TORREY INTERNATIONAL STRATEGY PARTNERS, LLC
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (the "Agreement")
of Torrey International Strategy Partners, LLC (the "Fund") is dated as of May
15, 2002 by and among Xxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxx and Xxxxxxx X.
Xxxxxxxx, as the Managers, and those persons hereinafter admitted as Members.
This Agreement amends and restates the Limited Liability Company Agreement dated
March 28, 2002 by and among Torrey Associates, LLC as the Organizational Member,
and Xxxxx X. Xxxxxx as the Initial Manager.
WHEREAS, the Fund has heretofore been formed as a limited liability
company under the Delaware Limited Liability Company Act pursuant to an initial
Certificate of Formation (the "Certificate") dated and filed with the Secretary
of State of Delaware on March 25, 2002;
NOW, THEREFORE, for and in consideration of the foregoing and the
mutual covenants hereinafter set forth, it is hereby agreed as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement:
Administrator The person who provides administrative,
accounting, and compliance and
operational support services to the Fund
pursuant to an administrative services
agreement.
Advisor Torrey Associates, LLC, a limited
liability company organized under
Delaware law, or any person who may
hereafter serve as the investment
advisor to the Fund pursuant to an
Investment Advisory Agreement.
Advisers Act The Investment Advisers Act of 1940 and
the rules, regulations and orders
thereunder, as amended from time to
time, or any successor law.
Affiliate An affiliated person of a person as such
term is defined in the 1940 Act.
Agreement This Limited Liability Company
Agreement, as amended from time to time.
Board of Managers The Board of Managers established
pursuant to Section 2.6.
Capital Account With respect to each Member, the capital
account established and maintained on
behalf of each Member pursuant to
Section 5.3.
Certificate The Certificate of Formation of the Fund
and any amendments thereto as filed with
the office of the Secretary of State of
the State of Delaware.
Closing Date The first date on or as of which a
person other than an Organizational
Member is admitted to the Fund as a
Member.
Code The United States Internal Revenue Code
of 1986, as amended, and as hereafter
amended from time to time, or any
successor law.
Delaware Act The Delaware Limited Liability Company
Act as in effect on the date hereof and
as amended from time to time, or any
successor law.
Fiscal Period The period commencing on the Closing
Date, and thereafter each period
commencing on the day immediately
following the last day of the preceding
Fiscal Period, and ending at the close
of business on the first to occur of the
following dates:
(1) the last day of a Fiscal Year;
(2) the last day of a taxable year;
(3) the day preceding any day as of
which a contribution to the capital
of the Fund is made pursuant to
Section 5.1;
(4) any day on which the Fund
repurchases any portion of the
Units of any Member; or
(5) any day (other than one specified
in clause (2) above) as of which
this Agreement provides for any
amount to be credited to or debited
against the Capital Account of any
Member, other than an amount to be
credited to or debited against the
Capital Accounts of all Members in
accordance with their respective
Investment Percentages.
Fiscal Year The period commencing on the Closing
Date and ending on March 31, 2003, and
thereafter each period commencing on
April 1 of each year and ending on March
31 of each year (or on the date of a
final distribution pursuant to Section
6.2 hereof), unless and until the Board
of Managers shall elect another fiscal
year for the Fund.
Form N-2 The Fund's Registration Statement on
Form N-2 filed with the Securities and
Exchange Commission, as amended from
time to time.
Fund The limited liability company governed
hereby, as such limited liability
company may from time to time be
constituted.
Independent Managers Those Managers who are not "interested
persons" of the Fund as such term is
defined by the 1940 Act.
Initial Manager Xxxxx X. Xxxxxx, the person who directed
the formation of the Fund and served as
the sole initial Manager.
Investment Advisory A separate written agreement entered
Agreement into by the Fund pursuant to which the
Advisor provides investment advisory
services to the Fund.
Investment Percentage A percentage established for each Member
on the Fund's books as of the first day
of each Fiscal Period. The Investment
Percentage of a Member for a Fiscal
Period shall be determined by dividing
the balance of the Member's Capital
Account as of the commencement of such
Fiscal Period by the sum of the Capital
Accounts of all of the Members as of the
commencement of such Fiscal Period. The
sum of the Investment Percentages of all
Members for each Fiscal Period shall
equal 100%.
Manager An individual designated as a manager of
the Fund pursuant to the provisions of
Section 2.6 of the Agreement and who
serves on the Board of Managers of the
Fund.
Member Any person who shall have been admitted
to the Fund as a member (including any
Manager in such person's capacity as a
member of the Fund but excluding any
Manager in such person's capacity as a
Manager of the Fund) until the Fund
repurchases all the Units of such person
pursuant to Section 4.4 hereof or a
substituted member or members are
admitted with respect to all or any
portion of such person's Units as a
member pursuant to Section 4.3 hereof;
such term includes the Advisor or an
Affiliate of the Advisor to the extent
the Advisor (or such Affiliate) makes a
capital contribution to the Fund and
shall have been admitted to the Fund as
a member.
Net Assets The total value of all assets of the
Fund, less an amount equal to all
accrued debts, liabilities and
obligations of the Fund, calculated
before giving effect to any repurchases
of Units.
Net Profit or Net Loss The amount by which the Net Assets as of
the close of business on the last day of
a Fiscal Period exceed (in the case of
Net Profit) or are less than (in the
case of Net Loss) the Net Assets as of
the commencement of the same Fiscal
Period (or, with respect to the initial
Fiscal Period of the Fund, as of the
close of business on the Closing Date),
such amount to be adjusted to exclude
any items to be allocated among the
Capital Accounts of the Members on a
basis that is not in accordance with the
respective Investment Percentages of all
Members as of the commencement of such
Fiscal Period pursuant to Section 5.5
hereof.
1940 Act The Investment Company Act of 1940 and
the rules, regulations and orders
thereunder, as amended from time to
time, or any successor law.
Organizational Member The Advisor and any Affiliate of the
Advisor that contributes initial capital
to the Fund prior to the Closing Date.
Placement Agent Any entity or person who may serve as
the placement agent of Units pursuant to
a placement agent agreement with the
Fund.
Portfolio Funds Investment funds in which the Fund's
assets are invested.
Portfolio Managers The organizations that manage and direct
the investment activities of Portfolio
Funds or are retained to manage and
invest directly designated portions of
the Fund's assets.
Securities Securities (including, without
limitation, equities, debt obligations,
options, limited partnership interests,
limited liability company interests and
other "securities" as that term is
defined in Section 2(a)(36) of the 0000
Xxx) and any contracts for forward or
future delivery of any security, debt
obligation or currency, or commodity,
all types of derivative instruments and
financial instruments and any contracts
based on any index or group of
securities, debt obligations or
currencies, or commodities, and any
options thereon.
Transfer The assignment, transfer, sale,
encumbrance, pledge or other disposition
of all or any portion of the Units,
including any right to receive any
allocations and distributions
attributable to a Unit, other than a
repurchase in accordance with Section
4.4 hereof.
Unit A limited liability company interest in
the Fund.
Valuation Date The date as of which the Fund values the
Units for purposes of determining the
price at which Units are to be purchased
by the Fund pursuant to an offer made by
the Fund pursuant to Section 4.4 hereof.
ARTICLE II
ORGANIZATION; ADMISSION OF MEMBERS
Section 2.1 Formation of Limited Liability Company
The Fund has been formed as a limited liability company at the
direction of the Initial Manager who authorized the filing of the Certificate,
which actions are hereby ratified by the execution of this Agreement. The Board
of Managers shall execute and file in accordance with the Delaware Act, any
amendment to the Certificate and shall execute and file with applicable
governmental authorities any other instruments, documents and certificates that,
in the opinion of the Fund's legal counsel, may from time to time be required by
the laws of the United States of America, the State of Delaware or any other
jurisdiction in which the Fund shall determine to do business, or any political
subdivision or agency thereof, or that such legal counsel may deem necessary or
appropriate to effectuate, implement and continue the valid existence and
business of the Fund.
Section 2.2 Name
The name of the Fund shall be "Torrey International Strategy Partners,
LLC" or such other name as the Board of Managers may hereafter adopt upon (i)
causing an appropriate amendment to the Certificate to be filed in accordance
with the Delaware Act and (ii) taking such other actions as may be required by
law.
Section 2.3 Principal and Registered Office
The Fund shall have its principal office at 000 Xxxx Xxxxxx, Xxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place designated from time to
time by the Board of Managers.
The Fund shall have its registered office in Delaware at 0000
Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, and shall have
Corporation Services Company as its registered agent for service of process in
Delaware, unless a different registered office or agent is designated from time
to time by the Board of Managers.
Section 2.4 Duration
The term of the Fund commenced on the filing of the Certificate with
the Secretary of State of Delaware and shall continue until the Fund is
dissolved pursuant to Section 6.1 hereof.
Section 2.5 Business of the Fund
(a) The business of the Fund is to purchase, sell (including short
sales), invest and trade in Securities, on margin or otherwise, and to engage in
any financial or derivative transactions relating thereto or otherwise. The Fund
may execute, deliver and perform all contracts, agreements, subscription
documents and other undertakings and engage in all activities and transactions
as may, in the opinion of the Board of Managers, be necessary or advisable to
carry out its objective or business.
(b) The Fund shall operate as a closed-end, non-diversified, management
investment company in accordance with the 1940 Act and subject to any
fundamental policies and investment restrictions as may be adopted by the Board
of Managers and in accordance with the 1940 Act.
Section 2.6 Board of Managers
(a) Prior to the Closing Date, the Initial Manager may designate such
persons who shall agree to be bound by all of the terms of this Agreement to
serve as Managers on the Board of Managers, subject to the election of such
persons prior to the Closing Date by the Organizational Member. By signing this
Agreement or signing a subscription agreement in connection with the purchase of
Units, a Member admitted on the Closing Date shall be deemed to have voted for
the election of each of the Managers so designated. After the Closing Date, the
Board of Managers may, subject to the provisions of paragraphs (a) and (b) of
this Section 2.6 with respect to the number of and vacancies in the position of
Manager and the provisions of Section 3.3 hereof with respect to the election of
Managers to the Board of Managers by Members, designate any person who shall
agree to be bound by all of the terms of this Agreement as a Manager. The names
and mailing addresses of the Managers shall be set forth in the books and
records of the Fund. The number of Managers shall be fixed from time to time by
the Board of Managers.
(b) Each Manager shall serve on the Board of Managers for the duration
of the term of the Fund, unless his or her status as a Manager shall be sooner
terminated pursuant to Section 4.2 hereof. In the event of any vacancy in the
position of Manager, the remaining Managers may appoint an individual to serve
in such capacity, so long as immediately after such appointment at least
two-thirds (2/3) of the Managers then serving would have been elected by the
Members. The Board of Managers may call a meeting of Members to fill any vacancy
in the position of Manager, and shall do so within 60 days after any date on
which Managers who were elected by the Members cease to constitute a majority of
the Managers then serving on the Board of Managers.
(c) In the event that no Manager remains to continue the business of
the Fund, the Advisor shall promptly call a meeting of the Members, to be held
within 60 days after the date on which the last Manager ceased to act in that
capacity, for the purpose of determining whether to continue the business of the
Fund and, if the business shall be continued, of electing the required number of
Managers to the Board of Managers. If the Members shall determine at such
meeting not to continue the business of the Fund or if the required number of
Managers is not elected within 60 days after the date on which the last Manager
ceased to act in that capacity, then the Fund shall be dissolved pursuant to
Section 6.1 hereof and the assets of the Fund shall be liquidated and
distributed pursuant to Section 6.2 hereof.
Section 2.7 Members
The Fund may offer Units for purchase by investors in such manner and
at such times as may be determined by the Board of Managers. All subscriptions
for Units are subject to the receipt by the Fund or its custodian of cleared
funds on or before the acceptance date for such subscriptions in the full amount
of the subscription. Subject to the foregoing, a person may be admitted to the
Fund as a Member subject to the condition that such person shall execute an
appropriate signature page of this Agreement or a subscription agreement
pursuant to which such Member agrees to be bound by all the terms and provisions
of this Agreement. The Board of Managers may in its sole discretion reject any
subscription for Units. The Board of Managers may, in its sole discretion,
suspend the offering of the Units at any time. The admission of any person as a
Member shall be effective upon the revision of the books and records of the Fund
to reflect the name and the contribution to the capital of the Fund of such
additional Member.
Section 2.8 Organizational Member
The initial contribution of capital to the Fund by the Organizational
Member shall be represented by Units, which Units shall have the same rights as
other Units held by Members.
Section 2.9 Both Managers and Members
A Member may at the same time be a Manager and a Member, in which event
such Member's rights and obligations in each capacity shall be determined
separately in accordance with the terms and provisions of this Agreement or as
provided in the Delaware Act.
Section 2.10 Limited Liability
Except as provided under applicable law, a Member shall not be liable
for the Fund's debts, obligations and liabilities in any amount in excess of the
capital account balance of such Member, plus such Member's share of
undistributed profits and assets. Except as provided under applicable law, a
Manager shall not be liable for the Fund's debts, obligations and liabilities.
ARTICLE III
MANAGEMENT
Section 3.1 Management and Control
(a) Management and control of the business of the Fund shall be vested
in the Board of Managers, which shall have the right, power and authority, on
behalf of the Fund and in its name, to exercise all rights, powers and authority
of Managers under the Delaware Act and to do all things necessary and proper to
carry out the objective and business of the Fund and their duties hereunder. No
Manager shall have the authority individually to act on behalf of or to bind the
Fund except within the scope of such Manager's authority as delegated by the
Board of Managers. The parties hereto intend that, except to the extent
otherwise expressly provided herein, (i) each Manager shall be vested with the
same powers, authority and responsibilities on behalf of the Fund as are
customarily vested in each director of a Delaware corporation and (ii) each
Independent Manager shall be vested with the same powers, authority and
responsibilities on behalf of the Fund as are customarily vested in each
director of a closed-end management investment company registered under the 1940
Act that is organized as a Delaware business trust who is not an "interested
person" of such company, as such term is defined by the 1940 Act. During any
period in which the Fund shall have no Managers, the Advisor shall continue to
serve as the Advisor to the Fund and shall have the authority to manage the
business and affairs of the Fund.
(b) Members shall have no right to participate in and shall take no
part in the management or control of the Fund's business and shall have no
right, power or authority to act for or bind the Fund. Members shall have the
right to vote on any matters only as provided in this Agreement or on any
matters that require the approval of the holders of voting securities under the
1940 Act or as otherwise required in the Delaware Act.
(c) The Board of Managers may delegate to any other person any rights,
power and authority vested by this Agreement in the Board of Managers to the
extent permissible under applicable law, and may appoint persons to serve as
officers of the Fund, with such titles and authority as may be determined by the
Board of Managers consistent with applicable law.
Section 3.2 Actions by the Board of Managers
(a) Unless provided otherwise in this Agreement, the Board of Managers
shall act only: (i) by the affirmative vote of a majority of the Managers
(including the vote of a majority of the Independent Managers if required by the
0000 Xxx) present at a meeting duly called at which a quorum of the Managers
shall be present (in person or, if in person attendance is not required by the
1940 Act, by telephone) or (ii) by unanimous written consent of all of the
Managers without a meeting, if permissible under the 0000 Xxx.
(b) The Board of Managers may designate from time to time a Principal
Manager who shall preside at all meetings of the Board of Managers. Meetings of
the Board of Managers may be called by the Principal Manager or by any two
Managers, and may be held on such date and at such time and place as the Board
of Managers shall determine. Each Manager shall be entitled to receive written
notice of the date, time and place of such meeting within a reasonable time in
advance of the meeting. Except as otherwise required by the 1940 Act, notice
need not be given to any Manager who shall attend a meeting without objecting to
the lack of notice or who shall execute a written waiver of notice with respect
to the meeting. Managers may attend and participate in any meeting by telephone
except where in-person attendance at a meeting is required by the 1940 Act. A
majority of the Managers shall constitute a quorum at any meeting.
Section 3.3 Meetings of Members
(a) Actions requiring the vote of the Members may be taken at any duly
constituted meeting of the Members at which a quorum is present. Meetings of the
Members may be called by the Board of Managers or by Members holding a majority
of the total number of votes eligible to be cast by all Members, and may be held
at such time, date and place as the Board of Managers shall determine. The Board
of Managers shall arrange to provide written notice of the meeting, stating the
date, time and place of the meeting and the record date therefor, to each Member
entitled to vote at the meeting within a reasonable time prior thereto. Failure
to receive notice of a meeting on the part of any Member shall not affect the
validity of any act or proceeding of the meeting, so long as a quorum shall be
present at the meeting, except as otherwise required by applicable law. Only
matters set forth in the notice of a meeting may be voted on by the Members at a
meeting. The presence in person or by proxy of Members holding a majority of the
total number of votes eligible to be cast by all Members as of the record date
shall constitute a quorum at any meeting. In the absence of a quorum, a meeting
of the Members may be adjourned by action of a majority of the Members present
in person or by proxy without additional notice to the Members. Except as
otherwise required by any provision of this Agreement or of the 1940 Act, (i)
those candidates receiving a plurality of the votes cast at any meeting of
Members shall be elected as Managers and (ii) all other actions of the Members
taken at a meeting shall require the affirmative vote of Members holding a
majority of the total number of votes eligible to be cast by those Members who
are present in person or by proxy at such meeting.
(b) Each Member shall be entitled to cast at any meeting of Members a
number of votes equivalent to such Member's Investment Percentage as of the
record date for such meeting. The Board of Managers shall establish a record
date not less than 10 days nor more than 60 days prior to the date of any
meeting of Members to determine eligibility to vote at such meeting and the
number of votes that each Member will be entitled to cast at the meeting, and
shall maintain for each such record date a list setting forth the name of each
Member and the number of votes that each Member will be entitled to cast at the
meeting.
(c) A Member may vote at any meeting of Members by a proxy properly
executed in writing by the Member and filed with the Fund before or at the time
of the meeting. A proxy may be suspended or revoked, as the case may be, by the
Member executing the proxy by a later writing delivered to the Fund at any time
prior to exercise of the proxy or if the Member executing the proxy shall be
present at the meeting and decide to vote in person. Any action of the Members
that is permitted to be taken at a meeting of the Members may be taken without a
meeting if consents in writing, setting forth the action taken, are signed by
Members holding a majority of the total number of votes eligible to be cast or
such greater percentage as may be required in order to approve such action.
Section 3.4 Custody of Assets of the Fund
The physical possession of all funds, Securities or other properties of
the Fund shall at all times, be held, controlled and administered by one or more
custodians retained by the Fund in accordance with the requirements of the 1940
Act and the rules thereunder.
Section 3.5 Other Activities of Members and Managers
(a) The Managers shall not be required to devote all of their time to
the affairs of the Fund, but shall devote such time as may reasonably be
required to perform their obligations under this Agreement.
(b) Any Member or Manager, and any Affiliate of any Member or Manager,
may engage in or possess an interest in other business ventures or commercial
dealings of every kind and description, independently or with others, including,
but not limited to, acquisition and disposition of Securities, provision of
investment advisory or brokerage services, serving as directors, officers,
employees, advisors or agents of other companies, partners of any partnership,
members of any limited liability company, or trustees of any trust, or entering
into any other commercial arrangements. No Member or Manager shall have any
rights in or to such activities of any other Member or Manager, or any profits
derived therefrom.
Section 3.6 Duty of Care
(a) Neither a Manager nor the Advisor shall be liable to the Fund or to
any of its Members for any loss or damage occasioned by any act or omission in
the performance of their services pursuant to any agreement, including this
Agreement, between a Manager or the Advisor and the Fund for the provision of
services to the Fund unless it shall be determined by final judicial decision on
the merits from which there is no further right to appeal that such loss is due
to an act or omission of the Manager or the Advisor, as applicable, constituting
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the performance of their services to the Fund.
(b) Members not in breach of any obligation hereunder or under any
agreement pursuant to which the Member subscribed for Units shall be liable to
the Fund, any Member or third parties only as provided under the Delaware Act.
Section 3.7 Indemnification
(a) To the fullest extent permitted by law, the Fund shall, subject to
Section 3.7(b) hereof, indemnify each Manager (including for this purpose his or
her respective executors, heirs, assigns, successors or other legal
representatives), against all losses, claims, damages, liabilities, costs and
expenses, including, but not limited to, amounts paid in satisfaction of
judgments, in compromise, or as fines or penalties, and reasonable counsel fees,
incurred in connection with the defense or disposition of any action, suit,
investigation or other proceeding, whether civil or criminal, before any
judicial, arbitral, administrative or legislative body, in which such indemnitee
may be or may have been involved as a party or otherwise, or with which such
indemnitee may be or may have been threatened, while in office or thereafter, by
reason of being or having been a Manager of the Fund or the past or present
performance of services to the Fund by such indemnitee, except to the extent
such loss, claim, damage, liability, cost or expense shall have been finally
determined in a decision on the merits in any such action, suit, investigation
or other proceeding to have been incurred or suffered by such indemnitee by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of such indemnitee's office. The
rights of indemnification provided under this Section 3.7 shall not be construed
so as to provide for indemnification of a Manager for any liability (including
liability under federal securities laws which, under certain circumstances,
impose liability even on persons that act in good faith) to the extent (but only
to the extent) that such indemnification would be in violation of applicable
law, but shall be construed so as to effectuate the applicable provisions of
this Section 3.7 to the fullest extent permitted by law.
(b) Expenses, including reasonable counsel fees, so incurred by any
such indemnitee (but excluding amounts paid in satisfaction of judgments, in
compromise, or as fines or penalties), may be paid from time to time by the Fund
in advance of the final disposition of any such action, suit, investigation or
proceeding upon receipt of an undertaking by or on behalf of such indemnitee to
repay to the Fund amounts so paid if it shall ultimately be determined that
indemnification of such expenses is not authorized under Section 3.7(a) hereof;
provided, however, that (i) such indemnitee shall provide security for such
undertaking, (ii) the Fund shall be insured by or on behalf of such indemnitee
against losses arising by reason of such indemnitee's failure to fulfill such
undertaking, or (iii) a majority of the Managers (excluding any Manager who is
either seeking advancement of expenses hereunder or is or has been a party to
any other action, suit, investigation or proceeding involving claims similar to
those involved in the action, suit, investigation or proceeding giving rise to a
claim for advancement of expenses hereunder) or independent legal counsel in a
written opinion shall determine based on a review of readily available facts (as
opposed to a full trial-type inquiry) that there is reason to believe such
indemnitee ultimately will be entitled to indemnification.
(c) As to the disposition of any action, suit, investigation or
proceeding (whether by a compromise payment, pursuant to a consent decree or
otherwise) without an adjudication or a decision on the merits by a court, or by
any other body before which the proceeding shall have been brought, that an
indemnitee is liable to the Fund or its Members by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such indemnitee's office, indemnification shall be
provided pursuant to Section 3.7(a) hereof if (i) approved as in the best
interests of the Fund by a majority of the Managers (excluding any Manager who
is either seeking indemnification hereunder or is or has been a party to any
other action, suit, investigation or proceeding involving claims similar to
those involved in the action, suit, investigation or proceeding giving rise to a
claim for indemnification hereunder) upon a determination based upon a review of
readily available facts (as opposed to a full trial-type inquiry) that such
indemnitee is not liable to the Fund or its Members by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such indemnitee's office, or (ii) the Board of
Managers secures a written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-type inquiry) to
the effect that such indemnification would not protect such indemnitee against
any liability to the Fund or its Members to which such indemnitee would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of such
indemnitee's office.
(d) Any indemnification or advancement of expenses made pursuant to
this Section 3.7 shall not prevent the recovery from any indemnitee of any such
amount if such indemnitee subsequently shall be determined in a decision on the
merits in any action, suit, investigation or proceeding involving the liability
or expense that gave rise to such indemnification or advancement of expenses to
be liable to the Fund or its Members by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of such indemnitee's office. In (i) any suit brought by a Manager (or
other person entitled to indemnification hereunder) to enforce a right to
indemnification under this Section 3.7 it shall be a defense that, and (ii) in
any suit in the name of the Fund to recover any indemnification or advancement
of expenses made pursuant to this Section 3.7 the Fund shall be entitled to
recover such expenses upon a final adjudication that, the Manager or other
person claiming a right to indemnification under this Section 3.7 has not met
the applicable standard of conduct set forth in this Section 3.7. In any such
suit brought to enforce a right to indemnification or to recover any
indemnification or advancement of expenses made pursuant to this Section 3.7,
the burden of proving that the Manager or other person claiming a right to
indemnification is not entitled to be indemnified, or to any indemnification or
advancement of expenses, under this Section 3.7 shall be on the Fund (or any
Member acting derivatively or otherwise on behalf of the Fund or its Members).
(e) An indemnitee may not satisfy any right of indemnification or
advancement of expenses granted in this Section 3.7 or to which such indemnitee
may otherwise be entitled except out of the assets of the Fund, and no Member
shall be personally liable with respect to any such claim for indemnification or
advancement of expenses.
(f) The rights of indemnification provided hereunder shall not be
exclusive of or affect any other rights to which any person may be entitled by
contract or otherwise under law. Nothing contained in this Section 3.7 shall
affect the power of the Fund to purchase and maintain liability insurance on
behalf of any Manager or other person.
Section 3.8 Fees, Expenses and Reimbursement
(a) The Advisor and its Affiliates shall be entitled to receive such
fees for services provided to the Fund as may be agreed to by the Advisor (or
its Affiliate) and the Fund pursuant to the Investment Advisory Agreement or
other applicable agreement relating to such services.
(b) The Board of Managers may cause the Fund to compensate each Manager
who is not an officer or employee of the Advisor or the Placement Agent (or of
any Affiliate of the Advisor or of the Placement Agent) for his or her services
as such, and such Manager shall be reimbursed by the Fund for reasonable travel
and out-of-pocket expenses incurred by him in performing his duties under this
Agreement.
(c) The Fund shall bear all expenses incurred in its business and
operations, other than those specifically required to be borne by the Advisor
pursuant to the Investment Advisory Agreement. Expenses to be borne by the Fund
include, but are not limited to, the following:
(1) all costs and expenses directly related to portfolio
transactions and positions for the Fund's account, including, but not limited
to, brokerage commissions, research fees (including research related travel),
interest and commitment fees on loans and debit balances, borrowing charges on
securities sold short, dividends on securities sold but not yet purchased,
custodial fees, margin fees, transfer taxes and premiums, taxes withheld on
foreign dividends and indirect expenses from investments in Portfolio Funds;
(2) all costs and expenses associated with the registration
of the Fund under, and certain offering costs and the costs of compliance with,
any applicable Federal or state laws;
(3) all costs and expenses associated with the organization
of separate investment funds managed by Portfolio Managers retained by the Fund,
if any, and with the selection of Portfolio Managers, including due diligence
and travel related expenses;
(4) attorneys' fees and disbursements associated with
updating the Fund's registration statement, prospectus and other offering
related documents (the "Offering Materials"); the costs of printing the Offering
Materials; the costs of distributing the Offering Materials to prospective
investors; and attorneys' fees and disbursements associated with the preparation
and review thereof;
(5) the costs and expenses of offering Units, including the
expenses of the Placement Agent (including its counsel);
(6) the costs and expenses of holding meetings of the Board
of Managers and any meetings of Members, including legal costs associated with
the preparation and filing of proxy materials;
(7) the fees and disbursements of Fund counsel, legal
counsel to the Independent Managers, if any, independent accountants for the
Fund and other consultants and professionals engaged on behalf of the Fund;
(8) the Management Fee payable to the Advisor pursuant to
the Investment Advisory Agreement;
(9) the fees payable to Xxxxx & Xxxxxxxx Fund Services, LLC
pursuant to the Client Services Agreement;
(10) the costs of a fidelity bond and any liability
insurance obtained on behalf of the Fund or the Board of Managers;
(11) all costs and expenses of preparing, setting in type,
printing and distributing reports and other communications to Members;
(12) all expenses of computing the Fund's net asset value,
including any equipment or services obtained for these purposes;
(13) all charges for equipment or services used in
communicating information regarding the Fund's transactions among the Advisor
and any custodian or other agent engaged by the Fund; and
(14) such other types of expenses as may be approved from
time to time by the Board of Managers.
The Advisor shall be entitled to reimbursement from the Fund for any of
the above expenses that it pays on behalf of the Fund.
(d) Subject to procuring any required regulatory approvals, from time
to time the Fund may, alone or in conjunction with other registered or
unregistered investment funds or other accounts for which the Advisor, or any
Affiliate of the Advisor, acts as general partner or investment advisor,
purchase insurance in such amounts, from such insurers and on such terms as the
Board of Managers shall determine.
ARTICLE IV
TERMINATION OF STATUS OF MANAGERS,
TRANSFERS AND REPURCHASES
Section 4.1 Termination of Status of a Manager
The status of a Manager shall terminate if the Manager (i) shall die;
(ii) shall be adjudicated incompetent; (iii) shall voluntarily withdraw as a
Manager (upon not less than 90 days' prior written notice to the other
Managers); (iv) shall be removed (as described below); (v) shall be certified by
a physician to be mentally or physically unable to perform his or her duties
hereunder; (vi) shall be declared bankrupt by a court with appropriate
jurisdiction, file a petition commencing a voluntary case under any bankruptcy
law or make an assignment for the benefit of creditors; (vii) shall have a
receiver appointed to administer the property or affairs of such Manager; or
(viii) shall otherwise cease to be a Manager of the Fund under the Delaware Act.
Section 4.2 Removal of the Managers
Any Manager may be removed either by (a) the vote or written consent of
at least two-thirds (2/3) of the Managers not subject to the removal vote or (b)
the vote or written consent of Members holding not less than two-thirds (2/3) of
the total number of votes eligible to be cast by all Members.
Section 4.3 Transfer of Units of Members
(a) Units of a Member may be Transferred only (i) by operation of law
pursuant to the death, divorce, bankruptcy, insolvency, dissolution or
incompetency of such Member or (ii) with the written consent of the Board of
Managers (which may be withheld in its sole discretion); provided, however, that
the Board of Managers may not consent to any Transfer other than a Transfer (i)
in which the tax basis of the Units in the hands of the transferee is
determined, in whole or in part, by reference to its tax basis in the hands of
the transferor (e.g., certain Transfers to affiliates, gifts and contributions
to family partnerships), (ii) to members of the Member's immediate family
(brothers, sisters, spouse, parents and children), (iii) as a distribution from
a qualified retirement plan or an individual retirement account, or (iv) a
Transfer to which the Board of Managers may consent pursuant to the following
sentence. The Board of Managers may consent to other pledges, transfers, or
assignments under such other circumstances and conditions as it, in its sole
discretion, deems appropriate; provided, however, that prior to any such pledge,
transfer, or assignment, the Board of Managers shall consult with counsel to the
Fund to ensure that such pledge, transfer, or assignment will not cause the Fund
to be treated as a "publicly traded partnership" taxable as a corporation. In no
event, however, will any transferee or assignee be admitted as a Member without
the consent of the Board of Managers which may be withheld in its sole
discretion. Any pledge, transfer, or assignment not made in accordance with this
Section 4.3 shall be void.
(b) The Board of Managers may not consent to a Transfer of Units or a
portion thereof of a Member unless; (i) the person to whom the Units are
Transferred (or each of the person's beneficial owners if such a person is a
"private investment company" as defined in paragraph (d)(3) of Rule 205-3 under
the Advisers Act) is a person whom the Board of Managers believes meets the
requirements of paragraph (d)(1) of Rule 205-3 under the Advisers Act or any
successor rule thereto and any other requirements that the Board of Managers
deems necessary or appropriate; and (ii) all the Units of the Member are
Transferred to a single transferee or, after the Transfer of a portion of the
Units, the balance of the Capital Account of each of the transferee and
transferor is not less than $25,000. Any transferee that acquires Units by
operation of law as the result of the death, divorce, bankruptcy, insolvency,
dissolution or incompetency of a Member or otherwise, shall be entitled to the
allocations and distributions allocable to the Units so acquired and to Transfer
such Units in accordance with the terms of this Agreement, but shall not be
entitled to the other rights of a Member unless and until such transferee
becomes a substituted Member. If a Member transfers Units with the approval of
the Board of Managers, the Board of Managers shall promptly take all necessary
actions so that the transferee to whom such Units are transferred is admitted to
the Fund as a Member. Each Member effecting a Transfer and its transferee agree
to pay all expenses, including attorneys' and accountants' fees, incurred by the
Fund in connection with such Transfer.
(c) Each Member shall indemnify and hold harmless the Fund, the
Managers, the Advisor, each other Member and any Affiliate of the foregoing
against all losses, claims, damages, liabilities, costs and expenses (including
legal or other expenses incurred in investigating or defending against any such
losses, claims, damages, liabilities, costs and expenses or any judgments, fines
and amounts paid in settlement), joint or several, to which such persons may
become subject by reason of or arising from (i) any Transfer made by such Member
in violation of this Section 4.3 and (ii) any misrepresentation by such Member
in connection with any such Transfer.
Section 4.4 Repurchase of Units
(a) Except as otherwise provided in this Agreement, no Member or other
person holding any Units shall have the right to withdraw or tender to the Fund
for repurchase such Units. The Board of Managers from time to time, in its sole
discretion and on such terms and conditions as it may determine, may cause the
Fund to repurchase Units or portions thereof pursuant to written tenders.
However, the Fund shall not offer to repurchase Units on more than two occasions
during any one Fiscal Year unless it has received an opinion of counsel to the
effect that such more frequent offers would not cause any adverse tax
consequences to the Fund or the Members. In determining whether to cause the
Fund to repurchase Units or portions thereof pursuant to written tenders, the
Board of Managers shall consider the recommendation of the Advisor, and shall
also consider the following factors, among others:
(1) whether any Members have requested to tender Units or
portions thereof to the Fund;
(2) the liquidity of the Fund's assets;
(3) the investment plans and working capital requirements of
the Fund;
(4) the relative economies of scale with respect to the size
of the Fund;
(5) the history of the Fund in repurchasing Units or
portions thereof;
(6) the economic condition of the securities markets; and
(7) the anticipated tax consequences of any proposed
repurchases of Units or portions thereof.
The Board of Managers shall cause the Fund to repurchase Units or
portions thereof pursuant to written tenders only on terms determined by the
Board of Managers to be fair to the Fund and to all Members (including persons
holding Units acquired from Members), as applicable.
(b) A Member who tenders for repurchase only a portion of the Member's
Units will be required to maintain a capital account balance equal to $25,000.
If a Member tenders an amount that would cause the Member's capital account
balance to fall below the required minimum, the Fund reserves the right to
reduce the amount to be purchased from the Member so that the required minimum
balance is maintained.
(c) The Advisor may tender any Units or a portion thereof that it holds
as a Member.
(d) The Board of Managers may cause the Fund to repurchase Units or
portion thereof of a Member or any person acquiring Units or portion thereof
from or through a Member in the event that the Board of Managers determines or
has reason to believe that:
(1) such Units or portion thereof have been transferred in
violation of Section 4.3 hereof, or such Units or portion thereof have vested in
any person by operation of law as the result of the death, divorce, bankruptcy,
insolvency, dissolution or incompetency of a Member;
(2) ownership of such Units by a Member or other person will
cause the Fund to be in violation of, or subject the Fund to additional
registration or regulation under, the securities laws of the United States or
any other relevant jurisdiction;
(3) continued ownership of such Units may be harmful or
injurious to the business or reputation of the Fund, the Managers or the
Advisor, or may subject the Fund or any of the Members to an undue risk of
adverse tax or other fiscal consequences;
(4) such Member's continued participation in the Fund may
cause the Fund to be classified as a "publicly traded partnership" within the
meaning of Section 7704 of the Code and the Treasury Regulations thereunder;
(5) any of the representations and warranties made by a
Member in connection with the acquisition of the Units or portion thereof was
not true when made or has ceased to be true; or
(6) it would be in the best interests of the Fund, as
determined by the Board of Managers in its sole discretion, for the Fund to
repurchase such Units or portion thereof.
(e) Repurchases of Units or portions thereof by the Fund shall be
payable promptly after the date of each such repurchase or, in the case of an
offer by the Fund to repurchase Units, promptly after the expiration date of
such repurchase offer in accordance with the terms of such offer. Payment of the
purchase price for Units (or portion thereof) shall consist of: (i) cash or a
promissory note, which need not bear interest, in an amount equal to such
percentage, as may be determined by the Board of Managers, of the estimated
unaudited net asset value of the Units (or portion thereof) repurchased by the
Fund determined as of the date of such repurchase (the "Initial Payment"); and,
if determined to be appropriate by the Board of Managers or if the Initial
Payment is less than 100% of the estimated unaudited net asset value, (ii) a
promissory note entitling the holder thereof to a contingent payment equal to
the excess, if any, of (x) the net asset value of the Units (or portion thereof)
repurchased by the Fund as of the date of such repurchase, determined based on
the audited financial statements of the Fund for the Fiscal Year in which such
repurchase was effective, over (y) the Initial Payment. Notwithstanding anything
in the foregoing to the contrary, the Board of Managers, in its discretion, may
pay any portion of the repurchase price in marketable Securities (or any
combination of marketable Securities and cash) having a value, determined as of
the date of repurchase, equal to the amount to be repurchased. Any promissory
note given to satisfy the Initial Payment shall be due and payable not more than
45 days after the date of repurchase or, if the Fund has requested withdrawal of
its capital from any Portfolio Funds in order to fund the repurchase of Xxxxx,
00 business days after the Fund has received at least 90% of the aggregate
amount withdrawn by the Fund from such Portfolio Funds.
(f) Subject to the approval of the Board of Managers and compliance
with the 1940 Act, the Fund may impose a redemption fee in connection with
repurchases of Units, including a fee applicable to repurchases of Units (or
portions thereof) effected prior to expiration of a specified period subsequent
to a Member's admission to the Fund.
(g) A Member may at any time submit to the Fund a written request that
the Fund repurchase all the Units of such Member, as contemplated by Section
6.1(iii) hereof. Any such request shall be sent to the Fund by registered or
certified mail, return receipt requested, and shall be deemed valid only if the
Member has received a letter from the Fund acknowledging its receipt of the
request. The Fund shall send such letter to the Member promptly upon its receipt
of the Member's request.
ARTICLE V
CAPITAL
Section 5.1 Contributions to Capital
(a) The minimum initial contribution of each Member to the capital of
the Fund shall be such amount as the Board of Managers, in its discretion, may
determine from time to time. The amount of the initial contribution of each
Member shall be recorded on the books and records of the Fund upon acceptance as
a contribution to the capital of the Fund. The Managers shall not be entitled to
make contributions of capital to the Fund as Managers of the Fund, but may make
contributions to the capital of the Fund as a Member. The Advisor may make
contributions to the capital of the Fund as a Member.
(b) Members may make additional contributions to the capital of the
Fund effective as of such times as the Board of Managers, in its discretion, may
permit, subject to Section 2.7 hereof, but no Member shall be obligated to make
any additional contribution to the capital of the Fund except to the extent
provided in Section 5.6 hereof. The minimum initial capital contribution of a
Member to the capital of the Fund shall be such amount as the Board of Managers,
in its sole discretion, may determine from time to time.
(c) Initial and any additional contributions to the capital of the Fund
by any Member shall be payable in cash, payable in readily available funds or,
at the sole discretion of the Board of Managers, in securities, at the date of
the proposed acceptance of the contribution.
Section 5.2 Rights of Members to Capital
No Member shall be entitled to interest on any contribution to the
capital of the Fund, nor shall any Member be entitled to the return of any
capital of the Fund except (i) upon the repurchase by the Fund of a part or all
of such Member's Units pursuant to Section 4.4 hereof, (ii) pursuant to the
provisions of Section 5.6 hereof or (iii) upon the liquidation of the Fund's
assets pursuant to Section 6.2 hereof. No Member shall be liable for the return
of any such amounts. No Member shall have the right to require partition of the
Fund's property or to compel any sale or appraisal of the Fund's assets.
Section 5.3 Capital Accounts
(a) The Fund shall maintain a separate Capital Account for each Member.
(b) Each Member's Capital Account shall have an initial balance equal
to the amount of cash constituting such Member's initial contribution to the
capital of the Fund.
(c) Each Member's Capital Account shall be increased by the sum of (i)
the amount of cash or securities constituting additional contributions by such
Member to the capital of the Fund permitted pursuant to Section 5.1 hereof, plus
(ii) all amounts credited to such Member's Capital Account pursuant to Sections
5.4 through 5.6 hereof.
(d) Each Member's Capital Account shall be reduced by the sum of (i)
the amount of any repurchase of the Units, or portion thereof, of such Member
pursuant to Section 4.4 hereof or distributions to such Member pursuant to
Section 5.7, ,5.8, 5.9 or 6.2 hereof which are not reinvested (net of any
liabilities secured by any asset distributed that such Member is deemed to
assume or take subject to under Section 752 of the Code), plus (ii) any amounts
debited against such Capital Account pursuant to Sections 5.4 through 5.6
hereof.
Section 5.4 Allocation of Net Profit and Net Loss
As of the last day of each Fiscal Period, any Net Profit or Net Loss
for the Fiscal Period shall be allocated among and credited to or debited
against the Capital Accounts of the Members in accordance with their respective
Investment Percentages for such Fiscal Period.
Section 5.5 Allocation of Certain Expenditures
Except as otherwise provided for in this Agreement and unless
prohibited by the 1940 Act, any expenditures payable by the Fund, to the extent
determined by the Board of Managers to have been paid or withheld on behalf of,
or by reason of particular circumstances applicable to, one or more but fewer
than all of the Members, shall be charged to only those Members on whose behalf
such payments are made or whose particular circumstances gave rise to such
payments. Such charges shall be debited from the Capital Accounts of such
Members as of the close of the Fiscal Period during which any such items were
paid or accrued by the Fund.
Section 5.6 Reserves
Appropriate reserves may be created, accrued and charged against Net
Assets and proportionately against the Capital Accounts of the Members for
contingent liabilities, if any, as of the date any such contingent liability
becomes known to the Advisor or the Board of Managers, such reserves to be in
the amounts that the Board of Managers, in its sole discretion, deems necessary
or appropriate. The Board of Managers may increase or reduce any such reserves
from time to time by such amounts as the Board of Managers, in its sole
discretion, deems necessary or appropriate. The amount of any such reserve, or
any increase or decrease therein, shall be proportionately charged or credited,
as appropriate, to the Capital Accounts of Members.
Section 5.7 Tax Allocations
For each fiscal year, items of income, deduction, gain, loss or credit
shall be allocated for income tax purposes among the Members in such manner as
to reflect equitably amounts credited or debited to each Member's Capital
Account for the current and prior fiscal years (or relevant portions thereof).
Allocations under this Section 5.7 shall be made pursuant to the principles of
Sections 704(b) and 704(c) of the Code, and in conformity with Regulations
Sections l.704-l(b)(2)(iv)(f) and (g), l.704-1(b)(4)(i) and 1.704-3(e)
promulgated thereunder, as applicable, or the successor provisions to such
Section and Regulations. Notwithstanding anything to the contrary in this
Agreement, there shall be allocated to the Members such gains or income as shall
be necessary to satisfy the "qualified income offset" requirement of Treasury
Regulations l.704-1(b)(2)(ii)(d).
If the Fund realizes capital gains (including short-term capital gains)
for Federal income tax purposes ("gains") for any fiscal year during or as of
the end of which the Units of one or more Positive Basis Members (as hereinafter
defined) are repurchased by the Fund pursuant to Article IV, the Board of
Managers, unless otherwise determined by the Board of Managers, in its sole
discretion, shall 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 allocated to
such Members' Capital Accounts pursuant to Section 5.4.
If the Fund realizes capital losses (including long-term capital
losses) for Federal income tax purposes ("losses") for any fiscal year during or
as of the end of which the Units of one or more Negative Basis Members (as
hereinafter defined) are repurchased by the Fund pursuant to Article IV, the
Board of Managers, unless otherwise determined by the Board of Managers, in its
sole discretion, shall allocate such losses as follows: (i) to allocate such
losses among such Negative Basis Members, pro rata in proportion to the
respective Negative Basis (as hereinafter defined) of each such Negative Basis
Member, until either the full amount of such losses shall have been so allocated
or the Negative Basis of each such Negative Basis Member shall have been
eliminated and (ii) to allocate any losses not so allocated to Negative Basis
Members to the other Members in such manner as shall equitably reflect the
amounts allocated to such Members' Capital Accounts pursuant to Section 5.4.
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 Units
as of such time exceeds its "adjusted tax basis," for Federal income tax
purposes, in its Units 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 Units, including by reason of death, and without regard to
such Member's share of the liabilities of the Fund under Section 752 of the
Code) and (ii) the term "Positive Basis Member" shall mean any Member whose
Units are repurchased by the Fund and who has Positive Basis as of the effective
date of the repurchase, 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 second paragraph of this Section 5.7 equal to its Positive Basis as of
the effective date of such repurchase.
As used herein, (i) the term "Negative Basis" shall mean, with respect
to any Member and as of any time of calculation, the amount by which its Units
as of such time is less than its "adjusted tax basis," for Federal income tax
purposes, in its Units 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 Units, including by reason of death, and without regard to
such Member's share of the liabilities of the Fund under Section 752 of the
Code), and (ii) the term "Negative Basis Member" shall mean any Member whose
Units are repurchased by the Fund and who has Negative Basis as of the effective
date of such repurchase, but such Member shall cease to be a Negative Basis
Member at such time as it shall have received allocations pursuant to clause (i)
of the third paragraph of this Section 5.7 equal to its Negative Basis as of the
effective date of such repurchase.
Section 5.8 Distributions
The Board of Managers, in its sole discretion, may authorize the Fund
to make distributions in cash or in kind at any time to all of the Members on a
pro rata basis in accordance with the Members' Investment Percentages.
Section 5.9 Withholding
(a) The Board of Managers may withhold and pay over to the Internal
Revenue Service (or any other relevant taxing authority) taxes with respect to
any Member to the extent required by the Code or any other applicable law.
(b) For purposes of this Agreement, any taxes so withheld by the Fund
with respect to any Member shall be deemed to be a distribution or payment to
such Member, reducing the amount otherwise distributable to such Member pursuant
to this Agreement and reducing the Capital Account of such Member. If the amount
of such taxes is greater than any such distributable amounts, then such Member
and any successor to such Member's Units shall pay to the Fund as a contribution
to the capital of the Fund, upon demand of the Board of Managers, the amount of
such excess.
(c) The Board of Managers shall not be obligated to apply for or obtain
a reduction of or exemption from withholding tax on behalf of any Member that
may be eligible for such reduction or exemption. To the extent that a Member
claims to be entitled to a reduced rate of, or exemption from, a withholding tax
pursuant to an applicable income tax treaty, or otherwise, the Member shall
furnish the Board of Managers with such information and forms as such Member may
be required to complete where necessary to comply with any and all laws and
regulations governing the obligations of withholding tax agents. Each Member
represents and warrants that any such information and forms furnished by such
Member shall be true and accurate and agrees to indemnify the Fund and each of
the Members from any and all damages, costs and expenses resulting from the
filing of inaccurate or incomplete information or forms relating to such
withholding taxes.
ARTICLE VI
DISSOLUTION AND LIQUIDATION
Section 6.1 Dissolution
The Fund shall be dissolved:
(i) upon the affirmative vote to dissolve the Fund by both: (i) the
Board of Managers; and (ii) Members holding at least two-thirds (2/3) of the
total number of votes eligible to be cast by all Members;
(ii) upon the failure of Members to elect a successor Manager at a
meeting called by the Advisor in accordance with Section 2.6(c) hereof when no
Manager remains to continue the business of the Fund;
(iii) upon the expiration of any two year period that commences on the
date on which any Member has submitted, in accordance with the procedure
specified in Section 4.4(g) hereof, a written notice to the Fund requesting the
repurchase of all its Units by the Fund (which notice has not been subsequently
withdrawn by such Member), if such Units have not been repurchased by the Fund;
or
(iv) as required by operation of law.
Dissolution of the Fund shall be effective on the day on which the
event giving rise to the dissolution shall occur, but the Fund shall not
terminate until the assets of the Fund have been liquidated in accordance with
Section 6.2 hereof and the Certificate has been canceled.
Section 6.2 Liquidation of Assets
(a) Upon the dissolution of the Fund as provided in Section 6.1 hereof,
the Board of Managers, acting directly or through a liquidator it selects, shall
liquidate the business and administrative affairs of the Fund, except that if
the Board of Managers is unable to perform this function, a liquidator elected
by Members holding a majority of the total number of votes eligible to be cast
by all Members shall promptly liquidate the business and administrative affairs
of the Fund. Net Profit and Net Loss during the period of liquidation shall be
allocated pursuant to Section 5.4 hereof. The proceeds from liquidation (after
establishment of appropriate reserves for contingencies in such amount as the
Board of Managers or liquidator shall deem appropriate in its sole discretion as
applicable) shall be distributed in the following manner:
(1) the debts of the Fund, other than debts, liabilities or
obligations to Members, and the expenses of liquidation (including legal and
accounting expenses incurred in connection therewith), up to and including the
date that distribution of the Fund's assets to the Members has been completed,
shall first be paid on a pro rata basis;
(2) such debts, liabilities or obligations as are owing to
the Members shall next be paid in their order of seniority and on a pro rata
basis;
(3) the Members shall next be paid on a pro rata basis the
positive balances of their respective Capital Accounts after giving effect to
all allocations to be made to such Members' Capital Accounts for the Fiscal
Period ending on the date of the distributions under this Section 6.2.
(b) Anything in this Section 6.2 to the contrary notwithstanding, upon
dissolution of the Fund, the Board of Managers or other liquidator may
distribute ratably in kind any assets of the Fund; provided, however, that if
any in-kind distribution is to be made (i) the assets distributed in kind shall
be valued pursuant to Section 7.3 hereof as of the actual date of their
distribution and charged as so valued and distributed against amounts to be paid
under Section 6.2(a) above, and (ii) any profit or loss attributable to property
distributed in-kind shall be included in the Net Profit or Net Loss for the
Fiscal Period ending on the date of such distribution.
ARTICLE VII
ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS
Section 7.1 Accounting and Reports
(a) The Fund shall adopt for tax accounting purposes any accounting
method that the Board of Managers shall decide in its sole discretion is in the
best interests of the Fund. The Fund's accounts shall be maintained in U.S.
currency.
(b) After the end of each taxable year, the Fund shall furnish to each
Member such information regarding the operation of the Fund and such Member's
Units as is necessary for Members to complete Federal, state and local income
tax or information returns and any other tax information required by Federal,
state or local law.
(c) Except as otherwise required by the 1940 Act, or as may otherwise
be permitted by rule, regulation or order, within 60 days after the close of the
period for which a report required under this Section 7.1(c) is being made, the
Fund shall furnish to each Member a semi-annual report and an annual report
containing the information required by such Act. The Fund shall cause financial
statements contained in each annual report furnished hereunder to be accompanied
by a certificate of independent public accountants based upon an audit performed
in accordance with generally accepted accounting principles. The Fund may
furnish to each Member such other periodic reports as it deems necessary or
appropriate in its discretion.
Section 7.2 Determinations by the Board of Managers
(a) All matters concerning the determination and allocation among the
Members of the amounts to be determined and allocated pursuant to Article V
hereof, including any taxes thereon and accounting procedures applicable
thereto, shall be determined by the Board of Managers unless specifically and
expressly otherwise provided for by the provisions of this Agreement or required
by law, and such determinations and allocations shall be final and binding on
all the Members.
(b) The Board of Managers may make such adjustments to the computation
of Net Profit or Net Loss, or any components comprising Net Profit or Net Loss
as it considers appropriate to reflect fairly and accurately the financial
results of the Fund and the intended allocation thereof among the Members.
Section 7.3 Valuation of Assets
(a) Except as may be required by the 1940 Act, the Board of Managers
shall value or have valued any Securities or other assets and liabilities of the
Fund as of the close of business on the last day of each Fiscal Period in
accordance with such valuation procedures as shall be established from time to
time by the Board of Managers and which conform to the requirements of the 1940
Act. In determining the value of the assets of the Fund, no value shall be
placed on the goodwill or name of the Fund, or the office records, files,
statistical data or any similar intangible assets of the Fund not normally
reflected in the Fund's accounting records, but there shall be taken into
consideration any items of income earned but not received, expenses incurred but
not yet paid, liabilities, fixed or contingent, and any other prepaid expenses
to the extent not otherwise reflected in the books of account, and the value of
options or commitments to purchase or sell Securities or commodities pursuant to
agreements entered into prior to such valuation date.
(b) The Fund will value interests in Portfolio Funds at their "fair
value," as determined in good faith by the Board of Managers, which value
ordinarily will be the value of an interest in a Portfolio Fund determined by
the Portfolio Manager of the Portfolio Fund in accordance with the policies
established by the Portfolio Fund, absent information indicating that such value
does not represent the fair value of the interest.
(c) The value of Securities and other assets of the Fund and the net
worth of the Fund as a whole determined pursuant to this Section 7.3 shall be
conclusive and binding on all of the Members and all parties claiming through or
under them.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1 Amendment of Limited Liability Company Agreement
(a) Except as otherwise provided in this Section 8.1, this Agreement
may be amended, in whole or in part, with (i) the approval of the Board of
Managers (including the vote of a majority of the Independent Managers, if
required by the 0000 Xxx) and (ii) if required by the 1940 Act, the approval of
the Members by such vote as is required by the 0000 Xxx.
(b) Any amendment that would:
(1) increase the obligation of a Member to make any
contribution to the capital of the Fund;
(2) reduce the Capital Account of a Member other than in
accordance with Article V; or
(3) modify the events causing the dissolution of the Fund;
may be made only if (i) the written consent of each Member adversely affected
thereby is obtained prior to the effectiveness thereof or (ii) such amendment
does not become effective until (A) each Member has received written notice of
such amendment and (B) any Member objecting to such amendment has been afforded
a reasonable opportunity (pursuant to such procedures as may be prescribed by
the Board of Managers) to tender all its Units for repurchase by the Fund.
(c) By way of example only, the Board of Managers at any time without
the consent of the Members may:
(1) restate this Agreement together with any amendments
hereto that have been duly adopted in accordance herewith to incorporate such
amendments in a single, integrated document;
(2) amend this Agreement (other than with respect to the
matters set forth in Section 8.1(b) hereof) to effect compliance with any
applicable law or regulation or to cure any ambiguity or to correct or
supplement any provision hereof that may be inconsistent with any other
provision hereof, provided that such action does not adversely affect the right
of any Member in any material respect; and
(3) amend this Agreement to make such changes as may be
necessary or advisable to ensure that the Fund will not be treated as an
association or a publicly traded partnership taxable as a corporation as defined
in Section 7704(b) of the Code.
(d) The Board of Managers shall cause written notice to be given of any
amendment to this Agreement (other than any amendment of the type contemplated
by clause (1) of Section 8.1(c) hereof) to each Member, which notice shall set
forth (i) the text of the amendment or (ii) a summary thereof and a statement
that the text thereof will be furnished to any Member upon request.
Section 8.2 Special Power of Attorney
(a) Each Member hereby irrevocably makes, constitutes and appoints each
Manager, acting severally, and any liquidator of the Fund's assets appointed
pursuant to Section 6.2 hereof with full power of substitution, the true and
lawful representatives and attorneys-in-fact of, and in the name, place and
stead of, such Member, with the power from time to time to make, execute, sign,
acknowledge, swear to, verify, deliver, record, file and/or publish:
(1) any amendment to this Agreement that complies with the
provisions of this Agreement (including the provisions of Section 8.1 hereof);
(2) any amendment to the Certificate required because this
Agreement is amended, including, without limitation, an amendment to effectuate
any change in the membership of the Fund; and
(3) all such other instruments, documents and certificates
that, in the opinion of legal counsel to the Fund, may from time to time be
required by the laws of the United States of America, the State of Delaware or
any other jurisdiction in which the Fund shall determine to do business, or any
political subdivision or agency thereof, or that such legal counsel may deem
necessary or appropriate to effectuate, implement and continue the valid
existence and business of the Fund as a limited liability company under the
Delaware Act.
(b) Each Member is aware that the terms of this Agreement permit
certain amendments to this Agreement to be effected and certain other actions to
be taken or omitted by or with respect to the Fund without such Member's
consent. If an amendment to the Certificate or this Agreement or any action by
or with respect to the Fund is taken in the manner contemplated by this
Agreement, each Member agrees that, notwithstanding any objection that such
Member may assert with respect to such action, the attorneys-in-fact appointed
hereby are authorized and empowered, with full power of substitution, to
exercise the authority granted above in any manner that may be necessary or
appropriate to permit such amendment to be made or action lawfully taken or
omitted. Each Member is fully aware that each Member will rely on the
effectiveness of this special power-of-attorney with a view to the orderly
administration of the affairs of the Fund.
(c) This power-of-attorney is a special power-of-attorney and is
coupled with an interest in favor of each of the Managers and as such:
(1) shall be irrevocable and continue in full force and
effect notwithstanding the subsequent death or incapacity of any party granting
this power-of-attorney, regardless of whether the Fund or Board of Managers
shall have had notice thereof; and
(2) shall survive the delivery of a Transfer by a Member of
the whole or any portion of such Member's Units, except that where the
transferee thereof has been approved by the Board of Managers for admission to
the Fund as a substituted Member, this power-of-attorney given by the transferor
shall survive the delivery of such assignment for the sole purpose of enabling
the Board of Managers to execute, acknowledge and file any instrument necessary
to effect such substitution.
Section 8.3 Notices
Except as otherwise set forth in this Agreement, notices that may or
are required to be provided under this Agreement shall be made, if to a Member,
by regular mail, or if to the Fund, the Board of Managers or the Advisor, by
hand delivery, registered or certified mail, return receipt requested,
commercial courier service, telex or telecopier, and shall be addressed to the
respective parties hereto at their addresses as set forth in the books and
records of the Fund. Notices shall be deemed to have been provided when
delivered by hand, on the date indicated as the date of receipt on a return
receipt or when received if sent by regular mail, commercial courier service,
telex or telecopier. A document that is not a notice and that is required to be
provided under this Agreement by any party to another party may be delivered by
any reasonable means.
Section 8.4 Agreement Binding Upon Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors, assigns, executors,
trustees or other legal representatives, but the rights and obligations of the
parties hereunder may not be Transferred or delegated except as provided in this
Agreement and any attempted Transfer or delegation thereof that is not made
pursuant to the terms of this Agreement shall be void.
Section 8.5 Applicability of 1940 Act and Form N-2
The parties hereto acknowledge that this Agreement is not intended to,
and does not, set forth the substantive provisions contained in the 1940 Act and
the Form N-2 that affect numerous aspects of the conduct of the Fund's business
and of the rights, privileges and obligations of the Members. Each provision of
this Agreement shall be subject to and interpreted in a manner consistent with
the applicable provisions of the 1940 Act and the Form N-2.
Section 8.6 Choice of Law
Notwithstanding the place where this Agreement may be executed by any
of the parties hereto, the parties expressly agree that all the terms and
provisions hereof shall be construed under the laws of the State of Delaware,
including the Delaware Act without regard to the conflict of law principles of
such State.
Section 8.7 Not for Benefit of Creditors
The provisions of this Agreement are intended only for the regulation
of relations among past, present and future Members, Managers, and the Fund.
This Agreement is not intended for the benefit of non-Member creditors and no
rights are granted to non-Member creditors under this Agreement.
Section 8.8 Consents
Any and all consents, agreements or approvals provided for or permitted
by this Agreement shall be in writing and a signed copy thereof shall be filed
and kept with the books of the Fund.
Section 8.9 Merger and Consolidation
(a) The Fund may merge or consolidate with or into one or more limited
liability companies formed under the Delaware Act or other business entities
pursuant to an agreement of merger or consolidation that has been approved in
the manner contemplated by Section 18-209(b) of the Delaware Act.
(b) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, an agreement of merger or consolidation approved in accordance
with Section 18-209(b) of the Delaware Act may, to the extent permitted by
Section 18-209(f) of the Delaware Act, (i) effect any amendment to this
Agreement, (ii) effect the adoption of a new limited liability company agreement
for the Fund if it is the surviving or resulting limited liability company in
the merger or consolidation, or (iii) provide that the limited liability company
agreement of any other constituent limited liability company to the merger or
consolidation (including a limited liability company formed for the purpose of
consummating the merger or consolidation) shall be the limited liability company
agreement of the surviving or resulting limited liability Fund.
Section 8.10 Pronouns
All pronouns shall be deemed to refer to the masculine, feminine,
neuter, singular or plural, as the identity of the person or persons, firm or
corporation may require in the context thereof.
Section 8.11 Confidentiality
(a) A Member may obtain from the Fund such information regarding the
affairs of the Fund as is just and reasonable under the Delaware Act, subject to
reasonable standards (including standards governing what information and
documents are to be furnished, at what time and location and at whose expense)
established by the Board of Managers.
(b) Each Member covenants that, except as required by applicable law or
any regulatory body, it will not divulge, furnish or make accessible to any
other person the name and/or address (whether business, residence or mailing) of
any Member (collectively, "Confidential Information") without the prior written
consent of the Board of Managers, which consent may be withheld in its sole
discretion.
(c) Each Member recognizes that in the event that this Section 8.11 is
breached by any Member or any of its principals, partners, members, directors,
officers, employees or agents or any of its Affiliates, including any of such
Affiliates' principals, partners, members, directors, officers, employees or
agents, irreparable injury may result to the non-breaching Members and the Fund.
Accordingly, in addition to any and all other remedies at law or in equity to
which the non-breaching Members and the Fund may be entitled, such Members shall
also have the right to obtain equitable relief, including, without limitation,
injunctive relief, to prevent any disclosure of Confidential Information, plus
reasonable attorneys' fees and other litigation expenses incurred in connection
therewith. In the event that any non-breaching Member or the Fund determines
that any of the other Members or any of its principals, partners, members,
directors, officers, employees or agents or any of its Affiliates, including any
of such Affiliates' principals, partners, members, directors, officers,
employees or agents should be enjoined from or required to take any action to
prevent the disclosure of Confidential Information, each of the other
non-breaching Members agrees to pursue in a court of appropriate jurisdiction
such injunctive relief.
Section 8.12 Certification of Non-Foreign Status
Each Member or transferee of Units from a Member shall certify, upon
admission to the Fund and at such other times thereafter as the Board of
Managers may request, whether such Member is a "United States Person" within the
meaning of Section 7701(a)(30) of the Code on forms to be provided by the Fund,
and shall notify the Fund within 60 days of any change in such Member's status.
Section 8.13 Severability
If any provision of this Agreement is determined by a court of
competent jurisdiction not to be enforceable in the manner set forth in this
Agreement, each Member agrees that it is the intention of the Members that such
provision should be enforceable to the maximum extent possible under applicable
law. If any provisions of this Agreement are held to be invalid or
unenforceable, such invalidation or unenforceability shall not affect the
validity or enforceability of any other provision of this Agreement (or portion
thereof).
Section 8.14 Filing of Returns
The Board of Managers or its designated agent shall prepare and file,
or cause the accountants of the Fund to prepare and file, a Federal information
tax return in compliance with Section 6031 of the Code and any required state
and local income tax and information returns for each tax year of the Fund.
Section 8.15 Tax Matters Partner
(a) The Advisor shall be designated on the Fund's annual Federal income
tax return, and have full powers and responsibilities, as the Tax Matters
Partner of the Fund for purposes of Section 6231(a)(7) of the Code. In the event
that the Advisor is not a Member, a Member shall be so designated. Each Member
hereby does, to the fullest extent permitted by law, delegate to the Advisor all
of its rights, powers and authority to act as such Tax Matters Partner and
hereby constitutes and appoints the Advisor as its true and lawful
attorney-in-fact, with power to act in its name and on its behalf, including the
power to act through such agents or attorneys as it shall elect or appoint, to
receive notices, to make, execute and deliver, swear to, acknowledge and file
any and all reports, responses and notices, and to do any and all things
required or advisable, in the Manager's judgment, to be done by such a Tax
Matters Partner. The Advisor shall be indemnified and held harmless by the Fund
from any and all liabilities and obligations that arise from or by reason of
such designation.
(b) Each person (for purposes of this Section 8.15, called a "Pass-Thru
Member") that holds or controls an interest as a Member on behalf of, or for the
benefit of, another person or persons, or which Pass-Thru Member is beneficially
owned (directly or indirectly) by another person or persons, shall, within 30
days following receipt from the Tax Matters Partner of any notice, demand,
request for information or similar document, convey such notice or other
document in writing to all holders of beneficial interests in the Fund holding
such interests through such Pass-Thru Member. In the event the Fund shall be the
subject of an income tax audit by any Federal, state or local authority, to the
extent the Fund is treated as an entity for purposes of such audit, including
administrative settlement and judicial review, the Tax Matters Partner shall be
authorized to act for, and its decision shall be final and binding upon, the
Fund and each Member thereof. All expenses incurred in connection with any such
audit, investigation, settlement or review shall be borne by the Fund.
Section 8.16 Section 754 Election
In the event of a distribution of Fund property to a Member or an
assignment or other transfer (including by reason of death) of all or part of
the interest of a Member in the Fund, at the request of a Member, the Board of
Managers, in its discretion, may cause the Fund to elect, pursuant to Section
754 of the Code, or the corresponding provision of subsequent law, to adjust the
basis of the Fund property as provided by Sections 734 and 743 of the Code.
EACH OF THE UNDERSIGNED ACKNOWLEDGES HAVING READ THIS AGREEMENT IN ITS
ENTIRETY BEFORE SIGNING, INCLUDING THE CONFIDENTIALITY CLAUSE SET FORTH IN
SECTION 8.11.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
MANAGERS:
/s/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
MEMBERS:
Each person who shall sign a subscription agreement and who shall be accepted by
the Board of Managers to the Fund as a Member.
80350.0024 #328845
