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MMC CAPITAL TECH ▇▇ ▇▇, L.P.
(a Delaware limited partnership)
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AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
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Dated as of August 22, 2000
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TABLE OF CONTENTS
ARTICLE I
ORGANIZATION, ETC.
1.1 Continuation.....................................................1
1.2 Name and Offices.................................................2
1.3 Fiscal Year......................................................3
ARTICLE II
PURPOSES AND POWERS
2.1 Purposes.........................................................3
2.2 Powers of the Partnership........................................3
ARTICLE III
CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; ALLOCATIONS
3.1 Capital Contributions............................................4
3.2 Capital Accounts.................................................5
3.3 Adjustments to Capital Accounts..................................5
3.4 Sharing of Carried Interest; Points..............................5
3.5 Allocations......................................................6
3.6 Tax Matters......................................................8
3.7 Excused Investment...............................................9
3.8 Estate Partners..................................................9
ARTICLE IV
DISTRIBUTIONS; WITHHOLDING
4.1 Withdrawal of Capital............................................9
4.2 Distributions....................................................9
4.3 Holdback Accounts...............................................12
4.4 Return of Distributions.........................................13
4.5 Limitations on Distributions....................................14
4.6 Withholding.....................................................15
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ARTICLE V
MANAGEMENT; VOTING
5.1 Partners........................................................15
5.2 The General Partners............................................15
5.3 Ability to Bind the Partnership.................................17
5.4 Actions and Determinations of the Partnership...................17
5.5 Voting..........................................................17
5.6 Discretion......................................................17
ARTICLE VI
LIABILITY, EXCULPATION AND INDEMNIFICATION
6.1 Liability.......................................................18
6.2 Exculpation.....................................................18
6.3 Indemnification.................................................19
ARTICLE VII
BOOKS AND RECORDS; REPORTS TO PARTNERS
7.1 Books and Records...............................................21
7.2 United States Federal, State and Local Income Tax Information...21
7.3 Reports to Partners.............................................21
ARTICLE VIII
ADMISSION OF ADDITIONAL PARTNERS; TRANSFERS
8.1 Admission of Additional Partners................................21
8.2 Transfer by Partners............................................22
8.3 Further Actions.................................................22
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ARTICLE IX
SPECIAL ASSIGNEES AND CERTAIN OTHER MATTERS
9.1 Becoming a Special Assignee.....................................23
9.2 Consequences of Special Assignee Status.........................23
9.3 Economic Rights of Special Assignees............................24
ARTICLE X
DURATION AND TERMINATION OF THE PARTNERSHIP
10.1 Duration........................................................27
10.2 Winding Up......................................................27
10.3 Final Distribution..............................................28
10.4 Time for Liquidation, etc.......................................28
10.5 Termination.....................................................28
10.6 Death, Legal Incapacity, etc....................................28
ARTICLE XI
DEFINITIONS
11.1 Definitions.....................................................29
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ARTICLE XII
MISCELLANEOUS
12.1 Notices.........................................................38
12.2 Counterparts....................................................38
12.3 Table of Contents and Headings..................................38
12.4 Successors and Assigns..........................................38
12.5 Severability....................................................38
12.6 Governing Law...................................................38
12.7 Confidentiality.................................................39
12.8 Survival of Certain Provisions..................................39
12.9 Waiver of Partition.............................................39
12.10 Power of Attorney...............................................39
12.11 Modifications...................................................41
12.12 Entire Agreement................................................41
12.13 Further Actions.................................................41
Schedule A -- Partnership Register
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This Amended and Restated Limited Partnership Agreement (as from time
to time amended, supplemented or restated, this "AGREEMENT") of MMC CAPITAL TECH
▇▇ ▇▇, L.P. (formerly known as ▇▇▇▇▇ & McLennan Capital Tech ▇▇ ▇▇, L.P.), a
Delaware limited partnership (the "PARTNERSHIP"), is made and entered into as of
August 22, 2000 among: SF Tech Fund II, a Delaware limited liability company; CD
Tech Fund II, LLC, a Delaware limited liability company; and ▇▇▇▇▇ & McLennan
Tech ▇▇ ▇▇, Inc., a Delaware corporation ("▇▇ ▇▇") (collectively, the "GENERAL
PARTNERS"); and the Persons identified on the signature pages hereto as Limited
Partners as of the date hereof (the "LIMITED PARTNERS"); and the other Persons
from time to time listed as Limited Partners on the Partnership Register
(together with the General Partners, the "PARTNERS", such term to include any
Person hereinafter admitted to the Partnership as a Limited Partner or General
Partner, as the case may be, and to exclude any Person that ceases to be a
Partner in accordance with the terms hereof). Certain capitalized terms used
herein without definition have the meanings specified in Article XI.
WHEREAS, the Partnership is a limited partnership, organized under the
laws of the State of Delaware pursuant to the Act and among the General Partners
and the Limited Partners; and
WHEREAS, the Partnership was formed on April 3, 2000 by the filing of
the Certificate of Limited Partnership of the Partnership (as it has been and
may be amended from time to time, the "CERTIFICATE") in the Office of the
Secretary of State of the State of Delaware (the "SECRETARY OF STATE") and
constituted pursuant to the Limited Partnership Agreement of the Partnership,
dated as of April 3, 2000 (the "INITIAL AGREEMENT"); and
WHEREAS, the Partners seek to amend and restate the Initial Agreement
in its entirety;
NOW, THEREFORE, in consideration of the premises and mutual promises
contained in this Agreement, the parties hereto hereby amend and restate the
Initial Agreement in its entirety and agree as follows:
ARTICLE I
ORGANIZATION, ETC.
1.1 CONTINUATION.
(a) GENERAL. The Partners hereby agree to continue the Partnership as
a limited partnership subject to the terms of this Agreement and under and
pursuant to the provisions of the Act and agree that the rights, duties and
liabilities of the Partners shall be as provided in the Act, except as otherwise
provided herein.
(b) ADMISSIONS. Upon the execution of this Agreement or a counterpart
of this Agreement, each of the General Partners shall continue as General
Partners and each of the Persons who were limited partners of the Partnership
immediately prior to the amendment and restatement hereby of the Initial
Agreement shall continue as Limited Partners, and each of the other Persons
listed on Schedule A hereto shall be admitted to the Partnership as a Limited
Partner. Subject to the other provisions of this Agreement, a Person may be
admitted as a Partner of the Partnership at the time that (I) this Agreement or
a counterpart of this Agreement and any other documents requested by any of the
General Partners are executed by or on behalf of such Person and (II) such
Person is listed on the Partnership Register.
(c) PARTNERSHIP REGISTER. The General Partners shall cause to be
maintained in the principal office of the Partnership a register setting forth,
with respect to each Partner, such Partner's name, mailing address, Capital
Commitment, total Capital Contributions to date, Minimum Ordinary Points,
Minimum Special Points and, with respect to each Portfolio Investment, the
number of Ordinary Points and Special Points allocated to each Partner and the
Capital Contribution made by each Partner, and such other information as the
General Partners may deem necessary or desirable (the "PARTNERSHIP REGISTER").
The General Partners shall from time to time update the Partnership Register as
necessary to maintain the accuracy of the information contained therein. Except
as may otherwise be provided herein, any reference in this Agreement to the
Partnership Register shall be deemed to be a reference to the Partnership
Register as in effect from time to time. The form of Partnership Register as in
effect on the date hereof shall be attached hereto as Schedule A, and each
Partner shall receive as the Schedule A attached to such Partner's Agreement the
information set forth on the Partnership Register on the date hereof with
respect to such Partner's interest in the Partnership, PROVIDED that no Limited
Partner shall have the right to any information set forth on the Partnership
Register with respect to any other Partner. No action of any Limited Partner,
and no amendment of any Schedule A to this Agreement, shall be required to amend
or update the Partnership Register.
1.2 NAME AND OFFICES. The name of the Partnership heretofore formed
and continued hereby is "MMC Capital Tech ▇▇ ▇▇, L.P." The registered office of
the Partnership in the State of Delaware is initially located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, and the registered agent
for service of process on the Partnership at such address is Corporation Trust
Center. At any time, the General Partners may designate another registered agent
for service of process and/or registered office upon notice to the Limited
Partners in accordance with the terms of this Agreement.
The Partnership shall have its initial principal office for its
activities at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The General
Partners may from time to
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time have such other office or offices within or without the State of Delaware
as may be designated by the General Partners.
1.3 FISCAL YEAR. The fiscal year of the Partnership (the "FISCAL
YEAR") shall end on the 31st day of December in each year. The Partnership shall
have the same fiscal year for income tax and for financial and accounting
purposes.
ARTICLE II
PURPOSES AND POWERS
2.1 PURPOSES. Subject to the other provisions of this Agreement, the
purposes of the Partnership are to serve as general partner of the Fund; to
acquire, hold and dispose of Securities; and to engage in such activities as the
General Partners deem necessary, advisable, convenient or incidental to the
foregoing, in all cases subject to the Act.
2.2 POWERS OF THE PARTNERSHIP.
(a) POWERS GENERALLY. The Partnership shall have the power and
authority to take any and all actions necessary, appropriate, proper, advisable,
incidental or convenient to or for the furtherance of the purpose set forth in
Section 2.1, including, but not limited to, the power and authority:
(i) to direct the formulation of investment policies and
strategies for the Partnership and the Fund, direct the investment
activities of the Partnership and the Fund, and select and approve the
investment of the funds of the Partnership and the Fund;
(ii) to acquire, hold, manage, own, sell, transfer, convey,
assign, exchange, pledge or otherwise dispose of Securities, and
exercise all rights, powers, privileges and other incidents of
ownership or possession with respect to Securities, including, without
limitation, the voting of Securities, the approval of a restructuring
of an investment in Securities, participation in arrangements with
creditors, the institution and settlement or compromise of suits and
administrative proceedings and other similar matters;
(iii) to establish, have, maintain or close one or more
offices within or without the State of Delaware and in connection
therewith to rent or acquire office space and to engage personnel;
(iv) to open, maintain and close bank accounts and draw
checks or other orders for the payment of money and open, maintain and
close brokerage, mutual fund and similar accounts;
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(v) to hire consultants, custodians, attorneys, accountants
and such other agents and employees for the Partnership as it may deem
necessary or advisable, and authorize any such agent or employee to
act for and on behalf of the Partnership;
(vi) to make and perform such other agreements and
undertakings as may be necessary or advisable to the carrying out of
any of the foregoing powers, objects or purposes;
(vii) to enter into the Fund Agreement, and cause the Fund
to enter into Subscription Agreements with its limited partners and
other agreements and documents in connection with the admission of
Persons as limited partners of the Fund;
(viii) to bring and defend actions and proceedings at law or
in equity or before any governmental, administrative or other
regulatory agency, body or commission; and
(ix) to carry on any other activities necessary to, in
connection with or incidental to any of the foregoing, the
Partnership's business or the Fund's business.
(b) FUND AGREEMENT. Notwithstanding any other provision of this
Agreement, the Partnership, and any General Partner on behalf of the
Partnership, is hereby authorized to execute, deliver and perform its
obligations under the Fund Agreement.
ARTICLE III
CAPITAL CONTRIBUTIONS; CAPITAL
ACCOUNTS; ALLOCATIONS
3.1 CAPITAL CONTRIBUTIONS. Each Partner shall make cash Capital
Contributions to the Partnership in the aggregate amount of the Capital
Commitment set forth opposite such Partner's name on the Partnership Register.
Except as otherwise provided herein, the Partners shall make such Capital
Contributions to the Partnership PRO RATA in accordance with their respective
Capital Commitments at such times and in such amounts as are sufficient to meet
Partnership Expenses or enable the Partnership to contribute the amount of
capital required to be contributed by the Partnership to the Fund pursuant to
the applicable provisions of the Fund Agreement, PROVIDED that Capital
Contributions to fund any Portfolio Investments shall be made by the Partners
participating in such Portfolio Investment PRO RATA in accordance with their
respective Remaining Capital Commitments and PROVIDED, FURTHER, that in respect
of each Partner such Partner's aggregate Capital Contributions shall not exceed
such Partner's Capital Commitment.
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Each Partner's Remaining Capital Commitment shall be increased by any amounts
returned to such Partner (I) pursuant to Section 4.2(b)(i) or (II) pursuant to
Section 4.2(b)(ii), to the same extent that such amounts would increase the
remaining capital commitments of the limited partners of the Fund if such
amounts had been distributed to them pursuant to the Fund Agreement.
3.2 CAPITAL ACCOUNTS. There shall be established on the books and
records of the Partnership a capital account (a "CAPITAL ACCOUNT") for each
Partner.
3.3 ADJUSTMENTS TO CAPITAL ACCOUNTS. As of the last day of each
Period, the balance in each Partner's Capital Account shall be adjusted by (A)
increasing such balance by (I) such Partner's allocable share of each item of
Net Investment Profit and Net Profit for such Period (allocated in accordance
with Section 3.5) and (II) the Capital Contributions, if any, made by such
Partner during such Period and (B) decreasing such balance by (I) the amount of
cash or the Value of Securities or other property distributed to such Partner
pursuant to Article IV or X and (II) such Partner's allocable share of each item
of Net Investment Loss and Net Loss for such Period (allocated in accordance
with Section 3.5). Each Partner's Capital Account shall be further adjusted with
respect to any special allocations or adjustments pursuant to this Agreement.
3.4 SHARING OF CARRIED INTEREST; POINTS.
(a) GENERAL. The Partnership's share of the carried interest in the
Fund with respect to each Portfolio Investment shall be shared among the
Partners of the Partnership based on the number of Ordinary Points and Special
Points (collectively, the "POINTS") held by each Partner with respect to such
Portfolio Investment. Subject to Section 3.4(c), there shall be a total of 1,000
Points allocated to the Partners with respect to each Portfolio Investment at
the time such Portfolio Investment is made. Subject to Sections 3.4(b) and
3.4(c), prior to the consummation of a Portfolio Investment, each Partner shall
be allocated, with respect to such Portfolio Investment, Ordinary Points equal
to the Minimum Ordinary Points, if any, and Special Points equal to the Minimum
Special Points, if any, in each case then listed with respect to such Partner on
the Partnership Register, and, if the aggregate number of such Points is less
than 1,000, the difference shall be allocated to one or more Partners as
determined by a majority of the General Partners in their sole discretion,
PROVIDED that (I) without the consent of ▇▇ ▇▇, no Ordinary Points or Special
Points shall be allocated to CD Tech Fund II, LLC or to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ in
excess of the Minimum Ordinary Points and Minimum Special Points, as the case
may be, then listed with respect to such Partner on the Partnership Register and
(II) any Points allocated to any Partner and its Estate Partner shall be
allocated between such Partner and such Estate Partner in proportion to their
Capital Commitments. Subject to the provisos contained in the preceding
sentence, any Points forfeited by a Partner who becomes a Special Assignee
pursuant to Article IX shall be
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reallocated to one or more Partners as determined by a majority of the then
remaining General Partners in their sole discretion.
(b) ZERO POINTS IF EXCUSED INVESTMENT. Notwithstanding anything to the
contrary in Section 3.4(a), a Partner shall be allocated zero Points with
respect to a Portfolio Investment if, pursuant to Section 3.7, such Partner is
excused from making a Capital Contribution with respect to, or otherwise
participating in, such Portfolio Investment.
(c) ADDITIONAL PARTNERS; ADDITIONAL POINTS. In connection with the
admission of any Additional Partner pursuant to Section 8.1, a majority of the
General Partners voting on such admission shall determine (I) the Minimum
Ordinary Points and Minimum Special Points, if any, to be listed with respect to
such Partner on Schedule A of the Partnership Register, (II) the Ordinary Points
and Special Points, if any, to be allocated to such Additional Partner with
respect to one or more of the Portfolio Investments held by the Fund on the date
of such Additional Partner's admission and (III) if such Additional Partner will
be subject to the provision for Preferential Allocation and Distribution Amounts
and, if so, which option (as described in the definitions of "Preferential
Allocation Amount" and "Preferential Distributions Amount") will apply to such
Additional Partner. The Points allocated to an Additional Partner pursuant to
this Section 3.4(c) shall be newly created and for each newly created Point
allocated to an Additional Partner pursuant to this Section 3.4(c) with respect
to a Portfolio Investment, M&M Vehicle, L.P. and ▇▇ ▇▇ shall be allocated a
number of Points with respect to such Portfolio Investment such that M&M
Vehicle, L.P. and ▇▇ ▇▇ hold 24% and 1%, respectively, of the aggregate number
of newly created Points with respect to such Portfolio Investment. The newly
created Points allocated to the Partners pursuant to this Section 3.4(c) with
respect to any Portfolio Investment shall not exceed 500.
3.5 ALLOCATIONS.
(a) ALLOCATIONS OF NET INVESTMENT PROFIT AND NET INVESTMENT LOSS.
Except as otherwise provided herein, allocations shall be made as follows:
(i) The Net Investment Profit or Net Investment Loss for
each Period allocated to the Partnership pursuant to section 7.1(b) of
the Fund Agreement in respect of any Portfolio Investment shall be
allocated to the Partners in proportion to the Capital Contributions
used to fund such Portfolio Investment.
(ii) The Net Investment Profit or Net Investment Loss for
each Period allocated to the Partnership pursuant to section
7.1(c)(ii) or 7.1(d)(i) of the Fund Agreement in respect of any
Portfolio Investment shall be allocated to the Partners in proportion
to the number of Points then held by each Partner with respect to such
Portfolio Investment, PROVIDED, HOWEVER, that (A) the amount of
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Net Investment Profit otherwise allocable to M&M Vehicle, L.P.
pursuant to this Section 3.5(a)(ii) shall be reduced, but not below
zero, by the aggregate Preferential Allocation Amounts of all
Additional Partners indicated on the Partnership Register as being
subject to the provision for Preferential Allocation and Distribution
Amounts and (B) the amount of Net Investment Profit allocated to each
Additional Partner indicated on the Partnership Register as being
subject to the provision for Preferential Allocation and Distribution
Amounts shall be increased by an amount equal to the product of (1)
the amount described in clause (A) and (2) the quotient obtained by
dividing such Additional Partner's Preferential Allocation Amount by
the aggregate Preferential Allocation Amounts of all Additional
Partners.
(b) ALLOCATION OF NET PROFIT AND NET LOSS.
(i) The Net Profit or the Net Loss for any Period allocated
to the Partnership pursuant to section 7.2(a) of the Fund Agreement in
respect of any Bridge Financing shall be allocated among the Partners
in proportion to the Capital Contributions of the Partners used to
fund such Bridge Financing.
(ii) The Net Profit or the Net Loss for any Period allocated
to the Partnership pursuant to section 7.2(b) of the Fund Agreement
shall be allocated among the Partners in accordance with their
respective Capital Commitments.
(iii) All other Net Profit, if any, and all other Net Loss,
if any, for any Period shall be allocated among the Partners in
accordance with their respective Capital Commitments.
(c) SPECIAL ALLOCATIONS. Notwithstanding anything to the contrary in
Section 3.5(a) or 3.5(b), if, pursuant to section 4.1(b) of the Fund Agreement,
a Bridge Financing ceases to be treated as a Bridge Financing and is treated as
a Portfolio Investment, then the items of income, gain, deduction and loss
allocated to the Partnership pursuant to section 7.3 of the Fund Agreement in
respect of such Portfolio Investment shall be allocated to the Partners so that,
as quickly as possible, the Capital Account balance of each Partner is equal to
the Capital Account balance such Partner would have had if such Portfolio
Investment had always been treated as a Portfolio Investment and never been
treated as a Bridge Financing. The General Partners shall have the power to make
such other allocations as necessary to give effect to the intent of this Section
3.5(c). Any allocations in respect of any such Portfolio Investment pursuant to
Section 3.5(b) and this Section 3.5(c) shall thereafter be treated as
allocations pursuant to the appropriate clause of Section 3.5(a).
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(d) CAPITAL ACCOUNT DEFICITS. Notwithstanding the foregoing provisions
of this Section 3.5, a Partner shall not be allocated his, her of its share of
any item of loss or deduction if such Partner's Capital Account is negative or
to the extent that such allocation would reduce such Partner's Capital Account
below zero. Any item of loss or deduction or portion thereof which, but for the
limitation provided in the immediately preceding sentence, would be allocated to
a Partner, shall be allocated to each other Partner having a positive balance in
his, her or its Capital Account PRO RATA in proportion to such other Partners'
Capital Contributions or, if applicable, their Capital Commitments or Points
with respect to such item, to the extent of such positive balance, and, if no
Partner has a positive balance remaining in his, her or its Capital Account,
proportionately to the General Partners. A Partner who would have been allocated
an item of loss or deduction but for the limitation provided in the first
sentence of this Section 3.5(d) shall thereafter share in items of income or
gain only after the other Partners have been allocated 100% of such Partner's
share of income and gain to the extent of (and among such other Partners in
proportion to) the amount of loss and deduction allocated to such other Partners
pursuant to the immediately preceding sentence.
3.6 TAX MATTERS. The income, gains, losses, credits and deductions
recognized by the Partnership shall be allocated among the Partners, for United
States federal, state and local income tax purposes, to the extent permitted
under the Code and the Treasury Regulations, in the same manner that each such
item is allocated to the Partners' Capital Accounts. Notwithstanding the
foregoing, the General Partners shall have the power to make such allocations
for United States federal, state and local income tax purposes as may be
necessary to maintain substantial economic effect, or to insure that such
allocations are in accordance with the interests of the Partners in the
Partnership, in each case within the meaning of the Code and the Treasury
Regulations thereunder. Tax credits shall be equitably allocated by the General
Partners. All matters concerning allocations for United States federal, state
and local and non-U.S. income tax purposes, including accounting procedures, not
expressly provided for by the terms of this Agreement shall be equitably
determined in good faith by the General Partners. ▇▇ ▇▇ is hereby designated as
the tax matters partner of the Partnership as provided in the Treasury
Regulations pursuant to section 6231 of the Code (and any similar provisions
under any state, local or non-U.S. tax laws). Each Partner hereby consents to
such designation and agrees that upon the request of the tax matters partner it
will execute, certify, acknowledge, swear to, file and record at the appropriate
public offices such documents as may be necessary or appropriate to evidence
such consent. The General Partners may, in their sole discretion, cause the
Partnership to make the election provided for under section 754 of the Code.
Each Partner shall provide to the Partnership upon request such information or
forms which the General Partner may reasonably request with respect to the
Partnership's compliance with applicable tax laws. 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
8
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. No Partner shall permit the Partnership to elect, and
the Partnership shall not elect, to be treated as an association taxable as a
corporation for United States federal, state or local income tax purposes under
Treasury Regulations section 301.7701-3(a) or under any corresponding provision
of state or local law.
3.7 EXCUSED INVESTMENT. Notwithstanding Section 3.1 and 3.5, no
Partner shall make a Capital Contribution with respect to, or otherwise
participate in, any Portfolio Investment of the Fund if the General Partners
have determined in their sole discretion that participation by such Partner in
such Portfolio Investment might give rise to a conflict of interest or to a
material tax or regulatory requirement for such Partner or the Partnership.
3.8 ESTATE PARTNERS. Notwithstanding any other provision of this
Agreement, Capital Commitments and Capital Contributions of, and allocations to,
any Partner and its Estate Partner (including, without limitation, pursuant to
Section 4.4) shall be apportioned between such Partner and such Estate Partner
in proportion to their Capital Commitments.
ARTICLE IV
DISTRIBUTIONS; WITHHOLDING
4.1 WITHDRAWAL OF CAPITAL. Except as otherwise expressly provided in
this Article IV or in Article X, no Partner shall have the right to withdraw
capital from the Partnership or to receive any distribution or return of, or
interest on, his Capital Contribution.
4.2 DISTRIBUTIONS.
(a) FORM OF DISTRIBUTIONS. Subject to the other provisions of this
Article IV, as determined by a majority of the General Partners, the Partnership
shall, at any time and after payment of any Partnership Expenses and
establishing reasonable reserves for material anticipated obligations or
commitments of the Partnership, promptly distribute cash or Securities to the
Partners, PROVIDED that no reserve shall be established with respect to any
anticipated Clawback Amount, or any anticipated Hurdle Clawback Amount, other
than pursuant to Section 4.3. Upon a distribution of Securities, the Securities
distributed shall be valued in accordance with the valuation provisions of the
Fund Agreement, and such Securities shall be deemed to have been sold at such
value and the proceeds of such sale shall be deemed to have been distributed to
the Partners for all purposes of this Agreement. Subject to Sections 10.2 and
10.3, Securities distributed
9
in kind shall be distributed in proportion to the aggregate amounts that would
be distributed to each Partner pursuant to this Section 4.2, such aggregate
amounts to be estimated in the good faith judgment of the General Partners. The
Partnership may cause certificates evidencing any Securities to be distributed
to be imprinted with legends as to such restrictions on Transfer as it may deem
necessary or appropriate, including legends as to applicable United States
federal or state or non-U.S. securities laws or other legal or contractual
restrictions, and may require any Partner to which Securities are to be
distributed to agree in writing (I) that such Securities will not be transferred
except in compliance with such restrictions and (II) to such other matters as
may be deemed necessary or appropriate. Notwithstanding the foregoing, at the
request of any Partner, the General Partners may cause the Partnership to
dispose of any property that would be distributed to such Partner pursuant to
this Section 4.2(a) and distribute the net proceeds of such disposition to such
Partner and such Partner shall bear all out-of-pocket expenses incurred to
effect such sale, PROVIDED, HOWEVER, that the General Partners shall only be
required to effect such disposition to the extent such distribution (A) would
cause such Partner to own or control in excess of the amount of such property
that it may lawfully own, (B) would subject such Partner to any material filing
or regulatory requirement, or would make such filing or requirement more
burdensome, or (C) would violate any applicable legal or regulatory restriction,
and PROVIDED, FURTHER, that any taxable income, gain, loss or deduction
recognized by the Partnership in connection with the disposition of such
property shall be allocated only to such Partner requesting to receive proceeds
instead of property and PROVIDED, FURTHER, that such Partner shall be treated
for all other purposes of this Agreement as if such property had been
distributed as contemplated by the second sentence of this Section 4.2(a).
(b) MAKING OF DISTRIBUTIONS. Distributions received from the Fund
shall be distributed promptly to the Partners but in any event within 120 days
after receipt by the Partnership. Except as otherwise provided herein,
distributions shall be made as follows:
(i) NON-CONSUMMATED INVESTMENTS AND EXTRA DRAWDOWN AMOUNTS.
Amounts returned from the Fund pursuant to section 5.3 of the Fund
Agreement (non-consummated investments and extra drawdown amounts) in
respect of any Portfolio Investment or Bridge Financing (or proposed
Portfolio Investment or Bridge Financing) shall be distributed to the
Partners in proportion to the Capital Contributions of the Partners
used (or intended to be used) to fund such Portfolio Investment or
Bridge Financing.
(ii) PARTNERSHIP'S CAPITAL INVESTMENT. Distributions
received from the Fund with respect to any Portfolio Investment that
were distributed to the Partnership based on the Partnership's Sharing
Percentage (as defined in the Fund Agreement) for such Portfolio
Investment pursuant to section 8.2(b) of the Fund Agreement (including
distributions received from the Fund pursuant to section 8.3 of the
Fund Agreement (tax distributions) or section 15.2(a) of the Fund
10
Agreement (liquidating distributions) that are attributable to the
Partnership's Sharing Percentage with respect to any Portfolio
Investment) shall be distributed among the Partners in proportion to
their Capital Contributions used to fund such Portfolio Investment.
Distributions received from the Fund with respect to any Bridge
Financing or Temporary Investment pursuant to section 8.2(c) or 8.2(d)
(including distributions received from the Fund pursuant to section
15.2(a) of the Fund Agreement (liquidating distributions) that are
attributable to any Bridge Financing or any Temporary Investment) of
the Fund Agreement shall be distributed among the Partners in
proportion to their Capital Contributions used to fund such Bridge
Financing or Temporary Investment.
(iii) PARTNERSHIP'S CARRIED INTEREST. Subject to Section
4.3, distributions received from the Fund with respect to any
Portfolio Investment pursuant to section 8.2(b) of the Fund Agreement
that are not described in Section 4.2(b)(ii) (the Partnership's
carried interest with respect to such Portfolio Investment) (including
distributions received from the Fund pursuant to section 8.3 of the
Fund Agreement (tax distributions) or section 15.2(a) of the Fund
Agreement (liquidating distributions) that are not described in
Section 4.2(b)(ii)) shall be distributed among the Partners in
proportion to the number of Points then held by each Partner with
respect to such Portfolio Investment, PROVIDED, HOWEVER, that (A) the
amount otherwise distributable to M&M Vehicle, L.P. pursuant to this
Section 4.2(b)(iii) shall be reduced, but no below zero, by the
aggregate Preferential Distribution Amounts of all Additional Partners
indicated on the Partnership Register as being subject to the
provision for Preferential Allocation and Distribution Amounts and (B)
the amount distributed to each Additional Partner indicated on the
Partnership Register as being subject to the provision for
Preferential Allocation and Distribution Amounts shall be increased by
an amount equal to the product of (1) the amount described in clause
(A) and (2) the quotient obtained by dividing such Additional
Partner's Preferential Distribution Amount by the aggregate
Preferential Distribution Amounts of all Additional Partners,
PROVIDED, HOWEVER, that the aggregate amount distributed to Additional
Partners pursuant to clause (B) shall not exceed the aggregate amount
previously distributed or currently distributable to M&M Vehicle, L.P.
pursuant to this Section 4.2(b)(iii) in respect of the Points held by
M&M Vehicle, L.P. in excess of 24% of the total number of Points
allocated with respect to all Portfolio Investments (determined
without giving effect to the first proviso of this Section
4.2(b)(iii)).
(iv) OTHER DISTRIBUTIONS. Distributions of amounts not
described in paragraphs (i), (ii) or (iii) above shall be distributed
among the Partners as equitably determined by the General Partners.
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The General Partners' good faith determination as to whether amounts are
described in paragraph (i), (ii), (iii) or (iv) of this Section 4.2, shall,
absent manifest error, be final and binding on all Partners.
4.3 HOLDBACK ACCOUNTS.
(a) HOLDBACK FOR TIER 2 PARTNERS PENDING DISSOLUTION OF THE
PARTNERSHIP. Notwithstanding Section 4.2(b), the General Partners may, in their
sole discretion, withhold from any distribution to a Tier 2 Partner pursuant to
Section 4.2(b)(iii) an amount equal to the difference between (I) up to 50% of
the amount that would otherwise be distributed to such Tier 2 Partner (except as
provided in Section 4.3(b), other than in respect of such Tier 2 Partner's
Special Points, if any) and (II) an amount intended to enable such Tier 2
Partner to discharge its U.S. federal, state and local income tax liabilities
arising from allocations attributable to the amount described in clause (i) as
determined by the General Partners in their reasonable discretion. Any amount
withheld from a Tier 2 Partner pursuant to this Section 4.3(a) shall be placed
in a separate account (a "HOLDBACK ACCOUNT") maintained separately on the books
of the Partnership until such time as (A) the Partnership is dissolved pursuant
to Article X, at which time such amount shall be distributed to such Tier 2
Partner or (B) the General Partners determine in their sole discretion that the
amount in such Holdback Account exceeds the amount that can reasonably be
expected to be necessary to fund such Tier 2 Partner's share of any Clawback
Amount, at which time the excess shall be distributed to such Tier 2 Partner.
Any amount placed in a Holdback Account with respect to such Tier 2 Partner
shall be invested by the General Partners in investments selected by such Tier 2
Partner within investment categories specified by the General Partners and the
income earned thereon shall be distributed quarterly to such Tier 2 Partner. Any
distribution to a Tier 2 Partner pursuant to this Section 4.3(a) (other than
pursuant to the prior sentence) shall also be treated as a distribution pursuant
to Section 4.2(b)(iii) for all purposes of this Agreement, including, without
limitation, Section 4.4(a).
(b) HURDLE HOLDBACK ACCOUNT. Notwithstanding Section 4.2(b), ▇▇ ▇▇
may, in its sole discretion, withhold from any distribution to any Partner
pursuant to Section 4.2(b)(iii) an amount equal to the difference between (I)
the amount that would otherwise be distributed to such Partner in respect of
such Partner's Special Points (including, for the avoidance of doubt, any
Preferential Distribution Amounts attributable to such Partner's Special Points)
and (II) an amount intended to enable such Partner to discharge its U.S.
federal, state and local income tax liabilities arising from allocations
attributable to the amount described in clause (i) as determined by ▇▇ ▇▇ in its
reasonable discretion. Any amount withheld from a Partner pursuant to this
Section 4.3(b) shall be placed in a separate account (a "HURDLE HOLDBACK
ACCOUNT") maintained separately on the books of the Partnership until such time
as (A) the Partnership is dissolved pursuant to Article X, at which time such
amount shall, subject to Section 4.4(b), be distributed to such Partner or (B)
▇▇ ▇▇ determines in its sole discretion that the Hurdle Return will be met, at
which
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time the excess shall be distributed to such Partner. Any amount placed in a
Hurdle Holdback Account with respect to such Partner shall be invested by ▇▇ ▇▇
in investments selected by such Partner within investment categories specified
by ▇▇ ▇▇ and the income earned thereon shall be distributed quarterly to such
Partner. Any distribution to a Partner pursuant to this Section 4.3(b) (other
than pursuant to the prior sentence) shall also be treated as a distribution
pursuant to Section 4.2(b)(iii) for all purposes of this Agreement, including,
without limitation, Section 4.4(b) and shall be subject to the provisions of
Section 4.3(a).
4.4 RETURN OF DISTRIBUTIONS.
(a) CLAWBACK. If and to the extent that the Partnership is obligated
under section 13.2(b) of the Fund Agreement to contribute to the Fund all or a
portion of the distributions received by the Partnership from the Fund (the
amount of such required contribution, the "CLAWBACK AMOUNT"), the Partners shall
be required to fund the Clawback Amount PRO RATA in proportion to the negative
balances in their Capital Accounts. Each Tier 2 Partner's obligation under this
Section 4.4(a) shall first be satisfied from such Tier 2 Partner's Holdback
Account established pursuant to Section 4.3(a), if any. Each Partner shall make
contributions to the Partnership in satisfaction of its obligation under this
Section 4.4(a) (or in the case of a Tier 2 Partner, the remainder of such
obligation). If any Tier 2 Partner fails to contribute when due any portion of
such Tier 2 Partner's obligation to contribute amounts in excess of amounts in
such Tier 2 Partner's Holdback Account or Accounts under this Section 4.4(a), ▇▇
▇▇ shall make a contribution to the Partnership equal to such unpaid
contribution; if ▇▇ ▇▇ has made any such contribution, any amounts recovered
from such Tier 2 Partner pursuant to the next succeeding sentence shall be
distributed entirely to ▇▇ ▇▇. Notwithstanding the foregoing, a Partner's
obligation to make contributions to the Partnership under this Section 4.4(a)
shall survive the dissolution, liquidation, winding up and termination of the
Partnership, and for purposes of this Section 4.4(a), the Partnership and the
General Partners may pursue and enforce all rights and remedies it and they may
have against each Partner under this Section 4.4(a), including instituting a
lawsuit to collect such contribution with interest from the date such
contribution was required to be paid under this Section 4.4(a) calculated at a
rate equal to the Prime Rate per annum (but not in excess of the highest rate
per annum permitted by law). Notwithstanding anything in this Section 4.4(a) to
the contrary, a Partner's liability to make contributions to the Partnership
under this Section 4.4(a) shall not exceed the aggregate amount of all
distributions received or deemed to have been received by such Partner pursuant
to Section 4.2(b)(iii) (excluding distributions received or deemed to have been
received pursuant to Section 4.2(b)(iii) that are attributable to such Partner's
share of distributions received from the Fund pursuant to section 8.3 of the
Fund Agreement (tax distributions)). If the Clawback Amount exceeds the
aggregate amount of contributions to be made by the Partners pursuant to this
Section 4.4(a), as limited by the preceding sentence, the Partners who are not
limited by the preceding sentence shall be required to
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fund such excess PRO RATA in proportion to their obligations as determined
pursuant to the first sentence of this Section 4.4(a), but subject always to the
preceding sentence and with reapplication of this sentence as necessary. The
provisions of this Section 4.4(a) are intended solely to benefit the Partnership
and, to the fullest extent permitted by applicable law, shall not be construed
as conferring any benefit upon any creditor of the Partnership (and no such
creditor shall be a third party beneficiary of this Agreement), and, to the
fullest extent permitted by law, no Partner shall have any duty or obligation to
any creditor of the Partnership to make any contributions to the Partnership.
(b) HURDLE CLAWBACK. If at the time the Partnership is dissolved
pursuant to Article X the Hurdle Return has not been satisfied, (I) the balance
in each Hurdle Holdback Account shall be distributed, to the extent necessary to
offset such deficiency, to M&M Vehicle, L.P. and (II) to the extent that the
Hurdle Rate still has not been satisfied after giving effect to the amounts
described in clause (i) of this Section 4.4(b), each Partner shall be obligated
to return, to the extent necessary to offset such remaining deficiency, to the
Partnership distributions made to such Partner in respect of such Partner's
Special Points (including for the avoidance of doubt, any Preferential
Distribution Amounts attributable to such Partner's Special Points, but after
taking into account the amounts described in clause (i) of this Section 4.4(b))
(such amount the "HURDLE CLAWBACK AMOUNT" with respect to such Partner) and such
amount shall be distributed to M&M Vehicle, L.P. A Partner's obligation to make
contributions to the Partnership under this Section 4.4(b) shall survive the
dissolution, liquidation, winding up and termination of the Partnership, and for
purposes of this Section 4.4(b), the Partnership and the General Partners may
pursue and enforce all rights and remedies it and they may have against each
Partner under this Section 4.4(b), including instituting a lawsuit to collect
such contribution with interest from the date such contribution was required to
be paid under this Section 4.4(b) calculated at a rate equal to the Prime Rate
per annum (but not in excess of the highest rate per annum permitted by law).
Notwithstanding anything in this Section 4.4(b) to the contrary, a Partner's
liability to make contributions to the Partnership under this Section 4.4(b)
shall not be greater than the excess of (A) the aggregate amount of all
distributions received or deemed to have been received by such Partner pursuant
to Section 4.2(b)(iii) in respect of such Partner's Special Points (without
duplication of amounts, if any, contributed by such Partner pursuant to Section
4.4(a)) over (B) an amount intended to enable such Partner to discharge its U.S.
federal, state and local income tax liabilities arising from allocations
attributable to the amount described in clause (A).
4.5 LIMITATIONS ON DISTRIBUTIONS. Notwithstanding any provisions to
the contrary contained in this Agreement, (A) the Partnership shall not make a
distribution to any Partner on account of such Partner's interest in the
Partnership if such distribution would violate the Act or other applicable law,
(B) the Partnership shall not make a distribution to any Partner to the extent
that after giving effect to such distribution a deficit balance in such
Partner's Capital Account would exist and (C) holdings of Points
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by, and Distributions made to, any Partner and its Estate Partner shall be
apportioned between such Partner and such Estate Partner in proportion to their
Capital Commitments.
4.6 WITHHOLDING. Notwithstanding any other provision of this
Agreement, each Partner hereby authorizes the Partnership to withhold and to pay
over, or otherwise pay, any withholding or other taxes payable by the
Partnership (pursuant to the Code or any provision of United States federal,
state or local or non-U.S. tax law) with respect to such Partner or as a result
of such Partner's status as a Partner hereunder. 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
(including, without limitation, Section 4.2(b)(iii)) to have received a payment
from the Partnership as of the time such withholding or other tax is required to
be paid, which payment shall be deemed to be a distribution 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
distribution but for such withholding. In addition, if and to the extent that
the Partnership or the Fund receives a distribution or payment from or in
respect of which tax was withheld, as a result of (or attributable to) such
Partner's status as a Partner hereunder, as determined by the General Partners,
such Partner shall be deemed for all purposes of this Agreement (including,
without limitation, Section 4.2(b)(iii)) to have received a distribution from
the Partnership as of the time such withholding was paid. Unless the General
Partners determine otherwise, the withholdings by the Partnership referred to in
this Section 4.6 shall be made at the maximum applicable statutory rate under
the applicable tax law.
ARTICLE V
MANAGEMENT; VOTING
5.1 PARTNERS. Subject to Section 8.1, the Partnership shall consist of
the General Partners and the Limited Partners. Pursuant to Section 8.1, the
General Partners may admit additional Partners from time to time.
5.2 THE GENERAL PARTNERS.
(a) GENERAL. The business and affairs of the Partnership shall be
managed by the General Partners of the Partnership from time to time. Except as
otherwise expressly provided herein, no Limited Partner shall take part in the
management or control of the Partnership's affairs, vote with respect to any
action taken or to be taken by the Partnership (including, but not limited to,
merger or dissolution of the Partnership or any amendment to this Agreement),
transact any business in the Partnership's name or have the power to sign
documents for or otherwise bind the Partnership.
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(b) RESTRICTIONS ON THE PARTNERS. The Partners shall not: (I) do any
act in contravention of any applicable law, regulation or provision of this
Agreement or (II) possess Partnership property for other than a Partnership
purpose. In addition, the General Partners shall not admit any Person as a
Partner except as permitted in this Agreement and the Act.
(c) ACTS OF THE GENERAL PARTNERS. (I) The act of a majority of the
General Partners shall be the act of the General Partners, except as otherwise
specifically provided by this Agreement, (II) in the event that one or more of
the General Partners determine that participation in a vote could constitute a
conflict of interest and therefore abstain from participating in such vote, the
act of a majority of the General Partners voting on such matter shall be the act
of the General Partners, whether or not all or a majority of the voting General
Partners constitute a majority of the General Partners, and (III) in the event
that a vote taken by the General Partners or the Tier 1 General Partners, as the
case may be, has resulted in a tie vote among the General Partners or the Tier 1
General Partners, as the case may be, ▇▇ ▇▇ shall be entitled to cast the
deciding vote that shall determine the act of the General Partners, whether or
not all or a majority of the voting General Partners (including ▇▇ ▇▇)
constitute a majority of the General Partners.
(d) ACTIONS WITH RESPECT TO THE MANAGER. The removal or replacement of
MMC Capital as the manager of the Fund shall occur only upon the majority vote
of the General Partners, which majority shall include, in any case, ▇▇ ▇▇.
(e) ACTIONS WITH RESPECT TO PORTFOLIO INVESTMENTS. Any determination
or action required to be made or taken by the Partnership with respect to the
acquisition, holding, disposition or valuation of Portfolio Investments, in
connection therewith or to give effect thereto, shall require the vote of a
majority of the members of the Investment Committee.
(f) ACTION BY UNANIMOUS CONSENT OF THE GENERAL PARTNERS. The unanimous
vote of the General Partners shall be required to (I) dissolve the Partnership
pursuant to Section 10.1(b), (II) approve the merger or sale of substantially
all of the assets of the Partnership or (III) approve the transfer of all or any
portion of the interest of a General Partner in the Partnership.
(g) APPOINTMENT OF ▇▇ ▇▇ AGENTS. ▇▇ ▇▇ hereby designates and appoints
each of the Chairman and President of ▇▇ ▇▇, the members of the Board of
Directors of ▇▇ ▇▇, and the Secretary of ▇▇ ▇▇, as agents of ▇▇ ▇▇ (the
"CORPORATE AGENTS") to perform all of the duties and functions of ▇▇ ▇▇ under
this Agreement and as authorized persons within the meaning of the Act, PROVIDED
that ▇▇ ▇▇ has the sole discretion to remove one or more of the Corporate Agents
with or without cause at any time and to designate and appoint one or more
replacement Corporate Agents. Any action undertaken by any of the Corporate
Agents in accordance with this Agreement shall bind ▇▇ ▇▇.
16
5.3 ABILITY TO BIND THE PARTNERSHIP. Unless otherwise expressly
provided herein, each General Partner shall have the authority to sign, in the
name and on behalf of the Partnership, checks, orders, contracts, leases, notes,
drafts and other documents and instruments in connection with the ordinary
course of the business of the Partnership, commitments regarding the acquisition
or disposition of Portfolio Investments of the Fund, conveyances of real estate,
documents evidencing the lending or borrowing by the Partnership, and other
documents and instruments otherwise arising outside the ordinary course of
business of the Partnership, PROVIDED that any action that would bind the
Partnership with respect to amounts in excess of $500,000 shall require the
consent of a majority of the General Partners.
5.4 ACTIONS AND DETERMINATIONS OF THE PARTNERSHIP. Subject to the
other provisions of this Agreement, whenever this Agreement provides that a
determination shall be made or an action shall be taken by the Partnership, such
determination or act may be made or taken by the General Partners.
5.5 VOTING.
(a) Any action of the Partnership requiring the vote or assent of more
than one of the General Partners under this Agreement may be taken only upon
notice to each General Partner entitled to vote thereon either personally, by
telephone, by mail, by facsimile, or by any other means of communication
reasonably calculated to give notice; and reasonable efforts shall be made to
allow each General Partner entitled to vote thereon to participate in a vote on
such matter.
(b) Except as expressly provided herein, on any matter that is to be
voted on by the General Partners or all Partners, as the case may be, the
General Partners or the Partners, as the case may be, may take such action
without a meeting and without a vote, if a consent or consents in writing,
setting forth the action so taken, shall be signed and/or ratified by the
General Partners or the Partners, as the case may be, having not less than the
minimum voting percentage or the requisite number of the General Partners or the
Partners, as the case may be, that would be necessary to authorize or take such
action at a meeting, PROVIDED, HOWEVER, that prior notice of the matter to be
voted on is given to all the General Partners and all the Partners entitled to
vote thereon (provided that a consent in writing at any time to such action
shall constitute a waiver of such prior notice), and PROVIDED, further, that the
Partnership shall promptly provide copies to all General Partners (and, for
matters on which all Partners were entitled to vote, to all Partners) of any
consents or written actions taken by any General Partners or the Partners, as
the case may be.
5.6 DISCRETION. Whenever in this Agreement the General Partners are
permitted or required to make a decision (I) in their "sole discretion" or
"discretion" or under a grant of similar authority or latitude, the General
Partners may consider any
17
interests they desire, including their own interests, or (II) in their "good
faith" or under another expressed standard, the General Partners shall act under
such express standard and shall not be subject to any other or different
standard imposed by this Agreement or any other agreement contemplated herein or
by relevant provisions of law or in equity or otherwise. If any questions should
arise with respect to the operation of the Partnership, which are not otherwise
specifically provided for in this Agreement or the Act, or with respect to the
interpretation of this Agreement, the General Partners are hereby authorized to
make a final determination with respect to any such question and to interpret
this Agreement in their sole discretion, and their determination and
interpretation so made shall be final and binding on all parties.
ARTICLE VI
LIABILITY, EXCULPATION AND INDEMNIFICATION
6.1 LIABILITY. Except as otherwise provided by the Act, the debts,
obligations and liabilities of the Partnership, whether arising in contract,
tort or otherwise, shall be solely the debts, obligations and liabilities of the
Partnership, and no Covered Person shall be obligated personally for any such
debt, obligation or liability of the Partnership solely by reason of being a
Covered Person.
6.2 EXCULPATION.
(a) GENERALLY. No Covered Person shall be liable to the Partnership or
any Partner for any act or omission taken or suffered by such Covered Person in
good faith, except to the extent that it shall be finally judicially determined
that such act or omission constitutes fraud, gross negligence or willful
misfeasance of the Covered Person. No Partner shall be liable to the Partnership
or any Partner for any action taken by any other Partner.
(b) RELIANCE GENERALLY. A Covered Person shall incur no liability in
acting upon any signature or writing reasonably believed by it to be genuine,
and may rely on a certificate signed by an officer of any Person in order to
ascertain any fact with respect to such Person or within such Person's knowledge
and may rely on an opinion of counsel selected by such Covered Person with
respect to legal matters. Each Covered Person may act directly or through its
agents or attorneys. Each Covered Person may consult with counsel, appraisers,
actuaries, engineers, accountants and other skilled Persons of its choosing, and
shall not be liable for anything done, suffered or omitted in good faith and
within the scope of this Agreement in reasonable reliance upon the advice of any
of such Persons. No Covered Person shall be liable to the Partnership or any
Partner for any error of judgment made in good faith by a responsible officer or
employee of such Covered Person or its or his Affiliate. Except as otherwise
provided in this Section 6.2,
18
no Covered Person shall be liable to the Partnership or any Partner for any
mistake of fact or judgment by such Covered Person in conducting the affairs of
the Partnership or otherwise acting in respect of and within the scope of this
Agreement.
(c) RELIANCE ON THIS AGREEMENT. To the extent that, at law or in
equity, a Covered Person has duties (including fiduciary duties) and liabilities
relating thereto to the Partnership or to the Partners, any Covered Person
acting under this Agreement or otherwise shall not be liable to the Partnership
or to any Partner for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they restrict
the duties and liabilities of a Covered Person otherwise existing at law or in
equity, are agreed by the Partners to replace such other duties and liabilities
of such Covered Person.
(d) NOT LIABLE FOR RETURN OF CAPITAL CONTRIBUTIONS. No Covered Person
shall be liable for the return of the Capital Contributions or Capital Account
of any Partner, and such return shall be made solely from available Partnership
assets, if any, and each Partner hereby waives any and all claims it may have
against each Covered Person in this regard.
6.3 INDEMNIFICATION.
(a) INDEMNIFICATION GENERALLY. The Partnership shall and hereby does,
to the fullest extent permitted by applicable law, indemnify, hold harmless and
release each Covered Person from and against all claims, demands, liabilities,
costs, expenses, damages, losses, suits, proceedings and actions, whether
judicial, administrative, investigative or otherwise, of whatever nature, known
or unknown, liquidated or unliquidated ("CLAIMS"), that may accrue to or be
incurred by any Covered Person, or in which any Covered Person may become
involved, as a party or otherwise, or with which any Covered Person may be
threatened, relating to or arising out of the business and affairs of, or
activities undertaken in connection with, the Partnership, or otherwise relating
to or arising out of this Agreement, including, but not limited to, amounts paid
in satisfaction of judgments, in compromise or as fines or penalties, and
counsel fees and expenses incurred in connection with the preparation for or
defense or disposition of any investigation, action, suit, arbitration or other
proceeding (a "PROCEEDING"), whether civil or criminal (all of such Claims and
amounts covered by this Section 6.3, and all expenses referred to in Section
6.3(d), are referred to as "DAMAGES"), except to the extent that it shall have
been finally judicially determined that such Damages arose primarily from the
fraud, gross negligence or willful misfeasance 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 arose from a material
violation of this Agreement by, or the gross negligence of, any Covered Person.
19
(b) CONTRIBUTION. At any time and from time to time prior to the third
anniversary of the last day of the Term, the Partnership may require the
Partners to make further capital contributions (in addition to Capital
Commitments) to satisfy all or any portion of the indemnification obligations of
the Partnership pursuant to Section 6.3(a) above or the Fund Agreement, whether
such obligations arise before or after the last day of the Term or before or
after such Partner's resignation from the Partnership in such proportions as
shall be determined in good faith by the General Partners to be equitable under
the circumstances and, where such obligations arise out of a particular
Portfolio Investment, taking into account the proportion in which distributions
were made with respect to such Portfolio Investment, PROVIDED that each
Partner's obligation to make such capital contributions in respect of such
Partner's share of any such indemnification payment shall be limited to amounts
distributed to such Partner pursuant to this Agreement.
(c) EXPENSES, ETC. To the fullest extent permitted by law, the
reasonable expenses incurred by a Covered Person in defense or settlement of any
Claim that may be subject to a right of indemnification hereunder shall be
advanced by the Partnership prior to the final disposition thereof upon receipt
of an undertaking by or on behalf of the Covered Person to repay such amount if
it shall be determined ultimately that the Covered Person is not entitled to be
indemnified hereunder. The right of any Covered Person to the indemnification
provided herein shall be cumulative with, and in addition to, any and all rights
to which such Covered Person may otherwise be entitled by contract or as a
matter of law or equity and shall extend to such Covered Person's successors,
assigns and legal representatives.
(d) NOTICES OF CLAIMS, ETC. Promptly after receipt by a Covered Person
of notice of the commencement of any Proceeding, such Covered Person shall, if a
claim for indemnification in respect thereof is to be made against the
Partnership, give written notice to the Partnership of the commencement of such
Proceeding, PROVIDED that the failure of any Covered Person to give notice as
provided herein shall not relieve the Partnership of its obligations under this
Section 6.3, except to the extent that the Partnership is actually prejudiced by
such failure to give notice. In case any such Proceeding is brought against a
Covered Person (other than a derivative suit in right of the Partnership), the
Partnership will be entitled to participate in and to assume the defense thereof
to the extent that the Partnership may wish, with counsel reasonably
satisfactory to such Covered Person. After notice from the Partnership to such
Covered Person of the Partnership's election to assume the defense thereof, the
Partnership will not be liable for expenses subsequently incurred by such
Covered Person in connection with the defense thereof. The Partnership will not
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Covered Person of a release from all liability in respect to such Claim.
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ARTICLE VII
BOOKS AND RECORDS; REPORTS TO PARTNERS
7.1 BOOKS AND RECORDS. The Partnership shall keep or cause to be kept
full and accurate accounts of the transactions of the Partnership in proper
books and records of account which shall set forth all information required by
the Act. Such books and records shall be maintained on the basis utilized in
preparing the Partnership's United States income tax returns. Such books and
records shall be available for inspection and copying by the Partners or their
duly authorized representatives during normal business hours for any purpose
reasonably related to such Partner's interest in the Partnership.
7.2 UNITED STATES FEDERAL, STATE AND LOCAL INCOME TAX INFORMATION.
Within 120 days after the end of each Fiscal Year (or as soon as reasonably
practicable thereafter), the Partnership shall send to each Person that was a
Partner at any time during such Fiscal Year copies of (A) Schedule K-1,
"Partner's Share of Income, Credits, Deductions, Etc." (or successor schedule)
with respect to such Person, together with such additional information as may be
necessary for such Person to file his United States federal income tax returns,
and (B) such similar schedules as are required to be furnished by the
Partnership for United States state and local income tax purposes.
7.3 REPORTS TO PARTNERS. The Partnership shall provide to each Partner
and each Special Assignee on a timely basis, if such Partner or Special Assignee
so requests in writing, (A) all reports sent to the limited partners of the Fund
pursuant to the Fund Agreement, (B) the Partnership's unaudited financial
statements for each fiscal quarter and (C) the Partnership's audited financial
statements for each Fiscal Year. Except as otherwise provided in this Agreement
or required by applicable law, the Partnership shall send to each Partner only
such other financial reports as the General Partners shall deem appropriate.
ARTICLE VIII
ADMISSION OF ADDITIONAL PARTNERS; TRANSFERS
8.1 ADMISSION OF ADDITIONAL PARTNERS.
(a) GENERAL. One or more Persons may be admitted to the Partnership as
a Limited Partner (each, an "ADDITIONAL PARTNER"). Each such Person shall be
admitted as an Additional Partner at the time such Person (I) executes this
Agreement or a counterpart of this Agreement and (II) is named as a Partner on
the Partnership Register. In connection with the admission of any Additional
Partner pursuant to this Section 8.1, a majority of the General Partners voting
on such admission (in their sole discretion) shall
21
determine the Capital Commitment that will be accepted from, and pursuant to
Section 3.4(c) the Ordinary Points and Special Points with respect to each
Portfolio Investment, and the Minimum Ordinary Points and Minimum Special Points
of, such Additional Partner.
(b) ADMISSION OF LIMITED PARTNERS. Upon the consent of a majority of
the Tier 1 General Partners, a new Limited Partner may be admitted to the
Partnership.
(c) ADMISSION OF GENERAL PARTNERS. Upon the consent of a majority of
the General Partners, a new general partner may be admitted to the Partnership,
PROVIDED that: (I) if CD Tech Fund II, LLC has become a Special Assignee
pursuant to Section 9.1(a), CD Tech Fund II, LLC may be replaced by ▇▇ ▇▇ with
an entity controlled by the then chief executive officer of MMC Capital; and
(II) subject to the provisions of Article IX of this Agreement, there shall be
no reduction or dilution of Points held by any Tier 1 Partner without the prior
written consent of such Tier 1 Partner.
8.2 TRANSFER BY PARTNERS.
(a) GENERAL. No Partner may assign, sell, convey, pledge, mortgage,
encumber, hypothecate or otherwise transfer in any manner whatsoever (a
"TRANSFER") all or any part of such Partner's interest in the Partnership
without the express prior written consent of a majority of the General Partners,
PROVIDED that an Estate Partner may Transfer all or part of its interest without
such consent to the Partner with whom such Estate Partner is affiliated after
having first offered to the Partnership the opportunity to acquire the interest
of such Estate Partner on terms at least as favorable as those of the proposed
Transfer.
(b) CONDITIONS TO TRANSFER. No Transfer of an interest in the
Partnership shall be permitted if (I) such Transfer would result in a violation
of applicable law, including any securities laws, (II) as a result of such
Transfer, either the Partnership or the Fund would be required to register as an
investment company under the Investment Company Act of 1940, as amended, or
(III) such Transfer would result in the Partnership at any time during its
taxable year having more than 100 members, within the meaning of section
1.7704-1(h)(1)(ii) of the Treasury Regulations (taking into account section
1.7704-1(h)(3) of the Treasury Regulations). No attempted or purported Transfer
in violation of this Section 8.2 shall be effective.
8.3 FURTHER ACTIONS. The Partnership shall cause this Agreement to be
amended to reflect as appropriate the occurrence of any of the events referred
to in this Article VIII, as promptly as is practicable after such occurrence.
22
ARTICLE IX
SPECIAL ASSIGNEES AND CERTAIN OTHER MATTERS
9.1 BECOMING A SPECIAL ASSIGNEE.
(a) TIER 1 PARTNERS. A Tier 1 Partner shall cease to be a Partner and
become a "SPECIAL ASSIGNEE" upon the occurrence of any of the following events:
(i) The death or Disability of such Tier 1 Partner or the Person
with whom such Tier 1 Partner is Associated;
(ii) The status of such Tier 1 Partner as a Partner hereunder is
involuntarily terminated, either with or without Cause,
(A) In the case of CD Tech Fund II, LLC or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
by ▇▇ ▇▇;
(B) In the case of Taravest Partners, SF Tech Fund II, LLC
or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (or any Estate Partner thereof), by a majority
of the remaining General Partners; or
(iii) Such Tier 1 Partner voluntarily terminates its status
as a Partner hereunder.
(b) TIER 2 PARTNERS. A Tier 2 Partner shall cease to be a Partner and
become a "SPECIAL ASSIGNEE" upon the occurrence of any of the following events:
(i) The death or Disability of such Tier 2 Partner;
(ii) The status of such Tier 2 Partner as a Partner hereunder is
involuntarily terminated, either with or without an MMC Capital Cause
Determination, by the Tier 1 General Partners;
(iii) Such Tier 2 Partner voluntarily terminates its status as a
Partner hereunder; or
(iv) Such Tier 2 Partner shall fail to make any Capital
Contribution when due and such failure shall not have been cured 30
days after the mailing or delivery of written notice of such failure.
9.2 CONSEQUENCES OF SPECIAL ASSIGNEE STATUS. On and after the date
that a Partner becomes a Special Assignee, such Special Assignee shall be
treated as a Partner for purposes of Articles III, IV, VI, VII and XII and shall
continue to be bound by the
23
terms of this Agreement (including, without limitation, Section 4.4) and,
subject to Section 12.11, all amendments hereto, as if such Special Assignee
were a Partner, such Partner's Remaining Capital Commitment shall be reduced to
zero, and the Remaining Capital Commitments of M&M Vehicle, L.P. shall be
increased by such reduction. Whenever the act, vote, consent or decision of the
General Partners (or of representatives of the General Partners on the
Investment Committee) is required or permitted pursuant to this Agreement,
Special Assignees of General Partners (or their representatives) shall not be
entitled to perform such act, to participate in such vote or consent, or to make
such decision, and such act, vote, consent or decision shall be performed,
tabulated or made as if such Special Assignee were not a General Partner.
9.3 ECONOMIC RIGHTS OF SPECIAL ASSIGNEES.
(a) TIER 1 PARTNERS.
(i) DEATH OR DISABILITY. Subject to Section 9.3(a)(v), if a
Tier 1 Partner becomes a Special Assignee due to the death or
Disability of such Tier 1 Partner or the Person with whom such Tier 1
Partner is Associated:
(A) In the case of CD Tech Fund II, LLC, SF Tech
Fund II, LLC, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (or any
Estate Partner thereof), such Tier 1 Partner's Minimum
Ordinary Points and Minimum Special Points shall be reduced
by 50%.
(B) In the case of Taravest Partners, such Tier 1
Partner's Minimum Ordinary Points and Minimum Special Points
shall remain unchanged.
(ii) INVOLUNTARY TERMINATION WITH CAUSE. If a Tier 1 Partner
becomes a Special Assignee due to termination from the Partnership
with Cause of such Tier 1 Partner or termination of a Tier 1 Partner
because of the commission of any action constituting Cause by the
Person with whom such Tier 1 Partner is Associated, (X) such Tier 1
Partner shall forfeit 100% of the Points allocated to such Tier 1
Partner with respect to each Portfolio Investment then held by the
Fund and (Y) the Minimum Ordinary Points and Minimum Special Points
for such Tier 1 Partner shall become zero unless:
(A) In the case of CD Tech Fund II, LLC or ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇ (or any Estate Partner thereof), ▇▇ ▇▇ shall
restore all or a portion of the Minimum Ordinary Points and
Minimum Special Points; or
(B) In the case of Taravest Partners, SF Tech
Fund, LLC or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (or any Estate Partner
thereof), a majority of the then
24
remaining General Partners shall restore all or a portion of
the Minimum Ordinary Points and Minimum Special Points.
A judicial determination of Cause may occur after the
termination of a Tier 1 Partner. In addition, in the event of a
termination for Cause, ▇▇ ▇▇ shall have the right to purchase or
direct the purchase of such Tier 1 Partner's interest in the
Partnership at fair market value. Fair market value (1) shall be as
mutually agreed by the parties, PROVIDED that in the absence of such
agreement, fair market value shall be determined by an independent
appraiser mutually agreed to by ▇▇ ▇▇ and by such Tier 1 Partner,
which agreement shall not be unreasonably withheld by either party,
and (2) shall be determined as if the Partnership and the Fund had
been liquidated as of such date. Each of the Partnership, the Tier 1
Partners and ▇▇ ▇▇ shall cooperate with the appraiser and furnish such
information as is required for it to perform the valuation of such
interest. Upon purchase by ▇▇ ▇▇ or its designee of the interest of
such Tier 1 Partner in the Partnership, such Tier 1 Partner shall have
no further interest in the Partnership.
(iii) TERMINATION WITHOUT CAUSE. Subject to Section
9.3(a)(v), if a Tier 1 Partner becomes a Special Assignee due to
involuntary termination from the Partnership without Cause or
voluntary termination from the Partnership for Good Reason of such
Tier 1 Partner or the Person with whom such Tier 1 Partner is
Associated:
(A) In the case of CD Tech Fund II, LLC or ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇ (or any Estate Partner thereof), such Tier 1
Partner's Minimum Ordinary Points and Minimum Special Points
shall be reduced to zero.
(B) In the case of Taravest Partners, SF Tech Fund
II, LLC or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (or any Estate Partner thereof),
such Tier 1 Partner's Minimum Ordinary Points and Minimum
Special Points shall remain unchanged.
(iv) VOLUNTARY TERMINATION. Subject to Section 9.3(a)(v), if
a Tier 1 Partner becomes a Special Assignee due to the voluntary
termination from the Partnership of such Tier 1 Partner:
(A) In the case of CD Tech Fund II, LLC, SF Tech
Fund II, LLC, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (or any
Estate Partner thereof), such Tier 1 Partner's Minimum
Ordinary Points and Minimum Special Points shall be reduced
to zero.
(B) In the case of Taravest Partners, such Tier 1
Partner's Minimum Ordinary Points and Minimum Special Points
shall be reduced
25
to zero unless such Tier 1 Partner shall become a Special
Assignee after April 3, 2003, in which case such Tier 1
Partner's Minimum Ordinary Points and Minimum Special Points
shall remain unchanged.
(v) CHANGE IN CONTROL. Notwithstanding Sections 9.3(a)(i),
(iii) and (iv), if a Change in Control has occurred prior to the time
a Tier 1 Partner becomes a Special Assignee (other than as a result of
involuntary termination with Cause), such Tier 1 Partner's Minimum
Ordinary Points and Minimum Special Points shall remain unchanged, and
at no time will such Tier 1 Partner's Minimum Ordinary Points and
Minimum Special Points change without such Tier 1 Partner's consent.
(b) TIER 2 PARTNERS. If a Tier 2 Partner becomes a Special Assignee,
(I) with respect to each Portfolio Investment made on or after the date such
Tier 2 Partner becomes a Special Assignee, such Tier 2 Partner shall be
allocated zero Ordinary Points and zero Special Points and (II) with respect to
each Portfolio Investment then held by the Fund that was made prior to the date
such Tier 2 Partner becomes a Special Assignee, such Tier 2 Partner shall
forfeit a percentage of the Ordinary Points and Special Points allocated to such
Tier 2 Partner as specified below:
------------------------------------------------------------------------------------------
If the Tier 2 Partner Percentage of Points
becomes a Special Assignee that are Forfeited
------------------------------------------------------------------------------------------
During the 12 month period commencing on the later of April 3, 2000 100%
and the date such Tier 2 Partner begins employment with MMC Capital.
------------------------------------------------------------------------------------------
During the 12 month period commencing on the first anniversary of 80%
the later of April 3, 2000 and the date such Tier 2 Partner begins
employment with MMC Capital.
------------------------------------------------------------------------------------------
During the 12 month period commencing on the second anniversary of 60%
the later of April 3, 2000 and the date such Tier 2 Partner begins
employment with MMC Capital.
------------------------------------------------------------------------------------------
After the third anniversary of the later of April 3, 2000 and the 40%
date such Tier 2 Partner begins employment with MMC Capital.
------------------------------------------------------------------------------------------
PROVIDED that (A) if such Tier 2 Partner becomes a Special Assignee due to
termination with an MMC Capital Cause Determination, such Tier 2 Partner shall
forfeit 100% of the Ordinary Points and Special Points allocated to such Tier 2
Partner with respect to each Portfolio Investment then held by the Fund that was
made prior to the date such Tier 2 Partner becomes a Special Assignee, (B) if
such Tier 2 Partner becomes a Special
26
Assignee due to death or Disability, such Tier 2 Partner shall forfeit zero
Ordinary Points and zero Special Points with respect to each Portfolio
Investment then held by the Fund that was made prior to the date such Tier 2
Partner becomes a Special Assignee, and (c) if a Change of Control has occurred
before a Tier 2 Partner becomes a Special Assignee (other than as a result of
death, disability or involuntary termination with an MMC Capital Cause
Determination), in no event shall such Tier 2 Partner forfeit more than 40
percentage points with respect to each Portfolio Investment then held by the
Fund that was made prior to the date such Tier 2 Partner becomes a Special
Assignee.
If a Tier 2 Partner becomes a Special Assignee other than by reason of
death or Disability, the General Partners shall have the right to purchase or
direct the purchase of such Tier 2 Partner's interest in the Partnership. The
purchase price for such Tier 2 Partner's interest in the Partnership shall be
the fair market value of such interest, which shall be mutually agreed upon by
the parties, PROVIDED that in the absence of such agreement, fair market value
shall be determined by an independent appraiser selected by the General Partners
and approved by such Tier 2 Partner, which approval shall not be unreasonably
withheld by such Tier 2 Partner. The cost of such appraisal shall be shared
equally by the Partnership and such Tier 2 Partner, and each of the Partnership,
the General Partners and the Tier 2 Partners shall cooperate with the appraiser
and furnish such information as is required for it to perform the valuation of
such interest. Fair market value as of any date shall be determined as if the
Partnership and the Fund had been liquidated as of such date. Upon purchase by
the General Partners or their designees of the interest of such Tier 2 Partner
in the Partnership, such Tier 2 Partner shall have no further interest in the
Partnership.
ARTICLE X
DURATION AND TERMINATION OF THE PARTNERSHIP
10.1 DURATION. There shall be a dissolution of the Partnership, and
its affairs shall be wound up, upon the first to occur of any of the following
events:
(a) the day after the second anniversary of the last day of the Term
of the Fund;
(b) the decision, made by all of the General Partners, to dissolve the
Partnership; or
(c) the entry of a decree of judicial dissolution of the Partnership
pursuant to the Act.
10.2 WINDING UP. Upon the dissolution of the Partnership, the General
Partners (or any duly elected liquidating trustee or other duly designated
representative)
27
shall use all commercially reasonable efforts to liquidate all of the
Partnership assets in an orderly manner and apply the proceeds of such
liquidation as set forth in Section 10.3, PROVIDED that if in the good faith
judgment of the General Partners (or such liquidating trustee or other
representative) a Partnership asset should not be liquidated, the General
Partners (or such liquidating trustee or other representative) shall allocate,
on the basis of the Value of any Partnership assets not sold or otherwise
disposed of, any unrealized gain or loss based on such Value to the Partners'
Capital Accounts as though the assets in question had been sold on the date of
distribution and, after giving effect to any such adjustment, distribute said
assets in accordance with Section 10.3, subject to the priorities set forth in
Section 10.3, and PROVIDED, FURTHER, that the General Partners (or such
liquidating trustee or other representative) will in good faith attempt to
liquidate sufficient Partnership assets to satisfy in cash (or make reasonable
provision for) the debts and liabilities referred to in Section 10.3.
10.3 FINAL DISTRIBUTION. After the application or distribution of the
proceeds of the liquidation of the Partnership's assets in one or more
installments to the satisfaction of the liabilities of the Partnership to
creditors of the Partnership (whether by payment or the making of reasonable
provision for payment thereof), including, without limitation, to the
satisfaction of the expenses of the winding-up, liquidation and dissolution of
the Partnership (whether by payment or the making of reasonable provision for
payment thereof), the remaining proceeds, if any, plus any remaining assets of
the Partnership shall, by the end of the taxable year of the Partnership in
which the liquidation occurs (or, if later, within 90 days after the date of
such liquidation), be distributed to the Partners in proportion to, and to the
extent of, each Partner's Capital Account, as such Partner's Capital Account has
been adjusted pursuant to Articles III and IV.
10.4 TIME FOR LIQUIDATION, ETC. Notwithstanding any other provision
hereof, 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 Partnership 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
certificate of cancellation of the Partnership with the Secretary of State.
10.5 TERMINATION. Upon completion of the foregoing, any General
Partner (or any duly elected liquidating trustee or other duly designated
representative) shall execute, acknowledge and cause to be filed a certificate
of cancellation of the certificate with the Secretary of State. Such certificate
of cancellation will not be filed by a General Partner (or such liquidating
trustee or other representative) prior to the third anniversary of the last day
of the Term unless otherwise required by law.
10.6 DEATH, LEGAL INCAPACITY, ETC. The death, bankruptcy, dissolution
or incompetency of a Limited Partner or the status of any Limited Partner as a
Special
28
Assignee, shall not, in and of itself, cause the dissolution or termination of
the Partnership. In any such event, the personal representative (as defined in
the Act) of such Limited Partner may exercise all of the rights of such Limited
Partner for the purpose of settling its estate or administering its property,
subject to the terms and conditions of this Agreement, including any power of an
assignee to become a Limited Partner.
ARTICLE XI
DEFINITIONS
11.1 DEFINITIONS. As used in this Agreement, the following terms have
the following meanings (each such meaning to be equally applicable to the
singular and plural forms of the respective terms so defined) :
"ACT": the Delaware Revised Uniform Limited Partnership Act, 6 Del.
C.ss.17-701 et seq., as amended, and any successor to such statute.
"ADDITIONAL PARTNER": As defined in Section 8.1.
"ADJUSTMENT DATE": The last day of each fiscal year of the Partnership
and any other date that the General Partners, in their sole discretion, deem
appropriate for an interim closing of the Partnership's books.
"AFFILIATE": With respect to any specified Person, (A) a Person that,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the Person specified, (B) a
trust or other estate in which such Person has a substantial beneficial interest
or as to which such Person serves as trustee or in another similar fiduciary
capacity, and (C) any relative or spouse of such Person, or any relative of such
spouse, who has the same home as such Person, PROVIDED that, for purposes of
this Agreement, none of the Portfolio Companies shall be deemed to be Affiliates
of the Partnership.
"AGREEMENT": As defined in the preamble hereto.
"ASSOCIATED": SF Tech Fund II, LLC and The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1999
Family Trust are Associated with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇; and CD Tech Fund II, LLC is
Associated with ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
"BRIDGE FINANCING": As defined in the Fund Agreement.
"BUSINESS DAY": Any day on which banks located in New York City are
not required or authorized by law to remain closed.
29
"CAPITAL ACCOUNT": As defined in Section 3.2.
"CAPITAL COMMITMENT": With respect to any Partner, the amount set
forth opposite the name of such Partner on the Partnership Register under the
heading "Capital Commitment".
"CAPITAL CONTRIBUTION": With respect to any Partner, the amount of
capital contributed by such Partner to the Partnership pursuant to Section 3.1.
"CAUSE": With respect to any Person or the Partner with which such
Person is Associated shall mean (A) the conviction of such Person for any felony
or (B) the final determination by a court of competent jurisdiction that such
Person has engaged in (I) misconduct that causes actual material injury to MMC
or one of its material Affiliates or (II) gross negligence or material willful
misfeasance relating to such Person's work at MMC Capital.
"CERTIFICATE": As defined in the preamble hereto.
"CHANGE IN CONTROL": the occurrence of any of the following events:
any "person," as such term is used in Sections 13(d) and 14(d) of the Exchange
Act, (other than MMC, any trustee or other fiduciary holding securities under an
employee benefit plan of MMC or any corporation owned, directly or indirectly,
by the stockholders of MMC in substantially the same proportions as their
ownership of stock of MMC), is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of MMC
representing 50% or more of the combined voting power of MMC's then outstanding
voting securities;
(a) during any period of not more than two consecutive
years, individuals who at the beginning of such period constitute the
MMC board, and any new director whose election by MMC board of
directors or nomination for election by MMC's stockholders was
approved by a vote of at least two-thirds of the directors of the MMC
board then still in office who either were directors of the MMC board
at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute at least a majority thereof;
(b) the stockholders of MMC approve a merger or
consolidation of MMC with any other corporation, other than (I) a
merger or consolidation which would result in the voting securities of
MMC outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving or parent entity) 50% or more of the
combined voting power of the voting securities of MMC or such
surviving or parent entity outstanding immediately after such merger
or consolidation or (II) a
30
merger or consolidation effected to implement a recapitalization of
MMC (or similar transaction) in which no "person" (as herein above
defined) acquired 50% or more of the combined voting power of the then
outstanding securities of MMC;
(c) the stockholders of MMC approve a plan of complete
liquidation of MMC or an agreement for the sale or disposition by MMC
of all or substantially all of MMC's assets (or any transaction having
a similar effect); or
(d) MMC no longer owns at least 50% of the value and voting
power of MMC Capital.
"CLAIMS": As defined in Section 6.3(a).
"CLAWBACK AMOUNT": As defined in Section 4.4(a).
"CODE": The Internal Revenue Code of 1986, as amended.
"CORPORATE AGENTS": As defined in Section 5.2(g).
"COVERED PERSON": A Partner; any Person that, directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with the Partnership of any of the Partners or is Associated with
any of the Partners; any officers, directors, shareholders, controlling Persons,
partners, employees, representatives or agents (or any of their Affiliates) of a
Partner or of the Partnership (including, without limitation, members of the
Investment Committee), or of any of their respective Affiliates; and any Person
who was, at the time of the act or omission in question, such a Person.
"DAMAGES": As defined in Section 6.3(a).
"DISABILITY": As set forth in the ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Companies Benefit
Program, or, if different, the employment agreement of a Tier 1 Partner or the
Person with whom such Tier 1 Partner is Associated.
"ESTATE PARTNER": Any trust or family partnership formed for the
purpose of estate planning by a Tier 1 Partner to which such Tier 1 Partner
transfers all or any portion of its interest in the Partnership pursuant to
Section 8.2 and which is designated on the Partnership Register as an Estate
Partner.
"EXCHANGE ACT": The Securities Exchange Act of 1934, as amended.
"FISCAL YEAR": As defined in Section 1.3.
31
"FUND": Collectively, MMC Capital Technology Fund II, L.P. (formerly
known as ▇▇▇▇▇ & McLennan Capital Technology Venture Fund II, L.P.), a Delaware
limited partnership, MMC Capital Tech Parallel Fund II, L.P., a Delaware limited
partnership, and their successors and assigns.
"FUND AGREEMENT": Collectively, the limited partnership agreement of
MMC Capital Technology Fund II, L.P. (formerly known as ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Capital
Technology Venture Fund II, L.P.), a Delaware limited partnership, and MMC
Capital Tech Parallel Fund II, L.P., a Delaware limited partnership, each as
amended and restated from time to time.
"GENERAL PARTNER": As defined in the preamble to this Agreement.
"GOOD REASON": With respect to any Person Associated with a Tier 1
Partner or with respect to the Tier 1 Partner with which such Person is
Associated, shall mean the occurrence of one or more of the following events
(unless in the case of clause (a), (b), (c) or (d) below, such occurrence is
cured by MMC Capital within 30 days of receipt of notice by MMC Capital
regarding such occurrence) :
(a) a reduction in such Person's base salary or consulting
fee; failure to pay to such Person, at the time such payments are
required to be made, the bonus or performance payments, if any,
described in such Person's employment or consulting agreement with MMC
Capital; failure to award to such Person participation in future MMC
Capital investments in accordance with such Person's employment or
consulting agreement with MMC Capital, or make any required payments
pursuant to such award; or the elimination of MMC equity opportunity
referred to in such Person's employment or consulting agreement with
MMC Capital;
(b) the failure to continue such Person in the position
described in such Person's employment or consulting agreement with MMC
Capital or a more senior position (unless MMC Capital has notified
such Person in writing of the existence for the basis for Cause or as
otherwise provided such Person's employment or consulting agreement
with MMC Capital) or such Person's removal from such position;
(c) material diminution in such Person's duties, or
assignment of duties materially inconsistent with such Person's
position;
(d) relocation of such Person's principal office location
other than as permitted pursuant to such Person's employment or
consulting agreement with MMC Capital;
32
(e) a Change in Control of MMC or a Change in Control of MMC Capital.
"▇▇ ▇▇": As defined in the preamble to this Agreement.
"HOLDBACK ACCOUNT": As defined in Section 4.3(a).
"HURDLE CLAWBACK AMOUNT": As defined in Section 4.4(b).
"HURDLE HOLDBACK ACCOUNT": As defined in Section 4.3(b).
"HURDLE RETURN": An internal rate of return equal to 20% per annum,
compounded annually, on the aggregate interests of (A) ▇▇ ▇▇ and M&M Vehicle,
L.P. in the Partnership, and (B) ▇▇▇▇▇ & McLennan Risk Capital Holdings, Ltd. in
the Fund, such rate of return calculated by taking into account (I) the amount
and timing of Capital Contributions made by ▇▇ ▇▇ and M&M Vehicle, L.P. to the
Partnership, (II) the amount and timing of capital contributions made by ▇▇▇▇▇ &
McLennan Risk Capital Holdings, Ltd. to the Fund, (III) the amount and timing of
all distributions to ▇▇ ▇▇ and M&M Vehicle, L.P. in respect of their Capital
Contributions to the Partnership and in respect of their Points, and (IV) the
amount and timing of all distributions to ▇▇▇▇▇ & McLennan Risk Capital
Holdings, Ltd. in respect of its capital contributions to the Fund.
"INITIAL AGREEMENT": As defined in the preamble to this Agreement.
"INVESTMENT COMMITTEE": A committee of the Partnership formed to act
pursuant to Section 5.2(e), consisting of one representative of each of the
General Partners and other members designated by (and who shall be removable by)
a majority of the General Partners, including ▇▇ ▇▇. The members are initially:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ representing CD Tech Fund II, LLC; ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
representing SF Tech Fund II, LLC; and A.J.C. ▇▇▇▇▇ representing ▇▇ ▇▇; and, at
the designation of the General Partners, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇. The members will include: (A) upon the death or resignation
of any member or the removal of such member by the General Partner such member
represents, the successor to such member (I) selected by the General Partner
that such member represented and (II) other than in the case of ▇▇ ▇▇, approved
by a majority of the other General Partners; and (B) upon the admission of a
General Partner pursuant to Section 8.1(c), a representative of such General
Partner (I) selected by such General Partner and (II) approved by a majority of
the other General Partners. Upon the death or resignation of any member
designated by the General Partners in accordance with the provisions of the
immediately preceding sentence or the removal of such member by a majority of
the General Partners, including ▇▇ ▇▇, any successor to such member designated
by a majority of the General Partners, including ▇▇ ▇▇.
"LIMITED PARTNER": As defined in the preamble to this Agreement.
33
"MMC CAPITAL": MMC Capital, Inc. (formerly known as ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Capital, Inc.), a Delaware corporation, and any successors and assigns thereof.
"MMC CAPITAL CAUSE DETERMINATION" shall mean, with respect to any Tier
2 Limited Partner, (A) the conviction of such Tier 2 Limited Partner for any
felony and (B) a determination (made in a reasonable manner) by the Tier 1
General Partners that such Tier 2 Limited Partner has committed one or more acts
involving gross negligence or willful misconduct.
"MMC": ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Companies, Inc., a Delaware corporation, and
any successors and assigns thereof.
"MINIMUM ORDINARY POINTS": With respect to each Partner and as of any
date, the minimum number of Ordinary Points that may be allocated to such
Partner with respect to any Portfolio Investment to be made on or after such
date.
"MINIMUM SPECIAL POINTS": With respect to each Partner and as of any
date, the minimum number of Special Points that may be allocated to such Partner
with respect to any Portfolio Investment to be made on or after such date.
"NET INVESTMENT PROFIT" and "NET INVESTMENT LOSS": As defined in the
Fund Agreement.
"NET PROFIT" and "NET LOSS": For any Period or any Fiscal Year, the
net income or net loss of the Partnership for such Period or Fiscal Year
(including the Net Profit and Net Loss of the Fund, as such terms are used in
the Fund Agreement) other than net income or net loss derived directly or
indirectly from Portfolio Investments, determined in accordance with Section
703(a) of the Code, including any items that are separately stated for purposes
of Section 702(a) of the Code, as determined in accordance with federal income
tax accounting principles with the following adjustments:
(i) any income of the Partnership that is exempt from
federal income tax shall be included as income; and
(ii) any expenditures of the Partnership described in Code
Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(i) shall be treated as current expenses.
"ORDINARY POINTS": With respect to each Partner and as of any date,
the number of Points that have been allocated to such Partner with respect to
any Portfolio Investment and that have been designated as "Ordinary Points" in
the Partnership Register.
"PARTNER": As defined in the preamble to this Agreement.
34
"PARTNERSHIP": As defined in the preamble to this Agreement.
"PARTNERSHIP EXPENSES": The costs and expenses that, in the good faith
judgment of the General Partners, arise out of or are incurred in connection
with the organization and operation of the Partnership, including, without
limitation, legal, and accounting expenses, extraordinary expenses and
indemnification obligations.
"PARTNERSHIP REGISTER": As defined in Section 1.1(c).
"PERIOD": The period beginning on the day following any Adjustment
Date (or, in the case of the first Period, beginning on the day of formation of
the Partnership) and ending on the next succeeding Adjustment Date.
"PERSON": Any individual, entity, corporation, company, partnership,
association, limited liability company, joint-stock company, trust or
unincorporated organization.
"POINTS": As defined in Section 3.4(a).
"PORTFOLIO COMPANY": As defined in the Fund Agreement.
"PORTFOLIO INVESTMENT": As defined in the Fund Agreement.
"PREFERENTIAL ALLOCATION AMOUNT": With respect to each Additional
Partner indicated on the Partnership Register as being subject to the provision
for Preferential Allocation and Distribution Amounts, an amount determined under
the Option indicated for such Additional Partner on the Partnership Register and
as set forth below:
OPTION 1 (PREFERENCE TO REFLECT ALL APPRECIATION; PAID OUT OF
FUTURE INVESTMENTS): As of the date of an allocation made pursuant to
Section 3.5(a)(ii) and only with respect to Portfolio Investments made
on or after the date of admission of such Additional Partner, an amount
equal to the excess of (A) solely with respect to Portfolio Investments
made prior to, and disposed of after, the date of admission of such
Additional Partner, the amounts that would have previously been
allocated to such Additional Partner pursuant to Section 3.5(a)(ii) if
such Additional Partner had been allocated with respect to all such
Portfolio Investments (subject to Section 9.3(b)) the Minimum Ordinary
Points and Minimum Special Points listed with respect to such
Additional Partner on the Partnership Register as of the date of
admission of such Additional Partner over (B) all amounts previously
allocated to such Additional Partner pursuant to Section 3.5(a)(ii)(B).
OPTION 2 (PREFERENCE TO REFLECT APPRECIATION AFTER THE DATE OF
ADMISSION; PAID OUT OF EXISTING INVESTMENTS): As of the date of an
allocation made pursuant to Section 3.5(a)(ii) and only with respect to
Portfolio Investments made prior to,
35
but disposed of after, the date of admission of such Additional
Partner, the amounts that would be allocated to each such Additional
Partner pursuant to Section 3.5(a)(ii) with respect to such Portfolio
Investment if such Portfolio Investment had been acquired on the date
that such Additional Partner was admitted to the Partnership at a cost
equal to its fair market value on such date and such Additional
Partner had been allocated with respect to such Portfolio Investment
(subject to Section 9.3(b)) the Minimum Ordinary Points and Minimum
Special Points listed with respect to such Additional Partner on the
Partnership Register as of the date of admission of such Additional
Partner.
"PREFERENTIAL DISTRIBUTION AMOUNT": With respect to each Additional
Partner indicated on the Partnership Register as being subject to the provision
for Preferential Allocation and Distribution Amounts, an amount determined under
the Option indicated for such Additional Partner on the Partnership Register and
as set forth below:
OPTION 1: As of the date of a distribution made pursuant to
Section 4.2(b)(iii) and only with respect to Portfolio Investments made
on or after the date of admission of such Additional Partner, an amount
equal to the excess of (A) the cumulative amount of Net Investment
Profit allocated to such Additional Partner pursuant to Section
3.5(a)(ii)(B) as of such date over (B) the cumulative amount
distributed to such Additional Partner pursuant to Section
4.2(b)(iii)(B) as of such date (including, for the avoidance of doubt,
any amount deemed distributed to such Additional Partner pursuant to
Section 4.2(b)(iii)(B) by virtue of the placement of such amount into
such Additional Partner's Holdback Account or Hurdle Holdback Account
pursuant to Section 4.4).
OPTION 2: As of the date of a distribution made pursuant to
Section 4.2(b)(iii) and only with respect to Portfolio Investments made
prior to, but disposed of after, the date of admission of such
Additional Partner, an amount equal to the excess of (A) the cumulative
amount of Net Investment Profit allocated to such Additional Partner
pursuant to Section 3.5(a)(ii)(B) as of such date over (B) the
cumulative amount distributed to such Additional Partner pursuant to
Section 4.2(b)(iii)(B) as of such date (including, for the avoidance of
doubt, any amount deemed distributed to such Additional Partner
pursuant to Section 4.2(b)(iii)(B) by virtue of the placement of such
amount into such Additional Partner's Holdback Account or Hurdle
Holdback Account pursuant to Section 4.4).
"PRIME RATE": As defined in the Fund Agreement.
"PROCEEDING": As defined in Section 6.3(a).
36
"REMAINING CAPITAL COMMITMENT": For any Partner, the excess of (a)
such Partner's Capital Commitment over (b) the aggregate amount of such
Partner's Capital Contributions, as adjusted pursuant to Section 9.2.
"SECRETARY OF STATE": As defined in the preamble hereto.
"SECURITIES": Shares of capital stock, limited partner interests,
limited liability company interests, warrants, options, bonds, notes, debentures
and other securities and equity and debt interests of whatever kind of any
Person, whether or not publicly traded or readily marketable.
"SPECIAL POINTS": With respect to each Partner and as of any date, the
number of Points that have been allocated to such Partner with respect to any
Portfolio Investment and that have been designated as "Special Points" in the
Partnership Register.
"SPECIAL ASSIGNEE": As defined in Section 9.1.
"SUBSCRIPTION AGREEMENTS": The subscription agreements between the
Fund and each of its limited partners.
"TEMPORARY INVESTMENT": As defined in the Fund Agreement.
"TERM": As such term will be defined in the Fund Agreement.
"TIER 1 GENERAL PARTNER": Each of SF Tech Fund II, LLC and CD Tech
Fund II, LLC or any other General Partner admitted in accordance with Section
8.1(b) and listed on the Partnership Register as a Tier 1 General Partner.
"TIER 1 PARTNER": Each of the Tier 1 General Partners, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Taravest Partners, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or any other Partner admitted
in accordance with Section 8.1(a) and listed on the Partnership Register as a
Tier 1 Partner.
"TIER 2 PARTNER": Any Partner admitted in accordance with Section
8.1(a) and listed on the Partnership Register as a Tier 2 Partner.
"TRANSFER": As defined in Section 8.2(a).
"TREASURY REGULATIONS": The Regulations of the Treasury Department of
the United States issued pursuant to the Code.
"VALUE": As defined in the Fund Agreement, PROVIDED that the
provisions of the Fund Agreement regarding the board of advisors of the Fund
shall not apply to assets or Securities not held by the Fund.
37
ARTICLE XII
MISCELLANEOUS
12.1 NOTICES. All notices, requests, demands and other communications
relating to this Agreement shall be in writing and shall be deemed to have been
duly given if (A) delivered in person, (B) mailed by registered or certified
mail, return receipt requested and first-class postage paid, (C) mailed by
overnight or next day express mail, or (D) sent by facsimile or email
transmission and followed by a written or verbal confirmation of receipt by a
General Partner or MMC Capital, as follows: (1) if to the Partners, at the
addresses set forth on the Partnership's books and records, (2) if to the
Partnership, at the address referred to in Section 1.4, or (3) to such other
address as any Partner (or a General Partner on behalf of the Partnership) shall
have last designated by notice to the Partnership and the other Partners, as the
case may be. Notices given in person, or by facsimile or email transmission
followed by confirmation of receipt, shall be deemed to have been made when
given (and, in the case of facsimile or email, when sent PROVIDED that
confirmation is obtained in accordance with clause (d) hereof). Notices mailed
in accordance with the first sentence of this Section 12.1 shall be deemed to
have been given and made three days following the date so mailed.
12.2 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute a single agreement.
12.3 TABLE OF CONTENTS AND HEADINGS. The table of contents and the
headings of the articles and sections of this Agreement are inserted for
convenience only and shall not be deemed to constitute a part hereof.
12.4 SUCCESSORS AND ASSIGNS. Except as otherwise specifically provided
herein, this Agreement shall be binding upon and inure to the benefit of the
Partners and their legal representatives, heirs, administrators, executors,
successors, and permitted assigns.
12.5 SEVERABILITY. Every term and provision of this Agreement is
intended to be severable. If any term or provision hereof is illegal or invalid
for any reason whatsoever, such term or provision will be enforced to the
maximum extent permitted by law and, in any event, such illegality or invalidity
shall not affect the validity of the remainder of this Agreement.
12.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, ALL RIGHTS
AND REMEDIES BEING GOVERNED BY DELAWARE LAW, WITHOUT REGARD TO CONFLICTS OF LAWS
RULES.
38
12.7 CONFIDENTIALITY. Each Partner agrees that he, she or it shall
keep confidential and not disclose to any third Person or use for his own
benefit, without the written consent of the General Partners, any trade secrets
or confidential or proprietary information with respect to the Partnership, the
Fund or any Portfolio Company, or any of its or their Affiliates, PROVIDED that
a Partner may disclose any such information (a) as has become generally
available to the public other than as a result of a disclosure by a Partner or
his or her representative, (b) as may be required or appropriate in any report,
statement or testimony submitted to any municipal, state or national (including,
without limitation, foreign) regulatory body having or claiming to have
jurisdiction over such Partner, (c) as may be required in response to any
summons or subpoena or in connection with any litigation and (d) to the extent
necessary in order to comply with any law, order, regulation or ruling
applicable to such Partner, and PROVIDED FURTHER that, to the extent permitted
by applicable law and not restricted by confidentiality or other agreements,
arrangements or requirements to which the Partnership, any Portfolio Company,
the Fund or any of their Affiliates are bound, such Partner may, after becoming
a Special Assignee, disclose to third persons the performance of investments
made by the Fund while, he, she or it was a Partner solely for the purpose of
providing information relating to such Special Assignee's track record, but
nothing in this proviso shall authorize any Partner or Special Assignee to
retain or to disclose to any third Person any books, records, documents or other
written materials held by such Partner or available to such Partner before
becoming a Special Assignee containing information of the kind described in this
sentence before the first proviso.
12.8 SURVIVAL OF CERTAIN PROVISIONS. To the fullest extent permitted
by law, the obligations of each Partner pursuant to Section 4.4, Article VI and
Section 12.7 shall survive the termination or expiration of this Agreement and
the dissolution, winding up and termination of the Partnership.
12.9 WAIVER OF PARTITION. Except as may be otherwise 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 he,
she or it may have to maintain an action for partition of any of the
Partnership's property.
12.10 POWER OF ATTORNEY. Subject to Section 12.11, each Limited
Partner does hereby irrevocably constitute and appoint each General Partner with
full power of substitution, the true and lawful attorney-in-fact and agent of
such Partner, to execute, acknowledge, verify, swear to, deliver, record and
file, in his or her name, place and ▇▇▇▇▇, all instruments, documents and
certificates which may from time to time be required by the laws of the State of
Delaware, the United States of America, the State of Connecticut, the State of
New York, and any other jurisdiction in which the Partnership conducts or plans
to conduct business, or any political subdivision or agency thereof, to
effectuate, implement and continue the valid existence and business of the
Partnership,
39
including, without limitation, the power and authority to execute, verify, swear
to, acknowledge, deliver, record and file:
(a) all certificates and other instruments, including,
without limitation, any amendments to this Agreement or to the
Certificate, that the General Partners deem appropriate to form,
qualify or continue the Partnership as a limited partnership in the
State of Delaware and all other jurisdictions in which the Partnership
conducts or plans to conduct business;
(b) all instruments that the General Partners deem
appropriate to reflect any amendment to this Agreement or the
Certificate (I) 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 United States federal or state agency,
or in any United States federal or state statute, compliance with
which the General Partners deem to be in the best interests of the
Partnership, (II) to change the name of the Partnership or (III) to
cure any ambiguity or correct or supplement any provision herein or
therein contained that may be incomplete or inconsistent with any
other provision herein or therein contained;
(c) all conveyances and other instruments that the General
Partners deem appropriate to reflect and effect the dissolution and
termination of the Partnership pursuant to the terms of this
Agreement, including, without limitation, the filing of a certificate
of cancellation as provided for in Article X;
(d) all instruments relating to duly authorized (I)
Transfers of interests of Partners, (II) admissions of Additional
Partners, (III) changes in the Capital Commitment, Minimum Ordinary
Points, Minimum Special Points or Points of any Partner or (IV) duly
adopted amendments to this Agreement, all in accordance with the terms
of this Agreement;
(e) certificates of assumed name and such other certificates
and instruments as may be necessary under the fictitious or assumed
name statutes from time to time in effect in the State of Delaware,
the State of Connecticut, the State of New York and any other
jurisdiction in which the Partnership conducts or plans to conduct
business; and
(f) any other instruments determined by the General Partners
to be necessary or appropriate in connection with the proper conduct
of the business of the Partnership and that do not adversely affect
the interests of the Partners.
Such attorney-in-fact and agent shall not, however, have the right,
power or authority to amend or modify this Agreement when acting in such
capacities, except to
40
the extent authorized herein. This power of attorney shall not be affected by
the subsequent disability or incompetence of the principal.
The power of attorney granted herein shall be deemed to be coupled with
an interest, shall be irrevocable, shall survive the death, dissolution,
bankruptcy or legal disability of each of the Partners and shall extend to their
successors and assigns. The power of attorney granted herein may be exercised by
such attorney-in-fact and agent for all Partners of the Partnership (or any of
them) by listing all (or any) of such Partners required to execute any such
instrument on the signature page of such instrument, and signing such instrument
at the end of such list, acting as attorney-in-fact. Any person dealing with the
Partnership may conclusively presume and rely upon the fact that any instrument
referred to above, executed by such attorney-in-fact and agent, is authorized,
regular and binding, without further inquiry. If required, the Partners shall
execute and deliver to the Partnership, within five Business Days after receipt
of a request therefor, such further designations, powers of attorney or other
instruments as the General Partners shall reasonably deem necessary for the
purposes hereof.
12.11 MODIFICATIONS. Except as otherwise expressly provided herein,
this Agreement may be modified or amended, and any provision hereof may be
waived only upon the written consent of each of the General Partners, PROVIDED
that no such modification, amendment or waiver that would (A) adversely alter
(I) any Partner's economic interest in the Partnership (including, without
limitation, such Partner's Capital Commitment, Minimum Ordinary Points, Minimum
Special Points, Ordinary Points and Special Points allocated with respect to any
Portfolio Investment, Capital Contribution, obligations pursuant to Section 4.4,
or right to or timing of distributions), voting rights contained in Article V
hereof (solely with respect to General Partners), rights under the liability,
exculpation and indemnification provisions in Article VI hereof, right to
receive information, or the definition of Partnership Expenses or (II) the tax
consequences to such Partner relating to the Partnership which would
discriminate against such Partner vis-a-vis the other Partners, as applicable,
or (B) extend or increase any financial obligation or liability of such Partner,
shall be effective without the consent, in each case, of such Partner, as
applicable.
12.12 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the Partners with respect to the subject matter hereof and
supersedes any prior agreement or understanding, both written and oral, among
them with respect to such subject matter.
12.13 FURTHER ACTIONS. Each Partner shall execute and deliver such
other certificates, agreements and documents, and take such other actions, as
may reasonably be requested by the Partnership in connection with the formation
of the Partnership and the achievement of its purposes, including, without
limitation, (A) any documents that the General Partners deem necessary or
appropriate to form, qualify or continue the
41
Partnership as a limited partnership in all jurisdictions in which the
Partnership conducts or plans to conduct business and (B) all such agreements,
certificates, tax statements and other documents as may be required to be filed
in respect of the Partnership.
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written, and have indicated
their Capital Commitments in the spaces below provided next to their names.
GENERAL PARTNERS
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ TECH ▇▇ ▇▇, INC.
$ By:
-------------------- ---------------------------
Capital Commitment Name:
Title:
SF TECH FUND II, LLC
$ By:
-------------------- ----------------------------
Capital Commitment Name:
Title:
CD TECH FUND II, LLC
$ By:
-------------------- ----------------------------
Capital Commitment Name:
Title:
1
LIMITED PARTNERS
2