PERSIMMON GROWTH PARTNERS FUND, L.P. AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
PERSIMMON GROWTH PARTNERS FUND, L.P.
AMENDED AND RESTATED LIMITED PARTNERSHIP
AGREEMENT
Dated as of June 5, 2010
PERSIMMON GROWTH PARTNERS FUND, L.P.
AMENDED AND RESTATED
LIMITED
PARTNERSHIP AGREEMENT
THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
(this “Agreement”)
of Persimmon Growth Partners Fund,
L.P. (the "Fund") is dated as of June 5, 2010 by and among Xxxxxxx X. Xxxx, Xxxxxx Xxxxxx, Jopesph
Ridler, Jr,, and Xxxxxxx Xxxxx, Jr. as the Directors, and Persimmon GP, LLC on behalf of itself
and on behalf of the Limited Partners (as defined herein).
W I T N E S S E T H:
WHEREAS, the Fund has heretofore been formed as a limited partnership as of
December 11, 2003 under the
Delaware Revised Uniform
Limited Partnership Act;
WHEREAS, the Partners are party to the
Persimmon Growth Partners Fund, L.P. Amended and Restated Limited Partnership
Agreement dated as of June 1, 2006 (the “Current LPA”);
WHEREAS, the General Partner has
recommended restating and amending the Current LPA as described herein in order
to include those provisions that would be required in the event that the Fund
registers under the Investment Company Act;
WHEREAS, the Limited Partners approved
this Agreement pursuant to Sections 9.4 and 9.5 of the Current LPA and granted
the General Partner the power of attorney to execute this Agreement on their
behalf pursuant to Section 9.3 thereof;
NOW, THEREFORE, for and in consideration
of the foregoing and the mutual covenants hereinafter set forth, it is
hereby agreed as follows:
ARTICLE I.
DEFINITIONS
For purposes of this
Agreement:
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ADMINISTRATOR
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The person who provides
administrative services to the Fund pursuant to an administrative services
agreement.
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ADVISER
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Persimmon Capital Management,
L.P. and
any other investment adviser who
enters into an Investment Advisory Agreement to manage the portfolio of
investments for the
Fund from time to
time.
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ADVISERS ACT
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The Investment Advisers Act of
1940 and the rules, regulations and
orders thereunder, as amended from time
to time, or any successor
law.
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ADVISORY SERVICES
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Such investment advisory and
other services as the Adviser is required to provide to
the Fund pursuant to the Investment
Advisory Agreement.
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AFFILIATE
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An affiliated person of a person
as such term is defined in the
Investment Company
Act.
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AGREEMENT
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This Amended and Restated Limited Partnership Agreement, as
amended from time to time.
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ALLOCATION
PERIOD
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The period commencing on the
Initial Closing Date, and thereafter each
period commencing on the day
immediately following the last day of the
preceding Allocation Period, and ending at
the close of business on the first to
occur of the following dates: (1) the
last day of each month; (2) the last day of
each Taxable Year; (3) the day
preceding each day on which Interests are purchased pursuant to Section 5.1; (4) each
day on which Interests are repurchased; and (5)
any day as of which this Agreement
provides for any amount to be credited to
or debited against the
Capital Account of any Partner, other than an amount to be credited to or
debited against the Capital Accounts of
all
Partners in
accordance with their respective Investment
Percentages.
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BOARD OF DIRECTORS
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The Board of Directors
established pursuant to Section
2.6.
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BUSINESS
DAY
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Any
day, excluding Saturdays or Sundays, when the New York Stock Exchange is
open for unrestricted trading.
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CAPITAL
ACCOUNT
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With respect to each Partner, the
capital account established and maintained on behalf of each Partner
pursuant to Section 5.3
hereof.
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CAPITAL
CONTRIBUTION
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The
amount of capital contributed to the Partnership by a
Partner.
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CERTIFICATE
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CODE
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The United States Internal Revenue
Code of 1986, as amended from time to
time, or any successor
law.
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CONFIDENTIAL
PRIVATE
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PLACEMENT
MEMORANDUM
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The Confidential Private Placement
Memorandum for the Fund as the same may be amended or supplemented from
time to time.
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DELAWARE ACT
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The Delaware Revised Uniform Limited
Partnership Act as in
effect on the date hereof and as amended from time to time, or
any successor
law.
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2
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DIRECTOR
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An individual designated as a
director of the Fund pursuant to the provisions of Section 2.6 of
the Agreement and who serves on the
Board of Directors of the Fund.
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FISCAL YEAR
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The period ending on March 31 of each year (or on the date of a final
distribution pursuant to Section 6.2 hereof),
unless the Board of Directors shall
elect another fiscal year for
the Fund.
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FORM N-2
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The Fund's Registration Statement
on Form N-2 filed with the Securities
and Exchange Commission, as amended
from time to
time.
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FUND
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The Limited Partnership
governed hereby, as such limited
partnership may from time to time
be constituted.
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INDEPENDENT
DIRECTORS
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Those Directors who are not
"interested persons" of the Fund as such term is defined in the Investment Company
Act.
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INTERESTED
DIRECTORS
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Those Directors who are
"interested persons" of the Fund as such term is defined in the Investment Company
Act.
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INVESTMENT ADVISORY
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AGREEMENT
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A separate written agreement
entered into by the Fund pursuant to which the Adviser provides Advisory Services to the Fund.
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INVESTMENT COMPANY
ACT
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The Investment Company Act of 1940
and the rules, regulations and
orders thereunder, as amended from time
to time, or any successor
law.
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INVESTMENT FUNDS
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Investment funds in which
the Fund may
invest.
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INVESTMENT
PERCENTAGE
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A percentage established for each
Partner on the Fund's books as of the
first day of each Allocation Period.
The Investment Percentage of a
Partner for an Allocation Period shall be
determined by dividing the balance of the
Partner's Capital Account as of the
commencement of such Allocation Period by the
sum of the Capital Accounts of all the
Partners as of the commencement of
such Allocation Period. The sum of
the Investment Percentages of all
Partners for each Allocation Period shall
equal 100%.
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INTERESTS
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An ownership interest in
the Fund of a Partner, or other person to whom
Interests of a Partner or any portion thereof
has been transferred pursuant to
Section 4.4 hereof, including the rights
and obligations of such Partner or other person under this Agreement and
the Delaware
Act
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LIMITED
PARTNER
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A person admitted as a limited
partner to the Fund.
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3
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NET ASSETS
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The Fund’s net asset value per
Interest is based on the net asset value of the Fund and is determined by
dividing the net asset value of the Fund by the number of Interests
outstanding. Except as otherwise provided, the net asset value
per Interest will be determined by the Administrator and published or made
available at the office of the Fund at the end of each Allocation Period
based on the price availability of the underlying investments, subject to
reasonable delays (i.e., delays the Fund may encounter in receiving the
net asset value of the Investment
Funds).
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NET PROFIT OR NET
LOSS
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The amount by which the Net Assets
as of the close of business on the last
day of an Allocation 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
Allocation Period (or, with respect to the
initial Allocation Period of the Fund, at the close of business on the Initial
Closing Date), such amount to be adjusted
to exclude any items to be allocated
among the Capital Accounts of the
Partners on a basis which is not in accordance
with the respective Investment
Percentages of all Partners as of the commencement
of such Allocation Period pursuant
to Sections 5.5 and 5.6
hereof.
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PARTNER
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Any person who shall have been
admitted to the Fund as a Partner (including any Director in such person's
capacity as a Partner of the Fund but excluding any Director in such person's
capacity as a Director of the Fund) until the Fund repurchases the Interests of such person as a Partner pursuant to Section 4.5 hereof or a substituted
Partner or Partners are admitted with respect to
any such person's Interests as a Partner pursuant to Section 4.4 hereof; such
term includes the Adviser to the extent the Adviser makes a capital contribution to
the Fund and shall have been admitted to
the Fund as a Partner.
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SECURITIES
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Securities (including,
without limitation, U.S. and non-U.S.
equities, debt obligations, options, and
other "securities" as that term is
defined in Section 2(a)(36) of the Investment Company Act) and any contracts
for forward or future delivery of
any security, debt obligation or
currency, all manner of derivative
instruments and any contracts based on any index
or group of securities, debt
obligations or currencies, and any options
thereon, as well as investments in
registered investment companies and
private investment
funds.
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TAXABLE
YEAR
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The 12-month period ending
March 31 of each
year.
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4
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TRANSFER
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The assignment, transfer,
sale, encumbrance, pledge or other
disposition of all Interests or any individual Interest, including any right to receive
any allocations and
distributions attributable to a Interest or Interests.
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ARTICLE II.
ORGANIZATION; ADMISSION OF PARTNERS
2.1 FORMATION OF LIMITED
PARTNERSHIP.
The Partnership was formed as a limited
partnership under the Delaware Act by the filing of the Certificate of
Limited Partnership with the office of the Secretary of State of
Delaware. The
Board of Directors shall execute and file in accordance with the Delaware Act any amendment to the
Certificate and shall execute and file with applicable governmental authorities any
other instruments, documents and certificates which, in the opinion of
the Fund's legal counsel, 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 Fund shall determine to do business, or any political subdivision
or agency thereof, or which such legal counsel may deem necessary or
appropriate to effectuate, implement and continue the valid existence and business of
the Fund.
2.2 NAME.
The name of the Fund shall be "Persimmon Growth
Partners Fund,
L.P." or such other name as the Board of
Directors may hereafter adopt upon (i) causing an appropriate amendment to the
Certificate to be filed in accordance with the Delaware Act and (ii) sending
notice thereof to each Partner.
2.3 PRINCIPAL AND REGISTERED
OFFICE.
The Fund shall have its principal office at
0000 Xxxxxx Xxxxxxx
West, Gwynedd Hall,
Suite 102, Blue Xxxx, PA 19422, or at such other place designated from
time to time by the Board of Directors. The
Fund shall have Corporation Service Company
as its registered agent for service of process in Delaware, unless a different registered agent is
designated from time to time by the Board of
Directors.
2.4 DURATION.
The term of the Fund commenced on the filing of the
Certificate with the Secretary of State of Delaware and shall
continue until the
Fund is
dissolved pursuant to Section 6.1
hereof.
2.5 OBJECTIVE AND BUSINESS OF THE
FUND.
a) The objective and business of
the Fund is to purchase, sell (including short sales), invest and
trade in Securities, on margin or otherwise, and to engage in any
financial or derivative transactions relating thereto or otherwise. The
Fund may execute, deliver and
perform all contracts, agreements, subscription
documents and other undertakings and engage in all activities and
transactions as may in the opinion of the Board of Directors be necessary or
advisable to carry out its objective or business.
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The Fund is organized for the object and purpose of, and the nature of
the business to be conducted and promoted by Fund is, investing capital in accordance
with the investment policies set forth in the Fund’s Confidential Private Placement
Memorandum and engaging in all activities and
transactions as the General Partner may deem necessary or advisable in
connection therewith.
(b) The Fund shall operate as a closed-end,
non-diversified, management investment company in
accordance with the Investment Company Act and subject to any fundamental policies
and investment restrictions set forth in the Form
N-2.
2.6 BOARD OF
DIRECTORS.
(a) The General Partner shall designate three persons who shall agree to be bound by all of
the terms of this Agreement to serve as the
initial Independent Directors on the Board of Directors and the
Adviser shall designate one person to serve as the initial
Interested Director on the Board of Directors, subject to the election of
such persons prior to the date of this Agreement by the Partners. By signing this Agreement or
the signature page of the Fund's subscription agreement, a
Partner admitted after the date of this Agreement
shall be deemed to have
voted for the election of each of the initial Directors to the
Board of Directors. The Board of Directors may, subject to
the provisions of paragraphs (a) and (b) of this Section 2.6 with respect to the
number of and vacancies in the position of
Director of and the provisions of Section 3.3 hereof with respect to the election
of Directors to the Board of Directors by Partners, designate any person who shall agree
to be bound by all of the terms of this Agreement as a
Director. The names and mailing addresses of the Directors shall be set
forth in the books and records of the Fund. The number of Directors shall be fixed
from time to time by the Board of
Directors.
(b) Each Director shall serve on the Board
of Directors for the duration of the term of the Fund, unless his or her status as a
Director shall be sooner terminated pursuant to
Section 4.2 hereof. In the event of any vacancy in the position of Director,
the remaining Directors may appoint an individual to serve in such
capacity, so long as immediately after such appointment at least
two-thirds (2/3) of the Directors then serving would have been elected by the
Partners. The Board of Directors
may call a meeting of Partners to fill any vacancy in the position of
a Director, and shall do so within 60 days
after any date on which Directors who were elected by the Partners cease to constitute a majority of
the Directors then serving on the Board of
Directors.
(c) In the event that no Director remains
to continue the business of
the Fund, the Adviser shall 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 Fund and, if the business shall be continued, of electing the required
number of Directors to the Board of Directors. If the Partners shall determine at such meeting not to
continue the business of the Fund or if the required number of Directors
is not elected within 60 days after the date on
which the last Director ceased to act in that capacity, then the Fund shall be dissolved pursuant
to Section 6.1 hereof and the assets of
the Fund shall be liquidated and distributed pursuant to Section 6.2
hereof.
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2.7 PARTNERS.
The Board of Directors may admit one or
more Partners as of the first day of each calendar month; provided, however,
that upon delivery to the Board of Directors of a letter of advice from
counsel to the Adviser that the admission of Partners more often than monthly will not cause
the Fund to be taxed as a corporation, the Fund may, in the discretion of the Board
of Directors, admit Partners more frequently. Subject to the
foregoing terms,
Partners may be admitted to
the Fund subject to the condition that each
such Partner shall execute an appropriate signature
page of this Agreement or of the Fund’s subscription agreement pursuant to
which such Partner agrees to be bound by all the terms and provisions
hereof. The Board of Directors may in its absolute discretion reject any
subscription for Interests. The admission of any person as a Partner shall be effective upon the revision of
the books and records of the Fund to reflect the name and the
contribution to the capital of the Fund of such additional Partner.
2.8 FISCAL YEAR.
The fiscal year of the Partnership
shall end on March 31 of each year (or on the date of a final
distribution pursuant to Section 6.2 hereof)
or on such date as the Board of
Directors shall
determine.
2.9 BOTH DIRECTORS AND PARTNERS.
A Partner may at the same time be a Director and
a Partner, in which event such Partner's rights and obligations in each
capacity shall be determined separately in accordance with the terms
and provisions hereof or as provided in the Delaware Act.
2.10 LIMITED
LIABILITY.
The names of all of the Partners and the
amounts of their respective contributions to the Fund and Investment Percentages are set forth in a schedule entitled
“Schedule of Capital Contributions and Investment Percentages” (the “Schedule”) which shall be
maintained with the records of the Fund at the General Partner’s principal
office. Each Limited Partner shall have reasonable access to records
relating to its own Capital Account but will not have access to the
Schedule.
Those Partners who are designated in the Schedule as Limited
Partners and former Limited
Partners shall be liable for the repayment and discharge of all debts and
obligations of the Fund attributable to any fiscal year (or
relevant portion thereof) during which they are or were Limited Partners of the
Fund only to the extent of their respective
interests in the Fund in the fiscal year (or relevant portion
thereof) to which any such debts and obligations are attributable and shall not
otherwise have any liability in respect of the debts and obligations of the
Fund.
The Limited Partners and all former
Limited Partners shall share all losses, liabilities or expenses suffered or
incurred by virtue of the operation of the preceding paragraphs of this Section 2.10
in the proportions of their
respective Investment Percentages for the fiscal year (or relevant portion
thereof) to which any debts or obligations of the Fund are attributable. Limited
Partners or former Limited Partners shall share all losses, liabilities or
expenses up to the limit of their respective interests in the Fund for such fiscal year (or relevant
portion thereof).
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As used in this Sec. 2.10, the terms “interests in the
Fund” and “interest in the Fund” shall mean with respect to any fiscal
year (or relevant portion thereof) and with respect to each Partner (or former
Partner) its interest in its Capital Account that such Partner (or former Partner)
would have received (or in fact did receive) pursuant to the terms and
provisions of this
Agreement upon withdrawal
from the Fund as of the end of such fiscal year (or
relevant portion thereof).
Notwithstanding any other provision in
this Agreement, in no event shall any Partner (or former Partner) be obligated
to make any additional contribution to the Fund, or have any liability for the
repayment and discharge of the debts and obligations of the Fund (apart from its interest in the
Fund), except that a Partner (or former
Partner) may be required, for purposes of meeting such Partner’s obligations
under this Sec. 2.10, to make additional contributions or
payments, respectively, up to, but in no event in excess of, the aggregate
amount of returns of capital and other amounts actually received by it from the
Fund during or after the fiscal year to
which any debt or obligation is attributable.
As used in this Agreement, the term
“former Partner” refers to any person or entity that hereafter from time to time
ceases to be a Partner pursuant to the terms and provisions of this
Agreement.
Except as provided under applicable law,
a Director shall not be liable for the Fund's debts, obligations and
liabilities.
ARTICLE III
MANAGEMENT
3.1 MANAGEMENT AND
CONTROL.
(a) Management and control of the business
of the Fund shall be vested in the Board of Directors, which
shall have the right, power and authority, on behalf of the Fund and in its name, to exercise
all rights, powers and authority of
Directors under applicable
law and to do all things necessary and proper to carry
out the objective and business of the Fund and their duties hereunder including,
but not limited to, the hiring of outside consultants and other
persons to assist or advise the Board of Directors. No Director shall
have the authority individually to act on behalf of or to bind the Fund except within the scope of
such Director's authority as delegated by the
Board of Directors. The parties hereto intend that, except to the extent
otherwise expressly provided herein, (i) each Director shall be
vested with the same powers, authority and responsibilities on behalf of
the Fund as are customarily vested
in each director of a Delaware corporation
and (ii) each Independent Director shall be vested with the same powers,
authority and responsibilities on behalf of the Fund as are customarily vested in each
director of a closed-end management investment company
registered under the Investment Company Act that is
organized as a Delaware trust who is not an "interested person" of
such company as such term is defined in the
Investment Company Act. During any period in which the Fund shall have no Directors, the
Adviser shall continue to serve as the Adviser to the Fund and to provide the Management Services to the Fund.
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(b) To the extent consistent with
Section 3.1(a) and the Investment Company Act, the General Partner shall exercise authority over the Fund. Except as authorized by the General
Partner, the Limited Partners shall have no authority or right to act on behalf
of the Fund in connection with any
matter. The General Partner has the right to delegate its
responsibilities hereunder, including the responsibility of providing certain
management, administrative and auditing services, to suitable parties that may
be reasonably compensated by the Fund. The General Partner may
also retain such other suitable parties (including affiliates of the General
Partner) to provide services to the Fund, including legal, consulting,
accounting, administrative and auditing services. Furthermore, the
General Partner may enter into agreements with such parties on behalf of the
Fund, which agreements may include
provisions for the indemnification and exculpation of such parties, in certain
circumstances, by the Fund.
(c) Each Partner agrees not to treat, on his personal
income tax return or in any claim for a tax refund, any
item of income, gain, loss, deduction or credit in a manner inconsistent with
the treatment of such item by the Fund. The Board of Directors shall have the
exclusive authority and discretion to make any elections
required or permitted to be made by the Fund under any provisions of the Code or any
other revenue laws.
(d) Limited Partners shall have no right to participate in
and shall take no part in the management or control of
the Fund's business and shall have no right, power or authority to act for
or bind the
Fund. Partners shall have the right to vote on any matters
only as provided in this Agreement or on any matters that require the approval
of the holders of voting securities under the Investment Company
Act or as otherwise required in the Delaware Act.
(e) The Board of Directors may delegate to
any other person any rights, power and authority vested by
this Agreement in the Board of Directors to the extent permissible
under applicable law.
(f) Persons dealing with the Fund are entitled to rely conclusively upon
the certificate of the General Partner to the effect that it is then acting as
General Partner and upon the power and authority of the General Partner as
herein set forth.
3.2 ACTIONS BY THE BOARD OF
DIRECTORS.
(a) Unless provided otherwise in this
Agreement, the Board of Directors shall act only: (i) by the
affirmative vote of a majority of the Directors (including the vote of a
majority of the Independent Directors if required by the Investment Company Act)
present at a meeting duly called at which a quorum of the Directors shall be
present (in person or, if in person attendance is not required by the
Investment Company Act, by telephone) or (ii) by unanimous written
consent of all of the Directors without a meeting, if permissible under
the Investment Company Act.
(b) The Board of Directors may designate
certain powers from time to time a Principal Director who shall
preside at all meetings. Meetings of the Board of Directors may be called by
the Principal Director or by any two Directors, and may be held on such
date and at such time and place as the Board of Directors shall determine.
Each Director shall be entitled to receive written notice of the date, time
and place of such meeting within a reasonable time in advance of the
meeting. Notice need not be given to any Director who shall attend a meeting
without objecting to the lack of notice or who shall execute a written waiver of
notice with respect to the meeting. Directors may attend and
participate in any meeting by telephone except where in person attendance at a
meeting is required by the Investment Company Act. A majority of
the Directors shall constitute a quorum at any
meeting.
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3.3 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.
Meetings of the Partners may be called by the Board of
Directors or by Partners holding 25% or more of the total number
of votes eligible to be cast by all Partners, and may be held at such time, date
and place as the Board of Directors shall determine. The Board of
Directors shall arrange to provide written notice of the meeting, stating the date, time and
place of the meeting and the record date therefor, to each Partner entitled to vote at the meeting within
a reasonable time prior thereto. Failure
to receive notice of a meeting on the part of any Partner shall not affect the validity of any
act or proceeding of the meeting, so long as a
quorum shall be present at the meeting, except as otherwise required by
applicable law. Only matters set forth in the notice of a meeting may be
voted on by the Partners at a 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 shall constitute a quorum at
any meeting. In the absence of a quorum, a meeting of the Partners may be adjourned by action of a
majority of the Partners present in person or by proxy without
additional notice to the Partners. Except as otherwise required by any
provision of this Agreement or of the Investment Company
Act, (i) those candidates receiving a plurality of the votes cast at any
meeting of Partners shall be elected as Directors and (ii) all other actions of
the Partners taken at a meeting shall 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 such
meeting.
(b) Each Partner shall be entitled to cast at any
meeting of Partners a number of votes equivalent to such
Partner's Investment Percentage as of
the record date for such meeting. The Board
of Directors shall establish a record date not less than 10 nor more
than 60 days prior to the date of any meeting of Partners to determine eligibility to vote at
such meeting and the number of votes that each Partner will be entitled to cast thereat,
and shall maintain for each such record date
a list setting forth 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 proxy properly executed in writing by the Partner and filed with the Fund before or at <
font style="DISPLAY: inline; COLOR: #000000">the time of the meeting. 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
Fund at any time prior to
exercise of the proxy or if the Partner executing the proxy shall be present at
the meeting and decide to vote 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 forth the action taken,
are signed by Partners holding a majority of the total number of votes
eligible to be cast or such greater percentage as may be required in order
to approve such action.
3.4 CUSTODY OF ASSETS OF THE
FUND.
The physical possession of all funds,
Securities or other properties of the Fund shall at all times, be held, controlled
and administered by one or more custodians retained by the Fund in accordance with the requirements of
the Investment Company Act and the rules
thereunder.
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3.5 OTHER ACTIVITIES OF PARTNERS AND DIRECTORS.
(a) The Directors shall not be required to
devote full time to the affairs of the Fund, but shall devote such time as may
reasonably be required to perform their obligations
under this Agreement.
(b) Any Partner or Director, and any Affiliate of any
Partner or Director, 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, Partners of any Limited Partnership, or trustees
of any trust, or entering into any other commercial arrangements.
No Partner or Director shall have any rights in or to such activities of
any other Partner or Director, or any profits derived
therefrom.
3.6 DUTY OF CARE.
(a) A Director shall not be liable to
the Fund or to any of its Partners for any loss or damage occasioned by
any act or omission in the performance of his or her services under
this Agreement, unless it shall be determined by final judicial decision on
the merits from which there is no further right to appeal that such loss
is due to an act or omission of such Director constituting willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Director's office.
(b) Partners not in breach of any obligation
hereunder or under any agreement pursuant to which the
Partner subscribed for a Interest or Interests shall be liable to the Fund, any Partner or third parties only as
provided under the Delaware
Act.
3.7 INDEMNIFICATION.
(a) To the fullest extent permitted by law,
the Fund shall, subject to Section 3.7(b) hereof, indemnify each Director
(including for this purpose his or her executors, heirs,
assigns, successors or other legal representatives), against all losses,
claims, damages, liabilities, costs and expenses, including, but not limited
to, amounts paid in satisfaction of judgments, in compromise, or as fines
or penalties, and reasonable counsel fees, 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 such 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, by reason of being
or having been a Director of the Fund or the past or present performance of
services to the
Fund by such indemnitee, except to the extent
such loss, claim, damage, liability, cost or expense shall have been finally
determined in a decision on the merits in any such action, suit,
investigation or other proceeding to have been incurred or suffered by such
indemnitee by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of such
indemnitee's office. The rights of indemnification provided under this
Section 3.7 shall not be construed so as to provide for indemnification of a
Director for any liability (including liability under 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
such indemnification would be in violation of applicable law, but shall
be construed so as to effectuate the applicable provisions of this Section
3.7 to the fullest extent permitted by law.
11
(b) Expenses, including reasonable counsel
fees, so incurred by any such 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 Fund in advance of the final disposition of
any such action, suit, investigation or proceeding upon receipt
of an undertaking by or on behalf of such indemnitee to repay to the Fund amounts so paid if it shall ultimately be determined that
indemnification of such expenses is not authorized under Section 3.7 (a) hereof; provided, however, that (i)
such indemnitee shall provide security for
such undertaking, (ii) the
Fund shall be insured by or
on behalf of such indemnitee against losses arising by reason of such indemnitee's failure
to fulfill such undertaking, or (iii) a majority of the Directors
(excluding any Director who is either seeking advancement of expenses
hereunder 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 advancement of expenses
hereunder) or independent legal counsel in a written opinion shall
determine based on a review of readily available facts (as opposed to a full
trial-type inquiry) that there is reason to believe such indemnitee
ultimately will be entitled to indemnification.
(c) As to the disposition of any action,
suit, investigation or 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 shall have been brought, that an indemnitee is liable to
the Fund or its Partners by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of such indemnitee's office, indemnification shall be
provided pursuant to Section 3.7(a) hereof if (i) it is approved as in the best
interests of the
Fund by a
majority of the Directors (excluding any Director
who is either seeking indemnification hereunder 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 hereunder)
upon a determination based upon a review of readily available facts (as
opposed to a full trial-type inquiry) that such indemnitee acted in good faith
and in the reasonable belief that such actions were in the best interests
of the Fund and that such indemnitee is not liable to the Fund or its Partners by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of such
indemnitee's office, or (ii) the Board of Directors secures 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
such indemnification would not protect such indemnitee against any
liability to the
Fund or its Partners to which such 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 such
indemnitee's office.
(d) Any indemnification or advancement of
expenses made pursuant to this Section 3.7 shall not prevent the
recovery from any indemnitee of any such amount if such indemnitee
subsequently shall be determined in a decision on the merits in any action,
suit, investigation or proceeding involving the liability or expense that
gave rise to such indemnification or advancement of expenses to be liable
to the Fund or its Partners by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of such indemnitee's office. In (i) any suit brought by a
Director (or other person entitled to indemnification hereunder) to enforce a
right to indemnification under this Section 3.7 it shall be a defense that,
and (ii) in any suit in the name of the Fund to recover any indemnification or
advancement of expenses made pursuant to this Section 3.7
the Fund shall be entitled to recover
such expenses upon a final adjudication that,
the Director or other person claiming a right to indemnification
under this Section 3.7 has not met the applicable standard of conduct set forth
in this Section 3.7. In any such suit brought to enforce a right to
indemnification or to recover any indemnification or advancement of
expenses made pursuant to this Section 3.7, the burden of proving that the Director or other
person claiming a right to indemnification is not entitled to be
indemnified, or to any indemnification or advancement of
expenses, under this Section 3.7 shall be on the Fund (or any Partner acting derivatively or otherwise on
behalf of the
Fund or its Partners).
12
(e) An indemnitee may not satisfy any right
of indemnification or advancement of expenses granted in this
Section 3.7 or to which such indemnitee may otherwise be entitled
except out of the assets of the Fund, and no Partner shall be personally liable with respect
to any such claim for indemnification or advancement
of expenses.
(f) The rights of indemnification
provided hereunder shall 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 3.7 shall affect the power of the Fund to purchase and maintain
liability insurance on behalf of any Director or
other person.
3.8 FEES, EXPENSES AND
REIMBURSEMENT.
(a) So long as the Adviser provides Advisory Services to the Fund, it shall be entitled to receive fees
for such services as may be agreed to by the Adviser and the Fund pursuant to the Investment Advisory Agreement.
(b) The Board of Directors may cause
the Fund to compensate each Director for his or her services as
such. In addition, the Directors shall be reimbursed by the Fund for reasonable out-of-pocket expenses
incurred by them in performing their duties under
this Agreement.
(c) The Fund shall bear all of its own operating
expenses other than those specifically required to be
borne by the Adviser or another party pursuant to the Investment
Advisory Agreement or another agreement with the Fund. The Adviser shall be entitled to reimbursement from the Fund for any expenses that it pays on behalf
of the Fund.
(d) For purposes of maintaining the
Partners' Capital Accounts, the Fund’s organizational expenses shall be
allocated by the General
Partner among the Partners based on each Partner's Investment Percentage as of
the allocation date that next follows the
Initial Closing Date and the date organizational expenses are incurred.
These allocations will thereafter be adjusted, together with allocations of
any subsequently incurred organizational expenses, on subsequent
allocation dates through and including the date which is twelve
months after the Initial Closing Date.
(e) Subject to procuring any required
regulatory approvals, from time to time the Fund may, alone or in conjunction with other
accounts for which the Adviser, or any Affiliate of the Adviser, acts as general partner or investment
adviser, purchase Insurance in such amounts, from such insurers and on such
terms as the Board of Directors shall determine.
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ARTICLE IV.
TERMINATION OF STATUS OF ADVISER AND DIRECTORS, TRANSFERS AND
REPURCHASES
4.1 TERMINATION OF STATUS OF THE
ADVISER.
The status of the Adviser shall terminate if the Investment Advisory
Agreement with the
Adviser terminates and the Fund does not enter into a new Investment Advisory
Agreement with the
Adviser, effective as of the date of such
termination.
4.2 TERMINATION OF STATUS OF A
DIRECTOR.
The status of a Director shall terminate
if the Director (i) shall die; (ii) shall be adjudicated incompetent;
(iii) shall voluntarily withdraw as a Director (upon not less than 90 days'
prior written notice to the other Directors); (iv) shall be removed; (v)
shall be certified by a physician to be mentally or physically unable to perform
his duties hereunder; (vi) shall be declared bankrupt by a court with
appropriate jurisdiction, file a petition commencing a voluntary case under any
bankruptcy law or make an assignment for the benefit of creditors; (vii) shall
have a receiver appointed to administer the property or affairs of such
Director; or (viii) shall otherwise cease to be a Director of the Fund under the Delaware
Act.
4.3 REMOVAL OF THE
DIRECTORS.
Any Director may be removed either by
(a) the vote or written consent of
at least two-thirds (2/3) of the Directors
not subject to the removal vote or (b) the vote or written consent of
Partners holding not less than two-thirds (2/3)
of the total number of votes eligible to be
cast by all Partners.
4.4 TRANSFER OF INTERESTS OF PARTNERS.
(a) Interests of a Partner may be Transferred only (i) by
operation of law pursuant to the death, divorce,
bankruptcy, insolvency or dissolution of such Partner or (ii) with the written consent of the
Board of Directors (which may be withheld in its sole
discretion); provided, however, that the Board of Directors may not consent to
any Transfer other than a Transfer (i) in which the tax basis of the
Interests in the hands of the transferee
is determined, in whole or in part, by
reference to its tax basis in the hands of the transferor (e.g., certain
Transfers to affiliates, gifts and contributions to family partnerships),
(ii) to Partners of the Partner's immediate family (brothers, sisters,
spouse, parents and children), or (iii) a distribution from a qualified
retirement plan or an individual retirement account, unless it consults
with counsel to the
Fund and counsel to the Fund confirms that such Transfer will not
cause the Fund to be treated as a "publicly traded
partnership" taxable as a corporation.
(b) The Board of Directors may not consent
to a Transfer of Interests unless: (i) the person to whom such
Interests are Transferred is a person
whom the Fund believes is an accredited investor, as
such term is defined in Regulation D under the Securities Act of
1933 or any successor thereto; and (ii) all of the Interests of the Partner are Transferred to a single
transferee or, after the Transfer of Interests, the balance of the Capital Account of
each of the transferee and transferor is not
less than $25,000. Any transferee that acquires Interests by operation of law as the result of
the death, divorce, bankruptcy, insolvency or
dissolution of a Partner or otherwise, shall be entitled to the allocations and
distributions allocable to the Interest or Interests so acquired and to Transfer such
Interest or Interests in accordance with the terms of this Agreement, but
shall not be entitled to the other rights of a Partner unless and until such transferee
becomes a substituted
Partner. If a Partner transfers Interests with the approval of the Board
of Directors, the Board of Directors shall
promptly take all necessary actions so that the transferee to whom such
Interests are transferred is admitted
to the Fund as a Partner. Each Partner effecting a Transfer and
its transferee agree to pay all expenses,
including attorneys' and accountants' fees, incurred by the Fund in connection with such
Transfer.
14
(c) Each Partner shall indemnify and hold harmless
the Fund, the Directors, the Adviser, each other Partner and any Affiliate of the foregoing against all losses,
claims, damages, liabilities, costs and expenses (including legal or other
expenses incurred in investigating or defending against any such losses,
claims, damages, liabilities, costs and expenses or any judgments, fines and
amounts paid in settlement), joint or several, to which such persons may
become subject by reason of or arising from (i) any Transfer made by such
Partner in violation of this Section
4.4 and (ii) any misrepresentation by such
Partner in connection with any such Transfer.
4.5 REPURCHASE OF INTERESTS.
(a) Except as otherwise provided in this
Agreement, no Partner or other person holding a Interest or Interests shall have the right to withdraw or
tender to the Fund for repurchase that person's
Interests or any portion thereof. The Board of Directors from time to
time, in its complete and exclusive discretion and on such terms and
conditions as it may determine, may cause the Fund to repurchase Interests or portions thereof pursuant to
written tenders following the one year anniversary of an
initial capital contribution (the “Lock-Up Period”). In determining whether to cause
the Fund to repurchase Interests or portions thereof pursuant to written tenders, the
Board of Directors shall consider the recommendation of the Adviser, and shall also consider
the following factors, among
others:
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1) whether any
Partners have requested to tender
Interests or portions thereof to the Fund;
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(2) the liquidity of
the Fund's
assets;
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(3) the investment
plans and working capital requirements of the Fund;
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(4) the relative
economies of scale with respect to the size of the Fund;
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(5) the history of
the Fund in repurchasing Interests or portions thereof;
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(6) the
availability of information as to the value of the Fund’s interest in the
Investment Funds;
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(7) the economic
condition of the securities markets;
and
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(8) the anticipated tax
consequences of any proposed repurchases of Interests or portions
thereof.
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(b) The Adviser may tender its Interests or any portion thereof as a Partner under Section 4.5(a) hereof.
(c) The Board of Directors, in its sole
discretion, may require the
Fund to repurchase, and any
Partner or any person acquiring a Interest or Interests from or through a Partner, to sell, a Interest or Interests for any reason whatsoever.
(d) Repurchases of Interests or portions thereof by the Fund shall be payable promptly after the date of each
such repurchase or, in the case of an offer by the Fund to repurchase Interests, promptly after the
expiration date of such repurchase offer in
accordance with the terms of the Fund's repurchase offer and the repurchase
procedures adopted by the Board of Directors, as the same may be amended
from time to time. Payment of the purchase price of Interests may consist of cash or a promissory
note, which need not bear interest. Notwithstanding
anything in the foregoing to the contrary, the Board of Directors, in its
discretion, may pay all or any portion of the repurchase price in
marketable or non-marketable Securities (or any combination of Securities and
cash) having a value, determined as of the date of repurchase, equal to the
amount to be repurchased. All repurchases of Interests shall be subject to any and all
conditions as the Board of Directors may impose in its
sole discretion. The amount due to any Partner whose Interests are repurchased shall be equal to the
value of such
Partner's Capital Account
or portion thereof, as applicable, as of the effective date of repurchase, after
giving effect to all allocations to be made to such Partner's Capital Account as of the close of
business on such date.
ARTICLE V.
CAPITAL
5.1 CONTRIBUTIONS TO
CAPITAL.
(a) The minimum initial contribution of
each Partner to the capital of the Fund shall be such amount as the Board of
Directors, in its discretion, may determine from time to
time, but in no event shall be less than $10,000,000.00. There shall be no minimum initial
contribution for the General Partner, its officers, directors, and employees and
affiliates thereof. There shall be no minimum initial contribution
for Persimmon Growth
Partners Investor Fund or
Persimmon Growth Partners
Broker-Dealer Fund. The amount of the initial contribution
of each Partner on the Initial Closing Date shall be recorded
on the books and records of the Fund upon acceptance as a purchase of
Interests at the then-existing net asset value per
Interest. The Directors shall not be entitled to make
voluntary contributions of capital to the Fund as Directors of the Fund, but may make voluntary contributions to the capital of
the Fund as Partners. The Adviser may make voluntary contributions to the
capital of the
Fund as a Partner.
(b) The Partners may make additional contributions to
the capital of the
Fund of at least
$1,000,000.00, effective as of such times as the
Board of Directors in its discretion may permit,
subject to the limitations applicable to the admission of
Partners pursuant to Section 15 hereof, but no Partner shall be obligated to make any
additional contribution to the capital of
the Fund except to the extent provided
in Section 5.6 hereof. There shall be no minimum
additional contribution for the General Partner, its officers, directors, and
employees and affiliates thereof. There shall be no minimum
additional contribution for Persimmon Growth Partners Investor
Fund or Persimmon Growth Partners Broker-Dealer Fund.
16
(c) Except as otherwise permitted by the
Board of Directors, (i) initial and any additional contributions
to the capital of the
Fund by any Partner shall be payable in cash or in such
Securities that the Board of Directors, in its absolute discretion,
may agree to accept on behalf of the Fund, and (ii) initial and any additional
contributions in cash shall be payable in readily available funds at
the date of the proposed acceptance of the contribution. The Fund shall charge each Partner making a contribution in Securities to the
capital of the
Fund such amount as
may be determined by the Board of Directors
not exceeding 2% of the value of such contribution in order to reimburse
the Fund for any costs incurred by the Fund by reason of accepting such Securities,
and any such charge shall be due and payable by the
contributing Partner in full at the time the contribution to the capital of
the Fund to which such charges relate
is due. The value of contributed Securities
shall be determined in accordance with Section 7.3 hereof as of the date
of contribution.
(d) The minimum initial and additional
contributions set forth in (a) and (b) of this Section 5.1 may be reduced by
the General
Partner in accordance with such schedule of
reductions as may be adopted by the General Partner it its sole
discretion.
5.2 RIGHTS OF PARTNERS TO CAPITAL.
No Partner shall be entitled to interest on any
contribution to the capital of the Fund, nor shall any Partner be entitled to the return of any
capital of the
Fund except (i) upon the
repurchase by the
Fund at the discretion
of The Board of Directors of a Interest or all of such Partner's Interests pursuant to Section 4.5 hereof, (ii) pursuant to the
provisions of Section 5.6(c) hereof or (iii) upon the liquidation of
the Fund's assets pursuant to Section
6.2 hereof. No Partner shall be liable for the return of any
amounts distributed under this Section 5.2. No Partner shall have the right to require
partition of the
Fund's property or to
compel any sale or appraisal of the Fund's assets.
5.3 CAPITAL
ACCOUNTS.
(a) The Fund shall maintain a separate Capital
Account for each
Partner.
(b) Each Partner's Capital Account shall have an initial
balance equal to the amount of cash and the value of
any Securities (determined in accordance with Section 7.3 hereof) (net
of any liabilities secured by such Securities that the Fund is considered to assume or take subject
to under Section 752 of the Code)
constituting such Partner's initial contribution to the capital of
the Fund.
(c) Each Partner's Capital Account shall be increased by
the sum of (i) the amount of cash and the value of any
Securities (determined in accordance with Section 7.3 hereof) (net
of any liabilities secured by such Securities that the Fund is considered to assume or take subject
to under Section 752 of the Code)
constituting additional contributions by such Partner to the capital of the Fund permitted pursuant to Section
5.1 hereof, plus (ii) all amounts credited
to such Partner's Capital Account pursuant to Sections 5.4 through
5.6.
17
(d) Each Partner's Capital Account shall be reduced by
the sum of (i) the amount of any repurchase of any
Interests of such Partner or distributions to such Partner pursuant to Sections 4.5, 5.8 or 6.2
hereof which are not reinvested (net of any liabilities
secured by any asset distributed that such Partner is deemed to assume or take subject to
under Section 752 of the Code), plus (ii) any amounts debited
against such Capital Account pursuant to Sections 5.4 through 5.6
hereof.
5.4 ALLOCATION OF NET PROFIT AND NET
LOSS.
As of the last day of each Allocation
Period, any Net Profit or Net Loss for the Allocation Period shall be
allocated among and credited to or debited against the Capital Accounts of the
Partners in accordance with their
respective Investment Percentages for such
Allocation Period.
5.5 ALLOCATION OF CERTAIN
EXPENDITURES.
Except as otherwise provided for in this
Agreement and unless prohibited by the Investment Company Act, any
expenditures payable by the
Fund, to the extent determined by the Board of
Directors 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, shall be charged to only those
Partners on whose behalf such payments are made or
whose particular circumstances gave rise to such payments. Such charges shall be
debited from the Capital Accounts of such Partners as of the close of the Allocation
Period during which any such items were paid or accrued by
the Fund.
5.6 RESERVES.
(a) Appropriate reserves may be created,
accrued and charged against Net Assets and proportionately against
the Capital Accounts of the Partners for contingent liabilities, if any, as
of the date any such contingent liability becomes known to the
Adviser or the Board of Directors, such reserves to be in the
amounts that the Board of Directors in its sole discretion deems necessary
or appropriate. The Board of Directors may increase or reduce any
such reserves from time to time by such amounts as the Board of Directors
in its sole discretion deems necessary or appropriate. The amount of
any such reserve, or any increase or decrease therein, shall be
proportionately charged or credited, as appropriate, to the Capital Accounts of
those parties who are Partners at the time when such reserve is created,
increased or decreased, as the case may be; provided, however, that if any
such individual reserve item, adjusted by any increase therein,
exceeds the lesser of $1,000,000 or 1% of the aggregate value of the Capital
Accounts of all such Partners, the amount of such reserve, increase, or decrease
shall instead be charged or credited to those parties who were Partners at the time, as determined by the
Board of Directors 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 at that time.
(b) If at any time an amount is paid or
received by the
Fund (other than contributions to the capital of
the Fund, distributions or repurchases of Interests or portions thereof) and such amount
exceeds the lesser of $1,000,000 or 1% of the aggregate value of the
Capital Accounts of all Partners at the time of payment or receipt and
such amount was not accrued or reserved for but would
nevertheless, in accordance with the Fund’s accounting practices, be treated as
applicable to one or more prior Allocation Periods, then such
amount shall be proportionately charged or credited, as appropriate, to those
parties who were Partners during such prior Allocation Period or
Periods.
18
(c) If any amount is required by paragraph
(a) or (b) of this Section 5.6 to be charged or credited to a party
who is no longer a Partner, such amount shall be paid by or to such
party, as the case may be, in cash, with interest from the date on which the
Board of Directors determines that such charge or credit is required. In the
case of a charge, the former Partner shall be obligated to pay the amount of
the charge, plus interest as provided above, to the Fund on demand; provided, however, that (i)
in no event shall a former Partner be obligated to make a payment
exceeding the amount of such Partner's Capital Account at the time to which
the charge relates; and (ii) no such demand shall
be made after the expiration of three years since the date on which such
party ceased to be a Partner. To the extent that a former Partner fails to pay to the Fund, in full, any amount required to be charged to such
former Partner pursuant to paragraph (a) or (b), whether due to the expiration of the
applicable limitation period or for any other reason
whatsoever, the deficiency shall 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.
5.7 TAX ALLOCATIONS.
For each Taxable Year, items of income,
deduction, gain, loss or credit shall be allocated for income tax
purposes among the Partners in such manner as to reflect equitably amounts credited or
debited to each Partner's Capital Account for the current and prior fiscal
years (or relevant portions thereof). Allocations under this Section 5.7 shall
be made pursuant to the principles of Sections 704(b) and 704(c) of the Code and in conformity with
Regulations Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(4)(i) and 1.704-3(e) promulgated thereunder, as applicable, or the
successor provisions to such Section and Regulations. Notwithstanding anything to
the contrary in this Agreement, there shall be allocated to the Partners such gains or income as shall be
necessary to satisfy the "qualified income offset"
requirement of Treasury Regulation Section 1.704-1(b)(2)(ii)(d).
If the Fund realizes net capital gains (including
net short-term capital gains) for Federal income tax purposes
("gains") for any Taxable Year during or as of the end of which all the
Interests of one or more Positive Basis
Partners (as hereinafter defined) are repurchased by
the Fund pursuant to Article IV, the Board of Directors, in its sole discretion, may allocate
such net gains as follows: (i) to allocate such gains among such Positive Basis
Partners, PRO RATA in proportion to
the respective Positive Basis (as
hereinafter defined) of each such Positive Basis Partner, until either the full amount of such
net gains shall have been so allocated or the Positive Basis of each
such Positive Basis Partner shall have been eliminated and (ii) to allocate any
net gains not so allocated to Positive Basis Partners to the other Partners in such manner as shall equitably
reflect the amounts allocated to such Partners' Capital Accounts pursuant to Section
5.4.
As used herein, (i) the term "Positive
Basis" shall mean, with respect to any Partner and as of any time of calculation, the
excess of the amount such
Partner is entitled to
receive upon repurchase of his Interests or liquidation of the Fund, over such Partner's "adjusted tax basis," for Federal
income tax purposes, in its Interests as of such time (determined without
regard to any adjustments made to such "adjusted tax
basis" by reason of any transfer or assignment of such Interests, including by reason of death, and
without regard to such Partner's share of the liabilities of
the Fund under Section 752 of the Code), (ii) the term "Positive Basis
Partner" shall mean any Partner whose Interests are repurchased by the Fund and who has Positive Basis as of the
effective date of such repurchase, but such
Partner shall cease to be a Positive
Basis Partner at such time as it shall have received
allocations pursuant to clause (i) of the second paragraph of this Section
5.7 equal to its Positive Basis as of the effective date of such repurchase,
(iii) the term "Negative Basis" means, with respect to any Partner and as of any time of calculation the
excess of such
Partner's "adjusted tax
basis" in its Interests (determined without regard to
any adjustments made to such adjusted tax
basis by reason of any transfer or assignment of such Interests, including by reason of death and
without regard to such Partner's share of the liabilities of
the Fund under section 752 of the Code) over the amount which such
Partner is entitled to receive upon
repurchase of his Interests or liquidation of the Fund, and (iv) the term "Negative
Basis Partner" shall mean any Partner whose Interests are repurchased by the Fund and who has a Negative Basis as of the effective
date of such repurchase, but such Partner shall cease to be a Negative Basis
Partner at such time if it shall
have received allocations equal to such
Partner's Negative Basis as of the
effective date of the
repurchase.
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5.8 DISTRIBUTIONS.
The Board of Directors, in its sole
discretion, may authorize the Fund to make distributions in cash at any
time to all of the Partners on a pro rata basis in accordance with the
Partners' Investment
Percentages.
5.9 WITHHOLDING.
(a) The Board of Directors may withhold and
pay over to the Internal Revenue Service (or any other relevant
taxing authority) taxes from any distribution to any Partner to the extent required by the Code or
any other applicable law.
(b) For purposes of this Agreement, any
taxes so withheld by the
Fund with respect to any
amount distributed by the
Fund to any Partner shall be deemed to be a distribution or
payment to such Partner, reducing the amount otherwise distributable to
such Partner pursuant to this Agreement and reducing the Capital
Account of such Partner. If the amount of such taxes is greater than any such
distributable amounts, then such Partner and any successor to such Partner's Interests shall pay to the Fund as a contribution to the capital of the Fund, upon demand of the Board of Directors,
the amount of such
excess.
(c) The Board of Directors 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. 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 shall furnish the Board of Directors
with such information and forms as such
Partner may be required to complete
where necessary to comply with any and all
laws and regulations governing the obligations of withholding tax agents.
Each Partner represents and warrants that any such information and forms
furnished by such Partner shall be true and accurate and agrees to indemnify
the Fund and each of the Partners from any and all damages, costs and
expenses resulting from the filing of inaccurate or incomplete information or
forms relating to such withholding taxes.
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ARTICLE VI.
DISSOLUTION AND
LIQUIDATION
6.1 DISSOLUTION.
The Fund shall be dissolved:
(a) upon the affirmative vote to dissolve
the Fund by: (i) the Board of Directors or (ii) Partners holding at least two-thirds (2/3) of
the total number of votes eligible to be
cast by all Partners;
(b) upon the failure of Partners to elect a successor Director at
a meeting called by the Adviser in accordance with Section
2.6(c) hereof when no Director remains to
continue the business of the Fund;
(c) upon the expiration of any two year
period that commences on the date on which any Partner has submitted a written notice to
the Fund requesting to tender its Interests for repurchase by the Fund if such Interests have not been repurchased by
the Fund; or
(d) as required by operation of
law.
Dissolution of the Fund shall be effective on the later of the
day on which the event giving rise to the
dissolution shall occur or the conclusion of any applicable 60 day period during
which the Board of Directors and Partners may elect to continue the business of
the Fund as provided above, but the Fund shall not terminate until the assets of
the Fund have been liquidated in accordance with Section 6.2 hereof and
the Certificate has been canceled.
6.2 LIQUIDATION OF
ASSETS.
(a) Upon the dissolution of the Fund as provided in Section 6.1 hereof, the Board of Directors shall
promptly appoint the Administrator as the liquidator and the
Administrator shall liquidate the business and
administrative affairs of the Fund, except that if the Board of Directors
does not appoint the Administrator as the liquidator or the Administrator 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 shall promptly liquidate
the business and administrative affairs of
the Fund. Net Profit and Net Loss during the period of liquidation shall
be allocated pursuant to Section 5.4 hereof. The proceeds from liquidation
(after establishment of appropriate reserves for contingencies in such
amount as the Board of Directors or liquidator shall deem appropriate in its
sole discretion as applicable) shall be distributed in the following
manner:
(1) the debts of the Fund, other than debts, liabilities
or obligations to Partners, and the expenses of liquidation
(including legal and accounting expenses incurred
in connection therewith), up to and including the date that distribution
of the Fund's assets to the Partners has been completed, shall first be
paid on a pro rata basis;
(2) such debts, liabilities or
obligations as are owing to the Partners shall next be paid in their order of
seniority and on a pro rata basis; and
21
(3) the Partners shall next be paid on a pro rata basis
in accordance with their respective Capital
Accounts after giving effect to all allocations to be made to such
Partners' Capital Accounts for the Allocation Period ending as of the
close of business on the date of the distributions under this Section
6.2(a)(3).
(b) Anything in this Section 6.2 to the
contrary notwithstanding, upon dissolution of the Fund, the Board of Directors or other
liquidator may distribute ratably in kind any assets of
the Fund; provided, however, that if any in-kind distribution is to
be made (i) the assets distributed in kind shall be valued pursuant to
Section 7.3 hereof 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) above, and (ii) any profit or
loss attributable to property distributed
in-kind shall be included in the Net Profit or Net Loss for the Allocation
Period ending on the date of such distribution.
ARTICLE VII.
ACCOUNTING, VALUATIONS AND BOOKS AND
RECORDS
7.1 ACCOUNTING AND
REPORTS.
(a) The Fund shall adopt for tax accounting purposes
any accounting method that the Board of Directors shall
decide in its sole discretion is in the best interests of the Fund. The Fund’s accounts shall be maintained in U.S. currency.
(b) As soon as practicable after the end of
each Taxable Year, the
Fund shall furnish to each
Partner such information regarding
the operation of the Fund and such Partner's Interests as is necessary for Partners to complete Federal, state and local
income tax or information returns and any other tax information
required by Federal, state or local law.
(c) Except as otherwise required by the
Investment Company Act, or as may otherwise be permitted by rule,
regulation or order, within 60 days after the close of the period for which
a report required under this Section 7.1(c) is being made, the Fund shall furnish to each Partner a quarterly report and an annual report
containing the information required by such rule, regulation or
order. The Fund shall cause financial statements contained in each
annual report furnished hereunder to be accompanied by a certificate of
independent public accountants based upon an audit performed in accordance
with generally accepted accounting principles. The Fund may furnish to each Partner such other periodic reports as it deems necessary or
appropriate in its discretion.
7.2 DETERMINATIONS BY THE BOARD OF
DIRECTORS.
(a) All matters concerning the
determination and allocation among the Partners of the amounts to be determined and
allocated pursuant to Article V hereof, including any taxes thereon and
accounting procedures applicable thereto, shall be determined by the
Board of Directors unless specifically and expressly otherwise provided for by
the provisions of this Agreement or required by law, and such determinations
and allocations shall be final and binding on all the Partners.
(b) The Board of Directors may make such
adjustments to the computation of Net Profit, Net Loss or
any components comprising either of the foregoing as it considers
appropriate to reflect fairly and accurately the financial results of the Fund and the intended allocation
thereof among the Partners.
22
7.3 VALUATION OF
ASSETS.
(a) Except as may be required by the
Investment Company Act, the Board of Directors shall value or have valued
any Securities or other assets and liabilities of the Fund as of the close of business on the last
day of each Allocation Period in accordance
with such valuation procedures as shall be established from time to time
by the Board of Directors and which conform to the requirements of the
Investment Company Act. In determining the value of the assets of the Fund, no value shall be placed on
the goodwill or name of the Fund, or the office records, files,
statistical data or any similar intangible assets of
the Fund not normally reflected in the Fund's accounting records, but there shall
be taken into consideration 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 such valuation date.
(b) The Fund will value interests in Investment Funds at fair value, which ordinarily will be the
value determined by their investment managers in accordance with the policies
established by the relevant
Investment Fund.
(c) The value of Securities and other
assets of the
Fund and the net worth of the Fund as a whole determined pursuant to this
Section 7.3 shall be conclusive and binding on all
of the Partners and all parties claiming through or under
them.
ARTICLE VIII.
MISCELLANEOUS
PROVISIONS
8.1 AMENDMENT OF LIMITED 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 (i) the Board of Directors or (ii) a majority of the
outstanding Interests of the Fund.
(b) Any amendment that
would:
(1) increase the obligation of a
Partner to make any contribution to the capital of the Fund;
(2) reduce the Capital Account of a
Partner other than in accordance with Article V;
or
(3) modify the events causing the
dissolution of the
Fund; may be made only if (i) the written consent
of each Partner adversely affected thereby is obtained prior to
the effectiveness thereof or (ii) such amendment does not become
effective until (a) each Partner has received written notice of such
amendment and (b) any Partner objecting to such amendment has been
afforded a reasonable opportunity (pursuant to such procedures as may be
prescribed by the Board of Directors) to tender its Interests for repurchase by the Fund.
23
(c) The Board of Directors shall cause
written notice to be given of any amendment to this Agreement to each
Partner, which notice shall set forth (i) the text of the amendment or
(ii) a summary thereof and a statement that the text thereof will be
furnished to any Partner upon request.
(d) All actions, votes or consents required
or permitted to be taken by the Limited Partners will be taken by the written
consent of Limited Partners holding in aggregate not less than a majority of the outstanding Interests
of the Fund. Notwithstanding the foregoing, for
purposes of obtaining any such consent as to any matter proposed by the General
Partner, the General Partner may, in the notice seeking consent of Limited
Partners, require a response within a specified period (which will not be less
than fifteen days) and failure to give the General Partner written notice of
opposition to the proposed action within that period will constitute a vote and
consent to approve the proposed action. Except as otherwise expressly provided
in the proposal for an action, that action will be effective immediately after
the required signatures have been obtained or, if applicable, the expiration of
the period within which responses were required, if that requirement was imposed
and there were not votes cast against such action in the amount necessary to
prevent the action from becoming effective.
8.2 SPECIAL POWER OF
ATTORNEY.
(a) Each Partner hereby irrevocably makes, constitutes
and appoints each Director, acting severally, and any
liquidator of the
Fund's assets appointed pursuant to Section 6.2 hereof
with full power of substitution, the true and lawful representatives and
attorneys-in-fact of, and in the name, place and stead of, such
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 that
complies with the provisions of this Agreement (including
the provisions of Section 8.1 hereof);
(2) any amendment to the Certificate
required because this Agreement is amended, including, without
limitation, an amendment to effectuate any change in the
Partnership of the Fund; and
(3) all such other instruments,
documents and certificates that, in the opinion of legal counsel to
the Fund, 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
Fund shall
determine to do business, or any political subdivision or agency thereof, or that such legal counsel may
deem necessary or appropriate to effectuate, implement and continue
the valid existence and business of the Fund 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
Fund without such Partner's consent. If an amendment to the
Certificate or this Agreement or any action by or with respect to
the Fund is taken in the manner contemplated by this Agreement, each
Partner agrees that,
notwithstanding any objection that such Partner may assert with respect to such action,
the attorneys-in-fact appointed hereby are
authorized and empowered, with full power of substitution, to exercise the
authority granted above in any manner that may be necessary or
appropriate to permit such 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 Fund.
24
(c) This power-of-attorney is a special
power-of-attorney and is coupled with an interest in favor of
each of the Directors and as such:
(1) shall be irrevocable and continue in
full force and effect notwithstanding the subsequent death or
incapacity of any party granting this power-of-attorney,
regardless of whether the
Fund or Board of Directors shall have had notice
thereof; and
(2) shall survive the delivery of a
Transfer by a Partner of the whole or any portion of such
Partner's Interests, except that where the transferee thereof has been approved by
the Board of Directors for admission to the Fund as a substituted Partner, this power-of-attorney given by the
transferor shall survive the delivery of such assignment for the sole purpose
of enabling the Board of Directors to execute, acknowledge and
file any instrument necessary to effect such
substitution.
8.3 NOTICES.
Notices that may be or are required to
be provided under this Agreement shall be made, if to a Partner, by regular mail, or if to the Board of
Directors or the Adviser, by hand delivery, registered or
certified mail return receipt requested, commercial courier
service, telex or telecopier, and shall be addressed to the respective parties
hereto at their addresses as set forth in the books and records of the Fund. Notices shall 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, telex or telecopier. 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 shall be binding upon and
inure to the benefit of the parties hereto and their respective
heirs, successors, assigns, executors, trustees or other legal representatives,
but the rights and obligations of the parties hereunder
may not be Transferred or delegated except as provided in this Agreement and
any attempted Transfer or delegation thereof that is not made pursuant to the
terms of this Agreement shall be void.
8.5 APPLICABILITY OF INVESTMENT COMPANY
ACT AND FORM N-2.
The parties hereto acknowledge that this
Agreement is not intended to, and does not, set forth the substantive
provisions contained in the Investment Company Act and the Form N-2 that affect
numerous aspects of the conduct of the Fund’s business and of the rights, privileges
and obligations of the Partners. Each provision of this Agreement shall
be subject to and interpreted in a manner consistent with the applicable
provisions of the Investment Company Act and the Form N-2.
25
8.6 CHOICE OF LAW;
ARBITRATION.
(a) Notwithstanding the place where this
Agreement may be executed by any of the parties hereto, the parties
expressly agree that all the terms and provisions hereof shall be construed
under the laws of the State of Delaware, including the Delaware Act without
regard to the conflict of law principles of such
State.
(b) UNLESS OTHERWISE AGREED IN WRITING,
EACH PARTNER AGREES TO SUBMIT ALL CONTROVERSIES ARISING BETWEEN
PARTNERS OR ONE OR MORE PARTNERS AND THE COMPANY TO ARBITRATION IN ACCORDANCE
WITH THE PROVISIONS SET FORTH BELOW AND UNDERSTANDS
THAT:
(1) ARBITRATION IS FINAL AND BINDING ON
THE PARTIES;
(2) THEY ARE WAIVING THEIR RIGHT TO SEEK
REMEDIES IN COURT, INCLUDING THE RIGHT TO A JURY
TRIAL;
(3) PRE-ARBITRATION DISCOVERY IS
GENERALLY MORE LIMITED AND DIFFERENT FROM COURT
PROCEEDINGS;
(4) THE ARBITRATOR'S AWARD IS NOT
REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING AND A
PARTY'S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULINGS BY ARBITRATORS
IS STRICTLY LIMITED; AND
(5) THE PANEL OF ARBITRATORS WILL
TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR ARE AFFILIATED
WITH THE SECURITIES INDUSTRY.
(c) ALL CONTROVERSIES THAT MAY ARISE AMONG
PARTNERS AND ONE OR MORE PARTNERS AND THE COMPANY CONCERNING THIS
AGREEMENT SHALL BE DETERMINED BY ARBITRATION IN BERWYN, PENNSYLVANIA IN ACCORDANCE WITH THE THEN
EXISTING RULES OF THE AMERICAN ARBITRATION
ASSOCIATION TO THE FULLEST EXTENT PERMITTED BY LAW. JUDGMENT ON ANY AWARD
OF ANY SUCH ARBITRATION MAY BE ENTERED IN THE COURTS OF THE COMMONWEALTH OF PENNSYLVANIA OR IN ANY OTHER COURT HAVING
JURISDICTION OF THE PERSON OR PERSONS AGAINST WHOM SUCH
AWARD IS RENDERED. ANY NOTICE OF SUCH ARBITRATION OR FOR THE CONFIRMATION
OF ANY AWARD IN ANY ARBITRATION SHALL BE SUFFICIENT IF GIVEN IN
ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT. EACH PARTNER AGREES THAT THE DETERMINATION OF THE
ARBITRATORS SHALL BE BINDING AND CONCLUSIVE UPON
THEM.
(d) NO PARTNER SHALL BRING A PUTATIVE OR CERTIFIED
CLASS ACTION TO ARBITRATION, NOR SEEK TO ENFORCE ANY
PRE-DISPUTE ARBITRATION AGREEMENT AGAINST ANY PERSON WHO HAS INITIATED IN
COURT A PUTATIVE CLASS ACTION; OR WHO IS A PARTNER OF A PUTATIVE CLASS WHO HAS NOT OPTED
OUT OF THE CLASS WITH RESPECT TO ANY CLAIMS ENCOMPASSED BY THE
PUTATIVE CLASS ACTION UNTIL: (I) THE CLASS CERTIFICATION IS DENIED; OR
(II) THE CLASS IS DECERTIFIED; OR (III) THE PARTNER IS EXCLUDED FROM THE CLASS BY THE
COURT. SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE
SHALL NOT CONSTITUTE A WAIVER OF ANY RIGHTS UNDER THIS AGREEMENT EXCEPT TO
THE EXTENT STATED HEREIN.
26
8.7 NOT FOR BENEFIT OF
CREDITORS.
The provisions of this Agreement are
intended only for the regulation of relations among past, present and future
Partners, Directors and the Fund. This Agreement is not intended for the
benefit of non-Partner creditors and no rights are granted to non-Partner creditors under this
Agreement.
8.8 CONSENTS.
Any and all consents, agreements or
approvals provided for or permitted by this Agreement shall be in writing and a
signed copy thereof shall be filed and kept with the books of the Fund.
8.9 MERGER AND
CONSOLIDATION.
(a) The Fund may merge or consolidate with or into
one or more limited liability companies formed under
the Delaware Act or other business entities pursuant to an agreement of
merger or consolidation that has been approved in the manner contemplated by
Section 18-209(b) of the Delaware Act.
(b) Notwithstanding anything to the
contrary contained elsewhere in this Agreement, an agreement of merger
or consolidation approved in accordance with Section
18-209(b) of the Delaware Act may, to the
extent permitted by Section 18-209(f) of the
Delaware Act, (i) effect any amendment to this Agreement, (ii) effect
the adoption of a new limited liability company agreement for
the Fund if it is the surviving or resulting Limited Partnership in the
merger or consolidation, or (iii) provide that the Limited
Partnership agreement of any other constituent Limited Partnership to the
merger or consolidation (including a Limited Partnership formed
for the purpose of consummating the merger or
consolidation) shall be the limited liability company agreement of the surviving or
resulting Limited Partnership.
8.10 PRONOUNS.
All pronouns shall be deemed to refer to
the masculine, feminine, neuter, singular or plural, as the identity of
the person or persons, firm or corporation may require in the context
thereof.
8.11
CONFIDENTIALITY.
(a) A Partner may obtain from the Fund such information regarding the affairs of the Fund as is just and reasonable under the
Delaware Act, subject to reasonable standards
(including standards governing what information and documents are to be
furnished, at what time and location and at whose expense) established by the
Board of Directors.
(b) Each Partner covenants that, except as required by
applicable law or any regulatory body, it will not
divulge, furnish or make accessible to any other person the name and/or address
(whether business, residence or mailing) of any Partner (collectively, "Confidential
Information") without the prior written consent of the Board
of Directors, which consent may be withheld in its sole
discretion.
27
(c) Each Partner recognizes that in the event that this
Section 8.11 is breached by any Partner or any of its principals, partners,
Partners, directors, officers, employees or agents
or any of its affiliates, including any of such affiliates'
principals, partners, Partners, directors, officers, employees or agents,
irreparable injury may result to the non-breaching Partners and the Fund. Accordingly, in addition to any
and all other remedies at law or in equity
to which the non-breaching Partners and the Fund may be entitled, such Partners shall also have 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 therewith. In the event that any
non-breaching Partner or the Fund determines that any of the other
Partners or any of its principals, partners, Partners, directors, officers, employees or
agents or any of its affiliates, including any of such
affiliates' principals, partners, Partners, 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 pursue in a court of appropriate jurisdiction such
injunctive relief.
8.12 CERTIFICATION OF NON-FOREIGN
STATUS.
Each Partner or transferee of Interests from a Partner shall certify, upon admission to the Fund and at such other times thereafter as
the Board of Directors may request, whether such
Partner is a "United States Person" within the meaning of Section 7701(a)(30) of the Code on forms to be provided
by the Fund, and shall notify the Fund within 30 days of any change in
such Partner's status. Any Partner who shall fail to provide such
certification when requested to do so by the Board of
Directors may be treated as a non-United States Person for purposes of U.S. federal tax
withholding.
8.13 SEVERABILITY.
If any provision of this Agreement is
determined by a court of competent jurisdiction not to be enforceable in
the manner set forth in this Agreement, each Partner agrees that it is the intention of the
Partners that such provision should be enforceable to the maximum
extent possible under applicable law. If any
provisions of this Agreement are held to be invalid or unenforceable, such
invalidation or unenforceability shall not affect the validity or enforceability of
any other provision of this Agreement (or portion
thereof).
8.14 FILING OF
RETURNS.
The Board of Directors or its designated
agent shall prepare and file, or cause the Administrator or accountants
of the Fund to prepare and file, a Federal information tax return in
compliance with Section 6031 of the Code and any required state and local income tax
and information returns for each Taxable Year of the Fund.
8.15 TAX MATTERS
PARTNER.
(a) The General Partner shall be designated on the Fund's annual Federal income tax return, and
have full powers and responsibilities, as the Tax Matters
Partner of the
Fund for purposes
of Section 6231(a)(7) of the Code. Should any Partner be designated as the Tax Matters Partner for the Fund pursuant to Section 6231(a)(7) of the Code, it
shall, and each Partner hereby does, to the fullest extent
permitted by law, delegate to a Director selected by
the Board of Directors all of its rights, powers and authority to act as
such Tax Matters Partner and hereby constitutes and appoints such Director
as its true and lawful attorney-in-fact, with power to act in
its name and on its behalf, including the power to act through such
agents or attorneys as it shall elect or appoint, to receive notices, to
make, execute and deliver, swear to, acknowledge and file any and all
reports, responses and notices and to do any and all things required or
advisable, in the Director's judgment, to be done by such a Tax Matters Partner.
Any Partner designated as the Tax Matters Partner for the Fund under Section 6231(a)(7) of the Code shall be indemnified and held harmless by
the Fund from any and all liabilities and obligations that arise
from or by reason of such designation.
28
(b) Each person (for purposes of this
Section 8.15, called a "Pass-Thru Partner") that holds or controls an interest as
a Partner on behalf of, or for the benefit of,
another person or persons, or which Pass-Thru Partner is beneficially owned (directly or
indirectly) by another person or persons, shall, within 30 days
following receipt from the Tax Matters Partner of any notice, demand,
request for information or similar document, convey such notice or other
document in writing to all holders of beneficial interests in the Fund holding such interests through
such Pass-Thru Partner. In the event the Fund shall be the subject of an income tax audit by any Federal, state
or local authority, to the extent the Fund is treated as an entity for purposes of
such audit, including administrative settlement and judicial
review, the Tax Matters Partner shall be authorized to act for, and its
decision shall be final and binding upon, the Fund and each Partner thereof. All expenses incurred
in connection with any such audit,
investigation, settlement or review shall be borne by the Fund.
8.16 SECTION 754
ELECTION.
In the event of a distribution of
Fund property to a Partner or an assignment or other transfer (including
by reason of death) of all or part of the interest of a Partner in the Fund, the Board of Directors, in
its discretion, may cause the Fund to elect, pursuant to Section
754 of the Code, or the corresponding
provision of subsequent law, to adjust the basis of the Fund property as provided by Sections 734
and 743 of the Code.
29
EACH OF THE UNDERSIGNED ACKNOWLEDGES
HAVING READ THIS AGREEMENT IN ITS ENTIRETY BEFORE SIGNING, INCLUDING THE
PRE-DISPUTE ARBITRATION CLAUSE SET FORTH IN SECTION 8.6 AND THE CONFIDENTIALITY
CLAUSE SET FORTH IN SECTION 8.11.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the day and year first above
written.
/s/ Xxxxxxx X.
Xxxx
Name: Xxxxxxx
X. Xxxx
Position: Trustee
/s/ Xxxxxx
Xxxxxx
Name: Xxxxxx
Xxxxxx
Position: Trustee
/s/ Xxxxxx Xxxxxxx,
Xx.
Name: Xxxxxx
Xxxxxxx, Xx.
Position: Trustee
/s/ Xxxxxxx X. Xxxxx,
Xx.
Name: Xxxxxxx
X. Xxxxx, Xx.
Position: Trustee
GENERAL PARTNER:
Persimmon GP, LLC
/s/ Xxxxxxx X.
Xxxx
Name: Xxxxxxx
X. Xxxx
Position: President
30
