PARTNERSHIP AGREEMENT
OF
XXXXXXXXXX OPPORTUNITIES PARTNERS V, LP
a Delaware Limited Partnership
Dated as of December 15, 2006
TABLE OF CONTENTS
Page
SECTION 1. DEFINED TERMS..........................................................................................1
SECTION 2. LIMITED PARTNERSHIP FORMATION AND IDENTIFICATION......................................................10
2.1 Formation......................................................................................10
2.2 Name and Place of Business.....................................................................10
2.3 Records of Partners..............................................................................
2.4 Limited Partnership............................................................................11
SECTION 3. PURPOSE, NATURE OF BUSINESS AND POWERS................................................................11
SECTION 4. TERM..................................................................................................12
SECTION 5. PARTNERSHIP INTERESTS.................................................................................12
5.1 Capital Accounts...............................................................................12
5.2 Classes and Series.............................................................................12
5.3 Issuance of Interests..........................................................................13
5.4 Rights of Partners.............................................................................13
SECTION 6. REGISTERED OFFICE AND AGENT FOR SERVICE OF PROCESS....................................................13
SECTION 7. CAPITAL ACCOUNTS AND ALLOCATIONS......................................................................14
7.1 Capital Contributions of Partners..............................................................14
7.2 Withdrawal of Capital..........................................................................14
7.3 Capital Accounts...............................................................................14
7.4 Allocations in General.........................................................................15
7.5 Allocation of Net Profit and Net Loss..........................................................15
7.6 Corrective Adjustments.........................................................................17
7.7 Special Allocations............................................................................17
7.8 Adjustments to Reflect Changes in Interests....................................................19
7.9 Allocation of Taxable Income and Loss..........................................................19
7.10 Guaranteed Payments............................................................................19
7.11 Allocation of Nonrecourse Deductions...........................................................19
7.12 Allocation of Partner Nonrecourse Deductions...................................................20
7.13 Excess Nonrecourse Liabilities.................................................................20
7.14 Treatment of Certain Distributions.............................................................20
SECTION 8. DISTRIBUTIONS.........................................................................................20
8.1 Distributions..................................................................................20
8.2 Withholding....................................................................................22
SECTION 9. MANAGEMENT, GENERAL PARTNER AND BOARD OF DIRECTORS....................................................22
9.1 Management Generally...........................................................................22
9.2 Board of Directors.............................................................................23
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9.3 Expenses of the Company........................................................................25
9.4 Partners' Consent..............................................................................27
9.5 Exculpation....................................................................................27
9.6 Indemnification; No Duty of Investigation; Reliance on Experts.................................27
9.7 Director Limited Liability.....................................................................29
9.8 Certain Other Activities.......................................................................29
9.9 Tax Matters....................................................................................30
SECTION 10. PARTNERS.............................................................................................31
10.1 Identity and Contributions.....................................................................31
10.2 No Management Power or Liability...............................................................31
10.3 Amendments.....................................................................................32
10.4 Merger, Consolidation, Liquidation.............................................................33
10.5 List of Partners...............................................................................34
10.6 Limitations....................................................................................34
10.7 Meetings.......................................................................................34
10.8 Action Without a Meeting.......................................................................35
10.9 Procedures.....................................................................................35
10.10 Voting.........................................................................................35
10.11 Removal of the General Partner.................................................................37
10.12 Key Man Approvals..............................................................................37
10.13 Pass Through Voting............................................................................38
SECTION 11. ADMISSION OF ADDITIONAL PARTNERS; ASSIGNMENTS OR TRANSFERS OF INTERESTS.............................38
11.1 Admission of Additional Partners...............................................................38
11.2 Assignments or Transfers of Interests..........................................................38
SECTION 12. POWER OF ATTORNEY....................................................................................41
12.1 Appointment of General Partner.................................................................41
12.2 Nature of Special Power........................................................................41
SECTION 13. BOOKS, RECORDS AND REPORTS...........................................................................42
13.1 Books..........................................................................................42
13.2 Reports..........................................................................................
SECTION 14. VALUATION OF ASSETS AND INTERESTS....................................................................44
SECTION 15. BANK ACCOUNTS; CUSTODIAN.............................................................................44
15.1 Bank Accounts Generally........................................................................44
15.2 Custodian........................................................................................
SECTION 16. DISSOLUTION AND TERMINATION OF THE COMPANY...........................................................45
16.1 Dissolution Generally..........................................................................45
16.2 Continuation of Company........................................................................45
16.3 Events Causing Dissolution.....................................................................45
16.4 Distribution of Assets on Liquidation..........................................................46
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16.5 Liquidation Statement..........................................................................46
16.6 Director's Liability Upon Dissolution or Removal...............................................46
16.7 Restriction on Liquidation.....................................................................47
SECTION 17. GENERAL PROVISIONS...................................................................................47
17.1 Notices and Distributions......................................................................47
17.2 Survival of Rights.............................................................................47
17.3 Construction...................................................................................48
17.4 Section Headings...............................................................................48
17.5 Agreement in Counterparts......................................................................48
17.6 Governing Law..................................................................................48
17.7 Additional Documents...........................................................................48
17.8 Severability...................................................................................48
17.9 Pronouns.......................................................................................49
17.10 Entire Agreement...............................................................................49
17.11 Arbitration....................................................................................49
17.12 Waiver of Partition............................................................................49
17.13 Non-Petition Covenant..........................................................................49
17.14 Filing.........................................................................................50
Appendix A Statement of Preferences of Series A Cumulative Preferred Interests...........................A-1
Appendix B Form of Notice of Transfer....................................................................B-1
Appendix C Schedule of Partners..........................................................................C-1
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XXXXXXXXXX OPPORTUNITIES PARTNERS V, LP
A Delaware Limited Partnership
PARTNERSHIP AGREEMENT
This Agreement, dated as of December 15, 2006 (this
"Agreement"), when executed by Xxxxxxxxxx Opportunities Fund V, LLC (the
"Parent") as limited partner and by SVOF/MM, LLC (the "General Partner") as
general partner, shall be the partnership agreement of the Company.
Upon the terms and subject to the conditions described below,
the parties to this Agreement, which shall include all Persons becoming Partners
at any time, as a condition of becoming and for so long as they remain Partners,
agree as follows:
SECTION 1.
DEFINED TERMS
The terms set forth below shall have the indicated meanings.
"Accounting Period" means a one year period commencing on the
first day of the Fiscal Year, or any period of shorter duration commencing upon
the day following the last day of the preceding Accounting Period and
terminating upon the earlier of (a) the last day of the then current Fiscal Year
or (b) the day preceding the effective date of any change in the relative
Interests of the Partners, a Transfer by any Partner of its Interest or any
other similar transaction or event, as determined by the General Partner in its
sole discretion; provided, however, that the first Accounting Period shall
extend from December 15, 2006 until no later than December 31, 2006.
"Adjusted Capital Account" means, with respect to the Capital
Account of any Partner, the balance, if any, in such Partner's Capital Account
as of the end of the relevant Accounting Period, after giving effect to all
allocations made with respect to such Accounting Period under Sections 7.5-7.8
and to the following adjustments:
(i) credit to such Capital Account any amount that
the Partner is obligated to restore pursuant to Treasury Regulations Section
1.704-1(b)(2)(ii)(c) or is deemed to be obligated to restore pursuant to
Treasury Regulations Section 1.704-2(g)(1) or 1.704-2(i)(5); and
(ii) debit to such Capital Account the items
described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) that are attributable to
such Capital Account.
The foregoing definition of Adjusted Capital Account is
intended to comply with the provisions of Treasury Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"Advisers Act" means the Investment Advisers Act of 1940 and
the rules and regulations promulgated thereunder and applicable exemptions
granted therefrom, as amended from time to time.
"Advisory Agreement" means the Investment Management Agreement
between the Company and the Investment Manager, dated on or about December 15,
2006, as such agreement may be amended, modified, revised or restated, from time
to time, in accordance with the terms hereof and thereof, and any substantially
similar agreement with a successor Investment Manager permitted by the terms
hereof and thereof.
"Advisory Fee" means the fee payable to the Investment Manager
under the Advisory Agreement.
"Affiliated Person" has the meaning set forth in the
Investment Company Act.
"Aggregate Net Loss" means, as calculated from time to time,
the excess (if any) of the aggregate Net Loss for the then current and all
previous Accounting Periods over the aggregate Net Profit for the then current
and all previous Accounting Periods, taking into account adjustments under
Section 7.5(b).
"Aggregate Net Profit" means, as calculated from time to time,
the excess (if any) of the aggregate Net Profit for the then current and all
previous Accounting Periods over the aggregate Net Loss for the then current and
all previous Accounting Periods, taking into account adjustments under Section
7.5(b).
"Agreement" means this Partnership Agreement, as originally
executed and as amended from time to time.
"Assets" means all cash, Cash Equivalents, securities,
investments and other property and assets of any type of the Company and its
consolidated subsidiaries.
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"Board of Directors" means the board of directors of the
Company.
"Business Day" means any day other than a Saturday, Sunday or
any other day on which banks in New York, New York or Los Angeles, California
are required by law to be closed. All references to Business Day herein shall be
based on the time in New York, New York.
"Capital Contribution" means a contribution to the Company in
cash or in kind by a Partner or Person becoming a Partner or by any predecessor
holder of the interests held by such Partner.
"Catch-up Amount" has the meaning set forth in Section
8.1(b)(iii).
"Cash Equivalents" has the meaning assigned to such term in
the Credit Agreement; provided that if the Credit Agreement is terminated
without replacement, such term shall have the meaning assigned to it in the
relevant Statement of Preferences (or if the Statement of Preferences has been
terminated, those provisions in effect on the date of such termination).
"Certificate" means the Certificate of Limited Partnership of
the Company, filed with the Secretary of State on September 29, 2006, and any
and all amendments thereto and restatements thereof filed with the Secretary of
State.
"Co-Advisory Agreement" means the Co-Management Agreement
among the Company, the Co-Manager and the Investment Manager, dated on or about
December 15, 2006, as such agreement may be amended, modified, revised or
restated, from time to time, in accordance with the terms hereof and thereof.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
"Co-Manager" means Babson Capital Management LLC in its
capacity as co-investment manager to the Company and any successor thereto
selected in accordance with the Co-Advisory Agreement and the Investment Company
Act.
"Common Partner" means a Partner holding Common Interests of
the Company.
"Common Interests" means the common limited partner interests
of the Company having the rights and other terms set forth in this Agreement.
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"Company" means Xxxxxxxxxx Opportunities Partners V, LP, a
Delaware limited partnership, as it may from time to time be constituted.
"Cost Basis" means, as of any time of determination with
respect to any Asset, the Company's adjusted tax basis in that Asset at such
time as determined for federal income tax purposes; provided, however, that if
the Company has made an election under Section 754 of the Code, such tax basis
shall be determined after giving effect to adjustments made under Section 734 of
the Code but (except as provided in Treasury Regulation Section 1.734-2(b)(1))
without regard to adjustments made under Section 743 of the Code.
"Credit Agreement" means (a) a Credit Agreement, to be entered
into concurrently herewith by and among the Company, certain lenders party
thereto and the arranger and administrative agent therefor, as the same may be
amended, modified, restated, supplemented, refinanced, extended, refunded or
replaced (in whole or in part) (including with lenders other than the initial
lenders) from time to time and (b) any related agreements or instruments in
respect of any amendment, modification, restatement, supplement, refinancing,
extension, refunding or replacement of senior indebtedness (including one or
more replacement credit agreements).
"Custodial Account" means one or more segregated accounts
maintained pursuant to the requirements of the Investment Company Act and other
applicable law to hold the Assets.
"Custodian" means an entity which maintains the Custodial
Account pursuant to the requirements of the Investment Company Act and other
applicable law.
"Delaware Act" means the Delaware Revised Uniform Limited
Partnership Act (6 Del. C. ss.17-101, et seq.), as amended from time to time
and any successor thereto.
"Director" means each director of the Company who at the time
in question has been duly elected or appointed and has qualified as a director
in accordance with the provisions hereof and is then in office.
"Disabling Conduct" shall have the meaning set forth in
Section 9.5.
"Disinterested Non-Party Directors" shall have the meaning set
forth in Section 9.6.
"Excess Nonrecourse Liabilities" means excess nonrecourse
liabilities within the meaning of Treasury Regulations ss. 1.752-3(a)(3).
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"Fiscal Quarter" means a three calendar month period ending
March 31, June 30, September 30 or December 31 of a Fiscal Year.
"Fiscal Year" means the Company's fiscal year, which shall end
on each December 31 unless otherwise determined by the Board of Directors.
"General Partner" means SVOF/MM, LLC, a Delaware limited
liability company.
"Hurdle" has the meaning set forth in Section 8.1(b)(ii).
"Incapacity" or "Incapacitated" means, as to any Person, the
bankruptcy, insolvency, death, disability, adjudication of incompetence or
insanity, dissolution or termination, as the case may be, of such Person.
"Indemnified Person" shall have the meaning assigned to such
term in Section 9.5.
"Independent Director" means a Director that is not an
Interested Person.
"Interested Person" has the meaning given to such term in the
Investment Company Act.
"Interests" means the Common Interests and the Preferred
Interests issued by the Company.
"Investment Committee" shall have the meaning set forth in
Section 10.12.
"Investment Company Act" means the Investment Company Act of
1940 and the rules and regulations promulgated thereunder and applicable
exemptions granted therefrom, as amended from time to time.
"Investment Manager" means Xxxxxxxxxx Capital Partners, LLC, a
Delaware limited liability company, in its capacity as investment manager to the
Company, and any successor thereto selected in accordance with the Advisory
Agreement and the Investment Company Act.
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"Investment Period" means the period commencing on the date
hereof and ending on October 10, 2016.
"Manager Affiliate" has the meaning set forth in Section 9.8.
"Net Asset Value" means the value of the Assets less the
liabilities of the Company and less the liquidation preference of any Preferred
Interests, calculated pursuant to Section 14 in accordance with generally
accepted accounting principles and in compliance with the Investment Company
Act.
"Net Loss" means any realized and unrealized net decrease in
the net asset value of the Company (after liabilities of any sort (whether
contingent or otherwise), guaranteed payments and expenses of any sort) from the
beginning of an Accounting Period to the end of such Accounting Period
(determined in accordance with U.S. generally accepted accounting principles
consistently applied), excluding from such calculation any increase due to any
Capital Contributions made during such Accounting Period and any decrease due to
any distributions or withdrawals made during such Accounting Period.
"Net Profit" means any realized and unrealized net increase in
the net asset value of the Company (after liabilities of any sort (whether
contingent or otherwise), guaranteed payments and expenses of any sort) from the
beginning of a Accounting Period to the end of such Accounting Period
(determined in accordance with U.S. generally accepted accounting principles
consistently applied), excluding from such calculation any increase due to any
Capital Contributions made during such Accounting Period and any decrease due to
any distributions or withdrawals made during such Accounting Period.
"Nonrecourse Deduction" means a nonrecourse deduction
determined pursuant to Treasury Regulations ss. 1.704-2(c).
"Nonrecourse Distribution" means a distribution to a Partner
that is allocable to a net increase in Company Minimum Gain pursuant to Treasury
Regulations ss. 1.704-2(h)(1).
"Nonrecourse Liability" has the meaning assigned to it in
Treasury Regulations ss. 1.704-2(b)(3).
"Notice of Transfer" means a Notice of Transfer in the form of
Appendix B, including the certifications forming a part thereof.
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"Offering Memorandum" means the Confidential Private Placement
Memorandum, dated August, 2006, relating to the common shares of the Parent, as
amended or supplemented from time to time.
"Other Accounts" has the meaning set forth in Section 9.8.
"Parent" has the meaning set forth in the preamble.
"Partially Adjusted Capital Account" means with respect to any
Partner as of the last day of any Accounting Period, the Capital Account of such
Partner as of the beginning of the Accounting Period ending on such date,
adjusted as set forth in Section 7.3 to reflect (a) all contributions made by
and distributions made to such Partner during the Accounting Period ending on
such date and (b) all allocations of items of Company income, gain, loss or
expense made for such Accounting Period pursuant to Sections 7.5-7.8, but (c)
before giving effect to any allocation of Net Profit or Net Loss made for such
Accounting Period pursuant to Section 7.5.
"Partner" means any Person that is admitted as a Common
Partner, Preferred Partner or General Partner of the Company in accordance with
the terms of this Agreement at the time of reference thereto.
"Partner Nonrecourse Debt" means any liability of the Company
to the extent that (i) the liability is nonrecourse for purposes of Treasury
Regulations ss. 1.1001-2 and (ii) a Partner or a Related Person bears the
economic risk of loss under Treasury Regulations ss. 1.752-2.
"Partner Nonrecourse Debt Minimum Gain" means minimum gain
attributable to Partner Nonrecourse Debt pursuant to Treasury Regulations ss.
1.704-2(i)(2).
"Partner Nonrecourse Deduction" means any item of Book loss or
deduction that is attributable to a Partner Nonrecourse Debt pursuant to
Treasury Regulations ss. 1.704-2(i).
"Partner Nonrecourse Distribution" means a distribution to a
Partner that is allocable to a net increase in such Partner's share of Partner
Nonrecourse Debt Minimum Gain pursuant to Treasury Regulations ss.
1.704-2(i)(6).
"Person" means any human being, partnership, limited liability
company, corporation, trust or other entity.
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"Placement Agents" means, collectively, Citigroup Global
Markets Inc. and Wachovia Capital Markets, LLC and such other placement agents
as may be designated by the General Partner and approved by the Board of
Directors.
"Portfolio Company" means any Person that has issued any
securities or incurred any obligations that are then owned, or that previously
were owned, by the Company.
"Preferred Partner" means a Partner holding Preferred
Interests of the Company.
"Preferred Interests" means the preferred limited partner
interests of the Company having the rights and other terms set forth in the
Statement of Preferences for the applicable series thereof, including without
limitation any Series A Preferred Interests.
"Previously Undistributed Net Profit" means, as calculated
from time to time, the excess, if any, of (i) Aggregate Net Profit over (ii) the
aggregate amount of distributions pursuant to Section 8.1(b) made prior to the
time of calculation.
"Replacement Principal" shall have the meaning set forth in
Section 10.12.
"Secretary of State" means the Secretary of State of the State
of Delaware.
"Section 8.1 Percentage" means a percentage interest from time
to time for each Partner as follows: (i) 100% to the Common Partners (pro rata
in accordance with their relative Capital Account balances) until the Common
Partners have received all amounts due them pursuant to Section 8.1(b)(ii) of
this Agreement; (ii) thereafter, 100% to the General Partner until the General
Partner has received all amounts due it pursuant to Section 8.1(b)(iii) of this
Agreement; and (iii) at all other times, 80% to the Common Partners (pro rata in
accordance with their relative Capital Account balances), and 20% to the General
Partner.
"Section 705(a)(2)(B) Expenditures" means non-deductible
expenditures of the Company that are described in Section 705(a)(2)(B) of the
Code, and organization and syndication expenditures and disallowed losses to the
extent that such expenditures or losses are treated as expenditures described in
Section 705(a)(2)(B) of the Code pursuant to Treasury Regulations ss.
1.704-1(b)(2)(iv)(i).
"Securities Act" means the Securities Act of 1933 and the
rules and regulations promulgated thereunder and applicable exemptions granted
therefrom, as amended from time to time.
8
"Series A Preferred Interests" means the Series A Cumulative
Preferred Interests of the Company, the Statement of Preferences of which is
attached hereto as Appendix A.
"Statement of Preferences" means any statement of preferences
setting forth the rights and other terms of any Preferred Interests issued by
the Company.
"Subscription Period" means the period commencing on the date
hereof and ending on or prior to April 10, 2009.
"Substituted Partner" means any Person admitted as a Partner
pursuant to Section 11.2(b).
"Target Capital Account" means, with respect to any Partner as
of the last day of any Accounting Period, an amount (which may be either a
positive or a deficit balance) equal to the amount that such Partner would
receive as a distribution if all assets held by the Company on such date were
sold for an aggregate amount of cash equal to the fair market value (as computed
for Capital Account purposes as of such last day of such Accounting Period) of
such assets, all liabilities were satisfied in accordance with their terms and
all remaining cash were distributed to the Partners in accordance with the
relevant provisions of Section 8 (computed after the contributions received and
distributions made by the Company during the Accounting Period ending on such
date have been taken into account as provided in Section 7.3).
"Tax Matters Partner" means the General Partner in its
capacity as the "tax matters partner" pursuant to Section 9.9(a).
"Transaction Documents" has the meaning assigned to such term
in the Credit Agreement.
"Transfer" or "Transferred" means, with respect to any legal
or beneficial interest in the Company, a direct or indirect sale, transfer,
assignment, gift, pledge, hypothecation or other disposition or encumbrance of
any nature of or on such interest, whether by operation of law or otherwise
(including a transfer as a result of a merger or consolidation involving a
Partner or a sale of all or substantially all of a Partner's assets).
"Transferee" means, with respect to any legal or beneficial
interest in the Company, the Person to whom the Transferor of such interest
desires to Transfer or has Transferred such interest.
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"Transferor" means, with respect to any legal or beneficial
interest in the Company, the Partner or other Person desiring to Transfer such
interest.
"Treasury Regulations" means the United States Treasury
regulations promulgated under the Code.
"Valuation Date" means (i) the last Business Day of each
Fiscal Quarter, (ii) a date selected by the Company within 48 hours prior to
each issuance (exclusive of Sundays and holidays) of Common Interests by the
Company, (iii) each distribution declaration date (after giving effect to the
relevant declaration), (iv) the date on which the Company terminates, and (v)
such other dates as determined by the Board of Directors, in accordance with the
valuation policies and guidelines approved from time to time by the Board of
Directors.
SECTION 2.
LIMITED PARTNERSHIP FORMATION AND IDENTIFICATION
2.1 Formation
The Company has been formed as a limited
partnership pursuant to the Delaware Act by the filing of the Certificate with
the Secretary of State, Division of Corporations, in accordance with the
Delaware Act on September 29, 2006. The Company is hereby continued under, and
its business and affairs shall be conducted in accordance with, the Delaware
Act, and this Agreement shall be governed by the laws of the State of
Delaware. Common Partners shall be admitted as Partners of the Company upon
the General Partner's execution of this Agreement as the attorney-in-fact for
such Common Partners. Preferred Partners shall be admitted as Partners of the
Company pursuant to the provisions of the applicable Statement of Preferences.
As of the date hereof, the Parent is the sole Common Partner.
2.2 Name and Place of Business
The name of the Company shall be "Xxxxxxxxxx
Opportunities Partners V, LP" or such other name or names as may be selected
by the General Partner from time to time with written notice given to the
Partners of such change. The principal office of the Company shall be at the
principal place of business of the General Partner at 0000 00xx Xxxxxx, Xxxxx
0000, Xxxxx Xxxxxx, Xxxxxxxxxx 00000, or other or additional places of
business as may be selected from time to time by the Company.
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2.3 Records of Partners
The addresses and schedules of capital accounts and
other matters related to the Partners shall be those set forth in the Company
records. A Partner may change its address by written notice to the Company, in
care of the General Partner, at the address set forth in Section 2.2.
2.4 Limited Partnership
The Company has been formed as a limited
partnership under and pursuant to the Delaware Act. The Board of Directors and
the Partners specifically intend and agree that the Company shall, for
purposes of the Code and state tax laws, be classified as a partnership and
none of them shall make any election or take any other action that would cause
their relationship under this Agreement to be excluded from the application of
all or any part of Subchapter K of the Code (or any successor provisions). The
Partners specifically intend and agree that the Company shall be a limited
partnership pursuant to the Delaware Act and not any other type of venture.
SECTION 3.
PURPOSE, NATURE OF BUSINESS AND POWERS
(a) The purposes of the Company and the business to be
carried on by it, subject to the limitations contained elsewhere in this
Agreement, are to engage in any business lawful for a corporation or
partnership formed under the laws of the State of Delaware, including to act
as an investment company.
(b) The Company shall have the power to do any and all
acts necessary, appropriate, proper, advisable, incidental or convenient to or
for the furtherance of the purposes and business described herein and for the
protection and benefit of the Company, and shall have, without limitation, any
and all of the powers of a partnership organized under the laws of the State
of Delaware.
(c) All property owned by the Company, real or
personal, tangible or intangible, shall be deemed to be owned by the Company
as an entity, and no Partner or Director, individually, shall have any
ownership of such property.
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SECTION 4.
TERM
The existence of the Company commenced on the date the
Certificate was filed in the Office of the Secretary of State and shall
continue in full force and effect until the end of the Investment Period, plus
up to two one-year extensions if requested by the General Partner and approved
by Common Partners holding a majority of the Common Interests.
SECTION 5.
PARTNERSHIP INTERESTS
5.1 Capital Accounts
A capital account ("Capital Account") shall be established
for each Partner and shall initially equal the Capital Contribution of such
Partner, which shall be equal to the aggregate amount of cash contributed by
such Partner to the Company plus the fair market value of property contributed
by such Partner to the Company (net of any liabilities secured by such
property that the Company is considered to assume or take subject or pursuant
to Section 752 of the Code), minus the amount of money and the fair market
value of property, if any, distributed to such Partner by the Company (net of
any liabilities secured by such property that such Partner is considered to
assume or take subject or pursuant to Section 752 of the Code). Each such
Capital Account shall be adjusted in accordance with the provisions of Section
7.
5.2 Classes and Series
The General Partner shall have the authority, with the
approval of the Directors and without the approval of any other Partners of
the Company, to create, classify or reclassify one or more classes of
Interests and one or more series of any or all of such classes, each of which
classes and series thereof shall have such designations, powers, preferences,
voting, conversion and other rights, limitations, qualifications and terms and
conditions as the General Partner with the approval of the Directors shall
determine from time to time with respect to each such class or series by
amendment to this Agreement without the approval of any Partners of the
Company; provided, however, that no reclassification of any existing Interests
and no modifications of any of the designations, powers, preferences, voting,
conversion or other rights, limitations, qualifications and terms and
conditions of any existing Interests may be made by the General Partner
without the affirmative vote of the Partners specified in Section 10.3 to the
extent required thereby and the satisfaction of any conditions to such
reclassification as set forth in the applicable Statement of Preferences. The
designations, powers, preferences, voting, conversion and other rights,
limitations, qualifications and terms and conditions of the Series A Preferred
Interests in the form of the Statement of Preferences therefor are attached as
Appendix A.
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5.3 Issuance of Interests
(a) Subject to Section 5.3(b), the General Partner, in
its discretion, may from time to time without the vote of the Partners issue
Interests of any class or any series of any such class to such Person or
Persons and for such amount and type of consideration, including cash or
property, at such time or times, and on such terms as the General Partner with
the approval of the Directors may determine, and may in such manner acquire
other assets (including the acquisition of assets subject to, and in
connection with the assumption of, liabilities) and businesses.
(b) Number of Holders. The aggregate number of
Partners at no time shall exceed 95 "partners", as determined for purposes of
ss.1.7704-1(h) of the Treasury Regulations. Each Holder of a Preferred
Interest and a Common Interest must (i) be a "United States Person" (as
defined in Section 7701(a)(30) of the Code), or (ii) represent to the Company
that it holds its Interest in the Company in connection with its conduct of a
trade or business within the United States, as determined for U.S. federal
income tax purposes, and provide the Company with a properly executed IRS Form
W-8 ECI with respect to its acquisition of its interest in the company upon
becoming a Partner and at such subsequent times as required by law or as the
Company may reasonably request.
5.4 Rights of Partners
The Interests shall be personal property giving only the
rights specifically set forth in this Agreement. The ownership of the Assets
of every description is vested in the Company. The right to conduct and
supervise the conduct of the business of the Company is vested exclusively in
the General Partner, subject to the rights of the Directors specified herein
or required by the Investment Company Act (subject to the right of the General
Partner and Board of Directors to delegate all or any part of their authority
to any person or group of persons, including, without limitation, the
Investment Manager), and the Partners shall have no interest therein other
than the beneficial interest conferred by their Interests, and they shall have
no right to call for any partition or division of any property, profits,
rights or interests of the Company nor can any Partner (other than the General
Partner) be called upon to share or assume any losses of the Company or suffer
an assessment of any kind by virtue of their ownership of Interests. No
Interests of any class or series shall entitle the holder to preference,
preemptive, appraisal, conversion or exchange rights (except as otherwise
specified in this Agreement or as specified by the General Partner in the
designation or redesignation of any such class or series).
SECTION 6.
REGISTERED OFFICE AND AGENT FOR SERVICE OF PROCESS
The Corporation Trust Company is hereby designated,
subject to change by the General Partner, as the registered office of the
Company and as the agent upon whom process issued by authority of or under any
law of the State of Delaware may be served.
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SECTION 7.
CAPITAL ACCOUNTS AND ALLOCATIONS
7.1 Capital Contributions of Partners
(a) Prior to being admitted as a Partner of the
Company, a Common Partner must satisfy the General Partner that it and each of
its equity holders that is indirectly charged the amounts allocated to the
General Partner pursuant to Section 8.1(b)(iii) and (iv) is an "accredited
investor" as defined in Rule 501(a) under the Securities Act and a "qualified
client" within the meaning of Rule 205-3 of the Advisers Act and shall be
deemed to have contributed to the Company all of the Company's Net Asset
Value. On the date of issuance of any Preferred Interests, the Person who is
or who has previously been admitted as a Partner in respect of such Preferred
Interest in accordance with the applicable Statement of Preferences shall, in
connection therewith, contribute to the Company an amount in cash equal to the
purchase price for the Preferred Interests acquired on such date.
7.2 Withdrawal of Capital
No Partner shall have any right to withdraw from the
Company except in connection with the admission of one or more Transferees of
all of such Partner's Interests in the Company. No Partner shall have any
right to require the Company to repurchase or redeem all or any portion of its
Interests except as provided in or pursuant to any Statement of Preferences.
7.3 Capital Accounts
(a) Without limiting the generality of the foregoing
and subject to paragraphs (b), (c), (d) and (e) below and to Section 7.8, the
Capital Account maintained for each Partner shall initially have a balance
equal to the Capital Contribution made by such Partner to the Company;
thereafter, such balance will be increased by the aggregate amount of Net
Profit and other items of income and gain allocated to such Partner pursuant
to Sections 7.4-7.8; decreased by the aggregate amount of distributions made
by the Company to such Partner; decreased by the aggregate amount of Net Loss
and other items of deduction, expenditure and loss allocated to such Partner
pursuant to Sections 7.4-7.8. In crediting or debiting a Partner's Capital
Account, whether in connection with its Capital Contribution or thereafter,
the Capital Account balance shall be (i) increased by the amount of any
liability of the Company that the Partner assumes (within the meaning of
Treasury Regulations ss. 1.704-1(b)(2)(iv)(c)) (excluding liabilities assumed
in connection with the distribution of Company property and excluding
increases in such Partner's share of Company liabilities pursuant to Section
752 of the Code) and (ii) decreased by the amount of any individual liability
of such Partners for which the Company becomes personally and primarily liable
(excluding liabilities assumed in connection with the contribution of property
to the Company by such Partner and excluding decreases in such Partner's share
of Company liabilities pursuant to Section 752 of the Code).
(b) The General Partner may adjust the Partners'
Capital Accounts in accordance with, and upon the occurrence of an event
described in Treasury Regulations Section 1.704-1(b)(2)(iv)(f) including but
not limited to the addition of new Partners, to reflect a revaluation of
14
the Company's assets on the Company's books. Such adjustments to the Partners'
Capital Accounts shall be made in accordance with Treasury Regulations Section
1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization
and gain or loss with respect to such revalued property.
(c) Except as may be required by the Delaware Act or
any other applicable law, no Partner with a negative balance in its Capital
Account shall have any obligation, in connection with the liquidation of the
Company or otherwise, to restore such negative balance.
(d) Upon any Transfer (other than a pledge or
hypothecation) of an interest in the Company, a proportionate share of the
Capital Account of the Transferor shall be transferred to the Transferee, and
the Transferee shall be deemed to have made the contributions that were made
by the Transferor and to have received the distributions and allocations that
were received by the Transferor from the Company, in each case to the extent
of the interest transferred.
(e) All provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Treasury
Regulations Section 1.704-1(b)(2)(iv), as amended, and shall be interpreted
and applied in a manner consistent with such Treasury Regulations. The General
Partner shall make any appropriate modifications in the event unanticipated
events might otherwise cause this Agreement not to comply with the Treasury
Regulations promulgated under Section 704 of the Code.
7.4 Allocations in General
Company income, gain, loss and expense shall be allocated
to the Capital Accounts of the Partners in accordance with Sections 7.5-7.9.
7.5 Allocation of Net Profit and Net Loss
The General Partner shall seek to determine and allocate
all items of profit, gain, loss and deductions, as described below, with
respect to each Accounting Period of the Company within 45 days after the end
of each Accounting Period other than any Accounting Period ending on the last
day of the Fiscal Year and within 60 days after the end of each Fiscal Year.
After giving effect to the special allocations set forth in Sections 7.6, 7.7
and 7.8, the Net Profit or Net Loss of the Company for such Accounting Period
shall be allocated to the Capital Accounts of the Partners as follows:
(a) Net Profit and Net Loss of the Company shall be
allocated among the Partners so as to reduce proportionately (i) in the case
of Net Profit, the difference between their respective Target Capital Accounts
and Partially Adjusted Capital Accounts as of the end of such Accounting
Period, or (ii) in the case of Net Loss, the difference between their
respective Partially Adjusted Capital Accounts and Target Capital Accounts as
of the end of such Accounting Period. No portion of the Company's Net Profit
or Net Loss for any Accounting Period shall be allocated to any Partner, in
the case of Net Profit, whose Partially Adjusted Capital Account is greater
than or equal to its Target Capital Account or, in the case of Net Loss,
15
whose Target Capital Account is greater than or equal to its Partially
Adjusted Capital Account as of the end of such Accounting Period.
(b) The following special allocations of items of
Company income, gain, loss and expense taken into account in determining Net
Profit and Net Loss shall be made in the circumstances described below:
(i) if the Company has Net Profit for any
Accounting Period and, notwithstanding the application
of Section 7.5(a), any Partner's Partially Adjusted
Capital Account is greater than its Target Capital
Account (determined prior to giving effect to this
Section 7.5(b)), then the Partner with such difference
shall be specially allocated items of Company loss or
expense for such Accounting Period that are taken into
account in determining Net Profit and Net Loss (to the
extent available) equal to the difference between its
Partially Adjusted Capital Account and its Target
Capital Account;
(ii) if the Company has Net Loss for any
Accounting Period and, notwithstanding the application
of Section 7.5(a), any Partner's Partially Adjusted
Capital Account is less than its Target Capital Account
(determined prior to giving effect to this Section
7.5(b)), then the Partner with such difference shall be
specially allocated items of Company income or gain for
such Accounting Period that are taken into account in
determining Net Profit and Net Loss (to the extent
available) equal to the difference between its Partially
Adjusted Capital Account and its Target Capital Account;
and
(iii) if the Company has neither Net Profit nor
Net Loss for any Accounting Period and, notwithstanding
the application of Section 7.5(a), any Partner's Target
Capital Account differs from its Partially Adjusted
Capital Account (determined prior to giving effect to
this Section 7.5(b)), then the Partner with such
difference shall be specially allocated items of Company
income or gain (if such Partner's Target Capital Account
exceeds its Partially Adjusted Capital Account) or loss
or expense (if such Partner's Target Capital Account is
less than its Partially Adjusted Capital Account) for
such Accounting Period that are taken into account in
determining Net Profit and Net Loss (to the extent
available) equal to the difference between its Partially
Adjusted Capital Account and its Target Capital Account.
(c) The Net Profit or Net Loss of the Company for
purposes of determining allocations to the Capital Accounts of the Partners
will be determined in the same manner as the determination of the Company's
taxable income, except that (i) items that are required by Section 703(a)(1)
of the Code to be separately stated will be included; (ii) items of income
that are exempt from inclusion in gross income for federal income tax purposes
will be treated as items of income, and related deductions that are disallowed
under Section 265 of the Code will be treated as deductions; (iii) Section
705(a)(2)(B) Expenditures will be treated as deductions; (iv) items of gain,
loss, depreciation, amortization, or depletion that would be computed for
federal income tax purposes by reference to the Cost Basis of an item of
Company property will be determined by reference to the value of such item of
property for purposes of determining Net Asset Value; and (v) the effects of
upward and downward revaluations of Company property pursuant to Section
7.3(b) will be treated as gain or loss respectively from the sale of such
property.
16
(d) In the event that the value of any item of Company
property for purposes of determining Net Asset Value differs from its Cost
Basis, subject to Treasury Regulations ss. 1.704-3(d)(2), the amount of
depreciation, depletion, or amortization for purposes of determining Net
Profit or Net Loss for a period with respect to such property will be computed
so as to bear the same relationship to the value of such property for purposes
of determining Net Asset Value as the depreciation, depletion, or amortization
computed for tax purposes with respect to such property for such period bears
to the Cost Basis of such property. If the Cost Basis of such property is
zero, the depreciation, depletion, or amortization with respect to such
property for purposes of determining Net Profit or Net Loss will be computed
by using a method consistent with the method that would be used for tax
purposes if the Cost Basis of such property were greater than zero.
(e) The parties hereto acknowledge and agree that the
purpose of the allocations set forth in this Section 7.5 is to allocate Net
Profit and Net Loss among the Partners in a manner that conforms, as closely
as possible, to the manner in which amounts reflecting Aggregate Net Profit
would be distributed among the Partners pursuant to Section 8. In all events,
the basic economic arrangement of the Partners set forth in Section 8 shall be
controlling. The parties hereto further acknowledge and confirm the authority
of the General Partner, pursuant to Section 7.6 or otherwise, to make such
corrective allocations as it deems necessary to achieve the purpose described
in the two immediately preceding sentences.
7.6 Corrective Adjustments
If, for any reason, allocations of Net Profit and Net Loss
(or any item of income, gain, loss or expense taken into account in
determining Net Profit and Net Loss) do not correspond to distributions of
amounts reflecting Aggregate Net Profit or other property made or required to
be made by the Company pursuant to Section 8 (due, for example, to events
occurring between the time that such allocations are made and the time that
the related distributions are made), then the General Partner shall allocate
Net Profit and Net Loss (and, if necessary, items of Company income (including
gross income), gain, loss and expense taken into account in determining Net
Profit and Net Loss) and any other items of Company income, gain, loss and
expense recognized in subsequent Accounting Periods among the Partners in such
a manner as shall, in the General Partner's sole discretion, eliminate as
rapidly as possible the disparity between the prior allocations of Net Profit
and Net Loss (or items taken into account in determining Net Profit and Net
Loss), on the one hand, and those non-corresponding distributions, on the
other hand. In all cases, any corrective adjustments made pursuant to this
Section 7.6 shall be controlled by the economic arrangement of the Partners
set forth in Section 8.
7.7 Special Allocations
Prior to making any allocations under Section 7.5 or
Section 7.6, the following special allocations shall be made in the following
order:
(a) Limitation on Net Losses. If any allocation of Net
Loss or an item of deduction, expenditure or loss to be made pursuant to
Section 7.5, Section 7.6 or this Section 7.7 for any Accounting Period would
cause a deficit in any Partner's Adjusted Capital Account (or
17
would increase the amount of any such deficit), then the relevant amount shall
be allocated to such Partners that have positive Adjusted Capital Account
balances in proportion to the respective amounts of such positive balances
until all such positive balances have been reduced to zero.
(b) Qualified Income Offset. If any Partner
unexpectedly receives any adjustment, allocation or distribution described in
Treasury Regulations Section 1.704-1(b)(2)(iv)(f)(6) that creates or increases
a deficit in the Adjusted Capital Account of such Partner, then items of
income and gain (consisting of a pro rata portion of each item of Company
income, including gross income, and gain for the relevant Fiscal Year and, if
necessary, for subsequent Fiscal Years) shall be allocated to such Partner in
an amount and manner sufficient to eliminate such deficit as quickly as
possible. This Section 7.7(b) is intended to constitute a "qualified income
offset" within the meaning of Treasury Regulations Section
1.704-1(b)(2)(ii)(d), and this Section 7.7(b) shall be interpreted and applied
consistently therewith.
(c) Substantial Economic Effect. Notwithstanding
anything in this Agreement to the contrary, if the allocation of any item of
income, gain, loss or expense pursuant to this Section 7 does not have
substantial economic effect under Treasury Regulations Section 1.704-1(b)(2)
and is not in accordance with the Partners' interests in the Company within
the meaning of Treasury Regulations Section 1.704-1(b)(3), then such item
shall be reallocated in such manner as to (i) have substantial economic effect
or be in accordance with the Partners' interests in the Company and (ii)
result as nearly as possible in the respective balances of the Capital
Accounts that would have been obtained if such item had instead been allocated
under the provisions of this Section 7 without giving effect to this Section
7.7(c).
(d) Corrective Allocations. If any amount is allocated
pursuant to paragraph (a), (b) or (c) of this Section 7.7, then,
notwithstanding anything in Section 7.5 to the contrary (but subject to the
provisions of paragraphs (a), (b) and (c) of this Section 7.7), income, gain,
loss and expense, or items thereof, shall thereafter be allocated in such
manner and to such extent as may be necessary so that, after such allocation,
the respective balances of the Capital Accounts will equal as nearly as
possible the balances that would have been obtained if the amount allocated
pursuant to paragraph (a), (b) or (c) of this Section 7.7 instead had been
allocated under the provisions of Sections 7.5-7.8 without giving effect to
the provisions of such paragraph.
(e) Amendments to Allocations. The provisions hereof
governing Company allocations and distributions, including the distribution of
assets upon liquidation of the Company, are intended to comply with the
requirements of Sections 704(b) and (c) of the Code and the Treasury
Regulations that have been or may be promulgated thereunder, and shall be
interpreted and applied in a manner consistent therewith. If, in the opinion
of the General Partner, the allocations of income, gain, loss and expense
provided for herein do not comply with (i) such Code provisions or Treasury
Regulations or (ii) any other applicable provisions of the Code or Treasury
Regulations (including the provisions relating to nonrecourse deductions and
partner nonrecourse deductions), then, notwithstanding anything in this
Agreement to the contrary, such allocations shall, upon notice in writing to
each Partner, be modified in such manner as the General Partner determines is
necessary to satisfy the relevant provisions of the Code or Treasury
Regulations, and the General Partner shall have the right to amend this
Agreement (without the consent of any other Partner being required for such
amendment) to
18
reflect any such modification; provided, however, that no such modification
shall alter materially the economic arrangement among the Partners.
7.8 Adjustments to Reflect Changes in Interests
With respect to any Accounting Period during which any
Partner's interest in the Company changes, whether by reason of the admission
of a new Partner, the withdrawal of a Partner, a non-pro rata contribution of
capital to the Company or otherwise as described in Section 706(d)(1) of the
Code and Treasury Regulations issued thereunder, allocations of Net Profit,
Net Loss and other items of Company income, gain, loss and expense shall be
adjusted appropriately to take into account the varying interests of the
Partners during such Accounting Period. The General Partner, in good faith and
subject to approval by the Directors, shall select the method (or combination
of methods) of making such adjustments.
7.9 Allocation of Taxable Income and Loss
(a) Except as otherwise provided in this Section 7.9,
the taxable income or loss of the Company for any Accounting Period shall be
allocated among the Partners in proportion to and in the same manner as Net
Profit, Net Loss and separate items of income, gain, loss and expense
(excluding items for which there are no related tax items) are allocated among
the Partners for Capital Account purposes pursuant to the provisions of
Sections 7.5, 7.6, 7.7 and 7.8 giving effect to Sections 704(b) and (c) of the
Code. Except as otherwise provided in this Section 7.9, the allocable share of
a Partner for tax purposes in each specified item of income, gain, loss or
expense of the Company comprising Net Profit, Net Loss or any item allocated
pursuant to Section 7.5, 7.6, 7.7 or 7.8, as the case may be, shall be the
same as such Partner's allocable share of Net Profit, Net Loss or the
corresponding item for such Accounting Period. To the fullest extent
practicable and permitted under the Code, all items of ordinary deduction and
income shall be allocated separately from items of capital loss and gain.
(b) The items of income, gain, loss and expense
allocated to the Partners for tax purposes pursuant to this Section 7.9 shall
not be reflected in the Partners' Capital Accounts. Any elections or other
decisions relating to such allocations shall be made by the General Partner in
any manner that reasonably reflects the purpose and intent of this Agreement
and is consistent with the economic arrangement among the Partners.
7.10 Guaranteed Payments
The amounts payable to a Preferred Partner pursuant to
Section 8.1 shall be treated by such holder and the Company as "guaranteed
payments" under Section 707(c) of the Code.
7.11 Allocation of Nonrecourse Deductions
Nonrecourse Deductions for each fiscal year will be
allocated among the Partners in proportion to their respective Section 8.1
Percentages for such fiscal year.
19
7.12 Allocation of Partner Nonrecourse Deductions
Notwithstanding any other provisions of the Agreement, any
item of Partner Nonrecourse Deduction with respect to a Partner Nonrecourse
Debt will be allocated to the Partner or Partners who bear the economic risk
loss for such Partner Nonrecourse Debt in accordance with Treasury Regulations
ss. 1.704-2(i).
7.13 Excess Nonrecourse Liabilities
For the purpose of determining the Partners' shares of the
Company's Excess Nonrecourse Liabilities pursuant to Treasury Regulations
xx.xx. 1.752-3(a)(3) and 1.707-5(a)(2)(ii), and solely for such purpose, the
Partners' interests in profits are hereby specified to be their respective
Section 8.1(b) Percentages.
7.14 Treatment of Certain Distributions
(a) In the event that (i) the Company makes a
distribution that would (but for this subsection (a)) be treated as a
Nonrecourse Distribution, and (ii) such distribution does not cause or
increase a deficit balance in the Capital Account of the Partner receiving
such distribution as of the end of the Company's taxable year in which such
distribution occurs, then such distribution may be treated as not constituting
a Nonrecourse Distribution to the extent permitted by Treasury Regulations ss.
1.704-2(h)(3).
(b) In the event that (i) the Company makes a
distribution that would (but for this subsection (b)) be treated as a Partner
Nonrecourse Distribution, and (ii) such distribution does not cause or
increase a deficit balance in the Capital Account of the Partner receiving
such distribution as of the end of the Company's taxable year in which such
distribution occurs, then such distribution may be treated as not constituting
a Partner Nonrecourse Distribution to the extent permitted by Treasury
Regulations ss. 1.704-2(i)(6).
SECTION 8.
DISTRIBUTIONS
8.1 Distributions
(a) From time to time, the General Partner will
determine, subject to approval by the Directors if they so determine, the
amount of distributions to be made, in the order of priority set forth in
Section 8.1(b), of all or any portion of the Company's Aggregate Net Profit,
in each case to the extent permitted by the Borrowing Arrangements, the
Statement of Preferences for any Preferred Interests and any other agreements
to which the Company is subject. Amounts not distributed may be reinvested,
directly or indirectly, in Fund Investments (as such term is defined in the
Credit Agreement).
20
(b) Distributions of amounts reflecting Previously
Undistributed Net Profit shall be made at such times as the General Partner in
its sole discretion may determine and in the following order of priority:
(i) 100% to the Preferred Partners in accordance
with the Statement of Preferences for each series of
Preferred Interests;
(ii) 100% to the Common Partners in accordance
with their relative Capital Account balances until the
cumulative distributions and amounts distributable in
respect of the Common Interests exceed an 8% annual
weighted average return on undistributed Capital
Contributions attributable to the Common Partners (such
return, the "Hurdle");
(iii) 100% to the General Partner until the
General Partner has received 25% of the cumulative sum
of all amounts previously distributed to the Common
Partners under this Section 8.1(b) (such distributions,
the "Catch-up Amount"); and
(iv) 80% to the Common Partners in accordance
with their relative Capital Account balances and 20% to
the General Partner.
(c) For purposes of determining whether the Hurdle has
been exceeded and whether the General Partner has received the Catch-up
Amount, the performance of the Company will include the performance of the
Parent for periods prior to the date hereof and the distributions, if any,
made by the Parent to its members in respect of its operations prior to the
date hereof and by the Company pursuant to Section 8.1(b)(i), (ii), (iii).
(d) The General Partner may, subject to approval by
the Directors if they so determine, determine to distribute to any class or
classes of the Partners any amounts representing a return of capital or
designated as a return of capital ("Returned Capital"); provided, however,
that the General Partner shall not make a distribution of Returned Capital to
any class at any time when it could not make such distribution under the
Investment Company Act or the Delaware Act. Such Returned Capital shall not be
distributed in accordance with Section 8.1(b). Any Returned Capital to be
distributed shall be distributed to the Partners in proportion to their
respective Interests in the class or classes to which such capital is being
distributed.
(e) No Partner shall be entitled to receive
distributions in any Accounting Period in excess of its Capital Account
balance, after taking into account allocations of Net Profit or Net Loss for
the applicable Accounting Period.
(f) Any distribution by the Company pursuant to the
terms of this Section 8.1 or Section 16.4 to the Person shown on the Company's
records as a Partner or to such Person's legal representatives, or to the
assignee of the right to receive such distributions as provided herein, shall
acquit the Company and the General Partner of all liability to any other
Person who may be interested in such distribution by reason of any other
assignment or Transfer of such Partner's Interest for any reason (including an
assignment or Transfer thereof by reason of death, incompetence, bankruptcy or
liquidation of such Partner).
21
(g) Notwithstanding any provision to the contrary
contained in this Agreement, the Company, and the General Partner on behalf of
the Company, shall not make a distribution to any Partner on account of its
Interest if such distribution would violate Section 17-607 of the Delaware Act
or other applicable law.
(h) Notwithstanding the foregoing provisions of this
Section 8.1 (or any other provision hereof), the General Partner may set aside
reasonable reserves for anticipated liabilities, obligations or commitments of
the Company.
8.2 Withholding
(a) The Company shall comply with withholding
requirements under United States federal, state and local law and shall remit
amounts withheld to and file required forms with the applicable jurisdictions.
To the extent the Company is required to withhold and pay over any amount to
any authority with respect to distributions or allocations to any Partner
(whether, General Partner, Common Partner or Preferred Partner), the amount
withheld shall be deemed to be a distribution by the Company to such Partner
in the amount of the withholding.
(b) If any amount was withheld on income received by
the Company and the amount of the withholding was calculated, under applicable
law, with respect to income allocable to some (but not all) of the Partners
such withholding (and any related tax or book income or deduction item) shall
be allocated, in a manner reasonably determined by the General Partner, to the
Partners with respect to whom the withholding was calculated, and
distributions shall be adjusted accordingly; provided, however, that if the
Partner to whom such withholding is allocated is not a United States person
for U.S. federal income tax purposes, such Partner shall reimburse the Company
for the excess of the withholding tax paid on its behalf over the amount that
otherwise would have been payable in respect of such Partner had such Partner
been a United States person. If the Partner fails to so reimburse the Company,
such excess will be treated as an advance repayable with interest out of the
first available amounts that would otherwise be payable to such Partner.
SECTION 9.
MANAGEMENT, GENERAL PARTNER AND BOARD OF DIRECTORS
9.1 Management Generally
(a) Subject to the requirements of the Investment
Company Act, the voting rights of the Interests and the rights of the Board of
Directors set forth herein, the management of the Company shall be vested
exclusively in the General Partner, which shall have, subject to the
foregoing, all of the power and authority of a "general partner" of the
Company within the meaning of the Delaware Act, including the authority to
appoint officers and to authorize persons to act on behalf of the Company and
engage third parties to provide services to the Company and to perform any
permissible activity and is further authorized to delegate such power and
authority to such officers or authorized Persons as it determines to be
appropriate. The Board of Directors may designate one or more committees each
of which shall have all or such lesser
22
portion of the power and authority of the entire Board of Directors as the
Directors shall determine from time to time, except to the extent that action
by the entire Board of Directors or particular Directors is required by the
Investment Company Act.
(b) Notwithstanding Section 9.1(a), the Board of
Directors shall have, and the General Partner hereby irrevocably delegates to
them pursuant to Section 17-403(c) of the Delaware Act, all of the power and
authority set forth in any provision of this Agreement or conferred on them
with respect to an investment company by or pursuant to the Investment Company
Act and any other federal securities laws, including to appoint and terminate
the General Partner, the Investment Manager, the Co-Manager and the
independent public accountants of the Company in accordance with the
provisions of the Investment Company Act, to establish the policies and
procedures for determining the Net Asset Value of the Company and to review
and adjust the determinations thereof by the General Partner, to approve all
policies and procedures, including compliance policies and procedures, of the
Company and of the General Partner, the Investment Manager, the Co-Manager and
any transfer agent, to approve co-investments as contemplated by any exemptive
order applicable to the Company and to resolve conflicts of interest between
the Company and Affiliated Persons thereof. Notwithstanding Section 9.1(a),
the Board of Directors shall have full power and authority to allocate any or
all of the investment management of the Company's Assets to the Investment
Manager or the Co-Manager instead of to the General Partner.
9.2 Board of Directors
(a) Subject to the terms of each Statement of
Preferences, the number of Directors shall be such number, not less than
three, as shall be approved from time to time by a majority of Directors then
in office. No reduction in the number of Directors shall have the effect of
removing any Director from office prior to the expiration of his or her term.
An individual nominated as a Director shall be at least 21 years of age and
not older than such age as shall be approved from time to time by not less
than two-thirds of the Directors then in office and shall not be under legal
disability. Directors need not own Interests or be Partners and may succeed
themselves in office. The names and addresses of the Directors shall be set
forth in the records of the Company.
(b) Any Director may resign as a Director (without
need for prior or subsequent accounting) by an instrument in writing signed by
him and delivered or mailed to the Chairman, if any, the President or the
Secretary and such resignation shall be effective upon such delivery, or at a
later date provided in such instrument. Subject to the rights of the Preferred
Interests with respect to Directors elected solely by the Preferred Interests
pursuant to the Investment Company Act, any Director may be removed (provided
that the aggregate number of Directors after such removal shall not be less
than the minimum number specified in Section 9.2(a) hereof) for cause at any
time by the act of a majority of the remaining Directors, specifying the date
when such removal shall become effective. Subject to the rights of the
Preferred Interests with respect to Directors elected solely by the Preferred
Interests pursuant to the Investment Company Act, any Independent Director may
be removed (provided that the aggregate number of Directors after such removal
shall not be less than the minimum number Section 9.2(a) hereof) without cause
at any time by the act of two-thirds of the remaining Directors, and any
Director can be removed without cause by vote of not less than two-thirds of
the aggregate voting power of the Interests
23
entitled to vote in the election of such Director, specifying the date when
such removal shall become effective.
(c) The term of office of a Director shall terminate
and a vacancy shall occur in the event of the removal, resignation,
incompetence or other incapacity to perform the duties of the office, or
death, of a Director. Subject to the rights of the Preferred Interests with
respect to Directors elected solely by the Preferred Interests pursuant to the
Investment Company Act and pursuant to any Statement of Preferences, whenever
a vacancy in the Board of Directors shall occur, the remaining Directors may
fill such vacancy by appointing an individual having the qualifications
described in this Agreement by a written instrument signed or adopted by a
majority of the Directors then in office or by election of the holders of
Interests, or may leave such vacancy unfilled, or may reduce the number of
Directors (provided that the aggregate number of Directors after such removal
shall not be less than the minimum specified in Section 9.2(a) hereof). Any
vacancy created by an increase in Directors may be filled by the appointment
of an individual having the qualifications described in this Agreement by a
majority of the Directors then in office or by election of the holders of
Interests. No vacancy shall operate to annul this Agreement or to revoke any
existing agency created pursuant to the terms of this Agreement. Whenever a
vacancy in the number of Directors shall occur, until such vacancy is filled
as provided herein, the Directors in office, regardless of their number, shall
have all the powers granted to the Directors and shall discharge all the
duties imposed upon the Directors by this Agreement.
(d) Meetings of the Directors shall be held from time
to time upon the call of the Chairman, if any, the President, the Secretary or
any two Directors. Regular meetings of the Directors may be held without call
or notice at a time and place fixed by resolution of the Directors. Notice of
any other meeting shall be mailed via overnight courier not less than 48 hours
before the meeting or otherwise actually delivered orally or in writing not
less than 24 hours before the meeting, but may be waived in writing by any
Director either before or after such meeting. The attendance of a Director at
a meeting shall constitute a waiver of notice of such meeting except where a
Director attends a meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting has not been
lawfully called or convened. The Directors may act with or without a meeting.
A quorum for all meetings of the Directors shall be one-third of the Directors
then in office. Unless provided otherwise in this Agreement, any action of the
Directors may be taken at a meeting by vote of a majority of the Directors
present (a quorum being present) or without a meeting by written consent of a
majority of the Directors or such other proportion as shall be specified
herein for action at a meeting at which all Directors then in office are
present.
(i) Any committee of the Directors may act with
or without a meeting. A quorum for all meetings of any
such committee shall be one third of the Partners
thereof. Unless provided otherwise in this Agreement,
any action of any such committee may be taken at a
meeting by vote of a majority of the Partners of such
committee present (a quorum being present) or without a
meeting by written consent of a majority of the Partners
of such committee or such other proportion as shall be
specified herein for action at a meeting at which all
committee Partners are present.
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(ii) With respect to actions of the Directors
and any committee of the Directors, Directors who are
Interested Persons in any action to be taken may be
counted for quorum purposes under this Section and shall
be entitled to vote to the extent not prohibited by the
Investment Company Act.
(iii) All or any one or more Directors may
participate in a meeting of the Directors or any
committee thereof by means of a conference telephone or
similar communications equipment by means of which all
persons participating in the meeting can hear each
other; participation in a meeting pursuant to any such
communications system shall constitute presence in
person at such meeting except as otherwise provided by
the Investment Company Act.
(iv) The Directors may, but shall not be
required to, elect a Chairman of the Board of Directors,
who shall not, in his or her capacity as such, be an
officer of the Company and who shall serve at the
pleasure of the Board of Directors. Any Chairman of the
Board of Directors elected by the Directors need not be
an Independent Director, unless otherwise required by
applicable law.
(e) The Directors shall elect a Principal Executive
Officer, a Secretary, a Principal Financial Officer and any other authorized
Persons the Directors consider appropriate, each of whom shall serve at the
pleasure of the Board of Directors or until their successors are elected. The
Directors may elect or appoint or may authorize the Chairman, if any, or
Principal Executive Officer to appoint such other officers or agents or other
authorized Persons with such other titles and powers as the Board of Directors
may deem to be advisable. Any Chairman shall, and the Principal Executive
Officer, Secretary and Principal Financial Officer may, but need not, be a
Director.
(f) The Directors and officers shall owe to the
Company and the holders of Interests the same fiduciary duties as owed by
directors and officers of corporations to such corporations and their
stockholders under the general corporation law of the State of Delaware.
Directors elected by the holders of Preferred Interests shall have no special
duties to the holders of Preferred Interests. The powers of the Directors may
be exercised without order of or resort to any court. No Director shall be
obligated to give any bond or other security for the performance of any of his
duties or powers hereunder.
(g) The Board of Directors may adopt and from time to
time amend or repeal By-Laws ("By-Laws") for the conduct of the business of
the Company. Such By-Laws shall be binding on the Company and the Partners
unless inconsistent with the provisions of this Agreement. The Partners shall
not have authority to adopt, amend or repeal By-Laws.
(h) Any determination as to what is in the interests
of the Company made by the Directors in good faith shall be conclusive. In
construing the provisions of this Agreement, the presumption shall be in favor
of a grant of power to the Directors.
9.3 Expenses of the Company
(a) The Company shall have power to incur and pay out
of the Assets or income of the Company any expenses necessary or appropriate
to carry out any of the purposes of this
25
Agreement, and the business of the Company. The Directors may pay themselves
such compensation as they in good faith may deem reasonable and may be
reimbursed for expenses reasonably incurred by themselves on behalf of the
Company.
(b) The Company shall pay, and shall reimburse the
General Partner, the Investment Manager, the Co-Manager and each of their
respective Affiliates for, any costs and expenses that, in the good faith
judgment of the Board of Directors, are incurred in the formation, financing
or operation of the Company, including, without limitation, the Advisory Fees
and other costs and expenses specified herein or in the Advisory Agreement or
the Co-Advisory Agreement to be paid by the Company; fees and expenses of
offering Interests or debt instruments and enhancing or assuring the credit
quality thereof; fees and expenses relating to short-term investments of cash
and investments in Portfolio Companies including the structuring, negotiation,
acquisition, syndication, holding, restructuring, recapitalization and
disposition thereof or relating to proposed portfolio investments which are
not consummated; reasonable premiums for insurance protecting the Company, the
General Partner, the Investment Manager, the Co-Manager, any of their
respective Affiliates and any of their respective employees and agents; legal,
compliance, administrative, custodial and accounting expenses; auditing
expenses; appraisal expenses; expenses relating to organizing companies
through or in which investments in Portfolio Companies will be made; expenses
incurred in maintaining the places of business of the Company; costs and
expenses of preparing and maintaining the books and records of the Company and
entities through which it invests; costs and expenses that are classified as
extraordinary expenses under generally accepted accounting principles; taxes
or other governmental charges payable by the Company; costs and expenses
incurred in connection with any actual or threatened litigation, and any
judgments or settlements paid in connection with litigation, involving the
Company, a Portfolio Company or a Person entitled to indemnification from the
Company; expenses (including legal fees and expenses) incurred in connection
with the bankruptcy or reorganization of any Portfolio Company; costs of
reporting to the Partners, creditors and regulatory authorities; costs of
responding to regulatory inquiries; costs of Partner meetings and the
solicitation of Partner consents; costs incurred in valuing assets; costs of
winding up and liquidating the Company; and interest, distributions and fees
under the Credit Agreement, other indebtedness incurred by the Company and the
Interests.
(c) The Company shall pay, and shall reimburse the
General Partner, the Investment Manager, the Co-Manager and each of their
Affiliates for, all legal, tax, accounting and other expenses (including
organizational expenses) incurred in connection with the Credit Agreement, the
Preferred Interests and the formation of the Company and related entities, and
all fees payable to any placement agents in connection with subscriptions for
the Interests and to any other agents, lenders, arrangers or other Persons in
connection with the Credit Agreement and the placement and sale of the
Preferred Interests.
(d) The Company shall pay, and shall reimburse the
Co-Manager for, any reasonable transportation and other travel costs and
expenses incurred by the Co-Manager in connection with making any
representative on any investment committee available for meetings with the
other Partners of such investment committee.
26
9.4 Partners' Consent
To the fullest extent permitted by law, each Partner
hereby consents to the exercise by the General Partner, the Board of Directors
and the Investment Manager of the powers conferred on them by or pursuant to
this Agreement.
9.5 Exculpation
No Partner (other than the General Partner) shall be
subject in such capacity to any personal liability whatsoever to any Person in
connection with the Assets or the acts, obligations or affairs of the Company.
Partners (other than the General Partner) shall have the same limitation of
personal liability as is extended to stockholders of a private corporation for
profit incorporated under the general corporation law of the State of
Delaware. Except as otherwise required by law, the General Partner, the
Directors, the Investment Manager, the Co-Manager, and their respective
Affiliated Persons, and any officers, directors, Partners, managers,
employees, stockholders, assigns, representatives and agents (including the
Placement Agents) of any such Person (each an "Indemnified Person", and
collectively, the "Indemnified Persons") shall not be liable, responsible or
accountable in damages or otherwise to the Company, any Partner or any other
Person for any loss, liability, damage, settlement cost, or other expense
(including reasonable attorneys' fees) incurred by reason of any act or
omission or any alleged act or omission performed or omitted by such
Indemnified Person (other than solely in such Indemnified Person's capacity as
a Partner, if applicable) in connection with the establishment, management or
operations of the Company or the management of the Assets (including in
connection with serving on any creditors' committee or board of directors for
any Portfolio Company ), except that an Indemnified Person shall be liable to
the Company or any Partner, as the case may be, if such act or failure to act
arises out of the bad faith, willful misfeasance, gross negligence or reckless
disregard of such Person's duty to the Company or such Partner, as the case
may be (such conduct, "Disabling Conduct"). Subject to the foregoing and to
the general liability of the General Partner for the liabilities of the
Company, all such Persons shall look solely to the Assets for satisfaction of
claims of any nature arising in connection with the affairs of the Company. If
any Indemnified Person is made a party to any suit or proceeding to enforce
any such liability, subject to the foregoing exception, such Indemnified
Person shall not, on account thereof, be held to any personal liability.
9.6 Indemnification; No Duty of Investigation; Reliance
on Experts
(a) To the fullest extent permitted by applicable law,
each of the Indemnified Persons shall be held harmless and indemnified by the
Company (out of the Assets and not out of the separate assets of any Partner)
against any liabilities and expenses, including amounts paid in satisfaction
of judgments, in compromise or as fines and penalties, and reasonable counsel
fees reasonably incurred by such Indemnified Person in connection with the
defense or disposition of any action, suit or other proceeding, whether civil
or criminal, before any court or administrative or investigative body in which
such Indemnified Person may be or may have been involved as a party or
otherwise (other than as authorized by the Directors, as the plaintiff or
complainant) or with which such Indemnified Person may be or may have been
threatened, while acting in such
27
Person's capacity as an Indemnified Person, except with respect to any matter
as to which such Indemnified Person shall not have acted in good faith in the
reasonable belief that such Person's action was in the best interest of the
Company or, in the case of any criminal proceeding, as to which such
Indemnified Person shall have had reasonable cause to believe that the conduct
was unlawful, provided, however, that an Indemnified Person shall only be
indemnified hereunder if (i) such Indemnified Person's activities do not
constitute Disabling Conduct and (ii) there has been a determination (a) by a
final decision on the merits by a court or other body of competent
jurisdiction before whom the issue of entitlement to indemnification was
brought that such Indemnified Person is entitled to indemnification or, (b) in
the absence of such a decision, by (1) a majority vote of a quorum of those
Directors who are neither "interested persons" of the Company (as defined in
Section 2(a)(19) of the Investment Company Act) nor parties to the proceeding,
that the Indemnified Person is entitled to indemnification (the "Disinterested
Non-Party Directors"), or (2) if such quorum is not obtainable or even if
obtainable, if such majority so directs, independent legal counsel in a
written opinion that concludes that the Indemnified Person should be entitled
to indemnification. Notwithstanding the foregoing, with respect to any action,
suit or other proceeding voluntarily prosecuted by any Indemnified Person as
plaintiff, indemnification shall be mandatory only if the prosecution of such
action, suit or other proceeding by such Indemnified Person was authorized by
a majority of the Directors. All determinations to make advance payments in
connection with the expense of defending any proceeding shall be authorized
and made in accordance with the immediately succeeding paragraph (b) below.
(b) The Company shall make advance payments in
connection with the expenses of defending any action with respect to which
indemnification might be sought hereunder if the Company receives a written
affirmation by the Indemnified Person of the Indemnified Person's good faith
belief that the standards of conduct necessary for indemnification have been
met and a written undertaking to reimburse the Company unless it is
subsequently determined that he is entitled to such indemnification and if a
majority of the Directors determine that the applicable standards of conduct
necessary for indemnification appear to have been met. In addition, at least
one of the following conditions must be met: (1) the Indemnified Person shall
provide adequate security for his undertaking, (2) the Company shall be
insured against losses arising by reason of any lawful advances, or (3) a
majority of a quorum of the Disinterested Non-Party Directors, or if a
majority vote of such quorum so direct, independent legal counsel in a written
opinion, shall conclude, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that there is substantial reason to
believe that the Indemnified Person ultimately will be found entitled to
indemnification.
(c) The rights accruing to any Indemnified Person
under these provisions shall not exclude any other right to which such
Indemnified Person may be lawfully entitled.
(d) Notwithstanding the foregoing, subject to any
limitations provided by the Investment Company Act and this Agreement, the
Company shall have the power and authority to indemnify Persons providing
services to the Company to the full extent provided by law as if the Company
were a corporation organized under the Delaware General Corporation Law
provided that such indemnification has been approved by a majority of the
Directors or, with respect to agreements to which the General Partner and
Investment Manager are not party, by the General Partner.
28
(e) No purchaser, lender, transfer agent or other
person dealing with the Directors or with the General Partner or any officer,
employee or agent of the Company shall be bound to make any inquiry concerning
the validity of any transaction purporting to be made by the Directors or by
said officer, employee or agent or be liable for the application of money or
property paid, loaned, or delivered to or on the order of the Directors or of
said officer, employee or agent. Every obligation, contract, undertaking,
instrument, certificate, Interest and security of the Company, and every other
act or thing whatsoever executed in connection with the Company shall be
conclusively taken to have been executed or done by the executors thereof only
in their capacity as Directors under this Agreement or in their capacity as
the General Partner or officers, employees or agents of the Company. The
Company may maintain insurance for the protection of the Assets, its Partners,
Directors, officers, employees or agents in such amounts as the Directors
shall deem adequate to cover possible liability, and such other insurance as
the Directors in their sole judgment shall deem advisable or is required by
the Investment Company Act.
(f) Each Indemnified Person shall, in the performance
of its duties, be fully and completely justified and protected with regard to
any act or any failure to act resulting from reliance in good faith upon the
books of account or other records of the Company, upon an opinion of counsel,
or upon reports made to the Company by any of the Company's officers or
employees or by any advisor, administrator, manager, distributor, selected
dealer, accountant, appraiser or other expert or consultant selected with
reasonable care by the Directors, General Partner officers or employees of the
Company, regardless of whether such counsel or other person may also be a
Director.
9.7 Director Limited Liability
Except as otherwise provided by law, the Directors shall
not be obligated personally for any debt, obligation or liability of the
Company solely by reason of being a director of the Company, and the debt,
obligations and liabilities of the Company, whether arising in contract, tort
or otherwise, shall be solely the debts, obligations and liabilities of the
Company.
9.8 Certain Other Activities
The General Partner, the Investment Manager, the
Co-Manager and their respective Affiliated Persons, employees and associates
(collectively, the "Manager Affiliates") may manage funds and accounts other
than the Assets ("Other Accounts") that invest in assets eligible for purchase
by the Company. Subject to the requirements of the Investment Company Act and
the Advisers Act, the Manager Affiliates are in no way prohibited from
spending, and may spend, substantial business time in connection with other
businesses or activities, including, but not limited to, managing Other
Accounts, managing investments, advising or managing entities whose investment
objectives are the same as or overlap with those of the Company, participating
in actual or potential investments of the Company or any Partner, providing
consulting, merger and acquisition, structuring or financial advisory
services, including with respect to actual, contemplated or potential
investments of the Company, or acting as a director,
29
officer, manager, Partner or creditors' committee Partner of, or adviser to,
or participant in, any corporation, company, limited liability company, trust
or other Person. Subject to the requirements of the Investment Company Act and
the Advisers Act, the Manager Affiliates are in no way prohibited from
receiving, and may receive, fees or other compensation from third parties for
any of these activities, which fees will be for their own account and not for
the account of the Company. Such fees may relate to actual, contemplated or
potential investments of the Company and may be payable by entities in which
the Company directly or indirectly has invested or contemplates investing.
Neither the Company nor any Partner shall, by virtue of this Agreement, have
any right, title or interest in or to the businesses or activities permitted
by this Section 9.8 or in or to any fees or consideration derived therefrom.
Allocation of investments or opportunities among the Company and Other
Accounts will be made as described in the Offering Memorandum or as otherwise
approved by the Board of Directors in accordance with the Investment Company
Act, the Advisers Act and any exemptive order obtained from the U.S.
Securities and Exchange Commission.
9.9 Tax Matters
(a) The General Partner is hereby designated the "tax
matters partner" for purposes of Section 6231(a) of the Code and Treasury
Regulations.
(b) The Tax Matters Partner shall have the right to
file all necessary reports relating to any withholding or payment in
connection with Section 8.2, as may be required by law or as the Tax Matters
Partner deems appropriate. Each Partner shall indemnify the Company and the
Tax Matters Partner and hold each of them harmless from any liability with
respect to any taxes, penalties or interest required to be withheld or paid to
any taxing authority by the Company or the Tax Matters Partner for or on
behalf of such Partner or with respect to such Partner's Interests.
(c) Any Partner that is a partnership (or that is
treated as a partnership for federal income tax purposes) will promptly notify
the Company in writing upon any of the following occurrences:
(i) any event, such as a sale or exchange of an
interest in such Partner, that will result in an
adjustment to the basis of the assets of such Partner
under Section 743(b) of the Code pursuant to an election
under Section 754 of the Code;
(ii) any event, such as a distribution of cash
or other property by such Partner, that will result in
an adjustment to the basis of such Partner's assets
under Section 734(b) of the Code pursuant to an election
under Section 754 of the Code; or
(iii) any event that will result in the
termination of such Partner as a partnership pursuant to
Section 708(b)(1)(B) of the Code.
(d) In the event that any interest in a Partner that
is a partnership (or that is treated as a partnership for federal income tax
purposes) is owned directly or indirectly by a tax exempt or foreign Person or
entity, such Partner will promptly notify the Company in writing of such tax
exempt or foreign Person or entity's proportionate share of such Partner's
items of income and
30
gain (determined as a percentage pursuant to Section 168(h)(6)(C) of the Code)
and of any change in such proportionate share.
(e) The Tax Matters Partner shall have the right to
make such elections under the tax laws of the United States, the several
states and other relevant jurisdictions as to the treatment of items of
Company income, gain, loss, deduction and credit and as to all other relevant
matters as it believes necessary, appropriate and desirable.
(f) The Tax Matters Partner shall have the right to
make or petition to revoke (as the case may be) the election referred to in
Section 754 of the Code; it being understood that the Tax Matters Partner, as
of the date hereof, does not intend to make such election but may in the
future choose to do so in its sole discretion. Each Partner agrees in the
event of such an election to supply promptly to the Company the information
necessary to give effect thereto.
(g) No Partner (other than the Tax Matters Partner)
shall have the right to participate in the audit of any Company tax return,
file any tax return, amended tax return or claim for refund inconsistent with
any item of income, gain, loss or expense reflected on any Company tax return,
participate in any administrative or judicial proceeding arising out of or in
connection with any Company tax return, audit relating to a Company tax
return, claim for refund by the Company or denial of such a claim, or appeal,
challenge or otherwise protest any adverse findings in any such audit or with
respect to any such tax return or in any such administrative or judicial
proceedings.
SECTION 10.
PARTNERS
10.1 Identity and Contributions
The names and addresses of the Partners, the Interests
owned by each Partner and the Capital Contributions of each will be set forth
in the Company's records.
10.2 No Management Power or Liability
Subject to the requirements of the Investment Company Act,
except as otherwise provided herein, the Partners (other than the General
Partner) in their capacity as such shall have no right or power to, and shall
not, take part in the management of or transact any business for the Company,
including but not limited to, any acts or decisions relating to investment
activities of the Company, and shall have no power to sign for or bind the
Company. Except as otherwise required by law, no Partner (other than the
General Partner), in its capacity as such, shall be personally liable for any
debt, loss, obligation or liability of the Company. Employees, officers,
authorized Persons and agents of the Company shall have authority to act on
behalf and in the name of the Company to the extent authorized by the General
Partner.
31
10.3 Amendments
(a) If a vote of the holders of Interests is required
by applicable law or this Agreement to amend this Agreement, or if the General
Partner or the Directors determine to submit an amendment to a vote of the
holders of Interests, then, other than with respect to Sections of this
Agreement where a different affirmative vote is specifically required, this
Agreement may be amended, after a majority of the Directors then in office
have approved a resolution therefor, by the affirmative vote set forth in
Section 10.10. Section 10.10 may only be amended, after a majority of
Directors then in office have approved a resolution therefor, by the
affirmative vote of the holders of not less than 75% of the affected Interests
then outstanding. Section 16.7 may only be amended, after a majority of
Directors then in office have approved a resolution therefor, by the
affirmative vote of the holders of not less than 100% of the Series A
Preferred Interests then outstanding. Notwithstanding the foregoing, without
the unanimous approval of all of the Partners affected thereby, no such
amendment may:
(i) require any Common Partner to make Capital
Contributions in excess of its initial Capital
Contribution, require any Partner that is not a Common
Partner to make additional Capital Contributions in
excess of its contractual commitment or otherwise
increase the liability of any Partner hereunder; or
(ii) adversely affect such Partners' rights to
distributions; or
(iii) modify this Section 10.3(a).
(b) Subject to the requirements of the Investment
Company Act and other applicable law, notwithstanding the foregoing provisions
of this Section 10.3, the Board of Directors, or the General Partner with the
approval of the Board of Directors, may amend this Agreement, without the
consent of any Partner, (i) to change the name of the Company or any class or
series of Interests; (ii) to make any change that does not adversely affect
the rights or preferences of any class or series of Interests, (iii) to
conform this Agreement to the requirements of the Investment Company Act or
any other applicable law; (iv) in connection with qualifying the Company to
permit limited liability under the laws of any state; (v) to prevent any
material and adverse effect to any Partner or the Company arising from the
application of legal restrictions to any Partner, the Investment Manager, the
Co-Manager or the Company, subject to the requirement that no Partner be
materially and adversely affected; (vi) to make any change that is necessary
or desirable to cure any ambiguity or inconsistency, subject to the
requirement that no Partner be materially and adversely affected; (vii) to
make any other changes similar to the foregoing, including in connection with
the Credit Agreement, subject to the requirement that no Partner be materially
and adversely affected; or (viii) to make such conforming changes as may be
necessary to reflect the termination of the Company and the assumption by the
Parent of all of the assets and obligations of the Company to the extent not
prohibited by applicable law, subject to the requirement that no Partner be
materially and adversely affected thereby; provided that the General Partner
and the Board of Directors shall not be liable for failing to do so. Prior to
entering into any amendment pursuant to this Section 10.3(b), the General
Partner or the Board of Directors shall notify the Partners in writing of the
material terms of such amendment. The Company may reflect in its records
changes made in the composition of the Partners
32
and their respective Capital Contributions and Interests in accordance with
the provisions of this Agreement without the consent of the Partners.
(c) After any amendment to this Agreement becomes
effective, the Company shall send to the Partners a copy of such amendment.
(d) Nothing contained in this Agreement shall permit
the amendment of this Agreement to impair the exemption from personal
liability of the Partners (other than the General Partner), Directors,
officers, employees and agents of the Company and their respective Affiliates,
to permit assessments upon such Partners or to permit the Company to be
converted at any time from a "closed-end investment company" to an "open-end
investment company" as those terms are defined by the Investment Company Act
or a company obligated to repurchase shares under Rule 23c-3 of the Investment
Company Act.
(e) An amendment duly adopted by the requisite vote of
the Board of Directors and, if required, Partners as aforesaid, shall become
effective at the time of such adoption or at such other time as may be
designated by the Board of Directors or Partners, as the case may be. A
certification signed by the General Partner or the Secretary setting forth an
amendment and reciting that it was duly adopted by the Directors and, if
required, Partners as aforesaid, or a copy of the Agreement, as amended, and
executed by the General Partner or the Secretary, shall be conclusive evidence
of such amendment when lodged among the records of the Company or at such
other time designated by the Directors.
(f) Notwithstanding any other provision hereof, until
such time as Interests are issued and outstanding, this Agreement may be
terminated or amended in any respect by the affirmative vote of a majority of
the Directors or by an instrument signed by a majority of the Directors then
in office.
(g) Notwithstanding anything to the contrary contained
herein, no holder of Interests of any class or series, other than to the
extent expressly determined by the Directors with respect to Interests
qualifying as preferred stock pursuant to Section 18(a) of the Investment
Company Act, shall have any right to require the Company or any person
controlled by the Company to purchase any of such holder's Interests.
10.4 Merger, Consolidation, Liquidation
Subject to the provisions of the Investment Company Act
and other applicable law, the Company may merge or consolidate with any other
entity, or sell, lease or exchange all or substantially all of the Assets upon
approval by two-thirds of the Directors then in office and the affirmative
vote of not less than two-thirds of the outstanding Interests. Notwithstanding
the foregoing, the Company shall automatically be merged into the Parent and
terminate its existence at such time as, pursuant to receipt of no-action or
other appropriate relief from the Securities and Exchange Commission or its
staff, the board of directors of the Parent is able to authorize the issuance
of Series S Preferred Stock of the Parent to the General Partner. Each
Partner, upon becoming a Partner, consents to such termination and merger,
including the exchange by each Preferred Partner of its Preferred Interests
for an equivalent amount of preferred shares of the Parent having
substantially similar terms and the exchange of the General
33
Partner's Interest for the share or shares of Series S Preferred Stock of the
Parent, to the extent any consent of Partners would be required therefor. Such
merger shall occur on the basis of the Net Asset Value of the Common
Interests, the liquidation preference of the Preferred Interests and the
amount of indebtedness outstanding under the Credit Agreement and in
accordance with the requirements of Rule 17a-8 under the Investment Company
Act. No Partner shall have any rights of redemption or appraisal in connection
with any such merger.
10.5 List of Partners
A list of the names and addresses of all Partners (to the
extent known to the Company) shall be made available to any Partner or its
representative for inspection and, at the Partner's cost, copying upon written
request and at reasonable times to the extent required by the Investment
Company Act with respect to trusts for any purpose.
10.6 Limitations
No Partner shall have the right or power to (i) bring an
action for partition against the Company; (ii) cause the termination or
dissolution of the Company, except as set forth in this Agreement; or (iii)
demand property other than cash with respect to any distribution and then only
in accordance with the terms of this Agreement. For the avoidance of doubt,
Partners shall not have the power provided for in Section 17-801 of the
Delaware Act, and the Company may only be dissolved pursuant to the terms of
this Agreement. Except to the extent required for a Delaware business
corporation, the Partners shall have no power to vote as to whether or not a
court action, legal proceeding or claim should or should not be brought or
maintained derivatively or as a class action on behalf of the Company or the
Partners.
10.7 Meetings
(a) The Company may, but shall not be required to,
hold annual meetings of the holders of any class or series of Interests. An
annual or special meeting of Partners may be called at any time only by the
Directors or by Partners in accordance with the requirements of the Investment
Company Act applicable to trusts. Any meeting of Partners shall be held within
or without the State of Delaware on such day and at such time as the Directors
shall designate.
(b) Notice of all meetings of Partners, stating the
time, place and purposes of the meeting, shall be given by the Directors by
mail to each Partner of record entitled to vote thereat at its registered
address, mailed at least 10 days before the meeting or otherwise in compliance
with applicable law. Except with respect to an annual meeting, at which any
business required by the Investment Company Act may be conducted, only the
business stated in the notice of the meeting shall be considered at such
meeting. Any adjourned meeting may be held as adjourned one or more times
without further notice not later than 130 days after the record date. For the
purposes of determining the Partners who are entitled to notice of and to vote
at any meeting the Directors may, without closing the transfer books, fix a
date not more than 100 days prior to the date of such meeting of Partners as a
record date for the determination of the Persons to be treated as Partners of
record for such purposes.
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10.8 Action Without a Meeting
Any action that may be taken at a meeting of the Partners
may be taken without a meeting if a consent in writing setting forth the
action to be taken is signed by Partners owning not less than the minimum
percentage of the Interests of the Partners that would be necessary to
authorize or take such action at a meeting at which all the Partners were
present and voted, and notice of the action taken is provided to each Partner.
Any such written consent must be filed with the records of the meetings of the
Partners.
10.9 Procedures
A Partner shall be entitled to cast votes: (a) at a
meeting, in person, by written proxy or by a signed writing directing the
manner in which its vote is to be cast, which writing must be received by the
Company at or prior to the commencement of the meeting; or (b) without a
meeting, by a signed writing directing the manner in which its vote is to be
cast, which writing must be received by the Company at or prior to the time
and date on which the votes are to be counted. Except as otherwise herein
specifically provided, all procedural matters relating to the holding of
meetings of Partners or taking action by written consent, whether noticed or
solicited by the Company or others, including, without limitation, matters
relating to the date for the meeting or the counting of votes by written
consent, the time period during which written consents may be solicited,
minimum or maximum notice periods, record dates, proxy requirements and rules
relating to the conduct of meetings or the tabulation of votes, shall be as
reasonably established by the Directors. To the extent not otherwise provided
by the Board of Directors pursuant to Section 10.10 or otherwise, the laws of
the State of Delaware pertaining to the validity and use of proxies regarding
the shares of business corporations shall govern the validity and use of
proxies given by Partners.
10.10 Voting
(a) Partners shall have no power to vote on any matter
except matters on which a vote of Interests is required by or pursuant to the
Investment Company Act, a Statement of Preferences, this Agreement, the
By-Laws or any resolution of the Directors. Any matter required to be
submitted for approval of any of the Interests and affecting one or more
classes or series shall require approval by the required vote of Interests of
the affected class or classes and series voting together as a single class
and, if such matter affects one or more classes or series thereof differently
from one or more other classes or series thereof or from one or more series of
the same class, approval by the required vote of Interests of such other class
or classes or series or series voting as a separate class shall be required in
order to be approved with respect to such other class or classes or series or
series; provided, however, that except to the extent required by the
Investment Company Act and any Statement of Preferences, there shall be no
separate class votes on the election or removal of Directors or the selection
of auditors for the Company. Partners of a particular class or series thereof
shall not be entitled to vote on any matter that affects the rights or
interests of only one or more other classes or series of such other class or
classes or only one or more other series of the same class. There shall be no
cumulative voting in the election or removal of Directors.
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(b) The holders of one-third of the outstanding
Interests of the Company on the record date present in person or by proxy
shall constitute a quorum at any meeting of the holders for purposes of
conducting business on which a vote of all Partners of the Company is being
taken. The holders of one-third of the outstanding Interests of a class or
classes on the record date present in person or by proxy shall constitute a
quorum at any meeting of the holders of such class or classes for purposes of
conducting business on which a vote of holders of such class or classes is
being taken. The holders of one-third of the outstanding Interests of a series
or series on the record date present in person or by proxy shall constitute a
quorum at any meeting of the holders of such series or series for purposes of
conducting business on which a vote of holders of such series or series is
being taken. Interests underlying a proxy as to which a broker or other
intermediary states its absence of authority to vote with respect to one or
more matters shall be treated as present for purposes of establishing a quorum
for taking action on any such matter only to the extent so determined by the
Directors at or prior to the meeting of holders of Interests at which such
matter is to be considered and shall not be treated as present for purposes of
voting or any other purpose except as determined by the Directors.
(c) Subject to any provision of the Investment Company
Act, any Statement of Preferences or this Agreement specifying or requiring a
greater or lesser vote requirement for the transaction of any matter of
business at any meeting of Partners or, in the absence of any such provision
of the Investment Company Act, any Statement of Preferences or this Agreement,
subject to any provision of the By-Laws or resolution of the Directors
specifying or requiring a greater or lesser vote requirement, (i) the
affirmative vote of a plurality (or, if provided by the By-Laws, a majority)
of the Interests present in person or represented by proxy and entitled to
vote for the election of any Director or Directors shall be the act of such
Partners with respect to the election of such Director or Directors; (ii) the
affirmative vote of a majority of the Interests present in person or
represented by proxy and entitled to vote on any other matter who vote on such
matter shall be the act of the Partners with respect to such matter; and (iii)
where a separate vote of one or more classes or series is required on any
matter, the affirmative vote of a majority of the Interests of such class or
classes or series or series present in person or represented by proxy and
entitled to vote on such matter who vote on such matter shall be the act of
the Partners of such class or classes or series or series with respect to such
matter.
(d) At any meeting of Partners, any holder of
Interests entitled to vote thereat may vote by proxy, provided that no proxy
shall be voted at any meeting unless it shall have been placed on file with
the Secretary, or with such other officer or agent of the Company as the
Secretary may direct, for verification prior to the time at which such vote
shall be taken. Pursuant to a resolution of a majority of the Directors,
proxies may be solicited in the name of one or more Directors or one or more
of the officers or employees of the Company. Only Partners of record shall be
entitled to vote. Each .01% of the Net Asset Value of the Company shall
entitle the Common Partner of record thereof to one vote and each fraction
thereof shall entitle the Common Partner of record thereof to a vote equal to
such fraction. Each $20,000 of the liquidation preference of a Preferred
Interest shall entitle the Preferred Partner of record thereof to one vote and
each fraction thereof shall entitle the Preferred Partner of record thereof to
a vote equal to such fraction. When any Interest is held jointly by several
persons, any one of them may vote at any meeting in person or by proxy in
respect of such Interest, but if more than one of them shall be present at
such meeting in person or by proxy, and such joint owners or their proxies so
present disagree as to any vote to be cast, such vote shall not be received in
36
respect of such Interest. A proxy purporting to be given by or on behalf of a
Partner of record on the record date for a meeting shall be deemed valid
unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger. If the holder of any such Interest is
a minor or a person of unsound mind, and subject to guardianship or to the
legal control of any other person as regards the charge or management of such
Interest, he may vote by his guardian or such other person appointed or having
such control, and such vote may be given in person or by proxy. The Directors
shall have the authority to make and modify from time to time regulations
regarding the validity of proxies. In addition to signed proxies, such
regulations may authorize facsimile, telephonic, Internet and other methods of
appointing a proxy that are subject to such supervision by or under the
direction of the Directors as the Directors shall determine.
10.11 Removal of the General Partner
The General Partner may be removed with or without cause
at any time on not less than 60 days notice by vote of either (a) the Board of
Directors at a meeting called for such purpose or (b) by a majority of the
Interests at a meeting called for such purpose. Upon any such removal, for
purposes of determining any allocations and distributions due to the General
Partner pursuant to Section 7 or 8 hereof, the Company shall be deemed to have
liquidated all of its Assets at fair value as determined pursuant to the
Investment Management Agreement (including any discount provided in Section
6(d) thereof).
10.12 Key Man Approvals
If any two of Xxxxxxx X. Xxxxxxxxxx, Xxxx Xxxxxxxxxx and
Xxxxxx Xxxxxxxxx die, become incapacitated or depart from the Investment
Manager or cease to be actively involved in the management or operations of
the Investment Manager or the Company, (i) if such event occurs during the
Subscription Period, the Investment Manager will promptly notify the
Co-Manager, the credit agent for the Company's senior credit facility, the
credit enhancer, if any, and the Partners of such event and the Partners may
determine at any time during the six months following such notice, by vote of
75% or more of the Common Interests, to terminate the Subscription Period or,
voting together with the Preferred Interests as a single class, to liquidate
the Company, and (ii) if such event occurs after the Subscription Period, the
Investment Manager will promptly notify the Co-Manager, the credit agent for
the Company's senior credit facility, the credit enhancer, if any, and the
Partners of such event, will increase the number of voting Co-Manager
representatives on the investment committee established by the Investment
Manager (the "Investment Committee") to a number that is equivalent at all
times to the number of voting Investment Manager representatives on such
committee and will promptly replace one or both of such individuals with
another individual with skills reasonably comparable to those which such
individual or individuals employed on behalf of the Investment Manager for the
benefit of the Company (a person having such skills being a "Replacement
Principal"), as determined by the approval of a majority of the Common
Interests and Preferred Interests voting as a single class within sixty days
after the date notice of such replacement is given. Upon the approval of a
Replacement Principal, the number of Co-Manager representatives on the
Investment Committee shall be reduced to one and such Replacement Principal's
37
name shall be substituted for purposes of the first sentence of this Section
10.12 for the name of the individual for whom he or she is a Replacement
Principal.
10.13 Pass Through Voting
Notwithstanding anything to the contrary herein, all
voting rights of the Parent as the holder of Common Interests shall be passed
through to and exercised by the holders of the outstanding shares of the
Parent, and the Parent shall vote its Common Interests in the same proportion
as its holders vote their outstanding shares.
SECTION 11.
ADMISSION OF ADDITIONAL PARTNERS;
ASSIGNMENTS OR TRANSFERS OF INTERESTS
11.1 Admission of Additional Partners
No additional Partners will be admitted after the date
hereof, except as provided in Sections 5.2, 7.1 and 11.2.
11.2 Assignments or Transfers of Interests
(a) In no event shall all or any part of a Partner's
Interests be Transferred if such Transfer would result in there being more
than 95 Partners for purposes of Treasury Regulation ss.1.7704-1(h), and any
such purported Transfer shall be void and shall not be recognized by the
Company. In no event shall all or any part of a Partner's Preferred Interests
be Transferred, and any such purported Transfer shall be void and shall not be
recognized by the Company, unless all of the conditions set forth in the
applicable Statement of Preferences with respect thereto have been satisfied.
In no event shall all or any part of a Partner's Common Interests be
Transferred, and any such purported Transfer shall be void and shall not be
recognized by the Company or the Partners, unless all of the following
conditions are satisfied:
(i) The Transferor, if requested by the Company
in its sole discretion, has delivered to the Company an
opinion of counsel reasonably acceptable to the Company
that such Transfer (A) would not violate the Securities
Act or any state blue sky laws (including any investor
suitability standards) and, (B) would not result in the
breach of any agreement to which the Company is a party
or by which it or any of the Assets is bound;
(ii) The Transferor has demonstrated to the
reasonable satisfaction of the Company that the
Transferee is both an "accredited investor" as defined
in Rule 501(a) under the Securities Act and a "qualified
client" within the meaning of Rule 205-3 of the Advisers
Act;
38
(iii) The Transferor has demonstrated to the
reasonable satisfaction of the Company that (1) either
(a) the Transferee is not (and, if it is disregarded as
an entity separate from its owner within the meaning of
Treasury Regulations Section 301.7701-3(a) (a "DRE"),
its owner is not), for federal income tax purposes, a
partnership, trust, estate or "S Corporation" (as such
terms are defined in the Code) (in each case, a
"Pass-through Entity") or (b) the Transferee (or, if the
Transferee is a DRE, its owner) is, for federal income
tax purposes, a Pass-through Entity but, after giving
effect to such purchase of such Interest by such
Transferee (or, if the Transferee is a DRE, its owner),
less than 50 percent of the aggregate value of the
beneficial ownership interests in the Pass-through
Entity (or, if the Transferee is a DRE, its owner) is
attributable to the Pass-through Entity's ownership of
Interests, and (2) such Interests have not been, and
will not be, marketed on or transferred through an
"established securities market" within the meaning of
Section 7704(b) of the Code and any Treasury Regulations
thereunder, including, without limitation, an over the
counter market or an interdealer quotation system that
regularly disseminates firm buy or sell quotations;
(iv) The Company has received a notice of
Transfer signed by both the Transferor and Transferee,
such notice to be substantially in the form of Appendix
B attached hereto (or such other document specified in
the applicable Statement of Preferences); and
(v) the Company consents in writing to such
Transfer (which consent may be withheld in the Company's
reasonable discretion).
(b) Provided the foregoing conditions are met, the
Transferee may become a Substituted Partner if and only if, with respect to
Preferred Interests, any requirements set forth in the relevant Statement of
Preferences are satisfied and, with respect to Common Interests, each of the
following conditions is satisfied:
(i) The Company has consented in writing to the
substitution (which consent may be withheld in the
Company's reasonable discretion with respect to
Transfers of Common Interests only if the transfer
conditions described above have not been met or have not
been waived);
(ii) The Transferor and Transferee execute,
acknowledge and deliver such instruments as the Company
deems necessary, appropriate or desirable to effect such
substitution, including the written acceptance and
adoption by the Transferee of this Agreement; and
(iii) The Transferee agrees to bear all of the
Company's expenses and costs incurred in connection with
the Transfer and substitution, including legal fees and
filing fees.
Upon the satisfaction of the conditions set forth in this
Section 11.2(b), the Company shall record on the books and records of the
Company the Substituted Partner as a Partner of the Company.
39
(c) A Transferee, legal representative or successor in
interest of a Partner shall be subject to all of the restrictions upon a
Partner provided in this Agreement.
(d) A Transferee of Interests who desires to make a
further Transfer shall be subject to all of the provisions of this Section 11
to the same extent and in the same manner as a Partner making the initial
Transfer.
(e) Notwithstanding anything to the contrary in this
Agreement, the Company may elect (in the Company's sole discretion) to treat a
Transferee who has not become a Substituted Partner as a Partner in the place
of the Transferor should it determine such treatment to be in the best
interests of the Company.
(f) Upon the Incapacity of an individual Partner, such
Partner's personal representative or other successor in interest shall have
such rights as the Incapacitated Partner possessed to constitute a successor
as a Transferee of its Interests and to join with such Transferee in making
application to substitute such Transferee as a Partner, all as provided in
Sections 11.2(a) and (b).
(g) Upon the Incapacity of a Partner other than an
individual, the authorized representative of such entity shall have such
rights as such entity possessed to constitute a successor as a Transferee of
its Interests and to join with such Transferee in making application to
substitute such Transferee as a Partner, all as provided in Sections 11.2(a)
and (b).
(h) A Person who acquires Interests or an interest
therein but is not admitted to the Company as a Substituted Partner pursuant
to Section 11.2(b) shall (i) in the case of a Person acquiring Common
Interests or an interest therein who does not satisfy Section 11.2(a)(ii),
obtain no rights whatsoever in the Company, such Transfer shall be void as
between such Person and the Company and the Company shall have the absolute
right in its sole discretion to Transfer such Common Interests to any Person
who does satisfy Section 11.2(a)(ii) for such consideration as the Company
deems sufficient in the circumstances and to remit to such Person who acquired
such Common Interests in violation of this Agreement such portion of such
consideration not in excess of 75% thereof as the Company receives in complete
satisfaction of such Person's interest in the Company and (ii) in the case of
a Person acquiring Preferred Interests or an interest therein, be entitled
only to the allocations and distributions with respect to such Interests in
accordance with this Agreement or relevant Statement of Preferences but shall
have no right to any information or accounting of the affairs of the Company
and shall not have any voting or other rights of a Partner under this
Agreement or relevant Statement of Preferences; provided, however, that such
Person described in this clause (ii) shall be entitled to receive such
information and accountings as shall be consented to by the Company, which
consent shall not be unreasonably withheld. A Substituted Partner who
qualifies pursuant to the provisions hereof shall succeed to all the rights
and be subject to all the obligations of the Transferor Partner in respect of
the Interests or other interest as to which it was substituted.
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SECTION 12.
POWER OF ATTORNEY
12.1 Appointment of General Partner
Each Partner, by becoming a Partner, makes, constitutes
and appoints the General Partner as its true and lawful attorney-in-fact, in
its name, place and stead, with full power to do any of the following:
(a) Execute on its behalf, file and record this
Agreement and all amendments to this Agreement made and otherwise approved in
accordance with Section 10.3 or otherwise made in accordance with the terms of
this Agreement;
(b) Prepare, execute on its behalf, verify, file and
record amendments to this Agreement made in accordance with the terms of this
Agreement or to the books and records of the Company reflecting (i) a change
of the name or location of the principal place of business of the Company,
(ii) a change of the name or address of any Partner, (iii) the addition of
Partners, (iv) the disposal by a Partner of its Interests in any manner, (v) a
Person becoming or ceasing to be a Partner of the Company, (vi) the exercise
by any Person of any right or rights hereunder, (vii) the correction of
typographical or similar errors, (viii) any other amendments made in
accordance with Section 10.3, and (ix) any amendment and restatement of this
Agreement reflecting such amendments;
(c) Prepare, execute on its behalf and record any
amendments to the Certificate that the Investment Manager may deem advisable
or necessary;
(d) Prepare, execute on its behalf, file and record
any other agreements, certificates, instruments and other documents required
to continue the Company, to admit Substituted Partners, to liquidate and
dissolve the Company in accordance with Section 16, to comply with applicable
law, and to carry out the purposes of clauses (a) and (b) above, to the extent
consistent with this Agreement; and
(e) Take any further action that the General Partner
shall consider advisable in connection with the exercise of the authority
granted in this Section 12.1.
12.2 Nature of Special Power
The power of attorney granted under this Section 12 is a
special power of attorney coupled with an interest, is irrevocable and may be
exercised by the General Partner by listing all of the Partners executing any
agreement, certificate, instrument or document with a single signature of such
attorney-in-fact acting as attorney-in-fact for all of them. The power of
attorney shall survive and not be affected by the Incapacity of a Partner and
shall survive and not be affected by the Transfer by a Partner of the whole or
a portion of its Interests, except where the Transfer is of all of the
Interests and the Transferee thereof with the consent of the Company is
admitted as a Substituted Partner; provided, however, that this power of
attorney shall survive
41
such Transfer for the sole purpose of enabling any such attorney-in-fact to
effect such substitution. This power of attorney does not supersede any part
of this Agreement, nor is it to be used to deprive any Partner of its rights
hereunder. It is intended only to facilitate the execution of documents and
the carrying out of other procedural or ministerial functions.
SECTION 13.
BOOKS, RECORDS AND REPORTS
13.1 Books
(a) The Company shall maintain books and records
required by law for the Company at its principal office, which shall be in the
United States, and each Partner shall have the right to inspect, examine and
copy such books and records at reasonable times and upon reasonable notice for
the purposes required by the Investment Company Act relating to trusts or as
authorized by the Directors or their delegate. All such books and records may
be in electronic format, including the register of Partners and all capital
account and accounting records. Upon the request of a Partner, the Company
shall promptly deliver to the requesting Partner, at the expense of the
Company, a copy of any information which the Company is required by law to so
provide in paper or electronic format. Notwithstanding the foregoing
inspection rights or any other provision of this Section 13, the Company shall
be entitled, as and to the extent permitted by Section 17-305 of the Delaware
Act, to keep confidential from the Partners all information such Partners do
not have a right to obtain pursuant to the Investment Company Act.
(b) A register shall be kept at the Company or any
transfer agent duly appointed by or under the direction of the Directors which
shall contain the names and addresses of the Partners and the Interests held
by them respectively and a record of all authorized transfers thereof.
Separate registers shall be established and maintained for each class and each
series of each class. Each such register shall be conclusive as to who are the
holders of the Interests of the applicable class and series and who shall be
entitled to receive dividends or distributions or otherwise to exercise or
enjoy the rights of Partners. No Partner shall be entitled to receive payment
of any dividend or distribution, nor to have notice given to him as herein
provided, until he has given his address to a transfer agent or such other
officer or agent of the Directors as shall keep the register for entry
thereon. Except as otherwise provided in any Statement of Preferences, it is
not contemplated that certificates will be issued for the Interests; however,
the Company may authorize the issuance of certificates and promulgate
appropriate fees therefor and rules and regulations as to their use.
(c) The Company shall have power to employ a transfer
agent or transfer agents, and a registrar or registrars, with respect to the
Interests. The transfer agent or transfer agents may keep the applicable
register and record therein, the original issues and transfers, if any, of the
said Interests.
(d) Interests shall be transferable on the records of
the Company only by the record holder thereof or by its agent thereto duly
authorized in writing, upon delivery to the Company or a transfer agent of the
Company of a duly executed instrument of transfer, together
42
with such evidence of the genuineness of each such execution and authorization
and of other matters as may reasonably be required, including satisfaction of
any or all of the requirements of Section 11.2(a) or (b) for the addition or
substitution of the Transferee as a Partner. Upon such delivery and
satisfaction of such requirements the transfer shall be recorded on the
applicable register of the Company. Until such record is made, the Partner of
record shall be deemed to be the holder of such Interests for all purposes
hereof and none of the Company, the Directors, any transfer agent or registrar
or any officer, employee or agent of the Company shall be affected by any
notice of the proposed transfer.
Any person becoming entitled to any Interests in consequence
of the death, bankruptcy, or incompetence of any Partner, or otherwise by
operation of law, shall be recorded on the applicable register of Interests as
the holder of such Interests upon production of the proper evidence thereof to
the Directors or a transfer agent of the Company, but until such record is made,
the Partner of record shall be deemed to be the holder of such for all purposes
hereof, and neither the Directors nor any transfer agent or registrar nor any
officer or agent of the Company shall be affected by any notice of such death,
bankruptcy or incompetence, or other operation of law.
13.2 Reports
(a) The Company shall prepare and send to Partners to
the extent and in the form required by the Investment Company Act and other
applicable law or any exchange on which Interests are listed a report of
operations containing financial statements of the Company prepared in
conformity with generally accepted accounting principles and applicable law
and a schedule setting forth the investments of the Company. Common Partners
shall receive quarterly reports of operations.
(b) Within 60 days after the end of each Fiscal Year,
the Company shall communicate in writing to each Partner (i) such information
as is necessary to complete such Partner's United States federal and state
income tax or information returns and (ii) annual financial statements audited
by an accounting firm of national reputation.
(c) Further, the Directors may, in their sole and
absolute discretion, cause to be prepared (i) such reports or other
information as may be necessary with respect to any Partner's qualification
for the benefit of any income tax treaty or provision of law reducing or
eliminating any withholding or other tax or governmental charge with respect
to any Assets and (ii) such other reports and financial statements of the
Company as the Directors deem appropriate for informing the Partners about the
operations of the Company.
The Company shall promptly distribute to the Partners notice
of the occurrence of any Default or Event of Default (as defined in the Credit
Agreement) under the Credit Agreement.
(d) To the extent that the Company has access thereto
and in recognition of the various Partners' obligations to comply with certain
regulatory requirements, the Company will also provide to each Partner, with
reasonable promptness, such other data and information
43
concerning the Company or Company activities in response to a request by any
applicable governmental or regulatory agency as from time to time a Partner
may reasonably request. If the Company is bound by confidentiality obligations
with respect to any information so requested, then the Company shall not be
obligated to provide such information. A Partner shall, at the request of the
Company, enter into a confidentiality agreement relating to such information.
SECTION 14.
VALUATION OF ASSETS AND INTERESTS
The value of the Assets of the Company, the amount of
liabilities of the Company, the Net Asset Value, and the Net Asset Value of
each outstanding Common Interest of the Company shall be determined on each
Valuation Date in accordance with generally accepted accounting principles and
the Investment Company Act. The method of determination of Net Asset Value
shall be determined by or under the supervision of the Board of Directors. The
making of Net Asset Value determinations and calculations may be delegated by
the Board of Directors.
SECTION 15.
BANK ACCOUNTS; CUSTODIAN
15.1 Bank Accounts Generally
Subject to the requirements of the Investment Company Act,
all funds received by the Company may be deposited in one or more Custodial
Accounts in the name of the Company at the Custodian. Subject to Section 15.2,
disbursements therefrom may be made by the Company in conformity with the
purposes of this Agreement and the requirements of the Investment Company Act.
The Company may designate from time to time those Persons authorized to
execute checks and other items on the Company bank accounts. The funds of the
Company shall not be commingled with the funds of any other Person.
15.2 Custodian
(a) The Company shall appoint one or more Custodians
to hold the Assets of the Company in one or more separately identified
Custodial Accounts or multiparty arrangements in accordance with the Advisory
Agreement, the Co-Advisory Agreement, the Credit Agreement, any Statement of
Preferences, the Custodial Agreement and the Pledge and Intercreditor
Agreement (each as defined in the Credit Agreement to the extent not defined
herein) and in compliance with the requirements of the Investment Company Act
and other applicable law. The Custodian shall at all times be responsible for
the physical custody of the Assets of the Company and for the collection of
interest, dividends and other income attributable to the Assets of the
Company. The Company will direct the Custodian to accept settlement
instructions issued
44
by the General Partner, the Investment Manager and authorized Persons in
accordance with the requirements of the Investment Company Act.
(b) Nothing contained in this Agreement shall be
construed to authorize or require the Board of Directors, the General Partner
or the Investment Manager to take or receive physical possession of any Asset
of the Company or to take any action in violation of law, it being understood
that the Custodian shall solely be responsible for the safekeeping of the
Assets and the consummation of all such purchases, sales and deliveries of the
Assets in accordance with this Agreement and the Advisory Agreement, the
Co-Advisory Agreement, the Credit Agreement, any Statement of Preferences, the
Custodial Agreement and the Pledge and Intercreditor Agreement and in
compliance with the requirements of the Investment Company Act and other
applicable law.
SECTION 16.
DISSOLUTION AND TERMINATION OF THE COMPANY
16.1 Dissolution Generally
Except as provided in this Agreement, no Partner shall
have the right to cause any dissolution of the Company before expiration of
its term.
16.2 Continuation of Company
The Company shall not be dissolved or terminated by the
Incapacity of any Partner as such, the Transfer by any Partner of its
Interests or the admission of a new or substituted Partner, and the existence
and business of the Company shall be continued notwithstanding the occurrence
of any such event.
16.3 Events Causing Dissolution
Subject to the restriction on liquidation set forth in
Section 16.7, the Company may be dissolved prior to the time set forth in
Article 4 after two-thirds of the Directors then in office have approved a
resolution therefor, upon approval by Interests having at least 75% of the
votes of all of the Interests outstanding on the record date for such meeting,
voting as a single class except to the extent required by the Investment
Company Act. Notwithstanding the foregoing, the Company shall automatically be
merged into the Parent and terminate its existence at such time as, pursuant
to receipt of no-action or other appropriate relief from the Securities and
Exchange Commission or its staff, the board of directors of the Parent is able
to so authorize, the Parent issues Series S Preferred Stock of the Parent to
the General Partner or its designee. Each Partner, upon becoming a Partner,
consents to such termination and merger, including the exchange by each
Preferred Partner of its Preferred Interests for an equivalent amount of
preferred shares of the Parent having substantially similar terms and the
45
exchange of the General Partner's Interest for the share or shares of Series S
Preferred Stock of the Parent, to the extent any consent of Partners would be
required therefor.
16.4 Distribution of Assets on Liquidation
(a) In liquidating the Company, the Company will make
distributions in cash, in kind, or partly in cash and partly in kind as the
General Partner, under the supervision of the Board of Directors, may, in its
sole discretion, determine; provided, however, that any distribution made
partly in cash and partly in kind shall be pro rata among the Partners in
proportion to their interests to the extent reasonably practicable and if not
reasonably practicable, in such non-pro rata manner as is determined by the
Investment Manager, under the supervision of the Board of Directors, to be
fair and equitable; provided, further, that the General Partner will use
reasonable efforts to make all distributions in kind, if any, in the form of
freely tradable securities. The General Partner need not distribute all of the
Assets at once, but may make partial distributions and shall not be required
to redeem the Preferred Interests prior to making any liquidating distribution
in respect of the Common Interests so long as the Company has set aside liquid
assets in excess of liabilities sufficient to pay the liquidation preference
and all accumulated and unpaid distributions of the Preferred Interests.
(b) In connection with the liquidation of the Company,
the Assets (after paying or otherwise providing for the claims of creditors of
the Company, the Advisory Fees, claims by the Board of Directors, the General
Partner, the Investment Manager, the Co-Manager or their respective Affiliated
Persons for expenses of the Company paid by any of them, any other liabilities
of the Company and reasonable reserves for any anticipated or contingent
liabilities or obligations and all accumulated and unpaid distributions on
Preferred Interests) shall be distributed to the Partners in accordance with
Section 8.1.
16.5 Liquidation Statement
(a) Upon compliance by the Company with all applicable
requirements for dissolution, the Partners shall cease to be such and the
Company shall execute, acknowledge and cause to be filed a Certificate of
Cancellation of the Company or other appropriate documents evidencing its
dissolution and winding up.
(b) Notwithstanding anything to the contrary contained
herein, if the Board of Directors has been removed or resigned and the Company
has been dissolved, any Partner or other Person appointed by the Partners may
act as liquidating trustee for the Company during the winding up period, and
receive reasonable compensation for such activity, all as approved by the
Partners holding Interests that represent a majority of the outstanding
Interests.
16.6 Director's Liability Upon Dissolution or Removal
None of the Directors shall be personally liable for the
return of all or any part of the contributions of the Partners to the Company
or for any other distributions to be made by the Company. Any such return or
distributions shall be made solely from the Assets.
46
16.7 Restriction on Liquidation
Notwithstanding anything to the contrary contained herein,
for so long as any Series A Preferred Interests are outstanding, the Company
shall not liquidate prior to October 10, 2016, without first redeeming in full
(or setting aside payment therefor) all outstanding shares of Series A
Preferred Interests.
SECTION 17.
GENERAL PROVISIONS
17.1 Notices and Distributions
Except as otherwise provided herein, any notice,
distribution, offer or other communication which may be given to any Partner
in connection with the Company or this Agreement shall be duly given if
reduced to writing and:
(a) if to any Partner, when personally delivered, or
if sent by mail, postage prepaid, overnight courier or facsimile transmission,
when actually received at the last address furnished by such Partner pursuant
to Section 2.3 for notice purposes at the time of such mailing, overnight
courier or facsimile transmission; and
(b) if to the Company, the General Partner or the
Board of Directors, sent to 0000 00xx Xxxxxx, Xxxxx 0000, Xxxxx Xxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxxx with a copy to the Investment
Manager, 0000 00xx Xxxxxx, Xxxxx 0000, Xxxxx Xxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxx X. Xxxxxxxxx, personally delivered or if sent by mail,
overnight courier or facsimile transmission when actually received at the
address set forth above or at such other address as the Company, the General
Partner or the Board of Directors, respectively, may then have specified in
writing to the Company.
All distributions to the Partners shall be made to the
extent practicable by wire transfer to the accounts specified by the Partners,
which accounts may be changed from time to time by written notice to the
Company.
17.2 Survival of Rights
This Agreement shall be binding upon and, as to permitted
or accepted successors, Transferees and assigns, inure to the benefit of the
Partners and the Company and their respective heirs, legatees, legal
representatives, successors, Transferees and permitted assigns, in all cases
whether by the laws of descent and distribution, merger, consolidation, sale
of assets, operation of law, or otherwise.
47
17.3 Construction
The language in all parts of this Agreement shall be in
all cases construed simply according to its fair meaning and not strictly for
or against any Person. 17.4 Section Headings
The captions of the sections in this Agreement are for
convenience only and shall not be used in construing or interpreting this
Agreement.
17.5 Agreement in Counterparts
This Agreement and any amendments hereto may be executed
and delivered by facsimile and in multiple counterparts, each of which shall
be deemed an original agreement and all of which shall constitute one and the
same agreement, notwithstanding the fact that all Partners are not signatories
to the original or the same counterpart.
17.6 Governing Law
This Agreement has been executed by or on authority of a
majority of the Directors and the rights of all parties and the validity and
construction of every provision hereof shall be subject to and construed
according to the internal laws, and not the laws pertaining to choice or
conflict of laws, of the State of Delaware, and reference shall be
specifically made to the general corporation law of the State of Delaware as
to the construction of matters not specifically covered herein or as to which
an ambiguity exists, although such law shall not be viewed as limiting the
powers otherwise granted to the Directors hereunder and any ambiguity shall be
viewed in favor of such powers.
17.7 Additional Documents
Each Partner, upon the request of the Company, agrees to
perform all further acts and execute, acknowledge and deliver all further
documents which may be reasonably necessary, appropriate or desirable to carry
out the provisions of this Agreement, including but not limited to,
acknowledging before a Notary Public any signature heretofore or hereafter
made by a Partner.
17.8 Severability
Should any portion or provision of this Agreement be
declared illegal, invalid or unenforceable in any jurisdiction, then such
portion or provision shall be deemed to be severable from this Agreement to
the extent practicable while preserving the economic intention of the parties
and, in any event, such illegality, invalidity or unenforceability shall not
affect the remainder hereof.
48
17.9 Pronouns
All pronouns and defined terms and any variations thereof
shall be deemed to refer to the masculine, feminine or neuter, singular or
plural, as the identity of the Persons referred to may require.
17.10 Entire Agreement
This Agreement, the Statements of Preferences adopted
pursuant hereto and the Subscription Agreements executed and delivered by the
Partners (i) constitute the entire Agreement of the Partners with respect to
the Company and (ii) supersede all prior or contemporaneous written or oral
agreements, understandings or negotiations with respect to the Company. The
parties hereto acknowledge that the ability of the Partners and of the Company
to take certain of the actions contemplated hereby may be limited by the terms
of the Credit Agreement and the Statements of Preferences to the extent
provided therein.
17.11 Arbitration
To the extent permitted by law, any dispute relating to
this Agreement or the Company which cannot be amicably resolved among the
parties to such dispute shall be resolved by binding arbitration conducted in
Santa Monica, California or Los Angeles, California in accordance with the
rules of the American Arbitration Association then prevailing, and the
decisions of the arbitrators shall be final and binding on all the parties.
The costs of the arbitration (other than fees and expenses of counsel, which
shall be the responsibility of the parties retaining such counsel) shall be
allocated among the parties as determined by the arbitrator.
17.12 Waiver of Partition
Each Partner hereby irrevocably waives and forfeits any
and all rights that it may have, whether arising under contract or statute or
by operation of law, to maintain an action for partition of the Company or any
of the Assets.
17.13 Non-Petition Covenant
Each Partner hereby agrees not to cause the filing of a
petition in bankruptcy against the Company for any reason until at least 367
days (or, if longer, the preference period then in effect under applicable
federal and state law) after the termination of the Credit Agreement (without
any replacement thereof).
49
17.14 Filing
This Agreement and any amendment (including any
supplement) hereto shall be filed in such places as may be required or as the
Company deem appropriate. Each amendment shall be accompanied by a certificate
signed and acknowledged by an authorized Person stating that such action was
duly taken in a manner provided herein, and shall, upon insertion in the
Company's minute book, be conclusive evidence of all amendments contained
therein. A restated Agreement, containing the original Agreement as amended by
all amendments theretofore made, may be executed from time to time by an
authorized Person and shall, upon insertion in the Company's minute book, be
conclusive evidence of all amendments contained therein and may thereafter be
referred to in lieu of the original Agreement and the various amendments
thereto.
50
IN WITNESS WHEREOF, the Secretary of the Company has hereunto
set his hands as of the date first written above.
SECRETARY:
/s/ Xxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxxxx
S-1
COMMON PARTNERS:
Those Persons subscribing for Common
Interests and admitted as Partners
by the General Partner:
By: SVOF/MM, LLC
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Authorized Signatory
PREFERRED PARTNERS:
Those Persons subscribing for
Series A Preferred Interests and
admitted as Partners by the
General Partner:
By: SVOF/MM, LLC
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Authorized Signatory
S-2
APPENDIX A
Statement of Preferences of Series A Preferred Interests
A-1
APPENDIX B
Form of Notice of Transfer
[Date]
Tennenbaum Opportunities Partners V, LP
c/o Tennenbaum Capital Partners, LLC
0000 00xx Xx. Xxxxx 0000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Fax: (000) 000-0000
Tel: (000) 000-0000
Ladies and Gentlemen:
This is to advise you that [_______________] (the "Purchaser") will purchase
(contingent only upon the approval of such purchase by Xxxxxxxxxx Opportunities
Partners V, LP, a Delaware limited partnership (the "Company")) in a private
resale (the "Purchase") from [___________________] (the "Seller") [insert number
or amount] of [Common Interests (the "Interests")] issued pursuant to the
Partnership Agreement of the Company dated as of [ ] (as amended, modified or
supplemented from time to time, the "Partnership Agreement"). Capitalized terms
used herein and not defined have the respective meanings assigned to them in the
Partnership Agreement, a copy of which has been provided to the undersigned by
the Seller. Seller has also provided to the Purchaser the Confidential Private
Placement Memorandum, dated [ ], relating to the Interests of the Company,
together with any supplements thereto (the "Confidential Private Placement
Memorandum").
The undersigned hereby irrevocably agrees, represents and warrants on behalf of
the Purchaser that:
1. The Purchaser has been provided with and has truthfully and
accurately completed and returned to the Investment Manager a
subscription agreement, which is attached hereto, and the
representations and warranties made by the Purchaser in such
subscription agreement, including, without limitation, the
representations and warranties relating to the Purchaser's status as
an "accredited investor" within the meaning of Regulation D
promulgated under the Securities Act and as a "qualified client"
within the meaning of Rule 205-3 under the Investment Advisers Act of
1940, accurately describe the status of the Purchaser. The Purchaser
understands that the Company and the Investment Manager will rely on
the representations and warranties made by the Purchaser in the
subscription agreement in determining the eligibility of the
Purchaser to purchase the Interests.
2. If the Purchaser resells or transfers all or any portion of the
Interests, the Purchaser will obtain from each purchaser or
transferee a letter containing the same representations and
agreements as set forth herein and will have such purchaser or
transferee complete a subscription agreement.
B-1
3. The Purchaser (i) hereby agrees that this Transfer Certificate may be
attached to the Partnership Agreement and (ii) by executing and
delivering this Transfer Certificate, with the consent of the Company,
hereby becomes a Substituted Partner under the Partnership Agreement
and agrees to be bound by all the terms thereof.
4. The Purchaser hereby constitutes and appoints the Investment Manager
its true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution for the Purchaser and in its name,
place and stead, in any and all capacities, to take any and all actions
as are authorized by the power of attorney contained in the Partnership
Agreement.
The power of attorney granted hereby shall be deemed an irrevocable
special power of attorney, coupled with an interest, which the
Investment Manager may exercise for the Purchaser by the signature of
the Company or by listing the Purchaser as a Partner, and executing any
instrument with the signature of the Company as attorney-in-fact for
the Purchaser.
5. The Purchaser agrees to bear all of the Company's expenses and costs
incurred in connection with the Transfer and substitution, including
all legal fees and filing fees.
Very truly yours,
[Name of Purchaser]
Address:
By: _______________________________ _________________________________
Name:
Title: _________________________________
B-2
This Transfer Certificate shall constitute (i) the notice of Transfer required
under subsection 11.2(a)(iv) of the Partnership Agreement and (ii) the
instrument of transfer required under subsection 13.1(d) of the Partnership
Agreement.
[Name of Seller]
Address:
By: _______________________________ _________________________________
Name:
Title: _________________________________
B-3
The undersigned, on behalf of the Company, hereby acknowledges receipt of this
Transfer Certificate and acknowledges and agrees that this Transfer Certificate
shall constitute the notice of Transfer required under subsection 11.2(a)(iv) of
the Partnership Agreement and the instrument of transfer required under
subsection 13.1(d) of the Partnership Agreement. The undersigned, on behalf of
the Company, hereby consents to the Transfer which is the subject of this notice
of Transfer pursuant to subsections 11.2(a)(v) and 11.2(b)(i) of the Partnership
Agreement and hereby acknowledges and agrees that the Purchaser shall become a
Substituted Partner under the Partnership Agreement pursuant to subsection
11.2(b) of the Partnership Agreement. The proper authorized Person of the
Company will record on the books and records of the Company the Purchaser as a
Partner of the Company.
By: Xxxxxxxxxx Capital Partners, LLC,
Investment Manager of Xxxxxxxxxx
Opportunities Partners V, LP
By: ___________________________
Name:
Title:
B-4
Appendix C
Schedule of Partners
Common Partners: % Interest
--------------- ----------
Xxxxxxxxxx Opportunities Fund V, LLC 100%
Series A Preferred Partners: No. of Shares
---------------------------- -------------
C-1