DRAFT Exhibit 10.19
THE LIMITED PARTNER INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF ANY
STATE OR FOREIGN JURISDICTION AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT
COMPLIANCE WITH APPLICABLE FEDERAL, STATE OR FOREIGN SECURITIES LAWS. IN
ADDITION, TRANSFER OR OTHER DISPOSITION OF THE LIMITED PARTNER INTERESTS IS
RESTRICTED AS PROVIDED IN THIS AGREEMENT.
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
GCP MANAGING PARTNER, L.P.
DATED AS OF
MARCH 31, 2004
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE 1
GENERAL PROVISIONS
Section 1.01. Definitions......................................................................1
Section 1.02. Name of the Partnership..........................................................1
Section 1.03. Continuation of the Partnership..................................................1
Section 1.04. Purposes of the Partnership and Powers...........................................1
Section 1.05. Office; Registered Agent.........................................................2
Section 1.06. Title to Partnership Property....................................................2
Section 1.07. Filing of Certificates...........................................................2
Section 1.08. Admission of Limited Partners....................................................3
Section 1.09. Subsequent Admission of Limited Partners.........................................3
ARTICLE 2
GOVERNANCE; MANAGEMENT AND OPERATIONS OF THE PARTNERSHIP
Section 2.01. Management of the Partnership....................................................4
Section 2.02. Powers of the General Partner....................................................4
Section 2.03. Investment Committee.............................................................6
Section 2.04. Transactions with Affiliates.....................................................6
Section 2.05. Other Activities.................................................................7
Section 2.06. Books and Records; Accounting Method; Fiscal Year................................7
Section 2.07. Partnership for Tax Purposes; Partnership Tax Returns............................8
Section 2.08. Confidentiality..................................................................9
Section 2.09. Investment of Funds.............................................................10
Section 2.10. Other Authority.................................................................10
ARTICLE 3
CARRIED INTEREST POINTS; CERTAIN OTHER MATTERS
Section 3.01. General Provisions..............................................................11
Section 3.02. Assignment of Carried Interest Points...........................................11
Section 3.03. Pro Rata Dilution...............................................................13
Section 3.04. No Right to Awards or Continued Employment......................................13
Section 3.05. Effect of Termination of Employment.............................................13
Section 3.06. Other Provisions Relating to Special Limited Partners...........................15
ARTICLE 4
EXPENSES
Section 4.01. Definition of Expenses..........................................................16
Section 4.02. Responsibility for Partnership Expenses among the Partners......................17
ARTICLE 5
CAPITAL CONTRIBUTIONS; CLAWBACK OBLIGATIONS
Section 5.01. Capital Contributions...........................................................17
Section 5.02. Payment of Capital Contributions................................................17
ARTICLE 6
CAPITAL ACCOUNTS; ALLOCATIONS; DISTRIBUTIONS
Section 6.01. Principles of Distributions Attributable to Invested Capital....................18
Section 6.02. Principles of Distributions Attributable to Carried Interest....................18
Section 6.03. Other Provisions Relating to Distributions......................................19
Section 6.04. Capital Accounts; Adjustments to Capital Accounts...............................20
Section 6.05. Tax Allocations.................................................................21
Section 6.06. Foreign Currency Considerations.................................................22
Section 6.07. Segregated Accounts; Netting of Carried Interest Shares; Distributions
from Segregated Accounts........................................................22
Section 6.08. Loans and Withdrawal of Amounts Allocated to Capital Accounts...................24
Section 6.09. Repayment of Certain Distributions..............................................24
ARTICLE 7
REPORTS TO LIMITED PARTNERS
Section 7.01. Reports.........................................................................24
ARTICLE 8
EXCULPATION AND INDEMNIFICATION
Section 8.01. Exculpation and Indemnification.................................................25
ARTICLE 9
DURATION AND DISSOLUTION OF THE PARTNERSHIP
Section 9.01. Duration........................................................................27
Section 9.02. Dissolution.....................................................................27
Section 9.03. Liquidation of Partnership......................................................28
Section 9.04. Distribution upon Dissolution of the Partnership................................28
Section 9.05. Resignation of Limited Partners.................................................29
ii
ARTICLE 10
TRANSFERABILITY OF A LIMITED PARTNER'S INTEREST
Section 10.01. Restrictions on Transfer of Limited Partner Interests..........................29
Section 10.02. Expenses of Transfer; Indemnification..........................................30
Section 10.03. Recognition of Transfer; Substituted Partners..................................31
ARTICLE 11
TRANSFERABILITY OF GENERAL PARTNER'S INTEREST
Section 11.01. Transferability of General Partner's Interest..................................32
ARTICLE 12
MISCELLANEOUS
Section 12.01. Entire Agreement; Amendments; Waivers; Termination.............................32
Section 12.02. Mergers and Consolidations.....................................................33
Section 12.03. Investment Representation......................................................33
Section 12.04. Successors; Counterparts.......................................................34
Section 12.05. Governing Law; Severability....................................................34
Section 12.06. Further Assurance..............................................................34
Section 12.07. Filings........................................................................34
Section 12.08. Power of Attorney..............................................................34
Section 12.09. No Xxxx for Partnership Accounting.............................................35
Section 12.10. Goodwill.......................................................................35
Section 12.11. Notices........................................................................35
Section 12.12. Arbitration....................................................................36
Section 12.13. Withholding....................................................................37
Section 12.14. Headings.......................................................................37
ARTICLE 13
CLAWBACK OBLIGATIONS
Section 13.01. General Partner Clawback.......................................................37
Section 13.02. Guaranty.......................................................................37
Appendix A Definitions..................................................................A-1
Schedule I Initial Allocation of Carried Interest Points................................S-1
Schedule II Form of Award of Carried Interest Points.....................................S-2
Schedule III Capital Commitments..........................................................S-3
iii
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
GCP MANAGING PARTNER, L.P.
(A LIMITED PARTNERSHIP FORMED UNDER THE LAWS OF THE STATE OF DELAWARE)
AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF GCP Managing Partner, L.P. dated as of March 31, 2004.
WITNESSETH:
WHEREAS, Greenhill Fund Management Co., LLC, a Delaware limited
liability company, as General Partner, and Xxxxxx X. Xxxxxxx, as initial Limited
Partner, heretofore entered into an Agreement of Limited Partnership dated as of
March 31, 2004 (the "ORIGINAL AGREEMENT") and formed a limited partnership
pursuant to the Delaware Act;
WHEREAS, the parties hereto desire to continue the limited partnership
and to amend and restate the Original Agreement in its entirety.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE 1
GENERAL PROVISIONS
Section 1.01. Definitions. Capitalized terms used herein without
definition have the meanings assigned to them in Appendix A hereto.
Section 1.02. Name of the Partnership. The name of the Partnership is
GCP Managing Partner, L.P. The business of the Partnership shall be conducted
under such name or such other names (upon notice to all the Limited Partners) as
the General Partner may from time to time determine.
Section 1.03. Continuation of the Partnership. The General Partner and
the Limited Partners hereby continue the Partnership as a limited partnership
under and pursuant to the Delaware Act.
Section 1.04. Purposes of the Partnership and Powers. The Partnership
is formed for the object and purpose of, and the nature of the business to be
conducted and promoted by the Partnership, is engaging in any lawful act or
activity for which limited partnerships may be formed under the Delaware Act and
engaging in any and all activities necessary or incidental to the foregoing.
Without limiting the generality of the foregoing, the purpose of the Partnership
is
also to act as the general partner of Xxxxxxxxx Capital Partners, L.P.,
Xxxxxxxxx Capital Partners (Cayman), L.P., Xxxxxxxxx Capital Partners
(Executives), L.P., and Greenhill Capital, L.P. (the "FUNDS"). In furtherance of
its purposes, (a) the Partnership shall have and may exercise all of the powers
now or hereafter conferred by Delaware law on limited partnerships formed under
the Delaware Act, including without limitation, all of the powers that may be
exercised on behalf of the Partnership by any of its Partners and (b) the
Partnership shall have the power to do any and all acts necessary, appropriate,
proper, advisable, incidental or convenient to or for the protection and benefit
of the Partnership.
Section 1.05. Office; Registered Agent. (a) The Partnership's
registered agent and office in the State of Delaware shall be The Corporation
Trust Company, Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx
Xxxxxx Xxxxxx, Xxxxxxxx 00000.
(b) The business address of the Partnership shall be 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or (upon notice to all the Limited Partners) such
other address as may be designated by the General Partner.
Section 1.06. Title to Partnership Property. (a) All property of the
Partnership, whether real or personal, tangible or intangible, shall be owned by
the Partnership as an entity, and no Partner, individually, shall have any
direct ownership interest in such property. Title to all such property shall be
held in the name of the Partnership and all securities shall be registered in
the name of the Partnership.
(b) The Partnership shall, subject to the terms of this Agreement, be
the exclusive beneficial holder of all securities and other property acquired in
connection with any investment made by the Partnership and of any property
transferred to the Partnership, and the Partnership shall make any such filings
as may be required or desirable in connection therewith.
(c) Any and all rights, including, without limitation, voting rights,
rights to consent to, object to or grant waivers with respect to partnership,
limited partnership and corporate action, rights to sell, transfer or encumber
any securities or other property held by the Partnership and any rights arising
out of or relating to any documents the Partnership is party to, including the
right to consent to or object to any proposed amendment or modification thereof
or waiver thereunder, shall be vested exclusively in the Partnership and shall
be exercised only by the Partnership and no Partner either alone or acting with
one or more other Partners shall have any such rights with respect to such
securities or property.
Section 1.07. Filing of Certificates. The General Partner is hereby
authorized to execute, deliver and file, or to cause the execution, delivery and
filing of, all certificates (and all amendments and/or restatements thereof)
2
required or permitted by the Delaware Act to be filed in the office of the
Secretary of State of the State of Delaware and any other certificates, notices,
statements or other instruments (and any amendments or restatements thereof)
necessary or advisable for the formation of the Partnership or the operation of
the Partnership in all jurisdictions where the Partnership may elect to do
business.
Section 1.08. Admission of Limited Partners. Each of the Limited
Partners whose names appear on Schedule I shall be admitted to the Partnership
on the date hereof as a Limited Partner (and shall be shown as such on the books
and records of the Partnership) upon the execution and delivery by (or, pursuant
to a power-of-attorney, on behalf of) such Limited Partner and the General
Partner of counterparts of this Agreement.
Section 1.09. Subsequent Admission of Limited Partners. (a) At any
time, the General Partner may cause the Partnership to admit additional Persons
as Limited Partners; provided that no Person may be admitted to the Partnership
if, as a result of such admission, the Partnership or any of the Funds would not
be exempt from the provisions of the Investment Company Act. Such Person shall
become a Limited Partner (and shall be shown as such on the books and records of
the Partnership) upon execution and delivery by (or, pursuant to a
power-of-attorney, on behalf of) such Person and the General Partner of
counterparts of this Agreement. The admission of any additional Limited Partner
to the Partnership pursuant to this Section 1.09 shall not require the approval
of any Limited Partner existing immediately prior to such admission.
(b) The Limited Partners shall share in distributions or items of
income or gain of the Partnership attributable to any Fund Investment made prior
to the date such Person becomes a Limited Partner to the extent set forth in
Articles 3 and 6.
(c) No additional Limited Partner shall be admitted to the Partnership
if the admission of such Limited Partner would, in the judgment of the General
Partner (i) jeopardize the status of the Partnership as a partnership for United
States federal income tax purposes, (ii) cause a dissolution of the Partnership
under the Delaware Act, (iii) cause the Partnership's assets to be deemed "plan
assets" for purposes of ERISA, (iv) cause the Partnership to be an "investment
company" within the meaning of the Investment Company Act (except for purposes
of Section 12(d)(1) thereunder), (v) cause the Partnership to be in violation of
the Advisers Act or (vi) violate, or cause the Partnership to violate, any
applicable law or regulation, including any applicable federal or state
securities laws.
(d) Notwithstanding anything herein to the contrary, each Partner
hereby approves of any amendment of this Agreement and of the Certificate of
Limited Partnership necessary to effect the admission of any Person as a Partner
3
pursuant to Section 1.08 or this Section 1.09 or Article 10. Any amendment to
this Agreement permitted under this paragraph (d) may be executed by the General
Partner on behalf of each other Partner pursuant to the Power of Attorney given
by each other Partner to the General Partner pursuant to Section 12.08.
ARTICLE 2
GOVERNANCE; MANAGEMENT AND OPERATIONS OF THE PARTNERSHIP
Section 2.01. Management of the Partnership. The business and affairs
of the Partnership shall be managed by and under the direction of the General
Partner. Except as otherwise expressly provided herein, the General Partner
shall have complete and exclusive discretion in the management and control of
the affairs and business of the Partnership, and shall possess all powers
necessary, convenient or appropriate to carrying out the purposes and business
of the Partnership and to perform all acts and enter into and perform all
contracts and other undertakings that it may deem necessary or advisable or
incidental thereto, including doing all things and taking all actions necessary
to carry out the terms and provisions of this Agreement (and is hereby
authorized and directed, on behalf of the Partnership, to do all such things and
to take all such actions without any further act, vote, consent or approval of
any Partner). Except as otherwise expressly provided herein, the General Partner
may delegate such general or specific authority to officers, Limited Partners,
employees or agents of the Partnership as the General Partner considers
desirable from time to time, and such officers, Limited Partners, employees or
agents of the Partnership may, subject to any restraints or limitations imposed
by the General Partner, exercise the authority granted to them.
Section 2.02. Powers of the General Partner. Without limiting the
generality of the authority of the General Partner set forth in Section 2.01,
the General Partner hereby is authorized and empowered in the name and on behalf
of the Partnership and to the extent applicable and permitted under this
Agreement and the Fund Partnership Agreements:
(a) to serve as the general partner of the Funds;
(b) to acquire and hold the Partnership's general partner interest in
the Funds, and to sell, transfer, exchange, or otherwise dispose of such
interests, and otherwise to exercise all rights, powers, privileges, options and
other incidents of ownership or possession with respect to such interests or any
other assets or property held or owned by the Partnership or the Funds;
(c) to employ attorneys and accountants of the Partnership, which
attorneys and accountants may also serve as counsel and auditors to the Funds or
any of their respective Affiliates;
4
(d) to deposit the funds of the Partnership in the Partnership name in
any bank or trust company and to entrust to any such bank or trust company any
of the securities, monies, documents and papers belonging to or relating to the
Partnership, or to deposit in and entrust to any brokerage firm that is a member
of any national securities exchange any of said funds, securities, monies,
documents and papers;
(e) to set aside funds for reasonable reserves, reasonably anticipated
contingencies and reasonable working capital in the Partnership and the Funds;
(f) to make such elections under the Code and other relevant tax laws
as to the treatment of items of Partnership income, gain, loss and deduction,
and as to all other relevant matters, as the General Partner deems necessary,
appropriate or advisable, including elections referred to in Section 754 of the
Code, and a determination of which items of cash outlay are to be capitalized or
treated as current expenses;
(g) to xxx, prosecute, settle or compromise all claims against third
parties, to compromise, settle or accept judgment in respect of claims against
the Partnership and to execute all documents and make all representations,
admissions and waivers in connection therewith;
(h) to enter into, make and perform all contracts, agreements,
instruments and other undertakings as the General Partner may determine to be
necessary, advisable or incidental to carrying out of the objects and purposes
of the Partnership;
(i) to cause the execution and delivery of such documents and
performance of such acts consistent with the terms of this Agreement as may be
necessary to comply with the requirements of law for the formation,
qualification and operation of a limited partnership under the laws of each
jurisdiction in which the General Partner determines it is necessary or
advisable for the Partnership to conduct business; and
(j) to do and perform everything that may be necessary, advisable,
suitable or proper for the conduct of the Partnership's business for the
carrying out of the purposes and objects hereinbefore enumerated, including the
delegation to any Person or Persons of such functions and authorities as the
General Partner may determine.
Any Person not a party to this Agreement dealing with the Partnership shall be
entitled to rely conclusively upon the power and authority of the General
Partner to bind the Partnership in all respects, and to authorize the execution
of any and all agreements, instruments and other writings on behalf of and in
the name of the Partnership as and to the extent set forth in this Agreement.
5
Notwithstanding any other provision of this Agreement, the Partnership, and the
General Partner on behalf of the Partnership, may execute, deliver and perform
the Fund Partnership Agreements, subscription agreements with the limited
partners of the Funds, the Management Agreement among Greenhill Fund Management
Co., LLC and each Fund, any agreements to induce a Person to purchase interests
in the Funds, and any amendments to such documents, all without any further act,
vote or approval of any Partner or other Person. The General Partner is hereby
authorized to enter into and perform on behalf of the Partnership the documents
described in the immediately preceding sentence, but such authorization shall
not be deemed a restriction on the power of the General Partner to enter into
other documents on behalf of the Partnership (subject to any other restrictions
expressly set forth in this Agreement).
Section 2.03. Investment Committee. (a) The General Partner will
establish an Investment Committee to evaluate and discuss potential investments
and to review the performance of existing investments of the Funds.
(b) Each Limited Partner who is a member of the Investment Committee of
the General Partner agrees, in consideration for sharing in the Carried Interest
Points hereunder, to participate in meetings of the Investment Committee and, in
connection with his role on the Investment Committee, to provide the Partnership
with the benefit of his knowledge and judgment in the decision-making process
with respect to the acquisition and disposition of Investments by the Funds.
Each Limited Partner who is not a member of the Investment Committee agrees, at
the request of the Investment Committee, to provide the Partnership with the
benefit of his knowledge and judgment in order to assist the Investment
Committee in its evaluation with respect to the acquisition and disposition of
Investments.
(c) Notwithstanding anything to the contrary contained herein, the
members of the Investment Committee shall not be deemed to be participating in
the control of the business of the Partnership within the meaning of the
Delaware Act as a result of any actions taken by the Investment Committee or any
member of the Investment Committee.
(d) Notwithstanding anything to the contrary contained in this
Agreement, in no event shall a member of the Investment Committee be considered
a general partner of the Partnership by agreement, estoppel, as a result of the
performance of its duties, or otherwise.
Section 2.04. Transactions with Affiliates. To the extent permitted by
applicable law, the Partnership is hereby authorized to purchase property,
securities, options or other assets from, sell property, securities, options or
other assets to, borrow funds from, or otherwise deal with, Greenhill, any
Affiliate of Greenhill, any Person in which a Fund Investment has been or is
proposed to be
6
made, any Person having an interest in such Fund Investment (or any underlying
assets) or any Affiliate of any such Persons; provided that (i) any such dealing
(A) shall be on terms no less favorable to the Partnership than would be
available from unaffiliated Persons and (B) shall not otherwise be in violation
of this Agreement. In connection with any services performed by any Affiliate of
Greenhill for the Partnership, such Affiliate shall be entitled to be
compensated by the Partnership for such services to the extent such compensation
is a Partnership Expense, and the amount of such compensation shall be
determined by the General Partner in its discretion; provided that such
compensation at any time shall not exceed the amount such Affiliate would
customarily receive from third parties as compensation at such time for the
performance of similar services. Each Limited Partner acknowledges and agrees
that the purchase or sale of property or other assets, the performance of
services, other dealings or the receipt of compensation may give rise to
conflicts of interest between the Partnership and the Limited Partners, on the
one hand, and Greenhill or any Affiliate of Greenhill, on the other hand.
Section 2.05. Other Activities. Nothing contained in this Agreement
shall be deemed to prohibit or otherwise limit any Partner (or Affiliate
thereof) from entering into transactions with the Partnership, making
investments in Persons or assets in which Fund Investments have been or are
proposed to be made, in Persons having an interest in such Fund Investments (or
any underlying assets) or in any Affiliates of any such Persons or providing
financing to any such Person.
Section 2.06. Books and Records; Accounting Method; Fiscal Year. (a)
The Partnership shall keep or cause to be kept at the address of the Partnership
(or at such other place as shall be notified to the Limited Partners in writing)
full and accurate books and records of the Partnership. Each Limited Partner
shall be shown as a Limited Partner on such books and records. Subject to
Sections 2.06(b) and 3.06, such books and records shall be available, upon 10
Business Days' notice to the General Partner, for inspection at the offices of
the Partnership at reasonable times during business hours on any Business Day by
each Limited Partner or his duly authorized agents or representatives for a
purpose reasonably related to such Limited Partner's interest as a Limited
Partner.
(b) Each Limited Partner agrees that (i) the books and records of the
Partnership contain confidential information relating to the Partnership and its
affairs and (ii) except for information otherwise required to be provided or
made available to Limited Partners pursuant to this Agreement, the General
Partner may, to the maximum extent permitted by applicable law, keep
confidential from the Limited Partners any information (excluding any financial
statements of the Partnership and underlying documentation supporting such
financial statements) the disclosure of which the General Partner reasonably
believes is adverse to the interests of the Partnership (including information
relating to any Fund Investment or underlying assets or any Person that is,
directly or indirectly, the
7
subject of any Fund Investment) or which the Partnership, Greenhill or the
General Partner is required by law, agreement or otherwise to keep confidential.
(c) Except as otherwise provided in this Agreement, the Partnership's
books of account shall be kept on the same basis followed by the Partnership for
federal income tax purposes.
Section 2.07. Partnership for Tax Purposes; Partnership Tax Returns.
(a) The Partners agree that it is their intention that the Partnership shall be
treated as a partnership for purposes of United States federal, state and local
income tax laws, and further agree not to take any position or make any
election, in a tax return or otherwise, inconsistent therewith. In furtherance
of the foregoing, the Partnership will file an information return as a
partnership for United States federal income tax purposes. If a change in
applicable law (including a revenue ruling, revenue procedure or other
administrative pronouncement) would cause the Partnership not to be treated as a
partnership for United States federal income tax purposes, the Partners shall
endeavor in good faith to reach an agreement on restructuring the Partnership so
that it will be so treated (which may, subject to the following proviso, entail
a merger of the Partnership into an entity treated as a partnership for federal
income tax purposes); provided that no Limited Partner shall be required to
agree to any restructuring that it reasonably determines would have an adverse
effect on the assets, properties, business or condition, or otherwise would be
adverse to the interests of or cause the incurrence of any material expenditure
by, such Limited Partner or any Affiliate of such Limited Partner.
(b) The General Partner shall cause to be prepared and timely filed all
tax returns required to be filed for the Partnership. Subject to paragraph (a)
above, the General Partner may, in its discretion, make, or refrain from making,
any federal, state or local income or other tax elections for the Partnership
that it deems necessary or advisable, including an election pursuant to Code
Section 754.
(c) The General Partner is hereby designated as the Partnership's "TAX
MATTERS PARTNER" under Code Section 6231(a)(7). The Tax Matters Partner is
specifically directed and authorized to take whatever steps the General Partner,
in its discretion, deems necessary or desirable to perfect such designation,
including filing any forms or documents with the Internal Revenue Service and
taking such other action as may from time to time be required under Treasury
regulations. Expenses incurred by the Tax Matters Partner, in its capacity as
such, will be Partnership Expenses. Any Limited Partner shall have the right to
participate in any administrative proceedings relating to the determination of
Partnership items at the Partnership level. Each Limited Partner that elects to
participate in such proceedings shall be responsible for any expenses incurred
by such Limited Partner in connection with such participation. Further, a
Limited Partner shall notify the Tax Matters Partner in a timely manner of its
intention to: (i) file a
8
notice of inconsistent treatment under Code Section 6222(b); (ii) file a request
for administrative adjustment of Partnership items; (iii) file a petition with
respect to any Partnership item or other tax matters involving the Partnership
or (iv) enter into a settlement agreement with the Secretary of the Treasury
with respect to any Partnership items. Upon any such notification, the Tax
Matters Partner may, if it agrees with the Limited Partner's position, elect (at
its discretion) to make such filing or enter into such agreement, as applicable
and practicable, on behalf of the Partnership. The expenses in connection with
any resulting audits or adjustments of a Limited Partner's tax return shall be
borne solely by the affected Limited Partner.
(d) The General Partner may, in its discretion, take appropriate steps
on behalf of the Partnership that it deems necessary or advisable to comply with
the laws of non-U.S. jurisdictions.
Section 2.08. Confidentiality. (a) Each Limited Partner agrees to keep
confidential, and not to make any use of (other than for purposes reasonably
related to his interest in the Partnership or for purposes of filing such
Limited Partner's tax returns or for other routine matters required by law) nor
to disclose to any Person (other than to appropriate employees of Xxxxxxxxx or
its Affiliates associated with the business of the Partnership), any Proprietary
Information or any other information or matter relating to the Partnership or
any Fund and its respective affairs or to any Partnership or Fund Investment
(other than disclosure to employees, agents, advisors, or representatives of the
Partnership responsible for matters relating to the Partnership (each such
Person being hereinafter referred to as an "AUTHORIZED REPRESENTATIVE"));
provided that such Limited Partner and such Authorized Representatives may make
such disclosure to the extent that (i) the information being disclosed is
publicly known at the time of proposed disclosure by such Limited Partner or
Authorized Representative, (ii) the information subsequently becomes publicly
known through no act or omission of such Limited Partner or Authorized
Representative, (iii) such disclosure, in the written opinion of legal counsel
of such Limited Partner reasonably acceptable to the General Partner, is
required by law or regulation or by any regulatory authority or self-regulatory
organization having jurisdiction over such Limited Partner or (iv) such
disclosure is approved in advance by the General Partner. Prior to making any
disclosure required by law, regulation, regulatory authority or self-regulatory
organization, each Limited Partner shall notify the General Partner of such
disclosure and deliver to the General Partner the opinion referred to above.
Prior to any disclosure to any Authorized Representative, each Limited Partner
shall advise such Authorized Representative of the obligations set forth in this
Section 2.08(a) and obtain the agreement of such Person to be bound by the terms
of such obligation.
(b) The obligations of each Limited Partner under this Section 2.08
shall survive for a period of five years after the date such Limited Partner
ceases to be a
9
Limited Partner. If the Partnership is dissolved, the obligation of each Limited
Partner under this Section 2.08 who is a Limited Partner at the time of such
dissolution shall survive for a period of five years thereafter.
(c) Each party acknowledges and agrees that the covenants contained in
this Section 2.08 have been negotiated in good faith by the parties hereto, are
reasonable and are not more restrictive or broader than are necessary to protect
the interests of the Limited Partners and the Partnership, and would not achieve
their intended purpose if they were on different terms or for periods of time
shorter than the periods of time provided herein. Each party further
acknowledges and agrees that the business of the Partnership and the Funds is
highly competitive, that no party hereto would enter into this Agreement but for
the covenants contained in this Section 2.08 and that such covenants are
essential to protect the value of the business of the Partnership and the Funds.
Section 2.09. Investment of Funds. Cash held by the Partnership,
including all amounts being held by the Partnership for future investment in
Fund Investments, payment of expenses or distributions to Limited Partners may
be invested in such instruments as the General Partner, or any Person which it
has retained to manage such cash, in its discretion deems appropriate.
Section 2.10. Other Authority. The General Partner agrees to use its
best efforts to operate the Partnership in such a way that (i) the Partnership
would be exempt from the provisions of the Investment Company Act, (ii) none of
the Partnership's assets would be deemed to be "plan assets" for purposes of
Section 4975 of the Code or ERISA, (iii) the Partnership would be in compliance
with the Advisers Act, and (iv) the Partnership would be in compliance with any
other material law, regulation, order or guideline applicable to the
Partnership. The General Partner is hereby authorized to take any action it has
determined in good faith to be necessary or desirable in order for (i) the
Partnership's assets not to be "plan assets" for purposes of ERISA, (ii) the
Partnership to be exempt from the provisions of the Investment Company Act,
(iii) the Partnership not to be in violation of the Advisers Act and (iv) the
Partnership not to be in violation of any other material law, regulation, order
or guideline applicable to the Partnership, including, in each case, (x) making
any structural, operating or other changes in the Partnership by amending this
Agreement, (y) requiring the sale in whole or in part of a Limited Partner's
limited partner interest in the Partnership with respect to or as a result of
whom such violation arose, or otherwise causing the withdrawal of such Limited
Partner from the Partnership or (z) dissolving the Partnership. Any action taken
by the General Partner pursuant to Section 2.10 shall not require the approval
of any Limited Partner.
10
ARTICLE 3
CARRIED INTEREST POINTS; CERTAIN OTHER MATTERS
Section 3.01. General Provisions. (a) The General Partner shall be
solely responsible for making all determinations as to the Carried Interest
Points in accordance with this Article 3, at such times and in such amounts as
it shall deem advisable.
(b) Neither the General Partner nor any of its Affiliates shall be
liable to the Partnership or the Limited Partners for anything whatsoever in
connection with this Agreement except for the gross negligence or willful
misconduct of the General Partner or its Affiliates. In the performance of their
functions with respect to this Agreement, the General Partner and its Affiliates
shall be entitled to rely upon information and advice furnished by officers,
accountants or legal counsel of Xxxxxxxxx or its Affiliates, or by any other
party the General Partner deems necessary or appropriate as to matters the
General Partner reasonably believes are within such other person's professional
or expert competence and who has been selected with reasonable care by or on
behalf of the Partnership, and the General Partner and its Affiliates shall not
be liable to the Partnership or the Limited Partners for any action taken or not
taken in good faith reliance upon any such advice. The General Partner may
delegate such of its responsibilities hereunder as the General Partner deems
appropriate to one or more officers or directors of Xxxxxxxxx or its Affiliates
and in performing such delegated responsibilities, such persons shall have the
benefit of all the protections afforded the General Partner under this
Agreement.
Section 3.02. Assignment of Carried Interest Points. (a) On or prior to
January 1 of each fiscal year, commencing in 2004, or as soon as practicable
thereafter (the "ANNUAL ALLOCATION DATE"), the General Partner shall assign each
Partner (including the General Partner) a number (which may include fractional
numbers) of carried interest points (the "CARRIED INTEREST POINTS") for all Fund
Investments made by all Funds during the fiscal year commencing on such January
1 (the "CARRIED INTEREST ANNUAL POOL"). The aggregate number of Carried Interest
Points for any Fund Investment shall be 200, and the amount of the Carried
Interest with respect to each Fund Investment for such fiscal year allocated to
a Partner shall be calculated by multiplying the Carried Interest by a fraction,
the numerator of which shall be the number of points so assigned and the
denominator of which shall be 200. Each Carry Participating Partner's share of
the Carried Interest for any Fund Investment is referred to herein as his
"CARRIED INTEREST SHARE". With respect to each Fund Investment made during the
2004 fiscal year and with respect to Partners who have been admitted as such on
the date of this Agreement, the Carried Interest Points shall be set forth in
Schedule I to this Agreement with respect to such Partner (the "ALLOCATION
SCHEDULE"), which shall be maintained by the General Partner and the Partnership
and updated to reflect any changes in the allocation of Carried Interest Points.
The General
11
Partner shall advise each Partner of such Partner's Carried Interest Points in
effect at any time, and the General Partner may, in its discretion, to the
maximum extent permitted by applicable law, decline to disclose such Carried
Interest Points to any other Person. With respect to each Fund Investment made
during any fiscal year, the Carried Interest Points (as determined in accordance
with this Section 3.02(a) or adjusted in accordance with this Article 3) of each
Partner having an interest in such Fund Investment shall be set forth in the
Allocation Schedule. Except as otherwise provided in this Article 3, such
Carried Interest Points shall not be changed after they are determined in
accordance with this Section 3.02(a).
(b) The General Partner may award Carried Interest Points to newly
admitted Partners and may award additional Carried Interest Points to existing
Partners at any time during the course of a fiscal year. In making such award
the General Partner may, in its discretion, determine whether the Carried
Interest Points assigned to such Person shall be calculated as if such Person
was admitted as a Partner on the date such award was determined or any other
date or in any other manner that the General Partner in its discretion shall
determine is appropriate in light of the circumstances giving rise to such
determination. Such awards shall be made either from Reserved Carried Interest
Points, from Reallocated Carried Interest Points, from Forfeited Carried
Interest Points or through a reallocation of Carried Interest Points as provided
in Section 3.03.
(c) Notwithstanding anything in this Agreement to the contrary, the
General Partner may, in its discretion, elect to reserve a portion of the
Carried Interest Points for allocation at any time during the period ending on
January 31 of the fiscal year next succeeding the fiscal year for which an
allocation of Carried Interest Points has been made to any Partner (the
"RESERVED CARRIED INTEREST POINTS"). During any fiscal year, all Reserved
Carried Interest Points with respect to the Fund Investments made during such
fiscal year shall be initially allocated to the General Partner. From time to
time during each fiscal year, the General Partner will assign such Reserved
Carried Interest Points to Partners, pursuant to an Assignment of Carried
Interest Points as provided in Schedule II (either for an annual basis or an
investment by investment basis) and the Allocation Schedule shall be revised
accordingly to reflect such award. If the Reserved Carried Interest Points have
not been so allocated by January 31 of the next succeeding fiscal year, they
shall be allocated pro rata among the Partners based on each Partner's Carried
Interest Share in the relevant Fund Investments.
(d) If any Carried Interest Points awarded to any Partner are later
surrendered or forfeited by such Partner or otherwise reduced in accordance with
this Article 3, such surrendered, forfeited or reduced Carried Interest Points
shall, unless otherwise determined by the General Partner in its discretion, be
reallocated to the other Partners on a pro rata basis in accordance with their
Carried Interest Share in the relevant Fund Investments.
12
Section 3.03. Pro Rata Dilution. Initially, the Carried Interest Points
for the Carried Interest Annual Pool for 2004 will be allocated as set forth in
Schedule I. If an additional Partner admitted to the Partnership following the
award of Carried Interest Points in any fiscal year or any other Partner
receives a Carried Interest Point award which the General Partner determines is
not to come from Reserved Carried Interest Points, from Reallocated Carried
Interest Points or from Forfeited Carried Interest Points, the number of Carried
Interest Points of the Partners will be reduced on a pro rata basis by the
number of Carried Interest Points so awarded unless otherwise determined by the
General Partner.
Section 3.04. No Right to Awards or Continued Employment. No Partner
shall have any claim or right to receive any award of Carried Interest Points
hereunder. Neither this Agreement nor any action taken or omitted to be taken
hereunder shall be deemed to create or confer on any Partner any right (i) to be
retained in the employ of Xxxxxxxxx or the Partnership or any Affiliate thereof
or (ii) to interfere with or to limit in any way the right of Xxxxxxxxx or the
Partnership or any Affiliate thereof to terminate the employment of such Partner
at any time or to transfer his or her employment within Xxxxxxxxx or the
Partnership or any Affiliate thereof to other activities from time to time.
Section 3.05. Effect of Termination of Employment. (a) A Limited
Partner whose employment with the General Partner and Xxxxxxxxx terminates for
any reason shall automatically (without any action being required on the part of
the Partnership or any Limited Partner) and immediately become a "SPECIAL
LIMITED PARTNER". Upon becoming a Special Limited Partner, (i) such Limited
Partner shall no longer receive any new awards of Carried Interest Points with
respect to any Fund Investments and (ii) such Limited Partner's Carried Interest
Points theretofore awarded may be reduced, eliminated or forfeited in accordance
with this Section 3.05. Upon the complete liquidation of all Fund Investments in
which a Special Limited Partner is a participant, such Special Limited Partner
(i) shall cease to be a Partner of the Partnership and (ii) shall not be
entitled to any further distributions of Carried Interest under this Agreement.
(b) With respect to any Limited Partner who becomes a Special Limited
Partner and any Fund Investment in which such Limited Partner has an interest
prior to becoming a Special Limited Partner, such Limited Partner shall continue
to hold his or her Carried Interest Points theretofore awarded with respect to
such Fund Investment and shall be entitled to such Limited Partner's Carried
Interest Share of such Fund Investment without reduction if such Limited Partner
becomes a Special Limited Partner as a result of (i) termination of employment
due to permanent disability (as determined by the General Partner and
Xxxxxxxxx), (ii) subject to Section 3.06(a), termination of employment due to
death or (iii) any other exception determined by the General Partner.
13
(c) With respect to any Limited Partner who becomes a Special Limited
Partner as a result of the termination of employment for any reason other than
those specified in Section 3.05(b)or 3.05(d), and any Fund Investment in which
such Limited Partner has an interest prior to becoming a Special Limited
Partner, such Limited Partner's Carried Interest Share of such Fund Investment
shall be vested and become non-forfeitable in accordance with this Section
3.05(c). All Persons who become Special Limited Partners as a result of
termination of employment for any reason other than those specified in or
3.05(d) (a "FORFEITURE EVENT") will be vested with respect to 33 1/3% of their
Carried Interest Share attributable to a Fund Investment made in any given
fiscal year on January 1 of the year following the year such Fund Investment was
made; will be vested with respect to 66 2/3% of their Carried Interest Share
attributable to such Fund Investment on January 1 of the second year following
the year such Fund Investment was made; and will be fully vested with respect to
their Carried Interest Share attributable to such Fund Investment on January 1
of the third year following the year such Fund Investment was made; provided
that a Limited Partner will be vested with respect to 100% of his Carried
Interest Share attributable to a Fund Investment which is realized prior to the
date on which he becomes a Special Limited Partner; and provided further that,
on and after January 1, 2003, a Limited Partner who has held the position of
Principal or any higher executive office of the General Partner or Xxxxxxxxx &
Co., LLC continuously from June 1, 2000 through January 1, 2003 will be fully
vested with respect to 100% of his Carried Interest Share attributable to all
Fund Investments made prior to the date on which he becomes a Special Limited
Partner. Limited Partners shall be "PARTIALLY REDUCED PARTNERS" with respect to
the unvested portion of their Carried Interest Share forfeited in accordance
with this Section 3.05(c). The unvested portion of the Carried Interest Share of
each Special Limited Partner shall be forfeited on the date of termination of
employment and shall be reallocated as provided in Section 3.02(d). The number
of Carried Interest Points so forfeited, derived by application of the foregoing
percentages to such Carry Participating Partner's Carried Interest Points in a
Carried Interest Annual Pool, is hereinafter referred to as the "FORFEITED
CARRIED INTEREST POINTS", and the vested number of Carried Interest Points at
such time, derived by application of the foregoing percentages to such Carry
Participating Partner's Carried Interest Points in such Carried Interest Annual
Pool, is hereinafter referred to as the "VESTED CARRIED INTEREST POINTS".
(d) With respect to any Limited Partner who becomes a Special Limited
Partner and any Fund Investment in which such Limited Partner has an interest
prior to becoming a Special Limited Partner, if such Limited Partner becomes a
Special Limited Partner as a result of an Elimination Event (a "FULLY REDUCED
PARTNER"), such Limited Partner's Carried Interest Points with respect to such
Fund Investment and any Proceeds with respect to such Fund Investment that
otherwise has been or could be allocated to such Limited Partner at any time
after
14
such Limited Partner becomes a Special Limited Partner shall be forfeited and
shall be reallocated to other Limited Partners as provided in Section 3.02(d).
For purposes of this Agreement, the term "ELIMINATION EVENT" means,
with respect to any Limited Partner at any time, (i) the termination of such
Limited Partner's employment with the General Partner or Xxxxxxxxx for Cause (or
the termination of such Limited Partner's employment with the General Partner or
Xxxxxxxxx for any reason and, following such termination, the General Partner or
Xxxxxxxxx determines that circumstances existed during such Limited Partner's
employment with the General Partner or Xxxxxxxxx which would have entitled the
General Partner or Xxxxxxxxx to terminate such Limited Partner's employment with
the General Partner or Xxxxxxxxx for Cause), (ii) the termination of such
Limited Partner's employment due to resignation with less than 30 days' notice,
(iii) the termination of such Limited Partner's employment with the General
Partner or Xxxxxxxxx for any reason and, within 180 days of such termination (or
during the 180 days preceding such termination), such Limited Partner attempts
or attempted to hire a person who is or was an employee of the General Partner
or Xxxxxxxxx, (iv) the termination of such Limited Partner's employment with the
General Partner or Xxxxxxxxx for any reason and, within 180 days of such
termination, the Limited Partner solicits business of a customer or client of
the General Partner or Xxxxxxxxx or (v) the termination of such Limited Partner
due to disclosure by such Limited Partner (or in the event of termination of
employment by reason of death, by such Special Limited Partner's estate or any
designated beneficiary or heir or personal representative that became a Special
Limited Partner) of any Proprietary Information, without the consent of the
General Partner or Xxxxxxxxx or otherwise in contravention of Section 2.08, to
any unauthorized Person or the use of Proprietary Information by such Limited
Partner (or in the event of termination of employment by reason of death, by
such Special Limited Partner's estate or any designated beneficiary or heir or
personal representative that became a Special Limited Partner) other than in
connection with the Partnership's or Xxxxxxxxx'x business where such disclosure
or use may be adverse to the financial interests of the Partnership or Xxxxxxxxx
or their respective Affiliates (as determined by the General Partner in its
discretion).
Section 3.06. Other Provisions Relating to Special Limited Partners.
(a) In the event of the death of a Limited Partner, such Limited Partner shall
cease to be a Partner of the Partnership and the Partnership shall furnish to
such Limited Partner's estate or designated beneficiary such information
relating to the Partnership's affairs and Fund Investments as such estate's
executor or such designated beneficiary shall reasonably request in order to
enable such estate or designated beneficiary to prepare and file tax returns and
conduct audits or other proceedings relating to such tax returns; provided that
such estate and its executor and any designated beneficiary shall have executed
an instrument reasonably satisfactory to the General Partner agreeing to be
bound by the confidentiality obligations set forth in Section 2.08 with respect
to all information so furnished.
15
Notwithstanding anything in this Agreement to the contrary, the estate or
designated beneficiary shall automatically be admitted to the Partnership as a
Special Limited Partner and shall receive allocations and distributions to the
extent and in the manner provided for in this Agreement with respect to such
deceased Limited Partner.
(b) If, at any time during the term of the Partnership, the General
Partner determines in good faith that any further participation by a Special
Limited Partner in the Partnership's affairs would be detrimental to any
Portfolio Company, the Partnership, the other Limited Partners, Xxxxxxxxx, any
Fund, any Investor or any of their respective Affiliates, then, to the extent
determined appropriate by the General Partner in its discretion and to the
maximum extent permitted by applicable law, such Special Limited Partner shall
cease to have the right to obtain information regarding the Partnership and its
affairs or regarding any Partnership or any Fund Investment (other than any
financial statements of the Partnership and underlying documentation supporting
such financial statements).
(c) A Special Limited Partner shall not be entitled to vote, except for
purposes of clause (x) of Section 12.01(b)(ii), except as required by applicable
law and except where a Special Limited Partner's interests in Fund Investments
existing at the time any vote or approval of the Limited Partners is required
pursuant to Article 2 or 12.01 or any other provision of this Agreement shall be
materially adversely affected by such vote or approval in a way that is
different from the effect of such vote or approval on any other Limited
Partners. To the extent such Special Limited Partner is not entitled to vote,
such Special Limited Partner's economic interest, if any, shall be disregarded
in connection with any such vote or approval and such Special Limited Partner's
Carried Interest Points shall be excluded from both the numerator and the
denominator of the fraction representing the specified percentage of Carried
Interest Points required for the consent or approval of Partners under this
Agreement.
ARTICLE 4
EXPENSES
Section 4.01. Definition of Expenses. "PARTNERSHIP EXPENSES" means (i)
all expenses or obligations incurred by or on behalf of the Partnership that are
directly attributable to any Fund Investment including any Indemnification
Obligation with respect to a Fund Investment (an "INVESTMENT EXPENSE") and (ii)
all General Expenses.
"GENERAL EXPENSES" means any expenses incurred by the Partnership other
than Investment Expenses, Carry Expenses or Indemnification Obligations
including, without limitation: (a) all costs and expenses of organizing the
16
Partnership; and (b) all routine administrative expenses of the Partnership,
including salaries and employee benefit expenses of employees, consultants and
independent contractors of the Partnership, fees and expenses associated with
the maintenance of books and records of the Partnership, the employment or
retention by the Partnership with respect to routine matters of accountants,
attorneys and other professionals, and the preparation and dispatch to the
Limited Partners of checks, financial reports and notices required by this
Agreement.
Section 4.02. Responsibility for Partnership Expenses among the
Partners. The Partners agree that, as among themselves, Partnership Expenses
shall be borne by the Partners as follows:
(a) any Investment Expense shall be borne only by those Partners
who are Carry Participating Partners with respect to such Fund
Investment, pro rata in proportion to their respective Carried Interest
Share in such Fund Investment at such time; and
(b) any General Expense or Indemnification Obligation not directly
attributable to any Fund Investment shall be borne by all Partners, pro
rata in proportion to their respective Capital Account balances at such
time;
provided that, if the General Partner determines in its discretion that any
Partnership Expense is an Indemnification Obligation directly attributable to
the acts or conduct of one or more Partners, but not directly attributable to
all Partners as a group, the General Partner may determine that all or a portion
of such Partnership Expense shall be borne by only those Partners to whom such
Partnership Expense is directly attributable, pro rata in proportion to the
respective Carried Interest Share of those Partners who are required to bear
such Partnership Expense pursuant to this proviso.
ARTICLE 5
CAPITAL CONTRIBUTIONS; CLAWBACK OBLIGATIONS
Section 5.01. Capital Contributions. The Partners listed in Schedule
III (the "CONTRIBUTING PARTNERS") shall be obligated to make contributions to
the Partnership ("CAPITAL CONTRIBUTIONS") in an aggregate amount not to exceed
their respective Capital Commitments. Except as provided in Section 5.03 or as
required by the Delaware Act, the Partners shall have no obligation to make any
other contributions to the capital of the Partnership, whether to fund Fund
Investments, to fund Partnership Expenses or for any other reason.
Section 5.02. Payment of Capital Contributions. All Capital
Contributions shall be paid to the Partnership in immediately available funds in
17
United States dollars by 11:00 A.M. (New York City time) on the date and to the
account specified by the General Partner. Capital Contributions may include
amounts that the General Partner determines in its discretion are necessary or
desirable to establish reserves in respect of Partnership Expenses or the
Partnership's obligation to make its capital contribution to the Funds.
ARTICLE 6
CAPITAL ACCOUNTS; ALLOCATIONS; DISTRIBUTIONS
Section 6.01. Principles of Distributions Attributable to Invested
Capital. Except as otherwise provided in this Agreement, all Proceeds received
by the Partnership, including Proceeds in respect of the Partnership's capital
contributions as general partner of the Funds, but excluding Proceeds referred
to in Section 6.02, shall be distributed as follows: Proceeds that are cash or
readily-marketable securities received from the Funds shall be distributed or
paid promptly after the receipt thereof, and in the case of other types of
Proceeds at such time as the General Partner shall determine in its discretion.
With respect to any Proceeds referred to in this paragraph, the General Partner
shall, at the time of distribution, determine each Contributing Partner's
Investment Percentage of such Proceeds and make distributions of such amounts to
the Contributing Partners.
Section 6.02. Principles of Distributions Attributable to Carried
Interest. (a) Except as otherwise provided in this Agreement, Proceeds from any
Fund Investment representing Carried Interest from any Fund Investment shall be
distributed at such time as the General Partner shall determine in its
discretion. With respect to the distribution of any Proceeds representing any
Carried Interest Share ("CARRIED INTEREST DISTRIBUTIONS"), at least 40% of a
Carry Participating Partner's (other than a Partially Reduced Partner's)
Participation Percentage of such Proceeds shall be distributed to such Carry
Participating Partner and up to 60% of such Carry Participating Partner's
Participation Percentage of such Proceeds shall be retained by the Partnership
in a segregated account (the "SEGREGATED ACCOUNT") established for such Carry
Participating Partner pursuant to Section 6.07, in each case as the General
Partner determines in its discretion.
(b) If, at the time of distribution of any Proceeds representing the
Carried Interest Share, a Carry Participating Partner is a Partially Reduced
Partner as a result of a Forfeiture Event, the General Partner shall determine
the aggregate amount of Proceeds previously distributed to such Carry
Participating Partner with respect to all Fund Investments in which such Carry
Participating Partner participates, and such Carry Participating Partner's
Participation Percentage (determined without giving effect to such Forfeiture
Event) of such Proceeds shall be applied in the following manner (in lieu of
Section 6.02(a)):
18
(x) the portion of such Proceeds attributable to at
least 40% of such Partially Reduced Partner's Carry Vested
Percentage of its Carried Interest Share shall be distributed
to such Partially Reduced Partner and the portion of such
Proceeds attributable to up to 60% of such Partially Reduced
Partner's Carry Vested Percentage of its Carried Interest
Share shall be retained by the Partnership in such Partially
Reduced Partner's Segregated Account, and
(y) the portion of such Proceeds attributable to such
Partially Reduced Partner's Carry Forfeited Percentage of such
Carried Interest Share shall be allocated to the other
Partners who are entitled to such forfeited portion of the
Carried Interest Share (each, a "FORFEITED INTEREST PARTNER"),
pro rata in proportion to their respective increases or newly
allocated Carried Interest Shares.
Section 6.03. Other Provisions Relating to Distributions. (a) All cash
distributions shall be made in immediately available funds in U.S. Dollars,
except to the extent that distributions in U.S. dollars would be illegal under
applicable law, in which case, to such extent, distributions shall be made in
the currency in which cash is received by the Partnership.
(b) Any securities or other property constituting all or any portion of
a Fund Investment may be distributed in kind at such time and in such amounts as
the General Partner shall, in its discretion, determine. In the event of any
such distribution in kind, the General Partner shall, depending on whether such
distribution constitutes a distribution of Proceeds constituting the Carried
Interest Share, (i) distribute to the applicable Contributing Partners or Carry
Interest Partner securities or other property of the same type and (ii) if cash
and securities or other property in kind are to be distributed simultaneously,
distribute cash and securities or such property in kind to each such
Contributing Partner or Carry Interest Partner in the same proportions to such
Contributing Partners or Carry Interest Partners; provided that the General
Partner, in its discretion, may allow each such Contributing Partner or Carry
Interest Partner to elect whether to receive a distribution in kind or in cash.
The General Partner shall determine, in its discretion, the fair value of the
securities or other property to be distributed in kind on a date as near as
reasonably practicable to the date of such distribution, and, in the case of
securities denominated in a currency other than U.S. Dollars, shall determine
the U.S. Dollar equivalent of such fair value based on the applicable exchange
rate in effect on the valuation date.
(c) In connection with any distribution of cash, securities or other
property received by the Partnership, the General Partner may, in its
discretion,
19
set off against, or withhold from, the amount distributable to any Limited
Partner with respect to such Fund Investment the following amounts:
(i) such Limited Partner's share of any Partnership Expense or any
other amount due from such Limited Partner to the Partnership; and
(ii) any amounts required to pay, or to reimburse (on a net
after-tax basis) any Indemnified Person for the payment of, any taxes
and related expenses that the General Partner in good faith determines
to be properly attributable to such Limited Partner (including, without
limitation, withholding taxes and interest, penalties and expenses
incurred in respect thereof).
Any amounts so set off or withheld pursuant to this Section 6.03 shall be
treated for all purposes of this Agreement as if actually distributed to such
Limited Partner and shall be applied by the General Partner to discharge the
obligation in respect of which such amounts were withheld.
(d) The General Partner shall have the right, in its discretion, to
withhold amounts otherwise distributable by the Partnership to a Limited Partner
in order to make such provision as the General Partner, in its discretion, deems
necessary or advisable for the payment of such Limited Partner's share of any
future Partnership Expense if the nature and amount of such Partnership Expense
is known or reasonably anticipated at the time of distribution.
(e) Notwithstanding anything in this Agreement to the contrary, the
Partnership shall not make any distributions pursuant to this Agreement except
to the extent permitted by the Delaware Act.
Section 6.04. Capital Accounts; Adjustments to Capital Accounts. (a)
There shall be established for each Partner, on the books and records of the
Partnership, a capital account (a "CAPITAL ACCOUNT"). Each Partner's Capital
Account shall initially be zero and shall be adjusted as set forth in this
Section 6.04.
(b) The Capital Account of each Partner shall be adjusted as follows:
(i) Cash Contributions. The amount of cash contributed to the
Partnership by such Partner shall be credited to the Capital Account of
such Partner.
(ii) Distributions. The amount of cash (or the value of other
property distributed in kind as determined in accordance with Section
6.03) distributed by the Partnership to any Partner shall be debited
against the Capital Account of such Partner.
20
(iii) Income, Profit or Gain. The amount of any allocation of
income, profit or gain made by the Partnership to any Partner shall be
credited to the Capital Account of such Partner.
(iv) Expense, Deduction or Loss. The amount of any allocation of
expense, deduction or loss made by the Partnership to any Partner shall
be debited against the Capital Account of such Partner.
(c) The Partnership's items of income, gain, loss, deduction and
expense shall be allocated to the Capital Accounts as follows:
(i) Allocation of Partnership Expenses. The amount of any
Partnership Expense shall be allocated among the Partners in accordance
with Section 4.02.
(ii) Allocation of Interest Income and Expense. The amount of any
interest earned on any Partner's Capital Contribution or on any
Partner's Segregated Account shall be allocated to the Capital Account
of such Partner.
(iii) Allocation of a Carry Participating Partner's Carry Income,
Gains and Losses. All income and gains representing the Carried
Interest shall be allocated among the Carry Participating Partners in a
manner consistent with the corresponding distributions made or to be
made pursuant to Section 6.02. All losses with respect to a Carried
Interest Annual Pool shall be allocated among the Carry Participating
Partners in a manner consistent with Section 6.07(c).
(iv) Residual Allocations. The Partnership's remaining net income
or net loss (after giving effect to clauses (i) through (v) of this
Section 6.04(c)) for any fiscal period and each item of income, gain,
loss, deduction or expense shall be allocated among the Partners in a
manner consistent with the corresponding distributions made or to be
made pursuant to Sections 6.01, 6.02 and 9.04.
Section 6.05. Tax Allocations. (a) For federal, state and local income
tax purposes, each item of income, gain, loss, deduction and credit of the
Partnership shall be allocated among the Partners as nearly as possible in the
same manner as the corresponding item of income, expense, gain or loss is
allocated pursuant to the other provisions of this Article 6. It is intended
that the Capital Accounts will be maintained at all times in accordance with
Section 704 of the Code and applicable Treasury regulations thereunder, and that
the provisions hereof relating to the Capital Accounts be interpreted in a
manner consistent therewith. The General Partner shall be authorized by this
Section 6.05 to make appropriate adjustments to the allocations of items
pursuant to this Article 6 if necessary in
21
order to comply with Section 704 of the Code or applicable Treasury regulations
thereunder; provided that no such change shall have an adverse effect upon the
amount distributable to any Partner hereunder.
(b) Notwithstanding anything else contained in this Article 6, if any
Partner has a deficit Capital Account for any fiscal period as a result of any
adjustment, allocation or distribution of the type described in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d)(4)-(6), then the Partnership's income
and gain will be specially allocated to such Partner in accordance with Treasury
Regulations Section 1.704-1(b)(2)(ii)(d).
Section 6.06. Foreign Currency Considerations. (a) At the time any cash
is received in a currency other than U.S. Dollars for payment (as distributions
or otherwise) to Partners:
(i) if such cash is to be paid (as a distribution or otherwise) in
U.S. Dollars, the General Partner shall effect the conversion of such
cash into U.S. Dollars, at the exchange rate determined by the General
Partner, as soon as practicable after such cash is received; and
(ii) if, pursuant to Section 6.03(a), such cash is to be paid in
the currency in which it is received, the General Partner shall
determine the U.S. Dollar equivalent of such cash, based upon the
applicable exchange rate in effect on the date such cash is received,
for purposes of this Article 6.
(b) Currency translations in connection with the valuation of non-cash
property that is to be distributed in kind shall be made in the manner set forth
in Section 6.03(b) for purposes of this Article 6.
Section 6.07. Segregated Accounts; Netting of Carried Interest Shares;
Distributions from Segregated Accounts. (a) There shall be established, for each
Carry Participating Partner, a Segregated Account, which shall consist of one
gain sub-account (a "GAIN ACCOUNT") and one loss sub-account (a "LOSS ACCOUNT").
At any time, (i) the balance in any Carry Participating Partner's Gain Account
shall be such Carry Participating Partner's "GAIN AMOUNT" and (ii) the balance
in any Carry Participating Partner's Loss Account shall be such Carry
Participating Partner's "LOSS AMOUNT". Each Carry Participating Partner shall be
entitled to receive, with respect to funds held in such Carry Participating
Partner's Segregated Account, income from the temporary investment of such funds
for the period such funds are held by the Partnership until such time such funds
are distributed pursuant to this Section 6.07.
22
(b) The Gain Account of each Carry Participating Partner for any
Carried Interest Annual Pool shall initially be zero and thereafter be adjusted
as follows:
(i) increased by an amount equal to the amount distributed to such
Carry Participating Partner but retained by the Partnership in the
Segregated Account of such Carry Participating Partner pursuant to
Sections 6.02(a) and 6.02(b); and
(ii) decreased by any amount distributed in accordance with
Section 6.07(e).
(c) The Loss Account of each Carry Participating Partner for any
Carried Interest Annual Pool shall initially be zero and thereafter be adjusted
as follows:
(i) increased by an amount equal to 100% of such Carry
Participating Partner's Participation Percentage of the Notional Loss
Amount (as determined by the General Partner pursuant to Section
6.07(d) from any Fund Investment); and
(ii) decreased by any amount distributed in accordance with
Section 6.07(e).
(d) Upon the determination of the General Partner to write down or
write off the value of any Fund Investment or the realization of any Fund
Investment at a loss, the General Partner shall determine, for each Carry
Participating Partner, a "NOTIONAL LOSS AMOUNT" related to such Fund Investment,
using the methodology applicable to the determination of Carried Interest set
forth in the applicable Fund Partnership Agreement and the Participation
Percentage of such Carry Participating Partner.
(e) At the time of each subsequent disposition of Fund Investment that
would have resulted in a Carried Interest if determined without regard to any
other Fund Investment, the General Partner shall determine, for each Carry
Participating Partner, (i) the Gain Amount in such Carry Participating Partner's
Gain Account and (ii) the Loss Amount in such Carry Participating Partner's Loss
Account. Upon such determination, an amount equal to the Loss Amount for each
Carry Participating Partner shall be distributed to the Carry Participating
Partners in such subsequent Fund Investment to the extent necessary to permit
such Carry Participating Partners to receive the Carried Interest distributions
that would have been distributed to them in the absence of any Notional Loss
Amount; provided that such distribution will not exceed the Gain Amount for such
Carry Participating Partner at such time.
23
(f) Any amounts remaining in any Carry Participating Partner's
Segregated Account, after giving effect to this Section 6.07 and Section 5.03,
shall be paid to such Carry Participating Partner after the complete liquidation
of all Fund Investments in all Carried Interest Annual Pools in which such Carry
Participating Partner is a participant.
(g) Amounts retained in any Segregated Account with respect to any
Carry Participating Partner shall not be distributed from such Segregated
Account, except as otherwise provided in this Section 6.07. Notwithstanding the
foregoing, the General Partner may cause amounts held in the Segregated Account
of any Carry Participating Partner to be distributed to such Carry Participating
Partner if the General Partner determines, in its discretion, that such amounts
are not required in order for such Carry Participating Partner to meet such
Carry Participating Partner's payment obligations under this Section 6.07.
Section 6.08. Loans and Withdrawal of Amounts Allocated to Capital
Accounts. Except as permitted by the General Partner, no Limited Partner shall
be permitted to borrow, or to make an early withdrawal of, any portion of the
amounts allocated to his or her Capital Account.
Section 6.09. Repayment of Certain Distributions. In the event that any
amount distributed to a Limited Partner hereunder is later determined by the
General Partner to be in excess of the amount such Limited Partner was entitled
to under this Agreement, such Limited Partner shall return such amount to the
Partnership.
ARTICLE 7
REPORTS TO LIMITED PARTNERS
Section 7.01. Reports. (a) The General Partner shall provide to each
Limited Partner reports and financial information on the Partnership's affairs
and on such Limited Partner's Allocation Schedule and Capital Account in such
form and at such times as the General Partner shall determine in its discretion.
The General Partner shall also provide to each Limited Partner (other than any
Special Limited Partner), upon request, a copy of each report and financial
statement provided to any Investor pursuant to any Partnership Agreement.
(b) After the end of each fiscal year, the General Partner shall cause
the independent certified public accountants of the Partnership to prepare and
transmit, within 30 days after the tax returns for all Funds have been
completed, or as soon thereafter as is practicable, a federal income tax form
K-1 for each Partner, a copy of the Partnership's return filed for federal
income tax purposes and a report setting forth in sufficient detail such
transactions effected by the Partnership during such fiscal year as shall enable
each Partner to prepare its
24
United States federal and state income tax returns, if any. The General Partner
shall provide such materials to (i) each Limited Partner and (ii) each former
Limited Partner (or its successors, assigns, heirs or personal representatives)
who may require such information in preparing its United States federal and
state income tax returns.
ARTICLE 8
EXCULPATION AND INDEMNIFICATION
Section 8.01. Exculpation and Indemnification. (a) No Indemnified
Person shall be liable to the Partnership or to the Partners for any losses,
claims, damages or liabilities arising from, related to, or in connection with
this Agreement, the Partnership's business or affairs, the Fund Partnership
Agreements or the Funds' business or affairs (including any act or omission by
any Indemnified Person and any activity of the type or character disclosed or
contemplated in Section 2.04 or 2.05 hereof or in any Partnership Agreement
(such disclosure being incorporated herein by reference) and no such activity
will in and of itself constitute a breach of any duty owed by any Indemnified
Person to any Partner or the Partnership), except for any losses, claims,
damages or liabilities resulting from such Indemnified Person's gross negligence
or willful misconduct.
(b) The Partnership shall, to the fullest extent permitted by
applicable law, indemnify and hold harmless each Indemnified Person against any
losses, claims, damages or liabilities, arising out of, related to or in
connection with this Agreement, the Partnership's business or affairs, the Fund
Partnership Agreements or the Funds' business or affairs, except for (i) any
such losses, claims, damages or liabilities resulting from such Indemnified
Person's gross negligence or willful misconduct and (ii) any losses allocated to
any Partner's Capital Account. The Partnership will periodically reimburse each
Indemnified Person for all expenses (including fees and expenses of counsel) as
such expenses are incurred in connection with investigating, preparing, pursuing
or defending any Proceeding related to, arising out of or in connection with
this Agreement, the Partnership's business or affairs, the Fund Partnership
Agreements or the Funds' business or affairs; provided that such Indemnified
Person shall promptly repay to the Partnership the amount of any such reimbursed
expenses paid to it if it shall be judicially determined by judgment or order
not subject to further appeal or discretionary review that such Indemnified
Person is not entitled to be indemnified by the Partnership in connection with
such matter as provided in the exceptions contained in the immediately preceding
sentence. If for any reason (other than the exceptions contained in the first
sentence of this Section 8.01(b)) the foregoing indemnification is unavailable
to any Indemnified Person, or insufficient to hold it harmless, then the
Partnership shall contribute to the amount
25
paid or payable by such Indemnified Person as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect the relative
benefits received by the Partnership, on the one hand, and such Indemnified
Person, on the other hand, or, if such allocation is not permitted by applicable
law, to reflect not only the relative benefits referred to above but also any
other relevant equitable considerations. Any indemnity, contribution or
reimbursement obligation of the Partnership under this Section 8.01(b) is
referred to as an "INDEMNIFICATION OBLIGATION."
(c) Each Limited Partner covenants for itself and its successors,
assigns, heirs and personal representatives that such Person will, at any time
prior to or after dissolution of the Partnership, whether before or after such
Person's withdrawal from the Partnership, pay to the Partnership on demand any
amount which the Partnership properly pays in respect of taxes (including
withholding taxes) imposed upon income of, or distributions in respect of Fund
Investments made to, such Limited Partner.
(d) In the event that any Limited Partner initiates any Proceeding
against the Partnership, the General Partner, Xxxxxxxxx or any of their
respective Affiliates and a judgment or order not subject to further appeal or
discretionary review is rendered in respect of such Proceeding for the
Partnership, the General Partner, Xxxxxxxxx or any of their respective
Affiliates, as the case may be, such Limited Partner shall be solely liable for
all costs and expenses of the Partnership, the General Partner, Xxxxxxxxx or
such Affiliate, as the case may be, attributable thereto and shall pay such
amounts in cash to the Persons incurring such costs and expenses within 90 days
after the entry of such judgment or order.
(e) Notwithstanding anything else contained in this Agreement, the
exculpation provisions under Section 8.01(a) and the reimbursement, indemnity
and contribution obligations of the Partnership under Section 8.01(b) shall:
(i) be in addition to any liability which the Partnership may
otherwise have; and
(ii) be binding upon and inure to the benefit of any successors,
assigns, heirs and personal representatives of the Partnership and each
Indemnified Person.
(f) To the extent that, at law or in equity, any Partner has duties
(including fiduciary duties) and liabilities relating thereto to the Partnership
or to any other Partner, the Partner acting in connection with the Partnership's
affairs shall not be liable to the Partnership or to any other Partner for its
good faith reliance on the provisions of this Agreement. To the fullest extent
permitted by applicable law, the provisions of this Agreement, to the extent
that they restrict the duties and liabilities or rights and powers of the
Partners otherwise existing at
26
law or in equity, are agreed by the Partners to replace such other duties,
liabilities, rights and powers of the Partners.
(g) The foregoing provisions of this Section 8.01 shall survive for a
period of four years from the date of dissolution of the Partnership; provided
that if at the end of such period, there are any Proceedings then pending or any
other liability (whether contingent or otherwise) or claim then outstanding, any
Limited Partner shall so notify the General Partner or Xxxxxxxxx at such time
(which notice shall include a brief description of each such Proceeding (and of
the liabilities asserted in such Proceeding) and of such liabilities and claims)
and the foregoing provisions of this Section 8.01 shall survive with respect to
each such Proceeding, liability and claim set forth in such notice (or any
related Proceeding, liability or claim based upon the same or a similar claim)
until such date that such Proceeding, liability or claim is ultimately resolved.
ARTICLE 9
DURATION AND DISSOLUTION OF THE PARTNERSHIP
Section 9.01. Duration. The term of the Partnership shall continue for
so long as any of the Funds continue in existence, unless the Partnership is
sooner dissolved pursuant to Section 9.02; provided that in order to permit an
orderly winding up of the affairs of the Partnership, subject to Section 9.02,
the General Partner may, in its discretion, extend the term of the Partnership
for up to three successive one-year terms following the expiration of such
initial term.
Section 9.02. Dissolution. The death, retirement, resignation,
expulsion, bankruptcy or dissolution of a Limited Partner, or the occurrence of
any other event which terminates the continued membership of a Limited Partner
in the Partnership, shall not, in and of itself, cause the Partnership to be
dissolved and its affairs wound up. Upon the occurrence of any such event, the
business of the Partnership shall be continued without dissolution. Subject to
the Delaware Act, the Partnership shall be dissolved and its affairs shall be
wound up upon the earliest of:
(a) the expiration of the term of the Partnership provided in Section
9.01;
(b) in the discretion of the General Partner, upon the dissolution and
distribution of assets of all Funds;
(c) a decision made by the General Partner, after consultation with
counsel, to dissolve the Partnership because it has determined in good faith
that (i) changes in any applicable law or regulation would have a material
adverse effect
27
on the continuation of the Partnership or (ii) such action is necessary or
desirable as provided in Section 2.10;
(d) the written consent of all Partners;
(e) the entry of a decree of judicial dissolution under Section 17-802
of the Delaware Act;
(f) at any time that there are no limited partners of the Partnership,
unless the business of the Partnership is continued in accordance with the
Delaware Act; and
(g) any event that results in the General Partner ceasing to be a
general partner of the Partnership under the Delaware Act, provided that the
Partnership shall not be dissolved and required to be wound up in connection
with any such event if (A) at the time of the occurrence of such event there is
at least one remaining general partner of the Partnership who is hereby
authorized to and does carry on the business of the Partnership or (B) within 90
days after the occurrence of such event, the Majority Limited Partners agree in
writing or vote to continue the business of the Partnership and to the
appointment, effective as of the date of such event, if required, of one or more
additional general partners of the Partnership.
Section 9.03. Liquidation of Partnership. Upon dissolution, the
Partnership's business shall be liquidated in an orderly manner. Except as
provided in the immediately succeeding sentence, the General Partner shall be
the liquidator to wind up the affairs of the Partnership pursuant to this
Agreement. If the General Partner is not available to serve as liquidator or if
the Partnership shall be dissolved upon dissolution of any of the Funds in
accordance with the terms of the applicable Partnership Agreement, the Limited
Partners may by approval of the Majority Limited Partners appoint one or more
liquidators to act as the liquidator in carrying out such liquidation. In
performing its duties, subject to the Delaware Act, the liquidator is authorized
to sell, distribute, exchange or otherwise dispose of the assets of the
Partnership in any reasonable manner that the liquidator shall determine to be
in the best interest of the Partners.
Section 9.04. Distribution upon Dissolution of the Partnership. (a)
Upon dissolution of the Partnership, the liquidator winding up the affairs of
the Partnership shall determine in its discretion which assets of the
Partnership shall be sold and which assets of the Partnership shall be retained
for distribution in kind to the Partners. Subject to the Delaware Act, after all
liabilities (contingent or otherwise) of the Partnership have been satisfied or
duly provided for (as determined by the liquidator in its discretion), the
remaining assets of the Partnership shall be distributed to the Partners in
proportion to their respective
28
positive Capital Accounts up to the amounts thereof, and thereafter in the
manner in which additional amounts would have been distributed pursuant to
Article 6.
(b) In the discretion of the liquidator, and subject to the Delaware
Act, all or a portion of the assets of the Partnership may be:
(i) distributed to a trust established for the benefit of the
Partners for purposes of liquidating Partnership assets, collecting
amounts owed to the Partnership, and satisfying any liabilities or
obligations of the Partnership arising out of, or in connection with,
this Agreement or the Partnership's affairs; or
(ii) withheld, with respect to any Partner, to provide a reserve
reasonably required for Partnership Expenses; provided that such
withheld amounts shall be distributed to the Partners as soon as the
liquidator determines, in its discretion, that it is no longer
necessary to retain such amounts.
The assets of any trust established in connection with clause (i) above
shall be distributed to the Partners from time to time, in the discretion of the
liquidator, in the same proportions as the amount distributed to such trust by
the Partnership would otherwise have been distributed to the Partners pursuant
to this Agreement.
(c) Each Partner shall look solely to the assets of the Partnership for
the return of such Partner's aggregate invested capital in Fund Investments, and
no Partner shall have priority over any other Partner as to the return of such
invested capital.
Section 9.05. Resignation of Limited Partners. Except as otherwise
provided in Section 3.05 or in Article 10 or with the approval of the General
Partner, a Limited Partner may not resign or withdraw from the Partnership prior
to its dissolution and winding up.
ARTICLE 10
TRANSFERABILITY OF A LIMITED PARTNER'S INTEREST
Section 10.01. Restrictions on Transfer of Limited Partner Interests.
(a) A Limited Partner may not, directly or indirectly, sell, exchange, transfer,
assign, pledge, hypothecate or otherwise dispose of all or any portion of its
limited partner interest (including any entitlement to any distributions
hereunder) in the Partnership (any such direct or indirect sale, exchange,
transfer, assignment, pledge, hypothecation or other disposition being herein
collectively called "TRANSFERS") to any Person, except (i) pursuant to Section
2.10 or 3.05, (ii) by
29
will or by the laws of descent and distribution, (iii) by operation of law or
(iv) to the Partnership.
(b) Sections 10.02 and 10.03 shall not apply to any Transfer
contemplated by clauses (i), (ii) or (iii) of Section 10.01(a), other than a
Transfer pursuant to Section 2.10; provided that any transferee pursuant to a
Transfer contemplated by clause (ii) of Section 10.01(a) shall not be admitted
as a Partner unless such Person, as a condition to its admission as a Partner,
shall have executed and acknowledged such instruments (including a counterpart
of this Agreement), in form and substance satisfactory to the General Partner,
as the General Partner reasonably deems necessary or desirable to effectuate
such admission and to confirm the agreement of such Person to be bound by all
the terms and provisions of this Agreement with respect to the Partner's limited
partner interest in the Partnership acquired by such Person, whereupon such
Person shall become a Substituted Limited Partner and shall, for purposes of the
calculations under Sections 6.04 and 6.07, be bound by such calculations
previously made with respect to the transferring Partner pursuant to this
Agreement, and shall be otherwise treated with respect to such calculations as
if such Person were a Partner from the inception of the Partnership.
(c) The termination of any Limited Partner's employment with Xxxxxxxxx
or any of its Affiliates shall not in and of itself result in or be deemed to
constitute a Transfer of all or any portion of such Limited Partner's limited
partner interest in the Partnership.
(d) Without limiting the generality of the foregoing restrictions, in
no event may a Limited Partner Transfer any portion of his limited partner
interest in the Partnership nor may a Substituted Limited Partner be admitted to
the Partnership if such Transfer or such admission would, in the judgment of the
General Partner, jeopardize the status of the Partnership as a partnership for
United States federal income tax purposes, cause a dissolution of the
Partnership under the Delaware Act, cause the Partnership's assets to be deemed
to be "plan assets" for purposes of ERISA, cause the Partnership to be deemed to
be an "investment company" for purposes of the Investment Company Act, cause the
Partnership to be in violation of the Advisers Act, or would violate, or cause
the Partnership to violate, any applicable law, regulation or order, including
any applicable federal or state securities laws.
Section 10.02. Expenses of Transfer; Indemnification. All expenses,
including attorneys' fees and expenses, incurred by the Partnership in
connection with any Transfer shall be borne by the transferring Limited Partner
or such Limited Partner's transferee (any such transferee, when admitted and
shown as a Limited Partner on the books and records of the Partnership, being
hereinafter called a "SUBSTITUTED LIMITED PARTNER"). In addition, the
transferring Limited Partner or such transferee shall indemnify the Partnership
and the General Partner
30
in a manner satisfactory to the General Partner against any losses, claims,
damages or liabilities to which the Partnership or the General Partner may
become subject arising out of, related to or in connection with any false
representation or warranty made by, or breach or failure to comply with any
covenant or agreement of, such transferring Partner or such transferee.
Section 10.03. Recognition of Transfer; Substituted Partners. (a) No
assignee or other recipient of all or any portion of a Limited Partner's limited
partner interest in the Partnership may be admitted to the Partnership as a
Substituted Limited Partner without the prior approval of the General Partner
(which may, in the General Partner's discretion, be withheld). If the General
Partner approves the admission of any Person to the Partnership as a Substituted
Limited Partner, such Person, as a condition to its admission as a Partner,
shall execute and acknowledge such instruments (including a counterpart of this
Agreement), in form and substance satisfactory to the General Partner, as the
General Partner reasonably deems necessary or desirable to effectuate such
admission and to confirm the agreement of such Person to be bound by all the
terms and provisions of this Agreement with respect to the limited partner
interest in the Partnership acquired by such Person.
(b) The Partnership shall not (subject to Section 3.05) recognize for
any purpose any purported Transfer of all or any part of a Limited Partner's
limited partner interest in the Partnership and no assignee, transferee or other
recipient of all or any part of such interest shall become a Substituted Limited
Partner hereunder unless:
(i) the provisions of this Article 10 shall have been complied
with;
(ii) the General Partner shall have been furnished with the
documents effecting such Transfer, in form reasonably satisfactory to
the General Partner, executed and acknowledged by both the assignor or
transferor and assignee, transferee or other recipient;
(iii) such assignee, transferee or other recipient shall have
represented that such Transfer was made in accordance with all
applicable laws and regulations;
(iv) all necessary governmental consents shall have been obtained
in respect of such Transfer;
(v) the books and records of the Partnership shall have been
changed (which change shall be made as promptly as practicable) to
reflect the admission of such Substituted Limited Partner; and
31
(vi) all necessary instruments reflecting such admission shall
have been filed in each jurisdiction in which such filing is necessary
in order to qualify the Partnership to conduct business.
Upon the satisfaction of the conditions set forth in this Section
10.03, any such assignee or other recipient shall become a Substituted Limited
Partner.
Any Person who succeeds to any Limited Partner's limited partner
interest in the Partnership and who becomes a Substituted Limited Partner shall,
for purposes of the calculations under Sections 6.04 and 6.07, be bound by such
calculations previously made with respect to the transferring Partner pursuant
to this Agreement, and shall be otherwise treated with respect to such
calculations as if such Person were the Partner from the inception of the
Partnership.
ARTICLE 11
TRANSFERABILITY OF GENERAL PARTNER'S INTEREST
Section 11.01. Transferability of General Partner's Interest. (a)
Except as otherwise provided herein, the General Partner may not Transfer to any
Person (other than to a successor-in-interest (by merger or otherwise) or
assignee that is an Affiliate of Greenhill, which Transfer may be made without
the approval of any other Partner) without the prior approval of a majority of
the Limited Partners. If the General Partner so determines in its discretion,
and any such prior approval of the Limited Partners (if required) so provides,
the General Partner may admit any Person to whom the General Partner proposes to
make such a Transfer as an additional general partner of the Partnership, and
such transferee shall be deemed admitted to the Partnership as a general partner
of the Partnership immediately prior to such Transfer and shall continue the
business of the Partnership without dissolution.
ARTICLE 12
MISCELLANEOUS
Section 12.01. Entire Agreement; Amendments; Waivers; Termination. (a)
This Agreement constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter hereof.
(b) Any provision of this Agreement (including Article 10) may be
amended or waived by a written agreement executed by the General Partner and
without the approval of any Limited Partner; provided that,
32
(i) the provisions of Article 8, Section 9.01 and this Section
12.01(b) may not be amended or waived without the approval of the
General Partner and each Limited Partner (other than any Special
Limited Partner referred to in the second sentence of Section 3.06(c)
(to the extent provided in Section 3.06(c)));
(ii) no amendment or waiver of the provisions of this Agreement
may increase the liability of a Limited Partner beyond the liability of
such Limited Partner expressly set forth in this Agreement or otherwise
modify or affect the limited liability of such Limited Partner or
materially impair the value of any Carried Interest Point previously
awarded to a Limited Partner without the consent of the General Partner
and the Limited Partner affected thereby; provided, however, that for
all purposes of this Section 12.01, any amendment of this Agreement
that is necessary to carry out or reflect the operation of Section 3.05
shall not require the consent or approval of any Limited Partner; and
(iii) no provision of this Agreement that relates to or affects
Greenhill may be amended or waived without the approval of Greenhill.
(c) The General Partner shall give the affected Limited Partners
written notice of any amendment of this Agreement effected pursuant to Section
12.01(b) within 30 days after the same becomes effective.
Section 12.02. Mergers and Consolidations. The Partnership may merge or
consolidate with or into one or more Delaware limited partnerships or other
business entities (as defined in the Delaware Act) pursuant to, and in
accordance with, Section 17-211 of the Delaware Act upon the approval of the
General Partner and the Majority Limited Partners; provided that in connection
with any such merger or consolidation, no amendment of any provision of this
Agreement may be effected without the approval required for an amendment of such
provision in accordance with Section 12.01. Notwithstanding anything else
contained in this Agreement, any agreement of merger or consolidation approved
in accordance with the preceding sentence may (x) effect any amendment to this
Agreement or (y) effect the adoption of a new limited partnership agreement for
the Partnership if it is the surviving or resulting entity in such merger or
consolidation.
Section 12.03. Investment Representation. Each Limited Partner, by
executing this Agreement, represents and warrants that his limited partner
interest in the Partnership has been acquired by him for his own account for
investment and not with a view to resale or distribution thereof and that he is
fully aware that in agreeing to admit him as a Limited Partner, the General
Partner, Greenhill and the Partnership are relying upon the truth and accuracy
of this representation and warranty.
33
Section 12.04. Successors; Counterparts. This Agreement (i) shall be
binding as to the executors, administrators, estates, heirs and legal successors
of the Limited Partners and (ii) may be executed in several counterparts with
the same effect as if the parties executing the several counterparts had all
executed one counterpart.
Section 12.05. Governing Law; Severability. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of Delaware
as applied between residents of that state entering into contracts wholly to be
performed in that state. In particular, it shall be construed to the maximum
extent possible to comply with all of the terms and conditions of the Delaware
Act. If it shall be determined by court order not subject to appeal or
discretionary review that any provision or wording of this Agreement shall be
invalid or unenforceable under the Delaware Act or other applicable law, such
invalidity or unenforceability shall not invalidate the entire Agreement, in
which case this Agreement shall be construed so as to limit any term or
provision so as to make it enforceable or valid within the requirements of
applicable law, and, in the event such term or provision cannot be so limited,
this Agreement shall be construed to omit such invalid or unenforceable
provisions.
Section 12.06. Further Assurance. Each Limited Partner, upon the
request of the General Partner, agrees to perform all further acts and to
execute, acknowledge and deliver any documents that may reasonably be necessary
to carry out the provisions of this Agreement.
Section 12.07. Filings. The General Partner shall promptly prepare,
following the execution and delivery of this Agreement, any documents required
to be filed and recorded, or, which are in the General Partner's discretion,
appropriate for filing and recording, under the Delaware Act, and the General
Partner, as an authorized person, shall promptly cause each such document to be
filed and recorded in accordance with the Delaware Act and, to the extent
required by local law, to be filed and recorded or notice thereof to be
published in the appropriate place in each State in which the Partnership may
hereafter establish a place of business. The General Partner shall also promptly
cause to be filed, recorded and published such statements of fictitious business
name and other notices, certificates, statements or other instruments required
by any provision of any applicable law of the United States or any State or
other jurisdiction which governs the conduct of its business from time to time.
Section 12.08. Power of Attorney. (a) Each Limited Partner does hereby
constitute and appoint the General Partner and its officers with full power of
substitution, as his true and lawful representative and attorney-in-fact, in his
name, place and stead to make, execute, sign, deliver and file (i) the
Certificate of Limited Partnership and any amendment thereof required because of
an amendment to this Agreement or in order to effectuate any change in the
34
membership of the Partnership, (ii) any amendments to this Agreement in
accordance with Section 12.01, (iii) all such other instruments, documents and
certificates which may from time to time be required by the laws of the United
States of America, the State of Delaware or any other State, or any political
subdivision or agency thereof, or any foreign country, to effectuate, implement
and continue the valid and subsisting existence of the Partnership or to
dissolve the Partnership and (iv) any document, certificate, instrument or
agreement necessary or desirable to effectuate the transfer of all or any part
of a Limited Partner's limited partner interest in the Partnership in accordance
with the provisions of Articles 3 or 10.
Such representatives and attorneys-in-fact shall not have any right,
power or authority to amend or modify this Agreement except in accordance with
the terms of this Agreement when acting in such capacities.
(b) The power of attorney granted pursuant to this Section 12.08 is
coupled with an interest and shall survive and not be affected by the subsequent
death, incapacity, disability, dissolution, termination or bankruptcy of the
Limited Partner granting such power of attorney or the transfer of all or any
portion of such Limited Partner's limited partnership interest in the
Partnership, and extend to such Limited Partner's successors, assigns and legal
representatives.
Section 12.09. No Xxxx for Partnership Accounting. Subject to mandatory
provisions of law applicable to a Limited Partner and to circumstances involving
a breach of this Agreement, each of the Limited Partners covenants that it will
not (except with the consent of the General Partner) file a xxxx for a
Partnership accounting.
Section 12.10. Goodwill. No value shall be placed on the name or
goodwill of the Partnership.
Section 12.11. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including electronic mail, facsimile
or similar writing) and shall be given to such party at its address, electronic
mail address or facsimile number set forth in a schedule filed with the records
of the Partnership or such other address, electronic mail address or facsimile
number as such party may hereafter specify for the purpose by notice in like
manner to the General Partner. Each such notice, request or other communication
shall be effective (a) if given by facsimile, when such facsimile is transmitted
to the facsimile number specified pursuant to this Section 12.11 and the
appropriate answerback or confirmation is received, (b) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid (c) if given by electronic mail, when
actually received at the electronic mail address specified pursuant to this
Section 12.11 or (d) if given
35
by any other means, when delivered at the address specified pursuant to this
Section 12.11.
Section 12.12. Arbitration. In the event that any dispute arises
between a Limited Partner, on the one hand, and Greenhill, the Partnership, the
General Partner or any of its Affiliates, on the other hand, relating to or in
connection with this Agreement, the Partnership and its business or affairs, the
Fund Partnership Agreements or the Funds' business or affairs, such Limited
Partner shall attempt to resolve such dispute by discussion and negotiation
within thirty days after the date one such party (the "INITIATING PARTY")
initially raises such dispute. Any and all disputed issues that are not resolved
in writing by the parties during such thirty (30) day period shall be finally
settled by binding arbitration to be held in Wilmington, Delaware or New York
City, New York in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, as from time to time amended and in effect.
The parties to this Agreement hereby waive (and agree to cause their respective
Affiliates to waive) any right to refer such dispute or controversy to any other
forum or tribunal. The arbitration panel shall be composed of three arbitrators,
appointed pursuant to the following procedure. The Initiating Party shall notify
the other party (the "RESPONDING PARTY") of the substance of its claim and the
name and address of the arbitrator chosen by the Initiating Party. Within thirty
days of receipt of such notification, the Responding Party shall notify the
Initiating Party of its answer to the claim made, any counterclaim which it
wishes to assert in the arbitration, and the name and address of the arbitrator
chosen by the Responding Party. If this is not done by the Responding Party
within thirty (30) days, appointment of the second arbitrator shall be made by
the American Arbitration Association upon request of the Initiating Party. The
arbitrators shall choose a third arbitrator, who shall serve as president of the
panel thus composed. If the arbitrators fail to agree upon the choice of a third
arbitrator within thirty (30) days from the appointment of the second
arbitrator, the third arbitrator will be appointed by the American Arbitration
Association upon the request of the arbitrators or either of the parties. In all
cases the arbitrators must be persons who are knowledgeable about and have
recognized ability and experience in dealing with the subject matter of the
dispute. The arbitrators will decide the dispute by majority decision and in
accordance with Delaware law. The decision shall be rendered in writing and
shall bear the signatures of at least two arbitrators. It also shall identify
the members of the arbitration panel, and the time and place of the award
granted. Finally, it will determine the expenses of the arbitration and the
party who shall be charged therewith or the allocation of the expenses between
the parties in the discretion of the panel. The arbitration decision shall be
rendered as soon as possible, but in any event not later than six months after
the constitution of the arbitration panel. The arbitration decision shall be
final and binding upon both parties. Judgment upon any award rendered by the
arbitration panel may be entered in any court having jurisdiction thereof or
having jurisdiction over the
36
party against whom enforcement is sought or having jurisdiction over any of such
party's assets. To the maximum extent permitted by law, the parties to this
Agreement hereby waive (and agree to cause their respective Affiliates to waive)
any right of appeal from any judgment rendered upon an award, particularly
including (but not limited to) appeals with respect to any question of law.
Section 12.13. Withholding. The General Partner shall have the right to
deduct and withhold from any distributions or other assets any federal, state or
local taxes that it determines in good faith to be required by law to be
withheld with respect to income allocable to any Limited Partner.
Section 12.14. Headings. Section and other headings contained in this
Agreement are for reference only and are not intended to describe, interpret,
define or limit the scope or intent of this Agreement or any provision hereof.
ARTICLE 13
CLAWBACK OBLIGATIONS
Section 13.01. General Partner Clawback. The Partners acknowledge and
agree that the Partnership may be obligated to make payments to the Funds under
Section 10.04(b) of the Fund Partnership Agreements (the "CLAWBACK OBLIGATION").
The Partnership shall satisfy the Clawback Obligation,
(i) first by payment from each Partner's Segregated Account based
on each Partner's Pro Rata Share of the Clawback Obligation; and
(ii) then, each Partner will be required to make a payment
pursuant to Section 13.02 in an amount equal to such Partner's Pro Rata
Share of the Clawback Obligation less amounts paid pursuant to clause
(i) above.
"PRO RATA SHARE" shall be determined (i) first, based on the amount of
each Partner's Loss Amount for all Clawback Obligation payments up to an amount
equal to the aggregate Loss Amounts and (ii) with respect to any excess, then
based on the aggregate Carried Interest distributions theretofore received by
each Partner including amounts held in the Segregated Accounts after giving
effect to clause (i) above.
Section 13.02. Guaranty. (a) Each Partner (together with any Person who
may hereafter agree to become a guarantor under this Agreement by signing a
written instrument expressly agreeing to be so bound, each a "GUARANTOR," and
collectively, the "GUARANTORS") hereby unconditionally and irrevocably
37
guarantees severally (and not jointly) the full payment in cash, when due, of
such Guarantor's Pro Rata Share of the Clawback Obligation, and if for any
reason the Partnership (the "OBLIGOR") shall fail fully and punctually to pay
the Clawback Obligation, each of the Guarantors shall pay its Pro Rata Share of
such Clawback Obligation; provided that (i) the payment obligation of each
Guarantor shall be reduced by any amounts applied from such Guarantor's
Segregated Account and (ii) the amount payable by each Guarantor shall not
exceed the aggregate Carried Interest distributions received by such Guarantor
directly or indirectly from the Partnership (or held in such Guarantor's
Segregated Account) less the deemed income tax liability (calculated based on
the Tax Percentage) on income allocated with respect to such Carried Interest
distributions. This Agreement is an absolute, unconditional, continuing
guarantee of payment and not of collection, and is in no way conditioned or
contingent upon any attempt to collect from the Obligor, enforce performance by
the Obligor or on any other condition or contingency.
(b) Each guaranty pursuant to paragraph (a) above is expressly for the
benefit of the Funds and the limited partners of the Funds (the "FUND LIMITED
PARTNERS") and shall not be impaired, discharged or terminated by any other act
or omission that may, in accordance with applicable law, affect the
enforceability of a guaranty, and shall not be affected by the bankruptcy,
insolvency or inability to pay of the Obligor, a Guarantor or of any other
party.
(c) Promptly following the determination that a contribution is
required to be made by the Obligor pursuant to Section 10.04(b) of the Fund
Partnership Agreement, the Obligor shall notify the Guarantors of each
Guarantor's Pro Rata Share of the amount of the Clawback Obligation, after
application of the amounts in the Segregated Accounts, which shall be payable to
the Partnership or as otherwise designated in such notice. When the Clawback
Obligation becomes due and payable and the Obligor fails to fully and punctually
pay and perform its Clawback Obligation, the Funds or any of the Fund Limited
Partners may make demand upon a Guarantor for the payment of such Guarantor's
obligations hereunder.
(d) To the fullest extent permitted by law, the Guarantor irrevocably
waives acceptance hereof, presentment, demand, protest, benefit of order, notice
of dishonor and any notice not provided for herein, as well as any requirement
that at any time any action be taken by any Person against the Obligor or any
other Person.
(e) The obligations of each Guarantor under this Agreement shall be
unconditional and primary (as though such Guarantor were the maker of its Pro
Rata Share of the Clawback Obligation), irrespective of the validity or
enforceability of the Clawback Obligation, and shall not be affected by any
action taken under the Clawback Obligation in the exercise of any right or
remedy therein conferred, or by any failure or omission on the part of the Funds
or the Fund Limited Partners to enforce any right given thereunder or hereunder
or any remedy therein conferred, or by any failure or omission on the part of
the Funds or the
38
Fund Limited Partners to enforce any right given thereunder or hereunder or any
remedy conferred thereby or hereby, or by any waiver of any term, covenant,
agreement or condition of the Clawback Obligation or this Agreement, or by any
other circumstance which may or might be in any manner or to any extent vary the
risk of any Guarantor hereunder.
(f) Except for the addition of Guarantors set forth in the following
sentence, this Article 13 may not be amended except with the written consent of
the Required Limited Partners and the unanimous consent of the Guarantors. The
Obligor hereby agrees that it will not admit any Person as a Partner and the
General Partner hereby agrees that it will not permit any Person to become
entitled to any share of its distributions unless such Person shall have first
executed a supplement hereto pursuant to which such Person agrees to become a
Guarantor hereunder and to be bound by the provisions of this Article 13.
39
IN WITNESS WHEREOF, the undersigned have hereto set their hands as of
the day and year first above written.
By: Greenhill Fund Management Co., LLC
as general partner
By:
------------------------------
Name:
Title:
Limited Partner Signature Page
for GCP Managing Partner, L.P.
Limited Partner:
------------------------------
Name:
Limited Partner
Commencement Date:
Address for Notices:
Accepted:
Greenhill Fund Management Co., LLC
By:
------------------------------
Name:
Title:
APPENDIX A
DEFINITIONS
"ADVISERS ACt" means the Investment Advisers Act of 1940, as amended
from time to time.
"AFFILIATE" of any Person means any other Person that, directly or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with such Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"AGREEMENT" means this Amended and Restated Agreement of Limited
Partnership, as amended from time to time.
"ALLOCATION SCHEDULE" has the meaning set forth in Section 3.02(a).
"ANNUAL ALLOCATION DATE" has the meaning set forth in Section 3.02(a).
"AUTHORIZED REPRESENTATIVE" has the meaning set forth in Section
2.08(a).
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized by law to close.
"CAPITAL ACCOUNT" has the meaning set forth in Section 6.04.
"CAPITAL COMMITMENT" means with respect to each of the Partners whose
names appear on Schedule III, the amount set forth opposite the name of such
Partner on Schedule III.
"CAPITAL CONTRIBUTION" has the meaning set forth in Section 5.01.
"CARRIED INTEREST" means the Carried Interest (as defined in the Fund
Partnership Agreements) that may be distributed to the Partnership, as general
partner of the Funds.
"CARRIED INTEREST ANNUAL POOL" has the meaning set forth in Section
3.02.
"CARRIED INTEREST POINTS" has the meaning set forth in Section 3.02(a).
"CARRIED INTEREST SHARE" has the meaning set forth in Section 3.02(a).
A-1
"CARRY PARTICIPATING PARTNER" means, with respect to any Individual
Carry Annual Pool, any Partner who has an Annual Interest in such Annual Pool.
"CARRY VESTED PERCENTAGE" has the meaning set forth in Section 3.05.
"CAUSE" means (i) any act or omission which constitutes a breach by the
Limited Partner of the Limited Partner's obligations to the Partnership or
Greenhill or any of its Affiliates or the failure or refusal of the Limited
Partner to perform satisfactorily any duties reasonably required of the Limited
Partner, which breach, failure or refusal is not corrected (other than failure
to correct by reason of the incapacity of the Limited Partner due to physical or
mental illness) within 10 Business Days after written notification thereof to
the Limited Partner by the Partnership or Greenhill or any of its Affiliates,
(ii) the commission by the Limited Partner of any dishonest or fraudulent act
injurious to the interests or business reputation of any of the Partnership or
Greenhill, or any of its Affiliates, (iii) any other act or omission which is
materially injurious to the interests or business reputation of any of the
Partnership or Greenhill, or its Affiliates or (iv) a substantial violation of
any securities or commodities laws, any rules or regulations issued pursuant to
such laws, or rules and regulations of any securities or commodities exchange or
association of which the Partnership or Greenhill or any of its Affiliates is a
member or of any policy of the Partnership or Greenhill or any of its Affiliates
relating to compliance with any of the foregoing.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMPANY" has the meaning set forth in the Recitals of this Agreement.
"CONTRIBUTING PARTNERS" has the meaning set forth in Section 5.01.
"CONVERSION" has the meaning set forth in the Recitals of this
Agreement.
"DELAWARE ACT" has the meaning set forth in the Recitals of this
Agreement.
"ELIMINATION EVENT" has the meaning set forth in Section 3.05(d).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"FORFEITED CARRIED INTEREST POINTS" has the meaning set forth in
Section 3.05(c).
"FORFEITED INTEREST PARTNER" has the meaning set forth in Section
6.02(b).
"FORFEITURE EVENT" has the meaning set forth in Section 3.05(c).
A-2
"FULLY REDUCED PARTNER" has the meaning set forth in Section 3.06(d).
"FUND INVESTMENT" means, with respect to any Fund, any Investment (as
defined in the applicable Fund Partnership Agreement) made by such Fund pursuant
to such Fund Partnership Agreement.
"FUND PARTNERSHIP AGREEMENTS" means the agreement of limited
partnership of each of the Funds, as amended and in effect from time to time.
"FUND PARTNERSHIP EXPENSES" means any Partnership Expenses (as defined
in any Fund Partnership Agreement).
"FUNDS" has the meaning set forth in Section 1.04.
"GENERAL PARTNER" means Greenhill Fund Management Co., LLC, or any
other Person who, at such time, has been admitted as a general partner of the
Partnership, in such Person's capacity as general partner of the Partnership.
"GREENHILL" means Xxxxxxxxx & Co. Holdings, LLC.
"INDEMNIFICATION OBLIGATION" has the meaning set forth in Section
8.01(b).
"INDEMNIFIED PERSON" means each Limited Partner and each director,
officer, stockholder, employee, agent or representative of the Partnership, the
General Partner or of Greenhill or any of their respective Affiliates.
"INITIATING PARTY" has the meaning set forth in Section 12.12.
"INVESTMENT COMMITTEE" means the Investment Committee of the General
Partner as constituted pursuant to the Amended and Restated Limited Liability
Company Agreement of the General Partner.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended from time to time.
"INVESTMENT EXPENSE" has the meaning set forth in Section 4.01.
"INVESTMENT PERCENTAGE" means, with respect to any Contributing
Partner, the percentage derived by dividing (i) such Contributing Partner's
aggregate Capital Contributions by (ii) the aggregate Capital Contributions of
all Contributing Partners.
"INVESTOR" means each or any investor in any Partnership or Fund
Investment.
A-3
"LIMITED PARTNER" means, at any time, any Person (including any such
Person who has become a Special Limited Partner in accordance with this
Agreement) who is at such time a limited partner of the Partnership and shown as
such on the books and records of the Partnership, in such Person's capacity as
limited partner of the Partnership.
"MAJORITY LIMITED PARTNERS" means, at any time and with respect to a
matter, Limited Partners entitled to vote on such matter holding at such time
more than 50% of all of the Carried Interest Points of all Limited Partners
entitled to vote on such matter (and present for purposes of a quorum, if
applicable) at such time.
"NET INCOME" has the meaning set forth in the applicable Partnership
Agreement.
"NET LOSS" has the meaning set forth in the applicable Partnership
Agreement.
"PARTIALLY REDUCED PARTNER" has the meaning set forth in Section
3.05(c).
"PARTICIPATION PERCENTAGE" means, with respect to any Carry
Participating Partner and any Fund Investment, such Carry Participating
Partner's share of the Carried Interest Share arising from such Fund Investment
as determined in the manner set forth in Section 3.02.
"PARTNER" means the General Partner or any Limited Partner, and
"Partners" means, collectively, the General Partner and the Limited Partners.
"PARTNERSHIP" means GCP Managing Partner, L.P., a Delaware limited
partnership, as such limited partnership may from time to time be constituted.
"PARTNERSHIP EXPENSES" has the meaning set forth in Section 4.01.
"PERSON" means any individual, partnership, corporation, limited
liability company, trust, estate or designated beneficiary or other entity.
"PORTFOLIO COMPANY" means, with respect to any Fund Investment, any
Person that is the issuer of the equity securities, debt securities or other
securities that are the subject of such Fund Investment.
"PROCEEDING" means any action, claim, suit, investigation or proceeding
by or before any court, arbitrator, governmental body or other agency.
"PROCEEDS" means, with respect to any Fund Investment, all cash and
non-cash proceeds received by the Partnership from any sale of, or distribution
from,
A-4
such Fund Investment, including any dividends, interest or other distributions
received by the Partnership in respect of such Fund Investment (net of any sales
commissions, fees or other Investment Expense incurred, directly or indirectly,
by the Partnership in connection with such receipt).
"PROPRIETARY INFORMATION" means any information that may have intrinsic
value to the Partnership or Greenhill, or its Affiliates, clients or other
parties with which the Partnership or Greenhill, or its Affiliates has a
relationship, or that may provide the Partnership or Greenhill, or its
Affiliates with a competitive advantage, including, without limitation, any
trade secrets; formulas; flow charts; computer programs, access codes or other
systems information; algorithms; business, product or marketing plans; sales and
other forecasts; financial information; client lists; and information relating
to compensation and benefits; provided that such Proprietary Information does
not include any information which is available to the general public or is
generally available within the relevant business or industry other than as a
result of the Limited Partner's action. Proprietary Information may be in any
medium or form, including without limitation, physical documents, computer files
or discs, videotapes, audiotapes, and oral communications.
"REALLOCATED CARRIED INTEREST POINTS" means Carried Interest Points
which have been reallocated in accordance with Section 3.02.
"REQUIRED PARTNERS" means, with respect to a fiscal year, both (i)
Partners having a majority of the Carried Interest Points awarded for such year
and (ii) the General Partner.
"RESERVED CARRIED INTEREST POINTS" has the meaning set forth in Section
3.02(c).
"RESPONDING PARTY" has the meaning set forth in Section 12.12.
"SEGREGATED ACCOUNT" has the meaning set forth in Section 6.02(a).
"SPECIAL LIMITED PARTNER" has the meaning set forth in Section 3.05(a).
"SUBSTITUTED LIMITED PARTNER" has the meaning set forth in Section
10.02.
"TAX MATTERS PARTNER" has the meaning set forth in Section 2.07(c).
"TRANSFERS" has the meaning set forth in Section 10.01(a).
"VESTED CARRIED INTEREST POINTS" has the meaning set forth in Section
3.05(c).
A-5
