<PAGE>
EXHIBIT 10.41
This Agreement is subject to arbitration to
the extent provided in Article VII
pursuant to the Uniform Arbitration Act,
Section 15-48-10 et seq., Code of Laws
of South Carolina, 1976 (as amended).
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
PALMETTO MOBILENET, L.P.
A SOUTH CAROLINA LIMITED PARTNERSHIP
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S>
<C>
ARTICLE I -
Definitions..................................................
1
ARTICLE II - Name, Purpose and
Powers.................................... 4
SECTION 2.1 Continuation of the
Partnership.......................... 4
SECTION 2.2
Name.....................................................
4
SECTION 2.3
Address..................................................
4
SECTION 2.4
Purpose..................................................
4
SECTION 2.5
Powers...................................................
5
ARTICLE III -
Partners...................................................
5
SECTION 3.1
Units....................................................
5
SECTION 3.2
Voting...................................................
5
SECTION 3.3 Issuance of Additional
Units............................. 6
SECTION 3.4 Preemptive
Rights........................................ 6
SECTION 3.5 Admission of Additional
Partners......................... 7
SECTION 3.6 Contributions of the
Partners............................ 7
SECTION 3.7 Capital
Accounts......................................... 7
SECTION 3.8 Interest on
Contributions................................ 7
SECTION 3.9 Use of Proceeds of
Contributions......................... 7
SECTION 3.10
Loans....................................................
8
ARTICLE IV - Representations and
Warranties.............................. 8
SECTION 4.1 Representations and Warranties of
the General Partner.... 8
SECTION 4.2 Representations and Warranties of
the Limited Partners... 9
ARTICLE V - Allocation and
Distributions................................. 10
SECTION 5.1 Net Income and Net
Loss.................................. 10
SECTION 5.2 Net Gains and Net Losses from
Capital Transactions....... 11
SECTION 5.3 Repayment of Advances, Reserves
and Distributions........ 12
SECTION 5.4 Distributions upon Dissolution and
Liquidation
of the Partnership.................................... 12
SECTION 5.5 Withholding
Distributions................................ 12
SECTION 5.6 Allocation in Event of
Transfer.......................... 12
ARTICLE VI -
Accounting..................................................
13
SECTION 6.1 Books and
Records........................................ 13
SECTION 6.2 Fiscal
Year.............................................. 13
SECTION 6.3
Reports..................................................
13
SECTION 6.4 Bank
Accounts............................................ 14
SECTION 6.5 Accounting
Decisions..................................... 14
</TABLE>
i
<PAGE>
<TABLE>
<S>
<C>
SECTION 6.6 Federal Income Tax Returns and
Elections................. 14
ARTICLE VII - Rights, Duties and
Obligations of the General Partner...... 14
SECTION 7.1
Management...............................................
14
SECTION 7.2
Powers...................................................
15
SECTION 7.3 Employment of
Agents..................................... 15
SECTION 7.4 Responsibility;
Indemnification.......................... 15
SECTION 7.5 Limitations on Powers of the
General Partner............. 16
SECTION 7.6
Expenses.................................................
17
SECTION 7.7 Maintenance of Partnership
Status........................ 18
SECTION 7.8
Insurance................................................
18
SECTION 7.9 Fiduciary
Duty........................................... 19
SECTION 7.10 Termination of
General Partner........................... 19
SECTION 7.11 Power of
Attorney........................................ 20
ARTICLE VIII - Rights of and Limitations on
Limited Partners............. 20
SECTION 8.1 Rights of Limited
Partners............................... 20
SECTION 8.2 Limitation on Rights of Limited
Partners................. 21
SECTION 8.3 Lack of Personal Liability of
Limited Partners........... 21
SECTION 8.4 Permissible Ownership of
Units........................... 21
SECTION 8.5 Remedy of
Partnership.................................... 21
SECTION 8.6 Duty to Offer Stock of General
Partner Upon Ceasing
to be a Limited Partner............................... 22
ARTICLE IX - Restriction on Transfer,
Change in Control and Withdrawal... 22
SECTION 9.1 Restriction on
Transfer.................................. 22
SECTION 9.2 Receipt of Bona Fide
Offer............................... 22
SECTION 9.3 Offer by
Partner......................................... 22
SECTION 9.4
Procedure................................................
23
SECTION 9.5 Rights to Participate in a Bona
Fide Offer............... 23
SECTION 9.6 Other
Transfers.......................................... 23
SECTION 9.7 Call Option Upon Change in
Control....................... 24
SECTION 9.8 Purchase
Price........................................... 25
SECTION 9.9 Method of
Payment........................................ 26
SECTION 9.10 Failure to
Comply........................................ 26
SECTION 9.11
Closing..................................................
26
SECTION 9.12 Permitted
Transfer to Affiliate.......................... 26
SECTION 9.13 Governmental
Approval.................................... 27
SECTION 9.14 Waiver/Voting
by Offering Partner........................ 27
SECTION 9.15 Interests of
Selling Partner............................. 27
</TABLE>
ii
<PAGE>
<TABLE>
<S>
<C>
ARTICLE X - Withdrawal and
Dissolution................................... 28
SECTION 10.1
Withdrawal..............................................
28
SECTION 10.2 Dissolution and Winding
Up.............................. 28
SECTION 10.3 Dissolution Event
Terms................................. 29
ARTICLE XI -
Miscellaneous...............................................
29
SECTION 11.1
Notices.................................................
29
SECTION 11.2
Amendment...............................................
30
SECTION 11.3
Captions................................................
30
SECTION 11.4 Variation in
Pronouns................................... 30
SECTION 11.5
Counterparts............................................
30
SECTION 11.6 Applicable
Law.......................................... 30
SECTION 11.7 Entire
Agreement........................................ 30
SECTION 11.8
Validity................................................
30
SECTION 11.9
Benefit.................................................
30
SECTION 11.10 Nature of
Partnership Interest.......................... 30
SECTION 11.11
Meetings................................................
31
SECTION 11.12
Confidentiality.........................................
31
CERTIFICATION SIGNATURE PAGE TO BE EXECUTED
BY THE GENERAL
PARTNER...............................................................
A-1
CERTIFICATION SIGNATURE PAGE TO BE EXECUTED
BY EACH LIMITED PARTNER...... A-2
</TABLE>
iii
<PAGE>
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
PALMETTO MOBILENET, L.P.
This Amended and Restated Agreement of Limited Partnership of
Palmetto
MobileNet, L.P., a South Carolina limited
partnership, is effective as of the
1st day of September, 1998 and is made by
and among PMN, Inc., a South Carolina
corporation, as general partner and those
Persons (as hereafter defined) who
shall execute a Certification Signature
Page (as hereafter defined) as limited
partners.
WHEREAS, the
Partners originally entered into that certain Agreement of
Limited Partnership of Palmetto MobileNet,
L.P. (the "Original Partnership
Agreement") on February 8, 1990;
WHEREAS, the
Original Partnership Agreement was amended by the Amendment to
the Agreement of Limited Partnership of
Palmetto MobileNet, L.P., the Second
Amendment to the Agreement of Limited
Partnership of Palmetto MobileNet, L.P.
and the Third Amendment to the Agreement of
Limited Partnership of Palmetto
MobileNet, L.P. (collectively, the
"Amendments");
WHEREAS, the
Partners believe that it is in the best interest of the
Partnership and of the Partners to amend
and restate the Original Partnership
Agreement to incorporate the changes to the
Original Partnership Agreement set
forth in the Amendments and to make certain
other changes to the provisions of
the Original Partnership Agreement;
WHEREAS, the
Original Partnership Agreement, as amended, provided that it
could be modified or amended with the
consent of the holders of 66 2/3% of the
outstanding Units (as defined herein);
and
WHEREAS, the
holders of more than 66 2/3% of the outstanding Units have
approved this Amended and Restated
Agreement of Limited Partnership of Palmetto
MobileNet, L.P.
NOW, THEREFORE,
in consideration of the foregoing, the mutual promises
hereinafter set forth and other good and
valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged, the parties hereto, intending to
be legally bound, hereby agree as
follows:
ARTICLE I
Definitions
The following terms used in this Agreement, unless otherwise
expressly
provided
1
<PAGE>
herein or unless the context otherwise
requires, shall have the following
respective meanings:
"Act" means the South Carolina Uniform Limited Partnership Act as
in
effect in South Carolina and set forth at
Section 33-42-10, et seq. of the Code
of Laws of South Carolina 1976, as it may
be amended from time to time.
"Agreement" means this Amended and Restated Agreement of
Limited
Partnership of Palmetto MobileNet, L.P., as
it may be amended from time to time.
"Assignee" means a Person who has acquired a beneficial interest
in
one or more Units but who has not been
admitted to the Partnership as a
substituted Partner.
"Bona Fide Offer" shall mean a legally enforceable offer in
writing,
made and signed by an offeror who is a
Person financially and legally capable of
carrying out the terms of such offer. Any
offer to acquire less than all of a
Partner's Units is not a Bona Fide
Offer.
"Capital Account" of a Partner means the account established for
such
Partner as more specifically described in
Section 3.7.
"Capital Transaction" means the sale or other disposition of all
or
substantially all of the assets of the
Partnership, the financing or refinancing
of substantially all Partnership Property
or any other event resulting in an
extraordinary distribution.
"Certification Signature Page" means the Certification Signature
Page
in the form attached hereto by which each
Partner upon execution thereof agrees
to be bound by this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from
time
to time, or any successor federal revenue
law.
"Contribution" means any cash, property, services rendered or
promissory note or other binding obligation
to contribute cash or property or to
perform services which a Partner
contributes to the Partnership in its capacity
as a Partner.
"Distribution" means cash or any other property from any source
distributed to the Partners pursuant to
Sections 5.3, 5.4 or 5.5 of this
Agreement, but shall not include any
payments to the General Partner made under
the provisions of Sections 7.4, 7.6 and 7.8
of this Agreement.
"General Partner" means PMN, Inc. and such additional Persons
succeeding it in
2
<PAGE>
such capacity.
"Limited Partners" mean the Persons having executed
Certification
Signature Pages as limited partners, and
any person admitted to the Partnership
pursuant to Section 3.3 or Section 9.1.
"Majority-in-Interest" means Partners holding 66 2/3% or more of
the
outstanding Units, determined without
regard to any partner prohibited from
voting pursuant to Section 3.2(b).
"Net Gains and Net Losses from Capital Transactions" mean the
gains
and losses (including, without limitation,
any interest on installments or
interest on principal in the event of an
installment sale) realized by the
Partnership as a result of a Capital
Transaction or the damage or destruction of
the Partnership Property.
"Net Income" or "Net Loss" mean, with respect to any fiscal year,
the
net income or net loss recognized by the
Partnership for federal income tax
purposes after taking into account all
items of income, gain, loss, deduction
and credit, determined by the Partnership's
method of accounting, recognized in
such fiscal year.
"Partner(s)" mean the General Partner and the Limited Partners
where
the context clearly requires.
"Partnership" means Palmetto MobileNet, L.P., a South Carolina
limited
partnership.
"Partnership Interest" shall mean all of the rights of each
Partner
with respect to the Partnership, whether
created under this Agreement or under
the Act, other than the right to serve as
General Partner. Any Partner's
Partnership Interest relative to the
Partnership Interests of the other Partners
shall be determined by the ratio of such
Partner's Units to all issued and
outstanding Units of the Partnership.
"Partnership Property" means all right, title and interest to
the
property of the Partnership, tangible or
intangible, or real or personal, now
owned or hereafter acquired.
"Person" means any individual, partnership, corporation,
limited
liability company, trust, association or
other legal entity.
"Power of Attorney" means the special power of attorney rights
provided by the Limited Partners to the
General Partner as more specifically set
forth in Section 7.11.
3
<PAGE>
"Prime Rate" means simple interest at a rate per annum equal to
the
lesser of (a) a variable rate equal to the
prime interest rate quoted in the
money rates section of the Wall Street
Journal (Charlotte Edition), initially
set at such prime interest rate on the date
which interest begins to accrue and
subsequently adjusted on the last business
day of each succeeding calendar
quarter to such prime rate on such date of
adjustment or (b) the maximum rate
permitted by applicable law.
"Registered Notice" means notice sent by registered or certified
mail,
return receipt requested and first-class
postage prepaid. Any notice which does
not contain all information required by
this Agreement shall not be considered a
"Registered Notice" for the purposes of
this Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Unit" shall mean a proportionate share of each Partner's
Partnership
Interest, including but not limited to,
such Partner's right to vote, Capital
Account and interest in Net Income, Net
Loss, Net Gains and Net Losses from
Capital Transactions and Distributions made
by the Partnership.
ARTICLE II
Name, Purpose and Powers
SECTION 2.1
Continuation of the Partnership. The Partners hereby enter into
this Agreement in accordance with and
pursuant to the Act and other relevant
laws of the State of South Carolina which
shall govern the rights and
liabilities of the Partners except as
otherwise herein expressly stated. The
Partnership shall continue in existence
until November 15, 2049 unless it is
earlier terminated pursuant to Section
10.2.
SECTION 2.2
Name. The business of the Partnership shall be conducted under
the name "Palmetto MobileNet, L.P." or such
other assumed name as the
Partnership shall adopt from time to
time.
SECTION 2.3
Address. The principal business address of the Partnership and
the address at which the Partnership's
records shall be kept is 440 Knox Abbott
Drive, Suite 430, Cayce, South Carolina
29033, or such address as the General
Partner shall determine from time to
time.
SECTION 2.4
Purpose. The purpose of the Partnership shall be to engage in
the telecommunications business, which
shall be deemed to include owning
partnership interests, stock, limited
liability company interests or other
ownership interests in an entity engaged in
the
4
<PAGE>
telecommunications business, and, in
connection therewith, the Partnership
specifically may:
(a) Acquire, own, hold, improve, construct, develop, lease,
sublease,
encumber, sell, exchange and otherwise deal
with the Partnership Property;
(b)
Subject to the terms and limitations set forth in this
Agreement,
do all things reasonably incident to the
selling, constructing, managing,
operating and owning of the Partnership
Property, including granting security
interests in, selling, leasing and
subleasing or otherwise disposing of the
same;
(c) Borrow money for Partnership purposes, and, subject to the
terms
and limitations of this Agreement, pledge,
grant a security interest in or
otherwise encumber any interest in the
Partnership Property in connection
therewith;
(d) Sell, buy, lease, sublease, exchange or otherwise dispose of
the
Partnership Property for cash, stock,
securities or any combination thereof,
upon such terms and conditions as the
General Partner may from time to time
determine on the terms stated herein;
and
(e) Do all things necessary or desirable in connection with the
foregoing or as otherwise contemplated by
this Agreement.
The Partnership
shall not engage in any other business, except with the
consent of the Partners as described in
Section 7.5. The investment of
Partnership assets in short term securities
or in interest-bearing accounts
pending Distributions shall not be
considered any other business. The
Partnership shall not in any way be
prohibited from or restricted in engaging in
or owning an interest in any other business
venture of any nature, including any
venture which might be competitive with the
business of a Partner.
SECTION 2.5
Powers. Subject to the terms, conditions and restrictions of
this Agreement, the Partnership shall have
the authority and power in its own
name to do all things described in Section
2.4.
ARTICLE III
Partners
SECTION 3.1
Units. Each Partner shall be deemed to own the number of Units
set forth on the books and records of the
Partnership. Units will be evidenced
by certificates, and the form of such
certificates shall be as approved by the
General Partner. At the time a Person is
admitted as a Partner, such Person will
be given a certificate by the General
Partner setting forth the
5
<PAGE>
number of Units owned by such Person. Each
Unit entitles its owner to (a) the
voting rights set forth in Section 3.2 and
(b) the right to share with the
holders of other Units in Distributions as
set forth in Article V and Article X.
SECTION 3.2
Voting.
(a) At each meeting of Partners, every Partner shall be permitted
one
vote for each Unit it owns (less than whole
votes shall be allowed). A quorum
for any issue at any meeting shall exist if
a Majority-in-Interest are present
in person or voting by proxy or other
written instructions. Any Partner may vote
on any matter if not present, by general or
specific proxy to a Partner present
or by specific instructions in writing.
(b) A Partner shall not vote, however, and its Units shall not
be
counted for the purposes of determining on
any such issue whether a quorum
exists or whether the requisite percentage
of outstanding Units have been voted
in the affirmative:
(i) If the Partner has given notice of withdrawal or other
disposition of its Partnership Interest
from the Partnership, including but not
limited to notice of a change in control of
such Partner; or
(ii) If the issue before the Partnership is whether the Partner
should be expelled from the Partnership or
should be granted a temporary
withdrawal from the Partnership.
Furthermore, if a Partners is disqualified
from voting pursuant to this Section
3.2(b) such Partner shall not be entitled
to any notice of a meeting of the
Partners or to attend any meeting of the
Partners or to participate in any
Partnership distributions occurring after
such event.
(c) Excepting only as provided in Section 3.2(b), no Partner shall
be
disqualified from voting on any issue,
notwithstanding any interest it may have
therein which differs from the interest of
the Partnership or the other
Partners.
SECTION 3.3
Issuance of Additional Units.
(a) The General Partner has the right, during any twelve-month
period,
to raise capital for the Partnership
through the issuance of Units with an
aggregate value of less than
$5,000,000.
(b) Upon the approval
of a Majority-in-Interest, the General Partner
may, during any twelve-month period, raise
capital for the Partnership through
the issuance of Units with a value in
excess of $5,000,000 in the aggregate.
6
<PAGE>
(c) Each Unit issued pursuant to this Section 3.3 shall be issued
upon
the payment in full to the Partnership of
an amount equal to the fair market
value of an Unit, as determined by the
General Partner at the time of the
offering of such Units. The amount of such
payment shall be deemed to be a
Contribution to the Partnership.
SECTION 3.4
Preemptive Rights.
(a) The General Partner shall give Registered Notice to each
Partner
of its intention to offer Units pursuant to
Section 3.3. Such Registered Notice
must contain the number of Units being
offered and the price per Unit.
(b) For a period of 30 days after receipt of such Registered
Notice,
each Partner shall have the right, at its
sole option, to purchase, subject to
the limitations set forth in Section 8.4,
its pro rata share of the Units
offered for sale pursuant to Section 3.3
upon the terms and conditions set forth
in the Registered Notice. To the extent
that any Partner does not purchase its
pro rata share of the offered Units, such
Units shall be reoffered to the
remaining other Partners to purchase their
pro rata interest in such Units. If
the other Partners shall not, individually
or together, purchase, within the
30-day period, all of the Units offered
pursuant to Section 3.3, the General
Partner shall have the right to sell such
remaining Units to any other Person
upon the terms and conditions and at a
price equal to or greater than the price
set forth in the Registered Notice.
SECTION 3.5
Admission of Additional Partners. No Person who purchases Units
issued pursuant to Section 3.3 may be
admitted to the Partnership as a Partner
unless such Person executes a Certification
Signature Page. The General Partner
is authorized to execute on behalf of the
Limited Partners such documents
consenting to the admission of such Persons
as Partners as may be required by
the Agreement or the Act; provided however
that such admission Person complies
with Section 3.3, and delivers a properly
executed Certificate Signature Page.
SECTION 3.6
Contributions of the Partners. No Limited Partner shall be
required to contribute any additional
capital or lend any funds to the
Partnership. The General Partner shall have
no personal liability for the
repayment of the Contributions of the
Limited Partners.
SECTION 3.7
Capital Accounts. Each Partner shall have a Capital Account
which shall be (a) credited with its
Contributions; (b) increased by (i) the
amount of Net Income allocated to such
Partner pursuant to Section 5.1; (ii) the
amount of Net Gains from Capital
Transactions allocated to such Partner pursuant
to Section 5.2; (iii) an amount equal to
any income of the Partnership which is
exempt from federal income tax; and (iv)
the amount of additional Contributions,
including, but not limited to,
Contributions pursuant to Section 3.3; and (c)
7
<PAGE>
decreased by (i) the amount of Net Losses
allocated to such Partner pursuant to
Section 5.1; (ii) the amount of Net Losses
from Capital Transactions allocated
to such Partner pursuant to Section 5.2;
(iii) an amount equal to any
non-capital expenses which are not
deductible for federal income tax purposes;
and (iv) the amount distributed to such
Partner pursuant to Sections 5.3 and
5.5.
Notwithstanding
anything to the contrary contained herein, all Capital
Accounts will be maintained in accordance
with applicable tax accounting
principles.
SECTION 3.8
Interest on Contributions. No interest shall be paid by the
Partnership on any Contribution to the
Partnership, and no Partner shall be
entitled to a return of his Contribution
upon withdrawal from the Partnership.
SECTION 3.9 Use
of Proceeds of Contributions. The proceeds of the
Contributions have been or shall be applied
by the Partnership for Partnership
purposes, including, but not limited to,
the purchase of Partnership Property,
the payment of fees and expenses in
connection with the purchase of Partnership
Property and the funding of any reserve
fund deemed necessary by the General
Partner.
SECTION 3.10
Loans. The Partnership is authorized to borrow funds from one
or more of the Partners, subject to Section
7.5. Any such loan to the
Partnership by a Partner shall not be
deemed a Contribution but a debt due from
the Partnership to such Partner and shall
be evidenced by a properly executed
promissory note and repaid with interest at
the Prime Rate and on such terms as
may be negotiated at the time such loan is
made.
ARTICLE IV
Representations and Warranties
SECTION 4.1
Representations and Warranties of the General Partner. The
General hereby represents and warrants to
the Partnership and to each Limited
Partner that:
(a) It is a corporation duly organized, validly existing and in
good
standing under the laws of the State of
South Carolina;
(b) The execution, delivery and performance of this Agreement by
the
General Partner (i) has been duly
authorized by all requisite corporate action,
(ii) will not contravene or conflict with
any provision of law or of the General
Partner's Articles of Incorporation or
bylaws, as amended to the date hereof,
(iii) will not violate or be in conflict
with, result in a breach of or
constitute (with or without notice or
passage of time) a default under any
indenture, loan or other
8
<PAGE>
agreement or instrument to which the
General Partner is a party or by which it
or any of its property is bound, or any
other order, writ, injunction or decree
of any government instrumentality binding
upon the General Partner or any of its
property and (iv) will not result in the
creation or imposition of any lien,
charge or encumbrance upon any of the
property of the General Partner other than
any lien, security interest or other
encumbrance arising under this Agreement;
(c) This Agreement is a legal, valid and binding obligation of
the
General Partner enforceable against the
General Partner in accordance with its
terms except as such enforceability may be
limited by applicable bankruptcy,
insolvency, reorganization, moratorium or
other similar laws, now or hereafter
in effect, relating to the relief of
debtors generally and general principles of
equity;
(d) It is not in violation of or in default with respect to any
term
or provision of any indenture, contract,
agreement or instrument to which it is
a party or by which it is bound, or any
judgment, order or decree of any court
or, to its knowledge, any governmental
authority or any statute, rule or
regulation applicable to the General
Partner or by which it is bound, in any
case and in any manner so as presently or
at any future time to affect the
General Partner adversely in any material
respect in connection with its
ownership of Units or its ability to
perform its obligations under this
Agreement;
(e) It is not a party to any action, suit or proceeding in which
an
adverse determination has or would have a
material adverse effect on its
ownership of Units or its ability to
perform its obligations under this
Agreement; and
(f) The General Partner shall take no action toward the dissolution
of
the Partnership, a voluntary proceeding
under federal and state bankruptcy laws
or the appointment of a receiver, and the
General Partner shall not sell,
assign, pledge or otherwise transfer its
interest as General Partner.
SECTION 4.2
Representations and Warranties of the Limited Partners. Each
Limited Partner hereby represents and
warrants to the Partnership and to each
other that:
(a) It has purchased and will purchase Units for its own account
and
not for the interest or benefit of others
and not with a view toward resale or
distribution thereof;
(b) It understands that the Units have not been registered under
the
Securities Act or applicable state
securities laws (and that the Partnership is
not obligated to register the Units) and
that it may only transfer its Units, or
a beneficial portion thereof, in compliance
with the Securities Act or
applicable state securities laws and the
rules and regulations promulgated
9
<PAGE>
thereunder;
(c) It is a corporation, limited liability company or
co-operative
duly organized, validly existing and in
good standing under the laws of its
state of incorporation or organization, as
the case may be;
(d) The execution, delivery and performance of this Agreement by
each
Limited Partner (i) has been duly
authorized by all requisite action, (ii) will
not contravene or conflict with any
provision of law or of the Limited Partner's
organizational documents as amended to the
date hereof, (iii) will not violate
or be in conflict with, result in a breach
of or constitute (with or without
notice or passage of time) a default under
any indenture, loan or other
agreement or instrument to which the
Limited Partner is a party or by which it
or any of its property is bound, or any
other order, writ, injunction or decree
of any government instrumentality binding
upon the Limited Partner or any of its
property and (iv) will not result in the
creation or imposition of any lien,
charge or encumbrance upon any of the
property of the Limited Partner other than
any lien, security interest or other
encumbrance arising under this Agreement;
(e) This Agreement is a legal, valid and binding obligation of
the
Limited Partner enforceable against the
Limited Partner in accordance with its
terms except as such enforceability may be
limited by applicable bankruptcy,
insolvency, reorganization, moratorium or
other similar laws, now or hereafter
in effect, relating to the relief of
debtors generally and general principles of
equity;
(f) It is not in violation of or in default with respect to any
term
or provision of any indenture, contract,
agreement or instrument to which it is
a party or by which it is bound, or any
judgment, order or decree of any court
or, to its knowledge, any governmental
authority or any statute, rule or
regulation applicable to such Limited
Partner or by which it is bound, in any
case and in any manner so as presently or
at any future time to affect such
Limited Partner adversely in any material
respect in connection with its
ownership of Units; and
(g) It is not a party to any action, suit or proceeding in which
an
adverse determination has or would have a
material adverse effect on its
ownership of Units or its ability to
perform its obligations under this
Agreement.
ARTICLE V
Allocation and Distributions
SECTION 5.1 Net
Income and Net Loss.
10
<PAGE>
(a) Except as provided in Sections 5.1(b), 5.1(c), 5.1(d) and 5.2,
the
Net Income and Net Loss of the Partnership
shall be allocated among the Partners
in accordance with each Partner's
Partnership Interest.
(b) The General Partner shall be allocated the amount of any
Net
Losses that, but for this Section 5.1(b),
would have been allocated to any
Limited Partner, if such Limited Partner
does not have a deficit balance in its
Capital Account and if the allocation to
such Limited Partner would have
thereupon caused or increased a deficit
balance in such Limited Partner's
Capital Account as of the end of the
Partnership's fiscal year to which such
allocation relates (after taking into
consideration the reduction set forth in
Section 5.1(e));
(c) Any Limited Partner which is not obligated to restore any
deficit
balance in its Capital Account and which
receives an allocation or distribution
specified in Section 5.1(e) which results
in a deficit balance in such Limited
Partner's Capital Account shall be
allocated Net Profits in an amount and manner
sufficient to eliminate such deficit
balance as quickly as possible;
(d) In the event any Net Losses are allocated to the General
Partner
pursuant to Section 5.1(b), Net Profits
shall be subsequently allocated to the
General Partner until the aggregate amount
of such allocations of Net Profits is
equal to the aggregate amount of any Net
Losses allocated to the General Partner
pursuant to Section 5.1(b);
(e) For purposes of determining a Partner's Capital Account balance
as
of the end of any fiscal year, such Capital
Account shall be reduced by:
(i) The amount of Net Losses (or any item thereof) as of the
end
of such fiscal year which reasonably are
expected to be allocated to such
Partner pursuant to Code Sections 704(e)(2)
and 706(d), and paragraph (b)(2)(ii)
of Section 1.751-1 of the Treasury
Regulations promulgated under the Code; and
(ii) The amount of Distributions, as of the end of such fiscal
year, which reasonably are expected to be
made to such Partner to the extent
that such Distributions exceed offsetting
increases to such Partner's Capital
Account that reasonably are expected to
occur during (or prior to) the end of
such fiscal year.
(f) Notwithstanding anything contained in this Section 5.1,
income,
gain, loss and deductions with respect to
any property contributed to the
capital of the Partnership shall be
allocated, solely for tax purposes, among
the Partners so as to take into account the
variation between the basis of such
property to the Partnership and its fair
market value in accordance with Section
704(c) of the Code.
11
<PAGE>
SECTION 5.2 Net
Gains and Net Losses from Capital Transactions.
(a) Net Gains from Capital Transactions shall be allocated as
follows:
(i) First, proportionately among all Partners who have negative
balances in their Capital Accounts as of
the end of the day immediately
preceding the day on which the Capital
Transaction occurred until all negative
Capital Accounts of the Partners shall have
been increased to zero; and
(ii) Second, to the Partners in accordance with each Partner's
Partnership Interest.
(b) Net Losses from Capital Transactions shall be allocated as
follows:
(i) First, proportionately among all Partners who have positive
balances in their Capital Accounts as of
the end of the day immediately
preceding the day on which the Capital
Transaction occurred until all Capital
Accounts have been reduced to zero; and
(ii) Second, to the Partners, in accordance with each Partner's
Partnership Interest.
(c) Notwithstanding anything contained in this Section 5.2,
income,
gain, loss and deductions with respect to
any property contributed to the
capital of the Partnership shall be
allocated, solely for tax purposes, among
the Partners so as to take into account the
variation between the basis of such
property to the Partnership and its fair
market value in accordance with Section
704(c) of the Code.
SECTION 5.3
Repayment of Advances, Reserves and Distributions. Except as
provided in Section 5.5, any funds deemed
available for Distribution (including
Contributions) by the General Partner in
any year shall be distributed first, to
any Partner who has made a loan under
Section 3.10 in payment of interest and
the principal then due and payable under
the terms of such loan and second, to
the establishment of a working capital and
maintenance reserve in any reasonable
amount deemed advisable by the General
Partner; and then, all amounts in excess
thereof, if any, shall be distributed to
the Partners and allocated among the
Partners in accordance with each Partner's
Units.
SECTION 5.4
Distributions upon Dissolution and Liquidation of the
Partnership. Upon dissolution and
liquidation of the Partnership and following
the payment of all debts and liabilities of
the Partnership, including any
mortgage indebtedness owed by the
Partnership with respect to
12
<PAGE>
the Partnership Property, any liability to
Partners for authorized but unpaid
Distributions and all expenses of
dissolution and liquidation, and subject to
the right of the liquidating agent to
establish such cash reserves as it may
deem reasonably necessary for any
contingent or unforeseen lia
