
(b) may be exercised by listing all of the Partners executing any instrument
with a single signature of the General Partner acting as attorney-in-fact for
all of them and (c) shall survive the delivery of an assignment by a Partner of
the whole or any portion of this interest herein.
ARTICLE VIII
21
Rights of and Limitations on Limited Partners
SECTION 8.1 Rights of Limited Partners.
(a) Limited Partners shall not in any way be prohibited from or
restricted in engaging in or owning an interest in any other business venture of
any nature, including any venture which might be competitive with the business
of the Partnership. The Partnership may engage Limited Partners or Persons
associated with them for specific purposes and may otherwise deal with such
Limited Partners on terms and for compensation to be agreed upon by any such
Limited Partner and the Partnership.
(b) Each Partner shall be entitled to (i) have the Partnership's books
kept at the office of the Partnership specified in Section 2.3 and, at all times
during reasonable business hours, inspect and copy any of the same and (ii) have
on demand true and full information of all things affecting the Partnership and
a formal accounting of Partnership affairs whenever circumstances render it just
and reasonable.
(c) Each Limited Partner shall be entitled to receive appropriate
accounting of the Partnership as provided in Section 6.3 hereof.
(d) In the event that the federal income tax return of any Limited
Partner as it relates to his Partnership Interest herein shall be investigated,
reviewed or questioned by the Internal Revenue Service, the Partnership and the
General Partner agree to exert their best efforts to promptly supply all books,
records and financial information as may be necessary or required to
substantiate the entries on such tax return. The General Partner shall serve as
"tax matters partner" and in any similar capacity under state or local law.
SECTION 8.2 Limitation on Rights of Limited Partners. The Limited Partners
shall have no right to and shall take no part in, nor at any time interfere in
any manner with, the management, conduct or control of the Partnership's
business and operation, including the Partnership Property, and shall have no
right and authority to act for or bind the Partnership in any manner whatsoever.
The rights and powers of the Limited Partners shall not extend beyond those
expressly set forth in this Agreement and those granted under the Act, and any
attempt to participate in the control of the Partnership in a manner contrary to
the rights and powers granted herein and under the Act shall be null and void
and without force and effect. By the execution hereof each Limited Partner
consents to the exercise by the General Partner of the rights, powers and
authority conferred on the General Partner by this Agreement.
SECTION 8.3 Lack of Personal Liability of Limited Partners. Except as
otherwise
22
expressly provided herein and as otherwise provided by law, no Limited Partner
shall have any personal liability whatsoever, whether to the Partnership, to the
Partners or to the creditors of the Partnership or the General Partner, for the
debts, obligations or losses of the Partnership or the General Partner, as the
case may be.
SECTION 8.4 Permissible Ownership of Units. A Limited Partner shall not own
less than 0.5% nor more than 30% of the outstanding Units. Notwithstanding the
foregoing and the prohibition set forth in Section 8.4, a Partner may own less
than 0.5% or more than 30% of the outstanding Units, if a Majority-in-Interest
consents to such ownership and the Partner complies with the provisions of
Article IX, or such additional units are acquired through the exercise of a
Partner's right to acquire Units under the provisions of Article III or Article
IX.
SECTION 8.5 Remedy of Partnership. In addition to the Partnership's
remedies at law or equity, in the event that a Limited Partner breaches the
representations and warranties set forth in Section 4.2 or any other material
term of this Agreement, if such breach is not cured within 30 days of written
notice of such breach by the General Partner then such Limited Partner shall be
deemed to offer his Units to the other Partners at a price of one hundred
dollars ($100.00) per unit pursuant to Section 9.3.
SECTION 8.6 Duty to Offer Stock of General Partner Upon Ceasing to be a
Limited Partner. Any Limited Partner who shall cease to be a Limited Partner for
any reason shall, upon such cessation, offer to sell to the General Partner and
its shareholders all of the Limited Partner's stock of the General Partner in
accordance with and at a price determined by the PMN, Inc. Stockholders'
Agreement.
ARTICLE IX
Restriction on Transfer, Change in Control and Withdrawal
SECTION 9.1 Restriction on Transfer. Except as otherwise provided in this
Article IX, no Partner may sell, exchange, deliver, assign, give, pledge,
mortgage, hypothecate or otherwise encumber, transfer or dispose of its Units
now owned or hereafter acquired, in whole or in part, to any Person without the
prior written consent of a Majority-in-Interest or, in the absence of such
written consent, without complying with the applicable provisions of this
Article IX. Any attempted sale, transfer, pledge, hypothecation or other
disposition or encumbrance of a Partner's Units other than as permitted by this
Article IX shall be void and of no force or effect. Any transferee of the Units
of any Partner pursuant to the provisions of this Article IX shall, as a
condition to concluding that transfer, assume by a written instrument
satisfactory to the General Partner all of the transferor's right, obligations
and liabilities as a Partner (including all of its
23
right, obligations and liabilities under this Agreement), and shall only be
admitted as a Partner with the written consent of a Majority-in-Interest.
SECTION 9.2 Receipt of Bona Fide Offer. In the event that a Partner
receives a Bona Fide Offer to purchase all (but not less than all) of such
Partner's Units and such Partner desires to accept such Bona Fide Offer, such
Partner (hereinafter in this Article IX referred to as the "Offering Partner")
shall promptly send Registered Notice to the General Partner and to the other
Partners offering to sell the Offering Partner's Units to the other Partners.
The Registered Notice must contain a true and complete copy of the Bona Fide
Offer, setting forth the price and all terms and conditions of the Bona Fide
Offer and the name, address and business of the offeror.
SECTION 9.3 Offer by Partner. If at any time a Partner desires to sell all
(but not less than all) of its Units and such Partner has not received a Bona
Fide Offer to purchase its Units, the Partner (hereinafter in this Article IX
referred to as the "Offering Partner") shall send Registered Notice to the other
Partners offering to sell all (but not less than all) of the Offering Partner's
Units at a price not to exceed the Purchase Price (as defined in Section 9.8)
(the "Offering Price") and upon the terms and conditions set forth in this
Article IX. Such Registered Notice shall hereinafter be referred to as the
"Offer to Sell" and must include the Offering Price.
SECTION 9.4 Procedure. For a period of 90 days after receipt of such
Registered Notice sent by an Offering Partner pursuant to Section 9.2 or 9.3,
each other Partner shall have the right, at its sole option, to purchase its pro
rata share of the Offering Partner's Units at the lesser of (a) the Purchase
Price and upon the terms and conditions set forth in Section 9.9 or (b) the
purchase price and upon the terms and conditions set forth in the Bona Fide
Offer. To the extent that any Partner does not purchase its pro rata share of
the offered Units, such Units shall be reoffered to the remaining other Partners
to purchase their pro rata interest in such Units. If the other Partners shall
not, individually or together, agree to purchase (for reasons other than the
Offering Partner's default hereunder), within the 90-day period, all of the
Units covered by the Bona Fide Offer or the Offer to Sell, the Offering Partner
shall have the right (i) in the case of a Bona Fide Offer, to accept the Bona
Fide Offer in whole (but not in part) and to sell such Units to the offeror of
the Bona Fide Offer, subject to all of the provisions and restrictions of this
Agreement, but only in strict accordance with all of the provisions of the Bona
Fide Offer or (ii) in the case of an Offer to Sell, to sell such Units in whole
(but not in part), subject to all of the provisions and restrictions of this
Agreement, at a price equal to or greater than the Offering Price. If any sale
is not fully consummated within 60 days after the expiration of the 90 day
period, the provisions of this Article IX must again be complied with by the
Offering Partner before the Offering Partner may sell its Units.
SECTION 9.5 Rights to Participate in a Bona Fide Offer.
24
(a) During the 90-day period required pursuant to Section 9.4, any
Partner who does not exercise its option to purchase its pro rata share of the
Offering Partner's Units which are the subject of a Bona Fide Offer has the
right, upon giving Registered Notice of its intentions to the Offering Partner,
to participate in the Bona Fide Offer, pro rata, with the Offering Partner.
(b) If the offeror of a Bona Fide Offer offers to purchase a number of
Units which represent 50% or more of the outstanding Units, no Partner may
accept such offer unless the offeror agrees to purchase any other Units offered
for sale pursuant to Section 9.5(a).
(c) If the holders of 75% or more of the outstanding Units elect to
sell their Units pursuant to Section 9.5(a) and the offeror of a Bona Fide Offer
is willing to purchase such Units, the remaining Partners will be required to
sell their Units on the terms and conditions of the Bona Fide Offer, if so
requested by the selling Partners.
SECTION 9.6 Other Transfers. A material part of the consideration for the
Partners entering into this Agreement is the personal confidence reposed in all
of the Partners, and no Person shall succeed to any of the rights of a Partner
under this agreement by virtue of dissolution, liquidation, purchase, merger or
consolidation of a Partner, or any voluntary or involuntary proceeding in
bankruptcy, receivership, attachment, execution, assignment for the benefit of
creditors or other legal process involving a Partner's insolvency. Therefore, if
there is a Change in Control (as determined hereinafter) the call option of
Section 9.7 shall apply. The Change in Control Partner (as defined in Section
9.7) shall send Registered Notice of a proposed or actual Change in Control to
the General Partner and the other Partners. In the event that a Change in
Control Partner fails to provide Registered Notice as provided in the foregoing
sentence, then any other Partner may send such Registered Notice which shall be
deemed to be the notice described in the foregoing sentence.
(a) Change in Control shall refer, in the case of any Partner that is
not an individual, to (i) any capital reorganization, reclassification or
recapitalization of its capital stock, partnership interests or other voting
ownership interests, as the case may be, ("Ownership Interests") or any transfer
of its Ownership Interests in one or a series of related transactions or (ii)
any consolidation or merger with or into any other entity as a result of which
reorganization, reclassification or recapitalization, transfer, consolidation or
merger a Person or group of Persons not previously controlling, controlled by or
under common control with, such Partner prior to such reorganization,
reclassification, recapitalization, transfer, consolidation or merger acquires
more than 50% of the Ownership Interests of such Partner or its successor;
provided, however, that a Change in Control does not include (i) the transfer of
the capital stock of a Partner to a Person controlling, controlled by or under
common control with such Partner or (ii) a transfer made in accordance with
Section 9.12.
25
(b) In the event that (i) the Partner is controlled directly or
indirectly by an entity ("Controlling Entity") not a party to this Agreement and
(ii) any event occurs with respect to such Controlling Entity which would be a
Change in Control hereunder if the Controlling Entity were a Partner, the
controlled Partner shall be deemed to have had a "Change in Control."
(c) Notwithstanding the foregoing, whenever a Change in Control of a
Partner has occurred, the Partners may elect to waive the call option provided
for in Section 9.7 by a vote of at least a Majority-in-Interest. In order to
obtain the waiver, the Change in Control Partner must send to the other Partners
Registered Notice of the Change in Control describing the Change in Control and
the reasons for its request of the waiver. The Partners shall have 30 days to
vote on the request. Failure of the Partners to meet, vote or act on the waiver
shall be deemed to be a denial of the waiver.
(d) Notwithstanding the foregoing, in the event that one or more
Partners (the "Transferring Partner(s)") combine, exchange stock or merge with
an entity formed to hold shares of such Transferring Partner(s) (the "Holding
Company") then such combination, exchange or merger shall not be a Change in
Control if the holders of all of the outstanding voting interests of the
Transferring Partner(s) own more than 50% of the outstanding voting interests of
the Holding Company.
SECTION 9.7 Call Option Upon Change in Control. Whenever a Change in
Control in a Partner (the "Change in Control Partner") has occurred and
Registered Notice of such Change in Control has been received by the other
Partners, the other Partners shall have the option to purchase all of the Change
in Control Partner's Units at the price set forth in Section 9.8 and upon the
terms and conditions set forth below.
For a period of 90 days from its receipt of a Registered Notice of a Change
in Control of a Partner, the other Partners shall have the option, in their sole
discretion, to purchase their pro rata share of the Units of the Change in
Control Partner. To the extent that any Partner does not purchase its pro rata
share of the Change in Control Partner's Units, such Units shall be reoffered to
the remaining Partners to purchase their pro rata share of such Units. Said
Units shall be reoffered on a pro rata basis to the participating Partners until
all of such Units have been purchased or until no Partner desires to purchase
any additional Units.
If the other Partners shall not, individually or together, purchase (for
reasons other than the Change in Control Partner's default hereunder), within
the prescribed time periods, all of the Change in Control Partner's Units, such
option shall expire and the Change in Control Partner shall be deemed to be a
Partner and shall continue to be bound by the terms of this Agreement.
SECTION 9.8 Purchase Price. The following formula shall apply for
determination of the
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purchase price of the Units acquired by the Partners pursuant to this Article IX
(the "Purchase Price"). The Purchase Price per Unit shall be determined by
dividing the Offering Partner's or the Change in Control Partner's Units by the
Book Value of the Partnership and applying any premium as described below. The
Book Value of the Partnership shall be deemed to be $100,000,000.
The Book Value of such Units shall be subject to the following premiums
according to the calendar year in which such Units are to be acquired.
1995 - 10%
1996 - 20%
1997 - 30%
1998 - 40%
1999 - 50%
Thus the Purchase Price shall be:
110% x Book Value (1995)
120% x Book Value (1996)
130% x Book Value (1997)
140% x Book Value (1998)
150% x Book Value (1999 and thereafter)
The Partners acknowledge and agree that (i) the amount set forth as the
Book Value is intended to produce a Purchase Price representing a realistic fair
market value for the Units and (ii) the Partners will reconsider and, as
appropriate, adjust such amount at least every two years to reflect changes in
the fair market value of the Units, as determined by an outside appraiser or
other similar methodology and approved by a Majority-in-Interest.
SECTION 9.9 Method of Payment. Payments of the Purchase Price for any Units
purchased pursuant to this Article IX may, at the option of the purchaser, be in
cash or 25% of the Purchase Price in cash and the remainder payable in the form
of a note payable in equal annual installments with interest fixed at the Prime
Rate, determined as of the date of closing, over a period not to exceed three
years from the date of closing, the first such payment to be due one year after
the date of closing. The purchaser shall have the right on ten days' written
notice before the date of any payment to defer any remaining amortization for
one year, thereby postponing final payment by one year notwithstanding the three
year limitation of the preceding sentence. This right may only be exercised once
with respect to any purchase. Except as otherwise provided in this Section 9.9,
in the event any payment of principal or interest as hereinabove provided shall
not be paid when due, then the holder of such note shall have the right
27
to declare the full amount of the balance of such note immediately due and
payable without awaiting the maturity of the remaining installments. The maker
of the note shall have the right to prepay any additional portion or all of the
balance of the Purchase Price on any payment date, including the date of the
first payment, with interest computed to the date of the payment.
SECTION 9.10 Failure to Comply. Upon the occurrence of a purported sale,
transfer or other disposition which is not in compliance with this Article IX,
the non-transferring Partners shall have an irrevocable option to purchase the
Units of the Partner desiring to make such disposition. The other Partners may
exercise their option to purchase such Units at any time within 90 days after
receipt of notice of the purported transfer by complying with the provisions of
Section 9.4. The purchase price of such Units shall be computed in accordance
with Section 9.8 and shall be paid in accordance with Section 9.9.
In the event of a purported transfer which is not in accordance with the
provisions of this Article IX, the disposing Partner and the transferee of the
Units each hereby irrevocably appoints the General Partner and all its officers
as its lawful attorneys-in-fact to take all actions and to execute all documents
in such Partner's or transferee's name as are necessary to transfer such Units
to the Partner(s) upon exercise of the options granted by this Section 9.10.
SECTION 9.11 Closing. Closing on the purchase of all (but not less than
all) of the Units of the Offering Partner or the Change in Control Partner under
this Article IX shall be held at the principal office of the Partnership within
60 days after the expiration of the 90 day period set forth in Section 9.4 or
9.7.
SECTION 9.12 Permitted Transfer to Affiliate. Notwithstanding the
provisions of this Article IX, a Partner may transfer all (but not less than
all) of its Units to (a) any Person controlling or under direct or indirect
common control with such Partner or (b) to any Family Affiliate of such Partner.
For purposes of this Section 9.12, (a) "control" means the possession, directly
or indirectly, of the exclusive power to direct or cause the direction of the
management or policies of such other Person through the ownership of voting
securities or interests, (b) "common control" means that the Partner and such
other Person are both ultimately controlled by the same Person or Persons, (c)
"Family Affiliate" means any single individual who is a Family Member or any
single partnership, corporation, limited liability company, trust, estate or
other entity, more than 75% of whose equity is held by Family Members and (d)
"Family Members" means the then-current equity holders of a Partner and members
of the immediate families (including grandchildren) of such equity holders and
trusts, where 90% or more of the investments of the trust (based on their
actuarial value) are held for the sole benefit of any one or more of the
foregoing.
SECTION 9.13 Governmental Approval. Notwithstanding anything contained in
this
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Article IX to the contrary, if Federal Communication Commission ("FCC") or state
public service commission ("PSC") approval of any sale, transfer or other
disposition permitted under this Article IX is required, such sale, transfer or
other disposition shall not be concluded until the required FCC or PSC approval
has been granted by a final order, and the conclusion of such sale, transfer or
other disposition shall be in all respects in accordance with the terms of that
approval. If the date of such final order has not occurred within one year after
the Partners have notified the Offering Partner or the Change in Control Partner
of their election to purchase such Units, any Partner may terminate its
obligation to purchase or sell such Units upon ten days written notice to the
other Partners and such Units shall be reoffered in accordance with this Article
IX.
SECTION 9.14 Waiver/Voting by Offering Partner. The Offering Partner or the
Change in Control Partner agrees, if so requested by the General Partner to
waive notice of a meeting of the Partners and the right to attend any
Partnership meeting with respect to Article IX. In the event that the Offering
Partner or the Change in Control Partner has an employee, agent or other
representative who is an officer, manager or other representative of the
Partnership, such person shall waive notice of the right to attend a meeting of
such persons.
SECTION 9.15 Interests of Selling Partner. In the event that any Partner
acquires the interest (the "Purchasing Partner") of any other Partner (the
"Selling Partner") pursuant to the right of first refusal set forth in Section
9.2 and the Purchasing Partner subsequently disposes of such interest at a price
greater than the price paid by such Purchasing Partner within a one year period
from such purchase, then the Purchasing Partner shall pay the Selling Partner a
share of such proceeds. The Selling Partner's share of such proceed shall equal
the product of the fraction determined by dividing the number of Units acquired
from the Selling Partner by the total number of Units sold by the Purchasing
Partner, and multiplying the net profits realized by such Partner by such
fraction.
ARTICLE X
Withdrawal and Dissolution
SECTION 10.1 Withdrawal. No Partner shall be permitted to withdraw from the
Partnership. Upon the dissolution and commencement of winding up of the General
Partner, the Partnership shall be dissolved at the expiration of 90 days from
such date unless within such 90-day period all of the Limited Partners elect to
continue the business of the Partnership and select a substitute General
Partner.
SECTION 10.2 Dissolution and Winding Up.
(a) The Partnership shall be dissolved upon the first to occur of the
following:
29
(i) the termination of the General Partner pursuant to Section
7.10 or the legal incapacity, dissolution, judicial insolvency, voluntary or
involuntary commencement of proceedings under federal or state bankruptcy laws
or the appointment of a receiver under federal or state law of the General
Partner, unless all of the Limited Partners elect to continue the Partnership as
provided in Section 10.1;
(ii) a written consent or an affirmative vote of the holders of
75% of the outstanding Units in favor of dissolution of the Partnership;
(iii) November 15, 2049; or
(iv) upon the occurrence of any event under which South Carolina
law causes the dissolution or termination of the Partnership unless the Partners
elect to continue the Partnership as provided therein.
(b) Upon the dissolution of the Partnership, a statement shall be
prepared setting forth the assets and liabilities of the Partnership and a copy
thereof shall be furnished to each Partner within 30 days after such
dissolution. The Partnership's debts shall then be paid in the order of priority
provided by the Act.
Upon any termination of the Partnership, the Partnership will be
dissolved and its affairs shall be wound up as soon as practicable thereafter by
a Person designated by a Majority-In-Interest. In connection with the winding up
of the affairs of the Partnership and the liquidation of the assets thereof, the
Person so designated for such purpose may arrange, either by himself or through
others, for the collection and disbursement to the Partners of any future
receipts from the Partnership Property or other sums to which the Partnership
may be entitled, or may sell the Partnership's interest in the Partnership
Property to any Person on such terms and for such consideration as shall be
consistent with obtaining the fair market value thereof. Upon such termination
and dissolution, a reasonable time shall be allowed for the orderly liquidation
of the assets of the Partnership and the discharge of liabilities to creditors
so as to minimize losses attendant to a liquidation.
SECTION 10.3 Dissolution Event Terms. The "bankruptcy" of the General
Partner shall be deemed to have occurred upon the commencement of a case by or
against the General Partner under title 11 of the United States Code (as now
constituted or hereafter amended) or under any other applicable federal or state
bankruptcy law or other similar law, or upon the entering by a court of a decree
or order appointing a receiver, liquidator, assignee, trustee, sequestrator or
other similar official for the General Partner or any portion of its property;
provided, however, that the "bankruptcy" of the General Partner shall only
include an involuntary commencement of
30
bankruptcy proceedings, if such proceedings have not been dismissed 120 days
after the commencement of such proceedings or if the appointment, without the
General Partner's consent, of a trustee, receiver or liquidator of the General
Partner has not been vacated or stayed within 90 days after such appointment or
the appointment has not been vacated 90 days after the expiration of a stay.
ARTICLE XI
Miscellaneous
SECTION 11.1 Notices. Any and all notices or other communications required
or permitted to be given pursuant to this Agreement shall be in writing and
shall be Registered Notice addressed as follows:
If to the Partnership
or to the General Partner: PMN, Inc.
Attention: Keith Stuckey
440 Knox Abbott Drive, Suite 430
Cayce, South Carolina 29033
with a copy to: McNair Law Firm, P. A.
Attention: M. John Bowen, Jr.
1301 Gervais Street, Suite 1800
Columbia, South Carolina 29201
If to a Limited Partner: To the address shown for such Limited
Partner on the books of the Partnership
or to such other address as any party may have furnished to the other parties in
accordance with this Section 11.1.
SECTION 11.2 Amendment. This Agreement may be amended upon the affirmative
vote of a Majority-in-Interest, except that provisions requiring a vote greater
than a vote of a Majority-in-Interest may only be amended by a similar vote. A
copy of the proposed amendment must be attached to the written notice of the
meeting at which the vote is to be taken.
SECTION 11.3 Captions. Section and paragraph titles or captions contained
in this Agreement are inserted only as a matter of convenience and for reference
and in no way define, limit, extend or describe the scope of this Agreement or
the intent of any provision hereof.
31
SECTION 11.4 Variation in Pronouns. All pronouns and any variation thereof
shall be deemed to refer to the masculine, feminine, neuter, singular or plural,
as the identity of the Person or Persons may require, and the grammatical
construction of sentences shall conform thereto.
SECTION 11.5 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be an original but all of which shall
constitute one instrument. The execution of multiple Certification Signature
Pages by any Partner shall have the same effect as if all signatures of Partners
appear on a single page.
SECTION 11.6 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of South Carolina.
SECTION 11.7 Entire Agreement. This Agreement contains the entire
understanding between the parties and supersedes any prior understanding or oral
agreements between them respecting the subject matter of this Agreement. There
are no representations, agreements, arrangements or understandings, oral or
written, between and among the parties hereto relating to the subject matter of
this Agreement which are not fully expressed herein.
SECTION 11.8 Validity. In the event that any provision of this Agreement
shall be held to be invalid, the same shall not affect in any respect whatsoever
the validity of the remainder of this Agreement.
SECTION 11.9 Benefit. Except as herein otherwise provided to the contrary,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto, their heirs, personal representatives, successors and assigns.
SECTION 11.10 Nature of Partnership Interest. The Units shall be personal
property for all purposes. All property owned by the Partnership, whether real,
personal, tangible or intangible, shall be deemed to be owned by the Partnership
as an entity, and no Partner, individually, shall have any ownership of such
property or the right to compel a Distribution of Partnership Property other
than in cash.
SECTION 11.11 Meetings. A meeting of Partners shall be held at any time on
call of the General Partner with reasonable notice or at any time after written
notice at least ten days in advance jointly signed by any two Partners,
specifying the hour and purposes of the meeting. The call by the General Partner
may be written or oral; except, however, that in those instances where written
notice is required by this Agreement, such call shall comply with such
requirement. In any event, the Partners shall meet at least once annually at a
time and place set by the General Partner. Any matter may be discussed or voted
on at such annual meeting.
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SECTION 11.12 Confidentiality. This Agreement, including its terms and
conditions, and the information delivered to any Partner in connection herewith,
shall be considered confidential information, and no Partner shall disclose this
Agreement or the terms hereof or any such information to any other person
(except each Partner's accountants, lawyers, officers and senior management and
government agencies having a right thereto) without the written consent of the
other Partners, which consent shall not be unreasonably withheld or delayed.
This Section 11.16 shall survive any termination of this Agreement in whole or
in part.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
setting their hands and seals either in person or by their duly authorized
attorney-in-fact as of the day and year first above written.
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CERTIFICATION SIGNATURE PAGE
TO BE EXECUTED BY THE GENERAL PARTNER
The undersigned hereby executes this Certification Signature Page to
Amended and Restated Agreement of Limited Partnership of Palmetto MobileNet,
L.P. (the "Agreement") for the purpose of being admitted to Palmetto MobileNet,
L.P., as a General Partner; and the undersigned does further hereby adopt,
accept, ratify, confirm and agree to be bound by all of the terms and provisions
of this Agreement, including, but not limited to, the restrictions on
transferability of Units set forth in Article IX of the Agreement.
In the presence of: PMN, INC.
By: (SEAL)
- ----------------------------------- ------------------------------
Its:
-------------------------
Business Address:
- -----------------------------------
440 Knox Abbott Drive, Suite 430
Cayce, South Carolina 29033
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CERTIFICATION SIGNATURE PAGE
TO BE EXECUTED BY EACH LIMITED PARTNER
The undersigned, by its duly authorized representative, hereby
executes this Certification Signature Page to Amended and Restated Agreement of
Limited Partnership of Palmetto MobileNet, L.P. (the "Agreement") as of the date
set forth below for the purpose of being admitted to Palmetto MobileNet, L.P.,
as a Limited Partner; and the undersigned does further hereby adopt, accept,
ratify, confirm and agree to be bound by all of the terms and provisions of this
Agreement, including, but not limited to (i) the restrictions on transferability
of Units set forth in Article IX of the Agreement, (ii) the appointment of the
General Partner as its attorney-in-fact as described in Section 7.11 of the
Agreement, and (iii) that the representations and warranties set forth in
Section 4.2 of the Agreement are true and accurate upon the undersigned's
admission to the Partnership.
In the presence of: COMPANY NAME
By:
- ------------------------------------- ------------------------------------
Its:
--------------------------------
Business Address:
- -------------------------------------
----------------------------------------
----------------------------------------
Date: , 1998 Number of Units:
--------------- -----------------------
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