Private Equity Term Sheet V1 o48f

Summary of Principal 1 The following is a summary of certain information about the Partnership and investment in limited partner interests therein (“Interests”). This summary is not intended to be complete and is qualified in its entirety by the of the limited partnership agreement of the Partnership (the “Partnership Agreement”). The Partnership Agreement is available from the General Partner upon the request of any potential investor and should be reviewed carefully before making any investment decision. To the extent that the set forth below are inconsistent with those of the Partnership Agreement, the Partnership Agreement shall control. The Partnership:

[Fund], L.P., a Delaware limited partnership (the “Partnership”).

Investment Objective:

[The Partnership’s investment objective is to achieve long-term capital appreciation through equity and equity-related investments in companies primarily engaged in [specify industry sectors, as applicable] (“Investments”).] [The Partnership may also invest in debt securities that have equity-like returns or an equity component, or are related to its equity investments.]2

Partnership Capital:

The Partnership is seeking [$ ] of capital commitments (“Commitments”) from qualified limited partners (“Limited Partners” and, together with the General Partner, the “Partners”), including limited partners in any Parallel Funds (defined below). The General Partner reserves the right to accept aggregate Commitments greater or lesser than such amount [;provided that the Partnership will not hold an initial closing with less than $[ ] million of aggregate Commitments].3

Minimum Commitment:

The minimum Commitment for a Limited Partner is $[5] million. Commitments of lesser amounts may be accepted at the discretion of the General Partner.

General Partner:

[GP, LLC/L.P.4] (the “General Partner”) will be the sole general partner of the Partnership. [Insert relevant information about ownership of the GP.]

Advisor:

[Advisor, LLC/L.P.] (the “Advisor”), an of the General Partner, will provide certain advisory services to the Partnership, including investigating, structuring and negotiating potential investments, monitoring investments post-acquisition, and advising the Partnership with respect to disposition opportunities.

General Partner Commitment:

The General Partner [and its s] will make an [aggregate] Commitment to the Partnership of at least $[__] million. [In addition, prior to the beginning of each year, the General

Partner may also (i) commit to co-invest additional amounts up to 5% of the amount of equity otherwise available to the Partnership (and Parallel Funds) in all Investments for that year and/or (ii) permanently and irrevocably increase its Unfunded Commitment (as defined below).]5 Investment Limitations:6

Diversification. [Except with regard to Bridge Financings (as hereinafter defined)], the total investment by the Partnership in a single portfolio company may not exceed [20]% of the aggregate Commitments. [Foreign Investments. The Partnership will not invest more than [10]% of the aggregate Commitments in securities of issuers headquartered and operating principally outside the United States and Canada.] [Hostile Transactions. The Partnership will not invest in any “hostile” transaction that is opposed by a majority of the of the target company’s board of directors; provided that the acquisition of a business in connection with a bankruptcy or similar restructuring shall not be consider “hostile,” notwithstanding the opposition of the equity owners of such business or their representatives.] [Open Market Purchases. The Partnership will not make open market purchases of publicly traded securities unless such purchases are (i) made in connection with, or with a view to, a contemplated privately negotiated transaction, or (ii) in an amount in the aggregate at the time of the purchase not in excess of [5]% of the aggregate Commitments (excluding securities purchased in accordance with (i)).] [Blind Pool Investment Funds. The Partnership will not invest in any “blind pool” investment funds.] [Derivatives. The Partnership will not invest in publicly traded options, futures or financial derivatives except for hedging purposes in connection with an Investment or proposed Investment.] [Real Estate. The Partnership will not invest in real estate or in securities of issuers the principal business of which is the ownership or development of real estate; provided that the Partnership may invest in companies with substantial real estate holdings.]

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Borrowings and Guarantees:

The General Partner shall have the right, at its option, to cause the Partnership to borrow money from any person, or to guarantee loans or other extensions of credit (i) to an obligation made to any portfolio company of the Partnership or or any vehicle formed to effect the acquisition thereof; (ii) for the purpose of covering Partnership Expenses and Management Fees; or (iii) to provide interim financing to the extent necessary to consummate the purchase of Investments prior to the receipt of capital contributions. Borrowings or guarantees by the Partnership shall, in the aggregate, not exceed 20% of the total Commitments at any time. [The General Partner shall be required to give each tax-exempt Limited Partner who has requested and who is not then in default, the opportunity, upon at least two business days’ notice, to make a contribution of capital to the Partnership on the date of or prior to any borrowing by the Partnership in the amount equal to such tax-exempt Limited Partner’s pro rata share of such borrowing, and such tax-exempt Limited Partner shall not participate in such borrowing.]7

Investor Suitability:

Each Limited Partner must be a “qualified purchaser” as defined in the Investment Company Act of 1940, as amended, and must meet certain other financial and suitability criteria established by the General Partner. The relevant qualifications are set forth fully in the subscription documents for the Partnership, which must be completed by each prospective investor. The General Partner reserves the right to reject any subscription in its sole discretion.

Commitment Period:

Capital calls may be required from time to time for a period of [five] years from the Initial Closing (the “Commitment Period”). Thereafter, the Limited Partners will be released from any further obligation with respect to their undrawn Commitments (the “Unfunded Commitments”), except as necessary to (i) cover Partnership Expenses and Management Fees; (ii) complete Investments by the Partnership in respect of transactions committed to by the Partnership prior to the end of the Commitment Period; and (iii) make follow-on Investments (i.e., Investments made for the purpose of protecting or enhancing an existing Investment); provided that the capital contributions for such follow-on Investments after the Commitment Period will not exceed an amount equal to 15% of the aggregate Commitments.8

Closings:

An initial closing for the sale of Interests will be held as soon as practicable (the “Initial Closing”). 3

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The General Partner may accept additional subscriptions (and increases in Commitments by existing Limited Partners) for up to [nine]9 months after the Initial Closing. Limited Partners itted (and existing Limited Partners increasing their Commitments) subsequent to the Initial Closing will pay their pro rata share of all funded Commitments which have been applied to any Investments then held by the Partnership, Management Fees, Organizational Expenses and other Partnership Expenses, and an additional amount equal to the prime rate plus 2% (the “Additional Amount”). Such amounts will be allocated and distributed to previously itted Partners or the Advisor, as applicable, on a pro rata basis. Amounts so distributed to previously itted Partners (other than the Additional Amount) will be restored to such Partners’ Unfunded Commitments and be subject to recall. [If the General Partner in its discretion determines that a pro rata capital contribution from Limited Partners at a subsequent closing would not appropriately reflect a material change in the value of the Investments then held by the Partnership, the General Partner may adjust the capital contribution required to be made by Limited Partners at such subsequent closing to appropriately reflect such change in value.]10 Term:

The Partnership’s term will expire [ten] years after the Initial Closing, but may be extended for up to two consecutive one-year periods in the discretion of the General Partner.

Drawdowns:

Commitments will be drawn down proportionally to Limited Partners’ Unfunded Commitments as needed to fund Investments, Partnership Expenses or Management Fees11 with a minimum of ten business days’ prior written notice to the Limited Partners. [Any amount drawn down from Unfunded Commitments to pay the Management Fee, Organizational Expenses (defined below) or other Partnership Expenses may, to the extent Limited Partners receive subsequent distributions, either be retained or added to Unfunded Commitments and subject to recall.]12 Limited Partners will not be required to fund their capital contributions to the Partnership until the closing date of the Partnership’s first Investment (but will be required to make direct payments in respect of Management Fees and Organizational Expenses).13

[Reinvestment:]

[During the Commitment Period, distributions of proceeds 4

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representing the cost basis of any Investment realized within [18] months of investment will be added back to Unfunded Commitments and may be recalled by the Partnership for reinvestment or other proper Partnership purposes.] (or in the alternative) [Bridge Financings:]

[The Partnership may provide interim financing or guarantees to a portfolio company (“Bridge Financing”) in order to facilitate the Partnership’s investment in such company. A Bridge Financing may not exceed the amount of the Partners’ Unfunded Commitments, and must be at a level that, when added to the amount of any permanent investment in the portfolio company, does not exceed 33% of the total Commitments of the Partnership. All Bridge Financings will be (i) senior to the permanent investment of the Partnership in the portfolio company, (ii) bear interest or carry other compensation at rates not less favorable to the Partnership than those available from und lenders, and (iii) have a final maturity of not more than one year. Capital returned from Bridge Financings which have been refinanced, repaid or sold within one year will be added to the Partners’ Unfunded Commitments and will be subject to recall. Any Bridge Financing which has not been repaid, sold to or refinanced by a third party within one year will be treated as an Investment for all purposes.]

Distributions:

Net cash proceeds from the sale of Investments or any portion of an Investment or marketable securities available for distribution and to be distributed (“Disposition Proceeds”) will be distributed as soon as practicable after receipt thereof. Current cash receipts from dividends, interest and other non-tax distributions from Investments net of expenses (“Current Income”) will be distributed at least annually. The General Partner will be entitled to withhold from any distribution amounts necessary to create, in its discretion, appropriate reserves for expenses and liabilities of the Partnership as well as for any required tax withholdings. Amounts of tax credits received by the Partnership and amounts withheld for taxes will be treated as distributions for purposes of the calculations described below. Distributions of Disposition Proceeds and Current Income (together, “Investment Proceeds”) in respect of each Investment will be made in the first instance to the Limited Partners and the General Partner pro rata in proportion to each of their percentage interests with respect to such Investment. Each Limited Partner’s share of Investment Proceeds will then be distributed to such Limited Partner and the General Partner in the following amounts 5

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and order of priority:14 (1)

Return of Capital and Costs: first, 100% to such Limited Partner until such Limited Partner has received distributions of Investment Proceeds from such Investment and all Investments that have been disposed of (“Realized Investments”) equal to the sum of: (a)

such Limited Partner’s capital contributions for such Investment and all Realized Investments;

(b)

such Limited Partner’s capital contributions for Organizational Expenses, Management Fees and Partnership Expenses allocable to Realized Investments; 15 and

(c)

such Limited Partner’s pro rata share of any net unrealized losses on writedowns of the Partnership’s other Investments;

(2)

Preferred Return: second, 100% to such Limited Partner until the cumulative distributions of Investment Proceeds to such Limited Partner represent an 8% annual rate of return on the cumulative distributions pursuant to clause (1);

(3)

General Partner Catch-up: third, 80% to the General Partner and 20% to such Limited Partner until the cumulative distributions to the General Partner pursuant to this clause (3) equal 20% of the total amounts distributed pursuant to clause (2) and this clause (3); and

(4)

80/20 Split: thereafter, 80% to such Limited Partner and 20% to the General Partner (the distributions to the General Partner described in clause (3) and this clause (4) being referred to as “Carried Interest”).

Distributions relating to the partial disposition of an Investment will be subject to the above distribution formula, with the Carried Interest being based on the original cost of, and the cumulative distributions being made with respect to, the disposed portion of such Investment. Distributions prior to the termination of the Partnership may take the form of cash or marketable securities. Upon the termination of the Partnership, distributions may also include restricted securities 6 039997.4151 NEW YORK 302282 v4

or other assets of the Partnership [for which the General Partner will seek a valuation from an independent investment banking firm or other appropriate valuation experts]. [The Partnership may make distributions to the General Partner in an amount sufficient to permit the payment of the tax obligations of the General Partner and its owners in respect of allocations of income related to the Carried Interest to the extent not previously taken into for such purpose or distributed to the General Partner. Any such distributions shall be taken into in making subsequent distributions to the Partners.]16 Distributions of income from temporary investments will be made among all Partners in proportion to their respective proportionate interests in the Partnership property or funds that produced such income, as reasonably determined by the General Partner. [Distributions relating to Bridge Financings held less than a year will made on a pro rata basis.] Clawback:

Upon termination of the Partnership, the General Partner will be required to restore funds to the Partnership if and to the extent that the General Partner has received cumulative distributions of Carried Interest in excess of amounts otherwise distributable to it under the above distribution formula, applied on an aggregate basis covering all transactions of the Partnership, but in no event will the General Partner be required to restore more than the cumulative Carried Interest distributions received, net of income taxes payable thereon.

Allocation of Profit and Loss:

The Partnership will establish and maintain a capital for each Partner. All items of income, gain, loss and deduction will be allocated to the Partners’ capital s in a manner generally consistent with the distribution provisions outlined above.

Management Fees:

The Partnership will pay a management fee to the Advisor [semiannually/quarterly] in advance during the term of the Partnership (the “Management Fee”), starting on the date of the Initial Closing. During the Commitment Period, the Management Fee will equal [1.5 - 2.0]% per annum of the total Commitments of the Limited Partners. After the Commitment Period, the Management Fee will equal [1.5 – 2.0]% per annum of the funded Commitments of the Limited Partners reduced proportionally by the cost of Realized Investments, calculated as of the last business day preceding each Management Fee payment date.

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The Management Fee will be reduced by certain fees received by the Advisor or its s as more fully described below. Until the Partnership makes its first Investment, the Management Fee will be paid directly by Limited Partners to the Advisor (which payments will reduce their Unfunded Commitments). After the first Investment, the Management Fee will be paid to the Advisor by the Partnership out of capital contributions from the Limited Partners. The Management Fee may also be paid out of the Limited Partners’ share of Investment Proceeds and income from temporary investments . [Prior to the beginning of each year, the Advisor may waive a portion of capital contributions for Management Fees, which waived amount will provide the Advisor or an thereof with a profits interest in all distributions solely out of profits otherwise payable to the Limited Partners with respect to such capital contributions.]17 Offering and Organization Expenses:

The Partnership will bear all costs and expenses incurred in connection with the organization of the Partnership and the General Partner, including legal and ing fees, printing costs, travel and out-of-pocket expenses, and all costs and expenses incurred in connection with the offering of Interests (“Organizational Expenses”), up to a maximum of $[ ]. Any placement or similar fees payable to any placement agent in connection with the offering of Interests will be borne by the General Partner and the Advisor and not by the Partnership.18

Partnership Expenses: The Partnership will be responsible for all expenses relating to its own operations (“Partnership Expenses”), including fees, costs and expenses directly related to the purchase and sale of securities, expenses of custodians, counsel and ants, any insurance, indemnity or litigation expenses, all costs of the Partnership’s istration, including preparation of its financial statements and reports to Limited Partners, costs of holding any meetings of Partners or the Advisory Committee (defined below), and any taxes, fees or other governmental charges levied against the Partnership. In addition, the Partnership shall be responsible for all fees and expenses due any legal, financial, ing, consulting, or other advisors or any lenders, investment banks and other financing sources in connection with transactions which are not consummated (“Broken-Deal Expenses”)[, which the General Partner does not elect to pay.]19 Out-of-pocket expenses associated with completed transactions generally will be 8 039997.4151 NEW YORK 302282 v4

reimbursed by portfolio companies or capitalized as part of the acquisition price of the transaction. General Partner Expenses:

The General Partner and the Advisor will be responsible for all of their day-to-day operating expenses, including office overhead and compensation of employees.

Other Fees:

In connection with the Partnership and its Investments, the General Partner or the Advisor may receive transaction, directors’, consulting, management, investment banking, monitoring, closing, topping, break-up and other similar fees (“Other Fees”). [50]% of such Other Fees will be applied to reduce the Management Fee for the following [semiannual/quarterly] period [(net of any unrecouped Broken-Deal Expenses which the General Partner has elected to pay on behalf of the Partnership)]. To the extent such offsets would reduce the Management Fee for a given [semi-annual/quarterly] period below zero, such offsets will be carried forward and reduce future installments of the Management Fee.

Transfer of Interests and Withdrawal:

A Limited Partner may not sell, assign, or transfer any interest in the Partnership without the prior written consent of the General Partner, which may be given or withheld in the General Partner’s sole and absolute discretion. Further, a Limited Partner generally may not withdraw any amount from the Partnership.

Restriction on Competing Fund:

[Without the approval of the Advisory Committee (defined below),] [u]ntil the earlier of (i) the time at which at least 75% of the Partnership’s Commitments have been invested in or committed or reserved for Investments, Management Fees, or Partnership Expenses or (ii) the end of the Commitment Period, the General Partner and its s will not close, act as general partner of or serve as the primary source of transactions on behalf of, another pooled investment vehicle (other than an alternative investment vehicle or Parallel Fund) with investment objectives substantially similar to those of the Partnership (a “Competing Fund”). If a Competing Fund is organized after at least 75% of the total Commitments are invested in or committed or reserved for Investments, Management Fees and Partnership Expenses, then, until the earlier of (i) the time at which the aggregate capital contributions and amounts committed or reserved for Investments equal at least [85/90%] of the aggregate Commitments (“Full Investment”) or (ii) the end of the Commitment Period, a Competing Fund may only co-invest alongside the Partnership on 9

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the same and conditions in all material respects, with amounts for investment allocated between the Partnership and the Competing Fund on a basis that the General Partner believes in good faith to be fair and reasonable, unless the investment by the Partnership is legally or contractually prohibited or, as a result of the application of law, could have a materially adverse effect on the Partnership or the General Partner. Exclusivity:

Except as provided for above, neither the General Partner nor its s will invest outside of the Partnership in any privately negotiated equity investment that is substantially similar to the types of investments to be made by the Partnership until the earlier of the end of the Commitment Period or Full Investment. The foregoing sentence shall not apply, however, to (i) any investment of under [$5 million] and (ii) ive personal investments, if such investments are not made in portfolio companies of the Partnership.

Reports and Meeting: Annually, the Partnership will furnish audited financial statements to all Limited Partners and tax information necessary for the completion of income tax returns. On a quarterly basis, each Limited Partner will be furnished with unaudited financial statements of the Partnership. In addition, the General Partner will conduct an annual informational meeting for the Limited Partners. Excuse, Exclusion and A Limited Partner may be excused from funding an Investment if its participation would otherwise violate a law or regulation to Withdrawal: which it is subject. The General Partner may exclude a Limited Partner from participating in an Investment if the General Partner determines in good faith that a significant delay, extraordinary expense or materially adverse effect on the Partnership or any of its s, any portfolio company or future Investments is likely to result from such Limited Partner’s participation. The excused or excluded Limited Partner’s Unfunded Commitment will not be reduced as a result of any excuse or exclusion and the General Partner may issue new calls for further capital contributions to the other Limited Partners to the extent of their Unfunded Commitments. A Limited Partner may be required to withdraw from the Partnership if, in the reasonable judgment of the General Partner, by virtue of that Limited Partner’s Interest in the Partnership: (a) assets of the Partnership may be characterized as plan assets for purposes of ERISA or the plan asset regulations under ERISA; (b) the Partnership or any Partner may be subject to any requirement 10 039997.4151 NEW YORK 302282 v4

to under the Investment Company Act of 1940, as amended; or (c) a significant delay, extraordinary expense or material adverse effect on the Partnership or any of its , any portfolio company or any prospective Investment is likely to result. Default:

A Limited Partner that defaults in any required payment in respect of its Commitment shall be subject to certain remedies set forth in the Partnership Agreement, including a 33% reduction in such Limited Partner’s capital .

Amendments:

The Partnership Agreement may be amended by the General Partner with the consent of a majority in interest of the Limited Partners, except that no amendment may (i) increase any Limited Partner’s Commitment, reduce its share of the Partnership’s distributions, income, gains or losses, increase the Management Fee payable by such Limited Partner or materially and adversely affect the rights or obligations of such Limited Partner without the consent of such Limited Partner, (ii) change the percentage of Interests of Limited Partners necessary for any consent required to the taking of an action without the approval of Limited Partners who then hold Interests equal to or in excess of the required Interests for the subject of such proposed amendment or (iii) change the amendment provisions without the consent of each Limited Partner. Notwithstanding the foregoing, the General Partner may amend the Partnership Agreement without the consent of any Limited Partner at any time to comply with applicable laws and regulations and in certain other circumstances set forth in the Partnership Agreement.

Parallel Funds:

Additional partnerships or other vehicles (“Parallel Funds”) may be formed to invest with the Partnership to accommodate the special legal, tax, regulatory or other needs of certain investors. Any investments by Parallel Funds in Investments will be made proportionately, based on the available capital commitments of the Partnership and each Parallel Fund, on the same and conditions as the Partnership, subject to applicable legal, tax or regulatory considerations, and each Parallel Fund will generally share proportionately in Investment expenses. If the General Partner determines to form a Parallel Fund after the Partnership’s commencement date, the General Partner will be authorized to transfer a pro rata portion of the Partnership’s Investments to such Parallel Fund, subject to the provisions 11

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relating to Limited Partners itted at subsequent closings. Alternative Investment Vehicles:

For legal, tax or regulatory reasons, the General Partner may determine that it is in the best interests of the Partners that an Investment be made through an alternative investment vehicle. The General Partner will have the authority to create such vehicles in such circumstances and cause some or all of the Partners’ indirect interests in such Investment to be held through such an alternative vehicle. For purposes of calculating the Carried Interest and Management Fees, any Investments held in an alternative vehicle will be treated as if held by the Partnership.

Co-Investment:

The General Partner may, but is not obligated to, provide coinvestment opportunities to Limited Partners prior to making such opportunities available to third parties.

Advisory Committee:

The General Partner will establish a committee (the “Advisory Committee”) comprised of representatives of selected Limited Partners. The Advisory Committee will provide advice and counsel as requested by the General Partner in connection with potential conflicts of interest and other matters related to the Partnership[; provided that the Advisory Committee will have the right to object to the valuations presented to it by the General Partner.]20

Exculpation; Indemnification:

The General Partner, the Advisor and their s, and their respective , partners, managers, stockholders, officers, directors and employees (each, an “Indemnified Person”) shall not be liable, in damages or otherwise, to the Partnership or to any of the Partners for any act or omission performed or omitted by such Indemnified Person, including losses due to the negligence of brokers or other agents of the Partnership, unless such losses result from an Indemnified Person’s fraud, willful misconduct, gross negligence, bad faith or a violation of applicable securities laws. The Partnership shall indemnify each Indemnified Person for any loss, damage or expense incurred by such Indemnified Person or to which such Indemnified Person may be subject by reason of its activities on behalf of the Partnership or in furtherance of the interest of the Partnership or otherwise arising out of or in connection with the Partnership and its Investments, except that this indemnity shall not apply to (i) losses arising from such Indemnified Person’s own fraud, willful misconduct, gross negligence, bad faith or violation of applicable securities laws; (ii) economic losses incurred by any Indemnified Person as a result of such Indemnified Person’s ownership of an interest in the 12

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Partnership or its portfolio companies; or (iii) expenses of the Partnership that an Indemnified Person has agree to bear. Limited Partners will be obligated to return amounts distributed to them to fund Partnership indemnity obligations, subject to certain limitations set forth in the Partnership Agreement. The General Partner may cause the Partnership to purchase insurance, at the Partnership’s expense, to insure any Indemnified Person against liability in connection with the activities of the Partnership (including in respect of any breach or alleged breach of fiduciary or similar duty). Tax Considerations:

It is intended that, for U.S. federal income tax purposes, the Partnership will be treated as a partnership and will not be treated as a “publicly traded partnership” within the meaning of Section 7704 of the Internal Revenue Code of 1986, as amended. The General Partner will use reasonable efforts not to make any Investment that would generate unrelated business taxable income (“UBTI”) for Limited Partners that are tax-exempt investors; provided that the foregoing shall in no way limit the goal of the Partnership to maximize pre-tax returns to all Partners and shall not apply to the operation of the provision described under “Borrowings” or with the Management Fee offset described under “Other Fees.” Investors should carefully review the discussion in Section [__] [“Certain Tax and Regulatory Considerations.”]

ERISA:

The General Partner intends to operate the Partnership as a “venture capital operating company” or meet another exemption from the plan asset regulations so that assets of the Partnership will not be considered “plan assets” under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Investors subject to ERISA should carefully review the discussion under Section [__] [“Certain Tax and Regulatory Considerations.”]

Legal Counsel:

Akin Gump Strauss Hauer & Feld LLP (“Akin Gump”) is acting as legal counsel to the Partnership in connection with the offering of limited partner interests. Akin Gump also acts as legal counsel to the General Partner and the Advisor. In connection with this offering and subsequent advice to the Partnership, the General Partner and the Advisor, Akin Gump will not be representing the Limited Partners.

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Auditors:

[_________________]

[Placement Agent:]

[_________________]

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Endnotes 1

This document is a model term sheet for a typical private equity fund (i.e., a fund that makes privately negotiated equity and equity related investments generally in non-public companies). The package of described herein represents a “market standard” for a typical private equity fund. There are many variations in these which are more or less GP favorable. The final of a particular fund will reflect the outcome of negotiations between the GP and the LPs. 2

It is typical to have some form of limitation on the Partnership’s ability to make straight debt investments.

3

A minimum amount of Commitments which must be secured prior to the Initial Closing may be required by institutional investors. This is typically at least 50% of the target size of the Partnership.

4

Although general partners and managers of funds have generally been formed as limited liability companies, it may be preferable for tax purposes to form them as limited partnerships. This should be discussed with the tax partner advising on the Partnership. 5

This provision gives the GP flexibility in investing additional amounts in the Partnership’s investments without raising “cherry-picking” concerns on the part of LPs. 6

Modify, supplement or delete as appropriate.

7

Consider adding this provision to address UBTI concerns of tax-exempt LPs.

8

If early termination of the Partnership is to be provided for, consider the following three provisions: Early Termination Cause

for

Limited Partners representing at least [two thirds] in interest of the Partners will have the right to remove the General Partner and the Advisor for “cause”. “Cause” is defined as (A) a breach of the General Partner’s obligation to make capital contribution and to fund General Partner expenses in accordance with the Partnership Agreement; (B) a finding by any court or governmental body of competent jurisdiction in a final judgment, or an ission by the General Partner or the Advisor in a settlement of any lawsuit, that the General Partner or the Advisor has otherwise committed a material breach of its duties under the Partnership Agreement or the Advisory Agreement , as the case may be, or a material violation of applicable securities laws which has a material adverse effect on the business of the Partnership or the ability of the General Partner or the Advisor to perform their respective duties under the of the Partnership Agreement or the Advisory Agreement, as the case may be; or (C) fraud, bad faith or willful misconduct by the General Partner or the Advisor in connection with the performance of their respective duties under the of the Partnership Agreement or the Advisory Agreement, as the case may be. The General Partner and the Advisor shall be entitled to cure any finding of cause in accordance with the procedures set forth in the Partnership Agreement.

No Fault Termination

Limited Partners representing at least 85% in interest of the Limited Partners may vote at any time and for any reason to [terminate the Commitment Period] [or dissolve the Partnership].

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Key Man

If [insert appropriate number] of the Principals cease for any reason to be actively involved in the Partnership’s affairs (a “Key Man Event”), the General Partner will notify the Limited Partners and Limited Partners representing at least [two-thirds] in interest of the Limited Partners may elect within 60 days of such notice to terminate the Commitment Period, provided that any such termination shall not affect the Partnership’s obligation to fund amounts which it or any was contractually obligated to fund prior to the occurrence of such Key Man Event.

9

The period during which additional subscriptions may be accepted typically varies between 6 and 12 months. If the Partnership’s investment program includes asset classes which are likely to change materially in value in the short term (e.g., mezzanine investments), a shorter closing period is more appropriate to avoid subsequent investors buying into existing portfolio investments at cost plus 2% where the value of the investment has increased materially more than the prime rate plus 2%. 10

Consider adding this provision to give the GP flexibility in allowing new LPs to participate in deals that have materially appreciated in value.

11

This assumes that Management Fees are included in the Commitment. If they are to be in addition to the Commitment, this wording must be modified.

12

This provision allows the Partnership to invest substantially all of the Commitments without having to reserve a portion thereof for Management Fees and other expenses. The maximum liability of the LPs remains limited to their individual Commitments and is therefore generally acceptable to them.

13

This direct payment provision is intended to allow the GP to be reimbursed for Organizational Expenses and the Advisor to collect Management Fees prior to Partnership’s first Investment without creating a “plan asset” issue for ERISA investors.

14

There are precedents for certain private equity funds, including mezzanine funds, having separate distribution waterfalls for current income and disposition proceeds. In these cases current income is distributed without regard to recovery of invested capital or writedowns but typically includes recovery of any realized losses and a preferred return on the Investment generating the current income.

15

Note that some funds do not return Management Fees before the Carried Interest is paid to the GP.

16

Bracketed language is appropriate where the sponsor is a boutique, but should be deleted if sponsor is a financial institution with other revenue sources.

17

This provision and the mechanics of the Management Fee waiver should be discussed with the client before inclusion in the term sheet. 18

Consider as an alternative having placement fees paid by the Partnership, subject to a dollar-for-dollar reduction of the Management Fee. This provides a tax benefit to the GP by transferring the non-deductible syndication expense to the LPs. 19

To the extent the General Partner funds these costs, it may be reimbursed out of future transaction fees (see “Other Fees”). This arrangement allows the Partnership to invest all its Commitments in actual Investments without regard to busted deal costs.

20

The proviso is a right commonly requested by institutional LPs.

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