FORM OF TRANSFER AND ASSUMPTION AGREEMENT
Relating to Limited Partnership Interests in Harrowgate Private Equity Fund V LP
A Delaware Limited Partnership
Reference is made to the Agreement of Limited Partnership of Harrowgate Private Equity Fund V LP, a Delaware limited partnership (the "Partnership" or the "Fund"), whose sole general partner is Harrowgate Fund V GP LLC, a Delaware limited liability company (the "General Partner").
[Form — to be completed upon each approved transfer]
Dated as of [●], 20[●]
TABLE OF CONTENTS
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TRANSFER AND ASSUMPTION AGREEMENT
This TRANSFER AND ASSUMPTION AGREEMENT (this "Agreement") is entered into as of [●], 20[●], by and among the following parties:
TRANSFEROR: [Name of Transferor] (the "Transferor"), an existing limited partner of Harrowgate Private Equity Fund V LP, with its principal address at [●];
TRANSFEREE: [Name of Transferee] (the "Transferee"), with its principal address at [●]; and
GENERAL PARTNER / CONSENTING PARTY: Harrowgate Fund V GP LLC, a Delaware limited liability company and the sole general partner of Harrowgate Private Equity Fund V LP, having its principal office at 1200 Concord Pike, Suite 600, Wilmington, DE 19803 (acting through its sole member, Harrowgate Capital Partners LLC) (the "General Partner").
The Transferor, the Transferee, and the General Partner are each referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS:
A. Harrowgate Private Equity Fund V LP (the "Partnership") is a Delaware limited partnership formed pursuant to a Certificate of Limited Partnership filed with the Secretary of State of the State of Delaware on [●], 2025 and governed by that certain Agreement of Limited Partnership dated as of [●], 2025 (as amended, restated, supplemented, or otherwise modified from time to time, the "Partnership Agreement"). The general partner of the Partnership is Harrowgate Fund V GP LLC, a Delaware limited liability company (the "General Partner"), which acts through its sole member, Harrowgate Capital Partners LLC, a Delaware limited liability company;
B. The Transferor is a limited partner of the Partnership and holds a limited partnership interest representing a Capital Commitment of $[●] (the "Interest"), of which $[●] has been funded as of the date hereof (the "Funded Commitment") and $[●] remains unfunded as of the date hereof (the "Unfunded Commitment"). The Transferor's Interest is evidenced by the books and records of the Partnership as maintained by Pinnacle Fund Services LLC, the Fund's administrator;
C. The Transferor desires to transfer, assign, and convey to the Transferee [all / a portion representing $[●] of Capital Commitment] of the Interest (the "Transferred Interest"), and the Transferee desires to acquire the Transferred Interest from the Transferor and assume all obligations of the Transferor with respect thereto, on the terms and subject to the conditions set forth herein;
D. Article [●] of the Partnership Agreement sets forth certain conditions and restrictions on the transfer of limited partnership interests in the Partnership, including the requirement that the General Partner consent in writing to any such transfer, which consent may be withheld in the General Partner's sole and absolute discretion. Article [●] further provides for compliance with applicable securities laws, the maintenance of the Partnership's exclusion from registration under the Investment Company Act of 1940, and such other conditions as the General Partner may reasonably impose; and
E. The General Partner, having reviewed the proposed transfer and the qualifications of the Transferee, has consented to the transfer of the Transferred Interest on the terms and conditions set forth herein, subject to the satisfaction (or waiver by the General Partner) of all conditions precedent set forth in Article V of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms.
Capitalized terms used but not otherwise defined in this Agreement shall have the respective meanings ascribed to such terms in the Partnership Agreement. In addition, the following terms shall have the meanings set forth below when used in this Agreement:
"Applicable Law" means all applicable federal, state, local, and foreign laws, statutes, rules, regulations, ordinances, codes, and orders of any governmental authority, including, without limitation, the Securities Act of 1933, as amended (the "Securities Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Investment Company Act of 1940, as amended (the "Investment Company Act"), the Investment Advisers Act of 1940, as amended, the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the Internal Revenue Code of 1986, as amended (the "Code"), and all applicable state securities or "blue sky" laws, anti-money laundering laws, and sanctions regulations.
"Funded Commitment" means the portion of the Capital Commitment associated with the Transferred Interest that has been called by the General Partner and funded by the Transferor as of the Transfer Date, as set forth in Schedule A hereto and as confirmed by Pinnacle Fund Services LLC.
"Investment Company Act" means the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder.
"Partnership Agreement" means the Agreement of Limited Partnership of Harrowgate Private Equity Fund V LP, dated as of [●], 2025, as amended, restated, supplemented, or otherwise modified from time to time, as defined in Recital A.
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
"Transfer Date" means the effective date of the transfer of the Transferred Interest from the Transferor to the Transferee, as determined in accordance with Section 2.2 of this Agreement.
"Transferred Interest" means the limited partnership interest in the Partnership being transferred from the Transferor to the Transferee pursuant to this Agreement, as more particularly described in the Recitals and in Schedule A attached hereto and incorporated herein by this reference.
"Unfunded Commitment" means the portion of the Capital Commitment associated with the Transferred Interest that remains uncalled and unfunded as of the Transfer Date, as set forth in Schedule A hereto and as confirmed by Pinnacle Fund Services LLC.
ARTICLE II — TRANSFER AND ASSUMPTION
Section 2.1 — Transfer of Interest.
Subject to the terms and conditions of this Agreement and the Partnership Agreement, the Transferor hereby irrevocably transfers, assigns, conveys, and delivers to the Transferee, and the Transferee hereby accepts from the Transferor, all of the Transferor's right, title, and interest in and to the Transferred Interest, free and clear of all liens, encumbrances, pledges, security interests, and adverse claims of any kind (other than those arising under the Partnership Agreement or the subscription credit facility with Ashford National Bank, N.A., as agent, as described in the Partnership Agreement). The Transferred Interest includes, without limitation, all rights to allocations of income, gain, loss, deduction, and credit, and all rights to distributions and other economic benefits attributable to the Transferred Interest from and after the Transfer Date, including the Transferor's rights to receive distributions under the European-style (whole-fund) waterfall provisions of the Partnership Agreement. For the avoidance of doubt, the transfer of the Transferred Interest shall include the transfer of the Unfunded Commitment associated therewith, and the Transferee shall be obligated to fund such Unfunded Commitment in accordance with the terms of the Partnership Agreement from and after the Transfer Date.
Section 2.2 — Effective Date.
The transfer contemplated by this Agreement shall become effective on the date on which all conditions precedent set forth in Article V of this Agreement have been satisfied in full or waived by the General Partner in its sole discretion (such date, the "Transfer Date"). Until the Transfer Date, the Transferor shall retain all rights and obligations with respect to the Transferred Interest, including the obligation to fund any capital calls issued by the General Partner and the right to receive any distributions declared by the General Partner, in each case with respect to the Transferred Interest. The General Partner shall promptly notify both the Transferor and the Transferee in writing upon the occurrence of the Transfer Date. If all conditions precedent have not been satisfied or waived within sixty (60) calendar days following the date of this Agreement (or such later date as the Parties may agree in writing), either Party may terminate this Agreement by written notice to the other Parties, and this Agreement shall thereupon be of no further force or effect, except that the provisions of Section 7.1 (Transfer Expenses), Section 8.1 (Governing Law), Section 8.2 (Dispute Resolution), and Section 8.10 (Confidentiality) shall survive such termination.
Section 2.3 — Assumption of Obligations.
From and after the Transfer Date, the Transferee hereby irrevocably assumes, and agrees to be bound by and to perform and discharge in a timely manner, all obligations and liabilities of the Transferor under the Partnership Agreement with respect to the Transferred Interest, including without limitation:
(a) The obligation to fund all capital calls with respect to the Unfunded Commitment associated with the Transferred Interest, to the extent called by the General Partner after the Transfer Date, in accordance with the notice and timing provisions of the Partnership Agreement;
(b) All obligations relating to the return of distributions previously received (including any interim clawback or true-up obligations), clawback obligations with respect to carried interest or other incentive allocations, and indemnification obligations, in each case as set forth in the Partnership Agreement and applicable to the Transferred Interest;
(c) All obligations with respect to confidentiality, non-solicitation, and restrictions on transfer or further assignment contained in the Partnership Agreement;
(d) All obligations with respect to default provisions set forth in the Partnership Agreement, including, without limitation, the consequences of a failure to fund capital calls when due (including the potential reduction of the Transferee's Capital Commitment, forfeiture of a portion of the Transferee's Interest, and forced sale of the Transferee's Interest at a discount, as described in the Partnership Agreement); and
(e) All other obligations and liabilities of a limited partner under the Partnership Agreement, whether arising before, on, or after the Transfer Date, to the extent attributable to the Transferred Interest and not expressly retained by the Transferor pursuant to Section 2.4 below.
Section 2.4 — Release of Transferor.
From and after the Transfer Date, the Transferor shall be released from all obligations under the Partnership Agreement with respect to the Transferred Interest arising after the Transfer Date, and the General Partner and the Partnership hereby release and discharge the Transferor from such obligations, subject to the following:
(a) The Transferor shall remain liable for any and all obligations attributable to the Transferred Interest that arose or are attributable to periods prior to the Transfer Date, including, without limitation, any obligation to return distributions or clawback amounts attributable to distributions received by the Transferor prior to the Transfer Date or allocable to periods prior to the Transfer Date, any indemnification obligations arising from events occurring prior to the Transfer Date, and any obligations arising under the subscription credit facility with Ashford National Bank, N.A. that relate to the period prior to the Transfer Date;
(b) In no event shall the transfer of the Transferred Interest release the Transferor from any liability, obligation, or claim arising from or relating to the Transferor's fraud, willful misconduct, gross negligence, or breach of any representation, warranty, covenant, or obligation under the Partnership Agreement or this Agreement occurring prior to the Transfer Date; and
(c) The Transferor acknowledges and agrees that, to the extent the Transferor retains any interest in the Partnership following a partial transfer, the Transferor shall remain subject to all terms and conditions of the Partnership Agreement with respect to such retained interest.
Section 2.5 — Joinder to Partnership Agreement.
The Transferee hereby agrees to be admitted to the Partnership as a limited partner with respect to the Transferred Interest and to be bound by and to comply with all terms, provisions, covenants, conditions, and restrictions of the Partnership Agreement as a limited partner, as if the Transferee were an original signatory thereto. This Agreement, together with the Joinder Agreement attached hereto as Exhibit A, shall constitute a joinder to the Partnership Agreement for all purposes, and the execution and delivery of this Agreement by the Transferee shall be deemed to constitute the Transferee's execution and delivery of the Partnership Agreement. The General Partner shall update the books and records of the Partnership and the register of limited partners to reflect the admission of the Transferee as a limited partner effective as of the Transfer Date.
Section 2.6 — Side Letter Provisions.
Unless otherwise expressly agreed in writing by the General Partner, any side letter agreements, rights, concessions, or accommodations that are personal to the Transferor (including, without limitation, fee discounts, co-investment rights, advisory committee seats, reporting enhancements, or other preferential terms) shall not transfer to the Transferee and shall terminate with respect to the Transferred Interest upon the Transfer Date. The Transferee acknowledges that any Most Favored Nation ("MFN") election rights applicable to the Transferor shall not automatically transfer to the Transferee. The Transferee's MFN eligibility, if any, shall be determined by the General Partner in its sole discretion based on the Transferee's Capital Commitment (the minimum Capital Commitment required for MFN eligibility under the Partnership Agreement is $50,000,000) and the terms and conditions of the Partnership Agreement. Nothing in this Section 2.6 shall prevent the Transferee from negotiating a separate side letter agreement with the General Partner, subject to the General Partner's approval in its sole discretion.
ARTICLE III — CONSIDERATION
Section 3.1 — Purchase Price.
In consideration for the transfer and assignment of the Transferred Interest by the Transferor to the Transferee, the Transferee shall pay to the Transferor the sum of $[●] (the "Purchase Price"), payable by wire transfer of immediately available funds in United States dollars on or prior to the Transfer Date to such bank account as the Transferor shall designate in writing to the Transferee not less than three (3) business days prior to the Transfer Date. The allocation of the Purchase Price between the Funded Commitment and the Unfunded Commitment associated with the Transferred Interest shall be as set forth in Schedule A attached hereto, and the Parties agree that such allocation shall be binding on the Parties for all purposes, including U.S. federal, state, and local income tax purposes, unless otherwise required by Applicable Law. The Transferor acknowledges that neither the Partnership nor the General Partner is a party to the purchase and sale transaction between the Transferor and the Transferee, and that neither the Partnership nor the General Partner makes any representation or warranty as to the fairness or adequacy of the Purchase Price.
Section 3.2 — Adjustments.
The Parties shall make such equitable adjustments to the Purchase Price as may be necessary to account for any capital calls funded, distributions received, or allocations of income, gain, loss, deduction, or credit made with respect to the Transferred Interest between the date of this Agreement and the Transfer Date. Any such adjustments shall be computed in good faith by the Parties, with reference to the books and records of the Partnership as maintained by Pinnacle Fund Services LLC, and shall be settled by wire transfer of immediately available funds within ten (10) business days following the Transfer Date. In the event the Parties are unable to agree upon the amount of any adjustment, the determination of the General Partner (acting in consultation with Pinnacle Fund Services LLC) shall be final and binding on the Parties, absent manifest error.
ARTICLE IV — REPRESENTATIONS AND WARRANTIES
Section 4.1 — Representations and Warranties of the Transferor.
The Transferor hereby makes the following representations and warranties to the Transferee and the General Partner as of the date hereof and as of the Transfer Date:
(a) Authority. The Transferor has full power, authority, and legal capacity to execute, deliver, and perform this Agreement and to transfer the Transferred Interest as contemplated hereby. The execution, delivery, and performance of this Agreement by the Transferor has been duly authorized by all necessary action on the part of the Transferor (including, without limitation, any required approvals of the Transferor's board of directors, partners, members, trustees, investment committee, or other governing body, as applicable). This Agreement constitutes the legal, valid, and binding obligation of the Transferor, enforceable against the Transferor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws affecting creditors' rights generally and to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).
(b) Ownership. The Transferor is the sole legal and beneficial owner of the Transferred Interest, and the Transferred Interest is free and clear of all liens, encumbrances, pledges, hypothecations, security interests, charges, options, rights of first refusal, and adverse claims of any kind or nature whatsoever (collectively, "Liens"), other than (i) those arising under the Partnership Agreement, (ii) those arising under or in connection with the subscription credit facility with Ashford National Bank, N.A., as administrative agent, and (iii) restrictions on transfer imposed by Applicable Law. No person other than the Transferor has any right, title, or interest in or to the Transferred Interest, and there are no outstanding agreements, options, warrants, or commitments of any kind relating to the issuance, sale, or transfer of the Transferred Interest, other than this Agreement.
(c) No Violations. The execution and delivery of this Agreement by the Transferor and the consummation of the transfer of the Transferred Interest will not: (i) violate any Applicable Law; (ii) conflict with, result in a breach of, or constitute a default under, any agreement, instrument, order, judgment, or decree to which the Transferor is a party or by which the Transferor or the Transferred Interest is bound; or (iii) result in the creation or imposition of any Lien on the Transferred Interest (other than as described in Section 4.1(b) above).
(d) No Litigation. There is no pending or, to the Transferor's knowledge, threatened action, suit, litigation, claim, arbitration, investigation, or proceeding before any court, governmental authority, or arbitrator that would (i) impair the Transferor's ability to execute and deliver this Agreement or to consummate the transfer of the Transferred Interest, or (ii) affect the Transferred Interest or any of the Transferor's rights therein.
(e) Tax Matters. The Transferor has received independent tax advice from its own tax advisors regarding the consequences of the transfer contemplated by this Agreement and is not relying on the Partnership, the General Partner, Harrowgate Capital Partners LLC, or Calderwood & Harkness LLP for any tax advice in connection with the transfer. The Transferor acknowledges that the transfer of the Transferred Interest may result in the recognition of taxable income or gain by the Transferor and that the Transferor is solely responsible for any tax liabilities arising from the transfer.
(f) Partnership Agreement Compliance. The transfer of the Transferred Interest complies with all transfer restrictions, conditions, and requirements set forth in the Partnership Agreement, including, without limitation, any required holding period, right of first refusal, tag-along or drag-along provisions, minimum transfer thresholds, and notice requirements. The Transferor has satisfied all prerequisites to transfer imposed by the Partnership Agreement, subject only to the conditions precedent set forth in Article V of this Agreement.
Section 4.2 — Representations and Warranties of the Transferee.
The Transferee hereby makes the following representations and warranties to the Transferor and the General Partner as of the date hereof and as of the Transfer Date:
(a) Authority. The Transferee has full power, authority, and legal capacity to execute, deliver, and perform this Agreement and to assume all obligations of the Transferor with respect to the Transferred Interest. The execution, delivery, and performance of this Agreement by the Transferee has been duly authorized by all necessary action on the part of the Transferee (including, without limitation, any required approvals of the Transferee's board of directors, partners, members, trustees, investment committee, or other governing body, as applicable). This Agreement constitutes the legal, valid, and binding obligation of the Transferee, enforceable against the Transferee in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws affecting creditors' rights generally and to general principles of equity.
(b) Qualified Purchaser. The Transferee is a "qualified purchaser" as such term is defined in Section 2(a)(51) of the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder. The Transferee understands that the Partnership relies on the "qualified purchaser" status of each limited partner in order to maintain the Partnership's exclusion from the definition of "investment company" under Section 3(c)(7) of the Investment Company Act, and that the General Partner's consent to the transfer is expressly conditioned upon the Transferee's status as a qualified purchaser.
(c) Accredited Investor. The Transferee is an "accredited investor" as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended. The Transferee meets one or more of the categories of accredited investor set forth in Rule 501(a) and can provide evidence of its accredited investor status upon request by the General Partner.
(d) Investment Intent / Securities Law Compliance. The Transferee is acquiring the Transferred Interest for its own account, for investment purposes only, and not with a view to the public distribution or resale thereof in violation of the Securities Act or any applicable state securities laws. The Transferee understands and acknowledges that:
(i) The Transferred Interest has not been registered under the Securities Act and may not be offered, sold, transferred, pledged, hypothecated, or otherwise disposed of except in compliance with the Securities Act and applicable state securities laws;
(ii) The offering of limited partnership interests in the Partnership was conducted under Regulation D, Rule 506(b), as a private placement exempt from the registration requirements of the Securities Act, and the Transferred Interest is subject to significant restrictions on transferability as set forth in the Partnership Agreement and under Applicable Law;
(iii) There is no public market for the Transferred Interest, and no such market is expected to develop, and the Transferee may not be able to liquidate the Transferred Interest readily; and
(iv) Any legend or restrictive notation that may appear on the books and records of the Partnership with respect to the Transferred Interest shall be subject to the transfer restrictions set forth in the Partnership Agreement.
(e) Sophistication. The Transferee is a sophisticated investor with substantial experience evaluating, structuring, and investing in private equity funds, limited partnership interests, and other alternative investment vehicles, and is capable of evaluating the merits and risks of an investment in the Transferred Interest. The Transferee has had the opportunity to ask questions of and receive answers and information from the General Partner, Harrowgate Capital Partners LLC, and their representatives concerning the Partnership, its investments, and the terms and conditions of the Partnership Agreement, and has been furnished with or has had access to such additional information as it has requested. The Transferee has reviewed the Partnership's Confidential Private Placement Memorandum (dated [●], 2025), the Partnership Agreement, the most recent quarterly and annual reports of the Partnership, and such other documents and information as it deems necessary or appropriate to make an informed investment decision regarding the acquisition of the Transferred Interest.
(f) Financial Capacity. The Transferee has sufficient financial resources, liquidity, and net worth to fund the Unfunded Commitment associated with the Transferred Interest (being $[●] as of the date hereof, subject to adjustment as of the Transfer Date) and to meet all capital call obligations when due under the Partnership Agreement, and to bear the economic risk of the loss of its entire investment in the Transferred Interest. The Transferee's overall commitment to illiquid investments is not disproportionate to its net worth and liquid assets, and the Transferee has adequate means of providing for its current needs and personal contingencies and has no need for liquidity in its investment in the Partnership.
(g) ERISA Status. The Transferee hereby represents and certifies its ERISA status by checking the applicable box below:
The Transferee is NOT a "benefit plan investor" as defined in 29 C.F.R. § 2510.3-101(f)(2), as modified by Section 3(42) of ERISA.
The Transferee IS a "benefit plan investor" as defined in 29 C.F.R. § 2510.3-101(f)(2), as modified by Section 3(42) of ERISA (if this box is checked, the Transferee must complete the ERISA certification in Schedule B and provide such additional detail as the General Partner may reasonably request).
The Transferee acknowledges and understands that the Partnership intends to limit the aggregate participation of "benefit plan investors" (as such term is defined in the Department of Labor regulations) to less than twenty-five percent (25%) of each class of equity interests in the Partnership in order to avoid plan asset treatment under Title I of ERISA and Section 4975 of the Code. The General Partner may refuse consent to the transfer of the Transferred Interest if, in the General Partner's sole determination, such transfer would cause the Partnership to exceed the twenty-five percent (25%) benefit plan investor threshold.
(h) AML / KYC / OFAC Compliance.
(i) The Transferee is not, and is not acting on behalf of, directly or indirectly, any person or entity that is: (A) listed on the Specially Designated Nationals and blocked Persons List ("SDN List") maintained by the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC"); (B) listed on the Sectoral Sanctions Identifications List, the Foreign Sanctions Evaders List, or any other restricted persons list maintained by OFAC or any other U.S. governmental authority; (C) located in, organized under the laws of, a national or resident of, or owned fifty percent (50%) or more, directly or indirectly, by any person or entity located in, organized under the laws of, or a national or resident of, a country or territory that is the subject of comprehensive U.S. economic sanctions (including, as of the date hereof, Cuba, Iran, North Korea, Syria, the Crimea, Donetsk, and Luhansk regions of Ukraine, and any other country or region designated by OFAC from time to time); or (D) otherwise prohibited from investing in the Partnership under applicable anti-money laundering laws, counter-terrorism financing laws, or sanctions laws and regulations of the United States, the European Union, the United Kingdom, or any other applicable jurisdiction.
(ii) The Transferee shall provide completed know-your-customer ("KYC") and anti-money laundering ("AML") documentation, including the Partnership's Investor Suitability Questionnaire and KYC Form, to Pinnacle Fund Services LLC (the Fund's administrator, with offices at [●]) for verification prior to the Transfer Date. The Transferee shall cooperate fully and promptly with any reasonable requests for additional information or documentation from the General Partner, Pinnacle Fund Services LLC, or their agents in connection with AML/KYC verification procedures.
(iii) Source of Funds Certification. The Transferee hereby certifies that all funds used to pay the Purchase Price and to fund future capital calls with respect to the Transferred Interest are and will be derived from lawful sources and do not and will not constitute the proceeds of any illegal activity, including, without limitation, drug trafficking, terrorism, money laundering, or tax evasion. The Transferee has established and maintains an anti-money laundering compliance program that meets the requirements of applicable law.
(i) Governmental / Sovereign Investor Status. The Transferee represents whether it is a governmental plan, governmental entity, sovereign wealth fund, or similar public body by checking the applicable box below:
The Transferee is NOT a governmental plan, governmental entity, or sovereign wealth fund.
The Transferee IS a governmental plan, governmental entity, or sovereign wealth fund (if this box is checked, additional transfer restrictions and regulatory disclosures may apply, and the Transferee shall provide such additional information as the General Partner may reasonably request).
(j) FATCA / CRS. The Transferee shall provide to the General Partner, contemporaneously with the execution of this Agreement, a properly completed and executed: (i) IRS Form W-9 (if the Transferee is a U.S. person for U.S. federal income tax purposes); or (ii) the applicable IRS Form W-8 (W-8BEN, W-8BEN-E, W-8IMY, or W-8ECI, as the case may be) (if the Transferee is a non-U.S. person for U.S. federal income tax purposes), including any applicable treaty claims and certifications regarding effectively connected income and FATCA status. In addition, the Transferee shall provide a completed CRS self-certification form for reporting under the Common Reporting Standard, as applicable. The Transferee shall promptly provide updated tax forms to the General Partner upon the occurrence of any change in circumstances that makes any information on a previously delivered form incorrect.
(k) Minimum Commitment. The Transferred Interest being acquired by the Transferee represents a Capital Commitment of no less than $10,000,000, which is the minimum limited partner Capital Commitment under the Partnership Agreement, unless the General Partner has waived such minimum in writing. The Transferee acknowledges that the General Partner has no obligation to waive the minimum commitment requirement and may require strict compliance therewith as a condition to its consent to the transfer.
(l) Tax Identification. The Transferee shall provide a valid U.S. taxpayer identification number (if the Transferee is a U.S. person) or foreign tax identification number (if the Transferee is a non-U.S. person), as applicable, on the signature page hereof and on all applicable tax forms delivered to the General Partner.
(m) No Public Solicitation. The Transferee was not solicited to acquire the Transferred Interest by any form of general solicitation or general advertising (including, without limitation, advertisements, articles, notices, or other communications published in any newspaper, magazine, or similar medium or broadcast over television, radio, or the internet, or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising).
Section 4.3 — Representations and Warranties of the General Partner.
The General Partner hereby represents and warrants to the Transferor and the Transferee as of the date hereof and as of the Transfer Date that: (a) the General Partner has full power and authority to consent to the transfer of the Transferred Interest pursuant to the terms of the Partnership Agreement and to execute and deliver this Agreement; (b) as of the date hereof, no event has occurred that, to the General Partner's knowledge, would prohibit the transfer of the Transferred Interest under the Partnership Agreement, subject to the satisfaction (or waiver) of the conditions precedent set forth in Article V of this Agreement; and (c) the execution and delivery of this Agreement by the General Partner has been duly authorized by all necessary action on the part of the General Partner and its sole member, Harrowgate Capital Partners LLC. The General Partner makes no representation or warranty to the Transferor or the Transferee as to the value of the Transferred Interest, the financial condition of the Partnership, or the performance of the Partnership's investments.
ARTICLE V — CONDITIONS PRECEDENT TO TRANSFER
Section 5.1 — Conditions to Obligations of All Parties.
The obligation of the Parties to consummate the transfer of the Transferred Interest is subject to the satisfaction (or waiver by the General Partner in accordance with Section 5.2) of each of the following conditions precedent on or prior to the Transfer Date:
(a) General Partner Consent. The General Partner (Harrowgate Fund V GP LLC) shall have provided its written consent to the transfer of the Transferred Interest, which consent may be withheld in the General Partner's sole and absolute discretion for any reason or no reason whatsoever.
(b) Execution of Agreement. The General Partner (or its designated counsel, Calderwood & Harkness LLP) shall have received this Agreement, duly executed and delivered by both the Transferor and the Transferee, together with all schedules and exhibits hereto.
(c) Legal Opinion. The General Partner shall have received a legal opinion from counsel to the Transferee (which counsel shall be reasonably acceptable to the General Partner), or such other evidence as the General Partner may deem satisfactory in its sole discretion, to the effect that:
(i) The transfer of the Transferred Interest is exempt from the registration requirements of the Securities Act and applicable state securities laws;
(ii) The transfer will not cause the Partnership to be required to register as an "investment company" under the Investment Company Act of 1940 (by confirming the Transferee's status as a "qualified purchaser" within the meaning of Section 2(a)(51) of the Investment Company Act and, accordingly, that the Partnership's exclusion from the definition of "investment company" under Section 3(c)(7) thereof will be maintained following the transfer); and
(iii) The transfer will not cause a termination of the Partnership for U.S. federal income tax purposes under Section 708 of the Internal Revenue Code of 1986, as amended (to the extent Section 708 remains applicable or any successor provision imposes similar requirements).
(d) KYC/AML Verification. Pinnacle Fund Services LLC (the Fund's administrator) shall have completed its know-your-customer and anti-money laundering verification procedures with respect to the Transferee and shall have confirmed to the General Partner that the Transferee has satisfied all applicable KYC/AML requirements.
(e) Required Documentation. The General Partner shall have received from the Transferee all documentation required by the Partnership Agreement and by this Agreement, including, without limitation, a completed Investor Suitability Questionnaire, the applicable IRS tax form (Form W-9 or Form W-8, as applicable), FATCA/CRS self-certification forms, the ERISA and regulatory certifications set forth in Schedule B, and the Joinder Agreement attached as Exhibit A.
(f) Benefit Plan Investor Threshold. The General Partner shall have confirmed, based on the certifications provided by the Transferee and the records of the Partnership, that the transfer will not cause the Partnership to exceed the twenty-five percent (25%) benefit plan investor threshold under 29 C.F.R. § 2510.3-101(f), as modified by Section 3(42) of ERISA, for any class of equity interests in the Partnership.
(g) Payment of Transfer Expenses. The Transferor and/or the Transferee (as applicable under Section 7.1) shall have paid, or made arrangements satisfactory to the General Partner for the payment of, all transfer expenses as described in Section 7.1.
(h) No Default. No default or event of default by the Transferor under the Partnership Agreement shall be outstanding as of the Transfer Date, including, without limitation, no unfunded capital call obligations that are past due, and no event shall have occurred that, with notice, the passage of time, or both, would constitute such a default.
(i) Pre-Transfer Rights. All rights of first refusal, tag-along rights, or other pre-transfer rights of the General Partner or other limited partners of the Partnership with respect to the Transferred Interest, as set forth in the Partnership Agreement, shall have been complied with, waived, or expired without exercise, in accordance with the procedures set forth in the Partnership Agreement.
(j) Subscription Credit Facility Lender Consent. Ashford National Bank, N.A. (in its capacity as administrative agent and lender under the subscription credit facility for the Partnership) shall have confirmed in writing that the transfer of the Transferred Interest will not (i) result in a borrowing base deficiency under the subscription credit facility, (ii) constitute an event of default under the subscription credit facility, or (iii) otherwise impair the Partnership's borrowing capacity. To the extent required under the terms of the subscription credit facility, any necessary lender consent to the transfer shall have been obtained.
Section 5.2 — Waiver.
Any one or more of the conditions set forth in Section 5.1 may be waived in writing by the General Partner in its sole and absolute discretion. No waiver of any condition shall be deemed a waiver of any other condition or a waiver of the same condition with respect to any subsequent transfer or transaction.
ARTICLE VI — TAX MATTERS
Section 6.1 — Tax Allocations.
The Transferor and the Transferee agree that all items of income, gain, loss, deduction, and credit allocable to the Transferred Interest for the fiscal year of the Partnership in which the Transfer Date occurs shall be allocated between the Transferor and the Transferee in accordance with Section 706(d) of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder, using the interim closing of the books method, effective as of the Transfer Date. Notwithstanding the foregoing, the General Partner may, in its reasonable discretion, determine to use such other method of allocation permitted by Section 706(d) and the applicable Treasury Regulations (including the proration method) as the General Partner deems appropriate under the circumstances. The Transferor and the Transferee agree to be bound by the General Partner's determination with respect to the method of allocation and shall report all items of income, gain, loss, deduction, and credit on their respective tax returns in a manner consistent with such determination.
Section 6.2 — Tax Returns and K-1s.
The Partnership shall provide IRS Schedule K-1 (Form 1065) to each of the Transferor and the Transferee reflecting allocations of items of income, gain, loss, deduction, and credit for their respective portions of the fiscal year of the Partnership (the Partnership's fiscal year being the calendar year ending December 31) in which the Transfer Date occurs. The Transferor and the Transferee shall each cooperate fully with the General Partner, Pinnacle Fund Services LLC, and the Partnership's independent auditor, Caldwell, Fitch & Hartley LLP, in connection with the preparation of tax returns, information returns, and any tax audit, administrative proceeding, or litigation involving the Partnership or the Transferred Interest. Without limiting the foregoing, each of the Transferor and the Transferee shall promptly provide to the General Partner or its designated representatives such information and documentation as may be reasonably necessary for the preparation of the Partnership's tax returns, including any information required to comply with the partnership audit rules under Sections 6221 through 6241 of the Code (the "Centralized Partnership Audit Regime").
Section 6.3 — Transfer Taxes.
All transfer, stamp, documentary, recording, and similar taxes, duties, fees, and charges imposed by any governmental authority on or in connection with the transfer of the Transferred Interest (collectively, "Transfer Taxes") shall be borne by [the Transferor / the Transferee / equally by the Transferor and the Transferee] [to be specified by the Parties]. The Party or Parties responsible for payment of Transfer Taxes shall timely file or cause to be filed all required returns and reports with respect thereto and shall indemnify the other Party or Parties against any liability for Transfer Taxes and any related interest, penalties, or additions to tax.
Section 6.4 — Section 754 Election.
The Transferee acknowledges that the Partnership [has / has not] made an election under Section 754 of the Internal Revenue Code of 1986, as amended. If such election has been made (or is subsequently made), any adjustment to the basis of Partnership assets under Section 743(b) of the Code resulting from the transfer of the Transferred Interest shall be for the sole account of the Transferee and shall not affect the capital accounts or allocations of any other partner in the Partnership. The Transferee shall provide the General Partner with all information reasonably necessary to calculate any Section 743(b) adjustment, including, without limitation, the Purchase Price paid by the Transferee for the Transferred Interest and the allocation thereof as set forth in Schedule A. The Transferee acknowledges that the General Partner may, in its discretion, engage Caldwell, Fitch & Hartley LLP or another qualified tax advisor to compute the Section 743(b) adjustment, and that the cost of such computation may be charged to the Transferee.
ARTICLE VII — EXPENSES; INDEMNIFICATION
Section 7.1 — Transfer Expenses.
All reasonable out-of-pocket costs and expenses incurred by the General Partner, Harrowgate Capital Partners LLC, and the Partnership in connection with the evaluation, negotiation, documentation, and consummation of the transfer of the Transferred Interest (collectively, "Transfer Expenses") shall be borne by [the Transferor and the Transferee, jointly and severally / the Transferee solely] [to be specified]. Transfer Expenses include, without limitation: (a) legal fees and disbursements of Calderwood & Harkness LLP incurred in connection with the review and negotiation of this Agreement, the preparation of required legal opinions, and related matters; (b) fund administration costs and fees of Pinnacle Fund Services LLC incurred in connection with KYC/AML verification, investor onboarding, capital account transfer calculations, and updating the books and records of the Partnership; (c) any lender consent fees, processing fees, or related costs charged by Ashford National Bank, N.A. in connection with the subscription credit facility; and (d) any other reasonable costs and expenses incurred by the General Partner or the Partnership as a result of or in connection with the transfer. The General Partner shall provide the responsible Party or Parties with an invoice or summary of Transfer Expenses within thirty (30) days following the Transfer Date, and payment shall be due within ten (10) business days of receipt of such invoice.
Section 7.2 — Indemnification by Transferee.
The Transferee hereby agrees to indemnify, defend, and hold harmless the Partnership, the General Partner, Harrowgate Capital Partners LLC, and their respective partners, members, officers, directors, managers, employees, agents, and representatives (each, an "Indemnified Party") from and against any and all losses, claims, damages, liabilities, costs, and expenses (including, without limitation, reasonable attorneys' fees and disbursements, court costs, expert witness fees, and costs of investigation and remediation) (collectively, "Losses") arising out of, relating to, or resulting from:
(a) Any breach or inaccuracy of any representation or warranty made by the Transferee in this Agreement, whether as of the date hereof or as of the Transfer Date;
(b) Any failure by the Transferee to perform or discharge any of its obligations, covenants, or agreements under this Agreement or under the Partnership Agreement following the Transfer Date, including, without limitation, any failure to fund capital calls when due;
(c) Any claim, action, or proceeding by any third party (including any governmental authority) alleging that the transfer of the Transferred Interest violates any applicable securities laws, anti-money laundering laws, sanctions laws, or other Applicable Law, to the extent such claim arises from or is attributable to any act, omission, misrepresentation, or status of the Transferee; and
(d) Any Transfer Taxes for which the Transferee is responsible under Section 6.3 that are not timely paid by the Transferee.
The indemnification obligations of the Transferee under this Section 7.2 shall survive the Transfer Date and the consummation of the transactions contemplated by this Agreement.
Section 7.3 — Indemnification by Transferor.
The Transferor hereby agrees to indemnify, defend, and hold harmless the Partnership, the General Partner, Harrowgate Capital Partners LLC, and the Transferee from and against any and all Losses arising out of, relating to, or resulting from: (a) any breach or inaccuracy of any representation or warranty made by the Transferor in this Agreement, whether as of the date hereof or as of the Transfer Date; (b) any undisclosed liability, encumbrance, lien, or adverse claim on or with respect to the Transferred Interest; (c) any failure by the Transferor to perform or discharge any of its obligations, covenants, or agreements under this Agreement; or (d) any obligation of the Transferor arising under the Partnership Agreement with respect to periods prior to the Transfer Date that is not expressly assumed by the Transferee under Section 2.3. The indemnification obligations of the Transferor under this Section 7.3 shall survive the Transfer Date and the consummation of the transactions contemplated by this Agreement.
ARTICLE VIII — GENERAL PROVISIONS
Section 8.1 — Governing Law.
This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. The provisions of the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. § 17-101 et seq., as amended from time to time, shall apply to matters not specifically addressed by this Agreement or the Partnership Agreement, to the extent applicable.
Section 8.2 — Dispute Resolution / Jurisdiction.
Any dispute, controversy, or claim arising under, out of, or in connection with this Agreement (including any question regarding its existence, validity, interpretation, performance, breach, or termination) shall be subject to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, the Superior Court of the State of Delaware, New Castle County, or the United States District Court for the District of Delaware). Each Party hereby irrevocably submits to the personal jurisdiction of such courts and irrevocably waives, and agrees not to assert in any suit, action, or proceeding, any objection that it may now or hereafter have to the laying of venue of any such suit, action, or proceeding in any such court, and any claim that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum. Each Party consents to service of process in any manner permitted by Applicable Law. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 8.3 — Notices.
All notices, requests, demands, consents, waivers, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given: (a) when delivered by hand; (b) when sent by electronic mail (with confirmation of transmission); (c) one (1) business day after being sent by recognized overnight delivery service (such as Severin Partners LLC or UPS); or (d) three (3) business days after being mailed by first-class mail, postage prepaid, registered or certified, return receipt requested, in each case to the applicable Party at the address set forth on the signature pages hereof or at such other address as such Party may designate by notice given in accordance with this Section 8.3.
In addition to notices to the Parties at their respective addresses, copies of all notices shall be sent to:
General Partner: Harrowgate Fund V GP LLC c/o Harrowgate Capital Partners LLC 1200 Concord Pike, Suite 600 Wilmington, DE 19803
Attention: Catherine E. Loomis, General Counsel & Chief Compliance Officer
Email: [●]
Fund Counsel: Calderwood & Harkness LLP 400 South Ashbury Asset Advisors, Suite 3000 Wilmington, DE 19801
Attention: Graham Sutherland
Email: [●]
Section 8.4 — Entire Agreement.
This Agreement (including the Recitals, Schedules, and Exhibits attached hereto, each of which is incorporated herein by reference), together with the Partnership Agreement, constitutes the entire agreement among the Parties with respect to the subject matter hereof — namely, the transfer of the Transferred Interest — and supersedes all prior negotiations, discussions, agreements, understandings, representations, and warranties, whether written or oral, relating to such subject matter. No Party has relied on any representation or warranty not expressly set forth in this Agreement.
Section 8.5 — Amendment.
This Agreement may not be amended, modified, supplemented, or waived except by a written instrument duly executed by all Parties hereto. No course of dealing between or among any of the Parties shall be deemed effective to modify, amend, or discharge any part of this Agreement or any rights or obligations of any Party under or by reason of this Agreement.
Section 8.6 — Successors and Assigns.
This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns. Neither this Agreement nor any rights hereunder may be assigned by any Party without the prior written consent of the other Parties, except that the rights and obligations of the Transferee may be assigned in connection with a further transfer of the Transferred Interest (or any portion thereof) that has been consented to by the General Partner in accordance with the Partnership Agreement.
Section 8.7 — Severability.
If any provision of this Agreement, or the application of such provision to any person or circumstance, is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, the remainder of this Agreement, and the application of such provision to other persons or circumstances, shall not be affected thereby, and the Parties shall negotiate in good faith to replace the invalid, illegal, or unenforceable provision with a valid provision that most closely approximates the intent of the Parties as reflected in the original provision.
Section 8.8 — Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Counterparts may be delivered via electronic mail (including portable document format (.pdf) or any electronic signature complying with the U.S. federal ESIGN Act of 2000, the Uniform Electronic Transactions Act, or other applicable law), and any counterpart so delivered shall be deemed to have been duly and validly executed and delivered and shall be valid and enforceable for all purposes.
Section 8.9 — No Third-Party Beneficiaries.
Except for the Indemnified Parties expressly identified in Article VII, this Agreement is not intended to, and shall not, confer any rights, benefits, or remedies upon any person or entity other than the Parties hereto and their respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to or shall create any third-party beneficiary rights.
Section 8.10 — Confidentiality.
The Transferee acknowledges and agrees to be bound by the confidentiality provisions of the Partnership Agreement, including, without limitation, the obligation to maintain the confidentiality of (a) the terms and conditions of this Agreement, (b) the identity of other limited partners of the Partnership, (c) all non-public information regarding the Partnership, its portfolio investments, and its financial condition and performance, and (d) all non-public information regarding the General Partner, Harrowgate Capital Partners LLC, and their affiliates. The Transferee shall not disclose any such confidential information to any third party, except as expressly permitted by the Partnership Agreement or as required by Applicable Law, without the prior written consent of the General Partner. The obligations of the Transferee under this Section 8.10 shall survive the termination of this Agreement and the transfer of the Transferred Interest.
Section 8.11 — Further Assurances.
Each Party agrees to execute, acknowledge, and deliver such additional documents, instruments, conveyances, and assurances and to take such further actions as may be reasonably requested by any other Party or by the General Partner to carry out the purposes and intent of this Agreement and to effectuate the transfer of the Transferred Interest and the assumption of obligations contemplated hereby, in each case at no additional cost to the requesting Party (other than reasonable out-of-pocket expenses, which shall be borne in accordance with Section 7.1).
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SIGNATURE PAGES
IN WITNESS WHEREOF, the Parties have caused this Transfer and Assumption Agreement to be executed and delivered as of the date first written above.
TRANSFEROR:
[NAME OF TRANSFEROR]
By: ________
Name: [●]
Title: [●]
Address: [●]
Date: ________
TRANSFEREE:
[NAME OF TRANSFEREE]
By: ________
Name: [●]
Title: [●]
Address: [●]
Taxpayer Identification Number: [●]
Date: ________
GENERAL PARTNER CONSENT AND ACKNOWLEDGMENT
The General Partner hereby consents to the transfer of the Transferred Interest on the terms and subject to the conditions set forth in this Agreement.
HARROWGATE FUND V GP LLC
By: Harrowgate Capital Partners LLC, its sole member
By: ________
Name: [Marcus J. Harrowgate / Jonathan P. Birch]
Title: [Managing Partner / Chief Financial Officer]
Date: ________
SCHEDULE A
DESCRIPTION OF TRANSFERRED INTEREST
The following sets forth the details of the Transferred Interest as of the Transfer Date (or, where indicated, as of the date of this Agreement, subject to confirmation and adjustment as of the Transfer Date by Pinnacle Fund Services LLC, in its capacity as the Fund's administrator):
Note: The Capital Account balance and Percentage Interest are preliminary estimates as of the date of this Agreement and are subject to adjustment and final confirmation by Pinnacle Fund Services LLC as of the Transfer Date. The General Partner shall notify the Transferor and the Transferee in writing of the final confirmed amounts promptly following the Transfer Date.
SCHEDULE B
TRANSFEREE ERISA AND REGULATORY CERTIFICATIONS
The Transferee hereby certifies and represents the following by checking the applicable boxes and providing such additional information as may be required:
(a) Benefit Plan Investor Status under 29 C.F.R. § 2510.3-101(f)(2):