Key Person Clause

Key Person Clause is a provision in the contract wherein if a specified number of key named executives ceases to devote a specificed amount of time to the Partnership (may include the time spend on other funds), the fund manager is prohibited from making any further new investments during the commitment period until such a time that new replacement key executives are appointed. In contractual clause, the fund managers are discouraged from exiting the investment to allow them to devote their time and management to their specific project. It similarly protects the investors' best interests by disallowing the investment firms or fund managers from making significant decisions without their consent expressed through their key person. However, there are instances wherein managers may be permitted to make any investments that had already been agreed upon prior to the the date when key executives are replaced with new appointees.

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