Ex 10.32
================================================================================
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
OF
TRIDENT III PROFESSIONALS FUND, L.P.
(A Cayman Islands Exempted Limited Partnership)
This Amended
and Restated Limited Partnership
Agreement of Trident III Professionals Fund, L.P.,
dated December 18,
2003, amends and
restates the
Limited Partnership
Agreement
of Trident III
Professionals Fund, L.P., dated October 22, 2003
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
SECTION
PAGE
-------
----
SECTION 1
<S>
<C>
ORGANIZATION;
ETC........................................................................................1
1.1 Amendment and Restatement of the
Initial Agreement; Filings,
etc.................................1
1.2 Name and
Offices.................................................................................2
1.3
Purposes.........................................................................................2
1.4
Term.............................................................................................3
1.5 Fiscal
Year......................................................................................3
1.6 Partnership
Powers...............................................................................3
SECTION 2
THE GENERAL
PARTNER......................................................................................4
2.1
Management.......................................................................................4
2.2 Limitations on the General
Partner...............................................................5
2.3 Reliance by Third
Parties........................................................................5
2.4
Expenses.........................................................................................5
2.5 Liability of the General Partner
and the
Manager.................................................5
2.6 Conflicts of
Interest............................................................................6
2.7 Transfer or Withdrawal by the
General
Partner....................................................7
2.8 Certain Other
Relationships......................................................................8
SECTION 3
LIMITED
PARTNERS.........................................................................................8
3.1 Limited
Partners.................................................................................8
3.2 No Participation in Management,
etc..............................................................8
3.3 Limitation of
Liability..........................................................................8
3.4 No Priority,
etc.................................................................................9
SECTION 4
INVESTMENTS..............................................................................................9
4.1 Investments in Portfolio
Companies...............................................................9
4.2 Temporary
Investments...........................................................................10
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
SECTION 5
<S>
<C>
CAPITAL CONTRIBUTIONS; CAPITAL
COMMITMENTS..............................................................10
5.1 Capital Contributions and Capital
Commitments of the
Partners...................................10
5.2 Excused
Investments.............................................................................11
5.3 Defaulting Limited
Partners.....................................................................12
5.4 Termination of Employment (other
than Tier 1 Limited
Partners)..................................14
5.5 Termination of a Tier 1 Limited
Partner.........................................................16
5.6 Special Consequences of
Termination of Any Profits Limited
Partner..............................17
5.7 Further
Actions.................................................................................17
SECTION 6
CAPITAL ACCOUNTS; DISTRIBUTIONS;
ALLOCATIONS;
WITHHOLDING...............................................18
6.1 Capital
Accounts................................................................................18
6.2 Adjustments to Capital
Accounts.................................................................18
6.3
Distributions...................................................................................18
6.4 Tax
Distributions...............................................................................19
6.5 Other
Provisions................................................................................19
6.6 Distributions of
Securities.....................................................................20
6.7 Negative Capital
Accounts.......................................................................20
6.8 No Withdrawal of
Capital........................................................................20
6.9
Allocations.....................................................................................20
6.10 Tax
Matters....................................................................................20
6.11 Withholding
Taxes..............................................................................21
6.12 Clawback by Profits Limited
Partners...........................................................23
6.13 Final
Distribution.............................................................................23
SECTION 7
THE
MANAGER.............................................................................................23
SECTION 8
BANKING; ACCOUNTING; BOOKS AND RECORDS;
ADMINISTRATIVE
SERVICES.........................................24
8.1
Banking.........................................................................................24
8.2 Maintenance of Books and Records;
Access........................................................24
8.3 Partnership Tax
Returns.........................................................................25
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S>
<C>
8.4
Valuation.......................................................................................25
SECTION 9
REPORTS TO
PARTNERS.....................................................................................25
9.1 Independent
Auditors............................................................................25
9.2 Reports to Current
Partners.....................................................................25
9.3 United States Federal Income Tax
Information....................................................26
9.4 Additional
Information..........................................................................26
SECTION 10
INDEMNIFICATION OF COVERED
PERSONS......................................................................26
10.1 Indemnification of Covered
Persons.............................................................26
10.2 Expenses,
etc..................................................................................28
10.3 Notices of Claims,
etc.........................................................................28
10.4 No
Waiver......................................................................................28
10.5 Covered Persons May Rely and
Enforce...........................................................29
SECTION 11
TRANSFER OF LIMITED PARTNERSHIP INTERESTS;
WITHDRAWAL OF LIMITED PARTNERS...............................29
11.1 Admission, Substitution and
Withdrawal of Limited Partners;
Assignment.........................29
11.2 Additional Limited
Partners....................................................................32
SECTION 12
DEATH, INCOMPETENCY OR BANKRUPTCY OR
DISSOLUTION OF
PARTNERS............................................35
12.1 Bankruptcy, Dissolution of the
General
Partner.................................................35
12.2 Death, Incompetence, Bankruptcy,
Dissolution or Withdrawal of a Limited
Partner................35
SECTION 13
DURATION AND TERMINATION OF
PARTNERSHIP.................................................................35
13.1
Duration.......................................................................................35
13.2 Distribution Upon
Dissolution..................................................................36
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
<S>
<C>
13.3 Distributions in Cash or in
Kind...............................................................37
13.4 Time for Liquidation,
etc......................................................................38
13.5 General Partner and Manager Not
Personally Liable for Return of Capital
Contributions..........38
13.6 Reorganization of the
Partnership..............................................................38
SECTION 14
DEFINITIONS.............................................................................................41
Section 15
AMENDMENTS; POWER OF
ATTORNEY...........................................................................49
15.1
Amendments.....................................................................................49
15.2 Power of
Attorney..............................................................................50
15.3 Further Actions of the Limited
Partners........................................................53
Section 16
MISCELLANEOUS
PROVISIONS................................................................................53
16.1
Notices........................................................................................53
16.2
Counterparts...................................................................................54
16.3 Table of Contents and
Headings.................................................................54
16.4 Successors and
Assigns.........................................................................54
16.5
Severability...................................................................................54
16.6
Non-Waiver.....................................................................................54
16.7 Applicable Law (Submission to
Jurisdiction)....................................................54
16.8
Confidentiality................................................................................54
16.9 Survival of Certain
Provisions.................................................................55
16.10 Waiver of
Partition...........................................................................55
16.11 Entire
Agreement..............................................................................55
16.12
Currency......................................................................................56
</TABLE>
iv
<PAGE>
This Amended and Restated Limited Partnership Agreement (as from
time
to time amended, supplemented or restated,
this "AGREEMENT") of TRIDENT III
PROFESSIONALS FUND, L.P., a Cayman Islands
exempted limited partnership (the
"PARTNERSHIP"), is made and entered into on
December 18, 2003, for the purpose
of amending and restating the Limited
Partnership Agreement of the Partnership,
dated October 22, 2003 (the "INITIAL
AGREEMENT"). Capitalized terms used herein
without definition have the meanings
specified in Section 14.
W I T N E S S E T H:
--------------------
WHEREAS, the Partnership is an exempted limited partnership,
organized
under the laws of the Cayman Islands
pursuant to the Partnership Law, originally
between the General Partner and the Initial
Limited Partner;
WHEREAS, the Partnership was constituted pursuant to the
Initial
Agreement, and the General Partner made
such registrations with the Registrar of
Exempted Limited Partnerships in the Cayman
Islands as were necessary to effect
the registration of the Partnership as an
exempted limited partnership under the
Partnership Law;
NOW, THEREFORE, in consideration of the premises and the mutual
promises contained in this Agreement, the
parties hereto hereby agree as
follows:
SECTION 1
ORGANIZATION; ETC.
1.1 AMENDMENT AND RESTATEMENT OF THE INITIAL AGREEMENT; FILINGS,
ETC.
(a) GENERAL. The General Partner, the
Initial Limited Partner and the Persons
from time to time listed in the Partnership
Register as limited partners of the
Partnership (in their capacities as limited
partners of the Partnership, the
"LIMITED PARTNERS", and the General Partner
and the Limited Partners being
herein referred to collectively as the
"PARTNERS", both such terms to include
any Person hereafter admitted to the
Partnership as a Limited Partner or a
General Partner, as the case may be, in
accordance with the terms hereof, and to
exclude any Person that ceases to be a
Partner in accordance with the terms
hereof), hereby amend the Initial Agreement
in its entirety by deleting it and
replacing it with this Agreement. The
parties hereto hereby agree to continue
the Partnership as a limited partnership
under and pursuant to the provisions of
the Partnership Law and agree that the
rights, duties and liabilities of the
Partners shall be as provided in the
Partnership Law, except as otherwise
provided herein. A Person shall be admitted
as a limited partner of the
Partnership at the time that (i) the
Agreement, a Power of Attorney and a
Subscription Agreement, or counterparts
thereof are executed by or on behalf of
such Person and are accepted by the General
Partner and (ii) such Person is
listed by the
1
<PAGE>
General Partner as a Limited Partner in the
Partnership Register.
Immediately following the admission of
Limited Partners at the Initial Closing,
the Initial Limited Partner shall cease to
be a partner of the Partnership and
the Partnership shall return the original
capital contribution made by the
Initial Limited Partner, who shall have no
further rights or claims against, or
obligations as a partner of, the
Partnership.
(b) PARTNERSHIP REGISTER. The General Partner shall cause to be
maintained in the registered and principal
offices of the Partnership a register
of limited partnership interests of the
Partnership setting forth the name,
mailing address, Capital Commitment and
group (as set forth in Section 3.1) of
each Partner along with such other
information as required by Section 11(1) of
the Partnership Law (the "PARTNERSHIP
REGISTER"). The Partnership Register shall
from time to time be updated as necessary
and in accordance with the Partnership
Law to maintain the accuracy of the
information contained therein. Except as may
otherwise be provided herein, any reference
in this Agreement to the Partnership
Register shall be deemed to be a reference
to the Partnership Register as in
effect from time to time. Subject to the
terms of this Agreement, the General
Partner may authorize any action permitted
hereunder in respect of the
Partnership Register without any need to
obtain the consent of any other
Partner.
1.2 NAME AND OFFICES. The name of the Partnership is Trident
III
Professionals Fund, L.P. The Partnership
shall have its registered office in the
Cayman Islands at the offices of Walkers
SPV Limited, Walkers House, Mary
Street, P.O. Box 908 GT, Georgetown, Grand
Cayman, Cayman Islands at which shall
be kept the records required to be
maintained under the Partnership Law, at
which the service of process on the
Partnership may be made and to which all
notices and communications may be
addressed. The General Partner may designate
from time to time another office in the
Cayman Islands as the Partnership's
registered office. The Partnership shall
have its initial principal office for
its activities at 20 Horseneck Lane,
Greenwich, CT 06830, United States of
America. The General Partner may designate
from time to time another office
within or without the United States as the
Partnership's principal office for
its investment activities. The Partnership
may from time to time have such other
office or offices within or without the
Cayman Islands as may be designated by
the General Partner.
1.3 PURPOSES. Subject to the other provisions of this Agreement,
the
purposes and business of the Partnership
are to co-invest with Trident III,
L.P., a Cayman Islands exempted limited
partnership (the "INSTITUTIONAL FUND"
and, together with any other investment
funds and separate accounts organized by
or managed by MMC or its Affiliates and
authorized to co-invest with the
Institutional Fund in Portfolio Companies,
the "CO-INVESTMENT FUNDS") and to
engage in such other activities as the
General Partner deems necessary,
advisable, convenient or incidental
thereto, to engage in any business which may
lawfully be conducted by a limited
partnership formed pursuant to the
Partnership Law and to carry on any
activities relating thereto or arising
therefrom,
2
<PAGE>
including without limitation anything
incidental, ancillary or necessary to the
foregoing, PROVIDED that the Partnership
shall not undertake business with the
public in the Cayman Islands other than so
far as may be necessary for the
carrying on of the activities of the
Partnership exterior to the Cayman Islands.
1.4 TERM. The term of the Partnership commenced on the date set
forth
in the statement (as it may be amended from
time to time, the "STATEMENT")
effecting its registration as an exempted
limited partnership pursuant to
Section 9 of the Partnership Law and shall
continue, unless the Partnership is
sooner dissolved, until the end of the term
of the Institutional Fund (such
term, as so extended, being referred to as
the "TERM"), PROVIDED, that the
General Partner in its sole discretion may
extend such Term. Notwithstanding the
expiration of the Term, the Partnership
shall continue until notice of
dissolution of the Partnership is filed in
accordance with Section 13.4(b) and
in the manner provided in the Partnership
Law.
1.5 FISCAL YEAR. The Fiscal Year of the Partnership shall end on
the
31st day of December in each year. The
Partnership shall have the same Fiscal
Year for income tax and for financial and
partnership accounting purposes.
1.6 PARTNERSHIP POWERS. In furtherance of the purposes specified
in
Section 1.3 and without limiting the
generality of Section 2.1, the Partnership
and the General Partner, acting on behalf
of the Partnership or on its own
behalf and in its own name, as appropriate,
shall be empowered to do or cause to
be done any and all acts deemed by the
General Partner, in its sole judgment, to
be necessary, advisable, appropriate,
proper, convenient or incidental to or for
the furtherance of the purposes of the
Partnership including, without
limitation, the power and authority:
(a) to acquire, hold, manage, own and Transfer the
Partnership's interests in Securities or any other investments made
or
other property or assets held by the Partnership;
(b) to establish, have, maintain or close one or more offices
within or without the Cayman Islands and in connection therewith
to
rent or acquire office space and to engage personnel;
(c) to open, maintain and close bank and brokerage (including,
without limitation, margin) accounts, including, without
limitation, to
draw checks or other orders for the payment of moneys, to exchange
U.S.
dollars held by the Partnership into non-U.S. currencies and
vice
versa, to enter into currency forward and futures contracts and
to
hedge Portfolio Investments, and to invest funds in Temporary
Investments;
3
<PAGE>
(d) to bring, defend, settle and dispose of Proceedings at law
or in equity or before any Governmental Authority;
(e) to retain and remove consultants, custodians, attorneys,
placement agents, accountants, actuaries and such other agents
and
employees of the Partnership as it may deem necessary or advisable,
and
to authorize each such agent and employee to act for and on behalf
of
the Partnership;
(f) to retain the Manager, as contemplated by Section 7.1, to
render investment advisory and managerial services to the
Partnership;
(g) to execute, deliver and perform its obligations under the
Subscription Agreements and any agreements to induce any Person
to
purchase limited partnership interests in the Partnership, without
any
further act, approval or vote of any Partner;
(h) to make all elections, investigations, evaluations and
decisions, binding the Partnership thereby, that may, in the
sole
discretion of the General Partner, be necessary, appropriate,
desirable
or convenient for the acquisition, holding or Transfer of
Securities
for the Partnership;
(i) to enter into, deliver, perform and carry out contracts
and agreements of every kind necessary or incidental to the offer
and
sale of limited partner interests in the Partnership, to the
acquisition, holding and Transfer of Securities, or otherwise, to
the
accomplishment of the Partnership's purposes, and to take or omit
to
take such other action in connection with such offer and sale,
with
such acquisition, holding or Transfer, or with the business of
the
Partnership as may be necessary, desirable or convenient to further
the
purposes of the Partnership;
(j) to borrow money and to issue guarantees; and
(k) to carry on any other activities necessary to, in
connection with, or incidental to any of the foregoing or the
Partnership's business.
Section 2
THE GENERAL PARTNER
2.1
MANAGEMENT. The management, control and operation of and the
determination of policy with respect to the
Partnership and its affairs shall be
vested exclusively in the General Partner
(acting directly or through its duly
appointed agents), which is hereby
authorized and empowered on behalf and in the
name of the Partnership, subject to Section
2.2 and the other terms of this
Agreement, to carry out any and all of the
objects and purposes of the
Partnership and to perform all acts and
enter into and
4
<PAGE>
perform all contracts and other
undertakings that it may in its sole discretion
deem necessary, advisable, convenient or
incidental thereto. The General Partner
may exercise on behalf of the Partnership,
and may delegate to the Manager, all
of the powers set forth in Section 1.6,
PROVIDED, that the management and the
conduct of the activities of the
Partnership shall remain the sole
responsibility of the General Partner and
all decisions relating to the
selection and disposition of the
Partnership's investments shall be made
exclusively by the General Partner in
accordance with this Agreement. The
General Partner is hereby authorized to
appoint a successor general partner.
2.2 LIMITATIONS ON THE GENERAL PARTNER. The General Partner shall
not:
(a) do any act in contravention of any applicable law or
regulation, or any provision of this Agreement or of the
Statement;
(b) possess Partnership property for other than a Partnership
purpose;
(c) admit any Person as a general partner of the Partnership
except as permitted by this Agreement and the Partnership Law;
(d) admit any Person as a Limited Partner except as permitted
by this Agreement and the Partnership Law;
(e) Transfer its interest in the Partnership except as
permitted by this Agreement and the Partnership Law; or
(f) permit the registration or listing of interests in the
Partnership on an "established securities market," as such term is
used
in Treasury Regulations section 1.7704-1.
2.3 RELIANCE BY THIRD PARTIES. In dealing with the General Partner
and
its duly appointed agents (including,
without limitation, the Manager), no
Person shall be required to inquire as to
the General Partner's or any such
agent's authority to bind the
Partnership.
2.4 EXPENSES. All Partnership Expenses and Organizational
Expenses
shall be paid by the Partnership.
2.5 LIABILITY OF THE GENERAL PARTNER AND THE MANAGER. (a)
GENERAL.
Except as provided in the Partnership Law,
the General Partner has the
liabilities of a partner in a partnership
without limited partners to (I) the
Partnership and the other Partners and (II)
subject to the other provisions of
this Agreement, to Persons other than the
Partnership and the other Partners. No
Covered Person shall be liable to the
Partnership or any Partner for any act or
omission taken or suffered by such Covered
Person in good faith. No Partner
shall be liable to the Partnership or any
Partner for any action taken by
5
<PAGE>
any other Partner. To the extent that, at
law or in equity, a Covered Person has
duties and liabilities to the Partnership
or to the Partners, such Covered
Person acting under this Agreement or
otherwise shall not be liable to the
Partnership or any Partner for its good
faith reliance on the provisions of this
Agreement. The provisions of this
Agreement, to the extent they expressly
restrict, replace or modify the duties and
liabilities of a Covered Person
otherwise existing at law or in equity, are
agreed by the Partners to restrict,
replace or modify such other duties and
liabilities of such Covered Person.
Except as otherwise expressly provided in
this Agreement, the General Partner
shall not be liable for the return of all
or any portion of the Limited
Partner's Capital Accounts or Capital
Contributions.
(b) RELIANCE. A Covered Person (I) shall incur no liability in
acting
upon any signature or writing believed by
it to be genuine, (II) may rely on a
certificate signed by an officer of any
Person in order to ascertain any fact
with respect to such Person or within such
Person's knowledge, and (III) may
rely on an opinion of counsel selected by
such Covered Person with respect to
legal matters. Each Covered Person may act
directly or through its agents or
attorneys. Each Covered Person may consult
with counsel, appraisers, engineers,
accountants, actuaries, auditors and other
skilled Persons of its choosing, and
shall not be liable for anything done,
suffered or omitted in good faith
reliance upon the advice of any of such
Persons. No Covered Person shall be
liable to the Partnership or any Partner
for any error of judgment made in good
faith by a responsible officer or officers
of the Covered Person. Except as
otherwise provided in this Section 2.5, no
Covered Person shall be liable to the
Partnership or any Partner for any mistake
of fact or judgment by the Covered
Person in conducting the affairs of the
Partnership or otherwise acting in
respect of and within the scope of this
Agreement.
(c) DISCRETION. Whenever in this Agreement the General Partner or
the
Manager is permitted or required to make a
decision (I) in its "sole discretion"
or "discretion" or under a grant of similar
authority or latitude, the General
Partner or the Manager, as the case may be,
shall be entitled to consider such
interests and factors as it deems
appropriate, including, without limitation,
its own interests, or (II) in its "good
faith" or under another expressed
standard, the General Partner or the
Manager, as the case may be shall act under
such express standard and shall not be
subject to any other or different
standard imposed by this Agreement or any
other agreement or by relevant
provisions of law or in equity or
otherwise. If any questions should arise with
respect to the operation of the
Partnership, which are not otherwise
specifically provided for in this Agreement
or the Partnership Law, or with
respect to the interpretation of this
Agreement, the General Partner is hereby
authorized to make a final determination
with respect to any such question and
to interpret this Agreement in good faith,
and its determination and
interpretation so made shall be final and
binding on all parties.
2.6 CONFLICTS OF INTEREST. (a) POTENTIAL CONFLICTS OF INTEREST.
While
the Manager and the General Partner intend
to avoid situations involving
conflicts of interest, each
6
<PAGE>
Limited Partner acknowledges that there may
be situations in which the interests
of the Partnership, with respect to a
Portfolio Company or otherwise, may
conflict with the interests of the General
Partner, the Manager or their
respective Affiliates. Each Limited Partner
agrees that the activities of the
General Partner, the Manager, and their
respective Affiliates not prohibited by
this Agreement may be engaged in by the
General Partner, the Manager or any such
Affiliate, as the case may be, and will
not, in any case or in the aggregate, be
deemed a breach of this Agreement or any
duty owed by any such Person to the
Partnership or to any Partner.
(b) ACTUAL CONFLICTS OF INTEREST. On any issue involving actual
conflicts of interest not provided for
elsewhere in this Agreement, each of the
Manager and the General Partner will be
guided by its good faith judgment as to
the best interests of the Partnership and
shall take such actions as are
determined by the Manager and the General
Partner, as the case may be, to be
necessary or appropriate to ameliorate any
such conflict of interest. If the
General Partner or the Manager takes an
action in respect of a matter giving
rise to a conflict of interest, neither the
General Partner nor the Manager nor
any of their respective Affiliates shall
have any liability to the Partnership
or any Limited Partner for actions in
respect of such matter taken in good faith
by them.
2.7 TRANSFER OR WITHDRAWAL BY THE GENERAL PARTNER. To the
extent
permitted by law,
(a) the General Partner may at its election convert to a
limited partnership, limited liability company or other entity
formed
under the
laws of the Cayman Islands or any other jurisdiction, or
(b) the General Partner may Transfer its interest as the
general partner of the Partnership to, or be merged with and into,
a
limited partnership, limited liability company or other entity
formed
under the laws of the Cayman Islands or any other jurisdiction for
the
purpose of serving as the general partner of the Partnership,
but only if in any such case the partners
of such limited partnership, the
members of such limited liability company
or the equity holders of such other
entity, as the case may be, include the
Persons that are the general partners or
the controlling equity holders of the
General Partner. Upon any such conversion
to such a limited partnership, limited
liability company or other entity, or any
such Transfer by or merger of the General
Partner to or with such a limited
partnership, limited liability company or
other entity, such limited
partnership, limited liability company or
other entity shall be deemed to be the
same Person as the General Partner for all
purposes of this Agreement. All
Subscription Agreements applicable to the
Partnership that are in effect at the
time of any such conversion, Transfer or
merger shall thereafter continue in
full force and effect.
7
<PAGE>
2.8 CERTAIN OTHER RELATIONSHIPS. MMC, the General Partner, the
Manager,
and any of their respective Affiliates may
organize, sponsor or manage, private
investment funds, including, without
limitation, funds having primary investment
objectives and policies substantially the
same as those of the Partnership.
Other than as expressly contemplated
herein, this Agreement shall not restrict
or limit the activities of MMC, the General
Partner, the Manager or any of their
respective Affiliates.
SECTION 3
LIMITED PARTNERS
3.1 LIMITED PARTNERS. Limited Partners shall be divided into groups
as
follows:
(a) "EMPLOYER LIMITED PARTNERS" shall be those Limited
Partners designated as such in the Partnership Register.
(b) "PROFITS LIMITED PARTNERS" shall be those Limited Partners
designated as such in the Partnership Register.
(c) "CASH LIMITED PARTNERS" shall be those Limited Partners
designated as such in the Partnership Register.
The Associated Commitments of the Profits
Limited Partners shall be associated
on the records of the Partnership with the
Capital Commitment of the relevant
Employer Limited Partner.
3.2 NO PARTICIPATION IN MANAGEMENT, ETC. No Limited Partner, in
its
capacity as a limited partner of the
Partnership, shall take part in the
management or control of the Partnership's
affairs, transact any business in the
Partnership's name or have the power to
sign documents for or otherwise bind the
Partnership. No Limited Partner shall have
the right to vote for the election,
removal or replacement of the General
Partner, except that, upon an event
causing the immediate dissolution of the
Partnership pursuant to Section 15 of
the Partnership Law or Section 13.1 of this
Agreement, the Limited Partners may
vote to unanimously elect one or more new
general partners of the Partnership
pursuant to Section 15 of the Partnership
Law. No provision of this Agreement
shall obligate any Limited Partner to refer
investments to the Partnership or
restrict any investments that a Limited
Partner may make.
3.3 LIMITATION OF LIABILITY. Except as may otherwise be provided by
the
Partnership Law or in Section 10.1(b) or
Section 6.12 or otherwise herein, the
liability of a Limited Partner for any loss
of the Partnership shall not exceed
the sum of (A) the amount of its Capital
Commitment, if any, (B) its interest in
the undistributed assets of the
Partnership, (C) its obligation to make other
payments expressly provided for in this
8
<PAGE>
Agreement, and (D) its liability under any
applicable law, including without
limitation the Partnership Law.
3.4 NO PRIORITY, ETC. No Limited Partner shall have priority over
any
other Limited Partner either as to the
return of the amount of its Capital
Contribution to the Partnership or, except
as provided in Section 6, as to any
allocation of income, gain, deduction or
loss.
SECTION 4
INVESTMENTS
4.1 INVESTMENTS IN PORTFOLIO COMPANIES. (a) CO-INVESTMENT. The
Partnership shall co-invest (and, in
connection with such co-investments
acquire, hold, manage and Transfer
Securities) with the other Co-Investment
Funds in a manner determined in the by the
general partner of the Institutional
Fund pursuant to the Institutional Fund
Agreement; PROVIDED that in all
instances the Partnership shall co-invest
with the other Co-Investment Funds PRO
RATA (allowing for rounding) on the basis
of committed capital in the same class
or classes of Securities acquired by the
Co-Investment Funds on the same terms
and at the same time as the Co-Investment
Funds, except that the Partnership may
purchase from the Co-Investment Funds its
PRO RATA share of any portfolio
investment acquired by the Co-Investment
Funds prior to a Closing Date at the
acquisition cost to the Co-Investment
Funds, plus interest (calculated from the
date the Co-Investment Funds acquired such
investment) at a rate per annum equal
to the Prime Rate plus two percent
(2%).
(b) REINVESTMENT. Proceeds from the disposition of Portfolio
Investments may, in the sole discretion of
the General Partner, be retained and
reinvested by the Partnership to the same
extent that the Institutional Fund is
permitted by the Institutional Fund
Agreement to reinvest proceeds from the
disposition of such financings and
investments.
(c) SPECIAL INVESTMENT VEHICLE. If the General Partner determines
in
its sole discretion for legal, tax,
regulatory or other reasons that it is
appropriate for any or all of the Partners
to participate in one or more
investments, each of which would be a
Portfolio Investment if it were made by
the Partnership, through an entity other
than the Partnership, the General
Partner may structure the making of such
investment or investments outside of
the Partnership by requiring each such
Partner, subject to Section 5.2, to
contribute capital to an alternative entity
(each, a "SPECIAL INVESTMENT
VEHICLE") that, in lieu of the Partnership,
will invest in such investment or
investments. In such event, (i) each such
Partner shall make a capital
commitment directly to such Special
Investment Vehicle, subject to Section 5.2,
and such capital commitment shall reduce
the Capital Commitments of such Partner
to the same extent, and (ii) each Limited
Partner shall participate in the
Special Investment Vehicle pursuant to the
Power of
9
<PAGE>
Attorney executed by such Limited Partner,
and documentation with respect to
such Special Investment Vehicle shall be
executed and delivered on behalf of
each such Limited Partner by the General
Partner pursuant to such Power of
Attorney. The economic terms of the
organizational documents of any Special
Investment Vehicle will be substantially
similar in all material respects to
those of the Partnership.
(d) BLOCKER STRUCTURE. If the General Partner determines, in its
sole
discretion, that a Portfolio Investment may
give rise to material taxable income
which is (or is taken into account as if it
were) effectively connected with the
conduct of a trade or business within the
United States to a Limited Partner
subject to tax on such income under section
871(b) or 897 of the Code, the
General Partner may cause the Partnership
to invest in such Portfolio Investment
through an entity treated as a corporation
for United States federal income tax
purposes, in which event the General
Partner may utilize one or more Special
Investment Vehicles and/or subsidiaries of
the Partnership.
(e) PARTICIPATION. The Partners shall participate in Portfolio
Investments in proportion to their
Available Capital Commitments.
4.2 TEMPORARY INVESTMENTS. The General Partner may invest funds
held by
the Partnership in Temporary Investments
pending investment in Portfolio
Investments, pending distribution or for
any other purpose.
SECTION 5
CAPITAL CONTRIBUTIONS; CAPITAL COMMITMENTS
5.1 CAPITAL CONTRIBUTIONS AND CAPITAL COMMITMENTS OF THE PARTNERS.
(a)
CAPITAL CONTRIBUTIONS. Except as otherwise
provided herein, each Partner (other
than the Profits Limited Partners) shall
make Capital Contributions to the
Partnership in the aggregate amount of the
Capital Commitment of such Partner as
set forth opposite its name in the
Partnership Register, PROVIDED that, except
as otherwise provided herein, the Partners
(other than the Profits Limited
Partners) shall make such Capital
Contributions to the Partnership (i) in
respect of Portfolio Investments, PRO RATA
based on the Capital Commitments or
Remaining Capital Commitments, as
determined with respect to each Portfolio
Investment by the General Partner in its
sole discretion, of all the Partners
(other than Defaulting Cash Limited
Partners and Limited Partners (including,
without limitation, an Employer Limited
Partner in respect of an associated
Profits Limited Partner) excused from
making such a Capital Contribution
pursuant to Section 5.2), and (ii) in
respect of Organizational Expenses and
Partnership Expenses, PRO RATA based on the
Capital Commitments of all the
Partners (other than Defaulting Cash
Limited Partners), and PROVIDED FURTHER
that in respect of each Partner, such
Partner's aggregate Capital Contributions
shall not exceed such Partner's Capital
Commitment.
10
<PAGE>
(b) DRAWDOWNS. Except as otherwise provided herein, the Capital
Contributions of each Partner (other than
the Profits Limited Partners), shall
be paid in separate Drawdowns, subject to
the following terms and conditions:
(i) The General Partner shall provide each Employer Limited
Partner and each Cash Limited Partner with a notice (as the same
may be
revised by the General Partner in its sole discretion, the
"DRAWDOWN
NOTICE") at least 3 days prior to the date of Drawdown. Each
such
Partner shall pay to the Partnership the Capital Contribution of
such
Partner as specified in the Drawdown Notice, in cash or other
immediately available funds by the date of Drawdown specified in
the
Drawdown Notice.
(ii) Subject to Section 5.2, each Limited Partner (other than
the Profits Limited Partners) shall pay to the Partnership the
Capital
Contribution of such Partner in respect of Portfolio
Investments,
Partnership Expenses or Organizational Expenses, as the case may
be, as
specified in the Drawdown Notice (as the same may be revised), in
cash
or other immediately available funds by the date of Drawdown
specified
in the Drawdown Notice.
(iii) Each Capital Contribution by an Employer Limited Partner
in respect of a Capital Commitment shall be associated on the
records
of the Partnership with the Profits Limited Partner with which
such
Capital Commitment is associated.
(c) CREDITORS. The provisions of this Section 5.1 are intended
solely
to benefit the Partners and, to the fullest
extent permitted by applicable law,
shall not be construed as conferring any
benefit upon any creditor of the
Partnership (and no such creditor shall be
a third party beneficiary of this
Agreement), and no Partner shall have any
duty or obligation to any creditor of
the Partnership to make any Capital
Contributions or to cause the General
Partner to deliver a Drawdown Notice.
5.2 EXCUSED INVESTMENTS. The General Partner may, in its sole
discretion, excuse, in whole or in part,
any Limited Partner from participation
in any Portfolio Investment if the General
Partner, in its sole discretion, has
determined that any such participation (i)
may constitute a conflict of interest
for such Limited Partner, the Partnership
or any other Co-Investment Fund, (ii)
may subject such Limited Partner, the
Partnership or any other Co-Investment
Fund to a material tax or material
regulatory requirement to which it or they
would not otherwise be subject, or which is
reasonably likely to materially
increase any such material tax or material
regulatory requirement beyond what it
would otherwise have been, or (iii) may
cause a Material Adverse Effect. In the
event that, pursuant to the immediately
preceding sentence, the General Partner
excuses a Profits Limited Partner with
respect to participation in a Portfolio
Investment, the Associated Contribution of
the Employer Limited Partner
associated with such Profits Limited
Partner shall be excused. For the avoidance
of doubt, there will be no reduction
11
<PAGE>
in the Remaining Associated Commitment of
an Employer Limited Partner with
respect to an excused Profits Limited
Partner associated with such Employer
Limited Partner.
5.3 DEFAULTING LIMITED PARTNERS. (a) CASH LIMITED PARTNERS. If any
Cash
Limited Partner fails to contribute, in a
timely manner, any portion of the
Capital Commitment required to be
contributed by such Cash Limited Partner
hereunder or pursuant to such Cash Limited
Partner's Subscription Agreement, or
any portion of the amounts determined
pursuant to Section 10.1 to be required to
be contributed by such Cash Limited
Partner, and any such failure continues for
ten Business Days after receipt of written
notice thereof from the General
Partner (a "CASH LIMITED PARTNER DEFAULT"),
then such Cash Limited Partner (a
"DEFAULTING CASH LIMITED PARTNER") may be
designated by the General Partner as
in default and shall thereafter be subject
to the provisions of this Section
5.3. The General Partner, in its sole
discretion, may choose not to designate
any such Cash Limited Partner as a
Defaulting Cash Limited Partner and may agree
to waive or permit the cure of all or part
of any default by such Defaulting
Cash Limited Partner, subject to such
conditions as the General Partner and the
Defaulting Cash Limited Partner may agree
upon. In the event that a Cash Limited
Partner becomes a Defaulting Cash Limited
Partner, (i) such a Defaulting Cash
Limited Partner's Remaining Capital
Commitment (the "DEFAULTED COMMITMENTS")
shall be deemed to be zero (except that the
General Partner, the Employer
Limited Partners and the Cash Limited
Partners that are not Defaulting Cash
Limited Partners shall have an option,
exercisable within ten Business Days
following the date of the notice referred
to in the first sentence of this
Section 5.3(a), to assume the Defaulted
Commitments, if any, of the Defaulting
Cash Limited Partner, such Defaulted
Commitments to be assumed in proportion to
the Capital Commitments and/or Associated
Commitments, as the case may be, of
the Partners exercising such option (the
"EXERCISING PARTNERS")), (ii) such
Defaulting Cash Limited Partner shall be
entitled to receive only one-half of
the distributions that it would have been
entitled to receive had it not become
a Defaulting Cash Limited Partner, and the
other one-half of such distributions
(the "FORFEITED DISTRIBUTIONS") shall be
made in accordance with this Section
5.3(a), and (iii) such Defaulting Cash
Limited Partner shall not have a right to
receive any distributions with respect to
any Portfolio Investment for which
such Defaulting Cash Limited Partner failed
to contribute when due any portion
of such Defaulting Cash Limited Partner's
Capital Commitment or any Portfolio
Investment made on or after such date. The
Forfeited Distributions of a
Defaulting Cash Limited Partner pursuant to
this Section 5.3(a) shall be applied
as follows when and as amounts become
distributable: FIRST, to the Partnership
in an amount equal to the Organizational
Expenses and Partnership Expenses, in
each case as estimated in good faith by the
Manager, attributable to such
Defaulting Cash Limited Partner's Capital
Commitment for the period from the
date of Cash Limited Partner Default
through the end of the Term, and SECOND, to
the Exercising Partners in accordance with
the respective Capital Commitments
and/or Associated Commitments, as the case
may be, of such Partners, or, if
there are no Exercising Partners, to all
Partners other than any Limited
Partner, Cash Limited Partner, or Profits
Limited Partner in default in
accordance with their respective
12
<PAGE>
Capital Commitments and/or Associated
Commitments, as the case may be. In
addition, such Defaulting Cash Limited
Partner shall contribute to the
Partnership an amount equal to the
contribution, if any, that such Defaulting
Cash Limited Partner would be required to
make to the Partnership pursuant to
Section 6.11(d), Section 6.12 or Section
10.1(b) if all of the assets of the
Partnership were liquidated as of the date
of Cash Limited Partner Default for
their Value and all of the liabilities of
the Partnership were satisfied in
accordance with their terms and the
Partnership was dissolved in accordance with
Section 13. Notwithstanding any other
provision of this Section 5.3(a), the
obligations of any Defaulting Cash Limited
Partner to the Partnership hereunder
shall not be extinguished as a result of
the operation of this Section 5.3(a).
The General Partner shall have the right,
in its sole discretion, to pursue all
remedies at law or in equity available to
it with respect to the default of a
Defaulting Cash Limited Partner.
(b) PROFITS LIMITED PARTNERS. If any Profits Limited Partner (A)
fails
to make, in a timely manner, any
contributions required to be made by such
Limited Partner pursuant to Section 6.12 or
Section 10.1(b), or (B) fails to
defer compensation at the time and in the
amount required by the MMC Capital
Plan, and any such failure continues for
ten Business Days after receipt of
written notice thereof from the General
Partner (a "PROFITS LIMITED PARTNER
DEFAULT"), then such Limited Partner (a
"DEFAULTING PROFITS LIMITED PARTNER")
may be designated by the General Partner as
in default and shall thereafter be
subject to the provisions of this Section
5.3(b). To the extent permitted by the
MMC Capital Plan, the General Partner, in
its sole discretion, may choose not to
designate any Profits Limited Partner as a
Defaulting Profits Limited Partner
and may agree to waive or permit the cure
of all or part of any default by such
Defaulting Profits Limited Partner, subject
to such conditions as the General
Partner and the Defaulting Profits Limited
Partner may agree upon. Except as may
be otherwise provided in this Agreement, in
the event that a Profits Limited
Partner becomes a Defaulting Profits
Limited Partner, (i) such a Defaulting
Profits Limited Partner's interest in the
Partnership attributable to such
Defaulting Profits Limited Partner's
unfunded deferral under the MMC Capital
Plan would be purchased by the relevant
Employer Limited Partner or its designee
for $1.00, and (ii) such Defaulting Profits
Limited Partner shall not have a
right to receive any distributions with
respect to any Portfolio Investment made
on or after the date on which such
Defaulting Profits Limited Partner failed to
make deferrals when due under the MMC
Capital Plan. For the avoidance of doubt,
amounts deferred pursuant to the MMC
Capital Plan by a Profits Limited Partner
but not yet invested in Portfolio
Investments at the time of a Profits Limited
Partner Default by such Profits Limited
Partner shall not be invested in
Portfolio Investments. In addition, such
Defaulting Profits Limited Partner
shall contribute to the Partnership an
amount equal to the contribution, if any,
that such Defaulting Profits Limited
Partner would be required to make to the
Partnership pursuant to Section 6.12 or
Section 10.1(b) if all of the assets of
the Partnership were liquidated as of the
date of Profits Limited Partner
Default for their Value and all of the
liabilities of the Partnership were
satisfied in accordance with their terms
and the Partnership was dissolved in
accordance with Section 13, and such
Defaulting Profits Limited Partner's
13
<PAGE>
contribution in respect of Section 6.12
shall be distributed to its associated
Employer Limited Partner. In addition, the
Defaulting Profits Limited Partner
may be required to purchase the portion of
the interest of its associated
Employer Limited Partner in the Partnership
attributable to any outstanding
Advance made by such Employer Limited
Partner, in accordance with the provisions
of sections 8.2 and 8.3 of the MMC Capital
Plan. Notwithstanding any other
provision of this Section 5.3(b), the
obligations of any Defaulting Profits
Limited Partner to the Partnership
hereunder shall not be extinguished as a
result of the operation of this Section
5.3(b). The General Partner shall have
the right, in its sole discretion, to
pursue all remedies at law or in equity
available to it with respect to the Profits
Limited Partner Default of a
Defaulting Profits Limited Partner.
5.4 TERMINATION OF EMPLOYMENT (OTHER THAN TIER 1 LIMITED
PARTNERS).
(a) TERMINATION IN THE EVENT OF DEATH,
TOTAL DISABILITY OR RETIREMENT. If a Cash
Limited Partner (other than a Tier 1 Cash
Limited Partner) or a Profits Limited
Partner (other than a Tier 1 Profits
Limited Partner) dies or is terminated as
an employee or consultant of an Employer
Limited Partner by reason of such
Limited Partner's Total Disability or
Retirement, (i) such Cash Limited Partner
or Profits Limited Partner (or his or her
estate or legal representative) shall
retain his or her interest in the
Partnership, PROVIDED that such Limited
Partner (or his or her estate or legal
representative) may at any time request
that the General Partner (or in the case of
a Profits Limited Partner, the
Employer Limited Partner associated with
such terminated Profits Limited
Partner) purchase, or designate a purchaser
for, all or a portion of the
interest in the Partnership of such Limited
Partner, and (ii) such Limited
Partner's obligation to make future Capital
Contributions to the Partnership in
respect of its Capital Commitment to fund
Portfolio Investments made after the
date of such request shall terminate,
except that the obligation to make Capital
Contributions to fund Portfolio Investments
by a Limited Partner whose
employment is termination by reason of
Retirement shall not terminate, unless so
requested by such Limited Partner (or his
or her estate or legal
representative), (iii) any capital
contributed to the Partnership by such
Limited Partner but not yet invested in a
Portfolio Investment shall be
distributed (net of any amounts that would
be deductible if such capital was
distributed pursuant to clause (iv) below)
to such Limited Partner (or his
estate) and (IV) if such Limited Partner
retains his or her interest but his or
her obligation to contribute capital to the
Partnership is terminated, the
Partnership shall be permitted to deduct
from Distributable Cash attributable to
such Limited Partner's interest in the
Partnership amounts equal to the accrued
and unpaid and/or anticipated expenses of
the Partnership, including without
limitation any amounts payable upon
dissolution or to fund indemnification
obligations pursuant to Section 6.11(d),
Section 6.12 or Section 10.1(b). The
General Partner and the affected Employer
Limited Partner may grant any such
requests made pursuant to clauses (i) or
(ii) above, in whole or in part, but
have no obligation to grant any such
request. If the General Partner or the
affected Employer Limited Partner grants
the request that an interest be
purchased, the General Partner or the
affected Employer Limited Partner, as the
case may be, or such Person's designee,
shall provide notice no later than 90
days after such request is made and shall
pay to such
14
<PAGE>
Limited Partner an amount equal to the
Value of such Limited Partner's interest
in the Partnership (or a greater amount
agreed to by the General Partner or the
Employer Limited Partner, as the case may
be) within 60 days of such notice.
Without duplication, the obligations of
such terminated Limited Partner pursuant
to Section 6.11(d), Section 6.12 and
Section 10.1(b) shall survive with the same
effect as if such terminated Limited
Partner had retained its interest in the
Partnership.
(b) OTHER TERMINATION. If a Cash Limited Partner (other than a Tier
1
Cash Limited Partner) or a Profits Limited
Partner (other than a Tier 1 Profits
Limited Partner) is terminated as an
employee of or consultant to an Employer
Limited Partner for a reason other than
death, Total Disability or Retirement,
the General Partner (or in the case of such
a terminated Profits Limited
Partner, the Employer Limited Partner
associated with such terminated Profits
Limited Partner) will have the right, but
not the obligation, to purchase or
designate a purchaser for the interest in
the Partnership of such Limited
Partner at any time after such termination.
If such termination is an
involuntary termination without an MMC
Capital Cause Determination or is a
voluntary termination, the purchase price
for such Limited Partner's interest
shall be the fair market value of such
interest, which shall be as mutually
agreed by the parties, provided that in the
absence of such agreement, fair
market value shall be determined by an
independent appraiser selected by the
General Partner (or the Employer Limited
Partner, as the case may be) and
approved by the Limited Partner, which
approval shall not be unreasonably
withheld. The cost of such appraisal shall
be borne by the General Partner (or
the Employer Limited Partner, as the case
may be). If the employment of a
Limited Partner is terminated due to an
involuntary termination with an MMC
Capital Cause Determination, the purchase
price for such Limited Partner's
interest in the Partnership shall be the
lesser of (i) an amount equal to the
aggregate Capital Contributions made by
such Limited Partner to the Partnership
and (ii) the Value of such interest. Fair
market value as of any date shall be
determined as if the Partnership had been
liquidated in an orderly manner as of
such date. Upon any such purchase of a
Limited Partner's interest in the
Partnership, such Limited Partner shall
have no further interest in the
Partnership. In the absence of any such
purchase of a Limited Partner's interest
in the Partnership, such Limited Partner
shall remain a Limited Partner in the
Partnership and shall remain subject to all
provisions of this Agreement,
PROVIDED that such Limited Partner shall
have no rights under Section 8.2(b). In
addition, unless the General Partner in its
sole discretion determines
otherwise, the obligation of such a
terminated Cash Limited Partner to make
further Capital Contributions to the
Partnership in respect of his or her
Capital Commitment to fund Portfolio
Investments made after the date of such
Cash Limited Partner's termination will
terminate, PROVIDED that if such
obligation is not to be so terminated,
notice that such obligation will continue
will be given to such Cash Limited Partner
within 180 days of the termination of
employment of such
15
<PAGE>
Cash Limited Partner. In addition, unless
the General Partner in its sole
discretion determines otherwise, such
terminated Cash Limited Partner or Profits
Limited Partner shall contribute to the
Partnership (or the Partnership shall
withhold from distributions otherwise due
to such Cash Limited Partner or
Profits Limited Partner) an amount equal to
the contribution, if any, that such
terminated Limited Partner would be
required to make to the Partnership pursuant
to Section 6.11(d), Section 6.12 or Section
10.1(b) if all of the assets of the
Partnership were liquidated as of the date
of termination for their Value and
all of the liabilities of the Partnership
were satisfied in accordance with
their terms and the Partnership was
dissolved in accordance with Section 13.
Without duplication, the obligations of
such terminated Limited Partner pursuant
to Section 6.11(d), Section 6.12 and
Section 10.1(b) shall survive with the same
effect as if such terminated Limited
Partner had retained its interest in the
Partnership.
5.5 TERMINATION OF A TIER 1 LIMITED PARTNER. (a) TERMINATION IN
THE
EVENT OF DEATH, TOTAL DISABILITY OR
RETIREMENT. If a Tier 1 Limited Partner dies
or is terminated as an employee of or
consultant to an Employer Limited Partner
by reason of such Tier 1 Limited Partner's
Total Disability or Retirement, such
Tier 1 Limited Partner shall retain his or
her interest in the Partnership,
PROVIDED that such Tier 1 Limited Partner
or his or her estate or legal
representative may at any time request that
the General Partner (or in the case
of a Tier 1 Profits Limited Partner, its
associated Employer Limited Partner)
purchase or designate a purchaser for, all
or a portion of the interest in the
Partnership of such Tier 1 Limited Partner.
The General Partner and the affected
Employer Limited Partner may grant such
request in whole or in part, but have no
obligation to do so. If the General Partner
or the affected Employer Limited
Partner grants the request that an interest
be purchased, the General Partner or
the affected Employer Limited Partner, as
the case may be, or such Person's
designee shall provide notice no later than
90 days after such request is made,
and shall pay to such Limited Partner an
amount equal to the Value of such
Limited Partner's interest in the
Partnership within 60 days of such notice. In
addition, a Tier 1 Cash Limited Partner or
his or her estate or legal
representative may elect to terminate such
Tier 1 Cash Limited Partner's
obligation to make future Capital
Contributions to the Partnership, in respect
of any amount of his or her Capital
Commitment which exceeds $2.5 million, to
fund Portfolio Investments made after the
date of such election. The obligations
of such terminated Limited Partner pursuant
to Section 6.11(d), Section 6.12 and
Section 10.1(b) shall survive with the same
effect as if such terminated Limited
Partner had retained its interest in the
Partnership.
(b) OTHER TERMINATION. If a Tier 1 Limited Partner is terminated as
an
employee or consultant for a reason other
than death, Total Disability or
Retirement, the General Partner (or in the
case of a Tier 1 Profits Limited
Partner, the Employer Limited Partner
associated with such Tier 1 Profits
Limited Partner) may, but only with the
consent of such Tier 1 Limited Partner,
purchase or designate a purchaser for the
interest in the Partnership of such
Tier 1 Limited Partner at a purchase price
that is mutually agreed upon but
which shall not be less than the Value of
such interest. In addition, unless
both the General Partner and a terminated
Tier 1 Cash Limited Partner agree
otherwise, the Remaining Capital
Commitments of such Tier 1 Cash Limited Partner
shall be reduced to zero and such
terminated Tier 1 Cash Limited Partner shall
have no further obligation to
16
<PAGE>
make Capital Contributions to the
Partnership. Without duplication, the
obligations of such terminated Tier 1 Cash
Limited Partner pursuant to Section
6.11(d), Section 6.12, and Section 10.1(b),
as applicable, shall survive with
the same effect as if such terminated
Limited Partner had retained its interest
in the Partnership. Upon termination of the
employment of a Tier 1 Limited
Partner, such Tier 1 Limited Partner or
representative thereof, can require (i)
that Distributable Cash apportioned to such
Tier 1 Limited Partner be
distributed promptly, and (ii) that
proceeds from the disposition of Portfolio
Investments apportioned to such Limited
Partner shall not be reinvested pursuant
to Section 4.1(b).
(c) COMMITMENTS.
In the event the Capital Commitments of any Tier 1
Cash Limited Partner are reduced pursuant
to Section 5.5, the Employer Limited
Partner will assume such Capital
Commitments to the extent required to ensure
that the Capital Commitments of the Tier 1
Cash Limited Partners, aggregated
with the Capital Commitments of the
Employer Limited Partner associated with the
Tier 1 Profits Limited Partners and with
the capital commitments of the Key
Employees and their estate planning
vehicles to Trident Capital III, L.P., equal
at least $10 million.
5.6 SPECIAL CONSEQUENCES OF TERMINATION OF ANY PROFITS LIMITED
PARTNER.
If, for any reason, a Profits Limited
Partner is terminated as an employee of or
consultant to its associated Employer
Limited Partner, there are additional
consequences as set forth in the MMC
Capital Plan. Such Profits Limited Partner
will have an interest only in Portfolio
Investments that were made during the
period when the Profits Limited Partner
made deferrals when due under the MMC
Capital Plan. The Employer Limited Partner
associated with such terminated
Profits Limited Partner will purchase the
portion of such Profits Limited
Partner's interest in the Partnership
attributable to such terminated Profits
Limited Partner's unpaid deferral under the
MMC Capital Plan for $1.00, and such
terminated Profits Limited Partner's
obligation to make further deferrals under
the MMC Capital Plan will be reduced to
zero. If, at the time the employment of
a Profits Limited Partner with MMC Capital
is terminated, (i) such Profits
Limited Partner has not deferred an amount
under the MMC Capital Plan at least
equal to the amount of such Profits Limited
Partner's Associated Commitment, and
(ii) the amount, if any, of the Capital
Contributions of such Employer Limited
Partner in respect of the associated
Profits Limited Partner's interest in the
Partnership exceeds the amount such Profits
Limited Partner has deferred under
the MMC Capital Plan, then such Employer
Limited Partner may, in its discretion,
require the Profits Limited Partner to
purchase, for cash, the portion of such
Employer Limited Partner's interest in the
Partnership attributable to such
excess Capital Contributions of such
Employer Limited Partner in accordance with
the provisions of sections 8.2 and 8.3 of
the MMC Capital Plan.
5.7 FURTHER ACTIONS. To the extent necessary in the sole discretion
of
the General Partner, the General Partner
shall cause this Agreement to be
amended, without the need for any further
act, vote or approval of any other
Partner or Person, to reflect as
17
<PAGE>
appropriate the occurrence of any of the
transactions referred to in this
Section 5 or in Section 11 as promptly as
is practicable after such occurrence.
SECTION 6
CAPITAL ACCOUNTS; DISTRIBUTIONS; ALLOCATIONS; WITHHOLDING
6.1 CAPITAL ACCOUNTS. There shall be established on the books
and
records of the Partnership a capital
account (a "CAPITAL ACCOUNT") for each
Partner.
6.2 ADJUSTMENTS TO CAPITAL ACCOUNTS. As of the last day of each
Period,
the balance in each Partner's Capital
Account shall be adjusted by (A)
increasing such balance by (i) such
Partner's allocable share of each item of
the Partnership's income and gain for such
Period (allocated in accordance with
Section 6.9) and (ii) the Capital
Contributions, if any, made by such Partner
during such Period and (B) decreasing such
balance by (i) the amount of cash or
the Value of Securities or other property
distributed or deemed distributed to
such Partner pursuant to Section 6 or
Section 13 and (ii) such Partner's
allocable share of each item of the
Partnership's deduction or loss for such
Period (allocated in accordance with
Section 6.10). Each Partner's Capital
Account shall be further adjusted with
respect to any special allocations or
adjustments pursuant to this Agreement.
6.3 DISTRIBUTIONS. Distributable Cash attributable to any
Portfolio
Investment shall initially be apportioned
among the Partners in proportion to
their Sharing Percentages for such
Portfolio Investment. Distributable Cash not
attributable to a Portfolio Investment
shall be apportioned among the Partners
(other than the Employer Limited Partners)
in proportion to their respective
Capital Contributions giving rise to the
Distributable Cash (or, in the case of
a Profits Limited Partner, the Capital
Contributions of the Employer Limited
Partner associated with such Profits
Limited Partner). Except as otherwise
provided herein, Distributable Cash
apportioned to the General Partner shall be
distributed to the General Partner and
Distributable Cash apportioned to a Cash
Limited Partner shall be distributed to
such Cash Limited Partner. Except as
otherwise provided herein, Distributable
Cash apportioned to a Profits Limited
Partner shall be distributed as
follows:
FIRST, 100% to the Employer Limited Partner associated with
such Profits Limited Partner until the cumulative amount
distributed to
such Employer Limited Partner in respect of such Profits
Limited
Partner pursuant to this paragraph First is equal to the sum of (i)
the
aggregate Capital Contributions of such Employer Limited
Partner
associated with
such Profits Limited Partner used to fund the cost of
such Portfolio Investment and each other Portfolio Investment
previously disposed of, or used to fund Partnership Expenses
and
Organizational Expenses, and (ii) such additional amount as is
necessary to provide such
18
<PAGE>
Employer Limited Partner with a rate of return on such Capital
Contributions equal to the AFR Rate (such sum, the "AFR RETURN");
and
SECOND, to such Profits Limited Partner.
6.4 TAX DISTRIBUTIONS. Notwithstanding Section 6.3, the
Partnership
may, either prior to, together with or
subsequent to any distribution of
Distributable Cash pursuant to Section 6.3
with respect to a Portfolio
Investment, make distributions to all
Partners (other than any Defaulting Cash
Limited Partners or Defaulting Profits
Limited Partners), regardless of their
tax status, in amounts intended to enable
such Partners (or any Person whose tax
liability is determined by reference to the
income of any such Partner) to
discharge their United States federal,
state and local (and, in the discretion,
of the General Partner, non-U.S.) income
tax liabilities arising from the
allocations and distributions made (or to
be made) pursuant to this Agreement
with respect to such Portfolio Investment.
The amount distributable pursuant to
this Section 6.4 shall be determined by the
General Partner in its sole
discretion, taking into account the maximum
combined United States federal, New
York State and New York City tax rates
applicable to individuals or corporations
(whichever is higher) on ordinary income
and capital gain (taking into account
the applicable holding period), as the case
may be, and the amounts of ordinary
income and capital gain allocated to the
Partners pursuant to this Agreement,
and otherwise based on such reasonable
assumptions as the General Partner
determines in good faith to be appropriate
(and the assumptions described in
this sentence shall be applied equally to
each Partner regardless of its tax
status). The amount distributable to any
Partner pursuant to any clause of
Section 6.3 shall be reduced by the amount
distributed to such Partner pursuant
to this Section 6.4, and the amount so
distributed under this Section 6.4 shall
be deemed to have been distributed to the
extent of such reduction pursuant to
such clause of Section 6.3 for purposes of
making the calculations required by
Section 6.3.
6.5 OTHER PROVISIONS. (a) AVAILABLE ASSETS. Notwithstanding any
other
provision of this Agreement, distributions
shall be made only to the extent of
Available Assets and in compliance with the
Partnership Law.
(b) DISPOSITION OF PORTION OF PORTFOLIO INVESTMENT. If less than
all of
the Portfolio Investments in a Portfolio
Company are disposed of by the
Partnership, the portion disposed of and
the portion retained shall for purposes
of Sections 6 and 10 (including for
purposes of applying the definitions used
therein) be deem
