Exhibit (a)(2)
PW REDWOOD FUND, L.L.C.
LIMITED LIABILITY COMPANY AGREEMENT
THIS LIMITED LIABILITY COMPANY AGREEMENT of PW Redwood Fund, L.L.C.
(the "Fund") is dated and effective as of July 27, 2000 by and among the
Organizational Member, the Manager and each person hereinafter admitted to the
Fund and reflected on the books of the Fund as a Member.
W I T N E S S E T H :
WHEREAS, the Fund heretofore has been formed as a limited liability
company under the Delaware Limited Liability Company Act, pursuant to the
Certificate dated as of July 26, 2000 and filed with the Secretary of State of
the State of Delaware on July 26, 2000;
NOW, THEREFORE, for and in consideration of the foregoing and the
mutual covenants hereinafter set forth, it is hereby agreed as follows:
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ARTICLE I
DEFINITIONS
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For purposes of this Agreement:
ADVICE AND MANAGEMENT means those services provided to the Fund by the
Manager pursuant to Section 3.4(b) hereof.
ADVISERS ACT means the Investment Advisers Act of 1940 and the rules,
regulations and orders thereunder, as amended from time to time, or any
successor law.
AFFILIATE means affiliated person as such term is defined in the 1940
Act.
AGREEMENT means this Limited Liability Company Agreement, as amended
and/or restated from time to time.
ALLOCATION CHANGE means, with respect to each Member for each
Allocation Period, the difference between:
(1) the sum of (a) the balance of such Member's Capital Account as of
the close of the Allocation Period (after giving effect to all
allocations to be made to such Member's Capital Account as of
such date other than any Incentive Allocation to be debited
against such Member's Capital Account), plus (b) any debits to
such Member's Capital Account during the Allocation Period to
reflect any actual or deemed distributions or repurchases with
respect to such Member's Interest, plus (c) any debits to such
Member's Capital Account during the Allocation Period to reflect
any Insurance premiums allocable to such Member, plus (d) any
debits to such Member's Capital Account during the Allocation
Period to reflect any items allocable to such Member's Capital
Account pursuant to Section 5.6 hereof other than Management
Fees; and
(2) the sum of (a) the balance of such Member's Capital Account as of
the commencement of the Allocation Period, plus (b) any credits
to such Member's Capital Account during the Allocation Period to
reflect any contributions by such Member to the capital of the
Fund, plus (c) any credits to such Member's Capital Account
during the Allocation Period to reflect any Insurance proceeds
allocable to such Member.
If the amount specified in clause (1) exceeds the amount
specified in clause (2), such difference shall be a POSITIVE
ALLOCATION CHANGE, and if the amount specified in clause (2)
exceeds the amount specified in clause (1), such difference shall
be a NEGATIVE ALLOCATION CHANGE.
ALLOCATION PERIOD means, with respect to each Member, the period
commencing as of the date of admission of such Member to the Fund and ending at
the close of business on the first to occur of the following:
(1) the last day of the twelfth complete calendar month since the
admission of such Member to the Fund;
(2) the last day of a Fiscal Year subsequent to a Member having been
admitted to the Fund for 12 complete calendar months, and the
last day of each Fiscal Year thereafter;
(3) the day as of which the Fund repurchases any Interest or portion
of an Interest of such Member;
(4) the day as of which the Fund admits as a substituted Member a
person to whom the Interest (or a portion thereof) of such Member
has been Transferred (unless there is no change in beneficial
ownership);
(5) the day as of which the authority of the Manager to provide
Advice and Management is terminated pursuant to Section 3.4(a)
hereof;
(6) the day preceding any day as of which such Member becomes a
Special Member; or
(7) the day on which such Member ceases to be a Special Member.
BOARD means the Board of Directors established pursuant to Section 2.6
hereof.
CAPITAL ACCOUNT means, with respect to each Member, the capital
account established and maintained on behalf of each Member pursuant to Section
5.3 hereof.
CAPITAL PERCENTAGE means a percentage established for each Member as
of each Expense Allocation Date. The Capital Percentage of a Member on an
Expense Allocation Date shall be determined by dividing the amount of capital
contributed to the Fund by the Member pursuant to Section 5.1 hereof by the sum
of the capital contributed to the Fund by each Member pursuant to Section 5.1
hereof on or prior to such Expense Allocation Date. The sum of the Capital
Percentages of all Members on each Expense Allocation Date shall equal 100%.
CAPITAL CONTRIBUTION means the contribution, if any, made, or to be
made, as the context requires, to the capital of the Fund by a Member.
CERTIFICATE means the Certificate of Formation of the Fund 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 Organizational Member or the Manager is admitted to the Fund.
CODE means the United States Internal Revenue Code of 1986, as amended
and as hereafter amended from time to time, or any successor law.
DELAWARE ACT means the Delaware Limited Liability Company Act (6
DEL.C.ss.18-101, ET SEQ.) as in effect on the date hereof and as amended from
time to time, or any successor law.
DIRECTOR means each natural person listed on Schedule I hereto who
serves on the Board and any other natural person who, from time to time,
pursuant hereto shall serve on the Board. Each Director shall constitute a
"manager" of the Fund within the meaning of the Delaware Act.
EXPENSE ALLOCATION DATE means the Closing Date, and thereafter each
day, through and including the date which is six months after the Closing Date,
as of which a contribution to the capital of the Fund is made pursuant to
Section 5.1 hereof.
FISCAL PERIOD means the period commencing on the Closing Date, and
thereafter each period commencing on the day immediately following the last day
of the preceding Fiscal Period, and ending at the close of business on the first
to occur of the following dates:
(1) the last day of a Fiscal Year;
(2) the day preceding any day as of which a contribution to the
capital of the Fund is made pursuant to Section 5.1;
(3) the day as of which the Fund repurchases any Interest or portion
of an Interest of any Member;
(4) the day as of which the Fund admits a substituted Member to whom
an Interest (or portion thereof) of a Member has been Transferred
(unless there is no change of beneficial ownership); or
(5) any other day as of which this Agreement provides for any amount
to be credited to or debited against the Capital Account of any
Member, other than an amount to be credited to or debited against
the Capital Accounts of all Members in accordance with their
respective Fund Percentages.
FISCAL YEAR means the period commencing on the Closing Date and ending
on the first December 31st following the Closing Date, and thereafter each
period commencing on January 1 of each year and ending on December 31 of each
year (or on the date of a final distribution pursuant to Section 6.2 hereof),
unless the Directors shall designate another fiscal year for the Fund that is a
permissible taxable year under the Code.
FORM N-2 means the Fund's Registration Statement on Form N-2 filed
with the Securities and Exchange Commission, as amended from time to time.
FUND means the limited liability company governed hereby, as such
limited liability company may from time to time be constituted.
FUND PERCENTAGE means a percentage established for each Member on the
Fund's books as of the first day of each Fiscal Period. The Fund Percentage of a
Member for a Fiscal Period shall be determined by dividing the balance of the
Member's Capital Account as of the commencement of such Fiscal Period by the sum
of the Capital Accounts of all of the Members as of the commencement of such
Fiscal Period. The sum of the Fund Percentages of all Members for each Fiscal
Period shall equal 100%.
INCENTIVE ALLOCATION means, with respect to any Member, other
than a Special Member, 20% (and, as respects a Special Member, such percentage
as the Manager shall have agreed with such Special Member) of the amount,
determined as of the close of each Allocation Period with respect to such
Member, by which such Member's Positive Allocation Change for such Allocation
Period, if any, exceeds any positive balance in such Member's Loss Recovery
Account as of the most recent prior date as of which any adjustment has been
made thereto.
INDEPENDENT DIRECTORS means those Directors who are not "interested
persons" of the Fund as such term is defined in the 1940 Act.
INSURANCE means one or more "key man" insurance policies on the life
of any principal of a member of the Manager or any other insurance policy, the
benefits of which are payable to the Fund.
INTEREST means the entire ownership interest in the Fund at any
particular time of a Member or other person to whom an Interest or portion
thereof has been transferred pursuant to Section 4.3 hereof, including the
rights and obligations of such Member or other person under this Agreement and
the Delaware Act.
INVESTED CAPITAL means, with respect to any Member, the amount of such
Member's aggregate Capital Contributions to the Fund, decreased by any
withdrawals (through repurchases pursuant to Section 4.4 hereof) made by such
Member pursuant to Section 4.4 hereof other than withdrawals of aggregate Net
Capital Appreciation (for this purpose, any amounts withdrawn shall first be
applied against Net Capital Appreciation, if any).
LOSS RECOVERY ACCOUNT means a memorandum account to be recorded in the
books and records of the Fund with respect to each Member, which shall have an
initial balance of zero and which shall be adjusted as follows:
(1) As of the first day after the close of each Allocation Period for
such Member, the balance of the Loss Recovery Account shall be
increased by the amount, if any, of such Member's Negative
Allocation Change for such Allocation Period and shall be reduced
(but not below zero) by the amount, if any, of such Member's
Positive Allocation Change for such Allocation Period.
(2) The balance of the Loss Recovery Account shall be reduced (but
not below zero) as of the first date as of which the Capital
Account balance of any Member is reduced as a result of
repurchase or transfer with respect to such Member's Interest by
an amount determined by multiplying (a) such positive balance by
(b) a fraction, (i) the numerator of which is equal to the amount
of the repurchase or transfer, and (ii) the denominator of which
is equal to the balance of such Member's Capital Account
immediately before giving effect to such repurchase or transfer.
No transferee of any Interest shall succeed to any Loss Recovery
Account balance or portion thereof attributable to the transferor unless the
Transfer by which such transferee received such Interest did not involve a
change of beneficial ownership.
MANAGEMENT FEE means the fee paid to PWFA out of the Fund's assets,
and debited against Members' Capital Accounts, for PWFA Services.
MANAGER means PW Redwood/Sequoia Management, L.L.C. or any successor
thereto. The Manager shall constitute a "manager" of the Fund within the meaning
of the Delaware Act. The Manager also shall constitute a "member" of the Fund
within the meaning of the Delaware Act and shall have an Interest.
MEMBER means the Manager and any person who shall have been admitted
to the Fund as a member (including any person who is a Special Member) until the
Fund repurchases the entire Interest of such person pursuant to Section 4.4
hereof or a substitute Member who is admitted to the Fund pursuant to Section
4.3 hereof, in such person's capacity as a member of the Fund. For purposes of
the Delaware Act, the Members shall constitute a single class or group of
members.
NEGATIVE ALLOCATION CHANGE has the meaning given such term in the
definition of Allocation Change.
NET ASSETS means the total value of all assets of the Fund, less an
amount equal to all accrued debts, liabilities and obligations of the Fund,
calculated before giving effect to any repurchases of Interests.
NET CAPITAL APPRECIATION means, with respect to any Member, the
excess, if any, of the aggregate amount credited to such Member's Capital
Account under clause (ii) of paragraph (c) of Section 5.3 hereof over the
aggregate amount debited to such Member's Capital Account under clause (ii) of
paragraph (d) of Section 5.3 hereof.
NET PROFIT OR NET LOSS means the amount by which the Net Assets as of
the close of business on the last day of a Fiscal Period exceed (in the case of
Net Profit) or are less than (in the case of Net Loss) the Net Assets as of the
commencement of the same Fiscal Period (or, with respect to the initial Fiscal
Period of the Fund, at the close of business on the Closing Date), such amount
to be adjusted to exclude:
(1) the amount of any Insurance premiums or proceeds to be allocated
among the Capital Accounts of the Members pursuant to Section 5.5
hereof;
(2) any items to be allocated among the Capital Accounts of the
Members on a basis which is not in accordance with the respective
Fund Percentages of all Members as of the commencement of such
Fiscal Period pursuant to Sections 5.6 and 5.7 hereof; and
(3) Organizational Expenses allocated among the Capital Accounts of
the Members pursuant to Section 5.11 hereof.
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.
1934 ACT means the Securities Exchange Act of 1934 and the rules,
regulations and orders thereunder, as amended from time to time, or any
successor law.
ORGANIZATIONAL EXPENSES means the expenses incurred by the Fund in
connection with its formation, its initial registration as an investment company
under the 1940 Act, and the initial offering of Interests.
ORGANIZATIONAL MEMBER means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
PERSON means any individual, entity, corporation, partnership,
association, limited liability company, joint-stock company, trust, estate,
joint venture, organization or unincorporated organization.
POSITIVE ALLOCATION CHANGE has the meaning given such term in the
definition of Allocation Change.
PWFA means PW Fund Advisor, L.L.C., or any successor thereto.
PWFA SERVICES means such management and administrative services as
PWFA or its affiliates shall provide to the Fund pursuant to a separate written
agreement with the Fund as contemplated by Section 3.10(a) hereof.
RELATED PERSON means, with respect to any person, (i) a relative,
spouse or relative of a spouse who has the same principal residence as such
person, (ii) any trust or estate in which such person and any persons who are
related to such person collectively have more than 50% of the beneficial
interests (excluding contingent interests) and (iii) any corporation or other
organization of which such person and any persons who are related to such person
collectively are beneficial owners of more than 50% of the equity securities
(excluding directors' qualifying shares) or equity interests.
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, currency or commodity, all manner of
derivative instruments and any contracts based on any index or group of
securities, debt obligations, currencies or commodities, and any options
thereon.
SPECIAL MEMBER means such Members as the Manager shall determine from
time to time, in its sole discretion, to be key employees, or directors of the
Manager and its affiliates, and members of their immediate families, and
attorneys or other professional advisors engaged on behalf of the Fund, and
members of their immediate families.
TAX MATTERS PARTNER means the Manager designated as "tax matters
partner" of the Fund pursuant to Section 8.17 hereof.
TRANSFER means the assignment, transfer, sale or other disposition of
all or any portion of an Interest, including any right to receive any
allocations and distributions attributable to an Interest.
VOTING INTEREST means with respect to a Member the number of votes
equivalent to such Member's Fund Percentage as of the record date for a meeting
of Members.
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ARTICLE II
ORGANIZATION; ADMISSION OF MEMBERS; BOARD
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2.1 FORMATION OF LIMITED LIABILITY COMPANY.
The Organizational Member and any person designated by the Board
hereby are designated as authorized persons, within the meaning of the Delaware
Act, to execute, deliver and file all certificates (and any amendments and/or
restatements thereof) required or permitted by the Delaware Act to be filed in
the office of the Secretary of State of the State of Delaware. The Board shall
cause to be executed and filed with applicable governmental authorities any
other instruments, documents and certificates which, in the opinion of the
Fund's legal counsel, may from time to time be required by the laws of the
United States of America, the State of Delaware or any other jurisdiction in
which the Fund 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 Fund.
2.2 NAME.
The name of the Fund shall be "PW Redwood Fund, L.L.C." or such other
name as the Board hereafter may 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. The Fund's business may be conducted
under the name of the Fund or, to the fullest extent permitted by law, any other
name or names deemed advisable by the Board.
2.3 PRINCIPAL AND REGISTERED OFFICE.
The Fund shall have its principal office at the principal office of
the Manager, or at such other place designated from time to time by the Board.
The Fund shall have its registered office in the State of Delaware at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and shall
have Corporation Service Company as its registered agent at such registered
office for service of process in the State of Delaware, unless a different
registered office or agent is designated from time to time by the Board in
accordance with the Delaware Act.
2.4 DURATION.
The term of the Fund commenced on the filing of the Certificate with
the Secretary of State of the State of Delaware and shall continue until the
Fund is dissolved pursuant to Section 6.1 hereof.
2.5 BUSINESS OF THE FUND.
(a) The business of the Fund is to purchase, sell (including short
sales), invest and trade in Securities, and to engage in any financial or
derivative transactions relating thereto or otherwise. The Manager, on behalf of
the Fund, may execute, deliver and perform all contracts, agreements and other
undertakings and engage in all activities and transactions as may in the opinion
of the Manager be necessary or advisable to carry out the Fund's business and
any amendments to any such contracts, agreements and other undertakings, all
without any further act, vote or approval of any other person, notwithstanding
any other provision of this Agreement.
(b) The Fund shall operate as a closed-end, 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.
2.6 THE BOARD.
(a) The Organizational Member hereby designates those persons listed
on Schedule I who shall agree to be bound by all of the terms of this Agreement
to serve as Directors on the initial Board. The Board 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 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 Fund. The number of Directors shall
be fixed from time to time by the Directors but, at the Closing Date, shall not
be fewer than three.
(b) Each Director shall serve as a Director for the duration of the
term of the Fund, unless his or her status as a Director shall be sooner
terminated pursuant to Section 4.1 hereof. If any vacancy in the position of a
Director occurs, the remaining Directors may appoint a person to serve in such
capacity, so long as immediately after such appointment at least two-thirds of
the Directors then serving would have been elected by the Members. The 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 as Directors.
(c) If no Director remains, the Manager 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 Fund and, if the business shall be continued, of
electing the required number of Directors. If the Members shall determine at
such meeting not to continue the business of the Fund 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 Fund shall be dissolved
pursuant to Section 6.1 hereof and the assets of the Fund shall be liquidated
and distributed pursuant to Section 6.2 hereof.
2.7 MEMBERS.
The Board may admit one or more Members as of the beginning of each
calendar month or at such other times as the Board may determine. Members may be
admitted to the Fund subject to the condition that each such Member shall
execute an appropriate signature page of this Agreement or of the Fund's
application pursuant to which such Member agrees to be bound by all the terms
and provisions hereof. The Board, in its absolute discretion, may reject
applications for Interests in the Fund. The admission of any person as a Member
shall be effective upon the revision of the books and records of the Fund to
reflect the name and the contribution to the capital of the Fund of such
additional Member. Each of the Manager and the Organizational Member hereby is
admitted as a Member on the date hereof.
2.8 ORGANIZATIONAL MEMBER.
Upon the admission to the Fund of any additional Member pursuant to
Section 2.7, the Organizational Member shall withdraw from the Fund as the
Organizational Member and shall be entitled to the return of his Capital
Contribution, if any, without interest or deduction, and shall cease to be a
member of the Fund.
2.9 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 and as provided in
the Delaware Act.
2.10 LIMITED LIABILITY.
Except as otherwise provided under applicable law, no Member or
Director shall be liable personally for the Fund's debts, obligations or
liabilities, whether arising in contract, tort or otherwise, solely by reason of
being a member or manager of the Fund, except that a Member may be obligated to
make capital contributions to the Fund pursuant to this Agreement and to repay
any funds wrongfully distributed to such Member. Notwithstanding any other
provision of this Agreement, the Manager, in its sole discretion, may require a
Member to contribute to the Fund, at any time or from time to time, whether
before or after the dissolution of the Fund or after such Member ceases to be a
member of the Fund, such amounts as are requested by the Manager to meet the
Fund's debts, obligations or liabilities (not to exceed for any Member the
aggregate amount of any distributions, amounts paid in connection with a
repurchase of all or a portion of such Member's Interest and any other amounts
received by such Member from the Fund during or after the Fiscal Year in which
any debt, obligation or liability of the Fund arose or was incurred); PROVIDED
HOWEVER, that each Member shall contribute only his pro rata share of the
aggregate amount requested based on such Member's Invested Capital in the Fiscal
Year in which the debt, obligation or liability arose or was incurred as a
percentage of the aggregate Invested Capital of the Fund in such Fiscal Year;
and PROVIDED FURTHER that the provisions of this Section 2.10 shall not affect
the obligations of Members under Section 18-607 of the Delaware Act.
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ARTICLE III
MANAGEMENT
________________________________________
3.1 MANAGEMENT AND CONTROL.
(a) Management and control of the business of the Fund shall be vested
in the Board, which shall have the right, power and authority, on behalf of the
Fund and in its name, to exercise all rights, powers and authority of managers
under the Delaware Act and to do all things necessary and proper to carry out
the business of the Fund and its duties hereunder, including, without
limitation, the power to engage the Manager to provide Advice and Management to
the Fund. No Director shall have the authority individually to act on behalf of
or to bind the Fund except within the scope of such Director's authority as
delegated by the Board. 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 Fund 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 Fund 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. During any
period in which the Fund shall have no Directors, the Manager shall continue to
provide Advice and Management to the Fund.
(b) Each Member agrees not to treat, on his personal return or in any
claim for a refund, any item of income, gain, loss, deduction or credit in a
manner inconsistent with the treatment of such item by the Fund. The Board shall
have the exclusive authority and discretion to make any elections required or
permitted to be made by the Fund under any provisions of the Code or any other
revenue laws.
(c) Members (other than the Manager) shall have no right to
participate in and shall take no part in the management or control of the Fund's
business and shall have no right, power or authority to act for or bind the
Fund. Members shall have the right to vote on any matters only as provided in
this Agreement or on any matters that require the approval of the holders of
voting securities under the 1940 Act or as otherwise required in the Delaware
Act.
(d) The Board may delegate to any person, including the Manager, even
if such delegation is greater than the power given to the Manager pursuant to
Section 3.4 hereof, any rights, power and authority vested by this Agreement in
the Board to the extent permissible under applicable law.
3.2 ACTIONS BY THE BOARD.
(a) Unless provided otherwise in this Agreement, the Board shall act
only: (i) by the affirmative vote of a majority of the Directors (which majority
shall include any requisite number of Independent Directors 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, in person or by telephone) or (ii) by unanimous written consent of all of
the Directors without a meeting, if permissible under the 1940 Act.
(b) The Board may designate from time to time a Chairman who shall
preside at all meetings. Meetings of the Board may be called by the Chairman or
any two Directors, and may be held on such date and at such time and place as
the Board 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 then in office
shall constitute a quorum at any meeting.
(c) The Board may designate from time to time agents and employees of
the Fund who shall have the same powers and duties on behalf of the Fund
(including the power to bind the Fund) as are customarily vested in officers of
a Delaware corporation, and designate them as officers of the Fund.
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. Meetings of the
Members may be called by the Board or by Members holding a majority of the total
number of votes eligible to be cast by all Members, and may be held at such
time, date and place as the Board shall determine. The Board shall arrange to
provide written notice of the meeting, stating the date, time and place of the
meeting and the record date therefor, to each Member entitled to vote at the
meeting within a reasonable time prior thereto. Failure to receive notice of a
meeting on the part of any Member shall not affect the validity of any act or
proceeding of the meeting, so long as a quorum shall be present at the meeting.
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 receiving a plurality of the votes cast at any meeting of
Members shall be elected as Directors and (ii) all other actions of the Members
taken at a meeting shall require the affirmative vote of Members holding a
majority of the total number of votes 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 a
number of votes equivalent to such Member's Voting Interest. The Board 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 which 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 Fund 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 Fund at any time
prior to exercise of the proxy or if the Member executing the proxy shall be
present at the meeting and decide to vote in person. Any action of the Members
that is permitted to be taken at a meeting of the Members may be taken without a
meeting if consents in writing, setting forth the action taken, are signed by
Members holding a majority of the total number of votes eligible to be cast or
such greater percentage as may be required in order to approve such action.
3.4 ADVICE AND MANAGEMENT.
(a) Among its powers, the Board shall have the power to engage the
Manager to provide Advice and Management to the Fund under its general
supervision, subject to the initial approval thereof prior to the Closing Date
by the Organizational Member. The Board also delegates to the Manager the rights
and powers expressly given to the Manager under this Agreement. The authority of
the Manager granted under this Section 3.4 shall become effective upon such
initial approval and shall terminate: (i) if any period of 12 consecutive months
following the first 12 consecutive months of the effectiveness of such authority
shall conclude without the approval of the continuation of such authority by (A)
the vote of a majority (as defined in the ▇▇▇▇ ▇▇▇) of the outstanding Voting
Interests of the Fund or (B) the Board, and in either case, approval by a
majority of the Independent Directors by vote cast in person at a meeting called
for such purpose; (ii) if revoked by the Board or by vote of a majority (as
defined in the ▇▇▇▇ ▇▇▇) of the outstanding Voting Interests of the Fund, in
either case with 60 days' prior written notice to the Manager; or (iii) at the
election of the Manager with 60 days' prior written notice to the Board. The
authority of the Manager to provide Advice and Management pursuant to this
Section 3.4 shall automatically terminate upon the occurrence of any event in
connection with the Manager, its provision of Advice and Management, this
Agreement or otherwise constituting an "assignment" within the meaning of the
1940 Act. If the authority of the Manager under this Section 3.4 is terminated
as provided herein, the Board may appoint, subject to the approval thereof by a
majority of the Independent Board and by vote of a majority (as defined in the
▇▇▇▇ ▇▇▇) of the outstanding Voting Interests of the Fund, a person or persons
to provide Advice and Management to the Fund, and shall cause the terms and
conditions of such appointment to be stated in an agreement executed on behalf
of the Fund and such person or persons. Notwithstanding anything in this
Agreement to the contrary, upon receiving the requisite approval set forth in
the preceding sentence, the Fund, and a person designated by the Board, shall
have the power and authority to enter into such agreement without any further
act, vote or approval of any Member.
(b) So long as the Manager has been and continues to be authorized to
provide Advice and Management, it shall have, subject to any policies and
restrictions set forth in any current offering memorandum issued by the Fund,
this Agreement, the Form N-2 or the 1940 Act, or adopted from time to time by
the Board and communicated in writing to the Manager, full discretion and
authority (i) to manage the assets and liabilities of the Fund and (ii) to
manage the day-to-day business and affairs of the Fund. In furtherance of and
subject to the foregoing, the Manager, except as otherwise provided in this
Agreement, shall have full power and authority on behalf of the Fund:
(1) to purchase, sell, exchange, trade and otherwise deal in and with
Securities and other property of the Fund and to loan Securities
of the Fund;
(2) to open, maintain and close accounts with brokers and dealers, to
make all decisions relating to the manner, method and timing of
Securities and other investment transactions, to select and place
orders with brokers, dealers or other financial intermediaries
for the execution, clearance or settlement of any transactions on
behalf of the Fund on such terms as the Manager considers
appropriate, and to grant limited discretionary authorization to
such persons with respect to price, time and other terms of
investment and trading transactions;
(3) to borrow from banks or other financial institutions and to
pledge Fund assets as collateral therefor, to trade on margin, to
exercise or refrain from exercising all rights regarding the
Fund's investments, and to instruct custodians regarding the
settlement of transactions, the disbursement of payments to
Members with respect to repurchases of Interests and the payment
of Fund expenses, including those relating to the organization
and registration of the Fund;
(4) to issue to any Member an instrument certifying that such Member
is the owner of an Interest;
(5) to call and conduct meetings of Members at the Fund's principal
office or elsewhere as it may determine and to assist the Board
in calling and conducting meetings of the Board;
(6) to engage and terminate such attorneys, accountants and other
professional advisors and consultants as the Manager may deem
necessary or advisable in connection with the affairs of the Fund
or as may be directed by the Board;
(7) to engage and terminate the services of others to assist the
Manager in providing, or to provide under the Manager's control
and supervision, Advice and Management to the Fund at the expense
of the Manager;
(8) to assist in the preparation and filing of any required tax or
information returns to be made by the Fund;
(9) as directed by the Board, to commence, defend and conclude any
action, suit, investigation or other proceeding that pertains to
the Fund or any assets of the Fund;
(10) if directed by the Board, to arrange for the purchase of (A)
Insurance, or (B) any insurance covering the potential
liabilities of the Fund or relating to the performance of the
Board or the Manager, or any of their principals, directors,
officers, members, employees and agents; and
(11) to execute, deliver and perform such contracts, agreements and
other undertakings, and to engage in such activities and
transactions as are, in the opinion of the Manager, necessary and
appropriate for the conduct of the business of the Fund, without
the act, vote or approval of any other Member or person.
3.5 CUSTODY OF ASSETS OF THE FUND.
The physical possession of all funds, Securities or other property of
the Fund shall at all times, be held, controlled and administered by one or more
custodians retained by the Fund in accordance with the requirements of the 1940
Act.
3.6 BROKERAGE.
In the course of selecting brokers, dealers and other financial
intermediaries for the execution, clearance and settlement of transactions for
the Fund, the Manager may agree to such commissions, fees and other charges on
behalf of the Fund as it shall deem reasonable under the circumstances, taking
into account all such factors as it deems relevant (including the quality of
research and other services made available to it even if such services are not
for the exclusive benefit of the Fund and the cost of such services does not
represent the lowest cost available) and shall be under no obligation to combine
or arrange orders so as to obtain reduced charges unless otherwise required
under the Federal securities laws. The Manager, subject to such procedures as
may be adopted by the Board, may use Affiliates of the Manager as brokers to
effect the Fund's Securities transactions and the Fund may pay such commissions
to such brokers in such amounts as are permissible under applicable law.
3.7 OTHER ACTIVITIES OF MEMBERS (INCLUDING THE MANAGER) AND DIRECTORS.
(a) Neither the Directors nor the Manager shall be required to devote
full time to the affairs of the Fund, but shall devote such time as may
reasonably be required to perform their obligations under this Agreement.
(b) Any Member (including the Manager) or Director or Affiliate
thereof may engage in or possess an interest in other business ventures or
commercial dealings of every kind and description, independently or with others,
including, but not limited to, acquisition and disposition of Securities,
provision of investment advisory or brokerage services, serving as directors,
officers, employees, 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 shall have any
rights in or to such activities of any other Member or Director, or any profits
derived therefrom.
3.8 DUTY OF CARE.
(a) The Directors and the Manager, including any officer, director,
member, principal, employee or agent of the Manager, shall not be liable to the
Fund or to any of its Members for any loss or damage occasioned by any act or
omission in the performance of such person's services under this Agreement,
unless it shall be determined by final judicial decision on the merits from
which there is no further right to appeal that such loss is due to an act or
omission of such person constituting willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
person's duties hereunder.
(b) A Member not in breach of any obligation hereunder or under any
agreement pursuant to which the Member subscribed for an Interest shall be
liable to the Fund, any other Member or third parties only as required by the
Delaware Act or otherwise provided in this Agreement.
3.9 INDEMNIFICATION.
(a) To the fullest extent permitted by law, the Fund shall, subject to
Section 3.9(b) hereof, indemnify each Director (including for this purpose their
executors, heirs, assigns, successors or other legal representatives), the
Manager (including for this purpose each affiliate, officer, director, member,
partner, principal, employee or agent of the Manager or a member thereof, and
the executors, heirs, assigns, successors or other legal representatives of each
of the foregoing, and of any person who controls or is under common control, or
otherwise is affiliated, with the Manager or any member thereof, and their
executors, heirs, assigns, successors or other legal representatives), and the
Tax Matters Partner (including for this purpose its successor) against all
losses, claims, damages, liabilities, costs and expenses, including, but not
limited to, amounts paid in satisfaction of judgments, in compromise, or as
fines or penalties, and reasonable counsel fees, incurred in connection with the
defense or disposition of any action, suit, investigation or other proceeding,
whether civil or criminal, before any judicial, arbitral, administrative or
legislative body, in which such indemnitee may be or may have been involved as a
party or otherwise, or with which such indemnitee may be or may have been
threatened, while in office or thereafter, by reason of being or having been a
Director, Manager or the Tax Matters Partner, as the case may be, of the Fund or
the past or present performance of services to the Fund by such indemnitee,
except to the extent such loss, claim, damage, liability, cost or expense shall
have been finally determined in a non-appealable decision on the merits in any
such action, suit, investigation or other proceeding to have been incurred or
suffered by such indemnitee by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of such
indemnitee's office. The rights of indemnification provided under this Section
3.9 shall not be construed so as to provide for indemnification of an indemnitee
for any liability (including liability under federal securities laws which,
under certain circumstances, impose liability even on persons that act in good
faith) to the extent (but only to the extent) that such indemnification would be
in violation of applicable law, but shall be construed so as to effectuate the
applicable provisions of this Section 3.9 to the fullest extent permitted by
law.
(b) Expenses, including reasonable counsel fees, so incurred by any
such indemnitee (but excluding amounts paid in satisfaction of judgments, in
compromise, or as fines or penalties), may be paid from time to time by the Fund
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 Fund amounts so paid if it shall ultimately be determined that
indemnification of such expenses is not authorized under Section 3.9(a) hereof;
PROVIDED, HOWEVER, that (i) such indemnitee shall provide security for such
undertaking, (ii) the Fund shall be insured by or on behalf of such indemnitee
against losses arising by reason of such indemnitee's failure to fulfill his or
its undertaking, or (iii) a majority of the Directors (excluding any Director
who is seeking 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 Fund or its Members by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such indemnitee's office, indemnification shall be
provided pursuant to Section 3.9(a) hereof if (i) approved as in the best
interests of the Fund by a majority of the Directors (excluding any Director who
is seeking indemnification hereunder) upon a determination based upon a review
of readily available facts (as opposed to a full trial-type inquiry) that such
indemnitee acted in good faith and in the reasonable belief that such actions
were in the best interests of the Fund and that such indemnitee is not liable to
the Fund or its Members by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of such
indemnitee's office, or (ii) the Directors secure 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 indemnitee acted
in good faith and in the reasonable belief that such actions were in the best
interests of the Fund and that such indemnitee is not liable to the Fund or its
Members by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of such indemnitee's
office.
(d) Any indemnification or advancement of expenses made pursuant to
this Section 3.9 shall not prevent the recovery from any indemnitee of any such
amount if such indemnitee subsequently shall be determined in a decision on the
merits in any action, suit, investigation or proceeding involving the liability
or expense that gave rise to such indemnification or advancement of expenses to
be liable to the Fund or its Members by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of such indemnitee's office. In any suit brought by an indemnitee to
enforce a right to indemnification under this Section 3.9 it shall be a defense
that, and in any suit in the name of the Fund to recover any indemnification or
advancement of expenses made pursuant to this Section 3.9 the Fund shall be
entitled to recover such expenses upon a final adjudication that, the indemnitee
has not met the applicable standard of conduct set forth in this Section 3.9. 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 3.9,
the burden of proving that the indemnitee is not entitled to be indemnified, or
to any indemnification or advancement of expenses, under this Section 3.9 shall
be on the Fund (or any Member acting derivatively or otherwise on behalf of the
Fund or its Members).
(e) An indemnitee may not satisfy any right of indemnification or
advancement of expenses granted in this Section 3.9 or to which he, she or it
may otherwise be entitled except out of the assets of the Fund, 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 3.9 shall
affect the power of the Fund to purchase and maintain liability insurance on
behalf of any Director or other person.
3.10 FEES, EXPENSES AND REIMBURSEMENT.
(a) So long as PWFA (or its affiliates) provides PWFA Services to the
Fund, it shall be entitled to receive such fees as may be agreed to by PWFA and
the Fund pursuant to a separate written agreement, which, notwithstanding
anything in this Agreement to the contrary, may be entered into by the Fund, and
the Manager on behalf of the Fund, without any further act, vote or approval of
any Member.
(b) The Board may cause the Fund to compensate each Director for his
or her services hereunder. In addition, the Fund shall reimburse the Directors
for reasonable out-of-pocket expenses incurred by them in performing their
duties under this Agreement.
(c) The Fund shall bear all expenses incurred in the business of the
Fund other than those specifically required to be borne by the Manager or its
members hereunder or under any other agreement. Expenses to be borne by the Fund
include, but are not limited to, the following:
(1) all costs and expenses related to portfolio transactions and
positions for the Fund's account, including, but not limited to,
brokerage commissions, research fees, interest and commitment
fees on loans and debit balances, borrowing charges on Securities
sold short, dividends on Securities sold short but not yet
purchased, custodial fees, margin fees, transfer taxes and
premiums and taxes withheld on foreign dividends;
(2) all costs and expenses associated with the organization and
registration of the Fund, offering costs and the costs of
compliance with any applicable Federal or state laws;
(3) the costs and expenses of holding any meetings of Members that
are regularly scheduled, permitted or are required to be held by
this Agreement, the 1940 Act or other applicable law;
(4) fees and disbursements of any attorneys, accountants, auditors
and other consultants and professionals engaged on behalf of the
Fund;
(5) the costs of a fidelity bond and any liability insurance obtained
on behalf of the Fund, the Manager or the Directors;
(6) any fees payable to PWFA or its affiliates for PWFA Services;
(7) all costs and expenses of preparing, setting in type, printing
and distributing reports and other communications to Members;
(8) all expenses of computing the Fund's net asset value, including
any equipment or services obtained for the purpose of valuing the
Fund's investment portfolio, including valuation services
provided by third parties;
(9) all charges for equipment or services used for communications
between the Fund and any custodian, or other agent engaged by the
Fund;
(10) fees payable to custodians and persons providing administrative
services to the Fund; and
(11) such other types of expenses as may be approved from time to time
by the Board.
The Manager shall be entitled to reimbursement from the Fund for any
of the above expenses that it pays on behalf of the Fund.
(d) The Fund from time to time, alone or in conjunction with other
accounts for which the Manager, or any Affiliate of the Manager, acts as general
partner, managing member or investment adviser, may purchase Insurance in such
amounts, from such insurers and on such terms as the Board shall determine.
________________________________________
ARTICLE IV
TERMINATION OF STATUS OF DIRECTORS;
TRANSFERS AND REPURCHASES
________________________________________
4.1 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, unless the other Directors waive such notice); (iv) shall be removed
under Section 4.2; (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; or (vii) shall have a receiver appointed to administer the property
or affairs of such Director.
4.2 REMOVAL OF THE DIRECTORS.
Any Director may be removed either by (a) the vote or written consent
of at least two-thirds of the Directors not subject to the removal vote or (b)
the vote or written consent of Members holding not less than two-thirds of the
total number of votes eligible to be cast by all Members.
4.3 TRANSFER OF INTERESTS OF MEMBERS.
(a) An Interest or portion thereof of a Member may be Transferred only
(i) by operation of law pursuant to the death, bankruptcy, insolvency or
dissolution of such Member or (ii) with the written consent of the Board (which
may be withheld in its sole and absolute discretion). In addition, the Board may
not consent to a Transfer of an Interest or a portion thereof of a Member unless
the person to whom such Interest is transferred (or each of such person's equity
owners if such a person is a "private investment company" as defined in Rule
205-3(d)(3) under the Advisers Act, an investment company registered under the
1940 Act, or a business development company as defined under the Advisers Act)
is a person whom the Board believes meets the requirements of paragraph (d)(1)
of Rule 205-3 under the Advisers Act or successor rule thereto, or is otherwise
exempt from such requirements. If any transferee does not meet such investor
eligibility requirements, the Fund reserves the right to redeem its Interest. If
the Board does not consent to a Transfer by operation of law, the Fund shall
redeem the Interest from the Member's successor. In addition to the foregoing,
no Member shall be permitted to Transfer its Interest or portion thereof unless
after such Transfer the balance of the Capital Account of each of the transferor
and the transferee is at least equal to the amount of the transferor's initial
Capital Contribution. Any permitted transferee shall be entitled to the
allocations and distributions allocable to the Interest so acquired and to
Transfer such Interest 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 an Interest or portion
thereof with the approval of the Board, the Fund shall promptly take all
necessary actions so that each transferee or successor to whom such Interest or
portion thereof is Transferred is admitted to the Fund as a substituted Member.
The admission of any transferee as a substituted Member shall be effective upon
the execution and delivery by, or on behalf of, such substituted Member of
either a counterpart of this Agreement or an instrument that constitutes the
execution and delivery of this Agreement. Each transferring Member and
transferee agrees to pay all expenses, including attorneys' and accountants'
fees, incurred by the Fund in connection with such Transfer. Upon the Transfer
to another person or persons of a Member's entire Interest, such Member shall
cease to be a member of the Fund.
(b) Each transferring Member shall indemnify and hold harmless the
Fund, the Directors, the Manager, 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 4.3 and (ii) any
misrepresentation by such Member in connection with any such Transfer.
4.4 REPURCHASE OF INTERESTS.
(a) Except as otherwise provided in this Agreement, no Member or other
person holding an Interest or portion thereof shall have the right to withdraw
or tender to the Fund for repurchase of that Interest or portion thereof. The
Board may from time to time, in its complete and exclusive discretion and on
such terms and conditions as it may determine, cause the Fund to repurchase
Interests or portions thereof pursuant to written tenders. In determining
whether to cause the Fund to repurchase Interests or portions thereof pursuant
to written tenders, the Board shall consider the following factors, among
others:
(1) whether any Members have requested to tender Interests or
portions thereof to the Fund;
(2) the liquidity of the Fund's assets;
(3) the investment plans and working capital requirements of the
Fund;
(4) the relative economies of scale with respect to the size of the
Fund;
(5) the history of the Fund in repurchasing Interests or portions
thereof;
(6) the condition of the securities markets; and
(7) the anticipated tax consequences of any proposed repurchases of
Interests or portions thereof.
The Board shall cause the Fund to repurchase Interests or portions
thereof pursuant to written tenders only on terms fair to the Fund and to all
Members (including persons holding Interests acquired from Members), as
applicable.
(b) The Board may cause the Fund to repurchase an Interest or portion
thereof of a Member or any person acquiring an Interest or portion thereof from
or through a Member if the Board determines or has reason to believe that:
(1) such an Interest or portion thereof has been transferred in
violation of Section 4.3 hereof, or such an Interest or portion
thereof has vested in any person by operation of law as the
result of the death, dissolution, bankruptcy or incompetency of a
Member;
(2) ownership of such an Interest by a Member or other person will
cause the Fund to be in violation of, or require registration of
any Interest or portion thereof under, or subject the Fund to
additional registration or regulation under, the securities,
commodities or other laws of the United States or any other
relevant jurisdiction;
(3) continued ownership of such an Interest may be harmful or
injurious to the business or reputation of the Fund, the Manager
or the Directors, or may subject the Fund or any of the Members
to an undue risk of adverse tax or other fiscal consequences;
(4) any of the representations and warranties made by a Member in
connection with the acquisition of an Interest or portion thereof
was not true when made or has ceased to be true; or
(5) it would be in the best interests of the Fund, as determined by
the Board, for the Fund to repurchase such an Interest or portion
thereof.
(c) Repurchases of Interests or portions thereof by the Fund shall be
payable in cash or in part by promissory note, in each case without interest,
unless the Board, in its discretion, determines otherwise, or, in the discretion
of the Board, in Securities (or any combination of Securities and cash) of
equivalent value. All such repurchases shall be subject to any and all
conditions as the Board may impose and shall be effective as of a date set by
the Board after receipt by the Fund of all eligible written tenders of Interests
or portion thereof. The amount due to any Member whose Interest or portion
thereof is repurchased shall be equal to the estimated value of such Member's
Capital Account or portion thereof as applicable as of the effective date of
repurchase, after giving effect to all allocations to be made to such Member's
Capital Account as of such date.
________________________________________
ARTICLE V
CAPITAL
________________________________________
5.1 CONTRIBUTIONS TO CAPITAL.
(a) The minimum initial contribution of each Member (other than the
Manager) to the capital of the Fund shall be $250,000 ($25,000 for employees or
directors of the Manager and its affiliates, and members of their immediate
families, and, in the sole discretion of the Board, attorneys or other
professional advisors engaged on behalf of the Fund, and members of their
immediate families) or such other amount as the Board may determine from time to
time. The amount of the initial contribution of each Member shall be recorded on
the books and records of the Fund upon acceptance as a contribution to the
capital of the Fund. The Directors shall not be entitled to make voluntary
contributions of capital to the Fund as Directors of the Fund, but may make
voluntary contributions to the capital of the Fund as Members.
(b) The Members may make additional contributions to the capital of
the Fund, effective as of such times as the Board in its discretion may permit,
but no Member shall be obligated to make any additional contribution to the
capital of the Fund except to the extent provided in Section 5.7 hereof.
(c) Except as otherwise permitted by the Board, (i) initial and any
additional contributions to the capital of the Fund by any Member shall be
payable in cash or in such Securities that the Board, in its absolute
discretion, may agree to accept on behalf of the Fund, and (ii) initial and any
additional contributions in cash shall be payable in readily available funds at
the date of the proposed acceptance of the contribution. The Fund shall charge
each Member making a contribution in Securities to the capital of the Fund such
amount as may be determined by the Board not exceeding 2% of the value of such
contribution in order to reimburse the Fund for any costs incurred by the Fund
by reason of accepting such Securities, and any such charge shall be due and
payable by the contributing Member in full at the time the contribution to the
capital of the Fund to which such charges relate is due. The value of
contributed Securities shall be determined in accordance with Section 7.3 hereof
as of the date of contribution.
5.2 RIGHTS OF MEMBERS TO CAPITAL.
No Member shall be entitled to interest on his or its contribution to
the capital of the Fund, nor shall any Member be entitled to the return of any
capital of the Fund except (i) upon the repurchase by the Fund of a part or all
of such Member's Interest pursuant to Section 4.4 hereof, (ii) pursuant to the
provisions of Section 5.7(c) hereof or (iii) upon the liquidation of the Fund's
assets pursuant to Section 6.2 hereof. No Member shall be liable for the return
of any such amounts. No Member shall have the right to require partition of the
Fund's property or to compel any sale or appraisal of the Fund's assets.
5.3 CAPITAL ACCOUNTS.
(a) The Fund shall maintain a separate Capital Account for each
Member.
(b) Each Member's Capital Account shall have an initial balance equal
to the amount of cash and the value of any Securities (determined in accordance
with Section 7.3 hereof) constituting such Member's initial contribution to the
capital of the Fund.
(c) Each Member's Capital Account shall be increased by the sum of (i)
the amount of cash and the value of any Securities (determined in accordance
with Section 7.3 hereof) constituting additional contributions by such Member to
the capital of the Fund permitted pursuant to Section 5.1 hereof, plus (ii) any
amount credited to such Member's Capital Account pursuant to Sections 5.4
through 5.7 or 5.11 hereof.
(d) Each Member's Capital Account shall be reduced by the sum of (i)
the amount of any repurchase of the Interest, or portion thereof, of such Member
or distributions to such Member pursuant to Sections 4.4, 5.10 or 6.2 hereof
which are not reinvested, plus (ii) any amounts debited against such Member's
Capital Account pursuant to Sections 5.4 through 5.7 and 5.11 hereof.
(e) If all or a portion of an Interest is transferred in accordance
with the terms of this Agreement, the transferee shall succeed to the Capital
Account of the transferor to the extent it relates to the transferred Interest.
5.4 ALLOCATION OF NET PROFIT AND LOSS.
As of the last day of each Fiscal Period, any Net Profit or Net Loss
for the Fiscal Period shall be allocated among and credited to or debited
against the Capital Accounts of the Members in accordance with their respective
Fund Percentages for such Fiscal Period.
5.5 ALLOCATION OF INSURANCE PREMIUMS AND PROCEEDS.
(a) Any premiums payable by the Fund for Insurance purchased pursuant
to Section 3.10(d) hereof shall be apportioned evenly over each Fiscal Period or
portion thereof falling within the period to which such premiums relate under
the terms of such Insurance, and the portion of the premiums so apportioned to
any Fiscal Period shall be allocated among and debited against the Capital
Accounts of each Member who is a member of the Fund during such Fiscal Period in
accordance with such Member's Fund Percentage for such Fiscal Period.
(b) Proceeds, if any, to which the Fund may become entitled pursuant
to such Insurance shall be allocated among and credited to the Capital Accounts
of each Member who is a member of the Fund during the Fiscal Period in which the
event which gives rise to recovery of proceeds occurs in accordance with such
Member's Fund Percentage for such Fiscal Period.
5.6 ALLOCATION OF CERTAIN WITHHOLDING TAXES AND OTHER EXPENDITURES.
(a) If the Fund incurs a withholding tax or other tax obligation with
respect to the share of Fund income allocable to any Member, then the Board,
without limitation of any other rights of the Fund or the Board, shall cause the
amount of such obligation to be debited against the Capital Account of such
Member when the Fund pays such obligation, and any amounts then or thereafter
distributable to such Member shall be reduced by the amount of such taxes. If
the amount of such taxes is greater than any such distributable amounts, then
such Member and any successor to such Member's Interest shall pay to the Fund as
a contribution to the capital of the Fund, upon demand of the Fund, the amount
of such excess. The Fund 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; provided, that in the event that
the Fund determines that a Member is eligible for a refund of any withholding
tax, the Fund may, at the request and expense of such Member, assist such Member
in applying for such refund.
(b) Except as otherwise provided for in this Agreement and unless
prohibited by the 1940 Act, any expenditures payable by the Fund, to the extent
determined by the Board to have been paid or withheld on behalf of, or by reason
of particular circumstances applicable to, one or more but fewer than all of the
Members, shall be charged to only those Members on whose behalf such payments
are made or whose particular circumstances gave rise to such payments. Such
charges shall be debited from the Capital Accounts of such Members as of the
close of the Fiscal Period during which any such items were paid or accrued by
the Fund.
5.7 RESERVES.
(a) Appropriate reserves may be created, accrued and charged against
Net Assets and proportionately against the Capital Accounts of the Members for
contingent liabilities, if any, as of the date any such contingent liability
becomes known to the Manager or the Board, such reserves to be in the amounts
which the Board in its sole discretion deem necessary or appropriate. The Board
may increase or reduce any such reserves from time to time by such amounts as it
in its sole discretion deems necessary or appropriate. The amount of any such
reserve, or any increase or decrease therein, shall be proportionately charged
or credited, as appropriate, to the Capital Accounts of those parties who are
Members at the time when such reserve is created, increased or decreased, as the
case may be; PROVIDED, HOWEVER, that if any such individual reserve item,
adjusted by any increase therein, exceeds the lesser of $500,000 or 1% of the
aggregate value of the Capital Accounts of all such Members, the amount of such
reserve, increase, or decrease instead shall be charged or credited to those
parties who were Members at the time, as determined by the Board in its sole
discretion, of the act or omission giving rise to the contingent liability for
which the reserve was established, increased or decreased in proportion to their
Capital Accounts.
(b) If at any time an amount is paid or received by the Fund (other
than contributions to the capital of the Fund, distributions or repurchases of
Interests or portions thereof) and such amount exceeds the lesser of $500,000 or
1% of the aggregate value of the Capital Accounts of all Members at the time of
payment or receipt and such amount was not accrued or reserved for but would
nevertheless, in accordance with the Fund's accounting practices, be treated as
applicable to one or more prior Fiscal Periods, then such amount shall be
proportionately charged or credited, as appropriate, to those parties who were
Members during such prior Fiscal Period or Periods.
(c) If any amount is required by paragraph (a) or (b) of this Section
5.7 to be charged or credited to a party who is no longer a Member, such amount
shall be paid by or to such party, as the case may be, in cash, with interest
from the date on which the Board determines that such charge or credit is
required. In the case of a charge, the former Member shall be obligated to pay
the amount of the charge, plus interest as provided above, to the Fund on
demand; PROVIDED, HOWEVER, that (i) in no event shall a former Member be
obligated to make a payment exceeding the amount of such Member's Capital
Account at the time to which the charge relates; and (ii) no such demand shall
be made after the expiration of three years from the date on which such party
ceased to be a Member. To the extent that a former Member fails to pay to the
Fund, in full, any amount required to be charged to such former Member pursuant
to paragraph (a) or (b), whether due to the expiration of the applicable
limitation period or for any other reason whatsoever, the deficiency shall be
charged proportionately to the Capital Accounts of the Members at the time of
the act or omission giving rise to the charge to the extent feasible, and
otherwise proportionately to the Capital Accounts of the current Members.
5.8 INCENTIVE ALLOCATION.
(a) So long as the authority to provide Advice and Management under
Section 3.4 hereof shall remain effective, the Incentive Allocation shall be
debited against the Capital Account of each Member (other than the Manager) as
of the last day of each Allocation Period with respect to such Member and the
amount so debited shall be credited simultaneously to the Capital Account of the
Manager, or, subject to compliance with the 1940 Act and the Advisers Act, to
the Capital Accounts of such Members as have been designated in any written
notice delivered by the Manager, to the Fund within 90 days after the close of
such Allocation Period.
(b) Within 30 days after the close of each Allocation Period with
respect to each Member, the Manager may withdraw up to 100% of the Incentive
Allocation (computed on the basis of unaudited data) that was credited to the
Capital Account of the Manager, and debited from such Member's Capital Account
with respect to such Allocation Period. The Fund shall pay the Manager the
undrawn balance, if any, of such Incentive Allocation (subject to audit
adjustments) within 30 days after the completion of the audit of the Fund's
books. Any amount of such Incentive Allocation not withdrawn by the Manager
pursuant to the first sentence of this Section 5.8(b) shall be deemed reinvested
in the Fund by the Manager.
5.9 TAX ALLOCATIONS.
For each Fiscal Year, items of income, deduction, gain, loss or credit
shall be allocated for income tax purposes among the Members in such a manner as
to reflect equitably amounts credited or debited to each Member's Capital
Account for the current and prior Fiscal Years (or relevant portions thereof).
Allocations under this Section 5.9 shall be made pursuant to the principles of
Sections 704(b) and 704(c) of the Code, and in conformity with Treasury
Regulations Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(4)(i) and 1.704-3(e)
promulgated thereunder, as applicable, or the successor provisions to such
Section and Regulations. Notwithstanding anything to the contrary in this
Agreement, there shall be allocated to the Members such gains or income as shall
be necessary to satisfy the "qualified income offset" requirement of Treasury
Regulations Section 1.704-1(b)(2)(ii)(d).
If the Fund realizes capital gains (including short-term capital
gains) for Federal income tax purposes for any Fiscal Year during or as of the
end of which one or more Positive Basis Members (as hereinafter defined)
withdraw from the Fund pursuant to Articles IV or VI hereof, the Board may elect
to allocate such gains as follows: (i) to allocate such gains among such
Positive Basis Members, PRO RATA in proportion to the respective Positive Basis
(as hereinafter defined) of each such Positive Basis Member, until either the
full amount of such gains shall have been so allocated or the Positive Basis of
each such Positive Basis Member shall have been eliminated and (ii) to allocate
any gains not so allocated to Positive Basis Members to the other Members in
such manner as shall reflect equitably the amounts credited to such Members'
Capital Accounts.
As used herein, (i) the term "Positive Basis" shall mean, with respect
to any Member and as of any time of calculation, the amount by which the total
of such Member's Capital Account as of such time exceeds its "adjusted tax
basis," for Federal income tax purposes, in its Interest as of such time
(determined without regard to any adjustments made to such "adjusted tax basis"
by reason of any transfer or assignment of such Interest, including by reason of
death and without regard to such Member's share of the liabilities of the Fund
under Section 752 of the Code), and (ii) the term "Positive Basis Member" shall
mean any Member who withdraws from the Fund and who has a Positive Basis as of
the effective date of its withdrawal but such Member shall cease to be a
Positive Basis Member at such time as it shall have received allocations
pursuant to clause (i) of the preceding sentence equal to its Positive Basis as
of the effective date of its withdrawal.
5.10 DISTRIBUTIONS.
(a) The Board, in its sole discretion, may authorize the Fund to make
distributions in cash or in kind at any time to all of the Members on a PRO RATA
basis in accordance with the Members' Fund Percentages. Notwithstanding anything
to the contrary in this Agreement, a Member may be compelled to accept a
distribution of any asset in kind from the Fund despite the fact that the
percentage of the asset distributed to the Member exceeds the percentage of that
asset which is equal to the percentage in which the Member shares in
distributions from the Fund.
(b) The Board may withhold taxes from any distribution to any Member
to the extent required by the Code or any other applicable law. For purposes of
this Agreement, any taxes so withheld by the Fund with respect to any amount
distributed by the Fund to any Member shall be deemed to be a distribution or
payment to such Member, reducing the amount otherwise distributable to such
Member pursuant to this Agreement and, if appropriate, reducing the Capital
Account of such Member.
(c) Notwithstanding anything to the contrary contained herein, none of
the Directors or the Members (including the Manager), nor any other person on
behalf of the Fund, shall make a distribution to the Members on account of their
interest in the Fund if such distribution would violate the Delaware Act or
other applicable law.
5.11 ALLOCATION OF ORGANIZATIONAL EXPENSES.
(a) As of the first Expense Allocation Date, Organizational Expenses
shall be allocated among and debited against the Capital Accounts of the Members
in accordance with their respective Capital Percentages on such Expense
Allocation Date.
(b) As of each Expense Allocation Date following the first Expense
Allocation Date, all amounts previously debited against the Capital Account of a
Member pursuant to this Section 5.11 on the preceding Expense Allocation Date
will be credited to the Capital Account of such Member, and Organizational
Expenses then shall be re-allocated among and debited against the Capital
Accounts of all Members in accordance with their respective Capital Percentages
on such Expense Allocation Date.
________________________________________
ARTICLE VI
DISSOLUTION AND LIQUIDATION
________________________________________
6.1 DISSOLUTION.
(a) The Fund shall be dissolved at any time there are no Members,
unless the Fund is continued in accordance with the Delaware Act, or upon the
occurrence of any of the following events:
(1) upon the affirmative vote to dissolve the Fund by both (i) the
Board and (ii) Members holding at least two-thirds of the total
number of Voting Interests eligible to be cast by all Members;
(2) upon the failure of Members to approve of successor Directors at
a meeting called by the Manager in accordance with Section 2.6(c)
hereof when no Director remains to continue the business of the
Fund;
(3) upon the expiration of any two-year period which commences on the
date on which any Member has submitted a written notice to the
Fund requesting to tender such Member's entire Interest for
repurchase by the Fund if such Member has not been permitted to
do so at any time during such period;
(4) upon the determination by the Manager to dissolve the Fund; or
(5) as required by operation of law.
Dissolution of the Fund shall be effective on the day on which the
event giving rise to the dissolution shall occur, but the Fund shall not
terminate until the assets of the Fund have been liquidated in accordance with
Section 6.2 hereof and the Certificate has been canceled.
6.2 LIQUIDATION OF ASSETS.
(a) Upon the dissolution of the Fund as provided in Section 6.1
hereof, the Board, acting directly or through a liquidator it selects, shall
promptly liquidate the business and administrative affairs of the Fund, except
that if the Board is unable to perform this function, a liquidator elected by
Members holding a majority of the total number of votes eligible to be cast by
all Members shall promptly liquidate the business and administrative affairs of
the Fund. Net Profit and Net Loss during the period of liquidation shall be
allocated pursuant to Article V hereof. The proceeds from liquidation shall,
subject to the Delaware Act, be distributed in the following manner:
(1) in satisfaction (whether by payment or the making of reasonable
provision for payment thereof) of the debts and liabilities of
the Fund, including the expenses of liquidation (including legal
and accounting expenses incurred in connection therewith), but
not including debt and liabilities to Members, up to and
including the date that distribution of the Fund's assets to the
Members has been completed, shall first be paid on a PRO RATA
basis;
(2) such debts, liabilities or obligations as are owing to the
Members shall be paid next in their order of seniority and on a
PRO RATA basis; and
(3) the Members shall be paid next on a PRO RATA basis the positive
balances of their respective Capital Accounts after giving effect
to all allocations to be made to such Members' Capital Accounts
for the Fiscal Period ending on the date of the distributions
under this Section 6.2(a)(3).
(b) Anything in this Section 6.2 to the contrary notwithstanding, but
subject to the priorities set forth in Section 6.2(a) above, upon dissolution of
the Fund, the Board or other liquidator may distribute ratably in kind any
assets of the Fund; PROVIDED, HOWEVER, that if any in-kind distribution is to be
made (i) the assets distributed in kind shall be valued pursuant to Section 7.3
hereof as of the actual date of their distribution and charged as so valued and
distributed against amounts to be paid under Section 6.2(a) above, and (ii) any
profit or loss attributable to property distributed in-kind shall be included in
the Net Profit or Net Loss for the Fiscal Period ending on the date of such
distribution.
________________________________________
ARTICLE VII
ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS
________________________________________
7.1 ACCOUNTING AND REPORTS.
(a) The Fund shall adopt for tax accounting purposes any accounting
method which the Board shall decide in its sole discretion is in the best
interests of the Fund. The Fund's accounts shall be maintained in U.S. currency.
(b) After the end of each taxable year, the Fund shall furnish to each
Member such information regarding the operation of the Fund and such Member's
Interest as is necessary for Members to complete Federal and state income tax or
information returns and any other tax information required by federal or state
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 7.1(c) is being made, the
Fund shall furnish to each Member a semi-annual report and an annual report
containing the information required by the 1940 Act. The Fund shall cause
financial statements contained in each annual report furnished hereunder to be
accompanied by a certificate of independent public accountants based upon an
audit performed in accordance with generally accepted accounting principles. The
Fund may furnish to each Member such other periodic reports as it deems
necessary or appropriate in its discretion.
7.2 DETERMINATIONS BY THE BOARD.
(a) All matters concerning the determination and allocation among the
Members of the amounts to be determined and allocated pursuant to Article V
hereof, including any taxes thereon and accounting procedures applicable
thereto, shall be determined by the Board (either directly or by the Manager
pursuant to delegated authority) unless specifically and expressly otherwise
provided for by the provisions of this Agreement or as required by law, and such
determinations and allocations shall be final and binding on all the Members.
(b) The Board may make such adjustments to the computation of Net
Profit or Net Loss or any components (withholding any items of income, gain,
loss or deduction) comprising any of the foregoing as it considers appropriate
to reflect fairly and accurately the financial results of the Fund and the
intended allocation thereof among the Members.
7.3 VALUATION OF ASSETS.
(a) Except as may be required by the 1940 Act, the Board shall value
or have valued any Securities or other assets and liabilities of the Fund as of
the close of business on the last day of each Fiscal Period or more frequently,
in the discretion of the Board, in accordance with such valuation procedures as
shall be established from time to time by the Board and which conform to the
requirements of the 1940 Act. In determining the value of the assets of the
Fund, no value shall be placed on the goodwill or name of the Fund, or the
office records, files, statistical data or any similar intangible assets of the
Fund not normally reflected in the Fund's accounting records, but there shall be
taken into consideration any items of income earned but not received, expenses
incurred but not yet paid, liabilities, fixed or contingent, the unamortized
portion of any organizational expenses and any other prepaid expenses to the
extent not otherwise reflected in the books of account, and the value of options
or commitments to purchase or sell Securities or commodities pursuant to
agreements entered into prior to such valuation date.
(b) The value of Securities and other assets of the Fund and the net
worth of the Fund as a whole determined pursuant to this Section 7.3 shall be
conclusive and binding on all of the Members and all parties claiming through or
under them.
________________________________________
ARTICLE VIII
MISCELLANEOUS PROVISIONS
________________________________________
8.1 AMENDMENT OF LIMITED LIABILITY COMPANY AGREEMENT.
(a) Except as otherwise provided in this Section 8.1, this Agreement
may be amended, in whole or in part, with the approval of (i) the Board
(including the vote of a majority of the Independent Directors, if required by
the 1940 Act), (ii) the Manager or (iii) a majority (as defined in the ▇▇▇▇ ▇▇▇)
of the outstanding Voting Interests of the Fund.
(b) Any amendment that would:
(1) increase the obligation of a Member to make any contribution to
the capital of the Fund;
(2) reduce the Capital Account of a Member other than in accordance
with Article V; or
(3) modify the events causing the dissolution of the Fund;
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) to tender his or her entire Interest for repurchase by the Fund.
(c) By way of example only, the Board at any time without the consent
of the Members may:
(1) restate this Agreement together with any amendments hereto which
have been duly adopted in accordance herewith to incorporate such
amendments in a single, integrated document;
(2) amend this Agreement (other than with respect to the matters set
forth in Section 8.1(b) hereof) to effect compliance with any
applicable law or regulation or to cure any ambiguity or to
correct or supplement any provision hereof which may be
inconsistent with any other provision hereof, provided that such
action does not adversely affect the rights of any Member in any
material respect; and
(3) amend this Agreement to make such changes as may be necessary or
desirable, based on advice of legal counsel to the Fund, to
assure the Fund's continuing eligibility to be classified for
U.S. Federal income tax purposes as a partnership which is not
treated as a corporation under Section 7704(a) of the Code.
(d) The Board shall give written notice of any proposed amendment to
this Agreement (other than any amendment of the type contemplated by clause (1)
of Section 8.1(a) hereof) to each Member, which notice shall set forth (i) the
text of the proposed amendment or (ii) a summary thereof and a statement that
the text thereof will be furnished to any Member upon request.
8.2 SPECIAL POWER OF ATTORNEY.
(a) Each Member hereby irrevocably makes, constitutes and appoints the
Manager and each of the Directors, acting severally, and any liquidator of the
Fund's assets appointed pursuant to Section 6.2 hereof with full power of
substitution, the true and lawful representatives and attorneys-in-fact of, and
in the name, place and stead of, such Member, with the power from time to time
to make, execute, sign, acknowledge, swear to, verify, deliver, record, file
and/or publish:
(1) any amendment to this Agreement which complies with the
provisions of this Agreement (including the provisions of Section
8.1 hereof);
(2) any amendment to the Certificate required because this Agreement
is amended or as otherwise required by the Delaware Act; and
(3) all other such instruments, documents and certificates which, in
the opinion of legal counsel to the Fund, from time to time may
be required by the laws of the United States of America, the
State of Delaware or any other jurisdiction in which the Fund
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 Fund as a limited liability company
under the Delaware Act.
(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 Fund without such Member's
consent. If an amendment to the Certificate or this Agreement or any action by
or with respect to the Fund is taken in the manner contemplated by this
Agreement, each Member agrees that, notwithstanding any objection which such
Member may assert with respect to such action, the attorneys-in-fact appointed
hereby are authorized and empowered, with full power of substitution, to
exercise the authority granted above in any manner which 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 Fund.
(c) This power-of-attorney is a special power-of-attorney and is
coupled with an interest in favor of the Manager and each of the Directors,
acting severally, and any liquidator of the Fund's assets, appointed pursuant to
Section 6.2 hereof, 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 Fund,
the Board or any liquidator shall have had notice thereof; and
(2) shall survive the delivery of a Transfer by a Member of the whole
or any portion of such Member's Interest, except that where the
transferee thereof has been approved by the Board for admission
to the Fund as a substituted Member, this power-of-attorney given
by the transferor shall survive the delivery of such assignment
for the sole purpose of enabling the Board or any liquidator to
execute, acknowledge and file any instrument necessary to effect
such substitution.
8.3 NOTICES.
Notices which may or are required to be provided under this Agreement
shall be made, if to a Member, by regular mail, hand delivery, registered or
certified mail return receipt requested, commercial courier service, telex,
telecopier or other electronic means, or, if to the Fund, by registered or
certified mail, return receipt requested, and shall be addressed to the
respective parties hereto at their addresses as set forth on the books and
records of the Fund (or to such other addresses as may be designated by any
party hereto by notice addressed to the Fund in the case of notice given to any
Member, and to each of the Members in the case of notice given to the Fund).
Notices shall be deemed to have been provided when delivered by hand, on the
date indicated as the date of receipt on a return receipt or when received if
sent by regular mail, commercial courier service, telex or telecopier. A
document that is not a notice and that is required to be provided under this
Agreement by any party to another party may be delivered by any reasonable
means.
8.4 AGREEMENT BINDING UPON SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors, assigns, executors,
trustees or other legal representatives, but the rights and obligations of the
parties hereunder may not be Transferred or delegated except as provided in this
Agreement and any attempted Transfer or delegation thereof which is not made
pursuant to the terms of this Agreement shall be void.
8.5 APPLICABILITY OF 1940 ACT AND FORM N-2.
The parties hereto acknowledge that this Agreement is not intended to,
and does not set forth the substantive provisions contained in the 1940 Act and
the Form N-2 which affect numerous aspects of the conduct of the Fund'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.
8.6 CHOICE OF LAW; ARBITRATION.
(a) Notwithstanding the place where this Agreement may be executed by
any of the parties hereto, the parties expressly agree that all the terms and
provisions hereof shall be construed under the laws of the State of Delaware,
including the Delaware Act, without regard to the conflict of law principles of
such State.
(B) EACH MEMBER AGREES TO SUBMIT ALL CONTROVERSIES ARISING BETWEEN OR
AMONG MEMBERS OR ONE OR MORE MEMBERS AND THE FUND IN CONNECTION WITH THE FUND OR
ITS BUSINESSES OR CONCERNING ANY TRANSACTION, DISPUTE OR THE CONSTRUCTION,
PERFORMANCE OR BREACH OF THIS OR ANY OTHER AGREEMENT, WHETHER ENTERED INTO PRIOR
TO, ON OR SUBSEQUENT TO THE DATE HEREOF, TO ARBITRATION IN ACCORDANCE WITH THE
PROVISIONS SET FORTH BELOW. EACH MEMBER UNDERSTANDS THAT:
(1) ARBITRATION IS FINAL AND BINDING ON THE PARTIES;
(2) THE PARTIES ARE WAIVING THEIR RIGHTS TO SEEK REMEDIES IN COURT,
INCLUDING THE RIGHT TO JURY TRIAL;
(3) PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN 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) A PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF
ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES
INDUSTRY.
(C) CONTROVERSIES SHALL BE DETERMINED BY ARBITRATION BEFORE, AND ONLY
BEFORE, AN ARBITRATION PANEL CONVENED BY THE NEW YORK STOCK EXCHANGE, INC.
("NYSE") OR THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (THE "NASD"),
TO THE FULLEST EXTENT PERMITTED BY LAW. THE PARTIES MAY ALSO SELECT ANY OTHER
NATIONAL SECURITIES EXCHANGE'S ARBITRATION FORUM UPON WHICH A PARTY IS LEGALLY
REQUIRED TO ARBITRATE THE CONTROVERSY, TO THE FULLEST EXTENT PERMITTED BY LAW.
SUCH ARBITRATION SHALL BE GOVERNED BY THE RULES OF THE ORGANIZATION CONVENING
THE PANEL, TO THE FULLEST EXTENT PERMITTED BY LAW. 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 OVER THE PARTY OR PARTIES AGAINST WHOM
SUCH AWARD IS RENDERED. 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 UNLESS AND 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. THE FORBEARANCE TO ENFORCE AN AGREEMENT
TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF ANY RIGHTS UNDER THIS AGREEMENT
EXCEPT TO THE EXTENT STATED HEREIN.
8.7 NOT FOR BENEFIT OF CREDITORS.
The provisions of this Agreement are intended only for the regulation
of relations among past, present and future Members and the Fund. This Agreement
is not intended for the benefit of non-Member creditors and no rights are
granted to non-Member creditors under this Agreement.
8.8 CONSENTS.
Any and all consents, agreements or approvals provided for or
permitted by this Agreement shall be in writing and a signed copy thereof shall
be filed and kept with the books of the Fund.
8.9 MERGER AND CONSOLIDATION.
(a) The Fund may merge or consolidate with or into one or more limited
liability companies formed under the Delaware Act or other business entities (as
defined in Section 18-209(a) of the Delaware Act) pursuant to an agreement of
merger or consolidation which 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(b) of the Delaware Act, (i) effect any amendment to this
Agreement, (ii) effect the adoption of a new limited liability company agreement
for the Fund if it is the surviving or resulting limited liability company in
the merger or consolidation, or (iii) provide that the limited liability company
agreement of any other constituent limited liability company to the merger or
consolidation (including a limited liability company formed for the purpose of
consummating the merger or consolidation) shall be the limited liability company
agreement of the surviving or resulting limited liability company.
8.10 PRONOUNS.
All pronouns shall be deemed to refer to the masculine, feminine,
neuter, singular or plural, as the identity of the person or persons, firm or
corporation may require in the context thereof.
8.11 CONFIDENTIALITY.
(a) A Member may obtain from the Fund, for any purpose reasonably
related to the Member's Interest, such information regarding the affairs of the
Fund 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.
(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 or address (whether business, residence or mailing) of any
Member (collectively, "Confidential Information") without the prior written
consent of the Board, which consent may be withheld in its sole discretion.
(c) Each Member recognizes that in the event that this Section 8.11 is
breached by any Member or any of its principals, partners, members, directors,
officers, employees or agents or any of its affiliates, including any of such
affiliates' principals, partners, members, directors, officers, employees or
agents, irreparable injury may result to the non-breaching Members and the Fund.
Accordingly, in addition to any and all other remedies at law or in equity to
which the non-breaching Members and the Fund may be entitled, such Members also
shall 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.
(d) The Fund shall have the right to keep confidential from the
Members for such period of time as it deems reasonable any information which the
Board reasonably believes to be in the nature of trade secrets or other
information the disclosure of which the Board in good faith believes is not in
the best interest of the Fund or could damage the Fund or its business or which
the Fund is required by law or by agreement with a third party to keep
confidential.
8.12 CERTIFICATION OF NON-FOREIGN STATUS.
Each Member or transferee of an Interest from a Member that is
admitted to the Fund in accordance with this Agreement shall certify, upon
admission to the Fund and at such other time thereafter as the Board may
request, whether he or she is a "United States Person" within the meaning of
Section 7701(a)(30) of the Code on forms to be provided by the Fund, and shall
notify the Fund within 30 days of any change in such Member's status. Any Member
who shall fail to provide such certification when requested to do so by the
Board may be treated as a non-United States Person for purposes of U.S. Federal
tax withholding.
8.13 SEVERABILITY.
If any provision of this Agreement is determined by a court of
competent jurisdiction not to be enforceable in the manner set forth in this
Agreement, each Member agrees that it is the intention of the Members that such
provision should be enforceable to the maximum extent possible under applicable
law. If any provisions of this Agreement are held to be invalid or
unenforceable, such invalidation or unenforceability shall not affect the
validity or enforceability of any other provision of this Agreement (or portion
thereof).
8.14 ENTIRE AGREEMENT.
This Agreement (including the Schedule attached hereto which is
incorporated herein) constitutes the entire agreement among the parties hereto
pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto. It is hereby acknowledged and agreed that the
Board, without the approval of any Member may enter into written agreements
("Other Agreements") with Members, executed contemporaneously with the admission
of such Members to the Fund, effecting the terms hereof or of any application in
order to meet certain requirements of such Members. The parties hereto agree
that any terms contained in an Other Agreement with a Member shall govern with
respect to such Member notwithstanding the provisions of this Agreement or of
any application.
8.15 DISCRETION.
To the fullest extent permitted by law, whenever in this Agreement, a
person is permitted or required to make a decision (i) in its "sole discretion"
or "discretion" or under a grant of similar authority or latitude, such person
shall be entitled to consider only such interests and factors as it desires,
including its own interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the Fund or the Members,
or (ii) in its "good faith" or under another express standard, then such person
shall act under such express standard and shall not be subject to any other or
different standards imposed by this Agreement or any other agreement
contemplated herein or by relevant provisions of law or in equity or otherwise.
8.16 COUNTERPARTS.
This Agreement may be executed in several counterparts, all of which
together shall constitute one agreement binding on all parties hereto,
notwithstanding that all the parties have not signed the same counterpart.
8.17 TAX MATTERS PARTNER. The Manager hereby is designated as the "tax
matters partner" under the Code for the Fund.
THE UNDERSIGNED ACKNOWLEDGES HAVING READ THIS AGREEMENT IN ITS
ENTIRETY BEFORE SIGNING, INCLUDING THE PRE-DISPUTE ARBITRATION CLAUSES SET FORTH
IN SECTION 8.6 ON PAGES 35-36 AND THE CONFIDENTIALITY CLAUSES SET FORTH IN
SECTION 8.11 ON PAGE 37.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ORGANIZATIONAL MEMBER:
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
MANAGER:
PW REDWOOD/SEQUOIA MANAGEMENT, L.L.C.
By: PW FUND ADVISOR, L.L.C.
By:/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Person
ADDITIONAL MEMBERS:
Each person who has signed or has had signed
on its behalf a Member Signature Page, which
shall constitute a counterpart hereof.
The undersigned understand and agree to the provisions of this Agreement
pertaining to the obligations of Directors.
/s/ E. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
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▇. ▇▇▇▇▇▇▇ Bewkes, Jr., Director
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Director
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Director
SCHEDULE I
DIRECTORS
NAME AND ADDRESS
▇. ▇▇▇▇▇▇▇ Bewkes, Jr.
c/o PaineWebber Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
c/o Columbia University
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇