Consensus One Venture Capital Limited Partnership Deed


11. LIABILITY AND INDEMNIFICATION

11.1 Liability of the Limited Partners 
11.2 Liability of the General Partner and the Advisory Committee 
11.3 Dealings 
11.4 Indemnity of the General Partner 
11.5 Indemnity of directors of investee companies 
11.6 Indemnity of members of the Advisory Committee 
11.7 Tax 
11.8 Indemnity as attorney 
11.9 Conduct of claims

11.1 Liability of the Limited Partners

(a) The liability of a Limited Partner to contribute to the debts and obligations of the Partnership is not to exceed the total amount from time to time recorded in the Register as the limit of liability in respect of the Limited Partner.

(b) Except as otherwise provided in this deed, under the Partnership Act or any other applicable law, no Limited Partner has any personal liability to any other Partner or the Partnership in excess of that contemplated under paragraph (a).

11.2 Liability of the General Partner and the Advisory Committee

(a) The General Partner is not personally liable for the return of a Capital Contribution paid by a Limited Partner.

(b) Subject to paragraphs (a), (c) and (d), none of the General Partner nor any member of the Advisory Committee is liable for any claim, loss, damage or Outgoing paid, suffered or incurred by the Partnership or a Limited Partner except to the extent that:

(i) the liability arises under the Partnership Act or any Other Jurisdiction Partnership Act; or
(ii) the claim, loss, damage or Outgoing results from:

A. a material breach of an obligation of the General Partner or member of the Advisory Committee (as relevant) under this deed which is either:

I. without a belief by it in good faith that it performed the obligation; or

II. gross negligence by it;

B. a material breach of fiduciary duty by the General Partner or member of the Advisory Committee (as relevant); or

C. fraud or dishonesty by the General Partner or member of the Advisory Committee (as relevant).

(c) Sub-paragraph (b)(ii)(A) does not apply to the General Partner or a member of the Advisory Committee in respect of any claim, loss, damage or Outgoing paid, suffered or incurred by the Partnership or a Limited Partner as a result of any of the following matters except to the extent that the claim, loss, damage or Outgoing results from a breach of clause 8.7(e) or 8.9(c) by the General Partner or a failure by the member of the Advisory Committee to exercise due care and skill in performing its obligations under this deed (as relevant):

(i) the General Partner or member of the Advisory Committee acting or failing to act as required by law or in accordance with a decree, order or judgment of a court;

(ii) the General Partner or member of the Advisory Committee relying on a signature, marking or document;

(iii) the General Partner or member of the Advisory Committee acting in accordance with a valid resolution of Limited Partners;

(iv) the General Partner or member of the Advisory Committee acting in accordance with a recommendation, advice or a decision of the Advisory Committee;

(v) a payment made to a Government Agency on any basis even if the payment need not have been made; or

(vi) an act or omission of, or reliance by the General Partner or member of the Advisory Committee on services of or information or advice from, an Appointee.

(d) Sub-paragraphs (b)(ii)(A) and (B) do not apply to any claim, loss, damage or Outgoing paid, suffered or incurred by the Partnership or a Limited Partner to the extent it results from:

(i) a failure by the General Partner to effect insurance by or for the benefit of the Partnership or of the Investments or business of the Partnership; or

(ii) the impracticability or impossibility of the General Partner exercising a right or power or performing an obligation for any reason or reasons beyond the control of the General Partner.

(e) Sub-paragraphs (b)(ii)(A) and (B) do not apply to the General Partner or a member of the Advisory Committee in respect of any claim, loss, damage or Outgoing paid, suffered or incurred by the Partnership or a Limited Partner to the extent that the claim, loss, damage or Outgoing results from an act or omission or is caused or contributed to by an act or omission of any person other than the General Partner or the member of the Advisory Committee respectively.

11.3 Dealings

Despite any other provision of this deed, the General Partner need not take any action (including enter into any contract or commitment):

(a) unless in the opinion of the General Partner, the Investments are sufficient to indemnify it for any actual, anticipated or contingent claim, loss, damage or Outgoing of or against the Partnership or the General Partner in relation to the action; or

(b) which involves the Partnership or the General Partner incurring any actual or contingent liability (other than to a Limited Partner under this deed) unless the liability of the Partnership or the General Partner respectively is limited in a manner satisfactory to the General Partner in its absolute discretion.

11.4 Indemnity of the General Partner

(a) In addition to any indemnity under applicable law and the indemnity under clauses 11.7 (Tax) and 11.8 (Indemnity as attorney), each current or former General Partner has a right to be fully indemnified out of the assets of the Partnership:

(i) in respect of any loss, damage or Outgoing of:

A. the current or former General Partner in relation to the role, rights, powers and obligations of the current or former General Partner under this deed or in relation to the Partnership; or

B. the Partnership payable under this deed to the current or former General Partner; and

(ii) against all actions, proceedings, claims and demands brought against the current or former General Partner in its capacity as General Partner in respect of any matter or thing done or omitted,

except:

(iii) to the extent the current or former General Partner is not under this clause 11 excluded from liability for the loss, damage, Outgoing, action, proceeding, claim or demand; and

(iv) Overheads of the current or former General Partner or an Appointee.

(b) The right of indemnity under paragraph (a) in respect of any loss, damage, Outgoing, action, proceeding, claim or demand is not lost or impaired by reason of a separate act or omission (whether before or after the occurrence of the loss, damage, Outgoing, action, proceeding, claim or demand) in breach of this deed or otherwise.

11.5 Indemnity of directors of investee companies

Each current or former General Partner may in its absolute discretion indemnify out of assets of the Partnership any person who is or has, as a result of the existence, exercise or performance of rights or obligations of the Partnership, or the exercise of rights or powers of the current or former General Partner under this deed, been a director, alternate director or shadow director of a company in which any assets of the Partnership have been, are or are proposed or required to be invested, or of an Affiliate of the company, in relation to any loss, damage or Outgoing paid, suffered or incurred by the person in relation to the position of the person as such a director, except for any loss, damage or Outgoing paid, suffered or incurred by the person as a result of fraud or dishonesty of the person.

11.6 Indemnity of members of the Advisory Committee

(a) The General Partner must indemnify out of the available assets of the Partnership each current or former member of the Advisory Committee in respect of any liability suffered or incurred by the current or former member as a result of any claim by any person that the current or former member is liable in the capacity as a member of the Advisory Committee, except to the extent the current or former member is not under this clause 11 excluded from the liability.

(b) The right of indemnity under paragraph (a) in respect of a liability is not lost or impaired by reason of a separate matter (whether before, on or after the occurrence of the liability) in breach of this deed.

(c) The General Partner must take all steps reasonably necessary to give effect to the indemnity under paragraph (a).

11.7 Tax

Without limiting clause 11.4 (Indemnity of the General Partner), each current or former Limited Partner indemnifies each current or former General Partner against any actual or contingent liability for any Tax in respect of any Partnership Profit or Partnership Loss allocated to the current or former Limited Partner.

11.8 Indemnity as attorney

Each current or former Limited Partner indemnifies each current or former General Partner against any claim, loss, damage or Outgoing arising directly or indirectly from the lawful exercise of a power of the current or former General Partner under clause 14 (Power of attorney) on behalf of the Limited Partner.

11.9 Conduct of claims

(a) Each Limited Partner must give notice to the General Partner of:

(i) any threatened legal proceedings against the Limited Partner in relation to the Partnership, within 5 Business Days after the Limited Partner becomes aware of the threatened legal proceedings, setting out full details of the threatened legal proceedings which are known to the Limited Partner; and

(ii) any actual legal proceedings against the Limited Partner in relation to the Partnership, within 5 Business Days after service of a statement of claim or other legal document in relation to the legal proceedings on the Limited Partner, setting out full details of the claim under the legal proceedings.

(b) The General Partner may, in respect of any legal proceedings or potential legal proceedings brought or threatened by a person (other than a current or former Partner in that capacity) against the Partnership or the Partners or a Partner in relation to the Partnership (Claim), conduct and manage the Claim on behalf of the Partnership and any Partners against whom the Claim is made.

(c) Each Limited Partner authorises the General Partner to do any of the following things in respect of any Claim, and consents to any of the following actions being taken by the General Partner:

(i) avoid, contest, compromise, settle or defend the Claim;

(ii) approve the response of the Partnership or a Partner to the Claim;

(iii) select the firm of solicitors to be appointed and to be retained from time to time by the Partnership or a Partner in relation to the Claim and select a barrister to be engaged by the Partnership or a Partner in relation to the Claim as the General Partner considers to be necessary or desirable;

(iv) review and copy all correspondence, books, records, files and documents held by a person, including a Limited Partner, relating to the Claim;

(v) consult with all relevant personnel of a Limited Partner regarding the response of the Partnership to the Claim to the extent the General Partner reasonably considers necessary to progress the Claim;

(vi) obtain from a Limited Partner, evidence relating to the Claim as reasonably required by the General Partner;

(vii) approve an action by a Limited Partner to file a counterclaim in respect of the Claim;

(viii) commence any separate proceedings the General Partner considers appropriate in respect of the Claim;

(ix) approve any proposed action or response by the Partnership in relation to negotiations, settlement discussions or offers of compromise made in relation to the Claim or a counterclaim referred to in sub-paragraph (vii) or other proceedings referred to in paragraph (viii);

(x) conduct legal proceedings arising out of the Claim; and

(xi) direct a Limited Partner to do any of the actions contemplated in sub-paragraphs (i) to (x).

(d) Unless the General Partner acts negligently, or fails to act promptly, no Limited Partner may do anything (including accepting, compromising or paying a claim or demand or agreeing to arbitrate, compromise or settle a Claim) which may lead to or otherwise affect the liability of the Partnership or a Partner under a Claim without the prior written approval of the General Partner.

(e) The Partnership must reimburse the General Partner in respect of any Outgoings incurred by the General Partner in taking action under paragraph (b) or (c).

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