EXHIBIT 10.32
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THE LIMITED PARTNER INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT
BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 OR UNDER THE
SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES OF AMERICA OR NON-U.S. JURISDICTION
AND MAY NOT
BE SOLD OR TRANSFERRED WITHOUT COMPLIANCE WITH APPLICABLE FEDERAL,
STATE OR
NON-U.S. SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. IN
ADDITION, TRANSFER OR OTHER DISPOSITION OF THE LIMITED PARTNER
INTERESTS IS
RESTRICTED AS PROVIDED IN THIS AGREEMENT.
----------------------------
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
GSAV (ASSOCIATES), L.P.
----------------------------
DATED AS OF MARCH 31, 2006
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TABLE OF CONTENTS
PAGE
----
ARTICLE 1
GENERAL PROVISIONS
Section 1.01.
Definitions...................................................
1
Section 1.02. Partnership
Name..............................................
1
Section 1.03. Office; Registered
Agent......................................
1
Section 1.04. Continuation of the
Partnership...............................
1
Section 1.05. Purposes of the
Partnership...................................
2
Section 1.06. Liability of the Partners
Generally...........................
2
Section 1.07. Admission of Limited Partners; Additional Limited
Partners;
Increase of Capital Commitments
..........................................
2
Section 1.08. Number of
Partners............................................
5
ARTICLE 2
MANAGEMENT AND OPERATIONS OF THE PARTNERSHIP
Section 2.01. Management
Generally..........................................
6
Section 2.02. Authority of the General
Partner..............................
6
Section 2.03. Other
Authority...............................................
8
Section 2.04. Management
Fee................................................
9
Section 2.05. Borrowings by the
Partnership.................................
10
Section 2.06. Other
Activities..............................................
11
Section 2.07. Books and Records; Accounting Method; Fiscal
Year.............
13
Section 2.08. Certain Tax
Matters...........................................
14
Section 2.09.
Confidentiality...............................................
15
Section 2.10. Annual
Meeting................................................
17
Section 2.11. Reliance by Third
Parties.....................................
17
Section 2.12. Transaction
Fees..............................................
17
Section 2.13. Temporary Investment of
Funds.................................
18
Section 2.14. Certain FCC
Matters...........................................
18
ARTICLE 3
INVESTMENTS
Section 3.01. Partnership Investments
Generally.............................
20
Section 3.02. Investment
Limitations........................................
20
Section 3.03. Structuring of Investments Generally; Certain Rules
Governing Investments
....................................................
20
Section 3.04. Investment
Committee..........................................
24
Section 3.05. Restriction on Activities by Greenhill
Entities...............
25
Section 3.06. Related
Funds.................................................
25
Section 3.07. Additional Investment
Situations..............................
25
i
Section 3.08. General Principles on the Disposition of
Investments..........
26
Section 3.09. Non-U.S. Currency
Considerations..............................
27
ARTICLE 4
EXPENSES
Section 4.01. Definition and Payment of General Partner
Expenses............
27
Section 4.02. Definition and Payment of Partnership
Expenses................
27
Section 4.03. Responsibility for Partnership Expenses Among the
Partners....
29
Section 4.04. Sources of Funds for Funding by the Partners of
Partnership
Expenses
.................................................................
31
Section 4.05. Non-Applicability of Article 4 to Parallel Investment
Expenses
.................................................................
31
ARTICLE 5
CAPITAL COMMITMENTS AND CAPITAL CONTRIBUTIONS
Section 5.01. Capital
Commitments...........................................
31
Section 5.02. Drawdown
Procedures...........................................
33
Section 5.03. Excuse
Procedure..............................................
36
Section 5.04. Default by
Investors..........................................
40
Section 5.05. Certain Exclusion
Circumstances...............................
43
ARTICLE 6
DISTRIBUTIONS; ALLOCATIONS; CAPITAL ACCOUNTS
Section 6.01. Distributions
Generally.......................................
44
Section 6.02. Distributions of Proceeds of Partnership
Investments..........
45
Section 6.03. Other
Income..................................................
47
Section 6.04. Tax
Distributions.............................................
47
Section 6.05. Other General Principles of
Distribution......................
47
Section 6.06. Loans and Withdrawal of
Capital...............................
50
Section 6.07. Capital Accounts;
Allocations.................................
50
Section 6.08. Tax
Allocations...............................................
52
ARTICLE 7
PARALLEL INVESTMENTS
Section 7.01. Parallel Investments
Generally................................
53
Section 7.02. Parallel Investment
Expenses..................................
53
Section 7.03. Parallel Investment Vehicle
Borrowings........................
55
Section 7.04. Consequences upon
Default.....................................
55
ii
ARTICLE 8
REPORTS TO LIMITED PARTNERS
Section 8.01.
Reports......................................................
55
ARTICLE 9
EXCULPATION AND INDEMNIFICATION
Section 9.01.
Exculpation and Indemnification..............................
57
Section 9.02.
Forum Selection..............................................
60
Section 9.03.
Return of Distributions......................................
60
Section 9.04.
Parallel Investments.........................................
61
ARTICLE 10
DURATION AND DISSOLUTION OF THE PARTNERSHIP
Section 10.01.
Duration.....................................................
61
Section 10.02.
Dissolution..................................................
62
Section 10.03. Liquidation of
Partnership...................................
62
Section 10.04. Distribution Upon Dissolution of the
Partnership.............
63
Section 10.05. Withdrawal, Death or Incompetency of a Limited
Partner.......
65
ARTICLE 11
TRANSFERABILITY OF GENERAL PARTNER'S INTEREST
Section 11.01. Transferability of General Partner's
Interest................
66
Section 11.02. No-Fault
Removal.............................................
67
ARTICLE 12
TRANSFERABILITY OF A LIMITED PARTNER'S INTEREST
Section 12.01. Restrictions on
Transfer.....................................
69
Section 12.02. Expenses of Transfer;
Indemnification........................
69
Section 12.03. Recognition of Transfer; Substituted Limited
Partners........
70
Section 12.04. Transfers During a Fiscal
Year...............................
71
Section 12.05. Information Reporting in Connection with
Transfer............
71
Section 12.06. Securities Laws;
Legends.....................................
72
ARTICLE 13
MISCELLANEOUS
Section 13.01. Amendments;
Waivers..........................................
72
Section 13.02.
Approvals....................................................
73
Section 13.03. Mergers and
Consolidations...................................
74
Section 13.04. Investment
Representation....................................
75
Section 13.05. Successors; Counterparts;
Beneficiaries......................
75
iii
Section 13.06. Governing Law; Severability; Certain Matters as to
the
General Partner
..........................................................
75
Section 13.07. Further
Assurance............................................
76
Section 13.08.
Filings......................................................
76
Section 13.09. Power of
Attorney............................................
76
Section 13.10. No Bill for Partnership
Accounting...........................
76
Section 13.11.
Goodwill.....................................................
77
Section 13.12.
Notices......................................................
77
Section 13.13.
Headings.....................................................
77
Section 13.14. Tax
Election.................................................
77
Section 13.15. Side
Letters.................................................
77
Section 13.16. Liquidation Value Safe Harbor
Election.......................
78
Appendix A -
Definitions.............................................
A-1
Schedule 1 - Pre-Closing Investments
iv
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
GSAV (ASSOCIATES), L.P.
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP dated as of
March
31, 2006 of GSAV (Associates), L.P.
W I T N E S S E T H :
WHEREAS, GSAVP GP, L.P., a Delaware limited partnership, in its
capacity
as General Partner, and Ulrika Ekman, as the initial Limited
Partner, have
heretofore entered into an Agreement of Limited Partnership dated
as of March
28, 2006 (the "ORIGINAL Agreement") and have formed a limited
partnership
pursuant to the Delaware Revised Uniform Limited Partnership Act 6
Del.C.
ss.17-101, et seq., as amended from time to time (the "DELAWARE
ACT"); and
WHEREAS, the parties hereto desire to continue the limited
partnership and
to amend and restate the Original Agreement in its entirety;
NOW, THEREFORE, the parties hereto hereby amend and restate the
Original
Agreement in its entirety and hereby agree as follows:
ARTICLE 1
General Provisions
Section 1.01. Definitions. Capitalized terms used herein without
definition have the meanings assigned to them in Appendix A hereto.
Section 1.02. Partnership Name. The name of the Partnership is GSAV
(Associates), L.P.
Section 1.03. Office; Registered Agent. (a) The name and address of
the
Partnership's registered agent in the State of Delaware is: The
Corporation
Trust Company, Corporation Trust Center, 1209 Orange Street, City
of Wilmington,
County of New Castle, Delaware 19801. The Partnership shall
maintain a
registered office in the State of Delaware at the same address.
(a) The business address of the General Partner shall be 300 Park
Avenue,
New York, New York 10022, U.S.A. or such other place as the General
Partner
shall determine in its discretion.
Section 1.04. Continuation of the Partnership. The parties hereto
hereby
agree to continue the Partnership as a limited partnership under
and pursuant to
the Delaware Act.
Section 1.05. Purposes of the Partnership. The purposes of the
Partnership
are (a) to identify potential Partnership Investments, (b) to
acquire, hold and
dispose of Partnership Investments, and (c) pending utilization or
disbursement
of funds of the Partnership, to invest such funds in accordance
with the terms
of this Agreement, in each case consistent with the objectives
described in the
Confidential Offering Memorandum. The Partnership shall have the
power to do any
and all acts necessary, appropriate, desirable, incidental or
convenient to or
for the furtherance of the purposes described in this Section 1.05,
including,
without limitation, any and all of the powers that may be exercised
on behalf of
the Partnership by the General Partner pursuant to this Agreement.
Section 1.06. Liability of the Partners Generally. (a) Except as
otherwise
provided in the Delaware Act, the General Partner shall have the
liabilities of
a partner in a partnership without limited partners to any Person
other than the
Partnership and the Limited Partners. Except as otherwise provided
in this
Agreement or the Delaware Act, the General Partner shall have the
liabilities of
a partner in a partnership without limited partners to the
Partnership and each
Limited Partner.
(a)
Except as otherwise provided in this Agreement or the Delaware
Act, no Limited Partner (or former Limited Partner) shall be
obligated to make
any contribution to the Partnership or have any liability for the
debts and
obligations of the Partnership.
Section 1.07. Admission of Limited Partners; Additional Limited
Partners;
Increase of Capital Commitments. (a) On the first Closing Date,
each Person
whose subscription for a limited partner interest in the
Partnership has been
accepted by the General Partner shall become a Limited Partner (and
shall be
shown as such on the books and records of the Partnership) upon (i)
execution
and delivery by (or, pursuant to a power of attorney, on behalf of)
such Person
and the General Partner of counterparts of this Agreement, (ii)
making a Capital
Contribution in accordance with Section 5.01 and (iii) making a
payment to the
Partnership in respect of the aggregate Management Fees payable by
such Person
in accordance with Section 2.04(c).
(a)
The General Partner may make privately negotiated investments as
principal for its own account in unlisted or illiquid equity
securities that fit
the Partnership's investment philosophy (any such investments, the
"PRE-CLOSING
INVESTMENTS"). On or promptly following the first Closing Date, the
General
Partner will cause the Partnership and Related Funds to make an
Investment in
the Pre-Closing Investments by transferring the Pre-Closing
Investments to the
Partnership and Related Funds. Each transfer of a Pre-Closing
Investment shall
be treated as a contribution by the General Partner to the
Partnership of such
Pre-Closing Investment and shall result in an increase in the
capital account of
the General Partner in an amount (the "DESIGNATED AMOUNT") equal to
the sum of
(i) the original acquisition cost of the Pre-Closing Investment
(the "ORIGINAL
2
ACQUISITION COST") and (ii) a notional interest charge in respect
of the
Original Acquisition Cost equal to 8% per annum calculated from the
date of
original acquisition of such Pre-Closing Investment by the General
Partner until
the effective date of the transfer of such Pre-Closing Investment
to the
Partnership and the Related Funds (the "CONTRIBUTION DATE"), net of
any payments
received by the General Partner prior to the Contribution Date in
respect of
such Pre-Closing Investment. Subject to Section 5.03, each Limited
Partner
admitted on or prior to the Contribution Date shall, on or prior to
the date on
which such Limited Partner is admitted, make Capital Contributions
in accordance
with Section 5.01 with respect to such Pre-Closing Investments and
any
additional Capital Contributions as may be requested by the General
Partner for
Temporary Cash Funds. As of the Contribution Date, each Partner
will be deemed
to have made an investment in each Pre-Closing Investment, and the
Invested
Capital of each Partner will be equal to its Available Commitment
Percentage of
the Designated Amount for such Pre-Closing Investment. The amounts
contributed
to the Partnership by the Limited Partners in respect of any
Pre-Closing
Investment shall be distributed promptly to the General Partner
until the
General Partner has received an amount equal to 99% of the
Designated Amount.
(b)
At any time during the Admission Period, the General Partner may
cause the Partnership to admit additional Limited Partners or to
allow any
existing Limited Partner to increase its original Capital
Commitment. Limited
Partners admitted to the Partnership during the Admission Period on
any Closing
Date other than the first Closing Date, shall participate in
Partnership
Investments made and Partnership Expenses incurred prior to its
admission. In
addition, at any time after the Admission Period during the
Commitment Period,
the General Partner may cause the Partnership to admit additional
Limited
Partners. Limited Partners admitted to the Partnership after the
Admission
Period during the Commitment Period, shall not participate in
Partnership
Investments made and Partnership Expenses incurred prior to its
admission. A
Person shall become such an additional Limited Partner (and shall
be shown as
such on the books and records of the Partnership) upon execution
and delivery by
(or, pursuant to a power of attorney, on behalf of) such Person and
the General
Partner of counterparts of this Agreement, subject to the terms of
this Section
1.07. Neither the admission of any additional Limited Partner to
the Partnership
nor the increase in the original Capital Commitment of any existing
Limited
Partner pursuant to this Section 1.07 shall require the approval of
any Limited
Partner existing immediately prior to such admission or increase.
(c)
Any additional Limited Partner admitted to the Partnership during
the Admission Period on any Closing Date other than the first
Closing Date (and,
to the extent of any increase in its Capital Commitment on any such
subsequent
Closing Date, any Limited Partner so increasing its Capital
Commitment) (each
such Limited Partner, a "NEW COMMITMENT PARTNER", and each such
Limited
Partner's new or increased Capital Commitment, a "NEW COMMITMENT")
shall:
3
(i)
make a Capital Contribution in an amount equal to the
aggregate amount of Capital Contributions that would have been made
by
such New Commitment Partner had such New Commitment Partner been
admitted
to the Partnership on the first Closing Date with such New
Commitment
(such amount shall include the Limited Partner's pro rata share of
the
costs of any Partnership Investments made prior to its admission
(including Pre-Closing Investments described in Section 1.07(b))
and
Partnership Expenses incurred prior to its admission (including
Organizational Expenses));
(ii)
make a Capital Contribution to the Partnership in an
amount equal to any Management Fees in respect of such New
Commitment that
would have been contributed by such New Commitment Partner had such
New
Commitment Partner been admitted to the Partnership on the first
Closing
Date with such New Commitment; and
(iii)
pay to the Partnership an amount as an interest charge
(and not as a Capital Contribution) equal to 8% applied to the
amounts
required to be contributed under clause (i) and (ii) above, as if
such
amounts had been loaned by the Partnership to such New Commitment
Partner
on the date (or dates) that such amount would have become due under
Section 5.02 had such New Commitment Partner been admitted to the
Partnership on the first Closing Date with such New Commitment.
For the avoidance of doubt, with respect to any New Commitment
Partner that is a
Limited Partner increasing its Capital Commitment on such Closing
Date, the
amount payable by such New Commitment Partner pursuant to Section
1.07(d)(i) or
Section 1.07(d)(ii) shall not include the aggregate amount of
Capital
Contributions or the aggregate amount in respect of Management
Fees,
respectively, theretofore paid by such New Commitment Partner with
respect to
its existing commitment.
(d)
As promptly as practicable after any Closing Date following the
first Closing Date, each Limited Partner (other than a Limited
Partner that is a
New Commitment Partner on such Closing Date) shall receive a
portion of the
amount contributed by each New Commitment Partner pursuant to
Section 1.07(d)(i)
on such subsequent Closing Date. The distribution to such Limited
Partner shall
be treated as a return of capital (and the Available Capital
Commitment of such
Limited Partner shall be increased) and shall be in an amount such
that, after
giving effect to such distribution, such Limited Partner shall have
made Capital
Contributions in an amount equal to the aggregate amount that would
have been
made by such Limited Partner had such New Commitment Partner been
admitted to
the Partnership on the first Closing Date with the applicable New
Commitment.
Such Limited Partner shall also receive a portion of the amount
paid by such New
Commitment Partner pursuant to Section 1.07(d)(iii) attributable to
the amount
being distributed to such Limited Partner as a return of capital.
Subject to the
4
Delaware Act, any distribution under this Section 1.07(e) shall not
be treated
as a distribution for purposes of Article 6 or Section 10.04. Upon
the admission
of additional limited partners to the Partnership or to any Related
Fund, the
Partnership may purchase from or sell to any Related Fund a portion
of any
Investments or other assets necessary in order for the Partnership
to
appropriately give effect to Section 1.07(d) and (e) herein (and
for any such
Related Fund to give effect to the corresponding sections in the
limited
partnership agreement of such Related Fund) in light of the
additional funding
provided by such additional limited partners.
(e)
As promptly as practicable after any subsequent Closing Date, the
Partnership shall pay to the Manager, (i) as an additional amount
of Management
Fees, that portion of the Management Fees contributed by the New
Commitment
Partners pursuant to Section 1.07(d)(ii) and (ii) a portion of the
amount paid
by the New Commitment Partners pursuant to Section 1.07(d)(iii)
attributable to
the Management Fee.
(f)
Any additional Limited Partner admitted to the Partnership on any
Closing Date after the Admission Period shall pay to the
Partnership an amount
equal to Capital Contributions requested in accordance with Section
5.01 and
Management Fees payable by such Person pursuant to Section 2.04(c)
with respect
to such new Capital Commitment (pro-rated, if necessary for the
remainder of the
then-current semi-annual period).
(g)
Notwithstanding any other provision of this Agreement, the
Partnership and the General Partner, on its own behalf or on behalf
of the
Partnership, shall enter into and carry out the terms of the
Management
Agreement, subscription agreements with the Limited Partners, and
any other
agreements to induce a Person to purchase a limited partner
interest in the
Partnership (each, a "SIDE LETTER"), without any further act,
approval or vote
of any Partner or other Person.
(h)
On the first Closing Date, following the admission of Limited
Partners to the Partnership, the initial Limited Partner shall
withdraw from the
Partnership and shall be entitled to receive the return of her
capital
contribution without interest or deduction.
Section 1.08. Number of Partners. The Partnership shall not have
more than
one-hundred (100) Partners at any time. For purposes of this
Section 1.08, the
number of Partners in the Partnership shall be determined in
accordance with
Treasury Regulations Section 1.7704-1(h) and Section 3(c)(1) of the
Investment
Company Act. No entity that is a partnership, an S corporation or a
grantor
trust for U.S. federal income tax purposes shall be admitted as a
Partner unless
such entity has represented to the General Partner that either (a)
such entity's
investment in the Partnership does not account for substantially
all of the
value of any Person's beneficial interest in such entity or (b) it
was not a
principal purpose
5
of such entity's investment in the Partnership to permit the
Partnership to
satisfy the 100-partner limitation set forth in Treasury
Regulations Section
1.7704-1(h)(1)(ii).
ARTICLE 2
Management and Operations of the Partnership
Section 2.01. Management Generally. (a) The management and control
of the
Partnership shall be vested exclusively in the General Partner. The
Limited
Partners shall have no part in the management or control of the
Partnership and
shall have no authority or right to act on behalf of the
Partnership in
connection with any matter.
(a)
The General Partner shall have the right, to the fullest extent
permitted by the Delaware Act, to delegate certain management and
administrative
responsibilities set forth in Section 2.02 to the Manager pursuant
to the
Management Agreement. The Manager shall have the authority and
right to act on
behalf of the Partnership to the extent (but only to the extent)
such authority
or right is provided for in the Management Agreement. Each Limited
Partner may
request the General Partner to deliver to it a copy of the
Management Agreement
as in effect from time to time.
Section 2.02. Authority of the General Partner. The General Partner
shall
have the power on behalf of and in the name of the Partnership, or
in its own
name or through other agents, to carry out any and all of the
objects and
purposes of the Partnership in accordance with, and subject to the
limitations
contained in, this Agreement and to perform all acts which it may,
in its
discretion, deem necessary or desirable in connection therewith,
including,
without limitation, the power to:
(a)
identify and evaluate investment opportunities for the
Partnership;
(b)
acquire, hold, manage, restructure, own, sell, transfer, convey,
assign, exchange, pledge or otherwise dispose of any investment,
asset or
instrument made or held by the Partnership;
(c)
open accounts with banks, brokerage firms or other financial
institutions, and deposit, maintain and withdraw funds in the name
of the
Partnership and draw checks or other orders for the payment of
moneys;
(d)
negotiate, approve, enter into, and take any action under, any
contract, agreement or other instrument and any amendment thereto
as the General
Partner shall determine, in its discretion, to be necessary or
desirable to
further the purposes of the Partnership, including granting or
refraining from
6
granting any waivers, consents and approvals with respect to any of
the
foregoing and any matters incident thereto;
(e)
bring and defend actions and proceedings at law or in equity and
before any governmental, administrative or other regulatory agency,
body or
commission;
(f)
employ, on behalf of the Partnership, any and all financial
advisers, underwriters, attorneys, accountants, consultants,
appraisers,
custodians of the assets of the Partnership, or other agents, on
such terms and
for such compensation as the General Partner may determine, whether
or not such
Person may be an Affiliate of the General Partner, the Manager or
Greenhill or
may also be otherwise employed by any such Affiliate, and terminate
such
employment;
(g)
make all elections, investigations, evaluations and decisions,
binding the Partnership thereby, that may, in the discretion of the
General
Partner, be necessary or desirable for the acquisition, management
or
disposition of investments by the Partnership;
(h)
enter into and perform any agency cross transaction in which the
General Partner, the Manager, Greenhill or any of their respective
Affiliates
acts as broker for both the Partnership and a party on the other
side of the
transaction;
(i)
subject to Section 2.05, arrange financings and borrowings for or
on behalf of the Partnership or any Limited Partner and secure the
same by
pledge or other lien on any Partnership assets (including without
limitation the
Partnership's right title and interest in and to the Available
Capital
Commitments), on such terms as the General Partner shall determine
in its
discretion, to pay Partnership Expenses or to make Partnership
Investments;
(j)
incur expenses and other obligations, and make payments, on behalf
of the Partnership in its own name or in the name of the
Partnership, including
payment of expenses and other obligations with respect to the
services referred
to in clauses (f) and (h) of this Section 2.02;
(k)
subject to Section 2.05, lend funds to the Partnership or any
Limited Partner;
(l)
establish reserves in accordance with this Agreement for
contingencies and for any other Partnership purpose;
(m)
make distributions to the Limited Partners in cash or otherwise in
accordance with the provisions of this Agreement;
(n)
prepare and cause to be prepared reports, statements and other
information for distribution to the General Partner and the Limited
Partners;
7
(o)
prepare and file all necessary U.S. and, if appropriate, non-U.S.
tax returns and statements, pay all taxes, assessments and other
impositions
applicable to the assets of the Partnership, and withhold amounts
with respect
thereto from funds otherwise distributable to the General Partner
or any Limited
Partner;
(p)
maintain records and accounts of all operations and expenditures
of the Partnership;
(q)
subject to Section 8.01, determine the accounting methods and
conventions to be used in the preparation of any accounting or
financial records
of the Partnership;
(r)
convene meetings of the Limited Partners for any purpose;
(s)
effect a dissolution of the Partnership in accordance with Section
2.03 and Article 10;
(t)
form and structure Partnership Investments through Partnership
Investment Vehicles pursuant to Section 3.03;
(u)
subject to Section 3.03(b) and Article 7, cause Partners to make
Parallel Investments as Parallel Investors outside the Partnership;
(v)
enter into any hedging transaction (including without limitation
hedging for interest rate, currency and other market and investment
risks) as
the General Partner shall determine to be necessary or desirable to
further the
purposes of the Partnership; and
(w)
act for and on behalf of the Partnership in all matters incidental
to the foregoing.
Section 2.03. Other Authority. The General Partner agrees to use
its
reasonable best efforts to operate the Partnership in such a way
that (i) the
Partnership would not be an "INVESTMENT COMPANY" within the meaning
of the
Investment Company Act (except for purposes of Sections
12(d)(1)(A)(i) and
(B)(i) thereunder), (ii) none of the Partnership's assets would be
deemed to be
"PLAN ASSETS" for purposes of ERISA, (iii) the General Partner and
the Manager
would be in compliance with the Advisers Act, and (iv) each of the
Partnership,
the General Partner, the Manager, Greenhill and any Affiliate of
any such Person
would be in compliance with any other material law, regulation or
guideline
applicable to the Partnership, the General Partner, the Manager,
Greenhill or
such Affiliate. The General Partner is hereby authorized to take
any action it
has determined in good faith to be necessary or desirable in order
for (A) the
Partnership not to be in violation of the Investment Company Act,
(B) the
Partnership's assets not to be deemed to be "PLAN ASSETS" for
purposes of ERISA,
8
(C) the General Partner and the Manager not to be in violation of
the Advisers
Act or (D) each of the Partnership, the General Partner, the
Manager, Greenhill
or any Affiliate of any such Person not to be in violation of any
other material
law, regulation or guideline applicable to the Partnership, the
General Partner,
the Manager, Greenhill or such Affiliate, including (1) subject to
clauses (i) -
(iii) of Section 13.01(a), making structural, operating or other
changes in the
Partnership by amending this Agreement or the Management Agreement
or otherwise,
(2) requiring the sale in whole or in part of any Investment or
other asset, (3)
canceling or reducing the Capital Commitment or Available Capital
Commitment of
any Limited Partner, (4) requiring the sale in whole or in part of
any Limited
Partner's interest in the Partnership or otherwise causing the
withdrawal of any
Limited Partner from the Partnership or (5) dissolving the
Partnership. Subject
to Article 9 and without limiting the rights of any Limited Partner
under
Article 9, the General Partner further agrees, in connection with
the exercise
of its discretion, to use its reasonable best efforts to utilize
available
liquid assets of the Partnership to satisfy Indemnification
Obligations before
requiring a Partner to make a repayment of any distribution
pursuant to Section
9.03(a). Any action taken by the General Partner pursuant to this
Section 2.03
shall not require the approval of any Limited Partner.
Section 2.04. Management Fee. (a) In consideration for the
management
services rendered pursuant to the Management Agreement, in respect
of each
semi-annual period until the final liquidating distribution
pursuant to Section
10.04, the Partnership shall pay to the Manager a management fee (a
"MANAGEMENT
FEE") payable semi-annually in an amount equal to the aggregate
amount payable
by all Limited Partners for such semi-annual period pursuant to
Section 2.04(b).
(a)
Subject to Sections 2.12(b) and 4.02(a)(i), the Management Fee
payable in respect of any semi-annual period by each Limited
Partner shall be an
amount derived as follows: (i) if the date of calculation of the
Management Fee
(the "FEE CALCULATION DATE") occurs during the Investment Period,
multiplying
the amount of such Limited Partner's Capital Commitment on such Fee
Calculation
Date by 1.25% (2.5% per annum) and (ii) if the Fee Calculation Date
occurs after
the Investment Period, multiplying such Limited Partner's Invested
Capital with
respect to all Investments on such Fee Calculation Date by 0.75%
(1.5% per
annum); provided that the rate applicable under clause (ii) shall
be effective
immediately on the date following the termination of the Investment
Period and
the Management Fee will be adjusted accordingly. The Management Fee
will be
payable from the first Closing Date.
(b)
In respect of each semi-annual period during the term of the
Partnership, each Limited Partner shall pay the aggregate
Management Fee payable
by it for such semi-annual period, pursuant to Section 2.04(b), to
the
Partnership in immediately available funds in U.S. dollars not
later than the
fifth
9
Business Day after receipt of a notice from the General Partner
advising such
Limited Partner of the amount due and setting forth how such amount
was
calculated. The failure of any Limited Partner to make all or a
portion of any
such required payment shall be a Default pursuant to Section
5.04(a); provided
that any interest accrued on the corresponding Default Amount (as
determined in
the manner set forth in Section 5.04(a)) shall be payable to the
Manager. The
General Partner shall have discretion to satisfy the portion of the
Management
Fees due and payable by any Limited Partner under this Section 2.04
from Capital
Contributions made by such Limited Partner or from Proceeds or any
other funds
or other assets of the Partnership that are distributable to such
Limited
Partner pursuant to the terms of this Agreement. In addition, the
General
Partner shall be free to exercise any remedies available to the
Partnership, and
the Manager shall be free to exercise any remedies available to it,
to enforce
the obligation of such Limited Partner to make such payment.
Section 2.05. Borrowings by the Partnership. The General Partner
shall
have the right, in its sole discretion, to cause the Partnership to
borrow money
from, or guarantee the indebtedness of, any Person (including the
General
Partner or any Affiliate of the General Partner) in connection with
any
Investment or for short-term cash management purposes in connection
with the
activities of the Partnership, including for the acquisition of
Investments on a
short-term basis (not to exceed 6 months) pending drawdown of
Capital
Commitments (provided that the aggregate amount of such borrowings
and
guarantees (excluding any Non-Recourse Financings) shall not exceed
the lesser
of (x) 20% of the aggregate Capital Commitments and (y) the
aggregate Available
Capital Commitments). On a separate and distinct basis, the General
Partner may
cause the Partnership to borrow money in connection with any
Investment or
Investments relating to a Portfolio Company; provided that (x) the
recourse for
such borrowing is limited solely to the securities or other assets
owned by the
Partnership in connection with such Investment or Investments and a
guarantee or
indemnity by the Partnership for any losses attributable to fraud,
willful
misconduct, gross negligence or breach of the Partnership's
covenants or
representations as the owner, pledgor or assignor of any direct or
indirect
interest in such securities or other assets and (y) the proceeds of
any such
limited recourse borrowing are distributed promptly to the Partners
(any such
borrowings, "NON-RECOURSE FINANCINGS"). The Partners hereby
expressly
acknowledge and confirm that, in connection with any indebtedness
of the
Partnership (including any guarantees by the Partnership) permitted
by this
Agreement (i) all or any of such indebtedness may be secured by
assets of the
Partnership, including, without limitation, the Capital
Commitments, and (ii)
the Partnership, and the General Partner, in its own name or on
behalf of the
Partnership, may assign or pledge all or any part of the General
Partner's
interests in the Partnership, and the rights to (w) issue any
notices for calls
of capital, (x) receive capital contributions, (y) designate a
Limited Partner
as a defaulting Limited Partner and (z) exercise the penalties and
remedies
against a defaulting Limited Partner, directly to any lender of
such
10
indebtedness. All rights granted to a lender pursuant to this
section shall
apply to its agents, successors and assigns. Any pledge or
assignment by the
General Partner of its interest in the Partnership pursuant to this
ERROR!
REFERENCE SOURCE NOT FOUND. shall not be restricted by Section
11.01.
Section 2.06. Other Activities. (a) Each Investor (i) represents
and
warrants that such Investor has carefully reviewed and understood
the
information contained in the Confidential Offering Memorandum, and
(ii)
acknowledges and agrees that the General Partner, the Manager,
Greenhill or any
of their respective Affiliates may engage, without liability to the
Partnership
or the Limited Partners except as provided in Section 9.01(a), in
any and all of
the activities of the type or character described or contemplated
in this
Section 2.06 and in the Confidential Offering Memorandum under the
caption
"INVESTMENT CONSIDERATIONS - OTHER FEES", "INVESTMENT
CONSIDERATIONS - OTHER
ACTIVITIES" and "INVESTMENT CONSIDERATIONS - POTENTIAL CONFLICTS OF
INTEREST" or
elsewhere therein, whether or not such activities have or could
have an effect
on the Partnership's affairs (or, if applicable, on any Parallel
Investor's
affairs) or on any Investment, and that no such activity will in
and of itself
constitute a breach of any duty owed by any Indemnified Person to
the Limited
Partners or the Partnership. Without limiting the generality of any
of the
foregoing, the General Partner and each Investor acknowledge and
agree that:
(A)
although the General Partner intends generally to
identify appropriate investment opportunities for the Partnership
(and, if applicable, for any Parallel Investor), none of the
General Partner, Greenhill or any of their respective Affiliates
shall have any obligation under this Agreement, except as (and
only to the extent) provided in Section 3.05, to offer to the
Partnership or any Investor any particular investment opportunity;
(B)
(1) the General Partner, the Manager, Greenhill
and any of their respective Affiliates, and any officer or
employee of any such Person shall be required to devote only such
time to the affairs of the Partnership, any Partnership Investment
Vehicle, any Parallel Investment Vehicle and any Parallel
Investment as they shall determine in their reasonable discretion
may be necessary or appropriate to manage and operate the
Partnership, any Partnership Investment Vehicle, any Parallel
Investment Vehicle and any Parallel Investment, and each such
Person, to the extent not otherwise directed by the General
Partner (but subject to the other provisions of this Agreement),
shall be free to serve and may be compensated by any other Person
or enterprise in any capacity (including serving the Partnership
in any capacity other than as a general partner or as an
investment advisor or otherwise) that it may deem appropriate in
its discretion; (2) the General
11
Partner may arrange for such of its (or its Affiliates') employees
as it deems appropriate, in consideration for their providing
services to or for the benefit of the Partnership, to participate
in allocations of carried interest to the General Partner (and
distributions of any such carried interest) by directly or
indirectly becoming limited partners of the General Partner or
otherwise; and (3) the General Partner may enter into incentive
arrangements with Persons not associated with the General Partner
or Greenhill as it deems appropriate in consideration of their
providing services in connection with sourcing of Investments,
including the making of payments to such Persons by the General
Partner based on the carried interest proceeds realized from such
Investments to compensate such Persons upon realization of such
Investments; and
(C)
in addition to the transactions specifically
contemplated by this Agreement, Greenhill and any of its
Affiliates shall have the right to perform services for, and to
receive compensation from, the Partnership, any Partner
(including, if applicable, as a Parallel Investor), any
Partnership Investment Vehicle, any Parallel Investment Vehicle,
any Related Fund, any Portfolio Company or Related Person (whether
before or after or in connection with the making of the applicable
Investment). Subject to Section 2.06(a)(ii)(D), such compensation
may include, without limitation, investment banking or advisory
fees, fees in connection with restructurings and mergers and
acquisitions, and underwriting or placement fees. In addition,
Greenhill, each such Affiliate and any officer or employee of any
such Person shall have the right to purchase property (including
securities) from, to sell property (including securities) or lend
funds to, or otherwise to deal with, the Partnership, any Partner
(including, if applicable, as a Parallel Investor), any
Partnership Investment Vehicle, any Parallel Investment Vehicle,
any Related Fund, any Portfolio Company or any Related Person
(whether before or after or in connection with the making of the
applicable Investment); provided that any such dealing (other than
those specifically contemplated by this Agreement) is reasonably
determined by the General Partner to be on arms-length terms and
is not otherwise in violation of this Agreement; and provided
further that each Limited Partner hereby consents to the
contribution of Pre-Closing Investments by the General Partner to
the Partnership. Each Investor further acknowledges and agrees
that the performance of such services, the purchase or sale of
such property, the lending of such funds, other dealings, or the
receipt of such compensation may give rise to conflicts of
interest
12
between the Partnership and the Investors (including, if
applicable, as Parallel Investors), on the one hand, and
Greenhill, such Affiliate, or such officer or employee, on the
other hand, and that, except as specifically provided otherwise in
this Agreement, any such compensation will not be shared with the
Partnership or any Investor;
(D)
any fees or other compensation received by
Greenhill or any of its Affiliates from the Partnership, any
Partner (including, if applicable, as a Parallel Investor), any
Partnership Investment Vehicle, any Parallel Investment Vehicle,
any Related Fund, any Portfolio Company or Related Person at any
time during the period the Partnership holds an Investment in the
relevant Portfolio Company will be reasonable and will not exceed
the amount that Greenhill or such Affiliates would customarily
receive from third parties as fees or other compensation at such
time for the performance of similar services in an arm's-length
transaction; provided that the limitations set forth in this
sentence shall be deemed to be satisfied with respect to the terms
specifically contained in this Agreement; and
(E)
Greenhill, the General Partner and their
respective Affiliates shall not lend money to the Partnership on
other than arm's-length terms.
(b)
Nothing contained in this Agreement shall be deemed to limit in
any respect the ability of any Investor (or Affiliate thereof), in
its
individual capacity, from making investments in, or otherwise
engaging in
business with, any Portfolio Company or in any Person in which
Investments are
proposed to be made or in any Affiliate of any such Person or from
providing
financing thereto, in addition to such Investor's Capital
Contributions, if any,
pursuant to this Agreement.
Section 2.07. Books and Records; Accounting Method; Fiscal Year.
(a) The
General Partner shall keep or cause to be kept at the address of
the General
Partner (or at such other place as the General Partner shall advise
the other
Partners in writing) full and accurate books and records of the
Partnership.
Each Limited Partner shall be shown as a limited partner of the
Partnership on
such books and records. Subject to Section 2.09(b), such books and
records shall
be available, upon 10 Business Days' notice to the General Partner,
for
inspection at the offices of the General Partner (or such other
location
designated by the General Partner, in its discretion) at reasonable
times during
business hours on any Business Day by each Limited Partner or its
duly
authorized agents or representatives for a purpose reasonably
related to such
Limited Partner's interest in the Partnership. Each Limited Partner
agrees that
(i) such books and records contain confidential information
relating to the
Partnership and its affairs, and (ii)
13
the General Partner shall have the right to prohibit or otherwise
limit, in its
reasonable discretion, the making of any copies of such books and
records.
(a)
Except as otherwise provided in this Agreement, the Partnership's
books of account shall be kept on the same basis followed by the
Partnership for
U.S. federal income tax purposes.
(b)
Unless otherwise required by law, the fiscal year of the
Partnership for financial statement and U.S. federal income tax
purposes shall
end on December 31st.
Section 2.08. Certain Tax Matters. (a) The General Partner shall
cause to
be prepared and timely filed all U.S. and, if appropriate, non-U.S.
tax returns
required to be filed for the Partnership. Subject to Section 13.14,
the General
Partner may, in its discretion, make, or refrain from making, any
income or
other tax elections for the Partnership that it deems necessary or
advisable,
including an election pursuant to Section 754 of the Code; provided
that neither
the General Partner nor any other Person shall make an election or
take any
other action that would cause the Partnership to be treated as a
corporation, an
association taxable as a corporation for U.S. income tax purposes
or an
"ELECTING LARGE PARTNERSHIP" under Section 775 of the Code. Each
Limited Partner
shall be responsible for preparing and filing all tax returns
required to be
filed by such Limited Partner.
(a)
The General Partner is hereby designated as the Partnership's "TAX
MATTERS PARTNER" under Section 6231(a)(7) of the Code. The General
Partner is
specifically directed and authorized to take whatever steps the
General Partner,
in its discretion, deems necessary or desirable to perfect such
designation,
including filing any forms or documents with the Internal Revenue
Service and
taking such other action as may from time to time be required under
Treasury
regulations. Expenses of any administrative proceedings undertaken
by the Tax
Matters Partner shall be Partnership Expenses. Each Limited Partner
who elects
to participate in such proceedings shall be responsible for any
expenses
incurred by such Limited Partner in connection with such
participation. The cost
of any resulting audits or adjustments of a Limited Partner's tax
return shall
be borne solely by the affected Limited Partner.
(b)
Each Limited Partner shall notify the General Partner in a timely
manner of its intention to: (i) file a notice of inconsistent
treatment under
Section 6222(b) of the Code; (ii) file a request for administrative
adjustment
of Partnership items; (iii) file a petition with respect to any
Partnership item
or other tax matters involving the Partnership; or (iv) enter into
a settlement
agreement with the Secretary of the Treasury with respect to any
Partnership
items. Upon any such notification, the General Partner may, if it
agrees with
such Limited Partner's position, elect (at its discretion) to make
such filing
or enter into such agreement, as applicable and practicable, on
behalf of the
Partnership. The cost
14
of any resulting audits or adjustments of a Limited Partner's tax
return shall
be borne solely by the affected Limited Partner.
(c)
The General Partner may, in its discretion, take appropriate steps
on behalf of the Partnership that it deems necessary or advisable
to comply with
the tax laws of non-U.S. jurisdictions.
(d)
The General Partner shall use reasonable efforts to operate the
Partnership in a manner that it believes, based on the advice of
qualified
counsel, does not cause any Limited Partner, by reason of its
investment in the
Partnership, to become subject to net income tax in any foreign
jurisdiction
with respect to income from sources other than the Partnership
within that
jurisdiction.
Section 2.09. Confidentiality. (a) Each Investor agrees to keep
confidential, and not to make any use of (other than for purposes
reasonably
related to its interest in the Partnership or any Parallel
Investment or for
purposes of filing such Investor's tax returns or for other routine
matters
required by law) nor to disclose to any Person, any information or
matter
relating to the Partnership and its affairs, including the
identities of the
other Investors, all offering materials used in connection with the
marketing
and private placement of limited partner interests in the
Partnership
(including, without limitation, the Confidential Offering
Memorandum, this
Agreement and the related subscription booklet), and any
information or matter
related to any Investment (other than disclosure to such Investor's
employees,
agents, accountants, advisors (including financial advisors),
custodians,
trustees or representatives responsible for matters relating to the
Partnership
(each such Person being hereinafter referred to as an "AUTHORIZED
REPRESENTATIVE")); provided that such Investor and its Authorized
Representatives may make such disclosure to the extent that (i) the
information
being disclosed is publicly known at the time of proposed
disclosure by such
Investor or Authorized Representative, (ii) the information
otherwise is or
becomes legally known to such Investor other than through
disclosure by the
Partnership, the General Partner, the Manager, Greenhill or any of
their
respective Affiliates, (iii) such disclosure, in a written opinion
of legal
counsel (including internal counsel) reasonably acceptable to the
General
Partner, is required by law or regulation, (iv) such disclosure is
required to
be made to any regulatory authority or self-regulatory organization
having
jurisdiction over such Investor, (v) such disclosure is made to the
immediate
parent company of such Investor which parent company has agreed to
be bound by
the obligations set forth in this Section 2.09(a) in an agreement
naming the
General Partner as a third-party beneficiary of such agreement
which may not be
amended without the consent of the General Partner, (vi) such
disclosure is
required in connection with the enforcement of any legal rights
under this
Agreement, or (vii) such disclosure is approved in advance by the
General
Partner. Prior to any disclosure to any Authorized Representative,
each Investor
shall advise such Authorized
15
Representative of the obligations set forth in this Section 2.09(a)
and obtain
the agreement of such Person to be bound by the terms of such
obligations.
(a)
The General Partner may, to the maximum extent permitted by
applicable law, keep confidential from any Investor any information
(including
information requested by such Investor pursuant to Section 2.07,
but excluding
any information required to be furnished in a Drawdown Notice
pursuant to
Section 5.02(b) or 5.02(c) and excluding any information required
to be
furnished pursuant to Section 8.01) the disclosure of which (i) the
Partnership,
the General Partner, the Manager, Greenhill or any of their
respective
Affiliates is required by law, agreement, or otherwise to keep
confidential, or
(ii) the General Partner reasonably believes may have an adverse
effect on (A)
the ability to entertain, negotiate or consummate any proposed
Investment or any
transaction directly or indirectly related to, or giving rise to,
such
Investment, (B) the Partnership, any Partnership Investment
Vehicle, any
Parallel Investment Vehicle, any Parallel Investor or any Related
Fund or (C)
any Portfolio Company with respect to any Investment or proposed
Investment.
Without limiting the effect of the foregoing, the General Partner
may, to the
maximum extent permitted by applicable law and until such time as
the General
Partner may determine in its sole and absolute discretion, exclude
valuations of
one or more Investments or Portfolio Companies or other information
relating to
the Portfolio Companies from any report, statement or other
document referred to
in Section 8.01 delivered to any Investor that (i) is subject to
any "freedom of
information", "sunshine" or other law, rule or regulation that
imposes upon such
Investor an obligation to make certain information available to the
public, (ii)
has committed a Default, or (iii) has breached or threatened to
breach any
obligations under this Agreement, including but not limited to the
confidentiality obligations of this Section 2.09. It is understood
that the
General Partner may elect to exercise its right to withhold
information pursuant
to this Section 2.09(b) on an Investor by Investor basis.
(b)
With respect to each Investor that is subject to, or believes that
it is subject to, any "freedom of information," "sunshine" or other
law, rule or
regulation that imposes upon such Investor an obligation to make
certain
information available to the public, the Partnership hereby
requests
confidential treatment, to the maximum extent permitted under such
law, rule or
regulation, of all information described as confidential in this
Section 2.09.
An Investor shall not release any such information pursuant to any
such law,
rule or regulation without, to the maximum extent permitted by
applicable law,
first giving the General Partner at least 30 days notice and
providing the
General Partner with its reasonable cooperation in contesting,
eliminating or
otherwise mitigating the obligation to make such release.
(c)
Notwithstanding any other provision of this Agreement, any Partner
(and each of its employees, representatives or other agents) may
disclose to any
and all persons, without limitation of any kind, all tax strategies
and the tax
16
treatment and tax structure of the Partnership and the
Partnership's investments
and all materials of any kind (including opinions or other tax
analyses) that
are provided to such Partner relating to such tax treatment or tax
structure;
provided that the foregoing does not constitute an authorization to
disclose
information identifying the Partnership, the Partners or any
parties to
transactions engaged in by the Partnership or (except to the extent
relating to
such tax strategies, tax structure or tax treatment) any nonpublic
commercial or
financial information.
Section 2.10. Annual Meeting. (a) The General Partner shall call a
meeting
of the Limited Partners at least once annually by giving notice of
such meeting
to each Limited Partner not less than 30 nor more than 60 days
prior to such
meeting. Such notice shall specify the time and place of such
meeting and the
number of Authorized Representatives of a Limited Partner who may
attend.
(a)
Any Limited Partner not in attendance at a meeting of the Limited
Partners shall be entitled to receive, upon request to the General
Partner, a
copy of any printed materials distributed to Limited Partners in
attendance at
such meeting.
Section 2.11. Reliance by Third Parties. Persons dealing with the
Partnership are entitled to rely conclusively upon the power and
authority of
the General Partner and the Manager as set forth in this Agreement
and the
Management Agreement.
Section 2.12. Transaction Fees. (a) The Partners agree that, in
connection
with any Investment or proposed Investment, (i) any Transaction
Fees or any
other fees that are received by the General Partner, the Manager,
Greenhill or
any of their respective employees or Affiliates shall be retained
by the General
Partner, the Manager, Greenhill or such employee or Affiliate, as
the case may
be, and (ii) any Transaction Fees received by the Partnership shall
be allocated
and distributed to the General Partner pursuant to Section 6.03.
(a)
If the General Partner, the Manager, Greenhill or any of their
respective employees or Affiliates or the Partnership receives any
Transaction
Fees, 80% of the Partnership's proportionate share of the amount of
any such
Transaction Fees shall be credited ratably to reduce the Management
Fees for the
semi-annual period immediately following the semi-annual period in
which such
Transaction Fees were received and, to the extent necessary, for
subsequent
periods; provided that (i) in lieu of such Management Fee offset,
the General
Partner or the Manager may, with respect to any non-cash
Transaction Fees, cause
to be delivered to the Partnership its proportionate share of 80%
of the assets
or property constituting such Transaction Fees (and such assets
will be
allocated to the Limited Partners in accordance with their
respective Capital
Commitments) and (ii) if Management Fees would not be sufficient to
offset
Transaction Fees as provided above, the General Partner will offer
an
alternative method of compensation to the Limited Partners. If the
Partnership's
obligation to pay
17
Management Fees is being reduced pursuant to this Section 2.12(b),
the General
Partner shall advise the Limited Partners to such effect in the
notice delivered
by the General Partner to the Limited Partners pursuant to Section
2.04(c). The
General Partner, the Manager, Greenhill and their respective
Affiliates will be
entitled to retain 20% of the amount of any such Transaction Fees
without
offset. Notwithstanding the foregoing, if the General Partner
receives any
break-up fees, such fees shall first be used to offset any
Partnership Expenses
attributable to broken-deal expenses in connection with the
transactions to
which such break-up fees are attributable.
(b)
Neither the Partnership nor the Investors shall be entitled to
share directly or indirectly in any compensation received by the
General
Partner, Greenhill or any of their respective employees or
Affiliates from any
Person, other than as provided in Section 2.12(b).
Section 2.13. Temporary Investment of Funds. Subject to a
determination by
the General Partner in its discretion as to the amount of cash
required in
connection with the conduct of the Partnership's business, the
General Partner
shall invest all cash held by the Partnership in the following
interest bearing
instruments or accounts ("TEMPORARY INVESTMENTS"): (i) debt
instruments issued
or guaranteed by the United States or its agencies or
instrumentalities, (ii)
commercial paper rated "A-1" by Standard & Poor's Rating Group
or "P-1" by
Moody's Investors Services, Inc., (iii) interest-bearing deposits
in commercial
banks, savings and loan associations, brokerage firms or other
financial
institutions with a total capital and surplus of at least $250
million, (iv)
bankers' acceptances or overnight time deposits (whether or not
insured), (v)
money market funds with assets of at least $100 million, (vi)
similar quality
short-term investments selected by the General Partner or (vii)
repurchase
agreements covering any of the foregoing investments. Cash held by
the
Partnership includes all amounts being held by the Partnership for
future
investment in Partnership Investments, payment of Partnership
Expenses or
distribution to the Partners.
Section 2.14. Certain FCC Matters. (a) In addition to and not in
derogation of other limitations in this Agreement on the powers and
activities
of the Limited Partners, at any time when the Partnership has an
"ATTRIBUTABLE
OWNERSHIP INTEREST" within the meaning of the rules and regulations
of the
Federal Communications Commission (the "FCC"), no Limited Partner
(and if such
Limited Partner is not an individual, no officer, director, partner
or
equivalent non-corporate official of such Limited Partner) shall:
(i)
act as an employee of the Partnership if such Limited
Partner's functions directly or indirectly relate to any
media-related
activities of the Partnership or any Portfolio Company;
18
(ii)
serve, in any material capacity, as an independent
contractor or agent with respect to any media-related activities of
the
Partnership or any Portfolio Company;
(iii)
communicate with the General Partner on matters pertaining
to the day-to-day media-related activities of the Partnership or
any
Portfolio Company;
(iv)
perform any services for the Partnership materially
relating to media-related activities of the Partnership;
(v)
subject to Section 10.02, vote to admit any additional or
replacement General Partner to the Partnership unless such
additional or
replacement General Partner has been approved by each General
Partner then
existing;
(vi)
vote on the removal of a General Partner, unless the
General Partner is subject to bankruptcy proceedings, is
adjudicated
incompetent by a court of competent jurisdiction or is found by a
neutral
arbiter to have engaged in malfeasance, criminal conduct or wanton
or
willful neglect; or
(vii)
become actively involved in the management or operation of
any media-related activities of the Partnership or any Portfolio
Company.
(b)
The General Partner may amend this Section 2.14 at any time
without the approval of any Limited Partner to reflect changes in
the rules and
regulations of the FCC with respect to the insulation of limited
partners of a
partnership under the rules and regulations of the FCC with respect
to
"ATTRIBUTABLE OWNERSHIP INTERESTS."
(c)
If the Partnership makes any Investment in any entity licensed or
regulated by the FCC (an "FCC REGULATED ENTITY"), the General
Partner shall
obtain an opinion of counsel on the closing date of such Investment
substantially to the effect that under the rules, regulations and
policies of
the FCC, such FCC Regulated Entity will not be attributed to such
Limited
Partner by virtue of its status as a Limited Partner.
ARTICLE 3
Investments
Section 3.01. Partnership Investments Generally. The assets of the
Partnership shall, to the extent not required for the payment of
Partnership
Expenses or otherwise necessary for the conduct of the
Partnership's business
(as
19
determined by the General Partner in its discretion), and subject
to Sections
2.13, 3.02 and Article 6, be invested in such Partnership
Investments and
Temporary Investments as the General Partner shall determine in
accordance with
the terms of this Agreement.
Section 3.02. Investment Limitations. (a) Neither the Partnership
nor, if
applicable, any Parallel Investor shall make an Investment at any
time in any
Person or group of Affiliated Persons to the extent that, after
giving effect to
such Investment, more than 15% of the aggregate Capital Commitments
at such time
would be invested by the Partnership and the Parallel Investors,
collectively,
in such Investment and in all other Investments outstanding at such
time made in
such Person or group, excluding any related Interim Financing.
(a)
At any time, no more than 10% of the aggregate Capital Commitments
at such time shall be invested by the Partnership and any Parallel
Investors,
collectively, in Interim Financings outstanding at such time that
relate to any
single Portfolio Company.
(b)
If all or any portion of any Investment is subject to any
Disposition, any determination pursuant to Section 3.02(a) or
3.02(b) made after
the date of such Disposition shall be calculated after giving
effect to such
Disposition.
Section 3.03. Structuring of Investments Generally; Certain Rules
Governing Investments. (a) General Rule for Structuring
Investments. Any
investment opportunity covered by this Agreement may involve
investing in one or
more classes or series of securities of a Portfolio Company. Except
as expressly
provided otherwise in this Agreement, any Investment under this
Agreement in one
class or series of securities of a Portfolio Company pursuant to
any investment
opportunity shall be made by the Partnership directly or through a
single
Partnership Investment Vehicle (and may be restructured at any time
through a
Partnership Investment Vehicle), and all Partners shall participate
in such
Investment on the same terms and shall make Capital Contributions
in respect of
such Investment in accordance with Section 5.02.
(a)
Exceptions to the General Rule for Structuring Investments.
Notwithstanding Section 3.03(a), but only to the extent necessary
or desirable
to address accounting, tax or regulatory considerations applicable
to, or
arising in connection with, any Investment,
(i)
the General Partner may, in its discretion, structure such
Investment in one class or series of securities of a Portfolio
Company
pursuant to a single investment opportunity:
(A)
in part as a Partnership Investment, and
20
(B)
subject to Section 3.03(d) and in accordance with
and subject to the provisions of Article 7, in part as a Parallel
Investment by structuring the investment to be made by the General
Partner and/or any Investor (other than any ERISA Partner),
individually or together with other Parallel Investors, as an
investment outside the Partnership (directly by such Investor
and/or indirectly by the General Partner and such Investor through
one or more Parallel Investment Vehicles); and
(ii)
if such Investment is structured in whole or in part as a
Partnership Investment, such Partnership Investment may be made in
whole
or in any part as an investment directly by the Partnership and/or
through
one or more Partnership Investment Vehicles (and may be
restructured at
any time through one or more Partnership Investment Vehicles). With
respect to any Investment made through a Partnership Investment
Vehicle,
the General Partner may, in its discretion, structure such
Investment so
that the General Partner is entitled to receive its Carried
Interest, if
any, arising from such Investment as a distribution from such
Partnership
Investment Vehicle (instead of as a distribution from the
Partnership). In
such event, such distribution shall be made in accordance with
provisions
applicable to such Partnership Investment Vehicle that are
substantially
identical to those contained in Article 6 (including Section 6.02),
which
provisions shall apply in lieu of Section 6.02 of this Agreement;
provided
that in no event shall the General Partner receive under this
Agreement
and the provisions applicable to any Partnership Investment Vehicle
more
than the General Partner would have received under this Agreement
if all
Investments were made directly by the Partnership and not by any
Partnership Investment Vehicle.
If investments in such class or series pursuant to such investment
opportunity are made pursuant to the foregoing provisions of this
Section
3.03(b) as separate Investment Portions, each Investment Portion
shall be funded
by Capital Contributions made by, and gains, losses, certain
Investment Expenses
and other items with respect to such Investment Portion shall be
distributed and
allocated to, the Participating Investors in such Investment
Portion in
accordance with the provisions of this Agreement. The Investors
acknowledge and
agree that (x) the General Partner shall make all determinations
with respect to
structuring Investments pursuant to the foregoing provisions of
this Section
3.03(b) in its discretion, (y) the General Partner shall in no
event be
obligated to structure any Investment in order to address or give
effect to the
individual objectives or considerations of any Investor or group of
Investors,
and (z) the General Partner shall have no liability to the
Partnership or any
Investor arising from any such determination or from structuring
any Investment
in any particular manner except for any liability resulting from
the General
Partner's gross negligence or willful misconduct; provided that the
General
Partner shall have no liability to any
21
Investor arising solely from its determination to structure an
Investment
pursuant to Section 3.03(a) rather than pursuant to this Section
3.03(b).
(b)
Investment Size of Each Investor in Different Investment Portions.
With respect to each class or series of securities of a Portfolio
Company in
which an Investment is made pursuant to Section 3.03(b),
(i)
it is understood that each Investor shall be required to
make a Capital Contribution in respect of such Investment in such
class or
series in an amount determined in accordance with Section 5.02;
(ii)
if such Investment in such class or series is structured
to consist of separate Investment Portions and the General Partner
causes
different groups of Investors to be Participating Investors in
different
Investment Portions, (A) no Investor shall be a Participating
Investor in
more than one Investment Portion with respect to the same
Investment, and
(B) any Investor that makes an aggregate Capital Contribution in
accordance with clause (i) of this Section 3.03(c) with respect to
one
Investment Portion shall be deemed to have an Available Capital
Commitment
equal to zero for purposes of all other Investment Portions (if
any)
comprising such Investment; and
(iii)
the General Partner shall be permitted (but shall not be
required) to make Capital Contributions in respect of one or more
Investment Portions with respect to such Investment; provided that
if the
General Partner makes an aggregate Capital Contribution in
accordance with
clause (i) of this Section 3.03(c) with respect to such Investment
Portion
or Investment Portions, the General Partner shall be deemed to have
an
Available Capital Commitment equal to zero for purposes of all
other
Investment Portions (if any) comprising such Investment.
(c) Structuring of Parallel Investments. Notwithstanding any
provision in
this Agreement to the contrary:
(i)
no Investment shall be structured in any part as a
Parallel Investment pursuant to Section 3.03(b) at any time if (A)
the
structuring or making of such Parallel Investment would have a
material
adverse effect at such time on any Limited Partner (including the
loss of
limited liability) or on any Limited Partner's interest in the
applicable
Investment and (B) such effect would be avoided at such time were
the
applicable Investment to consist entirely of a Partnership
Investment;
(ii)
no ERISA Partner shall be permitted or required to make a
Capital Contribution in respect of, or to participate in, any
Parallel
Investment;
22
(iii)
no Investor shall be permitted or required to make a
Capital Contribution in respect of, or to participate in, any
Parallel
Investment if participation by such Investor in such Parallel
Investment
would result in a violation of law by such Investor;
(iv)
in connection with a single investment opportunity, no
Investor shall be permitted or required to make a Capital
Contribution
with respect to, or to participate in, both a Partnership
Investment and a
Parallel Investment in respect of the same class or series of
securities
of a Portfolio Company (provided that the General Partner shall be
permitted (but shall not be required) to make a Capital
Contribution with
respect to, and to participate in, both a Partnership Investment
and a
Parallel Investment with respect to the same Investment); and
(v)
no Investor shall be permitted or required to make a
Capital Contribution with respect to, or to participate in, any
proposed
Parallel Investment pursuant to a single investment opportunity
unless a
Partnership Investment also has been, or concurrently will be, made
pursuant to such investment opportunity in securities of the same
class or
series as those comprising such proposed Parallel Investment.
(d)
Certain Rules Regarding Investments and Investment Portions. For
purposes of this Agreement:
(i)
whenever an Investment is structured as described in
Section 3.03(b), each of the following components of such
Investment shall
constitute a separate "INVESTMENT PORTION":
(A)
a direct investment by the Partnership;
(B)
each investment by the Partnership through a
separate Partnership Investment Vehicle;
(C)
each direct investment by a Parallel Investor; and
(D)
each investment (by one or more Parallel
Investors) through a separate Parallel Investment Vehicle;
(ii)
all securities of a Portfolio Company of the same class or
series that are acquired at the same price pursuant to a single
investment
opportunity under this Agreement shall be treated as a single
"INVESTMENT," regardless of whether such securities are acquired
(A) in a
single transaction or a series of related transactions, (B) in part
as a
Partnership Investment and in part as a Parallel Investment, or (C)
through one or more Investment Portions (provided that (x) the
securities
issued upon exercise, exchange or conversion of any Convertible
Securities
shall
23
constitute the same Investment as the Investment in such
Convertible
Securities and (y) a Follow-On Investment shall be treated as a
separate
Investment from the Investment (the "ORIGINAL INVESTMENT") to which
such
Follow-On Investment relates);
(iii)
all securities of a Portfolio Company of the same class or
series acquired at the same price pursuant to a single investment
opportunity (A) if acquired by the Partnership (directly and/or
indirectly
through one or more Partnership Investment Vehicles), shall be
treated as
a single Partnership Investment, and (B) if acquired by one or more
Parallel Investors (directly or indirectly through one or more
Parallel
Investment Vehicles), shall be treated as a single Parallel
Investment of
such Participating Parallel Investors;
(iv)
different classes or series of securities of a Portfolio
Company, regardless of whether such securities are acquired
pursuant to a
single investment opportunity, (A) if acquired by the Partnership,
shall
be treated as separate Partnership Investments, and (B) if acquired
by one
or more Parallel Investors, shall be treated as separate Parallel
Investments.
Section 3.04. Investment Committee. The Limited Partners
(including, if
applicable, as Parallel Investors) acknowledge, approve and agree
that (i) the
General Partner may delegate the authority to approve all
Investments and/or all
dispositions thereof to a committee (the "INVESTMENT COMMITTEE")
which is
comprised of officers or employees of the General Partner,
Greenhill or their
respective Affiliates, which officers or employees shall be
selected by the
General Partner in its sole discretion and (ii) any such approval
of an
Investment or disposition thereof by such committee shall be
conclusive and no
further action or determination by the General Partner shall be
required with
respect to such approval. The General Partner may, its sole
discretion, change
the composition of or the number of persons serving on such
committee and any
appointments made by the General Partner shall be conclusive upon
the
Partnership and all of the Limited Partners (including as Parallel
Investors).
Notwithstanding anything to the contrary contained in this
Agreement, in no
event shall a member of any such committee be considered a general
partner of
the Partnership by agreement, estoppel, as a result of the
performance of its
duties, or otherwise. The initial Investment Committee shall be
comprised of
Steven Brotman, Brian Hirsch, John Liu and Dhiren Shah.
Section 3.05. Restriction on Activities by Greenhill Entities.
Until the
termination of the Investment Period, Greenhill, the General
Partner and their
respective Affiliates may not participate in the management of any
new limited
partnership (or other pooled investment vehicle or entity) which
has investment
objectives that are substantially the same as the objectives of the
Partnership
(a "COMPETING FUND"); provided that this Section 3.05 shall not
apply to (i) any
Related Fund, including those organized after the first Closing
Date or (ii) any
24
pooled investment vehicle or entity formed to invest in
substantially similar
types of companies as are targeted by the Partnership so long as
such companies
are located primarily in regions outside the New York, Connecticut,
New Jersey
and Pennsylvania region.
Section 3.06. Related Funds. (a) The Limited Partners acknowledge
and
agree that the General Partner has established GSAV to co-invest
with the
Partnership in investment opportunities on a side-by-side basis.
(a)
GSAV New York, L.P., a limited partnership established by the
General Partner (the "NY FUND"), will co-invest with the
Partnership and GSAV in
each investment in a portfolio company that has offices or
employees located in,
or other substantial nexus to, the State of New York. The New York
State Common
Retirement Fund is the sole limited partner of, and has made a $25
million
capital commitment to, the NY Fund. The NY Fund and the GSAV shall
be referred
to herein as the "RELATED FUNDS."
(b)
In general, it is contemplated that any investment to be made by
the NY Fund, on the one hand, and GSAV (with the amount of such
investment
allocated to GSAV being further allocated among the Partnership,
the Related
Funds and any other co-investments permitted by the partnership
agreements of
the Related Funds), on the other hand, will be allocated between
the NY Fund and
GSAV based on the relative amount of their respective capital
commitments that
may be invested in such investment (subject to, among other things,
availability
of capital, other investment restrictions and the operation of
excused
investment arrangements), as determined by the respective general
partners of
GSAV and the NY Fund in their sole discretion; provided, that in no
event will
the portion of any such investment allocated to the NY Fund exceed
33% of such
total investment.
Section 3.07. Additional Investment Situations. If, in connection
with an
investment opportunity in respect of securities of a Portfolio
Company, the
Partnership (and the Parallel Investors, if any) and each Related
Fund commit to
invest in an amount of such securities, and the amount of
securities offered to
all such Persons with respect to such investment opportunity (which
amount, in
the case of the Partnership and the Parallel Investors (if any),
shall be
determined, for purposes of this Section 3.07, without reference to
Section
3.02) exceeds the amount so committed to be invested, the General
Partner may,
in its discretion, present to any other Person or Persons (who may
include any
Partner, in which case any investment by such Partner pursuant to
this Section
3.07 shall be in addition to its Capital Contributions, if any,
required under
this Agreement) the opportunity to make an investment outside the
Partnership
(which shall not constitute an Investment under this Agreement) in
all or any
portion of the amount of such securities remaining after taking
into account the
Investment, if any, by the Partnership and Parallel Investors, if
any, and the
investments, if any, by the Related Funds. Any such investment by
any other
Person shall be in an
25
amount of securities and on terms determined by the General Partner
in its
discretion and accepted by such Person desiring to make such
investment.
Any amount invested by any Investor pursuant to this Section 3.07
shall in
no way affect the Available Capital Commitment of such Investor and
any amount
so invested shall not constitute a Capital Contribution for
purposes of this
Agreement.
Section 3.08. General Principles on the Disposition of Investments.
(a)
Disposition of Securities Attributable to a Single Investment. Upon
the
Disposition of any single class or series of securities, where such
securities
are attributable to a single Investment (as determined pursuant to
Section
3.03(e)(ii)) and such securities were acquired in a series of
related
transactions, the General Partner shall select the securities for
such
Disposition pro rata from each such transaction in proportion to
the amount of
Invested Capital at such time with respect to each such
transaction. If any
single Investment is structured as more than one Investment
Portion, the General
Partner shall select securities for Disposition from each such
Investment
Portion, pro rata in proportion to the aggregate amount of Invested
Capital at
such time in each such Investment Portion, and if the securities
comprising such
Investment were acquired in a series of related transactions,
within each
Investment Portion the General Partner shall select the securities
for such
Disposition pro rata from each such transaction in proportion to
the amount of
Invested Capital in such Investment Portion at such time with
respect to each
such transaction.
(a)
Disposition of Securities Attributable to More than One
Investment. Upon the Disposition of any single class or series of
securities at
any time, where such securities are attributable to more than one
Investment,
the General Partner shall select the securities subject to such
Disposition pro
rata from each such Investment, in proportion to the aggregate
amount of
Invested Capital at such time in each such Investment. Within each
such
Investment, the General Partner shall select the securities subject
to such
Disposition in accordance with Section 3.08(a).
(b)
Actions by the General Partner. The General Partner shall take all
actions necessary or desirable, as determined by the General
Partner in its
discretion, in order to give effect for U.S. federal income tax
purposes to the
attribution of any cash or other property to particular shares (or
principal
amount) of securities as contemplated by this Section 3.08,
including giving
instructions to and receiving confirmations from appropriate
Persons evidencing
such attribution.
Section 3.09. Non-U.S. Currency Considerations. (a) At the time any
cash
is received in a currency other than U.S. dollars for payment (as
distributions
or otherwise) to the Investors in connection with any Investment,
26
(i)
subject to clause (ii) below, if such cash is to be paid
to Investors (as a distribution or otherwise) in U.S. dollars, the
General
Partner shall effect the conversion of such cash into U.S. dollars,
at the
applicable exchange rate then in effect, as soon as practicable
after such
cash is received; and
(ii)
if, pursuant to the last sentence of Section 6.05(a), such
cash is to be paid to Investors in the currency in which it is
received,
the General Partner shall determine the U.S. dollar equivalent of
such
cash, based upon the applicable exchange rate in effect on the date
such
cash is received, for purposes of Article 6.
(b)
Currency translations in connection with the valuation of non-cash
property that is to be distributed in kind shall be made in the
manner set forth
in Section 6.05(b) for purposes of Article 6.
ARTICLE 4
Expenses
Section 4.01. Definition and Payment of General Partner Expenses.
As
between the General Partner and the Partnership, the General
Partner shall be
solely responsible for and shall pay all General Partner Expenses.
As used
herein, the term "GENERAL PARTNER EXPENSES" means (i) all
compensation and
employee benefit expenses of employees of the General Partner and
the Manager
and related overhead (including rent, utilities and other similar
items)
resulting from the activities of such employees on behalf of the
Partnership or
in connection with this Agreement, (ii) all Organizational Expenses
in excess of
Partnership Organizational Expenses and (iii) all Placement Fees.
Section 4.02. Definition and Payment of Partnership Expenses. (a)
The
Partnership shall be responsible for and shall pay all Partnership
Expenses. As
used herein, the term "PARTNERSHIP EXPENSES" means all expenses or
obligations
of the Partnership or otherwise incurred by the General Partner or
the Manager
in connection with this Agreement (other than General Partner
Expenses, any
Parallel Investment Expenses and the obligation of the Partnership
to pay the
purchase price for any Partnership Investment), including:
(i)
all Partnership Organizational Expenses;
(ii)
all expenses directly attributable to any Partnership
Investment or proposed Partnership Investment that is ultimately
not made
by the Partnership, including all unreimbursed travel and other
out-of-pocket expenses incurred in connection with the identifying,
investigating, structuring, making, holding, refinancing, pledging,
sale
or other disposition or proposed refinancing, pledging, sale or
other
27
disposition of all or any portion of such Partnership Investment,
any
Partnership Investment Vehicle Expenses with respect to such
Partnership
Investment, and any Indemnification Obligation arising with respect
to
such Partnership Investment (collectively, "PARTNERSHIP INVESTMENT
EXPENSES"); and
(iii)
all other expenses of the Partnership incurred in
connection with the ongoing operation and administration of the
Partnership that are not reimbursed by a Portfolio Company
(collectively,
"PARTNERSHIP ADMINISTRATIVE EXPENSES"), including (A) the
maintenance of
the Partnership's books and records, (B) the preparation and
delivery to
the Limited Partners of checks, financial reports, and other
information
pursuant to this Agreement, (C) the holding of annual meetings of
the
Partnership, (D) expenses incurred in connection with the
dissolution and
liquidation of the Partnership, (E) any Indemnification Obligation
arising
other than with respect to any Investment, (F) the Management Fee
and (G)
the Borrowing Costs.
(b)
The parties agree that all of the following (to the extent not
constituting General Partner Expenses) constitute Partnership
Expenses, and are
some, but not necessarily all, of the types of expenses that may
constitute
Partnership Investment Expenses, Partnership Administrative
Expenses or
Partnership Organizational Expenses, depending upon the context in
which such
expenses are incurred:
(i)
expenses incurred in connection with obtaining legal, tax,
and accounting advice and the advice of other consultants and
experts on
behalf of the Partnership;
(ii)
expenses incurred in connection with the registration,
qualification, or exemption of the Partnership under any applicable
laws;
(iii)
out-of-pocket expenses incurred in connection with the
collection of amounts due to the Partnership from any Person;
(iv)
expenses incurred in connection with the preparation of
amendments to this Agreement;
(v)
subject to Section 6.05(c)(ii), any taxes imposed on the
Partnership, including any taxes imposed on the Partnership or the
General
Partner in the capacity of withholding agent with respect to a
Limited
Partner (and any interest, penalties or expenses relating to any
such
taxes), and any expenses incurred in connection with tax
proceedings that
are characterized as Partnership Expenses pursuant to Section 2.08;
28
(vi)
expenses incurred in connection with any Proceeding
involving the Partnership (including the cost of any investigation
and
preparation) and the amount of any judgment or settlement paid in
connection therewith; provided that (A) any such expenses which, if
incurred by any Indemnified Person, would not be indemnifiable
under
Article 9, shall not constitute Partnership Expenses and (B)
expenses
incurred by an Indemnified Person in connection with any litigation
brought by or on behalf of one or more Limited Partners having at
least
20% of the Overall Capital shall not constitute Partnership
Expenses and
such Indemnified Person shall not be entitled to be indemnified for
such
expenses pursuant to Article 9 until such litigation is resolved,
in which
event such expenses shall become Partnership Expenses and such
Indemnified
Person shall be indemnified as (but only to the extent) provided in
Article 9; and
(vii)
any Indemnification Obligation and any other indemnity,
contribution, or reimbursement obligations of the Partnership with
respect
to any Person, whether payable in connection with a Proceeding
involving
the Partnership or otherwise.
Section 4.03. Responsibility for Partnership Expenses Among the
Partners.
The Partners agree that, as among the Partners, responsibility for
Partnership
Expenses shall be determined as set forth in this Section 4.03 and
shall be paid
out of the funds set forth in Section 4.04 at such time after such
Partnership
Expenses arise as the General Partner determines in its discretion:
(a)
General Rule for Funding of Partnership Expenses. Except as set
forth in Section 4.03(b), any Partnership Expense shall be funded
by the
Partners pro rata in accordance with their respective Partnership
Commitment
Percentages from sources as set forth in Section 4.04.
(b)
Exceptions to the General Rule for Funding of Partnership
Expenses. Notwithstanding Section 4.03(a):
(i)
subject to clauses (ii) and (vi) below, any Partnership
Investment Expenses directly attributable to any Partnership
Investment
shall be funded by only those Partners who are Participating
Partners with
respect to such Partnership Investment (but not by any other
Partner), pro
rata in accordance with their respective Partnership Investment
Percentages with respect to such Partnership Investment; provided
that any
Indemnification Obligation directly attributable to any Investment
shall
be funded by those Investors who are Participating Investors
(including,
if applicable, as Parallel Investors) with respect to the
applicable
Investment (but not by any other Investor), pro rata in accordance
with
their respective Investment Percentages with respect to such
Investment;
29
(ii)
subject to clause (vi) below, with respect to a
Partnership Investment for which any Partnership Investment Vehicle
is
formed, the Partnership Investment Vehicle Expenses attributable to
such
Partnership Investment Vehicle shall be funded by only those
Participating
Investors who participated in such Partnership Investment through
such
Partnership Investment Vehicle (calculated on the basis of such
Participating Partners' respective Investment Percentages without
giving
effect to the Invested Capital of any Participating Investor who
did not
participate through such Partnership Investment Vehicle);
(iii)
any Partnership Investment Expense with respect to any
proposed Partnership Investment that is ultimately not made by the
Partnership shall be funded by the Partners, pro rata in accordance
with
their respective Available Commitment Percentages;
(iv)
in the event that any Limited Partner initiates any
Proceeding against the Partnership and a judgment or order not
subject to
further appeal or discretionary review is rendered in respect of
such
Proceeding in favor of the Partnership, such Limited Partner shall
be
solely liable for all costs and expenses of the Partnership
attributable
thereto;
(v)
the Partners' respective shares of Partnership Expenses
may be adjusted to reflect the share of Partnership Expenses of any
New
Commitment Partner pursuant to Section 1.07(d);
(vi)
the Management Fee shall be borne by the Partners in the
manner set forth in Section 2.04(c); and
(vii)
the General Partner may determine that any Partnership
Expense shall be funded by the Partners on a basis other than
Partnership
Commitment Percentages, Available Commitment Percentages,
Partnership
Investment Percentages or Investment Percentages, as the case may
be,
and/or by certain (but not all) Partners if the General Partner
reasonably
determines that such other basis is clearly more equitable.
Section 4.04. Sources of Funds for Funding by the Partners of
Partnership
Expenses. The Partners acknowledge that Partnership Expenses shall
be funded by
or for the account of the Partners, to the extent provided in
Section 4.03,
through any one or more of the following sources of funds of the
Partnership,
determined by the General Partner in its discretion:
(i)
Capital Contributions by the Partners in accordance with
Article 5 or Section 2.04(c);
30
(ii)
the withholding, pursuant to Section 6.05, of amounts
(whether realized through the sale of Partnership assets or
otherwise)
distributable to the Partners;
(iii)
reserves set aside pursuant to Section 6.05; or
(iv)
amounts required to be contributed by the Limited Partners
pursuant to Section 9.03 in the case of Partnership Expenses
arising from
any Indemnification Obligation.
Section 4.05. Non-Applicability of Article 4 to Parallel Investment
Expenses. The provisions of Sections 4.03 and 4.04 shall not apply,
and the
provisions of Section 7.02 shall apply, with respect to any
Parallel Investment
Expenses.
ARTICLE 5
Capital Commitments and Capital Contributions
Section 5.01. Capital Commitments. (a) Each Partner hereby agrees:
(i)
to make Capital Contributions in respect of Temporary Cash
Funds and Investments (other than Follow-On Investments) from time
to time
as hereinafter set forth in this Article 5; provided that the
applicable
Drawdown Notice with respect to any Capital Contribution by a
Partner in
respect of Temporary Cash Funds or an Investment (other than a
Follow-On
Investment) is delivered to such Partner prior to the termination
of the
Investment Period (except that such Drawdown Notice may be
delivered to
such Partner after the termination of the Investment Period if such
Drawdown Notice relates (A) to an Investment (other than a
Follow-On
Investment) that the Partnership committed to make prior to the
termination of the Investment Period or (B) to an Investment in
Convertible Securities in connection with the exercise, exchange or
conversion of such Convertible Securities); and
(ii)
to make Capital Contributions in respect of Expenses and
Follow-On Investments from time to time (whether before or after
termination of the Investment Period) as hereinafter set forth in
this
Article 5; provided that the aggregate amount of Follow-On
Investments
made at any time after the termination of the Investment Period
shall not
exceed the aggregate Available Capital Commitments of the Investors
and
any reinvestments permitted under Section 6.05(f).
Notwithstanding anything contained in this Agreement (except as
otherwise
provided in Sections 5.04(f)(ii) (with respect to Defaulting
Investors), 5.05
(with respect to excluded Limited Partners) and 10.05 (with respect
to
31
Limited Partners who have died or are deemed incompetent)), no
Partner shall be
required to make any Capital Contribution if, at the time such
Capital
Contribution is to be made, such Capital Contribution exceeds such
Partner's
then Available Capital Commitment; provided that the Partners shall
be obligated
to contribute amounts recalled for reinvestment as provided in
Section 6.05(f).
(b)
The General Partner may, in its discretion, terminate the
Investment Period at any time if:
(i)
at such time, at least 75% of the aggregate Capital
Commitments have theretofore been drawn down for Investments or
expenses
(or committed or reserved for such purposes) at such time; or
(ii)
the General Partner determines in its discretion that any
applicable law or regulation makes it necessary to terminate the
Investment Period.
(c)
The Capital Commitment of the General Partner at any time shall
not be less than 1% of the aggregate Capital Commitments.
(d)
Notwithstanding anything else in this Agreement, on or shortly
after the first Closing Date, each Partner shall pay to the
Partnership, as its
initial Capital Contribution, an amount as determined by the
General Partner in
its sole discretion (with at least three Business Days' prior
notice).
(e)
In the event that both Steven Brotman and Brian Hirsch cease to
devote substantially all of their normal working time to the
affairs of the
Manager relating to the Partnership at any time prior to the
earlier of (i) the
end of the Investment Period and (ii) the date on which at least
75% of the
aggregate Capital Commitments have been invested, reserved for
investment or for
fees or expenses or otherwise expended in accordance with the
Agreement (a "KEY
PERSON TERMINATION EVENT"), then the Limited Partners may elect to
prohibit the
Partnership from making any Investments in new Portfolio Companies
(other than
investments that the Partnership has committed to make under a
letter of intent
or binding agreement prior to such election) and terminate the
Investment Period
at any time thereafter upon the affirmative vote of Limited
Partners (other than
Defaulting Investors and Designated Affiliates) having Capital
Commitments
representing in the aggregate a majority of the aggregate Capital
Commitments of
all Limited Partners (other than Defaulting Investors and
Designated
Affiliates). The General Partner will promptly notify the Limited
Partners of
the occurrence of a Key Person Termination Event.
Section 5.02. Drawdown Procedures. (a) Generally. Each Investor
shall make
Capital Contributions in such amounts and at such times as the
General Partner
shall specify in notices ("DRAWDOWN NOTICES") delivered from time
to time to
such Investor. All Partnership Capital Contributions shall be paid
to the
32
Partnership in immediately available funds in U.S. dollars by 11:00
A.M. (New
York time) on the date specified in the applicable Drawdown Notice.
All Parallel
Capital Contributions shall be paid to the Person and the account
and at the
time specified in the applicable Drawdown Notice (it being
understood that
payment of Parallel Capital Contributions shall not constitute cash
contributions to the Partnership and shall not be paid to any
account of the
Partnership). Partnership Capital Contributions may include amounts
that the
General Partner determines, in its discretion, are necessary or
desirable for
Temporary Cash Funds or to establish reserves in respect of
Partnership
Investments or Partnership Expenses. Parallel Capital Contributions
may include
amounts that the General Partner determines, in its discretion, are
necessary or
desirable to establish reserves in respect of Parallel Investments
or Parallel
Investment Expenses.
The General Partner shall make Capital Contributions in such
amounts as
hereinafter set forth in this Article 5 and at the same times and
in the same
manner as the Investors who are required to make related Capital
Contributions.
(a)
Regular Drawdowns.
(i)
Drawdown Notices. Except as otherwise provided in Section
5.02(c), each Drawdown Notice for a Drawdown shall specify, to the
extent
known at the time such Drawdown Notice is delivered:
(A)
the manner in which, and the expected date on
which, such Drawdown is to be applied;
(B)
if all or any portion of such Drawdown is to be
applied to make one or more Investments, with respect to each
proposed Investment, (w) a general description of the business of
the Person that is, directly or indirectly, the subject of such
proposed Investment, (x) the Investment Drawdown Amount in respect
of such Investment, (y) whether such proposed Investment is in
equity securities or equity-related securities (including
preferred equity, convertible debt or similar securities) or debt
securities, and (z) whether the Capital Contribution of such
Investor in respect of such Investment is to be applied in respect
of a Partnership Investment (and if so, whether directly or
through a Partnership Investment Vehicle) or a Parallel Investment
(and if so, whether directly or through a Parallel Investment
Vehicle) or if all or any portion of such Drawdown is to be held
as Temporary Cash Funds, the Investment Drawdown Amount related
thereto;
(C)
if all or any portion of such Drawdown is to be
applied in respect of any Expenses, the Expenses Drawdown Amount;
33
(D)
the required Capital Contribution to be made by
such Investor (which shall be equal to the sum of such Investor's
share (determined pursuant to Section 5.02(b)(ii)) of each
Investment Drawdown Amount or Temporary Cash Funds and such
Investor's share (determined pursuant to Section 5.02(b)(iii)) of
the Expenses Drawdown Amount;
(E)
the date (the "DRAWDOWN DATE") on which such
Capital Contribution is due, which will be at least 10 calendar
days from and including the date of delivery of the Drawdown
Notice; and
(F)
the Person and the account to which such Capital
Contribution shall be paid.
(ii)
Amount of Required Capital Contribution in Respect of
Investments.
(A)
Subject to Sections 3.03(c) and 5.04, with respect
to each Investment covered by any Drawdown and with respect to any
Temporary Cash Funds, the General Partner and each Investor shall
be required to make a Capital Contribution equal to the product of
(x) such Person's Available Commitment Percentage multiplied by
(y) the Investment Drawdown Amount in respect of such Investment
or Temporary Cash Funds. The General Partner may in its discretion
utilize the previous Capital Contributions in respect of Temporary
Cash Funds of each Partner (other than an Excused Investor) to
satisfy all or a portion of the Investment Drawdown Amount payable
in connection with an Investment (or Partnership Expenses related
thereto).
(B)
With respect to any amount to be paid in
connection with the exercise, conversion or exchange of any
Convertible Securities, each Participating Investor in the
Investment represented by such Convertible Securities shall be
required to make a Capital Contribution equal to the product of
(x) such amount required to be paid multiplied by (y) such
Participating Investor's Investment Percentage in respect of such
Investment.
(C)
Subject to Sections 3.03(c) and 5.03, with respect
to each Follow-On Investment covered by any Drawdown, each
Participating Investor in the Original Investment to which such
Follow-On Investment relates shall be required to make a Capital
Contribution equal to (x) the product of (aa) such Participating
Investor's Investment Percentage in respect of such Original
34
Investment multiplied by (bb) the Investment Drawdown Amount in
respect of such Follow-On Investment or (y) such other amount as
determined to be appropriate by the General Partner in its sole
discretion.
(D)
To the extent that any required Capital
Contribution of any Participating Investor (calculated pursuant to
Section 5.02(b)(ii)(B) or 5.02(b)(ii)(C) without giving effect to
the last sentence of Section 5.01(a)) exceeds such Participating
Investor's then Available Capital Commitment, such Participating
Investor may elect (but shall not be required) to increase its
Capital Commitment by the amount of such excess. In the event that
such Participating Investor elects not to or may not so increase
its Capital Commitment, each of the other Participating Investors
in such Investment shall be required to make a Capital
Contribution equal to the product of (x) the amount of such excess
multiplied by (y) such other Participating Investor's Available
Commitment Percentage (calculated without giving effect to the
Available Capital Commitment of such Participating Investor who
elects not to or may not so increase its Capital Commitment).
(iii)
Amount of Required Capital Contribution in Respect of
Expenses.
(A)
With respect to the portion of the
