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FIRST AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
MMC CAPITAL TECH PROFESSIONALS FUND II, L.P.
(A Delaware Limited Partnership)
This First Amended and Restated Limited Partnership Agreement of MMC Capital
Tech Professionals Fund, L.P. (formerly known as Xxxxx & XxXxxxxx Capital
Technology Professionals Venture Fund II, L.P.), dated as of October 31, 2000,
amends and restates the Limited Partnership Agreement of Xxxxx & McLennan
Capital Technology Professionals Venture Fund II, L.P., dated as of April 3,
2000.
Dated as of October 31, 2000
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TABLE OF CONTENTS
SECTION PAGE
SECTION 1 - ORGANIZATION; ETC............................................................................1
1.1 AMENDMENT AND RESTATEMENT............................................................1
1.2 NAME AND OFFICES.....................................................................1
1.3 PURPOSES.............................................................................2
1.4 TERM.................................................................................2
1.5 FISCAL YEAR..........................................................................2
1.6 PARTNERSHIP POWERS...................................................................2
SECTION 2 - THE GENERAL PARTNER..........................................................................4
2.1 MANAGEMENT...........................................................................4
2.2 LIMITATIONS ON THE GENERAL PARTNER...................................................4
2.3 RELIANCE BY THIRD PARTIES............................................................5
2.4 EXPENSES.............................................................................5
2.5 LIABILITY OF THE GENERAL PARTNER AND THE MANAGER.....................................5
2.6 CONFLICTS OF INTEREST................................................................6
2.7 TRANSFER OR WITHDRAWAL BY THE GENERAL PARTNER........................................7
2.8 CERTAIN OTHER RELATIONSHIPS..........................................................7
SECTION 3 - LIMITED PARTNERS.............................................................................8
3.1 LIMITED PARTNERS.....................................................................8
3.2 NO PARTICIPATION IN MANAGEMENT, ETC..................................................8
3.3 LIMITATION OF LIABILITY..............................................................8
3.4 NO PRIORITY, ETC.....................................................................8
SECTION 4 - INVESTMENTS..................................................................................9
4.1 INVESTMENTS IN PORTFOLIO COMPANIES...................................................9
4.2 TEMPORARY INVESTMENTS................................................................9
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SECTION 5 - CAPITAL CONTRIBUTIONS; CAPITAL COMMITMENTS...................................................9
5.1 CAPITAL CONTRIBUTIONS AND CAPITAL COMMITMENTS OF THE PARTNERS........................9
5.2 EXCUSED INVESTMENTS.................................................................10
5.3 DEFAULTING LIMITED PARTNERS.........................................................11
5.4 TERMINATION OF EMPLOYMENT (OTHER THAN TIER 1 LIMITED PARTNERS)......................13
5.5 TERMINATION OF A TIER 1 LIMITED PARTNER.............................................15
5.6 SPECIAL CONSEQUENCES OF TERMINATION OF
ANY PROFITS LIMITED PARTNER.........................................................16
5.7 FURTHER ACTIONS.....................................................................16
SECTION 6 - CAPITAL ACCOUNTS; DISTRIBUTIONS;
ALLOCATIONS; WITHHOLDING............................................................17
6.1 CAPITAL ACCOUNTS....................................................................17
6.2 ADJUSTMENTS TO CAPITAL ACCOUNTS.....................................................17
6.3 DISTRIBUTIONS.......................................................................17
6.4 TAX DISTRIBUTIONS...................................................................18
6.5 OTHER PROVISIONS....................................................................18
6.6 DISTRIBUTIONS OF SECURITIES.........................................................19
6.7 NEGATIVE CAPITAL ACCOUNTS...........................................................19
6.8 NO WITHDRAWAL OF CAPITAL............................................................19
6.9 ALLOCATIONS.........................................................................19
6.10 TAX MATTERS.........................................................................19
6.11 WITHHOLDING TAXES...................................................................20
6.12 CLAWBACK BY PROFITS LIMITED PARTNERS................................................21
6.13 FINAL DISTRIBUTION..................................................................21
SECTION 7 - THE MANAGER.................................................................................22
7.1 APPOINTMENT OF MANAGER..............................................................22
SECTION 8 - BANKING; ACCOUNTING; BOOKS AND
RECORDS; ADMINISTRATIVE SERVICES..................................................22
8.1 BANKING.............................................................................22
8.2 MAINTENANCE OF BOOKS AND RECORDS; ACCESS............................................23
8.3 PARTNERSHIP TAX RETURNS.............................................................23
8.4 VALUATION...........................................................................23
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SECTION 9 - REPORTS TO PARTNERS.........................................................................23
9.1 INDEPENDENT AUDITORS................................................................23
9.2 REPORTS TO CURRENT PARTNERS.........................................................24
9.3 UNITED STATES FEDERAL INCOME TAX INFORMATION........................................24
9.4 ADDITIONAL INFORMATION..............................................................24
SECTION 10 - INDEMNIFICATION OF COVERED PERSONS.........................................................24
10.1 INDEMNIFICATION OF COVERED PERSONS, ETC.............................................24
10.2 EXPENSES, ETC.......................................................................25
10.3 NOTICES OF CLAIMS, ETC..............................................................26
10.4 NO WAIVER...........................................................................26
10.5 RETURN OF DISTRIBUTIONS.............................................................26
10.6 INDEMNIFICATION OF COVERED PERSONS..................................................27
SECTION 11 - TRANSFER OF LIMITED PARTNERSHIP INTERESTS;
WITHDRAWAL OF LIMITED PARTNERS...................................................27
11.1 ADMISSION, SUBSTITUTION AND WITHDRAWAL OF
LIMITED PARTNERS; ASSIGNMENT.................................................27
11.2 ADDITIONAL LIMITED PARTNERS.........................................................30
SECTION 12 - DEATH, INCOMPETENCY OR
BANKRUPTCY OR DISSOLUTION OF PARTNERS............................................33
12.1 BANKRUPTCY, DISSOLUTION OF THE GENERAL PARTNER......................................33
12.2 DEATH, INCOMPETENCY, BANKRUPTCY, DISSOLUTION OR
WITHDRAWAL OF A LIMITED PARTNER..............................................33
SECTION 13 - DURATION AND TERMINATION OF PARTNERSHIP....................................................33
13.1 DURATION............................................................................33
13.2 DISTRIBUTION UPON DISSOLUTION.......................................................35
13.3 DISTRIBUTIONS IN CASH OR IN KIND....................................................35
13.4 TIME FOR LIQUIDATION, ETC...........................................................36
13.5 GENERAL PARTNER AND MANAGER NOT PERSONALLY
LIABLE FOR RETURN OF CAPITAL CONTRIBUTIONS...................................36
13.6 REORGANIZATION OF THE PARTNERSHIP...................................................36
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SECTION 14 - DEFINITIONS................................................................................39
SECTION 15 - AMENDMENTS; POWER OF ATTORNEY..............................................................47
15.1 AMENDMENTS..........................................................................47
15.2 POWER OF ATTORNEY...................................................................48
15.3 FURTHER ACTIONS OF THE LIMITED PARTNERS.............................................51
SECTION 16 - MISCELLANEOUS PROVISIONS...................................................................51
16.1 NOTICES.............................................................................51
16.2 COUNTERPARTS........................................................................51
16.3 TABLE OF CONTENTS AND HEADINGS......................................................51
16.4 SUCCESSORS AND ASSIGNS..............................................................52
16.5 SEVERABILITY........................................................................52
16.6 NON-WAIVER..........................................................................52
16.7 APPLICABLE LAW (SUBMISSION TO JURISDICTION).........................................52
16.8 CONFIDENTIALITY.....................................................................52
16.9 SURVIVAL OF CERTAIN PROVISIONS......................................................53
16.10 WAIVER OF PARTITION.................................................................53
16.11 ENTIRE AGREEMENT....................................................................53
16.12 CURRENCY............................................................................53
Schedule A-- INVESTMENT OBJECTIVE, POLICIES AND PROCEDURES
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This First Amended and Restated Limited Partnership Agreement (as
from time to time amended, supplemented or restated, this "AGREEMENT") of MMC
CAPITAL TECH PROFESSIONALS FUND II, L.P. (formerly known as Xxxxx & XxXxxxxx
Capital Technology Professionals Venture Fund II, L.P.), a Delaware limited
partnership (the "PARTNERSHIP"), is made and entered into as of October 31, 2000
for the purpose of amending and restating the Limited Partnership Agreement of
the Partnership, dated as of April 3, 2000. Capitalized terms used herein
without definition have the meanings specified in Section 14.
SECTION 1
ORGANIZATION; ETC.
1.1 AMENDMENT AND RESTATEMENT. (a) GENERAL. The General Partner
and the Persons from time to time listed in the Partnership Register as limited
partners of the Partnership (in their capacities as limited partners of the
Partnership, the "LIMITED PARTNERS", and the General Partner and the Limited
Partners being herein referred to collectively as the "PARTNERS", both such
terms to include any Person hereafter admitted to the Partnership as a Limited
Partner or a General Partner, as the case may be, in accordance with the terms
hereof, and to exclude any Person that ceases to be a Partner in accordance with
the terms hereof), hereby amend and restate the Prior Agreement in its entirety
by deleting it and replacing it with this Agreement. A Person shall be admitted
as a limited partner of the Partnership at the time that (I) this Agreement, a
Power of Attorney, a Subscription Agreement and an Eligibility Questionnaire, or
counterparts thereof, are executed by or on behalf of such Person and are
accepted by the General Partner, and (II) such Person is listed by the General
Partner as a Limited Partner in the Partnership Register.
(b) PARTNERSHIP REGISTER. The General Partner shall cause to be
maintained in the principal office of the Partnership a register of limited
partnership interests of the Partnership setting forth the name, mailing
address, Capital Commitment and group (as set forth in Section 3.1) of each
Partner (the "PARTNERSHIP REGISTER"). The Partnership Register shall from time
to time be updated as necessary to maintain the accuracy of the information
contained therein. Except as may otherwise be provided herein, any reference in
this Agreement to the Partnership Register shall be deemed to be a reference to
the Partnership Register as in effect from time to time. Subject to the terms of
this Agreement, the General Partner may authorize any action permitted hereunder
in respect of the Partnership Register without any need to obtain the consent of
any other Partner.
1.2 NAME AND OFFICES. The name of the Partnership is MMC Capital
Tech Professionals Fund II, L.P. The registered office of the Partnership in the
State of Delaware is initially located at 0000 Xxxxxx Xxxxxx, in the City of
Wilmington, in the County of New Castle, in the State of Delaware. The name of
its registered agent at that address is The Corporation
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Trust Company. The General Partner may change the registered office of the
Partnership in the State of Delaware or the registered agent for service of
process on the Partnership at any time upon notice to the Limited Partners in
accordance with the terms of this Agreement. The Partnership shall have its
initial principal office for its activities at 00 Xxxxxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxx 00000. The General Partner may designate from time to time another
office within or without the United States as the Partnership's principal office
for its investment activities. The Partnership may from time to time have such
other office or offices within or without the State of Delaware as may be
designated by the General Partner.
1.3 PURPOSES. Subject to the other provisions of this Agreement,
the purposes and business of the Partnership are to co-invest with MMC Capital
Technology Fund II, L.P. (formerly known as Xxxxx & XxXxxxxx Capital Technology
Venture Fund II, L.P.), a Delaware limited partnership (the "INSTITUTIONAL FUND"
and, together with any other investment funds organized by MMC or its Affiliates
which are authorized to co-invest with the Institutional Fund in Portfolio
Companies, the "CO-INVESTMENT FUNDS"), and to acquire, hold, sell or otherwise
dispose of Securities in accordance with and subject to the investment
objectives, policies and procedures referred to in SCHEDULE A attached hereto
(the "INVESTMENT GUIDELINES") and the other provisions of this Agreement, and to
engage in such other activities as the General Partner deems necessary,
advisable, convenient or incidental thereto, to engage in any business which may
lawfully be conducted by a limited partnership formed pursuant to the Act and to
carry on any business relating thereto or arising therefrom, including without
limitation anything incidental, ancillary or necessary to the foregoing.
1.4 TERM. The term of the Partnership commenced on April 3, 2000,
the date set forth in the Certificate of Limited Partnership of the Partnership
(as it may be amended from time to time, the "CERTIFICATE") was filed in the
Office of the Secretary of State of the State of Delaware (the "SECRETARY OF
STATE"), and shall continue, unless the Partnership is sooner dissolved, until
the end of the term of the Institutional Fund (such term, as so extended, being
referred to as the "TERM"), PROVIDED, that the General Partner in its sole
discretion may extend such Term and PROVIDED FURTHER that the Partnership shall
continue after the last calendar day of the Term solely for purposes of Section
10.1(b). Notwithstanding the expiration of the Term, the Partnership shall
continue as a separate legal entity until cancellation of the Certificate in
accordance with Section 13.4(b) and in the manner provided in the Act.
1.5 FISCAL YEAR. The Fiscal Year of the Partnership shall end
on the 31st day of December in each year. The Partnership shall have the same
Fiscal Year for income tax and for financial and partnership accounting
purposes.
1.6 PARTNERSHIP POWERS. In furtherance of the purposes specified
in Section 1.3 and without limiting the generality of Section 2.1, the
Partnership and the General Partner, acting on behalf of the Partnership or on
its own behalf and in its own name, as appropriate,
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shall be empowered to do or cause to be done any and all acts deemed by the
General Partner, in its sole judgment, to be necessary, advisable, appropriate,
proper, convenient or incidental to or for the furtherance of the purposes of
the Partnership including, without limitation, the power and authority:
(a) to acquire, hold, manage, own and Transfer the Partnership's
interests in Securities or any other investments made or other property
or assets held by the Partnership, in accordance with and subject to the
Investment Guidelines;
(b) to establish, have, maintain or close one or more offices
within or without the State of Delaware and in connection therewith to
rent or acquire office space and to engage personnel;
(c) to open, maintain and close bank and brokerage (including,
without limitation, margin) accounts, including, without limitation, to
draw checks or other orders for the payment of moneys, to exchange U.S.
dollars held by the Partnership into non-U.S. currencies and vice versa,
to enter into currency forward and futures contracts and to hedge
Portfolio Investments, and to invest funds in Temporary Investments;
(d) to bring, defend, settle and dispose of Proceedings at law
or in equity or before any Governmental Authority;
(e) to retain and remove consultants, custodians, attorneys,
placement agents, accountants, actuaries and such other agents and
employees of the Partnership as it may deem necessary or advisable, and
to authorize each such agent and employee to act for and on behalf of
the Partnership;
(f) to retain the Manager, as contemplated by Section 7.1, to
render investment advisory and managerial services to the Partnership,
PROVIDED that such retention shall not relieve the General Partner of
any of its obligations hereunder;
(g) to cause the Partnership to enter into and carry out the terms
of the Subscription Agreements without any further act, approval or vote
of any Partner (including, without limitation, any agreements to induce
any Person to purchase a limited partnership interest);
(h) to make all elections, investigations, evaluations and
decisions, binding the Partnership thereby, that may, in the sole
judgment of the General Partner, be necessary, appropriate, desirable or
convenient for the acquisition, holding or Transfer of Securities for
the Partnership;
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(i) to enter into, deliver, perform and carry out contracts and
agreements of every kind necessary or incidental to the offer and sale of
limited partner interests in the Partnership, to the acquisition, holding
and Transfer of Securities, or otherwise, to the accomplishment of the
Partnership's purposes, and to take or omit to take such other action in
connection with such offer and sale, with such acquisition, holding or
Transfer, or with the business of the Partnership as may be necessary,
desirable or convenient to further the purposes of the Partnership;
(j) to borrow money and to issue guarantees; and
(k) to carry on any other activities necessary to, in connection
with, or incidental to any of the foregoing or the Partnership's
business.
SECTION 2
THE GENERAL PARTNER
2.1_ MANAGEMENT. The management, control and operation of and the
determination of policy with respect to the Partnership and its affairs shall be
vested exclusively in the General Partner (acting directly or through its duly
appointed agents), which is hereby authorized and empowered on behalf and in the
name of the Partnership, subject to Section 2.2 and the other terms of this
Agreement, to carry out any and all of the objects and purposes of the
Partnership and to perform all acts and enter into and perform all contracts and
other undertakings that it may in its sole discretion deem necessary, advisable,
convenient or incidental thereto. The General Partner may exercise on behalf of
the Partnership, and may delegate to the Manager, all of the powers set forth in
Section 1.6, PROVIDED, that the management and the conduct of the activities of
the Partnership shall remain the sole responsibility of the General Partner and
all decisions relating to the selection and disposition of the Partnership's
investments shall be made exclusively by the General Partner in accordance with
this Agreement. The General Partner is hereby authorized to appoint a successor
general partner.
2.2 LIMITATIONS ON THE GENERAL PARTNER. The General Partner
shall not:
(a) do any act in contravention of any applicable law or
regulation, or any provision of this Agreement or of the Certificate;
(b) possess Partnership property for other than a Partnership
purpose;
(c) admit any Person as a general partner of the Partnership
except as permitted by this Agreement and the Act;
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(d) admit any Person as a Limited Partner except as permitted by
this Agreement and the Act;
(e) Transfer its interest in the Partnership except as permitted
by this Agreement and the Act; or
(f) permit the registration or listing of interests in the
Partnership on an "established securities market," as such term is used
in Treasury Regulations section 1.7704-1.
2.3 RELIANCE BY THIRD PARTIES. In dealing with the General Partner
and its duly appointed agents (including, without limitation, the Manager), no
Person shall be required to inquire as to the General Partner's or any such
agent's authority to bind the Partnership.
2.4 EXPENSES. All Partnership Expenses and Organizational
Expenses shall be paid by the Partnership.
2.5 LIABILITY OF THE GENERAL PARTNER AND THE MANAGER. (a) GENERAL.
Except as provided in the Act, the General Partner has the powers, duties,
responsibilities and liabilities of a partner in a partnership without limited
partners (I) to the Partnership and the other Partners and (II) to Persons other
than the Partnership and the other Partners. No Covered Person shall be liable
to the Partnership or any Partner for any act or omission taken or suffered by
such Covered Person in good faith. No Partner shall be liable to the Partnership
or any Partner for any action taken by any other Partner. To the extent that, at
law or in equity, a Covered Person has duties and liabilities to the Partnership
or to the Partners, such Covered Person acting under this Agreement or otherwise
shall not be liable to the Partnership or any Partner for its good faith
reliance on the provisions of this Agreement. The provisions of this Agreement,
to the extent they expressly restrict, replace or modify the duties and
liabilities of a Covered Person otherwise existing at law or in equity, are
agreed by the Partners to restrict, replace or modify such other duties and
liabilities of such Covered Person. Except as otherwise expressly provided in
this Agreement, the General Partner shall not be liable for the return of all or
any portion of the Limited Partner's Capital Accounts or Capital Contributions.
(b) RELIANCE. A Covered Person (I) shall incur no liability in
acting upon any signature or writing believed by it to be genuine, (II) may rely
on a certificate signed by an officer of any Person in order to ascertain any
fact with respect to such Person or within such Person's knowledge, and (III)
may rely on an opinion of counsel selected by such Covered Person with respect
to legal matters. Each Covered Person may act directly or through its agents or
attorneys. Each Covered Person may consult with counsel, appraisers, engineers,
accountants, actuaries, auditors and other skilled Persons of its choosing, and
shall not be liable for anything done, suffered or omitted in good faith
reliance upon the advice of any of such Persons. No Covered Person shall be
liable to the Partnership or any Partner for any error of
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judgment made in good faith by a responsible officer or officers of the Covered
Person. Except as otherwise provided in this Section 2.5, no Covered Person
shall be liable to the Partnership or any Partner for any mistake of fact or
judgment by the Covered Person in conducting the affairs of the Partnership or
otherwise acting in respect of and within the scope of this Agreement. No
Covered Person shall be liable for the return to any Limited Partner of all or
any portion of any Limited Partner's Capital Account or Capital Contributions
except as otherwise provided herein.
(c) DISCRETION. Whenever in this Agreement the General Partner or
the Manager is permitted or required to make a decision (I) in its "sole
discretion" or "discretion" or under a grant of similar authority or latitude,
the General Partner or the Manager, as the case may be shall be entitled to
consider such interests and factors as it desires, including, without
limitation, its own interests, or (II) in its "good faith" or under another
expressed standard, the General Partner or the Manager, as the case may be shall
act under such express standard and shall not be subject to any other or
different standard imposed by this Agreement or any other agreement or by
relevant provisions of law or in equity or otherwise. If any questions should
arise with respect to the operation of the Partnership, which are not otherwise
specifically provided for in this Agreement or the Act, or with respect to the
interpretation of this Agreement, the General Partner is hereby authorized to
make a final determination with respect to any such question and to interpret
this Agreement in good faith, and its determination and interpretation so made
shall be final and binding on all parties.
2.6 CONFLICTS OF INTEREST. (a) POTENTIAL CONFLICTS OF INTEREST.
While the Manager and the General Partner intend to avoid situations involving
conflicts of interest, each Limited Partner acknowledges that there may be
situations in which the interests of the Partnership, with respect to a
Portfolio Company or otherwise, may conflict with the interests of the General
Partner, a Senior Principal, the Manager or their respective Affiliates. Each
Limited Partner agrees that the activities of the General Partner, a Senior
Principal, the Manager, and their respective Affiliates not prohibited by this
Agreement may be engaged in by the General Partner, any Senior Principal, the
Manager or any such Affiliate, as the case may be, and will not, in any case or
in the aggregate, be deemed a breach of this Agreement or any duty owed by any
such Person to the Partnership or to any Partner.
(b) ACTUAL CONFLICTS OF INTEREST. On any issue involving actual
conflicts of interest not provided for elsewhere in this Agreement, each of the
Manager and the General Partner will be guided by its good faith judgment as to
the best interests of the Partnership and shall take such actions as are
determined by the Manager and the General Partner, as the case may be, to be
necessary or appropriate to ameliorate any such conflict of interest and, in
addition, may take such actions as may be permitted or required under the
Institutional Fund Agreement. If the General Partner or the Manager takes an
action in respect of a matter giving rise to a conflict of interest, neither the
General Partner nor the Manager nor any of their respective Affiliates
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shall have any liability to the Partnership or any Limited Partner for actions
in respect of such matter taken in good faith by them in the pursuit of their
own respective interests.
2.7 TRANSFER OR WITHDRAWAL BY THE GENERAL PARTNER. To the
extent permitted by law,
(a) the General Partner may at its election convert to a limited
partnership, limited liability company or other entity formed under the
laws of the State of Delaware or any other jurisdiction, or
(b) the General Partner may Transfer its interest as the general
partner of the Partnership to, or be merged with and into, a limited
partnership, limited liability company or other entity formed under the
laws of the State of Delaware or any other jurisdiction for the purpose
of serving as the general partner of the Partnership,
but only if in any such case such conversion, Transfer or merger will not result
in a Material Adverse Effect on the Partnership or on the Limited Partners (in
their capacities as limited partners of the Partnership). Upon any such
conversion to such a limited partnership, limited liability company or other
entity, or any such Transfer by or merger of the General Partner to or with such
a limited partnership, limited liability company or other entity, such limited
partnership, limited liability company or other entity shall be deemed to be the
same Person as the General Partner for all purposes of this Agreement. All
Subscription Agreements applicable to the Partnership that are in effect at the
time of any such conversion, Transfer or merger shall thereafter continue in
full force and effect.
2.8 CERTAIN OTHER RELATIONSHIPS. MMC, the General Partner, the
Manager, each Senior Principal, and any of their respective Affiliates, or any
subset of the foregoing, may organize or sponsor, private investment funds,
including, without limitation, funds having primary investment objectives and
policies substantially the same as those of the Partnership. Other than as
expressly contemplated herein, this Agreement shall not restrict or limit the
activities of MMC, the General Partner, the Manager, any Senior Principal or any
of their respective Affiliates.
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SECTION 3
LIMITED PARTNERS
3.1 LIMITED PARTNERS. Limited Partners shall be divided into
groups as follows:
(a) "EMPLOYER LIMITED PARTNERS" shall be those Limited Partners
designated as such in the Partnership Register.
(b) "PROFITS LIMITED PARTNERS" shall be those Limited Partners
designated as such in the Partnership Register.
(c) "CASH LIMITED PARTNERS" shall be those Limited Partners
designated as such in the Partnership Register.
The Associated Commitments of the Profits Limited Partners shall be associated
on the records of the Partnership with the Capital Commitment of the relevant
Employer Limited Partner.
3.2 NO PARTICIPATION IN MANAGEMENT, ETC. No Limited Partner, in
its capacity as a limited partner of the Partnership, shall take part in the
management or control of the Partnership's affairs, transact any business in the
Partnership's name or have the power to sign documents for or otherwise bind the
Partnership. No Limited Partner shall have the right to vote for the election,
removal or replacement of the General Partner. No provision of this Agreement
shall obligate any Limited Partner to refer investments to the Partnership or
restrict any investments that a Limited Partner may make.
3.3 LIMITATION OF LIABILITY. Except as may otherwise be provided
by the Act or in Section 10.1(b) or Section 6.12 or otherwise herein, the
liability of a Limited Partner for any loss of the Partnership shall not exceed
the sum of (A) the amount of its Capital Commitment, if any, (B) its interest in
the undistributed assets of the Partnership, (C) its obligation to make other
payments expressly provided for in this Agreement, and (D) its liability under
any applicable law, including without limitation the Act.
3.4 NO PRIORITY, ETC. No Limited Partner shall have priority over
any other Limited Partner either as to the return of the amount of its Capital
Contribution to the Partnership or, except as provided in Section 6, as to any
allocation of income, gain, deduction or loss.
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SECTION 4
INVESTMENTS
4.1 INVESTMENTS IN PORTFOLIO COMPANIES. (a) CO-INVESTMENT.
The Partnership shall co-invest with the other Co-Investment Funds in a manner
determined in the sole discretion of the General Partner to be in accordance
with Section 4.7 of the Institutional Fund Agreement.
(b) REINVESTMENT. Proceeds from the disposition of Portfolio
Investments (I) may be reinvested by the General Partner to the same extent that
the general partner of the Institutional Fund is permitted by the Institutional
Fund Agreement to reinvest proceeds from the disposition of portfolio
investments of the Institutional Fund, and (II) subject to Section 5.5, may be
retained and used to make Portfolio Investments if the General Partner, in its
sole discretion, determines that such retention and use would be reasonable in
light of the timing and size of anticipated Portfolio Investments.
4.2 TEMPORARY INVESTMENTS. The General Partner may invest funds
held by the Partnership in Temporary Investments pending investment in Portfolio
Investments, pending distribution or for any other purpose.
SECTION 5
CAPITAL CONTRIBUTIONS; CAPITAL COMMITMENTS
5.1 CAPITAL CONTRIBUTIONS AND CAPITAL COMMITMENTS OF THE PARTNERS.
(a) CAPITAL CONTRIBUTIONS. Except as otherwise provided herein, each Partner
(other than the Profits Limited Partners) shall make Capital Contributions to
the Partnership in the aggregate amount of the Capital Commitment of such
Partner as set forth opposite its name in the Partnership Register, PROVIDED
that, except as otherwise provided herein, the Partners (other than the Profits
Limited Partners) shall make such Capital Contributions to the Partnership (I)
in respect of Portfolio Investments, PRO RATA based on the Capital Commitments
or Remaining Capital Commitments, as determined with respect to each Portfolio
Investment by the General Partner in its sole discretion, of all the Partners
(other than Defaulting Cash Limited Partners and Limited Partners (including,
without limitation, an Employer Limited Partner in respect of an associated
Profits Limited Partner) excused from making such a Capital Contribution
pursuant to Section 5.2), and (II) in respect of Organizational Expenses and
Partnership Expenses, PRO RATA based on the Capital Commitments of all the
Partners (other than Defaulting Cash Limited Partners), and PROVIDED FURTHER
that in respect of each Partner, such Partner's aggregate Capital Contributions
shall not exceed such Partner's Capital Commitment.
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(b) DRAWDOWNS. Except as otherwise provided herein, the Capital
Contributions of each Partner (other than the Profits Limited Partners), shall
be paid in separate Drawdowns, subject to the following terms and conditions:
(i) The General Partner shall provide each Employer Limited Partner
and each Cash Limited Partner with a notice (as the same may be revised
by the General Partner in its sole discretion, the "DRAWDOWN NOTICE") at
least 3 days prior to the date of Drawdown. Each such Partner shall pay
to the Partnership the Capital Contribution of such Partner as specified
in the Drawdown Notice, in cash or other immediately available funds by
the date of Drawdown specified in the Drawdown Notice.
(ii) Subject to Section 5.2, each Limited Partner (other than the
Profits Limited Partners) shall pay to the Partnership the Capital
Contribution of such Partner in respect of Portfolio Investments,
Partnership Expenses or Organizational Expenses, as the case may be, as
specified in the Drawdown Notice (as the same may be revised), in cash or
other immediately available funds by the date of Drawdown specified in
the Drawdown Notice.
(iii) Each Capital Contribution by an Employer Limited Partner in
respect of a Capital Commitment shall be associated on the records of the
Partnership with the Profits Limited Partner with which such Capital
Commitment is associated.
(c) CREDITORS. The provisions of this Section 5.1 are intended
solely to benefit the Partners and, to the fullest extent permitted by
applicable law, shall not be construed as conferring any benefit upon any
creditor of the Partnership (and no such creditor shall be a third party
beneficiary of this Agreement), and no Partner shall have any duty or obligation
to any creditor of the Partnership to make any Capital Contributions or to cause
the General Partner to deliver a Drawdown Notice.
5.2 EXCUSED INVESTMENTS. The General Partner may, in its sole
discretion, excuse, in whole or in part, any Limited Partner from participation
in any Portfolio Investment if the General Partner, in its sole discretion, has
determined that any such participation (I) may constitute a conflict of interest
for such Limited Partner, the Partnership or any other Co-Investment Fund, (ii)
may subject such Limited Partner, the Partnership or any other Co-Investment
Fund to a material tax or material regulatory requirement to which it or they
would not otherwise be subject, or which is reasonably likely to materially
increase any such material tax or material regulatory requirement beyond what it
would otherwise have been, or (III) may cause a Material Adverse Effect. In the
event that, pursuant to the immediately preceding sentence, the General Partner
excuses a Profits Limited Partner with respect to participation in a Portfolio
Investment, the Associated Contribution of the Employer Limited Partner
associated with such Profits Limited Partner shall be excused. For the avoidance
of doubt, there will be
10
no reduction in the Remaining Associated Commitment of an Employer Limited
Partner with respect to an excused Profits Limited Partner associated with such
Employer Limited Partner.
5.3 DEFAULTING LIMITED PARTNERS. (a) CASH LIMITED PARTNERS. If any
Cash Limited Partner fails to contribute, in a timely manner, any portion of the
Capital Commitment required to be contributed by such Cash Limited Partner
hereunder or pursuant to such Cash Limited Partner's Subscription Agreement, or
any portion of the amounts determined pursuant to Section 10.1 to be required to
be contributed by such Cash Limited Partner, and any such failure continues for
ten Business Days after receipt of written notice thereof from the General
Partner (a "CASH LIMITED PARTNER DEFAULT"), then such Cash Limited Partner (a
"DEFAULTING CASH LIMITED PARTNER") may be designated by the General Partner as
in default and shall thereafter be subject to the provisions of this Section
5.3. The General Partner may choose not to designate any such Cash Limited
Partner as a Defaulting Cash Limited Partner and may agree to waive or permit
the cure of all or part of any default by such Defaulting Cash Limited Partner,
subject to such conditions as the General Partner and the Defaulting Cash
Limited Partner may agree upon. In the event that a Cash Limited Partner becomes
a Defaulting Cash Limited Partner, (I) such a Defaulting Cash Limited Partner's
Remaining Capital Commitment (the "DEFAULTED COMMITMENTS") shall be deemed to be
zero (except that the General Partner, the Employer Limited Partners and the
Cash Limited Partners that are not Defaulting Cash Limited Partners shall have
an option, exercisable within ten Business Days following the date of the notice
referred to in the first sentence of this Section 5.3(a), to assume the
Defaulted Commitments, if any, of the Defaulting Cash Limited Partner, such
Defaulted Commitments to be assumed in proportion to the Capital Commitments
and/or Associated Commitments, as the case may be, of the Partners exercising
such option (the "EXERCISING PARTNERS")), (II) such Defaulting Cash Limited
Partner shall be entitled to receive only one-half of the distributions that it
would have been entitled to receive had it not become a Defaulting Cash Limited
Partner, and the other one-half of such distributions (the "FORFEITED
DISTRIBUTIONS") shall be made in accordance with this Section 5.3(a), and (III)
such Defaulting Cash Limited Partner shall not have a right to receive any
distributions with respect to any Portfolio Investment for which such Defaulting
Cash Limited Partner failed to contribute when due any portion of such
Defaulting Cash Limited Partner's Capital Commitment or any Portfolio Investment
made on or after such date. The Forfeited Distributions of a Defaulting Cash
Limited Partner pursuant to this Section 5.3(a) shall be applied as follows when
and as amounts become distributable: FIRST, to the Partnership in an amount
equal to the Organizational Expenses and Partnership Expenses, in each case as
estimated in good faith by the Manager, attributable to such Defaulting Cash
Limited Partner's Capital Commitment for the period from the date of Cash
Limited Partner Default through the end of the Term, and SECOND, to the
Exercising Partners in accordance with the respective Capital Commitments and/or
Associated Commitments, as the case may be, of such Partners, or, if there are
no Exercising Partners, to all Partners other than any Limited Partner, Cash
Limited Partner, or Profits Limited Partner in default in accordance with their
respective Capital Commitments and/or Associated Commitments, as the case may
be. In addition, such
11
Defaulting Cash Limited Partner shall contribute to the Partnership an amount
equal to the contribution, if any, that such Defaulting Cash Limited Partner
would be required to make to the Partnership pursuant to Section 6.11(d),
Section 6.12 or Section 10.1(b) if all of the assets of the Partnership were
liquidated as of the date of Cash Limited Partner Default for their Value and
all of the liabilities of the Partnership were satisfied in accordance with
their terms and the Partnership was dissolved in accordance with Section 13.
Notwithstanding any other provision of this Section 5.3(a), the obligations of
any Defaulting Cash Limited Partner to the Partnership hereunder shall not be
extinguished as a result of the operation of this Section 5.3(a). The General
Partner shall have the right, in its sole discretion, to pursue all remedies at
law or in equity available to it with respect to the default of a Defaulting
Cash Limited Partner.
(b) PROFITS LIMITED PARTNERS. If any Profits Limited Partner (A)
fails to make, in a timely manner, any contributions required to be made by such
Limited Partner pursuant to Section 6.12 or Section 10.1(b), or (B) fails to
defer compensation at the time and in the amount required by the MMC Capital
Plan, and any such failure continues for ten Business Days after receipt of
written notice thereof from the General Partner (a "PROFITS LIMITED PARTNER
DEFAULT"), then such Limited Partner (a "DEFAULTING PROFITS LIMITED PARTNER")
may be designated by the General Partner as in default and shall thereafter be
subject to the provisions of this Section 5.3(b). To the extent permitted by the
MMC Capital Plan, the General Partner may choose not to designate any Profits
Limited Partner as a Defaulting Profits Limited Partner and may agree to waive
or permit the cure of all or part of any default by such Defaulting Profits
Limited Partner, subject to such conditions as the General Partner and the
Defaulting Profits Limited Partner may agree upon. Except as may be otherwise
provided in this Agreement, in the event that a Profits Limited Partner becomes
a Defaulting Profits Limited Partner, (I) such a Defaulting Profits Limited
Partner's interest in the Partnership attributable to such Defaulting Profits
Limited Partner's unfunded deferral under the MMC Capital Plan would be
purchased by the relevant Employer Limited Partner or its designee for $1.00,
and (II) such Defaulting Profits Limited Partner shall not have a right to
receive any distributions with respect to any Portfolio Investment made on or
after the date on which such Defaulting Profits Limited Partner failed to make
deferrals when due under the MMC Capital Plan. For the avoidance of doubt,
amounts deferred pursuant to the MMC Capital Plan by a Profits Limited Partner
but not yet invested in Portfolio Investments at the time of a Profits Limited
Partner Default by such Profits Limited Partner shall not be invested in
Portfolio Investments. In addition, such Defaulting Profits Limited Partner
shall contribute to the Partnership an amount equal to the contribution, if any,
that such Defaulting Profits Limited Partner would be required to make to the
Partnership pursuant to Section 6.12 or Section 10.1(b) if all of the assets of
the Partnership were liquidated as of the date of Profits Limited Partner
Default for their Value and all of the liabilities of the Partnership were
satisfied in accordance with their terms and the Partnership was dissolved in
accordance with Section 13, and such Defaulting Profits Limited Partner's
contribution in respect of Section 6.12 shall be distributed to its associated
Employer Limited Partner. In addition, the Defaulting Profits Limited Partner
may be required to purchase the
12
portion of the interest of its associated Employer Limited Partner in the
Partnership attributable to any outstanding Advance made by such Employer
Limited Partner, in accordance with the provisions of sections 8.2 and 8.3 of
the MMC Capital Plan. Notwithstanding any other provision of this Section
5.3(b), the obligations of any Defaulting Profits Limited Partner to the
Partnership hereunder shall not be extinguished as a result of the operation of
this Section 5.3(b). The General Partner shall have the right, in its sole
discretion, to pursue all remedies at law or in equity available to it with
respect to the Profits Limited Partner Default of a Defaulting Profits Limited
Partner.
5.4 TERMINATION OF EMPLOYMENT (OTHER THAN TIER 1 LIMITED
PARTNERS). (a) TERMINATION IN THE EVENT OF DEATH, TOTAL DISABILITY OR
RETIREMENT. If a Cash Limited Partner (other than a Tier 1 Cash Limited Partner)
or a Profits Limited Partner (other than a Tier 1 Profits Limited Partner) dies
or is terminated as an employee or consultant of an Employer Limited Partner by
reason of such Limited Partner's Total Disability or Retirement, such Cash
Limited Partner or Profits Limited Partner shall retain his or her interest in
the Partnership, PROVIDED that such Limited Partner or his or her estate or
legal representative may at any time request that the General Partner (or in the
case of a Profits Limited Partner, the Employer Limited Partner associated with
such terminated Profits Limited Partner) purchase, or designate a purchaser for,
all or a portion of the interest in the Partnership of such Limited Partner, and
in the case of a Cash Limited Partner, terminate such Cash Limited Partner's
obligation to make future Capital Contributions to the Partnership in respect of
its Capital Commitment to fund Portfolio Investments made after the date of such
request. The General Partner and the affected Employer Limited Partner may grant
any such request in whole or in part, but shall have no obligation to grant any
such request. If the General Partner or the affected Employer Limited Partner
grants the request that an interest be purchased, the General Partner or the
affected Employer Limited Partner, as the case may be, or such Person's
designee, shall provide notice no later than 90 days after such request is made
and shall pay to such Limited Partner an amount equal to the Value of such
Limited Partner's interest in the Partnership (or a greater amount agreed to by
the General Partner or the Employer Limited Partner, as the case may be) within
60 days of such notice. In addition, unless the General Partner in its sole
discretion determines otherwise, such terminated Cash Limited Partner or Profits
Limited Partner shall contribute to the Partnership (or the Partnership shall
withhold from distributions otherwise due to such Cash Limited Partner or
Profits Limited Partner) an amount equal to the contribution, if any, that such
terminated Limited Partner would be required to make to the Partnership pursuant
to Section 6.11(d), Section 6.12 or Section 10.1(b) if all of the assets of the
Partnership were liquidated as of the date of termination for their Value and
all of the liabilities of the Partnership were satisfied in accordance with
their terms and the Partnership was dissolved in accordance with Section 13.
Without duplication, the obligations of such terminated Limited Partner pursuant
to Section 6.11(d), Section 6.12 and Section 10.1(b) shall survive with the same
effect as if such terminated Limited Partner had retained its interest in the
Partnership.
13
(b) OTHER TERMINATION. If a Cash Limited Partner (other than a Tier
1 Cash Limited Partner) or a Profits Limited Partner (other than a Tier 1
Profits Limited Partner) is terminated as an employee of or consultant to an
Employer Limited Partner for a reason other than death, Total Disability or
Retirement, the General Partner (or in the case of such a terminated Profits
Limited Partner, the Employer Limited Partner associated with such terminated
Profits Limited Partner) will have the right, but not the obligation, to
purchase or designate a purchaser for the interest in the Partnership of such
Limited Partner at any time after such termination. If such termination is an
involuntary termination without an MMC Capital Cause Determination or is a
voluntary termination, the purchase price for such Limited Partner's interest
shall be the fair market value of such interest, which shall be as mutually
agreed by the parties, provided that in the absence of such agreement, fair
market value shall be determined by an independent appraiser selected by the
General Partner (or the Employer Limited Partner, as the case may be) and
approved by the Limited Partner, which approval shall not be unreasonably
withheld. The cost of such appraisal shall be shared equally by the General
Partner (or the Employer Limited Partner, as the case may be) and the Limited
Partner. If the employment of a Limited Partner is terminated due to an
involuntary termination with an MMC Capital Cause Determination, the purchase
price for such Limited Partner's interest in the Partnership shall be the lesser
of (I) an amount equal to the aggregate Capital Contributions made by such
Limited Partner to the Partnership, (II) the Value of such interest or (III) the
fair market value of such interest determined by an independent appraiser
selected by the General Partner (or the Employer Limited Partner, as the case
may be). Fair market value as of any date shall be determined as if the
Partnership had been liquidated in an orderly manner as of such date. Upon any
such purchase of a Limited Partner's interest in the Partnership, such Limited
Partner shall have no further interest in the Partnership. In the absence of any
such purchase of a Limited Partner's interest in the Partnership, such Limited
Partner shall remain a Limited Partner in the Partnership and shall remain
subject to all provisions of this Agreement, PROVIDED that such Limited Partner
shall have no rights under Section 8.2(b). In addition, unless the General
Partner in its sole discretion determines otherwise, the obligation of such a
terminated Cash Limited Partner to make further Capital Contributions to the
Partnership in respect of his or her Capital Commitment to fund Portfolio
Investments made after the date of such Cash Limited Partner's termination will
terminate, PROVIDED that if such obligation is not to be so terminated, notice
that such obligation will continue will be given to such Cash Limited Partner
within 180 days of the termination of employment of such Cash Limited Partner.
In addition, unless the General Partner in its sole discretion determines
otherwise, such terminated Cash Limited Partner or Profits Limited Partner shall
contribute to the Partnership (or the Partnership shall withhold from
distributions otherwise due to such Cash Limited Partner or Profits Limited
Partner) an amount equal to the contribution, if any, that such terminated
Limited Partner would be required to make to the Partnership pursuant to Section
6.11(d), Section 6.12 or Section 10.1(b) if all of the assets of the Partnership
were liquidated as of the date of termination for their Value and all of the
liabilities of the Partnership were satisfied in accordance with their terms and
the Partnership was dissolved in accordance with Section 13. Without
duplication,
14
the obligations of such terminated Limited Partner pursuant to Section 6.11(d),
Section 6.12 and Section 10.1(b) shall survive with the same effect as if such
terminated Limited Partner had retained its interest in the Partnership.
5.5 TERMINATION OF A TIER 1 LIMITED PARTNER. (a) TERMINATION IN
THE EVENT OF DEATH, TOTAL DISABILITY OR RETIREMENT. If a Tier 1 Limited Partner
dies or is terminated as an employee of or consultant to an Employer Limited
Partner by reason of such Tier 1 Limited Partner's Total Disability or
Retirement, such Tier 1 Limited Partner shall retain his or her interest in the
Partnership, PROVIDED that such Tier 1 Limited Partner or his or her estate or
legal representative may at any time request that the General Partner (or in the
case of a Tier 1 Profits Limited Partner, its associated Employer Limited
Partner) purchase or designate a purchaser for, all or a portion of the interest
in the Partnership of such Tier 1 Limited Partner, and in the case of a Tier 1
Cash Limited Partner, terminate such Tier 1 Cash Limited Partner's obligation to
make future Capital Contributions to the Partnership in respect of its Capital
Commitment to fund Portfolio Investments made after the date of such request.
The General Partner and the affected Employer Limited Partner may grant any such
request in whole or in part, but have no obligation to grant any such request.
If the General Partner or the affected Employer Limited Partner grants the
request that an interest be purchased, the General Partner or the affected
Employer Limited Partner, as the case may be, or such Person's designee shall
provide notice no later than 90 days after such request is made and, shall pay
to such Limited Partner an amount equal to the Value of such Limited Partner's
interest in the Partnership within 60 days of such notice. The obligations of
such terminated Limited Partner pursuant to Section 6.11(d), Section 6.12 and
Section 10.1(b) shall survive with the same effect as if such terminated Limited
Partner had retained its interest in the Partnership.
(b) OTHER TERMINATION. If a Tier 1 Limited Partner is terminated as
an employee or consultant for a reason other than death, Total Disability or
Retirement, the General Partner (or in the case of a Tier 1 Profits Limited
Partner, the Employer Limited Partner associated with such Tier 1 Profits
Limited Partner) may, but only with the consent of such Tier 1 Limited Partner,
purchase or designate a purchaser for the interest in the Partnership of such
Tier 1 Limited Partner at a purchase price that is mutually agreed upon but
which shall not be less than the Value of such interest. In addition, unless
both the General Partner and a terminated Tier 1 Cash Limited Partner agree
otherwise, the Remaining Capital Commitments of such Tier 1 Cash Limited Partner
shall be reduced to zero and such terminated Tier 1 Cash Limited Partner shall
have no further obligation to make Capital Contributions to the Partnership.
Without duplication, the obligations of such terminated Tier 1 Cash Limited
Partner pursuant to Section 6.11(d), Section 6.12, and Section 10.1(b), as
applicable, shall survive with the same effect as if such terminated Limited
Partner had retained its interest in the Partnership. Upon termination of the
employment of a Tier 1 Limited Partner, such Tier 1 Limited Partner or
representative thereof, can require (I) that Distributable Cash apportioned to
such Tier 1 Limited Partner be
15
distributed promptly, and (II) that proceeds from the disposition of Portfolio
Investments apportioned to such Limited Partner shall not be reinvested pursuant
to Section 4.1(b).
(c) COMMITMENTS. In the event the Capital Commitments of any Tier 1
Cash Limited Partner are reduced pursuant to Section 5.5, the Employer Limited
Partner will assume such Capital Commitments to the extent required to ensure
that the Capital Commitments of the Tier 1 Cash Limited Partners, aggregated
with the Capital Commitments of the Employer Limited Partner and the Associated
Commitments of the Tier 1 Profits Limited Partners, equal at least $15 million.
5.6 SPECIAL CONSEQUENCES OF TERMINATION OF ANY PROFITS LIMITED
PARTNER. If, for any reason, a Profits Limited Partner is terminated as an
employee of or consultant to its associated Employer Limited Partner, there are
additional consequences as set forth in the MMC Capital Plan. Such Profits
Limited Partner will have an interest only in Portfolio Investments that were
made during the period when the Profits Limited Partner made deferrals when due
under the MMC Capital Plan. The Employer Limited Partner associated with such
terminated Profits Limited Partner will purchase the portion of such Profits
Limited Partner's interest in the Partnership attributable to such terminated
Profits Limited Partner's unpaid deferral under the MMC Capital Plan for $1.00,
and such terminated Profits Limited Partner's obligation to make further
deferrals under the MMC Capital Plan will be reduced to zero. If, at the time
the employment of a Profits Limited Partner with MMC Capital is terminated, (I)
such Profits Limited Partner has not deferred an amount under the MMC Capital
Plan at least equal to the amount of such Profits Limited Partner's Associated
Commitment, and (II) the amount, if any, of the Capital Contributions of such
Employer Limited Partner in respect of the associated Profits Limited Partner's
interest in the Partnership exceeds the amount such Profits Limited Partner has
deferred under the MMC Capital Plan, then such Employer Limited Partner may, in
its discretion, require the Profits Limited Partner to purchase, for cash, the
portion of such Employer Limited Partner's interest in the Partnership
attributable to such excess Capital Contributions of such Employer Limited
Partner in accordance with the provisions of sections 8.2 and 8.3 of the MMC
Capital Plan.
5.7 FURTHER ACTIONS. To the extent necessary in the sole
discretion of the General Partner, the General Partner shall cause this
Agreement to be amended, without the need for any further act, vote or approval
of any other Partner or Person, to reflect as appropriate the occurrence of any
of the transactions referred to in this Section 5 or in Section 11 as promptly
as is practicable after such occurrence.
16
SECTION 6
CAPITAL ACCOUNTS; DISTRIBUTIONS; ALLOCATIONS; WITHHOLDING
6.1 CAPITAL ACCOUNTS. There shall be established on the books
and records of the Partnership a capital account (a "CAPITAL ACCOUNT") for each
Partner.
6.2 ADJUSTMENTS TO CAPITAL ACCOUNTS. As of the last day of each
Period, the balance in each Partner's Capital Account shall be adjusted by (A)
increasing such balance by (I) such Partner's allocable share of each item of
the Partnership's income and gain for such Period (allocated in accordance with
Section 6.9) and (II) the Capital Contributions, if any, made by such Partner
during such Period and (B) decreasing such balance by (I) the amount of cash or
the Value of Securities or other property distributed or deemed distributed to
such Partner pursuant to Section 6 or Section 8 and (II) such Partner's
allocable share of each item of the Partnership's deduction or loss for such
Period (allocated in accordance with Section 6.10). Each Partner's Capital
Account shall be further adjusted with respect to any special allocations or
adjustments pursuant to this Agreement.
6.3 DISTRIBUTIONS. Distributable Cash attributable to any
Portfolio Investment shall initially be apportioned among the Partners in
proportion to their Sharing Percentages for such Portfolio Investment.
Distributable Cash not attributable to a Portfolio Investment shall be
apportioned among the Partners (other than the Employer Limited Partners) in
proportion to their respective Capital Contributions giving rise to the
Distributable Cash (or, in the case of a Profits Limited Partner, the Capital
Contributions of the Employer Limited Partner associated with such Profits
Limited Partner). Except as otherwise provided herein, Distributable Cash
apportioned to the General Partner shall be distributed to the General Partner
and Distributable Cash apportioned to a Cash Limited Partner shall be
distributed to such Cash Limited Partner. Except as otherwise provided herein,
Distributable Cash apportioned to a Profits Limited Partner shall be distributed
as follows:
FIRST, 100% to the Employer Limited Partner associated with
such Profits Limited Partner until the cumulative amount distributed to
such Employer Limited Partner in respect of such Profits Limited Partner
pursuant to this paragraph First is equal to the sum of (I) the aggregate
Capital Contributions of such Employer Limited Partner associated with
such Profits Limited Partner used to fund the cost of such Portfolio
Investment and each other Portfolio Investment previously disposed of, or
used to fund Partnership Expenses and Organizational Expenses, and (II)
such additional amount as is necessary to provide such Employer Limited
Partner with a rate of return on such Capital Contributions equal to the
AFR Rate (such sum, the "AFR RETURN"); and
SECOND, to such Profits Limited Partner.
17
6.4 TAX DISTRIBUTIONS. Notwithstanding Section 6.3, the
Partnership may, either prior to, together with or subsequent to any
distribution of Distributable Cash pursuant to Section 6.3 with respect to a
Portfolio Investment, make distributions to all Partners (other than any
Defaulting Cash Limited Partners or Defaulting Profits Limited Partners),
regardless of their tax status, in amounts intended to enable such Partners (or
any Person whose tax liability is determined by reference to the income of any
such Partner) to discharge their United States federal, state and local (and, in
the discretion, of the General Partner, non-U.S.) income tax liabilities arising
from the allocations and distributions made (or to be made) pursuant to this
Agreement with respect to such Portfolio Investment. The amount distributable
pursuant to this Section 6.4 shall be determined by the General Partner in its
sole discretion, taking into account the maximum combined United States federal,
New York State and New York City tax rates applicable to individuals or
corporations (whichever is higher) on ordinary income and capital gain (taking
into account the applicable holding period), as the case may be, and the amounts
of ordinary income and capital gain allocated to the Partners pursuant to this
Agreement, and otherwise based on such reasonable assumptions as the General
Partner determines in good faith to be appropriate (and the assumptions
described in this sentence shall be applied equally to each Partner regardless
of its tax status). The amount distributable to any Partner pursuant to any
clause of Section 6.3 shall be reduced by the amount distributed to such Partner
pursuant to this Section 6.4, and the amount so distributed under this Section
6.4 shall be deemed to have been distributed to the extent of such reduction
pursuant to such clause of Section 6.3 for purposes of making the calculations
required by Section 6.3.
6.5 OTHER PROVISIONS. (a) AVAILABLE ASSETS. Notwithstanding
any other provision of this Agreement, distributions shall be made only to the
extent of Available Assets and in compliance with the Act.
(b) DISPOSITION OF PORTION OF PORTFOLIO INVESTMENT. If less than
all of the Portfolio Investments in a Portfolio Company are disposed of by the
Partnership, the portion disposed of and the portion retained shall for purposes
of Sections 6 and 10 (including for purposes of applying the definitions used
therein) be deemed to be two separate Portfolio Investments. Any Capital
Contributions, allocations or distributions made with respect to such Portfolio
Investment shall be allocated between the portion disposed of and the portion
retained PRO RATA in proportion to their respective purchase prices.
(c) DEFERRAL OF DISTRIBUTIONS IN CONNECTION WITH OUTSTANDING
ADVANCES. Notwithstanding paragraph Second of Section 6.3, if an Employer
Limited Partner shall have notified the Partnership that, pursuant to the MMC
Capital Plan, an Advance has been made to any Profits Limited Partner associated
with such Employer Limited Partner, then an amount equal to the amount of such
Advance shall be retained in the Partnership and not distributed to such Profits
Limited Partner until such Employer Limited Partner shall have notified the
Partnership that the Advance is no longer outstanding, at which time such amount
(together with
18
any earnings thereon) shall be distributed to such Profits Limited Partner. Any
amount so withheld shall be invested by the Partnership in Temporary Investments
for the account of the holder of such Profits Limited Partner.
6.6 DISTRIBUTIONS OF SECURITIES. Except in connection with the
dissolution and liquidation of the Partnership as provided in Section 13, the
General Partner shall not make any distributions in kind except to the extent
the general partner of the Institutional Fund is permitted to make distributions
in kind as provided in the Institutional Fund Agreement and as set forth herein.
In the event that a distribution of Securities is made, such Securities shall be
deemed to have been sold at their Value and the proceeds of such sale shall be
deemed to have been distributed to the Partners for all purposes of this
Agreement.
6.7 NEGATIVE CAPITAL ACCOUNTS. Except as provided by Section 6.12,
no Limited Partner shall, and except as otherwise required by law the General
Partner shall not, be required to make up a negative balance in its Capital
Account.
6.8 NO WITHDRAWAL OF CAPITAL. Except as otherwise expressly
provided herein, no Partner shall have the right to withdraw capital from the
Partnership or to receive any distribution of or return on such Partner's
Capital Contributions.
6.9 ALLOCATIONS. Each item of income, gain, loss and deduction of
the Partnership (determined in accordance with U.S. tax principles as applied to
the maintenance of capital accounts) shall be allocated among the Capital
Accounts of the Partners with respect to each Period as of the end of such
Period in a manner that as closely as possible gives economic effect to the
provisions of Sections 6 and 13 and the other relevant provisions of this
Agreement.
6.10 TAX MATTERS. Except as otherwise provided herein, the income,
gains, losses, credits and deductions recognized by the Partnership shall be
allocated among the Partners, for United States federal, state and local income
tax purposes, to the extent permitted under the Code and the Treasury
Regulations, in the same manner that each such item is allocated to the
Partners' Capital Accounts. Notwithstanding the foregoing, the General Partner
shall have the power in its sole discretion to make such allocations for United
States federal, state and local income tax purposes as may be necessary to
maintain substantial economic effect, or to insure that such allocations are in
accordance with the interests of the Partners in the Partnership, in each case
within the meaning of the Code and the Treasury Regulations. Tax credits shall
be allocated in good faith by the General Partner. All matters concerning
allocations for United States federal, state and local and non-U.S. income tax
purposes, including, without limitation, accounting procedures, not expressly
provided for by the terms of this Agreement shall be determined in good faith by
the General Partner. The General Partner may, in its sole discretion, cause the
Partnership to make the election under section 754 of the
19
Code. The General Partner is hereby designated as the "tax matters partner" of
the Partnership, as provided in the Treasury Regulations pursuant to section
6231 of the Code (and any similar provisions under any other state or local or
non-U.S. tax laws). Each Partner hereby consents to such designation and agrees
that upon the request of the General Partner it will execute, certify,
acknowledge, deliver, swear to, file and record at the appropriate public
offices such documents as may be necessary or appropriate to evidence such
consent. No Partner shall permit the Partnership to elect, and the partnership
shall not elect, to be treated as an association taxable as a corporation for
United States federal, state or local income tax purposes under Treasury
Regulations section 301.7701-3(a) or under any corresponding provision of state
or local law. The Partnership shall not participate in the establishment of an
"established securities market" (within the meaning of section 1.7704-1(b) of
the Treasury Regulations) or a "secondary market or the substantial equivalent
thereof" (within the meaning of section 1.7704-1(c) of the Treasury Regulations)
or, in either case, the inclusion of interests in the Partnership thereon.
6.11 WITHHOLDING TAXES. (a) AUTHORITY TO WITHHOLD; TREATMENT OF
WITHHELD TAX. Notwithstanding any other provision of this Agreement, each
Partner hereby authorizes the Partnership to withhold and to pay over, or
otherwise pay, any withholding or other taxes payable by the Partnership or any
of its Affiliates (pursuant to the Code or any provision of United States
federal, state, or local or non-U.S. tax law) with respect to such Partner or as
a result of such Partner's participation in the Partnership (including as a
result of a distribution in kind). If and to the extent that the Partnership
shall be required to withhold or pay any such withholding or other taxes, such
Partner shall be deemed for all purposes of this Agreement to have received a
payment from the Partnership as of the time such withholding or other tax is
required to be paid, which payment shall be deemed to be a distribution of
Distributable Cash pursuant to the relevant clause of Section 6.3 with respect
to such Partner's interest in the Partnership to the extent that such Partner
(or any successor to such Partner's interest in the Partnership) would have
received a cash distribution but for such withholding. To the extent that such
deemed payment exceeds the cash distribution that such Partner would have
received at such time but for such withholding, the General Partner shall notify
such Partner as to the amount of such excess and such Partner shall make a
prompt payment to the Partnership of such amount by wire transfer. The
Partnership may hold back from any distribution in kind property having a Value
equal to the amount of taxes withheld or otherwise paid until the Partnership
has received such payment.
(b) WITHHOLDING TAX RATE. Any withholdings referred to in this
Section 6.11 shall be made at the maximum applicable statutory rate under the
applicable tax law unless the General Partner shall have received an opinion of
counsel or other evidence, satisfactory to the General Partner, to the effect
that a lower rate is applicable, or that no withholding is applicable.
20
(c) WITHHOLDING FROM DISTRIBUTIONS TO THE PARTNERSHIP. In the event
that the Partnership receives a distribution from or in respect of which tax has
been withheld, the Partnership shall be deemed to have received cash in an
amount equal to the amount of such withheld tax, and each Partner shall be
deemed to have received as a distribution of Distributable Cash pursuant to the
relevant clause of Section 6.3 the portion of such amount that is attributable
to such Partner's interest in the Partnership as equitably determined by the
General Partner.
(d) INDEMNIFICATION. Each Partner shall, to the fullest extent
permitted by applicable law, indemnify and hold harmless the Partnership and the
General Partner against all claims, liabilities and expenses of whatever nature
relating to the Partnership's or the General Partner's obligation to withhold
and to pay over, or otherwise pay, any withholding or other taxes payable by the
Partnership or the General Partner as a result of such Partner's participation
in the Partnership. In addition, the Partnership shall, hereby or pursuant to a
separate indemnification agreement and to the fullest extent permitted by
applicable law, indemnify and hold harmless each Portfolio Company and any other
Covered Person who is or who is deemed to be the responsible withholding agent
for United States federal, state or local or non-U.S. income tax purposes (other
than any Covered Person that is indemnified by each Partner pursuant to the
previous sentence) against all claims, liabilities and expenses of whatever
nature relating to such Portfolio Company's or Covered Person's obligation to
withhold and to pay over, or otherwise pay, any withholding or other taxes
payable by such Portfolio Company or Covered Person, as the case may be, as a
result of the participation in the Partnership of a Partner (other than such
Covered Person). If, pursuant to a separate indemnification agreement or
otherwise, the Partnership shall indemnify or be required to indemnify any
Portfolio Company or Covered Person against any claims, liabilities or expenses
of whatever nature relating to such Portfolio Company's or Covered Person's
obligation to withhold and to pay over, or otherwise pay, any withholding or
other taxes payable by such Portfolio Company or Covered Person as a result of
any Partner's participation in the Partnership, such Partner shall pay to the
Partnership the amount of the indemnity paid or required to be paid.
6.12 CLAWBACK BY PROFITS LIMITED PARTNERS. If, as of the date of
the dissolution of the Partnership, prior to the application of this Section
6.12, the aggregate amount distributed pursuant to Section 6 or Section 13 to an
Employer Limited Partner with respect to any Profits Limited Partner associated
with such Employer Limited Partner is not sufficient to provide the AFR Return
attributable to such Profits Limited Partner, such Profits Limited Partner shall
contribute to the Partnership an amount that equals the amount of such shortfall
and the Partnership shall, subject to Section 6.11 and applicable law,
distribute such amount to such Employer Limited Partner.
6.13 FINAL DISTRIBUTION. The final distributions following
dissolution shall be made in accordance with the provisions of Section 13.2.
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SECTION 7
THE MANAGER
7.1 APPOINTMENT OF MANAGER. The Partnership will appoint the
Manager to act as the investment advisor to and the manager of the Partnership
pursuant to a separate agreement, which shall provide to the following effect:
(a) The Manager shall manage the operations of the Partnership,
shall have the right to execute and deliver documents of the Partnership
in lieu of the General Partner and shall have discretionary authority
with respect to investments of the Partnership, including, without
limitation, the authority to evaluate, monitor, exercise voting rights,
liquidate and take other appropriate action with respect to investments
on behalf of the Partnership, PROVIDED that the management and the
conduct of the activities of the Partnership shall remain the sole
responsibility of the General Partner and all decisions relating to the
selection and disposition of the Partnership's investments shall be made
exclusively by the General Partner in accordance with this Agreement and
subject to the Investment Guidelines. The Manager shall perform its
duties hereunder or under the separate agreement in accordance with the
Investment Guidelines. Appointment of the Manager by the Partnership
shall not relieve the General Partner from its obligations to the
Partnership hereunder or under the Act.
(b) The Manager shall act in conformity with this Agreement and
with the instructions and directions of the General Partner. The Manager
shall serve without fee.
The engagement by the Partnership of the Manager contemplated hereby may be set
forth in a separate management agreement specifying in further detail the rights
and duties of the Manager. Such engagement, whether or not set forth in such a
management agreement, shall terminate upon the filing of a certificate of
cancellation of the Partnership as described in Section 13.4(b).
SECTION 8
BANKING; ACCOUNTING; BOOKS AND RECORDS;
ADMINISTRATIVE SERVICES
8.1 BANKING. All funds of the Partnership may be deposited in such
bank, brokerage or money market accounts as shall be established by the General
Partner. With-
22
drawals from and checks drawn on any such account shall be made upon such
signature or signatures as the General Partner may designate.
8.2 MAINTENANCE OF BOOKS AND RECORDS; ACCESS. (a) MAINTENANCE. The
General Partner shall keep or cause to be kept complete records and books of
account. Such books and records shall be maintained in accordance with the
provisions of the Institutional Fund Agreement applicable to the records and
books of account of the Institutional Fund as if such provisions were applicable
to the Partnership. The books and records required by law to be maintained at
the registered office of the Partnership shall be so maintained pursuant to the
provisions of the Act.
(b) ACCESS. Such books and records shall be available, upon five
Business Days' notice to the General Partner, for inspection and copying at
reasonable times during normal business hours by a Limited Partner or its duly
authorized agents or representatives for any purpose reasonably related to such
Limited Partner's interest as a limited partner in the Partnership.
8.3 PARTNERSHIP TAX RETURNS. The General Partner shall cause the
Partnership initially to elect the Fiscal Year as its taxable year and shall
cause to be prepared and timely filed all tax returns required to be filed for
the Partnership in the jurisdictions in which the Partnership conducts business
or derives income for all applicable tax years.
8.4 VALUATION. For all purposes of this Agreement, "VALUE" shall
mean, with respect to any assets or Securities, including but not limited to any
Portfolio Investment, owned (directly or indirectly) by the Partnership at any
time, the fair market value of such asset or Security, as determined by the
General Partner in its sole discretion, and, if a Portfolio Investment was made
prior to the Partnership's last fiscal quarter end, fair market value with
respect to such Portfolio Investment generally shall be the valuation set forth
for such Portfolio Investment in the Partnership's financial statements (as of
such immediately preceding fiscal quarter end). The valuation may, in the
discretion of the General Partner, be made by independent third parties
appointed by the General Partner and deemed qualified by the General Partner to
render an opinion as to the value of the Partnership assets as of any date,
using such methods and considering such information relating to the investments,
assets and liabilities of the Partnership as such Persons may deem appropriate.
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SECTION 9
REPORTS TO PARTNERS
9.1 INDEPENDENT AUDITORS. The books of account and records of the
Partnership shall be audited as of the end of each Fiscal Year by such
recognized accounting firm as shall be selected by the General Partner. The
Partnership's independent public accountants shall be a recognized independent
public accounting firm selected from time to time by the General Partner in its
sole discretion.
9.2 REPORTS TO CURRENT PARTNERS. As soon as practicable after the
end of each Fiscal Year, the General Partner shall prepare and mail or cause to
be prepared and mailed to each Limited Partner audited financial statements of
the Partnership. If a Limited Partner so requests in writing, the Partnership
shall provide to each Limited Partner on a timely basis, all reports sent (after
the date of such request) to the limited partners of the Institutional Fund
pursuant to the limited partnership agreement of the Institutional Fund.
9.3 UNITED STATES FEDERAL INCOME TAX INFORMATION. The General
Partner shall use its commercially reasonable best efforts to send, no later
than 90 days after the end of each Fiscal Year, to each Limited Partner (or its
legal representatives) and to each other Person that was a Limited Partner at
any time during such Fiscal Year (or its legal representatives), a Schedule K-1,
"Partner's Share of Income, Credits, Deductions, Etc.," to United States
Internal Revenue Service Form 1065, "U.S. Partnership Return of Income," or any
successor schedule or form, filed by the Partnership, for such Person.
9.4 ADDITIONAL INFORMATION. The General Partner shall promptly
provide to any Tier 1 Limited Partner who so requests in writing such additional
information concerning the Partnership as such Tier 1 Limited Partner may
reasonably find relevant to the interests in the Partnership held by such Tier 1
Limited Partner.
SECTION 10
INDEMNIFICATION OF COVERED PERSONS
10.1 INDEMNIFICATION OF COVERED PERSONS, ETC. (a) INDEMNIFICATION
GENERALLY. The Partnership and each Partner shall, and hereby does, to the
fullest extent permitted by applicable law, indemnify, hold harmless and release
each Covered Person from and against all claims, demands, liabilities, costs,
expenses, damages, losses, suits, proceedings and actions, whether judicial,
administrative, investigative or otherwise, of whatever nature, known or
unknown, liquidated or unliquidated ("CLAIMS"), that may accrue to or be
incurred by any
24
Covered Person, or in which any Covered Person may become involved, as a party
or otherwise, or with which any Covered Person may be threatened, relating to or
arising out of the business and affairs of, or activities undertaken in
connection with, the Partnership (including, but not limited to, Claims arising
out of the disposition of any Portfolio Company), or otherwise relating to or
arising out of this Agreement, including, but not limited to, amounts paid in
satisfaction of judgments, in compromise or as fines or penalties, and counsel
fees and expenses incurred in connection with the preparation for or defense or
disposition of any investigation, action, suit, arbitration or other proceeding
(a "PROCEEDING"), whether civil or criminal (all of such Claims and amounts
covered by this Section 10.1, and all expenses referred to in Section 10.2,
referred to as "DAMAGES"), except to the extent that it shall have been
determined ultimately by a court of competent jurisdiction that such Damages
arose primarily from the Disabling Conduct of such Covered Person. The
termination of any Proceeding by settlement shall not, of itself, create a
presumption that such Covered Person has engaged in Disabling Conduct or any
Damages relating to such settlement arose primarily from the Disabling Conduct
of any Covered Person. The provisions of this Section 10 shall survive the
termination, dissolution and winding-up of the Partnership.
(b) CONTRIBUTION. Notwithstanding any other provision of this
Agreement, at any time and from time to time and prior to the third anniversary
of the last day of the Term, the General Partner may require the Partners to
contribute to the Partnership an amount sufficient to satisfy all or any portion
of the indemnification obligations of the Partnership pursuant to Section
10.1(a), whether such obligations arise before or after the last day of the
Term, or with respect to any Person who is a Partner, before or after such
Person ceases to be a Partner, PROVIDED that each Partner shall make such
contributions in respect of its share of any such indemnification obligations
made or required to be made as follows:
(i) if the Claims or Damages so indemnified against arise out of a
Portfolio Investment by each Partner to which Distributable Cash was
distributed in connection with such Portfolio Investment, in such amounts
as shall result in each Partner retaining from such Distributable Cash
the amount that would have been distributed to such Partner had the
amount of Distributable Cash been, at the time of such distribution,
reduced by the amount of such indemnification obligations, as equitably
determined by the General Partner, and
(ii) in any other circumstances, by the Partners (other than the
Employer Limited Partners) in proportion to their Capital Commitments
and/or Associated Commitments, as the case may be.
Any distributions returned pursuant to this Section 10.1(b) shall not be treated
as Capital Contributions, but shall be treated as returns of distributions and
reductions in Distributable Cash, in making subsequent distributions pursuant to
Sections 6.3 and 13.2. Notwithstanding
25
anything in this Section 10 to the contrary, a Partner's liability under the
first sentence of this Section 10.1(b) is limited to an amount equal to the sum
of all distributions received by such Partner from the Partnership. Nothing in
this Section 10.1(b), express or implied, is intended or shall be construed to
give any Person other than the Partnership or the Partners any legal or
equitable right, remedy or claim under or in respect of this Section 10.1(b) or
any provision contained herein.
(c) NO DIRECT LIMITED PARTNER INDEMNITY. Limited Partners shall
not be required directly to indemnify any Covered Person under this
Section 10.1.
10.2 EXPENSES, ETC. To the fullest extent permitted by applicable
law, expenses incurred by a Covered Person in defense or settlement of any Claim
that may be subject to a right of indemnification hereunder shall be advanced by
the Partnership prior to the final disposition thereof upon receipt of an
undertaking by or on behalf of the Covered Person to repay such amount if it
shall be determined ultimately by a court of competent jurisdiction that the
Covered Person is not entitled to be indemnified hereunder. The right of any
Covered Person to the indemnification provided herein shall be cumulative with,
and in addition to, any and all rights to which such Covered Person may
otherwise be entitled by contract or as a matter of law or equity and shall
extend to such Covered Person's successors, assigns and legal representatives.
All judgments against the Partnership, and all judgments against the Partnership
and either or both of the General Partner and/or the Manager in respect of which
the General Partner and/or the Manager are/is entitled to indemnification, shall
first be satisfied from Partnership assets (including, without limitation,
Capital Contributions and any payments under Section 10.1(b)), before the
General Partner or the Manager, as the case may be, is responsible therefor.
10.3 NOTICES OF CLAIMS, ETC. Promptly after receipt by a Covered
Person of notice of the commencement of any Proceeding, such Covered Person
shall, if a claim for indemnification in respect thereof is to be made against
the Partnership, give written notice to the Partnership of the commencement of
such Proceeding, PROVIDED that the failure of any Covered Person to give notice
as provided herein shall not relieve the Partnership of its obligations under
this Section 10, except to the extent that the Partnership is actually
prejudiced by such failure to give notice. In case any such Proceeding is
brought against a Covered Person (other than a derivative suit in right of the
Partnership), the Partnership shall be entitled to participate in and to assume
the defense thereof to the extent that the Partnership may wish, with counsel
reasonably satisfactory to such Covered Person. After notice from the
Partnership to such Covered Person of the Partnership's election to assume the
defense of such Proceeding, the Partnership shall not be liable for expenses
subsequently incurred by such Covered Person in connection with the defense
thereof. The Partnership shall not consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term
26
thereof the giving by the claimant or plaintiff to such Covered Person of a
release from all liability in respect to such Claim.
10.4 NO WAIVER. Nothing contained in this Section 10 shall
constitute a waiver by any Partner of any right that it may have against any
party under United States federal or state securities, or non-U.S., laws.
10.5 RETURN OF DISTRIBUTIONS. At any time for a period of three
years after the last day of the Term, each Person who was a Partner (other than
an Employer Limited Partner) shall severally indemnify and hold harmless each
Covered Person for such Partner's ratable share of Damages (based on the
aggregate distributions received directly or indirectly by all Partners), on the
same terms and, to the same extent and with the same limitations as if such
indemnity were given by the Partnership pursuant to Section 10.1(a) but without
regard to Section 10.1(b), Section 10.2, or Section 10.3. The aggregate amount
of a Partner's obligations under this Section 10.5 shall not exceed the amount
of distributions from the Partnership theretofore received by such Partner.
10.6 INDEMNIFICATION OF COVERED PERSONS. The General Partner is
hereby instructed to cause the Partnership to indemnify, hold harmless and
release each Covered Person, and authorized to cause the Partnership to
indemnify, hold harmless and release any other Person, in each case pursuant to
a separate indemnification agreement and on such terms as it may in its absolute
discretion deem appropriate. It is the express intention of the parties hereto
that (A) the provisions of this Section 10 for the indemnification of Covered
Persons may be relied upon by such Covered Persons and may be enforced by such
Covered Persons (or by the General Partner on behalf of any such Covered Person,
PROVIDED that the General Partner shall not have any obligation to so act for or
on behalf of any such Covered Person) against the Partnership and the Partners
pursuant to this Agreement or to a separate indemnification agreement, as if
such Covered Persons were parties hereto, and (B) notwithstanding the provisions
of Section 16.7, the term "gross negligence" shall have the meaning given such
term under the laws of the State of Delaware.
SECTION 11
TRANSFER OF LIMITED PARTNERSHIP INTERESTS;
WITHDRAWAL OF LIMITED PARTNERS
11.1 ADMISSION, SUBSTITUTION AND WITHDRAWAL OF LIMITED PARTNERS;
ASSIGNMENT. (a) GENERAL. Except as set forth in Section 5 or in this Section 11,
no Additional Limited Partners may be admitted to, and no Limited Partner may
withdraw from, the Partnership prior to the dissolution and winding-up of the
Partnership. Except as set forth in this Section 11 no
27
Limited Partner shall sell, transfer, assign, convey, pledge, mortgage,
encumber, hypothecate or otherwise dispose of ("TRANSFER") all or any part of
its interest in the Partnership, PROVIDED that any Limited Partner may, with the
prior written consent of the General Partner (which consent may be withheld in
the sole and absolute discretion of the General Partner) and upon compliance
with Sections 11.1(b) and (c), Transfer all or a portion of such Limited
Partner's interest in the Partnership.
(b CONDITIONS TO TRANSFER. Any purported Transfer by a Limited
Partner pursuant to the terms of this Section 11 shall, in addition to requiring
the prior written consent referred to in Section 11.1(a), be subject to the
satisfaction of the following conditions:
(i) the Limited Partner that proposes to effect such a Transfer (a
"TRANSFEROR") or the Person to whom such Transfer is made (a
"TRANSFEREE") shall pay all expenses incurred by the Partnership or the
General Partner on behalf of the Partnership in connection therewith;
(ii) the Partnership shall receive from the Transferee (and in the
case of clause (C) below, from the Transferor to the extent specified by
the General Partner) (A) such documents, instruments and certificates as
may be requested by the General Partner, pursuant to which such
Transferee shall become bound by this Agreement, including, without
limitation, a counterpart of this Agreement executed by or on behalf of
such Transferee, (B) a certificate to the effect that the representations
set forth in the Subscription Agreement of such Transferee are (except as
otherwise disclosed to the General Partner) true and correct with respect
to such Transferee as of the date of such Transfer and (C) such other
documents, opinions, instruments and certificates as the General Partner
shall request;
(iii) such Transferor or Transferee shall, prior to making any such
Transfer, deliver to the Partnership the opinion of counsel described in
Section 11.1(c);
(iv) the General Partner may, in its sole discretion, require any
Limited Partner wishing to make a Transfer under this Section 11 or such
Transferee to pay to the Partnership such amount in immediately available
funds as is sufficient to cover all expenses incurred by or on behalf of
the Partnership in connection with such substitution or Transfer, and in
connection therewith, to execute and deliver such documents, instruments,
certificates and opinions of counsel as the General Partner shall
request;
(v) the General Partner shall be given at least 30 days' prior
written notice of such desired Transfer;
28
(vi) the Transferor and the Transferee shall each provide a
certificate to the effect that (A) the proposed Transfer will not be
effected on or through (1) a U.S. national, regional or local securities
exchange, (2) a non-U.S. securities exchange or (3) an interdealer
quotation system that regularly disseminates firm buy or sell quotations
by identified brokers or dealers (including, without limitation, NASDAQ
or a foreign equivalent thereto) and (B) it is not, and its proposed
Transfer or acquisition (as the case may be) will not be made by, through
or on behalf of, (1) a Person, such as a broker or a dealer, making a
market in interests in the Partnership or (2) a Person who makes
available to the public bid or offer quotes with respect to interests in
the Partnership;
(vii) such Transfer will not be effected on or through an
"established securities market" or a "secondary market or the substantial
equivalent thereof," as such terms are used in section 1.7704-1 of the
Treasury Regulations; and
(viii) such Transfer would not result in the Partnership at any
time during its taxable year having more than 100 partners within the
meaning of section 1.7704-1(h)(1)(ii) of the Treasury Regulations (taking
into account section 1.7704-1(h)(3) of the Treasury Regulations).
The General Partner may waive any or all of the conditions set forth in this
Section 11.1(b) (other than clause (vii) hereof) if in its sole discretion, it
deems it in the best interest, or not opposed to the interest, of the
Partnership to do so.
(c) OPINION OF COUNSEL. The opinion of counsel referred to in
Section 11.1(b)(iii) shall be in form and substance satisfactory to the General
Partner, shall be from counsel satisfactory to the General Partner and shall be
substantially to the effect that (unless specified otherwise by the General
Partner) the consummation of the Transfer contemplated by the opinion:
(i) will not require registration under, or violate any
provisions of, the Securities Act or any applicable state or non-U.S.
securities laws;
(ii) will not require the General Partner or the Partnership to
register as an investment company under the Investment Company Act; and,
as required by the General Partner, that the Transferee is a Person that
counts as one beneficial owner for purposes of section 3(c)(1) of the
Investment Company Act;
(iii) will not require the Manager, the General Partner or any
Affiliate of the Manager or the General Partner that is not registered
under the Investment Advisers Act or the Partnership to register as an
investment adviser under the Investment Advisers Act;
29
(iv) will not cause the Partnership to be taxable as corporation
under the Code; and
(v) will not violate the laws, rules or regulation of any state or
the rules and regulations of any Governmental Authority applicable to
such Transfer.
In giving such opinion, counsel may, with the consent of the General Partner,
rely as to factual matters on certificates of the Transferor, the Transferee and
the General Partner.
(d) DEATH, INCAPACITY ETC. Subject to Sections 11.1(a), 11.1(b) and
11.1(c), the estate of a Limited Partner who is a natural person shall have the
right to Transfer, upon the death, incompetency, bankruptcy, withdrawal or
incapacity of such Limited Partner, his or her interest in the Partnership.
(e) SUBSTITUTE LIMITED PARTNERS. Notwithstanding any other
provision of this Agreement, any Transferee of a Transferor's interest in the
Partnership pursuant to the terms of this Section 11 may be admitted to the
Partnership as a substitute limited partner of the Partnership (a "SUBSTITUTE
LIMITED PARTNER") only with the consent of the General Partner, which consent
may be withheld in the sole and absolute discretion of the General Partner. Upon
the admission of such Transferee as a Substitute Limited Partner, all references
herein to such Transferor shall be deemed to apply to such Substitute Limited
Partner, and such Substitute Limited Partner shall succeed to all rights and
obligations of the Transferor hereunder. A Person shall be deemed admitted to
the Partnership as a Substitute Limited Partner at the time that the foregoing
conditions are satisfied and such Person is listed as a limited partner of the
Partnership in the Partnership Register. Any Transferee of an economic interest
in the Partnership shall become a Substitute Limited Partner only upon
satisfaction of the requirements set forth in this Section 11.1.
(f) TRANSFER IN VIOLATION OF AGREEMENT NOT RECOGNIZED. No
attempted Transfer or substitution shall be recognized by the Partnership and
any purported Transfer or substitution shall be void unless effected in
accordance with and as permitted by this Agreement.
11.2 ADDITIONAL LIMITED PARTNERS. (a) CONDITIONS TO ADMISSION. In
addition to the admission of Limited Partners at the Initial Closing, the
General Partner, in its sole discretion, may schedule, from time to time, one or
more additional Closings for one or more Person or Persons seeking admission to
the Partnership as an additional limited partner of the Partnership (each such
Person, an "ADDITIONAL LIMITED PARTNER", which term shall include any Person
that is a Partner immediately prior to such additional Closing and that wishes
to increase the amount of such Person's Capital Commitment or, in the case of a
Profits Limited Partner, its Associated Commitment), subject to the
determination by the General Partner in the exercise of its good faith judgment
that in the case of each such admission or increase the following conditions
have been satisfied:
30
(i) Each such Additional Limited Partner shall have executed and
delivered such instruments and shall have taken such actions as the
General Partner shall deem necessary, convenient or desirable to effect
such admission or increase, including, without limitation, the execution
of (A) a Subscription Agreement pursuant to which such Additional Limited
Partner agrees to be bound by the terms and provisions hereof or (if such
Additional Limited Partner is a Cash Limited Partner or an Employer
Limited Partner) to increase the amount of such Limited Partner's Capital
Commitment, as the case may be and (B) a Power of Attorney.
(ii) Such admission or such increase shall not result in a
violation of any applicable law, including, without limitation, United
States federal and state securities laws, or any term or condition of
this Agreement and, as a result of such admission or such increase, the
Partnership shall not be required to register as an Investment Company
under the Investment Company Act; none of the General Partner, the
Manager or any Affiliate of the General Partner or Manager would be
required to register as an investment adviser under the Investment
Advisers Act; and the Partnership shall not become taxable as a
corporation or association.
(iii) On the date of its admission to the Partnership or the date
of such increase, as the case may be, such Additional Limited Partner
shall have paid or unconditionally agreed to pay to the Partnership, an
amount equal to the sum of:
(A) in the case of each Portfolio Investment then held by the
Partnership, the percentage of such Additional Limited Partner's
Capital Commitment or (if the Additional Limited Partner is
increasing its Capital Commitment) the percentage of the amount of
the increase of such Additional Limited Partner's Capital
Commitment that is equal to a fraction, (1) the numerator of which
is the aggregate of the Capital Contributions of the previously
admitted Partners used to fund the cost of such Portfolio
Investment and (2) the denominator of which is the sum of the
aggregate of (X) the Capital Commitments of the previously admitted
Partners that made Capital Contributions used to fund the cost of
such Portfolio Investment and (Y) (without duplication) the Capital
Commitments of all Additional Limited Partners, and
(B) the percentage of such Additional Limited Partner's
Capital Commitment or (if such Additional Limited Partner is
increasing its Capital Commitment) the percentage of the amount of
the increase of such Additional Limited Partner's Capital
Commitment that is equal to a fraction, (1) the numerator of which
is the aggregate of the Capital Contributions of the previously
admitted Limited Partners in respect of all Drawdowns which have
theretofore been funded and not returned to the Partners, other
than Drawdowns made and used to fund the cost of a Portfolio
Investment and (2) the denominator of which is the sum of the
aggregate of (X) the
31
Capital Commitments of all previously admitted Partners and (y)
(without duplication) the Capital Commitments of all Additional
Limited Partners,
together with, in the case of clauses (A) and (B), an amount calculated as
interest thereon at a rate per annum equal to the Prime Rate plus 200 basis
points from the dates that contribution of such amounts by such Additional
Limited Partner would have been due if such Additional Limited Partner had been
admitted to the Partnership or had increased its Capital Commitment, as the case
may be, on the date of the Initial Closing, to the date that the payment
required to be made by such Additional Limited Partner pursuant to this Section
11.2(a)(iii) is made, which interest shall be treated as provided in Section
11.2(b), and less such amount as is necessary to take into account all
distributions theretofore made.
A Person shall be deemed admitted to the Partnership as an Additional Limited
Partner at the time that the foregoing conditions are satisfied and when such
Person is listed as a limited partner of the Partnership, and the Capital
Commitment made with respect to such Person is listed, in the Partnership
Register. Notwithstanding the foregoing, a Person admitted to the Partnership as
an Additional Limited Partner after March 31, 2001 shall not be permitted to
participate in Portfolio Investments made prior to January 1st of the year
following the year in which such Person was admitted to the Partnership.
(b) CERTAIN PAYMENTS AND TRANSFERS. Any amount paid by an
Additional Limited Partner pursuant to Section 11.2(a)(iii)(A) with respect to
the acquisition of Portfolio Investment (and any interest paid thereon) shall be
remitted promptly to the previously admitted Partners, PRO RATA in accordance
with their Capital Contributions used to fund the acquisition of such Portfolio
Investment (before giving effect to the adjustments referred to in the following
clause), and the Partners' Sharing Percentages for such Portfolio Investment
shall be appropriately adjusted. Any amount paid by an Additional Limited
Partner pursuant to Section 11.2(a)(iii)(B) (and any interest paid thereon)
shall be remitted promptly to the previously admitted Partners, PRO RATA in
accordance with their Capital Commitments. Such payments and remittances shall,
in accordance with section 707(a) of the Code, be treated for all purposes of
this Agreement and for all accounting and tax reporting purposes as payments
made directly from the Additional Limited Partner to the previously admitted
Partners and not as items of Partnership income, gain, loss, deduction,
contribution or distribution. Such Additional Limited Partner shall succeed to
the Capital Contributions of the previously admitted Partners attributable to
the portion of the amount remitted to such previously admitted Partners pursuant
to Section 11.2(a)(iii) (not including any amount calculated as interest
thereon), as appropriate, and the Capital Contributions of the previously
admitted Partners shall be decreased accordingly. In addition, the Remaining
Capital Commitments of the previously admitted Limited Partners shall be
increased by such amount remitted (not including any amount calculated as
interest thereon), and the amount of such increase in Remaining Capital
Commitments may be called again by the Partnership. The Remaining Capital
Commitment of
32
the Additional Limited Partner shall be appropriately determined by the General
Partner. The Partnership Register shall be amended by the General Partner as
appropriate to show the name and business address of each Additional Limited
Partner and the amount of its Capital Commitment. Neither the admission of an
Additional Limited Partner nor an increase in the amount of an Additional
Limited Partner's Capital Commitment shall be a cause for dissolution of the
Partnership.
(c) NO CONSENT. The transactions contemplated by this
Section 11.2 shall not require the consent of any of the Limited Partners.
(d) MULTI-FUND AND MULTI-VEHICLE ADJUSTMENTS. The payments to be
made by, and distributions to be made to, certain Partners pursuant to Section
11.2 (a) and (b), and the adjustments to be made pursuant to Section 11.2(c) of
the Institutional Fund Agreement, shall be adjusted by the General Partner if it
determines in its discretion that such adjustment is necessary or appropriate to
take into account (I) that investments held by the Partnership may, as of any
Closing Date, be held by one or more of the Co-Investment Funds, and (II)
closings of a Co-Investment Fund. Notwithstanding any other provision of this
Agreement, investments held by the Partnership, and/or the other Co-Investment
Funds, may be transferred among such entities (for a price equal to cost plus
interest thereon at a rate per annum of the Prime Rate plus 200 basis points) to
effectuate the purposes of this Section 11.2 and Section 11.2 of the
Institutional Fund Agreement. After the payments, distributions and adjustments
described in this Section 11.2(d) and in Section 11.2(c) of the Institutional
Fund Agreement are taken into account, each investment in a Portfolio Company
shall be held by the Partnership and any Co-Investment Fund in proportion to
their respective capital commitments, including, without limitation, all capital
committed to the Partnership or any such Co-Investment Fund, as the case may be,
after the date on which such investment was made but prior to March 31, 2001.
SECTION 12
DEATH, INCOMPETENCY OR BANKRUPTCY
OR DISSOLUTION OF PARTNERS
12.1 BANKRUPTCY, DISSOLUTION OF THE GENERAL PARTNER. In the event
of the bankruptcy or dissolution and commencement of winding up of the General
Partner or the occurrence of any other event that causes the General Partner to
cease to be a general partner of the Partnership under the Act, the Partnership
shall be dissolved and its affairs shall be wound up as provided in Section 13,
unless the business of the Partnership is continued pursuant to Section 13.1(a).
The General Partner shall take no action voluntarily to declare bankruptcy or
accomplish its dissolution prior to the dissolution of the Partnership.
Notwithstanding any other provision of this Agreement, the bankruptcy of the
General Partner
33
will not cause the General Partner to cease to be a general partner of the
Partnership, and upon the occurrence of such an event, the business of the
Partnership shall continue without dissolution.
12.2 DEATH, INCOMPETENCY, BANKRUPTCY, DISSOLUTION OR WITHDRAWAL OF
A LIMITED PARTNER. The death, incompetency, insanity, or other legal incapacity,
bankruptcy, dissolution, retirement, resignation, or withdrawal of a Limited
Partner or the occurrence of any other event that causes a Limited Partner to
cease to be a Partner of the Partnership shall not in and of itself dissolve or
terminate the Partnership; and the Partnership, notwithstanding such event,
shall continue without dissolution upon the terms and conditions provided in
this Agreement, and each Limited Partner, by executing this Agreement, agrees to
such continuation of the Partnership without dissolution.
SECTION 13
DURATION AND TERMINATION OF PARTNERSHIP
13.1 DURATION. (a) DISSOLUTION EVENTS. There shall be a
dissolution of the Partnership and its affairs shall be wound up upon the
first to occur of any of the following events:
(i) the day after the date that is one year after the
dissolution of the Institutional Fund; or
(ii) the last Business Day of the Fiscal Year in which all assets
acquired, or agreed to be acquired, by the Partnership have been sold or
otherwise disposed of; or
(iii) the withdrawal, bankruptcy or dissolution and commencement of
winding up of the General Partner, or the assignment by the General
Partner of its entire interest in the Partnership in contravention of
this Agreement, or the occurrence of any other event that causes the
General Partner to cease to be a general partner of the Partnership under
the Act, UNLESS, (A) within 90 calendar days after the occurrence of such
event, a substitute general partner is appointed by a Majority in
Interest effective as of the date of withdrawal, (B) at the time of the
occurrence of such event there is at least one remaining general partner
of the Partnership that is hereby authorized to and does (unanimously in
the case of more than one general partner) elect to continue the business
of the Partnership without dissolution or (C) the business of the
Partnership is otherwise continued without dissolution pursuant to the
provisions of the Act; PROVIDED, that for the purposes of this Section
13.1, the General Partner shall not be deemed to have been dissolved or
to have commenced a winding up as a result of the fact that any general
34
partner of the General Partner ceases to be a general partner of the
General Partner if and as long as the General Partner shall have at least
one remaining general partner who shall have the right and shall elect to
carry on the business of the General Partner; and PROVIDED, FURTHER, that
the conversion of the General Partner to a limited partnership, limited
liability company or other entity, or the Transfer of the General
Partner's interest as the general partner of the Partnership to, or the
merger of the General Partner with and into, a limited partnership,
limited liability company or other entity as provided for in Section 2.7
shall not, for the purposes of this Section 13.1, be deemed a dissolution
or winding up or commencement of winding up of the General Partner; or
(iv) a decision, made by the General Partner in its sole
discretion, to dissolve the Partnership because it has determined, due to
a change in the text, application or interpretation of any applicable
statute, regulation, case law, administrative ruling or other similar
authority (including, without limitation, changes that result in the
Partnership being taxable as a corporation under United States federal
income tax law), that the Partnership cannot carry out its investment
program as contemplated by this Agreement; or
(v) the entry of a decree of judicial dissolution.
(b) CONTINUATION OF THE PARTNERSHIP AFTER DISSOLUTION. As
contemplated by Sections 1.4 and 10.1, the Partnership shall continue after the
expiration of the Term for purposes of Section 10.1(b). After dissolution of the
Partnership, the Partnership shall engage in no activities other than those
contemplated by Sections 10.1 and 13, and those reasonably necessary, convenient
or incidental thereto.
13.2 DISTRIBUTION UPON DISSOLUTION. Upon the dissolution of the
Partnership, the General Partner (or, if dissolution of the Partnership should
occur by reason of Section 13.1(a)(iii), a liquidating trustee selected by the
General Partner, or if the General Partner has dissolved or withdraws from the
Partnership, or other representative duly designated by a Majority in Interest)
shall proceed, subject to the provisions of this Section 13, to liquidate the
Partnership and apply the proceeds of such liquidation, or in its sole
discretion to distribute Partnership assets, in the following order of priority:
FIRST, to creditors in satisfaction of debts and liabilities of the
Partnership, whether by payment or the making of reasonable provision for
payment (other than any loans or advances that may have been made by any
of the Partners to the Partnership), and the expenses of liquidation
whether by payment or the making of reasonable provision for payment, any
such reasonable reserves (which may be funded by a liquidating trust) to
be established by the General Partner (or any liquidating trustee
selected by the General Partner, or if the General Partner has dissolved
or withdraws from the Partnership, or other representative duly
designated by a Majority in Interest) in amounts deemed by it to
35
be reasonably necessary for the payment of the Partnership's expenses,
liabilities and other obligations (whether fixed or contingent,
conditional or unmatured);
SECOND, to the Partners in satisfaction of any loans or advances
that may have been made by any of the Partners to the Partnership,
whether by payment or the making of reasonable provision for payment; and
THIRD, to the Partners in accordance with Section 6.3.
13.3 DISTRIBUTIONS IN CASH OR IN KIND. Upon the dissolution of the
Partnership, the General Partner (or liquidating trustee selected by the General
Partner or, if the General Partner has dissolved or withdraws from the
Partnership, a representative duly designated by a Majority in Interest) its
successor or other representative shall use its commercially reasonable efforts
to liquidate all of the Partnership assets in an orderly manner and apply the
proceeds of such liquidation as set forth in Section 13.2, PROVIDED THAT if in
the good faith business judgment of the General Partner (or such liquidating
trustee or other representative), a Partnership asset should not be liquidated,
the General Partner (or such other representative) shall allocate, on the basis
of the Value of any Partnership assets not sold or otherwise disposed of, any
unrealized gain or loss based on such Value to the Partner's Capital Accounts as
though the assets in question had been sold on the date of distribution and,
after giving effect to any such adjustment, distribute said assets in accordance
with Section 13.2, subject to the priorities set forth in Section 13.2, PROVIDED
FURTHER that the General Partner (or such other representative) will in good
faith attempt to liquidate sufficient Partnership assets to satisfy in cash (or
make reasonable provision for) the debts and liabilities referred to in
paragraphs First and Second of Section 13.2. The General Partner may cause
certificates evidencing any Securities to be distributed to be imprinted with
legends as to such restrictions on transfers that it may deem necessary or
appropriate, including, without limitation, legends as to applicable federal or
state or non-U.S. securities laws or other legal or contractual restrictions,
and may require any Partner to which Securities are to be distributed to agree
in writing (A) that such Securities will not be transferred except in compliance
with such restrictions and (B) to such other matters as the General Partner may
deem necessary, appropriate convenient or incidental to the foregoing.
13.4 TIME FOR LIQUIDATION, ETC. (a) At the end of the term of the
Partnership as provided for in the provisos to Section 1.4, the Partnership
shall be liquidated and any remaining assets shall be distributed in accordance
with Section 13.2. A reasonable time period shall be allowed for the orderly
winding-up and liquidation of the assets of the Partnership and the discharge of
liabilities to creditors so as to enable the General Partner to seek to minimize
potential losses upon such liquidation. Subject to Section 13.1, the provisions
of this Agreement shall remain in full force and effect during the period of
winding-up and until the filing of a certificate of cancellation of the
Partnership with the Secretary of State, as provided in 13.4(b).
36
(b) FILING OF CERTIFICATE OF CANCELLATION. Upon completion of the
foregoing, the General Partner (or any liquidating trustee selected by the
General Partner, or if the General Partner has dissolved or withdraws from the
Partnership, a representative duly designated by a Majority in Interest) shall
execute, acknowledge and cause to be filed a certificate of cancellation of the
Partnership with the Secretary of State, PROVIDED that the winding up of the
Partnership will not be deemed complete and such certificate of cancellation
will not be filed by the General Partner (or such liquidating trustee or other
representative) prior to the third anniversary of the last day of the Term
unless otherwise required by applicable law.
13.5 GENERAL PARTNER AND MANAGER NOT PERSONALLY LIABLE FOR RETURN
OF CAPITAL CONTRIBUTIONS. None of the General Partner or the Manager, or any of
its or their respective Affiliates, shall be personally liable for the return of
all or any portion of the Capital Accounts or the Capital Contributions of any
Partner, and such return shall be made solely from available Partnership assets,
if any, and each Limited Partner hereby waives any and all claims it may have
against the General Partner or the Manager, or any of its or their respective
Affiliates thereof in this regard.
13.6 REORGANIZATION OF THE PARTNERSHIP. To the extent
permitted by law, in order to effect a reorganization of the Partnership,
(a) the General Partner may cause the conversion of the Partnership
to a limited partnership, limited liability company or other entity
formed under the laws of the State of Delaware or any other jurisdiction
or
(b) the General Partner may cause the exchange of the interests of
the Partners in the Partnership for interests in, or cause the
Partnership to be merged with and into, a limited partnership, limited
liability company or other entity formed under the laws of the State of
Delaware or any other jurisdiction,
but only if in any such case the Partners (including, without limitation, their
successors) shall become, and no other Persons (other than Persons necessary for
the qualification of such limited partnership, limited liability company or
other entity under such laws) shall be, the partners of such limited
partnership, the members of such limited liability company or the equity holders
of such other entity, as the case may be, PROVIDED that no such conversion,
exchange or merger shall be permitted unless:
(i) the General Partner shall first have delivered to the
Partnership:
(A) a written opinion from counsel of recognized standing
experienced in United States federal income tax matters, to the
effect that such limited partnership,
37
limited liability company or other entity will be classified as a
partnership, and will not be treated as a corporation, for United
States federal income tax purposes, and
(B) a written opinion (the conclusions of which may be based
in part on the opinion specified in the immediately preceding
clause (A)) of each of
(1) experienced counsel admitted to practice in each
jurisdiction in which such limited partnership, limited
liability company or other entity is formed or has an office
and
(2) experienced counsel admitted to practice in each
jurisdiction (X) in which such limited partnership, limited
liability company or other entity shall have an office, be
doing business or otherwise be subject to the income tax laws
of such jurisdiction immediately after such conversion,
exchange or merger and (Y) under the income tax laws of which
the Partnership was not taxed directly on its income before
such conversion, exchange or merger,
to the effect that such conversion, exchange or merger would not
cause such limited partnership, limited liability company or other
entity to be taxed directly on its income under the income tax laws
of such jurisdiction,
(ii) the General Partner shall have first delivered to the
Partnership a written opinion of experienced counsel admitted to practice
in the jurisdiction under the laws of which such limited partnership,
limited liability company or other entity is formed, to the effect that
such conversion, exchange or merger would not adversely affect the
limited liability of the Limited Partners,
(iii) such conversion, exchange or merger would not result
in the violation of any applicable securities laws,
(iv) such conversion, exchange or merger would not result in such
limited partnership, limited liability company or other entity being
required to register as an Investment Company under the Investment
Company Act or any law of similar import of the jurisdiction under the
laws of which such limited partnership, limited liability company or
other entity is formed, and would not result in the General Partner or
any Affiliate of the General Partner being required to register as an
investment adviser under the Investment Advisers Act or any law of
similar import of such jurisdiction, and
(v) the General Partner shall have made a good faith determination
that such conversion, exchange or merger would not adversely affect the
rights or increase the liabilities of the Limited Partners.
38
Upon any such conversion, exchange or merger, such limited partnership, limited
liability company or other entity shall be treated as the successor to the
Partnership for all purposes of this Agreement and of the corresponding
agreement pursuant to which the rights and obligations of the partners of such
limited partnership, the members of such limited liability company or the equity
holders of such other entity, as the case may be, are determined. All
Subscription Agreements applicable to the Partnership that are in effect at the
time of any such conversion, exchange or merger shall thereafter continue in
full force and effect, and shall apply to the limited partnership, limited
liability company or other entity that becomes the successor to the Partnership
pursuant to such conversion, exchange or merger. In conjunction with any such
conversion, exchange or merger, the General Partner may execute, on behalf of
the Partnership and each of the Limited Partners, all documents that in its
reasonable judgment are necessary or appropriate to consummate such conversion,
exchange or merger, including, but not limited to, the agreement pursuant to
which the rights and obligations of the partners of such limited partnership,
the members of such limited liability company or the equity holders of such
other entity, as the case may be, are determined (in the case of such a
conversion to, exchange for interests in or merger into a limited partnership,
including the limited partnership agreement thereof), all without any further
consent or approval of any other Partner, PROVIDED, that no such agreement may
directly or indirectly effect a modification or amendment of the rights and
obligations of the Partners which, if such modification or amendment were made
to this Agreement, would require the consent of the Partners, any group thereof,
or any individual Partner as provided in Section 15.1, unless the consent to
such modification or amendment required under Section 15.1 is obtained. A
reorganization of the Partnership pursuant to this Section 13.6 shall not be
deemed to be or result in a dissolution, winding up or commencement of winding
up of the Partnership.
SECTION 14
DEFINITIONS
As used herein the following terms have the respective meanings set
forth below (each such meaning to be equally applicable to the singular and
plural forms of the respective terms so defined):
"ACT" shall mean the Delaware Revised Uniform Limited Partnership
Act, 6 DEL C.ss.17-701 ET SEQ., as amended, and any successor to such statute.
"ADDITIONAL LIMITED PARTNER" shall have the meaning set forth in
Section 11.2(a).
39
"ADJUSTMENT DATE" shall mean the last Business Day of any Fiscal
Year or any other date determined by the General Partner, in its sole
discretion, as appropriate for an interim closing of the Partnership's books.
"ADVANCE" shall mean, with respect to a Profits Limited Partner,
the amount by which the Associated Contributions exceed the amount of the
deferrals made under the MMC Capital Plan by the Person who is such Profits
Limited Partner and credited to such Person's AFR Account (as defined in the MMC
Capital Plan) under the MMC Capital Plan.
"AFFILIATE" shall mean, with respect to any specified Person, (A) a
Person that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, the Person
specified, (B) a trust or other estate in which such Person has a substantial
beneficial interest or as to which such Person serves as trustee or in another
similar fiduciary capacity, and (C) any relative or spouse of such Person, or
any relative of such spouse, who has the same home as such Person, PROVIDED that
none of the Portfolio Companies or portfolio companies of The Trident
Partnership, L.P., Trident II, L.P., Xxxxx & XxXxxxxx Capital Technology Venture
Fund, L.P. or MMC Capital Communications and Information Fund, L.P. (formerly
known as Xxxxx & McLennan Capital Communications and Information Fund, L.P.)
shall be an "Affiliate" of a Senior Principal, the Manager, the General Partner
or the Partnership.
"AFR RATE" shall mean the fixed rate of return as of the date of
the first Drawdown, equal to the applicable federal long-term rate under section
1274(d) of the Code, compounded annually, as determined in the good faith
judgment of the General Partner, PROVIDED, that the General Partner may increase
such fixed rate of return if, as of the date of any subsequent Drawdown, such
fixed rate of return is less than the applicable federal rate under Section
1274(d) of the Code, compounded annually.
"AFR RETURN" shall have the meaning set forth in Section 6.3,
paragraph FIRST.
"AGREEMENT" shall have the meaning set forth in the initial
paragraph of this Agreement.
"ASSOCIATED COMMITMENT" shall mean, with respect to a Profits
Limited Partner, the Capital Commitment of the Employer Limited Partner
associated with such Profits Limited Partner.
"ASSOCIATED CONTRIBUTION" shall mean, with respect to a Profits
Limited Partner, the Capital Contribution of the Employer Limited Partner
associated with such Profits Limited Partner.
40
"AVAILABLE ASSETS" shall mean as of any date, the excess of the
cash, cash equivalent items and Temporary Investments held by the Partnership
over the sum of the amount of such items determined by the General Partner to be
reasonably necessary for the payment of the Partnership's expenses, liabilities
and other obligations (whether fixed, contingent, conditional or unmatured),
including, but not limited to, the Partnership's indemnification obligations and
for the establishment of appropriate reserves for such expenses, liabilities and
obligations as may arise, including, without limitation, the maintenance of
adequate working capital for the continued conduct of the Partnership's
business.
"BUSINESS DAY" shall mean any day on which banks in New York City
are not required or authorized by law to remain closed.
"CAPITAL ACCOUNT" shall have the meaning set forth in Section 6.1.
"CAPITAL COMMITMENT" shall mean the commitment of each Cash
Limited Partner and each Employer Limited Partner to contribute capital to the
Partnership pursuant to Section 5.1 as set forth in the Partnership Register.
The Associated Commitments of the Profits Limited Partners shall be associated
on the records of the Partnership with the Capital Commitment of the relevant
Employer Limited Partner.
"CAPITAL CONTRIBUTION" shall mean with respect to a Partner other
than a Profits Limited Partner, the amount of capital contributed pursuant to a
single Drawdown or the aggregate amount of such contributions, as the context
requires, by such Partner to the Partnership pursuant to Section 5.1 and the
other provisions of this Agreement.
"CASH LIMITED PARTNERS" shall have the meaning set forth in
Section 3.1(c).
"CERTIFICATE" shall have the meaning set forth in Section 1.4.
"CLAIMS" shall have the meaning set forth in Section 10.1(a).
"CLOSING" shall have the meaning set forth in the Subscription
Agreements.
"CLOSING DATE" shall mean any date on which a Closing occurs.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"CO-INVESTMENT FUNDS" shall have the meaning set forth in Section
1.3.
41
"COVERED PERSONS" shall mean (I) the General Partner, the Manager
and the Senior Principals; (II) each of the respective Affiliates of each Person
identified in clause (i) of this definition; and (III) each Person who is or at
any time becomes a shareholder, officer, director, employee, partner, member,
manager, consultant or agent of any of the Persons identified in clause (i) or
clause (ii) of this definition.
"DAMAGES" shall have the meaning set forth in Section 10.1(a).
"DEFAULTED COMMITMENT" shall have the meaning set forth in Section
5.3(a).
"DEFAULTING CASH LIMITED PARTNER" shall have the meaning set forth
in Section 5.3(a).
"DEFAULTING PROFITS LIMITED PARTNER" shall have the meaning set
forth in Section 5.3(b).
"DISABLING CONDUCT" shall mean, with respect to any Person, fraud,
willful misfeasance, gross negligence or reckless disregard, in each case, of
such Person's duties to the Partnership.
"DISTRIBUTABLE CASH" shall mean, for each Period and each Partner,
the excess of (I) the sum of cash receipts of all kinds, over (II) cash
disbursements or reserves for expenses, liabilities or obligations of the
Partnership or amounts retained by the Partnership to be reinvested pursuant to
Section 4.1(b).
"DRAWDOWN NOTICE" shall have the meaning set forth in Section
5.1(b)(i).
"DRAWDOWNS" shall mean the Capital Contributions made to the
Partnership pursuant to Section 5.1 from time to time by the Partners pursuant
to Drawdown Notices.
"EMPLOYER LIMITED PARTNERS" shall have the meaning set forth in
Section 3.1(a).
"EXCUSED LIMITED PARTNER" shall mean, with respect to any Portfolio
Investment, any Limited Partner that, pursuant to Section 5.2, is excused from
making a Capital Contribution or Associated Contribution, as the case may be, in
respect thereof.
"EXERCISING PARTNER" shall have the meaning set forth in Section
5.3(a).
"FISCAL YEAR" shall mean the fiscal year of the Partnership, as
determined pursuant to Section 1.5.
"FORFEITED DISTRIBUTIONS" shall have the meaning set forth in
Section 5.3(a).
42
"GENERAL PARTNER" shall mean Xxxxx & XxXxxxxx Tech XX XX, Inc., a
Delaware corporation, and any additional or successor general partner of the
Partnership in its capacity as a general partner of the Partnership, as such
entity may be affected by the provisions of Section 2.7.
"GOVERNMENTAL AUTHORITY" shall mean any United States federal,
state or local, or any non-U.S.: court, arbitrator or governmental agency,
authority, commission, instrumentality or administrative or regulatory body.
"INITIAL CLOSING" shall mean the first Closing under which Limited
Partners have acquired interests in the Partnership pursuant to the Subscription
Agreements.
"INSTITUTIONAL FUND AGREEMENT" shall mean the Limited Partnership
Agreement, as amended from time to time, of the Institutional Fund.
"INSTITUTIONAL FUND" shall have the meaning set forth in Section
1.3.
"INVESTMENT ADVISERS ACT" shall mean the United States Investment
Advisers Act of 1940, as amended from time to time, and any successor statute
thereto.
"INVESTMENT COMPANY ACT" shall mean the United States Investment
Company Act of 1940, as amended from time to time, and any successor statute
thereto.
"INVESTMENT COMPANY" shall mean any Person that comes within the
definition of "investment company" contained in the Investment Company Act.
"INVESTMENT GUIDELINES" shall have the meaning set forth in Section
1.3.
"LIMITED PARTNERS" shall have the meaning set forth in Section
1.1(a), shall mean the Cash Limited Partners, any Employer Limited Partners and
the Profits Limited Partners and all other Partners admitted (excluding, without
limitation, all Persons that cease to be Partners in accordance with the terms
hereof), from time to time, as limited partners of the Partnership in accordance
with the provisions of this Agreement and as set forth in the Partnership
Register, and shall include without limitation such Partner's successors and
permitted assigns.
"MAJORITY IN INTEREST" shall mean Partners who, at the time in
question, have Capital Account balances having values equal to more than 50% of
the aggregate Capital Account balances of all the Cash Limited Partners who are
not Defaulting Cash Limited Partners and all Profits Limited Partners who are
not Defaulting Profits Limited Partners.
43
"MANAGER" shall mean MMC Capital, Inc., a Delaware corporation,
or any successor thereto.
"MATERIAL ADVERSE EFFECT" shall mean, as applicable, (A) a
violation of a statute, rule or governmental administrative policy applicable to
a Partner regulation of a Governmental Authority which could a material adverse
effect on a Portfolio Company or any Affiliate thereof or on the Partnership,
the General Partner, the Manager or any of their respective Affiliates or on any
Partner or any Affiliate of any such Partner, or (B) an occurrence which could
subject a Portfolio Company or Affiliate thereof or the Partnership, the General
Partner, the Manager or any of their respective Affiliates or any Partner or any
Affiliate of any such Partner to any material tax or material regulatory
requirement to which it would not otherwise be subject, or which could
materially increase any such material tax or material regulatory requirement
beyond what it would otherwise have been.
"MMC" shall mean Xxxxx & McLennan Companies, Inc., a Delaware
corporation, and any successors thereto, and, as the context requires, its
subsidiaries and other Affiliates, including, without limitation, Xxxxx USA Inc.
(formerly known as J&H Xxxxx & McLennan, Inc.), Xxx Xxxxxxxxx & Company, Inc.,
Seabury & Xxxxx, Inc., Xxxxxx Investments, Inc. and Xxxxxx Consulting Group.
"MMC CAPITAL CAUSE DETERMINATION" shall mean, with respect to any
Limited Partner, a determination (made in a reasonable manner) by the General
Partner (in the case of a Cash Limited Partner) or the relevant Employer Limited
Partner (in the case of a Profits Limited Partner) that such Limited Partner has
committed one or more acts involving gross negligence or willful misconduct.
"MMC CAPITAL PLAN" shall mean the Amended and Restated Xxxxx &
XxXxxxxx Capital, Inc. Deferred Compensation and Profits Limited Partnership
Plan effective as of December 1, 1998., as may be amended from time to time.
"NASDAQ" shall mean The Nasdaq Stock Market, Inc.
"ORGANIZATIONAL EXPENSES" shall mean all costs and expenses that,
in the sole judgment of the General Partner, are incurred in, or are incidental
to, the formation and organization of, and sale of interests in, the
Partnership, including, without limitation, out-of-pocket legal, accounting,
printing, consultation, travel, administrative and filing fees and expenses, but
only those expenses that the General Partner has determined, in its sole
discretion, are properly borne by the Partnership.
"PARTNERS" shall have the meaning set forth in Section 1.1(a).
44
"PARTNERSHIP" shall have the meaning set forth in the initial
paragraph of this Agreement.
"PARTNERSHIP EXPENSES" shall mean the Partnership's pro rata share,
based on the capital commitments of each of the Co-Investment Funds, of the
expenses incurred in the operation of the Co-Investment Funds.
"PARTNERSHIP REGISTER" shall have the meaning set forth in Section
1.1(b).
"PERIOD" shall mean, for the first period, the period commencing on
the date of this Agreement and ending on the next Adjustment Date. All
succeeding Periods shall commence on the calendar day after an Adjustment Date
and end on the next Adjustment Date.
"PERSON" shall mean any individual, entity, corporation,
partnership, association, limited liability company, limited liability
partnership, joint-stock company, trust or unincorporated organization.
"PORTFOLIO COMPANY" shall mean an entity in which a Portfolio
Investment is made by the Partnership directly or through one or more
intermediate entities of the Partnership.
"PORTFOLIO INVESTMENT" shall mean any debt or equity (or debt with
equity) investment (including, without limitation, Temporary Investments and
bridge financing) made by the Partnership which, in the sole judgment of the
General Partner at the time such investment is made, is consistent with the
Investment Guidelines of the Partnership and is an appropriate investment for
the Partnership.
"POWER OF ATTORNEY" shall mean, with respect to any Limited
Partner, the Power of Attorney executed by such Partner substantially in the
form attached to the Subscription Agreements.
"PRIME RATE" shall mean the rate of interest publicly announced by
The Chase Manhattan Bank from time to time in New York City as its prime rate.
"PROCEEDING" shall have the meaning set forth in Section 10.1(a).
"PROFITS LIMITED PARTNERS" shall have the meaning set forth in
Section 3.1(b).
"REMAINING ASSOCIATED COMMITMENT" shall mean, in respect of any
Profits Limited Partner, the amount of the Employer Limited Partner's Capital
Commitment associated with such Profits Limited Partner, determined at any date,
which has not been contributed as an Associated Contribution, as adjusted as
contemplated hereby.
45
"REMAINING CAPITAL COMMITMENT" shall mean, in respect of any
Partner, the amount of such Partner's Capital Commitment, determined at any
date, which has not been contributed as a Capital Contribution, as adjusted as
contemplated hereby.
"RETIREMENT" shall have the meaning ascribed to such term in the
Xxxxx & XxXxxxxx Companies Benefit Program.
"SECRETARY OF STATE" shall have the meaning set forth in Section
1.4.
"SECURITIES" shall mean shares of capital stock, partnership
interests, limited liability company interests, warrants, options, bonds, notes,
debentures and other securities and equity interests of whatever kind of any
Person, whether readily marketable or not.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended
from time to time, and any successor statute thereto, and the rules and
regulations of the United States Securities and Exchange Commission promulgated
thereunder.
"SENIOR PRINCIPALS" shall mean Xxxxxx Xxxxxxxx, Xxxxxxx X. Xxxxx
and Xxxxxxx Xxxxxxxx; PROVIDED, that the provisions of this Agreement expressly
governing the Senior Principals shall not apply to any aforementioned individual
in such individual's capacity as a Senior Principal after such individual has
ceased to provide services if and as contemplated by the limited partnership
agreement of the Institutional Fund.
"SHARING PERCENTAGE" shall mean with respect to any Partner (other
than the Employer Limited Partners) and any Portfolio Investment, a fraction,
expressed as a percentage, the numerator of which is the aggregate amount of the
Capital Contributions of such Partner (or, in the case of a Profits Limited
Partner, the Capital Contributions of the Employer Limited Partner associated
with such Profits Limited Partner) used to fund the cost of such Portfolio
Investment and the denominator of which is the aggregate amount of the Capital
Contributions of all of the Partners used to fund the cost of such Portfolio
Investment. The Sharing Percentage of each Employer Limited Partner for each
Portfolio Investment shall be 0%.
"SUBSCRIPTION AGREEMENTS" shall mean the several Subscription
Agreements entered into by the respective Limited Partners in connection with
their purchase of limited partner interests in the Partnership.
"SUBSTITUTE LIMITED PARTNER" shall have the meaning set forth in
Section 11.1(e).
"TEMPORARY INVESTMENT" shall mean investments in (A) cash
equivalents, (B) marketable direct obligations issued or unconditionally
guaranteed by the United States of
46
America, or issued by any agency thereof, maturing within one year from the date
of acquisition thereof, (C) money market instruments, commercial paper or other
short-term debt obligations having at the date of purchase by the Partnership
the highest or second highest rating obtainable from either Standard & Poor's
Ratings Services or Xxxxx'x Investors Service, Inc. or their successors, (D)
money market mutual funds managed by Xxxxxx Investments, Inc. or a subsidiary
thereof, (E) interest bearing accounts and/or certificates of deposit maturing
within one year from the date of acquisition thereof issued by commercial banks
incorporated under the laws of the United States of America or any state thereof
or the District of Columbia, each having at the date of acquisition by the
Partnership undivided capital and surplus in excess of $100 million, combined
capital and surplus of not less than $100,000,000, (F) overnight repurchase
agreements with primary Fed dealers collateralized by direct U.S. Government
obligations or (G) pooled investment vehicles or accounts which invest only in
Securities or instruments of the type described in (a) through (d). If there
exists any uncertainty as to whether any investment by the Partnership
constitutes a Temporary Investment or a Portfolio Investment, such investment
shall be deemed a Temporary Investment unless the General Partner determines in
the exercise of its good faith judgment that such investment is a Portfolio
Investment.
"TERM" shall have the meaning set forth in Section 1.4.
"TIER 1 CASH LIMITED PARTNER" shall mean a Limited Partner who is a
present or former Senior Principal, or estate planning vehicle thereof or any
successor or Transferee (other than an Employer Limited Partner or the General
Partner) with respect to the Cash Limited Partner Interest of such present or
former Senior Principal.
"TIER 1 LIMITED PARTNER" shall mean a Limited Partner that is a
Tier 1 Cash Limited Partner or a Tier 1 Profits Limited Partner.
"TIER 1 PROFITS LIMITED PARTNER" shall mean a Limited Partner who
is a present or former Senior Principal, or any successor or Transferee (other
than an Employer Limited Partner or the General Partner) with respect to the
Profits Limited Partner interest of such present or former Senior Principal.
"TOTAL DISABILITY" shall have the meaning ascribed to such term in
the Xxxxx & McLennan Companies Benefit Program.
"TRANSFER" shall have the meaning set forth in Section 11.1(a).
"TRANSFEREE" shall have the meaning set forth in Section 11.1(b).
"TRANSFEROR" shall have the meaning set forth in Section 11.1(b).
47
"TREASURY REGULATIONS" shall mean the Regulations of the Treasury
Department of the United States issued pursuant to the Code.
"VALUE" shall have the meaning set forth in Section 8.4.
SECTION 15
AMENDMENTS; POWER OF ATTORNEY
15.1 AMENDMENTS. Any modifications or amendments duly adopted in
accordance with the terms of this Agreement may be executed in accordance with
Section 15.2. The terms and provisions of this Agreement may be modified or
amended at any time and from time to time with the written consent of (A) the
General Partner and (B) a Majority in Interest; PROVIDED, however, that without
the consent of the Limited Partners, the General Partner:
(i) may amend the Partnership Register from time to time as provided
in Section 1.1(b);
(ii) may enter into agreements with Persons who are Transferees of the
interests in the Partnership of Limited Partners, pursuant to the terms
of this Agreement, providing that such Transferees will be bound by this
Agreement and will become Substitute Limited Partners in the Partnership;
(iii) may amend this Agreement as may be required to implement (A)
Transfers of interests of Limited Partners as contemplated by Section
11.1, (B) the admission of any Substitute Limited Partner or any
Additional Limited Partner, and any related changes in Capital
Commitments, as contemplated by Section 11.1 or 11.2, (C) any changes in
the Partnership Register due to a Cash Limited Partner Default or Profits
Limited Partner Default, (D) the conversion, Transfer or merger of all or
any part of its interest as general partner of the Partnership as
contemplated by Section 2.7, or (E) a reorganization of the Partnership
as contemplated by Section 13.6;
(iv) may amend this Agreement (A) to satisfy any requirements,
conditions, rulings, guidelines or opinions contained in any opinion,
directive, order, ruling or regulation of the Securities and Exchange
Commission, the Internal Revenue Service or any other U.S. federal or
state or non-U.S. agency, or in any U.S. federal or state or non-U.S.
statute, compliance with which the General Partner deems to be in the
best interests of the Partnership, and (B) to change the name of the
Partnership, so long as any such amendment under this clause (iv) does
not materially and adversely affect the interests of the Limited Partners
under this Agreement;
48
(v) may amend this Agreement in accordance with Section 5.7 and/or 15.2;
and
(iv) may amend this Agreement to cure any ambiguity or correct or
supplement any provision hereof that may be incomplete or inconsistent
with any other provision hereof so long as such amendment under this
clause (vi) does not materially and adversely affect the interests of the
Limited Partners;
and PROVIDED FURTHER, that, notwithstanding the foregoing, no amendment of
this Agreement shall
(1) materially increase any financial obligation or liability of a
Limited Partner or reduce the economic rights of a Limited Partner beyond
that set forth herein or permitted hereby without such Limited Partner's
consent,
(2) materially and adversely affect the rights of a Limited Partner in a
manner which discriminates against such Limited Partner vis-a-vis other
Limited Partners without the consent of such Limited Partner,
(3) change the provisions of Section 3.2, Section 13.1, Section 13.2,
Section 13.3, Section 13.4, or this Section 15.1 without the consent of a
Majority in Interest,
(4) change the definition of "Majority in Interest" in Section 14.1
without the consent of a Majority in Interest, or
(5) modify or amend any defined term, if such modification or amendments
will have a material and adverse effect on the substantive rights of the
Limited Partners provided for in such section.
15.2 POWER OF ATTORNEY. Each Limited Partner does hereby
irrevocably constitute and appoint the General Partner and the Manager, and each
of them, with full power of substitution, the true and lawful attorney-in-fact
and agent of such Limited Partner, to take or cause to be taken, or omit or
cause to be omitted, any and all actions should the General Partner or the
Manager, as the case may be, in its sole discretion, deem such actions or
omissions to be necessary, advisable, appropriate, proper, convenient or
incidental to, or for the furtherance of the purposes of, the Partnership,
PROVIDED that such actions or omissions do not materially and adversely affect
the interests of the Limited Partners at the time of such action or omission;
including, without limitation, the power and authority to execute, acknowledge,
verify, swear to, deliver, record and file, in its or its assignee's name, place
and stead, all agreements, instruments, documents and certificates (I) which may
from time to time be required by the laws of the United States of America, the
State of Delaware, the State of Connecticut, the State of New York, any other
jurisdiction in which the Partnership conducts or plans to conduct business, or
any political subdivision or agency thereof, to effectuate,
49
implement and continue the valid existence and business of the Partnership, or
(II) which the General Partner or the Manager, as the case may be, deems to be
necessary, advisable, appropriate, proper, convenient or incidental to, or for
the furtherance of the purposes of, the Partnership, including, without
limitation, the power and authority to execute, verify, swear to, acknowledge,
deliver, record and file:
(a) all certificates and other instruments, including, without
limitation, this Agreement and any amendments thereto and any amendments
to the Certificate, which the General Partner or the Manager, as the case
may be, deems appropriate to (I) form, qualify or continue the
Partnership as an limited partnership (or a partnership in which the
limited partners have limited liability) in the State of Delaware, the
State of Connecticut, the State of New York and all other jurisdictions
in which the Partnership has an office or conducts or plans to conduct
business, and (II) admit such Person as a Limited Partner in the
Partnership;
(b) all instruments which the General Partner or the Manager, as
the case may be, deems appropriate to reflect or effect any amendment to
this Agreement or the Certificate (I) to reflect or effect Transfers of
interests of Limited Partners, the admission of Substitute Limited
Partners or Additional Limited Partners, or the increase of Capital
Commitments pursuant to Section 11, (II) to satisfy any requirements,
conditions, guidelines or opinions contained in any opinion, directive,
order, ruling or regulation of the United States Securities and Exchange
Commission, the United States Internal Revenue Service or any other
Governmental Authority, or in any United States federal or state or local
or any non-U.S., statute, compliance with which it deems to be in the
best interests of the Partnership, (III) to change the name of the
Partnership or reflect or effect a reorganization of the Partnership, as
contemplated by Section 13.6, (IV) to reflect or effect the conversion of
the General Partner to, or the merger of the General Partner with and
into, a limited partnership, limited liability company or other entity,
or the Transfer of its interest in the Partnership to a limited
partnership, limited liability company or other entity, as contemplated
by Section 2.7, and (V) to cure any ambiguity or correct or supplement
any provision contained in this Agreement that may be incomplete or
inconsistent with any other provision contained in this Agreement so long
as such amendment under this clause (v) does not adversely affect the
interests of the Limited Partners;
(c) all conveyances and other instruments which the General Partner
or the Manager, as the case may be, deems appropriate to reflect and
effect the dissolution and termination of the Partnership pursuant to the
terms of this Agreement, including, without limitation, the filing of a
certificate of cancellation as provided for in Section 13;
(d) all instruments relating to (I) Transfers of interests in the
Partnership, or the admission of Substitute Limited Partners or
Additional Limited Partners pursuant to Sec-
50
tion 11.1, (II) the treatment of a Defaulting Cash Limited Partner, a
Defaulting Profits Limited Partner, or an Excused Limited Partner, or a
Limited Partner whose participation in an investment is excused, limited
or discontinued pursuant to Section 5.2 or (III) any change in the
Capital Commitment of any Limited Partner, all in accordance with the
terms of this Agreement;
(e) all amendments to this Agreement duly adopted in accordance
with Section 15.1.
(f) certificates of assumed name and such other certificates and
instruments as may be necessary under the fictitious or assumed name
statutes from time to time in effect in the State of Delaware, the State
of Connecticut, the State of New York and any other jurisdiction in which
the Partnership has an office or conducts or plans to conduct business;
and
(g) any other instruments determined by the General Partner or the
Manager, as the case may be, to be necessary or appropriate in connection
with the proper conduct of the business of the Partnership and which do
not adversely affect the interests of the Limited Partners.
Such attorney-in-fact and agent shall not, however, have the right, power or
authority to amend or modify this Agreement when acting in such capacities,
except to the extent authorized herein. This power of attorney shall not be
affected by the subsequent disability or incompetence of the principal. This
power of attorney shall be deemed to be coupled with an interest, shall be
irrevocable, shall survive and not be affected by the dissolution, bankruptcy or
legal disability of any Limited Partner and shall extend to such Limited
Partner's successors and assigns. This power of attorney may be exercised by
such attorney-in-fact and agent for all Limited Partners (or any of them) by a
single signature of the General Partner or the Manager, as the case may be,
acting as attorney-in-fact with or without listing all of the Limited Partners
executing an instrument. Any person dealing with the Partnership may
conclusively presume and rely upon the fact that any instrument referred to
above, executed by such attorney-in-fact and agent, is authorized, regular and
binding, without further inquiry. If requested, each Limited Partner shall
execute and deliver to the General Partner or the Manager, as appropriate,
within five Business Days after receipt of a request therefor, such further
designations, powers of attorney or other instruments as the General Partner or
the Manager, as the case may be, shall reasonably deem necessary for the
purposes hereof. The foregoing power of attorney as in effect at the time of any
reorganization of the Partnership pursuant to Section 13.6 shall thereafter
continue in full force and effect, and shall apply to the limited partnership,
limited liability company or other entity that becomes the successor to the
Partnership pursuant to such reorganization. The foregoing power of attorney as
in effect at the time of the conversion of, Transfer by, or merger of the
General Partner pursuant to Section 2.7 shall, thereafter continue in full force
and effect
51
and shall apply to the limited partnership, limited liability company, or other
entity that becomes the successor to the General Partner pursuant to such
conversion, Transfer or merger.
15.3 FURTHER ACTIONS OF THE LIMITED PARTNERS. Each Limited Partner
shall execute and deliver such other certificates, agreements and documents, and
take such other actions, as may reasonably be requested by the General Partner
in connection with the formation of the Partnership and the achievement of its
purposes and not inconsistent with the terms and provisions of this Agreement,
including, without limitation, (A) any documents that the General Partner deems
necessary or appropriate to form, qualify or continue the Partnership as a
limited partnership in all jurisdictions in which the Partnership conducts or
plans to conduct business and (B) all such agreements, certificates, tax
statements and other documents as may be required to be filed in respect of the
Partnership.
SECTION 16
MISCELLANEOUS PROVISIONS
16.1 NOTICES. Each notice relating to this Agreement shall be in
writing and shall be delivered (A) in person, by first class registered or
certified mail, or by private courier, overnight or next-day express mail or (B)
by telex, telecopy or other facsimile or email transmission, confirmed by verbal
or written communication with such individual. All notices to any Partner shall
be addressed to such Partner and its trustee (if any) at their respective
addresses set forth in the Partnership Register or at such other address as such
Partner may have designated by notice in writing. Any Partner, other than the
General Partner, may designate a new address by written notice to that effect
given to the General Partner. The General Partner may designate a new address by
written notice to that effect given to all of the other Partners. Unless
otherwise specifically provided in this Agreement, a notice given in accordance
with the foregoing clause (a) shall be deemed to have been effectively given and
made when mailed by registered or certified mail, return receipt requested, to
the proper address or when delivered in person, in each case, delivery charges
prepaid. Any notice to the General Partner or to a Limited Partner by telex,
telecopy or other email or facsimile transmission shall be deemed to be given
when sent provided such notice shall be confirmed in accordance with the
foregoing clause (b).
16.2 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original and all of which
taken together shall constitute a single agreement.
52
16.3 TABLE OF CONTENTS AND HEADINGS. The table of contents and the
headings of the sections of this Agreement are inserted for convenience of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provision hereof.
16.4 SUCCESSORS AND ASSIGNS. Except as otherwise specifically
provided herein, this Agreement shall inure to the benefit of and be binding
upon the parties and to their respective heirs, executors, administrators,
successors and permitted assigns.
16.5 SEVERABILITY. Every term and provision of this Agreement is
intended to be severable. If any term or provision hereof is illegal or invalid
for any reason whatsoever, such term or provision will be enforced to the
maximum extent permitted by applicable law and, in any event, such illegality or
invalidity shall not affect the validity of the remainder of this Agreement. Any
default hereunder by a Limited Partner shall not excuse a default by any other
Limited Partner.
16.6 NON-WAIVER. No provision of this Agreement shall be deemed to
have been waived except if the giving of such waiver is contained in a written
notice given to the party claiming such waiver and no such waiver shall be
deemed to be a waiver of any other or further obligation or liability of the
party or parties in whose favor the waiver was given.
16.7 APPLICABLE LAW (SUBMISSION TO JURISDICTION). EXCEPT AS
PROVIDED IN SECTION 10.6, THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO SHALL BE INTERPRETED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED WHOLLY WITHIN THAT JURISDICTION WITHOUT GIVING EFFECT TO ITS
PRINCIPLES OR RULES OF CONFLICTS OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES
WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. The
General Partner hereby submits to the nonexclusive jurisdiction of the courts of
the State of Delaware and to the courts of the jurisdiction in which the
principal office of the Partnership is located (and, if the principal office is
located in the United States, of the federal district court having jurisdiction
over the location of the principal office) for the resolution of all matters
pertaining to the enforcement and interpretation of this Agreement.
16.8 CONFIDENTIALITY. Each Limited Partner agrees that it shall
not disclose without the prior consent of the General Partner (other than to
such Limited Partner's employees, auditors, actuaries, counsel or prospective
transferees; PROVIDED, that such Limited Partner obtain the agreement of such
Person to be bound by the obligations of this Section 16.8) any information with
respect to the Partnership or the other Co-Investment Funds or any Portfolio
Company that is designated by the General Partner to such Limited Partner in
writing as
53
confidential, PROVIDED that a Limited Partner may disclose any such information
(A) as has become generally available to the public, (B) as may be required or
appropriate in any report, statement or testimony submitted to any Governmental
Authority having jurisdiction over such Limited Partner, (C) as may be required
or appropriate in response to any summons or subpoena or in connection with any
litigation, (D) to the extent necessary in order to comply with any law, order,
regulation, ruling or other governmental request applicable to such Limited
Partner and (E) to its professional advisors. Notwithstanding anything in this
Agreement to the contrary, the General Partner shall have the right to keep
confidential any information known by the General Partner as to Portfolio
Companies, Portfolio Investments or other aspects of the Partnership's
investment activities if and to the extent that the General Partner determines
that keeping such information confidential is in the best interests of the
Partnership or that the Partnership is required by law or agreement with a third
party to keep confidential.
16.9 SURVIVAL OF CERTAIN PROVISIONS. The obligations of each
Partner pursuant to Section 6.11 and Section 10 shall survive the termination or
expiration of this Agreement and the dissolution, winding up and termination of
the Partnership.
16.10 WAIVER OF PARTITION. Except as may otherwise be provided by
law in connection with the winding-up, liquidation and dissolution of the
Partnership, each Partner hereby irrevocably waives any and all rights that it
may have to maintain an action for partition of any of the Partnership's
property.
16.11 ENTIRE AGREEMENT. This Agreement (including, without
limitation, all Schedules attached hereto), together with the related
Subscription Agreements, the related Powers of Attorney and any other written
agreement between the General Partner or the Partnership and any Limited Partner
with respect to the subject matter hereof, shall constitute the entire agreement
and understanding among the Partners with respect to the subject matter hereof,
and shall supersede any prior agreement or understanding among them hereto with
respect to the subject matter hereof, PROVIDED that the representations and
warranties of the General Partner and the Limited Partners in, and the other
provisions of, the Subscription Agreements shall survive the execution and
delivery of this Agreement.
16.12 CURRENCY. The term "dollar" and the symbol "$", wherever
used in this Agreement, shall mean the United States dollar.
54
IN WITNESS WHEREOF, the undersigned have duly executed this Amended
and Restated Limited Partnership Agreement of MMC Capital Tech Professionals
Fund II, L.P. on the day and year first above written.
GENERAL PARTNER:
XXXXX & XxXXXXXX TECH XX XX, INC.
By:
-----------------------------------------------
Name:
Title:
LIMITED PARTNERS:
Each of the Limited Partners listed in the
Partnership Register, pursuant to the power of
attorney and authorization granted by each such
Limited Partner to the General Partner as
attorney-in-fact and agent under the separate Powers
of Attorney, dated various dates:
By: MMC CAPITAL, INC.
By:
-----------------------------------------------
Name:
Title:
SCHEDULE A
INVESTMENT OBJECTIVE, POLICIES AND PROCEDURES
This Schedule A describes the investment objective, policies,
procedures, guidelines and restrictions of MMC Capital Tech Professionals Fund
II, L.P. (formerly known as Xxxxx & XxXxxxxx Capital Technology Professionals
Venture Fund II, L.P.) (the "PARTNERSHIP"). MMC Capital, Inc. (the "MANAGER") is
the manager of the Partnership and Xxxxx & McLennan Tech XX XX, Inc. (the
"GENERAL PARTNER") is the general partner of the Partnership. Certain
capitalized terms used without definition have the meanings specified in the
Limited Partnership Agreement of the Partnership (as amended, the "AGREEMENT").
INVESTMENT OBJECTIVE. The Partnership, along with its co-investment
and parallel funds (together with the Partnership, the "TECHNOLOGY FUND"), and
with Trident II, L.P. and its co-investment and parallel funds as co-investors,
will make venture capital and small to medium sized buyout and other private
equity and equity-related investments primarily in technology and related growth
industries, with a focus on Internet, e-commerce and software companies with
distinctive business propositions and growth opportunities in financial services
and related industries. The Technology Fund will target companies with
established business models seeking additional capital to fund growth. The
Technology Fund's portfolio investments are expected to range from $5 million to
$20 million in size, but in no event will the Technology Fund devote more than
20% of its capital commitments to any single investment.
INVESTMENT POLICIES AND PROCEDURES. The General Partner is
responsible for the investment decisions of the Partnership, based on the advice
of the Manager. The Partnership's routine activities shall be managed by the
Manager.
Among the Manager's management responsibilities for the Partnership
shall be the following: (A) to search for, analyze and develop investment
opportunities; (B) to screen and evaluate promising investment proposals; (C) to
structure and arrange the consummation of Portfolio Investments; (D) to monitor
the operations of Portfolio Companies; and (E) to develop and arrange the
implementation of strategies for the realization of gain from investments.
