Common use of Allocation of Net Capital Appreciation or Net Capital Depreciation Clause in Contracts

Allocation of Net Capital Appreciation or Net Capital Depreciation. (a) At the end of each Accounting Period, the Capital Account of each Partner (including the General Partner) for such Accounting Period shall be adjusted by crediting (in the case of Net Capital Appreciation) or debiting (in the case of Net Capital Depreciation) the Net Capital Appreciation or Net Capital Depreciation, as the case may be, to the Capital Accounts of all the Partners in proportion to their respective Partnership Percentages; provided, however, that any Net Capital Appreciation or Net Capital Depreciation with respect to any Additional CDO Fees received by the Partnership pursuant to Sec. 2.09(c) shall be exclusively credited or debited, as the case may be, to the Capital Account of the Existing Limited Partner. (b) Except as provided in subparagraph (c) of this Sec. 3.06, at the end of each fiscal year of the Partnership (or the effective date as of which any Limited Partner withdraws from the Partnership pursuant to Sec. 6.01 (with respect to such withdrawal) or the effective date of the dissolution of the Partnership if it is dissolved other than at the end of a fiscal year), 25% of the amount by which the Net Capital Appreciation allocated to a Limited Partner’s Capital Account for such fiscal year pursuant to Sec. 3.06(a) exceeds the sum of (i) the Management Fees debited to such Limited Partner’s Capital Amount for such fiscal year plus (ii) the Preferred Amount for such fiscal year shall be reallocated to the Capital Account of the General Partner (the “Incentive Allocation”); provided, however, that the Net Capital Appreciation upon which the calculation of the Incentive Allocation is based shall be reduced to the extent of any unrecovered balance remaining in the Loss Recovery Account (defined below) maintained on the books and records of the Partnership for such Limited Partner. The amount of the unrecovered balance remaining in the Loss Recovery Account at the time of calculating the Incentive Allocation shall be the amount existing immediately prior to its reduction pursuant to the second clause of the second sentence of Sec. 3.06(c). The Incentive Allocation shall not be applied with respect to any revenues allocated to the Existing Limited Partner’s Capital Account that are attributable to Additional CDO Fees received by the Partnership from the Investment Manager. (c) There shall be established on the books of the Partnership for each Limited Partner a memorandum account (the “Loss Recovery Account”), the opening balance of which shall be zero. At the end of each fiscal year or at such other date during a fiscal year as the calculation of an Incentive Allocation for such Partner is required to be made under this Sec. 3.06, the balance in each Limited Partner’s Loss Recovery Account shall be adjusted as follows: first, if there has been, in the aggregate, Net Capital Depreciation (as adjusted pursuant to the last sentence of this paragraph) with respect to such Limited Partner since the immediately preceding date as of which a calculation of an Incentive Allocation was made (or if no calculation has yet been made with respect to such Limited Partner, since his or its admission to the Partnership), an amount equal to such Net Capital Depreciation shall be debited to such Limited Partner’s Loss Recovery Account; and, second, if there has been, in the aggregate, Net Capital Appreciation (as adjusted pursuant to the last sentence of this paragraph) with respect to such Limited Partner since the immediately preceding date as of which a calculation of an Incentive Allocation was made, an amount equal to such Net Capital Appreciation, before any Incentive Allocation to the General Partner, shall be credited to and reduce any unrecovered balance in such Limited Partner’s Loss Recovery Account, but not below zero. Solely for purposes of this paragraph, in determining a Limited Partner’s Loss Recovery Account, Net Capital Appreciation and Net Capital Depreciation for any applicable period shall be calculated by taking into account the amount of the Management Fee debited to such Limited Partner’s Capital Account for such period. In the event that a Limited Partner with an unrecovered balance in his or its Loss Recovery Account withdraws all or a portion of its Capital Account, the unrecovered balance in such Limited Partner’s Loss Recovery Account shall be reduced as of the beginning of the next Accounting Period following the Accounting Period during which such withdrawal occurs by an amount equal to the product obtained by multiplying the balance in such Limited Partner’s Loss Recovery Account by a fraction, the numerator of which is the amount of the withdrawal made by such Limited Partner as of the last day of the prior Accounting Period and the denominator of which is the balance in such Limited Partner’s Capital Account on the last day of the prior Accounting Period (prior to the withdrawal made by the Limited Partner as of the last day of the Accounting Period). Additional Capital Contributions shall not affect any Limited Partner’s Loss Recovery Account. (d) In the event the General Partner determines that, based upon tax or regulatory reasons, or any other reasons as to which the General Partner and any Partner agree, such Partner should not participate in the Net Capital Appreciation or Net Capital Depreciation, if any, attributable to trading in any Security or type of Security or to any other transaction, the General Partner may allocate such Net Capital Appreciation or Net Capital Depreciation only to the Capital Accounts of Partners to whom such reasons do not apply. In addition, if for any of the reasons described above, the General Partner determines that a Partner should have no interest whatsoever in a particular Security, type of Security or transaction, the interests in such Security, type of Security or transaction may be set forth in a separate memorandum account in which only the Partners having an interest in such Security, type of Security or transaction have an interest (any such Partner having such an interest shall be referred to as an “Unrestricted Partner”) and the Net Capital Appreciation and Net Capital Depreciation for each such memorandum account shall be separately calculated. In the event the General Partner makes any such determination with respect to a Partner (a “Restricted Partner”), it shall promptly notify all other Partners in writing of such determination and each such other Partner, whether or not such tax or regulatory reasons are applicable to it, shall have the right, by written notice to the General Partner within 5 Business Days after receipt of such notice from the General Partner, to elect not to participate in such Net Capital Appreciation or Net Capital Depreciation, or interests in such Security, type of Security or transaction, as applicable, with respect to which such Restricted Partner was excluded (e) At the end of each Accounting Period during which a memorandum account created pursuant to Sec. 3.06(d) (each, a “Memorandum Account”) was in existence (or during which an interest in particular Securities was otherwise allocated away from one or more Limited Partners), the Capital Account of each Unrestricted Partner may be debited pro rata in accordance with the Capital Accounts of all Unrestricted Partners at the opening of such Accounting Period in an amount equal to the interest that would have accrued on the amount used to purchase the Securities attributable to the Memorandum Account (the “Purchase Price”) had the Purchase Price earned interest at the rate per annum being paid by the Partnership from time to time during the applicable Accounting Period for borrowed funds, or, if funds have not been borrowed by the Partnership during such Accounting Period, at the interest rate per annum that the General Partner determines would have been paid if funds had been borrowed by the Partnership during such Accounting Period. The amount so debited shall then be credited to the Capital Accounts of all of the Partners pro rata in accordance with their Capital Accounts as of the opening of the Accounting Period.

Allocation of Net Capital Appreciation or Net Capital Depreciation. (a) 1. At the end of each Accounting Fiscal Period, the Capital Account of each a Partner (including the General Partner) for such Accounting Fiscal Period shall be adjusted by crediting (in the case of Net Capital Appreciation) or debiting (in the case of Net Capital Depreciation) the Net Capital Appreciation or Net Capital Depreciation, as the case may be, to the Capital Accounts of all of the Partners (including the General Partner) in proportion to their respective Partnership Percentages; provided, however, that any Net Capital Appreciation or Net Capital Depreciation with respect to any Additional CDO Fees received by . 2. A reallocation of the Partnership amounts allocated pursuant to Sec. 2.09(c) Section 4.1.3.1 shall be exclusively credited or debited, as the case may be, to the Capital Account of the Existing Limited Partner. (b) Except as provided in subparagraph (c) of this Sec. 3.06, occur at the end of each fiscal year Incentive Allocation Period of the Partnership (or the effective date as of which any Limited Partner withdraws from the Partnership pursuant to Sec. 6.01 (with respect to such withdrawal) or the effective date of the dissolution of the Partnership if it is dissolved other than at the end of a fiscal year), 25so that 20% of the amount by which result of (x) the Net Increase (if any) of the Capital Appreciation allocated to Account of a Limited Partner’s Partner during such Incentive Allocation Period, minus (y) the Management Fee debited from such Capital Account for such fiscal year pursuant to Sec. 3.06(aIncentive Allocation Period, minus (z) exceeds the sum of (i) the Management Fees debited to such Limited Partner’s Capital Amount Loss Recovery Account balance for such fiscal year plus (ii) the Preferred Amount for such fiscal year Incentive Allocation Period, shall be reallocated to the Capital Account of the General Partner (the “Incentive Allocation”); provided. The General Partner, howeverin its discretion, that the Net Capital Appreciation upon which the calculation of may elect to reduce, waive or calculate differently the Incentive Allocation is based shall be reduced to the extent of any unrecovered balance remaining in the Loss Recovery Account (defined below) maintained on the books and records of the Partnership for such Limited Partner. The amount of the unrecovered balance remaining in the Loss Recovery Account at the time of calculating the Incentive Allocation shall be the amount existing immediately prior to its reduction pursuant to the second clause of the second sentence of Sec. 3.06(c). The Incentive Allocation shall not be applied Allocation, with respect to any revenues allocated to the Existing Limited Partner’s Capital Account that are attributable to Additional CDO Fees received by the Partnership from the Investment Manager. (c) 3. There shall be established on the books of the Partnership for the Capital Account of each Limited Partner a memorandum loss recovery account (the a “Loss Recovery Account”), the opening balance of which shall initially be zero. At the end of each fiscal year or at such other date during a fiscal year as the calculation of that an Incentive Allocation for such Partner with respect to a Capital Account is required to be made under this Sec. 3.06determined, the balance in each Limited Partner’s the Loss Recovery Account attributable to such Capital Account shall be adjusted as follows: firstFIRST, if there has beenif, in the aggregate, Net Capital Depreciation (as adjusted pursuant to the last sentence of this paragraph) with respect Decrease has been allocated to such Limited Partner Capital Account since the immediately preceding date as of which a calculation of an Incentive Allocation was made (other than an Incentive Allocation made upon a withdrawal prior to the end of the Fiscal Year) (or if no calculation has yet been made with respect to such Limited PartnerCapital Account, since his or its admission to the Partnershipit was established), there shall be added to such Loss Recovery Account an amount equal to such Net Capital Depreciation shall be debited to such Limited Partner’s Loss Recovery AccountDecrease; and, secondand SECOND, if there has been, in the aggregate, is Net Capital Appreciation Increase (as adjusted pursuant to the last sentence of this paragraphbefore any Incentive Allocation) with respect to such Limited Partner since the immediately preceding date as of which a calculation of Capital Account during an Incentive Allocation was madePeriod, an amount equal to such Net Capital Appreciation, before any Incentive Allocation to the General Partner, Loss Recovery Account shall be credited to and reduce any unrecovered balance in such Limited Partner’s Loss Recovery Account, reduced (but not below zero) by the amount of such Net Increase. Solely for purposes of this paragraphSection 4.1.3.3, in determining a Limited Partner’s the Loss Recovery Account attributable to a Capital Account, Net Capital Appreciation Increase and Net Capital Depreciation Decrease for any applicable period generally shall be calculated by taking into account the amount of the Management Fee debited to Fee, if any, deducted from such Limited Partner’s Capital Account for such period. 4. In the event that a Limited Partner with an unrecovered balance in his or its a Loss Recovery Account with respect to its Capital Account, withdraws all or a portion of its Capital Account, (a) with respect to the unrecovered withdrawn portion of such Capital Account, the Loss Recovery Account shall equal the product of (i) the balance in of such Limited PartnerCapital Account’s Loss Recovery Account shall be reduced as of on the beginning of the next Accounting Period following the Accounting Period during which such withdrawal occurs by an amount equal date (immediately prior to the product obtained by multiplying withdrawal) and (ii) a fraction, the numerator of which is the amount withdrawn and the denominator of which is the balance in of such Limited PartnerCapital Account on the withdrawal date (immediately prior to the withdrawal) and (b) with respect to the non-withdrawn portion of such Capital Account, the Loss Recovery Account shall equal the product of (i) the balance of such Capital Account’s Loss Recovery Account by on the withdrawal date (immediately prior to the withdrawal) and (ii) a fraction, the numerator of which is the amount of the withdrawal made by such Limited Partner as of the last day of the prior Accounting Period Capital Account that is not withdrawn and the denominator of which is the balance in such Limited Partner’s Capital Account on the last day of the prior Accounting Period withdrawal date (immediately prior to the withdrawal made by withdrawal). After the Limited Partner as withdrawal, the unrecovered balance of the last day Loss Recovery Account with respect to the withdrawn portion of the Accounting Period)such Capital Account shall be removed from such Capital Account. Additional Capital Contributions shall not affect any Limited Partner’s Loss Recovery Account. 5. In the event that the Company Transfers all or any portion of a Capital Account in accordance with Section 7.4 to another Affiliate of the Company, then (dA) no Incentive Allocation shall be calculated and allocated in respect of the Capital Account being transferred (unless the date of the Transfer is a Fiscal Year-end); and (B) any unrecovered balance in the transferor’s Loss Recovery Account attributable to the Capital Account associated with the Transferred amount (as determined in accordance with the calculation in the first sentence of Section 4.1.3.4 as if such Transferred amount had been withdrawn) shall, in the discretion of the Investment Manager, either be: (i) preserved in the Loss Recovery Account of the Transferring Limited Partner as if such amount had not been Transferred; or (ii) transferred into the Loss Recovery Account of the transferee Limited Partner. 6. The parties agree that notwithstanding anything to the contrary in this Agreement or in the Second Amended and Restated Agreement, with respect to the Fiscal Year ending December 31, 2020 any net increase or net decrease in the net asset value of the discretionary investments mutually referred to as the “Fixed Income Portfolio Account” by the parties (which includes, without limitation, such corporate bonds, structured credit and related hedging as approved by the Investment Committee for inclusion in the Fixed Income Portfolio Account but excludes any investments that are made for purposes of collateral posting to counterparties, cash management. (e.g., treasuries/foreign treasury equivalents or money market instruments) or foreign currency hedging) of the Collateral Assets (as defined in the Second Amended and Restated Agreement) during the Fiscal Year ending December 31, 2020 shall be deemed to be Net Capital Appreciation or Net Capital Depreciation, as applicable, generated by the Partnership for all purposes, including reducing or increasing any balance in the Loss Recovery Account and the General Partner’s entitlement to Incentive Allocation. Any expenses borne by the Company in connection with the Fixed Income Portfolio Account will serve to offset the Net Capital Appreciation, or increase the Net Capital Depreciation, as the case may be, for purposes of this Section 4.1.3.6. Notwithstanding anything to the contrary herein, this Section 4.1.3.6 shall be effective on December 31, 2020. 7. In the event the General Partner determines that, based upon tax any tax, regulatory or regulatory reasons, or any other reasons considerations as to which the General Partner and any Limited Partner agree, such Partner should not participate (or should be limited in its participation) in the Net Capital Appreciation or Net Capital Depreciation, if any, attributable to trading in any Security or Security, type of Security or to any other transaction, the General Partner may allocate such Net Capital Appreciation or Net Capital Depreciation only to the Capital Accounts of Partners to whom such considerations or reasons do not apply (or may allocate to the Capital Account to which such considerations or reasons apply, the portion of such Net Capital Appreciation or Net Capital Depreciation attributable to such Capital Account’s limited participation in such Security, type of Security or other transaction). In addition, if for any of the reasons described above, the General Partner determines that a Partner should have no interest whatsoever in a particular Security, type of Security or transaction, then, subject to such Partner’s consent (which shall not be required for a Security, type of Security or transaction that could generate income that is effectively connected with the conduct of a trade or business in the United States (including U.S. real estate assets) and can be specially allocated pursuant to Section 6.1.2.2), the interests in such Security, type of Security or transaction may be set forth in a separate memorandum account in which only the Partners having an interest in such Security, type of Security or transaction have an interest (any such Partner having Partner, for such an interest shall be Security, type of Security or transaction, being referred to as an “Unrestricted Partner”) shall have an interest and the Net Capital Appreciation and Net Capital Depreciation for each such memorandum account shall be separately calculated. 8. In the event the General Partner makes any such determination with respect to a Partner (a “Restricted Partner”), it shall promptly notify all other Partners in writing of such determination and each such other Partner, whether or not such tax or regulatory reasons are applicable to it, shall have the right, by written notice to the General Partner within 5 Business Days after receipt of such notice from the General Partner, to elect not to participate in such Net Capital Appreciation or Net Capital Depreciation, or interests in such Security, type of Security or transaction, as applicable, with respect to which such Restricted Partner was excluded (e) At the end of each Accounting Fiscal Period during which a memorandum account created pursuant to Sec. 3.06(d) Section 4.1.3.7 (each, a “Memorandum Account”) was in existence (or during which an interest in particular Securities was otherwise allocated away from one or more Limited Partners), the Capital Account of each Unrestricted Partner may be debited pro rata in accordance with the Capital Accounts of all Unrestricted Partners at the opening of such Accounting Fiscal Period in an amount equal to the interest that would have accrued on the amount used to purchase the Securities attributable to the Memorandum Account (the “Purchase Price”) had the Purchase Price earned interest at the rate per annum being paid by the Partnership from time to time during the applicable Accounting Fiscal Period for borrowed funds, or, if funds have not been borrowed by the Partnership during such Accounting Fiscal Period, at the interest rate per annum that the General Partner determines would have been paid if funds had been borrowed by the Partnership during such Accounting Fiscal Period. The amount so debited shall then be credited to the Capital Accounts of all of the Partners pro rata in accordance with their Capital Accounts as Partnership Percentages. 9. The General Partner may elect to have the Incentive Allocation reallocated to it (or to any of its Affiliates) at the level of any Special Purpose Vehicle through which the investment program of the opening of Partnership is being effectuated without receiving consent from existing Limited Partners, for so long as such election does not result in any material adverse consequences to the Accounting PeriodLimited Partners.

Allocation of Net Capital Appreciation or Net Capital Depreciation. (a) At the end of each Accounting Period, the each Capital Account of each Partner (including the each General Partner) for such Accounting Period shall be adjusted by crediting (in the case of Net Capital Appreciation) or debiting (in the case of Net Capital Depreciation) the Net Capital Appreciation or Net Capital Depreciation, as the case may be, to the Capital Accounts of all the Partners in proportion to their respective Partnership Percentages; provided, however, that any Net Capital Appreciation or Net Capital Depreciation with respect to any Additional CDO Fees received by the Partnership pursuant to Sec. 2.09(c) shall be exclusively credited or debited, as the case may be, to the Capital Account of the Existing Limited Partner. (b) Except as provided in subparagraph (c) of this Sec. 3.06Subject to Section 3.05(c), at the end of each fiscal year of the Partnership (Partnership, or the effective date at such other times as of which any Limited Partner withdraws from the Partnership pursuant to Sec. 6.01 (with respect to such withdrawal) or the effective date of the dissolution of the Partnership if it is dissolved other than at the end of a fiscal yearare required by Section 3.05(d), 2520% of the amount by which the Net Capital Appreciation Appreciation, if any, allocated to each Capital Account of a Limited Partner’s Capital Account Partner for such fiscal year pursuant to Sec. 3.06(a) exceeds the sum of (i) over the Management Fees Fee (and in the case of the Feeder Fund or the Intermediate Fund, expenses paid directly by the Feeder Fund or the Intermediate Fund) debited to such Capital Account of a Limited Partner’s Capital Amount for such fiscal year plus (ii) the Preferred Amount Partner pursuant to Section 2.07 for such fiscal year shall be reallocated to the Capital Account of the General Partner (the “"Incentive Allocation”"); provided, however, that the Net Capital Appreciation upon which the calculation of the Incentive Allocation is based shall be reduced to the extent of any unrecovered balance remaining in the Loss Recovery Account (defined below) maintained on the books and records of the Partnership for such Limited PartnerRelated Capital Account (as defined below). The amount of the unrecovered balance remaining in the Loss Recovery Account at the time of calculating the Incentive Allocation shall be the amount existing immediately prior to its reduction pursuant to the second clause of the second sentence of Sec. 3.06(cSection 3.05(c). The Managing General Partner may, in its sole discretion, elect to reduce, waive or calculate differently the Incentive Allocation shall not be applied with respect to any revenues allocated to the Existing Affiliated Investor or an Affiliate, employee or relative of an Affiliated Investor or its Affiliates, or for any other Limited Partner’s Capital Account that are attributable to Additional CDO Fees received by the Partnership from the Investment Manager. (c) There shall be established on the books of the Partnership for each Limited Partner Capital Account a memorandum account (the “"Loss Recovery Account”"), the opening balance of which shall be zero. For purposes of this Section 3.05, the Capital Account with respect to which a Loss Recovery Account was established shall be referred to as the "Related Capital Account." At the end of each fiscal year or at such other date during a fiscal year as the calculation of an Incentive Allocation for such Partner is required to be made for such Partner under this Sec. 3.06Section 3.05, the balance in each Limited Partner’s Loss Recovery Account shall be adjusted as follows: first, if there has been, in the aggregate, Net Capital Depreciation (as adjusted pursuant to the last sentence of this paragraph) with respect to such Limited Partner a Related Capital Account since the immediately preceding date as of which a calculation of an Incentive Allocation was made (or if no calculation has yet been made with respect to such Limited PartnerCapital Account, since his or its admission to the Partnershipcreation), an amount equal to such Net Capital Depreciation shall be debited credited to such Limited Partner’s Loss Recovery Account; , and, second, if there has been, in the aggregate, Net Capital Appreciation (as adjusted pursuant to the last sentence of this paragraph) with respect to such Limited Partner Related Capital Account since the immediately preceding date as of which a calculation of an Incentive Allocation was made, an amount equal to such Net Capital Appreciation, before any Incentive Allocation to the Managing General Partner, shall be credited debited to and reduce any unrecovered balance in such Limited Partner’s Loss Recovery Account, but not below zero. Solely for purposes of this paragraphSection 3.05(c), in determining a Limited Partner’s 's Loss Recovery Account, Net Capital Appreciation and Net Capital Depreciation for any applicable period shall be calculated by taking into account the amount of the Management Fee (and in the case of the Feeder Fund or the Intermediate Fund, expenses paid directly by the Feeder Fund or the Intermediate Fund), if any, debited to such Limited Partner’s 's Capital Account for such period. In the event that a Limited Partner with an unrecovered balance in his or its Loss Recovery Account withdraws all or a portion of its a Capital AccountAccount when there is an unrecovered balance in the Loss Recovery Account established in respect of such Capital Account (other than a withdrawal to pay Feeder Fund expenses as described in Section 5.03(d)), the unrecovered balance in such Limited Partner’s Loss Recovery Account shall be reduced as of the beginning of the next Accounting Period following the Accounting Period during which such withdrawal occurs by an amount equal to the product obtained by multiplying the balance in such Limited Partner’s Loss Recovery Account by a fraction, the numerator of which is the amount of the withdrawal from such Capital Account made by such Limited Partner as of with respect to the last day of the prior Accounting Period immediately preceding Withdrawal Date (other than a withdrawal described in Section 5.03(d)) and the denominator of which is the balance in such Limited Partner’s Capital Account on the last day of the prior Accounting Period (prior to the withdrawal made by the Limited Partner as of the last day of the Accounting Period). Additional Capital Contributions shall not affect any Limited Partner’s Loss Recovery Account. (d) In the event that (i) the Partnership is dissolved other than at the end of a fiscal year, (ii) the effective date of a Limited Partner's partial or complete withdrawal from any particular Capital Account is other than a fiscal year end, or (iii) a partial or complete distribution of all of the amounts contained in a Limited Partner's Capital Account occurs on a date other than a fiscal year end, then for purposes of determining the Incentive Allocation, Net Capital Appreciation shall be determined through the termination date (for all Limited Partners), withdrawal date or distribution date (for the Capital Account relating to such withdrawal or distribution (as applicable) only) as if such dates were the end of the fiscal year, and the Incentive Allocation shall be made at that time. (e) For purposes of determining the impact of withdrawals on Incentive Allocations and Loss Recovery Accounts with respect to: (i) Limited Partners having multiple Capital Accounts other than as contemplated in Section 3.02(d); and (ii) any Limited Partner holding multiple Capital Accounts that have been established in respect of any particular Indirect Investor, pursuant to Section 3.02(d), withdrawals will be deemed to be made in respect of such Capital Accounts on a "first in -first out" basis. (f) In the event the Managing General Partner determines that, based upon tax or regulatory reasons, or any other reasons as to which the Managing General Partner and any Limited Partner agree, such Partner (or any Indirect Investor) should not participate in the Net Capital Appreciation or Net Capital Depreciation, if any, attributable to trading in any Security or Security, type of Security or to any other transaction, or event if any, the Managing General Partner may allocate such Net Capital Appreciation or Net Capital Depreciation only to the Capital Accounts of Partners to whom in respect of which such reasons do not apply. In addition, if for any of the reasons described above, the Managing General Partner determines that a Partner (or any Indirect Investor) should have no interest whatsoever in a particular Security, type of Security or transaction, the interests in such Security, type of Security or transaction may be set forth in a separate memorandum account in which Partners shall participate only with respect to Capital Accounts that the Partners having Managing General Partner determines should have an interest in such Security, type of Security or transaction have an interest (any such Partner having Partner, for such an interest shall be Security, type of Security or transaction, being referred to the extent of such participating Capital Account as an “"Unrestricted Partner”") and in the Net Capital Appreciation and Net Capital Depreciation for each such memorandum account account, which shall be separately calculated. In the event the General Partner makes any such determination with respect to a Partner (a “Restricted Partner”), it shall promptly notify all other Partners in writing of such determination and each such other Partner, whether or not such tax or regulatory reasons are applicable to it, shall have the right, by written notice to the General Partner within 5 Business Days after receipt of such notice from the General Partner, to elect not to participate in such Net Capital Appreciation or Net Capital Depreciation, or interests in such Security, type of Security or transaction, as applicable, with respect to which such Restricted Partner was excluded. (eg) At the end of each Accounting Period during which a memorandum account created pursuant to Sec. 3.06(dSection 3.05(f) (each, a “"Memorandum Account”") was in existence (or during which an interest in particular Securities was otherwise allocated away from the Capital Accounts of one or more Limited Partners), the Capital Account Accounts of each Unrestricted Partner may be debited pro rata in accordance with the Capital Accounts of all Unrestricted Partners at the opening of such Accounting Period in an amount equal to the interest that would have accrued on the amount used to purchase the Securities attributable to the Memorandum Account (the “"Purchase Price”") had the Purchase Price earned interest at the rate per annum being paid by the Partnership from time to time during the applicable Accounting Period for borrowed funds, or, if funds have not been borrowed by the Partnership during such Accounting Period, at the interest rate per annum that the Managing General Partner determines would have been paid if funds had been borrowed by the Partnership during such Accounting Period. The amount so debited shall then be credited to the Capital Accounts of all of the Partners pro rata in accordance with their Capital Accounts as of the opening of the Accounting Period. (h) 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 Managing General Partner, without limitation of any other rights of the Partnership or the Managing General Partner, shall cause the amount of such obligation to be debited against the Capital Account(s) of such Partner as of the close of the Accounting Period during which the Partnership pays such obligation or has the Withholding Tax withheld from its income. The Managing General Partner shall 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 such reduction or exemption.

Allocation of Net Capital Appreciation or Net Capital Depreciation. (a) 4.1.3.1 At the end of each Accounting Fiscal Period, the Capital Account of each a Partner (including the General Partner) for such Accounting Fiscal Period shall be adjusted by crediting (in the case of Net Capital Appreciation) or debiting (in the case of Net Capital Depreciation) the Net Capital Appreciation or Net Capital Depreciation, as the case may be, to the Capital Accounts of all of the Partners (including the General Partner) in proportion to their respective Partnership Percentages; provided, however, that any Net Capital Appreciation or Net Capital Depreciation with respect to any Additional CDO Fees received by . 4.1.3.2 A reallocation of the Partnership amounts allocated pursuant to Sec. 2.09(c) Section 4.1.3.1 shall be exclusively credited or debited, as the case may be, to the Capital Account of the Existing Limited Partner. (b) Except as provided in subparagraph (c) of this Sec. 3.06, occur at the end of each fiscal year Incentive Allocation Period of the Partnership (or the effective date as of which any Limited Partner withdraws from the Partnership pursuant to Sec. 6.01 (with respect to such withdrawal) or the effective date of the dissolution of the Partnership if it is dissolved other than at the end of a fiscal year), 25so that 20% of the amount by which result of (x) the Net Increase (if any) of the Capital Appreciation allocated to Account of a Limited Partner’s Partner during such Incentive Allocation Period, minus (y) the Management Fee debited from such Capital Account for such fiscal year pursuant to Sec. 3.06(aIncentive Allocation Period, minus (z) exceeds the sum of (i) the Management Fees debited to such Limited Partner’s Capital Amount Loss Recovery ACTIVE 277660570v.12 Account balance for such fiscal year plus (ii) the Preferred Amount for such fiscal year Incentive Allocation Period, shall be reallocated to the Capital Account of the General Partner (the “Incentive Allocation”); provided. The General Partner, howeverin its discretion, that the Net Capital Appreciation upon which the calculation of may elect to reduce, waive or calculate differently the Incentive Allocation is based shall be reduced to the extent of any unrecovered balance remaining in the Loss Recovery Account (defined below) maintained on the books and records of the Partnership for such Limited Partner. The amount of the unrecovered balance remaining in the Loss Recovery Account at the time of calculating the Incentive Allocation shall be the amount existing immediately prior to its reduction pursuant to the second clause of the second sentence of Sec. 3.06(c). The Incentive Allocation shall not be applied Allocation, with respect to any revenues allocated to the Existing Limited Partner’s Capital Account that are attributable to Additional CDO Fees received by the Partnership from the Investment Manager. (c) 4.1.3.3 There shall be established on the books of the Partnership for the Capital Account of each Limited Partner a memorandum loss recovery account (the a “Loss Recovery Account”), the opening balance of which shall initially be zero. At the end of each fiscal year or at such other date during a fiscal year as the calculation of that an Incentive Allocation for such Partner with respect to a Capital Account is required to be made under this Sec. 3.06determined, the balance in each Limited Partner’s the Loss Recovery Account attributable to such Capital Account shall be adjusted as follows: firstFIRST, if there has beenif, in the aggregate, Net Capital Depreciation (as adjusted pursuant to the last sentence of this paragraph) with respect Decrease has been allocated to such Limited Partner Capital Account since the immediately preceding date as of which a calculation of an Incentive Allocation was made (other than an Incentive Allocation made upon a withdrawal prior to the end of the Fiscal Year) (or if no calculation has yet been made with respect to such Limited PartnerCapital Account, since his or its admission to the Partnershipit was established), there shall be added to such Loss Recovery Account an amount equal to such Net Capital Depreciation shall be debited to such Limited Partner’s Loss Recovery AccountDecrease; and, secondand SECOND, if there has been, in the aggregate, is Net Capital Appreciation Increase (as adjusted pursuant to the last sentence of this paragraphbefore any Incentive Allocation) with respect to such Limited Partner since the immediately preceding date as of which a calculation of Capital Account during an Incentive Allocation was madePeriod, an amount equal to such Net Capital Appreciation, before any Incentive Allocation to the General Partner, Loss Recovery Account shall be credited to and reduce any unrecovered balance in such Limited Partner’s Loss Recovery Account, reduced (but not below zero) by the amount of such Net Increase. Solely for purposes of this paragraphSection 4.1.3.3, in determining a Limited Partner’s the Loss Recovery Account attributable to a Capital Account, Net Capital Appreciation Increase and Net Capital Depreciation Decrease for any applicable period generally shall be calculated by taking into account the amount of the Management Fee debited to Fee, if any, deducted from such Limited Partner’s Capital Account for such period. . 4.1.3.4 In the event that a Limited Partner with an unrecovered balance in his or its a Loss Recovery Account with respect to its Capital Account, withdraws all or a portion of its Capital Account, (a) with respect to the unrecovered withdrawn portion of such Capital Account, the Loss Recovery Account shall equal the product of (i) the balance in of such Limited PartnerCapital Account’s Loss Recovery Account shall be reduced as of on the beginning of the next Accounting Period following the Accounting Period during which such withdrawal occurs by an amount equal date (immediately prior to the product obtained by multiplying withdrawal) and (ii) a fraction, the numerator of which is the amount withdrawn and the denominator of which is the balance in of such Limited PartnerCapital Account on the withdrawal date (immediately prior to the withdrawal) and (b) with respect to the non-withdrawn portion of such Capital Account, the Loss Recovery Account shall equal the product of (i) the balance of such Capital Account’s Loss Recovery Account by on the withdrawal date (immediately prior to the withdrawal) and (ii) a fraction, the numerator of which is the amount of the withdrawal made by such Limited Partner as of the last day of the prior Accounting Period Capital Account that is not withdrawn and the denominator of which is the balance in such Limited Partner’s Capital Account on the last day of the prior Accounting Period withdrawal date (immediately prior to the withdrawal made by withdrawal). After the Limited Partner as withdrawal, the unrecovered balance of the last day Loss Recovery Account with respect to the withdrawn portion of the Accounting Period)such Capital Account shall be removed from such Capital Account. Additional Capital Contributions shall not affect any Limited Partner’s Loss Recovery Account. (d) 4.1.3.5 In the event that the General Partner determines that, based upon tax or regulatory reasons, Company Transfers all or any other reasons as portion of a Capital Account in accordance with Section 7.4 to which another Affiliate of the General Partner Company, then (A) no Incentive Allocation shall be calculated and allocated in respect of the Capital Account being transferred (unless the date of the Transfer is a Fiscal Year-end); and (B) any Partner agree, such Partner should not participate unrecovered balance in the Net Capital Appreciation or Net Capital Depreciation, if any, transferor’s Loss Recovery Account attributable to trading in any Security or type of Security or to any other transaction, the General Partner may allocate such Net Capital Appreciation or Net Capital Depreciation only to the Capital Accounts of Partners to whom such reasons do not apply. In addition, if for any of Account associated with the reasons described above, the General Partner determines that a Partner should have no interest whatsoever in a particular Security, type of Security or transaction, the interests in such Security, type of Security or transaction may be set forth in a separate memorandum account in which only the Partners having an interest in such Security, type of Security or transaction have an interest Transferred amount (any such Partner having such an interest shall be referred to as an “Unrestricted Partner”) and the Net Capital Appreciation and Net Capital Depreciation for each such memorandum account shall be separately calculated. In the event the General Partner makes any such determination with respect to a Partner (a “Restricted Partner”), it shall promptly notify all other Partners in writing of such determination and each such other Partner, whether or not such tax or regulatory reasons are applicable to it, shall have the right, by written notice to the General Partner within 5 Business Days after receipt of such notice from the General Partner, to elect not to participate in such Net Capital Appreciation or Net Capital Depreciation, or interests in such Security, type of Security or transaction, as applicable, with respect to which such Restricted Partner was excluded (e) At the end of each Accounting Period during which a memorandum account created pursuant to Sec. 3.06(d) (each, a “Memorandum Account”) was in existence (or during which an interest in particular Securities was otherwise allocated away from one or more Limited Partners), the Capital Account of each Unrestricted Partner may be debited pro rata determined in accordance with the Capital Accounts calculation in the first sentence of all Unrestricted Partners at Section 4.1.3.4 as if such Transferred amount had been withdrawn) shall, in the opening discretion of the Investment Manager, either be: (i) preserved in the Loss Recovery Account of the Transferring Limited Partner as if such Accounting Period in an amount equal to the interest that would have accrued on the amount used to purchase the Securities attributable to the Memorandum Account (the “Purchase Price”) had the Purchase Price earned interest at the rate per annum being paid by the Partnership from time to time during the applicable Accounting Period for borrowed funds, or, if funds have not been borrowed by Transferred; or (ii) transferred into the Partnership during such Accounting Period, at the interest rate per annum that the General Partner determines would have been paid if funds had been borrowed by the Partnership during such Accounting Period. The amount so debited shall then be credited to the Capital Accounts of all Loss Recovery Account of the Partners pro rata in accordance with their Capital Accounts as of the opening of the Accounting Periodtransferee Limited Partner.

Allocation of Net Capital Appreciation or Net Capital Depreciation. (a) At the end of each Accounting Period, the each Capital Account of each Partner (including the each General Partner) for such Accounting Period shall be adjusted by crediting (in the case of Net Capital Appreciation) or debiting (in the case of Net Capital Depreciation) the Net Capital Appreciation or Net Capital Depreciation, as the case may be, to the Capital Accounts of all the Partners in proportion to their respective Partnership Percentages; provided, however, that any Net Capital Appreciation or Net Capital Depreciation with respect to any Additional CDO Fees received by the Partnership pursuant to Sec. 2.09(c) shall be exclusively credited or debited, as the case may be, to the Capital Account of the Existing Limited Partner. (b) Except as provided in subparagraph (c) of this Sec. 3.06Subject to Section 3.05(c), at the end of each fiscal year of the Partnership (Partnership, or the effective date at such other times as of which any Limited Partner withdraws from are required by Section 3.05(d), the Partnership pursuant to Sec. 6.01 (with respect to such withdrawal) or the effective date of the dissolution of the Partnership if it is dissolved other than at the end of a fiscal year), 25% of the amount by which the Net Capital Appreciation allocated to a Limited Partner’s Capital Account for such fiscal year pursuant to Sec. 3.06(a) exceeds the sum of (i) the Management Fees debited to such Limited Partner’s Capital Amount for such fiscal year plus (ii) the Preferred Amount for such fiscal year shall be reallocated reallocate to the Capital Account of the Managing General Partner such percentage as it may agree in respect of each class of Limited Partner that it may designate of the excess of the Net Capital Appreciation, if any, allocated to each Capital Account of each Limited Partner in such class for such fiscal year over the Management Fee (and in the case of the Feeder Fund, expenses paid directly by the Feeder Fund) debited to such Limited Partner's Capital Account pursuant to Section 2.07 for such fiscal year (the “"Incentive Allocation”"); providedPROVIDED, howeverHOWEVER, that the Net Capital Appreciation upon which the calculation of the Incentive Allocation is based shall be reduced to the extent of any unrecovered balance remaining in the Loss Recovery Account (defined below) maintained on the books and records of the Partnership for such Limited Partnerrelated Capital Account. The amount of the unrecovered balance remaining in the Loss Recovery Account at the time of calculating the Incentive Allocation shall be the amount existing immediately prior to its reduction pursuant to the second clause of the second sentence of Sec. 3.06(cSection 3.05(c). The Managing General Partner may waive, reduce or calculate differently the Incentive Allocation shall not be applied for the direct and indirect holdings by Affiliated Investors or for any Non-Affiliated Investors and may, in its sole discretion, elect to reduce, waive or calculate differently the Incentive Allocation with respect to any revenues allocated to the Existing Limited Partner that is an affiliate, employee or relative of an Affiliated Investor or for any other Limited Partner’s Capital Account that are attributable to Additional CDO Fees received by the Partnership from the Investment Manager. (c) There shall be established on the books of the Partnership for each Limited Partner Capital Account a memorandum account (the “"Loss Recovery Account”"), the opening balance of which shall be zero. For purposes of this Section 3.05, the Capital Account with respect to which a Loss Recovery Account was established shall be referred to as the "Related Capital Account." At the end of each fiscal year or at such other date during a fiscal year as the calculation of an Incentive Allocation for such Partner is required to be made for such Partner under this Sec. 3.06Section 3.05, the balance in each Limited Partner’s Loss Recovery Account shall be adjusted as follows: first, if there has been, in the aggregate, Net Capital Depreciation (as adjusted pursuant to the last sentence of this paragraph) with respect to such Limited Partner a Related Capital Account since the immediately preceding date as of which a calculation of an Incentive Allocation was made (or if no calculation has yet been made with respect to such Limited PartnerCapital Account, since his or its admission to the Partnershipcreation), an amount equal to such Net Capital Depreciation shall be debited credited to such Limited Partner’s Loss Recovery Account; , and, second, if there has been, in the aggregate, Net Capital Appreciation (as adjusted pursuant to the last sentence of this paragraph) with respect to such Limited Partner Related Capital Account since the immediately preceding date as of which a calculation of an Incentive Allocation was made, an amount equal to such Net Capital Appreciation, before any Incentive Allocation to the Managing General Partner, shall be credited debited to and reduce any unrecovered balance in such Limited Partner’s Loss Recovery Account, but not below zero. Solely for purposes of this paragraphSection 3.05(c), in determining a Limited Partner’s 's Loss Recovery Account, Net Capital Appreciation and Net Capital Depreciation for any applicable period shall be calculated by taking into account the amount of the Management Fee (and in the case of the Feeder Fund, expenses paid directly by the Feeder Fund), if any, debited to such Limited Partner’s 's Capital Account for such period. period In the event that a Limited Partner with an unrecovered balance in his or its Loss Recovery Account withdraws all or a portion of its a Capital AccountAccount when there is an unrecovered balance in the Loss Recovery Account established in respect of such Capital Account (other than a withdrawal to pay Feeder Fund expenses as described in Section 5.03(f)), the unrecovered balance in such Limited Partner’s Loss Recovery Account shall be reduced as of the beginning of the next Accounting Period following the Accounting Period during which such withdrawal occurs by an amount equal to the product obtained by multiplying the balance in such Limited Partner’s Loss Recovery Account by a fraction, the numerator of which is the amount of the withdrawal from such Capital Account made by such Limited Partner as of with respect to the last day of the prior Accounting Period immediately preceding Withdrawal Date and the denominator of which is the balance in such Limited Partner’s Capital Account on the last day of the prior Accounting Period (prior to the withdrawal made by the Limited Partner as of the last day of the Accounting Period). Additional Capital Contributions shall not affect any Limited Partner’s Loss Recovery Account. (d) In the event that (i) the Partnership is dissolved other than at the end of a fiscal year, (ii) the effective date of a Limited Partner's partial or complete withdrawal from any particular Capital Account is other than a fiscal year end, or (iii) a partial or complete distribution of all of the amounts contained in a Limited Partner's Capital Account occurs on a date other than a fiscal year end, then for purposes of determining the Incentive Allocation, Net Capital Appreciation shall be determined through the termination date (for all Limited Partners), withdrawal date or distribution date (for the Capital Account relating to such withdrawal or distribution (as applicable) only) as if such dates were the end of the fiscal year, and the Incentive Allocation shall be made at that time. (e) For purposes of determining the impact of withdrawals on Incentive Allocations and Loss Recovery Accounts with respect to: (i) Limited Partners having multiple Capital Accounts other than as contemplated in Section 3.02(d)(ii); and (ii) any Limited Partner holding multiple Capital Accounts that have been established in respect of any particular LP Investor, pursuant to Section 3.02(d), withdrawals will be deemed to be made in respect of such Capital Accounts on a "first in -first out" basis. (f) In the event the Managing General Partner determines that, based upon tax or regulatory reasons, or any other reasons as to which the Managing General Partner and any Limited Partner agree, such Partner (or any LP Investor) should not participate in the Net Capital Appreciation or Net Capital Depreciation, if any, attributable to trading in any Security or Security, type of Security or to any other transaction, or event if any, the Managing General Partner may allocate such Net Capital Appreciation or Net Capital Depreciation only to the Capital Accounts of Partners to whom in respect of which such reasons do not apply. In addition, if for any of the reasons described above, the Managing General Partner determines that a Partner (or any LP Investor) should have no interest whatsoever in a particular Security, type of Security or transaction, the interests in such Security, type of Security or transaction may be set forth in a separate memorandum account in which Partners shall participate only with respect to Capital Accounts that the Partners having Managing General Partner determines should have an interest in such Security, type of Security or transaction have an interest (any such Partner having Partner, for such an interest shall be Security, type of Security or transaction, being referred to the extent of such participating Capital Account as an “"Unrestricted Partner”") and in the Net Capital Appreciation and Net Capital Depreciation for each such memorandum account account, which shall be separately calculated. In the event the General Partner makes any such determination with respect to a Partner (a “Restricted Partner”), it shall promptly notify all other Partners in writing of such determination and each such other Partner, whether or not such tax or regulatory reasons are applicable to it, shall have the right, by written notice to the General Partner within 5 Business Days after receipt of such notice from the General Partner, to elect not to participate in such Net Capital Appreciation or Net Capital Depreciation, or interests in such Security, type of Security or transaction, as applicable, with respect to which such Restricted Partner was excluded. (eg) At the end of each Accounting Period during which a memorandum account created pursuant to Sec. 3.06(dSection 3.05(f) (each, a “"Memorandum Account”") was in existence (or during which an interest in particular Securities was otherwise allocated away from the Capital Accounts of one or more Limited Partners), the Capital Account Accounts of each Unrestricted Partner may be debited pro rata PRO RATA in accordance with the Capital Accounts of all Unrestricted Partners at the opening of such Accounting Period in an amount equal to the interest that would have accrued on the amount used to purchase the Securities attributable to the Memorandum Account (the “"Purchase Price”") had the Purchase Price earned interest at the rate per annum being paid by the Partnership from time to time during the applicable Accounting Period for borrowed funds, or, if funds have not been borrowed by the Partnership during such Accounting Period, at the interest rate per annum that the Managing General Partner determines would have been paid if funds had been borrowed by the Partnership during such Accounting Period. The amount so debited shall then be credited to the Capital Accounts of all of the Partners pro rata PRO RATA in accordance with their Capital Accounts as of the opening of the Accounting Period. (h) 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 Managing General Partner, without limitation of any other rights of the Partnership or the Managing General Partner, shall cause the amount of such obligation to be debited against the Capital Account(s) of such Partner as of the close of the Accounting Period during which the Partnership pays such obligation or has the Withholding Tax withheld from its income. The Managing General Partner shall 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 such reduction or exemption.