TORREY U.S. STRATEGY PARTNERS, LLC
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (the
"Agreement") of Torrey U.S. Strategy Partners, LLC (the "Fund") is dated as
of May 15, 2002 by and among ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, as the Managers, and those persons hereinafter admitted as
Members. This Agreement amends and restates the Limited Liability Company
Agreement dated March 28, 2002 by and among Torrey Associates, LLC as the
Organizational Member, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as the Initial Manager.
WHEREAS, the Fund 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 March 25, 2002;
NOW, THEREFORE, for and in consideration of the foregoing and the mutual
covenants hereinafter set forth, it is hereby agreed as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement:
Administrator The person who provides administrative,
accounting, and compliance and operational
support services to the Fund pursuant to
an administrative services agreement.
Advisor Torrey Associates, LLC, a limited
liability company organized under Delaware
law, or any person who may hereafter serve
as the investment advisor to the Fund
pursuant to an Investment Advisory
Agreement.
Advisers Act The Investment Advisers Act of 1940
and the rules, regulations and orders
thereunder, as amended from time to time,
or any successor law.
Affiliate An affiliated person of a person as such
term is defined in the 1940 Act.
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.
Capital Account With respect to each Member, the capital
account established and maintained on behalf
of each Member pursuant to Section 5.3.
Certificate The Certificate of Formation of the Fund
and any amendments thereto as filed with
the office of the Secretary of State of
the State of Delaware.
Closing Date The first date on or as of which a person
other than an Organizational Member is
admitted to the Fund as a Member.
Code The United States Internal Revenue Code of
1986, as amended, and as hereafter amended
from time to time, or any successor law.
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.
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
Fund is made pursuant to Section 5.1;
(4) any day on which the Fund repurchases
any portion of the Units of any
Member; or
(5) any day (other than one specified in
clause (2) above) as of which this
Agreement provides for any amount to
be credited to or debited against the
Capital Account of any Member, other
than an amount to be credited to or
debited against the Capital Accounts
of all Members in accordance with
their respective Investment
Percentages.
Fiscal Year The period commencing on the Closing Date
and ending on March 31, 2003, and
thereafter each period commencing on April
1 of each year and ending on March 31 of
each 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 Fund.
Form N-2 The Fund's Registration Statement on Form
N-2 filed with the Securities and Exchange
Commission, as amended from time to time.
Fund The limited liability company governed
hereby, as such limited liability company
may from time to time be constituted.
Independent Managers Those Managers who are not "interested
persons" of the Fund as such term is
defined by the 1940 Act.
Initial Manager ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, the person who directed
the formation of the Fund and served as
the sole initial Manager.
Investment Advisory A separate written agreement entered into
Agreement by the Fund pursuant to which the Advisor
provides investment advisory services to
the Fund.
Investment Percentage A percentage established for each Member
on the Fund'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%.
Manager An individual designated as a manager of
the Fund pursuant to the provisions of
Section 2.6 of the Agreement and who
serves on the Board of Managers of the
Fund.
Member Any person who shall have been admitted to
the Fund as a member (including any
Manager in such person's capacity as a
member of the Fund but excluding any
Manager in such person's capacity as a
Manager of the Fund) until the Fund
repurchases all the Units of such person
pursuant to Section 4.4 hereof or a
substituted member or members are admitted
with respect to all or any portion of such
person's Units as a member pursuant to
Section 4.3 hereof; such term includes the
Advisor or an Affiliate of the Advisor to
the extent the Advisor (or such Affiliate)
makes a capital contribution to the Fund
and shall have been admitted to the Fund
as a member.
Net Assets The total value of all assets of the Fund,
less an amount equal to all accrued debts,
liabilities and obligations of the Fund,
calculated before giving effect to any
repurchases of Units.
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 Fund, 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 Section 5.5 hereof.
1940 Act The Investment Company Act of 1940 and the
rules, regulations and orders thereunder,
as amended from time to time, or any
successor law.
Organizational Member The Advisor and any Affiliate of the
Advisor that contributes initial capital
to the Fund prior to the Closing Date.
Placement Agent Any entity or person who may serve as the
placement agent of Units pursuant to a
placement agent agreement with the Fund.
Portfolio Funds Investment funds in which the Fund's
assets are invested.
Portfolio Managers The organizations that manage and direct
the investment activities of Portfolio
Funds or are retained to manage and invest
directly designated portions of the Fund's
assets.
Securities Securities (including, without limitation,
equities, debt obligations, options,
limited partnership interests, limited
liability company interests 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.
Transfer The assignment, transfer, sale,
encumbrance, pledge or other disposition
of all or any portion of the Units,
including any right to receive any
allocations and distributions attributable
to a Unit, other than a repurchase in
accordance with Section 4.4 hereof.
Unit A limited liability company interest in
the Fund.
Valuation Date The date as of which the Fund values the
Units for purposes of determining the
price at which Units are to be purchased
by the Fund pursuant to an offer made by
the Fund pursuant to Section 4.4 hereof.
ARTICLE II
ORGANIZATION; ADMISSION OF MEMBERS
Section 2.1 Formation of Limited Liability Company
The Fund has been formed as a limited liability company at the direction
of the Initial Manager who authorized the filing of the Certificate, which
actions are hereby ratified by the execution of this Agreement. 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 Fund's legal counsel, may from time to time be
required by the laws of the United States of America, the State of Delaware
or any other jurisdiction in which the Fund shall determine to do business,
or any political subdivision or agency thereof, or that such legal counsel
may deem necessary or appropriate to effectuate, implement and continue the
valid existence and business of the Fund.
Section 2.2 Name
The name of the Fund shall be "Torrey U.S. Strategy Partners, LLC" 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.
Section 2.3 Principal and Registered Office
The Fund shall have its principal office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place designated from time
to time by the Board of Managers.
The Fund shall have its registered office in Delaware at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and shall have
Corporation Services Company as its registered agent for service of process
in Delaware, unless a different registered office or agent is designated from
time to time by the Board of Managers.
Section 2.4 Duration
The term of the Fund commenced on the filing of the Certificate with the
Secretary of State of Delaware and shall continue until the Fund is dissolved
pursuant to Section 6.1 hereof.
Section 2.5 Business of the Fund
(a) The business of the Fund 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 Fund may execute, deliver and perform all contracts, agreements,
subscription documents 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.
(b) The Fund 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.
Section 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 Managers on the Board of Managers, subject to the election of such
persons prior to the Closing Date by the Organizational Member. By signing
this Agreement or signing a subscription agreement in connection with the
purchase of Units, a Member admitted on the Closing Date shall be deemed to
have voted for the election of each of the Managers so designated. After the
Closing Date, the Board of Managers may, subject to the provisions of
paragraphs (a) and (b) of this Section 2.6 with respect to the number of and
vacancies in the position of Manager and the provisions of Section 3.3 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 Fund. 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 Fund, 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
Fund, the Advisor 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 Fund and, if the business shall be continued, of electing the required
number of Managers to the Board of Managers. If the Members shall determine
at such meeting not to continue the business of the Fund 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 Fund shall be dissolved
pursuant to Section 6.1 hereof and the assets of the Fund shall be liquidated
and distributed pursuant to Section 6.2 hereof.
Section 2.7 Members
The Fund may offer Units for purchase by investors in such manner and at
such times as may be determined by the Board of Managers. All subscriptions
for Units are subject to the receipt by the Fund or its custodian of cleared
funds on or before the acceptance date for such subscriptions in the full
amount of the subscription. Subject to the foregoing, a person may be
admitted to the Fund as a Member subject to the condition that such person
shall execute an appropriate signature page of this Agreement or a
subscription agreement 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 sole discretion reject any subscription for Units. The Board of Managers
may, in its sole discretion, suspend the offering of the Units at any time.
The admission of any person as a Member shall be effective upon the revision
of the books and records of the Fund to reflect the name and the contribution
to the capital of the Fund of such additional Member.
Section 2.8 Organizational Member
The initial contribution of capital to the Fund by the Organizational
Member shall be represented by Units, which Units shall have the same rights
as other Units held by Members.
Section 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.
Section 2.10 Limited Liability
Except as provided under applicable law, a Member shall not be liable
for the Fund'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 Fund's debts, obligations and
liabilities.
ARTICLE III
MANAGEMENT
Section 3.1 Management and Control
(a) Management and control of the business of the Fund shall be vested
in the Board of Managers, which shall have the right, power and authority, on
behalf of the Fund and in its name, to exercise all rights, powers and
authority of Managers under the Delaware Act and to do all things necessary
and proper to carry out the objective and business of the Fund and their
duties hereunder. No Manager shall have the authority individually to act on
behalf of or to bind the Fund 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 Fund 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 Fund as are
customarily vested in each director of a closed-end management investment
company registered under the 1940 Act that is organized as a Delaware
business trust who is not an "interested person" of such company, as such
term is defined by the 1940 Act. During any period in which the Fund shall
have no Managers, the Advisor shall continue to serve as the Advisor to the
Fund and shall have the authority to manage the business and affairs of the
Fund.
(b) Members shall have no right to participate in and shall take no part
in the management or control of the Fund's business and shall have no right,
power or authority to act for or bind the Fund. Members shall have the right
to vote on any matters only as provided in this Agreement or on any matters
that require the approval of the holders of voting securities under the 1940
Act or as otherwise required in the Delaware Act.
(c) 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 Fund, with such titles and authority as may be determined by
the Board of Managers consistent with applicable law.
Section 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. 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.
Section 3.3 Meetings of Members
(a) Actions requiring the vote of the Members may be taken at any duly
constituted meeting of the Members at which a quorum is present. Meetings of
the Members may be called by the Board of Managers or by Members holding a
majority of the total number of votes eligible to be cast by all Members, and
may be held at such time, date and place as the Board 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 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 eligible to be cast by those Members who are
present in person or by proxy at such meeting.
(b) Each Member shall be entitled to cast at any meeting of Members a
number of votes equivalent to such Member's 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 60 days prior to the date of any
meeting of Members to determine eligibility to vote at such meeting and the
number of votes that each Member will be entitled to cast 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 Fund before or at the
time of the meeting. A proxy may be suspended or revoked, as the case may be,
by the Member executing the proxy by a later writing delivered to the Fund at
any time prior to exercise of the proxy or if the Member executing the proxy
shall be present at the meeting and decide to vote in person. Any action of
the Members that is permitted to be taken at a meeting of the Members may be
taken without a meeting if consents in writing, setting forth the action
taken, are signed by Members holding a majority of the total number of votes
eligible to be cast or such greater percentage as may be required in order to
approve such action.
Section 3.4 Custody of Assets of the Fund
The physical possession of all funds, Securities or other properties of
the Fund shall at all times, be held, controlled and administered by one or
more custodians retained by the Fund in accordance with the requirements of
the 1940 Act and the rules thereunder.
Section 3.5 Other Activities of Members and Managers
(a) The Managers shall not be required to devote all of their time to
the affairs of the Fund, but shall devote such time as may reasonably be
required to perform their obligations under this Agreement.
(b) Any Member 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, advisors or agents of other companies, partners of any
partnership, members of any limited liability company, or trustees of any
trust, or entering into any other commercial arrangements. No Member or
Manager shall have any rights in or to such activities of any other Member or
Manager, or any profits derived therefrom.
Section 3.6 Duty of Care
(a) Neither a Manager nor the Advisor shall be liable to the Fund or to
any of its Members for any loss or damage occasioned by any act or omission
in the performance of their services pursuant to any agreement, including
this Agreement, between a Manager or the Advisor and the Fund for the
provision of services to the Fund 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 the Manager or the
Advisor, as applicable, constituting willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the performance of
their services to the Fund.
(b) Members not in breach of any obligation hereunder or under any
agreement pursuant to which the Member subscribed for Units shall be liable
to the Fund, any Member or third parties only as provided under the Delaware
Act.
Section 3.7 Indemnification
(a) To the fullest extent permitted by law, the Fund shall, subject to
Section 3.7(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 Fund or the
past or present performance of services to the Fund by such indemnitee,
except to the extent such loss, claim, damage, liability, cost or expense
shall have been finally determined in a 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 3.7 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 3.7
to the fullest extent permitted by law.
(b) Expenses, including reasonable counsel fees, so incurred by any such
indemnitee (but excluding amounts paid in satisfaction of judgments, in
compromise, or as fines or penalties), may be paid from time to time by the
Fund in advance of the final disposition of any such action, suit,
investigation or proceeding upon receipt of an undertaking by or on behalf of
such indemnitee to repay to the Fund amounts so paid if it shall ultimately
be determined that indemnification of such expenses is not authorized under
Section 3.7(a) hereof; provided, however, that (i) such indemnitee shall
provide security for such undertaking, (ii) the Fund shall be insured by or
on behalf of such indemnitee against losses arising by reason of such
indemnitee's failure to fulfill 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 Fund or its Members by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such indemnitee's office, indemnification shall be
provided pursuant to Section 3.7(a) hereof if (i) approved as in the best
interests of the Fund 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 is not liable to the Fund or its Members by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of such indemnitee's office,
or (ii) the 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 Fund 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 3.7 shall not prevent the recovery from any indemnitee of any such
amount if such indemnitee subsequently shall be determined in a decision on
the merits in any action, suit, investigation or proceeding involving the
liability or expense that gave rise to such indemnification or advancement of
expenses to be liable to the Fund or its Members by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such indemnitee's office. In (i) any suit brought
by a Manager (or other person entitled to indemnification hereunder) to
enforce a right to indemnification under this Section 3.7 it shall be a
defense that, and (ii) in any suit in the name of the Fund to recover any
indemnification or advancement of expenses made pursuant to this Section 3.7
the Fund 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 3.7 has not met the applicable standard of conduct set forth in
this Section 3.7. In any such suit brought to enforce a right to
indemnification or to recover any indemnification or advancement of expenses
made pursuant to this Section 3.7, the burden of proving that the 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 3.7 shall be on the Fund (or any Member acting derivatively or
otherwise on behalf of the Fund or its Members).
(e) An indemnitee may not satisfy any right of indemnification or
advancement of expenses granted in this Section 3.7 or to which such
indemnitee may otherwise be entitled except out of the assets of the Fund,
and no Member shall be personally liable with respect to any such claim for
indemnification or advancement of expenses.
(f) The rights of indemnification provided hereunder shall not be
exclusive of or affect any other rights to which any person may be entitled
by contract or otherwise under law. Nothing contained in this Section 3.7
shall affect the power of the Fund to purchase and maintain liability
insurance on behalf of any Manager or other person.
Section 3.8 Fees, Expenses and Reimbursement
(a) The Advisor and its Affiliates shall be entitled to receive such
fees for services provided to the Fund as may be agreed to by the Advisor (or
its Affiliate) and the Fund pursuant to the Investment Advisory Agreement or
other applicable agreement relating to such services.
(b) The Board of Managers may cause the Fund to compensate each Manager
who is not an officer or employee of the Advisor or the Placement Agent (or
of any Affiliate of the Advisor or of the Placement Agent) for his or her
services as such, and such Manager shall be reimbursed by the Fund for
reasonable travel and out-of-pocket expenses incurred by him in performing
his duties under this Agreement.
(c) The Fund shall bear all expenses incurred in its business and
operations, other than those specifically required to be borne by the Advisor
pursuant to the Investment Advisory Agreement. Expenses to be borne by the
Fund include, but are not limited to, the following:
(1) all costs and expenses directly related to portfolio
transactions and positions for the Fund's account, including, but not limited
to, brokerage commissions, research fees (including research related travel),
interest and commitment fees on loans and debit balances, borrowing charges
on securities sold short, dividends on securities sold but not yet purchased,
custodial fees, margin fees, transfer taxes and premiums, taxes withheld on
foreign dividends and indirect expenses from investments in Portfolio Funds;
(2) all costs and expenses associated with the registration of the
Fund under, and certain offering costs and the costs of compliance with, any
applicable Federal or state laws;
(3) all costs and expenses associated with the organization of
separate investment funds managed by Portfolio Managers retained by the Fund,
if any, and with the selection of Portfolio Managers, including due diligence
and travel related expenses;
(4) attorneys' fees and disbursements associated with updating the
Fund's registration statement, prospectus and other offering related
documents (the "Offering Materials"); the costs of printing the Offering
Materials; the costs of distributing the Offering Materials to prospective
investors; and attorneys' fees and disbursements associated with the
preparation and review thereof;
(5) the costs and expenses of offering Units, including the
expenses of the Placement Agent (including its counsel);
(6) the costs and expenses of holding meetings of the Board of
Managers and any meetings of Members, including legal costs associated with
the preparation and filing of proxy materials;
(7) the fees and disbursements of Fund counsel, legal counsel to
the Independent Managers, if any, independent accountants for the Fund and
other consultants and professionals engaged on behalf of the Fund;
(8) the Management Fee payable to the Advisor pursuant to the
Investment Advisory Agreement;
(9) he fees payable to ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Fund Services, LLC pursuant
to the Client Services Agreement;
(10) the costs of a fidelity bond and any liability insurance
obtained on behalf of the Fund or the Board of Managers;
(11) all costs and expenses of preparing, setting in type, printing
and distributing reports and other communications to Members;
(12) all expenses of computing the Fund's net asset value,
including any equipment or services obtained for these purposes;
(13) all charges for equipment or services used in communicating
information regarding the Fund's transactions among the Advisor and any
custodian or other agent engaged by the Fund; and
(14) such other types of expenses as may be approved from time to
time by the Board of Managers.
The Advisor shall be entitled to reimbursement from the Fund for any of
the above expenses that it pays on behalf of the Fund.
(d) Subject to procuring any required regulatory approvals, from time to
time the Fund may, alone or in conjunction with other registered or
unregistered investment funds or other accounts for which the Advisor, or any
Affiliate of the Advisor, acts as general partner or investment advisor,
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 MANAGERS,
TRANSFERS AND REPURCHASES
Section 4.1 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 (as described below); (v) shall be certified
by a physician to be mentally or physically unable to perform his or her
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 Fund under
the Delaware Act.
Section 4.2 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.
Section 4.3 Transfer of Units of Members
(a) Units of a Member may be Transferred only (i) by operation of law
pursuant to the death, divorce, bankruptcy, insolvency, dissolution or
incompetency of such Member or (ii) with the written consent of the Board of
Managers (which may be withheld in its sole discretion); provided, however,
that the Board of Managers may not consent to any Transfer other than a
Transfer (i) in which the tax basis of the Units in the hands of the
transferee is determined, in whole or in part, by reference to its tax basis
in the hands of the transferor (e.g., certain Transfers to affiliates, gifts
and contributions to family partnerships), (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 Fund to ensure that such pledge,
transfer, or assignment will not cause the Fund 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 4.3 shall be
void.
(b) The Board of Managers may not consent to a Transfer of Units or a
portion thereof of a Member unless; (i) the person to whom the Units are
Transferred (or each of the person's beneficial owners if such a person is a
"private investment company" as defined in paragraph (d)(3) of Rule 205-3
under the Advisers Act) is a person whom the Board of Managers believes meets
the requirements of paragraph (d)(1) of Rule 205-3 under the Advisers Act or
any successor rule thereto and any other requirements that the Board of
Managers deems necessary or appropriate; and (ii) all the Units of the Member
are Transferred to a single transferee or, after the Transfer of a portion of
the Units, the balance of the Capital Account of each of the transferee and
transferor is not less than $25,000. Any transferee that acquires Units by
operation of law as the result of the death, divorce, bankruptcy, insolvency,
dissolution or incompetency of a Member or otherwise, shall be entitled to
the allocations and distributions allocable to the Units so acquired and to
Transfer such Units in accordance with the terms of this Agreement, but shall
not be entitled to the other rights of a Member unless and until such
transferee becomes a substituted Member. If a Member transfers Units with the
approval of the Board of Managers, the Board of Managers shall promptly take
all necessary actions so that the transferee to whom such Units are
transferred is admitted to the Fund as a Member. Each Member effecting a
Transfer and its transferee agree to pay all expenses, including attorneys'
and accountants' fees, incurred by the Fund in connection with such Transfer.
(c) Each Member shall indemnify and hold harmless the Fund, the
Managers, the Advisor, each other Member and any Affiliate of the foregoing
against all losses, claims, damages, liabilities, costs and expenses
(including legal or other expenses incurred in investigating or defending
against any such losses, claims, damages, liabilities, costs and expenses or
any judgments, fines and amounts paid in settlement), joint or several, to
which such persons may become subject by reason of or arising from (i) any
Transfer made by such Member in violation of this Section 4.3 and (ii) any
misrepresentation by such Member in connection with any such Transfer.
Section 4.4 Repurchase of Units
(a) Except as otherwise provided in this Agreement, no Member or other
person holding any Units shall have the right to withdraw or tender to the
Fund for repurchase such Units. The Board of Managers from time to time, in
its sole discretion and on such terms and conditions as it may determine, may
cause the Fund to repurchase Units or portions thereof pursuant to written
tenders. However, the Fund shall not offer to repurchase Units on more than
two occasions during any one Fiscal Year unless it has received an opinion of
counsel to the effect that such more frequent offers would not cause any
adverse tax consequences to the Fund or the Members. In determining whether
to cause the Fund to repurchase Units or portions thereof pursuant to written
tenders, the Board of Managers shall consider the recommendation of the
Advisor, and shall also consider the following factors, among others:
(1) whether any Members have requested to tender Units or portions
thereof to the Fund;
(2) the liquidity of the Fund's assets;
(3) the investment plans and working capital requirements of the
Fund;
(4) the relative economies of scale with respect to the size of the
Fund;
(5) the history of the Fund in repurchasing Units or portions
thereof;
(6) the economic condition of the securities markets; and
(7) the anticipated tax consequences of any proposed repurchases of
Units or portions thereof.
The Board of Managers shall cause the Fund to repurchase Units or
portions thereof pursuant to written tenders only on terms determined by the
Board of Managers to be fair to the Fund and to all Members (including
persons holding Units acquired from Members), as applicable.
(b) A Member who tenders for repurchase only a portion of the Member's
Units will be required to maintain a capital account balance equal to
$25,000. If a Member tenders an amount that would cause the Member's capital
account balance to fall below the required minimum, the Fund reserves the
right to reduce the amount to be purchased from the Member so that the
required minimum balance is maintained.
(c) The Advisor may tender any Units or a portion thereof that it holds
as a Member.
(d) The Board of Managers may cause the Fund to repurchase Units or
portion thereof of a Member or any person acquiring Units 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 Units or portion thereof have been transferred in
violation of Section 4.3 hereof, or such Units or portion thereof have vested
in any person by operation of law as the result of the death, divorce,
bankruptcy, insolvency, dissolution or incompetency of a Member;
(2) ownership of such Units by a Member or other person will cause
the Fund to be in violation of, or subject the Fund to additional
registration or regulation under, the securities laws of the United States or
any other relevant jurisdiction;
(3) continued ownership of such Units may be harmful or injurious
to the business or reputation of the Fund, the Managers or the Advisor, or
may subject the Fund or any of the Members to an undue risk of adverse tax or
other fiscal consequences;
(4) such Member's continued participation in the Fund may cause the
Fund to be classified as a "publicly traded partnership" within the meaning
of Section 7704 of the Code and the Treasury Regulations thereunder;
(5) any of the representations and warranties made by a Member in
connection with the acquisition of the Units or portion thereof was not true
when made or has ceased to be true; or
(6) it would be in the best interests of the Fund, as determined by
the Board of Managers in its sole discretion, for the Fund to repurchase such
Units or portion thereof.
(e) Repurchases of Units or portions thereof by the Fund shall be
payable promptly after the date of each such repurchase or, in the case of an
offer by the Fund to repurchase Units, promptly after the expiration date of
such repurchase offer in accordance with the terms of such offer. Payment of
the purchase price for Units (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 Units (or portion thereof)
repurchased by the Fund determined as of the date of such repurchase (the
"Initial Payment"); and, 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, (ii) a promissory note entitling the holder
thereof to a contingent payment equal to the excess, if any, of (x) the net
asset value of the Units (or portion thereof) repurchased by the Fund as of
the date of such repurchase, determined based on the audited financial
statements of the Fund 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 marketable Securities (or any
combination of marketable Securities and cash) having a value, determined as
of the date of repurchase, equal to the amount to be repurchased. 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 Fund has
requested withdrawal of its capital from any Portfolio Funds in order to fund
the repurchase of ▇▇▇▇▇, ▇▇ business days after the Fund has received at
least 90% of the aggregate amount withdrawn by the Fund from such Portfolio
Funds.
(f) Subject to the approval of the Board of Managers and compliance with
the 1940 Act, the Fund may impose a redemption fee in connection with
repurchases of Units, including a fee applicable to repurchases of Units (or
portions thereof) effected prior to expiration of a specified period
subsequent to a Member's admission to the Fund.
(g) A Member may at any time submit to the Fund a written request that
the Fund repurchase all the Units of such Member, as contemplated by Section
6.1(iii) hereof. Any such request shall be sent to the Fund by registered or
certified mail, return receipt requested, and shall be deemed valid only if
the Member has received a letter from the Fund acknowledging its receipt of
the request. The Fund shall send such letter to the Member promptly upon its
receipt of the Member's request.
ARTICLE V
CAPITAL
Section 5.1 Contributions to Capital
(a) The minimum initial contribution of each Member to the capital of
the Fund 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 Fund upon
acceptance as a contribution to the capital of the Fund. The Managers shall
not be entitled to make contributions of capital to the Fund as Managers of
the Fund, but may make contributions to the capital of the Fund as a Member.
The Advisor may make contributions to the capital of the Fund as a Member.
(b) Members may make additional contributions to the capital of the Fund
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 Fund except to the
extent provided in Section 5.6 hereof. The minimum initial capital
contribution of a Member to the capital of the Fund shall be such amount as
the Board of Managers, in its sole discretion, may determine from time to
time.
(c) Initial and any additional contributions to the capital of the Fund
by any Member shall be payable in cash, payable in readily available funds
or, at the sole discretion of the Board of Managers, in securities, at the
date of the proposed acceptance of the contribution.
Section 5.2 Rights of Members to Capital
No Member shall be entitled to interest on any contribution to the
capital of the Fund, nor shall any Member be entitled to the return of any
capital of the Fund except (i) upon the repurchase by the Fund of a part or
all of such Member's Units pursuant to Section 4.4 hereof, (ii) pursuant to
the provisions of Section 5.6 hereof or (iii) upon the liquidation of the
Fund's assets pursuant to Section 6.2 hereof. No Member shall be liable for
the return of any such amounts. No Member shall have the right to require
partition of the Fund's property or to compel any sale or appraisal of the
Fund's assets.
Section 5.3 Capital Accounts
(a) The Fund shall maintain a separate Capital Account for each Member.
(b) Each Member's Capital Account shall have an initial balance equal to
the amount of cash constituting such Member's initial contribution to the
capital of the Fund.
(c) Each Member's Capital Account shall be increased by the sum of (i)
the amount of cash or securities constituting additional contributions by
such Member to the capital of the Fund permitted pursuant to Section 5.1
hereof, plus (ii) all amounts credited to such Member's Capital Account
pursuant to Sections 5.4 through 5.6 hereof.
(d) Each Member's Capital Account shall be reduced by the sum of (i) the
amount of any repurchase of the Units, or portion thereof, of such Member
pursuant to Section 4.4 hereof or distributions to such Member pursuant to
Section 5.7, ,5.8, 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.
Section 5.4 Allocation of Net Profit and Net Loss
As of the last day of each Fiscal Period, any Net Profit or Net Loss for
the Fiscal Period shall be allocated among and credited to or debited against
the Capital Accounts of the Members in accordance with their respective
Investment Percentages for such Fiscal Period.
Section 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 Fund, 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 Fund.
Section 5.6 Reserves
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 Advisor 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, shall be proportionately
charged or credited, as appropriate, to the Capital Accounts of Members.
Section 5.7 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 5.7 shall be made pursuant to the
principles of Sections 704(b) and 704(c) of the Code, and in conformity with
Regulations Sections l.704-l(b)(2)(iv)(f) and (g), l.704-1(b)(4)(i) and
1.704-3(e) promulgated thereunder, as applicable, or the successor provisions
to such Section and Regulations. Notwithstanding anything to the contrary in
this Agreement, there shall be allocated to the Members such gains or income
as shall be necessary to satisfy the "qualified income offset" requirement of
Treasury Regulations l.704-1(b)(2)(ii)(d).
If the Fund realizes capital gains (including short-term capital gains)
for Federal income tax purposes ("gains") for any fiscal year during or as of
the end of which the Units of one or more Positive Basis Members (as
hereinafter defined) are repurchased by the Fund pursuant to Article IV, the
Board of Managers, unless otherwise determined by the Board of Managers, in
its sole discretion, shall allocate such gains as follows: (i) to allocate
such gains among such Positive Basis Members, pro rata in proportion to the
respective Positive Basis (as hereinafter defined) of each such Positive
Basis Member, until either the full amount of such gains shall have been so
allocated or the Positive Basis of each such Positive Basis Member shall have
been eliminated and (ii) to allocate any gains not so allocated to Positive
Basis Members to the other Members in such manner as shall equitably reflect
the amounts allocated to such Members' Capital Accounts pursuant to Section
5.4.
If the Fund realizes capital losses (including long-term capital losses)
for Federal income tax purposes ("losses") for any fiscal year during or as
of the end of which the Units of one or more Negative Basis Members (as
hereinafter defined) are repurchased by the Fund pursuant to Article IV, the
Board of Managers, unless otherwise determined by the Board of Managers, in
its sole discretion, shall 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 Section
5.4.
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
Units as of such time exceeds its "adjusted tax basis," for Federal income
tax purposes, in its Units as of such time (determined without regard to any
adjustments made to such "adjusted tax basis" by reason of any transfer or
assignment of such Units, including by reason of death, and without regard to
such Member's share of the liabilities of the Fund under Section 752 of the
Code) and (ii) the term "Positive Basis Member" shall mean any Member whose
Units are repurchased by the Fund and who has Positive Basis as of the
effective date of the repurchase, but such Member shall cease to be a
Positive Basis Member at such time as it shall have received allocations
pursuant to clause (i) of the second paragraph of this Section 5.7 equal to
its Positive Basis as of the effective date of such repurchase.
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
Units as of such time is less than its "adjusted tax basis," for Federal
income tax purposes, in its Units as of such time (determined without regard
to any adjustments made to such "adjusted tax basis" by reason of any
transfer or assignment of such Units, including by reason of death, and
without regard to such Member's share of the liabilities of the Fund under
Section 752 of the Code), and (ii) the term "Negative Basis Member" shall
mean any Member whose Units are repurchased by the Fund and who has Negative
Basis as of the effective date of such repurchase, but such Member shall
cease to be a Negative Basis Member at such time as it shall have received
allocations pursuant to clause (i) of the third paragraph of this Section 5.7
equal to its Negative Basis as of the effective date of such repurchase.
Section 5.8 Distributions
The Board of Managers, in its sole discretion, may authorize the Fund to
make distributions in cash or in kind at any time to all of the Members on a
pro rata basis in accordance with the Members' Investment Percentages.
Section 5.9 Withholding
(a) The Board of Managers may withhold and pay over to the Internal
Revenue Service (or any other relevant taxing authority) taxes with respect
to any Member to the extent required by the Code or any other applicable law.
(b) For purposes of this Agreement, any taxes so withheld by the Fund
with respect to any Member shall be deemed to be a distribution or payment to
such Member, reducing the amount otherwise distributable to such Member
pursuant to this Agreement and reducing the Capital Account of such Member.
If the amount of such taxes is greater than any such distributable amounts,
then such Member and any successor to such Member's Units shall pay to the
Fund as a contribution to the capital of the Fund, upon demand of the Board
of Managers, 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 Fund 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
Section 6.1 Dissolution
The Fund shall be dissolved:
(i) upon the affirmative vote to dissolve the Fund by both: (i) the
Board of Managers; and (ii) Members holding at least two-thirds (2/3) of the
total number of votes eligible to be cast by all Members;
(ii) upon the failure of Members to elect a successor Manager at a
meeting called by the Advisor in accordance with Section 2.6(c) hereof when
no Manager remains to continue the business of the Fund;
(iii) 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 4.4(g) hereof, a written notice to the Fund requesting
the repurchase of all its Units by the Fund (which notice has not been
subsequently withdrawn by such Member), if such Units have not been
repurchased by the Fund; or
(iv) as required by operation of law.
Dissolution of the Fund shall be effective on the day on which the event
giving rise to the dissolution shall occur, but the Fund shall not terminate
until the assets of the Fund have been liquidated in accordance with Section
6.2 hereof and the Certificate has been canceled.
Section 6.2 Liquidation of Assets
(a) Upon the dissolution of the Fund as provided in Section 6.1 hereof,
the Board of Managers, acting directly or through a liquidator it selects,
shall liquidate the business and administrative affairs of the Fund, except
that if the Board of Managers is unable to perform this function, a
liquidator elected by Members holding a majority of the total number of votes
eligible to be cast by all Members shall promptly liquidate the business and
administrative affairs of the Fund. Net Profit and Net Loss during the period
of liquidation shall be allocated pursuant to 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 Fund, 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 Fund's assets to the Members has been
completed, shall first be paid on a pro rata basis;
(2) such debts, liabilities or obligations as are owing to the
Members shall next be paid in their order of seniority and on a pro rata
basis;
(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.
(b) Anything in this Section 6.2 to the contrary notwithstanding, upon
dissolution of the Fund, the Board of Managers or other liquidator may
distribute ratably in kind any assets of the Fund; provided, however, that if
any in-kind distribution is to be made (i) the assets distributed in kind
shall be valued pursuant to Section 7.3 hereof as of the actual date of their
distribution and charged as so valued and distributed against amounts to be
paid under Section 6.2(a) above, and (ii) any profit or loss attributable to
property distributed in-kind shall be included in the Net Profit or Net Loss
for the Fiscal Period ending on the date of such distribution.
ARTICLE VII
ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS
Section 7.1 Accounting and Reports
(a) The Fund 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 Fund. The Fund's accounts shall be maintained in
U.S. currency.
(b) After the end of each taxable year, the Fund shall furnish to each
Member such information regarding the operation of the Fund and such Member's
Units as is necessary for Members to complete Federal, state and local income
tax or information returns and any other tax information required by Federal,
state or local law.
(c) Except as otherwise required by the 1940 Act, or as may otherwise be
permitted by rule, regulation or order, within 60 days after the close of the
period for which a report required under this Section 7.1(c) is being made,
the Fund shall furnish to each Member a semi-annual report and an annual
report containing the information required by such Act. The Fund shall cause
financial statements contained in each annual report furnished hereunder to
be accompanied by a certificate of independent public accountants based upon
an audit performed in accordance with generally accepted accounting
principles. The Fund may furnish to each Member such other periodic reports
as it deems necessary or appropriate in its discretion.
Section 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 Net Profit or Net
Loss as it considers appropriate to reflect fairly and accurately the
financial results of the Fund and the intended allocation thereof among the
Members.
Section 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 Fund 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 Fund, no value shall
be placed on the goodwill or name of the Fund, or the office records, files,
statistical data or any similar intangible assets of the Fund not normally
reflected in the Fund's accounting records, but there shall be taken into
consideration any items of income earned but not received, expenses incurred
but not yet paid, liabilities, fixed or contingent, 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 Fund will value interests in Portfolio Funds at their "fair
value," as determined in good faith by the Board of Managers, which value
ordinarily will be the value of an interest in a Portfolio Fund determined by
the Portfolio Manager of the Portfolio Fund in accordance with the policies
established by the Portfolio Fund, absent information indicating that such
value does not represent the fair value of the interest.
(c) The value of Securities and other assets of the Fund and the net
worth of the Fund as a whole determined pursuant to this Section 7.3 shall be
conclusive and binding on all of the Members and all parties claiming through
or under them.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 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 Fund;
(2) reduce the Capital Account of a Member other than in accordance
with Article V; or
(3) modify the events causing the dissolution of the Fund;
may be made only if (i) the written consent of each Member adversely affected
thereby is obtained prior to the effectiveness thereof or (ii) such amendment
does not become effective until (A) each Member has received written notice
of such amendment and (B) any Member objecting to such amendment has been
afforded a reasonable opportunity (pursuant to such procedures as may be
prescribed by the Board of Managers) to tender all its Units for repurchase
by the Fund.
(c) By way of example only, the Board of Managers at any time without
the consent of the Members may:
(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,
provided that such action does not adversely affect the right of any Member
in any material respect; and
(3) amend this Agreement to make such changes as may be necessary
or advisable to ensure that the Fund will not be treated as an association or
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(c) hereof) to each Member, which
notice shall set forth (i) the text of the amendment or (ii) a summary
thereof and a statement that the text thereof will be furnished to any Member
upon request.
Section 8.2 Special Power of Attorney
(a) Each Member hereby irrevocably makes, constitutes and appoints each
Manager, acting severally, and any liquidator of the Fund's assets appointed
pursuant to Section 6.2 hereof with full power of substitution, the true and
lawful representatives and attorneys-in-fact of, and in the name, place and
stead of, such Member, with the power from time to time to make, execute,
sign, acknowledge, swear to, verify, deliver, record, file and/or publish:
(1) any amendment to this Agreement 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 Fund; and
(3) all such other instruments, documents and certificates that, in
the opinion of legal counsel to the Fund, may from time to time be required
by the laws of the United States of America, the State of Delaware or any
other jurisdiction in which the Fund shall determine to do business, or any
political subdivision or agency thereof, or that such legal counsel may deem
necessary or appropriate to effectuate, implement and continue the valid
existence and business of the Fund as a limited liability company under the
Delaware Act.
(b) Each Member is aware that the terms of this Agreement permit certain
amendments to this Agreement to be effected and certain other actions to be
taken or omitted by or with respect to the Fund without such Member's
consent. If an amendment to the Certificate or this Agreement or any action
by or with respect to the Fund is taken in the manner contemplated by this
Agreement, each Member agrees that, notwithstanding any objection 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 Fund.
(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 Fund or Board of Managers shall
have had notice thereof; and
(2) shall survive the delivery of a Transfer by a Member of the
whole or any portion of such Member's Units, except that where the transferee
thereof has been approved by the Board of Managers for admission to the Fund
as a substituted Member, this power-of-attorney given by the transferor shall
survive the delivery of such assignment for the sole purpose of enabling the
Board of Managers to execute, acknowledge and file any instrument necessary
to effect such substitution.
Section 8.3 Notices
Except as otherwise set forth in this Agreement, notices that may or are
required to be provided under this Agreement shall be made, if to a Member,
by regular mail, or if to the Fund, the Board of Managers or the Advisor, 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 Fund. Notices shall be deemed to have been provided when
delivered by hand, on the date indicated as the date of receipt on a return
receipt or when received if sent by regular mail, commercial courier service,
telex or telecopier. A document that is not a notice and that is required to
be provided under this Agreement by any party to another party may be
delivered by any reasonable means.
Section 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.
Section 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 affect numerous aspects of the conduct of the Fund's
business and of the rights, privileges and obligations of the Members. Each
provision of this Agreement shall be subject to and interpreted in a manner
consistent with the applicable provisions of the 1940 Act and the Form N-2.
Section 8.6 Choice of Law
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.
Section 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 Fund.
This Agreement is not intended for the benefit of non-Member creditors and no
rights are granted to non-Member creditors under this Agreement.
Section 8.8 Consents
Any and all consents, agreements or approvals provided for or permitted
by this Agreement shall be in writing and a signed copy thereof shall be
filed and kept with the books of the Fund.
Section 8.9 Merger and Consolidation
(a) The Fund may merge or consolidate with or into one or more limited
liability companies formed under the Delaware Act or other business entities
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 Fund if it is the surviving or resulting limited liability
company in the merger or consolidation, or (iii) provide that the limited
liability company agreement of any other constituent limited liability
company to the merger or consolidation (including a limited liability company
formed for the purpose of consummating the merger or consolidation) shall be
the limited liability company agreement of the surviving or resulting limited
liability Fund.
Section 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.
Section 8.11 Confidentiality
(a) A Member may obtain from the Fund such information regarding the
affairs of the Fund as is just and reasonable under the Delaware Act, subject
to reasonable standards (including standards governing what information and
documents are to be furnished, at what time and location and at whose
expense) established by the Board 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 Fund. Accordingly, in addition to any and all other remedies
at law or in equity to which the non-breaching Members and the Fund may be
entitled, such Members 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 Fund 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.
Section 8.12 Certification of Non-Foreign Status
Each Member or transferee of Units from a Member shall certify, upon
admission to the Fund 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
Fund, and shall notify the Fund within 60 days of any change in such Member's
status.
Section 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).
Section 8.14 Filing of Returns
The Board of Managers or its designated agent shall prepare and file, or
cause the accountants of the Fund to prepare and file, a Federal information
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 Fund.
Section 8.15 Tax Matters Partner
(a) The Advisor shall be designated on the Fund's annual Federal income
tax return, and have full powers and responsibilities, as the Tax Matters
Partner of the Fund for purposes of Section 6231(a)(7) of the Code. In the
event that the Advisor is not a Member, a Member shall be so designated. Each
Member hereby does, to the fullest extent permitted by law, delegate to the
Advisor all of its rights, powers and authority to act as such Tax Matters
Partner and hereby constitutes and appoints the Advisor 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. The Advisor shall be indemnified and held
harmless by the Fund 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 Fund holding such interests through such Pass-Thru Member. In the event
the Fund shall be the subject of an income tax audit by any Federal, state or
local authority, to the extent the Fund 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 Fund and each Member thereof. All expenses
incurred in connection with any such audit, investigation, settlement or
review shall be borne by the Fund.
Section 8.16 Section 754 Election
In the event of a distribution of Fund property to a Member or an
assignment or other transfer (including by reason of death) of all or part of
the interest of a Member in the Fund, at the request of a Member, the Board
of Managers, in its discretion, may cause the Fund to elect, pursuant to
Section 754 of the Code, or the corresponding provision of subsequent law, to
adjust the basis of the Fund property as provided by Sections 734 and 743 of
the Code.
EACH OF THE UNDERSIGNED ACKNOWLEDGES HAVING READ THIS AGREEMENT IN ITS
ENTIRETY BEFORE SIGNING, INCLUDING THE CONFIDENTIALITY CLAUSE SET FORTH IN
SECTION 8.11.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
MANAGERS:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
MEMBERS:
Each person who shall sign a subscription agreement and who shall be accepted
by the Board of Managers to the Fund as a Member.
80350.0024 #323456