EXEMPTED LIMITED PARTNERSHIP AGREEMENT
OF
HARROWGATE FUND V OFFSHORE SLP
A Cayman Islands Exempted Limited Partnership
Dated as of [●], 2025
Governed by the Laws of the Cayman Islands
THIS AGREEMENT IS CONFIDENTIAL AND IS NOT TO BE REPRODUCED OR DISTRIBUTED WITHOUT THE PRIOR WRITTEN CONSENT OF THE GENERAL PARTNER.
RECITALS
WHEREAS, Harrowgate Fund V GP LLC, a Delaware limited liability company (the "General Partner" or "GP"), whose sole member is Harrowgate Capital Partners LLC ("HCP"), a Delaware limited liability company with its principal offices located at 1200 Concord Pike, Suite 600, Wilmington, Delaware 19803, desires to form Harrowgate Fund V Offshore SLP (the "Partnership" or the "Offshore Feeder") as a Cayman Islands exempted limited partnership organized and existing under the Exempted Limited Partnership Act (As Revised) of the Cayman Islands (the "ELP Act");
WHEREAS, the Partnership is formed as an offshore feeder vehicle to invest substantially all of its assets alongside Harrowgate Private Equity Fund V LP (the "Main Fund"), a Delaware limited partnership, and Harrowgate Fund V Parallel LP (the "Parallel Fund"), a Delaware limited partnership, on a pro rata basis in accordance with the Agreement of Limited Partnership of the Main Fund dated [●], 2025 (the "Main Fund LPA");
WHEREAS, the Partnership is designed principally for the benefit of non-U.S. investors who, for tax, regulatory, or other reasons, prefer to invest through a Cayman Islands-domiciled vehicle rather than directly in the Main Fund or the Parallel Fund;
WHEREAS, the Partnership intends to be registered with the Cayman Islands Monetary Authority ("CIMA") as a regulated mutual fund under the Mutual Funds Act (As Revised) of the Cayman Islands (the "Mutual Funds Act"), and shall maintain such registration for so long as it remains operative;
WHEREAS, additional information regarding the Partnership, the Main Fund, the Parallel Fund, the General Partner, HCP, and their respective investment strategies, risk factors, and terms is set forth in the Confidential Private Placement Memorandum dated [●], 2025 (the "PPM"), which has been furnished to each prospective Limited Partner in connection with the offering of interests in the Partnership;
WHEREAS, the investment strategy of the Partnership, through its investment in or alongside the Main Fund, is focused on North American mid-market and upper-mid-market buyouts in the industrials, business services, healthcare services, and technology-enabled services sectors, with target equity checks of $75,000,000 to $250,000,000 per portfolio investment; and
WHEREAS, the General Partner targets aggregate capital commitments to the Main Fund, the Parallel Fund, and the Partnership, collectively, of up to $2,000,000,000 (the "Hard Cap");
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Definitions
As used in this Agreement, the following terms shall have the meanings set forth below. Unless the context otherwise requires, terms defined in the singular shall include the plural and vice versa, and terms defined in one gender shall include all genders.
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including, with correlative meaning, the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, more than fifty percent (50%) of the voting equity interests or equivalent economic interests in such other Person. For the avoidance of doubt, the General Partner and HCP shall be deemed to be Affiliates of each other, and each portfolio company in which the Partnership, the Main Fund, or the Parallel Fund holds an investment shall be deemed an Affiliate of the General Partner for purposes of the conflict-of-interest provisions of this Agreement during the period of such investment, unless the context otherwise requires.
"Aggregate Commitments" means the total capital commitments of all partners (including the General Partner or its Affiliates) to the Partnership, the Main Fund, and the Parallel Fund, collectively.
"Agreement" means this Exempted Limited Partnership Agreement, as it may be amended, modified, supplemented, or restated from time to time in accordance with the provisions hereof.
"Blocker" means HGF V blocker Corp., a Delaware C corporation formed for the benefit of certain tax-exempt or non-U.S. investors that elect to invest through a corporate blocker structure to mitigate the potential receipt of effectively connected income or unrelated business taxable income.
"Business Day" means any day other than a Saturday, Sunday, or other day on which commercial banks in both the Cayman Islands and New York, New York are authorized or required by law, regulation, or executive order to remain closed.
"Capital Account" means the capital account maintained for each Partner in accordance with Section 4.10 of this Agreement and the applicable provisions of the Main Fund LPA.
"Capital Call" means a notice issued by the General Partner to the Limited Partners requiring the funding of a portion of their respective Capital Commitments in accordance with Article IV of this Agreement.
"Capital Commitment" means, with respect to each Limited Partner, the total amount that such Limited Partner has committed to contribute to the Partnership as capital contributions, as set forth in such Limited Partner's Subscription Agreement, and with respect to the General Partner, the GP Commitment (or such portion thereof as is allocated to the Partnership).
"Carried Interest" means the General Partner's share of Net Profits equal to twenty percent (20%) of Net Profits above the Preferred Return, as more fully described in Article VI of this Agreement and as calculated in accordance with the methodology set forth in the Main Fund LPA.
"Catch-Up" means the distribution mechanism described in Section 6.3 of this Agreement, pursuant to which, following the return of capital and the payment of the Preferred Return to the Limited Partners, distributions are made eighty percent (80%) to the General Partner and twenty percent (20%) to the Limited Partners until the General Partner has received cumulative distributions equal to twenty percent (20%) of cumulative Net Profits.
"CIMA" means the Cayman Islands Monetary Authority.
"Closing" means each date on which Capital Commitments of one or more Limited Partners are accepted by the General Partner, including the First Close and each Subsequent Close.
"Concentration Limit" means the restriction pursuant to which no single portfolio investment shall, at the time of commitment to such investment, exceed twenty percent (20%) of Aggregate Commitments.
"CRS" means the Common Reporting Standard developed by the Organisation for Economic Co-operation and Development for the automatic exchange of financial account information.
"Default" means a Limited Partner's failure to fund all or any portion of a Capital Call within the time period specified in Section 4.7 of this Agreement.
"ELP Act" means the Exempted Limited Partnership Act (As Revised) of the Cayman Islands, as the same may be amended, supplemented, or replaced from time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, including any regulations promulgated thereunder. This definition is included for purposes of cross-reference to the Main Fund LPA and related compliance considerations, notwithstanding that investors in the Offshore Feeder are expected to be non-U.S. Persons.
"FATCA" means the Foreign Account Tax Compliance Act, as codified in Sections 1471 through 1474 of the Internal Revenue Code, and any regulations, guidance, or intergovernmental agreements issued thereunder.
"Final Close" means the last Closing at which Capital Commitments are accepted by the General Partner, which shall occur no later than February 15, 2027 (being the date that is eighteen (18) months after the targeted First Close date).
"First Close" means the initial Closing of the Partnership, which is targeted to occur on or about August 15, 2025, or such other date as the General Partner may determine in its sole discretion.
"Fund Expenses" means the expenses described in Section 7.4 of this Agreement, which are borne by the Partnership on a pro rata basis.
"General Partner" means Harrowgate Fund V GP LLC, a Delaware limited liability company, in its capacity as the sole general partner of the Partnership, or any successor general partner admitted to the Partnership in accordance with the terms of this Agreement.
"GP Commitment" means the General Partner's (or its Affiliates') commitment to invest in the fund vehicles in an aggregate amount equal to two and one-half percent (2.5%) of Aggregate Commitments (which, at the Hard Cap, would equal $50,000,000), to be funded through the General Partner's commitment to the Main Fund, the Partnership, or a combination thereof, as determined by the General Partner in its discretion.
"Hard Cap" means $2,000,000,000 in Aggregate Commitments across the Main Fund, the Parallel Fund, and the Partnership.
"Indemnified Person" means each of the General Partner, HCP, and their respective Affiliates, partners, members, managers, officers, directors, employees, agents, and representatives, and any other Person designated as an Indemnified Person in accordance with Section 14.3 of this Agreement.
"Internal Revenue Code" or "Code" means the Internal Revenue Code of 1986, as amended, and any successor statute thereto. References to specific sections of the Code shall include such sections and any comparable successor provisions.
"Investment Company Act" means the Investment Company Act of 1940, as amended, including any rules and regulations promulgated thereunder.
"Investment Period" means the period commencing on the date of the Final Close and ending on the fifth (5th) anniversary thereof, subject to earlier termination as provided in Article X of this Agreement (including upon the occurrence of a Key Person Event).
"Key Person" means each of Marcus J. Harrowgate (Founder, Managing Partner, and Chief Investment Officer of HCP) and Diana R. Castellano (Partner and Co-Head of Investments of HCP).
"Key Person Event" has the meaning set forth in Section 10.1 of this Agreement.
"Limited Partner" means any Person admitted to the Partnership as a limited partner in accordance with the terms of this Agreement, and any Person who subsequently becomes a limited partner of the Partnership in accordance with the terms hereof, in each case for so long as such Person remains a limited partner. The term "Limited Partners" means all such Persons collectively.
"LPAC" means the Limited Partner Advisory Committee established under the Main Fund LPA, with observer rights available to qualifying Limited Partners of the Offshore Feeder as described in Section 11.2 of this Agreement.
"Main Fund" means Harrowgate Private Equity Fund V LP, a Delaware limited partnership formed pursuant to the Main Fund LPA.
"Main Fund LPA" means the Agreement of Limited Partnership of the Main Fund, dated as of [●], 2025, as the same may be amended, modified, supplemented, or restated from time to time.
"Management Fee" means the fee payable by the Partnership to the General Partner (or its designee) as described in Section 7.1 of this Agreement.
"MFN" means Most Favored Nation, as described in Section 14.12 of this Agreement.
"Minimum Commitment" means $10,000,000, which is the minimum Capital Commitment required for admission to the Partnership as a Limited Partner, subject to the General Partner's right to waive such minimum in its sole discretion.
"Mutual Funds Act" means the Mutual Funds Act (As Revised) of the Cayman Islands, as the same may be amended, supplemented, or replaced from time to time.
"Net Profits" and "Net Losses" mean, for any fiscal period, the net profits or net losses of the Partnership, as determined in accordance with Article V of this Agreement and, to the extent applicable, the methodology set forth in the Main Fund LPA, computed in accordance with the applicable accounting principles used to prepare the Partnership's financial statements.
"Organizational Expenses" means the expenses incurred in connection with the formation, organization, and initial offering of interests in the Partnership, the Main Fund, and the Parallel Fund, including without limitation legal fees, filing fees, CIMA registration fees, printing and document preparation costs, and accounting fees incurred in connection with such formation and offering activities. Organizational Expenses are capped at $3,500,000 in the aggregate across all fund vehicles, with any amounts in excess of such cap to be borne by HCP.
"Parallel Fund" means Harrowgate Fund V Parallel LP, a Delaware limited partnership.
"Partner" means the General Partner and each Limited Partner.
"Person" means any individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization, governmental authority, or any other entity or organization of any kind.
"PPM" means the Confidential Private Placement Memorandum of the Partnership dated [●], 2025, as the same may be amended or supplemented from time to time.
"Preferred Return" means a cumulative, compounded annual return of eight percent (8%) per annum on each Partner's unreturned Capital Contributions, calculated from the date of each Capital Contribution to the date of the relevant distribution, compounded annually.
"Qualified Purchaser" means a "qualified purchaser" as defined in Section 2(a)(51) of the Investment Company Act and the rules and regulations promulgated thereunder.
"Sponsor" means Harrowgate Capital Partners LLC, a Delaware limited liability company.
"Subscription Agreement" means the form of subscription agreement for interests in the Partnership to be executed by each Limited Partner in connection with its admission to the Partnership, as attached in substantially the form set forth in Schedule F hereto.
"Subscription Facility" means the revolving credit facility provided by Ashford National Bank, N.A. to the Partnership (and/or the Main Fund and the Parallel Fund), as described in Section 4.9 of this Agreement.
"Term" has the meaning set forth in Section 2.5 of this Agreement.
"Transaction Fees" means all transaction fees, monitoring fees, directors' fees, advisory fees, break-up fees, topping fees, and similar fees and compensation received by the General Partner, HCP, or any of their respective Affiliates from portfolio companies or in connection with actual or contemplated portfolio investments.
"Transfer" means any direct or indirect sale, assignment, pledge, hypothecation, encumbrance, gift, bequest, or other disposition or transfer (whether voluntary or involuntary, by operation of law or otherwise) of all or any portion of a Partner's interest in the Partnership. "Transfer" shall also include any transaction or series of transactions that has the effect, directly or indirectly, of transferring the economic benefits of ownership of such interest.
"Waterfall" means the European-style (whole-fund) distribution waterfall described in Section 6.2 of this Agreement.
Section 1.2 — Interpretation
(a) Unless the context otherwise requires, references in this Agreement to "Articles," "Sections," "Schedules," and "Exhibits" are references to the articles, sections, schedules, and exhibits of this Agreement.
(b) The headings and captions contained in this Agreement are for convenience of reference only, shall not be deemed to be part of this Agreement, and shall not be referred to in connection with the construction or interpretation of this Agreement.
(c) Unless the context otherwise requires, words importing the singular shall include the plural and vice versa, and words importing any gender shall include all genders.
(d) References to any statute, law, rule, or regulation shall include all amendments, modifications, replacements, and successor provisions thereto, whether enacted before or after the date of this Agreement, and all rules and regulations promulgated thereunder.
(e) All references to "dollars" or "$" shall mean United States Dollars, and all amounts payable or calculable hereunder shall be determined in United States Dollars, unless otherwise expressly stated.
(f) The terms "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation," whether or not such phrase appears.
(g) References to the "Cayman Islands" shall mean the Cayman Islands, a British Overseas Territory.
(h) To the extent that any capitalized term used in this Agreement is not defined herein, such term shall have the meaning ascribed to it in the Main Fund LPA, and the definitions and interpretive provisions of the Main Fund LPA are hereby incorporated by reference to the extent applicable and not inconsistent with the provisions of this Agreement.
(i) In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of the Main Fund LPA as incorporated herein by reference, the provisions of this Agreement shall govern with respect to the rights and obligations of the Partners of the Partnership, provided that the economic terms of the Partnership's investment in or alongside the Main Fund shall be governed by the Main Fund LPA.
ARTICLE II — FORMATION, NAME, PURPOSE, AND TERM
Section 2.1 — Formation
(a) The Partnership is hereby formed as a Cayman Islands exempted limited partnership pursuant to and in accordance with the provisions of the ELP Act. The General Partner has caused or shall cause to be filed with the Registrar of Exempted Limited Partnerships in the Cayman Islands all documents and instruments required under the ELP Act for the registration of the Partnership as an exempted limited partnership, including a statement signed by the General Partner containing the information required by Section 9 of the ELP Act.
(b) The name of the Partnership shall be Harrowgate Fund V Offshore SLP. The Partnership's business shall be conducted under such name or such other name or names as the General Partner may from time to time determine in accordance with applicable law.
(c) The Partnership shall be registered with CIMA as a regulated mutual fund under Section 4(3) of the Mutual Funds Act, and the General Partner shall take all actions necessary to maintain such registration for so long as the Partnership remains operative, including without limitation:
(i) payment of all annual registration fees due to CIMA;
(ii) filing of annual audited financial statements with CIMA within six (6) months of the end of each fiscal year;
(iii) maintenance of a registered office in the Cayman Islands;
(iv) notification to CIMA of any material changes to the Partnership's offering documents, constitutional documents, or structure within the time periods prescribed by the Mutual Funds Act and applicable CIMA rules; and
(v) compliance with all other regulatory requirements and conditions imposed by CIMA from time to time.
(d) The General Partner shall execute, file, and record all instruments and documents (including amendments to the Partnership's registration statement, certificates of registration, and any other filings required by the Registrar of Exempted Limited Partnerships or CIMA) that may be required or appropriate under the ELP Act, the Mutual Funds Act, or any other applicable law to reflect the formation, continuation, and dissolution of the Partnership.
Section 2.2 — Registered Office
(a) The registered office of the Partnership in the Cayman Islands shall be located at the office of the Partnership's Cayman Islands registered agent, as designated by the General Partner from time to time, or at such other address in the Cayman Islands as the General Partner may designate by notice to CIMA and the Registrar of Exempted Limited Partnerships.
(b) The principal office of the General Partner is located at 1200 Concord Pike, Suite 600, Wilmington, Delaware 19803, which serves as the headquarters of HCP. The General Partner may change the location of its principal office upon notice to the Limited Partners.
Section 2.3 — Purpose
(a) The purpose of the Partnership is to invest substantially all of its assets in or alongside the Main Fund (and/or the Parallel Fund) on a pro rata basis, and thereby to participate in the investment program of the Main Fund. Through its investment in or alongside the Main Fund, the Partnership will pursue the Main Fund's investment strategy, which is focused on North American mid-market and upper-mid-market leveraged buyout transactions in the industrials, business services, healthcare services, and technology-enabled services sectors, with target equity checks ranging from $75,000,000 to $250,000,000 per portfolio investment.
(b) The Partnership may hold investments directly or indirectly through the Main Fund, the Parallel Fund, intermediate holding companies, blocker corporations (including the blocker), special purpose vehicles, or other intermediate vehicles as the General Partner may determine to be appropriate in furtherance of the Partnership's investment objectives and the tax, regulatory, or structuring needs of the Partnership and its Limited Partners.
(c) The Partnership may take all actions reasonably incidental or ancillary to the foregoing, including without limitation:
(i) borrowing money and issuing evidences of indebtedness, including entering into and participating in the Subscription Facility;
(ii) entering into hedging transactions, currency forward contracts, interest rate swaps, and similar derivative instruments;
(iii) opening and maintaining bank accounts, brokerage accounts, and custodial accounts;
(iv) engaging legal counsel, accountants, auditors, administrators, consultants, and other professional advisors;
(v) making distributions to Partners;
(vi) taking any and all other actions as may be necessary, desirable, or convenient to carry out the purposes of the Partnership as contemplated by this Agreement.
Section 2.4 — Fiscal Year
The fiscal year of the Partnership shall be the calendar year, commencing on January 1 and ending on December 31 of each year. The first fiscal year of the Partnership shall commence on the date of the First Close and shall end on December 31 of the calendar year in which the First Close occurs. The final fiscal year of the Partnership shall end on the date on which the Partnership is dissolved and its affairs are wound up.
Section 2.5 — Term
(a) The Partnership shall continue in existence until the tenth (10th) anniversary of the Final Close (the "Term"), unless sooner dissolved in accordance with Article XIII of this Agreement.
(b) The General Partner may, in its sole discretion, extend the Term for up to two (2) additional one-year periods (each, a "GP Extension") by providing written notice to the Limited Partners at least ninety (90) days prior to the then-scheduled expiration of the Term.
(c) Following the expiration of the two GP Extensions described in Section 2.5(b), the General Partner may, with the prior written approval of the LPAC, extend the Term for one (1) additional one-year period by providing written notice to the Limited Partners at least ninety (90) days prior to the then-scheduled expiration of the Term.
(d) In no event shall the Term of the Partnership exceed thirteen (13) years from the date of the Final Close.
(e) Notwithstanding the foregoing, the Partnership may be dissolved prior to the scheduled expiration of the Term upon the occurrence of any of the events described in Section 13.1 of this Agreement.
Section 2.6 — Cayman Islands Regulatory Matters
(a) The Partnership shall maintain its registration as a regulated mutual fund under the Mutual Funds Act for so long as it is in operation, and the General Partner shall ensure compliance with all applicable CIMA regulatory obligations. The General Partner acknowledges that failure to comply with CIMA requirements may result in penalties, sanctions, or the revocation of the Partnership's registration.
(b) The General Partner shall appoint and maintain an auditor approved by CIMA to audit the Partnership's financial statements. As of the date of this Agreement, the independent auditor for the Partnership and the other fund vehicles is Caldwell, Fitch & Hartley LLP, with the audit engagement led by Robert A. Fonseca (audit partner). The General Partner shall not change the Partnership's auditor without prior notice to CIMA in accordance with the Mutual Funds Act.
(c) The General Partner shall cause audited financial statements of the Partnership to be prepared in accordance with applicable accounting standards and filed with CIMA within six (6) months of the end of each fiscal year of the Partnership. Copies of such audited financial statements shall also be delivered to each Limited Partner in accordance with Section 9.1 of this Agreement.
(d) The Partnership and the General Partner shall comply with all applicable anti-money laundering ("AML") and know-your-customer ("KYC") obligations under the laws of the Cayman Islands, including the Proceeds of Crime Act (As Revised), the Anti-Money Laundering Regulations (As Revised), and any applicable guidance or rules issued by CIMA. AML/KYC verification of each Limited Partner and prospective Limited Partner shall be performed by Pinnacle Fund Services LLC (the Partnership's fund administrator), with its principal office at 100 Summer Street, Suite 2400, Boston, Massachusetts 02110 (key contact: David L. Prentiss, Client Relationship Director), in accordance with the Cayman Islands AML Regime and such other applicable laws and regulations as may be relevant.
(e) The General Partner shall promptly notify CIMA of any material changes to the Partnership's offering documents, this Agreement, or the structure of the Partnership, in accordance with the requirements of the Mutual Funds Act and any applicable CIMA rules or guidance.
ARTICLE III — PARTNERS
Section 3.1 — General Partner
(a) Harrowgate Fund V GP LLC, a Delaware limited liability company, is hereby admitted as the sole general partner of the Partnership. The sole member of the General Partner is Harrowgate Capital Partners LLC, a Delaware limited liability company.
(b) The General Partner shall have unlimited liability for the debts and obligations of the Partnership to the extent required by the ELP Act and applicable law. The General Partner shall not withdraw or resign from the Partnership, and shall not be removed as general partner of the Partnership, except as expressly provided in Section 10.3 (no-fault removal) or Section 10.4 (for-cause removal) of this Agreement.
(c) The General Partner shall devote such time and attention to the affairs of the Partnership as is reasonably necessary for the conduct of the Partnership's business and the fulfillment of the General Partner's obligations under this Agreement, subject to the provisions of Section 8.4 (Other Activities of the General Partner and Its Affiliates).
Section 3.2 — Limited Partners
(a) Each Person admitted to the Partnership as a limited partner in accordance with the terms of this Agreement shall be a Limited Partner. A Person shall be admitted as a Limited Partner upon execution of a Subscription Agreement in the form prescribed by the General Partner (substantially in the form attached as Schedule F hereto), acceptance of such Subscription Agreement by the General Partner, and payment of any amounts then due in respect of such Person's Capital Commitment.
(b) Each Limited Partner must be a non-U.S. person, or otherwise eligible to invest through the Offshore Feeder, as determined by the General Partner in its sole discretion. For purposes of this Section 3.2(b), a "non-U.S. person" generally means any Person that is not a "U.S. person" within the meaning of Regulation S promulgated under the U.S. Securities Act of 1933, as amended.
(c) Each Limited Partner must qualify as a Qualified Purchaser within the meaning of Section 2(a)(51) of the Investment Company Act, as a condition to the Partnership's reliance on the exemption from registration under the Investment Company Act provided by Section 3(c)(7) thereof.
(d) The minimum Capital Commitment for each Limited Partner is $10,000,000 (the Minimum Commitment), provided that the General Partner may, in its sole discretion, waive or reduce such minimum for any prospective Limited Partner.
(e) The anticipated anchor investor in the Partnership is Tidewater Sovereign Investment Authority ("TSIA"), a sovereign wealth fund, with an anticipated Capital Commitment of $175,000,000. The key contact for TSIA is Farid H. Al-Rashidi, Director of Global Private Equity, P.O. Box 3340, Tidewater Financial Centre, Level 18, Al-Burj District. TSIA's admission to the Partnership is subject to the execution of a Subscription Agreement and compliance with all applicable AML/KYC and regulatory requirements.
Section 3.3 — Admission of Additional Limited Partners
(a) Additional Limited Partners may be admitted to the Partnership at one or more Subsequent Closes, occurring at such times as the General Partner may determine in its sole discretion, up to and including the Final Close Deadline of February 15, 2027. The General Partner shall have the sole authority to accept or reject any subscription for interests in the Partnership.
(b) Each Limited Partner admitted at a Subsequent Close (a "Subsequent Close Limited Partner") shall be required to pay equalization interest to the Partnership at the time of its admission. Such equalization interest shall be calculated at the Preferred Return rate (8% per annum, compounded annually) on the amount of Capital Contributions that such Subsequent Close Limited Partner would have been required to make had it been admitted at the First Close (or, if applicable, at a prior Subsequent Close), for the period from the First Close (or such prior Subsequent Close) to the date of the Subsequent Close at which such Limited Partner is admitted. Equalization interest received by the Partnership shall be distributed to the Partners who were admitted at the First Close (or prior Subsequent Closes, as applicable) as promptly as practicable, and shall not constitute Capital Contributions for purposes of the Waterfall or the Management Fee calculation.
(c) Each Subsequent Close Limited Partner shall be treated for all purposes under this Agreement as if it had been admitted at the First Close and had made Capital Contributions at the same time and in the same proportionate amounts as the Partners admitted at the First Close, and the Capital Account of each Subsequent Close Limited Partner shall be adjusted accordingly.
Section 3.4 — Representations and Warranties of Limited Partners
Each Limited Partner hereby represents and warrants to the Partnership and the General Partner, as of the date of its admission and at each date on which it funds a Capital Call:
(a) Such Limited Partner is a non-U.S. person within the meaning of Regulation S under the Securities Act of 1933, as amended, or is otherwise eligible to invest through the Offshore Feeder as determined by the General Partner.
(b) Such Limited Partner is a Qualified Purchaser within the meaning of Section 2(a)(51) of the Investment Company Act.
(c) Such Limited Partner is not a "U.S. person" for purposes of FATCA (or, if it is, it has provided all information and documentation required for the Partnership to comply with its FATCA obligations).
(d) Neither such Limited Partner nor any of its beneficial owners, directors, officers, or controlling persons is (i) a person or entity whose name appears on the Specially Designated Nationals and blocked Persons List maintained by the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC"), (ii) a person or entity that is organized or resident in a country or territory that is the subject of comprehensive country-wide or territory-wide sanctions administered by OFAC, the European Union, the United Kingdom, or the United Nations, (iii) otherwise the target of applicable sanctions, or (iv) directly or indirectly owned or controlled by any such person or entity.
(e) The funds used by such Limited Partner to make Capital Contributions are not derived from, and do not represent the proceeds of, any activity that would constitute a violation of applicable anti-money laundering laws, including the Cayman Islands Proceeds of Crime Act (As Revised), the U.S. Bank Secrecy Act, and the USA PATRIOT Act.
(f) Such Limited Partner and its Affiliates are in compliance with all applicable anti-bribery and anti-corruption laws, including the U.S. Foreign Corrupt Practices Act, the UK Bribery Act 2010, and any comparable legislation applicable to such Limited Partner.
(g) Such Limited Partner has received, reviewed, and carefully considered the PPM, including the risk factors described therein, and has had the opportunity to ask questions of, and receive answers from, the General Partner and HCP concerning the terms and conditions of an investment in the Partnership.
(h) Such Limited Partner is acquiring its interest in the Partnership for its own account, for investment purposes only, and not with a view to any distribution, resale, or other transfer thereof in violation of applicable securities laws.
(i) Such Limited Partner has the power and authority to enter into this Agreement and the Subscription Agreement, and the execution and delivery of such agreements have been duly authorized by all necessary corporate, partnership, or other action.
(j) Such Limited Partner has provided true, complete, and accurate information in its Subscription Agreement and in all AML/KYC documentation provided to Pinnacle Fund Services LLC or the General Partner, and such Limited Partner shall promptly notify the General Partner of any material change in such information.
Section 3.5 — Liability of Limited Partners
(a) The liability of each Limited Partner for the debts, obligations, and liabilities of the Partnership shall be limited to such Limited Partner's unfunded Capital Commitment plus any distributions received by such Limited Partner that are subject to the clawback provisions set forth in this Agreement or applicable law.
(b) No Limited Partner shall be required to make any contribution to the Partnership in excess of its Capital Commitment, except to the extent that distributions previously received by such Limited Partner are subject to recall or clawback under this Agreement.
(c) No Limited Partner shall participate in, or have any right to participate in, the management or conduct of the business of the Partnership within the meaning of the ELP Act. Any Limited Partner that participates in the management of the Partnership may lose the benefit of limited liability as provided under the ELP Act.
ARTICLE IV — CAPITAL CONTRIBUTIONS AND CAPITAL CALLS
Section 4.1 — Capital Commitments
(a) Each Limited Partner's Capital Commitment shall be the amount set forth in such Limited Partner's Subscription Agreement, as accepted by the General Partner. Capital Commitments shall be called and funded in accordance with the provisions of this Article IV.
(b) Capital Contributions shall be called from all Partners (including the General Partner) on a pro rata basis, based on each Partner's unfunded Capital Commitment relative to the total unfunded Capital Commitments of all Partners. The General Partner shall not call Capital Contributions from the Limited Partners unless the General Partner (or its Affiliates) concurrently funds its pro rata share of such Capital Call.
(c) The GP Commitment shall be in an aggregate amount equal to two and one-half percent (2.5%) of Aggregate Commitments (which, at the Hard Cap, would equal $50,000,000). The GP Commitment may be funded through the General Partner's commitment to the Main Fund, the Partnership, or a combination thereof, as determined by the General Partner in its sole discretion. The GP Commitment may be funded in cash or, to the extent permitted by the Main Fund LPA, through a waiver or offset of Management Fees.
Section 4.2 — First Close
(a) The First Close of the Partnership is targeted to occur on or about August 15, 2025, or such other date as the General Partner may determine in its sole discretion.
(b) The minimum aggregate target for the First Close across all fund vehicles (the Main Fund, the Parallel Fund, and the Partnership) is $750,000,000 in Aggregate Commitments. The General Partner reserves the right to hold the First Close at a lower amount of Aggregate Commitments if it determines, in its sole discretion, that doing so is in the best interests of the fund vehicles and their respective limited partners.
(c) Upon the occurrence of the First Close, the General Partner shall be authorized to issue Capital Calls and commence the investment program in accordance with this Agreement and the Main Fund LPA.
Section 4.3 — Subsequent Closes
(a) Following the First Close, the General Partner may hold one or more Subsequent Closes at such times as it may determine in its sole discretion, at which additional Limited Partners may be admitted to the Partnership and existing Limited Partners may increase their Capital Commitments. Subsequent Closes may occur on a rolling basis.
(b) The Final Close shall occur no later than February 15, 2027, which is the date that is eighteen (18) months after the targeted First Close date. The General Partner shall not accept any new Capital Commitments after the Final Close Deadline without the prior written consent of a majority-in-interest of the then-existing Limited Partners.
(c) Equalization provisions applicable to Subsequent Close Limited Partners are set forth in Section 3.3(b) of this Agreement.
Section 4.4 — Capital Calls
(a) The General Partner shall issue Capital Call notices to the Limited Partners (and concurrently fund or cause to be funded its pro rata share) specifying:
(i) the aggregate amount of capital being called from the Partnership;
(ii) each Limited Partner's pro rata share of such Capital Call;
(iii) the purpose of the Capital Call (which may include investment funding, Management Fees, Organizational Expenses, Fund Expenses, and reserves);
(iv) the funding deadline, which shall be not less than ten (10) Business Days after delivery of the Capital Call notice; and
(v) wire instructions for the funding of Capital Contributions.
(b) Capital Call notices shall be delivered to each Limited Partner at the address or electronic mail address set forth in the Partnership's records, or as otherwise updated by such Limited Partner in accordance with Section 14.6 of this Agreement.
(c) Capital Calls issued by the Partnership shall be delivered in parallel with, and coordinated to coincide with, Capital Calls issued to the limited partners of the Main Fund and the Parallel Fund, on a pro rata basis based on the respective Capital Commitments of the investors in each fund vehicle.
(d) All Capital Contributions shall be made by wire transfer of immediately available funds to the account of the Partnership (or, if directed by the General Partner, to the account of the lender under the Subscription Facility or another designated recipient) in accordance with the wire instructions provided by the General Partner. The custodian for the Partnership is Ridgeway Trust Company, 1100 North Market Street, Wilmington, Delaware 19801 (key contact: Thomas B. Chandler, Vice President, Institutional Custody). Wire instructions shall be set forth in each Capital Call notice.
Section 4.5 — Drawdown Percentage
Capital called from the Partnership shall not exceed the Partnership's proportionate share of the overall investment and expense obligations of the fund complex (consisting of the Main Fund, the Parallel Fund, and the Partnership, together). Such proportionate share shall be determined based on the ratio of the Partnership's Aggregate Capital Commitments to the total Aggregate Commitments of all fund vehicles, subject to adjustments for excused and excluded commitments and other equitable adjustments as determined by the General Partner in its sole discretion, acting reasonably.
Section 4.6 — Reinvestment
(a) Capital Contributions attributable to investments that are realized within twenty-four (24) months of the date of the initial investment in such portfolio investment (or such shorter period as the Main Fund LPA provides) may be recycled by the General Partner during the Investment Period. For purposes of this Section 4.6, "realized" means the receipt by the Partnership (directly or through the Main Fund) of cash proceeds from the disposition, recapitalization, or refinancing of a portfolio investment.
(b) Recycled capital shall be treated as restoring the unfunded Capital Commitments of the Partners on a pro rata basis, and may be recalled and invested in new portfolio investments during the Investment Period on the same terms and conditions as the original Capital Contributions.
(c) The aggregate amount of capital recycled pursuant to this Section 4.6 shall not exceed the limitations set forth in the Main Fund LPA.
Section 4.7 — Defaults
(a) If a Limited Partner (a "Defaulting Limited Partner") fails to fund all or any portion of a Capital Call within the funding deadline specified in the Capital Call notice (after giving effect to any cure period), such failure shall constitute a Default under this Agreement.
(b) Upon the occurrence of a Default, the General Partner shall provide written notice to the Defaulting Limited Partner specifying the nature of the Default and the remedies that the General Partner intends to exercise. The Defaulting Limited Partner shall have five (5) Business Days from receipt of such notice to cure the Default by funding the full amount of the unfunded Capital Call, together with any default interest accrued thereon.
(c) If the Default is not cured within the cure period, the General Partner may, in its sole discretion, exercise one or more of the following remedies:
(i) charge default interest on the unfunded amount at the lesser of eighteen percent (18%) per annum or the maximum rate permitted by applicable law, from the original funding deadline to the date of payment;
(ii) reduce the Defaulting Limited Partner's interest in the Partnership by up to fifty percent (50%), with such forfeited interest to be allocated among the non-defaulting Limited Partners on a pro rata basis (or as otherwise determined by the General Partner);
(iii) require the forfeiture of all or any portion of distributions that would otherwise be payable to the Defaulting Limited Partner, with such forfeited distributions to be applied first to satisfy the Defaulting Limited Partner's unfunded obligation and accrued default interest, and any remainder to be distributed to the non-defaulting Limited Partners;
(iv) suspend or terminate the Defaulting Limited Partner's voting and consent rights under this Agreement;
(v) pursue any and all legal remedies available to the Partnership, including the right to bring an action for specific performance or damages in a court of competent jurisdiction.
(d) The non-defaulting Limited Partners may (but shall not be obligated to) fund the Defaulting Limited Partner's shortfall on a pro rata basis (or in such other proportions as the General Partner may determine). Any amounts funded by non-defaulting Limited Partners in respect of a Defaulting Limited Partner's shortfall shall be treated as additional Capital Contributions by such non-defaulting Limited Partners and shall increase their respective Capital Accounts accordingly.
(e) The rights and remedies set forth in this Section 4.7 are cumulative and shall be in addition to any other rights or remedies available to the Partnership or the General Partner at law or in equity.
Section 4.8 — Excuse and Exclusion Rights
(a) The General Partner may, in its sole discretion, excuse a Limited Partner from participating in a particular investment if, in the General Partner's reasonable determination, such participation would:
(i) violate any applicable law, rule, or regulation (including tax, sanctions, or regulatory requirements applicable to such Limited Partner);
(ii) result in material adverse regulatory, tax, or legal consequences for such Limited Partner; or
(iii) be inconsistent with restrictions or obligations set forth in a side letter between the Partnership and such Limited Partner, including but not limited to Sharia compliance requirements, sovereign investor restrictions, responsible investment policies, or sector-specific exclusion lists.
(b) Amounts excused pursuant to this Section 4.8 shall not be treated as Defaults, and the excused Limited Partner's unfunded Capital Commitment shall not be reduced by the excused amount. Excused amounts may be reallocated among the non-excused Limited Partners on a pro rata basis (or as otherwise determined by the General Partner), or the Partnership's proportionate share of the relevant investment may be reduced accordingly.
(c) The General Partner shall maintain records of all excuse and exclusion requests and determinations, and shall provide information regarding the same to excused Limited Partners upon request.
Section 4.9 — Subscription Credit Facility
(a) The Partnership is authorized to participate in the revolving subscription credit facility (the "Subscription Facility") provided by Ashford National Bank, N.A., a national banking association with its principal office at 300 Vesey Street, New York, New York 10282 (key contact: Lisa M. Osterberg, Managing Director, Fund Finance). The Subscription Facility is entered into by and among the Main Fund, the Parallel Fund, and the Partnership (collectively as borrowers or co-borrowers), and Ashford National Bank, N.A. as administrative agent and lender.