Exhibit 1(e)
SHORT TERM BOND MASTER LLC
LIMITED LIABILITY COMPANY AGREEMENT
Dated: June 15, 2007
TABLE OF CONTENTS
Page
ARTICLE I NAME AND DEFINITIONS...................................... 1
Section 1.1. Name.................................................... 1
Section 1.2. Definitions............................................. 2
ARTICLE II DIRECTORS............................................... 5
Section 2.1. Number of Directors and Qualification................... 5
Section 2.2. Term and Election....................................... 5
Section 2.3. Resignation, Retirement and Removal..................... 5
Section 2.4. Vacancies............................................... 6
Section 2.5. Meetings................................................ 6
Section 2.6. Officers; Chairman...................................... 7
Section 2.7. By-Laws................................................. 7
ARTICLE III POWERS OF DIRECTORS..................................... 7
Section 3.1. General................................................. 7
Section 3.2. Activities and Investments.............................. 7
Section 3.3. Legal Title............................................. 9
Section 3.4. Sale of Interests; Reclassification..................... 9
Section 3.5. Borrowing Money; Pledging Company Assets;
Lending Property...................................... 9
Section 3.6. Delegation; Committees.................................. 10
Section 3.7. Collection and Payment.................................. 10
Section 3.8. Expenses................................................ 10
Section 3.9. Common Items............................................ 10
Section 3.10. Litigation.............................................. 11
Section 3.11. Tax Matters............................................. 11
Section 3.12. Miscellaneous Powers.................................... 11
Section 3.13. Manner of Acting........................................ 12
ARTICLE IV INVESTMENT ADVISORY, ADMINISTRATIVE SERVICES AND
PLACEMENT AGENT ARRANGEMENTS; CUSTODIAN...................12
Section 4.1. Investment Advisory and Other
Arrangements.......................................... 12
Section 4.2. Parties to Contract..................................... 12
Section 4.3. Custodian............................................... 13
ARTICLE V INTERESTS IN THE COMPANY................................ 13
Section 5.1. Interests............................................... 13
Section 5.2. Establishment and Designation of Series................. 14
Section 5.3. Rights of Holders....................................... 15
(i)
Section 5.4. Admission of Holders; Increase in
Interests............................................. 16
Section 5.5. Register of Interests................................... 16
Section 5.6. Non-Transferability..................................... 16
Section 5.7. Notices................................................. 16
Section 5.8. Limitation on Number of Holders......................... 16
Section 5.9. No Liability of Holders................................. 16
Section 5.10. Classes of Interests.................................... 17
ARTICLE VI DECREASES AND WITHDRAWALS............................... 17
Section 6.1. Decreases and Withdrawals............................... 17
ARTICLE VII DETERMINATION OF BOOK CAPITAL ACCOUNT BALANCES,
NET INCOME AND DISTRIBUTIONS.......................... 17
Section 7.1. Book Capital Account Balances........................... 17
Section 7.2. Allocations and Distributions to Holders................ 18
Section 7.3. Power to Modify Foregoing Procedures.................... 18
ARTICLE VIII LIABILITY FOR COMPANY OBLIGATIONS; FIDUCIARY
DUTIES................................................ 18
Section 8.1. Liabilities of Series................................... 18
Section 8.2. No Personal Liability of Directors, etc................. 19
Section 8.3. Indemnification......................................... 19
Section 8.4. No Protection Against Certain 1940
Act Liabilities....................................... 20
Section 8.5. No Bond Required of Directors........................... 21
Section 8.6. No Duty of Investigation; Notice in Company
Instruments, etc...................................... 21
Section 8.7. Insurance............................................... 21
Section 8.8. Reliance on Experts, etc................................ 21
Section 8.9. Accounting.............................................. 21
ARTICLE IX HOLDERS................................................. 22
Section 9.1. Meetings of Holders..................................... 22
Section 9.2. Notice of Meetings...................................... 22
Section 9.3. Record Date for Meetings................................ 22
Section 9.4. Proxies, etc............................................ 22
Section 9.5. Reports................................................. 23
Section 9.6. Inspection of Records................................... 23
Section 9.7. Holder Action by Written Consent........................ 23
ARTICLE X DURATION; DISSOLUTION OF COMPANY; AMENDMENT;
MERGERS; ETC.......................................... 23
Section 10.1. Duration................................................ 23
Section 10.2. Dissolution of Series or Company........................ 24
(ii)
Section 10.3. Actions Upon Dissolution................................ 24
Section 10.4. Amendment Procedure..................................... 25
Section 10.5. Merger, Consolidation, Conversion and
Sale of Assets........................................ 25
ARTICLE XI MISCELLANEOUS........................................... 26
Section 11.1. Registered Agent........................................ 26
Section 11.2. Governing Law........................................... 26
Section 11.3. Counterparts............................................ 27
Section 11.4. Reliance by Third Parties............................... 27
Section 11.5. Provisions in Conflict with Law or
Regulations........................................... 27
Section 11.6. Company Only............................................ 27
(iii)
LIMITED LIABILITY COMPANY AGREEMENT
OF
SHORT TERM BOND MASTER LLC
This Limited Liability Company Agreement ("Agreement") of Short Term Bond
Master LLC (the "Company"), is made as of June 15, 2007, by the Directors named
herein and the Holders (as hereinafter defined) of the Company on the date
hereof and those persons and entities hereinafter admitted as Holders.
W I T N E S S E T H:
WHEREAS, this Agreement is made and entered into for the purpose of
continuing the business of Short Term Bond Master Trust, a Delaware statutory
trust (the "Trust"), as a Delaware limited liability company in accordance with
the provisions hereinafter set forth;
WHEREAS, the Trust was converted into the Company pursuant to the Delaware
Statutory Trust Act (12 Del. C. ss.3801 et. seq.) and Section 18-214 of the Act
(as defined herein) (the "Conversion"), by causing to be filed a Certificate of
Conversion and a Certificate of Formation with the office of the Secretary of
State of the State of Delaware on June 15, 2007;
WHEREAS, the Directors desire to continue the Company as a limited
liability company under the Act and have adopted this Agreement; and
NOW, THEREFORE, it being the intention that this Agreement constitute the
limited liability company agreement of the Company, it is declared that the
Directors will oversee the management of all cash, securities and other assets
which the Company now possesses or may hereafter acquire from time to time in
any manner and oversee the disposal of the same upon the following terms and
conditions for the pro rata benefit of the holders of Interests in the Company.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1 Name. The name of the limited liability company formed hereby
is "Short Term Bond Master LLC" and, insofar as may be practicable, the Company
shall conduct its activities, execute all documents and xxx or be sued under
that name, which name (and the word "Company" wherever herein used) shall refer
to the Company as a separate legal entity, and shall not refer to the Directors,
officers, agents, employees or Holders. If the Directors determine that the
Company's use of such name is not advisable, the Directors may adopt such other
name for the Company as they deem proper and the Company may hold its property
and conduct its activities under such other name. Any name change shall become
effective upon the execution by a Director, as an "authorized person" of the
Company, of an instrument setting forth the new name and the filing of a
Certificate of Amendment under the Act. Any such instrument shall have the
status of an amendment to this Agreement.
Effective as of the time of the Conversion, (i) the Certificate of Trust
of the Trust, the Declaration of Trust, and the Bylaws of the Trust, in each
case as in effect immediately prior to the conversion are replaced and
superseded in their entirety by the Certificate of Formation of the Company,
this Agreement, and the Bylaws of the Company in respect of all periods
beginning on or after the Conversion, (ii) the "Short Term Bond Master
Portfolio" series of the Trust existing immediately prior to the Conversion
hereby continues as the "Short Term Bond Master Portfolio" Series of the Company
with the beneficial interest in such series of the Trust being automatically
converted into the Interests in such Series of the Company, (iii) each of the
Persons who was a holder of beneficial interests in the Company immediately
prior to the Conversion is hereby automatically admitted as a Holder of the
Company, and is hereby issued the Interests reflected on the books and records
of the Company, and (iv) in accordance with Section 18-214(g) of the Act, the
Company shall constitute a continuation of the existence of the Trust in the
form of a Delaware limited liability company and, for all purposes of the laws
of the State of Delaware, the Company shall be deemed to be the same entity as
the Trust. Xxxxx X. Xxxxxxxxxx, is hereby designated as an "authorized person"
within the meaning of the Act, and has executed, delivered and filed the
Certificate of Conversion and the Certificate of Formation with the Secretary of
State of the State of Delaware. Upon the filing of the Certificate of Formation
and the Certificate of Conversion with the Secretary of State of the State of
Delaware, such person's powers as an "authorized person" ceased, and each
Director, acting alone, thereupon became a designated "authorized person" to
execute, deliver and file any amendments and/or restatements of the Certificate
of Formation and any other certificates (and any amendments and/or restatements
thereof) permitted to be filed with the Secretary of State of the State of
Delaware
Section 1.2 Definitions. Wherever they are used herein, the following
terms have the respective meanings assigned to them below:
(a) "Administrator" shall mean any party furnishing services to the
Company and the Series pursuant to any administrative services contract
described in Section 4.1.
(b) "Act" means the Delaware Limited Liability Company Act, 6 Del.
C. ss.1801 et seq. as the same may be amended from time to time.
(c) "Agreement" means this limited liability company agreement of
the Company as amended from time to time. References in this Agreement to
"Agreement", "hereof", "herein" and "hereunder" shall be deemed to refer
to the Agreement rather than the article or section in which such words
appear.
(d) "Affiliated Person" has the meaning assigned to it in Section
2(a)(3) of the 1940 Act.
(e) "Assets belonging to" a Series shall have the meaning ascribed
in Section 5.2(a).
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(f) "Book Capital Account" shall mean, for any Holder at any time,
the Book Capital Account of the Holder at such time with respect to such
Holder's interest in the Company Property of any Series, determined in
accordance with generally accepted accounting principles and the
provisions of the 1940 Act, and each Holder shall have a separate Book
Capital Account for each Series in which it holds an Interest.
(g) "By-Laws" means the By-Laws referred to in Section 2.7 hereof,
as amended and in effect from time to time. The By-Laws are hereby
incorporated by reference into this Agreement.
(h) "Code" shall mean the Internal Revenue Code of 1986 and the
rules and regulations thereunder, each as amended from time to time.
(i) "Company Property" means as of any particular time any and all
property, real or personal, tangible or intangible, which at such time is
owned or held by or for the account of the Company.
(j) "Commission" means the Securities and Exchange Commission.
(k) "Custodian" means the party, other than the Company, or the
Series, to the agreement described in Section 4.3 hereof.
(l) "Directors" means the individuals who are named in Section
2.1(b) of this Agreement, so long as such Persons shall continue in office
in accordance with the provisions hereof, and all other Persons who may
from time to time be duly elected or appointed, qualified and serving as
Directors in accordance with the provisions hereof, and reference herein
to a Director or the Directors shall refer to such individual or Persons
in their capacity as "managers" within the meaning of the Act hereunder.
(m) "Fundamental Policies" means the investment policies and
restrictions applicable to any Series that are set forth and designated as
fundamental policies in the Registration Statement.
(n) "Holders" shall mean as of any particular time all holders of
record of Interests in the Company or any Series or class thereof at such
time, each in such capacity shall be a "member" of the Company within the
meaning of the Act.
(o) "Institutional Investor(s)" shall mean any registered investment
company (including a unit investment trust), insurance company separate
account, common or commingled trust fund, group trust or similar
organization or entity that is an "accredited investor" within the meaning
of Regulation D under the Securities Act of 1933, and shall not include
any individual, S corporation, partnership, or grantor trust beneficially
owned by any individual, S corporation or partnership.
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(p) "Interested Person" has the meaning ascribed to it in Section
2(a)(19) of the 0000 Xxx.
(q) "Interest(s)" shall mean the interest of a Holder of the Company
in any Series or class or the Company as a whole (as the context may
require), including all rights, powers and privileges accorded to Holders
in this Agreement, which interest may be expressed as a percentage,
determined by calculating, as the Directors shall from time to time
determine, the ratio of each Holder's Book Capital Account balance in any
such Series or class or the Company as a whole (as the context may
require) to the total of all Holders' Book Capital Account balances in any
such Series or class or of the Company as a whole (as the context may
require). Reference herein to a specific percentage in, or fraction of,
Interests of the Holders means Holders whose combined Book Capital
Accounts represent such specified percentage or fraction of the Book
Capital Accounts of all Holders of the Company of any Series or class or
of the Company as a whole (as the context may require).
(r) "Investment Adviser" means the party, other than the Company or
the Series, to any investment advisory contract described in Section 4.1
hereof.
(s) "Liabilities belonging to" a Series shall have the meaning
ascribed in Section 5.2(b).
(t) "1940 Act" means the provisions of the Investment Company Act of
1940 and the rules and regulations thereunder as amended from time to time
and any order or orders thereunder which may from time to time be
applicable to the Company.
(u) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities,
whether or not legal entities, and governments and agencies and political
subdivisions thereof.
(v) "Registration Statement" means any Registration Statement filed
by the Company under the 1940 Act, as it may be amended or supplemented
from time to time.
(w) "Series" refers to the Series of the Company established and
designated under or in accordance with the Act and the provisions of
Article V hereof, each of which shall be accounted for and maintained as a
separate series of the Company.
(x) The use herein of the masculine or feminine gender or the
neutral shall be construed to refer to the other gender or the neutral as
well, and the use herein of the singular shall be construed to include the
plural and the plural to include the singular, as the context may require.
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ARTICLE II
DIRECTORS
Section 2.1 Number of Directors and Qualification.
(a) The number of Directors shall initially be seven (7) and shall
thereafter be such number as shall be fixed from time to time by a written
instrument signed by a majority of the Directors then in office; provided,
however, that the number of Directors shall, subsequent to any sale of
Interests other than sales made solely for the purposes of meeting any
applicable seed money requirement under the 1940 Act, in no event be less
than three (3) or more than fifteen (15). Any vacancy created by an
increase in Directors may be filled by the appointment of any Person
having the qualifications described in this Article made by a written
instrument signed by a majority of the Directors then in office. Any such
appointment shall not become effective, however, until the Person named in
the written instrument of appointment shall have accepted in writing such
appointment and agreed in writing to be bound by the terms of this
Agreement. No reduction in the number of Directors shall have the effect
of removing any Director from office. Whenever a vacancy in the number of
Directors shall occur, until such vacancy is filled as provided in this
Section 2.1 and Section 2.4 hereof, the Directors in office, regardless of
their number, shall have all the powers granted to the Directors and shall
discharge all the duties imposed upon the Directors by this Agreement.
Each Director is hereby a "manager" within the meaning of the Act.
(b) The initial Directors are Xxxxxx X. Xxxx, Xx., Xxxxx X.
Xxxxxxxx, Xxxxxxx X. Xxxxx, Xxx Grills, Xxxxxxx X. London, Xxxxxxx Xxxxxx
Xxxx, and Xxxxxx X. Xxxxxxx, Xx..
Section 2.2 Term and Election. Each Director named herein, or elected or
appointed prior to the first meeting of the Holders, shall (except in the event
of resignations or removals or vacancies pursuant to Section 2.3 or Section 2.4
hereof) hold office until his successor has been elected at such meeting and has
qualified to serve as Director, as required under the 1940 Act. Each Director
shall hold office during the lifetime of this Company and until its dissolution
as hereinafter provided or until December 31 of the year in which he shall have
reached 72 years of age unless such Director resigns or is removed as provided
in Section 2.3 below.
Section 2.3 Resignation, Retirement and Removal. Any Director may resign
(without need for prior or subsequent accounting) by an instrument in writing
signed by him and delivered to the other Directors, and such resignation shall
be effective upon such delivery or at any later date according to the terms of
the instrument. Any of the Directors may be removed by the action of two-thirds
of the remaining Directors; provided, that if the removal of one or more
Directors would have the effect of reducing the number of remaining Directors
below the minimum number prescribed by Section 2.1 hereof, then subject to
Section 16(a) of the 1940
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Act, at the time of the removal of such Director or Directors, the remaining
Directors shall elect or appoint a number of additional Directors at least
sufficient to increase the number of Directors holding office to the minimum
number prescribed by Section 2.1 hereof. Upon the resignation, retirement or
removal of a Director, or his otherwise ceasing to be a Director due to death or
legal disability, he shall execute and deliver such documents as the remaining
Directors shall require for the purpose of conveying to the Company or the
remaining Directors any Company Property held in his name. Upon the death or
legal disability of any Director, his legal representative shall execute and
deliver on his behalf such documents as the remaining Directors shall require as
provided in the preceding sentence.
Section 2.4 Vacancies. The term of office of a Director shall terminate
and a vacancy shall occur in the event of such Director's death, resignation,
retirement, removal, bankruptcy, adjudicated incompetence or other legal
disability to perform the duties of the office of Director. No such vacancy
shall operate to annul this Agreement or to revoke any existing obligations
created pursuant to the terms of this Agreement. In the case of a vacancy, the
Holders of at least a majority of the Interests present, in person or by proxy,
and voting, acting at any meeting of the Holders held in accordance with Section
9.1 hereof, or, to the extent permitted by the 1940 Act, a majority vote of the
Directors continuing in office acting by written instrument or instruments, may
fill such vacancy, and any Director so elected by the Directors or the Holders
shall hold office as provided in this Agreement.
Section 2.5 Meetings. Regular meetings of the Directors may be held on
such notice at such place or places and times as may be fixed by the By-Laws or
by resolution of the Directors. Special Meetings of the Directors shall be held
upon the call of the Chairman, if any, the President, the Secretary, or any two
Directors, by oral (by telephone or in person) or electronic or written notice
duly served on or sent, mailed or sent and received by telecopy or e-mail or
similar means to each Director not less than one day before the meeting. No
notice need be given to any Director who attends in person or to any Director
who, in writing signed and filed with the records of the meeting either before
or after the holding thereof, waives notice. Notice or waiver of notice need not
state the purpose or purposes of the meeting. The Directors may act with or
without a meeting, subject to the requirements of the 1940 Act. A quorum for all
meetings of the Directors shall be a majority of the Directors. Unless provided
otherwise in this Agreement, any action of the Directors may be taken at a
meeting by vote of a majority of the Directors present (a quorum being present)
or without a meeting by written consent of a majority of the Directors.
Any committee of the Directors, including an executive committee, if any,
may act with or without a meeting. A quorum for all meetings of any such
committee shall be a majority of the members thereof. Unless provided otherwise
in this Agreement, any action of any such committee may be taken at a meeting by
vote of a majority of the members present (a quorum being present) or without a
meeting by written consent of a majority of the members.
With respect to actions of the Directors and any committee of the
Directors, Directors who are Interested Persons of the Company within the
meaning of Section 1.2 hereof or otherwise interested in any action to be taken
may be counted for quorum purposes under this Section 2.5 and shall be entitled
to vote to the extent permitted by the 1940 Act.
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All or any one or more Directors may participate in a meeting of the
Directors or any committee thereof by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other and participation in a meeting pursuant to such
communications system shall constitute presence in person at such meeting.
Section 2.6 Officers; Chairman. The Directors shall, from time to time,
elect a President, a Secretary and a Treasurer. The Directors may elect or
appoint, from time to time, a Chairman who shall preside at all meetings of the
Directors and carry out such other duties as the Directors shall designate. The
Directors may elect or appoint or authorize the President to appoint such other
officers or agents with such powers as the Directors may deem to be advisable.
The President, the Secretary and the Treasurer may, but need not, be Directors.
Section 2.7 By-Laws. The Directors may adopt By-Laws not inconsistent with
this Agreement for the conduct of activities of the Company and may amend or
repeal such By-Laws to the extent such power is not reserved to the Holders by
express provision of such By-Laws. This Agreement and the By-Laws shall together
constitute the "limited liability company agreement" of the Company within the
meaning of the Act.
ARTICLE III
POWERS OF DIRECTORS
Section 3.1 General. The Directors shall have exclusive and absolute
authority and control over the Company Property and over the activities of the
Company and each Series to the fullest extent permitted by the Act and other
applicable law, but with such powers of delegation as may be permitted by this
Agreement. The Directors shall have power to conduct the activities of the
Company and any Series and to carry on their operations and maintain offices
both within and without the State of Delaware, in any and all states of the
United States of America, and in the District of Columbia, in any foreign
country, and in any and all commonwealths, territories, dependencies, colonies,
possessions, agencies or instrumentalities of the United States of America and
of foreign governments, and to do all such other things and execute all such
instruments as they deem necessary, proper or desirable in order to promote the
interests of the Company and each Series although such things are not herein
specifically mentioned. Any determination as to what is in the interests of the
Company or any Series made by the Directors in good faith shall be conclusive.
In construing the provisions of this Agreement, the presumption shall be in
favor of a grant of power to the Directors. The Directors will not be required
to obtain any court order to deal with Company Property.
The enumeration of any specific power herein shall not be construed as
limiting the aforesaid powers. Such powers of the Directors may be exercised
without order of or resort to any court.
Section 3.2 Activities and Investments. Without limiting the provisions of
Section 3.1, the Directors shall have the power with respect to the Company and
each Series:
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(a) to conduct, operate and carry on the activities of an investment
company, and, in connection therewith:
(i) to subscribe for, purchase or otherwise acquire and invest
and reinvest in, to hold for investment or otherwise, to sell,
transfer, assign, negotiate, exchange, lend or otherwise dispose of,
and to turn to account or realize upon and generally deal in and
with, domestic or foreign securities (which term, "securities,"
shall include without limitation any and all bills, notes, bonds,
debentures or other obligations or evidences of indebtedness,
certificates of deposit, bankers acceptances, commercial paper,
repurchase agreements or other money market instruments; stocks,
shares or other equity ownership interests (including non-publicly
traded or illiquid securities and those securities the disposition
of which is restricted under the Federal securities laws);
convertible securities; mortgage-backed or other asset-backed
securities; and warrants, options or other instruments representing
rights to subscribe for, purchase, receive or otherwise acquire or
to sell, transfer, assign or otherwise dispose of, and scrip,
certificates, receipts or other instruments evidencing any ownership
rights or interests in, any of the foregoing; and "forward
commitment", "when issued" and "delayed delivery" contracts for
securities, issued, guaranteed or sponsored by any governments,
political subdivisions or governmental authorities, agencies or
instrumentalities, by any individuals, firms, companies,
corporations, syndicates, associations or trusts, or by any other
organizations or entities whatsoever, irrespective of their forms or
the names by which they may be described, whether or not they be
organized and operated for profit, and whether they be domestic or
foreign with respect to the State of Delaware or the United States
of America); and
(ii) to acquire and become the owner of or interested in any
securities by delivering or issuing in exchange or payment therefor,
in any lawful manner, any of the Company Property; and
(iii) to exercise while the owner of any securities or
interests therein any and all of the rights, powers and privileges
of ownership of such securities or interests, including without
limitation any and all voting rights and rights of assent, consent
or dissent pertaining thereto, and to do any and all acts and things
for the preservation, protection, improvement and enhancement in
value thereof; and
(iv) to purchase, sell and hold currencies and enter into
contracts for the future purchase or sale of currencies, including
but not limited to forward foreign currency exchange contracts; and
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(v) to enter into futures and forward contracts, and to
purchase and write put and call options on futures contracts,
securities, currencies and securities indexes; and
(vi) to make loans to the extent provided in the Registration
Statement from time to time; and
(vii) to engage in such other activities as may be disclosed
in the Registration Statement from time to time; and
(b) to conduct, operate and carry on any other lawful activities
which the Directors, in their sole and absolute discretion, consider to be
(i) incidental to the activities of the Company and each Series as an
investment company, (ii) conducive to or expedient for the benefit or
protection of the Company or any Series or the Holders, or (iii)
calculated in any other manner to promote the interests of the Company or
any Series or the Holders.
The Directors shall not be limited to investing in securities
maturing before the possible dissolution of the Company or any
Series, nor shall the Directors be limited by any law limiting
the investments that may be made by fiduciaries.
Notwithstanding anything to the contrary herein contained but
consistent with the applicable investment objectives, the
Company and each Series shall be managed in compliance with
the requirements of the Code applicable to regulated
investment companies as though such requirements were applied
at the Series level.
Section 3.3 Legal Title. Legal title to all the Company Property shall be
vested in the Company as a separate legal entity, except that the Directors
shall have power to cause legal title to any Company Property to be held by or
in the name of any Series of the Company or in the name of one or more of the
Directors on behalf of the Company, or in the name of any other Person as
nominee on behalf of the Company, on such terms as the Directors may determine;
provided, that the interest of the Company or any Series therein is
appropriately protected.
Section 3.4 Sale of Interests; Reclassification. Subject to more detailed
provisions set forth in Article V and the Directors' duty of impartiality to the
Holders, the Directors shall have the power to permit Persons to purchase
Interests and to add to or reduce, in whole or in part, their Interests in any
Series or class, provided that from and after the commencement of the private
placement of Interests, Interests shall be sold only to Institutional Investors,
and the original Holders shall withdraw their entire Interests from the Series
or class. The Directors shall also have the power to acquire, hold, resell,
dispose of, transfer, classify, reclassify and otherwise deal in Interests of
the Company or any Series or class. The Directors may hold as treasury Interests
(without such Interests being deemed to be canceled), re-issue for such
consideration and on such terms as they determine, or cancel, in their
discretion from time to time, any Interests in any Series or class thereof
reacquired by the Company.
Section 3.5 Borrowing Money; Pledging Company Assets; Lending Property.
Subject to any applicable Fundamental Policies of the Company or any Series or
any applicable
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provision of the By-Laws, the Directors shall have power, on behalf of the
Company or any Series, to borrow money or otherwise obtain credit and to secure
the same by mortgaging, pledging or otherwise subjecting as security any of the
Company Property, to endorse, guarantee, or undertake the performance of any
obligation, contract or engagement of any other Person and to lend Company
Property; provided that Company Property belonging to a Series shall not be
pledged, encumbered or subject to liabilities belonging to any other Series.
Section 3.6 Delegation; Committees. The Directors shall have power,
consistent with their continuing exclusive authority over the management of the
Company, each Series and the Company Property, to delegate from time to time to
such committee or committees as they may from time to time appoint from among
their own number or to such officers, employees or agents of the Company as they
may from time to time designate the doing of such things and the execution of
such instruments either in the name of the Company or any Series or the names of
the Directors or otherwise as the Directors may deem expedient.
Section 3.7 Collection and Payment. The Directors shall have power to
collect all property due to the Company or any Series; to pay all claims,
including taxes, against the Company Property; to prosecute, defend, compromise
or abandon any claims relating to the Company Property; to foreclose any
security interest securing any obligations by virtue of which any property is
owed to the Company or any Series; and to enter into releases, agreements and
other instruments.
Section 3.8 Expenses. The Directors shall have the power to incur and pay,
out of the income or the principal of the Company Property of the Series, any
expenses which, in the opinion of the Directors, are necessary or incidental to
carrying out any of the purposes of this Agreement, and to pay reasonable
compensation from the funds of the Company to themselves as Directors; provided
that no Series will be liable for the debts and obligations of any other Series
or, subject to Section 3.9, of the Company generally, and expenses, fees,
charges, taxes and liabilities incurred or arising in connection with a
particular Series, or in connection with the management thereof, shall be paid
out of the Company Property belonging to that Series and not out of the Company
Property belonging to any other Series. The Directors shall not be obligated to
account to the Holders for the retention of compensation, and each Holder agrees
that compliance with the accounting requirements of the 1940 Act and of this
Agreement shall constitute satisfactory accounting with respect to all acts of
the Directors. The Directors shall fix the compensation of all officers,
employees and Directors of the Company and may pay such compensation out of the
Company Property without reduction of the Directors' compensation.
Section 3.9 Common Items. All expenses and other items of the Company that
are common to more than one Series shall be borne by or allocated to each such
Series proportionately based upon the relative net asset values of each Holder.
Such common items shall include, but not be limited to, Directors' fees; 1940
Act registration expenses; organizational expenses of the Company, exclusive of
organizational expenses attributable to any specific Series; and accounting
expenses relating to the Company that are not attributable to any specific
Series.
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Section 3.10 Litigation. The Directors shall have the power to engage in
and to prosecute, defend, compromise, abandon, or adjust, by arbitration or
otherwise, any actions, suits, proceedings, disputes, claims, and demands
relating to the Company or any Series or the Company Property, and, out of the
Company Property, to pay or to satisfy any debts, claims or expenses incurred in
connection therewith, including those of litigation, and such power shall
include without limitation the power of the Directors or any appropriate
committee thereof, in the exercise of their or its good faith business judgment,
consenting to dismiss any action, suit, proceeding, dispute, claim or demand,
brought by any Person, including, to the extent permitted by applicable law, a
Holder in such Holder's own name or in the name of the Company or any Series,
whether or not the Company, any Series, or any of the Directors may be named
individually therein or the subject matter arises by reason of business for or
on behalf of the Company, or any Series.
Section 3.11 Tax Matters. The Directors shall have the exclusive power,
authority and responsibility with respect to the Company and each Series
regarding (i) preparation and filing of tax returns; (ii) providing reports to
the Holders regarding tax information necessary to the filing of their
respective tax returns; (iii) making any and all available elections with
respect to the tax treatment of the Series and their investments; (iv)
representing the Series before the Internal Revenue Service and/or any state
taxing authority and exercising the powers and authorities of a tax matters
partner under the Code with respect to the Series' partnership tax returns; (v)
exercising such responsibility as may be imposed by law with respect to
withholding from a Holder's share of income or distributions; (vi) providing to
the accountants of the Series such instructions regarding allocations of
realized income, gains and losses as may be necessary or appropriate to assure
compliance with applicable provisions of the Code and Treasury Regulations; and
(vii) any and all other tax matters. Each Series shall be treated as a separate
entity for federal and state income tax purposes. Any Series with only one
Holder shall be treated as a disregarded entity pursuant to section 301.7701 - 3
of the Treasury Regulations. Any Series with more than one Holder shall be
treated as a Partnership for federal income tax purposes pursuant to section
301.7701 - 3 of the Treasury Regulations. The Directors shall not elect to treat
any Series as a corporation for federal income tax purposes without the consent
of the Holders of such Series.
Section 3.12 Miscellaneous Powers. The Directors shall have the power to:
(a) employ or contract with such Persons as the Directors may deem desirable for
the transaction of the activities of the Company or any Series and eliminate
such employees or contractual relationships as they consider appropriate; (b)
enter into joint ventures, partnerships and any other combinations or
associations; (c) remove Directors or fill vacancies in or add to their number,
subject to and in accordance with Section 2.3 and Section 2.4 hereof; elect and
remove at will such officers and appoint and terminate such agents or employees
as they consider appropriate; and appoint from their own number and terminate at
will any one or more committees that may exercise some or all of the power and
authority of the Directors as the Directors may determine; (d) purchase, and pay
for out of Company Property, insurance policies insuring the Company Property,
and, to the extent permitted by law and not inconsistent with any applicable
provision of this Agreement or the By-Laws, insuring the Investment Adviser,
Administrator, placement agent, Holders, Directors, officers, employees, agents
or independent contractors of the Company or any Series against all claims
arising by reason of holding any
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such position or by reason of any action taken or omitted to be taken by any
such Person in such capacity, whether or not constituting negligence, or whether
or not the Company or any Series would have the power to indemnify such Person
against such liability; (e) indemnify any person with whom the Company or any
Series has dealings, including the Holders, Directors, officers, employees,
agents, Investment Adviser, Administrator, placement agent and independent
contractors of the Company or any Series, to such extent permitted by law and
not inconsistent with the applicable provisions of this Agreement; (f) subject
to applicable Fundamental Policies, guarantee indebtedness or contractual
obligations of others; (g) determine and change the fiscal year of the Company
or any Series and the method by which its accounts shall be kept; and (h) adopt
a seal for the Company or any Series, but the absence of such seal shall not
impair the validity of any instrument executed on behalf of the Company or any
Series.
Section 3.13 Manner of Acting. Except as otherwise provided herein, in the
By-Laws, in the 1940 Act or in any other applicable provision of law, any action
to be taken by the Directors may be taken in the manner set forth in Section 2.5
hereof.
ARTICLE IV
INVESTMENT ADVISORY, ADMINISTRATIVE SERVICES
AND PLACEMENT AGENT ARRANGEMENTS; CUSTODIAN
Section 4.1 Investment Advisory and Other Arrangements. The Directors may
in their discretion, from time to time, cause the Series to separately enter
into investment advisory and administrative services contracts or placement
agent agreements whereby the other party to such contract or agreement shall
undertake to furnish to the Series specified therein such investment advisory,
administrative, placement agent and/or other services as the Directors shall,
from time to time, consider desirable with respect to such Series and upon such
terms and conditions as the Directors may in their discretion determine.
Notwithstanding any other provisions of this Agreement, the Directors may
authorize any Investment Adviser (subject to such general or specific
instructions as the Directors may, from time to time, adopt) to effect
purchases, sales, loans or exchanges of Company Property on behalf of any Series
or may authorize any officer, employee or Director to effect such purchases,
sales, loans or exchanges pursuant to recommendations of any such Investment
Adviser (and all without further action by the Directors). Any such purchase,
sales, loans and exchanges shall be deemed to have been authorized by all of the
Directors.
Section 4.2 Parties to Contract. Any contract of the character described
in Section 4.1 of this Article IV or in the By-Laws of the Company may be
entered into with any corporation, firm, trust or association, although one or
more of the Directors or officers of the Company may be an officer, director,
Director, shareholder, or member of such other party to the contract; and no
such contract shall be invalidated or rendered voidable by reason of the
existence of any such relationship, nor shall any person holding such
relationship be liable merely by reason of such relationship for any loss or
expense to the Company or any Series under or by reason of said contract or
accountable for any profit realized directly or indirectly therefrom; provided
that the contract when entered into was reasonable and fair and not inconsistent
with the provisions of this Article IV or the By-Laws. The same Person
(including a
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firm, corporation, trust, or association) may be the other party to contracts
entered into pursuant to Section 4.1 above or the By-Laws of the Company, and
any individual may be financially interested or otherwise affiliated with
Persons who are parties to any or all of the contracts mentioned in this Section
4.2.
Section 4.3 Custodian. The Directors may appoint one or more banks or
trust companies as custodian of the securities and cash belonging to the Series.
The agreement providing for such appointment shall contain such terms and
conditions as the Directors in their discretion determine to be not inconsistent
with this Agreement, the applicable provisions of the 1940 Act and any
applicable provisions of the By-Laws of the Company. One or more subcustodians
may be appointed in a manner not inconsistent with this Agreement, the
applicable provisions of the 1940 Act and any applicable provisions of the
By-Laws of the Company.
ARTICLE V
INTERESTS IN THE COMPANY
Section 5.1 Interests. Subject to the limitations contained in Section 5.8
relating to the number of permitted Holders, the limited liability company
interests in the Company shall consist of an unlimited number of
non-transferable (except to the extent otherwise provided in Section 5.6)
Interests without par value that shall be denominated in dollars corresponding
to the value of such Interests determined by reference to the corresponding Book
Capital Accounts. All Interests shall be validly issued, fully paid and
nonassessable when issued for such consideration as the Directors shall
determine. The Directors may permit the purchase of Interests (for cash or other
consideration acceptable to the Directors, subject to the requirements of the
0000 Xxx) but only if the purchaser is an Institutional Investor. Subject to
applicable law, the provisions hereof and such restrictions as may be adopted by
the Directors, any Holder may increase its Interest by contributions or decrease
its Interest by withdrawals without limitation. Any Person to whom Interests are
issued after the date hereof shall be deemed admitted to the Company as a Holder
upon its acquisition of an Interest and its reflection on the register of
Holders.
Pursuant to Section 18-215 of the Act, the Directors shall have authority,
from time to time, to establish Interests of a Series, each of which shall be
separate and distinct from the Interests in any other Series. The Series shall
include, without limitation, those Series specifically established and
designated in Section 5.2 hereof, and such other Series as the Trustees may deem
necessary or desirable. The Directors shall have exclusive power without the
requirement of Holder approval, from time to time, to establish and designate
such separate and distinct Series, and, subject to the provisions of this
Agreement and the 1940 Act, to fix and determine the rights of Holders of
Interests in such Series, including with respect to the price, terms and manner
of purchase and redemption, dividends and other distributions, rights on
liquidation, sinking or purchase fund provisions, conversion rights and
conditions under which the Holders of the several Series shall have separate
voting rights or no voting rights.
The Company is a limited liability company organized in series pursuant
Section 18-215 of the Act, and each Series shall be a separate series of the
Company within the meaning
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of Section 18-215 of the Act. As such, separate and distinct records shall be
maintained for each Series and the assets of the Company associated with each
Series shall be held and accounted for separately from the other assets of the
Company or any other Series. The debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to each Series shall
be enforceable against the assets of such Series only, and not against the
assets of the Company generally or the assets of any other Series nor shall the
assets of any Series be charged with the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to another
Series or, except as otherwise provided herein, the Company generally.
Section 5.2 Establishment and Designation of Series. The establishment and
designation of any Series of Interests shall be effective upon the adoption by a
majority of the then Directors of a resolution that sets forth such
establishment and designation and the relative rights and preferences of such
Series, whether directly in such resolution or by reference to, or approval of,
another document that sets forth such relative rights and preferences of such
Series including, without limitation, any Registration Statement, or as
otherwise provided in such resolution. At any time the Directors may by
resolution adopted by a majority of their number, and evidenced by an instrument
executed by the Secretary or an Assistant Secretary of the Company, abolish that
Series and the establishment and designation thereof and redeem the Interests
therein. Each instrument referred to in this paragraph shall have the status of
an amendment to this Agreement.
Without limiting the authority of the Directors set forth above to
establish and designate further Series, as of the date hereof, there is one
Series of Interests, designated as "Short Term Bond Master Portfolio". The
Interests of this Series and any Interests of any further Series that may from
time to time be established and designated by the Directors shall (unless the
Directors otherwise determine with respect to some further Series at the time of
establishing and designating the same) have the following relative rights and
preferences:
(a) Assets Belonging to Series. All consideration received by the
Company for the issue or sale of Interests of a particular Series,
together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof, including
any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall be held by the Company in
a separate account solely for the benefit of the Holders of Interests of
that Series and shall irrevocably belong to that Series for all purposes,
and shall be so recorded upon the books of account of the Company. Such
consideration, assets, income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived from any reinvestment of
such proceeds, in whatever form the same may be, are herein referred to as
"assets belonging to" that Series. No Series shall have any right to or
interest in the assets belonging to any other Series, and no Holder shall
have any right or interest with respect to the assets belonging to any
Series in which it does not hold an Interest. In the event
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that there are any assets, income, earnings, profits and proceeds thereof,
funds or payments which are not readily identifiable as assets held with
respect to any particular Series (collectively "General Assets"), the
Directors shall allocate such General Assets to, between or among any one
or more of the Series in such manner and on such basis as the Directors,
in their sole discretion, deem fair and equitable, and any General Assets
so allocated to a particular Series shall be held with respect to that
Series. Each such allocation by the Directors shall be conclusive and
binding upon the Holders of all Series for all purposes.
(b) Liabilities Belonging to Series. The assets belonging to each
particular Series shall be charged with the liabilities in respect of that
Series only and all expenses, losses, costs, charges and reserves
attributable to that Series only. The liabilities, expenses, losses,
costs, charges and reserves so charged to a Series are herein referred to
as "liabilities belonging to" that Series. Subject to Section 8.1 hereof,
no Series shall be liable for or charged with the liabilities belonging to
any other Series. Subject to the right of the Directors in their
discretion to allocate general liabilities, expenses, costs, charges or
services as herein provided, all liabilities held with respect to a
particular Series shall be enforceable against the assets held with
respect to such Series only and not against the assets of the Company
generally or against the assets held with respect to any other Series.
(c) Voting. On each matter submitted to a vote of the Holders, each
Holder of an Interest in each Series shall be entitled to a vote
proportionate to its Interest in such Series or in the Company as a whole
(as the context may require) as recorded on the books of the Company and
all Holders of Interests in each Series shall vote as a separate class
except as to voting for Directors and as otherwise required by the 1940
Act, in which case all Holders shall vote together as a single class. As
to any matter that does not affect the interest of a particular Series or
class, only the Holders of Interests of the one or more affected Series or
class shall be entitled to vote.
Section 5.3 Rights of Holders. The ownership of the Company Property of
every description and the right to conduct any activities hereinbefore described
shall be vested exclusively in the Company, and the Holders shall have no
interest therein. Holders shall have no right to call for any partition or
division of any property, profits, rights or interests of the Company or any
Series. No Holder shall have any interest in or rights with respect to any
Series in which it does not hold an Interest. The Interests shall be personal
property giving only the rights specifically set forth in this Agreement and the
Act. The Holders shall have no right to demand payment for their Interests or
any other rights of dissenting shareholders in the event the Company
participates in any transaction that would give rise to appraisal or dissenter's
rights by a shareholder of a corporation organized under the General Corporation
Law of the State of Delaware or otherwise. Holders shall have no preemptive or
other rights to subscribe for additional Interests or other securities issued by
the Company. All Persons, by virtue of acquiring an Interest in the Company and
being registered as a Holder in accordance with
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Section 5.5 hereof, shall be deemed to have assented to, and shall be bound by,
this Agreement to the same extent as if such Person was a party hereto.
Section 5.4 Admission of Holders; Increase in Interests. The Directors, in
their discretion, may, from time to time, without a vote of the Holders, permit
the purchase of additional Interests of any Series by such Person or Persons
(including existing Holders) and admission of such Person or Persons as a Holder
hereunder, subject to the provisions of Section 5.1 hereof, and for such type of
consideration, including cash or property, at such time or times (including,
without limitation, each business day), and on such terms as the Directors may
deem best, and may in such manner acquire other assets (including the
acquisition of assets subject to, and in connection with the assumption of,
liabilities) and businesses.
Section 5.5 Register of Interests. A register shall be kept by the Company
that shall contain the names and addresses of the Holders and the Book Capital
Account balances of each Holder in each Series. Each such register shall be
conclusive as to who the Holders are and who shall be entitled to payments of
distributions or otherwise to exercise or enjoy the rights of Holders. No Holder
shall be entitled to receive payment of any distribution, nor to have notice
given to it as herein provided, until it has given its address to such officer
or agent of the Company as shall keep the said register for entry thereon.
Section 5.6 Non-Transferability. To the fullest extent permitted by law,
Interests shall not be transferable and no transferee shall be recognized as a
Holder except with the prior written consent of all of the Directors and all
remaining Holders of Interests.
Section 5.7 Notices. Any and all notices to which any Holder hereunder may
be entitled and any and all communications shall be deemed duly served or given
if mailed, postage prepaid, addressed to any Holder of record at its last known
address as recorded on the register of the Company or transmitted to the Holders
by any other method permitted by law.
Section 5.8 Limitation on Number of Holders. Notwithstanding any provision
hereof to the contrary, the number of Holders of Interests shall be limited to
fewer than 100. Solely for purposes of determining the number of Holders of
Interests under this Section 5.8, each beneficial owner of a grantor trust that
is itself a Holder shall be treated as a Holder of such Interest.
Section 5.9 No Liability of Holders. All Interests, when issued in
accordance with this Agreement, shall be fully paid and nonassessable. Holders
shall be entitled to the full protection against personal liability for the
obligations of the Company under Section 18-303 of the Act. The Company shall
indemnify and hold each Holder harmless from and against any claim or liability
to which such Holder may become subject solely by reason of his or her being or
having been a Holder and not because of such Holder's acts or omissions or for
some other reason, and shall reimburse such Holder for all legal and other
expenses reasonably incurred by him or her in connection with any such claim or
liability (upon proper and timely request by the Holder); provided, however that
no Holder shall be entitled to indemnification by any Series unless such Holder
is a Holder of Interests of such Series.
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Section 5.10 Classes of Interests. The Directors may, without approval of
the Holders of any Interests, establish and designate classes of Interests of
any Series or divide Interests of any previously established Series into two or
more classes, Interests of each class having such preferences and special or
relative rights and privileges (including conversion rights, if any) as the
Directors may determine in their sole discretion. The fact that a Series shall
have initially been established without classes (i.e., that all Interests of
such Series are initially of a single class), or that a Series shall have more
than one established class, shall not limit the authority of the Directors to
establish separate classes, or one or more further classes, of such Series
without approval of the Holders of the initial class thereof, or previously
established class or classes thereof.
The establishment and designation of any class of Interests shall be
effective upon the adoption by a majority of the then Directors of a resolution
that sets forth such establishment and designation and the relative rights and
preferences of such class, whether directly in such resolution or by reference
to, or approval of, another document that sets forth such relative rights and
preferences of such class including, without limitation, any Registration
Statement, or as otherwise provided in such resolution. The Directors may amend
the By-laws providing for class votes and meetings and related matters.
Notwithstanding anything set forth in Section 5.10, classes of Interests within
a Series shall not be required to vote or receive distributions on a pro rata
basis unless required by applicable law or the terms of the instrument
establishing such class.
ARTICLE VI
DECREASES AND WITHDRAWALS
Section 6.1 Decreases and Withdrawals. A Holder shall have the right on
any day the New York Stock Exchange is open to decrease its Interest in any
Series and to withdraw completely from any Series, at the next determined net
asset value attributable to the Interest (or portion thereof) being withdrawn,
and an appropriate adjustment therefor shall be made to such Holder's Book
Capital Account. The rights of a Holder upon withdrawal from a Series shall be
limited to the assets belonging to the Series from which the withdrawal is made.
The Company may, subject to compliance with the 1940 Act, charge fees for
effecting such decrease or withdrawal, at such rates as the Directors may
establish, and may at any time and from time to time, suspend such right of
decrease or withdrawal. The procedures for effecting decreases or withdrawals
shall be as determined by the Directors from time to time, subject to the
requirements of the 1940 Act.
ARTICLE VII
DETERMINATION OF BOOK CAPITAL ACCOUNT BALANCES,
NET INCOME AND DISTRIBUTIONS
Section 7.1 Book Capital Account Balances. The Book Capital Account
balances of Holders of the Company with respect to each Series shall be
determined on such days and at such time or times as the Directors may
determine, consistent with the requirements
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of the 1940 Act, with income, gains and losses of each Series or class thereof
determined in accordance with generally accepted accounting principles to be
allocated among the Holders of such Series or class thereof in accordance with
their Interests. The power and duty to make calculations of the Book Capital
Account balances of the Holders may be delegated by the Directors to the
Investment Adviser, Administrator, Custodian, or such other person as the
Directors may determine.
Section 7.2 Allocations and Distributions to Holders. In compliance with
the Treasury Regulations promulgated under applicable provisions of the Code,
the Directors shall (i) allocate items of taxable income, gain, loss and
deduction with respect to each Series to Holders of the Interests in such
Series; provided that, except as may otherwise be specifically provided in the
Treasury Regulations, in all cases allocations of specific types of income shall
be proportionate to the Interests of the Holders in that Series or class
thereof, and (ii) upon liquidation of a Series, make final distribution of the
net assets of such Series among the Holders of Interests in such Series in
accordance with their respective Book Capital Accounts. The Directors shall
provide each Holder that is a regulated investment company, as defined in
Section 851(a) of the Code, information that will enable it to take into account
its share of items of taxable income, gain, loss and deduction as they are taken
into account by the Series in order to facilitate compliance with Code Section
4982. Any income tax withholding or other withholding of taxes required by law
with respect to the allocable share of income of, or distributions to, a Holder
shall be accounted for as a distribution to and charged to the Book Capital
Account of such Holder at the time of payment of such taxes to the applicable
taxing authority. The Directors may always retain from the assets belonging to a
Series such amount as they may deem necessary to pay the liabilities belonging
to that Series. The Directors shall maintain such records and tax based capital
accounts as are necessary to comply with the Treasury Regulations.
Section 7.3 Power to Modify Foregoing Procedures. Notwithstanding any of
the foregoing provisions of this Article VII, the Directors may prescribe, in
their absolute discretion, such other bases and times for determining the net
income and net assets of the Company and of each Series as they may deem
necessary or desirable to enable the Company to comply with any provision of the
1940 Act, any rule or regulation thereunder, or any order of exemption issued by
said Commission, all as in effect now or hereafter amended or modified.
ARTICLE VIII
LIABILITY FOR COMPANY OBLIGATIONS; FIDUCIARY DUTIES
Section 8.1 Liabilities of Series. Without limitation of the provisions of
Section 5.2(b) hereof, but subject to the right of the Directors in their
discretion to allocate general liabilities, expenses, costs, charges or services
as herein provided, the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular Series shall
be enforceable against the assets of such Series only, and not against the
assets of any other Series or the Company generally. Notice of this limitation
on interseries liabilities shall be set forth in the certificate of formation of
the Company (whether originally or by amendment) as filed or to be filed in the
Office of the Secretary of State of the State of
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Delaware pursuant to Section 18-201 the Act, and upon the giving of such notice
in the certificate of formation, the statutory provisions of Section 18-215 of
the Act relating to limitations on interseries liabilities (and the statutory
effect under Section 18-215 of setting forth such notice in the certificate of
formation) shall become applicable to the Company and each Series. Every note,
bond, contract or other undertaking issued by or on behalf of a particular
Series shall include a recitation limiting the obligation represented thereby to
that Series and its assets; provided that the absence of such recitation shall
not affect the interseries limitation on liability set forth above or create any
liability on the part of any Director, officer or other agent of the Company.
Section 8.2 No Personal Liability of Directors, etc.
(a) Directors. The Directors shall be entitled to the protection
against personal liability for the obligations of the Company under
Section 18-303(a) of the Act. No Director shall be liable to the Company,
its Holders, or to any Director, officer, employee, or agent there of for
any action or failure to act (including, without limitation, the failure
to compel in any way any former or acting Director to redress any breach
of trust) except for his own bad faith, willful misfeasance, gross
negligence or reckless disregard of his duties.
(b) Officers, Employees or Agents of the Company. The officers,
employees and agents of the Company shall not be subject to any personal
liability whatsoever in his or her official or individual capacity to any
Person (other than as provided in the following sentence). No officer,
employee or agent of the Company shall be liable to the Company, its
Holders, or to any Director, officer, employee, or agent thereof for any
action or failure to act(including, without limitation, the failure to
compel in any way any former or acting Director to redress any breach of
trust) except for his own bad faith, willful misfeasance, gross negligence
or reckless disregard of his duties.
(c) The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of the Directors, officers, employees
or agents of the Company otherwise existing at law or in equity, are
agreed by the Holders to modify to that extent such other duties and
liabilities
Section 8.3 Indemnification. The Company shall indemnify each of its
Directors, officers, employees, and agents (including persons who serve at its
request as directors, managers, officers or trustees of another organization in
which it has any interest, as a shareholder, creditor or otherwise) against all
liabilities and expenses (including amounts paid in satisfaction of judgments,
in compromise, as fines and penalties, and as counsel fees) reasonably incurred
by him in connection with the investigation, defense or disposition of any
action, suit or other proceeding, whether civil or criminal ("Proceedings"), in
which he may be involved or with which he may be threatened, while in office or
thereafter, by reason of his being or having been such a Director, officer,
employee or agent, except with respect to any matter as to which he shall have
been adjudicated to have acted in bad faith, willful misfeasance, gross
negligence or reckless disregard of his duties, such liabilities and expenses
being liabilities belonging to the
-19-
Series out of which such claim for indemnification arises; provided, however,
that as to any matter disposed of by a compromise payment by such Person,
pursuant to a consent decree or otherwise, no indemnification either for said
payment or for any other expenses shall be provided unless there has been a
determination that such Person did not engage in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office by the court or other body approving the settlement or other
disposition or, in the absence of a judicial determination, by a reasonable
determination, based upon a review of readily available facts (as opposed to a
full trial-type inquiry), that he did not engage in such conduct, which
determination shall be made by a majority of a quorum of Directors who are
neither Interested Persons of the Company nor parties to the action, suit or
proceeding, or by written opinion from independent legal counsel approved by the
Directors. The rights accruing to any Person under these provisions shall not
exclude any other right to which he may be lawfully entitled; provided that no
Person may satisfy any right of indemnity or reimbursement granted herein or to
which he may be otherwise entitled except out of the Company Property. The
Directors may make advance payments in connection with indemnification under
this Section 8.3; provided that any advance payment of expenses by the Company
to any Director, officer, employee or agent shall be made only upon the
undertaking by such Director, officer, employee or agent to repay the advance
unless it is ultimately determined that he is entitled to indemnification as
above provided, and only if one of the following conditions is met:
(a) the Director, officer, employee or agent to be indemnified
provides a security for his undertaking; or
(b) the Company shall be insured against losses arising by reason of
any lawful advances; or
(c) there is a determination, based on a review of readily available
facts, that there is reason to believe that the Director, officer,
employee or agent to be indemnified ultimately will be entitled to
indemnification, which determination shall be made by:
(i) a majority of a quorum of Directors who are neither
Interested Persons of the Company nor parties to the Proceedings; or
(ii) an independent legal counsel in a written opinion.
Section 8.4 No Protection Against Certain 1940 Act Liabilities. Nothing
contained in Section 8.1, 8.2 or Section 8.3 hereof shall protect any Director
or officer of the Company from any liability to the Company or its Holders to
which he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office. Nothing contained in Section 8.1, 8.2 or 8.3 hereof or in any
agreement of the character described in Section 4.1 or Section 4.2 hereof shall
protect any Investment Adviser to the Company or any Series against any
liability to the Company or any Series to which he or it would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence in the
performance of his or its duties to the Company or Series, or by
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reason of his or its reckless disregard to his or its obligations and duties
under the agreement pursuant to which he or it serves as Investment Adviser to
the Company or any Series.
Section 8.5 No Bond Required of Directors. No Director shall be obligated
to give any bond or other security for the performance of any of his duties
hereunder.
Section 8.6 No Duty of Investigation; Notice in Company Instruments, etc.
No purchaser, lender, seller or other Person dealing with the Directors or with
any officer, employee or agent of the Company shall be bound to make any inquiry
concerning the validity of any transaction purporting to be made by the
Directors or by said officer, employee or agent or be liable for the application
of money or property paid, lent or delivered to or on the order of the Directors
or of said officer, employee or agent. Every contract, undertaking, instrument,
certificate, interest or obligation or other security of the Company, and every
other act or thing whatsoever executed in connection with the Company, shall be
conclusively presumed to have been executed or done by the executors thereof
only in their capacity as Directors under this Agreement or in their capacity as
officers, employees or agents of the Company. Every written obligation,
contract, instrument, certificate or other interest or undertaking of the
Company made or sold by the Directors or by any officer, employee or agent of
the Company, in his capacity as such, may contain an appropriate recital to the
effect that the Holders, Directors, officers, employees and agents of the
Company shall not personally be bound by or liable thereunder, nor shall resort
be had to their private property for the satisfaction of any obligation or claim
thereunder, and appropriate references shall be made therein to this Agreement,
and may contain any further recital that they may deem appropriate, but the
omission of such recital shall not operate to impose personal liability on any
of the Holders, Directors, officers, employees or agents of the Company.
Section 8.7 Insurance. The Directors may maintain insurance for the
protection of the Company Property, its Holders, Directors, officers, employees
and agents in such amount as the Directors shall deem adequate to cover possible
tort liability, and such other insurance as the Directors in their sole judgment
shall deem advisable.
Section 8.8 Reliance on Experts, etc. Each Director, officer or employee
of the Company shall, in the performance of his duties, be fully and completely
justified and protected with regard to any act or any failure to act resulting
from reliance in good faith upon the books of account or other records of the
Company, upon an opinion of counsel, or upon reports made to the Company by any
of its officers or employees or by any Investment Adviser, the Administrator,
accountant, appraiser or other expert or consultant selected with reasonable
care by the Directors, officers or employees of the Company, regardless of
whether such counsel or expert may also be a Director; provided that nothing in
this Section shall be deemed to exonerate the Directors from their duties of
reasonable care, diligence and prudence or any other duties imposed by the 1940
Act.
Section 8.9 Accounting. The Directors shall not be required to file any
inventory or accounting with any court or officer of any court, unless
specifically ordered to do so on the application of the Directors or on the
application of the Holders of Interests of the Company, or on the court's own
motion.
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ARTICLE IX
HOLDERS
Section 9.1 Meetings of Holders. Meetings of the Holders may be called at
any time by a majority of the Directors and shall be called by any Director upon
written request of Holders holding, in the aggregate, not less than 10% of the
Interests of a Series (if the meeting relates solely to that Series), or not
less than 10% of the Interests of the Several Series affected (if the meeting
relates to more than one Series but fewer than all) or not less than 10% of the
Interests of the Company (if the meeting relates to the Company and not solely
to one or more particular Series), such request specifying the purpose or
purposes for which such meeting is to be called. Any such meeting shall be held
within or without the State of Delaware on such day and at such time as the
Directors shall designate. Holders of at least one-third of the Interests of the
Series (if the meeting relates solely to that Series), or Holders of at least
one-third of the Interests of each affected Series (if the meeting relates to
more than one Series but fewer than all) or Holders of at least one-third of the
Interests in the Company (if the meeting relates to the Company and not solely
to one or more particular Series), present in person or by proxy, shall
constitute a quorum for the transaction of any business, except as may otherwise
be required by the 1940 Act or other applicable law or by this Agreement or the
By-Laws of the Company. If a quorum is present at a meeting, an affirmative vote
by the Holders present, in person or by proxy, holding more than 50% of the
total Interests of the Holders present, either in person or by proxy, at such
meeting constitutes the action of the Holders, unless the 1940 Act, other
applicable law, this Agreement including the By-Laws of the Company require a
greater number of affirmative votes. Notwithstanding anything to the contrary in
this Section 9.1, the foregoing provisions shall only apply to the Interests of
the Series that have voting rights and to the extent of those rights and shall
not apply to the Interests of any Series that do not have voting rights.
Section 9.2 Notice of Meetings. Notice of all meetings of the Holders
stating the time, place and purposes of the meeting, shall be given by the
Directors by mail to each Holder of the Series or class thereof or the Company
entitled to vote thereon, as the case may be, at his registered address or
transmitted to the Holders by any other method permitted by law, sent at least
10 days and not more than 90 days before the meeting. At any such meeting, any
business properly before the meeting may be considered whether or not stated in
the notice of the meeting. Any adjourned meeting may be held as adjourned
without further notice.
Section 9.3 Record Date for Meetings. For the purpose of determining
Holders who are entitled to notice of and to vote at any meeting, or to
participate in any distribution, or for the purpose of any other action, the
Directors may from time to time fix a date, not more than 90 days prior to the
date of any meeting of the Holders or payment of distributions or other action,
as the case may be, as a record date for the determination of the Persons to be
treated as Holders of record of a particular Series or the Company for such
purposes.
Section 9.4 Proxies, etc. At any meeting of Holders, any Holder entitled
to vote thereat may vote by proxy, provided that no proxy shall be voted at any
meeting unless it shall have been placed on file with the Secretary, or with
such other officer or agent of the
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Company as the Secretary may direct, for verification prior to the time at which
such vote shall be taken. Pursuant to a resolution of a majority of the
Directors, proxies may be solicited in the name of one or more Directors or one
or more of the officers of the Company. Only Holders of record shall be entitled
to vote. Each Holder shall be entitled to vote proportionate to his Interest in
the Company or in any Series (as the context may require). When Interests are
held jointly by several persons, any one of them may vote at any meeting in
person or by proxy in respect of such Interest, but if more than one of them
shall be present at such meeting in person or by proxy, and such joint owners or
their proxies so present disagree as to any vote to be cast, such vote shall not
be received in respect of such Interest. A proxy purporting to be executed by or
on behalf of a Holder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger. If
the Holder is a minor or a person of unsound mind, and subject to guardianship
or to the legal control of any other person as regards the charge or management
of his Interest, he may vote by his guardian or such other person appointed or
having such control, and such vote may be given in person or by proxy.
Section 9.5 Reports. The Directors shall cause to be prepared, at least
annually, a report of operations containing a balance sheet and statement of
income and undistributed income of each Series prepared in conformity with
generally accepted accounting principles and an opinion of an independent public
accountant on such financial statements. The Directors shall, in addition,
furnish to the Holders at least semi-annually interim reports containing an
unaudited balance sheet as of the end of such period and an unaudited statement
of income and surplus for the period from the beginning of the current fiscal
year to the end of such period.
Section 9.6 Inspection of Records. The records of the Company shall be
open to inspection by Holders during normal business hours for any purpose not
harmful to the Company.
Section 9.7 Holder Action by Written Consent. Any action that may be taken
by Holders may be taken without a meeting if Holders holding more than 50% of
the total Interests entitled to vote (or such larger proportion thereof as shall
be required by any express provision of this Agreement) shall consent to the
action in writing or by any other method permitted by law and evidence of the
consents are filed with the records of the meetings of Holders. Such consent
shall be treated for all purposes as a vote taken at a meeting of Holders.
ARTICLE X
DURATION; DISSOLUTION OF
COMPANY; AMENDMENT; MERGERS; ETC.
Section 10.1 Duration. Subject to possible dissolution in accordance with
Section 10.2, the Company created hereby shall have perpetual existence. A
termination of a Series shall not, in and of itself, dissolve the Company or
cause the termination of any other Series.
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Section 10.2 Dissolution of Series or Company. Any Series shall be
dissolved by a resolution adopted by a majority of the Directors followed by
notice of the dissolution to the Holders of the Interests of the affected Series
without any vote or other action on the part of the Holders of the Interests of
the affected Series. The Company shall be dissolved upon (i) the dissolution of
the last remaining Series, (ii) a resolution adopted by a majority of the
Directors followed by notice of dissolution to the Holders of the Interests in
the Company, (iii) the termination of the legal existence of the last remaining
member of the Company or the occurrence of any other event which terminates the
continued membership of the last remaining member of the Company in the Company
unless the Company is continued without dissolution in a manner permitted by the
Act, or (iv) a decree of judicial dissolution under Section 18-802 of the Act.
Section 10.3 Actions Upon Dissolution.
(a) Upon an event of dissolution of the Company or a Series, the
affairs of the Company (or Series, as applicable) shall be wound-up in
accordance with the following provisions:
(i) The Company (or Series, as applicable) shall thereafter
carry on no business except for the purpose of winding up its
affairs.
(ii) The Directors shall proceed to wind up the affairs of the
Company (or Series, as applicable) and all of the powers of the
Directors under this Agreement shall continue until the affairs of
the Company (or Series, as applicable) shall have been wound up,
including the power to fulfill or discharge the contracts of the
Company (or Series, as applicable), collect its assets, sell,
convey, assign, exchange, transfer or otherwise dispose of all or
any part of the remaining Company Property (or assets belonging to
the Series, as applicable) to one or more persons at public or
private sale for consideration that may consist in whole or in part
of cash, securities or other property of any kind, discharge or pay
its liabilities, and to do all other acts appropriate to liquidate
its business; provided that any sale, conveyance, assignment,
exchange, transfer or other disposition of all or substantially all
of the Company Property or substantially all of the assets belonging
to a particular Series other than for cash, shall require approval
of the principal terms of the transaction and the nature and amount
of the consideration by the vote at a meeting, or by written
consent, of Holders holding more than 50% of the total outstanding
Interests of the Company or Series, as the case may be, entitled to
vote.
(iii) After paying or adequately providing for the payment of
all liabilities belonging to Company (or the Series subject to
termination, as applicable) and upon receipt of such releases,
indemnities and refunding agreements as they deem necessary for
their protection, the Directors may distribute the remaining Company
Property or assets belonging to such Series, in cash or in kind or
partly each, among the Holders of Interests of
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the Company (or the Holders of Interests of such Series, as
applicable) according to their Book Capital Accounts. In all cases
as herein provided, the rights of Holders of Interests in a Series
upon termination and liquidation of that Series shall be limited to
the assets belonging to that Series.
(b) After dissolution of the Company or Series and distribution to
the Holders as herein provided, the Company or Series shall terminate, and
a majority of the Directors shall execute and lodge among the records of
the Company an instrument in writing setting forth the fact of such
termination. Upon the termination of the Company, the Directors shall file
a certificate of cancellation in accordance with Section 18-203 of the Act
and such Directors shall, subject to the Act thereupon be discharged from
all further liabilities and duties hereunder, and the rights and interests
of all Holders shall thereupon cease.
Section 10.4 Amendment Procedure.
(a) Two-thirds (2/3) of the Directors then in office may amend this
Agreement at any time for any purpose without the approval of the Holders
of Interests; provided, that the vote or a written or other legally
permissible form of consent of Holders holding more than 50% of the total
outstanding Interests or of Holders of 67% or more of the Interests voting
or consenting, if Holders of at least 50% of such Interests vote or
consent, shall be necessary to approve any amendment whenever such vote or
consent is required under the 1940 Act. Any amendment required or
permitted to be submitted to the Holders that, as the Directors determine,
shall affect the Holders of one or more Series shall be authorized by a
vote of the Holders of each Series affected and no vote of Holders of a
Series not affected shall be required. The Directors may, without Holder
vote, restate, amend, or otherwise supplement the certificate of formation
of the Company as they deem necessary or desirable.
(i) Nothing contained in this Agreement shall permit the
amendment of this Agreement to impair the exemption from personal
liability of Holders, Directors, officers, employees and agents of
the Company.
(ii) A certificate signed by a Director or by the Secretary or
any Assistant Secretary of the Company, setting forth an amendment
and reciting that it was duly adopted by the Holders or by the
Directors as aforesaid or a copy of the Agreement, as amended,
certified by a Director or the Secretary or any Assistant Secretary
of the Company, certifying that such Agreement is a true and correct
copy of the Agreement as amended, shall be conclusive evidence of
such amendment when lodged among the records of the Company.
Section 10.5 Merger, Consolidation, Conversion and Sale of Assets.
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(a) The Company may convert or merge into or consolidate with any
corporation, association, other limited liability company or other
organization or the Company thereof may sell, lease or exchange all or
substantially all of the Company Property including its good will, upon
such terms and conditions and for such consideration when and as
authorized by vote or written or other legally permissible form of consent
of two-thirds (2/3) of the Directors then in office. In accordance with
Section 18-209 of the Act, an agreement of merger or consolidation may
effect any amendment to this Agreement or the By-Laws or effect the
adoption of a new limited liability company agreement or by-laws of the
Company if the Company is the surviving or resulting entity.
(b) The Directors may cause to be organized or assist in organizing
a corporation or corporations under the laws of any jurisdiction or any
other limited liability company, trust, partnership, association or other
organization to take over all of the Company Property, or Series thereof,
or to carry on any business in which the Company shall directly or
indirectly have any interest, and to sell, convey and transfer the Company
Property, or Series thereof to any such corporation, trust, association or
organization in exchange for the equity interests thereof or otherwise,
and to lend money to, subscribe for the equity interests of, and enter
into any contracts with any such corporation, limited liability company,
trust, partnership, association or organization, or any corporation,
partnership, limited liability company, trust, association or organization
in which the Company holds or is about to acquire equity interests. The
Directors may also cause a merger or consolidation between the Company or
any successor thereto and any such corporation, trust, partnership,
association or other organization if and to the extent permitted by law,
as provided under the law then in effect. Nothing contained herein shall
be construed as requiring approval of the Holders for the Directors to
organize or assist in organizing one or more corporations, trusts,
partnerships, associations or other organizations and selling, conveying
or transferring a portion of the Company Property to such organizations or
entities.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Registered Agent. The registered office of the Company is c/o
The Corporation Trust Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000 and the
registered agent of the Company at such address is The Corporation Trust
Company.
Section 11.2 Governing Law. This Agreement is executed by all of the
Directors and delivered with reference to the Act and the laws of the State of
Delaware, and the rights of all parties and the validity and construction of
every provision hereof shall be governed by, subject to and construed according
to the Act and the laws of the State of Delaware (unless and to the extent
otherwise provided for and/or preempted by the 1940 Act or other applicable
federal securities laws).
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Section 11.3 Counterparts. This Agreement may be simultaneously executed
in several counterparts, each of which shall be deemed to be an original, and
such counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such original counterpart.
Section 11.4 Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Company, appears to be a
Director hereunder, or Secretary, Assistant Secretary, Treasurer or Assistant
Treasurer of the Company, certifying to: (a) the number or identity of Directors
or Holders, (b) the due authorization of the execution of any instrument or
writing, (c) the form of any vote passed at a meeting of Directors or Holders,
(d) the fact that the number of Directors or Holders present at any meeting or
executing any written instrument satisfies the requirements of this Agreement,
(e) the form of any By-Laws adopted by or the identity of any officers elected
by the Directors, or (f) the existence of any fact or facts that in any manner
relate to the affairs of the Company, shall be conclusive evidence as to the
matters so certified in favor of any Person dealing with the Directors and their
successors.
Section 11.5 Provisions in Conflict with Law or Regulations.
(a) The provisions of this Agreement are severable, and if the
Directors shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 Act, the regulated investment
company provisions of the Code, the Act or, consistent with Section 11.2,
any other applicable Delaware law regarding administration of trusts, or
with other applicable laws and regulations, the conflicting provisions
shall be deemed superseded by such law or regulation to the extent
necessary to eliminate such conflict; provided, however, that such
determination shall not affect any of the remaining provisions of this
Agreement or render invalid or improper any action taken or omitted prior
to such determination.
(b) If any provision of this Agreement shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability
shall pertain only to such provision in such jurisdiction and shall not in
any manner affect such provision in any other jurisdiction or any other
provision of this Agreement in any jurisdiction.
Section 11.6 Company Only. It is the intention of the Directors to create
only a limited liability company under the Act with the relationship of manager
and member between the Directors and each Holder from time to time. It is not
the intention of the Directors to create a general partnership, limited
partnership, joint stock association, corporation, bailment, or any form of
legal relationship other than a Delaware limited liability company except to the
extent such limited liability company is deemed to constitute a partnership
under the Code and applicable state tax laws. Nothing in this Agreement shall be
construed to make the Holders, either by themselves or with the Directors,
partners or members of a joint stock association.
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