Ex 10.32
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AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
OF
TRIDENT III PROFESSIONALS FUND, L.P.
(A Cayman Islands Exempted Limited Partnership)
This Amended and Restated Limited Partnership
Agreement of Trident III Professionals Fund, L.P.,
dated December 18, 2003, amends and restates the
Limited Partnership Agreement of Trident III
Professionals Fund, L.P., dated October 22, 2003
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TABLE OF CONTENTS
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SECTION PAGE
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SECTION 1
ORGANIZATION; ETC........................................................................................1
1.1 Amendment and Restatement of the Initial Agreement; Filings, etc.................................1
1.2 Name and Offices.................................................................................2
1.3 Purposes.........................................................................................2
1.4 Term.............................................................................................3
1.5 Fiscal Year......................................................................................3
1.6 Partnership Powers...............................................................................3
SECTION 2
THE GENERAL PARTNER......................................................................................4
2.1 Management.......................................................................................4
2.2 Limitations on the General Partner...............................................................5
2.3 Reliance by Third Parties........................................................................5
2.4 Expenses.........................................................................................5
2.5 Liability of the General Partner and the Manager.................................................5
2.6 Conflicts of Interest............................................................................6
2.7 Transfer or Withdrawal by the General Partner....................................................7
2.8 Certain Other Relationships......................................................................8
SECTION 3
LIMITED PARTNERS.........................................................................................8
3.1 Limited Partners.................................................................................8
3.2 No Participation in Management, etc..............................................................8
3.3 Limitation of Liability..........................................................................8
3.4 No Priority, etc.................................................................................9
SECTION 4
INVESTMENTS..............................................................................................9
4.1 Investments in Portfolio Companies...............................................................9
4.2 Temporary Investments...........................................................................10
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SECTION 5
CAPITAL CONTRIBUTIONS; CAPITAL COMMITMENTS..............................................................10
5.1 Capital Contributions and Capital Commitments of the Partners...................................10
5.2 Excused Investments.............................................................................11
5.3 Defaulting Limited Partners.....................................................................12
5.4 Termination of Employment (other than Tier 1 Limited Partners)..................................14
5.5 Termination of a Tier 1 Limited Partner.........................................................16
5.6 Special Consequences of Termination of Any Profits Limited Partner..............................17
5.7 Further Actions.................................................................................17
SECTION 6
CAPITAL ACCOUNTS; DISTRIBUTIONS; ALLOCATIONS; WITHHOLDING...............................................18
6.1 Capital Accounts................................................................................18
6.2 Adjustments to Capital Accounts.................................................................18
6.3 Distributions...................................................................................18
6.4 Tax Distributions...............................................................................19
6.5 Other Provisions................................................................................19
6.6 Distributions of Securities.....................................................................20
6.7 Negative Capital Accounts.......................................................................20
6.8 No Withdrawal of Capital........................................................................20
6.9 Allocations.....................................................................................20
6.10 Tax Matters....................................................................................20
6.11 Withholding Taxes..............................................................................21
6.12 Clawback by Profits Limited Partners...........................................................23
6.13 Final Distribution.............................................................................23
SECTION 7
THE MANAGER.............................................................................................23
SECTION 8
BANKING; ACCOUNTING; BOOKS AND RECORDS; ADMINISTRATIVE SERVICES.........................................24
8.1 Banking.........................................................................................24
8.2 Maintenance of Books and Records; Access........................................................24
8.3 Partnership Tax Returns.........................................................................25
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8.4 Valuation.......................................................................................25
SECTION 9
REPORTS TO PARTNERS.....................................................................................25
9.1 Independent Auditors............................................................................25
9.2 Reports to Current Partners.....................................................................25
9.3 United States Federal Income Tax Information....................................................26
9.4 Additional Information..........................................................................26
SECTION 10
INDEMNIFICATION OF COVERED PERSONS......................................................................26
10.1 Indemnification of Covered Persons.............................................................26
10.2 Expenses, etc..................................................................................28
10.3 Notices of Claims, etc.........................................................................28
10.4 No Waiver......................................................................................28
10.5 Covered Persons May Rely and Enforce...........................................................29
SECTION 11
TRANSFER OF LIMITED PARTNERSHIP INTERESTS; WITHDRAWAL OF LIMITED PARTNERS...............................29
11.1 Admission, Substitution and Withdrawal of Limited Partners; Assignment.........................29
11.2 Additional Limited Partners....................................................................32
SECTION 12
DEATH, INCOMPETENCY OR BANKRUPTCY OR DISSOLUTION OF PARTNERS............................................35
12.1 Bankruptcy, Dissolution of the General Partner.................................................35
12.2 Death, Incompetence, Bankruptcy, Dissolution or Withdrawal of a Limited Partner................35
SECTION 13
DURATION AND TERMINATION OF PARTNERSHIP.................................................................35
13.1 Duration.......................................................................................35
13.2 Distribution Upon Dissolution..................................................................36
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13.3 Distributions in Cash or in Kind...............................................................37
13.4 Time for Liquidation, etc......................................................................38
13.5 General Partner and Manager Not Personally Liable for Return of Capital Contributions..........38
13.6 Reorganization of the Partnership..............................................................38
SECTION 14
DEFINITIONS.............................................................................................41
Section 15
AMENDMENTS; POWER OF ATTORNEY...........................................................................49
15.1 Amendments.....................................................................................49
15.2 Power of Attorney..............................................................................50
15.3 Further Actions of the Limited Partners........................................................53
Section 16
MISCELLANEOUS PROVISIONS................................................................................53
16.1 Notices........................................................................................53
16.2 Counterparts...................................................................................54
16.3 Table of Contents and Headings.................................................................54
16.4 Successors and Assigns.........................................................................54
16.5 Severability...................................................................................54
16.6 Non-Waiver.....................................................................................54
16.7 Applicable Law (Submission to Jurisdiction)....................................................54
16.8 Confidentiality................................................................................54
16.9 Survival of Certain Provisions.................................................................55
16.10 Waiver of Partition...........................................................................55
16.11 Entire Agreement..............................................................................55
16.12 Currency......................................................................................56
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This Amended and Restated Limited Partnership Agreement (as from time
to time amended, supplemented or restated, this "AGREEMENT") of TRIDENT III
PROFESSIONALS FUND, L.P., a Cayman Islands exempted limited partnership (the
"PARTNERSHIP"), is made and entered into on December 18, 2003, for the purpose
of amending and restating the Limited Partnership Agreement of the Partnership,
dated October 22, 2003 (the "INITIAL AGREEMENT"). Capitalized terms used herein
without definition have the meanings specified in Section 14.
W I T N E S S E T H:
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WHEREAS, the Partnership is an exempted limited partnership, organized
under the laws of the Cayman Islands pursuant to the Partnership Law, originally
between the General Partner and the Initial Limited Partner;
WHEREAS, the Partnership was constituted pursuant to the Initial
Agreement, and the General Partner made such registrations with the Registrar of
Exempted Limited Partnerships in the Cayman Islands as were necessary to effect
the registration of the Partnership as an exempted limited partnership under the
Partnership Law;
NOW, THEREFORE, in consideration of the premises and the mutual
promises contained in this Agreement, the parties hereto hereby agree as
follows:
SECTION 1
ORGANIZATION; ETC.
1.1 AMENDMENT AND RESTATEMENT OF THE INITIAL AGREEMENT; FILINGS, ETC.
(a) GENERAL. The General Partner, the Initial Limited Partner and the Persons
from time to time listed in the Partnership Register as limited partners of the
Partnership (in their capacities as limited partners of the Partnership, the
"LIMITED PARTNERS", and the General Partner and the Limited Partners being
herein referred to collectively as the "PARTNERS", both such terms to include
any Person hereafter admitted to the Partnership as a Limited Partner or a
General Partner, as the case may be, in accordance with the terms hereof, and to
exclude any Person that ceases to be a Partner in accordance with the terms
hereof), hereby amend the Initial Agreement in its entirety by deleting it and
replacing it with this Agreement. The parties hereto hereby agree to continue
the Partnership as a limited partnership under and pursuant to the provisions of
the Partnership Law and agree that the rights, duties and liabilities of the
Partners shall be as provided in the Partnership Law, except as otherwise
provided herein. A Person shall be admitted as a limited partner of the
Partnership at the time that (i) the Agreement, a Power of Attorney and a
Subscription Agreement, or counterparts thereof are executed by or on behalf of
such Person and are accepted by the General Partner and (ii) such Person is
listed by the
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General Partner as a Limited Partner in the Partnership Register.
Immediately following the admission of Limited Partners at the Initial Closing,
the Initial Limited Partner shall cease to be a partner of the Partnership and
the Partnership shall return the original capital contribution made by the
Initial Limited Partner, who shall have no further rights or claims against, or
obligations as a partner of, the Partnership.
(b) PARTNERSHIP REGISTER. The General Partner shall cause to be
maintained in the registered and principal offices of the Partnership a register
of limited partnership interests of the Partnership setting forth the name,
mailing address, Capital Commitment and group (as set forth in Section 3.1) of
each Partner along with such other information as required by Section 11(1) of
the Partnership Law (the "PARTNERSHIP REGISTER"). The Partnership Register shall
from time to time be updated as necessary and in accordance with the Partnership
Law to maintain the accuracy of the information contained therein. Except as may
otherwise be provided herein, any reference in this Agreement to the Partnership
Register shall be deemed to be a reference to the Partnership Register as in
effect from time to time. Subject to the terms of this Agreement, the General
Partner may authorize any action permitted hereunder in respect of the
Partnership Register without any need to obtain the consent of any other
Partner.
1.2 NAME AND OFFICES. The name of the Partnership is Trident III
Professionals Fund, L.P. The Partnership shall have its registered office in the
Cayman Islands at the offices of Walkers SPV Limited, Xxxxxxx Xxxxx, Xxxx
Xxxxxx, X.X. Xxx 000 GT, Georgetown, Grand Cayman, Cayman Islands at which shall
be kept the records required to be maintained under the Partnership Law, at
which the service of process on the Partnership may be made and to which all
notices and communications may be addressed. The General Partner may designate
from time to time another office in the Cayman Islands as the Partnership's
registered office. The Partnership shall have its initial principal office for
its activities at 00 Xxxxxxxxx Xxxx, Xxxxxxxxx, XX 00000, Xxxxxx Xxxxxx of
America. The General Partner may designate from time to time another office
within or without the United States as the Partnership's principal office for
its investment activities. The Partnership may from time to time have such other
office or offices within or without the Cayman Islands as may be designated by
the General Partner.
1.3 PURPOSES. Subject to the other provisions of this Agreement, the
purposes and business of the Partnership are to co-invest with Trident III,
L.P., a Cayman Islands exempted limited partnership (the "INSTITUTIONAL FUND"
and, together with any other investment funds and separate accounts organized by
or managed by MMC or its Affiliates and authorized to co-invest with the
Institutional Fund in Portfolio Companies, the "CO-INVESTMENT FUNDS") and to
engage in such other activities as the General Partner deems necessary,
advisable, convenient or incidental thereto, to engage in any business which may
lawfully be conducted by a limited partnership formed pursuant to the
Partnership Law and to carry on any activities relating thereto or arising
therefrom,
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including without limitation anything incidental, ancillary or necessary to the
foregoing, PROVIDED that the Partnership shall not undertake business with the
public in the Cayman Islands other than so far as may be necessary for the
carrying on of the activities of the Partnership exterior to the Cayman Islands.
1.4 TERM. The term of the Partnership commenced on the date set forth
in the statement (as it may be amended from time to time, the "STATEMENT")
effecting its registration as an exempted limited partnership pursuant to
Section 9 of the Partnership Law and shall continue, unless the Partnership is
sooner dissolved, until the end of the term of the Institutional Fund (such
term, as so extended, being referred to as the "TERM"), PROVIDED, that the
General Partner in its sole discretion may extend such Term. Notwithstanding the
expiration of the Term, the Partnership shall continue until notice of
dissolution of the Partnership is filed in accordance with Section 13.4(b) and
in the manner provided in the Partnership Law.
1.5 FISCAL YEAR. The Fiscal Year of the Partnership shall end on the
31st day of December in each year. The Partnership shall have the same Fiscal
Year for income tax and for financial and partnership accounting purposes.
1.6 PARTNERSHIP POWERS. In furtherance of the purposes specified in
Section 1.3 and without limiting the generality of Section 2.1, the Partnership
and the General Partner, acting on behalf of the Partnership or on its own
behalf and in its own name, as appropriate, shall be empowered to do or cause to
be done any and all acts deemed by the General Partner, in its sole judgment, to
be necessary, advisable, appropriate, proper, convenient or incidental to or for
the furtherance of the purposes of the Partnership including, without
limitation, the power and authority:
(a) to acquire, hold, manage, own and Transfer the
Partnership's interests in Securities or any other investments made or
other property or assets held by the Partnership;
(b) to establish, have, maintain or close one or more offices
within or without the Cayman Islands and in connection therewith to
rent or acquire office space and to engage personnel;
(c) to open, maintain and close bank and brokerage (including,
without limitation, margin) accounts, including, without limitation, to
draw checks or other orders for the payment of moneys, to exchange U.S.
dollars held by the Partnership into non-U.S. currencies and vice
versa, to enter into currency forward and futures contracts and to
hedge Portfolio Investments, and to invest funds in Temporary
Investments;
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(d) to bring, defend, settle and dispose of Proceedings at law
or in equity or before any Governmental Authority;
(e) to retain and remove consultants, custodians, attorneys,
placement agents, accountants, actuaries and such other agents and
employees of the Partnership as it may deem necessary or advisable, and
to authorize each such agent and employee to act for and on behalf of
the Partnership;
(f) to retain the Manager, as contemplated by Section 7.1, to
render investment advisory and managerial services to the Partnership;
(g) to execute, deliver and perform its obligations under the
Subscription Agreements and any agreements to induce any Person to
purchase limited partnership interests in the Partnership, without any
further act, approval or vote of any Partner;
(h) to make all elections, investigations, evaluations and
decisions, binding the Partnership thereby, that may, in the sole
discretion of the General Partner, be necessary, appropriate, desirable
or convenient for the acquisition, holding or Transfer of Securities
for the Partnership;
(i) to enter into, deliver, perform and carry out contracts
and agreements of every kind necessary or incidental to the offer and
sale of limited partner interests in the Partnership, to the
acquisition, holding and Transfer of Securities, or otherwise, to the
accomplishment of the Partnership's purposes, and to take or omit to
take such other action in connection with such offer and sale, with
such acquisition, holding or Transfer, or with the business of the
Partnership as may be necessary, desirable or convenient to further the
purposes of the Partnership;
(j) to borrow money and to issue guarantees; and
(k) to carry on any other activities necessary to, in
connection with, or incidental to any of the foregoing or the
Partnership's business.
Section 2
THE GENERAL PARTNER
2.1 MANAGEMENT. The management, control and operation of and the
determination of policy with respect to the Partnership and its affairs shall be
vested exclusively in the General Partner (acting directly or through its duly
appointed agents), which is hereby authorized and empowered on behalf and in the
name of the Partnership, subject to Section 2.2 and the other terms of this
Agreement, to carry out any and all of the objects and purposes of the
Partnership and to perform all acts and enter into and
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perform all contracts and other undertakings that it may in its sole discretion
deem necessary, advisable, convenient or incidental thereto. The General Partner
may exercise on behalf of the Partnership, and may delegate to the Manager, all
of the powers set forth in Section 1.6, PROVIDED, that the management and the
conduct of the activities of the Partnership shall remain the sole
responsibility of the General Partner and all decisions relating to the
selection and disposition of the Partnership's investments shall be made
exclusively by the General Partner in accordance with this Agreement. The
General Partner is hereby authorized to appoint a successor general partner.
2.2 LIMITATIONS ON THE GENERAL PARTNER. The General Partner shall not:
(a) do any act in contravention of any applicable law or
regulation, or any provision of this Agreement or of the Statement;
(b) possess Partnership property for other than a Partnership
purpose;
(c) admit any Person as a general partner of the Partnership
except as permitted by this Agreement and the Partnership Law;
(d) admit any Person as a Limited Partner except as permitted
by this Agreement and the Partnership Law;
(e) Transfer its interest in the Partnership except as
permitted by this Agreement and the Partnership Law; or
(f) permit the registration or listing of interests in the
Partnership on an "established securities market," as such term is used
in Treasury Regulations section 1.7704-1.
2.3 RELIANCE BY THIRD PARTIES. In dealing with the General Partner and
its duly appointed agents (including, without limitation, the Manager), no
Person shall be required to inquire as to the General Partner's or any such
agent's authority to bind the Partnership.
2.4 EXPENSES. All Partnership Expenses and Organizational Expenses
shall be paid by the Partnership.
2.5 LIABILITY OF THE GENERAL PARTNER AND THE MANAGER. (a) GENERAL.
Except as provided in the Partnership Law, the General Partner has the
liabilities of a partner in a partnership without limited partners to (I) the
Partnership and the other Partners and (II) subject to the other provisions of
this Agreement, to Persons other than the Partnership and the other Partners. No
Covered Person shall be liable to the Partnership or any Partner for any act or
omission taken or suffered by such Covered Person in good faith. No Partner
shall be liable to the Partnership or any Partner for any action taken by
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any other Partner. To the extent that, at law or in equity, a Covered Person has
duties and liabilities to the Partnership or to the Partners, such Covered
Person acting under this Agreement or otherwise shall not be liable to the
Partnership or any Partner for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent they expressly
restrict, replace or modify the duties and liabilities of a Covered Person
otherwise existing at law or in equity, are agreed by the Partners to restrict,
replace or modify such other duties and liabilities of such Covered Person.
Except as otherwise expressly provided in this Agreement, the General Partner
shall not be liable for the return of all or any portion of the Limited
Partner's Capital Accounts or Capital Contributions.
(b) RELIANCE. A Covered Person (I) shall incur no liability in acting
upon any signature or writing believed by it to be genuine, (II) may rely on a
certificate signed by an officer of any Person in order to ascertain any fact
with respect to such Person or within such Person's knowledge, and (III) may
rely on an opinion of counsel selected by such Covered Person with respect to
legal matters. Each Covered Person may act directly or through its agents or
attorneys. Each Covered Person may consult with counsel, appraisers, engineers,
accountants, actuaries, auditors and other skilled Persons of its choosing, and
shall not be liable for anything done, suffered or omitted in good faith
reliance upon the advice of any of such Persons. No Covered Person shall be
liable to the Partnership or any Partner for any error of judgment made in good
faith by a responsible officer or officers of the Covered Person. Except as
otherwise provided in this Section 2.5, no Covered Person shall be liable to the
Partnership or any Partner for any mistake of fact or judgment by the Covered
Person in conducting the affairs of the Partnership or otherwise acting in
respect of and within the scope of this Agreement.
(c) DISCRETION. Whenever in this Agreement the General Partner or the
Manager is permitted or required to make a decision (I) in its "sole discretion"
or "discretion" or under a grant of similar authority or latitude, the General
Partner or the Manager, as the case may be, shall be entitled to consider such
interests and factors as it deems appropriate, including, without limitation,
its own interests, or (II) in its "good faith" or under another expressed
standard, the General Partner or the Manager, as the case may be shall act under
such express standard and shall not be subject to any other or different
standard imposed by this Agreement or any other agreement or by relevant
provisions of law or in equity or otherwise. If any questions should arise with
respect to the operation of the Partnership, which are not otherwise
specifically provided for in this Agreement or the Partnership Law, or with
respect to the interpretation of this Agreement, the General Partner is hereby
authorized to make a final determination with respect to any such question and
to interpret this Agreement in good faith, and its determination and
interpretation so made shall be final and binding on all parties.
2.6 CONFLICTS OF INTEREST. (a) POTENTIAL CONFLICTS OF INTEREST. While
the Manager and the General Partner intend to avoid situations involving
conflicts of interest, each
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Limited Partner acknowledges that there may be situations in which the interests
of the Partnership, with respect to a Portfolio Company or otherwise, may
conflict with the interests of the General Partner, the Manager or their
respective Affiliates. Each Limited Partner agrees that the activities of the
General Partner, the Manager, and their respective Affiliates not prohibited by
this Agreement may be engaged in by the General Partner, the Manager or any such
Affiliate, as the case may be, and will not, in any case or in the aggregate, be
deemed a breach of this Agreement or any duty owed by any such Person to the
Partnership or to any Partner.
(b) ACTUAL CONFLICTS OF INTEREST. On any issue involving actual
conflicts of interest not provided for elsewhere in this Agreement, each of the
Manager and the General Partner will be guided by its good faith judgment as to
the best interests of the Partnership and shall take such actions as are
determined by the Manager and the General Partner, as the case may be, to be
necessary or appropriate to ameliorate any such conflict of interest. If the
General Partner or the Manager takes an action in respect of a matter giving
rise to a conflict of interest, neither the General Partner nor the Manager nor
any of their respective Affiliates shall have any liability to the Partnership
or any Limited Partner for actions in respect of such matter taken in good faith
by them.
2.7 TRANSFER OR WITHDRAWAL BY THE GENERAL PARTNER. To the extent
permitted by law,
(a) the General Partner may at its election convert to a
limited partnership, limited liability company or other entity formed
under the laws of the Cayman Islands or any other jurisdiction, or
(b) the General Partner may Transfer its interest as the
general partner of the Partnership to, or be merged with and into, a
limited partnership, limited liability company or other entity formed
under the laws of the Cayman Islands or any other jurisdiction for the
purpose of serving as the general partner of the Partnership,
but only if in any such case the partners of such limited partnership, the
members of such limited liability company or the equity holders of such other
entity, as the case may be, include the Persons that are the general partners or
the controlling equity holders of the General Partner. Upon any such conversion
to such a limited partnership, limited liability company or other entity, or any
such Transfer by or merger of the General Partner to or with such a limited
partnership, limited liability company or other entity, such limited
partnership, limited liability company or other entity shall be deemed to be the
same Person as the General Partner for all purposes of this Agreement. All
Subscription Agreements applicable to the Partnership that are in effect at the
time of any such conversion, Transfer or merger shall thereafter continue in
full force and effect.
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2.8 CERTAIN OTHER RELATIONSHIPS. MMC, the General Partner, the Manager,
and any of their respective Affiliates may organize, sponsor or manage, private
investment funds, including, without limitation, funds having primary investment
objectives and policies substantially the same as those of the Partnership.
Other than as expressly contemplated herein, this Agreement shall not restrict
or limit the activities of MMC, the General Partner, the Manager or any of their
respective Affiliates.
SECTION 3
LIMITED PARTNERS
3.1 LIMITED PARTNERS. Limited Partners shall be divided into groups as
follows:
(a) "EMPLOYER LIMITED PARTNERS" shall be those Limited
Partners designated as such in the Partnership Register.
(b) "PROFITS LIMITED PARTNERS" shall be those Limited Partners
designated as such in the Partnership Register.
(c) "CASH LIMITED PARTNERS" shall be those Limited Partners
designated as such in the Partnership Register.
The Associated Commitments of the Profits Limited Partners shall be associated
on the records of the Partnership with the Capital Commitment of the relevant
Employer Limited Partner.
3.2 NO PARTICIPATION IN MANAGEMENT, ETC. No Limited Partner, in its
capacity as a limited partner of the Partnership, shall take part in the
management or control of the Partnership's affairs, transact any business in the
Partnership's name or have the power to sign documents for or otherwise bind the
Partnership. No Limited Partner shall have the right to vote for the election,
removal or replacement of the General Partner, except that, upon an event
causing the immediate dissolution of the Partnership pursuant to Section 15 of
the Partnership Law or Section 13.1 of this Agreement, the Limited Partners may
vote to unanimously elect one or more new general partners of the Partnership
pursuant to Section 15 of the Partnership Law. No provision of this Agreement
shall obligate any Limited Partner to refer investments to the Partnership or
restrict any investments that a Limited Partner may make.
3.3 LIMITATION OF LIABILITY. Except as may otherwise be provided by the
Partnership Law or in Section 10.1(b) or Section 6.12 or otherwise herein, the
liability of a Limited Partner for any loss of the Partnership shall not exceed
the sum of (A) the amount of its Capital Commitment, if any, (B) its interest in
the undistributed assets of the Partnership, (C) its obligation to make other
payments expressly provided for in this
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Agreement, and (D) its liability under any applicable law, including without
limitation the Partnership Law.
3.4 NO PRIORITY, ETC. No Limited Partner shall have priority over any
other Limited Partner either as to the return of the amount of its Capital
Contribution to the Partnership or, except as provided in Section 6, as to any
allocation of income, gain, deduction or loss.
SECTION 4
INVESTMENTS
4.1 INVESTMENTS IN PORTFOLIO COMPANIES. (a) CO-INVESTMENT. The
Partnership shall co-invest (and, in connection with such co-investments
acquire, hold, manage and Transfer Securities) with the other Co-Investment
Funds in a manner determined in the by the general partner of the Institutional
Fund pursuant to the Institutional Fund Agreement; PROVIDED that in all
instances the Partnership shall co-invest with the other Co-Investment Funds PRO
RATA (allowing for rounding) on the basis of committed capital in the same class
or classes of Securities acquired by the Co-Investment Funds on the same terms
and at the same time as the Co-Investment Funds, except that the Partnership may
purchase from the Co-Investment Funds its PRO RATA share of any portfolio
investment acquired by the Co-Investment Funds prior to a Closing Date at the
acquisition cost to the Co-Investment Funds, plus interest (calculated from the
date the Co-Investment Funds acquired such investment) at a rate per annum equal
to the Prime Rate plus two percent (2%).
(b) REINVESTMENT. Proceeds from the disposition of Portfolio
Investments may, in the sole discretion of the General Partner, be retained and
reinvested by the Partnership to the same extent that the Institutional Fund is
permitted by the Institutional Fund Agreement to reinvest proceeds from the
disposition of such financings and investments.
(c) SPECIAL INVESTMENT VEHICLE. If the General Partner determines in
its sole discretion for legal, tax, regulatory or other reasons that it is
appropriate for any or all of the Partners to participate in one or more
investments, each of which would be a Portfolio Investment if it were made by
the Partnership, through an entity other than the Partnership, the General
Partner may structure the making of such investment or investments outside of
the Partnership by requiring each such Partner, subject to Section 5.2, to
contribute capital to an alternative entity (each, a "SPECIAL INVESTMENT
VEHICLE") that, in lieu of the Partnership, will invest in such investment or
investments. In such event, (i) each such Partner shall make a capital
commitment directly to such Special Investment Vehicle, subject to Section 5.2,
and such capital commitment shall reduce the Capital Commitments of such Partner
to the same extent, and (ii) each Limited Partner shall participate in the
Special Investment Vehicle pursuant to the Power of
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Attorney executed by such Limited Partner, and documentation with respect to
such Special Investment Vehicle shall be executed and delivered on behalf of
each such Limited Partner by the General Partner pursuant to such Power of
Attorney. The economic terms of the organizational documents of any Special
Investment Vehicle will be substantially similar in all material respects to
those of the Partnership.
(d) BLOCKER STRUCTURE. If the General Partner determines, in its sole
discretion, that a Portfolio Investment may give rise to material taxable income
which is (or is taken into account as if it were) effectively connected with the
conduct of a trade or business within the United States to a Limited Partner
subject to tax on such income under section 871(b) or 897 of the Code, the
General Partner may cause the Partnership to invest in such Portfolio Investment
through an entity treated as a corporation for United States federal income tax
purposes, in which event the General Partner may utilize one or more Special
Investment Vehicles and/or subsidiaries of the Partnership.
(e) PARTICIPATION. The Partners shall participate in Portfolio
Investments in proportion to their Available Capital Commitments.
4.2 TEMPORARY INVESTMENTS. The General Partner may invest funds held by
the Partnership in Temporary Investments pending investment in Portfolio
Investments, pending distribution or for any other purpose.
SECTION 5
CAPITAL CONTRIBUTIONS; CAPITAL COMMITMENTS
5.1 CAPITAL CONTRIBUTIONS AND CAPITAL COMMITMENTS OF THE PARTNERS. (a)
CAPITAL CONTRIBUTIONS. Except as otherwise provided herein, each Partner (other
than the Profits Limited Partners) shall make Capital Contributions to the
Partnership in the aggregate amount of the Capital Commitment of such Partner as
set forth opposite its name in the Partnership Register, PROVIDED that, except
as otherwise provided herein, the Partners (other than the Profits Limited
Partners) shall make such Capital Contributions to the Partnership (i) in
respect of Portfolio Investments, PRO RATA based on the Capital Commitments or
Remaining Capital Commitments, as determined with respect to each Portfolio
Investment by the General Partner in its sole discretion, of all the Partners
(other than Defaulting Cash Limited Partners and Limited Partners (including,
without limitation, an Employer Limited Partner in respect of an associated
Profits Limited Partner) excused from making such a Capital Contribution
pursuant to Section 5.2), and (ii) in respect of Organizational Expenses and
Partnership Expenses, PRO RATA based on the Capital Commitments of all the
Partners (other than Defaulting Cash Limited Partners), and PROVIDED FURTHER
that in respect of each Partner, such Partner's aggregate Capital Contributions
shall not exceed such Partner's Capital Commitment.
10
(b) DRAWDOWNS. Except as otherwise provided herein, the Capital
Contributions of each Partner (other than the Profits Limited Partners), shall
be paid in separate Drawdowns, subject to the following terms and conditions:
(i) The General Partner shall provide each Employer Limited
Partner and each Cash Limited Partner with a notice (as the same may be
revised by the General Partner in its sole discretion, the "DRAWDOWN
NOTICE") at least 3 days prior to the date of Drawdown. Each such
Partner shall pay to the Partnership the Capital Contribution of such
Partner as specified in the Drawdown Notice, in cash or other
immediately available funds by the date of Drawdown specified in the
Drawdown Notice.
(ii) Subject to Section 5.2, each Limited Partner (other than
the Profits Limited Partners) shall pay to the Partnership the Capital
Contribution of such Partner in respect of Portfolio Investments,
Partnership Expenses or Organizational Expenses, as the case may be, as
specified in the Drawdown Notice (as the same may be revised), in cash
or other immediately available funds by the date of Drawdown specified
in the Drawdown Notice.
(iii) Each Capital Contribution by an Employer Limited Partner
in respect of a Capital Commitment shall be associated on the records
of the Partnership with the Profits Limited Partner with which such
Capital Commitment is associated.
(c) CREDITORS. The provisions of this Section 5.1 are intended solely
to benefit the Partners and, to the fullest extent permitted by applicable law,
shall not be construed as conferring any benefit upon any creditor of the
Partnership (and no such creditor shall be a third party beneficiary of this
Agreement), and no Partner shall have any duty or obligation to any creditor of
the Partnership to make any Capital Contributions or to cause the General
Partner to deliver a Drawdown Notice.
5.2 EXCUSED INVESTMENTS. The General Partner may, in its sole
discretion, excuse, in whole or in part, any Limited Partner from participation
in any Portfolio Investment if the General Partner, in its sole discretion, has
determined that any such participation (i) may constitute a conflict of interest
for such Limited Partner, the Partnership or any other Co-Investment Fund, (ii)
may subject such Limited Partner, the Partnership or any other Co-Investment
Fund to a material tax or material regulatory requirement to which it or they
would not otherwise be subject, or which is reasonably likely to materially
increase any such material tax or material regulatory requirement beyond what it
would otherwise have been, or (iii) may cause a Material Adverse Effect. In the
event that, pursuant to the immediately preceding sentence, the General Partner
excuses a Profits Limited Partner with respect to participation in a Portfolio
Investment, the Associated Contribution of the Employer Limited Partner
associated with such Profits Limited Partner shall be excused. For the avoidance
of doubt, there will be no reduction
11
in the Remaining Associated Commitment of an Employer Limited Partner with
respect to an excused Profits Limited Partner associated with such Employer
Limited Partner.
5.3 DEFAULTING LIMITED PARTNERS. (a) CASH LIMITED PARTNERS. If any Cash
Limited Partner fails to contribute, in a timely manner, any portion of the
Capital Commitment required to be contributed by such Cash Limited Partner
hereunder or pursuant to such Cash Limited Partner's Subscription Agreement, or
any portion of the amounts determined pursuant to Section 10.1 to be required to
be contributed by such Cash Limited Partner, and any such failure continues for
ten Business Days after receipt of written notice thereof from the General
Partner (a "CASH LIMITED PARTNER DEFAULT"), then such Cash Limited Partner (a
"DEFAULTING CASH LIMITED PARTNER") may be designated by the General Partner as
in default and shall thereafter be subject to the provisions of this Section
5.3. The General Partner, in its sole discretion, may choose not to designate
any such Cash Limited Partner as a Defaulting Cash Limited Partner and may agree
to waive or permit the cure of all or part of any default by such Defaulting
Cash Limited Partner, subject to such conditions as the General Partner and the
Defaulting Cash Limited Partner may agree upon. In the event that a Cash Limited
Partner becomes a Defaulting Cash Limited Partner, (i) such a Defaulting Cash
Limited Partner's Remaining Capital Commitment (the "DEFAULTED COMMITMENTS")
shall be deemed to be zero (except that the General Partner, the Employer
Limited Partners and the Cash Limited Partners that are not Defaulting Cash
Limited Partners shall have an option, exercisable within ten Business Days
following the date of the notice referred to in the first sentence of this
Section 5.3(a), to assume the Defaulted Commitments, if any, of the Defaulting
Cash Limited Partner, such Defaulted Commitments to be assumed in proportion to
the Capital Commitments and/or Associated Commitments, as the case may be, of
the Partners exercising such option (the "EXERCISING PARTNERS")), (ii) such
Defaulting Cash Limited Partner shall be entitled to receive only one-half of
the distributions that it would have been entitled to receive had it not become
a Defaulting Cash Limited Partner, and the other one-half of such distributions
(the "FORFEITED DISTRIBUTIONS") shall be made in accordance with this Section
5.3(a), and (iii) such Defaulting Cash Limited Partner shall not have a right to
receive any distributions with respect to any Portfolio Investment for which
such Defaulting Cash Limited Partner failed to contribute when due any portion
of such Defaulting Cash Limited Partner's Capital Commitment or any Portfolio
Investment made on or after such date. The Forfeited Distributions of a
Defaulting Cash Limited Partner pursuant to this Section 5.3(a) shall be applied
as follows when and as amounts become distributable: FIRST, to the Partnership
in an amount equal to the Organizational Expenses and Partnership Expenses, in
each case as estimated in good faith by the Manager, attributable to such
Defaulting Cash Limited Partner's Capital Commitment for the period from the
date of Cash Limited Partner Default through the end of the Term, and SECOND, to
the Exercising Partners in accordance with the respective Capital Commitments
and/or Associated Commitments, as the case may be, of such Partners, or, if
there are no Exercising Partners, to all Partners other than any Limited
Partner, Cash Limited Partner, or Profits Limited Partner in default in
accordance with their respective
12
Capital Commitments and/or Associated Commitments, as the case may be. In
addition, such Defaulting Cash Limited Partner shall contribute to the
Partnership an amount equal to the contribution, if any, that such Defaulting
Cash Limited Partner would be required to make to the Partnership pursuant to
Section 6.11(d), Section 6.12 or Section 10.1(b) if all of the assets of the
Partnership were liquidated as of the date of Cash Limited Partner Default for
their Value and all of the liabilities of the Partnership were satisfied in
accordance with their terms and the Partnership was dissolved in accordance with
Section 13. Notwithstanding any other provision of this Section 5.3(a), the
obligations of any Defaulting Cash Limited Partner to the Partnership hereunder
shall not be extinguished as a result of the operation of this Section 5.3(a).
The General Partner shall have the right, in its sole discretion, to pursue all
remedies at law or in equity available to it with respect to the default of a
Defaulting Cash Limited Partner.
(b) PROFITS LIMITED PARTNERS. If any Profits Limited Partner (A) fails
to make, in a timely manner, any contributions required to be made by such
Limited Partner pursuant to Section 6.12 or Section 10.1(b), or (B) fails to
defer compensation at the time and in the amount required by the MMC Capital
Plan, and any such failure continues for ten Business Days after receipt of
written notice thereof from the General Partner (a "PROFITS LIMITED PARTNER
DEFAULT"), then such Limited Partner (a "DEFAULTING PROFITS LIMITED PARTNER")
may be designated by the General Partner as in default and shall thereafter be
subject to the provisions of this Section 5.3(b). To the extent permitted by the
MMC Capital Plan, the General Partner, in its sole discretion, may choose not to
designate any Profits Limited Partner as a Defaulting Profits Limited Partner
and may agree to waive or permit the cure of all or part of any default by such
Defaulting Profits Limited Partner, subject to such conditions as the General
Partner and the Defaulting Profits Limited Partner may agree upon. Except as may
be otherwise provided in this Agreement, in the event that a Profits Limited
Partner becomes a Defaulting Profits Limited Partner, (i) such a Defaulting
Profits Limited Partner's interest in the Partnership attributable to such
Defaulting Profits Limited Partner's unfunded deferral under the MMC Capital
Plan would be purchased by the relevant Employer Limited Partner or its designee
for $1.00, and (ii) such Defaulting Profits Limited Partner shall not have a
right to receive any distributions with respect to any Portfolio Investment made
on or after the date on which such Defaulting Profits Limited Partner failed to
make deferrals when due under the MMC Capital Plan. For the avoidance of doubt,
amounts deferred pursuant to the MMC Capital Plan by a Profits Limited Partner
but not yet invested in Portfolio Investments at the time of a Profits Limited
Partner Default by such Profits Limited Partner shall not be invested in
Portfolio Investments. In addition, such Defaulting Profits Limited Partner
shall contribute to the Partnership an amount equal to the contribution, if any,
that such Defaulting Profits Limited Partner would be required to make to the
Partnership pursuant to Section 6.12 or Section 10.1(b) if all of the assets of
the Partnership were liquidated as of the date of Profits Limited Partner
Default for their Value and all of the liabilities of the Partnership were
satisfied in accordance with their terms and the Partnership was dissolved in
accordance with Section 13, and such Defaulting Profits Limited Partner's
13
contribution in respect of Section 6.12 shall be distributed to its associated
Employer Limited Partner. In addition, the Defaulting Profits Limited Partner
may be required to purchase the portion of the interest of its associated
Employer Limited Partner in the Partnership attributable to any outstanding
Advance made by such Employer Limited Partner, in accordance with the provisions
of sections 8.2 and 8.3 of the MMC Capital Plan. Notwithstanding any other
provision of this Section 5.3(b), the obligations of any Defaulting Profits
Limited Partner to the Partnership hereunder shall not be extinguished as a
result of the operation of this Section 5.3(b). The General Partner shall have
the right, in its sole discretion, to pursue all remedies at law or in equity
available to it with respect to the Profits Limited Partner Default of a
Defaulting Profits Limited Partner.
5.4 TERMINATION OF EMPLOYMENT (OTHER THAN TIER 1 LIMITED PARTNERS).
(a) TERMINATION IN THE EVENT OF DEATH, TOTAL DISABILITY OR RETIREMENT. If a Cash
Limited Partner (other than a Tier 1 Cash Limited Partner) or a Profits Limited
Partner (other than a Tier 1 Profits Limited Partner) dies or is terminated as
an employee or consultant of an Employer Limited Partner by reason of such
Limited Partner's Total Disability or Retirement, (i) such Cash Limited Partner
or Profits Limited Partner (or his or her estate or legal representative) shall
retain his or her interest in the Partnership, PROVIDED that such Limited
Partner (or his or her estate or legal representative) may at any time request
that the General Partner (or in the case of a Profits Limited Partner, the
Employer Limited Partner associated with such terminated Profits Limited
Partner) purchase, or designate a purchaser for, all or a portion of the
interest in the Partnership of such Limited Partner, and (ii) such Limited
Partner's obligation to make future Capital Contributions to the Partnership in
respect of its Capital Commitment to fund Portfolio Investments made after the
date of such request shall terminate, except that the obligation to make Capital
Contributions to fund Portfolio Investments by a Limited Partner whose
employment is termination by reason of Retirement shall not terminate, unless so
requested by such Limited Partner (or his or her estate or legal
representative), (iii) any capital contributed to the Partnership by such
Limited Partner but not yet invested in a Portfolio Investment shall be
distributed (net of any amounts that would be deductible if such capital was
distributed pursuant to clause (iv) below) to such Limited Partner (or his
estate) and (IV) if such Limited Partner retains his or her interest but his or
her obligation to contribute capital to the Partnership is terminated, the
Partnership shall be permitted to deduct from Distributable Cash attributable to
such Limited Partner's interest in the Partnership amounts equal to the accrued
and unpaid and/or anticipated expenses of the Partnership, including without
limitation any amounts payable upon dissolution or to fund indemnification
obligations pursuant to Section 6.11(d), Section 6.12 or Section 10.1(b). The
General Partner and the affected Employer Limited Partner may grant any such
requests made pursuant to clauses (i) or (ii) above, in whole or in part, but
have no obligation to grant any such request. If the General Partner or the
affected Employer Limited Partner grants the request that an interest be
purchased, the General Partner or the affected Employer Limited Partner, as the
case may be, or such Person's designee, shall provide notice no later than 90
days after such request is made and shall pay to such
14
Limited Partner an amount equal to the Value of such Limited Partner's interest
in the Partnership (or a greater amount agreed to by the General Partner or the
Employer Limited Partner, as the case may be) within 60 days of such notice.
Without duplication, the obligations of such terminated Limited Partner pursuant
to Section 6.11(d), Section 6.12 and Section 10.1(b) shall survive with the same
effect as if such terminated Limited Partner had retained its interest in the
Partnership.
(b) OTHER TERMINATION. If a Cash Limited Partner (other than a Tier 1
Cash Limited Partner) or a Profits Limited Partner (other than a Tier 1 Profits
Limited Partner) is terminated as an employee of or consultant to an Employer
Limited Partner for a reason other than death, Total Disability or Retirement,
the General Partner (or in the case of such a terminated Profits Limited
Partner, the Employer Limited Partner associated with such terminated Profits
Limited Partner) will have the right, but not the obligation, to purchase or
designate a purchaser for the interest in the Partnership of such Limited
Partner at any time after such termination. If such termination is an
involuntary termination without an MMC Capital Cause Determination or is a
voluntary termination, the purchase price for such Limited Partner's interest
shall be the fair market value of such interest, which shall be as mutually
agreed by the parties, provided that in the absence of such agreement, fair
market value shall be determined by an independent appraiser selected by the
General Partner (or the Employer Limited Partner, as the case may be) and
approved by the Limited Partner, which approval shall not be unreasonably
withheld. The cost of such appraisal shall be borne by the General Partner (or
the Employer Limited Partner, as the case may be). If the employment of a
Limited Partner is terminated due to an involuntary termination with an MMC
Capital Cause Determination, the purchase price for such Limited Partner's
interest in the Partnership shall be the lesser of (i) an amount equal to the
aggregate Capital Contributions made by such Limited Partner to the Partnership
and (ii) the Value of such interest. Fair market value as of any date shall be
determined as if the Partnership had been liquidated in an orderly manner as of
such date. Upon any such purchase of a Limited Partner's interest in the
Partnership, such Limited Partner shall have no further interest in the
Partnership. In the absence of any such purchase of a Limited Partner's interest
in the Partnership, such Limited Partner shall remain a Limited Partner in the
Partnership and shall remain subject to all provisions of this Agreement,
PROVIDED that such Limited Partner shall have no rights under Section 8.2(b). In
addition, unless the General Partner in its sole discretion determines
otherwise, the obligation of such a terminated Cash Limited Partner to make
further Capital Contributions to the Partnership in respect of his or her
Capital Commitment to fund Portfolio Investments made after the date of such
Cash Limited Partner's termination will terminate, PROVIDED that if such
obligation is not to be so terminated, notice that such obligation will continue
will be given to such Cash Limited Partner within 180 days of the termination of
employment of such
15
Cash Limited Partner. In addition, unless the General Partner in its sole
discretion determines otherwise, such terminated Cash Limited Partner or Profits
Limited Partner shall contribute to the Partnership (or the Partnership shall
withhold from distributions otherwise due to such Cash Limited Partner or
Profits Limited Partner) an amount equal to the contribution, if any, that such
terminated Limited Partner would be required to make to the Partnership pursuant
to Section 6.11(d), Section 6.12 or Section 10.1(b) if all of the assets of the
Partnership were liquidated as of the date of termination for their Value and
all of the liabilities of the Partnership were satisfied in accordance with
their terms and the Partnership was dissolved in accordance with Section 13.
Without duplication, the obligations of such terminated Limited Partner pursuant
to Section 6.11(d), Section 6.12 and Section 10.1(b) shall survive with the same
effect as if such terminated Limited Partner had retained its interest in the
Partnership.
5.5 TERMINATION OF A TIER 1 LIMITED PARTNER. (a) TERMINATION IN THE
EVENT OF DEATH, TOTAL DISABILITY OR RETIREMENT. If a Tier 1 Limited Partner dies
or is terminated as an employee of or consultant to an Employer Limited Partner
by reason of such Tier 1 Limited Partner's Total Disability or Retirement, such
Tier 1 Limited Partner shall retain his or her interest in the Partnership,
PROVIDED that such Tier 1 Limited Partner or his or her estate or legal
representative may at any time request that the General Partner (or in the case
of a Tier 1 Profits Limited Partner, its associated Employer Limited Partner)
purchase or designate a purchaser for, all or a portion of the interest in the
Partnership of such Tier 1 Limited Partner. The General Partner and the affected
Employer Limited Partner may grant such request in whole or in part, but have no
obligation to do so. If the General Partner or the affected Employer Limited
Partner grants the request that an interest be purchased, the General Partner or
the affected Employer Limited Partner, as the case may be, or such Person's
designee shall provide notice no later than 90 days after such request is made,
and shall pay to such Limited Partner an amount equal to the Value of such
Limited Partner's interest in the Partnership within 60 days of such notice. In
addition, a Tier 1 Cash Limited Partner or his or her estate or legal
representative may elect to terminate such Tier 1 Cash Limited Partner's
obligation to make future Capital Contributions to the Partnership, in respect
of any amount of his or her Capital Commitment which exceeds $2.5 million, to
fund Portfolio Investments made after the date of such election. The obligations
of such terminated Limited Partner pursuant to Section 6.11(d), Section 6.12 and
Section 10.1(b) shall survive with the same effect as if such terminated Limited
Partner had retained its interest in the Partnership.
(b) OTHER TERMINATION. If a Tier 1 Limited Partner is terminated as an
employee or consultant for a reason other than death, Total Disability or
Retirement, the General Partner (or in the case of a Tier 1 Profits Limited
Partner, the Employer Limited Partner associated with such Tier 1 Profits
Limited Partner) may, but only with the consent of such Tier 1 Limited Partner,
purchase or designate a purchaser for the interest in the Partnership of such
Tier 1 Limited Partner at a purchase price that is mutually agreed upon but
which shall not be less than the Value of such interest. In addition, unless
both the General Partner and a terminated Tier 1 Cash Limited Partner agree
otherwise, the Remaining Capital Commitments of such Tier 1 Cash Limited Partner
shall be reduced to zero and such terminated Tier 1 Cash Limited Partner shall
have no further obligation to
16
make Capital Contributions to the Partnership. Without duplication, the
obligations of such terminated Tier 1 Cash Limited Partner pursuant to Section
6.11(d), Section 6.12, and Section 10.1(b), as applicable, shall survive with
the same effect as if such terminated Limited Partner had retained its interest
in the Partnership. Upon termination of the employment of a Tier 1 Limited
Partner, such Tier 1 Limited Partner or representative thereof, can require (i)
that Distributable Cash apportioned to such Tier 1 Limited Partner be
distributed promptly, and (ii) that proceeds from the disposition of Portfolio
Investments apportioned to such Limited Partner shall not be reinvested pursuant
to Section 4.1(b).
(c) COMMITMENTS. In the event the Capital Commitments of any Tier 1
Cash Limited Partner are reduced pursuant to Section 5.5, the Employer Limited
Partner will assume such Capital Commitments to the extent required to ensure
that the Capital Commitments of the Tier 1 Cash Limited Partners, aggregated
with the Capital Commitments of the Employer Limited Partner associated with the
Tier 1 Profits Limited Partners and with the capital commitments of the Key
Employees and their estate planning vehicles to Trident Capital III, L.P., equal
at least $10 million.
5.6 SPECIAL CONSEQUENCES OF TERMINATION OF ANY PROFITS LIMITED PARTNER.
If, for any reason, a Profits Limited Partner is terminated as an employee of or
consultant to its associated Employer Limited Partner, there are additional
consequences as set forth in the MMC Capital Plan. Such Profits Limited Partner
will have an interest only in Portfolio Investments that were made during the
period when the Profits Limited Partner made deferrals when due under the MMC
Capital Plan. The Employer Limited Partner associated with such terminated
Profits Limited Partner will purchase the portion of such Profits Limited
Partner's interest in the Partnership attributable to such terminated Profits
Limited Partner's unpaid deferral under the MMC Capital Plan for $1.00, and such
terminated Profits Limited Partner's obligation to make further deferrals under
the MMC Capital Plan will be reduced to zero. If, at the time the employment of
a Profits Limited Partner with MMC Capital is terminated, (i) such Profits
Limited Partner has not deferred an amount under the MMC Capital Plan at least
equal to the amount of such Profits Limited Partner's Associated Commitment, and
(ii) the amount, if any, of the Capital Contributions of such Employer Limited
Partner in respect of the associated Profits Limited Partner's interest in the
Partnership exceeds the amount such Profits Limited Partner has deferred under
the MMC Capital Plan, then such Employer Limited Partner may, in its discretion,
require the Profits Limited Partner to purchase, for cash, the portion of such
Employer Limited Partner's interest in the Partnership attributable to such
excess Capital Contributions of such Employer Limited Partner in accordance with
the provisions of sections 8.2 and 8.3 of the MMC Capital Plan.
5.7 FURTHER ACTIONS. To the extent necessary in the sole discretion of
the General Partner, the General Partner shall cause this Agreement to be
amended, without the need for any further act, vote or approval of any other
Partner or Person, to reflect as
17
appropriate the occurrence of any of the transactions referred to in this
Section 5 or in Section 11 as promptly as is practicable after such occurrence.
SECTION 6
CAPITAL ACCOUNTS; DISTRIBUTIONS; ALLOCATIONS; WITHHOLDING
6.1 CAPITAL ACCOUNTS. There shall be established on the books and
records of the Partnership a capital account (a "CAPITAL ACCOUNT") for each
Partner.
6.2 ADJUSTMENTS TO CAPITAL ACCOUNTS. As of the last day of each Period,
the balance in each Partner's Capital Account shall be adjusted by (A)
increasing such balance by (i) such Partner's allocable share of each item of
the Partnership's income and gain for such Period (allocated in accordance with
Section 6.9) and (ii) the Capital Contributions, if any, made by such Partner
during such Period and (B) decreasing such balance by (i) the amount of cash or
the Value of Securities or other property distributed or deemed distributed to
such Partner pursuant to Section 6 or Section 13 and (ii) such Partner's
allocable share of each item of the Partnership's deduction or loss for such
Period (allocated in accordance with Section 6.10). Each Partner's Capital
Account shall be further adjusted with respect to any special allocations or
adjustments pursuant to this Agreement.
6.3 DISTRIBUTIONS. Distributable Cash attributable to any Portfolio
Investment shall initially be apportioned among the Partners in proportion to
their Sharing Percentages for such Portfolio Investment. Distributable Cash not
attributable to a Portfolio Investment shall be apportioned among the Partners
(other than the Employer Limited Partners) in proportion to their respective
Capital Contributions giving rise to the Distributable Cash (or, in the case of
a Profits Limited Partner, the Capital Contributions of the Employer Limited
Partner associated with such Profits Limited Partner). Except as otherwise
provided herein, Distributable Cash apportioned to the General Partner shall be
distributed to the General Partner and Distributable Cash apportioned to a Cash
Limited Partner shall be distributed to such Cash Limited Partner. Except as
otherwise provided herein, Distributable Cash apportioned to a Profits Limited
Partner shall be distributed as follows:
FIRST, 100% to the Employer Limited Partner associated with
such Profits Limited Partner until the cumulative amount distributed to
such Employer Limited Partner in respect of such Profits Limited
Partner pursuant to this paragraph First is equal to the sum of (i) the
aggregate Capital Contributions of such Employer Limited Partner
associated with such Profits Limited Partner used to fund the cost of
such Portfolio Investment and each other Portfolio Investment
previously disposed of, or used to fund Partnership Expenses and
Organizational Expenses, and (ii) such additional amount as is
necessary to provide such
18
Employer Limited Partner with a rate of return on such Capital
Contributions equal to the AFR Rate (such sum, the "AFR RETURN"); and
SECOND, to such Profits Limited Partner.
6.4 TAX DISTRIBUTIONS. Notwithstanding Section 6.3, the Partnership
may, either prior to, together with or subsequent to any distribution of
Distributable Cash pursuant to Section 6.3 with respect to a Portfolio
Investment, make distributions to all Partners (other than any Defaulting Cash
Limited Partners or Defaulting Profits Limited Partners), regardless of their
tax status, in amounts intended to enable such Partners (or any Person whose tax
liability is determined by reference to the income of any such Partner) to
discharge their United States federal, state and local (and, in the discretion,
of the General Partner, non-U.S.) income tax liabilities arising from the
allocations and distributions made (or to be made) pursuant to this Agreement
with respect to such Portfolio Investment. The amount distributable pursuant to
this Section 6.4 shall be determined by the General Partner in its sole
discretion, taking into account the maximum combined United States federal, New
York State and New York City tax rates applicable to individuals or corporations
(whichever is higher) on ordinary income and capital gain (taking into account
the applicable holding period), as the case may be, and the amounts of ordinary
income and capital gain allocated to the Partners pursuant to this Agreement,
and otherwise based on such reasonable assumptions as the General Partner
determines in good faith to be appropriate (and the assumptions described in
this sentence shall be applied equally to each Partner regardless of its tax
status). The amount distributable to any Partner pursuant to any clause of
Section 6.3 shall be reduced by the amount distributed to such Partner pursuant
to this Section 6.4, and the amount so distributed under this Section 6.4 shall
be deemed to have been distributed to the extent of such reduction pursuant to
such clause of Section 6.3 for purposes of making the calculations required by
Section 6.3.
6.5 OTHER PROVISIONS. (a) AVAILABLE ASSETS. Notwithstanding any other
provision of this Agreement, distributions shall be made only to the extent of
Available Assets and in compliance with the Partnership Law.
(b) DISPOSITION OF PORTION OF PORTFOLIO INVESTMENT. If less than all of
the Portfolio Investments in a Portfolio Company are disposed of by the
Partnership, the portion disposed of and the portion retained shall for purposes
of Sections 6 and 10 (including for purposes of applying the definitions used
therein) be deemed to be two separate Portfolio Investments. Any Capital
Contributions, allocations or distributions made with respect to such Portfolio
Investment shall be allocated between the portion disposed of and the portion
retained PRO RATA in proportion to their respective purchase prices.
(c) DEFERRAL OF DISTRIBUTIONS IN CONNECTION WITH OUTSTANDING ADVANCES.
Notwithstanding paragraph Second of Section 6.3, if an Employer Limited Partner
shall
19
have notified the Partnership that, pursuant to the MMC Capital Plan, an Advance
has been made to any Profits Limited Partner associated with such Employer
Limited Partner, then an amount equal to the amount of such Advance shall be
retained in the Partnership and not distributed to such Profits Limited Partner
until such Employer Limited Partner shall have notified the Partnership that the
Advance is no longer outstanding, at which time such amount (together with any
earnings thereon) shall be distributed to such Profits Limited Partner. Any
amount so withheld shall be invested by the Partnership in Temporary Investments
for the account of the holder of such Profits Limited Partner.
6.6 DISTRIBUTIONS OF SECURITIES. Except in connection with the
dissolution and liquidation of the Partnership as provided in Section 13, the
General Partner shall not make any distributions in kind except to the extent
the general partner of the Institutional Fund is permitted to make distributions
in kind as provided in the Institutional Fund Agreement and as set forth herein.
In the event that a distribution of Securities is made, such Securities shall be
deemed to have been sold at their Value and the proceeds of such sale shall be
deemed to have been distributed to the Partners for all purposes of this
Agreement.
6.7 NEGATIVE CAPITAL ACCOUNTS. Except as provided by Section 6.12, no
Limited Partner shall, and except as otherwise required by law the General
Partner shall not, be required to make up a negative balance in its Capital
Account.
6.8 NO WITHDRAWAL OF CAPITAL. Except as otherwise expressly provided
herein, no Partner shall have the right to withdraw capital from the Partnership
or to receive any distribution of or return on such Partner's Capital
Contributions.
6.9 ALLOCATIONS. Each item of income, gain, loss and deduction of the
Partnership (determined in accordance with U.S. tax principles as applied to the
maintenance of capital accounts) shall be allocated among the Capital Accounts
of the Partners with respect to each Period as of the end of such Period in a
manner that as closely as possible gives economic effect to the provisions of
Sections 6 and 13 and the other relevant provisions of this Agreement.
6.10 TAX MATTERS. Except as otherwise provided herein, the income,
gains, losses, credits and deductions recognized by the Partnership shall be
allocated among the Partners, for United States federal, state and local income
tax purposes, to the extent permitted under the Code and the Treasury
Regulations, in the same manner that each such item is allocated to the
Partners' Capital Accounts. Notwithstanding the foregoing, the General Partner
shall have the power in its sole discretion to make such allocations for United
States federal, state and local income tax purposes as may be necessary to
maintain substantial economic effect, or to insure that such allocations are in
accordance with the interests of the Partners in the Partnership, in each case
within the meaning of the Code and the Treasury Regulations. Tax credits shall
be allocated in good faith by
20
the General Partner. All matters concerning allocations for United States
federal, state and local and non-U.S. income tax purposes, including, without
limitation, accounting procedures, not expressly provided for by the terms of
this Agreement shall be determined in good faith by the General Partner. The
General Partner may, in its sole discretion, cause the Partnership to make the
election under section 754 of the Code. The General Partner is hereby designated
as the "tax matters partner" of the Partnership, as provided in the Treasury
Regulations pursuant to section 6231 of the Code (and any similar provisions
under any other state or local or non-U.S. tax laws). Each Partner hereby
consents to such designation and agrees that upon the request of the General
Partner it will execute, certify, acknowledge, deliver, swear to, file and
record at the appropriate public offices such documents as may be necessary or
appropriate to evidence such consent. Either the General Partner shall have
executed and filed a U.S. Internal Revenue Service Form 8832 prior to the date
hereof electing to classify the Partnership as a partnership for U.S. federal
income tax purposes pursuant to section 301.7701-3 of the Treasury Regulations
as of a date no later than the date hereof, or the General Partner shall timely
execute and file such Form 8832 on or after the date hereof electing to classify
the Partnership as a partnership for United States federal income tax purposes
as of a date no later than the date hereof, and the General Partner is hereby
authorized to execute and file such Form for all of the Partners. The General
Partner shall not subsequently elect to change such classification. The General
Partner is hereby authorized to execute and file for all of the Partners any
comparable form or document required by any applicable United States state or
local tax law in order for the Partnership to be classified as a partnership
under such tax law. The Partnership shall not participate in the establishment
of an "established securities market" (within the meaning of section 1.7704-1(b)
of the Treasury Regulations) or a "secondary market or the substantial
equivalent thereof" (within the meaning of section 1.7704-1(c) of the Treasury
Regulations) or, in either case, the inclusion of interests in the Partnership
thereon.
6.11 WITHHOLDING TAXES. (a) AUTHORITY TO WITHHOLD; TREATMENT OF
WITHHELD TAX. Notwithstanding any other provision of this Agreement, each
Partner hereby authorizes the Partnership to withhold and to pay over, or
otherwise pay, any withholding or other taxes payable by the Partnership or any
of its Affiliates (pursuant to the Code or any provision of United States
federal, state, or local or non-U.S. tax law) with respect to such Partner or as
a result of such Partner's participation in the Partnership (including as a
result of a distribution in kind). If and to the extent that the Partnership
shall be required to withhold or pay any such withholding or other taxes, such
Partner shall be deemed for all purposes of this Agreement to have received a
payment from the Partnership as of the time such withholding or other tax is
required to be paid, which payment shall be deemed to be a distribution of
Distributable Cash pursuant to the relevant clause of Section 6.3 with respect
to such Partner's interest in the Partnership to the extent that such Partner
(or any successor to such Partner's interest in the Partnership) would have
received a cash distribution but for such withholding. To the extent that such
deemed payment exceeds the cash distribution that such Partner would have
received at
21
such time but for such withholding, the General Partner shall notify such
Partner as to the amount of such excess and such Partner shall make a prompt
payment to the Partnership of such amount by wire transfer. The Partnership may
hold back from any distribution in kind property having a Value equal to the
amount of taxes withheld or otherwise paid until the Partnership has received
such payment.
(b) WITHHOLDING TAX RATE. Any withholdings referred to in this Section
6.11 shall be made at the maximum applicable statutory rate under the applicable
tax law unless the General Partner shall have received an opinion of counsel or
other evidence, satisfactory to the General Partner, to the effect that a lower
rate is applicable, or that no withholding is applicable.
(c) WITHHOLDING FROM DISTRIBUTIONS TO THE PARTNERSHIP. In the event
that the Partnership receives a distribution or payment from or in respect of
which tax has been withheld, the Partnership shall be deemed to have received
cash in an amount equal to the amount of such withheld tax, and each Partner
shall be deemed to have received as a distribution of Distributable Cash
pursuant to the relevant clause of Section 6.3 the portion of such amount that
is attributable to such Partner's interest in the Partnership as equitably
determined by the General Partner. To the extent that such deemed distribution
exceeds the cash distribution that such Partner would have received but for such
withholding, the General Partner shall notify such Partner as to the amount of
such excess and such Partner shall make a prompt payment to the Partnership of
such amount by check or wire transfer, which payment shall not constitute a
Capital Contribution and, consequently, shall not reduce the Remaining Capital
Commitment or increase the Capital Account of such Partner. In the event that
the Partnership anticipates receiving a distribution or payment from which tax
will be withheld in kind, the General Partner may elect to prevent such in-kind
withholding by paying such tax in cash and may require each Partner in advance
of such distribution to make a prompt payment to the Partnership by wire
transfer of the amount of such tax attributable to such Partner's interest in
the Partnership as equitably determined by the General Partner, which payment
shall not constitute a Capital Contribution and, consequently, shall not reduce
the Remaining Capital Commitment or increase the Capital Account of such
Partner.
(d) INDEMNIFICATION. Each Partner shall, to the fullest extent
permitted by applicable law, indemnify and hold harmless the Partnership and the
General Partner against all claims, liabilities and expenses of whatever nature
relating to the Partnership's or the General Partner's obligation to withhold
and to pay over, or otherwise pay, any withholding or other taxes payable by the
Partnership or the General Partner as a result of such Partner's participation
in the Partnership. In addition, the Partnership shall, hereby or pursuant to a
separate indemnification agreement and to the fullest extent permitted by
applicable law, indemnify and hold harmless each Portfolio Company and any other
Covered Person who is or who is deemed to be the responsible withholding agent
for United States federal, state or local or non-U.S. income tax purposes (other
than any
22
Covered Person that is indemnified by each Partner pursuant to the previous
sentence) against all claims, liabilities and expenses of whatever nature
relating to such Portfolio Company's or Covered Person's obligation to withhold
and to pay over, or otherwise pay, any withholding or other taxes payable by
such Portfolio Company or Covered Person, as the case may be, as a result of the
participation in the Partnership of a Partner (other than such Covered Person).
If, pursuant to a separate indemnification agreement or otherwise, the
Partnership shall indemnify or be required to indemnify any Portfolio Company or
Covered Person against any claims, liabilities or expenses of whatever nature
relating to such Portfolio Company's or Covered Person's obligation to withhold
and to pay over, or otherwise pay, any withholding or other taxes payable by
such Portfolio Company or Covered Person as a result of any Partner's
participation in the Partnership, such Partner shall pay to the Partnership the
amount of the indemnity paid or required to be paid.
6.12 CLAWBACK BY PROFITS LIMITED PARTNERS. If, as of the date of the
dissolution of the Partnership, prior to the application of this Section 6.12,
the aggregate amount distributed pursuant to Section 6 or Section 13 to an
Employer Limited Partner with respect to any Profits Limited Partner associated
with such Employer Limited Partner is not sufficient to provide the AFR Return
attributable to such Profits Limited Partner, such Profits Limited Partner shall
contribute to the Partnership an amount that equals the amount of such shortfall
and the Partnership shall, subject to Section 6.11 and applicable law,
distribute such amount to such Employer Limited Partner.
6.13 FINAL DISTRIBUTION. The final distributions following dissolution
shall be made in accordance with the provisions of Section 13.2.
SECTION 7
THE MANAGER
The Partnership hereby appoints the Manager, and the Manager hereby
agrees, to act as the investment advisor to and manager of the Partnership, and
pursuant to such appointment:
(a) The Manager shall manage the operations of the Partnership, shall
have the right to execute and deliver documents on behalf of the Partnership in
lieu of the General Partner and shall have discretionary authority with respect
to investments of the Partnership, including, without limitation, the authority
to evaluate, monitor, exercise voting rights, liquidate and take other
appropriate action with respect to investments on behalf of the Partnership,
PROVIDED that the management and the conduct of the activities of the
Partnership shall remain the sole responsibility of the General Partner and all
decisions relating to the selection and disposition of the Partnership's
investments shall be made exclusively by the General Partner in accordance with
this Agreement.
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Appointment of the Manager by the Partnership shall not relieve the General
Partner from its obligations to the Partnership hereunder or under the
Partnership Law.
(b) The Manager shall act in conformity with this Agreement and with
the instructions and directions of the General Partner.
The engagement by the Partnership of the Manager contemplated hereby may be set
forth in a separate management agreement specifying in further detail the rights
and duties of the Manager. Such engagement, whether or not set forth in such a
management agreement, shall terminate upon the filing of a notice of dissolution
of the Partnership as described in Section 13.4(b).
SECTION 8
BANKING; ACCOUNTING; BOOKS AND RECORDS;
ADMINISTRATIVE SERVICES
8.1 BANKING. All funds of the Partnership may be deposited in such
bank, brokerage or money market accounts as shall be established by the General
Partner. Withdrawals from and checks drawn on any such account shall be made
upon such signature or signatures as the General Partner may designate. All
securities held by the Partnership shall be held by a custodian or at a bank or
other secure location selected by the General Partner.
8.2 MAINTENANCE OF BOOKS AND RECORDS; ACCESS. (a) MAINTENANCE. The
General Partner shall keep or cause to be kept complete records and books of
account. Such books and records shall be maintained in accordance with the
provisions of the Institutional Fund Agreement applicable to the records and
books of account of the Institutional Fund as if such provisions were applicable
to the Partnership. The books and records required by law to be maintained at
the registered office of the Partnership shall be so maintained pursuant to the
provisions of the Partnership Law. In particular, the General Partner shall
maintain, or cause to be maintained, at the registered office of the
Partnership, in accordance with the Partnership Law, the Partnership Register
containing the name and address, amount and date of the contribution or
contributions of each Partner and the amount and date of any payment
representing a return of any part of the contributions of any Partner, which
register shall be updated within twenty-one Business Days of any change in the
particulars therein. In accordance with the Partnership Law, the Partnership
Register shall be PRIMA FACIE evidence of the matters which are required to be
inserted therein and shall be open to inspection by any Person during all
business hours.
(b) ACCESS. Such books and records shall be available, upon five
Business Days' notice to the General Partner, for inspection and copying at
reasonable times during
24
normal business hours by a Limited Partner or its duly authorized agents or
representatives for any purpose reasonably related to such Limited Partner's
interest as a limited partner in the Partnership.
8.3 PARTNERSHIP TAX RETURNS. The General Partner shall cause the
Partnership initially to elect the Fiscal Year as its taxable year and shall
cause to be prepared and timely filed all tax returns required to be filed for
the Partnership in the jurisdictions in which the Partnership conducts business
or derives income for all applicable tax years.
8.4 VALUATION. For all purposes of this Agreement, "VALUE" shall mean,
with respect to any asset or Security, including but not limited to any
Portfolio Investment, owned (directly or indirectly) by the Partnership at any
time, the fair market value of such asset or Security, as determined by the
General Partner in its sole discretion. "Fair market value" generally shall be
determined by the General Partner by reference to such factors as it deems
appropriate, including, with respect to a Security owned directly or indirectly
by the Partnership, the valuation set forth for such Portfolio Investment in the
Partnership's most recent quarterly financial statements. Any valuation may, in
the discretion of the General Partner, be made by independent third parties
appointed by the General Partner and deemed qualified by the General Partner to
render valuation opinions, which third parties may use such methods and consider
such information as they deem appropriate.
SECTION 9
REPORTS TO PARTNERS
9.1 INDEPENDENT AUDITORS. The books of account and records of the
Partnership shall be audited as of the end of each Fiscal Year by such
recognized accounting firm as shall be selected by the General Partner. The
Partnership's independent public accountants shall be a recognized independent
public accounting firm selected from time to time by the General Partner in its
sole discretion. All reports provided to the Limited Partners pursuant to
Section 9.2 shall be prepared in accordance with United States generally
accepted accounting principles consistently applied. The Partnership's financial
statements shall not be consolidated with those of the General Partner, any
Portfolio Company or any Affiliate of the Partnership, unless such consolidation
shall be required by United States generally accepted accounting principles, in
which case the Partnership shall provide "stand-alone" financial statements for
the Partnership, reviewed by the Partnership's independent public accounting
firm on an unconsolidated basis pursuant to investment company accounting
standards as reasonably determined by the General Partner.
9.2 REPORTS TO CURRENT PARTNERS. As soon as practicable after the end
of each Fiscal Year, the General Partner shall prepare and mail or cause to be
prepared and
25
mailed to each Limited Partner audited financial statements of the Partnership,
a statement of such Limited Partner's capital account and such other information
as the General Partner, in its sole discretion, deems appropriate. As soon as
practicable after the end of the second fiscal quarter each Fiscal Year, the
General Partner shall prepare and mail or cause to be prepared and mailed to
each Limited Partner unaudited financial statements of the Partnership and such
other information as the General Partner, in its sole discretion, deems
appropriate. In addition, if a Limited Partner so requests in writing, the
Partnership shall provide to each Limited Partner on a timely basis, all reports
sent (after the date of such request) to the limited partners of the
Institutional Fund pursuant to the limited partnership agreement of the
Institutional Fund.
9.3 UNITED STATES FEDERAL INCOME TAX INFORMATION. The General Partner
shall use its commercially reasonable best efforts to send, no later than 90
days after the end of each Fiscal Year, to each Limited Partner (or its legal
representatives) and to each other Person that was a Limited Partner at any time
during such Fiscal Year (or its legal representatives), a Schedule K-1,
"Partner's Share of Income, Credits, Deductions, Etc.," to United States
Internal Revenue Service Form 1065, "U.S. Partnership Return of Income," or any
successor schedule or form, filed by the Partnership, for such Person.
9.4 ADDITIONAL INFORMATION. The General Partner shall promptly provide
to any Tier 1 Limited Partner who so requests in writing such additional
information concerning the Partnership as such Tier 1 Limited Partner may
reasonably find relevant to the interests in the Partnership held by such Tier 1
Limited Partner.
SECTION 10
INDEMNIFICATION OF COVERED PERSONS
10.1 INDEMNIFICATION OF COVERED PERSONS. (a) GENERAL. The Partnership
and each Partner shall, and hereby does, to the fullest extent permitted by
applicable law, indemnify, hold harmless and release each Covered Person from
and against all claims, demands, liabilities, costs, expenses, damages, losses,
suits, proceedings and actions, whether judicial, administrative, investigative
or otherwise, of whatever nature, known or unknown, liquidated or unliquidated
("CLAIMS"), that may accrue to or be incurred by any Covered Person, or in which
any Covered Person may become involved, as a party or otherwise, or with which
any Covered Person may be threatened, relating to or arising out of the business
and affairs of, or activities undertaken in connection with, the Partnership
(including, but not limited to, Claims arising out of the disposition of any
Portfolio Company), or otherwise relating to or arising out of this Agreement,
including, but not limited to, amounts paid in satisfaction of judgments, in
compromise or as fines or penalties, and counsel fees and expenses incurred in
connection with the preparation for or defense or disposition of any
investigation, action, suit, arbitration or other proceeding (a "PROCEEDING"),
whether civil or criminal (all of such Claims and amounts covered by
26
this Section 10.1, and all expenses referred to in Section 10.2, referred to as
"DAMAGES"), except to the extent that it shall have been determined ultimately
by a court of competent jurisdiction that such Damages arose from the Disabling
Conduct of such Covered Person. The termination of any Proceeding by settlement
shall not, of itself, create a presumption that such Covered Person has engaged
in Disabling Conduct or any Damages relating to such settlement arose primarily
from the Disabling Conduct of any Covered Person. The provisions of this Section
10 shall survive the termination, dissolution and winding-up of the Partnership.
(b) CONTRIBUTION. Notwithstanding any other provision of this
Agreement, at any time and from time to time and prior to the last day of the
Term, the General Partner may require the Partners to contribute to the
Partnership an amount sufficient to satisfy all or any portion of the
indemnification obligations of the Partnership, whether such obligations arise
before or after the last day of the Term, or with respect to any Person who is a
Partner, before or after such Person ceases to be a Partner, PROVIDED that each
Partner shall make such contributions in respect of its share of any such
indemnification obligations made or required to be made as follows:
(i) if the Claims or Damages so indemnified against arise out
of a Portfolio Investment,
(A) by each Partner to which Distributable Cash was
distributed in connection with such Portfolio Investment in
such amounts as shall result in each Partner retaining from
such Distributable Cash the amount that would have been
distributed to such Partner had the amount of Distributable
Cash been, at the time of such distribution, reduced by the
amount of such indemnification obligations, as equitably
determined by the General Partner; and
(B) thereafter, by the Partners in proportion to
their Sharing Percentages with respect to such Portfolio
Investment, or
(ii) in any other circumstances, by the Partners (other than
the Employer Limited Partners) in proportion to their Capital
Commitments and/or Associated Commitments, as the case may be.
Notwithstanding anything in this Section 10 to the contrary, a Partner's
liability under the first sentence of this Section 10.1(b) is limited to such
Partner's Capital Commitment. Nothing in this Section 10.1(b), express or
implied, is intended or shall be construed to give any Person other than the
Partnership or the Partners any legal or equitable right, remedy or claim under
or in respect of this Section 10.1(b) or any provision contained herein.
27
(c) NO DIRECT LIMITED PARTNER INDEMNITY. Limited Partners shall not be
required directly to indemnify any Covered Person under this Section 10.1.
10.2 EXPENSES, ETC. To the fullest extent permitted by applicable law,
expenses incurred by a Covered Person in defense or settlement of any Claim that
may be subject to a right of indemnification hereunder shall be advanced by the
Partnership prior to the final disposition thereof upon receipt of an
undertaking by or on behalf of the Covered Person to repay such amount if it
shall be determined ultimately by a court of competent jurisdiction that the
Covered Person is not entitled to be indemnified hereunder. The right of any
Covered Person to the indemnification provided herein shall be cumulative with,
and in addition to, any and all rights to which such Covered Person may
otherwise be entitled by contract or as a matter of law or equity and shall
extend to such Covered Person's successors, assigns and legal representatives.
All judgments against the Partnership, and all judgments against the Partnership
and either or both of the General Partner and/or the Manager in respect of which
the General Partner and/or the Manager are/is entitled to indemnification, shall
first be satisfied from Partnership assets (including, without limitation,
Capital Contributions and any payments under Section 10.1(b)), before the
General Partner or the Manager, as the case may be, is responsible therefor.
10.3 NOTICES OF CLAIMS, ETC. Promptly after receipt by a Covered Person
of notice of the commencement of any Proceeding, such Covered Person shall, if a
claim for indemnification in respect thereof is to be made against the
Partnership, give written notice to the Partnership of the commencement of such
Proceeding, PROVIDED that the failure of any Covered Person to give notice as
provided herein shall not relieve the Partnership of its obligations under this
Section 10, except to the extent that the Partnership is actually prejudiced by
such failure to give notice. In case any such Proceeding is brought against a
Covered Person (other than a derivative suit in right of the Partnership), the
Partnership shall be entitled to participate in and to assume the defense
thereof to the extent that the Partnership may wish, with counsel reasonably
satisfactory to such Covered Person. After notice from the Partnership to such
Covered Person of the Partnership's election to assume the defense of such
Proceeding, the Partnership shall not be liable for expenses subsequently
incurred by such Covered Person in connection with the defense thereof. The
Partnership shall not consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Covered Person of a release from all liability
in respect to such Claim.
10.4 NO WAIVER. Nothing contained in this Section 10 shall constitute a
waiver by any Partner of any right that it may have against any party under any
U.S. federal or state securities laws, Cayman Islands laws or other non-U.S.
laws.
28
10.5 COVERED PERSONS MAY RELY AND ENFORCE. It is the express intention
of the parties hereto that the provisions of this Section 10 for the
indemnification of Covered Persons may be relied upon by such Covered Persons
and may be enforced by such Covered Persons (or by the General Partner on behalf
of any such Covered Person, PROVIDED that the General Partner shall not have any
obligation to so act for or on behalf of any such Covered Person) against the
Partnership and the Partners as if such Covered Persons were parties hereto.
SECTION 11
TRANSFER OF LIMITED PARTNERSHIP INTERESTS;
WITHDRAWAL OF LIMITED PARTNERS
11.1 ADMISSION, SUBSTITUTION AND WITHDRAWAL OF LIMITED PARTNERS;
ASSIGNMENT. (a) GENERAL. Except as set forth in Section 5 or in this Section 11,
no Additional Limited Partners may be admitted to, and no Limited Partner may
withdraw from, the Partnership prior to the dissolution and winding-up of the
Partnership. Except as set forth in this Section 11 no Limited Partner shall
sell, transfer, assign, convey, pledge, mortgage, encumber, hypothecate or
otherwise dispose of ("TRANSFER") all or any part of its interest in the
Partnership, PROVIDED that any Limited Partner may, with the prior written
consent of the General Partner (which consent may be withheld in the sole and
absolute discretion of the General Partner) and upon compliance with Sections
11.1(b) and (c), Transfer all or a portion of such Limited Partner's interest in
the Partnership. Notwithstanding the foregoing, no Limited Partner may enter
into, create, sell or Transfer any financial instrument or contract the value of
which is determined in whole or in part by reference to the Partnership
(including the amount of Partnership distributions, the value of Partnership
assets, or the results of Partnership operations), within the meaning of section
1.7704-1(a)(2)(i)(B) of the Treasury Regulations.
(b) CONDITIONS TO TRANSFER. Any purported Transfer by a Limited Partner
pursuant to the terms of this Section 11 shall, in addition to requiring the
prior written consent referred to in Section 11.1(a), be subject to the
satisfaction of the following conditions:
(i) the Limited Partner that proposes to effect such a
Transfer (a "TRANSFEROR") or the Person to whom such Transfer is made
(a "TRANSFEREE") shall pay all expenses incurred by the Partnership or
the General Partner on behalf of the Partnership in connection
therewith;
(ii) the Partnership shall receive from the Transferee (and in
the case of clause (C) below, from the Transferor to the extent
specified by the General Partner) (A) such documents, instruments and
certificates as may be requested by the General Partner, pursuant to
which such Transferee shall become bound by
29
this Agreement, including, without limitation, a counterpart of this
Agreement executed by or on behalf of such Transferee, (B) a
certificate to the effect that the representations set forth in the
Subscription Agreement of such Transferee are (except as otherwise
disclosed to the General Partner) true and correct with respect to such
Transferee as of the date of such Transfer and (C) such other
documents, opinions, instruments and certificates as the General
Partner shall request;
(iii) such Transferor or Transferee shall, prior to making any
such Transfer, deliver to the Partnership the opinion of counsel
described in Section 11.1(c);
(iv) the General Partner may, in its sole discretion, require
any Limited Partner wishing to make a Transfer under this Section 11 or
such Transferee to pay to the Partnership such amount in immediately
available funds as is sufficient to cover all expenses incurred by or
on behalf of the Partnership in connection with such substitution or
Transfer, and in connection therewith, to execute and deliver such
documents, instruments, certificates and opinions of counsel as the
General Partner shall request;
(v) the General Partner shall be given at least 30 days' prior
written notice of such desired Transfer;
(vi) the Transferor and the Transferee shall each provide a
certificate to the effect that (A) the proposed Transfer will not be
effected on or through (1) a U.S. national, regional or local
securities exchange, (2) a non-U.S. securities exchange or (3) an
interdealer quotation system that regularly disseminates firm buy or
sell quotations by identified brokers or dealers (including, without
limitation, NASDAQ or a foreign equivalent thereto) and (B) it is not,
and its proposed Transfer or acquisition (as the case may be) will not
be made by, through or on behalf of, (1) a Person, such as a broker or
a dealer, making a market in interests in the Partnership or (2) a
Person who makes available to the public bid or offer quotes with
respect to interests in the Partnership;
(vii) such Transfer will not be effected on or through an
"established securities market" or a "secondary market or the
substantial equivalent thereof," as such terms are used in section
1.7704-1 of the Treasury Regulations; and
(viii) such Transfer would not result in the Partnership at
any time during its taxable year having more than 100 partners within
the meaning of section 1.7704-1(h)(1)(ii) of the Treasury Regulations
(taking into account section 1.7704-1(h)(3) of the Treasury
Regulations).
30
The General Partner may waive any or all of the conditions set forth in this
Section 11.1(b) (other than clause (vii) hereof) if in its sole discretion, it
deems it in the best interest, or not opposed to the interest, of the
Partnership to do so.
(c) OPINION OF COUNSEL. The opinion of counsel referred to in Section
11.1(b)(iii) shall be in form and substance satisfactory to the General Partner,
shall be from counsel satisfactory to the General Partner and shall be
substantially to the effect that (unless specified otherwise by the General
Partner) the consummation of the Transfer contemplated by the opinion:
(i) will not require registration under, or violate any
provisions of, the Securities Act or any applicable state or non-U.S.
securities laws;
(ii) will not require the General Partner or the Partnership
to register as an investment company under the Investment Company Act;
and, as required by the General Partner, that the Transferee is a
Person that counts as one beneficial owner for purposes of section
3(c)(1) of the Investment Company Act;
(iii) will not require the Manager, the General Partner or any
Affiliate of the Manager or the General Partner that is not registered
under the Investment Advisers Act or the Partnership to register as an
investment adviser under the Investment Advisers Act;
(iv) will not cause the Partnership to be taxable as
corporation under the Code; and
(v) will not violate the laws, rules or regulation of any
state or the rules and regulations of any Governmental Authority
applicable to such Transfer.
In giving such opinion, counsel may, with the consent of the General Partner,
rely as to factual matters on certificates of the Transferor, the Transferee and
the General Partner.
(d) DEATH, INCAPACITY ETC. Subject to Sections 11.1(a), 11.1(b) and
11.1(c), the estate of a Limited Partner who is a natural person shall have the
right to Transfer, upon the death, incompetency, bankruptcy, withdrawal or
incapacity of such Limited Partner, his or her interest in the Partnership.
(e) SUBSTITUTE LIMITED PARTNERS. Notwithstanding any other provision of
this Agreement, any Transferee of a Transferor's interest in the Partnership
pursuant to the terms of this Section 11 may be admitted to the Partnership as a
substitute limited partner of the Partnership (a "SUBSTITUTE LIMITED PARTNER")
only with the consent of the General Partner, which consent may be withheld in
the sole and absolute discretion of the General Partner. Upon the admission of
such Transferee as a Substitute Limited Partner, all references herein to such
Transferor shall be deemed to apply to such Substitute Limited
31
Partner, and such Substitute Limited Partner shall succeed to all rights and
obligations of the Transferor hereunder. A Person shall be deemed admitted to
the Partnership as a Substitute Limited Partner at the time that the foregoing
conditions are satisfied and such Person is listed as a limited partner of the
Partnership in the Partnership Register. Any Transferee of an economic interest
in the Partnership shall become a Substitute Limited Partner only upon
satisfaction of the requirements set forth in this Section 11.1.
(f) TRANSFER IN VIOLATION OF AGREEMENT NOT RECOGNIZED. No attempted
Transfer or substitution shall be recognized by the Partnership and any
purported Transfer or substitution shall be void unless effected in accordance
with and as permitted by this Agreement.
11.2 ADDITIONAL LIMITED PARTNERS. (a) CONDITIONS TO ADMISSION. In
addition to the admission of Limited Partners at the Initial Closing, the
General Partner, in its sole discretion, may schedule, from time to time, one or
more additional Closings for one or more Person or Persons seeking admission to
the Partnership as an additional limited partner of the Partnership (each such
Person, an "ADDITIONAL LIMITED PARTNER", which term shall include any Person
that is a Partner immediately prior to such additional Closing and that wishes
to increase the amount of such Person's Capital Commitment or, in the case of a
Profits Limited Partner, its Associated Commitment), subject to the
determination by the General Partner in the exercise of its good faith judgment
that in the case of each such admission or increase the following conditions
have been satisfied:
(i) Each such Additional Limited Partner shall have executed
and delivered such instruments and shall have taken such actions as the
General Partner shall deem necessary, convenient or desirable to effect
such admission or increase, including, without limitation, the
execution of (A) a Subscription Agreement pursuant to which such
Additional Limited Partner agrees to be bound by the terms and
provisions hereof or (if such Additional Limited Partner is a Cash
Limited Partner or an Employer Limited Partner) to increase the amount
of such Limited Partner's Capital Commitment, as the case may be and
(B) a Power of Attorney.
(ii) Such admission or such increase shall not result in a
violation of any applicable law, including, without limitation, Cayman
Islands and United States federal and state securities laws, or any
term or condition of this Agreement and, as a result of such admission
or such increase, the Partnership shall not be required to register as
an Investment Company under the Investment Company Act or any law of
similar import of the Cayman Islands; none of the General Partner, the
Manager or any Affiliate of the General Partner or Manager would be
required to register as an investment adviser under the Investment
Advisers Act or any law of similar import of the Cayman Islands; and
the Partnership shall not become taxable as a corporation or
association.
32
(b) On the date of its admission to the Partnership or the date of such
increase, as the case may be, such Additional Limited Partner shall have paid or
unconditionally agreed to pay to the Partnership, an amount equal to the sum of
(i) in the case of each Portfolio Investment then held by the
Partnership, with the exception of such Portfolio Investments as the
General Partner in its sole discretion deems fair and equitable to
exclude, the percentage of such Additional Limited Partner's Capital
Commitment or (if the Additional Limited Partner is increasing its
Capital Commitment) the percentage of the amount of the increase of
such Additional Limited Partner's Capital Commitment that is equal to a
fraction, (1) the numerator of which is the aggregate of the Capital
Contributions of the previously admitted Partners used to fund the cost
of such Portfolio Investment and (2) the denominator of which is the
sum of the aggregate of (x) the Capital Commitments of the previously
admitted Partners that made Capital Contributions used to fund the cost
of such Portfolio Investment and (y) (without duplication) the Capital
Commitments of all Additional Limited Partners, and
(ii) the percentage of such Additional Limited Partner's
Capital Commitment or (if such Additional Limited Partner is increasing
its Capital Commitment) the percentage of the amount of the increase of
such Additional Limited Partner's Capital Commitment that is equal to a
fraction, (1) the numerator of which is the aggregate of the Capital
Contributions of the previously admitted Limited Partners in respect of
all Drawdowns which have theretofore been funded and not returned to
the Partners, other than Drawdowns made and used to fund the cost of a
Portfolio Investment and (2) the denominator of which is the sum of the
aggregate of (X) the Capital Commitments of all previously admitted
Partners and (Y) (without duplication) the Capital Commitments of all
Additional Limited Partners,
together with, in the case of clauses (A) and (B), an amount calculated as
interest thereon at a rate per annum equal to the Prime Rate plus 200 basis
points from the dates that contribution of such amounts by such Additional
Limited Partner would have been due if such Additional Limited Partner had been
admitted to the Partnership or had increased its Capital Commitment, as the case
may be, on the date of the Initial Closing, to the date that the payment
required to be made by such Additional Limited Partner pursuant to this Section
11.2(a)(iii) is made, which interest shall be treated as provided in Section
11.2(b), and less such amount as is necessary to take into account all
distributions theretofore made.
A Person shall be deemed admitted to the Partnership as an Additional
Limited Partner at the time that the foregoing conditions are satisfied and when
such Person is listed as a limited partner of the Partnership, and the Capital
Commitment made with respect to such Person is listed, in the Partnership
Register.
33
(c) CERTAIN PAYMENTS AND TRANSFERS. Any amount paid by an Additional
Limited Partner pursuant to Section 11.2(a)(iii)(A) with respect to the
acquisition of Portfolio Investment (and any interest paid thereon) shall be
remitted promptly to the previously admitted Partners, PRO RATA in accordance
with their Capital Contributions used to fund the acquisition of such Portfolio
Investment (before giving effect to the adjustments referred to in the following
clause), and the Partners' Sharing Percentages for such Portfolio Investment
shall be appropriately adjusted. Any amount paid by an Additional Limited
Partner pursuant to Section 11.2(a)(iii)(B) (and any interest paid thereon)
shall be remitted promptly to the previously admitted Partners, PRO RATA in
accordance with their Capital Commitments. Such payments and remittances shall,
in accordance with section 707(a) of the Code, be treated for all purposes of
this Agreement and for all accounting and tax reporting purposes as payments
made directly from the Additional Limited Partner to the previously admitted
Partners and not as items of Partnership income, gain, loss, deduction,
contribution or distribution. Such Additional Limited Partner shall succeed to
the Capital Contributions of the previously admitted Partners attributable to
the portion of the amount remitted to such previously admitted Partners pursuant
to Section 11.2(a)(iii) (not including any amount calculated as interest
thereon), as appropriate, and the Capital Contributions of the previously
admitted Partners shall be decreased accordingly. In addition, the Remaining
Capital Commitments of the previously admitted Limited Partners shall be
increased by such amount remitted (not including any amount calculated as
interest thereon), and the amount of such increase in Remaining Capital
Commitments may be called again by the Partnership. The Remaining Capital
Commitment of the Additional Limited Partner shall be appropriately determined
by the General Partner. The Partnership Register shall be amended by the General
Partner as appropriate to show the name and business address of each Additional
Limited Partner and the amount of its Capital Commitment. Neither the admission
of an Additional Limited Partner nor an increase in the amount of an Additional
Limited Partner's Capital Commitment shall be a cause for dissolution of the
Partnership.
(d) NO CONSENT. The transactions contemplated by this Section 11.2
shall not require the consent of any of the Limited Partners.
(e) MULTI-FUND AND MULTI-VEHICLE ADJUSTMENTS. Any payments to be made
by, and the distributions to be made to, certain Partners pursuant to Section
11.2(a) and (b), and the equivalent provisions of the Institutional Fund
Agreement, shall be adjusted as necessary to take into account (i) that
investments held by the Partnership may, as of any Closing Date, be held by one
or more of the Co-Investment Funds, (ii) that a portion of each Limited
Partner's Capital Commitment originally made to the Partnership may, at the time
of the subsequent Closings, be a capital commitment to one or more Special
Investment Vehicles, and (iii) closings of a Co-Investment Fund. Notwithstanding
any other provision of this Agreement, investments held by the Partnership, the
other Co-Investment Funds, and/or Special Investment Vehicles may be transferred
among such entities (for a price equal to cost plus interest thereon at a rate
per annum of the Prime
34
Rate plus 200 basis points) to effectuate the purposes of this Section 11.2 and
the equivalent provisions of the Institutional Fund Agreement. After the
payments, distributions and adjustments described in this Section 11.2(d) and
the equivalent provisions of the Institutional Fund Agreement are taken into
account, each investment in a Portfolio Company shall be held by the Partnership
and any Co-Investment Fund in proportion to their respective capital
commitments, including, without limitation, all capital committed to the
Partnership or any such Co-Investment Fund, as the case may be, after the date
on which such investment was made but prior to September 30, 2004.
SECTION 12
DEATH, INCOMPETENCY OR BANKRUPTCY
OR DISSOLUTION OF PARTNERS
12.1 BANKRUPTCY, DISSOLUTION OF THE GENERAL PARTNER. In the event of
the bankruptcy or dissolution and commencement of winding up of the General
Partner or the occurrence of any other event that causes the General Partner to
cease to be a general partner of the Partnership under the Partnership Law, the
Partnership shall be dissolved and its affairs shall be wound up as provided in
Section 13, unless the business of the Partnership is continued pursuant to
Section 13.1(a). The General Partner shall take no action voluntarily to declare
bankruptcy or accomplish its dissolution prior to the dissolution of the
Partnership. Notwithstanding any other provision of this Agreement, the
bankruptcy of the General Partner will not cause the General Partner to cease to
be a general partner of the Partnership, and upon the occurrence of such an
event, the business of the Partnership shall continue without dissolution.
12.2 DEATH, INCOMPETENCE, BANKRUPTCY, DISSOLUTION OR WITHDRAWAL OF A
LIMITED PARTNER. The death, Total Disability, bankruptcy, dissolution,
retirement, resignation or withdrawal of a Limited Partner or the occurrence of
any other event that causes a Limited Partner to cease to be a Partner of the
Partnership shall not in and of itself dissolve or terminate the Partnership;
and the Partnership, notwithstanding such event, shall continue without
dissolution upon the terms and conditions provided in this Agreement, and each
Limited Partner, by executing this Agreement, agrees to such continuation of the
Partnership without dissolution.
SECTION 13
DURATION AND TERMINATION OF PARTNERSHIP
13.1 DURATION. (a) There shall be a dissolution of the Partnership and
its affairs shall be wound up upon the first to occur of any of the following
events:
(i) the date of the dissolution of the Institutional Fund; or
35
(ii) the last Business Day of the Fiscal Year in which all
assets acquired, or agreed to be acquired, by the Partnership have been
sold or otherwise disposed of; or
(iii) the withdrawal, bankruptcy or dissolution and
commencement of winding up of the General Partner, or the assignment by
the General Partner of its entire interest in the Partnership in
contravention of this Agreement, or the occurrence of any other event
that causes the General Partner to cease to be a general partner of the
Partnership under the Partnership Law, UNLESS, within 90 calendar days
after the occurrence of such event, a substitute general partner is
appointed by a Majority in Interest effective as of the date of
withdrawal (i) at the time of the occurrence of such event there is at
least one remaining general partner of the Partnership that is hereby
authorized to and does (unanimously in the case of more than one
general partner) elect to continue the business of the Partnership
without dissolution or (ii) the business of the Partnership is
otherwise continued without dissolution pursuant to the provisions of
the Partnership Law and PROVIDED, that for the purposes of this Section
13.1, the General Partner shall not be deemed to have been dissolved or
to have commenced a winding up as a result of the fact that any general
partner of the General Partner ceases to be a general partner of the
General Partner if and as long as the General Partner shall have at
least one remaining general partner who shall have the right and shall
elect to carry on the business of the General Partner; and PROVIDED,
FURTHER, that the conversion of the General Partner to a limited
partnership, limited liability company or other entity, or the Transfer
of the General Partner's interest as the general partner of the
Partnership to, or the merger of the General Partner with and into, a
limited partnership, limited liability company or other entity as
provided for in Section 2.7 shall not, for the purposes of this Section
13.1 be deemed a dissolution or winding up or commencement of winding
up of the General Partner; or
(iv) a decision, made by the General Partner in its sole
discretion, to dissolve the Partnership because it has determined, due
to a change in the text, application or interpretation of any
applicable statute, regulation, case law, administrative ruling or
other similar authority (including, without limitation, changes that
result in the Partnership being taxable as a corporation under United
States federal income tax law), that the Partnership will be unable to
effectively carry out its investment program as contemplated by this
Agreement; or
(v) the entry of a decree of judicial dissolution.
13.2 DISTRIBUTION UPON DISSOLUTION. Upon the dissolution of the
Partnership, the General Partner (or, if dissolution of the Partnership should
occur by reason of Section 13.1(a)(iii), a liquidating trustee selected by the
General Partner, or if the General
36
Partner has dissolved or withdraws from the Partnership, or other representative
duly designated by a Majority in Interest) shall proceed, subject to the
provisions of this Section 13, to liquidate the Partnership and apply the
proceeds of such liquidation, or in its sole discretion to distribute
Partnership assets, in the following order of priority:
FIRST, to creditors in satisfaction of debts and liabilities
of the Partnership, whether by payment or the making of reasonable
provision for payment (other than any loans or advances that may have
been made by any of the Partners to the Partnership), and the expenses
of liquidation whether by payment or the making of reasonable provision
for payment, any such reasonable reserves (which may be funded by a
liquidating trust) to be established by the General Partner (or any
liquidating trustee selected by the General Partner, or if the General
Partner has dissolved or withdraws from the Partnership, or other
representative duly designated by a Majority in Interest) in amounts
deemed by it to be reasonably necessary for the payment of the
Partnership's expenses, liabilities and other obligations (whether
fixed or contingent, conditional or unmatured);
SECOND, to the Partners in satisfaction of any loans or
advances that may have been made by any of the Partners to the
Partnership, whether by payment or the making of reasonable provision
for payment;
THIRD, to the Partners in accordance with Section 6.3.
13.3 DISTRIBUTIONS IN CASH OR IN KIND. Upon the dissolution of the
Partnership, the General Partner (or liquidating trustee selected by the General
Partner or, if the General Partner has dissolved or withdraws from the
Partnership, a representative duly designated by a Majority in Interest) its
successor or other representative shall use its commercially reasonable efforts
to liquidate all of the Partnership assets in an orderly manner and apply the
proceeds of such liquidation as set forth in Section 13.2, PROVIDED THAT if in
the good faith business judgment of the General Partner (or such liquidating
trustee or other representative), a Partnership asset should not be liquidated,
the General Partner (or such other representative) shall allocate, on the basis
of the Value of any Partnership assets not sold or otherwise disposed of, any
unrealized gain or loss based on such Value to the Partner's Capital Accounts as
though the assets in question had been sold on the date of distribution and,
after giving effect to any such adjustment, distribute said assets in accordance
with Section 13.2, subject to the priorities set forth in Section 13.2, PROVIDED
FURTHER that the General Partner (such other representative) will in good faith
attempt to liquidate sufficient Partnership assets to satisfy in cash (or make
reasonable provision for) the debts and liabilities referred to in paragraphs
First and Second of Section 13.2. The General Partner may cause certificates
evidencing any Securities to be distributed to be imprinted with legends as to
such restrictions on transfers that it may deem necessary or appropriate,
including, without limitation, legends as to applicable federal or state or
non-U.S. securities laws or other legal or contractual
37
restrictions, and may require any Partner to which Securities are to be
distributed to agree in writing (A) that such Securities will not be transferred
except in compliance with such restrictions and (B) to such other matters as the
General Partner may deem necessary, appropriate convenient or incidental to the
foregoing.
13.4 TIME FOR LIQUIDATION, ETC. (a) At the end of the term of the
Partnership as provided for in the provisos to Section 1.4, the Partnership
shall be liquidated and any remaining assets shall be distributed in accordance
with Section 13.2. A reasonable time period shall be allowed for the orderly
winding-up and liquidation of the assets of the Partnership and the discharge of
liabilities to creditors so as to enable the General Partner to seek to minimize
potential losses upon such liquidation. Subject to Section 13.1, the provisions
of this Agreement shall remain in full force and effect during the period of
winding-up and until the filing of a notice of dissolution of the Partnership
with the Registrar of Exempted Limited Partnerships of the Cayman Islands, as
provided in 13.4(b).
(b) FILING OF NOTICE OF DISSOLUTION. Upon completion of the foregoing,
the General Partner (or any liquidating trustee selected by the General Partner,
or if the General Partner has dissolved or withdraws from the Partnership, a
representative duly designated by a Majority in Interest) shall execute,
acknowledge and cause to be filed a notice of dissolution of the Partnership
with the Registrar of Exempted Limited Partnerships of the Cayman Islands.
13.5 GENERAL PARTNER AND MANAGER NOT PERSONALLY LIABLE FOR RETURN OF
CAPITAL CONTRIBUTIONS. None of the General Partner or the Manager, or any of its
or their respective Affiliates shall be personally liable for the return of all
or any portion of the Capital Accounts or the Capital Contributions of any
Partner, and such return shall be made solely from available Partnership assets,
if any, and each Limited Partner hereby waives any and all claims it may have
against the General Partner or the Manager, or any of its or their respective
Affiliates thereof in this regard.
13.6 REORGANIZATION OF THE PARTNERSHIP. To the extent permitted by law,
in order to effect a reorganization of the Partnership,
(a) the General Partner may cause the conversion of the
Partnership to a limited partnership, limited liability company or
other entity formed under the laws of the Cayman Islands or any other
jurisdiction or
(b) the General Partner may cause the exchange of the
interests of the Partners in the Partnership for interests in, or cause
the Partnership to be merged with and into, a limited partnership,
limited liability company or other entity formed under the laws of the
Cayman Islands or any other jurisdiction,
38
but only if in any such case the Partners (including, without limitation, their
successors) shall become, and no other Persons (other than Persons necessary for
the qualification of such limited partnership, limited liability company or
other entity under such laws) shall be, the partners of such limited
partnership, the members of such limited liability company or the equity holders
of such other entity, as the case may be, PROVIDED that no such conversion,
exchange or merger shall be permitted unless
(i) the General Partner shall first have delivered to the
Partnership
(A) a written opinion from Debevoise & Xxxxxxxx or
other counsel of recognized standing experienced in United
States federal income tax matters, to the effect that such
limited partnership, limited liability company or other entity
will be classified as a partnership, and will not be treated
as a corporation, for United States federal income tax
purposes, and
(B) a written opinion (the conclusions of which may
be based in part on the opinion specified in the immediately
preceding clause (A)) of each of
(1) experienced counsel admitted to practice
in each jurisdiction in which such limited
partnership, limited liability company or other
entity is formed or has an office and
(2) experienced counsel admitted to practice
in each jurisdiction (X) in which such limited
partnership, limited liability company or other
entity shall have an office, be doing business or
otherwise be subject to the income tax laws of such
jurisdiction immediately after such conversion,
exchange or merger and (Y) under the income tax laws
of which the Partnership was not taxed directly on
its income before such conversion, exchange or
merger,
to the effect that such conversion, exchange or merger would
not cause such limited partnership, limited liability company
or other entity to be taxed directly on its income under the
income tax laws of such jurisdiction,
(ii) the General Partner shall have first delivered to the
Partnership a written opinion of experienced counsel admitted to
practice in the jurisdiction under the laws of which such limited
partnership, limited liability company or other entity is formed, to
the effect that such conversion, exchange or merger would not adversely
affect the limited liability of the Limited Partners,
(iii) such conversion, exchange or merger would not result in
the violation of any applicable securities laws,
39
(iv) such conversion, exchange or merger would not result in
such limited partnership, limited liability company or other entity
being required to register as an Investment Company under the
Investment Company Act or any law of similar import of the jurisdiction
under the laws of which such limited partnership, limited liability
company or other entity is formed, and would not result in the General
Partner or any Affiliate of the General Partner being required to
register as an investment adviser under the Investment Advisers Act or
any law of similar import of such jurisdiction, and
(v) the General Partner shall have made a good faith
determination that such conversion, exchange or merger would not
adversely affect the rights or increase the liabilities of the Limited
Partners.
Upon any such conversion, exchange or merger, such limited partnership, limited
liability company or other entity shall be treated as the successor to the
Partnership for all purposes of this Agreement and of the corresponding
agreement pursuant to which the rights and obligations of the partners of such
limited partnership, the members of such limited liability company or the equity
holders of such other entity, as the case may be, are determined. All
Subscription Agreements applicable to the Partnership that are in effect at the
time of any such conversion, exchange or merger shall thereafter continue in
full force and effect, and shall apply to the limited partnership, limited
liability company or other entity that becomes the successor to the Partnership
pursuant to such conversion, exchange or merger. In conjunction with any such
conversion, exchange or merger, the General Partner may execute, on behalf of
the Partnership and each of the Limited Partners, all documents that in its
reasonable judgment are necessary or appropriate to consummate such conversion,
exchange or merger, including, but not limited to, the agreement pursuant to
which the rights and obligations of the partners of such limited partnership,
the members of such limited liability company or the equity holders of such
other entity, as the case may be, are determined (in the case of such a
conversion to, exchange for interests in or merger into a limited partnership,
including the limited partnership agreement thereof), all without any further
consent or approval of any other Partner, PROVIDED, that no such agreement may
directly or indirectly effect a modification or amendment of the rights and
obligations of the Partners which, if such modification or amendment were made
to this Agreement, would require the consent of the Partners, any group thereof,
or any individual Partner as provided in Section 15.1, unless the consent to
such modification or amendment required under Section 15.1 is obtained. A
reorganization of the Partnership pursuant to this Section 13.6 shall not be
deemed to be or result in a dissolution, winding up or commencement of winding
up of the Partnership.
40
SECTION 14
DEFINITIONS
As used herein the following terms have the respective meanings set
forth below (each such meaning to be equally applicable to the singular and
plural forms of the respective terms so defined):
"ADDITIONAL LIMITED PARTNER" shall have the meaning set forth in
Section 11.2(a).
"ADJUSTMENT DATE" shall mean the last Business Day of any Fiscal Year
or any other date determined by the General Partner, in its sole discretion, as
appropriate for an interim closing of the Partnership's books.
"ADVANCE" shall mean, with respect to a Profits Limited Partner, the
amount by which the Associated Contributions exceed the amount of the deferrals
made under the MMC Capital Plan by the Person who is such Profits Limited
Partner and credited to such Person's AFR Account (as defined in the MMC Capital
Plan) under the MMC Capital Plan.
"AFFILIATE" shall mean, with respect to any specified Person, (A) a
Person that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, the Person
specified, (B) a trust or other estate in which such Person has a substantial
beneficial interest or as to which such Person serves as trustee or in another
similar fiduciary capacity, and (C) any relative or spouse of such Person, or
any relative of such spouse, who has the same home as such Person, PROVIDED that
none of the Portfolio Companies or portfolio companies of the private equity
funds managed by the Manager, including without limitation The Trident
Partnership, L.P., Trident II, L.P., Xxxxx & McLennan Capital Technology
Venture, L.P., MMC Capital Technology Fund II, L.P. and Xxxxx & XxXxxxxx Capital
Communications and Information Fund, L.P. shall be an "Affiliate" of a Key
Employee, the Manager, the General Partner or the Partnership.
"AFR RATE" shall mean the fixed rate of return as of the date of the
first Drawdown, equal to the applicable federal long-term rate under section
1274(d) of the Code, compounded annually, as determined in the good faith
judgment of the General Partner, PROVIDED, that the General Partner may increase
such fixed rate of return if, as of the date of any subsequent Drawdown, such
fixed rate of return is less than the applicable federal rate under Section
1274(d) of the Code, compounded annually.
"AFR RETURN" shall have the meaning set forth in Section 6.3, paragraph
FIRST.
"AGREEMENT" shall have the meaning set forth in the initial paragraph
of this Agreement.
41
"ASSOCIATED COMMITMENT" shall mean, with respect to a Profits Limited
Partner, the Capital Commitment of the Employer Limited Partner associated with
such Profits Limited Partner.
"ASSOCIATED CONTRIBUTION" shall mean, with respect to a Profits Limited
Partner, the Capital Contribution of the Employer Limited Partner associated
with such Profits Limited Partner.
"AVAILABLE ASSETS" shall mean as of any date, the excess of the cash,
cash equivalent items and Temporary Investments held by the Partnership over the
sum of the amount of such items determined by the General Partner to be
reasonably necessary for the payment of the Partnership's expenses, liabilities
and other obligations (whether fixed, contingent, conditional or unmatured),
including, but not limited to, the Partnership's indemnification obligations and
for the establishment of appropriate reserves for such expenses, liabilities and
obligations as may arise, including, without limitation, the maintenance of
adequate working capital for the continued conduct of the Partnership's
business.
"AVAILABLE CAPITAL COMMITMENT" shall mean
"BUSINESS DAY" shall mean any day on which banks in New York City are
not required or authorized by law to remain closed.
"CAPITAL ACCOUNT" shall have the meaning set forth in Section 6.1.
"CAPITAL COMMITMENT" shall mean the commitment of each Cash Limited
Partner and each Employer Limited Partner to contribute capital to the
Partnership pursuant to Section 5.1 as set forth in the Partnership Register.
The Associated Commitments of the Profits Limited Partners shall be associated
on the records of the Partnership with the Capital Commitment of the relevant
Employer Limited Partner.
"CAPITAL CONTRIBUTION" shall mean with respect to a Partner other than
a Profits Limited Partner, the amount of capital contributed pursuant to a
single Drawdown or the aggregate amount of such contributions, as the context
requires, by such Partner to the Partnership pursuant to Section 5.1 and the
other provisions of this Agreement.
"CASH LIMITED PARTNERS" shall have the meaning set forth in Section
3.1(c).
"CLAIMS" shall have the meaning set forth in Section 10.1(a).
"CLOSING" shall have the meaning set forth in the Subscription
Agreements.
"CLOSING DATE" shall mean any date on which a Closing occurs.
42
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"CO-INVESTMENT FUNDS" shall have the meaning set forth in Section 1.3.
"COVERED PERSONS" shall mean (i) the General Partner, the Manager and
the Key Employees; (ii) each of the respective Affiliates of each Person
identified in clause (i) of this definition; and (iii) each Person who is or at
any time becomes a shareholder, officer, director, employee, partner, member,
manager, consultant or agent of any of the Persons identified in clause (i) or
clause (ii) of this definition.
"DAMAGES" shall have the meaning set forth in Section 10.1(a).
"DEFAULTED COMMITMENT" shall have the meaning set forth in Section
5.3(a).
"DEFAULTING CASH LIMITED PARTNER" shall have the meaning set forth in
Section 5.3(a).
"DEFAULTING PROFITS LIMITED PARTNER" shall have the meaning set forth
in Section 5.3(b).
"DISABLING CONDUCT" shall mean, with respect to any Person, fraud,
willful misfeasance, gross negligence or reckless disregard, in each case, of
such Person's duties to the Partnership. Notwithstanding the provisions of
Section 16.7 hereof, "gross negligence" shall have the meaning given such term
under the laws of the State of Delaware.
"DISTRIBUTABLE CASH" shall mean, for each Period and each Partner, the
excess of (i) the sum of cash receipts of all kinds, over (ii) cash
disbursements or reserves for expenses, liabilities or obligations of the
Partnership or amounts retained by the Partnership to be reinvested pursuant to
Section 4.1(b).
"DRAWDOWN NOTICE" shall have the meaning set forth in Section
5.1(b)(i).
"DRAWDOWNS" shall mean the Capital Contributions made to the
Partnership pursuant to Section 5.1 from time to time by the Partners pursuant
to Drawdown Notices.
"EMPLOYER LIMITED PARTNERS" shall have the meaning set forth in Section
3.1(a).
"EXCUSED LIMITED PARTNER" shall mean, with respect to any Portfolio
Investment, any Limited Partner that, pursuant to Section 5.2, is excused from
making a Capital Contribution or Associated Contribution, as the case may be, in
respect thereof.
"EXERCISING PARTNER" shall have the meaning set forth in Section
5.3(a).
43
"FISCAL YEAR" shall mean the fiscal year of the Partnership, as
determined pursuant to Section 1.5.
"FORFEITED DISTRIBUTIONS" shall have the meaning set forth in Section
5.3(a).
"GENERAL PARTNER" shall mean MMC GP III, Inc., a Delaware corporation,
and any additional or successor general partner of the Partnership in its
capacity as a general partner of the Partnership, as such entity may be affected
by the provisions of Section 2.7.
"GOVERNMENTAL AUTHORITY" shall mean any United States federal, state or
local, or any Cayman Islands or other non-U.S. court, arbitrator or governmental
agency, authority, commission, instrumentality or administrative or regulatory
body.
"INITIAL AGREEMENT" shall have the meaning set forth in the initial
paragraph of this Agreement.
"INITIAL CLOSING" shall mean the first Closing under which Limited
Partners have acquired interests in the Partnership pursuant to the Subscription
Agreements.
"INITIAL LIMITED PARTNER" shall mean Xxxxx X. Xxxxxxx, in such capacity
as the initial limited partner of the Partnership.
"INSTITUTIONAL FUND AGREEMENT" shall mean the Amended and Restated
Limited Partnership Agreement, as amended from time to time, of the
Institutional Fund.
"INSTITUTIONAL FUND" shall have the meaning set forth in Section 1.3.
"INVESTMENT ADVISERS ACT" shall mean the United States Investment
Advisers Act of 1940, as amended from time to time, and any successor statute
thereto.
"INVESTMENT COMPANY ACT" shall mean the United States Investment
Company Act of 1940, as amended from time to time, and any successor statute
thereto.
"INVESTMENT COMPANY" shall mean any Person that comes within the
definition of "investment company" contained in the Investment Company Act.
"KEY EMPLOYEES" shall mean the following key employees of the Manager:
Xxxxxxx X. Xxxxx, Xxxxx X. Xxxxxxxxx and Xxxxxxx X. Xxxxx; PROVIDED, that the
provisions of this Agreement expressly governing the Key Employees shall not
apply to any aforementioned individual in such individual's capacity as a Key
Employee after such individual has ceased to provide services as described in
Section 2.4(e) of the limited partnership agreement of the Institutional Fund.
44
"LIMITED PARTNERS" shall have the meaning set forth in Section 1.1(a),
shall mean the Cash Limited Partners, any Employer Limited Partners and the
Profits Limited Partners and all other Partners admitted (excluding, without
limitation, all Persons that cease to be Partners in accordance with the terms
hereof), from time to time, as limited partners of the Partnership in accordance
with the provisions of this Agreement and as set forth in the Partnership
Register, and shall include without limitation such Partner's successors and
permitted assigns.
"MMC CAPITAL CAUSE DETERMINATION" shall mean, with respect to any
Limited Partner, a determination (made in a reasonable manner) by the General
Partner (in the case of a Cash Limited Partner) or the relevant Employer Limited
Partner (in the case of a Profits Limited Partner) that such Limited Partner has
committed one or more acts involving gross negligence or willful misconduct.
"MMC CAPITAL PLAN" shall mean the SecondAmended and Restated MMC
Capital Inc. Deferred Compensation and Profits Limited Partnership Plan
effective as of November 17, 2003.
"MAJORITY IN INTEREST" shall mean Partners who, at the time in
question, have Capital Account balances having values equal to more than 50% of
the aggregate Capital Account balances of all the Cash Limited Partners who are
not Defaulting Cash Limited Partners and all Profits Limited Partners who are
not Defaulting Profits Limited Partners.
"MANAGER" shall mean MMC Capital, Inc., a Delaware corporation, or any
successor thereto.
"MATERIAL ADVERSE EFFECT" shall mean, as applicable, (A) a violation of
a statute, rule or governmental administrative policy applicable to a Partner
regulation of a Governmental Authority which could a material adverse effect on
a Portfolio Company or any Affiliate thereof or on the Partnership, the General
Partner, the Manager or any of their respective Affiliates or on any Partner or
any Affiliate of any such Partner, or (B) an occurrence which could subject a
Portfolio Company or Affiliate thereof or the Partnership, the General Partner,
the Manager or any of their respective Affiliates or any Partner or any
Affiliate of any such Partner to any material tax or material regulatory
requirement to which it would not otherwise be subject, or which could
materially increase any such material tax or material regulatory requirement
beyond what it would otherwise have been.
"MMC" shall mean Xxxxx & XxXxxxxx Companies, Inc., a Delaware
corporation, and any successors thereto, and, as the context requires, its
subsidiaries and other Affiliates, including Xxxxx Inc., Xxxxxx Inc. and Xxxxxx
Investments LLC.
"NASDAQ" shall mean The Nasdaq Stock Market, Inc.
45
"ORGANIZATIONAL EXPENSES" shall mean all costs and expenses that, in
the sole judgment of the General Partner, are incurred in, or are incidental to,
the formation and organization of, and sale of interests in, the Partnership,
including, without limitation, out-of-pocket legal, accounting, printing,
consultation, travel, administrative and filing fees and expenses, but only
those expenses that the General Partner has determined, in its sole discretion,
are properly borne by the Partnership.
"PARTNERS" shall have the meaning set forth in Section 1.1(a).
"PARTNERSHIP" shall have the meaning set forth in the initial paragraph
of this Agreement.
"PARTNERSHIP EXPENSES" shall mean the Partnership's pro rata share,
based on the capital commitments of each of the Co-Investment Funds, of the
expenses incurred in the operation of the Co-Investment Funds.
"PARTNERSHIP LAW" shall mean the Exempted Limited Partnership Law (2003
Revision) of the Cayman Islands, as amended, and any successor to such statute.
"PARTNERSHIP REGISTER" shall have the meaning set forth in Section
1.1(b).
"PERIOD" shall mean, for the first period, the period commencing on the
date of this Agreement and ending on the next Adjustment Date. All succeeding
Periods shall commence on the calendar day after an Adjustment Date and end on
the next Adjustment Date.
"PERSON" shall mean any individual, entity, corporation, partnership,
association, limited liability company, limited liability partnership,
joint-stock company, trust or unincorporated organization.
"PORTFOLIO COMPANY" shall mean an entity in which a Portfolio
Investment is made by the Partnership directly or through one or more
intermediate entities of the Partnership.
"PORTFOLIO INVESTMENT" shall mean any debt or equity (or debt with
equity) investment (including, without limitation, Temporary Investments and
bridge financings) made by the Partnership.
"POWER OF ATTORNEY" shall mean, with respect to any Limited Partner,
the Power of Attorney executed by such Partner substantially in the form
attached to the Subscription Agreements.
"PRIME RATE" shall mean the rate of interest publicly announced by
JPMorgan Chase Bank from time to time in New York City as its prime rate.
46
"PROCEEDING" shall have the meaning set forth in Section 10.1(a).
"PROFITS LIMITED PARTNERS" shall have the meaning set forth in Section
3.1(b).
"REMAINING ASSOCIATED COMMITMENT" shall mean, in respect of any Profits
Limited Partner, the amount of the Employer Limited Partner's Capital Commitment
associated with such Profits Limited Partner, determined at any date, which has
not been contributed as an Associated Contribution, as adjusted as contemplated
hereby.
"REMAINING CAPITAL COMMITMENT" shall mean, in respect of any Partner,
the amount of such Partner's Capital Commitment, determined at any date, which
has not been contributed as a Capital Contribution, as adjusted as contemplated
hereby.
"RETIREMENT" shall have the meaning ascribed to such term in the MMC
Benefits Program.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended from
time to time, and any successor statute thereto, and the rules and regulations
of the United States Securities and Exchange Commission promulgated thereunder.
"SECURITIES" shall mean shares of capital stock, partnership interests,
limited liability company interests, warrants, options, bonds, notes, debentures
and other securities and equity interests of whatever kind of any Person,
whether readily marketable or not.
"SHARING PERCENTAGE" shall mean with respect to any Partner (other than
the Employer Limited Partners) and any Portfolio Investment, a fraction,
expressed as a percentage, the numerator of which is the aggregate amount of the
Capital Contributions of such Partner (or, in the case of a Profits Limited
Partner, the Capital Contributions of the Employer Limited Partner associated
with such Profits Limited Partner) used to fund the cost of such Portfolio
Investment and the denominator of which is the aggregate amount of the Capital
Contributions of all of the Partners used to fund the cost of such Portfolio
Investment. The Sharing Percentage of each Employer Limited Partner for each
Portfolio Investment shall be 0%.
"SPECIAL INVESTMENT VEHICLE" shall have the meaning ascribed to it in
the Institutional Fund Agreement.
"STATEMENT" shall have the meaning set forth in Section 1.4.
"SUBSCRIPTION AGREEMENTS" shall mean the several Subscription
Agreements entered into by the respective Limited Partners in connection with
their purchase of limited partner interests in the Partnership.
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"SUBSTITUTE LIMITED PARTNER" shall have the meaning set forth in
Section 11.1(e).
"TEMPORARY INVESTMENT" shall mean investments in (A) cash equivalents,
(B) marketable direct obligations issued or unconditionally guaranteed by the
United States of America, or issued by any agency thereof, maturing within one
year from the date of acquisition thereof, (C) money market instruments,
commercial paper or other short-term debt obligations having at the date of
purchase by the Partnership the highest or second highest rating obtainable from
either Standard & Poor's Ratings Services or Xxxxx'x Investors Service, Inc. or
their successors, (D) money market mutual funds managed by Xxxxxx Investments,
Inc. or a subsidiary thereof, (E) interest bearing accounts and/or certificates
of deposit maturing within one year from the date of acquisition thereof issued
by commercial banks incorporated under the laws of the United States of America
or any state thereof or the District of Columbia, each having at the date of
acquisition by the Partnership undivided capital and surplus in excess of $100
million, combined capital and surplus of not less than $100,000,000, (F)
overnight repurchase agreements with primary Fed dealers collateralized by
direct U.S. Government obligations or (G) pooled investment vehicles or accounts
which invest only in Securities or instruments of the type described in (a)
through (d). If there exists any uncertainty as to whether any investment by the
Partnership constitutes a Temporary Investment or a Portfolio Investment, such
investment shall be deemed a Temporary Investment unless the General Partner
determines in its sole discretion that such investment is a Portfolio
Investment.
"TERM" shall have the meaning set forth in Section 1.4.
"TIER 1 CASH LIMITED PARTNER" shall mean a Limited Partner who is a
present or former Key Employee, or estate planning vehicle thereof or any
successor or Transferee (other than an Employer Limited Partner or the General
Partner) with respect to the Cash Limited Partner Interest of such present or
former Key Employee.
"TIER 1 LIMITED PARTNER" shall mean a Limited Partner that is a Tier 1
Cash Limited Partner or a Tier 1 Profits Limited Partner.
"TIER 1 PROFITS LIMITED PARTNER" shall mean a Limited Partner who is a
present or former Key Employee, or any successor or Transferee (other than an
Employer Limited Partner or the General Partner) with respect to the Profits
Limited Partner interest of such present or former Key Employee.
"TOTAL DISABILITY" shall have the meaning ascribed to such term in the
MMC Benefits Program.
"TRANSFER" shall have the meaning set forth in Section 11.1(a).
"TRANSFEREE" shall have the meaning set forth in Section 11.1(b).
48
"TRANSFEROR" shall have the meaning set forth in Section 11.1(b).
"TREASURY REGULATIONS" shall mean the Regulations of the Treasury
Department of the United States issued pursuant to the Code.
"VALUE" shall have the meaning set forth in Section 8.4.
SECTION 15
AMENDMENTS; POWER OF ATTORNEY
15.1 AMENDMENTS. Any modifications or amendments duly adopted in
accordance with the terms of this Agreement may be executed in accordance with
Section 15.2. The terms and provisions of this Agreement may be modified or
amended at any time and from time to time with the written consent of (A) the
General Partner and (B) a Majority in Interest; PROVIDED, HOWEVER, that without
the consent of the Limited Partners, the General Partner:
(i) may amend the Partnership Register from time to time as
provided in Section 1.1(b);
(ii) may enter into agreements with Persons who are
Transferees of the interests in the Partnership of Limited Partners,
pursuant to the terms of this Agreement, providing that such
Transferees will be bound by this Agreement and will become Substitute
Limited Partners in the Partnership;
(iii) may amend this Agreement as may be required to implement
(A) Transfers of interests of Limited Partners as contemplated by
Section 11.1, (B) the admission of any Substitute Limited Partner or
any Additional Limited Partner, and any related changes in Capital
Commitments, as contemplated by Section 11.1 or 11.2, (C) any changes
in the Partnership Register due to a Cash Limited Partner Default or
Profits Limited Partner Default, (D) the conversion, Transfer or merger
of all or any part of its interest as general partner of the
Partnership as contemplated by Section 2.7, or (E) a reorganization of
the Partnership as contemplated by Section 13.6;
(iv) may amend this Agreement (A) to satisfy any requirements,
conditions, rulings, guidelines or opinions contained in any opinion,
directive, order, ruling or regulation of the Securities and Exchange
Commission, the Internal Revenue Service or any other U.S. federal or
state or non-U.S. agency, or in any U.S. federal or state or non-U.S.
statute, compliance with which the General Partner deems to be in the
best interests of the Partnership, and (B) to change the name of the
Partnership, so long as any such amendment under this clause (iv) does
not
49
materially and adversely affect the interests of the Limited Partners
under this Agreement;
(v) may amend this Agreement in accordance with Section 5.7
and/or 15.2; and
(vi) may amend this Agreement to cure any ambiguity or correct
or supplement any provision hereof that may be incomplete or
inconsistent with any other provision hereof so long as such amendment
under this clause (vi) does not materially and adversely affect the
interests of the Limited Partners;
and PROVIDED FURTHER, that, notwithstanding the foregoing, no amendment of this
Agreement shall
(1) materially increase any financial obligation or
liability of a Limited Partner or reduce the economic rights
of a Limited Partner beyond that set forth herein or permitted
hereby without such Limited Partner's consent,
(2) materially and adversely affect the rights of a
Limited Partner in a manner which discriminates against such
Limited Partner vis-a-vis other Limited Partners without the
consent of such Limited Partner,
(3) change the provisions of Section 3.2, Section
13.1, Section 13.2, Section 13.3, Section 13.4, or this
Section 15.1 without the consent of a Majority in Interest,
(4) change the definition of "Majority in Interest"
in Section 14.1 without the consent of a Majority in Interest,
or
(5) modify or amend any defined term, if such
modification or amendments will have a material and adverse
effect on the substantive rights of the Limited Partners
provided for in such section.
15.2 POWER OF ATTORNEY. Each Limited Partner does hereby irrevocably
constitute and appoint the General Partner with full power of substitution, the
true and lawful attorney-in-fact and agent of such Limited Partner, to take or
cause to be taken, or omit or cause to be omitted, any and all actions should
the General Partner, in its sole discretion, deem such actions or omissions to
be necessary, advisable, appropriate, proper, convenient or incidental to, or
for the furtherance of the purposes of, the Partnership, PROVIDED that such
actions or omissions do not materially and adversely affect the interests of the
Limited Partners at the time of such action or omission; including, without
limitation, the power and authority to execute, acknowledge, verify, swear to,
deliver, record and file, in its or its assignee's name, place and stead, all
agreements, instruments,
50
documents and certificates (i) which may from time to time be required by the
laws of the United States of America, the Cayman Islands, any other jurisdiction
in which the Partnership conducts or plans to conduct business, or any political
subdivision or agency thereof, to effectuate, implement and continue the valid
existence and business of the Partnership, or (ii) which the General Partner
deems to be necessary, advisable, appropriate, proper, convenient or incidental
to, or for the furtherance of the purposes of, the Partnership, including,
without limitation, the power and authority to execute, verify, swear to,
acknowledge, deliver, record and file:
(a) all certificates and other instruments, including, without
limitation, this Agreement, and any amendments thereto or to the
Statement, which the General Partner deems appropriate to (i) form,
qualify or continue the Partnership as an exempted limited partnership
(or a partnership in which the limited partners have limited liability)
in the Cayman Islands and all other jurisdictions in which the
Partnership has an office or conducts or plans to conduct business, and
(ii) admit such Person as a Limited Partner in the Partnership;
(b) all instruments which the General Partner deems
appropriate to reflect or effect any amendment to this Agreement or the
Statement (i) to reflect or effect Transfers of interests of Limited
Partners, the admission of Substitute Limited Partners or Additional
Limited Partners, or the increase of Capital Commitments pursuant to
Section 11, (ii) to satisfy any requirements, conditions, guidelines or
opinions contained in any opinion, directive, order, ruling or
regulation of the United States Securities and Exchange Commission, the
United States Internal Revenue Service or any other Governmental
Authority, or in any United States federal or state or local or any
Cayman Islands or other non-U.S. statute, compliance with which it
deems to be in the best interests of the Partnership, (iii) to change
the name of the Partnership or reflect or effect a reorganization of
the Partnership, as contemplated by Section 13.6, (iv) to reflect or
effect the conversion of the General Partner to, or the merger of the
General Partner with and into, a limited partnership, limited liability
company or other entity, or the Transfer of its interest in the
Partnership to a limited partnership, limited liability company or
other entity, as contemplated by Section 2.7, and (v) to cure any
ambiguity or correct or supplement any provision contained in this
Agreement that may be incomplete or inconsistent with any other
provision contained in this Agreement so long as such amendment under
this clause (v) does not adversely affect the interests of the Limited
Partners;
(c) all conveyances and other instruments which the General
Partner deems appropriate to reflect and effect the dissolution and
termination of the Partnership pursuant to the terms of this Agreement,
including, without limitation, the filing of a notice of dissolution as
provided for in Section 13;
51
(d) all instruments relating to (i) Transfers of interests in
the Partnership, or the admission of Substitute Limited Partners or
Additional Limited Partners pursuant to Section 11.1, (ii) the
treatment of a Defaulting Cash Limited Partner, a Defaulting Profits
Limited Partner, or an Excused Limited Partner, or a Limited Partner
whose participation in an investment is excused, limited or
discontinued pursuant to Section 5.2 or (iii) any change in the Capital
Commitment of any Limited Partner, all in accordance with the terms of
this Agreement;
(e) all amendments to this Agreement duly adopted in
accordance with Section 15.1;
(f) certificates of assumed name and such other certificates
and instruments as may be necessary under the fictitious or assumed
name statutes from time to time in effect in the Cayman Islands and any
other jurisdiction in which the Partnership has an office or conducts
or plans to conduct business;
(g) any other instruments determined by the General Partner to
be necessary or appropriate in connection with the proper conduct of
the business of the Partnership and which do not adversely affect the
interests of the Limited Partners; and
(h) all certificates, conveyances and other instruments which
the General Partner deems necessary, appropriate, convenient or
desirable (i) to form, qualify or continue, or to admit such Limited
Partner as a limited partner of, or to change capital commitments with
respect to, any Special Investment Vehicle, or (ii) otherwise in
connection with such Special Investment Vehicle to the same extent as
provided with respect to the Partnership in this Section 15.2,
PROVIDED, that such action does not materially and adversely affect the
interests of such Limited Partner at the time of such action.
Such attorney-in-fact and agent shall not, however, have the right, power or
authority to amend or modify this Agreement when acting in such capacities,
except to the extent authorized herein. This power of attorney shall not be
affected by the subsequent disability or incompetence of the principal. This
power of attorney shall be deemed to be coupled with an interest, shall be
irrevocable, shall survive and not be affected by the dissolution, bankruptcy or
legal disability of any Limited Partner and shall extend to such Limited
Partner's successors and assigns. This power of attorney may be exercised by
such attorney-in-fact and agent for all Limited Partners (or any of them) by a
single signature of the General Partner acting as attorney-in-fact with or
without listing all of the Limited Partners executing an instrument. Any person
dealing with the Partnership may conclusively presume and rely upon the fact
that any instrument referred to above, executed by such attorney-in-fact and
agent, is authorized, regular and binding, without further inquiry. If required,
each Limited Partner shall execute and deliver to the General
52
Partner, within five Business Days after receipt of a request therefor, such
further designations, powers of attorney or other instruments as the General
Partner shall reasonably deem necessary for the purposes hereof. The foregoing
power of attorney as in effect at the time of any reorganization of the
Partnership pursuant to Section 13.6 shall thereafter continue in full force and
effect, and shall apply to the limited partnership, limited liability company or
other entity that becomes the successor to the Partnership pursuant to such
reorganization. The foregoing power of attorney as in effect at the time of the
conversion of, Transfer by, or merger of the General Partner pursuant to Section
2.7 shall, thereafter continue in full force and effect and shall apply to the
limited partnership, limited liability company, or other entity that becomes the
successor to the General Partner pursuant to such conversion, Transfer or
merger.
15.3 FURTHER ACTIONS OF THE LIMITED PARTNERS. Each Limited Partner
shall execute and deliver such other certificates, agreements and documents, and
take such other actions, as may reasonably be requested by the General Partner
in connection with the formation of the Partnership and the achievement of its
purposes and not inconsistent with the terms and provisions of this Agreement,
including, without limitation, (A) any documents that the General Partner deems
necessary or appropriate to form, qualify or continue the Partnership as a
limited partnership in all jurisdictions in which the Partnership conducts or
plans to conduct business and (B) all such agreements, certificates, tax
statements and other documents as may be required to be filed in respect of the
Partnership.
SECTION 16
MISCELLANEOUS PROVISIONS
16.1 NOTICES. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
transmitted by (A) registered or certified mail, return receipt requested,
postage prepaid, (B) hand delivery service prepaid, (C) next day or overnight
mail or delivery, in each case postage or service prepaid, (d) email (and, in
the case of a Partner who is no longer an employee of the Manager, confirmed by
phone, fax or return email) or (E) telecopy or facsimile, confirmed by telephone
or facsimile communication with such individual. All notices to any Partner
shall be addressed to such Partner and its trustee (if any) at their respective
addresses set forth in the Partnership Register or at such other address as such
Partner may have designated by notice in writing. Any Partner, other than the
General Partner, may designate a new address by written notice to that effect
given to the General Partner. The General Partner may designate a new address by
written notice to that effect given to all of the other Partners. All such
notices, requests, demands, waivers and other communications shall be deemed to
have been received (i) if by email, on the day immediately following the day
upon which such email was transmitted, (ii) if by personal delivery, on the day
after such delivery, (iii) if by certified or registered mail, on the fifth
53
business day after the mailing thereof, (IV) if by next-day or overnight mail or
delivery, one day after the mailing thereof, or (V) if by facsimile, on the day
immediately following the day on which such facsimile was sent.
16.2 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original and all of which
taken together shall constitute a single agreement.
16.3 TABLE OF CONTENTS AND HEADINGS. The table of contents and the
headings of the sections of this Agreement are inserted for convenience of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provision hereof.
16.4 SUCCESSORS AND ASSIGNS. Except as otherwise specifically provided
herein, this Agreement shall inure to the benefit of and be binding upon the
parties and to their respective heirs, executors, administrators, successors and
permitted assigns.
16.5 SEVERABILITY. Every term and provision of this Agreement is
intended to be severable. If any term or provision hereof is illegal or invalid
for any reason whatsoever, such term or provision will be enforced to the
maximum extent permitted by applicable law and, in any event, such illegality or
invalidity shall not affect the validity of the remainder of this Agreement. Any
default hereunder by a Limited Partner shall not excuse a default by any other
Limited Partner.
16.6 NON-WAIVER. No provision of this Agreement shall be deemed to have
been waived except if the giving of such waiver is contained in a written notice
given to the party claiming such waiver and no such waiver shall be deemed to be
a waiver of any other or further obligation or liability of the party or parties
in whose favor the waiver was given.
16.7 APPLICABLE LAW (SUBMISSION TO JURISDICTION). EXCEPT AS PROVIDED IN
THE DEFINITION OF "DISABLING CONDUCT", THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE INTERPRETED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE CAYMAN ISLANDS. The General
Partner hereby submits to the nonexclusive jurisdiction of the courts of the
Cayman Islands and to the courts of the jurisdiction in which the principal
office of the Partnership is located (and, if the principal office is located in
the United States, of the federal district court having jurisdiction over the
location of the principal office) for the resolution of all matters pertaining
to the enforcement and interpretation of this Agreement.
16.8 CONFIDENTIALITY. Each Limited Partner agrees that it shall not
disclose without the prior consent of the General Partner (other than to such
Limited Partner's employees, auditors, actuaries, counsel or prospective
transferees; PROVIDED, that such
54
Limited Partner obtain the agreement of such Person to be bound by the
obligations of this Section 16.8) any information with respect to the
Partnership or the other Co-Investment Funds or any Portfolio Company that is
designated by the General Partner to such Limited Partner in writing as
confidential, PROVIDED that a Limited Partner may disclose any such information
(A) as has become generally available to the public, (B) as may be required or
appropriate in any report, statement or testimony submitted to any Governmental
Authority having jurisdiction over such Limited Partner, or to the National
Association of Insurance Commissioners or similar organizations and their
successors, (C) as may be required or appropriate in response to any summons or
subpoena or in connection with any litigation, (D) to the extent necessary in
order to comply with any law, order, regulation, ruling or other governmental
request applicable to such Limited Partner, (E) to its professional advisors and
(F) that constitutes United States federal income tax treatment or tax structure
of the Partnership (including transactions undertaken by the Partnership) and
all materials of any kind (including opinions or other tax analyses) that are
provided to such Limited Partner relating to such tax treatment and tax
structure, PROVIDED that, subject to the remainder of this Section 16.8 other
than Section 16.8(f), prior to the final Closing of the Partnership, Limited
Partners may not disclose the name of (or any other similar identifying
information, including the names of any employees, affiliates or investments
regarding) the Partnership, the General Partner or the Portfolio Investments
(other than their status for United States federal income tax purposes), except
to their tax advisors or to a regulatory authority as required by law.
Notwithstanding anything in this Agreement to the contrary, the General Partner
shall have the right to keep confidential any information known by the General
Partner as to Portfolio Companies, Portfolio Investments or other aspects of the
Partnership's investment activities if and to the extent that the General
Partner determines that keeping such information confidential is in the best
interests of the Partnership or that the Partnership is required by law or
agreement with a third party to keep confidential.
16.9 SURVIVAL OF CERTAIN PROVISIONS. The obligations of each Partner
pursuant to Section 6.11(d) and Section 10 shall survive the termination or
expiration of this Agreement and the dissolution, winding up and termination of
the Partnership.
16.10 WAIVER OF PARTITION. Except as may otherwise be provided by law
in connection with the winding-up, liquidation and dissolution of the
Partnership, each Partner hereby irrevocably waives any and all rights that it
may have to maintain an action for partition of any of the Partnership's
property.
16.11 ENTIRE AGREEMENT. This Agreement (including, without limitation,
all Schedules attached hereto) and the Subscription Agreements, the related
Powers of Attorney and any other written agreement between the General Partner
or the Partnership and any Limited Partner with respect to the subject matter
hereof, shall constitute the entire agreement and understanding among the
Partners and between the Partners and the Initial Limited Partner with respect
to the subject matter hereof, and shall supersede any
55
prior agreement or understanding among them hereto with respect to the subject
matter hereof, PROVIDED that the representations and warranties of the General
Partner and the Limited Partners in, and the other provisions of, the
Subscription Agreements shall survive the execution and delivery of this
Agreement.
16.12 CURRENCY. The term "dollar" and the symbol "$", wherever used in
this Agreement, shall mean the United States dollar.
56
IN WITNESS WHEREOF, the undersigned have duly executed this Amended and
Restated Limited Partnership Agreement of Trident III Professionals Fund, L.P.
on the day and year first above written.
GENERAL PARTNER:
MMC GP III, INC.
By: __________________________________
Name:
Title:
INITIAL LIMITED PARTNER:
SOLELY TO REFLECT THE WITHDRAWAL OF
THE INITIAL LIMITED PARTNER FOR PURPOSES
OF SECTION 1.1:
------------------------------
LIMITED PARTNERS:
Each of the Limited Partners listed in
the Partnership Register, pursuant to
the power of attorney and authorization
granted by each such Limited Partner to
the General Partner as attorney-in-fact
and agent under the separate Powers of
Attorney, dated various dates:
By: MMC GP III, INC.
By: _____________________________
Name:
Title:
MANAGER:
SOLELY FOR THE PURPOSE OF ACCEPTING THE
APPOINTMENT CONTAINED IN SECTION 7.
MMC Capital, Inc.
By:
------------------------------------
Name:
Title:
58
