EFTA00314299.pdf

EXHIBIT II SOSIN PARTNERS, LP A Delaware Limited Partnership AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP Neither the Partnership nor the limited partnership interests therein have been or will be registered under the Securities Act of 1933, as amended (the "Securities Act"), the Investment Company Act of 1940, as amended (the "Investment Company Act"), or the securities laws of any of the States of the United States. The offering of such limited partnership interests is being made in reliance upon an exemption from the registration requirements of the Securities Act, for offers and sales of securities which do not involve any public offering, and analogous exemptions under state securities laws. These securities are subject to restrictions on transferability and resale, may not be transferred or resold except (i) as permitted under the Securities Act and applicable state securities laws pursuant to registration or exemption therefrom, and (ii) in accordance with the requirements and conditions set forth in this Agreement of Limited Partnership. EFTA00314299  Table of Contents 1. ARTICLE I - General Provisions 2 2. ARTICLE II - General Partner 5 3. ARTICLE III — Capital Accounts of Limited Partners and Operation Thereof 9 4. ARTICLE IV — Withdrawals, Distributions of Capital, Transfers 20 5. ARTICLE V — Withdrawal on Death, Disability, Etc. 25 6. ARTICLE VI - Admission of New Limited Partners 26 7. ARTICLE VII — Duration and Termination of Partnership 26 8. ARTICLE VIII — Tax Returns: Reports to Partners 28 9. ARTICLE IX - Miscellaneous 29 15024951_8 EFTA00314300  SOSIN PARTNERS, LP Amended and Restated Limited Partnership Agreement Dated as of November 14, 2016 This AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT made as of the 14th day of November, 2016 (the "Agreement") among the undersigned (herein called the "Partners," which term shall include any persons hereafter admitted to the Partnership (as defined herein) and shall exclude any persons who cease to be Limited Partners (as defined herein) shall govern Sosin Partners, LP (the "Partnership") as of the date and year first above written. The Partnership was formed as a limited partnership under the Delaware Revised Uniform Limited Partnership Act (6 Dec.0 § 17-101 et.seq.), as may be amended from time to time (the "Act"), by filing a Certificate of Limited Partnership with the Office of the Secretary of State of the State of Delaware. WITNESETH: WHEREAS, the General Partner and the Limited Partners heretofore entered into an Amended and Restated Agreement of Limited Partnership, dated most recently as of September 9, 2014 (the "Prior Agreement") and have formed a limited partnership pursuant to the Act; and WHEREAS, the parties hereto desire to continue the Partnership and, pursuant to section 16 of the Prior Agreement, to amend and restate the Prior Agreement in its entirety. NOW, THEREFORE, the parties hereto hereby amend and restate the Prior Agreement in its entirety and agree as follows: ARTICLE I General Provisions Sec. 1.1 Partnership Name, Address and Registered Agent; General Partner; Manager. The Partnership was formed under the Act and shall do business under the name of Sosin Partners, LP or such other name as determined by the General Partner (as hereinafter defined). The Partnership's principal office is located at 1745 Broadway, FL-17, New York, NY 10019, or at such other location as the General Partner in the future may designate. The registered agent of the Partnership in the State of Delaware is: National Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, Delaware 19904. The Partnership's general partner shall be Sosin, LLC, a Delaware limited liability company and its permitted successors and assignees (the "General Partner"). CAS Investment Partners, LLC, a Delaware limited liability company, and its permitted successors and assignees (the "Manager") will serve as the investment manager of the Partnership pursuant to a management agreement. Sec. 1.2 Fiscal Year. The fiscal year of the Partnership (herein called the "fiscal year") shall end on December 31st of each calendar year or on such other date as the General Partner shall determine. Sec. 1.3 Liability of Partners. The names of all of the Partners, the amounts of their respective contributions to the Partnership (herein called the "Capital Contributions"), and their Ownership Percentages (as defined in Sec. 3.4(a)) and Special Situation Percentages (as 15024951_8 2 EFTA00314301 defined in Sec. 3.4(b)) are set forth in a schedule entitled "Schedule of Capital Contributions, Ownership Percentages and Special Situation Percentages" (herein called the "Schedule") which shall be maintained with the records of the Partnership and, subject to the last sentence of this paragraph, is available to the Partners at the principal office of the General Partner or of the Partnership's administrator. The Schedule is hereby incorporated by reference and made a part of this Agreement. Each Limited Partner shall have reasonable access to those records relating to its own Capital Account. Those Partners who are designated in the Schedule as "Limited Partners" (the "Limited Partners") shall be liable for the repayment and discharge of all debts and obligations of the Partnership attributable to any fiscal year (or relevant portion thereof) during which they are Limited Partners of the Partnership only to the extent of their respective interests in the Partnership in the fiscal year (or relevant portion thereof) to which any such debts and obligations are attributable and shall not otherwise have any liability in respect of the debts and obligations of the Partnership. The Limited Partners shall share all losses, liabilities or expenses suffered or incurred by virtue of the operation of the preceding paragraphs of this Sec. 1.3 in proportion to their respective Ownership Percentages and Special Situation Percentages, as applicable, for the Fiscal Year (or relevant portion thereof) to which any debts or obligations of the Partnership are attributable. Limited Partners shall share all losses, liabilities or expenses up to the limit of their respective interests in the Partnership for such Fiscal Year (or relevant portion thereof). As used in this Sec. 1.3, the terms "interests in the Partnership" and "interest in the Partnership" shall mean with respect to any Fiscal Year (or relevant portion thereof), and with respect to each Limited Partner, such Limited Partner's interest in its Capital Account (as defined in Sec. 3.3(a)) and any Special Situation Sub-Account(s) (as defined in Sec. 3.3(d)), when applicable, that such Limited Partner would have received (or in fact did receive) pursuant to the terms and provisions of Article IV and V upon withdrawal from the Partnership as of the end of such Fiscal Year (or relevant portion thereof). Notwithstanding any other provision in this Agreement, in no event shall any Limited Partner be obligated to make any additional contribution to the Partnership, or have any liability for the repayment and discharge of the debts and obligations of the Partnership, except that a Limited Partner may be required, for purposes of meeting such Limited Partner's obligations under this Sec. 1.3, to make additional contributions or payments, respectively, up to, but in no event in excess of, the aggregate amount of returns of capital and other amounts actually received by it from the Partnership during or after the Fiscal Year to which any debt or obligation is attributable. Sec. 1.4 Purposes of the Partnership. The Partnership is organized for the primary investment objective of investing in a concentrated portfolio of tradable credit and equity instruments (on a long and short basis) with the goal of outperforming the S&P 500 (as measured by a specific S&P 500 ETF) over time, as discussed in the Partnership's Amended and Restated Confidential Offering Memorandum dated as of March 1, 2016 (the "Memorandum") provided, however, that any material change to the investment strategy set forth in the Memorandum will be deemed an amendment of this Agreement and may only be made pursuant to Sec. 9.4 herein. The Partnership may engage in all activities and transactions as the General Partner may deem necessary or advisable in connection therewith, including, without limitation: (a) to invest and trade, on margin or otherwise, in securities and other financial instruments of United States and foreign entities or governments, including, without limitation, capital stock (common and preferred), swaps (including credit default swaps) and other derivative instruments, initial public offerings, convertible securities, listed options and equity 15024951_8 3 EFTA00314302 options, shams of beneficial interest, warrants, convertible preferred obligations, over-the-counter financial instruments, exchange-traded funds, mutual fund shares, special situation fixed income obligations, bank debt and loans and trade claims, bonds, notes, debentures (whether subordinated, convertible or otherwise), Special Situation Investments (as defined in Sec. 3.1(r) herein), forward contracts, commodities, futures, currencies, derivative products (including interest rate and currency derivatives and structured/indexed securities), cash and cash equivalents, money market fluids, registered investment companies, closed end funds, obligations of the United States, any state thereof, and instrumentalities of any of them, commercial paper, certificates of deposit, bankers' acceptances, trust receipts, and other obligations, and instruments or evidences of indebtedness of whatever kind or nature of any person, corporation, government or other entity whatsoever, whether or not publicly traded or readily marketable, rights and options relating thereto, including put and call options written by the Partnership or by others, purchase loans and/or loan participations (all such items being called herein a "Security" or "Securities"), and to sell Securities short and cover such sales; (b) to engage in such other lawful Securities transactions as the General Partner may from time to time determine and as set forth in the Memorandum; (c) to utilize a variety of investment techniques including, but not limited to, purchase and sale writing of options on securities (both covered and naked options), and the use of borrowed funds for investment purposes (i.e., leverage); (d) to possess, transfer, mortgage, pledge, hypothecate or otherwise deal in, and to exercise all rights, powers, privileges and other incidents of ownership or possession with respect to, Securities and other property and funds held or owned by the Partnership; (e) to acquire a long position or a short position with respect to any Security and to make purchases or sales increasing, decreasing or liquidating such position or changing from a long position to a short position or from a short position to a long position, without any limitation as to the frequency of the fluctuation in such positions or as to the frequency of the changes in the nature of such positions; (f) to maintain for the conduct of Partnership affairs one or more offices and in connection therewith, rent or acquire office space, and do such other acts as the General Partner may deem necessary or advisable in connection with the maintenance and administration of the Partnership; (g) to lend any of the Securities, funds or other properties of the Partnership and, from time to time, for speculative purposes or otherwise, borrow or raise funds and secure the payment of obligations of the Partnership by mortgage upon, or pledge or hypothecation of, all or any part of the property of the Partnership; (h) to invest in each Special Situation Investment through limited liability companies, limited partnerships to special purpose vehicles, if applicable, through which the Partnership will allocate the capital of Limited Partners pursuant to the terms set forth herein; to engage personnel, whether part-time or full-time, and attorneys, independent accountants or such other persons as the General Partner may deem necessary or advisable; 15024951_8 4 EFTA00314303  (j) to enter into custodial arrangements with banks and brokers, wherever located, regarding Securities owned beneficially by the Partnership including brokers, banks and custodians with whom the General Partner may be affiliated; and (k) to do such other acts as the General Partner may deem necessary or advisable in connection with the maintenance and administration of the Partnership. For all purposed of this Agreement, if the General Partner engages, retains, hires or otherwise enters into a service arrangement with an affiliate of the General Partner, such arrangement shall be on commercially reasonable arms-length terms and disclosed to the Limited Partners. Although not currently contemplated, the Partnership may, in the discretion of the General Partner, seek to achieve its investment objective and implement its investment strategy (as discussed in the Memorandum) by investing all or part of its assets in a centralized company, commonly known as a "Master Fund," that is a separate investment vehicle but with an investment objective and strategy identical to that of the Partnership. ARTICLE II General Partner Sec. 2.1 Generally. The General Partner exercises ultimate authority over the Partnership and is responsible for its day to day operations. Except as authorized by the General Partner, the Limited Partners shall have no authority or right to act on behalf of the Partnership in connection with any matter. The General Partner has the right to delegate its responsibilities hereunder, including the responsibility of providing certain investment advisory, management, administrative and auditing services, to suitable parties that may be reasonably compensated by the Partnership. The General Partner may also retain such other suitable parties (including affiliates of the General Partner) to provide services to the Partnership, including, without limitation, legal, consulting, accounting, administrative and auditing services. Furthermore, the General Partner may enter into agreements with such parties on behalf of the Partnership, which agreements may include provisions for the indemnification and exculpation of such parties, in certain circumstances, by the Partnership (provided that any indemnification and exculpation provisions in agreements with affiliates of the General Partner will be on substantially the same terms as set the indemnification and exculpation provisions set forth in this Agreement). Sec. 2.2 Authority of the General Partner. The General Partner shall have the power on behalf of and in the name of the Partnership, and without notice to the Limited Partners, to carry out, or designate such other agents (some of which may be affiliates of the General Partner), including, without limitation, the Manager, to carry out any and all of the objects and purposes of the Partnership set forth in Sec. 1.4 and perform all acts and enter into and perform all contracts and other undertakings that it may deem necessary or advisable or incidental thereto, including, without limitation, the power to: (a) open, maintain and close accounts, including margin and custodial accounts, with brokers, which power shall include the authority to issue all instructions and authorizations to brokers regarding the Securities and/or money therein; 15024951_8 5 EFTA00314304  (b) open, maintain and close accounts, including custodial accounts, with institutions, including institutions located within and/or outside the United States, and draw checks or other orders for the payment of monies; (c) lend any Securities, funds or other properties of the Partnership and borrow or raise funds and secure the payment of obligations of the Partnership by pledges or hypothecation of all or any part of the property of the Partnership; (d) do any and all acts on behalf of the Partnership, and exercise all rights of the Partnership, or delegate such functions as it sees fit, with respect to its interest in any person, including, without limitation, the voting of Securities, participation in arrangements with creditors, the institution and settlement or compromise of suits and administrative proceedings and other similar matters; (e) organize one or more corporations or other entities formed to hold record title, as nominee for the Partnership, to Securities or funds of the Partnership; combine purchase or sale orders on behalf of the Partnership with orders for other accounts to whom the General Partner or any of its affiliates provide investment services ("Other Accounts") and allocate the Securities or other assets so purchased or sold, on an average price basis, among such accounts; (g) authorize any member, officer, employee or other agent of the General Partner or agent or employee of the Partnership to act for and on behalf of the Partnership in all matters incidental to the foregoing; (h) engage attorneys, independent accountants, consultants, placement agents, third-party valuation agents or such other service providers as the General Partner may deem necessary or advisable; provide research and analysis and direct the formulation of investment policies and strategies for the Partnership; (j) establish and close Special Situation Sub-Accounts for each Limited Partner participating in Special Situation Investments; (k) issue and use sub-accounts for the purposes described herein and in the Memorandum; issue one or more separate classes of partnership interests based on economic terms and conditions that may differ from those attributable to other classes of partnership interests and take all steps necessary to accomplish the same without the consent of any Limited Partner; (m) appoint one or more parties (each an "Independent Client Representative") unaffiliated with the General Partner, the Manager or any of their affiliates to act as an agent of the Partnership to give or withhold any consent of the Partnership required under applicable law to a transaction in which the General Partner or the Manager causes the Partnership to purchase securities or other instruments from, or sell securities or other instruments to, the General Partner, the Manager or their affiliates. If appointed, each Independent Client Representative may be paid by the Partnership and may be indemnified by the Partnership for 15024951_8 6 EFTA00314305 claims arising out of activity in such capacity. The General Partner may appoint one or more Limited Partners who are unaffiliated with the General Partner, the Manager or any of their affiliates, to serve as an Independent Client Representative for the Partnership as described above. The intent of this subparagraph is to provide a mechanism by which the Partnership, General Partner and Manager can meet the requirements of Section 206 of the Investment Advisers Act of 1940, as amended (the "Advisers Act'), and the rules promulgated thereunder; (n) engage in transactions in which it and/or its affiliates causes the Partnership to purchase securities or other instruments from, or sell securities or other instruments to, other funds or managed accounts managed by the General Partner and/or its affiliates ("cross- trades") for purposes of portfolio rebalancing as may arise from time to time without taking brokerage commissions or otherwise be compensated for effecting these cross-trades; (o) purchase and maintain such policies of insurance as the General Partner may consider appropriate, insuring the Partnership and the General Partner against liabilities that may arise in connection with the business or management of the Partnership; and (p) delegate any of its responsibilities and/or duties to others pursuant to separate agreements, which agreements may provide for indemnifications and exculpations such other service providers as deemed appropriate by the General Partner. Sec. 2.3 Management Fee. (a) The Partnership will pay the Manager (or any other person or entity designated by the Manager) a management fee that accrues monthly and is payable quarterly in arrears (the "Management Fee") in an amount equal to: (i) 0.50% of the Net Asset Value of the Capital Account of each Limited Partner (two percent (2.0%) per annum), and (ii) 0.35% of the Book Value of the Special Situation Sub-Account of each Limited Partner (one and four-tenths percent (1.4%) per annum). The Management Fee is prorated for partial periods. Payment of the Management Fee is due as of the last Business Day of each calendar quarter and is payable by the Partnership within ten (10) days thereafter. The Manager, in its sole discretion (exercised pursuant to its fiduciary duties), may waive, by rebate or otherwise, all or part of the Management Fee otherwise due with respect to any Partner's investment, including, without limitation, its affiliates, members and/or employees. (b) In the event of a suspension or limitation of the rights of Limited Partners to withdraw from the Partnership in accordance with Section 4.2(e) herein (other than any suspensions or limitations required by law, regulatory authority or as the result of a request by a regulatory or governmental agency or authority or self-regulatory organization), the Partnership will pay the Manager a Management Fee in an amount equal to 0.35% (one and four-tenths percent (1.4%) per annum) of the Net Asset Value of the Capital Account of such Limited Partner for such period of suspension or limitation. Sec. 2.4 Reliance by Third Parties. Persons dealing with the Partnership are entitled to rely conclusively upon the certificate of the General Partner to the effect that it is then acting as General Partner and upon the power and authority of the General Partner as herein set forth. Sec. 2.5 Activity of General Partner. The General Partner shall manage and control the Partnership and its business affairs with the care that an ordinarily prudent person in a similar position would exercise under similar circumstances. The General Partner and its members, 15024951_8 7 EFTA00314306 officers, directors, employees or other agents (collectively "Affiliates") shall devote as much of their time to the investment activities of the Partnership as the General Partner deems reasonable under the circumstances. Nothing contained herein shall be deemed to preclude the General Partner and/or Affiliates from engaging directly or indirectly in any other activities, for its or their own accounts. No Partner shall, by reason of being a Partner in the Partnership, have any right to participate in any manner in any profits or income earned or derived by or accruing to the General Partner or Affiliates from the conduct of any activities other than the activities of the Partnership or from any transaction in Securities effected by the General Partner and/or Affiliates for any account other than that of the Partnership. Sec. 2.6 Exculpation. Neither the General Partner nor any Affiliate, nor any of their employees, members, managers, or officers shall be liable to any Limited Partner or the Partnership for errors of judgment or for action or inaction, whether or not disclosed, or for losses due to such errors, action or inaction or to the negligence, dishonesty or bad faith of any employee, broker or other agent of the General Partner or the Partnership, provided that such employee, broker or agent was selected, engaged or retained by the General Partner or the Partnership with reasonable care. The General Partner and any Affiliate may consult with counsel and accountants in respect of Partnership affairs and be fully protected and justified in any action or inaction that is taken in good faith in accordance with the advice or opinion of such counsel or accountants, provided that they shall have been selected with reasonable care. Notwithstanding the foregoing, the provisions of this Sec. 2.6 shall not be construed so as to relieve (or attempt to relieve) the General Partner or any Affiliate of any liability to the extent (but only to the extent) that such liability may not be waived, modified or limited under applicable law, but shall be construed so as to effectuate the provisions of this Sec. 2.6 to the fullest extent permitted by law (including liability under U.S. securities laws which, under certain circumstances, impose liability even on persons acting in good faith). Notwithstanding the foregoing, no person will be exculpated or exonerated from liability, or indemnified against loss, for gross negligence, breach of this Agreement, breach of fiduciary duty, violations of federal or state securities laws or for any other intentional or criminal wrongdoing. Sec. 2.7 Indemnification of General Partner. To the fullest extent permitted by law, the Partnership shall indemnify and hold harmless the General Partner and its Affiliates, and/or the legal representatives of any of them (an "Indemnified Party"), from and against any loss or expense suffered or sustained by any or all of them by reason of the fact that they are or were an Indemnified Party, including, without limitation, any judgment, settlement, reasonable attorneys' fees and other costs or expenses incurred in connection with the defense of any actual or threatened action or proceeding or any investigation, inquiries by governmental agencies or request for information from any regulator, provided that such loss or expense resulted from a mistake of judgment on the part of an Indemnified Party, or from action or inaction, whether or not disclosed, provided that such mistake of judgment, action or inaction does not constitute gross negligence, willful misconduct, fraud, bad faith, breach of this Agreement, breach of fiduciary duty, violation of federal or state securities laws, or for any other intentional or criminal wrongdoing (or such other lesser standard as required by law which would prevent indemnification). In addition, the Partnership shall not provide indemnification hereunder or pursuant to any other agreement for expenses or losses arising from disputes between Indemnified Parties. The Partnership shall advance to the General Partner and may, in its sole discretion (exercised pursuant to its fiduciary duties) advance to any other Indemnified Party reasonable attorneys' fees and other costs and expenses incurred in connection with the defense of any action or proceeding that arises out of such conduct. Each Indemnified Party shall agree that, in the event it receives any such advance, such Indemnified Party shall promptly reimburse the Partnership for such fees, costs and expenses to the extent that it shall be determined that it 15024951_8 8 EFTA00314307 was not entitled to indemnification under this Sec. 2.7. Absent such a prompt reimbursement, in addition to all other remedies available in law or equity, any Capital Account of such Indemnified Party shall be reduced, but not below zero, to the extent of the reimbursable amount. Sec. 2.8 Identity of Securities. Notwithstanding Sec. 9.18 herein, in no event shall any Limited Partner directly or indirectly use for its own investment purposes or disclose to another_person the identity of any Security held by the Partnership; the General Partner shall have the right not to disclose to the Limited Partners the identity of-any or all of the Securities held by the Partnership, except as otherwise provided for by U.S. Generally Accepted Accounting Principles ("GAAP"). Sec. 2.9 Confidentiality, Privacy Policy. Any and all nonpublic personal information received by the Partnership, the General Partner and/or the Manager in the course of business with respect to the Limited Partners who are natural persons, including the information provided to the Partnership by a Limited Partner in the subscription documents, shall not be shared with nonaffiliated third parties which are not service providers to the Partnership, the General Partner and/or the Manager without prior notice to such Limited Partners. Such service providers include but are not limited to the administrator, the auditors and the legal advisors of the Partnership. Notwithstanding the foregoing, the Partnership, the General Partner and/or the Manager may disclose such nonpublic personal information as required by law, including without limitation, the disclosure that may be required by the Uniting and Strengthening America Act by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001 and the rules and regulations promulgated thereunder. If the Partnership chooses to dispose of any Partner's nonpublic personal information that the Partnership is not legally bound to maintain, then the Partnership will do so in a manner that reasonably protects such information from unauthorized access. Such policy shall also apply to the former Limited Partners who are natural persons. ARTICLE III Capital Accounts of Limited Partners and Operation Thereof Sec. 3.1 Definitions. For the purposes of this Agreement, unless the context otherwise requires: (a) The term "Accounting Period" shall mean the following periods: The initial Accounting Period will begin upon the initial opening of the Partnership and each subsequent Accounting Period will begin immediately after the close of the immediately preceding Accounting Period. Each Accounting Period will close at the close of business on the first to occur of (i) the date immediately prior to the effective date of the admission of a new Limited Partner and/or an increase in a Limited Partner's Capital Contribution; (ii) the effective date of any withdrawal by a Limited Partner; (iii) the effective date on which a Special Situation Sub-Account is established; (iv) the effective date of a transfer from a Limited Partner's Special Situation Sub-Account(s) to such Limited Partner's Capital Account; (v) the date when the Partnership dissolves and/or terminates; (vi) the last Business Day of each calendar month, (vii) at such other time as may be required by governmental rules and regulations imposed upon the General Partner and/or the Partnership, or (viii) at such other time as the General Partner may, in its sole discretion (exercised pursuant to its fiduciary duties) determine. 15024951_8 9 EFTA00314308  (b) The term "Aggregate Net Increase" shall mean, with respect to each Limited Partner and any Performance Allocation Period (i) the Aggregate Overall Appreciation with respect to such Performance Allocation Period less (ii) any Management Fees charged to such Limited Partner's Capital Account during such Performance Allocation Period. (c) The term "Aggregate Overall Appreciation" shall mean, with respect to each Limited Partner and any Performance Allocation Period, the excess (if any) of (i) the sum of (A) the aggregate Net Capital Appreciations credited to such Limited Partner's Capital Account during such Performance Allocation Period and (B) the aggregate Special Situation Appreciations with respect to such Limited Partner for such Performance Allocation Period, over (ii) the sum of (A) the aggregate Net Capital Depreciations debited to such Limited Partner's Capital Account during such Performance Allocation Period and (B) the aggregate Special Situation Depreciations with respect to such Limited Partner for such Performance Allocation Period. (d) The term "Aggregate Overall Depreciation" shall mean, with respect to each Limited Partner and any Performance Allocation Period, the excess (if any) of (i) the sum of (A) the aggregate Net Capital Depreciations debited to such Limited Partner's Capital Account during such Performance Allocation Period and (B) the aggregate Special Situation Depreciations with respect to such Limited Partner for such Performance Allocation Period over (ii) the sum of (A) the aggregate Net Capital Appreciations credited to such Limited Partner's Capital Account during such Performance Allocation Period and (B) the aggregate Special Situation Appreciations with respect to such Limited Partner for such Performance Allocation Period. (e) The term "Beginning Value" means, with respect to any Accounting Period, the Net Asset Value of the Partnership's capital at the beginning of such Accounting Period. The term "Book Value" shall mean, (x) with respect to a Special Situation Investment so designated at the time of purchase, the lower of: (i) the original price at which the Special Situation Investment was purchased (adjusted for amortizations of premiums or discounts, reserves, interest payments, principal amortization or other factors as deemed appropriate by the Manager) and (ii) the estimated current fair value of the investment, as determined by the Manager, based on all available information at such time, subject to adjustment pursuant to the provisions of Sec. 3.3(e), and (y) with respect to an existing investment that becomes a Special Situation Investment, the lower of: (i) the fair value of the investment determined by the Manager immediately preceding the time it was determined by the Manager to be a Special Situation Investment and (ii) the estimated current fair value of the investment, as determined by the Manager in its sole discretion (exercised pursuant to its fiduciary duties), based on all available information at such time, and in all instances described in this Sec. 3.1(f) subject to adjustment pursuant to the provisions of Sec. 3.3(e). (g) The term "Business Day" shall mean any day (other than a Saturday or Sunday) when banks in New York are open for business or such other day as determined by the General Partner in its sole discretion (exercised pursuant to its fiduciary duties). (h) The term "Capital Contribution" shall mean the amount of capital contributed to the Partnership by a Limited Partner. (i) The term "Ending Value" means, with respect to any Accounting Period, the Net Asset Value of the Partnership's capital at the end of such Accounting Period, before giving effect to any Management Fees paid or accrued during the Accounting Period. 15024951_S 10 EFTA00314309  (j) The term "Estimated Write Down" shall have the meaning set forth in Sec. 3.3(e). (k) The term "Net Asset Value" shall mean the Partnership's assets at fair value, less its liabilities, at fair value, as calculated pursuant to Sec. 3.7. (I) The term "Net Capital Appreciation" shall mean, with respect to any Accounting Period, the excess, if any, of the Ending Value over the Beginning Value (excluding, in each case and except as otherwise set forth herein, assets and liabilities attributable to Special Situation Sub-Accounts). (m) The term "Net Capital Depreciation" shall mean, with respect to any Accounting Period, the excess, if any, of the Beginning Value over the Ending Value (excluding, in each case and except as otherwise set forth herein, assets and liabilities attributable to Special Situation Sub-Accounts). (n) The term "Performance Allocation" shall have the meaning set forth in Sec. 3.5(b). (o) The term "Performance Allocation Period" shall commence, with respect to a Limited Partner, on the date of admission of such Limited Partner and, thereafter, immediately following the close of the preceding Performance Allocation Period, and will end (i) on the last Business Day of each fiscal year, (ii) with respect to a Limited Partner making a total withdrawal or a partial withdrawal from its Capital Account (with respect to the amount withdrawn), on the Withdrawal Date, (iii) at the General Partner's sole discretion (exercised pursuant to its fiduciary duties), with respect to a Limited Partner transferring all or a portion of its Capital Account (with respect to such transferred amounts), on the date of such transfer, (iv) on the effective date that the General Partner ceases to be the Partnership's general partner, and (v) on the date when the Partnership dissolves and/or terminates. (p) The term "Special Situation Appreciation" shall mean, with respect to any Special Situation Investment and Limited Partner, the product of (i) the excess, if any, of (x) the fair value of such Special Situation Investment or proceeds thereof on the termination of the relevant Special Situation Sub-Account with respect to such Special Situation Investment over (y) the Book Value of such Special Situation Investment, and (ii) the Special Situation Percentage with respect to such Limited Partner which is attributable to such Special Situation Investment. (q) The term "Special Situation Depreciation" shall mean, with respect to any Special Situation Investment and Limited Partner, the product of (i) the Estimated Write Down or Valuation Write Down, if any, with respect to such Special Situation Investment and (ii) the Special Situation Percentage with respect to such Limited Partner which is attributable to such Special Situation Investment. (r) The term "Special Situation Investments" shall mean (i) privately offered securities and other similarly illiquid securities that, in the sole opinion of the Manager, are subject to regulatory or contractual restrictions on disposition; (ii) structured products and over- the-counter derivative transactions that, in the sole opinion of the Manager, cannot be replicated by other securities available in the market, thereby making it (in each case) difficult or impossible to value accurately such securities, products or transactions; or (iii) investments that become illiquid due to regulatory action, bankruptcy or insolvency of an issuer or counterparty, or otherwise. 15024951_S II EFTA00314310  (s) The tenn "SSI Determination Date" shall have the meaning set forth in Sec. 3.3(e). (t) The term "Subsequent Determination Date" shall have the meaning set forth in Sec. 3.3(e). (u) The tenn "Valuation Write Down" shall have the meaning set forth in Sec. 3.3(e). Sec. 3.2 Capital Contributions. (a) Each Partner has made an initial contribution to the Partnership in the amount set forth opposite such Partner's name in the Schedule (the "Initial Capital Contribution"). The minimum initial investment by each new Limited Partner in the Partnership is $1,000,000, subject to the sole discretion of the General Partner (exercised pursuant to its fiduciary duties) to waive, reduce or increase such minimum amount. (b) The General Partner may admit new Limited Partners and permit Limited Partners to make additional capital contributions on a monthly basis as of the first Business Day of any calendar month, or at any other time as determined by the General Partner in its sole discretion (exercised pursuant to its fiduciary duties). The General Partner may modify the frequency of permitted admissions and/or additional contributions. (c) The General Partner has the right, in its sole and absolute discretion, to accept, or to decline to accept, any capital contribution, in whole or in part for any or no reason. Additionally, the General Partner, in its sole discretion (exercised pursuant to its fiduciary duties), may allow a Limited Partner to make in-kind contributions (either partially or fully) to the Partnership. Such contributions shall be valued by the General Partner as of the date of acceptance by the Partnership at their fair market value, net of costs and expenses incurred in accepting such contributions. (d) Nothing contained in this Agreement will prohibit the General Partner, by itself or through its Affiliates or employees, from contributing as a Limited Partner. Sec. 3.3 Capital Accounts; Special Situation Sub-Accounts. (a) A capital account (the "Capital Account") shall be established on the books of the Partnership for each Partner, including the General Partner. The Capital Account of each Partner shall be in an amount equal to such Partner's Initial Capital Contribution, adjusted as hereinafter provided. At the beginning of each Accounting Period, the Capital Account of each Partner shall be increased by the amount of any additional Capital Contributions made by such Partner as of the beginning of such Accounting Period. (b) At the end of each Accounting Period, each Partner's Capital Account shall be (i) increased or decreased by any Net Capital Appreciation or Net Capital Depreciation allocated to such Partner's Capital Account for such Accounting Period pursuant to Sec. 3.5(a); (ii) decreased by the amount, if any, reallocated from a Partner's Capital Account to its Special Situation Sub-Account(s); (iii) increased by the amount, if any, reallocated from such Partner's Special Situation Sub-Account(s) to its Capital Account; and (iv) decreased by (x) the amount of any withdrawals made by, or distributions made to, such Partner as of the end of such Accounting 15024951_S 12 EFTA00314311 Period and (y) the amount of any Management Fees charged to such Capital Account during such Accounting Period pursuant to Sec. 3.5(a). When appropriate, the Capital Account of each Partner also shall be adjusted as provided in Sec. 3.5(b). At the appropriate time, the Capital Account of each Limited Partner that is a foreign individual, foreign corporation, foreign Partnership or other foreign entity (a "Non-U.S. Partner"), also shall be decreased by the amount of such Non-U.S. Partner's respective share of any taxes withheld and paid over by the Partnership pursuant to Sec. 4.2(h). (c) In the event that the Partnership has more than one Class of Partnership interests, separate Capital Accounts shall be maintained to reflect each Limited Partner's interest in each class in the General Partner's discretion. (d) When the Partnership acquires a Special Situation Investment or when an investment previously acquired becomes a Special Situation Investment, a new sub-account (a "Special Situation Sub-Account") will be established for each Limited Partner who is a Limited Partner at such time. With respect to each Special Situation Investment of the Partnership, a Limited Partner's Special Situation Sub-Account will be established in an amount equal to (i) its Special Situation Percentage as of the time that the Partnership acquires such Special Situation Investment or an investment previously acquired becomes a Special Situation Investment, as the case may be, multiplied by (ii) the Book Value of such Special Situation Investment. Upon a determination by the Manager that the applicable Special Situation Investment no longer constitutes a Special Situation Investment or a disposition, in whole or in part, of such Special Situation Investment maintained in the applicable Special Situation Sub-Account of a Limited Partner (a "Liquid Date"), an amount equal to the product of (i) the fair value of such Special Situation Investment held or the proceeds thereof and (ii) the Special Situation Percentage with respect to such Limited Partner which is attributable to such Special Situation Investment shall be reallocated, at such time as the General Partner determines, in consultation with the Manager, from such Special Situation Sub-Account to the Capital Account of such Limited Partner (except as otherwise provided in Sec. 4.2), and, thereafter, such Special Situation Sub-Account shall be terminated. The General Partner will not be allocated a Performance Allocation with respect to any appreciation generated by a Special Situation Investment until the Liquid Date with respect to such Special Situation Investment in accordance with the terms of this Agreement. (e) Notwithstanding anything to the contrary set forth in this Partnership Agreement, the Partnership will hire a third-party valuation agent to determine the Book Value of a Special Situation Investment previously acquired by the Partnership which was subsequently determined by the Manager to be a Special Situation Investment as of the date of such determination (the "SSI Determination Date") if all of the following criteria are met: (A) the fair value of such Special Situation Investment (as determined by the Manager) as of such SSI Determination Date is equal to or exceeds both (x) $5,000,000, and (y) ten percent (10%) of the Partnership's Net Asset Value as of such SSI Determination Date; and (B) the estimated accrued, but unallocated, Performance Allocation as of such SSI Determination Date is equal to or exceeds one percent (1.0%) of the Partnership's Net Asset Value as of such date. In addition, at the end of each calendar quarter (each such date a "Subsequent Determination Date"), the Manager shall estimate the fair value of each Special Situation Investment. If such estimated fair value of such Special Situation Investment is less than the Book Value of such Special Situation Investment, the Book Value of such Special Situation Investment shall be decreased to such estimated fair value as of such Subsequent Determination Date (the amount of such decrease, an "Estimated Write Down"). 15024951_S 13 EFTA00314312  Further, notwithstanding anything to the contrary set forth in this Partnership Agreement, the Partnership will hire a third-party valuation agent to determine the fair value of any Special Situation Investment as of the end of the fiscal year following the anniversary of the acquisition date or the SSI Determination Date, as applicable, with respect to such Special Situation Investment, and as of each subsequent fiscal year end thereafter, if all of the following criteria are met: (A) the fair value of such Special Situation Investment (as determined by the Manager