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EXCELSIOR ABSOLUTE RETURN FUND OF
FUNDS MASTER FUND, LLC
(A Delaware Limited Liability Company)
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LIMITED LIABILITY COMPANY AGREEMENT
Dated as of July __, 2003
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000 Xxxx Xxxxx Xx.
Xxxxxxxx, XX 00000
(000) 000-0000
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.......................................................................1
ARTICLE II ORGANIZATION; ADMISSION OF MEMBERS.............................................6
2.1 Formation of Limited Liability Company.............................................6
2.2 Name...............................................................................6
2.3 Principal and Registered Office....................................................6
2.4 Duration...........................................................................6
2.5 Business of the Master Fund........................................................6
2.6 Board of Managers..................................................................7
2.7 Members............................................................................8
2.8 Organizational Member..............................................................8
2.9 Both Managers and Members..........................................................8
2.10 Limited Liability..................................................................8
ARTICLE III MANAGEMENT....................................................................8
3.1 Management and Control.............................................................8
3.2 Actions by the Board of Managers...................................................9
3.3 Officers..........................................................................10
3.4 Meetings of Members...............................................................10
3.5 Custody of Assets of the Master Fund..............................................11
3.6 Other Activities of Members and Managers..........................................11
3.7 Duty of Care......................................................................12
3.8 Indemnification...................................................................12
3.9 Fees, Expenses and Reimbursement..................................................14
ARTICLE IV TERMINATION OF STATUS OF MANAGERS; TRANSFERS AND REPURCHASES...................15
4.1 Termination of Status of a Manager................................................15
4.2 Removal of the Managers...........................................................15
4.3 Transfer of Interests of Members..................................................15
4.4 Repurchase of Interests...........................................................16
ARTICLE V CAPITAL........................................................................18
5.1 Contributions to Capital..........................................................18
5.2 Rights of Members to Capital......................................................19
5.3 Capital Accounts..................................................................19
5.4 Allocation of Net Profit and Net Loss; Allocation of Offering Costs...............19
5.5 Allocation of Certain Expenditures................................................19
5.6 Reserves..........................................................................20
5.7 Allocation of Organization Expenses...............................................20
5.8 Tax Allocations...................................................................21
5.8 Distributions.....................................................................22
5.9 Withholding.......................................................................22
ARTICLE VI DISSOLUTION AND LIQUIDATION...................................................23
6.1 Dissolution.......................................................................23
6.2 Liquidation of Assets.............................................................23
ARTICLE VII ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS.................................24
7.1 Accounting and Reports............................................................24
7.2 Determinations by the Board of Managers...........................................25
7.3 Valuation of Assets...............................................................25
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ARTICLE VIII MISCELLANEOUS PROVISIONS....................................................26
8.1 Amendment of Limited Liability Company Agreement..................................26
8.2 Special Power of Attorney.........................................................27
8.3 Notices...........................................................................28
8.4 Agreement Binding Upon Successors and Assigns.....................................28
8.5 Applicability of 1940 Act and Form N-2............................................28
8.6 Choice of Law.....................................................................29
8.7 Not for Benefit of Creditors......................................................29
8.8 Consents..........................................................................29
8.9 Merger and Consolidation..........................................................29
8.10 Pronouns..........................................................................29
8.11 Confidentiality...................................................................29
8.12 Certification of Non-Foreign Status...............................................30
8.13 Severability......................................................................30
8.14 Filing of Returns.................................................................30
8.15 Tax Matters Partner...............................................................31
8.16 Section 754 Election..............................................................31
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EXCELSIOR ABSOLUTE RETURN FUND OF FUNDS MASTER FUND, LLC
LIMITED LIABILITY COMPANY AGREEMENT
THIS LIMITED LIABILITY COMPANY AGREEMENT of Excelsior Absolute Return
Fund of Funds Master Fund, LLC (the "Master Fund") is dated as of July __, 2003,
by and among Xxxxxxxx X. Xxxxxx, Xxxxxxxx X. Xxxxxxxx, Xxxxxxx Xxxxxxxx and
Xxxxxx X. XxXxxxxx, as the Managers, Xxxxxxx Xxxxxxxx, as the Organizational
Member, and those persons hereinafter admitted as Members.
W I T N E S S E T H :
WHEREAS, the Master 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 June 17, 2003.
NOW, THEREFORE, for and in consideration of the foregoing and the mutual
covenants hereinafter set forth, it is hereby agreed as follows:
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ARTICLE I
DEFINITIONS
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For purposes of this Agreement:
Administrator The person who provides administrative
services to the Master Fund pursuant to
an administrative services agreement.
Adviser The person who at any particular time
serves as the investment adviser to the
Master 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, as such term is
defined by the 1940 Act, of a person.
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 hereof.
Capital Account With respect to each Member, the capital
account established and maintained on
behalf of each Member pursuant to
Section 5.3 hereof.
Certificate The Certificate of Formation of the
Master Fund and any amendments thereto
as filed with the office of the
Secretary of State of Delaware.
Closing Date The first date on or as of which a
Member other than the Organizational
Member is admitted to the Master Fund.
Code The United States Internal Revenue Code
of 1986, as 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 Master
Fund is made pursuant to
Section 5.1 hereof;
(4) any day on which the Master
Fund repurchases any
Interest on portion of an
Interest 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.
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Fiscal Year The period commencing on the Closing
Date and ending on March 31, 2004, 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 Master Fund.
Form N-2 The Master Fund's Registration Statement
on Form N-2 filed with the Securities
and Exchange Commission, as amended from
time to time.
Independent Managers Those Managers who are not "interested
persons," as such term is defined by the
1940 Act, of the Master Fund.
Interest The entire ownership interest in the
Master Fund at any particular time of a
Member, or other person to whom an
Interest of a Member or portion thereof
has been transferred pursuant to Section
4.4 hereof, including the rights and
obligations of such Member or other
person under this Agreement and the
Delaware Act.
Investment Advisory A separate written agreement entered
Agreement into by the Master Fund pursuant to
which the Adviser provides Management
Services to the Master Fund.
Investment Percentage A percentage established for each Member
on the Master 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%.
Management Services Such investment and other services as
the Adviser is required to provide to
the Master Fund pursuant to the
Investment Advisory Agreement as
contemplated by Section 3.9(a) hereof.
Manager An individual designated as a manager of
the Master Fund pursuant to the
provisions of Section 2.6 hereof and who
serves on the Board of Managers of the
Master Fund.
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Master Fund The limited liability company governed
hereby, as such limited liability
company may from time to time be
constituted.
Member Any person who shall have been admitted
to the Master Fund as a member
(including any Manager in such person's
capacity as a member of the Master Fund
but excluding any Manager in such
person's capacity as a Manager of the
Master Fund) until the Master Fund
repurchases the entire Interest of such
person as a member pursuant to Section
4.4 hereof or a substituted Member or
Members are admitted with respect to any
such person's entire Interest as a
member pursuant to Section 4.3 hereof;
such term includes the Adviser to the
extent the Adviser makes a capital
contribution to the Master Fund and
shall have been admitted to the Master
Fund as a member.
Net Assets The total value of all assets of the
Master Fund, less an amount equal to all
accrued debts, liabilities and
obligations of the Master Fund,
calculated before giving effect to any
repurchases of Interests to be effected
as of the date such value is determined.
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 Master 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 Sections 5.5
and 5.6 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.
Officer An individual designated as an officer
of the Master Fund pursuant to the
provisions of Section 3.3 hereof and who
serves as an officer of the Master Fund.
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Organization Expenses The expenses incurred by the Master Fund
in connection with its formation, its
initial registration as an investment
company under the 1940 Act, and the
initial offering of Interests.
Organizational Member Xxxxxxx Xxxxxxxx
Portfolio Funds Unregistered investment funds and
registered investment companies.
Portfolio Managers Investment advisers (which may include
the Adviser) who enter into advisory
agreements to manage a designated
portfolio of investments for the Master
Fund or who manage Portfolio Funds in
which the Master Fund has invested.
Securities Securities (including, without
limitation, equities, debt obligations,
options, 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, as well as investments
in registered investment companies and
private investment funds.
Taxable Year The 12-month period ending December 31
of each year.
Transfer The assignment, transfer, sale,
encumbrance, pledge or other disposition
of all or any portion of an Interest,
including any right to receive any
allocations and distributions
attributable to an Interest.
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ARTICLE II
ORGANIZATION; ADMISSION OF MEMBERS
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2.1 FORMATION OF LIMITED LIABILITY COMPANY.
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 Master 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 Master 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 Master Fund.
2.2 NAME.
The name of the Master Fund shall be "Excelsior Absolute Return
Fund of Funds Master Fund, 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.
2.3 PRINCIPAL AND REGISTERED OFFICE.
The Master Fund shall have its principal office at 000 Xxxx
Xxxxx Xx., Xxxxxxxx, Xxxxxxxxxxx 00000, or at such other place designated from
time to time by the Board of Managers.
The Master Fund shall have its registered office in Delaware at
000 Xxxxx XxXxxx Xxxxxxx, Xxxxx, Xxxxxxxx 00000, and shall have National
Corporate Research, Ltd. as its registered agent for service of process in
Delaware, unless and until a different registered office or agent is designated
by the Board of Managers.
2.4 DURATION.
The term of the Master Fund commenced on the filing of the
Certificate with the Secretary of State of Delaware and shall continue until the
Master Fund is dissolved pursuant to Section 6.1 hereof.
2.5 BUSINESS OF THE MASTER FUND.
(a) The business of the Master 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
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transactions relating thereto or otherwise. The Master 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. The Master Fund shall be operated subject to any applicable
restrictions of the Bank Holding Company Act of 1956, as amended.
(b) The Master 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.
2.6 BOARD OF MANAGERS.
(a) Prior to the Closing Date, the Organizational Member may
designate such persons who shall agree to be bound by all of the terms of this
Agreement to serve as the 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 the signature page of the Master Fund's
subscription agreement, a Member admitted on the Closing Date shall be deemed to
have voted for the election of each of the Managers to the Board of Managers.
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 3.4 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 Master 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 Master 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 Master Fund, the Adviser 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 Master 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 Master 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 Master Fund shall be dissolved pursuant to Section 6.1 hereof and the
assets of the Master Fund shall be liquidated and distributed pursuant to
Section 6.2 hereof.
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2.7 MEMBERS.
The Board of Managers may admit one or more Members as of the
first day of each calendar quarter; provided, however, that the Master Fund may,
in the discretion of the Board of Managers, admit Members more frequently.
Subject to the foregoing terms, Members may be admitted to the Master Fund
subject to the condition that each such Member shall execute an appropriate
signature page of this Agreement or of the Master Fund's 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 absolute discretion reject
any subscription for an Interest. The admission of any person as a Member shall
be effective upon the revision of the books and records of the Master Fund to
reflect the name and the contribution to the capital of the Master Fund of such
additional Member.
2.8 ORGANIZATIONAL MEMBER.
The initial contribution of capital to the Master Fund by the
Organizational Member shall be represented by an Interest, which Interest shall
have the same rights as other Interests held by the Members.
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.
2.10 LIMITED LIABILITY.
Except as provided under applicable law, a Member shall not be
liable for the Master 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 Master Fund's debts, obligations and
liabilities.
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ARTICLE III
MANAGEMENT
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3.1 MANAGEMENT AND CONTROL.
(a) Management and control of the business of the Master
Fund shall be vested in the Board of Managers, which shall have the right, power
and authority, on behalf of the Master 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
Master Fund and their duties hereunder. No Manager shall have the authority
individually to act on behalf of or to bind the Master Fund except within the
scope of such Manager's authority as delegated by
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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 Master 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 Master 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 corporation who is not an "interested
person," as such term is defined in the 1940 Act of such company. During any
period in which the Master Fund shall have no Managers, the Adviser shall
continue to serve as the investment adviser to the Master Fund and to provide
the Management Services to the Master Fund.
(b) Each Member agrees not to treat, on his personal income
tax return or in any claim for a tax refund, any item of income, gain, loss,
deduction or credit in a manner inconsistent with the treatment of such item by
the Master Fund. The Board of Managers shall have the exclusive authority and
discretion to make any elections required or permitted to be made by the Master
Fund under any provisions of the Code or any other revenue laws.
(c) Members shall have no right to participate in and shall
take no part in the management or control of the Master Fund's business and
shall have no right, power or authority to act for or bind the Master 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.
(d) 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 Master Fund, with such titles and authority as may
be determined by the Board of Managers consistent with applicable law.
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.
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3.3 OFFICERS
(a) The executive Officers of the Fund shall be a President,
a Treasurer and a Secretary. If the Board of Managers has designated a Principal
Manager pursuant to Section 3.2(b) hereof, then the Principal Manager shall also
be an executive Officer. The Board of Managers may elect one or more
Vice-Presidents, and each such Vice-President shall be an executive Officer. The
President shall be the chief executive officer of the Master Fund. The Principal
Manager, if there be one, shall be elected from among the persons serving as
Managers, but no other Officer need be a Manager. The Board of Managers may also
elect, or may delegate to the President authority to appoint, remove, or fix the
duties, compensation or terms of office of, one or more other Officers as the
Board of Managers shall at any time and from time to time deem to be advisable.
Any two or more positions of Officer, except those of President and
Vice-President, may be held by the same person. A person holding more than one
office may not act in more than one capacity to execute, acknowledge or verify
on behalf of the Fund an instrument required by law to be executed, acknowledged
and verified by more than one Officer.
(b) The Officers shall be elected annually at a meeting of
the Board of Managers. Each Officer shall hold office until his successor is
elected or appointed or until his earlier displacement from office by
resignation, removal or otherwise; provided, that if the term of office of any
Officer shall have been fixed by the Board of Managers, or by the President
acting under authority delegated by the Board of Managers, such Officer shall
cease to hold such office no later than the date of expiration of such term,
regardless of whether any other person shall have been elected or appointed to
succeed him. Any Officer may resign at any time by written notice to the Master
Fund. Any Officer may be removed at any time by the Board of Managers or by the
President acting under authority delegated by the Board of Managers if in its or
his judgment the best interest of the Master Fund would be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the
person so removed. Election or appointment of an Officer shall not of itself
create contract rights between the Master Fund and such Officer.
(c) If the office of any Officer becomes vacant for any
reason, the vacancy may be filled by the Board of Managers or by the President
acting under authority delegated by the Board of Managers. Each Officer elected
or appointed to fill a vacancy shall hold office for the balance of the term for
which his predecessor was elected or appointed.
(d) All Officers as between themselves and the Master Fund
shall have such powers, perform such duties and be subject to such restrictions,
if any, in the management of the Master Fund as may be provided in this
Agreement or, to the extent not so provided, as may be prescribed by the Board
of Managers or by the President acting under authority delegated by the Board of
Managers.
3.4 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 25% or more 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
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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, and matters incidental thereto, 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 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 Master 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
Master 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.
3.5 CUSTODY OF ASSETS OF THE MASTER FUND.
The physical possession of all funds, Securities and other
properties of the Master Fund shall at all times, be held, controlled and
administered by one or more custodians retained by the Master Fund in accordance
with the requirements of the 1940 Act and the rules thereunder.
3.6 OTHER ACTIVITIES OF MEMBERS AND MANAGERS.
(a) The Managers shall not be required to devote all of
their time to the affairs of the Master Fund, but shall devote such time as may
reasonably be required to perform their obligations under this Agreement.
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(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, Advisers 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.
3.7 DUTY OF CARE.
(a) A Manager shall not be liable to the Master Fund or to
any of its Members for any loss or damage occasioned by any act or omission in
the performance of his or her duties, or otherwise in his or her capacity as a
Manager, 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 such Manager constituting willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the performance of
his or her duties to the Master Fund.
(b) Members not in breach of any obligation hereunder or
under any agreement pursuant to which the Member subscribed for an Interest
shall be liable to the Master Fund, any Member or third parties only as provided
under the Delaware Act.
3.8 INDEMNIFICATION.
(a) To the fullest extent permitted by law, the Master Fund
shall, subject to Section 3.8(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 Master Fund or the past or
present performance of services to the Master 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 3.8 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 3.8 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
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penalties), may be paid from time to time by the Master 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
Master Fund amounts so paid if it shall ultimately be determined that
indemnification of such expenses is not authorized under Section 3.8(a) hereof;
provided, however, that (i) such indemnitee shall provide security for such
undertaking, (ii) the Master 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 Master 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 3.8(a) hereof if (i) approved as in the best
interests of the Master 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 acted in good faith and in the reasonable belief
that such actions were in the best interests of the Master Fund and that such
indemnitee is not liable to the Master 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 Master 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 3.8 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 Master 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 3.8 it shall be a defense
that, and (ii) in any suit in the name of the Master Fund to recover any
indemnification or advancement of expenses made pursuant to this Section 3.8 the
Master Fund shall be entitled to recover such expenses upon a final adjudication
that, the Manager or other person claiming a right
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to indemnification under this Section 3.8 has not met the applicable standard of
conduct set forth in this Section 3.8. 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 3.8, 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 3.8 shall be on the Master Fund (or any Member acting derivatively or
otherwise on behalf of the Master Fund or its Members).
(e) An indemnitee may not satisfy any right of
indemnification or advancement of expenses granted in this Section 3.8 or to
which such indemnitee may otherwise be entitled except out of the assets of the
Master 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
3.8 shall affect the power of the Master Fund to purchase and maintain liability
insurance on behalf of any Manager or other person.
3.9 FEES, EXPENSES AND REIMBURSEMENT.
(a) So long as the Adviser provides Management Services to
the Master Fund, it shall be entitled to receive fees for such services as may
be agreed to by the Adviser and the Master Fund pursuant to the Investment
Advisory Agreement.
(b) The Board of Managers may cause the Master Fund to
compensate each Manager who is not an officer or employee of the Adviser (or of
any affiliate of the Adviser) for his or her services as such and such Manager
shall be reimbursed by the Master Fund for travel expenses incurred by him in
performing his duties under this Agreement.
(c) The Master Fund shall bear all of its own costs and
expenses incurred in its business and operations, other than those specifically
required to be borne by the Adviser or another party pursuant to the Investment
Advisory Agreement or another agreement with the Master Fund. The Adviser shall
be entitled to reimbursement from the Master Fund for any expenses that it pays
on behalf of the Master Fund. Costs and expenses to be borne by the Master Fund
include, but are not limited to, the following: (i) all costs and expenses
related to investment expenses, including, but not limited to, fees paid
directly or indirectly to Portfolio Managers, all costs and expenses directly
related to portfolio transactions and positions for the Master Fund's account
such as direct and indirect expenses associated with the Master Fund's
investments, including its investments in Portfolio Funds, transfer taxes and
premiums, taxes withheld on foreign dividends, brokerage commissions, interest
and commitment fees on loans and debit balances, borrowing charges on securities
sold short, dividends on securities sold but not yet purchased and margin fees;
(ii) any non-investment related interest expense; (iii) fees and disbursements
of any attorneys and accountants engaged on behalf of the Master Fund; (iv)
audit and tax preparation expenses; (v) administrative expenses and fees;
custody and escrow fees and expenses; (vi) the costs of an errors and
omissions/directors and officers liability insurance and a fidelity bond; (vii)
the advisory fee payable to the Adviser; (viii) fees and travel-related expenses
of Managers who are not employees of the Adviser or any affiliate of the
Adviser; (ix) all costs
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and charges for equipment or services used in communicating information
regarding the Master Fund's transactions among the Adviser and any custodian or
other agent engaged by the Master Fund; (x) any extraordinary expenses; and such
other expenses as may be approved from time to time by the Board of Managers.
(d) Subject to such limitations as may be imposed by the
1940 Act or other applicable laws, from time to time the Master Fund may, alone
or in conjunction with the Adviser, any Affiliate of the Adviser or other
registered or unregistered investment funds or other accounts for which the
Adviser or any Affiliate of the Adviser acts as general partner or investment
adviser, 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
----------
4.1 TERMINATION OF STATUS OF THE ADVISER.
The status of the Adviser shall terminate if the Investment
Advisory Agreement with the Adviser terminates and the Master Fund does not
enter into a new Investment Advisory Agreement with the Adviser, effective as of
the date of such termination.
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.
4.3 TRANSFER OF INTERESTS OF MEMBERS.
(a) An Interest of a Member may be Transferred only (i) by
operation of law pursuant to the death, divorce, bankruptcy, insolvency,
dissolution or adjudication of 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 Interest 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
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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 unless it consults with counsel to the Master Fund and
counsel to the Master Fund confirms that such Transfer will not cause the Master
Fund to be treated as a "publicly traded partnership" taxable as a corporation.
(b) The Board of Managers may not consent to a Transfer of
an Interest or a portion thereof of a Member unless: (i) the person to whom such
Interest is Transferred (or each of the person's beneficial owners if such
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 (ii) the entire Interest of the Member is
Transferred to a single transferee or, after the Transfer of a portion of an
Interest, the balance of the Capital Account of each of the transferee and
transferor is not less than $100,000 or such lesser amount as may be established
by the Board of Managers. Any transferee that acquires an Interest by operation
of law as the result of the death, divorce, bankruptcy, insolvency, dissolution
or adjudication of incompetency of a Member or otherwise, shall be entitled to
the allocations and distributions allocable to the Interest so acquired and to
Transfer such Interest 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 an Interest 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 Interest is transferred is
admitted to the Master 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 Master Fund in connection with such Transfer.
(c) Each Member shall indemnify and hold harmless the Master
Fund, the Managers, the Adviser, 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.
4.4 REPURCHASE OF INTERESTS.
(a) Except as otherwise provided in this Agreement, no
Member or other person holding an Interest or portion thereof shall have the
right to require the Master Fund to redeem for repurchase that Interest or
portion thereof. 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 Master Fund
to repurchase Interests or portions thereof pursuant to written tenders.
However, the Master Fund shall not offer to repurchase Interests on more than
two occasions during any one Fiscal Year unless it has received an opinion of
counsel to the Master Fund that such more frequent offers would not cause any
adverse tax consequences to the Master Fund or the Members. In determining
whether to cause the Master Fund to repurchase Interests or portions thereof
pursuant
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to written tenders, the Board of Managers shall consider, among other things,
the recommendation of the Adviser.
The Board of Managers shall cause the Master Fund to repurchase
Interests or portions thereof pursuant to written tenders only on terms
determined by the Board of Managers to be fair to the Master Fund and to all
Members (including persons holding Interests acquired from Members), as
applicable.
(b) The Adviser may tender its Interest or a portion thereof
as a Member under Section 4.4(a) hereof.
(c) The Board of Managers may cause the Master Fund to
repurchase an Interest or portion thereof of a Member or any person acquiring an
Interest 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 an Interest or portion thereof has been
transferred in violation of Section 4.3 hereof,
or such an Interest or portion thereof has
vested in any person by operation of law as the
result of the death, divorce, bankruptcy,
insolvency, dissolution, adjudication of
incompetency of a Member;
(2) ownership of such an Interest by a Member or
other person will cause the Master Fund to be in
violation of, or subject the Master Fund to
additional registration or regulation under, the
securities, commodities or other laws of the
United States or any other relevant
jurisdiction;
(3) such Member's continued participation in the
Master Fund may cause the Master Fund to be
classified as a "publicly traded partnership"
within the meaning of Section 7704 of the Code
and the Treasury Regulations thereunder; or
(4) any of the representations and warranties made
by a Member in connection with the acquisition
of an Interest or portion thereof was not true
when made or has ceased to be true.
(d) Repurchases of Interests or portions thereof by the
Master Fund shall be payable promptly after the date of each such repurchase or,
in the case of an offer by the Master Fund to repurchase Interests, promptly
after the expiration date of such repurchase offer in accordance with the terms
of such offer. Payment of the purchase price for an Interest (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 Interest
(or portion thereof) repurchased by the Master 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 Interest (or portion thereof)
-17-
repurchased by the Master Fund as of the date of such repurchase, determined
based on the audited financial statements of the Master 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
Securities (or any combination of 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 Master
Fund has requested withdrawal of its capital from any Portfolio Funds in order
to fund the repurchase of Interests, 10 business days after the Master Fund has
received at least 90% of the aggregate amount withdrawn by the Master Fund from
such Portfolio Funds.
(e) A Member may at any time submit to the Master Fund a
written request that the Master Fund repurchase the entire Interest of such
Member, as contemplated by Section 6.1(3) hereof. Any such request shall be sent
to the Master Fund by registered or certified mail, return receipt requested,
and shall be deemed valid upon receipt by the Member of a letter from the Master
Fund acknowledging its receipt of the request. The Master Fund shall send such
letter to the Member promptly upon its receipt of the Member's request.
----------
ARTICLE V
CAPITAL
----------
5.1 CONTRIBUTIONS TO CAPITAL.
(a) The minimum initial contribution of each Member to the
capital of the Master 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
Master Fund upon acceptance as a contribution to the capital of the Master Fund.
The Managers shall not be entitled to make voluntary contributions of capital to
the Master Fund as Managers of the Master Fund, but may make voluntary
contributions to the capital of the Master Fund as Members. The Adviser may make
voluntary contributions to the capital of the Master Fund as a Member.
(b) Members may make additional contributions to the capital
of the Master 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 Master Fund
except to the extent provided in Section 5.6 hereof. The minimum additional
capital contribution of a Member to the capital of the Master 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 Master Fund by any Member shall be payable in cash or readily available
funds on or before the date of the proposed contribution.
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5.2 RIGHTS OF MEMBERS TO CAPITAL.
No Member shall be entitled to interest on any contribution to
the capital of the Master Fund, nor shall any Member be entitled to the return
of any capital of the Master Fund except (i) upon the repurchase by the Master
Fund of a part or all of such Member's Interest pursuant to Section 4.5 hereof,
(ii) pursuant to the provisions of Section 5.6(c) hereof or (iii) upon the
liquidation of the Master 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 Master Fund's property or to compel any
sale or appraisal of the Master Fund's assets.
5.3 CAPITAL ACCOUNTS.
(a) The Master 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 such Member's initial contribution to the capital
of the Master Fund.
(c) Each Member's Capital Account shall be increased by the
sum of (i) the amount of additional contributions by such Member to the capital
of the Master 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 Interest, or portion thereof, of
such Member or distributions to such Member pursuant to Sections 4.5, 5.8 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 5.7 hereof.
5.4 ALLOCATION OF NET PROFIT AND NET LOSS; ALLOCATION OF OFFERING
COSTS.
As of the last day of each Fiscal Period, any Net Profit or Net
Loss for the Fiscal Period, and any offering costs required by applicable
accounting principles to be charged to capital that are paid or accrued during
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.
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 Master 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
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the close of the Fiscal Period during which any such items were paid or accrued
by the Master Fund.
5.6 RESERVES.
(a) 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 Adviser 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, may be proportionately charged or credited, as
appropriate, to the Capital Accounts of those persons who are Members at the
time when such reserve is created, increased or decreased, as the case may be;
provided, however, that if any such individual reserve item, adjusted by any
increase therein, exceeds the lesser of $500,000 or 1% of the aggregate value of
the Capital Accounts of all such Members, the amount of such reserve, increase,
or decrease shall instead be charged or credited to those parties who were
Members at the time, as determined by the Board of Managers in its sole
discretion, of the act or omission giving rise to the contingent liability for
which the reserve was established, increased or decreased in proportion to their
Capital Accounts at that time.
(b) To the extent permitted under applicable law, if at any
time an amount is paid or received by the Master Fund (other than contributions
to the capital of the Master Fund, distributions or repurchases of Interests or
portions thereof) and such amount exceeds the lesser of $500,000 or 1% of the
aggregate value of the Capital Accounts of all Members at the time of payment or
receipt and such amount was not accrued or reserved for but would nevertheless,
in accordance with the Master Fund's accounting practices, be treated as
applicable to one or more prior Fiscal Periods, then such amount shall be
proportionately charged or credited, as appropriate, to those persons who were
Members during such prior Fiscal Period or Periods.
(c) To the extent permitted under applicable law, if any
amount is required by paragraph (a) or (b) of this Section 5.6 to be charged or
credited to a person who is no longer a Member, such amount shall be paid by or
to such person, as the case may be, in cash, with interest from the date on
which the Board of Managers determines that such charge or credit is required.
In the case of a charge, the former Member shall be obligated to pay the amount
of the charge, plus interest as provided above, to the Master Fund on demand;
provided, however, that (i) in no event shall a former Member be obligated to
make a payment exceeding the amount of such Member's Capital Account at the time
to which the charge relates; and (ii) no such demand shall be made after the
expiration of three years since the date on which such person ceased to be a
Member. To the extent that a former Member fails to pay to the Master Fund, in
full, any amount required to be charged to such former Member pursuant to
paragraph (a) or (b), whether due to the expiration of the applicable limitation
period or for any other reason whatsoever, the deficiency shall be charged
proportionately to the Capital Accounts of the Members at the time of the act or
omission giving rise to the charge to the extent feasible, and otherwise
proportionately to the Capital Accounts of the current Members.
-20-
5.7 ALLOCATION OF ORGANIZATION EXPENSES.
(a) As of the first Expense Allocation Date, Organization
Expenses shall be allocated among and debited against the Capital Accounts of
the Members in accordance with their respective Capital Percentages on such
Expense Allocation Date.
(b) As of each Expense Allocation Date following the first
Expense Allocation Date, all amounts previously debited against the Capital
Account of a Member pursuant to this Section 5.7 on the preceding Expense
Allocation Date will be credited to the Capital Account of such Member, and
Organization Expenses shall then be reallocated among and debited against the
Capital Accounts of all Members in accordance with their respective Capital
Percentages.
5.8 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 5.8 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) and (g), 1.704-1(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
Regulation Section 1.704-1(b)(2)(ii)(d).
If the Master 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 all the Interests of one or more Positive Basis
Members (as hereinafter defined) are repurchased by the Master 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
hereof.
If the Master 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 Interests of one or more Negative Basis
Members (as hereinafter defined) are repurchased by the Master 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
hereof.
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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 as of such time exceeds its "adjusted tax basis," for Federal income
tax purposes, in its Interest 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 without regard to
such Member's share of the liabilities of the Master Fund under Section 752 of
the Code), and (ii) the term "Positive Basis Member" shall mean any Member whose
Interest is repurchased by the Master 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
Interest as of such time is less than its "adjusted tax basis," for Federal
income tax purposes, in its Interest 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 without regard
to such Member's share of the liabilities of the Master Fund under Section 752
of the Code), and (ii) the term "Negative Basis Member" shall mean any Member
whose Interest is repurchased by the Master 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.
5.8 DISTRIBUTIONS.
The Board of Managers, in its sole discretion, may authorize the
Master 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.
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 from any
distribution 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 Master Fund with respect to any amount distributed by the Master Fund 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 Interest shall pay to the Master Fund as a contribution to the
capital of the Master 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
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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 Master 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
----------
6.1 DISSOLUTION.
The Master Fund shall be dissolved:
(1) upon the affirmative vote to dissolve the Master
Fund by: (i) the Board of Managers or (ii)
Members holding at least two-thirds (2/3) of the
total number of votes eligible to be cast by all
Members;
(2) upon the failure of Members to elect a successor
Manager at a meeting called by the Adviser in
accordance with Section 2.6(c) hereof when no
Manager remains to continue the business of the
Master Fund;
(3) 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(e) hereof, a written
notice to the Master Fund requesting to tender
its entire Interest for repurchase by the Master
Fund if such Interest has not been repurchased
by the Master Fund; or
(4) as required by operation of law.
Dissolution of the Master Fund shall be effective on the later of the day on
which the event giving rise to the dissolution shall occur or the conclusion of
any applicable 60 day period during which the Board of Managers and Members may
elect to continue the business of the Master Fund as provided above, but the
Master Fund shall not terminate until the assets of the Master Fund have been
liquidated in accordance with Section 6.2 hereof and the Certificate has been
canceled.
6.2 LIQUIDATION OF ASSETS.
(a) Upon the dissolution of the Master Fund as provided in
Section 6.1 hereof, the Board of Managers shall promptly appoint the Board of
Managers or the Adviser as the
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liquidator and the Board of Managers or the Adviser shall liquidate the business
and administrative affairs of the Master Fund, except that if the Board of
Managers does not appoint the Board of Managers or the Adviser as the liquidator
or the Board of Managers or the Adviser 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 Master 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 Master 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 Master 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; and
(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(a)(3).
(b) Anything in this Section 6.2 to the contrary
notwithstanding, upon dissolution of the Master Fund, the Board of Managers or
other liquidator may distribute ratably in kind any assets of the Master 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
----------
7.1 ACCOUNTING AND REPORTS.
(a) The Master 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 Master Fund. The Master Fund's
accounts shall be maintained in U.S. currency.
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(b) After the end of each Taxable Year, the Master Fund
shall furnish to each Member such information regarding the operation of the
Master Fund and such Member's Interest 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 Master Fund shall furnish to each Member a semi-annual report
and an annual report containing the information required by such Act. The Master
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 auditing
standards. The Master Fund may furnish to each Member such other periodic
reports as it deems necessary or appropriate in its discretion.
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 the foregoing
as it considers appropriate to reflect fairly and accurately the financial
results of the Master Fund and the intended allocation thereof among the
Members.
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 Master 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
Master Fund, no value shall be placed on the goodwill or name of the Master
Fund, or the office records, files, statistical data or any similar intangible
assets of the Master Fund not normally reflected in the Master 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 Master Fund will value Interests in the Master Fund
at fair value, which ordinarily will be the value determined by the board of
managers of the Master Fund in accordance with the policies established by the
Master Fund.
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(c) The value of Securities and other assets of the Master
Fund and the net worth of the Master 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
----------
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 Master 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
Master 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 have its entire Interest repurchased by the Master
Fund.
(c) The power of the Board of Managers to amend this
Agreement at any time without the consent of the other Members as set forth in
paragraph (a) of this Section 8.01 shall specifically include the power to:
(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; and
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(3) amend this Agreement to make such changes as may
be necessary or advisable to ensure that the
Master Fund will not be treated as an
association or as 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.
8.2 SPECIAL POWER OF ATTORNEY.
(a) Each Member hereby irrevocably makes, constitutes and
appoints each Manager, acting severally, and any liquidator of the Master 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 Master Fund;
and
(3) all such other instruments, documents and
certificates that, in the opinion of legal
counsel to the Master 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 Master 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 Master 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 Master Fund without
such Member's consent. If an amendment to the Certificate or this Agreement or
any action by or with respect to the Master 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 Master Fund.
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(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
Master 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 Interest, except that where the
transferee thereof has been approved by the
Board of Managers for admission to the Master
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.
8.3 NOTICES.
Except as otherwise set forth in this Agreement, notices that
are required to be provided under this Agreement shall be made, if to a Member,
by regular mail, or if to the Board of Managers or the Adviser, 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
Master 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.
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.
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
Master 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.
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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.
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
Master 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.
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 Master Fund.
8.9 MERGER AND CONSOLIDATION.
(a) The Master 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 Master 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 company.
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.
8.11 CONFIDENTIALITY.
(a) A Member may obtain from the Master Fund such
information regarding the affairs of the Master Fund as is just and reasonable
under the Delaware Act, subject to
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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 Master Fund. Accordingly, in addition to any and
all other remedies at law or in equity to which the non-breaching Members and
the Master 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 Master 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.
8.12 CERTIFICATION OF NON-FOREIGN STATUS.
Each Member or transferee of an Interest from a Member shall
certify, upon admission to the Master 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 Master Fund, and shall notify the Master Fund within 30 days of
any change in such Member's status. Any Member who shall fail to provide such
certification when requested to do so by the Board of Managers may be treated as
a non-United States Person for purposes of U.S. Federal tax withholding.
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).
8.14 FILING OF RETURNS.
The Board of Managers or its designated agent shall prepare and
file, or cause the accountants of the Master Fund to prepare and file, a Federal
information tax return in
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compliance with Section 6031 of the Code and any required state and local income
tax and information returns for each tax year of the Master Fund.
8.15 TAX MATTERS PARTNER.
(a) A Manager who is a Member shall be designated on the
Master Fund's annual Federal income tax return, and have full powers and
responsibilities, as the Tax Matters Partner of the Master Fund for purposes of
Section 6231(a)(7) of the Code. In the event that no Manager is a Member, a
Member shall be so designated. Should any Member be designated as the Tax
Matters Partner for the Master Fund pursuant to Section 6231(a)(7) of the Code,
it shall, and each Member hereby does, to the fullest extent permitted by law,
delegate to a Manager selected by the Board of Managers all of its rights,
powers and authority to act as such Tax Matters Partner and hereby constitutes
and appoints such Manager 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. Any Member
designated as the Tax Matters Partner for the Master Fund under Section
6231(a)(7) of the Code shall be indemnified and held harmless by the Master 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 Master Fund
holding such interests through such Pass-Thru Member. In the event the Master
Fund shall be the subject of an income tax audit by any Federal, state or local
authority, to the extent the Master 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 Master Fund and each Member thereof. All expenses incurred
in connection with any such audit, investigation, settlement or review shall be
borne by the Master Fund.
8.16 SECTION 754 ELECTION.
In the event of a distribution of Master 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 Master Fund, at the request of a
Member, the Board of Managers, in its discretion, may cause the Master Fund to
elect, pursuant to Section 754 of the Code, or the corresponding provision of
subsequent law, to adjust the basis of the Master Fund property as provided by
Sections 734 and 743 of the Code.
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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:
----------------------------------------
Name: Xxxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxxx
----------------------------------------
Name: Xxxxxx X. XxXxxxxx
ORGANIZATIONAL MEMBER:
----------------------------------------
Name: Xxxxxxx Xxxxxxxx
MEMBERS:
Each person who shall sign a Member Signature
Page and who shall be accepted by the Board of
Managers to the Master Fund as a Member.
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