As the subscription credit facility (each, a “Facility”) market has evolved further from its real estate fund roots and deeper into the buyout fund and private equity world, lenders (each, a “Lender”) active in the space have increasingly found overcall limitations (“Overcall Limitations”) in the partnership agreements or other governing documents of their prospective fund borrowers (each, a “Fund”).

These Overcall Limitations take various forms, but in each case limit the ability of the Fund to call capital (each, a “Capital Call”) from its limited partners (each, an “Investor”) to make up for shortfalls created by other Investors’ failure to fund their Capital Calls. Such Overcall Limitations fundamentally conflict with a Lender’s general expectation in a Facility that each Investor is jointly and severally obligated to fund Capital Calls up to the full amount of its unfunded capital commitment.

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