MAN-GLENWOOD LEXINGTON TEI, LLC
(A Delaware Limited Liability Company)
LIMITED LIABILITY COMPANY AGREEMENT
Dated as of October 22, 2003
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TABLE OF CONTENTS
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ARTICLE I: DEFINITIONS.........................................................3
ARTICLE II: ORGANIZATION; ADMISSION OF MEMBERS.................................4
2.1 Formation of Limited Liability Company................................4
2.2 Name..................................................................4
2.3 Principal and Registered Office.......................................5
2.4 Duration..............................................................5
2.5 Business of TEI.......................................................5
2.6 Board of Managers.....................................................7
2.7 Members...............................................................8
2.8 Initial Contribution..................................................8
2.9 Both Managers and Members.............................................8
2.10 Limited Liability....................................................8
ARTICLE III: MANAGEMENT........................................................8
3.1 Management and Control................................................8
3.2 Actions by the Board of Managers......................................9
3.3 Meetings of Members..................................................10
3.4 Custody of TEI's Assets..............................................11
3.5 Other Activities of Members and Managers.............................11
3.6 Duty of Care.........................................................11
3.7 Indemnification......................................................11
3.8 Fees, Expenses and Reimbursement.....................................13
ARTICLE IV: TERMINATION OF STATUS OF ADVISER AND MANAGERS, TRANSFERS AND
REPURCHASES...................................................................14
4.1 Termination of Status of a Manager...................................14
4.2 Removal of the Managers..............................................15
4.3 Transfer of Units of Members.........................................15
4.4 Repurchase of Units..................................................16
ARTICLE V: CAPITAL............................................................18
5.1 Contributions to Capital.............................................18
5.2 Rights of Members to Capital.........................................18
5.3 Capital Accounts.....................................................19
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5.4 Allocation of Net Profit and Net Loss; Allocation of Offering
Costs................................................................19
5.5 Reserves.............................................................19
5.6 Tax Allocations......................................................19
5.7 Distributions........................................................20
5.8 Withholding..........................................................20
ARTICLE VI: DISSOLUTION AND LIQUIDATION.......................................20
6.1 Dissolution..........................................................20
6.2 Liquidation of Assets................................................21
ARTICLE VII: ACCOUNTING, VALUATIONS, AND BOOKS AND RECORDS....................22
7.1 Accounting and Reports...............................................22
7.2 Determinations by the Board of Managers..............................22
7.3 Valuation of Assets..................................................22
ARTICLE VIII: MISCELLANEOUS PROVISIONS........................................23
8.1 Amendment of Limited Liability Company Agreement.....................23
8.2 Special Power of Attorney............................................24
8.3 Notices..............................................................25
8.4 Agreement Binding Upon Successors and Assigns........................25
8.5 Applicability of 1940 Act and Form N-2...............................25
8.6 Choice of Law........................................................26
8.7 Not for Benefit of Creditors.........................................26
8.8 Consents.............................................................26
8.9 Merger and Consolidation.............................................26
8.10 Pronouns............................................................26
8.11 Confidentiality.....................................................27
8.12 Certification of Non-Foreign Status.................................27
8.13 Severability........................................................27
8.14 Filing of Returns...................................................28
8.15 Tax Matters Partner.................................................28
8.16 Section 754 Election................................................28
8.17 Use of Names "Man," "Glenwood," "Man-Glenwood" and "TEI"............29
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MAN-GLENWOOD LEXINGTON TEI, LLC
LIMITED LIABILITY COMPANY AGREEMENT
THIS LIMITED LIABILITY COMPANY AGREEMENT of Man-Glenwood Lexington TEI, LLC
("TEI") is dated as of October 22, 2003 by and among ▇▇▇▇ ▇▇▇▇▇ as the Manager,
Glenwood Capital Investments, L.L.C., as the initial Member, and those persons
hereinafter admitted as Members.
WHEREAS, TEI 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 October 22, 2003;
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:
"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" - 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 TEI 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 Glenwood
is admitted to TEI 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.
"DISTRIBUTOR" - Man Investments Inc., a New York corporation, or any person who
may hereafter serve as the distributor of Units pursuant to a general
distributor's agreement with TEI.
"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
TEI is made pursuant to Section 5.1;
(4) any day on which TEI repurchases any 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 ownership of Units.
"FISCAL YEAR" - The period commencing on the Closing Date and ending on March
31, 2004, 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 shall elect another fiscal
year for TEI.
"FORM N-2" - TEI's Registration Statement on Form N-2 filed with the Securities
and Exchange Commission, as amended from time to time.
"GLENWOOD" - Glenwood Capital Investments, L.L.C., a limited liability company
organized under Delaware law, or any successor thereof.
"INDEPENDENT MANAGERS" - Those Managers who are not "interested persons" of TEI
as such term is defined by the 1940 Act.
"INITIAL MANAGER" - ▇▇▇▇ ▇▇▇▇▇, the person who directed the formation of TEI and
served as initial Manager.
"INVESTMENT FUNDS" - Investment funds in which TEI's or [Offshore Fund]'s
assets are invested.
"INVESTMENT MANAGERS" - The organizations that manage and direct the investment
activities of Investment Funds or are retained to manage and invest designated
portions of TEI's or [Offshore Fund]'s assets.
"MANAGER" - An individual designated as a manager of TEI pursuant to the
provisions of Section 2.6 of the Agreement and who serves on the Board of TEI.
"MEMBER" - Any person who shall have been admitted to TEI as a member (including
any Manager in such person's capacity as a member of TEI but excluding any
Manager in such person's capacity as a Manager of TEI) until TEI repurchases all
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the Units of such person pursuant to Section 4.4 hereof or a substituted member
or members are admitted with respect to any such person's Units as a member
pursuant to Section 4.3 hereof; such term includes Glenwood or an Affiliate of
Glenwood to the extent Glenwood (or such Affiliate) makes a capital contribution
to TEI and shall have been admitted to TEI as a member.
"NET ASSETS" - The total value of all assets of TEI, less an amount equal to all
accrued debts, liabilities and obligations of TEI, calculated before giving
effect to any repurchases of Units. The Net Assets of TEI will be computed as of
the close of business on the last day of each Fiscal Period. In computing Net
Assets, TEI will value its interest in the [Offshore Fund] at the net asset
value provided by the [Offshore Fund] to TEI. Other securities and assets of TEI
will be valued at market value, if market quotations are readily available, or
will be valued at fair value as determined in good faith by the Board or in
accordance with procedures adopted by the Board. Expenses of TEI and its
liabilities (including the amount of any borrowings) are taken into account for
purposes of computing Net Assets.
"NET ASSET VALUE" - Net Assets divided by the number of Units outstanding at the
applicable date. The initial Net Asset Value of a Unit, as of the closing of the
initial sale of Units, shall be $100.
"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 TEI,
as of the close of business on the Closing Date).
"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.
"[OFFSHORE FUND]" - A fund organized as a limited duration company in the Cayman
Islands (or as a similar entity in a similar non-United States jurisdiction),
and any successor thereto, in which TEI invests or plans to invest.
"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.
"TAXABLE YEAR" - The period commencing on the Closing Date and ending on
December 31, 2003, and thereafter each period commencing on January 1 of each
year and ending on December 31 of each year, unless and until the Board shall
elect another taxable year for TEI.
"TEI" - The limited liability company governed hereby, as such limited liability
company may from time to time be constituted.
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"TRANSFER" - The assignment, transfer, sale, encumbrance, pledge, or other
disposition of any Units, including any right to receive any allocations and
distributions attributable to a Unit.
"UNITS" - The units of limited liability company interest, each representing an
ownership interest in TEI at any particular time of a Member or other person to
whom Units of a Member have been transferred pursuant to Section 4.3 hereof,
including the rights and obligations of such Member or other person under this
Agreement and the Delaware Act. Upon the closing of the initial issuance of
Units, one Unit shall be issued with respect to each $100 contributed to the
capital of TEI by a Member. Thereafter Units shall be issued at the Net Asset
Value as of the date of issuance.
"VALUATION DATE" - The date as of which TEI values Units for purposes of
determining the price at which Units are to be purchased by TEI pursuant to an
offer made by TEI pursuant to Section 4.4 hereof.
ARTICLE II: ORGANIZATION; ADMISSION OF MEMBERS
2.1 FORMATION OF LIMITED LIABILITY COMPANY
TEI 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 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 TEI'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 TEI 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 TEI.
2.2 NAME
TEI's name shall be "Man-Glenwood Lexington TEI, LLC" or such other name as the
Board 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
TEI shall have its principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place designated from time to time by
the Board.
TEI shall have its registered office in Delaware at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and shall have Corporation Service 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.
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2.4 DURATION
The term of TEI commenced on the filing of the Certificate with the Secretary of
State of Delaware and shall continue until TEI is dissolved pursuant to Section
6.1 hereof.
2.5 BUSINESS OF TEI
(a) The business of TEI is, either directly or indirectly, through one or more
other pooled investment vehicles, to purchase, sell (including short sales),
invest, and trade in Securities, on margin or otherwise, to engage in any
financial or derivative transactions relating thereto or otherwise, and to
invest, as a feeder fund, all of its assets directly or indirectly in a master
fund as part of a master-feeder fund structure. TEI 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 be necessary or advisable to carry out its objective or business.
(b) TEI 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. TEI shall register
its Units under the Securities Act of 1933.
(c) In furtherance of its business, the Board shall have the authority to take
the following actions, and to delegate such portion or all of such authority to
such officers of TEI as the Board may elect:
(i) To acquire or buy, and invest TEI's property in, own, hold for
investment or otherwise, and to sell or otherwise dispose of, all types
and kinds of securities and investments of any kind including, but not
limited to, stocks, profit-sharing interests or participations and all
other contracts for or evidences of equity interests, bonds,
debentures, warrants and rights to purchase securities, and interests
in loans, certificates of beneficial interest, bills, notes and all
other contracts for or evidences of indebtedness, money market
instruments including bank certificates of deposit, finance paper,
commercial paper, bankers' acceptances and other obligations, and all
other negotiable and non-negotiable securities and instruments, however
named or described, issued by corporations, trusts, associations or any
other Persons, domestic or foreign, or issued or guaranteed by the
United States of America or any agency or instrumentality thereof, by
the government of any foreign country, by any State, territory or
possession of the United States, by any political subdivision or agency
or instrumentality of any state or foreign country, or by any other
government or other governmental or quasi-governmental agency or
instrumentality, domestic or foreign; to acquire and dispose of
interests in domestic or foreign loans made by banks and other
financial institutions; to deposit any assets of TEI in any bank, trust
company or banking institution or retain any such assets in domestic or
foreign cash or currency; to purchase and sell gold and silver bullion,
precious or strategic metals, and coins and currency of all countries;
to engage in "when issued" and delayed delivery transactions; to enter
into repurchase agreements, reverse repurchase agreements and firm
commitment agreements; to employ all types and kinds of hedging
techniques and investment management strategies; and to change the
investments of TEI.
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(ii) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or
sell, to sell or otherwise dispose of, to lend and to pledge any TEI
property or any of the foregoing securities, instruments or
investments; to purchase and sell options on securities, currency,
precious metals and other commodities, indices, futures contracts and
other financial instruments and assets and enter into closing and other
transactions in connection therewith; to enter into all types of
commodities contracts, including without limitation the purchase and
sale of futures contracts on securities, currency, precious metals and
other commodities, indices and other financial instruments and assets;
to enter into forward foreign currency exchange contracts and other
foreign exchange and currency transactions of all types and kinds; to
enter into interest rate, currency and other swap transactions; and to
engage in all types and kinds of hedging and risk management
transactions.
(iii) To exercise all rights, powers and privileges of ownership or
interest in all securities and other assets included in TEI property,
including without limitation the right to vote thereon and otherwise
act with respect thereto; and to do all acts and things for the
preservation, protection, improvement and enhancement in value of all
such securities and assets.
(iv) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, lease, develop and dispose of (by sale or otherwise) any type
or kind of property, real or personal, including domestic or foreign
currency, and any right or interest therein.
(v) To borrow money and in this connection issue notes, commercial
paper or other evidence of indebtedness; to secure borrowings by
mortgaging, pledging or otherwise subjecting as security all or any
part of TEI property; to endorse, guarantee, or undertake the
performance of any obligation or engagement of any other Person; to
lend all or any part of TEI's property to other Persons; and to issue
general unsecured or other obligations of TEI, and enter into
indentures or agreements relating thereto.
(vi) To aid, support or assist by further investment or other action
any Person, any obligation of or interest which is included in TEI's
property or in the affairs of which TEI has any direct or indirect
interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest; and to
guarantee or become surety on any or all of the contracts, securities
and other obligations of any such Person.
(vii) To join other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power
and authority with relation to any security (whether or not so
deposited or transferred) as the Board shall deem proper, and to agree
to pay, and to pay, such portion of the expenses and compensation of
such committee, depositary or trustee as the Board shall deem proper.
(viii) To carry on any other business in connection with or incidental
to any of the foregoing powers referred to in this Agreement, to do
everything necessary, appropriate or desirable for the accomplishment
of any purpose or the attainment of any object or the furtherance of
any power referred to in this Agreement, either alone or in association
with others, and to do every other act or thing incidental or
appurtenant to or arising out of or connected with such business or
purposes, objects or powers.
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2.6 BOARD OF MANAGERS
(a) Prior to the Closing Date, the initial Member or Members 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. By signing this Agreement or signing
an investor application or certification 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 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 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 TEI. The number of
Managers shall be fixed from time to time by the Board.
(b) Each Manager shall serve on the Board for the duration of the term of TEI,
unless his or her status as a Manager shall be sooner terminated pursuant to
Section 4.1 or 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 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.
(c) In the event that no Manager remains to continue the business of TEI,
Glenwood 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 TEI and, if the
business shall be continued, of electing the required number of Managers to the
Board. If the Members shall determine at such meeting not to continue the
business of TEI 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 TEI shall be dissolved pursuant to Section 6.1 hereof and the assets of TEI
shall be liquidated and distributed pursuant to Section 6.2 hereof.
2.7 MEMBERS
TEI may offer Units for purchase by investors (including through exchange) in
such manner and at such times as may be determined by the Board. All
subscriptions for Units are subject to the receipt by TEI 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 TEI as a Member subject to the condition that such person shall
execute an appropriate signature page of this Agreement or an investor
application or certification form pursuant to which such Member agrees to be
bound by all the terms and provisions of this Agreement. The Board may in its
sole discretion reject any subscription for Units. The Board may, in its sole
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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 TEI to reflect the name and the contribution to the capital of TEI of such
additional Member.
2.8 INITIAL CONTRIBUTION
The initial contribution of capital to TEI by Glenwood shall be represented by
Units, which Units shall have the same rights as other Units held by Members.
2.9 BOTH MANAGERS AND MEMBERS
A Member may also be a Manager, 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 the Delaware Act or the 1940 Act, a Member shall not be
liable for TEI'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 the Delaware Act or
the 1940 Act, a Manager shall not be liable for TEI's debts, obligations, and
liabilities.
ARTICLE III: MANAGEMENT
3.1 MANAGEMENT AND CONTROL
(a) Management and control of the business of TEI shall be vested in the Board,
which shall have the right, power, and authority, on behalf of TEI 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 TEI and their duties hereunder. No Manager shall have
the authority individually to act on behalf of or to bind TEI except within the
scope of such Manager's authority as delegated by the Board. 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 TEI 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 TEI as are customarily
vested in each director of a closed-end management investment company registered
under the 1940 Act that is organized as a Delaware corporation who is not an
"interested person" of such company, as such term is defined by the 1940 Act.
During any period in which TEI shall have no Managers, Glenwood, as the initial
Member, shall have the authority to manage the business and affairs of TEI.
(b) Members shall have no right to participate in and shall take no part in the
management or control of TEI's business and shall have no right, power or
authority to act for or bind TEI. Members shall have the right to vote on any
matters only as provided in this Agreement or on any matters that require the
8
approval of the holders of voting securities under the 1940 Act or as otherwise
required in the Delaware Act.
(c) The Board may delegate to any other person any rights, power and authority
vested by this Agreement in the Board to the extent permissible under applicable
law, and may appoint persons to serve as officers of TEI, with such titles and
authority as may be determined by the Board consistent with applicable law.
(d) The Board shall have full power and authority to adopt By-Laws providing for
the conduct of the business of TEI and containing such other provisions as they
deem necessary, appropriate or desirable, and, subject to the voting powers of
one or more Classes created pursuant to this section 3.1, to amend and repeal
such By-Laws. Unless the By-Laws specifically require that Members authorize or
approve the amendment or repeal of a particular provision of the By-Laws, any
provision of the By-Laws may be amended or repealed by the Board without Member
authorization or approval.
(e) The Board shall have the full power and authority, without Member approval,
to authorize one or more Classes of Units; Units of each such Class having such
preferences, voting powers and special or relative rights or privileges
(including conversion rights, if any) as the Board may determine and as shall be
set forth in a resolution adopted in accordance with the By-Laws.
3.2 ACTIONS BY THE BOARD OF MANAGERS
(a) Unless provided otherwise in this Agreement, the Board 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 1940 Act.
(b) The Board may designate from time to time a Principal Manager who shall
preside at all meetings of the Board. Meetings of the Board 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 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 MEETINGS OF MEMBERS
(a) Actions requiring the vote of the Members may be taken at any duly
constituted meeting of the Members at which a quorum is present. Meetings of the
Members may be called by the Board or by Members holding 25% or more of the
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total number of votes eligible to be cast by all Members, and may be held at
such time, date and place as the Board shall determine. The Board shall arrange
to provide written notice of the meeting, stating the date, time, and place of
the meeting and the record date therefor, to each Member entitled to vote at the
meeting within a reasonable time prior thereto. Failure to receive notice of a
meeting on the part of any Member shall not affect the validity of any act or
proceeding of the meeting, so long as a quorum shall be present at the meeting,
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 Unit ownership as of the record date for such
meeting. The Board 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, provided that such
proxy to act is authorized to act by (i) a written instrument properly executed
by the Member and filed with TEI before or at the time of the meeting or (ii)
such electronic, telephonic, computerized or other alternative means as may be
approved by a resolution adopted by the Board. A proxy may be suspended or
revoked, as the case may be, by the Member executing the proxy by a later
writing delivered to TEI at any time prior to exercise of the proxy or if the
Member executing the proxy shall be present at the meeting and decide to vote in
person. Any action of the Members that is permitted to be taken at a meeting of
the Members may be taken without a meeting if consents in writing, setting forth
the action taken, are signed by Members holding a majority of the total number
of votes eligible to be cast or such greater percentage as may be required in
order to approve such action.
3.4 CUSTODY OF TEI'S ASSETS
The physical possession of all funds, Securities, or other properties of TEI
shall at all times, be held, controlled and administered by one or more
custodians retained by TEI in accordance with the requirements of the 1940 Act
and the rules thereunder.
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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 TEI, 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.
3.6 DUTY OF CARE
(a) No Manager shall be liable to TEI or to any of its Members for any loss or
damage occasioned by any act or omission in the performance of its services
pursuant to any agreement, including this Agreement, between a Manager and TEI
for the provision of services to TEI 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 constituting willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the performance of its services to TEI.
(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 TEI, any
Member, or third parties only as provided under the Delaware Act.
3.7 INDEMNIFICATION
(a) To the fullest extent permitted by law, TEI 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 TEI or the past or present performance of services to TEI 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
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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 TEI 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 TEI 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) TEI 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 TEI 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 TEI 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 TEI and that such indemnitee is not liable to TEI 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
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 TEI 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.
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(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 TEI 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 TEI to recover any indemnification or advancement of expenses made
pursuant to this Section 3.7 TEI 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 TEI (or any Member acting derivatively or otherwise on
behalf of TEI 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 TEI, 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 TEI to purchase and maintain liability insurance on behalf of any
Manager or other person.
3.8 FEES, EXPENSES AND REIMBURSEMENT
(a) The Board may cause TEI to compensate each Manager who is not an "interested
person" of TEI (as defined in the 1940 Act), and such Manager shall be
reimbursed by TEI for reasonable travel and out-of-pocket expenses incurred by
him in performing his duties under this Agreement.
(b) TEI shall bear all costs and expenses incurred in its business and
operations. Costs and expenses to be borne by TEI include, but are not limited
to, the following:
(1) all costs and expenses directly related to investment transactions and
positions for TEI's account, including, but not limited to, brokerage
commissions, research fees, interest and commitment fees on loans and debit
balances, borrowing charges on securities sold short, dividends on securities
sold but not yet purchased, custodial fees, margin fees, transfer taxes and
premiums, taxes withheld on foreign dividends, and indirect expenses from
investments in Investment Funds;
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(2) all costs and expenses associated with the operation and registration of
TEI, offering costs and the costs of compliance with applicable Federal and
state laws;
(3) all costs and expenses associated with the organization and operation of
separate investment funds managed by Investment Managers retained by TEI;
(4) the costs and expenses of holding meetings of the Board and any meetings of
Members, including costs associated with the preparation and dissemination of
proxy materials;
(6) the fees and disbursements of TEI's counsel, legal counsel to the
Independent Managers, independent accountants for TEI, and other consultants and
professionals engaged on behalf of TEI;
(7) the fees payable to custodians and other persons providing administrative
services to TEI;
(8) the costs of a fidelity bond and any liability insurance obtained on behalf
of TEI or the Board;
(9) all costs and expenses of preparing, setting in type, printing, and
distributing reports and other communications to Members; and
(10) such other types of expenses as may be approved from time to time by the
Board.
(c) Subject to procuring any required regulatory approvals, from time to time
TEI may, alone or in conjunction with other registered or unregistered
investment funds or other accounts for which Glenwood, or any Affiliate of
Glenwood, acts as general partner or investment adviser, purchase insurance in
such amounts, from such insurers and on such terms as the Board shall determine.
ARTICLE IV: TERMINATION OF STATUS OF ADVISER AND MANAGERS,
TRANSFERS AND REPURCHASES
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; (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 TEI
under the Delaware Act. Managers shall required to retire as of December 31 of
the year in which they reach 75 years of age.
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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.
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 (which may be withheld
in its sole discretion); provided, however, that the Board 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 may consent
pursuant to the following sentence. The Board 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 shall consult with counsel to
TEI to ensure that such pledge, transfer, or assignment will not cause TEI 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 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 may not consent to a Transfer of Units 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 believes is a "Eligible Investor" as described in Form N-2; and (ii) all
the Units of the Member are Transferred to a single transferee or, after the
Transfer of less than all the Member's Units, the balance of the Capital Account
of each of the transferee and transferor is not less than $10,000. 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, the Board shall promptly take all
necessary actions so that the transferee to whom such Units are transferred is
admitted to TEI as a Member. Each Member effecting a Transfer and its transferee
agree to pay all expenses, including attorneys' and accountants' fees, incurred
by TEI in connection with such Transfer.
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(c) Each Member shall indemnify and hold harmless TEI, the Managers, 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.
4.4 REPURCHASE OF UNITS
(a) Except as otherwise provided in this Agreement, no Member or other person
holding Units shall have the right to withdraw or tender to TEI for repurchase
of those Units. The Board from time to time, in its sole discretion and on such
terms and conditions as it may determine, may cause TEI to repurchase Units
pursuant to written tenders. However, TEI shall not offer to repurchase Units on
more than four 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 TEI or the Members. In determining whether to
cause TEI to repurchase Units pursuant to written tenders, the Board shall
consider the following factors, among others:
(1) whether any Members have requested to tender Units to TEI;
(2) the liquidity of TEI's assets;
(3) the investment plans and working capital requirements of TEI;
(4) the relative economies of scale with respect to the size of TEI;
(5) the history of TEI in repurchasing Units;
(6) the economic condition of the securities markets; and
(7) the anticipated tax consequences of any proposed repurchases of Units.
The Board shall cause TEI to repurchase Units pursuant to written tenders only
on terms determined by the Board to be fair to TEI 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 at least equal to
$10,000. If a Member tenders an amount that would cause the Member's capital
account balance to fall below the required minimum, TEI reserves the right to
reduce the amount to be purchased from the Member so that the required minimum
balance is maintained or to repurchase all of the tendering Member's Units.
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(c) The Board may cause TEI to repurchase Units of a Member or any person
acquiring Units from or through a Member in the event that the Board determines
or has reason to believe that:
(1) such Units have been transferred in violation of Section 4.3 hereof, or such
Units 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 TEI to be in
violation of, or subject TEI 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 TEI, the Managers, or Glenwood, or may subject TEI or
any of the Members to an undue risk of adverse tax or other fiscal consequences;
(4) such Member's continued participation in TEI may cause TEI 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 Units was not true when made or has ceased to be true;
or
(6) it would be in the best interests of TEI, as determined by the Board in its
sole discretion, for TEI to repurchase such Units.
(d) Provided that the Board shall have made a determination to repurchase Units,
Units will be valued for purposes of determining their repurchase price as of
the end of each fiscal quarter (a "Valuation Date"). Units to be repurchased
pursuant to subsection 4.4(c) shall be tendered by the affected Members, and
payment for such Units shall be made by TEI, at such times as TEI shall set
forth in its notice to the affected Members. Units being tendered by Members
pursuant to subsection 4.4(a) shall be tendered by Members at least thirty (30)
days prior to the applicable Valuation Date. TEI shall pay the repurchase price
for tendered Units approximately, but no earlier than, thirty (30) days after
the applicable Valuation Date. The voting rights of Members as provided in this
Agreement with respect to the tendered Units shall continue until such time as
the Initial Payment (as defined below) of the repurchase price is paid under
this subsection 4.4(d). Payment of the repurchase price for Units shall consist
of cash in an amount equal to such percentage (generally expected to be 100% or
95%), as may be determined by the Board, of the estimated unaudited net asset
value of the Units repurchased by TEI determined as of the Valuation Date
relating to such Units (the "Initial Payment"). TEI shall establish an escrow to
hold funds reasonably determined by the Board to be needed to make both the
Initial Payment and, if the Initial Payment is less than 100% of the estimated
unaudited net asset value, the balance of such estimated net asset value. TEI
shall pay the balance, if any, of the purchase price based on the audited
financial statements of TEI for the Fiscal Year in which such repurchase was
effective. Notwithstanding anything in the foregoing to the contrary, the Board,
in its discretion, may pay any portion of the repurchase price in marketable
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Securities (or any combination of marketable Securities and cash) having a
value, determined as of the Valuation Date relating to such Units, equal to the
amount to be repurchased.
(e) A Member may at any time submit to TEI a written request that TEI repurchase
all of the Units of such Member, as contemplated by Section 6.1(3) hereof. Any
such request shall be sent to TEI by registered or certified mail, return
receipt requested, and shall be deemed valid only upon the Member's receipt of
TEI's written acknowledgement of the Member's request, which acknowledgement
shall be provided by TEI promptly upon its receipt of the Member's request.
ARTICLE V: CAPITAL
5.1 CONTRIBUTIONS TO CAPITAL
(a) The minimum initial contribution of each Member to the capital of TEI shall
be such amount as the Board, 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 TEI upon acceptance as a contribution to the capital of
TEI. The Managers shall not be entitled to make contributions of capital to TEI
as Managers of TEI, but may make contributions to the capital of TEI as Members.
(b) Members may make additional contributions to the capital of TEI effective as
of such times as the Board, 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 TEI. The minimum initial capital contribution of a Member to
the capital of TEI shall be such amount as the Board, in its sole discretion,
may determine from time to time.
(c) Initial and any additional contributions to the capital of TEI by any Member
shall be payable in cash, payable in readily available funds at the date of the
proposed acceptance of the contribution.
5.2 RIGHTS OF MEMBERS TO CAPITAL
No Member shall be entitled to interest on any contribution to the capital of
TEI, nor shall any Member be entitled to the return of any capital of TEI except
(i) upon the repurchase by TEI of a part or all of such Member's Units pursuant
to Section 4.4 hereof, (ii) pursuant to the provisions of Section 5.7 hereof or
(iii) upon the liquidation of TEI'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 TEI's property or to compel any sale or
appraisal of TEI's assets.
5.3 CAPITAL ACCOUNTS
(a) TEI shall maintain a separate Capital Account for each Member. The aggregate
Net Asset Value of each Member's Units shall reflect the value of such Member's
Capital Account.
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(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
TEI.
(c) Each Member's Capital Account shall be increased by the sum of (i) the
amount of cash constituting additional contributions by such Member to the
capital of TEI permitted pursuant to Section 5.1 hereof, plus (ii) all amounts
credited to such Member's Capital Account pursuant to Sections 5.4 and 5.5
hereof.
(d) Each Member's Capital Account shall be reduced by the sum of (i) the amount
of any repurchase of the Units of such Member or distributions to such Member
pursuant to Sections 4.4, 5.7 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 and 5.5 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 Unit ownership for
such Fiscal Period.
5.5 RESERVES
Appropriate reserves may be created, accrued, and charged against Net Assets for
contingent liabilities, if any, as of the date any such contingent liability
becomes known to the Board, such reserves to be in the amounts that the Board,
in its sole discretion, deems necessary or appropriate. The Board may increase
or reduce any such reserves from time to time by such amounts as the Board, in
its sole discretion, deems necessary or appropriate.
5.6 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 5.6 shall be made pursuant to the principles of Sections 704(b) and
704(c) of the Code, and in conformity with 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
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 Regulation Section
1.704-1(b)(2)(ii)(d).
Notwithstanding the preceding paragraph, in the event that the Fund repurchases
a Member's Units, the Board may, in its sole discretion, specially allocate
items of Fund income and gain to that Member for tax purposes to reduce the
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amount, if any, by which that Member's repurchase price exceeds that Member's
tax basis for its Fund Units.
5.7 DISTRIBUTIONS
The Board, in its sole discretion, may authorize TEI 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' Unit ownership.
5.8 WITHHOLDING
(a) The Board 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.
(b) For purposes of this Agreement, any taxes so withheld by TEI with respect to
any amount distributed by TEI 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
TEI as a contribution to the capital of TEI, upon demand of the Board, the
amount of such excess.
(c) The Board 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
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 TEI 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
TEI shall be dissolved:
(1) upon the affirmative vote to dissolve TEI by the Board;
(2) upon the failure of Members to elect a successor Manager at a meeting called
by Glenwood in accordance with Section 2.6(c) hereof when no Manager remains to
continue the business of TEI;
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(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 4.4(e) hereof, a written notice to TEI requesting the repurchase of all
of such Member's Units by TEI, if such Units have not been repurchased by TEI;
or
(4) as required by operation of law.
Dissolution of TEI 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 and Members may elect to continue the
business of TEI as provided above, but TEI shall not terminate until the assets
of TEI 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 TEI as provided in Section 6.1 hereof, the Board
shall promptly appoint Glenwood as the liquidator and Glenwood shall liquidate
the business and administrative affairs of TEI, except that if the Board does
not appoint Glenwood as the liquidator or Glenwood 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 TEI. 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 or liquidator shall deem appropriate
in its sole discretion as applicable) shall be distributed in the following
manner:
(1) the debts of TEI, 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 TEI'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 TEI, the Board or other liquidator may distribute ratably in kind
any assets of TEI; 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.
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ARTICLE VII: ACCOUNTING, VALUATIONS, AND BOOKS AND RECORDS
7.1 ACCOUNTING AND REPORTS
(a) TEI shall adopt for tax accounting purposes any accounting method that the
Board shall decide in its sole discretion is in the best interests of TEI. TEI's
accounts shall be maintained in U.S. currency.
(b) After the end of each taxable year, TEI shall furnish to each Member such
information regarding the operation of TEI 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, TEI
shall furnish to each Member a semi-annual report and an annual report
containing the information required by such Act. TEI 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. TEI 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 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 may make such adjustments to the computation of Net Profit or Net
Loss or any components comprising any of the foregoing as it considers
appropriate to reflect fairly and accurately the financial results of TEI and
the intended allocation thereof among the Members.
7.3 Valuation of Assets
(a) Except as may be required by the 1940 Act, the Board shall value or have
valued any Securities or other assets and liabilities of TEI 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 and which
conform to the requirements of the 1940 Act. In determining the value of the
assets of TEI, no value shall be placed on the goodwill or name of TEI, or the
office records, files, statistical data, or any similar intangible assets of TEI
not normally reflected in TEI'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,
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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) TEI will value interests in Investment Funds at their "fair value," as
determined in good faith by the Board, which value ordinarily will be the value
of an interest in an Investment Fund determined by the Investment Manager of the
Investment Fund in accordance with the policies established by the Investment
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 TEI and the net worth of TEI 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 (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 TEI; or
(2) reduce the Capital Account of a Member;
may be made only if (i) the written consent of each Member adversely affected
thereby is obtained prior to the effectiveness thereof or (ii) such amendment
does not become effective until (A) each Member has received written notice of
such amendment and (B) any Member objecting to such amendment has been afforded
a reasonable opportunity (pursuant to such procedures as may be prescribed by
the Board) to tender all of its Units for repurchase by TEI.
(c) The power of the Board 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(a) 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
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(3) amend this Agreement to make such changes as may be necessary or advisable
to ensure that TEI 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 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.
8.2 SPECIAL POWER OF ATTORNEY
(a) Each Member hereby irrevocably makes, constitutes and appoints each Manager,
acting severally, and any liquidator of TEI'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 TEI; and
(3) all such other instruments, documents, and certificates that, in the opinion
of legal counsel to TEI, 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 TEI 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 TEI 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 TEI without such Member's consent. If an
amendment to the Certificate or this Agreement or any action by or with respect
to TEI 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
TEI.
(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:
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(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 TEI or Board shall have had notice thereof; and
(2) shall survive the delivery of a Transfer by a Member of such Member's Units,
except that where the transferee thereof has been approved by the Board for
admission to TEI 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 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 may or are
required to be provided under this Agreement shall be made, if to a Member, by
regular mail, or if to TEI or the Board, 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 TEI. 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 affect numerous aspects of the conduct of TEI's business and of the
rights, privileges, and obligations of the Members. Each provision of this
Agreement shall be subject to and interpreted in a manner consistent with the
applicable provisions of the 1940 Act and the Form N-2.
8.6 CHOICE OF LAW
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.
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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 TEI. 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 TEI.
8.9 MERGER AND CONSOLIDATION
(a) TEI may merge or consolidate with or into one or more limited liability
companies or other business entities pursuant to an agreement of merger or
consolidation that has been approved by the Board in the manner contemplated by
Section 18-209(b) of the Delaware Act or may sell, lease or exchange all or
substantially all of TEI property, including its good will, upon such terms and
conditions and for such consideration when and as authorized by the Board.
(b) Notwithstanding anything to the contrary contained elsewhere in this
Agreement, an agreement of merger or consolidation approved by the Board 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 TEI 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 TEI such information regarding the affairs of TEI
as is just and reasonable under the Delaware Act, subject to reasonable
standards (including standards governing what information and documents are to
be furnished, at what time and location and at whose expense) established by the
Board.
(b) Each Member covenants that, except as required by applicable law or any
regulatory body, it will not divulge, furnish, or make accessible to any other
person the name and/or address (whether business, residence, or mailing) of any
Member (collectively, "Confidential Information") without the prior written
consent of the Board, which consent may be withheld in its sole discretion.
(c) Each Member recognizes that in the event that this Section 8.11 is breached
by any Member or any of its principals, partners, members, directors, officers,
employees, or agents or any of its Affiliates, including any of such Affiliates'
principals, partners, members, directors, officers, employees, or agents,
irreparable injury may result to the non-breaching Members and TEI. Accordingly,
in addition to any and all other remedies at law or in equity to which the
non-breaching Members and TEI 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 TEI 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.
8.12 CERTIFICATION OF NON-FOREIGN STATUS
Each Member or transferee of Units from a Member shall certify, upon admission
to TEI and at such other times thereafter as the Board 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 TEI, and shall notify TEI within 60 days of
any change in such Member's status.
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 or its designated agent shall prepare and file, or cause the
accountants of TEI 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 TEI.
8.15 TAX MATTERS PARTNER
(a) A Manager who is a Member shall be designated on TEI's annual Federal income
tax return, and have full powers and responsibilities, as the Tax Matters
Partner of TEI for purposes of Section 6231(a)(7) of the Code. Glenwood shall be
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the initial Tax Matters Partner of TEI. 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 TEI 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 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 TEI under Section 6231(a)(7) of the Code shall be
indemnified and held harmless by TEI 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 TEI holding such interests
through such Pass-Thru Member. In the event TEI shall be the subject of an
income tax audit by any Federal, state, or local authority, to the extent TEI 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, TEI and each Member
thereof. All expenses incurred in connection with any such audit, investigation,
settlement, or review shall be borne by TEI.
8.16 SECTION 754 ELECTION
In the event of a distribution of TEI's property to a Member or an assignment or
other transfer (including by reason of death) of Units of a Member in TEI, at
the request of a Member, the Board, in its discretion, may cause TEI to elect,
pursuant to Section 754 of the Code, or the corresponding provision of
subsequent law, to adjust the basis of TEI's property as provided by Sections
734 and 743 of the Code.
8.17 USE OF NAMES "MAN," "GLENWOOD," "MAN-GLENWOOD" "LEXINGTON" AND "TEI"
Man Investments Inc. ("Man") and Glenwood each hereby grants to TEI a
royalty-free, non-exclusive license to use the names "Man," "Glenwood,"
"Man-Glenwood," "Lexington" and "TEI" respectively, in the name of TEI. Such
license may, at such time as neither Glenwood nor an Affiliate of Glenwood shall
serve as an investment adviser to TEI of Man-Glenwood Lexington Portfolio
Associates, LLC, or upon termination of this Agreement, be terminated by Man and
Glenwood, respectively, in which event TEI shall promptly take whatever action
may be necessary to change its name and discontinue any further use of the name
"Man," "Glenwood," "Man-Glenwood," "Lexington" and "TEI" as the case may be, in
the name of TEI or otherwise. The names "Man," "Glenwood," "Man-Glenwood,"
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"Lexington" and "TEI" may be used or licensed by Man or Glenwood, respectively,
in connection with any of its activities, or licensed by Man or Glenwood,
respectively, to any other party.
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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.
MANAGER:
-----------------------------
▇▇▇▇ ▇▇▇▇▇
INITIAL MEMBER:
GLENWOOD CAPITAL INVESTMENTS, L.L.C.
By:
----------------------------
Name:
Title:
MEMBERS:
Each person who shall sign an investor application or certification and who
shall be accepted by the Board to TEI as a Member.
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