Exhibit 99.2(a)(3)
_____________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ INSTITUTIONAL FUND OF HEDGE FUNDS LP
Amended and Restated Agreement of Limited Partnership
Dated as of July 1, 2002
_____________________________
TABLE OF CONTENTS
ARTICLE I DEFINITIONS........................................................................................... 1
ARTICLE II ORGANIZATION; ADMISSION OF PARTNERS; DIRECTORS....................................................... 6
2.1. FORMATION OF LIMITED PARTNERSHIP................................................................. 6
2.2. NAME............................................................................................. 6
2.3. PRINCIPAL AND REGISTERED OFFICE.................................................................. 6
2.4. DURATION......................................................................................... 6
2.5. BUSINESS OF THE PARTNERSHIP...................................................................... 6
2.6. GENERAL PARTNER.................................................................................. 7
2.7. LIMITED PARTNERS................................................................................. 7
2.8. ORGANIZATIONAL LIMITED PARTNER................................................................... 7
2.9. BOTH GENERAL AND LIMITED PARTNER................................................................. 8
2.10. LIMITED LIABILITY................................................................................ 8
2.11. DIRECTORS........................................................................................ 8
ARTICLE III MANAGEMENT; ADVICE AND MANAGEMENT................................................................... 9
3.1. MANAGEMENT AND CONTROL........................................................................... 9
3.2. POWERS RESERVED BY THE GENERAL PARTNER........................................................... 10
3.3. ACTIONS BY DIRECTORS............................................................................. 11
3.4. MEETINGS OF PARTNERS............................................................................. 11
3.5. ADVICE AND MANAGEMENT............................................................................ 12
3.6. CUSTODY OF ASSETS OF THE PARTNERSHIP............................................................. 14
3.7. BROKERAGE........................................................................................ 14
3.8. OTHER ACTIVITIES................................................................................. 14
3.9. DUTY OF CARE..................................................................................... 15
3.10. INDEMNIFICATION.................................................................................. 15
3.11. FEES, EXPENSES AND REIMBURSEMENT................................................................. 16
ARTICLE IV TERMINATION OF STATUS OF GENERAL PARTNER; REMOVAL OF GENERAL PARTNER; TRANSFERS AND REPURCHASES...... 18
4.1. TERMINATION OF STATUS OF GENERAL PARTNER......................................................... 18
4.2. REMOVAL OF GENERAL PARTNER....................................................................... 18
4.3. TRANSFER OF INTEREST OF GENERAL PARTNER.......................................................... 18
4.4. TRANSFER OF INTERESTS OF LIMITED PARTNERS........................................................ 19
4.5. REPURCHASE OF INTERESTS.......................................................................... 20
ARTICLE V CAPITAL............................................................................................... 22
5.1. CONTRIBUTIONS TO CAPITAL......................................................................... 22
5.2. RIGHTS OF PARTNERS TO CAPITAL.................................................................... 23
5.3. CAPITAL ACCOUNTS................................................................................. 23
5.4. ALLOCATION OF NET PROFIT AND LOSS................................................................ 23
5.5. ALLOCATION OF CERTAIN WITHHOLDING TAXES AND OTHER EXPENDITURES................................... 23
5.6. PERFORMANCE INCENTIVE AND INCENTIVE CAP.......................................................... 24
5.7. RESERVES......................................................................................... 24
5.8. ALLOCATION TO AVOID CAPITAL ACCOUNT DEFICITS..................................................... 25
5.9. ALLOCATIONS PRIOR TO CLOSING DATE................................................................ 25
5.10. TAX ALLOCATIONS.................................................................................. 25
5.11. DISTRIBUTIONS.................................................................................... 26
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ARTICLE VI DISSOLUTION AND LIQUIDATION.......................................................................... 26
6.1. DISSOLUTION...................................................................................... 26
6.2. LIQUIDATION OF ASSETS............................................................................ 27
ARTICLE VII ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS........................................................ 28
7.1. ACCOUNTING AND REPORTS........................................................................... 28
7.2. DETERMINATIONS BY GENERAL PARTNER................................................................ 28
7.3. VALUATION OF ASSETS.............................................................................. 28
ARTICLE VIII MISCELLANEOUS PROVISIONS........................................................................... 29
8.1. AMENDMENT OF PARTNERSHIP AGREEMENT............................................................... 29
8.2. SPECIAL POWER OF ATTORNEY........................................................................ 30
8.3. NOTICES.......................................................................................... 31
8.4. AGREEMENT BINDING UPON SUCCESSORS AND ASSIGNS.................................................... 31
8.5. CHOICE OF LAW; ARBITRATION....................................................................... 31
8.6. NOT FOR BENEFIT OF CREDITORS..................................................................... 32
8.7. CONSENTS......................................................................................... 32
8.8. MERGER AND CONSOLIDATION......................................................................... 32
8.9. PRONOUNS......................................................................................... 33
8.10. CONFIDENTIALITY.................................................................................. 33
8.11. CERTIFICATION OF NON-FOREIGN STATUS.............................................................. 33
8.12. SEVERABILITY..................................................................................... 33
8.13. ENTIRE AGREEMENT................................................................................. 34
8.14. DISCRETION....................................................................................... 34
8.15. CONFLICTS........................................................................................ 34
8.16. COUNTERPARTS..................................................................................... 34
8.17. HEADINGS......................................................................................... 34
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ INSTITUTIONAL FUND OF HEDGE FUNDS LP
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ INSTITUTIONAL FUND OF HEDGE FUNDS LP (the "Partnership") dated as of
July 1, 2002 by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Alternative Investment Partners LP, as
General Partner, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AIP Funding Inc., as Organizational Limited
Partner, and those Persons who execute this Agreement and whose names are
reflected on the books and records of the Partnership as Limited Partners.
ARTICLE I
DEFINITIONS
For purposes of this Agreement:
"1933 Act" means the Securities Act of 1933 and the rules, regulations and
orders under the 1933 Act, as amended from time to time, or any successor law.
"1940 Act" means the Investment Company Act of 1940 and the rules, regulations
and orders under the 1940 Act, as amended from time to time, or any successor
law.
"Advice and Management" means those services provided to the Partnership by the
Adviser under Section 3.5(b) of this Agreement.
"Adviser" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AIP GP LP, a limited partnership formed under the
laws of the State of Delaware, and any other Person or Persons subsequently
engaged to provide investment management services to the Partnership in a
similar capacity.
"Advisers Act" means the Investment Advisers Act of 1940 and the rules,
regulations and orders under the Advisers Act, as amended from time to time, or
any successor law.
"Affiliate" means affiliated person as that term is defined in the 1940 Act.
"Agreement" means this Amended and Restated Agreement of Limited Partnership, as
further amended and/or restated from time to time.
"Board of Directors" means the board of the Directors who have been delegated
the authority described in this Agreement.
"Business Day" means any day when the New York Stock Exchange is open for
business.
"Capital Account" means, with respect to each Partner, the capital account
established and maintained on behalf of the Partner in accordance with Section
5.3 of this Agreement.
"Capital Contribution" means the contribution, if any, made, or to be made, as
the context requires, to the capital of the Partnership by a Partner or former
Partner, as the case may be.
"Certificate" means the Certificate of Limited Partnership of the Partnership
filed with the office of the Secretary of State of the State of Delaware on
November 6, 2001, and any amendments to the Certificate and/or restatements of
the Certificate as filed with the office of the Secretary of State of the State
of Delaware.
"Closing Date" means the first date on or as of which a Limited Partner other
than the Organizational Limited Partner is admitted to the Partnership.
"Code" means the Internal Revenue Code of 1986, as amended from time to time, or
any successor law.
"Commodity Exchange Act" means the Commodity Exchange Act and the rules,
regulations and orders under the Commodity Exchange Act, as amended from time to
time, or any successor law.
"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act, as
amended from time to time, or any successor law.
"Directors" means those natural Persons designated as "Directors" in accordance
with this Agreement who are delegated the authority provided for in this
Agreement and includes ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, C. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as the
initial Directors, or any other natural Persons who, from time to time after the
date of this Agreement, become Directors in accordance with the terms and
conditions of this Agreement.
"Fiscal Period" means the period commencing on the Closing Date, and thereafter
each period commencing on the day immediately following the last day of the
preceding Fiscal Period and ending at the close of business on the first to
occur of the following dates:
(1) the last day of a Fiscal Year;
(2) the day preceding the date as of which a contribution to the capital of
the Partnership is made by any Partner in accordance with Section 5.1 of
this Agreement;
(3) the day on which the Partnership repurchases the Interest or portion of
the Interest of any Partner in accordance with Section 4.5 of this
Agreement;
(4) the day as of which the Partnership admits a substituted Partner to
whom or which an Interest or portion of an Interest of a Partner has been
Transferred (unless the Transfer of the Interest or portion of the Interest
results in no change of beneficial ownership of the Interest or portion of
the Interest);
(5) the day as of which any amount is credited to or debited against the
Capital Account of any Partner, other than an amount that is credited to or
debited against the Capital Accounts of all Partners in accordance with
their respective Investment Percentages; or
(6) December 31, or any other date that is the last day of the taxable year
of the Partnership.
"Fiscal Year" means the period commencing on the Closing Date and ending on
December 31, 2002, and thereafter each period commencing on January 1 of each
year and ending on December 31 of that year (or on the date of a final
distribution made in accordance with Section 6.2 of this Agreement), unless the
Directors designate another fiscal year for the Partnership. The taxable year of
the Partnership will end on December 31 of each year, or on any other date
designated by the General Partner that is a permitted taxable year-end for tax
purposes, and need not be the same as the Fiscal Year.
"Form N-2" means the Partnership's Registration Statement on Form N-2 filed with
the Securities and Exchange Commission, as amended from time to time.
"General Partner" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Alternative Investment Partners LP, a
limited partnership formed under the laws of the State of Delaware, and any
other Person or Persons admitted to the Partnership as a general partner of the
Partnership, collectively, in their capacities as general partners of the
Partnership, and "General Partner" means any of the General Partners. When the
term General Partner is used in this Agreement and the Partnership has more than
one General Partner, the term "General Partner" will refer to each General
Partner. If at any time the Partnership has more than one General Partner,
unless otherwise provided in this Agreement, any action allowed to be taken, or
required to be taken, by the General Partners may be taken only with the
unanimous approval of all of the General Partners.
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"Hurdle Rate" means, with respect to each Incentive Period, that rate determined
from time to time by the Directors and approved in the manner contemplated by
the 1940 Act; such rate initially to be 5% per annum, plus the rate of return
achieved by the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Three-Month U.S. Treasury ▇▇▇▇ Index over
the same Incentive Period. Hurdle Rates will not be cumulative and will be
recalculated with respect to each Incentive Period. The Hurdle Rate for a given
Incentive Period will be adjusted with respect to any contributions, transfers,
distributions, withdrawals and repurchases applicable to the Limited Partner's
Capital Account for that Incentive Period, or portion thereof.
"Hurdle Rate Amount" means, with respect to each Limited Partner, an amount
equal to the balance of the Limited Partner's Capital Account as of the first
day of the applicable Incentive Period, multiplied by the Hurdle Rate.
"Incentive Cap" has the meaning set out in Section 5.6(a) of this Agreement.
"Incentive Period" means, with respect to a Partner's Interest, a single
Sub-Period or multiple consecutive Sub-Periods. Both the Incentive Period and
the last Sub-Period within the Incentive Period terminate at the close of
business on the earliest occurrence of: (1) the last day of the Fiscal Year, (2)
the date immediately prior to the effective date of a full Transfer of
Interests; or (3) the date on which the Partnership dissolves.
"Independent Directors" mean those Directors who are not "interested persons" of
the Partnership as that term is defined in the 1940 Act.
"Initial Agreement" has the meaning set out in Section 2.1 of this Agreement.
"Interest" means the entire partnership interest in the Partnership at any
particular time of a Partner or other Person to whom or which an Interest or
portion of an Interest has been Transferred in accordance with Section 4.3 or
4.4 of this Agreement, including the rights and obligations of the Partner or
other Person under this Agreement and the Delaware Act.
"Investment Advisory Agreement" has the meaning set out in Section 3.5(a) of
this Agreement.
"Investment Fund" means an investment company, a general or limited partnership,
a limited liability company or other pooled investment vehicle in which the
Partnership has invested and that is advised by an Investment Manager; whether
or not, in each case, the entity is registered under the 1940 Act, and includes
Investment Funds that may be formed by the Partnership.
"Investment Manager" means any Person designated by the Adviser to manage a
portion of the assets of the Partnership, either directly or through the
investment by the Partnership in an Investment Fund. For purposes of this
Agreement, the term "Investment Manager" includes Subadvisers.
"Investment Percentage" means a percentage established for each Partner on the
Partnership's books as of the first day of each Fiscal Period. The Investment
Percentage of a Partner for a Fiscal Period will be determined by dividing the
balance of the Partner's Capital Account as of the commencement of the Fiscal
Period by the sum of the Capital Accounts of all of the Partners as of the
commencement of the Fiscal Period. The sum of the Investment Percentages of all
Partners for each Fiscal Period will equal 100%.
"Limited Partner" means any Person admitted to the Partnership as a limited
partner of the Partnership (including the Organizational Limited Partner and any
Person who or that is a General Partner when acting in the Person's capacity as
a Limited Partner) until the Partnership repurchases the entire Interest of the
Person as a Limited Partner in accordance with Section 4.5 of this Agreement, or
a substituted Limited Partner or Partners are admitted with respect to the
Person's entire Interest as a Limited Partner in accordance with Section 4.4 of
this Agreement, in the Person's capacity as a limited partner of the
Partnership. For purposes of the Delaware Act, the Limited Partners will
constitute a single class or group.
"Loss Carryforward Amount" means, with respect to any Incentive Period, and to
the extent not subsequently offset by allocations of profits or otherwise
reduced, as described in this paragraph, the excess of (1) a Limited Partner's
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allocable share of Net Losses calculated in accordance with Section 5.4 of this
Agreement (excluding amounts previously allocated to repurchased or distributed
portions of the Capital Account during the Incentive Period) over (2) the
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Partner's allocable share of Net Profits calculated in accordance with Section
5.4 of this Agreement (excluding amounts previously allocated to repurchased or
distributed portions of the Capital Account during the Incentive Period), in
each case for the current and any prior Incentive Periods. If at the end of any
subsequent Incentive Period, profits allocated to a Limited Partner's Capital
Account exceed the losses allocated during that period (excluding profits and
losses previously taken into account for this purpose by reason of a partial
repurchase or distribution during that period), any Loss Carryforward Amount for
such Partner will be reduced (but not below zero) by the amount of the excess.
In addition, if any Limited Partner participates in a repurchase or receives a
distribution after a Loss Carryforward Amount has been established for the
Limited Partner, the Limited Partner's Loss Carryforward Amount will be reduced
on a proportionate basis by the amount by which the repurchase or distribution
bears to the Limited Partner's total Capital Account. No transferee may succeed
to any portion of the Loss Carryforward Account applicable to the Transferring
Limited Partner unless the Transfer of the Interest or portion of the Interest
results in no change in beneficial ownership in the Interest or portion of the
Interest. The Loss Carryforward Amount, for a given Incentive Period, will be
adjusted with respect to any contributions, transfers, distributions,
withdrawals and repurchases applicable to the Limited Partner's Capital Account
for that Incentive Period, or portion thereof.
"Management Fee" means the fee paid to the Adviser out of the Partnership's
assets, and debited against Limited Partners' Capital Accounts, as provided in
Section 3.11(a) of this Agreement.
"Memorandum" means the Partnership's placement memorandum, as included in the
Form N-2, as amended or supplemented from time to time.
"Net Assets" means the total value of all assets of the Partnership, less an
amount equal to all accrued debts, liabilities and obligations of the
Partnership, calculated before giving effect to any repurchases of Interests.
"Net Profit" or "Net Loss" means the amount by which the Net Assets as of the
close of business on the last day of a Fiscal Period exceed (in the case of Net
Profit) or are less than (in the case of Net Loss) the Net Assets as of the
commencement of the same Fiscal Period (or, with respect to the initial Fiscal
Period of the Partnership, at the close of business on the Closing Date), the
amount of any Net Profit or Net Loss to be adjusted to exclude any items to be
allocated among the Capital Accounts of the Partners on a basis that is not in
accordance with the Investment Percentages of all Partners as of the
commencement of the Fiscal Period in accordance with Section 5.7 of this
Agreement.
"Offering Materials" means the Memorandum and subscription materials provided to
prospective Limited Partners in connection with an investment to be made in the
Partnership.
"Organizational Limited Partner" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AIP Funding Inc. in its
capacity as a Limited Partner of the Partnership.
"Partners" means the General Partner(s) and the Limited Partners, collectively,
and "Partner" means any General Partner or Limited Partner.
"Partnership" means the limited partnership contemplated by this Agreement, as
the limited partnership may from time to time be constituted.
"Partnership Return", with respect to each Incentive Period applicable to a
Limited Partner, is determined by dividing (a) the excess of the Limited
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Partner's allocable share of Net Profits calculated in accordance with Section
5.4 of this Agreement (including amounts previously allocated to repurchased or
distributed portions of the Limited Partner's Capital Account during the
Incentive Period), over the Limited Partner's allocable share of Net Losses
calculated in accordance with Section 5.4 of this Agreement (including amounts
previously allocated to repurchased or distributed portions of the Limited
Partner's Capital Account during the Incentive Period) by (b) the Limited
Partner's Capital Account balance as of the opening of business of the first day
of that Incentive Period. The Partnership Return, for a given Incentive Period,
will be adjusted with respect to any contributions, transfers,
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distributions, withdrawals and repurchases applicable to the Limited Partner's
Capital Account for that Incentive Period, or portion thereof.
"Performance Incentive" means, with respect to each Limited Partner, 15% of the
amount, determined as of the close of each Incentive Period, if any, of (1) the
Limited Partner's allocable share of Net Profits calculated in accordance with
Section 5.4 of this Agreement (excluding amounts previously allocated to
repurchased or distributed portions of the Limited Partner's Capital Account
during the Incentive Period), in excess of the Limited Partner's allocable share
of Net Losses calculated in accordance with Section 5.4 of this Agreement
(excluding amounts previously allocated to repurchased or distributed portions
of the Limited Partner's Capital Account during the Incentive Period), above (2)
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the greater of (a) the Limited Partner's Hurdle Rate Amount for a given
Incentive Period or (b) the Limited Partner's Loss Carryforward Amount, if any,
for a given Incentive Period. The Performance Incentive for a given Incentive
Period will be adjusted with respect to any contributions, transfers,
distributions, withdrawals and repurchases applicable to the Limited Partner's
Capital Account for that Incentive Period, or portion thereof.
"Person" means any individual, entity, corporation, partnership, association,
limited liability company, joint-stock company, trust, estate, joint venture,
organization or unincorporated organization.
"Placement Agent" means any Person retained by the Partnership or the General
Partner to assist in the placement of Interests, which Persons will be
designated by the General Partner, subject to approval by the Directors.
"Rebate Amount" means the amount of any rebate to a Limited Partner by the
Adviser or an Affiliate of the Adviser, under such terms and conditions as may
be agreed upon between the Limited Partner and the Adviser or an Affiliate of
the Adviser separate from this Agreement, which represents a return of a portion
of such Limited Partner's allocable share of the Management Fee paid to the
Adviser out of the Partnership's assets, and debited against such Limited
Partner's Capital Account as provided in Section 3.11(a) of this Agreement.
"Securities" means securities (including, without limitation, equities, debt
obligations, options, and other "securities" as that term is defined in Section
2(a)(36) of the ▇▇▇▇ ▇▇▇) and any contracts for forward or future delivery of
any security, debt obligation, currency or commodity, all manner of derivative
instruments and any contracts based on any index or group of securities, debt
obligations, currencies or commodities, and any options on those contracts.
"Subadviser" means an Investment Manager responsible either (1) for directly
managing a portion of the assets of the Partnership in a managed account or (2)
for managing a special purpose investment vehicle in which the Investment
Manager and the Partnership are the sole limited partners, members or other
interest holders.
"Sub-Period" means, with respect to a Partner's Interest in the Partnership, the
initial period that begins upon the Partnership's commencement of investment
operations (or, with respect to subsequent contributions, at the time of those
contributions) and ends at the close of business on the earliest occurrence of:
(1) the last day of the Fiscal Year, (2) the date immediately prior to the
effective date of additional purchases of Interests; (3) the date immediately
prior to the effective date of partial Transfers of Interests; or (4) the date
on which the Partnership dissolves. Each Sub-Period is followed by a subsequent
Sub-Period, with respect to a Partner's then existing Interest in the
Partnership; provided that the Partner continues to hold an Interest in the
Partnership, the General Partner continues to serve as the general partner of
the Partnership, and the Partnership is in existence. Each Sub-Period will
reflect each Partner's appropriate Interest in the Partnership during the
Sub-Period.
"Transfer" means the assignment, transfer, sale or other disposition of all or
any portion of an Interest, including any right to receive any allocations and
distributions attributable to an Interest. Verbs, adverbs or adjectives such as
"Transfer," "Transferred" and "Transferring" have correlative meanings.
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ARTICLE II
ORGANIZATION; ADMISSION OF PARTNERS; DIRECTORS
2.1. FORMATION OF LIMITED PARTNERSHIP
(a) The Partnership was formed as a limited partnership pursuant to the
Certificate and the Agreement of Limited Partnership, dated as of November 6,
2001 (the "Initial Agreement"), between the General Partner and the
Organizational Limited Partner. This Agreement amends and restates and replaces
the Initial Agreement. The Partners agree that their rights, duties and
liabilities will be as provided in the Delaware Act, except as otherwise
provided in this Agreement. The General Partner will cause to be executed and
filed in accordance with the Delaware Act any amendment to the Certificate and
will cause to be executed and filed with applicable governmental authorities any
other instruments, documents and certificates that the General Partner concludes
may from time to time be required by the laws of the United States of America,
the State of Delaware or any other jurisdiction in which the General Partner
determines that the Partnership should do business, or any political subdivision
or agency of any such jurisdiction, or that the General Partner determines is
necessary or appropriate to effectuate, implement and continue the valid
existence and business of the Partnership.
(b) The Partnership was formed for the object and purpose of (and the nature of
the business to be conducted by the Partnership is) engaging in any lawful
activity for which limited partnerships may be formed under the Delaware Act and
engaging in any and all activities necessary or incidental to the foregoing.
2.2. NAME
The name of the Partnership is "▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Institutional Fund of Hedge
Funds LP" or any other name that the General Partner may adopt after the date of
this Agreement upon (a) causing an appropriate amendment to this Agreement to be
executed and to the Certificate to be filed in accordance with the Delaware Act
and (b) sending notice of the amendment to each Limited Partner. The General
Partner grants to the Partnership a non-exclusive license to use the words
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇" in its name for so long as the General Partner remains the
General Partner. The Partners acknowledge that the Partnership has no legal
right or title in or to the words "▇▇▇▇▇▇ ▇▇▇▇▇▇▇," and agree to change
immediately the Partnership's name to a name that does not contain "▇▇▇▇▇▇
▇▇▇▇▇▇▇" or a derivative or abbreviation thereof if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Alternative
Investment Partners LP, or an Affiliate, ceases to be the General Partner.
2.3. PRINCIPAL AND REGISTERED OFFICE
The Partnership will have its principal office at the principal office of
the General Partner, or at any other place designated from time to time by the
General Partner. The Partnership's registered office in the State of Delaware is
at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
The Corporation Service Company is the Partnership's registered agent for
service of process in the State of Delaware, unless a different registered
office or agent is designated from time to time by the General Partner in
accordance with the Delaware Act.
2.4. DURATION
The term of the Partnership commenced on the filing of the Certificate and
will continue until the Partnership is dissolved and wound up and the
Certificate is canceled in accordance with Section 6.1 of this Agreement.
2.5. BUSINESS OF THE PARTNERSHIP
(a) The business of the Partnership is to purchase, sell, invest and trade in
Securities and engage in any financial or derivative transactions relating to
Securities. Portions of the Partnership's assets (which may constitute, in the
aggregate, all of the Partnership's assets) may be invested in Investment Funds
that invest and trade in Securities or in separate managed accounts through
which the Partnership may invest and trade in Securities, some
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or all of which may be advised by one or more Investment Managers or
Subadvisers. The Partnership may execute, deliver and perform all contracts,
agreements and other undertakings and engage in all activities and transactions
as the General Partner, the Directors or the Adviser may deem necessary or
advisable to carry out its objective or business.
(b) The Partnership will operate as a closed-end, management investment company
in accordance with the 1940 Act and subject to any fundamental policies and
investment restrictions described in the Form N-2.
(c) The Partnership may designate from time to time persons to act as
signatories for the Partnership, including, without limitation, persons
authorized to execute and deliver any filings with the Securities and Exchange
Commission or applicable federal or state regulatory authorities or
self-regulatory organizations.
2.6. GENERAL PARTNER
(a) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Alternative Investment Partners LP was admitted to the
Partnership as the General Partner upon its execution of the Initial Agreement.
The General Partner may admit to the Partnership as an additional General
Partner any Person who agrees in writing to be bound by all of the terms of this
Agreement as a General Partner. The General Partner may admit to the Partnership
as a substituted General Partner any Person to which it has Transferred its
Interest as the General Partner in accordance with Section 4.3 of this
Agreement. Any substituted General Partner will be admitted to the Partnership
upon the Transferring General Partner's consenting to such admission and is
authorized to, and will, continue the business of the Partnership without
dissolution. The name and mailing address of the General Partner and the Capital
Contribution of the General Partner will be reflected on the books and records
of the Partnership.
(b) Each General Partner will serve for the duration of the term of the
Partnership, unless the General Partner ceases to be a General Partner in
accordance with Section 4.1 of this Agreement.
2.7. LIMITED PARTNERS
(a) The General Partner may, at any time and without advance notice to or
consent from any other Partner, admit to the Partnership any Person who agrees
to be bound by all of the terms of this Agreement as an additional Limited
Partner. The General Partner may in its absolute discretion reject subscriptions
for Interests (or portions of Interests) and/or may suspend subscriptions. The
admission of any Person as an additional Limited Partner will be effective upon
the General Partner's acceptance on behalf of the Partnership of such Person's
subscription for Interests and the execution and delivery by, or on behalf of,
the additional Limited Partner of this Agreement or an instrument that
constitutes the execution and delivery of this Agreement. The General Partner
will cause the books and records of the Partnership to reflect the name and the
required contribution to the capital of the Partnership of the additional
Limited Partner.
(b) Subject to Section 2.10 of this Agreement, when the entire Capital
Contribution attributable to an Interest for which a Partner has subscribed is
paid for, that Interest will be deemed to be validly issued and fully paid and
non-assessable.
2.8. ORGANIZATIONAL LIMITED PARTNER
(a) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AIP Funding Inc. was admitted to the Partnership as the
Organizational Limited Partner upon its execution of the Initial Agreement and
has contributed $10,000 to the capital of the Partnership. Upon the admission to
the Partnership of any additional Limited Partner, the Organizational Limited
Partner may withdraw from the Partnership as the Organizational Limited Partner
and if it exercises such withdrawal right, it will be entitled to the return of
its Capital Contribution without interest or deduction, and will cease to be a
Limited Partner.
(b) The Organizational Limited Partner will not have any liability for the
obligations or liabilities of the Partnership except to the extent required by
the Delaware Act. Any actions of the Organizational Limited Partner may be taken
by means of a written consent of the Organizational Limited Partner, if
permissible under the 1940 Act.
7
2.9. BOTH GENERAL AND LIMITED PARTNER
A Partner may be simultaneously a General Partner and a Limited Partner,
in which event the Partner's rights and obligations in each capacity will be
determined separately in accordance with the terms and provisions of this
Agreement and as provided in the Delaware Act.
2.10. LIMITED LIABILITY
Except for payment obligations under this Agreement, including Capital
Contribution obligations, and as provided under applicable law, a Limited
Partner will not be liable for the Partnership's obligations in any amount in
excess of the Limited Partner's Capital Account balance, plus the Limited
Partner's share of undistributed profits and assets. Subject to applicable law,
a Limited Partner may be obligated to return to the Partnership certain amounts
distributed to the Limited Partner.
2.11. DIRECTORS
(a) The number of Directors at the date of this Agreement is fixed at not more
than fourteen (14) Directors and no fewer than two (2). After the Closing Date,
the number of Directors will be fixed from time to time by the Directors then in
office, which number may be greater, or lesser, than fourteen (14), but no fewer
than the minimum number of directors permitted to corporations organized under
the laws of the State of Delaware, except that no reduction in the number of
Directors will serve to effect the removal of any Director. Each Partner
approves the delegation by the General Partner to the Directors, in accordance
with Section 3.1 of this Agreement, of certain of the General Partner's rights
and powers.
(b) Each Director will serve for the duration of the term of the Partnership,
unless his or her status as a Director is terminated sooner in accordance with
Section 2.11(d) of this Agreement. Except to the extent the 1940 Act requires
election by Limited Partners, if any vacancy in the position of a Director
occurs, including by reason of an increase in the number of Directors as
contemplated by Section 2.11(a) of this Agreement, the remaining Directors may
appoint an individual to serve in that capacity in accordance with the
provisions of the 1940 Act. Independent Directors will at all times constitute
at least a majority of the Directors then serving. An Independent Director will
be replaced by another Independent Director selected and nominated by the
remaining Independent Directors, or in a manner otherwise permissible under the
1940 Act.
(c) If no Director remains, the General Partner will promptly call a meeting
of the Partners, to be held within 60 days after the date on which the last
Director ceased to act in that capacity, for the purpose of determining whether
to continue the business of the Partnership and, if the business is to be
continued, approving the appointment of the requisite number of Directors. If
the Partners determine at the meeting not to continue the business of the
Partnership, or if the approval of the appointment of the requisite number of
Directors is not approved within 60 days after the date on which the last
Director ceased to act in that capacity, then the Partnership will be dissolved
in accordance with Section 6.1 of this Agreement and the assets of the
Partnership will be liquidated and distributed in accordance with Section 6.2 of
this Agreement.
(d) The status of a Director will terminate (1) if the Director dies; (2) if
the Director resigns as a Director; (3) if the Director is removed in accordance
with Section 2.11(e) of this Agreement; or (4) on December 31 in the year in
which the Director reaches 72 years of age, unless such termination is waived by
resolution of a majority of the Directors, excluding the Director reaching age
72.
(e) Any Director may be removed with or without cause by a vote of a majority
of the Limited Partners or by written consent of Limited Partners holding not
less than two-thirds of the total number of votes eligible to be cast by all
Limited Partners.
(f) The Directors may establish and maintain committees of the Board of
Directors, and the Directors may grant to such committees the authority to,
among other things: value the assets of the Partnership; select and nominate the
Independent Directors of the Partnership; recommend to the Board of Directors
the compensation to be
8
paid to the Independent Directors; and recommend to the Board of Directors the
firm of certified public accountants that will conduct the Partnership's audits.
(g) The Directors may establish or designate committees of the Board of
Directors or the Partnership, whose members may include the Directors and/or
other Persons who are not Directors, to provide advice and other services to the
Partnership, which committees may include (but are not limited to) a committee
that will value the assets of the Partnership.
(h) The Independent Directors will receive compensation for their services as
Independent Directors, as determined by the Board of Directors.
ARTICLE III
MANAGEMENT; ADVICE AND MANAGEMENT
3.1. MANAGEMENT AND CONTROL
(a) The General Partner delegates to the Directors those rights and powers of
the General Partner necessary for the Directors to manage and control the
business affairs of the Partnership and to carry out their oversight obligations
with respect to the Partnership required under the 1940 Act, state law, and any
other applicable laws or regulations. Rights and powers delegated to the
Directors include, without limitation, the authority as Directors to oversee and
to establish policies regarding the management, conduct and operation of the
Partnership's business, and to do all things necessary and proper as Directors
to carry out the objective and business of the Partnership, including, without
limitation, the power to engage the Adviser to provide Advice and Management and
to remove the Adviser, as well as to exercise any other rights and powers
expressly given to the Directors under this Agreement. The Partners intend that,
to the fullest extent permitted by law, and except to the extent otherwise
expressly provided in this Agreement, (1) each Director is vested with the same
powers and authority on behalf of the Partnership as are customarily vested in
each director of a Delaware corporation and (2) each Independent Director is
vested with the same powers and authority on behalf of the Partnership as are
customarily vested in each director who is not an "interested person" (as that
term is defined in the ▇▇▇▇ ▇▇▇) of a closed-end, management investment company
registered under the 1940 Act that is organized as a Delaware corporation.
During any period in which the Partnership has no Directors, the General Partner
will manage and control the Partnership. Each Director will be the agent of the
Partnership but will not, for any purpose, be a General Partner. Notwithstanding
the delegation described in this Section 3.1(a), the General Partner will not
cease to be the General Partner and will continue to be liable as such and in no
event will a Director be considered a General Partner by agreement, estoppel or
otherwise as a result of the performance of his or her duties under this
Agreement or otherwise. The General Partner retains those rights, powers and
duties that have not been delegated under this Agreement. Any Director may be
admitted to the Partnership in accordance with Section 2.7 of this Agreement and
make Capital Contributions and own an Interest, in which case the Director will
also become a Limited Partner.
(b) The Partnership will file a tax return as a partnership for U.S. federal
income tax purposes. All decisions for the Partnership relating to tax matters
including, without limitation, whether to make any tax elections (including the
election under Section 754 of the Code), the positions to be made on the
Partnership's tax returns and the settlement or further contest or litigation of
any audit matters raised by the Internal Revenue Service or any other taxing
authority, will be made by the Directors. All actions (other than ministerial
actions) taken by the tax matters partner, as designated in Section 3.1(c)
below, will be subject to the approval of the Directors.
(c) The General Partner will be the designated tax matters partner for purposes
of the Code. Each Partner agrees not to treat, on his, her or its personal
income tax return or in any claim for a refund, any item of income, gain, loss,
deduction or credit in a manner inconsistent with the treatment of the item by
the Partnership. The tax matters partner will have the exclusive authority and
discretion to make any elections required or permitted to be made by the
Partnership under any provisions of the Code or any other revenue laws.
(d) No Limited Partner will have any right to participate in or take any
part in the management or control of the Partnership's business, and no Limited
Partner will have any right, power or authority to act for or bind the
Partnership. Limited Partners will have the right to vote on any matters only as
provided in this Agreement or on
9
any matters that require the approval of the holders of voting securities under
the 1940 Act and will have no right to exercise any other vote granted to
Limited Partners under the Delaware Act, any such rights being vested in the
Directors (or the General Partner if there are no Directors) and may be
exercised without requiring the approval of the Limited Partners.
3.2. POWERS RESERVED BY THE GENERAL PARTNER
Notwithstanding anything in this Agreement to the contrary, the General
Partner retains all rights, duties and powers to manage the affairs of the
Partnership that may not be delegated under Delaware law, and that are not
otherwise delegated by the General Partner to the Directors or assumed by the
Adviser or any other Person under the terms of any agreement between the
Partnership and the Adviser or any other Person. Specifically, and without
limitation, the General Partner will retain full power and authority on behalf
of and in the name of the Partnership:
(1) to issue to any Partner an instrument certifying that the Partner is
the owner of an Interest;
(2) to call and conduct meetings of Partners at the Partnership's
principal office or elsewhere as it may determine, and to assist the
Directors in calling and conducting meetings of the Directors;
(3) to engage and terminate attorneys, accountants (subject to the
provisions of the ▇▇▇▇ ▇▇▇) and other professional advisers and
consultants as the General Partner deems necessary or advisable in
connection with the affairs of the Partnership or as may be directed
by the Directors;
(4) to act as tax matters partner in accordance with Section 3.1(b) of
this Agreement, and to assist in the preparation and filing of any
required tax or information returns to be made by the Partnership;
(5) as directed by the Directors, to commence, defend and conclude any
action, suit, investigation or other proceeding that pertains to the
Partnership or any assets of the Partnership;
(6) as directed by the Directors, to arrange for the purchase of any
insurance covering the potential liabilities of the Partnership or
relating to the performance of the Directors, the General Partner, the
Adviser or any of their principals, partners, directors, officers,
members, employees and agents;
(7) to execute, deliver and perform any contracts, agreements and other
undertakings, and to engage in activities and transactions that are
necessary or appropriate for the conduct of the business of the
Partnership, and to bind the Partnership by those contracts,
agreements, and other undertakings, provided that the officers of the
Partnership, as directed by the Directors, may execute and deliver
contracts and agreements on behalf of the Partnership and bind the
Partnership to those contracts and agreements;
(8) to make determinations regarding subscriptions for and/or the Transfer
of Interests, including, without limitation, determinations regarding
the suspension of subscriptions, and to execute, deliver and perform
subscription agreements, placement agency agreements relating to the
placement of Interests, administration agreements appointing an
administrator to perform various administrative action on behalf of
the Partnership, escrow agreements and custodial agreements without
the consent of or notice to any other Person, notwithstanding any
other provision of this Agreement;
(9) to make determinations regarding appropriate reserves to be created
for the contingent, conditional or unmatured liabilities of the
Partnership;
(10) as provided in Section 7.2 of this Agreement, to make determinations
regarding adjustments to the computation of Net Profit or Net Loss and
allocations among the Partners under Article V of this Agreement;
10
(11) to manage or oversee the general administrative and operational
aspects of the Partnership; and
(12) as directed by the Directors, to establish additional series of
Limited Partners, General Partners, or Interests having separate
rights, powers, or duties with respect to specified property or
obligations of the Partnership or profits or losses associated
with specified property or obligations of the Partnership, and
having separate business purposes or investment objectives as the
Directors may determine, consistent with the 1940 Act and the
Delaware Act, so long as the assets and liabilities of one series
are limited to the assets and liabilities of that series.
3.3. ACTIONS BY DIRECTORS
(a) Unless provided otherwise in this Agreement, the Directors will act only:
(1) by the affirmative vote of a majority of the Directors (which majority will
include any requisite number of Independent Directors required by the ▇▇▇▇ ▇▇▇)
present at a meeting duly called at which a quorum of the Directors is present
either in person or, to the extent consistent with the provisions of the 1940
Act, by conference telephone or other communications equipment by means of which
all Persons participating in the meeting can hear each other; or (2) by
unanimous written consent of all of the Directors without a meeting, if
permissible under the ▇▇▇▇ ▇▇▇.
(b) The Directors may designate from time to time a Director or an officer of
the Partnership or the General Partner who will preside at all meetings.
Meetings of the Directors may be called by the General Partner, the Chairman or
any two Directors, and may be held on any date and at any time and place
determined by the Directors. Each Director will be entitled to receive written
notice of the date, time and place of a meeting within a reasonable time in
advance of the meeting. Notice need not be given to any Director who attends a
meeting without objecting to the lack of notice or who executes a written waiver
of notice with respect to the meeting. A majority of the Directors then in
office will constitute a quorum at any meeting of Directors.
(c) The Directors may appoint from time to time agents and employees of the
Partnership who will have the same powers and duties on behalf of the
Partnership as are customarily vested in officers of a corporation incorporated
under Delaware law, or such other powers and duties as may be designated by the
Directors, in their sole discretion, and designate them as officers or agents of
the Partnership by resolution of the Directors specifying their titles or
functions.
3.4. MEETINGS OF PARTNERS
(a) Actions requiring the vote of the Partners may be taken at any duly
constituted meeting of the Partners at which a quorum is present or by means of
a written consent. Meetings of the Partners may be called by the General
Partner, by the affirmative vote of a majority of Directors then in office, or
by Partners holding at least a majority of the total number of votes eligible to
be cast by all Partners, and may be held at any time, date and place determined
by the General Partner in the case of meetings called by the General Partner or
the Partners and at any time, date and place determined by the Directors in the
case of meetings called by the Directors. In each case, the General Partner will
provide notice of the meeting, stating the date, time and place of the meeting
and the record date for the meeting, to each Partner entitled to vote at the
meeting within a reasonable time prior to the meeting. Failure to receive notice
of a meeting on the part of any Partner will not affect the validity of any act
or proceeding of the meeting, so long as a quorum is present at the meeting.
Except as otherwise required by applicable law, only matters set out in the
notice of a meeting may be voted on by the Partners at the meeting. The presence
in person or by proxy of Partners holding a majority of the total number of
votes eligible to be cast by all Partners as of the record date will constitute
a quorum at any meeting of Partners. In the absence of a quorum, a meeting may
be adjourned to the time or times as determined by the General Partner and
communicated to the Directors in the manner described above in this Section
3.4(a). Except as otherwise required by any provision of this Agreement or of
the 1940 Act, (1) those candidates receiving a plurality of the votes cast at
any meeting of Partners called pursuant to Section 2.11(c) of this Agreement or
elected pursuant to the requirement of Section 2.11(b) will be elected as
Directors and (2) all other actions of the Partners taken at a meeting will
require the affirmative vote of Partners holding a majority of the total number
of votes eligible to be cast by those Partners who are present in person or by
proxy at the meeting.
11
(b) Each Partner will be entitled to cast at any meeting of Partners or
pursuant to written consent a number of votes equivalent to the Partner's
Investment Percentage as of the record date for the meeting or the date of the
written consent. The General Partner will establish a record date not less than
10 nor more than 60 days prior to the date of any meeting of Partners or mailing
(including by electronic transmission) to the Partners of any written consent,
to determine eligibility to vote at the meeting and the number of votes that
each Partner will be entitled to cast at the meeting, and will maintain for each
record date a list setting out the name of each Partner and the number of votes
that each Partner will be entitled to cast at the meeting.
(c) A Partner may vote at any meeting of Partners by a properly executed proxy
transmitted to the Partnership at any time at or before the time of the meeting
by telegram, telecopier or other means of electronic communication or other
readable reproduction as contemplated by the provisions relating to proxies
applicable to corporations incorporated under the laws of Delaware now or in the
future in effect. A proxy may be suspended or revoked, as the case may be, by
the Partner executing the proxy by a later writing delivered to the Partnership
at any time prior to exercise of the proxy or if the Partner executing the proxy
is present at the meeting and votes in person. Any action of the Partners that
is permitted to be taken at a meeting of the Partners may be taken without a
meeting if consents in writing, setting out the action to be taken, are signed
by Partners holding a majority of the total number of votes eligible to be cast
or any greater percentage as may be required under this Agreement to approve the
action.
3.5. ADVICE AND MANAGEMENT
(a) The Directors will, among their powers, have the authority to cause the
Partnership to engage the Adviser to provide Advice and Management to the
Partnership under their direction, subject to any approval of such engagement by
the Partners that may be required under the 1940 Act. In this regard, on
February 14, 2002 the Directors gave their initial approval (including the
approval of a majority of the Independent Directors at a meeting called for such
purpose) of the engagement of the Adviser and the Organizational Limited Partner
approved such engagement by a written consent dated February 5, 2002. As
directed by the Directors, the Partnership and the General Partner, on behalf of
the Partnership, among its powers described in Section 3.2 of this Agreement,
will have the authority to execute, deliver and monitor the performance of any
contract or agreement to provide Advice and Management to the Partnership (each,
an "Investment Advisory Agreement"). Any such Investment Advisory Agreement will
require that the Adviser acknowledge its obligations under this Agreement.
(b) So long as the Adviser has been and continues to be authorized to provide
Advice and Management pursuant to an Investment Advisory Agreement, it will
have, subject to any policies and restrictions described in the Memorandum or
adopted from time to time by the Directors and communicated in writing to the
Adviser (in each case, as more fully described in such Investment Advisory
Agreement), full discretion and authority on behalf of and in the name of the
Partnership (1) to manage the assets and liabilities of the Partnership, (2) to
identify and evaluate Investment Managers and Investment Funds and to determine
the assets of the Partnership to be committed to each Investment Manager and
Investment Fund from time to time (subject to the provisions of Section
3.5(b)(8) of this Agreement in the case of Subadvisers), in each case subject to
the terms and conditions of the governing documents of each Investment Manager
and Investment Fund, and (3) to invest directly the assets of the Partnership in
investments pending allocation or reallocation of the assets in Investment Funds
or to ensure the availability of cash as required by the Partnership in the
ordinary course of its business. In furtherance of, and subject to the
provisions of this Section 3.5(b), the Adviser, except as otherwise provided in
the applicable Investment Advisory Agreement (and at all times subject to the
provisions of the 1940 Act), will have full discretion and authority on behalf
of and in the name of the Partnership:
(1) to purchase, sell, exchange, trade and otherwise deal in and with
Securities and other property of the Partnership, including, without
limitation, interests in Investment Funds, and to loan Securities of
the Partnership;
(2) to do any and all acts and exercise all rights with respect to the
Partnership's interest as an investor in any Person, including,
without limitation, the voting of limited partnership interests or
shares of Investment Funds;
(3) to enter into subscription or other agreements relating to investments
in Investment Funds (subject to Section 3.5(b)(8) of this Agreement in
the case of agreements with Subadvisers), including,
12
without limitation, agreements irrevocably to forego the Partnership's
right to vote its limited partnership (or similar) interests or shares
of Investment Funds;
(4) to negotiate the terms of and enter into agreements with Investment
Managers and Investment Funds (subject to Section 3.5(b)(8) of this
Agreement in the case of agreements with Subadvisers) that provide
for, among other things, the payment of management fees, reimbursement
of expenses and allocations of profits to Investment Managers and the
indemnification by the Partnership of Investment Managers and
Investment Funds to the same or different extent as provided for with
respect to the Adviser, and to amend, modify, terminate or grant
waivers in respect of those agreements;
(5) to open, maintain and close accounts with brokers and dealers, to make
all decisions relating to the manner, method and timing of Securities
and other investment transactions, to select and place orders with
brokers, dealers or other financial intermediaries for the execution,
clearance or settlement of any transactions on behalf of the
Partnership on those terms that the Adviser considers appropriate, and
to grant limited discretionary authorization to brokers, dealers or
other financial intermediaries with respect to price, time and other
terms of investment and trading transactions;
(6) to borrow from banks or other financial institutions and to pledge the
assets of the Partnership as collateral for those borrowings, to trade
on margin, to exercise or refrain from exercising all rights regarding
the Partnership's investments, and to instruct custodians regarding
the settlement of transactions, the disbursement of payments to
Partners with respect to repurchases of Interests or portions of
Interests and the payment of Partnership expenses, including those
relating to the organization and registration of the Partnership;
(7) subject to Section 3.5(b)(8) of this Agreement, to engage the services
of Persons, including ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co. and/or its
Affiliates, to assist the Adviser in providing, or to provide under
the Adviser's control and supervision, Advice and Management to the
Partnership at the expense of the Adviser and to amend, modify or
terminate or grant waivers in respect of these services;
(8) (A) to commit all or part of the Partnership's assets to the
discretionary management of one or more Subadvisers, the selection of
which will be subject to the approval of a majority (as defined in the
▇▇▇▇ ▇▇▇) of the Partnership's outstanding voting securities, unless
the Partnership receives an exemption from the provisions of the 1940
Act requiring such approval, (B) to negotiate and enter into
agreements with the Subadvisers that provide for, among other things,
the indemnification by the Partnership of the Subadvisers to the same
or different extent as provided for with respect to the Adviser, and
to amend, modify, terminate or grant waivers in respect of those
agreements (subject to the requirements of the 1940 Act and applicable
law), and (C) to authorize the payment of fees, reimbursement of
expenses and allocations of profits to Subadvisers in accordance with
their respective governing documents; and
(9) subject to applicable law, to take all such other actions that the
Adviser considers necessary or advisable in furtherance of its duties
and powers under the applicable Investment Advisory Agreement.
(c) The Adviser, to the extent of its powers set out in this Agreement or
otherwise vested in it by action of the Directors not inconsistent with this
Agreement, is an agent of the Partnership, and the actions of the Adviser taken
or refrained from being taken in accordance with such powers will bind the
Partnership.
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3.6. CUSTODY OF ASSETS OF THE PARTNERSHIP
Notwithstanding anything to the contrary in this Agreement, the General
Partner will not have any authority to hold or have possession or custody of any
funds, Securities or other property of the Partnership. The physical possession
of all funds, Securities or other property of the Partnership will at all times
be held, controlled and administered by one or more custodians retained by the
Partnership. The General Partner will have no responsibility, other than that
associated with the oversight and supervision of custodians retained by the
Partnership, with respect to the collection of income or the physical
acquisition or safekeeping of the funds, Securities or other assets of the
Partnership, all duties of collection, physical acquisition or safekeeping being
the sole obligation of such custodians.
3.7. BROKERAGE
In the course of selecting brokers, dealers and other financial
intermediaries for the execution, clearance and settlement of transactions for
the Partnership under Sections 3.5(b)(5) and (6) of this Agreement, the Adviser
may, subject to policies adopted by the Partnership and to the provisions of
applicable law, agree to commissions, fees and other charges on behalf of the
Partnership as the Adviser deems reasonable in the circumstances, taking into
account all such factors as it deems relevant, including the reliability of the
broker, financial responsibility of the broker, strength of the broker, ability
of the broker to efficiently execute transactions, the broker's facilities, and
the broker's provision or payment of the costs of research and other services
that are of benefit to the Partnership, the Adviser and other clients of and
accounts managed by the Adviser, even if the cost of these services does not
represent the lowest cost available. The Adviser will be under no obligation to
combine or arrange orders so as to obtain reduced charges unless otherwise
required under the U.S. Federal securities laws. The Adviser, subject to
procedures adopted by the Directors, may use Affiliates of the Adviser and the
General Partner as brokers to effect the Partnership's Securities transactions
and the Partnership may pay commissions to these brokers in amounts as are
permissible under applicable law.
3.8. OTHER ACTIVITIES
(a) None of the General Partner, the Adviser and their principals, partners,
directors, officers, members, employees and beneficial owners nor the Directors
will be required to devote full time to the affairs of the Partnership, but each
will devote such time as each may reasonably be required to perform its
obligations under this Agreement and under the ▇▇▇▇ ▇▇▇.
(b) The Adviser, the Directors, any Partner, and any Affiliate of any Partner
may engage in or possess an interest in other business ventures or commercial
dealings of every kind and description, independently or with others, including,
but not limited to, acquisition and disposition of Securities, provision of
investment advisory or brokerage services, serving as directors, officers,
employees, advisors or agents of other companies, partners of any partnership,
members of any limited liability company, or trustees of any trust, or entering
into any other commercial arrangements. No Partner will have any rights in or to
such activities of any other Partner, the Adviser, the Directors or any
Affiliate of any Partner or any profits derived from these activities.
(c) The General Partner, the Adviser and their principals, partners, directors,
officers, members, employees and beneficial owners and the Directors, from time
to time may acquire, possess, manage, hypothecate and dispose of Securities or
other investment assets, and engage in any other investment transaction for any
account over which they exercise discretionary authority, including their own
accounts, the accounts of their families, the account of any entity in which
they have a beneficial interest or the accounts of others for whom or which they
may provide investment advisory or other services.
(d) To the extent that at law or in equity the Directors, the Adviser or the
General Partner has duties (including fiduciary duties) and liabilities relating
to those duties to the Partnership or to any other Partner or other Person bound
by this Agreement, any such Person acting under this Agreement will not be
liable to the Partnership or to any other Partner or other Person bound by this
Agreement for its good faith reliance on the provisions of this Agreement. The
provisions of this Agreement, to the extent that they restrict the duties and
liabilities of the General Partner, the Adviser or the Directors otherwise
existing at law or in equity, are agreed by the Partners to replace the other
duties and liabilities of the General Partner, the Adviser or the Directors.
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3.9. DUTY OF CARE
(a) The Directors, the Adviser and the General Partner, including any officer,
director, partner, member, principal, employee or agent of any of them, will not
be liable to the Partnership or to any of its Partners for any loss or damage
occasioned by any act or omission in the performance of the Person's services
under this Agreement, in the absence of a final judicial decision on the merits
from which no further right to appeal may be taken that the loss is due to an
act or omission of the Person constituting willful misfeasance, bad faith, gross
negligence or reckless disregard of the Person's duties under this Agreement.
(b) Limited Partners not in breach of any obligation under this Agreement or
under any agreement pursuant to which the Limited Partner subscribed for
Interests will be liable to the Partnership, any Partner or third parties only
as required by this Agreement or applicable law.
3.10. INDEMNIFICATION
(a) To the fullest extent permitted by law, the Partnership will, subject to
Section 3.10(c) of this Agreement, indemnify each General Partner and Adviser
(including for this purpose each officer, director, member, partner, principal,
employee or agent of, or any Person who controls, is controlled by or is under
common control with, a General Partner or Adviser or partner of a General
Partner or Adviser, and their executors, heirs, assigns, successors or other
legal representatives) and each Director (and his executors, heirs, assigns,
successors or other legal representatives) (each such Person being referred to
as an "indemnitee") against all losses, claims, damages, liabilities, costs and
expenses arising by reason of being or having been a General Partner, Adviser or
Director of the Partnership, or the past or present performance of services to
the Partnership by the indemnitee, except to the extent that the loss, claim,
damage, liability, cost or expense has been finally determined in a judicial
decision on the merits from which no further right to appeal may be taken in any
such action, suit, investigation or other proceeding to have been incurred or
suffered by the indemnitee by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of the
indemnitee's office. These losses, claims, damages, liabilities, costs and
expenses include, but are not limited to, amounts paid in satisfaction of
judgments, in compromise, or as fines or penalties, and counsel fees and
expenses incurred in connection with the defense or disposition of any action,
suit, investigation or other proceeding, whether civil or criminal, before any
judicial, arbitral, administrative or legislative body, in which the indemnitee
may be or may have been involved as a party or otherwise, or with which such
indemnitee may be or may have been threatened, while in office or thereafter.
The rights of indemnification provided under this Section 3.10 are not to be
construed so as to provide for indemnification of an indemnitee for any
liability (including liability under U.S. Federal securities laws which, under
certain circumstances, impose liability even on Persons that act in good faith)
to the extent (but only to the extent) that indemnification would be in
violation of applicable law, but will be construed so as to effectuate the
applicable provisions of this Section 3.10.
(b) Expenses, including counsel fees and expenses, incurred by any indemnitee
(but excluding amounts paid in satisfaction of judgments, in compromise, or as
fines or penalties) may be paid from time to time by the Partnership in advance
of the final disposition of any action, suit, investigation or other proceeding
upon receipt of an undertaking by or on behalf of the indemnitee to repay to the
Partnership amounts paid if a determination is made that indemnification of the
expenses is not authorized under Section 3.10(a) of this Agreement, so long as
(1) the indemnitee provides security for the undertaking, (2) the Partnership is
insured by or on behalf of the indemnitee against losses arising by reason of
the indemnitee's failure to fulfill his, her or its undertaking, or (3) a
majority of the Independent Directors (excluding any Director who is either
seeking advancement of expenses under this Agreement or is or has been a party
to any other action, suit, investigation or other proceeding involving claims
similar to those involved in the action, suit, investigation or proceeding
giving rise to a claim for advancement of expenses under this Agreement) or
independent legal counsel in a written opinion determines, based on a review of
readily available facts (as opposed to a full trial-type inquiry), that reason
exists to believe that the indemnitee ultimately will be entitled to
indemnification.
(c) As to the disposition of any action, suit, investigation or other
proceeding (whether by a compromise payment, pursuant to a consent decree or
otherwise) without an adjudication or a decision on the merits by a court, or by
any other body before which the proceeding has been brought, that an indemnitee
is liable to the Partnership or its Partners by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties involved
15
in the conduct of the indemnitee's office, indemnification will be provided in
accordance with Section 3.10(a) of this Agreement if (1) approved as in the best
interests of the Partnership by a majority of the Independent Directors
(excluding any Director who is either seeking indemnification under this
Agreement or is or has been a party to any other action, suit, investigation or
proceeding involving claims similar to those involved in the action, suit,
investigation or proceeding giving rise to a claim for indemnification under
this Agreement) upon a determination, based upon a review of readily available
facts (as opposed to a full trial-type inquiry), that the indemnitee acted in
good faith and in the reasonable belief that the actions were in the best
interests of the Partnership and that the indemnitee is not liable to the
Partnership or its Partners by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of the
indemnitee's office, or (2) the Directors secure a written opinion of
independent legal counsel, based upon a review of readily available facts (as
opposed to a full trial-type inquiry), to the effect that indemnification would
not protect the indemnitee against any liability to the Partnership or its
Partners to which the indemnitee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of the indemnitee's office.
(d) Any indemnification or advancement of expenses made in accordance with
this Section 3.10 will not prevent the recovery from any indemnitee of any
amount if the indemnitee subsequently is determined in a final judicial decision
on the merits in any action, suit, investigation or proceeding involving the
liability or expense that gave rise to the indemnification or advancement of
expenses to be liable to the Partnership or its Partners by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of the indemnitee's office. In any suit brought by an
indemnitee to enforce a right to indemnification under this Section 3.10, it
will be a defense that the indemnitee has not met the applicable standard of
conduct described in this Section 3.10. In any suit in the name of the
Partnership to recover any indemnification or advancement of expenses made in
accordance with this Section 3.10, the Partnership will be entitled to recover
the expenses upon a final adjudication from which no further right of appeal may
be taken. In any suit brought to enforce a right to indemnification or to
recover any indemnification or advancement of expenses made in accordance with
this Section 3.10, the burden of proving that the indemnitee is not entitled to
be indemnified, or to any indemnification or advancement of expenses, under this
Section 3.10 will be on the Partnership (or any Partner acting derivatively or
otherwise on behalf of the Partnership or its Partners).
(e) An indemnitee may not satisfy any right of indemnification or advancement
of expenses granted in this Section 3.10 or to which he, she or it may otherwise
be entitled except out of the assets of the Partnership, and no Partner will be
personally liable with respect to any such claim for indemnification or
advancement of expenses.
(f) The rights of indemnification provided in this Section 3.10 will not be
exclusive of or affect any other rights to which any Person may be entitled by
contract or otherwise under law. Nothing contained in this Section 3.10 will
affect the power of the Partnership to purchase and maintain liability insurance
on behalf of any General Partner, any Director, the Adviser or other Person.
(g) The General Partner may enter into agreements indemnifying Persons
providing services to the Partnership to the same, lesser or greater extent as
set out in this Section 3.10.
3.11. FEES, EXPENSES AND REIMBURSEMENT
(a) As consideration for providing Advice and Management, and for so long as
the Adviser provides Advice and Management to the Partnership pursuant to an
Investment Advisory Agreement, the Partnership will pay the Adviser a monthly
management fee at an annual rate determined by the Directors and approved in the
manner contemplated by the 1940 Act of the value of each Limited Partner's
Capital Account as of the first Business Day of each month (the "Management
Fee"), which amount will be charged as of that date to the Capital Account of
each Limited Partner. The Management Fee will be computed based on the Capital
Account of each Limited Partner as of the end of business on the last Business
Day of each month, after adjustment for any subscriptions effective on that date
and before giving effect to any repurchase of Interests or portions of Interests
effective as of that date, and will be due and payable in arrears within five
Business Days after the end of the month. The Adviser is authorized, but not
required, to waive, reduce or rebate the Management Fee calculated with respect
to, and deducted from, the Capital Account of any Limited Partner, and is
authorized, but not required, to pay all or part of the Management Fee to third
parties for services rendered in connection with the placement of Interests.
16
(b) The Partnership will compensate each Independent Director for his or her
services rendered in connection with the Partnership as may be agreed to by the
Directors and the General Partner, and as described in the Memorandum. In
addition, the Partnership will reimburse the Directors for reasonable
out-of-pocket expenses incurred by them in performing their duties with respect
to the Partnership.
(c) The Partnership will add to all subscriptions for Interests or portions of
Interests any sales charge or fee, in form and amount as determined by the
General Partner, subject to approval by the Directors, payable to Placement
Agents for the placement of such Interests or portions of Interests. Any sales
charge or fee paid in accordance with this Section 3.11(c) will not constitute a
Capital Contribution made by the Partner to the Partnership nor part of the
assets of the Partnership.
(d) The Partnership will bear all expenses incurred in connection with its
business other than those specifically required to be borne by the Adviser under
this Agreement or an Investment Advisory Agreement. Expenses to be borne by the
Partnership include, but are not limited to, the following:
(1) all investment-related expenses, including, but not limited to, fees
paid and expenses reimbursed, directly or indirectly, to Investment
Managers (including management fees, performance or incentive fees or
allocations and redemption or withdrawal fees, however titled or
structured), all costs and expenses directly related to portfolio
transactions and positions for the Partnership's account, such as
direct and indirect expenses associated with the Partnership's
investments, including its investments in Investment Funds or with
Subadvisers (whether or not consummated), and enforcing the
Partnership's rights in respect of such investments, transfer taxes
and premiums, taxes withheld on non-U.S. dividends, fees for data and
software providers, research expenses, professional fees (including,
without limitation, the fees and expenses of consultants, attorneys
and experts) and, if applicable in the event the Partnership utilizes
a Subadviser (or in connection with the Partnership's temporary or
cash management investments), brokerage commissions, interest and
commitment fees on loans and debit balances, borrowing charges on
Securities sold short, dividends on Securities sold but not yet
purchased and margin fees;
(2) all costs and expenses associated with the establishment of
Investment Funds (whether or not consummated) managed by Subadvisers;
(3) any non-investment-related interest expense;
(4) attorneys' fees and disbursements associated with preparing and
updating any Offering Materials and with reviewing subscription
materials in connection with qualifying prospective investors or
prospective holders of Transferred Interests;
(5) fees and disbursements of any accountants engaged by the Partnership,
and expenses related to the annual audit of the Partnership and
compliance with any applicable U.S. Federal or state laws;
(6) fees paid and out-of-pocket expenses reimbursed to the Partnership's
administrator;
(7) recordkeeping, custody and escrow fees and expenses;
(8) the costs of an errors and omissions/directors' and officers'
liability insurance policy and a fidelity bond;
(9) the costs of preparing and mailing reports and other communications,
including proxy, tender offer correspondence or similar materials, to
Limited Partners;
(10) the Management Fee;
(11) fees of Independent Directors and travel expenses of Directors
relating to meetings of the Board of Directors and committees
thereof;
17
(12) all costs and charges for equipment or services used in preparing
or communicating information regarding the Partnership's
transactions or the valuation of its assets among the Adviser and
any custodian, administrator or other agent engaged by the
Partnership;
(13) any extraordinary expenses, including indemnification provisions
as provided for in Section 3.10 of this Agreement;
(14) any other expenses as may be approved from time to time by the
Directors, other than those required to be borne by the Adviser
or the General Partner; and
(15) the Partnership's organization expenses and offering costs, which
will initially be borne by the Adviser, and paid by the
Partnership as provided in this Section 3.11(d)(15). The
Partnership will reimburse the Adviser for these expenditures,
through monthly expense allocations to Limited Partners' Capital
Accounts, for a period not to exceed the first twelve months
after the Closing Date. The amount of each such monthly
reimbursement to the Adviser will equal 0.0125% (0.15% on an
annualized basis) of the Partnership's net assets as of the end
of each month during such period. If, after the twelfth month
following the Closing Date, all of the organization expenses and
offering costs have not been reimbursed to the Adviser from the
monthly expense allocations, the Adviser will bear the remaining
portion of such expenditures. If the Adviser is completely
reimbursed before the end of such twelve-month period, then,
during the remainder of the twelve-month period, newly admitted
Limited Partners, and existing Limited Partners that subscribe
for additional Interests, will be allocated a proportionate share
of the amount previously reimbursed to the Adviser.
(e) Each of the Adviser and the General Partner will be entitled to
reimbursement from the Partnership for any of the above expenses that it pays on
behalf of the Partnership, other than as provided in Section 3.11(d)(15) above.
ARTICLE IV
TERMINATION OF STATUS OF GENERAL PARTNER; REMOVAL OF GENERAL PARTNER; TRANSFERS
AND REPURCHASES
4.1. TERMINATION OF STATUS OF GENERAL PARTNER
A General Partner will cease to be a general partner of the Partnership if
the General Partner (a) is dissolved or otherwise terminates its existence; (b)
voluntarily withdraws as General Partner (which it may do at any time in its
sole discretion); (c) is removed; (d) Transfers its entire Interest as General
Partner as permitted under Section 4.3 of this Agreement and the Person to which
the Interest is Transferred is admitted as a substituted General Partner under
Section 2.6(a) of this Agreement; or (e) otherwise ceases to be a General
Partner under the Delaware Act.
4.2. REMOVAL OF GENERAL PARTNER
Any General Partner may be removed by the vote or written consent of
Partners holding not less than 80% of the total number of votes eligible to be
cast by all Partners.
4.3. TRANSFER OF INTEREST OF GENERAL PARTNER
A General Partner may not Transfer all or any portion of its Interest as
the General Partner except to Persons who have agreed to be bound by all of the
terms of this Agreement and applicable law. If a General Partner Transfers its
entire Interest as General Partner, it will not cease to be a General Partner
unless and until the transferee is admitted to the Partnership as a substituted
General Partner pursuant to Section 2.6(a) of this Agreement. In executing this
Agreement, each Partner is deemed to have consented to any Transfer contemplated
by this Section 4.3.
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4.4. TRANSFER OF INTERESTS OF LIMITED PARTNERS
(a) Any Interest or portion of any Interest held by a Limited Partner may be
Transferred only (1) by operation of law pursuant to the death, bankruptcy,
insolvency, adjudicated incompetence, or dissolution of the Limited Partner; or
(2) under certain limited instances set out in this Agreement, with the written
consent of the General Partner (which may be withheld in the General Partner's
sole and absolute discretion). Unless the Partnership consults with legal
counsel to the Partnership and counsel confirms that the Transfer will not cause
the Partnership to be treated as a "publicly traded partnership" taxable as a
corporation, however, the General Partner may not consent to a Transfer unless
the following conditions are met: (i) the Transferring Limited Partner has been
a Limited Partner for at least six months; (ii) the proposed Transfer is to be
made on the effective date of an offer by the Partnership to repurchase
Interests; and (iii) the Transfer is (A) one in which the tax basis of the
Interest in the hands of the transferee is determined, in whole or in part, by
reference to its tax basis in the hands of the Transferring Limited Partner
(e.g., certain Transfers to affiliates, gifts and contributions to family
entities), (B) to members of the Transferring Limited Partner's immediate family
(siblings, spouse, parents and children), or (C) a distribution from a qualified
retirement plan or an individual retirement account. In addition, the General
Partner may not consent to a Transfer unless the Person to whom or which an
Interest or portion of an Interest is Transferred (or each of the Person's
equity owners if the Person is a "private investment company" as defined in Rule
205-3(d)(3) under the Advisers Act, an investment company registered under the
1940 Act, or a business development company as defined under the Advisers Act)
is a Person whom or which the General Partner believes is an "accredited
investor" as defined in Regulation D under the 1933 Act, a "Qualified Eligible
Participant" as defined in Rule 4.7 under the Commodity Exchange Act and meets
the requirements of paragraph (d)(1) of Rule 205-3 under the Advisers Act or
successor provision of any of those rules, or is otherwise exempt from the
requirements of those rules. In the event that other investor eligibility
requirements are established by the Partnership, the Person to whom or which an
Interest or portion of an Interest is Transferred must satisfy these other
requirements. If any transferee does not meet the investor eligibility
requirements described in this Section 4.4(a), the General Partner may not
consent to the Transfer. In addition, no Limited Partner will be permitted to
Transfer his, her or its Interest or portion of an Interest unless after the
Transfer the balance of the Capital Account of the transferee, and of the
Limited Partner Transferring less than the Partner's entire Interest, is at
least equal to the amount of the Limited Partner's initial Capital Contribution.
Any permitted transferee will be entitled to the allocations and distributions
allocable to the Interest or portion of an Interest so acquired and to Transfer
the Interest or portion of an Interest in accordance with the terms of this
Agreement, but will not be entitled to the other rights of a Limited Partner
unless and until the transferee becomes a substituted Limited Partner. If a
Limited Partner Transfers an Interest or portion of an Interest with the
approval of the General Partner, the General Partner will promptly take all
necessary actions so that each transferee or successor to whom or to which the
Interest or portion of an Interest is Transferred is admitted to the Partnership
as a Limited Partner. The admission of any transferee as a substituted Limited
Partner will be effective upon the execution and delivery by, or on behalf of,
the substituted Limited Partner of this Agreement or an instrument that
constitutes the execution and delivery of this Agreement. Each Limited Partner
and transferee agrees to pay all expenses, including attorneys' and accountants'
fees, incurred by the Partnership in connection with any Transfer. In connection
with any request to Transfer an Interest or portion of an Interest, the
Partnership may require the Limited Partner requesting the Transfer to obtain,
at the Limited Partner's expense, an opinion of counsel selected by the General
Partner as to such matters as the General Partner may reasonably request. If a
Limited Partner Transfers its entire Interest as a Limited Partner, it will not
cease to be a Limited Partner unless and until the transferee is admitted to the
Partnership as a substituted Limited Partner in accordance with this Section
4.4(a). The foregoing will not apply to the automatic withdrawal of the
Organizational Limited Partner pursuant to Section 2.8 of this Agreement.
(b) Each Limited Partner will indemnify and hold harmless the Partnership, the
General Partner, the Adviser, the Directors, each other Limited Partner and any
Affiliate of the Partnership, the General Partner, the Adviser, the Director and
each of the other Limited Partners against all losses, claims, damages,
liabilities, costs and expenses (including legal or other expenses incurred in
investigating or defending against any losses, claims, damages, liabilities,
costs and expenses or any judgments, fines and amounts paid in settlement),
joint or several, to which these Persons may become subject by reason of or
arising from (1) any Transfer made by the Limited Partner in violation of this
Section 4.4 and (2) any misrepresentation by the Transferring Limited Partner or
substituted Limited Partner in connection with the Transfer. A Limited Partner
Transferring an Interest may be charged reasonable expenses, including
attorneys' and accountants' fees, incurred by the Partnership in connection with
the Transfer.
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4.5. REPURCHASE OF INTERESTS
(a) Except as otherwise provided in this Agreement, no Partner or other Person
holding an Interest or portion of an Interest will have the right to withdraw or
tender an Interest or portion of an Interest to the Partnership for repurchase.
The Directors may, from time to time, in their complete and exclusive discretion
and on terms and conditions as they may determine, cause the Partnership to
repurchase Interests or portions of Interests in accordance with written
tenders. The Partnership will not offer, however, to repurchase Interests or
portions of Interests on more than four occasions during any one Fiscal Year
unless it has been advised by legal counsel to the Partnership to the effect
that more frequent offers would not cause any adverse tax consequences to the
Partnership or the Partners. In determining whether to cause the Partnership to
repurchase Interests or portions of Interests, pursuant to written tenders, the
Directors will consider the following factors, among others:
(1) whether any Partners have requested to tender Interests or portions of
Interests;
(2) the liquidity of the Partnership's assets (including fees and costs
associated with withdrawing from Investment Funds and/or disposing of
assets managed by Subadvisers);
(3) the investment plans and working capital and reserve requirements of
the Partnership;
(4) the relative economies of scale with respect to the size of the
Partnership;
(5) the history of the Partnership in repurchasing Interests or portions
of Interests;
(6) the availability of information as to the value of the Partnership's
interests in the Investment Fund;
(7) existing conditions of the securities markets and the economy
generally, as well as political, national or international
developments or current affairs;
(8) the anticipated tax consequences to the Partnership of any proposed
repurchases of Interests or portions of Interests; and
(9) the recommendations of the General Partner and/or the Adviser.
The Directors will cause the Partnership to repurchase Interests or portions of
Interests in accordance with written tenders only on terms fair to the
Partnership and to all Partners and Persons holding Interests or portions of
Interests acquired from Partners.
(b) Except as provided in Section 4.5(c) of this Agreement, a General Partner
may tender its Interest or portion of an Interest under Section 4.5(a) of this
Agreement only if and to the extent that (1) the repurchase would not cause the
value of the Capital Account of the General Partner to be less than the value
required to be maintained under Section 5.1(c) of this Agreement or (2) in the
view of legal counsel to the Partnership, the repurchase would not jeopardize
the classification of the Partnership as a partnership for U.S. Federal income
tax purposes.
(c) If a General Partner ceases to serve in that capacity under Section 4.1 of
this Agreement (other than pursuant to Section 4.1(d)) and the business of the
Partnership is continued in accordance with Section 6.1(a)(2)(B) of this
Agreement, the former General Partner (or its trustee or other legal
representative) may, by written notice to the Directors within 60 days of the
action resulting in the continuation of the Partnership under Section
6.1(a)(2)(B), tender to the Partnership all or any portion of its Interest.
Within 30 days after the receipt of notice, the Directors will cause the
Interest or portion of an Interest to be repurchased by the Partnership for cash
in an amount equal to the balance of the former General Partner's Capital
Account or applicable portion of the Capital Account. If the former General
Partner does not tender to the Partnership all of its Interest as permitted by
this Section 4.5(c), the Interest will automatically convert to and will be
treated in all respects as the Interest of a Limited Partner. If the General
Partner ceases to serve in this capacity under Section 4.1 of this Agreement
(other than pursuant to Section 4.1(d)) and the Partnership is not continued
under Section 6.1(a)(2)(B) of this Agreement, the liquidation and distribution
provisions of Article VI of this Agreement will apply to the General Partner's
Interest.
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(d) The General Partner may cause the Partnership to repurchase an Interest or
portion of an Interest of a Limited Partner or any Person acquiring an Interest
from or through a Limited Partner, on terms fair to the Partnership and to the
Limited Partner or Person acquiring an Interest from or though such Limited
Partner, in the event that the General Partner, in its sole discretion,
determines or has reason to believe that:
(1) the Interest or portion of an Interest has been Transferred in
violation of Section 4.4 of this Agreement, or the Interest or portion
of an Interest has vested in any Person other than by operation of law
as the result of the death, dissolution, bankruptcy, insolvency or
adjudicated incompetence of the Limited Partner;
(2) ownership of the Interest or portion of an Interest by a Partner or
other Person is likely to (A) cause the Partnership to be in violation
of, or (B) (x) require registration of any Interest or portion of any
Interest under, or (y) subject the Partnership to additional
registration or regulation under, the securities, commodities or other
laws of the United States or any other relevant jurisdiction;
(3) continued ownership of the Interest or portion of an Interest may be
harmful or injurious to the business or reputation of the Partnership,
the Directors, the General Partner or the Adviser or any of their
Affiliates, or may subject the Partnership or any of the Partners to
an undue risk of adverse tax or other fiscal or regulatory
consequences;
(4) any of the representations and warranties made by a Partner or other
Person in connection with the acquisition of the Interest or portion
of an Interest was not true when made or has ceased to be true;
(5) with respect to a Limited Partner subject to special regulatory or
compliance requirements, such as those imposed by ERISA, the Bank
Holding Company Act or certain Federal Communication Commission
regulations (collectively, "Special Laws or Regulations"), such
Limited Partner will likely be subject to additional regulatory or
compliance requirements under these Special Laws or Regulations by
virtue of continuing to hold an Interest or portion of an Interest; or
(6) it would be in the best interests of the Partnership, as determined by
the General Partner or the Directors, for the Partnership to
repurchase the Interest or portion of an Interest.
(e) Repurchases of Interests or portions of Interests by the Partnership will
be payable promptly after the date of each repurchase or, in the case of an
offer by the Partnership to repurchase Interests or portions of Interests,
promptly after the expiration date of the repurchase offer in accordance with
the terms of the repurchase offer. Payment of the purchase price for an Interest
or portion of an Interest will consist of: (1) cash or a promissory note, which
will be non-transferable and need not bear interest, in an amount equal to the
percentage, as may be determined by the Directors, of the estimated unaudited
net asset value of the Interest or portion of an Interest repurchased by the
Partnership determined as of the date of the repurchase (the "Initial Payment");
and (2) if determined to be appropriate by the Directors or if the Initial
Payment is less than 100% of the estimated unaudited net asset value, a
promissory note, which may or may not be incorporated into the note applicable
to the Initial Payment, entitling its holder to a contingent payment (the
"Post-Audit Payment") equal to the excess, if any, of (A) the net asset value of
the Interest or portion of an Interest repurchased by the Partnership as of the
date of the repurchase, determined based on the audited financial statements of
the Partnership for the Fiscal Year in which the repurchase was effective, over
(B) the Initial Payment. Any obligation under such a promissory note with
respect to the Initial Payment will be due and payable not more than 30 days
after the date of repurchase or, if the Partnership has requested withdrawal of
its capital from any Investment Funds in funding the repurchase of Interests,
ten Business Days after the Partnership has received at least 90% of the
aggregate amount withdrawn by the Partnership from the Investment Funds. Any
obligation under such a promissory note with respect to the Post-Audit Payment
will be due and payable promptly following the preparation of the applicable
audited financial statements. Notwithstanding anything to the contrary in this
Section 4.5(e), the Directors, in their discretion, may cause the Partnership to
pay all or any portion of the repurchase price in Securities in kind (or any
combination of Securities in kind and cash) having a value, determined as of the
date of repurchase, equal to the amount to be repurchased. All repurchases of
Interests or portions of Interest will be subject to any and all conditions as
the Directors may impose
21
in their sole discretion. The General Partner may, in its discretion, cause the
Partnership to repurchase a Limited Partner's entire Interest, if the Limited
Partner's Capital Account balance in the Partnership, as a result of repurchase
or Transfer requests by the Limited Partner, is less than $250,000 or such other
minimum amount established by the General Partner from time to time in its sole
discretion. Subject to the procedures of this Section 4.5(e), the amount due to
any Partner whose Interest or portion of an Interest is repurchased will be
equal to the value of the Partner's Capital Account or portion of such Capital
Account, as of the effective date of repurchase, after giving effect to all
allocations to be made to the Partner's Capital Account as of that date. If a
Limited Partner's entire Interest is repurchased, that Limited Partner will
cease to be a Limited Partner.
ARTICLE V
CAPITAL
5.1. CONTRIBUTIONS TO CAPITAL
(a) The minimum initial Capital Contribution of each Limited Partner (other
than the Organizational Limited Partner) will be $250,000 or such other amount
as the General Partner determines from time to time. The amount of the initial
Capital Contribution of each Partner will be recorded by the Partnership upon
acceptance as a contribution to the capital of the Partnership. Each Limited
Partner's entire initial Capital Contribution will be paid to the Partnership
immediately prior to the Partnership's acceptance of the Limited Partner's
subscription for Interests, unless otherwise agreed by the Partnership and such
Limited Partner.
(b) The Limited Partners may make additional Capital Contributions effective as
of those times and in amounts as the General Partner may permit, but no Limited
Partner will be obligated to make any additional Capital Contribution except to
the extent provided in Sections 5.5 and 5.7 of this Agreement. Each additional
Capital Contribution made by a Limited Partner (other than a contribution made
pursuant to Section 5.5 or Section 5.7 of this Agreement) will be in the minimum
amount of $100,000 or such other amount as the General Partner determines from
time to time.
(c) A General Partner may make additional Capital Contributions effective as of
those times and in such amounts as it determines, and will be required to make
additional Capital Contributions from time to time to the extent necessary to
maintain the balance of its Capital Account at an amount, if any, necessary to
ensure that the Partnership will be treated as a partnership for U.S. Federal
income tax purposes. Except as provided in this Section 5.1 or in the Delaware
Act, no General Partner will be required or obligated to make any additional
contributions to the capital of the Partnership.
(d) Subject to the provisions of the 1940 Act, and except as otherwise
permitted by the General Partner, (1) initial and any additional Capital
Contributions by any Partner will be payable in cash or in Securities that the
General Partner, in its absolute discretion, causes the Partnership to accept,
and (2) initial and any additional Capital Contributions in cash will be payable
in readily available funds at the date of the proposed acceptance of the
contribution. The Partnership will charge each Partner making a Capital
Contribution in Securities to the capital of the Partnership an amount as may be
determined by the General Partner to reimburse the Partnership for any costs
incurred by the Partnership by reason of accepting the Securities, and any
charge will be due and payable by the contributing Partner in full at the time
the Capital Contribution to which the charges relate is due. The value of
contributed Securities will be determined in accordance with Section 7.3 of this
Agreement as of the date of contribution.
(e) An Adviser may make Capital Contributions and own Interests in the
Partnership and, in so doing, will become a Limited Partner with respect to the
contributions.
(f) The minimum initial and additional contributions set out in paragraphs (a)
and (b) of this Section 5.1 may be increased or reduced by the General Partner
from time to time. Reductions may be applied to all investors, individual
investors or to classes of investors, in each case in the sole discretion of the
General Partner.
22
5.2. RIGHTS OF PARTNERS TO CAPITAL
No Partner will be entitled to interest on the Partner's Capital
Contribution, nor will any Partner be entitled to the return of any capital of
the Partnership except (a) upon the repurchase by the Partnership of all or a
portion of the Partner's Interest in accordance with Section 4.5 of this
Agreement, (b) in accordance with the provisions of Section 5.7(b) of this
Agreement or (c) upon the liquidation of the Partnership's assets in accordance
with Section 6.2 of this Agreement. Except as specified in the Delaware Act, or
with respect to distributions or similar disbursements made in error, no Partner
will be liable for the return of any such amounts. To the fullest extent
permitted by applicable law, no Partner will have the right to require partition
of the Partnership's property or to compel any sale or appraisal of the
Partnership's assets.
5.3. CAPITAL ACCOUNTS
(a) The Partnership will maintain a separate Capital Account for each Partner.
(b) Each Partner's Capital Account will have an initial balance equal to the
amount of cash and the value of any Securities (determined in accordance with
Section 7.3 of this Agreement) constituting the Partner's initial Capital
Contribution.
(c) Each Partner's Capital Account will be increased by the sum of (1) the
amount of cash and the value of any Securities (determined in accordance with
Section 7.3 of this Agreement) constituting additional Capital Contributions by
the Partner permitted under Section 5.1 of this Agreement, plus (2) any amount
credited to the Partner's Capital Account under Sections 5.4 through 5.7 of this
Agreement, plus (3) any Rebate Amount credited to a Partner's Capital Account.
(d) Each Partner's Capital Account will be reduced by the sum of (1) the amount
of any repurchase of the Interest or portion of the Interest of the Partner or
distributions to the Partner under Section 4.5, 5.11 or 6.2 of this Agreement
that are not reinvested, plus (2) any amounts debited against the Partner's
Capital Account under Sections 5.4 through 5.7 of this Agreement.
(e) In the event all or a portion of the Interest of a Partner is Transferred
in accordance with the terms of this Agreement, the transferee will succeed to
the Capital Account of the transferor to the extent of the Transferred Interest
or portion of an Interest.
(f) Subject to Section 5.7(b) of this Agreement, no Partner will be required to
pay to the Partnership or any other Partner any deficit in such Partner's
Capital Account upon dissolution of the Partnership or otherwise.
5.4. ALLOCATION OF NET PROFIT AND LOSS
Subject to Section 5.8 of this Agreement, as of the last day of each Fiscal
Period, any Net Profit or Net Loss for the Fiscal Period will be allocated among
and credited to or debited against the Capital Accounts of the Partners in
accordance with their respective Investment Percentages for the Fiscal Period.
5.5. ALLOCATION OF CERTAIN WITHHOLDING TAXES AND OTHER EXPENDITURES
(a) If the Partnership incurs a withholding tax or other tax obligation with
respect to the share of Partnership income allocable to any Partner, then the
General Partner, without limitation of any other rights of the Partnership or
the General Partner, will cause the amount of the obligation to be debited
against the Capital Account of the Partner when the Partnership pays the
obligation, and any amounts then or in the future distributable to the Partner
will be reduced by the amount of the taxes. If the amount of the taxes is
greater than any distributable amounts, then the Partner and any successor to
the Partner's Interest or portion of an Interest will pay to the Partnership as
a Capital Contribution, upon demand by the General Partner, the amount of the
excess. A General Partner will not be obligated to apply for or obtain a
reduction of or exemption from withholding tax on behalf of any Partner that may
be eligible for the reduction or exemption, except that, in the event that the
General Partner determines that a Partner
23
is eligible for a refund of any withholding tax, the General Partner may, at the
request and expense of the Partner, assist the Partner in applying for such
refund.
(b) Except as otherwise provided for in this Agreement and unless prohibited by
the 1940 Act, any expenditures payable by the Partnership, to the extent
determined by the General Partner to have been paid or withheld on behalf of, or
by reason of particular circumstances applicable to, one or more but fewer than
all of the Partners, will be charged to only those Partners on whose behalf the
payments are made or whose particular circumstances gave rise to such payments.
The charges will be debited from the Capital Accounts of the Partners as of the
close of the Incentive Period during which the items were paid or accrued by the
Partnership.
5.6. PERFORMANCE INCENTIVE AND INCENTIVE CAP
(a) So long as the General Partner continues to serve in that capacity, and for
each Limited Partner for which the Partnership Return earned by the Limited
Partner for the applicable Incentive Period exceeds the greater of (1) the
Hurdle Rate for that Incentive Period or (2) the Loss Carryforward Amount, if
any, the Performance Incentive will be debited against the Capital Account of
that Limited Partner as of the last day of that Incentive Period, and the amount
so debited will be credited simultaneously to the Capital Account of the General
Partner, or, subject to compliance with the 1940 Act and the Advisers Act, to
the Capital Accounts of the Partners as have been designated in any written
notice delivered by the General Partner to the Partnership within 90 days after
the close of the Incentive Period. Aggregate Performance Incentives as to each
Limited Partner for each Incentive Period, when calculated as an annualized
percentage of the Limited Partner's average Capital Account balance for such
Incentive Period, will not exceed any maximum rate determined from time to time
by the Directors and approved in the manner contemplated by the 1940 Act; such
maximum rate initially to be 1.75% (the "Incentive Cap").
(b) Within 30 days after the close of each Incentive Period with respect to
each Limited Partner, the General Partner may withdraw up to 100% of the
Performance Incentive (computed on the basis of unaudited data) that was
credited to the Capital Account of the General Partner, and debited from the
Limited Partner's Capital Account with respect to the Incentive Period. The
Partnership will pay the General Partner the undrawn balance, if any, of the
Performance Incentive (subject to audit adjustments) within 30 days after the
completion of the audit of the Partnership's accounts pursuant to Section 7.1 of
this Agreement.
(c) The General Partner may rebate all or a portion of the Performance
Incentive to certain employees of the Adviser that qualify as "knowledgeable
employees" under Rule 3c-5 under the 1940 Act.
5.7. RESERVES
(a) The General Partner may cause appropriate reserves to be created, accrued
and charged by the Partnership against Net Assets and proportionately against
the Capital Accounts of the Partners for contingent liabilities, if any, as of
the date any contingent liability becomes known to the General Partner, the
reserves to be in the amounts that the General Partner in its sole discretion
deems necessary or appropriate. The General Partner may increase or reduce any
reserves from time to time by amounts as it in its sole discretion deems
necessary or appropriate. The amount of any reserve, or any increase or decrease
in a reserve, will be proportionately charged or credited to the Capital
Accounts of those Persons who or that are Partners at the time the reserve is
created, or increased or decreased, except that if any individual reserve item,
adjusted by any increase in the item, exceeds the lesser of $500,000 or 1% of
the aggregate value of the Capital Accounts of all of those Partners, then the
amount of the reserve, increase or decrease may instead, at the discretion of
the General Partner, be charged or credited to those Persons who or that were
Partners at the time, as determined by the General Partner in its sole
discretion, of the act or omission giving rise to the contingent liability for
which the reserve was established, increased or decreased in proportion to their
Capital Accounts.
(b) If any amount is required by Section 5.7(a) of this Agreement to be charged
or credited to a Person who or that is no longer a Partner, the amount will be
paid by or to the party, in cash, with interest from the date on which the
General Partner determines that the charge or credit is required. In the case of
a charge, the former Partner will be obligated to pay as a Capital Contribution
the amount of the charge, plus interest as provided in this Section 5.7(b), to
the Partnership on demand, except that (1) in no event will a former Partner be
obligated to make a payment exceeding the amount of the Partner's Capital
Account at the time to which the charge relates and (2) no
24
demand will be made after the expiration of three years from the date on which
the Person ceased to be a Partner. To the extent that a former Partner fails to
pay to the Partnership, in full, any amount required to be charged to the former
Partner under Section 5.7(a) of this Agreement, the deficiency will be charged
proportionately to the Capital Accounts of the Partners at the time of the act
or omission giving rise to the charge to the extent feasible, and otherwise
proportionately to the Capital Accounts of the current Partners.
5.8. ALLOCATION TO AVOID CAPITAL ACCOUNT DEFICITS
To the extent that any debits under Sections 5.4 through 5.7 of this
Agreement would reduce the balance of the Capital Account of any Limited Partner
below zero, that portion of any such debits will be allocated instead to the
Capital Account of the General Partner. Any credits in any subsequent Incentive
Period that otherwise would be allocable under Sections 5.4 through 5.7 of this
Agreement to the Capital Account of any Limited Partner previously affected by
the application of this Section 5.8 will instead be allocated to the Capital
Account of the General Partner in amounts necessary to offset all previous
debits attributable to the Limited Partner, made in accordance with this Section
5.8, that have not been recovered.
5.9. ALLOCATIONS PRIOR TO CLOSING DATE
Any net cash profits or any net cash losses realized by the Partnership
from the purchase or sale of Securities during the period ending on the day
prior to the Closing Date will be allocated to the Capital Account of the
General Partner. No unrealized item of profit or loss will be allocated under
this Section 5.9 to the Capital Account of any Partner.
5.10. TAX ALLOCATIONS
For ach taxable year of the Partnership, items of income, deduction, gain,
loss or credit will be allocated for income tax purposes among the Partners in a
manner so as to reflect equitably amounts credited or debited to each Partner's
Capital Account for the current and prior taxable years (or relevant portions of
those years). Allocations under this Section 5.10 will be made in accordance
with the principles of Sections 704(b) and 704(c) of the Code, and in conformity
with Treasury Regulations promulgated under these Sections, or the successor
provisions to such Sections and Regulations. Notwithstanding anything to the
contrary in this Agreement, the Partnership will allocate to the Partners those
gains or income necessary to satisfy the "qualified income offset" requirement
of Treasury Regulations Section 1.704-1(b)(2)(ii)(d). If the Partnership
realizes net capital gains for U.S. Federal income tax purposes for any taxable
year during or as of the end of which one or more Positive Basis Partners (as
defined in this Section 5.10) withdraw from the Partnership under Article IV or
VI of this Agreement, the General Partner may elect to allocate net gains as
follows: (a) to allocate net gains among Positive Basis Partners, in proportion
to the Positive Basis (as defined in this Section 5.10) of each Positive Basis
Partner, until either the full amount of the net gains has been so allocated or
the Positive Basis of each Positive Basis Partner has been eliminated, and (b)
to allocate any net gains not so allocated to Positive Basis Partners to the
other Partners in a manner that reflects equitably the amounts credited to the
Partners' Capital Accounts. If the Partnership realizes capital losses for U.S.
federal income tax purposes for any fiscal year during or as of the end of which
one or more Negative Basis Partners (as defined in this Section 5.10) withdraw
from the Partnership under Article IV or VI of this Agreement, the General
Partner may elect to allocate net losses as follows: (i) to allocate net losses
among Negative Basis Partners, in proportion to the Negative Basis (as defined
in this Section 5.10) of each Negative Basis Partner, until either the full
amount of net losses will have been so allocated or the Negative Basis of each
Negative Basis Partner has been eliminated, and (ii) to allocate any net losses
not so allocated to Negative Basis Partners, to the other Partners in a manner
that reflects equitably the amounts credited to the Partners' Capital Accounts.
As used in this Section 5.10, the term "Positive Basis" means, with respect to
any Partner and as of any time of calculation, the amount by which the total of
the Partners' Capital Accounts as of that time exceeds the Partner's "adjusted
tax basis," for U.S. Federal income tax purposes, in the Partner's Interest in
the Partnership as of that time (determined without regard to any adjustments
made to the "adjusted tax basis" by reason of any Transfer or assignment of the
Interest, including by reason of death). As used in this Section 5.10, the term
"Positive Basis Partner" means any Partner who or that withdraws from the
Partnership and who or that has a Positive Basis as of the effective date of the
Partner's withdrawal. As used in this Section 5.10, the term "Negative Basis"
means, with respect to any Partner and as of any time of calculation, the amount
by which the Partner's "adjusted tax basis," for U.S. federal income tax
purposes, in the Partner's Interest in the Partnership as of that time
(determined without
25
regard to any adjustments made to the "adjusted tax basis" by reason of any
Transfer or assignment of the Interest, including by reason of death, and
without regard to such Partner's share of the liabilities of the Partnership
under section 752 of the Code) exceeds the Partner's Capital Account as of such
time. As used in this Section 5.10, the term "Negative Basis Partner" means any
Partner who or that withdraws from the Partnership and who or that has a
Negative Basis as of the effective date of the Partner's withdrawal.
5.11. DISTRIBUTIONS
(a) The General Partner may cause the Partnership to make distributions in cash
or in kind at any time to all of the Partners on a proportionate basis in
accordance with the Partners' Investment Percentages.
(b) The General Partner may withhold taxes from any distribution to any Partner
to the extent required by the Code or any other applicable law. For purposes of
this Agreement, any taxes so withheld by the Partnership with respect to any
amount distributed by the Partnership to any Partner will be deemed to be a
distribution or payment to the Partner, reducing the amount otherwise
distributable to the Partner under this Agreement and reducing the Capital
Account of the Partner. Neither the General Partner nor the Directors will be
obligated to apply for or obtain a reduction of or exemption from withholding
tax on behalf of any Partner that may be eligible for reduction or exemption. To
the extent that a Partner claims to be entitled to a reduced rate of, or
exemption from, a withholding tax pursuant to an applicable income tax treaty,
or otherwise, the Partner will furnish the Partnership with any information and
forms that the Partner may be required to complete if necessary to comply with
any and all laws and regulations governing the obligations of withholding tax
agents. Each Partner represents and warrants that any information and forms
furnished by the Partner will be true and accurate and agrees to indemnify the
Partnership and each of the Partners from any and all losses, claims, damages,
liabilities costs and expenses resulting from the filing of inaccurate or
incomplete information or forms relating to the withholding taxes (including
legal or other expenses incurred in investigating or defending against any such
losses, claims, damages, liabilities, costs and expenses).
(c) Notwithstanding any provision to the contrary contained in this Agreement,
the Partnership and the General Partner on behalf of the Partnership will not
repurchase any Interest or portion of an Interest or make a distribution to any
Partner on account of the Partner's Interest or portion of an Interest, if such
repurchase or distribution would violate the Delaware Act or other applicable
law.
ARTICLE VI
DISSOLUTION AND LIQUIDATION
6.1. DISSOLUTION
(a) The Partnership will be dissolved if at any time it has no Limited Partners
or upon the occurrence of any of the following events:
(1) upon the affirmative vote to dissolve the Partnership by both (A) a
majority of the Directors (including the vote of a majority of the
Independent Directors) and (B) Partners holding at least two-thirds of
the total number of votes eligible to be cast by all Partners;
(2) upon either of: (A) an election by the General Partner to dissolve the
Partnership or (B) a General Partner's ceasing to be a General Partner
in accordance with Section 4.1 of this Agreement (other than in
conjunction with a Transfer of the Interest of a General Partner in
accordance with Section 4.3 of this Agreement to a Person who or that
is admitted as a substituted General Partner under Section 2.6(a) of
this Agreement), unless, as to the event described in clause B of this
Section 6.1(a)(2), (i) the Partnership has at least one other General
Partner who or that is authorized to and does carry on the business of
the Partnership, or (ii) both the Directors and Partners holding not
less than two-thirds of the total number of votes eligible to be cast
by all Partners elect within 60 days after the event to continue the
business of the Partnership and a Person to be admitted to the
Partnership, effective as of the date of the event, as an additional
General Partner who has agreed
26
to make the contributions to the capital of the Partnership required
to be made under Section 5.1(c) of this Agreement;
(3) upon the failure of Partners to approve successor Directors at a
meeting called by the General Partner in accordance with Section
2.11(c) of this Agreement when no Director remains to continue the
business of the Partnership;
(4) upon the expiration of any two-year period that commences on the date
on which any Limited Partner has submitted a written notice to the
Partnership requesting to tender the Limited Partner's entire Interest
for repurchase by the Partnership (when the Partner indicates its
intention to dissolve the Partnership in a separate written request to
the Partnership that specifically refers to this Section 6.1(a)(4)),
unless the Limited Partner has been given the opportunity to so tender
pursuant to the procedures described in Section 4.5 of this Agreement
(whether in a single repurchase offer or multiple consecutive offers
within the two-year period); or
(5) as otherwise required by operation of law.
Dissolution of the Partnership will be effective on the later of the day on
which the event giving rise to the dissolution occurs or, to the extent
permitted by the Delaware Act, the conclusion of any applicable 60-day period
during which the Directors and Partners elect to continue the business of the
Partnership as provided in Section 6.1(a)(2), but the Partnership will not
terminate until the assets of the Partnership have been liquidated in accordance
with Section 6.2 of this Agreement and the Certificate has been canceled.
(b) Except as provided in Section 6.1(a) of this Agreement or in the Delaware
Act, the death, adjudicated incompetence, dissolution, termination, liquidation,
bankruptcy, reorganization, merger, sale of substantially all of the stock or
assets of, or other change in the ownership or nature of a Partner, the
admission to the Partnership of a new Partner, the withdrawal of a Partner from
the Partnership, or the Transfer by a Partner of the Partner's Interest or a
portion of the Interest to a third party will not cause the Partnership to
dissolve.
6.2. LIQUIDATION OF ASSETS
(a) Upon the dissolution of the Partnership as provided in Section 6.1 of this
Agreement, the General Partner will promptly liquidate the business and
administrative affairs of the Partnership, except that if the General Partner is
unable to perform this function, a liquidator elected by Partners holding a
majority of the total number of votes eligible to be cast by all Partners and
whose fees and expenses will be paid by the Partnership will promptly liquidate
the business and administrative affairs of the Partnership. Net Profit and Net
Loss during the period of liquidation will be allocated in accordance with
Article V of this Agreement. Subject to the Delaware Act, the proceeds from
liquidation (after establishment of appropriate reserves for all claims and
obligations, including all contingent, conditional or unmatured claims and
obligations in an amount that the General Partner or liquidator deems
appropriate in its sole discretion as applicable) will be distributed in the
following manner:
(1) the debts of the Partnership, other than debts, liabilities or
obligations to Limited Partners, and the expenses of liquidation
(including legal and accounting fees and expenses incurred in
connection with the liquidation), up to and including the date on
which distribution of the Partnership's assets to the Partners has
been completed, will first be paid on a proportionate basis;
(2) any debts, liabilities or obligations owing to the Limited Partners
will be paid next in their order of seniority and on a proportionate
basis; and
(3) the Partners are paid next on a proportionate basis the positive
balances of their Capital Accounts after giving effect to all
allocations to be made to the Partners' Capital Accounts for the
Fiscal Period ending on the date of the distributions under this
Section 6.2(a)(3).
(b) Notwithstanding the provisions of this Section 6.2, upon dissolution of the
Partnership, subject to the Delaware Act and the priorities set out in Section
6.2(a) of this Agreement, the General Partner or liquidator may
27
distribute ratably in kind any assets of the Partnership. If any in-kind
distribution is to be made under this Section 6.2(b), (1) the assets distributed
in kind will be valued in accordance with Section 7.3 of this Agreement as of
the actual date of their distribution and charged as so valued and distributed
against amounts to be paid under Section 6.2(a) of this Agreement, and (2) any
profit or loss attributable to property distributed in kind will be included in
the Net Profit or Net Loss for the Fiscal Period ending on the date of the
distribution. Notwithstanding any provision of this Agreement to the contrary,
the General Partner may compel a Partner to accept a distribution of any asset
in kind from the Partnership even if the percentage of the asset distributed to
the Partner exceeds a percentage of the asset that is equal to the percentage in
which the Partner shares in distributions from the Partnership.
ARTICLE VII
ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS
7.1. ACCOUNTING AND REPORTS
(a) The Partnership will adopt for tax accounting purposes any accounting
method that the General Partner decides in its sole discretion is in the best
interests of the Partnership. The Partnership's accounts will be maintained in
U.S. currency.
(b) After the end of each taxable year of the Partnership, the Partnership will
furnish to Partners information regarding the operation of the Partnership and
the Partners' Interests as is necessary for Partners to complete U.S. Federal
and state income tax or information returns and any other tax information
required by U.S. Federal or state law.
(c) Except as otherwise required by the 1940 Act, or as may otherwise be
permissible under other applicable law, within 60 days after the close of the
period for which a report required under this Section 7.1 is being made, the
Partnership will furnish to each Limited Partner a semiannual report and an
annual report containing the information required by the 1940 Act. The
Partnership will cause financial statements contained in each annual report
furnished under this Section 7.1 to be accompanied by a certificate of
independent public accountants based upon an audit performed in accordance with
generally accepted accounting principles. The Partnership may furnish to each
Partner any other periodic reports the General Partner deems necessary or
appropriate in its discretion.
(d) The General Partner will notify the Directors of any change in the holders
of interests of the General Partner within a reasonable time after the change.
7.2. DETERMINATIONS BY GENERAL PARTNER
(a) All matters concerning the determination and allocation among the Partners
of the amounts to be determined and allocated pursuant to Article V of this
Agreement, including any taxes on those amounts and accounting procedures
applicable with respect to those amounts, will be determined by the General
Partner unless specifically and expressly otherwise provided for by the
provisions of this Agreement or as required by law. Any such determinations and
allocations will be final and binding on all of the Partners.
(b) The General Partner may make any adjustments to the computation of Net
Profit and/or Net Loss, or any components (withholding any items of income,
gain, loss or deduction) constituting Net Profit and/or Net Loss as the General
Partner deems appropriate to reflect fairly and accurately the financial results
of the Partnership and the intended allocation of Net Profit and/or Net Loss
among the Partners.
7.3. VALUATION OF ASSETS
(a) Except as may be required by the 1940 Act, the Directors will value or
cause to have valued any Securities or other assets and liabilities of the
Partnership as of the close of business on the last day of each Fiscal Period in
accordance with valuation procedures as established from time to time by the
Directors. Assets of the Partnership that are invested in an Investment Fund
managed by a Subadviser will be valued in accordance with the terms and
conditions of the agreement or other document governing the operation of the
Investment Fund. Assets of the
28
Partnership invested in an Investment Fund not managed by a Subadviser will be
valued at fair value, which ordinarily will be the net redemption value
determined by the Investment Fund's Investment Manager in accordance with the
policies established by the Investment Manager. In determining the value of the
assets of the Partnership, no value will be placed on the goodwill or name of
the Partnership, or the office records, files, statistical data or any similar
intangible assets of the Partnership not normally reflected in the Partnership's
accounting records. Any items of income earned but not received, expenses
incurred but not yet paid, liabilities fixed or contingent, and any other
prepaid expenses to the extent not otherwise reflected in the books of account,
and the value of options or commitments to purchase or sell Securities or
commodities pursuant to agreements entered into prior to the valuation date
will, however, be taken into account in determining the value of the
Partnership's assets.
(b) Subject to the provisions of the 1940 Act, the value of Securities and
other assets of the Partnership and the net asset value of the Partnership as a
whole determined pursuant to this Section 7.3 will be conclusive and binding on
all of the Partners and all Persons claiming through or under them.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1. AMENDMENT OF PARTNERSHIP AGREEMENT
(a) Except as otherwise provided in this Section 8.1, this Agreement may be
amended, in whole or in part, with the approval of a majority of the Directors
(including the vote of a majority of the Independent Directors, but only if such
vote is required by the 1940 Act), except that any amendment also must be
approved by a majority (as defined in the ▇▇▇▇ ▇▇▇) of the outstanding voting
securities of the Partnership if such vote is required by the ▇▇▇▇ ▇▇▇.
(b) Any amendment that would:
(1) increase the obligation of a Partner to make any Capital Contribution;
(2) reduce the Capital Account of a Partner other than in accordance with
Article V of this Agreement; or
(3) modify the events causing the dissolution of the Partnership,
may be made only if (A) the written consent of each Partner adversely affected
by the proposed action is obtained prior to the effectiveness of the action or
(B) the amendment does not become effective until (i) each Limited Partner has
received written notice of the amendment and (ii) any Limited Partner objecting
to the amendment has been afforded a reasonable opportunity (under procedures
prescribed by the General Partner in its sole discretion) to tender the
Partner's entire Interest for repurchase by the Partnership. Notwithstanding the
preceding sentence or the provisions of Subsection 8.1(c), any amendment that
would alter the provisions of Section 5.6 of this Agreement relating to the
General Partner's Performance Incentive, the provisions of this Section 8.1
relating to the material amendment of this Agreement, or the provisions of
Section 3.10 of this Agreement relating to indemnification may be made only with
the unanimous consent of the Partners and, to the extent required by the 1940
Act, approval of a majority of the Directors (and, if so required, a majority of
the Independent Directors).
(c) Notwithstanding the provisions of Sections 8.1(a) and 8.1(b) of this
Agreement, the General Partner, at any time without the consent of any other
Partner, may:
(1) restate this Agreement, together with any amendments to this Agreement
that have been duly adopted in accordance with the provisions of this
Agreement to incorporate the amendments in a single, integrated
document;
(2) amend this Agreement (other than with respect to the matters described
in Section 8.1(b) of this Agreement) to change the name of the
Partnership in accordance with Section 2.2 hereof or to effect
compliance with any applicable law or regulation, including, but not
limited to, to satisfy
29
the requirements of applicable U.S. banking law or regulation, or to
cure any ambiguity or to correct or supplement any provision of this
Agreement that may be inconsistent with any other provision of this
Agreement, so long as the action does not adversely affect the rights
of any Partner in any material respect; and
(3) amend this Agreement to make any changes necessary or desirable, based
on advice of legal counsel to the Partnership, to assure the
Partnership's continuing eligibility to be classified for U.S. Federal
income tax purposes as a partnership that is not treated as a
corporation for tax purposes under the Code; subject, however, to the
limitation that any material amendment to this Agreement under Section
8.1(c)(2) or (3) of this Agreement will be valid only if approved by a
majority of the Directors (including the vote of a majority of the
Independent Directors, if required by the 1940 Act).
(d) The General Partner will give prior written notice of any proposed
amendment to this Agreement (other than any amendment of the type contemplated
by Section 8.1(c)(1) of this Agreement) to each Partner, which notice sets out
(1) the text of the proposed amendment or (2) a summary of the amendment and a
statement that the text of the amendment will be furnished to any Partner upon
request.
8.2. SPECIAL POWER OF ATTORNEY
(a) Each Partner irrevocably makes, constitutes and appoints the General
Partner and each of the Directors, acting severally, and any liquidator of the
Partnership's assets appointed pursuant to Section 6.2 of this Agreement with
full power of substitution, the true and lawful representatives and
attorneys-in-fact of, and in the name, place and stead of, the Partner, with the
power from time to time to make, execute, sign, acknowledge, swear to, verify,
deliver, record, file and/or publish:
(1) any amendment to this Agreement;
(2) any amendment to the Certificate, including, without limitation, any
such amendment required to reflect any amendments to this Agreement,
and including, without limitation, an amendment to effectuate any
change in the membership of the Partnership; and
(3) all other such instruments, documents and certificates that, in the
view of legal counsel to the Partnership, from time to time may be
required by the laws of the United States of America, the State of
Delaware or any other jurisdiction in which the General Partner
determines that the Partnership should do business, or any political
subdivision or agency of any such jurisdiction, or that legal counsel
may deem necessary or appropriate to effectuate, implement and
continue the valid existence and business of the Partnership as a
limited partnership under the Delaware Act.
(b) Each Partner is aware that the terms of this Agreement permit certain
amendments to this Agreement to be effected and certain other actions to be
taken or omitted by or with respect to the Partnership without the Partner's
consent. Each Partner agrees that if an amendment to the Certificate or this
Agreement or any action by or with respect to the Partnership is taken in the
manner contemplated by this Agreement, notwithstanding any objection that the
Partner may assert with respect to the action, the attorneys-in-fact appointed
under this Agreement are authorized and empowered, with full power of
substitution, to exercise the authority granted in this Section 8.2 in any
manner that may be necessary or appropriate to permit the amendment to be made
or action lawfully taken or omitted. Each Partner is fully aware that each
Partner will rely on the effectiveness of this special power of attorney with a
view to the orderly administration of the affairs of the Partnership.
(c) The power of attorney contemplated by this Section 8.2 is a special power
of attorney and is coupled with an interest in favor of the General Partner and
each of the Directors, acting severally, and any liquidator of the Partnership's
assets appointed under Section 6.2 of this Agreement, and as such the power of
attorney:
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(1) will be irrevocable and continue in full force and effect
notwithstanding the subsequent death or incapacity of any Person
granting the power of attorney, regardless of whether the Partnership,
the General Partner, the Directors or any liquidator has had notice of
the death or incapacity; and
(2) will survive the delivery of a Transfer by a Partner of the whole or
any portion of the Partner's Interest, except that, when the
transferee of an Interest or portion of an Interest has been approved
by the General Partner for admission to the Partnership as a
substituted Partner, the power of attorney given by the transferor
will survive the delivery of the assignment for the sole purpose of
enabling the General Partner, the Directors or any liquidator to
execute, acknowledge and file any instrument necessary to effect the
substitution.
8.3. NOTICES
Notices that may or are required to be provided under this Agreement will
be made to a Partner by hand delivery, regular mail (registered or certified
mail return receipt requested in the case of notice to the General Partner),
commercial courier service, telecopier, or electronic mail (with a confirmation
copy by registered or certified mail in the case of notices to the General
Partner by telecopier or electronic mail), and will be addressed to the Partner
at his, her or its address as set out in the books and records of the
Partnership (or to any other address as may be designated by any Partner by
notice addressed to the General Partner in the case of notice given to any
Partner, and to each of the Partners in the case of notice given to the General
Partner). Notices will be deemed to have been provided when delivered by hand,
on the date indicated as the date of receipt on a return receipt or when
received if sent by regular mail, commercial courier service, telecopier or by
electronic mail. A document that is not a notice and that is required to be
provided under this Agreement by any party to another party may be delivered by
any reasonable means.
8.4. AGREEMENT BINDING UPON SUCCESSORS AND ASSIGNS
This Agreement will be binding upon and inure to the benefit of the
Partners and their respective heirs, successors, assigns, executors, trustees or
other legal representatives, but the rights and obligations of the Partners may
not be Transferred or delegated except as provided in this Agreement, and any
attempted Transfer or delegation of those rights and obligations that is not
made in accordance with the terms of this Agreement will be void.
8.5. CHOICE OF LAW; ARBITRATION
(a) Notwithstanding the location at which this Agreement is executed by any of
the Partners, the Partners expressly agree that all the terms and provisions of
this Agreement are governed by and will be construed under the laws of the State
of Delaware, including the Delaware Act, without regard to the conflict of law
principles of the State of Delaware.
(b) To the extent such action is consistent with the provisions of the 1940 Act
and any other applicable law, except as provided in Section 8.10(b) of this
Agreement, each Partner agrees to submit all controversies arising between or
among Partners or one or more Partners and the Partnership in connection with
the Partnership or its businesses or concerning any transaction, dispute or the
construction, performance or breach of this Agreement or any other agreement
relating to the Partnership, whether entered into prior to, on or subsequent to
the date of this Agreement, to arbitration in accordance with the provisions set
out in this Section 8.5. EACH PARTNER UNDERSTANDS THAT ARBITRATION IS FINAL AND
BINDING ON THE PARTNERS AND THAT THE PARTNERS IN EXECUTING THIS AGREEMENT ARE
WAIVING THEIR RIGHTS TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT TO JURY
TRIAL.
(c) Controversies will be finally settled by, and only by, arbitration in
accordance with the commercial arbitration rules of the American Arbitration
Association (the "AAA") to the fullest extent permitted by law. The place of
arbitration will be New York, New York. Any arbitration under this Section 8.5
will be conducted before a panel of three arbitrators. The Partner or Partners
initiating arbitration under this Section 8.5 will appoint one arbitrator in the
demand for arbitration. The Partner or Partners against whom or which
arbitration is sought will jointly appoint one arbitrator within 30 Business
Days after notice from the AAA of the filing of the demand for
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arbitration. The two arbitrators nominated by the Partners will attempt to agree
on a third arbitrator within 30 Business Days of the appointment of the second
arbitrator. If the two arbitrators fail to agree on the third arbitrator within
the 30-day period, then the AAA will appoint the third arbitrator within 30
Business Days following the expiration of the 30-day period. Any award rendered
by the arbitrators will be final and binding on the Partners, and judgment upon
the award may be entered in the supreme court of the state of New York and/or
the U.S. District Court for the Southern District of New York, or any other
court having jurisdiction over the award or having jurisdiction over the
Partners or their assets. The arbitration agreement contained in this Section
8.5 will not be construed to deprive any court of its jurisdiction to grant
provisional relief (including by injunction or order of attachment) in aid of
arbitration proceedings or enforcement of an award. In the event of arbitration
as provided in this Section 8.5, the arbitrators will be governed by and will
apply the substantive (but not procedural) law of Delaware, to the exclusion of
the principles of the conflicts of law of Delaware. The arbitration will be
conducted in accordance with the procedures set out in the commercial
arbitration rules of the AAA. If those rules are silent with respect to a
particular matter, the procedure will be as agreed by the Partners, or in the
absence of agreement among or between the Partners, as established by the
arbitrators. Notwithstanding any other provision of this Agreement, this Section
8.5(c) will be construed to the maximum extent possible to comply with the laws
of the State of Delaware, including the Uniform Arbitration Act (10 Del. C. (S)
-------
5701 et seq.) (the "Delaware Arbitration Act"). If, nevertheless, it is
-- ---
determined by a court of competent jurisdiction that any provision or wording of
this Section 8.5(c), including any rules of the AAA, are invalid or
unenforceable under the Delaware Arbitration Act or other applicable law, such
invalidity will not invalidate all of this Section 8.5(c). In that case, this
Section 8.5(c) will be construed so as to limit any term or provision so as to
make it valid or enforceable within the requirements of the Delaware Arbitration
Act or other applicable law, and, in the event such term or provision cannot be
so limited, this Section 8.5(c) will be construed to omit such invalid or
unenforceable provision.
8.6. NOT FOR BENEFIT OF CREDITORS
The provisions of this Agreement are intended only for the regulation of
relations among past, existing and future Partners, their assignees and the
Partnership. This Agreement is not intended for the benefit of non-Partner
creditors and, except to the extent provided in Section 3.10 of this Agreement,
no rights are granted to non-Partner creditors under this Agreement.
8.7. CONSENTS
Any and all consents, agreements or approvals provided for or permitted by
this Agreement (including minutes of any meeting) must be in writing and a
signed copy of any such consent, agreement or approval will be filed and kept
with the books of the Partnership.
8.8. MERGER AND CONSOLIDATION
(a) The Partnership may merge or consolidate with or into one or more limited
partnerships formed under the Delaware Act or other business entities under an
agreement of merger or consolidation that has been approved in the manner
contemplated by the Delaware Act.
(b) Notwithstanding anything to the contrary in this Agreement, an agreement of
merger or consolidation approved in accordance with the Delaware Act may, to the
extent permitted by the Delaware Act, (1) effect any amendment to this
Agreement, (2) effect the adoption of a new partnership agreement for the
Partnership if it is the surviving or resulting limited partnership in the
merger or consolidation, or (3) provide that the partnership agreement of any
other constituent partnership to the merger or consolidation (including a
limited partnership formed for the purpose of consummating the merger or
consolidation) will be the partnership agreement of the surviving or resulting
limited partnership.
(c) The Partnership may convert to another Delaware business entity in
accordance with the Delaware Act upon the approval of the Partners representing
a majority (as defined in the ▇▇▇▇ ▇▇▇) of the outstanding voting securities of
the Partnership.
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8.9. PRONOUNS
All pronouns used in this Agreement will be deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identity of the Person
or Persons, firm or entity may require in the context in which they are used.
8.10. CONFIDENTIALITY
(a) A Limited Partner may obtain from the General Partner, upon reasonable
demand for any purpose reasonably related to the Limited Partner's Interest in
the Partnership, information regarding the affairs of the Partnership as is just
and reasonable under the Delaware Act, subject to reasonable standards
(including standards governing the information and documents to be furnished, at
what time and location and at whose expense) established by the General Partner
in its sole discretion.
(b) Each Limited Partner agrees in executing this Agreement that, except as
required by applicable law or any regulatory body, the Limited Partner will not
divulge, furnish or make accessible to any other Person the name or address
(whether business, residence or mailing) of any Limited Partner (collectively,
"Confidential Information") without the prior written consent of the General
Partner, which consent may be withheld in its sole discretion.
(c) Each Partner recognizes that in the event that this Section 8.10 is
breached by any Partner or any of its principals, partners, members, directors,
officers, employees or agents or any of the Partner's Affiliates, including any
of the Affiliate's principals, partners, members, directors, officers, employees
or agents, irreparable injury may result to the non-breaching Partners and the
Partnership. In recognition of that irreparable injury, any non-breaching
Partner may have, in addition to any and all other remedies at law or in equity
to which the non-breaching Partner and the Partnership may be entitled, the
right to obtain equitable relief, including, without limitation, injunctive
relief, to prevent any disclosure of Confidential Information, plus reasonable
attorneys' fees and other litigation expenses incurred in connection with
obtaining the equitable relief. If any non-breaching Partner or the Partnership
("Initiating Non-Breaching Party") determines that any other Partner or any of
that Partner's principals, partners, members, directors, officers, employees or
agents or any of the Partner's Affiliates, including any of the Affiliates'
principals, partners, members, directors, officers, employees or agents, should
be enjoined from or required to take any action to prevent the disclosure of
Confidential Information, each of the other non-breaching Partners agrees to
join the non-breaching Initiating Non-Breaching Party in pursuing injunctive
relief in a court of appropriate jurisdiction.
(d) The General Partner will have the right to keep confidential from the
Limited Partners, for any period of time as the General Partner deems reasonable
in its sole discretion, any information that the General Partner reasonably
believes to be in the nature of trade secrets or other information the
disclosure of which the General Partner in good faith believes is not in the
best interest of the Partnership or could damage the Partnership or its business
or that the Partnership is required by law or by agreement with a third party to
keep confidential.
8.11. CERTIFICATION OF NON-FOREIGN STATUS
Each Limited Partner or transferee of an Interest or a portion of an
Interest from a Limited Partner who or that is admitted to the Partnership in
accordance with this Agreement will certify, upon admission to the Partnership
and at any other time as the General Partner may request, whether the Limited
Partner or transferee is a "United States Person" within the meaning of the Code
on forms to be provided by the Partnership, and will notify the Partnership
within 30 days of any change in the status of the Limited Partner or transferee.
Any Limited Partner or transferee who or that fails to provide certification
when requested to do so by the General Partner may be treated as a non-United
States Person for purposes of U.S. Federal tax withholding.
8.12. SEVERABILITY
Each Partner agrees that the Partner intends that, if any provision of this
Agreement is determined by a court of competent jurisdiction or regulatory
authority with jurisdiction over the Partnership, the General Partner or the
Adviser not to be enforceable in the manner set out in this Agreement, then the
provision should be enforceable to the maximum extent possible under applicable
law. If any provision of this Agreement is held to be invalid or
33
unenforceable, the invalidation or unenforceability will not affect the validity
or enforceability of any other provision of this Agreement (or portion of the
provision).
8.13. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement among the Partners
pertaining to the subject matter of this Agreement and supersedes all prior
agreements and understandings pertaining to that subject matter.
Notwithstanding any other provision of this Agreement, including Section
8.1, each Partner, in executing this Agreement, acknowledges and agrees that the
General Partner, on its own behalf or on behalf of the Partnership, without the
approval of the Limited Partners or any other Person, may enter into a written
agreement or agreements with any other Partner, executed contemporaneously with
the admission of the other Partner to the Partnership, affecting or modifying
the terms of, or establishing rights under, this Agreement or any subscription
agreement. Each Partner agrees that any terms contained in any such other
agreement with another Partner will govern with respect to the other Partner
notwithstanding the provisions of this Agreement or any subscription agreement,
and that the Partner will have no rights in respect of those granted in favor of
such other Partner.
8.14. DISCRETION
To the fullest extent permitted by law, whenever in this Agreement a Person
is permitted or required to make a decision (a) in its "sole discretion" or
"discretion" or under a grant of similar authority or latitude, the Person will
be entitled to consider only those interests and factors as he, she or it
desires, including his, her or its own interests, and, to the fullest extent
permitted by law, will have no duty or obligation to give any consideration to
any interest of or factors affecting the Partnership or the Limited Partners, or
(b) in its "good faith" or under another express standard, then the Person will
act under the express standard and will not be subject to any other or different
standards imposed by this Agreement or any other agreement contemplated by this
Agreement or by relevant provisions of law or in equity or otherwise.
8.15. CONFLICTS
The Partners acknowledge and agree that the General Partner and its
Affiliates may engage in activities in which their respective interests or the
interests of their clients may conflict with the interests of the Partnership or
the Limited Partners, and that the resolution of such conflicts may not always
be resolved by the General Partner or its Affiliates in favor of the Partnership
or the Limited Partners.
8.16. COUNTERPARTS
This Agreement may be executed in several counterparts, all of which
together will constitute one agreement binding on all Partners, notwithstanding
that all the Partners have not signed the same counterpart.
8.17. HEADINGS
The headings in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions of this Agreement or
otherwise affect their construction or effect.
[Remainder of Page Intentionally Left Blank]
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IN EXECUTING THIS AGREEMENT, EACH PARTNER ACKNOWLEDGES HAVING READ THIS
AGREEMENT IN ITS ENTIRETY BEFORE SIGNING, INCLUDING THE PRE-DISPUTE ARBITRATION
CLAUSES SET OUT IN SECTION 8.5 AND THE CONFIDENTIALITY CLAUSES SET OUT IN
SECTION 8.10.
The Partners have executed this Agreement as of the day and year first
above written.
GENERAL PARTNER:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ALTERNATIVE
INVESTMENT PARTNERS LP
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AIP GP LP, as its
General Partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Alternative Investments
Inc., as its General Partner
By: /s/ ▇. ▇▇▇▇▇▇ Coes III
--------------------------------
Name: ▇. ▇▇▇▇▇▇ Coes III
Title: President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AIP FUNDING INC.,
as Organizational Limited Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
LIMITED PARTNERS:
Each Person who or that has signed, or has
had signed on the Person's behalf, a
Limited Partner Signature Page, which will
constitute a counterpart of this
Agreement.
35