ROBECO-SAGE TRITON
MASTER FUND, L.L.C.
(A DELAWARE LIMITED LIABILITY COMPANY)
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LIMITED LIABILITY COMPANY AGREEMENT
DATED AS OF SEPTEMBER 8, 2008
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS 1
ARTICLE II ORGANIZATION; ADMISSION OF MEMBERS.................................7
2.1 Formation of Limited Liability Company.............................7
2.2 Name...............................................................7
2.3 Principal and Registered Office....................................7
2.4 Duration...........................................................7
2.5 Business of the Company............................................7
2.6 Board of Managers..................................................8
2.7 Members............................................................9
2.8 Organizational Member..............................................9
2.9 Both Managers and Members..........................................9
2.10 Limited Liability..................................................9
ARTICLE III MANAGEMENT 9
3.1 Management and Control.............................................9
3.2 Actions by the Board of Managers..................................10
3.3 Officers..........................................................11
3.4 Meetings of Members...............................................12
3.5 Custody of Assets of the Company..................................12
3.6 Other Activities of Members and Managers..........................13
3.7 Duty of Care......................................................13
3.8 Indemnification...................................................13
3.9 Fees, Expenses and Reimbursement..................................15
ARTICLE IV TERMINATION OF STATUS OF ADVISER AND MANAGERS;
TRANSFERS AND REPURCHASES......................................16
4.1 Termination of Status of the Adviser..............................16
4.2 Termination of Status of a Manager................................16
4.3 Removal of the Managers...........................................16
4.4 Transfer of Units of Members......................................17
4.5 Repurchase of Units...............................................18
ARTICLE V CAPITAL 19
5.1 Contributions to Capital..........................................19
5.2 Rights of Members to Capital......................................20
5.3 Capital Accounts..................................................20
5.4 Allocation of Net Profit and Net Loss; Allocation of
Offering Costs....................................................20
5.5 Allocation of Certain Expenditures................................21
5.6 Reserves..........................................................21
5.7 Allocation of Organization Expenses...............................22
5.8 Tax Allocations...................................................22
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5.9 Adjustments to Take Account of Certain Events.....................24
5.10 Distributions.....................................................24
5.11 Withholding.......................................................24
ARTICLE VI DISSOLUTION AND LIQUIDATION.......................................25
6.1 Dissolution.......................................................25
6.2 Liquidation of Assets.............................................25
ARTICLE VII ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS.....................26
7.1 Accounting and Reports............................................26
7.2 Determinations by the Board of Managers...........................27
7.3 Valuation of Assets...............................................27
ARTICLE VIII MISCELLANEOUS PROVISIONS........................................28
8.1 Amendment of Limited Liability Company Agreement..................28
8.2 Special Power of Attorney.........................................29
8.3 Notices...........................................................30
8.4 Agreement Binding Upon Successors and Assigns.....................30
8.5 Applicability of 1940 Act and Form N-2............................31
8.6 Choice of Law; Arbitration........................................31
8.7 Not for Benefit of Creditors......................................32
8.8 Consents..........................................................32
8.9 Merger and Consolidation..........................................32
8.10 Pronouns. 32
8.11 Confidentiality...................................................33
8.12 Certification of Non-Foreign Status...............................33
8.13 Severability......................................................34
8.14 Filing of Returns.................................................34
8.15 Tax Matters Partner...............................................34
8.16 Tax Elections.....................................................35
8.17 Member Tax Basis..................................................35
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ROBECO-SAGE TRITON MASTER FUND, L.L.C.
LIMITED LIABILITY COMPANY AGREEMENT
THIS LIMITED LIABILITY COMPANY AGREEMENT of Robeco-Sage Triton Master
Fund, L.L.C. (the "Company") is dated as of September 8, 2008, by and among
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ III, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
those persons hereinafter admitted as Members.
W I T N E S S E T H :
WHEREAS, the Company has heretofore been formed as a limited liability
company under the Delaware Limited Liability Company Act pursuant to an initial
Certificate of Formation (the "Certificate") dated and filed with the Secretary
of State of Delaware on July 25, 2008.
NOW, THEREFORE, for and in consideration of the foregoing and the
mutual covenants hereinafter set forth, it is hereby agreed as follows:
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ARTICLE I
DEFINITIONS
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For purposes of this Agreement:
ADMINISTRATOR The person who provides administrative
services to the Company pursuant to an
administrative services agreement.
ADVISER The person who at any particular time
serves as the investment adviser to the
Company pursuant to an Investment
Advisory Agreement.
ADVISERS ACT The Investment Advisers Act of 1940
and the rules, regulations and orders
thereunder, as amended from time to
time, or any successor law.
AFFILIATE An affiliated person, as such term is
defined by the 1940 Act, of a person.
AGREEMENT This Limited Liability Company
Agreement, as amended from time to time.
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BOARD OF MANAGERS The Board of Managers established
pursuant to Section 2.6 hereof. CAPITAL
ACCOUNT With respect to each Member, the
capital account established and
maintained on behalf of each Member
pursuant to Section 5.3 hereof.
CAPITAL PERCENTAGE A percentage established for each Member
on the Company's books as of each
Expense Allocation Date. The Capital
Percentage of a Member on an Expense
Allocation Date shall be determined by
dividing the amount of capital
contributed to the Company by the Member
pursuant to Section 5.1 hereof by the
sum of the capital contributed to the
Company by each Member pursuant to
Section 5.1 hereof on or prior to such
Expense Allocation Date. The sum of the
Capital Percentages of all Members on
each Expense Allocation Date shall equal
100%.
CERTIFICATE The Certificate of Formation of the
Company and any amendments thereto as
filed with the office of the Secretary
of State of Delaware.
CLOSING DATE The first date on or as of which a
Member other than the Organizational
Member is admitted to the Company. CODE
The United States Internal Revenue Code
of 1986, as amended from time to time,
or any successor law.
COMPANY The limited liability company governed
hereby, as such limited liability
company may from time to time be
constituted.
DELAWARE ACT The Delaware Limited Liability Company
Act as in effect on the date hereof and
as amended from time to time, or any
successor law.
EXPENSE ALLOCATION DATE The Closing Date, and thereafter each
day on or before the expiration of the
calendar year following the Closing
Date, as of which a contribution to the
capital of the Company is made pursuant
to Section 5.1 hereof.
FISCAL PERIOD The period commencing on the Closing
Date, and thereafter each period
commencing on the day immediately
following the last day of the preceding
Fiscal Period, and ending at the close
of business on the first to occur of the
following dates:
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(1) the last day of a Fiscal Year;
(2) the last day of a Taxable Year;
(3) the day preceding any day as of
which a contribution to the
capital of the Company is made
pursuant to Section 5.1 hereof;
(4) any day on which the Company
repurchases any Units of any
Member; or
(5) any day (other than one
specified in clause (2) above)
as of which this Agreement
provides for any amount to be
credited to or debited against
the Capital Account of any
Member, other than an amount
to be credited to or debited
against the Capital Accounts
of all Members in accordance
with their respective
Investment Percentages.
FISCAL YEAR The period commencing on the Closing
Date and ending on March 31, 2009, and
thereafter each period commencing on
April 1 of each year and ending on March
31 of each succeeding year (or on the
date of a final distribution pursuant to
Section 6.2 hereof), unless and until
the Board of Managers shall elect
another fiscal year for the Company.
FORM N-2 The Company's Registration Statement
on Form N-2 filed with the Securities
and Exchange Commission, as amended from
time to time.
INDEPENDENT MANAGERS Those Managers who are not "interested
persons," as such term is defined by the
1940 Act, of the Company.
INITIAL MANAGER ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
INVESTMENT ADVISORY AGREEMENT A separate written agreement entered
into by the Company pursuant to which
the Adviser provides Management Services
to the Company.
INVESTMENT FUNDS Unregistered investment funds and
registered investment companies.
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INVESTMENT PERCENTAGE A percentage established for each Member
on the Company's books as of the first
day of each Fiscal Period. The
Investment Percentage of a Member for a
Fiscal Period shall be determined by
dividing the balance of the Member's
Capital Account as of the commencement
of such Fiscal Period by the sum of the
Capital Accounts of all of the Members
as of the commencement of such Fiscal
Period. The sum of the Investment
Percentages of all Members for each
Fiscal Period shall equal 100%.
MANAGEMENT SERVICES Such investment advisory and other
services as the Adviser is required to
provide to the Company pursuant to the
Investment Advisory Agreement as
contemplated by Section 3.9(a) hereof.
MANAGER An individual designated as a manager of
the Company pursuant to the provisions
of Section 2.6 hereof and who serves on
the Board of Managers of the Company.
MEMBER Any person who shall have been admitted
to the Company as a member (including
any Manager in such person's capacity as
a member of the Company but excluding
any Manager in such person's capacity as
a Manager of the Company) until the
Company repurchases all of the Units of
such person as a member pursuant to
Section 4.5 hereof or a substituted
Member or Members are admitted with
respect to all of any such person's
Units as a member pursuant to Section
4.4 hereof; such term includes the
Adviser to the extent the Adviser makes
a capital contribution to the Company
and shall have been admitted to the
Company as a member.
NET ASSETS The total value of all assets of the
Company, less an amount equal to all
accrued debts, liabilities and
obligations of the Company, calculated
before giving effect to any repurchases
of Units to be effected as of the date
such value is determined.
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NET PROFIT OR NET LOSS The amount by which the Net Assets as of
the close of business on the last day of
a Fiscal Period exceed (in the case of
Net Profit) or are less than (in the
case of Net Loss) the Net Assets as of
the commencement of the same Fiscal
Period (or, with respect to the initial
Fiscal Period of the Company, as of the
close of business on the Closing Date),
such amount to be adjusted to exclude
any items to be allocated among the
Capital Accounts of the Members on a
basis that is not in accordance with the
respective Investment Percentages of all
Members as of the commencement of such
Fiscal Period pursuant to Sections 5.5
and 5.6 hereof.
1940 ACT The Investment Company Act of 1940, as
amended, and the rules, regulations and
orders thereunder, as amended from time
to time, or any successor law.
OFFICER An individual designated as an officer
of the Company pursuant to the
provisions of Section 3.3 hereof and who
serves as an officer of the Company.
ORGANIZATION EXPENSES The expenses incurred by the Company in
connection with its formation, its
initial registration as an investment
company under the 1940 Act, and the
initial offering of Units.
ORGANIZATIONAL MEMBER Robeco-Sage Triton Fund, L.L.C.
PORTFOLIO FUNDS The private investment funds, joint
ventures, investment companies and other
similar investment vehicles into which
the Company invests substantially all of
its assets.
PORTFOLIO MANAGERS A select group of portfolio managers who
manage the Portfolio Funds.
SECURITIES Securities (including, without
limitation, equities, debt obligations,
options, and other "securities" as that
term is defined in Section 2(a)(36) of
the ▇▇▇▇ ▇▇▇) and any contracts for
forward or future delivery of any
security, debt obligation or currency,
or commodity, all types of derivative
instruments and financial instruments
and any contracts based on any index or
group of securities, debt obligations or
currencies, or commodities, and any
options thereon, as well as investments
in registered investment companies and
private investment funds, including
Portfolio Funds.
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TAXABLE YEAR The 12-month period ending December 31
of each year.
TRANSFER The assignment, transfer, sale,
encumbrance, pledge or other disposition
of all or any portion of Units,
including any right to receive any
allocations and distributions
attributable to such Units.
UNIT The value of each Member's Capital
Account shall be expressed in terms of a
number of Units, including fractional
Units.
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ARTICLE II
ORGANIZATION; ADMISSION OF MEMBERS
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2.1 FORMATION OF LIMITED LIABILITY COMPANY.
The Board of Managers shall execute and file in accordance with the
Delaware Act any amendment to the Certificate and shall execute and file with
applicable governmental authorities any other instruments, documents and
certificates that, in the opinion of the Company's legal counsel, may from time
to time be required by the laws of the United States of America, the State of
Delaware or any other jurisdiction in which the Company shall determine to do
business, or any political subdivision or agency thereof, or that such legal
counsel may deem necessary or appropriate to effectuate, implement and continue
the valid existence and business of the Company.
2.2 NAME.
The name of the Company shall be "Robeco-Sage Triton Master Fund,
L.L.C." or such other name as the Board of Managers may hereafter adopt upon (i)
causing an appropriate amendment to the Certificate to be filed in accordance
with the Delaware Act and (ii) taking such other actions as may be required by
law.
2.3 PRINCIPAL AND REGISTERED OFFICE.
The Company shall have its principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other place designated from time to time
by the Board of Managers.
The Company shall have its registered office in Delaware at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and shall have National Corporate
Research, Ltd. as its registered agent for service of process in Delaware,
unless and until a different registered office or agent is designated by the
Board of Managers.
2.4 DURATION.
The term of the Company commenced on the filing of the
Certificate with the Secretary of State of Delaware and shall continue until the
Company is dissolved pursuant to Section 6.1 hereof.
2.5 BUSINESS OF THE COMPANY.
(a) The business of the Company is to purchase, sell (including short
sales), invest and trade in Securities, on margin or otherwise, to engage in any
financial or derivative transactions relating thereto or otherwise and to engage
in any and all transactions permitted under applicable law including, without
limitation, acting as a "master fund" for any entity or
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entities admitted by the Board of Managers as Members. The Company may execute,
deliver and perform all contracts, agreements, purchase orders and other
undertakings and engage in all activities and transactions as may in the opinion
of the Board of Managers be necessary or advisable to carry out its objective or
business. The Company shall be operated subject to any applicable restrictions
of the Bank Holding Company Act of 1956, as amended.
(b) The Company shall operate as a closed-end, non-diversified,
management investment company in accordance with the 1940 Act and subject to any
fundamental policies and investment restrictions as may be adopted by the Board
of Managers and in accordance with the 1940 Act.
2.6 BOARD OF MANAGERS.
(a) Prior to the Closing Date, the Initial Manager may designate such
persons who shall agree to be bound by all of the terms of this Agreement to
serve as the Managers on the Board of Managers, subject to the election of such
persons prior to the Closing Date by the Organizational Member. By signing this
Agreement or signing an investor application or certification in connection with
the purchase of Units, a Member admitted on the Closing Date shall be deemed to
have voted for the election of each of the Managers so designated. After the
Closing Date, the Board of Managers may, subject to the provisions of paragraphs
(a) and (b) of this Section 2.6 with respect to the number of and vacancies in
the position of Manager and the provisions of Section 3.4 hereof with respect to
the election of Managers to the Board of Managers by Members, designate any
person who shall agree to be bound by all of the terms of this Agreement as a
Manager. The names and mailing addresses of the Managers shall be set forth in
the books and records of the Company. The number of Managers shall be fixed from
time to time by the Board of Managers.
(b) Each Manager shall serve on the Board of Managers for the duration
of the term of the Company, unless his or her status as a Manager shall be
sooner terminated pursuant to Section 4.2 hereof. In the event of any vacancy in
the position of Manager, the remaining Managers may appoint an individual to
serve in such capacity; so long as immediately after such appointment at least
two-thirds (2/3) of the Managers then serving would have been elected by the
Members. The Board of Managers may call a meeting of Members to fill any vacancy
in the position of Manager, and shall do so within 60 days after any date on
which Managers who were elected by the Members cease to constitute a majority of
the Managers then serving on the Board of Managers.
(c) In the event that no Manager remains to continue the business of
the Company, the Adviser shall promptly call a meeting of the Members, to be
held within 60 days after the date on which the last Manager ceased to act in
that capacity, for the purpose of determining whether to continue the business
of the Company and, if the business shall be continued, of electing Managers to
the Board of Managers. If the Members shall determine at such meeting not to
continue the business of the Company or if the required number of Managers is
not elected within 60 days after the date on which the last Manager ceased to
act in that capacity, then the Company shall be dissolved pursuant to Section
6.1 hereof and the assets of the Company shall be liquidated and distributed
pursuant to Section 6.2 hereof.
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2.7 MEMBERS.
The Board of Managers may admit one or more Members generally at the
beginning of each month; PROVIDED, HOWEVER, that the Company may, in the
discretion of the Board of Managers, admit Members more or less frequently.
Subject to the foregoing terms, Members may be admitted to the Company subject
to the condition that each such Member shall execute an appropriate signature
page of this Agreement or of the Company's investor certification pursuant to
which such Member agrees to be bound by all the terms and provisions of this
Agreement. The Board of Managers may in its absolute discretion reject any
purchase of Units. The admission of any person as a Member shall be effective
upon the revision of the books and records of the Company to reflect the name
and the contribution to the capital of the Company of such additional Member.
2.8 ORGANIZATIONAL MEMBER.
Upon the admission of any Member, the Organizational Member may
withdraw from the Company as the Organizational Member and shall be entitled to
the return of his or her Capital Contribution, if any, without interest or
deduction.
2.9 BOTH MANAGERS AND MEMBERS.
A Member may at the same time be a Manager and a Member, in which
event such Member's rights and obligations in each capacity shall be determined
separately in accordance with the terms and provisions of this Agreement or as
provided in the Delaware Act.
2.10 LIMITED LIABILITY.
Except as provided under applicable law, a Member shall not be liable
for the Company's debts, obligations and liabilities in any amount in excess of
the capital account balance of such Member, plus such Member's share of
undistributed profits and assets. Except as provided under applicable law, a
Manager shall not be liable for the Company's debts, obligations and
liabilities.
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ARTICLE III
MANAGEMENT
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3.1 MANAGEMENT AND CONTROL.
(a) Management and control of the business of the Company shall be
vested in the Board of Managers, which shall have the right, power and
authority, on behalf of the Company and in its name, to exercise all rights,
powers and authority of Managers under the Delaware Act and to do all things
necessary and proper to carry out the objective and business of the Company and
their duties hereunder. No Manager shall have the authority individually to act
on behalf of or to bind the Company except within the scope of such Manager's
authority as
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delegated by the Board of Managers. The parties hereto intend that, except to
the extent otherwise expressly provided herein, (i) each Manager shall be vested
with the same powers, authority and responsibilities on behalf of the Company as
are customarily vested in each director of a Delaware corporation and (ii) each
Independent Manager shall be vested with the same powers, authority and
responsibilities on behalf of the Company as are customarily vested in each
director of a closed-end management investment company registered under the 1940
Act that is organized as a Delaware corporation who is not an "interested
person," as such term is defined by the 1940 Act, of such company. During any
period in which the Company shall have no Managers, the Adviser shall continue
to serve as the investment adviser of the Company and to provide the Management
Services to the Company.
(b) Each Member agrees not to treat, on his personal income tax return
or in any claim for a tax refund, any item of income, gain, loss, deduction or
credit in a manner inconsistent with the treatment of such item by the Company.
The Board of Managers shall have the exclusive authority and discretion to make
any elections required or permitted to be made by the Company under any
provisions of the Code or any other revenue laws.
(c) Members, in their capacity as Members, shall have no right to
participate in and shall take no part in the management or control of the
Company's business and shall have no right, power or authority to act for or
bind the Company. Members shall have the right to vote on any matters only as
provided in this Agreement or on any matters that require the approval of the
holders of voting securities under the 1940 Act or as otherwise required in the
Delaware Act.
(d) The Board of Managers may delegate to any other person any rights,
power and authority vested by this Agreement in the Board of Managers to the
extent permissible under applicable law, and may appoint persons to serve as
officers of the Company, with such titles and authority as may be determined by
the Board of Managers consistent with applicable law.
3.2 ACTIONS BY THE BOARD OF MANAGERS.
(a) Unless provided otherwise in this Agreement, the Board of Managers
shall act only: (i) by the affirmative vote of a majority of the Managers
(including the vote of a majority of the Independent Managers if required by the
▇▇▇▇ ▇▇▇) present at a meeting duly called at which a quorum of the Managers
shall be present (in person or, if in person attendance is not required by the
1940 Act, by telephone) or (ii) by unanimous written consent of all of the
Managers without a meeting, if permissible under the ▇▇▇▇ ▇▇▇.
(b) The Board of Managers may designate from time to time a Principal
Manager who shall preside at all meetings of the Board of Managers. If
applicable provisions of the 1940 Act so require, only an Independent Manager
shall serve as the Principal Manager. Meetings of the Board of Managers may be
called by the Principal Manager or by any two Managers, and may be held on such
date and at such time and place as the Board of Managers shall determine. Each
Manager shall be entitled to receive written notice of the date, time and place
of such meeting within a reasonable time in advance of the meeting. Except as
otherwise required by the 1940 Act, notice need not be given to any Manager who
shall attend a meeting
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without objecting to the lack of notice or who shall execute a written waiver of
notice with respect to the meeting. Managers may attend and participate in any
meeting by telephone except where in person attendance at a meeting is required
by the 1940 Act. A majority of the Managers shall constitute a quorum at any
meeting.
3.3 OFFICERS.
(a) The executive Officers of the Company may include a President, a
Treasurer, a Secretary, a Chief Financial Officer and a Chief Compliance
Officer. If the Board of Managers has designated a Principal Manager pursuant to
Section 3.2(b) hereof, then the Principal Manager shall also be an executive
Officer. The Board of Managers may elect one or more Vice-Presidents, and each
such Vice-President shall be an executive Officer. The President shall be the
chief executive officer of the Company. The Principal Manager, if there be one,
shall be elected from among the persons serving as Managers, but no other
Officer need be a Manager. The Board of Managers may also elect, or may delegate
to the President authority to appoint, remove, or fix the duties, compensation
or terms of office of, one or more other Officers as the Board of Managers shall
at any time and from time to time deem to be advisable. Any two or more
positions of Officer, except those of President and Vice-President, may be held
by the same person. Unless there are no other officers at the time of acting, a
person holding more than one office may not act in more than one capacity to
execute, acknowledge or verify on behalf of the Company an instrument required
by law to be executed, acknowledged and verified by more than one Officer.
(b) Each Officer shall hold office until his successor is elected or
appointed or until his earlier displacement from office by resignation, removal
or otherwise; provided, that if the term of office of any Officer shall have
been fixed by the Board of Managers, or by the President acting under authority
delegated by the Board of Managers, such Officer shall cease to hold such office
no later than the date of expiration of such term, regardless of whether any
other person shall have been elected or appointed to succeed him. Any Officer
may resign at any time by written notice to the Company. Any Officer may be
removed at any time by the Board of Managers or by the President acting under
authority delegated by the Board of Managers if in its or his judgment the best
interest of the Company would be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an Officer shall not of itself create contract rights
between the Company and such Officer.
(c) If the office of any Officer becomes vacant for any reason, the
vacancy may be filled by the Board of Managers or by the President acting under
authority delegated by the Board of Managers. Each Officer elected or appointed
to fill a vacancy shall hold office for the balance of the term for which his
predecessor was elected or appointed.
(d) All Officers as between themselves and the Company shall have such
powers, perform such duties and be subject to such restrictions, if any, in the
management of the Company as may be provided in this Agreement or, to the extent
not so provided, as may be prescribed by the Board of Managers or by the
President acting under authority delegated by the Board of Managers.
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3.4 MEETINGS OF MEMBERS.
(a) Actions requiring the vote of the Members may be taken at any duly
constituted meeting of the Members at which a quorum is present. Meetings of the
Members may be called by the Board of Managers or by Members holding 25% or more
of the total number of votes eligible to be cast by all Members, and may be held
at such time, date and place as the Board of Managers shall determine. The Board
of Managers shall arrange to provide written notice of the meeting, stating the
date, time and place of the meeting and the record date therefor, to each Member
entitled to vote at the meeting within a reasonable time prior thereto. Failure
to receive notice of a meeting on the part of any Member shall not affect the
validity of any act or proceeding of the meeting, so long as a quorum shall be
present at the meeting, except as otherwise required by applicable law. Only
matters set forth in the notice of a meeting, and matters incidental thereto,
may be voted on by the Members at a meeting. The presence in person or by proxy
of Members holding a majority of the total number of votes eligible to be cast
by all Members as of the record date shall constitute a quorum at any meeting.
In the absence of a quorum, a meeting of the Members may be adjourned by action
of a majority of the Members present in person or by proxy without additional
notice to the Members. Except as otherwise required by any provision of this
Agreement or of the 1940 Act, (i) those candidates receiving a plurality of the
votes cast at any meeting of Members shall be elected as Managers and (ii) all
other actions of the Members taken at a meeting shall require the affirmative
vote of Members holding a majority of the total number of votes at such meeting.
(b) Each Member shall be entitled to cast at any meeting of Members a
number of votes equivalent to such Member's Investment Percentage as of the
record date for such meeting. The Board of Managers shall establish a record
date not less than 10 days nor more than 90 days prior to the date of any
meeting of Members to determine eligibility to vote at such meeting and the
number of votes that each Member will be entitled to cast at the meeting, and
shall maintain for each such record date a list setting forth the name of each
Member and the number of votes that each Member will be entitled to cast at the
meeting.
(c) A Member may vote at any meeting of Members by a proxy properly
executed in writing by the Member and filed with the Company before or at the
time of the meeting. A proxy may be suspended or revoked, as the case may be, by
the Member executing the proxy by a later writing delivered to the Company at
any time prior to exercise of the proxy or if the Member executing the proxy
shall be present at the meeting and decide to vote in person. Any action of the
Members that is permitted to be taken at a meeting of the Members may be taken
without a meeting if consents in writing, setting forth the action taken, are
signed by Members holding a majority of the total number of votes eligible to be
cast or such greater percentage as may be required in order to approve such
action.
3.5 CUSTODY OF ASSETS OF THE COMPANY.
The physical possession of all funds, Securities and other properties
of the Company shall at all times be held, controlled and administered by one or
more custodians retained by the Company in accordance with the requirements of
the 1940 Act and the rules thereunder.
12
3.6 OTHER ACTIVITIES OF MEMBERS AND MANAGERS.
(a) The Managers shall not be required to devote all of their time to
the affairs of the Company, but shall devote such time as may reasonably be
required to perform their obligations under this Agreement.
(b) Any Member or Manager, and any Affiliate of any Member or Manager,
may engage in or possess an interest in other business ventures or commercial
dealings of every kind and description, independently or with others, including,
but not limited to, acquisition and disposition of Securities, provision of
investment advisory or brokerage services, serving as directors, officers,
employees, advisers or agents of other companies, partners or general partners
of any partnership, members or managing members of any limited liability
company, or trustees of any trust, or entering into any other commercial
arrangements. No Member or Manager shall have any rights in or to such
activities of any other Member or Manager, or any profits derived therefrom.
3.7 DUTY OF CARE.
(a) A Manager shall not be liable to the Company or to any of its
Members for any loss or damage occasioned by any act or omission in the
performance of his or her duties, or otherwise in his or her capacity as a
Manager, unless it shall be determined by final judicial decision on the merits
from which there is no further right to appeal that such loss is due to an act
or omission of such Manager constituting willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the performance of
his or her duties to the Company.
(b) Members not in breach of any obligation hereunder or under any
agreement pursuant to which the Member purchased Units shall be liable to the
Company, any Member or third parties only as provided under the Delaware Act.
3.8 INDEMNIFICATION.
(a) To the fullest extent permitted by law, the Company shall, subject
to Section 3.8(b) hereof, indemnify each Manager (including for this purpose his
or her respective executors, heirs, assigns, successors or other legal
representatives), against all losses, claims, damages, liabilities, costs and
expenses, including, but not limited to, amounts paid in satisfaction of
judgments, in compromise, or as fines or penalties, and reasonable counsel fees,
incurred in connection with the defense or disposition of any action, suit,
investigation or other proceeding, whether civil or criminal, before any
judicial, arbitral, administrative or legislative body, in which such indemnitee
may be or may have been involved as a party or otherwise, or with which such
indemnitee may be or may have been threatened, while in office or thereafter, by
reason of being or having been a Manager of the Company or the past or present
performance of services to the Company by such indemnitee, except to the extent
such loss, claim, damage, liability, cost or expense shall have been finally
determined in a decision on the merits in any such action, suit, investigation
or other proceeding to have been incurred or suffered by such indemnitee by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of such indemnitee's office. The
rights of indemnification provided under this Section 3.8 shall not be construed
so as to provide for indemnification of a
13
Manager for any liability (including liability under federal securities laws
which, under certain circumstances, impose liability even on persons that act in
good faith) to the extent (but only to the extent) that such indemnification
would be in violation of applicable law, but shall be construed so as to
effectuate the applicable provisions of this Section 3.8 to the fullest extent
permitted by law.
(b) Expenses, including reasonable counsel fees, so incurred by any
such indemnitee (but excluding amounts paid in satisfaction of judgments, in
compromise, or as fines or penalties), may be paid from time to time by the
Company in advance of the final disposition of any such action, suit,
investigation or proceeding upon receipt of an undertaking by or on behalf of
such indemnitee to repay to the Company amounts so paid if it shall ultimately
be determined that indemnification of such expenses is not authorized under
Section 3.8(a) hereof; PROVIDED, HOWEVER, that (i) such indemnitee shall provide
security for such undertaking, (ii) the Company shall be insured by or on behalf
of such indemnitee against losses arising by reason of such indemnitee's failure
to fulfill such undertaking, or (iii) a majority of the Managers (excluding any
Manager who is either seeking advancement of expenses hereunder or is or has
been a party to any other action, suit, investigation or proceeding involving
claims similar to those involved in the action, suit, investigation or
proceeding giving rise to a claim for advancement of expenses hereunder) or
independent legal counsel in a written opinion shall determine based on a review
of readily available facts (as opposed to a full trial-type inquiry) that there
is reason to believe such indemnitee ultimately will be entitled to
indemnification.
(c) As to the disposition of any action, suit, investigation or
proceeding (whether by a compromise payment, pursuant to a consent decree or
otherwise) without an adjudication or a decision on the merits by a court, or by
any other body before which the proceeding shall have been brought, that an
indemnitee is liable to the Company or its Members by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such indemnitee's office, indemnification shall be
provided pursuant to Section 3.8(a) hereof if (i) approved as in the best
interests of the Company by a majority of the Managers (excluding any Manager
who is either seeking indemnification hereunder or is or has been a party to any
other action, suit, investigation or proceeding involving claims similar to
those involved in the action, suit, investigation or proceeding giving rise to a
claim for indemnification hereunder) upon a determination based upon a review of
readily available facts (as opposed to a full trial-type inquiry) that such
indemnitee acted in good faith and in the reasonable belief that such actions
were in the best interests of the Company and that such indemnitee is not liable
to the Company or its Members by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of such
indemnitee's office, or (ii) the Board of Managers secures a written opinion of
independent legal counsel based upon a review of readily available facts (as
opposed to a full trial-type inquiry) to the effect that such indemnification
would not protect such indemnitee against any liability to the Company or its
Members to which such indemnitee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such indemnitee's office.
(d) Any indemnification or advancement of expenses made pursuant to
this Section 3.8 shall not prevent the recovery from any indemnitee of any such
amount if such indemnitee subsequently shall be determined in a decision on the
merits in any action, suit,
14
investigation or proceeding involving the liability or expense that gave rise to
such indemnification or advancement of expenses to be liable to the Company or
its Members by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of such indemnitee's
office. In (i) any suit brought by a Manager (or other person entitled to
indemnification hereunder) to enforce a right to indemnification under this
Section 3.8 it shall be a defense that, and (ii) in any suit in the name of the
Company to recover any indemnification or advancement of expenses made pursuant
to this Section 3.8 the Company shall be entitled to recover such expenses upon
a final adjudication that, the Manager or other person claiming a right to
indemnification under this Section 3.8 has not met the applicable standard of
conduct set forth in this Section 3.8. In any such suit brought to enforce a
right to indemnification or to recover any indemnification or advancement of
expenses made pursuant to this Section 3.8, the burden of proving that the
Manager or other person claiming a right to indemnification is not entitled to
be indemnified, or to any indemnification or advancement of expenses, under this
Section 3.8 shall be on the Company (or any Member acting derivatively or
otherwise on behalf of the Company or its Members).
(e) An indemnitee may not satisfy any right of indemnification or
advancement of expenses granted in this Section 3.8 or to which such indemnitee
may otherwise be entitled except out of the assets of the Company, and no Member
shall be personally liable with respect to any such claim for indemnification or
advancement of expenses.
(f) The rights of indemnification provided hereunder shall not be
exclusive of or affect any other rights to which any person may be entitled by
contract or otherwise under law. Nothing contained in this Section 3.8 shall
affect the power of the Company to purchase and maintain liability insurance on
behalf of any Manager or other person.
3.9 FEES, EXPENSES AND REIMBURSEMENT.
(a) So long as the Adviser provides Management Services to the
Company, it is entitled to receive fees for such services as may be agreed to by
the Adviser and the Company pursuant to the Investment Advisory Agreement.
(b) The Board of Managers may cause the Company to compensate each
Manager who is not an officer or employee of the Adviser (or of any affiliate of
the Adviser) for his or her services as such and each such Manager shall be
reimbursed by the Company for travel expenses incurred by him in performing his
duties under this Agreement.
(c) The Company shall bear all of its own costs and expenses incurred
in its business and operations, other than those specifically required to be
borne by the Adviser or another party pursuant to the Investment Advisory
Agreement or another agreement with the Company. Unless otherwise required by an
agreement between the Company and the Adviser, the Adviser shall be entitled to
reimbursement from the Company for any expenses that it pays on behalf of the
Company. Costs and expenses to be borne by the Company include, but are not
limited to, the following: (i) all costs and expenses related to investment
expenses; (ii) any non-investment related interest expense; (iii) fees and
disbursements of any attorneys and accountants engaged on behalf of the Company;
(iv) entity-level taxes; (v) audit and tax preparation expenses; (vi)
administrative expenses and fees and custody and escrow fees and expenses; (vii)
15
the costs of an errors and omissions/directors and officers liability insurance
and a fidelity bond; (viii) fees and travel-related expenses of Managers who are
not employees of the Adviser or any Affiliate of the Adviser; (ix)
organizational and offering expenses; (x) all costs and expenses associated with
background checks on Portfolio Managers; (xi) all costs and expenses associated
with retaining independent third parties to provide risk management services to
the Company; (xii) any investment advisory fees, Member servicing fees and
management fees, (xiii) any extraordinary expenses; and (xiv) such other
expenses as may be approved from time to time by the Board of Managers.
(d) Subject to such limitations as may be imposed by the 1940 Act or
other applicable laws, from time to time the Company may, alone or in
conjunction with the Adviser, any Affiliate of the Adviser or other registered
or unregistered investment funds or other accounts for which the Adviser or any
Affiliate of the Adviser acts as general partner or investment adviser, purchase
insurance in such amounts, from such insurers and on such terms as the Board of
Managers shall determine.
----------------
ARTICLE IV
TERMINATION OF STATUS OF ADVISER AND
MANAGERS; TRANSFERS AND REPURCHASES
----------------
4.1 TERMINATION OF STATUS OF THE ADVISER.
The status of the Adviser shall terminate if the Investment Advisory
Agreement with the Adviser terminates and the Company does not enter into a new
Investment Advisory Agreement with the Adviser, effective as of the date of such
termination.
4.2 TERMINATION OF STATUS OF A MANAGER.
The status of a Manager shall terminate if the Manager (i) shall die;
(ii) shall be adjudicated incompetent; (iii) shall voluntarily withdraw as a
Manager (upon not less than 90 days' prior written notice to the other
Managers); (iv) shall be removed; (v) shall be certified by a physician to be
mentally or physically unable to perform his duties hereunder; (vi) shall be
declared bankrupt by a court with appropriate jurisdiction, file a petition
commencing a voluntary case under any bankruptcy law or make an assignment for
the benefit of creditors; (vii) shall have a receiver appointed to administer
the property or affairs of such Manager; or (viii) shall otherwise cease to be a
Manager of the Company under the Delaware Act.
4.3 REMOVAL OF THE MANAGERS.
Any Manager may be removed either by (a) the vote or written consent
of at least two-thirds (2/3) of the Managers not subject to the removal vote or
(b) the vote or written consent of Members holding not less than two-thirds
(2/3) of the total number of votes eligible to be cast by all Members.
16
4.4 TRANSFER OF UNITS OF MEMBERS.
(a) A Member's Units may be Transferred only (i) by operation of law
pursuant to the death, divorce, bankruptcy, insolvency, dissolution or
adjudication of incompetency of such Member or (ii) with the written consent of
the Board of Managers (which may be withheld in its sole discretion); PROVIDED,
HOWEVER, that the Board of Managers may not consent to any Transfer other than a
Transfer (i) in which the tax basis of the Units in the hands of the transferee
is determined, in whole or in part, by reference to its tax basis in the hands
of the transferor, (ii) to members of the Member's immediate family (brothers,
sisters, spouse, parents and children), (iii) as a distribution from a qualified
retirement plan or an individual retirement account, or (iv) a Transfer to which
the Board of Managers may consent pursuant to the following sentence. The Board
of Managers may consent to other pledges, transfers, or assignments under such
other circumstances and conditions as it, in its sole discretion, deems
appropriate; PROVIDED, HOWEVER, that prior to any such pledge, transfer, or
assignment, the Board of Managers shall consult with counsel to the Company to
ensure that such pledge, transfer, or assignment will not cause the Company to
be treated as a "publicly traded partnership" taxable as a corporation. In no
event, however, will any transferee or assignee be admitted as a Member without
the consent of the Board of Managers which may be withheld in its sole
discretion. Any pledge, transfer, or assignment not made in accordance with this
Section 4.4 shall be void.
(b) The Board of Managers may not consent to a Transfer of all or a
portion of a Member's Units unless: (i) the person to whom the Units are
Transferred is a person whom the Company believes is an accredited investor, as
such term is defined in Regulation D under the Securities Act of 1933 or any
successor thereto; and (ii) all of the Member's Units are Transferred to a
single transferee or, after the Transfer of a portion of Units, the balance of
the Capital Account of each of the transferee and transferor is not less than
$100,000, or such lesser amount as may be established by the Board of Managers.
Any transferee that acquires Units by operation of law as the result of the
death, divorce, bankruptcy, insolvency, dissolution or adjudication of
incompetency of a Member or otherwise, shall be entitled to the allocations and
distributions allocable to the Units so acquired and to Transfer such Units in
accordance with the terms of this Agreement, but shall not be entitled to the
other rights of a Member unless and until such transferee becomes a substituted
Member. If a Member transfers Units with the approval of the Board of Managers,
the Board of Managers shall promptly take all necessary actions so that each
transferee to whom such Units are transferred is admitted to the Company as a
Member. Each Member effecting a Transfer and each transferee agree to pay all
expenses, including attorneys' and accountants' fees, incurred by the Company in
connection with such Transfer.
(c) Each Member shall indemnify and hold harmless the Company, the
Managers, the Adviser, each other Member and any Affiliate of the foregoing
against all losses, claims, damages, liabilities, costs and expenses (including
legal or other expenses incurred in investigating or defending against any such
losses, claims, damages, liabilities, costs and expenses or any judgments, fines
and amounts paid in settlement), joint or several, to which such persons may
become subject by reason of or arising from (i) any Transfer made by such Member
in violation of this Section 4.4 and (ii) any misrepresentation by such Member
in connection with any such Transfer.
17
4.5 REPURCHASE OF UNITS.
(a) Except as otherwise provided in this Agreement, no Member or other
person holding Units shall have the right to require the Company to repurchase
those Units. The Board of Managers from time to time, in its sole discretion and
on such terms and conditions as it may determine, may cause the Company to
repurchase Units pursuant to written tenders. However, the Company shall not
offer to repurchase Units on more than four occasions during any one Taxable
Year unless it has consulted with counsel to the Company and determined that
more frequent offers would not cause any adverse tax consequences to the Company
or the Members, including causing the Company to be treated as a publicly traded
partnership taxable as a corporation for Federal tax purposes. In determining
whether to cause the Company to repurchase Units pursuant to written tenders,
the Board of Managers shall consider, among other things, the recommendation of
the Adviser.
The Board of Managers shall cause the Company to repurchase Units
pursuant to written tenders only on terms determined by the Board of Managers to
be fair to the Company and to all Members (including persons holding Units
acquired from Members), as applicable.
(b) The Adviser or its Affiliate may tender its Units as a Member, if
any, under Section 4.5(a) hereof.
(c) The Board of Managers may cause the Company to repurchase Units of
a Member or any person acquiring Units from or through a Member in the event
that the Board of Managers determines or has reason to believe that:
(1) such Units have been transferred in violation of Section 4.4
hereof, or such Units have vested in any person by operation
of law as the result of the death, divorce, bankruptcy,
insolvency, dissolution or adjudication of incompetency of a
Member;
(2) ownership of such Units by a Member or other person will
cause the Company to be in violation of, or subject the
Company to additional registration or regulation under, the
securities, commodities or other laws of the United States
or any other relevant jurisdiction;
(3) such Member's continued participation in the Company may
cause the Company to be classified as a "publicly traded
partnership" within the meaning of Section 7704 of the Code
and the Treasury Regulations thereunder; or
(4) any of the representations and warranties made by a Member
in connection with the acquisition of Units was not true
when made or has ceased to be true.
(d) Repurchases of Units by the Company shall be payable promptly
after the date of each such repurchase or, in the case of an offer by the
Company to repurchase Units, promptly after the expiration date of such
repurchase offer in accordance with the terms of such
18
offer. Payment of the purchase price for Units shall consist of: (i) cash or a
promissory note, which need not bear interest, in an amount equal to such
percentage, as may be determined by the Board of Managers, of the estimated
unaudited net asset value of the Units repurchased by the Company determined as
of the date of such repurchase (the "Initial Payment"); and (ii) if determined
to be appropriate by the Board of Managers or if the Initial Payment is less
than 100% of the estimated unaudited net asset value, a promissory note
entitling the holder thereof to a contingent payment equal to the excess, if
any, of (x) the net asset value of the Units repurchased by the Company as of
the date of such repurchase, determined based on the audited financial
statements of the Company for the Fiscal Year in which such repurchase was
effective, over (y) the Initial Payment. Notwithstanding anything in the
foregoing to the contrary, the Board of Managers, in its discretion, may pay any
portion of the repurchase price in Securities (or any combination of Securities
and cash) having a value, determined as of the date of repurchase, equal to the
amount to be repurchased. Any promissory note given to satisfy the Initial
Payment shall be due and payable not more than 45 days after the date of
repurchase or, if the Company has requested withdrawal of its capital from any
Investment Funds in order to fund the repurchase of ▇▇▇▇▇, ▇▇ business days
after the Company has received at least 90% of the aggregate amount withdrawn by
the Company from such Investment Funds.
(e) A Member may at any time submit to the Company a written request
that the Company repurchase all of the Units of such Member, as contemplated by
Section 6.1(c) hereof. Any such request shall be sent to the Company by
registered or certified mail, return receipt requested, and shall be deemed
valid upon receipt by the Member of a letter from the Company acknowledging its
receipt of the request. The Company shall send such letter to the Member
promptly upon its receipt of the Member's request.
(f) Subject to the approval of the Board of Managers and compliance
with the 1940 Act, the Company may impose a fee or charge in connection with
repurchases of Units, including a fee or charge applicable to repurchases of
Units effected prior to the expiration of a specified period subsequent to a
Member's admission to the Company.
----------------
ARTICLE V
CAPITAL
----------------
5.1 CONTRIBUTIONS TO CAPITAL.
(a) The minimum initial contribution of each Member to the capital of
the Company shall be such amount as the Board of Managers, in its discretion,
may determine from time to time. The amount of the initial contribution of each
Member shall be recorded on the books and records of the Company upon acceptance
as a contribution to the capital of the Company. The Managers shall not be
entitled to make voluntary contributions of capital to the Company as Managers
of the Company, but may make voluntary contributions to the capital of the
Company as Members. The Adviser may make voluntary contributions to the capital
of the Company as a Member.
19
(b) Members may make additional contributions to the capital of the
Company, effective as of such times as the Board of Managers in its discretion
may permit, subject to Section 2.7 hereof, but no Member shall be obligated to
make any additional contribution to the capital of the Company except to the
extent provided in Section 5.6 hereof. The minimum additional capital
contribution of a Member to the capital of the Company shall be such amount as
the Board of Managers, in its sole discretion, may determine from time to time.
(c) Except as otherwise permitted by the Board of Managers, initial
and any additional contributions to the capital of the Company by any Member
shall be payable in cash, readily available funds or in-kind on or before the
date of the proposed contribution.
5.2 RIGHTS OF MEMBERS TO CAPITAL.
No Member shall be entitled to interest on any contribution to the
capital of the Company, nor shall any Member be entitled to the return of any
capital of the Company except (i) upon the repurchase by the Company of a part
or all of such Member's Units pursuant to Section 4.5 hereof, (ii) pursuant to
the provisions of Section 5.6(c) hereof or (iii) upon the liquidation of the
Company's assets pursuant to Section 6.2 hereof. No Member shall be liable for
the return of any such amounts. No Member shall have the right to require
partition of the Company's property or to compel any sale or appraisal of the
Company's assets.
5.3 CAPITAL ACCOUNTS.
(a) The Company shall maintain a separate Capital Account for each
Member.
(b) Each Member's Capital Account shall have an initial balance equal
to the amount of such Member's initial contribution to the capital of the
Company.
(c) Each Member's Capital Account shall be increased by the sum of (i)
the amount of additional contributions by such Member to the capital of the
Company permitted pursuant to Section 5.1 hereof, plus (ii) all amounts credited
to such Member's Capital Account pursuant to Sections 5.4 through 5.7 hereof.
(d) Each Member's Capital Account shall be reduced by the sum of (i)
the amount of any repurchase of Units of such Member or distributions to such
Member pursuant to Sections 4.5, 5.10 or 6.2 hereof which are not reinvested
(net of any liabilities secured by any asset distributed that such Member is
deemed to assume or take subject to under Section 752 of the Code), plus (ii)
any amounts debited against such Capital Account pursuant to Sections 5.4
through 5.7 hereof.
5.4 ALLOCATION OF NET PROFIT AND NET LOSS; ALLOCATION OF OFFERING COSTS.
As of the last day of each Fiscal Period, any Net Profit or Net Loss
for the Fiscal Period, and any offering costs required by applicable accounting
principles to be charged to capital that are paid or accrued during the Fiscal
Period, shall be allocated among and credited to or debited against the Capital
Accounts of the Members in accordance with their respective Investment
Percentages for such Fiscal Period.
20
5.5 ALLOCATION OF CERTAIN EXPENDITURES.
Except as otherwise provided for in this Agreement and unless
prohibited by the 1940 Act, any expenditures payable by the Company, to the
extent determined by the Board of Managers to have been paid or withheld on
behalf of, or by reason of particular circumstances applicable to, one or more
but fewer than all of the Members, shall be charged to only those Members on
whose behalf such payments are made or whose particular circumstances gave rise
to such payments. Such charges shall be debited from the Capital Accounts of
such Members as of the close of the Fiscal Period during which any such items
were paid or accrued by the Company.
5.6 RESERVES.
(a) Appropriate reserves may be created, accrued and charged against
Net Assets and proportionately against the Capital Accounts of the Members for
contingent liabilities, if any, as of the date any such contingent liability
becomes known to the Adviser or the Board of Managers, such reserves to be in
the amounts that the Board of Managers in its sole discretion deems necessary or
appropriate. The Board of Managers may increase or reduce any such reserves from
time to time by such amounts as the Board of Managers in its sole discretion
deems necessary or appropriate. The amount of any such reserve, or any increase
or decrease therein, may be proportionately charged or credited, as appropriate,
to the Capital Accounts of those persons who are Members at the time when such
reserve is created, increased or decreased, as the case may be; PROVIDED,
HOWEVER, that if any such individual reserve item, adjusted by any increase
therein, exceeds the lesser of $500,000 or 1% of the aggregate value of the
Capital Accounts of all such Members, the amount of such reserve, increase, or
decrease shall instead be charged or credited to those parties who were Members
at the time, as determined by the Board of Managers in its sole discretion, of
the act or omission giving rise to the contingent liability for which the
reserve was established, increased or decreased in proportion to their Capital
Accounts at that time.
(b) To the extent permitted under applicable law, if at any time an
amount is paid or received by the Company (other than contributions to the
capital of the Company, distributions or repurchases of Units) and such amount
exceeds the lesser of $500,000 or 1% of the aggregate value of the Capital
Accounts of all Members at the time of payment or receipt and such amount was
not accrued or reserved for but would nevertheless, in accordance with the
Company's accounting practices, be treated as applicable to one or more prior
Fiscal Periods, then such amount shall be proportionately charged or credited,
as appropriate, to those persons who were Members during such prior Fiscal
Period or Periods.
(c) To the extent permitted under applicable law, if any amount is
required by paragraph (a) or (b) of this Section 5.6 to be charged or credited
to a person who is no longer a Member, such amount shall be paid by or to such
person, as the case may be, in cash, with interest from the date on which the
Board of Managers determines that such charge or credit is required. In the case
of a charge, the former Member shall be obligated to pay the amount of the
charge, plus interest as provided above, to the Company on demand; PROVIDED,
HOWEVER, that (i) in no event shall a former Member be obligated to make a
payment exceeding the amount of such Member's Capital Account at the time to
which the charge relates; and (ii) no such demand
21
shall be made after the expiration of three years since the date on which such
person ceased to be a Member. To the extent that a former Member fails to pay to
the Company, in full, any amount required to be charged to such former Member
pursuant to paragraph (a) or (b), whether due to the expiration of the
applicable limitation period or for any other reason whatsoever, the deficiency
shall be charged proportionately to the Capital Accounts of the Members at the
time of the act or omission giving rise to the charge to the extent feasible,
and otherwise proportionately to the Capital Accounts of the current Members.
5.7 ALLOCATION OF ORGANIZATION EXPENSES.
(a) As of the first Expense Allocation Date, Organization Expenses
shall be allocated among and debited against the Capital Accounts of the Members
in accordance with their respective Capital Percentages on such Expense
Allocation Date.
(b) As of each Expense Allocation Date following the first Expense
Allocation Date, all amounts previously debited against the Capital Account of a
Member pursuant to this Section 5.7 on the preceding Expense Allocation Date
will be credited to the Capital Account of such Member, and Organization
Expenses shall then be reallocated among and debited against the Capital
Accounts of all Members in accordance with their respective Capital Percentages.
5.8 TAX ALLOCATIONS.
For each Taxable Year, items of income, deduction, gain, loss or
credit shall be allocated for income tax purposes among the Members in such
manner as to reflect equitably amounts credited or debited to each Member's
Capital Account for the current and prior Fiscal Years (or relevant portions
thereof). Allocations under this Section 5.8 shall be made pursuant to the
principles of Sections 704(b) and 704(c) of the Code, and Treasury Regulations
Sections 1.704-1(b)(2)(iv)(f) and (g), 1.704-1(b)(4)(i) and 1.704-3(e)
promulgated thereunder, as applicable, or the successor provisions to such Code
Sections and Treasury Regulations. Notwithstanding anything to the contrary in
this Agreement, there shall be allocated to the Members such gains or income as
shall be necessary to satisfy the "qualified income offset" requirement of
Treasury Regulation Section 1.704-1(b)(2)(ii)(d).
If the Company realizes ordinary income and/or capital gains
(including short-term capital gains) for Federal income tax purposes
(collectively, "income") for any Taxable Year during or as of the end of which
some or all of the Units of one or more Positive Basis Members (as hereinafter
defined) are repurchased by the Company pursuant to Article IV, the Board of
Managers, may elect to allocate such income as follows: (i) first, among such
Positive Basis Members who have had all of their Units repurchased by the
Company, pro rata in proportion to the respective Full Positive Basis (as
hereinafter defined) of each such Positive Basis Member, until either the full
amount of such income shall have been so allocated or the Full Positive Basis of
each such Positive Basis Member shall have been eliminated, (ii) then, among
such Positive Basis Members who have only had some of their Units repurchased by
the Company, pro rata in proportion to the respective Partial Positive Basis (as
hereinafter defined) of each such Positive Basis Member, until either the
remaining amount of such income shall have been so allocated or the Partial
Positive Basis of each such Positive Basis Member shall
22
have been eliminated and (iii) then, any income not so allocated to Positive
Basis Members to the other Members in such manner as shall equitably reflect the
amounts allocated to such Members' Capital Accounts pursuant to Sections 5.4-5.7
hereof.
If the Company realizes deductions, ordinary losses and/or capital
losses (including long-term capital losses) for Federal income tax purposes
(collectively, "losses") for any Taxable Year during or as of the end of which
some or all of the Units of one or more Negative Basis Members (as hereinafter
defined) are repurchased by the Company pursuant to Article IV, the Board of
Managers may elect to allocate such losses as follows: (i) first, among such
Negative Basis Members who have had all of their Units repurchased by the
Company, pro rata in proportion to the respective Full Negative Basis (as
hereinafter defined) of each such Negative Basis Member, until either the full
amount of such losses shall have been so allocated or the Full Negative Basis of
each such Negative Basis Member shall have been eliminated, (ii) then, among
such Negative Basis Members who have only had some of their Units repurchased by
the Company, pro rata in proportion to the respective Partial Negative Basis (as
hereinafter defined) of each such Negative Basis Member, until either the
remaining amount of such income shall have been so allocated or the Partial
Negative Basis of each such Negative Basis Member shall have been eliminated and
(iii) then, any losses not so allocated to Negative Basis Members to the other
Members in such manner as shall equitably reflect the amounts allocated to such
Members' Capital Accounts pursuant to Sections 5.4-5.7 hereof.
As used herein, (i) the term "Full Positive Basis" shall mean, with
respect to any Member who has had all of its Units repurchased by the Company
and as of any time of calculation, the amount by which (x) the value of its
Units as of such time plus an amount equal to any deemed distributions to such
Member for Federal income tax purposes pursuant to Section 752(b) of the Code
exceeds (y) its "adjusted tax basis," for Federal income tax purposes, in its
Units as of such time, (ii) the term "Partial Positive Basis" shall mean, with
respect to any Member who has only had some of its Units repurchased by the
Company and as of any time of calculation, the amount by which the amount
received (or to be received) upon such partial repurchase of Units plus an
amount equal to any deemed distribution to such Member for Federal income tax
purposes pursuant to Section 752(b) of the Code as of such time exceeds the
product of: (a) its "adjusted tax basis," for Federal income tax purposes, in
its Units as of such time and (b) a fraction, the numerator of which is the
amount received (or to be received) upon such partial repurchase of Units, and
the denominator of which is the value of its Units immediately prior to such
partial repurchase of Units and (iii) the term "Positive Basis Member" shall
mean any Member who has had some or all of its Units repurchased by the Company
and who has Full Positive Basis or Partial Positive Basis as of the effective
date of the repurchase (determined prior to any allocations made pursuant to
this Section).
As used herein, (i) the term "Full Negative Basis" shall mean, with
respect to any Member who has had all of its Units repurchased by the Company
and as of any time of calculation, the amount by which (x) the value of its
Units as of such time plus an amount equal to any deemed distributions to such
Member for Federal income tax purposes pursuant to Section 752(b) of the Code is
less than (y) its "adjusted tax basis," for Federal income tax purposes, in its
Units as of such time, (ii) the term "Partial Negative Basis" shall mean, with
respect to any Member who has only had some of its Units repurchased by the
Company and as of any time of calculation, the amount by which the amount
received (or to be received) upon such partial
23
repurchase of Units plus an amount equal to any deemed distribution to such
Member for Federal income tax purposes pursuant to Section 752(b) of the Code as
of such time is less than the product of: (a) its "adjusted tax basis," for
Federal income tax purposes, in its Units as of such time and (b) a fraction,
the numerator of which is the amount received (or to be received) upon such
partial repurchase of Units, and the denominator of which is the value of its
Units immediately prior to such partial repurchase of Units and (iii) the term
"Negative Basis Member" shall mean any Member who has had some or all of its
Units repurchased by the Company and who has Full Negative Basis or Partial
Negative Basis as of the effective date of such repurchase (determined prior to
any allocations made pursuant to this Section).
5.9 ADJUSTMENTS TO TAKE ACCOUNT OF CERTAIN EVENTS.
If the Code or Treasury Regulations promulgated thereunder require a
withholding or other adjustment to the Capital Account of a Member or some other
event occurs necessitating in the Board of Managers' judgment an equitable
adjustment, the Board of Managers shall make such adjustments in the
determination and allocation among the Members of Net Profit, Net Loss, Capital
Accounts, items of income, deduction, gain, loss, credit or withholding for tax
purposes, accounting procedures or such other financial or tax items as shall
equitably take into account such event and applicable provisions of law, and the
determination thereof by the Board of Managers shall be final and conclusive as
to all of the Members.
5.10 DISTRIBUTIONS.
The Board of Managers, in its sole discretion, may authorize the
Company to make distributions in cash or in kind at any time to all of the
Members on a PRO RATA basis in accordance with the Members' Investment
Percentages.
5.11 WITHHOLDING.
(a) The Board of Managers may withhold and pay over to the Internal
Revenue Service (or any other relevant taxing authority) taxes from any
distribution to any Member to the extent required by the Code or any other
applicable law on account of such Member's distributive share of the Company's
items of gross income, income or gain.
(b) For purposes of this Agreement, any taxes so withheld or paid over
by the Company with respect to any amount distributed by the Company to any
Member shall be deemed to be a distribution or payment to such Member, reducing
the amount otherwise distributable to such Member pursuant to this Agreement and
reducing the Capital Account of such Member. If the amount of such taxes is
greater than any such distributable amounts, then such Member and any successor
to such Member's Units shall pay to the Company as a contribution to the capital
of the Company, the amount of such excess.
(c) The Board of Managers shall not be obligated to apply for or
obtain a reduction of or exemption from withholding tax on behalf of any Member
that may be eligible for such reduction or exemption. To the extent that a
Member claims to be entitled to a reduced rate of, or exemption from, a
withholding tax pursuant to an applicable income tax treaty, or otherwise, the
Member shall furnish the Board of Managers with such information and forms as
24
such Member may be required to complete where necessary to comply with any and
all laws and regulations governing the obligations of withholding tax agents.
Each Member represents and warrants that any such information and forms
furnished by such Member shall be true and accurate and agrees to indemnify the
Company and each of the Members from any and all damages, costs and expenses
resulting from the filing of inaccurate or incomplete information or forms
relating to such withholding taxes.
----------------
ARTICLE VI
DISSOLUTION AND LIQUIDATION
----------------
6.1 DISSOLUTION.
The Company shall be dissolved:
(a) upon the affirmative vote to dissolve the Company by: (i) the
Board of Managers or (ii) Members holding at least two-thirds (2/3) of the total
number of votes eligible to be cast by all Members;
(b) upon the failure of Members to elect a successor Manager at a
meeting called by the Adviser in accordance with Section 2.6 hereof when no
Manager remains to continue the business of the Company;
(c) upon the expiration of any two year period that commences on the
date on which any Member has submitted, in accordance with the procedure
specified in Section 4.5(e) hereof, a written notice to the Company requesting
to tender all of its Units for repurchase by the Company if such Units have not
been repurchased by the Company; or
(d) as required by operation of law.
Dissolution of the Company shall be effective on the later of the day on which
the event giving rise to the dissolution shall occur or the conclusion of any
applicable 60 day period during which the Board of Managers and Members may
elect to continue the business of the Company as provided above, but the Company
shall not terminate until the assets of the Company have been liquidated in
accordance with Section 6.2 hereof and the Certificate has been canceled.
6.2 LIQUIDATION OF ASSETS.
(a) Upon the dissolution of the Company as provided in Section 6.1
hereof, the Board of Managers shall promptly appoint the Board of Managers or
the Adviser as the liquidator and the Board of Managers or the Adviser shall
liquidate the business and administrative affairs of the Company, except that if
the Board of Managers does not appoint the Board of Managers or the Adviser as
the liquidator or the Board of Managers or the Adviser is unable to perform this
function, a liquidator elected by Members holding a majority of the total number
of votes eligible to be cast by all Members shall promptly liquidate the
business and
25
administrative affairs of the Company. Net Profit and Net Loss during the period
of liquidation shall be allocated pursuant to Section 5.4 hereof. The proceeds
from liquidation (after establishment of appropriate reserves for contingencies
in such amount as the Board of Managers or liquidator shall deem appropriate in
its sole discretion as applicable) shall be distributed in the following manner:
(1) the debts of the Company, other than debts, liabilities or
obligations to Members, and the expenses of liquidation
(including legal and accounting expenses incurred in
connection therewith), up to and including the date that
distribution of the Company's assets to the Members has been
completed, shall first be paid on a PRO RATA basis;
(2) such debts, liabilities or obligations as are owing to the
Members shall next be paid in their order of seniority and
on a PRO RATA basis; and
(3) the Members shall next be paid on a PRO RATA basis the
positive balances of their respective Capital Accounts after
giving effect to all allocations to be made to such Members'
Capital Accounts for the Fiscal Period ending on the date of
the distributions under this Section 6.2(a)(3).
(b) Anything in this Section 6.2 to the contrary notwithstanding, upon
dissolution of the Company, the Board of Managers or other liquidator may
distribute ratably in kind any assets of the Company; PROVIDED, HOWEVER, that if
any in-kind distribution is to be made (i) the assets distributed in kind shall
be valued pursuant to Section 7.3 hereof as of the actual date of their
distribution and charged as so valued and distributed against amounts to be paid
under Section 6.2(a) above, and (ii) any profit or loss attributable to property
distributed in kind shall be included in the Net Profit or Net Loss for the
Fiscal Period ending on the date of such distribution.
----------------
ARTICLE VII
ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS
----------------
7.1 ACCOUNTING AND REPORTS.
(a) The Company shall adopt for tax accounting purposes any accounting
method that the Board of Managers shall decide in its sole discretion is in the
best interests of the Company. The Company's accounts shall be maintained in
U.S. currency.
(b) As soon as practicable after the end of each Taxable Year, the
Company shall furnish to each Member such information regarding the operation of
the Company and such Member's Units as is necessary for Members to complete
Federal, state and local income tax or information returns and any other tax
information required by Federal, state or local law.
26
(c) Except as otherwise required by the 1940 Act, or as may otherwise
be permitted by rule, regulation or order, within 60 days after the close of the
period for which a report required under this Section 7.1(c) is being made, the
Company shall furnish to each Member a semi-annual report and an annual report
containing the information required by such Act. The Company shall cause
financial statements contained in each annual report furnished hereunder to be
accompanied by a certificate of independent public accountants based upon an
audit performed in accordance with generally accepted auditing standards. The
Company may furnish to each Member such other periodic reports as it deems
necessary or appropriate in its discretion.
7.2 DETERMINATIONS BY THE BOARD OF MANAGERS.
(a) All matters concerning the determination and allocation among the
Members of the amounts to be determined and allocated pursuant to Article V
hereof, including any taxes thereon and accounting procedures applicable
thereto, shall be determined by the Board of Managers unless specifically and
expressly otherwise provided for by the provisions of this Agreement or required
by law, and such determinations and allocations shall be final and binding on
all the Members.
(b) The Board of Managers may make such adjustments to the computation
of Net Profit or Net Loss or any components comprising the foregoing as it
considers appropriate to reflect fairly and accurately the financial results of
the Company and the intended allocation thereof among the Members.
7.3 VALUATION OF ASSETS.
(a) Except as may be required by the 1940 Act, the Board of Managers
shall value or have valued any Securities or other assets and liabilities of the
Company as of the close of business on the last day of each Fiscal Period in
accordance with such valuation procedures as shall be established from time to
time by the Board of Managers and which conform to the requirements of the 1940
Act. In determining the value of the assets of the Company, no value shall be
placed on the goodwill or name of the Company, or the office records, files,
statistical data or any similar intangible assets of the Company not normally
reflected in the Company's accounting records, but there shall be taken into
consideration any items of income earned but not received, expenses incurred but
not yet paid, liabilities, fixed or contingent, and any other prepaid expenses
to the extent not otherwise reflected in the books of account, and the value of
options or commitments to purchase or sell Securities or commodities pursuant to
agreements entered into prior to such valuation date.
(b) The Company will value Units in the Company at fair value, which
ordinarily will be the value determined by the Board of Managers in accordance
with the policies established by the Company.
(c) Notwithstanding the previous sub-paragraph, in a situation where a
Portfolio Manager allocates a Portfolio Fund's assets to special investment
accounts or side pockets, the current fair value of the Company's interest in
that Portfolio Fund may not be accurately reflected in the Company's net asset
value. This is because the Portfolio Manager's
27
most recent computation of the fair value of the special investment account or
side pocket may have last occurred a significant amount of time (I.E., as much
as eleven months or longer) before the current monthly computation of the
Company's net asset value. As a result, for any given month, the stated net
asset value of the Company may, under certain circumstances, be higher or lower
than the value that would otherwise have been utilized had the Portfolio Manager
determined and reported the fair value of any side pocket as of the end of the
most recent calendar month.
(d) The value of Securities and other assets of the Company and the
net worth of the Company as a whole determined pursuant to this Section 7.3
shall be conclusive and binding on all of the Members and all parties claiming
through or under them.
----------------
ARTICLE VIII
MISCELLANEOUS PROVISIONS
----------------
8.1 AMENDMENT OF LIMITED LIABILITY COMPANY AGREEMENT.
(a) Except as otherwise provided in this Section 8.1, this Agreement
may be amended, in whole or in part, with: (i) the approval of the Board of
Managers (including the vote of a majority of the Independent Managers, if
required by the ▇▇▇▇ ▇▇▇) and (ii) if required by the 1940 Act, the approval of
the Members by such vote as is required by the ▇▇▇▇ ▇▇▇.
(b) Any amendment that would:
(1) increase the obligation of a Member to make any contribution
to the capital of the Company;
(2) reduce the Capital Account of a Member other than in
accordance with Article V; or
(3) modify the events causing the dissolution of the Company;
may be made only if (i) the written consent of each Member adversely affected
thereby is obtained prior to the effectiveness thereof or (ii) such amendment
does not become effective until (A) each Member has received written notice of
such amendment and (B) any Member objecting to such amendment has been afforded
a reasonable opportunity (pursuant to such procedures as may be prescribed by
the Board of Managers) to have all of its Units repurchased by the Company.
(c) The power of the Board of Managers to amend this Agreement at any
time without the consent of the other Members as set forth in paragraph (a) of
this Section 8.1 shall specifically include the power to:
28
(1) restate this Agreement together with any amendments hereto
that have been duly adopted in accordance herewith to
incorporate such amendments in a single, integrated
document;
(2) amend this Agreement (other than with respect to the matters
set forth in Section 8.1(b) hereof) to effect compliance
with any applicable law or regulation or to cure any
ambiguity or to correct or supplement any provision hereof
that may be inconsistent with any other provision hereof;
and
(3) amend this Agreement to make such changes as may be
necessary or advisable to ensure that the Company will not
be treated as an association or as a publicly traded
partnership taxable as a corporation for Federal tax
purposes.
(d) The Board of Managers shall cause written notice to be given of
any amendment to this Agreement (other than any amendment of the type
contemplated by clause (1) of Section 8.1(c) hereof) to each Member, which
notice shall set forth (i) the text of the amendment or (ii) a summary thereof
and a statement that the text thereof will be furnished to any Member upon
request.
8.2 SPECIAL POWER OF ATTORNEY.
(a) Each Member hereby irrevocably makes, constitutes and appoints
each Manager, acting severally, and any liquidator of the Company's assets
appointed pursuant to Section 6.2 hereof with full power of substitution, the
true and lawful representatives and attorneys-in-fact of, and in the name, place
and stead of, such Member, with the power from time to time to make, execute,
sign, acknowledge, swear to, verify, deliver, record, file and/or publish:
(1) any amendment to this Agreement that complies with the
provisions of this Agreement (including the provisions of
Section 8.1 hereof);
(2) any amendment to the Certificate required because this
Agreement is amended, including, without limitation, an
amendment to effectuate any change in the membership of the
Company; and
(3) all such other instruments, documents and certificates that,
in the opinion of legal counsel to the Company, may from
time to time be required by the laws of the United States,
the State of Delaware or any other jurisdiction in which the
Company shall determine to do business, or any political
subdivision or agency thereof, or that such legal counsel
may deem necessary or appropriate to effectuate, implement
and continue the valid existence and business of the Company
as a limited liability company under the Delaware Act.
29
(b) Each Member is aware that the terms of this Agreement permit
certain amendments to this Agreement to be effected and certain other actions to
be taken or omitted by or with respect to the Company without such Member's
consent. If an amendment to the Certificate or this Agreement or any action by
or with respect to the Company is taken in the manner contemplated by this
Agreement, each Member agrees that, notwithstanding any objection that such
Member may assert with respect to such action, the attorneys-in-fact appointed
hereby are authorized and empowered, with full power of substitution, to
exercise the authority granted above in any manner that may be necessary or
appropriate to permit such amendment to be made or action lawfully taken or
omitted. Each Member is fully aware that each Member will rely on the
effectiveness of this special power-of-attorney with a view to the orderly
administration of the affairs of the Company.
(c) This power-of-attorney is a special power-of-attorney and is
coupled with an interest in favor of each of the Managers and as such:
(1) shall be irrevocable and continue in full force and effect
notwithstanding the subsequent death or incapacity of any
party granting this power-of-attorney, regardless of whether
the Company or Board of Managers shall have had notice
thereof; and
(2) shall survive the delivery of a Transfer by a Member of the
whole or any portion of such Member's Units, except that
where the transferee thereof has been approved by the Board
of Managers for admission to the Company as a substituted
Member, this power-of-attorney given by the transferor shall
survive the delivery of such assignment for the sole purpose
of enabling the Board of Managers to execute, acknowledge
and file any instrument necessary to effect such
substitution.
8.3 NOTICES.
Except as otherwise set forth in this Agreement, notices that are
required to be provided under this Agreement shall be made, if to a Member, by
regular mail, or if to the Board of Managers or the Adviser, by hand delivery,
registered or certified mail return receipt requested, commercial courier
service, telex or telecopier, and shall be addressed to the respective parties
hereto at their addresses as set forth in the books and records of the Company.
Notices shall be deemed to have been provided when delivered by hand, on the
date indicated as the date of receipt on a return receipt or when received if
sent by regular mail, commercial courier service, telex or telecopier. A
document that is not a notice and that is required to be provided under this
Agreement by any party to another party may be delivered by any reasonable
means.
8.4 AGREEMENT BINDING UPON SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors, assigns, executors,
trustees or other legal representatives, but the rights and obligations of the
parties hereunder may not be Transferred or
30
delegated except as provided in this Agreement and any attempted Transfer or
delegation thereof that is not made pursuant to the terms of this Agreement
shall be void.
8.5 APPLICABILITY OF 1940 ACT AND FORM N-2.
The parties hereto acknowledge that this Agreement is not intended to,
and does not, set forth the substantive provisions contained in the 1940 Act and
the Form N-2 that will affect numerous aspects of the conduct of the Company's
business and of the rights, privileges and obligations of the Members. Each
provision of this Agreement shall be subject to and interpreted in a manner
consistent with the applicable provisions of the 1940 Act, other Federal
securities laws and the Form N-2.
8.6 CHOICE OF LAW; ARBITRATION.
(a) Notwithstanding the place where this Agreement may be executed by
any of the parties hereto, the parties expressly agree that all the terms and
provisions hereof shall be construed under the laws of the State of Delaware,
including the Delaware Act without regard to the conflict of law principles of
such State.
(b) Unless otherwise agreed in writing, each Member agrees to submit
all controversies arising between Members or one or more Members and the Company
to arbitration in accordance with the provisions set forth below and understands
that:
(1) arbitration is final and binding on the parties;
(2) they are waiving their right to seek remedies in court,
including the right to a jury trial;
(3) pre-arbitration discovery is generally more limited and
different from court proceedings;
(4) the arbitrator's award is not required to include factual
findings or legal reasoning and a party's right to appeal or
to seek modification of rulings by arbitrators is strictly
limited; and
(5) the panel of arbitrators will typically include a minority
of arbitrators who were or are affiliated with the
securities industry.
(c) All controversies that may arise among Members and one or more
Members and the Company concerning this Agreement shall be determined by
arbitration in New York City in accordance with the Federal Arbitration Act, to
the fullest extent permitted by law. Any arbitration under this Agreement shall
be determined before and in accordance with the rules then obtaining of either
the New York Stock Exchange, Inc. (the "NYSE") or the National Association of
Securities Dealers, Inc. (the "NASD"), as the Member or entity instituting the
arbitration may elect. If the NYSE or NASD does not accept the arbitration for
consideration, the arbitration shall be submitted to, and determined in
accordance with the rules then obtaining of, the Center for Public Resources,
Inc. in New York City. Judgment on any award of any such arbitration may be
entered in the Supreme Court of the State of New York or
31
in any other court having jurisdiction of the person or persons against whom
such award is rendered. Any notice of such arbitration or for the confirmation
of any award in any arbitration shall be sufficient if given in accordance with
the provisions of this Agreement. Each Member agrees that the determination of
the arbitrators shall be binding and conclusive upon them.
(d) No Member shall bring a putative or certified class action to
arbitration, nor seek to enforce any pre-dispute arbitration agreement against
any person who has initiated in court a putative class action; or who is a
member of a putative class who has not opted out of the class with respect to
any claims encompassed by the putative class action until: (i) the class
certification is denied; or (ii) the class is decertified; or (iii) the Member
is excluded from the class by the court. Such forbearance to enforce an
agreement to arbitrate shall not constitute a waiver of any rights under this
Agreement except to the extent stated herein.
8.7 NOT FOR BENEFIT OF CREDITORS.
The provisions of this Agreement are intended only for the regulation
of relations among past, present and future Members, Managers and the Company.
This Agreement is not intended for the benefit of non-Member creditors and no
rights are granted to non-Member creditors under this Agreement.
8.8 CONSENTS.
Any and all consents, agreements or approvals provided for or
permitted by this Agreement shall be in writing and a signed copy thereof shall
be filed and kept with the books of the Company.
8.9 MERGER AND CONSOLIDATION.
(a) The Company may merge or consolidate with or into one or more
limited liability companies formed under the Delaware Act or other business
entities pursuant to an agreement of merger or consolidation that has been
approved in the manner contemplated by Section 18-209(b) of the Delaware Act.
(b) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, an agreement of merger or consolidation approved in accordance
with Section 18-209(b) of the Delaware Act may, to the extent permitted by
Section 18-209(f) of the Delaware Act, (i) effect any amendment to this
Agreement, (ii) effect the adoption of a new limited liability company agreement
for the Company if it is the surviving or resulting limited liability company in
the merger or consolidation, or (iii) provide that the limited liability company
agreement of any other constituent limited liability company to the merger or
consolidation (including a limited liability company formed for the purpose of
consummating the merger or consolidation) shall be the limited liability company
agreement of the surviving or resulting limited liability company.
8.10 PRONOUNS.
32
All pronouns shall be deemed to refer to the masculine, feminine,
neuter, singular or plural, as the identity of the person or persons, firm or
corporation may require in the context thereof.
8.11 CONFIDENTIALITY.
(a) A Member may obtain from the Company such information regarding
the affairs of the Company as is just and reasonable under the Delaware Act,
subject to reasonable standards (including standards governing what information
and documents are to be furnished, at what time and location and at whose
expense) established by the Board of Managers.
(b) Each Member covenants that, except as required by applicable law
or any regulatory body, it will not divulge, furnish or make accessible to any
other person the name and/or address (whether business, residence or mailing) of
any Member (collectively, "Confidential Information") without the prior written
consent of the Board of Managers, which consent may be withheld in its sole
discretion.
(c) Each Member recognizes that in the event that this Section 8.11 is
breached by any Member or any of its principals, partners, members, directors,
officers, employees or agents or any of its Affiliates, including any of such
Affiliates' principals, partners, members, directors, officers, employees or
agents, irreparable injury may result to the non-breaching Members and the
Company. Accordingly, in addition to any and all other remedies at law or in
equity to which the non-breaching Members and the Company may be entitled, such
Members shall also have the right to obtain equitable relief, including, without
limitation, injunctive relief, to prevent any disclosure of Confidential
Information, plus reasonable attorneys' fees and other litigation expenses
incurred in connection therewith. In the event that any non-breaching Member or
the Company determines that any of the other Members or any of its principals,
partners, members, directors, officers, employees or agents or any of its
Affiliates, including any of such Affiliates' principals, partners, members,
directors, officers, employees or agents should be enjoined from or required to
take any action to prevent the disclosure of Confidential Information, each of
the other non-breaching Members agrees to pursue in a court of appropriate
jurisdiction such injunctive relief.
(d) Notwithstanding anything in this Section 8.11 to the contrary,
each Member (and each employee, representative or other agent of such Member),
may disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of (i) the Company and (ii) any of its transactions,
and all materials of any kind (including opinions or other tax analyses) that
are provided to the Member relating to such tax treatment and tax structure.
8.12 CERTIFICATION OF NON-FOREIGN STATUS.
Each Member or transferee of Units from a Member shall certify, upon
admission to the Company and at such other times thereafter as the Board of
Managers may request, whether such Member is a "United States Person" within the
meaning of Section 7701(a)(30) of the Code on forms to be provided by the
Company, and shall notify the Company within 30 days of any change in such
Member's status. Any Member who shall fail to provide such certification
33
when requested to do so by the Board of Managers may be treated as a non-United
States Person for purposes of U.S. Federal tax withholding and may be required
to withdraw from the Company.
8.13 SEVERABILITY.
If any provision of this Agreement is determined by a court of
competent jurisdiction not to be enforceable in the manner set forth in this
Agreement, each Member agrees that it is the intention of the Members that such
provision should be enforceable to the maximum extent possible under applicable
law. If any provisions of this Agreement are held to be invalid or
unenforceable, such invalidation or unenforceability shall not affect the
validity or enforceability of any other provision of this Agreement (or portion
thereof).
8.14 FILING OF RETURNS.
The Board of Managers or its designated agent shall prepare and file,
or cause the accountants of the Company to prepare and file, a Federal income
tax return in compliance with Section 6031 of the Code and any required state
and local income tax and information returns for each Taxable Year of the
Company.
8.15 TAX MATTERS PARTNER.
(a) A Manager who is a Member shall be designated on the Company's
annual Federal income tax return, and have full powers and responsibilities, as
the Tax Matters Partner of the Company for purposes of Section 6231(a)(7) of the
Code. In the event that no Manager is a Member, a Member shall be so designated.
Should any Member be designated as the Tax Matters Partner for the Company
pursuant to Section 6231(a)(7) of the Code, it shall, and each Member hereby
does, to the fullest extent permitted by law, delegate to a Manager selected by
the Board of Managers all of its rights, powers and authority to act as such Tax
Matters Partner and hereby constitutes and appoints such Manager as its true and
lawful attorney-in-fact, with power to act in its name and on its behalf,
including the power to act through such agents or attorneys as it shall elect or
appoint, to receive notices, to make, execute and deliver, swear to, acknowledge
and file any and all reports, responses and notices and to do any and all things
required or advisable, in the Manager's judgment, to be done by such a Tax
Matters Partner. Any Member designated as the Tax Matters Partner for the
Company under Section 6231(a)(7) of the Code shall be indemnified and held
harmless by the Company from any and all liabilities and obligations that arise
from or by reason of such designation.
(b) Each person (for purposes of this Section 8.15, called a
"Pass-Thru Member") that holds or controls an interest as a Member on behalf of,
or for the benefit of, another person or persons, or which Pass-Thru Member is
beneficially owned (directly or indirectly) by another person or persons, shall,
within 30 days following receipt from the Tax Matters Partner of any notice,
demand, request for information or similar document, convey such notice or other
document in writing to all holders of beneficial interests in the Company
holding such interests through such Pass-Thru Member. In the event the Company
shall be the subject of an income tax audit by any Federal, state or local
authority, to the extent the Company is treated as an entity for purposes of
such audit, including administrative settlement and judicial review,
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the Tax Matters Partner shall be authorized to act for, and its decision shall
be final and binding upon, the Company and each Member thereof. All expenses
incurred in connection with any such audit, investigation, settlement or review
shall be borne by the Company.
8.16 TAX ELECTIONS.
The Board of Managers may, in its sole discretion, cause the Company
to make or revoke any tax election that the Board of Managers deems appropriate,
including without limitation an election pursuant to Section 754 of the Code.
8.17 MEMBER TAX BASIS.
Upon request of the Board of Managers, each Member agrees to provide
to the Board of Managers information regarding its adjusted tax basis in its
Units along with documentation substantiating such amount.
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EACH OF THE UNDERSIGNED ACKNOWLEDGES HAVING READ THIS AGREEMENT IN ITS
ENTIRETY BEFORE SIGNING, INCLUDING THE PRE-DISPUTE ARBITRATION CLAUSE SET FORTH
IN SECTION 8.6 AND THE CONFIDENTIALITY CLAUSE SET FORTH IN SECTION 8.11.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
MANAGERS:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ III
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇ III
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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MEMBERS:
Each person who shall sign an investor
application or certification and who shall
be accepted by the Board of Managers to the
Company as a Member.