EXHIBIT 10.57
Exhibit D
to October Investment Agreement
FORM OF
LIMITED PARTNERSHIP AGREEMENT
OF
MOBILE SATELLITE VENTURES LP
THIS LIMITED PARTNERSHIP AGREEMENT OF MOBILE SATELLITE VENTURES LP (the
"Partnership") dated as of [________ __,] 2001 is entered into by and among
Mobile Satellite Ventures GP Inc., a Delaware corporation, as General Partner
("General Partner"), the Converting Limited Partners, [Motient Sub] and [TMI
Sub] (each individually, a "Limited Partner," and collectively, together with
any Additional Limited Partners hereafter admitted to the Partnership in
accordance with this Agreement, the "Limited Partners" and together with the
General Partner, the "Partners.").
WHEREAS, Motient, as sole member, formed a limited liability company (the
"LLC") pursuant to the Delaware Limited Liability Company Act (6 Del. C. ss.
18-101, et seq., the "LLC Act") by filing a Certificate of Formation on June 16,
2000 with the Secretary of State of Delaware and entering into a limited
liability company operating agreement dated as of June 16, 2000; and
WHEREAS, the Converting Limited Partners were admitted as members of the
LLC on June 29, 2000 and the Operating Agreement of the LLC was amended and
restated effective as of June 29, 2000 by a certain First Amended and Restated
Limited Liability Company Agreement (the "LLC Agreement"); and
WHEREAS, the members of the LLC and the General Partner approved the
conversion of the LLC to a Delaware Limited Partnership in accordance with the
terms and conditions set forth in the LLC Agreement and pursuant to Section
18-216 of the LLC Act and Section 17-217 of the Delaware Act, whereupon the
members of the LLC and the other Persons listed as LIMITED PARTNERS on Schedule
I hereto became Limited Partners of the Partnership and Mobile Satellite
Ventures GP, Inc. was admitted as General Partner of the Partnership; and
WHEREAS, the Note Investors have on the date hereof purchased the
Convertible Notes which are convertible into limited partner interests in the
Partnership pursuant to their terms; and
WHEREAS, the Note Investors shall be entitled to vote or take other action
on an as-converted basis as provided in this Agreement on the same basis as the
Limited Partners; and
WHEREAS, the General Partner has executed, delivered and filed (or caused
to be delivered and filed) the Certificate of Conversion and the Certificate of
Limited Partnership pursuant to the terms of Section 17-204 of the Delaware Act;
and
WHEREAS, the parties hereto desire to continue the existence of the
Partnership on the terms set forth in this Agreement and in accordance with the
October Investment Agreement and the Ancillary Agreements;
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Partners hereby agree as
follows:
ARTICLE I
DEFINED TERMS
Section 1.1 Definitions. Unless the context otherwise requires, the terms
defined in this Article I shall, for the purposes of this Agreement, have the
meanings herein specified.
"Additional Limited Partner" means a Person admitted to the Partnership as
a Limited Partner pursuant to Section 8.4 of the Stockholders' Agreement.
"Adjusted Capital Account" means, with respect to any Limited Partner, the
balance in such Limited Partner's Capital Account, increased by such Limited
Partner's share of the Minimum Gain and "partner nonrecourse debt minimum gain"
(as defined in Treasury Regulations Section 1.704-2(i)(2)).
"Adjusted Capital Account Deficit" means, with respect to any Limited
Partner, the deficit balance, if any, in such Limited Partner's Capital Account
as of the end of the relevant Fiscal Year, after giving effect to the following
adjustments:
(i) Credit to such Capital Account any amounts which such Limited
Partner is obligated to restore or is deemed to be obligated to restore
pursuant to the penultimate sentences of Treasury Regulations ▇▇.▇▇.
1.704-2(g)(1) and 1.704-2(i)(5); and
(ii) Debit to such Capital Account the items described in Treasury
Regulations ss. 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Treasury Regulations ss. 1.704-1(b)(2)(ii)(d) and
shall be interpreted consistently therewith.
"Affiliate" means with respect to a specified Person, any Person that
directly or indirectly controls, is controlled by, or is under common control
with, the specified Person. As used in this definition, the term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"Agreement" means this Limited Partnership Agreement of the Partnership, as
amended, modified, supplemented or restated from time to time.
"Ancillary Agreements" has the meaning set forth in the October Investment
Agreement.
"Bankruptcy" means, with respect to any Person, such Person shall generally
not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for the
benefit of creditors, or any proceeding shall be instituted by or against such
Person seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in the case of
any such proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of sixty (60)
days, or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for it, or for any
substantial part of its property) shall occur; or such Person shall take any
action to authorize any of the actions set forth above.
"Capital Account" means, with respect to any Limited Partner, the account
maintained for such Limited Partner in accordance with the provisions of Section
4.4 hereof.
"Capital Contribution" means, with respect to any Limited Partner, the
aggregate of its Initial Capital Contribution, if any, together with any
contributions made to the Partnership pursuant to Section 4.1 hereof by such
Limited Partner with respect to the Limited Partnership Interest in the
Partnership now or hereafter held or purchased by such Limited Partner.
"Capital Event" means (a) a sale, transfer, or other disposition of all or
substantially all the assets of the Partnership or (b) any dissolution and
liquidation of the Partnership.
"Capital Proceeds" means the proceeds received (or in the case of a
distribution of the Partnership in kind deemed received if the property were
sold for its Gross Asset Value) by the Partnership from a Capital Event but
excluding any amounts reasonably determined by the General Partner to be
necessary to provide a reasonable reserve for working-capital needs or any other
contingencies of the Partnership.
"Certificate of Conversion" means the Certificate of Conversion of the
Partnership and any and all amendments thereto and restatements thereof filed
with the office of the Secretary of State of the State of Delaware pursuant to
the Delaware Act.
"Certificate of Limited Partnership" means the Certificate of Limited
Partnership of the Partnership and any and all amendments thereto and
restatements thereof filed on behalf of the Partnership with the office of the
Secretary of State of the State of Delaware pursuant to the Delaware Act.
"Class A Limited Partners" means Limited Partners holding Class A Preferred
Units.
"Class A Preferred Unit" means a unit of interest in the Partnership with
the rights and privileges specified herein for Class A Preferred Units and
representing a Percentage Interest equal to one divided by the number of Class A
Preferred Units and Common Units then held by all Limited Partners.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any corresponding federal tax statute enacted after the date of this
Agreement. A reference to a specific section (ss.) of the Code refers not only
to such specific section but also to any corresponding provision of any federal
tax statute enacted after the date of this Agreement, as such specific section
or corresponding provision is in effect on the date of application of the
provisions of this Agreement containing such reference.
"Common Unit" means a unit of interest in the partnership with the rights
and privileges specified herein for Common Units and representing a Percentage
Interest equal to one divided by the number of Class A Preferred Units and
Common Units then held by all Limited Partners.
"Control Party" means (i) an Affiliate that has direct or indirect majority
voting control of a Limited Partner, or (ii) an Affiliate that has a majority of
its voting interests held, directly or indirectly, by a Limited Partner or by
Persons that have direct or indirect voting control of a Limited Partner.
"Convertible Notes" has the meaning set forth in the October Investment
Agreement.
"Converting Limited Partner" means the Persons listed on Schedule I hereto
who were members of the LLC prior to the date hereof and who hold Class A
Preferred Units as a result of the conversion of the LLC to the Partnership.
"Covered Person" means any Limited Partner, any Affiliate of a Limited
Partner or any officers, directors, representatives, shareholders, partners,
employees, representatives or agents of a Limited Partner or their respective
Affiliates, or any directors, officers, shareholders, partners, employees,
representatives or agents of the Partnership or its Affiliates or any
liquidating trustee under Section 13.3.
"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act,
6 Del. ▇.▇▇. 17-101, et seq., as amended from time to time.
"Depreciation" means, for each Fiscal Year or other period, an amount equal
to the depreciation, amortization or other cost recovery deduction allowable
with respect to an asset for such Fiscal Year or other period; provided,
however, that if the Gross Asset Value of an asset differs from its adjusted
basis for federal income tax purposes at the beginning of such Fiscal Year or
other period, Depreciation shall be an amount that bears the same ratio to such
beginning Gross Asset Value as the federal income tax depreciation, amortization
or other cost recovery deduction with respect to such asset for such Fiscal Year
or other period bears to such beginning adjusted tax basis; and provided
further, that if the federal income tax depreciation, amortization or other cost
recovery deduction for such Fiscal Year or other period is zero, Depreciation
shall be determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.
"Fiscal Year" means (i) the period commencing upon the formation of the
Partnership and ending on December 31, 2001, (ii) any subsequent twelve (12)
month period commencing on January 1 and ending on December 31, or (iii) any
portion of the period described in clause (ii) of this sentence for which the
Partnership is required to allocate Profits, Losses and other items of
Partnership income, gain, loss or deduction pursuant to Article VII hereof.
"General Partner" shall mean Mobile Satellite Ventures GP, Inc., or any
Person who or which, at the time of reference thereto, has been admitted to the
Partnership as a General Partner of the Partnership as a successor to Mobile
Satellite Ventures GP, Inc. or as an additional General Partner. "Gross Asset
Value" means, with respect to any asset, such asset's adjusted basis for federal
income tax purposes, except as follows:
(i) the initial Gross Asset Value of any asset contributed by a
Limited Partner to the Partnership shall be the gross fair market value of
such asset, as agreed to by the contributing Limited Partner and the
General Partner;
(ii) the Gross Asset Value of all Partnership assets shall be adjusted
to equal their respective gross fair market values, as determined in good
faith by the General Partner, as of the following times: (a) the
acquisition of an additional interest in the Partnership by any new or
existing Limited Partner or any other adjustment in the Percentage
Interests of the Limited Partners; (b) the distribution by the Partnership
to a Limited Partner of more than a de minimis amount of Partnership assets
as consideration for such Limited Partner's Limited Partnership Interest;
and (c) the liquidation of the Partnership within the meaning of Treasury
Regulations ss. 1.704-1(b)(2)(ii)(g); and
(iii) the Gross Asset Value of any Partnership asset distributed to
any Limited Partner shall be the gross fair market value of such asset on
the date of distribution, as determined by the General Partner.
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
clause (i) or (ii) above, such Gross Asset Value shall thereafter be adjusted by
the Depreciation taken into account with respect to such asset for purposes of
computing Profits and Losses.
"Initial Capital Contribution" means, with respect to any Converting
Limited Partner, such Limited Partner's Capital Contribution to the LLC as of
June 29, 2000 and with respect to any Note Investor means any portion of the
principal amount of any Convertible Note elected by the Note Investor to be
converted pursuant to the terms of such Convertible Note.
"Initial Public Offering" means the closing of a firm commitment
underwritten public offering of equity interests in the Partnership or its
successor.
"Investors" means each Limited Partner listed on the signature page hereof
as an Investor, each other Person admitted as an Investor after the date hereof
and, subject to Section 8.2(i) of the Stockholders' Agreement, any Person
acquiring all or part of the Limited Partnership Interest of an Investor that is
admitted as a Limited Partner as provided herein.
"Limited Partner" has the meaning set forth in the opening paragraph of
this Agreement.
"Limited Partnership Interest" means a Limited Partner's aggregate rights
in the Partnership in accordance with this Agreement and the Delaware Act,
including such Limited Partner's right to share in the Profits and Losses of the
Partnership and right to receive distributions of the Partnership's assets.
"LLC" has the meaning set forth in the first "Whereas" clause.
"LLC Agreement" has the meaning set forth in the second "Whereas" clause.
"Minimum Gain" has the meaning set forth in Treasury Regulations ▇▇.▇▇.
1.704-2(b)(2) and 1.704-2(d).
"Motient" means Motient Corporation, a Delaware corporation.
"Motient Sub" means __________, a Delaware corporation, a special-purpose
wholly owned subsidiary of Motient, which holds the number of Common Units
reflected on Schedule I.
"Non-Qualifying Capital Event" means any Capital Event other than a
Qualifying Capital Event.
"Note Investors" has the meaning set forth in the October Investment
Agreement, but shall not include any person or entity who, at the relevant time,
is not the holder of a Convertible Note.
"Notes" shall mean the MSI Note and the TMI Note, as such terms are defined
in the October Investment Agreement.
"October Investment Agreement" means the Investment Agreement dated as of
October __, 2001 among the LLC, Motient, TMI, and the Investors and the Note
Investors, as amended, restated, supplemented or revised from time to time.
"Partner" shall mean General Partner or Limited Partner or any Person who
or which, at the time of reference thereto, has been admitted to the Partnership
as the General Partner or an Additional Limited Partner of the Partnership.
"Partners" shall refer to all Partners at the time of reference thereto.
"Partnership" means Mobile Satellite Ventures LP, a Delaware limited
Partnership and, when the context so requires, its predecessor, the LLC.
"Percentage Interest" means with respect to any Limited Partner, the ratio
(expressed as a percentage) of the Units actually held by such Limited Partner
as of the date of determination to the aggregate Units actually held by all
Limited Partners on such date, and shall be reflected on Schedule I in
accordance with Section 2.1(c). For purposes of voting and providing consents
under this Agreement and for purposes of Section 8 of the Stockholders'
Agreement, but not, for the avoidance of doubt, for purposes of distributions of
cash or tax and other economic rights under this Agreement, "Percentage
Interests" means, with respect to each Limited Partner and each Note Investor,
the ratio (expressed as a percentage) of the Units (on an as-converted basis)
held by such Limited Partner or such Note Investor, as the case may be, as of
the date of determination to all Units (on an as-converted basis) held by all
Limited Partners and all Note Investors.
"Person" means any individual, corporation, association, partnership
(general or limited), joint venture, trust, estate, limited liability company,
or other legal entity or organization.
"Profits" and "Losses" means, for each Fiscal Year an amount equal to the
Partnership's taxable income or loss for such Fiscal Year, determined in
accordance with ss. 703(a) of the Code (but including in taxable income or loss,
for this purpose, all items of income, gain, loss or deduction required to be
stated separately pursuant to ss. 703(a)(1) of the Code), with the following
adjustments:
(i) any income of the Partnership exempt from federal income tax and
not otherwise taken into account in computing Profits or Losses pursuant to
this definition shall be added to such taxable income or loss;
(ii) any expenditures of the Partnership described in ss. 705(a)(2)(B)
of the Code (or treated as expenditures described in ss. 705(a)(2)(B) of
the Code pursuant to Treasury Regulations ss. 1.704-1(b)(2)(iv)(i)) and not
otherwise taken into account in computing Profits or Losses pursuant to
this definition shall be subtracted from such taxable income or loss;
(iii) in the event the Gross Asset Value of any Partnership asset is
adjusted in accordance with clause (ii) or (iii) of the definition of
"Gross Asset Value" above, the amount of such adjustment shall be taken
into account as gain or loss from the disposition of such asset for
purposes of computing Profits or Losses;
(iv) gain or loss resulting from any disposition of any asset of the
Partnership with respect to which gain or loss is recognized for federal
income tax purposes shall be computed by reference to the Gross Asset Value
of the asset disposed of, notwithstanding that the adjusted tax basis of
such asset differs from its Gross Asset Value; and
(v) in lieu of the depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such Fiscal Year or
other period, computed in accordance with the definition of "Depreciation"
above.
Any items of income, gain, deduction and loss included within Profits and Losses
shall be determined in a manner consistent with Section 704(b) of the Code and
the Treasury Regulations thereunder.
"Qualifying Capital Event" means any Capital Event occurring when the
Partnership is not Solvent (before giving effect to such Capital Event or the
proceeds thereof) and pursuant to which the Capital Proceeds would not be
sufficient to satisfy completely the distributions required to be made pursuant
to Section 8.6(b)(ii) and (iii).
"Required Majority" means Limited Partners and Note Investors holding at
least a majority of the Percentage Interests held by the Limited Partners and
Note Investors entitled to vote on any matter as of the date of determination.
For purposes of this Agreement, each holder of Convertible Notes will be
entitled to vote on any matter put to a vote of Limited Partners pursuant to
this Agreement on an as-converted basis as of the date of determination.
"Second Closing" has the meaning set forth in the October Investment
Agreement.
"Solvent" means, with respect to any Person on a particular date, that such
Person is able to pay such Person's debts as they fall due.
"Stockholders' Agreement" means the Stockholders' Agreement by and among
General Partner, the Limited Partners and the Note Investors.
"Subsequent Capital Contribution" means, with respect to any Limited
Partner, the aggregate Capital Contributions of such Limited Partner made on
this date or hereafter.
"Tax Matters Partner" has the meaning set forth in Section 11.1.
"TMI" means TMI Communications and Company Limited Partnership, a limited
partnership organized under the laws of the Province of Quebec and indirectly
wholly-owned by BCE Inc.
"TMI Sub" means ________, a Delaware limited partnership which is a
special-purpose wholly-owned subsidiary of TMI and which holds the number of
Common Units reflected on Schedule I.
"Treasury Regulations" means the income tax regulations, including
temporary regulations, promulgated under the Code, as such regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).
"Units" means Common Units and Class A Preferred Units.
"Unreturned Initial Capital Contribution" means, with respect to any
Limited Partner, the excess, if any, of such Limited Partner's Initial Capital
Contribution over the cumulative distributions to such Limited Partner pursuant
to Section 8.6(b)(ii).
"Unreturned Subsequent Capital Contributions" means, with respect to any
Limited Partner, the excess, if any, of such Limited Partner's Subsequent
Capital Contributions over the cumulative distributions to such Limited Partner
pursuant to Section 8.6(b)(iii) hereof.
Section 1.2 Headings. The headings and subheadings in this Agreement are
included for convenience and identification only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.
Section 1.3 Interpretation. Throughout this Agreement, nouns, pronouns and verbs
shall be construed as masculine, feminine, neuter, singular or plural, whichever
shall be applicable. All references herein to "Articles", "Sections" and clauses
shall refer to corresponding provisions of this Agreement, unless otherwise
specified.
ARTICLE II
CONTINUATION AND TERM
Section 2.1 Continuation.
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(a) At the time set forth in the Certificate of Conversion, the Partnership
shall continue as a limited partnership under and pursuant to the provisions of
the Delaware Act, the members of the LLC shall become the Limited Partners and
the Partners agree that the rights, duties and liabilities of the Partners shall
be as provided in the Delaware Act, except as otherwise provided herein.
(b) Mobile Satellite Ventures GP, Inc. is hereby admitted as the General Partner
of the Partnership and the Limited Partners are hereby admitted as Limited
Partners of the Partnership and the Limited Partners shall be issued the number
and class of Units, and the Percentage Interests represented thereby, listed
opposite such Person's name on such Schedule I.
(c) The name and mailing address of each Limited Partner, the number and class
of Units issued to such Limited Partner, the Percentage Interests represented
thereby, and the amount contributed to the capital of the Partnership by such
Limited Partner shall be listed on Schedule I attached hereto. The General
Partner shall update Schedule I from time to time as necessary to reflect
accurately the information therein, including updates to reflect new issuances
of Limited Partnership Interests or assignments and transfers of all or any part
of a Limited Partner's Limited Partnership Interest, in each case, in accordance
with this Agreement and the October Investment Agreement and indicating the name
and address of such new Limited Partner, transferee or assignee along with an
accurate description of the Limited Partnership Interest so issued transferred
or assigned, including whether such new Limited Partner, transferee or assignee
has been or will be admitted to the Partnership as a substituted Limited Partner
or an Additional Limited Partner, as the case may be, and provide copies of the
same to the Partners. Any amendment or revision to Schedule I made in accordance
with this Agreement and the October Investment Agreement shall not be deemed an
amendment to this Agreement. Any reference in this Agreement to Schedule I shall
be deemed to be a reference to Schedule I as amended and in effect from time to
time. Section 2.2 Name. The name of the limited partnership formed by this
Agreement and by the filing of the Certificate of Conversion and the Certificate
of Limited Partnership is "Mobile Satellite Ventures LP." The business of the
Partnership may be conducted upon compliance with all applicable laws under any
other name designated, from time to time, by the General Partner.
Section 2.3 Term. The term of the Partnership commenced on the date of the
filing of the certificate of formation of the LLC in the office of the Secretary
of State of the State of Delaware and shall continue until dissolved in
accordance with this Agreement, or if sooner, in accordance with the Delaware
Act.
Section 2.4 Registered Agent and Office. The Partnership's registered agent and
office in Delaware shall be CT Corporation System, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
At any time, the General Partner may designate another registered agent and/or
registered office, provided such new designation shall not adversely affect any
Partner.
Section 2.5 Principal Place of Business. The principal place of business of the
Partnership shall be at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. At
any time, the General Partner may change the location of the Partnership's
principal place of business.
Section 2.6 Qualification in Other Jurisdictions. The General Partner shall
cause the Partnership to be qualified, formed or registered under assumed or
fictitious name statutes or similar laws in any jurisdiction in which the
Partnership transacts business in which such qualification, formation or
registration is required or desirable.
Section 2.7 Agreement. This Agreement completely amends, restates and supersedes
the LLC Agreement.
ARTICLE III
PURPOSE AND POWERS OF THE PARTNERSHIP
Section 3.1 Purpose. The Partnership is formed for the object and purpose of,
and the nature of the business to be conducted and promoted by the Partnership
is, engaging in any lawful act or activity in which limited partnerships may be
engaged under the Delaware Act and engaging in any and all activities necessary,
convenient, desirable or incidental to the foregoing.
Section 3.2 Powers of the Partnership. The Partnership shall have the power and
authority to take any and all actions necessary, appropriate, proper, advisable,
convenient or incidental to or for the furtherance of the purposes set forth in
Section 3.1.
Section 3.3 Limitations on Partnership Powers. Notwithstanding the foregoing
provisions of Section 3.2, the Partnership shall not do business in any
jurisdiction that would jeopardize the limitation on liability afforded to the
Limited Partners under the Delaware Act or this Agreement in such jurisdiction
or elsewhere.
ARTICLE IV
CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS
Section 4.1 Capital Contributions.
(a) The General Partner shall not be required to make any Capital Contribution
to the capital of the Partnership, shall have no Capital Account and shall not
acquire a Percentage Interest or any Units, but shall nonetheless be obligated
to serve as the general partner of the Partnership pursuant to Section 17-401(a)
of the Delaware Act.
(b) The Initial Capital Contributions, and the Subsequent Capital Contributions
made by the Limited Partners as of the date of this Agreement are each set forth
on Schedule I hereto. At the Second Closing, the Investors shall make the
respective Capital Contributions and receive the additional number of Class A
Preferred Units described in Section 2.1 of the October Investment Agreement.
Capital Contributions shall be paid in the manner provided in the October
Investment Agreement or subscription agreement, as the case may be. Subject to
Section 8.1 of the Stockholders' Agreement, the Partnership may admit Persons as
Limited Partners and issue Units and Limited Partnership Interests to such
Persons without obligating such Persons to make Capital Contributions.
(c) Following the funding of the Subsequent Capital Contributions being made as
of the date of this Agreement described in clause (b) above, no Limited Partner
shall be required or permitted to contribute additional capital to the
Partnership except (i) as contemplated by the October Investment Agreement, and
(ii) subject to the pre-emptive rights and other applicable provisions of
Section 8 of the Stockholders' Agreement hereof, a Limited Partner shall be
permitted to make additional Capital Contributions pursuant to a subscription
agreement approved by the General Partner and the Required Majority.
Section 4.2 Status of Capital Contributions.
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(a) Except as otherwise provided in this Agreement, no Limited Partner shall
demand or receive a return of its Capital Contribution and no return of a
Limited Partner's Capital Contribution shall be made hereunder if such
distribution would violate applicable state law. Under circumstances requiring a
return of any Capital Contribution, no Limited Partner shall have the right to
demand or receive property other than cash, except as may be specifically
provided in this Agreement.
(b) No Limited Partner shall receive any interest, salary or drawing with
respect to its Capital Contribution or its Capital Account or for services
rendered on behalf of the Partnership or otherwise in its capacity as a Limited
Partner, except as otherwise specifically provided in this Agreement. Nothing
herein shall preclude any Limited Partner from serving the Partnership in
another capacity, including as an employee, contractor or consultant, or
otherwise dealing with the Partnership in its individual capacity and receiving
compensation or consideration therefor.
(c) Except as otherwise provided herein or by applicable state law, the Partners
shall be liable only to make Capital Contributions as provided in Section 4.1,
and no Partner shall be required to lend any funds to the Partnership nor to
make any additional Capital Contributions. No Partner shall have any personal
liability for the repayment of any Capital Contribution of any other Limited
Partner.
Section 4.3 Limited Partnership Interest. A Limited Partnership Interest shall
for all purposes be personal property. A Limited Partner has no interest in
specific Partnership property.
Section 4.4 Capital Accounts.
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(a) An individual Capital Account shall be established and maintained for each
Limited Partner.
(b) The Capital Account of each Limited Partner shall be maintained in
accordance with the following provisions:
(i) to such Limited Partner's Capital Account there shall be credited such
Limited Partner's Capital Contribution, such Limited Partner's distributive
share of Profits and items of gross income and gain and the amount of any
Partnership liabilities that are assumed by such Limited Partner or that
are secured by any Partnership assets distributed to such Limited Partner;
(ii) to such Limited Partner's Capital Account there shall be debited the
amount of cash and the Gross Asset Value of any Partnership assets
distributed to such Limited Partner pursuant to any provision of this
Agreement, such Limited Partner's distributive share of Losses and items of
gross deduction and loss and the amount of any liabilities of such Limited
Partner that are assumed by the Partnership or that are secured by any
property contributed by such Limited Partner to the Partnership; and
(iii) in determining the amount of any liability for purposes of this
Subsection 4.4(b), there shall be taken into account ss. 752(c) of the Code
and any other applicable provisions of the Code and the Treasury
Regulations.
ARTICLE V
PARTNERS
Section 5.1 Powers of Limited Partners. Except as otherwise specifically
provided by this Agreement or required by the Delaware Act, or Sections 2.4 and
7 of the October Investment Agreement, no Person other than the General Partner,
including any Limited Partner acting in its capacity as such, (a) shall have any
right to "participate in the control of the business" of the Partnership as such
phrase is construed under Section 17-303(b) of the Delaware Act, (b) shall have
the power to be an agent of the Partnership or (c) shall take any action or
exercise any right with respect to the Partnership not permitted to be taken or
exercised by a Limited Partner pursuant to this Agreement and Section 17-303 of
the Delaware Act. In no event shall any Person, other than the General Partner,
have any right, power or authority (1) to transact any business in the name of
the Partnership, (2) to act for, or on behalf of, the Partnership or (3) to bind
the Partnership, such powers being vested solely and exclusively in the General
Partner.
Section 5.2 No General Partner Liability. The General Partner shall have no
personal liability for the repayment of the Capital Contributions of the Limited
Partners.
Section 5.3 Actions of the Limited Partners. Any action of the Partnership
requiring the consent or approval of the Limited Partners, or any percentage
thereof, shall be taken by a consent in writing signed by Limited Partners
holding not less than the Percentage Interests necessary to take such action
pursuant to this Agreement.
Section 5.4 Partition. Each Limited Partner waives any and all rights that it
may have to maintain an action for partition of the Partnership's property.
Section 5.5 Withdrawal. A Limited Partner may not withdraw from the Partnership
prior to the dissolution and winding up of the Partnership except as set forth
in this Agreement or the October Investment Agreement. A Limited Partner
attempting to resign in violation of this Agreement shall not be entitled to
receive any distribution and shall not otherwise be entitled to receive the fair
value of its Limited Partnership Interest except as otherwise expressly provided
for in this Agreement. The withdrawal of any Limited Partner for any reason
shall not result in the dissolution of the Partnership.
Section 5.6 Removal of the General Partner by Limited Partners. A Required
Majority of the Limited Partners may at any time effect the removal of the
General Partner with or without cause by delivering to the General Partner a
notice of removal, such removal to become effective as provided in such notice
of removal.
Section 5.7 Bankruptcy, Resignation, Withdrawal, Etc. of General Partner. After
the resignation, withdrawal, dissolution, Bankruptcy or insolvency of the
General Partner which would otherwise result in the dissolution of the
Partnership by operation of law, the Partnership will be dissolved, unless,
within ninety (90) days after the date of such resignation, withdrawal,
dissolution, Bankruptcy, or insolvency, the Required Majority agree in writing
to continue the business of the Partnership and to the appointment, effective as
of the date of withdrawal or removal, of one or more successor General Partners.
ARTICLE VI
MANAGEMENT
Section 6.1 Management by the General Partner. Except as otherwise expressly
provided herein and subject to the restrictions contained in Sections 5.1, 5.6.
5.7, 6.2 and 6.6 hereof, management of the Partnership and control of its
business shall be vested solely in the General Partner. Except for situations in
which the approval of the Limited Partners is required by this Agreement, the
October Investment Agreement or by non-waivable provisions of applicable law,
the General Partner shall have the exclusive right, power and discretion to
manage, operate and control the Partnership, to do all things necessary or
appropriate to carry on its business and purposes, including but not limited to,
the right to incur and satisfy obligations relating to the formation and
operation of the Partnership, and to exercise all rights and powers conferred
upon the General Partner by the Delaware Act, in each case subject to the terms
and conditions set forth in this Agreement.
The General Partner shall have the power to delegate authority to the officers
and such other employees, agents and representatives of the Partnership as it
may from time to time deem appropriate and in accordance with this Agreement.
Any delegation of authority by the General Partner to take any action must be
approved by the General Partner in the same manner as would be required for the
General Partner to take such action directly.
Unless authorized to do so by this Agreement or by the General Partner, no
attorney-in-fact, employee, Limited Partner or other agent of the Partnership
shall have any power or authority to bind the Partnership in any way, to pledge
its credit or to render it liable monetarily for any purpose.
Section 6.2 Restrictions.
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(a) Notwithstanding the grant of authority to the General Partner under Section
6.1 hereof, without the prior written consent of the Required Majority of the
disinterested Limited Partners, the General Partner shall not permit or cause
the Partnership to enter into transactions with its Limited Partners or
Affiliates of its Limited Partners except as otherwise permitted in the October
Investment Agreement, this Agreement or the Ancillary Agreements; provided that
the Partnership shall be permitted to enter into each of the other Ancillary
Agreements, the execution, delivery and performance of which by the General
Partner on behalf of the Partnership is hereby approved and consented to by each
of the Limited Partners.
(b) Any vacancy in the position of General Partner shall be filled by the
affirmative written consent of the Required Majority.
Section 6.3 General Partner's Time. The General Partner shall devote all of its
time to the affairs of the Partnership.
Section 6.4 No Liability; Indemnity. Neither the General Partner nor any of its
officers, directors, employees or agents shall be liable, responsible or
accountable to the Partnership or any Partner for any act or omission performed
or omitted pursuant to the authority granted to it hereunder or by law, or for
any claim, loss, cost, damage, liability, demand or expense (including, without
limitation, attorneys' fees), resulting from the performance of their duties
hereunder in accordance with the requirements of this Agreement; provided,
however, that any such Person shall be liable, accountable and responsible for
their willful misconduct. The Partnership shall indemnify the General Partner,
its officers, directors, employees and agents and hold them harmless from any
claim, loss, cost, damage, liability, demand or expense (including, without
limitation, attorneys' fees and disbursements), incurred or sustained by them by
reason of any act performed by them, or any omission by them for or on behalf of
the Partnership and in furtherance of its interest, consistent with the
requirements of this Agreement, but this indemnity shall not require the
Partners to make any Capital Contribution therefor; provided, however, such
indemnity shall not extend to the willful misconduct of any such Person.
Section 6.5 Reliance by Third Parties.(a) Third parties dealing with the
Partnership may rely conclusively upon the power and authority of the General
Partner to act as set forth herein and shall not be required to inquire into or
ascertain the authority of the General Partner so to act.
Section 6.6 General Authority.(a) The General Partner shall, except as otherwise
provided in this Agreement, have all the rights and powers and shall be subject
to all the restrictions and liabilities of a general partner in a limited
partnership under the Delaware Act.
Section 6.7 Limited Liability.(a) Performance of one or more of the acts
described in Article V and this Article VI with respect to the Partners shall
not in any way impose any personal liability on any Limited Partner. No Partner
or, in the appropriate case, former Partner shall be liable for any debts or
obligations of the Partnership in excess of its Capital Contributions (subject
to the obligation of a Limited Partner of the Partnership under the Delaware Act
to repay any funds wrongfully distributed to it). All undistributed cash, which
would otherwise be distributed to the Limited Partners, shall be available to
creditors to satisfy the debts and obligations of the Partnership prior to the
time of actual distribution.
Section 6.8 Special Purpose Provision. The General Partner, and any additional
or substitute General Partner of the Partnership, may not be an individual and
shall at all times have as its sole purpose to act as the General Partner of the
Partnership, and shall be engaged in no other business or have any other
purpose. Any General Partner of the Partnership (a) shall have organizational
documents which conform in all material respects to the organizational documents
of the initial General Partner, and (b) shall be owned by the Limited Partners
and the Note Investors pro rata in accordance with their Percentage Interests
(on an as-converted basis) from time to time.
Section 6.9 Grant of Power of Attorney.
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Each Limited Partner, by its execution hereof, hereby irrevocably makes,
constitutes and appoints the General Partner as its true and lawful
attorney-in-fact, with power and authority in its name, place and stead, to
make, execute, sign, acknowledge and file on behalf of such Limited Partner and
on behalf of the Partnership:
(a) Such amendments to the Certificate of Limited Partnership as the General
Partner shall reasonably deem necessary or desirable consistent with this
Agreement;
(b) All papers which may be deemed necessary or desirable by the General Partner
to effect the termination of the Partnership after its dissolution as provided
in this Agreement;
(c) All such other instruments, documents and certificates which may from time
to time be required or permitted by the laws of any state, the United States of
America, or any political subdivision or agency thereof, to effectuate,
implement, continue and defend the valid and subsisting existence, rights and
property of the Partnership as a limited partnership and its power to carry out
its purposes as set forth in this Agreement; provided, however, that any
decisions other than administrative ones shall first have been approved by the
applicable approvals as provided herein.
Section 6.10 Terms of Grant.
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The foregoing appointment in Section 6.9:
(a) Is irrevocable and shall be deemed to be a special power coupled with an
interest in recognition of the fact that the General Partner will be relying
upon such power of attorney to act as contemplated by this Agreement in such
execution, acknowledgment and filing and such other actions by the General
Partner on behalf of the Limited Partners and the Partnership;
(b) Shall survive the dissolution or Bankruptcy of any Limited Partner granting
the same and the transfer, by operation of law or otherwise, by any Limited
Partner of the whole or any part of its interest in and to the Partnership, its
capital, Profits or Losses hereunder; and
(c) May be exercised by the General Partner on behalf of any Limited Partner by
a facsimile signature of the General Partner, as attorney-in-fact for such
Limited Partner.
Section 6.11 Separate Form.
The foregoing appointment is self operative but, in confirmation thereof, each
Limited Partner hereby agrees to execute, acknowledge and deliver to the General
Partner, promptly upon request therefor by the General Partner, a power of
attorney in recordable form satisfactory to the General Partner evidencing the
foregoing appointment.
ARTICLE VII
ALLOCATIONS
Section 7.1 Profits and Losses.
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(a) Except as otherwise set forth in Section 7.2 hereof, Profits, Losses and
items of income, gain, deduction and loss of the Partnership for each Fiscal
Year shall be allocated among all Persons who were Limited Partners during such
Fiscal Year in a manner that will, as nearly as possible, cause the Adjusted
Capital Account balance of each Limited Partner (as computed for purposes of
section 704(b) of the Code) at the end of such Fiscal Year to be equal to the
sum of the amounts of cash or the Gross Asset Value of other property
distributable to such Limited Partner pursuant to Article VIII hereof at such
time assuming that all the remaining assets of the Partnership were sold for
their Gross Asset Values, all debts of the Partnership were paid according to
their terms (with any nonrecourse debt for U.S. Federal income tax purposes
deemed paid in amounts not in excess of the Gross Asset Value of the property
securing such nonrecourse debt) and the cash or other property received
therefrom was distributed to the Limited Partners in accordance with the
priorities set forth in Article VIII hereof.
(b) Notwithstanding Section 7.1(a), Losses allocated pursuant to Section 7.1(a)
to any Limited Partner for any Fiscal Year shall not exceed the maximum amount
of Losses that may be allocated to such Limited Partner without causing such
Limited Partner to have an Adjusted Capital Account Deficit at the end of such
Fiscal Year. Any Losses in excess of the limitation in this Section 7.1(b) shall
be specially allocated solely to the other Limited Partners in accordance with
the priorities in Article VIII hereof to the maximum extent permitted by this
Section 7.1(b). In addition, notwithstanding Section 7.1(b), Profits shall be
allocated to reverse any Losses specially allocated pursuant to the preceding
sentence in inverse order to those special loss allocations and then to reverse
any Losses allocated under Section 7.1(a) in inverse order to those loss
allocations.
(c) An allocation of Profits or Losses to a Limited Partner shall be treated as
an allocation to such Limited Partner of the same share of each item of income,
gain, loss and deduction that is taken into account in computing such Profits or
Losses, as the case may be.
Section 7.2 Special Allocations. The following special allocations shall be made
in the following order:
(a) Minimum Gain Chargeback. If there is a net decrease in Minimum Gain
(determined as provided in Treasury Regulations ▇▇.▇▇. 1.704-2(d) and
1.704-2(g)) during any Fiscal Year, certain items of income and gain, including
gross income or gain, shall be allocated to the Limited Partners in the amounts
and manner described in Treasury Regulations ss. 1.704-2(f). This Section 7.2(a)
is intended to comply with the minimum gain chargeback requirement relating to
partnership non-recourse liabilities (as defined in Treasury Regulations ss.
1.704-2(f)) and shall be so interpreted.
(b) Partner Non-recourse Debt Minimum Gain Chargeback. If there is a net
decrease in Minimum Gain attributable to partner non-recourse debt (determined
pursuant to Treasury Regulations ss. 1.704-2(i)) during any Fiscal Year, certain
items of income and gain, including gross income or gain, shall be allocated as
quickly as possible to those Limited Partners which had a share of the Minimum
Gain attributable to the partner non-recourse debt (such share determined
pursuant to Treasury Regulations ss. 1.704-1(i)(5)) in the amounts and manner
described in Treasury Regulations ss. 1.704-2(i) and (j). This Section 7.2(b) is
intended to comply with the minimum gain chargeback requirement relating to
partner non-recourse debt set forth in Treasury Regulations ss. 1.704-2(i)(4))
and shall be so interpreted.
(c) Allocation of Non-recourse Deductions. Deductions attributable to
obligations with respect to which a Limited Partner bears the economic risk of
loss within the meaning of Treasury Regulation ss. 1.704-2(b)(4) shall be
allocated to the Limited Partner or Limited Partners that bear the economic risk
of loss for such debt in accordance with the requirements of Treasury Regulation
ss. 1.704-2(i)(1). "Nonrecourse Deductions" (as such term is defined in Treasury
Regulations ▇▇.▇▇. 1.704-2(b)(1) and 1.704-2(c)) of the Partnership shall be
allocated to the Limited Partners in proportion to their Percentage Interests.
(d) Qualified Income Offset. In the event any Limited Partner unexpectedly
receives any adjustments, allocations or distributions described in Treasury
Regulations ss. 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income
and gain (consisting of a pro rata portion of each item of Partnership income,
including gross income, and gain for such year) shall be specially allocated to
such Limited Partner in an amount and manner sufficient to eliminate, to the
extent required by the Treasury Regulations, the Adjusted Capital Account
Deficit of such Limited Partner as quickly as possible, provided that an
allocation pursuant to this Section 7.2(d) shall be made if and only to the
extent that such Limited Partner would have an Adjusted Capital Account Deficit
after all other allocations provided for in this Article VII have been
tentatively made as if this Section 7.2(d) were not in the Agreement.
(e) Gross Income Allocation. In the event any Limited Partner has a deficit
Capital Account at the end of any Fiscal Year that is in excess of the sum of
(i) the amount such Limited Partner is obligated to restore and (ii) the amount
such Limited Partner is deemed to be obligated to restore pursuant to the
penultimate sentences of Treasury Regulations ▇▇.▇▇. 1.704-2(g)(1) and
1.704-2(i)(5), such Limited Partner shall be specially allocated items of
Partnership income and gain (consisting of a pro rata portion of each item of
Partnership income, including gross income, and gain for such year) in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 7.2(e) shall be made if and only to the extent that
such Limited Partner would have a deficit Capital Account in excess of such sum
after all other allocations provided for in this Article VII have been
tentatively made as if Section 7.2(d) above and this Section 7.2(e) were not in
the Agreement.
(f) Regulatory Allocations. The allocations set forth in Section 7.2(a)-(e)
hereof (the "Regulatory Allocations") are intended to comply with certain
requirements of the Treasury Regulations. It is the intent of the Limited
Partners that, to the extent possible, all Regulatory Allocations shall be
offset either with other Regulatory Allocations or with special allocations of
other items of Partnership income, gain, loss or deduction pursuant to this
Section 7.2(f). Therefore, the General Partner shall make such offsetting
special allocations of Partnership income, gain, loss and deduction in whatever
manner it determines appropriate, so that, after such offsetting allocations are
made, each Limited Partner's Capital Account balance is, to the extent possible,
equal to the Capital Account balance such Limited Partner would have if the
Regulatory Allocations were not part of the Agreement and all Partnership items
were allocated pursuant to Section 7.1. In exercising its discretion, the
General Partner shall take into account how future Regulatory Allocations
pursuant to Sections 7.2(a) and (b) hereof that, although not yet made, are
likely to offset other Regulatory Allocations previously made under Section
7.2(c) hereof.
(g) Section 754 Adjustment. To the extent an adjustment to the adjusted tax
basis of any Partnership asset pursuant to ss. 734(b) or 743(b) of the Code is
required, pursuant to Treasury Regulations ss. 1.704-1(b)(2)(iv)(m), to be taken
into account in determining Capital Accounts, the amount of such adjustment to
the Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis), and such gain or loss shall be specially allocated to the Limited
Partners in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted pursuant to such regulation.
Section 7.3 Allocation Rules.
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(a) For purposes of determining the Profits, Losses or any other items allocable
to any period, Profits, Losses and any such other items shall be determined on a
daily, monthly or other basis, as determined by the General Partner using any
method that is permissible under ss. 706 of the Code and the Treasury
Regulations thereunder.
(b) Except as otherwise provided in this Agreement, all items of Partnership
income, gain, loss, deduction and any other allocations not otherwise provided
for shall be divided among the Limited Partners in the same proportions as they
share Profits and Losses for the Fiscal Year in question.
(c) The Limited Partners are aware of the income tax consequences of the
allocations made by this Article VII and hereby agree to be bound by the
provisions of this Article VII in reporting their shares of Partnership income
and loss for income tax purposes.
Section 7.4 Section 704(c) of the Code.
--------------------------
(a) In accordance with ss. 704(c) of the Code and the Treasury Regulations
thereunder, income, gain, loss and deduction with respect to any property
contributed to the capital of the Partnership shall, solely for income tax
purposes, be allocated among the Limited Partners so as to take account of any
variation between the adjusted basis of such property to the Partnership for
federal income tax purposes and its initial Gross Asset Value.
(b) In the event the Gross Asset Value of any Partnership asset is adjusted
pursuant to the definition of "Gross Asset Value" contained in Section 1.1
hereof, subsequent allocations of income, gain, loss and deduction with respect
to such asset shall take account of any variation between the adjusted basis of
such asset for federal income tax purposes and its Gross Asset Value in the same
manner as under ss. 704(c) of the Code and the Treasury Regulations thereunder.
(c) Allocations pursuant to this Section 7.4 shall be calculated by the General
Partner using the remedial method under Code Section 704(c) and the Treasury
Regulations promulgated thereunder and are solely for purposes of federal,
state, and local taxes and shall not affect, or in any way be taken into account
in computing, any Limited Partner's Capital Account or share of Profits, Losses,
other items, or distributions pursuant to any other provision of this Agreement.
Section 7.5 Uncertainties in Allocations and Distributions. In the event there
is an ambiguity regarding the application of this Section 7 or Section 8 to a
particular transaction, the income and expense from such transaction shall be
allocated among the Limited Partners, and distributions of cash in respect of
such transaction shall be made, in such proportions that the General Partner, in
its reasonable discretion, deems equitable, practicable and consistent with this
Agreement, the regulations under the Code and other applicable law; provided,
however, that no such allocation or distribution by the General Partner shall
discriminate against any Limited Partner.
ARTICLE VIII
DISTRIBUTIONS
Section 8.1 Distributions(a) . Except as otherwise provided in Section 8.2,
Section 8.6 and Section 13.3 below, the Partnership shall make distributions of
cash to the Limited Partners in proportion to their respective Percentage
Interests at such time or times and in such amounts as the General Partner may
determine in its sole discretion.
Section 8.2 Distributions to Pay Taxes. Prior to March 15 of the next following
Fiscal Year, the General Partner shall distribute to the Limited Partners an
amount sufficient for the Limited Partners out of cash available therefor to pay
their tax liabilities which arise in respect of their shares of cumulative net
taxable income and gain of the Partnership for such Fiscal Year, determined as
set forth below by the General Partner, prior to the making of any distributions
pursuant to Sections 8.1 and 8.6 hereof. Any funds distributed pursuant to this
Section 8.2 shall reduce the amount that a Limited Partner would otherwise
receive pursuant to Sections 8.1 and 8.6. For purposes of this Section 8.2, the
amount of tax distributions made to a Limited Partner for any Fiscal Year shall
be equal to the excess, if any, of (i) the product of (A) the excess, if any, of
(I) its cumulative share of net taxable income or gain for the current Fiscal
Year and all prior Fiscal Years over (II) its cumulative share of net taxable
loss and deduction for all prior Fiscal Years and (B) the sum of the highest
rate of Canadian or United States federal, state, provincial and local tax
imposed on any Limited Partner calculated, with respect to a Limited Partner
that is a pass-through entity (for Canadian or United States tax purposes),
based on the type of taxpayer which the beneficial owners of interests in such
pass-through entity are for such year with respect to items of the same
character as such net income and gain, taking into account the deductibility or
creditability of federal, state, provincial and local taxes for Canadian or
United States federal income tax purposes and based on such reasonable
assumptions as the General Partner determines in good faith to be appropriate
(such assumptions not to include the effect of any net operating losses or any
other similar tax benefits available to a Limited Partner), over (ii) the amount
of any distributions made to such Limited Partner pursuant to this Section 8.2
in a prior Fiscal Year.
Section 8.3 Dissolution. Upon the dissolution and winding up of the Partnership,
the assets of the Partnership shall be distributed to the Limited Partners as
provided in Section 13.3 below.
Section 8.4 Withholding Taxes. All amounts withheld pursuant to the Code or any
provision of any state, local or foreign tax law with respect to any payment,
distribution or allocation to the Limited Partners shall be treated as amounts
distributed to the Limited Partners pursuant to this Article VIII for all
purposes of this Agreement. The Partnership is authorized to withhold from
distributions and to pay over to any federal, state, local or foreign government
any amounts required to be so withheld pursuant to the Code or any provision of
any other federal, state, local or foreign law and shall allocate such amounts
to those Limited Partners with respect to which such amounts were withheld. Each
Limited Partner shall indemnify the Partnership and each of the Partners against
any losses (including, without limitation, any tax penalties and interest)
incurred by reason of any failure by the Partnership to make adequate deduction
or withholding from any distribution made to such Partner.
Section 8.5 Limitations on Distribution. Notwithstanding any provision to the
contrary contained in this Agreement, the Partnership shall not make a
distribution to the Limited Partners if such distribution in the aggregate would
violate Section 17-607 of the Delaware Act or other applicable law.
Section 8.6 Capital Proceeds. Following the receipt by the Partnership of
Capital Proceeds, a portion of such Capital Proceeds sufficient for each Limited
Partner to pay its tax liabilities which arise in respect of the Capital Event
giving rise to such Capital Proceeds, determined as set forth in Section 8.2
above, shall be distributed to the Limited Partners pursuant to Section 8.2
above. If the General Partner, in its sole discretion, determines that the
Partnership shall distribute any remaining Capital Proceeds, such Capital
Proceeds shall be distributed among the Limited Partners as follows:
(a) First, to pay the creditors of the Partnership, including all outstanding
amounts then due under the Notes and the Convertible Notes in accordance with
the terms thereof; Second, to the Limited Partners in a manner to cause the
cumulative prior and current Capital Proceeds distributed to each of the Limited
Partners to be in the same relative proportions as the Limited Partners'
respective Percentage Interests; provided, however, that Capital Proceeds shall
be distributed in accordance with this Section 8.6(a) only if it results in the
receipt by the Class A Limited Partners of cumulative distributions of Capital
Proceeds in an amount at least equal to twice the sum of the Class A Limited
Partners' aggregate Capital Contributions;
(b) Upon a Qualifying Capital Event, the Capital Proceeds resulting therefrom
shall be distributed as follows:
(i) First, to pay the creditors of the Partnership, including all
outstanding amounts then due under the Notes and the Convertible Notes in
accordance with the terms thereof;
(ii) Second, to the Class A Limited Partners in proportion to and to the
extent of each such Class A Limited Partners' Unreturned Initial Capital
Contributions; and
(iii) Third, to the Limited Partners in proportion to and to the extent of
their Unreturned Subsequent Capital Contributions.
(c) In the event of a Non-Qualifying Capital Event to which clause (a) above
does not apply, the Capital Proceeds resulting therefrom shall be distributed as
follows:
(i) First to pay the creditors of the Partnership, including all
outstanding amounts then due under the Notes and the Convertible Notes in
accordance with the terms thereof;
(ii) Second, to the Class A Limited Partners in proportion to their
respective Percentage Interests in an aggregate amount equal to the
cumulative amount (including interest) paid to the holders of the Notes;
and
(iii) Thereafter, to the Limited Partners in proportion to their Percentage
Interests.
ARTICLE IX
TRANSFERS; PARTNERSHIP REGISTRATION RIGHTS
Section 9.1 Incorporation of Section 8 of the Stockholders' Agreement. The
provisions of Section 8 of the Stockholders' Agreement are hereby incorporated
by reference in their entirety in this Agreement.
Section 9.2 Partnership Registration Rights. Upon an Initial Public Offering,
the Partnership shall grant to each of the Limited Partners customary
registration rights in the securities of the Partnership commensurate with such
Limited Partner's Percentage Interest, provided, that such rights shall not be
exercisable in connection with the Initial Public Offering itself and further
provided that such registration rights shall be subject to the provisions of any
underwriting agreement entered into by the Partnership with respect to such
Initial Public Offering.
ARTICLE X
BOOKS AND RECORDS
Section 10.1 Books, Records and Financial Statements.
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(a) At all times during the continuance of the Partnership, the General Partner
shall maintain separate books of account for the Partnership that shall show a
true and accurate record of all costs and expenses incurred, all charges made,
all credits made and received and all income derived in connection with the
operation of the Partnership business, in accordance with generally accepted
accounting principles consistently applied to the extent not inconsistent with
this Agreement. Such books of account, together with a copy of this Agreement
and of the Certificate of Limited Partnership, shall at all times be maintained
at the principal place of business of the Partnership (or at the place of
business of the Person to whom the duty to maintain these books has been
delegated in accordance herewith and identified in writing to the Limited
Partners) and shall be open to inspection and examination at reasonable times by
each Limited Partner and its duly authorized representative for any purpose
reasonably related to such Limited Partner's interest as a Limited Partner of
the Partnership.
(b) The General Partner shall prepare and maintain, or cause to be prepared and
maintained, the books of account of the Partnership. The following financial
information, which shall be certified to by an independent certified public
accountant, shall be transmitted by the General Partner to each Limited Partner
within four (4) months after the close of each Fiscal Year:
(i) balance sheet of the Partnership as of the beginning and close of such
Fiscal Year;
(ii) statement of Partnership profits and losses for such Fiscal Year;
(iii) statement of such Limited Partner's Capital Account as of the close
of such Fiscal Year, and changes therein during such Fiscal Year; and
(iv) statement indicating such Limited Partner's share of each item of
Partnership income, gain, loss, deduction or credit for such Fiscal Year
for income tax purposes.
(c) Within three (3) months after the close of each Fiscal Year, the General
Partner shall send to each Limited Partner a Form K-1 tax statement or any
successor form thereto.
(d) The General Partner shall prepare, or cause to be prepared, such other
statements as it deems necessary or advisable.
Section 10.2 Accounting Method. For both financial and tax reporting purposes
and for purposes of determining profits and losses, the books and records of the
Partnership shall be kept on the accrual method of accounting applied in a
consistent manner and shall reflect all Partnership transactions and be
appropriate for the Partnership's business.
Section 10.3 Audit. The financial statements of the Partnership shall be audited
at the end of each Fiscal Year by an independent certified public accountant
selected by the General Partner, with such audit to be accompanied by a report
of such accountant containing its opinion. The cost of such audits will be an
expense of the Partnership. A copy of any such audited financial statements and
accountant's report will be made available for inspection by the Limited
Partners.
ARTICLE XI
TAX MATTERS
Section 11.1 Tax Matters Partner. A Required Majority of the Limited Partners
shall designate a Limited Partner, with such Limited Partner's prior consent, as
the "Tax Matters Partner" of the Partnership for purposes of ss. 6231(a)(7) of
the Code. The Tax Matters Partner and shall have the power to manage and
control, on behalf of the Partnership, any tax audit or administrative
proceeding at the Partnership level with the Internal Revenue Service relating
to the determination of any item of Partnership income, gain, loss, deduction or
credit for federal income tax purposes; provided, however, that the Tax Matters
Partner shall not settle any tax audit or administrative proceeding without the
consent of a majority in interest of the affected Limited Partners. The Tax
Matters Partner shall be fully indemnified by the Partnership for all expenses
incurred by the Tax Matters Partner with respect to any such tax audit or
administrative proceeding. The Tax Matters Partner may be replaced by the
holders of a Required Majority of the Limited Partnership Interests.
Section 11.2 Election. Upon the reasonable request of any Limited Partner, the
Tax Matters Partner shall make or take all reasonable efforts to revoke an
election on behalf of the Partnership, in accordance with ss. 754 of the Code,
so as to adjust the basis of Partnership property in the case of a distribution
of property within the meaning of ss. 734 of the Code, and in the case of a
transfer of a Partnership interest within the meaning of ss. 743 of the Code.
Each Limited Partner shall, upon request of the Tax Matters Partner, supply the
information necessary to give effect to such an election.
Section 11.3 Taxation as Partnership. The Partners intend that the Partnership
will be treated as a partnership for U.S. federal income tax purposes and, to
the extent permitted under applicable law, all other income tax purposes and the
Partner will take such action, as is reasonably requested by the General
Partner, to make all elections and perform all acts as are necessary to have the
Partnership treated as such.
ARTICLE XII
LIABILITY, EXCULPATION AND INDEMNIFICATION
Section 12.1 Liability.
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(a) Except as otherwise provided by the Delaware Act, the debts, obligations and
liabilities of the Partnership, whether arising in contract, tort or otherwise,
shall be solely the debts, obligations and liabilities of the Partnership, and
no Covered Person shall be obligated personally for any such debt, obligation or
liability of the Partnership solely by reason of being a Covered Person.
(b) Except as otherwise expressly required by law, a Limited Partner, in its
capacity as Limited Partner, shall have no liability in excess of (a) the amount
of its Capital Contributions and its obligations hereunder to make Capital
Contributions, (b) its share of any assets and undistributed profits of the
Partnership, (c) its obligation to make other payments expressly provided for in
this Agreement, and (d) the amount of any distributions wrongfully distributed
to it as determined under the Delaware Act.
Section 12.2 Exculpation.
-----------
(a) No Covered Person shall be liable to the Partnership or any other Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed, or omitted to be performed, by such Covered Person in good faith on
behalf of the Partnership and in a manner reasonably believed to be within the
scope of authority conferred on such Covered Person by this Agreement, except
that a Covered Person shall be liable for any such loss, damage or claim
incurred by reason of such Covered Person's willful misconduct, fraud, gross
negligence or breach of this Agreement.
(b) A Covered Person shall be fully protected in relying in good faith upon the
records of the Partnership and upon such information, opinions, reports or
statements presented to the Partnership by any Person as to matters the Covered
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Partnership, including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which distributions to
Limited Partners might properly be paid.
Section 12.3 Indemnification.
---------------
(a) To the fullest extent permitted by applicable law, each Covered Person shall
be entitled to indemnification from the Partnership for any loss, damage, claim
or liability incurred by such Covered Person by reason of any act or omission
performed, or omitted to be performed, by such Covered Person in good faith on
behalf of the Partnership and within the scope of authority conferred on such
Covered Person by this Agreement, except that no Covered Person shall be
entitled to be indemnified in respect of any loss, damage, claim or liability
incurred by such Covered Person by reason of willful misconduct, fraud, gross
negligence or breach of this Agreement with respect to such acts or omissions;
provided, however, that any indemnity under this Section 12.3 shall be provided
out of and to the extent of Partnership assets only, and no Covered Person shall
have any personal liability on account thereof.
(b) If any claim shall be asserted against a Covered Person, in respect of which
such Covered Person proposes to demand indemnification under this Section 12.3
from the Partnership, such Covered Person shall notify the General Partner to
that effect with reasonable promptness after such assertion, and the General
Partner on behalf of the Partnership shall have the right to assume the entire
control of the defense or settlement of any such claim, through its own
attorneys and at its expense, and in connection therewith, such Covered Person
shall cooperate fully to make available to the Partnership and the General
Partner all information under its control relating thereto.
(c) All rights to indemnification provided herein shall survive the termination
of this Agreement and the withdrawal, removal or insolvency of any Partner;
provided, that a claim for indemnification hereunder is made by or on behalf of
the Covered Person seeking such indemnification prior to the time distribution
in liquidation of the assets of the Partnership is made pursuant to Article
XIII.
(d) The Partnership may enter into indemnity contracts with Covered Persons and
adopt written procedures pursuant to which arrangements are made for the
advancement of expenses and the funding of obligations under Section 12.4 and
containing such other procedures regarding indemnification as are appropriate.
Section 12.4 Expenses. To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by a Covered Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the Partner of an undertaking by or on behalf
of the Covered Person to repay such amount if it shall be determined that the
Covered Person is not entitled to be indemnified as authorized in Section 12.3
hereof.
Section 12.5 Insurance. The Partnership may purchase and maintain insurance, to
the extent and in such amounts as the General Partner shall deem advisable, on
behalf of Covered Persons and such other Persons as the General Partner shall
determine, against any liability that may be asserted against or expenses that
may be incurred by any such Person in connection with the activities of the
Partnership or such indemnities, regardless of whether the Partnership would
have the power to indemnify such Person against such liability under the
provisions of this Agreement.
Section 12.6 Outside Businesses. The parties acknowledge that Covered Persons
have and may in the future have investments in other businesses that may be
similar to or competitive with the Partnership (collectively, "Competing
Businesses") independent of their investments in the Partnership. By virtue of
its rights under this Section, no Covered Person shall have any obligation to
the Partnership to refrain from making investments in Competing Businesses, or
otherwise engaging in any commercial activity; and neither the Partnership nor
any other Covered Person shall have any right hereunder with respect to any such
investments or activities undertaken by such Covered Person. Without limitation
of the foregoing, this Agreement shall not be deemed to restrict the rights of
each Covered Person to engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Partnership, and the Partnership and the other
Covered Persons shall have no rights or expectancy by virtue of such Covered
Person's relationships with the Partnership, this Agreement or otherwise in and
to such independent ventures or the income or profits derived therefrom; and the
pursuit of any such venture, even if such investment is in a Competing Business,
shall not be deemed wrongful or improper hereunder. No Covered Person shall be
obligated to present any particular investment opportunity to the Partnership
even if such opportunity is of a character that, if presented to the
Partnership, could be pursued by the Partnership, and Covered Persons shall
continue to have the right to take for their own respective account or to
recommend to others any such particular investment opportunity. The provisions
of this Section 12.6 shall in no way limit or eliminate (i) Covered Persons'
duties, responsibilities and obligations with respect to any proprietary
information of the Partnership, including any applicable duty not to disclose or
use such proprietary information improperly or obtain therefrom an improper
personal benefit, or (ii) Covered Persons' obligations under the October
Investment Agreement or any agreement, instrument or obligations (other than
this Agreement).
ARTICLE XIII
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 13.1 Dissolution. The Partnership shall be dissolved and its affairs
shall be wound up upon the first to occur of any of the following:
(a) consent of Limited Partners and Note Investors holding the Percentage
Interests equal to at least eighty percent (80%); or
(b) the occurrence of any of the events set forth in Sections 5.7 and the
failure of the Required Majority to agree to continue the Partnership as set
forth therein; or
(c) the entry of a decree of judicial dissolution under Section 17-802 of the
Delaware Act.
Section 13.2 Notice of Dissolution. Upon the dissolution of the Partnership, the
General Partner shall promptly notify the Limited Partners of such dissolution.
Section 13.3 Liquidation. Upon dissolution of the Partnership, the General
Partner or, if such dissolution has occurred in accordance with Section 13.1(b),
the Required Majority shall appoint a liquidating trustee who shall immediately
commence to wind up the Partnership's affairs; provided, however, that a
reasonable time shall be allowed for the orderly liquidation of the assets of
the Partnership and the satisfaction of liabilities to creditors so as to enable
the Limited Partners and Note Investors to minimize the normal losses attendant
upon a liquidation. The Limited Partners shall continue to share Profits and
Losses during liquidation in the same proportions, as specified in Article VII
hereof, as before liquidation. The proceeds of liquidation shall be distributed,
as realized, in accordance with the provisions of Article VIII hereof.
Section 13.4 Termination. The Partnership shall terminate when all of the assets
of the Partnership have been distributed in the manner provided for in this
Article XIII, and the Certificate of Limited Partnership shall have been
canceled in the manner required by the Delaware Act.
Section 13.5 Claims of the Limited Partners. The Limited Partners and former
Limited Partners shall look solely to the Partnership's assets for the return of
their Capital Contributions, and if the assets of the Partnership remaining
after payment of or due provision for all debts, liabilities and obligations of
the Partnership are insufficient to return such Capital Contributions, the
Limited Partners and former Limited Partners shall have no recourse against the
Partnership or any other Partner.
ARTICLE XIV
AMENDMENTS
Section 14.1 Amendments. Any amendments to this Agreement or any waivers or
consents hereunder, shall be adopted and be effective as an amendment hereto or
waiver or consent hereunder only if approved by the Required Majority and, if
such amendment, waiver or consent would adversely affect the particular rights
and interests of any Limited Partner or Note Investor disproportionately to the
adverse effects of such action on the rights and interests of other Limited
Partners, such action shall also require the consent of such Limited Partner or
Note Investor; provided, however, that no provision of this Agreement which
establishes a class vote and/or minimum Percentage Interest required to take any
action shall be amended in any respect which would reduce such voting
requirement, unless such amendment is approved by such Limited Partners and Note
Investors holding at least the Percentage Interest (determined on an
as-converted basis) that would have been required to take the action permitted
to be taken under the provision to be amended.
ARTICLE XV
MISCELLANEOUS
Section 15.1 Further Assurances. The Partners shall cooperate with each other
and the Partnership and shall promptly execute, acknowledge and deliver any
assurances, approvals or documents reasonably requested by a Limited Partner
that is necessary for the requesting Partner or the Partnership to satisfy its
obligations hereunder or obtain the benefits contemplated hereby.
Section 15.2 Notices. All notices provided for in this Agreement shall be in
writing, duly signed by the party giving such notice, and shall be delivered
personally, sent by a nationally recognized overnight courier, telecopied or
mailed by registered or certified mail, as follows:
(a) If given to the Partnership, at the Partnership's mailing address set forth
below:
Mobile Satellite Ventures LP
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to:
Mobile Satellite Ventures LP
c/o Telcom Ventures LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇, Esq.
(b) If given to the General Partner, at the General Partner's mailing address
set forth below:
Mobile Satellite Ventures GP, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to each Limited Partner as set forth in clause (c) below.
(c) If given to any Limited Partner, at the address set forth on Schedule I
hereof (or as modified from time to time by a Limited Partner upon written
notice to the General Partner).
(d) If given to any Note Investors, at the address set forth on Schedule II
hereof (or as modified from time to time by a Note Investor upon written notice
to the General Partner).
Notices delivered personally to an addressee or sent by overnight courier
shall be deemed to have been given upon such delivery. Notices sent by
telecopier shall be deemed to have been given upon confirmation by telecopy
answerback (provided that the sending of any such notice is followed promptly by
the mailing of the original of such notice). Notices mailed by registered or
certified mail shall be deemed to have been given upon the expiration of five
(5) days after such notice has been deposited in the mail.
Section 15.3 Failure to Pursue Remedies. The failure of any party to seek
redress for violation of, or to insist upon the strict performance of, any
provision of this Agreement shall not prevent a subsequent act, which would have
originally constituted a violation from having the effect of an original
violation. No waiver of any breach of any of the terms of this Agreement shall
be effective unless such waiver is in writing and signed by the Partner against
whom such waiver is claimed.
Section 15.4 Cumulative Remedies. The rights and remedies provided by this
Agreement are cumulative and the use of any one right or remedy by any party
shall not preclude or waive its right to use any or all other remedies. Said
rights and remedies are given in addition to any other rights the parties may
have by law, statute, ordinance or otherwise.
Section 15.5 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of all of the parties and, to the extent permitted by this
Agreement, their successors, legal representatives and assigns.
Section 15.6 Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
Section 15.7 Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all parties hereto had signed the same
document. All counterparts shall be construed together and shall constitute one
instrument.
Section 15.8 Integration. This Agreement constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof and thereof and
supersedes all prior agreements and understandings pertaining thereto.
Section 15.9 Confidentiality. Each Partner acknowledges that in the course of
the formation, and during the operation, of the Partnership it has or shall
receive confidential and proprietary information concerning the assets, business
plans, intellectual property rights and operations of the Partnership and the
other Partners and Affiliates of such Persons ("Confidential Information"). Each
Partner agrees that the Confidential Information is a valuable asset of the
Partnership or its owner, as the case may be and its public disclosure or use
outside of the Partnership's activities without the prior consent of the
Partnership and/or the relevant Partner would cause substantial harm to the
Partnership, such disclosing Partner or other Person. Therefore, each Partner
agrees to treat all Confidential Information received by it with the amount of
care that a reasonable business person would use to protect to its own valuable
and proprietary confidential information and shall not disclose any Confidential
Information to any Person who does not have a contractual obligation with the
Partnership to keep such Confidential Information confidential or does not have
the right to have such Confidential Information disclosed to it under an
agreement with the Partnership. In addition, each Partner shall not personally,
and shall not permit other Persons (including its Affiliates) to utilize
Confidential Information for any purpose other than for the benefit of the
Partnership.
Notwithstanding the foregoing, a Partner may disclose Confidential
Information to its Affiliates, professional advisors, lenders and investors if
such Persons have agreed for the benefit of the Partnership, to comply with the
provision of this Section 15.9.
As used herein, "Confidential Information" shall not include information
(i) that has become generally available to the public through no fault of the
receiving Person, (ii) to the minimum extent necessary in order to comply with
any law, order, regulation, ruling or other governmental request pursuant to
subpoena or government order, provided that in the event a receiving Person is
subject to such a subpoena or order, it shall notify in writing the General
Partner of such event, and shall cooperate with any reasonable request or
efforts by the General Partner to take reasonable legally permissible actions to
limit the scope of disclosure required in order for such Person to comply with
such subpoena or order and (iii) as may be required or appropriate in response
to any report, statement or testimony submitted to any municipal, state or
national (including foreign regulatory bodies having or claiming to have
jurisdiction over such Person).
Section 15.10 Governing Law; Consent to Jurisdiction This Agreement and the
rights of the parties hereunder shall be interpreted in accordance with the laws
of the State of Delaware, and all rights and remedies shall be governed by such
laws without regard to principles of conflict of laws. Each party agrees that,
in connection with any legal suit or proceeding arising with respect to this
Agreement, it shall submit to the non-exclusive jurisdiction of the United
States District Courts for the District of Delaware and the Southern District of
New York or the applicable Delaware or New York state court and agrees to venue
in such courts.
Section 15.11 Third-Party Beneficiary.
-----------------------
The parties hereto expressly acknowledge and agree that each of the Note
Investors (and each of their successors and assigns) is a third-party
beneficiary of the Sections hereof defining the rights, preferences, and
privileges of the Limited Partners, including without limitation, Section 14.1
hereof, and this sentence, and as such, may enforce such provisions against the
Partnership and shall have all rights and remedies of a third-party beneficiary
with respect to such provisions.
* * *
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
GENERAL PARTNER:
MOBILE SATELLITE VENTURES GP, INC.
By:__________________________
Name:
Title:
[MOTIENT SUB]
By:__________________________
Name:
Title:
[TMI SUB]
By:__________________________
Name:
Title:
INVESTORS:
---------
EXISTING INVESTORS:
------------------
TELCOM SATELLITE VENTURES INC.
By:
__________________________
Name:
Title:
COLUMBIA SPACE (QP), INC.
By:__________________________
Name:
Title:
COLUMBIA SPACE (AI), INC.
By:__________________________
Name:
Title:
COLUMBIA SPACE PARTNERS, INC.
By:__________________________
Name:
Title:
SPECTRUM SPACE EQUITY
INVESTORS IV, INC.
By:__________________________
Name:
Title:
SPECTRUM SPACE IV PARALLEL, INC.
By:__________________________
Name:
Title:
SPECTRUM SPACE IV MANAGERS, INC.
By:__________________________
Name:
Title:
▇▇▇▇ & COMPANY
By:__________________________
Name:
Title:
SCHEDULE I
CAPITAL CONTRIBUTIONS
LIMITED PARTNERS
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
Number/ Percentage Capital
Name Address Type of Units Interest Contributions
---- ------- ------------- -------- -------------
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
Motient Sub ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 8,000,000 48.069032% $1.00
----------------------------------- ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice
President and General Counsel
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇,
Esq.
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
Telcom Satellite Ventures ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ 720,000 Class A 4.326213% $18,000,000
Inc. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
Columbia Space (QP), Inc. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ 345,042.42 2.073232% $8,626,061
Suite 300 Class A
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Preferred Units
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
Columbia Space (AI), Inc. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ 19,061.12 Class 0.114531% $476,528
Suite 300 A Preferred
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Units
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
Columbia Space Partners, Inc. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ 275,896.46 1.657759% $6,897,411
Suite 300 Class A
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Preferred Units
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
One International Place
Spectrum Space Equity 29th Floor 618,048.00 3.713621% $15,451,200
Investors IV, Inc. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Class A
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ Preferred Units
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
Spectrum Space IV Parallel, One International Place 14,464.00 0.086909% $361,600
Inc. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Preferred Units
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
Spectrum Space IV Managers, One International Place 7,488.00 0.044993% $187,200
Inc. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Preferred Units
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------ ------------------------------------ ----------------- ------------------- --------------------
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6,636,481.51
TMI Sub ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Units 39.876156% $1.00
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Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
with a copy to:
Salans ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ Center
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 6,250 Common 0.037554% $1.00
Attention: ▇▇▇▇ ▇▇▇▇▇, Chairman Units
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SCHEDULE II
Note Investors Notice Address
MSV Investors LLC
c/o Rare Medium Group, Inc.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
TABLE OF CONTENTS
Page
ARTICLE I DEFINED TERMS........................................................2
Section 1.1 Definitions..............................................2
Section 1.2 Headings.................................................9
Section 1.3 Interpretation...........................................9
ARTICLE II CONTINUATION AND TERM...............................................9
Section 2.1 Continuation.............................................9
Section 2.2 Name....................................................10
Section 2.3 Term....................................................10
Section 2.4 Registered Agent and Office.............................10
Section 2.5 Principal Place of Business.............................10
Section 2.6 Qualification in Other Jurisdictions....................10
Section 2.7 Agreement...............................................10
ARTICLE III PURPOSE AND POWERS OF THE PARTNERSHIP.............................11
Section 3.1 Purpose.................................................11
Section 3.2 Powers of the Partnership...............................11
Section 3.3 Limitations on Partnership Powers.......................11
ARTICLE IV CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS.........................11
Section 4.1 Capital Contributions...................................11
Section 4.2 Status of Capital Contributions.........................12
Section 4.3 Limited Partnership Interest............................12
Section 4.4 Capital Accounts........................................12
ARTICLE V PARTNERS 13
Section 5.1 Powers of Limited Partners..............................13
Section 5.2 No General Partner Liability............................13
Section 5.3 Actions of the Limited Partners.........................13
Section 5.4 Partition...............................................13
Section 5.5 Withdrawal..............................................13
Section 5.6 Removal of the General Partner by Limited Partners......13
Section 5.7 Bankruptcy, Resignation, Withdrawal, Etc. of
General Partner.........................................13
ARTICLE VI MANAGEMENT 14
Section 6.1 Management by the General Partner.......................14
Section 6.2 Restrictions............................................14
Section 6.3 General Partner's Time..................................15
Section 6.4 No Liability; Indemnity.................................15
Section 6.5 Reliance by Third Parties...............................15
Section 6.6 General Authority.......................................15
Section 6.7 Limited Liability.......................................15
Section 6.8 Special Purpose Provision...............................15
Section 6.9 Grant of Power of Attorney..............................16
Section 6.10 Terms of Grant..........................................16
Section 6.11 Separate Form...........................................16
ARTICLE VII ALLOCATIONS.......................................................17
Section 7.1 Profits and Losses......................................17
Section 7.2 Special Allocations.....................................17
Section 7.3 Allocation Rules........................................19
Section 7.4 Section 704(c) of the Code..............................19
Section 7.5 Uncertainties in Allocations and Distributions..........20
ARTICLE VIII DISTRIBUTIONS....................................................20
Section 8.1 Distributions...........................................20
Section 8.2 Distributions to Pay Taxes..............................20
Section 8.3 Dissolution.............................................21
Section 8.4 Withholding Taxes.......................................21
Section 8.5 Limitations on Distribution.............................21
Section 8.6 Capital Proceeds........................................21
ARTICLE IX TRANSFERS; PARTNERSHIP REGISTRATION RIGHTS.........................22
Section 9.1 Incorporation of Section 8 of the
Stockholders' Agreement.................................22
Section 9.2 Partnership Registration Rights.........................22
ARTICLE X BOOKS AND RECORDS...................................................23
Section 10.1 Books, Records and Financial Statements.................23
Section 10.2 Accounting Method.......................................23
Section 10.3 Audit...................................................24
ARTICLE XI TAX MATTERS........................................................24
Section 11.1 Tax Matters Partner.....................................24
Section 11.2 Election................................................24
Section 11.3 Taxation as Partnership.................................24
ARTICLE XII LIABILITY, EXCULPATION AND INDEMNIFICATION........................25
Section 12.1 Liability...............................................25
Section 12.2 Exculpation.............................................25
Section 12.3 Indemnification.........................................25
Section 12.4 Expenses................................................26
Section 12.5 Insurance...............................................26
Section 12.6 Outside Businesses......................................26
ARTICLE XIII DISSOLUTION, LIQUIDATION AND TERMINATION.........................27
Section 13.1 Dissolution.............................................27
Section 13.2 Notice of Dissolution...................................27
Section 13.3 Liquidation.............................................27
Section 13.4 Termination.............................................28
Section 13.5 Claims of the Limited Partners..........................28
ARTICLE XIV AMENDMENTS........................................................28
Section 14.1 Amendments..............................................28
ARTICLE XV MISCELLANEOUS......................................................28
Section 15.1 Further Assurances......................................28
Section 15.2 Notices.................................................28
Section 15.3 Failure to Pursue Remedies..............................30
Section 15.4 Cumulative Remedies.....................................30
Section 15.5 Binding Effect..........................................30
Section 15.6 Severability............................................30
Section 15.7 Counterparts............................................30
Section 15.8 Integration.............................................30
Section 15.9 Confidentiality.........................................30
Section 15.10 Governing Law; Consent to Jurisdiction..................31
Section 15.11 Third-Party Beneficiary.................................31
Exhibit D
to October Investment Agreement
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LIMITED PARTNERSHIP AGREEMENT
OF
MOBILE SATELLITE VENTURES LP
[__________] ____, 2001
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