EXHIBIT 3.1
EXECUTION COPY
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
XXXXXXX XXXXX HEDGE FUND PARTNERS II, LLC
DATED AS OF JANUARY 1, 2006
TABLE OF CONTENTS
Page
----
ARTICLE I General Provisions.................................................1
Section 1.01 Company Name and Address....................................1
Section 1.02 Fiscal Year.................................................1
Section 1.03 Liability of Members........................................1
Section 1.04 Purposes of the Company.....................................2
Section 1.05 Assignability of Units; Assignment by Managing Member.......3
Section 1.06 Registered Office and Agent for Service of Process..........3
ARTICLE II Management of the Company.........................................3
Section 2.01 Management Generally........................................3
Section 2.02 Delegation by Managing Member...............................4
Section 2.03 Authority of the Managing Member............................4
Section 2.04 Reliance by Third Parties...................................5
Section 2.05 Activity of the Managing Member.............................6
Section 2.06 Standard of Care; Indemnification...........................6
Section 2.07 Management Fee; Payment of Costs and Expenses...............8
Section 2.08 Principal Transactions and Other Related Party
Transactions................................................9
ARTICLE III Series of Units; Admission of New Members.......................10
Section 3.01 Classes and Series of Units................................10
Section 3.02 Conversion of Series.......................................10
Section 3.03 New Members................................................10
Section 3.04 Adjustment to Number of Units Issued.......................11
Section 3.05 Additional Classes of Units................................11
ARTICLE IV Capital Accounts of Members and Operation Thereof................11
Section 4.01 Definitions................................................11
Section 4.02 Capital Contributions......................................12
Section 4.03 Capital Accounts...........................................12
Section 4.04 Membership Percentages.....................................13
Section 4.05 Allocation of Net Capital Appreciation or Net Capital
Depreciation...............................................13
Section 4.06 Amendment of Incentive Allocation..........................14
Section 4.07 Determination of Net Assets................................14
Section 4.08 Determination of Net Asset Value...........................16
Section 4.09 Allocation for Tax Purposes................................16
Section 4.10 Determination by Managing Member of Certain Matters;
Managing Member's Discretion...............................16
Section 4.11 Adjustments to Take Account of Interim Year Events.........17
Section 4.12 Tax Withholding............................................17
ARTICLE V Redemptions and Distributions.....................................17
Section 5.01 Redemptions and Distributions in General...................17
Section 5.02 Redemptions................................................17
Section 5.03 Limitation on Redemptions..................................19
Section 5.04 Distributions..............................................20
ARTICLE VI Withdrawal, Death, Disability....................................20
Section 6.01 Withdrawal, Death, etc. of Members.........................20
Section 6.02 Required Withdrawals.......................................21
ARTICLE VII Duration and Dissolution of the Company.........................21
Section 7.01 Duration...................................................21
Section 7.02 Dissolution................................................23
ARTICLE VIII Tax Returns; Reports to Members................................23
Section 8.01 Independent Auditors.......................................23
Section 8.02 Filing of Tax Returns......................................23
Section 8.03 Tax Matters Partner........................................24
Section 8.04 Financial Reports to Current Members.......................24
Section 8.05 Tax Reports to Members and Former Members..................24
Section 8.06 Partnership Status of Company..............................24
ARTICLE IX Miscellaneous....................................................24
Section 9.01 General....................................................24
Section 9.02 Power of Attorney..........................................25
Section 9.03 Amendments to Limited Liability Company Agreement..........25
Section 9.04 Instruments................................................26
Section 9.05 No Personal Liability for Return of Capital................26
Section 9.06 Choice of Law..............................................26
Section 9.07 Waiver of Inconvenient Forum...............................26
Section 9.08 No Third Party Rights......................................27
Section 9.09 Notices....................................................27
Section 9.10 Counterparts...............................................27
Section 9.11 Grantors of Revocable Trusts...............................27
Section 9.12 Each Interest in the Company is a Security.................27
Section 9.13 Goodwill...................................................27
Section 9.14 Headings...................................................27
Section 9.15 Pronouns...................................................28
Section 9.16 Confidentiality............................................28
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF
XXXXXXX SACHS HEDGE FUND PARTNERS II, LLC
Dated as of January 1, 2006
The undersigned (herein called the "Members," which term shall
include any Persons (as defined below) hereafter admitted to the Company
(as defined below) pursuant to Article III of this Agreement (as defined
below) and shall exclude any Persons who cease to be Members pursuant to
Article V or Article VI of this Agreement) hereby agree to form and hereby
form, as of the date and year first above written, a limited liability
company (herein called the "Company"), pursuant to the provisions of the
Limited Liability Company Act of the State of Delaware (6 Del. Code ss.
18-101, et seq.) (the "Act"), which shall be governed by, and operated
pursuant to, the terms and provisions of this Amended and Restated Limited
Liability Company Agreement (herein called this "Agreement").
ARTICLE I
General Provisions
Section 1.01 Company Name and Address. The name of the Company is
Xxxxxxx Xxxxx Hedge Fund Partners II, LLC. Its principal office is located
at 000 Xxxxx Xxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, or at such other
location as the Managing Member (as defined in Section 1.03) in the future
may designate. The Managing Member shall promptly notify the Non-Managing
Members (as defined in Section 1.03) of any change in the Company's
address.
Section 1.02 Fiscal Year. The fiscal year of the Company (herein
called the "fiscal year") shall end on December 31 of each calendar year;
provided, however, that the Managing Member may change the Company's fiscal
year-end, without the consent of the Non-Managing Members, as deemed
appropriate by the Managing Member, in its sole discretion.
Section 1.03 Liability of Members. The names of all of the
Members and the amounts of their respective contributions to the Company
(herein called the "Capital Contributions") are set forth in a schedule
(herein called the "Schedule"), which shall be filed with the records of
the Company at the Company's principal office (as set forth in Section
1.01) and is hereby incorporated by reference and made a part of this
Agreement.
The Member designated in Part I of the Schedule as the Managing
Member (herein called the "Managing Member") shall manage the operations of
the Company. The Members designated in Part II of the Schedule are referred
to herein as the "Non-Managing Members." The Managing Member, the
Non-Managing Members and the former Non-Managing Members shall be liable to
the extent provided herein for the repayment and discharge of all debts and
obligations of the Company attributable to any fiscal year (or relevant
portion thereof) during which they are or were Members of the Company.
The Members and all former Members shall share all losses,
liabilities or expenses suffered or incurred by virtue of the operation of
the preceding paragraph of this Section 1.03 in the proportions of their
respective Capital Accounts (as defined in Section 4.03) for the fiscal
year (or relevant portion thereof) to which any debts or obligations of the
Company are attributable. A Member's or former Member's share of all
losses, liabilities or expenses shall not be greater than its respective
interest in the Company for such fiscal year (or relevant portion thereof).
As used in this Section 1.03, the terms "interests in the
Company" and "interest in the Company" shall mean with respect to any
fiscal year (or relevant portion thereof) and with respect to each Member
(or former Member), the Capital Account (or, in the case of a Member with
more than one series of Units (as defined below), the Capital Accounts)
that such Member (or former Member) would have received (or in fact did
receive) pursuant to the terms and provisions of Article VI upon withdrawal
from the Company as of the end of such fiscal year (or relevant portion
thereof).
Notwithstanding any other provision of this Agreement to the
contrary, in no event shall any Member (or former Member) be obligated to
make any additional contribution or payment whatsoever to the Company, or
have any liability for the repayment and discharge of the debts and
obligations of the Company (apart from its interest in the Company), except
that a Non-Managing Member (or former Non-Managing Member) shall, in the
discretion of the Managing Member, be required, for purposes of meeting
such Member's (or former Member's) obligations under this Section 1.03, to
make additional contributions or payments, respectively, up to, but in no
event in excess of, the aggregate amount of returns of capital and other
amounts actually received by it from the Company during or after the fiscal
year to which any debt or obligation is attributable.
As used in this Agreement, the terms "former Non-Managing Member"
and "former Member" refer to such Persons as hereafter from time to time
cease to be a Non-Managing Member or Member, respectively, pursuant to the
terms and provisions of this Agreement.
Section 1.04 Purposes of the Company.
-----------------------
The Company is organized for the purposes of (i) allocating its
assets among investment funds managed by Xxxxxxx Xxxxx Hedge Fund
Strategies LLC or any successor entities thereto (such funds, their
successors or any funds which replace them or to which the Company
allocates its assets in accordance with this Agreement, the "Sector
Funds"), each of which directly, or indirectly through limited liability
companies or other entities managed by Xxxxxxx Sachs Hedge Fund Strategies
LLC or an Affiliate (as defined in Section 2.05) thereof (the "Portfolio
Companies"), allocates its assets to, or invests in entities managed by,
independent investment managers (the "Advisors") (that may or may not be
Affiliates of the Managing Member) that employ investment strategies
primarily within the tactical trading sector, the equity long/short sector,
the relative value sector or the event driven sector, (ii) directly
allocating assets to Advisors, (iii) engaging in any other lawful act or
activity for which limited liability companies may be organized under the
Act, and (iv) engaging in any and all activities and transactions as the
Managing Member may deem necessary or advisable in connection therewith.
The initial Sector Funds shall be Xxxxxxx Xxxxx Global Tactical Trading II,
LLC, Xxxxxxx Sachs Global Equity Long/Short, LLC, Xxxxxxx Xxxxx Global
Relative Value II, LLC and Xxxxxxx Sachs Global Event Driven, LLC. The
allocation of the Company's assets among the Sector Funds or directly to
Advisors shall be determined in the sole discretion of the Managing Member.
Section 1.05 Assignability of Units; Assignment by Managing Member.
-----------------------------------------------------
(a) Except as provided in paragraph (b) below, without the prior
written consent of the Managing Member, which may be withheld in its sole
and absolute discretion, with or without cause, a Member may not pledge,
assign or otherwise transfer its units of limited liability company
interests in the Company ("Units") in whole or in part to any Person except
by operation of law (i) pursuant to the death, adjudication of
incompetency, insolvency or bankruptcy of the Member, or (ii) pursuant to
the corporate reorganization or merger of the Member, nor substitute any
other Person as a Member. Any attempted pledge, assignment, transfer or
substitution not made in accordance with this Section 1.05 shall be void.
(b) Without the consent of the Non-Managing Members, the Managing
Member may assign or otherwise transfer its Managing Member interest in the
Company to any Person (as defined in Section 2.03(d)) controlling,
controlled by or under common control with the Managing Member, and may
substitute any such corporation, partnership, limited liability company or
other entity as the Managing Member, as long as such transfer does not, as
determined by the Managing Member in its sole discretion, cause the Company
to be taxable as a corporation. The Managing Member's limited liability
company interest in the Company in respect of its Incentive Allocation (as
defined in Section 4.05(b)(i)) and the Capital Account maintained in
respect thereof will not be represented by Units.
Section 1.06 Registered Office and Agent for Service of Process.
The registered office of the Company shall be: Corporation Trust Center,
0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, and the registered agent
for service of process at such office shall be The Corporation Trust
Company. The Company may from time to time have such other place or places
of business within or without the State of Delaware as may be designated by
the Managing Member.
ARTICLE II
Management of the Company
Section 2.01 Management Generally. The management of the Company
shall be vested exclusively in the Managing Member. Except as authorized by
the Managing Member, or as expressly set forth in this Agreement, the
Non-Managing Members shall have no part in the management of the Company,
and shall have no authority or right to act on behalf of the Company in
connection with any matter. The Managing Member, and any Affiliate of the
Managing Member, may engage in any other business venture, whether or not
such business is similar to the business of the Company, and neither the
Company nor any Non-Managing Member shall have any rights in or to such
ventures or the income or profits derived therefrom.
Section 2.02 Delegation by Managing Member. The Managing Member
shall have the power and authority to delegate to one or more Persons (as
defined in Section 2.03(d)), including, without limitation, any officer,
employee or agent of the Company or the Managing Member, the Managing
Member's rights and powers to manage and control the business and affairs
of the Company. The Managing Member may, by written instrument, authorize
any Person to enter into and perform under any document on behalf of the
Company.
Section 2.03 Authority of the Managing Member. The Managing
Member shall have the power on behalf of and in the name of the Company to
carry out any and all of the objects and purposes of the Company set forth
in Section 1.04 and Section 2.01, and to perform all acts and enter into
and perform all contracts and other undertakings which it may deem
necessary or advisable or incidental thereto, including, without
limitation, the power to:
(a) open, maintain and close accounts, including custodial
accounts, with banks, including banks located inside and outside the United
States, and draw checks or other orders for the payment of monies;
(b) lend, either with or without security, funds or other
properties of the Company, and borrow or raise funds (including borrowing
from the Managing Member or its Affiliates) and secure the obligations of
the Company by pledges or hypothecation of all or any part of the property
of the Company;
(c) do any and all acts on behalf of the Company, and exercise
all rights, powers, privileges and other incidents of ownership or
possession with respect to the Company's interest in the assets and other
property and funds held or owned by the Company, including, without
limitation, participation in arrangements with creditors, the institution
and settlement or compromise of suits and administrative proceedings and
all other like or similar matters;
(d) engage any person, general partnership, limited partnership,
limited liability company, corporation, joint venture, trust, business
trust, cooperative, association or other entity (each a "Person")
(including the Managing Member and any of its Affiliates) pursuant to an
administration agreement to provide certain administrative services (any
such Person providing such services being referred to herein as the
"Administrator"), including, without limitation, calculating the net asset
value (the "NAV") of each series of Units and Members' Capital Accounts,
valuing the Company's assets, assisting with the valuation of securities
which are not readily marketable, assisting in the preparation of the
Company's financial statements, assisting in the preparation and
distribution of reports to each Member, maintaining a registry for the
ownership of each series of Units and providing other administrative
services to the Company;
(e) consent on behalf of the Company to any changes in the
members, directors or officers of the Managing Member, if such consent is
required by applicable law;
(f) engage any personnel, whether part time or full time,
attorneys, financial advisers, underwriters, accountants, consultants,
appraisers, custodians of the assets of the Company or other Persons as the
Managing Member may deem necessary or desirable, whether or not any such
Person may be an Affiliate of the Managing Member or may also be employed
by any Affiliate of the Managing Member;
(g) initially allocate, in its sole discretion, the Company's
assets or any portion thereof among the Sector Funds or to Advisors
(directly or indirectly through Portfolio Companies or investment funds
managed by an Advisor (each, a "Portfolio Fund")) in the manner set forth
in the Company's Confidential Private Placement Memorandum (as amended or
supplemented from time to time, the "Memorandum"), oversee such allocations
and, from time to time, in its sole discretion, re-allocate the Company's
assets among the Sector Funds and/or the Advisors;
(h) invest any of the Company's cash balances which it determines
at any time, in its sole discretion, not to allocate to the Sector Funds,
Portfolio Companies or Portfolio Funds), in any instruments it deems
appropriate in its sole discretion, including, without limitation, money
market funds sponsored by Xxxxxxx, Xxxxx & Co. or its Affiliates;
(i) redeem the Company's interests in any Sector Fund, Portfolio
Company or Portfolio Fund in order to obtain cash necessary to meet the
redemption requests of the Members, or for any other reason in its sole
discretion;
(j) bring and defend actions and proceedings at law or equity and
before any governmental, administrative or other regulatory agency, body or
commission;
(k) make distributions to Members in cash or (to the extent
permitted hereunder) otherwise;
(l) prepare and file all necessary returns and statements, pay
all taxes, assessments and other impositions applicable to the assets of
the Company and withhold amounts with respect thereto from funds otherwise
distributable to any Member;
(m) determine the accounting methods and conventions to be used
in the preparation of any accounting or financial records of the Company;
(n) make any and all tax elections permitted to be made under the
Internal Revenue Code of 1986, as amended (the "Code"), and any applicable
state, local or foreign tax law;
(o) determine the tax treatment of any Company transaction or
item for purposes of completing the Company's federal, state, local or
foreign tax returns; and
(p) take all actions, and authorize any member, employee,
officer, director or other agent of the Managing Member or agent or
employee of the Company, to act for and on behalf of the Company, in all
matters necessary to, in connection with, or incidental to, any of the
foregoing.
Section 2.04 Reliance by Third Parties. Persons dealing with the
Company are entitled to rely conclusively upon the certification of the
Managing Member to the effect that it is then acting as the Managing Member
and upon the power and authority of the Managing Member as herein set
forth.
Section 2.05 Activity of the Managing Member. The Managing Member
and Persons controlling, controlled by or under common control with the
Managing Member and any of such Person's directors, members, stockholders,
partners, officers, employees and controlling persons (each an "Affiliate"
and collectively, "Affiliates"), shall devote so much of their time to the
affairs of the Company as in the judgment of the Managing Member the
conduct of its business shall reasonably require, and none of the Managing
Member or its Affiliates shall be obligated to do or perform any act or
thing in connection with the business of the Company not expressly set
forth herein. Nothing contained in this Section 2.05 shall be deemed to
preclude the Managing Member or its Affiliates from exercising investment
responsibility, from engaging directly or indirectly in any other business
or from directly or indirectly purchasing, selling or holding securities,
options, separate accounts, investment contracts, currency, currency units
or any other asset and any interest therein for the account of any such
other business, for their own accounts, for any of their family members or
for other clients.
Section 2.06 Standard of Care; Indemnification.
---------------------------------
(a) None of the Managing Member (including, without limitation,
in its capacity as the Administrator) or its Affiliates (each an
"Indemnified Person" and collectively the "Indemnified Persons") shall be
liable to the Company or to the Members for (i) any act or omission
performed or failed to be performed by such person (other than any criminal
wrongdoing), or for any losses, claims, costs, damages, or liabilities
arising therefrom, in the absence of any criminal wrongdoing, willful
misfeasance or gross negligence on the part of such person, (ii) any tax
liability imposed on the Company or any Member, or (iii) any losses due to
the actions or omissions of any brokers or other agents of the Company.
In the event that any Indemnified Person becomes involved in any
capacity in any action, proceeding or investigation brought by or against
any Person (including any Non-Managing Member) in connection with any
matter arising out of or in connection with the Company's business or
affairs (including a breach of this Agreement by any Member) the Company
will periodically reimburse such Indemnified Person for its legal and other
expenses (including the costs of any investigation and preparation)
incurred in connection therewith, provided that such Indemnified Person
shall promptly repay to the Company the amount of any such reimbursed
expenses paid to it if it shall ultimately be determined by a court having
appropriate jurisdiction in a decision that is not subject to appeal, that
such Indemnified Person is not entitled to be indemnified by the Company in
connection with such action, proceeding or investigation as provided in the
exception contained in the next succeeding sentence.
To the fullest extent permitted by applicable law, the Company
shall also indemnify any Indemnified Person, jointly and severally, against
any losses, claims, costs, damages or liabilities to which such Indemnified
Person may become subject in connection with any matter arising out of or
in connection with the Company's business or affairs, except to the extent
that any such loss, claim, cost, damage, or liability results solely from
the willful misfeasance, bad faith or gross negligence of, or any criminal
wrongdoing by, such Indemnified Person. If for any reason (other than the
willful misfeasance, bad faith or gross negligence of, or any criminal
wrongdoing by, such Indemnified Person) the foregoing indemnification is
unavailable to such Indemnified Person, or is insufficient to hold it
harmless, then the Company shall contribute to the amount paid or payable
to the Indemnified Person as a result of such loss, claim, cost, damage, or
liability in such proportion as is appropriate to reflect not only the
relative benefits received by the Company on the one hand and such
Indemnified Person on the other hand but also the relative fault of the
Company and such Indemnified Person, as well as any relevant equitable
considerations.
The Company may purchase and maintain insurance on behalf of an
Indemnified Person against any liability incurred by such person at the
Company's expense.
The reimbursement, indemnity and contribution obligations of the
Company under this Section 2.06 shall be in addition to any liability which
the Company may otherwise have, both as to action in an Indemnified
Person's official capacity and to action in any other capacity, and shall
continue as to an Indemnified Person who has ceased to have an official
capacity for acts or omissions during such official capacity or otherwise
when acting at the request of the Managing Member, and shall be binding
upon and inure to the benefit of any successors, assigns, heirs, and
personal representatives of the Company, the Managing Member and any other
Indemnified Person. The foregoing provisions shall survive any termination
of this Agreement.
(b) The reimbursement, indemnification and contribution rights
provided by this Section 2.06 shall not be deemed to be exclusive of any
other rights to which the Indemnified Person may be entitled under any
agreement or as a matter of law, or otherwise, both as to action in an
Indemnified Person's official capacity and to action in any other capacity,
and shall continue as to an Indemnified Person who has ceased to have an
official capacity for acts or omissions during such official capacity or
otherwise when acting at the request of the Managing Member and shall inure
to the benefit of the successors, assigns, heirs and personal
representatives of such Indemnified Person.
(c) Notwithstanding any of the foregoing to the contrary, the
provisions of this Section 2.06 shall not be construed as to relieve (or
attempt to relieve) from liability or to provide for the indemnification of
any Indemnified Person for any liability (including liability under federal
securities law 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
(including ERISA), but shall be construed so as to effectuate the
provisions of this Section 2.06 to the fullest extent permitted by
applicable law (including ERISA).
(d) The Managing Member shall have power to purchase and maintain
insurance on behalf of the Managing Member and the Indemnified Persons at
the expense of the Company against any liability asserted against or
incurred by them in any such capacity or arising out of the Managing
Member's status as such, whether or not the Company would have the power to
indemnify the Indemnified Persons against such liability under the
provisions of this Agreement.
(e) An Indemnified Person may rely upon and shall be protected in
acting or refraining from action upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
bond debenture, or other document believed by it to be genuine and to have
been signed or presented by the proper party or parties.
(f) An Indemnified Person may consult with counsel, accountants
and other experts reasonably selected by it, and any opinion of an
independent counsel, accountant or expert retained with reasonable care
shall be full and complete protection in respect of any action taken or
suffered or omitted by the Indemnified Person hereunder in good faith and
in accordance with such opinion.
(g) The Managing Member may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys, and the Managing Member shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed
with reasonable care by it hereunder.
Section 2.07 Management Fee; Payment of Costs and Expenses. The
Company shall pay to the Managing Member a management fee (the "Management
Fee") in respect of each series of Units, payable in arrears, for
investment management and other management services accruing daily and
calculated and paid on a monthly basis, of one-twelfth of 1.25% of the Net
Assets (as defined in Section 4.01(d)) of the Company in respect of each
such series of Units as of the end of each month, appropriately adjusted to
reflect capital appreciation or depreciation and any contributions,
redemptions or distributions. For purposes of determining the Management
Fee for any month, Net Assets shall not be reduced to reflect any accrued
Incentive Allocation (as defined in Section 4.05(b)) and any Management Fee
for such month (including any Incentive Allocation that is allocated to the
Managing Member as of such date). The Management Fee will reduce the
Capital Account of the series of Units to which it relates, as described in
Section 4.03.
If a Member is admitted to, or withdraws from, the Company as of
a date other than the first day of a month, the portion of the Management
Fee determined with respect to such Member's Capital Account shall be
appropriately pro-rated to take into account the number of days in such
month during which such Member was a Member. Partial withdrawals will
result in similar pro-ration.
The Managing Member has the right, in its sole discretion, to
waive fees or impose different fees on any Member, as may be agreed to by
the Managing Member and the Member, and to make the appropriate amendments
to this Agreement in order to reflect such fee arrangements.
The Managing Member shall bear its own overhead costs and
expenses and provide to the Company news, quotation and computer equipment
and services (except to the extent paid for through the permitted use of
soft dollars), office space and utilities, and secretarial and clerical
personnel.
The Company bears all of its own operating expenses, including,
without limitation, legal expenses; professional fees (including, without
limitation, fees and expenses of consultants and experts) relating to
investments; costs and expenses relating to any amendment of this Agreement
or the Company's other organizational documents or subscription agreement
or any modification or supplement to the Company's Confidential Private
Placement Memorandum, and any distribution of such documentation to the
Members; accounting, auditing and tax preparation expenses; fees and
expenses of other agents of the Company; taxes and governmental fees;
printing and mailing expenses; expenses relating to transfers and
redemptions of Units; fees and out-of-pocket expenses of any service
company retained to provide accounting and bookkeeping services to the
Company; quotation or valuation expenses; expenses relating to the
acquisition, holding and disposition of investments (e.g., expenses which
the Managing Member determines to be related to the investment of the
assets of the Company, including, among others, research expenses,
brokerage fees and commissions, expenses relating to short sales, clearing
and settlement charges, custodial fees and expenses, costs and charges for
equipment or services used in communicating information regarding the
Company's transactions between the Managing Member and other agents, bank
service fees, interest expenses, borrowing costs and extraordinary
expenses); insurance premiums; costs incurred in connection with any claim,
litigation, arbitration, mediation, government investigation or dispute in
connection with the business of the Company and the amount of any judgment
or settlement paid in connection therewith, or the enforcement of the
Company's rights against any Person; costs and expenses for indemnification
or contribution payable by the Company to any Person (including, without
limitation, pursuant to the indemnification obligations described in
Section 2.06); and all costs and expenses incurred as a result of
dissolution, winding-up and termination of the Company.
In addition, the Company will bear its organizational expenses
and the expenses incurred in connection with the offer and sale of Units,
including printing costs and legal fees and expenses of the Company, the
Managing Member and any placement agent and other expenses of the offering
of Units. In addition, the Company will bear, indirectly through its
investment in each Sector Fund, Portfolio Fund or Portfolio Company, its
pro rata portion of the offering, organizational and operating expenses of
such Sector Fund, Portfolio Fund or Portfolio Company, including expenses
related to the investment of the Company's assets, such as fees to the
Advisors, fees and expenses of Portfolio Companies and investment funds in
which the Sector Funds invest, brokerage commissions, expenses relating to
short sales, clearing and settlement charges, custodial fees, bank service
fees, interest expenses, borrowing costs and extraordinary expenses.
To the extent that expenses to be borne by the Company are paid
by the Managing Member, the Company shall reimburse the Managing Member for
such expenses. The Managing Member may elect, from time to time, to bear
certain of the Company's expenses described above.
Section 2.08 Principal Transactions and Other Related Party
Transactions. Each Non-Managing Member hereby authorizes the Managing
Member, on behalf of such Non-Managing Member, to select one or more
Persons, who shall not be affiliated with the Managing Member, to serve on
a committee, the purpose of which will be to consider and, on behalf of the
Non-Managing Members, approve or disapprove, to the extent required by
applicable law, of principal transactions and certain other related party
transactions. In no event shall any such transaction be entered into unless
it complies with applicable law.
ARTICLE III
Series of Units; Admission of New Members
Section 3.01 Classes and Series of Units. Units may be divided
into different classes of Units, and each class may be further divided into
different series of Units (each such series being referred to in this
Agreement as a "series," provided always that in the case of a class which
has not been divided into two or more series, the expression "series"
shall, where the context so requires, mean, for the purposes of this
Agreement, the Units of such class), in the discretion of the Managing
Member. In this Agreement, except when referred to under their separate
classes or series or where the context otherwise requires, the term "Units"
shall mean all classes and all series of each class of Units.
An initial series of Units (the "Initial Series") was issued on
the initial closing date. The initial purchase price per Unit for the
Initial Series of Units shall be $100. The Managing Member may, at any time
and from time to time, in its sole discretion, elect to raise additional
capital for the Company from Members and from new subscribers on such terms
and conditions as may be determined by the Managing Member in its sole
discretion. Generally, a new series of Units will be issued on each date an
existing Member makes an additional Capital Contribution in accordance with
Section 4.02 and on each date a new Member is admitted to the Company in
accordance with Section 3.03, except that the Managing Member may issue
additional Units of an existing series, or Units of a new series at an
initial purchase price other than $100, provided that any such issuance
does not have a material adverse effect on the NAV or Prior High NAV (as
defined in Section 4.05(b)(i)) of the Units of any Member. Each Unit will
carry equal rights and privileges with each other Unit of the same series.
Units of a class issued at the beginning of any fiscal year will be offered
at the then current NAV per Unit of the Initial Series of such class if
such Initial Series is at or above its Prior High NAV per Unit. If the
Initial Series of such class is not at or above its Prior High NAV per
Unit, Units will be issued in the next offered series of such class that is
at or above its Prior High NAV. If no series of Units of such class is at
or above its Prior High NAV at such time, such additional Units will be
issued as a separate series of such class at a price per Unit determined by
the Managing Member, in its sole discretion. Fractions of Units may be
issued to one ten-thousandth of a Unit.
Section 3.02 Conversion of Series. Following the end of each
fiscal year, any issued and outstanding series of Units of a class (other
than the Initial Series of such class) that is at or above its Prior High
NAV may, in the sole discretion of the Managing Member, be exchanged (after
reduction for the Management Fee and any Incentive Allocation) into Units
of the Initial Series of such class (or if such Initial Series is not at or
above its Prior High NAV per Unit, the next offered series of such class
that is at or above its Prior High NAV) at the prevailing NAV per Unit of
the Initial Series or such other series of Units (as applicable).
Section 3.03 New Members. Subject to the condition that each new
Member shall execute an appropriate counterpart to this Agreement pursuant
to which it agrees to be bound by the terms and provisions hereof, the
Managing Member may admit one or more new Members on the first day of each
calendar quarter or at such other times as the Managing Member may
determine in its sole discretion. Admission of a new Member shall not be a
cause for dissolution or termination of the Company.
Section 3.04 Adjustment to Number of Units Issued. If at any time
the Managing Member determines, in its sole discretion, that an incorrect
number of Units was issued to a Member because the NAV in effect on the
date of issuance was incorrect, the Company will adjust such Member's Units
by increasing or decreasing them (by means of issuances of additional Units
or compulsory redemptions of Units, in each case without additional
consideration), as appropriate, to such number of Units as would have been
issued at the correct NAV.
Section 3.05 Additional Classes of Units. The Company may issue
additional classes of Units, including, without limitation, classes of
Units that are subject to different fee and redemption arrangements or seek
to maximize total returns in other currencies. The Managing Member may,
without the prior consent of or notice to the Members, make appropriate
amendments to or supplement this Agreement to the extent necessary or
desirable to effect the issuance of Units of any such class, including,
without limitation, to account for different fee and redemption
arrangements or the separate currency-related transactions engaged in with
respect to such a class.
ARTICLE IV
Capital Accounts of Members and Operation Thereof
Section 4.01 Definitions. For the purposes of this Agreement,
unless the context otherwise requires:
(a) The term "Accounting Period" shall mean the following
periods: The initial Accounting Period commenced upon the commencement of
operations of the Company. Each subsequent Accounting Period shall commence
immediately after the close of the preceding Accounting Period. Each
Accounting Period hereunder shall close at the close of business on the
first to occur of (i) the last day of each calendar month (ii) the last day
of each fiscal year of the Company, (iii) the date immediately prior to the
effective date of the admission of a new Member pursuant to Section 3.03,
(iv) the date immediately prior to the effective date of an additional
Capital Contribution pursuant to Section 4.02, or (v) the date immediately
prior to the effective date of any redemption or complete withdrawal
pursuant to Article V or Article VI hereof. The final Accounting Period
shall end on the date the Company terminates.
(b) The term "Beginning Value" shall, with respect to any
Accounting Period, mean the value of the Company's Net Assets (as defined
below) at the beginning of such Accounting Period.
(c) The term "Ending Value" shall, with respect to any Accounting
Period, mean the value of the Company's Net Assets at the end of such
Accounting Period (before giving effect to the Incentive Allocation and the
Management Fee for such Accounting Period, but after giving effect to all
other expenses for such Accounting Period).
(d) The term "Net Assets" shall mean the excess of the Company's
total assets over its total liabilities, determined in accordance with
Section 4.07.
(e) The term "Net Capital Appreciation," with respect to any
Accounting Period, shall mean the excess, if any, of the Ending Value over
the Beginning Value.
(f) The term "Net Capital Depreciation," with respect to any
Accounting Period, shall mean the excess, if any, of the Beginning Value
over the Ending Value.
Section 4.02 Capital Contributions. Each Member has paid or
conveyed by way of contribution to the Company in exchange for the issuance
of Units cash and/or marketable securities having an aggregate value equal
to the amount set forth opposite such Member's name in Part I or II of the
Schedule. Additional Capital Contributions may be made by Members only in
accordance with the provisions of this Section 4.02.
Upon the approval of the Managing Member, any existing or
prospective Member may purchase additional or newly-issued Units by
contributing cash and/or marketable securities to the Company on the first
day of any calendar quarter or at such other times as the Managing Member
may determine in its sole discretion. The Managing Member and any of its
Affiliates may make additional Capital Contributions to the Company in cash
and/or marketable securities at any time and in any amounts.
Whether marketable securities shall be accepted as a contribution
to the Company shall be determined in the sole discretion of the Managing
Member.
Section 4.03 Capital Accounts.
----------------
(a) A separate capital account (herein called a "Capital
Account") shall be established on the books of the Company for each series
of Units. The Capital Account of each series shall initially be an amount
equal to the initial Capital Contributions with respect to such series. The
Capital Account of a series shall be (i) increased to reflect any
additional Capital Contributions pursuant to Section 4.02 in respect of
such series; (ii) increased to reflect the Net Capital Appreciation of such
series for each Accounting Period; (iii) decreased to reflect the
redemption of any Units of such series, pursuant to Section 5.02; (iv)
decreased to reflect the amount of any distributions (other than in
redemption of Units pursuant to Section 5.02) pursuant to Section 5.04 in
respect of such series (including any deemed distributions of taxes paid by
the Company pursuant to Section 5.04(c) in respect of such series); (v)
decreased for any Incentive Allocation pursuant to Section 4.05(b) and any
Management Fee in respect of such series; and (vi) decreased to reflect the
Net Capital Depreciation of such series for each Accounting Period.
(b) At the time of the conversion of any series of Units into
Units of the Initial Series or any other series of Units pursuant to
Section 3.02, the Capital Account of the converted series of Units shall be
reduced to zero, and the Capital Account of the series of Units into which
such Units were converted shall be increased by the balance of the Capital
Account of the converted series of Units immediately prior to the
conversion.
(c) A separate Capital Account shall also be established on the
books of the Company for each Member with respect to each series of Units
held by such Member. Each Member's Capital Account with respect to a series
of Units shall equal the Capital Account of such series times the Member's
Membership Percentage (as defined in Section 4.04) with respect to such
series of Units.
(d) The Managing Member shall have a separate Capital Account,
which shall initially be equal to zero, and which shall be (A) increased by
any Incentive Allocation at the time such Incentive Allocation is made, and
(B) decreased to reflect the amount of any distributions (including any
deemed distributions in connection with the withholding of taxes in respect
of such Incentive Allocation pursuant to Section 5.04(c)) made to, or
withdrawals made by, the Managing Member in respect of such Incentive
Allocation for such Accounting Period.
Section 4.04 Membership Percentages. A membership percentage (a
"Membership Percentage") shall be determined for each Member for any given
series of Units for each Accounting Period of the Company by dividing (i)
the number of Units owned by such Member within a given series by (ii) the
aggregate number of outstanding Units of such series as of the beginning of
such Accounting Period, after taking into account, in the case of both
clause (i) and clause (ii), any Units issued or redeemed as of (or the day
immediately after) the beginning of such Accounting Period. The aggregate
Membership Percentages for each series of Units shall equal 100%.
Section 4.05 Allocation of Net Capital Appreciation or Net
Capital Depreciation.
(a) Any Net Capital Appreciation or Net Capital Depreciation, as
the case may be, for an Accounting Period shall be allocated among the
different series of Units pro rata in accordance with the relative Capital
Accounts (determined prior to any year to date accrued Incentive
Allocation) of each series at the beginning of such Accounting Period,
after taking into account any contributions, distributions or redemptions
as of the beginning of such Accounting Period.
(b) (i) At the end of each fiscal year of the Company, or at such
other date during a fiscal year as of which the following determination is
required pursuant to this Section 4.05, five percent (5%) of the amount by
which the NAV of a series of Units, (determined prior to any applicable
Incentive Allocation accrual with respect to such series of Units and
appropriately adjusted as determined by the Managing Member in its sole
discretion for contributions, distributions and redemptions, but after
giving effect to the allocation, pursuant to Section 4.05(a), of Net
Capital Appreciation and Net Capital Depreciation for the Accounting Period
then ending) exceeds such series' Prior High NAV at such date, shall be
reallocated to the Capital Account of the Managing Member (the "Incentive
Allocation"). The "Prior High NAV" with respect to a series of Units
initially shall mean an amount equal to the NAV of such series as of the
date of its initial issue. The new Prior High NAV with respect to a series
of Units immediately following the end of any period for which an Incentive
Allocation has been made with respect to such series shall be reset to
equal the NAV of such series, unless the series is exchanged pursuant to
Section 3.02 into the Initial Series or another series, in which case the
new Prior High NAV shall be reset to equal the NAV of the Initial Series or
other series. If the NAV of such series at the end of any fiscal year of
the Company, and such other date during a fiscal year as of which the
determination of the Incentive Allocation is required pursuant to Section
4.05(c) is less than its Prior High NAV, the Prior High NAV of that series
shall not change. The Prior High NAV for each series of Units shall be
appropriately adjusted as determined by the Managing Member in its sole
discretion to account for contributions, distributions and redemptions made
with respect to such series of Units.
(ii) The Incentive Allocation with respect to a series of
Units accrues daily and the Company shall credit the Capital Account of the
Managing Member as of December 31 of each year for the Incentive
Allocation.
(c) In the event that the Company is dissolved other than at the
end of a fiscal year, or the effective date of a Member's redemption of
Units is other than a fiscal year-end, then the Incentive Allocation
described above shall be determined and made as if such date were a fiscal
year-end (but only in respect of the Units being redeemed).
(d) Notwithstanding anything to the contrary herein, to the
extent that the Company invests in New Issues (as defined below), and there
are Members who are restricted persons within the meaning of the National
Association of Securities Dealers, Inc. (the "NASD") Conduct Rule 2790 (the
"NASD Rule"), investments in New Issues will be made through a special
account and profits and losses attributable to New Issues will not be
allocated to the Capital Accounts of Members who are restricted from
participating in New Issues under the NASD Rule. One or more additional
classes (or sub-classes) of Units may be created and offered only to those
Members who are not restricted persons, and only those Members who are not
restricted persons shall have any beneficial interest in such classes (or
sub-classes). Notwithstanding anything in this Agreement to the contrary,
the Managing Member shall have the right, without the consent of the
Members, to make such amendments to this Agreement, and to take such other
actions, as it deems advisable and appropriate, in its sole discretion, to
implement the purposes of this Section 4.05(d). A "New Issue" is any equity
securities of an initial public offering as described in the NASD Rule, or
otherwise as such term may be interpreted from time to time under the
then-current rules of the NASD.
Section 4.06 Amendment of Incentive Allocation. The Managing
Member shall have the right to amend, without the consent of the
Non-Managing Members, Section 4.05 of this Agreement so that the Incentive
Allocation (or other performance-based allocation) therein provided
conforms to any applicable requirements of the Securities and Exchange
Commission and other regulatory authorities; provided, however, that no
such amendment shall increase the Incentive Allocation (or other
performance-based allocation) as so amended to more than the amount payable
in accordance with Section 4.05 of this Agreement (or, in the case of any
other performance-based allocation arrangement, the specific arrangement
set forth in a written agreement between the affected Non-Managing Member
and the Company), without the written consent of the affected Non-Managing
Member. The Managing Member reserves the right, in its sole discretion, to
apply different performance-based percentage allocations and performance
compensation arrangements to any Member, as may be agreed by the Managing
Member and such Member.
Section 4.07 Determination of Net Assets.
---------------------------
(a) The Company's Net Assets shall be determined in accordance
with U.S. generally accepted accounting principles consistently applied as
a guideline and the following principles:
(i) The value of the Company's investment in a Sector Fund
or Portfolio Fund shall be equal to the net asset value of the Company's
interest in such Sector Fund or Portfolio Fund, determined in accordance
with the terms and conditions of the respective governing agreement of each
Sector Fund or Portfolio Fund, as it may be amended, supplemented or
otherwise modified from time to time (or such other information deemed
relevant by the Administrator).
(ii) All other assets or liabilities of the Company shall be
assigned such value as the Administrator may reasonably determine.
(iii) The amount of the Company's assets and liabilities
(including without limitation indebtedness for money borrowed and the
Management Fee) shall be determined in accordance with U.S. generally
accepted accounting principles and guidelines, applied on a consistent
basis, provided that the Administrator in its discretion may provide
reserves for estimated accrued expenses, liabilities and contingencies,
even if such reserves are not required by U.S. generally accepted
accounting principles.
(iv) The amount payable to a Member or former Member in
redemption of part or all of such Member's or former Member's Units
pursuant to Section 5.02 shall be treated as a liability of the Company,
until paid, from (but not prior to) the beginning of the Accounting Period
that begins immediately after the close of business on the day immediately
prior to the Redemption Date (as defined in Section 5.02(a)) for such
Units.
(v) The amount to be received by the Company on account of
any Capital Contributions pursuant to Section 4.02 shall be treated as an
asset of the Company from (but not before) the beginning of the Accounting
Period that begins immediately after the close of business on the day
immediately prior to the effective date of such Capital Contributions.
(vi) Distributions (other than in redemption of Units
pursuant to Section 5.02) made pursuant to Section 5.04 (including deemed
tax distributions pursuant to Section 5.04(c)) other than as of the
beginning of an Accounting Period shall be treated as an advance and as an
asset of the Company, until the beginning of the Accounting Period
following the date of distribution.
(vii) The Incentive Allocation, if any, credited to the
Capital Account of the Managing Member pursuant to Section 4.05(b) shall be
treated as a liability, until distributed, from the beginning of the
Accounting Period following the Accounting Period in which the Incentive
Allocation was credited to such Capital Account.
(b) The Company may suspend the valuation of its assets and
liabilities, and any distributions or redemptions of any amounts from
Capital Accounts, for any period during which a Sector Fund has suspended
the valuation of its assets and liabilities. The Managing Member shall
promptly notify Members of any such suspension, and the termination of any
such suspension, by means of a written notice.
(c) All values assigned to securities and other assets by the
Managing Member or the Administrator pursuant to this Section 4.07 shall be
final and conclusive as to all of the Members. The Managing Member may
consult with and rely upon valuations of the Company's securities and other
assets provided by the Administrator.
Section 4.08 Determination of Net Asset Value. The NAV of a
series of Units shall be equal to the balance of the Capital Account with
respect to such series of Units. The NAV per Unit of a series shall be
equal to the NAV of such series divided by the number of outstanding Units
of such series.
Section 4.09 Allocation for Tax Purposes. For each taxable year,
items of income, deduction, gain, loss or credit actually recognized by the
Company for federal income tax purposes shall be allocated for federal
income tax purposes among the Members in such manner as to equitably
reflect the amounts credited or debited to each Member's Capital Account
for the current and prior taxable years (or relevant portions thereof).
Allocations under this Section 4.09 shall be made by the Managing Member in
accordance with the principles of Sections 704(b) and 704(c) of the Code
and in conformity with applicable Treasury Regulations promulgated
thereunder (including, without limitation, Treasury Regulation Sections
1.704-1(b)(2)(iv)(f)(4), 1.704-1(b)(4)(i) and 1.704-3(e)). Notwithstanding
the foregoing, the Managing Member in its sole discretion may adjust the
allocation of items of Company taxable income, gain, loss and deduction
among the Members as it shall deem to be equitable, and necessary or
desirable.
If, during or immediately following the end of a taxable year,
any Member redeems all of its Units in the Company or the Managing Member
withdraws any amount from its Capital Account maintained in respect of its
Incentive Allocation, and the Member would (absent this sentence) recognize
gain or loss under Section 731 of the Code as a result of such redemption
or withdrawal, the Managing Member may, in its sole discretion, elect to
specially allocate to such Member, for U.S. federal income tax purposes,
any income and gain or loss and deduction (including short-term capital
gain or loss) realized by the Company during such taxable year, through and
including the date of redemption or withdrawal, in an amount up to that
amount of income and gain or loss and deduction which if so allocated would
avoid the Member recognizing gain or loss on the redemption or withdrawal
under Section 731 of the Code (ignoring for this purpose, in the sole
discretion of the Managing Member, any adjustments that have been made to
the tax basis of the redeeming Member's Units resulting from any transfers
or assignment of the Units (other than the original issue of the Units),
including by reason of death). Any such election by the Managing Member
shall, to the extent reasonably practicable as determined by the Managing
Member in its sole discretion, be applied on an equitable basis to all
Members that redeem all of their Units during or immediately following the
end of such taxable year.
Section 4.10 Determination by Managing Member of Certain Matters;
----------------------------------------------------
Managing Member's Discretion.
----------------------------
(a) All matters concerning the valuation of securities and other
assets and liabilities of the Company, the allocation of profits, gains and
losses among the Members (including for tax purposes) and accounting
procedures not expressly provided for by the terms of this Agreement
(including, without limitation, allocation and accounting procedures in the
event a Member that has an account managed by the Managing Member in a
manner similar to the investment program utilized by the Company which
causes the assets and liabilities in such account to be transferred to the
Company) shall be determined by the Managing Member (or such Person as the
Managing Member may authorize to make such determination), whose
determination shall be final, binding and conclusive as to all of the
Members.
(b) Whenever in this Agreement the Managing Member is permitted
or required to make a decision (i) in its "sole discretion" or
"discretion," or under a similar grant of authority or latitude, the
Managing Member shall be entitled to consider only such interests and
factors as it desires and may consider its own interests and the interests
of its Affiliates and its determination shall be final, binding and
conclusive as to all of the Members, or (ii) in its "good faith" the
Managing Member shall act under such express standards and shall not be
subject to any other or different standards imposed by this Agreement or by
law or any other agreement contemplated herein.
Section 4.11 Adjustments to Take Account of Interim Year Events.
If the Code or regulations promulgated thereunder require an adjustment to
the Capital Account of a Member or some other interim year event occurs
necessitating in the Managing Member's judgment an equitable adjustment,
the Managing Member shall make such adjustments in the determination and
allocation among the Members of Net Capital Appreciation, Net Capital
Depreciation, Capital Accounts, Membership Percentages, Incentive
Allocation, the Management Fee, Company expenses, items of income,
deduction, gain, loss, credit or withholding for tax purposes, accounting
procedures or such other financial or tax items as shall equitably take
into account such interim year event and applicable provisions of law, and
the determination thereof by the Managing Member shall be final, binding
and conclusive as to all of the Members.
Section 4.12 Tax Withholding. If the Company is required to
withhold taxes on any distribution to, or to pay or incur any tax with
respect to any income allocable to or otherwise on account of, any Member
or series of Units, the Company may withhold such amounts and make such
payments to such taxing authorities as are necessary to ensure compliance
with such tax laws.
ARTICLE V
Redemptions and Distributions
Section 5.01 Redemptions and Distributions in General. No Member
shall be entitled (i) to receive distributions from the Company, except as
provided in Section 5.04 and Section 7.02; or (ii) to redeem any of its
Units, except as provided in Sections 5.02 and 6.01 or upon the consent of,
or as may be required by, and upon such terms as may be determined by, the
Managing Member in its sole discretion. In no event shall a Member be
entitled to demand to receive property other than cash.
Section 5.02 Redemptions.
-----------
(a) Subject to Sections 5.02(c) and 5.03, each Member shall have
the right to redeem some or all of its Units, as of the time immediately
prior to the opening of business on each January 1, April 1, July 1 and
October 1 occurring on or after the first anniversary of the purchase of
such Units by the Member (each, a "Redemption Date"), upon prior written
notice received by the Managing Member at least 91 days' prior to the
Valuation Date (as defined below) in respect of the redemption (unless such
notice is waived by the Managing Member in its sole discretion). No partial
redemption shall be permitted if thereafter the aggregate NAV of the
remaining Units held by the redeeming Member would be less than $500,000,
unless the Managing Member in its sole discretion waives such limitation.
If outstanding redemption requests from all Members with respect
to any Redemption Date (an "Initial Holdover Redemption Date") (including
without limitation any Held Over Units (as defined below)) would result in
redemption proceeds in excess of the Maximum Redemption Amount (as defined
below), the Managing Member may, in its sole discretion, refuse to redeem
Units requested for redemption that would have resulted in redemption
proceeds in an amount equal to or less than such excess. The "Maximum
Redemption Amount," with respect to any Redemption Date, means 25% of the
aggregate NAV, determined as of the time immediately prior to such
Redemption Date, of all of the Units outstanding immediately prior to such
Redemption Date. If the Managing Member refuses to redeem Units as set
forth above, the requests for redemption on such Initial Holdover
Redemption Date by Members shall be reduced ratably, and the requested
Units not so redeemed (the "Held Over Units") shall be redeemed on
subsequent Redemption Dates subject to the Maximum Redemption Amount
calculation for such subsequent Redemption Date and the Managing Member's
rights to refuse redemptions in connection therewith, provided that Held
Over Units shall be redeemed in priority to any subsequently received
redemption requests.
Units of a particular series will be redeemed at a per Unit price
(the "Redemption Price") based upon the NAV of such series as of the close
of business on the day (the "Valuation Date") immediately preceding the
applicable Redemption Date (taking into account the allocation of any Net
Capital Appreciation or Net Capital Depreciation under Section 4.05 and any
distributions under Section 5.04 for the Accounting Period then ending),
after reduction for any Management Fee and Incentive Allocation and other
liabilities of the Company to the extent accrued or otherwise attributable
to the Units being redeemed (calculated as if the Redemption Date was the
last day of the fiscal year), and the amount of any such reduction for the
Management Fee shall be paid to the Managing Member, and the amount of any
Incentive Allocation taken into account shall be allocated to the Capital
Account of the Managing Member. If a redeeming Member owns Units of more
than one series, unless otherwise specified by such Member in writing,
Units shall be redeemed on a "first in-first out" basis for purposes of
determining the Redemption Price. The Company will endeavor to pay the
redemption proceeds within 45 days following the applicable Redemption
Date, without interest. The Managing Member may permit redemptions at other
times, in other amounts and upon other terms subject to any conditions that
it may impose in its sole discretion.
(b) The Managing Member shall have the right, in its sole
discretion, as of any date that it determines (including during a fiscal
year) and for any reason (including, without limitation, pursuant to
Article VI, for regulatory or tax reasons, or for any other reason), to
redeem any or all of a Member's Units. Any redemptions made pursuant to
this Section 5.02(b) shall be paid out in accordance with Section 5.02(a).
(c) Subject to the redemption provisions of this Agreement, the
Managing Member, and any Affiliate of the Managing Member, shall have the
right to redeem any and all of its Units without notice to the Non-Managing
Members.
(d) If at any time after a redemption of Units (including in
connection with any withdrawal of a Member from the Company pursuant to
Article VI) the Managing Member determines, in its sole discretion, that
the amount paid to such Member or former Member pursuant to such redemption
was materially incorrect (including because the NAV at which the Member or
former Member purchased such Units was incorrect), the Company will pay to
such Member or former Member any additional amount that it determines such
Member or former Member would have been entitled to receive had the
redemption been effected at the correct NAV, or, in its sole discretion,
seek payment from such Member or former Member of (and such Member or
former Member shall be required to pay) the amount of any excess payment
that the Managing Member determines such Member or former Member received,
in each case without interest.
Section 5.03 Limitation on Redemptions.
-------------------------
(a) The right of any Member to redeem some or all of its Units
pursuant to the provisions of Section 5.02 is subject to the provision by
the Managing Member for all Company liabilities in accordance with the Act,
and for reserves for estimated accrued expenses, liabilities and
contingencies in accordance with Section 4.07.
(b) The Managing Member may suspend redemptions, at any time
prior to the effective date of the redemption, and notwithstanding the fact
that a timely redemption request has previously been made, for the whole,
or any part, of any of the following periods: (i) during the closing of the
principal stock exchanges or other markets on which any substantial portion
of the Company's direct or indirect investments, in the opinion of the
Managing Member, is quoted or dealt in other than for ordinary holidays, or
the restriction of suspension of dealings therein; (ii) during the
existence of any state of affairs which, in the opinion of the Managing
Member, constitutes an emergency as a result of which the determination of
the price, value or disposition of the Company's direct or indirect
investments would be impractical or prejudicial to Members; (iii) during
which redemptions would, in the opinion of the Managing Member, result in a
violation of applicable law; (iv) during any breakdown in the means of
communication or computation normally employed in determining the price or
value of any of the investments of the Company or the current price or
values on any stock exchange in respect of assets of the Company; (v)
during the occurrence of any period when the Company is unable to withdraw
sufficient funds from the Sector Funds or Portfolio Companies or otherwise
to meet redemption requests or in circumstances when the disposal of part
or all of the Company's assets to meet such redemption requests would be
prejudicial to Members; (vi) during which any transfer of funds involved in
the realization or acquisition of investments or payments due on redemption
of Units cannot, in the opinion of the Managing Member, be effected at
advantageous rates of exchange, and (vii) during any period in which any
Sector Fund (or other investment vehicle in which the Company has invested)
has suspended redemptions or the calculation of its net asset value.
Postponed redemptions shall be effected on the first day of the month
immediately following the termination of the suspension. Any part of a
redemption request that is postponed shall take precedence over
later-received redemption requests until the postponed request or requests
have been satisfied in full. Members shall be given notice in writing of
the suspension of redemptions and the termination of any such suspension.
Units shall be held by the Member during the suspension period as if no
redemption request had been made.
Section 5.04 Distributions.
-------------
(a) The Managing Member may make distributions in cash (i) in its
discretion, in connection with redemptions from the Company by a Member or
in connection with a Member's complete withdrawal from the Company pursuant
to Article VI, (ii) in its discretion, at any time to the Managing Member
in an amount not in excess of the then positive balance in its Capital
Account to which the Incentive Allocation is credited pursuant to Section
4.03, and (iii) in its discretion, at any time to all of the Members on a
pro rata basis in accordance with the Members' Capital Accounts.
(b) If a distribution is made in-kind, immediately prior to such
distribution, the Managing Member shall determine the fair market value of
the property distributed and adjust the Capital Accounts of all Members
upwards or downwards to reflect the difference between the book value and
the fair market value thereof, as if such gain or loss had been recognized
upon an actual sale of such property and allocated pursuant to Section
4.05. Each such distribution shall reduce the Capital Account of the Member
to which the distribution was made by the fair market value thereof.
(c) Any taxes paid over to a governmental authority by the
Company pursuant to Section 4.12 with respect to any Member (other than on
account of all Members equally) shall be deemed to be a distribution to
such Member. If a Member who receives a deemed distribution of taxes under
this Section 5.04(c) owns more than one series of Units, the Managing
Member in its sole discretion may allocate such deemed distribution among
such Member's different series of Units. Notwithstanding the foregoing, the
Managing Member in its sole discretion may elect to treat any deemed
distribution to a Member under this Section 5.04(c), not as a distribution,
but as an advance to the Member and a partial redemption of such Member's
Units as of the next Redemption Date following the deemed distribution, and
such Member's Units shall be reduced thereby as appropriately determined by
the Managing Member.
ARTICLE VI
Withdrawal, Death, Disability
Section 6.01 Withdrawal, Death, etc. of Members.
----------------------------------
(a) The withdrawal, death, adjudication of incompetency,
insolvency or bankruptcy of a Member shall not dissolve the Company.
Subject to the restrictions set forth in Section 1.05(a), upon the
assignment of a Member's Units by operation of law (i) pursuant to the
death, adjudication of incompetency, insolvency or bankruptcy of such
Member or (ii) pursuant to the corporate reorganization or merger of such
Member, the legal representatives or successors of such Member shall
succeed as assignee to the Member's interest in the Company, but shall not
be admitted as a substituted member without the consent of the Managing
Member.
(b) In the event of the assignment of a Member's Units by
operation of law (i) pursuant to the death, adjudication of incompetency,
insolvency or bankruptcy of such Member or (ii) pursuant to the corporate
reorganization or merger of such Member, the legal representatives or
successors of such Member will be required to promptly provide written
notice of such event to the Company. The membership interest of such Member
shall continue at the risk of the Company's business until the last day of
the calendar month following the calendar month in which the Managing
Member received written notice of such event. At the end of such period,
the Managing Member shall, in its sole discretion, either (i) substitute
the legal representatives or successors of the former Members as Members of
the Company, provided that the Managing Member determines in its sole
discretion that such legal representatives or successors are qualified to
become Members of the Company, or (ii) redeem such former Member's interest
in the Company in accordance with the redemption provisions set forth in
Article V.
Section 6.02 Required Withdrawals. The Managing Member may at any
time and for any reason, in its sole discretion, terminate the interest of
any Member in the Company or require a Member to withdraw any part of its
Capital Account. A Member required to withdraw under this Section 6.02
shall be treated for all purposes of distribution of redemption proceeds as
a Member who has given notice of a redemption of all of its capital under
Article V.
ARTICLE VII Duration and Dissolution of the Company
Section 7.01 Duration.
--------
(a) The Company shall continue until the earlier of (i) a
determination by the Managing Member that the Company should be dissolved
and wound-up; (ii) the termination, bankruptcy, insolvency, dissolution or
withdrawal by the Managing Member other than by assignment of the Managing
Member's interest as provided in Section 1.05(b); or (iii) a vote of a
majority of the Members pursuant to Section 7.01(b). Upon a determination
to dissolve the Company, redemptions, and distributions in respect thereof,
may not be made.
(b) Dissolution of the Company by the Members:
(i) For purposes of this Agreement:
(A) The term "Meeting Request" shall mean a written
request from Members holding (as of the date of such request) at least 20%
of the voting power, based on NAV, of the outstanding Units (excluding for
purposes of calculating such percentage any Units held by the Managing
Member, Xxxxxxx, Xxxxx & Co. and any affiliate or employee of the Managing
Member or Xxxxxxx, Sachs & Co. (collectively, the "Managing Member Units"))
to the Managing Member requesting that the Managing Member call a meeting
for the purpose of dissolving the Company.
(B) The term "Dissolution Record Date" shall mean with
respect to a meeting at which the dissolution of the Company is to be
considered, a date selected by the Managing Member, which is no later than
15 days following the date on which the Managing Member receives a Meeting
Request.
(ii) Upon the written request of one or more Members holding
at least 1% of the voting power, based on NAV, of the outstanding Units
(excluding for purposes of calculating such percentage the Managing Member
Units), solely for purposes of soliciting other Members in connection with
making a Meeting Request, the Managing Member shall use commercially
reasonable efforts to send to all other Members a solicitation to make a
Meeting Request, subject to the Managing Member's right to impose
reasonable conditions upon any such solicitation.
(iii) Upon receipt by the Managing Member of a Meeting
Request, the Managing Member shall set a Dissolution Record Date and shall
schedule a meeting of the Members for no later than 60 days after the
Dissolution Record Date for the purpose of voting on the dissolution of the
Company (such meeting, the "Dissolution Meeting"). The quorum for such
meeting shall require attendance, in person or by proxy, of Members holding
at least a majority of the voting power, based on NAV, of the outstanding
Units (excluding for purposes of calculating such percentage the Managing
Member Units) as of the Dissolution Record Date. If a quorum is not
achieved for the meeting, the meeting shall be cancelled and no vote shall
be held. The dissolution of the Company by the Members may only be voted
upon at a meeting properly called in accordance with this Section 7.01(b)
and will be approved only upon the affirmative vote of Members holding at
least a majority of the voting power, based on NAV, of the outstanding
Units (excluding for purposes of calculating such percentage the Managing
Member Units).
(iv) In the event of an affirmative vote in favor of
dissolution of the Company, (A) the Managing Member shall seek to liquidate
the Company as soon as reasonably practicable (including by submitting
redemption requests to the Sector Funds and any other investment funds to
which the Company has allocated assets within 30 days of such vote), and
(B) the Company shall be dissolved and terminated in accordance with the
provisions of Section 7.02.
(v) On or prior to August 25, 2006, the Managing Member may,
in its sole discretion, amend, delete or waive any of the provisions
relating to the dissolution of the Company by the Members described in this
Section 7.01(b); provided that, if the Managing Member has received a
written request from one or more Members representing at least 1% of the
voting power, based on NAV, of the outstanding Units (excluding for
purposes of calculating such percentage the Managing Member Units) to
facilitate the solicitation of other Members in connection with making a
Meeting Request or has received a Meeting Request in accordance with
paragraphs (ii) or (iii) above, any such amendment, deletion or waiver
shall not become effective until the earliest of the date on which (A) the
solicitations to make such Meeting Request have been terminated or have
expired in accordance with such conditions as have been attached by the
Managing Member to the said solicitations pursuant to paragraph (ii) above,
or (B) the Dissolution Meeting referred to in such Meeting Request has been
held and there were insufficient votes to dissolve the Company or cancelled
for lack of a quorum pursuant to paragraph (iii) above. Notwithstanding
anything in the foregoing to the contrary, the Managing Member may amend or
waive any of the provisions relating to the dissolution of the Company
described in this Section 7.01(b) at any time in its sole discretion, so
long as such amendment or waiver does not adversely affect the right of the
Members to dissolve the Company. If the Managing Member makes any permitted
amendment, deletion or waiver, it will give written notice thereof to the
Members following such amendment, deletion or waiver.
Section 7.02 Dissolution.
-----------
(a) On dissolution of the Company, the Company shall cease to
engage in further business except to the extent necessary to promptly wind
up its affairs, perform existing contracts and preserve the value of the
Company's assets. The Company shall terminate upon the final distribution
of liquidation proceeds by the Managing Member and the filing of a
certificate of cancellation with the Secretary of State of the State of
Delaware.
(b) Upon dissolution, the Managing Member shall, within no more
than 30 days after completion of a final audit of the Company's financial
statements, make any distributions out of the Company assets in the
following manner and order:
(i) to creditors, including Members who are creditors, to
the extent otherwise permitted by law, in satisfaction of liabilities of
the Company (whether by payment or by establishment of reserves); and
(ii) to the Members in the proportion of their respective
Capital Accounts.
(c) The Managing Member, in its discretion, at any time and from
time to time, may designate one or more liquidators, including, without
limitation, one or more partners, members or officers of the Managing
Member, who shall have full authority to wind up and liquidate the business
of the Company and to make final distributions as provided in this Section
7.02. The appointment of any liquidator may be revoked or a successor or
additional liquidator or liquidators may be appointed at any time by an
instrument in writing signed by the Managing Member. Any such liquidator
may receive compensation as shall be fixed, from time to time, by the
Managing Member.
(d) In the event that the Company is terminated on a date other
than the last day of a fiscal year, the date of such termination shall be
deemed to be the last day of a fiscal year for purposes of adjusting the
Capital Accounts of the Members pursuant to Section 4.03. For purposes of
distributing the assets of the Company upon dissolution, the Managing
Member shall be entitled to a return, on a pari passu basis with the
Non-Managing Members, of the amount standing to its credit in its Capital
Account.
ARTICLE VIII
Tax Returns; Reports to Members
Section 8.01 Independent Auditors. The financial statements of
the Company shall be audited by Ernst & Young LLP, or such other certified
public accountants of similar standing selected by the Managing Member, as
of the end of each fiscal year of the Company.
Section 8.02 Filing of Tax Returns. The Managing Member shall
prepare and file, or cause the accountants of the Company to prepare and
file, a federal information tax return in compliance with Section 6031 of
the Code, and any required state and local income tax and information
returns for each tax year of the Company.
Section 8.03 Tax Matters Partner. The Managing Member shall be
designated on the Company's annual federal information tax return, and have
full powers and responsibilities, as the "Tax Matters Partner" of the
Company for purposes of Section 6231(a)(7) of the Code. In the event the
Company shall be the subject of an income tax audit by any federal, state
or local authority, to the extent the Company is treated as an entity for
purposes of such audit, including administrative settlement and judicial
review, the Tax Matters Partner shall be authorized to act for, and its
decision shall be final and binding upon, the Company and each Member
thereof. All expenses incurred in connection with any such audit,
investigation, settlement or review shall be borne by the Company.
Section 8.04 Financial Reports to Current Members. The Company
shall prepare and mail to each Non-Managing Member (i) annual audited
financial statements after the end of the Company's fiscal year, and (ii)
information necessary for such Member to complete its U.S. federal, state
and local income tax returns (including at the request of a Member, such
information that such Member may reasonably require annually to complete
its tax filing obligations, provided that the Managing Member may provide
the same without undue effort or expense).
Section 8.05 Tax Reports to Members and Former Members. The
Company shall use reasonable efforts to prepare and mail, or cause its
accountants to prepare and mail, to each Member and, to the extent
necessary, to each former Member (or its legal representatives), as soon as
possible after the close of each taxable year of the Company, a report
setting forth in sufficient detail such information as shall enable such
Member or former Member (or such Member's legal representatives) to prepare
their respective federal income tax returns and/or extensions in accordance
with the laws, rules and regulations then prevailing.
Section 8.06 Partnership Status of Company. The Managing Member
intends for the Company to be treated as a partnership for U.S. federal
income tax purposes. Notwithstanding anything herein to the contrary,
neither the Company nor the Managing Member shall make an election (i.e.,
check-the-box) under Treasury Regulation Section 301.7701-3 for the Company
to be classified for federal income tax purposes as an association taxable
as a corporation.
ARTICLE IX
Miscellaneous
Section 9.01 General. This Agreement (i) shall be binding on the
permitted transferees, assigns, executors, administrators, estates, heirs,
and legal successors and representatives of the Members and (ii) may be
executed, through the use of separate signature pages or supplemental
agreements in any number of counterparts with the same force and effect as
if the parties executing such counterparts had all executed one
counterpart; provided, however, that each such counterpart shall have been
executed by the Managing Member and that the counterparts, in the
aggregate, shall have been signed by all of the Members.
Section 9.02 Power of Attorney. Each of the Members hereby
appoints the Managing Member as its true and lawful representative and
attorney-in-fact, in its name, place and stead to make, execute, sign,
acknowledge, swear to and file:
(a) a Certificate of Formation of the Company and any amendments
thereto as may be required under the Act;
(b) any duly adopted amendment to this Agreement;
(c) any and all instruments, certificates, and other documents
that may be deemed necessary or desirable to effect the dissolution and
winding-up of the Company (including, but not limited to, a Certificate of
Cancellation of the Certificate of Formation); and
(d) any business certificate, fictitious name certificate,
amendment thereto, or other instrument or document of any kind whatsoever
necessary, desirable or convenient to accomplish the business, purpose and
objectives of the Company, or required by any applicable federal, state,
local or foreign law.
The power of attorney hereby granted by each of the Non-Managing
Members is coupled with an interest, is irrevocable, and shall survive, and
shall not be affected by, the subsequent death, disability, incapacity,
incompetency, termination, bankruptcy, insolvency or dissolution of such
Non-Managing Member; provided, however, that such power of attorney shall
terminate upon the substitution of another non-managing member for all of
such Non-Managing Member's interest in the Company or upon the complete
withdrawal of such Non-Managing Member from participation in the Company.
Section 9.03 Amendments to Limited Liability Company Agreement.
The terms and provisions of this Agreement may be modified or amended at
any time and from time to time with the written consent of Members having
in excess of 50% of the voting power of the outstanding Units, (or, if an
amendment affects only a particular series of Units, with the written
consent of Members having in excess of 50% of that series of Units), based
on the NAV of such Units, and the affirmative vote of the Managing Member
insofar as is consistent with the laws governing this Agreement; provided,
however, that without the consent of the Non-Managing Members, the Managing
Member may amend this Agreement or the Schedule hereto to (i) reflect
changes validly made in the membership of the Company, the Capital
Contributions, Membership Percentages and changes in the number of Units
held by the Members; (ii) change the provisions relating to the Incentive
Allocation so that such provisions conform to the applicable requirements
of the Securities and Exchange Commission and other regulatory authorities,
so long as such amendment does not increase the Incentive Allocation to
more than the amount that would otherwise be determined absent such
amendment; (iii) reflect a change in the name of the Company; (iv) make a
change that is necessary or, in the opinion of the Managing Member,
advisable to qualify the Company as a limited liability company or other
entity in which the Members have limited liability under the laws of any
state, or ensure that the Company shall not be treated as an association or
a publicly traded partnership taxable as a corporation for federal income
tax purposes; (v) make any change that does not adversely affect the
Members in any material respect; (vi) make a change that is necessary or
desirable to satisfy any requirements, conditions or guidelines contained
in any opinion, directive, order, ruling or regulation of any federal,
state or foreign statute, so long as such change is made in a manner which
minimizes to the extent practicable, as determined by the Managing Member
in its sole discretion, any adverse effect on the Members or that is
required or contemplated by this Agreement; (vii) make a change in any
provision of this Agreement that requires any action to be taken by or on
behalf of the Managing Member or the Company pursuant to the requirements
of applicable Delaware law if the provisions of applicable Delaware law are
amended, modified or revoked so that the taking of such action is no longer
required; (viii) prevent the Company or the Managing Member from in any
manner being deemed an "investment company" subject to the provisions of
the Investment Company Act of 1940, as amended; (ix) correct mistakes or
clarify ambiguities; (x) in the event of adverse changes in the tax law or
interpretations thereof applicable to the Company, amend this Agreement as
determined by the Managing Member if it deems advisable or necessary to
address such changes; (xi) conform this Agreement to the disclosure
provided in the Memorandum; (xii) correct or supplement any conflicting
provisions and delete or add provisions as may be required by applicable
law or regulations, in each case, as determined by the Managing Member in
its sole discretion; (xiii) make any other amendment provided such
amendment does not become effective until after such affected Members have
been given prior written notice of such change and have had the right
following receipt of such notice to request the redemption of their Units
and such redemption shall have become effective; (xiv) amend, delete or
waive the provisions of Section 7.01(b) in accordance with Section
7.01(b)(v); or (xv) make any other amendments similar to the foregoing.
Each Member, however, must consent to any amendment that would (a) reduce
its Capital Account or rights of redemption or withdrawal; or (b) amend the
provisions of this Agreement relating to amendments.
Section 9.04 Instruments. The parties agree to execute and
deliver any further instruments or perform any acts which are or may become
necessary to carry on the Company created by this Agreement or to
effectuate its purposes.
Section 9.05 No Personal Liability for Return of Capital. The
Managing Member shall not be personally liable for the return or repayment
of all or any portion of Capital Contribution or profits of any Member, it
being expressly agreed that any such return of Capital Contribution or
profits made pursuant to this Agreement shall be made solely from the
assets (which shall not include any right of contribution from the Managing
Member) of the Company.
Section 9.06 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 and, without limitation thereof,
that the Act as now adopted or as may be hereafter amended shall govern the
limited liability company aspects of this Agreement. The parties also
expressly agree that all actions and proceedings brought by a party against
a Member or the Company, in connection with the Company's business or
affairs (including a breach of this Agreement by a party hereto) shall be
brought in and be subject to the jurisdiction of a court of the State of
New York or any federal district court in the State of New York.
Section 9.07 Waiver of Inconvenient Forum. The parties hereto
irrevocably waive to the fullest extent permitted by law any objection that
they may now or hereafter have to the laying of venue of any such action or
proceeding in the courts of the State of New York located in the City of
New York or of the United States District Court for the Southern District
of New York and any claim that any such action or proceeding brought in any
such court has been brought in an inconvenient forum.
Section 9.08 No Third Party Rights. The provisions of this
Agreement, including, without limitation, the provisions of Section 1.03,
are not intended to be for the benefit of any creditor or other Person
(other than the Members in their capacities as such) to whom any debts,
liabilities or obligations are owed by (or who otherwise have a claim
against or dealings with) the Company or any Member, and no such creditor
or other Person shall obtain any rights under any of such provisions
(whether as a third party beneficiary or otherwise) or shall obtain any
rights under any of such provisions (whether as a third party beneficiary
or otherwise) or shall by reason of any such provisions make any claim in
respect to any debt, liability or obligation (or otherwise) including any
debt, liability or obligation pursuant to Section 1.03, against the Company
or any Member.
Section 9.09 Notices. Each notice relating to this Agreement
shall be in writing and delivered in person or by registered or certified
mail. All notices to the Company shall be addressed to its principal office
and place of business. All notices addressed to a Member shall be addressed
to such Member at the address set forth in the Schedule. Any Member may
designate a new address by notice to that effect given to the Company.
Unless otherwise specifically provided in this Agreement, a notice shall be
deemed to have been effectively given when mailed by registered or
certified mail to the proper address or delivered in person.
Section 9.10 Counterparts. This Agreement may be executed in
counterparts with the same force and effect as if each of the signatories
had executed the same instrument.
Section 9.11 Grantors of Revocable Trusts. Each Non-Managing
Member that is a revocable trust agrees that, if the trustee of such
revocable trust and the grantor of such revocable trust are the same
person, the trustee's execution of this Agreement and any other documents
executed in connection with the Company shall bind such Person in his or
her capacity both as trustee and as grantor of such revocable trust.
Section 9.12 Each Interest in the Company is a Security. The
parties expressly agree that each interest in the Company, including
without limitation the Units and the interests of the Managing Member in
the Company, is a security governed by Article 8 of the Uniform Commercial
Code of the State of Delaware, and the Company, each Member and any other
party hereto expressly agrees that (i) this establishes the terms of the
interests in the Company, and (ii) interests in the Company shall not be
represented or evidenced by certificates.
Section 9.13 Goodwill. No value shall be placed on the name or
goodwill of the Company, which shall belong exclusively to the Managing
Member.
Section 9.14 Headings. The titles of the Articles and the
headings of the Sections of this Agreement are for convenience of reference
only, and are not to be considered in construing the terms and provisions
of this Agreement.
Section 9.15 Pronouns. All pronouns shall be deemed to refer to
the masculine, feminine, neuter, singular or plural, as the identity of the
Person or Persons may require in the context thereof.
Section 9.16 Confidentiality. The Managing Member and the Company
may, in their discretion, keep confidential and not disclose to the
Non-Managing Members any proprietary information concerning the Company,
including, without limitation, investments, valuations, information
regarding potential investments, financial information, trade secrets and
the like which is proprietary in nature and non-public, any information
regarding the Non-Managing Members of the Company (including, without
limitation, the identities of, or the amount of capital contributed by,
such Non-Managing Member) or any information about any investment, to the
extent that such information is required to be kept confidential or is
otherwise subject to disclosure restrictions imposed by the issuer of the
investment or the Managing Member, in its reasonable discretion
(collectively, "Confidential Information"). Each Non-Managing Member shall
not disclose or cause to be disclosed any Confidential Information to any
other Person, except as otherwise required by any regulatory authority, law
or regulation, or by legal process, without the prior written consent of
the Managing Member. Notwithstanding anything in the foregoing or anything
else contained in this Agreement to the contrary, except as reasonably
necessary to comply with applicable securities laws, each Member (and any
employee, representative or other agent thereof) may disclose to any and
all Persons, without limitation of any kind, the tax treatment and tax
structure of the offering and ownership of Units and any transaction
described in this Section 9.16 or elsewhere in this Agreement and all
materials of any kind (including opinions and other tax analyses) that are
provided to such Member relating to such tax treatment and tax structure.
For this purpose, "tax structure" means any facts relevant to the federal
income tax treatment of the offering and ownership of Units and any
transaction described in this Section 9.16 or elsewhere in this Agreement,
and does not include information relating to the identity of the Company or
its Affiliates.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands
as of the date first set forth above.
MANAGING MEMBER:
XXXXXXX XXXXX HEDGE FUND STRATEGIES LLC
By: /s/ Xxxxx X. Xxxx
----------------------------------
Name: Xxxxx X. Xxxx
Title: Director
NON-MANAGING MEMBERS:
By: XXXXXXX SACHS HEDGE FUND STRATEGIES LLC,
on behalf of each Member as attorney-in-fact
By: /s/ Xxxxx X. Xxxx
----------------------------------
Name: Xxxxx X. Xxxx
Title: Director
