Exhibit A
AMENDED AND RESTATED OPERATING AGREEMENT
OF
ING CLARION INVESTORS LLC
THIS AMENDED AND RESTATED OPERATING AGREEMENT, among each person who
executes this Agreement as a Member and the Initial Member, is dated and
effective January 30, 2004. Capitalized terms not otherwise defined shall have
the meanings ascribed to them in Article I.
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
"Advisers Act" means the Investment Advisers Act of 1940, as amended,
and the rules, regulations and orders thereunder, as amended from time to time,
or any successor law.
"Affiliate" means an affiliated person of a person as such term is
defined in the 1940 Act.
"Agreement" means this Operating Agreement, as amended from time to
time.
"Board of Directors" means the Board of Directors established pursuant
to Section 2.6 of this Agreement.
"Business Day" means each day on which the New York Stock Exchange is
open for business.
"Capital Account" means, with respect to each Member, the capital
account(s) established and maintained on behalf of each Member pursuant to
Section 5.4 hereof.
"Capital Contribution" means the amount paid by a Member to the
Company as a contribution to capital.
"Certificate" means the Certificate of Formation of the Company and
any amendments thereto as filed with the office of the Secretary of State of the
State of Delaware.
"Closing Date" means January 30, 2004.
"Code" means the United States Internal Revenue Code of 1986, as
amended from time to time, or any successor law.
"Company" means ING Clarion Investors LLC.
"Confidential Information" means (i) information or materials relating
to the Company, the Investment Fund, the Delaware Partnership, any Issuer or any
Partnership Investment (both as defined in the Investment Fund Partnership
Agreement) that are not generally known to the public (including but not limited
to products or services, pricing structures, accounting and business methods,
inventions, devices, new developments, methods and processes, names of
investors, customers and clients and customer or client lists, copyrightable
works and all technology, trade secrets and other proprietary information), (ii)
information or materials the disclosure of which the Board of Directors in good
faith believes is not in the best interests of the Company or any Issuer, and
(iii) any other information or materials which the Company, the Investment Fund,
the Delaware Partnership or any Issuer is required by law or agreement to keep
confidential.
"Delaware Act" means the Delaware Limited Liability Company Act, as in
effect on the date hereof and as amended from time to time, or any successor
law.
"Delaware Partnership" means ING Clarion Commercial Mortgage
Securitization Fund, L.P., a Delaware limited partnership.
"Director" means an individual designated as a Director of the Company
pursuant to the provisions of Section 2.6 of this Agreement and who serves on
the Board of Directors of the Company.
"Final Closing Date" means the last day on which the Investment Fund
may hold its "Final Closing" pursuant to the Investment Fund Partnership
Agreement.
"Fiscal Period" means the period commencing on the Closing Date and
thereafter each period commencing on the day immediately following the last day
of the preceding Fiscal Period and ending at the close of business on the first
to occur of the following dates: (i) the last day of a Fiscal Quarter; (ii) the
last day of a Taxable Year; (iii) the day preceding any day as of which a
Capital Contribution is made pursuant to Section 5.1 hereof; and (iv) any other
day as of which this Agreement provides for any amount to be credited to or
debited against the Capital Account of any Member other than an amount to be
credited to or debited against the Capital Accounts of all Members in accordance
with their respective Investment Percentages.
"Fiscal Quarter" means the period commencing on the Closing Date and
ending March 31, 2004, and thereafter the fiscal quarter ending on each June 30,
September 30, December 31 and March 31 (or on the date of a final distribution
pursuant to Section 6.2 hereof).
"Fiscal Year" means the period commencing on the Closing Date and
ending on December 31, 2004, and thereafter each 12-month period ending on
December 31 of each year (or on the date of a final distribution pursuant to
Section 6.2 hereof), unless the Board of Directors shall elect another fiscal
year for the Company.
"Form N-2" means the Company's registration statement on Form N-2
filed with the Securities and Exchange Commission, as amended from time to time.
"Initial Agreement" means the Operating Agreement of ING Clarion
Investors, LLC dated January 28, 2004 executed by the Initial Member.
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"Initial Member" means ING Clarion Capital, LLC.
"Independent Directors" means those Directors who are not "interested
persons" of the Company, as such term is defined in the 1940 Act.
"Investment Fund" means ING Clarion Commercial Mortgage Securitization
Fund (Cayman), L.P., a Cayman Islands exempted limited partnership.
"Investment Fund Partnership Agreement" means the agreement of limited
partnership of ING Clarion Commercial Mortgage Securitization Fund (Cayman),
L.P., as amended from time to time.
"Investment Fund Subscription Agreement" means a subscription
agreement between the Company and the Investment Fund pursuant to which the
Company has subscribed to purchase a limited partnership interest in the
Investment Fund.
"Investment Percentage" means a percentage established for each Member
on the Company's books as of the first day of each Fiscal Period. The Investment
Percentage of a Member for a Fiscal Period shall be determined by dividing the
number of Shares held by such Member as of the commencement of such Fiscal
Period by the total number of Shares outstanding as of the commencement of such
Fiscal Period. The sum of the Investment Percentages of all Members for each
Fiscal Period shall equal 100%.
"Majority in Interest of the Members" means a combination of Members
holding in the aggregate more than 50% of the outstanding Shares.
"Member" means any person who shall have been admitted to the Company
as a member (including any Director in such person's capacity as a member of the
Company) until a substituted Member or Members has been admitted with respect to
all of such person's Shares pursuant to Section 4.3 hereof. Persons seeking to
be admitted to the Company as Members, or seeking to make additional
contributions to the Company pursuant to Section 5.1 hereof, shall be required
to submit such subscription materials and make such representations as the
Company may require.
"Net Assets" means the total value of all assets of the Company, less
an amount equal to all accrued debts, liabilities and obligations of the
Company, calculated before giving effect to any Capital Contributions effective
as of the date of calculation.
"Net Asset Value per Share" means the Net Assets of the Company
divided by the number of Shares outstanding.
"Net Profit" or "Net Loss" means the amount by which the Net Assets as
of the close of business on the last day of a Fiscal Period exceed (in the case
of Net Profit) or are less than (in the case of Net Loss) the Net Assets as of
the commencement of the same Fiscal Period, such amount to be calculated prior
to without deduction for any and amounts distributed as of the close of such
Fiscal Period pursuant to Section 5.7 hereof.
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"1940 Act" means the Investment Company Act of 1940 and the rules,
regulations and orders thereunder, as amended from time to time, or any
successor law.
"Organizational Expenses" means the expenses incurred by the Company,
the Investment Fund and the Delaware Partnership in connection with the
formation of each such entity and the Company's registration as an investment
company under the 1940 Act.
"Securities" means securities (including, without limitation,
equities, debt obligations, options, and other "securities" as that term is
defined in section 2(a)(36) of the ▇▇▇▇ ▇▇▇) and any contracts for forward or
future delivery of any security, debt obligation or currency, or commodity, all
types of derivative instruments and any contracts based on any index or group of
securities, debt obligations or currencies, or commodities, and any options
thereon, as well as investments in registered investment companies and private
investment funds.
"Short-Term Investments" means investments in (a) cash, (b)
obligations of, or fully guaranteed as to timely payment of principal and
interest by, the United States of America and with a maturity date not in excess
of 12 months from the date of purchase by the Partnership, (c) interest-bearing
accounts and/or certificates of deposit of any U.S. bank with capital and
surplus in excess of $500 million and whose debt securities are rated not lower
than P-1 by ▇▇▇▇▇'▇ Investor Services, Inc. or A-1 by Standard & Poor's
Corporation, (d) repurchase agreements of any U.S. bank with capital and surplus
in excess of $500 million and whose debt securities are rated not lower than P-1
by ▇▇▇▇▇'▇ Investor Services, Inc. or A-1 by Standard & Poor's Corporation, and
(e) money market mutual funds with assets of not less than $500 million.
"Subscription Agreement" means a subscription agreement, in a form
approved by the Board of Directors, pursuant to which a prospective investor may
subscribe to purchase Shares.
"Taxable Year" means the 12-month period ending December 31 of each
year (or the period ending December 31, 2004 with respect to the Company's first
taxable year).
"Transfer" means the assignment, transfer, sale, encumbrance, pledge
or other disposition of Shares, including any right to receive any allocations
and distributions attributable to any Shares.
"Shares" means limited liability company interests in the Company.
"Valuation Date" means the last day of each Fiscal Period and any
other date designated by the Board of Directors.
ARTICLE II
ORGANIZATION; ADMISSION OF MEMBERS
Section 2.1 Formation of Limited Liability Company. Each member of the
Board of Directors shall be designated an "authorized person" within the meaning
of the Delaware Act, and any Director may execute and file in accordance with
the Delaware Act any
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amendment to the Certificate and shall execute and file with applicable
governmental authorities any other instruments, documents and certificates that,
in the opinion of the Company's legal counsel, may from time to time be required
by the laws of the United States of America, the State of Delaware or any other
jurisdiction in which the Company shall determine to do business, or any
political subdivision or agency thereof, or which such legal counsel may deem
necessary or appropriate to effectuate, implement and continue the valid
existence and business of the Company. The parties hereto hereby ratify ▇▇▇▇▇▇
▇▇▇▇▇▇ as an "authorized person" within the meaning of the Delaware Act for the
exclusive purpose of executing, delivering and filing the Certificate with the
Secretary of State of the State of Delaware.
Section 2.2 Name. The name of the Company shall be "ING Clarion
Investors LLC" or such other name as the Board of Directors may hereafter adopt
upon (i) causing an appropriate amendment to the Certificate to be filed in
accordance with the Delaware Act and (ii) sending notice thereof to each Member.
Section 2.3 Principal And Registered Office. The Company shall have
its principal office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other
place designated from time to time by the Board of Directors.
The Company shall have its registered office in Delaware at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and shall have The Corporation Trust
Company as its registered agent for service of process in Delaware, unless a
different registered office or agent is designated from time to time by the
Board of Directors.
Section 2.4 Duration. The term of the Company commenced on the filing
of the Certificate with the Secretary of State of Delaware and shall continue
until the Company is dissolved pursuant to Section 6.1 hereof. A Director or
other person designated by the Board of Directors shall execute, deliver and
file any other certificates (and any amendments and/or restatements thereof)
necessary for the Company to qualify to do business in any jurisdiction in which
the Company may wish to conduct business.
Section 2.5 Objective and Business of the Company. (a) The objective
and business of the Company is to purchase a limited partnership interest in the
Investment Fund in accordance with the terms of the Investment Fund Subscription
Agreement. The Company may execute, deliver and perform all contracts,
agreements and other undertakings and engage in all activities and transactions
that may in the opinion of the Board of Directors be necessary or advisable to
carry out its objective or business.
(b) The Company shall operate as a closed-end, nondiversified,
management investment company in accordance with the 1940 Act and subject to any
fundamental policies and investment restrictions set forth in the Form N-2.
Section 2.6 Board of Directors. (a) The Director currently serving on
the Board of Directors is ▇▇▇▇▇▇ ▇▇▇▇▇. By signing this Agreement, each Member
admitted on the Closing Date is deemed to have voted for the election of each of
the initial Director to the Board of Directors. The Board of Directors may,
subject to the provisions of paragraphs (a) and (b) of this Section 2.6 with
respect to the number of and vacancies in the position of Director of and the
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provisions of Section 3.3 hereof with respect to the election of Directors to
the Board of Directors by Members, designate any person who shall agree to be
bound by all of the terms of this Agreement as a Director. The names and mailing
addresses of the Directors shall be set forth in the books and records of the
Company. The number of Directors shall be fixed from time to time by the Board
of Directors.
(b) Each Director shall serve on the Board of Directors for the
duration of the term of the Company, unless his or her status as a Director
shall be sooner terminated pursuant to Section 4.1 hereof. In the event of any
vacancy in the position of Director, the remaining Directors may appoint an
individual to serve in such capacity, so long as immediately after such
appointment at least two-thirds (2/3) of the Directors then serving would have
been elected by the Members. The Board of Directors may call a meeting of
Members to fill any vacancy in the position of Director, and shall do so within
60 days after any date on which Directors who were elected by the Members cease
to constitute a majority of the Directors then serving on the Board of
Directors.
(c) Each director shall be a "Manager" of the Company for purposes the
Delaware Act.
Section 2.7 Members. The Board of Directors may admit one or more
Members as of any day on or before the Final Closing Date. All admissions shall
be subject to receipt by the Company of such documents and representations and
satisfaction of such other conditions as may be required by the Board of
Directors. No act, vote or approval of any Member of the Company is required to
admit a new Member in accordance with this Section 2.7.
Section 2.8 Both Directors and Members. A Member may at the same time
be a Director and a Member, in which event such Member's rights and obligations
in each capacity shall be determined separately in accordance with the terms and
provisions hereof or as provided in the Delaware Act.
Section 2.9 Limited Liability. Except as provided under applicable
law, a Member shall not be liable for the Company's debts, obligations and
liabilities in any amount in excess of the Member's share of the Net Assets of
the Company. Except as provided under applicable law, a Director shall not be
liable for the Company's debts, obligations and liabilities.
Section 2.10 Preference Shares. In the discretion of the Board of
Directors, the Company may from time to time issue non-participating equity
shares or similar securities ("Preference Shares") subject to such terms and
conditions as determined by the Board of Directors, provided that Preference
Shares (i) shall be issued at par value, (ii) shall mature upon liquidation of
the Company, (iii) shall pay cumulative dividends not in excess of five percent,
and (iv) shall be paid the par value of and any accrued and unpaid dividends
thereon in priority to any distributions with respect to Shares upon dissolution
of the Company. Preference Shares shall only be issued in compliance with the
1940 Act and any other applicable law. In no event shall the Company issue
Preference Shares that have an aggregate par value in excess of $100,000.
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Section 2.11 Short-Term Investments. The Company shall invest cash on
hand in Short-Term Investments.
ARTICLE III
MANAGEMENT
Section 3.1 Management and Control. (a) Management and control of the
business of the Company shall be vested in the Board of Directors, which shall
have the right, power and authority, on behalf of the Company and in its name,
to exercise all rights, powers and authority of "Managers" under the Delaware
Act and to do all things necessary and proper to carry out the objective and
business of the Company and their duties hereunder. No Director shall have the
authority individually to act on behalf of or to bind the Company except within
the scope of such Director's authority as delegated by the Board of Directors.
The parties hereto intend that, except to the extent otherwise expressly
provided herein, (i) each Director shall be vested with the same powers,
authority and responsibilities on behalf of the Company as are customarily
vested in each director of a Delaware corporation and (ii) each Independent
Director shall be vested with the same powers, authority and responsibilities on
behalf of the Company as are customarily vested in each director of a closed-end
management investment company registered under the 1940 Act that is organized as
a Delaware corporation who is not an "interested person" of such company as such
term is defined in the 1940 Act.
(b) Each Member agrees not to treat, on his personal income tax return
or in any claim for a tax refund, any item of income, gain, loss, deduction or
credit in a manner inconsistent with the treatment of such item by the Company.
The Board of Directors shall have the exclusive authority and discretion to make
any elections required or permitted to be made by the Company under any
provisions of the Code or any other revenue laws.
(c) Members shall have no right to participate in and shall take no
part in the management or control of the Company's business and shall have no
right, power or authority to act for or bind the Company. Members shall have the
right to vote on any matters only as provided in this Agreement or on any
matters that require the approval of the holders of voting securities under the
1940 Act or as otherwise required in the Delaware Act.
(d) The Board of Directors may delegate to any other person any right,
power and authority vested by this Agreement in the Board of Directors to the
extent permissible under applicable law.
Section 3.2 Actions by the Board of Directors. (a) Unless provided
otherwise in this Agreement, the Board of Directors shall act only: (i) by the
affirmative vote of a majority of the Directors (including the vote of a
majority of the Independent Directors if required by the ▇▇▇▇ ▇▇▇) present at a
meeting duly called at which a quorum of the Directors shall be present (in
person or, if in-person attendance is not required by the 1940 Act, by
telephone) or (ii) by unanimous written consent of all of the Directors without
a meeting, if permissible under the 1940 Act.
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(b) The Board of Directors may designate from time to time a principal
Director who shall preside at all meetings (the "Principal Director"). Meetings
of the Board of Directors may be called by the Principal Director or by any two
Directors, and may be held on such date and at such time and place, as the Board
of Directors shall determine. Each Director shall be entitled to receive written
notice of the date, time and place of such meeting within a reasonable time in
advance of the meeting. Notice need not be given to any Director who shall
attend a meeting without objecting to the lack of notice or who shall execute a
written waiver of notice with respect to the meeting. Directors may attend and
participate in any meeting by telephone except where in-person attendance at a
meeting is required by the 1940 Act. A majority of the Directors shall
constitute a quorum at any meeting.
(c) Each instance that the Investment Fund requests the Company to
vote in its capacity as a limited partner of the Investment Fund, the Company
will notify each Member of the vote (including in such notice a copy of any
notice received by the Company from the Investment Fund) and request each Member
to vote for, against, or abstain with respect to the matter proposed. The notice
given by the Company shall provide each Member not less than twenty Business
Days to notify the Company of its vote. In the event that a Member does not
respond within such notice period, its vote will be disregarded. The Company
shall then vote its interest in the Investment Fund under Section 3.3(d) hereof
in accordance with the responses received from Member pursuant to this Section
3.2(c). If the Company receives no responses to a request, it will abstain from
the related vote.
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
Directors or by Members holding at least a majority of the total number of votes
eligible to be cast by Members at such meeting, and may be held at such time,
date and place as the Board of Directors shall determine. The Board of Directors
shall arrange to provide written notice of the meeting, stating the date, time
and place of the meeting and the record date therefore, 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 for Director receiving a plurality of the votes cast at any
meeting of all Members shall be elected as Directors and (ii) all other actions
of Members taken at a meeting shall require the affirmative vote of Members
holding a majority of the total number of votes eligible to be cast by those
Members who are present in person or by proxy at such meeting.
(b) Each Member shall be entitled to cast at any meeting of Members a
number of votes equal to the number of votes eligible to be cast at the meeting
multiplied by a fraction, the numerator of which is each such Member's
Investment Percentage as of the record date for such meeting and the denominator
of which is the total Investment Percentages of Members eligible to vote at such
meeting. The Board of Directors shall establish a record date
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not less than 10 nor more than 60 days prior to the date of any meeting of
Members to determine eligibility to vote at such meeting and the number of votes
that each Member will be entitled to cast thereat, and shall maintain for each
such record date a list setting forth the name of each Member and the number of
votes that each Member will be entitled to cast at the meeting.
(c) A Member may vote at any meeting of Members by a proxy properly
executed in writing by the Member and filed with the Company before or at the
time of the meeting. A proxy may be suspended or revoked, as the case may be, by
the Member executing the proxy by a later writing delivered to the Company at
any time prior to exercise of the proxy or if the Member executing the proxy
shall be present at the meeting and decide to vote in person. Any action of the
Members that is permitted to be taken at a meeting of the Members may be taken
without a meeting if consents in writing, setting forth the action taken, are
signed by Members holding a majority of the total number of votes eligible to be
cast or such greater percentage as may be required in order to approve such
action.
(d) As an investor in the Investment Fund, the Company will vote its
interest therein in accordance with, and in proportion to, the instructions it
solicits from the Members.
Section 3.4 Custody of Assets of the Company. The physical possession
of all funds, Securities or other properties of the Company shall at all times,
be held, controlled and administered by one or more custodians retained by the
Company in accordance with the requirements of the 1940 Act and the rules there
under.
Section 3.5 Other Activities of Members and Directors. (a) The
Directors shall not be required to devote full time to the affairs of the
Company, but shall devote such time as may reasonably be required to perform
their obligations under this Agreement.
(b) Any Member or Director, and any Affiliate of any Member or
Director, may engage in or possess an interest in other business ventures or
commercial dealings of every kind and description, independently or with others,
including, but not limited to, acquisition and disposition of Securities,
provision of investment advisory or brokerage services, serving as directors,
officers, employees, advisors or agents of other companies, partners of any
partnership, members of any limited liability company, or trustees of any trust,
or entering into any other commercial arrangements. No Member or Director shall
have any rights in or to such activities of any other Member or Director, or any
profits derived therefrom.
Section 3.6 Duty of Care. (a) No Director or officer of the Company
shall be liable to the Company or to any of its Members for any loss or damage
occasioned by any act or omission in the performance of his, her or its services
under this Agreement, unless it shall be determined by final judicial decision
on the merits from which there is no further right to appeal that such loss is
due to an act or omission of such Director or officer constituting willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Director's or officer's office.
(b) Members not in breach of any obligation hereunder or under any
agreement pursuant to which the Member subscribed for Shares shall be liable to
the Company, any Member or third parties only as provided under the Delaware
Act.
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Section 3.7 Indemnification. (a) To the fullest extent permitted by
law, the Company shall, subject to Section 3.7(b) hereof, indemnify each
Director and officer of the Company (including for this purpose his, her or its
executors, heirs, assigns, successors or other legal representatives), against
all losses, claims, damages, liabilities, costs and expenses, including, but not
limited to, amounts paid in satisfaction of judgments, in compromise, or as
fines or penalties, and reasonable counsel fees incurred in connection with the
defense or disposition of any action, suit, investigation or other proceeding,
whether civil or criminal, before any judicial, arbitral, administrative or
legislative body, in which such indemnitee may be or may have been involved as a
party or otherwise, or with which such indemnitee may be or may have been
threatened, while in office or thereafter, by reason of being or having been a
Director or officer of the Company or the past or present performance of
services to the Company by such indemnitee, except to the extent such loss,
claim, damage, liability, cost or expense shall have been finally determined in
a decision on the merits in any such action, suit, investigation or other
proceeding to have been incurred or suffered by such indemnitee by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of such indemnitee's office. The rights of
indemnification provided under this Section 3.7 shall not be construed to
provide for indemnification for any liability (including liability under federal
securities laws that, under certain circumstances, impose liability even on
persons that act in good faith) to the extent (but only to the extent) that such
indemnification would be in violation of applicable law, but shall be construed
to effectuate the applicable provisions of this Section 3.7 to the fullest
extent permitted by law.
(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), shall be paid from time to time by the
Company in advance of the final disposition of any such action, suit,
investigation or proceeding upon receipt of an undertaking by or on behalf of
such indemnitee to repay to the Company amounts so paid if it shall ultimately
be determined that indemnification of such expenses is not authorized under
Section 3.7(a) hereof.
(c) As to the disposition of any action, suit, investigation or
proceeding (whether by a compromise payment, pursuant to a consent decree or
otherwise) without an adjudication or a decision on the merits by a court, or by
any other body before which the proceeding shall have been brought, that an
indemnitee is liable to the Company or its Members by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such indemnitee's office, indemnification shall be
provided pursuant to Section 3.7(a) hereof if (i) approved as in the best
interests of the Company by a majority of the Directors (excluding any Director
who is either seeking indemnification hereunder or is or has been a party to any
other action, suit, investigation or proceeding involving claims similar to
those involved in the action, suit, investigation or proceeding giving rise to a
claim for indemnification hereunder) upon a determination based upon a review of
readily available facts (as opposed to a full trial-type inquiry) that such
indemnitee acted in good faith and in the reasonable belief that such actions
were in the best interests of the Company and that such indemnitee is not liable
to the Company or its Members by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of such
indemnitee's office, or (ii) the Board of Directors secures a written opinion of
independent legal counsel based upon a review of readily available facts (as
opposed to a full trial-type inquiry) to the effect that such indemnification
would not protect such indemnitee against any liability to the
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Company or its Members to which such indemnitee would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of such indemnitee's office.
(d) Any indemnification or advancement of expenses made pursuant to
this Section 3.7 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 Company or its Members by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of such indemnitee's office. In (i) any suit brought by a Director (or
other person entitled to indemnification hereunder) to enforce a right to
indemnification under this Section 3.7 it shall be a defense that, and (ii) in
any suit in the name of the Company to recover any indemnification or
advancement of expenses made pursuant to this Section 3.7 the Company shall be
entitled to recover such expenses upon a final adjudication that, the Director
or other person claiming a right to indemnification under this Section 3.7 has
not met the applicable standard of conduct set forth in this Section 3.7. In any
such suit brought to enforce a right to indemnification or to recover any
indemnification or advancement of expenses made pursuant to this Section 3.7,
the burden of proving that the Director or other person claiming a right to
indemnification is not entitled to be indemnified, or to any indemnification or
advancement of expenses, under this Section 3.7 shall be on the Company (or any
Member acting derivatively or otherwise on behalf of the Company or its
Members).
(e) An indemnitee may not satisfy any right of indemnification or
advancement of expenses granted in this Section 3.7 or to which such indemnitee
may otherwise be entitled except out of the assets of the Company, and no Member
shall be personally liable with respect to any such claim for indemnification or
advancement of expenses.
(f) The rights of indemnification provided hereunder shall not be
exclusive of or affect any other rights to which any person may be entitled by
contract or otherwise under law. Nothing contained in this Section 3.7 shall
affect the power of the Company to purchase and maintain liability insurance on
behalf of any Director or other person.
Section 3.8 Fees, Expenses and Reimbursement.
(a) The Board of Directors may cause the Company to compensate each
Director for his or her services as such as described in Form N-2. In addition,
the Directors shall be reimbursed by the Company for reasonable out-of-pocket
expenses incurred by them in performing their duties under this Agreement.
(b) The Company shall bear all expenses incurred in its business and
operations. Expenses to be borne by the Company include, but are not limited to,
taxes, organizational (including costs and expenses related to registration of
the Company), offering and investment-related expenses, legal expenses, internal
and external accounting, audit and tax preparation expenses, corporate
licensing, Board of Directors' fees and expenses, including travel, insurance
and other expenses associated with the operation of the Company. The
11
Company's expenses shall be determined by allocating to the Company a pro rata
portion of the expenses incurred by the Company, the Investment Fund, and the
Delaware Partnership.
ARTICLE IV
TERMINATION OF STATUS OF DIRECTORS; TRANSFERS
Section 4.1 Termination of Status of a Director. The status of a
Director shall terminate if the Director (i) shall die; (ii) shall be
adjudicated incompetent; (iii) shall voluntarily withdraw as a Director (upon
not less than 90 days' prior written notice to the other Directors or the
Company); (iv) shall be removed pursuant to Section 4.2; (v) shall be certified
by a physician to be mentally or physically unable to perform his duties
hereunder; (vi) shall be declared bankrupt by a court with appropriate
jurisdiction, file a petition commencing a voluntary case under any bankruptcy
law or make an assignment for the benefit of creditors; (vii) shall have a
receiver appointed to administer the property or affairs of such Director; or
(viii) shall otherwise cease to be a Director of the Company under the Delaware
Act.
Section 4.2 Removal of the Directors. Any Director may be removed
either by (a) the vote or written consent of at least two-thirds (2/3) of the
Directors not subject to the removal vote or (b)(i) the vote, if at a meeting,
of Members holding a majority of the outstanding voting securities or (ii)
written consent of Members holding not less than two-thirds (2/3) of the total
number of votes eligible to be cast by all Members. For this purpose, the vote
of a majority of the outstanding voting securities means, unless otherwise
defined by the 1940 Act, the vote, at an annual or a special meeting of Members,
of 67% or more of the total number of votes eligible to be cast by all Members
present at the meeting, if the holders of more than 50% of the total number of
votes eligible to be cast by all Members are present or represented by proxy, or
of more than 50% of the total number of votes eligible to be cast by all
Members, whichever is less.
Section 4.3 Transfer of Shares. (a) To the fullest extent permitted by
law, Shares of a Member may be Transferred only (i) by operation of law pursuant
to the death, divorce, bankruptcy, insolvency or dissolution of such Member or
(ii) with the written consent of the Board of Directors (which consent may not
be unreasonably withheld).
(b) The Board of Directors may not consent to a Transfer of Shares
unless: the person to whom such Shares are to be Transferred is a person whom
the Board of Directors believes is an accredited investor, as such term is
defined in Regulation D under the Securities Act of 1933 or any successor
thereto. Any transferee that acquires Shares by operation of law as the result
of the death, divorce, bankruptcy, insolvency or dissolution of a Member or
otherwise shall be entitled to the allocations and distributions allocable to
Shares so acquired and to Transfer such Shares in accordance with the terms of
this Agreement, but shall not be entitled to the other rights of a Member unless
and until such transferee becomes a substituted Member. If a Member transfers
Shares with the approval of the Board of Directors, the Board of Directors shall
promptly take all necessary actions so that the transferee is admitted to the
Company as a Member. Each Member effecting a Transfer and its transferee agree
to pay all expenses, including attorneys' and accountants' fees, incurred by the
Company in connection with such Transfer.
12
(c) A Member which is a trust under an employee benefit plan may, upon
prior written notice to the Company, assign a beneficial interest in all or a
portion of its Shares to any other trust under such employee benefit plan or to
any other employee benefit plan having the same sponsor (provided that income
and loss allocable to the Member will continue to be included in the same
filings under the same employer identification number with the Internal Revenue
Service). Such assignment to another trust under such employee benefit plan or
to any other employee benefit plan having the same sponsor will not be deemed to
be an assignment or transfer of Shares pursuant to this Agreement (and therefore
will not require the Board of Director's consent pursuant to Section 4.3(a)(ii)
hereof). In addition, a change in any trustee or fiduciary of a Member will not
be deemed to be an assignment or transfer of Shares pursuant to this Agreement
(and therefore not require the Board of Director's consent pursuant to Section
4.3(a)(ii) hereof), so long as any such replacement trustee or fiduciary is also
a fiduciary as defined under applicable law, that income and loss allocable to
the Member will continue to be included in the same filings under the same
employer identification number with the Internal Revenue Service, and the
Company receives prior written notice of such change in trustee or fiduciary. In
the connection with any assignment of interest or change in trustee or fiduciary
under this Section 4.3(c), the Member shall provide such documentation as the
Company shall reasonably request.
(d) Each Member shall indemnify and hold harmless the Company, the
Board of Directors, 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.
ARTICLE V
SHARES
Section 5.1 Issuance of Shares. (a) The Board of Directors in its
discretion may, from time to time without a vote of the Members, issue Shares to
persons from whom the Company has accepted, on or prior to the Final Closing
Date, executed Subscription Agreements. All issuances of Shares shall be in
accordance with the terms of the Subscription Agreements. The maximum dollar
amount of Shares for which Subscription Agreements may be accepted is $200
million. The Company may issue whole Shares and/or 1/1,000ths of a Share or
integral multiples thereof.
(b) Shares shall be issued on the Closing Date at $1,000.00 per Share.
Thereafter, Shares shall be issued at the Net Asset Value per Share determined
as of the close of the Fiscal Period immediately preceding the effective date of
the issuance of such Shares.
Section 5.2 Form of Capital Contributions. Initial and any additional
Capital Contributions by any Member shall be payable in readily available funds
at the date of the proposed acceptance of the contribution.
13
Section 5.3 Rights of Members to Capital. No Member shall be entitled
to interest on any Capital Contribution, nor shall any Member be entitled to the
return of any capital of the Company except upon the liquidation of the
Company's assets pursuant to Section 6.2 hereof. No Member shall be liable for
the return of any such amounts. No Member shall have the right to require
partition of the Company's property or to compel any sale or appraisal of the
Company's assets.
Section 5.4 Capital Accounts. (a) The Company shall maintain a
separate Capital Account for each Member.
(b) Each Member's Capital Account shall have an initial balance equal
to the amount of cash constituting such Member's initial contribution.
(c) Each Member's Capital Account shall be increased by the sum of (i)
the amount of cash constituting additional Capital Contributions by such Member
pursuant to Section 5.1 hereof, plus (ii) all amounts credited to such Member's
Capital Account pursuant to Section 5.5 hereof.
(d) Each Member's Capital Account shall be reduced by the sum of (i)
the amount of distributions to such Member pursuant to Sections 5.9 or 6.2
hereof (net of any liabilities secured by any asset distributed that such Member
is deemed to assume or take subject to for purposes of section 752 of the Code),
plus (ii) any amounts debited against such Capital Account pursuant to Section
5.5 hereof.
(e) No Member shall be required to pay to the Company or to any other
Member or person any deficit in such Member's Capital Account upon dissolution
of the Company or otherwise.
Section 5.5 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 5.6 Tax Allocations. (a) 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 Treasury Regulation sections 1.704-1(b)(2)(iv) (and,
in particular, subparagraph (f) thereof), 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).
(b) The allocations of the Company's items of income, gain, loss,
deduction and credit to the Members in respect of their Shares shall not exceed
the allocations permitted under Subchapter K of the Code as approved by the
Board of Directors, whose determination
14
shall be binding. Allocations pursuant to this Section 5.6 may be adjusted at
any time by the Board of Directors to the extent the Board of Directors
determines in good faith that such adjustments (i) would more equitably reflect
the economic allocations hereunder, or (ii) would otherwise be in the overall
best interests of the Members.
Section 5.7 Distributions. Promptly upon receipt by the Company of
distributions from the Investment Fund, the Company shall distribute the amounts
so received among the Members pro rata, based upon their respective Investment
Percentages. Notwithstanding the foregoing or any other provision contained in
this Agreement, the Company shall not be required to make a distribution to a
Member in respect of its Shares if such distribution would violate the Delaware
Act or other applicable law.
Section 5.8 Withholding. (a) The Board of Directors may withhold and
pay over to the Internal Revenue Service (or any other relevant taxing
authority) taxes with respect to any Member to the extent required by the Code
or any other applicable law.
(b) For purposes of this Agreement, any taxes so withheld by the
Company with respect to any Member shall be deemed to be a distribution to such
Member, reducing the amount otherwise distributable to such Member pursuant to
this Agreement and reducing the Capital Account of such Member. If the amount of
such taxes is greater than any amounts then otherwise distributable to such
Member, such Member and any successor to such Member's Shares shall pay to the
Company as a contribution to the capital of the Company, upon demand of the
Board of Directors, the amount of such excess.
(c) The Board of Directors shall not be obligated to apply for or
obtain a reduction of or exemption from withholding tax on behalf of any Member
that may be eligible for such reduction or exemption. To the extent that a
Member claims to be entitled to a reduced rate of, or exemption from, a
withholding tax pursuant to an applicable income tax treaty, or otherwise, the
Member shall furnish the Board of Directors with such information and forms as
such Member may be required to complete when necessary to comply with any and
all laws and regulations governing the obligations of withholding tax agents.
Each Member represents and warrants that any such information and forms
furnished by such Member shall be true and accurate and agrees to indemnify the
Company and each of the Members from any and all damages, costs and expenses
resulting from the filing of inaccurate or incomplete information or forms
relating to such withholding taxes.
ARTICLE VI
DISSOLUTION AND LIQUIDATION
Section 6.1 Dissolution. The Company shall be dissolved upon the
earlier of (i) dissolution of the Investment Fund and (ii) at such time as is
required by law.
Dissolution of the Company shall be effective on the day on which the
event giving rise to the dissolution shall occur, but the existence of the
Company as separate legal entity shall not terminate until the assets of the
Company have been liquidated in accordance with Section 6.2 hereof and the
Certificate has been canceled.
15
Section 6.2 Winding Up. (a) Upon the dissolution of the Company as
provided in Section 6.1 hereof, a person appointed by the Board of Directors,
acting as the liquidator, shall wind up the business and administrative affairs
of the Company, except that if the Board of Directors does not make such
appointment, a liquidator elected by Members holding a majority of the total
number of votes eligible to be cast shall promptly wind up the business and
administrative affairs of the Company (in either case, the "Liquidator"). Net
Profit and Net Loss during the period of winding up shall be allocated pursuant
to Section 5.5 hereof. The proceeds from liquidation of the Company's assets
shall be distributed in the following manner:
(i) the debts of the Company, other than debts, liabilities or
obligations to Members, and the expenses of liquidation (including legal
and accounting expenses incurred in connection therewith), up to and
including the date that distribution of the Company's assets to the Members
has been completed, shall first be satisfied (whether by payment or
reasonable provision for payment thereof) on a pro rata basis;
(ii) 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;
(iii) any accrued and unpaid dividends on, and par value of, any
outstanding Preference Shares shall next be paid on a pro rata basis; and
(iv) the Members shall next be paid on a pro rata basis in accordance
with their respective Investment Percentages.
(b) Anything in this Section 6.2 to the contrary notwithstanding, but
subject to the Delaware Act, upon dissolution of the Company, the Liquidator may
distribute ratably in kind any assets of the Company; provided, however, that if
any in-kind distribution is to be made (i) the assets distributed in kind shall
be valued pursuant to Section 7.3 hereof as of the actual date of their
distribution and charged as so valued and distributed against amounts to be paid
under Section 6.2(a) above, and (ii) any profit or loss attributable to property
distributed in kind shall be included in the Net Profit or Net Loss for the
Fiscal Period ending on the date of such distribution.
ARTICLE VII
ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS
Section 7.1 Accounting and Reports. (a) The Company will maintain its
books and records in accordance with generally accepted accounting principles
except as otherwise described in this Agreement. The Company's accounts shall be
maintained in U.S. currency.
(b) After the end of each Taxable Year, the Company shall furnish to
each Member such information regarding the operation of the Company and such
Member's Shares as is necessary for Members to complete federal, state and local
income tax or information returns and any other tax information required by
federal, state or local law.
(c) Except as otherwise required by the 1940 Act, or as may otherwise
be permitted by rule, regulation or order, within 60 days after the close of the
period for which a
16
report required under this Section 7.1(c) is being made, the Company shall
furnish to each Member a semi-annual report and an annual report containing the
information required by such Act. The Company shall cause financial statements
in accordance with generally accepted accounting principles contained in each
annual report furnished hereunder to be accompanied by a report of independent
public accountants based upon an audit performed in accordance with generally
accepted auditing standards. The Company may furnish to each Member such other
periodic reports as it deems necessary or appropriate in its discretion.
Section 7.2 Determinations by the Board of Directors. (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 Directors unless specifically and expressly otherwise provided for in
this Agreement or required by law, and such determinations and allocations shall
be final and binding on all the Members.
(b) The Board of Directors may make such adjustments to the
computation of Net Profit, Net Loss or any components comprising either of the
foregoing as it considers appropriate to reflect fairly and accurately the
financial results of the Company and the intended allocation thereof among the
Members.
Section 7.3 Valuation of Net Assets. (a) Except as may be required by
the 1940 Act, the Board of Directors shall value or have valued any Securities
or other assets and liabilities of the Company as of the close of business on
the last Business Day of each Fiscal Period as soon as practicable following the
close of such Fiscal year in accordance with such valuation procedures as shall
be established from time to time by the Board of Directors and that conform to
the requirements of the 1940 Act. In determining the value of the assets of the
Company, no value shall be placed on the goodwill or name of the Company, or the
office records, files, statistical data or any similar intangible assets of the
Company not normally reflected in the Company's accounting records.
(b) The value of Securities and other assets of the Company and the
net worth of the Company as a whole determined pursuant to this Section 7.3
shall be conclusive and binding on all of the Members and all parties claiming
through or under them.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1 Amendment of Limited Liability Company Agreement. (a) This
Agreement may be amended only by the written consent of a Majority in Interest
of the Members, provided, however, that no amendment will be valid as to any
Member which (i) increases or decreases such Member's obligation, if any, to
make Capital Contributions, or (ii) reduces such Member's right to receive
distributions from the Company.
(b) Notwithstanding anything in this Section 8.1 to the contrary, no
amendment to this Section 8.1 shall be valid without the written consent of all
Members.
17
Section 8.2 Special Power of Attorney. (a) Each Member hereby
irrevocably makes, constitutes and appoints the Board of Directors (or a
designee of the Board of Directors) with full power of substitution, the true
and lawful representative and attorney-in-fact of, and in the name, place and
stead of, such Member, with the power from time to time to make, execute, sign,
acknowledge, swear to, verify, deliver, record, file and/or publish:
(i) any amendment to this Agreement that complies with the provisions
of this Agreement;
(ii) any amendment to the Certificate required because this Agreement
is amended, including, without limitation, an amendment to effectuate any
change in the membership of the Company; and
(iii) all such other instruments, documents and certificates that, in
the opinion of legal counsel to the Company, may from time to time be
required by the laws of the United States of America, the State of Delaware
or any other jurisdiction in which the Company shall determine to do
business, or any political subdivision or agency thereof, or that such
legal counsel may deem necessary or appropriate to effectuate, implement
and continue the valid existence and business of the Company as a limited
liability company under the Delaware Act.
(b) Each Member is aware that the terms of this Agreement permit
certain amendments to this Agreement to be effected and certain other actions to
be taken or omitted by or with respect to the Company without such Member's
consent. If an amendment to the Certificate or this Agreement or any action by
or with respect to the Company is taken in the manner contemplated by this
Agreement, each Member agrees that, notwithstanding any objection that such
Member may assert with respect to such action, the attorney-in-fact appointed
hereby is authorized and empowered, with full power of substitution, to exercise
the authority granted above in any manner that may be necessary or appropriate
to permit such amendment to be made or action lawfully taken or omitted. Each
Member is fully aware that each Member will rely on the effectiveness of this
special power of attorney with a view to the orderly administration of the
affairs of the Company.
(c) This power of attorney is a special power of attorney and is
coupled with an interest in favor of each of the Directors and as such:
(i) 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 Directors shall have had
notice thereof; and
(ii) shall survive the delivery of a Transfer by a Member of all or
portion of such Member's Shares, except that when the transferee thereof
has been approved by the Board of Directors for admission to the Company as
a substituted Member, this power of attorney given by the transferor shall
survive the delivery of such assignment for the sole purpose of enabling
the Directors to execute, acknowledge and file any instrument necessary to
effect such substitution.
18
Section 8.3 Authorized Signatories. Subject to revocation or revision
by the Board of Directors, each officer of ING Clarion Capital, LLC is
authorized to execute on behalf of the Company all documents related to opening
bank accounts, brokerage accounts and entering into custodial, placement agent,
insurance or similar agreements, and take any reasonable actions related
thereto.
Section 8.4 Notices. All notices, demands and other communications to
be given and delivered under or by reason of provisions under this Agreement
will be in writing and will be deemed to have been given when personally
delivered, sent by telecopy (with hard copy to follow by first class mail as
described below) or sent by reputable overnight courier service (charges
prepaid) or mailed by first class mail (postage prepaid and return receipt
requested) to, in the case of the Company, the address set forth herein (or such
other address as the Company shall have notified the Members pursuant to this
Section 8.3) or, in the case of a Member, the address or telecopy numbers set
forth on the Subscription Agreement of such Member (or to such other address or
telecopy number as a Member shall have notified the Company pursuant to this
Section 8.3).
Section 8.5 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 8.6 Initial Member. The Initial Member acknowledges the return
of its Capital Contribution and withdraws as a Subscription Agreement Member of
the Company as of the Closing Date.
Section 8.7 Prior Agreements. This Agreement supercedes in their
entirety all operating agreements entered into with respect to the Company prior
to the date hereof.
Section 8.8 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 Company's business and of the rights,
privileges and obligations of the Members. Each provision of this Agreement
shall be subject to and interpreted in a manner consistent with the applicable
provisions of the 1940 Act and the Form N-2.
Section 8.9 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 8.10 Not for Benefit of Creditors. The provisions of this
Agreement are intended only for the regulation of relations among past, present
and future Members, Directors and the Company. This Agreement is not intended
for the benefit of non-Member creditors and no rights are granted to non-Member
creditors under this Agreement.
19
Section 8.11 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 8.12 Confidentiality. The Company has the right to keep
confidential from the Members (and their respective agents and attorneys) for
such period of time as the Board of Directors deems reasonable any Confidential
Information. Furthermore, each Member shall keep confidential and not disclose
any information and materials regarding the Company, the Investment Fund, the
Delaware Partnership, and each Partnership Investment and each Issuer (both as
defined in the Investment Fund Partnership Agreement) in such Member's
possession (whether or not such information or materials have been designated by
the Company as Confidential Information) except to the extent (a) disclosure of
such information or materials is required by law, (b) the information or
materials become publicly known except through the actions or inactions of such
Member or (c) the general partner of the Investment Fund consents to such
disclosure in writing. Notwithstanding the foregoing, a Member may disclose
Confidential Information to those of its employees, counsel, or advisors solely
on a need to know and confidential basis. In the event any Member is required by
law to disclose any Confidential Information, such Member shall promptly notify
the Board of Directors in writing, which notification shall include the nature
of the legal requirement and the extent of the required disclosure, and shall
cooperate with the Company to preserve the confidentiality of such information
consistent with applicable law.
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 invalidity 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 Directors or the
accountants of the Company shall 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 Company.
Section 8.15 Tax Decisions and Tax Matters Partner. (a) All decisions
for the Company relating to tax matters, including, without limitation, whether
to make any tax elections (including the election under Section 754 of the
Code), the positions to be made on the Company's tax and information returns and
the settlement or further contest or litigation of any audit matters raised by
the Internal Revenue Service or any other taxing authority, shall be made by the
Board of Directors. All actions (other than ministerial actions) taken by the
Tax Matters Partner, as designated below, shall be subject to the approval of
the Board of Directors.
(b) The Board of Directors shall designate a person on the Company's
annual federal income tax information return, and such person shall have full
powers and responsibilities, as the Tax Matters Partner of the Company for
purposes of section 6231(a)(7) of the Code. The Tax Matters Partner shall not
take any action on behalf of the Company (other than any such action relating
solely to compliance with its ministerial duties) prior to obtaining
20
consent thereto from the Board of Directors. The Tax Matters Partner shall be
indemnified and held harmless by the Company from any and all liabilities and
obligations that arise from or by reason of such designation.
Section 8.16 Section 754 Election. In the event of a distribution of
Company property to a Member or an assignment or other Transfer (including by
reason of death) of all or portion of a Member's Shares, the Board of Directors,
in its discretion, may, but shall not be required to, cause the Company to
elect, pursuant to section 754 of the Code, or the corresponding provision of
subsequent law, to adjust the basis of the Company property of the relevant
Series as provided by sections 734 and 743 of the Code.
Section 8.17 Counterparts. This Agreement may be executed in any
number of counterparts with the same effect as if all parties had signed the
same document. All counterparts shall be construed together and shall constitute
one instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Operating Agreement of the Company as of the date identified in the
preamble hereto.
MEMBER:
By:
------------------------------
Name:
------------------------
Title:
-----------------------
INITIAL MEMBER:
ING Clarion Capital, LLC
By:
----------------------------------
Name:
----------------------------
Title:
---------------------------
22
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
ORGANIZATION; ADMISSION OF MEMBERS
Page
Section 2.1 Formation of Limited Liability Company.............................4
Section 2.2 Name ..............................................................5
Section 2.3 Principal And Registered Office....................................5
Section 2.4 Duration...........................................................5
Section 2.5 Objective and Business of the Company..............................5
Section 2.6 Board of Directors.................................................5
Section 2.7 Members............................................................6
Section 2.8 Both Directors and Members.........................................6
Section 2.9 Limited Liability..................................................6
Section 2.10 Preference Shares.................................................6
Section 2.11 Short-Term Investments............................................7
ARTICLE III
MANAGEMENT
Section 3.1 Management and Control.............................................7
Section 3.2 Actions by the Board of Directors..................................7
Section 3.3 Meetings of Members................................................8
Section 3.4 Custody of Assets of the Company...................................9
Section 3.5 Other Activities of Members and Directors..........................9
Section 3.6 Duty of Care.......................................................9
i
Section 3.7 Indemnification...................................................10
Section 3.8 Fees, Expenses and Reimbursement..................................11
ARTICLE IV
TERMINATION OF STATUS OF DIRECTORS; TRANSFERS
Section 4.1 Termination of Status of a Director...............................12
Section 4.2 Removal of the Directors..........................................12
Section 4.3 Transfer of Shares................................................12
ARTICLE V
SHARES
Section 5.1 Issuance of Shares................................................13
Section 5.2 Form of Capital Contributions.....................................13
Section 5.3 Rights of Members to Capital......................................14
Section 5.4 Capital Accounts..................................................14
Section 5.5 Allocation of Net Profit and Net Loss.............................14
Section 5.6 Tax Allocations...................................................14
Section 5.7 Distributions.....................................................15
Section 5.8 Withholding.......................................................15
ARTICLE VI
DISSOLUTION AND LIQUIDATION
Section 6.1 Dissolution.......................................................15
Section 6.2 Winding Up........................................................16
ARTICLE VII
ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS
Section 7.1 Accounting and Reports............................................16
Section 7.2 Determinations by the Board of Directors..........................17
ii
Section 7.3 Valuation of Net Assets...........................................17
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1 Amendment of Limited Liability Company Agreement..................17
Section 8.2 Special Power of Attorney.........................................18
Section 8.3 Authorized Signatories............................................19
Section 8.4 Notices...........................................................19
Section 8.5 Agreement Binding Upon Successors and Assigns.....................19
Section 8.6 Initial Member....................................................19
Section 8.7 Prior Agreements..................................................19
Section 8.8 Applicability of 1940 Act and Form N-2............................19
Section 8.9 Choice of Law.....................................................19
Section 8.10 Not for Benefit of Creditors.....................................19
Section 8.11 Pronouns.........................................................20
Section 8.12 Confidentiality..................................................20
Section 8.13 Severability.....................................................20
Section 8.14 Filing of Returns................................................20
Section 8.15 Tax Decisions and Tax Matters Partner............................20
Section 8.16 Section 754 Election.............................................21
Section 8.17 Counterparts.....................................................21
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