Common use of Creation and Issuance Clause in Contracts

Creation and Issuance. The General Partner may, in its sole discretion and at any time, create one or more classes of Units designated as a “Side Pocket Class” (Units of which class are referred to as “Side Pocket Units”) and allocate and attribute to the Side Pocket Class (i) such private securities or other investments (“Side Pocket Investments”) that the General Partner determines, in its sole discretion, to be illiquid, difficult to value, subject to lock-up or non-redemption provisions, subject to other special circumstances, or which it may be prudent, necessary or desirable to segregate from other assets or investments of the Partnership, and (ii) cash in such amount as the General Partner deems appropriate to facilitate the payment of Management Fees, Performance Fees and expenses out of such Side Pocket Class. Each investor who is a Limited Partner at the time a Side Pocket Investment is acquired by the Partnership, or at the time an existing investment is designated a Side Pocket Investment by the General Partner, shall be issued Side Pocket Units of the newly created Side Pocket Class pro rata to such Limited Partner’s percentage holding of Units (other than Side Pocket Units) at that time. Subsequently admitted Limited Partners will not acquire an interest in any existing Side Pocket Investments or in any existing Side Pocket Class to which such investments are allocated and shall accordingly not participate in the gain, loss or income of the Side Pocket Units constituting any such existing Side Pocket Class. However, such subsequent Limited Partners will acquire interests in any future Side Pocket Classes created after they become investors in the Partnership. Fractional Side Pocket Units may be issued. The Partnership may, at the discretion of the General Partner, issue multiple series of Units within a Side Pocket Class in order to isolate the ownership of different Side Pocket Investments. The designation by the General Partner of a Side Pocket Investment and its allocation to a newly created Side Pocket Class may apply in respect of any type of investment whatsoever. There is no limit on the size of any Side Pocket Class or on the portion of investments of the Partnership which can be allocated to a particular Side Pocket Class or to Side Pocket Classes in aggregate. Side Pocket Investments will be carried at their fair value as determined by the General Partner (the “Side Pocket Allocation Value”). Each Side Pocket Class shall, for internal accounting and Net Asset Value calculation and valuation purposes and for the purposes of determining the rights and entitlements of holders of each class of Units (including such Side Pocket Class) to income and profits of the Partnership between themselves, constitute and be treated as a separate pool of assets of the Partnership and as a separate class of Units. On each Valuation Date, the General Partner shall cause a separate Net Asset Value to be calculated for each class of Units (including Side Pocket Classes) and a separate Net Asset Value per Unit for each class of Units. The Net Asset Value per Side Pocket Unit of each Side Pocket Class shall be calculated by determining first the proportion of the Net Asset Value of the Partnership as a whole attributable to such class (on the basis of the rules and principles set out in this Agreement) and by then dividing the Net Asset Value attributable to such class by the number of outstanding Side Pocket Units of such class. Any expenses relating specifically to a Side Pocket Class will be charged to the Limited Partners participating in such class. A Side Pocket Investment shall be valued at the Side Pocket Allocation Value unless and until the General Partner in its sole discretion determines that in view of any change of circumstances (including, without limitation, when it becomes possible to re-value a previously difficult to value investment or when an originally illiquid investment becomes more or less liquid), it is appropriate to adjust the value of any Side Pocket Investment. Side Pocket Units are not redeemable at the option of Limited Partners, and may only be redeemed at the discretion of the General Partner following a “Realization Event” as provided below. A “Realization Event” occurs when (i) a Side Pocket Investment is liquidated, sold or otherwise disposed of by the Partnership, or (ii) the General Partner determines in its sole discretion that any investment held by the Partnership no longer constitutes a Side Pocket Investment for any reason including, without limitation, that the investment has become sufficiently liquid (whether through a public offering of securities or otherwise), is appropriately priced or can be valued with reasonable accuracy, or if for any other reason in the opinion of the General Partner it is no longer necessary or desirable for the investment to be segregated from other assets or investments of the Partnership. Upon the occurrence of a Realization Event, the General Partner may in its discretion take any one or more of the following actions: