DATE 2007 ----------------------------------- GCP EUROPE GENERAL PARTNERSHIP L.P. EMMANUEL TESONE FORM OF AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
EX-10.38
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file4.htm
FORM OF LIMITED PARTNERSHIP AGREEMENT
DATE 2007
-----------------------------------
GCP EUROPE GENERAL PARTNERSHIP L.P.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
FORM OF AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
FOR
GREENHILL CAPITAL PARTNERS EUROPE (EMPLOYEES) L.P.
Macfarlanes
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
CONTENTS
CLAUSE PAGE
1 Definitions 2
2 Establishment 14
2.1 Nature 14
2.2 Purpose 15
2.3 Name 15
2.4 Principal Place of Business 15
2.5 Commencement and Duration 15
2.6 Currency 16
2.7 Further Partners 16
2.8 The General Partner's Commitment and Initial Investments 19
2.9 Side Letters 20
2.10 Venture Capital Operating Company Requirements 20
3 Capital Contributions 21
3.1 Carried Interest Partner 21
3.2 Investors 21
3.3 Interest 21
3.4 Repayment 21
4 Loans 21
4.1 Investors 21
4.2 General Partner 23
4.3 Interest 23
4.4 Failure to Comply with Drawdown Notice 23
4.5 Repayment of the Loans 25
4.6 Key Executive Provisions 25
5 The Manager and the General Partner 26
5.1 Appointment of a Manager 26
5.2 Restriction on the Limited Partners 27
5.3 Authority and powers of the General Partner/Manager 27
5.4 Termination of the Manager's Agreement 31
5.5 Authority and Powers of the General Partner 31
5.6 Restrictions on the General Partner 32
5.7 Separate liabilities of the General Partner 32
5.8 Compliance with the Act and other laws 32
5.9 Expenses and Fees 33
5.10 Tax and Other Information and Withholding Taxes 34
5.11 Parallel Funds and Co-investment Agreement 35
5.12 Trade or Business Income 35
6 Partnership accounts, allocations and distributions 36
6.1 Partnership accounts 36
6.2 Allocation of debts, liabilities and obligations 37
6.3 Allocations of Income, Capital Gains and Capital Losses 37
6.4 Application of Cash 40
6.5 Distributions of Cash 42
6.6 Distributions in specie 42
6.7 Tax Credits 44
6.8 Drawings by the General Partner 44
6.9 Repayments of Carried Interest 45
7 Assignment of Interests or Shares and Resignation from the Partnership 46
7.1 Assignment of Interest of the General Partner and the Carried Interest Partner 46
7.2 Restriction on Assignment of Interest of Investors 46
7.3 Position of Substitute Investors 48
7.4 Assignment of Interests in Violation of this Clause 49
7.5 Resignation of General Partner 49
7.6 Expulsion of Investors 49
7.7 Withdrawal of Limited Partners 49
7.8 Termination of Employment 53
8 Meetings 53
9 Termination and Liquidation 55
9.1 Termination 55
9.2 Extension of Life of the Partnership 55
9.3 Continuation of the Partnership 55
9.4 Removal of the General Partner 56
9.5 Liquidation of Interests of Partners 56
10 Reports and Valuations 57
11 Miscellaneous 58
11.1 Non-exclusivity 58
11.2 Indemnities 59
11.3 Confidential Information 61
11.4 Variation of Partnership Agreement 63
11.5 Notices 64
11.6 Auditors 64
11.7 Changes in the Partnership 65
11.8 Excused Investors 65
11.9 Agreement Binding Upon Successors and Assigns 68
11.10 Value Added Tax 68
11.11 Execution in Counterpart 68
11.12 Service of Process 68
11.13 Co-Investment 68
11.14 Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ 69
11.15 Litigation 69
11.16 Governing Law 69
11.17 Tax Matters 69
The Schedules
I Subscription Agreement 71
II Form of Drawdown 105
III Investment Policy 106
ii
LIMITED PARTNERSHIP AGREEMENT
DATE 2007
PARTIES
1 GCP EUROPE GENERAL PARTNERSHIP L.P., whose principal place of business
is at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the "General
Partner")
2 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the
"Initial Partner")
RECITALS
A The Parties hereto established a limited partnership under the name
"▇▇▇▇▇▇▇▇▇ Capital Partners Europe (Employees) L.P." (the "Partnership")
for the purpose of raising a fund for investment in unquoted companies
in accordance with the Investment Policy. The Partnership will invest in
parallel with ▇▇▇▇▇▇▇▇▇ Capital Partners Europe, L.P. The Partnership
was established by an agreement dated 11 April 2007 (the "Original
Partnership Agreement").
B The Partnership was registered as a limited partnership in England under
the Limited Partnerships ▇▇▇ ▇▇▇▇ with registration number LP012088.
C The General Partner and the Initial Partner wish to restate and amend
the terms of the Original Partnership Agreement.
D GCP Europe General Partnership L.P., as general partner of the
Partnership, is responsible for the conduct and management of the
Partnership's business. The General Partner has appointed ▇▇▇▇▇▇▇▇▇
Capital Partners Europe LLP to manage and operate the Partnership.
▇▇▇▇▇▇▇▇▇ Capital Partners Europe LLP is authorised and regulated by the
FSA in the conduct of its designated investment business.
E The Initial Partner has subscribed or agreed to subscribe (pound)1 of
partnership capital in its capacity as Initial Partner. On the First
Closing Date, the Initial Partner shall transfer half of his Capital
Contribution to the General Partner.
F The General Partner may, in its sole discretion, subscribe as an
Investor for a Commitment in the Partnership at any time prior to the
Final Closing Date.
G A portion of the Commitments subscribed for by Investors at First
Closing will be used by the Partnership to acquire the Ironshore
Investment, at a price to be determined by the Manager pursuant to the
provisions of this Agreement.
H In addition to the Commitment of the General Partner, in its capacity as
an Investor, referred to in Recital F above (if any), the General
Partner shall make a Capital Contribution of (pound)62.33 in its
capacity as the Carried Interest Partner. The Capital Contribution of
the General Partner, in its capacity as the Carried Interest Partner,
shall be subject to adjustment in accordance with Clause 3.1.
I Unless it otherwise decides, acting in its sole discretion, the General
Partner shall restrict admission to the Partnership to Eligible
Employees and Eligible Family Members (and any entities formed for the
benefit of such persons). Upon acceptance by the General Partner of a
Subscription Agreement, properly signed
and delivered, persons determined by the General Partner to be eligible
investors shall become Limited Partners and be treated as parties to
this Agreement.
IT IS HEREBY AGREED by the General Partner and the Initial Partner that the
Original Partnership Agreement be replaced in its entirety and be superseded by
this Amended and Restated Partnership Agreement.
AGREEMENT
1 DEFINITIONS
1.1 In this Agreement (including the Recitals and the Schedules), unless the
context otherwise requires, the following words and expressions have the
meanings shown:-
ABORT COSTS: costs and expenses (which shall, for the avoidance of
doubt, include travel expenses) incurred in connection with Investment
proposals pursued by the Partnership which do not proceed to completion;
ACCOUNTING DATE: 31 December 2007 and 31 December in each year
thereafter or such other date as the General Partner may determine and
notify to the Limited Partners or (in the case of the final Accounting
Period of the Partnership) the date when the Partnership is terminated;
ACCOUNTING PERIOD: a period ending on and including an Accounting Date
and beginning on the commencement of the Partnership or on the day
following the preceding Accounting Date (as the case may require);
ACQUISITION COST: the aggregate of all acquisition costs of an
Investment together with any costs, duties (including stamp duties),
fees and expenses (which shall, for the avoidance of doubt, include
travel expenses) related to such acquisition payable by the Partnership;
ACT: the Limited Partnerships ▇▇▇ ▇▇▇▇ as amended and/or restated from
time to time and any successor legislation thereto;
ADMINISTRATIVE GUIDELINES: any administrative guidelines issued by any
governmental authority (whether or not such guidelines have the force of
law);
ADMISSION DATE: in respect of each Investor, the date of admission of
such Investor to the Partnership, or in the case of each ERISA Partner,
the date upon which such ERISA Partner is admitted to the Partnership
pursuant to Clause 2.10;
AGGREGATE PREFERRED RETURN: such amount, calculated on a daily basis
(from the date of drawdown of such Loan Commitment to the date of
repayment), and determined at the termination of the Partnership, as is
equal to 8% per annum (compounded annually on 31 December) on the amount
of the aggregate Loan Commitments drawn down from MD Limited Partners;
AGREEMENT: this limited partnership agreement (including for the
avoidance of doubt the schedules hereto), as amended from time to time;
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ASSOCIATE:
(a) if the person concerned is a body corporate:-
(i) the holding company of such person or a subsidiary of
such person or a subsidiary of any such holding company;
or
(ii) any other body corporate in which the person holds
directly or indirectly 50 per cent. or more of any class
of equity share capital; or
(iii) any director of such person.
(b) if the person concerned is a limited liability partnership:-
(i) any subsidiary of such person;
(ii) any other body corporate in which the person holds
directly or indirectly 50 per cent. or more of any class
of equity share capital; or
(iii) any member of such person.
(c) if the person concerned is a limited partnership:-
(i) the general partner of such person; or
(ii) if the general partner of such person is a body
corporate, any person who is an Associate of the general
partner within the meaning of (a) above.
(d) if the person concerned is an individual or a firm or other
unincorporated body:-
(i) any body corporate in which the person holds directly or
indirectly 50 per cent. or more of any class of equity
share capital; or
(ii) the spouse or any business partner of such person.
PROVIDED THAT, for the purposes of this Agreement, the Partnership shall
not be construed as an Associate of either the General Partner or the
Manager;
AUDITORS: such accountants of international repute as may be selected by
the General Partner pursuant to Clause 11.6 to be the auditors of the
Partnership;
AUTHORISED PERSON: a person who is an authorised person under Part IV of
the FSMA;
BUSINESS DAY: any day, other than a Saturday, Sunday or any other day on
which clearing banks in the City of London are not open for the conduct
of ordinary non-automated business;
CAPITAL: amounts reasonably determined by the General Partner in good
faith to be in the nature of capital and available for distribution by
the Partnership or (as the
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case may be) already distributed by the Partnership, including the value
attributed by the General Partner to any assets of the Partnership
distributed in specie;
CAPITAL CONTRIBUTION: in respect of each Partner, the amount shown (in
the absence of manifest error) as contributed to the capital of the
Partnership by such Partner in the books of the Partnership (such amount
being equal, in the case of an Investor, to 0.001% of its Commitment)
which shall not include any capital which has been returned to Investors
pursuant to Clauses 3.1, 4.4.3 and 6.4;
CAPITAL GAIN: the amount (if any) by which the Capital Proceeds of an
Investment, after deduction of Disposal Costs, exceed the Acquisition
Cost of that Investment (or the attributable part of the Acquisition
Cost in the case of a partial disposal) (and "Capital Gains" shall be
construed accordingly);
CAPITAL LOSS: the amount (if any) by which the Acquisition Cost (or the
attributable part of the Acquisition Cost in the case of a partial
disposal) exceeds the Capital Proceeds of an Investment after deduction
of the Disposal Costs of that Investment (and "Capital Losses" shall be
construed accordingly);
CAPITAL PROCEEDS: all cash or other proceeds received by the Partnership
in relation to the Realisation or part Realisation of an Investment and
reasonably determined by the General Partner to be in the nature of
capital;
CARRIED INTEREST PARTNER: GCP Europe General Partnership L.P. in its
capacity as the carried interest holder;
CLOSING DATE: any date prior to the Final Closing Date on which
Investors are admitted as Partners to the Partnership (other than
pursuant to a Transfer from an Existing Investor) or on which the
Commitment of an Existing Investor is increased;
THE CODE: the US Internal Revenue Code of 1986, as amended from time to
time;
CO-INVESTMENT AGREEMENT: any co-investment agreement to be entered into
by the Partnership, the Manager and the other Parallel Funds;
COMMITMENT: with respect to an Investor, means the amount agreed to be
committed by such Investor to the Partnership, comprising a Capital
Contribution of 0.001% and a Loan Commitment of 99.999% thereof (or, as
the context may require, the amount agreed to be committed by an
investor to a Parallel Fund);
DEFAULTING INVESTOR: shall have the meaning ascribed thereto in Clause
4.4.1;
DISPOSAL COSTS: the aggregate amount of all costs, duties, fees and
expenses incurred in accordance with the terms of this Agreement in the
Realisation (or partial Realisation) of an Investment Interest;
DISTRIBUTIONS: distributions in cash or in specie to the Partners
pursuant to Clauses 6.5 and 6.6 (and "Distribution" and "Distributed"
shall be construed accordingly);
DRAWDOWN NOTICE: a written notice of drawdown from the General Partner
to the Investors, issued pursuant to the terms of this Agreement and
substantially in the form set out in Schedule II;
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ELIGIBLE EMPLOYEE: means an individual who is a current or former
employee, officer, director, senior adviser or consultant of Greenhill
or an Associate and is determined by the General Partner to be eligible
(which, for the avoidance of doubt, may require the relevant individual
to be an "accredited investor" under Rule 501(a) of Regulation D of the
Securities Act);
ELIGIBLE FAMILY MEMBER: means a spouse, parent, child, spouse of child
or grandchild of an Eligible Employee;
ERISA: the United States Employee Retirement Income Security Act of
1974, as amended;
ERISA PARTNER: a Limited Partner that is an employee benefit plan
subject to Title I of ERISA or an entity whose underlying assets include
"plan assets" within the meaning of ERISA and Regulation 29 CFR Section
2510.3-101 by reason, of investment in the entity by an employee benefit
plan subject to Title I of ERISA and including any plan established and
maintained by a state or governmental agency or any of its political
subdivisions or any agency or instrumentality thereof who elects to be
treated as an ERISA Partner pursuant to its Subscription Agreement;
EXCUSED INVESTMENT: shall have the meaning ascribed thereto in Clause
11.8.3;
EXCUSED INVESTOR: means any Limited Partner which the General Partner
has determined is to be excused from participation in an Investment
pursuant to the provisions of Clause 11.8.1;
EXISTING INVESTORS: shall have the meaning attributed thereto in Clause
2.7.2.2;
FINAL CLOSING DATE: the final Closing Date, as determined by the General
Partner, for receipt of applications from persons wishing to become
Investors, which shall not be later than twelve months after the First
Closing Date;
FIRST CLOSING DATE: the Closing Date upon which the first Investor is
admitted to the Partnership or any Parallel Fund;
FIRST DRAWDOWN DATE: the First Closing Date or such other date as the
General Partner may determine;
FSA: the Financial Services Authority of ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ or any successor regulatory organisation;
FSA RULES: the rules and guidance issued by FSA from time to time and
for the time being in force (as varied by any waivers or dispensations
granted by FSA and applicable to the Manager);
FSMA: the Financial Services and Markets ▇▇▇ ▇▇▇▇ as amended from time
to time and any successor legislation thereto;
GENERAL PARTNER: GCP Europe General Partnership L.P. or any replacement
general partner for the time being of the Partnership;
GENERAL PARTNER GP: GCP Europe General Partner Limited;
GENERAL PARTNER'S SHARE: the amount referred to in Clause 6.3.2;
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GOVERNMENT OR LOCAL AUTHORITY PLAN: a pension or retirement plan or
trust established by any government or local authority or other public
body or any of its political subdivisions or any agency or instrument
thereof for the benefit of its employees;
GOVERNMENT OR LOCAL AUTHORITY PLAN RESTRICTIONS: with respect to any
Government or Local Authority Plan, those laws, rules, regulations,
interpretations and investment policies which apply to such Government
or Local Authority Plans;
GREENHILL: means ▇▇▇▇▇▇▇▇▇ & Co., Inc.;
GREENHILL EUROPE: ▇▇▇▇▇▇▇▇▇ & Co Europe Limited;
INCOME: all cash received by the Partnership and reasonably determined
by the General Partner to be in the nature of income;
INDEMNIFIED PERSON: means each of the General Partner, the General
Partner GP, the Manager and their Associates, and the directors,
officers, members, partners, employees, shareholders, agents and
representatives of the General Partner, the General Partner GP, the
Manager and their Associates;
INITIAL PARTNER: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇;
INTEREST: the interest of a Partner in the Partnership and all other
rights which such Partner has in the Partnership, including its Share
and its rights to vote and inspect the books and records of the
Partnership;
INVESTEE COMPANY: a body corporate which is the subject of an
Investment;
INVESTMENT: an investment acquired by the Partnership in accordance with
the Investment Policy (whether for consideration in cash or the
securities or assets of existing Investments or otherwise) including but
not limited to shares, debentures, loan stock or other securities of and
loans (whether secured or unsecured) made to any body corporate or other
entity;
INVESTMENT COMMITTEE: the investment committee of the Manager which
shall initially be comprised of the Key Executives;
INVESTMENT PERIOD: the period commencing on the First Closing Date and
ending on the earliest of:
(a) the fifth anniversary of the Final Closing Date; or
(b) the date determined pursuant to the provisions of Clause 4.6; or
(c) the date on which the Loan Commitments have been fully drawn
down and no further undrawn Loan Commitments can arise; or
(d) at the discretion of the General Partner, the date on which at
least 66 2/3% of the Loan Commitments have been drawn down or
are committed or allocated to Investments (and provided that
such Loan Commitments will not be available for further
drawdowns); or
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(e) at the discretion of the General Partner, the date on which the
General Partner determines that applicable laws or regulations
make it necessary to terminate the Investment Period; or
(f) such date as may be agreed by the General Partner and the
Investors by an Investors' Ordinary Consent;
but in any event, ending no later than the investment period of any
Parallel Funds;
INVESTMENT POLICY: the investment objective and policy of the
Partnership, as set out in Schedule III;
INVESTMENT REPAYMENT POINT: means, in relation to any Investment, the
point where carried interest becomes distributable to the Carried
Interest Partner pursuant to Clause 6.4;
INVESTOR: any person who subscribes for a Commitment in the Partnership
either pursuant to this Agreement or by signing a Subscription Agreement
substantially in the form set out in Schedule I and referred to in
Clause 2.7 and any Substitute Investor (and including, for the avoidance
of doubt, the General Partner in respect of its Commitment, but not in
respect of its interest as the Carried Interest Partner or in its
capacity as General Partner);
INVESTORS' ORDINARY CONSENT: the written consent (which may consist of
one or more documents in like form each signed by one or more of the
Investors) of such of the Investors and investors in the other Parallel
Funds (other than the General Partner except where the provisions of
this Agreement specifically provide otherwise, in which case the General
Partner shall be entitled to exercise its votes in respect of its
Commitment) whose aggregate Commitments represent over 50% of the
aggregate amount of Commitments subscribed by all of the Investors in
the Partnership and investors in the other Parallel Funds (other than
the General Partner except where the provisions of this Agreement
specifically provide otherwise) at the time of the request for such
consent (and, for the avoidance of doubt, an Investor shall be entitled
to split its Commitment for these purposes so that an Investor may
consent in respect of part of its Commitment and withhold consent in
respect of the balance);
INVESTOR'S PROPORTIONATE SHARE: means in relation to any Investment in
which an Investor is participating, the proportionate share of the
Investment attributable to such Investor, which shall be calculated by
reference to the Loan Commitment drawn down from such Investor to fund
the Acquisition Costs in respect of that Investment as against the
aggregate Loan Commitments drawn down from Investors to fund the
Acquisition Costs in respect of that Investment;
INVESTORS' SPECIAL CONSENT: the written consent (which may consist of
one or more documents in like form each signed by one or more of the
Investors) of such of the Investors and investors in the other Parallel
Funds (other than the General Partner, except where the provisions of
this Agreement specifically provide otherwise, in which case the General
Partner shall be entitled to exercise its votes in respect of its
Commitment) whose aggregate Commitments represent over 75% of the
aggregate amount of Commitments subscribed by all of the Investors in
the Partnership and investors in the other Parallel Funds (other than
the General Partner, except where the provisions of this Agreement
specifically provide otherwise) at the time of the request for such
consent (and, for the avoidance of
7
doubt, an Investor shall be entitled to split its Commitment for these
purposes so that an Investor may consent in respect of part of its
Commitment and withhold consent in respect of the balance);
IRONSHORE INVESTMENT: means 3,000,000 Ordinary Shares of Ironshore Inc.
held by Greenhill Europe;
KEY EXECUTIVES: ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and any
person approved by the Investors (by way of an Investors' Ordinary
Consent) as a Key Executive in addition to or in substitution for
another Key Executive and provided that on the approval of any such
additional Key Executive, they shall be appointed to the Investment
Committee of the Manager;
KEY MAN EVENT: shall have the meaning ascribed thereto in Clause 4.6;
LIMITED PARTNER: each of the Investors (other than the General Partner
in respect of its Commitment);
LISTED SECURITIES: any securities which have been or are admitted to
Listing;
LISTING: the admission of the whole or any part of the securities of an
Investee Company to a Recognised Investment Exchange or Designated
Investment Exchange (as such terms are defined in the glossary of the
FSA Handbook in force from time to time) or which in the reasonable
opinion of the General Partner is an appropriate market (which, for the
avoidance of doubt, shall include AIM);
LOANS: in respect of each Investor, the aggregate amount of the loans
(if any) advanced to the Partnership by such Investor pursuant to Clause
4;
LOAN COMMITMENT: in respect of each Investor, the Loans (if any)
advanced or agreed to be advanced by such Investor pursuant to Clause 4
(whether or not such Loan has been repaid to the Investor in whole or in
part) being equal to 99.999% of such Investor's Commitment;
MANAGEMENT AGREEMENT: the agreement between the General Partner and the
Manager, appointing the Manager as manager of the Partnership;
MANAGER: ▇▇▇▇▇▇▇▇▇ Capital Partners Europe LLP or its successor for the
time being appointed as manager of the Partnership in accordance with
Clause 5.1;
MD LIMITED PARTNER: means a Limited Partner who, at the time of
subscribing for a Commitment in the Partnership, is a Managing Director
of Greenhill or an Eligible Family Member of a Managing Director (or, if
applicable, any other Associate of Greenhill which the General Partner
may determine and provided that in the event that the Associate is an
entity which does not have Managing Directors, the General Partner shall
be entitled, in its sole discretion (but subject to any applicable laws
to the contrary), to determine whether the employee, officer or member
of such entity shall have the status of a Managing Director for the
purposes of this Agreement);
NET CAPITAL GAINS: for any period, the amount (if any) by which the
aggregate Capital Gains exceed the aggregate Capital Losses;
8
ONGOING EXPENSES: the reasonable and proper costs and expenses of the
Partnership being:-
(i) the costs of Investor meetings and of printing and circulating
reports and notices (including the costs of providing tax
reporting information) to Investors;
(ii) all introduction and similar fees;
(iii) legal fees and expenses and any litigation costs;
(iv) accounting, auditors' and valuers' fees and expenses;
(v) fees and expenses incurred in connection with tax advisory
services or with the preparation of tax reports;
(vi) any fees and expenses incurred in relation to the administration
of the Partnership;
(vii) bank charges and borrowing costs;
(viii) custodians' fees and expenses;
(ix) external consultants' fees and expenses;
(x) costs and expenses (including all stamp duties and professional
fees) of identifying, evaluating, negotiating, acquiring,
holding, monitoring and disposing of Investments not covered by
fees received by the General Partner or the Manager; and
(xi) costs of providing insurance for the personnel of the General
Partner, the Manager or any of their Associates in their roles
as directors of Investee Companies;
in each case together with any VAT thereon to the extent due but
excluding, for the avoidance of doubt, overheads of the General Partner
or of the Manager including, without limitation, remuneration and
expenses paid to their employees, rent, utilities and marketing
expenditure and subsistence costs;
PARALLEL FUNDS: the Partnership and any additional limited partnerships
established under agreements containing substantially similar commercial
terms to this Agreement and formed with the intention of investing
alongside the Partnership;
PARTICIPATING INVESTOR: has the meaning given in Clause 11.8.3;
PARTNER: the General Partner and/or all or any of the Limited Partners,
as the case may require;
PARTNERSHIP: ▇▇▇▇▇▇▇▇▇ Capital Partners Europe (Employees) L.P., being
the limited partnership established by the Original Partnership
Agreement, the activities and operation of which shall be governed by
the terms and conditions of this Agreement as amended and/or restated
from time to time;
PARTNERSHIP ASSETS: all of the assets of the Partnership;
9
PLAN ASSETS REGULATIONS: has the meaning given in Clause 2.10;
PORTFOLIO: all Investments, money, assets or borrowings for the time
being held by or to the order of the Partnership and managed by the
Manager under the Management Agreement;
PREFERRED RETURN: shall have the meaning ascribed thereto in Clause
6.4.7;
PRELIMINARY EXPENSES: the reasonable and proper costs and expenses
incurred in the establishment of the Partnership being:-
(i) accountancy costs and fees;
(ii) legal costs and fees;
(iii) tax advisory costs and fees;
(iv) all document preparation, printing and postage costs;
(v) costs of distribution and placing of the Commitments;
(vi) marketing costs and fees; and
(vii) travel costs and expenses;
in each case together with any VAT thereon to the extent due but
excluding, for the avoidance of doubt, any fees or commissions payable
to placement agents, brokers and itermediaries, which shall be borne by
the General Partner;
PRIVATE PLACING MEMORANDUM: the private placement memorandum a draft of
which was issued in February 2007 and a supplement to which was issued
in May 2007 relating to the placing of Commitments in the Partnership
and any Parallel Funds and any supplement thereto;
REALISATION: the occurrence of any of the following events in relation
to an Investment (or portion thereof):-
(i) the receipt of consideration and distribution in cash or the
receipt of consideration and distribution in specie of any
securities of a capital nature; or
(ii) the unconditional completion of an agreement for the sale of the
whole or any part of an Investment (save that where the
consideration for such sale is wholly comprised of securities of
a company or, where the consideration for such sale is comprised
partly of securities of a company and partly of cash, in
relation to that part of the consideration comprised of
securities, there shall be no Realisation for the purposes of
this sub-paragraph (ii)); or
(iii) the receipt of any deferred consideration (other than that of an
income nature) or the release of a provision made by the General
Partner in either case arising from a previous Realisation of
the whole or any part of an Investment; or
10
(iv) at the discretion of the General Partner, the redemption of any
securities of a company which is the subject of an Investment
(other than any redemption of such securities which is made
solely in connection with any other event constituting a
Realisation); or
(v) the winding up or dissolution of any company in which an
Investment is held;
and "REALISED" shall be interpreted accordingly.
PROVIDED THAT to the extent that consideration is received in connection
with a reorganisation, recapitalisation or other similar transaction
(and, if the consideration is in the form of cash, such consideration is
not required to be reinvested in the Investee Company in accordance with
the terms of such reorganisation, recapitalisation or other similar
transaction), the General Partner may deem such an event not to be a
Realisation and such consideration shall be treated as an Investment in
substitution for (or in addition to) the original Investment;
RECURRING EXCUSED INVESTOR: means a Limited Partner which is an Excused
Investor in respect of three or more Drawdown Notices (whether or not
consecutive) and which the General Partner determines in its reasonable
discretion shall be treated as a Recurring Excused Investor (provided
that, for the avoidance of doubt, an Investor shall not be a Recurring
Excused Investor where the Excused Investments relate to the same
Investee Company);
RELEVANT ADMISSION DATE: shall have the meaning attributed thereto in
Clause 2.7.2.1;
RELEVANT DRAWDOWNS: shall have the meaning attributed thereto in Clause
2.7.2.2;
RELEVANT PERIOD: a period starting on the commencement of the
Partnership and ending on 30 June 2007 and thereafter a period
commencing on the day following the end of the previous Relevant Period
and ending on the following 30 June or 31 December (whichever is the
earlier);
RETIREMENT: means termination of employment on or after the date the
relevant Limited Partner has: (i) attained age 65 and completed at least
two years of service following ▇▇▇▇▇▇▇▇▇'▇ initial public offering; (ii)
completed at least twelve years of service as a managing director of
Greenhill or its predecessors; or (iii) has completed at least twenty
years of service with Greenhill or its predecessors and, for the
purposes of this definition, references to Greenhill shall, where the
context permits, include references to any applicable Associate;
SECURITIES ACT: the US Securities Act of 1933, as amended;
SHARE: the financial share of a Partner in the profits of the
Partnership, comprising all or any part of such Partner's entitlement
under this Agreement to:
(a) its share of the profits, including Capital Gains and Income, of
the Partnership and the right to repayment of outstanding Loan
(if any) and on termination of the Partnership, to the return of
its Capital Contribution; and
11
(b) its share of the Partnership Assets upon the dissolution of the
Partnership and, for the purposes of ascertaining that share,
its entitlement to an account as from the date of the
dissolution
but excluding any entitlement to interfere in the management or
administration of the Partnership's business or affairs, or to require
any accounts of the partnership's transactions or to inspect the
Partnership's books;
SIDE LETTER: an amendment or variation to the terms of this Agreement
(or the limited partnership agreement governing any other Parallel Fund)
which is legally binding on the General Partner and which is entered
into for the benefit of an Investor or an investor in a Parallel Fund;
STATE: any of the states comprising the US;
STERLING: the official currency of the United Kingdom;
SUBSCRIPTION AGREEMENT: the subscription agreement substantially in the
form set out in Schedule I to be entered into by a prospective investor
pursuant to which it applies to become a Limited Partner in the
Partnership;
SUBSEQUENT INVESTOR: shall have the meaning attributed thereto in Clause
2.7.2.1;
SUBSTITUTE INVESTOR: a person admitted pursuant to Clause 7 as an
Investor by virtue of a Substitution or Transfer;
SUBSTITUTION: the event of a person becoming the successor entity to an
Investor in accordance with the terms of this Agreement, and thereby
becoming the successor to all, or part of, the rights and liabilities of
such Investor in respect of such Investor's Interest in the Partnership;
SUCCESSOR FUND: shall mean any fund formed pursuant to the provisions of
Clause 11.1.4;
SUSPENSION PERIOD: a period during which the General Partner is not
allowed to draw down Loans from Investors, other than in the
circumstances set out in Clause 4.6.1.3;
TAX CREDITS: has the meaning ascribed thereto in Clause 6.7;
TEMPORARY INVESTMENTS: any Investment Realised in whole or in part
within 18 months of the acquisition of the Investment by the Partnership
(and for these purposes the date of acquisition will be the date on
which the Investment is legally or beneficially transferred and held for
the account of the Partnership), which shall include, but not be limited
to, Underwritten Investments (provided that the syndication of such
Underwritten Investments occurs within 18 months of such Investment
being made);
TERMINATION ACCOUNTING PERIOD: shall have the meaning ascribed thereto
in Clause 5.9.4;
TOTAL COMMITMENTS: the aggregate amount of all Commitments to the
Partnership from time to time (or, as the context may require, the
aggregate amount of all Commitments to this Partnership and all Parallel
Funds);
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TRANSACTION FEES: means any of the following which are paid to the
General Partner or, if applicable, the Manager:
(i) all advisory or monitoring fees payable by an Investee Company
which are directly referable to the Partnership's Investment in
an Investee Company;
(ii) all break fees payable in connection with a proposed investment
which does not proceed to completion;
(iii) all directors' fees and benefits payable in connection with the
appointment of a director or observer to the board of directors
of an Investee Company;
(iv) all underwriting fees payable in connection with the
underwriting of Investments; and
(v) all other fees, commissions and amounts including arrangement
fees and exit fees which are directly referable to the
Partnership's Investment in an Investee Company;
PROVIDED THAT Transaction Fees will not include compensation paid to
Greenhill and/or its Associates, including, without limitation:
investment banking fees; investment advisory fees; fees in connection
with restructurings and mergers and acquisitions; underwriting and
placement fees and fees in respect of other services;
TRANSFER: any sale, assignment, transfer, exchange, pledge, encumbrance
or other disposition of any Investor's Interest in the Partnership;
US: shall have the meaning ascribed thereto in Appendix IV to Schedule
I;
US INVESTMENT COMPANY ACT: US Investment Company Act of 1940, as
amended;
US INVESTOR: any Investor which is a US Person;
US PERSON: shall have the meaning ascribed thereto in Appendix IV to
Schedule I;
UNDERWRITTEN INVESTMENT: any Investment in an Investee Company made with
a view to syndication provided that such syndication is anticipated
within 18 months of the making of such Investment;
UNREALISED INVESTMENT: any Investment which has not been the subject of
a Realisation;
VALUATION PROCEDURES: the basis of valuation of Investments being the
basis set out in the valuation guidelines contained in the
"International Private Equity and Venture Capital Valuation Guidelines"
published in March 2005 (as amended, supplemented or replaced from time
to time);
VALUE: means (except where otherwise expressly stated) in relation to
any Investment, such valuation to be determined by the General Partner
acting in its reasonable discretion and in good faith in accordance with
the Valuation Procedures;
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VAT: United Kingdom value added tax or any other value added tax or
sales tax applicable in the United Kingdom.
1.2 In this Agreement a company is a "subsidiary" of another company, its
"holding company", if that other company -
1.2.1 holds a majority of the voting rights in it, or
1.2.2 is a member of it and has the right to appoint or remove a majority of
its board of directors, or
1.2.3 is a member of it and controls alone or pursuant to an agreement with
other shareholders or members a majority of the voting rights in it, or
1.2.4 if it is a subsidiary of a company which is itself a subsidiary of that
other company
and "subsidiaries" and "holding companies" in this Agreement are to be
construed accordingly and "group" means all subsidiaries and holding
companies of a company and all subsidiaries of any holding company.
1.3 References to the parties, the Recitals, Clauses and the Schedules are
respectively to the parties, the Recitals, Clauses and Schedules of and
to this Agreement.
1.4 Any reference to a statutory provision shall include any subordinate
legislation made from time to time under that provision.
1.5 Any reference to a statutory provision or any regulation under a
statutory provision shall include that provision or regulation as from
time to time modified or re-enacted whether before or after the date of
this Agreement so far as such modification or re-enactment applies or is
capable of applying to any transactions entered into prior to the date
hereof and (so far as liability thereunder may exist or can arise) shall
include also any past statutory provision or regulation under a
statutory provision (as from time to time modified or re-enacted) which
such provision or regulation has directly or indirectly replaced.
1.6 The Interpretation Act 1978 shall apply to this Agreement in the same
way as it applies to an enactment.
1.7 In this Agreement, any reference to a "person" or "persons" includes
natural persons, partnerships, companies, bodies corporate,
associations, organisations, governments, states, foundations and trusts
(in each case whether or not having separate legal personality).
2 ESTABLISHMENT
2.1 NATURE
2.1.1 The Partnership is a limited partnership registered in England pursuant
to the Act.
2.1.2 Any change which may occur in the particulars to be furnished pursuant
to the Act shall forthwith be notified by the General Partner to the
appropriate Registrar of Companies in a statement specifying the date
and nature of such change.
14
2.1.3 In the event that the Partnership is unable to pay its debts,
liabilities or obligations, the liability of a Limited Partner will be
limited to the amount of its or his Capital Contribution together with
such portion of the Loan advanced to the Partnership by such Limited
Partner as shall not at the relevant time have been repaid.
2.2 PURPOSE
2.2.1 The purpose of the Partnership is to carry on the business of an
investor in accordance with the Investment Policy and in particular but
without limitation to identify, research and negotiate investment
opportunities and make and monitor the progress of and arrange the sale
of investments in accordance with the Investment Policy which shall
include but shall not be limited to the purchase, acquisition, sale and
disposal of ordinary shares, preference shares, debentures, loan stocks,
other securities, options and warrants of and in private equity
transactions in accordance with the Investment Policy with the principal
objective of providing Investors with a high overall rate of return by
means of both income and capital growth.
2.2.2 The Partnership (acting through the General Partner, the Manager or
persons authorised on behalf of the Partnership) may execute, deliver
and perform all contracts and other undertakings and engage in all
activities and transactions as may in the reasonable opinion of the
General Partner be necessary or advisable in order to carry out the
foregoing purposes and objectives, provided that any such activities and
transactions fall within the scope of the Investment Policy.
2.3 NAME
The business of the Partnership shall be carried on under the name and
style or firm name of "▇▇▇▇▇▇▇▇▇ Capital Partners Europe (Employees)
L.P." or such other name as the General Partner may in its absolute
discretion determine, provided that any change of name shall be notified
to Investors by the General Partner as soon as is reasonably
practicable.
2.4 PRINCIPAL PLACE OF BUSINESS
The principal place of business of the Partnership shall be at ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ or such other
place in England as the General Partner shall from time to time
determine. Any change in the principal place of business of the
Partnership shall forthwith be notified to each Limited Partner. The
General Partner shall ensure that the registered office of the
Partnership shall remain in England and Wales.
2.5 COMMENCEMENT AND DURATION
2.5.1 The Partners shall be partners in the Partnership as from the date of
this Agreement or, if later, the Admission Date.
2.5.2 Subject to the provisions of Clause 9, the term of the Partnership shall
continue until the expiration of ten years from the First Closing Date.
15
2.6 CURRENCY
2.6.1 All advances by and distributions to Partners and all calculations
pursuant to the terms of this Agreement shall be made in Sterling.
2.6.2 Notwithstanding Clause 2.6.1 above, should the official currency of the
United Kingdom change from Sterling, the General Partner shall, acting
reasonably and in good faith, make the appropriate adjustments to the
accounts of the Partnership at the relevant prevailing rate to reflect
such change and, with effect from the date on which such change occurs,
all advances by and distributions to Partners and all calculations
pursuant to the terms of this Agreement shall be made in such other
official currency and references to "Sterling" in this Agreement shall
be deemed to be references to such other currency.
2.7 FURTHER PARTNERS
2.7.1 Further Investors who are (unless the General Partner determines
otherwise and subject to applicable laws and regulations) Eligible
Employees or Eligible Family Members may be admitted as Limited Partners
by the General Partner at any time on or prior to the Final Closing Date
provided that:-
2.7.1.1 (subject always to Clause 2.7.3) they each subscribe for a
Commitment in excess of any minimum Commitment requirements
the General Partner may, in its sole discretion, apply to the
Partnership; and
2.7.1.2 they each sign, deliver and have accepted a Subscription
Agreement substantially in the form set out in Schedule I
(and, for the avoidance of doubt, provide any appropriate
evidence of identity which the General Partner or Manager is
entitled to request pursuant to the Subscription Agreement)
whereupon they each shall, save as otherwise provided in this
Agreement, be treated as "Investors" and "Limited Partners"
for all purposes of this Agreement;
2.7.1.3 notwithstanding the foregoing provisions of this Clause 2.7.1
the General Partner may, after the Final Closing Date, admit
as a Limited Partner any ERISA Partner which has executed a
Subscription Agreement prior to the Final Closing Date but
whose admission as a Limited Partner is required to be delayed
until the Manager certifies that the Partnership is a "venture
capital operating company" within the meaning of the Plan
Asset Regulations pursuant to Clause 2.10.
2.7.2 Where:
2.7.2.1 a Limited Partner (a "Subsequent Investor") is admitted to the
Partnership or increases its Commitment in the Partnership
after the First Closing Date but on or prior to the Final
Closing Date (the "Relevant Admission Date"); and
2.7.2.2 at the Relevant Admission Date any Loans have been drawn down
from Investors and/or loans have been drawn down from
investors in any other Parallel Funds (the "Relevant
Drawdowns") who were Limited Partners (or limited partners in
16
any other Parallel Funds) immediately prior to the Relevant
Admission Date (the "Existing Investors");
then:-
2.7.2.3 the Subsequent Investor shall comply with the provisions of
Clause 2.7.1; above; and
2.7.2.4 (a) the General Partner shall allocate the Relevant
Drawdowns (excluding amounts of the Relevant Drawdowns
which are attributable to the General Partner's Share
or drawings on account thereof) between the Existing
Investors and the Subsequent Investor in proportion to
the Commitments of each Investor immediately following
the Relevant Admission Date;
(b) the Subsequent Investor shall contribute to the
Partnership a sum equal to the proportion of the
Relevant Drawdowns allocated to the Subsequent
Investor under Clause 2.7.2.4(a) above;
(c) the Subsequent Investor shall contribute, for payment
to the General Partner, an amount equal to the
aggregate amount which the Subsequent Investor would
have been required to pay to the Partnership with
respect to the General Partner's Share (or drawings on
account thereof) had the Subsequent Investor been
admitted at the First Closing Date;
(d) as soon as practicable after receipt of the sums
contributed by the Subsequent Investor under Clause
2.7.2.4(b) above, the General Partner shall procure
payment by the Partnership to each Existing Investor a
sum equal to the amount by which the amount equal to
the proportion of the Relevant Drawdowns attributable
to the Existing Investor immediately prior to the
Relevant Admission Date exceeds the amount equal to
the proportion of the Relevant Drawdowns allocated to
the Existing Investor under Clause 2.7.2.4(a) PROVIDED
THAT, the General Partner, acting reasonably but in
its sole discretion, may instead retain such amounts
within the Partnership for cash management purposes,
in which case the amounts which would otherwise have
been distributed to an Existing Investor will be
credited against, and reduce, future drawdowns made
from such Existing Investor;
(e) as soon as reasonably practicable after receipt of the
sums contributed by the Subsequent Investor under
Clause 2.7.2.4(c) above, such sums shall be paid to
the General Partner;
(f) sums paid to Existing Investors under Clauses
2.7.2.4(d) above will be in partial repayment of the
Loans of the
17
Existing Investors and will be available for drawdown
again;
2.7.2.5 (a) in addition, the Subsequent Investor may be required,
at the discretion of the General Partner, to
contribute to the Partnership a sum equal to interest
on the proportion of the Relevant Drawdowns allocated
to the Subsequent Investor under Clause 2.7.2.4(a) at
the rate of 8% per annum from the date of the each
Relevant Drawdown to the Relevant Admission Date;
(b) as soon as practicable after receipt of the sums
contributed by the Subsequent Investor under Clause
2.7.2.5(a) above, the General Partner shall cause to
be paid to each Existing Investor a share of the sums
so contributed, allocated pro rata to the proportion
of the Relevant Drawdowns attributable to each
Existing Investor immediately prior to the Relevant
Admission Date.
(c) in addition, the Subsequent Investor may be required,
at the discretion of the General Partner, to
contribute to the Partnership, for payment to the
General Partner, a sum equal to interest on the amount
paid by such Subsequent Investor pursuant to Clause
2.7.2.4(c) at the rate of 8% per annum from the First
Closing Date until the Relevant Admission Date;
(d) as soon as practicable after receipt of the sums
contributed by the Subsequent Investor pursuant to
Clause 2.7.2.5(c) above, such sums shall be paid to
the General Partner;
(e) sums representing interest payable by the Subsequent
Investor pursuant to Clauses 2.7.2.5(a) and 2.7.2.5(c)
above shall be payable in addition to the Subsequent
Investor's Commitment. Accordingly such sums shall not
be reflected in the accounts of the Partnership
operated in accordance with Clause 6;
(f) The General Partner shall, following the admission of
any new Investor in the Partnership, make such
allocations or reallocations of Investments,
Preliminary Expenses, Ongoing Expenses and the General
Partner's Share among the accounts of any Investors so
as to ensure that each Investor bears an amount of
such expenses, and acquires an amount of any
Investments, in proportion to the Commitments
subscribed to the Partnership by each such Investor.
2.7.3 Sums paid to Existing Investors under Clause 2.7.2.4(d) will be in
partial repayment of the Loans of Existing Investors and shall be
treated as not having been advanced to the Partnership by the Existing
Investors, and will be available for drawdown again. The repayment of
such sums shall not be treated as a Distribution (and the allocation of
such sums shall not be treated as an allocation
18
for the purposes of Clause 6.3) and accordingly no carried interest will
be payable as a result thereof.
2.7.4 The Partnership may receive and pay amounts from and to the other
Parallel Funds pursuant to the Co-investment Agreement in order to
equalise the position of Investors in the Partnership and investors in
the other Parallel Funds as a result of the admission of new investors
in the Partnership or in the Parallel Funds or increases in investors'
commitments during the period between the First Closing Date and Final
Closing Date. Such amounts received shall be distributed to Existing
Investors pro rata to their respective Loans as soon as practicable
after receipt. The amount so distributed (but excluding the amount
received by Investors which represents amounts equal to interest paid by
subsequent investors in the other Parallel Funds) will be in partial
repayment of the Loans of the Existing Investors and will be available
for drawdown again.
2.7.5 In addition to the provisions set out in Clauses 2.7.1 to 2.7.4, which
cover the admission of Subsequent Investors (those admitted prior to the
Final Closing Date) to the Partnership, at any time after the Final
Closing Date but prior to the end of the Investment Period, the General
Partner may cause the Partnership to admit additional Limited Partners
("Further Subsequent Partners") to the Partnership provided that the
Commitment of the General Partner in its capacity as an Investor shall
be reduced by an amount equal to the Commitment of the Further
Subsequent Partner and that the Further Subsequent Partner shall be
required to meet all further drawdowns in relation to the amount of its
Commitment and pay such Investor's pro rata portion of the General
Partner's Share from the relevant Admission Date. Further Subsequent
Partners admitted following the Final Closing Date but prior to the end
of the Investment Period shall not participate in Investments made by
the Partnership prior to their Admission Date (and, for the avoidance of
doubt, the Investor's Proportionate Share applicable to Further
Subsequent Partners in respect of such Investments shall be zero). In
the event that a Further Subsequent Partner is admitted to the
Partnership, such Further Subsequent Partner shall acquire from the
General Partner, at par value, such proportion of the Capital
Contribution of the General Partner as is equal to the proportion by
which the aggregate General Partner's then current Commitment reduces on
the admission of the Further Subsequent Partner.
2.8 THE GENERAL PARTNER'S COMMITMENT AND INITIAL INVESTMENTS
2.8.1 The General Partner (in its capacity as an Investor) will forthwith upon
the execution of this Agreement subscribe for a Commitment of
(pound)25,060,930.80 in the Partnership.
2.8.2 Except where expressly stated otherwise, the General Partner shall be
treated as an "Investor" in respect of the Commitment subscribed
pursuant to Clause 2.8.1 for all purposes of this Agreement. For the
avoidance of doubt, the General Partner shall not be deemed to be an "MD
Limited Partner".
2.8.3 The Partnership shall be entitled, at the election of the General
Partner to purchase from Greenhill Europe (and the General Partner shall
procure that Greenhill Europe shall sell) the Ironshore Investment. The
purchase price shall be determined at the time of the acquisition and
shall be calculated to be the aggregate of the acquisition cost of the
Ironshore Investment paid by Greenhill Europe (being
(pound)15,314,717.44) and all expenses incurred in relation to the
acquisition and a return of 8% per annum, calculated on a daily basis
from the
19
date of the acquisition of the Ironshore Investment by Greenhill Europe
until the date the Ironshore Investment is transferred to the
Partnership.
2.9 SIDE LETTERS
Notwithstanding any other provisions of this Agreement, the parties
hereto acknowledge that the Partnership or the General Partner, on its
own behalf or on behalf of the Partnership, without any further act,
approval or vote of any Partner, may enter into Side Letters to or with
certain Limited Partners which have the effect of establishing rights
under, or altering or supplementing the terms of, this Agreement or the
Subscription Agreements with Investors. The parties hereto agree that
any rights established, or any terms of this Agreement or the
Subscription Agreements with the Investors altered or supplemented, in a
Side Letter to or with any Investor shall govern with respect to such
Investor, notwithstanding any other provisions of this Agreement or the
Subscription Agreements with the Investors.
2.10 VENTURE CAPITAL OPERATING COMPANY REQUIREMENTS
2.10.1 The General Partner shall use all reasonable endeavours to structure the
investments of the Partnership so that the Partnership is a "venture
capital operating company" within the meaning of the "plan assets"
regulation (29 CFR 2510.3-101) under ERISA (the "Plan Assets
Regulations"). Notwithstanding any other provision of this Agreement, no
ERISA Partner shall be required to pay its Capital Contribution or any
amount of its Loan Commitment to the Partnership until it has received
the opinion referred to in this Clause 2.10.1.
2.10.2 In addition, (i) the General Partner will provide, in connection with
the making of the first long-term investment of the Partnership (for the
purposes of the Plan Assets Regulations), an opinion of counsel,
reasonably acceptable to the ERISA Partners, that the Partnership will
constitute a venture capital operating company for the purposes of the
Plan Assets Regulations when that investment is made and (ii) the
General Partner will provide a written certificate to the effect that
the Partnership is a "venture capital operating company" to an ERISA
Partner within 90 days after the end of any "annual valuation period" of
the Partnership.
2.10.3 The provisions of Clauses 2.10.1 and 2.10.2 shall not apply if, as of
the date of consummation of the Partnership's first investment (other
than a short-term investment of funds pending long-term commitment): (i)
the Subscription Agreements executed by all Limited Partners indicate,
based on the Commitment of each Limited Partner, that participation in
the Partnership by "benefit plan investors" is not "significant" (as
such terms are defined in ERISA Section 3 (42) and the Plan Asset
Regulations) and (ii) the General Partner has provided to each ERISA
Partner a binding letter agreement including a representation to this
effect and an agreement that the General Partner will not at any future
date admit any party as a Limited Partner if, based on such party's
Subscription Agreement (or otherwise to the best knowledge of the
General Partner) the admission of such party as a Limited Partner would
cause participation in the Partnership by "benefit plan investors" to be
"significant" (as such terms are defined in ERISA Section 3(42) and the
Plan Asset Regulations).
2.10.4 The General Partner will notify any ERISA Partner as soon as is
practicable if it becomes aware that the Partnership is either holding
"plan assets" or that there is a reasonable likelihood that it is
holding "plan assets" (as defined in the Plan Assets Regulations).
20
3 CAPITAL CONTRIBUTIONS
3.1 CARRIED INTEREST PARTNER
3.1.1 In addition to the Capital Contribution of the General Partner
contributed in its capacity as an Investor pursuant to Clause 2.8.1, the
General Partner has agreed to contribute the amount of capital in cash
to the Partnership as stated in Recital H in its capacity as the Carried
Interest Partner.
3.1.2 Following each Closing Date, the Carried Interest Partner shall
contribute such further amount of Capital Contribution in cash or shall
be repaid part of such Capital Contribution so that at all times the
aggregate amount of the Capital Contribution subscribed by it as the
Carried Interest Partner equals 14 per cent of the total Capital
Contributions subscribed in the Partnership by the MD Limited Partners
(taking into account, if applicable, any transfers of Capital
Contribution pursuant to Clause 2.7.5).
3.2 INVESTORS
3.2.1 Each Investor (other than Further Subsequent Investors) shall contribute
the amount of its Capital Contribution on the First Drawdown Date or, if
later, its Admission Date to the Partnership, being 0.001% of the
Commitment subscribed by it.
3.2.2 For administrative purposes, each Investor may, at the discretion of the
General Partner, contribute its Capital Contribution on its Admission
Date by borrowing such amount from the General Partner on an interest
free basis, in which case the General Partner will pay the Capital
Contribution of such Investor into the Partnership's bank account and
the Investor will reimburse the General Partner an equal amount out of
its first drawdown.
3.3 INTEREST
No interest shall be paid or payable by the Partnership upon any Capital
Contribution or upon any amount whether of Income or Capital Gain
allocated to any Partner but not yet distributed to it.
3.4 REPAYMENT
Subject as provided in Clauses 3.1, 4.4.3 and 6.4, Capital Contributions
shall only be repaid on the termination or liquidation of the
Partnership.
4 LOANS
4.1 INVESTORS
4.1.1 Each of the Investors:-
4.1.1.1 shall, subject to the following provisions of this Clause 4.1,
be required to advance Loans to the Partnership as required by
the General Partner for all purposes of the Partnership up to
an aggregate amount equal to 99.999% of the Commitment
subscribed by it; and
21
4.1.1.2 may be required to re-advance (subject as provided in this
Clause 4.1) all or any part of any amount distributed (and the
General Partner shall notify Investors on making distributions
which are subject to recall pursuant to this Clause) to the
extent that such distribution is or is attributable to a
repayment of any Loan:
(i) in respect of Temporary Investments (up to the amount
of the Acquisition Cost of such Temporary Investment
and provided that the repayment was made within 18
months of the drawdown of the relevant Loan and on or
before the end of the Investment Period);
(ii) in respect of sums drawn down for a proposed
Investment which does not proceed to completion;
(iii) as a result of the admission of Subsequent Investors
(or subsequent investors in any Parallel Funds); or
(iv) advanced in respect of the Preliminary Expenses or
Ongoing Expenses or in respect of amounts of Income or
Capital Gains which are allocated to the General
Partner in satisfaction of loans (including drawings)
made to the General Partner in respect of the General
Partner's Share pursuant to Clause 6.3.2 where such
loans have been funded by drawdown of Loans from
Investors;
and any such amount re-advanced shall be treated as part of
the Loan for all purposes of this Agreement.
4.1.2 Each Loan shall be advanced in tranches in accordance with this Clause
4. The General Partner shall give written notice of drawdown of each
tranche to each Investor in the form or substantially in the form set
out in Schedule II (a "Drawdown Notice") which notice shall be served in
accordance with the provisions of Clause 11.5 at least ten Business Days
prior to the date for advance of the tranche.
4.1.3 Each Drawdown Notice shall state the amount of the tranche to be paid by
that Investor, the date for the advancing of the tranche and the bank
and account to which the tranche is to be advanced. In addition, each
Drawdown Notice shall state whether the drawdown is for the purposes of
making an investment or, if not, shall state the reason why the General
Partner is issuing the drawdown notice.
4.1.4 Such tranches shall be advanced (or re-advanced) in accordance with this
Agreement proportionally in respect of each Commitment as to such amount
as the General Partner shall determine at the First Drawdown Date (or
the date on which any re-advance is required by the General Partner) and
as to further tranches on such dates as are determined by the General
Partner but so that the Investors shall not be required to advance any
further tranches after the expiry of the Investment Period;
22
PROVIDED THAT:-
4.1.4.1 if available for drawdown and if so determined by the General
Partner, up to 15% of Total Commitments shall be advanced
after the expiry of the Investment Period in order to make
further equity or other investments into (or related to) an
existing Investment and the General Partner shall notify each
of the Investors as soon as practicable following any approval
which will or may result in a drawdown being made for a
follow-on investment pursuant to the provisions of this Clause
4.1.4.1;
4.1.4.2 if available for drawdown, sums may be advanced after such
time in order to:
(i) complete contracts entered into by the Partnership
prior to such date (provided such contracts are
disclosed to Investors prior to the end of the
Investment Period); or
(ii) to pay any General Partner's Share or Ongoing Expenses
which have or are about to become payable by the
Partnership; or
(iii) to make payments in respect of any indemnities
provided by the Partnership pursuant to the provisions
of this Agreement; or
(iv) to provide an interest free loan in respect of the
General Partner's Share in accordance with the
provisions of Clause 6.3.2.4.
4.1.5 No drawdown may be made in respect of a Commitment if the amount to be
contributed when aggregated with all previous amounts contributed in
respect of that Commitment less all amounts repaid and available to be
redrawn in accordance with Clause 4.1.1.2 would as a result exceed 100%
of the aggregate amount of each Commitment.
4.2 GENERAL PARTNER
4.2.1 The General Partner shall not in its capacity as the Carried Interest
Partner be required to advance any Loan to the Partnership.
4.2.2 The General Partner in its capacity as an Investor shall be required to
advance a Loan to the Partnership in respect of the Commitment
subscribed for by it pursuant to Clause 2.8.1 (provided that such
obligation shall be subject to the provisions of Clause 2.7.5 in the
event of the admission of Further Subsequent Investors).
4.3 INTEREST
The Loans will not carry interest.
4.4 FAILURE TO COMPLY WITH DRAWDOWN NOTICE
4.4.1 If any Investor fails to advance to the Partnership the amount which is
the subject of a Drawdown Notice by the date of expiry of such Drawdown
Notice (a
23
"Defaulting Investor"), and fails to remedy such default on or before
the expiry of 30 days' notice from the General Partner requiring the
Investor so to do by making payment of the amount due together with
interest payable thereon pursuant to Clause 4.4.2, the General Partner
shall have the right:
4.4.1.1 to cause the Capital Contribution of such Defaulting Investor
to be forfeited and the rights of such Investor shall
thereafter be limited to the right, on termination of the
Partnership, to payment of the lesser of (a) the amount then
standing to the credit of the Defaulting Investor's Capital
Account and Loan Account; and (b) the fair market value of
such Defaulting Investor's Interest at the time of the
default, or
4.4.1.2 to elect, in its sole discretion, that the Partnership
purchases the Interest of the Defaulting Investor for a sum
calculated pursuant to the provisions of Clause 7.7.6, which
shall be payable in cash or in specie in accordance with the
provisions of Clause 7.7.7.
While any Investor is in default such Defaulting Investor shall have no
right to attend or vote at any meetings of the Partners or to
participate in any written resolutions or consents of the Investors or
the Partnership and the Commitment of such Defaulting Investor shall be
excluded from the calculation of Total Commitments for the purpose of
determining the level of an Investors' Ordinary Consent or an Investors'
Special Consent.
4.4.2 In addition, the General Partner may require any Defaulting Investor to
pay interest on the amounts which it has failed to advance pursuant to
any Drawdown Notice from the date of expiry of such Drawdown Notice up
to the date of payment at the rate of 10 per cent. per annum.
4.4.3 If any Investor which is an MD Limited Partner has its Capital
Contribution forfeited pursuant to Clause 4.4.1 the General Partner
shall be repaid part of its Capital Contribution so that the amount of
its Capital Contribution as the Carried Interest Partner shall continue
to equal 14% of the total Capital Contributions subscribed in the
Partnership by MD Limited Partners immediately following such
forfeiture.
4.4.4 If the Defaulting Investor fails to pay the amount which is the subject
of a Drawdown Notice, plus any interest which the General Partner may
request pursuant to Clause 4.4.2 to be payable thereon, within 30 days
from the date of expiry of the Drawdown Notice, the General Partner will
be entitled to sell as agent for the Defaulting Investor, the entire
Interest of the Defaulting Investor (including its obligations in
respect of the maximum amount still permitted to be drawn down pursuant
to Clause 4.1) to a third party (or parties) identified by the General
Partner (which party or parties may include another Limited Partner) at
such price as may be agreed between the General Partner and such third
party, provided that the General Partner shall be under no obligation to
gain the best price for such Interest. Alternatively, the General
Partner may purchase such Interest itself, provided that, in doing so,
it shall act reasonably and purchase the Interest on terms equivalent to
arm's length terms which could reasonably be expected to be agreed with
a third party. The General Partner is irrevocably appointed as attorney
for the Defaulting Investor to execute all such documents and to take
such actions which are in the option of the General Partner necessary in
connection therewith. On a sale, any amounts which would, in the absence
of the default, have been for the account of the Defaulting Investor,
will be held on
24
trust by the General Partner for the benefit of any purchaser of the
Interest of the Defaulting Investor, and the proceeds of sale will,
following receipt by the Manager and, subject to the deduction of any
costs and expenses incurred by the Partnership in connection with the
default or sale, be paid to the relevant Defaulting Investor.
4.4.5 In addition, the General Partner may, in its sole discretion, issue
additional Drawdown Notices to the other Limited Partners to fund the
shortfall caused by the Defaulting Investor's default (the "Default
Amount") (provided that Limited Partners shall at no time be required to
make Loans to the Partnership beyond the aggregate Loan Commitment). In
the event that the General Partner issues such Drawdown Notices, it
shall cause distributions which would otherwise be made to the
Defaulting Investor pursuant to the provisions of this Agreement to be
credited against the Default Amount and shall repay the amounts drawn
down from the other Limited Partners.
4.4.6 The provisions of this Clause 4.4 shall not be applied if an Investor is
not required, pursuant to Clause 11.8, to advance the amount that is the
subject of a Drawdown Notice and such Investor shall not be deemed to
have failed to make such an advance for the purposes of this Agreement.
4.4.7 The General Partner may, acting in good faith in its sole discretion,
make such adjustments to the accounts and/or accounting structure of the
Partnership as it may reasonably determine are necessary to implement
the provisions of this Clause 4.4.
4.5 REPAYMENT OF THE LOANS
The Loans shall be repaid in accordance with the provisions of Clause 6.
4.6 KEY EXECUTIVE PROVISIONS
4.6.1 If at any time prior to the termination of the Investment Period, two of
the Key Executives cease to act as members of the Investment Committee
of the Manager (a "Key Man Event") then:-
4.6.1.1 the General Partner shall promptly (but in any event within
five Business Days) notify the Limited Partners of such Key
Man Event;
4.6.1.2 Investors may within 60 days of such notification of a Key Man
Event, by an Investors' Ordinary Consent, require the
Partnership to enter a Suspension Period;
4.6.1.3 during a Suspension Period no drawdowns of Loans from
Investors pursuant to the provisions of this Clause 4 shall be
made other than for the purposes of:
(i) making follow-on Investments;
(ii) completing contracts entered into by the Partnership
prior to the Suspension Period; and
(iii) paying any Ongoing Expenses, making payments under any
indemnities given pursuant to the provisions of this
25
Agreement or paying the General Partner's Share or
procuring an interest free loan in respect of the
General Partner's Share in accordance with the
provisions of Clause 6.3.2;
4.6.1.4 if the Partnership enters a Suspension Period, the General
Partner shall be entitled to propose a replacement Key
Executive (or replacement Key Executives (if applicable) so as
to ensure that there are never less than two Key Executives)),
who shall be approved if the Investors do not, by way of an
Investors' Ordinary Consent, object to the appointment within
one month of receiving notice of the proposal. On approval, or
deemed approval, of a replacement Key Executive (or Key
Executives (if applicable)), the Suspension Period will end
and Investors will become liable to fund Drawdown Notices
pursuant to the provisions of Clause 4;
4.6.1.5 if the Suspension Period continues for longer than twelve
months, then Investors may, by an Investors' Special Consent,
determine that the Investment Period should be terminated;
4.6.2 The General Partner may at any time propose to the Investors a person as
a new Key Executive whether in addition to or in substitution for an
existing Key Executive. Such person will be approved as a Key Executive
if the Investors (by way of an Investors' Ordinary Consent) do not
object within one month of such notification.
5 THE MANAGER AND THE GENERAL PARTNER
5.1 APPOINTMENT OF A MANAGER
5.1.1 The General Partner shall be responsible for ensuring that the
Partnership is always managed and operated, and that its Portfolio is
always managed on a discretionary basis by an appropriate Authorised
Person. The General Partner, acting on behalf of the Partnership, shall
have full discretion and authority to select and/or terminate the
appointment of any Manager subject to Clause 5.1.2. If appointed, the
Manager shall manage or operate the Partnership, and shall manage its
Portfolio on a discretionary basis. The appointment of the Manager shall
be without further charge to the Partnership. The General Partner shall
accordingly be responsible for procuring the payment of the fees of the
Manager and the Manager shall have no rights against the Partnership or
any of the Limited Partners in respect of any such fees.
5.1.2 GCP Europe General Partnership L.P. and each succeeding general partner
of the Partnership shall procure for so long as it remains a general
partner of the Partnership that an Associate, which is then an
appropriately Authorised Person, shall agree to act as manager of the
Partnership on terms to be agreed by the General Partner. The General
Partner hereby selects and the Partners hereby confirm that the General
Partner will appoint as the first manager, ▇▇▇▇▇▇▇▇▇ Capital Partners
Europe LLP (a limited liability partnership authorised to carry on
regulated activities in the UK and, in particular, to act as a manager
of limited partnerships) and authorise the General Partner to enter into
the Management Agreement with ▇▇▇▇▇▇▇▇▇ Capital Partners Europe LLP. Any
amendment to the Management Agreement (other than a minor amendment,
provided that any
26
amendment which could adversely affect the interests of Investors shall
not be 'minor' for the purposes of this clause) shall require an
Investors' Ordinary Consent. The appointment of a manager which is not
an Associate of the General Partner shall only be valid if approved in
advance by an Investors' Special Consent (and the General Partner shall,
in the event that such a situation arises, be entitled to vote in
respect of its Commitment).
5.2 RESTRICTION ON THE LIMITED PARTNERS
5.2.1 The Limited Partners shall take no part in the operation of the
Partnership or the management or control of its business and affairs,
and shall have no right or authority to act for the Partnership or to
take any part in or in any way to interfere in the conduct or management
of the Partnership or to vote on matters relating to the Partnership
other than as provided in the Act or as set forth in this Agreement but
they shall at all reasonable times, subject to having given reasonable
notice, have access to and the right to inspect during normal business
hours all the books and accounts of the Partnership. For the avoidance
of doubt, nothing in this Agreement shall give any of the Limited
Partners a right of access to any Investee Company.
5.2.2 Save as otherwise provided in this Agreement, and for the avoidance of
doubt, each Partner hereby agrees and consents that no Partner shall be
required to account to the Partnership for any benefit derived by it or
its Associates from any transaction concerning the Partnership.
5.3 AUTHORITY AND POWERS OF THE GENERAL PARTNER/MANAGER
The General Partner (or any Manager appointed by it) shall have full
power and authority, on behalf of the Partnership subject always to any
relevant restrictions and provisions of this Agreement and consistent
with the Investment Policy and so as to bind the Partnership thereby:
(a) to identify, evaluate and negotiate investment opportunities, to
prepare and approve investment agreements and to (or to agree
to) subscribe, purchase or otherwise acquire, alone or together
with others Investments falling within the Investment Policy,
and to sell, exchange or otherwise dispose of Investments for
the account of the Partnership, and to enter into investment
agreements or execute investment agreements on behalf of the
Partnership accordingly (in each case, whether personally or
through an attorney or other agent) and, where appropriate, to
give warranties and indemnities in connection with any such
acquisition, sale, exchange or other disposal;
(b) to enter into, or require the Partnership to enter (directly or
through a company owned by the Partnership or any custodian of
the Partnership or its nominee) into underwriting commitments,
to acquire Underwritten Investments in a syndicate with other
investors, to enter into Temporary Investments and to invest in
currency or currency futures or currency options or other
instruments with a view to hedging Investments provided that
such hedging is reasonably believed to be in the best interests
of the Partnership (but so that, for the avoidance of doubt, no
omission to hedge or otherwise enter into arrangements to cover
the risk of losses as a result of exchange rate movements shall
constitute a breach of any fiduciary or other duty of the
General Partner or the Manager);
27
(c) to monitor the performance of and, where appropriate, to
nominate directors or officers for Investee Companies, to
exercise all rights conferred upon the Partnership under the
terms of any investment agreement or otherwise in respect of an
Investee Company and to liaise with, consult, assist or procure
assistance to be given to Investee Companies and generally to
take any action the General Partner or the Manager considers
appropriate for the protection of the Partnership Assets;
(d) to provide or procure the provision of office facilities and
office and executive staff and office equipment to facilitate
the carrying on of the business of the Partnership;
(e) to accept applications by and require the Partnership to admit
prospective Limited Partners and to issue Drawdown Notices and
accept Capital Contributions and Loans from the Partners and to
receive all income and other funds arising, all in accordance
with the provisions of this Agreement;
(f) to enter into, make and perform such contracts, agreements and
other undertakings, and, subject to paragraph (g) below, to give
such guarantees (or letters of credit) in connection with
Investments or proposed Investments and to do all such other
acts or things as it may deem necessary and advisable for or as
may be incidental to the conduct of the business of the
Partnership;
(g) to borrow money (either directly or through a company owned by
the Partnership or any custodian of the Partnership or its
nominee) (PROVIDED THAT the aggregate of borrowings under this
paragraph (g) and of the guarantees given pursuant to paragraph
(f) above (but excluding any guarantees given in connection with
the making of Investments where amounts of Loan have been drawn
down and deposited, pledged as security or otherwise applied in
support of giving such guarantees) shall not, without an
Investor's Special Consent (and, in relation to such Investor's
Special Consent, the General Partner shall be entitled to vote
as an Investor in respect of its Commitment) or unless otherwise
permitted pursuant to this paragraph, at any time exceed the
lesser of (i) 50% of Total Commitments and (ii) the aggregate
amount of undrawn Commitments and as determined by the Manager)
and in connection therewith to make, issue, accept, endorse and
execute promissory notes, drafts, bills of exchange, guarantees
and other instruments and evidences of indebtedness and to
secure the payment thereof by mortgage, charge, pledge or
assignment of or security interest in all or any part of the
Partnership Assets (or in each case to direct the Partnership
acting through the General Partner to do so itself). For the
avoidance of doubt this paragraph (g) shall not in any way
restrict the power and authority of Investee Companies to borrow
money or the ability of the Partnership to borrow to refinance
or recapitalise any Investment where (x) recourse for the
borrowing is limited solely to the securities or other assets
owned by the Partnership in connection with such Investment
and/or a guarantee or indemnity by the Partnership for any
losses attributable to fraud, wilful misconduct, negligence or
breach of the Partnership's covenants or representations as the
owner, pledgor or assignor of any direct or indirect interest in
such securities or other assets
28
and (y) the proceeds of any such limited recourse borrowing are
distributed promptly to the Limited Partners;
(h) to commence or defend litigation that pertains to the
Partnership or to any of the Partnership Assets;
(i) to maintain records and books of account of and in the name of
the Partnership at the Partnership's or its own principal place
of business and to allow any Partner and its representatives
reasonable access thereto at any reasonable time, subject to
having to give reasonable notice, for the purpose of inspecting
the same provided that such Partner shall reimburse to the
General Partner or the Manager any reasonable expenses incurred
by the General Partner or the Manager in connection with such
inspection;
(j) to open accounts with banks, for and in the name of the
Partnership, maintain such accounts, give payment and other
instructions (including instructions in respect of the payments
referred to below in this Clause 5.3) to banks or custodians in
respect of such account and receive and pay into such accounts
Capital Contributions, Loans made by Investors, investment
income or other sums arising from or on the disposal of
Investments and any other income of the Partnership;
(k) to make distributions to the Partners in accordance with the
terms of this Agreement;
(l) to pay or direct the Partnership to pay all amounts of taxation
for which the General Partner, the Manager, any Associate or the
Partnership is liable on behalf of any Investor or the
Partnership or any amount of taxation in respect of which any
Investor or the Partnership has been assessed in the name of the
General Partner, the Manager, such Associate or the Partnership
provided that the Manager shall first give notice to such
Investor of such liability to taxation and shall use its
reasonable endeavours at the expense of such Investor to ensure
that the amount assessed is in fact due;
(m) to grant and make payments in respect of indemnities in
accordance with Clause 11.2;
(n) to pay all of the fees and expenses referred to in Clause 5.9 to
the extent specified therein, as being the responsibility of the
Partnership, and to provide against present or future
contemplated obligations or contingencies;
(o) to carry out periodic valuations of the Partnership Assets and
to furnish reports and valuations to the Partners in accordance
with the provisions of Clause 10;
(p) to admit Substitute Investors to the Partnership in accordance
with the provisions of Clause 7;
(q) to engage independent agents, lawyers, accountants, custodians,
paying and collecting agents and financial and other advisers
and consultants as it may deem necessary or advisable in
relation to the affairs of the Partnership including, without
limitation, any Associate of the General
29
Partner (provided that any such engagement of an Associate shall
be on terms that are no less favourable to the Partnership than
customary market practice) to perform or assist in the
performance of all or any of the activities set forth in this
Clause 5.3;
(r) to register and publish (or cause the General Partner to
register and publish) all such notices, statements or other
instruments as may be required pursuant to the Act to be
registered and published in relation to the establishment of the
Partnership and in relation to any changes occurring in relation
to the Partnership as specified in Sections 9 and 10 of the Act;
(s) pending the application of monies drawn down pursuant to this
Agreement in making Investments, meeting liabilities of the
Partnership or paying the General Partner's Share and pending
distribution pursuant to the terms of this Agreement, to place
amounts drawn down or realised (as the case may be) in such
deposit accounts in the name of the Partnership or a custodian
or to invest the said amounts in such government bonds or
instruments having a maturity of less than twelve months at the
time of purchase issued by banks having a capital of over
(pound)100 million and which are rated "AA" or higher as the
General Partner or the Manager may determine;
(t) generally to communicate with the Partners and to report to the
Partners at such times as it shall think fit;
(u) to exercise such of the authorities and powers set out in Clause
5.5.1 below as it may from time to time decide as referred to
therein (whether, in the case of the Manager, instead of or
concurrently with the General Partner);
(v) to acquire, own and operate a company (whether within UK or
elsewhere) owned by the Partnership for the purpose of carrying
out underwriting, bridging and syndication transactions of a
trading nature or to acquire Investments and assist the taxation
position of Investors, in accordance with the Investment Policy;
(w) to effect such insurances as may be appropriate or desirable for
the purposes of the Partnership;
(x) to take any action necessary or advisable:
(i) to cause the Partnership to qualify or continue to
qualify as a "venture capital operating company" within
the meaning of the Plan Assets Regulations; or
(ii) to cause the Partnership to be treated, for US Federal
income tax purposes as a partnership including, without
limitation, the filing of any elections or statements by
the Partnership with the applicable US authorities,
including the filing of an entity classification
election on Form 8832 by the Partnership with the
Internal Revenue Service pursuant to US Treasury
Regulations Section 301.7701-3; it being understood that
the General Partner shall also have full power and
authority to file any such election or statement on
behalf of the Partnership;
30
(y) to take any action it may deem necessary or advisable to cause
the Partnership to qualify or to continue to qualify as an
"employees' security company" within the meaning of Section
2(a)(13) of the Investment Company Act and to comply with the
terms and conditions set forth in the application for an
exemptive order applicable to the Partnership that was filed by
Greenhill with the U.S. Securities and Exchange Commission;
(z) to do all or any other acts as are required of the General
Partner or the Manager by this Agreement or as are necessary or
desirable in the opinion of the General Partner or the Manager
in furtherance of the foregoing powers and consistent with the
terms of this Agreement.
5.4 TERMINATION OF THE MANAGER'S AGREEMENT
The events on which the appointment of the Manager shall terminate shall
be set out in the Management Agreement and shall include:
5.4.1 the removal of the General Partner in accordance with Clause 9.4;
5.4.2 the Manager committing a material breach of its obligations under the
Management Agreement which is capable of being remedied and failing to
remedy the same within 30 Business Days after the service of notice by
the Partnership requiring the same to be remedied and the Partnership,
acting by an Investors' Special Consent, serving notice on the Manager
terminating the Agreement;
5.4.3 the Manager committing a material breach of its obligations under the
Management Agreement which is incapable of remedy and the Partnership,
acting by an Investors' Special Consent, serving notice on the Manager
terminating the Agreement; or
5.4.4 the Manager ceasing to be authorised under the FSMA to manage or operate
the Partnership or to act as manager of the Partnership's Investments or
other Partnership assets.
5.5 AUTHORITY AND POWERS OF THE GENERAL PARTNER
5.5.1 Unless and except to the extent that the General Partner decides that
the Manager should exercise any of the powers in paragraphs 5.5.1.1 to
5.5.1.4 below, and notifies the Manager accordingly, the General Partner
shall have full power and authority to do each of the following acts or
things (on behalf of the Partnership and so as to bind the Partnership
thereby):
5.5.1.1 sign a management agreement with the Manager and with each
succeeding manager, in such form as it may approve which shall
reflect the provisions of this Agreement in relation to the
management and operation of the Partnership and shall not
impose any liability on the Partnership or the Partners except
as contemplated by this Agreement;
5.5.1.2 execute any document or do any other act or thing which the
Manager may direct the Partnership to execute or do under the
31
provisions of Clause 5.3 or any other provision of this
Agreement;
5.5.1.3 execute any deed or document or do any other act or thing
which the Manager may lawfully and properly require or cause
the General Partner to execute or do under the provisions of
this Agreement;
5.5.1.4 generally, as general partner, represent the Partnership in
its dealings with the Manager, or in relation to the
protection of the Partnership assets, or in any other respect,
except where the power to do so is conferred on or assumed by
the Manager under this Agreement;
5.5.2 Without prejudice to Clause 5.5.1 the General Partner shall do all
things and discharge all duties or requirements of or imposed on a
general partner by the Act and by the general law (whether or not on
behalf of the Partnership) and in particular so as to ensure, so far as
it is able, that the liability of the Limited Partners is and remains
limited as provided in the Act; where it is to do so on behalf of the
Partnership it is hereby expressly authorised to do so accordingly.
5.6 RESTRICTIONS ON THE GENERAL PARTNER
Notwithstanding anything in this Agreement to the contrary, the General
Partner shall not do or be authorised to do anything (including acting
or offering or agreeing to act as Manager) which might breach the
provisions of the Act or constitute a regulated activity for the purpose
of the FSMA unless it is authorised by the FSA to do so.
5.7 SEPARATE LIABILITIES OF THE GENERAL PARTNER
The General Partner hereby undertakes that it shall at all times duly
and punctually pay and discharge its separate and private debts and
engagements whether present or future incurred or assumed by it as
principal and other than in its capacity as general partner of the
Partnership and shall keep the Partnership Assets and the Limited
Partners and their personal representatives, estates and effects
indemnified therefrom and from all liabilities, actions, proceedings,
costs, claims and demands in respect thereof.
5.8 COMPLIANCE WITH THE ACT AND OTHER LAWS
5.8.1 The General Partner shall comply with all registration and other
requirements of the Act so as to ensure, so far as it is able, that the
liability of the Limited Partners is and at all times remains limited as
provided in the Act.
5.8.2 The General Partner undertakes to disclose to the Investors, in the
reports provided pursuant to Clause 10, details of any transactions
(including fees in respect thereof) undertaken by the Partnership with
the Manager, the General Partner, the Key Executives or any of their
respective Associates.
32
5.9 EXPENSES AND FEES
5.9.1 The Partnership shall be responsible for:
5.9.1.1 all of the Preliminary Expenses reasonably and properly
incurred in the establishment of the Partnership (plus any
VAT, if applicable) provided that any Preliminary Expenses
incurred in establishing the Partnership and ▇▇▇▇▇▇▇▇▇ Capital
Partners Europe, L.P. in excess of (pound)1,000,000 in the
aggregate shall be borne by the Manager;
5.9.1.2 all the Ongoing Expenses (for the avoidance of doubt,
excluding the Preliminary Expenses under Clause 5.9.1.1)
reasonably and properly incurred in relation to the
constitution, administration and business of the Partnership,
provided that the Partnership shall not be responsible for
expenses and disbursements in respect of: (i) overheads of the
General Partner or of the Manager properly payable by the
General Partner from the General Partner's Share or (ii)
expenses recovered from bodies corporate or other entities in
which the Partnership has made (or proposes to make) an
Investment; and
5.9.1.3 all costs and expenses incidental to the termination of the
Partnership.
5.9.2 Any Abort Costs incurred during any Accounting Period may be funded, at
the discretion of the General Partner, through:
5.9.2.1 a drawdown of Loan Commitment from the Investors; or
5.9.2.2 through the available cash funds of the Partnership.
5.9.3 In any Accounting Period, and calculated at the end of such Accounting
Period:
5.9.3.1 any Transaction Fees received during the Accounting Period
will be applied so as to reduce any Abort Costs accrued in
such Accounting Period;
5.9.3.2 to the extent that Abort Costs in an Accounting Period are not
reduced by the application of Transaction Fees pursuant to
Clause 5.9.3.1, such Abort Costs shall be carried over to the
next Accounting Period (and be offset against Transaction Fees
accrued in that Accounting Period) and shall be treated as
accruing in that next Accounting Period for the purposes of
Clause 5.9.3.1; and
5.9.3.3 any surplus of Transaction Fees over Abort Costs shall be
divided with 86% to the Partnership and 14% to the General
Partner or the Manager, with the Partnership's Share of any
such amounts received by the General Partner or the Manager
being offset against and thereby reducing the General
Partner's Share as provided in Clause 6.3.3.
5.9.4 If (i) the General Partner or the Manager receive any Transaction Fees
during the final Accounting Period of the Partnership or during an
Accounting Period in
33
which the General Partner ceases to be the general partner of the
Partnership (in each case, the "Termination Accounting Period"); and
(ii) there are no further amounts of General Partner's Share to be
allocated against which such amounts may be offset, the General Partner
and/or the Manager (as appropriate) shall promptly pay to the
Partnership the difference between the amount of Transaction Fees
actually offset against the General Partner's Share for the Termination
Accounting Period and the amounts to which the Partnership is entitled
pursuant to the provisions of Clause 5.9.3. Any payment by the General
Partner pursuant to the provisions of this Clause 5.9.4 provided that
the sum so payable shall not exceed the total amount of General
Partner's Share allocated to the General Partner in the Termination
Accounting Period.
5.9.5 The General Partner and Manager shall disclose to Investors at least
once in each Accounting Period all Transaction Fees paid to the General
Partner and/or the Manager.
5.10 TAX AND OTHER INFORMATION AND WITHHOLDING TAXES
5.10.1 The Manager shall, upon the reasonable request of any Limited Partner,
promptly furnish to that Limited Partner, at the expense of the
Partnership, such information in the Manager's possession as the Limited
Partner requests to enable such Limited Partner: (i) to file tax returns
and reports or answer enquiries from tax authorities; (ii) to meet its
reporting obligations; or (iii) to furnish information to any of its
partners for the purposes set out in (i) and (ii). In the event that a
Limited Partner requires information for these purposes that is not in
the possession of the Manager, the Manager will use reasonable
endeavours to obtain such information provided that all reasonable costs
properly incurred by the Manager in so doing shall be borne by the
Limited Partner making the request.
5.10.2 The Manager and the General Partner shall retain all financial books,
accounts and records of the Partnership throughout the life of the
Partnership and for a minimum of six years following the dissolution of
the Partnership.
5.10.3 The Manager and the General Partner shall be entitled to disclose to any
governmental (including tax) authorities in connection with the
Partnership such information about the identity of the Partners and
their respective interests in the Partnership as any such authorities
may request it to disclose.
5.10.4 The General Partner and the Manager shall use reasonable efforts:
5.10.4.1 to assist Limited Partners in avoiding or minimising
withholding taxes to the extent that it is proper to do so,
but so that such obligation shall not cause the Manager to
change the structure of any proposed investment;
5.10.4.2 to notify each Limited Partner promptly if the General Partner
determines that the Partnership is required to withhold any
tax with respect to distributions to be made to such Limited
Partner; and
5.10.4.3 to assist Limited Partners in recovering any tax so withheld,
provided that this Clause 5.10.4.3 shall not require the
General Partner to take any action which would result in the
General Partner or the Manager incurring any additional costs
unless the relevant Limited Partner has previously agreed in
writing to
34
reimburse all such costs to the General Partner or the Manager
(as appropriate). In particular, the General Partner agrees
that it shall:
(i) make (or cause the Partnership to make) any filings,
applications or elections necessary to obtain any
available exemption from, or refund of, any
withholding or other taxes imposed by any taxing
authority with respect to amounts distributable to
Limited Partners under this Agreement provided that
each Limited Partner shall cooperate with the General
Partner in making any such filings, applications or
elections, and if such co-operation is not forthcoming
from any Limited Partner, the General Partner shall be
released from its obligations under this Clause
5.10.4.3 in relation to that Limited Partner; and
(ii) use reasonable endeavours to provide each Limited
Partner, on request, with any information required in
order for such Limited Partner to obtain any available
exemption from, or refund of, any withholding or
similar taxes.
5.11 PARALLEL FUNDS AND CO-INVESTMENT AGREEMENT
5.11.1 The Partnership will enter into the Co-investment Agreement with the
other Parallel Funds for pro rata investment and divestment in parallel
on the terms of such agreement.
5.11.2 In addition the General Partner will use all reasonable endeavours to
structure Investments in order to:
(i) conduct the affairs of the Partnership and structure its
investments in such a manner that the Partnership will qualify
as a "venture capital operating company" within the meaning of
the Plan Assets Regulations; and
(ii) in connection with the investments to be made in Investee
Companies by the Partnership (whether directly or through the
use of wholly-owned intermediate holding companies) and the
other Parallel Funds, ensure that the Partnership shall be
accorded such management rights directly with respect to such
Investee Companies (which rights shall be exercised by the
Partnership solely for its own benefit) as are sufficient so
that the Partnership shall at all times qualify as a "venture
capital operating company" within the meaning of the Plan Assets
Regulations. Subject to the foregoing, the other Parallel Funds
shall not be precluded from obtaining comparable additional
rights from such Investee Companies for their own benefit.
5.12 TRADE OR BUSINESS INCOME
Notwithstanding any other provisions of this Agreement, nothing herein
shall require the Manager (although it may in its discretion use
reasonable endeavours to do so) to conduct the affairs of the
Partnership in a manner that does not cause any Limited Partner (or a
partner of a Limited Partner) that is not a "United States Person" (as
that term is defined in Section 7701 of the Code) to be deemed, solely
35
as a result of such Limited Partner's investment in the Partnership, to
be engaged in the "conduct of a trade or business within the United
States" within the meaning of Sections 871 and 882 of the Code.
6 PARTNERSHIP ACCOUNTS, ALLOCATIONS AND DISTRIBUTIONS
6.1 PARTNERSHIP ACCOUNTS
6.1.1 The General Partner shall prepare and approve accounts of the
Partnership in respect of each Accounting Period in accordance with
generally accepted accounting practice in the United Kingdom as may be
adjusted at the discretion of the General Partner in consultation with
the Auditors from time to time as set forth in the accounting policies
detailed in the Partnership's accounts, including a balance sheet,
income and expenditure account, a cash flow statement, a statement of
the amount of the current account, capital account and loan account of
each Partner and a summary of movements in such accounts during such
Accounting Period. These accounts will be presented in Sterling. The
General Partner or the Manager, as the case may be, shall cause such
accounts to be audited by the Auditors. A set of the audited accounts
including the report of the Auditors and footnotes describing the
accounting policies shall be furnished to each Partner as soon as
possible (but not later than 120 days) following the end of each
Accounting Period.
6.1.2 Each Partner shall have, inter alia, a capital account, a loan account
and a current account. The General Partner may determine (in good faith
and acting in the best interests of the Partnership) that a separate
loan account and current account will be established for Partners in
respect of each Investment in which the relevant Partner is
participating. The accounts of Partners will be operated as follows:-
6.1.2.1 the Capital Contribution of each Partner shall be credited to
his capital account;
6.1.2.2 the Loan Commitment drawdowns and Loan Commitment repayments
of each Partner shall be credited or debited to his loan
account (provided that if a loan account has been established
in respect of each Investment in which the relevant Partner is
participating, drawdowns and Loan Commitment repayments made
in respect of such Investment shall be allocated to the
relevant loan account);
6.1.2.3 the Income and Capital Proceeds (except to the extent that
they comprise repayment of Loan or Capital Contribution)
allocated to each Partner shall be credited to that Partner's
current account (provided that if a current account has been
established in respect of each Investment in which the
relevant Partner is participating, Income and Capital Proceeds
allocated to each Partner in respect of such Investment shall
be allocated to the relevant current account); and
PROVIDED THAT the General Partner may vary the accounting structure of
the Partnership to reflect properly the terms of this Agreement,
provided that any such variations do not cause the interests of any
Limited Partner to be adversely affected.
36
6.2 ALLOCATION OF DEBTS, LIABILITIES AND OBLIGATIONS
6.2.1 The Limited Partners shall have no personal obligation for the debts or
liabilities of the Partnership, except as provided in Clause 2.1.3 of
this Agreement and in the Act.
6.2.2 If at any time following the date when the full amount of the Loan
Commitments shall have been advanced, the liabilities of the Partnership
other than the Loans cannot be satisfied out of the Partnership's cash
funds, the General Partner will be liable to contribute an amount which,
when added to the Partnership's cash funds will be sufficient to meet
such liabilities, provided that any such contribution shall subsequently
be repayable to the General Partner (together with interest on the
amount of any such contribution outstanding from the date of payment by
the General Partner up to the date of repayment at the base rate of the
Bank of England from time to time) if and when cash funds become
available for such purpose.
6.3 ALLOCATIONS OF INCOME, CAPITAL GAINS AND CAPITAL LOSSES
6.3.1 Income, Capital Gains and Capital Losses in each Accounting Period shall
be allocated amongst the Partners on the last day of each Accounting
Period.
6.3.2 The General Partner shall have a first charge on any Income and Net
Capital Gains in respect of each Accounting Period which shall be equal
to 2 per cent. per annum of the Total Commitments (excluding Commitments
made pursuant to Clause 2.8.1 or otherwise made by the General Partner
or ▇▇▇▇▇▇▇▇▇ or any Associate thereof but including Commitments made by
employees of ▇▇▇▇▇▇▇▇▇ and its Associates) calculated from the First
Closing Date (and the Commitments of Subsequent Investors shall, for the
above purposes be treated as having been subscribed on the First Closing
Date) PROVIDED THAT with effect from the end of the Investment Period,
such percentage shall be 2 per cent. per annum of the aggregate
Acquisition Cost of Investments reduced by the Acquisition Cost of
Investments which have: (i) been Realised (or partially Realised) (and
for the avoidance of doubt, in the event an Investment is subject to a
reorganisation, recapitalisation or other similar transaction, the
General Partner may deem such an event not to be a Realisation (or, if
applicable, partial Realisation)) and not reinvested; or (ii) which have
been distributed in specie; or (iii) which have been fully and finally
written off (that is where the relevant Investee Company has been placed
in liquidation, receivership or administration or otherwise where the
Manager acting in good faith determines that such Investment should be
fully and finally written off). The amount of the General Partner's
Share for any Accounting Period of more or less than one year shall be
pro rata to the number of days in the relevant Accounting Period.
6.3.3 The General Partner's Share in each Accounting Period, calculated
pursuant to Clause 6.3.2 above shall be reduced by 86% of all
Transaction Fees received by the General Partner and the Manager during
such Accounting Period pursuant to Clause 5.9.3.3 (and if the amount of
such reduction is greater than the General Partner's Share for the
Accounting Period in question, the excess amount will be carried forward
and offset against the General Partner's Share to be allocated in the
next Accounting Period).
6.3.4 The following provisions shall apply in relation to the share of Income
and Net Capital Gains to be allocated to the General Partner in respect
of the General Partner's Share pursuant to Clause 6.3.2:-
37
6.3.4.1 there shall be allocated to the General Partner as a first
charge on the Income of the Partnership in any Accounting
Period an amount not exceeding the amount of the General
Partner's Share as calculated in accordance with Clause 6.3.2
(as adjusted by Clause 6.3.3) and the General Partner shall be
entitled to elect which items comprised within the Income of
the Partnership shall form the whole or a part of the Income
allocated to the General Partner;
6.3.4.2 in the event that the Income of the Partnership in any
Accounting Period shall be less than the General Partner's
Share there shall be allocated to the General Partner as a
first charge on the Net Capital Gains of the Partnership in
such Accounting Period an amount not exceeding the amount of
the General Partner's Share which remains unsatisfied out of
the Income;
6.3.4.3 in the event that the Income and the Net Capital Gains of the
Partnership in any Accounting Period shall be less than the
General Partner's Share, any deficiency (taking into account
amounts already drawn by the General Partner under Clause 6.8)
shall be paid to the General Partner as an interest free loan
but such payment shall not extinguish the amount of the
General Partner's Share outstanding. In the event that any
part of the General Partner's Share then outstanding is
satisfied in a subsequent Accounting Period by an allocation
of the Income or the Net Capital Gains to the General Partner
such allocation shall be applied in the discharge of an
equivalent amount of such loan.
6.3.5 After the allocation in respect of the General Partner's Share made
pursuant to Clause 6.3.2, the Income, Capital Gains and Capital Losses
of the Partnership in respect of any and each Investment in each
Accounting Period shall be allocated among the Partners' accounts as
follows:-
6.3.5.1 all Capital Losses relating to any Investment shall be
allocated to Investors who participate in such Investment
according to the Investor's Proportionate Share;
6.3.5.2 all Income and Capital Gains relating to any Investment (to
the extent not allocated to the General Partner pursuant to
Clause 6.3.2) shall be allocated to Investors who participate
in that Investment according to the Investor's Proportionate
Share until, in the case of Income and Capital Gains allocable
to the MD Limited Partners only, the Investment Repayment
Point for that Investment;
6.3.5.3 thereafter, a proportion of any remaining Income and Capital
Gains derived from such Investment Interest which would, but
for the operation of this Clause 6.3.5.3, otherwise be
allocated to the MD Limited Partners shall be allocated to the
Carried Interest Partner and that proportion shall be found by
multiplying the amount of Income or Capital Gain in question
and allocable to the MD Limited Partners by:
A
-
B
38
where A is the amount of Income or Capital Proceeds giving
rise to such Income or Capital Gain distributed to the Carried
Interest Partner and B is the total amount of Income and
Capital Proceeds allocable to the MD Limited Partners
referable to the event giving rise thereto. The balance of
Income and Capital Gains derived from an Investment and
allocable to the MD Limited Partners shall be allocated as
among the MD Limited Partners in the proportions set out in
Clause 6.3.5.2 (provided that in calculating the amount to be
allocated to each MD Limited Partner out of Income and Capital
Gains allocable to all MD Limited Partners participating in
the Investment, the determination of the "Investor's
Proportionate Share" shall not take into account any Limited
Partners who are not MD Limited Partners);
6.3.5.4 wherever an amount is allocated to the Carried Interest
Partner pursuant to Clause 6.3.5.3 there shall be transferred
from the current account of the MD Limited Partners
participating in the relevant Investment (in accordance with
their respective Investor's Proportionate Share, as between
themselves) to the current account of the Carried Interest
Partner an amount equal to D - C where C is the amount
allocated to the Carried Interest Partner pursuant to Clause
6.3.5.3 and D is the total amount distributed to the Carried
Interest Partner on that occasion.
6.3.6 For the avoidance of doubt, where, on the receipt of Income or the
Realisation of any Investment at any time, there is received or realised
more than the amount required to repay the amount to which Investors are
entitled pursuant to Clause 6.4.3, such part of the proceeds of such
Realisation as is in excess of such amount shall be treated as having
been realised after the Investment Repayment Point and the underlying
profit shall be allocated accordingly.
6.3.7 If any Partnership Assets are distributed in specie in accordance with
Clause 6.6, those assets shall be deemed to be realised for the purposes
of computing Income, Capital Gains and Capital Losses at their Value
arrived at for the purpose of that Clause.
6.3.8 Income earned on and Capital Gains arising on the disposal of
Investments made out of Capital Contributions and Loans advanced by
Investors on their respective First Drawdown Dates shall be credited to
the accounts of all Investors pro rata to their Commitments (provided
that the General Partner shall be entitled, in its sole discretion, to
make further adjustments, if appropriate, to the extent that any
Investors have been excused from an investment or to the extent that
there has been a default on a drawdown by an Investor or to take into
account the provisions applying to, respectively, MD Limited Partners
and Limited Partners who do not fall into such category). In the event
that any Income, Capital Gains or Capital Losses arise prior to the
Final Closing Date then the General Partner shall be entitled to make
such adjustment among the relevant Investor's accounts as it shall
reasonably consider necessary in the circumstances so that each Investor
shall have an interest in each such item pro rata to the size of its
Commitment in the Partnership as at the Final Closing Date.
39
6.3.9 Preliminary Expenses, Ongoing Expenses and General Partner's Share shall
be allocated among Investments in a manner which reflects the provisions
of Clause 6.4 and shall be charged to Investors' current accounts
accordingly.
6.4 APPLICATION OF CASH
In determining the amount of cash which shall be available for
distribution pursuant to the provisions of this Clause 6.4, the General
Partner may first apply any Income and Capital Proceeds in respect of
each (and every) Investment in paying the expenses and liabilities of
the Partnership (which shall include any Ongoing Expenses and any
Preliminary Expenses which become payable by the Partnership in
accordance with Clause 5.9.1). Following such payments, the General
Partner shall, in determining the priority in which the cash of the
Partnership shall be applied, apply cash which would otherwise be
available for distribution:
(i) in the payment of the General Partner's Share (to the extent not
already drawn by the General Partner pursuant to Clause 6.8);
(ii) in repayment of contributions referred to in Clause 6.2.2;
(iii) in repayment of capital to the Carried Interest Partner pursuant
to Clauses 3.1 or 4.4.3; and
(iv) in making any payment in connection with the expulsion or
withdrawal of a Limited Partner pursuant to Clauses 7.6 or 7.7
or 7.8.
To the extent that Preliminary Expenses, Ongoing Expenses or General
Partner's Share arise at a time when there is no cash available within
the Partnership, the General Partner shall meet such obligations and
liabilities of the Partnership through a drawdown of Loan Commitment
from Limited Partners (which shall be repayable out of Distributions
made pursuant to this Clause according to the provisions of Clause 6.4.2
below). All Preliminary Expenses, Ongoing Expenses and General Partner's
Share shall be allocated by the General Partner, and if necessary
revised from time to time, between Investments on such basis as it deems
to be fair and reasonable Thereafter, all cash and any distributions in
specie relating to any Investment shall be applied according to the
provisions of Clauses 6.4.1 to 6.4.7 below, subject to Clause 4.4:-
6.4.1 first in distributing to each Investor who participates in that
Investment a cumulative amount equal to the sum of: (i) an amount equal
to that Investor's Proportionate Share of the Acquisition Costs of the
Investment giving rise to the Distribution; (ii) cumulative amounts
equal to the aggregate of such Investor's Proportionate Share of the
Acquisition Costs of all Investments which have previously been the
subject of a Realisation but which have not previously been distributed
to such Investor; and (iii) an amount of such Investor's Proportionate
Share of the aggregate amount of net write downs which have been made in
relation to Unrealised Investments, in all cases save to the extent not
taken into account in a prior distribution; and then
6.4.2 in distributing to each Investor who participates in any Investment
referred to in (i) - (iii) of Clause 6.4.1 above the Investor's
Proportionate Share of the Preliminary Expenses, the Ongoing Expenses
and the General Partner's Share paid by the Partnership and funded out
of Loan Commitments drawn down from Limited Partners and allocated to
that Investment (such allocation to be made, and if necessary revised
from time to time, by the Manager on such basis as it
40
considers to be fair and reasonable), in all cases save to the extent
not taken into account in a prior distribution; and then
6.4.3 following the operation of Clauses 6.4.1 and 6.4.2, cash and
distributions in specie relating to an Investment shall be attributed
between the MD Limited Partners and the Limited Partners who are not MD
Limited Partners according to the respective aggregate Investors'
Proportionate Shares which are attributable to each category, and cash
and distributions in specie allocable to the Limited Partners who are
not MD Limited Partners shall be distributed in full to such Limited
Partners in accordance with their Capital Contributions as between
themselves subject to Clause 9.5;
6.4.4 cash and distributions in specie allocable to the MD Limited Partners on
the basis of the provisions of Clause 6.4.3 above shall be applied in
distributing to each MD Limited Partner the Investor's Proportionate
Share (as between the MD Limited Partners participating in the
Investment) of the amount of such distribution such that the cumulative
amount distributed to date under this Clause 6.4.4 to MD Limited
Partners shall be equal to the Preferred Return; and then
6.4.5 in distributing to the Carried Interest Partner an amount such that the
cumulative amount distributed to date under this Clause 6.4.5 is equal
to 16.279 per cent. of the Preferred Return distributed to date under
Clause 6.4.4; and then
6.4.6 in distributing any further sums to the MD Limited Partners and the
Carried Interest Partner pro rata to their respective Capital
Contributions (for the avoidance of doubt excluding the Capital
Contributions of the Limited Partners who are not MD Limited Partners)
subject to Clause 9.5.
6.4.7 The Preferred Return shall be the aggregated amount, calculated on a
daily basis at each point where, in relation to any Investment, a
Distribution is made pursuant to this Clause 6.4, as is equal to an
annual amount of 8% (compounded annually on 31 December) from the date
of the drawdown from MD Limited Partners of the relevant amounts until
the date of Distribution, on the sum of:
6.4.7.1 (i) the Acquisition Costs of any Investment attributable to
the MD Limited Partners which has been realised; and (ii) the
aggregate amount of any net write downs of Investments
allocable to the MD Limited Partners existing at the time of
the Distribution (save in each case where amounts otherwise
falling within this Clause 6.4.7.1 have been distributed under
Clause 6.4.1); and
6.4.7.2 an amount equal to the Preliminary Expenses, the Ongoing
Expenses and the General Partners Share paid by the
Partnership but funded out of Loan Commitments drawn down from
MD Limited Partners and allocated to those Investments
referred to in Clause 6.4.7.1 (save where such amounts falling
within this Clause 6.4.7.2 have previously been taken into
account in a prior distribution).
41
6.5 DISTRIBUTIONS OF CASH
6.5.1 DISTRIBUTIONS OF INCOME
Subject to the provisions of Clauses 6.4 and 6.5.4, all of the Income of
the Partners shall be distributed to them within 30 days of the end of
each Relevant Period, or at more frequent intervals as the General
Partner in its reasonable discretion decides.
6.5.2 DISTRIBUTIONS OF CAPITAL
Subject to the provisions of Clauses 6.5.3 and 6.5.4, distributions of a
capital nature shall be made at such time or times, as soon as
practicable after the relevant amount becomes available for
distribution.
6.5.3 RE-INVESTMENT AND TEMPORARY INVESTMENTS
The General Partner shall not be obliged to cause the Partnership to
distribute monies where, if such monies were distributed, they would be
available to be re-drawn pursuant to Clause 4.1.1.2, or (up to the
amount of the Acquisition Cost thereof) employed in respect of Temporary
Investments or Investments which were realised (i) during the Investment
Period and (ii) within eighteen months of their acquisition by the
Partnership which monies shall, in the reasonable discretion of the
General Partner, be available for re-investment or, alternatively, for
distribution.
6.5.4 LIMITATIONS ON DISTRIBUTIONS
The General Partner shall not be obliged to cause the Partnership to
make any distribution pursuant to this Clause 6:-
6.5.4.1 unless there is sufficient cash available for such
distribution;
6.5.4.2 which would render the Partnership insolvent;
6.5.4.3 which, in the reasonable opinion of the General Partner, would
or might leave the Partnership with insufficient funds to meet
any future contemplated obligations or contingencies including
the General Partner's Share; or
6.5.4.4 if following such distribution, the aggregate of the balances
on any Partner's income and capital accounts would be less
than nil.
6.5.5 MAKING OF DISTRIBUTIONS
All distributions made to the Limited Partners of either an income or a
capital nature in relation to any Investment Interest shall be made
initially against Investors' loan accounts until the Loans in relation
to such Investment (or the proportion of a Loan in relation to any
Investment which has been written down) have been repaid and then shall
be made against Limited Partners' current accounts.
6.6 DISTRIBUTIONS IN SPECIE
6.6.1 The General Partner shall be entitled at any time to determine that the
Partnership should make a distribution of assets in specie on the basis
set out in this Clause
42
6.6 (although it is not the general intention of the General Partner to
do so) and to determine in good faith and acting reasonably the Value
attributable to such assets.
6.6.2 If the General Partner intends that the Partnership should make any
distribution of assets in specie, it shall then give the Limited
Partners written notice thereof prior to the proposed date of
distribution, specifying:
6.6.2.1 the date of the proposed distribution;
6.6.2.2 the assets to be distributed (including, where appropriate,
the class and number of securities);
6.6.2.3 the basis of valuation of such assets, the Value to be
attributed to such assets and (where appropriate) the per
share cost of such assets (or an indication of the basis on
which the Value of such assets will be calculated on the date
of the proposed distribution, in which case the Value
attributed and (if appropriate) the per share cost shall be
notified to the Limited Partners on such date); and
6.6.2.4 the name of the brokerage firm, if applicable, handling the
proposed distribution on behalf of the Partnership.
6.6.3 If the General Partner receives any objections from any Partner, it
shall use reasonable endeavours to sell the securities proposed to be
distributed in specie to such Partner (and, for the avoidance of doubt,
such sale may be to ▇▇▇▇▇▇▇▇▇ or an Associate thereof) provided that the
costs of such sale and any losses or gains in respect of such sale shall
be for the account of such Partner but if, after using reasonable
endeavours, the General Partner fails to make such sale it shall not be
obliged to take any further action and, subject to the restrictions set
out below, may distribute the relevant securities in specie to the
Partners. The General Partner may agree with the relevant Limited
Partner that ▇▇▇▇▇▇▇▇▇ or an Associate thereof shall hold the relevant
securities for the benefit of the Limited Partners on such terms as may
be agreed.
6.6.4 Distributions in specie shall only be made during the life of the
Partnership in relation to securities which shall have achieved a
Listing and which are not subject to any formal dealing or contractual
restrictions. For the avoidance of doubt, where part only of the
securities in any Investee Company has achieved a Listing, only the part
of such securities for which a Listing has been achieved shall be
eligible for distribution in specie.
6.6.5 In no event shall a distribution in specie be made to a Limited Partner
if there is a reasonable likelihood that such Limited Partner would be
prohibited by applicable law or regulations from directly holding such
security to be distributed or in any case in which applicable law or
regulations prohibit the issuance or sale to such Limited Partner of the
securities which would otherwise be distributed to such Limited Partner.
In such a case, the General Partner shall use reasonable endeavours to
sell the securities proposed to be distributed in specie to such Limited
Partner provided that the costs of such sale and any losses or gains in
respect of such sale shall be for the account of such Limited Partner.
For the avoidance of doubt, such Limited Partner shall not be entitled
to receive any sums from the Partnership in lieu of the distribution in
specie pending the sale of such securities by the General Partner.
43
6.6.6 Distributions in specie of securities of any class shall be made on the
same basis as distributions of cash such that any Partner in receipt of
the distributions shall receive the relevant proportionate amount of the
total securities of such class available for distribution or (if such
method of distribution is for any reason impracticable) such that each
such Partner shall receive as nearly as possible the relevant
proportionate amount of the total securities of such class available for
distribution together with a balancing payment in cash in the case of
any Partner who shall not receive the full proportionate amount of
securities to which he would otherwise be entitled under this Agreement.
Any such distribution in specie shall be applied in the order set out in
Clause 6.4 at the Value of the assets concerned.
6.7 TAX CREDITS
For the purposes of this Clause, the amount of Income allocated or
distributed to Partners shall be deemed to be the aggregate of such
income and United Kingdom income tax withheld and foreign tax withheld
(in the case of interest income) and any foreign tax withheld or imputed
(in the case of dividend income) ("Tax Credits"), provided that where,
in the case of the General Partner, any part of the General Partner's
Share pursuant to Clause 6.8 includes Tax Credits it shall be entitled
to an interest-free loan from the Partnership of an amount equal to the
amount of such Tax Credits until such time as the General Partner
obtains repayment from the tax authorities of an amount equal to the Tax
Credits (or it receives an equivalent benefit) at which time it shall
repay such loan.
6.8 DRAWINGS BY THE GENERAL PARTNER
6.8.1 The drawings of General Partner's Share for any Relevant Period shall be
determined by multiplying the General Partner's Share for the Accounting
Period of which the Relevant Period forms part by a fraction which has
the number of days in the Relevant Period as its numerator and the
number of days in the Accounting Period as its denominator. The General
Partner shall be entitled to make drawings out of the Partnership's cash
funds on the First Drawdown Date in respect of the period from the First
Closing Date to 30 June 2007 and thereafter on 1 January and 1 July in
each year or, if such date is not a Business Day, on the Business Day
immediately preceding such date on account of its share of Income and
Capital Gains to be allocated to the General Partner in respect of the
following Relevant Period due to it pursuant to Clause 6.3.2 (and taking
into account reductions made pursuant to Clause 6.3.3) (meaning, for the
avoidance of doubt that the General Partner's Share shall be payable
semi-annually in advance at the start of each Relevant Period). If, at
any time during or after a relevant Accounting Period, it should be
discovered that drawings made in respect of that relevant Accounting
Period are less than the General Partner's Share pursuant to the
foregoing, then additional drawings shall be made to make good the
shortfall. If, at any time, it is discovered that drawings made are more
than the General Partner's Share, then the excess shall promptly be
repaid to the Partnership by the General Partner.
6.8.2 In no circumstances, save as stated in Clause 6.8.1, shall any drawings
made pursuant to this Clause be recoverable from the General Partner
other than by a set-off against allocations of Income and Capital Gains.
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6.9 REPAYMENTS OF CARRIED INTEREST
6.9.1 As soon as practicable following termination of the Partnership,
howsoever caused, and in any event not later than 90 days thereafter,
the aggregate of all distributions made to the MD Limited Partners shall
be calculated by the General Partner (acting in good faith and in the
best interests of the Partnership) in order to ensure that (if adequate
Distributions were available):-
6.9.1.1 there has been distributed to (a) the MD Limited Partners
(other than defaulting Investors pursuant to Clause 4.4 or
Investors expelled pursuant to the provisions of Clause 7.6)
the amount of their respective Loans drawn down together with
the Aggregate Preferred Return; and then
6.9.1.2 there has been distributed to the Carried Interest Partner the
amount of 16.279% of the Aggregate Preferred Return pursuant
to Clause 6.4.5; and then
6.9.1.3 in addition to the amounts described in 6.9.1.1 above, but
subject to Clause 6.9.1.2, the MD Limited Partners have
received 86% of amounts by which Distributions received by (i)
such MD Limited Partners and (ii) the Carried Interest Partner
pursuant to Clauses 6.4.5, 6.4.6 and 9.5.4 exceed such MD
Limited Partners' Loan Commitments as shall have been drawn
down.
6.9.2 In the event that the calculations show that the provisions of either
Clause 6.9.1.1 or, subject to Clause 6.9.1.2, Clause 6.9.1.3 are not
satisfied then the Carried Interest Partner shall return to the
Partnership (for distribution to the MD Limited Partners), within 180
days of the termination of the Partnership, an amount (either in
securities which have been distributed in specie to the Carried Interest
Partner pursuant to the terms of this Agreement and which are still the
subject of a Listing, having a value calculated pursuant to Clause
6.9.3, or in cash or a combination of the two at the sole discretion of
the Carried Interest Partner) equal to the lesser of:-
6.9.2.1 the aggregate amount of cash distributed to the Carried
Interest Partner together with the aggregate Value (at the
date of their respective distribution) of any assets of the
Partnership which have been distributed in specie to the
Carried Interest Partner, in each case other than in its
capacity as an Investor or received by way of General
Partner's Share, net of any taxes paid or payable in respect
thereof (whether by the Carried Interest Partner or by any
other person) and not recoverable; and
6.9.2.2 the aggregate amount of cash distributed to the Carried
Interest Partner together with: (i) the aggregate Value (at
the date of termination of the Partnership) of any assets of
the Partnership which have been distributed in specie to the
Carried Interest Partner pursuant to Clause 6.6; or (ii) if
any such assets have been sold at a higher price, the
aggregate proceeds of sale of such assets, in each case other
than in its capacity as an Investor or received by way of
General Partner's Share and net of any taxes paid or payable
in respect thereof (whether by the Carried Interest Partner or
by any other person) and not recoverable; and
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6.9.2.3 such amounts as are required to satisfy the provisions of
Clauses 6.9.1.1 and 6.9.1.3;
6.9.3 For the purposes of this Clause 6.9:-
6.9.3.1 the value of quoted securities on the date of their return to
the Partnership will be the average of the mid-market price
(as shown in the official publication of the relevant stock
exchange or market) for the five working days prior to and
including the last Business Day before such date; and
6.9.3.2 the value of other securities on the date of their return to
the Partnership shall be such amount as is reasonably
determined by the General Partner.
7 ASSIGNMENT OF INTERESTS OR SHARES AND RESIGNATION FROM THE PARTNERSHIP
7.1 ASSIGNMENT OF INTEREST OF THE GENERAL PARTNER AND THE CARRIED INTEREST
PARTNER
7.1.1 The General Partner shall not sell, assign, transfer, exchange, pledge,
encumber or otherwise dispose of all or any part of its rights and
obligations as a general partner, or voluntarily withdraw as the general
partner of the Partnership without the sanction of an Investors' Special
Consent (other than its interest as an Investor, which shall be governed
by Clause 7.2). Notwithstanding this, the General Partner may assign or
transfer all or any part of its rights and obligations as a general
partner to an Associate without the consent of Investors.
7.1.2 Notwithstanding the provisions of Clause 7.1.1 above, the General
Partner may determine, acting in its sole discretion and in the light
of, inter alia, any applicable tax treatment in any jurisdiction, that
all or part of the commitment of any Investor in the Partnership should
be channelled through the General Partner. In the event that such
discretion is exercised, any Limited Partner so notified shall transfer
part of his Interest to the General Partner (including the pro rata
amount of the Capital Contribution and outstanding Loan Commitment) and
shall become a limited partner in the General Partner and make an
equivalent investment commitment in respect of his capacity as a limited
partner in the General Partner as that part of the Interest which is
transferred to the General Partner. Each Limited Partner undertakes that
he will in such circumstances execute such transfer documents, deeds of
adherence and ancillary documentation as the General Partner may in its
discretion determine in required to effect the provisions of this
Clause.
7.2 RESTRICTION ON ASSIGNMENT OF INTEREST OF INVESTORS
7.2.1 No Transfer, whether voluntary or involuntary, shall be valid or
effective except with the prior written consent of the General Partner,
such consent not to be unreasonably withheld or delayed, PROVIDED THAT
the General Partner will withhold such consent if it considers that:-
7.2.1.1 the Transfer would cause the Partnership to be disqualified as
a limited partnership or be terminated;
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7.2.1.2 any proposed transferee of an Interest intends to hold the
said Interest otherwise than for itself beneficially;
7.2.1.3 the Transfer would result in the transferor or the transferee
holding a Commitment of less than the minimum size of
Commitment applicable to the respective category of Investor,
(unless such requirements are waived by the General Partner);
7.2.1.4 any of the following apply:
(i) the Transfer would result in a violation of applicable
law, including United States Federal or State
securities laws, or any term or condition of this
Agreement;
(ii) as a result of the Transfer, the Partnership would be
required to register as an investment company under
the United States Investment Company Act of 1940, as
amended;
(iii) the Transfer would cause the General Partner or the
Manager to become subject to registration under the
United States Investment Advisers Act of 1940, as
amended, or any state law requiring the registration
of investment advisers;
(iv) the Transfer would cause the Partnership to be
disqualified or terminated as a partnership including
for applicable tax purposes but only if such
termination would result in material adverse tax
consequences to the Limited Partners;
(v) the Transfer would result in the assets of the
Partnership being treated as "plan assets" under
ERISA;
(vi) the Transfer would require such Interest to be
subdivided for the purposes of resale into units
smaller than a unit costing, by reference to its
initial offering price, less than the Sterling
equivalent for the time being of US $100,000; or
(vii) the Transfer would constitute a transaction effected
through an "established securities market" within the
meaning of the United States Treasury Regulations
promulgated under Section 7704 of the Code or
otherwise would cause the Partnership to be a
"publicly traded partnership" within the meaning of
Section 7704 of the Code.
PROVIDED THAT no person shall be admitted to the Partnership as a
Substitute Investor without the written consent of the General Partner,
such consent not to be unreasonably withheld or delayed, subject to the
matters referred to in Clause 7.2.1.1 to 7.2.1.4 and
PROVIDED FURTHER THAT the interests in the Partnership may not be
separated into a Loan and a Capital Contribution component for purposes
of
47
Transfer so that a Loan may be transferred only with the Capital
Contribution component to which it relates.
7.2.2 If a Limited Partner wishes to effect a Substitution or Transfer of all
or part of its Interest it shall apply to the General Partner for
consent by not less than 30 days' prior written notice and shall furnish
such information in relation to the proposed Substitution or Transfer or
the proposed Substitute Investor as may be required respectively by the
General Partner. The transferring Limited Partner or the transferee
shall bear all costs and expenses arising in connection with any such
permitted Substitution or Transfer, including (without limitation)
reasonable legal fees arising in relation thereto and the transferring
Limited Partner, the transferee and all other Partners shall be obliged
to join in the giving of any election required by the General Partner.
7.2.3 Prior to a proposed Substitution or Transfer, the General Partner shall
be entitled to require a written opinion of responsible counsel (which
may be in-house counsel to the transferring Limited Partner or an
Associate of such Limited Partner), satisfactory in form and substance
to the General Partner, to the effect that such Substitution or Transfer
will not result in:-
7.2.3.1 the Partnership (or any other Parallel Fund) being required to
register, or seek an exemption from registration, as an
investment company under the United States Investment Company
Act of 1940; or
7.2.3.2 a violation of any other applicable legal or regulatory
requirements designated by the General Partner; or
7.2.3.3 the Partnership being classified as an association taxable as
a corporation for United States Federal income tax purposes;
or
7.2.3.4 the assets of the Partnership being treated as "plan assets"
under ERISA.
Such opinion shall also cover such other matters as the General Partner
may reasonably request.
7.2.4 The General Partner agrees to co-operate with any Limited Partner making
a Substitution or Transfer by providing promptly such records and other
factual information as may be reasonably requested with respect to any
proposed transfer.
7.2.5 No Substitution may be made unless the proposed transferee has executed
and delivered to the General Partner a Subscription Agreement in a form
satisfactory to the General Partner. Neither the General Partner nor the
Manager shall have any obligation to assist any Limited Partner in
procuring a purchaser of any Interest.
7.3 POSITION OF SUBSTITUTE INVESTORS
7.3.1 Any Substitute Investor shall be bound by all the provisions of this
Agreement and, as a condition of giving its consent to any Substitution
to be made in accordance with the provisions of this Clause, the General
Partner shall require the proposed Substitute Investor to acknowledge
its assumption (in whole or in part) of the obligations of the
transferring Investor by entering into this
48
Agreement as a signatory or by executing a Subscription Agreement in a
form satisfactory to the General Partner and becoming a Partner. Neither
the Partnership nor the General Partner nor the Manager shall incur any
liability for allocations and distributions made in good faith to the
transferring Investor until the written instrument of transfer has been
received by the Partnership, details of the new Partner have been
registered in accordance with the provisions of the Act and recorded in
its books and the effective date of the Substitution has passed.
7.3.2 Notwithstanding any other provisions of Clause 7.2 or this Clause 7.3,
each Investor undertakes to notify the General Partner forthwith in
writing of the full names of any entity or person to whom it proposes to
Transfer any Interest, of any change in its own name and any other
information relating to the Transfer which the General Partner may
reasonably request.
7.4 ASSIGNMENT OF INTERESTS IN VIOLATION OF THIS CLAUSE
No Substitution or Transfer of an Interest in violation of this Clause
shall be valid or effective, and the Partnership shall not recognise the
same, for the purposes of making payments of Income or Capital or
repayments of Loan or otherwise with respect to Interests in the
Partnership.
7.5 RESIGNATION OF GENERAL PARTNER
GCP Europe General Partnership L.P. may not resign as General Partner
during the term of the Partnership, unless first consented to by an
Investors' Special Consent.
7.6 EXPULSION OF INVESTORS
If the General Partner shall receive notice or otherwise become aware
that any Investor is the subject of any statutory or regulatory
prohibition or that there are other facts, matters or circumstances
(including possible money laundering activities) as a result of which
such Investor was not legally authorised to subscribe for its
Commitment, the General Partner shall have the right to expel such
Investor from the Partnership, in which event the General Partner shall,
as soon as the Partnership is able to do so, return to such Investor the
amount of his Capital Contribution and any Loan then outstanding
PROVIDED THAT the amount returned to such Investor shall not exceed the
value of the Investments attributable to that Partner's Interest as
shown in the last quarterly client report, whereupon such Investor shall
cease to have any Interest whatsoever in the Partnership.
7.7 WITHDRAWAL OF LIMITED PARTNERS
7.7.1 No Investor shall have the right to withdraw from the Partnership other
than in the circumstances set out in Clause 7.7.2.
7.7.2 A Limited Partner may be required to withdraw from the Partnership if,
in the reasonable opinion of the Manager:
7.7.2.1 by virtue of that Limited Partner's Interest, any assets of
the Partnership may be characterised as assets of an employee
benefit plan subject to ERISA, whether or not such Limited
Partner is subject to ERISA; or
49
7.7.2.2 by virtue of that Limited Partner's Interest, the Partnership
or any Partner may be subject to any requirement to register
under the US Investment Company Act of 1940, as amended.
If the General Partner intends to require the withdrawal of a Limited
Partner pursuant to this Clause 7.7.2, the General Partner shall give
reasonable notice of such intention to such Limited Partner and, if
requested by such Limited Partner, deliver to such Limited Partner an
opinion of counsel confirming that an event described in Clause 7.7.2.1
or Clause 7.7.2.2 has occurred, prior to requiring the withdrawal of
such Limited Partner. Withdrawals pursuant to these provisions will be
effected by the Partnership's purchase of such Limited Partner's
Interest at the purchase price determined in accordance with the
procedures and for the consideration set forth in Clause 7.7.6 provided
that the Manager shall use all reasonable efforts to take such actions
as it deems necessary and appropriate to prevent or cure such result in
accordance with the procedures set out in Clause 7.7.3 and in particular
shall use all reasonable efforts to assist each ERISA Partner in finding
a purchaser for its Interest and shall (subject to the provisions of
Clause 7.2) permit the transfer of all or a portion of the Interests of
any ERISA Partner to such purchaser.
7.7.3 If any ERISA Partner shall deliver to the General Partner an opinion of
counsel (which opinion and counsel shall be reasonably satisfactory to
the General Partner) to the effect that, as a result of the manner in
which the activities of the Partnership are conducted or the terms upon
which any Investments are made or continued, there is a substantial
likelihood that the Partnership Assets may be characterised as "plan
assets" under ERISA or the Code or it would otherwise constitute a
violation of applicable law, rule or regulation for the ERISA Partner to
continue as a Limited Partner in the Partnership (which opinion shall be
delivered by the General Partner to all other ERISA Partners), the
General Partner shall then as promptly as practicable use all reasonable
endeavours to take such actions as it deems necessary and appropriate to
prevent or cure such result, taking into account the interests of all
Partners and of the Partnership as a whole. Without limiting the
generality of the foregoing, the General Partner may but shall not be
obliged to
7.7.3.1 re-negotiate the terms of any Investment or otherwise modify
the manner in which the Partnership conducts its business; or
7.7.3.2 permit the transfer, in accordance with the provisions of
Clause 7.2, of all or a portion of the Interests of any of the
ERISA Partners; or
7.7.3.3 cause the sale of the Interest of such ERISA Partner to a
Substitute Investor at the purchase price established pursuant
to Clause 7.7.6; or
7.7.3.4 require, by notice to such ERISA Partners, any or all ERISA
Partners completely or partially to withdraw from the
Partnership in accordance with the provisions of Clause 7.7.4.
If within 30 Business Days after receipt of such opinion, the General
Partner has not either (i) delivered to the ERISA Partners an opinion of
counsel (which opinion and counsel shall be to the reasonable
satisfaction of a majority (by amount of Commitments) of such ERISA
Partners), or such other evidence as shall be to the reasonable
satisfaction of a majority (by amount of Commitments)
50
of the ERISA Partners, that the Partnership Assets do not constitute
"plan assets" under ERISA or the Code or that it would not constitute a
violation of applicable law, rule or regulation for the ERISA Partner to
continue as a Limited Partner in the Partnership or, (ii) found a
Substitute Investor to purchase the Interest of each ERISA Partner so
affected, then each such ERISA Partner will have the option to withdraw
completely or partially from the Partnership, by notice to the General
Partner, in accordance with the provisions of Clause 7.7.4.
7.7.4 A complete or partial withdrawal pursuant to this Clause 7.7 will be
effected by the Partnership's purchase of the withdrawing Limited
Partner's Interest at the purchase price determined in accordance with
Clause 7.7.6 and in accordance with the procedures set out in Clause
7.7.7. The effective date of any withdrawal pursuant to this Clause
7.7.4 shall be the last day of the month in which notice of such
withdrawal was given pursuant to Clause 7.7.3.
7.7.5 The costs of any Limited Partner for obtaining or seeking to obtain an
opinion of counsel for the purposes of this Clause 7.7 shall be borne by
such Limited Partner.
7.7.6 In the event that the Partnership purchases the Interest of any Limited
Partner pursuant to the provisions of this Clause 7.7, the purchase
price therefor shall be the amount which such Limited Partner would have
been entitled to receive pursuant to Clause 9.5 if the Partnership had
been liquidated and terminated as of the date of such purchase
determined on the basis of the audited and unaudited financial
statements and records of the Partnership. For the purposes of
determining the amount of the distribution to be made to such Limited
Partner, and the value of each of the Partnership's assets, the
reasonable determination of the General Partner shall be deemed to be
conclusive, provided that if the applicable Limited Partner disputes in
good faith and on reasonable grounds the valuation or distribution
amount pursuant to this Clause 7.7.6, such dispute shall be resolved by
an appraiser selected by the General Partner with the consent of the
applicable Limited Partner (such appraiser to be a suitable merchant
bank or accountancy firm). If within 15 days, the parties cannot agree
on such an appraiser, the applicable Limited Partner and the General
Partner shall each select an appraiser, and such firms shall confer, and
agree upon a third firm to serve as the appraiser (such appraiser to be
a suitable merchant bank or accountancy firm). The value of the assets
and the distribution amounts as determined by such appraiser shall be
final and conclusive on the applicable Limited Partner, the Partnership
and the General Partner and the cost of any such dispute resolution
shall be borne by the applicable Limited Partner.
7.7.7 Such distribution to the withdrawing Limited Partner shall to the
maximum extent reasonably practicable be made in securities of Investee
Companies (whether by equitable transfer or otherwise), but to the
extent this is not reasonably practicable shall be payable in cash, cash
equivalents and/or or in any combination thereof. The making of any such
payment in specie shall be subject to the following:
(a) the withdrawing Limited Partner shall receive its pro rata share
of each Investment of the Partnership, unless otherwise required
by law or contract;
(b) the withdrawing Limited Partner shall be bound by the provisions
of any agreements relating to such Investment, to the extent
such agreements so provide;
51
(c) the General Partner shall, subject to the consent of the
withdrawing Limited Partner, be given a revocable proxy with
respect to the securities of each Investee Company distributed
to the withdrawing Limited Partner;
(d) to the extent that the General Partner or the Partnership is
subject to any prior restrictions or Commitments as to exercise
of voting, tender, or similar rights pertinent to such
securities and for so long as the withdrawing Limited Partner
holds such securities, the General Partner and the withdrawing
Limited Partner will co-operate with respect to the exercise of
such rights to ensure that such exercise is carried out in a
manner consistent with ERISA and the withdrawing Limited
Partner's governing instruments, taking into account (to the
extent so consistent) any such prior restrictions or
Commitments;
(e) in the event that the withdrawing Limited Partner sells any such
securities while such prior restrictions or Commitments are in
effect, the withdrawing Limited Partner agrees to use reasonable
efforts, to the extent consistent with ERISA, to obtain the
buyer's co-operation with respect to the exercise of such rights
as described above;
(f) at the request of the Limited Partner, the General Partner shall
use reasonable efforts to assist the Limited Partner in selling
any such securities provided that, in the General Partner's
judgment, such sale would not impair the interests of the
Partnership or the remaining Partners;
(g) the Limited Partner may elect to defer receipt of a portion of
the distribution on such terms as such Limited Partner and the
General Partner may agree at the time;
(h) the General Partner will not make a distribution in specie under
this Clause 7.7.7 where the withdrawing Limited Partner delivers
a written opinion of counsel (which shall be reasonably
satisfactory to the General Partner and its counsel) that there
is a material risk that receipt of the proposed distribution (or
portion thereof) of securities in specie would:
(i) cause such Limited Partner to be in violation of, or in
breach of its fiduciary duties under, ERISA; or
(ii) cause the underlying assets of the entity whose
securities are proposed to be distributed to be deemed
to be "plan assets" (within the meaning of the Plan
Assets Regulation) of an ERISA Partner.
Notwithstanding the foregoing, the Partnership shall not be
required to sell Investments, in order to make such payments, in
advance of the time at which the General Partner, in the best
interests of the Partnership (in the General Partner's sole and
absolute discretion), would otherwise cause such Investments to
be sold.
7.7.8 In the event of the withdrawal of any MD Limited Partner from the
Partnership pursuant to this Clause 7.7 the Carried Interest Partner
shall be repaid part of its Capital Contribution so that the amount of
its Capital Contribution (but ignoring any Capital Contribution made as
an Investor) shall continue to equal 14% of the
52
total Capital Contributions made by MD Limited Partners immediately
following such withdrawal.
7.8 TERMINATION OF EMPLOYMENT
Upon the termination of an Eligible Employee's employment with Greenhill
(or, if applicable, an Associate) or termination of an Eligible
Employee's relationship as a senior adviser or consultant to Greenhill
(or, if applicable, an Associate) in each case for any other reason than
Retirement, the General Partner, acting in its sole discretion, shall
either: (i) reduce or cancel the outstanding Commitment of the relevant
Limited Partner (including, for the avoidance of doubt a Limited Partner
who is an Eligible Family Member) (on such terms as the General Partner
may in its sole discretion determine (which may include leaving such
Limited Partner obligated to fund draw downs of Loan Commitment to meet
Ongoing Expenses and General Partner's Share which would otherwise be
attributable to such Limited Partner up to the amount of such Limited
Partner's outstanding Loan Commitment immediately prior to such
reduction or cancellation)); or (ii) require the outstanding Loan
Commitment of the Limited Partner to be assigned to the General Partner
(or, if the General Partner elects not to assign such obligations, to
one or more other Limited Partners). For the avoidance of doubt, the
relevant Limited Partner shall continue to be entitled to returns in
relation to those Investments in which he was participating at the date
of the termination of his employment (or relationship as a senior
adviser or consultant). The General Partner may, if applicable, require
a proportion of the Capital Contribution of the relevant Limited Partner
to be transferred to the General Partner (in its capacity as an
Investor) and in addition may cause the Carried Interest Partner to be
repaid part of its Capital Contribution so as to ensure that its Capital
Contribution as Carried Interest Partner continues to equal 14% of the
total Capital Contributions of MD Limited Partners. The General Partner
may, acting in good faith, make such adjustments to the accounts and/or
accounting structure of the Partnership as it may reasonably determine
are necessary to implement the provisions of this Clause 7.8
8 MEETINGS
8.1 The General Partner may convene a general meeting of the Partnership as
an annual general meeting in each calendar year in addition to any other
meetings held in that year, and shall specify the meeting as such in the
notice calling it.
8.2 All general meetings other than annual general meetings shall be called
extraordinary general meetings.
8.3 The General Partner may, whenever it thinks fit, convene a general
meeting of the Partnership. A general meeting shall also be convened
upon the requisition of Investors holding in aggregate greater than 10%
of Total Commitments.
8.4 General meetings shall be called by at the least 21 days' notice in
writing to each Partner. The notice shall be exclusive of the day on
which it is served or deemed to be served and of the day for which it is
given and shall specify the place, the day and the hour of the meeting,
the details of the resolutions to be proposed and the general nature of
any other business to be conducted, provided that the general meeting
shall, notwithstanding that it is called by shorter notice than that
specified in this Clause, be deemed to have been duly called if it is so
agreed:-
53
8.4.1 in the case of a meeting called by the General Partner, by all the
Partners; and
8.4.2 in the case of any other meeting, by an Investors' Special Consent (and,
in relation to such Investors' Special Consent, the General Partner
shall be entitled to vote as an Investor in respect of its Commitment).
8.5 The accidental omission to give notice of a meeting to, or the
non-receipt of a notice of a meeting by, any Partner shall not
invalidate the proceedings at the meeting.
8.6 No business shall be transacted at any general meeting unless a quorum
of Partners is present at the time when the meeting proceeds to
business; save as herein otherwise provided, two Partners present in
person by telephone or by proxy shall be a quorum, of whom one shall be
the General Partner and one shall be an Investor other than the General
Partner, provided further that in order for the meeting to have a quorum
Investors holding more than 40% of Total Commitments must be present and
for the purposes of determining whether there is a quorum any
Commitments held by the General Partner shall not be counted.
8.7 If within half an hour from the time appointed for the meeting a quorum
is not present, the meeting, if convened upon the requisition of
Investors, shall be dissolved; in any other case, it shall stand
adjourned to the same day in the next week at the same time and place or
to such other day and such other time and place as the General Partner
may determine and if at the adjourned meeting a quorum is not present
within half an hour from the time appointed for the meeting, the
Partners present shall be a quorum provided that there are Investors
present who hold at least 20% of Total Commitments and for the purposes
of determining whether there is a quorum any Commitments held by the
General Partner shall not be counted.
8.8 The chairman of the General Partner shall preside as chairman of every
general meeting of the Partnership or if he is not present or is
unwilling to act the directors of the General Partner shall elect one of
their number to be chairman of the meeting.
8.9 The chairman may, with the consent of any meeting at which a quorum is
present (and shall if so directed by the meeting), adjourn the meeting
from time to time and from place to place, but no business shall be
transacted at any adjourned meeting other than the business left
unfinished at the meeting from which the adjournment took place.
8.10 At any general meeting, any resolution put to the vote of the meeting
shall also be put to the vote of a meeting of the other Parallel Funds.
Such resolution shall be passed if, out of those persons present and
voting at such meetings in person or by proxy, persons holding 50% of
the aggregate amount of Commitments subscribed for in all Parallel Funds
by the persons so present and voting (excluding any votes cast by the
General Partner unless the vote is in relation to a matter in respect of
which the provisions of this Agreement entitle the General Partner, in
its capacity as an Investor, to vote), vote in favour provided that if
the subject matter of the vote would otherwise require an Investors'
Ordinary Consent or an Investors' Special Consent then the vote shall
not be passed unless approved pursuant to those requirements. For the
avoidance of doubt, an Investor shall be entitled to split its
Commitment when voting in respect of any resolution.
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8.11 Save as otherwise provided in this Clause, the provisions of the
Companies ▇▇▇ ▇▇▇▇ and of Table A to the Companies (Tables A to F)
Regulations 1985 (as amended so as to affect companies first registered
on the date of this Agreement) shall apply to the holding of meetings
and all matters incidental to the holding of meetings as if the
Partnership were a company PROVIDED THAT neither the re-appointment of
the existing Auditors nor the approval of any set of reports or accounts
of the Partnership shall be required to be approved by the Investors.
9 TERMINATION AND LIQUIDATION
9.1 TERMINATION
The death, bankruptcy, insolvency, dissolution or liquidation of a
Limited Partner shall not operate to terminate the Partnership and the
estate or trustee in bankruptcy or receiver or liquidator of a deceased,
bankrupt, insolvent or dissolved Limited Partner shall not have the
right to withdraw the balances on such Limited Partner's Partnership
accounts or require repayment of such Limited Partner's Loan otherwise
than in accordance with this Agreement. Subject as provided in Clause
9.2, the Partnership shall terminate on the tenth anniversary of the
First Closing Date or shall terminate prior to such date upon the
happening of any of the following events:-
9.1.1 the bankruptcy, insolvency, dissolution or liquidation of the General
Partner, save that the Partnership may be reconstituted pursuant to
Clause 9.3; or
9.1.2 the agreement as to such termination of the Partnership by the General
Partner and by the Investors by an Investors' Special Consent (and, in
relation to such Investor's Special Consent, the General Partner shall
be entitled to vote as an Investor in respect of its Commitment); or
9.1.3 the Partnership ceasing to be fiscally transparent in the UK; or
9.1.4 the termination of ▇▇▇▇▇▇▇▇▇ Capital Partners Europe L.P; or
9.1.5 the effective date on which the General Partner is removed as the
General Partner of ▇▇▇▇▇▇▇▇▇ Capital Partners Europe L.P. and any
Parallel Funds (other than the Partnership).
9.2 EXTENSION OF LIFE OF THE PARTNERSHIP
At any time prior to the tenth anniversary of the First Closing Date,
the life of the Partnership may be extended, by the election of the
General Partner and the Investors by an Investors' Ordinary Consent
(and, in relation to such Investors' Ordinary Consent, the General
Partner shall be entitled to vote as an Investor in respect of its
Commitment), by a period of one year, and may subsequently be extended
in the same manner prior to its termination by a further period of one
year. Any such election shall be irrevocable but shall be without
prejudice to the earlier termination of the Partnership for a reason
specified in Clause 9.1.
9.3 CONTINUATION OF THE PARTNERSHIP
9.3.1 If the Partnership is terminated pursuant to Clause 9.1.1, the
Partnership may be reconstituted and its business continued pursuant to
an Investors' Special Consent (and, in relation to such Investor's
Special Consent, the General Partner shall be
55
entitled to vote as an Investor in respect of its Commitment), electing
to continue the Partnership and electing a new General Partner, which
consent must be obtained within 60 days after all Partners have been
notified of the event of termination, whereupon the existing General
Partner, if the Partnership is terminated pursuant to the provisions of
Clause 9.1.1 as a result of the bankruptcy, insolvency, dissolution or
liquidation of the General Partner, shall cease to be the General
Partner and shall not be entitled to any compensation whatsoever as a
result of the cessation of its entitlement to the General Partner's
Share after receipt by it of all payments to which the General Partner
is entitled up to the date of its ceasing to be the General Partner
pursuant to Clause 6.
9.3.2 In the event that the Partnership is terminated pursuant to the
provisions of Clause 9.1.5, Limited Partners (other than any Defaulting
Investors) having a majority of Commitments in the Partnership may elect
within 30 days of the event giving rise to the operation of Clause 9.1.5
to reconstitute the Partnership and continue its business provided that
they elect as the new General Partner the person appointed as the new
general partner of ▇▇▇▇▇▇▇▇▇ Capital Partners Europe L.P. and the
Parallel Funds other than the Partnership.
9.4 REMOVAL OF THE GENERAL PARTNER
9.4.1 The General Partner may not be removed as the General Partner of the
Partnership other than in the circumstances set out in Clause 9.1.5, in
which case it shall be removed automatically. In the event that the
General Partner is removed in such circumstances, no sums in respect of
General Partner's Share shall be paid to the General Partner on or after
the date of such removal (although Income and Capital Gain may be
allocated in respect of drawings made by the General Partner prior to
the date of such removal).
9.4.2 If the office of GCP Europe General Partnership L.P. is terminated
pursuant to this Agreement:
9.4.2.1 in its capacity as the Carried Interest Partner, it shall
remain entitled to 100% of the carried interest in respect of
the Investments which have been made at the time of the
termination of the its appointment; and
9.4.2.2 in its capacity as an Investor, it shall retain its interests
in any Investments made as at the date of the termination of
its appointment (according to its Investor's Proportionate
Share) but it shall be released from any obligation to fund
any further drawdowns made after such date (and, for the
avoidance of doubt, shall not be treated as a Defaulting
Investor);
and it shall become a Limited Partner in respect of such entitlements.
9.4.3 In the event that the office of GCP Europe General Partnership L.P. as
the general partner is terminated pursuant to this Agreement, it shall
be released from any obligations imposed upon it pursuant to Clause
5.9.2 and 11.1.2.
9.5 LIQUIDATION OF INTERESTS OF PARTNERS
9.5.1 A Limited Partner shall not have the right to the return of its Capital
Contribution except upon the liquidation of the Partnership.
56
9.5.2 The General Partner shall not be personally liable for the return of the
Capital Contributions made or the Loans advanced by the Limited
Partners.
9.5.3 Upon termination or liquidation of the Partnership, unless reconstituted
under Clause 9.3, no further business shall be conducted except for such
action as shall be necessary for the winding-up of the affairs of the
Partnership and the distribution of the Partnership Assets amongst the
Partners. The General Partner shall act as liquidating trustee provided
however that, if the Partnership is terminated for a reason set forth in
Clauses 9.1.1 or 9.1.5, unless the Partnership is reconstituted pursuant
to Clause 9.3, the Limited Partners shall, acting by an Investors'
Ordinary Consent (and, in relation to such Investors' Ordinary Consent,
the General Partner shall be entitled to vote as an Investor in respect
of its Commitment), designate some other party or parties to act as a
liquidating trustee or trustees and to receive such remuneration for so
acting as the Limited Partners shall acting by an Investors' Special
Consent agree.
9.5.4 Upon termination of the Partnership, the liquidating trustee or trustees
may sell any or all of the Partnership Assets (including to a Limited
Partner or Limited Partners) on terms which it or they consider to be
reasonable or may, at its or their discretion, distribute all or any of
the Partnership Assets in specie on the basis set out in Clause 6.6,
whether or not the same are listed on a recognised stock exchange or
quoted or dealt in on some other market. The liquidating trustee or
trustees shall cause the Partnership to pay all debts, obligations and
liabilities of the Partnership and all costs of liquidation and subject
to Clause 6.6.5 the remaining proceeds and assets shall be distributed
amongst the Partners on the basis set out in Clause 6.4 and the balance
on the capital accounts of the Partners shall be repaid.
9.5.5 Upon termination of the Partnership, no Partner shall be liable to any
other Partner for such portion of the Loan (if any) advanced to the
Partnership by such Partner as shall not at the relevant time have been
repaid by the Partnership.
9.5.6 If, upon termination of the Partnership, a Partner has a negative
balance on its loan account and a positive balance on current account or
vice versa, the General Partner may make transfers between the two
accounts in order to remove or reduce such negative balances.
9.5.7 At no time during the term of the Partnership or upon dissolution and
liquidation of the Partnership shall a Limited Partner with a negative
balance in his capital account have any obligation to the Partnership or
the other Partners to restore such negative balance, except as may be
required by law or in respect of any negative balance resulting from a
withdrawal of Capital or dissolution in contravention of this Agreement.
9.5.8 Upon termination of the Partnership, any amount then due from the
General Partner as an interest-free loan pursuant to Clause 6.3.2.4
shall be written off.
10 REPORTS AND VALUATIONS
10.1 As soon as practicable and no later than 120 days following the end of
each Accounting Period, the General Partner shall prepare (or procure
the preparation of) and send to each Partner the audited accounts of the
Partnership.
57
10.2 Subject to Clause 11.3, within 60 days of the end of each quarter, the
Manager shall prepare (or procure the preparation of) and send to each
Partner unaudited financial statements of the Partnership Assets as at
the end of such period and a narrative report comprising a statement of
the Investments and other property and assets of the Partnership,
confirmation of the drawdowns made from Investors, details of the
Investments purchased including a brief summary of any Investee Company
and of investments sold and otherwise disposed of during the relevant
period and, for the avoidance of doubt, the Partnership hereby confirms
that such statements will not constitute periodic statements for the
purposes of the FSA Rules.
10.3 All client reports and valuations sent to Investors pursuant to the
provisions of this Agreement shall be prepared in accordance with the
Valuation Procedures.
11 MISCELLANEOUS
11.1 NON-EXCLUSIVITY
11.1.1 The functions and duties which the General Partner and the Manager
undertake on behalf of the Partnership shall not be exclusive and the
General Partner and the Manager may perform similar functions and duties
for others and may engage in any other activity provided, however, that
the General Partner or the Manager continues properly to manage the
affairs of the Partnership.
11.1.2 Until the termination of the Investment Period or the removal or
resignation of the General Partner, the General Partner shall procure
that Greenhill and any Associates (excluding, for the avoidance of
doubt, for this purpose any investee company of any investment
partnerships managed by Greenhill or any of its Associates) thereof
shall offer to the Partnership the exclusive opportunity to make
privately negotiated investments in unlisted or illiquid equity or
equity-related securities in Western Europe which are made available to
it for investment as principal for its own account and that fit the
Investment Policy of the Partnership PROVIDED THAT opportunities will
not be made available to the Partnership in relation to: (i) any
investment or acquisition made by Greenhill or any of its Associates for
strategic purposes or otherwise in connection with or incidental to the
operating businesses of such companies; (ii) any investment opportunity
developed or originated by an unaffiliated third party co-investor or
joint venture partner and made available specifically only to Greenhill
or any Associates pursuant to a contractual obligation or a fiduciary
duty of such third party; (iii) any investment related to any existing
investment of Greenhill or any of its Associates; (iv) any investment
opportunity received by Greenhill or any Associate as compensation for
investment banking or advisory services; (v) any investment made in real
estate or real estate related companies or any investment in a
collective investment vehicle having the investment objective of
investing primarily in real estate or real estate related companies; or
(vi) any investment of (pound)2 million or less.
11.1.3 The General Partner and the Manager or any Associate or any member,
director or employee of any such company may act as a director of any
Investee Company and may exercise the voting power conferred by the
Investment, in such manner as it or he judges will best advance the
interests of the Partnership.
11.1.4 Neither the General Partner or the Manager shall, except with the prior
consent of the Investors pursuant to an Investors' Ordinary Consent,
provide advice relating
58
to, commence marketing or act as the primary source of transactions for
any new private equity investment fund having an Investment Policy
similar to that of the Partnership or which will compete with the
Partnership (other than, for the avoidance of doubt, a Parallel Fund or
country specific fund) in the United Kingdom at any time prior to
whichever is the earliest to occur of:
11.1.4.1 at least 66 2/3% of the aggregate of the Total Commitments
having been invested or committed or agreed to be invested for
specific investments or further financings of Investee
Companies;
11.1.4.2 the removal of GCP Europe General Partnership L.P. as the
General Partner of, or of Greenhill Capital Partners Europe
LLP as the Manager of, the Partnership;
11.1.4.3 the expiry of the Investment Period of the Partnership; and
11.1.4.4 the termination of the Partnership.
11.2 INDEMNITIES
11.2.1 No Indemnified Party shall have any liability to the Partnership or any
Partner for any losses, claims, damages or liabilities arising from,
related to or in connection with this Agreement or the Partnership's
business and affairs (including any act or omission by an Indemnified
Party) except for any losses, claims, damages or liabilities resulting
from such Indemnified Party's gross negligence or wilful misconduct. In
addition, no Indemnified Party shall be liable to the Partnership or any
Partner with respect to the accuracy or completeness of any information
furnished by such Indemnified Party or any other Indemnified Person
regarding any Investee Company where such information is obtained from a
third party (including, without limitation, an Investee Company) and not
prepared by an Indemnified Party. Notwithstanding the foregoing
provisions of this Clause, the Manager shall be liable for any material
breach of any applicable FSA Rules or any provision of FSMA binding on
it.
11.2.2 The Partnership shall, to the fullest extent permitted by applicable
law, indemnify and hold harmless each Indemnified Party against any
losses, claims, damages or liabilities arising out of, related to or in
connection with this Agreement or the Partnership's business or affairs,
except for any such losses, claims, damages or liabilities resulting
from such Indemnified Party's gross negligence or wilful misconduct.
Subject to the remaining provisions of this Clause, the Partnership will
periodically reimburse each Indemnified Party for all expenses
(including fees and expenses of counsel) as such expenses are incurred
in connection with investigating, preparing, pursuing or defending any
proceedings related to, arising out of or in connection with this
Agreement or the Partnership's business or affairs whether or not
pending or threatened and whether or not any Indemnified Party is a
party thereto; provided that expenses incurred by the General Partner in
connection with any proceedings brought by or on behalf of the Limited
Partners and limited partners in Parallel Funds representing at least
66.7% of Total Commitments in the Partnership and the Parallel Funds
(and excluding the General Partner in its capacity as an Investor)
against the General Partner shall not be reimbursed until such
proceedings are resolved, in which event the General Partner shall be
indemnified to the extent provided in this Clause; and provided further
that such Indemnified Party shall promptly repay to the Partnership the
amount of any such reimbursed expenses paid to it if it shall be
judicially determined by judgment or order not subject to further appeal
or discretionary
59
review that such Indemnified Party is not entitled to be indemnified by
the Partnership in connection with such matter as provided in the
exception contained in the previous sentence. If for any reason (other
than the gross negligence or wilful misconduct of such Indemnified
Party) the foregoing indemnification is unavailable to any Indemnified
Party, or is insufficient to hold it harmless, then the Partnership
shall contribute to the amount paid or payable by such Indemnified Party
as a result of such loss, claim damage or liability in such proportion
as is appropriate to reflect the relative benefits received by the
Partnership on the one hand and such Indemnified Party on the other
hand, or, if such allocation is not permitted by applicable law, to
reflect not only the relative benefits referred to above but also any
other relevant equitable considerations.
11.2.3 Each Partner covenants for itself and its successors, assigns, heirs and
personal representatives that such person will, at any time prior to or
after the dissolution of the Partnership, whether before or after such
person's withdrawal from the Partnership, pay to the Partnership or the
General Partner on demand any amount which the Partnership or the
General Partner, as the case may be, properly pays in respect of taxes
(including withholding taxes) imposed upon income of, or distributions
in respect of, Investments made to such Partner. The General Partner or
the Manager shall provide any Limited Partner with all relevant
information in its possession relating to such payment of taxes.
11.2.4 Notwithstanding anything else contained in this Agreement, the
reimbursement, indemnity and contribution obligations of the Partnership
under Clause 11.2.2 (the "Indemnification Obligations") shall:
11.2.4.1 be in addition to any liability which the Partnership may
otherwise have;
11.2.4.2 extend upon the same terms and conditions to the officers,
directors, employees, Associates, shareholders, agents and
representatives of each Indemnified Party;
11.2.4.3 be binding upon and inure to the benefit of any successors,
assigns, heirs and personal representatives of each
Indemnified Party; and
11.2.4.4 be limited to the sum of (x) the assets of the Partnership,
plus (y) the aggregate amount of Total Commitments available
for drawdown, plus (z) subject to Clause 11.2.5, the aggregate
amount of all distributions previously made by the Partnership
to the Partners.
11.2.5 Notwithstanding anything else contained in this Agreement, if the
Partnership incurs an Indemnification Obligation and the amount of
reserves, if any, specifically identified by the Partnership with
respect to such Indemnification Obligation is less than the amount of
such Indemnification Obligation, the General Partner may require each
Investor to repay to the Partnership, at any time or from time to time,
whether before or after the dissolution of the Partnership or before or
after such person's withdrawal from the Partnership, in satisfaction of
such Investor's share of such Indemnification Obligation, all or any
portion of the amount of the distributions previously made by the
Partnership to such Investor to the extent of such Investor's share of
such Indemnification Obligation; provided that no Investor shall be
required to make a repayment of any distributions made pursuant to this
Agreement, at any time after the third
60
anniversary of the date on which such distributions were made by the
Partnership, or to repay any amount which, together with all such
amounts previously repaid pursuant to this Clause, would exceed the
lesser of (i) the aggregate amount of distributions previously received
by such Investor (or the predecessor of such Investor) from the
Partnership; and (ii) an amount equal to 25% of such Investor's
Commitment.
11.2.6 For the avoidance of doubt, the provisions of this Clause 11.2 shall
continue in effect notwithstanding that the Indemnified Party shall have
ceased to provide services to or in respect of the Partnership but only
as regards the services provided in the period prior to and including
such cessation (but not thereafter) and shall continue in effect
notwithstanding the termination of the Partnership.
11.2.7 Each Indemnified Party and each other person referred to in this Clause
11.2 will be entitled to enforce the provisions of this Clause 11.2
under the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇.
11.2.8 The General Partner will as soon as reasonably possible inform Investors
if it is aware that any Indemnified Party has sought to claim under the
indemnity provisions contained in Clause 11.2.2.
11.2.9 In the event that the assets of the Partnership constitute "plan assets"
under the Plan Assets Regulations then, in the case of any ERISA
Partner, the provisions of this Clause 11.2 shall only be applied to the
extent permitted by ERISA.
11.2.10 Any person receiving the benefit of an indemnity under this Clause 11.2
shall use its reasonable endeavours to exercise any rights of recovery
which it may have against its insurer or the relevant Investee Company
or their insurers provided that it shall be indemnified out of the
Partnership Assets for its reasonable costs and expenses in seeking to
exercise such rights of recovery. To the extent that any person receives
an indemnity under this Clause 11.2 and subsequently recovers monies in
relation to the same matter from an insurer or Investee Company then
such person shall account to the Partnership for the amount so recovered
(after deduction of all costs and expenses incurred in procuring
recovery) or, if less, the amount paid by the Partnership by way of
indemnity (net of any tax borne thereon).
11.2.11 The General Partner shall be entitled to obtain insurance covering the
Indemnified Parties, the costs of which shall be an Ongoing Expense of
the Partnership.
11.3 CONFIDENTIAL INFORMATION
11.3.1 Unless otherwise agreed with the General Partner, the Partners shall
not, and each Partner shall use all reasonable endeavours to procure
that every person connected with or associated with such Partner shall
not, disclose to any person, firm or corporation or use to the detriment
of the Partnership or any of the Partners (other than in connection with
claims against such parties for breaches of their obligations and duties
under this Agreement) any confidential information which may have come
to his or its knowledge concerning the affairs of the Partnership
(including, for the avoidance of doubt, information in the reports
issued pursuant to Clause 10), unless required to do so by law or by a
court of law or by the regulations of any relevant stock exchange or the
FSA or any other regulatory authority to which any of the Partners or
any such person connected or associated with a Partner is subject or in
the case of a Government or Local
61
Authority Plan as required under a Government or Local Authority Plan
Restriction, provided however that in respect of each Partner the
foregoing obligation shall not apply to information which:
11.3.1.1 is possessed by such Partner prior to the receipt thereof from
the General Partner or the Manager; or
11.3.1.2 becomes known to the public other than as a result of a breach
of such obligations by such Partner.
11.3.2 Notwithstanding the foregoing, each of the Partners shall be entitled to
disclose information received by it pursuant to this Agreement
concerning the business or affairs of the Partnership to its Associates,
investment managers, investors or prospective investors (and where such
investor is itself a feeder fund or fund of funds, to its investors),
bona fide advisers and auditors and to any regulatory authorities to
which such Partner is accustomed or required to report provided that any
such disclosure shall only be allowed if the recipient (or ultimate
recipient, as the case may be) is bound by a substantially similar
obligation of confidentiality in respect of such information and has
given an undertaking not to make any further disclosures of such
information and each Investor hereby warrants to the General Partner
that it will use reasonable efforts to enforce such undertakings. Each
Limited Partner that is a US taxpayer (and each employee, representative
or other agent of such Limited Partner) may disclose to any and all
persons, without limitation of any kind, the US federal tax treatment,
tax structure and tax strategies of such Limited Partner's investment in
the Partnership. For this purpose, the terms "tax structure" "tax
treatment" and "tax strategies" shall include only (and shall be limited
only to) those facts and information that are relevant to the US federal
income tax treatment of the transaction and do not include:-
11.3.2.1 information relating to the identity of any party, including,
without limitation, any of the other Partners or any of the
Portfolio Companies; or
11.3.2.2 the terms of this Agreement and the other agreements and
documents referred to herein or information relating to any
investment by the Partnership to the extent not relevant to
such tax structure, tax treatment or tax strategies. It is
understood and agreed that the authorisation contained in this
Clause 11.3.2 does not extend to disclosure of any other
information, including without limitation, any financial,
business, legal or personal information of or regarding any
party or person (including the Partnership and any Portfolio
Company) to the extent not related to the US federal income
tax treatment, tax structure or tax strategies of such Limited
Partner's investment in the Partnership.
11.3.3 Notwithstanding any other provision of this Agreement, the General
Partner shall have the right not to provide a Limited Partner, for such
period of time as the General Partner in good faith determines to be
advisable, with any information with respect to the Partnership, any
Portfolio Company or any of their respective Associates that the Limited
Partner would otherwise be entitled to receive or to have access to
pursuant to this Agreement if:
62
11.3.3.1 such information is reasonably determined by the General
Partner (or any of their respective directors, members,
partners, shareholders or employees) to be required by law or
by agreement with a third party to be kept confidential; or
11.3.3.2 the General Partner in good faith determines that the
disclosure of such information to the Limited Partners is not
in the best interests of the Partnership or could damage the
Partnership, any Portfolio Company or the conduct of any of
their respective affairs.
It is hereby understood that the General Partner may elect to exercise
its right to withhold information pursuant to this Clause 11.3.3 on a
Limited Partner by Limited Partner basis, including, without limitation,
the exercise of such right with respect to any Limited Partner that is
subject to any "freedom of information", "sunshine" or other law, rule
or regulation that imposes upon such Limited Partner an obligation to
make certain information available to the public. In addition, the
General Partner may withhold information from any Limited Partner who
has breached the provisions of this Agreement. If, pursuant to the
foregoing sentence, the General Partner does not provide a Limited
Partner with certain information, then the General Partner shall
promptly provide such Limited Partner with notice of such action.
Each Limited Partner shall be obliged to inform the General Partner, on
an ongoing basis, if it is a Government or Local Authority Plan or is a
vehicle which has amongst its investors a Government or Local Authority
Plan.
11.3.4 Except as otherwise required by law or the rules of any regulatory
authority, the General Partner (or any Associate thereof) shall not,
without the prior consent of the relevant Limited Partner, (i) use in
any advertising, publicity, or otherwise, the name of any Limited
Partner (or any Associate thereof or the name of any employee or partner
thereof) nor any trade name, trademark, trade device, service, ▇▇▇▇,
symbol, or any abbreviation, contraction, or simulation thereof owned by
such Limited Partner (or Associate thereof), or (ii) represent, directly
or indirectly, that any product or service provided by the General
Partner (or any Associate thereof) has been approved or endorsed by such
Limited Partner (or Associate thereof).
11.3.5 Notwithstanding the provisions of Clause 11.3.4, each Limited Partner
consents (unless it otherwise notifies the General Partner in writing)
to the disclosure by the General Partner and the Manager of the fact
that such Limited Partner is an Investor in the Partnership.
11.4 VARIATION OF PARTNERSHIP AGREEMENT
11.4.1 Subject to Clause 11.4.4, this Agreement may be amended in whole or in
part by the written consent of the General Partner and of the Investors
by an Investors' Special Consent, provided however that no such
variation shall be made which shall alter the provisions of this Clause
11.4.1 or impose upon any Partner any obligation to make any further
payment to the Partnership beyond the amount of its Capital Contribution
and of its Loan Commitment (if any) or which otherwise adversely affects
the rights and interests of the Manager, the General Partner or the
Limited Partners, including without limitation any change in the term of
the Partnership or in the allocation of Income, Capital Gain and Capital
Loss
63
(including for the avoidance of doubt any amendment to Clause 6) without
the affirmative consent of all Partners adversely affected thereby.
11.4.2 No variation affecting the requirements of this agreement relating to
ERISA and any ERISA Partner shall be made effective against any ERISA
Partner without its consent.
11.4.3 In the event of any conflict between this Agreement, the Private
Placement Memorandum, the Management Agreement and the Co-Investment
Agreement, the terms of this Agreement shall prevail.
11.4.4 From the First Closing Date until the Final Closing Date, if the General
Partner wishes to amend this Agreement, it must give written notice to
all Limited Partners and must receive the consent of all such Limited
Partners to the changes. If a Limited Partner does not object to the
variation with 14 days of receipt of the notice from the General
Partner, they will be deemed to consent to the variation.
11.5 NOTICES
11.5.1 Any notice to be served in connection with this Agreement shall be in
writing (which, for the avoidance of doubt, shall include facsimile
transmission) and any notice or other correspondence under or in
connection with this Agreement shall be delivered to the relevant party
at the address given in this Agreement or to such other address as may
be notified in writing for the purposes of this Agreement to the Party
serving the document.
11.5.2 Any such notice or correspondence shall be deemed to have been served as
follows:-
11.5.2.1 in the case of delivery, on delivery if delivered between 9.00
a.m. and 5.00 p.m. on a business day and, if delivered outside
such hours, at the time when such hours re-commence on the
first business day following delivery;
11.5.2.2 in the case of service by registered mail, on the second
business day after the day on which it was posted;
11.5.2.3 in the case of facsimile (subject to oral or electronic
confirmation of receipt of such transmission in its entirety),
on the day it is transmitted provided that if that day is not
a business day or, being a business day, transmission takes
place after 5.00 p.m., then at 9.00 a.m. on the first business
day following transmission of the notice.
11.5.3 In proving such service (other than service by facsimile transmission),
it shall be sufficient to prove that the notice or correspondence was
properly addressed and left at or posted by registered mail to the place
to which it was so addressed.
11.6 AUDITORS
11.6.1 The Auditors may resign from office or be removed at any time by the
General Partner or by the Investors by an Investors' Special Consent.
11.6.2 In the event of resignation or removal, the Auditors shall be required
to send a written notice to each of the Limited Partners stating that
there are no
64
circumstances connected with their resignation or removal which they
consider should be brought to the attention of the Limited Partners or a
statement of any such circumstances.
11.6.3 The General Partner shall appoint such firm of internationally
recognised chartered accountants as it may in its discretion think fit
to fill any casual vacancy arising in the office of the Auditors to the
Partnership.
11.7 CHANGES IN THE PARTNERSHIP
11.7.1 If, during the continuance of the Partnership, any changes are made or
occur in:-
11.7.1.1 the name of the Partnership;
11.7.1.2 the general nature of the business of the Partnership;
11.7.1.3 the principal place of business of the Partnership;
11.7.1.4 the Partners or the name of any Partner;
11.7.1.5 the term or character of the Partnership;
11.7.1.6 the amount contributed or to be contributed by any Limited
Partner by way of Capital Contribution; or
11.7.1.7 the liability of any Partner by reason of his becoming a
Limited Partner instead of a General Partner or a General
Partner instead of a Limited Partner;
a statement, signed by the General Partner on behalf of the Partnership,
specifying the nature of the change shall within seven days be sent by
post or delivered to the Registrar of Companies by the General Partner.
11.7.2 Notice of any arrangement or transaction under which any person ceases
to be a general partner in the Partnership and becomes a limited partner
in the Partnership, or under which the Interest of a limited partner
will be assigned to any person, shall forthwith be advertised by the
General Partner in the London Gazette and, until notice of the
arrangement or transaction is so advertised, the arrangement or
transaction shall, for the purposes of the Act, be deemed to be of no
effect.
11.8 EXCUSED INVESTORS
11.8.1 A Limited Partner may notify the General Partner in writing, not later
than three Business Days after the date of their receipt of a Drawdown
Notice, that participation by it through the Partnership in the proposed
Investment referred to in such Drawdown Notice would result in a
material breach of its constitutional documents or any statute, law,
governmental regulation or any administrative guidelines imposed by any
governmental authority (whether or not such guideline has the force of
law) ("Administrative Guidelines") applicable to such Limited Partner
which breach would mean that the Limited Partner was in violation of a
legal restriction or would render the Limited Partner liable to
penalties or fines pursuant thereto or would result in the Limited
Partner's interest in the Partnership or the proposed Investment being
invalidated or materially adversely affected. In such circumstances such
Limited Partner may request the General
65
Partner to excuse it from such proposed Investment but such exclusion
shall be made at the discretion of the General Partner. Any such notice
from a Limited Partner to the General Partner shall be accompanied by:
(i) a certificate of an authorised senior officer of the Limited Partner
concerned to the effect of the foregoing sentence; and (ii) an opinion
of counsel or other legal adviser (including in-house counsel), which
opinion and counsel are reasonably acceptable to the General Partner, to
the effect that participation by such Limited Partner in such proposed
Investment would constitute such a material breach of the Limited
Partner's constitutional documents or such statute, law, governmental
regulation or Administrative Guidelines having any of the aforementioned
effects and stating in detail the grounds for such conclusion; and (iii)
such other information or documentary evidence as the General Partner
may reasonably request. The provisions of this Clause shall not release
the Limited Partner from its obligations under this Agreement in
relation to any other Drawdown Notice which may be served upon the
Limited Partner without prejudice to the re-application of the
provisions of this Clause 11.8.1 if appropriate.
11.8.2 Any Limited Partner may notify the General Partner at or at any time
after the date it was admitted to the Partnership in reasonable detail
of any potential constraints upon it participating in Investments by
virtue of its constitutional documents or any statute, law governmental
regulations or Administrative Guidelines application to it and may from
time to time notify the General Partner of any variations or additions
thereto provided that such notifications shall be without prejudice to
the need to comply with the requirements of Clause 11.8.1 in respect of
any specific Investment.
11.8.3 In the event and to the extent that any Investor is not required to
participate in an Investment (an "Excused Investment") pursuant to
Clause 11.8.1 above:-
11.8.3.1 the amounts to be drawn down from Investors other than the
Excused Investor (each a "Participating Investor") in relation
to an Excused Investment shall be the Acquisition Cost of that
Excused Investment multiplied by:
A
-
B
where A is the amount of the Commitment subscribed by the
Participating Investor and B is the aggregate amount of
Commitments subscribed by all Investors participating in that
Excused Investment;
11.8.3.2 the amount which is not drawn down from the Excused Investor
pursuant to Clause 11.8.1 shall cease to be available for draw
down and the aggregate amount which can be drawn down from the
Excused Investor shall not exceed the Excused Investor's
aggregate Loan Commitment less such amount;
11.8.3.3 notwithstanding Clause 11.8.3.2, the Excused Investor shall
continue to be required to advance loans to the Partnership in
respect of Investments pro rata to the Commitment held by it;
11.8.3.4 where Subsequent Investors are admitted to the Partnership
subsequent to the draw down for any Excused Investment or
Investments the provisions of Clause 2.7.2 shall operate on an
66
investment by investment basis, and the Excused Investor shall
be excluded from any calculations made pursuant to Clause
2.7.2 in respect of any Excused Investment or Investments;
11.8.3.5 allocations and Distributions under this Agreement shall be
made on such a basis that the Excused Investor receives no
profits from Excused Investments and, subject to Clause
11.8.3.3 above, suffers no loss from such Excused Investments
and otherwise to deal equitably between the Partners (provided
that, for the avoidance of doubt, any Transaction Fees arising
out of an Excused Investment shall be applied in accordance
with Clause 5.9.2), such allocations and Distributions to be
agreed by the Auditors;
11.8.3.6 Income, Capital Gains and Capital Losses shall be allocated
amongst Partners separately in relation to Investments in
which all Investors participate and Excused Investments;
11.8.3.7 for the avoidance of doubt, the Excused Investor will,
notwithstanding the provisions of this Clause 11.8, remain
liable for its pro rata proportion of all fees and expenses
for which the Partnership is responsible pursuant to Clause
5.9.1 other than expenses included within the Acquisition Cost
of an Excused Investment and the costs of disposal of an
Excused Investment;
11.8.3.8 the provisions of Clause 6.3.3 shall be applied separately to
Investments in which all Investors participate and Excused
Investments and the Income, Capital Gains and Capital Losses,
Loan Repayment Points, timing and amount of Distributions and
the timing and amount of allocations to the Carried Interest
Partner as contemplated by Clause 6.3.3 shall be determined
separately for each such category of Investments;
11.8.3.9 the General Partner shall keep such accounts as are necessary
to allow allocations and Distributions to be made in
accordance with the provisions of this Clause 11.8, including,
without limitation, separate loan accounts and current
accounts for each Investor in relation to Investments in which
all Investors participate and for Excused Investments;
11.8.3.10 an Excused Investor will not be responsible for indemnifying
the Partnership pursuant to Clause 11.2 in respect of a claim
arising in relation to an Excused Investment; and
11.8.3.11 for the avoidance of doubt, the operation of this Clause 11.8
shall not affect the operation of the provisions of Clause
6.3.2;
and the General Partner shall be permitted to make such adjustment to
the accounts of the Partners to deal equitably between them as they may
consider necessary.
11.8.4 If so requested by notice in writing by the General Partner, the Excused
Investor shall within such time as shall be specified by the General
Partner (being not less than 14 days) advance interest free to the
General Partner such amount as shall equal the amount by which the sums
allocated to the Excused Investor's current account in respect of the
relevant Accounting Period fall below the amounts
67
required to satisfy the General Partner's Share attributable to the
total amount of the Excused Investor's Commitment and any expenses of
the Partnership allocated to the Excused Investor's current account in
such period (or such lesser amount as the General Partner considers
appropriate).
11.8.5 In the event that the General Partner determines that a Limited Partner
is a Recurring Excused Investor, the Recurring Excused Investor shall
continue to have all the rights and obligations of a Limited Partner
except that the General Partner shall cause the Capital Contribution of
such Recurring Excused Investor to be forfeited and the rights of such
Partner shall thereafter be limited to the right of repayment of its
Loan and the Preferred Return on Investments in which it participated
after all the other Investors shall have received full repayment of
their Loans and the Preferred Return on the Investments in which they
participated and the Carried Interest Partner shall have received an
amount equal to 16.279 per cent of the Aggregate Preferred Return
payable pursuant to the provisions of this Agreement.
11.9 AGREEMENT BINDING UPON SUCCESSORS AND ASSIGNS
Except as otherwise specified in this Agreement, this Agreement shall
enure for the benefit of and shall be binding upon the heirs, executors,
administrators or other representatives, successors and permitted
assigns of the respective parties.
11.10 VALUE ADDED TAX
All amounts payable pursuant to this Agreement shall unless otherwise
stated be exclusive of any VAT and the Partnership shall be responsible
for any VAT which may be payable.
11.11 EXECUTION IN COUNTERPART
This Agreement may be executed in counterparts each of which shall be
deemed to be an original of this Agreement.
11.12 SERVICE OF PROCESS
11.12.1 Each of the Investors not resident in the United Kingdom or the European
Union shall, by signing the Subscription Agreement, be treated as having
appointed the General Partner, (or such other person resident in the
United Kingdom as is notified by it to the General Partner from time to
time), as its agent for service of process in England for any matter or
dispute arising out of or in connection with this Agreement, service
upon whom shall be deemed completed whether or not forwarded to or
received by the relevant appointer.
11.12.2 Nothing contained in this Agreement shall affect the right to serve
process in any manner permitted by law or the right to bring proceedings
in England or any other jurisdiction for the purposes of the enforcement
or execution of any judgment or other settlement in any of the courts.
11.13 CO-INVESTMENT
11.13.1 Where the General Partner considers it appropriate to do so, the General
Partner will use reasonable endeavours to offer the opportunity to
co-invest in Investee Companies to those Investors who have informed the
General Partner in writing of their interest in such co-investment on
such terms and at such times as have
68
been approved by the Investment Committee. The General Partner may
determine, in its sole discretion, minimum commitment thresholds below
which co-investment opportunities will not be offered to Limited
Partners.
11.13.2 The Manager, the General Partner, the Key Executives and their
respective Associates shall not be permitted to make any investments
directly or indirectly in any Investee Companies, except as resulting
from the commitments held in the Partnership or the Parallel Funds.
Employees and directors of Greenhill and its Associates will be
permitted to acquire the shares of Investee Companies which have
achieved a Listing subject to such limitations as the Manager may from
time to time determine.
11.14 CONTRACTS (RIGHTS OF THIRD PARTIES) ▇▇▇ ▇▇▇▇
11.14.1 Subject to Clause 7.2.1 and to Clause 11.14.2, nothing in this Agreement
confers any right on any person (other than the parties hereto) pursuant
to the UK Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇.
11.14.2 Each Indemnified Party (as defined in Clause 11.2.2) that is not a party
to this Agreement may enforce the terms of Clause 11.2 subject to and in
accordance with the UK Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇.
11.15 LITIGATION
The General Partner or the Manager shall promptly notify the Investors
of any pending legal proceedings to which the General Partner, the
Manager or any Key Executive is a party if, in the reasonable opinion of
the Manager, such proceedings would be likely to have a materially
adverse effect on the ability of the General Partner, Manager or Key
Executive (as appropriate) to perform its material obligations under
this Agreement or (in the case of the Manager) under the Management
Agreement, and shall further notify the Investors of the final outcome
of any such proceedings.
11.16 GOVERNING LAW
11.16.1 This Agreement and the rights of the parties to this Agreement shall be
governed by and construed in accordance with the laws of England and the
Parties irrevocably agree that the courts of England are to have the
exclusive jurisdiction to settle any disputes which may arise out of or
in connection with this Agreement and accordingly any suit, action or
proceeding arising out of or in connection with this Agreement shall be
brought in such courts.
11.16.2 In the event that the assets of the Partnership constitute "plan assets"
under ERISA and the Plan Assets Regulations then, in the case of any
ERISA Partner (notwithstanding any of the other provisions of this
Agreement, the Management Agreement and the Co-Investment Agreement) the
General Partner and Manager agree that the provisions of Clause 11.16.1
of this Agreement, paragraphs 16 and 17 of the Subscription Agreement
(as set out in Schedule I) and Clause 13 of the Management Agreement are
applicable and effective only insofar as consistent with ERISA.
11.17 TAX MATTERS
The Partners agree that neither the Partnership, the General Partner nor
any Limited Partner shall take any action pursuant to applicable
regulations under
69
Section 7701 of the Code, or that is otherwise inconsistent with the
treatment of the Partnership as a partnership for U.S. federal income
tax purposes.
The Parties have executed this Agreement at the date shown on its head.
70
SCHEDULE I
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT
FOR
▇▇▇▇▇▇▇▇▇ CAPITAL PARTNERS EUROPE (EMPLOYEES) L.P.
Notes for completion of Subscription Agreement:
EXECUTION
This Subscription Agreement must be entered into as a deed pursuant to English
law. For UK companies, this typically requires signature by two directors, or a
director and the secretary of the company. For individuals, this typically
requires signature in the presence of a witness who must also sign his or her
own name. Other Investors should execute the Subscription Agreement in the
manner prescribed by the laws of their jurisdiction of incorporation or
residence. Please use the correct attestation clause.
DATING
Do not date the Subscription Agreement. By returning the Subscription Agreement
to the address below, you authorise the Manager and its agents to date the
Subscription Agreement on your behalf at the date of your admission to the
Partnership.
QUERIES
Please contact the person mentioned below if you have any queries in relation to
completion of this Subscription Agreement.
COMPLETED SUBSCRIPTION AGREEMENT
The completed Subscription Agreement should be sent by courier, and a copy
should be sent by fax or e-mail, to the following address:
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Address: Macfarlanes
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: + ▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
E-mail: ▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Telephone: + ▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
ANTI-MONEY LAUNDERING QUESTIONNAIRE
The anti-money laundering questionnaire (Appendix V of the Subscription
Agreement) is designed to enable ▇▇▇▇▇▇▇▇▇ Capital Partners LLP to satisfy its
obligations under applicable money laundering regulations. The questionnaire
must be separately signed, where indicated on the last page and returned at the
same time as the Subscription Agreement, together with the relevant supporting
documentation.
71
▇▇▇▇▇▇▇▇▇ CAPITAL PARTNERS EUROPE (EMPLOYEES) L.P.
SUBSCRIPTION AGREEMENT FOR INVESTORS WISHING TO BECOME
LIMITED PARTNERS
----------------------------------
----------------------------------
(Insert name of applicant)
----------------------------------
----------------------------------
Insert amount of Commitment
----------------------------------
----------------------------------
To: ▇▇▇▇▇▇▇▇▇ Capital Partners Europe LLP
Dear Sirs,
1 We hereby apply to become a Limited Partner, with the Commitment
specified above, in Greenhill Capital Partners Europe (Employees) L.P.,
("the Partnership"), a limited partnership registered under the Limited
Partnerships ▇▇▇ ▇▇▇▇, on the terms and conditions of the Partnership
Agreement between GCP Europe General Partnership L.P. (1) and
(2) dated 2007 as amended and restated on
2007 ("the Partnership Agreement"). We agree that the
Partnership may, in its sole discretion, reject this application in
whole or in part. We agree to accept the Commitment hereby applied for
by us, or such lesser amount accepted by the Partnership.
2 Your acceptance of this application shall constitute us as a Limited
Partner and as an Investor on the terms and conditions of the
Partnership Agreement as if we were a party to it.
3 We agree to pay such sum as is demanded by the General Partner, being
all of the Capital Contribution and the first tranche of Loan, in
respect of the Commitment subscribed by us following written
notification of our acceptance as a Limited Partner in the Partnership
in accordance with the provisions of Clause 4.1 of the Partnership
Agreement.
4 We agree to pay such sum as is demanded by the General Partner in
respect of the Commitment subscribed by us by way of loan in such
amounts and in such tranches as are defined in the Partnership Agreement
pursuant to Clause 4 of the Partnership Agreement.
5 We confirm that we should be treated as principal for all purposes of
the Partnership Agreement.
6 We confirm that our subscription for a Commitment in the Partnership is
made solely on the basis of the information contained in the private
placement memorandum for ▇▇▇▇▇▇▇▇▇ Capital Partners Europe, L.P. (the
"PPM") and the Partnership Agreement and not in reliance on any other
information,
72
representations or warranties, whether oral or written, provided by any
person including for the avoidance of doubt the General Partner or any
Associate thereof or any officer, agent, director, employee of any such
person. We confirm that we have read the Risk Factors contained in the
PPM and we confirm that we understand and have evaluated the risks
connected with a subscription for a Commitment in the Partnership.
PLEASE TICK EITHER BOX A OR BOX B:
-------------------
7 We confirm that we are resident in the United A
Kingdom for tax purposes -------------------
OR
-------------------
We confirm that we are not resident in the B
United Kingdom for tax purposes and are -------------------
Resident in [ ] for tax purposes
8 We will provide the General Partner with such information as it
reasonably requests from time to time with respect to our citizenship,
residency, ownership, tax status, business or control so as to permit
the General Partner to evaluate and comply with any regulatory and tax
requirements applicable to the Partnership, the Investors or any
Investments or proposed investments of the Partnership, provided that
any confidential information so provided shall be kept confidential by
the Partnership and the General Partner and shall not be disclosed to
any third party unless required by law or by any court of law or by any
regulatory authority.
9 We confirm that we have read and accepted the "Investment Conditions for
Applicants to the Partnership" set out in the Appendices to this
Subscription Agreement.
10 We hereby declare, represent and warrant that under the law of the
jurisdiction in which we are constituted, we are a single person and
will, as a result, be regarded as a single person in the Partnership.
11 We hereby declare, represent and warrant that all sums of money
transferred and to be transferred as a result of executing this
Subscription Agreement and becoming a Limited Partner and an Investor in
the Partnership do not originate from drug trafficking or from the
activities of criminal organisations.
PLEASE TICK EITHER BOX A OR BOX B:
-------------------
12 We declare that we are a United States person A
(as defined in Appendix IV) becoming a Limited -------------------
Partner in a United States placement and that we
hereby declare, represent and warrant in the
terms set out in the attached Appendix I.
OR
-------------------
We declare that we are not a United States B
person (as defined in Appendix IV) becoming a -------------------
Limited Partner in a United States placement and
that we hereby declare, represent and warrant in
the terms set out in the attached Appendix II.
PLEASE TICK THE BOX IF YOU ARE AN EMPLOYEE BENEFIT PLAN OR AN ENTITY HOLDING
PLAN ASSETS
73
-------------------
13 We are or are acting on behalf of, an employee
benefit plan or an entity deemed to hold plan -------------------
assets of one or more employee benefit plans,
and we hereby declare, represent, and warrant in
the terms set out in the attached Appendix III.
14 (a) We are a Benefit Plan Investor -------------------
-------------------
(b) We are NOT a Benefit Plan Investor and
will not become a Benefit Plan Investor -------------------
during the period that we will continue
to be a Limited Partner -------------------
(c) We are not subject toERISA but are -------------------
acting on behalf of a plan established
and maintained by any State or any of -------------------
its political subdivisions or any agency
or instrument thereof for the benefit of
its employees and wishes to be treated
as an ERISA Partner for all purposes of
the Partnership Agreement.
BENEFIT PLAN INVESTORS - are (1) any plans, funds or programmes
established or maintained by an employer or employee organisation for
the purpose of providing pension, welfare or similar benefits (i.e.
deferred compensation arrangements) to employees subject to ERISA, (2)
individual retirement accounts, ▇▇▇▇▇ plans and other plans such as an
annuity plan subject to Section 4975 of the Code, and (3) entities of
which 25% or more of any class of equity is held by plans, funds,
programs or accounts described in (1) or (2) above.
15 We hereby declare, represent and warrant that:
(a) we have the financial ability to bear the economic risk of our
investment, have adequate means for providing our current needs
and possible contingencies and have no need for liquidity with
respect to its investment in a Commitment in the Partnership;
(b) we have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits of, and we are
able to bear the economic risk of, investment in the
Partnership;
(c) we have been given the opportunity to ask questions of, and
receive answers from, the Partnership with respect to the
business to be conducted by the Partnership, the financial
condition and capital of the Partnership, the terms and
conditions of the offering and other matters pertaining to the
investment in the Partnership and have been given the
opportunity to obtain such additional information necessary to
verify the accuracy of the information contained in the PPM in
order for it to evaluate the merits and risks of investment in
the Partnership to the extent that the Partnership possesses
such information or can acquire it without unreasonable effort
or expense and have not been furnished with any other offering
literature or prospectus except as mentioned herein or in the
PPM;
(d) we are aware that an investment in the Partnership involves
substantial risks and have determined that a Commitment is a
suitable investment for us and that, at this time, we could bear
a complete loss of our investment therein;
74
(e) with regard to the tax, legal, currency and other economic
considerations related to this investment, we have only relied
on the advice of, or have consulted with, our own professional
advisers;
(f) we understand that under the Partnership Agreement, Limited
Partners cannot withdraw from the Partnership and Commitments
cannot be transferred, except as provided in the Partnership
Agreement, and, consequently, we acknowledge and we are aware
that we may have to bear the economic risk of investment in the
Partnership until such time as the Partnership is terminated in
accordance with the Partnership Agreement, which could be as
late as twelve years from acceptance of this application;
(g) if we are a corporation, partnership, trust or other entity, we
are duly authorised and qualified to become a Limited Partner
in, and authorised to make Capital Contributions and Loan
Commitments to, the Partnership and the individual or
individuals signing this Deed and giving these warranties, as
the case may be, on behalf of us have been duly authorised by us
to do so and this application is, and upon acceptance by the
Manager the Partnership Agreement will be, a legal, valid and
binding obligation, enforceable against us in accordance with
its terms;
(h) we will be the beneficial owner of the Commitment and we certify
that we shall agree that restrictions (substantially similar to
those contained in Clause 7 of the Partnership Agreement on the
Assignment of Interests in the Partnership) shall be imposed on
the ability of the ultimate direct or indirect beneficial owners
of interests to transfer directly or indirectly such interests;
(i) if at any time during the term of the Partnership we become
aware that we are no longer in compliance with the declarations,
representations and warranties contained in Sections (f) to (h)
above, we shall promptly notify the General Partner;
(j) the execution and delivery of this Subscription Agreement, our
acquisition of a Commitment in the Partnership, the performance
by us of our obligations under the Partnership Agreement and the
consummation of the transactions contemplated hereby and thereby
will not conflict with, or result in any violation of or default
under, any provision of any governing instrument applicable to
us, or any material agreement or other instrument to which we
are a party or by which we or any of our properties are bound,
or any permit, franchise, judgment, decree, statute, rule or
regulation applicable to us or our properties;
(k) any information that we have heretofore furnished and herewith
furnish to the Manager with respect of our financial position
and business experience, is true, correct and complete as of the
date of this application, and if there should be any change in
such information prior to our admission to the Partnership as a
Limited Partner, we will immediately furnish in writing such
revised or corrected information to the Manager;
(l) we are duly authorised and qualified to give the representations
and warranties set out in this Deed on behalf of each of the
Beneficial Holder(s);
75
(m) we will treat the Loans as equity (and not as debt) for US
federal tax purposes; and
(o) we are not a Benefit Plan Investor or, if we are a Benefit Plan
Investor, our Commitment will not result in a prohibited
transaction under Section 406 of ERISA, or Section 4975 of the
U.S. Internal Revenue Code of 1986, as amended (the "Code") for
which an exemption is not available.
16 This Subscription Agreement and the rights, obligations and
relationships of the parties under this Subscription Agreement and the
Partnership Agreement and in respect of the PPM shall be governed by and
construed in accordance with the laws of England.
17 We irrevocably agree that the courts of England are to have exclusive
jurisdiction to settle any disputes which may arise out of or in
connection with this Subscription Agreement, the Partnership Agreement,
the PPM, or the acquisition of Commitments whether or not governed by
the laws of England, and that accordingly any suit, action or
proceedings arising out of or in connection with this Subscription
Agreement, the Partnership Agreement, the PPM, or the acquisition of
Commitments shall be brought in such courts. We hereby waive, to the
extent not prohibited by applicable law, and agree not to assert by way
of motion, as a defence or otherwise, in any such proceeding, any claim
that we are not subject personally to the jurisdiction of such courts,
that any such proceeding brought in such courts is improper or that this
Subscription Agreement, the Partnership Agreement or the PPM, or the
such matter hereof or thereof, may not be enforced in or by such court.
18 Words and expressions not defined in this Subscription Agreement which
are defined in the Partnership Agreement shall have the same respective
meanings in this Subscription Agreement.
This Subscription Agreement shall be governed by and construed in accordance
with English law.
76
-----------------------------
Dated:
-----------------------------
PLEASE COMPLETE BOX A, B OR C:
A INDIVIDUALS
--------------------------------------------------------------------------------
Executed and unconditionally )
delivered as a Deed by )
the following individual )
____________________________ ) ______________________________
in the presence of the ) (applicant signature)
following witness: )
____________________________ (witness signature)
____________________________ (witness name)
____________________________ (witness occupation)
____________________________ (witness address)
____________________________
--------------------------------------------------------------------------------
B CORPORATIONS
--------------------------------------------------------------------------------
Executed and unconditionally )
delivered as a Deed by )
the following corporation )
____________________________ ) ______________________________
acting by ) (director signature)
____________________________ )
and )
____________________________ ) ______________________________
(director/secretary signature)
--------------------------------------------------------------------------------
C CORPORATIONS SIGNING ON BEHALF OF A LIMITED PARTNERSHIP
--------------------------------------------------------------------------------
Executed and unconditionally )
delivered as a Deed by )
) ______________________________
and ) (director signature)
)
for and on behalf of ) ______________________________
) (director/secretary signature)
acting in its capacity as )
general partner of )
)
(director/secretary signature)
--------------------------------------------------------------------------------
77
D WHERE A AND B ARE NOT APPROPRIATE
--------------------------------------------------------------------------------
Executed and unconditionally )
delivered as a Deed by )
____________________________ )
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BANK ACCOUNT DETAILS OF APPLICANT TO WHICH DISTRIBUTIONS ARE TO BE SENT:
Account Number:
Bank Name:
Bank Address:
Bank Swift Address:
APPLICANT'S CONTACT PERSONS:
Drawdown Notices are to be sent to:
Name:
Company:
Mail Address:
Fax Number:
Telephone Number:
Email Address:
With a copy to:
APPLICANT'S TAXPAYER IDENTIFICATION NUMBER (IF RELEVANT)
--------------------------------------------------------------------------------
78
APPENDIX I TO SUBSCRIPTION AGREEMENT
SPECIAL INVESTMENT CONDITIONS FOR APPLICANTS IN US PLACEMENTS
We hereby declare, represent and warrant that:
(a) we will acquire a Commitment in the Partnership for our own account as
principal or for one or more separate accounts maintained by us or for
the account of one or more pension or trust funds of which we are
trustee, in each case, for investment purposes only, and not with a view
to or for the re-sale, distribution or fractionalisation thereof, in
whole or in part; and no other person has or will have a direct or
indirect beneficial interest in such Commitment;
(b) we understand that the offering and sale of Commitments in the
Partnership is intended to be exempt from registration under the US
Securities Act and any applicable State securities laws and that the
Partnership will not be registered under the US Investment Company Act
in reliance upon exemptions for non-public offerings, and understand
that the Interests may not be offered, sold, transferred or pledged
except pursuant to an effective registration statement under the US
Securities Act (the Partnership having no intention of effecting a
registration under such Act) or pursuant to an available exemption
therefrom and any applicable State securities laws and the Partnership
has received an opinion of counsel to such effect satisfactory to it;
(c) we are an "accredited investor, as defined in rule 501(a) of Regulation
D under the US Securities Act and we represent and warrant that each of
the statements below, next to which we have indicated in the space
designated therefor, is true
[ ] (i) we are a bank as defined in section 3(a)(2) of
the US Securities Act, or any savings and loan
association or other institution as defined in
section 3(a)(5)(A) of the US Securities Act,
whether acting in its individual or fiduciary
capacity;
[ ] (ii) we are a broker or dealer registered pursuant to
section 15 of the United States Securities
Exchange Act of 1934, as amended (the "Exchange
Act");
[ ] (iii) we are an insurance company as defined in
section 2(13) of the US Securities Act;
[ ] (iv) we are an investment company registered under
the US Investment Company Act;
[ ] (v) we are a business development company as defined
in section 2(a)(48) of the US Investment Company
Act;
[ ] (vi) we are a Small Business Investment Company
licensed by the United States Small Business
Administration under section 301(c) or (d) of
the United States Small Business Investment Act
of 1958;
[ ] (vii) we are a plan established and maintained by a
State or any of its political subdivisions or
any agency or instrument thereof for the benefit
of its employees and have total assets in excess
of $5,000,000;
79
[ ] (viii) we are an employee benefit plan within the
meaning of ERISA, and the investment decision to
acquire a Commitment in the Partnership has been
made by a plan fiduciary, as defined in section
3(21) of ERISA, which is either a bank, savings
and loan association, insurance company or
registered investment adviser;
[ ] (ix) we are an employee benefit plan within the
meaning of Title I of ERISA, and have total
assets in excess of $5,000,000 or, if a self
directed plan, with Investment decisions made
solely by persons that are accredited investors;
[ ] (x) we are a private business development company as
defined in section 202(a)(22) of the United
States Investment Advisers Act of 1940;
[ ] (xi) we are an organisation described in section
501(c)(3) of the Code, a corporation,
Massachusetts or similar business trust, or a
partnership, or a limited liability company not
formed for the specific purpose of acquiring a
Commitment in the Partnership, with total assets
in excess of $5,000,000;
[ ] (xii) we are a general partner of the Partnership, or
a director or executive officer of a general
partner of the Partnership;
[ ] (xiii) I am a natural person whose individual net
worth, or joint net worth with my spouse at the
time of my purchase of a Commitment in the
Partnership, exceeds $1,000,000;
[ ] (xiv) I am a natural person who had an individual
income in excess of $200,000 in each of the two
most recent years or joint income with my spouse
in excess of $300,000 in each of those years and
has a reasonable expectation of reaching the
same income level in the current year;
[ ] (xv) we are a trust, with total assets in excess of
$5,000,000 not formed for the specific purpose
of acquiring a Commitment in the Partnership,
whose purchase is directed by a sophisticated
person as described in Rule 506(b)(2)(ii) of
Regulation D of the Securities Act;
[ ] (xvi) we are an entity in which all of the equity
owners are investors described in one or more of
categories (i) through (xv) of this paragraph
1(c);
OR
if none of the above are true, then we represent and
warrant that each of the statements below, next to which
we have indicated in the space designated therefor, is
true:
[ ] (i) I am an individual;
[ ] (ii) I have a minimum of five years of legal or
business experience (including time in law or
graduate business school);
80
[ ] (iii) I had a gross income of at least US$150,000 in
the prior year and have a reasonable expectation
of a gross income of at least US$150,000 in each
of the next two succeeding years(1); and
[ ] (iv) I have such knowledge and experience in
financial and business matters that I am capable
of evaluating the merits and risks of the
prospective investment in the Partnership.
(d) we certify under penalty of perjury that:
(i) (A) our taxpayer identification number provided on
the signature page is correct; and
(B) we are exempt from backup withholding because we
are an "exempt recipient" as described in United
States Treasury Regulation Section
31.3452(c)-1(b) (e.g. a corporation or an
organisation exempt from tax under Section
501(a) of the Code), or we will complete and
return with this Agreement a Form W-9, Payer's
Request for Taxpayer Identification Number and
Certification; and
(ii) (A) we are not a non-resident alien individual,
foreign trust or foreign estate (as defined In
the Code); and
(B) we will notify the Manager within 5 days of a
change to foreign status;
(e) except to the extent the Manager has been advised in writing:
(i) if a corporation, we are a United States resident for United
States federal income tax purposes, and are not managed and
controlled from, or resident in, the United Kingdom for United
Kingdom tax purposes;
(ii) if a trust, we are a United States resident for United States
federal Income tax purposes and none of our trustees are
resident in the United Kingdom for United Kingdom income tax
purposes; and
(iii) if a partnership, we have as our partners persons who are United
States residents for United States federal income tax purposes
and who are not managed or controlled from, or otherwise
considered to be residents in, the United Kingdom for United
Kingdom tax purposes;
(f) we first learned of the Partnership in the State listed in our address
above, and intend that the securities law of that State govern the
purchase of our Commitment;
(g) if, at any time during the term of the Partnership, our Commitment
equals or exceeds 10% of the Total Commitments in the Partnership, we
will not be any of the following:
(i) an "investment company" within the meaning of the US Investment
Company Act; or
____________________
(1) In applying these tests, either calendar or rolling 12-month periods may
be used
81
(ii) an entity that is excluded from the definition of an "Investment
company" solely by reason of Section 3(c)(1) and/or Section
3(c)(7) of the US Investment Company Act as in effect from time
to time;
and we will deliver to the Manager such other representations and
warranties as to matters under the US Investment Company Act and the US
Securities Act as the Manager may reasonably request to ensure
compliance herewith and the availability of any exemption thereunder;
(h) we are a "qualified purchaser" within the meaning of Section 2(a)(51) of
the US Investment Company Act and have indicated below the basis for our
status as such (for this purpose, the term "investments" has the meaning
the meaning set forth in Rule 2a51-1, and the amount of our
"investments" has been determined in the manner required by such Rule):
[CHECK THE BOX NEXT TO THE CATEGORY OR CATEGORIES WHICH DESCRIBE YOU]
[ ] (i) a natural person who owns not less than $5
million in "investments";
[ ] (ii) a family-owned company (other than a trust) that
owns not less than $5 million in "investments";
[ ] (iii) a trust that was not formed for the specific
purpose of investing in the Partnership, all of
whose trustees (or other persons authorised to
make decisions for the trust) and settlors are
qualified persons;
[ ] (iv) a company that owns and invests on a
discretionary basis not less than $25 million in
"investments", acting for its own account or for
other "qualified purchasers";
[ ] (v) a company all of whose securities are
beneficially owned by "qualified purchasers";
[ ] (vi) a "qualified institutional buyer" under Rule
144A under the US Securities Act.
If we checked the box next to clause (vi) above, and are a dealer (as
described in paragraph (a)(I)(ii) of Rule 144A of the US Securities
Act), we own and invest on a discretionary basis at least $25 million
(rather than the minimum $10 million required under Rule 144A) worth of
securities of issuers with whom you are not affiliated.
Yes .................. No.................... Not applicable..........
If we checked the box next to clause (vi) above, and are an employee
benefit plan or trust (as described in paragraph (a)(I)(i)(D) - (F) of
Rule 144A), the investment decisions with respect to the plan are not
made by the beneficiaries of the plan (as might be the case, for
example, in a 401(k) plan).
Yes .................. No.................... Not applicable..........
82
If you checked any of the clauses (ii) through (vi) above, do you
yourself rely on the exception provided by Section 3(c) (1) or Section 3
(c) (7) of the US Investment Company Act (as, for example, In the case
of a "fund" or a "fund of funds")?
Yes .................. No.................... Not applicable..........
If you responded "yes" to the preceding question, please answer the
questions in (a), (b) and (c) below:
(a) Have all persons who acquired beneficial ownership of your
securities on or before April 30, 1996 consented to the
treatment of your company as a "qualified purchaser"?
Yes .................. No.................... Not applicable..........
(b) Do any of the direct or indirect beneficial owners of your
securities rely on the exclusion from the definition of an
"investment company" contained in Section 3 (c) (1) or Section 3
(c) (7) of the US Investment Company Act?
Yes .................. No.................... Not applicable..........
(c) If you responded "yes" to question (b) above, have all of the
persons who acquired beneficial ownership of the securities of
such Section 3 (c) (1) or Section 3 (c) (7) companies on or
before April 30 1996 consented to the treatment of such
companies as qualified purchasers?
Yes .................. No.................... Not applicable..........
Please also answer the following questions; all US Applicants must
respond to (d) and (e) below:
(d) Were you formed for the specific purpose of investing in the
Partnership?
Yes .................. No.................... Not applicable..........
(e) If you responded "yes" to question (d) above, are all of the
beneficial owners of your securities "qualified purchasers"?
Yes .................. No.................... Not applicable..........
(i) we are the beneficial owner of the Interest and we certify that the
statement below, next to which we have indicated in the space designated
therefor, is true:
(i) we are not a partnership, limited liability company, grantor
trust or S corporation for US Federal income tax purposes (a
"flow-through entity") that owns directly or through another
flow-through entity (or entities) the Interest; or
(ii) we are such a flow-through entity and either (A) substantially
all of the value of such flow-through entity is attributable to
property other than such flow-through entity's Interest in the
Partnership or (B) such flow-through entity was not formed for
the principal purpose or as one of its principal purposes to
permit the Partnership to satisfy the 100 partner requirement of
the Treasury Regulation Section 1.7704-1(h)(ii);
83
(j) if we are other than a natural person (i.e. a partnership, limited
company, trust, corporation or other entity), we were not formed,
organised, reorganised, capitalised, recapitalised or otherwise availed
of for the specific purpose of investing in the Partnership (and our
Interest in the Partnership will not represent a substantial proportion
of our assets) provided that if we have been organised, reorganised,
capitalised, recapitalised or otherwise availed of for the purpose of
investing in the Partnership (or if our Interest in the Partnership will
represent a substantial proportion of our assets), then:
(i) we shall have so indicated to the Manager in writing and shall
have provided the Manager with such representations and
warranties and such other evidence relating to compliance with
the US Securities Act, the US Investment Company Act, the
"publicly traded partnership" provisions of the Code and the
United States Treasury Regulations promulgated thereunder, and
such other governmental rules and regulations as the Manager
shall reasonably request; and
(ii) we agree that restrictions (substantially similar to those
contained in clause 9 of the Partnership Agreement on the
Transfer of Interests or Shares in the Partnership) shall be
imposed on the ability of the ultimate direct or indirect
beneficial owners of interests in such special purpose entity
(or entities) to transfer directly or indirectly such interests;
and
(k) we agree not to offer, sell, transfer, pledge, hypothecate or otherwise
dispose of, directly or indirectly, all or any part of the Interest or
any interest therein, except in accordance with the terms and provisions
of the Partnership Agreement and applicable law (including without
limitation, the registration requirements of the US Securities Act or an
exemption therefrom, and any other applicable securities laws). In
addition, we further agree that (i) we are not currently making (and at
the time of our admission as a Limited Partner to the Partnership will
not be making) a market in the limited partnership interests in the
Partnership (or in any of the other Parallel Funds included as part of
the Fund) and will not, at any time after our admission as a Limited
Partner, make a market in any such Interests, and (ii) we will not sell,
transfer or otherwise dispose of all or any part of our Interest (or any
interest therein) on an "established securities market", a "secondary
market", an "over-the-counter market" or the "substantial equivalent
thereof', in each case within the meaning of Section 7704 of the Code,
as amended, and the United States Treasury Regulations promulgated
thereunder.
(l) if at any time during the term of the Partnership we shall no longer be
in compliance with the declarations, representations and warranties
contained in (d), (e), (g), (h), (j) or (k) above, we shall promptly
notify the Manager.
(m) we acknowledge that the Partnership seeks to comply with all applicable
laws concerning money laundering and related activities. In connection
therewith, the General Partner is prohibited from accepting the
investment of funds in the Partnership by any persons or entities that
are acting, whether directly or indirectly, in contravention of any
United States, English, international or other money laundering
regulations or conventions. In connection therewith, we hereby
represent, warrant and agree that:
(i) none of the funds invested at any time by us in the Partnership
shall be derived from any activity or related to any source that
is criminal under United States, English or international law,
and no contribution to the Partnership shall result in a
violation by the Partnership or the General Partner of the
United States Bank Secrecy Act, the United States Money
Laundering Control Act of 1986 or the money laundering
provisions of the US Patriot Act of 2001;
84
(ii) we will furnish any additional information that the General
Partner may request to ensure compliance with all laws
applicable to the Partnership having to do with money laundering
and related activities; and
(iii) we will notify the General Partner of the Partnership if and as
soon as we become aware that any statement made in this
paragraph (m) has ceased to be true and correct.
85
APPENDIX II TO THE SUBSCRIPTION AGREEMENT
SPECIAL INVESTMENT CONDITIONS FOR APPLICANTS IN NON-US PLACEMENTS
We hereby declare, represent and warrant that:
(a) we were not in the United States at the time that Commitments in the
Partnership were offered to us, and we were not in the United States at
the time such offer was accepted. As used herein, "United States" has
the meaning provided in Regulation S under the US Securities Act;
(b) we hereby understand that the Commitments in the Partnership have not
been and will not be registered under the US Securities Act or the
securities laws of any State and accordingly may not be offered, sold,
transferred or pledged in the United States or to a US Person unless:
(i) the Commitments are duly registered under the US Securities Act
and all applicable State securities laws; or
(ii) such offer or sale is made or in accordance with the provisions
of Regulation S under the US Securities Act or pursuant to
another exemption from registration, and the Partnership has
received an opinion of counsel to such effect satisfactory to
it.
We also understand that sales or transfers of the Commitments are
further restricted by the provisions of the Partnership Agreement;
(c) we are not a US person and we are not acquiring a Commitment in the
Partnership for the account or benefit of any US person nor with a view
to the offer, sale or delivery, directly or indirectly of any such
Commitments within the United States or to a US Person. As used herein
"US Person" has the meaning provided in Regulation S under the US
Securities Act (said definition being set forth in its entirety in the
Appendix attached hereto);
(d) if we are other than a natural person (i.e. a partnership, limited
liability company, trust, corporation or other entity), we were not
formed, organised, reorganised, capitalised, recapitalised or otherwise
availed of for the principal or specific purpose, or as one of the
principal or specific purposes, of investing in the Partnership (and our
interest in the Partnership will not represent a substantial proportion
of our assets) provided that if we have been so formed, organised,
reorganised, capitalised, recapitalised or otherwise availed of for the
purpose of investing in the Partnership (or if our Interest in the
Partnership will represent a substantial proportion of our assets),
then:
(i) we shall have so indicated to the Manager in writing and shall
have provided the Manager with such representations and
warranties and such other evidence relating to compliance with
the US Securities Act, the US Investment Company Act, the
"publicly traded partnership" provisions of the Code and the
United States Treasury Regulations promulgated thereunder, and
such other governmental rules and regulations as the Manager
shall reasonably request; and
(ii) we shall agree that restrictions (substantially similar to those
contained in the Partnership Agreement on the Transfer of
Interests or Shares in the Partnership) shall be imposed on the
ability of the direct or indirect beneficial or record owners of
interests in such special purpose entity (or entities) to
transfer directly or indirectly such interests; and
86
(iii) we certify that we were not formed, availed of or reorganised
for the principal purpose, or as one of the principal purposes,
to permit the Partnership or any other Parallel Fund (or any
combination of Parallel Funds) to satisfy the ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Treasury Regulation Section
1-7704-1(h)(ii).
(e) we agree not to offer, sell, transfer, pledge, hypothecate or otherwise
dispose of, directly or indirectly, all or any part of the Interest or
any interest therein, except in accordance with the terms and provisions
of the Partnership Agreement and applicable law (including, without
limitation, the registration requirements of the US Securities Act or an
exemption therefrom, and any other applicable securities laws). In
addition, we further agree that (i) we are not currently making (and at
the time of our admission as a Limited Partner to the Partnership will
not be making) a market in the limited partnership interests in the
Partnership (or in any of the other Parallel Funds included as part of
the Fund) and will not, at any time after our admission as a Limited
Partner, make a market in any such interests, and (ii) we will not sell,
transfer or otherwise dispose of all or any part of our Interest (or any
interest therein) on an "established securities market", a "secondary
market", an "over-the-counter market" or the "substantial equivalent
thereof', in each case within the meaning of Section 7704 of the Code,
as amended, and the United States Treasury Regulations promulgated
thereunder.
(f) we are an "accredited investor" as defined in Rule 501(a) of Regulation
D under the US Securities ▇▇▇ ▇▇▇▇ and we represent and warrant that
each of the statements below, next to which we have indicated in the
space designated therefor, is true:
[ ] (i) I am a natural person whose individual net
worth, or joint net worth with my spouse, at the
time of my subscription for a Commitment in the
Partnership, exceeds US$1,000,000;
[ ] (ii) I am a natural person who had an individual
income in excess of US$200,000 in each of the
two most recent years or joint income with my
spouse in excess of US$300,000 in each of those
years and have a reasonable expectation of
reaching the same income level in the current
year;
OR
if neither of the above statements are true, then we represent and
warrant that each of the statements below, next to which we have
indicated in the space designated therefor, is true:
[ ] (i) I am an individual;
[ ] (ii) I have a minimum of five years of legal or
business experience (including time in law
school or graduate business school);
[ ] (iii) I had a gross income of at least US$150,000 in
prior year and have a reasonable expectation of
gross income of at least US$150,000 in each of
the next two succeeding years(2); and
[ ] (iv) I have such knowledge and experience in
financial and business matters that I am capable
of evaluating the merits and risks of the
prospective investment in the Partnership.
____________________
(2) In applying these tests, either calendar years or rolling 12-month
periods may be used
87
(g) FOR NON-US INVESTORS
we acknowledge that the Partnership seeks to comply with all applicable laws
concerning money laundering and related activities. In connection therewith, the
General Partner is prohibited from accepting the investment of funds in the
Partnership by any persons or entities that are acting, whether directly or
indirectly, in contravention of any United Kingdom, international or other money
laundering regulations or conventions. In connection therewith, we hereby
represent, warrant and agree that:
(i) none of the funds invested by us in the Partnership shall be
derived from any activity or related to any source that is
criminal under English or international law, and no contribution
to the Partnership shall result in a violation by the
Partnership or the General Partner of the Money Laundering
Regulations 1993 or any other money laundering provisions
applicable in the United Kingdom;
(ii) we will furnish any additional information that the General
Partner may request to ensure compliance with all laws
applicable to the Partnership having to do with money laundering
and related activities; and
(iii) we will notify the General Partner of the Partnership if and as
soon as we become aware that any statement made in this
paragraph (g) has ceased to be true and correct.
88
APPENDIX III TO THE SUBSCRIPTION AGREEMENT
BENEFIT PLAN INVESTORS
If we are or are acting on behalf of, an employee benefit plan (including any
entity deemed to hold "plan assets" of one or more such employee benefit plans),
the plan or fiduciary of such employee benefit plan ("the Plan") hereby
represents and warrants to the Manager and the General Partner that:
(a) the decision to invest assets of the plan in Commitments in the
Partnership was made by fiduciaries independent of the General Partner,
the Manager, and any placing agent, which parties are duly authorised to
make such investment decisions and who have not relied on any advice or
recommendation of the General Partner, the Manager or any placing agent
or any of their employees, representatives, agents or affiliates; and
(b) none of the General Partner, the Manager or any placing agent nor any of
their employees, representatives, agents or affiliates have exercised
any discretionary authority or control with respect to the Plan's
investment in Commitments in the Partnership, nor have the General
Partner, the Manager or any placing agent or any of their employees,
agents, representatives or affiliates rendered individualised investment
advice to the plan based upon the plan's investment policies or
strategy, overall portfolio composition or diversification.
89
APPENDIX IV TO THE SUBSCRIPTION AGREEMENT
Set forth below are the definitions of "United States" and "US person" contained
in Regulation S promulgated under the US Securities Act.
"United States" or "US" means the United States of America, its territories and
possessions, any state of the United States, and the District of Columbia.
"US person" means:
(i) Any natural person resident in the United States;
(ii) Any partnership, limited liability company or corporation organised or
incorporated under the s of the United States;
(iii) Any estate of which any executor or administrator is a US person;
(iv) Any trust of which any trustee is a US person;
(v) Any agency or branch of a non-United States entity located in the United
States;
(vi) Any non-discretionary account or similar account (other than an estate
or trust) held by a dealer or other fiduciary for the be of a US person;
(vii) Any discretionary account similar account (other than an estate or
trust) held by a dealer or other fiduciary organised, incorporated, or
(if an individual) resident in the United States; and
(viii) Any partnership or corporation if: (A) organised or incorporated under
the laws of any jurisdiction other than the United States and (B) formed
by a US person principally for the purpose of investing in securities
not registered under the US Securities Act, unless it is organised or
incorporated, and owned, by "accredited investors" (as defined in Rule
501 (a) under the US Securities Act) who are not natural persons,
estates or trusts.
Notwithstanding the foregoing clauses (i) through (viii):
(a) any discretionary account or similar account (other than an estate or
trust) held for the benefit or account of a non-US person by a dealer or
other professional fiduciary organised, incorporated, or (if an
individual) resident in the United States shall not be deemed to be a
"US person";
(b) any estate of which any professional fiduciary acting as executor or
administrator is a US person shall not be deemed to be a "US person" if:
(i) an executor or administrator of the estate who is not a US person
has sole or shared investment discretion with respect to the assets of
the estate; and (ii) the estate is governed by laws other than those of
the United States;
(c) any trust of which any professional fiduciary acting as trustee is a US
person shall not be deemed to be a "US person" if a trustee who is not a
US person has sole or shared investment discretion with respect to the
trust assets, and no beneficiary of the trust (and no settlor the trust
is revocable) is a US person;
(d) an employee benefit plan established and administered in accordance with
(i) the laws of a country other than the United States and (ii) the
customary practices and documentation of such country, shall not be
deemed to be a "US person"; and
90
(e) any agency or branch of a US person located outside the United States
shall not be deemed a "US, person" if: the agency or branch (i) operates
for valid business reasons, (ii) is engaged in the business or insurance
or banking, and (iii) is subject to substantive insurance or banking
regulation, in the jurisdiction where located.
Furthermore, none of the International Monetary Fund, the International Bank for
Reconstruction and Development, the Inter-American Development Bank, the Asian
Development Bank, the African Development Bank, the United Nations, or their
agencies, affiliates and pension plans, or any other similar international
organisation, or its agencies, affiliates and pension plans, shall be deemed to
be a "US person".
91
APPENDIX V
TO THE
SUBSCRIPTION AGREEMENT
▇▇▇▇▇▇▇▇▇ CAPITAL PARTNERS EUROPE (EMPLOYEES) L.P.
ANTI-MONEY LAUNDERING QUESTIONNAIRE
EVIDENCE OF IDENTITY FOR NEW INVESTORS
This questionnaire is designed to enable ▇▇▇▇▇▇▇▇▇ Capital Partners Europe LLP
satisfy some of its obligations in relation to anti-money laundering legislation
in the UK and is based on the recommendations of the Joint Money Laundering
Steering Group guidance notes issued in February 2006 and approved by the
Treasury.
Investors in fund managed by ▇▇▇▇▇▇▇▇▇ Capital Partners Europe LLP are required
to complete the appropriate pages of this questionnaire and provide the relevant
supporting documentation prior to being accepted as an investor in such funds.
If you have any questions in respect of these requirements, please contact
▇▇▇▇▇▇ ▇▇▇▇▇▇ of Macfarlanes on + ▇▇-▇▇-▇▇▇▇-▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇
Capital Partners Europe LLP on ▇▇▇-▇▇-▇▇▇▇-▇▇▇▇.
PLEASE NOTE THAT SOME INVESTORS WILL NEED TO COMPLETE MORE THAN ONE SECTION OF
THIS QUESTIONNAIRE. For example, some companies will need to provide evidence of
two of their directors in accordance with the requirements applying to personal
investors in section 1. Funds of funds, by way of further example, will need to
satisfy section 10 and one of sections 2, 3 or 4.
This questionnaire captures the standard information required for all investors
in funds managed by ▇▇▇▇▇▇▇▇▇ Capital Partners Europe LLP. At ▇▇▇▇▇▇▇▇▇ Capital
Partners Europe LLP's request, some investors may be asked to provide enhanced
information in addition to the standard information provided.
PLEASE ENSURE THE LAST PAGE OF THIS DOCUMENT IS ALSO SIGNED ON BEHALF OF THE
INVESTOR.
CONTENTS
1. Personal investors
2. UK companies or partnerships
3. Non UK/US companies or partnerships
4. Institutional investors
5. US pension funds
6. Unregulated credit or financial institutions
7. Regulated credit or financial institutions
8. Credit or financial institutions based outside the Financial Action Task
Force
92
9. Fund of funds
1 PERSONAL INVESTORS
----------------------------------------------------------------------------------------------------------------------------------
PLEASE TICK
IF YOU ARE ... PLEASE PROVIDE EVIDENCE OF ... BY PROVIDING ... IF PROVIDED
----------------------------------------------------------------------------------------------------------------------------------
o applying in person o full name o a government issued document with
o residential address your full name and either your
o date of birth residential address or date of birth.
For example, a current valid full
passport or national ID card with photo
OR
o a government issued document without
photograph, such as a valid (old
style) UK driving licence AND a
supporting second document which sets
out your full name and either
residential address or date of birth,
such as a recent utility ▇▇▇▇/bank
statement
----------------------------------------------------------------------------------------------------------------------------------
93
2 INVESTORS THAT ARE UK REGISTERED COMPANIES OR PARTNERSHIPS
----------------------------------------------------------------------------------------------------------------------------------
PLEASE TICK
IF YOU ARE ... PLEASE PROVIDE EVIDENCE OF ... BY PROVIDING ... IF PROVIDED
----------------------------------------------------------------------------------------------------------------------------------
o quoted on the London o full name o a company registry search or a copy
Stock Exchange; o registered number of the certificate of incorporation
o other recognised o registered office o confirmation of the company's
investment exchange; or o business address listing, for example by printing out
o a subsidiary of such a o that the company is quoted the relevant page from the
company on the appropriate investment exchange website
investment exchange o appropriate evidence to show that
the person representing you is
authorised to do so
o if a subsidiary of a listed company,
confirmation that it is a
subsidiary, for example, a copy of
its shareholder register
----------------------------------------------------------------------------------------------------------------------------------
o an unquoted company or o full name o a company registry search
partnership o registered number o a copy certificate of
o registered office incorporation/trade or equivalent
o business address o a copy of the latest Report and
o names of all Accounts (audited if possible)
directors/partners o appropriate evidence to show that
o names of beneficial owners the person representing you is
holding over 25% authorised to do so
Additionally, please provide
documentation to verify the identity of
at least two individuals in line with
requirements for personal applicants in
section 1
----------------------------------------------------------------------------------------------------------------------------------
94
3 INVESTORS THAT ARE NON UK/US REGISTERED COMPANIES OR PARTNERSHIPS
----------------------------------------------------------------------------------------------------------------------------------
PLEASE TICK
IF YOU ARE ... PLEASE PROVIDE EVIDENCE OF ... BY PROVIDING ... IF PROVIDED
----------------------------------------------------------------------------------------------------------------------------------
o quoted on a recognised/ o full name o a company registry search or a copy
designated or approved o registered number of the certificate of incorporation
investment exchange in o registered office o confirmation of the company's
country with equivalent o business address listing, for example by printing
legislation or a o that the company is quoted out the relevant page from the
subsidiary of such a on the appropriate investment exchange website
company; or investment exchange o appropriate evidence to show that
o a regulated member of a the person representing you is
United Kingdom authorised to do so (e.g board
recognised investment resolution or other applicable
exchange authorisation)
o if a subsidiary of a listed
company, confirmation that it is a
subsidiary, for example, a copy of
its shareholder register
----------------------------------------------------------------------------------------------------------------------------------
o an unquoted company or o full name o a company registry search
partnership o registered number o a copy certificate of
o registered office incorporation/trade or equivalent
o business address o a copy of the latest Report and
o names of all Accounts (audited if possible)
directors/partners o appropriate evidence to show that
o names of beneficial owners the person representing you is
holding over 25% authorised to do so
Additionally, please provide
documentation to verify the identity of
at least two individuals in line with
requirements for personal applicants in
section 1
----------------------------------------------------------------------------------------------------------------------------------
95
4 INSTITUTIONAL INVESTORS (INCLUDING UK AND OTHER NON-US PENSION FUNDS)
----------------------------------------------------------------------------------------------------------------------------------
PLEASE TICK
IF YOU ARE ... PLEASE PROVIDE EVIDENCE OF ... BY PROVIDING ... IF PROVIDED
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o a pension fund of a: o full name o a company registry search or a copy
o registered number of the certificate of incorporation
- company listed on a UK o registered address or equivalent
or EU stock exchange or o business address o a copy of the latest Report and
o names of all Accounts (audited if possible)
- Government agency directors/partners/ o if you have Her Majesty's Revenue and
trustees Customs ("HMRC") or equivalent
approval for favourable tax status,
(not all of these may be confirmation of such approval
relevant, depending on the
legal form) or confirm identity by reference to a
public register (for example, with the
Pension Schemes Registry industry
directories e.g. 'Pension Funds and their
advisers')
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o other pension funds o full name o a company registry search
o registered number o a copy of the latest Report and
o registered address Accounts (audited if possible)
o business address o if you have Her Majesty's Revenue
o names of all and Customs ("HMRC") or equivalent
directors/partners/ approval for favourable tax status,
trustees confirmation of such approval
o details of employer (if
occupational pension or confirm identity by reference to a
scheme) public register (for example, the Pensions
Scheme Registry or industry directories e.g.
'Pension Funds and their advisers')
Additionally, provide verification
documentation
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96
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for employer as appropriate
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o a local authority; o full name o a company registry search or a copy
o a unit trust; or o registered number of the certificate of incorporation
o a charity o registered address or equivalent
o business/ operation address o a copy of the latest Report and
o names of all Accounts (audited if possible)
directors/partners/ o appropriate evidence to show that
trustees the person representing you is
authorised to do so
o if a registered charity, confirmed
details from the Charity Commission
o if a local authority, a copy of the
Council resolution
Additionally please provide documentation to
verify the identity of at least two trustees
or equivalent who will have authority to
operate an account or give instructions
concerning the use or transfer of funds. This
verification will be in line with requirements
for personal applicants in section 1.
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97
5 US PENSION FUNDS
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PLEASE TICK
IF YOU ARE ... PLEASE PROVIDE EVIDENCE OF ... BY PROVIDING ... IF PROVIDED
----------------------------------------------------------------------------------------------------------------------------------
o a pension fund of a o full name o a company registry search or a copy
company listed on a US o registered number of the certificate of incorporation
stock exchange or of a o registered address or equivalent
Federal or State o business address o a copy of the latest Report and
Government agency o names of all Accounts (audited if possible)
directors/partners/ o if you have US approval for
trustees favourable tax status, confirmation
of such approval
or confirm identity by reference to a
public register (for example, with the
Pension Schemes Registry industry
directories e.g. 'Pension Funds and their
advisers')
----------------------------------------------------------------------------------------------------------------------------------
o other pension funds o full name o a company registry search
o registered number o a copy of the latest Report and
o registered address Accounts (audited if possible)
o business address o if you have US approval for
o names of all favourable tax status, confirmation
directors/partners/ of such approval
trustees
o details of employer (if or confirm identity by reference to a
occupational scheme) public register (for example, the Pensions
Scheme Registry or industry directories
e.g. 'Pension Funds and their advisers')
Additionally, provide verification
documentation for employer as appropriate
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98
6 INVESTORS THAT ARE UNREGULATED UK/EU/US CREDIT OR FINANCIAL INSTITUTIONS
(I.E. FOR WHOM THERE IS NO ENTRY IN THE BANKERS' ALMANAC)
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PLEASE
TICK IF
IF YOU ARE ... PLEASE PROVIDE EVIDENCE OF IDENTITY ... PROVIDED
----------------------------------------------------------------------------------------------------------------------------------
o an unregulated UK/EU credit or financial o by following the requirements for UK,
institution US and non-UK companies as appropriate
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99
7 APPLICANTS THAT ARE CREDIT OR FINANCIAL INSTITUTIONS IN COUNTRIES WITH
LEGISLATION EQUIVALENT TO UK/EU LEGISLATION (INCLUDING THE US)
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PLEASE
TICK IF
IF YOU ARE ... PLEASE CONFIRM ... BY PROVIDING EVIDENCE CONFIRMING ... PROVIDED
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o a credit or financial o full name o that an entry exists in the Bankers'
institution in a country o registered number Almanac;
with equivalent o registered address
legislation; or o business address o that an entry exists in the SWIFT
o a branch or subsidiary o regulated status International Bank Identifier Code
in a country with Directory;
equivalent legislation
of a credit or financial o confirming your regulated status with
institution whose head the applicable Central Bank/SEC;
office/parent is
regulated in a Financial o confirming your regulated status with a
Action Task Force country correspondent bank in the same country
with whom an account relationship
already exists; or
o confirming your regulated status with
an EU regulated correspondent bank of
the overseas institution
o appropriate evidence to show that the
person representing you is authorised
to do so
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100
8 CREDIT OR FINANCIAL INSTITUTIONS OUTSIDE FINANCIAL ACTION TASK FORCE
("FATF")
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PLEASE
TICK IF
IF YOU ARE ... PLEASE CONFIRM ... BY PROVIDING ... PROVIDED
----------------------------------------------------------------------------------------------------------------------------------
o a branch or subsidiary o that a group policy exists o confirmation from the relevant branch
in a non-FATF country of to apply money laundering or subsidiary that a group policy
a credit or financial standards in the branch or exists and is being applied, PLUS
institution whose head subsidiary, required under confirmation from the head
office/parent is the jurisdiction of the office/parent that a group policy has
regulated in the UK or country of domicile of the been adopted in line with the
EU head office/parent jurisdiction of the country of
domicile of the head office/parent
o appropriate evidence to show that the
person representing you is authorised
to do so
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o a non-FATF o full name Confirmation from one of:
credit/financial o registered number
institution or branch o registered office in o your applicable Central Bank;
thereof in a country country of incorporation
without equivalent o business address o a correspondent bank in the same
legislation o regulated status country with whom an account
o names of all directors relationship exists; or
o an EU regulated correspondent bank of
the overseas institution
AND
o appropriate evidence to show that the
person representing you is authorised
to do so
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101
9 FUND OF FUNDS
----------------------------------------------------------------------------------------------------------------------------------
PLEASE
TICK IF
IF YOU ARE ... PLEASE PROVIDE EVIDENCE OF ... BY PROVIDING ... PROVIDED
----------------------------------------------------------------------------------------------------------------------------------
o a UK/EU/US regulated o full name o by following the requirements for
financial institution o registered number UK/EU/US companies and partnerships
acting on behalf of a o registered office in (see section 2);
fund of funds country of incorporation o confirming your identity and
o business address regulated status with the
o regulated status appropriate regulatory authority in
o steps taken to verify accordance with the procedures for
identity of investors regulated firms (see section 7);
o confirming that you have verified
the identity of all investors in the
fund in accordance with with your
domestic legislation; and
o appropriate evidence to show that
the person representing you is
authorised to do so.
----------------------------------------------------------------------------------------------------------------------------------
o a fund of funds not o full name o by following the requirements for
acting through a o registered number companies and partnerships (see
regulated financial o registered office in section 2);
institution country of incorporation o by obtaining confirmation from an
o business address appropriately regulated person that
o regulated status it has verified the identity of all
o names of all directors or investors in the fund in accordance
equivalent with with legislation equivalent to
o steps taken to verify UK/EU (including US);
identity of investors o confirming identity and regulated
status of regulated person in
accordance with the procedures for
regulated firms (see section 7); AND
o appropriate evidence to show that the
person representing you is authorised
to do so.
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102
..................................
Dated
Signed on behalf of applicant by
Signature ........................
Position .........................
103
SCHEDULE II
FORM OF DRAWDOWN NOTICE
[Investor]
[Date]
▇▇▇▇▇▇▇▇▇ Capital Partners Europe (Employees) L.P. ("the Partnership")
Notice is hereby given pursuant to Clause 4.1 of the Partnership Agreement
between GCP Europe General Partnership L.P. (1) and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (2) dated 11
April 2007, as amended and restated on 10 May 2007 ("the Partnership Agreement")
of drawdown of part of your Loan Commitment as detailed below. Payment should be
made for value no later than [ am/pm] on [ / /200 ] to the Partnership's
account at:-
Bank: [ ]
Sort Code: [ ]
Credit Account: ▇▇▇▇▇▇▇▇▇ Capital Partners Europe (Employees) L.P.
Account Number: [ ]
Amount:
Your attention is drawn to Clause 4.4 of the Partnership Agreement. Interest
shall accrue to the Partnership on any amount not advanced prior to the date of
expiry of this Drawdown Notice at the rate of 10% per annum. In the event of
failure to remedy such default and pay the amount required pursuant to this
Drawdown Notice with interest on or before the expiry of 30 days' notice so
requiring, the Manager will have the right to cause your Capital Contribution to
be forfeited or to purchase your Interest at its fair market value.
The proposed Investment is in [name of investee company] which is engaged in the
business of [ ] and [further brief details of proposed transaction]. The
investee company is situated in [ ].
Words and expressions not defined in this Drawdown Notice which are defined in
the Partnership Agreement shall have the same respective meanings in this
Drawdown Notice.
..............................
[Name]
104
SCHEDULE III
INVESTMENT OBJECTIVE
The Partnership's investment objective is to achieve superior medium to
long-term capital appreciation primarily through mid-market transactions in
private companies which are primarily based in the United Kingdom. Investments
will be in privately negotiated investments in equity or equity related
securities which enable the Partnership to control or significantly influence
the strategy and governance of the investee company. The Partnership may also
make passive investments.
INVESTMENT POLICY
Up to one third of Total Commitments may be invested in companies based outside
of the United Kingdom.
No more than 25% of Total Commitments may be used to acquire Investments in any
one Investee Company and its associated companies, provided that the Partnership
may acquire an Investment using up to 35% of Total Commitments with a view to
underwriting and/or syndicating transactions, including any guarantees,
undertakings and Temporary Investments. On a syndication the Manager will use
all reasonable endeavours to sell down the relevant Investment to below 25% of
Total Commitments within eighteen months of making the investment.
No Investment will be made in any collective investment scheme or other pooled
investment vehicle charging a management fee.
105
The Parties have executed this Agreement on the date shown at its head.
SIGNED by Director )
and Director )
on behalf of GCP EUROPE GENERAL )
PARTNER LIMITED )
as general partner of GCP EUROPE )
GENERAL PARTNERSHIP L.P. )
SIGNED by )
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ )
________________________
in the presence of:
________________________ Signature
________________________ Name
________________________ Address
________________________ Address
________________________ Occupation
106