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CME HOLDCO L.P.
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AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
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Dated September 1, 2006
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TABLE OF CONTENTS
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ARTICLE I GENERAL PROVISIONS............................................. 1
1.1 Definition References......................................... 1
1.2 Specific Definitions.......................................... 2
1.3 Name and Registered Office.................................... 8
1.4 Purposes...................................................... 8
1.5 Term.......................................................... 8
1.6 Fiscal Year................................................... 8
1.7 Powers........................................................ 8
1.8 Admission of Limited Partners................................. 9
1.9 Register...................................................... 9
1.10 Expenses...................................................... 9
ARTICLE II THE GENERAL PARTNER........................................... 10
2.1 Management of the Partnership, etc............................ 10
2.2 Reliance by Third Parties..................................... 10
2.3 Liabilities of the General Partner and Other Covered Persons.. 10
2.4 Bankruptcy, Dissolution or Withdrawal of the General Partner.. 11
ARTICLE III THE LIMITED PARTNERS......................................... 11
3.1 No Participation in Management, etc........................... 11
3.2 Limitation of Liability....................................... 11
3.3 VCOC Rights................................................... 12
3.4 Plan Assets................................................... 13
3.5 Bankruptcy or Dissolution of a Limited Partner................ 14
3.6 Provision of Information...................................... 14
ARTICLE IV GOVERNANCE; TRANSFER, REDEMPTION.............................. 14
4.1 Governance.................................................... 14
4.2 Election of Directors of CME.................................. 15
4.3 Transfer of CME Shares........................................ 16
4.4 Optional Redemption........................................... 17
4.5 Mandatory Redemption and Distribution......................... 18
4.6 Acquisition of CME Shares; Margin Loans....................... 18
4.7 Registration of Shares........................................ 19
ARTICLE V CONTRIBUTIONS.................................................. 20
5.1 CME Shares.................................................... 20
5.2 Additional Contributions...................................... 20
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TABLE OF CONTENTS
(CONT.)
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ARTICLE VI CAPITAL ACCOUNTS; DISTRIBUTIONS; ALLOCATIONS; WITHHOLDING..... 21
6.1 Capital Accounts.............................................. 21
6.2 Adjustments to Capital Accounts............................... 21
6.3 Distributions Attributable to Ownership or Disposition of
Class B Shares................................................ 21
6.4 Distributions in Kind......................................... 21
6.5 Negative Capital Accounts..................................... 22
6.6 No Withdrawal of Capital...................................... 22
6.7 Allocations to Capital Accounts............................... 22
6.8 Tax Allocations and Other Tax Matters......................... 23
6.9 Withholding................................................... 24
6.10 Overriding Limitations on Distributions....................... 26
ARTICLE VII BOOKS AND RECORDS; REPORTS TO PARTNERS; ETC.................. 26
7.1 Maintenance of Books and Records.............................. 26
7.2 Information Regarding CME..................................... 27
7.3 Partnership Information....................................... 27
7.4 Tax Information............................................... 27
ARTICLE VIII INDEMNIFICATION............................................. 27
8.1 General....................................................... 27
8.2 Expenses, etc................................................. 28
8.3 Notices of Claims, etc........................................ 28
ARTICLE IX TRANSFERS..................................................... 29
9.1 Transfers by Partners......................................... 29
9.2 Transfer to a Successor Limited Partnership................... 29
9.3 Conditions to Transfer........................................ 29
9.4 Transfers in Violation of Agreement Not Recognized............ 30
9.5 Tax Reporting................................................. 30
ARTICLE X DISSOLUTION AND WINDING UP OF THE PARTNERSHIP.................. 31
10.1 Dissolution................................................... 31
10.2 Winding Up.................................................... 31
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TABLE OF CONTENTS
(CONT.)
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10.3 Notice of Dissolution......................................... 33
ARTICLE XI MISCELLANEOUS................................................. 33
11.1 Amendments.................................................... 33
11.2 Notices....................................................... 33
11.3 Counterparts.................................................. 35
11.4 Table of Contents and Headings................................ 35
11.5 Successors and Assigns........................................ 35
11.6 Severability.................................................. 35
11.7 Further Actions............................................... 36
11.8 Determinations of the Partners................................ 36
11.9 Non-Waiver.................................................... 36
11.10 Applicable Law................................................ 36
11.11 Confidentiality............................................... 36
11.12 Survival of Certain Provisions................................ 37
11.13 Waiver of Partition........................................... 37
11.14 Entire Agreement.............................................. 37
11.15 No Third-Party Beneficiaries.................................. 38
11.16 Currency...................................................... 38
11.17 Compliance with Anti-Money Laundering Requirements............ 38
11.18 Counsel....................................................... 38
11.19 Submission to Jurisdiction; Venue; Waiver of Jury Trial....... 38
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CME HOLDCO L.P.
This AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT of CME Holdco L.P.,
a Cayman Islands exempted limited partnership (the "Partnership"), is made and
entered into on September 1, 2006, by and between (i) RSL Investment LLC, as
general partner (the "General Partner"), (ii) Adele Guernsey L.P., as limited
partner ("the APAX Limited Partner"), Mr. ▇▇▇▇▇▇▇ ▇▇▇▇ (the "Designated Limited
Partner"), and (iii) RSL Investments Corporation ("RIC"), RAJ Family Partners,
L.P ("RAJ"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("LAL"), and LWG Family Partners, L.P. ("LWG"),
each as limited partners (collectively, the "Lauder Limited Partners").
Capitalized terms used in this Agreement without definition have the meanings
given to them in Section 1.1.
RECITALS:
A. The Partnership is an exempted limited partnership that was registered
pursuant to the Certificate filed with the Registrar of Exempted Limited
Partnerships of the Cayman Islands pursuant to the Exempted Limited Partnership
Law (2003 Revision) of the Cayman Islands (the "Partnership Law") on August 29,
2006 and that, since its formation, has been governed by a Limited Partnership
Agreement of the Partnership dated August 29, 2006 and amended as of August 30,
2006 (the "Original Agreement").
B. The General Partner and the Limited Partners desire to, and hereby agree
to, continue the Partnership.
C. The General Partner and the Limited Partners desire to, and hereby agree
to, amend and restate the Original Agreement, which is replaced and superseded
in its entirety by this Agreement.
ARTICLE I
GENERAL PROVISIONS
1.1 Definition References. The following capitalized terms used herein
shall have the meanings specified in the Sections hereof indicated below:
Defined Term Section
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"APAX Limited Partner" Preamble
"Capital Account" 6.1
"Claims" 8.1
"Damages" 8.1
1
Defined Term Section
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"Designated Limited Partner" Preamble
"Fiscal Year" 1.6
"GP Notice" 5.3(a)
"Lauder Limited Partner" Preamble
"LP Notice" 5.3(a)
"Non-Plan Party" 3.4(a)
"Offered Interest" 4.4(b)
"Offered Price" 4.4(b)
"Partnership" Preamble
"Partnership Law" Preamble
"Per Share Price" 4.4(b)
"Proceeding" 8.1
"Purchase Offer" 4.4(b)
"Redemption Interest" 4.4(a)
"Stock Merger" 4.3(a)
"Term" 1.5
"Transferee" 9.2
"Transferor" 9.2
1.2 Specific Definitions. As used herein, the following terms have the
meanings set forth below:
"Acceptable Margin Loan Terms" shall mean any margin loan (or an
economic equivalent) that is non-recourse to the Partners, available at
LIBOR plus approximately 650 basis points or less, does not require cash
interest payments prior to maturity, matures on or after August 31, 2009,
and includes typical knock out provisions and an obligation to service
margin calls by selling Class A Shares (including Class B Shares that are
converted to Class A Shares) or contributing cash.
"Adjustment Date" shall mean the last day of each Fiscal Year or any
other date that the General Partner determines to be appropriate for an
interim closing of the Partnership's books.
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"Advisers Act" shall mean the U.S. Investment Advisers Act of 1940, as
amended from time to time.
"Affiliate" shall mean, with respect to any specified Person, a Person
that directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, the Person specified,
provided that CME shall not be deemed to be an "Affiliate" of any Partner
or the Partnership.
"Agreement" shall mean this Amended and Restated Limited Partnership
Agreement, as amended, supplemented, restated or otherwise modified from
time to time.
"APAX Permitted Transferee" shall mean (i) any other APAX investment
fund having the same general partner as, or a general partner affiliated
with the general partner of either Apax Europe VI-A, L.P. or Apax Europe
VI-1, L.P. (the "APAX Funds"), (ii) other entities controlled by APAX
Partners Worldwide LLP or any of its affiliates acting for any of the APAX
Funds (including any nominee entity) or (iii) any financial institution in
connection with any loan from such financial institution.
"Available Assets" shall mean, at any date of determination, the
excess of (a) the cash, cash equivalent items and Temporary Investments
held by the Partnership less (b) the sum of the amount of such items as the
General Partner reasonably determines to be necessary for the payment of
the Partnership's expenses, liabilities and other obligations (whether
fixed or contingent), and for the establishment of appropriate reserves for
such expenses, liabilities and obligations as may arise, including the
maintenance of adequate working capital for the continued conduct of the
Partnership's investment activities and operations.
"Business Day" shall mean any day other than (a) Saturday and Sunday
and (b) any other day on which banks located in New York City are required
or authorized by law to remain closed.
"Cayman Islands" shall mean the Cayman Islands, British West Indies.
"Certificate" shall mean the Certificate of Registration of the
Partnership as an Exempted Limited Partnership, including the statement of
registration filed by the General Partner with the Registrar of Exempted
Limited Partnerships in the Cayman Islands, as amended from time to time.
"Class A Shares" shall mean the Class A common stock of CME, par value
$0.08 per share, and any securities received in respect thereof on account
of a Stock Merger.
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"Class B Shares" shall mean the Class B common stock of CME, par value
$0.08 per share, and any securities received in respect thereof on account
of a Stock Merger.
"Closing" shall mean the date hereof and any date as of which the
General Partner shall admit one or more Partners to the Partnership
pursuant to this Agreement.
"CME" shall mean Central European Media Enterprises Ltd., a Bermuda
company.
"Code" shall mean the U.S. Internal Revenue Code of 1986, as amended.
"Contribution" shall mean, with respect to any Partner, the capital
contributed or in kind contribution made, or deemed to be made, to the
Partnership by such Partner pursuant to this Agreement, plus any additional
contributions required to be made pursuant to Section 5.2.
"Covered Person" shall mean the General Partner and its Affiliates;
each of the current and former shareholders, officers, directors,
employees, partners, members, managers and agents of such persons; and any
other Person designated by the General Partner as a Covered Person who
serves at the request of the General Partner on behalf of the Partnership
as an officer, director, employee, partner, member or agent of any other
Person that is an Affiliate of the General Partner or the Partnership.
"Disability" shall mean the inability of RSL to substantially render
to the Partnership or CME the services required by the Partnership or CME,
including in accordance with the terms of this Agreement, for a period of
180 consecutive days. The date of such Disability shall be on the last day
of such 180 day period.
"Disabling Conduct" shall mean fraud, willful malfeasance or Gross
Negligence by or of such Person (or, solely in respect of claims by the
APAX Limited Partner or its Permitted Transferees, a breach by the General
Partner of its obligations under Article IV).
"Distributable Cash" shall mean cash received by the Partnership from
the sale or other disposition of, or dividends, interest, redemption
proceeds, net proceeds of any debt financing incurred for the purpose of
making a distribution to Partners, or other income otherwise received by
the Partnership, other than Contributions, to the extent that such cash
constitutes Available Assets.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
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"Exemption" shall mean the exemption granted pursuant to Section 4(4)
of the Mutual Funds Law, pursuant to which, so long as there are fifteen or
fewer holders of limited partnership interests in the Partnership and a
majority in number of those holders may appoint or remove the General
Partner, the Partnership shall not be required to register with the
Authority as a mutual fund under the Mutual Funds Law.
"General Partner" shall mean RSL Investment LLC, a Delaware limited
liability company, in its capacity as the general partner of the
Partnership, or any additional or successor general partner admitted to the
Partnership as a general partner thereof in accordance with the terms
hereof, in its capacity as a general partner of the Partnership, in every
case as the context requires.
"Gross Negligence" shall mean "gross negligence" as interpreted in
accordance with the laws of the State of Delaware (notwithstanding the
provisions of Section 12.9 of this Agreement).
"Investment Company Act" shall mean the U.S. Investment Company Act of
1940, as amended from time to time, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
"Limited Partner" shall mean the APAX Limited Partner, the Lauder
Limited Partners, and any successor or additional limited partner(s)
admitted to the Partnership from time to time as limited partners in
accordance with the terms hereof, in its or their capacity as a limited
partner of the Partnership, and shall exclude any Person that ceases to be
a Partner in accordance with the terms hereof.
"Marketable Securities" shall mean Securities that (a) are tradable on
an established U.S. national or Western European stock exchange or reported
through NASDAQ or a comparable established Western European
over-the-counter trading system, and, in each case, that the General
Partner believes will be tradable at a price approximating their Value
promptly after receipt thereof by the Limited Partners, and (b) are not
subject to contractual restrictions on Transfer, provided that the term
"Marketable Securities shall not include any Class A Shares or Class B
Shares.
"Mutual Funds Law" shall mean the Mutual Funds Law of the Cayman
Islands (as amended).
"NASDAQ" shall mean the automated screen-based quotation system
operated by the Nasdaq Stock Market, Inc., a subsidiary of the National
Association of Securities Dealers, Inc., or any successor thereto.
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"Other Securities" shall mean any Securities other than Class A Shares
or Class B Shares.
"Partners" shall mean the General Partner and the Limited Partner.
"Partnership Expenses" shall mean the costs, expenses and liabilities
that in the good faith judgment of the General Partner are incurred by or
arise out of the operation and activities of the Partnership permitted by
this Agreement, including: (a) the fees and expenses relating to the
formation and organization of the Partnership, including all legal, audit
and accounting fees and expenses; (b) premiums for customary insurance
protecting the Partnership and any Covered Persons from liabilities to
third Persons in connection with Partnership affairs; (c) legal, custodial
and accounting expenses, including expenses associated with the preparation
of the Partnership's financial statements, tax returns and reports; (d)
auditing, accounting, banking and consulting expenses; (e) appraisal
expenses; (f) costs and expenses that are classified as extraordinary
expenses under U.S. generally accepted accounting principles; (g) taxes and
other governmental charges, fees and duties payable by the Partnership,
other than taxes withheld from distributions to a Partner or otherwise paid
by a Partner pursuant to Section 6.9; (h) all registration and filing fees
of the Partnership; (i) Damages; (j) costs of reporting to the Partners;
(k) fees and expenses of winding up and liquidating the Partnership; and
(l) expenses incurred in managing the investments of the Partnership.
"Period" shall mean, for the first Period, the period commencing on
the date hereof and ending on the next Adjustment Date, and, for each
subsequent Period, shall mean the period commencing on the day after an
Adjustment Date and ending on the next Adjustment Date.
"Person" shall mean any individual or entity, including a corporation,
partnership, association, limited liability company, limited liability
partnership, joint-stock company, trust, unincorporated association,
government or governmental agency or authority.
"Prime Rate" shall mean the rate of interest published from time to
time in The Wall Street Journal, Eastern Edition (or any successor
publication thereto), designated therein as the prime rate, or if not so
published, the rate of interest publicly announced from time to time by any
money center bank as its prime rate in effect at its principal office, as
identified in writing by the General Partner to the Limited Partners.
"pro rata," with respect to the Partners, shall be determined in
accordance with the respective partnership interests of the Partners.
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"Purchase Agreement" shall mean the Purchase Agreement dated as of
August 28, 2006, among RSL, the General Partner and the Limited Partners.
"RSL" shall mean ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
"RSL Permitted Transferee" shall mean any Person that qualifies as a
"Permitted Transferee" under Section 3(5) of the bye-laws of CME.
"Securities" shall mean shares of capital stock, partnership
interests, limited liability company interests, warrants, options, bonds,
notes, debentures and other equity and debt securities of whatever kind of
any Person, whether readily marketable or not.
"Securities Act" shall mean the U.S. Securities Act of 1933, as
amended from time to time, and the rules and regulations of the U.S.
Securities and Exchange Commission promulgated thereunder.
"Transfer" shall mean a direct or indirect transfer in any form,
including a sale, assignment, conveyance, pledge, charge, mortgage,
encumbrance, securitization, hypothecation or other disposition, or any
purported severance or alienation of any beneficial interest (including the
creation of any derivative or synthetic interest), or the act of so doing,
as the context requires, other than any pledge or hypothecation of capital
stock to a financial institution in connection with any loan from such
financial institution.
"Treasury Regulations" shall mean the regulations of the U.S. Treasury
Department issued pursuant to the Code.
"Value" shall mean (a) with respect to Marketable Securities (i) that
are primarily traded on a securities exchange, the average of their closing
sale prices, regular way, on the principal securities exchange on which
they are traded for each Business Day (as officially reported on such
principal securities exchange) during the period commencing twelve days
prior to the date of the relevant distribution and ending two days prior to
the date of such distribution or, if no sales occurred on any such day, the
mean between the closing "bid" and "asked prices" on such day and (ii) the
principal market for which is or is deemed to be the over-the-counter
market, the average of their closing sales prices, regular way, on each
Business Day during such period, as published by NASDAQ or any similar
organization, or if such price is not so published on any such day, the
mean between their closing "bid" and "asked" prices, regular way, if
available, on such day, which prices may be obtained from any reputable
pricing service, broker or dealer and (b) with respect to all other
Securities or other assets of or interests in the Partnership, other than
cash, the value determined by the General
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Partner and agreed to by the APAX Limited Partner in good faith through the
application of valuation methodologies adopted by the General Partner,
provided that, for purposes of clauses (B), (C) and (D) of Section 3.4(b),
and for purposes of the dissolution of the Partnership pursuant to Article
X with respect to the Securities and other assets described in clause (b)
above that are distributed in kind, the General Partner shall obtain (at
the Partnership's expense) a valuation of such assets from an independent
recognized investment banking, accounting or other appraisal firm selected
by the General Partner.
1.3 Name and Registered Office.
(a) Name. The name of the Partnership formed hereby is "CME Holdco L.P."
(b) Registered Office. The registered office of the Partnership in the
Cayman Islands is c/o Walkers SPV Limited, ▇▇▇▇▇▇ House, PO Box 908 GT, ▇▇▇▇
Street, ▇▇▇▇▇▇ Town, Grand Cayman, Cayman Islands, British West Indies and the
registered agent for service of process on the Partnership at such address is
Walkers SPV. The Partnership may designate another registered agent and/or
registered office located in the Cayman Islands at any time, and may maintain
such other office or offices at such location or locations within or without the
Cayman Islands as the General Partner may from time to time select.
1.4 Purposes. The purposes of the Partnership are solely to acquire, hold
and dispose of common equity securities of CME and to engage in such other
activities or actions related to or to facilitate the foregoing. The Partnership
shall not undertake business with the public in the Cayman Islands (other than
so far as may be necessary to carry on the activities of the Partnership
exterior to the Cayman Islands).
1.5 Term. The term of the Partnership commenced on August 29, 2006 and
shall continue until the close of business on August 31, 2016,unless the
Partnership is sooner dissolved pursuant to the filing of a Notice of
Dissolution in accordance with Section 10.3 hereof (the "Term").
1.6 Fiscal Year. The fiscal year of the Partnership shall end on the 31st
day of December in each year (the "Fiscal Year"). The initial Fiscal Year
commenced on August 29, 2006 and shall end December 31, 2006. Except as
otherwise required by law, the Partnership shall have the same Fiscal Year for
income tax and for financial and partnership accounting purposes.
1.7 Powers.
(a) Subject to the other provisions of this Agreement, the Partnership
shall be and hereby is authorized and empowered to do or cause to be done any
and all acts determined by the General Partner to be necessary, advisable,
convenient or incidental in
8
furtherance of the purposes of the Partnership, including to borrow money, issue
guarantees, and grant security interests, including entering into any pledge,
instrument or other agreement as may be necessary or appropriate to effect the
foregoing, without any further act, approval or vote of any Person, including
the Limited Partners. The powers of the General Partner include all powers,
statutory and otherwise, that may be possessed by a general partner under the
laws of the Cayman Islands.
(b) For so long as no general partner of the Partnership is an individual,
the Designated Limited Partner, in its capacity as a Limited Partner, shall be
entitled to manage and control the Partnership in its business affairs, provided
that (i) the Designated Limited Partner shall in all cases only be entitled to
execute such management and control together with, and with the written consent
of, the General Partner, and (ii) the Designated Limited Partner shall in no
event have any power or authority to act on behalf of the Partnership or to bind
the Partnership vis-a-vis third parties. Notwithstanding the foregoing, all
power or authority to act on behalf of the Partnership or to bind the
Partnership vis-a-vis third parties shall be entirely vested with the General
Partner, and nothing in this Section 1.7(b) shall be construed to limit in any
way the authority of the General Partner to act alone in taking any action or
making any decision on behalf of the Partnership or to require the
participation, approval or consent of the Designated Limited Partner with
respect to any such decision.
1.8 Admission of Limited Partners. A Limited Partner shall be admitted as a
limited partner of the Partnership at the time that (a) this Agreement or a
counterpart hereof is executed by or on behalf of such Limited Partner and by
the General Partner on behalf of the Partnership and (b) such Limited Partner is
listed by the General Partner as a limited partner of the Partnership on the
Register. Additional Persons shall be admitted as limited partners of the
Partnership as provided in Article IX.
1.9 Register. The General Partner shall cause to be maintained at the
registered office of the Partnership, the register of Partners (the "Register").
The Register shall not be part of this Agreement. The General Partner shall from
time to time update the Register as necessary to accurately reflect the
information therein. Any reference in this Agreement to the Register shall be
deemed a reference to the Register as in effect from time to time. Subject to
the terms of this Agreement, the General Partner may take any action authorized
hereunder in respect of the Register without any need to obtain the consent of
any other Partner. No action of any Limited Partner shall be required to amend
or update the Register.
1.10 Expenses. All Partnership Expenses shall be paid by the Partnership.
To the extent that the General Partner or any of its respective Affiliates pays
any Partnership Expenses on behalf of the Partnership, the Partnership shall
reimburse the General Partner or such Affiliate, as the case may be, upon
request, provided that the Partnership shall not reimburse the General Partner
or such Affiliate, as the case may be, for amounts
9
in excess of the amounts required to be contributed under Section 5.2 without
the consent of the APAX Limited Partner.
ARTICLE II
THE GENERAL PARTNER
2.1 Management of the Partnership, etc. Subject to the other provisions of
this Agreement, the management, control and operation of and the determination
of policy with respect to the Partnership and its investment and other
activities shall be vested exclusively in the General Partner (acting directly
or through its duly appointed agents, provided that the appointment of any agent
with discretionary authority shall require the consent of the APAX Limited
Partner), which is hereby authorized and empowered on behalf and in the name of
the Partnership and in its own name, if necessary or appropriate, but subject to
the other provisions of this Agreement and to its fiduciary duties, to carry out
any and all of the purposes of the Partnership and to perform all acts and enter
into and perform all contracts and other undertakings that it may deem
necessary, advisable, convenient or incidental thereto.
2.2 Reliance by Third Parties. In dealing with the General Partner and its
duly appointed agents, no Person shall be required to inquire as to the General
Partner's or any such agent's authority to bind the Partnership.
2.3 Liabilities of the General Partner and Other Covered Persons.
(a) General. No Covered Person shall be liable to the Partnership or any
Partner, and each Partner does hereby release such Covered Person for any act or
omission, including any mistake of fact or error in judgment, taken, suffered or
made by such Covered Person in good faith and in the belief that such act or
omission is in or is not contrary to the best interests of the Partnership and
is within the scope of authority granted to such Covered Person by this
Agreement, provided that such act or omission does not constitute Disabling
Conduct by the Covered Person. No Partner shall be liable to the Partnership or
any Partner for any action taken by any other Partner. The provisions of this
Agreement, to the extent that they restrict or eliminate the duties and
liabilities of a Covered Person otherwise existing at law or in equity and to
the extent permitted by law, are agreed by the Partners to replace such other
duties and liabilities of such Covered Person.
(b) Reliance. A Covered Person shall incur no liability in acting in good
faith upon any signature or writing believed by such Covered Person to be
genuine, may rely in good faith on a certificate signed by an executive officer
of any Person in order to ascertain any fact with respect to such Person or
within such Person's knowledge, and may rely in good faith on an opinion of
counsel selected by such Covered Person with
10
respect to legal matters. Each Covered Person may act directly or through such
Covered Person's agents or attorneys. Each Covered Person may consult with
counsel, appraisers, accountants and other skilled Persons selected by such
Covered Person and shall not be liable for anything done, suffered or omitted in
good faith in reliance upon the advice of any of such Persons, except to the
extent that such selection or reliance constituted Disabling Conduct by the
Covered Person. No Covered Person shall be liable to the Partnership or any
Partner for any error of judgment made in good faith by an officer or employee
of such Covered Person, provided that such error does not constitute Disabling
Conduct of such Covered Person.
2.4 Bankruptcy, Dissolution or Withdrawal of the General Partner. In the
event of the bankruptcy or dissolution and commencement of winding-up of the
General Partner or the occurrence of any other event that causes the General
Partner to cease to be a general partner of the Partnership under the
Partnership Law, the Partnership shall be dissolved and wound up as provided in
Article X. The General Partner shall take no action to accomplish its voluntary
dissolution. The General Partner shall not withdraw as general partner of the
Partnership prior to the dissolution of the Partnership except pursuant to
Section 9.1.
ARTICLE III
THE LIMITED PARTNERS
3.1 No Participation in Management, etc. The Limited Partners shall not
take part in the management, control or conduct of the Partnership's investment
or other activities, transact any business in the Partnership's name or have the
power to sign documents for or otherwise bind the Partnership. Except as
expressly provided herein, the Limited Partners shall not be obligated to refer
investments to the Partnership and this Agreement shall not restrict any
investments that the Limited Partners may make or, subject to compliance with
its confidentiality obligations, other activities that a Limited Partners may
undertake. The exercise by the Limited Partners of any right conferred herein
shall not be construed to constitute participation by the Limited Partners in
the control or conduct of the investment or other activities of the Partnership
so as to make such Limited Partners liable as a general partner for the debts
and obligations of the Partnership for the purposes of the Partnership Law or
otherwise. For the avoidance of doubt, to the fullest extent permitted by
applicable law, this Agreement shall not create any fiduciary duty on the part
of the Limited Partners to the Partnership or any other Partner. This Section
3.1 shall not be deemed to limit the rights of the APAX Limited Partner or the
Designated Limited Partner that are expressly provided herein.
3.2 Limitation of Liability. The liability of the Limited Partners shall be
limited to their respective Contributions, and the Limited Partners shall not be
personally liable for any part of the debts or other obligations of the
Partnership or the General
11
Partner, or be obligated to make contributions to the Partnership in excess of
its Contribution.
3.3 VCOC Rights.
(a) The APAX Limited Partner (and the other Limited Partners in the case of
clauses (iii)-(v)) shall be entitled to the following rights with respect to the
Partnership:
(i) The APAX Limited Partner shall be permitted to consult with the
General Partner on significant business issues, including the General
Partner's proposed annual operating plans, and the General Partner will
make itself available to meet with the APAX Limited Partner regularly
during each year at mutually agreeable times for such consultation and to
review progress in achieving said plans.
(ii) In the event of any material development to or affecting the
Partnership, the General Partner shall notify the APAX Limited Partner and
provide the APAX Limited Partner with the opportunity, on reasonable prior
written notice, to consult with the General Partner of its views with
respect thereto.
(iii) Each Limited Partner may examine the books and records of the
Partnership and visit and inspect its facilities and may reasonably request
information at reasonable times and intervals concerning the general status
of the Partnership's financial conditions and operations.
(iv) On reasonable prior written notice, each Limited Partner may
discuss the business operations, properties and financial and other
conditions of the Partnership with the General Partner and with the
Partnership's independent accountants and advisors.
(v) Each Limited Partner shall be entitled to request that the
Partnership provide, when available, copies of (i) all financial
statements, forecasts and projections provided to or approved by the
General Partner; (ii) all consolidated balance sheets and consolidated
statements of income and cash flows; (iii) all notices, minutes, proxy
materials, consents and correspondence and other material that it provides
to Limited Partners; (iv) any letter issued to the Partnership by its
accountants with respect to the Partnership's internal controls; (v) any
documents filed by the Partnership with the United States Securities and
Exchange Commission or any other governmental entity; and (vi) such other
business and financial data as such Limited Partner reasonably may request
in writing from time to time.
(b) Each Limited Partners agrees that it will not disclose to any third
party any information provided to it by the Partnership which is not generally
available to the public or which is specifically designated by the Partnership
as confidential, except with
12
the prior express approval of the General Partner or as may otherwise be
required by applicable law.
(c) The aforementioned rights are intended to satisfy the requirement of
management rights for purposes of qualifying the APAX Limited Partner's
investments in the Partnership as "venture capital investments" for purposes of
the Department of Labor "plan assets" regulation, 29 C.F.R. Section 2510.3-101.
In the event the aforementioned rights are not satisfactory for such purpose,
the General Partner and the APAX Limited Partner shall reasonably cooperate in
good faith to agree upon mutually satisfactory management rights that satisfy
such regulations.
(d) The rights described in this Section 3.3 shall terminate and be of no
further force or effect the date upon which the APAX Limited Partner, together
with its affiliates, ceases to maintain any equity investment in the
Partnership.
(e) The rights described herein shall not be assignable without the written
consent of the General Partner; provided, however, that the APAX Limited Partner
may assign its rights hereunder to any APAX Permitted Transferee that assumes
the obligations of the APAX Limited Partner pursuant hereto.
(f) The rights granted to the APAX Limited Partner hereunder are not in
substitution for, and shall not be deemed to be in limitation of, any rights
otherwise available to it by law or pursuant to any other agreement with the
Partnership.
3.4 Plan Assets.
(a) The Contribution of the APAX Limited Partner shall not cause the assets
of the Partnership to be deemed "plan assets" within the meaning of 29 C.F.R.
2510.3-101.
(b) The APAX Limited Partner shall promptly advise the General Partner of
any event or condition that is reasonably likely to cause the assets of the APAX
Limited Partner to constitute "plan assets" within the meaning of 29 C.F.R.
2510.3-101.
(c) Subject to Section 3.2 hereof, the APAX Limited Partner shall
indemnify, reimburse, defend and hold harmless the General Partner and its
affiliates and each of their respective successors, assigns, officers,
directors, employees, agents, advisers and representatives from and against any
liability suffered or incurred by any such indemnified party to the extent
arising from or related to the assets of the Partnership being deemed "plan
assets" within the meaning of 29 C.F.R. 2510.3-101 as a result of the assets of
the APAX Limited Partner to be deemed "plan assets" within the meaning of 29
C.F.R. 2510.3-101.
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3.5 Bankruptcy or Dissolution of a Limited Partner. The bankruptcy or
dissolution of a Limited Partner shall not in and of itself dissolve or
terminate the Partnership. A Limited Partner shall not withdraw from the
Partnership prior to the dissolution of the Partnership except pursuant to
Section 9.1.
3.6 Provision of Information. Each Partner shall provide any information
reasonably requested by any other Partner in connection with compliance with
anti-money laundering, tax and other applicable laws and regulations.
3.7 Power to Appoint and Remove the General Partner. Notwithstanding any
other provisions of this Agreement, for so long as the Partnership is relying on
the Exemption, the Limited Partners shall have the right to receive notice of,
attend and vote as a Limited Partner at any meeting of the Partnership solely
for the purposes of the appointment or removal of the General Partner.
Immediately following the Partnership ceasing to rely on the Exemption and the
Partnership registering as a mutual fund under the Mutual Funds Law, the right
of the Limited Partners to receive notice of, attend and vote at any meeting of
the Partnership for the purposes of the appointment or removal of General
Partner shall terminate immediately. For the avoidance of doubt, the effective
date of the Exemption ceasing to apply to the Partnership, the Partnership being
registered as a mutual fund under the Mutual Funds Law and the termination of
the rights of Limited Partners to receive notice of, attend and vote at a
meeting for the purposes of the appointment or removal of the General Partner
shall be the date shown on a Partnership's "Certificate of Registration of a
Mutual Fund" issued by the Authority.
ARTICLE IV
GOVERNANCE; TRANSFER, REDEMPTION
4.1 Governance.
(a) General. Except as specifically provided in this Agreement, each
decision required to be made by the Partnership (including in respect of the
voting of any of the shares of Class B Shares held by the Partnership) shall be
made exclusively by the General Partner, provided that the General Partner shall
consult with the APAX Limited Partner in advance with respect to the voting of
the Class B Shares at any CME shareholders' meeting.
(b) Actions Requiring APAX Limited Partner Consent. The General Partner
shall not cause the Partnership to take any of the following actions without the
prior written consent of the APAX Limited Partner:
(i) capital increases or reductions;
(ii) change of the Partnership's purpose;
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(iii) cause the conversion of any Class B Shares held by the
Partnership into Class A Shares other than in connection with a
distribution pursuant to Section 4.4, Section 4.5 or Section 10.2;
(iv) appointment of any officers, employees, representatives, agents
having discretionary authority, or new advisors of the Partnership;
(v) acquire any assets, securities or other property;
(vi) make any distributions, other than as specifically contemplated
by this Agreement;
(vii) appoint or change the auditors of the Partnership;
(viii) admit any new partner into the Partnership except pursuant to
Transfers permitted hereunder, or issue or grant any equity in the
Partnership to any Person other than the Partners;
(ix) incur any indebtedness, borrow money, issue guarantees, or grant
security interests;
(x) grant any loans to any third party; or
(xi) enter into any material contract with RSL or any Affiliate of
RSL.
4.2 Election of Directors of CME.
(a) The General Partner shall cause the Class B Shares held by the
Partnership (and any other shares of the capital stock of CME acquired by the
Partnership after the date hereof) to be voted at each regular or special
meeting of the shareholders of CME called for the purpose of filling positions
on the Board of Directors of CME, or by written consent executed in lieu of such
a meeting of shareholders, in favor of the election to the Board of Directors of
CME of two persons designated by the APAX Limited Partner, and shall take all
such other actions reasonably within its power as a shareholder of CME to cause
such persons to be elected to the Board of Directors of CME.
(b) The General Partner shall not, without the prior written consent of the
APAX Limited Partner, vote the Class B Shares held by the Partnership in favor
of the election to the Board of Directors of CME, or nominate or recommend the
nomination of any person to the Board of Directors of CME, or take (or fail to
take) any other action at any regular or special meeting of the shareholders of
CME that would result in the election of, any persons other than:
(i) RSL;
15
(ii) one other person designated by RSL;
(iii) the CEO of CME as of the date of this Agreement (or any
replacement CEO to whom the APAX Limited Partner has consented);
(iv) the two persons designated by the APAX Limited Partner pursuant
to Section 4.2(a); and
(v) the independent directors nominated by the Corporate
Governance/Nominating Committee of the CME Board of Directors (provided
that any such nominee who is not currently a member of the CME Board of
Directors shall be reasonably acceptable to the APAX Limited Partner).
4.3 Transfer of CME Shares.
(a) The General Partner shall not, and shall cause the Partnership not to,
Transfer any Class A Shares or Class B Shares without the prior written consent
of the APAX Limited Partner. Notwithstanding the foregoing, the General Partner
may cause the Partnership to vote the shares of CME held by the Partnership in
favor of a merger of CME with another Person, provided that the consideration to
be received by the shareholders of CME pursuant to any such merger shall consist
of (i) equity securities traded on a recognized U.S. national securities
exchange, the London Stock Exchange or the Frankfurt Stock Exchange, or reported
through NASDAQ, so long as immediately following such merger Persons who were
shareholders of CME immediately prior to such merger hold at least 20% of the
capital stock of the entity resulting from such merger (a "Stock Merger"), or
(ii) cash for all of the shares outstanding that would result in the APAX
Limited Partner receiving a return on its investment in the Partnership of at
least 2.0x. This Section 4.3(a) will expire on August 31, 2009.
(b) Following the expiration of Section 4.3(a), the General Partner may
Transfer any Class A Shares or Class B Shares held by the Partnership provided
that the General Partner shall give the APAX Limited Partner written notice of
its intent to Transfer any such shares 30 days prior to effecting such Transfer;
provided, further, that during such 30 day period, the APAX Limited Partner may
exercise its rights under Section 4.4 or Section 4.5 and the exercise of such
rights shall supersede any purported Transfer by the General Partner.
(c) Any Transfer by the General Partner of any Class B Shares or Class A
Shares (including Class A Shares issuable upon conversion of Class B Shares)
shall be made pro rata out of (or in respect of) the specific lot or lots of
Class B Shares and Class A Shares contributed or deemed to be contributed by
each Partner.
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4.4 Optional Redemption.
(a) Redemption Notice. From and after August 31, 2009, a Limited Partner
may provide written notice to the General Partner (a "Redemption Notice")
stating that it wishes to have the Partnership redeem all or a portion of its
interests in the Partnership in exchange for a distribution to such Limited
Partner of a pro rata portion of the Class A Shares and Class B Shares owned by
the Partnership. The Redemption Notice shall state the portion (which may be
all) of the interest in the Partnership that the Limited Partner wishes to have
redeemed (the "Redemption Interest").
(b) Right of First Offer. The General Partner shall have 30 days following
its receipt of a Redemption Notice to make an offer (a "Purchase Offer") to
purchase and hold as a Limited Partner, or to cause an RSL Permitted Transferee
to purchase, all or any portion of the Redemption Interest. The Purchase Offer
shall set forth the portion (which may be all) of the Redemption Interest the
General Partner proposes to purchase or cause to be purchased (the "Offered
Interest"), the aggregate price proposed to be paid for the Offered Interest
(the "Offer Price"), and the price per Class B Share (and, if applicable, Class
A Share) corresponding to the Offer Price (the "Per Share Price"). The Limited
Partner shall have 20 days following its receipt of a Purchase Offer to notify
the General Partner (an "Offer Response") whether or not the Limited Partner
wishes to accept the Purchase Offer. If the Limited Partner accepts the Purchase
Offer, then it shall sell, and the General Partner shall purchase, the Offered
Interest at the Offer Price at a closing to be held no later than the 30th day
following the receipt by the General Partner of the Offer Response (such day,
the "Expiration Date").
(c) Right to Cause Redemption. If the General Partner does not make a
Purchase Offer, then, subject to Section 4.4(d), the General Partner shall cause
the Partnership to redeem the Redemption Interest in exchange for a distribution
to the Limited Partner of a pro rata portion of the Class A Shares and Class B
Shares owned by the Partnership as promptly as practicable following the
Expiration Date. If the Limited Partner rejects a Purchase Offer made by the
General Partner, then the General Partner shall promptly cause the Partnership
to redeem the Redemption Interest in exchange for a distribution to the Limited
Partner of a pro rata portion of the Class A Shares and Class B Shares owned by
the Partnership only (i) in connection with the contemporaneous sale by the
Limited Partner to an unaffiliated third party of a number of Class A Shares
(including Class A Shares issueable upon conversion of Class B Shares)
corresponding to all or a portion of the Redemption Interest at a price greater
than the Per Share Price, (ii) in connection with the contemporaneous sale by
the Limited Partner to an unaffiliated third party of a number of Class A Shares
(including Class A Shares issueable upon conversion of Class B Shares)
corresponding to all or a portion of the Redemption Interest at a price equal to
or less than the Per Share Price, provided that the Limited Partner shall have
first given the General Partner 30 days' written notice and the opportunity
during such period to purchase the Redemption Interest (or the portion
17
thereof corresponding to the contemplated sale of Class A Shares) at a price
that corresponds to the price proposed to be paid by such unaffiliated third
party for such Class A Shares, (iii) at the written request of the Limited
Partner made at least two years after the date of the Expiration Date, or (iv)
at the written request of the Limited Partner following a notice given by the
General Partner pursuant to Section 4.3(b), it being understood that (x) the
Partnership will not redeem the Redemption Interest pursuant to this Section 4.4
until the first to occur of the events described in the foregoing clauses (i) -
(iv), and (y) any such redemption shall be subject to Section 4.4(d).
(d) Limitation on Redemptions and Distributions. The redemption of the
Redemption Interest (or any redemption pursuant to Section 4.5), and the
distribution of Class A Shares and/or Class B Shares to the Limited Partner,
shall be subject to the Limited Partner having assumed (and the Partnership
having been released from any obligation with respect to) a pro rata portion of
any indebtedness of the Partnership incurred in accordance with Section 4.1(b)
or 4.7 hereof. Notwithstanding anything herein to the contrary, the General
Partner shall not distribute any Class B Shares to the APAX Limited Partner (or
to any APAX Permitted Transferee) or to any other Limited Partner that is not an
RSL Permitted Transferee, and any Class B Shares that the APAX Limited Partner
(or an APAX Permitted Transferee or such an other Limited Partner) would
otherwise be entitled to receive shall be converted into Class A Shares prior to
such distribution. The Partnership shall have no obligation to redeem the
partnership interest of any Limited Partner under Section 4.4 or Section 4.5 if
and to the extent that such redemption would (i) result in a majority of the
outstanding interests in the Partnership to be owned by persons who are not RSL
Permitted Transferees, or (ii) otherwise cause the Partnership to cease to be a
"Permitted Transferee" under the bye-laws of CME.
4.5 Mandatory Redemption and Distribution. Subject to Section 4.4(d), a
Limited Partner shall have the right to cause the Partnership to redeem the
limited partnership interest of such Limited Partner in exchange for a
distribution to such Limited Partner of a pro rata portion of the Class A Shares
and Class B Shares held by the Partnership (i) in the event of any material
breach by the General Partner of this Agreement or by RSL or the General Partner
of the Purchase Agreement that is not cured or is incapable of being cured
within 45 days after a notice of breach is delivered by such Limited Partner to
the General Partner, or (ii) upon the death or Disability of RSL.
4.6 Acquisition of CME Shares; Margin Loans.
(a) The General Partner may cause the Partnership to acquire Class A Shares
from time to time, whether through open market purchases, privately negotiated
acquisitions, or otherwise. The Parties acknowledge their intention that (i)
such acquisitions will be financed solely by margin loans that are non-recourse
to the Partners, have a term of at least three years, and do not require
interest to be paid in cash prior to
18
maturity, (ii) any such margin loans will include provisions for margin calls
and the sale of CME Class A Shares or Class B Shares to satisfy such calls, and
(iii) any such acquisition of Class A Shares be made in such a manner as to
avoid giving rise to any liability to the Partnership, any Partner or any
Affiliate of any Partner under Section 16(b) of the Exchange Act, and in
compliance with applicable securities law restrictions and CME's ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
policy.
(b) Unless the Partners have agreed otherwise, and provided that such debt
is available on Acceptable Margin Loan Terms, the General Partner shall use its
commercially reasonable efforts to cause the Partnership to incur margin debt of
up to 50% of the value of the Class A Shares and Class B Shares held by the
Partnership, the proceeds of such debt to be used for the purpose of acquiring
additional Class A Shares (subject to Section 4.7(a)) and, if and to the extent
that such proceeds have not been so used by December 31, 2006, to be distributed
to the Partners pro rata.
(c) No Partner shall acquire any Class A Shares for its own account,
provided that (i) if the Partnership has been given the opportunity to acquire
such shares and either the General Partner or the APAX Partner has not consented
to such acquisition, then (x) in the event that the General Partner has
disapproved such acquisition, the APAX Partner may acquire such shares for its
own account, and (b) in the event the APAX Partner has not consented to such
acquisition, then any other Partners may acquire such shares for its own
account, and (ii) if the Partnership is unable to fund such acquisition on terms
reasonably acceptable to both the General Partner and the APAX Limited Partner,
then the Partners that wish to acquire such shares may do so jointly outside of
the Partnership.
(d) The General Partner will give the APAX Limited Partner notice of any
indebtedness incurred by the Partnership within 20 days after the incurrence
thereof.
4.7 Registration of Shares. If so requested by the APAX Limited Partner,
the Partnership shall use its reasonable best efforts to cause CME to effect as
soon thereafter as reasonably practicable the registration under the Securities
Act of the offer and sale by the APAX Limited Partner (or any APAX Permitted
Transferee and any underwriter) of any Class A Shares held by the APAX Limited
Partner (or any APAX Permitted Transferee) on customary terms and in accordance
with the intended method or methods of disposition specified by the APAX Limited
Partner (including, but not limited to, an offering on a delayed or continuous
basis pursuant to Rule 415, or any successor rule to similar effect, promulgated
under the Securities Act), and to cause CME to take such other customary actions
related to such registration, including, without limitation, listing such shares
for trading on any securities exchange or inter-dealer quotation system where
Class A Shares are then listed or traded and registering or qualifying such
shares under state securities laws. In addition, in connection with any
registration by CME of Class A Shares under the Securities Act in a manner which
would permit registration of Class A Shares owned by the APAX Limited Partner
(or any APAX Permitted Transferee), the
19
Partnership shall give its his reasonable best efforts to (i) subject to
appropriate confidentiality restrictions, give prompt written notice to the APAX
Limited Partner (or any APAX Permitted Transferee) of CME's intention to do so
and (ii) arrange for "piggy back" registration, on customary terms, of any Class
A Shares that the APAX Limited Partner (or any APAX Permitted Transferee) gives
timely notice that it wishes to have registered.
ARTICLE V
CONTRIBUTIONS
5.1 CME Shares. The Partners have contributed, or shall be deemed to have
contributed, the following to the Partnership:
General Partner 63,729 Class B Shares
APAX Limited Partner 3,138,566 Class B Shares, and 29,999 Class A Shares
Designated Limited Partner 1 Class A Share
RIC 2,821,976 Class B Shares
RAJ 105,231 Class B Shares
LAL 72,620 Class B Shares
LWG 110,717 Class B Shares, and 30,000 Class A Shares
5.2 Additional Contributions.
(a) At Closing. On the date hereof, the Partners shall have contributed
amounts equaling a pro rata division of the estimated expenses related to the
closing of the transactions contemplated under this Agreement and the Purchase
Agreement. Such contributed amounts shall be limited to the expenses of the
Partnership associated with forming the partnership and shall be borne pro rata,
not to exceed $100,000.
(b) Annually. The Partners shall make capital contributions, pro rata, from
time to time at the request of the General Partner in an aggregate amount not to
exceed $100,000 annually to allow the Partnership to pay Partnership Expenses.
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ARTICLE VI
CAPITAL ACCOUNTS; DISTRIBUTIONS; ALLOCATIONS; WITHHOLDING
6.1 Capital Accounts. There shall be established on the books and records
of the Partnership a capital account (a "Capital Account") for each Partner.
6.2 Adjustments to Capital Accounts. As of the last day of each Period, the
balance in each Partner's Capital Account shall be adjusted by (a) increasing
such balance by (i) such Partner's pro rata share of each item of the
Partnership's income and gain for such Period (allocated in accordance with
Section 6.7) and (ii) the Contributions, if any, made by such Partner during
such Period and (b) decreasing such balance by (i) the amount of cash or the
Value of Securities or other property distributed to such Partner pursuant to
this Agreement and (ii) such Partner's pro rata share of each item of the
Partnership's loss and deduction for such Period (allocated in accordance with
Section 6.7). Each Partner's Capital Account shall be further adjusted with
respect to any special allocations or adjustments pursuant to this Agreement.
6.3 Distributions Attributable to Ownership or Disposition of Class B
Shares. Except as otherwise provided herein, Distributable Cash shall be
distributed promptly after receipt thereof to the Partners pro rata.
6.4 Distributions in Kind.
(a) General. Any distribution in kind shall be made to the Partners pro
rata. Prior to the dissolution and winding up of the Partnership, the General
Partner may distribute only Marketable Securities or, in accordance with the
provisions of Sections 4.4 and 4.5, Class A Shares or Class B Shares as
distributions in kind. In the event that a distribution of any Other Securities
occurs, such Securities shall be deemed to have been sold at their Value and the
proceeds of such sale shall be deemed to have been distributed in the form of
Distributable Cash to the Partners pursuant to this Article VI and Article X.
Distributions of Other Securities or other property shall be made in proportion
to the aggregate amounts that would be distributed to each Partner pursuant to
this Article VI and Article X, as determined by the General Partner. Subject to
the preceding sentence, if a distribution consists of both cash and Securities
or Securities of more than one class (with each lot of Securities with a
separate basis or holding period being treated as a separate class of
Securities), each Partner receiving such distribution shall, to the extent
practicable, receive the same proportion of cash and Securities of each class
being distributed. The General Partner may cause certificates evidencing any
Securities to be distributed to be imprinted with legends as to such
restrictions on Transfer as it may reasonably determine are necessary or
appropriate, including legends as to applicable U.S. federal or state or
non-U.S. securities laws or other legal or contractual restrictions, and may
require any Partner to which Securities are to be distributed, as a condition to
such distribution, to agree in writing (i) that such Partner shall not Transfer
such
21
Securities except in compliance with such restrictions and (ii) to such other
undertakings as the General Partner may reasonably determine are necessary or
appropriate. Any distribution of Class B Shares (or Class A Shares issuable upon
conversion of Class B Shares) to a Partner (including upon liquidation of the
Partnership or pursuant to Section 4.4 or 4.5) shall be of (or in respect of)
the specific lot or lots of Class B Shares or Class A Shares contributed or
deemed to be contributed by such Partner, provided that pursuant to Section
4.4(d), the General Partner shall convert, or cause to be converted, Class B
Shares into Class A Shares prior to any distribution to the APAX Limited Partner
or any other Limited Partner that is not an RSL Permitted Transferee.
(b) Legal, Regulatory or Contractual Restrictions Relating to Distributions
in Kind. If any Partner would otherwise be distributed 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, would subject
such Partner to any material regulatory filing or would raise material
contractual, legal or regulatory issues for such Partner, the General Partner
may (i) cause the Partnership, as agent for such Partner, to sell all or any
portion of such Securities distributable to such Partner on behalf of such
Partner or (ii) deposit such Securities in a trust established by the General
Partner for the benefit and at the expense of such Partner (with voting control
and other terms that are satisfactory to such Partner).
6.5 Negative Capital Accounts. No Partner shall be required to make up a
negative balance in its Capital Account.
6.6 No Withdrawal of Capital. Except as otherwise expressly provided in
this Agreement, no Partner shall have the right to withdraw capital from the
Partnership or to receive any distribution of or return on such Partner's
Contributions.
6.7 Allocations to Capital Accounts. Except as otherwise provided herein,
each item of income, gain, loss or deduction of the Partnership (determined in
accordance with U.S. tax principles as applied to the maintenance of capital
accounts) shall be allocated pro rata among the Capital Accounts of the Partners
with respect to each Period, as of the end of such Period, in a manner that as
closely as possible gives economic effect to Sections 6.2 through 6.6, Section
10.2 and the other relevant provisions of this Agreement. The foregoing
provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Treasury Regulations
under Section 704(b) of the Code and, to the extent not inconsistent with the
provisions of this Agreement, shall be interpreted and applied in a manner
consistent with such Treasury Regulations.
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6.8 Tax Allocations and Other Tax Matters.
(a) Tax Allocations. Each item of income, gain, loss or deduction
recognized by the Partnership shall be allocated among the Partners for U.S.
federal, state and local income tax purposes in the same manner that each such
item is allocated to the Partners' Capital Accounts or as otherwise provided
herein, provided that (i) the General Partner may adjust such allocations as
long as such adjusted allocations have substantial economic effect or are in
accordance with the interests of the Partners, in each case within the meaning
of the Code and the Treasury Regulations (ii) such allocations shall take into
account any adjustments to the tax basis of assets pursuant to sections 734 and
743 and (iii) in accordance with Section 704(c) of the Code and the Treasury
Regulations promulgated thereunder, items of income, gain, loss and deduction
with respect to any property contributed to the Partnership shall be allocated
among the Partners so as to take account of any variation between the adjusted
basis of such property to the Partnership for U.S. federal income tax purposes
and its fair market value using any method the General Partner may elect in good
faith, so long as such method is permitted by the Treasury Regulations
promulgated under Section 704(c) of the Code. Tax credits and tax credit
recapture shall be allocated in accordance with the Partners' interests in the
Partnership as provided in Treasury Regulations section 1.704-1(b)(4)(ii). All
matters concerning allocations for U.S. federal, state, local and non-U.S.
income tax purposes, including accounting procedures, not expressly provided for
by the terms of this Agreement shall be determined in good faith by the General
Partner. Except as provided in Section 6.8(c), all elections required or
permitted to be made by the Partnership under any applicable tax law shall be
made in good faith by the General Partner in its sole discretion; provided that
the General Partner shall not make any election that requires the consent of the
IRS nor any election outside of the ordinary course of business of the
Partnership without the written consent of the APAX Limited Partner. A Limited
Partner shall notify the General Partner in a timely manner of its intention to
(i) file a notice of inconsistent treatment under section 6222(b) of the Code,
(ii) file a request for administrative adjustment of Partnership items, (iii)
file a petition with respect to any Partnership item or other tax matters
involving the Partnership or (iv) enter into a settlement agreement with the
Secretary of the Treasury with respect to any Partnership items. After any such
notification, the General Partner shall determine in good faith whether or not
to make such filing or enter into such agreement, as applicable and practicable,
on behalf of the Partnership. The cost of any audits or adjustments of any
Partner's tax return shall be borne solely by such Limited Partner.
(b) Tax Matters Partner. The General Partner is hereby designated as the
tax matters partner of the Partnership, in accordance with the Treasury
Regulations promulgated pursuant to section 6231 of the Code and any similar
provisions under any other state or local or non-U.S. tax laws. Each Limited
Partner hereby consents to such designation and agrees that, upon the request of
the General Partner, it will execute, certify, acknowledge, deliver, swear to,
file and record at the appropriate public offices
23
such documents as may be necessary or appropriate to evidence such consent. Each
Limited Partner shall have the right to participate in any administrative
proceedings related to the determination of Partnership items at the Partnership
level and shall be responsible for any expenses incurred in connection with such
participation. The cost of any resulting audits or adjustments of a Limited
Partner's tax return shall be borne solely by such Limited Partner.
(c) Partnership for Tax Purposes; Tax Returns. The General Partner shall
execute and file a U.S. Internal Revenue Service Form 8832 with an effective
date as of the date of the formation of the Partnership, electing to classify
the Partnership as a partnership pursuant to Treasury Regulations section
301.7701-3(a). The General Partner is hereby authorized to execute and file for
all of the Partners such Form 8832 for all of the Partners and any comparable
form or document required by any applicable state or local tax law for the
Partnership to be classified as a partnership under such tax law. The
Partnership shall make an election under Section 754 of the Code for the period
including the date of the Closing. The General Partner is hereby authorized to
execute and file all necessary documents to effect such election. The
Partnership shall not elect to be treated as an association taxable as a
corporation for U.S. federal, state or local income tax purposes under Treasury
Regulations section 301.7701-3(a) or under any corresponding provision of state
or local law. The Partnership shall not participate in the establishment of an
"established securities market" (within the meaning of section 1.7704-1(b) of
the Treasury Regulations) or a "secondary market or the substantial equivalent
thereof" (within the meaning of section 1.7704-1(c) of the Treasury Regulations)
or, in either case, the inclusion of interests in the Partnership thereon.
6.9 Withholding.
(a) General. Each Partner shall, to the fullest extent permitted by
applicable law, indemnify and hold harmless the Partnership and the General
Partner, and each Partner hereby agrees that the Partnership shall, to the
fullest extent permitted by applicable law, similarly indemnify and hold
harmless each other Covered Person hereby or pursuant to one or more separate
indemnification agreements with such Covered Persons, in each case where such
Covered Person is or is deemed to be the responsible withholding agent for U.S.
federal, state, local or non-U.S. income tax purposes against all claims,
liabilities and expenses of whatever nature relating to such Covered Person's
obligation to withhold and to pay over, or otherwise pay, any withholding or
other taxes payable by the Partnership with respect to such Partner or as a
result of such Partner's participation in the Partnership except for interest
and penalties in cases in which such Covered Person's failure to withhold or pay
over constituted Disabling Conduct or a willful disregard of any applicable laws
or regulations by such Covered Person. If, pursuant to a separate
indemnification agreement or otherwise, the Partnership shall indemnify or be
required to indemnify any Covered Person against any claims, liabilities or
expenses of whatever nature relating to such Covered Person's obligation to
withhold
24
and to pay over, or otherwise pay, any withholding or other taxes payable by
such Covered Person as a result of any Partner's participation in the
Partnership, such Partner shall pay to the Partnership the amount of the
indemnity paid or required to be paid except for interest and penalties in cases
in which such Covered Person's failure to withhold or pay over constituted
Disabling Conduct or a willful disregard of any applicable laws or regulations
by such Covered Person. The Partnership and the General Partner shall use
commercially reasonable efforts to reduce or eliminate any withholding or other
taxes, and in the event that any action by a Limited Partner is required to
reduce or eliminate such taxes, the Partnership shall timely so advise each such
Limited Partner and give each such Limited Partner the opportunity to take any
such action.
(b) Authority to Withhold; Treatment of Withheld Tax. Notwithstanding any
other provision of this Agreement, each Limited Partner hereby authorizes the
Partnership and the General Partner to withhold and to pay over, or otherwise
pay, any withholding or other taxes payable or required to be deducted by the
Partnership or any of its Affiliates (pursuant to the Code or any provision of
U.S. federal, state, local or non-U.S. tax law) with respect to such Partner or
as a result of such Partner's participation in the Partnership (including as a
result of a distribution in kind to such Partner). If and to the extent that the
Partnership shall be required to withhold or pay any such withholding or other
taxes, such Partner shall be deemed for all purposes of this Agreement to have
received a payment from the Partnership as of the time that such withholding or
other tax is withheld or required to be paid, whichever is earlier, which
payment shall be deemed to be a distribution of Distributable Cash with respect
to such Partner's interest in the Partnership to the extent that such Partner
(or any successor to such Partner's interest in the Partnership) would have
received a cash distribution but for such withholding. The General Partner shall
provide to the Limited Partners evidence of the payment of any such withholding
or other tax and any other documentation that the Limited partner may reasonably
request with respect thereto. The General Partner shall use commercially
reasonable efforts to assist the Limited Partners with any filings or
proceedings to obtain a reduction or refund of such withholding or other taxes.
The Partnership and the General Partner shall use commercially reasonable
efforts to take all steps reasonably required or advisable (or reasonably
requested by a Limited Partner) to reduce or eliminate the imposition of any
withholding or other tax on income derived by the Partnership. To the extent
that such payment exceeds the cash distribution that such Partner would have
received but for such withholding, the General Partner shall notify such Partner
as to the amount of such excess and such Partner shall make a prompt payment to
the Partnership of such amount by wire transfer, which payment shall not
constitute a Contribution and, consequently shall not increase the Capital
Account of such Partner. The Partnership may hold back from any distribution to
such Partner in kind property having a Value equal to the amount of such taxes
until the Partnership has received payment of such amount.
25
(c) Withholding Tax Rate. Any withholdings referred to in this Section 6.9
shall be made at the maximum applicable statutory rate under the applicable tax
law unless the General Partner shall have received an opinion of counsel, or
other evidence, satisfactory to the General Partner to the effect that a lower
rate is applicable or that no withholding is applicable.
(d) Withholding from Distributions to the Partnership. In the event that
the Partnership receives a distribution or payment from or in respect of which
tax has been withheld, the Partnership shall be deemed to have received cash in
an amount equal to the amount of such withheld tax, and each Partner shall be
deemed for all purposes of this Agreement to have received a payment from the
Partnership as of the time of such distribution or payment equal to the portion
of such amount that is attributable to such Partner's interest in the
Partnership as determined in good faith by the General Partner, which payment
shall be deemed to be a distribution of Distributable Cash pursuant to the
relevant clause of Article VI to the extent that such Partner (or any successor
to such Partner's interest in the Partnership) would have received a cash
distribution but for such withholding. To the extent that such payment exceeds
the cash distribution that such Partner would have received but for such
withholding, the General Partner shall notify such Partner as to the amount of
such excess and such Partner shall make a prompt payment to the Partnership of
such amount by wire transfer, which payment shall not constitute a Contribution
and, consequently, shall not increase the Capital Account of such Partner. In
the event that the Partnership anticipates receiving a distribution or payment
from which tax will be withheld in kind, the General Partner may elect to
prevent such in-kind withholding by paying such tax in cash and may require each
Partner in advance of such distribution to make a prompt payment to the
Partnership by wire transfer of the amount of such tax attributable to such
Partner's interest in the Partnership as equitably determined by the General
Partner, which payment shall not constitute a Contribution and, consequently,
shall not increase the Capital Account of such Partner.
6.10 Overriding Limitations on Distributions. Notwithstanding any other
provision of this Agreement, distributions shall be made in compliance with the
Partnership Law and any other applicable law.
ARTICLE VII
BOOKS AND RECORDS; REPORTS TO PARTNERS; ETC.
7.1 Maintenance of Books and Records. The General Partner shall keep or
cause to be kept at the address of the General Partner (or such other place as
the General Partner shall determine, and if during the Term, shall advise the
Limited Partner in writing) full and accurate accounts of the transactions of
the Partnership in proper books and records of account, during the Term and for
a period of at least four years thereafter,
26
which shall set forth all information required by the Partnership Law. Such
books and records shall be maintained on the basis utilized in preparing the
Partnership's U.S. federal income tax return, incorporating the accrual method
of accounting. Such information as is necessary to reconcile such books and
records with U.S. generally accepted accounting principles shall also be
maintained. Unless prohibited by legal restriction and subject to reasonable
confidentiality undertakings, such books and records shall be available, upon
two Business Days' notice to the General Partner, for inspection and copying at
reasonable times during business hours by each Limited Partner or its duly
authorized agents or representatives for any purpose reasonably related to such
Limited Partner's interest as a limited partner in the Partnership.
7.2 Information Regarding CME. To the fullest extent permitted by law, the
General Partner will provide the Limited Partners with copies of all information
concerning CME that the Partnership receives in its capacity as a shareholder of
CME, as promptly as practicable following such receipt.
7.3 Partnership Information. Except as provided herein or as required by
law, the Limited Partners shall have no further rights to information about the
Partnership.
7.4 Tax Information. The General Partner shall use its reasonable best
efforts to prepare and mail within 90 days after the end of each Fiscal Year, or
as soon as practicable thereafter (subject to reasonable delays in the event of
the late receipt by the Partnership of any necessary financial statements) to
the Limited Partners (and each other Person that was a Limited Partner during
such Fiscal Year or its legal representatives), U.S. Internal Revenue Service
Schedule K-1, "Partner's Share of Income, Credits, Deductions, Etc.", or any
successor schedule or form, for such Person.
ARTICLE VIII
INDEMNIFICATION
8.1 General. The Partnership shall and hereby does, to the fullest extent
permitted by applicable law, indemnify and hold harmless each Covered Person
from and against any and all claims, demands, liabilities, costs, expenses,
damages, losses, suits, proceedings and actions, whether judicial,
administrative, investigative or otherwise, of whatever nature, known or
unknown, liquidated or unliquidated ("Claims"), that may accrue to or be
incurred by any Covered Person, or in which any Covered Person may become
involved, as a party or otherwise, or with which any Covered Person may be
threatened, relating to or arising out of the investment or other activities of
the Partnership, activities undertaken in connection with the Partnership, or
otherwise relating to or arising out of this Agreement, including amounts paid
in satisfaction of judgments, in compromise or as fines or penalties, and
counsel fees and expenses incurred in connection with the preparation for or
defense or disposition of any
27
investigation, action, suit, arbitration or other proceeding (a "Proceeding"),
whether civil or criminal (all of such Claims, amounts and expenses referred to
in this Section 8.1 are referred to collectively as "Damages"), except to the
extent that it shall have been determined ultimately by a court of competent
jurisdiction that such Damages arose primarily from Disabling Conduct of such
Covered Person. The termination of any Proceeding by settlement shall not, of
itself, create a presumption that any Damages relating to such settlement or
otherwise relating to such Proceeding arose primarily from Disabling Conduct of
any Covered Person. The General Partner shall be authorized on behalf of the
Partnership to enter into indemnification agreements containing terms no more
favorable to the Covered Persons than those contained in this Section 8.1(a)
with any of the Covered Persons from time to time.
8.2 Expenses, etc. Reasonable expenses (including attorney's fees) incurred
by a Covered Person in defense or settlement of any Claim that may be subject to
a right of indemnification hereunder may be advanced by the Partnership to such
Covered Person prior to the final disposition thereof upon receipt of an
undertaking by or on behalf of such Covered Person to repay such amount if it
shall be determined ultimately by a court of competent jurisdiction that the
Covered Person was not entitled to be indemnified hereunder. Judgments against
the Partnership and the General Partner, in respect of which the General Partner
is entitled to indemnification, shall first be satisfied from Partnership
assets, including Contributions and Capital Accounts, before the General Partner
is responsible therefor.
8.3 Notices of Claims, etc. Promptly after receipt by a Covered Person of
notice of the commencement of any Proceeding, such Covered Person shall, if a
claim for indemnification in respect thereof is to be made against the
Partnership, give written notice to the Partnership of the commencement of such
Proceeding, provided that the failure of any Covered Person to give such notice
as provided herein shall not relieve the Partnership of its obligations under
this Section 8.3 except to the extent that the Partnership is actually
prejudiced by such failure to give such notice. If any such Proceeding is
brought against a Covered Person (other than a derivative suit in right of the
General Partner in its capacity as General Partner of the Partnership), the
General Partner (in its capacity as General Partner of the Partnership) will be
entitled to participate in and to assume the defense thereof to the extent that
the General Partner may wish, with counsel reasonably satisfactory to such
Covered Person. After notice from the General Partner to such Covered Person of
the General Partner's election to assume the defense of such Proceeding, the
Partnership will not be liable for expenses subsequently incurred by such
Covered Person in connection with the defense thereof. The General Partner (in
its capacity as General Partner of the Partnership) will not consent to entry of
any judgment or enter into any settlement of such Proceeding that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Covered Person of a release from all liability in respect to such
Proceeding and the related Claim.
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ARTICLE IX
TRANSFERS
9.1 Transfers by Partners. Except as set forth in Sections 9.2 and 9.3, no
Partner may Transfer all or any part of its interest in the Partnership,
including any interest in the capital or profits of the Partnership and the
right to receive distributions from the Partnership.
9.2 Transfer to a Successor Limited Partnership. Subject to the consent of
the General Partner, at the request of the APAX Limited Partner and provided
that such Transfer would not produce detrimental tax or other consequences to
any Partner, the Partners will Transfer all interests in the Partnership to a
successor limited partnership, to which the Partnership would be a wholly owned
subsidiary, governed on the same terms as provided herein, to be held jointly
and solely by the Partners.
9.3 Conditions to Transfer. A Partner may Transfer an interest in the
Partnership subject to the satisfaction of the following conditions:
(a) the Partner (the "Transferor") or the Person to whom such Transfer is
to be made (a "Transferee") shall have undertaken to pay all reasonable expenses
incurred by the Partnership in connection therewith (whether or not such
proposed Transfer is consummated);
(b) the General Partner (in the case of a Transfer by any Limited Partner)
or the APAX Limited Partner (in the case of a Transfer by the General Partner)
(such Partner, the "Approving Partner"), as the case may be, shall have been
given at least 30 days' prior written notice of the proposed Transfer;
(c) the Partnership shall have received from the Transferee and, in the
case of clause (ii) below, from the Transferor to the extent specified by the
Approving Partner, (i) such assignment agreement and other documents,
instruments, certificates and representations as may be reasonably requested by
the Approving Partner, pursuant to which such Transferee shall have agreed to be
bound by this Agreement, including if requested a counterpart of this Agreement
executed by or on behalf of such Transferee and (ii) such other documents,
opinions, instruments and certificates as the Approving Partner shall have
reasonably requested.
(d) in the case of a Transfer (i) by the General Partner or a Lauder
Limited Partner, the Transferee shall be an RSL Permitted Transferee, (ii) by
the APAX Limited Partner or the Designated Limited Partner, the Transferee shall
be an APAX Permitted Transferee, or (iii) to a Person providing financing to the
Partnership, such Transferee shall be bona fide pledgee of interests in the
Partnership. Notwithstanding
29
the foregoing, Partnership interests may be transferred from one Partner to
another or as provided in Section 9.2; and
(e) in the case of a Transfer by a Limited Partner, the prior written
consent of the General Partner to such Transfer shall have been obtained by such
Limited Partner.
The Approving Partner may in its sole discretion waive any or all of the
conditions set forth in this Section 9.1.
9.4 Transfers in Violation of Agreement Not Recognized. Unless effected in
accordance with and as permitted by this Agreement, no attempted Transfer or
substitution shall be recognized by the Partnership. Any purported Transfer or
substitution not effected in accordance with and as permitted by this Agreement
shall, to the fullest extent permitted by law, be void and the Partnership shall
recognize no rights of the purported Transferee, including the right to receive
distributions (directly or indirectly) from the Partnership or to acquire an
interest in the capital or profits of the Partnership.
9.5 Tax Reporting. Promptly upon request therefor by the General Partner, a
Transferee shall provide the General Partner with the information specified in
section 1.743-1(k)(2) of the Treasury Regulations (or any successor provision)
in the manner specified by such regulation, whether or not an election under
section 754 of the Code is in effect with respect to the Partnership, and any
other information reasonably requested by the General Partner in connection with
adjustments made under section 743 of the Code or an election made under section
743(e) of the Code. If the General Partner informs the Transferee that the
Partnership has made or is considering making an election to be treated as an
"electing investment partnership" (within the meaning of section 743(e) of the
Code), the Transferee shall (i) promptly upon request therefor by the General
Partner, provide to the General Partner such information as shall enable the
Partnership to comply with its obligations under section 6031(f) of the Code
with respect to its Interest and (ii) cooperate with the General Partner to
maintain that status and shall not take any action that would be inconsistent
with the treatment of the Partnership as an "electing investment partnership" if
such election is made. If the General Partner informs the Transferor that the
Partnership has made or is considering making an election to be treated as an
"electing investment partnership" (within the meaning of section 743(e) of the
Code), the Transferor shall, promptly upon request therefor by the General
Partner, provide to the General Partner such information as shall enable the
Partnership to comply with its obligations under section 6031(f) of the Code
with respect to the transferred Interest. If any Limited Partner is treated as a
partnership for U.S. federal income tax purposes, it shall promptly furnish to
the General Partner information regarding any Transfers of interests in such
Limited Partner that could result in (A) a deemed Transfer of such Limited
Partner's interest in the Partnership or the Partnership's property for U.S.
30
federal income tax purposes or (B) the Partnership being required to make any
adjustments to tax basis of its property under section 734 or 743 of the Code.
ARTICLE X
DISSOLUTION AND WINDING UP OF THE PARTNERSHIP
10.1 Dissolution. Subject to the Partnership Law, there will be a
dissolution of the Partnership (meaning that the business of the Partnership
shall be discontinued) and its affairs shall be wound up upon the first to occur
of any of the following events:
(a) the expiration of the Term as provided in Section 1.5;
(b) the Business Day following the date on which all capital stock acquired
or agreed to be acquired by the Partnership has been sold or otherwise disposed
of;
(c) the withdrawal, removal, bankruptcy or dissolution and commencement of
winding up of the General Partner, or the assignment by the General Partner of
its entire interest in the Partnership (unless the Transferee is admitted as a
replacement general partner of the Partnership pursuant to Section 9.1 and such
replacement general partner meets the criteria specified in the Partnership
Law), or the occurrence of any other event that causes the General Partner to
cease to be a general partner of the Partnership under the Partnership Law,
unless (i) at the time of the occurrence of such event there is at least one
remaining general partner of the Partnership that meets the criteria specified
in the Partnership Law and that is hereby authorized to and does (unanimously in
the case of more than one general partner) elect to continue the business of the
Partnership without dissolution or (ii) within 90 days after the occurrence of
such event the Limited Partners agree in writing to continue the business of the
Partnership and to the appointment, in accordance with the Partnership Law, of
one or more additional general partners of the Partnership;
(d) the entry of a decree of judicial dissolution under the Partnership
Law; and
(e) the determination by the General Partner to dissolve the Partnership
for any other reason, provided that such dissolution occurs on or after August
31, 2009.
10.2 Winding Up.
(a) Distribution of Class A and Class B Shares. Upon the dissolution of the
Partnership, the General Partner will cause the Partnership, as promptly as
practicable, to distribute to the Partners, pro rata, all Class A Shares and
Class B Shares held by the Partnership, provided that (x) the General Partner
shall not distribute any Class B Shares to the APAX Limited Partner (or any APAX
Permitted Transferee), or to any other Limited Partner that is not an RSL
Permitted Transferee, and any Class B Shares that the
31
APAX Limited Partner (or APAX Permitted Transferee or such an other Limited
Partner) would otherwise be entitled to receive shall be converted into Class A
Shares prior to such distribution, (y) if the Partnership shall have incurred
any indebtedness in accordance with Section 4.1(b) or 4.7 hereof, the General
Partner shall notify each Partner of such occurrence and, at the option of each
Partner, either (i) such Partner shall assume (and the Partnership shall be
released from any obligation with respect to) such Partner's pro rata portion of
such indebtedness, or (ii) the Partnership shall liquidate such number of Class
A Shares and Class B Shares as is necessary to satisfy such Partner's pro rata
share of such indebtedness prior to such distribution, and (z) if the General
Partner reasonably determines, after consultation with the APAX Limited Partner,
that it shall be necessary to retain and not distribute a number of Class A
Shares or Class B Shares in order to satisfy any other obligations of the
Partnership and the expenses of winding up (any such obligation and expenses,
the "Retained Obligation"), the General Partner shall notify each Partner of
such necessity and either, at the option of each Partner, (1) the Partnership
shall retain, and not distribute, such number of Class A Shares or Class B
Shares equal to such Partner's pro rata portion of such Retained Obligation as
necessary to satisfy such Partner's pro rata portion of the Retained Obligation
(any such shares, "Retained Shares") or (2) each such Partner shall otherwise
provide credit worthy support (such support to be reasonably acceptable to the
General Partner) for the Retained Obligation.
(b) Liquidation of Remaining Assets; Application and Distribution of
Proceeds. After giving effect to Section 10.2(a), the General Partner shall use
its commercially reasonable efforts to liquidate the Retained Shares and all
other assets of the Partnership in a prompt and orderly manner, the proceeds of
which shall be distributed in the following order of priority:
(i) First, to (A) creditors in satisfaction of the debts and
liabilities of the Partnership (other than any loans or advances that may
have been made by any of the Partners to the Partnership), (B) the expenses
of liquidation, and (C) the establishment of any reasonable reserves (which
may be funded by a liquidating trust) to be established by the General
Partner in amounts reasonably determined by it to be necessary for the
payment of the Partnership's expenses, liabilities and other obligations
(whether fixed or contingent); and
(ii) Second, to the Partners in accordance with Article VI.
(c) Time for Liquidation, etc. A reasonable time period shall be allowed
for the orderly winding up and liquidation of the assets of the Partnership and
the discharge of liabilities to creditors so as to enable the General Partner to
seek to minimize potential losses upon such liquidation. The provisions of this
Agreement shall remain in full force and effect during the period of winding up
and until the filing of a Notice of Dissolution
32
of the Partnership with the Registrar of Exempted Limited Partnerships as
provided in Section 10.3.
10.3 Notice of Dissolution. Upon completion of the actions contemplated by
Section 10.2, the General Partner shall execute, acknowledge and cause to be
filed a Notice of Dissolution with the Registrar of Exempted Limited
Partnerships of the Cayman Islands.
ARTICLE XI
MISCELLANEOUS
11.1 Amendments. The terms and provisions of this Agreement may be waived,
modified or amended only with the written consent of each of the General Partner
and the Limited Partners, provided that the General Partner may, without the
consent of the Limited Partners (but following consultation with the APAX
Limited Partner):
(i) enter into agreements with Persons that are permitted Transferees
pursuant to the terms of this Agreement, providing in substance that such
Transferees will be bound by this Agreement;
(ii) amend this Agreement as may be required to implement permitted
Transfers of interests of Partners;
(iii) amend this Agreement (A) to satisfy any requirements,
conditions, guidelines or opinions contained in any opinion, directive,
order, ruling or regulation of the Securities and Exchange Commission, the
Internal Revenue Service or any other U.S. federal, state or non-U.S.
governmental agency, or in any U.S. federal, state or non-U.S. statute,
compliance with which the General Partner deems to be in the best interest
of the Partnership, or (B) to change the name of the Partnership; and
(iv) amend this Agreement as may be necessary or advisable to comply
with any anti-money laundering or anti-terrorist laws, rules, regulations,
directives or special measures.
11.2 Notices. All notices, consents, requests, instructions, approvals and
other communications provided for in this Agreement shall be in writing and
shall be deemed validly given upon personal delivery or one day later being sent
by overnight courier service or by telecopy (so long as for notices or other
communications sent by telecopy, the transmitting telecopy machine records
electronic conformation of the due transmission of the notice), at the following
address or telecopy number, or at such other address or telecopy number as a
party may designate to the other parties:
33
(a) if to the General Partner, at its address set forth in the first
sentence of Section 1.3(b), with copies to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
Debevoise & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the APAX Limited Partner, to:
▇▇▇▇▇ (Guernsey) L.P.
▇▇-▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: 44 1381 716 574
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to RIC, RIC Cayman or RAJ, to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
34
with a copy to:
Debevoise & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(d) if to LAL or LWG, to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
11.3 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be to be deemed an original and all of which
together shall be deemed to be one and the same instrument.
11.4 Table of Contents and Headings. The table of contents and the headings
of the articles, sections and subsections of this Agreement are inserted for
convenience of reference only and shall not be deemed to constitute a part
hereof or affect the interpretation hereof.
11.5 Successors and Assigns. This Agreement shall inure to the benefit of
the Partners, and shall be binding upon the parties, and, subject to Article IX,
their respective successors, permitted assigns, heirs and legal representatives.
11.6 Severability. Every term and provision of this Agreement is intended
to be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such term or provision will be enforced to the maximum extent
permitted by law and, in any event, such illegality or invalidity shall not
affect the validity of the remainder of this Agreement.
35
11.7 Further Actions. Each Limited Partner shall execute and deliver such
other certificates, agreements and documents, and take such other actions, as
may reasonably be requested by the General Partner in connection with the
formation of the Partnership and the achievement of its purposes or to give
effect to the provisions of this Agreement, in each case as are not inconsistent
with the terms and provisions of this Agreement, including any documents that
the General Partner determines to be 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 its investment and other
activities and all such agreements, certificates, tax statements and other
documents as may be required to be filed by or on behalf of the Partnership.
11.8 Determinations of the Partners. To the fullest extent permitted by law
and notwithstanding any other provision of this Agreement or in any other
agreement contemplated herein or applicable provisions of law or equity or
otherwise, whenever in this Agreement a Partner is permitted or required to make
a decision in its "sole discretion", such 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 interest of or
factors affecting the Partnership or any other Person, provided that each
Partner shall always exercise such discretion, and otherwise act under this
Agreement, in good faith. If any questions should arise with respect to the
operation of the Partnership that are not specifically provided for in this
Agreement or the Partnership Law, or with respect to the interpretation of this
Agreement, the General Partner is hereby authorized to make a final
determination with respect to any such question and to interpret this Agreement
in good faith, and its determination and interpretation so made shall be final
and binding on all parties, absent manifest error.
11.9 Non-Waiver. No provision of this Agreement shall be deemed to have
been waived unless such waiver is given in writing, and no such waiver shall be
deemed to be a waiver of any other or further obligation or liability of the
party or parties in whose favor such waiver was given.
11.10 Applicable Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE CAYMAN ISLANDS.
11.11 Confidentiality.
(a) Each Partner, acting on its own behalf and on behalf of its Affiliates,
agrees that it will hold in strict confidence all information disclosed in
connection with this Agreement, including its existence and any information
relating to the Partnership, and will not disclose the same to any Person other
than a RSL Permitted Transferee, an APAX Permitted Transferee or other financial
investors which are investors in any of the APAX Permitted Transferees (provided
that no material non-public information with
36
respect to CME will be disclosed unless the recipient is party to a
confidentiality agreement) without the prior written consent of the other
Partner unless (i) such information is already, or becomes, publicly available,
through no fault of the Partner seeking to disclose such information; (ii) the
use of such information is necessary or appropriate in making any filing or
obtaining any consent required for the consummation of the transactions
contemplated in this Agreement under applicable laws or regulations; or (iii)
requested or required to disclose such information by law or regulation, by any
court or other judicial authority or pursuant to any enquiry or investigation by
any governmental authority which is lawfully entitled to require any such
disclosure, and then the Partner so requested or required shall provide the
other Partner with prompt notice of such request or requirement and to the full
extent possible before such disclosure. The parties hereto receiving the above
mentioned notice may then either seek appropriate protective relief from all or
part of such request or requirement, including confidential treatment of any
such disclosure if required, or waive the disclosing Partner's compliance with
this Agreement with respect to all or part of such request or requirement. The
disclosing Partner will cooperate with the attempts of any party hereto to
obtain any protective relief which it chooses to seek. If, after any such party
has had a reasonable opportunity to seek such relief, it fails to obtain such
relief, and, in the opinion of counsel for the Partner seeking to disclose such
information, such Partner is legally compelled to disclose any confidential
information to such governmental authority, then such Partner may disclose that
portion of confidential information which counsel to such Partner advises that
it must disclose.
(b) The General Partner and the APAX Limited Partner shall consult with
each other and shall obtain the consent of the other party prior to issuing or
causing the publication of any press release or other public announcement with
respect to, or otherwise make any public statement concerning the transactions
contemplated by, this Agreement, except as may be required by applicable Law or
legal process.
11.12 Survival of Certain Provisions. Notwithstanding anything herein to
the contrary, the obligations of each Partner pursuant to Sections 6.9 and 11.11
and Article VIII, and any obligation of the APAX Limited Partner pursuant to
Section 4.4(d), shall survive the termination or expiration of this Agreement
and the dissolution, winding up and termination of the Partnership.
11.13 Waiver of Partition. Except as may otherwise be provided by law in
connection with the dissolution, winding up and liquidation 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.
11.14 Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to the subject matter of this Agreement and supersedes all
other prior agreements, understandings, statements, representations and
warranties, oral or written,
37
express or implied, between the parties and their respective affiliates,
representatives and agents in respect of the subject matter of this Agreement.
11.15 No Third-Party Beneficiaries. The provisions of this Agreement are
intended solely to benefit the Partners and Covered Persons and, to the fullest
extent permitted by applicable law, shall not be construed as conferring any
legal or equitable right, remedy, claim or benefit upon any creditor of the
Partnership (and no such creditor shall be a third party beneficiary of this
Agreement), any Partner or any other Person and no Partner nor any Covered
Person shall have any duty or obligation to any creditor of the Partnership to
make any contributions to the Partnership pursuant to any provision of this
Agreement.
11.16 Currency. The term "dollar" and the symbol "$," wherever used in this
Agreement, shall mean the United States dollar.
11.17 Compliance with Anti-Money Laundering Requirements. Notwithstanding
any other provision of this Agreement to the contrary, the General Partner, in
its own name and on behalf of the Partnership, shall be authorized without the
consent of any Person, including any other Partner, to take such action as it
determines in its sole discretion to be necessary or advisable to comply with
any anti-money laundering or anti-terrorist laws, rules, regulations, directives
or special measures.
11.18 Counsel. The Limited Partner hereby acknowledges and agrees that
Debevoise & ▇▇▇▇▇▇▇▇ LLP and any other law firm retained by the General Partner
in connection with the organization of the Partnership, the offering of
interests in the Partnership, the management and operation of the Partnership,
or any dispute between the General Partner and any Limited Partner, is acting as
counsel to the General Partner and as such does not represent or owe any duty to
the Limited Partners in connection with such retention.
11.19 Submission to Jurisdiction; Venue; Waiver of Jury Trial. Unless the
General Partner otherwise agrees in writing, any legal action or proceeding with
respect to this Agreement may be brought in the courts of the State of New York,
and, by execution and delivery of this Agreement, each Partner hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and
hereby irrevocably waives any objection that it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out of or
in connection with this Agreement brought in the aforesaid courts, and hereby
further irrevocably waives, to the fullest extent permitted by applicable law,
its rights to plead or claim and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum. UNLESS THE GENERAL PARTNER OTHERWISE AGREES IN WRITING,
EACH PARTNER HEREBY IRREVOCABLY AND
38
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT.
39
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
Deed on the date first above written.
RSL INVESTMENT LLC, as general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
In the presence of:
By: /s/ ▇▇▇▇▇ ▇'▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇'▇▇▇▇▇
Witness
RSL INVESTMENTS CORPORATION,
as limited partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
In the presence of:
By: /s/ ▇▇▇▇▇ ▇'▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇'▇▇▇▇▇
Witness
40
RAJ FAMILY PARTNERS, L.P.,
as limited partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, Secretary and
Treasurer of RAJ Family
Corporation, general partner
of RAJ Family Partners, L.P.
In the presence of:
By: /s/ ▇▇▇▇▇ ▇'▇▇▇▇▇
------------------------------------
Name:
----------------------------------
Witness
41
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as limited partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
In the presence of:
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Witness
LWG FAMILY PARTNERS, L.P.,
as limited partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President of LWG Family
Corporation, its Managing
Partner
In the presence of:
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Witness
42
▇▇▇▇▇ (GUERNSEY) L.P.,
as limited partner
By: ▇▇▇▇▇ (GUERNSEY) GP LTD,
acting in its capacity as manager
of ▇▇▇▇▇ (Guernsey) L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director, For and on behalf of
International Private Equity
Services Limited as Secretary
In the presence of:
By: /s/ Simon March
------------------------------------
Name: Simon March
Witness
▇▇▇▇▇▇▇ ▇▇▇▇, as Limited Partner
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------
In the presence of:
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Witness
43
