Exhibit A-2
OLD MUTUAL 2100
ABSOLUTE RETURN MASTER FUND, L.L.C.
(A DELAWARE LIMITED LIABILITY COMPANY)
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LIMITED LIABILITY
COMPANY AGREEMENT
DATED AS OF OCTOBER 13, 2006
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▇/▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ LLC
RIVERVIEW PLAZA
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS........................................................4
ARTICLE II ORGANIZATION; ADMISSION OF MEMBERS................................9
2.1 Formation of Limited Liability Company.................................9
2.2 Name...................................................................9
2.3 Principal and Registered Office........................................9
2.4 Duration...............................................................9
2.5 Business of the Company................................................9
2.6 Board of Managers.....................................................10
2.7 Members...............................................................10
2.8 Organizational Member.................................................10
2.9 Both Managers and Members.............................................10
2.10Limited Liability.....................................................11
ARTICLE III MANAGEMENT......................................................11
3.1 Management and Control................................................11
3.2 Actions by the Board of Managers......................................11
3.3 Officers..............................................................12
3.4 Meetings of Members...................................................12
3.5 Custody of Assets of the Company......................................13
3.6 Other Activities of Members and Managers..............................13
3.7 Duty of Care..........................................................13
3.8 Indemnification.......................................................14
3.9 Fees, Expenses and Reimbursement......................................15
ARTICLE IV TERMINATION OF STATUS OF ADVISER AND MANAGERS;
TRANSFERS
AND REPURCHASES.....................................16
4.1 Termination of Status of the Adviser..................................16
4.2 Termination of Status of a Manager....................................16
4.3 Removal of the Managers...............................................16
4.4 Transfer of Interests of Members......................................16
4.5 Repurchase of Interests...............................................17
ARTICLE V CAPITAL...........................................................19
5.1 Contributions to Capital..............................................19
5.2 Rights of Members to Capital..........................................19
5.3 Capital Accounts......................................................19
5.4 Allocation of Net Profit and Net Loss; Allocation of Offering Costs...20
5.5 Allocation of Certain Expenditures....................................20
5.6 Reserves..............................................................20
5.7 Allocation of Organization Expenses...................................21
5.8 Tax Allocations.......................................................21
5.9 Adjustments to Take Account of Certain Events.........................22
5.10Distributions.........................................................22
5.11Withholding...........................................................22
ARTICLE VI DISSOLUTION AND LIQUIDATION......................................23
6.1 Dissolution...........................................................23
6.2 Liquidation of Assets.................................................23
ARTICLE VII ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS....................24
7.1 Accounting and Reports................................................24
7.2 Determinations by the Board of Managers...............................24
7.3 Valuation of Assets...................................................24
ARTICLE VIII MISCELLANEOUS PROVISIONS.......................................25
8.1 Amendment of Limited Liability Company Agreement......................25
8.2 Special Power of Attorney.............................................26
8.3 Notices...............................................................27
8.4 Agreement Binding Upon Successors and Assigns.........................27
8.5 Applicability of 1940 Act and Form N-2................................27
8.6 Choice of Law; Arbitration............................................27
8.7 Not for Benefit of Creditors..........................................28
8.8 Consents..............................................................28
8.9 Merger and Consolidation..............................................28
8.10Pronouns..............................................................29
8.11Confidentiality.......................................................29
8.12Certification of Non-Foreign Status...................................29
8.13Severability..........................................................30
8.14Filing of Returns.....................................................30
8.15Tax Matters Partner...................................................30
8.16Section 754 Election..................................................30
8.17Member Tax Basis......................................................30
OLD MUTUAL 2100 ABSOLUTE RETURN MASTER FUND, L.L.C.
LIMITED LIABILITY COMPANY AGREEMENT
THIS LIMITED LIABILITY COMPANY AGREEMENT of Old Mutual 2100 Absolute
Return Master Fund, L.L.C. (the "Company") is dated as of October 13, 2006,
by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and those persons hereinafter admitted as Members.
W I T N E S S E T H :
WHEREAS, the Company has heretofore been formed as a limited liability
company under the Delaware Limited Liability Company Act pursuant to an initial
Certificate of Formation (the "Certificate") dated and filed with the Secretary
of State of Delaware on April 25, 2006;
NOW, THEREFORE, for and in consideration of the foregoing and the
mutual covenants hereinafter set forth, it is hereby agreed as follows:
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ARTICLE I.
DEFINITIONS
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For purposes of this Agreement:
ADMINISTRATOR The person who provides administrative services
to the Company pursuant to an administration
agreement.
ADVISER The person who at any particular time serves as
the investment adviser to the Company pursuant
to an Investment Management Agreement.
ADVISERS ACT The Investment Advisers Act of 1940 and the
rules, regulations and orders thereunder, as
amended from time to time, or any successor law.
AFFILIATE An affiliated person, as such term is defined by
the 1940 Act, of a person.
AGREEMENT This Limited Liability Company Agreement, as
amended from time to time.
BOARD OF MANAGERS The Board of Managers established pursuant to
Section 2.6 hereof.
CAPITAL ACCOUNT With respect to each Member, the capital account
established and maintained on behalf of each
Member pursuant to Section 5.3 hereof.
CAPITAL PERCENTAGE A percentage established for each Member on
the Company's books as of each Expense
Allocation Date. The Capital Percentage of a
Member on an Expense Allocation Date shall be
determined by dividing the amount of capital
contributed to the Company by the Member
pursuant to Section 5.1 hereof by the sum of
the capital contributed to the Company by each
Member pursuant to Section 5.1 hereof on or
prior to such Expense Allocation Date. The
sum of the Capital Percentages of all Members
on each Expense Allocation Date shall equal
100%.
CERTIFICATE The Certificate of Formation of the Company and
any amendments thereto as filed with the office
of the Secretary of State of Delaware.
CLOSING DATE The first date on or as of which a Member other
than the Organizational Member is admitted
to the Company.
CODE The United States Internal Revenue Code of 1986,
as amended from time to time, or any successor
law.
COMPANY The limited liability company governed hereby,
as such limited liability company may from time
to time be constituted.
DELAWARE ACT The Delaware Limited Liability Company Act as
in effect on the date hereof and as amended
from time to time, or any successor law.
EXPENSE ALLOCATION DATE The Closing Date, and thereafter each day on or
before December 31, 2006, as of which a
contribution to the capital of the Company is
made pursuant to Section 5.1 hereof.
FISCAL PERIOD The period commencing on the Closing Date, and
thereafter each period commencing on the day
immediately following the last day of the
preceding Fiscal Period, and ending at the
close of business on the first to occur of the
following dates:
(1) the last day of a Fiscal Year;
(2) the last day of a Taxable Year;
(3) the day preceding any day as of which
a contribution to the capital of the
Company is made pursuant to Section
5.1 hereof;
(4) any day on which the Company repurchases
any Interest or portion of an Interest of
any Member; or
(5) any day (other than one specified in
clause (2) above) as of which this
Agreement provides for any amount to be
credited to or debited against the
Capital Account of any Member, other
than an amount to be credited to or
debited against the Capital Accounts of
all Members in accordance with their
respective Investment Percentages.
FISCAL YEAR The period commencing on the Closing Date and
ending on March 31, 2007, and thereafter each
period commencing on April 1 of each year and
ending on March 31 of each succeeding year (or
on the date of a final distribution pursuant
to Section 6.2 hereof), unless and until the
Board of Managers shall elect another fiscal
year for the Company.
FORM N-2 The Company's Registration Statement on Form
N-2 filed with the Securities and Exchange
Commission, as amended from time to time.
INDEPENDENT MANAGERS Those Managers who are not "interested persons,"
as such term is defined by the 1940 Act, of
the Company.
INITIAL MANAGER ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
INITIAL MEMBER Old Mutual Capital, Inc.
INTEREST The entire ownership interest in the Company
at any particular time of a Member, or other
person to whom an Interest of a Member or
portion thereof has been transferred pursuant
to Section 4.4 hereof, including the rights
and obligations of such Member or other person
under this Agreement and the Delaware Act.
INVESTMENT FUNDS Unregistered investment funds and registered
investment companies.
INVESTMENT PERCENTAGE A percentage established for each Member on
the Company's books as of the first day of
each Fiscal Period. The Investment Percentage
of a Member for a Fiscal Period shall be
determined by dividing the balance of the
Member's Capital Account as of the
commencement of such Fiscal Period by the sum
of the Capital Accounts of all of the Members
as of the commencement of such Fiscal Period.
The sum of the Investment Percentages of all
Members for each Fiscal Period shall equal
100%.
INVESTMENT MANAGEMENT A separate written agreement entered into by
AGREEMENT the Company pursuant to which the Adviser
provides Management Services to the Company.
MANAGEMENT SERVICES Such investment advisory and other services as
the Adviser is required to provide to the
Company pursuant to the Investment Management
Agreement as contemplated by Section 3.9(a)
hereof.
MANAGER An individual designated as a manager of the
Company pursuant to the provisions of Section
2.6 hereof and who serves on the Board of
Managers of the Company.
MEMBER Any person who shall have been admitted to the
Company as a member (including any Manager in
such person's capacity as a member of the
Company but excluding any Manager in such
person's capacity as a Manager of the Company)
until the Company repurchases the entire
Interest of such person as a member pursuant
to Section 4.5 hereof or a substituted Member
or Members are admitted with respect to any
such person's entire Interest as a member
pursuant to Section 4.4 hereof; such term
includes the Adviser to the extent the Adviser
makes a capital contribution to the Company
and shall have been admitted to the Company as
a member.
NET ASSETS The total value of all assets of the Company,
less an amount equal to all accrued debts,
liabilities and obligations of the Company,
calculated before giving effect to any
repurchases of Interests to be effected as of
the date such value is determined.
NET PROFIT OR NET LOSS The amount by which the Net Assets as of the
close of business on the last day of a Fiscal
Period exceed (in the case of Net Profit) or
are less than (in the case of Net Loss) the
Net Assets as of the commencement of the same
Fiscal Period (or, with respect to the initial
Fiscal Period of the Company, as of the close
of business on the Closing Date), such amount
to be adjusted to exclude any items to be
allocated among the Capital Accounts of the
Members on a basis that is not in accordance
with the respective Investment Percentages of
all Members as of the commencement of such
Fiscal Period pursuant to Sections 5.5 and 5.6
hereof.
1940 ACT The Investment Company Act of 1940, as
amended, and the rules, regulations and orders
thereunder, as amended from time to time, or
any successor law.
OFFICER An individual designated as an officer of the
Company pursuant to the provisions of Section
3.3 hereof and who serves as an officer of the
Company.
ORGANIZATION EXPENSES The expenses incurred by the Company in
connection with its formation, its initial
registration as an investment company under the
1940 Act, and the initial offering of Interests.
ORGANIZATIONAL MEMBER ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PORTFOLIO FUNDS The private investment funds, joint ventures,
investment companies and other similar
investment vehicles into which the Company
invests substantially all of its assets.
PORTFOLIO MANAGERS A select group of portfolio managers who manage
the Portfolio Funds.
SECURITIES Securities (including, without limitation,
equities, debt obligations, options, and other
"securities" as that term is defined in
Section 2(a)(36) of the ▇▇▇▇ ▇▇▇) and any
contracts for forward or future delivery of
any security, debt obligation or currency, or
commodity, all types of derivative instruments
and financial instruments and any contracts
based on any index or group of securities,
debt obligations or currencies, or
commodities, and any options thereon, as well
as investments in registered investment
companies and private investment funds.
TAXABLE YEAR The 12-month period ending December 31 of each
year.
TRANSFER The assignment, transfer, sale, encumbrance,
pledge or other disposition of all or any
portion of an Interest, including any right to
receive any allocations and distributions
attributable to an Interest.
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ARTICLE II.
ORGANIZATION; ADMISSION OF MEMBERS
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2.1. FORMATION OF LIMITED LIABILITY COMPANY.
The Board of Managers shall execute and file in accordance with the
Delaware Act any amendment to the Certificate and shall execute and file with
applicable governmental authorities any other instruments, documents and
certificates that, in the opinion of the Company's legal counsel, may from time
to time be required by the laws of the United States of America, the State of
Delaware or any other jurisdiction in which the Company shall determine to do
business, or any political subdivision or agency thereof, or that such legal
counsel may deem necessary or appropriate to effectuate, implement and continue
the valid existence and business of the Company.
2.2. NAME.
The name of the Company shall be "Old Mutual 2100 Absolute Return
Master Fund, L.L.C." or such other name as the Board of Managers may hereafter
adopt upon (i) causing an appropriate amendment to the Certificate to be
filed in accordance with the Delaware Act and (ii) taking such other actions
as may be required by law.
2.3. PRINCIPAL AND REGISTERED OFFICE.
The Company shall have its principal office at c/o ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇ Plaza, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
or at such other place designated from time to time by the Board of Managers.
The Company shall have its registered office in Delaware at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and shall have National Corporate
Research, Ltd. as its registered agent for service of process in Delaware,
unless and until a different registered office or agent is designated by the
Board of Managers.
2.4. DURATION.
The term of the Company commenced on the filing of the Certificate
with the Secretary of State of Delaware and shall continue until the Company is
dissolved pursuant to Section 6.1 hereof.
2.5. BUSINESS OF THE COMPANY.
(a) The business of the Company is to purchase, sell (including short
sales), invest and trade in Securities, on margin or otherwise, and to engage in
any financial or derivative transactions relating thereto or otherwise. The
Company may execute, deliver and perform all contracts, agreements, purchase
orders and other undertakings and engage in all activities and transactions as
may in the opinion of the Board of Managers be necessary or advisable to carry
out its objective or business. The Company shall be operated subject to any
applicable restrictions of the Bank Holding Company Act of 1956, as amended.
(b) The Company shall operate as a closed-end, non-diversified,
management investment company in accordance with the 1940 Act and subject to any
fundamental policies and investment restrictions as may be adopted by the Board
of Managers and in accordance with the 1940 Act.
2.6. BOARD OF MANAGERS.
(a) Prior to the Closing Date, the Initial Manager may designate such
persons who shall agree to be bound by all of the terms of this Agreement to
serve as the Managers on the Board of Managers, subject to the election of such
persons prior to the Closing Date by the Initial Member. By signing this
Agreement or signing an investor application or certification in connection with
the purchase of an Interest, a Member admitted on the Closing Date shall be
deemed to have voted for the election of each of the Managers so designated.
After the Closing Date, the Board of Managers may, subject to the provisions of
paragraphs (a) and (b) of this Section 2.6 with respect to the number of and
vacancies in the position of Manager and the provisions of Section 3.4 hereof
with respect to the election of Managers to the Board of Managers by Members,
designate any person who shall agree to be bound by all of the terms of this
Agreement as a Manager. The names and mailing addresses of the Managers shall be
set forth in the books and records of the Company. The number of Managers shall
be fixed from time to time by the Board of Managers.
(b) Each Manager shall serve on the Board of Managers for the duration
of the term of the Company, unless his or her status as a Manager shall be
sooner terminated pursuant to Section 4.2 hereof. In the event of any vacancy in
the position of Manager, the remaining Managers may appoint an individual to
serve in such capacity; so long as immediately after such appointment at least
two-thirds (2/3) of the Managers then serving would have been elected by the
Members. The Board of Managers may call a meeting of Members to fill any vacancy
in the position of Manager, and shall do so within 60 days after any date on
which Managers who were elected by the Members cease to constitute a majority of
the Managers then serving on the Board of Managers.
(c) In the event that no Manager remains to continue the business of
the Company, the Adviser shall promptly call a meeting of the Members, to be
held within 60 days after the date on which the last Manager ceased to act in
that capacity, for the purpose of determining whether to continue the business
of the Company and, if the business shall be continued, of electing Managers to
the Board of Managers. If the Members shall determine at such meeting not to
continue the business of the Company or if the required number of Managers is
not elected within 60 days after the date on which the last Manager ceased to
act in that capacity, then the Company shall be dissolved pursuant to Section
6.1 hereof and the assets of the Company shall be liquidated and distributed
pursuant to Section 6.2 hereof.
2.7. MEMBERS.
The Board of Managers may admit one or more Members generally at the
beginning of each month; PROVIDED, HOWEVER, that the Company may, in the
discretion of the Board of Managers, admit Members more or less frequently.
Subject to the foregoing terms, Members may be admitted to the Company subject
to the condition that each such Member shall execute an appropriate signature
page of this Agreement or of the Company's investor certification pursuant to
which such Member agrees to be bound by all the terms and provisions of this
Agreement. The Board of Managers may in its absolute discretion reject any
purchase of an Interest. The admission of any person as a Member shall be
effective upon the revision of the books and records of the Company to reflect
the name and the contribution to the capital of the Company of such additional
Member.
2.8. ORGANIZATIONAL MEMBER.
Upon the admission of any Member, the Organizational Member shall
withdraw from the Company as the Organizational Member and shall be entitled to
the return of his or her Capital Contribution, if any, without interest or
deduction.
2.9. BOTH MANAGERS AND MEMBERS.
A Member may at the same time be a Manager and a Member, in which
event such Member's rights and obligations in each capacity shall be determined
separately in accordance with the terms and provisions of this Agreement or as
provided in the Delaware Act.
2.10. LIMITED LIABILITY.
Except as provided under applicable law, a Member shall not be liable
for the Company's debts, obligations and liabilities in any amount in excess of
the capital account balance of such Member, plus such Member's share of
undistributed profits and assets. Except as provided under applicable law, a
Manager shall not be liable for the Company's debts, obligations and
liabilities.
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ARTICLE III
MANAGEMENT
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3.1. MANAGEMENT AND CONTROL.
(a) Management and control of the business of the Company shall be
vested in the Board of Managers, which shall have the right, power and
authority, on behalf of the Company and in its name, to exercise all rights,
powers and authority of Managers under the Delaware Act and to do all things
necessary and proper to carry out the objective and business of the Company and
their duties hereunder. No Manager shall have the authority individually to act
on behalf of or to bind the Company except within the scope of such Manager's
authority as delegated by the Board of Managers. The parties hereto intend that,
except to the extent otherwise expressly provided herein, (i) each Manager shall
be vested with the same powers, authority and responsibilities on behalf of the
Company as are customarily vested in each director of a Delaware corporation and
(ii) each Independent Manager shall be vested with the same powers, authority
and responsibilities on behalf of the Company as are customarily vested in each
director of a closed-end management investment company registered under the 1940
Act that is organized as a Delaware corporation who is not an "interested
person," as such term is defined by the 1940 Act, of such company. During any
period in which the Company shall have no Managers, the Adviser shall continue
to serve as the investment adviser of the Company and to provide the Management
Services to the Company.
(b) Each Member agrees not to treat, on his personal income tax return
or in any claim for a tax refund, any item of income, gain, loss, deduction or
credit in a manner inconsistent with the treatment of such item by the Company.
The Board of Managers shall have the exclusive authority and discretion to make
any elections required or permitted to be made by the Company under any
provisions of the Code or any other revenue laws.
(c) Members, in their capacity as Members, shall have no right to
participate in and shall take no part in the management or control of the
Company's business and shall have no right, power or authority to act for or
bind the Company. Members shall have the right to vote on any matters only as
provided in this Agreement or on any matters that require the approval of the
holders of voting securities under the 1940 Act or as otherwise required in the
Delaware Act.
(d) The Board of Managers may delegate to any other person any rights,
power and authority vested by this Agreement in the Board of Managers to the
extent permissible under applicable law, and may appoint persons to serve as
officers of the Company, with such titles and authority as may be determined by
the Board of Managers consistent with applicable law.
3.2. ACTIONS BY THE BOARD OF MANAGERS.
(a) Unless provided otherwise in this Agreement, the Board of Managers
shall act only: (i) by the affirmative vote of a majority of the Managers
(including the vote of a majority of the Independent Managers if required by the
▇▇▇▇ ▇▇▇) present at a meeting duly called at which a quorum of the Managers
shall be present (in person or, if in person attendance is not required by the
1940 Act, by telephone) or (ii) by unanimous written consent of all of the
Managers without a meeting, if permissible under the ▇▇▇▇ ▇▇▇.
(b) The Board of Managers may designate from time to time a Principal
Manager who shall preside at all meetings of the Board of Managers. If
applicable provisions of the 1940 Act so require, only an Independent Manager
shall serve as the Principal Manager. Meetings of the Board of Managers may be
called by the Principal Manager or by any two Managers, and may be held on such
date and at such time and place as the Board of Managers shall determine. Each
Manager shall be entitled to receive written notice of the date, time and place
of such meeting within a reasonable time in advance of the meeting. Except as
otherwise required by the 1940 Act, notice need not be given to any Manager who
shall attend a meeting without objecting to the lack of notice or who shall
execute a written waiver of notice with respect to the meeting. Managers may
attend and participate in any meeting by telephone except where in person
attendance at a meeting is required by the 1940 Act. A majority of the Managers
shall constitute a quorum at any meeting.
3.3. OFFICERS.
(a) The executive Officers of the Company may include a President, a
Treasurer, a Secretary, a Chief Financial Officer and a Chief Compliance
Officer. If the Board of Managers has designated a Principal Manager pursuant to
Section 3.2(b) hereof, then the Principal Manager shall also be an executive
Officer. The Board of Managers may elect one or more Vice-Presidents, and each
such Vice-President shall be an executive Officer. The President shall be the
chief executive officer of the Company. The Principal Manager, if there be one,
shall be elected from among the persons serving as Managers, but no other
Officer need be a Manager. The Board of Managers may also elect, or may delegate
to the President authority to appoint, remove, or fix the duties, compensation
or terms of office of, one or more other Officers as the Board of Managers shall
at any time and from time to time deem to be advisable. Any two or more
positions of Officer, except those of President and Vice-President, may be held
by the same person. Unless there are no other officers at the time of acting, a
person holding more than one office may not act in more than one capacity to
execute, acknowledge or verify on behalf of the Company an instrument required
by law to be executed, acknowledged and verified by more than one Officer.
(b) Each Officer shall hold office until his successor is elected or
appointed or until his earlier displacement from office by resignation, removal
or otherwise; provided, that if the term of office of any Officer shall have
been fixed by the Board of Managers, or by the President acting under authority
delegated by the Board of Managers, such Officer shall cease to hold such office
no later than the date of expiration of such term, regardless of whether any
other person shall have been elected or appointed to succeed him. Any Officer
may resign at any time by written notice to the Company. Any Officer may be
removed at any time by the Board of Managers or by the President acting under
authority delegated by the Board of Managers if in its or his judgment the best
interest of the Company would be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an Officer shall not of itself create contract rights
between the Company and such Officer.
(c) If the office of any Officer becomes vacant for any reason, the
vacancy may be filled by the Board of Managers or by the President acting under
authority delegated by the Board of Managers. Each Officer elected or appointed
to fill a vacancy shall hold office for the balance of the term for which his
predecessor was elected or appointed.
(d) All Officers as between themselves and the Company shall have such
powers, perform such duties and be subject to such restrictions, if any, in the
management of the Company as may be provided in this Agreement or, to the extent
not so provided, as may be prescribed by the Board of Managers or by the
President acting under authority delegated by the Board of Managers.
3.4. MEETINGS OF MEMBERS.
(a) Actions requiring the vote of the Members may be taken at any duly
constituted meeting of the Members at which a quorum is present. Meetings of the
Members may be called by the Board of Managers or by Members holding 25% or more
of the total number of votes eligible to be cast by all Members, and may be held
at such time, date and place as the Board of Managers shall determine. The Board
of Managers shall arrange to provide written notice of the meeting, stating the
date, time and place of the meeting and the record date therefor, to
each Member entitled to vote at the meeting within a reasonable time prior
thereto. Failure to receive notice of a meeting on the part of any Member shall
not affect the validity of any act or proceeding of the meeting, so long as a
quorum shall be present at the meeting, except as otherwise required by
applicable law. Only matters set forth in the notice of a meeting, and matters
incidental thereto, may be voted on by the Members at a meeting. The presence in
person or by proxy of Members holding a majority of the total number of votes
eligible to be cast by all Members as of the record date shall constitute a
quorum at any meeting. In the absence of a quorum, a meeting of the Members may
be adjourned by action of a majority of the Members present in person or by
proxy without additional notice to the Members. Except as otherwise required by
any provision of this Agreement or of the 1940 Act, (i) those candidates
receiving a plurality of the votes cast at any meeting of Members shall be
elected as Managers and (ii) all other actions of the Members taken at a meeting
shall require the affirmative vote of Members holding a majority of the total
number of votes at such meeting.
(b) Each Member shall be entitled to cast at any meeting of Members a
number of votes equivalent to such Member's Investment Percentage as of the
record date for such meeting. The Board of Managers shall establish a record
date not less than 10 days nor more than 90 days prior to the date of any
meeting of Members to determine eligibility to vote at such meeting and the
number of votes that each Member will be entitled to cast at the meeting, and
shall maintain for each such record date a list setting forth the name of each
Member and the number of votes that each Member will be entitled to cast at the
meeting.
(c) A Member may vote at any meeting of Members by a proxy properly
executed in writing by the Member and filed with the Company before or at the
time of the meeting. A proxy may be suspended or revoked, as the case may be, by
the Member executing the proxy by a later writing delivered to the Company at
any time prior to exercise of the proxy or if the Member executing the proxy
shall be present at the meeting and decide to vote in person. Any action of the
Members that is permitted to be taken at a meeting of the Members may be taken
without a meeting if consents in writing, setting forth the action taken, are
signed by Members holding a majority of the total number of votes eligible to be
cast or such greater percentage as may be required in order to approve such
action.
3.5. CUSTODY OF ASSETS OF THE COMPANY.
The physical possession of all funds, Securities and other properties
of the Company shall at all times be held, controlled and administered by one or
more custodians retained by the Company in accordance with the requirements of
the 1940 Act and the rules thereunder.
3.6. OTHER ACTIVITIES OF MEMBERS AND MANAGERS.
(a) The Managers shall not be required to devote all of their time to
the affairs of the Company, but shall devote such time as may reasonably be
required to perform their obligations under this Agreement.
(b) Any Member or Manager, and any Affiliate of any Member or Manager,
may engage in or possess an interest in other business ventures or commercial
dealings of every kind and description, independently or with others, including,
but not limited to, acquisition and disposition of Securities, provision of
investment advisory or brokerage services, serving as directors, officers,
employees, advisers or agents of other companies, partners or general partners
of any partnership, members or managing members of any limited liability
company, or trustees of any trust, or entering into any other commercial
arrangements. No Member or Manager shall have any rights in or to such
activities of any other Member or Manager, or any profits derived therefrom.
3.7. DUTY OF CARE.
(a) A Manager shall not be liable to the Company or to any of its
Members for any loss or damage occasioned by any act or omission in the
performance of his or her duties, or otherwise in his or her capacity as a
Manager, unless it shall be determined by final judicial decision on the merits
from which there is no further
right to appeal that such loss is due to an act or omission of such Manager
constituting willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the performance of his or her duties to the
Company.
(b) Members not in breach of any obligation hereunder or under any
agreement pursuant to which the Member purchased an Interest shall be liable to
the Company, any Member or third parties only as provided under the Delaware
Act.
3.8. INDEMNIFICATION.
(a) To the fullest extent permitted by law, the Company shall, subject
to Section 3.8(b) hereof, indemnify each Manager (including for this purpose his
or her respective executors, heirs, assigns, successors or other legal
representatives), against all losses, claims, damages, liabilities, costs and
expenses, including, but not limited to, amounts paid in satisfaction of
judgments, in compromise, or as fines or penalties, and reasonable counsel fees,
incurred in connection with the defense or disposition of any action, suit,
investigation or other proceeding, whether civil or criminal, before any
judicial, arbitral, administrative or legislative body, in which such indemnitee
may be or may have been involved as a party or otherwise, or with which such
indemnitee may be or may have been threatened, while in office or thereafter, by
reason of being or having been a Manager of the Company or the past or present
performance of services to the Company by such indemnitee, except to the extent
such loss, claim, damage, liability, cost or expense shall have been finally
determined in a decision on the merits in any such action, suit, investigation
or other proceeding to have been incurred or suffered by such indemnitee by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of such indemnitee's office. The
rights of indemnification provided under this Section 3.8 shall not be construed
so as to provide for indemnification of a Manager for any liability (including
liability under federal securities laws which, under certain circumstances,
impose liability even on persons that act in good faith) to the extent (but only
to the extent) that such indemnification would be in violation of applicable
law, but shall be construed so as to effectuate the applicable provisions of
this Section 3.8 to the fullest extent permitted by law.
(b) Expenses, including reasonable counsel fees, so incurred by any
such indemnitee (but excluding amounts paid in satisfaction of judgments, in
compromise, or as fines or penalties), may be paid from time to time by the
Company in advance of the final disposition of any such action, suit,
investigation or proceeding upon receipt of an undertaking by or on behalf of
such indemnitee to repay to the Company amounts so paid if it shall ultimately
be determined that indemnification of such expenses is not authorized under
Section 3.8(a) hereof; PROVIDED, HOWEVER, that (i) such indemnitee shall provide
security for such undertaking, (ii) the Company shall be insured by or on behalf
of such indemnitee against losses arising by reason of such indemnitee's failure
to fulfill such undertaking, or (iii) a majority of the Managers (excluding any
Manager who is either seeking advancement of expenses hereunder or is or has
been a party to any other action, suit, investigation or proceeding involving
claims similar to those involved in the action, suit, investigation or
proceeding giving rise to a claim for advancement of expenses hereunder) or
independent legal counsel in a written opinion shall determine based on a review
of readily available facts (as opposed to a full trial-type inquiry) that there
is reason to believe such indemnitee ultimately will be entitled to
indemnification.
(c) As to the disposition of any action, suit, investigation or
proceeding (whether by a compromise payment, pursuant to a consent decree or
otherwise) without an adjudication or a decision on the merits by a court, or by
any other body before which the proceeding shall have been brought, that an
indemnitee is liable to the Company or its Members by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such indemnitee's office, indemnification shall be
provided pursuant to Section 3.8(a) hereof if (i) approved as in the best
interests of the Company by a majority of the Managers (excluding any Manager
who is either seeking indemnification hereunder or is or has been a party to any
other action, suit, investigation or proceeding involving claims similar to
those involved in the action, suit, investigation or proceeding giving rise to a
claim for indemnification hereunder) upon a determination based upon a review of
readily available facts (as opposed to a full trial-type inquiry) that such
indemnitee acted in good faith and in the reasonable belief that such actions
were in the best interests of the Company and that such indemnitee is not liable
to the Company or its Members by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of such
indemnitee's office, or (ii) the Board of Managers secures a written opinion of
independent legal counsel based upon a review of readily available facts (as
opposed to a full trial-type inquiry) to the effect that such
indemnification would not protect such indemnitee against any liability to the
Company or its Members to which such indemnitee would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of such indemnitee's office.
(d) Any indemnification or advancement of expenses made pursuant to
this Section 3.8 shall not prevent the recovery from any indemnitee of any such
amount if such indemnitee subsequently shall be determined in a decision on the
merits in any action, suit, investigation or proceeding involving the liability
or expense that gave rise to such indemnification or advancement of expenses to
be liable to the Company or its Members by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of such indemnitee's office. In (i) any suit brought by a Manager (or
other person entitled to indemnification hereunder) to enforce a right to
indemnification under this Section 3.8 it shall be a defense that, and (ii) in
any suit in the name of the Company to recover any indemnification or
advancement of expenses made pursuant to this Section 3.8 the Company shall be
entitled to recover such expenses upon a final adjudication that, the Manager or
other person claiming a right to indemnification under this Section 3.8 has not
met the applicable standard of conduct set forth in this Section 3.8. In any
such suit brought to enforce a right to indemnification or to recover any
indemnification or advancement of expenses made pursuant to this Section 3.8,
the burden of proving that the Manager or other person claiming a right to
indemnification is not entitled to be indemnified, or to any indemnification or
advancement of expenses, under this Section 3.8 shall be on the Company (or any
Member acting derivatively or otherwise on behalf of the Company or its
Members).
(e) An indemnitee may not satisfy any right of indemnification or
advancement of expenses granted in this Section 3.8 or to which such indemnitee
may otherwise be entitled except out of the assets of the Company, and no Member
shall be personally liable with respect to any such claim for indemnification or
advancement of expenses.
(f) The rights of indemnification provided hereunder shall not be
exclusive of or affect any other rights to which any person may be entitled by
contract or otherwise under law. Nothing contained in this Section 3.8 shall
affect the power of the Company to purchase and maintain liability insurance on
behalf of any Manager or other person.
3.9. FEES, EXPENSES AND REIMBURSEMENT.
(a) So long as the Adviser provides Management Services to the
Company, it is entitled to receive fees for such services as may be agreed to by
the Adviser and the Company pursuant to the Investment Management Agreement.
(b) The Board of Managers may cause the Company to compensate each
Manager who is not an officer or employee of the Adviser (or of any affiliate of
the Adviser) for his or her services as such and each such Manager shall be
reimbursed by the Company for travel expenses incurred by him in performing his
duties under this Agreement.
(c) The Company shall bear all of its own costs and expenses incurred
in its business and operations, other than those specifically required to be
borne by the Adviser or another party pursuant to the Investment Management
Agreement or another agreement with the Company. Unless otherwise required by an
agreement between the Company and the Adviser, the Adviser shall be entitled to
reimbursement from the Company for any expenses that it pays on behalf of the
Company. Costs and expenses to be borne by the Company include, but are not
limited to, the following: (i) all costs and expenses related to investment
expenses; (ii) any non-investment related interest expense; (iii) fees and
disbursements of any attorneys and accountants engaged on behalf of the Company;
(iv) entity level taxes; (v) audit and tax preparation expenses; (vi)
administrative expenses and fees; custody and escrow fees and expenses; (vii)
the costs of an errors and omissions/directors and officers liability insurance
and a fidelity bond; (viii) fees and travel-related expenses of Managers who are
not employees of the Adviser or any Affiliate of the Adviser; (ix)
organizational and offering expenses; (x) all costs and expenses associated with
background checks on Managers; (xi) all costs and expenses associated with
retaining independent third parties to provide risk management services to the
Company; (xii) any investment management fees
and marketing and Member servicing fees; (xiii) any extraordinary expenses; and
such other expenses as may be approved from time to time by the Board of
Managers.
(d) Subject to such limitations as may be imposed by the 1940 Act or
other applicable laws, from time to time the Company may, alone or in
conjunction with the Adviser, any Affiliate of the Adviser or other registered
or unregistered investment funds or other accounts for which the Adviser or any
Affiliate of the Adviser acts as general partner or investment adviser, purchase
insurance in such amounts, from such insurers and on such terms as the Board of
Managers shall determine.
---------------------------------
ARTICLE IV.
TERMINATION OF STATUS OF ADVISER AND
MANAGERS; TRANSFERS AND REPURCHASES
---------------------------------
4.1. TERMINATION OF STATUS OF THE ADVISER.
The status of the Adviser shall terminate if the Investment Management
Agreement with the Adviser terminates and the Company does not enter into a new
Investment Management Agreement with the Adviser, effective as of the date of
such termination.
4.2. TERMINATION OF STATUS OF A MANAGER.
The status of a Manager shall terminate if the Manager (i) shall die;
(ii) shall be adjudicated incompetent; (iii) shall voluntarily withdraw as a
Manager (upon not less than 90 days' prior written notice to the other
Managers); (iv) shall be removed; (v) shall be certified by a physician to be
mentally or physically unable to perform his duties hereunder; (vi) shall be
declared bankrupt by a court with appropriate jurisdiction, file a petition
commencing a voluntary case under any bankruptcy law or make an assignment for
the benefit of creditors; (vii) shall have a receiver appointed to administer
the property or affairs of such Manager; or (viii) shall otherwise cease to be a
Manager of the Company under the Delaware Act.
4.3. REMOVAL OF THE MANAGERS.
Any Manager may be removed either by (a) the vote or written consent
of at least two-thirds (2/3) of the Managers not subject to the removal vote or
(b) the vote or written consent of Members holding not less than two-thirds
(2/3) of the total number of votes eligible to be cast by all Members.
4.4. TRANSFER OF INTERESTS OF MEMBERS.
(a) An Interest of a Member may be Transferred only (i) by operation
of law pursuant to the death, divorce, bankruptcy, insolvency, dissolution or
adjudication of incompetency of such Member or (ii) with the written consent of
the Board of Managers (which may be withheld in its sole discretion); PROVIDED,
HOWEVER, that the Board of Managers may not consent to any Transfer other than a
Transfer (i) in which the tax basis of the Interest in the hands of the
transferee is determined, in whole or in part, by reference to its tax basis in
the hands of the transferor, (ii) to members of the Member's immediate family
(brothers, sisters, spouse, parents and children), (iii) as a distribution from
a qualified retirement plan or an individual retirement account, or (iv) a
Transfer to which the Board of Managers may consent pursuant to the following
sentence. The Board of Managers may consent to other pledges, transfers, or
assignments under such other circumstances and conditions as it, in its sole
discretion, deems appropriate; PROVIDED, HOWEVER, that prior to any such pledge,
transfer, or assignment, the Board of Managers shall consult with counsel to the
Company to ensure that such pledge, transfer, or assignment will not cause the
Company to be treated as a "publicly traded partnership" taxable as a
corporation. In no event, however, will any transferee or assignee be
admitted as a Member without the consent of the Board of Managers which may be
withheld in its sole discretion. Any pledge, transfer, or assignment not made in
accordance with this Section 4.4 shall be void.
(b) The Board of Managers may not consent to a Transfer of an Interest
or a portion thereof of a Member unless: (i) the person to whom such Interest is
Transferred is a person whom the Company believes is an accredited investor, as
such term is defined in Regulation D under the Securities Act of 1933 or any
successor thereto; and (ii) the entire Interest of the Member is Transferred to
a single transferee or, after the Transfer of a portion of an Interest, the
balance of the Capital Account of each of the transferee and transferor is not
less than $50,000 (or $25,000 in the case of Members who are employees of the
Adviser or distributor of the Company and their affiliates, and members of their
immediate families, and in the sole discretion of the Adviser, as applicable,
Managers, attorneys and other people engaged on behalf of the Company and
members of their immediate families), or such lesser amount as may be
established by the Board of Managers. Any transferee that acquires an Interest
or portion thereof by operation of law as the result of the death, divorce,
bankruptcy, insolvency, dissolution or adjudication of incompetency of a Member
or otherwise, shall be entitled to the allocations and distributions allocable
to the Interest or portion thereof so acquired and to Transfer such Interest or
portion thereof 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 a portion
thereof with the approval of the Board of Managers, the Board of Managers shall
promptly take all necessary actions so that each transferee to whom such
Interest or portion thereof is transferred is admitted to the Company as a
Member. Each Member effecting a Transfer and each transferee agree to pay all
expenses, including attorneys' and accountants' fees, incurred by the Company in
connection with such Transfer.
(c) Each Member shall indemnify and hold harmless the Company, the
Managers, the Adviser, each other Member and any Affiliate of the foregoing
against all losses, claims, damages, liabilities, costs and expenses (including
legal or other expenses incurred in investigating or defending against any such
losses, claims, damages, liabilities, costs and expenses or any judgments, fines
and amounts paid in settlement), joint or several, to which such persons may
become subject by reason of or arising from (i) any Transfer made by such Member
in violation of this Section 4.4 and (ii) any misrepresentation by such Member
in connection with any such Transfer.
4.5. 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 require
the Company to repurchase that Interest or portion thereof. The Board of
Managers, in its sole discretion and on such terms and conditions as it may
determine, may cause the Company to repurchase Interests or portions thereof
pursuant to written tenders. However, the Company shall not offer to repurchase
Interests on more than four occasions during any one Fiscal Year; provided that
offers made more than semi-annually in any taxable year shall only be accepted
if Members give at least 65 days' notice of their acceptance in any tax year,
unless it has consulted with counsel to the Company and determined that more
frequent offers would not cause any adverse tax consequences to the Company or
the Members. In determining whether to cause the Company to repurchase Interests
or portions thereof pursuant to written tenders, the Board of Managers shall
consider, among other things, the recommendation of the Adviser.
The Board of Managers shall cause the Company to repurchase Interests
or portions thereof pursuant to written tenders only on terms determined by the
Board of Managers to be fair to the Company and to all Members (including
persons holding Interests acquired from Members), as applicable.
(b) The Adviser or its Affiliate may tender its Interest or a portion
thereof as a Member, if any, under Section 4.5(a) hereof.
(c) The Board of Managers may cause the Company to repurchase an
Interest or portion thereof of a Member or any person acquiring an Interest or
portion thereof from or through a Member in the event that the Board of Managers
determines or has reason to believe that:
(1) such an Interest or portion thereof has been
transferred in violation of Section 4.4 hereof, or such
an Interest or portion thereof has vested in any person
by operation of law as the result of the death,
divorce, bankruptcy, insolvency, dissolution or
adjudication of incompetency of a Member;
(2) ownership of such an Interest by a Member or other
person will cause the Company to be in violation of, or
subject the Company to additional registration or
regulation under, the securities, commodities or other
laws of the United States or any other relevant
jurisdiction;
(3) such Member's continued participation in the Company
may cause the Company to be classified as a "publicly
traded partnership" within the meaning of Section 7704
of the Code and the Treasury Regulations thereunder; or
(4) any of the representations and warranties made by a
Member in connection with the acquisition of an
Interest or portion thereof was not true when made or
has ceased to be true.
(d) Repurchases of Interests or portions thereof by the Company
shall be payable promptly after the date of each such repurchase or, in the case
of an offer by the Company to repurchase Interests, promptly after the
expiration date of such repurchase offer in accordance with the terms of such
offer. Payment of the purchase price for an Interest (or portion thereof) shall
consist of: (i) cash or a promissory note, which need not bear interest, in an
amount equal to such percentage, as may be determined by the Board of Managers,
of the estimated unaudited net asset value of the Interest (or portion thereof)
repurchased by the Company determined as of the date of such repurchase (the
"Initial Payment"); and (ii) if determined to be appropriate by the Board of
Managers or if the Initial Payment is less than 100% of the estimated unaudited
net asset value, a promissory note entitling the holder thereof to a contingent
payment equal to the excess, if any, of (x) the net asset value of the Interest
(or portion thereof) repurchased by the Company as of the date of such
repurchase, determined based on the audited financial statements of the Company
for the Fiscal Year in which such repurchase was effective, over (y) the Initial
Payment. Notwithstanding anything in the foregoing to the contrary, the Board of
Managers, in its discretion, may pay any portion of the repurchase price in
Securities (or any combination of Securities and cash) having a value,
determined as of the date of repurchase, equal to the amount to be repurchased.
Any promissory note given to satisfy the Initial Payment shall be due and
payable not more than 45 days after the date of repurchase or, if the Company
has requested withdrawal of its capital from any Investment Funds in order to
fund the repurchase of Interests, 10 business days after the Company has
received at least 90% of the aggregate amount withdrawn by the Company from such
Investment Funds.
(e) A Member may at any time submit to the Company a written
request that the Company repurchase the entire Interest of such Member, as
contemplated by Section 6.1(3) hereof. Any such request shall be sent to the
Company by registered or certified mail, return receipt requested, and shall be
deemed valid upon receipt by the Member of a letter from the Company
acknowledging its receipt of the request. The Company shall send such letter to
the Member promptly upon its receipt of the Member's request.
(f) Subject to the approval of the Board of Managers and
compliance with the 1940 Act, the Company may impose a fee or charge in
connection with repurchases of Interests, including a fee or charge applicable
to repurchases of Interests (or portions thereof) effected prior to the
expiration of a specified period subsequent to a Member's admission to the
Company.
------------------------------
ARTICLE V.
CAPITAL
-----------------------------
5.1. CONTRIBUTIONS TO CAPITAL.
(a) The minimum initial contribution of each Member to the
capital of the Company shall be such amount as the Board of Managers, in its
discretion, may determine from time to time. The amount of the initial
contribution of each Member shall be recorded on the books and records of the
Company upon acceptance as a contribution to the capital of the Company. The
Managers shall not be entitled to make voluntary contributions of capital to the
Company as Managers of the Company, but may make voluntary contributions to the
capital of the Company as Members. The Adviser may make voluntary contributions
to the capital of the Company as a Member.
(b) Members may make additional contributions to the capital of
the Company, effective as of such times as the Board of Managers in its
discretion may permit, subject to Section 2.7 hereof, but no Member shall be
obligated to make any additional contribution to the capital of the Company
except to the extent provided in Section 5.6 hereof. The minimum additional
capital contribution of a Member to the capital of the Company shall be such
amount as the Board of Managers, in its sole discretion, may determine from time
to time.
(c) Except as otherwise permitted by the Board of Managers,
initial and any additional contributions to the capital of the Company by any
Member shall be payable in cash or readily available funds on or before the date
of the proposed contribution.
5.2. RIGHTS OF MEMBERS TO CAPITAL.
No Member shall be entitled to interest on any contribution to
the capital of the Company, nor shall any Member be entitled to the return of
any capital of the Company except (i) upon the repurchase by the Company of a
part or all of such Member's Interest pursuant to Section 4.5 hereof, (ii)
pursuant to the provisions of Section 5.6 hereof or (iii) upon the liquidation
of the Company's assets pursuant to Section 6.2 hereof. No Member shall be
liable for the return of any such amounts. No Member shall have the right to
require partition of the Company's property or to compel any sale or appraisal
of the Company's assets.
5.3. CAPITAL ACCOUNTS.
(a) The Company shall maintain a separate Capital Account for
each Member.
(b) Each Member's Capital Account shall have an initial balance
equal to the amount of such Member's initial contribution to the capital of the
Company.
(c) Each Member's Capital Account shall be increased by the sum
of (i) the amount of additional contributions by such Member to the capital of
the Company permitted pursuant to Section 5.1 hereof, plus (ii) all amounts
credited to such Member's Capital Account pursuant to Sections 5.4 through 5.7
hereof.
(d) Each Member's Capital Account shall be reduced by the sum of
(i) the amount of any repurchase of the Interest, or portion thereof, of such
Member or distributions to such Member pursuant to Sections 4.5, 5.9 or 6.2
hereof which are not reinvested (net of any liabilities secured by any asset
distributed that such Member is deemed to assume or take subject to under
Section 752 of the Code), plus (ii) any amounts debited against such Capital
Account pursuant to Sections 5.4 through 5.6 hereof.
5.4. ALLOCATION OF NET PROFIT AND NET LOSS; ALLOCATION OF OFFERING
COSTS.
As of the last day of each Fiscal Period, any Net Profit or Net
Loss for the Fiscal Period, and any offering costs required by applicable
accounting principles to be charged to capital that are paid or accrued during
the Fiscal Period, shall be allocated among and credited to or debited against
the Capital Accounts of the Members in accordance with their respective
Investment Percentages for such Fiscal Period.
5.5. ALLOCATION OF CERTAIN EXPENDITURES.
Except as otherwise provided for in this Agreement and unless
prohibited by the 1940 Act, any expenditures payable by the Company, to the
extent determined by the Board of Managers to have been paid or withheld on
behalf of, or by reason of particular circumstances applicable to, one or more
but fewer than all of the Members, shall be charged to only those Members on
whose behalf such payments are made or whose particular circumstances gave rise
to such payments. Such charges shall be debited from the Capital Accounts of
such Members as of the close of the Fiscal Period during which any such items
were paid or accrued by the Company.
5.6. RESERVES.
(a) Appropriate reserves may be created, accrued and charged
against Net Assets and proportionately against the Capital Accounts of the
Members for contingent liabilities, if any, as of the date any such contingent
liability becomes known to the Adviser or the Board of Managers, such reserves
to be in the amounts that the Board of Managers in its sole discretion deems
necessary or appropriate. The Board of Managers may increase or reduce any such
reserves from time to time by such amounts as the Board of Managers in its sole
discretion deems necessary or appropriate. The amount of any such reserve, or
any increase or decrease therein, may be proportionately charged or credited, as
appropriate, to the Capital Accounts of those persons who are Members at the
time when such reserve is created, increased or decreased, as the case may be;
PROVIDED, HOWEVER, that if any such individual reserve item, adjusted by any
increase therein, exceeds the lesser of $500,000 or 1% of the aggregate value of
the Capital Accounts of all such Members, the amount of such reserve, increase,
or decrease shall instead be charged or credited to those parties who were
Members at the time, as determined by the Board of Managers in its sole
discretion, of the act or omission giving rise to the contingent liability for
which the reserve was established, increased or decreased in proportion to their
Capital Accounts at that time.
(b) To the extent permitted under applicable law, if at any time
an amount is paid or received by the Company (other than contributions to the
capital of the Company, distributions or repurchases of 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 Company's accounting practices, be treated as applicable to
one or more prior Fiscal Periods, then such amount shall be proportionately
charged or credited, as appropriate, to those persons who were Members during
such prior Fiscal Period or Periods.
(c) To the extent permitted under applicable law, if any amount
is required by paragraph (a) or (b) of this Section 5.6 to be charged or
credited to a person who is no longer a Member, such amount shall be paid by or
to such person, as the case may be, in cash, with interest from the date on
which the Board of Managers determines that such charge or credit is required.
In the case of a charge, the former Member shall be obligated to pay the amount
of the charge, plus interest as provided above, to the Company on demand;
PROVIDED, HOWEVER, that (i) in no event shall a former Member be obligated to
make a payment exceeding the amount of such Member's Capital Account at the time
to which the charge relates; and (ii) no such demand shall be made after the
expiration of three years since the date on which such person ceased to be a
Member. To the extent that a former Member fails to pay to the Company, in full,
any amount required to be charged to such former Member pursuant to paragraph
(a) or (b), whether due to the expiration of the applicable limitation period or
for any other reason whatsoever, the deficiency shall be charged proportionately
to the Capital Accounts of the Members at the time of the act or omission giving
rise to the charge to the extent feasible, and otherwise proportionately to the
Capital Accounts of the current Members.
5.7. ALLOCATION OF ORGANIZATION EXPENSES.
(a) As of the first Expense Allocation Date, Organization
Expenses shall be allocated among and debited against the Capital Accounts of
the Members in accordance with their respective Capital Percentages on such
Expense Allocation Date.
(b) As of each Expense Allocation Date following the first
Expense Allocation Date, all amounts previously debited against the Capital
Account of a Member pursuant to this Section 5.7 on the preceding Expense
Allocation Date will be credited to the Capital Account of such Member, and
Organization Expenses shall then be reallocated among and debited against the
Capital Accounts of all Members in accordance with their respective Capital
Percentages.
5.8. TAX ALLOCATIONS.
For each fiscal year, items of income, deduction, gain, loss or
credit shall be allocated for income tax purposes among the Members in such
manner as to reflect equitably amounts credited or debited to each Member's
Capital Account for the current and prior fiscal years (or relevant portions
thereof). Allocations under this Section 5.8 shall be made pursuant to the
principles of Sections 704(b) and 704(c) of the Code, and Treasury Regulations
Sections 1.704-1(b)(2)(iv)(f) and (g), 1.704-1(b)(4)(i) and 1.704-3(e)
promulgated thereunder, as applicable, or the successor provisions to such
Sections and Treasury Regulations. Notwithstanding anything to the contrary in
this Agreement, there shall be allocated to the Members such gains or income as
shall be necessary to satisfy the "qualified income offset" requirement of
Treasury Regulations Section 1.704-1(b)(2)(ii)(d).
If the Company realizes ordinary income and/or capital gains
(including short-term capital gains) for Federal income tax purposes
(collectively, "income") for any fiscal year during or as of the end of which
all the Interests of one or more Positive Basis Members (as hereinafter defined)
are repurchased by the Company pursuant to Article IV, the Board of Managers,
may elect to allocate such income as follows: (i) to allocate such income 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 income shall have been so allocated or the Positive
Basis of each such Positive Basis Member shall have been eliminated and (ii) to
allocate any income not so allocated to Positive Basis Members to the other
Members in such manner as shall equitably reflect the amounts allocated to such
Members' Capital Accounts pursuant to Sections 5.4-5.7 hereof.
If the Company realizes deductions, ordinary losses and/or capital
losses (including long-term capital losses) for Federal income tax purposes
(collectively, "losses") for any fiscal year during or as of the end of which
the Interests of one or more Negative Basis Members (as hereinafter defined) are
repurchased by the Company pursuant to Article IV, the Board of Managers may
elect to allocate such losses as follows: (i) to allocate such losses among such
Negative Basis Members, pro rata in proportion to the respective Negative Basis
(as hereinafter defined) of each such Negative Basis Member, until either the
full amount of such losses shall have been so allocated or the Negative Basis of
each such Negative Basis Member shall have been eliminated and (ii) to allocate
any losses not so allocated to Negative Basis Members to the other Members in
such manner as shall equitably reflect the amounts allocated to such Members'
Capital Accounts pursuant to Sections 5.4-5.7 hereof.
As used herein, (i) the term "Positive Basis" shall mean, with
respect to any Member and as of any time of calculation, the amount by which its
Interest 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 such
Member's share of the liabilities of the Company under Section 752 of the Code),
and (ii) the term "Positive Basis Member" shall mean
any Member whose Interest is repurchased by the Company and who has Positive
Basis as of the effective date of the repurchase (determined prior to any
allocations made pursuant to this Section).
As used herein, (i) the term "Negative Basis" shall mean, with
respect to any Member and as of any time of calculation, the amount by which its
Interest as of such time is less than its "adjusted tax basis," for Federal
income tax purposes, in its Interest as of such time (determined without regard
to such Member's share of the liabilities of the Company under Section 752 of
the Code), and (ii) the term "Negative Basis Member" shall mean any Member whose
Interest is repurchased by the Company and who has Negative Basis as of the
effective date of such repurchase (determined prior to any allocations made
pursuant to this Section).
5.9. ADJUSTMENTS TO TAKE ACCOUNT OF CERTAIN EVENTS.
If the Code or Treasury Regulations promulgated thereunder
require a withholding or other adjustment to the Capital Account of a Member or
some other event occurs necessitating in the Board of Managers' judgment an
equitable adjustment, the Board of Managers shall make such adjustments in the
determination and allocation among the Members of Net Profit, Net Loss, Capital
Accounts, items of income, deduction, gain, loss, credit or withholding for tax
purposes, accounting procedures or such other financial or tax items as shall
equitably take into account such event and applicable provisions of law, and the
determination thereof by the Board of Managers shall be final and conclusive as
to all of the Members.
5.10. DISTRIBUTIONS.
The Board of Managers, in its sole discretion, may authorize the
Company to make distributions in cash or in kind at any time to all of the
Members on a PRO RATA basis in accordance with the Members' Investment
Percentages.
5.11. WITHHOLDING.
(a) The Board of Managers may withhold and pay over to the
Internal Revenue Service (or any other relevant taxing authority) taxes from any
distribution to any Member to the extent required by the Code or any other
applicable law on account of such Member's distributive share of the Company's
items of gross income, income or gain.
(b) For purposes of this Agreement, any taxes so withheld or paid
over by the Company with respect to any amount distributed by the Company to any
Member shall be deemed to be a distribution or payment to such Member, reducing
the amount otherwise distributable to such Member pursuant to this Agreement and
reducing the Capital Account of such Member. If the amount of such taxes is
greater than any such distributable amounts, then such Member and any successor
to such Member's Interest shall pay to the Company as a contribution to the
capital of the Company, the amount of such excess.
(c) The Board of Managers shall not be obligated to apply for or obtain a
reduction of or exemption from withholding tax on behalf of any Member that may
be eligible for such reduction or exemption. To the extent that a Member claims
to be entitled to a reduced rate of, or exemption from, a withholding tax
pursuant to an applicable income tax treaty, or otherwise, the Member shall
furnish the Board of Managers with such information and forms as such Member may
be required to complete where necessary to comply with any and all laws and
regulations governing the obligations of withholding tax agents. Each Member
represents and warrants that any such information and forms furnished by such
Member shall be true and accurate and agrees to indemnify the Company and each
of the Members from any and all damages, costs and expenses resulting from the
filing of inaccurate or incomplete information or forms relating to such
withholding taxes.
--------------------------
ARTICLE VI.
DISSOLUTION AND LIQUIDATION
---------------------------
6.1. DISSOLUTION.
The Company shall be dissolved:
(1) upon the affirmative vote to dissolve the Company by:
(i) the Board of Managers or (ii) Members holding at
least two-thirds (2/3) of the total number of votes
eligible to be cast by all Members;
(2) upon the failure of Members to elect a successor
Manager at a meeting called by the Adviser in
accordance with Section 2.6 hereof when no Manager
remains to continue the business of the Company;
(3) upon the expiration of any two year period that
commences on the date on which any Member has
submitted, in accordance with the procedure specified
in Section 4.5(e) hereof, a written notice to the
Company requesting to tender its entire Interest for
repurchase by the Company if such Interest has not been
repurchased by the Company; or
(4) as required by operation of law.
Dissolution of the Company shall be effective on the later of the day on which
the event giving rise to the dissolution shall occur or the conclusion of any
applicable 60 day period during which the Board of Managers and Members may
elect to continue the business of the Company as provided above, but the Company
shall not terminate until the assets of the Company have been liquidated in
accordance with Section 6.2 hereof and the Certificate has been canceled.
6.2. LIQUIDATION OF ASSETS.
(a) Upon the dissolution of the Company as provided in Section
6.1 hereof, the Board of Managers shall promptly appoint the Board of Managers
or the Adviser as the liquidator and the Board of Managers or the Adviser shall
liquidate the business and administrative affairs of the Company, except that if
the Board of Managers does not appoint the Board of Managers or the Adviser as
the liquidator or the Board of Managers or the Adviser is unable to perform this
function, a liquidator elected by Members holding a majority of the total number
of votes eligible to be cast by all Members shall promptly liquidate the
business and administrative affairs of the Company. Net Profit and Net Loss
during the period of liquidation shall be allocated pursuant to Section 5.4
hereof. The proceeds from liquidation (after establishment of appropriate
reserves for contingencies in such amount as the Board of Managers or liquidator
shall deem appropriate in its sole discretion as applicable) shall be
distributed in the following manner:
(1) the debts of the Company, other than debts, liabilities
or obligations to Members, and the expenses of
liquidation (including legal and accounting expenses
incurred in connection therewith), up to and including
the date that distribution of the Company's assets to
the Members has been completed, shall first be paid on
a PRO RATA basis;
(2) such debts, liabilities or obligations as are owing to
the Members shall next be paid in their order of
seniority and on a PRO RATA basis; and
(3) the Members shall next be paid on a PRO RATA basis the
positive balances of their respective Capital Accounts
after giving effect to all allocations to be made to
such Members' Capital Accounts for the Fiscal Period
ending on the date of the distributions under this
Section 6.2(a)(3).
(b) Anything in this Section 6.2 to the contrary notwithstanding,
upon dissolution of the Company, the Board of Managers or other liquidator may
distribute ratably in kind any assets of the Company; PROVIDED, HOWEVER, that if
any in-kind distribution is to be made (i) the assets distributed in kind shall
be valued pursuant to Section 7.3 hereof as of the actual date of their
distribution and charged as so valued and distributed against amounts to be paid
under Section 6.2(a) above, and (ii) any profit or loss attributable to property
distributed in kind shall be included in the Net Profit or Net Loss for the
Fiscal Period ending on the date of such distribution.
-----------------------------
ARTICLE VII
ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS
-----------------------------
7.1. ACCOUNTING AND REPORTS.
(a) The Company shall adopt for tax accounting purposes any
accounting method that the Board of Managers shall decide in its sole discretion
is in the best interests of the Company. The Company's accounts shall be
maintained in U.S. currency.
(b) As soon as practicable after the end of each Taxable Year,
the Company shall furnish to each Member such information regarding the
operation of the Company and such Member's Interest as is necessary for Members
to complete Federal, state and local income tax or information returns and any
other tax information required by Federal, state or local law.
(c) Except as otherwise required by the 1940 Act, or as may
otherwise be permitted by rule, regulation or order, within 60 days after the
close of the period for which a report required under this Section 7.1 is being
made, the Company shall furnish to each Member a semi-annual report and an
annual report containing the information required by such Act. The Company shall
cause financial statements contained in each annual report furnished hereunder
to be accompanied by a certificate of independent public accountants based upon
an audit performed in accordance with generally accepted auditing standards. The
Company may furnish to each Member such other periodic reports as it deems
necessary or appropriate in its discretion.
7.2. DETERMINATIONS BY THE BOARD OF MANAGERS.
(a) All matters concerning the determination and allocation among
the Members of the amounts to be determined and allocated pursuant to Article V
hereof, including any taxes thereon and accounting procedures applicable
thereto, shall be determined by the Board of Managers unless specifically and
expressly otherwise provided for by the provisions of this Agreement or required
by law, and such determinations and allocations shall be final and binding on
all the Members.
(b) The Board of Managers may make such adjustments to the
computation of Net Profit or Net Loss or any components comprising the foregoing
as it considers appropriate to reflect fairly and accurately the financial
results of the Company and the intended allocation thereof among the Members.
7.3. VALUATION OF ASSETS.
(a) Except as may be required by the 1940 Act, the Board of
Managers shall value or have valued any Securities or other assets and
liabilities of the Company as of the close of business on the last day of each
Fiscal Period in accordance with such valuation procedures as shall be
established from time to time by the Board of Managers and which conform to the
requirements of the 1940 Act. In determining the value of the assets of the
Company, no value shall be placed on the goodwill or name of the Company, or the
office records, files, statistical data or any similar intangible assets of the
Company not normally reflected in the Company's accounting records, but there
shall be taken into consideration any items of income earned but not received,
expenses incurred but not yet paid, liabilities, fixed or contingent, and any
other prepaid expenses to the extent not otherwise reflected in the books of
account, and the value of options or commitments to purchase or sell Securities
or commodities pursuant to agreements entered into prior to such valuation date.
(b) The Company will value Interests in the Company at fair
value, which ordinarily will be the value determined by the Board of Managers in
accordance with the policies established by the Company.
(c) Notwithstanding the previous sub-paragraph, in a situation
where a Portfolio Manager allocates a Portfolio Fund's assets to special
investment accounts or side pockets, the current fair value of the Company's
interest in that Portfolio Fund may not be accurately reflected in the Company's
net asset value. This is because the Portfolio Manager's most recent computation
of the fair value of the special investment account or side pocket may have last
occurred a significant amount of time (I.E., as much as eleven months or longer)
before the current monthly computation of the Company's net asset value. As a
result, for any given month, the stated net asset value of the Company may,
under certain circumstances, be higher or lower than the value that would
otherwise have been utilized had the Portfolio Manager determined and reported
the fair value of any side pocket as of the end of the most recent calendar
month.
(d) The value of Securities and other assets of the Company and
the net worth of the Company as a whole determined pursuant to this Section 7.3
shall be conclusive and binding on all of the Members and all parties claiming
through or under them.
---------------------------
ARTICLE VIII
MISCELLANEOUS PROVISIONS
-----------------------------
8.1. AMENDMENT OF LIMITED LIABILITY COMPANY AGREEMENT.
(a) Except as otherwise provided in this Section 8.1, this
Agreement may be amended, in whole or in part, with: (i) the approval of the
Board of Managers (including the vote of a majority of the Independent Managers,
if required by the ▇▇▇▇ ▇▇▇) and (ii) if required by the 1940 Act, the approval
of the Members by such vote as is required by the ▇▇▇▇ ▇▇▇.
(b) Any amendment that would:
(1) increase the obligation of a Member to make any
contribution to the capital of the Company;
(2) reduce the Capital Account of a Member other than in
accordance with Article V; or
(3) modify the events causing the dissolution of the
Company;
may be made only if (i) the written consent of each Member adversely affected
thereby is obtained prior to the effectiveness thereof or (ii) such amendment
does not become effective until (A) each Member has received written notice of
such amendment and (B) any Member objecting to such amendment has been afforded
a reasonable
opportunity (pursuant to such procedures as may be prescribed by the Board of
Managers) to have its entire Interest repurchased by the Company.
(c) The power of the Board of Managers to amend this Agreement at
any time without the consent of the other Members as set forth in paragraph (a)
of this Section 8.1 shall specifically include the power to:
(1) restate this Agreement together with any amendments
hereto that have been duly adopted in accordance
herewith to incorporate such amendments in a single,
integrated document;
(2) amend this Agreement (other than with respect to the
matters set forth in Section 8.1(b) hereof) to effect
compliance with any applicable law or regulation or to
cure any ambiguity or to correct or supplement any
provision hereof that may be inconsistent with any
other provision hereof; and
(3) amend this Agreement to make such changes as may be
necessary or advisable to ensure that the Company will
not be treated as an association or as a publicly
traded partnership taxable as a corporation as defined
in Section 7704(b) of the Code.
(d) The Board of Managers shall cause written notice to be given
of any amendment to this Agreement (other than any amendment of the type
contemplated by clause (1) of Section 8.1 hereof) to each Member, which notice
shall set forth (i) the text of the amendment or (ii) a summary thereof and a
statement that the text thereof will be furnished to any Member upon request.
8.2. SPECIAL POWER OF ATTORNEY.
(a) Each Member hereby irrevocably makes, constitutes and
appoints each Manager, acting severally, and any liquidator of the Company's
assets appointed pursuant to Section 6.2 hereof with full power of substitution,
the true and lawful representatives and attorneys-in-fact of, and in the name,
place and stead of, such Member, with the power from time to time to make,
execute, sign, acknowledge, swear to, verify, deliver, record, file and/or
publish:
(1) any amendment to this Agreement that complies with the
provisions of this Agreement (including the provisions
of Section 8.1 hereof);
(2) any amendment to the Certificate required because this
Agreement is amended, including, without limitation, an
amendment to effectuate any change in the membership of
the Company; and
(3) all such other instruments, documents and certificates
that, in the opinion of legal counsel to the Company,
may from time to time be required by the laws of the
United States, the State of Delaware or any other
jurisdiction in which the Company shall determine to do
business, or any political subdivision or agency
thereof, or that such legal counsel may deem necessary
or appropriate to effectuate, implement and continue
the valid existence and business of the Company as a
limited liability company under the Delaware Act.
(b) Each Member is aware that the terms of this Agreement permit
certain amendments to this Agreement to be effected and certain other actions to
be taken or omitted by or with respect to the Company without such Member's
consent. If an amendment to the Certificate or this Agreement or any action by
or with respect to the Company is taken in the manner contemplated by this
Agreement, each Member agrees that, notwithstanding any objection that such
Member may assert with respect to such action, the attorneys-in-fact appointed
hereby are authorized and empowered, with full power of substitution, to
exercise the authority granted above in any manner that may be necessary or
appropriate to permit such amendment to be made or action lawfully taken or
omitted.
Each Member is fully aware that each Member will rely on the effectiveness of
this special power-of-attorney with a view to the orderly administration of the
affairs of the Company.
(c) This power-of-attorney is a special power-of-attorney and is
coupled with an interest in favor of each of the Managers and as such:
(1) shall be irrevocable and continue in full force and
effect notwithstanding the subsequent death or
incapacity of any party granting this
power-of-attorney, regardless of whether the Company or
Board of Managers shall have had notice thereof; and
(2) shall survive the delivery of a Transfer by a Member of
the whole or any portion of such Member's Interest,
except that where the transferee thereof has been
approved by the Board of Managers for admission to the
Company as a substituted Member, this power-of-attorney
given by the transferor shall survive the delivery of
such assignment for the sole purpose of enabling the
Board of Managers to execute, acknowledge and file any
instrument necessary to effect such substitution.
8.3. NOTICES.
Except as otherwise set forth in this Agreement, notices that are
required to be provided under this Agreement shall be made, if to a Member, by
regular mail, or if to the Board of Managers or the Adviser, by hand delivery,
registered or certified mail return receipt requested, commercial courier
service, telex or telecopier, and shall be addressed to the respective parties
hereto at their addresses as set forth in the books and records of the Company.
Notices shall be deemed to have been provided when delivered by hand, on the
date indicated as the date of receipt on a return receipt or when received if
sent by regular mail, commercial courier service, telex or telecopier. A
document that is not a notice and that is required to be provided under this
Agreement by any party to another party may be delivered by any reasonable
means.
8.4. AGREEMENT BINDING UPON SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, successors, assigns, executors,
trustees or other legal representatives, but the rights and obligations of the
parties hereunder may not be Transferred or delegated except as provided in this
Agreement and any attempted Transfer or delegation thereof that is not made
pursuant to the terms of this Agreement shall be void.
8.5. APPLICABILITY OF 1940 ACT AND FORM N-2.
The parties hereto acknowledge that this Agreement is not
intended to, and does not, set forth the substantive provisions contained in the
1940 Act and the Form N-2 that will affect numerous aspects of the conduct of
the Company's business and of the rights, privileges and obligations of the
Members. Each provision of this Agreement shall be subject to and interpreted in
a manner consistent with the applicable provisions of the 1940 Act, other
Federal securities laws and the Form N-2.
8.6. CHOICE OF LAW; ARBITRATION.
(a) Notwithstanding the place where this Agreement may be
executed by any of the parties hereto, the parties expressly agree that all the
terms and provisions hereof shall be construed under the laws of the State of
Delaware, including the Delaware Act without regard to the conflict of law
principles of such State.
(b) Unless otherwise agreed in writing, each Member agrees to
submit all controversies arising between Members or one or more Members and the
Company to arbitration in accordance with the provisions set forth below and
understands that:
(1) arbitration is final and binding on the parties;
(2) they are waiving their right to seek remedies in court,
including the right to a jury trial;
(3) pre-arbitration discovery is generally more limited and
different from court proceedings;
(4) the arbitrator's award is not required to include
factual findings or legal reasoning and a party's right
to appeal or to seek modification of rulings by
arbitrators is strictly limited; and
(5) the panel of arbitrators will typically include a
minority of arbitrators who were or are affiliated with
the securities industry.
(c) All controversies that may arise among Members and one or
more Members and the Company concerning this Agreement shall be determined by
arbitration in New York City in accordance with the Federal Arbitration Act, to
the fullest extent permitted by law. Any arbitration under this Agreement shall
be determined before and in accordance with the rules then obtaining of either
the New York Stock Exchange, Inc. (the "NYSE") or the National Association of
Securities Dealers, Inc. (the "NASD"), as the Member or entity instituting the
arbitration may elect. If the NYSE or NASD does not accept the arbitration for
consideration, the arbitration shall be submitted to, and determined in
accordance with the rules then obtaining of, the Center for Public Resources,
Inc. in New York City. Judgment on any award of any such arbitration may be
entered in the Supreme Court of the State of New York or in any other court
having jurisdiction of the person or persons against whom such award is
rendered. Any notice of such arbitration or for the confirmation of any award in
any arbitration shall be sufficient if given in accordance with the provisions
of this Agreement. Each Member agrees that the determination of the arbitrators
shall be binding and conclusive upon them.
(d) No Member shall bring a putative or certified class action to
arbitration, nor seek to enforce any pre-dispute arbitration agreement against
any person who has initiated in court a putative class action; or who is a
member of a putative class who has not opted out of the class with respect to
any claims encompassed by the putative class action until: (i) the class
certification is denied; or (ii) the class is decertified; or (iii) the Member
is excluded from the class by the court. Such forbearance to enforce an
agreement to arbitrate shall not constitute a waiver of any rights under this
Agreement except to the extent stated herein.
8.7. NOT FOR BENEFIT OF CREDITORS.
The provisions of this Agreement are intended only for the
regulation of relations among past, present and future Members, Managers and the
Company. This Agreement is not intended for the benefit of non-Member creditors
and no rights are granted to non-Member creditors under this Agreement.
8.8. CONSENTS.
Any and all consents, agreements or approvals provided for or
permitted by this Agreement shall be in writing and a signed copy thereof shall
be filed and kept with the books of the Company.
8.9. MERGER AND CONSOLIDATION.
(a) The Company may merge or consolidate with or into one or more
limited liability companies formed under the Delaware Act or other business
entities pursuant to an agreement of merger or consolidation that has been
approved in the manner contemplated by Section 18-209(b) of the Delaware Act.
(b) Notwithstanding anything to the contrary contained elsewhere
in this Agreement, an agreement of merger or consolidation approved in
accordance with Section 18-209(b) of the Delaware Act may, to
the extent permitted by Section 18-209(f) of the Delaware Act, (i) effect any
amendment to this Agreement, (ii) effect the adoption of a new limited liability
company agreement for the Company if it is the surviving or resulting limited
liability company in the merger or consolidation, or (iii) provide that the
limited liability company agreement of any other constituent limited liability
company to the merger or consolidation (including a limited liability company
formed for the purpose of consummating the merger or consolidation) shall be the
limited liability company agreement of the surviving or resulting limited
liability company.
8.10. PRONOUNS.
All pronouns shall be deemed to refer to the masculine, feminine,
neuter, singular or plural, as the identity of the person or persons, firm or
corporation may require in the context thereof.
8.11. CONFIDENTIALITY.
(a) A Member may obtain from the Company such information
regarding the affairs of the Company as is just and reasonable under the
Delaware Act, subject to reasonable standards (including standards governing
what information and documents are to be furnished, at what time and location
and at whose expense) established by the Board of Managers.
(b) Each Member covenants that, except as required by applicable
law or any regulatory body, it will not divulge, furnish or make accessible to
any other person the name and/or address (whether business, residence or
mailing) of any Member (collectively, "Confidential Information") without the
prior written consent of the Board of Managers, which consent may be withheld in
its sole discretion.
(c) Each Member recognizes that in the event that this Section
8.11 is breached by any Member or any of its principals, partners, members,
directors, officers, employees or agents or any of its Affiliates, including any
of such Affiliates' principals, partners, members, directors, officers,
employees or agents, irreparable injury may result to the non-breaching Members
and the Company. Accordingly, in addition to any and all other remedies at law
or in equity to which the non-breaching Members and the Company may be entitled,
such Members shall also have the right to obtain equitable relief, including,
without limitation, injunctive relief, to prevent any disclosure of Confidential
Information, plus reasonable attorneys' fees and other litigation expenses
incurred in connection therewith. In the event that any non-breaching Member or
the Company determines that any of the other Members or any of its principals,
partners, members, directors, officers, employees or agents or any of its
Affiliates, including any of such Affiliates' principals, partners, members,
directors, officers, employees or agents should be enjoined from or required to
take any action to prevent the disclosure of Confidential Information, each of
the other non-breaching Members agrees to pursue in a court of appropriate
jurisdiction such injunctive relief.
(d) Notwithstanding anything in this Section 8.11 to the
contrary, the Member (and each employee, representative or other agent of such
Member), may disclose to any and all persons, without limitation of any kind,
the tax treatment and tax structure of (i) the Company and (ii) any of its
transactions, and all materials of any kind (including opinions or other tax
analyses) that are provided to the Member relating to such tax treatment and tax
structure.
8.12. CERTIFICATION OF NON-FOREIGN STATUS.
Each Member or transferee of an Interest from a Member shall
certify, upon admission to the Company and at such other times thereafter as the
Board of Managers may request, whether such Member is a "United States Person"
within the meaning of Section 7701(a)(30) of the Code on forms to be provided by
the Company, and shall notify the Company within 30 days of any change in such
Member's status. Any Member who shall fail to provide such certification when
requested to do so by the Board of Managers may be treated as a non-United
States Person for purposes of U.S. Federal tax withholding and may be required
to withdraw from the Company.
8.13. SEVERABILITY.
If any provision of this Agreement is determined by a court of
competent jurisdiction not to be enforceable in the manner set forth in this
Agreement, each Member agrees that it is the intention of the Members that such
provision should be enforceable to the maximum extent possible under applicable
law. If any provisions of this Agreement are held to be invalid or
unenforceable, such invalidation or unenforceability shall not affect the
validity or enforceability of any other provision of this Agreement (or portion
thereof).
8.14. FILING OF RETURNS.
The Board of Managers or its designated agent shall prepare and
file, or cause the accountants of the Company to prepare and file, a Federal
income tax return in compliance with Section 6031 of the Code and any required
state and local income tax and information returns for each tax year of the
Company.
8.15. TAX MATTERS PARTNER.
(a) A Manager who is a Member shall be designated on the
Company's annual Federal income tax return, and have full powers and
responsibilities, as the Tax Matters Partner of the Company for purposes of
Section 6231(a)(7) of the Code. In the event that no Manager is a Member, a
Member shall be so designated. Should any Member be designated as the Tax
Matters Partner for the Company pursuant to Section 6231(a)(7) of the Code, it
shall, and each Member hereby does, to the fullest extent permitted by law,
delegate to a Manager selected by the Board of Managers all of its rights,
powers and authority to act as such Tax Matters Partner and hereby constitutes
and appoints such Manager as its true and lawful attorney-in-fact, with power to
act in its name and on its behalf, including the power to act through such
agents or attorneys as it shall elect or appoint, to receive notices, to make,
execute and deliver, swear to, acknowledge and file any and all reports,
responses and notices and to do any and all things required or advisable, in the
Manager's judgment, to be done by such a Tax Matters Partner. Any Member
designated as the Tax Matters Partner for the Company under Section 6231(a)(7)
of the Code shall be indemnified and held harmless by the Company from any and
all liabilities and obligations that arise from or by reason of such
designation.
(b) Each person (for purposes of this Section 8.15, called a
"Pass-Thru Member") that holds or controls an interest as a Member on behalf of,
or for the benefit of, another person or persons, or which Pass-Thru Member is
beneficially owned (directly or indirectly) by another person or persons, shall,
within 30 days following receipt from the Tax Matters Partner of any notice,
demand, request for information or similar document, convey such notice or other
document in writing to all holders of beneficial interests in the Company
holding such interests through such Pass-Thru Member. In the event the Company
shall be the subject of an income tax audit by any Federal, state or local
authority, to the extent the Company is treated as an entity for purposes of
such audit, including administrative settlement and judicial review, the Tax
Matters Partner shall be authorized to act for, and its decision shall be final
and binding upon, the Company and each Member thereof. All expenses incurred in
connection with any such audit, investigation, settlement or review shall be
borne by the Company.
8.16. SECTION 754 ELECTION.
The Board of Managers may, in its sole discretion, cause the
Company to make or revoke any tax election that the Board of Managers deems
appropriate, including without limitation an election pursuant to Section 475 or
Section 754 of the Code.
8.17. MEMBER TAX BASIS.
Upon request of the Board of Managers, each Member agrees to
provide to the Board of Managers information regarding its adjusted tax basis in
its Interest along with documentation substantiating such amount.
EACH OF THE UNDERSIGNED ACKNOWLEDGES HAVING READ THIS AGREEMENT IN ITS
ENTIRETY BEFORE SIGNING, INCLUDING THE PRE-DISPUTE ARBITRATION CLAUSE SET FORTH
IN SECTION 8.6 AND THE CONFIDENTIALITY CLAUSE SET FORTH IN SECTION 8.11.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
MANAGERS:
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MEMBERS:
Each person who shall sign an investor
application or certification and who shall
be accepted by the Board of Managers to the
Company as a Member.