SEC FILE NO. 70-8537
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CERTIFICATE PURSUANT TO
RULE 24
OF PARTIAL COMPLETION OF
TRANSACTIONS
GENERAL PUBLIC UTILITIES CORPORATION
ENERGY INITIATIVES, INC.<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------------
In the Matter of )
)
GENERAL PUBLIC UTILITIES CORPORATION ) Certificate Pursuant
ENERGY INITIATIVES, INC. ) to Rule 24 of Partial
) Completion of
SEC File No. 70-8537 ) Transactions
)
(Public Utility Holding Company )
Act of 1935) )
)
------------------------------------------
TO THE MEMBERS OF THE SECURITIES AND EXCHANGE COMMISSION:
The undersigned, General Public Utilities Corporation
("GPU") and Energy Initiatives, Inc. ("EI"), hereby certify
pursuant to Rule 24 of the Rules and Regulations under the Public
Utility Holding Company Act of 1935, that certain of the
transactions proposed in the Application, as amended, filed in
SEC File No. 70-8537, have been carried out in accordance with
the Commission's order, dated February 8, 1995 (HCAR No. 26230),
with respect thereto, as follows:
1. On October 31, 1995, EI entered into an Amended
and Restated Limited Partnership Agreement relating to the
EnviroTech Investment Fund I Limited Partnership (the
"Partnership"). Such agreement principally provides for the
admission of additional limited partners to the Partnership and
certain amendments made in connection therewith. In all other
respects the transactions proposed in the Application remain
unchanged.
1<PAGE>
2. The following exhibit is filed in Item 6:
(a) Exhibits:
A-2 Form of EnviroTech Investment Fund I
Limited Partnership Amended and Restated
Limited Partnership Agreement.
2<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, THE UNDERSIGNED COMPANIES HAVE DULY
CAUSED THIS CERTIFICATE TO BE SIGNED ON THEIR BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
GENERAL PUBLIC UTILITIES CORPORATION
By:
T. G. Howson,
Vice President and Treasurer
ENERGY INITIATIVES, INC.
By:
B. L. Levy, President
Date: November 13, 1995<PAGE>
EXHIBIT TO BE FILED BY EDGAR
Exhibit:
A-2 - Form of EnviroTech Investment Fund I Limited
Partnership Amended and Restated Limited
Partnership Agreement.<PAGE>
EXHIBIT A-2
ENVIROTECH (SM) INVESTMENT FUND I LIMITED PARTNERSHIP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
Agreement Dated as of April 13, 1995
Amended as of October __, 1995<PAGE>
TABLE OF CONTENTS
Page
Article I - General Provisions . . . . . . . . . . . . . . . 1
Section 1.1 Definition . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Partnership Name . . . . . . . . . . . . . . . . 5
Section 1.3 Fiscal Year . . . . . . . . . . . . . . . . . . 5
Section 1.4 Nature and Liability of Partners . . . . . . . . 5
Section 1.5 Purposes of Partnership; Investment of Funds . . 6
Section 1.6 Powers of Partnership . . . . . . . . . . . . . 6
Section 1.7 Advisory Board . . . . . . . . . . . . . . . . . 7
Article II - Management of Partnership . . . . . . . . . . . 8
Section 2.1 General . . . . . . . . . . . . . . . . . . . . 8
Section 2.2 Services of General Partner . . . . . . . . . . 9
Section 2.3 Compensation of General Partner . . . . . . . 10
Section 2.4 Restrictions . . . . . . . . . . . . . . . . . 12
Section 2.5 Conflict of Interest Transactions . . . . . . 14
Section 2.6 Reliance by Third Parties . . . . . . . . . . 15
Section 2.7 Dedication of Resources . . . . . . . . . . . 15
Section 2.8 Partner's Transactions . . . . . . . . . . . . 15
Section 2.9 Exculpation of Liability . . . . . . . . . . . 15
Section 2.10 Indemnification . . . . . . . . . . . . . . . 16
Section 2.11 Coordination with Other Managed Funds . . . . 17
Article III - Capital Accounts; Distributions; Profits and
Losses . . . . . . . . . . . . . . . . . . . . 18
Section 3.1 Capital Contributions . . . . . . . . . . . . 18
Section 3.2 Capital Accounts . . . . . . . . . . . . . . . 21
Section 3.3 Allocation of Net Income, Net Losses and other
Partnership Items . . . . . . . . . . . . . . 21
Section 3.4 Distributions to Partners . . . . . . . . . . 22
Section 3.5 Distributions In Kind . . . . . . . . . . . . 24
Section 3.6 Re-allocation of Carried Interest . . . . . . 25
Article IV - Withdrawal of Profits, Gains or Capital . . . 27
Section 4.1 Withdrawal by Limited Partners . . . . . . . . 27
Section 4.2 Legal Representatives . . . . . . . . . . . . 30
Section 4.3 Liquidating Share . . . . . . . . . . . . . . 31
Section 4.4 Cessation of Participation . . . . . . . . . . 31
Article V - Transfer of Partnership Interests . . . . . . 31
Section 5.1 Assignability of Interests . . . . . . . . . . 31
Section 5.2 Substituted Limited Partners . . . . . . . . . 32
Section 5.3 Obligation of Assignee . . . . . . . . . . . . 33
Section 5.4 Special Limited Partners . . . . . . . . . . . 33
Section 5.5 Prohibition Against Public Trading . . . . . . 34
Article VI - Duration and Liquidation of Partnership . . . 35
Section 6.1 Duration . . . . . . . . . . . . . . . . . . . 35
Section 6.2 Withdrawal of Limited Partner . . . . . . . . 35
Section 6.3 Termination of the Partnership; Withdrawal and
Removal of General Partner . . . . . . . . . . 35
Section 6.4 Liquidation . . . . . . . . . . . . . . . . . 37
(i)<PAGE>
Section 6.5 Distribution Upon Liquidation . . . . . . . . 38
Section 6.6 Deficit Restoration by General Partner . . . . 39
Article VII - Reports to Partners . . . . . . . . . . . . . 39
Section 7.1 Independent Auditors . . . . . . . . . . . . . 39
Section 7.2 Reports . . . . . . . . . . . . . . . . . . . 39
Section 7.3 Inspection . . . . . . . . . . . . . . . . . . 40
Section 7.4 Tax Returns . . . . . . . . . . . . . . . . . 41
Article VIII - Valuation . . . . . . . . . . . . . . . . . . 41
Section 8.1 Valuation of Partnership Net Worth . . . . . . 41
Section 8.2 Valuation Date . . . . . . . . . . . . . . . . 41
Section 8.3 Valuing Securities and Other Assets . . . . . 41
Section 8.4 Disputes . . . . . . . . . . . . . . . . . . . 42
Article IX - Miscellaneous . . . . . . . . . . . . . . . . 43
Section 9.1 Admission of Partners . . . . . . . . . . . . 43
Section 9.2 Disputed Matters . . . . . . . . . . . . . . . 43
Section 9.3 General . . . . . . . . . . . . . . . . . . . 43
Section 9.4 Notices . . . . . . . . . . . . . . . . . . . 44
Section 9.5 Execution of Certificate of Limited Partnership
and Other Documents . . . . . . . . . . . . . 44
Section 9.6 Force Majeure . . . . . . . . . . . . . . . . 44
Section 9.7 Amendments . . . . . . . . . . . . . . . . . . 45
Section 9.8 Headings . . . . . . . . . . . . . . . . . . . 45
Section 9.9 Power of Attorney . . . . . . . . . . . . . . 45
Section 9.10 Effect of Securities Laws . . . . . . . . . . 46
(ii)<PAGE>
ENVIROTECH INVESTMENT FUND I LIMITED PARTNERSHIP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT,
made and entered into as of October __, 1995, amends and restates
in its entirety the Amended and Restated Limited Partnership
Agreement of EnviroTech Investment Fund I Limited Partnership,
dated as of April 13, 1995, among Advent International Limited
Partnership, a Delaware limited partnership, as general partner,
and the persons listed as limited partners in Appendix A hereto,
as limited partners, each having the respective address set forth
in Appendix A hereto.
Article I - General Provisions
Section 1.1 Definitions. For all purposes of this
Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
(a) Agreement. "Agreement" means this Amended and
Restated Limited Partnership Agreement as it may be amended from
time to time.
(b) AIC Affiliate. "AIC Affiliate" means:
(i) AIC, and all officers and employee-directors
of AIC;
(ii) any spouse or minor child of an AIC Affiliate
described in subparagraph (i) above; and
(iii) any partnership of which any AIC
Affiliate described in subparagraph (i) above is itself a
general partner (or directly or indirectly exercises the
duties of the general partner, whether pursuant to a
management agreement or otherwise) and any corporation of
which an AIC Affiliate described in subparagraph (i) and/or
(ii), the Partnership or any AIC Affiliates in the aggregate
own, directly or indirectly, more than twenty percent (20%)
of the voting securities or would own more than twenty
percent (20%) of the voting securities if all options,
warrants and other rights to acquire voting securities
(including convertible securities) issued by such
corporation were exercised by the Partnership and all AIC
Affiliates having such options, warrants and rights.
(c) Capital Account. "Capital Account" means, as to
any Partner, the capital account maintained on the books of the
Partnership for such Partner, as required by Section 3.2.
(d) Capital Commitment. "Capital Commitment" means,
as to any Partner, the total amount of money paid or agreed to be
paid to the Partnership by such Partner as set forth in Appendix
A.<PAGE>
(e) Capital Contribution. "Capital Contribution"
means, as to any Partner, the amount of money actually
contributed to the Partnership by such Partner.
(f) Certificate of Limited Partnership. "Certificate
of Limited Partnership" means the certificate of limited
partnership for the Partnership and all amendments thereto
required under the laws of the State of Delaware to be filed in
the appropriate public offices within the State of Delaware to
perfect or maintain the Partnership as a limited partnership
under the laws of the State of Delaware and/or to effect the
admission, withdrawal or substitution of any Partner of the
Partnership.
(g) Code. "Code" means the U.S. Internal Revenue Code
of 1986, as amended.
(h) ERISA. "ERISA" means the U.S. Employee Retirement
Income Security Act of 1974, as amended.
(i) Final Closing Date. "Final Closing Date" means
January 5, 1996.
(j) General Partner. "General Partner" means Advent
International Limited Partnership, a Delaware limited partnership
of which Advent International Corporation ("AIC") is the general
partner, or any person substituted for or who succeeds Advent
International Limited Partnership as such General Partner
pursuant to this Agreement.
(k) Industrial Investment Team. "Industrial
Investment Team" means that body of persons designated by the
General Partner to make recommendations with respect to
prospective Investments to the Partnership in accordance with the
provisions of Section 2.7.
(l) Investment. "Investment" in any Person means the
acquisition of any Security issued by such Person, whether from
such Person or from another Person, the guaranty of, or otherwise
becoming liable for, any obligation of any Person, the providing
of financing of any other nature to any Person, or any
combination of the foregoing.
(m) Limited Partner. "Limited Partner" means any
person who is or becomes a Limited Partner of the Partnership as
provided herein.
(n) Net Income, Net Gain, Net Losses and Net Loss.
(i) "Net Income" means, with respect to any
fiscal year of the Partnership, or portion thereof, the net
income of the Partnership determined in accordance with the
same principles employed in determining the Partnership's
taxable income for U.S. Federal income tax purposes.
-2-<PAGE>
(ii) "Net Gain" means, with respect to any fiscal
year of the Partnership, or portion thereof, the net income
of the Partnership determined in accordance with the same
principles employed in determining the Partnership's taxable
income for U.S. Federal income tax purposes, taking into
account the full amount of any gains or losses and all items
of expense attributable to the sale or exchange of
Securities or other assets, but not taking into account (x)
any income, loss or deduction attributable to Non-Portfolio
Investments; (y) the Management Fee described in
Section 2.3(a) hereof; and (z) any deduction (whether by way
of amortization or otherwise) to which the Partnership may
be entitled by reason of the expenses and costs described in
Section 2.3(b) that are not directly related to particular
Portfolio Investments or proposed Portfolio Investments.
(iii) "Net Losses" means with respect to any
fiscal year of the Partnership, or portion thereof, the net
loss of the Partnership determined in accordance with the
same principles employed in determining the Partnership's
taxable income for U.S. Federal income tax purposes.
(iv) "Net Loss" means with respect to any fiscal
year of the Partnership, or portion thereof, the net loss of
the Partnership determined in accordance with the same
principles employed in determining the Partnership's taxable
income for U.S. Federal income tax purposes, taking into
account the full amount of any gains or losses and all items
of expense attributable to the sale or exchange of
Securities or other assets, but not taking into account (x)
any income, loss or deduction attributable to Non-Portfolio
Investments; (y) the Management Fee described in Section
2.3(a) hereof; and (z) any deduction (whether by way of
amortization or otherwise) to which the Partnership may be
entitled by reason of the expenses and costs described in
Section 2.3(b) that are not directly related to particular
Portfolio Investments or proposed Portfolio Investments.
(v) The following rules shall apply in
determining Net Income, Net Gain, Net Losses and Net Loss:
(A) Gain or loss on the sale or exchange of
Partnership property shall be included in the
determination of Net Income, Net Gain, Net Losses and
Net Loss when recognized in accordance with the U.S.
Internal Revenue Code of 1986, as amended from time to
time (the "Code"), and when deemed recognized pursuant
to the provisions of Sections 3.5(a) and 6.5(e) hereof.
(B) For purposes of computing Net Income,
Net Gain, Net Losses and Net Loss, taxable income shall
include every item requiring separate computation under
Section 702(a) of the Code, plus income that is exempt
from U.S. Federal income tax and less expenses and
losses that are not deductible for U.S. Federal income
tax purposes.
-3-<PAGE>
(o) Non-Portfolio Investments. "Non-Portfolio
Investments" means investments in high-quality, short-term, low
investment risk Securities (e.g., bank certificates of deposit,
United States Government Securities with maturities of less than
one year, and other cash equivalent Securities with the highest
investment grade rating of Standard & Poor's Ratings Group or
Moody's Investors Service), by the Partnership of funds prior to
such funds being invested in Securities or other investments in
businesses as contemplated in Section 1.5.
(p) Opinion of Counsel. "Opinion of Counsel" means an
opinion in writing signed by legal counsel either chosen by the
General Partner or, if chosen by a Limited Partner, reasonably
satisfactory to the General Partner.
(q) Original Closing Date. "Original Closing Date"
means the first date on which an investor becomes a Limited
Partner of the Partnership provided that the aggregate Capital
Commitment on such date shall be at least ten million dollars
($10,000,000).
(r) Partner. "Partner" means the General Partner or a
Limited Partner.
(s) Partnership. "Partnership" means EnviroTech
Investment Fund I Limited Partnership, a Delaware limited
partnership.
(t) Partnership Distributions. "Partnership
Distributions" means any payment to the Partners pursuant to
Sections 3.4 or 6.5(e).
(u) Person. "Person" shall include a corporation,
association, joint venture, partnership, trust or individual.
(v) Portfolio Company. "Portfolio Company" means any
Person in which the Partnership is permitted to make an
Investment pursuant to Section 1.5 hereof and in which the
Partnership has an outstanding Investment.
(w) Portfolio Investments. "Portfolio Investments"
means any Securities or other Investments acquired or made by the
Partnership other than Non-Portfolio Investments.
(x) Related Party Transaction. "Related Party
Transaction" means (i) any transfer by the Partnership to, or any
acquisition by the Partnership from, any AIC Affiliate of any or
all Investments, or any portion thereof, held by the transferor,
or (ii) any payments by the Partnership to an AIC Affiliate in
connection with any of the foregoing transactions.
(y) Securities. "Securities" means securities of
every kind or description.
(z) Short-Term Investments. "Short-Term Investments"
means short-term equity and equity related positions,
-4-<PAGE>
underwritings, bridge financing, acquisitions of Securities
through the exercise of warrants or options, Investments that
result from restructurings or refinancings and which are
syndicated to third parties, and other Investments which at the
time of investment are intended to be, and are, outstanding for
less than eighteen (18) months from the date of investment.
(aa) Voting Control. "Voting Control" means the right
to elect a majority of the directors of a corporation, the right
to designate a majority of the general partners of a partnership,
or the right to receive fifty percent (50%) or more of the
profits of a partnership.
Section 1.2 Partnership Name. The Partnership shall do
business under the name and style of "EnviroTech Investment Fund
I Limited Partnership."
Section 1.3 Fiscal Year. Except as otherwise provided by
the Code, the fiscal year of the Partnership shall be the
calendar year, or such other fiscal year as the General Partner
shall designate; provided that once a fiscal year is chosen,
unless required by a change in applicable law or regulations, the
General Partner shall not change the Partnership's fiscal year
without the prior approval of a majority of the members of the
Advisory Board.
Section 1.4 Nature and Liability of Partners.
(a) The General Partner shall have such liability for
the repayment, satisfaction and discharge of the debts,
liabilities and obligations of the Partnership as is provided by
applicable law for a general partner of a limited partnership.
The Limited Partners shall be liable to the Partnership for the
repayment, satisfaction and discharge of its debts, liabilities
and obligations only (i) to the extent of the unpaid amount, if
any, of their Capital Commitments and (ii) as provided in the
Delaware Revised Uniform Limited Partnership Act.
(b) The Partners hereby agree among themselves to
share in accordance with the terms of this Agreement all losses,
liabilities or expenses suffered or incurred by virtue of the
operation of the Partnership, provided that the Limited Partners
shall share such losses, liabilities and expenses only to the
extent provided in Section 1.4(a) hereof with respect to their
liability for Partnership losses, liabilities and expenses. The
General Partner agrees to assume and be liable for all such
losses, liabilities and expenses not covered by the Limited
Partners' share of such losses, liabilities and expenses.
Section 1.5 Purposes of Partnership; Investment of Funds.
(a) The purposes of the Partnership are to provide
risk capital for, and to make or enter into arrangements to
acquire Investments in the Securities of, privately held and
publicly listed companies, including businesses in the
development stage.
-5-<PAGE>
(b) Investments shall only be made if, in the good
faith judgment of the General Partner, they comply with the
investment objectives set forth in the charter attached hereto as
Appendix B (the "Charter") and shall be made or acquired for the
account of the Partnership on the basis of and pursuant to the
terms of this Agreement; provided, however, that (i) material
amendments or modifications to the Charter may be made from time
to time with the prior affirmative vote of Limited Partners
representing one hundred percent (100%) of the combined Capital
Contributions of all of the Limited Partners, and (ii) amendments
or modifications to the Charter which, in the good faith judgment
of the Advisory Board, are not considered to be material may be
made, and any provision relating to the types of Investments may
be waived with respect to a particular transaction, from time to
time with the prior affirmative vote of Limited Partners
representing at least seventy-five percent (75%) of the combined
Capital Contributions of all of the Limited Partners. Pending
investments in Portfolio Investments or Short-Term Investments or
cash distributions to Partners, all of the Partnership's cash
shall be invested in Non-Portfolio Investments.
Section 1.6 Powers of Partnership. In furtherance of the
purposes of the Partnership set forth in Section 1.5, the
Partnership shall have the following powers:
(a) Subject to the limitations set forth in Section
2.1(c), to purchase or otherwise acquire, hold, and sell or
otherwise dispose of Securities, without regard to whether such
Securities are publicly traded, readily marketable or otherwise
restricted as to transfer or resale;
(b) Subject to the limitations set forth in Sections
2.4(c) and 2.4(e), to possess, transfer, mortgage, pledge or
otherwise deal in, and to exercise all rights, powers, privileges
and other incidents of ownership or possession with respect to,
Securities held or owned by the Partnership, and to carry
Securities in the name of a nominee or nominees;
(c) Subject to the limitations set forth in Sections
2.4(c) and 2.4(e), to guarantee the obligations of others and to
sell, pledge or otherwise dispose of bonds or other obligations
of the Partnership for its purposes;
(d) Subject to Section 2.3, to have and maintain an
office within the Commonwealth of Massachusetts and, in
connection therewith, to rent or acquire office space, engage
personnel and do such other acts and things as may be necessary
or advisable in connection with the maintenance of such office,
and on behalf of and in the name of the Partnership to pay and
incur reasonable expenses and obligations for legal, accounting,
investment advisory, consultative and custodial services, and
other reasonable expenses including, without limitation, taxes,
travel, insurance, rent, supplies, interest, salaries and wages
of employees, and all other reasonable costs and expenses
incident to the operation of the Partnership;
-6-<PAGE>
(e) To form and own one or more corporations, trusts
or limited partnerships controlled by the Partnership for
purposes of making Investments in accordance with the Charter,
provided that no entity so formed may do directly or indirectly
what the Partnership is prohibited by this Agreement from doing;
and
(f) To enter into, make and perform all such
contracts, agreements and other undertakings as may be necessary,
advisable or incidental to the carrying out of the foregoing
objectives and purposes.
Section 1.7 Advisory Board.
(a) There shall be an Advisory Board for the Limited
Partners which shall consist of up to fifteen (15) individuals
listed on Appendix C attached hereto. Limited Partners
representing a majority of the combined Capital Contributions of
all Limited Partners may at any time vote to increase the number
of the Advisory Board members and may elect persons to fill such
new seats on the Advisory Board. A representative of Edison
Electric Institute shall serve as a standing member of the
Advisory Board. Each member of the Advisory Board shall serve
until (i) he or she resigns (by giving the General Partner and
other members of the Advisory Board sixty (60) days prior written
notice) or (ii) he or she is removed pursuant to this Section
1.7(a). Any member of the Advisory Board may be removed, with or
without cause, by Limited Partners representing a majority of the
combined Capital Contributions of all Limited Partners. A
successor to any member of the Advisory Board who has resigned or
been removed shall be appointed by the Limited Partner who has
been represented on the Advisory Board by the resigned or removed
member within sixty (60) days of such resignation or removal.
Unless otherwise specified herein, the Advisory Board may act by
a majority vote of the members participating in the Advisory
Board meeting. At the request of any Advisory Board member, such
member will be designated a non-voting member of the Advisory
Board. Each non-voting Advisory Board member shall have the
right to participate as an observer at all Advisory Board
meetings, but shall not have the right to approve, consent to or
authorize any matter submitted to the Advisory Board for its
approval, consent or authorization. Non-voting Advisory Board
members shall not be considered as Advisory Board members for
purposes of determining whether the requisite number of Advisory
Board members have given any approval, consent or authorization.
Meetings of the Advisory Board may be held by means of a
conference telephone call. In addition to approving actions at a
meeting, upon prior notice to all members the Advisory Board may
act by the written consent of the number of members required to
approve the action to be taken pursuant to this Agreement.
Prompt notice of the taking of action by the Advisory Board
without a meeting by less than unanimous written consent shall be
given to the members of the Advisory Board who have not consented
in writing.
-7-<PAGE>
(b) The General Partner will meet with the Advisory
Board (i) on a semi-annual basis and (ii) upon reasonable notice,
at any other time when a majority of the Advisory Board deems
such a meeting necessary and will review with the Advisory Board
general matters of investment policy of the Partnership, matters
concerning transactions with the Partnership in which the General
Partner or an AIC Affiliate may have an interest and other
matters concerning the Partnership's affairs. No member of the
Advisory Board shall (x) take part in the management of the
Partnership, or (y) have any authority to bind the General
Partner or, except as specifically provided herein, to act for or
on behalf of the Partnership. With the consent of a majority of
the members of the Advisory Board, compliance by the Partnership
or the General Partner with the restrictions on Related Party
Transactions in Section 2.5 may be waived, either in any
particular instance or series of related instances occurring on
an ongoing basis and either retroactively or prospectively.
Article II - Management of Partnership
Section 2.1 General.
(a) The management, operation and implementation of
policy of the Partnership shall be, and hereby are, vested in the
General Partner who shall manage the Partnership's affairs.
Except as otherwise expressly provided herein, the General
Partner shall have the power to exercise the powers, rights and
authority granted to the General Partner hereunder on behalf and
in the name of the Partnership. The General Partner agrees that,
during the term of this Agreement, it shall devote such time to
the Partnership as is necessary for its proper operation.
(b) Notwithstanding the foregoing, in the event that
there is a "change in control of AIC," a "substantial change in
the management of AIC" or a "substantial change in the
composition of the Industrial Investment Team," the General
Partner shall within seven (7) days of the occurrence of such
event notify the Advisory Board. After a change in control of
AIC, a substantial change in the management of AIC or a
substantial change in the composition of the Industrial
Investment Team, the General Partner shall not have the authority
to cause the Partnership to make investments in Persons not
already Portfolio Companies, unless seventy-five percent (75%) of
the members of the Advisory Board approve the change in control
of AIC, the new management of AIC or the new composition of the
Industrial Investment Team, as the case may be; provided,
however, that the General Partner shall not be prohibited from
making any Investment in a new Portfolio Company if the
Partnership has committed to make such Investment prior to such
change in control, substantial change in management or
substantial change in the Industrial Investment Team. There
shall be deemed to be a "change in control of AIC" if any person
shall gain Voting Control of AIC other than (1) TA Associates
International I ("TA"), (2) Peter A. Brooke, (3) any entity
controlled by either or both of TA and Peter A. Brooke, or (4)
Persons who are now stockholders of AIC. There shall be deemed
-8-<PAGE>
to be a substantial change in the management of AIC if at any
point in time both of the following conditions shall exist:
(i) Peter A. Brooke is no longer participating actively in the
management of AIC, and (ii) at least two of the following members
of AIC's management, Thomas R. Armstrong, Douglas R. Brown, Henry
H. Haight, Clinton P. Harris and Thomas H. Lauer, are no longer
devoting substantially all their business time to the management
of AIC. Individuals may be substituted for the listed members of
AIC's management with the consent of the Advisory Board (and such
substitution shall not constitute a "substantial change in the
management of AIC"), provided: (a) that condition (i) does not
exist and (b) they are appointed by Peter A. Brooke. There shall
be deemed a substantial change in the composition of the
Industrial Investment Team if at any point in time either
(i) Dennis R. Costello and at least one other initial member of
the Industrial Investment Team or (ii) at least three initial
members of the Industrial Investment Team are no longer actively
and substantially participating as members of the Industrial
Investment Team and AIC has not replaced them with qualified
substitutes reasonably acceptable to the Advisory Board.
(c) The General Partner shall not cause or permit the
Partnership to:
(i) invest more than seven and one-half percent
(7.5%) of the Partnership's total Capital Commitments in a
single Portfolio Company without the prior approval of a
majority of the members of the Advisory Board;
(ii) invest in the aggregate more than five
percent (5%) of the Partnership's total Capital Commitments
in Portfolio Investments that constitute Securities which,
at the time the Securities are acquired, are readily
tradable on an established securities market (but excluding
(A) any Security which, as part of the Partnership's plan of
investment, will cease to be so tradable promptly after the
Security is acquired or (B) any Securities in public
companies received upon exchange of Portfolio Investments
then held by the Partnership from initial public offerings);
(iii) invest in any company which is not
already a Portfolio Company, but is already a "portfolio
company" with respect to another "Managed Fund" (as defined
in Section 2.11) without the prior approval of a majority of
the members of the Advisory Board; or
(iv) invest in hostile takeover transactions or in
"highly leveraged" buy outs.
Section 2.2 Services of General Partner. The General
Partner shall (i) provide investment advice to, and make
investment decisions for, the Partnership and shall bear the cost
of securing information and investment advice with respect to
prospective Investments (other than unreimbursed costs of outside
accountants and attorneys in connection therewith), (ii) maintain
the books and records of the Partnership, (iii) provide routine
-9-<PAGE>
and necessary bookkeeping and record keeping services and retain
custody of Partnership Securities, and (iv) provide office space,
office and executive staff and office supplies and equipment for
the use of the Partnership. The General Partner shall be
permitted to contract on behalf of the Partnership all or part of
the foregoing services, without the consent of the Advisory Board
or the Limited Partners, to any corporation or other entity (A)
which then owns, directly or indirectly, Voting Control of the
General Partner, or (B) of which the General Partner then owns
directly or indirectly Voting Control, or (C) of which a
corporation described in (A) then owns directly or indirectly
Voting Control, or (D) which is an entity controlled by,
controlling or under common control with the General Partner, or,
with the consent of a majority of the members of the Advisory
Board, any corporation or other entity not specified in (A)-(D)
above; provided, however, that (x) any such cost shall be the
responsibility of the General Partner and not of the Partnership
and (y) in all cases, investment decisions shall be made by the
General Partner. No such assignment of services shall relieve
the General Partner of its obligations, duties and liabilities
under this Agreement.
Section 2.3 Compensation of General Partner.
(a) Management Fee. In consideration of the services
to be provided to the Partnership by the General Partner, the
General Partner shall be paid an annual management fee (the
"Management Fee") by the Partnership, payable in advance in equal
quarterly installments on the Original Closing Date and the first
day of each calendar quarter beginning thereafter. During the
period beginning on the Original Closing Date up to (but not
including) the sixth anniversary of the Original Closing Date,
the Management Fee for each calendar quarter shall equal
one-fourth (1/4) of two and one-half percent (2.5%) of the sum of
all Capital Commitments determined for each installment as of the
date on which such installment is payable. Commencing on the
sixth anniversary of the Original Closing Date, the Management
Fee for each calendar quarter shall be equal to the lesser of (i)
one-fourth (1/4) of the Applicable Percentage (as set forth
below) of the sum of all Capital Commitments, and (ii) one-fourth
(1/4) of two and one-half percent (2.5%) of the difference between
(x) the sum of all Capital Commitments, minus (y) the sum of the
purchase price paid by the Partnership for all Investments sold
or otherwise disposed of by the Partnership prior to the date on
which such Management Fee is payable plus the purchase price paid
by the Partnership for all Investments which are reflected on the
books of the Partnership as having no significant realizable
value and for which the General Partner has ceased all management
related activities. The Applicable Percentage shall be
determined according to the following schedule:
-10-<PAGE>
Applicable
Percentage Period in Effect
2.25% For the period commencing on the sixth
anniversary of the Original Closing Date, up
to but not including the seventh anniversary
of the Original Closing Date
2.00% For the period commencing on the seventh
anniversary of the Original Closing Date, up
to but not including the eighth anniversary
of the Original Closing Date
1.75% For the period commencing on the eighth
anniversary of the Original Closing Date up
to but not including the ninth anniversary of
the Original Closing Date
1.50% For the period commencing on the ninth
anniversary of the Original Closing Date
until dissolution of the Partnership
The Management Fee shall be pro rated for any period less than a
calendar quarter and for adjustments in the Applicable Percentage
(if the anniversary date of the Original Closing Date occurs
other than on the first day of a calendar quarter) and any
additional Capital Commitments of Limited Partners admitted
pursuant to Section 9.1. The Management Fee also shall be
reduced by an amount equal to one-half (1/2) of any fee (net of
direct expenses) for assisting with the acquisition, disposition
or reorganization of a Portfolio Company which the General
Partner or an AIC Affiliate receives with respect to the
Partnership's Investment in such Portfolio Company; provided that
any underwriting fee or similar fee received by the General
Partner or an AIC Affiliate on account of the provision of the
Partnership's capital shall reduce the Management Fee by the full
amount of such underwriting or similar fee. In addition, the
Management Fee shall be reduced by the full amount of any
"break-up" fee (net of direct expenses) relating to a Portfolio
Company (or proposed Portfolio Company) which the General Partner
or an AIC Affiliate receives with respect to a proposed
Investment by the Partnership in such Portfolio Company. Such
fees received by the General Partner or an AIC Affiliate shall be
credited against the payment of future Management Fees if such
reduction exceeds the Management Fees then payable.
(b) Expenses not Covered by the Management Fee.
(i) In addition to the payment of the Management
Fee, the General Partner shall be reimbursed by the
Partnership for all fair and reasonable expenditures made on
behalf of the Partnership, including:
(A) all reasonable travel, legal,
accounting, other third party professional and
out-of-pocket expenses incurred in the organization of
the Partnership up to a maximum amount of one hundred
-11-<PAGE>
ninety five thousand dollars ($195,000), all such
reasonable expenses made on behalf of the Partnership
in preparing any amendment to this Agreement, and
(B) all reasonable third party expenses
incurred for any other legal, audit or reporting
services for the Partnership.
(ii) To the extent not borne by a Portfolio
Company, the Partnership shall bear all third party costs
and expenses incurred in connection with the purchase,
retention and sale of Investments (whether or not
consummated), including, without limitation, loan fees,
private placement fees, sales commissions, finder's fees,
personal property taxes on Investments, brokerage fees,
auditing fees, underwriting commissions and discounts,
investment banker fees, insurance costs, and all other
expenses that are directly related to particular Investments
or proposed Investments, whether or not actually
consummated. The General Partner shall not be entitled to
be reimbursed for the following operating expenses relating
to the Partnership's investment activities: salaries and
fringe benefits of any personnel of the General Partner and
any professional, administrative, clerical, bookkeeping and
secretarial personnel employed by the Partnership (other
than outside attorneys and accountants); rent,
administrative and other overhead charges and costs of any
office maintained by the General Partner; travel and
entertainment expenses; costs of statistical services,
publications and periodicals; expenses of reports to Limited
Partners (other than legal, accounting and appraisal
expenses); the costs of fidelity bonds and other insurance
(to the extent not directly related to the purchase,
retention or sale of Investments by the Partnership); and
other ordinary and usual expenses incurred in connection
with the making and monitoring of the Partnership's
Investments.
(iii) If there is a change in a relevant
statute, regulation or other official pronouncement
affecting the reporting requirements set forth in Section
7.2(c) of the Agreement, which change causes the General
Partner to incur extraordinary expense in order to comply
with such reporting requirements, the General Partner may
request approval of the Advisory Board for reimbursement
from Partnership funds for such extraordinary expense, which
approval shall not be unreasonably withheld.
Section 2.4 Restrictions. Subject to Section 2.5, the
Partners shall be restricted in their activities as follows:
(a) No Services by Limited Partners. The Limited
Partners shall not participate in the management or control of
the Partnership and shall not hold themselves out as general
partners or take any action on behalf of the Partnership or in
-12-<PAGE>
any way commit the Partnership to any agreement or contract and
shall have no right to do any of the foregoing.
(b) Partnership Credit. No Partner shall lend or use
the funds or credit of the Partnership or employ the
Partnership's name for any purpose whatsoever, except that the
General Partner may do so for the purposes of the Partnership to
the extent allowed under this Agreement.
(c) Limitation on Borrowing and Pledging.
(i) The General Partner shall manage the
Partnership so as to avoid the necessity for borrowing money
and shall in all events comply with Section 2.4(e).
(ii) The Partnership may guarantee the obligations
of Portfolio Companies, provided that the aggregate of the
amount guaranteed plus all Investments in such Portfolio
Company shall at no time exceed the limitation on Investment
with respect to such Portfolio Company as set forth in
Section 2.1(c).
(iii) Nothing in this Section 2.4(c) shall be
construed to prohibit any AIC Affiliate that is a
corporation from engaging in the conduct prohibited herein;
provided that any such conduct involving the Partnership
does not directly or indirectly violate the prohibitions on
the Partnership's borrowing money or guaranteeing
obligations of Portfolio Companies as set forth in this
Section 2.4(c).
(d) Reinvestment of Capital. The General Partner
shall not, without Advisory Board consent, reinvest the proceeds
from the realization of Portfolio Investments, except to the
extent necessary for the aggregate amount invested during the
term of the Partnership in Portfolio Investments to equal the
aggregate amount of all Capital Contributions. Income or gain
from Short-Term Investments or Non-Portfolio Investments will not
be reinvested, but capital from Short-Term Investments or
Non-Portfolio Investments may be reinvested by the General
Partner in any Investment permitted by this Agreement.
(e) Unrelated Business Taxable Income. The General
Partner shall use its best efforts to prevent the Partnership
from having unrelated business taxable income ("UBTI") within the
meaning of Code Section 512(a)(1), including income from debt
financed property of the Partnership within the meaning of Code
Section 514. The General Partner shall promptly notify each
tax-exempt Limited Partner whenever it appears likely that any
such Limited Partner will incur UBTI on account of any Investment
of the Partnership. If the activities of the Partnership do give
rise to UBTI with respect to any Limited Partner, the General
Partner shall cause the Partnership's accountants to determine
such Limited Partner's allocable share of such UBTI and the
amount of tax that would be paid by such Limited Partner if such
UBTI from the Partnership were the only UBTI of such Limited
-13-<PAGE>
Partner and shall notify such Limited Partner of such amount
within one hundred twenty (120) days after the end of the
Partnership's taxable year.
(f) Other Managed Funds. Prior to the earlier of (i)
the fifth anniversary of the Original Closing Date or (ii) the
date on which two-thirds (2/3) of the aggregate Capital
Commitments of the Partnership have been committed for Portfolio
Investments, the General Partner will advise the Advisory Board
of any pooled or dedicated investment fund that AIC or any AIC
Affiliate proposes to manage if such fund has investment
objectives substantially similar to the objectives outlined in
the Charter. In addition, prior to the earlier of (i) the fifth
anniversary of the Original Closing Date, or (ii) the date on
which two-thirds (2/3) of the aggregate Capital Commitments of
the Partnership have been committed for Portfolio Investments,
neither AIC nor any AIC Affiliate will, without the consent (such
consent not to be unreasonably withheld) of the Advisory Board,
manage any new pooled or dedicated investment fund whose
investment objectives are substantially similar to the objectives
outlined in the Charter; provided, however, that the foregoing
restriction shall not apply to the management of any investment
fund currently in existence and the formation and management of
one new dedicated investment fund whose investment objectives are
substantially similar to the objectives outlined in the Charter;
provided further, that the total committed capital of any such
one new dedicated investment fund shall not exceed Thirty Million
Dollars ($30,000,000).
(g) Additional Restrictions. The Partnership shall
not make short sales of Securities not owned by the Partnership,
nor shall the Partnership at any time own the voting securities
of an investment company required to be registered under the
United States Investment Company Act of 1940.
Section 2.5 Conflict of Interest Transactions.
(a) Except as set forth in Section 1.7(b), the
Partnership shall not engage in any Related Party Transaction.
Notwithstanding the foregoing provision of this Section 2.5, the
Partnership may purchase Securities from an AIC Affiliate, if (i)
such AIC Affiliate has acquired the Securities within ninety (90)
days prior to the sale to the Partnership with the intent of
transferring such Securities to the Partnership (which intent has
been expressed in writing to the Partnership prior to the
acquisition by the AIC Affiliate of such Securities) and the
price paid by the Partnership for such Securities is no greater
than the price paid by the AIC Affiliate, or (ii) such AIC
Affiliate is a Portfolio Company, the Securities of which are
being purchased by the Partnership.
(b) Nothing in this Section 2.5 shall be construed to
prohibit the General Partner or an AIC Affiliate from charging an
arm's-length fee to a Portfolio Company or to a Limited Partner
for specific services requested by such party including, but not
limited to, assistance with technology transfers or mergers and
-14-<PAGE>
acquisitions, providing full-time or part-time management or
operating personnel, providing investment banking services with
respect to specific transactions, and developing business plans
and other presentations, provided the General Partner or AIC
Affiliate shall not charge a fee in excess of $100,000 without
the consent of the Advisory Board. Nor shall this Section 2.5 be
construed to prohibit the General Partner or an AIC Affiliate
from receiving a fee from a Portfolio Company in connection with
the acquisition, disposition or reorganization of a Portfolio
Company, provided the General Partner or AIC Affiliate shall not
charge a fee in excess of $100,000 without the consent of the
Advisory Board. Subject to reductions in the Management Fee
pursuant to Section 2.3(a), for certain fees, if any, all such
fees paid to the General Partner for such services shall be the
sole property of the General Partner. The amount of any such
fees paid to the General Partner shall be reported to the Limited
Partners annually and any fees paid to the General Partner for
assistance with the acquisition, disposition or reorganization of
a Portfolio Company also shall be reported in writing to the
Advisory Board.
Section 2.6 Reliance by Third Parties. Notwithstanding
any other provision of this Article II, any third party dealing
with the Partnership may rely conclusively upon the authority,
power and right of the General Partner acting under this
Agreement. This Section shall not be deemed to limit the
liabilities and obligations of the General Partner as set forth
in this Agreement.
Section 2.7 Dedication of Resources. The General Partner
shall dedicate appropriate resources to the Partnership in
accordance with the General Partner's fiduciary duty to the
Partnership, including, without limitation, causing members of
AIC's Industrial Investment Team designated by the General
Partner from time to time, to be actively engaged in the
formulation of investment recommendations with respect to
prospective Investments in businesses which are engaged in
activities in the product and market areas described in the
Charter. The initial members of the Industrial Investment Team
designated by the General Partner shall be Dennis R. Costello,
Lawrence W. McKenna, Steven M. Tadler, John B. Singer and George
S. Reichenbach.
Section 2.8 Partner's Transactions. Nothing in this
Agreement shall be construed to prohibit any Partner from buying
or selling Securities for its own account, including Securities
of the same issuers as those held by the Partnership; provided,
however, that the General Partner will use all reasonable efforts
to ensure that partners or officers (including, where
appropriate, employee-directors) of itself or any AIC Affiliate
will not hold for their own account interests in any Portfolio
Company except as provided for, and under the terms of, the AIC
co-investment policy set forth in Appendix D attached hereto, as
such policy may be amended from time to time with the consent of
the Advisory Board.
-15-<PAGE>
Section 2.9 Exculpation of Liability. Neither the
General Partner, its agents (including agents of the General
Partner or agents of the Partnership who serve at the request of
the Partnership as either directors, officers or trustees of
another organization in which the Partnership has any interest as
a security holder, creditor or otherwise) nor officers, directors
or employees of the General Partner or the general partner of the
General Partner, any member of the Advisory Board or their
respective heirs, executors, administrators, successors or
assigns (the "Relevant Party") shall be liable to the Partnership
or the Limited Partners by reason of any act performed by the
Relevant Party if such act was performed by the Relevant Party:
(i) in good faith; (ii) in the reasonable belief that it was
acting in the best interests of the Partnership; and (iii) in a
manner reasonably believed by the Relevant Party to be within the
scope of the rights, powers, authorities and discretions
conferred on the Relevant Party by or pursuant to this Agreement,
the consent of the Limited Partners or by law. The Relevant
Party shall not be exculpated under the preceding sentence,
however, if it has committed gross negligence, willful
malfeasance, fraud or a material breach of its fiduciary duty to
the Partnership or the Limited Partners with respect to such act
or omission, or if such act or omission caused any of the Limited
Partners to be liable in excess of its Capital Commitment for the
liabilities of the Partnership.
Section 2.10 Indemnification.
(a) The Partnership, out of Partnership assets and not
out of the separate assets of any Partner, shall indemnify any
Relevant Party to the extent described below, against all
liabilities, losses and expenses, including, but not limited to,
amounts paid in satisfaction of judgments, in compromise
settlements (to the extent provided for in Section 2.10(c)), and
fines, penalties and counsel fees, reasonably incurred in
connection with the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which the Relevant Party
may be or may have been involved as a party or otherwise or with
which it or they may be or may have been threatened, while in
office or thereafter by reason of (A) being or having been a
Relevant Party, or acting on behalf of the Partnership, or
serving or having served at the request of the Partnership as
such director, officer or trustee of another organization, and
(B) any acts performed (or allegedly performed) in such capacity
that were performed:
(i) in good faith;
(ii) in the reasonable belief that the Relevant
Party was acting in the best interests of the Partnership
and the Limited Partners;
(iii) in a manner that was reasonably believed
by the Relevant Party to be within the scope of the rights,
powers, authorities or discretions conferred on it by or
-16-<PAGE>
pursuant to this Agreement, by the consent of the Limited
Partners or by law; and
(iv) with respect to any criminal proceeding, in a
manner reasonably believed by the Relevant Party to be
lawful.
The Relevant Party shall not be entitled to indemnification under
the preceding sentence, however, if such action is finally
adjudicated in any such action, suit or other proceeding, or
otherwise by a court of competent jurisdiction, to have been
grossly negligent, willfully malfeasant or fraudulent, or to
constitute a material breach by the Relevant Party of its
fiduciary duty to the Partnership or the Limited Partners, or to
have caused any of the Limited Partners to be liable in excess of
their Capital Commitments for the liabilities of the Partnership.
(b) Expenses, including counsel fees, so incurred by
the Relevant Party may be paid by the Partnership in advance of
the final disposition of any such action, suit or proceeding on
the condition that the amounts so paid shall be repaid to the
Partnership if it is ultimately determined that indemnification
of such expenses is not authorized under this Section 2.10. The
General Partner may, if it deems appropriate, require any person
for whom such expenses are paid in advance of final disposition
to deliver adequate security to the Partnership for his
obligation to repay such indemnification.
(c) As to any matter disposed of by a compromise
payment, pursuant to a consent decree or otherwise, no such
indemnification, either for said payment or for any other
expenses, shall be provided unless there has been obtained an
opinion in writing of independent legal counsel to the effect
that based on a recitation of relevant facts, the Relevant Party
would be entitled to indemnification under the standards set
forth in (a) above.
(d) The right of indemnification hereby provided shall
not be exclusive of or affect any other rights of indemnification
to which the Relevant Party may be entitled to from parties other
than the Partnership or the Limited Partners (in such Persons'
capacities as Limited Partners). In addition, the Relevant Party
shall use all reasonable efforts to obtain indemnification from
any source other than the Partnership from which it or they may
be entitled thereto, including without limitation, director and
officer indemnity insurance and corporate or other
indemnification provisions of entities in which the Partnership
shall have made Investments, before seeking indemnification from
the Partnership. The right of indemnification provided by this
Section 2.10 shall not be construed to increase the liability of
the Limited Partners as set forth in Section 1.4 or to require
that the General Partner make additional Capital Contributions to
satisfy any indemnification claim.
-17-<PAGE>
Section 2.11 Coordination with Other Managed Funds.
(a) The General Partner shall ensure that no other
investment fund, whether in corporate or partnership form, that
is advised or managed by AIC or an AIC Affiliate (a "Managed
Fund") shall make an Investment in the Securities of any entity
(excluding any Investment in an entity in which such Managed Fund
has previously invested (a "Follow-on Investment")) if such
Investment is within the Partnership's Charter, unless the
Partnership has been offered the opportunity to make an
Investment or Follow-On Investment (if the Partnership has
already made an initial Investment), as the case may be, in the
same entity, on the same terms and conditions, equal to at least
its Proportionate Share (as defined below) of the total combined
Investment (based on investment cost) in such entity by the
Partnership and any other Managed Funds. For the purposes of
this Section 2.11, the term "Proportionate Share" with respect to
a proposed Investment in a potential or current Portfolio Company
means a fraction, the numerator of which is the total Capital
Commitments of the Partners and the denominator of which is the
total Capital Commitments of the Partners plus the total capital
commitments of all other Managed Funds available for investment
in the region in which the Investment is to be made.
(b) Notwithstanding the provisions of Section 2.11(a),
the Partnership shall:
(i) not be entitled to make Investments in an
amount which is equal to its Proportionate Share in the
Securities of (A) any entity brought to the attention of AIC
by any investor in another Managed Fund to the extent that
such Managed Fund makes a disproportionate Investment in
such entity, (B) any entity that, acting on its own
initiative, requests that any Investment by the Partnership
be limited or prohibited, (C) any entity located outside the
United States, if a majority of the Advisory Board believes
that additional investments in international businesses are
not appropriate or (D) any entity in an international
venture capital market which in the opinion of the General
Partner is not consistent with the Charter or does not meet
the investment standards of the Partnership; and
(ii) have the right, prior to the right of other
Managed Funds, to make an Investment in the Securities of
any entity in such amount as is in the best interest of the
Partnership and the Limited Partners (subject only to the
limitations set forth in this Agreement), which Investment
may be more than its Proportionate Share of such Securities,
if such entity (i) was first brought to the attention of AIC
by any Limited Partner, or (ii) acting on its own
initiative, requests that all other Managed Funds be limited
or prohibited.
-18-<PAGE>
Article III - Capital Accounts; Distributions; Profits and
Losses
Section 3.1 Capital Contributions.
(a) Capital Contributions. On or prior to the date of
becoming a Limited Partner of the Partnership, each Limited
Partner will have contributed or will contribute to the capital
of the Partnership cash in the amount of ten percent (10%) of its
Capital Commitment or such lesser percentage as shall be
determined by the General Partner (which percentage shall be the
same for all Limited Partners). The balance of the Limited
Partners' Capital Commitments shall be due and payable in cash
installments at such times and in such amounts as the General
Partner shall determine in its reasonable discretion; provided,
however, that each such installment shall be in an amount
determined by the General Partner (which shall not be less than
five percent (5%) or greater than twenty-five percent (25%)
(which percentage shall be the same for each Limited Partner) of
each Limited Partner's Capital Commitment) and shall be payable
on not less than fifteen (15) days prior written notice from the
General Partner to the Limited Partners. No capital calls for
new Portfolio Investments will be made after the seventh
anniversary of the Final Closing Date. Notwithstanding any
provision hereof to the contrary, capital calls may be made after
the seventh anniversary of the Final Closing Date for the purpose
of making Follow-On Investments and as the General Partner may
deem necessary to satisfy existing or anticipated expenses of the
Partnership.
(b) If after written notification from the General
Partner, a Limited Partner does not make any payment required
pursuant to Section 3.1(a) (a "Defaulting Limited Partner"), a
second request for payment shall be made to such Defaulting
Limited Partner by the means set forth in Section 9.4. Until
fifteen (15) days after the mailing of such second notice, the
Defaulting Limited Partner may make a transfer of its Partnership
interest, subject, however, to the applicable provisions of
Article V below (including the requirement that such transfer
shall not be made without the prior written consent of the
General Partner) and subject to the further condition that the
transferee shall pay all amounts then due to be paid by the
transferor Limited Partner and shall agree to pay any unpaid
portion of the transferor Limited Partner's Capital Commitment
not yet due. If the full amount of the payment then due is not
received by the Partnership within fifteen (15) days after the
mailing of such second notice to the Defaulting Limited Partner,
the Partnership, by the General Partner, may take any of the
following actions, which are in addition to and not in limitation
of any other right or remedy which the Partnership may have:
(i) The Partnership may commence legal
proceedings against the Defaulting Limited Partner to
collect the due and unpaid amount plus the expenses of
collection, including attorneys' fees.
-19-<PAGE>
(ii) Upon notice to the Defaulting Limited
Partner, a designee of the General Partner may assume the
entire unpaid balance of the Capital Commitments of the
Defaulting Limited Partner and succeed to a fraction of the
interest of the Defaulting Limited Partner of which the
unpaid balance of its Capital Commitment is the numerator
and the total Capital Commitment of the Defaulting Limited
Partner is the denominator, and become a substitute Limited
Partner to the extent of such interest, provided that such
designee may not be the General Partner or an AIC Affiliate
without the consent of the Limited Partners representing
more than fifty percent (50%) of the Capital Contributions
of the Limited Partners. Further, any designee who assumes
the unpaid balance of the Capital Commitment of the
Defaulting Limited Partner pursuant to this Section
3.1(b)(ii) may, with the consent of the General Partner,
deliver to the Partnership an additional amount equal to the
lesser of (i) the Defaulting Limited Partners' Capital
Contribution, or (ii) the value of such Defaulting Limited
Partner's interest in the Partnership at the time of such
notice, as determined in good faith by the General Partner.
The additional amount so delivered (less such an amount,
which shall not exceed five percent (5%) of such additional
amount, as the General Partner may deem appropriate to cover
the costs incurred in connection with the default of the
Limited Partner) shall be tendered to the Defaulting Limited
Partner in cash. On the date of such tender such Defaulting
Limited Partner shall cease to be a Limited Partner or have
any further right in the Partnership, and the designee
delivering such additional amount shall become a Limited
Partner pursuant to Section 5.2 to the extent of the whole
interest of the Defaulting Limited Partner.
(iii) Upon notice to the Defaulting Limited
Partner, the Partnership may elect to cancel the interest of
the Defaulting Limited Partner in the Partnership, at which
time the interest of such Defaulting Limited Partner shall
revert and inure to the benefit of the Partnership.
In the event a Defaulting Limited Partner's interest reverts to
the Partnership pursuant to (iii) above, for purposes of this
Agreement (including, without limitation, the calculation of the
Management Fee) the aggregate Capital Commitments of the Limited
Partners shall be reduced by the unpaid Capital Commitment of the
Defaulting Limited Partner effective upon the date such
Defaulting Limited Partner's interest reverts to the Partnership.
In addition, the General Partner shall inform the Advisory Board
regarding the default prior to the delivery of the second notice
to the Defaulting Limited Partner. The General Partner shall
consult with the Advisory Board prior to instituting the remedy
described in (iii) above. If so recommended by the Advisory
Board, the Limited Partners representing a majority of the
combined Capital Contributions may modify the remedy described in
(iii) above.
-20-<PAGE>
(c) Notwithstanding (a) and (b) above, if (i) any
Limited Partner shall, on or before the date on which it would be
required to pay an installment pursuant to (a) above, deliver to
the General Partner an Opinion of Counsel pursuant to Section 4.1
regarding the Investment to be acquired using such Capital
Contribution, then such Limited Partner shall not be deemed to be
a Defaulting Limited Partner under this Section 3.1 as a result
of its failure to make such additional Capital Contribution to
the extent the amount not paid was to be used to acquire the
Conflicting Interest (as defined in Section 4.1) covered by such
Opinion of Counsel, and such Defaulting Limited Partner shall be
released from any further obligation under this Section 3.1 to
pay such amount of installment, and the provisions of Section
3.1(b) shall be inapplicable to such Partner with respect to such
amount. Thereafter for purposes of this Agreement (including,
without limitation, the calculation of the Management Fee) such
Partner's Capital Commitment shall be deemed to be reduced by the
amount of the Capital Commitment such Partner is relieved from
paying pursuant to this Section 3.1(c). After notice by a
Limited Partner that it desires to take advantage of the
foregoing provisions of this Section 3.1(c), the General Partner
shall notify such Limited Partner regarding the extent to which
its Capital Contribution would be used to acquire the Conflicting
Interest.
(d) Notwithstanding (a) and (b) above, if (i) any
Foundation Partner (as defined in Section 4.1(b)) shall, on or
before the date on which it would be required to pay an
installment pursuant to (a) above, deliver to the General Partner
an Opinion of Counsel to the effect that such Partner would, upon
paying such installment, be permitted to withdraw from the
Partnership pursuant to Section 4.1, or (ii) any such Foundation
Partner is in the process of withdrawing its interest in the
Partnership in accordance with Section 4.1, then such Limited
Partner shall be released from any further obligation under this
Section 3.1 to pay such installment, and the provisions of
Section 3.1(b) shall be inapplicable to such Limited Partner.
Thereafter for purposes of this Agreement such Limited Partner's
Capital Commitment shall be deemed to be the amount of such
Limited Partner's Capital Contributions.
(e) The aggregate of all Capital Contributions of the
Partners shall be, and are hereby agreed to be, available to the
Partnership to carry out the purposes and objectives of the
Partnership as set forth in Section 1.5.
Section 3.2 Capital Accounts. There shall be established
for each Partner as of the date of this Agreement a Capital
Account equal to the amount of such Partner's initial Capital
Contribution. Each Partner's Capital Account shall be adjusted
from time to time as of the date of any of the following events
by adding thereto (i) any additional Capital Contributions made
by such Partner and (ii) any Net Income allocated to such
Partner, and deducting therefrom (x) any Net Losses allocated to
such Partner, (y) any distributions made to such Partner and (z)
any Partnership expenses allocated to such Partner, including,
-21-<PAGE>
without limitation, any placement fees, finder's fees or similar
fees allocated to such Partner which may be payable to others in
connection with the investment by a Limited Partner in the
Partnership.
Section 3.3 Allocation of Net Income, Net Losses and
other Partnership Items. As of the end of each fiscal year of
the Partnership (or more frequently as determined by the General
Partner) and upon dissolution of the Partnership pursuant to
Article VI, the Capital Account of each Partner shall be credited
or charged, as the case may be, with the Net Income or Net Losses
of the Partnership, and other Partnership items, as follows and
in the following order of priority (all allocations to the
Limited Partners as a class shall, to the extent possible, be
made to each Limited Partner in accordance with the ratio which
such Limited Partner's Capital Contributions bears to the
aggregate Capital Contributions of all Limited Partners):
(a) Allocation of Net Losses.
(i) First, in the event Net Income shall have
been allocated to the General Partner pursuant to Section
3.3(b)(iii)(A) hereof for prior fiscal years, Net Losses for
any fiscal year in an amount which when aggregated with Net
Losses allocated to the Partnership pursuant to this Section
3.3(a)(i) for all prior fiscal years does not exceed the
aggregate amount of Net Income allocated to the Partners
pursuant to Section 3.3(b)(iii) hereof for all fiscal years
shall be allocated as follows:
(A) to the General Partner in an amount that
causes the General Partner to have been allocated
aggregate Net Income pursuant to Section
3.3(b)(iii)(A) when reduced by aggregate Net Losses
allocated pursuant to this Section 3.3(a)(i)(A) equal
to twenty percent (20%) of the excess of (A) the
aggregate Net Gain realized by the Partnership for each
prior and current fiscal year, over (B) the aggregate
Net Loss realized by the Partnership for each prior and
current fiscal year; and
(B) the remainder one-hundred percent (100%)
to the Limited Partners.
(ii) Second, Net Losses for any fiscal year shall
be allocated ninety-nine percent (99%) to the Limited
Partners and one percent (1%) to the General Partner until
the Capital Accounts of all Limited Partners shall be equal
to zero.
(iii) Third, any remaining Net Losses for any
fiscal year shall be allocated one hundred percent (100%) to
the General Partner.
-22-<PAGE>
(b) Allocation of Net Income.
(i) First, in the event and to the extent that,
Net Losses shall have been allocated one hundred percent
(100%) to the General Partner pursuant to Section
3.3(a)(iii) hereof for prior fiscal years, Net Income shall
be allocated one hundred percent (100%) to the General
Partner until the aggregate amount of Net Income allocated
to the General Partner pursuant to this Section 3.3(b)(i)
for all fiscal years shall equal the aggregate amount of Net
Losses allocated to the General Partner pursuant to Section
3.3(a)(iii) hereof for all fiscal years.
(ii) Second, in the event, and to the extent that,
Net Losses shall have been allocated ninety-nine percent
(99%) to the Limited Partners and one percent (1%) to the
General Partner pursuant to Section 3.3(a)(ii) hereof for
prior fiscal years, Net Income shall be allocated
ninety-nine percent (99%) to the Limited Partners and one
percent (1%) to the General Partner until the aggregate
amount of Net Income allocated to the Limited Partners
pursuant to this Section 3.3(b)(ii) for all fiscal years
shall equal the aggregate amount of Net Losses allocated to
the Limited Partners pursuant to Section 3.3(a)(ii) hereof
for all fiscal years.
(iii) Third, any remaining Net Income shall be
allocated as follows:
(A) to the General Partner in an amount that
causes the General Partner to have been allocated
aggregate Net Income pursuant to this Section
3.3(b)(iii)(A) when reduced by aggregate Net Losses
allocated pursuant to Section 3.3(a)(i)(A) equal to
twenty percent (20%) of the excess of (A) the aggregate
Net Gain realized by the Partnership for each prior and
current fiscal year, over (B) the aggregate Net Loss
realized by the Partnership for each prior and current
fiscal year; and
(B) the remainder one-hundred percent (100%)
to the Limited Partners.
Section 3.4 Distributions to Partners.
(a) Distributions of Non-Portfolio Income. The
Partnership will distribute cash proceeds attributable to
Investments (other than proceeds attributable to the realization
of Portfolio Investments or proceeds attributable to Short-Term
Investments or Non-Portfolio Investments which are to be
reinvested in accordance with Section 2.4(d)) after payment of
all Partnership expenses not directly attributable to the
realization of Portfolio Investments for each fiscal year to the
Partners in accordance with Section 3.4(c) annually within three
(3) months of the end of such fiscal year; provided that any
amount which in the opinion of the General Partner cannot
-23-<PAGE>
conveniently or equitably be distributed within such time may be
carried forward and distributed in the ensuing fiscal year.
(b) Other Distributions. Subject to the other
provisions of this Agreement, the General Partner shall
distribute to the Partners in accordance with Section 3.4(c) all
amounts attributable to the realization of a Portfolio Investment
as promptly as is practicable after such realization occurs.
(c) Priority of Distributions. Partnership
Distributions described in Section 3.4(a) shall be distributed
100% to the Limited Partners. Partnership Distributions
described in Section 3.4(b) shall be distributed to and among the
Partners in the following order of priority:
(i) First, one-hundred percent (100%) to the
Limited Partners until the aggregate amount of Partnership
Distributions described in Section 3.4(b) distributed to the
Limited Partners equals the aggregate Capital Contributions
made by them; provided, however, that for purposes of this
subsection (c), prior to the seventh anniversary of the
Final Closing Date, the Limited Partners shall be deemed to
have made Capital Contributions equal to the full amount of
their Capital Commitments;
(ii) Second, to the General Partner until the
aggregate amount of Partnership Distributions described in
Section 3.4(b) distributed to the General Partner equals
twenty percent (20%) of the excess of (A) the aggregate Net
Gain realized by the Partnership for each prior and current
fiscal year, over (B) the aggregate Net Loss realized by the
Partnership for each prior and current fiscal year (which
Net Gain or Net Loss for the current fiscal year shall be
computed as if such year ended on the date of such
distribution); and
(iii) Thereafter, one-hundred percent (100%)
to the Limited Partners.
The General Partner, in its discretion, may make Partnership
Distributions to itself in any fiscal year (beginning with the
second fiscal year) prior to making Partnership Distributions in
accordance with the priorities set forth in (i) above in an
amount equal to (or less than) the excess of:
(A) the maximum combined U.S. federal and
the Commonwealth of Massachusetts income tax payable by
the General Partner (assuming for this purpose that the
General Partner is an individual resident in
Massachusetts) on account of the income that was
allocated to the General Partner for U.S. federal
income tax purposes in the immediately preceding fiscal
year of the Partnership, over
(B) any amounts distributed (after the
application of the following sentence) to the General
-24-<PAGE>
Partner pursuant to (ii) above in such immediately
preceding fiscal year.
Any amounts distributed to the General Partner pursuant to the
immediately preceding sentence shall be treated as an advance
from the Partnership to the General Partner and shall offset the
Partnership Distributions to be made to the General Partner
pursuant to (ii) above until such advance is repaid in full. Any
amounts not so repaid upon the liquidation of the Partnership
shall be contributed to the Partnership in cash by the General
Partner to be distributed in accordance with the provisions of
(i) and/or (ii) above.
(d) Return of Partnership Distributions by the General
Partner. If the Limited Partners make Capital Contributions
after the date on which one or more Partnership Distributions are
made in accordance with Section 3.4(c)(ii), future Partnership
Distributions shall be made by first applying the priority set
forth in Section 3.4(c)(i). If upon the liquidation of the
Partnership it is determined that the General Partner was
distributed in the aggregate more than twenty percent (20%) of
the amount by which (A) the aggregate Net Gain realized by the
Partnership exceeded (B) the aggregate Net Loss realized by the
Partnership, the General Partner shall be required to contribute
to the Partnership, in cash, an amount equal to the amount of
such excess, which cash shall then be distributed to the Partners
in accordance with the priorities set forth in Section 3.4(c)(i).
(e) Delinquent Capital Contributions. No part of any
distribution shall be paid pursuant to this Section 3.4 to any
Limited Partner from which there is due and owing to the
Partnership, at the time of such distribution, any amount
required to be paid to the Partnership pursuant to the provisions
of Section 3.1. Any such distribution shall be paid to such
Limited Partner or a designee or transferee when all such amounts
have been paid in full.
(f) Compliance with Code Section 704(b). The
allocation and distribution provisions contained in this
Agreement are intended to comply with Code Section 704(b) and the
Treasury Regulations promulgated thereunder (including satisfying
the "alternate test for economic effect") and should be
interpreted and applied in a manner consistent therewith.
Section 3.5 Distributions In Kind.
(a) Where any Portfolio Investments are listed, quoted
or dealt in on a recognized stock exchange or are otherwise
capable of being sold or purchased in a recognized
over-the-counter or unlisted securities market in a manner which,
in the General Partner's opinion, provides a suitable market for
the sale by the Partners of such Portfolio Investments, with the
consent of the Advisory Board the General Partner may (but is not
obliged to) distribute the same in kind, provided that in no
event shall a distribution in kind be made to a Limited Partner
who is prohibited by applicable law or regulation from directly
-25-<PAGE>
holding or selling such security to be distributed. Any such
distribution shall be made among the Partners in accordance with
the provisions of Section 3.4 as if an amount of cash equal to
the fair market value of such Portfolio Investments were being
distributed, and the Capital Accounts of the Partners shall be
adjusted to reflect the disposition of such Portfolio Investments
at their fair market value on the date of distribution. Any
Portfolio Investments which are not listed, quoted or dealt in on
a recognized stock exchange or which are not otherwise capable of
being sold or purchased in a recognized over-the-counter or
unlisted securities market in the above manner may (at the
discretion of the General Partner and with the consent of the
Advisory Board) be distributed among the Partners in accordance
with the provisions of Section 3.4 but only on the dissolution,
liquidation or termination of the Partnership.
(b) Whenever more than one type of Portfolio
Investment is being distributed in kind in a single distribution
or whenever more than one class of Portfolio Investment in a
Portfolio Company (or a portion of a class of such Portfolio
Investment having a tax basis per share or unit different from
other portions of such class) are distributed in kind by the
Partnership, each Partner shall receive its ratable portion of
each type, class or portion of such class of Portfolio Investment
distributed in kind, provided that the General Partner shall have
the power to make such arrangements as it deems appropriate in
the case of Portfolio Investments becoming distributable in
fractions, whether by the distribution of balancing amounts in
cash or otherwise and to make arrangements to pay the Management
Fee and Partnership expenses from the proceeds of the realization
of Portfolio Investments. Further, in the event that any taxes,
duties or other expenses become payable by the Partnership
because of the distribution of Portfolio Investments in kind to a
particular Partner, the General Partner may, where it deems
appropriate, specifically charge such amounts to the Capital
Account of such Partner.
(c) In the event the Partnership distributes a
Portfolio Investment in kind, any Limited Partner may elect to
have the General Partner, or an affiliate, manage and dispose of
the distributed Portfolio Investment of such Limited Partner, so
that the Limited Partner will receive cash within a reasonable
period of time. The General Partner or its affiliate shall be
entitled to receive from each electing Limited Partner an annual
management fee equal to two and one-half percent (2.5%) of the
acquisition cost of such distributed Portfolio Investment or such
other fee as shall be agreed upon between them.
Section 3.6 Re-allocation of Carried Interest.
(a) If at any time:
(i) the General Partner is removed pursuant to
Section 6.3(e)(iii); or
-26-<PAGE>
(ii) the General Partner resigns as general
partner of the Partnership, or withdraws or retires from the
Partnership, or voluntarily terminates its existence in each
case under the circumstances permitted in this Agreement
(other than in connection with a transfer to a new General
Partner as permitted in Section 5.1(b) or a dissolution of
the Partnership other than pursuant to Section 6.3(d));
then the following provisions with respect to Section 3.4(c)
shall apply with regard to such former General Partner:
(1) The Partnership interest of the former
General Partner shall be transformed to that of a special
limited partner, which shall be entitled to receive
Partnership Distributions as described in this Section 3.6
but which shall not otherwise participate in the management
of the Partnership or in the calculation of any approvals or
consents of the Limited Partners required by this Agreement.
(2) The former General Partner's right to receive
allocations and Partnership Distributions with respect to
any Limited Partner interest it may hold shall not be
affected.
(3) In addition, the former General Partner shall
be entitled to receive a portion of the "carried interest"
payable to the General Partner pursuant to Section
3.4(c)(ii) (which "carried interest" shall be equal to the
General Partner's right to receive Partnership Distributions
pursuant to Section 3.4(c)(ii)), which when added to the
amounts of the carried interest previously received by the
former General Partner equals:
(A) the aggregate amount of carried interest
paid to the former General Partner and any new General
Partner, times
(B) a fraction, the numerator of which is
the aggregate acquisition cost of all Portfolio
Investments acquired prior to the date on which the
General Partner became a special limited partner, and
the denominator of which is the aggregate acquisition
cost of all Portfolio Investments acquired prior to the
date of the Partnership Distribution with respect to
which the carried interest is being calculated, times
(C) a percentage, which on the first
anniversary of the Final Closing Date shall equal
twenty-five percent (25%) and which shall be increased
by an additional twenty-five percent (25%) on each
succeeding anniversary of the Final Closing Date (so
that on and after the fourth anniversary the percentage
shall equal one hundred percent (100%)).
-27-<PAGE>
(4) The former General Partner's right to retain
any Partnership Distributions made to it prior to the date
of such removal or other event shall not be affected.
(b) If at any time:
(i) the General Partner is removed pursuant to
Section 6.3(e)(i) or (ii); or
(ii) the General Partner resigns as general
partner of the Partnership, or withdraws or retires from the
Partnership or voluntarily terminates its existence in each
case in breach of this Agreement; or
(iii) the Partnership Interest of the General
Partner is disposed of in breach of this Agreement;
then the following provisions with respect to Section 3.4(c)
shall apply:
(1) The former General Partner shall not be
entitled to receive Partnership Distributions subsequent to
the date of such removal or other event.
(2) The former General Partner's right to retain
any Partnership Distributions made to it prior to the date
of such removal or other event shall not be affected.
(3) The former General Partner's rights to
receive allocations and Partnership Distributions with
respect to any Limited Partner interest it may hold shall
not be affected.
Article IV - Withdrawal of Profits, Gains or Capital
Section 4.1 Withdrawal by Limited Partners.
(a) Notwithstanding any provision contained herein to
the contrary, if a Limited Partner delivers to the General
Partner an Opinion of Counsel to the effect that it is more
likely than not that an Investment (a "Conflicting Interest") by
the Partnership would cause such Limited Partner (the "Conflicted
Partner") to violate any law, regulation, license, permit or
decree or order of a court of competent jurisdiction (including
any provisions of ERISA) or that, if such Partner is a tax-exempt
organization, it is more likely than not that such Limited
Partner would lose its tax-exempt status, then the following
provisions shall apply:
(i) the General Partner shall use its best
efforts, consistent with standards of commercial
reasonableness and its fiduciary duty to the other Limited
Partners, to cause the Investment to cease to constitute a
Conflicting Interest with respect to such Conflicted
Partner;
-28-<PAGE>
(ii) if the General Partner cannot pursuant to (i)
above cause the Investment to cease to constitute a
Conflicting Interest with respect to the Conflicted Partner,
the Conflicted Partner shall offer to assign all its
interest in the Conflicting Interest (including the relevant
portion of the Conflicted Partner's Capital Account and all
allocations and distributions attributable to the
Conflicting Interest) to the other Limited Partners (the
"Non-Conflicted Partners"), pro rata based on their relative
Capital Commitments, at a price and on such terms as are
specified by the Conflicted Partner in a written notice
given by the Conflicted Partner to the Non-Conflicted
Partners. Each Non-Conflicted Partner may accept all (but
not less than all) of the interest in the Conflicting
Interest so offered to it by notifying the General Partner
of such acceptance within five (5) days of receiving the
offer notice from the Conflicted Partner. If any
Non-Conflicted Partner does not exercise its rights to
purchase its proportionate share of the Conflicted Partner's
interest in the Conflicting Interest, the other
Non-Conflicted Partners shall have the right to purchase
such remaining portion in accordance with their relative
Capital Commitments or in such other portion as they may
mutually agree;
(iii) if the Non-Conflicted Partners fail to
purchase all of the Conflicted Partner's interest in the
Conflicting Interest, the Conflicted Partner may, subject to
the provisions of this Agreement, assign the portion of such
interest that is not purchased by the Non-Conflicted
Partners to any third party at a price and on such terms no
more favorable than the price and terms offered to the
Non-Conflicted Partners, which terms shall attempt to
allocate to such third party the Conflicted Partner's
economic interest in the Conflicting Interest, taking into
account the fact that such economic interest is dependent
upon the performance of other Investments; and
(iv) if the Conflicting Interest is not eliminated
or the Conflicted Partner cannot dispose of its entire
interest pursuant to the terms of (i), (ii) and (iii) above,
the Non-Conflicted Partners shall each be entitled to
purchase a proportionate share, based on their relative
Capital Commitments, of the Conflicted Partner's remaining
interest in the Conflicting Interest by delivering to the
Conflicted Partner a note in the principal amount of the
Conflicted Partner's Capital Contributions that are
attributable to the portion of the Conflicting Interest
being purchased; provided, however, that the purchase price
will be reduced to the purchasing Partner's proportionate
share of the book value of the Conflicting Interest if the
Investment in question has been written down on the books of
the Partnership in accordance with the terms of this
Agreement and the Partnership's normal accounting practices.
Interest shall accrue on such note at a rate equal to two
hundred (200) basis points over the rate then being paid on
-29-<PAGE>
U.S. Treasury obligations having a maturity date of five (5)
years and a principal amount approximately equal to that of
such note. Principal and accrued interest shall be payable
on the note only if and to the extent that the obligor
Partner receives distributions or payments attributable
(directly or indirectly) to the portion of the Conflicting
Interest it purchased. Further, such note shall be
nonrecourse to the purchasing Non-Conflicted Partner and
shall be secured only by distributions or payments
attributable (directly or indirectly) to the portion of the
Conflicting Interest it purchased. If a Non-Conflicted
Partner declines to purchase its proportionate share of the
Conflicting Interest on the terms and conditions set forth
in this subparagraph (a), such portion may be acquired pro
rata (based on their relative Capital Commitments) by the
other Non-Conflicted Partners.
(b) Notwithstanding any provision contained herein to
the contrary, each Limited Partner that is a private foundation
within the meaning of Section 509 of the Code (a "Foundation
Partner") may elect to withdraw from the Partnership, if (i) the
Foundation Partner shall deliver to the General Partner an
Opinion of Counsel to the effect that such withdrawal is
necessary in order for the Foundation Partner to avoid (x) excise
taxes imposed by Sections 4941, 4943, 4944 or 4945 of the Code or
(y) a material violation of, or a material breach of the
fiduciary duties of its trustees under, any federal or state law
applicable to private foundations or any statute or regulation
adopted thereunder by any agency, commission or authority having
jurisdiction, and (ii) the procedures set forth in Section 5.4
cannot be employed to avoid or cure such excise tax, violation or
breach, whether due to the absence of a Specified Investment (as
defined herein) or otherwise, and withdrawal from the Partnership
is the only practicable way of avoiding or curing such excise
tax, violation or breach; provided, however, that the Foundation
Partner's inability to locate a person willing to become a
Special Limited Partner shall not entitle it to withdraw pursuant
to this Section 4.1 unless such Foundation Partner shall have
exerted its best efforts to locate a suitable Special Limited
Partner for at least 45 days. Following the expiration of such
45-day period, the General Partner shall have an additional 44
days in which to locate a suitable Special Limited Partner, to
whom the withdrawing Foundation Partner shall be obligated to
assign its interest in the Specified Investment for consideration
not to exceed the initial balance of such Special Limited
Partner's Special Capital Account, determined pursuant to
Section 5.4(b).
(c) In the event of the issuance of an Opinion of
Counsel under Section 4.1(b), the General Partner shall send a
copy of such Opinion of Counsel to all the Partners, together
with the Foundation Partner's election to withdraw. Thereupon,
unless within one hundred twenty (120) days after the issuance of
such Opinion of Counsel and written notice of election the
General Partner or the Foundation Partner is able to eliminate
the necessity for withdrawal to the reasonable satisfaction of
-30-<PAGE>
the General Partner and such Foundation Partner, whether by
correction of the condition giving rise to the necessity of such
withdrawal, by amendment to this Agreement or otherwise (and the
General Partner or the Foundation Partner, as the case may be,
shall use their best efforts to so eliminate the necessity for
such withdrawal), such Foundation Partner shall withdraw its
entire interest in the Partnership. Such withdrawal shall be
effective as of the earlier of (i) the last day of the fiscal
quarter of the Partnership during which the election for
withdrawal is made, or (ii) such date for withdrawal as may be
recommended in the Opinion of Counsel referred to above in order
to avoid the imposition of penalties imposed by Sections 4941,
4943, 4944 or 4945 of the Code (but in no event shall such date
be earlier than the 89th day after the event giving rise to the
Foundation Partner's right to withdraw), unless the Foundation
Partner and the General Partner otherwise agree.
(d) Except as otherwise provided in this Section 4.1
and in Section 9.10 hereof, no Limited Partner shall be permitted
to withdraw profits, gains or capital from the Partnership
without the approval of the General Partner, which approval may
be withheld if the General Partner does not believe that such
withdrawal is in the best interests of the other Limited Partners
(whether because of the cash position of the Partnership, the
undesirability of liquidating any of the Investments of the
Partnership, or otherwise). The following provisions shall
govern with respect to any withdrawals approved by the General
Partner pursuant to this Section 4.1(d):
(i) No such withdrawal shall be made except as of
the last day of the fiscal year of the Partnership unless
another date is selected by the General Partner;
(ii) Partial withdrawals of profits, gains or
capital with respect to a Limited Partner's Capital
Commitment shall not be permitted and a Limited Partner
desiring to withdraw must withdraw its entire interest
relating to its Capital Commitment; and
(iii) The Limited Partner desiring to withdraw
must notify the General Partner in writing at least one
hundred twenty (120) days prior to the close of the fiscal
year in which it wishes to effect its withdrawal.
(e) The General Partner may, to accommodate a request
or election for withdrawal by a Limited Partner, attempt to
obtain a purchaser of the whole or a part of such Limited
Partner's interest.
Section 4.2 Legal Representatives. In the event any
Limited Partner shall die or shall be declared incompetent or
insane or shall be adjudicated a bankrupt, or in the event of the
winding up or liquidation of a Limited Partner, the legal
representative of such Limited Partner shall upon written notice
to the General Partner of the happening of any of such event(s)
become an assignee of such Limited Partner's interest, subject to
-31-<PAGE>
all of the terms of this Agreement as then in effect. Such legal
representative may not terminate any interest in the Partnership
and withdraw capital, profits or gains except in accordance with
Section 4.1. If the General Partner does not approve withdrawal
of the interest of such legal representative, the General Partner
will use its best efforts, without legal obligation, to find
another Person, suitable to the General Partner, willing to
assume the Partnership interest of such legal representative.
Section 4.3 Liquidating Share.
(a) In the event any Limited Partner shall withdraw or
be required to withdraw in accordance with the provisions of
Sections 4.1 or 9.10, there shall be distributed to such Limited
Partner or its legal representative within ninety (90) days after
the last day of the fiscal year of the Partnership in which such
withdrawal occurred, an amount equal to the balance of such
Limited Partner's Capital Account as of the end of such fiscal
year of the Partnership or, if withdrawal occurs other than at
the end of a fiscal year, the date of such withdrawal; provided,
however, that except in the case of a dissolution of the
Partnership, the payment to be made pursuant to this Section 4.3
to such Limited Partner shall be subject to reduction in such
amount not in excess of five percent (5%) of such payment as the
General Partner may determine to be necessary to cover the costs
of selling Securities or other property in order to effect such
payment.
(b) The Partnership may, in the discretion of the
General Partner, subject to the limitations set forth below, make
any distribution or payment pursuant to this Section 4.3 in cash,
in Securities or in the form of a promissory note of the
Partnership maturing upon the dissolution of the Partnership and
bearing interest at the minimum rate necessary to avoid the
imputation of interest under the Code. However, unless a Limited
Partner withdrawing pursuant to Section 4.1 otherwise elects, no
distribution of Securities, or of any interest therein, shall be
made to such Limited Partner if the effect of such distribution,
as set forth in an Opinion of Counsel, would be to continue the
situation or circumstance giving rise to the necessity for such
Limited Partner's withdrawal.
(c) If any payment pursuant to this Section 4.3 is
made in whole or in part by delivery of a promissory note of the
Partnership, such note shall be payable on the same terms as the
note described in Section 4.1(a)(iv).
Section 4.4 Cessation of Participation. Subject to
Section 4.3(b), from and after the date of withdrawal of a
Limited Partner from the Partnership under this Article IV, no
interest shall be payable on its interest in the Partnership to
the date of payout.
Article V - Transfer of Partnership Interests
Section 5.1 Assignability of Interests.
-32-<PAGE>
(a) Subject to the provisions of Sections 4.2 and
5.1(c) hereof, the interest of a Limited Partner shall not be
assignable without the prior written consent of the General
Partner. No assignment shall be binding upon the Partnership
until the General Partner receives an executed copy of such
assignment in form and substance satisfactory to the General
Partner. The assignee of such interest may become a substituted
Limited Partner only upon the terms and conditions of Section
5.2.
(b) The interest of the General Partner shall not be
assignable; provided, however, that, subject to compliance with
Section 2.1(b), such interest may be assigned to a successor to
all or substantially all of the business of the General Partner
or the general partner of the General Partner, upon (i) the
execution by the General Partner of a written assignment, the
execution by the successor of this Agreement and the written
assumption by the successor of the obligations of the General
Partner hereunder, and (ii) the receipt by the Partnership of an
Opinion of Counsel that such assignment and assumption will not
result in the Partnership being classified as an association or
otherwise taxable as a corporation for United States Federal
income tax purposes. In the event of such assignment, the
successor shall become the general partner hereunder and the
predecessor and successor General Partner shall cause the
execution of any necessary papers including, without limitation,
an amendment to the Certificate of Limited Partnership to record
the substitution of the successor as general partner. The
General Partner shall notify the Advisory Board prior to any such
proposed assignment of the General Partner's interest and shall
notify the Limited Partners within seven (7) days of any such
assignment.
(c) Sections 5.1(a) and 5.2 notwithstanding, a Limited
Partner may assign its interest to and substitute as a Limited
Partner in its place and stead any corporation or other entity
(A) which then owns directly or indirectly Voting Control of the
Limited Partner, or (B) of which the Limited Partner then owns
directly or indirectly Voting Control, or (C) of which a
corporation described in (A) then owns directly or indirectly
Voting Control, or (D) which is an entity controlled by,
controlling or under common control with any assigning Limited
Partner or in the case of assignment by a trustee of an employee
benefit plan (as defined in ERISA) or trust relating thereto, to
a successor fiduciary thereof, or (E) subject to the consent of
the General Partner, which consent shall not be unreasonably
withheld, to a member of the Edison Electric Institute
(including, for this purpose any entity controlling, controlled
by or under common control with such member or any employee
benefit plan sponsored by such member or such affiliate of such
member); provided, however, that such assignment does not
increase the number of persons who beneficially own interests in
the Partnership for purposes of determining whether the
partnership is an "investment company" under the Investment
Company Act of 1940, as amended; and provided further, however,
that no such transfer may be made if the General Partner, based
-33-<PAGE>
upon an Opinion of Counsel, shall determine that it might result
in a violation of any law or result in the Partnership being
classified as an association or otherwise taxable as a
corporation for United States Federal income tax purposes.
Section 5.2 Substituted Limited Partners. Subject to the
provisions of Section 5.1(c), no Limited Partner shall have the
right to substitute an assignee as a Limited Partner in its
place. The General Partner shall have the power, in its
discretion, to admit as a substituted Limited Partner any Person
acquiring a partnership interest by assignment from a Limited
Partner. The admission of an assignee as a substituted Limited
Partner shall be conditioned upon the assignee's written
assumption of all obligations of the assigning Limited Partner
and execution of this Agreement as a Limited Partner. Upon
acceptance of a substituted Limited Partner, the General Partner
shall forthwith amend any necessary papers to show the
substitution of such assignee in place of the assigning Limited
Partner. The General Partner's failure or refusal to admit an
assignee as a substituted Limited Partner shall not affect the
right of such assignee to receive the share of profits or other
distribution or compensation to which its assignor would
otherwise be entitled.
Section 5.3 Obligation of Assignee. Any assignee,
irrespective of whether such assignee has accepted and adopted in
writing the terms and provisions of this Agreement, shall be
deemed by the acceptance of such assignment to have agreed to be
subject to the terms and provisions of this Agreement in the same
manner as its assignor.
Section 5.4 Special Limited Partners.
(a) Notwithstanding any provision contained herein to
the contrary, a Foundation Partner may elect to assign a portion
of its interest to a "Special Limited Partner" (as herein
defined) in the manner set forth below, if such Foundation
Partner shall obtain an Opinion of Counsel to the effect that
such assignment is necessary in order for the Foundation Partner
to avoid excise taxes imposed by Sections 4941, 4943, 4944 or
4945 of the Code, and such Foundation Partner shall specify the
particular Partnership investment giving rise to the potential
excise tax liability (the "Specified Investment"). The General
Partner shall cooperate with and assist the Foundation Partner,
with no legal obligation, in locating a person, who may be a
Partner willing to become a Special Limited Partner of the
Partnership as set forth herein, but the Foundation Partner shall
be ultimately responsible for locating such a person.
(b) A Special Limited Partner of the Partnership shall
succeed to the assigning Foundation Partner's share of the
Specified Investment and, on the date of its admission to the
Partnership, shall have established on its behalf a Special
Capital Account in the amount of the assigning Foundation
Partner's share of the Partnership's original investment in the
Specified Investment, increased by all allocations of Net Income
-34-<PAGE>
relating to the Specified Investment, and reduced by all
(i) allocations of Net Losses and (ii) distributions relating to
the Specified Investment. On such date the assigning Foundation
Partner's Capital Account shall be reduced by an amount equal to
the initial balance of the Special Limited Partner's Special
Capital Account and thereafter all allocations of the Foundation
Partner's share of all Net Income or Net Losses and all
distributions relating to the Specified Investment shall be made
or distributed to the Special Limited Partner and not to the
assigning Foundation Partner.
(c) The following additional conditions shall be met
before an assignment to a Special Limited Partner shall become
effective and such Special Limited Partner shall be admitted to
the Partnership:
(i) the assignment shall not violate the
registration requirements of the Securities Act of 1933, as
amended, or the securities laws of any applicable
jurisdiction;
(ii) the General Partner shall have received
an executed copy of the assignment, in form and substance
satisfactory to the General Partner; and
(iii) the General Partner shall have
received the proposed Special Limited Partner's written
assumption of the obligations of the assigning Foundation
Partner, to the extent applicable, and the proposed Limited
Partner shall have executed this Agreement as a Special
Limited Partner having the rights and obligations set forth
in this Section 5.4.
(d) A Special Limited Partner admitted to the
Partnership pursuant to this Section 5.4 shall have all of the
rights and obligations of a Limited Partner of the Partnership
under this Agreement and the Delaware Revised Uniform Limited
Partnership Act, to the extent applicable, until such time as the
Partnership shall cease to have any interest in the Specified
Investment. Thereupon the General Partner shall, with respect to
the Special Limited Partner and to the extent applicable, follow
the procedures set forth in Sections 6.4 and 6.5, as though the
Specified Investment represented the sole assets of the
Partnership. Following liquidation of the Partnership's interest
in the Specified Investment with respect to which a Special
Limited Partner was admitted to the Partnership, such Special
Limited Partner shall have no further interest in the
Partnership, other than the right to receive any distribution
upon liquidation to which it may be entitled under Section 6.5
and this Section 5.4.
Section 5.5 Prohibition Against Public Trading. Each
Limited Partner hereby covenants and agrees with the Partnership
for the benefit of the Partnership and all Partners that (a) the
Limited Partner is not currently making a market in the Limited
Partner's Partnership Interest, (b) the Limited Partner will not
-35-<PAGE>
transfer its Partnership interest on an established securities
market or a secondary market (or the substantial equivalent
thereof) within the meaning of Code Sections 469(k)(2) and
7704(b) (and any Treasury Regulations, revenue rulings, or other
official pronouncement of the Internal Revenue Service of the
Treasury Department that may be promulgated or published
thereunder), (c) the Limited Partner is not currently structured
as a pass-through entity (i.e., a partnership, S corporation or
grantor trust) and will not transfer its Partnership interest to
such an entity, and (d) the Limited Partner will not subdivide
its interest in the Partnership for resale into a Partnership
interest the initial offering price of which would have been less
than $20,000. The General Partner may (but is not required to)
waive any of the above restrictions if, in its reasonable
judgment, such waiver will not cause any adverse consequences to
the Partnership or the Partners.
Article VI - Duration and Liquidation of Partnership
Section 6.1 Duration.
(a) Subject to Section 6.3, the Partnership shall
continue until ten (10) years from the date of this Agreement;
provided, however, that with the written consent of the General
Partner and Limited Partners representing at least sixty-six and
two-thirds percent (66 2/3%) of the combined Capital
Contributions of all the Limited Partners,
(i) the Partnership may be extended for such
period or periods not in excess of two (2) years in the
aggregate as may be necessary to facilitate the realization
of Investments; or
(ii) the Partnership may be dissolved at any time
after its first full fiscal year.
Section 6.2 Withdrawal of Limited Partner. If any
Limited Partner shall withdraw, die, be declared incompetent or
insane, or be adjudicated as bankrupt, or in the event of the
winding up or liquidation of a Limited Partner, such event shall
not cause the dissolution or liquidation of the Partnership, and
the Partnership shall continue until dissolved pursuant to
Section 6.1 or Section 6.3.
Section 6.3 Termination of the Partnership; Withdrawal
and Removal of General Partner.
(a) Without prior consent by Limited Partners
representing seventy-five percent (75%) of the combined Capital
Contributions of all Limited Partners and subject to appointing a
new Person to act as General Partner of the Partnership who shall
be willing to serve as such and who shall have complied with the
provisions of Section 5.1, the General Partner may not resign as
General Partner of the Partnership or withdraw or retire from the
Partnership or voluntarily terminate its existence; provided,
however, that the General Partner may assign its interest in the
-36-<PAGE>
Partnership and withdraw as the general partner pursuant to
Section 5.1(b).
(b) If the General Partner determines in its
reasonable discretion (i) based on an Opinion of Counsel, that
due to a change in applicable laws, rules or regulations, it is
illegal or (ii) with the approval of the Advisory Board, that it
is no longer in the best interests of the Limited Partners to
continue the Partnership, then the Partnership shall dissolve
upon one hundred and eighty (180) days prior written notice from
the General Partner to the Limited Partners, subject to the right
of the Limited Partners to continue the Partnership and elect a
new General Partner pursuant to Section 6.3(c) below.
(c) Unless the Limited Partners shall have determined
to continue the Partnership as provided in the second sentence of
this Section 6.3(c), the Partnership shall dissolve on the 180th
day after any of the following events:
(i) the giving of the notice provided for in
Section 6.3(b);
(ii) the filing by the General Partner or the
Partnership of a petition under the United States Bankruptcy
Code; or
(iii) the running of sixty (60) days after the
filing by another person against the General Partner of a
petition under the United States Bankruptcy Code which
petition is not dismissed within such sixty (60) day period.
If, following the occurrence of any of the events specified in
(i)-(iii) above, Limited Partners representing in excess of fifty
percent (50%) of the combined Capital Contributions of all
Limited Partners determine in a writing executed within such one
hundred and eighty (180) day period to continue the Partnership
and elect a new General Partner, the Partnership shall not
dissolve as provided in the first sentence of this Section 6.3(c)
but shall continue in existence as though no such decision to
dissolve or filing had occurred, except that the new General
Partner shall be substituted for the former General Partner. Any
Limited Partner who does not consent to such continuation shall
have the right to withdraw by giving notice within ninety (90)
days after having been notified of the continuation of the
Partnership, and shall be paid in the manner set forth in Section
4.3 within ninety (90) days after giving such notice.
(d) The Partnership shall dissolve on the 90th day
after the General Partner resigns as general partner of the
Partnership other than pursuant to Section 5.1(b), or withdraws
or retires from the Partnership, or voluntarily terminates its
existence. Provided, however, that if one hundred percent (100%)
of the Limited Partners determine in writing executed within such
ninety (90) day period to continue the Partnership and elect a
new General Partner, the Partnership shall not dissolve as
provided in the first sentence hereof but shall continue in
-37-<PAGE>
existence as though no decision to dissolve or filing had
occurred, except that the new General Partner shall be
substituted for the former General Partner. Provided further,
that the new General Partner shall be willing to serve as such
and that the appointment of such General Partner shall otherwise
comply with the provisions of this Agreement.
(e) The General Partner shall be deemed removed
(unless waived by the affirmative vote of Limited Partners
representing at least seventy-five percent (75%) of the combined
Capital Contributions of all the Limited Partners) upon thirty
(30) days prior written notice:
(i) when a court of competent jurisdiction makes
a final determination, as to which all rights to appeal have
been exercised or exhausted, that the General Partner is
guilty of any gross negligence, willful malfeasance, fraud,
material breach of its fiduciary duty to the Partnership or
the Limited Partners or bad faith in connection with the
performance of its duties hereunder or has committed any
material breach of its obligations hereunder which cannot be
remedied or which if it can be remedied is not remedied by
the General Partner within thirty (30) days after such
determination or has caused any of the Limited Partners to
be liable in excess of their Capital Commitment for the
liabilities of the Partnership;
(ii) upon (A) the conviction entered by a court of
competent jurisdiction against the General Partner, AIC or
its executive officers of any criminal act involving fraud
or which is a felony crime involving deliberate dishonesty
or (B) a guilty plea by any of the foregoing with respect to
any criminal act involving fraud or which is a felony crime
involving deliberate dishonesty; or
(iii) upon a "substantial change in management
of AIC" or a "substantial change in the composition of the
Industrial Investment Team" as described in Section 2.1(b)
at any time prior to the sixth anniversary of the Final
Closing Date, if, for a period of one hundred twenty (120)
days after such change, there has not been an approval by a
majority of the members of the Advisory Board to continue to
allow the newly managed General Partner to make new
Portfolio Investments on behalf of the Partnership;
provided that a new General Partner shall have been appointed to
act as a general partner (who shall be willing to serve as such
and whose appointment shall otherwise comply with the provisions
of this Agreement) prior to such removal. Notwithstanding the
foregoing, the General Partner shall not be deemed removed under
the foregoing provisions of this Section 6.3(e) unless and until
it has had at least thirty (30) days' notice of the intent by any
Limited Partner to remove the General Partner pursuant to this
Section 6.3(e).
-38-<PAGE>
Section 6.4 Liquidation.
(a) Upon dissolution of the Partnership, the
Partnership shall be liquidated subject to the provisions of this
Section 6.4. The General Partner, or if there be no general
partner or if the Partnership is dissolved by the Limited
Partners, then a person selected by Limited Partners representing
in excess of fifty percent (50%) of the combined Capital
Contributions of all Limited Partners, shall act as the
liquidator with full power and authority to:
(i) sell, at such prices and upon such terms as
the liquidator in its sole discretion may deem appropriate,
any or all of the Securities, properties and assets of the
Partnership, provided that such sales shall only be made for
cash and shall be consummated as soon as reasonably
practicable (consistent with the best interests of all the
Partners) after the date of dissolution; and provided
further that the liquidator shall not deal directly or
indirectly with the Partnership for its own account without
the approval in writing of all of the Limited Partners;
(ii) as soon as reasonably practicable after the
date of dissolution, effect distribution of the properties
and assets of the Partnership in the manner set forth in
Section 6.5; and
(iii) control and pay out the reserves
established pursuant to Sections 6.5(b) and (d) and
distribute the balance to the Partners pursuant to Section
6.5(e) as additional assets.
(b) In the event that at the time of the dissolution
of the Partnership, the General Partner has filed a petition
under the United States Bankruptcy Code, or sixty (60) days after
the filing by another person against the General Partner of a
petition under the United States Bankruptcy Code which petition
is not dismissed, or if the General Partner has ceased to carry
on a business because of a voluntary liquidation, then
notwithstanding Section 6.4(a), there shall be a liquidator
appointed by Limited Partners representing in excess of fifty
percent (50%) of the combined Capital Contributions of all the
Limited Partners, which liquidator shall be solely responsible
for the liquidation of the Partnership. The fees (exclusive of
expenses) of any liquidator appointed pursuant to (a) above or
this Section 6.4(b) shall be deducted from any amounts otherwise
payable to the General Partner by the Partnership, and the
General Partner shall be liable to the Partnership for any
excess.
(c) In the event that Limited Partners representing in
excess of fifty percent (50%) of the combined Capital
Contributions of all the Limited Partners so agree in writing,
the liquidator will make all or a specified portion of the
liquidating distribution in kind; absent any such agreement,
distributions shall be in cash.
-39-<PAGE>
Section 6.5 Distribution Upon Liquidation. On
liquidation of the Partnership, the General Partner or
liquidator, as the case may be, shall make distributions out of
the properties and assets of the Partnership in the following
order of priority:
(a) To the payment and discharge of the claims of all
creditors of the Partnership who are not Partners;
(b) To the establishment of such reserves as they may
deem necessary or advisable in order to provide for contingent
liabilities of the Partnership to all persons who are not
Partners;
(c) To the payment and discharge pro rata of the
claims of all creditors of the Partnership who are Partners;
(d) To the establishment of such reserves as they may
deem necessary or advisable in order to provide for contingent
liabilities to Partners; and
(e) The balance, if any, to the Partners in accordance
with and in proportion to their positive Capital Account balances
(after treating all Securities or other property other than cash
that the Partnership holds on the date of liquidation as having
been distributed on such date, and after allocating the profit
and loss on such Securities and other property determined in
accordance with Section 3.3).
Section 6.6 Deficit Restoration by General Partner.
Notwithstanding any other provision of this Agreement to the
contrary, if upon liquidation of the General Partner's interest
in the Partnership (whether or not in connection with the
liquidation of the Partnership), the General Partner has a
negative balance in its Capital Account, the General Partner
shall pay to the Partnership on or before the end of the taxable
year in which such liquidation occurs (or, if later, within
ninety (90) days after the date of such liquidation) an amount in
cash equal to the difference between the General Partner's
negative Capital Account and zero. In determining the amount to
be paid by the General Partner, the Capital Account of the
General Partner shall first be adjusted (i) to account for all
Capital Account adjustments for the fiscal year during which such
liquidation occurs, and (ii) to reflect all allocations that
would be required as prerequisite for any distribution pursuant
to Section 6.5(e). All amounts received by the Partnership
pursuant to this Section 6.6 shall, upon liquidation of the
Partnership, be distributed in accordance with Section 6.5.
Article VII - Reports to Partners
Section 7.1 Independent Auditors. At all times the
General Partner shall keep books of account in which shall be
entered fully and accurately the transactions of the Partnership.
The books of account and records of the Partnership shall be
audited as of the end of each fiscal year by independent
-40-<PAGE>
certified public accountants of recognized national standing
selected by the General Partner and shall be kept by the General
Partner on an accrual basis.
Section 7.2 Reports.
(a) Annual Financial Statements. Within one hundred
twenty (120) days after the end of each fiscal year and on
liquidation of the Partnership, the General Partner shall
prepare, on the basis of the report of the independent certified
public accountants, and mail to each Partner (and to each former
Partner who withdrew during such fiscal year), together with the
report of the independent certified public accountants, a report
stating in sufficient detail such transactions effected by the
Partnership during such fiscal year as shall enable such Partner
to prepare its respective income tax returns and including:
(i) such Partner's Capital Accounts as of the
close of such fiscal year;
(ii) the sum of all Capital Accounts as of such
date;
(iii) statement of assets and liabilities of
the Partnership;
(iv) profit and loss statement;
(v) statement of holdings of Securities of the
Partnership;
(vi) a description of the nature of each of the
Partnership's Investments, the cost thereof and the
valuation thereof established pursuant to Section 8.3; and
(vii) such other financial information and
documents as the General Partner deems appropriate, as a
Limited Partner may reasonably request, or as required by
this Agreement and any amendments hereto.
(b) Quarterly Financial Statements. Within sixty (60)
days after the end of each quarter of each fiscal year of the
Partnership, the General Partner shall mail to each Limited
Partner unaudited financial statements of the Partnership for
such fiscal quarter.
(c) Non-Financial Information. Beginning ninety (90)
days after the Final Closing Date and continuing through the
investment phase of the Partnership (which shall be a period of
time between four (4) and six (6) years as is determined by the
Advisory Board), the General Partner shall send, on a bi-monthly
basis, a written information statement, the form and content of
which shall be the same as the first such statement, which first
statement shall be subject to the approval of a majority of the
members of the Advisory Board, to each Limited Partner describing
generally the activities of the Partnership and, to the extent
-41-<PAGE>
they relate to the Partnership, the activities of the General
Partner. In particular, to the extent such information is not
confidential, such statement should describe generally the types
of technologies which are being advanced by those Persons whom
the General Partner has considered as potential Portfolio
Companies (whether or not such Person ultimately becomes a
Portfolio Company). Also, such statement should disclose
information regarding the potential energy savings and potential
reduction of CO2 emissions related to the Partnership's
investments in a format that would allow the Limited Partners to
report such items in accordance with Section 1605(b) of the
Energy Policy Act of 1992. The frequency and format of such
reports may be changed (either permanently or on a temporary
basis) with the consent of a majority of the members of the
Advisory Board.
Section 7.3 Inspection. A Limited Partner or its duly
authorized representative shall have the right at reasonable
times to inspect and copy the books and records of the
Partnership and to discuss its affairs with the agents (including
any independent auditors) of the General Partner.
Section 7.4 Tax Returns. The General Partner will serve
as the "tax matters partner" of the Partnership and will file all
United States Federal, state or other income tax returns required
of the Partnership. The General Partner will use all reasonable
efforts to cause to be delivered, within ninety (90) days after
the end of each such fiscal year, to each Person who was a
Partner at any time during such fiscal year (a) a Form K-1 and
such other information, if any, with respect to the Partnership
as may be necessary for the preparation of such Partner's United
States Federal income tax return, and (b) such similar returns as
are required to be filed by the Partnership for United States
Federal, state and local income tax purposes. If requested to do
so by any Limited Partner, the General Partner will file an
election pursuant to Section 754 of the Code.
Article VIII - Valuation
Section 8.1 Valuation of Partnership Net Worth. In
determining the net worth of the Partnership, the value of any
Partnership asset, the Capital Accounts of the Partners, the
value of any distribution, or in determining value for any other
purpose under this Agreement, the provisions of this Article VIII
shall apply.
Section 8.2 Valuation Date. Valuation shall be taken by
the General Partner as of the close of business on (i) the last
day of each fiscal year of the Partnership, (ii) the date the
Partnership dissolves or (iii) the date with respect to which
valuation is to be taken. If such day is not a "Market Day",
then valuation shall be taken on the "Market Day" next preceding
such date, as the case may be. A "Market Day" shall be a day on
which the New York Stock Exchange is open for regular trading.
If a valuation is taken other than in connection with the annual
report described in Section 7.2, the General Partner shall give
-42-<PAGE>
notice of such valuation to the Limited Partners promptly after
it is determined.
Section 8.3 Valuing Securities and Other Assets. The
following provisions shall apply in valuing interests in the
Partnership:
(a) Listed Securities which are not restricted as to
saleability or transferability shall be valued at the closing
price as of the valuation date. If any listed Security was not
traded on such date, then the mean of the closing high bid and
low asked prices as of the close of business on such date shall
be used.
(b) Unlisted securities which are readily marketable
shall be valued at the mean of the closing bid and asked prices
as of the valuation date.
(c) Securities, whether listed or unlisted, for which
market quotations are available, but which are restricted as to
saleability or transferability, shall be valued as provided in
(a) and (b) above, less a discount of from ten percent (10%) to
twenty-five percent (25%) of the value thereof as determined in
good faith by the General Partner. In determining the amount of
such discount the General Partner shall give consideration to the
nature and length of such restriction and the relative volatility
of the market price of such Security.
(d) Securities for which market quotations are not
readily available and all other assets of the Partnership shall
be valued at a fair value as reasonably determined in good faith
by the General Partner.
(e) Liabilities shall include, in addition to those
recorded on the books of the Partnership, such other accrued or
contingent liabilities as shall be determined in accordance with
generally accepted accounting principles consistently applied.
(f) In determining the value of the interest of any
Partner in the Partnership, neither the goodwill nor the right to
use the firm name or trade name of the Partnership shall be
considered as an asset of the Partnership. Neither shall any
valuation be placed thereon for the purpose of distribution, nor
shall any value be placed thereon as between the Partners, or
between a continuing Partner and a withdrawing Partner, or
between a surviving Partner and the estate of any deceased
Partner.
Section 8.4 Disputes.
(a) If Limited Partners representing in excess of
fifty percent (50%) of the combined Capital Contributions of all
of the Limited Partners dispute the values determined by the
General Partner, they shall give notice thereof to the General
Partner in writing by certified mail within sixty (60) days
following the mailing of the annual report described in Section
-43-<PAGE>
7.2, or the date on which notice is otherwise given of the
General Partner's determination of the fair value. Such dispute
shall be referred to an independent financial analyst of
recognized standing, selected by the General Partner and approved
by all disputing Partners. If the parties are unable to agree on
an independent financial analyst, the General Partner shall
select one financial analyst of recognized national standing and
the disputing Partners shall select another such analyst. If the
two analysts so selected are unable to agree on a fair value,
they shall select a third analyst, who shall determine the fair
value. The General Partner shall upon request supply to any
independent financial analyst selected as provided above all
information in its possession with respect to the asset whose
value is disputed. The Partnership shall pay the cost of the
analyst selected by the General Partner and the disputing Limited
Partners shall pay the cost of the analyst selected by them. The
cost of any third analyst shall be divided equally between the
Partnership on the one hand and the disputing Limited Partners on
the other.
(b) If Limited Partners representing in excess of
fifty percent (50%) of the combined Capital Contributions of all
of the Limited Partners shall have given notice to the General
Partner in writing by certified mail disputing the values
determined by the General Partner within sixty (60) days
following the mailing of the annual report described in Section
7.2, or the date on which notice is otherwise given of the
General Partner's determination of fair value, then no
distributions shall be made to the Partners until such dispute
shall have been resolved in accordance with the provisions of
this Section 8.4.
Article IX - Miscellaneous
Section 9.1 Admission of Partners. No new Partner shall
be admitted to the Partnership except by assignment of the
interest of a Partner in accordance with Article V, by
replacement of the General Partner in accordance with Section
6.3(c) or (d) or in accordance with this Section 9.1. Additional
Limited Partners may be admitted to the Partnership on or before
the Final Closing Date upon the approval of the General Partner.
Admission of any such additional Limited Partner shall be
accomplished when each Limited Partner so admitted shall (i) sign
an amendment to this Agreement, which shall be accepted by the
General Partner, in which such Limited Partner agrees to become a
Limited Partner upon the terms and conditions of this Agreement,
as well as any other documents required by the General Partner,
(ii) make the initial payment of his Capital Commitment required
by Section 3.1, and (iii) pay to the Partnership an amount of
interest on its initial Capital Contribution equal to the
weighted average of interest earned by the Partnership on its
uninvested funds from the date of commencement of this
Partnership to the date of admission of such additional Limited
Partner pursuant to this Section 9.1 as determined by the General
Partner. With respect to any Limited Partner admitted pursuant
to this Section 9.1, no such Limited Partner shall be allocated
-44-<PAGE>
any income, gain or loss realized during the period prior to such
Limited Partner's admission to the Partnership. Upon admission
of an additional Limited Partner, the Partnership shall notify
each Limited Partner of the interests of all Partners in the
Partnership. Each said additional Limited Partner shall
thereafter be entitled to and subject to all the rights and
liabilities of Limited Partners hereunder.
Section 9.2 Disputed Matters. Except as provided in
Section 8.4, any controversy or dispute arising out of this
Agreement, interpretation of any of the provisions hereof, or the
actions of the Partners hereunder shall be submitted to
arbitration before the American Arbitration Association under the
rules then obtaining of said Association, such arbitration to be
held in Boston, Massachusetts, and judgment upon any award thus
obtained may be entered in any court having jurisdiction thereof.
In any such arbitration each party to the arbitration shall bear
its own expenses, including expenses of attorneys, financial
experts and other witnesses; any arbitration fees and expenses of
the arbitrators shall be divided equally between the disputing
parties.
Section 9.3 General. This Agreement: (a) shall be
binding on the legal successors of the Partners permitted by this
Agreement; (b) shall be governed by and construed in accordance
with the Delaware Revised Uniform Limited Partnership Act and
otherwise in accordance with the laws of the Commonwealth of
Massachusetts; (c) may be executed in more than one counterpart
as of the day and year first above written; and (d) contains the
entire Agreement among the Partners relating to the subject
matter hereof. The waiver of any of the provisions, terms or
conditions contained in this Agreement shall not be considered as
a waiver of any of the other provisions, terms or conditions
hereof.
Section 9.4 Notices.
(a) To the Partners. Any notice to be given hereunder
by the Partnership to any Partner shall be in writing and signed
by the General Partner. Any such notice shall be conclusively
deemed to have been given if either (i) delivered in person to
such Partner or (ii) if the address to which said notice is to be
sent is outside of the United States, mailed by air mail, postage
prepaid, addressed to such Partner at its address set forth in
Appendix A, or (iii) if the address to which said notice is to be
sent is within the United States, mailed by registered or
certified mail, postage prepaid, addressed as set forth in (ii)
above. Any Partner may change its address for notice by written
notice to the Partnership at the Partnership address given by the
means set forth in Section 9.4(b), and upon receipt by the
Partnership of such notice of change of address for notice, the
new address shall be that Partner's address for notice hereunder.
(b) To the Partnership. Any notice to be given
hereunder to the Partnership shall be in writing and signed by
the Partner giving notice. Any such notice shall be conclusively
-45-<PAGE>
deemed to have been given if either (i) delivered in person to
the General Partner, or (ii) mailed by United States registered
or certified mail, postage prepaid, addressed to the Partnership
at its principal office, which shall be 101 Federal Street,
Boston, Massachusetts 02110, or such other address as the General
Partner may from time to time designate by notice to all Limited
Partners. Any notice to the Partnership may be mailed by air
mail to such address if mailed from outside of the United States,
but shall be deemed given only upon receipt.
Section 9.5 Execution of Certificate of Limited
Partnership and Other Documents. The General Partner agrees to
prepare, execute and file a certificate of limited partnership
and any amendments thereto, and all Partners agree to execute
such other instruments, documents and papers as the General
Partner deems necessary or appropriate to carry out the
provisions of this Agreement, and to take such other action as
the General Partner deems appropriate to maintain the
Partnership's status as a Limited Partnership under the laws of
the State of Delaware and its status as a qualified foreign
limited partnership under the laws of the Commonwealth of
Massachusetts. The General Partner shall send copies of such
documents to each Partner.
Section 9.6 Force Majeure. Whenever any act or thing is
required of the Partnership hereunder within any specified period
of time, the Partnership shall be entitled to such additional
period of time to do such acts or things as shall equal any
period of delay resulting from causes beyond the reasonable
control of the Partnership, including, without limitation, bank
holidays, actions of governmental agencies, the closing of the
New York Stock Exchange at times other than normal closing dates,
and financial crises of a nature materially affecting the
purchase and sale of Securities.
Section 9.7 Amendments.
(a) Except as otherwise specifically provided herein,
the terms and provisions of this Agreement may be modified or
amended at any time and from time to time or compliance with any
provision hereof may be waived with the written consent of (1)
the General Partner and (2) Limited Partners representing in
excess of seventy-five percent (75%) of the combined Capital
Contributions of all Limited Partners insofar as is consistent
with the laws governing this Agreement; provided, however, that
without the specific written consent of each Partner adversely
affected thereby, no such modification or amendment shall (i)
increase or decrease the obligation of a Limited Partner beyond
that set forth in Section 1.4, (ii) increase or reduce the
Capital Account or Capital Commitment of any Partner or its
rights to allocation, distribution and withdrawal with respect
thereto, (iii) amend Section 1.5 to permit Partnership activities
which would subject a Limited Partner to United States Federal or
state taxation which such Partner would not be subject to in the
absence of such activity, (iv) amend Sections 3.1(c), 3.1(d),
4.1, 4.2 or 5.4 to limit or diminish the rights of withdrawing
-46-<PAGE>
Partners thereunder or (v) amend this Section 9.7. The
immediately preceding proviso may not be amended without the
unanimous consent of all the Partners.
(b) In addition to any amendments otherwise authorized
hereby, this Agreement may be amended from time to time by the
General Partner without the consent of any of the Limited
Partners (i) to cure any ambiguity or correct any printing,
stenographic or clerical errors or omissions; (ii) to admit one
or more additional Limited Partners, or withdraw one or more
Limited Partners, in accordance with the terms of this Agreement;
(iii) to amend Appendix A hereto to provide any necessary
information regarding any Partner, any additional or successor
General Partner or any additional Limited Partner; (iv) to
reflect any change in the amount of the Capital Contributions of
any Partner in accordance with the terms of this Agreement; and
(v) to the extent necessary to cause the provisions of this
Agreement to conform to the requirements of the United States
Investment Advisers Act of 1940 applicable to contracts between
investment advisers registered under such Act and their clients,
provided that such amendment does not adversely affect any of the
Limited Partners. The General Partner shall send each Limited
Partner a copy of any amendment adopted pursuant to this Section
9.7(b).
Section 9.8 Headings. Article, Section, Paragraph and
Subparagraph headings are for convenience of reference only, are
not part of this Agreement, and shall not be considered in
interpreting this Agreement.
Section 9.9 Power of Attorney. Each Limited Partner does
hereby constitute and appoint the General Partner, Peter A.
Brooke, and each Vice President of the general partner of the
General Partner, and each of them, its true and lawful
representative, in its name, place and stead, to make, execute,
sign, acknowledge, deliver and file all such instruments,
documents and certificates which may from time to time be
required by the laws of the United States of America, the State
of Delaware, the Commonwealth of Massachusetts, or any other
state or jurisdiction in which the Partnership shall determine to
do business, or any political subdivision or agency thereof, to
effect, implement and continue the valid and subsisting existence
of the Partnership, including, without limitation, a certificate
of limited partnership and amendments thereto (not inconsistent
with this Agreement) and any other certificates or amendments
filed for the purpose of admitting any of the undersigned as a
limited partner of the Partnership.
Section 9.10 Effect of Securities Laws. In the event
that, due to acts of the Limited Partners or the Partnership, or
otherwise the General Partner determines, after consultation with
legal counsel for the Partnership, that the Partnership is or may
be required by the securities laws of the United States to
register either the Partnership or interests in the Partnership
with the United States Securities and Exchange Commission or
other similar agency, or that the General Partner shall be
-47-<PAGE>
required to so register in connection with the distribution of
limited partnership interests, then the General Partner shall
have the right, in its discretion and without the necessity of
obtaining the consent of the Limited Partners, to take any of the
following actions:
(a) Dissolve and liquidate the Partnership; or
(b) Require the withdrawal of any Limited Partner
whose acts have caused or may cause the Partnership or interests
therein to be required to be so registered, such withdrawal to be
on the terms set forth in Article IV hereof except that such
withdrawal may be required to be made immediately rather than as
of the fiscal year-end and the determination of the withdrawing
Partner's liquidating share shall be made as of such time.
-48-<PAGE>
IN WITNESS WHEREOF, the General Partner and the Limited
Partners have hereunto set their hands and seals as of the date
first set forth above.
GENERAL PARTNER
ADVENT INTERNATIONAL LIMITED
PARTNERSHIP
By: ADVENT INTERNATIONAL
CORPORATION, General
Partner
By:
Thomas H. Lauer
Chief Financial Officer
LIMITED PARTNERS
SEE SIGNATURE PAGES ATTACHED HERETO
-49-<PAGE>
APPENDIX A
Capital
Name Address Commitment
General Partner:
Advent International c/o Advent International $ 1,000
Limited Partnership Corporation
101 Federal Street
Boston, MA 02110
Limited Partners:
AYP Capital, Inc. Tower 49, 36th Floor $3,114,238*
12 East 49th Street
New York, NY 10017
Central Louisiana 2030 Donahue Ferry Road $2,000,000
Electric Pineville, LA 73160-5223
Energy Initiatives, One Upper Pond Road $3,114,238*
Inc. (a subsidiary of Parsippany, NJ 07054
General Public
Utilities, Corp.)
Ohio Edison Company 76 South Main Street $2,000,000
Akron, OH 44308
AEP Investments, Inc. 1 Riverside Plaza $3,114,238*
Columbus, OH 43215
The John D. and 140 South Dearborn Street $5,000,000
Catherine T. Suite 1100
MacArthur Foundation Chicago, IL 60603-5285
The Southern 64 Perimeter Center East $3,114,238*
Development and Atlanta, GA 30346
Investment Group, Inc.
* Capital Commitment equals the lesser of (i) 9.9% of the
total Capital Commitments to the Partnership of all Partners
or (ii) $5,000,000, and therefore is subject to increase
from time to time.
-50-<PAGE>
Capital
Name Address Commitment
Utilicorp Holdings Inc. 911 Main, Suite 3000 $ 2,000,000
Kansas City, MO 64105
Potomac Electric 1900 Pennsylvania Ave., N.W. $ 1,000,000
Power Company Washington, D.C. 20068
Union Electric Company P.O. Box 149 $ 2,000,000
St. Louis, MO 63166
Union Electric 100 North Broadway, Suite 0948$ 3,000,000
Retirement Trust St. Louis, MO 63102
Co. as Trustee
KLT Investments II Inc. 1201 Walnut $ 2,000,000
P.O. Box 410225
Kansas City, MO 64141
-51-<PAGE>
APPENDIX B
CHARTER
The EnviroTech Investment Fund I will invest in companies
commercializing electrotechnologies and renewable technologies
that promote environmental and economic responsibility. The
investments will support the electric utility industry's efforts
under the "Climate Challenge," demonstrating that voluntary
efforts can, cost effectively, achieve both economic and
environmental gains.
Investments by the Fund should:
- Reduce, avoid or sequester greenhouse gas emissions.
(Every effort will be made to allow the Limited
Partners to submit the results under section 1605(b) of
the Energy Policy Act of 1992)
- Help utilities and their customers handle more
effectively waste by-products or more cost-effectively
produce or manufacture goods or service
- Improve the efficiency of the production, storage,
transmission, and delivery of energy
- Provide investors with attractive opportunities
relating to the evolving utility business climate which
meet the above objectives
Areas of Focus:
The primary sectors of focus are:
- Alternate and renewable energy supplies, including
photovoltaic, biomass technologies, and wind power.
- Environmental and waste treatment technologies and
services, including electrotechnologies used in waste
and water treatment and waste management, waste
reduction and recycling/recovery.
- Energy efficiency technologies, processes and services,
including heating, ventilation and air conditioning
equipment, induction heating technologies, high
efficiency lighting technologies, and motor efficiency
technologies, and energy storage technologies.
- Electrotechnologies used in the reduction of medical
waste, including plasma, pyrolysis and microwave
processing.
- Alternative energy for transportation, including
vehicles, components infrastructure, and fuel cells.
In addition, investments may include new approaches to
-52-<PAGE>
transportation sectors where electrotechnologies have
not been prevalent.
- Other technologies related to improving the generation,
transmission and delivery of electricity, including
automated meter reading, distribution transformers,
thyristor technologies, active noise cancellation,
energy storage systems and interactive energy
management systems.
Geographic Coverage
The Fund's investments can be both domestic and international,
but investments will be primarily in the United States. The
Limited Partners will have an opportunity to bring local
technology developments to the Fund, and also will have the
opportunity to have technologies demonstrated in their service
territory.
Stage of Development
The Fund will invest in companies at all stages of development to
diversify the portfolio while achieving the best match of
environmental and economic results. There will be a minimum of
investment in start-up companies, with most investments being in
early and late expansion stage development opportunities. The
Fund will not participate in hostile takeovers.
Size of Investment
The Fund will not invest more than 7.5% of its total committed
capital in a single portfolio company, including all follow-on
investments and all forms of investment (e.g., equity, debt, loan
guarantees, etc.).
Diversification
The Fund will diversify the investment portfolio to maximize
coverage among potential technologies. A technology is defined
as the component or part of a process or service that is unique
in its characteristics from other components or parts of a
process or service. Examples include lead acid batteries,
induction charging, plasma processing for medical waste, and
controllers for electric vehicle drive trains.
-53-<PAGE>
APPENDIX C
MEMBERS OF ADVISORY BOARD
Stanley I. Garnett, II
Allegheny Power System, Inc.
Armando A. Pena
American Electric Power Service Corp.
George Bausewine
Central Louisiana Electric
Joseph Van den Berg
Edison Electric Institute
Scott A. Weiner
GPU Service Corporation
Janee C. Rosenthal
KLT Investments II, Inc.
William F. McCalpin
The John D. and Catherine T.
MacArthur Foundation
Richard H. Marsh
Ohio Edison Company
H. Lowell Davis
PEPCO
Allen Leverett
Southern Company Services
Jerre Birdsong
Union Electric Company
William D. Bandt
Utilicorp Holdings, Inc.
-54-<PAGE>
APPENDIX D
CO-INVESTMENT POLICY
OUTLINE OF POLICY FOR EMPLOYEE INVESTMENT IN AI/NETWORK DEALS
1. Principally due to risks of legal action, but also due to
possible 144 and 16b restrictions placed on AI investment
actions as a result of "related party transactions", no
investment will be permitted in public portfolio company
securities subsequent to the IPO. In addition, employees
may not purchase the securities of public portfolio
companies within 6 months after AI managed funds and Network
affiliate managed funds have disposed of their last shares
in a company.
2. All restrictions apply to the employee and his household.
3. Employees are not to advise any other parties concerning
investment in private or publicly listed portfolio companies
of AI or of the Network.
4. An employee may invest in private portfolio company
securities only through Advent Partners Limited Partnership
("APLP"), of which AI is the General Partner. APLP is
subject to the following constraints:
. each partner of APLP must be (under the law) a
"Sophisticated Investor" and at or above the level of a
Vice President of AI (or its equivalent):
. there is no restriction placed by the portfolio
company, other investors in that company, or by legal
authorities having jurisdiction over the transaction on
such investments by APLP;
. APLP agrees to follow on (or not) in future financings
just as AI managed funds decide to follow (or not);
. APLP obtains prior approval of the AI Investment
Committee for each such investment;
. there is an excess of a deal available beyond the
aggregate total appetite of:
all applicable AI funds
and applicable/interested Network funds
and $10,000 for AIILP, if AIILP is investing
. there is no prohibition against APLP investment arising
from the legal agreements governing each AI fund
participating in the deal (e.g., INF has such a
restriction):
. there is no advice from AI counsel which causes concern
about APLP investment;
-55-<PAGE>
. APLP acknowledges that neither AI nor any of its funds,
subsidiaries, affiliates, officers, director or
employees is obligated or expected to indemnify or
assist in the defense of APLP in a legal action as a
result of the its ownership of the securities.
[This time period is designed to avoid any difficulties with so
called "short swing" transactions in the U.S. Other time periods
may apply in other markets, depending on similar rules currently
in effect.]
-56-<PAGE>
