BERKLEY ASSET FUND I, LP Governance Guidelines
Berkley Asset Management LLC (“BAM”) has developed and adopted a set of corporate governance principles (the "Guidelines") to promote the functioning of its committees and to set forth a common set of expectations as to how the Committees should perform their functions.
2. Investment Committee
The Investment Committee shall receive detailed written summaries from the Principals of BAM (the “Principals”) of any potential acquisitions the Principals are interested in causing Berkley Asset Fund I, L.P. (“BAF”) to undertake, prior to committing to such investment, the Investment Committee must review the written summary of each potential investment and, within seven (7) business days of receiving such summary, must vote whether or not to pursue such investment. The responsibility of the members of the Investment Committee is limited to determining whether such member reasonably believes that the applicable potential investment would, from an investment perspective based on the financial information presented, be in the best interests of BAF. The members of the Investment Committee shall not be responsible for reviewing whether such potential investment violates or may violate any investment restrictions or other limitations applicable to BAF. If a member of the Investment Committee has a potential conflict of interest in such potential investment, he shall inform the Principals about this potential conflict of interest and shall recuse himself from voting on such investment. Prior to, or in conjunction with, voting, the members of the Investment Committee must meet in person at the office of the General Partner, or such other location as agreed to by the members. At such meeting, the members of the Investment Committee shall discuss the applicable potential investment and provide any insight they may have. Minutes of such meeting shall be kept by the Chairman or Vice Chairman of the Investment Committee. Each vote by the Investment Committee on a potential investment shall be referred to herein as an “Investment Meeting.” The votes of the Investment Committee at an Investment Meeting may be cast telephonically, by mail or via email to the Chairman of the Investment Committee, but may not be voted via proxy to any other person or entity. The affirmative vote of a majority of a quorum at an Investment Meeting who vote upon a potential investment is required for the approval of any investment to be made by BAF. A quorum, which consists of a minimum of three (3) members at the Investment Meeting, is necessary for an investment to be considered. In the event there is a voting tie, the Managing Member of BAM shall have the right to cast the tie breaking vote. All votes disapproving a potential investment must be accompanied by a brief letter of explanation summarizing the reasons for such vote. The members of the Investment Committee will attend all meetings called by the Principals including the annual meeting and shall attend such meetings in person when requested by the Principals. The members of the Investment Committee will hold membership interests in the General Partner and shall, therefore, have a vested interest in the approval or disapproval of any investment by BAF. The review of a potential investment by the Investment Committee does not guarantee a positive outcome. Such a review is undertaken in order to ensure that BAF’s investments are thoroughly processed.
3. Oversight Committee
The Oversight Committee shall inform the Principals about any potential conflict of interest a member of the Oversight Committee may have with an investment so that the Advisory Committee (as discussed below) may be contacted in order to obtain their approval. The Oversight Committee shall occasionally advise the Principals in the valuations of potential investments of BAF, when the Principals request such advice. The Oversight Committee shall also assist BAM in the quarterly valuation of the real estate assets held by BAF, when the Principals request such assistance. Additionally, the Oversight Committee shall assist the Advisory Committee in its policing of conflicts of interest when the Advisory Committee requests such assistance. The Oversight Committee shall be reasonably available to the limited partners of BAF so that such limited partners may communicate their questions or concerns to the Managing Member and the Principals. In the event a member receives any such questions or concerns, the applicable Oversight Committee member shall relay the questions or concerns to the Managing Member and the Principals within a reasonable time. Thereafter, if an issue presented to the Principals warrants a response, it shall be communicated to the applicable limited partner(s) within a reasonable time via the Oversight Committee member who brought the issue to the Managing Member and Principals. Furthermore, the Oversight Committee shall perform any additional special services reasonably requested by the Managing Member or the Principals and shall attend the meetings of the members of BAM. If the Principals require the members of the Oversight Committee to appear at BAM’s office in person, BAM shall reimburse the attending members of the Oversight Committee for all reasonable travel, lodging, food and beverage expenses incurred thereby. If applicable, the Oversight Committee shall present to the Chairwoman of the Oversight Committee a summary of any advice or assistance such member provided to the Principals or the Advisory Committee.
4. Advisory Committee
The Advisory Committee is comprised of three representatives, each of whom are a limited partner of BAF (a “Limited Partner”) or were appointed by a Limited Partner. They were selected as follows: (i) the three Limited Partners with the highest percentage of limited partnership interest each chose one member; and (ii) in the event there was less than three Limited Partners with percentages higher than other Limited Partners who desired to appoint a member, the remaining members of the Advisory Committee were chosen by the Limited Partners or Limited Partner with the earliest subscription dates, who had not chosen an Advisory Committee member.
The Advisory Committee was formed for the sole and limited purpose of (i) approving any restricted transactions, (ii) approving any transaction with or in any entity or person affiliated with any Limited Partner or any member of BAM, (iii) advising BAM from time to time on certain business and administrative matters, (iv) approving BAM’s annual valuation of the real estate assets held by BAF, (v) assist BAM in selecting an independent appraiser when BAM is unable to determine the value of land or land improvements, and (vi) approving BAM’s intention to reserve more than $500,000 of the proceeds of BAF after a distribution to the Limited Partners.
BAM does not believe it should establish term limits for any committee members.
6. Board Meetings
There are approximately ten meetings of the Investment Committee per year and approximately six additional meetings per year that the members of the Investment Committee are required to attend in person, including an annual meeting. Meetings will be scheduled upon reasonable notice.
There are approximately 2 meetings of the Investment Committee per year that members will be required to attend in person including an annual meeting. Otherwise, participation will be via email and telephone. Meetings will be scheduled upon reasonable notice.
A meeting of the Advisory Committee may be called at any time by BAM, but in no event shall meetings of the Advisory Committee be held less frequently than annually. Meetings of the Advisory Committee shall be held at BAM's principal business office, or at such other place as BAM shall determine. A duly called meeting of the Advisory Committee shall not be organized for the transaction of business unless a quorum is present. The presence of a majority in number of the members of the Advisory Committee shall constitute a quorum. The Advisory Committee shall also be invited to attend the annual meeting of the members of BAM.
7. Reliance on Outside Advice
BAM is entitled to rely on the advice, reports and opinions of counsel, accountants, auditors and other expert advisors. BAM shall have the authority to retain and approve the fees and retention terms of its outside advisors.