CITIGROUP ALTERNATIVE INVESTMENTS
MULTI-ADVISER HEDGE FUND PORTFOLIOS LLC
(A DELAWARE LIMITED LIABILITY COMPANY)
SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
THIS SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of
CITIGROUP ALTERNATIVE INVESTMENTS MULTI-ADVISER HEDGE FUND PORTFOLIOS LLC (the
"Company") is amended and restated as of _________ __, 2005, to become effective
with respect to each Series upon the effective date of such Series' Subchapter M
Transition (as defined herein).
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 a
Certificate of Formation dated and filed with the Secretary of State of the
State of Delaware on August 16, 2002 (as modified by a Certificate of Correction
dated and filed with the Secretary of State of the State of Delaware on October
9, 2003) (the "Certificate");
WHEREAS, the Company commenced operations as of November 19, 2002
pursuant to an initial Limited Liability Company Agreement of the Company (the
"Initial Agreement") dated as of such date by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ as the Directors, and
AMACAR Partners, Inc. as the Managing Member;
WHEREAS, the Directors of the Company amended the Initial Agreement
under the authority granted them pursuant to Article 8.1(a) thereof and since
November 7, 2003 the Company has operated pursuant to a First Amended and
Restated Limited Liability Company Agreement (the "First Amended and Restated
Agreement") dated as of such date by and among the above-mentioned Directors;
WHEREAS, in connection with the Subchapter M Transition contemplated by
Article VI hereof, the Directors of the Company have amended the First Amended
and Restated Agreement under the authority granted them pursuant to Section
8.1(a) thereof, with the notice contemplated by Section 8.1(e) thereof having
been or to be given on or about _________ __, 2005; and
WHEREAS, that First Amended and Restated Agreement accordingly is being
amended and restated by this Agreement to supersede and replace all provisions
relating, directly or indirectly, to the Company's prior operation as a
partnership for Federal tax purposes and to effect certain other amendments as
hereinafter set forth.
NOW, THEREFORE, for and in consideration of the foregoing and the
mutual covenants hereinafter set forth, it is hereby agreed as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
"Administrator" means the person who provides administrative services
to the Company pursuant to an administrative services agreement.
"Adviser" means a person who at any particular time serves as an
investment adviser to the Company or any Series thereof pursuant to an
Investment Advisory Agreement. The sole initial Adviser to the Company and each
Series is Citigroup Alternative Investments LLC.
"Affiliate" means an affiliated person of a person as such term is
defined in the 1940 Act.
"Agreement" means this Second Amended and Restated Limited Liability
Company Agreement, as amended from time to time.
"Board of Directors" means the Board of Directors established pursuant
to Section 2.6 of this Agreement.
"Certificate" means the Certificate of Formation of the Company and any
amendments thereto as filed with the office of the Secretary of State of the
State of Delaware.
"Closing Date" means the first date on or as of which a Member other
than the Managing Member was admitted to the Company, which date was January 2,
2003.
"Code" means the U.S. Internal Revenue Code of 1986, as amended from
time to time, or any successor law.
"Company" means Citigroup Alternative Investments Multi-Adviser Hedge
Fund Portfolios LLC.
"Delaware Act" means the Delaware Limited Liability Company Act, as in
effect on the date hereof and as amended from time to time, or any successor
law.
"Direct Allocation Subadvisers" means (i) those Investment Managers for
which a separate investment vehicle has been created as to which the Investment
Manager (or an Affiliate) serves as general partner or managing member and/or
the Company is the sole limited partner/member and (ii) those Investment
Managers who manage Company assets directly through a separate managed account.
"Director" means an individual designated as a Director of the Company
pursuant to the provisions of Section 2.6 of this Agreement and who serves on
the Board of Directors of the Company.
"First Amended and Restated Agreement" means the predecessor to this
Second Amended and Restated Limited Liability Company Agreement, as executed on
November 7, 2003.
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"Fiscal Year" means the period originally commencing on the Closing
Date and ending on March 31, 2003, and thereafter each 12-month period ending on
March 31 of the next succeeding year (or on the date of a final distribution
pursuant to Section 7.2 hereof), unless the Board of Directors shall elect
another fiscal year for the Company.
"Form N-2" means the Company's registration statement on Form N-2 filed
with the Securities and Exchange Commission, as amended from time to time.
"Independent Directors" means those Directors who are not "interested
persons" of the Company, as such term is defined in the 1940 Act.
"Initial Agreement" means the predecessor to the First Amended and
Restated Agreement, as initially executed on November 19, 2002.
"Insurance" means one or more "key man" insurance policies on the life
of any principal of a member of the Adviser, the benefits of which are payable
to the Company.
"Investment Advisory Agreement" means a separate written agreement
entered into by the Company pursuant to which the Adviser provides Management
Services to the Company or any Series.
"Investment Fund" means unregistered investment funds and registered
investment companies.
"Investment Managers" means investment advisers (which may include the
Adviser) who enter into advisory agreements to manage a designated portfolio of
investments for the Company or who manage Investment Funds in which one or more
Series have invested.
"Management Services" means such investment advisory and other services
as the Adviser is required to provide to the Company or any Series pursuant to
an Investment Advisory Agreement.
"Managing Member" means AMACAR Partners, Inc. in its capacity as
managing member of the Company.
"Member" means any person who shall have been admitted to the Company
as a member (including any Director in such person's capacity as a member of the
Company) until the Company has repurchased all Shares held by such person
pursuant to Section 4.5 hereof or a substituted Member or Members has been
admitted with respect to all of such person's Shares pursuant to Section 4.4
hereof; such term includes the Adviser, in its capacity as a member of the
Company, to the extent the Adviser holds Shares and shall have been admitted to
the Company as a member. Persons seeking to be admitted to the Company as
Members, or seeking to purchase additional Shares of the Company pursuant to
Section 5.1 hereof, shall be required to submit such subscription materials as
the Company shall require from time to time and to make the representations set
forth in Appendix A attached hereto relating to satisfaction of the Company's
"accreditation" and other eligibility standards.
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"Net Assets" means the total value of all assets of a Series, less an
amount equal to all accrued debts, liabilities, obligations and reserves of (or
allocable to) the Series, calculated before giving effect to any repurchases of
Shares of the Series as of the date of calculation.
"1940 Act" means the Investment Company Act of 1940 and the rules,
regulations and orders thereunder, as amended from time to time, or any
successor law.
"Securities" means 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 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.
"Series" means a separate series of Shares designated by the Company as
such in accordance with Section 18-215 of the Delaware Act and issued by the
Company in accordance with Section 2.11 hereof.
"Shares" means the transferable units of interest into which the
limited liability company interests attributable to each Series shall be divided
from time to time and include fractions of Shares as well as whole Shares.
Shares include those Shares issued as a result of the redenomination of the
"Units" previously issued by the Company under the Initial Agreement and the
First Amended and Restated Agreement, such redenomination to have been effected
in connection with the Subchapter M Transition.
"Subchapter M Transition" means, as to a Series, that close of the
Series' books as a partnership for Federal tax purposes to occur on (or on the
day before) the effective date of the Series' election to be treated as a
corporation for Federal tax purposes.
"Transfer" means the assignment, transfer, sale, encumbrance, pledge or
other disposition of one or more Shares.
"Valuation Date" means the date as of which each Series is directed by
the Board of Directors to determine the value of its Net Assets, which shall
include, but not be limited to, any date as of which the Series values Shares
for purposes of determining the price at which the Shares are to be purchased by
the Series in an offer made pursuant to Section 4.5 hereof.
ARTICLE II
ORGANIZATION; ADMISSION OF MEMBERS
SECTION 2.1. FORMATION OF LIMITED LIABILITY COMPANY
Each member of the Board of Directors shall be designated an
"authorized person" within the meaning of the Delaware Act, and any Director may
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
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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 which such legal counsel may deem necessary or appropriate
to effectuate, implement and continue the valid existence and business of the
Company. The parties hereto hereby ratify ▇▇▇▇▇▇ ▇▇▇▇▇▇ as an "authorized
person" within the meaning of the Delaware Act for the exclusive purpose of
executing, delivering and filing the Certificate with the Secretary of State of
the State of Delaware.
SECTION 2.2. NAME.
The name of the Company shall be "CITIGROUP ALTERNATIVE INVESTMENTS
MULTI-ADVISER HEDGE FUND PORTFOLIOS LLC" or such other name as the Board of
Directors may hereafter adopt upon (i) causing an appropriate amendment to the
Certificate to be filed in accordance with the Delaware Act and (ii) sending
notice thereof to each Member.
SECTION 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 Directors.
The Company shall have its registered office in Delaware at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and shall have The Corporation Trust Company
as its registered agent for service of process in Delaware, unless a different
registered office or agent is designated from time to time by the Board of
Directors.
SECTION 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 7.1 hereof. The existence of the Company as a
separate legal entity shall continue until cancellation of the Certificate as
provided in the Delaware Act. A Director or any designated officer of the
Company shall execute, deliver and file any other certificates (and any
amendments and/or restatements thereof) necessary for the Company to qualify to
do business in New York and in any other jurisdiction in which the Company may
wish to conduct business.
SECTION 2.5. OBJECTIVE AND BUSINESS OF THE COMPANY.
(a) The objective and business of the Company is to purchase, sell
(including short sales), invest and trade in Securities, on margin or otherwise,
and to engage in any financial or derivative transactions relating thereto or
otherwise. The Company may carry out its activities directly or indirectly
through the purchase of interests in Investment Funds. Notwithstanding any
provision of this Agreement to the contrary, the Company, and each Director on
behalf of the Company, may execute, deliver and perform all contracts,
agreements, subscription documents and other undertakings and engage in all
activities and transactions that may in the opinion of the Board of Directors be
necessary or advisable to carry out its objective or business.
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(b) The Company and each Series, as applicable, shall operate as a
closed-end, nondiversified, management investment company in accordance with the
1940 Act and subject to any fundamental policies and investment restrictions set
forth in the Form N-2.
SECTION 2.6. BOARD OF DIRECTORS.
(a) The Directors currently serving on the Board of Directors are
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇▇. By signing this Agreement or the
signature page of the Company's subscription agreement, each Member admitted on
the Closing Date was deemed to have voted for the election of each of the
initial Directors to the Board of Directors designated to serve as Directors on
the Board of Directors prior to the Closing Date. The Board of Directors 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 Director and the
provisions of Section 3.3 hereof with respect to the election of Directors to
the Board of Directors by Members, designate any person who shall agree to be
bound by all of the terms of this Agreement as a Director. The names and mailing
addresses of the Directors shall be set forth in the books and records of the
Company. The number of Directors shall be fixed from time to time by the Board
of Directors.
(b) Subject to any maximum term of service, required age of retirement
or similar limitation that the Board of Directors may establish from time to
time, each Director shall serve on the Board of Directors for the duration of
the term of the Company, unless his or her status as a Director shall be sooner
terminated pursuant to Section 4.2 hereof. In the event of any vacancy in the
position of Director, the remaining Directors may appoint an individual to serve
in such capacity, so long as immediately after such appointment at least
two-thirds (2/3) of the Directors then serving would have been elected by the
Members. The Board of Directors may call a meeting of Members to fill any
vacancy in the position of Director, and shall do so within 60 days after any
date on which Directors who were elected by the Members cease to constitute a
majority of the Directors then serving on the Board of Directors.
(c) Each director shall be a "Manager" of the Company for purposes the
Delaware Act.
(d) In the event that no Director 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 Director 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 the required
number of Directors to the Board of Directors. If the Members shall determine at
such meeting not to continue the business of the Company or if the required
number of Directors is not elected within 60 days after the date on which the
last Director ceased to act in that capacity, then the Company shall be
dissolved pursuant to Section 7.1 hereof and the assets of the Company shall be
liquidated and distributed pursuant to Section 7.2 hereof.
SECTION 2.7. MEMBERS.
The Company may offer Shares of any Series for purchase by investors in
such manner and at such times as may be determined by the Board of Directors.
All subscriptions for Shares are subject to the receipt of cleared funds on or
before the acceptance date in the full amount of the subscription, plus the
applicable sales charge, if any. Subject to the foregoing terms, Members may be
admitted to the Company subject to the condition that each such Member shall
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execute an appropriate signature page of this Agreement or of the Company's
subscription agreement pursuant to which such Member agrees to be bound by all
the terms and provisions hereof. The Board of Directors may, in its sole
discretion, reject any subscription for Shares. The Board of Directors may, in
its sole discretion, suspend subscriptions for Shares at any time. 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 purchase of Shares of the
Company of such additional Member. Members will be admitted separately to each
Series in accordance with the subscription agreement executed by the Member and
accepted by the Company. No act, vote or approval of any Member of the Company
is required to admit a new Member in accordance with this Section 2.7.
SECTION 2.8. MANAGING MEMBER.
The Managing Member that served in such capacity under the Initial
Agreement and the First Amended and Restated Agreement resigned from such
service on or about the effective date of this Agreement. All rights,
responsibilities and duties attaching to the office of the Managing Member
(except those under Sections 3.6 and 3.7 hereof) terminated upon such
resignation.
SECTION 2.9. [Removed and Reserved].
SECTION 2.10. BOTH DIRECTORS AND MEMBERS.
A Member may at the same time be a Director 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 hereof or as provided in
the Delaware Act.
SECTION 2.11. LIMITED LIABILITY.
(a) For any period after completion of the Subchapter M Transition,
liability for the Company's debts, obligations and liabilities on the part of a
Member shall be limited, to the extent permitted by applicable law, to those
amounts paid for the purchase of Shares held by the Member.
(b) Except as provided under applicable law, a Director shall not be
liable for the Company's debts, obligations and liabilities solely by reason of
being a Director of the Company.
SECTION 2.12. SERIES.
(a) Shares shall be issued in one or more Series having separate
rights, powers or duties with respect to specified property or obligations or
profits and losses associated with specified property or obligations and, to the
extent provided in this Agreement and a Separate Series Agreement (as
hereinafter defined), having a separate business purpose or investment
objective. A Member may be a member of one or more Series. Unless otherwise
required by the 1940 Act, the Board of Directors may, in its sole discretion,
establish a Series without consulting the Members or any other person.
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(b) Expenses specific to a Series shall be allocated entirely to such
Series. Expenses of the Company not attributable to any particular Series shall
be allocated among the Series on an equitable basis approved by the Board of
Directors (such as on the basis of relative net asset values of the Series).
(c) The debts, liabilities and obligations 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 the
Company generally or any other Series thereof, and none of the debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to the Company generally or any other Series shall be
enforceable against the assets of such Series. The Company shall identify on its
books and records the assets and liabilities attributable to each Series in
accordance with section 18-215 of the Delaware Act.
(d) The terms of each Series shall be as set forth in this Agreement
(as the same may be amended from time to time) and a separate agreement (a
"Separate Series Agreement"), substantially in the form of Appendix B attached
hereto, shall be executed by the Members participating in the related Series. To
the extent that a Separate Series Agreement conflicts with this Agreement, this
Agreement shall control.
(e) Notwithstanding any other provision contained in this Agreement, if
the Board of Directors causes the Company to issue additional Shares, or
establishes new Series of Shares, then the Board of Directors, without the act,
vote or consent of the Members or any other person, shall make such revisions to
this Agreement and to the Certificate of Formation of the Company, as it deems
necessary to reflect the issuance of such additional Shares or the establishment
of such Series.
ARTICLE III
MANAGEMENT
SECTION 3.1. MANAGEMENT AND CONTROL.
(a) Management and control of the business of the Company and each
Series shall be vested in the Board of Directors, which shall have the right,
power and authority, on behalf of the Company and in its name, and on behalf of
and in the name of each Series, to exercise all rights, powers and authority of
"Managers" of a limited liability company 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 Director shall have the authority
individually to act on behalf of or to bind the Company or any Series except
within the scope of such Director's authority as delegated by the Board of
Directors. The parties hereto intend that, except to the extent otherwise
expressly provided herein, (i) each Director 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 Director 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" of such company as such term is defined in the 1940 Act. Subject to
Section 2.6 hereof, during any period in
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which the Company shall have no Directors, the Adviser shall continue to serve
as the Adviser to the Company and to provide the Management Services to the
Company.
(b) The Board of Directors shall have the exclusive authority and
discretion to make any elections required or permitted to be made by the Company
or any Series under any provisions of the Code or any other revenue laws.
(c) 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 or any Series. 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. Voting shall be
conducted on a Series-by-Series basis with respect to matters as to which such
voting is permitted under the 1940 Act and the Delaware Act.
(d) The Board of Directors may delegate to any other person any right,
power and authority vested by this Agreement in the Board of Directors to the
extent permissible under applicable law.
SECTION 3.2. ACTIONS BY THE BOARD OF DIRECTORS.
(a) Unless provided otherwise in this Agreement, the Board of Directors
shall act only: (i) by the affirmative vote of a majority of the Directors
(including the vote of a majority of the Independent Directors if required by
the ▇▇▇▇ ▇▇▇) present at a meeting duly called at which a quorum of the
Directors 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 Directors without a meeting, if permissible under the ▇▇▇▇ ▇▇▇.
(b) The Board of Directors may designate from time to time a principal
Director who shall preside at all meetings (the "Chair"). Meetings of the Board
of Directors may be called by or at the direction of the Chair or by or at the
direction of any two Directors, and may be held on such date and at such time
and place as the Board of Directors shall determine. Each Director 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. Notice need not be given to
any Director who shall attend a meeting without objecting to the lack of notice
or who shall execute a written waiver of notice with respect to the meeting.
Directors 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
Directors shall constitute a quorum at any meeting.
SECTION 3.3. 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. A meeting may
be limited to Members holding Shares of one or more Series. Meetings of the
Members may be called by the Board of Directors or by Members holding at least a
majority of the total number of votes eligible to be cast by Members at such
meeting, and may be held at such time, date and place as the Board of Directors
shall determine. The Board of Directors 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
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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 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 for Director receiving a plurality of the votes cast at any
meeting of all Members shall be elected as Directors and (ii) all other actions
of Members taken at a meeting shall require the affirmative vote of Members
holding a majority of the total number of votes eligible to be cast by those
Members who are present in person or by proxy at such meeting.
(b) Each Member shall be entitled to cast at any meeting of Members
that number of votes attaching to the Member's Shares in accord with Section
6.2(b)(6) hereof as of the record date for such meeting. The Board of Directors
shall establish a record date not less than 10 nor more than 60 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
thereat, 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.
SECTION 3.4. CUSTODY OF ASSETS OF THE COMPANY.
The physical possession of all funds, Securities or 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 there under.
SECTION 3.5. OTHER ACTIVITIES OF MEMBERS AND DIRECTORS.
(a) The Directors shall not be required to devote full 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 Director, and any Affiliate of any Member or
Director, may engage in or possess an interest in other business ventures or
commercial dealings of every kind and description, independently or with others,
notwithstanding any provision to the contrary at law or
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in equity, including, but not limited to, acquisition and disposition of
Securities, provision of investment advisory or brokerage services, serving as
directors, officers, employees, advisors or agents of other companies, partners
of any partnership, members of any limited liability company, or trustees of any
trust, or entering into any other commercial arrangements. No Member or Director
shall have any rights in or to such activities of any other Member or Director,
or any profits derived therefrom.
SECTION 3.6. DUTY OF CARE.
(a) To the fullest extent permitted by law, no Director, officer of the
Company, nor the Managing Member shall 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, her or its services under this Agreement (or any predecessor
agreement hereto), 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
directly and solely due to an act or omission of such Director, officer or
Managing Member constituting bad faith or gross negligence involved in the
conduct of such Director's, officer's or Managing Member's office.
(b) Members not in breach of any obligation hereunder or under any
agreement pursuant to which the Member subscribed for Shares shall be liable to
the Company, any Member or third parties only as provided under the Delaware Act
and applicable law.
SECTION 3.7. INDEMNIFICATION.
(a) To the fullest extent permitted by law, the Company shall, subject
to Section 3.7(b) hereof, indemnify each Director, officer of the Company and
the Managing Member (including for this purpose his, her or its 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 fees and disbursements of counsel, accountants or
other professionals incurred in connection with the investigation, 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 Director,
officer of the Company or the Managing Member or the past or present performance
of services to the Company by such indemnitee under this Agreement (or any
predecessor agreement hereto), except to the extent such loss, claim, damage,
liability, cost or expense shall have been finally determined in a decision on
the merits from which there is no further right to appeal in any such action,
suit, investigation or other proceeding to have been incurred or suffered by
such indemnitee by reason of bad faith or gross negligence involved in the
conduct of such indemnitee's office. The rights of indemnification provided
under this Section 3.7 shall not be construed to provide for indemnification for
any liability (including liability under federal securities laws that, 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 to effectuate the applicable
provisions of this Section 3.7 to the fullest extent permitted by law.
11
(b) Expenses, including reasonable fees and disbursements of counsel,
accountants or other professionals, so incurred by any such indemnitee (but
excluding amounts paid in satisfaction of judgments, in compromise, or as fines
or penalties), shall 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 3.7(a) hereof;
provided, however, that (i) 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 (ii) a majority of the Directors (excluding any
Director 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 bad faith or
gross negligence involved in the conduct of such indemnitee's office,
indemnification shall be provided pursuant to Section 3.7(a) hereof if (i)
approved as in the best interests of the Company by a majority of the Directors
(excluding any Director 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 or not opposed to the best interests
of the Company and that such indemnitee is not liable to the Company or its
Members by reason of bad faith or gross negligence involved in the conduct of
such indemnitee's office, or (ii) the Board of Directors 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 bad faith or gross negligence involved in the conduct of such
indemnitee's office.
(d) Any indemnification or advancement of expenses made pursuant to
this Section 3.7 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 from which there is no further right to appeal in any action, suit,
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 bad faith or gross negligence involved in the conduct
of such indemnitee's office. In (i) any suit brought by a Director (or other
person entitled to indemnification hereunder) to enforce a right to
indemnification under this Section 3.7 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 3.7 the Company shall be
entitled to recover such expenses upon a final adjudication that, the Director
or other person claiming a
12
right to indemnification under this Section 3.7 has not met the applicable
standard of conduct set forth in this Section 3.7. 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 3.7, the burden of proving
that the Director 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 3.7 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 3.7 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 3.7 shall
affect the power of the Company to purchase and maintain liability insurance on
behalf of any Director or other person.
SECTION 3.8. FEES, EXPENSES AND REIMBURSEMENT.
(a) So long as the Administrator provides administrative services to
the Company, it shall be entitled to receive fees for such services as may be
agreed to by the Administrator and the Company pursuant to an administrative
services agreement.
(b) The Board of Directors may cause the Company to compensate each
Director for his or her services as such. In addition, the Directors shall be
reimbursed by the Company for reasonable out-of-pocket expenses incurred by them
in performing their duties under this Agreement.
(c) The Company shall bear all expenses incurred in its business and
operations, other than those specifically required to be borne by the Adviser
pursuant to the Investment Advisory Agreement or by the Administrator pursuant
to the agreement referred to in Section 3.8(a) hereof. Expenses to be borne by
the Company include, but are not limited to, organizational (including costs and
expenses related to registration of the Company), offering and
investment-related expenses (such as fees and expenses charged by the Investment
Managers and Investment Funds, placement fees, interest on indebtedness,
administrative fees and expenses, custodial fees and expenses, bank service
fees, other expenses related to the purchase, sale or transmittal of Company
investments), fees for data and software providers, research expenses,
professional fees (including, without limitation, expenses of consultants and
experts relating to investments), legal expenses, internal and external
accounting, audit and tax preparation expenses, corporate licensing, Board of
Directors' fees and expenses, including travel, insurance and other expenses
associated with the operation of the Company, and fees and disbursements of any
third party vendor performing tax compliance services. The Company also shall
bear all taxes to which the Company may be subject, directly or indirectly and
whether in the United States, any State thereof or any other U.S. or non-U.S.
jurisdiction. In addition, the Company will bear any fees payable to the Adviser
pursuant to the Investment Advisory Agreement. The Adviser shall be entitled to
reimbursement from the Company for any of the above expenses that it pays on
behalf of the Company.
13
(d) Subject to procuring any required regulatory approvals, from time
to time the Company may, alone or in conjunction with 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 Directors shall determine.
ARTICLE IV
TERMINATION OF STATUS OR REMOVAL OF ADVISER AND DIRECTORS; TRANSFERS AND
REPURCHASES
SECTION 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.
SECTION 4.2. TERMINATION OF STATUS OF A DIRECTOR.
The status of a Director shall terminate if the Director (i) shall die;
(ii) shall be adjudicated incompetent; (iii) shall voluntarily withdraw as a
Director (upon not less than 90 days' prior written notice to the other
Directors, or such lesser notice period agreeable to the other Directors); (iv)
shall be removed pursuant to Section 4.3; (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 Director; or (viii) shall otherwise cease to be
a Director of the Company under the Delaware Act.
SECTION 4.3. REMOVAL OF A DIRECTOR.
Any Director may be removed either by (a) the vote or written consent
of at least two-thirds (2/3) of the Directors not subject to the removal vote or
(b)(i) the vote, if at a meeting, of Members holding a majority of the
outstanding voting securities or (ii) 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 for the election of Directors. For this purpose, the vote of a
majority of the outstanding voting securities means, unless otherwise defined by
the 1940 Act, the vote, at an annual or a special meeting of Members, of 67% or
more of the total number of votes eligible to be cast by all Members present at
the meeting, if the holders of more than 50% of the total number of votes
eligible to be cast by all Members are present or represented by proxy, or of
more than 50% of the total number of votes eligible to be cast by all Members,
whichever is less.
SECTION 4.4. TRANSFER OF SHARES.
(a) To the fullest extent permitted by law, Shares of a Member may be
Transferred only (i) by operation of law pursuant to the death, divorce,
bankruptcy, insolvency or dissolution of such Member or (ii) with the written
consent of the Administrator, as authorized by the Board of Directors (which
consent may be withheld in the Administrator's sole discretion). In no event,
14
however, will any transferee or assignee be admitted as a Member without the
consent of the Board of Directors (or its delegate), which may be withheld in
the sole discretion of the Board of Directors (or such delegate). To the fullest
extent permitted by law, any pledge, transfer, or assignment not made in
accordance with this Section 4.4 will be void.
(b) The Administrator may not consent to a Transfer of all or any
Shares held by a Member unless: (i) the transferee benefiting from such Transfer
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 Shares held by a Member are to be Transferred to a single
transferee or, after the Transfer of less than all Shares, the value of the
Shares held by each of the transferee and the transferor would not be less than
$25,000 (or such lower amount equal to the transferor's initial Share balance in
the particular Series). Any transferee that acquires Shares by operation of law
as the result of the death, divorce, bankruptcy, insolvency or dissolution of a
Member or otherwise shall be entitled to the rights of redemption or repurchase
and of dividends or other distributions attaching to such Shares and to Transfer
such Shares 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 Shares with the approval of
the Board of Directors (or its delegate), the Board of Directors shall promptly
take all necessary actions so that such transferee is admitted to the Company as
a Member. Each Member effecting a Transfer and its 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 or the
particular Series, each member of the Board of Directors, 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 (or such Member's
transferee) in connection with any such Transfer.
SECTION 4.5. REPURCHASE OF SHARES.
(a) Except as otherwise provided in this Agreement, no Member or other
person holding Shares shall have the right to require the Company to redeem its
Shares. The Board of Directors from time to time, in its complete and exclusive
discretion and on such terms and conditions as it may determine (subject to the
1940 Act and other applicable law), may cause the Company to offer to repurchase
Shares pursuant to written tenders. Each such tender offer may be limited to
Shares of one or more Series and may be limited in amount (for example, to not
more than 10% of the outstanding Shares of a particular Series). In determining
whether to cause the Company to offer to make such repurchases, the Board of
Directors shall consider the recommendation of the Adviser, and shall also
consider the following factors, among others:
(1) whether any Members have requested to tender Shares of a
Series to the Company;
15
(2) the liquidity of the Series' assets (including fees and costs
associated with withdrawing from Investment Funds and/or disposing of
assets managed by Investment Managers);
(3) the investment plans and working capital requirements of the
Series;
(4) the relative economies of scale of the tender offer with
respect to the size of the Series;
(5) the history of the Company in making such repurchases;
(6) the availability of information as to the value of a Series'
interests in underlying Investment Funds;
(7) the existing conditions of the securities markets and the
economy generally, as well as political, national or international
developments or current affairs; and
(8) the anticipated tax consequences to the Series of any such
proposed repurchases.
The Board of Directors shall cause the Company to repurchase Shares only
pursuant to written tender offers and only on terms it determines to be fair to
the Company and to all Members (including persons holding Shares as may be
acquired from Members), as applicable.
(b) A Member who tenders for repurchase only a portion of such Member's
Shares shall be required to maintain a Share balance as to the relevant Series
with a net asset value equal to at least $25,000 (or such lower amount equal to
the Member's initial Share balance as to the relevant Series) after giving
effect to the repurchase. If a Member tenders an amount that would cause the
Member's Share balance as to a Series to fall below the required minimum
following completion of the repurchase, the Administrator (as authorized by the
Board of Directors) reserves the right to reduce the amount to be purchased from
the Member pursuant to the tender so that the required minimum balance is
maintained or to cause the Company to repurchase all the Member's Shares in the
particular Series.
(c) The Adviser may tender its Shares as a Member under Section 4.5(a)
hereof.
(d) The Board of Directors may cause the Company to repurchase Shares
of a Member or any person acquiring Shares from or through a Member in the event
that the Administrator in its sole discretion (as authorized by the Board of
Directors) determines that:
(1) such Shares have been transferred in violation of this Section
4.5, or such Shares have vested in any person other than by operation
of law as the result of the death, divorce, dissolution, bankruptcy or
incompetence of a Member;
(2) ownership of such Shares by a Member or other person is likely
to cause the Company or a Series to be in violation of, or require
registration of any Shares under, or subject the Company or a Series to
additional registration or regulation under, the
16
securities, commodities or other laws of the United States or any other
relevant jurisdiction;
(3) continued ownership of such Shares by a Member may be harmful
or injurious to the business or reputation of the Company, a Series,
the Board of Directors, the Adviser or any of their affiliates, or may
subject the Company, or a Series or any Member to an undue risk of
adverse tax or other fiscal or regulatory consequences;
(4) any of the representations and warranties made by a Member in
connection with the acquisition of Shares was not true when made or has
ceased to be true;
(5) with respect to a Member subject to special regulatory or
compliance requirements, such as those imposed by the Bank Holding
Company Act, certain Federal Communications Commission regulations or
ERISA (collectively, "Special Laws or Regulations"), such Member is
likely to be subject to additional regulatory or compliance
requirements under these Special Laws or Regulations by virtue of
continuing to hold Shares; or
(6) it would be in the best interests of the Company or the
particular Series for the Company to repurchase such Shares.
(e) Repurchases shall be effective after receipt and acceptance by the
Company of all eligible written tenders of Shares from Members and, unless
otherwise determined by the Board of Directors from time to time, shall be
subject to the following repurchase procedures:
(1) Members choosing to tender Shares for repurchase must do so by
the 25th day of the second month prior to that containing the date as
of which Shares are to be repurchased (the "Notice Date"). (For
example, the Notice Date for a repurchase offer having a December 31
repurchase date would be October 25.) Shares (or portions thereof) will
be valued as of the Valuation Date (which date, unless otherwise
determined by the Board of Directors, shall be the last business day of
March, June, September or December, as applicable). Tenders generally
are not revocable following the Notice Date;
(2) promptly after accepting any tender, the Company will give to
each Member a promissory note (the "Promissory Note") entitling the
Member to be paid an amount equal to the value, determined as of the
Valuation Date, of the Member's Shares accepted for repurchase; and
(3) the Promissory Note will be non-interest bearing and
nontransferable. Payment in respect of the Promissory Note will be made
as of the later of (i) a period of within 30 days after the Valuation
Date, and (ii) if a Series has requested withdrawal of its capital from
one or more Investment Funds in order to fund the repurchase of Shares
of such Series, within ten business days after the Series has received
at least 90% of the aggregate amount withdrawn from such Investment
Funds.
17
Notwithstanding anything in the foregoing to the contrary, the Board of
Directors, in its discretion, may pay all or any portion of the repurchase price
in marketable Securities (or any combination of marketable Securities and cash)
having a value, determined as of the date of repurchase, equal to the amount to
be repurchased.
ARTICLE V
CAPITAL
SECTION 5.1. [Removed and Reserved].
SECTION 5.2. RIGHTS OF MEMBERS TO CAPITAL.
No Member shall be entitled to interest on any Share purchase, nor
shall any Member be entitled to the return of any capital of the Company except
(i) upon the repurchase by the Company of such Member's Shares pursuant to
Section 4.5 hereof or (ii) upon the liquidation of the Company's assets pursuant
to Section 7.2 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.
SECTION 5.3. [Removed and Reserved].
SECTION 5.4. [Removed and Reserved].
SECTION 5.5. [Removed and Reserved].
SECTION 5.6. RESERVES.
(a) All provisions under Section 5.6 of the First Amended and Restated
Agreement (also under the heading "Reserves") shall be understood as terminated
as of the date of the Subchapter M Transition, with no further rights on the
part of any Member to specific credits with respect to reductions in previously
established reserves for the liabilities of the Company or of one or more Series
and no further rights on the part of the Company or a Series to collections from
Members with respect to increases in previously established reserves for Company
or Series liabilities.
(b) Also as of the date of the Subchapter M Transition all matters
relating to Company or Series reserves of the nature contemplated by the
preceding clause (a) shall be governed solely by Section 6.2(b)(2) hereof.
SECTION 5.7. [Removed and Reserved].
SECTION 5.8. [Removed and Reserved].
SECTION 5.9. WITHHOLDING.
(a) The Board of Directors may withhold and pay over to the Internal
Revenue Service (or any other relevant taxing authority) taxes with respect to
any Member to the extent required by the Code or any other applicable law.
18
(b) For purposes of this Agreement, any taxes so withheld by the
Company with respect to any Member shall be deemed to be a distribution to such
Member, reducing the amount otherwise distributable to such Member pursuant to
this Agreement.
(c) The Board of Directors 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 Directors with such information and forms as
such Member may be required to complete when 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.
SECTION 5.10. [Removed and Reserved].
ARTICLE VI
SUBCHAPTER M TRANSITION; SHARES
SECTION 6.1. SUBCHAPTER M TRANSITION.
As of the effective date of this Agreement, all "Units" issued by the
Company under the Initial Agreement or the First Amended and Restated Agreement
shall be redenominated as Shares of the relevant Series and, in connection
therewith and in consideration for the cancellation of such Units, each holder
of Units of a Series shall be recorded in the books of the Company as the holder
of Shares of the relevant Series (which may include fractional Shares) equal in
number to the Units of the Series held by such person before such date. For the
avoidance of doubt, following the effective date of this Agreement, all such
prior Units shall be considered as cancelled.
SECTION 6.2. SHARES.
(a) (1) The number of the Company's authorized Shares and the
number of Shares that may be issued is unlimited, and, subject to
Section 2.7 hereof and Section 6.2(b)(7) hereof, the Directors may
issue Shares for such consideration and on such terms as they may
determine (or for no consideration if pursuant to a Share dividend or
split-up), or may reduce the number of issued Shares in proportion to
the relative net asset value of the Shares then outstanding, all
without action or approval of the Members. All such Shares shall have
$0.00001 par value per Share. All Shares when so issued on the terms
determined by the Directors shall be fully paid and non-assessable. The
Directors may hold any Shares reacquired by the Company as treasury
Shares, reissue such Shares for such consideration and on such terms as
they may determine, or cancel such Shares, at their discretion from
time to time. Shares may be issued in one or more Series pursuant to
Section 2.11 hereof.
19
(2) In accordance with Section 2.10 hereof, any Adviser or
Director, officer or other agent of the Company (including, without
limitation, the Administrator), and any organization in which any such
person is interested may acquire, own, hold and dispose of Shares of
any Series of the Company to the same extent as if such person were not
a Director, officer or other agent of the Company; and the Company may
issue and sell or cause to be issued and sold and may purchase Shares
from any such person or any such organization subject only to the
limitations, restrictions or other provisions applicable to the sale or
purchase of Shares generally.
(3) Shares shall not be represented by certificates, but only by
notation on the Share records of each Series of the Company, as kept by
the Company or by any transfer or similar agent, as the case may be.
The Share records of such Series, whether maintained by the Company or
any transfer or similar agent, as the case may be, shall be conclusive
as to who are the holders of Shares and as to the number of Shares held
from time to time by each such person.
(b) (1) All consideration received by the Company for the issue or
sale of Shares 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 irrevocably belong to such Series generally
and not to the account of any particular Member or holder of Shares,
subject only to the rights of creditors, and shall be so recorded upon
the books of account of such Series. The treatment of these items under
this Section 6.2(b)(1) shall replace and be in lieu of the treatment of
the same under the relevant provisions of Article V of the First
Amended and Restated Agreement, such replacement treatment to be
effective as of the effective date of this Agreement and at all times
thereafter.
(2) The liabilities, expenses, costs and charges (including any
reserves as may be established from time to time) attributable to each
Series shall be charged and allocated to the assets belonging to such
Series generally and not to the account of any particular Member or
holder of Shares and shall be so recorded upon the books of account of
such Series. The treatment of these items under this Section 6.2(b)(2)
shall replace and be in lieu of the treatment of the same under the
relevant provisions of Article V of the First Amended and Restated
Agreement, such replacement treatment to be effective as of the
effective date of this Agreement and at all times thereafter.
(3) Dividends and distributions on Shares may be paid to the
Members or holders of Shares of a Series, with such frequency as the
Directors may determine, which may be daily or otherwise pursuant to a
standing resolution or resolutions adopted only once or with such
frequency as the Directors may determine, from such of the income,
capital gains accrued or realized, and capital and surplus, after
providing for actual and accrued liabilities of such Series. All
dividends and distributions on Shares of a Series shall be distributed
pro rata to the Members or other holders of Shares in such Series in
proportion to the number of Shares held by such persons at the date and
time of record established for the payment of such dividends or
distributions, except that in connection with any dividend or
distribution program or procedure the Directors may determine that
20
no dividend or distribution shall be payable on Shares as to which the
Member's purchase order and/or payment have not been received by the
time or times established by the Directors under such program or
procedure. Dividends and distributions on Shares may be made in cash or
Shares or a combination thereof as determined by the Directors or
pursuant to any program that the Directors may have in effect at the
time for the election by each Member or other holder of Shares of the
mode of the making of such dividend or distribution to that person. Any
dividend or distribution paid in Shares will be paid at the net asset
value thereof as determined in accordance with Section 8.3 hereof.
Notwithstanding anything in this Agreement to the contrary, the
Directors may at any time declare and distribute a dividend of stock or
other property pro rata among the Members or other holders of Shares at
the date and time of record established for the payment of such
dividends or distributions.
(4) Notwithstanding any provision to the contrary contained in
this Agreement, the Directors shall not be permitted to make a
distribution to the Members on account of their interest in the Company
if such distribution would violate Section 18-607 of the Delaware Act
or any other applicable law.
(5) In the event of the liquidation or dissolution of the Company
or a Series, the Members or other holders of Shares shall be entitled
to receive, when and as declared by the Directors, the excess of the
assets of the Company or such Series over its liabilities. Upon the
liquidation or dissolution of the Company or such Series, the Directors
shall make provisions for the satisfaction (whether by payment or the
making of reasonable provision for payment thereof) of all of the
Company's or such Series' outstanding obligations, taxes and other
liabilities, accrued or contingent. The assets so distributable (which
may, in the discretion of the Directors, include assets distributed
in-kind valued at their date of distribution in accordance with Section
8.3 hereof) shall be distributed among the Members or other holders of
Shares of such Series in proportion to the relative number of Shares
held by such persons in such Series.
(6) Shares shall be transferable only in accordance with Section
4.4 hereof.
(7) Except as provided herein, each Share shall represent an equal
proportionate interest in the Net Assets of the relevant Series, and
each Share shall be equal with respect to net asset value per Share as
against each other Share within the same Series. The rights attaching
to all Shares of a Series shall be identical as to right of redemption
or repurchase by the Series, dividends and other distributions (whether
or not on liquidation), and voting rights (the vote attaching to each
Share or fraction thereof being equal to the dollar value of the same
as of the record date for any such vote, if such record date is a
Valuation Date, or if such record date is not a Valuation Date, the
Valuation Date most recently preceding such record date). The Directors
may from time to time divide or combine the Shares of a Series into a
greater or lesser number of Shares provided that such division or
combination does not change the proportionate beneficial interest in
the assets of the Series of any Member or other holder of Shares or in
any way affect the rights of Shares.
(8) The Directors, subject to Section 2.7 hereof, may accept
investments in a Series of the Company by way of Share purchase, from
such persons, on such terms
21
(including minimum purchase amounts) and for such consideration, not
inconsistent with the provisions of the 1940 Act, as they from time to
time authorize or determine. Such investments may be in the form of
cash, Securities or other property in which such Series is authorized
to invest, hold or own, valued as provided in Section 8.3 hereof. The
Directors may authorize any distributor, principal underwriter,
custodian, transfer agent or other person to accept orders for the
purchase or sale of Shares that conform to such authorized terms and to
reject any purchase or sale orders for Shares whether or not conforming
to such authorized terms.
(9) Shares may be issued as fractions thereof. Any fractional
Share, if outstanding, shall carry proportionately all the rights and
obligations of a whole Share, including those rights and obligations
with respect to voting, receipt of dividends and distributions,
redemption of Shares, and liquidation of a Series or of the Company.
Fractions of Shares shall be calculated to three decimal points.
ARTICLE VII
DISSOLUTION AND LIQUIDATION
SECTION 7.1. DISSOLUTION.
The Company or a Series shall be dissolved:
(1) upon the affirmative vote to dissolve the Company or such
Series by: (i) a majority of the Board of Directors (including a
majority of the Independent Directors) or (ii) Members holding at least
two-thirds (2/3) of the total number of votes eligible to be cast with
respect to the Company or the particular Series, as applicable; or
(2) as required under the Delaware Act.
In addition, a Series will be dissolved if (i) any Member has submitted
a written request, in accordance with Section 4.5, to tender all of its Shares
for repurchase by the Company and has not been given the opportunity to tender
all such Shares within a period of two years after such request (whether in a
single repurchase offer or multiple offers within the two-year period); and (ii)
such Member delivers a written notice of intent to dissolve the Series to the
Board of Directors prior to the expiration of such two-year period.
Dissolution of the Company or a Series shall be effective on the day on
which the event giving rise to the dissolution shall occur, but the existence of
the Company or such Series as separate legal entity shall not terminate until
the assets of the Company or such Series have been liquidated in accordance with
Section 7.2 hereof and the Certificate has been canceled.
SECTION 7.2. WINDING UP.
(a) Upon the dissolution of the Company or a Series as provided in
Section 6.2(b)(5) hereof, the Board of Directors shall promptly appoint the
Administrator as the liquidating trustee and the Administrator shall wind up the
business and administrative affairs of the Company, except that if the Board of
Directors does not appoint the Administrator as the liquidating trustee
22
or the Administrator is unable to perform this function (or to designate an
appropriate delegate to do so), a liquidating trustee elected by Members holding
a majority of the total number of votes eligible to be cast shall promptly wind
up the business and administrative affairs of the Company.
(b) The proceeds from liquidation shall be distributed as contemplated
by Section 6.2(b)(5) hereof.
ARTICLE VIII
ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS
SECTION 8.1. ACCOUNTING AND REPORTS.
(a) Although the Company shall adopt for tax accounting purposes any
accounting method that the Board of Directors shall decide, in its sole
discretion, is in the best interests of the Company, it is anticipated that the
Company will maintain its books and records on the accrual method of accounting
based upon generally accepted accounting principles except as otherwise
described in this Agreement. The Company's accounts shall be maintained in U.S.
currency.
(b) After the end of each taxable year (and/or each calendar year), the
Company shall furnish to each Member such information regarding the operation of
the Company and such Member's Shares 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.
(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 8.1(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 in accordance with generally accepted accounting principles
contained in each annual report furnished hereunder to be accompanied by a
report 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.
SECTION 8.2. [Removed and Reserved].
SECTION 8.3. VALUATION OF NET ASSETS.
(a) Except as may be required by the 1940 Act, the Board of Directors
shall value or have valued any Securities or other assets and liabilities of
each Series as of the close of business on the last business day of each month
within 10 business days of the last day of the month (and on any such additional
day or days as the Directors in their discretion may determine) in accordance
with such valuation procedures as shall be established from time to time by the
Board of Directors and that 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
23
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.
(b) The Company will value interests in Investment Funds not managed by
the Direct Allocation Subadvisers at fair value, which ordinarily will be the
value determined by the respective Investment Managers in accordance with the
policies established by the relevant Investment Fund.
(c) 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 8.3 shall be
conclusive and binding on all of the Members and all parties claiming through or
under them.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. AMENDMENT OF LIMITED LIABILITY COMPANY AGREEMENT.
(a) Except as otherwise provided in this Section 9.1, this Agreement
may be amended, in whole or in part, with: (i) the approval of a majority of the
Board of Directors (including the approval of a majority of the Independent
Directors, 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 rights attaching to the Shares held by any person
as against the rights attaching to the Shares of the same Series held
by any other person; or
(3) modify the events causing the dissolution of the Company or
any Series;
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 Directors) to tender all of such person's Shares for repurchase by
the Company.
(c) The power of the Board of Directors to amend this Agreement at any
time without the consent of the Members in accordance with paragraph (a) of this
Section 9.1 shall specifically include the power to:
(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;
24
(2) amend this Agreement (other than with respect to the matters
set forth in Section 9.1(b) hereof) to effect compliance with any
applicable law or regulation, including, but not limited to, the
requirements, or to reflect any relaxation of such requirements in the
future, of the Bank Holding Company Act of 1956, as amended, or other
U.S. banking laws, or any regulations, guidelines or policies or
interpretations of the banking regulatory agencies or the staffs
thereof, 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, taking due consideration of the
interests of the Members of a whole, to make such changes as may be
necessary or advisable to ensure that the Company or any Series
maintains its then-current federal tax treatment.
(d) Any amendment that would modify the provisions of this Section 9.1
(if material) or the Company's indemnification obligations may be made only with
the unanimous consent of the Members (or the unanimous consent of the Members of
a Series if the amendment is limited to a Series) and, to the extent required by
the 1940 Act, approval of a majority of the Directors (and, if so required, a
majority of the Independent Directors).
(e) The Board of Directors 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 9.1(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.
SECTION 9.2. SPECIAL POWER OF ATTORNEY.
(a) Each Member hereby irrevocably makes, constitutes and appoints the
Administrator with full power of substitution, the true and lawful
representative and attorney-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 9.1
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 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
as a limited liability company under the Delaware Act.
25
(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 attorney-in-fact appointed
hereby is 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 Directors 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
Administrator shall have had notice thereof; and
(2) shall survive the delivery of a Transfer by a Member of all or
portion of such Member's Shares, except that when the transferee
thereof has been approved by the Board of Directors 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 Administrator to execute, acknowledge and
file any instrument necessary to effect such substitution.
SECTION 9.3. NOTICES.
Notices that may be or are required to be provided under this Agreement
shall be made, if to a Member, by regular mail, registered or certified mail
return receipt requested, commercial courier service, telecopier (receipt
confirmed) or hand delivery, or if to the Board of Directors or the Adviser, by
hand delivery, registered or certified mail return receipt requested, commercial
courier service, or telecopier (receipt confirmed), 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, 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.
SECTION 9.4. 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 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, to the fullest extent permitted
by law, be void.
SECTION 9.5. APPLICABILITY OF 1940 ACT AND FORM N-2.
26
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 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 and the Form N-2.
SECTION 9.6. 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) TO THE FULLEST EXTENT PERMITTED BY LAW, 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) THE PARTIES 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.
27
JUDGMENT ON ANY AWARD OF ANY SUCH ARBITRATION MAY BE ENTERED IN THE SUPREME
COURT OF THE STATE OF NEW YORK OR 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.
Notwithstanding any provision of the Agreement to the contrary, this
Section 9.6 of this Agreement shall be construed to the maximum extent possible
to comply with the laws of the State of Delaware, including the Uniform
Arbitration Act (10 Del. C. ss. 5701 et seq.) (the "Delaware Arbitration Act").
If, nevertheless, it shall be determined by a court of competent jurisdiction
that any provision or wording of this Section 9.6 of this Agreement, including
any Commercial Arbitration Rules or rules of the American Arbitration
Association shall be invalid or unenforceable under the Delaware Uniform
Arbitration Act, 10 Del. C. ss. 5701, et seq. (the "Delaware Arbitration Act"),
or other applicable law, such invalidity shall not invalidate all of this
Section 9.6 of this Agreement. In that case, this Section 9.6 of this Agreement
shall be construed so as to limit any term or provision so as to make it valid
or enforceable within the requirements of the Delaware Arbitration Act or other
applicable law, and, in the event such term or provision cannot be so limited,
this Section 9.6 of this Agreement shall be construed to omit such invalid or
unenforceable provision.
SECTION 9.7. NOT FOR BENEFIT OF CREDITORS.
The provisions of this Agreement are intended only for the regulation
of relations among past, present and future Members, Directors 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.
SECTION 9.8. 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.
SECTION 9.9. MERGER AND CONSOLIDATION.
28
(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.
SECTION 9.10. PRONOUNS.
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.
SECTION 9.11. 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 Directors.
(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 Directors, which consent may be withheld in its sole
discretion.
(c) Each Member recognizes that in the event that this Section 9.11 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, it is
the intent of the parties that such Members and the Company 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
29
disclosure of Confidential Information, each of the other non-breaching Members
agrees to pursue in a court of appropriate jurisdiction such injunctive relief.
SECTION 9.12. CERTIFICATION OF U.S. OR FOREIGN STATUS.
Upon admission to the Company and at such other times thereafter as the
Board of Directors may request, each Member or transferee of Shares from a
Member shall (i) provide an IRS Form W-8BEN, W-8IMY or W-8ECI certifying under
penalty perjury that the beneficial owner of the Shares is not a U.S. person or
(ii) provide an IRS Form W-9 certifying under penalty or perjury that the
beneficial owner of the Shares is a U.S. person, that the beneficial owner's
U.S. taxpayer identification number provided is correct and that such beneficial
owner is not subject to backup withholding because either (1) such beneficial
owner is exempt from backup withholding, (2) such beneficial owner has not been
notified by the Internal Revenue Service ("IRS") that it is subject to backup
withholding as a result of a failure to report all interest or dividends, or (3)
the IRS has notified such beneficial owner that it is no longer subject to
backup withholding.
SECTION 9.13. 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 invalidity or unenforceability shall not affect the validity
or enforceability of any other provision of this Agreement (or portion thereof).
SECTION 9.14. FILING OF RETURNS.
The Board of Directors or its designated agent shall prepare and file,
or cause the Administrator or accountants of the Company to prepare and file, a
federal income tax return in compliance with section 6012 of the Code, all
required federal information returns and any required state and local income tax
and information returns for each tax year of the Company.
SECTION 9.15. [Removed and Reserved].
SECTION 9.16. [Removed and Reserved].
SECTION 9.17. COUNTERPARTS.
This Agreement may be executed in any number of counterparts with the
same effect as if all parties had signed the same document. All counterparts
shall be construed together and shall constitute one instrument.
EACH OF THE UNDERSIGNED ACKNOWLEDGES HAVING READ THIS AGREEMENT IN ITS
ENTIRETY BEFORE SIGNING, INCLUDING THE PRE-DISPUTE ARBITRATION CLAUSE SET FORTH
IN SECTION 9.6 AND THE CONFIDENTIALITY CLAUSE SET FORTH IN SECTION 9.11.
30
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amended and Restated Limited Liability Company Agreement of the Company as of
the day and year identified in the preamble hereto.
DIRECTORS:
-------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
MEMBERS:
[TO BE EXECUTED BY THE ADMINISTRATOR PURSUANT TO
POWER OF ATTORNEY]
-------------------------------------------------
Each person who shall sign a Member Signature
Page and who shall be accepted by the Board of
Directors to the Company as a Member.
31
APPENDIX A
REPRESENTATIONS REQUIRED OF PERSONS
SEEKING TO BE ADMITTED TO THE COMPANY AS MEMBERS
(OR MAKING ADDITIONAL PURCHASES OF SHARES)
The following should be read in conjunction with the subscription
materials for the Company, which refer to each person seeking to be admitted to
the Company as a Member (or making an additional purchase of Shares in any
Series of the Company) as a "Subscriber":
The Subscriber hereby represents and warrants to, and covenants and
agrees with, the Company that Subscriber meets the accreditation standards and
eligibility policies as set forth herein.
"Accredited Investors"
1. Subscriber is acquiring Shares directly or indirectly for the
account of an "accredited investor" meeting one or more of the "asset tests" set
forth in Rule 501(a) of Regulation D under the Securities Act of 1933 (the "1933
Act"). (Alternative tests under Regulation D also may be relied upon with
respect to selected categories of investors, including employees, officers and
directors of affiliates of the Company.) Such accredited investors are referred
to in the Offering Memorandum as "Eligible Investors" and include the following:
o An individual who has an individual net worth or joint net worth
with his or her spouse, in excess of $1,000,000. "Net worth" for these
purposes means the value of total assets at fair market value,
including home, home furnishings and automobiles, less total
liabilities; or
o A corporation, partnership, limited liability company, or
similar business trust or tax-exempt organization as defined in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), that (i) has total assets in excess of $5,000,000, and (ii)
was neither formed nor is operated for the specific purpose of
investing in the Company; or
o An entity whose equity owners are each "accredited investors" as
defined in this section.
2. An Eligible Investor generally must have a brokerage account with
▇▇▇▇▇ ▇▇▇▇▇▇ (a division of Citigroup Global Investments Inc.) or another
authorized Placement Agent. Existing Members subscribing for additional Shares
must be Eligible Investors at the time of the additional subscription.
Anti-Money Laundering Procedures
3. In order to comply with applicable anti-money laundering
regulations, the Company, the Administrator or the Subscriber's Placement Agent
may require a detailed verification of the Subscriber's identity and the source
of its subscription proceeds. The Subscriber agrees to
promptly provide the Company, the Administrator or the Subscriber's Placement
Agent, as applicable, with any requested information and documentation.
4. If the Subscriber is not investing in the Company on behalf of or
for the benefit of, other investors, the Subscriber represent that it is
purchasing Shares in the Company for the Subscriber's own account, for
investment purposes, and not for subdivision or fractionalization, and is not
acting as agent, representative, intermediary or nominee or in any similar
capacity for any other person.*
5. The Subscriber represents that it is not involved in any money
laundering schemes, and the source of this investment is not derived from any
unlawful or criminal activities. It further represents that this investment is
not designed to avoid the reporting and record-keeping requirement of the Bank
Secrecy Act of 1970, as amended.
6. The Subscriber acknowledges that the Company generally prohibits any
investment in the Company by or on behalf of a "Prohibited Investor" unless
specifically permitted by the Company, in its sole discretion. A "Prohibited
Investor" means:
o any individual or entity whose name appears on the various lists
issued and/or maintained by the U.S. Treasury Department's Office of
Foreign Assets Control ("OFAC"), including, but not limited to, the
Specially Designated Nationals and Blocked Persons List (also known as
the "SDN List"); and
o any individual or entity who is a citizen or resident of, or located
in a country where OFAC sanctions against such country prohibit any
investment by such subscriber in the Company.*
The above lists are available at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇/. and
should be checked by the Subscriber before making the above representations.
7. If the Subscriber is an intermediary, a fund of funds, or otherwise
investing in the Company on behalf of "Underlying Investors", the Subscriber
represents and agrees that:
o the Subscriber properly discloses its relationship with its
Underlying Investors as follows: (please attach supplemental pages
headed "Underlying Investors" to completed subscription materials as
necessary;
o the representations, warranties and covenants made herein are
made by the Subscriber on behalf of itself and its Underlying
Investors;
o the Subscriber has all requisite power and authority from its
Underlying Investors to execute and perform the obligations under this
section;
---------------------------
* "Person" includes nominee account, beneficial owner, individual, bank,
corporation, partnership, limited liability company or any other legal
entity.
* The U.S. Federal and Executive Orders administered by OFAC prohibit,
among other things, the engagement in transactions with, and the
provision of services to, certain foreign countries, territories,
entities and individuals including specially designated nationals,
narcotics traffickers and other parties subject to OFAC sanctions and
embargo programs.
2
o accompanying this subscription is a certificate in a form
acceptable to the Company, the Administrator or the Subscriber's
Placement Agent in their sole discretion with respect to the due
diligence the Subscriber has carried out and will continue to carry out
with respect to the identity and background of each Underlying Investor
as well as the proceeds invested in the Company by the Underlying
Investors;
o its Underlying Investors are not Prohibited Investors, as
defined above;
o the Subscriber is not otherwise aware of any reasons which
should prevent the Company from accepting an investment directly by an
Underlying Investor; and
o the Subscriber agrees to provide such further assurance and
certifications regarding itself and/or its Underlying Investors as the
Company, the Administrator or the Subscriber's Placement Agent may
reasonably require.
8. To the best of the Subscriber's knowledge, neither it nor any
individual or entity controlling, controlled by, or under common control with
the Subscriber, or related to, or otherwise associated with, the Subscriber, is
a "Prohibited Investor" as defined above.
9. The Subscriber acknowledges that if, following its investment in the
Company, the Company, the Adviser, the Administrator or the Subscriber's
Placement Agent reasonably believe that the Subscriber is a Prohibited Investor
or has otherwise breached its representations and covenants hereunder as to its
identity and the source of its subscription proceeds, the Company may be
obligated to freeze the Subscriber's dealings with its Shares, including by
refusing additional subscriptions for Shares by the Subscriber or any repurchase
requests by the Subscriber and/or segregating the assets represented by the
Subscriber's Shares in accordance with applicable regulations, or mandatorily
repurchasing the Subscriber's Shares, and the Subscriber will have no claim
whatsoever against the Company, the Adviser, the Administrator or the
Subscriber's Placement Agent for any form of losses or other damages incurred by
it as a result of any of these actions. The Subscriber also acknowledges that
the Company, the Adviser, Administrator or the Subscriber's Placement Agent may
be required to report such actions and to disclose the Subscriber's identity to
OFAC or other regulatory bodies.
10. The Subscriber is not a "shell bank", and its subscription proceeds
do not originate from, and will not be routed through, an account maintained at
such a bank. A "shell bank" is a bank that does not have a physical presence in
any country and is not an affiliate of a depository institution, credit union or
bank that maintains a physical presence in any country and is supervised by a
banking authority.
11. The Subscriber is not a senior non-U.S. government or public
official, a member of such a person's immediate family, or any close associate
of such a person. If the Subscriber cannot make this representation, the
Subscriber must contact the Company, the Administrator or the Subscriber's
Placement Agent.
12. The Subscriber is not a citizen or resident of, or located in, a
jurisdiction identified on the Non-Cooperative Countries and Territories list of
OECD's Financial Action Task Force ("FATF Non-Cooperative Countries and
Territories"), and its subscription proceeds do not originate from, or are not
routed through a bank organized or charted under the laws of any
3
FATF Non-Cooperative Countries and Territories.* If the Subscriber cannot make
this representation, the Subscriber must contact the Company or the
Administrator.
13. All information that the Subscriber has provided to the Company,
the Administrator or the Subscriber's Placement Agent in relation to the
subscription of the Shares, is true and accurate.
14. The Subscriber represents that all evidence of identity provided to
the Company, the Administrator or the Subscriber's Placement Agent is genuine
and all related information furnished by it is accurate, and it agrees to
provide any further information or documents deemed necessary by the Company,
the Administrator or the Subscriber's Placement Agent in their sole discretion
to comply with the Company's anti-money laundering policies and related
responsibilities from time to time.
15. The representations, warranties, agreements, undertakings, and
acknowledgments made by the Subscriber above and documents submitted in relation
hereto are made and submitted with the intent that they will be relied upon by
the Company in determining the suitability of the Subscriber as an investor in
the Company, and will survive the investment in the Company by the Subscriber.
The Subscriber agrees that such representations, warranties, agreements,
undertakings and acknowledgments (including representation, warranties,
agreements, undertakings and acknowledgements contained in any documents
submitted in relation hereto) will be deemed reaffirmed by the Subscriber at any
time it makes an additional investment in the Company. In addition, the
Subscriber undertakes to notify the Company immediately of any change in any
representation, warranty or other information relating to the Subscriber set
forth herein.
-----------------------------
* As of the date hereof, the following countries and territories are on
FATF Non-Cooperative Countries and Territories list: ▇▇▇▇ Islands,
Egypt, Grenada, Guatemala, Indonesia, Myanmar, Nauru, Nigeria,
Philippines, St. ▇▇▇▇▇▇▇ and the Grenadines, and Ukraine. Updated
information is available at ▇▇▇▇://▇▇▇.▇▇▇▇.▇▇▇/▇▇▇▇/▇▇▇▇-▇▇.▇▇▇.
4
APPENDIX B
FORM OF SEPARATE SERIES AGREEMENT
THIS SEPARATE SERIES AGREEMENT, dated as of ___________ __, 200_
(this "Separate Series Agreement"), is entered into by and between
____________________, as a Member of Citigroup Alternative Investments
Multi-Adviser Hedge Fund Portfolios LLC (the "Company") and as a participant in
the newly created Series identified below (the "New Series"), and
____________________, as a Member of the Company and as a participant in the New
Series. Capitalized terms used herein and not otherwise defined are used as
defined in the Limited Liability Company Agreement of the Company, dated and
effective as of _________ __, 2002 (as amended from time to time, the "LLC
Agreement").
RECITALS
WHEREAS, the parties hereto have heretofore formed the Company
pursuant to the Delaware Limited Liability Company Act by causing the
Certificate to be filed with the office of the Secretary of State of the State
of Delaware and by entering into the LLC Agreement;
WHEREAS, the Board of Directors has established the New Series and
the parties hereto desire to participate in the New Series;
WHEREAS, it is intended by the parties hereto that the debts,
liabilities and obligations incurred, contracted for or otherwise existing with
respect to the New Series be enforceable against the assets of the New Series
only, and not against the assets of the Company generally; and
WHEREAS, it is intended by the parties hereto that the debts,
liabilities and obligations incurred, contracted for, or otherwise existing with
respect to the Company in general or with respect any other Series not be
enforceable against the assets of the New Series;
NOW, THEREFORE, in consideration of the mutual promises and
obligations contained herein, the parties, intending to be legally bound, hereby
agree as follows:
1. New Series. In accordance with Section 2.11 of the LLC
Agreement, _____ and ______ hereby agree to participate in the New Series, which
shall be a "Series" for purposes of the LLC Agreement.
2. Name of New Series. The name of the New Series created by this
Separate Series Agreement shall be ________________________.
3. Agreement to Be Bound. Each of _____ and ______, in their
capacities as members of the Company participating in the New Series, agree to
be bound by the terms and provisions of the LLC Agreement.
4. Investment Guidelines. The investment guidelines and other
terms applicable to the New Series are set forth on Schedule A hereto.
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5. Headings. The headings in this Separate Series Agreement are
included for convenience and identification only and are in no way intended to
describe, interpret, define or limit the scope, extent, or intent of this
Separate Series Agreement or any provision hereof.
6. Severability. The invalidity or unenforceability of any
particular provision of this Separate Series Agreement shall not affect the
other provisions hereof, and this Separate Series Agreement shall be construed
in all respects as if such invalid or unenforceable provision was omitted.
7. Merger. This Separate Series Agreement and the LLC Agreement
constitute the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersede all prior agreements and understandings
pertaining thereto.
8. Counterparts. This Separate Series Agreement may be executed in
any number of counterparts with the same effect as if all parties had signed the
same document. All counterparts shall be construed together and shall constitute
one instrument.
9. Governing Law. This Separate Series Agreement and the rights of
the parties hereunder shall be interpreted in accordance with the laws of the
State of Delaware, and all rights and remedies shall be governed by such laws
without regard to principles of conflict of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Separate
Series Agreement as of the date first-above stated.
MEMBERS PARTICIPATING IN
NEW SERIES:
[TO BE EXECUTED BY THE ADMINISTRATOR
PURSUANT TO POWER OF ATTORNEY]
_______________________, as Member
By:__________________________
Name:
Title:
______________________, as Member
By:__________________________
Name:
Title:
2
SCHEDULE A
(to form of Separate Series Agreement)
Investment Guidelines for
[Name of New Series]
Table of Contents
Page
ARTICLE I
DEFINITIONS
ARTICLE II
ORGANIZATION; ADMISSION OF MEMBERS
SECTION 2.1. FORMATION OF LIMITED LIABILITY COMPANY............................4
SECTION 2.2. NAME..............................................................5
SECTION 2.3. PRINCIPAL AND REGISTERED OFFICE...................................5
SECTION 2.4. DURATION..........................................................5
SECTION 2.5. OBJECTIVE AND BUSINESS OF THE COMPANY.............................5
SECTION 2.6. BOARD OF DIRECTORS................................................6
SECTION 2.7. MEMBERS...........................................................6
SECTION 2.8. MANAGING MEMBER...................................................7
SECTION 2.9. [Removed and Reserved]............................................7
SECTION 2.10. BOTH DIRECTORS AND MEMBERS.......................................7
SECTION 2.11. LIMITED LIABILITY................................................7
SECTION 2.12. SERIES...........................................................7
ARTICLE III
MANAGEMENT
SECTION 3.1. MANAGEMENT AND CONTROL............................................8
SECTION 3.2. ACTIONS BY THE BOARD OF DIRECTORS.................................9
SECTION 3.3. MEETINGS OF MEMBERS...............................................9
SECTION 3.4. CUSTODY OF ASSETS OF THE COMPANY.................................10
SECTION 3.5. OTHER ACTIVITIES OF MEMBERS AND DIRECTORS........................10
SECTION 3.6. DUTY OF CARE.....................................................11
SECTION 3.7. INDEMNIFICATION..................................................11
SECTION 3.8. FEES, EXPENSES AND REIMBURSEMENT.................................13
ARTICLE IV
TERMINATION OF STATUS OR REMOVAL OF ADVISER AND DIRECTORS; TRANSFERS AND
REPURCHASES
SECTION 4.1. TERMINATION OF STATUS OF THE ADVISER.............................14
SECTION 4.2. TERMINATION OF STATUS OF A DIRECTOR..............................14
SECTION 4.3. REMOVAL OF A DIRECTOR............................................14
SECTION 4.4. TRANSFER OF SHARES...............................................14
SECTION 4.5. REPURCHASE OF SHARES.............................................15
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ARTICLE V
CAPITAL
SECTION 5.1. [Removed and Reserved]...........................................18
SECTION 5.2. RIGHTS OF MEMBERS TO CAPITAL.....................................18
SECTION 5.3. [Removed and Reserved]...........................................18
SECTION 5.4. [Removed and Reserved]...........................................18
SECTION 5.5. [Removed and Reserved]...........................................18
SECTION 5.6. RESERVES.........................................................18
SECTION 5.7. [Removed and Reserved]...........................................18
SECTION 5.8. [Removed and Reserved]...........................................18
SECTION 5.9. WITHHOLDING......................................................18
SECTION 5.10. [Removed and Reserved]..........................................19
ARTICLE VI
SUBCHAPTER M TRANSITION; SHARES
SECTION 6.1. Subchapter M Transition..........................................19
SECTION 6.2. Shares...........................................................19
ARTICLE VII
DISSOLUTION AND LIQUIDATION
SECTION 7.1. DISSOLUTION......................................................22
SECTION 7.2. WINDING UP.......................................................22
ARTICLE VIII
ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS
SECTION 8.1. ACCOUNTING AND REPORTS...........................................23
SECTION 8.2. [Removed and Reserved]...........................................23
SECTION 8.3. VALUATION OF NET ASSETS..........................................23
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. AMENDMENT OF LIMITED LIABILITY COMPANY AGREEMENT.................24
SECTION 9.2. SPECIAL POWER OF ATTORNEY........................................25
SECTION 9.3. NOTICES..........................................................26
SECTION 9.4. AGREEMENT BINDING UPON SUCCESSORS AND ASSIGNS....................26
SECTION 9.5. APPLICABILITY OF 1940 ACT AND FORM N-2...........................26
SECTION 9.6. CHOICE OF LAW; ARBITRATION.......................................27
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SECTION 9.7. NOT FOR BENEFIT OF CREDITORS.....................................28
SECTION 9.8. CONSENTS.........................................................28
SECTION 9.9. MERGER AND CONSOLIDATION.........................................28
SECTION 9.10. PRONOUNS........................................................29
SECTION 9.11. CONFIDENTIALITY.................................................29
SECTION 9.12. CERTIFICATION OF U.S. OR FOREIGN STATUS.........................30
SECTION 9.13. SEVERABILITY....................................................30
SECTION 9.14. FILING OF RETURNS...............................................30
SECTION 9.15. [Removed and Reserved]..........................................30
SECTION 9.16. [Removed and Reserved]..........................................30
SECTION 9.17. COUNTERPARTS....................................................30
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