Exhibit 1(m)
QUANTITATIVE MASTER SERIES LLC
LIMITED LIABILITY COMPANY AGREEMENT
Dated: June 15, 2007
TABLE OF CONTENTS
Page
ARTICLE I NAME AND DEFINITIONS 1
Section 1.1 Name 1
Section 1.2 Definitions 2
ARTICLE II DIRECTORS 4
Section 2.1 Number of Directors and Qualification 4
Section 2.2 Term and Election 5
Section 2.3 Resignation and Removal 5
Section 2.4 Vacancies 5
Section 2.5 Meetings 5
Section 2.6 Officers; Chairman 6
Section 2.7 By-Laws 6
ARTICLE III POWERS OF DIRECTORS 6
Section 3.1 General 6
Section 3.2 Activities and Investments 7
Section 3.3 Legal Title 8
Section 3.4 Sale of Interests; Reclassification 8
Section 3.5 Borrowing Money; Pledging Company
Assets; Lending Property 8
Section 3.6 Delegation: Committees 8
Section 3.7 Collection and Payment 8
Section 3.8 Expenses 9
Section 3.9 Common Items 9
Section 3.10 Litigation 9
Section 3.11 Tax Matters 9
Section 3.12 Miscellaneous Powers 10
Section 3.13 Manner of Acting 10
ARTICLE IV INVESTMENT ADVISORY, ADMINISTRATIVE SERVICES AND PLACEMENT
AGENT ARRANGEMENTS; CUSTODIAN 10
Section 4.1 Investment Advisory and Other Arrangements 10
Section 4.2 Parties to Contract 11
Section 4.3 Custodian 11
ARTICLE V INTERESTS IN THE COMPANY 11
Section 5.1 Interests 11
Section 5.2 Establishment and Designation of Series 12
Section 5.3 Rights of Holders 13
Section 5.4 Purchase of or Increase in Interests 13
Section 5.5 Register of Interests 13
Section 5.6 Non-Transferability 14
Section 5.7 Notices 14
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Section 5.8 Limitation on Number of Holders 14
Section 5.9 No Liability of Holders 14
ARTICLE VI DECREASES AND WITHDRAWALS 14
Section 6.1 Decreases and Withdrawals 14
ARTICLE VII DETERMINATION OF BOOK CAPITAL ACCOUNT BALANCES, NET INCOME AND
DISTRIBUTIONS 14
Section 7.1 Book Capital Account Balances 14
Section 7.2 Allocations and Distributions to Holders 15
Section 7.3 Power to Modify Foregoing Procedures 15
ARTICLE VIII LIABILITY FOR COMPANY OBLIGATIONS 15
Section 8.1 Liabilities of Series 15
Section 8.2 No Personal Liability of Directors, etc. 16
Section 8.3 Indemnification 16
Section 8.4 No Protection Against Certain 1940 Act Liabilities 17
Section 8.5 No Bond Required of Directors 17
Section 8.6 No Duty of Investigation: Notice in Company
Instruments 17
Section 8.7 Insurance 18
Section 8.8 Reliance on Experts, etc 18
ARTICLE IX HOLDERS 18
Section 9.1 Meetings of Holders 18
Section 9.2 Notice of Meetings 19
Section 9.3 Record Date for Meetings 19
Section 9.4 Proxies 19
Section 9.5 Reports 19
Section 9.6 Inspection of Records 19
Section 9.7 Holder Action by Written Consent 20
ARTICLE X DURATION: DISSOLUTION OF COMPANY OR SERIES: AMENDMENT:
MERGERS: ETC, 20
Section 10.1 Duration 20
Section 10.2 Dissolution of Series or Company 20
Section 10.3 Actions Upon Dissolution. 20
Section 10.4 Amendment Procedure. 21
Section 10.5 Reorganization and Master/Feeder. 21
ARTICLE XI MISCELLANEOUS 23
Section 11.1 Certificate of Formation 23
Section 11.2 Governing Law 23
Section 11.3 Reliance by Third Parties 23
Section 11.4 Provisions in Conflict with Law or Regulations. 23
Section 11.5 Limited Liability Company Only 24
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LIMITED LIABILITY COMPANY AGREEMENT
OF
QUANTITATIVE MASTER SERIES LLC
Dated: June 15, 2007
THIS LIMITED LIABILITY COMPANY AGREEMENT of Quantitative Master Series LLC
made the 15th day of June, 2007 is being adopted in connection with the
conversion of Quantitative Master Series Trust, a Delaware statutory trust (the
"Trust"), to a Delaware limited liability company pursuant to Section 3821 of
the Statutory Trust Act and Section 18-214 of the Act.
W I T N E S S E T H:
WHEREAS, the Trust was formed under the name ▇▇▇▇▇▇▇ ▇▇▇▇▇ Index Trust
upon the filing of a Certificate of Trust with the State Office on August 28,
1996;
WHEREAS, the Trustees of the Trust (the "Trustees") approved the
conversion of the Trust to a Delaware limited liability company in accordance
with Section 3821 of the Statutory Trust Act and Section 18-214 of the Act (the
"Conversion");
WHEREAS, in accordance with Section 18-214 of the Act, the Trustees
approved (i) this Agreement and the By-Laws, (ii) the filing of the Certificate
of Conversion and (iii) the filing of the Certificate of Formation;
NOW, THEREFORE, pursuant to and in accordance with Sections 18-101(7),
18-214 and 18-301(c) of the Act, this Agreement shall constitute the limited
liability company agreement of the Company, each Person who was a holder of an
interest in the Trust on the Effective Date, automatically and with no further
action, will become on the Effective Date, a Holder of the Company holding an
Interest equivalent to the interest held by such Person in the Trust on the
Effective Date and each such Person shall be subject to, and bound by this
Agreement.
ARTICLE I
NAME AND DEFINITIONS
Name. The name of the limited liability company established hereby (the
"Company") is "Quantitative Master Series LLC," and, insofar as may be
practicable, the Company shall conduct its activities, execute all documents and
▇▇▇ or be sued under that name, which name (and the word "Company" wherever
herein used) shall refer to the Company as a separate legal entity, and shall
not refer to the Directors, officers, agents, employees or Holders. If the
Directors determine that the Company's use of such name is not advisable, the
Directors may adopt such other name for the Company as they deem proper and the
Company may hold its property and conduct its activities under such other name.
Any name change shall become effective upon the execution by a majority of the
then Directors of an instrument setting forth the new name and the filing of a
Certificate of Amendment under the Act. Any such instrument shall have the
status of an amendment to this Agreement.
new name and the filing of a Certificate of Amendment under the Act. Any such
instrument shall have the status of an amendment to this Agreement.
Definitions. Wherever they are used herein, the following terms have the
respective meanings assigned to them below:
(a) "Act" shall mean the Delaware Limited Liability Company Act, 6 Del. C.
▇▇.▇▇. 18-101 et seq., as the same may be amended from time to time.
(b) "Administrator" shall mean any party furnishing services to the
Company and the Series pursuant to any administrative services contract
described in Section 4.1.
(c) "Affiliated Person" has the meaning assigned to it in Section 2(a)(3)
of the 1940 Act.
(d) "Agreement" means this Limited Liability Company Agreement, as amended
and in effect from time to time. Reference in this Agreement to "Agreement,"
"hereof," "herein," "hereby" and "hereunder" shall be deemed to refer to this
Agreement rather than the article or section in which such words appear.
(e) "Assets belonging to" a Series shall have the meaning ascribed in
Section 5.2(a).
(f) "Book Capital Account" shall mean, for any Holder at any time, the
Book Capital Account of the Holder at such time with respect to such Holder's
interest in any Series, determined in accordance with generally accepted
accounting principles and the provisions of the 1940 Act, and each Holder shall
have a separate Book Capital Account for each Series in which it holds an
Interest.
(g) "By-Laws" means the By-Laws referred to in Section 2.7 hereof, as
amended and in effect from time to time. The By-Laws are hereby incorporated by
reference into this Agreement.
(h) "Certificate of Conversion" means the certificate of conversion filed
in the State Office in accordance with Section 18-214(b) of the Act in
connection with the Conversion.
(i) "Certificate of Formation" means the certificate of formation of the
Company, as amended or restated from time to time, filed in the State Office in
accordance with the Act.
(j) "Code" shall mean the Internal Revenue Code of 1986 and the rules and
regulations thereunder, each as amended from time to time.
(k) "Commission" means the Securities and Exchange Commission.
(l) "Company" means Quantitative Master Series LLC, a Delaware limited
liability company formed under the Act in connection with the Conversion.
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(m) "Company Property" means any and all assets, real or personal,
tangible or intangible, which are owned or held by the Company, each and every
asset of which shall be allocated and belong to a specific Series to the
exclusion of all other Series.
(n) "Custodian" means the party, other than the Company or the Series, to
the agreement described in Section 4.3 hereof.
(o) "Directors" means the Person or Persons who may from time to time be
duly elected or appointed, qualified and serving as Directors in accordance with
the provisions hereof, and reference herein to a Director or the Directors shall
refer to such Person or Persons in his, her or their capacities as director or
directors hereunder. Unless otherwise required by the context or specifically
provided, any reference herein to the Directors shall refer to the Director at
any time that there is only one Director of the Company. Each Director shall be
a "manager" as such term is defined in Section 18-101(10) of the Act.
(p) "Effective Date" means the date on which the Conversion became
effective under Section 18-214(d) of the Act.
(q) "Fundamental Policies" means the investment policies and restrictions
applicable to any Series which are set forth and designated as fundamental
policies in the Registration Statement.
(r) "Holders" shall mean as of any particular time all holders of record
of Interests in any Series at such time. Each Holder shall be a "member" of the
Company as such term is defined in Section 18-101(11) of the Act.
(s) "Institutional Investor(s)" shall mean any registered investment
company (including a unit investment trust), insurance company separate account,
common or commingled trust fund, group trust or similar organization or entity
that is an "accredited investor" within the meaning of Regulation D under the
Securities Act of 1933, and shall not include any individual, S corporation,
partnership, or grantor trust beneficially owned by any individual, S
corporation or partnership.
(t) "Interested Person" has the meaning ascribed to it in Section 2(a)(19)
of the 1940 Act.
(u) "Interest(s)" shall mean the interest of a Holder in any Series,
including all rights, powers and privileges accorded to Holders in this
Agreement, which interest may be expressed as a percentage, determined by
calculating, as the Directors shall from time to time determine, the ratio of
each Holder's Book Capital Account balance in any Series to the total of all
Holders' Book Capital Account balances in such Series. Reference herein to a
specific percentage in, or fraction of, Interests of the Holders means Holders
whose combined Book Capital Accounts represent such specified percentage or
fraction of the Book Capital Accounts of all Holders any Series or of the
Company as a whole (as the context may require).
(v) "Investment Adviser" means the party, other than the Company or the
Series, to any investment advisory contract described in Section 4.1 hereof.
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(w) "Liabilities belonging to" a Series shall have the meaning ascribed in
Section 5.2(b).
(x) "1940 Act" means the provisions of the Investment Company Act of 1940
and the rules and regulations thereunder as amended from time to time and any
order or orders thereunder which may from time to time be applicable to the
Company.
(y) "Person" means and includes individuals, limited liability companies,
corporations, partnerships, trusts, associations, joint ventures and other
entities, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
(z) "Registration Statement" means the currently effective registration
statement of the Company (as successor to the Trust) under the 1940 Act, as it
may be amended or supplemented from time to time.
(aa) "Series" refers to the Series of the Company established and
designated under or in accordance with Section 18-215 of the Act and the
provisions of Article V hereof, each of which shall be accounted for and
maintained as a separate series or portfolio of the Company.
(bb) "Statutory Trust Act" shall mean the Delaware Statutory Trust Act, 12
Del. C. ▇▇.▇▇. 3801 et seq., as the same may be amended from time to time.
(cc) The use herein of the masculine or feminine gender or the neutral
shall be construed to refer to the other gender or the neutral as well, and the
use herein of the singular shall be construed to include the plural and the
plural to include the singular, as the context may require.
ARTICLE II
DIRECTORS
Number of Directors and Qualification. The number of Directors shall
initially be five (5) who shall be ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇
▇. ▇'▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇. Hereafter, the number of Directors
shall be such number as shall be fixed from time to time by a written instrument
signed by a majority of the Directors then in office, provided, however, that
the number of Directors shall in no event be less than three (3) or more than
fifteen (15). Any vacancy created by an increase in Directors may be filled by
the appointment of any Person having the qualifications described in this
Article made by a written instrument signed by a majority of the Directors then
in office. Any such appointment shall not become effective, however, until the
Person named in the written instrument of appointment shall have accepted in
writing such appointment and agreed in writing to be bound by the terms of this
Agreement. No reduction in the number of Directors shall have the effect of
removing any Director from office. Whenever a vacancy in the number of Directors
shall occur, until such vacancy is filled as provided in this Section and
Section 2.4 hereof, the Directors in office, regardless of their number, shall
have all the powers granted to the Directors and shall discharge all the duties
imposed upon the Directors by this Agreement.
Term and Election. Except as otherwise provided in the 1940 Act, each
Director
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shall hold office until such Director resigns or is removed as provided in
Section 2.3 below.
Resignation and Removal. Any Director may resign (without need for prior
or subsequent accounting) by an instrument in writing signed by him and
delivered to the other Directors, and such resignation shall be effective upon
such delivery or at any later date according to the terms of the instrument. Any
of the Directors may be removed by the action of two-thirds of the remaining
Directors; provided, that if the removal of one or more Directors would have the
effect of reducing the number of remaining Directors below the minimum number
prescribed by Section 2.1 hereof, then subject to Section 16(a) of the 1940 Act,
at the time of the removal of such Director or Directors, the remaining
Directors shall elect or appoint a number of additional Directors at least
sufficient to increase the number of Directors holding office to the minimum
number prescribed by Section 2.1 hereof.
Vacancies. The term of office of a Director shall terminate and a vacancy
shall occur in the event of such Director's death, resignation, removal,
bankruptcy, adjudicated incompetence or other legal disability to perform the
duties of the office of Director. No such vacancy shall operate to annul this
Agreement or to revoke any existing obligations created pursuant to the terms of
this Agreement. In the case of a vacancy, the Holders of at least a majority of
the Interests entitled to vote, acting at any meeting of the Holders held in
accordance with Section 9.1 hereof, or, to the extent permitted by the 1940 Act,
a majority vote of the Directors continuing in office acting by written
instrument or instruments, may fill such vacancy, and any Director so elected by
the Directors or the Holders shall hold office as provided in this Agreement.
Meetings. Regular meetings of the Directors may be held on such notice at
such place or places and times as may be fixed by the By-Laws or by resolution
of the Directors. Special Meetings of the Directors shall be held upon the call
of the Chairman, if any, the president, the secretary or any two Directors, by
oral or telegraphic or written notice duly served on or sent, mailed or sent by
telecopy to each Director not less than one day before the meeting. No notice
need be given to any Director who attends in person or to any Director who, in
writing signed and filed with the records of the meeting either before or after
the holding thereof, waives notice. Notice or waiver of notice need not state
the purpose or purposes of the meeting. The Directors may act with or without a
meeting, subject to the requirements of the 1940 Act. A quorum for all meetings
of the Directors shall be a majority of the Directors. Unless provided otherwise
in this Agreement, any action of the Directors may be taken at a meeting by vote
of a majority of the Directors present (a quorum being present) or without a
meeting by written consent of a majority of the Directors.
Any committee of the Directors, including an executive committee, if any,
may act with or without a meeting. A quorum for all meetings of any such
committee shall be a majority of the members thereof. Unless provided otherwise
in this Agreement, any action of any such committee may be taken at a meeting by
vote of a majority of the members present (a quorum being present) or without a
meeting by written consent of a majority of the members.
With respect to actions of the Directors and any committee of the
Directors, Directors who are Interested Persons of the Company within the
meaning of Section 1.2 hereof
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or otherwise interested in any action to be taken may be counted for quorum
purposes under this Section 2.5 and shall be entitled to vote to the extent
permitted by the 1940 Act.
All or any one or more Directors may participate in a meeting of the
Directors or any committee thereof by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other and participation in a meeting pursuant to such
communications system shall constitute presence in person at such meeting.
Officers; Chairman. The Directors shall, from time to time, elect a
President, a Secretary and a Treasurer. The Directors may elect or appoint, from
time to time, a Chairman who shall preside at all meetings of the Directors and
carry out such other duties as the Directors shall designate. The Directors may
elect or appoint or authorize the President to appoint such other officers or
agents with such powers as the Directors may deem to be advisable. The
President, the Secretary and the Treasurer may, but need not, be Directors, and
shall be agents of the Company.
By-Laws. The Directors may adopt By-Laws not inconsistent with this
Agreement for the conduct of activities of the Company and may amend or repeal
such By-Laws to the extent such power is not reserved to the Holders by express
provision of such By-Laws. This Agreement and the By-Laws shall together
constitute the "limited liability company agreement" of the Company within the
meaning of Section 18-101(7) of the Act.
ARTICLE III
POWERS OF DIRECTORS
General. The Directors shall have exclusive and absolute control over the
Company Property and over the activities of the Company and each Series to the
same extent as if the Directors were the sole owners of the Company Property in
their own right, but with such powers of delegation as may be permitted by this
Agreement. The Directors shall have power to conduct the activities of the
Company and any Series and to carry on their operations and maintain offices
both within and without the State of Delaware, in any and all states of the
United States of America, and in the District of Columbia, in any foreign
country, and in any and all commonwealths, territories, dependencies, colonies,
possessions, agencies or instrumentalities of the United States of America and
of foreign governments, and to do all such other things and execute all such
instruments as they deem necessary, proper or desirable in order to promote the
interests of the Company and each Series although such things are not herein
specifically mentioned. Any determination as to what is in the interests of the
Company or any Series made by the Directors in good faith shall be conclusive.
In construing the provisions of this Agreement, the presumption shall be in
favor of a grant of power to the Directors. The Directors will not be required
to obtain any court order to deal with Company Property.
The enumeration of any specific power herein shall not be construed as
limiting the aforesaid powers. Such powers of the Directors may be exercised
without order of or resort to any court.
Activities and Investments. The Directors shall have the power with
respect to
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the Company and each Series:
(a) to conduct, operate and carry on the activities of an investment
company, and, in connection therewith:
(i) to subscribe for, purchase or otherwise acquire and invest and
reinvest in, to hold for investment or otherwise, to sell, transfer, assign,
negotiate, exchange, lend or otherwise dispose of, and to turn to account or
realize upon and generally deal in and with, domestic or foreign securities
(which term, "securities," shall include without limitation any and all bills,
notes, bonds, debentures or other obligations or evidences of indebtedness,
certificates of deposit, bankers acceptances, commercial paper, repurchase
agreements or other money market instruments; stocks, shares or other equity
ownership interests (including non-publicly traded or illiquid securities and
those securities the disposition of which is restricted under the Federal
securities laws); convertible securities; mortgage-backed or other asset-backed
securities; and warrants, options or other instruments representing rights to
subscribe for, purchase, receive or otherwise acquire or to sell, transfer,
assign or otherwise dispose of, and scrip, certificates, receipts or other
instruments evidencing any ownership rights or interests in, any of the
foregoing; and "forward commitment", "when issued" and "delayed delivery"
contracts for securities, issued, guaranteed or sponsored by any governments,
political subdivisions or governmental authorities, agencies or
instrumentalities, by any individuals, firms, companies, corporations,
syndicates, associations or trusts, or by any other organizations or entities
whatsoever, irrespective of their forms or the names by which they may be
described, whether or not they be organized and operated for profit, and whether
they be domestic or foreign with respect to the State of Delaware or the United
States of America); and
(ii) to acquire and become the owner of or interested in any
securities by delivering or issuing in exchange or payment therefor, in any
lawful manner, any of the Company Property; and
(iii) to exercise while the owner of any securities or interests
therein any and all of the rights, powers and privileges of ownership of such
securities or interests, including without limitation any and all voting rights
and rights of assent, consent or dissent pertaining thereto, and to do any and
all acts and things for the preservation, protection, improvement and
enhancement in value thereof; and
(iv) to purchase, sell and hold currencies and enter into contracts
for the future purchase or sale of currencies, including but not limited to
forward foreign currency exchange contracts; and
(v) to enter into futures and forward contracts, and to purchase and
write put and call options on futures contracts, securities, currencies and
securities indexes; and
(vi) to make loans to the extent provided in the Registration
Statement from time to time; and
(vii) to engage in such other activities as may be disclosed in the
Registration Statement from time to time; and
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(b) to conduct, operate and carry on any other lawful activities which the
Directors, in their sole and absolute discretion, consider to be (i) incidental
to the activities of the Company and each Series as an investment company, (ii)
conducive to or expedient for the benefit or protection of the Company or any
Series or the Holders, or (iii) calculated in any other manner to promote the
interests of the Company or any Series or the Holders.
The Directors shall not be limited to investing in securities maturing
before the possible dissolution of the Company or any Series, nor shall the
Directors be limited by any law limiting the investments which may be made by
fiduciaries. Notwithstanding anything to the contrary herein contained but
consistent with the applicable investment objectives, the Company and each
Series shall be managed in compliance with the requirements of the Code
applicable to regulated investment companies as though such requirements were
applied at the Series level.
Legal Title. Title to all of the assets of the Company shall at all times
be considered as vested in the Company. A limited liability company interest in
the Company is personal property. A Holder has no interest in specific Company
Property.
Sale of Interests; Reclassification. Subject to more detailed provisions
set forth in Article V and the Directors' duty of impartiality to the Holders,
the Directors shall have the power to permit Persons to purchase Interests and
to add to or reduce, in whole or in part, their Interests in any Series,
provided that Interests shall be sold only to Institutional Investors. The
Directors shall also have the power to acquire, hold, resell, dispose of,
transfer, classify, reclassify and otherwise deal in Interests of the Company or
any Series. The Directors may hold as treasury Interests, re-issue for such
consideration and on such terms as they determine, or cancel, in their
discretion from time to time, any Interests of any Series or class thereof
reacquired by the Company.
Borrowing Money; Pledging Company Assets; Lending Property. Subject to any
applicable Fundamental Policies of the Company or any Series or any applicable
provision of the By-Laws, the Directors shall have power, on behalf of the
Company or any Series, to borrow money or otherwise obtain credit and to secure
the same by mortgaging, pledging or otherwise subjecting as security any of the
Company Property, to endorse, guarantee, or undertake the performance of any
obligation, contract or engagement of any other Person and to lend Company
Property; provided that Company Property belonging to a Series shall not be
pledged, encumbered or subject to liabilities belonging to any other Series.
Delegation: Committees. The Directors shall have power, consistent with
their continuing exclusive authority over the management of the Company, each
Series and the Company Property, to delegate from time to time to such committee
or committees as they may from time to time appoint from among their own number
or to such officers, employees or agents of the Company as they may from time to
time designate the doing of such things and the execution of such instruments
either in the name of the Company or any Series or the names of the Directors or
otherwise as the Directors may deem expedient.
Collection and Payment. The Directors shall have power to collect all
property due to the Company or any Series; to pay all claims, including taxes,
against the Company Property; to prosecute, defend, compromise or abandon any
claims relating to the Company
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Property; to foreclose any security interest securing any obligations by virtue
of which any property is owed to the Company or any Series; and to enter into
releases, agreements and other instruments.
Expenses. The Directors shall have the power to incur and pay, out of the
income or the principal of the Company Property of the Series, any expenses
which, in the opinion of the Directors, are necessary or incidental to carrying
out any of the purposes of this Agreement, and to pay reasonable compensation
from the funds of the Company to themselves as Directors; provided that no
Series will be liable for the debts and obligations of any other Series, and
expenses, fees, charges, taxes, and liabilities incurred or arising in
connection with a particular Series, or in connection with the management
thereof, shall be paid out of the Company Property belonging to that Series and
not out of the Company Property belonging to any other Series. The Directors
shall not be obligated to account to the Holders for the retention of
compensation, and each Holder agrees that compliance with the accounting
requirements of the 1940 Act and of this Agreement shall constitute satisfactory
accounting with respect to all acts of the Directors. The Directors shall fix
the compensation of all officers, employees and Directors of the Company and may
pay such compensation out of the Company Property without reduction of the
Directors' compensation.
Common Items. All expenses and other items of the Company which are common
to the Series shall be borne by or allocated to the Series proportionately based
upon the relative net asset values of each. Such common items shall include, but
not be limited to, Directors' fees; 1940 Act registration expenses;
organizational expenses of the Company, exclusive of organizational expenses
attributable to any specific Series; and accounting expenses relating to the
Company which are not attributable to any specific Series.
Litigation. The Directors shall have the power to engage in and to
prosecute, defend, compromise, abandon, or adjust, by arbitration or otherwise,
any actions, suits, proceedings, disputes, claims, and demands relating to the
Company or any Series or the Company Property, and, out of the Company Property,
to pay or to satisfy any debts, claims or expenses incurred in connection
therewith, including those of litigation, and such power shall include without
limitation the power of the Directors or any appropriate committee thereof, in
the exercise of their or its good faith business judgment, consenting to dismiss
any action, suit, proceeding, dispute, claim or demand, brought by any Person,
including, to the extent permitted by applicable law, a Holder in such Holder's
own name or in the name of the Company or any Series, whether or not the
Company, a Series or any of the Directors may be named individually therein or
the subject matter arises by reason of business for or on behalf of the Company
or any Series.
Tax Matters. The Directors shall have the exclusive power, authority and
responsibility with respect to the Company and the Series regarding (i)
preparation and filing of tax returns; (ii) providing reports to the Holders
regarding tax information necessary to the filing of their respective tax
returns; (iii) making any and all available elections with respect to the tax
treatment of the Series and their investments; (iv) representing the Series
before the Internal Revenue Service and/or any state taxing authority and
exercising the powers and authorities of a tax matters partner under the Code
with respect to the Series' partnership tax returns; (v) exercising such
responsibility as may be imposed by law with respect to withholding from a
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Holder's share of income or distributions; (vi) providing to the accountants of
the Series such instructions regarding allocations of realized income, gains and
losses as may be necessary or appropriate to assure compliance with applicable
provisions of the Code and Treasury Regulations; and (vii) any and all other tax
matters.
Miscellaneous Powers. The Directors shall have the power to: (a) employ or
contract with such Persons as the Directors may deem desirable for the
transaction of the activities of the Company or any Series and eliminate such
employees or contractual relationships as they consider appropriate; (b) enter
into joint ventures, partnerships and any other combinations or associations;
(c) remove Directors or fill vacancies in or add to their number, subject to and
in accordance with Sections 2.3 and 2.4 hereof; elect and remove at will such
officers and appoint and terminate such agents or employees as they consider
appropriate; and appoint from their own number and terminate at will any one or
more committees which may exercise some or all of the power and authority of the
Directors as the Directors may determine; (d) purchase, and pay for out of
Company Property, insurance policies insuring the Company Property, and, to the
extent permitted by law and not inconsistent with any applicable provision of
this Agreement or the By-Laws, insuring the Investment Adviser, Administrator,
placement agent, Holders, Directors, officers, employees, agents or independent
contractors of the Company or any Series against all claims arising by reason of
holding any such position or by reason of any action taken or omitted to be
taken by any such Person in such capacity, whether or not constituting
negligence, or whether or not the Company or any Series would have the power to
indemnify such Person against such liability; (e) indemnify any person with whom
the Company or any Series has dealings, including the Holders, Directors,
officers, employees, agents, Investment Adviser, Administrator, placement agent
and independent contractors of the Company or any Series, to such extent
permitted by law and not inconsistent with the applicable provisions of this
Agreement; (f) subject to applicable Fundamental Policies, guarantee
indebtedness or contractual obligations of others; (h) determine and change the
fiscal year of the Company or any Series and the method by which its accounts
shall be kept; and (g) adopt a seal for the Company or any Series, but the
absence of such seal shall not impair the validity of any instrument executed on
behalf of the Company or Series.
Manner of Acting. Except as otherwise provided herein, in the By-Laws, in
the 1940 Act or in any other applicable provision of law, any action to be taken
by the Directors may be taken in the manner set forth in Section 2.5 hereof.
ARTICLE IV
INVESTMENT ADVISORY, ADMINISTRATIVE SERVICES
AND PLACEMENT AGENT ARRANGEMENTS; CUSTODIAN
Investment Advisory and Other Arrangements. The Directors may in their
discretion, from time to time, cause the Series to separately enter into
investment advisory and administrative services contracts or placement agent
agreements whereby the other party to such contract or agreement shall undertake
to furnish to the Series specified therein such investment advisory,
administrative, placement agent and/or other services as the Directors shall,
from time to time, consider desirable with respect to such Series and all upon
such terms and conditions as the Directors may in their discretion determine.
Notwithstanding any other provisions of this Agreement, the Directors may
authorize any Investment Adviser (subject to such general or
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specific instructions as the Directors may, from time to time, adopt) to effect
purchases, sales, loans or exchanges of Company Property on behalf of any Series
or may authorize any officer, employee or Director to effect such purchases,
sales, loans or exchanges pursuant to recommendations of any such Investment
Adviser (and all without further action by the Directors). Any such purchase,
sales, loans and exchanges shall be deemed to have been authorized by all of the
Directors.
Parties to Contract. Any contract of the character described in Section
4.1 of this Article IV or in the By-Laws of the Company may be entered into with
any corporation, firm, trust or association, although one or more of the
Directors or officers of the Company may be an officer, director, trustee,
shareholder, or member of such other party to the contract; and no such contract
shall be invalidated or rendered voidable by reason of the existence of any such
relationship, nor shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Company or any Series
under or by reason of said contract or accountable for any profit realized
directly or indirectly therefrom, provided that the contract when entered into
was reasonable and fair and not inconsistent with the provisions of this Article
IV or the By-Laws. The same Person (including a firm, corporation, trust, or
association) may be the other party to contracts entered into pursuant to
Section 4.1 above or the By-Laws of the Company, and any individual may be
financially interested or otherwise affiliated with Persons who are parties to
any or all of the contracts mentioned in this Section 4.2.
Custodian. The Directors may appoint one or more banks or trust companies
as custodian of the securities and cash belonging to the Series. The agreement
providing for such appointment shall contain such terms and conditions as the
Directors in their discretion determine to be not inconsistent with this
Agreement, the applicable provisions of the 1940 Act and any applicable
provisions of the By-Laws of the Company. One or more subcustodians may be
appointed in a manner not inconsistent with this Agreement, the applicable
provisions of the 1940 Act and any applicable provisions of the By-Laws of the
Company.
ARTICLE V
INTERESTS IN THE COMPANY
Interests. Subject to the limitations contained in Section 5.8 relating to
the number of permitted Holders, the limited liability company interests in the
Company shall consist of an unlimited number of non-transferable Interests which
shall be denominated in dollars corresponding to the value of such Interests
determined by reference to the corresponding Book Capital Accounts. All
Interests shall be validly issued, fully paid and nonassessable when issued for
such consideration as the Directors shall determine. The Directors may permit
the purchase of Interests (for cash or other consideration acceptable to the
Directors, subject to the requirements of the ▇▇▇▇ ▇▇▇) but only if the
purchaser is an Institutional Investor. Subject to applicable law, the
provisions hereof and such restrictions as may be adopted by the Directors, a
Holder may increase its Interest by contributions or decrease its Interest by
withdrawals without limitation. Any Person to whom Interests are issued after
the date hereof shall be admitted to the Company as a Holder when it acquires an
Interest and it is reflected on the register of Holders.
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Pursuant to Section 18-215 of the Act, the Directors shall have authority,
from time to time, to establish Interests of a Series, each of which shall be
separate and distinct from the Interests in any other Series. The Series shall
include, without limitation, those Series specifically established and
designated in Section 5.2 hereof, and such other Series as the Directors may
deem necessary or desirable. The Directors shall have exclusive power without
the requirement of Holder approval to establish and designate such separate and
distinct Series, and, subject to the provisions of this Agreement and the 1940
Act, to fix and determine the rights of Holders of Interests in such Series,
including with respect to the price, terms and manner of purchase and
redemption, dividends and other distributions, rights on liquidation, sinking or
purchase fund provisions, conversion rights and conditions under which the
Holders of the several Series shall have separate voting rights or no voting
rights.
Establishment and Designation of Series. The establishment and designation
of any Series shall be effective upon the execution by the Secretary or an
Assistant Secretary of the Company, pursuant to authorization by a majority of
the Directors, of an instrument setting forth such establishment and designation
and the relative rights and preferences of the Interests of such Series, or as
otherwise provided in such instrument. At any time that there are no Interests
outstanding of any particular Series previously established and designated, the
Directors may by resolution adopted by a majority of their number, and evidenced
by an instrument executed by the Secretary or an Assistant Secretary of the
Company, abolish that Series and the establishment and designation thereof. Each
instrument referred to in this paragraph shall have the status of an amendment
to this Agreement.
Without limiting the authority of the Directors set forth above to
establish and designate further Series, the Directors hereby establish and
designate nine Series: Master MidCap Index Series, Master Core Bond Enhanced
Index Series, Master Enhanced S&P 500 Series, Master Enhanced International
Series, Master Extended Market Index Series, Master Enhanced Small Cap Series,
Master International Index Series, Master S&P 500 Index Series and Master Small
Cap Index Series. The Interests of each of these Series and any Interests of any
further Series that may from time to time be established and designated by the
Directors shall (unless the Directors otherwise determine with respect to some
further Series at the time of establishing and designating the same) have the
following relative rights and preferences:
(a) Assets Belonging to Series. All consideration received by the Company
for the issue or sale of Interests of a particular Series, together with all
assets in which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be, shall
be held by the Directors for the benefit of the holders of Interests of that
Series and shall irrevocably belong to that Series for all purposes, and shall
be so recorded upon the books of account of the Company. Such consideration,
assets, income, earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds, in whatever form the
same may be, are herein referred to as "assets belonging to" that Series. No
Series shall have any right to or interest in the assets belonging to any other
Series, and no Holder shall have any right or interest with respect to the
assets belonging to any Series in which it does not hold an Interest,
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(b) Liabilities Belonging to Series. The assets belonging to each
particular Series shall be charged with the liabilities in respect of that
Series and all expenses, costs, charges and reserves attributable to that
Series. The liabilities, expenses, costs, charges and reserves so charged to a
Series are herein referred to as "liabilities belonging to" that Series. Subject
to Section 8.1 hereof, no Series shall be liable for or charged with the
liabilities belonging to any other Series.
(c) Voting. On each matter submitted to a vote of the Holders, each Holder
of an Interest in each Series shall be entitled to a vote proportionate to its
Interest in such Series as recorded on the books of the Company and all Holders
of Interests in each Series shall vote as a separate class except as to voting
for Directors and as otherwise required by the 1940 Act, in which case all
Holders shall vote together as a single class. As to any matter which does not
affect the interest of a particular Series, only the Holders of Interests of the
one or more affected Series shall be entitled to vote.
Rights of Holders. The ownership of the Company Property of every
description and the right to conduct any activities hereinbefore described shall
be vested exclusively in the Company, and the Holders shall have no interest
therein. Holders shall have no right to call for any partition or division of
any property, profits, rights or interests of the Company or any Series. No
Holder shall have any interest in or rights with respect to any Series in which
it does not hold an Interest. The Interests shall be personal property giving
only the rights specifically set forth in this Agreement. The Holders shall have
no right to demand payment for their Interests or any other rights of dissenting
shareholders in the event the Company participates in any transaction which
would give rise to appraisal or dissenter's rights by a shareholder of a
corporation organized under the General Corporation Law of the State of Delaware
or otherwise. Holders shall have no preemptive or other rights to subscribe for
additional Interests or other securities issued by the Company. All Persons, by
virtue of acquiring an Interest in the Company and being registered as a Holder
in accordance with Section 5.5 hereof, shall be deemed to have assented to, and
shall be bound by, this Agreement to the same extent as if such Person was a
party hereto.
Purchase of or Increase in Interests. The Directors, in their discretion,
may, from time to time, without a vote of the Holders, permit the purchase of
additional Interests of any Series by a Person or Persons (including existing
Holders), subject to the provisions of Section 5.1 hereof, and for such type of
consideration, including cash or property, at such time or times (including,
without limitation, each business day), and on such terms as the Directors may
deem best, and may in such manner acquire other assets (including the
acquisition of assets subject to, and in connection with the assumption of
liabilities) and businesses.
Register of Interests. A register shall be kept by the Company which shall
contain the names and addresses of the Holders and the Book Capital Account
balances of each Holder in each Series. Each such register shall be conclusive
as to who the Holders are and who shall be entitled to payments of distributions
or otherwise to exercise or enjoy the rights of Holders. No Holder shall be
entitled to receive payment of any distribution, nor to have notice given to it
as herein provided, until it has given its address to such officer or agent of
the Company as shall keep the said register for entry thereon.
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Non-Transferability. Interests shall not be transferable except with the
prior written consent of all of the Directors and all remaining Holders of
Interests.
Notices. Any and all notices to which any Holder hereunder may be entitled
and any and all communications shall be deemed duly served or given if mailed,
postage prepaid, addressed to any Holder of record at its last known address as
recorded on the register of the Company.
Limitation on Number of Holders. Notwithstanding any provision hereof to
the contrary, the number of Holders of Interests in any Series shall be limited
to fewer than 100. Solely for purposes of determining the number of Holders of
Interests in any Series under this Section 5.8, each beneficial owner of a
grantor trust which is itself a Holder shall be treated as a Holder of such
Interest.
No Liability of Holders. All Interests, when issued in accordance with
this Agreement, shall be fully paid and nonassessable. Holders shall be entitled
to the protection against personal liability for the obligations of the Company
under Section 18-303 of the Act. The Company shall indemnify and hold each
Holder harmless from and against any claim or liability to which such Holder may
become subject solely by reason of his or her being or having been a Holder and
not because of such Holder's acts or omissions or for some other reason, and
shall reimburse such Holder for all legal and other expenses reasonably incurred
by him or her in connection with any such claim or liability (upon proper and
timely request by the Holder); provided, however, that no Holder shall be
entitled to indemnification by an Series unless such Holder is a Holder of
Interests of such Series.
ARTICLE VI
DECREASES AND WITHDRAWALS
Decreases and Withdrawals. A Holder shall have the right on any day the
New York Stock Exchange is open to decrease its Interest in any Series, and to
withdraw completely from any Series, at the next determined net asset value
attributable to the Interest (or portion thereof) being withdrawn, and an
appropriate adjustment therefor shall be made to such Holder's Book Capital
Account. The rights of a Holder upon withdrawal from a Series shall be limited
to the assets belonging to the Series from which the withdrawal is made. The
Company may, subject to compliance with the 1940 Act, charge fees for effecting
such decrease or withdrawal, at such rates as the Directors may establish, and
may at any time and from time to time, suspend such right of decrease or
withdrawal. The procedures for effecting decreases or withdrawals shall be as
determined by the Directors from time to time, subject to the requirements of
the 1940 Act.
ARTICLE VII
DETERMINATION OF BOOK CAPITAL ACCOUNT BALANCES,
NET INCOME AND DISTRIBUTIONS
Book Capital Account Balances. The Book Capital Account balances of
Holders of the Company with respect to each Series shall be determined on such
days and at such time or times as the Directors may determine, consistent with
the requirements of the 1940 Act, with income, gains and losses of each Series
determined in accordance with generally accepted
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accounting principles to be allocated among the Holders of such Series in
accordance with their Interests. The power and duty to make calculations of the
Book Capital Account balances of the Holders may be delegated by the Directors
to the Investment Adviser, Administrator, Custodian, or such other person as the
Directors may determine.
Allocations and Distributions to Holders. In compliance with the Treasury
Regulations promulgated under applicable provisions of the Code, the Directors
shall (i) allocate items of taxable income, gain, loss and deduction with
respect to each Series to Holders of the Interests in such Series, provided
that, except as may otherwise be specifically provided in the Treasury
Regulations, in all cases allocations of specific types of income shall be
proportionate to the Interests of the Holders in that Series, and (ii) upon
liquidation of a Series, make final distribution of the net assets of such
Series among the Holders of the Interests in such Series in accordance with
their respective Book Capital Accounts. The Directors shall provide each Holder
that is a regulated investment company, as defined in Section 851(a) of the
Code, information which will enable it to take into account its share of items
of taxable income, gain, loss and deduction as they are taken into account by
the Series in order to facilitate compliance with Code Section 4982. Any income
tax withholding or other withholding of taxes required by law with respect to
the allocable share of income of, or distributions to, a Holder shall be
accounted for as a distribution to and charged to the Book Capital Account of
such Holder at the time of payment of such taxes to the applicable taxing
authority. The Directors may always retain from the assets belonging to a Series
such amount as they may deem necessary to pay the liabilities belonging to that
Series.
Power to Modify Foregoing Procedures. Notwithstanding any of the foregoing
provisions of this Article VII, the Directors may prescribe, in their absolute
discretion, such other bases and times for determining the net income and net
assets of the Company and of each Series as they may deem necessary or desirable
to enable the Company to comply with any provision of the 1940 Act, any rule or
regulation thereunder, or any order of exemption issued by said Commission, all
as in effect now or hereafter amended or modified.
ARTICLE VIII
LIABILITY FOR COMPANY OBLIGATIONS
Liabilities of Series. Without limitation of the provisions of Section
5.2(b) hereof, but subject to the right of the Directors in their discretion to
allocate general liabilities, expenses, costs, charges or services as herein
provided, the debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular Series shall be
enforceable against the assets of such Series only, and not against the assets
of any other Series. Notice of this limitation on interseries liabilities shall
be set forth in the Certificate of Formation (whether originally or by
amendment) as filed or to be filed in the State Office pursuant to Sections
18-201 and 18-202 of the Act, and upon the giving of such notice in the
Certificate of Formation, the statutory provisions of Section 18-215(b) of the
Act relating to limitations on interseries liabilities (and the statutory effect
under Section 18-215(b) of setting forth such notice in the certificate of
formation) shall become applicable to the Company and each Series. Every note,
bond, contract or other undertaking issued by or on behalf of a particular
Series shall include a recitation limiting the obligation represented thereby to
that Series and its assets.
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Section 8.1 No Personal Liability of Directors, etc.
(a) Directors. The Directors shall be entitled to the protection against
personal liability for the obligations of the Company under Section 18-303 of
the Act. No Director shall be liable to the Company, its Holders, or to any
Director, officer, employee, or agent thereof for any action or failure to act
(including, without limitation, the failure to compel in any way any former or
acting Director to redress any breach of trust) except for his own bad faith,
willful misfeasance, gross negligence or reckless disregard of his duties.
(b) Officers, Employees or Agents of the Company. The officers, employees
and agents of the Company, when acting in such capacities, shall not be
personally liable to any person other than the Company or a Holder for any act,
omission or obligation of the Company or Director. No officer, employee or agent
of the Company shall be liable to the Company, its Holders, or to any Director,
officer, employee, or agent thereof for any action or failure to act (including,
without limitation, the failure to compel in any way any former or acting
Director to redress any breach of trust) except for his own bad faith, willful
misfeasance, gross negligence or reckless disregard of his duties.
(c) The provisions of this Agreement, to the extent that they expand or
restrict the duties and liabilities of the Directors, officers, employees or
agents of the Company otherwise existing at law or in equity, are agreed by the
Holders to modify to that extent such other duties and liabilities.
Indemnification. The Company shall indemnify each of its Directors,
officers, employees, and agents (including persons who serve at its request as
directors, officers or trustees of another organization in which it has any
interest, as a shareholder, creditor or otherwise) against all liabilities and
expenses (including amounts paid in satisfaction of judgments, in compromise, as
fines and penalties, and as counsel fees) reasonably incurred by him in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, in which he may be involved or with which
he may be threatened, while in office or thereafter, by reason of his being or
having been such a Director, officer, employee or agent, except with respect to
any matter as to which he shall have been adjudicated to have acted in bad
faith, willful misfeasance, gross negligence or reckless disregard of his
duties, such liabilities and expenses being liabilities belonging to the Series
out of which such claim for indemnification arises; provided, however, that as
to any matter disposed of by a compromise payment by such Person, pursuant to a
consent decree or otherwise, no indemnification either for said payment or for
any other expenses shall be provided unless there has been a determination that
such Person did not engage in willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of his office by the
court or other body approving the settlement or other disposition or, in the
absence of a judicial determination, by a reasonable determination, based upon a
review of readily available facts (as opposed to a full trial-type inquiry),
that he did not engage in such conduct, which determination shall be made by a
majority of a quorum of Directors who are neither Interested Persons of the
Company nor parties to the action, suit or proceeding, or by written opinion
from independent legal counsel approved by the Directors. The rights accruing to
any Person under these provisions shall not exclude any other right to which he
may be lawfully entitled; provided that no Person may satisfy any right of
indemnity or reimbursement granted herein or to which he may be otherwise
entitled except out
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of the Company Property. The Directors may make advance payments in connection
with indemnification under this Section 8.3; provided that any advance payment
of expenses by the Company to any Director, officer, employee or agent shall be
made only upon the undertaking by such Director, officer, employee or agent to
repay the advance unless it is ultimately determined that he is entitled to
indemnification as above provided, and only if one of the following conditions
is met:
(d) the Director, officer, employee or agent to be indemnified provides a
security for his undertaking; or
(e) the Company shall be insured against losses arising by reason of any
lawful advances; or
(f) there is a determination, based on a review of readily available
facts, that there is reason to believe that the Director, officer, employee or
agent to be indemnified ultimately will be entitled to indemnification, which
determination shall be made by:
(i) a majority of a quorum of Directors who are neither Interested
Persons of the Company nor parties to the Proceedings; or
(ii) an independent legal counsel in a written opinion.
No Protection Against Certain 1940 Act Liabilities. Nothing contained in
Sections 8.1, 8.2 or 8.3 hereof shall protect any Director or officer of the
Company from any liability to the Company or its Holders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office. Nothing contained in Sections 8.1, 8.2 or 8.3 hereof or in any agreement
of the character described in Section 4.1 or 4.2 hereof shall protect any
Investment Adviser to the Company or any Series against any liability to the
Company or any Series to which he would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of his or
its duties to the Company or Series, or by reason of his or its reckless
disregard to his or its obligations and duties under the agreement pursuant to
which he serves as Investment Adviser to the Company or any Series.
No Bond Required of Directors. No Director shall be obligated to give any
bond or other security for the performance of any of his duties hereunder.
No Duty of Investigation: Notice in Company Instruments. etc. No
purchaser, lender, seller or other Person dealing with the Directors or with any
officer, employee or agent of the Company shall be bound to make any inquiry
concerning the validity of any transaction purporting to be made by the
Directors or by said officer, employee or agent or be liable for the application
of money or property paid, lent or delivered to or on the order of the Directors
or of said officer, employee or agent. Every contract, undertaking, instrument,
certificate, interest or obligation or other security of the Company, and every
other act or thing whatsoever executed in connection with the Company, shall be
conclusively presumed to have been executed or done by the executors thereof
only in their capacity as Directors under this Agreement or in their capacity as
officers, employees or agents of the Company. Every written obligation,
contract, instrument, certificate or other interest or undertaking of the
Company made or sold by the Directors or by
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any officer, employee or agent of the Company, in his capacity as such, may
contain an appropriate recital to the effect that the Holders, Directors,
officers, employees and agents of the Company shall not personally be bound by
or liable thereunder, nor shall resort be had to their private property for the
satisfaction of any obligation or claim thereunder, and appropriate references
shall be made therein to this Agreement, and may contain any further recital
which they may deem appropriate, but the omission of such recital shall not
operate to impose personal liability on any of the Holders, Directors, officers,
employees or agents of the Company.
Insurance. The Directors may maintain insurance for the protection of the
Company Property, its Holders, Directors, officers, employees and agents in such
amount as the Directors shall deem adequate to cover possible tort liability,
and such other insurance as the Directors in their sole judgment shall deem
advisable.
Reliance on Experts, etc. Each Director, officer or employee of the
Company shall, in the performance of his duties, be fully and completely
justified and protected with regard to any act or any failure to act resulting
from reliance in good faith upon the books of account or other records of the
Company, upon an opinion of counsel, or upon reports made to the Company by any
of its officers or employees or by any Investment Adviser, the Administrator,
accountant, appraiser or other expert or consultant selected with reasonable
care by the Directors, officers or employees of the Company, regardless of
whether such counsel or expert may also be a Director; provided that nothing in
this Section shall be deemed to exonerate the Directors from their duties of
reasonable care, diligence and prudence or any other duties imposed by the 1940
Act.
ARTICLE IX
HOLDERS
Meetings of Holders. Meetings of the Holders may be called at any time by
a majority of the Directors and shall be called by any Director upon written
request of Holders holding, in the aggregate, not less than 10% of the Interests
of a Series (if the meeting relates solely to that Series), or not less than 10%
of the Interests of the Company (if the meeting relates to the Company and not
solely to a particular Series), such request specifying the purpose or purposes
for which such meeting is to be called. Any such meeting shall be held within or
without the State of Delaware on such day and at such time as the Directors
shall designate. Holders of at least one-third of the Interests of the Series
(if the meeting relates solely to that Series) or Holders of at least one-third
of the Interests of the Company (if the meeting relates to the Company and not
solely to a particular Series), present in person or by proxy, shall constitute
a quorum for the transaction of any business, except as may otherwise be
required by the 1940 Act or other applicable law or by this Agreement or the
By-Laws of the Company. If a quorum is present at a meeting, an affirmative vote
by the Holders present, in person or by proxy, holding more than 50% of the
total Interests of the Holders present, either in person or by proxy, at such
meeting constitutes the action of the Holders, unless the 1940 Act, other
applicable law, this Agreement or the By-Laws of the Company require a greater
number of affirmative votes.
Notice of Meetings. Notice of all meetings of the Holders stating the
time, place and purposes of the meeting, shall be given by the Directors by mail
to each Holder of the Series or the Company, as the case may be, at his
registered address, mailed at least 10 days and not
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more than 50 days before the meeting. At any such meeting, any business properly
before the meeting may be considered whether or not stated in the notice of the
meeting. Any adjourned meeting may be held as adjourned without further notice.
Record Date for Meetings. For the purpose of determining Holders who are
entitled to notice of and to vote at any meeting, or to participate in any
distribution, or for the purpose of any other action, the Directors may from
time to time fix a date, not more than 90 days prior to the date of any meeting
of the Holders or payment of distributions or other action, as the case may be,
as a record date for the determination of the Persons to be treated as Holders
of record of a particular Series or the Company for such purposes.
Proxies. etc. At any meeting of Holders, any Holder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Secretary, or with such other
officer or agent of the Company as the Secretary may direct, for verification
prior to the time at which such vote shall be taken. Pursuant to a resolution of
a majority of the Directors, proxies may be solicited in the name of one or more
Directors or one or more of the officers of the Company. Only Holders of record
shall be entitled to vote. Each Holder shall be entitled to vote proportionate
to his Interest in the Company or in any Series (as the context may require).
When Interests are held jointly by several persons, any one of them may vote at
any meeting in person or by proxy in respect of such Interest, but if more than
one of them shall be present at such meeting in person or by proxy, and such
joint owners or their proxies so present disagree as to any vote to be cast,
such vote shall not be received in respect of such Interest. A proxy purporting
to be executed by or on behalf of a Holder shall be deemed valid unless
challenged at or prior to its exercise, and the burden of proving invalidity
shall rest on the challenger. If the Holder is a minor or a person of unsound
mind, and subject to guardianship or to the legal control of any other person as
regards the charge or management of his Interest, he may vote by his guardian or
such other person appointed or having such control, and such vote may be given
in person or by proxy.
Reports. The Directors shall cause to be prepared, at least annually, a
report of operations containing a balance sheet and statement of income and
undistributed income of each Series prepared in conformity with generally
accepted accounting principles and an opinion of an independent public
accountant on such financial statements, The Directors shall, in addition,
furnish to the Holders at least semi-annually interim reports containing an
unaudited balance sheet as of the end of such period and an unaudited statement
of income and surplus for the period from the beginning of the current fiscal
year to the end of such period.
Inspection of Records. The records of the Company shall be open to
inspection by Holders during normal business hours for any purpose not harmful
to the Company.
Holder Action by Written Consent. Any action which may be taken by Holders
may be taken without a meeting if Holders holding more than 50% of the total
Interests entitled to vote (or such larger proportion thereof as shall be
required by any express provision of this Agreement) shall consent to the action
in writing and the written consents are filed with the records of the meetings
of Holders. Such consent shall be treated for all purposes as a vote taken at a
meeting of Holders.
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ARTICLE X
DURATION: DISSOLUTION OF
COMPANY OR SERIES: AMENDMENT: MERGERS: ETC,
Duration. Subject to possible termination or dissolution in accordance
with Sections 10.2 and 10.3, respectively, the Company created hereby shall have
perpetual existence.
Dissolution of Series or Company. Any Series shall be dissolved (i) by the
affirmative vote of the Holders of not less than two-thirds of the total
outstanding Interests of the Series, at any meeting of the Holders or by an
instrument in writing, without a meeting, signed by a majority of the Directors
and consented to by the Holders of not less than two-thirds of such Interests,
(ii) by unanimous consent of the Directors by written notice of dissolution to
the Holders of the Interests of the Series, (iii) upon the complete withdrawal
of a Holder from the Series, or (iv) upon the bankruptcy or dissolution of a
Holder of an Interest in the Series; provided, that in the case of an event of
dissolution described in (iii) or (iv), the procedure for termination shall be
deferred for 120 days after the event and the remaining Holders of Interests in
such Series may, by affirmative vote of over 50% of total outstanding Interests,
agree to continue the Series. The Company shall be dissolved upon the
dissolution of the last remaining Series.
Section 10.1 Actions Upon Dissolution.
(a) Upon an event of dissolution of the Company or a Series, unless the
Company or Series is continued in accordance with the proviso to Section 10.2
above, the affairs of the Company or Series shall be wound-up in accordance with
the following provisions:
(i) The Company (or Series, as applicable) shall thereafter carry on
no business except for the purpose of winding up its affairs.
(ii) The Directors shall proceed to wind up the affairs of the
Company (or Series, as applicable) and all of the powers of the Directors under
this Agreement shall continue until the affairs of the Company (or Series, as
applicable) shall have been wound up, including the power to fulfill or
discharge the contracts of the Company (or Series, as applicable), collect its
assets, sell, convey, assign, exchange, transfer or otherwise dispose of all or
any part of the remaining Company Property (or assets belonging to the Series,
as applicable) to one or more persons at public or private sale for
consideration which may consist in whole or in part of cash, securities or other
property of any kind, discharge or pay its liabilities, and to do all other acts
appropriate to liquidate its business; provided that any sale, conveyance,
assignment, exchange, transfer or other disposition of all or substantially all
of the Company Property or substantially all of the assets belonging to a
particular Series other than for cash, shall require approval of the principal
terms of the transaction and the nature and amount of the consideration by the
vote at a meeting, or by written consent, of Holders holding more than 50% of
the total outstanding Interests of the Company or Series, as the case may be,
entitled to vote.
(iii) After paying (or making reasonable provision for the payment
of) all liabilities belonging to the Series subject of termination and upon
receipt of such releases, indemnities and refunding agreements as they deem
necessary for their protection, the Directors
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may distribute the remaining Company Property or assets belonging to such
Series, in cash or in kind or partly each, among the Holders of such Series
according to their Book Capital Accounts in such Series. In all cases, as herein
provided, the rights of Holders of Interests in a Series upon termination and
liquidation of that Series shall be limited to the assets belonging to that
Series.
(b) Upon completion of the winding up of the Company's affairs as provided
herein, the Directors shall cause a certificate of cancellation to be filed in
accordance with Section 18-203 of the Act and the Directors shall thereupon be
discharged from all further liabilities and duties hereunder, and the rights and
interests of all Holders shall thereupon cease.
Section 10.2 Amendment Procedure.
(a) Two-thirds (2/3) of the Directors then in office may amend this
Agreement at any time for any purpose without the approval of the Holders of
Interests; provided, that the vote or a written consent of Holders holding more
than 50% of the total outstanding Interests shall be necessary to approve any
amendment whenever such vote or consent is required under the 1940 Act.
(b) Nothing contained in this Agreement shall permit the amendment of this
Agreement to impair the exemption from personal liability of Holders, Directors,
officers, employees and agents of the Company.
(c) A certificate signed by a Director or by the Secretary or any
Assistant Secretary of the Company, setting forth an amendment and reciting that
it was duly adopted by the Holders or by the Directors as aforesaid or a copy of
this Agreement, as amended, certified by a Director or the Secretary or any
Assistant Secretary of the Company, certifying that such limited liability
company agreement is a true and correct copy of the limited liability company
agreement of the Company as amended, shall be conclusive evidence of such
amendment when lodged among the records of the Company.
Section 10.3 Reorganization and Master/Feeder.
(a) Notwithstanding anything else herein, the Directors may, without
Holder approval unless such approval is required by the 1940 Act, (i) cause the
Company to convert into or merge, reorganize or consolidate with or into one or
more trusts, partnerships, limited liability companies, associations,
corporations or other business entities (or a series of any of the foregoing to
the extent permitted by law) (including trusts, partnerships, limited liability
companies, associations, corporations or other business entities created by the
Directors to accomplish such conversion, merger or consolidation) so long as the
surviving or resulting entity is an open-end management investment company under
the 1940 Act, or is a series thereof to the extent permitted by law, and that,
in the case of any trust, partnership, limited liability company, association,
corporation or other business entity created by the Directors to accomplish such
conversion, merger or consolidation, may succeed to or assume the Company's
registration under the 1940 Act and that, in any case, is formed, organized or
existing under the laws of the United States or of a state, commonwealth,
possession or colony of the United States, (ii) cause the Interests to be
exchanged under or pursuant to any state or federal statute to the extent
permitted by law, (iii) cause the Company to incorporate under the laws of a
state,
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commonwealth, possession or colony of the United States, (iv) sell or convey all
or substantially all of the assets of the Company or any Series or class to
another Series or class of the Company or to another trust, partnership, limited
liability company, association, corporation or other business entity (or a
series of any of the foregoing to the extent permitted by law) (including a
trust, partnership, limited liability company, association, corporation or other
business entity created by the Directors to accomplish such sale and
conveyance), organized under the laws of the United States or of any state,
commonwealth, possession or colony of the United States so long as such trust,
partnership, limited liability company, association, corporation or other
business entity is an open-end management investment company under the 1940 Act
and, in the case of any trust, partnership, limited liability company,
association, corporation or other business entity created by the Directors to
accomplish such sale and conveyance, may succeed to or assume the Company's
registration under the 1940 Act, for adequate consideration as determined by the
Directors which may include the assumption of all outstanding obligations, taxes
and other liabilities, accrued or contingent of the Company or any affected
Series or class, and which may include Interests of such other Series or class
of the Company or shares, beneficial interests, stock or other ownership
interest of such trust, partnership, limited liability company, association,
corporation or other business entity (or series thereof) or (v) at any time sell
or convert into money all or any part of the assets of the Company or any Series
or class thereof. Any agreement of merger, reorganization, consolidation,
exchange or conversion or certificate of merger, certificate of conversion or
other applicable certificate may be signed by an authorized person designated by
the Directors and facsimile signatures conveyed by electronic or
telecommunication means shall be valid.
(b) Pursuant to and in accordance with the provisions of Section 18-209(f)
of the Act, and notwithstanding anything to the contrary contained in this
Agreement, an agreement of merger or consolidation approved by the Directors in
accordance with this Section 10.5 may effect any amendment to the limited
liability company agreement of the Company or effect the adoption of a new
limited liability company agreement of the Company if the Company is the
surviving or resulting limited liability company in the merger or consolidation.
(c) Notwithstanding anything else herein, the Directors may, without
Holder approval unless such approval is required by the 1940 Act, create one or
more limited liability companies or trusts to which all or any part of the
assets, liabilities, profits or losses of the Company or any Series or class
thereof may be transferred and may provide for the conversion of Interests in
the Company or any Series or class thereof into shares or beneficial interests
in any such newly created limited liability company or limited liability
companies or trust or trusts or any series or classes thereof.
(d) Notwithstanding anything else herein, the Directors may, without
Holder approval, invest all or a portion of the Company Property of any Series,
or dispose of all or a portion of the Company Property of any Series, and invest
the proceeds of such disposition in interests issued by one or more other
investment companies registered under the 1940 Act. Any such other investment
company may (but need not) be a limited liability company (formed under the laws
of the State of Delaware or any other state or jurisdiction) which is classified
as a partnership for federal income tax purposes. Notwithstanding anything else
herein, the Directors may, without Holder approval unless such approval is
required by the 1940 Act, cause a Series that is organized in the master/feeder
fund structure to withdraw or redeem its Company Property
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from the master fund and cause such series to invest its Company Property
directly in securities and other financial instruments or in another master
fund.
ARTICLE XI
MISCELLANEOUS
Certificate of Formation. The Directors may amend the Certificate of
Formation from time to time as they deem necessary or desirable.
Governing Law. The rights of all parties and the validity and construction
of every provision hereof shall be subject to and construed according to the Act
and the laws of the State of Delaware (unless and to the extent otherwise
provided for and/or preempted by the 1940 Act or other applicable federal
securities laws).
Reliance by Third Parties. Any certificate executed by an individual who,
according to the records of the Company, appears to be a Director hereunder, or
Secretary, Assistant Secretary, Treasurer or Assistant Treasurer of the Company,
certifying to: (a) the number or identity of Directors or Holders, (b) the due
authorization of the execution of any instrument or writing, (c) the form of any
vote passed at a meeting of Directors or Holders, (d) the fact that the number
of Directors or Holders present at any meeting or executing any written
instrument satisfies the requirements of this Agreement, (e) the form of any
By-Laws adopted by or the identity of any officers elected by the Directors, or
(f) the existence of any fact or facts which in any manner relate to the affairs
of the Company, shall be conclusive evidence as to the matters so certified in
favor of any Person dealing with the Directors and their successors.
Section 11.1 Provisions in Conflict with Law or Regulations.
(a) The provisions of this Agreement are severable, and if the Directors
shall determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Code, the Act or with other applicable laws and regulations, the conflicting
provisions shall be deemed superseded by such law or regulation to the extent
necessary to eliminate such conflict; provided, however, that such determination
shall not affect any of the remaining provisions of this Agreement or render
invalid or improper any action taken or omitted prior to such determination.
(b) If any provision of this Agreement shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
pertain only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Agreement in any jurisdiction.
Limited Liability Company Only. It is the intention of the Directors to
create only a limited liability company under the Act with the relationship of
manager and member between the Directors and each Holder from time to time. It
is not the intention of the Directors to create a general partnership, limited
partnership, joint stock association, corporation, bailment, or any form of
legal relationship other than a Delaware limited liability company except to the
extent such limited liability company is deemed to constitute a partnership
under the Code and applicable state tax laws. Nothing in this Agreement shall be
construed to make the Holders, either by themselves or with the Directors,
partners or members of a joint stock association.
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