EXHIBIT 10.1
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
XXXXXXX XXXXX GLOBAL TACTICAL TRADING, LLC
Dated as of January 1, 2003
TABLE OF CONTENTS
ARTICLE 1. FORMATION AND NAME......................................1
ARTICLE 2. REGISTERED OFFICE.......................................1
ARTICLE 3. BUSINESS................................................2
ARTICLE 4. TERM OF DISSOLUTION AND FISCAL YEAR.....................2
Section 4.1 Term....................................................2
Section 4.2 Dissolution.............................................2
Section 4.3 Fiscal Year.............................................3
Section 4.4 Net Assets; Valuation...................................3
Section 4.5 Management Fees.........................................3
ARTICLE 5. CAPITAL CONTRIBUTIONS AND UNITS OF LIMITED LIABILITY
COMPANY INTEREST........................................3
Section 5.1 Contribution of the Managing Member.....................3
Section 5.2 Issuance of Units.......................................3
Section 5.3 Limited Liability of Members............................4
Section 5.4 Continuous Offering.....................................4
Section 5.5 Treatment of Subscription Proceeds......................4
Section 5.6 Compliance with Applicable Law..........................5
Section 5.7 Termination of Offering.................................5
Section 5.8 Return of Member's Capital Contribution.................5
Section 5.9 Adjustment to Number of Units Issued....................5
ARTICLE 6. ALLOCATION OF PROFITS AND LOSSES........................5
Section 6.1 Definitions.............................................5
Section 6.2 Capital Accounts........................................6
Section 6.3 NAV of a Series and of Units............................6
Section 6.4 Membership Percentages..................................6
Section 6.5 Allocation of Net Capital Appreciation or Net Capital
Depreciation............................................6
Section 6.6 Allocation of Profit and Loss for Federal Income Tax
Purposes................................................7
ARTICLE 7. MANAGEMENT OF THE COMPANY...............................8
Section 7.1 Duties..................................................8
Section 7.2 Trading Policies........................................9
Section 7.3 Books and Records.......................................9
Section 7.4 Managing Member's Activities............................9
Section 7.5 Managing Member's Authority.............................9
Section 7.6 Liability of the Managing Member........................9
Section 7.7 Expenses...............................................10
Section 7.8 Distributions..........................................10
ARTICLE 8. AUDITS AND REPORTS TO MEMBERS..........................10
ARTICLE 9. ASSIGNABILITY AND REDEMPTION OF UNITS..................10
Section 9.1 Assignability..........................................10
Section 9.2 Redemptions............................................10
ARTICLE 10. SPECIAL POWER OF ATTORNEY..............................12
ARTICLE 11. WITHDRAWAL OF A MEMBER/REMOVAL OF THE MANAGING MEMBER..13
Section 11.1 Withdrawal of a Managing Member........................13
Section 11.2 Withdrawal of a Non-Managing Member....................13
Section 11.3 Removal of the Managing Member.........................13
ARTICLE 12. NO PERSONAL LIABILITY FOR RETURN OF CAPITAL............13
ARTICLE 13. INDEMNIFICATION........................................13
ARTICLE 14. AMENDMENTS; MEETINGS...................................14
Section 14.1 Amendments.............................................14
Section 14.2 Meetings...............................................14
ARTICLE 15. ACCESS TO COMPANY RECORDS..............................15
ARTICLE 16. GOVERNING LAW..........................................15
ARTICLE 17. MISCELLANEOUS..........................................15
Section 17.1 Priority Among Non-Managing Members....................15
Section 17.2 Each Interest in the Company is a Security.............15
Section 17.3 Notices................................................15
Section 17.4 Binding Effect.........................................16
Section 17.5 Captions...............................................16
XXXXXXX SACHS GLOBAL TACTICAL TRADING, LLC
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this
"Agreement"), effective as of January 1, 2003, by and between Xxxxxxx Xxxxx
Princeton LLC, a limited liability company formed under the laws of the
State of Delaware (the "Managing Member"), and each other party who shall
execute this Agreement, whether in counterpart, by separate instrument,
power of attorney or otherwise as a member (collectively, "Non-Managing
Members") (the Managing Member and the Non-Managing Members being
collectively referred to herein as the "Members").
ARTICLE 1.
FORMATION AND NAME
Certain of the parties hereto formed a limited partnership under the
Delaware Revised Uniform Limited Partnership Act (the "Partnership Act").
The name of the limited partnership was The Directors Fund Limited
Partnership (the "Partnership"). Pursuant to the Partnership Act and the
Delaware Limited Liability Company Act (the "Act"), the Partnership was
converted into a limited liability company named Xxxxxxx Sachs Global
Tactical Trading Partners, LLC (the "Company") upon the filing of a
Certificate of Conversion and Certificate of Formation with the Secretary
of State of the State of Delaware. Pursuant to the Seventh Amended and
Restated Limited Partnership Agreement of the Partnership (the "Partnership
Agreement"), the Partnership Agreement has been amended and restated in its
entirety by this Agreement. In connection with the conversion, each Class B
Unit (as defined in the Partnership Agreement) of the Partnership was
converted into ten Units (as defined below) of the Company.
The Managing Member may, without the approval of the Non-Managing
Members, change the name of the Company. The Managing Member shall execute
all such instruments and shall execute, file, record and publish as
appropriate such amendments, assumed name certificates, and other documents
and do any and all other acts and things as are or become necessary or
advisable as required by the Act or otherwise as determined by the Managing
Member. Each Non-Managing Member hereby undertakes, in addition to the
Power of Attorney provided pursuant to Article 10 hereof, to cooperate with
the Managing Member in, and furnish the Managing Member with all
information necessary for the Managing Member to proceed with the filing,
recording or publishing of such documents as the Managing Member may
request.
ARTICLE 2.
REGISTERED OFFICE
The address of the Managing Member and the Company's principal office
shall be at 000 Xxxxx Xxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, or such
other place as the Managing Member may designate from time to time.
ARTICLE 3.
BUSINESS
The objective of the Company is to seek attractive long-term risk
adjusted returns by allocating its assets (directly or through other
entities) to, or investing in entities managed by, independent investment
managers (collectively, the "Advisors") that employ strategies primarily
within the tactical trading sector. The Advisors utilize a broad range of
alternative investment strategies to invest the Company's assets in a
diversified portfolio composed primarily of futures contracts, forward
contracts, physical commodities, options on futures and on physical
commodities and other derivative contracts on foreign currencies, financial
instruments, stock indices, and other financial market indices, metals,
grains and agricultural products, petroleum and petroleum derivatives,
livestock and meats, oil seeds, tropical products and softs (collectively,
"Futures"). The Company also engages, directly or indirectly, in the
speculative trading of securities, including, but not limited to, equity
and debt securities and options, high yield securities, emerging market
securities and other security interests (collectively, "Securities"). All
speculative trading on behalf of the Company is conducted by the Advisors.
Those Advisors that trade Securities may do so on a cash basis or using
options. Certain Advisors may utilize other investment media, such as swaps
and other derivatives (collectively, "Other Investments"). The Advisors
generally trade Futures and Securities on behalf of the Company on
commodities and securities exchanges worldwide as well as in the interbank
foreign currency forward market and various other over-the-counter markets.
The Company will, directly or indirectly, allocate its assets to Advisors
(i) pursuant to discretionary investment management agreements, (ii)
through investments in investment funds, or (iii) through investments in
separate limited liability companies or other entities managed or formed by
the Managing Member or one of its affiliates.
ARTICLE 4.
TERM OF DISSOLUTION AND FISCAL YEAR
Section 4.1 Term. The term of the Company commenced upon the filing of
the Certificate of Formation in the office of the County Clerk in the State
of Delaware and shall end upon the first to occur of the following: (i)
December 31, 2019; (ii) receipt by the Managing Member of an election to
dissolve the Company at a specified time by Non-Managing Members owning
more than seventy-five percent (75%) of each class of units of limited
liability company interests (all such classes being collectively referred
to as the "Units") then outstanding, notice of which is sent by registered
mail to the Managing Member not less than ninety (90) days prior to the
effective date of such dissolution; (iii) the withdrawal, expulsion,
insolvency, or dissolution of the Managing Member (unless a new managing
member has been substituted pursuant to Article 14); or (iv) the occurrence
of any event which shall make it unlawful for the existence of the Company
to be continued.
Section 4.2 Dissolution. Upon the occurrence of an event causing the
termination of the Company, the Company shall terminate and be dissolved.
Dissolution, payment of creditors, and distribution of the Company's assets
shall be effected as soon as practicable in accordance with the Act. The
Managing Member and each Non-Managing Member shall share in the assets of
the Company pro rata in accordance with such Member's respective interests
in the Company (determined on the basis of the capital accounts established
as set forth in this Agreement), less any amount owing by such Member to
the Company.
Section 4.3 Fiscal Year. The fiscal year of the Company shall be
determined by the Managing Member in accordance with the requirements of
the Internal Revenue Code, as amended (the "Code").
Section 4.4 Net Assets; Valuation. The net assets ("Net Assets") of
the Company are its assets less its liabilities determined in accordance
with United States generally accepted accounting principles consistently
applied, including any unrealized profits and losses on open Futures,
Securities and Other Investments (Futures, Securities and other Investments
being collectively referred to herein as "Instruments"). The market value
of an Instrument traded on a United States or foreign exchange shall be
based upon the settlement price reported by such exchange for the relevant
valuation date; provided, that if an Instrument could not be liquidated for
any reason on the day with respect to which Net Assets are being
determined, the settlement price shall be either the settlement price
determined on the last day on which the Instrument could be liquidated, or
such other value as the Managing Member may deem fair and reasonable. The
market value of an Instrument not traded on a United States or foreign
exchange shall be its market value as determined by the Managing Member on
a basis consistently applied.
Section 4.5 Management Fees. In consideration for services rendered as
Managing Member of the Company, the Company hereby agrees to pay to the
Managing Member, in arrears, a monthly management fee and administration
fee based on the Net Assets of the Company as of each month end,
appropriately adjusted to reflect capital appreciation or depreciation and
any subscriptions or redemptions. For purposes of determining the
management fee, Net Assets shall not be reduced to reflect any accrued
Incentive Allocation, and for purposes of determining the administration
fee, Net Assets shall not be reduced to reflect any accrued Incentive
Allocation or management fee. The management and administration fee rates
for each series of Units will be the rate as set forth in the most recent
applicable Private Placement Memorandum (each, a "Memorandum") for Units.
ARTICLE 5.
CAPITAL CONTRIBUTIONS AND UNITS OF
LIMITED LIABILITY COMPANY INTEREST
Section 5.1 Contribution of the Managing Member. The Managing Member
will contribute to the Company such services and/or cash as it may
determine in its sole discretion from time to time.
Section 5.2 Issuance of Units. Interests in the Company, other than
those of the Managing Member, shall be evidenced by Units and may be
evidenced by different classes or series of Units as determined by the
Managing Member in its sole discretion. The Company may, but is not
required to, continue to offer Units pursuant to the Memorandum as of the
beginning of any calendar quarter or at such other time as the Managing
Member, in its sole discretion, determines to offer Units; provided, that
such offer and any related sales do not conflict with the exemptions from
registration for non-public offerings under the Securities Act of 1933, as
amended. The Managing Member on behalf of the Company shall issue Units to
persons desiring to become Non-Managing Members; provided that such persons
are determined by the Managing Member to meet the criteria for subscribers
in each series of Units as set forth in the Memorandum; and provided
further, that their subscriptions for Units are accepted by the Managing
Member, which acceptance the Managing Member may withhold in its sole
discretion. The minimum subscription for Units shall be as set forth in the
Memorandum or such other amount as the Managing Member may determine from
time to time in its sole discretion. Capital contributions to the Company
shall be made upon execution and acknowledgment of subscription documents
in form and substance satisfactory to the Managing Member. Each newly
accepted Member shall contribute to the capital of the Company either cash
or other property acceptable to the Managing Member in its sole discretion
equal to $100 per Unit. Notwithstanding the foregoing, the Managing Member
may issue additional Units of an existing series or Units of a new series
at a purchase price other than $100 per Unit, provided that any such
issuance does not have a material adverse effect on the NAV (as defined
below) or Prior High NAV (as defined in Section 6.5) of Units of any
Member. At the end of each fiscal year, any issued and outstanding series
of Units that is at or above its Prior High NAV per Unit (other than the
series of Units issued in connection with the initial offering of Units
(the "Initial Series")) will be exchanged (after payment of the management
fee, the administration fee and any Incentive Allocation (as defined in
Section 6.5) to the Managing Member) into Units of the Initial Series (or
if the Initial Series is not at or above its Prior High NAV per Unit, the
next offered series that is at or above its Prior High NAV) at the
prevailing NAV per Unit of such series.
Section 5.3 Limited Liability of Members. Each Unit, when purchased by
a Member, shall be fully paid and non-assessable. No Member shall be liable
for the Company's obligations in excess of such Member's unredeemed capital
contribution and his share of undistributed profits, if any. No additional
contributions of capital or property are or shall be required of any Member
during the term of the Company. The Company shall not make a claim against
a Member with respect to amounts distributed to such Member or amounts
received by such Member upon redemption for Units unless the assets of the
Company are insufficient to discharge liabilities of the Company that arose
before the payment of such amounts.
Section 5.4 Continuous Offering. The Managing Member may, at any time
and from time to time in its sole discretion, elect to raise additional
capital for the Company from Non-Managing Members and from new subscribers
on such terms and conditions as may be determined by the Managing Member in
its sole discretion.
Section 5.5 Treatment of Subscription Proceeds. Subscription funds
received by the Managing Member prior to the acceptance of such subscriber
as a Non-Managing Member or prior to the first business day of the month
shall be placed in an escrow account and shall not be contributed to the
capital of the Company prior to the later of the Managing Member's
acceptance of the subscription or the first business day of the month. If
the subscription is accepted by the Managing Member, the proceeds thereof
shall be contributed to the capital of the Company. A subscriber for Units
during any offering of Units shall become a Non-Managing Member when such
subscriber's admission to the Company is reflected in the records of the
Company, or otherwise as provided in the Act. All interest earned on
subscriptions while held in escrow, will be paid to the Managing Member.
Section 5.6 Compliance with Applicable Law. In connection with the
Company's continuous offering of Units as described in the Memorandum, the
Managing Member, on behalf of the Company, shall comply with all applicable
laws, rules and regulations.
Section 5.7 Termination of Offering. The Managing Member, in its sole
discretion, is authorized at any time, to terminate and discontinue any
offering of Units, in whole or in part or in respect of any particular
jurisdiction.
Section 5.8 Return of Member's Capital Contribution. Except to the
extent that a Non-Managing Member shall have the right to withdraw capital
through redemption of Units pursuant to the terms of this Agreement, no
Non-Managing Member shall have any right to demand the return of his
capital contribution or any profits added thereto, except, to the extent
available, upon termination and dissolution of the Company. In no event
shall a Non-Managing Member be entitled to demand to receive property other
than cash.
Section 5.9 Adjustment to Number of Units Issued. If at any time the
Managing Member determines, in its sole discretion, that an incorrect
number of Units was issued to a Member because the NAV in effect on the
date of issuance was materially incorrect, the Company will adjust such
Member's Units by increasing or decreasing them, as appropriate, to such
number of Units as would have been issued at the correct NAV.
ARTICLE 6.
ALLOCATION OF PROFITS AND LOSSES
Section 6.1 Definitions. For the purposes of this Agreement, unless
the context otherwise requires:
(a) The term "Net Capital Appreciation" refers to the increase in the
value of the Company's Net Assets, including realized and unrealized gains,
from the beginning of each accounting period to the end of such accounting
period (net of all Company expenses, including accrued management fees and
administration fees, but before giving effect to capital contributions,
distributions and withdrawals), and with respect to any fiscal year of the
Company or other period used to determine the Incentive Allocation, refers
to aggregate Net Capital Appreciation for such period less aggregate Net
Capital Depreciation for such period.
(b) The term "Net Capital Depreciation" refers to the decrease in the
value of the Company's Net Assets, including realized and unrealized
losses, from the beginning of each accounting period to the end of such
accounting period (net of all Company expenses, including accrued
management fees and administration fees, but before giving effect to
capital contributions, distributions and withdrawals).
Section 6.2 Capital Accounts.
(a) A separate Capital Account shall be established on the books of
the Company for each Member with respect to each series of Units held by
such Member. Each Member's Capital Account with respect to a series of
Units shall equal the NAV of such series times the Member's Membership
Percentage (as defined in Section 6.4) with respect to such series of
Units.
(b) The Managing Member shall have a separate Capital Account, which
shall initially be equal to zero, and which shall be (A) increased by any
Incentive Allocation at the time such Incentive Allocation is made, and (B)
decreased to reflect the amount of any distributions made to the Managing
Member in respect of such Incentive Allocation.
Section 6.3 NAV of a Series and of Units.
(a) The net asset value ("NAV") of each series of Units shall
initially be an amount equal to the initial capital contributions with
respect to such series. The NAV of a series shall be (i) increased as of
the beginning of each calendar month to reflect any additional capital
contributions pursuant to Section 5.2 in respect of such series, (ii)
increased as of the end of each calendar month to reflect the Net Capital
Appreciation of such series, (iii) decreased as of the beginning of each
calendar month to reflect the redemption of any Units of such series
pursuant to Section 9.2, (iv) decreased as of the end of each calendar
month to reflect the amount of any distributions pursuant to Section 7.8 in
respect of such series; (v) decreased for any Incentive Allocation pursuant
to Section 6.5(b) in respect of such series; and (vi) decreased as of the
end of each calendar month to reflect the Net Capital Depreciation of such
series.
(b) At the time of the conversion of any series of Units into Units of
the Initial Series or any other series of Units pursuant to Section 5.2,
the NAV of the converted series of Units shall be reduced to zero, and the
NAV of the series of Units into which such Units were converted shall be
increased by the NAV of the converted series of Units immediately prior to
the conversion.
(c) The NAV per Unit of a series shall be equal to the NAV of such
series divided by the number of outstanding Units of such series.
Section 6.4 Membership Percentages. A Membership Percentage shall be
determined for each Member for any given series of Units for each monthly
period of the Company by dividing the number of Units owned by such Member
within a given series by the aggregate number of outstanding Units of such
series as of the beginning of such month. The aggregate Membership
Percentages for each series of Units shall equal 100 percent.
Section 6.5 Allocation of Net Capital Appreciation or Net Capital
Depreciation.
(a) Any Net Capital Appreciation or Net Capital Depreciation, as the
case may be, for a calendar month shall be allocated among the different
series of Units pro rata in accordance with the relative NAV of each series
of Units at the beginning of such period (without reduction for any accrued
and unallocated Incentive Allocation).
(b) (i) At the end of each fiscal year of the Company, or at such
other date during a fiscal year as of which the following determination is
required pursuant to this Section 6.5, five percent (5%) of the amount by
which the NAV of a series of Units (determined prior to any applicable
Incentive Allocation accrual with respect to such series of Units and
appropriately adjusted as determined by the Managing Member in its sole
discretion for contributions, distributions and redemptions but after
giving effect to the allocation, pursuant to Section 6.5(a), of Net Capital
Appreciation and Net Capital Depreciation for the period then ending)
exceeds such series' Prior High NAV at such date, shall be reallocated to
the Capital Account of the Managing Member (the "Incentive Allocation").
The "Prior High NAV" with respect to a series of Units initially shall mean
an amount equal to the NAV of such series as of the date of its initial
issue. The new Prior High NAV with respect to a series of Units immediately
following the end of any period for which an Incentive Allocation has been
made with respect to such series shall be reset to equal the NAV of such
series, unless the series is exchanged pursuant to Section 5.2 into the
Initial Series or another series, in which case the new Prior High NAV
shall be reset to equal the NAV of the Initial Series or other series. If
the NAV of such series at the end of any fiscal year of the Company, and
such other date during a fiscal year as of which the determination of the
Incentive Allocation is required pursuant to Section 6.5(c) is less than
its Prior High NAV, the Prior High NAV of that series shall not change. The
Prior High NAV for each series of Units shall be appropriately adjusted as
determined by the Managing Member in its sole discretion to account for
contributions, distributions and redemptions made with respect to such
series of Units.
(ii) The Incentive Allocation with respect to a series of Units
accrues daily and the Company shall credit the Capital Account of the
Managing Member as of December 31 of each year for the Incentive Allocation
out of the Capital Accounts of the Members who hold Units of such series.
(c) In the event that the Company is dissolved other than at the end
of a fiscal year, or the effective date of a Member's redemption of Units
is other than a fiscal year-end, then the Incentive Allocation described
above shall be determined and made as if such date were a fiscal year-end.
(d) The Managing Member will make appropriate adjustments to the
Capital Accounts and allocations in the event of intra-month subscriptions
or redemptions or in the event of the creation of a series of Units with
different fee or incentive-based compensation structures.
Section 6.6 Allocation of Profit and Loss for Federal Income Tax
Purposes. For each fiscal year, items of income, deduction, gain, loss or
credit shall be allocated for income tax purposes among the Members in such
manner as to reflect equitably amounts credited or debited to each Member's
Capital Account for the current and prior fiscal years (or relevant
portions thereof). Allocations shall be made pursuant to the principles of
Sections 704(b) and 704(c) of the Code, and in conformity with Regulations
Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(4)(i) and 1.704-3 promulgated
thereunder, as applicable or the successor provisions to such Sections and
Regulations. Notwithstanding anything to the contrary in this Agreement,
there shall be allocated to the Members such gains or income as shall be
necessary to satisfy the "qualified income offset" requirement of
Regulations Section 1.704-1(b)(2)(ii)(d).
If the Company realizes capital gains (including short-term capital
gains) for federal income tax purposes ("Gains") for any fiscal year as of
the end of which one or more Positive Basis Members (as hereinafter
defined) withdraw from the Company pursuant to Article 9, the Managing
Member may elect to allocate such gains as follows: (i) to allocate such
gains among such Positive Basis Members, pro rata in proportion to the
respective Positive Basis (as hereinafter defined) of each such Positive
Basis Member, until either the full amount of such gains shall have been so
allocated or the Positive Basis of each such Positive Basis Member shall
have been eliminated, and (ii) to allocate any gains not so allocated to
Positive Basis Members to the other Members in such manner as shall
equitably reflect the amounts credited to such Member's Capital Accounts
pursuant to Section 6.2.
As used herein, (i) the term "Positive Basis" shall mean, with respect
to any Member and as of any time of calculation, the amount by which its
interest in the Company as of such time exceeds its "adjusted tax basis,"
for Federal income tax purposes, in its interest in the Company as of such
time (determined without regard to any adjustments made to such "adjusted
tax basis" by reason of any transfer or assignment of such interest,
including by reason of death), and (ii) the term "Positive Basis Member"
shall mean any Member who withdraws from the Company and who has Positive
Basis as of the effective date of its withdrawal, but such Member shall
cease to be a Positive Basis Member at such time as it shall have received
allocations pursuant to clause (i) of the preceding sentence equal to its
Positive Basis as of the effective date of its withdrawal.
ARTICLE 7.
MANAGEMENT OF THE COMPANY
Section 7.1 Duties. The Managing Member, to the exclusion of all Non-
Managing Members, shall conduct and manage the business of the Company. No
Non-Managing Members shall have the power to represent, act or, sign for or
bind the Managing Member or the Company. No Non-Managing Member shall be
entitled to any salary, draw or other compensation from the Company on
account of his investment in the Company. The Managing Member shall execute
various documents on behalf of the Company and the Members pursuant to
powers of attorney and supervise the liquidation of the Company if an event
causing termination of the Company occurs. In the event that the Managing
Member has been removed or liquidated or become bankrupt or insolvent, the
majority of the Non-Managing Members may elect a representative to
supervise the liquidation of the Company.
In order to facilitate the foregoing, each Non-Managing Members shall,
by his acceptance hereof, be deemed to execute a power of attorney as
described in Article 10.
The Managing Member is hereby authorized to perform all other duties
imposed by Sections 6221 through 6233 of the Code as "tax matters partner"
of the Company, including (but not limited to) the following: (a) the power
to conduct all audits and other administrative proceedings with respect to
Company tax items; (b) the power to extend the statute of limitations for
all Non-Managing Members with respect to Company tax items; (c) the power
to file a petition with an appropriate federal court for review of a final
Company administrative adjustment; and (d) the power to enter into a
settlement with the Internal Revenue Service (the "Service") on behalf of,
and binding upon, those Non-Managing Members having less than 1% interest
in the Company unless a Non-Managing Member notifies the Service and the
Managing Member that the Managing Member may not act on his behalf.
Section 7.2 Trading Policies. The Managing Member shall require the
Company to follow such trading policies as the Managing Member determines
from time to time, in its sole discretion, are in the best interests of the
Company.
Section 7.3 Books and Records. The Managing Member shall keep at the
principal office of the Company such books and records relating to the
business of the Company as it deems necessary or advisable or as are
required by the Commodity Exchange Act of 1974, as amended (the "CEA"), and
the rules and regulations thereunder.
Section 7.4 Managing Member's Activities. The Managing Member may take
such actions as it deems necessary or desirable to manage the business of
the Company including, but not limited to, the following: opening bank
accounts; entering into advisory agreements with Advisors and brokerage
agreements with brokers; paying, or authorizing the payment of,
distributions to the Members and expenses of the Company such as profit
share allocations, incentive or management fees (if any) to Advisors,
brokerage commissions, transaction fees, selling commissions, service fees,
legal and accounting fees, printing and reprinting fees and registration
and other fees of governmental agencies; and investing or directing the
investment of funds of the Company not being utilized as margin deposits.
The Managing Member shall devote such time to the Company's affairs as
shall be required to effectively manage the business and affairs of the
Company. The Managing Member may engage in other business activities and
shall not be required to refrain from any other activity or disgorge any
profits from any such activity. The Managing Member may engage and
compensate, on behalf of the Company and from Company funds, such persons,
firms or corporations, including any person or entity affiliated with the
Managing Member or any other person or entity, as the Managing Member in
its sole judgment shall deem advisable for the conduct and operation of the
business of the Company. The Managing Member may contract with any person
or entity legally qualified to sell Units.
Section 7.5 Managing Member's Authority. No person dealing with the
Managing Member shall be required to determine the Managing Member's
authority to make any undertaking on behalf of the Company, nor to
determine any fact or circumstance bearing upon the existence of such
authority.
Section 7.6 Liability of the Managing Member. The Managing Member, its
affiliates and their respective partners, members, employees, officers,
directors, managing members, and shareholders shall not be liable,
responsible, or accountable in damages or otherwise to the Company or to
any of the Members, or their respective successors or assigns, except by
reason of acts of, or omissions due to, gross negligence, misconduct or
breach of its fiduciary obligation, and for not having acted in good faith
in the reasonable belief that its actions were in, or not opposed to, the
best interests of the Company. The Managing Member and its affiliates shall
not be liable to the Company or any Non-Managing Member (or any assignee)
for any actions entitled to indemnity within the scope of Article 13.
Section 7.7 Expenses. The Company pays its ongoing administrative and
offering expenses, including, but not limited to, custodial, legal,
accounting, auditing, tax, printing, filing and reporting expenses, and any
extraordinary expenses incurred from time to time.
Section 7.8 Distributions. The Managing Member shall have sole
discretion in determining what distributions (other than for redemption of
Units), if any, the Company will make to its Members.
ARTICLE 8.
AUDITS AND REPORTS TO MEMBERS
The Company books shall be audited annually by an independent
certified public accountant selected by the Managing Member. The Managing
Member shall calculate the Net Assets and Net Asset Value per Unit from
time to time and shall make such information available to any Non-Managing
Member upon request. The Company shall use reasonable efforts to cause each
Member to receive: (i) as soon as possible after the close of each fiscal
year such tax information with respect to the Company as is necessary for
the Member to complete his federal income tax return; and (ii) such other
annual, quarterly and monthly information as may be required by applicable
laws, rules and regulations. No assurances can be given, however, that such
information will be available by such date.
In addition, if any of the following events occurs, notice of such
event shall be mailed to each Non-Managing Member within 21 days after the
occurrence of the event: (i) the withdrawal of the Managing Member; and
(ii) any change in the Company's fiscal year.
ARTICLE 9.
ASSIGNABILITY AND REDEMPTION OF UNITS
Section 9.1 Assignability. Without the prior written consent of the
Managing Member, which may be withheld in its sole and absolute discretion,
with or without cause, a Non-Managing Member may not pledge, transfer or
assign any of its Units in whole or in part to any person except by
operation of law pursuant to the death, bankruptcy, dissolution, corporate
reorganization or merger of a Member, nor substitute any other person as a
Member. Any attempted pledge, transfer, assignment or substitution not made
in accordance with this Section 9.1 will be void. No assignee or transferee
shall become a substituted Non-Managing Member unless with the consent of
the Managing Member, in its sole discretion and on such terms as the
Managing Member may designate.
Section 9.2 Redemptions. A Non-Managing Member may withdraw from the
Company all or, subject to the Managing Member's sole and absolute
discretion, any part, of his capital contributions and undistributed
profits, if any, as of the time immediately prior to the opening of
business on January 1 or July 1 of each year (each, a "Redemption Date").
Redemptions will only be made if, at the time of such redemption (i) all
liabilities, contingent or otherwise, of the Company, except any liability
to Members on account of their capital contributions, have been paid or
there remains property of the Company sufficient to pay them and (ii) the
Managing Member shall have timely received written notice from the
redeeming Non-Managing Member on or before the 60th day prior to such
Redemption Date (unless such notice is waived by the Managing Member in its
sole discretion). The Managing Member may, in its sole discretion, permit
redemption of partial Units. A Non-Managing Member may only make a partial
redemption of Units in amounts greater than $250,000. Notwithstanding the
foregoing, the Managing Member may, in its sole discretion, expressly waive
any or all of the foregoing conditions. The Managing Member may also, in
its sole discretion, declare additional redemption dates (each, an
"Additional Redemption Date") with respect to any Non-Managing Member, with
or without notice to all the Non-Managing Members; provided, however, that
prior to declaring such Additional Redemption Date, the Managing Member
will consult with counsel to the Fund to ensure that the additional
redemption will not cause the Fund to be taxable as a corporation.
Units of a particular series will be redeemed at a per Unit price (the
"Redemption Price") based upon the NAV of such series as of the close of
business on the day immediately preceding any applicable Redemption Date or
Additional Redemption Date (taking into account the allocation of any Net
Capital Appreciation or Net Capital Depreciation for the calendar month or
intra-month period then ending), after reduction for any Incentive
Allocation, management fee, administration fee and other liabilities of the
Company to the extent accrued or otherwise attributable to the Units being
redeemed (calculated as if the Redemption Date or Additional Redemption
Date, as applicable, were the last day of the fiscal year). If a redeeming
Non-Managing Member owns Units of more than one series, unless otherwise
specified by such Non-Managing Member, Units will be redeemed on a "first
in-first out" basis for purposes of determining the Redemption Price.
Accordingly, Units of the earliest issued series owned by the Non-Managing
Member will be redeemed first, at the Redemption Price for Units of such
series, until such Non-Managing Member no longer owns any Units
attributable to such series. The Company will endeavor to pay the
redemption proceeds (calculated on the basis of estimated, unaudited data),
valued as of the close of business on the day immediately preceding the
Redemption Date, within 45 days following the applicable Redemption Date,
without interest.
In the event the Company is unable, in the Managing Member's sole
discretion, to withdraw sufficient funds to make payments to Non-Managing
Members in connection with a partial or full redemption of Units as set
forth above or where the disposal of part or all of the Company's assets to
meet such requests would be prejudicial to the non-redeeming Non-Managing
Members, then the Company will, in the Managing Member's sole discretion,
suspend making such payments until the earliest possible date when it is
able to do so. In the event redemptions are limited rather than suspended,
payment of proceeds will be made pro rata with respect to each Non-Managing
Member requesting such redemption based upon the amount such Non-Managing
Member is requesting to redeem.
If at any time after a redemption of Units (including in connection
with any withdrawal of a Member from the Company) the Managing Member
determines, in its sole discretion, that the amount paid to such
Non-Managing Member or former Non-Managing Member pursuant to such
redemption was materially incorrect (including because the NAV at which the
Non-Managing Member or former Non-Managing Member purchased such Units was
materially incorrect), the Company will pay to such Non-Managing Member or
former Non-Managing Member any additional amount that it determines such
Non-Managing Member or former Non-Managing Member would have been entitled
to receive had the redemption been effected at the correct NAV, or, in its
sole discretion, seek payment from such Non-Managing Member or former
Non-Managing Member of (and such Non-Managing Member or former Non-Managing
Member shall be required to pay) the amount of any excess payment that the
Managing Member determines such Non-Managing Member or former Non-Managing
Member received, in each case without interest.
The Managing Member is hereby authorized, in its sole discretion, to
require the mandatory redemption of the Units held by any Non-Managing
Member and the withdrawal of such Non-Managing Member from the Company at
any time and for any reason, with or without cause, in its sole discretion.
Redemptions or withdrawals pursuant to this paragraph may be effected as of
the date on which notice thereof is sent to the Non-Managing Member.
Payment upon any such redemption shall be made in accordance with the
provisions of this Section 9.2.
After redemption, Units shall no longer be deemed to remain
outstanding or issued.
ARTICLE 10.
SPECIAL POWER OF ATTORNEY
Each Non-Managing Member by his execution of this Agreement does
hereby irrevocably constitute and appoint the Managing Member and any
successor managing member, with full power of substitution, as his true and
lawful attorney-in-fact, in his name, place and stead, to execute,
acknowledge, swear to, file and record on his behalf in the appropriate
public offices and publish: (i) the Agreement and the Certificate of
Formation, and any amendments thereto; (ii) all instruments which the
Managing Member deems necessary or appropriate to reflect any amendment,
change, or modification of the Company in accordance with the terms of this
Agreement; (iii) certificates of assumed name; and (iv) customer agreements
with the Company's broker(s). The Power of Attorney granted herein shall be
irrevocable and deemed to be a power coupled with an interest and shall
survive the incapacity or death of a Non-Managing Member. Each Non-Managing
Member hereby agrees to be bound by any representation made by the Managing
Member and by any successor thereto, acting in good faith pursuant to such
Power of Attorney, and each Non-Managing Member hereby waives any and all
defenses which may be available to contest, negate or disaffirm the action
of the Managing Member and any successor thereto, taken in good faith under
such Power of Attorney. Each Non-Managing Member agrees to execute a
special Power of Attorney on a document separate from this Agreement. In
the event of any conflict between this Agreement and any instruments filed
by such attorney-in-fact pursuant to the power of attorney granted in this
Article 10, this Agreement shall control.
ARTICLE 11.
WITHDRAWAL OF A MEMBER/REMOVAL OF
THE MANAGING MEMBER
Section 11.1 Withdrawal of a Managing Member. The Company shall
terminate and be dissolved upon the withdrawal, removal, insolvency or
dissolution of the Managing Member (unless the Company is continued
pursuant to the terms of Article 14). The Managing Member may withdraw from
the Company, without any breach of this Agreement, at any time upon thirty
(30) days' prior written notice to each Non-Managing Member.
Section 11.2 Withdrawal of a Non-Managing Member. The withdrawal,
death, incompetency, insolvency, or dissolution of a Non-Managing Member
shall not dissolve or terminate the Company, and such Non-Managing Member,
his estate, custodian, or personal representative shall not have the right
to withdraw or value such Non-Managing Member's interest in the Company
except as provided in Article 9.2. Each Non-Managing Member expressly
agrees that in the event of his death, he waives on behalf of himself and
his estate, and he directs the legal representative of his estate and any
person interested therein to waive, the furnishing of any inventory,
accounting, or appraisal of the assets of the Company and any right to an
audit or examination of the books and records of the Company.
Section 11.3 Removal of the Managing Member. Upon the written consent
of the Non-Managing Members having at least 66 2/3% of the Units, the
Managing Member shall be required to withdraw from the Company, and the
Company shall be wound up and terminated, unless the Non-Managing Members
having at least 66 2/3% of the Units agree in writing to continue the
business of the Company and to the appointment of one or more new managing
members.
ARTICLE 12.
NO PERSONAL LIABILITY FOR RETURN OF CAPITAL
The Managing Member shall not be personally liable for the return or
repayment of all or any portion of the capital contribution or profits of
any Member, it being expressly agreed that any such return of capital
contribution or profits made pursuant to this Agreement shall be made
solely from the assets (which shall not include any right of contribution
from the Managing Member) of the Company.
ARTICLE 13.
INDEMNIFICATION
The Company shall indemnify and hold harmless the Managing Member and
its affiliates from and against any lost, liability, damage, cost or
expense (including legal or investigatory fees and expenses) and any
amounts paid in settlement thereof resulting from or relating to their
actions or omissions concerning the business or activities undertaken on
behalf of the Company; provided, that the actions or omissions of such
person which were the subject of the demand, claim or lawsuit did not
constitute gross negligence, misconduct or breach of any fiduciary
obligation to the Company; provided further that such actions or omissions
were done in good faith and in manner reasonably believed to be in, or not
opposed to, the best interests of the Company; provided further, that
affiliates of the Managing Member shall be entitled to indemnity only for
losses incurred by such affiliates in performing the duties of the Managing
Member and acting wholly within the scope of the authority of the Managing
Member; and provided further, that this indemnity shall not apply to
liabilities, settlements (including any settlement relating to any suit,
action or proceeding) or other costs arising from any violation or alleged
violation of federal or state securities laws, nor shall this indemnity
apply to any liabilities or settlements with respect to which
indemnification would be in violation of Section 14.402(B)(13)(i)(x) of the
Code of Massachusetts Regulations. As used in this Article 13, the term
"Managing Member" shall include the Managing Member, its affiliates and
their respective officers, directors, managing members, partners,
stockholders, members, employees and each person, if any, who owns or
controls 10% or more of the outstanding voting securities of the Managing
Member. In any action brought by a Non-Managing Member in the right of the
Company to which the Managing Member or any other person indemnified
pursuant to the foregoing are party defendants, any such person will be
indemnified by the Company only to the extent and subject to the conditions
specified in the Act.
The Company shall not incur the cost of the portion of any insurance
which insures any party against any liability as to which such party is
herein prohibited from being indemnified.
ARTICLE 14.
AMENDMENTS; MEETINGS
Section 14.1 Amendments. If at any time during the term of the Company
the Managing Member deems it necessary or desirable to amend this
Agreement, the Managing Member may proceed to do so without the consent of
the Non-Managing Members. The Managing Member shall be required to notify
the Non-Managing Members prior to taking any such action and declare a
special redemption date as described in the Memorandum for those
Non-Managing Members who do not wish to remain as Non-Managing Members
under the terms and conditions set forth in this Agreement as amended by
the Managing Member, provided that the Managing Member may make any
amendment to this Agreement it deems necessary or desirable in its sole
discretion without notice or provision of any redemption right to the
Non-Managing Members if such amendment would not have a material adverse
effect on the Non-Managing Members.
Section 14.2 Meetings. Upon receipt of a written request, signed by
Non-Managing Members owning at least 25% of each class of Units (excluding
any Units held by the Managing Member or any of its principals of
affiliates), that a meeting of the Company be called to vote upon any
matter on which the Non-Managing Members may vote pursuant to this
Agreement, the Managing Member shall, by written notice to each
Non-Managing Member of record mailed within 15 days after such receipt,
call a meeting of the Company. Such a meeting shall be held at least 30 but
no more than 60 days after the mailing of such notice, and such notice
shall specify the date of, a reasonable place and time for and the purpose
of such meeting. The Managing Member may call a meeting of the Company at
any time, subject to the foregoing requirements relating to notice. The
Managing Member shall have full power and authority concerning the manner
of conducting any meeting of the Company or soliciting consents in writing,
including, without limitation, the determination of the persons entitled to
vote, the existence of a quorum, the conduct or voting, the validity and
effect of proxies and the determination of controversies.
ARTICLE 15.
ACCESS TO COMPANY RECORDS
Non-Managing Members, or their duly authorized representatives, may
inspect the Company books and records to the extent required by the CFTC
regulations or other applicable laws during normal business hours upon at
least ten (10) days prior written notice to the Managing Member. The books
and records of the Company may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, micrographics or any other information
storage device, provided that such books or records are convertible into
clearly legible written form within a reasonable period of time.
ARTICLE 16.
GOVERNING LAW
The validity and construction of this Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware.
ARTICLE 17.
MISCELLANEOUS
Section 17.1 Priority Among Non-Managing Members. Except as otherwise
may be specifically set forth in this Agreement, no Non-Managing Member
shall be entitled to any priority or preference over any other Non-Managing
Member in regard to the affairs of the Company.
Section 17.2 Each Interest in the Company is a Security. The parties
expressly agree that each interest in the Company, including without
limitation the Units and the interests of the Managing Member in the
Company, is a security governed by Article 8 of the Uniform Commercial Code
of the State of Delaware, and the Company, each Member and any other
parties hereto expressly agree that (i) this establishes the terms of the
interests in the Company, and (ii) interests in the Company shall not be
represented or evidenced by certificates.
Section 17.3 Notices. All notices under this Agreement shall be in
writing and shall be effective upon personal delivery, or, if sent by
registered or certified mail, postage prepaid, addressed to the last known
address of the party to whom such notice is to be given, then, upon the
deposit of such notice in the United States mail. Requests for redemption
and notices of assignment, transfer, or pledge of Units shall be effective
upon timely receipt by the Managing Member. Reports by the Managing Member
to the Non-Managing Members shall be in writing and shall be sent by first
class mail to the last known address of each Non-Managing Member.
Section 17.4 Binding Effect. This Agreement shall inure to and be
binding upon all of the parties, their successors, permitted assigns,
custodians, estates, heirs, and personal representatives. For purposes of
determining the rights of any Member hereunder, the Company and the
Managing Member may rely upon the Company records as to who are Members,
and all Members agree that their rights shall be determined and that they
shall be bound hereby.
Section 17.5 Captions. Captions in no way define, limit, extend or
describe the scope of this Agreement nor the effect of any of its
provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
MANAGING MEMBER:
XXXXXXX XXXXX PRINCETON LLC
By: /s/ Xxxxx X. Xxxx
-------------------------
Name: Xxxxx X. Xxxx
Title: Director
NON-MANAGING MEMBERS:
XXXXXXX SACHS PRINCETON LLC
on behalf of each Member as
attorney-in-fact
By: /s/ Xxxxx X. Xxxx
-------------------------
Name: Xxxxx X. Xxxx
Title: Director
