Consensus One Venture Capital Limited Partnership Deed


3. CAPITALISATION OF THE PARTNERSHIP

3.1 Admission of the Initial Subscribers 
3.2 Retirement of the Initial Limited Partner 
3.3 Recording the admission of Initial Subscribers 
3.4 Admission of additional Limited Partners 
3.5 Recording additional Limited Partners 
3.6 Capital calls 
3.7 Timing of Capital Contributions 
3.8 Decrease in the Paid-Up Proportion 
3.9 Capital Accounts 
3.10 Borrowing and security by the Partnership 

3.1 Admission of the Initial Subscribers

(a) The General Partner may admit a person as a Limited Partner on the Initial Closing Date as provided in clause 3.3(b) if:

(i) (Deed of Accession) the person executes a Deed of Accession and delivers it to the General Partner;

(ii) (acceptance) the General Partner notifies the person that the General Partner accepts the Deed of Accession, which the General Partner may in its absolute discretion decline to do including if:

A. the Deed of Accession specifies a Capital Commitment which is not at least the amount specified in clause 4 of schedule A; or

B. the person (and any person for whom it may have executed the Deed of Accession as trustee, nominee, custodian or sub custodian) does not comply with any requirements that the General Partner has, in its absolute discretion, set in respect of the Initial Closing, including the General Partner receiving any information which it reasonably requires to establish that the offer of an interest in the Partnership to the person and the creation of an interest of the person in the Partnership would not:

I. require the General Partner or the Partnership to prepare or provide a Disclosure Document or Product Disclosure Statement;

II. require the Partnership to be a Registered Scheme; or

III. result in a breach of an applicable law by the General Partner or the Partnership;

(iii) (Capital Contribution) the person pays a Capital Contribution of an amount equal to the Capital Commitment of the person as specified in the Deed of Accession executed by the person and accepted by the General Partner in accordance with sub-paragraph (ii) multiplied by the Paid-Up Proportion as at the Initial Closing Date;

(iv) (information and documents) the person provides 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 admit the person as a Limited Partner;

(v) (Venture Capital Limited Partnership) either:

A. the Partnership is a Venture Capital Limited Partnership; or

B. the Partnership is conditionally registered under section 13-5(1) of the Venture Capital Act, and the only conditions that remain to be satisfied before the Partnership becomes a Venture Capital Limited Partnership comprise one or more of the following:

I. that the committed capital (as defined in section 995-1 of the Tax Act) of the Partnership is at least $20,000,000; and

II. any other conditions related to the condition referred to in sub-paragraph (I); and

(vi) (Capital Commitments) the total of the Capital Commitments of the persons admitted as Limited Partners on the Initial Closing Date is at least the amount specified in clause 5 of schedule A but not more than the amount specified in clause 6 of schedule A.

In order for the Partnership to be registered unconditionally under the Venture Capital Act, the total of the Capital Commitments of the Limited Partners must be at least A$20 million.

(b) Until the Partnership becomes a Venture Capital Limited Partnership, the General Partner must hold all payments received in accordance with clause 3.1(a)(iii) in an account with an Authorised Deposit-Taking Institution.

(c) If the Partnership does not become a Venture Capital Limited Partnership within 120 days after there is at least one Initial Subscriber (or any later date agreed between the General Partner and the Initial Subscribers), the General Partner must repay to each Initial Subscriber all payments made by the Initial Subscriber in accordance with clause 3.1(a)(iii), adjusted for any interest earned, or loss made, on the holding of the payment in accordance with paragraph (b).

(d) The General Partner may not make any Capital Contribution but an Affiliate or Associate of the General Partner may become a Limited Partner in accordance with this deed.

3.2 Retirement of the Initial Limited Partner

At the first time the Register is amended under clause 3.3(b):

(a) the Initial Limited Partner:

(i) automatically retires from the Partnership without any further act or requirement on the part of the Initial Limited Partner; and

(ii) has no further rights or obligations under this deed;

(b) the General Partner and each Limited Partner releases the Initial Limited Partner from all obligations or liabilities arising under or in respect of the Partnership or this deed (whether arising before, on or after the retirement of the Initial Limited Partner) other than the obligations of the Initial Limited Partner under clause 3.3(a); and

(c) the General Partner (in its personal capacity) unconditionally and irrevocably indemnifies the Initial Limited Partner on demand by the Initial Limited Partner against any claim, loss, damage or Outgoing which the Initial Limited Partner pays, suffers or incurs in respect of the Partnership or this deed (whether arising before, on or after the retirement of the Initial Limited Partner). 

3.3 Recording the admission of Initial Subscribers and retirement of the Initial Limited Partner

(a) The Initial Limited Partner must, at least 2 Business Days before the Initial Closing Date, provide any information and execute and deliver any documents to the General Partner or a 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 to record the retirement of the Initial Limited Partner in accordance with clause 3.2 (Retirement of the Initial Limited Partner).

(b) Each Initial Subscriber must, at least 2 Business Days before the Initial Closing Date, provide any information and execute and deliver any documents to the General Partner or a 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 on the Initial Closing Date to record the Initial Subscriber as a Limited Partner with a limit of liability equal to the Capital Commitment of the Initial Subscriber.

(c) On admission of an Initial Subscriber as a Limited Partner by recording the Initial Subscriber as a Limited Partner in accordance with paragraph (b):

(i) the Initial Subscriber may enforce the provisions of this deed against each other current or former Partner as if the Initial Subscriber were a Limited Partner under this deed from the Initial Closing Date; and

(ii) each other current or former Partner may enforce the provisions of this deed against the Initial Subscriber as if the Initial Subscriber were a Limited Partner under this deed from the Initial Closing Date.

3.4 Admission of additional Limited Partners and increases in Capital Commitments

(a) The General Partner may admit a person as a Limited Partner under paragraph (b) or increase the Capital Commitment of a Limited Partner under paragraph (c) only if the total of the Capital Commitments of the Limited Partners immediately after the admission or increase does not exceed the amount specified in clause 6 of schedule A.

(b) The General Partner may admit a person as a Limited Partner on a Closing Date as provided in clause 3.5(a) if: 

(i) (Closing Date) the Closing Date is after the Initial Closing Date and on or before the Final Closing Date;

(ii) (Deed of Accession) the person executes a Deed of Accession and delivers it to the General Partner;

(iii) (acceptance) the General Partner notifies the person that the General Partner accepts the Deed of Accession, which the General Partner may in its absolute discretion decline to do including if:

A. the Deed of Accession specifies a Capital Commitment which is less than the amount specified in clause 4 of schedule A; or

B. the person (and any person for whom it may have executed the Deed of Accession as trustee, nominee, custodian or sub custodian) does not comply with any requirements that the General Partner has, in its absolute discretion, set in respect of the Closing at which the person is to be admitted, including the General Partner receiving any information it reasonably requires to establish that the offer of an interest in the Partnership to the person and the creation of an interest of the person in the Partnership would not:

I. require the General Partner or the Partnership to prepare or provide a Disclosure Document or Product Disclosure Statement;

II. require the Partnership to be a Registered Scheme; or

III. result in a breach of an applicable law by the General Partner or the Partnership;

(iv) (Capital Contribution) the person pays a Capital Contribution of the amount notified to the person by the General Partner, being an amount equal to the total of:

A. the Capital Commitment of the person as specified in the Deed of Accession executed by the person and accepted by the General Partner in accordance with sub-paragraph (iii) multiplied by the Paid-Up Proportion as at the Closing Date; and

B. the Late Capital Premium in respect of the amount determined under sub-paragraph (A); and

(v) (information and documents) the person provides any information and executes and delivers any documents to the General Partner or a person specified by the General Partner, which the General Partner reasonably considers to be necessary or desirable to admit the person as a Limited Partner.

(c) The General Partner may increase the Capital Commitment of a Limited Partner on a Closing Date as provided in clause 3.5(b) if:

(i) the Closing Date is after the Initial Closing Date and on or before the Final Closing Date;

(ii) the General Partner notifies the Limited Partner that the General Partner accepts the increase, which the General Partner may in its absolute discretion decline to do; and

(iii) the Limited Partner pays a Capital Contribution of the amount notified to the Limited Partner by the General Partner, being an amount equal to the total of:

A. the amount of the increase multiplied by the Paid-Up Proportion as at the Closing Date; and

B. the Late Capital Premium in respect of the amount determined under sub-paragraph (A).

(d) A proportion of the amount by which the Capital Contribution by a Limited Partner under paragraph (b)(iv) or (c)(iii) exceeds the amount referred to in paragraph (b)(iv)(A) or (c)(iii)(A) (as relevant) must, despite any other provision of this deed, be allocated to each Capital Account of a Limited Partner as at immediately before the Closing.

(e) The proportion allocated under paragraph (d) to the Capital Account of a Limited Partner as at immediately before the Closing referred to in paragraph (d) must be equal to the proportion of the Capital Commitment of the Limited Partner as at immediately before the Closing to the total of the Capital Commitments of the Limited Partners as at immediately before the Closing.

(f) As soon as practicable after the admission of a person as a Limited Partner under paragraph (b) or an increase in the Capital Commitment of a Limited Partner under paragraph (c), the General Partner must adjust Capital Accounts of Partners so that the balance of each Capital Account of a Partner as at the time of the admission or increase (as relevant) equals the amount that would be required to be distributed to the Partner under clause 6 (Distributions other than in dissolution) if the total of the balances of the Capital Accounts of the Partners as at that time were available for distribution under clause 6 (Distributions other than in dissolution).

3.5 Recording additional Limited Partners and increases in Capital Commitments

(a) Each person being admitted as a Limited Partner as referred to in clause 3.4(b) must, at least 2 Business Days before the Closing Date on which the person is being admitted, provide any information and execute and deliver any documents to the General Partner or a 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 on the Closing Date to record the person as a Limited Partner with a limit of liability equal to the Capital Commitment of the person.

(b) Each Limited Partner whose Capital Commitment is being increased as referred to in clause 3.4(c) must, at least 2 Business Days before the Closing Date on which the Capital Commitment is being increased, provide any information and execute and deliver any documents to the General Partner or a 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 on the Closing Date to record the Limited Partner with a limit of liability equal to the increased Capital Commitment.

(c) On admission of a person as a Limited Partner by recording the person as a Limited Partner in accordance with paragraph (a):

(i) the person may enforce the provisions of this deed against each other current or former Partner as if the person were a Limited Partner under this deed from the Initial Closing Date; and

(ii) each other current or former Partner may enforce the provisions of this deed against the person as from the admission of the person as a Limited Partner.

(d) Each Partner consents to the admission of Limited Partners and increases in Capital Commitments of Limited Partners under clause 3.4 (Admission of additional Limited Partners and increases in Capital Commitments) and this clause 3.5 (Recording additional Limited Partners and increases in Capital Commitments).

3.6 Capital calls

(a) Subject to paragraph (b), if the Paid-Up Proportion is less than 100%, the General Partner may increase the Paid-Up Proportion to a percentage not exceeding 100%.

(b) The General Partner may not increase the Paid-Up Proportion after the Investment Period or while a Capital Call Relief Event subsists other than for the purpose of:

(i) making an investment in an entity in which the Partnership has already made or makes an investment or in an Associate of the entity;

(ii) making an investment which the Partnership already has an actual or contingent obligation to make;

(iii) making an investment which has been approved by Special Majority Resolution;

(iv) making an investment which has been approved by the General Partner before the end of the Investment Period or the occurrence of the Capital Call Relief Event (as relevant) and is made within 6 months after the end of the Investment Period or the occurrence of the Capital Call Relief Event (as relevant) or within any longer period approved by Special Majority Resolution; or

(v) paying or satisfying a debt, obligation or Outgoing of the Partnership other than the making of an investment.

(c) If the General Partner determines an increase in the Paid-Up Proportion under paragraph (a), the General Partner must, by notice to each Limited Partner, request each Limited Partner to pay by a date specified in the notice, being the same date for all Limited Partners, a Capital Contribution of an amount equal to the increase in the Paid-Up Proportion multiplied by the Capital Commitment of the Limited Partner as at the date of the notice.

(d) Within the period specified in a notice under paragraph (c) or the period specified in clause 9 of schedule A, whichever is longer, each Limited Partner must comply with the notice under paragraph (c) from the General Partner to the Limited Partner.

(e) The General Partner must, before the end of the Investment Period and within 10 Business Days after the occurrence of a Capital Call Relief Event, give notice to each Limited Partner of the total amount of payments that the General Partner estimates may be required under paragraph (b) for the purposes referred to in sub-paragraph (b)(ii) or (iv).

(f) A notice under paragraph (e) does not limit the operation of paragraph (b).

(g) Subject to clause 4 (Contribution arrears and other default), no premium or interest is payable on a Capital Contribution under this clause 3.6.

3.7 Timing of Capital Contributions

For the purposes of this deed, each Capital Contribution by a Limited Partner is deemed to have been paid at the later of:

(a) Close of Business on the date on which the Capital Contribution is due; and

(b) Close of Business on the date on which the Capital Contribution is actually received in cleared funds by the Partnership.

3.8 Decrease in the Paid-Up Proportion

(a) The General Partner may in its absolute discretion decrease the Paid-Up Proportion if:

(i) the General Partner makes a distribution under clause 6 (Distributions other than in dissolution);

(ii) the General Partner gives notice to the Limited Partners on or before the date of the distribution of the amount (which may be all) of the distribution to which this clause 3.8 applies;

(iii) the distribution is in cash or other immediately available funds of the Partnership; and

(iv) the amount of the distribution to which this clause 3.8 applies does not exceed the total amount of:

A. the Capital Contributions that were due or paid under clause 3 (Capitalisation of the Partnership) within 6 months before the distribution; and

B. realisations in cash or other immediately available funds of Investments (other than Liquidity Investments) within 12 months before the distribution,
less the total of:

C. the total amount of the Capital Contributions referred to in sub-paragraph (A) that have been applied by the Partnership (including to make a distribution under clause 6 (Distributions other than in dissolution) but excluding to make a Liquidity Investment);

D. each amount by which a Capital Contribution that was paid under clause 3.4(b)(iv) or (c)(iii) within 6 months before the distribution exceeds the amount referred to in clause 3.4(b)(iv)(A) or (c)(iii)(A) respectively; and

E. the total amount of realisations referred to in sub-paragraph (B) that have been applied by the Partnership (including to make a distribution under clause 6 (Distributions other than in dissolution) but excluding to make a Liquidity Investment).

(b) The decrease in the Paid-Up Proportion under paragraph (a) is the proportion of the amount of the distribution to which this clause 3.8 applies as referred to in sub-paragraph (a)(ii) to the total of the Capital Commitments of the Limited Partners as at the time of the distribution.

3.9 Capital Accounts

Each Capital Contribution by a Limited Partner under this clause 3 must be allocated to the Capital Account of the Limited Partner except as otherwise provided in clause 3.4(d) and (e).

3.10 Borrowing and security by the Partnership

(a) A loan to the Partnership or advance of money for the benefit of the Partnership made by a Partner (Lending Partner) which is permitted under this deed does not:

(i) increase the Capital Account of the Lending Partner;

(ii) entitle the Lending Partner to a greater share of distributions by the Partnership; or

(iii) entitle the Lending Partner to a greater proportion of Partnership Profit or Partnership Losses.

(b) The amount of a loan or advance by a Lending Partner to the Partnership is a debt owed by the Partnership to the Lending Partner on the terms and conditions, including as to interest on the loan or advance, agreed between the Lending Partner and the General Partner.

 

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