Consensus One Venture Capital Limited Partnership Deed


ATTACHMENT F

EXAMPLES OF PRE-EMPTIVE RIGHTS ON TRANSFERS OF PARTNERSHIP INTERESTS OF LIMITED PARTNERS

Examples 1 and 2 are some examples of possible pre-emptive rights provisions regarding transfers of Partnership Interests of Limited Partners that may be adopted in clauses 4.3(d) and 9.2.

This attachment F should be deleted regardless of whether pre-emptive rights provisions regarding transfers of Partnership Interests of Limited Partners are adopted in clauses 4.3(d) and 9.2.

This example 1 is an alternative to clause 4.3(d). It provides for pre-emptive rights in favour of other Limited Partners on the sale of all or a proportion of the Partnership Interest of a Defaulting Limited Partner.

Under this example 1, the General Partner will have an overriding discretion to limit the participation of other Limited Partners in the purchase of any of the Partnership Interest of the Defaulting Limited Partner if the General Partner considers that the participation may put the Partnership or Limited Partners at risk as provided in paragraph (d)(ii)(A)(II) below.

(d) Subject to paragraph (e):

(i) if a Limited Partner is a Defaulting Limited Partner under paragraph (a) as a result of the operation of paragraph (a)(iii), the General Partner may Transfer all or a proportion of all of the Partnership Interest of the Defaulting Limited Partner to any person (including a Limited Partner) on terms which the General Partner may determine in its absolute discretion; or

(ii) if a Limited Partner is a Defaulting Limited Partner under paragraph (a) as a result of the operation of paragraph (a)(i) or (ii), a Transfer of all or a proportion of all of the Partnership Interest of the Defaulting Limited Partner must be made in accordance with the following procedure:

A. the General Partner must give notice to each Limited Partner (other than a Defaulting Limited Partner) specifying:

I. the proportion (which may be all) of the Partnership Interest of the Defaulting Limited Partner which the General Partner wishes to Transfer and the cash price and all other terms of the Transfer (which the General Partner may determine in its absolute discretion);

II. a limit of that proportion which a Limited Partner (other than a Defaulting Limited Partner) may be Transferred to a Limited Partner (which the General Partner may specify to apply to all of the Limited Partners (other than a Defaulting Limited Partner) or to any one or more of the Limited Partners identified in the notice) or the exclusion of one or more Limited Partners from the acquisition, if the General Partner considers the limit or exclusion to be necessary or desirable to protect against the risk of:

(1) the cessation of the Partnership as a limited partnership or Venture Capital Limited Partnership;

(2) the Partnership being required to be registered as a Registered Scheme under the Corporations Act;

(3) the General Partner or the Partnership being required to prepare or provide a Disclosure Document or Product Disclosure Statement;

(4) adverse consequences to a Partner or a person who has an interest in the Partnership Interest of a Partner, in relation to Tax;

(5) a Limited Partner and its Associates having at least [insert percentage]% of the total of the Capital Commitments of the Limited Partners; or

(6) the General Partner, the Partnership or the Transfer breaching an applicable law; and

III. that the Transfer is being offered in accordance with this paragraph (d);

B. each Limited Partner (other than a Limited Partner who has been excluded under the notice under sub-paragraph (A) or a Defaulting Limited Partner) may within 10 Business Days after the notice under sub-paragraph (A), give notice to the General Partner of the proportion of that Partnership Interest that the Limited Partner wishes to be Transferred to the Limited Partner, and which does not exceed any limit specified in the notice under sub-paragraph (A) which applies to the Limited Partner;

C. if no notice is given under sub-paragraph (B), the General Partner may within 40 Business Days after the notice under sub-paragraph (A), Transfer to any person all or any proportion of the Partnership Interest which the General Partner wishes to Transfer as specified in the notice under sub-paragraph (A) and on terms which are not more favourable to the Defaulting Limited Partner than the terms specified in the notice under sub-paragraph (A);

D. if the total proportion of that Partnership Interest that the Limited Partners wish to be Transferred to Limited Partners under notices under sub-paragraph (B) is less than the proportion of the Partnership Interest of the Defaulting Limited Partner which the General Partner wishes to Transfer as specified in the notice under sub-paragraph (A), the General Partner may within 40 Business Days after the notice under sub-paragraph (A):

I. Transfer to each Limited Partner which has given notice under sub-paragraph (B), the proportion of that Partnership Interest which the Limited Partner wishes to be Transferred to the Limited Partner and on the terms specified in the notice under sub-paragraph (A) and each of those Limited Partners must at the time of Transfer pay to the General Partner the cash price specified in the notice under sub-paragraph (A) for the proportion of that Partnership Interest which is being Transferred to the Limited Partner; and

II. in addition to or to the exclusion of any Transfer under sub-paragraph (I), Transfer to any person all or any proportion of that Partnership Interest but which, when aggregated with the total of the proportion of that Partnership Interest that is Transferred to Limited Partners under sub-paragraph (I), is not less than the total of the proportion of that Partnership Interest that Limited Partners wish to be Transferred to Limited Partners under notices under sub-paragraph (B), and on terms which are not more favourable to the Defaulting Limited Partner than the terms under the notice under sub-paragraph (A);

E. if the total proportion of that Partnership Interest that the Limited Partners wish to be Transferred to of Limited Partners under notices under sub-paragraph (B) is equal to the proportion of the Partnership Interest which the General Partner wishes to Transfer as specified in the notice under sub-paragraph (A), the Defaulting Limited Partner must within 20 Business Days after the notice under sub-paragraph (A), Transfer to each Limited Partner which has given notice under sub-paragraph (B), the proportion of that Partnership Interest which the Limited Partner wishes to be Transferred to the Limited Partner and on the terms specified in the notice under sub-paragraph (A) and each of those Limited Partners must at the time of Transfer pay to the General Partner the cash price specified in the notice under sub-paragraph (A) for the proportion of that Partnership Interest which is being Transferred to the Limited Partner; and

F. if the total proportion of that Partnership Interest that the Limited Partners wish to be Transferred to Limited Partners under notices under sub-paragraph (B) is greater than the proportion of the Partnership Interest which the General Partner wishes to Transfer as specified in the notice under sub-paragraph (A), the General Partner must within 20 Business Days after the notice under sub-paragraph (A), Transfer to each Limited Partner which has given notice under sub-paragraph (B), the proportion of that Partnership Interest in accordance with the following allocations and on the terms specified in the notice under sub-paragraph (A) and each of those Limited Partners must at the time of Transfer pay to the General Partner the cash price specified in the notice under sub-paragraph (A) for the proportion of that Partnership Interest which is being Transferred to the Limited Partner:

I. in proportion to the Capital Commitments of those Limited Partners; and

II. if any allocation under this sub-paragraph (F) would result in a Limited Partner being allocated more of the proportion of that Partnership Interest than that Limited Partner wishes to be Transferred to the Limited Partner under notice under sub-paragraph (B), the surplus will be allocated among those other Limited Partners which wish to be Transferred to Limited Partners under notices under sub-paragraph (B), more than their allocation, and in proportion to their Capital Commitments, and this will be repeated until all of that Partnership Interest is allocated to other Limited Partners which have given notice under sub-paragraph (B).

This example 2 provides for pre-emptive rights in favour of other Limited Partners on the voluntary sale of all or a proportion of the Partnership Interest of a Limited Partner.

Under this example 2, the General Partner will have an overriding discretion to limit the participation of other persons (including other Limited Partners) in the purchase of any of the Partnership Interest of the Limited Partner if the General Partner considers that the participation may put the Partnership or Limited Partners at risk as provided in paragraph (a)(ii)(B) below.

(a) Subject to paragraph (b), a Limited Partner (other than a Defaulting Limited Partner) (Transferring Limited Partner) may Transfer all or a proportion of all of the Partnership Interest of the Limited Partner in accordance with the following procedure: 

(i) the Transferring Limited Partner must give notice to the General Partner specifying the proportion (which may be all) of its Partnership Interest that the Limited Partner wishes to Transfer and the cash price and all other terms of the Transfer;

(ii) the General Partner must within 5 Business Days after receiving a notice under sub-paragraph (i) give notice to each other Limited Partner (other than a Defaulting Limited Partner) and a copy of that notice to the Transferring Limited Partner, specifying:

A. the proportion (which may be all) of the Partnership Interest of the Limited Partner that the Transferring Limited Partner wishes to Transfer and the cash price and all other terms of the Transfer, as specified in the notice under sub-paragraph (i);

B. a limit of that proportion which a Limited Partner (other than a Defaulting Limited Partner) may Transfer to a Limited Partner (which the General Partner may specify to apply to all of the other Limited Partners (other than a Defaulting Limited Partner) or to any one or more of the Limited Partners identified in the notice) or the exclusion of one or more Limited Partners from the acquisition, if the General Partner considers the limit or exclusion to be necessary or desirable to protect against the risk of:

I. the cessation of the Partnership as a limited partnership or Venture Capital Limited Partnership;

II. the Partnership being required to be registered as a Registered Scheme under the Corporations Act;
III. the General Partner or the Partnership being required to prepare or provide a Disclosure Document or Product Disclosure Statement;
IV. adverse consequences to a Partner or a person who has an interest in the Partnership Interest of a Partner, in relation to Tax;
V. a Limited Partner and its Associates having at least [insert percentage]% of the total of the Capital Commitments of the Limited Partners; or
VI. the General Partner, the Partnership or the Transfer breaching an applicable law; and
C. that the Transfer is being offered in accordance with this clause 9.2;
(iii) each other Limited Partner (other than a Limited Partner who has been excluded under the notice under sub-paragraph (ii) or a Defaulting Limited Partner) may within 10 Business Days after the notice under sub-paragraph (ii), give notice to the General Partner of the proportion of that Partnership Interest that the other Limited Partner wishes to be Transferred to the other Limited Partner, and which does not exceed any limit specified in the notice under sub-paragraph (ii) which applies to the other Limited Partner;
(iv) if no notice is given under sub-paragraph (iii), the Transferring Limited Partner may within 40 Business Days after the notice under sub-paragraph (iii), Transfer to any person approved in the absolute discretion of the General Partner, all or any proportion of the Partnership Interest which the Transferring Limited Partner wishes to Transfer as specified in the notice under sub-paragraph (ii) and on terms which are not more favourable to the Transferring Limited Partner than the terms specified in the notice under sub-paragraph (ii);
(v) if the total proportion of that Partnership Interest that the other Limited Partners wish to be Transferred to Limited Partners under notices under sub-paragraph (iii) is less than the proportion of the Partnership Interest which the Transferring Limited Partner wishes to Transfer as specified in the notice under sub-paragraph (ii), the Transferring Limited Partner may within 40 Business Days after the notice under sub-paragraph (ii):
A. Transfer to each other Limited Partner which has given notice under sub-paragraph (iii), the proportion of that Partnership Interest which the other Limited Partner wishes to be Transferred to the Limited Partner and on the terms specified in the notice under sub-paragraph (ii) and each of those other Limited Partners must at the time of Transfer pay to the Transferring Limited Partner the cash price specified in the notice under sub-paragraph (ii) for the proportion of that Partnership Interest which is being Transferred to the other Limited Partner; and
B. in addition to or to the exclusion of any Transfer under sub-paragraph (A), Transfer to any person approved in the absolute discretion of the General Partner, all or any proportion of that Partnership Interest but which, when aggregated with the total of the proportion of that Partnership Interest that is Transferred to other Limited Partners under sub-paragraph (A), is not less than the total of the proportion of that Partnership Interest that other Limited Partners wish to be Transferred to Limited Partners under notices under sub-paragraph (iii), and on terms which are not more favourable to the Transferring Limited Partner than the terms under the notice under sub-paragraph (iii);
(vi) if the total proportion of that Partnership Interest that the other Limited Partners wish to be Transferred to Limited Partners under notices under sub-paragraph (iii) is equal to the proportion of the Partnership Interest which the Limited Partner wishes to Transfer as specified in the notice under sub-paragraph (ii), the Transferring Limited Partner must within 20 Business Days after the notice under sub-paragraph (ii), Transfer to each other Limited Partner which has given notice under sub-paragraph (iii), the proportion of that Partnership Interest which the other Limited Partner wishes to be Transferred to the Limited Partner and on the terms specified in the notice under sub-paragraph (ii) and each of those other Limited Partners must at the time of Transfer pay to the Transferring Limited Partner the cash price specified in the notice under sub-paragraph (ii) for the proportion of that Partnership Interest which is being Transferred to the other Limited Partner; and
(vii) if the total proportion of that Partnership Interest that the other Limited Partners wish to be Transferred to Limited Partners under notices under sub-paragraph (iii) is greater than the proportion of the Partnership Interest which the Transferring Limited Partner wishes to Transfer as specified in the notice under sub-paragraph (ii), the Transferring Limited Partner must within 20 Business Days after the notice under sub-paragraph (ii), Transfer to each other Limited Partner which has given notice under sub-paragraph (iii), the proportion of that Partnership Interest in accordance with the following allocations and on the terms specified in the notice under sub-paragraph (ii), and each of those other Limited Partners must at the time of Transfer pay to the Transferring Limited Partner the cash price specified in the notice under sub-paragraph (ii) for the proportion of that Partnership Interest which is being Transferred to the other Limited Partner:
A. in proportion to the Capital Commitments of those other Limited Partners; and
B. if any allocation under this sub-paragraph (vii) would result in a Limited Partner being allocated more of the proportion of that Partnership Interest than that Limited Partner wishes to be Transferred to the Limited Partner under notice under sub-paragraph (iii), the surplus will be allocated among those other Limited Partners which wish to be Transferred to Limited Partners under notices under sub-paragraph (iii), more than their allocation, and in proportion to their Capital Commitments, and this will be repeated until all of that Partnership Interest is allocated to other Limited Partners which have given notice under sub-paragraph (iii).
(b) The Transferring Limited Partner must not and is not required to Transfer any of the Partnership Interest of the Transferring Limited Partner to a person under paragraph (a) unless:
(i) (Deed of Accession) the Transferring Limited Partner and the person execute a Deed of Accession which is delivered to the General Partner, and the General Partner notifies the Transferring Limited Partner and the person that the General Partner accepts the Deed of Accession;
(ii) (information and documents) the person has provided any information and executes and delivers any documents to the General Partner or any person specified by the General Partner, which the General Partner reasonably considers to be necessary or desirable to procure amendment of the Register:
A. if the person is a Limited Partner, to record the Limited Partner with a limit of liability equal to the Capital Commitment of the Limited Partner which includes the Capital Commitment of the Transferring Limited Partner which is comprised in the Transfer of any of the Partnership Interest of the Transferring Limited Partner to the Limited Partner; or
B. if the person is not a Limited Partner, to record the person as a Limited Partner with a limit of liability equal to the Capital Commitment of the Transferring Limited Partner which is comprised in the Transfer of any of the Partnership Interest of the Transferring Limited Partner to the person; and
(iii) (payment of expenses) the Transferring Limited Partner has paid all reasonable Outgoings of the General Partner or the Partnership in connection with the Transfer.
(c) The Transferring Limited Partner must within 2 Business Days after being requested to do so by the General Partner, provide any information and execute and deliver any documents to the General Partner or any person specified by the General Partner, which the General Partner reasonably considers to be necessary or desirable, and the General Partner must use all reasonable endeavours, to procure amendment of the Register:
(i) to remove the Transferring Limited Partner as a Limited Partner (if all of the Partnership Interest of the Transferring Limited Partner is being Transferred under paragraph (a)) or record the Transferring Limited Partner with a limit of liability equal to the Capital Commitment of the Limited Partner which excludes the Capital Commitment of the Transferring Limited Partner which is comprised in the Partnership Interest of the Transferring Limited Partner being Transferred (if not all of the Partnership Interest of the Transferring Limited Partner is being Transferred);
(ii) if the person to whom a proportion of the Partnership is being Transferred is a Limited Partner, to record the Limited Partner with a limit of liability equal to the Capital Commitment of the Transferring Limited Partner which includes the Capital Commitment of the Transferring Limited Partner which is comprised in the Transfer of any of the Partnership Interest of the Transferring Limited Partner to the Limited Partner; and
(iii) if the person to whom a proportion of the Partnership is being Transferred is not a Limited Partner, to record the person as a Limited Partner with a limit of liability equal to the Capital Commitment of the Transferring Limited Partner which is comprised in the Transfer of any of the Partnership Interest of the Transferring Limited Partner to the person.

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