AMENDED AND RESTATED
AGREEMENT OF LIMITED LIABILITY COMPANY
OF
GOVERNMENT SECURITIES DELAWARE, LLC
A DELAWARE LIMITED LIABILITY COMPANY
PRELIMINARY STATEMENTS
(1) ML SSG S.A X.X., organized under the laws of Luxembourg ("LuxCo" or
the "Member") formed a limited liability company pursuant to and in accordance
with the Delaware Limited Liability Company Act, 6 Del. C.ss.ss.18-101, et seq.
(the "Act") under the Original LLC Agreement (as defined below);
(2) Simultaneous to the execution and delivery of the Original LLC
Agreement and the filing of the Certificate of Formation with the Office of the
Secretary of State of the State of Delaware, LuxCo was admitted as the sole
Member of the LLC.
(3) LuxCo hereby declares the following to be the Amended and Restated
Limited Liability Company Agreement of such limited liability company:
ARTICLE I
NAME AND DEFINITIONS
SECTION 1.01. Name. The name of the limited liability company (the
"LLC") is Government Securities Delaware, LLC.
SECTION 1.02. Definitions. (a) Whenever used herein, unless otherwise
required by the context or specifically provided:
"1940 Act" shall mean the Investment Company Act of 1940 and the Rules
and Regulations promulgated thereunder, all as amended from time to time.
"Accredited Investors" shall have the meaning given it in Rule 501 of
Regulation D under the Securities Act of 1933, as amended.
"Act" shall have the meaning given it in the above preliminary
statements.
"Administrator" shall mean the Person appointed as the LLC's
administrator by the Managers.
"Business Day" shall mean a day of the year on which banks are not
required or authorized by law to close in New York City.
"By-Laws" shall mean the By-Laws of the LLC, if and when adopted, as
amended from time to time.
"Certificate of Interest" or "CI" shall each mean a certificate in
substantially the form of Exhibit B attached hereto evidencing a Unit.
"Certificate of Formation" shall mean the certificate of formation, as
amended or restated from time to time, filed by the Managers in the Office of
the Secretary of State of the State of Delaware in accordance with the Act on
August 8, 2000.
"Code" shall have the meaning given it under Section 2.01.
"Dividend" shall have the meaning given it under Section 7.01.
"Investment Guidelines" shall mean the investment guidelines attached
hereto as Exhibit A.
"LLC Agreement" shall mean this Amended and Restated Agreement of
Limited Liability Company, as amended or restated from time to time.
"Manager" shall mean the Manager or Managers, as the case may be, of
the LLC named herein or elected in accordance with Article V.
"Net Asset Value" shall have the meaning given it under Section 7.02.
"Original LLC Agreement" shall mean that Agreement of Limited Liability
Company of ML SSG DELAWARE, LLC dated as of August 8, 2000.
"Par Value" shall have the meaning given it under Section 4.01.
"Payment Date" shall have the meaning given it under Section 7.01.
"Permitted Investments" shall mean any investments which, in the
opinion of the Manager, meet the criteria set out in Investment Guidelines.
"Person" shall mean an individual, partnership, corporation (including
a business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity.
"Required Unit Holders" shall mean, at any time, Unit Holders owning at
least (a) 67% of the Units present at such meeting, if the holders of more than
50% of the Units are present or represented by proxy, or (b) 50% of the Units,
whichever is the lesser.
"RIC" shall have the meaning given it under Section 2.01.
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"SEC" shall mean the United States Securities and Exchange Commission
or any successor thereof.
"Units" shall have the meaning given it under Section 4.01.
"Unit Holder" shall mean a record owner of Units, who shall be a Member
within the meaning of the Act.
"$" shall mean the lawful money of the United States of America.
The terms "Interested Person", "disinterested person", "Investment
Adviser" and "Principal Underwriter" shall have the meanings given them in the
1940 Act.
(b) Unless the context of this LLC Agreement requires otherwise, the
plural includes the singular, the singular includes the plural, and "including"
has the inclusive meaning of "including without limitation". All pronouns and
any variations thereof shall be deemed to refer to masculine, feminine, or
neuter, singular or plural, as the identity of the Person or Persons may
require.
ARTICLE II
PURPOSE
SECTION 2.01. Purpose and Powers. The purposes of the LLC are to
(i) act as a closed-end investment company under the 1940 Act, (ii) purchase,
sell, enter into or hold any Permitted Investments, and (iii) engage in any
activity for which limited liability companies may be organized in the State of
Delaware to the extent necessary or convenient for the conduct, promotion or
attainment of the business purposes or activities of the LLC set forth in
subsections (i) and (ii) of this Section 2.01. The LLC shall elect to be treated
as a regulated investment company (a "RIC"), as defined in Section 851 of the
Internal Revenue Code of 1986, as amended (the "Code"), for U. S. federal income
tax purposes.
ARTICLE III
REGISTERED OFFICE, REGISTERED AGENT
SECTION 3.01. Registered Office. The registered office of the LLC in
the State of Delaware is located at Corporation Trust Center, 1209 Orange
Street, New Castle County, Xxxxxxxxxx, Xxxxxxxx 00000.
SECTION 3.02. Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware are
The Corporation Trust Company, Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
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ARTICLE IV
UNITS AND CERTIFICATES OF BENEFICIAL INTEREST
SECTION 4.01. Interest. (a) The Limited Liability Company Interests (as
defined in the Act) in the LLC shall at all times be divided into units of a
single class, each of which unit shall represent a capital contribution made to
the LLC in the amount of $500.00 (the "Par Value") and shall represent an equal
proportionate interest in the LLC with each other unit, none having priority or
preference over another (each, a "Unit"). The number of Units authorized and
represented by CIs shall be limited to 2,000,200, and shall not be issued in
fractional amounts. The Manager may from time to time divide or combine the
Units into a greater or lesser number without thereby changing the proportionate
interests in the LLC.
(b) Upon request by any Unit Holder, the LLC shall issue one or more
CIs to evidence the Units owned by such Unit Holder. Every CI shall be signed by
at least one Manager, in the name of the LLC, certifying the number of Units
represented thereby. Any or all of the signatures on a CI may be a facsimile. In
case the Manager who has signed or whose facsimile signature has been placed
upon a CI shall have ceased to be a Manager before such CI is issued, it may be
issued by the LLC with the same effect as if he were a Manager at the date of
issue.
SECTION 4.02. Ownership of Units. The ownership of Units shall be
recorded on the books of the LLC or its transfer or similar agent. Other than as
set forth in this Article IV, no Units and CIs shall be issued. Subject to the
foregoing, the Manager may make such rules as he considers appropriate for the
issuance of Units. The record books of the LLC as kept by the LLC or any
transfer or similar agent of the LLC, as the case may be, shall be conclusive as
to who are the Unit Holders and as to the number of Units held from time to time
by each Unit Holder.
SECTION 4.03. Transfers. Units of the LLC shall be transferable in the
manner prescribed by law and in this LLC Agreement. Transfers of Units shall be
made on the books of the LLC only by the person named in the CI or by his
attorney lawfully constituted in writing and upon the surrender of the CI
therefor, which shall be cancelled before a new CI shall be issued. No Unit
Holder may transfer Units without the prior consent of the Managers, which
consent may be withheld in the Managers' sole discretion.
SECTION 4.04. No Preemptive Rights. Unit Holders shall have no
preemptive or other right to receive, purchase or subscribe for any additional
Units issued by the LLC.
SECTION 4.05. Status of Units and Limitation of Personal Liability.
Units shall be deemed to be personal property giving only the rights provided in
this LLC Agreement. Each Unit Holder by virtue of having become a Unit Holder
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death of a Unit Holder during the continuance of
the LLC shall not operate to terminate the LLC nor entitle the
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representative of any deceased Unit Holder to an accounting or to take any
action in court or elsewhere against the LLC or the Manager, but only to the
rights of said decedent under this LLC Agreement. Ownership of Units shall not
entitle the Unit Holder to any title in or to the whole or any part of the LLC
property or right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Units constitute any of the Unit Holders
as partners. Neither the LLC nor the Manager, nor any officer, employee or agent
of the LLC, shall have any power to bind personally any Unit Holder, nor except
as specifically provided herein (including, without limitation, Section 4.01) to
call upon any Unit Holder for the payment of any sum of money or assessment
whatsoever other than such as such Unit Holder may at any time personally agree
to pay.
SECTION 4.06. Issuance of Units. The LLC is authorized to issue Units
only to Accredited Investors. Simultaneously with the execution hereof, any and
all Interests (as defined in the Original LLC Agreement) held by LuxCo shall be
deemed to have been converted into 2,000,000 Units. The Managers may accept
investments in Units at Par Value from such additional persons as they may from
time to time authorize.
SECTION 4.07. Mandatory Redemption. The LLC shall mandatorily redeem
all of the outstanding Units of the LLC on August 8, 2025 at, subject to Section
18-804 of the Act, their Net Asset Value. The redemption price may be paid
wholly or partly in-kind if the Manager determines that such payment is
advisable and in the interest of the Unit Holders.
SECTION 4.08. Lost, Stolen or Destroyed CIs. The Manager may direct a
new CI to be issued in place of any certificate theretofore issued by the LLC
alleged to have been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the person claiming the CI to be lost, stolen or destroyed. When
authorizing such issue of a new CI, the Manager may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed CI, or his legal representative, to advertise the same in
such manner as the Manager shall require and/or to give the LLC a bond in such
sum as it may direct as indemnity against any claim that may be made against the
LLC with respect to the CI alleged to have been lost, stolen or destroyed.
ARTICLE V
THE MANAGERS
SECTION 5.01. Number of Managers and Term of Office. The initial number
of Managers shall be one (1) and is Xxxxxxx X. Xxxxxx. From and after the
execution hereof, the number of Managers shall be such number as shall be fixed
from time to time by a written instrument signed by a majority of the Managers
(or, if there is only one Manager, by such Manager). No reduction in the number
of Managers shall have the effect of removing any Manager from office prior to
the expiration of his or her term unless the Manager is specifically removed
pursuant to Section 5.02 at the time of the decrease. Subject to Section 5.02,
each Manager shall serve until the next regular annual or special meeting of
Unit Holders called for
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the purpose of electing Managers and then until such Manager's successor is duly
elected and qualified.
SECTION 5.02. Removal; Vacancies and Elections. Any Manager may be
removed, with or without cause, (a) by vote of the Required Unit Holders taken
at a meeting at which a quorum is present and acting throughout, or (b) by vote
of a majority of the Managers then in office. Any vacancy in the office of a
Manager may be filled by the vote, within 30 days of such vacancy becoming
effective, of the remaining Managers; provided that if required by Section 16 of
the 1940 Act, the Managers shall forthwith cause to be held as promptly as
possible and in any event within 60 days of such vacancy becoming effective
(unless the SEC by order shall extend such period) a meeting of Unit Holders for
the purpose of electing Managers in compliance with Sections 10 and 16 of the
1940 Act. Until a vacancy in the office of any Manager is filled as provided in
this Section 5.02, the remaining Managers in office, regardless of their number,
shall have the powers granted to the Managers and shall discharge all the duties
imposed upon the Managers by this LLC Agreement. Election of Managers shall be
by the affirmative vote of the Required Unit Holders entitled to vote present in
person or by proxy at an annual or special meeting of Unit Holders called for
the purpose of electing Managers.
SECTION 5.03. Effect of Death, Resignation, Etc. of a Manager. The
death, declination, resignation, retirement, removal or incapacity of the
Managers, or any one of them, shall not operate to annul or terminate the LLC or
to revoke any existing agency created pursuant to the terms of this LLC
Agreement.
SECTION 5.04. Powers. (a) Subject to the provisions of this LLC
Agreement, the business of the LLC shall be managed by the Managers, and they
shall have all powers necessary or convenient to carry out that responsibility.
Without limiting the foregoing, the Managers may:
(i) adopt By-Laws not inconsistent with this LLC Agreement
providing for the conduct of the business of the LLC and may amend and
repeal such By-Laws to the extent that such By-Laws do not reserve
that right to the Unit Holders;
(ii) subject to Section 5.02, fill vacancies in their number,
including vacancies resulting from increases in their number, and may
elect and remove such officers and appoint and terminate such agents
as they consider appropriate;
(iii) appoint from their own number, and terminate, any one or
more committees consisting of one or more Managers, including an
executive committee which may, when the Managers are not in session,
exercise some or all of the power and authority of the Managers as the
Managers may determine;
(iv) appoint an advisory board, the members of which need not be
Managers and need not be Unit Holders; and
(v) hire an administrator to render administrative and management
services to the LLC, employ one or more custodians of the assets of
the LLC and authorize such custodians to employ subcustodians and to
deposit all or any part of such assets in a system or systems for the
central handling of securities, retain a transfer agent or a Unit
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Holder services agent, or both, provide for the distribution of Units
by the LLC, through one or more principal underwriters or otherwise,
set record dates for the determination of Unit Holders with respect to
various matters, and in general delegate such authority as they
consider desirable to any officer of the LLC, to any committee of the
Managers and to any agent or employee of the LLC or to any such
administrator, custodian, transfer agent or underwriter.
(b) Without limiting the generality of the foregoing, the Managers
shall have power and authority to:
(i) purchase, sell, enter into or hold any Permitted Investments;
(ii) vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property; and to execute
and deliver proxies or powers of attorney to such person or persons as
the Managers shall deem proper, granting to such person or persons
such power and discretion with relation to securities or property as
the Managers shall deem proper;
(iii) exercise powers and rights of subscription which in any
manner arise out of ownership of securities;
(iv) hold any security or property, whether in bearer,
unregistered or other negotiable form, in the name of the Managers or
of the LLC or in the name of a custodian, subcustodian or other
depository or a nominee or nominees or otherwise;
(v) consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or other issuer, any
security of which is or was held in the LLC;
(vi) consent to any contract, lease, mortgage, purchase or sale
of property by such corporation or issuer, and to pay calls or
subscriptions with respect to any security held in the LLC;
(vii) join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that
connection to deposit any security with, or transfer any security to,
any such committee, depositary or trustee, and to delegate to them
such power and authority with relation to any security (whether or not
so deposited or transferred) as the Managers shall deem proper, and to
agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Managers
shall deem proper;
(viii) compromise, arbitrate or otherwise adjust claims in favor
of or against the LLC on any matter in controversy, including but not
limited to claims for taxes;
(ix) borrow funds;
(x) endorse or guarantee the payment of any notes or other
obligations of any Person, make contracts of guaranty or suretyship,
or otherwise assume liability for payment thereof, and mortgage and
pledge the LLC property or any part thereof to secure any of or all of
such obligations;
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(xi) purchase and pay for entirely out of LLC property such
insurance as they may deem necessary or appropriate for the conduct of
the business of the LLC, including, without limitation, insurance
policies insuring the assets of the LLC and payment of distributions
and principal on its portfolio investments, and insurance policies
insuring the Unit Holders, Managers, officers, employees, agents,
Investment Advisers, Administrators, Principal Underwriters or other
independent contractors of the LLC individually against all claims and
liabilities of every nature arising by reason of holding, being in or
having held any such office or position, or by reason of any action
alleged to have been taken or omitted by any such person as a Unit
Holder, Manager, officer, employee, agent, Investment Adviser,
Administrator, Principal Underwriter or independent contractor,
including any action taken or omitted that may be determined to
constitute negligence;
(xii) issue Units and CIs as set forth in Article IV; and
(xiii) register with the Securities and Exchange Commission under
the 1940 Act as a registered investment company and take such other
action and make such other filings as the Managers determine is
appropriate in connection therewith.
(c) The presence at a meeting of two-thirds (2/3) of the Managers (or,
if there is only one Manager, of such Manager) shall constitute a quorum at such
meeting for the transaction of business, except as otherwise provided by law or
the By-Laws. Except as otherwise provided herein or from time to time in the
By-Laws, any action to be taken by the Managers may be taken by a majority of
the Managers present at a meeting of the Managers (a quorum being present),
within or without the State of Delaware, including any meeting held by means of
a conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting, or
by written consents of a majority of the Managers then in office. The approval
of any contract with an Investment Adviser or Principal Underwriter that the LLC
enters, into or any renewal or amendment thereof, shall each require the
affirmative vote, cast in person at a meeting duly called for that purpose, of a
majority of the Managers who are not Interested Persons of the LLC. The approval
of the fidelity bond required by the 1940 Act and the selection of the LLC's
independent public accountants shall each require the affirmative vote of a
majority of the Managers who are not Interested Persons of the LLC. Unless
otherwise required by law or the By-Laws, any Manager may bind the LLC;
provided, however, that where a particular action requires a specific vote or
prior approval of the Managers or Unit Holders in order to be valid hereunder,
no Manager may take any action to bind the LLC with respect thereto until such
vote or approval, as the case may be, has been obtained. Any one or more
Managers are hereby authorized to execute CIs on behalf of the LLC.
SECTION 5.05. Limitations on Managers' Powers. The Managers are not
permitted to:
(a) purchase, sell, enter into or hold any investment other than
a Permitted Investment;
(b) issue any securities or instruments except for the Units and
CIs to be issued pursuant to Article IV;
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(c) notwithstanding anything herein to the contrary, make short
sales or purchase securities on margin;
(d) notwithstanding anything herein to the contrary, write put or
call options;
(e) notwithstanding anything herein to the contrary, underwrite
securities of other issuers; or
(f) notwithstanding anything herein to the contrary, purchase or
sell real estate and real estate mortgage loans, commodities or
commodities contracts.
SECTION 5.06. Payment of Expenses by LLC. The Managers are authorized
to pay or to cause to be paid out of the principal or income of the LLC, or
partly out of principal and partly out of income, as they deem fair, all
expenses, fees, charges, taxes and liabilities incurred or arising in connection
with the LLC, or in connection with the management thereof, including, but not
limited to, the Manager's compensation and such expenses and charges for the
services of the LLC's officers, employees, Administrator or manager, Principal
Underwriter, auditor, counsel, custodian, transfer agent, Unit Holder servicing
agent and such other agents or independent contractors as the Managers may deem
necessary or proper to engage, and such other expenses and charges as the
Managers may deem necessary or proper to incur.
SECTION 5.07. Ownership of Assets of the LLC. Title to all of the
assets of the LLC shall at all times be considered as vested in the LLC,
including in the circumstances in which the assets of the LLC may be titled as
set forth in Section 5.04(d).
SECTION 5.08. Investment Advisory, Investment Management and
Distribution. (a) Subject to a favorable vote of the Required Unit Holders, the
Managers may, at any time and from time to time, contract with an Investment
Adviser for exclusive or nonexclusive investment advisory and/or investment
management services with any corporation, trust, association or other
organization, every such contract to comply with such requirements and
restrictions as may be set forth in the By-Laws and the 1940 Act; and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Managers may determine, including, without
limitation, authority to determine from time to time what investments shall be
purchased, held, sold or exchanged and what portion, if any, of the assets of
the LLC shall be held uninvested, and to make changes in the LLC's investments.
Subject to a favorable vote of the Required Unit Holders, the Managers may also,
at any time and from time to time, contract with any corporation, trust,
association or other organization, appointing it exclusive or nonexclusive
distributor or Principal Underwriter for the Units, every such contract to
comply with such requirements and restrictions as may be set forth in the
By-Laws and the 1940 Act; and any such contract may contain such other terms
interpretive of or in addition to said requirements and restrictions as the
Managers may determine.
(b) The fact that (i) any of the Unit Holders, Managers or officers of
the LLC is a shareholder, director, officer, partner, trustee, employee,
manager, adviser, principal underwriter, or distributor or agent of or for any
corporation, trust, association or other organization, or of or
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for any parent or affiliate of any organization, with which an advisory or
management contract, or Principal Underwriter's or distributor's contract, or
transfer, shareholder services or other agency contract may have been or may
hereafter be made, or that any organization, or any parent or affiliate thereof,
is a Unit Holder, or that (ii) any corporation, trust, association or other
organization with which an advisory or management contract or Principal
Underwriter's or distributor's contract, or transfer, Unit Holder services or
other agency contract may have been or may hereafter be made also has an
advisory or management contract, or Principal Underwriter's or distributor's
contract, or transfer, shareholder services or other agency contract with one or
more other corporations, trusts, associations or other organizations, or has
other business or interests shall not affect the validity of any such contract
or disqualify any Unit Holder, Manager or officer of the LLC from voting upon or
executing its rights or duties hereunder or create any liability or
accountability to the LLC or the Unit Holders solely as a result thereof.
ARTICLE VI
UNIT HOLDERS' VOTING POWERS AND MEETINGS
SECTION 6.01. Voting Powers. The Unit Holders shall have power to vote
only (i) for the election or removal of Managers, (ii) with respect to any
Investment Adviser as provided in Section 5.08, (iii) with respect to any
termination of this LLC to the extent and as provided in Section 10.4, (iv) with
respect to any amendment of this LLC Agreement to the extent and as provided in
Section 10.7, (v) in accordance with Section 18-1001 of the Act, as to whether
or not a court action, proceeding or claim should or should not be brought or
maintained derivatively or as a class action on behalf of the LLC or the Unit
Holders, (vi) with respect to such additional matters relating to the LLC as may
be required by law, this LLC Agreement, the By-Laws or any registration of the
LLC with the Securities and Exchange Commission (or any successor agency) or any
State, or as the Managers may consider necessary or desirable. Each Unit shall
be entitled to one vote as to any matter on which it is entitled to vote. There
shall be no cumulative voting in the election of Managers. Units may be voted in
person or by proxy. A proxy with respect to Units held in the name of two or
more Persons shall be valid if executed by any one of them unless at or prior to
exercise of the proxy the LLC receives a specific written notice to the contrary
from any one of them. A proxy purporting to be executed by or on behalf of a
Unit Holder shall be deemed valid unless challenged at or prior to its exercise
and the burden of proving invalidity shall rest on the challenger. Until Units
are issued, the Managers may exercise all rights of Unit Holders and may take
any action required by law, this LLC Agreement or the By-Laws to be taken by
Unit Holders.
SECTION 6.02. Voting Power and Meetings. There shall be no requirement
for an annual meeting of Unit Holders. If held, the date of the annual meeting
of the Unit Holders shall be determined by the Managers. The Managers shall give
the Unit Holders prompt written notice of such date. Unless otherwise designated
in the call thereof, the annual meeting shall always be at the office of the LLC
at 000 Xxxxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, or at such other place
as may be designated in the call thereof, which call shall be made by the
Managers. Special meetings may also be called by the Managers from time to time
for the purpose of taking
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action upon any matter requiring the vote or authority of the Unit Holders as
herein provided or upon any other matter deemed by the Managers to be necessary
or desirable. Written notice of any meeting of Unit Holders shall be given or
caused to be given by the Managers by mailing such notice at least seven days
before such meeting, postage prepaid, stating the time, place and purpose of the
meeting, to each Unit Holder at such Unit Holder's address as it appears on the
records of the LLC. If the Managers shall fail to call or give notice of any
meeting of Unit Holders for a period of 30 days after written application by
Unit Holders holding at least 50% of the Units then outstanding requesting a
meeting to be called for a purpose requiring action by the Unit Holders as
provided herein or in the By-Laws, then Unit Holders holding at least 50% of the
Units then outstanding may call and give notice of such meeting, and thereupon
the meeting shall be held in the manner provided for herein in case of call
thereof by the Managers.
SECTION 6.03. Quorum and Required Vote. Unit Holders owing one-half
(1/2) of the issued and outstanding Units at any time shall constitute a quorum
for the transaction of business at any meeting of the Unit Holders. Any lesser
percentage, however, shall be sufficient for adjournments. Any adjourned session
or sessions may be held within a reasonable time after the date set for the
original meeting without the necessity of further notice. Except when a larger
vote is required by any provision of this LLC Agreement or the By-Laws, a vote
of the Required Unit Holders shall decide any questions and a plurality shall
elect a Manager.
SECTION 6.04. Written consent. Any action taken by the Unit Holders may
be taken without a meeting if the Required Unit Holders entitled to vote on the
matter (or such larger proportion thereof as shall be required by any express
provision of this LLC Agreement or the By-Laws) consent to the action in writing
and such written consents are filed with the records of the meetings of Unit
Holders. Such consent shall be treated for all purposes as a vote taken at a
meeting of Unit Holders.
SECTION 6.05. Additional Provisions. The By-Laws may include further
provisions for Unit Holders' votes and meetings and related matters. To the
extent of any inconsistency between the By-Laws and this LLC Agreement, the
provisions of this LLC Agreement shall prevail.
ARTICLE VII
DISTRIBUTIONS AND DETERMINATION OF NET ASSET VALUE
SECTION 7.01. Distributions. (a) The Managers may, but need not,
distribute to each Unit Holder, out of the income of the LLC, a semi-annual
dividend (each, a "Dividend") providing a return equal to a rate per annum of
7.1215%, calculated on the basis of a 360 day year of twelve 30-day months, on
the Par Value of each Unit owned by such Unit Holder; provided, however, that
such distribution is not otherwise in violation of Sections 18-607 or 18-804 of
the Act. The Managers shall have full discretion to determine whether a Dividend
shall be distributed and their determination shall be binding upon the Unit
Holders. Distribution of
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such Dividends, if any be made, shall be made on each February 15 and August 15,
or if such day is not a Business Day, on the next succeeding Business Day (each
such date, a "Payment Date").
(b) If the Managers do not distribute a Dividend on a Payment Date,
such Dividend shall accumulate, without interest, until distributed.
(c) In addition to the foregoing, at any time and from time to time in
their discretion, the Managers may distribute to the Unit Holders as of a record
date or dates determined by the Managers, in cash or otherwise, all or part of
any gains realized on the sale or disposition of property or otherwise, or all
or part of any other principal or income of the LLC; provided, however, that
such distributions are not otherwise in violation of Sections 18-607 or 18-804
of the Act.
(d) Each distribution pursuant to this Section 7.01 shall be made
ratably according to the number of Units held by the several Unit Holders on the
applicable record date thereof, provided that no distribution need be made on
Units purchased pursuant to orders received, or for which payment is made, after
such time or times as the Managers may determine.
Section 7.02. Determination of Net Asset Value. (a) The term "net asset
value" of a Unit shall mean: (i) the value of all the assets of the LLC, as
determined in accordance with the balance of this Section 7.02; (ii) less total
liabilities of the LLC, as determined in accordance with the balance of this
Section 7.02; (iii) divided by the number of Units outstanding, in each case at
the time of each determination. Any fractions involved in the computation of net
asset value per share shall be adjusted to the nearer cent unless the Managers
shall determine to adjust such fractions to a fraction of a cent.
(b) The Managers, or any officer or officers or agent of this LLC
designated for the purpose by the Managers, shall determine the net asset value
of the Units, and the Managers shall fix the times as of which the net asset
value of the Units shall be determined and shall fix the periods during which
any such net asset value shall be effective as to sales and other transactions
in the Units, except as such times and periods for any such transaction may be
fixed by other provisions of this LLC Agreement or by the By-Laws.
(c) In valuing the portfolio investments for determination of net asset
value per Unit, securities for which market quotations are readily available
shall be valued at prices which, in the opinion of the Managers, or any officer
or officers or agent of the LLC designated for the purpose by the Managers, most
nearly represent the market value of such securities, which may, but need not,
be the most recent bid price obtained from one or more of the market makers for
such securities; other securities and assets shall be valued at fair value as
determined by or pursuant to the direction of the Managers. Notwithstanding the
foregoing, short-term debt obligations, commercial paper, and repurchase
agreements may be, but need not be, valued on the basis of quoted yields for
securities of comparable maturity, quality and type, or on the basis of
amortized cost. In the determination of net asset value, dividends receivable
and accounts receivable for investments sold and for Units sold shall be stated
at the amounts to be received
12
therefor; and income receivable accrued daily on bonds and notes owned shall be
stated at the amount to be received. Any other assets shall be stated at fair
value as determined by the Managers or such officer, officers or agent pursuant
to the Managers' authority, except that no value shall be assigned to good will,
furniture, lists, reports, statistics or other noncurrent assets other than real
estate. Liabilities for accounts payable for investments purchased shall be
stated at the amounts payable therefor. In determining net asset value of the
LLC, the Person making such determination on behalf of the LLC may include in
liabilities such reserves, estimated accrued expenses and contingencies as such
Person may in its best judgment deem fair and reasonable under the
circumstances. Any income, dividends and gains distributions payable by the LLC
shall be deducted as of such time or times on the record date therefor as the
Managers shall determine.
(d) The manner of determining the net assets of the LLC or of
determining the net asset value of the Units may from time to time be altered as
necessary or desirable in the judgment of the Managers to conform to any other
method prescribed or permitted by any applicable law or regulation, whereupon
the provisions of this Section 7.02 shall be deemed amended, with no vote on the
part of any Unit Holder or other Person being necessary therefor.
(e) Determinations under this Section 7.02 made in good faith and in
accordance with the provisions of the 1940 Act shall be binding on all parties
concerned.
ARTICLE VIII
COMPENSATION AND LIMITATION OF LIABILITY OF MANAGERS
Section 8.01. Compensation. The Managers shall receive compensation for
their services as Manager in such amounts as may be determined from time to time
by vote of the Required Unit Holders. Nothing herein shall in any way prevent
the employment of any Manager for advisory, management, legal, accounting,
investment banking or other services and payment for the same by the LLC.
Section 8.02. Limitation of Liability. (a) The Managers shall not be
responsible or liable in any event for any neglect or wrongdoing of any officer,
agent, employee, adviser or principal underwriter of the LLC, nor shall any
Manager be responsible for the act or omission of any other Manager, but nothing
herein contained shall protect any Manager against any liability to which he or
she 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 or her office.
(b) Every note, bond, contract, instrument, certificate, CI or
undertaking and every other act or thing whatsoever executed or done by or on
behalf of the LLC or the Managers or any of them in connection with the LLC
shall be conclusively deemed to have been executed or done only in or with
respect to their or his or her capacity as Managers or Manager, and such
Managers or Manager shall not be personally liable thereon.
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ARTICLE IX
INDEMNIFICATION
Section 9.01. Managers, Officers, etc.. The LLC shall indemnify each of
its Managers and officers (including persons who serve at the LLC's request as
directors, officers or trustees of another organization in which the LLC has any
interest as a shareholder, creditor or otherwise) (hereinafter referred to as a
"Covered Person") against all liabilities and expenses, including but not
limited to amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Manager or officer, except that no Covered Person shall be indemnified
against any liability to the LLC or the Unit Holders to which such Covered
Person would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
such Covered Person's office. Expenses, including counsel fees so incurred by
any such Covered Person (but excluding amounts paid in satisfaction of
judgments, in compromise or as fines or penalties), may be paid from time to
time by the LLC in advance of the final disposition of any such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Covered Person
to repay amounts so paid to the LLC if it is ultimately determined that
indemnification of such expenses is not authorized under this Article IX,
provided that (a) such Covered Person shall provide security for his or her
undertaking, (b) the LLC shall be insured against losses arising by reason of
such Covered Person's failure to fulfill his undertaking, or (c) a majority of
the Managers who are disinterested persons and who are not Interested Persons
(provided that a majority of such Managers then in office act on the matter), or
independent legal counsel in a written opinion, shall determine, based on a
review of readily available facts (but not a full trial-type inquiry), that
there is reason to believe such Covered Person ultimately will be entitled to
indemnification.
Section 9.02. Compromise Payment. As to any matter disposed of (whether
by a compromise payment, pursuant to a consent decree or otherwise) without an
adjudication in a decision on the merits by a court, or by any other body before
which the proceeding was brought, that such Covered Person is liable to the LLC
or the Unit Holders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
Covered Person's office, indemnification shall be provided if (a) approved as in
the best interest of the LLC, after notice that it involves such
indemnification, by at least a majority of the Managers who are disinterested
persons and are not Interested Persons (provided that a majority of such
Managers then in office act on the matter), upon a determination, based upon a
review of readily available facts (but not a full trial-type inquiry) that such
Covered Person is not liable to the LLC or the Unit Holders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered
14
Person's office, or (b) there has been obtained an opinion in writing of
independent legal counsel, based upon a review of readily available facts (but
not a full-trial type inquiry) to the effect that such indemnification would not
protect such Covered Person against any liability to the LLC to which such
Covered Person 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 or her office. Any approval pursuant to this Section 9.02 shall
not prevent the recovery from any Covered Person of any amount paid to such
Covered Person in accordance with this Section 9.02 as indemnification if such
Covered Person is subsequently adjudicated by a court of competent jurisdiction
to have been liable to the LLC or the Unit Holders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's office.
Section 9.03. Indemnification Not Exclusive. The right of
indemnification hereby provided shall not be exclusive of or affect any other
rights to which any such Covered Person may be entitled. As used in this Article
IX, the term "Covered Person" shall include such person's heirs, executors and
administrators, and a "disinterested person" is a person against whom none of
the actions, suits or other proceedings in question or another action, suit or
other proceeding on the same or similar grounds is then or has been pending.
Nothing contained in this Article IX shall affect any rights to indemnification
to which personnel of the LLC, other than Managers and officers, and other
persons may be entitled by contract or otherwise under law, nor the power of the
LLC to purchase and maintain liability insurance on behalf of any such person.
Section 9.04. Unit Holders. In case any Unit Holder or former Unit
Holder shall be held to be personally liable solely by reason of his or her
being or having been a Unit Holder and not because of his or her acts or
omissions or for some other reason, the Unit Holder or former Unit Holder (or
his or her heirs, executors, administrators or other legal representatives or in
the case of a corporation or other entity, its corporate or other general
successor) shall be entitled to be held harmless from and indemnified against
all loss and expense arising from such liability.
ARTICLE X
MISCELLANEOUS
Section 10.01. Managers, Unit Holders, Etc. Not Personally Liable;
Notice. All Persons extending credit to, contracting with or having any claim
against the LLC shall look only to the assets of the LLC for payment under such
credit, contract or claim; and neither the Unit Holders, nor the Managers, nor
any of the LLC's officers, employees or agents, whether past, present or future,
shall be personally liable therefor. Nothing in this LLC Agreement shall protect
any Manager against any liability to which such Manager would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the office of
Manager.
Section 10.02. Manager's Good Faith Action, Expert Advice, No Bond or
Surety. The exercise by the Managers of their powers and discretions hereunder
shall be binding upon all
15
interested parties. A Manager shall be liable for his or her own willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Manager, and for nothing else, and
shall not be liable for errors of judgment or mistakes of fact or law. The
Managers may take advice of counsel or other experts with respect to the meaning
and operation of this LLC Agreement, and shall be under no liability for any act
or omission in accordance with such advice or for failing to follow such advice.
The Managers shall not be required to give any bond as such, nor any surety if a
bond is required.
Section 10.03. Liability of Third Persons Dealing with Managers. No
Person dealing with the Managers shall be bound to make any inquiry concerning
the validity of any transaction made or to be made by the Managers or to see to
the application of any payments made or property transferred to the LLC or upon
its order.
Section 10.04. Duration and Termination of LLC. (a) Unless terminated
as provided herein, the LLC shall terminate on August 8, 2025. The LLC may be
terminated at any time by the vote of the Required Unit Holders or by the
Managers by written notice to the Unit Holders.
(b) In the event of any voluntary or involuntary liquidation,
dissolution, or winding up of, or any distribution of the assets of, the LLC,
each Unit Holder shall be entitled to receive, after paying or making reasonable
provision for the creditors of the LLC as set forth in Section 18-804 of the
Act, ratably with each other Unit Holder, the amount set forth in Section 4.07.
Section 10.05. Filing of Copies, References, Headings. The original or
a copy of this LLC's Certificate of Formation and of each amendment thereto
shall be kept at the office of the LLC where it may be inspected by any Unit
Holder. The original or a copy of this LLC Agreement and of each amendment
hereto shall be kept at the office of the LLC where it may be inspected by any
Unit Holder. A copy of the Certificate of Formation, each amendment thereto,
this LLC Agreement and of each amendment hereto shall be filed by the Managers
with any governmental office where such filing may from time to time be
required. Anyone dealing with the LLC may rely on a certificate by any Manager
or an officer of the LLC as to whether or not any such amendments have been made
and as to any matters in connection with the LLC; and, with the same effect as
if it were the original, may rely on a copy certified by an officer of the LLC
to be a copy of the Certificate of Formation, any amendments thereto, this LLC
Agreement or of any such amendments. In this LLC Agreement and in any such
amendment, references to this LLC Agreement, and all expressions like "herein",
"hereof" and "hereunder", shall be deemed to refer to this LLC Agreement as
amended or affected by any such amendments. Headings are placed herein for
convenience of reference only and shall not be taken as a part hereof or control
or affect the meaning, construction or effect of this LLC Agreement.
Section 10.06. Tax Characterization and Returns. Solely with respect to
all periods prior to registration under the 1940 Act, it is the intention of
LuxCo that the LLC be disregarded for federal and all relevant state tax
purposes and that the activities of the LLC be deemed to be activities of the
Member for such purposes. All provisions of the Certificate of Formation and
this LLC Agreement are to be construed so as to preserve that tax status for
such period. Immediately upon registration under the 1940 Act, it is the
intention of LuxCo that the LLC will
16
be treated as a RIC for Federal and all relevant State tax purposes. The Manager
is hereby authorized to file any necessary elections with any tax authorities,
including an election to be taxed as an association at the time it registers
under the 1940 Act, and shall be required to file any necessary tax returns on
behalf of the LLC with any such tax authorities.
Section 10.07. Amendments. (a) Except as provided in paragraph (c) of
this Section 10.07, this LLC Agreement may be amended at any time by an
instrument in writing signed by a majority of the Managers when authorized so to
do by a vote of the Required Unit Holders.
(b) Amendments having the purpose of changing the name of the LLC or of
supplying any omission, curing any ambiguity or curing, correcting or
supplementing any defective or inconsistent provision contained herein shall not
require authorization by Unit Holder vote.
(c) No amendment may be made under this Section 10.07 which shall
amend, alter, change or repeal any of the provisions of Section 5.01 or this
paragraph (c) unless the amendment effecting such amendment, alteration, change
or repeal shall receive the affirmative vote or consent of the Unit Holders of
at least 66 2/3% of the Units then current and outstanding. Such affirmative
vote or consent shall be in addition to the vote or consent of the holders of
Units otherwise required by law or by the terms of any agreement between the LLC
and any national securities exchange.
SECTION 10.08. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE LAWS OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICTS OF
LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR CONSTRUCTION OF THIS
AGREEMENT TO THE LAW OF ANOTHER JURISDICTION.
SECTION 10.09. Severability. Except as otherwise provided in the
succeeding sentence, every term and provision of this LLC Agreement is intended
to be severable, and if any term or provision of this LLC Agreement is illegal
or invalid for any reason whatsoever, such illegality or invalidity shall not
affect the legality or validity of the remainder of this LLC Agreement. The
preceding sentence shall be of no force or effect if the consequence of
enforcing the remainder of this LLC Agreement without such illegal or invalid
term or provision would be to cause any party to lose the benefit of its
economic bargain.
SECTION 10.10. Counterparts. This LLC Agreement may be executed in any
number of counterparts, each of which shall be deemed an original.
SECTION 10.11. Consent to Jurisdiction Provision. Each Unit Holder, by
accepting any Units, and the Manager hereby (i) irrevocably submits to the
non-exclusive jurisdiction of any Delaware State court or Federal court sitting
in Wilmington, Delaware in any action arising out of this Agreement, and (ii)
consents to the service of process by mail. Nothing herein shall affect the
right of any party to serve legal process in any manner permitted by law or
affect its right to bring any action in any other court.
17
IN WITNESS WHEREOF, the undersigned has caused this Amended and
Restated Agreement of Limited Liability Company to be executed as of the
__ day of October, 2000.
ML SSG S.A X.X.,
as initial Unit Holder
By:
------------------------------
Name: Marc Van de Pol
Title: Statutory Manager
------------------------------
Xxxxxxx X. Xxxxxx, not in his
individual capacity, but
solely as Manager
18
EXHIBIT A
Investment Guidelines
GOVERNMENT SECURITIES DELAWARE, LLC
Investment Guidelines
On August 10, 2000, the LLC entered into a floating rate reverse
repurchase agreement to maturity (the "Reverse Repurchase Agreement") with
Xxxxxxx Xxxxx Government Securities, Inc. ("ML Government Securities") on
$1,002,500,000 fair market value, $1,000,000,000 face value of 6% coupon U.S.
Treasury Notes maturing on August 15, 2009 (the "Treasury Notes"). Under the
Reverse Repurchase Agreement, the LLC sold the Treasury Notes to ML Government
Securities for $1,002,500,000 and is obligated to repurchase the Treasury Notes
for $1,000,000,000 on August 15, 2009, but may repurchase the Treasury Notes
from ML Government Securities for the Notional Amount (defined below) plus
accrued interest on 5 days prior written notice (the "Repurchase Agreement
Termination Date"). Until the Repurchase Agreement Termination Date, the LLC
will make semi-annual floating rate payments to ML Government Securities equal
to the sum of $138,889 plus the rate of 6-month LIBOR less 109 basis points on
the outstanding Notional Amount. The Notional Amount will start at
$1,002,500,000 and will be reduced by the amount of the $138,889 semi-annual
fixed payments made by the LLC. The semi-annual fixed payments of $138,889 will
amortize the $2,500,000 premium paid for the Treasury Notes to $1,000,000,000 on
a straight-line basis over the term of the Reverse Repurchase Agreement. In
return, the LLC will receive semi-annual payments from ML Government Securities
equal to the interest payments received by ML Government Securities on the
Treasury Notes. These semi-annual payments will be netted against each other and
only the net amount will actually be paid.
The LLC used the proceeds from the Reverse Repurchase Agreement to
acquire the following notes (the "Notes"):
(i) $500,000,000 Xxxxxxx Xxxxx & Co., Inc. Floating Rate Note due August
15, 2009; and
(ii) $500,000,000 Xxxxxxx Xxxxx Capital Services, Inc. Floating Rate Note
due August 15, 2009.
The Note from Xxxxxxx Xxxxx & Co., Inc. ("ML & Co.") pays interest
semi-annually at the rate of 1-month LIBOR plus 7 basis points, compounded
monthly. The Note from Xxxxxxx Xxxxx Capital Services, Inc. ("ML Capital
Services") pays interest semi-annually at the rate of 1-month LIBOR plus 7 basis
points through September 15, 2000 and at the rate of 1-month LIBOR plus 8 basis
points thereafter. The Notes are subject to payment, in whole or in part, prior
to their scheduled maturity at the option of the LLC at any time. To ensure the
LLC's investments will match its operating and dividend needs, the LLC entered
into two swaps with ML Capital Services. Under the terms of the first swap, (the
"Daycount Swap"), the LLC will make payments calculated as 1-month LIBOR plus 7
basis points compounded monthly and paid semi-annually on $1,000,000,000 to ML
Capital Services and in return will receive semi-annual payments at a rate of
6-month LIBOR less 109 basis points on $1,000,000,000 plus a fixed payment on
the same amount at a rate of 1.15% per annum. The Daycount Swap will terminate
on August 15, 2009. Under the terms of Swap 2 (the "Amortizing Swap"), the LLC
will make fixed, semi-annual payments of $41,112 (the fixed payment in the first
period only will be $31,675) and in return will receive semi-annual payments
equal to 6-month LIBOR less 109 basis points on a notional amount that will
start at $2,500,000 and will amortize to approximately $138,889 on a
straight-line basis over the term of the Amortizing Swap. The Amortizing Swap
will terminate on August 15, 2009.
As of the date of the LLC Agreement, the LLC's investments are
concentrated exclusively in the Reverse Repurchase Agreement, the Daycount Swap,
the Amortizing Swap, the Notes, and cash.
The LLC may, without notice to Unit Holders, invest in assets other
than the Daycount Swap, the Amortizing Swap, the Reverse Repurchase Agreement
and the Notes (the "New Investments"). The New Investments may consist of:
o cash or cash equivalents;
o obligations issued by the U.S. Treasury, or guaranteed by
the U.S. Government with a maturity on or before August 17, 2009;
o obligations issued or guaranteed by U.S. Federal Agencies
with a maturity on or before August 17, 2009;
o commercial paper with a maturity of less than 180 days;
o repurchase agreements with a maturity on or before August
17, 2009 collateralized such that the market value of the
collateral, when marked to market, must be equal to or greater
than 100% of any xxxx on the repurchase agreements;
o corporate bonds and notes, and medium-term notes with a
maturity on or before August 17, 2009;
o money market mutual funds with a minimum $1 billion
average asset size for the previous twelve months; and
o security lending agreements on U.S. Government and/or U.S.
Federal Agency securities with a maturity on or before August 17,
2009 collateralized such that the market value of the collateral,
when marked to market, must be equal to or greater than 100% of
any xxxx on the security lending agreements.
For the New Investments, the minimum short term debt rating of money
market instruments or other instruments with a maturity less than one year is
Tier One and the minimum long term debt rating for all other instruments is
single-A by at least two Nationally Recognized Statistical Rating Organizations.
For repurchase agreements or security lending agreements, the minimum long term
debt rating of any counterparty is single-A by at least two Nationally
Recognized Statistical Rating Organizations.
Other than investments in cash and cash items, securities of the U.S.
Government or U.S. federal agencies and securities of other RICs, the LLC's
investment in the securities of any one issuer (or of two or more issuers which
the Company controls and which are determined to be in the same or similar
trades or businesses) may not exceed 25% of the aggregate market value of the
LLC's gross assets, and the LLC's investment in any one issuer may not
constitute more than 10% of the outstanding securities of that issuer.
EXHIBIT B
Form of
Certificate of Interest
THIS CERTIFICATE OF INTEREST HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
OF INTEREST WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF APPLICABLE STATE
SECURITIES LAWS. IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE IV OF THE LLC
AGREEMENT REFERRED TO HEREIN, THIS CERTIFICATE OF INTEREST MAY NOT BE
TRANSFERRED BY ANY PERSON WITHOUT THE PRIOR CONSENT OF THE MANAGERS OF THE LLC,
WHICH CONSENT MAY BE WITHHELD IN THE SOLE DISCRETION OF THE MANAGERS.
GOVERNMENT SECURITIES DELAWARE, LLC
CERTIFICATE OF BENEFICIAL INTEREST
Certificate No: _______
Number of Units: _______
This certifies that ____________________________ is the registered owner of the
above indicated Units in Government Securities Delaware, LLC (the "LLC"), a
Delaware limited liability company organized and existing under the Delaware
Limited Liability Company Act, 6 Del. Code ss. 18-101, et seq. (the "Act").
This CI is issued under and is subject to the terms, provisions and conditions
of the Amended and Restated Agreement of Limited Liability Company of the LLC
dated as of October __, 2000 (the "LLC Agreement"). Capitalized terms used and
not otherwise defined herein have the meanings set forth in the LLC Agreement.
This CI does not represent an obligation of, or an interest in, any Unit Holder
or the Manager, and the CIs are not insured or guaranteed by any governmental
agency.
By virtue of having purchased or otherwise acquired this CI, the holder of this
CI shall be deemed to have expressly consented and agreed to be bound by the
terms of the LLC Agreement. The ownership of each CI shall be recorded in the
books of the LLC or any transfer or similar agent of the LLC, which shall be
conclusive as to the identity of the Unit Holders.
In the event of any voluntary or involuntary liquidation, dissolution, or
winding up of, or any distribution of the assets of, the LLC, each Unit Holder
shall be entitled to receive, after paying or making reasonable provision for
the creditors of the LLC as set forth in Section 18-804 of the Act, ratably with
each other Unit Holder, its Net Asset Value. The holders of Units shall be
entitled to vote only on such matters as are set forth in the LLC Agreement.
The Managers may, but need not, distribute to each Unit Holder, out of the
income of the LLC, a semi-annual dividend (each, a "Dividend") providing a
return equal to a rate per annum of 7.1215%, calculated on the basis of a 360
day year of twelve 30-day months, on the Par Value of each Unit owned by such
Unit Holder; provided, however, that such distribution is not otherwise in
violation of Sections 18-607 or 18-804 of the Act. The Managers shall have full
discretion to determine whether a Dividend shall be distributed and their
determination shall be binding upon the Unit Holders. Distribution of such
Dividends, if any be made, shall be made on each February 15 and August 15, or
if such day is not a Business Day, on the next succeeding Business Day (each
such date, a "Payment Date"). If the Managers do not distribute a Dividend on a
Payment Date, such Dividend shall accumulate, without interest, until
distributed.
In addition to the foregoing, at any time and from time to time in their
discretion, the Managers may distribute to the Unit Holders as of a record date
or dates determined by the Managers, in cash or otherwise, all or part of any
gains realized on the sale or disposition of property or otherwise, or all or
part of any other principal or income of the LLC; provided, however, that such
distributions are not otherwise in violation of Sections 18-607 or 18-804 of the
Act.
All beneficial interests, and therefore all CIs, shall be personal property
entitling the Unit Holders only to those rights provided in the LLC Agreement.
The legal ownership of the LLC assets is vested exclusively in the LLC as
provided in the LLC Agreement, and the Unit Holders shall have no interest
therein other than the beneficial interest in the LLC conferred by their
ownership of Units and shall have no right to compel any partition, division, or
other type of distribution of the LLC or any of the LLC assets. The death of a
Unit Holder shall not terminate the LLC or give such Unit Holder's legal
representative any rights against other Unit Holders, the LLC or the LLC assets.
The Units and CIs are transferable only in accordance with the provisions of the
LLC Agreement.
IN WITNESS WHEREOF, at least one of the Managers, on behalf of the LLC have
caused this CI to be duly executed.
GOVERNMENT SECURITIES DELAWARE, LLC
By: _______________________________, but solely as Manager
Name:
2
