Ex 10.34
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TRIDENT CAPITAL III, L.P.
(a Cayman Islands exempted limited partnership)
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AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
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Dated December 4, 2003
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This Amended and Restated Limited Partnership Agreement (as from
time
to time amended, supplemented, restated or
otherwise modified, this "AGREEMENT")
of TRIDENT CAPITAL III, L.P., a Cayman
Islands exempted limited partnership (the
"PARTNERSHIP"), is made and entered into on
December 4, 2003 among: CD Trident
III, LLC, a Delaware limited liability
company; GM Trident III, LLC, a Delaware
limited liability company; MH Trident III,
LLC, a Delaware limited liability
company; and MMC GP III, Inc., a Delaware
corporation ("GP III") (collectively,
the "GENERAL PARTNERS"); and the other
Persons listed on the Partnership
Register (the "LIMITED PARTNERS" and,
together with the General Partners, the
"PARTNERS", both such terms to include any
Person hereinafter admitted to the
Partnership as a Limited Partner or General
Partner, as the case may be, and to
exclude any Person that ceases to be a
Partner in accordance with the terms
hereof). Certain capitalized terms used
herein without definition have the
meanings specified in Article XI.
WHEREAS, the Partnership is an exempted limited partnership,
organized
under the laws of the Cayman Islands
pursuant to the Partnership Law and among
the General Partners and the Limited
Partners;
WHEREAS, the Partnership was constituted pursuant to the
Limited
Partnership Agreement of the Partnership,
dated October 22, 2003 (the "INITIAL
AGREEMENT"), and the General Partners made
such registrations with the Registrar
of Exempted Limited Partnerships in the
Cayman Islands as are necessary to
effect the registration of the Partnership
as an exempted limited partnership
under the Partnership Law;
WHEREAS, the Partners seek to amend and restate the Initial
Agreement
in its entirety.
NOW, THEREFORE, in consideration of the premises and mutual
promises
contained in this Agreement, the parties
hereto hereby amend and restate the
Initial Agreement in its entirety and agree
as follows:
ARTICLE I
ORGANIZATION, ETC.
1.1 CONTINUATION.
(a) GENERAL. The Partners hereby agree to continue the Partnership
as
an exempted limited partnership subject to
the terms of this Agreement and 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.
(b) ADMISSIONS. Upon the execution of this Agreement or a
counterpart
of this Agreement, each of the General
Partners shall continue as General
Partners, each of the other Persons listed
on Schedule A hereto shall be
admitted to the Partnership as a Limited
Partner and 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
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further rights or claims against, or
obligations as a partner of, the
Partnership. Subject to the other
provisions of this Agreement, a Person may be
admitted as a Partner of the Partnership at
the time that (I) this Agreement or
a counterpart of this Agreement is executed
by or on behalf of such Person and
(ii) such Person is listed on the
Partnership Register.
(c) PARTNERSHIP REGISTER. The General Partners shall cause to
be
maintained in the principal office of the
Partnership a register setting forth,
with respect to each Partner, his name,
mailing address, Capital Commitment,
total Capital Contributions to date and
Minimum Points and, with respect to each
Portfolio Investment, the number of Points
allocated to each Partner and the
Capital Contribution made by each Partner,
and such other information as the
General Partners may deem necessary or
desirable (the "PARTNERSHIP REGISTER").
The General Partners shall from time to
time update the Partnership Register as
necessary to accurately reflect the
information therein. Any reference in this
Agreement to the Partnership Register shall
be deemed to be a reference to the
Partnership Register as in effect from time
to time. The form of Partnership
Register as in effect on the date hereof
shall be attached hereto as Schedule A,
and each Partner shall receive as the
Schedule A attached to such Partner's
Agreement the information set forth on the
Partnership Register on the date
hereof with respect to such Partner's
interest in the Partnership, PROVIDED that
no Limited Partner shall have the right to
any information set forth on the
Partnership Register with respect to any
other Partner. No action of any Limited
Partner, and no amendment of any Schedule A
to this Agreement, shall be required
to amend or update the Partnership
Register.
1.2 NAME AND OFFICES. The name of the Partnership heretofore
formed
and continued hereby is "Trident Capital
III, L.P." The registered office of the
Partnership shall be at the offices of
Walkers SPV Limited, Walker House, Mary
Street, P.O. Box 908 GT, George Town, Grand
Cayman, Cayman Islands at which
shall be kept the records required to be
maintained under the Partnership Law
and at which service of process on the
Partnership may be made. At any time, the
Partnership may designate another
registered agent for service of process and/or
registered office.
1.3 FISCAL YEAR. The fiscal year of the Partnership (the
"FISCAL
YEAR") shall end on the 31st day of
December in each year. The Partnership shall
have the same fiscal year for income tax
and for financial and accounting
purposes.
ARTICLE II
PURPOSES AND POWERS
2.1 PURPOSES. Subject to the other provisions of this Agreement,
the
purposes of the Partnership are to serve as
general partner of the Fund; to
acquire, hold and dispose of Securities;
and to engage in such activities as the
General Partners deem necessary, advisable,
convenient or incidental to the
foregoing, in all cases subject to the
Partnership Law.
2.2 POWERS OF THE PARTNERSHIP.
(a) POWERS GENERALLY. The Partnership shall have the power and
authority to take any and all actions
necessary, appropriate, proper, advisable,
incidental or convenient to or for the
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furtherance of the purpose set forth in
Section 2.1, including, but not limited
to, the power and authority:
(i) to direct the formulation of investment policies and
strategies for the Partnership and the Fund, direct the
investment
activities of the Partnership and the Fund, and select and approve
the
investment of the funds of the Partnership and the Fund;
(ii) to acquire, hold, manage, own, sell, transfer, convey,
assign, exchange, pledge or otherwise dispose of Securities,
and
exercise all rights, powers, privileges and other incidents of
ownership or possession with respect to Securities, including,
without
limitation, the voting of Securities, the approval of a
restructuring
of an investment in Securities, participation in arrangements
with
creditors, the institution and settlement or compromise of suits
and
administrative proceedings and other similar matters;
(iii) to establish, have, maintain or close one or more
offices within or without the Cayman Islands and in connection
therewith to rent or acquire office space and to engage
personnel;
(iv) to open, maintain and close bank accounts and draw
checks or other orders for the payment of money and open, maintain
and
close brokerage, mutual fund and similar accounts;
(v) to hire consultants, custodians, attorneys, accountants
and such other agents and employees for the Partnership as it may
deem
necessary or advisable, and authorize any such agent or employee
to
act for and on behalf of the Partnership;
(vi) to make and perform such other agreements and
undertakings as may be necessary or advisable to the carrying out
of
any of the foregoing powers, objects or purposes;
(vii) to enter into the Fund Agreement, and cause the Fund
to enter into Subscription Agreements with its limited partners
and
other agreements and documents in connection with the admission
of
Persons as limited partners of the Fund;
(viii) to bring and defend actions and proceedings at law or
in equity or before any governmental, administrative or other
regulatory agency, body or commission; and
(ix) to carry on any other activities necessary to, in
connection with or incidental to any of the foregoing, the
Partnership's business or the Fund's business.
(b) FUND AGREEMENT. Notwithstanding any other provision of this
Agreement, the Partnership, and any General
Partner on behalf of the
Partnership, is hereby authorized to
execute, deliver and perform its
obligations under the Fund Agreement.
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ARTICLE III
CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; ALLOCATIONS
3.1 CAPITAL CONTRIBUTIONS. Each Partner shall make cash Capital
Contributions to the Partnership in the
aggregate amount of the Capital
Commitment set forth opposite such
Partner's name on the Partnership Register.
Except as otherwise provided herein, the
Partners shall make such Capital
Contributions to the Partnership PRO RATA
in accordance with their respective
Capital Commitments at such times and in
such amounts as are sufficient to meet
Partnership Expenses or enable the
Partnership to contribute the amount of
capital required to be contributed by the
Partnership to the Fund pursuant to
the applicable provisions of the Fund
Agreement, PROVIDED that Capital
Contributions to fund any Portfolio
Investments shall be made by the Partners
participating in such Portfolio Investment
PRO RATA in accordance with their
respective Remaining Capital Commitments
and PROVIDED, FURTHER, that in respect
of each Partner such Partner's aggregate
Capital Contributions shall not exceed
such Partner's Capital Commitment. Each
Partner's Remaining Capital Commitment
shall be increased by any amounts returned
to such Partner (I) pursuant to
Section 4.3(b)(i) or (II) pursuant to
Section 4.3(b)(ii), to the same extent
that such amounts would increase the
remaining capital commitments of the
limited partners of the Fund if such
amounts had been distributed to them
pursuant to the Fund Agreement.
3.2 CAPITAL ACCOUNTS; MEMO ACCOUNTS.
(a) CAPITAL ACCOUNTS. There shall be established on the books
and
records of the Partnership a capital
account (a "CAPITAL ACCOUNT") for each
Partner.
(b) MEMO ACCOUNTS. There shall be established on the books and
records
of the Partnership a memorandum account (a
"MEMO Account") for each Partner.
Upon the sale or other disposition of a
Portfolio Investment, the balance of
each Partner's Memo Account (which may be
positive or negative) shall be
adjusted by (I) increasing such balance by
such Partner's PRO RATA share (based
on the number of Points held by each
Partner for such Portfolio Investment) of
the Target Amount, if any, for such
Portfolio Investment and (II) decreasing
such balance by (A) such Partner's PRO RATA
share (based on the number of Points
held by each Partner for such Portfolio
Investment) of the Shortfall, if any,
for such Portfolio Investment and (B) the
amount distributable, if any, to such
Partner pursuant to Section 4.3(b)(iii)
with respect to such Portfolio
Investment, PROVIDED that the Memo Account
of M&M Vehicle, L.P. shall be
determined without regard to amounts
distributable to it pursuant to Section
4.3(b)(iii)(B) (I.E., solely with regard to
any Points held by it). The Partners
confirm that the intent of the Memo Account
mechanism is to equitably allocate
carried interest distributions received
from the Fund such that, to the maximum
extent practicable, the gain or loss with
respect to any Portfolio Investment
disposed of (to the extent not attributable
to GP III and M&M Vehicle, L.P.'s
50% interest) is shared by the Partners
based on the number of Points they hold
with respect to such Portfolio Investment.
The intended result is that a
Partner's share of carried interest
distributions from a gain investment is
offset by such Partner's share of losses
from a loss investment that reduced the
overall amount of carried interest payable
by the Fund to the Partnership. In
furtherance thereof, the General Partners
may, in their sole discretion, adjust
the Memo Accounts of the Partners to the
extent necessary or desirable to
adequately reflect this intent, including,
without limitation, to take into
account the preferred return and any
unrealized losses.
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3.3 ADJUSTMENTS TO CAPITAL ACCOUNTS. As of the last day of each
Period, the balance in each Partner's
Capital Account shall be adjusted by (A)
increasing such balance by (I) such
Partner's allocable share of items of income
and gain for such Period (allocated in
accordance with Section 3.4) and (II) the
Capital Contributions, if any, made by such
Partner during such Period and (b)
decreasing such balance by (I) such
Partner's allocable share of items of loss
and deduction for such Period (allocated in
accordance with Section 3.4) and
(II) the amount of cash or the Value of
Securities or other property distributed
to such Partner during such Period.
3.4 ALLOCATIONS. Each item of income, gain, loss, credit and
deduction
of the Partnership shall be allocated among
the Capital Accounts of the Partners
with respect to each Period as of the end
of such Period by the General Partners
in a manner that as closely as possible
gives effect to the provisions of
Articles IV and X and the other relevant
provisions of this Agreement.
3.5 TAX MATTERS. The income, gains, losses, credits and
deductions
recognized by the Partnership shall be
allocated among the Partners, for United
States federal, state and local income tax
purposes, to the extent permitted
under the Code and the Treasury
Regulations, in the same manner that each such
item is allocated to the Partners' Capital
Accounts. Notwithstanding the
foregoing, the General Partners shall have
the power to make such allocations
for United States federal, state and local
income tax purposes as may be
necessary to maintain substantial economic
effect, or to insure that such
allocations are in accordance with the
interests of the Partners in the
Partnership, in each case within the
meaning of the Code and the Treasury
Regulations thereunder. Tax credits shall
be equitably allocated by the General
Partners. All matters concerning
allocations for United States federal, state
and local and non-U.S. income tax purposes,
including accounting procedures, not
expressly provided for by the terms of this
Agreement shall be equitably
determined in good faith by the General
Partners. GP III is hereby designated as
the tax matters partner of the Partnership
as provided in the Treasury
Regulations pursuant to section 6231 of the
Code (and any similar provisions
under any state, local or non-U.S. tax
laws). Each Partner hereby consents to
such designation and agrees that upon the
request of the tax matters partner it
will execute, certify, acknowledge, swear
to, file and record at the appropriate
public offices such documents as may be
necessary or appropriate to evidence
such consent. The General Partners may, in
their sole discretion, cause the
Partnership to make the election provided
for under section 754 of the Code.
Either GP III shall have executed and filed
a U.S. Internal Revenue Service Form
8832 prior to the date hereof electing to
classify the Partnership as a
partnership for U.S. federal income tax
purposes pursuant to section 301.7701-3
of the Treasury Regulations as of a date no
later than the date hereof, or GP
III shall timely execute and file such Form
8832 on or after the date hereof
electing to classify the Partnership as a
partnership for United States federal
income tax purposes as of a date no later
than the date hereof, and GP III is
hereby authorized to execute and file such
Form for all of the Partners. The
General Partners will not subsequently
elect to change such classification. Each
General Partner is hereby authorized to
execute and file for all of the Partners
any comparable form or document required by
any applicable United States state
or local tax law in order for the
Partnership to be classified as a partnership
under such tax law.
3.6 NEGATIVE CAPITAL ACCOUNTS. Except as provided in this Agreement
or
required by law, no Partner is required to
make up a negative balance in such
Partner's Capital Account.
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3.7
EXCUSED INVESTMENT. Notwithstanding Section 3.1 and Section
3.4,
no Partner shall make a Capital
Contribution with respect to, or otherwise
participate in, any Portfolio Investment of
the Fund if the General Partners
have determined in their sole discretion
that participation by such Partner in
such Portfolio Investment might give rise
to a conflict of interest or to a
material tax or regulatory requirement for
such Partner or the Partnership.
3.8 ESTATE PARTNERS. Notwithstanding any other provision of
this
Agreement, Capital Commitments and CapitSal
Contributions of any Partner and its
Estate Partner (including, without
limitation, pursuant to Section 4.5) shall be
apportioned between such Partner and such
Estate Partner in proportion to their
Capital Commitments.
ARTICLE IV
DISTRIBUTIONS; WITHHOLDING
4.1 WITHDRAWAL OF CAPITAL. Except as otherwise expressly provided
in
this Article IV or in Article X, no Partner
shall have the right to withdraw
capital from the Partnership or to receive
any distribution or return of, or
interest on, his Capital Contribution.
4.2 SHARING OF CARRIED INTEREST; POINTS.
(a) GENERAL. The Partnership's share of the carried interest in
the
Fund with respect to each Portfolio
Investment shall be shared among the
Partners of the Partnership based on the
number of Points (the "POINTS") held by
each Partner with respect to such Portfolio
Investment. There shall be a total
of 1,000 Points allocated to the Partners
with respect to each Portfolio
Investment. Prior to the consummation of a
Portfolio Investment, each Partner
shall be allocated, with respect to such
Portfolio Investment, Points equal to
the Minimum Points, if any, then listed
with respect to such Partner on the
Partnership Register (subject to Section
4.2(b)), and, if the aggregate number
of such Points is less than 1,000, the
difference shall be allocated to one or
more Partners as determined by a majority
of the Tier 1 General Partners in
their sole discretion, PROVIDED that (I)
without the consent of GP III, the
aggregate number of Points allocated to the
Tier 1 Partners with respect to any
Portfolio Investment shall not exceed 225
Points, (II) without the consent of GP
III, no Points shall be allocated to CD
Trident III, LLC, GM Trident III, LLC,
MH Trident III, LLC, Charles A. Davis,
Garrett M. Moran or Meryl D. Hartzband in
excess of the Minimum Points then listed
with respect to such Partner on the
Partnership Register and (III) any Points
allocated to any Partner and its
Estate Partner shall be allocated between
such Partner and such Estate Partner
in proportion to their Capital Commitments.
Subject to the provisos contained in
the preceding sentence, any Points
forfeited by a Partner who becomes a Special
Assignee pursuant to Article IX shall be
reallocated to one or more Partners as
determined by a majority of the then
remaining Tier 1 General Partners in their
sole discretion.
(b) ZERO POINTS IF EXCUSED INVESTMENT. Notwithstanding anything to
the
contrary in Section 4.2(a), a Partner shall
be allocated zero Points with
respect to a Portfolio Investment if,
pursuant to Section 3.7, such Partner is
excused from making a Capital Contribution
with respect to, or otherwise
participating in, such Portfolio
Investment.
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4.3 DISTRIBUTIONS.
(a) FORM OF DISTRIBUTIONS. Subject to the other provisions of
this
Article IV, as determined by a majority of
the General Partners, the Partnership
shall, at any time and after payment of any
Partnership Expenses and
establishing reasonable reserves for
material anticipated obligations or
commitments of the Partnership, promptly
distribute cash or Securities to the
Partners, PROVIDED that no reserve shall be
established with respect to any
anticipated Clawback Amount other than
pursuant to Section 4.4. Upon a
distribution of Securities, the Securities
distributed shall be valued in
accordance with the valuation provisions of
the Fund Agreement, and such
Securities shall be deemed to have been
sold at such value and the proceeds of
such sale shall be deemed to have been
distributed to the Partners for all
purposes of this Agreement. Subject to
Sections 10.2 and 10.3, Securities
distributed in kind shall be distributed in
proportion to the aggregate amounts
that would be distributed to each Partner
pursuant to this Section 4.3, such
aggregate amounts to be estimated in the
good faith judgment of the General
Partners. The Partnership may cause
certificates evidencing any Securities to be
distributed to be imprinted with legends as
to such restrictions on Transfer as
it may deem necessary or appropriate,
including legends as to applicable United
States federal or state or non-U.S.
securities laws or other legal or
contractual restrictions, and may require
any Partner to which Securities are to
be distributed to agree in writing (I) that
such Securities will not be
transferred except in compliance with such
restrictions and (II) to such other
matters as may be deemed necessary or
appropriate. Notwithstanding the
foregoing, at the request of any Partner,
the General Partners may cause the
Partnership to dispose of any property that
would be distributed to such Partner
pursuant to this Section and distribute the
net proceeds of such disposition to
such Partner and such Partner shall bear
all out-of-pocket expenses incurred to
effect such sale; PROVIDED, however, that
the General Partners shall only be
required to effect such disposition to the
extent such distribution (A) would
cause such Partner to own or control in
excess of the amount of such property
that it may lawfully own, (B) would subject
such Partner to any material filing
or regulatory requirement, or would make
such filing or requirement more
burdensome, or (C) would violate any
applicable legal or regulatory restriction,
and PROVIDED, FURTHER, that any taxable
income, gain, loss or deduction
recognized by the Partnership in connection
with the disposition of such
property shall be allocated only to such
Partner requesting to receive proceeds
instead of property and PROVIDED, FINALLY,
that such Partner shall be treated
for all other purposes of this Agreement as
if such property had been
distributed as contemplated by the second
sentence of this Section 4.3(a).
(b) MAKING OF DISTRIBUTIONS. Distributions received from the
Fund
shall be distributed promptly to the
Partners but in any event within 120 days
after receipt by the Partnership. Except as
otherwise provided herein,
distributions shall be made as follows:
(i) NON-CONSUMMATED INVESTMENTS AND EXTRA DRAWDOWN AMOUNTS.
Amounts returned from the Fund pursuant to section 5.3 of the
Fund
Agreement (non-consummated investments and extra drawdown amounts)
in
respect of any Portfolio Investment or Bridge Financing (or
proposed
Portfolio Investment or Bridge Financing) shall be distributed to
the
Partners in proportion to the Capital Contributions of the
Partners
used (or intended to be used) to fund such Portfolio Investment
or
Bridge Financing.
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(ii) PARTNERSHIP'S CAPITAL INVESTMENT. Distributions
received from the Fund with respect to any Portfolio Investment
that
were apportioned and distributed to the Partnership based on
the
Partnership's Sharing Percentage (as defined in the Fund
Agreement)
for such Portfolio Investment pursuant to section 6.3 of the
Fund
Agreement (including distributions received from the Fund pursuant
to
section 6.5 of the Fund Agreement (tax distributions) or
section
13.2(a) of the Fund Agreement (liquidating distributions) that
are
attributable to the Partnership's Sharing Percentage with respect
to
any Portfolio Investment) shall be distributed among the Partners
in
proportion to their Capital Contributions used to fund such
Portfolio
Investment. Distributions received from the Fund with respect to
any
Bridge Financing, or investment other than a Portfolio
Investment,
pursuant to section 6.4 (including distributions received from
the
Fund pursuant to section 13.2(a) of the Fund Agreement
(liquidating
distributions) that are attributable to any Bridge Financing or
any
investment other than a Portfolio Investment) of the Fund
Agreement
shall be distributed among the Partners in proportion to their
Capital
Contributions used to fund such Bridge Financing or investment.
(iii) PARTNERSHIP'S CARRIED INTEREST. Subject to Section
4.4, distributions received from the Fund with respect to a
Portfolio
Investment pursuant to section 6.3(c) or (d) of the Fund
Agreement
(the Partnership's carried interest with respect to such
Portfolio
Investment) (including distributions received from the Fund
pursuant
to section 6.5 of the Fund Agreement (tax distributions) or
section
13.2(a) of the Fund Agreement (liquidating distributions) that
are
attributable to the Partnership's right to receive
distributions
pursuant to section 6.3(c) or (d) of the Fund Agreement with
respect
to such Portfolio Investment) shall be distributed (A) 1% to GP
III,
(B) 49% to M&M Vehicle, L.P. and (C) 50% to the Partners (other
than
GP III) with positive balances in their Memo Accounts
(determined
after giving effect to Section 3.2(b)(i) and 3.2(b)(ii)(A) with
respect to such Portfolio Investment but before giving effect
to
Section 3.2(b)(ii)(B) with respect to such Portfolio Investment)
PRO
RATA in accordance with, and to the extent of, their respective
positive balances in their Memo Accounts, PROVIDED that (1) the
amount
distributed to M&M Vehicle, L.P. pursuant to clause (C) shall
be
reduced, but not below zero, by the aggregate Preference Amounts
of
all Additional Partners indicated on the Partnership Register as
being
subject to the provision for Preference Amounts and (2) the
amount
distributed to each Additional Partner indicated on the
Partnership
Register as being subject to the provision for Preference
Amounts
shall be increased by an amount equal to the product of (X) the
amount
described in clause (1) and (Y) the quotient obtained by dividing
such
Additional Partner's Preference Amount by the aggregate
Preference
Amounts of all Additional Partners, PROVIDED, HOWEVER that the
aggregate amount distributed to Additional Partners pursuant to
clause
(2) shall not exceed the aggregate amount previously distributed
or
currently distributable to M&M Vehicle, L.P. pursuant to clause
(C)
(determined without giving effect to the first proviso of this
Section
4.3(b)(iii)).
(iv) OTHER DISTRIBUTIONS. Distributions of amounts not
described in paragraphs (i) through (iii) above shall be
distributed
among the Partners as equitably determined by the General
Partners.
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The General Partners' good faith determination as to whether
amounts
are described in paragraph (i), (ii), (iii)
or (iv) of this Section 4.3, shall,
absent manifest error, be final and binding
on all Partners.
4.4 HOLDBACK FOR TIER 2 PARTNERS PENDING DISSOLUTION OF THE
PARTNERSHIP. Notwithstanding Section
4.3(b), the General Partners may, in their
sole discretion, withhold from any
distribution to a Tier 2 Partner pursuant to
Section 4.3(b)(iii) an amount equal to the
difference between (A) up to 50% of
the amount that would otherwise be
distributed and (B) an amount intended to
enable such Tier 2 Partner to discharge its
U.S. federal, state and local income
tax liabilities arising from allocations
attributable to the amount described in
clause (a) as determined by the General
Partners in their reasonable discretion.
Any amount withheld from a Tier 2 Partner
pursuant to this Section 4.4 shall be
placed in a separate account (a "HOLDBACK
ACCOUNT") maintained separately on the
books of the Partnership until such time as
(I) the Partnership is dissolved
pursuant to Article X, at which time such
amount shall be distributed to such
Tier 2 Partner or (II) the General Partners
determine in their sole discretion
that the amount in such Holdback Account
exceeds the amount that can reasonably
be expected to be necessary to fund such
Tier 2 Partner's share of any Clawback
Amount, at which time the excess shall be
distributed to such Tier 2 Partner.
Any amount placed in a Holdback Account
with respect to such Tier 2 Partner
shall be invested by the General Partners
in investments selected by such Tier 2
Partner within investment categories
specified by the General Partners and the
income earned thereon shall be distributed
quarterly to such Tier 2 Partner. Any
distribution to a Tier 2 Partner pursuant
to this Section 4.4 shall also be
treated as a distribution pursuant to
Section 4.3(b)(iii) for all purposes of
this Agreement, including without
limitation Section 4.5.
4.5 RETURN OF DISTRIBUTIONS. If and to the extent that the
Partnership
is obligated under section 13.2(b) of the
Fund Agreement to contribute to the
Fund all or a portion of the distributions
received by the Partnership from the
Fund (the amount of such required
contribution, the "CLAWBACK AMOUNT"), each
Partner shall be required to fund a portion
of the Clawback Amount in an amount
equal to the excess, if any, of (A) the
aggregate amount distributed or treated
as distributed to such Partner pursuant to
Section 4.3(b)(iii) over (B) the
amount that would have been distributed to
such Partner pursuant to Section
4.3(b)(iii) if all distributions pursuant
to Section 4.3(b)(iii) were made in a
single distribution pursuant to Section
4.3(b)(iii) on the date that the
Partnership is obligated to contribute the
Clawback Amount to the Fund. Each
Tier 2 Partner's obligation under this
Section 4.5 shall first be satisfied from
such Tier 2 Partner's Holdback Account
established pursuant to Section 4.4, if
any. Each Partner shall make contributions
to the Partnership in satisfaction of
its obligation under this Section 4.5 (or
in the case of a Tier 2 Partner, the
remainder of such obligation). If any Tier
2 Partner fails to contribute when
due any portion of such Tier 2 Partner's
obligation to contribute amounts in
excess of amounts in such Tier 2 Partner's
Holdback Account or Accounts under
this Section 4.5, GP III shall make a
contribution to the Partnership equal to
such unpaid contribution; if GP III has
made any such contribution, any amounts
recovered from such Tier 2 Partner pursuant
to the next succeeding sentence
shall be distributed entirely to GP III.
Notwithstanding the foregoing, a
Partner's obligation to make contributions
to the Partnership under this Section
4.5 shall survive the dissolution,
liquidation, winding up and termination of
the Partnership, and for purposes of this
Section 4.5, the Partnership and the
General Partners may pursue and enforce all
rights and remedies it and they may
have against each Partner under this
Section 4.5, including instituting a
lawsuit to collect such contribution with
interest from the
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date such contribution was required to be
paid under this Section 4.5 calculated
at a rate equal to the Prime Rate plus two
percentage points per annum (but not
in excess of the highest rate per annum
permitted by law). Notwithstanding
anything in this Section 4.5 to the
contrary, a Partner's liability to make
contributions to the Partnership under this
Section 4.5 shall not exceed the
aggregate amount of all distributions
received or deemed to have been received
by such Partner pursuant to Section
4.3(b)(iii) (excluding distributions
received or deemed to have been received
pursuant to Section 4.3(b)(iii) that
are attributable to such Partner's share of
distributions received from the Fund
pursuant to section 6.5 of the Fund
Agreement (tax distributions)). If the
Clawback Amount exceeds the aggregate
amount of contributions to be made by the
Partners pursuant to this Section 4.5, as
limited by the preceding sentence, the
Partners (excluding GP III but including
M&M Vehicle, L.P. only to the extent
its obligation under this Section 4.5 is
attributable to distributions in
respect of Points held by it) who are not
limited by the preceding sentence
shall be required to fund such excess PRO
RATA in proportion to their
obligations as determined pursuant to the
first sentence of this Section 4.5,
but subject always to the preceding
sentence and with reapplication of this
sentence as necessary. The provisions of
this Section 4.5 are intended solely to
benefit the Partnership and, to the fullest
extent permitted by applicable law,
shall not be construed as conferring any
benefit upon any creditor of the
Partnership (and no such creditor shall be
a third party beneficiary of this
Agreement), and no Partner shall have any
duty or obligation to any creditor of
the Partnership to make any contributions
to the Partnership.
4.6 LIMITATIONS ON DISTRIBUTIONS. Notwithstanding any provisions
to
the contrary contained in this Agreement,
(A) the Partnership shall not make a
distribution to any Partner on account of
such Partner's interest in the
Partnership if such distribution would
violate the Partnership Law or other
applicable law and (b) holdings of Points
by, and Distributions made to, any
Partner and its Estate Partner shall be
apportioned between such Partner and
such Estate Partner in proportion to their
Capital Commitments.
4.7 WITHHOLDING. Notwithstanding any other provision of this
Agreement, each Partner hereby authorizes
the Partnership to withhold and to pay
over, or otherwise pay, any withholding or
other taxes payable by the
Partnership (pursuant to the Code or any
provision of United States federal,
state or local or non-U.S. tax law) with
respect to such Partner or as a result
of such Partner's status as a Partner
hereunder. If and to the extent that the
Partnership shall be required to withhold
or pay any such withholding or other
taxes, such Partner shall be deemed for all
purposes of this Agreement
(including without limitation Section
4.3(b)(iii)) to have received a payment
from the Partnership as of the time such
withholding or other tax is required to
be paid, which payment shall be deemed to
be a distribution with respect to such
Partner's interest in the Partnership to
the extent that such Partner (or any
successor to such Partner's interest in the
Partnership) would have received a
distribution but for such withholding. In
addition, if and to the extent that
the Partnership or the Fund receives a
distribution or payment from or in
respect of which tax was withheld, as a
result of (or attributable to) such
Partner's status as a Partner hereunder, as
determined by the General Partners,
such Partner shall be deemed for all
purposes of this Agreement (including
without limitation Section 4.3(b)(iii)) to
have received a distribution from the
Partnership as of the time such withholding
was paid. To the extent that any
such deemed payment under the preceding two
sentences exceeds the cash
distribution that such Partner would have
received but for such withholding, the
General Partners shall notify such Partner
as to the amount of such excess and
such Partner shall make a prompt
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payment to the Partnership of such amount
by wire transfer. The Partnership may
hold back from any distribution in kind
property having a Value equal to the
amount of the taxes withheld or otherwise
paid until the Partnership has
received such payment. If, pursuant to a
separate indemnification agreement or
otherwise, the Partnership shall indemnify
or be required to indemnify any
Covered Person against any claims,
liabilities or expenses of whatever nature
relating to such Covered Person's
obligation to withhold and to pay over, or
otherwise pay, any withholding or other
taxes payable by such Covered Person as
a result of any Partner's participation in
the Partnership, such Partner shall
pay to the Partnership the amount of the
indemnity paid or required to be paid,
except, in the case of claims, liabilities
or expenses that are penalties, to
the extent that it shall have been finally
judicially determined that such
penalties arose primarily from the fraud,
gross negligence or willful
misfeasance of such Covered Person. Unless
the General Partners determine
otherwise, the withholdings by the
Partnership referred to in this Section 4.7
shall be made at the maximum applicable
statutory rate under the applicable tax
law.
ARTICLE V
MANAGEMENT; VOTING
5.1 PARTNERS. Subject to Section 8.1, the Partnership shall consist
of
the General Partners and the Limited
Partners. Pursuant to Section 8.1, the
General Partners may admit additional
Partners from time to time.
5.2 THE GENERAL PARTNERS.
(a) GENERAL. The business and affairs of the Partnership shall
be
managed by the General Partners of the
Partnership from time to time. Except as
otherwise expressly provided herein, no
Limited Partner shall take part in the
management or control of the Partnership's
affairs, vote with respect to any
action taken or to be taken by the
Partnership (including, but not limited to,
merger or dissolution of the Partnership or
any amendment to this Agreement),
transact any business in the Partnership's
name or have the power to sign
documents for or otherwise bind the
Partnership.
(b) RESTRICTIONS ON THE PARTNERS. The Partners shall not: (I) do
any
act in contravention of any applicable law,
regulation or provision of this
Agreement or (II) possess Partnership
property for other than a Partnership
purpose. In addition, the General Partners
shall not admit any Person as a
Partner except as permitted in this
Agreement and the Partnership Law.
(c) ACTS OF THE GENERAL PARTNERS. (i) The act of a majority of
the
General Partners shall be the act of the
General Partners, except as otherwise
specifically provided by this Agreement,
(II) in the event that one or more of
the General Partners determine that
participation in a vote could constitute a
conflict of interest and therefore abstain
from participating in such vote, the
act of a majority of the General Partners
voting on such matter shall be the act
of the General Partners, whether or not all
or a majority of the voting General
Partners constitute a majority of the
General Partners, and (III) in the event
that a vote taken by the General
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Partners or the Tier 1 General Partners, as
the case may be, has resulted in a
tie vote among the General Partners or the
Tier 1 General Partners, as the case
may be, GP III shall be entitled to cast
the deciding vote that shall determine
the act of the General Partners, whether or
not all or a majority of the voting
General Partners (including GP III)
constitute a majority of the General
Partners.
(d) ACTIONS WITH RESPECT TO THE MANAGER. The removal or replacement
of
MMC Capital as the manager of the Fund
shall occur only upon the majority vote
of the General Partners, which majority
shall include, in any case, GP III.
(e) ACTIONS WITH RESPECT TO PORTFOLIO INVESTMENTS. Any
determination
or action required to be made or taken by
the Partnership with respect to the
acquisition, holding, disposition or
valuation of Portfolio Investments, in
connection therewith or to give effect
thereto, shall require the vote of a
majority of the members of the Investment
Committee.
(f) ACTION BY UNANIMOUS CONSENT OF THE GENERAL PARTNERS. The
unanimous
vote of the General Partners shall be
required to (I) dissolve the Partnership
pursuant to Section 10.1(b), or (II)
approve the merger or sale of substantially
all of the assets of the Partnership.
(g) APPOINTMENT OF GP III AGENTS. GP III hereby designates and
appoints each of: the Chairman and
President of GP III, the members of the Board
of Directors of GP III, and the Secretary
of GP III as agents of GP III (the
"CORPORATE AGENTS") to perform all of the
duties and functions of GP III under
this Agreement and as authorized persons
within the meaning of the Partnership
Law, PROVIDED that GP III has the sole
discretion to remove one or more of the
Corporate Agents with or without cause at
any time and to designate and appoint
one or more replacement Corporate Agents.
Any action undertaken by any of the
Corporate Agents in accordance with this
Agreement shall bind GP III.
5.3 ABILITY TO BIND THE PARTNERSHIP. Unless otherwise expressly
provided herein, each General Partner shall
have the authority to sign, in the
name and on behalf of the Partnership,
checks, orders, contracts, leases, notes,
drafts and other documents and instruments
in connection with the ordinary
course of the business of the Partnership,
commitments regarding the acquisition
or disposition of Portfolio Investments of
the Fund, conveyances of real estate,
documents evidencing the lending or
borrowing by the Partnership, and other
documents and instruments otherwise arising
outside the ordinary course of
business of the Partnership, PROVIDED that
any action that would bind the
Partnership with respect to amounts in
excess of $500,000 shall require the
consent of a majority of the General
Partners.
5.4 ACTIONS AND DETERMINATIONS OF THE PARTNERSHIP. Subject to
the
other provisions of this Agreement,
whenever this Agreement provides that a
determination shall be made or an action
shall be taken by the Partnership, such
determination or act may be made or taken
by the General Partners.
5.5 VOTING.
(a) Any action of the Partnership requiring the vote or assent of
more
than one of the General Partners under this
Agreement may be taken only upon
notice to each General Partner entitled to
vote thereon either personally, by
telephone, by mail, by facsimile, or by any
other means of communication
reasonably calculated to give notice; and
reasonable efforts shall be
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made to allow each General Partner entitled
to vote thereon to participate in a
vote on such matter.
(b) Except as expressly provided herein, on any matter that is to
be
voted on by the General Partners or all
Partners, as the case may be, the
General Partners or the Partners, as the
case may be, may take such action
without a meeting and without a vote, if a
consent or consents in writing,
setting forth the action so taken, shall be
signed and/or ratified by the
General Partners or the Partners, as the
case may be, having not less than the
minimum voting percentage or the requisite
number of the General Partners or the
Partners, as the case may be, that would be
necessary to authorize or take such
action at a meeting, PROVIDED, however,
that prior notice of the matter to be
voted on is given to all the General
Par
