SUBSCRIPTION AGREEMENT FOR LIMITED PARTNERSHIP INTEREST (2) A"
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MOLPUS WOODLANDS GROUP
October 28, 2014
Via UPS
City of Clearwater
Attn: Steve Moskun
100 South Myrtle Avenue
Clearwater, FL 33756-5520
Re: Molpus Woodlands Fund IV, L.P. (Final Close)
Dear Mr. Moskun:
As you are aware, the final close of Molpus Woodlands Fund IV, L.P. occurred on October
22, 2014. As such, enclosed please find a fully-executed copy of the following documents:
1. Subscription Agreement;
2. Addendum to Joinder Agreement;
3. First Amendment to the Amended and Restated Limited Partnership
Agreement of Molpus Woodlands Fund IV, L.P.; and
4. Side Letter.
As always, if you have any questions or need any further information, please do not
hesitate to contact me at 601-948-8733, ext. 221 or by e-mail at mcooperkmolpus.com.
Again, thank you for being a part of Molpus Woodlands Fund IV, L.P. and we look forward
to working with you in the future.
Sincerely,
'X� , "�"
Michael R. oiler
General Counsel
MRC/sb
Enclosures
654Norib State Street s Jackson Mississippi 3}202. • Phone:601-948-8733 ° Fax:6oi-352-7463 a www.mo1pus.cotn
Confidential Copy No.
Prospective Investor:_ City of Clearwater
_100 South Myrtle Avenue
Clearwater, FL 33756-5520
Contact Person: Steve Moskun
Telephone No:_ 727-562-4532
Fax No: 727-562-4535
State/Country of Domicile: Florida
Capital Commitment(USD):$_5,000,000
MOLPUS WOODLANDS FUND IV, L.P.
SUBSCRIPTION AGREEMENT
THE OFFERING OF SECURITIES DESCRIBED HEREIN HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION.
THIS OFFERING IS MADE PURSUANT TO RULE 506 OF REGULATION D UNDER SECTION 4(a)(2)
OF THE SECURITIES ACT, WHICH EXEMPTS FROM SUCH REGISTRATION TRANSACTIONS
NOT INVOLVING A PUBLIC OFFERING. FOR THIS REASON, THESE SECURITIES WILL BE SOLD
ONLY TO INVESTORS WHO MEET CERTAIN MINIMUM SUITABILITY QUALIFICATIONS
DESCRIBED HEREIN.
A SUBSCRIBER SHOULD BE PREPARED TO BEAR THE ECONOMIC RISK OF AN INVESTMENT
IN THE FUND (AS DEFINED HEREIN) FOR AN INDEFINITE PERIOD OF TIME BECAUSE THE
LIMITED PARTNERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OR THF_. LAWS OF ANY OTHER JURISDICTION, AND, THEREFORE, CANNOT BE SOLD
UNLESS THEY ARE SUBSEQUENTLY REGISTERED OR AN EXEMPTION FROM REGISTRATION
IS AVAILABLE. THERE IS NO OBLIGATION OF THE ISSUER TO REGISTER THE LIMITED
PARTNERSHIP INTERESTS UNDER THE SECURITIES ACT OR THE LAWS OF ANY OTHER
JURISDICTION. TRANSFER OF THE LIMITED PARTNERSHIP INTERESTS IS ALSO RESTRICTED
BY THE TERMS OF THE LIMITED PARTNERSHIP AGREEMENT REI..ATING THERETO.
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112457657.2
MOLPUS WOODLANDS FUND IV,L.P.
SUBSCRIPTION AGREEMENT
FOR LIMITED PARTNERSHIP INTEREST
Molpus Woodlands Fund IV, L.P.
c/o Molpus Woodlands Fund IV-GP, LLC
654 North State Street
Jackson, Mississippi 39202
Attention: Michael R. Cooper, Esc}.
Ladies and Gentlemen:
The undersigned prospective investor, City of Clearwater (the "Subscriber"), hereby tenders this
Subscription Agreement to Molpus Woodlands Fund IV-GP, LLC, a Delaware limited liability company(the
"General Partner"), which serves as the general partner of Molpus Woodlands Fund IV, L.P., a Delaware
limited partnership (the "Fund"), on the terms and conditions hereinafter set forth. Capitalized terms used
but not defined herein shall have the meanings ascribed to them in the Private Placement Memorandum of
the Fund(the"Memorandum").
A. Subscription. The Subscriber, intending to be legally bound, hereby irrevocably agrees to
contribute, in installments, an aggregate amount of five million Dollars ($5,000,000) (tile "Capital
Commitment") in the Fund pursuant to the terms of, and at the times required by, the Amended and Restated
Limited Partnership Agreement of the Fund (the "Partnership Agreement") in return for a limited partnership
interest in the Fund offered by the Fund pursuant to the Memorandum (the "Interest"). All payments of the
Subscriber's Capital Commitment shall be made in cash by check made payable to "Molpus Woodlands
Fund IV, L.P." or by wire transfer pursuant to instructions provided by the General Partner prior to the due
date of such payments. The Subscriber acknowledges and agrees that the rninimum subscription amount shall
be $5,000,000, unless waived by the General Partner of the Fund in its sole discretion. The Subscriber
hereby acknowledges receipt of a copy of the Partnership Agreement, attached hereto as Exhibit A. The
Partnership Agreement will be entered into at the Initial Closing by all Partners of the Fund.
The Subscriber is delivering herewith the following documents:
0) an executed Joinder Agreement to the Partnership Agreement, in form as attached
hereto as Exhibit C (the"Joinder Agreement"); and
a dated, completed and executed IRS Form W-9.
B. Acceptance of Subscription. The Subscriber acknowledges and agrees that the subscription
for the Interest contained within this Subscription Agreement is an offer by the Subscriber to invest the
Capital Commitment indicated in Section A in return for the Interest. The Subscriber further acknowledges
and agrees that the subscription for the Interest contained within this Subscription Agreement shall be subject
to acceptance by the General Partner of the Fund and that the General Partner shall have the right,
exercisable in its sole discretion, to accept or reject, in whole or in part, such subscription. If the subscription
is accepted by the General Partner in whole or in part, the Fund will thereafter execute this Subscription
Agreement and deliver the same to the Subscriber as soon as practicable thereafter. The Subscriber further
acknowledges and agrees that upon a default of the Subscriber's Capital Commitment obligations to the
Fund, the Interest may, among other consequences, be subject to forfeiture in accordance with the terms of
the Partnership Agreement. if this subscription is rejected by the Fund in whole or in part, the General
Partner shall promptly return all funds received from the Subscriber applicable to the rejected portion of the
subscription to the Subscriber without interest thereon or deduction therefrom.
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C. F'und's Conditions to Closing. The Fund's obligations hereunder are subject to acceptance
by the General Partner of the Subscriber's subscription and to the fulfillment, prior to or at the time of
closing, of each of the following conditions:
(i) The representations and warranties of the Subscriber contained in this Subscription
Agreement shall be true and correct at the time of closing; and
(ii) All proceedings in connection with the transactions contemplated hereby and all documents
and instruments incident to such transactions shall be satisfactory in substance and in form to
the General Partner, the fund and Bradley Arant Boult Cummings LLP ("Fund Counsel"),
and the General Partner, the Fund or Fund Counsel shall have received all such counterpart
originals or certified or other copies of such documents as the Fund may request.
D. Background and Administrative Information.
NAME IN WHICH INTEREST IS TO BE HELD:
City of Clearwater
TAX I.D. NUMBER: 596000289
If the Subscriber is an entity other than an individual, a copy of the organizational documents of the
Subscriber is enclosed with this Subscription Agreement.
PRINCIPAL BUSINESS AND CORRESPONDENCE ADDRESS:
100 South Myrtle Avenue
Street
Clearwater FL 33756-5520
City State Zip Code
SUBSCRIBER'S TELEPHONE NUMBER AND E-MAIL ADDRESS:
Telephone: (_727_) 562-4532
E-Mail: Steve.rnoskun @mycIearwatei-.com
E. Representations and Warranties of the Subscriber. In order to permit the Fund to
evaluate whether it may properly accept the subscription for an Interest contained within this Subscription
Agreement and to induce the Fund to accept Such subscription, the Subscriber hereby acknowledges,
represents and warrants to, and covenants and agrees with,the Fund as follows:
(i) The Subscriber received the Memorandum, read the same and all annexes thereto
and enclosures therewith carefully, and is fully familiar with the contents thereof.
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1!2457(57.2
{ii) No representations or warranties have been made to the Subscriber by the Fund, the
General Partner or any agent of said persons, other than as set forth in the
Memorandum, the Partnership Agreement and this Subscription Agreement.
(iii) The Interest will be held under the following type of ownership (please check the
applicable blank):
Individual
Community Property
Trust
Partnership
—X_ Corporation
Limited Liability Company
Other:
(iv) The Subscriber is and reasonably expects to continue to be an"accredited investor"
as that term is defined in Rule 501(a) of Regulation D promulgated by the U.S.
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "Securities Act"), as follows (please initial the space beside the
applicable category) (upon request of the Fund, the Subscriber must provide
information to document the representation initialed, as described within each
paragraph):
X (a) A bank as defined in section 3(a)(2) of the Securities Act or a savings and
loan association or other institution as defined in section 3(a)(5)(A) of the
Securities Act, whether acting in its individual or fiduciary capacity; a
broker or dealer registered pursuant to Section 15 of the Securities Exchange
Act of 1934; an insurance company as defined in section 2(13) of the
Securities Act; an investment company registered under the Investment
Company Act of 1940 or a business development company as defined in
section 2(x)(48) of that Act;a Small Business Investment Company licensed
by the U.S. Small Business Administration under section 301(c)or(d)of the
Small Business Investment Act of 1958; a plan established and maintained
by a state, its political subdivisions or any agency or instrumentality of a
state or its political subdivisions, for the benefit of its employees, if such
plan has total assets in excess of $5,000,000; an employee benefit plan
within the meaning of the Employee Retirement Income Security Act of
1974, if the investment decision is made by a plan fiduciary, as defined in
section 3(21) of such Act, which is either a bank, insurance company, or
registered investment adviser,or if the employee benefit plan has total assets
in excess of$5,000,000,or, if a self-directed plan,with investment decisions
made solely by persons that are accredited investors;
(b) A private business development company as defined in section 202(x)(22)
of the investment Advisers Act of 1940;
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12457657.2
(c) An organization described in section 501(c)(3) of the Internal Revenue
Code, or a corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of$5,000,000;
(d) A director, executive officer, or general partner of the Fund, or a director,
executive officer, or manager of the General Partner;
(e) A natural person whose individual net worth, or joint net worth with such
person's spouse, at the time of his or her purchase exceeds $1,000,000,
excluding the value of his or her primary residence;
(f) A natural person who had an individual income in excess of $200,000 in
each of the two most recent years, or joint income with that person's spouse
in excess of $300,000 in each of those years, and has a reasonable
expectation of reaching the same income level in the current year;
(g) A trust with total assets in excess of$5,000,000, not formed for the specific
purpose of acquiring the securities offered, whose purchase is directed by a
person with knowledge and experience in business and financial matters
such that he is capable of evaluating the merits and risks of the prospective
investment; or
(h) An entity (including an Individual Retirement Account (IRA)) in which all
of the equity owners or beneficiaries are accredited investors under clauses
(a), (b), (c), (d),(e), (f)or(g) above.
(v} The Subscriber is and reasonably expects to continue to be a "qualified purchaser"
as that term is defined in Section 2(a)(51) of the Investment Company Act of 1940,
as alnendment (the "Investment Company Act"), as follows (please initial the space
beside the applicable category) (upon request of the Fund, the Subscriber must
provide information to document the representation initialed, as described within
each paragraph):
(a) A natural person (including any person which is acquiring the Interest with
his or her spouse in a .joint capacity, as community property or similar
shared interest) that either individually or together with the Subscriber's
spouse, owns investments (as defined by the SEC. in Rule 2a51-1
promulgated under the Investment Company Act) that are valued at not less
than $5,000,000;
(b) An entity that owns investments (as defined by the SEC in Rule 2a51-1
promulgated under the Investment Company Act) that are valued at not less
than $5,000,000 and is owned directly or indirectly by two (2) or more
natural persons related as siblings, spouses (including former spouses) or
direct lineal descendants by birth or adoption, spouses of such persons, the
estates of such persons, or foundations, charitable organizations or trusts
established by or for the benefit of such persons;
(c) A trust not covered by clause (b) above and not formed for the specific
purpose of acquiring the Interest, as to which the trustee or other person
authorized to make decisions with respect to the trust and each settler or
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1/245765T2
other person who has contributed assets to the trust is a person described in
clause(a)or(b)above or clause(d) below;
_X— (d) An entity, acting for its own account or the accounts of others described in
clause (a), (b) or (c) above, this clause (d) or clause (e) below, that in the
aggregate owns and invests on a discretionary basis investments (as defined
by the SEC in Rule 2x51-1 promulgated under the Investment Company
Act)that are valued at not less than $25,000,000; or
(e) An entity, all of the outstanding securities of which are owned by persons or
entities described in clauses (a) through (d) above or this clause (e). If the
Subscriber belongs to this category only, list on a separate sheet to be
attached hereto the equity owners of the Subscriber and the investor
category which each such equity owner satisfies.
(vi) If the Subscriber has made one of the representations set forth in clauses (b) through
(e) of subparagraph(v), the Subscriber makes one of the following representations:
(a) The Subscriber would be treated as an "investment company" under the
Investment Company Act but for the tact that the Subscriber qualifies for
one of the exemptions from the definition of "investment company"
provided for in Section 3(c)(1) or 3(c)(7) of the Investment Company Act.
True(Please answer clause(b)below).
X False(Please skip to subparagraph (vii) below).
(b) If the Subscriber checked "true" in clause (a) above, the Subscriber certifies
that the Subscriber has read and understands the provisions of Section
2(a)(5 1)(C) of the Investment Company Act and Rule 2x51-2 promulgated
under the Investment Company Act (copies of which are attached hereto as
Exhibit B) and makes one of the following representations:
(1) No consent of the Subscriber's direct or indirect beneficial
owners is required for the Subscriber's treatment as a "qualified
purchaser" with respect to the Fund;
(2) Both: (A) all of the beneficial owners of the Subscriber's
outstanding securities (other than short-term paper), determined in
accordance with Section 3(c)(1)(A) of the havestment Company
Act, that acquired such securities on or before April 30, 1996 (the
"Pre-Amendment Beneficial Owners") and (B) all of the Pre-
Amendment Beneficial Owners of any company that, but for the
exclusions from the definition of "investment company" provided
for in Section 3(c)(1) or 3(c)(7) of the hlvestment Company Act,
would be an "investment company" and that directly or indirectly
owns any outstanding securities of the Subscriber have consented to
its treatment as a "qualified purchaser" under the Investment
Company Act with respect to the Fund;
(3) The Subscriber has made either of the representations set
forth in clauses (b) or (c) of subparagraph (v) above, and all of the
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112457657.2
trustees, directors or general partners of the Subscriber have
consented to the Subscriber's treatment as a "qualified purchaser"
with respect to the Fund; or
(4) The Subscriber cannot make any of the representations set
forth in clauses(1),(2)or(3) above.
(vii) The Subscriber has such knowledge and experience in financial and business matters
that the Subscriber is capable of evaluating the merits and risks of the Subscriber's
investment in the Fund.
(viii) The execution and delivery of the Partnership Agreement and this Subscription
Agreement, the consummation of the transactions contemplated thereby and the
performance of the obligations thereunder will not conflict with or result in any
violation of or default under any provision of any other agreement or instrument to
which the Subscriber is a party or any license, permit, franchise, judgment, order,
writ or decree, or any statute, rule or regulation,applicable to the Subscriber.
(ix) No suit, action, claim, investigation or other proceeding is pending or, to the best of
the Subscriber's knowledge, is threatened against the Subscriber which questions the
validity of the Partnership Agreement or this Subscription Agreement or any action
taken or to be taken pursuant to the Partnership Agreement or this Subscription
Agreement.
(x) In formulating a decision to invest in the Fund, the Subscriber has not relied or acted
on the basis of any representations or other information purported to be given on
behalf of the Fund or the General Partner, except as set forth in the Memorandum
and the Partnership Agreement (it being understood that no person has been
authorized by the Fund or the General Partner to furnish any such representations or
other information).
(xi) The Subscriber(a) is aware that there is no public trading market for the Interest and
it is highly unlikely that such a market will develop, (b) has adequate means of
providing for the Subscriber's currents needs and personal contingencies, (e) has no
need for liquidity in this investment, (d) has the ability to bear the economic risk of
this investment, and (e) can afford a complete loss of the purchase price of this
investment. The Subscriber does not have any reason to anticipate any change in the
Subscriber's personal circumstances, financial or otherwise, which may cause or
require any sale or distribution by the Subscriber of all or any part of the Interest
herein subscribed.
(xii) The Subscriber is purchasing the Interest for investment purposes only, for his, her
or its own account, and not with a view towards the distribution or resale thereof.
(xiii) The Subscriber understands and acknowledges that the Fund will not accept the
investment of funds by natural persons or entities acting, directly or indirectly, in
contravention of any applicable money laundering regulations or conventions of the
United States or other international jurisdictions, and represents and warrants that
neither the Subscriber, nor any of its beneficial owners, (each an "Underlying
Beneficial Owner") (i) appear on the Specially Designated Nationals and Blocked
Persons List of the Office of Foreign Assets Control of the United States Department
of the Treasury ("OFAC"); (ii) are a current or former senior official in the
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1!2457657.2
executive, legislative, administrative, military or judicial branches of a foreign (non-
U.S.) government (whether elected or not), a current or former senior officials of a
major foreign (non-U.S.) political party, a current or former senior executives of a
foreign (non-U.S.) government-owned corporation, or commercial enterprises,
corporations, businesses or other entities that have been formed by, or for the benefit
of; any such individuals (a "Senior Foreign Political Figure"), an immediate family
members of a Senior Foreign Political Figure, or person who is widely and publicly
known (or is actually known) to be a close associate of a Senior Foreign Political
Figure; (iii) are a person or entity resident in, or organized or chartered under, the
laws of a jurisdiction that has been designated by the U.S. Secretary of the Treasury
under Section 311 or 312 of the U.S. PATRIOT Act as warranting special measures
due to money laundering concerns; or(iv) are a bank organized under foreign law or
an agency, branch or office located outside the United States of a bank (a "Foremen
Bank") that does not maintain a physical presence (a "Physical Presence") in any
country, meaning a place of business located at a fixed address, other than solely a
post office box or an electronic address, in a country in which the foreign bank is
authorized to conduct banking activities, at which location the Foreign Bank: (w)
employs one or more individuals on a full-time basis; (x) maintains operating
records related to its banking activities; (y) is subject to inspection by the banking
authority that licensed the Foreign Bank to conduct banking activities; and (z) does
not provide banking services to any other Foreign Bank that does not have a
physical presence in any country and that is not a regulated affiliate (a `'Foreign
Shell Bank"); except such prohibition shall not include a Foreign Bank that has a
physical presence in any country and is a "regulated affiliate," i.e., an affiliated
depository institution, credit union, or Foreign Bank that maintains a Physical
Presence in the United States or a foreign country, as applicable, and is subject to
supervision by a banking authority in the country regulating such affiliated
depository institution, credit union, or Foreign Banks; or (v) are otherwise a party
with which the Fund is prohibited to deal under the laws of the United States.
The Subscriber further represents that the monies used to fund the investment in the
Interests are not derived from, invested for the benefit of, or related in any way to,
the governments of, or persons within, (i) any country under a U.S. ernbargo
enforced by OFAC, (ii) that has been designated as a "non-cooperative country or
territory" by the Financial Action Task Force on Money Laundering or (iii) that has
been designated by the U.S. Secretary of the Treasury as a "primary money
laundering concern."
The Subscriber further represents and warrants that the Subscriber (i) has conducted
thorough due diligence with respect to all of its Underlying Beneficial Owners, (ii)
has established the identities of all Underlying Beneficial Owners and the source of
each of the Underlying Beneficial Owner's funds and (iii) will retain evidence of
any such identities, any such source of funds and any such due diligence.
The Subscriber further represents that the Subscriber does not know or have any
reason to suspect that (i) the monies used to fund the Subscriber's investment in the
Interests have been or will be derived from or related to any illegal activities,
including but not limited to, money laundering activities, and (ii) the proceeds from
the Subscriber's investment in the Interests will be used to finance any illegal
activities.
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112457657.2
The Subscriber further agrees and acknowledges that, among other remedial
measures, (i) the Fund may be obligated to "freeze the account" of such Subscriber,
either by prohibiting capital contributions by the Subscriber and/or segregating
assets of the Subscriber in compliance with governmental regulations and/or if the
General .Partner determines in its sole discretion that such action is in the best
interests of the Fund and (ii) the Fund may be required to report such action or
confidential information relating to the Subscriber (including, without limitation,
disclosing the Subscriber's identity) to relevant regulatory authorities. The
Subscriber further represents and warrants that the Subscriber will promptly notify
the Fund of any change in its status or the status of any Underlying Beneficial
Owner(s) with respect to its representations and warranties hereunder.
(xiv) The Subscriber understands and acknowledges that the Fund is, or may in the future
become subject to, anti-money laundering statutes, regulations and conventions of
the United States or other international jurisdictions, and the Subscriber agrees to
execute instruments, provide information, or perform any other acts as may
reasonably be requested by the General Partner, or other authorized representative of
the General Partner, for the purpose of: (i) carrying out due diligence as may be
required by applicable law to establish the identity of (x) the Subscriber, (y) any
Underlying Beneficial Owner(s) of the Subscriber and (z) any investors, partners,
members, directors, officers, agents, affiliates, beneficiaries or grantors of the
Subscriber, and any Underlying Beneficial Owner(s) of such investors, partners,
members, directors, officers, agents, affiliates, beneficiaries or grantors; (ii)
maintaining records of identities, or verifications or certifications as to identities;
and (iii) taking any other actions as may be required to comply with and remain in
compliance with money laundering statutes, regulations or conventions applicable to
the Fund.
(xv) The Subscriber is familiar with the nature of, and risks attendant to, investments in
securities of the type represented by the Interest and has determined that the
purchase of the hlterest is consistent with the Subscriber's investment objectives.
(xvi) The Subscriber has been advised and understands that an investment in the Interest
is speculative and involves a high degree of risk.
(xvii) The Subscriber confirms that all documents, records, and books pertaining to the
Fund and the investment have been made available to the Subscriber and the
Subscriber also confirms that the Subscriber, to the extent it, he or she desired to do
so, has been given an opportunity to make further inquiries of the Fund and its
representatives with respect to the Fund and the investment and has requested and
received all information about the Fund the Subscriber deemed necessary or
appropriate to review prior to making an investment decision.
(xviii) The Subscriber is aware that the Interest has not been, and there are no present plans
for it (or any other interests in the Fund) to be, registered under the Securities Act or
any state securities law. Accordingly, the Interest must be held indefinitely by the
Subscriber unless it is registered under the Securities Act and any applicable state
securities law, or unless, in the opinion of counsel satisfactory to counsel for the
Fund, a sale or transfer may be made without such registration. The Subscriber also
understands that the Fund does not presently contemplate that any registration will
be made or that the Fund will take steps which will make the general provisions of
Rule 144 available to permit the resale of the Interest. The Subscriber is also aware
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1/24 5765 7,2
that the Fund does not presently intend, and it is not under any obligation, to take
any action or bear any expense: (a) to register the Interest (or any other interests in
the Fund) under the Securities Act or any state securities law for offer, sale, transfer,
assignment, or other disposition by the Subscriber; (b) to make an exemption from
registration available for any such offer, sale, transfer, assignment, or other
disposition by the Subscriber; or (c) to obtain any opinion of counsel with respect to
any such offer, sale, transfer, assignment, or other disposition.
(x ix) If an individual,the Subscriber is at least twenty-one (2I)years of age.
(xx) The Subscriber is a resident of the state listed in the primary residence address of the
Subscriber set forth above.
(xxi) If the Subscriber is a corporation, partnership, trust or other entity, it is duly
organized, validly existing and in good standing under the laws of the jurisdiction in
which it is organized; it is authorized and qualified to become a limited partner in,
and authorized to make its capital contributions to, the Fund and otherwise to
comply with its obligations under the Partnership Agreement; the Subscriber has not
been formed, reformed or recapitalized for the specific purpose of purchasing the
Interest; the person signing this Subscription Agreement on behalf of such entity has
been duly authorized by such entity to do so; and this Subscription Agreement has
been duly executed and delivered on behalf of the Subscriber as a deed and is the
valid and binding agreement of the Subscriber, enforceable against the Subscriber in
accordance with its terms. In addition, such Subscriber will, upon request of the
General Partner, deliver any documents, including an opinion of counsel, evidencing
the existence of the Subscriber, the legality of an investment in the Fund and the
authority of the person executing this Subscription Agreement on behalf of the
Subscriber which may be requested by the General Partner.
(xxii) The information provided to the Fund by the Subscriber as to the Subscriber is true
and correct as of the date hereof, and the Subscriber agrees to advise the Fund prior
to its acceptance of the subscription contained in this Subscription Agreement of any
material change in any such information.
(xxiii) At the request of the Fund, each of the undersigned will execute such other
instruments and documents as may be reasonably required in connection with the
purchase of the Interest.
(xxiv) Unless required by law, the undersigned shall not disclose, and shall maintain
confidential any non-public information related to the Fund, provided that the
undersigned may disclose such information to any of its advisors, attorneys and
accountants if such advisor, attorney and/or accountant shall have agreed to be
bound by this provision.
(xxv) The Subscriber understands and acknowledges that the law firm of Bradley Arant
Boult Cummings LLP is representing the Fund in connection with the sale of the
Interest to the Subscriber and that Bradley Arant Boult Cummings LLP is not, nor is
any other law firm retained by the Fund, representing the Subscriber or acting as a
broker, dealer, or agent in connection with this transaction.
(xxvi) The Subscriber is not relying on the Fund with respect to the tax and other economic
considerations of an investment in the Interest and the Subscriber has relied on the
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1/2457657.2
advice of, or has consulted with, the Subscriber's own legal, tax and other advisors.
The Subscriber acknowledges that she, he or it understands that anticipated tax
benefits may not be available and, further, may be adversely affected through
adoption of new laws or regulations or amendments to existing laws or regulations.
The Subscriber acknowledges and agrees that the Fund is providing no warranty or
assurance regarding the ultimate availability of any tax benefits to the Subscriber by
reason of the Subscriber's investment in the Fund.
(xxvii) The Subscriber agrees to provide the Fund with; (i) a valid and duly executed
Internal Revenue Service Form W-9 or Form W-8BEN (or other Form W-8), as
appropriate, upon the Subscriber's admission as a limited partner to the partnership
(as set forth in the Partnership Agreement) and promptly upon a subsequent
reasonable request by the Fund or the General Partner; (ii) a valid and duly executed
Internal Revenue Service Form W-9 or Form W-8BEN (or other Form W-8), as
appropriate,thirty (30) days prior to the end of each third taxable year thereafter that
the Subscriber owns an Interest; and (iii) prompt notice upon any change in the
information provided on such form.
(xxviii) The Subscriber understands that information relating to the Subscriber shall appear
on the financial statements and other records of the Fund. The Subscriber
acknowledges and agrees that other Partners may receive such information as
permitted by the Partnership Agreement or as required by applicable laws and may
share such information with their advisors and other parties.
(xxix) The Subscriber authorizes and consents to the General Partner, on behalf of the
Fund, releasing confidential information about the Subscriber and, if applicable, any
Underlying Beneficial Owner(s), to the appropriate governmental or regulatory
authorities if the General Partner, in its sole discretion, determines that it is in the
best interests of the Fund in light of applicable statutes, regulations and conventions.
(xxx) Within ten (10) days after receipt of a written request therefore fro€n the General
Partner or the Fund, the Subscriber agrees to provide such information and to
execute and deliver such documents as the Fund or the General Partner may deem
reasonably necessary to comply with any and all laws and ordinances to which the
Fund is or may be subject.
(xxxi) The undersigned, if executing this Subscription Agreement in a representative or
fiduciary capacity, has full power and authority to execute and deliver this
Subscription Agreement in such capacity and on behalf of the subscribing
individual, ward, partnership, trust, estate, corporation, limited liability company, or
other entity for whom the undersigned is executing this Subscription Agreement,
and such individual, ward, partnership, trust, estate, corporation, or other entity has
full right and power to perform pursuant to this Subscription Agreement and make
an investment in the Interest.
(xxxii) The Subscriber agrees that the acknowledgements, representations, warranties,
covenants and agreements of the Subscriber set forth in this Subscription Agreement
shall survive the execution and delivery of this Subscription Agreement and the
consummation of any subscription for the Interest.
F. Representations, Warranties and Covenants (flan Investors). If the undersigned is an
employee benefit plan subject to Title I of the Employee Retirement Income Security Act of 1974, as
r1
1/245765T2
amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as amended (the "Cade")(a
"Plan"), is using the assets of a Plan or is an entity whose underlying assets include Plan assets by reason of a
Plan's investment in the entity, the fiduciary executing this Subscription Agreement on behalf of the Plan
(tile"Fiduciary")represents and warrants that:
(i) the Fiduciary has considered the following with respect to the Plan's investment in the
Interest and has determined that, in view of such considerations, the purchase of the Interest
is consistent with the Fiduciary's responsibilities under ERISA or other laws applicable to
the Plan:
(a) the role such investment or investment course of action plays in that portion of the
Plan's portfolio that the Fiduciary manages;
(b) whether the investment or investment course of action is reasonably designed as part
of that portion of the portfolio managed by the Fiduciary to further the purposes of
the Plan, taking into account both the risk of loss and the opportunity for gain that
could result therefrom;
(c) the composition of that portion of the Plan portfolio that the Fiduciary manages with
regard to diversification;
(d) the liquidity and current rate of return of that portion of the Plan portfolio managed
by the Fiduciary relative to the anticipated cash flow requirements of the Plan;
(e) the projected return of that portion of the Plan portfolio managed by the Fiduciary
relative to the funding objectives of the Plan;
(f) whether an investment in the Interest is permissible under the docurnents governing
the Plan and the Fiduciary; and
(g) that there are substantial risks of loss for the Plan associated with an investment in
the Interest;
(ii) the Fiduciary is (a) responsible for the decision to invest flan assets in the Interest; (b)
independent of the Fund, the General Partner and any of their respective affiliates; and (c)
qualified to make such investment decision for the Plan;
(iii) the Fiduciary has delivered to the Fund, and from time to time hereafter will deliver to the
Fund, in writing, all of the information which the Fund may request in order to avoid
violations of any provision of ERISA or any other laws applicable to the Fiduciary or the
Fund, and promptly will notify the Fund, in writing, or any change in the information so
furnished; and
(iv) the Fiduciary (a)(i) has not solicited and has not received from the Fund, the General Partner
or any of their respective affiliates any evaluation or other investment advice on any basis in
respect of the advisability of this or any other investment in light of the assets, cash needs,
investment policies or strategy, overall portfolio composition or diversification of the Plan
assets, and (ii) is not relying and has not relied on the Fund, the General Partner, or any of
their respective affiliates for any such advice, and (b) represents that (i) based upon the
assumption that the assets of the Fund will not constitute "plan assets" for purposes of
ERISA, neither the execution and delivery of this Subscription Agreement nor the
subscription for the Interest by the Fiduciary on behalf of the Plan will constitute a non-
12
1/2457657.2
exempt prohibited transaction between the Plan and any party under Section 406 of 1?RISA
or Section 4975 of the Code, and (ii)to the Fiduciary's best knowledge, neither the Fund, the
General Partner nor any of their respective affiliates is a "party in interest", within the
meaning of Section 3(14) of ERISA, or a "disqualified person", within the meaning of
Section 4975(e)(2) of the Code, with respect to the Plan.
G. Status as a Limited Partner. The Subscriber agrees that if the subscription contained in
this Subscription Agreement is accepted, the Subscriber shall (i) become a Limited Partner in the Fund, (ii)
execute and deliver a copy of the Partnership Agreement or the Joinder Agreement attached hereto as Exhibit
C, or adhere to the Partnership Agreement by entering into this Subscription Agreement (as applicable), (iii)
be bound by the terms of the Fund's Partnership Agreement and (iv) perform all obligations unposed by the
Partnership Agreement upon a Limited Partner with respect to the Interest.
H. Restrictions on Assignment or Transfer of Interest. The Subscriber hereby acknowledges
and agrees that the Subscriber will not'offer, sell, transfer, assign, pledge, or otherwise dispose of the
Interest, in whole or in part, or any interest in such Interest, except in strict compliance with the terms and
conditions set forth in the Partnership Agreement.
Y. Irrevocability; Binding Effect. The Subscriber hereby acknowledges and agrees that the
subscription contained in this Subscription Agreement is irrevocable, that, except as required by law, the
Subscriber is not entitled to cancel, terminate, or revoke this Subscription Agreement or any provisions
hereof, and that.this Subscription Agreement and such other agreements shall survive the bankruptcy or
dissolution of the Subscriber and shall be binding upon and inure to the benefits of the parties and their
successors and permitted assigns.
J. Power of Attorney. Subject only to the acceptance of this Subscription Agreement by the
General Partner, the Subscriber hereby (i)joins in and agrees to be bound by the Partnership Agreement as a .
limited partner; (ii) pursuant to the terms of the Partnership Agreement, designates and appoints the General
Partner its true and lawful attorney, in its name, place, and stead to Snake, execute, sign, and file (x) the
Fund's Certificate of Limited Partnership and any amendment thereto and such other instruments,
documents, or certificates that may from time to time be required of the Fund by the laws of the United
States of America, the laws of the state of the Fund's registration, or any other state in which the Fund shall
conduct its affairs in order to qualify or otherwise enable the Fund to conduct its affairs in such jurisdictions,
and (y) such instruments and documents necessary to effect the transactions contemplated by the Partnership
Agreement. Such attorney is not hereby granted any authority on behalf of the Subscriber, as a limited
partner, to amend the Partnership Agreement except that as attorney in fact for a limited partner,the General
Partner will have the authority to execute any duly adopted amendment to the Partnership Agreement. It is
expressly intended by each Subscriber that the power of attorney granted by this paragraph is coupled with
an interest and is intended to secure the Limited Partner's obligations under the Agreement and/or a relevant
interest in property, shall be irrevocable, and shall survive and not be affected by the subsequent disability or
incapacity of such Subscriber (or if such Subscriber is a corporation, partnership, trust, association, limited
liability company or other legal entity, by the cancellation, dissolution or termination thereof and shall extend
to such subscriber's successors and assigns); provided, however, that this power of attorney granted by each
Subscriber shall expire as to such Subscriber immediately after the cancellation of the Fund or the complete
withdrawal of such Subscriber as a partner of the Fund. This power of attorney may be exercised by such
attorney-in-fact and agent for all Subscribers (or any of them) by a single signature of the General Partner
with or without listing all Subscribers executing an instrument.
K. Indemnification. The Subscriber agrees to indemnify and hold harmless the Fund and its
members, managers, officers, employees, agents, attorneys, accountants, and affiliates against any and all
loss, liability, claim, damage, and expense whatsoever (including, but not limited to, any and all attorney's
fees and other expenses reasonably incurred in investigating, preparing, or defending against any litigation
13
112457657,2
commenced or threatened or any claim whatsoever) due to, arising out of or based upon any breach of any
representation, warranty, covenant or agreement of the Subscriber contained in this Subscription Agreement
or any failure by the Subscriber to comply with any covenant or agreement made by the Subscriber herein or
in any other document furnished by the Subscriber to any of the foregoing in connection with the transaction
contemplated by this Subscription Agreement.
L. Modification. Neither this Subscription Agreement nor any provision hereof shall be
waived, modified, discharged, or terminated except by an instrument in writing signed by the party against
whom any such waiver, modification, discharge, or termination is sought.
M. Notices. Any notice or other communication required or permitted to be given hereunder
shall be in writing and shall be sent by certified mail, return receipt requested; by facsimile; by e-mail or
delivered against receipt to the party to whom it is to be given (i) if to the Fund, at the address, facsimile
number, or e-mail address set forth above or as otherwise provided, or (ii) if to the Subscriber, at the
correspondence address, facsimile number, or e-mail address set forth above (or, in either case, to such other
address as the party shall have furnished in writing in accordance with the provisions of this Section M).
Any notice or other communication given by certified mail shall be deemed given at the time of certification
thereof, except for a notice changing a party's address which shall be deemed given at the time of receipt
thereof.
N. Assignment. This Subscription Agreement and the rights and obligations hereunder may
not be assigned or delegated by the Subscriber without the prior written consent of the Fund, and any attempt
to do so shall be void and of no effect.
O. Applicable Law. This Subscription Agreement shall be construed in accordance with and
shall be governed by the laws of the State of Delaware, without regard to its conflicts of laws principles that
would cause the law of any other State to be applied to this Subscription Agreement.
P. Counterparts. This Subscription Agreement may be executed by facsimile,through the use
of separate signature pages or in any number of counterparts and each of such counterparts shall, for all
purposes,constitute one agreement binding on all parties.
Q. Entire Agreement. This Subscription Agreement and, if the subscription is accepted by the
General Partner, the Partnership Agreement constitute the entire agreement among the parties hereto with
respect to their subject matter and supersedes all prior agreements, whether written or oral, with respect to
that subject matter.
[Signature Page to Follow]
14
1/2457657.2
IN WITNESS WHEREOF, the undersigned have executed this Subscription Agreement, or
caused this Subscription Agreement to be executed by its duly authorized representative, effective as of
the_14_day of July ,2014.
THE SUBSCRIBER:
BOARD OF TRUSTEES OF THE EMPLOYEE'S
PENSION PLAN OF THE CITY OF CLEARWATER,
FLORIDA
By: C.�w"I4-r1 Cr tvto;
George N. Cretekos
Cbairpers n
APension F rm; Attest: pRw�:�
,•
CV
man Rosemarie Call r b
ey City Clerk `
�'�I 4BI15NE0,g1
ACCEPTED AND AGREED:
MOLPUS WOODLANDS FUND IV, L.P.
By: Molpus Woodlands Fund IV-GP, LLC
Its: General Partner
By: Molpus Woodlands Group,LLC
Its: Manager
By:
Name:
Its: ec ufl Vf CU P�Siclen
Effective as of ,2014
15
1124576657.2
IN WITNESS WHEREOF,the undersigned have executed this Subscription Agreement, or
caused this Subscription Agreement to be executed by its duly authorized representative, effective as of
the_14_day of_July , 2014.
THE SUBSCRIBER:
BOARD OF TRUSTEES OF THE EMPLOYEE'S
PENSION PLAN OF THE CITY OF CLEARWATER,
FLORIDA
By:
George N. Cretekos
Chairperson
Approved as to Form; Attest:
Stuart A. Kaufman Rosemarie Call
Pension Attorney City Clerk
ACCEPTED AND AGREED:
MOL13US WOODLANDS FUND IV, L.P.
By: Molpus Woodlands Fund IV-GP, LLC
Its: General Partner
By: Molpus Woodlands Group, LLC
Its: Manager
By:
Naive:
Its: i[R Ne Si e-1
Effective as of: ?2,, 2014
15
1/245765T2
EXHIBIT A
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
OF
MOLPUS WOODLANDS FUND IV, L.P.
(See attached.)
112457657,2
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
MOLPUS 'WOODLANDS FUND IV, L.P.
OCTOBER 22,2013
NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR
ANY STATE REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THIS
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OR THE LIMITED
PARTNERSHIP INTERESTS ("INTERESTS") PROVIDED FOR HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THE INTERESTS HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
PARTNERSHIP IS UNDER NO OBLIGATION TO REGISTER THE INTERESTS UNDER
THE SECURITIES ACT IN THE FUTURE.
AN INTEREST MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE
SECURITIES ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE GENERAL
PARTNER THAT SUCH REGISTRATION IS NOT REQUIRED. ADDITIONAL
RESTRICTIONS ON THE TRANSFER OF INTERESTS ARE CONTAINED IN ARTICLE 7
OF THIS AGREEMENT. BASED UPON THE FOREGOING, EACH ACQUIRER OF AN
INTEREST MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF INVESTMENT
THEREIN FOR AN INDEFINITE PERIOD OF TIME.
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS
Section l'l Specific Definitions ....................................................................^............... ...........l
Section 1^3 General Usage......................................... ..............................................................l5
ARTICLE 2.
FORMATION
Section 2.1 Continuation and Name........................................................... .............................l5
Section2.2 Term........................................................................................ ................ .............l6
Section 2.3 Purpose and Scope.................................................................................................l6
Section 2.4 Principal Offiow......................................................................................................l6
Section 2.5 Delaware Office and '—.----------.^.--,.-----..---..------..l7
Section 2.6 Names and Contact Information of the Pmztoezo'^ .................................................l7
Section 2.7 Additional Documents'..........................................................................................}7
Section 2.8 Title to -----_--..-^..—.---.-_-.---_.-'^.^..-._--.-----..._'l7
ARTICLE 3.
CAPITALIZATION
Section 3.1 Admission of Partners......................................................lS
Section3.2 Capital ..................................................................... .......................l8
Section 3.3 Additional Capital ..................... ............... .................'...................Zl
Section 3.4 Failure 1wMake .^.`..-----.--_-- .............................
�
Section 3.5 Capital Conttibutions Prohibited by Lav� .............................................................Z3
Section 3.6 Withdrawal and Return of .—_.-_--'....---------.---_----.-24
Se:tino'33 Loans tothe -.---.----.----_....^._--------'--''----.25
Section 3,8 I.irnitatimoof Return mfCertain Distributions. ......................................25
Section 3.9 Interest on .'.'^.',........................................................... ............................%5
Section 3.]0 Withdrawing Limited Partner ................................................. .............................25
ARTICLE 4.
ALLOCATIONS
Section4.1 Profits............................................................... .............................. ......................26
Section4.2 Losses. ................................................................'..................................................20
Section 4.3 Special Allocations. ......... ...................................... .................. ...........................26
Section 4.4 Intent of Allocations. ...........,........................................ ................................ ......'Zg
Section 4.5 Other Allocation Rules. ..................... ..29
........ ...
Section 4.6 Tax Allocations: Code Section 704(c)...................................................................30
Section 4.7 Reliance on Advice of Accountants and Attorneys...............................................30
Section 4.8 Modifications to Preserve Underlying Economic Objectives. ..............................30
Section 4.9 Withholding/Special Taxes....................................................................................31
ARTICLE 5.
DISTRIBUTIONS
Section 5.1 Operating Distributions. ........................................................................................33
Section 5.2 Liquidating Distributions.......................... ............ ...............................................35
Section 5.3 Limitation on Distributions....................................................................................35
Section 5.4 Special Distribution Procedures. ................................ ..........................................35
Section 5.5 Distributions Subject to Return. ............................................................................36
Section 5.6 Carried Interest Distributions. ...............................................................................37
Section 5.7 Division Among the Limited Partners...................................................................38
ARTICLE 6.
ADMINISTRATION
Section 6.1 Management Rights of the Limited Partners.........................................................38
Section 6.2 Management by the General Partner. ....................................................................38
Section 6.3 Investment Restrictions. ........................................................................................40
Section 6.4 General Partner's Power to Bind the Partnership. .................................................41
Section 6.5 Other Ventures and Activities ...............................................................................41
Section 6.6 Policies with Respect to Investment Opportunities...............................................42
Section 6.7 Parallel Fund..........................................................................................................43
Section6.8 Expenses...............................................................................................................44
Section 6.9 Alternative Investment Vehicle.............................................................................45
Section 6.10 Partner Compensation............................................................................................45
Section 6.11 Records and Financial Statements.........................................................................46
Section 6.12 Valuation of Partnership Assets.............................................................................47
Section 6.13 Confidentiality....................:..................................................................................49
Section6.14 Disclosures..............................................................................................................50
Section 6.15 Limitations on Borrowing. ....................................................................................50
Section 6.16 General Partner Payment of Placement or Servicing Fees....................................50
Section 6.17 ER.ISA Compliance. ..............................................................................................50
Section 6.18 Consideration of Partners' Separate Circumstances..............................................51
Section6.19 Advisory Board'......................................................................................................52
Section 6.20 Internal Revenue Service.......................................................................................53
Section 6.21 Listed Transactions................................................................................................53
ARTICLE 7.
TRANSFERS AND WITHDRAWALS
Section 7.1 General Provisions Regarding Transfers...............................................................53
ii
Section 7.2 Transfer by a Limited Partner................................................................................54
Section 7.3 Withdrawal/Removal of a Limited Partner............................................................56
Section 7.4 Procedures Following Limited Partner Withdrawal/Removal. .............................57
Section 7.5 Transfer by the General Partner.............................................................................58
Section 7.6 Withdrawal/Removal of the General Partner. .......................................................59
Section 7.7 Status of Assignees................................................................................................61
ARTICLE 8.
DISSOLUTION AND LIQUIDATION
Section 8.1 Dissolution Events.................................................................................................62
Section 8.2 Elections Following Certain,Dissolution Events...................................................63
Section 83 Winding Up and Liquidation.................................................................................63
Section 8.4 Formation of Liquidating Trust............................................................................65
ARTICLE 9.
OTHER TAX MATTERS
Section9.1 Liability..................................................................................................................66
Section9.2 Tax Elections. .......................................................................................... .............66
Section 9.3 Tax Matters Partner. ..............................................................................................66
Section9.4 Amounts Withheld.................................................................................................68
ARTICLE 10.
LIABILITY AND INDEMNIFICATION
Section10.1 Liability..................................................................................................................68
Section 10.2 Indemnification......................................................................................................68
ARTICLE 11.
GENERAL PROVISIONS
Section11.1 Meetings. ...............................................................................................................70.
Section 11.2 Action Without a Meeting of All Partners..............................................................70
Section. 11.3 Entire Agreement; Side Letters. ............................................................................71
Section 11.4 "Molpus Woodlands"Name and Mark. ................................................................71
Section11.5 Amendments..........................................................................................................71
Section11.6 Governing Law. .....................................................................................................72
Section11.7 Severability............................................................................................................72
Section 11.8 Counterparts, Binding upon Partners and Assignees.............................................73
Section 11.9 Survival of Certain Obligations............ ................73
Section 11.14 No Third Party Beneficiaries.................................................................................73
Section 11.11 Notices, Consents, Elections, Etc. .........................................................................73
Section 11.12 Power of Attorney................... ..74
.............................................................................
Section 11.13 Certain Limited Partner Representations and Covenants......................................75
Section 1 1.14 Avoidance of Publicly Traded Partnership Status.................................................75
iii
Section11.15 No Usury................................................................................................................76
Section 1 1.16 Dispute Resolution.................................................................................................76
Section 1 1.17 Remedies for Breach of this Agreement.:..............................................................78
Section 11.18 Exercise of Discretion by the General Partner. ...........................-.......-...............78
Section11.19 Timing. ..................................................................................................................78
Section 1 1.20 Miscellaneous. .......................................................................................................79
iv
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
MOLPUS WOODLANDS FUND IV,L.P.
THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT of
MOLPUS WOODLANDS FUND IV, L.P., a Delaware limited partnership, is entered into as of
October 22, 2013, by and among Molpus Woodlands Fund IV-GP, LLC, a Delaware limited
liability company, as the General Partner, those Persons that have executed this Agreement as
Limited Partners and Molpus Woodlands Fund IV-Original LP, LLC, a Delaware limited
liability company(the"Withdrawing Limited Partner").
RECITALS
A. The Partnership was formed pursuant to a Certificate of Limited Partnership,
dated March 19, 2013, which was executed by the General Partner and filed for recordation in
the office of the Secretary of State of the State of Delaware on March 22, 2013 and an
Agreement of Limited Partnership dated as of March 22, 2013, between. the General Partner and
the Withdrawing Limited Partner.
B. The parties desire to enter into this Agreement to permit the withdrawal of the
Withdrawing Limited Partner and the admission of the Limited Partners at the Initial Closing and
further to mare the modifications set out in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements herein
made, the parties hereto, intending; to be legally bound, hereby agree to amend and restate the
Limited Partnership Agreement of the Partnership in its entirety to read as follows:
ARTICLE 1.
DEFINI'T'IONS
Section 1.1 Specific Definitions. As used in this Agreement:
Act shall mean the Delaware Revised Uniform Limited Partnership Act, Title 6,
Delaware Code Aran., Section 17-101 et seq., as amended.
Additional Limited Partner shall mean any Person, other than a Substitute Limited
Partner, admitted to the Partnership as a Limited Partner after the Initial Closing.
Adjusted Capital Account Deficit means, with respect to any Partner, the deficit balance,
if any, in such Partner's Capital Account as of the end of the relevant Fiscal 'Year, after giving
effect to the following adjustments:
(a) Credit to such Capital Account any amounts which such Partner is
obligated to restore pursuant to any provision of this Agreement or is deemed to be
1
obligated to restore pursuant to the penultimate sentence of Treasury Regulation §§
1.704-2(g)(1) and 1.744-2(i)(5); and
(b) Debit to such Capital Account the items described in Treasury
Regulation §§ 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-l(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account Deficit is intended to comply with
the provisions of Treasury Regulation § 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
Advisory.Board shall have the meaning set forth in Section 6.19.
Advisory Board Metnber shall have the meaning set forth in Section 6.19.
Affiliate shall mean, with respect to any Person, any other Person with regard to which
the Person is controlling, controlled by or under common control with. For purposes of the
preceding sentence, "control" shall mean the power to direct the principal business, management
and activities of a Person, whether through ownership of voting securities, by agreement, or
otherwise.
Agreement shall mean this Amended and Restated Limited Partnership Agreement of
Molpus Woodlands Fund 1V, L.P., a Delaware limited partnership, including all schedules,
appendices, and exhibits hereto, as amended in accordance with the terms hereof.
AIFMD shall have the meaning set forth in Section 6.$(b).
Allocation Year means (i) the period commencing on the Effective Date and ending on
December 31, 2413, (ii) any subsequent twelve (12) month period commencing on January 1 and
ending on December 31, or(iii) any portion of the period described in clauses(i) or(ii)for which
the Partnership is required to allocate Profits, Losses, and other items of Partnership income,
gain,loss or deduction pursuant to Article 4 hereof.
Alternative Investment Vehicle shall have the meaning set forth in Section 6.9.
Appraisal Procedure shall have the meaning set forth in Section 6.12.
Assignee shall mean a Person that has acquired an interest in the Partnership (including
by means of a Transfer permitted under Article 7 , but that has not been admitted as a Partner.
Available Cash Flow shall mean, with respect to any period of operation of the
Partnership, the Partnership's funds available for distribution to the Partners,that is the aggregate
net amount of the following: (a) with respect to any period of operation, all cash receipts derived
from the operation of the Partnership and the ownership and operation of any Partnership
property received during such period, minus, (i) all costs and expenses of the Partnership paid
during such period (other than depreciation or other similar noncash expenses) including,
without limitation, debt service and all fees and allocations due to the General Partner, and minus
(ii) any other cash expenditures made by the Partnership as permitted or required under the terms
of this Agreement during such period, and minus (iii) funds required during such period for the
2
establishment of or addition to such reserves as the General Partner deems necessary or
appropriate for the proper operation of the business of the Partnership, and phis (iv) the amount
by which any such reserves are reduced by the General Partner, and minus (v) cash from Capital
Contributions; and (b) with respect to any sale, exchange, condemnation or other disposition of
all or part of the Partnership property, all cash proceeds from such sale, exchange, condemnation
or other disposition, or the occurrence of a casualty and the receipt of insurance proceeds in
excess of the amounts expended to repair or restore the damage, minus (i) all costs and expenses
of the Partnership in connection with such sale, exchange, condemnation, disposition or casualty,
minus (ii) all then due liabilities of the Partnership, including, without limitation, those liabilities
of the Partnership the terms of which require partial or complete satisfaction of the debt upon
such sale or conveyance and, in the event of the sale of all the property owned by the
Partnership, all liabilities of the Partnership, minus (iii) any prepayments of any indebtedness of
the Partnership which the General Partner deems appropriate, and, minus (iv) funds required for
the establishment of or addition to such reserves as the General Partner deems necessary or
appropriate for the proper operation of the business of the Partnership.
Bankruptcy shall mean, with respect to a Partner, a "VoluntarY Bankruptcy" or an
"Involuntary Bankruptcy." A "Voluntary Bankruptcy" means, with respect to any Partner (i) the
inability of such Partner generally to pay its debts as such debts become due, or an admission in
writing by such Partner of its inability to pay its debts generally or a general assigrnrrent by such
Partner for the benefit of creditors, (ii) the filing of any petition or answer by such Partner
seeking to adjudicate itself as bankrupt or insolvent, or seeking for itself any liquidation, winding
up, reorganization, arrangement, adjustment, protection, relief, or composition of such Partner or
its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking, consenting to, or acquiescing in the entry of an order for relief or the appointment of
a receiver, trustee, custodian, or other similar official for such Partner or for any substantial part
of its Property, or (iii) corporate action taken by such Partner to authorize any of the actions set
forth above. An "Involuntary Bankruptcy" means, with respect to any Partner, without the
consent or acquiescence of such Partner, the entering of an order for relief or approving a
petition for relief or reorganization or any other petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or other similar relief under
any present or future bankruptcy, insolvency, or similar statute, law, or regulation, or the filing of
any such petition against such Partner, which petition shall not be dismissed within ninety (90)
days, or without the consent or acquiescence of such Partner, the entering of an order appointing
a trustee, custodian, receiver or liquidator of such Partner or of all or any substantial part of the
Property of such Partner, which order shall not be dismissed within ninety (90) days.
Benefitted Limited Partner shall have the meaning set forth in Section 5.1(c).
Capital Account means, with respect to any Partner, the Capital Account maintained for
such Partner in accordance with the following provisions:
(a) To each Partner's Capital Account there shall be credited (A) such
Partner's capital contributions, (B) such Partner's distributive share of Profits and any
items in the nature of income or gain which are specially allocated pursuant to Section
4_3 hereof, and (C) the amount of any Partnership liabilities assumed by such Partner or
which are secured by any property distributed to such Partner. The principal amount of a
3
promissory note which is not readily tradable on an established securities market and
which is contributed to the Partnership by the maker of the note (or a Partner related to
the maker of the note within the meaning of Treasury Regulation § 1.704-1(b)(2)(ii)(c))
shall not be included in the Capital Account of any Partner until the Partnership makes a
taxable disposition of the note or until (and to the extent) principal payments are made on
the note, all in accordance with Treasury Regulation § 1.704-1(b)(2)(iv)(d)(2).
(b) To each Partner's Capital Account there shall be debited (A) the
amount of cash and the Gross Asset Value of any property distributed to such Partner or
on behalf of such Partner (including any amounts withheld or withholding taxes paid on
behalf of such Partner) pursuant to any provision of this Agreement, (B) such Partner's
distributive share of Losses and any items in the nature of expenses or losses which are
specially allocated pursuant to Section 4.3 hereof, and (C) the amount of any liabilities of
such Partner assumed by the Partnership or which are secured by any property
contributed by such Partner to the Partnership.
(c) In the event all or a portion of a Partner's Partnership interest is
transferred in accordance with the terms of this Agreement, the transferee shall succeed
to the Capital Account of the transferor to the extent it relates to the transferred Interest;
and
(d) In determining the amount of any liability for purposes of
subparagraphs (a) and (b) above, there shall be taken into account Code Section 752(c)
and any other applicable provisions of the Code and Treasury Regulations.
The foregoing provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Treasury Regulation § 1.704-1(b),
and shall be interpreted and applied in a manner consistent therewith. In the event the General
Partner shall determine that it is prudent to modify the manner in which the Capital Accounts, or
any debits or credits thereto (including, without limitation, debits or credits relating to liabilities
which are secured by contributed or distributed property or which are assumed by the Partnership
or the Partners), are computed in order to comply with Treasury Regulation § 1.704-1(b), the
General Partner may make such modification, provided that it does not have a material effect on
the amounts distributable to any Partner pursuant to this Agreement upon the dissolution of the
Partnership. The General Partner also shall (i) make any adjustments that are necessary or
appropriate to maintain equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the Partnership's balance sheet, as computed for book purposes,
in accordance with Treasury Regulation § 1.704-1(b)(2)(iv)(q), and (ii) make any appropriate
modifications in the event unanticipated events might otherwise cause this Agreement not to
comply with Treasury Regulation § 1.704-1(b), provided that, to the extent that any such
adjustment is inconsistent with other provisions of this Agreement and would have a material
adverse effect on any Limited Partner, such adjustment shall require the consent of such Limited
Partners.
Capital Commitment shall have the meaning set forth in Section 3.1(a).
4
Capital Contribution shall mean, for any Partner, the sum of the net amount of cash and
the Fair Market Value of any other property (determined as of the time of contribution and net of
liabilities secured by such property that the Partnership assumes or to which the Partnership's
ownership of the property is subject) contributed by such Partner to the capital of the Partnership.
The term "capital contribution" (where not capitalized) shall mean any contribution to the capital
of the Partnership valued in accordance with the rules set forth in the preceding sentence.
Carried Interest Distribution shall have the meaning set forth in Section 5.6.
Change of Control shall have the meaning set forth in Section 7.6ffl.
Close of Business shall mean 5:00 p.m., local time,in Jackson, Mississippi.
Code shall mean the United States Internal Revenue Code of 1986, as amended.
Combined Li►nited.Partner shall mean any Limited Partner in the Partnership or limited
partner(or similar member) in the Group IV Funds.
Combined Partners shall mean the Combined Limited Partners and the General Partner.
Commitment Period shall mean the period ending on the third anniversary of the Final
Closing, or earlier as provided in this Agreement.
.Defaulting Limited Partner shall have the meaning set forth in Section 3.4(a}.
Depreciation means, for each Fiscal Year, an amount equal to the depreciation,
amortization, or other cost recovery deduction allowable for federal income tax purposes with
respect to an asset for such Fiscal Year, except that if the Gross Asset Value of an asset differs
from its adjusted basis for federal income tax purposes at the beginning of such Fiscal Year,
Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value
as the federal income tax depreciation, amortization, or other cost recovery deduction for such
Fiscal Year bears to such beginning adjusted tax basis; provided, however, that if the federal
income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year is
zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using
any reasonable method selected by the General Partner.
Derivative Partnership Interest shall mean any actual, notional or constructive interest
in, or right in respect of, the Partnership (other than a Partner's total interest in the capital,profits
and management of the Partnership) that, under Treasury Regulation Section 1.7704-1(a)(2), is
treated as an interest in the Partnership for purposes of Section 7704 of the Code. Pursuant to the
foregoing, "Derivative Partnership Interest" shall include any financial instrument that is treated
as debt for federal income tax purposes and (i) is convertible into or exchangeable for an interest
in the capital or profits of the Partnership; or (ii) provides for one or more payments of
equivalent value.
Dissolution shall mean, with respect to a legal entity other than a natural person, that
such entity has "dissolved" within the meaning of the partnership, corporation, limited liability
company,trust or other statute under which such entity was organized.
5
Distribution .Subject to Return shall have the meaning set forth in Section 5.5(a).
Effective Date shall mean the date first written above.
ERISA shall mean the United States Employee Retirement Income Security Act of 1974,
as amended, including the regulations promulgated thereunder.
ERISA Limited Partner shall mean any Limited Partner which is: a "benefit plan,
investor" (within the meaning of such term as defined in Section 3(42) of ERISA, including,
without limitation, (i) any "employee benefit plan" within the meaning of Section 3(3) of ERISA
that is subject to Part 4 of Subtitle B (Sections 401 et seq.) of Title I of ERISA; (ii) any plan to
which Section 4975 of the Code applies; or (iii) any entity whose underlying assets include plan
assets by reason of a plan investment in the entity.
ERISA. Opinion shall have the meaning set forth in Section 3.2(a)(ii).
Fair Market Value shall have the meaning set forth in Section 6.12(0.
Final Closing shall have the meaning set forth in Section 3.1(b).
Final Regulation shall mean the United States Department of Labor's Final Regulation
as in effect on the date of this Agreement and as amended subsequent to the date of this
Agreement and applicable to the Fund relating to the definition of "plan assets" (29 C.F.R.
§2510.3-101).
Fiscal Year shall mean (i) the period commencing on the Effective Date and ending on
December 31, 2013, (ii) any subsequent twelve-month period commencing on January 1 and
ending on December 31, and (iii) the period commencing on the immediately preceding January
I and ending on the date on which all Property is distributed to the Partners pursuant to Article 8
hereof
Fully Invested shall mean, with respect to the Partnership, the condition that shall apply
from and after the first date on which the sum of the following amounts is equal to at least
seventy-five percent (75%) of the aggregate Capital Commitments of the Partners: (i) the
aggregate cost (as determined under GAAP) that the Partnership has incurred or committed or
reserved for the acquisition of Portfolio Properties through the time of determination; (ii) any
additional cost (as determined under GAAP) that the Partnership is contractually or legally
committed to incur for the acquisition of Portfolio Properties; (iii) the aggregate amount applied
by the Partnership through the time of determination to pay Partnership Expenses; and (iv) the
aggregate amount designated by the General Partner as a reasonable reserve for the payment of
Partnership Expenses not yet paid (whether or not incurred as of the time of determination).
GAAP shall mean United States generally accepted accounting principles, consistently
applied.
General Partner shall mean Molpus Woodlands fund IV-GP, LLC, a Delaware limited
liability company.
6
Governmental Plan Rule shall mean, with respect to any Limited Partner, the governing
body of which is a governmental or quasi-governmental agency authorized to adopt rules or
policies having the force of law, any such rule or policy (unless specifically required by statute)
that constitutes or gives effect to a financial, economic, portfolio or investment management plan
or strategy.
Gross Asset Valve means, with respect to any asset, the asset's adjusted: basis for federal
income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a Partner to
the Partnership shall be the gross fair market value of such asset, as deternined by the
contributing Partner and the General Partner;
(b) The Gross Asset Values of all Partnership assets shall be adjusted to equal
their respective gross fair market values (taking Code Section 7701(g) into account), as
determined by the General Partner, as of the following times: (A)the acquisition of an additional
interest in the Partnership by any new or existing Partner in exchange for more than a de minimis
capital contribution; (13) the grant of an interest in the Partnership (other than a de minirnis
interest) as consideration for the provision of services to or for the benefit of the Partnership by
an existing Partner acting in a partner capacity, or by a new Partner acting in a partner capacity
in anticipation of being a Partner; (C) the distribution by the Partnership to a Partner of more
than a de minimis amount of Property as consideration for an interest in the Partnership; and (D)
the liquidation of the Partnership within the meaning of Treasury Regulation § 1.704-
1(b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses (A), (13) and (C) above
shall be made only if the General Partner reasonably determines that such adjustments are
necessary or appropriate to reflect the relative economic interests of the Partners in the
Partnership;
(c) The Gross Asset Value of any Partnership asset distributed to any
Partner shall be adjusted to equal the gross fair market value (taking into account Code Section
7701(g) into account) of such asset on the date of distribution as determined by the General
Partner; and
(d) The Gross Asset Values of Partnership assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code
Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken
into account in determining Capital Accounts pursuant to Treasury Regulation. § 1.704-
1(b)(2)(iv)(m) and subparagraph (f) of the definition of "Profits" and "Losses" and Section
4.3 hereof; provided, however, that Gross Asset Values shall not be adjusted pursuant to
this subparagraph (d) to the extent the General Partner determines that an adjustment pursuant
to subparagraph (b) hereof is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this subparagraph (d). if the Gross Asset
Value of an asset has been determined or adjusted pursuant to subparagraphs (a), (b) or (d)
hereof, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into
account with respect to such asset for purposes of computing Profits and Losses.
7
Gross Negligence has the meaning ascribed to such term under the laws and precedents
of the State of Delaware.
Group IV Funds and Group IV Fund shall have the meaning set forth in Section 6.7(a).
Group IVLP Commitments shall have the meaning set forth in Section 63(a).
Hurdle Rate shall have the.meaning set forth in Section 3.2(b)(i).
Hurdle Rate Contribution shall have the meaning set forth in Section 3.2 b i .
Idle Funds Investments shall mean any of the following held by the Partnership for the
short-term investment of Partnership cash: (i) debt securities issued or backed by the United
States or a State; (ii) investment grade rated commercial paper; (iii) certificates or other
evidences of deposit in any commercial bank holding over $500 million in deposits; (iv) money
market or similar mutual fund interests; and (v) other highly liquid investments providing for
appropriate safety of principal .(as determined by the General Partner in its reasonable
discretion).
Indemnified Person shall mean: (i) the General Partner and the Liquidating Partner; and
(ii) each equityholder, manager, member, director, officer, employee, or agent of a Person
described in the preceding clause(i). In addition, "Indemnified Person"shall mean any employee
or agent of the Partnership to the extent determined by the General Partner in its reasonable
discretion. "Indemnified Person7 shall also include any Advisory Board Member and any
Limited Partner which has selected an Advisory Board Member. A Person that has ceased to
hold a position that previously qualified such Person as an Indemnified Person shall be deemed
to continue as an indemnified Person with regard to all matters arising or attributable to the
period during which such Person held such position.
Indirect Owner shall mean, with respect to a Limited Partner, any Person that holds ari
equity interest in such Limited Partner, either directly or indirectly through a nominee or agent or
through one or more intervening entities qualifying as partnerships, grantor trusts or S
corporations (as such qualification is determined for federal income tax purposes).
Initial Closing shall mean the first closing at which a Limited Partner is admitted to the
Partnership pursuant to Section 3.1(b).
Investment Company Act shall mean the United States Investment Company Act of
1940, as amended, including the rules and regulations promulgated thereunder.
Involuntary Bankruptcy shall have the meaning set forth in the definition of Bankruptcy.
Ivey Executives shall mean the following: Richard Molpus, President; Bob Lyle,
Executive Vice President; Terrell Winstead, Chief Financial Officer; Edgar Marshall, Vice
President — Business Development; Ken Sewell, Chief Operating Officer; Charlie Manogue,
Vice President—Acquisitions; and Michael Cooper, General Counsel.
Key Man Event shall have the meaning set forth in Section 7.6W.
8
Limited Partner shall mean any Person admitted to the Partnership by the General
Partner (i) as a Limited Partner or Additional Limited Partner pursuant to Article 3, or (ii) as a
Substitute Limited Partner pursuant to Article 7, but in each case only if such Person has not
become a Withdrawn Limited Partner. A Limited Partner shall not cease to be a Limited Partner
or lose its non-economic rights in respect of the Partnership solely by virtue of having transferred
to one or more Persons its entire economic interest in the Partnership.
Liquidating.Partner shall mean the General Partner unless another Person is selected to
serve as Liquidating Partner pursuant to Section 8.2.
Liquidating Trust shall have the meaning set forth in Section 8.4(4).
Majority In Interest of the Partners or the Limited Partners shall mean one Partner or
one Limited. Partner or a group of Partners or Limited Partners (or Combined Partners or
Combined Limited Partners, as applicable) whose aggregate Capital Commitments at the time of
determination (or Group IV LP Commitments, as applicable) exceed fifty-one percent (511/o) of
the total Capital Commitments (or Group IV LP Commitments, as applicable) of all the Partners
or Limited Partners or Combined Partners or Combined Limited Partners, as applicable, at such
time. Affiliates of the General Partner and any Defaulting Limited Partners, as applicable, shall
be counted for purposes of calculating the "Majority-in-Interest of the Partners." Affiliates of
the General Partner and any Defaulting Limited Partners, as applicable, however, shall not be
counted for purposes of calculating the "Majority-in-Interest of the Limited Partners."
Management Fee shall have the meaning set forth in Section 6.10(c).
.Material Misconduct shall mean, with respect to an Indemnified Person (other than an
Advisory Board Member or a Limited Partner which has selected an Advisory Board Member),
Gross Negligence, willful and material breach of this Agreement, fraud, knowing failure to
comply with applicable laws or the commission of a felony (except in the case of a felony where
the Indemnified Person reasonably believed that no such felony would occur in consequence of
such Indemnified Person's action or inaction, as the case may be) or final adjudication of a
breach of fiduciary duties. Material Misconduct shall be limited, with respect to an Advisory
Board Member or a Limited Partner which has selected an Advisory Board Member, to any bad
faith actions or omissions with respect to the Partnership or any of the Group IV Funds. For
purposes of the preceding sentences: (i) an Indemnified Person shall be deemed to have acted in
good faith and without negligence with regard to any action or inaction that is taken in
accordance with the advice or opinion of an attorney, accountant or other expert advisor engaged
by the Partnership so long as such advisor was selected with reasonable care and the Indemnified
Person made a good faith effort to inform such advisor of all the facts pertinent to such advice or
opinion; and (ii) an Indemnified Person's reliance upon the truth and accuracy of any written
statement, representation or warranty of a Partner shall be deemed to have been reasonable and
in good faith absent such Indemnified Person's actual knowledge that such statement,
representation or warranty was not, in fact, true and accurate.
Nonrecourse Deductions has the meaning set forth in Treasury Regulation §§ 1.704-
2(b)(1) and 1.704-2(c). The amount of Nonrecourse Deductions for any Fiscal Year shall
generally equal the net increase, if any, in the amount of Partnership Minimum Gain for that
9
Fiscal Year, reduced (but not below zero) by the aggregate distributions during the year of
proceeds of Nonrecourse Liabilities that are allocable to an increase in Partnership Minimum
Gain, with such other modifications as provided in Treasury Regulation § 1.704-2(c).
Nonrecourse Liability has the meaning set forth in Treasury Regulation § 1.704-2(b)(3).
Other Funds shall mean any other investment funds (whether a commingled fund,
separate account or other similar investment vehicle) in which the General Partner or any of its
members or Affiliates holds less than fifteen percent (15%)of the economic interests and plays a
principal investment management role.
Parallel Fund shall have the meaning set forth in Section b.7(a}.
Parallel Fund Investors shall have the meaning set forth in Section 5.7{a3.
Partially Adjusted Capital Account shall mean with respect to any Partner and any Fiscal
Year, the Capital Account of such Partner at the beginning of such Fiscal Year, adjusted as set
forth in the definition of Capital Account for all contributions and distributions during such year
and all special allocations pursuant to Section 4.3 (other than Section 4.3(iki) and (ii)) with
respect to such Fiscal Year, but before giving effect to any allocations of Profits and Losses for
such Fiscal Year pursuant to Section 4.1 and Section 4.2.
Partner shall mean any General Partner or Limited Partner, as the context shall require.
Except where the context requires otherwise, a reference in this Agreement to "the Partners"
shall mean all of the Partners (taken together or acting unanimously, as appropriate). For
provisions addressing certain limited rights of Assignees with regard to assigned Interests, see
Section 7.7.
Partner Nonrecourse Debt has the meaning set forth in Treasury Regulation § 1.704-
2(b)(4).
Partner Nonrecourse Debt 1lfininzum Gaits means an amount, with respect to each
Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such
Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance
with Treasury Regulation §1.704-2(i)(3). In the case of Partner Nonrecourse Debt for which the
creditor's recourse against the Partnership is not limited to particular assets of the Partnership,
until such time as there is regulatory guidance on the determination of minimum gain with
respect to such liabilities, all such liabilities of the Partnership shall be treated as a single liability
and allocated to the Partnership's assets using any reasonable basis selected by the General
Partner.
Partner Nonrecourse,Deductions has the same meaning set forth in Treasury Regulation
§§ 1.704-2(i)(1)and 1.704-2(i)(2).
Partnership shall mean Molpus Woodlands Fund IV, L.P., a Delaware limited
partnership.
Partnership Expenses shall have the meaning set forth in Section 6.8(b).
10
Partnership Mininuan Gain has the meaning set forth in Treasury Regulation §§ 1.704-
2(b)(2) and 1.704-2(d).
,Percentage Interest shall mean, with respect to any Partner as of any date, the interest
(expressed as a percentage) in the capital of the Partnership, equal to a fraction of which the
numerator is the Partner's Capital Contribution and the denominator is the aggregate of the
Capital Contributions of all Partners as of such date, after giving effect to applicable adjustments
pursuant to Section 3.4 of this Agreement. The Percentage Interest of the General Partner and the
Percentage Interest of each Limited Partner are set forth on Schedule A, as of the date indicated
therein.
Permanent Incapacity shall mean, with respect to an individual, that such individual
suffers a mental or physical disability which, as of the time of determination, renders such
individual incapable of performing such individual's duties under this Agreement and is
substantially certain to continue to render such individual incapable of performing such duties
for a continuous period of at least six (6)months following the date of determination.
.Person shall mean an individual, partnership, corporation, limited liability company,
unincorporated organization, trust, joint venture, governmental agency, or other entity, whether
domestic or foreign.
Placement Agent shall mean those parties the services of which were utilized by certain
Limited Partners investing in the Partnership.
Plan Assets shall mean that ER.ISA Limited Partners shall be considered to have acquired
an undivided interest in each of the underlying assets of the Partnership within the meaning of
the Final Regulation.
Portfolio Properties shall mean all Properties (not including Idle Funds Investments)
held by the Partnership.
Principal Office shall have the-meaning set forth in Section 2.4.
Priority Return means a sum equal to seven percent (7%) per annum, determined on the
basis of a year of 365 or 366 days, as the case may be, for the actual number of days in the period
for which the Priority Return is being determined, cumulative but not compounded, of the
average daily balance of the aggregate Unreturned Capital of the Partners from time to time
during the-period to which the Priority Return relates, commencing on the first date ally Limited
Partner is admitted to the Partnership.
Profits and Losses means, for each Fiscal Year, an amount equal to the Partnership's
taxable income or loss for such Fiscal Year, determined in accordance with Code Section 703(a)
(for this purpose, all items of income, gain, loss, or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments (without duplication):
11
(a) Any income of the Partnership that is exempt from federal income tax and
not otherwise taken into account in computing Profits or fosses pursuant to this definition of
"Profits"and "Losses"shall be added to such taxable income or loss;
(b) Any expenditures of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury
Regulation § 1.704-I(b)(2)(b)(6), and not otherwise taken into account in computing Profits or
Losses pursuant to this definition of"Profits"and"Losses" shall be subtracted from such taxable
income or loss;
(c) In the event the Gross Asset Value of any Property is adjusted pursuant to
subparagraphs (b) or (c) of the definition of "Gross Asset Value," hereof, the amount of such
adjustment shall be treated as an item of gain (if the adjustment increases the Gross Asset Value
of the asset) or an item of Ioss (if the adjustment decreases the Gross Asset Value of the asset)
from the disposition of such asset and shall be taken into account for purposes of computing
Profits or Losses;
(d) Gain or loss resulting from any disposition of Property with respect to
which gain or loss is recognized for federal income tax purposes shall be computed by reference
to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis
of such property differs from its Gross Asset Value;
(e) In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss, there shall be taken into
account Depreciation for such Fiscal Year, computed in accordance with the definition of
"Depreciation";
(f) To the extent an adjustment to the adjusted tax basis of any Partnership
asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Treasury
Regulation § 1304-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts
as a result of a distribution other than in complete liquidation of a Partner's interest in the
Partnership, the amount of such adjustment shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such basis) from the
disposition of such asset and shall be taken into account for purposes of computing Profits or
Losses; and
(g) Any items which are specially allocated pursuant to Section 43 hereof
shall not be taken into account in computing Profits or Losses. The amounts of the items of
Partnership income, gain, loss, or deduction available to be specially allocated pursuant to
Section 4.3 hereof shall be determined by applying rules analogous to those set forth in
subparagraphs(a) through (f) above.
Properties shall mean real and personal property acquired by the Partnership, including
cash, and any improvements thereto, and includes both tangible and intangible property. Such
Properties may be held directly by the Partnership or indirectly through one or more investment
vehicles controlled by the Partnership or the General Partner.
Reduced Carried InterestAfnount shall have the meaning set forth in Section 5.1(e).
12
Regulated Plan shall mean, with respect to each specific ERISA Limited Partner, any
employee benefit plan (within the meaning of Section 3(3) of ERISA), or other plan subject to
Part 4 of Subtitle B of Title I of ERISA or Section 4975 of the Code, all or a portion of the assets
of which are held by such ERISA Limited Partner.
Securities Act shall mean the United States Securities Act of 1933, as amended,
including the rules and regulations promulgated thereunder.
Significant Participation Test shall mean a test that is satisfied if ERISA Limited
Partners constitute or are expected to constitute (as determined by the General Partner in its
reasonable discretion) at least twenty-five percent(25%) of the interests of the Limited Partners.
State shall mean any constituent state of the United States, as well as the District of
Columbia.
Subscription Agreement shall mean an instrument executed by a Person intending to
become a Limited Partner concerning such Person's acquisition of an interest in the Partnership,
Capital Commitment, and related matters. An instrument purporting to be a Subscription
Agreement shall not be treated as such for purposes of this Agreement unless and until it has
been accepted and approved by the General Partner.
Substitute Limited PartWer shall mean a transferee of all or a portion of a Limited
Partner's interest in the Partnership that becomes a Limited Partner and succeeds, to the extent of
the interest transferred, to the rights and powers and becomes subject to the restrictions and
liabilities of the transferor Limited Partner.
Target Capital Account means, with respect,to any Partner and for any Fiscal Year an
amount equal to the hypothetical distributions such Partner would receive as described in the
next sentence, reduced by the aggregate amount of Management Fees specially allocated to that
partner pursuant to Section 4.3 hereof for all periods, minus the Partner's share of Partnership
Minimum Gain determined pursuant to Regulations Section 1.704-2(g), minus the Partner's
share of Partner Nonrecourse Debt Minimum Gain determined in accordance with Regulations
Section 1.704-2(i)(5), and, in the case of the General Partner, minus the amount, if any, the
General Partner would be obligated to return to the Partnership pursuant to Section 5.6 if the
Partnership were liquidated at such time, and in the case of a Limited Partner,plus the amount, if
any, that would be distributed to the Limited Partner pursuant to the final sentence of Section 5.6
if the Partnership were liquidated at such time. The hypothetical distribution to a Partner is equal
to the aknount that such Partner would receive if all Partnership assets were sold for cash equal to
the sum of (i) their Gross Asset Value and (ii) the aggregate amount of Management Fees
specially allocated under Section 4.3(h) hereof for all periods, all Partnership liabilities were
satisfied to the extent required by their terfns (limited, with respect to Nonrecourse Liability or
Partner Nonrecourse Debt, to the Gross Asset Value of the assets securing each such liability)
and the remaining assets were distributed in full to the Partners pursuant to Section 5.1 b of the
Agreement, all as of the last day of such year.
Tax Matters Partner has the meaning set forth in Section 9.3(a) hereof.
Tax Percentage shall have the meaning set forth in Section 5.1 a ii .
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Term shall have the meaning set forth in Section 2.2. Where not capitalized, "tern" shall
mean the entire period of the Partnership's existence, including any period of winding-rip and
liquidation following the Dissolution of the Partnership pursuant to Section 8.1.
Termination shall mean, with respect to a legal entity other than a natural person, that
such entity has Dissolved, completed its process of winding-up and liquidation, and otherwise
ceased to exist.
Transfer shall mean any sale, exchange, transfer, gift, encumbrance, assignment, pledge,
mortgage, hypothecation or other disposition, whether voluntary or involuntary.
Treasury Regulation shall mean a regulation issued by the United States Department of
the Treasury and relating to a matter arising under the Code.
Two-Thirds Interest of the Partners or Limited Partners shall mean a group of Partners
or Limited Partners (or Combined Partners or Combined Limited Partners as applicable) whose
aggregate Capital Commitments at the time of determination equal or exceed two-thirds of the
total Capital Commitments (or Group IV Commitments as applicable) of all the Partners or
Limited Partners (or Combined Partners or Combined Limited Partners as applicable), as
applicable, at such time.
United States shall mean the United States of America.
Unreturned Capital with respect to any Partner means, as of any day, the Partner's
Capital Contributions adjusted as follows:
(i) Increased by the amount of any Partnership liabilities that, in
connection with distributions pursuant to Section 5.1(b)(ii) or distributions
pursuant to Section 8.3(d)(iii) to the extent that such distributions are attributable
to the latter section's reference to Section 5.1 b ii , are assumed by such Partner
or are secured by any Partnership Property distributed to such Partner; and
(ii) Reduced by the amount of(A) cash and the Gross Asset Value of
any Partnership Property distributed to such Partner pursuant to: (I) Section
5.1 b ii and (II) Section 8.3(d)(iii) to the extent that such distributions are
attributable to the latter section's reference to Section 5.1 b ii and (B) any
Liabilities of such Partner assumed by the Partnership or that are secured by any
property contributed by such Partner to the Partnership.
In the event any Partner transfers all or any portion of his Interest in the Partnership in
accordance with the terms of this Agreement, his transferee shall succeed to the Unreturned
Capital of the transferor to the extent it relates to the transferred Interest.
Updated Capital Account shall mean, with respect to a Partner, such Partner's Capital
Account determined as if, immediately prior to the time of determination, all of the Partnership's
assets had been valued pursuant to Section 6.12 and any previously unallocated Profits or Losses
had been allocated pursuant to Article 4.
14
URL shall have the meaning set forth in Section 11.4.
Valuation Committee shall have the meaning set forth in Section-6.12(d).
Valuation Partner shall have the meaning set.forth in Section 6.12(a).
Voluntary Bankruptcy shall have the meaning set forth in the definition of Bankruptcy.
Withdrawal Event shall have the meaning set forth in Section 7.4(a).
Withdrawing Limited Partner shall have the meaning set forth in the introduction to this
Agreement.
Withdrawn Limited Partner shall have the meaning set forth in Section 7.4(a).
Section 1.2 General Usage. The section headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of this Agreement.
Except where the context clearly requires to the contrary: (a) each reference in this Agreement to
a designated "Section," "Article," "Schedule," "Exhibit," or "Appendix" is to the corresponding
Section, Article, Schedule, Exhibit, or Appendix of or to this Agreement; (b) instances of gender
or entity-specific usage (e.g., "his" "her" "its" "person" or "individual") shall not be interpreted
to preclude the application of any provision of this Agreement to any individual or entity; (c) the
word "or" shall not be applied in its exclusive sense; (d) "including" shall mean "including,
without limitation"; (e) references to laws, regulation's and other governmental rules, as well as
to contracts, agreements and other instruments, shall mean such rules and instruments as in effect
at the time of determination (taking into account any amendments thereto effective at such time
without regard to whether such amendments were enacted or adopted after the effective date of
this Agreement) and shall include all successor rules and instruments thereto; (f) references to
'T' or "dollars" shall mean the lawful currency of the United States; (g) references to "Federal"
or "federal" shall be to laws, agencies or other attributes of the United States (and not to any
State or locality thereof); (h) the meaning of the terms "domestic" and "foreign" shall be
determined by reference to the United States; (i) references to "days" shall mean calendar days;
references to"business days"shall mean all days other than Saturdays, Sundays and days that are
legal holidays in the State of Mississippi; 0) references to months or years shall be to the actual
calendar months or years at issue (taking into account the actual number of days in any such
month or year); and (k) days, business days and times of day shall be deteiTnined by reference to
local time in Jackson, Mississippi.
ARTICLE 2.
FORMATION
Section 2.1 Continuation and Name.
(a) The parties to this Agreement hereby agree to continue a limited
partnership pursuant to the provisions of the Act and in accordance with the further terms and
provisions of this Agreement. This Agreement amends and restates the Limited Partnership
15
Agreement dated as of March 22, 2013 between the General Partner and the Withdrawing
Limited Partner in its entirety.
(b) The name of the Partnership shall be"Molpus Woodlands Fund IV, L.P."
Section 2.2 Terin. The "Term" of the Partnership shall commence at tl�c tune of the
Initial Closing and shall continue until the Close of Business on the tenth (10') anniversary of
the Initial Closing; provided, however, that the General Partner, acting in its sole discretion by
written notice to the Limited Partners prior to the expiration of the then-current Terill, may
extend the Term for an additional two years; provided further, however, that the General Partner
may only extend the original ten-year Term for two two-year periods, for a total maximum Term
(as extended) ending on the fourteenth (141') anniversary of the Initial Closing. The General
Partner shall notify the Advisory Board of the second two-year extension of the Term and the
reasons therefor and the Advisory Board may object to such two-year extension in accordance
with Section 6.19 within thirty (30) days of such notice. In the event that the Advisory Board
objects to the second two-year extension, the Advisory Board may, upon a vote of a majority of
the members of the Advisory Board, make a non-binding written recommendation to the
Combined Limited Partners for termination of the Term as of the end of the first two-year
extension (the twelfth (12th) anniversary of the Initial Closing), provided that any such
termination of the Term by the Combined Limited Partners shall require a vote of a Majority-in-
Interest of the Combined Limited Partners (including Affiliates of the General Partner). Except
as specifically provided in Section 8.1, the Partnership shall not be Dissolved prior to the end of
its Term.
Section 2.3 Purpose and Scope. The purpose and scope of the Partnership shall be
to:
(a) Seek income and gain through the acquisition, holding, and distribution or
other disposition of Portfolio Properties, with a focus on the acquisition, holding, and distribution
or other disposition of timberland properties located in North America, either directly or through
one or more subsidiary investment vehicles;
(b) Manage the Portfolio Properties in accordance with the management
principles of the Sustainable Forestry Initiative ("SFl"), Forestry Stewardship Council or other
appropriate third-party certification programs and shall use its reasonable best efforts to have all
such Portfolio Properties third-party certified to the applicable certification program standards;
(c) Temporarily invest cash in Idle Funds Investments;
(d) Engage in such other activities as are customary to timber investment
funds; and
(e) Engage in any other lawful activities (including activities described in
Section. 6.2) determined by the General Partner to be necessary or advisable in fixrtherance of the
foregoing activities.
Section 2.4 Principal Office. The Partnership shall have a single "Principal Office"
which shall at all times be located within the United States. The Principal Office initially shall be
16
located at 654 N. State Street, Jackson, Mississippi 39202 and may thereafter be changed from
time to time by the General Partner upon notice to the other Partners.
Section 2,5 Delaware Office and Agent. The Partnership shall maintain a Delaware
registered office and agent for the service of process as required by the Act. In the event the
registered agent ceases to act as such for any reason or the registered office shall change, the
General Partner shall promptly designate a replacement registered agent or file a notice of
change of address, as the case may be.
Section 2.6 Names and Contact Information of the Partners. Set forth below the
name of each Partner on Schedule A shall be appropriate contact information for such Partner
(including such Partner's mailing address, telephone number, and facsimile number as well as, in
the case of a Partner that is an entity, the name or title of an individual to whore notices and other
correspondence should be directed), Each Partner shall promptly provide the Partnership with the
information required to be set forth for such Partner on Schedule A and shall thereafter promptly
notify the Partnership of any change to such information.
Section 2.7 Additional Documents.
(a) The General Partner shall cause to be executed, filed, recorded, published,
or amended any documents, as the General Partner in its reasonable discretion determines to be
necessary or advisable, (x) in connection with the formation, operation,Dissolution, winding-up,
or Termination of the Partnership pursuant to applicable law or any amendments to this
Agreement duly approved and adopted in accordance with this Agreement, or (y) to otherwise
give effect to the terms of this Agreement. The terms and provisions of each document described
in the preceding sentence shall be initially established and shall be amended as necessary to
cause such terms and provisions to be consistent with the terms and provisions of this
Agreement.
(b) Each Limited Partner hereby grants to the General Partner a special power
of attorney (with ,full rights of assignment) irrevocably appointing the General Partner as the
granting Partner's attorney-in-fact with power and authority to execute or acknowledge, in the
granting Partner's name and on its behalf, any document described in Section 2.Z(a). Each
special power of attorney granted under this Section 2.7(b) is coupled with an interest and is
intended to secure the obligation of each Limited Partner under this Agreement and/or a relevant
interest in the property and shall not be revoked by the Bankruptcy, death, disability or other
event of legal incapacity of the granting Partner.
Section 2.8 'Title to Property. Title to all Partnership property shall be held in the
name of the Partnership or a subsidiary of the Partnership; provided, however, that publicly
traded securities and Idle Funds Investments may be held in "street name" or through a similar
arrangement with a reputable financial institution. Nothing in this Section 2.8 shall be deemed to
prevent the Partnership from co-investing in Properties, either directly or through a subsidiary or
special purpose entity owned jointly with.a Parallel Fund in accordance with Section 6.7 or in
connection with an Alternative Investment Vehicle in accordance with Section 6.9.
17
ARTICLE 3.
CAPITALIZATION
Section 3.1 Capital Commitments; Admission of Partners.
(a) Capital Commitments. Each Limited Partner, upon admission to the
Partnership, shall be deemed to have made a "Capital Commitment" equal to the amount
specified as such in the Subscription Agreement relating to such Limited Partner. The Capital
Commitment of the General Partner and the capital commitment by the General Partner to any
Parallel Fund, in the aggregate, shall equal a minimum of $2,000,000. In connection with
closings subsequent to the Initial Closing, the General Partner may adjust the allocation, but not
the total minimum amount, of its Capital Commitment between the Partnership and any Parallel
Fund. The Capital Commitment of the General Partner shall be made as a Limited Partner on the
same basis as the other Limited Partners not investing through a Placement Agent. The Capital
Commitment of each Partner shall be set forth on Schedule A. Except as specifically provided in
this Agreement, the Capital Commitment of a Partner: (i) shall represent the maximum aggregate
amount of cash and property that such Partner shall be required to contribute to the capital of the
Partnership; and (ii) shall not be changed during the term of the Partnership.
(b) Admission of Partners. The General Partner expects to hold an Initial
Closing of the Partnership and commence admitting Limited Partners upon its acceptance and
approval of Subscription Agreements representing aggregate Capital Commitments of
approximately $200 million inclusive of Capital Commitments to any Parallel Funds; provided,
however, that the General Partner play, in its sole discretion, determine to hold an Initial Closing
of the Partnership with aggregate Capital Commitments of a lesser amount. Thereafter, the
General Partner may admit Additional Limited Partners upon acceptance by the General Partner
of frilly executed subscription documents, which will be deemed to occur as of the first day of
any month during which the General Partner accepts such subscription documents or accepts
increases in the Capital Commitments of existing Limited Partners, on the same terms as applied
at the Initial Closing (subject to Section 3.2(l?). Such Additional Limited Partners shall be
admitted to the Partnership at one or more additional closings, with the final closing being held
not later than the Close of Business on the date that is twelve (I2) months after the Initial
Closing ("Final Closing'). The target size of the Partnership's $500 million in Capital
Commitments is subject to increase or decrease at the discretion of the General Partner.
Section 3.2 Capital Contributions. All capital contributions shall be in cash. The
obligation of a Partner to satisfy its Capital Commitment shall be without interest (other than as
provided in Section 3.2(b) and Section 3.4.
(a) Capital Contributions b Limited Partners.
W Subject to Section 12(a)CH) and Section 32(b)(i), capital
contributions in respect of and in proportion. to (but not to exceed) the Limited
Partners' Capital Cornmitnients shall be due and payable, upon not less than
fifteen (15) days prior notice, at such times and in such amounts as shall be
specified in one or more capital calls issued by the General Partner. Any and all
18
capital call notices issued by the General Partner shall include information
regarding the purpose of such capital call, such as to fund an investment or to pay
expenses (and if so, which expenses) of the Partnership.
(ii) If the General Partner determines that the Partnership may satisfy .
the Significant Participation Test, the General Partner shall give written notice to
all ERISA Limited Partners at least thirty (30) days prior to the date on which the
Partnership may satisfy the Significant Participation Test. In the event the notice
contemplated by the immediately preceding sentence is given, the Partnership will
deliver to each ERISA Limited Partner, along with such notice, an opinion of
counsel to the Partnership (in form and substance reasonably acceptable to such
ERISA Limited Partner and its counsel) that states the Partnership qualifies under
the Final Regulation as a "real estate operating company" or, in the alternative, as
"an operating company," if it does not qualify as a real estate operating company.
Thereafter, the Partnership shall give each ERISA Limited Partner an updated
opinion of counsel (the "ERISA Opinion") on the initial valuation date (where
such notice is given prior to the Partnership's initial valuation date under the Final
Regulation) and then annually within thirty (30) days after the end of the
Partnership's annual valuation period under the Final Regulation. The General
Partner shall not allow the Partnership to satisfy the Significant Participation Test
until each ERISA Limited Partner has either (A) consented to the Partnership
satisfying the Significant Participation Test or(B) withdrawn from the Partnership
pursuant to the terms of Section 3.6; provided, however, that the General Partner
may issue capital calls to ERISA Limited Partners in amounts which are non-
proportionate with the Capital Commitments of such ERISA Limited Partners as
compared with the Capital Commitments of all other Limited Partners in order to
prevent the Partnership from satisfying the Significant Participation Test;
provided, further, that any such reduced capital calls to ERISA Limited Partners
shall reduce the amount called from each such ERISA Limited Partner on a
proportionate basis. Subject to the provisions of the preceding sentence, if the
Significant Participation Test is satisfied, the Limited Partners' initial capital
commitment installment following the date the Significant Participation Test is
satisfied shall be due on the date upon which the Partnership makes its first
investment in Portfolio Properties permitting the Partnership to qualify as "an
operating company" or a "real estate operating company" under the Final
Regulation. The General Partner shall use its best efforts to provide Limited
Partners with at least fifteen (15) days notice of the capital contribution due date
under this Section 3.2(a)(ii). In the event that the Partnership receives a capital
contribution from an ERISA Limited Partner in anticipation of an investment in
Portfolio Properties that does not occur as scheduled, the General Partner shall
take such reasonable steps as are necessary to prevent the Partnership from
holding Plan Assets (including the return of such capital contribution, in which
case such contribution shall be treated for all purposes under this Agreement as if
never made by the ERISA Limited Partner).
(iii) Following the Close of Business at the end of the Commitment
Period, the General Partner shall not issue capital calls for the purpose of enabling
19
the Partnership to make new investments in Portfolio Properties; provided,
however, that the General Partner shall not be prohibited from issuing capital calls
pursuant to this Section 3.2(a)(iii) for the purpose of enabling the Partnership: (A)
to pay amounts owing or which may become due under any loan arrangement or
credit facility of the Partnership in place as of such date; (B) to make investments
in Portfolio Properties identified to the Limited Partners by the General Partner
within the Commitment Period, so long as any such capital calls are made, and the
acquisition of such Portfolio Properties are closed,on a date on or prior to the date
which is six (6) months after the end of the Commitment Period; (C) to effect
follow on or additional investments in existing Portfolio Properties up to a
maximum of 10% of aggregate Capital Commitments; (D) to enable the
Partnership to acquire the Defaulting Limited Partner's partnership interest in the
Partnership; or (E) to pay Partnership Expenses, or to establish reserves for the
payment of such Partnership Expenses.
(iv) In the event a Portfolio Property is sold or refinanced during the
Commitment Period, and capital from such sale or refinancing is distributed to the
Partners in accordance with the terms of this Agreement, such amounts
constituting a return of capital shall be added to unfunded Capital Commitments
and shall be available for capital calls by the General Partner pursuant to this
Section 3.2.
(b) Late Admissions;Xttcreases in Capital Commitments.
(i) Subject to Section 3.2(b)01i in the event an Additional Limited
Partner is admitted to the Partnership after the Initial Closing, such Additional
Limited Partner shall, at the time of its Capital Contribution(s) to the Partnership,
pay to the Partnership in addition to its regular Capital Contribution in respect of
its Capital Commitment, an amount equal to the product of: (A) such Capital
Contribution(s), and (B) the Hurdle Rate (as hereinafter defined) calculated with
regard to the period beginning with the Initial Closing and ending with the date on
which the Additional Limited Partner makes such Capital Contribution; provided,
however, that no such Hurdle Rate Contribution (as defined below) shall be
required if no capital calls have been issued during the period beginning on the
date of the Initial Closing and ending on the date such Additional Limited Partner
is admitted to the Partnership. The "Hurdle Rate" shall be equal to the 3-Month
London Interbank Offered Rate (LIBOR) plus two percent (2%) per annum, and
the Hurdle Rate applicable to a given Capital Contribution shall be calculated as
of the date of such Additional Limited Partner's Capital Contribution. Solely for
federal, state and local income tax purposes (but not for purposes of determining
amounts to be credited against an Additional Limited Partner's Capital
Commitment), such Hurdle Rate amount shall be treated as a capital contribution
by such additional Limited Partner and shall be referred to as that Additional
Limited Partner's "Hurdle Rate Contribution." Following the Initial Closing, the
General Partner will call capital in such a way so as to equalize, as closely as
reasonably possible, the percentage of called capital of Limited Partners' Capital
Commitments. As additional Limited Partners are admitted as Limited Partners
20
and their Capital Commitments are called, the interests of those Limited Partners
who participated in the Initial Closing in the particular portfolio properties
acquired at or in connection with the Initial Closing will be diluted, with the
Limited Partners who participated in the Initial Closing, together with all other
Limited Partners admitted thereafter, having an indirect interest in all Portfolio
Properties acquired by the Fund, whether at the Initial Closing or thereafter.
(ii) Hurdle Rate Contributions shall be paid by the Partnership to those
Limited Partners who were Limited Partners of the Partnership as of the end of
the month immediately prior to the month in which the Additional .Limited
Partner made its Capital Contribution(s). Such payments shall be made to and
among the Limited Partners described in the preceding sentence in proportion to
their respective Percentage Interests. Payments to Limited Partners under this
Section_3.2(b)(ii) shall be treated as guaranteed payments as such term is defined
in Section 707(c) of the Code.
(iii) To the extent determined by the General Partner, an Additional
Limited Partner shall, at the time of its admission to the Partnership, contribute
less than the full amount specified in Section 3.2(b)(i) and shall, thereafter,
contribute any remaining portion of such full amount, upon not less than fifteen
(15) days prior notice, at such times and in such amounts as the General Partner
shall determine.
(iv) In the case of an existing Limited Partner that, pursuant to Section
3.1(b), increases its Capital Commitment after the Initial Closing, such Limited
Partner shall be subject to the provisions of Section 3.2(b)(i) with respect to the
amount of such increase as if newly admitted to the Partnership.
(v) Following the Initial Closing, Capital Contributions made during
any particular month shall be deemed to have been made as of the first day of
such month, and such Additional Limited Partners shall be subject to allocations
of Profits and Losses, distributions and Management Fees and shall be required to
make a Hurdle Rate Contribution from and after the first day of such month.
(c) Capital Contributions by the General Partner. The General Partner's
capital contributions shall be paid at the same times and in the same proportions relative to its
Capital Commitment as the capital contributions of the Limited Partners, and shall be made by
the General Partner, members of the General Partner or their respective Affiliates as Limited
Partners. The General Partner will invest and maintain, as its general partner interest at least
such amount (which may be $0) as the General Partner may be advised by counsel is necessary
or advisable for the Partnership to be treated as a partnership, not as an association taxable as a
corporation, for federal income tax purposes.
Section 3.3 Additional Capital Contributions. Except as specifically provided in
this Article 3 or Section 4.9(c), no Person shall be pennitted or rewired to make a contribution
to the capital of the Partnership.
21
Section 3.4 Failure to Make Capital Contributions.
(a) If a Limited Partner fails to make all or any portion of a capital
contribution when due, then it shall:
W Be deemed a"Defaulting Limited Partner''; and
(ii) Promptly pay to the Partnership interest on the due and
uncontributed amount at an annual rate equal to the lesser of(A) eighteen percent
(18%), compounded daily and (B) the highest rate allowed by applicable law
(which interest under (A) and (B) shall be treated as income of the Partnership
and not as a capital contribution by the Defaulting Limited Partner).
(b) If a-Defaulting Limited Partner fails to make all or any portion of a capital
contribution within ten (10) days after the original due date thereof, then, except as provided in
Section 3,4�e) and Section 3.4 d ,the following shall apply:
(i) The Defaulting Limited Partner's interest in the future Profits (but
not Losses) of the Partnership shall be reduced by fifty percent (50%). The
interest in future Profits so forfeited by the Defaulting Limited Partner shall be
apportioned among the other Partners in accordance with their respective Capital
Commitments; and
(ii) The Defaulting Limited Partner's Capital Account balance shall be
reduced by fifty percent (50%) of the amount contained therein (calculated as of
the Close of Business on the date upon which the defaulted capital contribution
was originally due and as if the Partnership had closed its books and allocated
Profits and Losses pursuant to Article 4 immediately prior thereto), and the
Defaulting Limited Partner's Capital Contributions (calculated as of the same
date) shall be deemed to be reduced by fifty percent(50%) of the amount thereof.
The portion of the Defaulting Limited Partner's Capital Account balance so
forfeited shall be apportioned and the portion of the Defaulting Limited Partner's
prior Capital Contributions deemed to be forfeited shall be deemed to be
apportioned among the other Partners in accordance with their respective Capital
Commitments.
(c) In the event that the General Partner determines, in its sole and absolute
discretion, that the interests of the Partnership would be better served by treating a Defaulting
Limited Partner in a different manner than is specified in Section 3.41b) and Section 3.4(b)(ii),
the General Partner may elect in its sole and absolute discretion to: (x) waive any and all
remedies that may otherwise be applied in respect of such Defaulting Limited Partner; or (y)
impose any one or more of the following remedies in addition, or as an alternative, to either or
both of the remedies specified in Section 3.4(b)(i) and Section 3.4(b)(ii); provided, however, that
if the Defaulting Limited Partner is an Affiliate of the General Partner, the General Partner shall
seek the prior consent of the Advisory Board prior to waiving such remedies:
(i) The General Partner may cause the Partnership to commence
proceedings against the Defaulting Limited Partner to collect the due and unpaid
22
capital contribution as well as: (A) the interest due under Section 3.4(a); (B) the
expenses of collection, including attorneys fees; and (C) consequential damages.
Any such amounts collected in excess of the Defaulting Limited Partner's due and
unpaid capital contribution shall be deemed for purposes of this Agreement to be
income of or a reimbursement to the Partnership, as appropriate, and shall not be
treated as a capital contribution by the Defaulting Limited Partner.
(ii) The General Partner may designate one or more Persons (with the
prior consent of such Person or Persons) to assume responsibility for (A) the due
and unpaid portion of the Defaulting Limited Partner's Capital Commitment; or
(B) the entire unpaid portion of the Defaulting Limited Partner's Capital
Commitment, and to assume and succeed to all of the rights of the Defaulting
Limited Partner's interest in the Partnership attributable to such portion of the
Defaulting Limited Partner's Capital Commitment.
(iii) The General Partner may cancel all or any portion of the
Defaulting Limited Partner's unpaid Capital Commitment and adjust the Capital
Account balances of the Partners to cause the Capital Account balance of each
Partner to reflect, as closely as possible,the Profit and Loss allocations that would
have been made pursuant to Article 4 if the Defaulting Limited Partner's Capital
Commitment had at no time included the canceled portion thereof.
(iv) The General Partner may require that the Defaulting Limited
Partner withdraw from the Partnership.
(d) The General Partner shall provide written notification to a Defaulting
Limited Partner within three(3) days of an event of default. If such Defaulting Limited Partner
pays the full amount of such capital contribution within three (3) days of such default notice,
them such Limited Partner shall no longer be deemed a Defaulting Limited Partner.
Section 3.5 Capital Contributions Prohibited by Law. Notwithstanding the
provisions of Section 3.4, if and to the extent that:
(a) A capital contribution would otherwise be due from an ERISA Limited
Partner that has delivered a notice pursuant to Section 3.6(b) and is to be withdrawn; or
(b) On or before the elate a capital contribution would otherwise be due from
an ERISA Limited Partner, any ERISA Limited Partner provides to the Partnership an opinion of
counsel reasonably acceptable to the General Partner (as to form, substance and choice of
counsel) or receives a notice from the General Partner that one or more of the following are true
with respect to payment by the ERISA Limited Partner of such capital contribution-
(i) Such payment would constitute a violation of applicable law (other
than a Governmental Plan Rule);
(ii) Such payment would constitute a prohibited transaction or other
violation of ERISA by the ERISA Limited Partner or a Regulated Plan;
23
(iii) The ERISA Limited Partner is an employee benefit plan not
subject to ERISA and such payment would constitute a violation by the ERISA
Limited Partner of any applicable law, rule, or regulation that is similar in purpose
and intent to ERISA; or
(iv) Immediately following such payment, the ERISA Limited Partners
will be considered to have acquired Plan Assets;
then the ERISA Limited Partner shall be released from any further obligation to make such
capital contribution, its Capital Commitment shall be reduced to reflect the amount of such
release, and the provisions of Section 3.4(a)(ii), Section 3.4(b) and Section 3.4(c)(i) shall not
apply in connection therewith.
(c) In its sole and absolute discretion, the General Partner may waive the
requirement for a legal opinion described in Section 3.5(b).
Section 3.6 Withdrawal and Return of Capital.
(a) Except as provided in Section 3.6(b), no Partner may withdraw any
portion of its Capital Contribution or Capital Account balance. Except as provided in Articles S,
7 and S, no Partner shall be entitled to any return of such Partner's Capital Contribution,
distribution in respect of such Partner's Capital Account balance, or other distribution in respect
of such Partner's interest in the Partnership. In the event that the General Partner determines that
it has called capital under Section 3.2(a)( ) in excess of the Partnership's need for such capital,
the General Partner may in its sole discretion return such excess to the Partners, following which
such returned capital shall resume the status of an uncalled Capital Commitment as if the
General Partner had never called such returned capital. In no event shall such returned capital be
considered a distribution under Article 5.
(b) Notwithstanding any provision of this Agreement to the contrary, an
ERISA Limited Partner may elect to withdraw from the Partnership if either (A) the General
Partner delivers to such ERISA Limited Partner a notice pursuant to Section__3.aa)(ii) or (B)
such ERISA Limited Partner delivers to the Partnership an opinion of counsel reasonably
acceptable to the General Partner (as to form, substance and choice of counsel) that it is more
likely than not that-
(i) The ERISA Limited Partner or a Regulated Plan would be in
material violation of ERISA if the ERISA Limited Partner were to continue as a
Limited Partner;
(ii) The ERISA Limited Partner is an employee benefit plan not
subject to ERISA and the ERISA Limited Partner would be in material violation
of any applicable law, rule, or regulation (other than a Governmental Plan Rule)
that is similar in purpose and intent to ERISA if the ERISA Limited Partner were
to continue as a Limited Partner; or
(iii) All or a portion of the Partnership's assets are Plan Assets.
24
(c) Any withdrawal by an ERISA Limited Partner under Section 3.6(b) shall
be effective as of the Close of Business on the last day of the Fiscal Year in which either the
General Partner delivers to such ERISA Limited Partner the notice specified in Section 3.2(a)(ii)
or the opinion of counsel specified in Section 3.6(b) is delivered to the General Partner or, if
recommended in such opinion, the last day of the fiscal quarter in which such opinion is
delivered; provided, however that the General Partner, in its sole and absolute discretion, may
accelerate the date of such withdrawal to a date of its choosing. Notwithstanding the preceding
sentence, but subject to the other terms and provisions of this Agreement, the General Partner
shall, in its sole and absolute discretion, be permitted for a period of ninety (90) days following
receipt of such opinion to attempt to eliminate the necessity for such withdrawal to the
reasonable satisfaction of the ERISA Limited Partner, including, without limitation, by returning
Capital Contributions to all ERISA Limited Partners on a pro rata basis in order to prevent, or
reverse, the satisfaction of the Significant Participation Test. Capital Contributions returned
pursuant to this Section 3.6(c) shall be treated for all purposes under this Agreement as if never
made by the ERISA Limited Partner. In the event that such attempt is successful, the ERISA
Limited Partner shall not withdraw. In the event that such attempt is made in good faith, but is
unsuccessful, the ERISA Limited Partner's withdrawal shall not be effective prior to the Close of
Business on the last day of the fiscal quarter in which such ninety(90)day period ends.
Section 3.7 Loans to the Partnership. No Partner shall be required to lend any
money to the Partnership or to guaranty any Partnership indebtedness.
Section 3.8 Limitation of Liability; Return of Certain Distributions.
(a) Except as otherwise required by applicable law, a Limited Partner shall
have no personal liability for the debts and obligations of the Partnership.
(b) A Limited Partner that receives a distribution (i) in violation of this
Agreement, or (ii) that is required to be returned to the Partnership under applicable law, shall
return such distribution within thirty (30) days after demand therefor by the General Partner. A
Defaulting Limited Partner shall return within thirty (30) days after demand therefor by the
General Partner any distribution the return of which is necessary or convenient to give effect to
the provisions of Section 3.4. The General Partner may, in its. sole and absolute discretion, cause
the Partnership to elect to withhold from any distributions otherwise payable to a Partner
amounts due to the Partnership from such Partner.
(c) Nothing in this Section 3.8 shall be construed to release any Limited
Partner from (i) its obligation to make capital contributions or other payments specifically
required under this Agreement, or (ii) its obligations pursuant to any relationship between the
Partnership and such Limited Partner acting in a capacity other than as a Limited Partner
(including, for example, as a borrower or independent contractor).
Section 3.9 Interest on Capital. No Partner shall be entitled to interest on such
Partner's Capital Contribution, Capital Account balance, or share of unallocated Profits.
Section 3.10 Withdrawing Limited Partner. The execution of this Agreement by the
Withdrawing Limited Partner constitutes its withdrawal as a Limited Partner of the Partnership.
25
With effect from the time of execution of this Agreement, the Withdrawing Limited Partner has
no further right, interest or obligation of any kind whatsoever as a Limited Partner of the
Partnership. An amount equal to the balance of the Capital Account of the Withdrawing Limited
Partner shall be distributed to such Withdrawing Limited Partner on the date of this Agreement.
ARTICLE 4.
ALLOCATIONS
Section 4.1 Profits. After giving effect to the special allocations set forth in Section
4.3 hereof,Profits for any Allocation Year shall be allocated in the following order and priority:
Profits for any Allocation Year shall be allocated among the Partners so as to reduce,
proportionately, the differences between their respective Target Capital Accounts and
Partially Adjusted Capital Accounts for such Allocation Year. No portion of the Profits
for any Allocation Year shall be allocated to a Partner whose Partially Adjusted Capital
Account is greater than or equal to its Target Capital Account for such Allocation Year.
Section 4.2 Losses. After giving effect to the special allocations set forth in Section
4_3 hereof, Losses for any Allocation Year shall be allocated as set forth in Section 4.2(a) below,
subject to the limitation in Section 4.2(b) below:
(a) Losses for any Allocation Year shall be allocated among the Partners so as
to reduce, proportionately, the differences between their respective Partially Adjusted Capital
Accounts and Target Capital Accounts for such Allocation Year. No portion of the Losses shall
be allocated to a Partner whose Target Capital Account is greater than or equal to its Partially
Adjusted Capital Account for such Allocation Year.
(b) The Losses allocated pursuant to Section 4.2(a)hereof shall not exceed the
maximum amount of Losses that can be so allocated without causing any Limited Partner to have
an Adjusted Capital Account Deficit at the end of any Allocation Year. In the event some but not
all of the Limited Partners would have Adjusted Capital Account Deficits as a consequence of an
allocation of Losses pursuant to Section the limitation set forth in this Section 4.2(b) shall
be applied on a Limited Partner by Limited Partner basis so as to allocate the maximum
permissible Losses to each Limited Partner under Treasury Regulation § 1.704-1(b)(2)(ii)(d). All
Losses in excess of the limitation set forth in this Section 4.2(b) shall be allocated to the General
Partner.
Section 4.3 . Special Allocations. The following special allocations shall be made in
the following order and priority:
(a) Minimum Gain Char e� Except as otherwise provided in Treasury
Regulation § 1.704-2(f), notwithstanding any other provision of this Agreement, if there is a net
decrease in Partnership Minimum Crain during any Allocation Year, each Partner shall be
specially allocated items of Partnership income and gain for such Allocation Year (and, if
necessary, subsequent Allocation Years) in an amount equal to such Partner's share of the net
decrease in Partnership Minimum Gain, determined in accordance with Treasury Regulation §
26
1.704-2 (g). Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Partner pursuant thereto. The items to be so
allocated shall be determined in accordance with Treasury Regulation §§ 1.704-2(0(6) and
1.704-20)(2). This Section 4.3(a) is intended to comply with the minimum gain chargeback
requirement in Treasury Regulation § 1.704-2(f) and shall be interpreted consistently therewith.
(b) Partner Nonrecourse Debt Minimum Gain Char e back. Except as
otherwise provided in Treasury Regulation § 1.704-2(i)(4), notwithstanding any other provision
of this Agreement, if there is a net decrease in Partner Nonrecourse Debt Minimum Gain
attributable to a Partner Nonrecourse Debt during any Allocation Year, each Partner who has a
share of the Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Treasury Regulation § 1.704-2(i)(5), shall be specially
allocated items of Partnership income and gain for such Allocation Year (and, if necessary,
subsequent Allocation Years) in an amount equal to such Partner's share of the net decrease in
Partner Nonrecourse Debt Minimum. Gain, attributable to such Partner Nonrecourse Debt,
determined in accordance with Treasury Regulation §§ 1.704-2(i)(4). Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts required to be.allocated
to each Partner pursuant thereto. The items to be so allocated shall be determined in accordance
with Treasury Regulation §§ 1.704-2(i)(4) and 1.704-20)(2), This Section 4.3(b) is intended to
comply with the partner nonrecourse debt minimum gain chargeback requirement in Treasury
Regulation § 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) Qualified Income Offset. In the event any Partner unexpectedly receives
any adjustments, allocations, or distributions described in Treasury Regulation §§ 1 .704-
1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(5), items of Partnership income
and gain shall be specially allocated to each such Partner in an amount and manner sufficient to
eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account
Deficit of such Partner as quickly as possible, provided that an allocation pursuant to this Section
4d(q) shall be made only if and to the extent that such Partner would have an Adjusted Capital
Deficit after all other allocations provided for in this Agreement have been tentatively made as if
this Section 4.3(c) were not in this Agreement. This Section 4.3(c) is intended to comply with the
qualified income offset requirement in Treasury Regulation § 1.704- l(b)(2)(ii)(d) and shall be
interpreted consistently therewith.
(d) Gross Income Allocation. In the event any Partner has a deficit Capital
Account at the end of any Allocation Year which is in excess of the sung of(i) the amount such
Partner is obligated to restore pursuant to any provision of this Agreement and (ii) the amount
such Partner is deemed to be obligated to restore pursuant to the penultimate sentences of
Treasury Regulation §§ 1.704-2(g)(1) and 1.704-2(i)(5), each such Partner shall be specially
allocated items of Partnership income and gain in the amount of such excess as quickly as
possible, provided that an allocation pursuant to this Section 4.3(d) shall be made only if and to
the extent that such Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided for in this Agreement have been made as if Section 4.3(c) hereof and
this Section 4.3(d) were not in this Agreement.
27
(e) Nonrecourse Deductions. Nonrecourse Deductions for any Allocation
Year shall be specially allocated to the Partners in accordance with their respective Percentage
Interests.
(f) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any
Allocation Year shall be specially allocated to the Partner who bears the economic risk of loss
with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable in accordance with Treasury Regulation § 1.704-2(i)(1); provided, however, that if
more than one Partner bears the economic risk of loss for such debt, the Partner Nonrecourse
Deductions attributable to such Partner Nonrecourse Debt shall be allocated to and among the
Partners in the same proportion that they bear the economic risk of loss for such Partner
Nonrecourse Debt. This Section 43(f) is intended to comply with the provision of Treasury
Regulation § 1.704-2(i) and shall be interpreted consistently therewith.
(g) Section 754 Adjustments. To the extent an adjustment to the adjusted tax
basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Treasury Regulation §§ 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4),
to be taken into account in determining Capital Accounts as the result of a distribution to a
Partner in complete liquidation of such Partner's interest in the Partnership, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases
the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall
be specially allocated to the Partners in accordance with their interests in the Partnership in the
event Treasury Regulation § 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partner to whom such
distribution was made in the event Treasury Regulation § 1.704-1(b)(2)(iv)(m)(4)applies.
(h) Special Allocation of Management Fees. Management Fees paid by the
Partnership to the General Partner during an Allocation Year pursuant to Section 6.10(c) hereof
shall be specially allocated to and among the Limited Partners. Each Limited Partner shall be
allocated a share of the total Management Fee paid to the General Partner during an Allocation
Year that is equal to the portion of such total Management Fee attributable to that Limited
Partner's share of called capital contributions or Fait-Market Value, as may be applicable, during
that Al location Year. If the General Partner elects to take all or a portion of the Management Fee
it is entitled to from one or more subsidiary investment vehicles formed by the Partnership,
rather than directly from the Partnership, the economic effect of any such management fee shall
be borne by the Partners substantially as if such Management Fee had been paid by the
Partnership and the other provisions of Section 6.1Q Lc) were applicable to such payment, to the
fullest extent practicable.
(i) Additional Allocations. The following special allocations shall be made:
(i) If the Partnership has Prof-its for any Allocation Year (determined
before giving effect to this Section 4.3(i)), any Partner whose Partially Adjusted
Capital Account is greater than its Target Capital Account for such Allocation
Year shall be specially allocated items of Partnership deduction or loss for such
Allocations Year equal to the difference between its Target Capital Account and its
Partially Adjusted Capital Account. In the event the Partnership has insufficient
items of deduction and loss for such Allocation Year to satisfy the previous
28
sentence with respect to all such Partners, the available items of deduction and
loss shall be divided among such Partners in proportion to their differences.
(ii) If the Partnership has Loss for any Allocation Year (determined
prior to giving effect to this Section 4.3(1)), any Partner whose Target Capital
Account is greater than its Partially Adjusted Capital Account for such Allocation
Year shall be specially allocated items of Partnership income or gain for such
Allocation Year equal to the difference between its Partially Adjusted Capital
Account and Target Capital Account. In the event the Partnership has insufficient
items of income or gain for such Allocation Year to satisfy the previous sentence
with respect to all such Partners, the available items of income or gain shall be
divided among such Partners in proportion to such differences.
(iii) Deductions in respect of the guaranteed payments provided in
Section 3.2(b)(ii) with respect to Hurdle Rate Contributions shall be specially
allocated to and among the Additional Limited Partners who made the Hurdle
Rate Contributions to the Partnership pursuant to Section 3.2(b)(i� hereof; each
Additional Limi(ed Partner that made a Hurdle Rate Contribution during the
Allocation Year shall be allocated an amount of deduction under this Section
4.3 i iii that is equal to the amount of that Additional Limited Partner's Hurdle
Rate Contribution(s)made during the Allocation Year.
(iv) The availability of items of income, gain, loss or deduction to be
specially allocated pursuant to this Section 4.3(i) shall be determined after giving
full effect to all of the preceding provisions of Section 4.3.
Section 4.4 Intent of AIlocations. The parties intend that the allocation provisions of
this Article 4 shall produce final Capital Account balances of the Partners that will cause
liquidating distributions made in accordance with Section 8.3 of the Agreement to be equal to
distributions that would be made in accordance with the provisions of Section 5.1(b) of the
Agreement if that section were modified to take into account the special allocations of
Management Fees under Section 4.3(h). To the extent that the General Partner determines that
the allocations provided in this Article 4 would fail to produce such final Capital Account
balances, (i) such allocation provisions shall be amended by the General Partner if and to the
extent necessary to produce such result and (ii) items of Partnership income, gain, loss, or
deduction for prior open taxable years shall be reallocated by the General Partner among the
Partners to the extent it is not possible to achieve such intended result with allocations of
Partnership income, gain, loss, or deduction for the current taxable year and future taxable years.
Section 4.5 Other Allocation Rules.
(a) For purposes of determining the Profits, Losses, or any other items
allocable to any period, Profits, Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any permissible method
under Code Section 706 and the Treasury Regulations thereunder.
29
(b) The Partners are aware of the income tax consequences of the allocations
trade in this Agreement and hereby agree to be bound by the provisions of this Agreement in
reporting their shares of Partnership income and loss for income tax purposes.
(e) To the extent permitted by Treasury Regulation § 1.704-2(h)(3), the
General Partner shall endeavor to treat distributions as having been made from the proceeds of a
Nonrecourse Liability or a Partner Nonrecourse Debt only to the extent that such distributions
would cause or increase an Adjusted Capital Account Deficit for any Partner.
Section 4.6 Tax Allocations: Code Section 704(c).
(a) In accordance with Code Section 704(c) and the Treasury Regulations
thereunder, income, gain, loss, and deduction with respect to any property contributed to the
capital of the Partnership shall, solely for tax purposes, be allocated among the Partners so as to
take account of any variation between the adjusted basis of such property to the Partnership for
federal income tax purposes and its initial Gross Asset Value (computed in accordance with
subparagraph(a) of the definition of"Gross Asset Value").
(b) In the event the Gross Asset Value of any Partnership asset is adjusted
pursuant to subparagraph (b) of the definition of"Gross Asset Value", subsequent allocations of
income, gain, Ioss, and deduction with respect to such asset shall take account of any variation
between the adjusted basis of such asset for federal income tax purposes and its Gross Asset
Value in the same manner as under Code Section 704(c) and the Treasury Regulations
thereunder.
(c) Any elections or other decisions relating to such allocations shall be made
by the General Partner in its sole discretion. Allocations.pursuant to this Section 4.6 are solely
for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into
account in computing, any Partner's Capital Account or share of Profits, Losses, other items, or
distributions pursuant to any provision of this Agreement.
(d) Except as otherwise provided in this Agreement, all items of Partnership
income, gain, loss, deduction, and any other allocations not otherwise provided for shall be
divided among the Partners in the same proportions as they share Profits or Losses, as the case
may be, for the Allocation Year. For purposes of determining the mature (as ordinary or capital)
of any partnership gain allocated among the Partners for Federal income tax purposes pursuant to
this Agreement, the portion of such gain acquired to be recognized as ordinary income pursuant
to Code Sections 1245 and/or 1250 shall be deemed to be allocated among the Partners in
accordance with Treasury Regulation § 1.1245-1(e)(2) and 1.1250-1(f).
Section 4.7 Reliance on Advice of Accountants and Attorneys. The General
Partner will have no liability to the Limited Partners or the Partnership if the General Partner
relies upon the written opinion of tax counsel or accountants retained by the Partnership with
respect to all matters (including disputes) relating to computations and determinations required to
be made under this Article 4 or other related provisions of this Agreement.
Section 4.8 Modifications to Preserve Underlying Economic Objectives. In the
event that (a) there is a change in the federal income tax law; (b) the Partnership borrows money
30
or property on a nonrecourse basis; or (c) the Partnership makes an election to adjust the basis of
the Partnership's assets under Section 754 of the Code, the General Partner, acting in its
reasonable discretion after consultation with tax counsel to the Partnership, shall make the
minimum modifications to the allocation provisions of this Agreement necessary to preserve the
underlying economic objectives of the Partners as reflected in this Agreement and, in the case of
such a borrowing or election, to properly allocate the tax items relating to such borrowing or
election in accordance with the Code and the Treasury Regulations.
Section 4.9 Withholding/Special Taxes,
(a) The Partnership shall withhold taxes from distributions to, and allocations
among, the Partners to the extent required by law (as determined by the General Partner in its
reasonable discretion). Except as otherwise provided in this Section 4.9, any amount so withheld
by the Partnership with regard to a Partner (including any withholding taxes required to'be paid
by the Partnership on behalf of foreign partners) shall be treated for purposes of this Agreement
as an amount actually distributed to such Partner pursuant to Section 5.1. An amount shall be
considered withheld by the Partnership if, and at the time, remitted to a governmental agency
without regard to whether such remittance occurs at the same time as the distribution or
allocation to which it relates; provided, however, that an amount actually withheld from a
specific distribution or designated by the General Partner as withheld from a specific allocation
shall be treated as if distributed at the time such distribution or allocation occurs.
(b) To the extent that operation of Section 4.9(a would create a negative
balance in the Updated Capital Account of a Limited Partner or increase the amount by which
such Updated Capital Account balance is negative, the amount of the deemed distribution shall
instead be treated as a loan by the Partnership to such Limited Partner, which loan shall be
payable upon demand by the General Partner and shall bear interest at the Hurdle Rate.
(c) In the event that the General Partner determines, in its reasonable
discretion, that the Partnership lacks sufficient cash available to pay withholding taxes in respect
of a Partner, the General Partner may, in its sole and absolute discretion, make a loan or capital
contribution to the Partnership to enable the Partnership to pay such taxes. Any such loan shall
be full-recourse to the Partnership and shall bear interest at the Hurdle Rate. Notwithstanding
any provision of this Agreement to the contrary, any loan(including interest accrued thereon) or
capital contribution made to the Partnership by the General Partner pursuant to this Section:
4.9fc) shall be repaid or returned as promptly as is reasonably possible.
(d) Each Limited Partner hereby agrees to indemnify the Partnership and the
other Partners for any liability they may incur for failure to properly withhold taxes in respect of
such Limited Partner, including, but not limited to, reasonable attorneys fees and court costs
unless such failure is the result of the Gross Negligence or willful misconduct of the General
Partner; moreover, each Limited Partner hereby agrees that neither the Partnership nor any other
Partner shall be liable for any excess taxes withheld in respect of such limited Partner's interest
in the Partnership and that, in the event of over withholding, a Limited Partner's sole recourse
shall be to apply for a refund froze the appropriate governmental authority.
31
(e) Taxes withheld by third parties from payments to the Partnership shall be
treated as if withheld by the Partnership for purposes of this Section 4.9. Such withholding shall
be deemed to have been made in respect of all the Partners in proportion to their respective
allocable shares under Section 4.1 of the underlying items of Profit to which such third party
payments are attributable.,In the event that the Partnership receives a refund of taxes previously
withheld by a third party from one or more payments to the Partnership, the economic benefit of
such refund shall be apportioned among the Partners in a manner reasonably determined by the
General Partner to offset the prior operation of this Section 4.9(e) in respect of such withheld
taxes.
(f) In the event that the Partnership is required to recognize income or gain
for income tax purposes under Section 6 84 of the Code (or a similar provision of State or local
law) in respect of an in- kind distribution to a Limited Partner, then, solely for such income tax
purposes, to the maximum extent permitted by applicable law (as determined by the General
Partner in its reasonable discretion), the income or gain shall be allocated entirely to such;
Limited Partner.
(g) In the event that the Partnership is required to remit cash to a
governmental agency in respect of a withholding obligation arising from an in-kind distribution
by the Partnership or the Partnership's receipt of an in-kind payment, the General Partner may
cause the Partnership to sell an appropriate portion of the property at issue and, to the extent
permitted by applicable law (as determined by the General Partner in its reasonable discretion),
any resulting income or gain shall be allocated solely for income tax purposes entirely to the
Limited Partners in respect of whom such withholding obligation arises.
(h) To the extent required by any provision of any state, local or foreign tax
law, the Partnership shall file a composite tax return on behalf of one or more of its Partners and
shall report and pay income taxes required by law to be paid with such composite tax returns to
any state, local or federal government, and any such amounts shall be treated as distributions to
the Partners for whom such composite tax returns are filed pursuant to Section 5.1. The General
Partner shall have the power and the authority to determine whether a Partner should be included
in a composite tax return required to be filed by the Partnership pursuant to any provision of any
state, local or foreign tax law. A Partner shall be limited to an action against the applicable state,
local or foreign government with respect to any claims based on over-payment on a composite
tax return, and neither the Partnership nor the General Partner shall have any liability to any
Partner with respect to any composite tax return filings or payments made pursuant to this
Section 4.90h .
(i) The General Partner shall use commercially reasonable efforts to provide a
Limited Partner with such information available to the General Partner as a Limited Partner may
reasonably request in order for the Limited Partner to file any tax returns or reports, or to obtain
any available refunds of, or exemptions from, any withholding taxes with respect to any taxes
imposed on a Limited Partner as a result of its interest in the Partnership. In addition, the
General Partner shall generally endeavor to assist the Limited Partner, at the Limited Partner's
written request, in obtaining for the Limited Partner any available refunds of, or exemptions froze
withholding or other taxes imposed on the Limited Partner as a result of its interest in the
Partnership. Any out of pocket expenses relating to the General Partner's compliance with this
32
Paragraph shall be borne by such Limited Partner (together with other Limited Partners
requesting similar information or assistance).
ARTICLE S.
DISTRIBUTIONS
Section 5.1 Operating Distributions. Except as otherwise provided in this Article 5,
distributions prior to the Dissolution of the Partnership shall be made in accordance with this
Section 5.1. The General Partner array, in its sole and absolute discretion, elect to receive less
than the full amount of any distribution to which it is otherwise entitled. Except as otherwise
provided in this Agreement, each Partner actually receiving amounts pursuant to a specific
distribution by the Partnership shall.receive a pro rata share of each item of cash or property of
which such distribution is constituted (based upon such Partner's Percentage Interest); pLovided,
however, that the General Partner may vary the apportionment among the Partners of an in-kind
distribution as necessary to avoid the distribution of fractional interests in distributed property;
and provided further, however, that the Partnership shall not make in-kind distributions of
property (other than cash or marketable securities) to any Limited Partner without such Limited
Partner's prior written consent. Distributions made in any month shall be deemed to be made as
of the last day of the month. In determining the amount to be distributed to each Partner under
this Section 5.1, the General Partner shall take into account amounts reasonably expected to be
treated as distributions to the Partners pursuant to Section 4.9 hereof with respect to the current
Fiscal Year.
(a) Mandatory Tax Distributions.
(i) The Partnership shall distribute to each Partner, not later than one
hundred(100) days after the close of each Fiscal Year, an amount of cash equal to
the product of the Tax Percentage for such Fiscal Year and such Partner's
allocated share of the Partnership's net income and gain for such Fiscal Year as
shown on the Partnership's federal income tax return (subject to the modification
described in Section 5.1(a)(iii)).
(ii) For purposes of this Section 5.1(a), the "Tax Percentage" with
respect to each specific item of net income and gain shall be the highest blended
federal and State marginal income tax rate applicable to such specific item of
income and gain recognized by an individual resident in Mississippi. In all cases,
the highest marginal income tax rate shall be the highest statutory rate applicable
to the specific type of income or gain in question and shall be determined without
regard to phaseouts of deductions or similar adjustments. The General Partner,
acting in its reasonable discretion, may adjust the determination of Tax
Percentages pursuant to this Section S.l(a)(ii : (x) as necessary to ensure that the
distribution required to be made to each Partner pursuant to Section 5.1(a)(i) for
any Fiscal Year is not less than such Partner's actual federal and State income tax
liability in respect of allocations made to such Partner by the Partnership for such
Fiscal Year; or (y) to reflect any city or other local income tax to which any
33
Partner or Partners may be subject; provided, however, that the Tax Percentage
with regard to a particular type of income or gain shall in all events be the same
percentage for all Partners.
(iii) In calculating the Partnership's net iricome and gain for purposes
of Section 5.I(a)(i), there shall be disregarded any items of loss, expense or
deduction (including items of Management Fee expense) the ultimate
deductibility of which may, in respect of any Partner or equityholder of a Partner,
be subject to limitation under Section 67 of the Code.
(iv) The mandatory tax distribution will be reduced on a dollar-for-
dollar basis by the amount of any distributions withheld on behalf of any foreign
Limited Partners pursuant to this Section 5.1(a).
(v) For purposes of determining whether the Partnership has satisfied
its distribution obligations under Section 5.1(a)(i), all cash distributions made
during a Fiscal Year shall be treated as distributions made pursuant to Section
5.1 a i in respect of such Fiscal Year(except to the extent that such distributions
were required to satisfy the obligations of the Partnership under Section 5.1(a)(i)
in respect of one or more prior Fiscal Years, in which case such distributions shall
be treated as having been made pursuant to Section 5.1 a i in respect of such
prior Fiscal Year or Years).
(vi) At the election of the General Partner, no distribution shall be
required pursuant to Section 5.1(a)(i) in respect of any Fiscal Year if the total net
taxable income and gain allocable to Partners of the Partnership for such Fiscal
Year is less than or equal to $1,000,000.
(vii) All distributions pursuant to this Section 5.1(a) made to a Partner
shall be treated as advances of distributions under Section 5.1 b and Section 5.2
and shall be taken into account in determining the amount of future distributions
with respect to such Partnership interests.
(b) Distributions of Available Cast: Row. Available Cash Flow, if any, for
the immediately preceding fiscal quarter will be distributed by the General Partner within thirty
(30) days after the close of each fiscal quarter of the Partnership in the following manner:
(i) First, to and among the Limited Partners in an amount equal to the
excess, if any, of (i) the cumulative Priority Return from the inception of the
Partnership to the end of such Fiscal Quarter over (ii) the sum of all prior
distributions to the Limited Partners pursuant to this Section 5.1(b)(i);
(ii) Second, to and among the Limited Partners pursuant to this Section
5.1(b)(ii) in an amount equal to, but not in excess of, their aggregate Unreturned
Capital as of the time of such Distribution; and
(iii) Subject to the provisions of Section 5.1(c) below, the balance, if
any, 85% to the Limited Partners and 15% to the General Partner.
34
(c) Treatment of Distributions under Side Letters or SindlarAgreements. In
the event that pursuant to Section 11.3 hereof the General Partner enters into a side letter or
similar agreement with a Limited Partner (the "Beneftted Limited Partner") pursuant to which
the General Partner agrees to increase that Limited Partner's right to receive distributions under
Section 5.1(b)(iii) in relationship to the General Partner's right to receive distributions under that
section and to thereby correspondingly reduce the General Partner's own right to receive
distributions under Section 5.1(b)(iii) in relationship to that Limited Partner's right to receive the
distributions under that section (the amount of such increase and corresponding decrease is
referred to hereinafter as the "Reduced Carried Interest Amount"), for so long as it may remain
in effect the side Ietter or similar agreement shall be taken into account under this Section 5.1
and the Reduced Carried Interest Amount shall be distributed by the Partnership directly to the
Beneftted Limited Partner.
(d) Treatment of Certain ..Distributions or Performance Fees Paid by
Subsidiary.Investment Vehicles. To the extent that the General Partner receives a distribution,
or a payment of an incentive fee, from one or more subsidiary investment vehicles owned in
whole or in part, directly or indirectly, by the Partnership (but, for the avoidance of doubt,
excluding any portion thereof attributable to any investment, directly or indirectly, made in such
entity by any Parallel Fund) the amount so distributed or paid to the General Partner shall be
treated as a credit against (and shall reduce, on a dollar for dollar basis) the amount the General
Partner would otherwise be entitled to receive as a distribution under this Agreement (but for the
application of this Section 5.1(d)).
Section 5.2 Liquidating Distributions. Notwithstanding the provisions of Section
5.I, cash or property of the Partnership available for distribution upon the Dissolution of the
Partnership (including cash or property received upon the sale or other disposition of assets in
anticipation of or in connection with such Dissolution)shall be distributed in accordance with the
provisions of Section 8.3 (after giving effect to Section 4.4}.
Section 5.3 Limitation on Distributions. No distribution shall be made to a Partner
pursuant to Section 5.1 if and to the extent that such distribution would: (a) cause the Partnership
to be insolvent; or(b) render the Partners liable for a return of such distribution under applicable
law. Except with regard to distributions actually or (pursuant to Section 5.1 a v ) deemed made
to the General Partner pursuant to Section 5.1 a , there shall be no distribution to a Partner if and
to the extent that such distribution would create a negative balance in the Updated Capital
Account of such Partner or increase the amount by which such Updated Capital Account balance
is negative.
Section 5.4 Special Distribution Procedures.
(a) 1f, prior to the distribution of any property by the Partnership, a Limited
Partner notifies the General Partner that receipt by the Limited Partner of such property would
violate any law, regulation or governmental order applicable to the Limited Partner, or subject
the Limited Partner to a foundation excise tax pursuant to Section 4943 of the Code, the General
Partner shall use its reasonable efforts to prevent a Partnership distribution of such property from
giving rise to such violation or tax by (as determined by the General Partner in its sole and
absolute discretion), (i) varying the method by which the Partnership distributes such property to
35
the Limited Partner; or(ii) receiving such distributed property as agent for, selling such property
on behalf of, and promptly delivering the net sales proceeds therefrom to, the Limited Partner.
(b) At the election of a Limited Partner, all distributions of property that
otherwise would be made to the Limited Partner by the Partnership shall be made to the General
Partner as agent for the Limited Partner. Immediately following a distribution to the General
Partner pursuant to this Section 5.4(b), the General Partner shall notify the Limited Partner of the
type and quantity of property distributed. The General Partner shall thereafter mold such property
for a period of ten (10) business days (or such shorter period as is specified in a notice from the
Limited Partner actually received by the General Partner), following which the General Partner
shall use its reasonable efforts to promptly sell such distributed property and deliver the net sales
proceeds therefrom to the Limited Partner; provided, however, that the General Partner shall not
sell such distributed property and shall instead promptly deliver such distributed property to the
Limited Partner if, prior to the time that the General Partner sells or enters into a binding
commitment to sell such distributed property, the General Partner is in actual receipt of notice
from the Limited Partner that receipt by Limited Partner of such distributed property would not
violate any law, regulation or governmental order applicable to the Limited Partner.
(c) A Limited Partner's election pursuant to Section 5.4(b)may be revoked by
the Limited Partner at any time upon notice to the General Partner; provided, however, that an
election may not be revoked with respect to distributed property currently held by the General
Partner as agent for the Limited Partner pursuant to Section 5.4(b).
(d) At the election of the General Partner, all property that otherwise would be
distributed to the General Partner as agent for one or more Limited Partners pursuant to this
Section 5.4 shall not be so distributed, but shall instead be distributed to an independent escrow
agent who shall perform all of the tasks in respect of such distributed property otherwise required
to be performed by the General Partner pursuant to this Section 5.4.
(e) The foregoing provisions of this Section 5.4 shall apply to all distributions
of property other than cash made by the Partnership (including distributions pursuant to Section
7.44 or Section 8.3); provided,however,that, in the case of distributions made pursuant to Section
8_ _3, the Liquidating Partner shall take the place of the General Partner.
Section 5.5 Distributions Subject to Return.
(a) The General Partner, in its sole discretion, may cause the Partnership to
distribute cash or property to the Partners subject to a requirement that such cash or property be
returned to the Partnership, upon not less than five (5) days prior notice, at such times and in
such amounts as shall be specified in one or more notices issued by the General Partner (a
"Distribution Subject to Return"); provided, however, that distributions of cash or property shall
cease to be Distributions Subject to Return subject to this Section 5_5 on the fourth (0)
anniversary of such distribution., except for such claims or liabilities of the Partnership pending
on the fourth (4rh) amiiversar� of such distribution date and identified in writing to the Partners
on or before the fourth (4f ) anniversary of such distribution; provided, however, that all
distributions of cash or property shall cease to be Distributions Subject to Return on the third
(P) anniversary of the final liquidating distribution pursuant to Section 8.3. Distributions
36
Subject to Return shall be returned to the Partnership only for the purpose of funding Partnership
indemnification obligations or other Partnership liabilities identified in the notice of a
Distribution Subject to Return. The General Partner shall provide notice to the Limited Partners
prior to causing the Partnership to make any Distribution Subject to Return.
(b) Distributions Subject to Return shall be applicable to all Partners
including, without limitation, the General Partner, in proportion to and in the reverse order in
which such distributions were made to the Partners pursuant to Section 5.1 M or Section 8.3, as
applicable.
(e) The return of any portion of a Distribution Subject to Return shall be
treated for purposes of this Agreement as a cancellation of the distribution to which it relates
(effective as of the time of such return) and not as an additional capital contribution by the
Partner making such return.
(d) In the event the General Partner determines to cause the Partners to return
a distribution in accordance with this Section 5.5, the General Partner shall recalculate the
amount of Carried Interest Distributions under Section 5.6 by taking into account the total
amount to be returned, and shall return to the Partnership within the time period specified in the
notice to Partners of a Distribution Subject to Return any such Carried Interest Distribution
amount which exceeds 15% of: (i) Partnership profits (which shall be calculated as cumulative
distributions over the life of the Partnership minus cumulative Capital Contributions made to the
Partnership) less (ii) cumulative Priority Return distributions under Section 5.1(b)(i) over the life
of the Partnership.
(e) Notwithstanding anything in this Section 5.5 to the contrary, no Limited
Partner shall be obligated to return any distributions once the sum of distributions returned to the
Partnership by such Limited Partner equal, in the aggregate, the lesser of (i) the aggregate
amount of all distributions made to such Limited Partner and (ii) one-third (1/3) of such Limited
Partner's Capital Commitment.
Section 5.6 Carried Interest Distributions. If, after the Partnership has made its final
liquidating distribution pursuant to Section 8.3, either: (1) the General Partner has received
cumulative Carried Interest Distributions that exceed 15% of; (x) Partnership profits (calculated
as cumulative distributions over the life of the Partnership minus cumulative Capital
Contributions made to the Partnership) less (y) cumulative Priority Return distributions under
Section 5.1(b)(i) over the life of the Partnership; or (2) the aggregate distributions to the Limited
Partners are less than the sum of the Limited Partners' capital contribution plus their 7% Priority
Return, then the General Partner shall return to the Partnership an amount in cash equal to the
lesser of:
(a) The greater of(i) the excess arnount described in clause (1) above, and(ii)
the shortfall described in clause (2) above; and
(b) The General Partner's aggregate Carried Interest Distributions, reduced by
the General Partner's nominal tax liability attributable to Carried Interest Distributions, net of
any tax benefits realized by the General Partner as a result of such return of Carried Interest
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Distributions, with the General Partner's nominal tax liability to be calculated, for purposes of
this Section 5.6(b), as the highest blended federal and state marginal income tax rate for an
individual resident in the State of Mississippi, taking into account the character of the income
and deductions for state and local taxes, determined without regard to phaseouts of deductions or
similar adjustments.
For this purpose, "Carried Interest Distributions" shall mean the excess of (1) the aggregate
distributions made to the General Partner by the Partnership over (2) the aggregate distributions
that the General Partner would have received from the Partnership if the General Partner made
its Capital Contribution solely as a Limited Partner and another person served as General Partner
and shall also, for the avoidance of doubt, include any Tax Distributions made by the General
Partner. The return obligation required by this Section 5.6 shall be satisfied within ninety (90)
days following the final liquidation distributions of the Partnership under Section 8.3, and the
proceeds shall be promptly distributed to the Limited Partners in proportion to their relative
Capital Contributions.
Section 5.7 Division Among the Limited Partners. Except as otherwise provided in
this Agreement, all distributions to the Limited Partners pursuant to this Article 5 shall be
divided among them in proportion to their respective Percentage Interests.
ARTICLE 6.
ADMINISTRATION
Section 6.1 Management Rights of the Limited Partners. Except as specifically set
forth in this Agreement or as provided by applicable law, the Limited Partners shall take no part
in the management, control or operation of the Partnership or its business and shall have no
power or authority to act for the Partnership, bind the Partnership under agreements or
arrangements with third parties, or vote on Partnership matters.
Section 6.2 Management by the General Partner. Subject to the provisions of this
Agreement, and in accordance with the purpose of the Partnership as set forth. in Section 2,3, the
General Partner (or its duly appointed agents) shall have the exclusive power and authority to
perform acts associated with the management and control of the Partnership and its business
including the power and authority to:
(a) Receive, buy, sell, exchange, trade and otherwise deal in and with
Portfolio Properties and any other property of the Partnership including, but not limited to
interests in limited partnerships, limited liability companies and other entities, and cause the
Partnership to enter into contracts, agreements, leases, easements, notes and any other documents
related to such Portfolio Properties, which such contracts, agreements, leases, easements, motes
and other documents shall not be limited in duration to the Term of the Partnership;
(b) Acquire Portfolio Properties on the basis of investment representations or
subject to transfer restrictions;
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(c) Borrow money or property on behalf of the Partnership, enter into
guarantees, encumber Partnership property for the purpose of obtaining financing for the
Partnership's business, and extend or modify any obligations of the Partnership;
(d) Employ or retain any qualified Person to perform services or provide
advice on behalf of the Partnership and pay reasonable compensation therefor, including
employment or retention of a Partner or Person related to a Partner; provided, however, that the
employment or retention of a Partner or Person related to a Partner to perform services or
provide advice to the Partnership shall be on terms no less favorable to the Partnership than are
generally afforded to unrelated third parties in comparable transactions;
(e) Compromise, arbitrate or otherwise adjust claims in favor of or against the
Partnership, and commence or defend litigation with respect to the Partnership or any assets of
the Partnership, at the Partnership's expense;
(f) Cause the Partnership to purchase and maintain, at the Partnership's
expense, insurance coverage reasonably satisfactory to the General Partner with regard to any
circumstance or condition which may affect the Partnership (including any employee or agent
thereof), the General Partner(or any member, employee or agent thereof) in its capacity as such,
or any Person in connection with service by such Person, at the request of the General Partner, as
an officer or director of the Partnership or any Affiliate of the Partnership; rop_ vided, however,
that coverages with respect to matters for which the indemnification provisions of this
Agreement may apply shall be commercially reasonable;
(g) Cause the Partnership to, enter into, make and perform upon such
contracts, agreements and other undertakings, and to do such other acts, as it may deem
necessary or advisable for, or as may be incidental to, the conduct of the business of the
Partnership, including placement agreements, servicing agreements, contracts, agreements,
undertakings and transactions with a Partner or Person related to a Partner; provided, however,
that transactions with a Partner or Person related to a Partner for the account of the Partnership
shall be on terms no less favorable to the Partnership than are generally afforded to unrelated
third parties in comparable transactions;
(h) Cause the Partnership to invest in, or enter into, hedging arrangements
designed to reduce or eliminate the risk of changes in the value of one or more Portfolio
Properties;
(i) Cause the Partnership to form one or more subsidiaries or special purpose
entities as may be necessary, in the sole discretion of the General Partner, to hold Portfolio
Properties, to enable the Partnership to co-invest with a Parallel Fund or Parallel Funds in
accordance with Section 6.7 or to enable to Partnership to participate in an Alternative
Investment Vehicle structure in accordance with Section 6.9;
(j) Open, conduct business regarding, draw checks or other payment orders
upon, and close cash, checking, custodial or similar accounts with banks or brokers on behalf of
the Partnership and pay the customary fees and charges applicable to transactions in respect of
all such accounts; and
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(k) Assume and exercise all of the authority, rights and powers of a general
partner under the laws of the State of Delaware.
Cause the Partnership to: (A) file composite tax returns on behalf of one or more
Partners with any state, local or federal govenunent and report and pay income taxes required by
law to be paid with such composite tax returns to any state, local or federal government to the
extent the Partnership determines to be required by any provision of any state, local or foreign
tax law; (B) withhold from payments and distributions, or with respect to allocations to one or
more Partners, and to pay over to any federal, state, local, or foreign government, any amounts
so withheld pursuant to this Agreement, the Code or any provisions of any other federal, state,
local, or foreign law; and (C) determine whether (i) a Partner should be included in a composite
tax return filed by the Partnership on behalf of one of more Partners as required by any provision
of any federal, state, local or foreign tax law; and (ii) a Partner is subject to withholding,
pursuant to Section 4.9, on any payment or distribution, or with respect to any allocation from
the Partnership.
Section 6.3 Investment Restrictions.
(a) The Partnership's Portfolio Properties shall be comprised of multiple
Properties and, in some cases,multiple Properties may be acquired in a single investment.
(b) Without the approval of the Advisory Board:
(i) the Partnership shall not invest in, acquire investments front, nor
sell investments to any Affiliate of the General Partner or any fund or account managed
by any Affiliate of the General Partner or by The Molpus Woodlands Group. LLC;
(ii) except for the transactions and other arrangements permitted by
this Agreement and the investments by certain officers and employees of The Molpus
Woodlands Group, LLC in the General Partner, none of the General Partner, The
Molpus Woodlands Group, LLC, or any partner, member, officer, director or employee
of the General Partner, The Molpus Woodlands Group, LLC or any Affiliates of either
the General Partner or The Molpus Woodlands Group, LLC, shall purchase any interest
in or any securities or instruments issued by any Portfolio Property;
(iii) the Partnership shall not invest in any Portfolio Property, if at the
time of investment, The Molpus Woodlands Group, LLC, the General Partner, any Key
Executive or any Affiliate of any of the foregoing has any existing direct investment in
such Portfolio Property;
(iv) the Partnership shall not invest for speculative purposes in puts,
calls, straddles or derivative instruments or sell securities short in an uncovered
transaction; provided the Partnership may invest in or purchase options or other
derivatives for the purpose of reducing the Partnership's risk in holding Portfolio
Properties;
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(v) the Partnership may not invest in any Portfolio Property if, at the
time of the investment, the cumulative amount invested by the Partnership in Portfolio
Properties will exceed l 10%of the Capital Commitments; and
(vi) the Partnership may not invest in another pooled vehicle that
provides for a management fee and or a carried interest (excluding the management fee
and carried interest payable pursuant to the terms of this Agreement) and in no event
may more than 10% of Capital Commitments be invested in pooled vehicles (excluding
Alternative Investment Vehicles or pooled vehicles utilized for joint investment by the
Partnership and any Parallel Fund).
(c) Notwithstanding any other provision of this Agreement, the General Partner
will consider the incurrence of any item. of "unrelated business taxable income" (within the
meaning of Section 512 of the Code); provided, however, that such consideration shall not
dictate or operate as the sole factor in any decisions made by the General Partner.
Section 6.4 General Partner's Power to Bind the Partnership.
(a) Notwithstanding any provision of this Agreement to the contrary, any
contract, agreement, deed, lease, note or other document or instrument executed on behalf of the
Partnership by the General Partner shall be deemed to' have been duly executed by the
Partnership; no other Partner's signature shall be required in connection with the foregoing and
third parties shall be entitled to rely upon the General Partner's power to bind the Partnership
without otherwise ascertaining that the requirements of this Agreement have been satisfied.
(b) The General Partner is hereby authorized to file with any governmental
entity, on behalf of the Partnership and the Partners, a certificate or similar instrument that
evidences the General Partner's power to bind the Partnership as set forth in the preceding
Section 6.4(a.
Section 6.5 Other Ventures and Activities
(a) The Limited Partners: (i) acknowledge that the General Partner, its
Affiliates, equityholders, and other related Persons, and their respective clients are or may be
involved in other financial, investment, timber management and professional activities,
including, but not limited to: management of or participation in other investment funds; venture
capital, private equity, public equity and real estate investing and timberland management;
purchases and sales of securities; investment and management counseling; investment banking,
underwriting and brokerage activities; leasing and lending .activities; providing mergers and
acquisitions, restructuring and other financial advisory services; and serving as officers,
directors, advisors and agents of other companies; and (ii) agree that, except as otherwise
specifically set forth in this Section 6.5 or Section 6.6, the General Partner, its Affiliates,
equityholders, and other related Persons, and their respective clients may engage for their own
accounts and for the accounts of others in any such ventures and activities (without regard to
whether the interests of such ventures and activities conflict with 'those of the Partnership).
Except as specifically set forth in this Section 6.5 or Section 6.6. (x) neither the Partnership nor
any Limited Partner shall have any right by virtue of this Agreement or the existence of the
41
Partnership in and to such ventures or activities or to the income or profits derived therefrom;
and (y) the General Partner, its Affiliates, equityholders, and other related Persons, and their
respective clients shall have no duty or obligation to make any reports or to offer any interests to
the Limited Partners or the Partnership with respect to any such ventures or activities.
Notwithstanding the foregoing, none of the General Partner, its members or any of the Key
Executives shall form, manage or advise another pooled fund, not already in existence at the
Initial Closing, which has substantially the same investment objectives as the Partnership until
the earlier of the end of the Commitment Period or the date on which the Fund is Fully Invested;
provided, however, that nothing shall preclude affiliates of the General Partner or the Key
Executives from making plans or other preparations for a successor pooled fund during such
period.
(b) The General Partner shall devote to the Partnership such time and effort as
is reasonably necessary to diligently manage the Partnership's business and affairs.
(c) The Limited Partners hereby acknowledge that the General Partner may be
prohibited from taking action for the benefit of the Partnership: (i) due to confidential
information acquired or obligations incurred in connection with an outside activity permitted to
the General Partner, its Affiliates, equityholders or other related Persons under this Section 6.5;
(ii) in consequence of an equityholder, Affiliate or other related Person of the General Partner
serving as an officer or director of an entity whose interests are in conflict with those of the
Partnership; or(iii) in connection with activities undertaken by an equityholder, Affiliate or other
related Person of the General Partner prior to the date first above written. No Person shall be
liable to the Partnership or any Partner for any failure to act for the benefit of the Partnership in
consequence of a prohibition described in the preceding sentence; rop Videcl, however, that the
determination that the General Partner is prohibited from taking such actions shall be reasonable
and shall have been made in good faith,
Section 6.6 Policies with Respect to Investment Opportunities.
(a) The Limited Partners recognize that decisions concerning investments and
potential investments involve the exercise of judgment and the risk of loss.
(b) While the General Partner generally intends to offer to the Partnership at
least some portion of all investment opportunities that meet the Partnership's investment criteria,
the General Partner will apply its reasonable business judgment in determining when an
investment opportunity meets the Partnership's investment criteria and whether it is in the best
interests of the Partnership to take advantage of an investment opportunity (even if the
opportunity otherwise satisfies such criteria).
(c) Notwithstanding any provision of this Agreement to the contrary, the
General Partner, in its sole and absolute discretion, may elect to make available investment
opportunities which come to its attention, in whole or in part, to one or more of the Partnership,
the Partners, any Partner, the Other Funds, or any other Person or Persons; provided, however,
that in allocating investment opportunities between the Partnership, the Other Funds or any other
Person or Persons, the General Partner shall use its best judgment, taking into account factors
that it determines to be relevant to such allocation decisions (including the respective pools of
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capital available to, and the scheduled termination dates of, the Partnership and each of the Other
Funds); provided further, that, during the Commitment Period, the General Partner will not
allocate an investment opportunity which meets the investment guidelines of the Partnership to
itself or any Affiliate (other than the Other Funds) prior to offering such allocation of such
investment opportunity to the Limited Partners.
Section 6.7 Parallel Fund.
(a) Notwithstanding anything in this Agreement to the contrary, the General
Partner may form one or more limited partnerships, other investment vehicles or entities or
investment programs to invest in parallel with the Partnership (each, a "Parallel Fund") (i) for
select investors or (ii) in order to comply with securities laws or to address tax, legal or
regulatory issues (including compliance with the Investment Company Act), or generally
applicable investment restrictions, of investors in such entity or program. The General Partner
may, in its sole discretion, permit an existing Limited Partner to withdraw from the Partnership
to facilitate such Limited Partner's participation in any Parallel Fund (with respect to such
Limited Partner's Capital Commitment) and, in connection therewith, take any other necessary
action to consummate the foregoing. The Partnership and any Parallel Fund, if organized, are
sometimes collectively referred to in this Section 6.7 and Section 6.8 as the"Group IV Funds" or
each separately as a "Group IV Fund." The Limited Partners and the limited partners or
equivalent non-manager participants in any Parallel Fund, if organized, are sometimes
collectively referred to herein as the "Parallel Fund Investors," and the aggregate Capital
Commitments of all of the Limited Partners together with the aggregate capital commitments of
the other Group IV Fund Investors to all Parallel Funds are collectively referred to herein as the
"Group IV LP Commitments." Except (i) where restricted or prohibited by law, rule, regulation
or other applicable restriction, or(ii)where the potential returns to investors in the Partnership or
a Parallel Fund would be unattractive due to tax, legal, regulatory or other considerations, each
Parallel Fund will invest in every investment made by the Partnership (other than Idle Funds
Investments) at the same time and on substantially the same terms as the Partnership to the extent
practicable. Except as otherwise approved by the General Partner, it is intended that investments
shall be allocated between and among the Group IV Funds in proportion to the capital
commitments to each entity, to the extent practicable. The Group IV Funds shall dispose of their
investments at the same time, on the same terms and in the same relative amounts, to the extent
practicable.
(b) If, upon subsequent closings of the Group IV Funds, there is a change in
the ratios of the aggregate capital commitments of each such fund to the Group IV LP
Commitments, then the General Partner (i) may adjust the allocation of existing Portfolio
Properties between and among such funds, including by transferring a portion of such
investments from one fund to another, (ii) may adjust the respective amounts paid by such funds
in respect of Partnership Expenses and (iii) may adjust the determination of the portions of
partners' contributions used to make investments in Portfolio Properties and pay expenses, to
reflect as nearly as practicable the situation that would have existed if the respective capital
commitments to each fund had always been in the same relative proportions as after the change
in the ratio of capital commitments. In the case of any transfers of investments from one fund to
another pursuant to the preceding sentence, the purchase price of each investment shall be cost,
unless otherwise determined by the General Partner.
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Section 6.8 Expenses.
(a) Except as otherwise provided in Section 6.8(b), expenses of the
Partnership shall not include the normal operating expenses of the General Partner and its
equityholders(including salaries and benefits provided to employees of the General Partner or its
Affiliates, rent and communications costs).
(b) Expenses to be borne by the Partnership ("Pjgnership Expenses") shall
include the following costs and expenses associated with the formation, operation, Dissolution,
winding-up, or Termination of the Partnership: (i) all out-of-pocket expenses associated with the
organization of the General Partner or the Partnership or the syndication of interests therein
(including reasonable travel and other out-of-pocket costs incurred by the General Partner in
connection with the same); (ii) legal, accounting, audit, custodial, appraisal, due diligence,
forestry management and other professional and consulting fees; (iii) banking, brokerage,
broken-deal, registration, qualification, finders, depositary and similar fees or commissions; (iv)
transfer, capital and other taxes, duties, filing fees and costs incurred in acquiring, holding,
selling or otherwise disposing of Partnership assets; (v) insurance premiums, costs and expenses,
indemnifications, costs of litigation and other extraordinary expenses; (vi) costs of financial
statements and other reports to Partners as well as costs of all governmental returns, reports and
other filings; (vii)reasonable travel and other out-of-pocket costs incurred by the General Partner
in connection with the acquisition, ongoing management and disposition of the Portfolio
Properties; (viii) costs of meetings of the Partners (including the reasonable travel and other out-
of-pocket costs incurred by the General Partner in attending such meetings); (ix) interest
expenses; (x) the Management Fee and all costs associated with the Liquidating Trust; (xi)
advertising and public notice costs; (xii) administrative costs associated with the above expenses;
and (xiii) any other expenses not listed in the preceding clauses (i) through (xii) and are a
customary operating expense of a timberland investment of this type. The General Partner
confirms that, (i) in the event the General Partner or any of its Affiliates are required to register
as an investment adviser u4der the Investment Advisers Act, the costs and expenses associated
with such registration, and such registrant's periodic reporting and other obligations under the
Investment Advisers Act, shall be borne solely by the General Partner and its Affiliates (and not
the Partnership) and (ii) in the event that the European Union Alternative Investment Fund
Managers Directive (the "AIFMD") is applicable to the offering of any interests by the
Partnership, the General Partner and .its Affiliates (not including the Partnership) shall be
responsible for all costs associated such AIFMD compliance.
(c) The Group IV Funds shall share Partnership Expenses related to Portfolio
Properties in which such funds co-invest, to the extent practicable, in proportion to the
investments made by each fund with respect to such Portfolio Properties, and shall share any
other common fees and expenses as determined by the General Partner in its reasonable
discretion;provided, however, that the Management Fee, any organizational expenses, placement
fees or operating expenses that are related uniquely to a Group 1V Fund shall be detenn.ined with
respect to, and paid separately by, such fund.
(d) Partnership Expenses that are paid or incurred for the benefit of the
Partnership as well as one or more Other Funds shall be allocated equitably among such entities
by the General Partner in its reasonable discretion.
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(e) Partnership Expenses shall not include organizational expenses in excess
of$1,000,000 in the aggregate.
Section 6.9 Alternative Investment Vehicle. Notwithstanding anything in this
Agreement to the contrary, and in addition to the General Partner's authority to form a Parallel
Fund, the General Partner in its discretion may form one or more special purpose entities (each,
an "Alternative Investment Vehicle") in order to accommodate the tax, legal or regulatory
concerns of any Partner or the Partnership. An Alternative Investment Vehicle may be formed to
permit one or more Limited Partners to invest in parallel with or in lieu of the Partnership, ill one
or more Portfolio Properties, or it may be formed as an entity wholly owned by the Partnership
(or principally owned by the Partnership, if ownership of an interest by another party is
necessary to satisfy tax, regulatory or similar requirements, or owned by the Partnership in
conjunction with other Group IV Funds). The terms and conditions applicable to an Alternative
Investment Vehicle shall be substantially the same as the terms and conditions applicable to the
Partnership, including matters affecting regulated Partners; provided, however, that (a)
provisions in the governing documents of the Alternative Investment Vehicle and the
corresponding provisions of this Agreement (including provisions relating to allocations and
distributions of profits and losses and the General Partner's obligation to return certain amounts
to the Partnership upon liquidation) shall be coordinated arid, if necessary, adjusted to carry out
the purpose and intent of this Agreement, (b) the terms and conditions applicable to an
Alternative Investment Vehicle may vary to address the tax, legal or regulatory concerns that led
to the formation of the Alternative Investment Vehicle, and (c) the entity shall afford
participating Limited Partners limited liability comparable to that provided under this
Agreement. The General Partner may require the Partners to make capital contributions directly
to an Alternative Investment Vehicle to the same extent, for the same purposes, and on the same
terms as Partners are required to make Capital Contributions to the Partnership, and such Capital
Contributions will reduce the Capital Commitments of such Partners to the same extent as if
Capital Contributions had been made to the Partnership with respect thereto. The General
Partner will act as the general partner of, or in a similar capacity with respect to, any Alternative
Investment Vehicle.
Section 6.10 Partner Compensation.
(a) General. Except as otherwise provided in this Section 6.10, no Partner
shall be entitled to compensation for services provided by such Partner to, or for the benefit of,
the Partnership.
(b) Limited Partners. A Limited Partner that, with the consent of the General
Partner, performs services for the Partnership as an employee or independent contractor may
receive such compensation as is agreed to by the General Partner (but not in excess of the fair
market value of such services as determined by the General Partner in its reasonable discretion).
(c) General Partner. (i) The Partnership shall pay to the General Partner
throughout the term of the Partnership an annual "Management Fee." The Management Fee shall
be: (x) payable quarterly, in arrears; (y) pro-rated on a daily basis for short fiscal periods; and (z)
additionally pro-rated on a daily basis (payable immediately) at any time that there is an increase
in the aggregate capital contributions of the Partners, subject to Section 3.2 b iv . The first
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payment of the Management Fee shall be made on the first business day of the first fiscal quarter
following the Initial Closing or at the earliest subsequent date upon which the Partnership has
received sufficient capital contributions to fund such payment. The annual Management Fee rate
shall be equal to (A) through 36 months after Final Closing, 1.00% per annum of called capital
contributions by all Limited Partners plus any leverage utilized; and (B) thereafter, 1.00% per
annum of Fair Market Value (as defined in Section 6 j c) below); provided, however, that
payments by the Partnership of any acquisition fees (a fee equal to 1% of the purchase price of a
Portfolio Property) to Molpus Timberlands Management, LLC in connection with the acquisition
of a Portfolio Property shall be credited against the called capital contributions and reduce the
Management Fee on called capital contributions. The General Partner may, in its sole and
absolute discretion, reduce below 1% (but not to increase) the rate at which the Management Fee
is calculated with respect to one or more Limited Partners' share of called capital contributions
or Fair Market Value, as applicable, for any period, including without limitation in accordance
with any side letter or similar agreement with such Limited Partner. The General Partner may
elect to take all or part of its Management Fee for any period from one or more subsidiary
investment vehicles, in which event the amount of the Management Fee which remains payable
by the Partnership shall be reduced on a dollar for dollar basis, and provided, that the aggregate
Management Fee for each quarter (regardless of the entity from which it is taken) shall not be
increased as a result of the manner in which it is taken.
Section 6.11 Records and Financial Statements.
(a) The General Partner shall cause the Partnership to maintain books,
records, reports, and accounts in accordance with GAAP in which shall be entered all
transactions of the Partnership. The General Partner shall also maintain all schedules and exhibits
to this Agreement and shall update such schedules and exhibits promptly upon receipt of new
information relating thereto. Copies of such books, records, reports, accounts and schedules shall
be located at the Principal Office and shall be available to any Partner for inspection and
copying, upon at least two (2) business days notice, during reasonable business hours.
(b) For each Fiscal Year ended on or following December 31 of the first
Fiscal Year in which the Partnership makes an acquisition of a Portfolio Property, the General
Partner shall cause an audit of the financial statements of the Partnership for such year to be
made in accordance with generally accepted auditing standards by a firm of certified public
accountants of national or regional standing in the United States. A copy of the accountants
report shall be mailed or otherwise furnished to each Partner within 180 days of the end of the
Fiscal Year and shall include a statement, prepared in accordance with GAAP (but taking into
account the Fair Market Value of Partnership assets), of. (i) the assets and liabilities of the
Partnership; (ii) the net Profit or Loss of the Partnership; and (iii) the then-current balance of the
Partner's Capital Account (collectively the "Financial Statements"). In addition, the Partnership
shall supply all other Partnership information reasonably necessary to enable the Partners to
prepare their federal income tax returns and (upon request therefor) to comply with other
reporting and regulating requirements or rule or regulation imposed by law or any securities
exchange. Notwithstanding the foregoing, the Limited Partners acknowledge and agree that the
Partnership may not meet the April 15th deadline in producing K-1s for Limited Partners. In
such event, the General Partner shall provide the Limited Partners a pro forma K-1 based on its
best estimates.
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(c) As promptly as is reasonably possible, but in any event within sixty (60)
days, after the close of each fiscal quarter, the General Partner shall mail or otherwise furnish to
each Partner a statement (which need not have been audited) and shall include: (i) a brief
description of each new investment made by the Partnership since the last statement containing
such information; (ii) a brief progress/status report on each of the Partnership's investments,
including identification of any such investments that constitute greater than 15% of aggregate
Capital Contributions as of such date; and (iii) a copy of the Partnership's quarterly Financial
Statements.
Section 6.12 Valuation of Partnership Assets.
(a) The General Partner (or, if a Partner other than the General Partner, the
Liquidating Partner, either being the "Valuation Partier"), shall value the Partnership's assets
each time items of Profit or Loss are allocated pursuant to Article 4 (it being generally
understood that such valuation will occur once annually at December 31), upon the Dissolution
of the Partnership, and whenever otherwise required by this Agreement or determined by such
Valuation Partner in its sole and absolute discretion. The Valuation Partner shall also value
distributed assets in accordance with the provisions of Article 4 and shall value distributed assets
that are subsequently retuned to the Partnership upon receipt by the Partnership, which valuation
of assets upon distribution shall be provided to the Limited Partners and shall be subject to the
Appraisal Procedure described in Section 6.12(c) and 6.12(d). No less often than once every
third year, the Valuation Partner shall value the Partnership assets in accordance with an
appraisal obtained from an independent appraiser selected by the Valuation Partner. By way of
example, assuming the initial Closing occurs in 2013, the Valuation Partner must use an
independent appraiser no less often than with respect to the years 2016, 2019, 2022, etc. For
years other than years in which the Valuations Partner obtains a comprehensive appraisal of the
Partnership's assets in accordance with this Section 6.12(a_), the General Partner shall have the
Partnership's assets valued in accordance with an annual update of such appraisal. Annual
updates shall be conducted by an independent appraiser selected by the General Partner, and may
account for changes including, but not limited to, annual growth, harvests and price changes. The
Valuation Partner may adjust the Fair Market Value during the course of a fiscal year for
acquisitions, dispositions,timber sales and imputed growth.
(b) Except as otherwise provided in this Agreement, in determining the value
of Partnership property or a Partner's interest in the Partnership, or in any accounting among any
or all of the Partners, no value shall be placed on the goodwill, going concern value, name,
records, files, statistical data or similar assets of the Partnership not normally reflected in the
Partnership's'accounting records, but there shall be taken into consideration any items of income
earned but not yet received, expenses incurred but not yet paid, liabilities fixed or contingent,
and prepaid expenses to the extent riot otherwise reflected in the books of account as well as the
Fair Market Value of options or commitments to purchase or sell properties pursuant to
agreements entered into on or prior to the valuation date.
(c) If, within thirty (30) days after a statement described in Section 6.11(c)
that sets forth the comprehensive appraised Fair Market Value as determined by the Valuation
Partner under Section 6.12(a) and 6.12(b) or a valuation of assets upon distribution under Section
6.12(a) is mailed or otherwise furnished to the Limited Partners, a Majority-In-interest of the
47
Limited Partners notifies the Valuation Partner of their objection to the valuation of one or more
assets set forth in such statement, the Valuation Partner shall redetermine the value of such assets
and shall notify the Partners of the results of such redetermination. If, within thirty (30) days
after such notice, a Majority-In-Interest Interest of the Limited Partners notifies the Valuation Partner of
their objection to such redetermined value and the Valuation Partner thereafter declines to adjust
such value in a manner that eliminates continued objection by a Majority-In-Interest of the
Limited Partners, the value of the assets in question shall be determined in accordance with the
Appraisal Procedure. Except as provided in this Section 6.12fe), the Valuation. Partner's
valuation of Partnership assets shall be deemed the "Fair Market Value" of such assets and shall
be binding and conclusive for all purposes under this Agreement.
(d) For purposes of this Agreement, "Appraisal Procedure" shall refer to the
following steps:
(i) A "Valuation Committee" composed of not more than five (S)
Limited Partners shall be appointed. Two (2) members of the Valuation
Committee shall be Limited Partners appointed by the General Partner, and the
remainder shalt be appointed by a Majority-In-Interest of the Limited Partners
specifically to address the valuation of the asset(s) in question;
(ii) The Valuation Partner and the Valuation Committee shall each
provide the other with notice of their proposed value for the asset(s)in question;
(iii) The Valuation Partner and the Valuation Committee shall each
select an independent appraiser acceptable to the other party (which acceptance
shall not be unreasonably withheld);
(iv) The two appraisers shall jointly select a third appraiser;
(v) The third appraiser shall prepare a comprehensive written appraisal
of the value of the asset(s) in question, a copy of which shall be provided to the
Valuation Committee and the Valuation Partner, and the third appraiser shall
utilize such appraisal to determine which of the proposed values is closest to the
actual fair market value of the asset(s) in question (as of the time for which such
value is to be determined);
(vi) Such closest value shall be deemed to be the Fair Market Value of
the asset(s) in question (as of the time for which such valuation has been
determined) for all purposes under this Agreement; and
(vii) The Valuation Committee shall automatically dissolve (without
any requirement of further action by the Partners).
All determinations, consents and other actions to be taken by a Valuation Committee pursuant to
this Section 6.12(d) shall be made on the basis of a majority vote of the Valuation Committee
members.
48
(e) For purposes of this Section 6.12, a Majority-In-Interest of the Limited
Partners shall in each case be determined as if the 'Valuation Partner (if not already the General
Partner)had, in fact, become the General Partner.
Section 6.13 Confidentiality.
(a) The Limited Partners hereby acknowledge that the Partnership will be in
possession of confidential information the improper use or disclosure of which could have a
material adverse effect upon the Partnership or upon one or more Partners.
(b) The Limited Partners acknowledge and agree that all infonnation provided
to them by or on behalf of the Partnership or the General Partner concerning the business or
assets of the Partnership or a Partner shall be deemed strictly confidential and shall not, without
the prior consent of the General Partner, be (i) disclosed to any Person (other than a Partner); or
(ii) used by a Limited Partner other than for a Partnership purpose or a purpose reasonably
related to protecting such Partner's interest in the Partnership; provided, however, that the
General Partner acknowledges and agrees that Limited Partners have the right to use confidential
information provided to them by or on behalf of the Partnership in order to monitor their interest
in the Partnership and enforce their rights under this Agreement. The General Partner hereby
consents to the disclosure by each Limited Partner of Partnership information to such Limited
Partner's accountants, attorneys and similar advisors bound by a duty of confidentiality. The
General Partner further consents to the release by any Limited Partner that is a fund-of funds or
similar entity, to such Limited Partner's own equityholders, of summary information concerning
the Partnership's financial performance and status. The foregoing requirements of this Section
6.13(b) shall not apply to a Limited Partner with regard to any information that is currently or
becomes: (A) required to be disclosed pursuant to applicable law or a domestic national
securities exchange rule(but in each case only to the extent of such requirement); (B) required to
be disclosed in order to protect such Limited Partner's interest in the Partnership (but only to the
extent of such requirement and only after consultation with the General Partner); (C) publicly
known or available in the absence of any improper or unlawful action on the part of such Limited
Partner; or (D) known or available to such Limited Partner via legitimate means other than
through or on behalf of the Partnership or the General Partner. For purposes of this Section 6.136.13,
Partnership information (including information relating to another Partner) provided by one
Limited Partner to another shall be deemed to have been provided on behalf of the Partnership.
(c) Provided that the Partnership and the General Partner may disclose any
information to the extent necessary for the formation, operation, Dissolution, winding-up or
Termination of the Partnership (as determined by the General Partner in its reasonable
discretion), the Partnership and the General Partner shall similarly refrain from disclosing any
confidential information furnished by a Limited Partner pursuant to Section 6.14.
(d) To the extent permitted by applicable law, and notwithstanding the
provisions of Section 6.11, the General Partner may, in its sole and absolute discretion, keep
confidential from any Limited Partner information to the extent the General Partner reasonably
determines that: (i) disclosure of such information to such Limited Partner likely would have a
material adverse effect upon the Partnership or a Partner due to an actual or likely conflict of
business interests between such Limited Partner and one or more other parties or an actual or
49
likely imposition of additional statutory or regulatory constraints upon the Partnership or a
Partner; or (ii) in the case of a Limited Partner that the General Partner reasonably determines
cannot or will not adequately protect against the improper disclosure of confidential information,
the disclosure of such information to a non-Partner likely would have a material adverse effect
upon the Partnership or a Partner. The foregoing provisions of this Section 6.13(d) shall not
apply to pen-nit the General Partner to keep confidential from a Limited Partner: (x) any
information that such Limited Partner requires to comply with applicable law or a domestic
national securities exchange rule; (y) such Limited Partner's Capital Account balance; or (z) for
a period exceeding twelve (12) months, any specific item of summary balance sheet-type
information with regard to the Partnership. In the event that, pursuant to this Section 6.13(d), a
Limited Partner is denied access to any information relevant to a determination of Pair Market
Value pursuant to Section 6.12, the opportunity of a Majority-In-Interest of the Limited Partners
to invoke the Appraisal Procedure pursuant to Section 6.12(c) and Section 6.12(d) shall be
extended until the Close of Business on the day that is thirty (30) days after the date on which
access to such information is granted. As of the date of this Agreement, the General Partner has
no knowledge of any information that it would seek to keep confidential from a particular
Limited Partner under the provisions of this Section 6.13fd).
(e) The Limited Partners: (i) acknowledge that the General Partner is expected
to acquire confidential third party information that, pursuant to related fiduciary, contractual,
legal or similar obligations, cannot be disclosed to the Partnership or the Limited Partners; and
(ii) agree that neither the General Partner nor its members shall be in breach of any duty under
this Agreement or the Act in consequence of acquiring, holding or failing to disclose such
information to the Partnership or the Limited Partners so long as such obligations were
undertaken in good faith.
(f) The General Partner may waive the confidentiality restrictions with
respect to any Partner.
Section 6.14 Disclosures, Each Partner shall furnish to the Partnership, upon request,
any information with respect to such Partner reasonably determined by the General Partner to be
necessary for the formation, operation, Dissolution, winding-up or Termination of the
Partnership.
Section 6.15 Limitations on Borrowing. The Partnership shall not at any time incur
indebtedness or borrow amounts if, as a consequence, the aggregate principal amount of the
Partnership's indebtedness that would constitute "Acquisition Indebtedness" within the meaning
of Section 514 of the Code or for borrowed money would exceed twenty percent (20%) of the
current Capital Commitments of the Partnership, after giving effect to the amount borrowed or
indebtedness incurred.
Section 6.16 General Partner Payment of Placement or Servicing Fees. The
General Partner, in its sole and absolute discretion, may pay from its own resources placement
fees and/or servicing fees, and the same shall not create any rights in favor of any Limited
Partner, and each Limited Partner hereby waives any and all rights with respect thereto.
Section 6.17 ERISA Compliance.
50
(a) If the Significant Participation Test is satisfied: (i) the General Partner
shall use its reasonable best efforts to manage the affairs of the Partnership in such a manner that,
as of and at all times following the first capital contribution to the Partnership by an ERISA
Limited Partner, the Partnership will qualify as a an "operating company" or "real estate
operating company" within the meaning of the Final Regulation; and (ii) the General Partner
shall promptly notify all ERISA Limited Partners if at any time the Partnersbip fails, or it
appears more likely than not that the Partnership will fail, to so qualify. The Partnership shall not
knowingly engage in any transaction that would result in a violation of ERISA by the
Partnership, the General Partner, or any ERISA Limited Partner.
(b) The General Partner shall cooperate with reasonable requests of an ERISA
Limited Partner made from time to time for the purpose of verifying the status of the Partnership
as a real estate operating company within the meaning of the Final Regulation in effect at that
time, including, but not limited to, a request for verification of such status or such other
information reasonably necessary for such purpose. In the event the assets of the Partnership are
determined to be Plan Assets, the General Partner shall cooperate with each ERISA Limited
Partner with respect to any reporting and disclosure requirements imposed upon such ERISA
Limited Partner.
Section 6.18 Consideration of Partners' Separate Circumstances. The Partners
recognize that the differing financial, regulatory, income tax and other status and circumstances
of the Partners may give rise to conflicts of interest among the Partners with regard to the timing
of capital calls, selection of investments, disposition of assets, making of tax elections, or other
Partnership matters. Except as otherwise specifically provided in this Agreement, the General
Partner, when making decisions or taking action with respect to the Partnership or its business,
shall not be required to take into consideration the separate status or circumstances of any
Partner or group of Partners.
51
Section 6.19 Advisory Board.
(a) The General Partner shall appoint an advisory board (the "Advisory
Board") composed of no fewer than five (5) and no more than (7) persons each being
representatives of a Combined Limited Partner, with the exact number to be determined from
time to time by the General Partner, provided at least three (3) members shall be representatives
of Limited Partners of the Partnership, to consult with the General Partner on valuation policies,
conflicts of interest, overall strategy of the Group IV Funds, and such similar matters as may be
submitted by the General Partner to the Advisory Board from time to time for consultation. With
respect to consideration of conflicts of interest brought before the Advisory Board, the Advisory
Board shall communicate with the Combined Limited Partners regarding such conflicts of
interest to the extent that the Advisory Board or the General Partner determines that such
communication is appropriate. Members of the Advisory Board (each an "Advisory Board
Member") shall each be affiliated with at least one of the Combined Limited Partners and shall
not be affiliated with the General Partner. In selecting Advisory Board Members, the General
Partner shall consider individuals who are representative of the Combined Limited Partners or
otherwise familiar with the Partnership's industry or with financial and investment matters
generally. Advisory Board Members shall be selected for terms of three (3) years each, provided
that the General Partner, in its discretion, can establish staggered terms for the initial Advisory
Board Members. The narnes and contact information of the Advisory Board Members shall be
provided to each Limited Partner. Vacancies on the Advisory Board shall be filled by the
General Partner after consultation with the Advisory Board. Any Advisory Board Member may
be removed by the General Partner acting in good faith and not to further the interests of the
General Partner, or any Affiliates or by a majority vote of the Advisory Board at any time and
for any reason or no reason.
(b) The Advisory Board will meet, in person or via telephonic or similar
means, at least once a year with the General Partner. The General Partner shall provide to each
Advisory Board Member, in advance of each such meeting, relevant information pertaining to
the matters to be discussed at such meeting. At such annual meeting, the Advisory Board may
meet separately, without participation of the General Partner or any Affiliate of the General
Partner, as long as an agenda of the Advisory Board meeting topics is provided to the General
Partner. A summary of the actions of the Advisory Board shall be provided to each Limited
Partner. As to any matter to be voted upon by the Advisory Board, each Advisory Board
Member shall have one (1) equal vote. Except as otherwise provided herein,the Advisory Board
shall act by a majority of its members. The quorum for a meeting of the Advisory Board shall be
a majority of its members. Any member of the Advisory Board who is unable to attend or
participate in a meeting of the Advisory Board may grant in writing to another member of the
Advisory Board or any other Person such member's proxy to vote on any matter upon which
action is taken at such meeting. The Advisory Board may communicate with the Combined
Limited Partners, or any of them, from time to time in connection with the Advisory Board's role
of consultation with the General Partner as described herein. The Advisory Board, upon a
majority vote of its members, may retain separate legal counsel; provided, however, that the
Partnership shall only be required to reimburse an aggregate amount of $50,000 in legal
expenses to the Advisory Board. The Partnership, upon written request of an Advisory Board
Member, shall reimburse such Advisory Board Member for all reasonable business expenses,
including travel expenses, incurred in connection with meetings of the Advisory Board;
52
provided, however, that reimbursement of expenses is limited to a maximum of $3,000 per
Advisory Board Member for each meeting called by the General Partner. Each Advisory Board
Member and the Limited Partner which selects each such Advisory Board Member shall be an
Indemnified Person for purposes of this Agreement. The Advisory Board and its members shall
take no part in the management, control or operation of the Partnership or its business and-shall
have no power or authority to act for the Partnership, bind the Partnership under agreements or
arrangements with third partners or vote on Partnership matters. Advisory Board Members shall
not be considered fiduciaries of the Partnership and shall not owe any fiduciary duties to the
Partnership. The members of the Advisory Board shall maintain the confidentiality of all
Partnership matters and information shared with the Advisory Board, consistent with the
confidentiality provisions applicable to Limited Partners pursuant to Section 6.13 hereof, and
each member of the Advisory Board shall execute a confidentiality agreement to such effect.
Section 6.20 Internal Revenue Service. The General Partner shall give prompt notice
to a Limited Partner of any communication or notice it receives from the US Internal Revenue
Service concerning the Partnership which directly relates to such Limited Partner, excluding
annual or other immaterial compliance notices applicable to the Partnership generally.
Section 6.21 Listed Transactions. The General Partner hereby agrees that it will not
knowingly cause the Partnership to enter into (a) a "listed transaction" as defined in Treasury
Regulation 1.6011-4(b)(2) or(b) a prohibited tax shelter transaction, within the meaning of Code
§ 4965, where (i) the transaction is facilitated by reason of the status of one or more of the
Partners as tax-exempt, tax indifferent or tax-favored, or (ii) the transaction, as of the date the
General Partner or Partnership enters into a binding contract with respect to the transaction, is
identified in published guidance, by type, class or role, as one whereby a tax exempt Limited
Partner would be treated as a party to the transaction. If the General Partner reasonably
determines that the Partnership has engaged in a transaction that is a listed transaction or
prohibited tax shelter, it shall notify each Limited Partner of such determination.
ARTICLE 7.
TRANSFERS AND WITHDRAWALS
Section 7.1 General Provisions Regarding Transfers.
(a) Unless admitted as a Partner in accordance with the provisions of this
Agreement, the transferee of all or any portion of a Partner's interest in the Partnership shall not
be a Partner, but instead shall be subject to the provisions of Section 7.7.
(b) In connection with each Transfer of an interest in the Partnership: (i) the
transferor and transferee shall execute and deliver to the Partnership a written instrument of
Transfer in form and substance reasonably satisfactory to the General Partner; and (ii) the
transferee shall execute and deliver to the Partnership a written instrument pursuant to which the
transferee assumes all obligations of the transferor associated with the transferred interest and
otherwise agrees to comply with the terms and provisions of this Agreement.
(c) Notwithstanding any provision of this Agreement to the contrary, there
shall be no Transfer of an interest in the Partnership unless such Transfer will not: (i) give rise to
53
a requirement that the Partnership register under Section 5 of the Securities Act; (ii) give rise to a
requirement that the Partnership or any Affiliate of the Partnership register as an investment
company or elect to be a "business development company" under the Investment Company Act;
(iii) give rise to a requirement that the General Partner or any equityholder, member, officer, or
employee of the General Partner register as an investment adviser under the United States
Investment Advisers Act of 1940, as amended; (iv) otherwise subject the Partnership, the
General Partner, or any equityholder, member, director, officer, or employee of the General
Partner to additional regulatory requirements, including registration, under federal, State, local or
foreign law, including the Mississippi hedge fund adviser rules, compliance with which would
subject the Partnership or such other Person to material expense or burden (unless each such
affected Person consents to such Transfer); (v) cause the Partnership's assets to be considered
Plan Assets; (vi) constitute a transaction effected through an "established securities market"
within the meaning of Treasury Regulation Section 1.7704-1(b) or otherwise cause the
Partnership to be a "publicly traded partnership" within the meaning of Section 7704 of the
Code; (vii) effect a termination of the Partnership under Section 708 of the Code (but only if
such termination would result in material adverse consequences to the Partnership or any Partner
under federal, State or local law); or(viii) violate any law, regulation or other governmental rule,
or result in a violation thereof by the Partnership, the General Partner, or any equityholder,
member, director, officer, or employee of the General Partner.
(d) Notwithstanding any provision of this Agreement to the contrary, no
pledge, hypothecation, grant of a security interest or similar partial Transfer of an interest in the
Partnership shall be effective until the transferor or transferee shall deliver to the General Partner
such duly executed and filed documentation as shall be required, in the General Partner's
reasonable determination, to ensure that such partial Transfer shall not impair the enforceability
of Section 3.4.
(e) Any Transfer in violation of this Article 7: (i) shall be null and void as
against the Partnership and the other Partners; and(ii) shall not be recognized or permitted by, or
duly reflected in the official books and records of, the Partnership. The preceding sentence shall
not be applied to prevent the Partnership from enforcing any rights it may have in respect of a
transferee arising under this Agreement or otherwise (including any rights arising under Section
(f) Solely for purposes of this Section 7.1, an interest in the Partnership shall
be deemed to include any Derivative Partnership Interest held, issued or created by a Partner,
Assignee or other Person.
Section 7.2 Transfer by a Limited Partner.
(a) Except as otherwise provided in this Section 7.2, a Limited Partner shall
not Transfer all or any portion of its interest in the Partnership without the prior written consent
of the General Partner.
(b) Subject to the provisions of Section 7.2 c , the General Partner shall not
withhold its consent with regard to the Transfer of a Limited Partner's interest: (i) by succession
or testamentary disposition upon the death of a Limited Partner; (ii) in the case of any Limited
54
Partner that is a corporation, to any corporation that wholly owns, or is wholly-owned by, such
corporation; (iii) in the case of any Limited Partner that is a trustee of a trust, to any successor
trustee of such trust or to any beneficiary of a trust, if a distribution to the beneficiary is required
by the trust documents; or (iv) to a Person that is a "qualified purchaser" as defined in the
Investment Company Act.
(c) The General Partner may withhold its consent for any Transfer described
in Section 7.2(b) to the extent that: (i) the transferor would not thereby assign its entire
Partnership interest to one Person; (ii) the Partnership, immediately following such Transfer,
would be deemed to have a larger number of beneficial owners of its securities for purposes of
Section 3(c)(1) of the Investment Company Act than the Partnership had immediately prior to
such Transfer; or (iii) such Transfer would cause an interest in the Partnership to be owned by
one or more Persons that are not (A) "accredited investors" within the meaning of Regulation D
promulgated under the Securities Act and (B) "qualified purchasers" within the meaning of the
Investment Company Act.
(d) In connection with each Transfer, the transferring Limited Partner shall
provide to the General Partner either: (i) an opinion of counsel of such transferring Limited
Partner satisfactory in form and substance to counsel for the Partnership with respect to (x) the
matters referred to in Section 7.1(c), and (y) the effect of the proposed Transfer on the number of '
beneficial owners of the Partnership's securities for purposes of Section 3(e)(1) of the
Investment Company Act; or (ii) sufficient information to allow counsel to the Partnership to
make a determination (x) that the proposed Transfer will not result in any of the consequences
referred to in Section 7.1(c); and (y) as to the effect of the proposed Transfer on the number of
beneficial owners of the Partnership's securities for purposes of Section 3(c)(1) of the
Investment Company Act. The General Partner shall use its reasonable efforts to assist the
transferring Limited Partner in obtaining Partnership information necessary for such Limited.
Partner to satisfy its obligations under the preceding sentence.
(e) In the event of any Transfer which results in multiple ownership of a
Limited Partner's interest in the Partnership, the General Partner may require that one (1) or
more trustees or nominees be designated to represent all or a portion of the interest transferred
for the purpose of receiving all notices which may be given and all payments which may be
made under this Agreement and for the purpose of exercising all rights of the transferees under
this Agreement.
(f) In the event a Limited Partner Transfers (or proposes to Transfer) all or
any portion of its interest in the Partnership, all reasonable legal and other out-of-pocket
expenses incurred by the Partnership on account of the Transfer (or proposed Transfer) shall be
paid by such Limited Partner. Following the effective date of any Transfer, the transferor and
transferee shall be jointly and severally liable for all such expenses.
(g) Except as otherwise specifically provided in this Agreement or with the
consent of the General Partner, all economic attributes of a transferor Limited Partner's interest
in the Partnership (such as the Limited Partner's Capital Commitment, Capital Contribution,
Capital Account balance, and obligation to return distributions or make other payments to the
55
Partnership) shall carry over to a transferee in proportion to the percentage of the interest so
transferred.
(h) Notwithstanding any provision of this Agreement to the contrary, neither a
Limited Partner or a Withdrawn Limited Partner shall, by virtue of having Transferred all or any
portion of its Partnership interest, be relieved of any obligations arising under this Agreement;
provided, however, that a Limited Partner or a Withdrawn Limited Partner shall be relieved of
such obligations:
(i) As provided in Section 7.4 c iv ; or
(ii) To the extent that: (x) such relief is approved by the General
Partner (which approval may be withheld by the General Partner in its sole and
absolute discretion); and (y) such obligations are assumed by another Partner or
Person admitted to the Partnership as a Substitute Limited Partner.
(i) Once all other conditions to the Transfer of a Limited Partner's interest
have been satisfied, such Transfer shall be effective as of. (x) the Close of Business on the last
day of the next ending fiscal quarter of the Partnership; or (y) such other time as shall be jointly
selected by the General Partner, the transferor and the transferee.
Section 7.3 Withdrawal/Removal of a Limited Partner.
(a) Except as provided in Section 3.6(b), a Limited Partner shall not withdraw
from the Partnership or otherwise cease to be a Limited Partner without the consent of the
General Partner, which consent may be withheld in the General Partner's sole and absolute
discretion.
(b) A Limited Partner may be required to withdraw from the Partnership as
provided in Section 3.4(c). The General Partner may also require the complete or partial
withdrawal of a Limited Partner (which, for the avoidance of doubt and without limitation, could
include a reduction of such Limited Partner's Capital Commitment) if the General Partner
'determines, in its reasonable discretion, that continued undiminished membership of the Limited
Partner in the Partnership would (i) constitute or give rise to a violation of applicable law; or (ii)
otherwise subject the Partnership or the General Partner to material onerous legal, tax or other
regulatory requirements that cannot reasonably be avoided without material adverse
consequences to any other Partner or the Partnership.
(c) A Limited Partner shall be deemed to have withdrawn from the
Partnership with the consent of the General Partner upon such Limited Partner's death or
Permanent Incapacity. Except as otherwise determined by the General Partner, in its sole and
absolute discretion, a Limited Partner shall be deemed to have withdrawn without the consent of
the General Partner upon such Limited Partner's Bankruptcy, Dissolution or Termination.
(d) Except as otherwise provided in this Sections 7.3, a Limited Partner shall
not be removed from the Partnership without its consent.
56
(e) Notwithstanding any provision to the contrary, no Partner may redeem its
Partnership interest within 2 years of acquiring its interest if such redemption would result in any
of the consequences referenced in Section 7.1(c).
Section 7.4 Procedures Following Limited Partner'4'Vithdrawal/Removal.
(a) Except as otherwise provided in this Section 7.4, a Limited Partner that
withdraws or is removed from the Partnership in accordance with the provisions of Section 7.3
(including via a deemed withdrawal) or otherwise ceases to be a constituent limited partner of
the Partnership under the Act (each a "Withdrawal Event" and "Withdrawn Limited Partner")
shall be treated as an Assignee and, accordingly, shall have the rights and obligations of an
Assignee as described in Section 7.7. Subject to the preceding sentence and Section 7.4(b), a
Withdrawn Limited Partner shall not be entitled to any redemption of its interest in the
Partnership, distribution or payment in connection with its Withdrawal Event or otherwise in
consequence of its status as a Withdrawn Limited Partner.
(b) An ERISA Limited Partner that has been withdrawn pursuant to Section
3.6(b� may require that its interest in the Partnership be redeemed or sold in accordance with the
provisions of Section 7.4f!g).
(c) In the event that a Limited Partner becomes a Withdrawn Limited Partner,
the General Partner may, in its sole and absolute discretion, provide for the redemption or sale of
such Withdrawn Limited Partner's interest in the Partnership as follows:
(i) The General Partner may cause the Partnership to distribute to the
Withdrawn Limited Partner, in complete redemption of the Withdrawn Limited
Partner's interest in the Partnership, an amount equal to: (x) the Withdrawn
Limited Partner's Updated Capital Account balance (or zero if such balance is
negative) as of the Close of Business on the effective date of the Withdrawal
Event; or (y) such lesser amount as is acceptable to the General Partner and the
Withdrawn Limited Partner. The General Partner shall have absolute discretion to
cause the Partnership to make all or any portion of such distribution in cash or in
kind; provided, however, that, unless the Withdrawn Limited Partner otherwise
consents, the Withdrawn Limited Partner shall not be required to receive an in-
kind distribution of any asset which exceeds the portion of such asset that would
have been distributed to the Withdrawn Limited Partner if: (A) the Partnership
had Dissolved at the Close of Business on the effective date of the Withdrawal
Event; and (B) undivided interests in all Partnership assets had been distributed to
the Partners in proportion to their respective interests in the liquidation proceeds
under Section 8.3. The General Partner may withhold from distribution any
property the distribution of which would, in the General Partner's judgment,
cause hardship to the Partnership.
(ii) The General Partner may sell the Partnership interest of the
Withdrawn Limited Partner for cash to any Person or Persons designated by the
General Partner and remit to the Withdrawn Limited Partner the net sales
proceeds. The sale price shall be an amount equal to: (x) the Withdrawn Limited
57
Partner's Updated Capital Account balance (or zero if such balance is negative) as
of the Close of Business on the effective date of the Withdrawal Event; or (y)
such lesser amount as is acceptable to the General Partner and the Withdrawn.
Limited Partner.
(iii) In connection with the detern-iination of a Withdrawn Limited
Partner's Updated Capital Account balance for purposes of this Section 7.4(c),
each of the Valuation Partner, the Withdrawn Limited Partner, and a Majority-In-
Interest of the other Limited Partners shall have separate standing under Section
6.12 to: (x) initiate the Appraisal Procedure; (y) select an appraiser; and (z)
submit a proposed value for Partnership assets.
(iv) From and after the sale or redemption of a Withdrawn Limited
Partner's interest in the Partnership pursuant to this Section 7.4 c , the Withdrawn
Limited Partner shall have no further obligation to the Partnership in respect of'its
Capital Commitment.
(v) In the case of an ERISA Limited Partner that is entitled to payment
in exchange for its interest in the Partnership pursuant to this Section 7.4(c) due to
a withdrawal pennitted under Section_ 3.6(12), the Partnership shall use its
reasonable efforts to cause such payment to be made as promptly as possible and
in any event within two (2) years after the effective date of such ERISA Limited
Partner's withdrawal from the Partnership.
(vi) In the event that only a portion of a Limited Partner's interest in
the Partnership is withdrawn, the foregoing provisions of this Section_7.4(c)shall
be adjusted to apply only in respect of such withdrawn interest. Pursuant to the
mutual consent of the General Partner and a Withdrawn Limited Partner (which
consent may be withheld in such Persons' sole and absolute discretion), such
Withdrawn Limited Partner may receive less than the full amount to which it is
otherwise entitled under this Section 7.4 c).
Section 7.5 Transfer by the General Partner.
(a) The General Partner shall not Transfer all or any portion of its interest in
the Partnership without the consent of a Majority-in-Interest of the Limited Partners; provided
that, without the consent of the Limited Partners, the General Partner may, at the General
Partner's expense,transfer its interest to an Affiliate of the General Partner.
(b) In the event that a Transfer by the General Partner is approved by a
Majority-in-Interest of the Limited Partners or otherwise allowed pursuant to the terms of this
Section 7.5, each of the remaining Limited Partners shall be deemed to have consented to such
Transfer. In the event that a Majority-in-Interest of the Limited Partners consents to the
admission of the transferee as a constituent general partner of the Partnership, each of the
remaining Limited Partners shall be'deemed to have consented to such admission. Any additional
58
or successor General Partner shall be fully bound by the obligations, and limitations on the
authority, of the General Partner set forth in this Agreement.
Section 7.6 Withdrawal/Removal of the General Partner.
(a) Except as permitted under Section 7.5, the General Partner shall not
voluntarily withdraw from its position as the sole constituent general partner of the Partnership.
(b) The General Partner may be removed from its position (i) for Cause by a
vote of Combined Limited Partners representing a majority of Capital Commitments that are not
Affiliates of the General Partner, and (ii) without Cause by a vote of Combined Limited Partners
representing seventy-five percent (75%) of Capital Commitments of Partners (excluding
Affiliates of the General Partner). The General Partner shall provide written notice to the
Limited Partners as soon as practicable upon the General Partner's knowledge of the occurrence
of an event or action which may constitute "Cause" under this Section 7.6. The General Partner
must receive written notice of any meeting at which any Partner intends to request a vote for
removal of the General Partner or any Partner soliciting the written consent of the Limited
Partners to remove the General Partner not less than sixty (60) days prior to (i) the date of the
meeting or (ii) the date such written consent is to be circulated to the Limited Partners. In the
event of a removal of the General Partner for Cause, the investment management agreement
between the Partnership and any Affiliate of the General Partner serving as investment adviser to
the Partnership or any comparable investment management agreement between any subsidiary
investment vehicle of the Partnership and any Affiliate of the General Partner shall automatically
terminate and be of no further force or effect.
(c) The General Partner may be forced to withdraw involuntarily due to
Bankruptcy or any other event that constitutes an event of withdrawal under the Act.
(d) For purposes of this Section 7.6, "Cause" shall mean a determination by
the Combined Limited Partners that the General Partner or any of its Affiliates has committed a
material breach of its duties, has committed a material breach of securities laws related to the
operation of the Partnership that has not been remediated or cured by the General Partner within
a reasonable time, considering the facts and circumstances thereof, of the General Partner's
receipt of notice thereof or has committed gross negligence, fraud or willful misconduct or has
been convicted of, or has entered a guilty plea or plea of no contest with respect to (i) a felony
(other than a traffic violation) or (ii) any crime involving dishonesty that has a material adverse
effect on the Partnership or the Group IV Funds, subject to the General Partner's right to contest
such determination by the Combined Limited Partners in a court of law or to a governmental
body.
(e) Following the involuntary withdrawal or removal of the General Partner in
accordance with the provisions of this Section 7.6, or the occurrence of any other. event which
otherwise terminates the General Partner's status as a constituent General Partner of the
Partnership under the Act, the Partnership shall pay the General Partner seventy-five percent
(75%) of the distributions to which the General Partner-would be entitled on such date as if the
Partnership's Portfolio Properties were sold and the Partnership were Dissolved and liquidated in
accordance with the provisions of Article 8, and the remaining twenty-five percent (25%) of such
59
distributions with respect to the General Partner's general partnership interest shall be forfeit.
Nothing in this Section 7.6 shall be deemed to affect or reduce ally distributions to which the
General Partner may be entitled as a Limited Partner in the Partnership.
(f) If, during the period beginning on the date of the Initial Closing and
ending on the final day of the Commitment Period, a Change of Control of the General Partner
occurs, the General Partner shall, within forty-five (45) days following the occurrence of the
Change of Control, notify the Advisory Board and the Limited Partners of such developments
and provide information regarding the controlling ownership of the General Partner. In the event
that the Advisory Board does not approve the controlling ownership of the General Partner in
accordance with Section 6.19, such approval not to be unreasonably delayed or withheld, the
Advisory Board may, upon a vote of a majority of the members of the Advisory Board, make a
non-binding written recommendation to the Combined Limited Partners for either (i) removal of
the General Partner or (ii)termination of the Commitment Period without removal of the General
Partner, provided that any such removal of the General Partner or termination of the
Commitment Period by the Combined Limited Partners shall require a vote of the Combined
Limited Partners representing seventy-five percent (75%) of Capital Commitments of Partners
(excluding Affiliates of the General Partner) in accordance with the procedures contained in
Section 7.6(b). "Change of Control" shall mean a change in the equity ownership or the
economic interests of the General Partner such that (i) the immediate family of Richard Molpus
or one or more of the Key Executives, either directly or indirectly(such as through trusts or other
entities), do not control a majority of the equity interests in the General Partner or (ii) the
immediate family of Richard Molpus, immediate family of one or more of the Key Executives,
or non-profit entities with a charitable, educational, religious or other purpose that is in the
public interest or common good, either directly or indirectly (such as through trusts, other
entities, charitable foundations, charitable remainder trusts or other estate planning devices
which direct the remainder of any such economic interests to such immediate family members or
non-profit entities), do not hold a majority of the economic interests in the General Partner.
(g) If, during the period beginning on the date of the Initial Closing and
ending on the final day of the Commitment Period, three or more of the Key Executives leave
their positions with the General Partner (excluding the death or disability of Richard Molpus)
within a single sixty (60) day period (a "Key Man_Eyent"), the General Partner shall fill all of
such positions (or such lesser number as it may determine advisable as described below) before
consummating further acquisitions of Portfolio Properties. Upon the occurrence of a Key Man
Event, the General Partner shall promptly notify the Advisory Board and the Limited Partners of
such Key Man Event and provide information regarding any individuals appointed to replace the
departed Key Executives within ninety (90) days of such Key Man Event. In the event that the
General Partner determines that, in light of current staffing needs based on acres and assets under
management by the General Partner or its Affiliates, it is advisable to reduce the total number of
Key Executives, and therefore not to replace all of such departed Key Executives, then the
General Partner shall notify the Advisory Board of such determination and the reasons therefor.
In the event that the Advisory Board does not approve the resulting executive team in accordance
with Section 6.19, such approval not to be unreasonably delayed or withheld, the Advisory
Board may, upon a vote of a majority of the members of the Advisory Board, make a non-
binding written recommendation to the Combined Limited Partners for either (i) removal of the
General Partner or (ii) tennination of the Commitment Period without removal of the General
60
Partner, provided that any such removal of the General Partner or termination of the
Commitment Period by the Combined Limited Partners shall require a vote of the Combined
Limited Partners representing seventy-five percent (75%) of Capital Commitments of Partners
(including Affiliates of the General Partner) in accordance with the procedures contained in
Section 7.6(b).
Section. 7.7 Status of Assignees.
(a) Notwithstanding any provision of this Agreement to the contrary: (i) an
Assignee shall not be admitted to the Partnership as a Substitute Limited Partner without the
consent of the General Partner, which consent may be withheld in the General Partner's sole and
absolute discretion; and (ii) an Assignee shall be admitted to the Partnership as a general partner
only as provided in Section 7.5 or Section 8.2.
(b) All rights and privileges associated with an Assignee interest in the
Partnership shall be derived solely from the Partner interest of which such rights and privileges
were previously a component part. No Assignee shall hold, by virtue of such Assignee's interest
in the Partnership, any rights and privileges that were not specifically transferred to such
Assignee by the prior holder of such interest. No Partner, Assignee or other rights or privileges
arising under this Agreement or the Act shall apply with respect to a notional or constructive
interest in the Partnership, without regard to whether such interest constitutes a Derivative
Partnership Interest.
(c) An Assignee that holds an interest in the Partnership shall be entitled to
receive the allocations attributable to such interest pursuant to Article 4, to receive the
distributions attributable to such interest pursuant to Articles 5 and 8 and to Transfer such
interest in accordance with the terms of this Article 7. Notwithstanding the preceding sentence,
the Partnership and the Partners shall incur no liability for allocations and distributions made in
good faith to a transferor until a valid written instrument of Transfer has been received by the
Partnership and recorded on its books and the effective time of the Transfer has passed.
(d) To the extent otherwise applicable to the interest in the Partnership that
has been transferred to an Assignee, the Assignee shall be subject to, and bound by, all of the
terms and provisions of this Agreement that inure to the benefit of the Partnership or any Partner
(without regard to whether such Assignee has executed a written instrument of Transfer or
assumption described in Section 7,1(b) or Section 73(c)). Without limitation on the preceding
sentence, an Assignee that holds an interest in the Partnership shall be responsible for any unpaid
Capital Commitment and obligation to return distributions or make other payments to the
Partnership associated with such interest and shall comply with the provisions of Section 6,13,
Section 6.14 and Section 11.16.
(e) Solely to the extent necessary to give effect to the Assignee rights and
obligations set forth in Section 73(c) and Section 7.7(d), an Assignee shall be treated as a
Partner for purposes of this Agreement.
(f) An Assignee shall not, solely by virtue of its status as such, hold any non-
economic rights in respect of the Partnership. Without limitation on the preceding sentence, an
61
Assignee's interest in the Partnership shall not entitle such Assignee to participate in the
management, control or operation of the Partnership or its business, act for the Partnership, bind
the Partnership under agreements or arrangements with third parties, or vote on Partnership
matters. An Assignee shall not have any right to receive or review Partnership books, records,
reports or other information; provided, however, that an Assignee may, at its own expense,
require that an independent public accounting firm of national or regional standing in the United
States review (not more than once per Fiscal Year) the Partnership's audited financial statements
for purposes of determining that such Assignee has received from the Partnership all
distributions to which it is entitled in respect of its economic interest in the Partnership. An
Assignee shall not hold itself out as a Partner in any forum or for any purpose; provided,
however, that, to the extent necessary to maintain consistency with the Partnership's income tax
returns, reports, and other flings, an Assignee shall take the position that it is a Partner solely for
income tax purposes. Notwithstanding the foregoing provisions of this Section 7.7(f), an
Assignee shall have the amendment consent rights specified in Section 11.5(c).
(g) The Partnership may, at any time and in the sole and absolute discretion of
the General Partner, redeem (or cause the sale of) the Partnership interest of any Assignee for
cash equal to the Fair Market Value of such interest. In determining Fair Market Value for
purposes of this Section 7.7(g), each of the Valuation Partner, a Two-Thirds-Interest of the
Limited Partners, and the Assignee whose Partnership interest is to be sold or redeemed pursuant
to this Section 7.7(g) shall have separate standing under Section 6.12(d) to select an appraiser
and submit a proposed value for the interest to be sold or redeemed. With regard to an Assignee
that is a Withdrawn Limited Partner or successor in interest thereto, the foregoing rights of the
Partnership under this Section 7.7(g) shall be in addition to those rights of the Partnership set
forth in Section 7.4.
(h) Set forth below the name of each Assignee on Schedule B shall be
appropriate contact information for such Assignee (including such Assignee's mailing address,
telephone number, and facsimile number as well as, in the case of an Assignee that is an entity,
the name or title of an individual to whom notices and other correspondence should be directed).
Each Assignee shall promptly provide the Partnership with the information required to be set
forth for such Assignee on Schedule B and shall thereafter promptly notify the Partnership of any
change to such information.
ARTICLE S.
DISSOLUTION AND LIQUIDATION
Section 8.1 Dissolution Events. The Partnership shall be Dissolved upon the first to
occur of the following events:
(a) Expiration of the Term;
(b) The sale of all or substantially all of the assets of the Partnership;
(c) Permanent cessation of the Partnership's business;
62
(d) The withdrawal, retirement, removal, Bankruptcy, Dissolution, death or
Permanent Incapacity of the General Partner, unless the Partnership is continued pursuant to
Section 8.2; provided, however, that the Partnership shall not be Dissolved upon a Dissolution of
the General Partner in connection with an acquisition or merger of the General Partner causing a
Transfer of the General Partner's interest in the Partnership which has been approved by a
Majority-in-Interest of the Limited Partners pursuant to Section 7.5;
(e) An election to Dissolve the Partnership executed by the General Partner
and a Two-Thirds-Interest of the Limited Partners;
(f) An election to Dissolve the Partnership by a vote of the Combined Limited
Partners representing seventy-five percent (75%) of Capital Commitments of Partners (excluding
Affiliates of the General Partner) in accordance with the procedures contained in Section 7.6(b);
or
(g) The entry of a decree of judicial dissolution of the Partnership under the
Act.
Section 8.2 Elections Following Certain Dissolution Events. Upon the occurrence
of a Dissolution event described in Section 8.1(d) with respect to the General Partner, the
Limited Partner having the largest Capital Account balance shall promptly call a meeting of the
Partners in accordance with Section 11.1. At that meeting, the Partners may by a Two-Thirds-
Interest of the Limited Partners vote (in person or by proxy) to elect to continue the Partnership
in accordance with the terms of this Agreement and appoint a new General Partner. If the
Partners do not elect to continue the Partnership, a Liquidating Partner shall be elected by a Two-
Thirds-Interest of the Limited Partners present (in person or by proxy) at the meeting.
Section 8.3 Winding Up and Liquidation.
(a) Except as provided in Section 8.4, upon Dissolution of the Partnership, the
Liquidating Partner shall promptly wind up the affairs of, liquidate and Terminate the
Partnership. In furtherance thereof, the Liquidating Partner shall: (i) have all of the
administrative and management rights and powers of the General Partner (including, without
limitation, the power to bind the Partnership and to retain a Person other than a Partner to assist
in the liquidation of the Partnership); (ii) be reimbursed for Partnership Expenses it incurs; and
(iii) receive Management Fees otherwise payable to the General Partner during the period of
winding-up and liquidation. Following Dissolution of the Partnership, the Liquidating Partner
shall sell or otherwise dispose of assets determined by the Liquidating Partner to be unsuitable
for distribution to the Partners, but shall engage in no other business activities except as may be
necessary, in the reasonable discretion of the Liquidating Partner, to preserve the value of the
Partnership's assets during the period of winding-up and liquidation. In any event, the
Liquidating Partner shall use its reasonable best efforts to prevent the period of.winding-up and
liquidation of the Partnership from extending beyond the date which is one (1) year after the
Partnership's date of Dissolution. At the conclusion of the winding-up and liquidation of the
Partnership, the Liquidating Partner shall: (x) designate one or more Persons to hold the books
and records of the Partnership (and to make such books and records available to the Partners on a
reasonable basis) for not less than six (6) years following the termination of the Partnership
63
under the Act; and (y) execute, file and record, as necessary, a certificate of termination or
similar document to effect the termination of the Partnership under the Act and other applicable
laws.
(b) Distributions to the Partners in liquidation may be made in cash or in kind,
or partly in cash and partly in kind, as determined by the Liquidating Partner and subject to
Section 5.4; provided, however, that the Partnership shall not make in-kind distributions of
property (other than cash or marketable securities) to any Limited Partner without such Limited
Partner's prior written consent. Distributions in kind shall be valued at the Fair Market Value of
the distribution, as determined by the Liquidating Partner in accordance with the provisions of
Section 6.12 and shall be subject to such conditions and restrictions as may be necessary or
advisable in the reasonable discretion of the Liquidating Partner to preserve the value of the
property so distributed or to comply with applicable law.
(c) The Profits and Losses of the Partnership during the period of winding-up
and liquidation shall be allocated among the Partners in accordance with the provisions of Article
4. If any property is to be distributed in kind, the Capital Accounts of the Partners shall be
adjusted with regard to such property in accordance with the provisions of Article 4.
(d) The assets of the Partnership (including proceeds from the sale or other
disposition of any assets during the period of winding-up and liquidation) shall be applied as
follows:
(i) First, to repay any indebtedness of the Partnership (which may
include, for the avoidance of doubt, any costs or expenses incurred in connection
with the Dissolution of the Partnership), whether to third parties or the Partners, in
the order of priority required by law;
(ii) Next, to any reserves which the Liquidating Partner reasonably
deems necessary for contingent or unforeseen liabilities or obligations of the
Partnership (which reserves when they become unnecessary shall be distributed in
accordance with the provisions of clause(iii), below); and
(iii) Next, to the Partners with positive Capital Account balances in an
amount equal to the positive Capital Account balance in the order of priority
listed in Section 5.1(b); provided, however, in no event shall a Partner receive
aggregate distributions under this Section 8.3(d) in excess of its positive Capital
Account balance. Prior to the liquidating distributions under this Section 8.3, the
Capital Accounts of the Partners shall be adjusted as provided in Article 4 for all
prior contributions and distributions of property (including cash) and all prior
allocations of income, gain, loss and deduction (including, without limitation, the
allocations of gain or loss as provided in subparagraph (c) of the definition of
"Profits" and "Losses").
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Section 8.4 Formation of Liquidating Trust.
(a) At the election of the Liquidating Partner (which election may be withheld
in the Liquidating Partner's sole and absolute discretion), Portfolio Properties held by the
Partnership at the time of its Dissolution or at any time during the process of its winding-up and
liquidation may be placed in a "Liquidating- Trust" for the benefit of the Partners. The
Liquidating Partner or its designee shall be the trustee of the Liquidating Trust. The trustee shall
use its reasonable best efforts to manage the Liquidating Trust such that the Liquidating Trust
qualifies as a "liquidating trust" within the meaning of Treasury Regulations Section 301.7701-
4(d) and shall use its reasonable efforts to sell or distribute the assets of the Liquidating Trust as
promptly as is consistent with applicable legal or contractual obligations and with maximizing
the value of the Liquidating Trust assets for the benefit of the beneficiaries (as determined by the
trustee in its reasonable discretion). The trustee shall not be required to take any steps
constituting active management of the Liquidating Trust assets. In any event, the Liquidating
Trust shall be terminated and its assets distributed within two (2) years after the final liquidation
of the Partnership. Each Partner's interest in the assets of the Liquidating Trust shall be the same
as if such assets had, at the time such assets were placed in the trust, been distributed to the
Partners by the Partnership in accordance with Section 8.3 and then contributed by the Partners
to the Liquidating Trust in exchange for trust interests proportionate to their respective
contributions. The provisions of Section 5.4 shall apply to all distributions made by the
Liquidating Trust (with the trustee taking the place of the General Partner as set forth in such
Section).
(b) The trustee of the Liquidating Trust shall receive an annual fee equal to
one percent(1°10) of the cost basis of the Liquidating Trust assets(determined in accordance with
GAAP and payable by the Liquidating Trust as of the first day of each annual period, but
increased on a daily pro-rated basis, payable on the first day of next commencing fiscal quarter,
for each period in which the cost basis of the Liquidating Trust assets is increased) and shall be
reimbursed for all reasonable out-of-pocket expenses incurred on behalf of or for the benefit of
the Liquidating Trust. At the election of the Liquidating Partner, Partnership cash or other
property may be placed in the Liquidating Trust solely for the purpose of enabling the
Liquidating Trust to pay the fees and expenses described in the preceding sentence.
(c) In the event that assets of the Liquidating Trust would otherwise be Plan
Assets, the Liquidating Partner shall take such actions as the Liquidating Partner determines are
reasonably necessary to ensure that each ERISA Limited Partner will not be in violation of
ERISA or the terms of its governing instruments in consequence of its participation in the
Liquidating Trust. Such actions may include, but shall not be limited to, any one or more of the
following. (i) segregation of the interests of one or more affected ERISA Limited Partners into a
separate Liquidating Trust; (ii) appointment of a trustee that is a registered investment adviser
under the United States Investment Advisers Act of 1940, as amended; (iii) redemption of an
ERISA Limited Partner's interest in the Liquidating Trust; and (iv) such other actions as the
Liquidating Partner and all ERISA Limited Partners shall agree are necessary or appropriate.
65
ARTICLE 9.
OTHER TAX MATTERS
Section 9.1 Liability. The Partnership shall prepare and timely file all federal, state,
and local tax returns required to be filed by the Partnership. Each Partner shall furnish to the
Partnership all pertinent information in its possession relating to the Partnership's operations that
is necessary to enable the Partnership's tax returns to be timely prepared and filed. The
Partnership shall deliver a copy of each such return to the Partners promptly prior to the due date
of any such return taking into account extensions, together with such additional information as
may be required by the Partners in order for the Partners to file their individual returns reflecting
the Partnership's operations. The Partnership shall bear the costs of the preparation and filing of
its returns.
Section 9.2 Tax Elections. The Partnership shall make the following elections for tax
purposes on the appropriate returns:
(a) to the extent permitted by law, to adopt the calendar year as the
Partnership's taxable year;
(b) to the.extent permitted by law, to adopt the accrual method of accounting
and to keep the Partnership's books and records on the accrual method;
(c) if a distribution of the Partnership's property as described in Code Section
734(b) occurs or upon a Transfer of a Partnership interest as described in Code Section
743(b) occurs, on request by notice from any Partner, to elect, pursuant to Code Section
754, to adjust the basis of Partnership's properties; and
(d) any other election the General Partner deems appropriate and in the best
interests of the Partners.
The Partnership intends to-be classified as a partnership for federal income tax purposes under
Treasury Regulation § 301.7701-3.Neither the Partnership nor any Partner may make an election
under Treasury Regulation § 301.7701-3(c) to treat the Partnership as an association taxable as a
corporation. To the extent Treasury Regulation § 301.7701-3 does not govern the state and local
tax classification of the Partnership, the General Partner shall take such actiork as may be
permitted or required under any state and/or local law applicable to the Partnership to cause the
Partnership to be taxable as, and in a manner consistent with, a partnership (or the functional
equivalent thereof under applicable law) for the state and/or local income tax purposes. In
addition, neither the Partnership nor any Partner may make an election for the Partnership to be
excluded from the application of the provisions of subchapter K of chapter 1 of subtitle A of the
Code or any similar provisions of applicable state law and no provision of this Agreement shall
be construed to sanction or approve such an election.
Section 9.3 Tax Matters Partner.
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(a) The General Partner (or if a Partner other than the General Partner is
appointed as the Liquidating Partner, then the Liquidating Partner) is hereby designated the "Tax
Matters Partner" (herein so called) as that terra is defined in Code Section 6231(a)(7).
(b) Except to the extent specifically provided in the Code or the Treasury
Regulations (or the Iaws of relevant non-federal taxing jurisdictions), the Tax Matters Partner, in
its sole and absolute discretion, shall have exclusive authority to act for or on behalf of the
Partnership with regard to tax matters, including the authority to make (or decline to make) any
available tax elections. Upon the request of a Limited Partner, the Tax Matters Partner shall use
its reasonable best efforts to promptly provide the name and address of such Limited Partner to
the General Partner for the purpose of enabling such Limited Partner to receive certain notices of
administrative proceedings as provided in Section 6223 of the Code. The Tax Matters Partner
shall use its best efforts to comply with the responsibilities outlined in Code Sections 6222
through 6231 and in doing so shall incur no liability to the other Partners provided that the Tax
Matters Partner was not grossly negligent in complying with its responsibilities. Notwithstanding
the Tax Matters Partner's obligation to use its best efforts in the fulfillment of its responsibilities,
the Tax Matters Partner shall not be required to incur any expenses for the preparation for or
pursuance of administrative or judicial proceedings unless the Partners agree on a method for
sharing such expenses, or the Partnership can pay for such expenses.
(c) No Limited Partner shall file, pursuant:to Code Section 6227, a request for
an administrative adjustment of items for any Partnership taxable year without first notifying the
other Partners. If the Limited Partners agree with the requested adjustment, then the Tax Matters
Partner shall file the request for administrative adjustment on behalf of the requesting Partner. If
such consent is not obtained within thirty (30) calendar days from such notice, or within the
period required to timely file the request for administrative adjustment, if shorter, any Partner,
including the Tax Matters Partner, may file a request for administrative adjustment on its own
behalf.
(d) Any Partner intending to file a petition under Code Sections 6226, 6228 or
other Section with respect to any item or other matter involving the Partnership shall notify the
other Partners of such intention and the nature of the contemplated proceeding. In the case where
the Tax Matters Partner is the Partner intending to file such petition on behalf of the Partnership,
such notice shall be given within a reasonable period of time to allow the other Partners to
participate in the choosing of the forum in which such petition will be filed. If any Partner
intends to seek review of any court decision rendered as a result of a proceeding instituted under
the preceding provisions of this Section 9.3(d), then such Partner shall notify the other Partners
of such intended action.
(e) Any Limited Partner entering into a settlement agreement with the United
States Department of the Treasury with respect to any Partnership items (within the meaning of
Code Section 6231(a)(3)) shall notify the Tax Matters Partner of such settlement agreement and
its terms within ninety (90) calendar days after the date thereof.
(f) The provisions of this Section 9.3 shall survive the termination of the
Partnership or the termination of any Partner's interest in the Partnership and shall remain
binding on the Partners for a period of time necessary to resolve with the IRS or the United
67
States Department of the Treasury any and all matters regarding the United States Federal
income taxation of the Partnership.
{g) No Partner shall file a notice with the United States Internal Revenue
Service under Code Section 6222(b) in connection with such Partner's intention to treat an item
on such Partner's federal income tax return in a manner which is inconsistent with the treatment
of such item on the Partnership's federal income tax return unless such Partner has, not less than
thirty(30)days prior to the filing of such notice, provided the Tax Matters Partner with a copy of
the notice and thereafter in a timely manner provides such other information related thereto as
the Tax Matters Partner shall reasonably request.
Section 9.4 Amounts Withheld. All amounts required to be withheld pursuant to
federal, state, local, or foreign tax laws shall be treated as amounts actually distributed to the
affected Partners for all purposes under this Agreement. The General Partner is hereby
authorized to withhold from distributions, or with respect to allocations, to the Partners and to
pay over any federal, state, local, or foreign government any amounts required to be so withheld
pursuant to federal, state, or local law.
ARTICLE 10.
LIABILITY AND INDEMNIFICATION
Section 10.1 Liability. Except as otherwise specifically provided in this Agreement to
the maximum extent permitted by law, no Indemnified Person shall be personally liable for the
return of any contributions made to the capital of the Partnership by the Limited Partners or the
distribution of Capital Account balances. Except to the extent that Material Misconduct on the
part of an Indemnified Person shall have given rise to the matter at issue, such Indemnified
Person shall not be liable to the Partnership or the Limited Partners for any act or omission
concerning the Partnership. Without limitation on the preceding sentence, except to the extent
that such action constitutes Material Misconduct, an Indemnified Person shall not be liable to the
Partnership or to any Partner in consequence of voting for, approving, or otherwise participating
in the making of a distribution by the Partnership pursuant to Article 5, Article 7 or Article 8. An
Indemnified Person shall not be liable to the Partnership or the Partners for losses due to the acts
or omissions of any other Person serving as an independent contractor, employee or other agent
of the Partnership unless such Indemnified Person was or should have been directly involved
with the selection, engagement or supervision of such Person and the actions or omissions of
such Indemnified Person in connection therewith constituted Material Misconduct.
Section 10.2 Indemnification.
(a) Except to the extent that Material Misconduct on the part of an
Indemnified Person shall have given rise to the matter at issue or the matter at issue involves an
internal dispute among the General Partners, if more than one, or an internal dispute among the
General Partner and parties (other than. Group IV funds) that are Affiliates of the General
Partner only (and not involving any parties that are not Affiliates of the General Partner) the
Partnership shall indemnify and hold such Indemnified Person harmless from and against any
loss, expense, damage or injury suffered or sustained by such Indemnified Person by reason of
68
any actual or threatened claim, demand, action, suit or proceeding (civil, criminal, administrative
or investigative) in which such Indemnified Person may be involved, as a party or otherwise, by
reason of its actual or alleged management of, or involvement in, the affairs of the Partnership
(including an Indemnified Person's involvement as an offeror of interests in the Partnership).
This indemnification shall include, but not be limited to: (i) payment as incurred of reasonable
attorneys fees and other out-of-pocket expenses incurred in investigating or settling any claim or
threatened action (where, in the case of a settlement, such settlement is approved by the General
Partner), or incurred in preparing for, or conducting a defense pursuant to, any proceeding up to
and including a final non-appealable adjudication; (ii) payment of fines, damages or similar
amounts required to be paid by an Indemnified Person; and (iii) removal of liens affecting the
property of an Indemnified Person. The total obligation of the Partnership to all Indemnified
Persons under this Section 10.2 shall be limited to the assets of the Partnership.
(b) Indemnification payments shall be made pursuant to this Section 10.2 only
to the extent that the Indemnified Person is not entitled to receive (or will not in any event
receive) from a third party equal or greater indemnification payments in respect of the same loss,
expense, damage or injury_ In the event, however, that the General Partner determines that an
Indemnified Person would be entitled to receive indemnification payments from the Partnership
but for the operation of the preceding sentence, the General Partner may cause the Partnership to
advance indemnification payments to the Indemnified Person (with repayment of such advance
to be secured by the Indemnified Person's right to receive indemnification payments from any
applicable third party); provided, however, that an Indemnified Person shall not be entitled to
receive advance indemnification payment in the event that Majority-In-Interest of the Limited
Partners(excluding Affiliates of the General Partner)have initiated a lawsuit.
(e) As a condition to receiving an indemnification payment pursuant to this
Section 10.2, an Indemnified Person shall execute an undertaking in form and substance
acceptable to the General Partner providing that, in the event it is subsequently determined that
such Person was not entitled to receive such payment (whether by virtue of such Person's
Material Misconduct or otherwise), such Person shall return such payment to the Partnership
promptly upon demand therefor by any Partner.
(d) Notwithstanding the foregoing provisions of this Section 10.2, the
Partnership shall be under no obligation to indemnify an Indemnified Person from and against
any reduction in the value of such Person's interest in the Partnership that is attributable to
losses, expenses, damages or injuries suffered by the Partnership or to any other decline in the
value of the Partnership's assets, including, without limitation, economic losses.
(e) The indemnification provided by this Section 10.2 shall not be deemed to
be exclusive of any other rights to which any Indemnified Person may be entitled under any
agreement, as a matter of law, in equity or otherwise.
(f) Notwithstanding anything to the contrary set forth in this Agreement, any
Indemnified Person entitled to indemnification from the Partnership hereunder shall first seek
recovery under any other indemnity or insurance policies (other than those provided for,
purchased or maintained by the General Partner at the Partnership's expense, or any other
Indemnified Person) by which such Indemnified Person is indemnified or covered, as the case
69
may be, (including, without limitation and to the extent applicable, those provided for, purchased
or maintained by portfolio companies or other third-party sources), and, if such Indemnified
Person is other than the General Partner, such Indemnified Person shall obtain the written
consent of the General Partner prior to entering into any compromise or settlement which would
result in an obligation of the Partnership to indemnify such Indemnified Person. It is intended
an-iong the Partners and the Indemnified Persons that any advancement or payment by the
Partnership to the Indemnified Person will result in the Partnership's having a subrogation.claim
against the relevant portfolio company in respect of such advancement or payments. If an
Indemnified Person that has received payments from the Partnership pursuant to this Section
10.2 actually receives duplicative payments from a portfolio company (or its insurance policies)
for the same liabilities, such Indemnified Person shall repay the Partnership as soon as
practicable to the extent of such duplicative payments. The General Partner and the Partnership
shall be specifically empowered to structure any such advancement or payment as a loan or other
arrangement as the General Partner may determine necessary or advisable to give effect to or
otherwise implement the foregoing.
ARTICLE 11.
GENERAL PROVISIONS
Section 11.1 Meetings. There shall be an annual meeting of the Partnership, which
shall be held in conjunction with the annual meeting of any Parallel Fund. The General Partner
will provide at least thirty (30) days' prior notice of the date of the annual meeting. At the
meeting,the General Partner shall discuss the Partnership's Portfolio Properties and results of the
most recently concluded Fiscal Year. Meetings of the Partners may be called as provided in this
Agreement as well as by the General Partner or a Majority-In-Interest of the Limited Partners.
Any such meeting shall be held at a reasonable time and place (including a reasonable site within
the same county as the Principal Office) on not less than ten (10) nor more than sixty (60) days
notice. Reasonable accommodation shall be made for any Partner that elects to attend a meeting
via telephonic or similar means pursuant to which all Persons attending the meeting can hear one
another. No action may be taken at a meeting of the Partners without the consent of that number
or percentage of the Partners whose consent is otherwise required for such action under this
Agreement.
Section 11.2 Action Without a Meeting of All Partners. Any action of the Partners
(or a subset thereof) may be taken by written consent of that number or percentage of the
Partners whose consent is otherwise required for such action under this Agreement. Any
approval required for an amendment to this Agreement or written consent in lieu of a meeting of
the Partners may be obtained by the General Partner by means of written notice to the Limited
Partners requiring them to disapprove the proposed amendment or written consent in writing
within a reasonable specified period (which shall be no less than thirty (30) days from the date of
notice unless the General Partner, exercising its reasonable judgment, determines that a shorter
period is in the best interest of the Partnership in which case the specified period shall be no less
than ten (10) days from the date of notice) or to be deemed to have approved it. The fact that a
Partner has not received notice of an action taken by written consent, or taken at a meeting
actually held, shall not invalidate such action so long as it was taken with the consent of that
number or percentage of the Partners whose consent is otherwise required for such action under
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this Agreement; provided, however, that no consent, election, approval or other action of any or
all the Limited Partners that has the effect of limiting the power or authority of the General
Partner shall be effective until the General Partner has received notice thereof, and provided
further, however, that the General Partner shall promptly send written notice of actions taken by
written consent to all Partners. A Partner may authorize another Person to vote or otherwise act
on its behalf through a written proxy or power of attorney. In order to facilitate the determination
of whether any action of the Partners (or a subset thereof) has been taken by or with the consent
of the requisite number or percentage of the Partners under this Agreement, the General Partner
may adopt, from time to time upon not less than ten (10) days notice to the Partners, reasonable
procedures for establishing the Partners of record entitled to vote, consent or otherwise take
action on any matter; provided, however, that any date as of which Partners of record is
determined shall not precede the date of the.related action by more than sixty(60)days:
Section 11.3 Entire Agreement; Side Letters. This Agreement constitutes the entire
agreement among the Partners pertaining to the subject matter of this Agreement and supersedes
all prior agreements and understandings pertaining to that subject matter. Notwithstanding the
provisions of this Agreement, including Section 11.5, or of any subscription agreement, it is
hereby acknowledged and agreed that the General Partner on its own behalf or on behalf of the
Partnership, without the approval of any Limited Partner or any other Person, may enter into a
side letter or similar agreement to or with a Limited Partner which has the effect of establishing
rights under, or altering or supplementing the terms of, this Agreement or of any subscription
agreement. The parties hereto agree that any terms contained in a side letter or similar
agreement to or with a Limited Partner shall govern with respect to such Limited Partner
notwithstanding the provisions of this Agreement or of any subscription agreement.
Section 11.4 "Molpus Woodlands" Name and Mark. Notwithstanding any provision
of this Agreement to the contrary, the Partners acknowledge that: (a) the "Molpus Woodlands"
name and mark, together with any associated Uniform Resource Locator CURL'), are the
property of the General Partner or its Affiliates; (b) the Partnership's authority to use such name,
mark and URL may be withdrawn by the General Partner or its Affiliates at any time without
compensation to the Partnership; (c) no Partner other than the General Partner shall, by virttre of
its ownership of an interest in the Partnership, hold any right, title or interest in or to such name,
mark and URL; and (d) following the Dissolution and liquidation of the Partnership, all right,
title and interest in and to such name, mark and URL shall be held solely by the General Partner
or its Affiliates.
Section 11.5 Amendments.
(a) Except as otherwise provided in this Section 11.5 and Section 11.2, this
Agreement pray be amended, in whole or in part, only through a written amendment executed by
the General Partner and a Two-Thirds-Interest of the Limited Partners. Each Partner shall be
promptly notified of any amendment to this Agreement made pursuant to this Section 11.5.
(b) An amendment to any provision of this Agreement that calls for a higher
level of approval of the Partners or the approval of certain specified Partners shall, in addition to
the execution percentage set forth in this Section 11.5, require the same form of approval as is set
forth in such provision. Any amendments to this Section 11.5(b) shall require the approval of
71
Partners representing 100% of Capital Commitments of Partners (including Affiliates of the
General Partner) and, in the case of amendments of Section 11.5(!0 as it relates to approvals of
certain specified Partners,the approval of such specified Partners.
(c) There shall be no amendment that (x) increases a Limited Partner's
obligation to make capital contributions to the Partnership; or(y) imposes personal liability upon
a Limited Partner for any debts or obligations of the Partnership unless, in each case, the
amendment is consented to by such Limited Partner.
(d) Notwithstanding the foregoing provisions of this Section 11.5, the General
Partner may, without the consent of the other Partners, amend this Agreement in any manner
determined by the General Partner to be necessary or convenient if such amendment is necessary
to clarify this Partnership Agreement or if such amendment is not adverse or prejudicial to the
Limited Partners, including but not limited to, amendments to reflect the admission of an
Additional Limited Partner or any other information set forth on Schedules A or B, allow the
Partnership to enter into an arrangement with a Parallel Fund in accordance with Section 6.7 or
an Alternative Investment Vehicle in accordance with Section 6.9, comply with applicable law,
supply a missing terra or provision, or resolve an ambiguity in the existing terms and provisions
of this Agreement. The General Partner shall not have the authority under this Section 11.5(d) to
amend this Agreement in a manner that is materially adverse to any Limited Partner; provided,
however, that a Limited Partner's right to object to an amendment pursuant to this Section
11.50) on the grounds that such amendment is materially adverse to such Limited Partner shall
expire at the Close of Business on the thirtieth (30th) day following notice to such Limited
Partner of such amendment.
(e) If an Assignee holds an economic interest in the Partnership in respect of
which there are (but for the operation of this Section 11.5(e)) no corresponding amendment
consent rights held by any Person (e.g., in the case of an economic interest acquired by the
Assignee pursuant to a transaction or event in which amendment consent rights are extinguished,
such as upon the death or Dissolution of a Partner), then, solely with regard to an amendment to
this Agreement that would materially reduce or diminish such economic interest, the Assignee
shall have the same consent rights in respect of such amendment as would have been held by the
assignor Partner of such economic interest if the assignor Partner had continued as a Partner and
continued to hold such economic interest (but no other economic interest in the Partnership).
Except as set forth in this Section 11.5(e), an Assignee shall not, solely by virtue of its status as
such, have any right to consent or withhold consent in respect of an amendment to this
Agreement.
Section 11.6 Governing Law. The interpretation and enforceability of this Agreement
and the rights and liabilities of the Partners as such shall be governed by the laws of the State of
Delaware as such Iaws are applied in connection with partnership agreements entered into and
wholly performed upon in Delaware by residents of Delaware. To the extent permitted by the
Act and other applicable law, the provisions of this Agreement shall supersede any contrary
provisions of the Act or other applicable law.
Section 11.7 Severability. In the event any provision of this Agreement is determined
to be invalid or unenforceable, such provision shall be deemed severed from the remainder of
72
this Agreement and replaced with a valid and enforceable provision as similar in intent as
reasonably possible to the provision so severed, and shall not cause the invalidity or
unenforceability of the remainder of this Agreement.
Section 11.8 Counterparts; Binding upon Partners and Assignees. This Agreement
may be executed in any number of counterparts and, when so executed, all of such counterparts
shall constitute a single instrument binding upon all parties notwithstanding the fact that all
parties are not signatory to the original or to the same counterpart. In addition, to the maximum
extent permitted by applicable law and without limitation on any other rights of the Partners or
the Partnership, a non-Partner shall become bound as an Assignee under this Agreement if such
Person holds an interest in the Partnership and seeks to exercise, assert, confirm or enforce any
of its rights as an Assignee under this Agreement or the Act.
Section 11.9 Survival of Certain Obligations. Except as specifically provided in this
Agreement, or to the extent specifically approved by the General Partner (which approval may
be withheld by the General Partner in its sole and absolute discretion), a Limited Partner shall
continue to be subject to all of its obligations to make capital contributions or other payments
arising under this Agreement (including obligations attributable to a breach of this Agreement),
as well as its obligations to ,maintain the confidentiality of information pursuant to Section 6.13
and to provide information pursuant to Section 6.14, without regard to any Transfer of all or any
portion of such Limited Partner's interest in the Partnership or any event that terminates such
Limited Partner's status as such. Each Partner's Capital Commitment shall terminate at the time
of the final termination of the Partnership under the Act, but such termination shall not release a
Defaulting Limited Partner from,obligations arising under Section 3.4.
Section 11.10 No Third Party Beneficiaries. Except with regard to the Partnership's
obligation to Indemnified Persons as set forth in Article 10 and as otherwise specifically
provided in this Agreement, the provisions of this Agreement are not intended to be for the
benefit of or enforceable by any third party and shall not give rise to a right on the part of any
third party to (a) enforce or demand enforcement of a Partner's Capital Commitment, obligation
to return distributions, or obligation to make other payments to the Partnership as set forth in this
Agreement; or(b)demand that the Partnership or the General Partner issue any capital call.
Section 11.11 Notices, Consents, Elections, Etc. Subject to the provisions of Section
11.8, all notices, consents, agreements, elections, amendments, and approvals provided for or
permitted by this Agreement or otherwise relating to the Partnership shall be in writing and
copies thereof shall be retained with the books of the Partnership. For purposes of the following
provisions of this Section 11.11, the term "notice" shall be deemed to include any notice,
statement, report, consent or similar item required to be provided to one or more Persons under
this Agreement or applicable law.
(a) Notice to Partners. Except as otherwise specifically provided in this
Agreement, notice to a Partner shall be deemed duly given upon the earliest to occur of the
following: (i) personal delivery to such Partner, to the address set forth on Schedule A for such
Partner, or to any other address which such Partner has provided to the Partnership for purposes
of this Section 11.11(a); (ii) the Close of Business on the third (3rd) day after being deposited in
the United States mail, registered or certified, postage prepaid and addressed to such Partner at
73
the address set forth on Schedule A for such Partner, or at any other address which such Partner
has provided to the Partnership for purposes of this Section 11.11(a); (iii) the Close of Business
on the first business day after being deposited in the United States with a nationally recognized
overnight delivery service, with delivery charges prepaid, addressed as provided in the preceding
clause and marred for next business day delivery; or (iv) actual receipt by such Partner via any
other means (including public or private mail, electronic mail, facsimile, telex or telegram);
provided, however, that notice sent via electronic mail shall be deemed duly given only when
actually received and opened by the Partner to whom it is addressed.
(b) Notice to the Partnership. Except as otherwise specifically provided in
this Agreement, notice to the Partnership shall be deemed duly given when clearly identified as
such and duly given to the General Partner in accordance with the procedures set forth in Section
11.11(a).
Section 11.12 Power of Attorney.
(a) Appointment of Attorney-In-Fact. Each Limited Partner, by its execution
of a counterpart of this Agreement or a Joinder Agreement, does hereby constitute and appoint
the General Partner as its true and lawful agent and attorney-in-fact, with full power of
substitution and full power and authority in its name, place and stead, to make, execute, sign,
acknowledge, swear to, record and file (i) any amendment to this Agreement, in accordance with
the terms of this Agreement; (ii) all deeds, agreements and other documents which the General
Partner deems appropriate (A) to qualify or continue the Partnership as a limited partnership in
the State of Delaware and as required in the jurisdictions in which the Partnership may conduct
business, (B) to reflect the Partnership being governed by any amendments or successor statutes
to the Act or restatements of the Act or (C) to reorganize the Partnership in a different
jurisdiction,provided that such reorganization does not result in a material change in the rights of
the Partners under this Agreement; (iii) any amendment to this Agreement which is or may be
required by the Act; (iv) all certificates required or desirable in connection with distributions by
the Partnership to the Partners and other certificates and instruments deemed advisable by the
General Partner to carry out the provisions of this Agreement and any applicable law or to permit
the Partnership to become or to continue as a limited partnership or partnership wherein the
Limited Partners have limited liability in each jurisdiction where the Partnership may do
business; (v) all instruments that the General Partner deems appropriate to reflect a change or
modification of this Agreement or the Partnership in accordance with this Agreement, including,
without limitation, the admission of new Limited Partners or the substitution of assignees as
Partners pursuant to the provisions of this Agreement; (vi) all conveyances and other instruments
or papers deemed advisable by the General Partner including, without limitation, those to effect
the dissolution and termination of the Partnership or those necessary to effect the transfer of a
Defaulting Limited Partner's Interest under this Agreement; (vii) all fictitious or assumed name
certificates required or permitted to be filed on behalf of the Partnership; (viii) all other
instruments or papers which may be required or permitted by law to be filed on behalf of the
Partnership; and (ix) any document described in Section 23(a); provided, however, that with
respect to the General Partner's execution of documents described subparagraphs (vi) and (viii)
of this Section 11.12(x), that the execution of such documents is otherwise within the scope of
the General Partner's power and authority as set forth in this Agreement.
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(b) Power Coupled With An.Interest. The power of attorney granted pursuant
to this Section 11.12 is coupled with an interest and shall (i) survive and not be affected by the
subsequent dissolution, termination or bankruptcy of the Limited Partner granting such power of
attorney or the Transfer of all or any portion of such Limited Partner's Interest, and (ii) extend to
such Limited Partner's successors, assigns and legal representatives. The power of attorney
granted to the General Partner pursuant to this Section 11.12 shall terminate upon the bankruptcy
of the General Partner.
Section 11.13 Certain Limited Partner Representations and Covenants.
(a) Except to the extent set forth in a notice provided to the General Partner,
each Limited Partner hereby represents that allocations, distributions and other payments to such
Limited Partner by the Partnership are not subject to tax withholding under the Code. Each
Limited Partner hereby agrees to promptly notify the General Partner in the event that any
allocation, distribution or other payment previously exempt from such withholding becomes or is
anticipated to become subject thereto.
(b) Each Limited Partner hereby represents, as of the time of its admission to
the Partnership, that, to the best of its knowledge, none of the conditions listed in Section 3.5(b)
or Section 3.6(b)) apply with regard to such Limited Partner (or are expected to apply in
connection with the next capital call pursuant to Section 3.2). Each Limited Partner hereby
agrees that it will not, in bad faith, take actions that give rise to the conditions described in the
second sentence of Section 7.3(b) for the principal purpose of causing the General Partner to
require the withdrawal of such Limited Partner pursuant to Section 7.3(b).
Section 11.14 Avoidance of Publicly Traded Partnership Status.
(a) Except to the extent otherwise approved by the General Partner, each
Limited Partner hereby represents that at least one of the following statements with respect to
such Limited Partner is true and will continue to be true throughout the period during which such
Limited Partner holds an interest in the Partnership:
(i) Such Limited Partner is not a partnership, grantor trust or S
corporation for Federal income tax purposes;
(ii) With regard to each Indirect Owner of such Limited Partner, the
principal purposes for the establishment or use of such Limited Partner do not
include avoidance of the one hundred (100) partner limitation set forth in
Treasury Regulation Section 1.7704-1(h)(1)(ii); or
(iii) With regard to each Indirect Owner of such Limited Partner, not
more than seventy-five percent (75%) of the value of such Indirect Owner's
interest in such Limited Partner is attributable to such Limited Partner's interest in
the Partnership.
(b) In the event that a Limited Partner's representation pursuant to Section
11.11 a shall at any time fail to be true, such Limited Partner shall promptly (and in any event
within ten (10) days) notify the General Partner of such fact and shall promptly thereafter deliver
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to the General Partner any information regarding such Limited Partner and its Indirect Owners
reasonably requested by counsel to the Partnership for purposes of determining the number of the
Partnership's partners within the meaning of Treasury Regulation Section 1.7704-1(h).
(c) A Limited Partner that, with the approval of the General Partner, is not
required to make the full representation set forth in Section 11.14(a) shall promptly deliver to the
General Partner any information regarding such Limited Partner and its Indirect Owners
reasonably requested by counsel to the Partnership for purposes of determining the number of the
Partnership's partners within the meaning of Treasury Regulation Section 1.7704-1(h) and shall
promptly (and in any event within ten (10) days) notify the General Partner of any change in the
status of such Limited Partner or its Indirect Owners that may be relevant to such determination.
(d) Each Limited Partner hereby acknowledges that the General Partner will
rely upon such Limited Partner's representations, notices and other information as set forth in
this Section 11.14 for purposes of determining whether proposed Transfers of Partnership
interests may cause the Partnership to be treated as a "publicly traded partnership" within the
meaning of Section 7704 of the Code and that failure by a Limited Partner to satisfy its
obligations under this Section 11.14 may cause the Partnership to be treated as a corporation for
federal, State and local tax purposes.
Section 11.15 No Usury. Notwithstanding any provision of this Agreement to the
contrary, the rate of interest charged by the Partnership to any Partner in connection with an
obligation of the Partner to the Partnership shall not exceed the maximum rate permitted by
applicable law. To the extent that any interest otherwise paid or payable by a Partner to the
Partnership shall have been finally adjudicated to exceed the maximum amount permitted by
applicable law, such interest shall be retroactively deemed to have been a required repayment of
principal (and any such amount paid in excess of the outstanding principal amount shall be
promptly returned to the payor Partner).
Section 11.16 Dispute Resolution.
(a) Forin and Venue. Except as otherwise specifically provided in this
Agreement, each Partner agrees to submit all controversies arising between or among Partners or
one or more Partners and the Partnership in connection with the Partnership or its businesses or
concerning any transaction, dispute or the construction,performance or breach of this Agreement
or any other agreement relating to the Partnership, whether entered into prior to, on or
subsequent to the date of this Agreement, to arbitration in accordance with the provisions set out
in this Section 1 1.16; provided, however, that the General Partner shall not be required to submit
to arbitration any claim of breach of Section 6.13 and the General Partner may seek equitable
relief, including but not limited to preliminary injunctions, temporary restraining orders and
permanent injunctions, to prohibit violation or continuing violation of Section 11.4. EACH
PARTNER UNDERSTANDS THAT ARBITRATION IS FINAL AND BINDING ON THE
PARTNERS AND THAT THE PARTNERS IN EXECUTING THIS AGREEMENT ARE
WAIVING THEIR RIGHTS TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT
TO JURY TRIAL. Controversies will be finally settled by, and only by, arbitration in accordance
with the commercial arbitration rules of the American Arbitration Association (the "AAA") to
the fullest extent permitted by law. The arbitrators will be governed by and will apply the
76
substantive (but not procedural) law of Delaware, to the exclusion of the principles of the
conflicts of law of Delaware. The arbitration will be conducted pursuant to the Fcderal
Arbitration Act in accordance with this Section 11.16 and the commercial arbitration rules of the
AAA. If those rules are silent with respect to a particular matter, the procedure will be as agreed
by the Partners, or in the absence of agreement among or between the Partners, as established by
the arbitrators. The place of arbitration will be New York, New York. Any arbitration under this
Section 11.16 will be conducted before a panel of three arbitrators; provided, however, that any
claims for which the aggregate amount in controversy does not exceed $100,000 will be
conducted before a single arbitrator. The AAA will appoint the three arbitrators or a single
arbitrator, in the case of claims for an aggregate amount not in excess of$100,000, in accordance
with the commercial arbitration rules of the AAA. Any award rendered by the arbitrators will be
final and binding on the Partners, and judgment upon the award may be entered in the U.S.
District Court for the Southern District of Mississippi.
(b) Fees and Costs In any arbitration, mediation, court action, or other
adjudicative proceeding arising out of or relating to this Agreement, the arbitrator(s),
mediator(s), judge(s) or similar adjudicative official(s) shall have the express authority to
allocate reasonable attorneys, accountants and experts fees and related expenses (including
reasonable charges for in-house legal counsel and related personnel) and for the costs of such
proceeding among the parties to such proceeding as a part of their award or judgment issued in
connection with such proceeding. Such "party" costs and "procedural" costs shall be aggregated
together and allocated collectively as "costs," and the arbitrator(s), mediator(s), judge(s) or
similar adjudicative official(s) shall take into account in the allocation of costs of the proceeding
the relative merits of each party's claims and counterclaims, if any, within the context of the
dispute as a whole and the conduct of the parties during the course,of the proceeding and shall
allocate the costs of the proceeding to fairly reflect the relative merits and conduct of the parties
in light of the case and its outcome as a whole. Notwithstanding the foregoing, the reasonable
costs of appraisals pursuant to the Appraisal Procedure shall be borne by the Partnership unless
the requirement that an appraisal be conducted pursuant to the Appraisal Procedure is determined
to have resulted from one or more parties' bad faith, in which case the cost of such appraisal
shall be borne entirely by such party or parties.
(c) Submission to Jurisdiction; Waiver of Jury Trial. In the event that any
court of law or other judicial or regulatory authority finds or holds that the arbitration provisions
in Section 11.16(a) and Section 11.16(b) are unenforceable or inapplicable to a matter in
question, each Limited Partner irrevocably consents and agrees that any legal action or
proceeding with respect to this Agreement and any action for enforcement of any judgment in
respect thereof shall be brought in the courts of the State of Mississippi located in Jackson,
Mississippi or the United States federal courts for the Southern District of Mississippi, and, by
execution and delivery of this Agreement, each Limited Partner hereby submits to and accepts
for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction
of the aforesaid courts and appellate courts from any appeal thereof. Each Limited Partner
further irrevocably consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof in the manner set forth in Section
11.11 hereof. Each Limited Partner hereby irrevocably waives any objection which it may now
or hereafter- have to the laying of venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Agreement brought in the courts referred to above and hereby
77
further irrevocably waives and agrees not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an inconvenient forum. Nothing
herein shall affect the right of the General Partner or the Partnership to serve process in any other
manner permitted by law or to commence legal actions or proceedings or otherwise proceed
against any other Partner hereunder in any other jurisdiction. Nothing in this Section 11.16(c)
shall be deemed to constitute a submission to jurisdiction, consent or waiver with respect to any
matter not specifically referred to herein. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT OF
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING
HEREUNDER.
Section 11.17 Remedies for Breach of this Agreement.
(a) General. Except as otherwise specifically provided in this Agreement, the
remedies set forth in this Agreement are cumulative and shall not exclude any other remedies to
which a Person may be lawfully entitled.
(b) Specific Performance Without limiting the rights and remedies otherwise
available to the Partnership or any Partner, each Partner hereby: (i) acknowledges that the
remedy at law for damages resulting from its default under Article 3, Section 6.13, Section 6.14
or Section 11.16 is inadequate; and (ii) consents to the institution of an action for specific
performance of its obligations in the event of such a default.
(c) Penalty Provisions. Each Partner hereby acknowledges that certain
provisions of this Agreement (including Section 3.4) provide for specified penalties in the event
of a breach of this Agreement by a Partner. Each Partner hereby agrees that the penalty
provisions of this Agreement are fair and reasonable and, in light of the difficulty of determining
actual damages, represent a prior agreement among the Partners as to appropriate liquidated
damages.
Section 11.15 Exercise of Discretion by the General Partner. In determining what
action, if any, shall be taken against a Limited Partner in connection with such Limited Partner's
breach of this Agreement, the General Partner shall seek to obtain the best result (as determined
by the General Partner in its sole and absolute discretion) for the Partnership and the other
Partners. Each Limited Partner hereby specifically agrees that, in the event such Limited Partner
violates the terms of this Agreement, such Limited Partner shall not be entitled to claim that the
Partnership or any of the other Partners are precluded, on the basis of any fiduciary or other duty
arising in respect of such Limited Partner's status as such, from seeking any of the penalties or
other remedies permitted under this Agreement or applicable law.
Section 11.19 Timing. All dates and times specified in this Agreement are of the
essence and shall be strictly enforced. Except as otherwise specifically provided in this
Agreement, all actions that occur after the Close of Business on a given day shall be deemed for
purposes of this Agreement to have occurred at 9:00 a.m. on the following day. In the event that
the last day for the exercise of any right or the discharge of any duty under this Agreement would
78
otherwise be a day that is not a business day, the period for exercising such right or discharging
such duty shall be extended until the Close of Business on the next succeeding business day.
Section 11.20 Miscellaneous. No failure or delay by any party in exercising any right,
power or privilege under this Agreement shall operate as a waiver thereof; any actual waiver
shall be contained in a writing signed by the party against whom enforcement of such waiver is
sought. This Agreement shall not be construed for or against any party by reason of the
authorship or alleged authorship of any provisions hereof or by reason of the status of the
respective parties. Each Partner hereby specifically consents to the selection of all other Partners
admitted to the Partnership pursuant to the terms of this Agreement. Except as otherwise
permitted by this Agreement, no Partner shall have the right, and each Partner does hereby agree
that it shall not seek, to cause a partition of the Partnership's property whether by court action or
otherwise.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
GENERAL PARTNER: LIMITED PARTNERS:
MOLPUS WOODLANDS FUND THE LIMITED PARTNERS LISTED
IV -GP, LLC ON SCHEDULE A HERETO
a Delaware limited liability company
By: )5�,f4 By: MOLPUS WOODLANDS FUND
Name; IV-GP, LLC
Title: Authorized Manager a Delaware limited liability company
Title: Attorney-in-Fact
By:
Name:
Title: Authorized anager
WITHDRAWING LIMITED PARTNER:
MOLPUS WOODLANDS FUND IV -ORIGINAL LP, LLC
By: THE MOLPUS COMPANY
a Mississippi corporation
Title: Member
By:
Name: Ave
Title:Authorized Manager
80
SCHEDULE A
PARTNER INFORMATION
Name and Contact Information. Capital Contribution (% Capital
Interest) Commitment
GENERAL PARTNER:
Molpus Woodlands Fund- IV-GP, LLC ($2,000,000 in the
a Delaware limited liability company aggregate for the
Address: 654 N. State Street Partnership and any
Jackson,Mississippi 39202 Parallel Fund), which
Attn: Michael R. Cooper may be satisfied by
Telephone: (601)948-8733 Affiliates as Limited
Facsimile: (601) 352-7463 Partners
Name and Contact Information Capital Contribution (% Capital
Interest) Commitment
LIMITED PARTNERS:
Molpus Woodlands Fund- IV -GP, LLC 0.955% $1,000,000
a Delaware limited liability company
Address: 654 N. State Street.
Jackson,Mississippi 39202
Attn: Micbael R. Cooper
Telephone: (601) 948--8733
Facsimile: (601) 352-7463
Northeast Utilities Service Company 4.776% $5,000,000
Retirees Benefit Trust
Address: 56 Prospect Street
Hartford, CT 06103
Attn: Robert DeAngelo
Telephone: (860) 728-4645
Facsimile: (860) 728-4585
Northeast Utilities Service Company 9.551% $10,000,000
Retirement Master Trust
Address: 56 Prospect Street
Hartford, CT 06103
81
Name and Contact Information Capital Contribution (% Capital
Interest) Commitment
Attn: Robert DeAngelo
Telephone: (860) 7284645
Facsimile: (860) 728-4585
The Joint Investment Committee as 26.743% $28,000,000
Trustees of the Wichita Retirement
Address: City of Wichita
Pension Management
City Hall— 12' Floor,
455 N. Main Street
Wichita, Kansas 67202
Attn: Barbara J. Davis, Pension Manager
Telephone: (316) 268-4544
Facsimile: (316)268-4656
Citrine Capital LLC, Series 2008-A 2.865% $3,000,000
Address: 212 East 22'd Street
Cheyenne, WY 82001
Attn: Svetlana M. Loshakov
Telephone: (440) 995-5200
Facsimile: (440) 995-1530
Montana Board of Investments 23.878% $25,000,000
Address: P.O. Box 200126
Helena, Montana 59620-0126
Attn: Ethan Hurley
Telephone: (406) 444-0250
Facsimile: (406) 449-6579
Pension Fund of the Christian Church 23.878% $25,000,000
(Disciples of Chirst), Inc.
Address: 130 East Washington Street
Indianapolis, IN 46204
Attn: David Stone
Telephone: (317)713-2610
Facsimile: (317) 634--4071
City of Alexandria- Fire & Police 1.433% $1,500,000
Officers Pension Plan
82
Name and Contact Information Capital Contribution (% CapitaI
Interest) Commitment
Address: 301 King Street, Roam 1400
Alexandria, VA 22314
Attn: Steven Bland
Telephone: (703) 746-3886
Facsimile: (703) 746-3943
City of Alexandria- Post Employment 0.955% $1,000,000
Benefit Trust
Address: 301 King Street, Room 1400
Alexandria,VA 22314
Attn: Steven Bland
Telephone: (703) 746-3886
Facsimile: (703) 7463943
City of Alexandria- Supplemental 1.146% $1,200,000
Retirement Plan
Address: 301 King Street, Room 1400
Alexandria, VA 22314
Attn: Steven Bland
Telephone: (703) 746-3886
Facsimile: (703) 746-3943
RDM of Wyoming, LLC Series 2006-A 3.820% $4,000,000
Address: 212 East 22nd Street
Cheyenne, WY 82001
Attn: Douglas S. Lantsberg
Telephone: (440) 995.5200
Facsimile: (440) 995-1530
83
SCHEDULE B
ASSIGNEE INFORMATION
Name and'Contact Information Capital Contribution Ca itai Commitment
[insert name]
[insert address]
Attn:
Telephone:
Facsimile:
Assignee interest received from:
[insert name of assignor]
84
EXIiIBIT B
Section 2(a)(51)(C) of the Investment Company Act:
(C) The terns "qualified purchaser" does not include a company that, but for the exceptions provided
for in paragraph (1) or (7) of Section 3(c), would be an investment company (hereafter in this paragraph
referred to as an "excepted investment company"), unless all beneficial owners of its outstanding
securities (other than short-term paper), determined in accordance with Section 3(c)(1)(A), that acquired
such securities on or before April 30, 1996 (hereafter in this paragraph referred to as "pre-amendment
beneficial owners"), and all pre-amendment beneficial owners of the outstanding securities (other than
short-term paper) or any excepted investment company that, directly or indirectly, owns any outstanding
securities of such excepted investment company, have consented to its treatment as a qualified purchaser.
Unanimous consent of all trustees, directors, or general partners of a company or trust referred to in
clause(ii) or(iii) of subparagraph (A) shall constitute consent for purposes of this subparagraph.
1/24576572
Rule 2a51-2. Definitions of Beneficial Owner For Certain Purposes Under Sections 2(x)(51) and
3(c)(7) and Determining Indirect Ownership Interests.
(a) Beneficial Ownership: General. Except as set forth in this section, for purposes of Sections
2(a)(51)(C) and 3(c)(7)(B)(ii) of the Act, the beneficial owners of securities of an excepted investment
company (as defined in Section 2(a)(51)(C) of the Act) shall be determined in accordance with Section
3(c)(1) of the. Act.
(b) Beneficial Ownership: Grandfather Provision. For purposes of Section 3(c)(7)(B)(ii) of the Act,
securities of an issuer beneficially owned by a company (without giving effect to Section 3(c)(1)(A) of
the Act("owning company") shall be deemed to be beneficially owned by one person unless:
(1) The owning company is an investment company or an excepted investment company;
(2) The owning company, directly or indirectly, controls, is controlled by or is under common control
with the issuer; and
(3) On October 11, 1996, under Section 3(c)(1)(A)of the Act as then in effect,the voting securities
of the issuer were deemed to be beneficially owned by the holders of the owning company's outstanding
securities(other than short-term paper), in which case, such holders shall be deemed to be beneficial
owners of the issuer's outstanding voting securities.
(c)Beneficial Ownership: Consent Provision. For purposes of Section 2(a)(51)(C) of the Act, securities
of an excepted investment company beneficially owned by a company (without giving effect to Section
3(c)(1)(A) of the Act ("owning company") shall be deemed to be beneficially owned by one person
unless:
(1) The owning company is an excepted investment company;
(2) The owning company directly or indirectly controls, is controlled by, or is under common control
with, the excepted investment company or the company with respect to which the excepted investment
company is, or will be, a qualified purchaser; and
(3) On April 30, 1996, under Section 3(c)(1)(A)of the Act as then in effect, the voting securities of
the excepted investment company were deemed to be beneficially owned by the holders of the owning
company's outstanding securities (other than short-term paper), in which case the holders of such
excepted company's securities shall be deemed to be beneficial owners of the excepted investment
company's outstanding voting securities.
(d) Indirect Ownership: Consent Provision. For purposes of Section 2(a)(51)(C) of the Act, an
excepted investment company shall not be deemed to indirectly own the securities of an excepted
investment company seeking a consent to be treated as a qualified purchaser ("qualified purchaser
company") unless such excepted investment company, directly or indirectly, controls, is controlled by or
is under common control with, the qualified purchaser company or a company with respect to which the
qualified purchaser company is or will be a qualified purchaser.
(e) Required Consent: Consent Provision. For purposes of Section 2(a)(51)(C) of the Act, the consent
of the beneficial owners of an excepted investment company ("owning company") that beneficially owns
securities of an excepted investment company that is seeking the consents required by Section 2(a)(51)(C)
("consent company") shall not be required unless the owning company directly or indirectly controls, is
112457657.2
controlled by, or is under common control with, the consent company or the company with respect to
which the consent company is, or will be, a qualified purchaser.
Notes to Rule 2a51-2.
1. On both April 30, 1996 and October 11, 1996, Section 3(c)(1)(A) of the Act as then in effect
provided that: (A) Beneficial ownership, by a company shall be deemed to be beneficial ownership by
one person, except that, if the company owns 10 per centum or more of the outstanding voting
securities of the issuer, the beneficial ownership shall be deemed to be that of the holders of such
company's outstanding securities (other than short-term paper) unless, as of the date of the most recent
acquisition by such company of .securities of that issuer, the value of all securities owned by such
company of all issuers which. are or would, but for the exception set forth in this subparagraph, be
excluded from the definition, of investment company solely by this paragraph, does not exceed 10 per
centum of the value of the company's total assets. Such issuer nonetheless is deemed to be an
investment company for purposes of Section 12(d)(1).
2. Issuers seeking the consent required by Section 2(a)(51)(C) of the Act should note that Section
2(a)(51)(C) requires an issuer to obtain the consent of the beneficial owners of its securities and the
beneficial owners of securities of any "excepted investment company" that directly or indirectly owns
the securities of the issuer. Except as set forth in paragraphs (d) (with respect to indirect owners) and
(e) (with respect to direct owners) of this section, nothing in this section is designed to limit this
consent requirement.
112457657.2
EXHIBIT C
Joinder Agreement
1/24576572
JOINDER AGREEMENT
Referencing the Amended and Restated Limited Partnership Agreement of Molpus
Woodlands Fund IV, L.P., to be dated as of the Initial Closing Date, (the "Partnership
Agreement") to which the undersigned agrees to become a party and hereby agrees to be bound
as a Limited.Partner pursuant to the terms thereunder and hereby appoints the General Partner to
be its attorney-in-fact pursuant to the terms thereof.
Executed as an agreement and forming one instrument with the counterpart hereof signed
by the General Partner.
Limited Partner:
BOARD OF TRUSTEES OF T14E EMPLOYEE'S
PENSION PLAN OF THE CITY OF CLEARWATER,
FLORIDA
By:
George N. Cretekos Date
Chairperson
A as or xl; Attest: ATj�
C) iv
A, man Rosemarie Call
Pension A me City Clerk ,h
't
Fs�p�llSHEa�q
General Partner:
Molpus Woodlands Fund IV, L.P.
By: Molpus Woodlands Fund IV-GP, LLC
Its: General Partner
By: The Molpus Woodlands Group, LLC
Its: Manager
112456145.1
By:
Name: DG, LMl el. _
Its: 6ce Ve- Vilk
Effective as of: OLkIME �2 , 2014
AI)DENDUM TO
JOINDER AGREEMENT
Referencing the Joinder Agreement executed and delivered by the undersigned pursuant
to which the undersigned has agreed to become a party to, and to be bound as a Limited Partner
pursuant to the terms under, the Amended and Restated Limited Partnership Agreement of
Molpus Woodlands Fund 1V, L.P., to be dated as of the Initial Closing Date, (the "Partnership
Agreement"), and pursuant to which Joinder Agreement the undersigned has appointed the
General Partner to be its attorney-in-fact pursuant to the terms of the Partnership Agreement:
The undersigned hereby acknowledges receipt of the proposed First Amendment to the
Amended and Restated Limited Partnership Agreement of Molpus Woodlands Fund 1V, LY. (the
"Amendment"}, and acknowledges and agrees that, upon the adoption of the A.mernd=nt by the
General Partner and the requisite Limited Partners under the Partnership Agreement, the Joinder
Agreement executed and delivered by the undersigned, as supplemented by this Addendum,
constitutes an agreement to become a party to, and to be bound as a Limited Partner pursuant to
the terms render,the Partnership Agreement as amended by the Amendment and an appointment
of the General Partner as attorney-in-fact for the undersigned pursuant to the terms of the
Partnership Agreement as amended by the Amendment.
Executed as an agreement and forming one instrument with the counterpart hereof signed
by the General Partner.
Limited Partner;
City of Clearwater
Type or Print in Name of Limited Partner
Signature o er or uthorized Signatory
Brian "Jay's Ravins, Finance Director
Type or Print in Name and Title of Authorized Signatory
Date of Signature: 10/14/14
112672676.3
General Partner.,
Molpus Woodlands Fund IV-GP, LLC
By: The Molpus Woodlands Group, LLC
Its: Manager
�IV -7
By:
Name:
Its: c Iz
Date of Signature: Dd`Dloer aoo 2c
112672676.3
FIRST AMENDMENT
TO THE AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF MOLPUS WOODLANDS FUND IV, L.P.
This First Amendment (this "Amendment") is trade and executed as of the 21st day of
October, 2014 by and among Molpus Woodlands Fund IV-GP, LLC, a Delaware limited liability
company (the "General Partner"), and the limited partners (the "Limited Partners") listed on
Exhibit A attached hereto, in order to amend that certain Amended and Restated Limited
Partnership Agreement of Molpus Woodlands Fund IV, L.P., a Delaware limited partnership (the
"Partnership"), dated as of October 22, 2013, as heretofore amended (the "Partnership
Agreement"). This Amendment is effective as of the date first set forth above. All terms not
expressly defined herein shall have the meaning given them in the Partnership Agreement.
RECITALS
WHEREAS, the Partners believe it is in the best interest of the Partnership to amend the
Partnership Agreement as set forth in this Amendment;
WHEREAS, in accordance with Section 11.5(a) of the Partnership Agreement, the
General Partner has proposed, and a Two-Thirds-Interest of the Limited Partners have approved,
the amendments to the Partnership Agreement as set forth herein; and
WHEREAS, in accordance with the power of attorney granted to the General Partner by
all of the Limited Partners in Section 11.12 of the Partnership Agreement, the General Partner
has executed this Amendment as attorney-in-fact for all of the Limited Partners listed on Exhibit
A attached hereto.
NOW THEREFORE, in consideration of the mutual premises and undertakings herein
contained and of other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby agree as follows:
1. Amendment to Sections 3.4(a) and (d)-- Failure to Make Capital Contributions.
Sections 3.4(a) and (d) of the Partnership Agreement are hereby amended by deleting Sections
3.4(a) and (d) in their entirety and inserting in their place the following:
"(a) If a Limited Partner fails to make all or any portion of a capital
contribution when due, then it shall:
(i) Be deemed a"Defaulting Limited Partner" (but only after first
providing such Limited Partner with notice and three (3)
business days to cure the same); and
(ii) Promptly pay to the Partnership interest on the due and
uncontributed amount at an annual rate equal to the lesser of
1/2642072.4
(A) eighteen percent (1$%), compounded daily and (B) the
highest rate allowed by applicable law (which interest under
(A) and (B) shall be treated as income of the Partnership and
not as a capital contribution by the Defaulting Limited Partner).
(d) The General Partner shall provide written notification to a Limited
Partner within three (3) days of an event of default. If such Limited
Partner pays the fall amount of such capital contribution within three
(3) business days of such default notice, then such Limited Partner
shall not be deemed a Defaulting Limited Partner."
2. Amendment to Section 63(b) - Parallel Fund. Section 6.7(b) of the Partnership
Agreement is hereby amended by adding the following language to the end of the last sentence:
"with the consent of the Advisory Board (such consent not to be unreasonably withheld)
pursuant to the provisions set forth in Section 6.19(b) of the Partnership Agreement."
3. Amendments to Section 7.3 —Withdrawal/Removal of a Limited Partner. Section
7.3 of the Partnership Agreement is hereby amended by deleting Section 7.3 in its entirety and
inserting in its place the following:
"Section 7.3 Withdrawal/Removal of a Limited Partner.
(a) Except as provided in Section 3.6(b), a Limited Partner shall not
withdraw from the Partnership or otherwise cease to be a Limited
Partner without the consent of the General Partner, which consent may
be withheld in the General Partner's sole and absolute discretion.
(b) A Limited Partner may be required to withdraw from the Partnership
as provided in Section 3.4(c). The General Partner may also require
the complete or partial withdrawal of a Limited Partner (which, for the
avoidance of doubt and without limitation, could include a reduction
of such Limited Partner's Capital Commitment) if the General Partner
determines, in its reasonable discretion, that continued undiminished
membership of the Limited Partner in the Partnership would (i)
constitute or give rise to a violation of applicable law; or (ii) otherwise
subject the Partnership or the General Partner to material onerous
legal, tax or other regulatory requirements that cannot reasonably be
avoided without material adverse consequences to any other Partner or
the Partnership.
(c) In the event the General Partner consents to the withdrawal of a
Limited Partner other than pursuant to the provisions of Section 3.6(b),
Section 3.4(c) or Section 7.3{b), the General Partner shall use
commercially reasonable efforts to seek a transferee for the
withdrawing Limited Partner's Partnership interest prior to causing the
Partnership to redeem such Partnership interest using assets of the
Partnership.
112642072.4 2
(d) A Limited Partner shall be deemed to have withdrawn from the
Partnership with the consent of the General Partner upon such Limited
Partner's death or Permanent Incapacity. Except as otherwise
determined by the General Partner, in its sole and absolute discretion,
a Limited Partner shall be deemed to have withdrawn without the
consent of the General Partner upon such Limited Partner's
Bankruptcy, Dissolution or Termination.
(e) Except as otherwise provided in this Section 7.3, a Limited Partner
shall not be removed from the Partnership without its consent.
(f) Notwithstanding any provision to the contrary, no Partner may redeem
its Partnership interest within 2 years of acquiring its interest if such
redemption would result in any of the consequences referenced in
Section 7.1(c)."
4. Amendments to Section 8.4(12) - Formation of Liquidating Trust.rust. Section 8.4(b)
of the Partnership Agreement is hereby amended by deleting Section 8.4(b) in its entirety and
inserting in its place the following:
"(b) In lieu of receipt of the Management Fee, the trustee of the
Liquidating Trust shall receive an annual fee equal to one percent
(1%) of the lesser of(i) the cost basis of the Liquidating Trust assets
(determined in accordance with GAAP and payable by the
Liquidating Trust as of the first day of each annual period, but
increased on a daily pro-rated basis, payable on the first day of next
commencing fiscal quarter, for each period in which the cost basis of
the Liquidating Trust assets is increased) or (ii) the Fair Market
Value of the Liquidating Trust assets (determined in accordance
with Section 6.12 and payable by the Liquidating Trust as of the
first day of each annual period) and shall be reimbursed for all
reasonable out-of-pocket expenses incurred on behalf of or for the
benefit of the Liquidating Trust. At the election of the Liquidating
Partner, Partnership cash or other property may be placed in the
Liquidating Trust solely for the purpose of enabling the Liquidating
Trust to pay the fees and expenses described in the preceding
sentence.
5. Full Force and Effect. Except as expressly amended hereby, all other terms of the
Partnership Agreement shall continue in full force and effect.
6. Captions. The titles and captions contained in this Amendment are inserted only
as a matter of convenience and for reference and in no way define, limit, extend or describe the
scope or intent of this Amendment.
7. Governing Law. The laws of the State of Delaware shall govern the validity of
this Amendment, the construction of its terms and the interpretation of the rights and duties of
the parties hereto.
1/2642072.4 3
IN WITNESS WHEREOF,this Amendment has been executed as of the date first above
written.
GENERAL PARTNER:
MOLPUS WOODLANDS FUND IV-GP, LLC
By:
Name: d2 b
Its: (L
LIMITED PARTNERS,as listed on the attached Exhibit A
By: Molpus Woodlands Fund IV-GP, LLC, as attorney-
in-fact for all of the Limited Partners
By:
Name: b Lull,
Its: V a Flu l
112642072.4 4
EXHIBIT A
Limited Partners:
The Joint Investment Committee as Trustees of the Wichita Retirement
Citrine Capital LLC, Series 2008-A
Pension Fund of the Christian Church(Disciples of Chirst), Inc.
City of Alexandria- Fire & Police Officers Pension Plan
City of Alexandria- Post Employment Benefit Trust
City of Alexandria- Supplemental Retirement Plan
RDM of Wyoming, LLC Series 2006-A
City of Aurora General Employees' Retirement Playa.
Tulsa Municipal Employees Retirement Plan.(MERP)
Thomas D. Worley
The Bhagat Family Revocable Trust
Minder Cheng
CHJ Capital Real Assets LLC
FinStream LLC
Miramar Firefighters' Retirement Plan
City Pension Fund for Fire and Police
Trinity Real Estate Partners, LLC
UPMC Basic Retirement Plan Master Trust
Ralph Landau Foundation
112642072,4 5
SCHEDULE A
PARTNER INFORMATION
Name and Contact Information Capital Contribution (% Capital
Interest) Commitment
GENERAL PARTNER:
Molpus Woodlands Fund- N-GP, LLC ($2,000,000 in the
a Delaware limited liability company aggregate for the
Address: 654 N. State Street Partnership and any
Jackson, Mississippi 39202 Parallel Fund), which
Attn: Michael R. Cooper may be satisfied by
Telephone: (601) 948-8733 Affiliates as Limited
Facsimile: (601) 352-7463 Partners
Name and Contact Information Capital Contribution Capital
(% Interest) Commitment
LIMITED PARTNERS:
Molpus Woodlands Fund- IV -GP, LLC 0.302% $1,228,000
a Delaware limited liability company
Address: 654 N. State Street
Jackson, Mississippi 39202
Attn: Michael R. Cooper
Telephone: (601) 948-8733
Facsimile: (601) 352-7463
Northeast Utilities Service Company Retirees 1.229% $51000,000
Benefit Trust
Address: 56 Prospect Street
Hartford, CT 06103
Attn: Robert DeAngelo
Telephone: (860) 728-4645
Facsimile: (860) 728-4585
Northeast Utilities Service Company 2.459% $10,000,000
Retirement Master Trust
Address: 56 Prospect Street
Hartford, CT 06103
Attn: Robert DeAngelo
Telephone: (860) 728-4645
Facsimile: (860) 728-4585
81
112453900.30
Name and Contact Information Capital Contribution Capital
(% Interest) Commitment
The Joint Investment Committee as Trustees 8.606% $35,000,000
of the Wichita Retirement
Address: City of Wichita
Pension Management
City Hall— 12' Floor,
455 N. Main Street
Wichita, Kansas 67202
Attn: Barbara J. Davis, Pension Manager
Telephone: (316) 268-4544
Facsimile: (316) 268-4656
Citrine Capital LLC, Series 2008-A 0.983% $4,000,000
Address: 212 East 22n' Street
Cheyenne, WY 82001
Attn: Svetlana M. Loshakov
Telephone: (440) 995-5200
Facsimile: (440) 995-1530
Pension Fund of the Christian Church 6.147% $25,000,000
(Disciples of Chirst), Inc.
Address: 130 East Washington Street
Indianapolis, IN 46204
'Attn: David Stone
Telephone: (317) 713-2610
Facsimile: (317) 634-4071
City of Alexandria- Fire&Police Officers 0.369% $1,500,000
Pension Plan
Address: 301 King Street, Room 1400
Alexandria, VA 22314
Attn: Steven Bland
Telephone: (703) 746-3886
Facsimile: (703) 746-3943
City of Alexandria.- Post Employment Benefit 0.246% $1,000,000
Trust
Address: 301 King Street, Room 1400
Alexandria, VA 22314
Attn: Steven Bland
Telephone: (703) 746-3886
Facsimile: (703) 746-3943
82
1/2453900.10
Name and Contact Information Capital Contribution Capital
(% Interest) Commitment
r
City of Alexandria- Supplemental Retirement 0.295% $1,200,000
Plan
Address: 301 King Street, Room 1400
Alexandria, VA 22314
Attn: Steven Bland
Telephone: (703) 746-3886
Facsimile: (703) 746-3943
RDM of Wyoming, LLC Series 2006-A 1.229% $5,000,000
Address: 212 East 22nd Street
Cheyenne, WY 82001
Attn: Douglas S. Lantsberg
Telephone: (440) 995-5200
Facsimile: (440) 995-1530
City of Aurora General Employees' 3.688% $15,000,000
Retirement Plan
12100 E. Iliff Avenue
Suite 108
Aurora, CO 80014
Attn: Thomas Connell
Telephone: (303) 368-9160
Email: tconnell-gerp @gwestoffice.net
Tulsa Municipal Employees 2.213% $9,000,000
Retirement Plan (MERP)
175 East 2nd Street, Suite 565
Tulsa, OK 74103
Attn: Linda Sadler
Telephone: (918) 596-7469
Email: Isadler @cityoftulsa_org
Thomas D. Worley 0.615% $2,500,000
P.D. Box 5427
Longview,TX 75608
Telephone: (903) 297-5101
Email: tworley@danmarkenergy.co m
The Bhagat Family Revocable Trust 0.123% $50000
925 Culebra Road
Hillsborough, CA 94010
Attn: Rohit Bhagat
Telephone: (650) 627-6147
Email: rohitbha ail.com
83
1/2453900-10
Name and Contact Information Capital Contribution Capital
(% Interest) Commitment
Minder Cheng 0.123% $500,000
590 Euclid Ave.
Berkeley, CA 94708
Telephone: (415) 625-7104
Email: mindcr.chcng@gmaii.com
CHJ Capital Real Assets LLC 0.246% $1,000,000
2245 Skyfarm Drive
Hillsborough, CA 94010
Attn: Blake Grossman
Telephone: (415) 625-7102
Email: blake. •ossman ch'ca ital.com
FinStream LLC 0.123% $500,000
333 Uplands Drive
Hillsborough, CA 94010
Attn: Ross Hikida
Telephone: (650) 918-4338
Email: Ross.Hikida thirdstreamca ital.coin
Miramar Firefighters' Retirement Plan 0.369% $1,500,000
c/o Resource Centers
4360 Northlake Blvd., Suite 206
Palen Beach Gardens, FL 33410
Attn: Denise McNeill
Telephone (561) 624-3277
Email: denisearesoureecenters.com
City Pension Fund for Fire and Police 2.213% $9,000,000
1951 NW 150 Ave, Suite 104
Pembroke Pines, FL 33028
Attn: James F. Fisher
Telephone: (954) 431-3124
Email: jim@, nespensiononline.com
Trinity Real Estate Partners, LLC 1.598% $6,500,000
1675 Lakeland Drive, Suite 400
Jackson, MS 39216
Attn: Jeff Wilson
Telephone: (601) 956-3511
Email: 'swilson trinit ca .zaet
84
112453900.10
Name and Contact Information Capital Contribution Capital
(% Interest) Commitment
UPMC Basic Retirement Plan Master Trust 2.459% $10,000,000
US Steel Tower, 58th Floor
600 Grant Street
Pittsburgh, PA 15219
Attn: Matthew Cunningham
Telephone: (412) 802-6885
Email: Cumiinghal-nme@upme.com
Altemativesa)UPMC.com
Ralph Landau Foundation 0.738% $3,000,000
c/o Listowel Inc.
2 Park Avenue, Suite 1525
New York, NY 10016
Attn: Lewis Gaserek
Telephone: (212) 683-9499
Email: listowel(alerols.corn
Board of Fire and Police Pension 6.147% $25,00000
Commissioners of the City of Los Angeles
360 E. Second Street,Suite 400
Los Angeles, CA 90012
Attn: Tom Lopez, Chief investment Officer
Telephone: (213) 978-4464
Email: coinmodities@Llafpp.com
Iafpp.co_m
Tom.lopez@lafpp.com
American International Group, Inc. 9.834% $40,000,000
Retirement Plan Master Trust
c/o Deanne Nezas
399 Park Avenue, Floor 4
New York, NY 10022
Telephone: (646) 857-8160
Email: deanne.nezas(ct),pinebridizc.co_m
City of Clearwater 1.229% $5,000,000
100 South Myrtle Avenue
Clearwater, FL 33756-5520
Attn: Steve Moskun
Telephone: (727) 562-4532
Email: steye.moskun(a,myclearwater.com
85
1/2453400.14
Name and Contact Information Capital Contribution Capital
(% Interest) Commitment
City of Tallahassee 7.376% $30,000,000
300 South Adams Street, Box A--32
Tallahassee, FL 32301
Attn: Kent Olson
Telephone: (850) 891-8082
Email: Kent.Olson tal ov.com
The Ministers &Missionaries Benefit Board 0.590% $2,400,000
475 Riverside Drive, Suite 1700
New York, NY 10115
Attn: Candace Cox
Telephone: (212) 8708017
Email: candace.coxagnlnbb.org
NEIPF, LP 6.147% $25,000,000
19 Campus Boulevard, Suite 200
Newtown Square, PA 19073
Attn: Christine Coary, Controller
Telephone: (610) 325-9100, ext. 2311
Email: ecoary@neibenefits.org and
NEIPF.Alts(@segalrc.com
Principal Life Insurance Company 8.606% $35,000,000
c/o Principal Global Investors, LLC
711 High Street
Des Moines, IA'50392
Attn: Matt Trosper
Telephone: (515) 235.1372
Email: Trosper.Matt a,principal.com
City of Newport News Employees' 1.475% $6,000,000
Retirement Fund(NNERF)
2400 Washington Avenue, Finance Dept., 7tn
Floor
Newport News, VA 23 607
Attn: Tonya O'Connell
Telephone: (757) 926-8323
Email: toconncll@migQv.com
86
112453900.10
Name and Contact Information Capital Contribution Capital
(% Interest) Commitment
Haverhill Retirement System 1,229% $5,000,000
4 Summer Street, Room 303
Haverhill, MA 01830
Attn: Kathleen Gallant
Telephone: (978) 374-2358
Email: k_gallant(cr,haverhillretirement-ma.org
Slivon Trust 0.098% $400,000
P.O. Box 469
Ross, CA 94957
Attn: Paul SIivon
Telephone: (415) 308-1372
Email: famoffl@,hotmail.com
SMG GST Trust 0.123% $500,000
3704 196 ' Ave. Ct. E
Lake Tapps, WA 98391
Attn: Steve Gordon, Trustee
Telephone: (253)891-4305
Email: sgordon@gQrdontrucking.com
Scott D. Kiewit &Carole S. Kiewit 1.229% $5,000,000
33 Kimberly Drive
Laurel, MS 39440
Telephone: (601) 319-2856
Email: kiewitforestry@bellsouth.net
Robert J. Rice Family Trust dated 12126/1985, 0.061% $250,000
as amended and restated
1963 Waters Edge Drive
Westlake, OH 44145
Attn: Robert J. Ripe, Trustee
Telephone: (440) 835-2386
87
1/2453900.10
Name and Contact Information Capital Contribution Capital
(% Interest) Commitment
Charles J. Koch Revocable Trust dated 0.246% $1,000,000
11/14/2007
155 Lakehurst Drive
Bratenahl, OH 44108
Attn: Charles J. Koch, Trustee
Telephone: (216) 268-5304
Email: bkoch@lakehurstassoc.com
KHS, LLC 0,123% $500,000
1720 W, Range Road
Teton Village, WY 83025
Attn: Kelvin H. Stirn
Telephone: (307) 733-9316
Email: kstim@wyom.net
Lawrence A. Rice Revocable Trust dated 0.061% $250,000
12/21/1991
480 Parklawn Drive
Rocky River, OH 44116
Attn: Lawrence A. Rice
Telephone: (440) 331-4911
Stephen B. Perry Trust dated 12/29/2005 0,123% $500,000
20 Glenridge Court
Bentleyville, OH 44022
Attn: Stephen B. Perry
Telephone: (440) 247-2479
Email: s err linsalata.com
Andrews Lane, LLC 0,061% $250,000
c/o Ronald E. Bates, Manager
St. Clair Advisors, LLC
6120 Parkland Blvd., Suite 303
Mayfield Heights, OH 44124
Telephone: (216) 925-5671
Email: rbates saintelairadvisors.com
88
1/2453900.10
Name and Contact Information Capital Contribution Capital
(% Interest) Commitment
William P. Madar Trust dated 8124/2007, as 0.123% $500,000
amended and gestated
24242 Drayton Landing
Worton, MD 21678
Attn: William P. Madar, Trustee
Telephone: (410) 810-1641
Email: wpmad(a7aol.com
Tom C. Tinsley 0.123% $500,000
1400 34`t' Street NW
Washington, DC 20007
Telephone: (202) 247-1630
Email: ttinsley@generalatlantic.com
Christine Q. Janicki Family Trust dated 0.061% $250,000
6/9/1997
2781 Sherbrooke Road
Shaker Heights, OH 44122 '.
Attn: Christine Q. Janicki
Telephone: (216) 321-2341
Email: cagjQhotmail.com
Lynne E. Gerace Restatement of Declaration 0.123% $5005000
of Trust dated 1/27/2012
7585 Thistle Lane
Novelty, OH 44072
Attn: Lynne E. Gerace
Telephone: (440) 477-9808
Email: lynne@cedarwoods.com
Water and Power Employees' Retirement 4.917% $20,000,000
Plan(Retirement Fund)
111 N. Hope Street, Rm 357
Los Angeles, CA 90012
Attn: Mary C. Higgins
Telephone: (213) 367-1905
Email: investments lades .com
89
1/2453900.10
Name and Contact Information Capital Contribution . Capital
(% Interest) Commitment
Water and Power Employees' Retirement 1.229% $5,000,000
Plan (Retiree Health Benefits Fund)
111 N. Hope Street, Rm. 357
Los Angeles, CA 90012
Attn: Mary C. Higgins
Telephone: (213) 367-1905
Email: investments(@Iadwp.com
Two Sigma Holdings VC Acquisition Vehicle 3.688% $15,000,000
11, LLC
100 Avenue of the Americas, 16`11 Floor
New York,NY 10013
Attn: Brandon Johnson
Telephone: (212) 625-5700
Email: twosigjaholdingsgtwosigMa.com
Stafford International Timberland VI US Inc. 3.688% $15,000,000
41h Floor, 24 Old Bond Street
London, England W1 4AW
Attn: Vince Cao
Telephone: (+44) 207 535 4915
Email: vincecao(@,staffbrdqp.com
The Ministers &Missionaries Benefit Board 4,917% $20,000,000
(Annuity Fund)
475 Riverside Drive, Suite 1700
New York, NY 10115
Attn: Candace Cox
Telephone: (212) 870-8017
Email: Candace.Cox mmbb.or
90
112453900.10
SCHEDULE B
ASSIGNEE INFORMATION
Name and Contact Information Capital Contribution Capital Commitment
[insert name]
[insert address]
Attn:
Telephone:
Facsimile:
Assignee interest received from:
[insert name of assignor]
91
1/2453900,10
.......... ...... ...._
MOLPUS TIMBERLANDS MANAGEMENT"
July 2, 2014
City of Clearwater Employee's Pension Plan
Attn: Board of Trustees
100 S. Myrtle Avenue
Clearwater, Florida 33758
Re: Molpus Woodlands Fund IV, L.P.
Ladies and Gentlemen:
In connection with the investment in interests ("Interests") of Molpus Woodlands Fund
IV, L.P. (the "Company") by the City of Clearwater Employee's Pension Plan (the "Pension
Fund"), Molpus Woodlands Fund IV-GP, LLC ("Manager") is providing certain additional
representations to the Pension Fund and entering into certain additional agreements, all as set
forth in this letter (the "Side Letter"). Upon execution by the Company and the Manager, this
Side Letter shall be a binding agreement against the Manager and the Company which may not be
amended without the written consent of the Manager and the Pension Fund.
Notwithstanding any provision of the Subscription Agreement, as amended from time to
time, and the Amended and Restated Limited Partnership Agreement, as amended from time to
time, or any other materials used in the offering or sale of Interests in the Company (collectively,
the "Offering Documents") to the contrary, to the extent that any provision of the Offering
Documents conflicts with the terms of this Side Letter,the terms of this Side Letter shall control.
1. Most Favored Nation. Notwithstanding anything contained herein or in the
Offering Documents to the contrary, in the event that the Manager has either previously entered
into or enter into a side letter or similar agreement/arrangement with an existing or future investor
in the Company with an investment in the Company equal to or less than the value of the Pension
Fund's investment in the Company (each, an "Other Side Letter") that has the effect of
establishing rights (including fees) or benefits that otherwise treat such investor in a manner more
favorable in any material respect than the rights and benefits established in favor of the Pension
Fund by the Offering Documents (or pursuant to this Side Letter), the Pension Fund, in its sole
discretion, will be entitled to the rights and benefits under each such Other Side Letter if the
Pension Fund provides written notice to the Manager within thirty (30) days of receipt of notice
of such rights and benefits from the Manager; provided, however, that the Manager shall have no
obligation to provide notice of any preferential rights and benefits granted which fall within the
types of rights and benefits enumerated in the following sentence. Notwithstanding anything to
the contrary, however, Pension Fund acknowledges that Pension fund shall not be entitled to the
benefit of any provisions (i) which are included in such Other Side Letter solely because of a
requirement of any law, statute, rule or regulation to which such other investor is subject and
Pension Fund is not, (ii) which are personal to such investor based solely on the place of
organization or headquarters, organizational form of, or other particular restrictions applicable to,
such investor, and where such factors cannot be made reasonably applicable to Pension Fund, (iii)
(Off gla11rRPURoad • Hattiesburg,Mississippi 3940r • Phone:6or-545-3o63 ' Fax:6oi-545-2902 • www.molpus.eoni
City of Clearwater Employee's Pension Plan
Side Letter
Page 2
which provide for the right of such investor to appoint an advisory board member or valuation
committee member, (iv) which are incentives for participation in the initial closing of the
Company or for submitting subscription documents and making a Capital Commitment by a
specific date, or (v) so long as such provision does not impart a benefit which would violate the
prohibition against self-dealing, which are for the benefit of the Manager or any of its Affiliates or
any entity formed for investment in the Company or by any of the foregoing or any officers,
directors,managers or employees of the foregoing or any family members of the foregoing.
2. Governmental Investigation. Manager shall notify the Pension Fund within a
reasonable period not to exceed twenty (20) days of any civil, criminal, Securities and Exchange
Commission ("SEC"), U.S. Department of Labor (the "Department") or other governmental
investigation (which does not include routine examinations, audits or reviews), disciplinary
proceeding, or administrative action finding a material violation by Manager (or an Affiliate
thereof) of an investment related statute or regulation. Manager shall also notify the Pension
Fund immediately in the event of a civil, criminal, SEC, Department or other governmental
investigation, disciplinary proceeding, report or administrative action related to or involving the
Pension Fund's investment in the Company. Additionally, Manager shall notify the Pension Fund
within ten (10) days of the date it (or an Affiliate thereof) is the subject of any order or finding by
a court of a violation by Manager (or an Affiliate thereof) of an investment related statute or
regulation.
3. Counterparts. This Side Letter may be executed in any number of counterparts,
each of which shall be deemed an original, and said counterparts shall constitute but one and the
same instrument and may be sufficiently evidenced by any one counterpart.
4. Assignment. This Side Letter is not assignable by either party hereto in whole or
in part without the prior written consent of the other party, which may be withheld in such party's
sole discretion.
5. Indemnification. The Company agrees to the deletion of paragraph K of the
Subscription Agreement.
d. Standard of Care. Manager agrees that it is a fiduciary to the Pension Fund.
Nothing set forth in the Subscription or Limited Partnership Agreements shall relieve the
Manager of its duty to manage the affairs of the Company in accordance with the care, skill,
prudence and diligence under the circumstances then prevailing that a prudent person acting in a
like capacity and familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims to the Company.
7. Public Records Law. The Pension Fund acknowledges that it is committed to
protecting the confidentiality of all confidential information that the Manager provides to the
Pension fund regarding the Company. Notwithstanding the foregoing, the Manager
acknowledges that the Pension Fund is a government plan subject to laws, regulations and
policies including certain public disclosure requirements. Notwithstanding anything to the
{0005 l f 3 4.DOC;3)
City of Clearwater Employee's Pension Plan
Side Letter
Page 3
contrary contained in the Agreement, the Manager agrees that the Pension Fund shall be relieved
from any confidentiality or other obligations under the Agreement or otherwise to the extent
necessary to comply with its obligations under such laws, regulations and policies; provided,
however, that, unless otherwise prohibited by law, prior to disclosing any "Non-Fund Level
Information," the Pension Fund shall use its reasonable best efforts to promptly notify the
Manager upon receipt of a request for Non-Fund Level Information and will consult with the
Manager regarding the response to such disclosure request, consistent with applicable laws, rules,
regulations, the Pension Fund's board policies and fiduciary duties. In connection therewith and
notwithstanding anything to the contrary contained in the Agreement, the Manager consents to the
disclosure by the Pension Fund of"Fund Level Information" to the public and agrees that such
disclosure shall not constitute a breach of the Agreement.
8. Notice of Certain Matters. The Manager shall notify the Pension Fund as soon as
reasonably practicable of any claims for indemnification arising against the Company pursuant to
the Agreement. The Manager shall promptly notify the Pension Fund of the commencement of
any lawsuit or legal proceeding (and the outcome, when resolved, of such lawsuit or legal
proceeding) in which the Manager is a named party and which, if adversely determined, would be
reasonably likely to materially adversely affect the Manager's ability to perform its obligations
under the Agreement.
9. Florida Statutes. Any provision in this side letter or other document or Agreement
to the contrary, notwithstanding, by reason of the laws, regulations and public policies of the State
of Florida applicable to the Pension Fund as a governmental entity in the State of Florida, the
Manager agrees, that (a) it will not take any action that will cause the Pension Fund to not be in
compliance with Florida Public Records Act and Goveinnent in the Sunshine Law; (b) it will not
take any action that will cause the Pension Fund to not be in compliance with Public Entities
Crime Bill Notice - Section 287.133, Florida Statutes; and (c) it will not take any action that will
cause the Pension Fund to not be in compliance with Valuation of Illiquid Investments - Section
112.661(17), Florida Statutes.
10, Venue. By reason of the laws, regulations and public policies of the State of
Florida applicable to the Pension Fund as a governmental entity in the State of Florida, the
Manager agrees, that with regard to issues arising out of the tenus of this side letter only, that (a)
it will submit to the nonexclusive jurisdiction of the courts located in Pinellas County, Florida,
and (b) it will bring any suit, action, claim or proceeding against the Pension Fund under any
provision of this Letter Agreement, the Limited Partnership Agreement, or the Pension Fund's
Subscription Agreement in the courts located in Pinellas County, Florida.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
(00051131.DQC;1)
City of Clearwater Employee's Pension Plan
Side Letter
Page 4
Sincerely,
MOLPUS WOODLANDS FUND IV, L.P.
By: Molpus Woodlands Fund IV-GP, LLC
Its: General Partner
r
By: U°_ �
Name: Bob Lyle
Sts: Authorized Aeent
MOLPUS WOODLANDS FUND IV-GP, LLC
Name: Bob Lyle -�-
Its: Authorized Aizent
RECEIVED AND ACKNOWLEDGED BY:
City of Clearwater Employee's Pension Plan
By:
Name: George N. Cretekos
Title: Chairperson
(0045143[.DQC;1)