EFTA01118520.pdf

4 c r rv-A, r tr, le) N -1.`O‘,7,2 BEAR STEARNS HIGH-GRADE STRUCTURED CRED IT STRATEGIES ENHANCED LEVERAGE FUND, L.P . (FOR USE BY INVESTORS IN BEAR STEARNS HIG STRATEGIES FUND, L.P., THAT WISH TO H-GRADE STRUCTURED CRE EXCHANGE ALL OR A PORTION DIT INTEREST THEREIN FOR AN INTERE OF THEIR ST IN THE PARTNERSHIP) SUBSCRIPTION AGREEMENT for Limited Partnership Interests BEAR STEARNS ASSET MANAGEM ENT INC. GeneralPorn er 383 Madison Avenue New York, New York 10179 Attention: Alternative Fund Services Telepbone: 212-272.1630 Facsimile: 917449.3018 4'9 EFTA01118520  The Investor hereby agrees as follows: 1. SUBSCRIPTION FOR AN INTEREST Subscription Amount: ALL or Please specify whether you wish to request the withdrawal of all or a portion of your interest in the High-Grade Fund as of the Transaction Effective Date (as defined in the interest Exchange Agreement) and to contribute the proceeds of such withdrawal to the Partnership as of the Transaction Effective Date in exchange for an Interest in the Partnership having a value equal to the value of the withdrawn portion of your interest in the High-Grade Fund immediately prior to the effectiveness of such withdrawal. (A) The Partnership will offer Interests generally as of the opening of business of the first Business Day of each month (each, a "Subscription Date") The Investor agrees to become a limited partner in the Partnership (as so admitted, hereinafter sometimes individually referred to as a "Limited Partner" and collectively with the other limited partners as the "Limited Partners"), and in connection therewith subscribes for and agrees to make a capital contribution to the Partnership in the amount set forth on page 4 hereof, on the temp and conditions described herein and in the Interest Exchange Agreement attached as Appendix II to this Subscription Agreement (the "Interest Exchange Agreement"), and in the Memorandum, and the Partnership's Limited Partnership Agreement (collectively, the "Partnership's Documents"). (B) The Investor acknowledges and agrees that it is not entitled to cancel, terminate, or revoke this subscription, power of attorney, or any agreements of the Investor hereunder, except as otherwise set forth in (i) the Memorandum or (ii) applicable law, and such subscription and agreements and power of attorney shall survive changes in the transaction, documents, and instruments described in the Memorandum. (C) The Investor hereby irrevocably constitutes and appoints Bear Steams Asset Management Inc. or its designee (and any substitute or successor general partners) of the Partnership) (the "General Partner") as its true and lawful attorney in its name, place, and stead, (i) to arrange for payment to the Partnership on behalf of the Investor, to the extent set forth in this Subscription Agreement, all funds received hereunder, (ii) to complete or correct, on behalf of the Investor, all documents to be executed by the Investor in connection with the investor's subscription for an Interest, including, without limitation, filling in or amending amounts, dates, and other pertinent information, (iii) as applicable, to execute, acknowledge, swear to, and file: (a) any counterparts of the Partnership's Limited Partnership Agreement (the "Limited Partnership Agreement") to be entered into pursuant to this Agreement and any amendments to the Limited Partnership Agreement, (b) any agreements or other documents relating to the obligations of the Partnership as described in the Partnership's Documents, (c) any certificates of limited partnership required by law and all amendments thereto, (d) all certificates and other instruments necessary to qualify, or continue the qualification of, the Partnership in the states where it may be doing business, (e) all assignments, conveyances, or other instruments or documents necessary to effect the dissolution of the Partnership, (1) all other filings with agencies of the federal government, of any state or local government, or of any other jurisdiction, which the General Partner considers necessary or desirable to carry out the purposes of this Agreement, the Limited Partnership Agreement, and the business of the Partnership, and (iv) to file, prosecute, defend, settle, or compromise litigation claims or arbitrations on behalf of the Partnership (other than proceedings in which the Partnership and the General Partner are adversaries). This power of attorney shall be deemed coupled with an interest, shall be irrevocable, and shall survive the transfer of the Investor's Interest. (D) The Investor agrees that as of the date of the acceptance of this subscription and the Investor's Subscription Amount by the General Partner, the Investor shall become a Limited Partner of the Partnership, and it hereby agrees to each and every term of the Limited Partnership Agreement, as if the Investor's signature were subscribed thereto, and of the Memorandum. By execution of this Subscription Agreement, the Investor agrees that it shall be deemed to have executed the Limited Partnership Agreement. 4 EFTA01118521  Nontaxable exchanges Code Sec. 1031(a)(1) 1963. of a corporative which was a foreign mental Padang in most recent uutabk yeas ending before the date of the company for In 1964. redesignated Code Sec. 1022 at Code Sec. 1023. decedette s death . stall be iceatased by its ptOpanionate sham Of ay Federal cute tat atrib- PART M. —COMMON NONTAXABLE EXCHANGES uuble to the net apemen-lance in yoke of all of suds than and deetnnired as provided in this section. woman See. lb) PlefOrkellle thee. 'For wpm, of abjection (U. the proportionate than of a 1031. Exchange of property held for productive share of use or in. oak or of • security is du: amours which bears the VeStMent. sane radio to the ag- stepte Scream determined ander subsection (SO) as atsreciati 1032. Exchange of stock for property. taut of such dun or security bean to the aggregate the an appeetim of al such shares and securities hating appreciation in value. en IS value 1033. Involuntary conversions. lc/Spend nab and Ielleitiont- 1034. Repealed. lor purposes of this section — 1035. Certain exchanges of insurance policies 11) Federal estate tax. The term 'Federal estate tax' mean only . imposed by section 2001 or 2101 toasted by any credit allowable the tar 1036. Slack for stock of same corporation. xpect to wish (e- co puce Inman by section 5)13 or 2102. 1037. Certain exchanges of United States obligations. 12) Fatal estate tat auribembk ro net appreciatioe m vane. The Fed. 1038. Certain reacquisition* of real properly. eat estate tax manhood,* to the nee appreciation in sae of all stock and securities to which subsection (a) applies is shares of 1039. Repealed. hears the same Moo to the Fenced estate tax in them that amoont .hick appreciati on in WM Transfer of certain (ann. etc.. real property rake of alt of loch sham sod menthes bears 40 (effective the before 1/02010). tate as determined under chapter 11 (socleding sectionsake of the grew es- 2032. relanta to eh femme val.-won) 1010. Use of appreciated carryover basis property as satisfy Net *erratum The mi vermouth in sane of all sheets and se. • pecuniary bequest (effective after 12/3I(20 Mace to Ala' subsection (a) thaws is the amount by 09)- 1041. Transfers of property between spouses or mates vase of all seek thorn and Kamenn exceeds the which the fair incident to adjusted boas of divorce. such papery in the hada of the decedent. IS Fast market value For puposes of Om mom. the term 'fair 1042. Sales of stock to employee stock ownership market plans or vane mass (aa market value elnenemed wader chapter certain cooperatives. tion 2032. relating to thiroare valuation). I I Oneading sec- 1043. Sale of property to comply with conflict.of-intere 1c9 Limitaions, st re. 11tis section shall not awn to any fortign personal bolding quiremeats. related to r semen 342(a)a).- company 1044. Rollover of publicly traded securities pin into sm• le 1964, P.L. 811272. See, 225(0, added Cede Sec 1022, effective cialized small business investment cothpanies. adems dyke after 12/3U6S. for de- 1045. Rollover of gain from qualified small business stock See. 1023. Cross references. to another qualified small business stock (I) For certain distributions by a corporation which lit 2111. PL 10716, Sec 542(d)(21. amended Una 1040. are applied in reductioh of basis of stock, see Pier to aromadmeat. item 1040 read as follows: section 301(cX2). 100. Transfer of enemies fan. eat real propeny.- . (2) For basis in case of construction of new le 1997. PI- 10544, Sec 312(005). deleted item 1034... vessels. sec added item 1015. Sec. 31301(3). chapter 533 of tick 46. United States Code. In 1993, P.1.- 103.66. Sec 13114(c). added item 1044. In 2456, PL 109-30. Stu. I7(04). subuileted "alma lm IWO, P.L I01-508, Sec. IS01(:001). deleted kern 1039. 533 Cased States Cede- for "earn SI I of the Mochas< Marine ef title 46. Prim m deletion. item 1079 read at follows: unaided (46 LS S.0 Fl60" in pat (2). enacted I 005/2636. Act. 1936 as "1039. Ceuta tam of low-income housing projens.- In 140. PL 96-50. Sec 66)(4). deleted pan (2) and redesigna In 150), PL. 101-194, Sec 502(bX3). added nem 1043. ted pan In 1115, P L. 99.314. Sec II0MaX12). amended lean 1012. 0) as Para (21. effective. io(n9. except fee any proceeding undo the Bankreixey Act berm before 101179. Soc. ny.) of this Act provides: PM m aMeNdrOtat. Sent 1042 toad as follows: 15) Denison. - 1042. Saks of stoat to neck ownership plans or certain ceoperam 'Ter papaws of this section — et- la 1954, P.L 98.369. Sec. 42fte), same item 1011..., See. 541(a). added ll) BaritniptCy case. The term "IdalrIPIL7 ease' item 1082. Ode 11 of the United Stales (de (as recodillid amaat any cue ander by PL. 95491) In 19111, PL 97.34, Sec. 4210X2XCL amended Min 12) Sienna tudscul proeceJaeg. The team 'sundae jutbria proceedte 1040 g' Ham to arnadmeot item 1040 read as fathom amass a reariverstip. foreclosure. or wales proceedin "100. Use of fa etc.. real preptuy to tautly pee navy Sum cows In meddled by section 363(a)(3•11) of theg m • Federal or lemma Revenue In INS. Pt. 96.223. Sec. 40602103). revised Table, 14214" 4" Code of 1954)7 •- ch. Ito mad "See. 1040. Use of farm, etc.. real poperypart III. Sara 0. Prue to deletion para. (2) rod in follows an bequest ". In aspen of decedents Stag after 12/31/76.to satisfy pane. "(2) For Sus of propcny in case of certain reorganizations Prior to revision the table sad as follows: menu mar the Badauptcy Act. See WIXOM 270. 396. and arrangc• Aci. as amended ( II U. S C. 670. and 522 of nut Use of Milan appreciated carryover bases property to tautly pectin. 796. 922) - ay request." -PL 96-221. Sec 401(a). repealed Sec. 2C05(a)(2) of PL the scenarists mode by Sec. 2005(a)(21 effective for decedents94-455 and In thin Pl. 954(0, Sec 405442). amended kem 1034. 76 (see hang Sec- 401(b) of PL 94223 provides as follows:droll are Prim to amendment mere 1034 lead as follows 1$ Revival of Prix law. -Silt or excluoge of reside:me." 'Except to the client necessary to cony out subsection td). the I. 1976, P.L. 94.455. Sec. 2005(02). added loan 1040. Revenue Code of 1954 shall be applied and administe Internal L 190, P.L. 91.172. Sec. 1110(c). added tam 1039 sans repealed by setweetioa (a). and the actors red as if the prow. la 1961, inserted item 103$. noes. had not been enacted" made by those Prom le I90, added rem 1037. la OM PL 94-455. Sec. 1901(1)(127). deleted para. (4). effective for tea yas. tett after '76. Sec. 1031. Exchange of property held for productive Not to deletion. pan (4) real al follows use or Investment. 14) For mks applicable us case of payments u diction Act el 1950. as treaded we faili). 40 violation of Defense Pro. (a) Nonrec ognition of gain or loss from exchanges solely of that ALL In kind. —P.L. 94.455. See N05(02). rcdesiSOalcd Code Sec- 1024 ad added new Code Sec. 1023. Ma 1023 as Code Sec (1) In general. No gain or loss shall be recognized See. 401(a) of Pt 96.223 Ism Sava the Code Sec 2005(1)(2) was repealed by on the Sec 1023 added by Sec. exchange of property held for productive use 2005(4)(2) see cane for SIX- 401(5) of PL. 96.223 in a trade or followin Cabe Sec business or for investment if such property is exchang 1014 ed 2.759 EFTA01118522  Code Sec. 1031(a)(1) Nontaxable exchanges solely for property of like kind which is to be held either received, and fee the purpose of the allocation there shall be for productive use in a trade or business or for investment. assigned to such other properly an amount equivalent to its —, (2) Exception. This subsection shall not apply to any ex- fair market value at the date of the exchange. For purposes change of — of this section, section I035(a). and section 1036(a), where (A) stock in trade or other property held primarily for at part of the consideration to the taxpayer another party to sale. the exchange assumed (as determined under section 357(d)) a liability of the taxpayer, such assumption shall be consid- --- • - • —., (B) stocks, bonds, or notes. ered as money received by the taxpayer on the exchange. (C) other securities or evidences of indebtedness or in- i kraal. (e) Exchanges of livestock of different sexes. interests in a partnership. For purposes of this section, livestock of different sexes (E) Certificates of trust or beneficial interests. or are not properly of a like kind. (t) Special rules for exchanges between related persons. (F) choses in action. (I) In general. If— For purposes of this section. an interest in a partnership which has in effect a valid election under section 761(a) • (A) a taxpayer exchanges property with a related per- to be excluded from the application of all of subchapter K son, shall be treated as an interest in each of the assets of such (B) there is nonrecognition of gain or lOss to the tax- partnership and not as an interest in a partnership. payer under this section with respect to the exchange of (3) Requirement that property be Identified and that such property (determined without regard to this sub. exchange be completed not more than 180 days after section). and transfer of exchanged property. For purposes of this (C) before the date 2 years after the date of the Iasi subsection. any property received by the taxpayer shall be transfer which was part of such exchange— treated as property which is not like-kind property if — (i) the related person disposes of such properly. or (A) such property is not identified as property to be re- (ii) the taxpayer disposes of the property received in ceived in the exchange on or before the day which is 45 the exchange from the related person which was of days after the date on which the taxpayer transfers the like kind to the property transferred by the taxpayer. property relinquished in the exchange. or there shall be no nonrecognition of gain or loss under this (B) such property is received after the earlier of — section to the taxpayer with respect to such exchange; ex- (i) the day which is 180 days after the date on which cept that any gain or loss recognized by the taxpayer by the taxpayer transfers the property relinquished in the reason of this subsection shall be taken into account as of exchange. or the date on which the disposition referred to in subpara- (ii) the due date (determined with regard to exten- graph (C) occurs. sion) for the transferor's return of the tax imposed by (2) Certain dispositions not taken into account. For pur- this chapter for the taxable year in which the transfer poses of paragraph (I)(C). there shall not be taken info 2C- of the relinquished property occurs. COUnt any disposition — (b) Gain from exchanges not solely In kind. (A) after the earlier of the death of the taxpayer or the death of the related person, If an exchange would be within the provisions of subsec- (B) in a compulsory or involuntary conversion (within tion (a). of section 1035(a). of section 1036(a), or of section 1037(a), if it were not for the fact that the property received the meaning of section 1033) if the exchange occurred in exchange consists not only of property permitted by such before the threat or imminence of such conversion. or provisions to be received without the recognition of gain, but (C) with respect to which it is established to !he satis• also of other properly or money, then the pin, if any. to the faction of the Secretary that neither the exchange nor recipient shall be recognized. but in an amount not In excess such disposition had as one of its principal purposes the of the sum of such money and the fair market value of such avoidance of Federal income tax. other property. (3) Related person. For purposes of this subsection, the (c) 146.5 from exchanges not solely In kind. term "related person" means any person bearing a rela- If an exchange would be within the provisions of subsec- tionship to the taxpayer described in section 267(b) or tion (a), of section 1035(a). of section 1036(a). or of section 707(b)(l). 1037(a). if it were not for the fact that the property received (4) Treatment of certain transactions. This section shall in exchange consists not only of property permitted by such not apply to any exchange which is part of a transaction provisions to be received without the recognition of gain or (or series of transactions) structured to avoid the purposes loss. but also of other property or money, then no loss from of this subsection. the exchange shall be recognized. (g) Special rule where substantial diminution of risk. (d) Basis. (1) In general. If paragraph (2) applies to any property If property was acquired on an exchange described in this for any period. the running of the period set forth in sub- action. section 1035(a), section 1036(a), or section 1037(a), section (f)(IXC) with respect to such property shall be then the basis shall be the same as that of the property ex- suspended during such period. changed, decreased in the amount of any money received by (2) Properly to which subsection applies. This paragraph the taxpayer and increased in the amount of gain or de- shall apply to any property for any period during which creased in the amount of loss to the taxpayer that was recog- the holder's risk of loss with respect to the property is nized on such exchange. If the property so acquired con- substantially diminished by — sisted in part of the type of property permitted by this (A) the holding of a put with respect to such property. section, section 1035(a), section 1036(a). Of section 1037(a), (B) the holding by another person of a rig$ to acquire to be received without the recognition of gain or loss, and in such property. or part of other property, the basis provided in this subsection (C) a short sale or any other transaction. shall be allocated between the properties (other than money) 2,760 EFTA01118523