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APPENDIX D(2)
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF [NEW FUND HUB], L.P.
Dated as of _____________ ____, 20____This AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP of [New Fund Hub], L.P. (the "Partnership"), is made as of
the ____ day of ___________, 20__, by and among [Name of GP], a
Delaware limited liability company registered under the laws of the Cayman
Islands, as the General Partner, the Persons listed from time to time in Part II
of Schedule A of this Agreement, as Limited Partners (the "Limited
Partners"), and _____________ as the Withdrawing Limited Partner (the
"Withdrawing Limited Partner").
1. DEFINITIONS; INTERPRETATION.
1.1. Definitions.
As used herein the following terms shall have the following
respective meanings:
Additional Limited Partner -- as defined in section 4.4(a).
Adjusted Rate -- a rate of interest equal to the aggregate
from time to time of the Prime Rate and two percent (2.0%) per annum.
Advisers Act -- the United States Investment Advisers Act of
1940, as the same may be hereafter amended from time to time.
Affiliate -- with reference to any Person, any other Person of
which such Person is a member, director, officer, manager, general partner or
employee or any other Person directly or indirectly controlling or controlled
by or under direct or indirect common control with such Person.
Agreement -- this Agreement of Limited Partnership, as
amended from time to time as provided herein.
Assignment -- as defined in section 10.2.
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Assumed Income Tax Rate -- the highest effective marginal
combined federal, state and local income tax rate for a fiscal year prescribed
for any individual or corporation resident in New York City (taking into
account the character of the income and the deductibility of state and local
income taxes for United States federal income tax purposes).
Authorized Representative -- as defined in section 15.15.
Bankruptcy Code -- Title 11 of the United States Code
entitled "Bankruptcy", as the same may be hereafter amended from time to
time, and any successor statute or statutes thereto.
Beneficial Interest -- for the purpose of determining certain
consent rights hereunder, the interest of each Beneficial Owner as determined
by the reference to the amount of such Beneficial Owner's commitment of
capital to the Limited Partner through which it is investing in the Partnership.
The sum of the Beneficial Interests shall equal 100%.
Beneficial Fund-Wide Owner -- as of any date of
determination, each Beneficial Owner and each limited partner of the Parallel
Fund, provided that in no event shall the term Beneficial Fund-Wide Owner
include any Affiliate of the General Partner.
Beneficial Owner -- as of any date of determination, each
limited partner, shareholder, member or other equity owner of any Limited
Partner, provided that in no event shall the term Beneficial Owner include
any Affiliate of the General Partner.
Book Value -- with respect to any Partnership asset, the
asset's adjusted basis for federal income tax purposes, except that the Book
Values of all Partnership assets shall be adjusted to equal their respective
Fair Market Values, in accordance with the rules set forth in Section 1.704-
1(b)(2)(iv)(f) of the Treasury Regulations, except as otherwise provided
herein, immediately prior to: (a) the date of the acquisition of any additional
Interest by any new or existing Partner in exchange for more than a de
minimis Capital Contribution, (b) the date of the actual distribution of more
than a de minimis amount of Partnership property (other than a pro rata
distribution) to a Partner or (c) the date of the actual liquidation of the
Partnership within the meaning of Treasury Regulations Section 1.704-
1(b)(2)(ii)(g); provided that adjustments pursuant to clauses (a) and (b) above
shall be made only if the General Partner determines, in its sole discretion,
that such adjustments are necessary or appropriate to reflect the relative
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economic interests of the Partners. The Book Value of any Partnership asset
distributed to any Partner shall be adjusted immediately prior to such
distribution to equal its Fair Market Value. The Book Value of any
Partnership asset shall be adjusted to reflect any write-down that constitutes a
Disposition.Business Day -- any day excluding a Saturday, a Sunday and
any other day on which banks are required or authorized to close in New York.
Capital Account -- as defined in section 5.1.
Capital Commitment -- the amount set forth opposite such
Partner's name on Schedule A hereto, as adjusted from time to time pursuant
to section 4.4.
Capital Contribution -- a contribution to the capital of the
Partnership made pursuant to this Agreement.
Closing -- with respect to any Limited Partner, the sale to
and the subscription for and purchase by, such Limited Partner of its Interest
and its admission as a Limited Partner, pursuant to its Subscription
Agreement.
Code -- the United States Internal Revenue Code of 1986, as
the same may be hereafter amended from time to time.
Commitment Period -- the period beginning on the date of
the Initial Closing and terminating upon the earliest to occur of (a) the fifth
anniversary of the Final Closing Date, (b) the date on which an amount equal
to the aggregate Capital Commitments to the Partnership has been invested
or formally reserved for such purposes, (c) the date of an Event of
Termination and (d) a determination by Beneficial Fund-Wide Owners (other
than Defaulting Fund-Wide Owners) with at least sixty-six and two-thirds
percent (66-2/3%) of the aggregate Fund-Wide Interests of all Beneficial
Fund-Wide Owners (other than Defaulting Fund-Wide Owners) to terminate
the Commitment Period in the event that a majority of the Principals cease to
be actively involved with the business of the Manager or the General Partner.
Competitive Fund -- as defined in section 7.7(c).
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Confidential Matter -- as defined in section 15.15.
Damages -- any and all damages, disbursements, suits,
claims, liabilities, obligations, judgments, fines, penalties, charges, amounts
paid in settlement, expenses, costs and expenses (including, without
limitation, attorneys' fees and expenses) arising out of or related to litigation
and interest on any of the foregoing.
Defaulting Beneficial Owner -- a Beneficial Owner that has
failed to make a capital contribution or other monetary payment to the
Limited Partner through which it is indirectly investing in the Partnership and
such failure to make such payment continues for at least five (5) Business
Days from the date such payment was due.
Defaulting Fund-Wide Owner -- with respect to a Beneficial
Fund-Wide Owner that is a Beneficial Owner, a Defaulting Beneficial Owner
and with respect to a Beneficial Fund-Wide Owner that is a limited partner of
the Parallel Fund, a limited partner that has failed to make a capital
contribution or other monetary payment to the Parallel Fund and such failure
to make such payment continues for at least five (5) Business Days from the
date such payment was due.
Defaulting Limited Partner -- a Limited Partner with respect
to which an Event of Default has occurred.
Default Rate -- the lesser of (a) the aggregate of the Adjusted
Rate and four percent (4%) per annum and (b) the maximum rate permitted
by law.
Disabling Event -- as defined in section 13.2(a).
Disposition -- with respect to any Portfolio Fund (a) the sale,
exchange, redemption, assignment, transfer, repayment, repurchase or other
disposition by the Partnership of all or substantially all of the Partnership's
interest in such Portfolio Fund for cash or property that can be distributed to
the Partners pursuant to section 6.3, or (b) the receipt by the Partnership of
one or more distributions of cash or property from such Portfolio Fund
which, alone or together with prior such distributions, represent all or
substantially all of the Partnership's interest in the assets of such Portfolio
Fund. A Disposition shall be deemed to include the Partnership's interest in a
Portfolio Fund becoming worthless within the meaning of Section 165(g) of
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the Code or written down in accordance with GAAP (to the extent of any
such write-down only).Distributable Cash -- the excess of the sum of all cash
receipts of all kinds over cash disbursements (or reserves therefor) for
expenses of the Partnership.
Drawdown -- as defined in section 4.1(a).
Event of Default -- one of the events described in the first
sentence of section 4.3(a).
Event of Termination -- as defined in section 12.1.
Exchange Act -- the United States Securities Exchange Act
of 1934, as the same may be hereafter amended from time to time.
Fair Market Value -- (a) as to any Securities that are listed or
admitted to trading on any national securities exchange on any trading day,
the amount equal to (i) the last sale price of such Securities, regular way, on
such date or, if no such sale takes place on such date, the average of the
closing bid and asked prices thereof on such date, in each case as officially
reported on the principal national securities exchange on which such
Securities are then listed or admitted to trading, or (ii) if such Securities are
not then listed or admitted to trading on any national securities exchange but
are reported through the automated quotation system of a registered
securities association, the last sale price of such Securities on such date, or if
no such sale takes place on such date, the average of the closing bid and
asked prices of such Securities on such date as shown by such automated
quotation system, and (b) as to any other property on any date, the fair
market value of such property on such date as determined in good faith by
the General Partner. The General Partner shall be entitled to determine the
fair market value of any interest in a Portfolio Fund by reference to the most
recent financial statements prepared by such Portfolio Fund, unless, in the
reasonable judgment of the General Partner, other relevant factors indicate
that the valuation determined by reference to such financial statements is
inappropriate, in which case, the General Partner shall make its
determination based on all relevant factors.
Final Closing Date -- the date on which the last Closing
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occurs or, if later, the date on which the last closing of the sale of interests in
the Parallel Fund occurs. Funding Notice -- as defined in section 4.1(a).
Fund-Wide Interest -- for the purpose of determining certain
consent rights hereunder, the interest of each Beneficial Fund-Wide Owner
as determined by reference to the amount of such Beneficial Fund-Wide
Owner's commitment of capital to (a) the Limited Partner through which it is
investing in the Partnership, in the case of a Beneficial Owner or (b) the
Parallel Fund, in the case of each other Person that is a Beneficial Fund-Wide
Owner. The sum of the Fund-Wide Interests shall equal 100%.
Fund-Wide Remaining Capital Commitments -- for purposes
of determining the allocations in respect of Portfolio Investments among the
Partners and the Parallel Fund, with respect to (a) any Partner on any date, an
amount equal to the positive excess, if any, of (i) such Partner's Capital
Commitment, over (ii) the aggregate amount of all Capital Contributions
made by such Partner to the Partnership in accordance with the provisions of
section 4, as adjusted from time to time pursuant to section 4.4 and (b) with
respect to the Parallel Fund an amount equal to the positive excess, if any of
(i) the total capital commitments to the Parallel Fund over (ii) the aggregate
amount of all "capital contributions" called for by the Parallel Fund,
assuming that the determination of what constitutes a "capital contribution"
for purposes of the Parallel Fund, as well as adjustments thereto, are
calculated in the same manner as "Capital Contributions" are determined and
adjusted hereunder.
GAAP -- generally accepted accounting principles in the
United States of America from time to time.
General Partner -- the Person identified as the General
Partner in the introduction to this Agreement and its replacement or
successor from time to time as permitted by this Agreement.
Governmental Authority -- any nation or government, any
state or other political subdivision thereof and any other Person exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
Hot Issues -- has the meaning assigned to such term in the
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Interpretation of the Board of Governors of the NASD, entitled "Free Riding
and Withholding" as the same may be amended, supplemented or interpreted
in writing by the NASD from time to time (the "NASD Interpretation"),
pursuant to IM-2110-1 of the NASD Conduct Rules. Hot Issues Account -- as defined in section 4.5.Initial Closing -- the first Closing under which any Limited
Partner acquires an Interest pursuant to the Subscription Agreements.
Interest -- the entire limited partnership interest owned by a
Limited Partner in the Partnership at any particular time, including the right
of such Limited Partner to any and all benefits to which a Limited Partner
may be entitled as provided in this Agreement, together with the obligations
of such Limited Partner to comply with all the terms and provisions of this
Agreement.
Internal Revenue Service -- the Internal Revenue Service or
its successor.
Investment Company Act -- the United States Investment
Company Act of 1940, as the same may be hereafter amended from time to
time.
Investment Term -- as defined in section 2.1.
Limited Partners -- as defined in the introduction to this
Agreement.
Liquidation Representative -- as defined in section 12.2.
Majority in Beneficial Interests -- Beneficial Owners (other
than any Defaulting Beneficial Owner) with more than one-half of the
aggregate Beneficial Interests of all Beneficial Owners (other than any
Defaulting Beneficial Owner).
Majority in Fund-Wide Interests -- Beneficial Fund-Wide
Owners (other than any Defaulting Fund-Wide Owner) with more than one-
half of the aggregate Fund-Wide Interests of all Beneficial Fund- Wide
Owners (other than any Defaulting Fund-Wide Owner).
Majority in Interest -- Limited Partners (other than
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Defaulting Limited Partners) with more than one-half of the aggregate
Voting Interests of all Limited Partners (other than Defaulting Limited
Partners).Manager -- the Affiliate of the General Partner designated as
such to the Limited Partners pursuant to the governance document(s) of such
Limited Partner.
Marketable Security -- any Security that is (a) listed on one
or more national securities exchanges on such date, (b) designated as a
National Market System Security under Rule 11Aa2-1 of the Exchange Act
and traded on the Nasdaq on such date, or (c) with respect to which the last
"bid" and "ask" prices on such date are reported by the Nasdaq or are
reported in the "pink sheets" published by the National Daily Quotation
Service.
NASD -- the National Association of Securities Dealers, Inc.
NASD Interpretation -- as defined in the definition of the
term "Hot Issues."
Net Income and Net Loss -- for each fiscal year or other
period, the taxable income or loss of the Partnership, or particular items
thereof, determined in accordance with the accounting method used by the
Partnership for federal income tax purposes with the following adjustments:
(a) all items of income, gain, loss, deduction or expense specially allocated
pursuant to this Agreement (including section 5.2) shall not be taken into
account in computing such taxable income or loss; (b) any income of the
Partnership that is exempt from federal income taxation and not otherwise
taken into account in computing Net Income and Net Loss shall be added to
such taxable income or loss; (c) if the Book Value of any asset differs from
its adjusted tax basis for federal income tax purposes, any gain or loss
resulting from a disposition of such asset shall be calculated with reference to
such Book Value; (d) upon an adjustment to the Book Value of any asset
pursuant to the definition of Book Value, the amount of the adjustment shall
be included as gain or loss in computing such taxable income or loss; (e) if
the Book Value of any asset differs from its adjusted tax basis for federal
income tax purposes the amount of depreciation, amortization or cost
recovery deductions with respect to such asset for purposes of determining
Net Income and Net Loss shall be an amount that bears the same ratio to such
Book Value as the federal income tax depreciation, amortization or other cost
recovery deductions bears to such adjusted tax basis (provided that if the
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federal income tax depreciation, amortization or other cost recovery
deduction is zero, the General Partner may use any reasonable method for
purposes of determining depreciation, amortization or other cost recovery
deductions in calculating Net Income and Net Loss); and (f) except for items
in (a) above, any expenditures of the Partnership not deductible in computing
taxable income or loss, not properly capitalizable and not otherwise taken
into account in computing Net Income and Net Loss pursuant to this
definition, shall be treated as deductible items.Offering Memoranda -- each of the Private Placement
Memoranda of the Limited Partners, as amended, supplemented or modified
from time to time, relating to the offering of interests therein or shares
thereof.
Original Partnership Agreement -- as defined in section 2.1.
Parallel Fund - [Name of Domestic Fund], a Delaware
limited partnership formed substantially simultaneously with, or within three
months prior to, the Partnership.
Partners -- the Limited Partners and the General Partner and
such substituted or additional Partners as shall be admitted to the Partnership
pursuant to section 4.4, 10 or 13.
Partnership -- as defined in the introduction to this
Agreement.
Partnership Act -- as defined in section 2.1.
Percentage Interest -- with respect to any Partner and any
Portfolio Fund, the ratio of such Partner's Capital Contribution in respect of
that Portfolio Investment to the total Capital Contributions of all Partners in
respect of that Portfolio Investment, as adjusted from time to time pursuant to
section 4.4.
Person -- an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political
subdivision thereof.
Portfolio Fund -- an investment fund whose Securities have
been acquired, directly or indirectly, in whole or in part, by the Partnership.
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Portfolio Investment -- an investment in Securities that have
been acquired, directly or indirectly, in whole or in part, by the Partnership or
Securities issued to the Partnership as a dividend on, or in reclassification or
exchange of, other Securities held by the Partnership.
Prime Rate -- the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank, N.A. (or any
successor thereto) as its prime or base rate in effect at its principal office in
New York City. The Prime Rate is not intended to be the lowest rate of
interest charged by such bank in connection with extensions of credit to
debtors.
Principals -- [Names of Key Investment Personnel] and any
other individual who has been approved as a "Principal" by the General
Partner and a Majority in Fund-Wide Interests.
Related Person -- as defined in section 3.2.
Remaining Capital Commitment -- as to any Partner on any
date, an amount equal to the positive excess, if any, of (a) such Partner's
Capital Commitment, over (b) the aggregate amount of all Capital
Contributions made by such Partner to the Partnership in accordance with the
provisions of section 4, as adjusted from time to time pursuant to section 4.4.
Restricted Persons -- a Person to whom a member (or a
person associated with a member) of the NASD is prohibited from selling
Hot Issues.
Securities -- any (a) privately or publicly issued capital
stock, bonds, notes, debentures, commercial paper, bank acceptances, trade
acceptances, trust receipts and other obligations, choses in action, partnership
interests, instruments or evidences of indebtedness commonly referred to as
securities, warrants, options, including puts and calls or any combination
thereof and the writing of such options, and (b) any claims or other causes of
action, matured or unmatured, contingent or otherwise, of creditors and/or
equity holders of any Person against such Person, including, without
limitation, "claim" and "interests", in each case as defined under the
Bankruptcy Code, and all rights and options relating to the foregoing.
Securities Act -- the United States Securities Act of 1933, as
the same may be hereafter amended from time to time.
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Subscription Agreement -- as to any Limited Partner, the
subscription agreement between such Limited Partner and the Partnership
pursuant to which such Limited Partner agrees to become bound by the terms
of this Agreement.
Subsequent Closing -- any Closing that occurs subsequent to
the Initial Closing.
Substitute Limited Partner -- a Limited Partner that is
admitted as a Substitute Limited Partner in accordance with the provisions of
section 10.3.
Tax Matters Partner -- as defined in section 7.6.
Treasury Regulations -- the Income Tax Regulations
promulgated under the Code, as the same may be hereafter amended from
time to time.
Unrecovered Capital -- as of any date and with reference to
any Portfolio Fund, an amount (if positive) equal to (i) the Partnership's
original cost of its interest in such Portfolio Fund (exclusive of any unfunded
capital commitment assumed or undertaken by the Partnership with respect
to such Portfolio Fund), plus (ii) all additional capital contributions actually
made by the Partnership with respect to such Portfolio Fund as of such date,
minus (iii) the total of all amounts (whether in cash or in property)
distributed by the Partnership as of such date in respect of or attributable to
such Portfolio Fund.
U.S. Dollars and $ -- lawful money of the United States of
America.
Voting Interests -- for the purpose of certain voting or
consent rights hereunder, at any time (a) prior to the first investment by the
Partnership in a Portfolio Investment, the interest of each Limited Partner as
determined by reference to the amount of such Limited Partner's Capital
Commitment, and (b) after the first investment by the Partnership in a
Portfolio Investment, the interest of each Limited Partner as determined by
reference to the amount of such Limited Partner's Capital Account balance.
Withdrawing Limited Partner -- as defined in the
introduction to this Agreement.
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1.2. Accounting Terms and Determinations.
All accounting terms used in this Agreement and not otherwise
defined shall have the meaning accorded to them in accordance with GAAP
and, except as expressly provided herein, all accounting determinations shall
be made in accordance with GAAP, consistently applied.
1.3. Interpretation. (a) Schedules, Exhibits, Sections. References to a "Schedule"
or an "Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit
attached to this Agreement and references to a "section" are, unless otherwise
specified, to a section of this Agreement.
(b) Plural. Wherever from the context it appears appropriate,
each term stated in either the singular or the plural shall include the singular
and the plural, and pronouns stated in the masculine, the feminine or neuter
gender shall include the masculine, the feminine and the neuter.
(c) Captions. Captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or
extend or otherwise affect the scope or intent of this Agreement or any
provision hereof.
1.4. General Partner's Standard of Care.
Whenever in this Agreement the General Partner is permitted or
required to make a decision (a) in its "discretion" or under a grant of similar
authority or latitude, the General Partner shall be entitled to consider such
interests and factors as it desires, including its own interests, and shall have
no duty or obligation to give any consideration to any interest of or factors
affecting the Partnership or any other Person or (b) in its "good faith" or
under another express standard, the General Partner shall act under such
express standard and shall not be subject to any other or different standard
imposed by this Agreement or other applicable law.
2. ORGANIZATION.
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2.1. Continuation of Limited Partnership; Term.
The parties to this Agreement hereby agree to continue a limited
partnership pursuant to the provisions of The Exempted Limited Partnership
Law (1997 Revision) of the Cayman Islands, as amended from time to time
(the "Partnership Act"), and in accordance with the further terms and
provisions of this Agreement. This Agreement amends and restates the
Limited Partnership Agreement dated , 20 (the "Original
Partnership Agreement") between the General Partner and the Withdrawing
Limited Partner. The term of the Partnership commenced on the date the Section 9
Statement was filed with the Registrar of Exempted Limited Partnerships and
shall continue, unless the Partnership is sooner dissolved pursuant to section
12, until the tenth anniversary of the Final Closing Date, provided that the
term of the Partnership may be extended by the General Partner, in its sole
discretion, for up to three successive periods of one year for the purpose of
the orderly liquidation of the assets of the Partnership (such term, as so
extended, being referred to as the "Investment Term").
2.2. Name.
The name of the Partnership shall be [New Fund Hub], L.P." or such
other name or names as may be selected by the General Partner from time to
time, and its business shall be carried on in such name with such variations
and changes as the General Partner deems necessary to comply with
requirements of the jurisdictions in which the Partnership's operations are
conducted. The General Partner shall give the Limited Partners prompt
written notice of any change in the name of the Partnership.
2.3. Purpose.
The Partnership is organized primarily for the object and purpose of
(a) acquiring, directly or indirectly, holding for investment, converting and
distributing or otherwise disposing of interests in private equity funds in
accordance with the investment objectives, policies, strategies and
investment restrictions set forth in the Offering Memoranda and (b) engaging
in such additional acts and activities and conducting such other businesses
related or incidental to the foregoing as the General Partner shall in good
faith deem necessary or advisable.
2.4. Places of Business.
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The Partnership shall have its principal place of business at
[Address], or at such other place or places as the General Partner may, from
time to time, select, provided that the Partnership shall not undertake any
business with the public in the Cayman Islands, other than insofar as may be
necessary for the carrying on of the business of the Partnership outside the
Cayman Islands. The Partnership may from time to time have such other
place or places of business in such other jurisdictions as the General Partner
may deem advisable.
2.5. Registered Office in the Cayman Islands.
The address of the Partnership's registered office maintained in the
Cayman Islands is [Address], Cayman Islands.
2.6. Fiscal Year.
The fiscal year of the Partnership shall end on the 31st day of
December in each year. The General Partner shall have the authority to
change the ending date of the fiscal year to any other date required or
allowed under the Code if the General Partner, in its sole discretion, shall
determine such change to be necessary or appropriate. The General Partner
shall promptly give notice of any such change to the Limited Partners.
2.7. Powers.
Subject to the provisions of sections 7 and 14, the Partnership, and
the General Partner acting on behalf of the Partnership, shall be empowered
to do or cause to be done, or not to do, any and all acts deemed by the
General Partner, in its sole discretion, to be necessary or appropriate in
furtherance of the purposes of the Partnership including, without limitation,
the power and authority to:
(a) invest and dispose of investments as set forth in section
7.2;
(b) open, have, maintain and close bank and brokerage
accounts, including the power to draw checks or other orders for the payment
of moneys;
(c) bring and defend actions and proceedings at law or in
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equity or before any governmental, administrative or other regulatory
agency, body or commission;(d) hire consultants, custodians, attorneys, accountants and
such other agents and employees of the Partnership as it may deem necessary
or advisable, and to authorize each such agent and employee to act for and on
behalf of the Partnership;
(e) cause the Partnership to enter into and carry out the terms
of the Subscription Agreements without any further act, approval or vote of
any Partner (including any agreements to induce any Limited Partner to
purchase an Interest);
(f) make all elections, investigations, evaluations and
decisions, binding the Partnership thereby, that may, in the sole judgment of
the General Partner be necessary or appropriate for the acquisition, holding
or disposition of Securities for the Partnership;
(g) enter into, perform and carry out contracts and
agreements of every kind necessary or incidental to the offer and sale of
Interests or to the accomplishment of the Partnership's purposes, and to take
or omit to take such other action in connection with such offer and sale or
with the business of the Partnership as may be necessary or desirable to
further the purposes of the Partnership; and
(h) carry on any other activities necessary to, in connection
with, or incidental to any of the foregoing or the Partnership's business.
2.8. Organizational Certificates and Other Filings.
(a) Authority. The General Partner is hereby authorized to
execute, acknowledge, file and cause to be published, as appropriate, a
declaration pursuant to Section 10 of the Partnership Act and to execute or
cause to be executed all other instruments, certificates, notices and
documents, and to do or cause to be done all such filing, recording,
publishing and other acts as may be deemed by the General Partner, in its
sole discretion, to be necessary or appropriate from time to time to comply
with all applicable requirements for the formation or operation or, when
appropriate, termination of a limited partnership in the Cayman Islands and
all other jurisdictions where the Partnership does or shall desire to conduct its
business.
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(b) Further Assurances. If requested by the General Partner,
the Limited Partners shall immediately execute all certificates and other
documents consistent with the terms of this Agreement necessary for the
General Partner to accomplish all filing, recording, publishing and other acts
as may be appropriate to comply with all requirements for: (i) the formation
and operation of a limited partnership under the laws of the Cayman Islands,
(ii) if the General Partner deems it advisable, the operation of the Partnership
as a limited partnership, or a partnership in which the Limited Partners have
limited liability, in all jurisdictions where the Partnership proposes to operate
and (iii) all other filings required to be made by the Partnership.
3. PARTNERS.
3.1. General and Limited Partners.
The Partnership shall consist of the General Partner, the Limited
Partners listed from time to time in Part II of Schedule A hereto, and such
additional and substituted Partners as may be admitted to the Partnership
pursuant to sections 4, 10 or 13. The General Partner shall cause Schedule A
to be amended from time to time to reflect the admission of any Partner, the
removal or withdrawal of any Partner for any reason or the receipt by the
Partnership of notice of any change of name of a Partner. The General
Partner shall maintain at the Partnership's registered office a written Register
of the Partnership Interests which shall be open to public inspection during
all usual business hours. Such Register shall set forth the name, address and
amount and date of the Capital Contributions of each Partner, as well as the
amount and date of any payment representing a return of any part of the
Capital Contribution of any Partner. The Register is to be updated within
twenty-one (21) Business Days of any material change therein.
3.2. Liability of General Partner.
(a) General. None of the General Partner, the Manager, any
of their respective Affiliates (other than a Portfolio Fund or any other Person
in which the Partnership has a direct or indirect interest), any officer,
director, stockholder, member, partner, employee, agent or assign of the
General Partner, the Manager or any of their respective Affiliates (other than
a Portfolio Fund or any other Person in which the Partnership has a direct or
indirect interest), any Person serving, directly or indirectly, as an officer,
director, stockholder, member, partner, employee, agent or assign of any
Portfolio Fund at the written request of the General Partner or any Person
that was, at the time of the act or omission in question, such a Person
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(collectively, the "Related Persons"), shall be liable, responsible or
accountable, whether directly or indirectly, in contract or tort or otherwise, to
the Partnership, any Portfolio Fund, any other Person in which the
Partnership has a direct or indirect interest or any Partner (or any Affiliate
thereof) for any Damages asserted against, suffered or incurred by the
Partnership, any Portfolio Fund, any other Person in which the Partnership
has a direct or indirect interest or any Partner (or any of their respective
Affiliates) arising out of, relating to or in connection with any act or failure
to act pursuant to this Agreement or otherwise with respect to:(i) the management or conduct of the business and
affairs of the Partnership, any Portfolio Fund, any other Person in which the
Partnership has a direct or indirect interest or any of their respective
Affiliates (including, without limitation, actions taken or not taken by any
Related Person as a director of any Person in which the Partnership has a
direct or indirect interest or any Affiliates of such Person);
(ii) the offer and sale of interests in the Partnership;
and
(iii) the management or conduct of the business and
affairs of any Related Person insofar as such business or affairs relate to the
Partnership, any Portfolio Fund, any other Person in which the Partnership
has a direct or indirect interest or to any Partner in its capacity as such,
including, without limitation, all:
(A) activities in the conduct of the business
of the Partnership, any Portfolio Fund and any other Person in which the
Partnership has a direct or indirect interest, whether or not the same as any
specific activities or within any category, class or type of activities disclosed
in the Offering Memoranda, and
(B) activities in the conduct of other
business engaged in by it (or them) that might involve a conflict of interest
vis-a-vis the Partnership, any Portfolio Fund, any other Person in which the
Partnership has a direct or indirect interest or any Partner (or any of their
respective Affiliates) or in which any Related Person realizes a profit or has
an interest, provided that such act or failure to act was taken in good faith
and except, in each case, for Damages that are finally found by a court of
competent jurisdiction to have resulted primarily from any act or omission of
such Related Person that constituted gross negligence, intentional
misconduct, an intentional breach of this Agreement or a knowing violation
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of law.(b) Conflicts of Interest. For purposes of this Agreement, no
action or failure to act on the part of any Related Person in connection with
the management or conduct of the business and affairs of such Related
Person or any other Related Person and other activities of such Related
Person which involve a conflict of interest with the Partnership, any Portfolio
Fund, any other Person in which the Partnership has a direct or indirect
interest or any Partner (or any of their respective Affiliates) or that is
specified in or contemplated by the Offering Memoranda or in which such
Related Person realizes a profit or has an interest shall constitute, per se, bad
faith, gross negligence, intentional misconduct, an intentional breach of this
Agreement or a knowing violation of law.
(c) Employees and Agents. Notwithstanding the foregoing
provisions of this section 3.2, no Related Person shall be liable to the
Partnership, any Portfolio Fund, any other Person in which the Partnership
has a direct or indirect interest or any Partner (or any Affiliate thereof) for
any action taken or omitted to be taken by any other Related Person.
(d) Reliance on Third Parties. Any Related Person may (in
its own name or in the name of the Partnership) consult with counsel,
accountants and other professional advisors in respect of the affairs of the
Partnership, any Portfolio Fund, any other Person in which the Partnership
has a direct or indirect interest and each Related Person shall be deemed not
to have acted in bad faith or with gross negligence or to have intentionally or
materially breached this Agreement or engaged in intentional misconduct
with respect to any action or failure to act and shall be fully protected and
justified in so acting or failing to act, if such action or failure to act is in
accordance with the advice or opinion of such counsel, accountants or other
professional advisors, except for actions or failures to act by such Related
Person that constitute a knowing violation of law.
(e) Reliance on This Agreement. To the extent that, at law or
in equity, the General Partner has duties (including fiduciary duties) and
liabilities relating thereto to the Partnership or to another Partner, the General
Partner acting under this Agreement shall not be liable to the Partnership or
to any such other Partner for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they expand
or restrict the duties and liabilities of the General Partner otherwise existing
at law or in equity, are agreed by the Partners to modify to that extent such
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other duties and liabilities of the General Partner.3.3. Limited Liability of Limited Partners.
The liability of each Limited Partner is limited to its obligation to
make Capital Contributions to the Partnership in amounts from time to time
provided by this Agreement and to make the payments required by this
Agreement and its respective Subscription Agreement, all of which
obligations are intended to be enforceable only by the Partnership and the
General Partner but not by creditors of the Partnership, and nothing
elsewhere set forth in this Agreement or in any other document, and nothing
arising from any other transaction whatsoever between or among any or all
of the Partners or the Partnership, shall have the effect of removing,
diminishing or otherwise affecting such limitation.
3.4. No Priority, Etc.
No Limited Partner shall have priority over any other Limited
Partner either as to the return of the amount of its Capital Contribution to the
Partnership or,
other than as provided in section 5, as to any allocation of Net Income and
Net Loss.
3.5. Partnership Property; Partnership Interest.
No real or other property of the Partnership shall be deemed to be
owned by any Partner individually. All property of the Partnership shall be
owned by and title shall be vested solely in the Partnership. The Interests of
the Partners shall constitute personal property.
3.6. Withdrawing Limited Partner.
The execution of this Agreement by the Withdrawing Limited
Partner constitutes his withdrawal as a limited partner of the Partnership.
With effect from the time of execution of this Agreement, the Withdrawing
Limited Partner has no further right, interest or obligation of any kind
whatsoever as a limited partner of the Partnership. An amount equal to the
balance of the Capital Account of the Withdrawing Limited Partner shall be
distributed to such Withdrawing Limited Partner on the date of this
Agreement.
4. CAPITAL CONTRIBUTIONS, CAPITAL COMMITMENTS.
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4.1. Capital Contributions. (a) Limited Partners' Contribution. During the Commitment
Period, each Limited Partner agrees to make Capital Contributions to the
Partnership at any time or from time to time for the purpose of funding
obligations in respect of Portfolio Funds (including, without limitation, for
portfolio investments made by Portfolio Funds, expenses of Portfolio Funds
and management fees in respect of Portfolio Funds) up to the amount of its
Remaining Capital Commitment. Notwithstanding the foregoing, each
Limited Partner agrees to make Capital Contributions to the Partnership
subsequent to the Commitment Period for the purpose of funding obligations
in respect of any Portfolio Fund (x) in which the Partnership has an existing
Portfolio Investment and (y) to which the Partnership has made a
commitment to invest prior to the termination of the Commitment Period
pursuant to clause (a) of the definition thereof. Such Capital Contributions
shall be made in the amounts and in the manner set forth below:
(i) the General Partner shall deliver to each Limited
Partner a notice (a "Funding Notice") that Capital Contributions are to be
made to the Partnership (a "Drawdown") at least ten (10) Business Days prior
to the date of such Drawdown (except as otherwise provided in section 4.3);
(ii) except as otherwise provided in section 11.3 with
respect to each Limited Partner's indemnification obligations, each Limited
Partner's required Capital Contribution in respect of a Portfolio Investment
shall be equal to the lesser of (A) such Limited Partner's Remaining Capital
Commitment and (B) such Limited Partner's pro rata share (determined with
reference to the sum of the aggregate Capital Commitments of all Partners)
of the aggregate amount that the Partnership is required to fund in respect of
such Portfolio Investment, and the Remaining Capital Commitment of each
Limited Partner shall be reduced by the amount of all such Capital
Contributions; and
(iii) each Limited Partner shall contribute to the
Partnership, in cash or by wire transfer of immediately available funds, in
each case in U.S. Dollars and in the case of a wire transfer, to the bank
account of the Partnership as shall be designated in the Funding Notice for
such Drawdown on or prior to the date of the Drawdown as specified in such
Funding Notice, the U.S. Dollar amount specified for such Limited Partner in
such Funding Notice.
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(b) General Partner's Contributions. The General Partner
shall not be required to make Capital Contributions to the Partnership in
connection with any Drawdown.
(c) Cancellation of Notices. If the General Partner, in its sole
discretion, deems it advisable, it may proportionately reduce the amount of or
cancel any call for Capital Contributions by giving notice to each Partner.
Any amount not contributed to or returned by the Partnership by reason
thereof shall not reduce any Partner's Remaining Capital Commitment.
4.2. Return of Unutilized Contributions. (a) Returns by General Partner. If the General Partner
determines (i) that a proposed Portfolio Investment in respect of which
Partners have made Capital Contributions will not be consummated, or (ii)
that funding requested in respect of a Portfolio Investment is not required to
be provided, the General Partner shall refund to the Partners that made such
Capital Contributions the amounts of such Capital Contributions. If the
General Partner determines that a proposed Portfolio Investment in respect of
which Partners have made Capital Contributions or a funding request in
respect of a Portfolio Investment will not require the full amount of Capital
Contributions made therefor, the General Partner shall refund to the Partners
that made such Capital Contributions, pro rata to the amounts of such Capital
Contributions, the amount of such Capital Contributions that exceeds the
portion required to consummate such proposed Portfolio Investment or
required to be funded in respect of such Portfolio Investment.
(b) Treatment of Returns or Refunds of Contributions. For
purposes of determining the Remaining Capital Commitment of a Partner
that receives a refund of a Capital Contribution pursuant to section 4.2, the
amount refunded shall be treated as never having been contributed to the
Partnership. If during the period between the contribution and a refund of
such amount, the Partners have made Capital Contributions in respect of
another Portfolio Investment or for any other purpose in ratios that were
incorrect in light of the preceding sentence, then the General Partner shall
require such additional Capital Contributions and shall refund such amounts,
as are necessary to adjust the Capital Contributions of Partners in respect of
such other Portfolio Investment to the correct ratio.
4.3. Defaulting Limited Partner.
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(a) Event of Default. The failure by any Limited Partner to
make, when due or within five (5) Business Days thereafter, any portion of
the Capital Contribution required to be contributed by such Limited Partner
pursuant to this Agreement or any other payment required to be made by it to
the General Partner or the Partnership shall constitute an Event of Default by
such Limited Partner. Upon the occurrence of an Event of Default, such
Limited Partner may be deemed a "Defaulting Limited Partner" and the
following provisions of this section 4.3 shall apply. The General Partner, in
its discretion, may choose not to designate any Limited Partner as a
Defaulting Limited Partner and may agree to waive or permit the cure of any
Event of Default by a Limited Partner, subject to such conditions as the
General Partner and such Limited Partner may agree upon.
(b) Interest on Overdue Amounts. A Defaulting Limited
Partner may, in the discretion of the General Partner, be charged an
additional amount on the unpaid balance of any overdue Capital
Contributions or other payments, including interest thereon, at the Default
Rate from the date such balance was due and payable through the date full
payment for such contribution or payment is actually made.
(c) Loss of Voting Rights. Whenever the vote, consent or
decision of a Limited Partner or of the Partners is required or permitted
pursuant to this Agreement, except as required by the Partnership Act and
pursuant to section 13.2(b), a Defaulting Limited Partner shall not be entitled
to participate in such vote or consent, or to make such decision, and such
vote, consent or decision shall be tabulated or made as if such Defaulting
Limited Partner were not a Partner. In the event the General Partner chooses
not to designate a Limited Partner as a Defaulting Limited Partner even
though an Event of Default has occurred in respect of such Limited Partner,
the Beneficial Owner or Owners of such Limited Partner that are responsible
for such Event of Default occurring shall nonetheless be deemed Defaulting
Beneficial Owners and shall not be entitled to participate in any required or
permitted vote, consent or decision under this Agreement that is tallied by
reference to Beneficial Owners.
(d) Forfeiture. The General Partner shall have the right, in its
discretion, to (i) determine that a Defaulting Limited Partner shall forfeit as
recompense for damages suffered, and the Partnership shall withhold, all or a
portion of the distributions of Distributable Cash that such Defaulting
Limited Partner would otherwise receive, except to the extent of
Distributable Cash constituting a return of Capital Contributions made by
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such Defaulting Limited Partner less any expenses, deductions or losses
(including such Defaulting Limited Partner's share of the Net Loss) allocated
to such Limited Partner and (ii) assess a twenty-five percent (25%) reduction
in the Capital Account balance of the Defaulting Limited Partner in respect
of each Portfolio Investment. Any amounts withheld from the Defaulting
Limited Partner by the Partnership pursuant to clause (i) above shall be
allocated and distributed to the other Partners (A) in proportion to their
Percentage Interests in the Portfolio Investment giving rise to such
distribution, or (B) if such distribution is not attributable to a Portfolio
Investment, in proportion to their respective proportionate interests in the
Partnership property or funds that produced such Distributable Cash, as
reasonably determined by the General Partner, or (C) in the case of a
distribution upon liquidation, in proportion to the liquidating distributions to
them pursuant to section 12.2. Any reductions in the Capital Accounts
pursuant to clause (ii) above shall be allocated among the non-defaulting
Partners that made Capital Contributions in respect of such Portfolio
Investments in proportion to such Capital Contributions. All amounts so
allocated to the Capital Accounts of the non-defaulting Partners shall be
deemed, for the purposes of calculating distributions pursuant to section 6 of
this Agreement, to be Capital Contributions by such non-defaulting Partners
to the relevant Portfolio Investment. The Capital Accounts of the Partners
shall be adjusted pursuant to section 5.1 to take account of changes to the
Partners' Capital Accounts pursuant to this paragraph.(e) Additional Contributions by Non-Defaulting Partners.
Upon the occurrence of an Event of Default, the General Partner may require
all of the non-defaulting Partners to increase their Capital Contributions by
an aggregate amount equal to the Capital Contribution of the Defaulting
Limited Partner on which it defaulted; provided that no Limited Partner shall
be required to fund amounts in excess of its Remaining Capital Commitment.
If the General Partner elects to require such increase, the General Partner
shall deliver to each non-defaulting Partner written notice of such default as
promptly as practicable after its occurrence and, thereafter, with respect to
each Portfolio Investment (or each portfolio investment of the Portfolio
Fund), the General Partner shall as promptly as practicable deliver to each
such non-defaulting Partner a Funding Notice in respect of the Capital
Contribution that the Defaulting Limited Partner failed to make.
(f) Obligations of Defaulting Limited Partner Not
Extinguished. Other than as provided in this section 4.3, the obligations of
any Defaulting Limited Partner to the Partnership hereunder shall not be
extinguished as a result of the existence of the rights, or the occurrence of
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one or more of the transactions, contemplated by this section 4.3.(g) Legal Proceedings. The General Partner shall have the
right to commence legal proceedings against the Defaulting Limited Partner
to collect all amounts owed by such Defaulting Limited Partner to the
Partnership or any other Person, pursuant to the terms of this Agreement,
together with interest thereon at the maximum rate permitted by law up to
twenty-five percent (25%) per annum from the date of default plus all
collection expenses, including attorneys' fees.
(h) Cumulative Remedies. No right, power or remedy
conferred upon the General Partner in this section 4.3 shall be exclusive, and
each such right, power or remedy shall be cumulative and in addition to
every other right, power or remedy whether conferred in this section 4.3 or
now or hereafter available at law or in equity or by statute or otherwise. No
course of dealing between the General Partner and any Defaulting Limited
Partner and no delay in exercising any right, power or remedy conferred in
this section 4.3 or now or hereafter existing at law or in equity or by statute
or otherwise shall operate as a waiver or otherwise prejudice any such right,
power or remedy.
(i) Adequacy of Remedies. Each Limited Partner
acknowledges by its execution hereof that it has been admitted to the
Partnership in reliance upon its agreements under this Agreement, that the
General Partner and the Partnership may have no adequate remedy at law for
a breach hereof and that damages resulting from a breach hereof may be
impossible to ascertain at the time hereof or of such breach.
4.4. Admissions of Additional Limited Partners at Subsequent
Closings.
(a) Conditions to Admission. In addition to the admission of
Limited Partners at the Initial Closing, the General Partner, in its discretion,
may schedule one or more Subsequent Closings no later than nine (9) months
after the Initial Closing for such Person or Persons seeking admission to the
Partnership as an additional limited partner of the Partnership or a Partner
wishing to increase the amount of its Capital Commitment (collectively, an
"Additional Limited Partner," which term shall include any Limited Partner
that is a Partner immediately prior to such Subsequent Closing and that
wishes to increase the amount of its Capital Commitment), subject to the
determination by the General Partner in the exercise of its good
faith judgment that, in the case of each such admission or increase, the
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following conditions have been satisfied:(i) The Additional Limited Partner shall have
executed and delivered such instruments and shall have taken such actions as
the General Partner shall deem necessary or desirable to effect such
admission or increase, including, without limitation, the execution of a
Subscription Agreement and a counterpart of this Agreement.
(ii) Such Additional Limited Partner shall have paid
to the Partnership, either for its account or for the accounts of the previously
admitted Partners as described in section 4.4(c) below, on the date of its
admission to the Partnership or the date of such increase, as the case may be,
an amount equal to, in the case of each Portfolio Investment then held by the
Partnership, the percentage of such Additional Limited Partner's Capital
Commitment (or if the Additional Limited Partner is increasing its Capital
Commitment, the percentage of the amount of such increase) that is equal to
a fraction, the numerator of which is the aggregate of the Capital
Contributions of the previously admitted Partners used to fund such Portfolio
Investment, and the denominator of which is the sum of the aggregate of the
Capital Commitments of all of the previously admitted Partners that made
Capital Contributions used to fund such Portfolio Investment and the Capital
Commitment of such Additional Limited Partner (or if the Additional
Limited Partner is increasing its Capital Commitment, the amount of such
increase), together with an amount calculated as interest thereon at a rate per
annum equal to the Adjusted Rate from the dates of the Capital Contributions
of the previously admitted Limited Partners to the date of admission or
increase, as the case may be, which interest shall be treated as provided in
section 4.4(c), and less such amount as is necessary to take into account all
distributions theretofore made.
(b) Admission as Partner. A Person shall be deemed
admitted to the Partnership as an Additional Limited Partner at the time the
conditions specified in section 4.4(a) are satisfied. The General Partner shall
revise Schedule A attached hereto to reflect the admission of such Additional
Limited Partner.
(c) Remittance of Certain Payments to Existing Partners.
Any amount paid by an Additional Limited Partner pursuant to section
4.4(a)(ii) attributable to any Portfolio Investment shall be remitted promptly
to the previously admitted Partners in accordance with their Percentage
Interest in such Portfolio Investment (before giving effect to the adjustments
referred to in the following clause), and the Partners' Percentage Interests in
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such Portfolio Investment shall be appropriately adjusted. Such payments
and remittances shall, in accordance with Section 707(a) of the Code, be
treated for all purposes of this Agreement and for all accounting and tax
reporting purposes as a payment made directly from the Additional Limited
Partner to the previously admitted Partners and not as an item of Partnership
income, gain, loss, deduction, contribution or distribution. Such Additional
Limited Partner shall succeed to the Capital Contributions of the previously
admitted Partners attributable to the portion of the amount remitted pursuant
to section 4.4(a)(ii) (not including any amount calculated as interest thereon),
and the Capital Contributions of the previously admitted Partners shall be
decreased accordingly. In addition, the Remaining Capital Commitments of
the previously admitted Partners shall be increased by such amount remitted
(not including any amount calculated as interest thereon), and the amount of
such increase in Remaining Capital Commitments may be called again by the
Partnership. (d) Other Mechanical Provisions.(i) The Remaining Capital Commitment of the
Additional Limited Partner shall be equal to its Capital Commitment less the
Capital Contributions to which such Additional Limited Partner succeeded
(but not including amounts calculated as interest).
(ii) The General Partner shall cause this Agreement
to be amended to reflect as appropriate the occurrence of any of the
transactions referred to in this section 4 as promptly as is practicable after
such occurrence.
(iii) Neither the admission of an Additional Limited
Partner nor an increase in the amount of an Additional Limited Partner's
Capital Commitment shall be a cause for dissolution of the Partnership.
(iv) The transactions contemplated by this section
4.4 shall not require the consent of any of the Limited Partners.
4.5. Hot Issues.
In the event that the Partnership indirectly invests in any Hot Issues,
such investment shall be made only in a special account maintained on the
books of the Partnership (the "Hot Issues Account"). To the extent that the
Partnership invests in Hot Issues, the Partnership shall establish one or more
separate brokerage accounts, with separate identification numbers, for such
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Hot Issues and all Hot Issues purchased by the Partnership shall be placed in
such brokerage accounts. The General Partner shall not make any capital
contributions to or have any beneficial interest in the Hot Issues Account or
participate in any separate brokerage account established to hold Hot Issues.
Only Beneficial Owners that are not Restricted Persons may hold interests in
Hot Issues. Securities involved in the Hot Issue shall be purchased in the Hot
Issues Account and held in the Hot Issues Account. Upon the request of the
General Partner, each Limited Partner hereby agrees to provide the
Partnership with evidence that the Beneficial Owners investing through such
Limited Partner in Hot Issues are not Restricted Persons within five (5)
calendar days of such request. Any Limited Partner which is not fully
participating with respect to Hot Issues as a result of one or more of its
Beneficial Owners being Restricted Persons shall be excused from such part
of its obligation to make a capital contribution relating thereto as corresponds
to the percentage interest of such Limited Partner owned by Restricted
Persons, provided that the General Partner shall have the right to request that
such Limited Partner call for additional capital contributions from its
Beneficial Owners that are not Restricted Persons in a manner similar to that
described in section 4.3(e) of the partnership agreement for such Limited
Partner. The General Partner is hereby authorized and directed to take any
other action that may be required by the NASD Interpretation.
5. CAPITAL ACCOUNTS, ALLOCATIONS.5.1. Capital Accounts.
A capital account (a "Capital Account") shall be established and
maintained for each Partner (other than the General Partner) to which shall
be credited the Capital Contributions made by such Partner and such
Partner's allocable share of Net Income (and items thereof), and from which
shall be deducted distributions to such Partner of cash or other property and
such Partner's allocable share of Net Loss (and items thereof). To the extent
not provided for in the preceding sentence, the Capital Accounts of the
Partners shall be adjusted and maintained in accordance with Treasury
Regulations Section 1.704-1(b)(2)(iv).
5.2. Allocations to Capital Accounts.
(a) Net Income Attributable to Portfolio Funds. Except as
provided elsewhere in this Agreement, Net Income (and items thereof)
attributable to any Portfolio Fund for any fiscal period shall be allocated to
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the Limited Partners in proportion to their Percentage Interests.(b) Net Loss Attributable to Portfolio Funds. Except as
provided elsewhere in this Agreement, Net Loss (and items thereof)
attributable to any Portfolio Fund for any fiscal period shall be allocated to
the Limited Partners in proportion to their Percentage Interests.
(c) Other Net Income and Net Loss. Other Net Income and
Net Loss shall be allocated among the Limited Partners in the same manner
that a like amount of Net Income or Net Loss would be allocated under
sections 5.2(a) or (b), as the case may be, in respect of all Portfolio Funds pro
rata in proportion to the Limited Partners' Unrecovered Capital.
(d) Allocations in Special Circumstances. The following
special allocations shall be made in the following order:
(i) Minimum Gain Chargeback. Notwithstanding
any other provision of this section 5, if there is a net decrease in partnership
minimum gain (as defined in Treasury Regulations Section 1.704-2(b)(2) and
(d)) during any fiscal year, the Partners shall be specially allocated items of
Partnership income and gain for such fiscal year (and, if necessary,
subsequent fiscal years) in an amount equal to the portion of such Partner's
share of the net decrease in partnership minimum gain, determined in
accordance with Treasury Regulations Section 1.704-2(f) and (g). This
section 5.2(d)(i) is intended to comply with the minimum gain chargeback
requirement in such section of the Treasury Regulations and shall be
interpreted consistently therewith.
(ii) Partner Minimum Gain Chargeback.
Notwithstanding any other provision of this section 5, if there is a net
decrease in Partner nonrecourse debt minimum gain attributable to a Partner
nonrecourse debt (as defined in Treasury Regulations Section 1.704-2(i))
during any fiscal year, each Partner shall be specially allocated items of
Partnership income and gain for such fiscal year (and, if necessary,
subsequent fiscal years) in an amount equal to the portion of such Partner's
share of the net decrease in Partner nonrecourse debt minimum gain
attributable to such Partner's nonrecourse debt, determined in accordance
with Treasury Regulations Section 1.704-2(i). This section 5.2(d)(ii) is
intended to comply with the minimum gain chargeback requirement in such
section of the Treasury Regulations and shall be interpreted consistently
therewith.
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(iii) Qualified Income Offset. In the event any
Limited Partner unexpectedly receives any adjustments, allocations, or
distributions described in Treasury Regulations Sections 1.704-
1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and gain shall be
specially allocated to each such Limited Partner in an amount and manner
sufficient to eliminate, to the extent required by the Treasury Regulations, the
deficit, if any, in such Limited Partner's Capital Account (as determined
under Treasury Regulations Section 1.704-1) as quickly as possible, provided
that an allocation pursuant to this section 5.2(d)(iii) shall be made only if and
to the extent that such Limited Partner would have such Capital Account
deficit after all other allocations provided for in section 5.2 have been
tentatively made as if this section 5.2(d)(iii) were not in this Agreement. This
section 5.2(d)(iii) is intended to comply with the qualified income offset
provisions in Treasury Regulations section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.
(iv) Gross Income Allocation. In the event any
Limited Partner has a deficit balance in such Limited Partner's Capital
Account (as determined after crediting such Capital Account for any amounts
that such Limited Partner is obligated to restore or is deemed obligated to
restore pur
