EXHIBIT 10.49
__________________________________________________
AGREEMENT OF
LIMITED PARTNERSHIP OF
@VENTURES FOREIGN FUND III, L.P.
__________________________________________________
December 22, 1998
AGREEMENT OF
LIMITED PARTNERSHIP OF
@VENTURES FOREIGN FUND III, L.P.
TABLE OF CONTENTS
Page
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I. DEFINITIONS 1
II. FORMATION 11
2.1 Purpose 11
2.2 Name 11
2.3 Principal Place of Business 11
2.4 Registered Agent 11
2.5 Term 11
2.6 Tax Returns 12
III. CAPITAL CONTRIBUTIONS; PARTNERS' ACCOUNTS 12
3.1 Capital Commitments and Contributions 12
3.2 Initial Capital Contribution of the Limited Partners 13
3.3 Other Capital Contributions by the Limited Partners 13
3.4 Capital Accounts 15
3.5 Review or Modification of Capital Commitments 16
3.6 Default in Capital Commitment 17
IV. BRIDGE FINANCING 18
4.1 Extension of Bridge Financing 18
4.2 Funding of Bridge Financing 18
4.3 Permanent Bridge Financing 19
V. DISTRIBUTIONS; WITHHOLDING; VALUATION; ALLOCATIONS 19
5.1 Withdrawal of Capital 19
5.2 Distributions Prior to Liquidation 19
5.3 Distributions Upon Liquidation 21
5.4 Distributions of Securities in Kind 22
5.5 Withholding 23
5.6 Valuation 23
5.7 Allocations of Operating Income and Loss and Investment Gain and Loss 25
5.8 Special Provisions 26
5.9 Special Provisions in the Event of Borrowings or a Section 754 Election 27
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VI. MANAGEMENT; PAYMENT OF EXPENSES 28
6.1 Description of General Partner 28
6.2 Management by the General Partner 28
6.3 Powers of Limited Partners 30
6.4 Continuity Mode 30
6.5 Payment of Fees and Expenses 31
VII. OTHER ACTIVITIES OF PARTNERS; CO-INVESTMENT OBLIGATION 33
7.1 Commitment of General Partner 33
7.2 Opportunity to Participate in Future Investment Vehicles 33
7.3 Dealings with Limited Partners 34
7.4 Co-Investment Obligation 34
7.5 Other Co-Investment Rights 35
7.6 @Ventures III Co-Investment 35
VIII. ADMISSIONS; ASSIGNMENTS; REMOVAL AND WITHDRAWALS 35
8.1 Admission of Additional General Partner 35
8.2 Admission of Additional Limited Partners 35
8.3 Assignment of Partnership Interest 36
8.4 Restrictions on Transfer 37
8.5 Removal of General Partner 37
8.6 Withdrawals 38
IX. LIABILITY OF PARTNERS; INDEMNIFICATION 39
9.1 Liability of General Partner 39
9.2 Liability of Limited Partners 40
9.3 Indemnification of the General Partner and Limited Partners 40
9.4 Payment of Expenses 40
X. ACCOUNTING FOR THE PARTNERSHIP; REPORTS 41
10.1 Accounting for the Partnership 41
10.2 Books and Records 41
10.3 Quarterly Reports 41
10.4 Annual Meeting 42
XI. DISSOLUTION AND WINDING UP 42
11.1 Termination 42
11.2 Winding Up 43
11.3 Liquidating Trust 43
XII. MISCELLANEOUS 43
12.1 Registration of Securities 43
12.2 Entire Agreement 44
12.3 Voting; Amendments 44
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12.4 Severability 45
12.5 Notices 45
12.6 Heirs and Assigns; Execution 45
12.7 Waiver of Partition 45
12.8 Power of Attorney 45
12.9 Headings 45
12.10 Further Actions 46
12.11 Gender, Etc 46
12.12 Tax Matters Partner 46
12.13 Applicable Law 46
12.14 Avoidance of Trade or Business Status; Service-Related Income 46
12.15 Confidentiality 47
12.16 Favorable Arrangements 48
12.17 Additional Co-Investments 48
Schedule 1 50
Exhibit A - Form of Management Contract
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AGREEMENT OF
LIMITED PARTNERSHIP OF
@VENTURES FOREIGN FUND III, L.P.
AGREEMENT OF LIMITED PARTNERSHIP dated as of December 22, 1998 (the
"Agreement"), by and among @Ventures Partners III, LLC (referred to as the
"General Partner"), and the undersigned limited partners (together with any
other limited partner which may hereafter be admitted referred to as the
"Limited Partners"). The General Partner and the Limited Partners are sometimes
collectively referred to herein as the "Partners" and individually as a
"Partner." Definitions of certain terms used in this Agreement are contained in
Article I.
WHEREAS, @Ventures III, L.P. (the "Domestic Fund") was formed pursuant to a
Certificate of Limited Partnership filed with the Office of the Secretary of
State of the State of Delaware on May 29, 1998.
WHEREAS, the General Partner and the Limited Partners desire to enter into
an agreement of limited partnership to invest side-by-side with the Domestic
Fund, and hereby form a limited partnership pursuant to and in accordance with
the Delaware Revised Uniform Limited Partnership Act (6 Del. C. (S) 17-101, et
seq.) (the "Delaware Act").
AGREEMENT
---------
In consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
I. DEFINITIONS
-----------
As used herein, the following terms have the following meanings:
@Ventures III:
-------------
@Ventures Partners III, LLC, a Delaware limited liability company, or any
successor general partner of the Partnership.
Accredited Investor:
-------------------
An investor which qualifies as an "accredited investor" as defined in Section
230.501 of Regulation D promulgated under the Securities Act.
Act:
---
The Delaware Revised Uniform Limited Partnership Act, as amended from time to
time.
-1-
Adjusted Capital Account Deficit:
--------------------------------
With respect to any Partner, the deficit balance, if any, in such Partner's
Capital Account as of the end of the relevant fiscal year or other accounting
period determined after (i) crediting to such Capital Account any amounts which
such Partner is obligated to restore thereto hereunder or is deemed to be
obligated to restore thereto pursuant to the penultimate sentences of Sections
1.704-2(g)(1) and 1.704-2(i)(5) of the Treasury Regulations and (ii) debiting to
such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4),
(5) and (6) of the Treasury Regulations. The foregoing definition of Adjusted
Capital Account Deficit is intended to comply with the provisions of Section
1.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be interpreted
consistently therewith.
Affiliates:
----------
With respect to any person, any officer, director, employee or general partner
of, or any person that directly or indirectly through one or more intermediaries
controls, is controlled by or is under common control with, such person. The
General Partner and its individual members shall all be deemed Affiliates of one
another.
Assignee:
--------
As defined in Section 8.3.
Break-up Fee:
------------
Any fee, reimbursement or other form of compensation payable by a third party as
a result of the failure to consummate an investment.
Bridge Financing:
----------------
As defined in Section 4.1.
Business Day:
------------
Any day, excluding Saturday, Sunday and any other day on which commercial banks
in Boston, Massachusetts are authorized or required by law not to be open for
business.
CMGI:
----
CMG Information Services, Inc., a Delaware corporation.
CMGI Funds:
----------
The Prior Funds and any other corporation, partnership or limited liability
company organized by CMGI in order to facilitate its co-investment obligation
under Section 7.4 hereof.
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Capital Account:
---------------
As defined in Section 3.5.
Capital Commitment:
------------------
As defined in Section 3.1.
Capital Contribution:
--------------------
As defined in Section 3.2.
Capital Contribution Allocable to Liquidated Portfolio Securities:
-----------------------------------------------------------------
With respect to any Partner or class of Partners as of any time of
determination, that portion of the Capital Contributions of such Partner or
Partners equal to the cost basis of Portfolio Securities that have been
liquidated or otherwise disposed of. Capital Contributions Allocable to
Liquidated Portfolio Securities shall include (i) the unreimbursed cost to the
Partnership of acquiring, holding and selling Portfolio Securities, (ii) any
Deemed Portfolio Loss and (iii) that portion of the expenses of the Partnership
described in Section 6.5.A(1) that is equal to the ratio of the cost basis of
such liquidated Portfolio Security to the total Capital Commitments of the
Partnership (provided, however, that in the case of the last investment by the
Partnership in a Portfolio Security, any such expenses that have not previously
been allocated shall be allocated in their entirety to such last investment for
purposes of determining the Capital Contribution of the Partners allocable to
such Portfolio Security). For the purposes of Section 5.2B(1) Capital
Contributions Allocable to Liquidated Portfolio Securities shall be reduced by
any Deemed Portfolio Loss previously distributed with respect to that security
pursuant to Section 5.2B(1).
Capital Contribution Allocable to Portfolio Securities:
------------------------------------------------------
With respect to any Partner or class of Partners as of any time of
determination, (i) that portion of the Capital Contributions of such Partner or
Partners that have been invested in Portfolio Securities, including the
unreimbursed cost to the Partnership of acquiring, holding and selling Portfolio
Securities (to the extent not paid by break-up and other fees as provided in
Sections 6.5.E and 6.5.F), and (ii) that portion of the expenses of the
Partnership described in Section 6.5.A(1) that is equal to the ratio of the cost
basis of Portfolio Securities to the total Capital Commitments of the
Partnership (provided, however, that in the case of the last investment by the
Partnership in a Portfolio Security, any such expenses that have not previously
been allocated shall be allocated in their entirety to such last investment for
purposes of determining the Capital Contribution of the Partners allocable to
such Portfolio Security).
Code:
----
The Internal Revenue Code of 1986, as amended.
Co-investment Obligation:
------------------------
As defined in Section 7.4.
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Committed Investment:
--------------------
An investment in Portfolio Securities in which the Partnership had an obligation
to invest as of the last day of the Commitment Period pursuant to either (i) a
commitment to make an initial investment in a Portfolio Company or (ii) a
commitment made at the time of the initial investment in a Portfolio Company.
Commitment Period:
-----------------
The period from the Initial Closing Date to four years from such date.
Continuity Mode:
---------------
Status which the Limited Partners can impose upon the Partnership in the event
of a Triggering Event as described in Section 6.4.
Deemed Portfolio Loss:
---------------------
As defined in Section 5.2.D.
Defaulting Partner:
------------------
As defined in Section 3.7.
Dissolution Sale:
----------------
Sales and liquidations by or on behalf of the Partnership of all or
substantially all of its assets in connection with or in contemplation of the
winding up of the Partnership.
Domestic Fund:
-------------
@Ventures III, L.P., a Delaware limited partnership.
Eighty Percent (80%) in Interest of the Limited Partners:
--------------------------------------------------------
At any time, those Limited Partners whose aggregate Percentage of Contributed
Capital equals or exceeds eighty percent (80%).
Escrow Account:
--------------
As defined in Section 5.2.G.
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Financial Institution:
---------------------
A bank, savings institution, trust company, insurance company, pension or profit
sharing trust, or similar entity which is a member of any group of such persons,
having assets of at least $100 million, or other entity (other than an
individual) a substantial part of whose business consists of investing in,
purchasing or selling the securities of others.
Follow-on Investment:
--------------------
An investment, other than a Committed Investment, in Portfolio Securities of a
Portfolio Company in which the Partnership holds, immediately prior thereto,
Portfolio Securities.
General Partner:
---------------
@Ventures Partners III, LLC or any successor general partner of the Partnership.
Incentive Distributions:
-----------------------
As defined in the last paragraph of Section 5.2.B.
Indemnitees:
-----------
As defined in Section 9.3.
Initial Closing Date:
--------------------
The first date on which any Limited Partner, other than the Initial Limited
Partner, is admitted to the Partnership.
Investment Company Act:
----------------------
The Investment Company Act of 1940, as amended.
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Investment Gain:
---------------
For any fiscal year or other accounting period of the Partnership, the amount,
if any, by which the Partnership's gross taxable income and gains with respect
to interests in Portfolio Companies exceed the Partnership's gross taxable
deductions and losses with respect to such interests in Portfolio Companies.
The following amounts shall be included in determining Investment Gain: (i) any
interest, dividend or similar distribution with respect to Portfolio Securities,
and (ii) any and all payments arising out of the disposition of Portfolio
Securities, including without limitation any option payment, lump sum payment,
principal or interest paid or imputed under any promissory note, and any payment
made pursuant to a royalty or earn-out arrangement or similar form of contingent
payment. Calculations of Investment Gain shall be consistent with calculations
made for federal income tax purposes, except that Investment Gain shall be
determined (w) by taking into account unrealized gains and losses with respect
to Portfolio Securities that are revalued pursuant to the penultimate sentence
of Section 3.5 or distributed in kind hereunder, (x) with reference to the book
value rather than the adjusted tax basis of any Portfolio Security that has been
revalued pursuant to the penultimate sentence of Section 3.5, (y) without regard
to any amounts that are specially allocated pursuant to Sections 5.8. and 5.9
and (z) without giving effect to any adjustments made pursuant to Sections 743
or 734 of the Code. Notwithstanding the foregoing, Investment Gain shall not
include (i) interest or dividends received from, or gain received upon the
disposition of, Temporary Bridge Financing or Permanent Bridge Financing; (ii)
the amount of any fees paid to the Partnership pursuant to Section 6.5.E, and
(iii) the amount of any fees paid to the Partnership pursuant to Section 6.5.F.
Investment Loss:
---------------
For any fiscal year or other accounting period of the Partnership, the amount,
if any, by which the Partnership's gross taxable deductions and losses with
respect to interests in Portfolio Companies exceed the Partnership's gross
taxable income and gains with respect to interests in Portfolio Companies.
Calculations of Investment Loss shall be consistent with calculations made for
federal income tax purposes and with the calculation of Investment Gain.
Investment Receipts:
-------------------
Amounts received by the Partnership with respect to (including payments and
distributions on and proceeds of dispositions of) interests in and assets of
Portfolio Companies, net of amounts necessary to pay all expenses, debts and
obligations of the Partnership or to establish reserves therefor. Investment
Receipts shall exclude (i) interest or dividends received from, or gain received
upon the disposition of, Temporary or Permanent Bridge Financing, (ii) the
amount of any fees paid to the Partnership pursuant to Section 6.5.E, and (iii)
the amount of any fees paid to the Partnership pursuant to Section 6.5.F.
Liabilities:
-----------
As defined in Section 9.3.
Limited Partners:
----------------
As defined in the recitals.
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Liquidated Portfolio Securities:
-------------------------------
Portfolio Securities that have been liquidated or otherwise disposed of.
Majority in Interest of Limited Partners:
----------------------------------------
At any time, those Limited Partners whose aggregate Percentage of Contributed
Capital exceeds fifty percent (50%).
Management Company:
------------------
@Ventures Management, LLC, a Delaware limited liability company.
Management Contract:
-------------------
The management contract with the Management Company in the form attached hereto
as Exhibit A.
---------
Management Fee:
--------------
The management fee payable by the Partnership to the Management Company pursuant
to the Management Contract.
Marketable Securities:
---------------------
Securities (i) that are freely tradable pursuant to a registration under the
Securities Act of 1933, as amended, or an exemption therefrom, (ii) that
immediately after giving effect to their distribution will not be subject to any
contractual restriction on transfer, (iii) that will be traded on a national
securities exchange or reported through the National Association of Securities
Dealers Automated Quotation System, and (iv) that may be sold without regard to
volume limitations.
Net Investment Gain:
-------------------
As of any time of determination, the amount, if any, by which the sum of the
Investment Gains for all fiscal years and other accounting periods of the
Partnership exceeds the sum of the Investment Losses for all fiscal years and
other accounting periods of the Partnership.
Net Operating Income:
--------------------
As of any time of determination, the amount, if any, by which the sum of the
Operating Income for all fiscal years and other accounting periods of the
Partnership exceeds the sum of the Operating Losses for all fiscal years and
other accounting periods of the Partnership.
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Operating Income (Loss):
-----------------------
For any fiscal year or other accounting period of the Partnership the excess
(deficiency) of all income and gains of the Partnership, from whatever source
derived, over the losses and expenses borne by the Partnership (including the
Management Fee), including any income, gain, losses or expenses relating to
Temporary Bridge Financing, Permanent Bridge Financing and Temporary Investments
but excluding Investment Gain (Loss) all as calculated for federal income tax
purposes, except that Operating Income (Loss) shall be computed with the
following adjustments: (i) income of the Partnership that is exempt from
federal income tax and that is not otherwise taken into account in computing
income or loss shall be added to Operating Income (Loss); (ii) expenditures of
the Partnership that are neither deductible for Federal income tax purposes nor
allowable as additions to the basis of Partnership property (or that are so
treated pursuant to Section 1.704-1(b)(2)(iv)(i) of the Treasury Regulations)
shall be subtracted from such taxable income or loss; and (iii) there shall not
be taken into account any items that are specially allocated pursuant to
Sections 5.8.A, 5.8.C, 5.8.D and 5.9.
Operating Receipts:
------------------
All amounts received by the Partnership other than Investment Receipts, net of
amounts necessary to pay all expenses, debts and obligations of the Partnership
or to establish reserves therefor.
Partners:
--------
As defined in the recitals hereof.
Partnership:
-----------
@Ventures Foreign Fund III, L.P., a Delaware limited partnership.
Percentage of Contributed Capital:
---------------------------------
In the case of each Partner, except as provided in Sections 3.6 and 3.7, the
Capital Contributions of such Partner divided by the sum of the Capital
Contributions of all Partners.
Permanent Bridge Financing:
--------------------------
As defined in Section 4.3.
Portfolio Companies:
-------------------
Companies in which the Partnership makes investments in accordance with the
provisions of this Agreement.
Portfolio Securities:
--------------------
Equity and equity-related securities of Portfolio Companies in which the
Partnership invests in accordance with the provisions of this Agreement.
Temporary Bridge Financing and Permanent Bridge
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Financing shall not be considered to be Portfolio Securities except for the
purpose of calculating the amount of Investment Receipts to be distributed and
allocated pursuant to Sections 5.2.B(2) and 5.7.B(4).
Prior Funds:
-----------
CMG@Ventures I, LLC and CMG@Ventures II, LLC.
Removal Date Securities:
-----------------------
As defined in Section 8.5.
Securities Act:
--------------
The Securities Act of 1933, as amended.
Special Limited Partner:
-----------------------
As defined in Section 8.5.
Substitute Limited Partner:
--------------------------
As defined in Section 8.3.
Subscription Agreement:
----------------------
Each of the several Subscription Agreements between the Partnership and the
Limited Partners.
Target Allocation:
-----------------
With respect to any Partner as of the close of any fiscal year or other
accounting period of the Partnership for which an allocation of Investment
Loss is to be made pursuant to Section 5.7.C(1), the amount of Net
Investment Gain that would then be allocated to such Partner if (i) the Net
Investment Gain for all periods through the close of such fiscal year or
other period were equal to the Net Investment Gain as of the close of the
immediately preceding fiscal year or other accounting period of the
Partnership less the amount of Investment Loss to be then allocated
pursuant to Section 5.7.C(1) and (ii) the Net Investment Gain as then
calculated pursuant to clause (i) were then allocated to the Partners
pursuant to Sections 5.7.B(3), 5.7.B(4) and 5.7.B(5) as if there had been
no prior allocations of Investment Gain or Investment Loss.
Temporary Bridge Financing:
--------------------------
Bridge Financing that has not been converted into Permanent Bridge Financing
pursuant to Section 4.3.
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Temporary Investments:
---------------------
(i) Investments in direct obligations of the United States of America, or
obligations of any instrumentality or agency thereof payment of principal and
interest of which is unconditionally guaranteed by the United States of America,
all of such obligations having a final maturity not more than one year from the
date of issue thereof;
(ii) Investments in certificates of deposit or repurchase agreements
having a final maturity not more than one year from the date of acquisition
thereof issued by any bank or trust company organized under the laws of the
United States of America or any state thereof having capital and surplus of at
least $100 million;
(iii) Investments in money market funds, provided that such funds invest
primarily in government securities described in subparagraph (i) or in municipal
obligations that receive a rating of AAA or AA, or Aaa or Aa from a nationally
recognized financial rating service such as Standard & Poor's Corporation or
▇▇▇▇▇'▇ Investors Service, Inc., respectively;
(iv) Investments in interest-bearing accounts of Financial Institutions;
and
(v) Commercial paper payable on demand or having a final maturity not more
than one year from the date of acquisition thereof which has the highest credit
rating by either Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investors Service,
Inc.
Treasury Rate:
-------------
An interest rate calculated quarterly at the average of the ninety (90) day
United States Treasury ▇▇▇▇ weekly auction rates for the preceding quarter.
Treasury Regulations:
--------------------
Income Tax Regulations promulgated from time to time under the Code. References
to specific sections of the Treasury Regulations shall be to such Sections as
amended, supplemented or superseded by Treasury Regulations currently in effect.
Triggering Event:
----------------
As defined in Section 6.4.
Two-Thirds in Interest of the Limited Partners:
----------------------------------------------
Those Limited Partners whose aggregate Percentage of Contributed Capital equals
or exceeds sixty-six and two-thirds percent (66 2/3%).
UBTI:
----
Unrelated business taxable income as defined in Section 512 of the Code and
including unrelated debt-financed income as defined in Section 514 of the Code.
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II. FORMATION
---------
Section 2.1 Purpose.
--------
Pursuant to the Act, the Partners hereby agree to form the Partnership as a
limited partnership for the principal purpose of making equity and equity-
related investments in Portfolio Companies, on a side-by-side basis with the
Domestic Fund, managing, supervising and disposing of such investments,
receiving the profits and losses therefrom, and engaging in activities
necessarily incidental or ancillary thereto.
Section 2.2 Name.
-----
The name of the Partnership will be "@VENTURES FOREIGN FUND III, L.P." or
such other name or names as the General Partner may from time to time designate.
Section 2.3 Principal Place of Business.
----------------------------
The principal office of the Partnership will be located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other location in the United
States as the General Partner may from time to time determine. The General
Partner shall give prompt notice of any change in the principal office of the
Partnership to each Limited Partner.
Section 2.4 Registered Agent.
-----------------
The initial address of the Partnership's registered office in Delaware is
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ of New Castle, and its initial registered
agent at such address for service of process is The Corporate Trust Company.
Section 2.5 Term.
-----
The Partnership shall continue in full force and effect until July 31,
2006, unless extended or until earlier terminated pursuant to Section 11.1.
Section 2.6 Tax Returns.
------------
The Partnership shall not take any position in any federal or state income
tax return that the Partnership is engaged in a trade or business unless there
is a change in law which in the opinion of counsel to the Partnership would
require such reporting.
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III. CAPITAL CONTRIBUTIONS; PARTNERS' ACCOUNTS
-----------------------------------------
Section 3.1 Capital Commitments and Contributions.
--------------------------------------
Subject to the provisions of Sections 3.3 and 3.4, each Partner intends to
make cash contributions to the capital of the Partnership in the amount set
forth opposite its name on Schedule 1 attached hereto. The amount of such
commitment, reduced by any portion of the commitment which is released pursuant
to Section 3.5 and increased or decreased by any amount pursuant to Section 3.6,
is referred to herein as a "Capital Commitment." With respect to each Partner,
the amount of capital contributed pursuant to such Capital Commitment and, after
the end of the Commitment Period, amounts proportional to the Partner's
Percentage of Contributed Capital that are reserved from Operating Receipts or
Investment Receipts and invested in Follow-on Investments or Committed
Investments, are referred to as "Capital Contributions." On any date when a
Limited Partner makes a Capital Contribution to the Partnership, the General
Partner shall contribute to the capital of the Partnership cash in such amount
as is sufficient to cause the General Partner's Capital Contribution to equal
one percent (1%) of the aggregate Capital Contributions of all Partners. The
General Partner shall call for payment of the balance of each Partner's Capital
Commitment as needed to fund the Partnership's investments in Portfolio
Companies and other permitted uses under this Agreement in accordance with this
Article III; provided, however, that no call may be made at any time subsequent
to the Commitment Period except to the extent necessary to (i) provide for the
expenses of the Partnership including the Management Fee, (ii) make Committed
Investments pursuant to Section 6.2.M or (iii) make Follow-on Investments
pursuant to Section 6.2.L; and provided further, however, that mandatory capital
contributions by the Limited Partners shall be required only for (x) funding the
payment of Partnership expenses in accordance with Section 6.5 (but not
including indemnification expenses pursuant to Section 9.3), and (y) the
Management Fee. All such calls shall be made in writing to all Partners pro
rata in proportion to their respective Capital Commitments and shall specify the
intended use of such called capital, including in the case of a capital call to
invest in a Portfolio Company the name of the Portfolio Company. Such calls
shall be made at least ten (10) Business Days before the date on which the
installment payable in response to that call is due. The Capital Contributions
of a Partner shall not in any case exceed the Capital Commitment of such Partner
except as such Partner may otherwise consent. No Capital Contribution returned
to a Partner, other than a Capital Contribution that is allocable to a Temporary
Bridge Financing which has been sold, refinanced or otherwise disposed of, shall
be callable by the General Partner pursuant to this Section 3.1 again, except as
such Partner may otherwise consent.
Section 3.2 Initial Capital Contribution of the Limited Partners.
-----------------------------------------------------
Upon formation of the Partnership, each Limited Partner shall pay a capital
contribution (such Limited Partner's "Initial Contribution" and such date of
payment being the "Initial Contribution Date") to the Partnership, by wire
transfer or check, in an amount equal to such Limited Partner's pro rata share
(based upon Capital Commitments of the Limited Partners) of the initial
Management Fee, calculated from August 7, 1998 of the Domestic Fund. In
addition, each Limited Partner shall contribute capital to the Partnership in an
amount equal to (i) such Limited Partner's pro rata share (based upon Capital
Commitments of the Limited Partners) of the product of the Aggregate Partnership
Percentage (as defined below) as of the time of such Initial Contribution
multiplied by the aggregate original purchase price of the securities held by
the Domestic Fund in which the Partnership determines to invest (as set forth
below), plus (ii) interest calculated in the same manner as in Section 8.2 of
this Agreement (as to additional Limited Partners), plus (iii) such Limited
Partner's pro rata share (based upon Capital Commitments of the Limited
Partners) of the organizational fees and expenses payable in accordance with
Section 6.5. The General Partner and the Limited Partners shall follow the
procedures set forth in
-12-
Section 3.3 with respect to the securities held by the Domestic Fund on the date
of formation of the Partnership in order to determine the securities in which
the Partnership will invest and for which Partners will contribute capital. The
Limited Partners shall fund the capital contribution described in this Section
3.2 within ten (10) business days of the date that the General Partner gives the
Limited Partners written notice confirming the amount of such capital
contribution. The General Partner shall cause the Domestic Fund to transfer the
securities so acquired by the Partnership as soon as reasonably practicable
following such capital contribution, such transfer to be effected in a manner
reasonably satisfactory to the Limited Partners and their counsel. For purposes
of this Article III, "Aggregate Partnership Percentage" equals the quotient,
expressed as a percentage, of the aggregate Capital Commitments of all of the
Partners of the Partnership, divided by the sum of the aggregate Capital
Commitments of all of the Partners of the Partnership plus the aggregate capital
commitments of all of the partners of the Domestic Fund.
Section 3.3 Other Capital Contributions by the Limited Partners.
----------------------------------------------------
Capital contributions by the Limited Partners to fund investments of the
Partnership shall be made from time to time in accordance with this Section 3.3.
(a) The General Partner shall offer to the Partnership the opportunity to
acquire its Aggregate Partnership Percentage of each investment opportunity
offered to the Domestic Fund, including any Follow-on Investments, on the same
terms and conditions as those offered to the Domestic Fund. In the event that a
Majority in Interest of the Limited Partners of the Partnership desires to fund
an investment, then each Limited Partner of the Partnership (including those who
have not so notified the General Partner) shall be required to contribute
capital to the Partnership in an amount equal to that portion of the investment
which equals the product of (x) the quotient obtained by dividing its Capital
Commitment by the Capital Commitments of all of the Partners times (y) the
Partnership's aggregate investment amount ("Pro Rata Share"). The Partnership
shall not make any investments in securities (other than Temporary Investments)
without the prior written approval of a Majority in Interest of the Limited
Partners of the Partnership as set forth in this Section 3.3. The General
Partner's obligations under this Section 3.3 shall commence on the date hereof
and shall continue throughout the term of the Partnership.
(b) In connection with a proposed investment to be made by the Partnership,
the General Partner shall give each Limited Partner a written investment
memorandum (an "Investment Memo") summarizing such investment, and indicating
the date on which a definitive decision shall be required by a Majority in
Interest of the Limited Partners of the Partnership (the "Decision Date"), which
shall be no less than 30 days from the date of delivery of the Investment Memo
or Follow-On Investment Memo (as defined below), as the case may be, except in
unusual or exigent circumstances where the requirements of the particular
transaction dictate a shorter notice period, which circumstances shall be
described in writing in the Investment Memo. The Investment Memo shall include
(a) the name of the company in which such investment may be made, (b) a
description of the business engaged in by such company, (c) the background and
suitability of the portfolio company's senior management, (d) historical
financial data for such company, if available, (e) financial forecasts, (f) the
rationale for such investment, (g) the projected internal rate of return for
such investment based on forecasted revenue, operating margins and net income
and valuation multiples of revenue and net profit, (h) valuations, valuation
multiples and operating results of comparable companies selected by the General
Partner, (i) the proposed amount and terms of the proposed investment by the
Domestic Fund and the Partnership, (j) the proposed
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use of proceeds by such company, (k) the projected future financing requirements
of such company, (l) a description of such company's products and technology
including an assessment of its advantages, (m) a description of such company's
market, including estimates of the size of the current and future market, (n)
descriptions of current and anticipated competitive companies and technologies,
(o) risks and other issues of the investment, (p) the General Partner's expected
action plan or agenda relating to the investment, (q) a capitalization table,
reflecting the ownership of management and other investors and stock option
plan(s), (r) a description of (A) any interest in such company that is held by
the General Partner or its Affiliates, and (B) any other affiliations known to
the General Partner between such company and the General Partner, any Affiliate
of the General Partner or any portfolio company in which one of the persons
listed in the preceding clause (A) has made an investment, and (s) any other
information reasonably requested by the Limited Partners.
(c) Prior to the closing of any investment to be made by the Domestic Fund
in a Follow-on Investment, the General Partner shall deliver to each Limited
Partner a written recommendation memorandum (a "Follow-On Investment Memo")
summarizing such Follow-on Investment, and indicating the Decision Date
therefor. Such Follow-on Investment Memo shall include (a) the name of the
portfolio company, (b) the most recent financial data for the company, (c) the
rationale for the Follow-on Investment, (d) the amount and terms of the proposed
Follow-on Investment, (e) an update to the other information provided pursuant
to subparagraph (ii), and (f) any other information reasonably requested by the
Limited Partners.
(d) Within three (3) business days of receipt of the Investment Memo or
Follow-on Investment Memo, each Limited Partner shall notify the General Partner
as to whether such Limited Partner will be able to reach a decision as to such
investment on or before the Decision Date.
(e) On or before the Decision Date, each Limited Partner shall notify the
General Partner as to whether or not such Limited Partner will participate in
such investment. If a Majority in Interest of the Limited Partners of the
Partnership fails to provide to the General Partner an affirmative notice
pursuant to this clause on or before the Decision Date, such failure shall be
regarded as a waiver by all Limited Partners of their right to participate in
such investment.
(f) Any capital contribution agreed to be made by the Limited Partners
pursuant to this Section 3.3 shall be made by check or wire transfer upon no
less than ten (10) business days' prior written notice given by the General
Partner.
(g) Notwithstanding the above, with respect to the following Follow-on
Investments, if (i) the initial Investment Memo provides the Limited Partners
with the same type of information for any proposed Follow-On Investments as
required in Investment Memos and Follow-On Investment Memos, plus information
indicating the milestones and other goals for such portfolio company and a price
range for the subsequent securities and market capitalization range for such
portfolio company at the time of the Follow-On Investment, and (ii) the Limited
Partners agree to fund the initial investment in such portfolio company based
upon the comprehensive initial Investment Memo, and (iii) the General Partner
provides the Limited Partners with a memorandum stating that such portfolio
company has met such milestones and goals (or other equivalent progress) and the
price of the securities in the Follow-On Investment and market capitalization of
the portfolio company meet the ranges specified in the initial
-▇▇-
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, then the Limited Partners Partners shall be required to fund
such Follow-On Investment up to the amount specified in the initial Investment
Memo.
Section 3.4 Capital Accounts.
-----------------
The Partnership shall establish and maintain a Capital Account for each
Partner. A Partner's Capital Account shall be (i) increased by (a) the amount
of such Partner's Capital Contributions, (b) such Partner's allocations of
Operating Income and Investment Gain pursuant to Sections 5.7.A and 5.7.B, and
(c) items of income or gain specially allocated to such Partner pursuant to
Section 5.8 or 5.9, (ii) decreased by (x) the amount of money and the fair
market value of any property distributed to such Partner by the Partnership, (y)
such Partner's allocations of Operating Loss and Investment Loss pursuant to
Sections 5.7.A and 5.7.C and (z) items of loss, deduction or expenditure
specially allocated to such Partner pursuant to Section 5.8 or 5.9, and (iii)
adjusted to reflect any liabilities that are assumed by such Partner or the
Partnership or that are secured by property contributed by or distributed to
such Partner, all in accordance with Sections 1.704-1(b)(2)(iv) and 1.704-2 of
the Treasury Regulations. Except as otherwise provided in the Treasury
Regulations, a transferee of an interest in the Partnership shall succeed to the
Capital Account of its transferor to the extent allocable to the transferred
interest. Notwithstanding any provision of this Agreement other than Section
5.4, the General Partner shall revalue Partnership properties, and make
corresponding adjustments to the Partners' Capital Accounts, as prescribed by
Section 1.704-1(b)(2)(iv)(f) of the Treasury Regulations in connection with any
contribution to or distribution by the Partnership of more than a de minimis
amount of money or other property in exchange for an interest in the Partnership
unless the General Partner reasonably determines that such revaluations and
adjustments are not necessary to reflect the economic interests of the Partners
in the Partnership. In addition, the book values of Partnership properties
shall be increased or decreased, as the case may be, to reflect any adjustments
to the adjusted tax bases of such properties pursuant to Section 734(b) or
Section 743(b) of the Code to the extent that such basis adjustments are taken
into account in determining Capital Account balances pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(m) and have not been reflected in
adjustments to the book values of such properties pursuant to the preceding
sentence of this Section 3.4.
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Section 3.5 Review or Modification of Capital Commitments.
----------------------------------------------
Each Partner acknowledges that it is currently lawful for it to invest in
the Partnership. Notwithstanding this acknowledgment and the provisions of this
Article III, no Partner shall be obligated to make any contribution of its
Capital Commitment if at the time such contribution is due (i) such Partner is
substantially likely to be prohibited from making investments in the Partnership
under any applicable federal or state law or regulations thereunder then in
effect, or (ii) if such Partner is a bank holding company, it has a significant,
pre-existing and continuing relationship with a Portfolio Company in which the
Partnership has proposed to invest (in each case, a "Modification Event"). In
the case of a Modification Event, the affected Partner shall advise the General
Partner of the specific terms of the Modification Event within five (5) Business
Days of receiving the call notice pursuant to Section 3.1. The General Partner
shall promptly notify all other Partners of the alleged Modification Event.
Unless (x) in the case of a Modification Event set forth in clauses (i) or (ii)
above, the Partner asserting such Modification Event shall, at the request of
the General Partner, have delivered to the General Partner an opinion from
counsel reasonably satisfactory to the General Partner confirming the existence
of such Modification Event or (y) in the case of a Modification Event set forth
in clause (ii) above, the affected Partner shall have provided the General
Partner with such information and material, including, at the request of the
General Partner an opinion of counsel reasonably satisfactory to the General
Partner confirming, in the sole discretion of the General Partner, the existence
of this Modification Event, the General Partner may, as of the date on which the
contribution at issue was due and upon fifteen (15) days notice to the affected
Partner, reduce the Capital Account and percentage of Contributed Capital of
such Partner by one fourth and correspondingly increase the Capital Account and
Percentage of Contributed Capital of each other Partner in a manner similar to
that provided in Section 3.6.B; provided, that the Partner asserting the
prohibition shall not be deemed a Defaulting Partner, as defined in Section 3.6,
for purposes of the provisions thereof.
Notwithstanding the provisions of this Agreement, the General Partner may
refuse to permit a Limited Partner to participate in an investment in a
Portfolio Company if, in the sole discretion of the General Partner, such
Limited Partner's participation would impair the ability of the Partnership or
the General Partner or make it impractical or inadvisable as a result of
regulatory or competitive considerations or otherwise to consummate or to
maintain the investment in the Portfolio Company. In this event, at the time of
providing call notices to the Limited Partners, the General Partner shall notify
the affected Limited Partner of its non-participation in the proposed investment
and give such Partner such information and material as the General Partner
determines is sufficient to warrant the non-participation of such Partner in the
investment. The decision of the General Partner to refuse a Limited Partner the
opportunity to participate in an investment shall be in the sole discretion of
the General Partner.
Section 3.6 Default in Capital Commitment.
------------------------------
Except as provided in Section 3.5, in the event a Partner fails to fund its
Capital Commitment as required under Sections 3.1-3.3 in a timely manner, and
such failure continues for ten (10) Business Days after written notice of such
failure from the General Partner (or for such longer period (not to exceed
twenty (20) business days) as the General Partner may in its sole discretion
permit under extraordinary circumstances), then such Partner which failed to
make payment shall be a Defaulting Partner, and the following provisions of this
Section 3.6 shall apply:
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A. Whenever the vote, consent or decision of the Partners is required or
permitted pursuant to this Agreement, any Defaulting Partner shall not be
entitled to participate in such vote or consent, or to make such decision, and
such vote, consent or decision shall be made as if such Defaulting Partner were
not a Partner. Notwithstanding this prohibition, any such vote, consent or
decision shall be binding upon such Defaulting Partner.
B. The Defaulting Partner shall not be required to make any further
Capital Contributions to the Partnership and there shall be released that
portion of a Defaulting Partner's unfunded Capital Commitment (provided that
such Defaulting Partner shall remain fully liable to the creditors of the
Partnership to the extent of the installment of the Capital Commitment with
respect to which the default occurred). Thereafter, the Defaulting Partner's
Percentage of Contributed Capital in all investments made by the Partnership in
Portfolio Companies after the date of default shall be zero, and the Percentages
of Contributed Capital of the remaining Partners shall be adjusted accordingly.
C. Except as set forth in this Section 3.6.C, the Defaulting Partner
shall not be entitled to receive any distribution of Operating Receipts or
Investment Receipts until the termination of the Partnership. The General
Partner shall establish a separate escrow account with a Financial Institution
into which will be deposited all of the distributions of Operating Receipts and
Investment Receipts that the Defaulting Partner would otherwise be entitled to
receive. Upon the liquidation of the Partnership, the Defaulting Partner will
be entitled to receive from the separate escrow account, an amount equal to the
lesser of (i) seventy-five percent (75%) of the distributions it was otherwise
entitled to receive with respect to investments in Portfolio Companies that were
consummated prior to the date of the Defaulting Partner's default (without the
addition of interest that accrued on the amounts held in the separate escrow
account) and (ii) its aggregate Capital Contributions to the Partnership reduced
by all distributions made to the Defaulting Partner prior to the date of
default. Any amounts remaining in the separate escrow account, including all
interest earned on such amounts, shall thereafter be distributed to the General
Partner to compensate the General Partner for any damages incurred as a result
of the default and then to the non-defaulting Limited Partners in proportion to
their respective Percentages of Contributed Capital recalculated as if the
Defaulting Partner were not a Partner of the Partnership. The Defaulting
Partner shall be allocated Operating Income and Loss and Investment Gain and
Loss only with respect to investments in Portfolio Companies that were
consummated prior to the date of the Defaulting Partner's default.
D. The provisions of Sections 3.6.B and C shall not apply more than once
to any Defaulting Partner.
E. No Defaulting Partner shall be entitled to assign its interest in the
Partnership in accordance with Section 8.3 without the consent of the General
Partner, which it may withhold in its sole discretion.
F. No right, power or remedy available to the General Partner in this
Section 3.6 shall be exclusive, and each such right, power or remedy shall be
cumulative and in addition to any other right, power or remedy available at law
or in equity. No course of dealing between the General Partner and any
Defaulting Partner, and no delay in exercising any right, power or remedy shall
operate as a waiver or otherwise prejudice the exercise of such right, power or
remedy.
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G. Notwithstanding the remaining provisions of Section 3.6, this Section
3.6 shall only apply to a Partner's default relating to a mandatory capital
contribution and not a discretionary capital contribution under Section 3.3 and
the other provisions relating thereto.
IV. BRIDGE FINANCING
-----------------
Section 4.1 Extension of Bridge Financing.
------------------------------
Solely in order to facilitate the making of investments in Portfolio
Securities as expeditiously as practicable with the most favorable pricing
reasonably available, the Partnership may from time to time provide interim
financing ("Bridge Financing") to one or more Portfolio Companies until
permanent financing is arranged. All such Bridge Financing shall be designated
as such by the General Partner at the time it is first provided. All Bridge
Financing will be senior to the permanent investment of the Partnership in such
Portfolio Company, and bear interest or carry other compensation at rates not
less favorable to the Partnership than those available from an unaffiliated
Financial Institution. The General Partner will use its best efforts to cause
Bridge Financing to be converted into Portfolio Securities, and if not so
converted, to be sold or refinanced as promptly as practicable, and in any event
will use its best efforts to cause such conversion, sale or refinancing to occur
within one year after such Bridge Financing is first provided by the
Partnership. Bridge Financing may be provided to any single Portfolio Company
only to the extent that the sum of the Partnership's investment in such
Portfolio Company, including Portfolio Securities, Bridge Financings and the
amount of any guarantees, shall not exceed the lesser of (i) fifteen percent
(15%) of the Partnership's aggregate Capital Commitments, or (ii) the remaining
unfunded Commitments as of the date of such Bridge Financing.
Section 4.2 Funding of Bridge Financing.
----------------------------
The Partnership may fund Bridge Financing by borrowing pursuant to Section
6.2.P from one or more Financial Institutions, by calling upon the Partners'
Capital Commitments in accordance with Section 3.2, or by guarantying
indebtedness incurred by the Portfolio Company with the written consent of Two-
Thirds in Interest of the Limited Partners of this Partnership, in each case
solely in order to facilitate the making of investments in Portfolio Securities
as expeditiously as practicable with the most favorable pricing reasonably
available. The proceeds of the sale, refinancing or other disposition of
Temporary Bridge Financing which has been funded by the call of Capital
Commitments shall, to the extent of the Partners' Capital Contributions
allocable thereto, be returned to the Partners in proportion to such Partners'
Capital Contributions allocable to such investment within five (5) days after
the receipt thereof by the Partnership. The Partners' Capital Commitments
remaining to be called shall thereafter include that portion of such allocable
Capital Contributions returned.
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Section 4.3 Permanent Bridge Financing.
---------------------------
If and to the extent that Temporary Bridge Financing is not converted into
Portfolio Securities or sold or refinanced within one year after it is provided,
it promptly shall be converted as of the end of such one year period into
financing ("Permanent Bridge Financing") on terms and in proportions not less
favorable to the Partnership, than those most recently offered by the
Partnership to prospective investors during the period that the financing
remained outstanding pursuant to Temporary Bridge Financing. If the Temporary
Bridge Financing was funded through borrowings by a Portfolio Company guaranteed
by the Partnership, the Partnership, shall purchase its portion of the Permanent
Bridge Financing as if it were a permanent investment in a Portfolio Company.
V. DISTRIBUTIONS; WITHHOLDING; VALUATION; ALLOCATIONS
--------------------------------------------------
Section 5.1 Withdrawal of Capital.
----------------------
No Partner shall have the right to withdraw capital from the Partnership
or, except as otherwise set forth in this Agreement and the Act, to receive any
distribution or return of its Capital Contribution.
Section 5.2 Distributions Prior to Liquidation.
-----------------------------------
A. Subject to Sections 5.3 and 5.4, and except to the extent deemed
necessary by the General Partner to reserve for Committed Investments pursuant
to 6.2.M, Operating Receipts for each fiscal year (or fractional portion
thereof) shall be distributed to the Partners in proportion to their respective
Percentages of Contributed Capital. Such distributions shall be made by the
General Partner within ninety (90) days after the close of each fiscal year and
at such other time or times as the General Partner shall determine.
B. Subject to Sections 5.3 and 5.4, and except to the extent deemed
necessary by the General Partner to reserve for Committed Investments pursuant
to 6.2.M, the General Partner shall, each calendar quarter on or before the
fifteenth (15/th/) day after the end of such quarter, make distributions of all
Investment Receipts and shall distribute such Investment Receipts as follows:
(1) First, to the Partners in proportion to their Percentages of Contributed
------
Capital, until such Partners have received from all distributions then or
theretofore made pursuant to this Section 5.2.B(1), on a cumulative basis,
an amount of distributions equal to the sum of (i) their Capital
Contributions Allocable to Liquidated Portfolio Securities and (ii) all
Management Fees that have been paid out of the Capital Contributions of the
Limited Partners to the Management Company as of any date on which a
distribution pursuant to this Section 5.2 will be made;
(2) Second, twenty percent (20%) to the Partners in proportion to their
-------
Percentages of Contributed Capital and eighty percent (80%) to the General
Partner until the General Partner has received pursuant to this Section
5.2.B(2) an amount of distributions equal to twenty percent (20%) of the
amounts distributed to the Partners in proportion to their Percentages of
Contributed Capital pursuant to (A) clause (i) of Section 5.2.B(1), but
only to the extent of the amount of Capital Contributions Allocable to
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Portfolio Securities attributable to expenses set forth in Sections
6.5.A(1) and (4) that have been allocated to a particular Portfolio
Security and (B) clause (ii) of Section 5.2.B(1); and
(3) Third, thereafter, eighty percent (80%) to the Partners in proportion to
------
their Percentages of Contributed Capital and twenty percent (20%) to the
General Partner.
For purposes of this Agreement, all amounts distributed to the General
Partner pursuant to Sections 5.2.B(2) and 5.2.B(3) (other than in proportion to
its Percentage of Contributed Capital) shall be referred to herein as Incentive
Distributions.
C. In addition to any other obligations hereunder, the General Partner
shall endeavor (if practical and reasonable to do so in light of the
circumstances of the Partnership) to distribute, if available, sufficient
amounts of Operating Receipts and/or Investment Receipts to the Partners in
accordance with this Article V to enable them to make timely payment of any
Federal, state, local and foreign income tax liabilities incurred by them or
their principals as a result of their participation in the Partnership.
D. As of any date on which the General Partner determines to make a
distribution of Investment Receipts, the General Partner shall determine,
pursuant to Section 5.6, the fair market value of each investment in a Portfolio
Company which has not been sold or disposed of. The extent to which the
aggregate fair market values of all such investments are less than the aggregate
cost bases of all such investments for book purposes shall constitute a "Deemed
Portfolio Loss". That portion of each Liquidated Portfolio Security equal to
the amount of Deemed Portfolio Loss allocated with respect thereto shall, upon
the deemed or actual sale of that Liquidated Portfolio Security, be deemed to
have been sold for an amount equal to the amount of Deemed Portfolio Loss and
shall be deemed to have a tax basis of zero, and the tax basis of the remaining
portion of the Liquidated Portfolio Security shall include the amount of such
Deemed Portfolio Loss.
E. If upon the liquidation of the Partnership the General Partner shall
have received as Incentive Distributions under Section 5.2B(3) (that have not
been recontributed to the Partnership pursuant to Section 5.3) an aggregate
amount in excess of the amount the General Partner would have received as
Incentive Distributions pursuant to Section 5.2B(3), including liquidating
distributions, had the entire amount of Investment Receipts actually received by
the Partnership been received by the Partnership on the date of liquidation of
the Partnership, then the General Partner shall, to the extent of all
distributions received as Incentive Distributions pursuant to Section 5.2B(3)
(that have not been recontributed to the Partnership pursuant to Section 5.3),
pay to the Partners in proportion to their Percentages of Contributed Capital
such excess.
F. The General Partner shall establish in its name, but for the benefit
of the Partners, a separate bank account at a Financial Institution (the "Escrow
Account"), in which it will maintain an amount equal to the lesser of (i)
twenty-five percent (25%) of all Incentive Distributions paid to the General
Partner, and (ii) the amount required to be added to the fair market value of
the existing Portfolio Securities of the Partnership, determined pursuant to
Section 5.6, so that the resulting total exceeds the total amount of Capital
Contributions allocable to such investments by twenty-five percent (25%). Upon
the liquidation of the Partnership, the General Partner shall distribute to the
Partners from the Escrow Account, in proportion to their Percentages of
Contributed Capital, that portion of the escrowed funds
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equal to the General Partner's required payment under Section 5.2.E, or if such
required payment is in excess of such escrowed funds, the total amount held in
such Escrow Account plus an amount, paid directly by the General Partner, that
when added to the escrowed funds equals the General Partner's required payment
pursuant to Section 5.2.E. Any funds held in the Escrow Account upon liquidation
of the Partnership and after the required payment pursuant to this Section and
Section 5.2.E shall be distributed immediately to the General Partner. The
General Partner will direct the investment of amounts held in the Escrow
Account, which shall in any event be made solely in investments qualifying as
Temporary Investments. All income earned on the amounts retained in the Escrow
Account shall be distributed at the end of each calendar quarter immediately to
the General Partner.
Section 5.3 Distributions Upon Liquidation.
-------------------------------
Upon the liquidation of the Partnership, the assets of the Partnership
shall first be applied to the payment of, or the establishment of adequate
reserves or other provision for the payment of, the debts and obligations of the
Partnership. Thereafter, there shall be made a final allocation of Operating
Income or Loss and Investment Gain or Loss, as the case may be, and other items
to the Partners' Capital Accounts in accordance with Section 5.7. If the
General Partner has a negative balance in its Capital Account after such final
allocation, it shall contribute to the Partnership an amount of cash equal to
the excess of such negative balance over the amount that it is required to pay
to the Partners pursuant to Section 5.2.E. Notwithstanding the foregoing, the
General Partner's obligation to pay such excess pursuant to this Section 5.3
shall not inure to the benefit of, or be invoked or enforced by or for the
benefit of, any creditor who has otherwise contractually obligated itself to
look solely to all or a part of the assets of the Partnership and not to the
assets of any Partner for satisfaction of any debt owed or owing to that
creditor by the Partnership. The assets of the Partnership, including any
Portfolio Securities, whether or not such securities are Marketable Securities
(or the proceeds of sales or other dispositions in liquidation of assets of the
Partnership) remaining after the payment or other provision for the
Partnership's debts and obligations shall then be distributed to the Partners in
proportion to the positive balances in their Capital Accounts, determined after
the final allocation of Operating Income or Loss and Investment Gain or Loss,
and of other items to Capital Accounts has been made; provided that the name of
the Partnership shall be transferred with a value of $1.00 ascribed thereto, to
the General Partner. For purposes of making this distribution, such assets
shall be valued pursuant to Section 5.6. Amounts reserved or set aside, in
connection with the Partnership's liquidation, for the payment of Partnership
debts and obligations, which are not utilized for such payment, shall be
distributed to the Partners in the same proportions that such amounts would have
been distributed hereunder if distributed upon the Partnership's liquidation, as
soon as practicable.
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Section 5.4 Distributions of Securities in Kind.
------------------------------------
A. The General Partner shall distribute to the Partners as an Investment
Receipt any Portfolio Securities that become Marketable Securities promptly upon
their becoming Marketable Securities, when such a distribution would serve the
best interests of the Partnership. Factors to be considered by the General
Partner in making such a determination shall include (i) the fiduciary
obligations owed to the stockholders of the issuer of such Marketable Securities
by any Affiliate of the General Partner who may serve as a director of such
issuer, and (ii) whether retention of such Marketable Securities shall serve the
best interests of the Partnership by maintaining control of or influence over
the issuer of the securities, stabilizing the market for such securities until
such time as the securities are either distributed to the Partners pursuant to
this Section 5.4 or are sold or otherwise disposed of or facilitating subsequent
offerings by the issuer which shall include such Marketable Securities. The
General Partner shall notify the Limited Partners each time a Portfolio Security
becomes a Marketable Security. The General Partner shall not distribute
Portfolio Securities that are not Marketable Securities at any time other than
upon the liquidation of the Partnership.
B. With respect to securities distributed in kind to the Partners in
liquidation or otherwise, (i) any unrealized appreciation or unrealized
depreciation in the values of such securities shall be deemed to be realized by
the Partnership immediately prior to the liquidation or other distribution
event; and (ii) such appreciation or depreciation shall be allocated to the
Partners as part of the allocation of Investment Gain or Loss, as the case may
be, for the year of the distribution in accordance with Section 5.7 hereof, and
treating any property so distributed as a distribution of an amount in cash
equal to the fair market value of the property determined pursuant to Section
5.6. For the purposes of this Section 5.4.B, "unrealized appreciation" or
"unrealized depreciation" shall mean the difference between the fair market
value of such assets and the adjusted basis of such assets for federal income
tax purposes (or, in the case of any asset that is reflected on the books of the
Partnership at a value that is different from the Partnership's federal tax
basis in such asset in compliance with the Treasury Regulations, the value of
such asset as shown on the Partnership's books). This Section 5.4.B is merely
intended to provide a rule for allocating unrealized gains and losses upon
liquidation or other distribution event, and nothing contained in this Section
5.4.B or elsewhere in this Agreement is intended to treat or cause such
distributions to be treated as sales for value.
C. If any Partner would otherwise receive a distribution of an amount of
any securities that would cause such Partner to own or control in excess of the
amount of such securities that it may lawfully own or control or which, by
reason of any legal or contractual restriction, the General Partner may not
distribute to such Partner, the Partner shall, solely for purposes of this
Agreement, be treated as if it had received such securities as a distribution in
kind pursuant to Section 5.4.B. The General Partner shall, at the written
request of such Partner and to the extent it is practicable to do so, dispose of
all or any portion of such securities on behalf of and as the agent for such
Partner and distribute the proceeds of such disposition to such Partner;
provided that such Partner shall bear all of the reasonable expenses (including,
without limitation, underwriting costs) of such disposition. In the
alternative, at the request of such Partner, the General Partner shall use
reasonable efforts to recapitalize the Portfolio Company so as to distribute to
such Partner non-voting securities. In either event, any discrepancy between
the actual gain or loss recognized upon the sale or other disposition of
Portfolio Securities (including Marketable Securities) and the unrealized
appreciation or unrealized depreciation in the values thereof
-22-
as determined under Section 5.4.B, shall constitute gain or loss of the Partner
to whom the securities were constructively distributed, and shall in no event
constitute gain or loss to the Partnership.
D. 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, including legends as to applicable federal
or state securities laws or other legal or contractual restrictions, and may
require any Partner to which securities are to be distributed to agree in
writing that such securities will not be transferred except in compliance with
such restrictions and applicable law.
Section 5.5 Withholding.
------------
Each Partner hereby authorizes the Partnership to withhold and to pay over
any withholding taxes payable by the Partnership, to the extent required by
applicable law, as a result of such Partner's status as a Partner hereunder. If
and to the extent that the Partnership shall be required under applicable law to
withhold any such 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 is required to be paid, which payment shall be deemed to be a
distribution to the extent that the Partner is then entitled to receive a
distribution. The amount of any distribution to which such Partner would
otherwise be entitled shall be reduced by the amount of such deemed
distribution. To the extent that the aggregate of such payments to a Partner
for any period exceeds the distributions to which such Partner is entitled for
such period, the amount of such excess shall be considered a loan from the
Partnership to such Partner, with interest at the Treasury Rate, until
discharged by such Partner by repayment, which may be made out of distributions
to which such Partner would otherwise be subsequently entitled. The
withholdings referred to in this Section 5.5 shall be made at the maximum
statutory rate applicable to such Partner under the applicable tax law unless
the General Partner shall have received either (i) an opinion of counsel,
satisfactory to the General Partner, to the effect that a lower rate is
applicable, or that no withholding is applicable or (ii) any form authorized by
the relevant taxing authority signed by a Partner that establishes that no
withholding is required for such Partner. Notwithstanding the foregoing, the
Partnership shall not withhold any amount from distributions in any taxable year
of the Partnership with respect to a Limited Partner, provided that (i) such
Limited Partner delivers to the Partnership a properly executed withholding tax
exemption certificate in the form provided by the General Partner (or such form
as the Internal Revenue Service may require) for such year and (ii) there is no
charge in law regarding withholding obligations with respect to foreign persons
which, in the opinion of counsel to the Partnership, would require withholding
with respect to such Partner.
Section 5.6 Valuation.
----------
For purposes of this Agreement except as specifically provided in Sections
3.7.C, and 8.5, securities and other property of the Partnership shall be valued
as follows:
A. The Portfolio Securities of the Partnership shall be valued by the
General Partner pursuant to subparagraphs B, C, D and E hereof (i) at the time
of any distribution pursuant to Section 5.2 in order to determine the amount of
any Deemed Portfolio Loss, (ii) at the time of any distribution pursuant to
Section 5.4, (iii) upon the distribution of Partnership assets in liquidation
pursuant to Section 5.3 and (iv) annually pursuant to Section 10.3.
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B. Marketable Securities shall (i) if traded on a national securities
exchange, be valued at the average of their last sales prices on such exchange
on which such Marketable Securities shall have traded on the last ten (10)
trading days on which such Marketable Securities were traded immediately
preceding the date of determination, or (ii) if the trading of such Marketable
Securities is reported through the National Association of Securities Dealers
Automated Quotation System, such Marketable Securities shall be valued at the
average of the last closing "bid" prices as shown by the National Association of
Securities Dealers Automated Quotation System on the last ten (10) trading days
on which such Marketable Securities were traded immediately preceding the date
of determination.
C. Except as provided in subparagraph E below, all property other than
Marketable Securities shall be valued by the General Partner in such manner as
it may determine in good faith. Factors considered in valuing individual
securities will include purchase price, prices received in recent significant
private placements of securities of the same issuer, transfer restrictions on
the securities, prices of securities of comparable public and private companies
engaged in similar businesses and changes in the financial condition and
prospects of the issuer.
D. If within thirty (30) days after receipt of notice of any valuation
made pursuant to subparagraph C above Two-Thirds in Interest of the Limited
Partners shall so request, the General Partner shall obtain at the expense of
the Partnership a valuation of any securities (other than Marketable Securities
subject to valuation under subparagraph B) or other property from an independent
firm of investment bankers of nationally recognized standing selected by the
General Partner and approved by Two-Thirds in Interest of the Limited Partners,
such approval not to be unreasonably withheld. The decision of such firm shall
be binding on all Partners. Each distribution in kind of securities other than
Marketable Securities subject to valuation under subparagraph B shall be
accompanied by a notice from the General Partner reminding the Limited Partners
of their right to require an independent valuation under this subparagraph D.
E. Upon liquidation of the Partnership, all assets which will be
distributed to the Partners in liquidation, other than Marketable Securities
subject to valuation under subparagraph B above, shall, upon request by Two-
Thirds in Interest of the Limited Partners, be valued by an independent firm of
investment bankers of nationally recognized standing selected by the General
Partner. The decision of such firm as to the liquidation value of all such
assets shall be binding on all Partners.
Section 5.7 Allocations of Operating Income and Loss and Investment
-------------------------------------------------------
Gain and Loss.
--------------
A. Subject to Sections 5.8 and 5.9, all Operating Income and Operating
Loss of the Partnership shall be allocated to the Partners in proportion to
their Percentages of Contributed Capital.
B. Subject to Sections 5.8 and 5.9, an Investment Gain for any fiscal
year or other accounting period of the Partnership shall be allocated as follows
and in the following order of priority as of the close of such fiscal year or
other accounting period:
(1) First, to the General Partner until there has been allocated on a
------
cumulative basis pursuant to this Section 5.7.B(1) for all fiscal years and
other accounting periods of the Partnership an amount of Investment Gain
equal to the amount of Investment Loss that has been allocated pursuant to
Section 5.7.C(3) for all fiscal years and other accounting periods of the
Partnership;
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(2) Second, to the Partners, in proportion to their Percentages of Contributed
------
Capital, until there has been allocated on a cumulative basis pursuant to
this Section 5.7.B(2) for all fiscal years and other accounting periods of
the Partnership an amount of Investment Gain equal to the amount of
Investment Loss that has been allocated pursuant to Section 5.7.C(2) for
all fiscal years and other accounting periods of the Partnership;
(3) Third, to the Partners, in proportion to their Percentages of Contributed
-----
Capital, until there has been allocated on a cumulative basis for all
fiscal years and other accounting periods of the Partnership pursuant to
this Section 5.7.B(3), an amount of Net Investment Gain equal to the sum of
(i) the amount of Deemed Portfolio Loss that has been included in the
determination of Capital Contributions Allocable to Liquidated Portfolio
Securities for purposes of making distributions pursuant to Section 5.2.B,
and (ii) the amount of distributions made with respect to Management Fees
pursuant to clause (ii) of Section 5.2.B(1);
(4) Fourth, eighty percent (80%) to the General Partner and twenty percent
------
(20%) to the Partners in proportion to their Percentages of Contributed
Capital until the General Partner has been allocated on a cumulative basis
for all fiscal years and other accounting periods of the Partnership
pursuant to this Section 5.7.B(4), in addition to allocations made to the
General Partner pursuant to this Section 5.7 in proportion to its
Percentage of Contributed Capital, an amount of Net Investment Gain of the
Partnership equal to the amount distributed to the General Partner pursuant
to Section 5.2.B(2);
(5) Fifth, thereafter with respect to the remaining Net Investment Gain, eighty
-----
percent (80%) to the Partners, in proportion to their Percentages of
Contributed Capital, and twenty percent (20%) to the General Partner.
C. Subject to Sections 5.8 and 5.9, an Investment Loss for any fiscal
year or other accounting period of the Partnership shall be allocated as follows
and in the following order of priority as of the close of such fiscal year or
other accounting period:
(1) First, to the extent of the Net Investment Gain, if any, that has been
-----
allocated hereunder for all prior fiscal years and other accounting
periods, to the Partners in proportion to the respective amounts, if any,
by which (i) their allocations of Net Investment Gain for all such prior
years and other periods exceed (ii) their Target Allocations as of the
close of the fiscal year or other period for which an Investment Loss is
then being allocated;
(2) Second, to the Partners, in proportion to their Percentages of Contributed
------
Capital, until the Limited Partners' Capital Accounts have been reduced to
zero; and
(3) Third, thereafter, to the General Partner.
-----
Section 5.8 Special Provisions.
-------------------
The following provisions shall be complied with notwithstanding any
provision of this Agreement other than Section 5.9:
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A. If any Partner unexpectedly receives any adjustment, allocation or
distribution described in Sections 1.704-1(b)(2) (ii)(d)(4), 1.704-
1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6) of the Treasury Regulations which
causes it to have an, or increases the amount of its, Adjusted Capital Account
Deficit, items of Partnership income and gain shall be specially allocated to
such Partner in an amount and manner sufficient to eliminate, to the extent
required by the Treasury Regulations, such Partner's Adjusted Capital Account
Deficit as quickly as possible, provided that an allocation pursuant to this
Section 5.8.A shall be made to a Partner only if and to the extent that such
Partner would have an Adjusted Capital Account Deficit after all other
allocations provided for in this Article V have been tentatively made as if this
Section 5.8.A were not in this Agreement. This Section 5.8.A is intended to
constitute a "qualified income offset" as defined in Section 1.704-
1(b)(2)(ii)(d) of the Treasury Regulations.
B. Notwithstanding Section 5.7.C, an allocation of Operating Loss or
Investment Loss shall not be made to a Partner to the extent that such
allocation would cause such Partner to have an Adjusted Capital Account Deficit.
An allocation that would be made to a Partner but for this Section 5.8.B shall
instead be made to the other Partners to the extent, and in the proportions,
that they could then be made such allocation without causing them to have
Adjusted Capital Account Deficits. Any excess allocation of Operating Loss or
Investment Loss shall be made to the General Partner.
C. The allocations set forth in Sections 5.8.A, 5.8.B, and 5.9 hereof
(the "Regulatory Allocations") are intended to comply with certain provisions of
the Treasury Regulations. Notwithstanding any other provision of this Article V,
the Regulatory Allocations shall be taken into account in making allocations of
other items of income, gain, loss, deduction and expenditure among the Partners
so that, to the extent possible consistent with the Code and the Treasury
Regulations, and on a cumulative basis, the respective net amounts of such
allocations of other items and the Regulatory Allocations to the Partners are
equal to the respective net amounts that would have been allocated to the
Partners had no Regulatory Allocations been made. The General Partner shall
apply this Section 5.8.C at such times, in such order and in such manner as it
determines, in its sole discretion, is likely to minimize any economic
distortions caused by the Regulatory Allocations.
D. If contributions that would otherwise be required pursuant to Section
3.1 or 3.2 with respect to the interest in the Partnership of a particular
Limited Partner are excused hereunder or by law, such interest shall be treated
for purposes of this Article V as an interest in a separate portfolio of assets
in which, subject to all other provisions of this Agreement, only such Limited
Partner (or his assignees or legatees) and the General Partner shall be entitled
to participate (as provided in this Article V). Such separate portfolio shall
consist of such Limited Partner's pro rata share (by allocable Capital
Contribution) of each Portfolio Security the Partnership's interest in which
was, or the assets of which were, acquired in part with capital contributions of
such Limited Partner. Such Limited Partner (and his assignees and legatees)
shall have no interest in the Partnership or its assets to the extent not
included in, and shall have no right to participate in the results of the
Partnership to the extent not attributable to, such separate portfolio. A
separate portfolio shall be charged with portions of the Partnership's expenses,
liabilities, costs and reserves in such manner as the General Partner reasonably
determines to be fair and equitable.
E. Income, gain, loss and deduction with respect to property contributed
to the Partnership by a Partner shall be shared among the Partners so as to take
account of the variation between the basis
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of the property to the Partnership and its fair market value at the time of
contribution in accordance with the principles of Section 704(c) of the Code.
Section 5.9 Special Provisions in the Event of Borrowings or a
--------------------------------------------------
Section 754 Election.
---------------------
A. If the Partnership incurs any borrowings, the Partnership (i) shall
allocate any "non-recourse deductions," computed and determined in accordance
with Sections 1.704-2(b)(1), 1.704-2(c) and 1.704-2(j) of the Treasury
Regulations, it may have twenty percent (20%) to the General Partner and eighty
percent (80%) to the Partners in proportion to their Percentages of Contributed
Capital, (ii) shall allocate any "partner non-recourse deductions," computed and
determined in accordance with Sections 1.704-2(i)(1), 1.704-2(i)(2) and 1.704-
2(j) of the Treasury Regulations, it may have so as to comply with Section
1.704-2(i) of the Treasury Regulations and (iii) shall make such allocations as
are necessary to comply with the "minimum gain chargeback" provisions of
Sections 1.704-2(f), 1.704-2(i) and 1.704-2(j) of the Treasury Regulations,
taking into account all exceptions provided by such provisions to the
applicability of this clause (iii).
B. To the extent an adjustment to the adjusted tax basis of any asset of
the Partnership pursuant to Section 734(b) or Section 743(b) of the Code is
required, pursuant to Section 1.704-1(b)(2)(iv)(m) of the Treasury Regulations,
to be taken into account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases the basis of the asset), and such gain or loss shall be specially
allocated to the Partners in a manner that is consistent with the manner in
which their Capital Accounts are required to be adjusted pursuant to Section
1.704-1(b)(2)(iv)(m) of the Treasury Regulations.
VI. MANAGEMENT; PAYMENT OF EXPENSES
-------------------------------
Section 6.1 Description of General Partner.
------------------------------
@Ventures Partners III, LLC, a limited liability company comprised of ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇ and CMGI as its members, is the General Partner of the Partnership.
Section 6.2 Management by the General Partner.
---------------------------------
The management, policy and operation of the Partnership shall be vested
exclusively in the General Partner who shall perform all acts and enter into and
perform all contracts and other undertakings which it deems necessary or
advisable to carry out any and all of the purposes of the Partnership. Without
limiting the foregoing general powers and duties, and except as is otherwise
expressly set forth herein, the General Partner is hereby authorized and
empowered on behalf of the Partnership and, as relevant herein, is required:
A. To enter into a Management Contract with the Management Company on the
terms, including those pertaining to payment of the Management Fee, set forth in
Exhibit A attached hereto;
---------
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provided that such Contract may not be amended without the written consent of
Two-Thirds in Interest of the Limited Partners unless such Contract is amended
to increase the Management Fee, in which case unanimous consent of the Limited
Partners shall be required in accordance with Section 12.3.
B. To identify investment opportunities for the Partnership, negotiate
and structure the terms of such investments, arrange additional financing needed
to consummate such investments and monitor such investments.
C. To invest the assets of the Partnership in the securities of any
organization, domestic or foreign, in accordance with Article III and the other
terms and provisions of this Agreement, without other limitation as to kind and
without other limitation as to marketability of the securities, and pending such
investment, to invest the assets of the Partnership in Temporary Investments.
D. To exercise all rights, powers, privileges and other incidents of
ownership with respect to the Portfolio Securities, including, without
limitation the voting of such Portfolio Securities, the approval of a
restructuring of an investment, participation in arrangements with creditors,
the institution and settlement or compromise of suits and administrative
proceedings, and other similar matters.
E. To sell, transfer, liquidate or otherwise terminate investments made
by the Partnership.
F. To employ or consult brokers, accountants, attorneys, or specialists
in any field of endeavor whatsoever, including such persons or firms who may be
Partners, provided, however, that no Affiliate of the General Partner may be
hired or employed without the approval of Two-Thirds in Interest of the Limited
Partners.
G. To deposit any funds of the Partnership in any bank or trust company
or money market fund provided that, in the case of any bank or trust company
such bank or trust company qualifies as a Financial Institution and in the case
of any money market fund such fund would qualify as a money market fund in which
the Partnership may make a Temporary Investment, and to entrust to such bank or
trust company any of the securities, monies, documents and papers belonging to
or relating to the Partnership; provided, however, that from time to time, in
order to facilitate any transaction, any of the said securities, monies,
documents and papers belonging to or relating to the Partnership may be
deposited in and entrusted to any brokerage firm that is a member of the New
York Stock Exchange and which has minimum net capital of $10 million as
calculated in accordance with the Securities Exchange Act of 1934.
H. To determine, settle and pay all expenses, debts and obligations of
and claims against the Partnership and, in general, to make all accounting and
financial determinations and decisions.
I. To enter into, make and perform all contracts, agreements and other
undertakings as may be determined to be necessary or advisable or incident to
the carrying out of the foregoing objectives and purposes, the execution thereof
by the General Partner to be conclusive evidence of such determination.
J. To execute all other instruments of any kind or character which the
General Partner determines to be necessary or appropriate in connection with the
business of the Partnership, the execution thereof by the General Partner to be
conclusive evidence of such determination.
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K. With the consent of a Majority in Interest of Limited Partners of the
Partnership, to provide Bridge Financing on the terms and subject to the
conditions set forth in Section 4.1 to Portfolio Companies and to borrow funds
and provide guarantees in the name and on behalf of the Partnership in
connection therewith solely in order to facilitate or expedite the closing of
investments in Portfolio Securities.
L. To make Portfolio Company Investments and Follow-on Investments in
Portfolio Companies from Capital Contributions called from the Partners and from
Operating Receipts and Investment Receipts during and after the Commitment
Period, in each case in accordance with Article III.
M. To make Committed Investments in Portfolio Companies after the end of
the Commitment Period from Capital Contributions called from the Partners
pursuant to Article III. The General Partner shall notify the Limited Partners
at the end of the Commitment Period of any Committed Investments of the
Partnership described in clause (i) of the definition thereof. In addition, any
Committed Investment of the Partnership described in clause (i) of the
definition thereof, shall be consummated within six months of the end of the
Commitment Period. The aggregate amount of Committed Investments shall not
exceed the lesser of (x) the uncalled Capital Commitments as of the last day of
the Commitment Period reduced by Capital Contributions used to make Follow-on
Investments after the end of the Commitment Period or (y) fifteen percent (15%)
of the Capital Commitments of the Partnership. Except upon the approval of Two-
Thirds in Interest of the Limited Partners, no Committed Investment may be made
by the Partnership after the third anniversary of the last day of the Commitment
Period.
N. Subject to Section 6.2.O and with the consent of a Majority in
Interest of Limited Partners of the Partnership, to guarantee obligations of
Portfolio Companies, provided that the sum of any such guarantee, the
Partnership's investment in Portfolio Securities of such Portfolio Company and
the amount of Bridge Financing made by the Partnership at any one time shall not
exceed fifteen percent (15%) of the aggregate Capital Commitments of the
Partnership, exclusive of guarantees made in connection with Temporary Bridge
Financing.
O. To take such steps as the General Partner shall consider necessary or
appropriate in its sole discretion to cause the Partnership to qualify as a
Venture Capital Operating Company as of the date of the Partnership's first
acquisition of Portfolio Securities and at all relevant times thereafter.
P. With the consent of a Majority in Interest of Limited Partners of the
Partnership, to cause the Partnership or one or more corporate subsidiaries of
the Partnership to borrow funds (i) to purchase Portfolio Securities pending the
receipt of Capital Contributions called from the Partners pursuant to Section
3.1 or (ii) to provide Bridge Financing to a Portfolio Company pursuant to
Section 4.2; provided, however, that the Partnership shall not borrow funds as
provided in this Section 6.2.P, if as a result of such borrowing UBTI would be
generated to Tax-Exempt Partners; and provided, further, that any borrowing
shall be on terms that are no less favorable to such corporate subsidiary than
those applicable to loans extended by the lender to borrowers comparable to such
corporate subsidiary, and that the General Partner shall cause the corporate
subsidiary to retire this indebtedness with such Capital Contributions
immediately upon receipt thereof.
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Section 6.3 Powers of Limited Partners.
--------------------------
The Limited Partners shall not participate in the control of the
Partnership and shall have no authority to act for or bind the Partnership.
Section 6.4 Continuity Mode.
---------------
If during the Commitment Period, or during any eighteen month period after
the end of the Commitment Period, both ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇
cease to be members of either the General Partner or the Management Company or
otherwise cease to be actively involved in the business thereof (such event
hereinafter referred to as a "Triggering Event"), prompt notice of such
Triggering Event shall be given to all Limited Partners. At any time within
ninety (90) days after receipt of notice of a Triggering Event, Two-Thirds in
Interest of the Limited Partners may by an election in writing determine to put
the Partnership in a Continuity Mode. While in a Continuity Mode (i) the
General Partner shall only be permitted to retain the investments of the
Partnership and to make further investments solely in (x) Temporary Investments,
(y) securities of companies as to which the Partnership had an existing legal
commitment to make an investment on the date the Partnership was put in the
Continuity Mode and (z) investments in current Portfolio Companies being
considered on the date the Partnership was placed in a Continuity Mode, and (ii)
the General Partner shall not be permitted to call for payment of any remaining
installments of Capital Commitments except for the purpose of funding investment
commitments pursuant to (y) and (z) above and to pay current expenses of the
Partnership pursuant to Section 6.6 of this Agreement. Except as hereinabove
expressly provided, from and after the date the Partnership enters the
Continuity Mode, the General Partner shall continue to act on behalf of the
Partnership to perform the functions of the General Partner and to have all the
rights and privileges of the General Partner hereunder. If within sixty (60)
days after commencement of the Continuity Mode (or such shorter period of time
as may be agreed to by Two-Thirds in Interest of the Limited Partners) Two-
Thirds in Interest of the Limited Partners do not by an election in writing
remove the General Partner or dissolve the Partnership, the Continuity Mode
shall automatically terminate and all decisions with respect to the management
and operation of the Partnership will again be made by the General Partner in
accordance with the terms of this Agreement. As provided in the Management
Contract, the Management Fee shall be reduced by one half while the Partnership
is in the Continuity Mode.
Section 6.5 Payment of Fees and Expenses.
----------------------------
Fees and expenses incurred with respect to the business of the Partnership
shall be payable as follows:
A. Subject to the provisions of Section 6.5.D, the Partnership shall be
responsible for and shall pay all fees and reasonable expenses not specified in
subparagraph B as being the responsibility of the Management Company, including
without limitation:
(1) out-of-pocket expenses incurred and fees paid by the Partnership or the
General Partner in connection with the formation of the Partnership and the
offering and distribution of interests therein to
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the Limited Partners in an amount not in excess of $200,000 (when
aggregated with amounts paid by the Domestic Fund);
(2) any government or regulatory filings, returns or reports, including without
limitation fees and expenses for annual reports and foreign qualification
certificates;
(3) expenses incurred in connection with the administration of the Partnership
including without limitation, the Management Fee and fees paid to
consultants, custodians, outside counsel, accountants, agents, investment
bankers and other similar outside advisors;
(4) unreimbursed fees and out-of-pocket costs of acquiring, holding or selling,
Temporary Investments, Portfolio Securities or Bridge Financing, whether or
not such transactions close, including fees and expenses of consultants,
outside counsel and accountants and similar outside advisors in connection
with identifying, evaluating, structuring and consummating potential
investments by the Partnership and recordkeeping expenses and finders',
placement, brokerage and other similar fees; provided that with respect to
consummated investments, it is expected, and the Management Company will
use its reasonable best efforts to ensure, that such fees and expenses paid
by the Partnership will be reimbursed by the Portfolio Company in which the
investment is made;
(5) out-of-pocket costs of reporting to the Limited Partners;
(6) any taxes, fees or other governmental charges levied against the
Partnership or on its income or assets or in connection with its business
or operations;
(7) costs of litigation or other matters that are the subject of
indemnification pursuant to Section 9.3; and
(8) costs of winding-up and liquidating the Partnership.
B. The Management Company, so long as the Management Contract is in
effect, shall be responsible for and shall pay all of its out-of-pocket expenses
and those of the General Partner, including expenses which relate to salaries,
office space, supplies and other facilities of their businesses except as set
forth in Section 6.5.A(4).
C. The Management Company shall serve as the management company of the
Partnership in accordance with the terms of the Management Contract, and shall
be entitled to receive a Management Fee in the amount and payable in the manner
provided in such Contract.
D. The amount of any unreimbursed fees and expenses incurred directly in
connection with a proposed or consummated investment in a Portfolio Company and
payable by the Partnership under subparagraph A shall be allocated among the
Partnership, the Domestic Fund and CMGI in proportion to the amount which would
have been or which was invested by each.
E. Subject to Section 6.2.O, any Break-Up Fee payable to the Partnership,
the General Partner, the Management Company or their respective Affiliates shall
be paid as follows. An amount equal to the aggregate unreimbursed fees and
expenses paid by the Partnership, the General Partner, the
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Management Company or their Affiliates which were specific to the transaction
giving rise to such fee shall be paid to each such entity in proportion to the
fees and expenses incurred by it. The balance of any such Break-Up Fee shall be
paid to the Management Company; provided that one-half of the remaining Break-Up
Fee shall be credited against the Management Fee payable by the Partnership,
@Ventures III and CMGI in subsequent periods in proportion to their respective
aggregate capital commitments.
F. The General Partner, the Management Company and their respective
Affiliates shall be entitled to receive management, directors', consulting and
other similar fees and compensation from Portfolio Companies; provided that the
amount of such fees and other compensation is reasonable in relation to the work
involved and bears a reasonable relation to fees and compensation charged for
similar work by third parties. One-half of such fees shall be credited against
the Management Fee payable by the Partnership, the Domestic Fund and CMGI, in
proportion to their respective aggregate capital commitments, and if such
portion of such fees exceeds the Management Fee, such excess shall be credited
against the Management Fee payable by the Partnership, the Domestic Fund and
CMGI in subsequent periods in proportion to their respective aggregate capital
commitments. To the extent such amounts exceed total future installments of the
Management Fee, they shall be paid to the Partnership, the Domestic Fund and
CMGI in proportion to their respective aggregate capital commitments and
included in their respective Operating Receipts.
VII. OTHER ACTIVITIES OF PARTNERS; CO-INVESTMENT OBLIGATION
------------------------------------------------------
Section 7.1 Commitment of General Partner.
-----------------------------
The General Partner hereby agrees to use its best efforts in furtherance of
the purposes and objectives of the Partnership and to devote to such purposes
and objectives such of its time as shall be necessary for the effective
management of the affairs of the Partnership. During the Commitment Period,
each of the members of the General Partner will devote substantially all of his
business time to the affairs of the Partnership, the Domestic Fund and the CMGI
Funds and to the affairs of the Prior Funds and the Management Company (solely
with respect to its responsibilities to the Partnership, to the Domestic Fund
and to the CMGI Funds and to Prior Funds); provided that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be permitted to devote such business time to the affairs
of CMGI and its subsidiaries as each of them deems necessary to fulfill his
duties as an executive officer of CMGI. Following expiration of the Commitment
Period, each of the members of the General Partner shall devote to the
Partnership such time as may be reasonably necessary to manage the assets of the
Partnership for the benefit of the investors therein.
Subject to the other provisions of this Agreement, the General Partner and
any of its Affiliates (i) may act as a director, officer, employee or advisor of
any corporation, a trustee of any trust, or a partner of any partnership; (ii)
may receive compensation for his services as an advisor with respect to, or
participation in profits derived from, the investments of any such corporation,
trust or partnership; and (iii) may, subject to the time commitments as set
forth above, acquire, invest in, hold and sell securities of any entity.
Neither the Partnership nor any other Partner shall have by virtue of this
Agreement, any right, title or interest in or to such other corporation, trust,
partnership or investment.
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Section 7.2 Opportunity to Participate in Future Investment Vehicles.
--------------------------------------------------------
The General Partner will not and it will cause its members and other
Affiliates not to, without the consent of Two-Thirds in Interest of the Limited
Partners, create, manage, solicit funds or indications of interests for, sponsor
or act as investment advisor to any limited partnership or other investment
vehicle, other than the Domestic Fund, the CMGI Funds, the Partnership and CMGI
(a "New Investment Vehicle") until the earlier of (i) the end of the Commitment
Period, and (ii) the commitment by the Partnership of at least seventy-five
percent (75%) of its Capital Commitments. In the event that prior to the
termination of the Partnership, the General Partner or any of its Affiliates
creates, manages, sponsors or acts as investment advisor to another limited
partnership or other investment vehicle with primary investment objectives and
policies substantially similar to those of the Partnership, each Partner will be
offered an opportunity to invest in such limited partnership or other investment
vehicle pursuant to the terms of the offering of interests in such limited
partnership or other investment vehicle on terms no less favorable than those
offered to other investors in such vehicles. Each Limited Partner shall be
offered the opportunity to invest at least its pro rata share in such limited
partnership or other investment vehicle an amount equal to its Capital
Commitment divided by the sum of the Capital Commitments of the Partnership and
the Domestic Fund on the same terms and conditions as offered to the other
investors.
Section 7.3 Dealings with Limited Partners.
------------------------------
The General Partner shall not enter into any agreement, contract,
modification or undertaking of any kind with any Limited Partner that would
grant rights in the Partnership as a Limited Partner by the acquisition of a
Capital Commitment that are more favorable than those offered to any other
Limited Partner. Notwithstanding the foregoing, the General Partner may permit
certain Limited Partners to co-invest with it and the Partnership in Portfolio
Securities and may enter into agreements with any Limited Partner for the
provision to the Partnership or the General Partners of any services thereunder,
provided that any such agreement will be on terms equivalent to those entered
into with independent third parties.
Section 7.4 Co-Investment Obligation.
------------------------
A. CMGI will co-invest with the Partnership in Portfolio Companies an
aggregate amount which shall be equal to the greater of (i) $30 million, and
(ii) 19.9% of the sum of the aggregate Capital Commitments of the Partnership
and the aggregate capital commitments to the Domestic Fund (the "Co-investment
Obligation"). The Co-investment Obligation shall arise with respect to all
investments made by the Partnership in Portfolio Companies (including Follow-on
Investments, Committed Investments, Bridge Financing and through the funding of
guarantees), shall be satisfied in cash and shall be made on the same terms,
same price and in securities identical to the Portfolio Securities purchased by
the Partnership. In the case of each investment in a Portfolio Company, the
percentage of such investment made by the Partnership and CMGI will be computed
as follows: (x) the percentage of such investment made by the Partnership will
be equal to the sum of the aggregate Capital Commitments of the Partnership and
the aggregate Capital Commitments to the Domestic Fund divided by the sum of the
aggregate Capital Commitments of the Partnership, the aggregate Capital
Commitments to the Domestic Fund and the Co-investment Obligation and (y) the
percentage invested by CMGI will be equal to the Co-investment Obligation
divided by the sum of the aggregate Capital Commitments of the Partnership, the
aggregate Capital Commitments to the Domestic Fund and the Co-investment
Obligation.
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B. CMGI may fund its Co-investment Obligation through a CMGI Fund and
assign all or any portion of its Co-investment Obligation to any of its
Affiliates, including, without limitation, any CMGI Fund; however, for purposes
of this Section 7.4, the Co-investment Obligation shall remain an obligation of
CMGI.
Section 7.5 Other Co-Investment Rights.
---------------------------
In the case of any investment by the Partnership, the General Partner shall
cause employees of the Management Company or other persons who perform services
to or for the benefit of the Partnership (including without limitation, the
members of the Management Company) to co-invest with the Partnership an amount
equal to two percent (2%) of the sum of the aggregate amount to be invested by
the Partnership, the Domestic Fund and CMGI, collectively; provided that the
investment by such employees and other persons shall be on the same terms, same
price and in securities identical to the Portfolio Securities purchased by the
Partnership. The obligations of the employees or other persons under this
Section 7.5 may be funded through a partnership or limited liability company,
all of the equity holders of which are employees of the Management Company or
other persons who perform services to or for the benefit of the Partnership
(herein referred to as the "Employee Fund").
Section 7.6 @Ventures III Co-Investment.
----------------------------
The General Partner shall give the Partnership the opportunity to co-invest
with the Domestic Fund and to invest in the same Portfolio Companies and on the
same terms and at the same times as the Domestic Fund. Investments by the
Domestic Fund, the Partnership and CMGI shall be made by the Domestic Fund, the
Partnership and CMGI at the same times and shall be in proportion to their
respective Capital Commitments.
VIII. ADMISSIONS; ASSIGNMENTS; REMOVAL AND WITHDRAWALS
------------------------------------------------
Section 8.1 Admission of Additional General Partner.
---------------------------------------
It is not contemplated that any additional general partners will be
admitted to the Partnership. A person may be admitted to the Partnership as a
general partner only with the written consent of the General Partner and Two-
Thirds in Interest of the Limited Partners. Any such person so admitted as a
general partner shall be liable for all the obligations of the Partnership
arising before its admission as though it had been a general partner when such
obligations were incurred. In the event of the addition of a general partner,
the participation of such person in the management of the Partnership and the
interest of such person in the Partnership's Operating Income and Loss and
Investment Gain and Loss must be approved by the General Partner and Two-Thirds
in Interest of the Limited Partners at the time of such person's admission.
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Section 8.2 Admission of Additional Limited Partners.
----------------------------------------
After the expiration of the 270 day period commencing on the Initial
Closing Date of the Partnership, Additional Limited Partners (other than
Substitute Limited Partners admitted pursuant to Section 8.3) shall be admitted
to the Partnership only with the written consent of, and on the terms approved
by, all Partners. Until such time, the General Partner may admit one or more
additional Limited Partners with the consent of a Majority in Interest of
Limited Partners of the Partnership, subject only to satisfaction of the
following conditions: (i) each such additional Limited Partner shall execute
and deliver a Subscription Agreement and an appropriate amendment to this
Agreement pursuant to which such additional Limited Partner agrees to be bound
by the terms and provisions hereof, (ii) such admission would not result in a
violation of any applicable law, including the federal or state securities laws,
or any term or condition of this Agreement and, as a result of such admission,
the Partnership would not be required to register as an investment company under
the Investment Company Act, and (iii) such additional Limited Partner shall pay
to the Partnership, on the date of its admission to the Partnership, an amount
equal to the sum of (x) the percentage of its Capital Commitment which is equal
to the percentage of the other Limited Partners' Capital Commitments that shall
have been payable at or prior to the admission of the additional Limited Partner
and (y) an amount equal to interest on that portion of the Capital Commitment
payable upon admission at the Treasury Rate from the date such portion would
have been payable if such additional Limited Partner had been admitted on the
date of formation of the Partnership to the date of actual payment, which amount
shall be treated as Operating Receipts. The Partnership shall pay, from such
initial Capital Contribution of such additional Limited Partner, its allocable
portion of the Management Fee computed as if such additional Limited Partner had
been a Partner of the Partnership since the Initial Closing Date. The name and
business address of each Limited Partner admitted to the Partnership under this
Section 8.2 and the amount of its Capital Commitment shall be added to Schedule
--------
1 hereto. Each additional Limited Partner admitted pursuant to this Section 8.2
-
during the 270 day period commencing with the formation of the Partnership shall
be deemed for purposes of all allocations of Operating Income or Loss and
Investment Gain or Loss to have been admitted on the date of formation of the
Partnership. Admission of an additional Limited Partner shall not be a cause of
dissolution of the Partnership.
Section 8.3 Assignment of Partnership Interest.
----------------------------------
The General Partner shall not assign or otherwise transfer its interest as
the general partner of the Partnership. A Limited Partner may assign or
otherwise transfer all or any part of its interest in the Partnership (provided
that such part shall include a Capital Commitment, whether funded or unfunded,
of at least $1 million), subject to the limitations set forth in Section 8.4.
The assignee or transferee of a Limited Partner's interest in the Partnership
(an "Assignee") shall have the right to become a Substitute Limited Partner only
if the following conditions are satisfied:
A. A duly executed and acknowledged written instrument of assignment
shall have been filed with the Partnership.
B. The Limited Partner and the Assignee shall have executed and
acknowledged such other instruments and taken such other action as the General
Partner shall reasonably deem necessary or desirable to effect such
substitution, including, without limitation, the execution by the Assignee of a
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Subscription Agreement, an appropriate amendment to this Agreement and a Power
of Attorney substantially similar to that referred to in Section 12.8 hereof.
C. The restrictions on transfer contained in Section 8.4 shall be
inapplicable, and, if requested by the General Partner, the Limited Partner or
the Assignee shall have obtained an opinion of counsel reasonably satisfactory
to the General Partner as to the legal matters set forth in that Section. The
Limited Partner may request that the General Partner seek to obtain the required
opinion from counsel recommended by such Limited Partner which is reasonably
satisfactory to the General Partner, provided that the expense of such counsel
shall be an expense of the Partnership that is paid out of the Capital
Commitment of such Partner.
D. The Limited Partner or the Assignee shall have paid to the Partnership
such amount of money as is sufficient to cover all expenses incurred by or on
behalf of the Partnership in connection with such substitution.
E. The General Partner shall have consented, in its sole and absolute
discretion, to such substitution, except in the case of a transfer to an
Affiliate.
The pledge or hypothecation of a Partner's interest in the Partnership
shall not be deemed an assignment or transfer; provided, that such pledge or
hypothecation shall nonetheless be subject to the restrictions set forth in
Section 8.4. An Assignee who is not admitted to the Partnership as a Substitute
Limited Partner shall have none of the rights of a Partner and the assignor in
such case shall remain fully liable for the unpaid portion of its Capital
Commitment.
Section 8.4 Restrictions on Transfer.
------------------------
Notwithstanding any other provision of this Agreement, no Limited Partner
may assign or otherwise transfer all or any part of its interest in the
Partnership, and no attempted or purported assignment or transfer of such
interest shall be effective, unless (i) after giving effect thereto, such
assignment or transfer would not otherwise terminate the Partnership for the
purposes of Section 708 of the Code, (ii) such assignment or transfer would not
result in a violation of applicable law, including the federal and state
securities laws, or any term or condition of this Agreement and, as a result of
such assignment or transfer, the Partnership would not be required to register
as an investment company under the Investment Company Act, (iii) if requested by
the General Partner, such Limited Partner shall deliver a favorable opinion of
counsel satisfactory to the General Partner that such transfer would not result
in (x) a violation of the Securities Act or any blue sky laws or other
securities laws of any state of the United States applicable to the Partnership
or the interest to be transferred, (y) the Partnership being required to
register, or seek an exemption from registration, under the Investment Company
Act, and (z) the Partnership being deemed to be a "publicly traded partnership"
within the meaning of Section 7704 of the Code, (iv) except for an assignment to
an Affiliate of a Limited Partner, the General Partner shall have consented
thereto, which consent may be granted or withheld in its sole discretion, and
(v) such assignment or transfer is to an entity which is an Accredited Investor.
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Section 8.5 Removal of General Partner.
--------------------------
A. The General Partner may be removed by the Limited Partners only upon
the approval of at least Two-Thirds in Interest of the Limited Partners, (i) if
any act or omission of the General Partner in connection with the Partnership
constitutes bad faith, breach of fiduciary duty, willful misconduct or fraud,
(ii) if the General Partner is in material violation of its obligations
hereunder, or (iii) if a Triggering Event occurs; provided, however, that the
Limited Partners may remove the General Partner pursuant to clauses (i) and (ii)
above only if a court of competent jurisdiction or, at the election of Two-
Thirds in Interest of the Limited Partners, an arbitration committee (which
shall conduct its proceedings in accordance with the commercial rules of the
American Arbitration Committee and shall consist of three individuals, of whom
one shall be selected by the General Partner, one shall be selected by Two-
Thirds in Interest of the Limited Partners and one shall be selected by written
agreement of the other two) has previously determined that any act or omission
of the General Partner in connection with the Partnership constitutes bad faith,
willful misconduct or fraud or that the General Partner is in material violation
of its obligations hereunder.
B. In the event of any such removal of the General Partner, the
Partnership shall, within sixty (60) days of the date of such removal, obtain an
appraisal of the Portfolio Securities of the Partnership, including Portfolio
Securities the purchase of which the Partnership has committed to as of such
removal date (together "Removal Date Securities") from an independent firm of
investment bankers of nationally recognized standing selected by the removed
General Partner and approved by Two-Thirds in Interest of the Limited Partners,
which approval shall not unreasonably be withheld. As of the removal date, the
removed General Partner shall become a Special Limited Partner. The Special
Limited Partner shall be entitled to receive as distributions pursuant to
Section 5.2 that portion of all distributions made with reference to its
Percentage of Contributed Capital, and that portion of all Incentive
Distributions it would have received pursuant to Section 5.2 with respect to the
Removal Date Securities, provided that all such distributions received in
connection with such Removal Date Securities do not in the aggregate exceed the
aggregate fair market value determinations for such securities made pursuant to
this Section 8.5.B. Notwithstanding the foregoing, if after the removal of the
General Partner the Partnership then terminates under Article XI without there
having been elected a successor General Partner, the General Partner shall be
entitled to the same allocations and distributions arising out of the
Dissolution Sale as if it had not been removed. The Special Limited Partner
shall not have the limited approval rights accorded to Limited Partners in this
Agreement, and as a Special Limited Partner, the General Partner and its
Affiliates shall be released from all commitments and obligations under Article
VII effective upon the date of such removal.
Section 8.6 Withdrawals.
-----------
No Partner shall have the right to withdraw from the Partnership, except in
connection with the transfer under Section 8.3.
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IX. LIABILITY OF PARTNERS; INDEMNIFICATION
--------------------------------------
Section 9.1 Liability of General Partner.
----------------------------
A. The General Partner shall be subject to the liabilities of a partner
in a partnership without limited partners, and nothing herein shall be deemed to
relieve the General Partner of liabilities to third parties which it otherwise
has under applicable law. The General Partner shall not be liable to the
Partnership or any other Partner for any act or omission taken or suffered by
the General Partner in good faith and in the belief that such act or omission is
in the best interests of the Partnership; provided that such act or omission is
not in violation of this Agreement and does not constitute willful misconduct,
fraud, recklessness, breach of fiduciary duty, gross negligence or a willful
violation of law by the General Partner. The General Partner shall not be
liable to the Partnership or any other Partner for any action taken by any other
Partner, nor shall the General Partner (in the absence of willful misconduct,
fraud, recklessness, breach of fiduciary duty, gross negligence or a willful
violation of law by the General Partner) be liable to the Partnership or any
other Partner for any action of any employee or agent of the Partnership
provided that the General Partner shall have exercised appropriate care in the
selection and supervision of such employee or agent.
B. Whenever in this Agreement the General Partner is permitted or
required to make a decision (i) in its "discretion" or "sole discretion" or
under a grant of similar authority or latitude, the General Partner shall be
entitled to consider only such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to give any
consideration to any interests of or factors affecting any person other than the
Partnership, or (ii) in its "good faith" or under another express standard, the
General Partner shall act under such express standard and shall not be subject
to any other or different standard imposed by this Agreement or other applicable
law; provided that all judgments and determinations shall comply with the
fiduciary duty of the General Partner to the Limited Partners.
C. Notwithstanding Section 9.3 below, the General Partner shall not be
indemnified for any losses, liabilities or expenses arising from or out of an
alleged violation of federal or state securities laws unless (i) there has been
a successful adjudication on the merits of each count involving alleged
securities law violations as to the particular indemnitee, or (ii) such claims
have been dismissed with prejudice on the merits by a court of competent
jurisdiction as to the particular indemnitee, or (iii) a court of competent
jurisdiction approves a settlement of the claims against a particular
indemnitee. In any claim for indemnification for federal or state securities
law violations, the party seeking indemnification shall place before the court
the position of the Securities and Exchange Commission and the Massachusetts
Securities Division with respect to the issue of indemnification for securities
law violations. The Partnership shall not incur the cost of that portion of any
insurance, other than public liability insurance, which insures any party
against any liability the indemnification of which is herein prohibited.
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Section 9.2 Liability of Limited Partners.
-----------------------------
Except as required by law, no Limited Partner shall be bound by, nor be
personally liable for, the expenses, liabilities, or obligations of the General
Partner or the Partnership. Each Limited Partner shall be liable for the return
of any part of a distribution in respect of its Capital Contribution to the
extent required by law.
Section 9.3 Indemnification of the General Partner and Limited Partners.
-----------------------------------------------------------
The General Partner and its partners, agents, employees and Affiliates and
the Limited Partners (the "Indemnitees") shall be and hereby are (i) indemnified
and held harmless by the Partnership and (ii) released by the other Partners
from and against any and all claims, demands, liabilities, costs, expenses,
damages, losses, suits, proceedings and actions for which such Indemnitee has
not otherwise been reimbursed (collectively, "Liabilities"), whether judicial,
administrative, investigative or otherwise, of any nature whatsoever, known or
unknown, liquidated or unliquidated, that may accrue to the Partnership or any
other Partner or in which any of the Indemnitees may become involved, as a party
or otherwise, arising out of the conduct of the business or affairs of the
Partnership by the respective Indemnitee or otherwise relating to this
Agreement, provided that an Indemnitee shall not be entitled to indemnification
or release hereunder if it shall have been determined by a court of competent
jurisdiction that (x) such person did not act in good faith and in a manner such
person reasonably believed to be in the best interests of the Partnership and,
in the case of a criminal proceeding, did not have reasonable cause to believe
that his conduct was lawful, or (y) such Liabilities shall have arisen from a
violation of this Agreement or the gross negligence, willful misconduct, breach
of fiduciary duty, fraud or willful violation of law by such Indemnitee, or
actions of such Indemnitee outside the scope of and unauthorized by this
Agreement. The termination of any proceeding by settlement shall not, of
itself, create a presumption that the Indemnitee did not act in good faith and
in a manner that such person reasonably believed to be in the best interests of
the Partnership or that Indemnitee did not have reasonable cause to believe that
its conduct was lawful. Any indemnification right provided for in this Section
9.3 shall be retained by any removed General Partner and its partners, agents,
employees and Affiliates. The indemnification rights provided for in this
Section 9.3 shall survive the termination of the Partnership or this Agreement.
Section 9.4 Payment of Expenses.
-------------------
Expenses incurred by an Indemnitee in defense or settlement of any claim
that may be subject to a right of indemnification hereunder may be advanced by
the Partnership prior to the final disposition thereof provided that the
following conditions are satisfied: (i) the claim relates to the performance of
duties or services by the Indemnitee on behalf of the Partnership and (ii) the
Indemnitee undertakes to repay the advanced funds to the Partnership if it is
ultimately determined that the Indemnitee is not entitled to be indemnified
hereunder or under applicable law. The right of any Indemnitee to the
indemnification provided herein shall be cumulative of, and in addition to, any
and all rights to which such Indemnitee may otherwise be entitled by contract or
as a matter of law or equity and shall extend to such Indemnitee's successors,
assigns and legal representatives. All judgments against the Partnership and the
General Partner, in respect of which such General Partner is entitled to
indemnification, must first be satisfied from Partnership assets before the
General Partner is responsible therefor. The obligations of Limited Partners
under this Article IX shall be satisfied only after any applicable insurance
proceeds
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have been exhausted and then only out of Partnership assets and, to the
extent required by law, distributions made by the Partnership to its Partners,
and Limited Partners shall have no personal liability to fund indemnification
payments hereunder.
X. ACCOUNTING FOR THE PARTNERSHIP; REPORTS
---------------------------------------
Section 10.1 Accounting for the Partnership.
------------------------------
The Partnership shall use the accrual method of accounting and its
financial statements shall be prepared in accordance with generally accepted
accounting principles. The Partnership's tax return shall be prepared on an
accrual basis. The fiscal year of the Partnership shall end on December 31.
Section 10.2 Books and Records.
-----------------
The General Partner shall keep or cause to be kept complete and appropriate
records and books of account. Except as otherwise expressly provided herein,
such books and records shall be maintained on the basis used in preparing the
Partnership's federal income tax returns. Such information as is necessary to
reconcile such books and records with generally accepted accounting principles
shall also be maintained. The books and records shall be maintained at the
principal office of the Partnership, and shall be available for inspection and
copying by any Partner and its advisors at its expense during ordinary business
hours following reasonable notice.
Section 10.3 Quarterly Reports.
-----------------
(a) Within forty-five (45) days after the end of each calendar quarter, the
General Partner will prepare and deliver to each Partner (i) an unaudited
balance sheet and income statement of the Partnership for such quarter,
accompanied by a report on any material developments in existing investments
which occurred during such quarter and a newsletter relating to the
Partnership's activities and (ii) a statement showing the balance in such
Partner's Capital Account and a reconciliation of such balance. After the end
of each fiscal year, the General Partner shall cause an audit of the Partnership
to be made by an independent public accountant of nationally recognized status
of the financial statements of the Partnership for that year. Such audit shall
be certified and a copy thereof shall be delivered to each Partner within ninety
(90) days after the end of each of the Partnership's fiscal years. Such
certified financial statements shall also be accompanied by a report on the
Partnership's activities during the year prepared by the General Partner.
Within ninety (90) days after the end of each fiscal year, the Partnership will
deliver to each Partner the General Partner's good faith estimate of the fair
value of the Partnership's investments as of the end of such year, a statement
showing the balances in each Partner's Capital Account as of the end of such
year, and such other information, reports and forms as are necessary to assist
each Partner in the preparation of his federal, state and local tax returns.
(b) The quarterly and annual reports shall include a summary of the
acquisition and disposition of investments by the Partnership during such
period, a list of investments then held, together with a valuation of such
investments, including an explanation of such valuation in accordance with
Section 5.6, a narrative report describing the operations and financial status
of each investment, the
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General Partner's evaluation of the portfolio company's prospects and any other
information regarding the Partnership and the portfolio companies that the
Limited Partners may reasonably request.
(c) Promptly after each Capital Contribution, the General Partner shall
acknowledge receipt of funds from the Limited Partners.
(d) Promptly following the closing of each investment by the Partnership
and semi-annually thereafter, the General Partner shall provide the Limited
Partners with a fact sheet containing the following information: a
capitalization table and summary balance sheet for the portfolio company, the
amount of the Partnership's investment and percentage ownership, the amount of
each Limited Partner's investment and each Limited Partner's percentage
ownership and the expenses incurred in connection with the investment and the
Partnership's share thereof.
Section 10.4 Annual Meeting.
--------------
The General Partner will convene an annual meeting of all Partners, at such
time and on such date, beginning in 1999, as it deems appropriate, at which the
General Partner will report on the activities of the Partnership during the year
and respond to questions pertaining to the Partnership's affairs. The General
Partner shall call a special meeting of all Partners upon request of a Majority
in Interest of the Limited Partners. The General Partner will give all Partners
at least thirty (30) days notice of each annual or special meeting; provided
that such notice may be waived by a Majority in Interest of the Limited Partners
in the case of any special meeting.
XI. DISSOLUTION AND WINDING UP
--------------------------
Section 11.1 Termination.
-----------
The existence of the Partnership shall terminate upon the first to occur of
the following events:
(1) July 31, 2006; provided that the duration of the Partnership may be
extended by the General Partner for not more than two additional one year
periods;
(2) the sale or other disposition at any one time of all or substantially all
of the assets of the Partnership;
(3) the happening of any event which causes the cessation of the General
Partner's status as a general partner under the Act unless, in any such
case (i) at the time of such event there is at least one other general
partner of the Partnership who agrees to and does continue the business of
the Partnership, or (ii) Two-Thirds in Interest of the Limited Partners
agree in writing to continue the business of the Partnership and to the
appointment of one or more additional general partners in accordance with
the Act;
(4) the entry of a decree of judicial dissolution under the Act; and
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(5) the written agreement of Two-Thirds in Interest of the Limited Partners to
terminate the Partnership.
Section 11.2 Winding Up.
----------
Upon the occurrence of an event specified in Section 11.1, the Partnership
shall be wound up, liquidated and dissolved. At any time during the wind up,
liquidation and dissolution of the Partnership as provided in this Section 11.2,
Eighty Percent (80%) in Interest of the Limited Partners may remove the General
Partner and replace it with a liquidator. In addition, if there is no General
Partner, Two-Thirds in Interest of the Limited Partners may appoint a
liquidator. The General Partner or liquidator shall proceed with the
Dissolution Sale or a liquidating distribution of the securities and other
property of the Partnership pursuant to the required valuation in Section 5.6,
all within the discretion of the General Partner or liquidator as promptly as
practicable; provided that in the event of a Dissolution Sale the General
Partner or such liquidator shall continue such sale only as long as it feels is
reasonably necessary to obtain fair value for the investments in Portfolio
Companies and other assets of the Partnership. In the Dissolution Sale the
General Partner or such liquidator shall use its best efforts to reduce the
Partnership's investments in Portfolio Companies to cash and cash equivalents,
subject to obtaining fair value therefor and other legal and tax considerations.
Section 11.3 Liquidating Trust.
-----------------
In the sole discretion of the General Partner or the liquidator at the
termination of the Partnership pursuant to Section 11.1, all or a portion of the
non-cash assets of the Partnership (other than Marketable Securities) may be
distributed to a trust established for the benefit of the Partners for the sole
purposes of liquidating Partnership assets, collecting amounts owed to the
Partnership and paying any contingent or unforeseen liabilities or obligations
of the Partnership. The distribution to the trust will constitute a final,
liquidating distribution of assets pursuant to Section 5.3. The Partners'
beneficial interests in the trust will be equal to their respective interests in
the assets of the Partnership upon liquidation. The trustee of the trust shall
be the General Partner or the liquidator.
XII. MISCELLANEOUS
-------------
Section 12.1 Registration of Securities.
--------------------------
Stocks, bonds, securities and other property owned by the Partnership shall
be registered in the Partnership name or a "street name." Any corporation or
transfer agent called upon to transfer any stocks, bonds and securities to or
from the name of the Partnership shall be entitled to rely on instructions or
assignments signed or purporting to be signed by the General Partner without
inquiry as to the authority of the person signing or purporting to sign such
instructions or assignments or as to the validity of any transfer to or from the
name of the Partnership. At the time of transfer, the corporation or transfer
agent is entitled to assume (i) that the Partnership is still in existence and
(ii) that this Agreement is in full force and effect and has not been amended
unless the corporation or transfer agent has received written notice to the
contrary.
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Section 12.2 Entire Agreement.
----------------
This Agreement and the Exhibits and Schedules attached hereto set forth the
full and complete agreement of the Partners with respect to the subject matter
hereof and supersede any prior agreement or undertaking among the parties;
provided that the representations of the General Partner, the Partnership and
the Limited Partners contained in the Subscription Agreement will survive the
execution of this Agreement.
Section 12.3 Voting; Amendments.
------------------
On any occasion on which the General Partner submits to the Limited
Partners for their approval a proposed amendment, waiver or other action (a
"Vote") with respect to a provision of this Agreement (except as to Sections
3.1, 3.2, 4.2, 6.2C, 6.2D, 6.2K, 6.2N, 6.2Q, and Sections 12.14 through 12.17,
and all provisions relating thereto, in which case the vote, consent or approval
of the Limited Partners of only this Partnership shall be obtained), and the
General Partner also submits to the Limited Partners of the Domestic Fund for
their approval a proposed Vote with respect to a provision with a substantially
similar impact of the partnership agreement for the Domestic Fund, then for
purposes of determining whether such Vote was approved by the Limited Partners,
(x) the Partnership will be deemed to have Capital Commitments equal to the
Capital Commitments of the Domestic Fund and the Capital Commitments of the
Partnership ("Deemed Total Capital Commitments"); (y) the portion of the Deemed
Total Capital Commitments attributable to the Domestic Fund shall be deemed
voted as actually voted by the Limited Partners of the Domestic Fund and (z) the
portion of the Deemed Total Capital Commitments attributable to the Partnership
shall be voted as the Limited Partners actually vote. Subject to the foregoing,
this Agreement may be modified from time to time by the General Partner and a
Majority in Interest of the Limited Partners; provided that the written consent
of all Partners shall be required for any amendment which would do any of the
following: (i) increase the Capital Commitment of any Partner; (ii) modify the
distributions of Operating Receipts or Investment Receipts in Section 5.2 or the
allocations of Operating Income or Loss or Investment Gain or Loss in Section
5.7; (iii) extend the period in which additional Limited Partners may be
admitted to the Partnership beyond 270 days as specified in Section 8.2; (iv)
amend the Management Contract so as to increase the Management Fee or other
compensation of the General Partner; (v) increase the percentage in interest of
the Limited Partners needed to remove the General Partner under Section 8.5 or
to terminate the Partnership under Section 11.1; or (vii) amend this Section
12.3; or (viii) amend, waive or remove any other right granted to the Limited
Partners of this Partnership not granted to the limited partners of the Domestic
Fund. No amendment may be made to any provision of this Agreement which
contemplates action by a vote or consent of greater than a Majority in Interest
of the Limited Partners without a vote or consent of such greater majority as
therein specified.
Section 12.4 Severability.
------------
If any provision of this Agreement, or the application of such provision to
any person or circumstance, shall be held invalid, the remainder of this
Agreement or the application of such provision to other persons or circumstances
shall not be affected thereby. Any default hereunder by a Limited Partner shall
not excuse a default by any other Limited Partner.
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Section 12.5 Notices.
--------
All notices, requests, demands and other communications shall be in writing
and shall be deemed to have been duly given if personally delivered or sent by
United States mails, or private or postal express mail service or by facsimile
transmission confirmed by letter, if to the Partners, at the addresses set forth
on Schedule 1 attached hereto, and if to the Partnership, to the General Partner
----------
at its address set forth in said Schedule, or to such other address as any
Partner shall have last designated by notice to the Partnership and the other
Partners, or as the General Partner shall have last designated by notice to the
Limited Partners, as the case may be. Any notice shall be deemed received,
unless earlier received, (i) if sent by first-class mail, postage prepaid, when
actually received, (ii) if sent by private or postal express mail service, when
actually received, (iii) if sent by facsimile transmission, on the date sent
provided confirmatory notice is sent by first-class mail, postage prepaid, and
(iv) if delivered by hand, on the date of receipt.
Section 12.6 Heirs and Assigns; Execution.
----------------------------
This Agreement (i) shall be binding on the executors, administrators,
estates, heirs, legal representatives, successors, and assigns of the Partners;
and, (ii) may be executed in more than one counterpart with the same effect as
if the parties executing the several counterparts had all executed one
counterpart; provided, however, that each separate counterpart shall have been
executed by the General Partner and that the several counterparts, in the
aggregate, shall have been signed by all of the Partners.
Section 12.7 Waiver of Partition.
-------------------
Except as may be otherwise 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.
Section 12.8 Power of Attorney.
-----------------
Concurrently with the execution of this Agreement, each Limited Partner
shall execute a Power of Attorney in the form attached to the Subscription
Agreement.
Section 12.9 Headings.
--------
The section headings in this Agreement are for convenience of reference
only, and shall not be deemed to alter or affect the meaning or interpretation
of any provisions hereof.
Section 12.10 Further Actions.
---------------
Each 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, including, without limitation, (i) 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 (ii) all such
agreements, certificates, tax statements and other documents as may be required
to be filed in respect of the Partnership.
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Section 12.11 Gender, Etc.
-----------
Whenever the context permits, the use of a particular gender shall include
the masculine, feminine and neuter genders, and any reference to the singular or
the plural shall be interchangeable with the other.
Section 12.12 Tax Matters Partner.
-------------------
The General Partner shall be designated as the Tax Matters Partner in
accordance with Section 6231 of the Code and shall promptly notify the other
partners if any tax return or report of the Partnership is audited or if any
adjustments are proposed. In addition, the General Partner shall promptly
furnish to the Partners all notices concerning administrative or judicial
proceedings relating to federal income tax matters as required under the Code
and shall supply such information to the Internal Revenue Service as may be
necessary to identify the Partners as Notice Partners under Section 6231 of the
Code. During the pendency of any administrative or judicial proceeding, the
General Partner shall furnish to the Partners periodic reports concerning the
status of any such proceeding. Without the consent of a Majority in Interest of
the Partners, the General Partner shall not extend the statute of limitations,
file a request for administrative adjustment or enter into any settlement
agreement relating to any Partnership item of income, gain, loss, deduction or
credit for any fiscal year of the Partnership.
Section 12.13 Applicable Law.
--------------
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware.
Section 12.14 Avoidance of Trade or Business Status; Service-Related
------------------------------------------------------
Income.
------
Notwithstanding anything to the contrary in this Agreement or otherwise:
(a) The General Partner will use its best efforts to conduct the affairs of
the Partnership so as to (i) avoid having the Partnership treated as engaged in
a trade or business within the United States for purposes of Sections 864, 875,
882, and 1446 of the Code, (ii) conduct the affairs of the Partnership so that
the Partnership does not invest in United States real property interests as that
term is defined in Section 897 of the Code, and (iii) avoid investing or
entering into contracts for the purchase or sale of commodities or in options or
futures, including currency futures, other than options or other contracts for
the acquisition or disposition of securities of a portfolio company.
(b) Neither the General Partner, the Partnership, the principals of the
General Partner nor any agents of the foregoing (in each case in their
capacities as such, including actions relating to the Domestic Fund and the
Prior Funds) shall:
(i) engage in investments for the purpose of realizing a quick, immediate
and profitable sale rather than holding the investment for long-term capital
appreciation;
(ii) invest in portfolio companies for relatively short holding periods,
(e.g., engaging in quick sales in response to market fluctuations), or engage in
frequent, short-term turnover of investments in
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portfolio companies (including leveraged financings, short sales, puts, calls,
hedging transactions and purchases on margin) or a large number of such
transactions;
(iii) acquire an interest in a partnership, limited liability company,
trust or other non-corporate entity that are engaged in U.S. trade or business
within the meaning of the Code;
(iv) receive a fee for any management-, consulting- or promotion-type
services provided to portfolio companies; or
(v) engage in the management of the day-to-day operations of portfolio
companies or perform any sustained or ongoing services; provided that no such
persons shall be prohibited from serving as a member of the board of directors
of portfolio companies.
Accordingly, the General Partner agrees, to the extent legally permissible,
to file all federal, state and local tax returns and reports of the Partnership
in a manner consistent with such treatment. The General Partner shall not cause
the Partnership to invest in any other partnership unless such other partnership
agrees to use its best efforts to conduct its activities in a manner such that
those activities will not cause the Partnership to be engaged in a trade or
business within the United States for purposes of Sections 875, 882, 897 and
1446 of the Code.
Section 12.15 Confidentiality.
---------------
The General Partner and the Partnership on behalf of themselves and their
respective Affiliates, members, managers, employees and other agents (i)
acknowledge, that, during the term of the Partnership, they may become aware of
information relating to the Limited Partners and their respective principals,
clients, Affiliates, partners, members, managers, employees, consultants and
other agents, and (ii) agree, except as otherwise may be required by applicable
law, to keep such information in strict confidence. In the event that the
General Partner or the Partnership or any of their Affiliates or such other
related persons is requested by any governmental body or in any legal proceeding
to disclose information concerning any of the above persons or entities, such
person will provide, to the extent not prohibited by applicable law, prompt
notice to any such person so that such person may seek an appropriate protective
order. This provision shall survive the termination of the Partnership and the
Partnership Agreement.
Section 12.16 Favorable Arrangements.
----------------------
The General Partner shall promptly disclose in writing to the Limited
Partners of this Partnership any arrangement, agreement or provision relating to
the Domestic Fund which provides a limited partner of either of them with a
material benefit which the Limited Partners of the Partnership do not have. The
Limited Partners shall have thirty (30) days after receipt of such notice to
inform the General Partner that such Limited Partner desires to have such
favorable arrangement, agreement or provision apply to it in relation to the
Partnership and/or this Agreement. Promptly upon receipt of such writing from
the Limited Partner, the General Partner (on behalf of the Partnership) and such
Limited Partner shall legally implement and document such favorable arrangement,
agreement or provision.
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Section 12.17 Additional Co-Investments.
-------------------------
Subject to the provisions of this Agreement and the Domestic Fund's Limited
Partnership Agreement, the General Partner may, in its discretion, request that
any Portfolio Company or other company offer each Limited Partner the
opportunity to acquire the securities of such company (the "Additional
Securities"). Any such offer shall be made pro rata to each Limited Partner
based on its Capital Commitment and the capital commitment of the partners of
the Domestic Fund, provided that strategic partners of the CMGI Funds or the
Domestic Fund may be offered in excess of their pro rata shares if and to the
extent such an investment would benefit the company. In the event that one or
more of such Limited Partners desires to acquire such Additional Securities,
such investment shall be made outside of the Partnership (either directly or in
an entity to be designated by any such Limited Partner), and each Limited
Partner that so invests shall agree to pay the General Partner an amount in cash
or in-kind (in the discretion of the Limited Partner) equal to ten percent (10%)
of the appreciation in value, if any, of the Additional Securities, such amount
to be determined and payable upon the earlier of (i) the disposition of such
Additional Securities by such Limited Partner (or its designee), (ii) in the
case of Additional Securities issued by Portfolio Companies of the Partnership,
the distribution or liquidation by the Partnership of the securities of such
company, or (iii) in the case of Additional Securities issued by companies which
are not Portfolio Companies of the Partnership, the termination of the
Partnership. In the event that Additional Securities have been issued by
Portfolio Companies of the Partnership or the Domestic Fund, the General Partner
shall sell or otherwise dispose of the Additional Securities at the same time
and based upon the same terms and conditions (including but not limited to
price) as the Partnership's or Fund's sale or disposal of securities of such
portfolio company.
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IN WITNESS WHEREOF, the parties to this Agreement have executed the same as
of the date first above set forth and have executed separate counterparts
bearing the signature of the General Partner.
GENERAL PARTNER
@Ventures Partners III, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
@VENTURES FOREIGN FUND III, L.P.
LIMITED PARTNERSHIP
Schedule 1
----------
Total Remaining
Capital Amount Capital
Commitment Contributed Commitment
---------- ----------- ----------
I. General Partner
@Ventures Partners III, LLC $ 505,050
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
II. Limited Partners
----------------
AtEura, LLC $50,000,000
Address for Notices
-------------------
ATEURA, LLC
▇/▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: ▇▇-▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Partners
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: 0171.734.7417
and
BARNARD & CO., L.L.C.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - 37th Floor
New York, New York 10022
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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