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EXHIBIT (a)(2)
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WHISTLER FUND, L.L.C.
(A DELAWARE LIMITED LIABILITY COMPANY)
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LIMITED LIABILITY COMPANY AGREEMENT
DATED AS OF JULY 14, 1999
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ONE WORLD FINANCIAL CENTER, 31ST FLOOR
000 XXXXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
(000) 000-0000
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS......................................................................................1
ARTICLE II ORGANIZATION; ADMISSION OF MEMBERS.............................................................10
2.1 Formation of Limited Liability Company.............................................................10
2.2 Name...............................................................................................10
2.3 Principal and Registered Office....................................................................10
2.4 Duration...........................................................................................10
2.5 Objective and Business of the Company..............................................................11
2.6 Board of Managers..................................................................................11
2.7 Members............................................................................................12
2.8 Special Advisory Member............................................................................12
2.9 Organizational Member..............................................................................12
2.10 Both Managers and Members.........................................................................12
2.11 Limited Liability.................................................................................13
ARTICLE III MANAGEMENT....................................................................................13
3.1 Management and Control.............................................................................13
3.2 Actions by the Board of Managers...................................................................14
3.3 Meetings of Members................................................................................14
3.4 Custody of Assets of the Company...................................................................15
3.5 Other Activities of Members and Managers...........................................................15
3.6 Duty of Care.......................................................................................16
3.7 Indemnification....................................................................................16
3.8 Fees, Expenses and Reimbursement...................................................................18
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ARTICLE IV TERMINATION OF STATUS OF ADVISER AND MANAGERS, TRANSFERS AND REPURCHASES.......................20
4.1 Termination of Status of the Adviser...............................................................20
4.2 Termination of Status of a Manager.................................................................20
4.3 Removal of the Managers............................................................................20
4.4 Transfer of Interests of Members...................................................................20
4.5 Transfer of Interests of Special Advisory Member...................................................21
4.6 Repurchase of Interests............................................................................21
ARTICLE V CAPITAL........................................................................................ 24
5.1 Contributions to Capital...........................................................................24
5.2 Rights of Members to Capital.......................................................................25
5.3 Capital Accounts...................................................................................25
5.4 Allocation of Net Profit and Loss..................................................................25
5.5 Allocation of Insurance Premiums and Proceeds......................................................25
5.6 Allocation of Certain Withholding Taxes and Other Expenditures.....................................26
5.7 Reserves...........................................................................................26
5.8 Incentive Allocation...............................................................................27
5.9 Allocation of Organizational Expenses..............................................................28
5.10 Tax Allocations...................................................................................28
5.11 Distributions.....................................................................................30
5.12 Foreign Withholding...............................................................................30
ARTICLE VI DISSOLUTION AND LIQUIDATION....................................................................31
6.1 Dissolution........................................................................................31
6.2 Liquidation of Assets..............................................................................31
ARTICLE VII ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS..................................................32
7.1 Accounting and Reports.............................................................................32
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7.2 Determinations by the Board of Managers............................................................33
7.3 Valuation of Assets................................................................................33
ARTICLE VIII MISCELLANEOUS PROVISIONS.....................................................................34
8.1 Amendment of Limited Liability Company Agreement...................................................34
8.2 Special Power of Attorney..........................................................................35
8.3 Notices............................................................................................36
8.4 Agreement Binding Upon Successors and Assigns......................................................36
8.5 Applicability of 1940 Act and Form N-2.............................................................37
8.6 Choice of Law; Arbitration.........................................................................37
8.7 Not for Benefit of Creditors.......................................................................38
8.8 Consents...........................................................................................38
8.9 Merger and Consolidation...........................................................................38
8.10 Pronouns..........................................................................................39
8.11 Confidentiality...................................................................................39
8.12 Certification of Non-Foreign Status...............................................................39
8.13 Severability......................................................................................40
8.14 Filing of Returns.................................................................................40
8.15 Tax Matters Partner...............................................................................40
8.16 Section 754 Election..............................................................................41
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WHISTLER FUND, L.L.C
LIMITED LIABILITY COMPANY AGREEMENT
THIS LIMITED LIABILITY COMPANY AGREEMENT of Whistler Fund, L.L.C. (the
"Company") is dated as of July 14, 1999 by and among Xxxxx X. Xxxxxxx, Xxxxxxx
X. Xxxxxx, Xxxx Xxxxxx and Xxxxxx X. Xxxxx as the Managers, CIBC Xxxxxxxxxxx
Advisers, L.L.C., as the Special Advisory Member, Xxxxx X. Xxxxxxx as the
Organizational Member, and those persons hereinafter admitted as Members.
W I T N E S S E T H :
WHEREAS, the Company 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 July 1, 1999;
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 Company
pursuant to an administrative services agreement.
ADVISER CIBC Xxxxxxxxxxx Advisers, L.L.C., a limited liability company
organized under Delaware law, or any person who may hereinafter
serve as the investment adviser to the Company pursuant to an
Investment Advisory Agreement.
ADVISERS ACT The Investment Advisers Act of 1940 and the rules, regulations
and orders thereunder, as amended from time to time, or any
successor law.
AFFILIATE An affiliated person of a person as such term is defined in the
1940 Act.
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AGREEMENT This Limited Liability Company Agreement, as amended from time
to time.
ALLOCATION CHANGE With respect to each Member for each Allocation Period, the
difference between:
(1) the sum of (a) the balance of such Member's Capital
Account as of the close of the Allocation Period (after
giving effect to all allocations to be made to such
Member's Capital Account as of such date other than any
Incentive Allocation to be debited against such Member's
Capital Account), plus (b) any debits to such Member's
Capital Account during the Allocation Period to reflect
any actual or deemed distributions or repurchases with
respect to such Member's Interest, plus (c) any debits to
such Member's Capital Account during the Allocation
Period to reflect any Insurance premiums allocable to
such Member, plus (d) any debits to such Member's Capital
Account during the Allocation Period to reflect any items
allocable to such Member's Capital Account pursuant to
Section 5.6 hereof; and
(2) the sum of (a) the balance of such Member's Capital
Account as of the commencement of the Allocation Period,
plus (b) any credits to such Member's Capital Account
during the Allocation Period to reflect any
contributions by such Member to the capital of the
Company, plus (c) any credits to such Member's Capital
Account during the Allocation Period to reflect any
Insurance proceeds allocable to such Member.
If the amount specified in clause (1) exceeds the amount specified
in clause (2), such difference shall be a POSITIVE ALLOCATION
CHANGE, and if the amount specified in clause (2) exceeds the amount
specified in clause (1), such difference shall be a NEGATIVE
ALLOCATION CHANGE.
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ALLOCATION PERIOD With respect to each Member, the period commencing as of the date
of admission of such Member to the Company, and thereafter each
period commencing as of the day following the last day of the
preceding Allocation Period with respect to such Member, and
ending at the close of business on the first to occur of the
following:
(1) the last day of a Fiscal Year;
(2) the day as of which the Company entire Interest of
such Member;
(3) the day as of which the Company admits as a substituted
Member a person to whom the Interest of such Member has
been Transferred (unless there is no change of beneficial
ownership); and
(4) the day as of which the Adviser's status as the Special
Advisory Member is terminated pursuant to Section 4.1
hereof.
BOARD OF MANAGERS The Board of Managers established pursuant to Section 2.6.
CAPITAL ACCOUNT With respect to each Member, the capital account established and
maintained on behalf of each Member pursuant to Section 5.3 hereof.
CAPITAL PERCENTAGE A percentage established for each Member on the Company's books as
of each Expense Allocation Date. The Capital Percentage of a Member
on an Expense Allocation Date shall be determined by dividing the
amount of capital contributed to the Company by the Member pursuant
to Section 5.1 hereof by the sum of the capital contributed to the
Company by each Member pursuant to Section 5.1 hereof on or prior
to such Expense Allocation Date. The sum of the Capital Percentages
of all Members on each Expense Allocation Date shall equal 100%.
CERTIFICATE The Certificate of Formation of the Company and any amendments
thereto as filed with the office of the Secretary of State of
Delaware.
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CIBC WM CIBC World Markets Corp., or any successor thereto.
CIBC WM SERVICES Such administrative services as CIBC WM shall provide to the
Company pursuant to a separate written agreement with the
Company as contemplated by Section 3.8(a) hereof.
CLOSING DATE The first date on or as of which a Member other than the
Organizational Member is admitted to the Company.
CODE The United States Internal Revenue Code of 1986, as amended and as
hereafter amended from time to time, or any successor law.
COMPANY The limited liability company governed hereby, as such limited
liability company may from time to time be constituted.
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.
EXPENSE ALLOCATION The Closing Date, and thereafter each day on or before December 1,
DATE 1999, as of which a contribution to the capital of the Company is
made pursuant to Section 5.1 hereof.
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 day preceding any day as of which a contribution to
the capital of the Company is made pursuant to Section
5.1; or
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(3) any day (other than one specified in clause (2) above) as
of which this Agreement provides for any amount to be
credited to or debited against the Capital Account of any
Member, other than an amount to be credited to or
debited against the Capital Accounts of all Members in
accordance with their respective Investment Percentages.
FISCAL YEAR The period commencing on the Closing Date and ending on December 31,
1999, and thereafter each period commencing on January 1 of each
year and ending on December 31 of each year (or on the date of a
final distribution pursuant to Section 6.2 hereof), unless the Board
of Managers shall elect another fiscal year for the Company that is
a permissible taxable year under the Code.
FORM N-2 The Company's Registration Statement on Form N-2 filed with the
Securities and Exchange Commission, as amended from time to time.
INCENTIVE ALLOCATION With respect to each Member, 10% of the amount, determined as of the
close of each Allocation Period with respect to such Member, by
which such Member's Positive Allocation Change for such Allocation
Period, if any, exceeds any positive balance in such Member's Loss
Recovery Account as of the most recent prior date as of which any
adjustment has been made thereto.
INDEPENDENT MANAGERS Those Managers who are not "interested persons" of the Company as
such term is defined in the 1940 Act.
INSURANCE One or more "key man" insurance policies on the life of any
principal of a member of the Adviser, the benefits of which are
payable to the Company.
INTEREST The entire ownership interest in the Company at any particular
time of a Member or the Special Advisory 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.
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INVESTMENT ADVISORY A separate written agreement entered into by the Company pursuant to
AGREEMENT which the Adviser provides investment advisory services to the
Company.
INVESTMENT FUNDS Unregistered general or limited partnerships or other pooled
investment vehicles and registered investment companies which are
advised by an Investment Manager or Subadviser.
INVESTMENT MANAGERS Portfolio managers among which the Company deploys some or all of
its assets.
INVESTMENT PERCENTAGE A percentage established for each Member on the Company'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%.
LOSS RECOVERY ACCOUNT A memorandum account to be recorded in the books and records of the
Company with respect to each Member, which shall have an initial
balance of zero and which shall be adjusted as follows:
(1) As of the first day after the close of each Allocation
Period for such Member, the balance of the Loss Recovery
Account shall be increased by the amount, if any, of
such Member's Negative Allocation Change for such
Allocation Period and shall be reduced (but not below
zero) by the amount, if any, of such Member's Positive
Allocation Change for such Allocation Period.
(2) The balance of the Loss Recovery Account shall be reduced
(but not below zero) as of the first date as of which the
Capital Account balance of any Member is reduced as a
result of repurchase or transfer with respect to such
Member's Interest by an amount determined by multiplying
(a) such positive balance by b) a fraction, (i) the
numerator of which is equal to the amount of the
repurchase or transfer, and (ii) the denominator
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of which is equal to the balance of such Member's Capital
Account immediately before giving effect to such
repurchase or transfer.
No transferee of any Interest shall succeed to any Loss Recovery
Account balance or portion thereof attributable to the
transferor unless the Transfer by which such transferee received
such Interest did not involve a change of beneficial ownership.
MANAGER An individual designated as a manager of the Company pursuant to the
provisions of Section 2.6 of the Agreement and who serves on the
Board of Managers of the Company.
MEMBER Any person who shall have been admitted to the Company as a member
(including any Manager in such person's capacity as a member of the
Company but excluding any Manager in such person's capacity as a
Manager of the Company) until the Company repurchases the entire
Interest of such person as a member pursuant to Section 4.6 hereof
or a substituted Member or Members are admitted with respect to any
such person's entire Interest as a member pursuant to Section 4.4
hereof; such term includes the Adviser to the extent the Adviser
makes a capital contribution to the Company and shall have been
admitted to the Company as a member, and shall not include the
Special Advisory Member.
NEGATIVE ALLOCATION The meaning given such term in the definition of Allocation Change.
CHANGE
NET ASSETS The total value of all assets of the Company, less an amount equal
to all accrued debts, liabilities and obligations of the Company,
calculated before giving effect to any repurchases of Interests.
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 Company, at the
close of business on the Closing Date), such amount to be adjusted
to exclude:
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(1) the amount of any Insurance premiums or proceeds to be
allocated among the Capital Accounts of the Members
pursuant to Section 5.5 hereof;
(2) any items to be allocated among the Capital Accounts of
the Members on a basis which is not in accordance with
the respective Investment Percentages of all Members as
of the commencement of such Fiscal Period pursuant to
Sections 5.6 and 5.7 hereof; and
(3) Organizational Expenses allocated among the Capital
Accounts of the Members pursuant to Section 5.9 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.
1934 ACT The Securities Exchange Act of 1934 and the rules, regulations and
orders thereunder, as amended from time to time, or any successor
law.
ORGANIZATIONAL EXPENSES The expenses incurred by the Company in connection with its
formation, its initial registration as an investment company under
the 1940 Act, and the initial offering of Interests.
ORGANIZATIONAL MEMBER Xxxxx X. Xxxxxxx
POSITIVE ALLOCATION The meaning given such term in the definition of Allocation Change.
CHANGE
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 manner of derivative instruments and any contracts
based on any index or group of securities, debt obligations or
currencies, or commodities, and any options thereon.
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SPECIAL ADVISORY ACCOUNT A capital account established and maintained on behalf of the
Special Advisory Member pursuant to Section 5.3 hereof solely for
the purpose of receiving the Incentive Allocation.
SPECIAL ADVISORY MEMBER The Adviser in its capacity as the investment adviser to the
Company.
SUBADVISERS Those Investment Managers for which a separate investment
vehicle has been created in which the Investment Manager serves as
general partner and the Company is the sole limited partner and
those Investment Managers who manage the Company's assets
directly through a separate managed account.
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 which, in the opinion of the Company'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 Company shall determine to do
business, or any political subdivision or agency thereof, or which such legal
counsel may deem necessary or appropriate to effectuate, implement and continue
the valid existence and business of the Company.
2.2 NAME.
The name of the Company shall be "Whistler Fund, L.L.C." 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) sending notice thereof to each Member.
2.3 PRINCIPAL AND REGISTERED OFFICE.
The Company shall have its principal office at One World
Financial Center, 31st Floor, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or
at such other place designated from time to time by the Board of Managers.
The Company shall have its registered office in Delaware at 0000
Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, and shall have Corporation Service
Company as its registered agent for service of process in Delaware, unless a
different registered office or agent is designated from time to time by the
Board of Managers.
2.4 DURATION.
The term of the Company commenced on the filing of the
Certificate with the Secretary of State of Delaware and shall continue until the
Company is dissolved pursuant to Section 6.1 hereof.
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2.5 OBJECTIVE AND BUSINESS OF THE COMPANY.
(a) The objective and business of the Company is to purchase,
sell (including short sales), invest and trade in Securities, on margin or
otherwise, and to engage in any financial or derivative transactions relating
thereto or otherwise. The Company may execute, deliver and perform all
contracts, agreements and other undertakings and engage in all activities and
transactions as may in the opinion of the Board of Managers be necessary or
advisable to carry out its objective or business.
(b) The Company 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 set forth in the Form N-2.
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 initial 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
Company's subscription agreement, a Member admitted on the Closing Date shall be
deemed to have voted for the election of each of the initial 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 of and the provisions of
Section 3.3 hereof with respect to the election of Managers to the Board of
Managers by Members, designate any person who shall agree to be bound by all of
the terms of this Agreement as a Manager. The names and mailing addresses of the
Managers shall be set forth in the books and records of the Company. The number
of Managers shall be fixed from time to time by the Board of Managers but, at
the Closing Date, shall not be less than three. At and after the Closing Date,
all of the Managers shall be Independent Managers.
(b) Each Manager shall serve on the Board of Managers for the
duration of the term of the Company, unless his 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 member 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 Company, 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 Company 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 Company or if the required
number of Managers is not elected within 60 days after the date on which the
last Manager ceased
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to act in that capacity, then the Company shall be dissolved pursuant to
Section 6.1 hereof and the assets of the Company shall be liquidated and
distributed pursuant to Section 6.2 hereof.
2.7 MEMBERS.
For the first nine months from the Closing Date, the Board of
Managers may admit one or more Members as of the beginning of each calendar
month. Thereafter, the Board of Managers may admit one or more Members as of the
beginning of each calendar quarter, provided, however, that after the Board of
Managers has received notice from the Adviser that the Adviser does not control
the Company for purposes of the Bank Holding Company Act of 1956, as amended,
the Board of Managers may admit one or more Members as of the beginning of each
calendar month or at such other times, but not more frequently than monthly, as
the Board of Managers may determine. Subject to the foregoing terms, Members may
be admitted to the Company subject to the condition that each such Member shall
execute an appropriate signature page of this Agreement or of the Company's
subscription agreement pursuant to which such Member agrees to be bound by all
the terms and provisions hereof. The Board of Managers may in its absolute
discretion reject subscriptions for member Interests in the Company. The
admission of any person as a Member shall be effective upon the revision of the
books and records of the Company to reflect the name and the contribution to the
capital of the Company of such additional Member.
2.8 SPECIAL ADVISORY MEMBER.
Upon signing this Agreement, the Adviser shall be admitted to the
Company as the Special Advisory Member, subject to due approval, in accordance
with the requirements of the 1940 Act, of the Investment Advisory Agreement. The
Interest of the Special Advisory Member shall be non-voting. If at anytime the
Investment Advisory Agreement between the Company and the person then serving as
Adviser terminates, the Board of Managers shall admit as a substitute Special
Advisory Member, upon its signing this Agreement, such person as may be retained
by the Company to provide investment advisory services pursuant to an Investment
Advisory Agreement, subject to the due approval of such Investment Advisory
Agreement in accordance with the requirements of the 1940 Act.
2.9 ORGANIZATIONAL MEMBER.
Upon the admission of any Member, the Organizational Member shall
withdraw from the Company as the Organizational Member and shall be entitled to
the return of his Capital Contribution, if any, without interest or
deduction.
2.10 BOTH MANAGERS AND MEMBERS.
A Member may at the same time be a Manager and a Member, or a
Special Advisory Member and Member, in which event such Member's rights and
obligations in each capacity shall be determined separately in accordance with
the terms and provisions hereof or as provided in the Delaware Act.
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2.11 LIMITED LIABILITY.
Except as provided under applicable law, a Member and the Special
Advisory Member shall not be liable for the Company'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 Company'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 Company
shall be vested in the Board of Managers, which shall have the right, power and
authority, on behalf of the Company 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 Company and
their duties hereunder. No Manager shall have the authority individually to act
on behalf of or to bind the Company except within the scope of such Manager's
authority as delegated by the Board of Managers. The parties hereto intend that,
except to the extent otherwise expressly provided herein, (i) each Manager shall
be vested with the same powers, authority and responsibilities on behalf of the
Company 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 Company 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" of such company as such term is defined in the 1940 Act. During any
period in which the Company shall have no Managers, the Adviser shall continue
to serve as the Adviser to the Company. During such time period, CIBC WM shall
continue to provide the CIBC WM Services to the Company.
(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 Company. The Board of Managers shall have the exclusive authority and
discretion to make any elections required or permitted to be made by the Company
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 Company's business and shall have no
right, power or authority to act for or bind the Company. 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.
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(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.
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 (which majority shall include any requisite number of Independent
Managers 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. 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. 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.
3.3 MEETINGS OF MEMBERS.
(a) Actions requiring the vote of the Members may be taken at any
duly constituted meeting of the Members at which a quorum is present. Meetings
of the Members may be called by the Board of Managers or by Members holding 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 of Managers shall determine.
The Board of Managers shall arrange to provide written notice of the meeting,
stating the date, time and place of the meeting and the record date therefor,
to each Member entitled to vote at the meeting within a reasonable time prior
thereto. Failure to receive notice of a meeting on the part of any Member shall
not affect the validity of any act or proceeding of the meeting, so long as a
quorum shall be present at the meeting, except as otherwise required by
applicable law. Only matters set forth in the notice of a meeting may be voted
on by the Members at a meeting. The presence in person or by proxy of Members
holding a majority of the total number of votes eligible to be cast by all
Members as of the record date shall constitute a quorum at any meeting. In the
absence of a quorum, a meeting of the Members may be adjourned by action of a
majority of the Members present in person or by proxy without additional notice
to the Members. Except as otherwise required by any provision of this Agreement
or of the 1940 Act, (i) those candidates receiving a plurality of the votes cast
at any meeting of Members shall be elected as Managers and (ii) all other
actions of the Members taken at a meeting shall require the affirmative vote of
Members holding a majority of the total number of votes eligible to be cast by
those Members who are present in person or by proxy at such meeting.
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(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 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 which each Member will be entitled to cast thereat, 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 Company 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
Company 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.
3.4 CUSTODY OF ASSETS OF THE COMPANY.
The physical possession of all funds, Securities or other
properties of the Company shall at all times, be held, controlled and
administered by one or more custodians retained by the Company in accordance
with the requirements of the 1940 Act and the rules thereunder.
3.5 OTHER ACTIVITIES OF MEMBERS AND MANAGERS.
(a) The Managers shall not be required to devote full time to the
affairs of the Company, but shall devote such time as may reasonably be required
to perform their obligations under this Agreement.
(b) Any Member or Manager, and any Affiliate of any Member or
Manager, may engage in or possess an interest in other business ventures or
commercial dealings of every kind and description, independently or with others,
including, but not limited to, acquisition and disposition of Securities,
provision of investment advisory or brokerage services, serving as directors,
officers, employees, advisors or agents of other companies, partners of any
partnership, members of any limited liability company, or trustees of any trust,
or entering into any other commercial arrangements. No Member shall have any
rights in or to such activities of any other Member or Manager, or any profits
derived therefrom.
3.6 DUTY OF CARE.
(a) A Manager shall not be liable to the Company or to any of its
Members for any loss or damage occasioned by any act or omission in the
performance of his services under this Agreement, 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
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willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Manager's office.
(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 Company, any Member or third parties only as provided under the
Delaware Act.
3.7 INDEMNIFICATION.
(a) To the fullest extent permitted by law, the Company shall,
subject to Section 3.7(b) hereof, indemnify each Manager (including for this
purpose their 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 Company or the past or present
performance of services to the Company by such indemnitee, except to the extent
such loss, claim, damage, liability, cost or expense shall have been finally
determined in a decision on the merits in any such action, suit, investigation
or other proceeding to have been incurred or suffered by such indemnitee by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of such indemnitee's office. The
rights of indemnification provided under this Section 3.7 shall not be construed
so as to provide for indemnification of a Manager for any liability (including
liability under federal securities laws which, under certain circumstances,
impose liability even on persons that act in good faith) to the extent (but only
to the extent) that such indemnification would be in violation of applicable
law, but shall be construed so as to effectuate the applicable provisions of
this Section 3.7 to the fullest extent permitted by law.
(b) Expenses, including reasonable counsel fees, so incurred by
any such indemnitee (but excluding amounts paid in satisfaction of judgments, in
compromise, or as fines or penalties), may be paid from time to time by the
Company 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 Company amounts so paid if it shall ultimately
be determined that indemnification of such expenses is not authorized under
Section 3.7(a) hereof; provided, however, that (i) such indemnitee shall provide
security for such undertaking, (ii) the Company shall be insured by or on behalf
of such indemnitee against losses arising by reason of such indemnitee's failure
to fulfill his or its 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.
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(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 Company or its Members by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such indemnitee's office, indemnification shall be
provided pursuant to Section 3.7(a) hereof if (i) approved as in the best
interests of the Company 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 Company and that such
indemnitee is not liable to the Company 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 Company or its Members to which such indemnitee would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of such
indemnitee's office.
(d) Any indemnification or advancement of expenses made pursuant
to this Section 3.7 shall not prevent the recovery from any indemnitee of any
such amount if such indemnitee subsequently shall be determined in a decision on
the merits in any action, suit, investigation or proceeding involving the
liability or expense that gave rise to such indemnification or advancement of
expenses to be liable to the Company or its Members by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such indemnitee's office. In (i) any suit brought by
a Manager (or other person entitled to indemnification hereunder) to enforce a
right to indemnification under this Section 3.7 it shall be a defense that, and
(ii) in any suit in the name of the Company to recover any indemnification or
advancement of expenses made pursuant to this Section 3.7 the Company shall be
entitled to recover such expenses upon a final adjudication that, the Manager or
other person claiming a right to indemnification under this Section 3.7 has not
met the applicable standard of conduct set forth in this Section 3.7. In any
such suit brought to enforce a right to indemnification or to recover any
indemnification or advancement of expenses made pursuant to this Section 3.7,
the burden of proving that the Manager or other person claiming a right to
indemnification is not entitled to be indemnified, or to any indemnification or
advancement of expenses, under this Section 3.7 shall be on the Company (or any
Member acting derivatively or otherwise on behalf of the Company or its
Members).
(e) An indemnitee may not satisfy any right of indemnification or
advancement of expenses granted in this Section 3.7 or to which he or it may
otherwise be entitled except out of the assets of the Company, and no Member
shall be personally liable with respect to any such claim for indemnification or
advancement of expenses.
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(f) The rights of indemnification provided hereunder shall not be
exclusive of or affect any other rights to which any person may be entitled by
contract or otherwise under law. Nothing contained in this Section 3.7 shall
affect the power of the Company to purchase and maintain liability insurance on
behalf of any Manager or other person.
3.8 FEES, EXPENSES AND REIMBURSEMENT.
(a) So long as CIBC WM provides CIBC WM Services to the Company,
it shall be entitled to receive fees for such services as may be agreed to by
CIBC WM and the Company pursuant to a separate written agreement.
(b) The Board of Managers may cause the Company to compensate
each Manager for his services as such. In addition, the Managers shall be
reimbursed by the Company for reasonable out-of-pocket expenses incurred by them
in performing their duties under this Agreement.
(c) The Company shall bear all expenses incurred in the business
of the Company other than those specifically required to be borne by the Adviser
pursuant to the Investment Advisory Agreement or by CIBC WM pursuant to the
agreement referred to in Section 3.8(a) hereof. Expenses to be borne by the
Company include, but are not limited to, the following:
(1) all costs and expenses directly related to
portfolio transactions and positions for the
Company's account, including, but not
limited to, brokerage commissions, research
fees, interest and commitment fees on loans
and debit balances, borrowing charges on
Securities sold short, dividends on
Securities sold short but not yet purchased,
custodial fees, margin fees, transfer taxes
and premiums, taxes withheld on foreign
dividends and indirect expenses from
investments in investment funds;
(2) all costs and expenses associated with the
organization and registration of the
Company, certain offering costs and the
costs of compliance with any applicable
Federal or state laws;
(3) all costs and expenses associated with the
organization of Investment Funds managed by
Subadvisers, if any, and with the selection
of Investment Managers, including due
diligence and travel-related expenses.
(4) Attorneys' fees and disbursements associated
with updating the Company's Confidential
Memorandum and subscription documents (the
"Offering Materials"); the costs of printing
the Offering Materials; the costs of
distributing the Offering Materials to
prospective investors; and attorneys' fees
and disbursements associated with the review
of subscription documents executed and
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delivered to the Company in connection with
offerings of interests in the Company;
(5) the costs and expenses of holding meetings
of the Board of Managers and any meetings
of Members;
(6) fees and disbursements of any attorneys,
accountants, auditors and other consultants
and professionals engaged on behalf of the
Company;
(7) the costs of a fidelity bond and any
liability insurance obtained on behalf of
the Company or its Managers;
(8) any fees payable to CIBC WM for CIBC WM
Services and the fees of custodians and
persons providing administrative services
to the Company;
(9) all expenses of computing the Company's net
asset value, including any equipment or
services obtained for such purposes;
(10) all charges for equipment or services used
in communicating information regarding the
Company's transactions among the Adviser and
any custodian or other agent engaged by the
Company; and
(11) such other types of expenses as may be
approved from time to time by the Board of
Managers, other than those required to be
borne by the Adviser or CIBC WM.
The Adviser shall be entitled to reimbursement from the Company for any of the
above expenses that it pays on behalf of the Company.
(d) Subject to procuring any required regulatory approvals, from
time to time the Company may, alone or in conjunction with 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.
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---------------------------------
ARTICLE IV
TERMINATION OF STATUS OF ADVISER
AND MANAGERS, TRANSFERS AND REPURCHASES
---------------------------------
4.1 TERMINATION OF STATUS OF THE ADVISER.
The status of the Adviser as the Special Advisory Member shall
terminate if the Investment Advisory Agreement with the Adviser terminates and
the Company does not enter into a new Investment Advisory Agreement with the
Adviser, effective as of the date of such termination.
4.2 TERMINATION OF STATUS OF A MANAGER.
The status of a Manager shall terminate if the Manager (i) shall
die; (ii) shall be adjudicated incompetent; (iii) shall voluntarily withdraw as
a Manager (upon not less than 90 days' prior written notice to the other
Managers); (iv) shall be removed; (v) shall be certified by a physician to be
mentally or physically unable to perform his duties hereunder; (vi) shall be
declared bankrupt by a court with appropriate jurisdiction, file a petition
commencing a voluntary case under any bankruptcy law or make an assignment for
the benefit of creditors; (vii) shall have a receiver appointed to administer
the property or affairs of such Manager; or (viii) shall otherwise cease to be
a Manager of the Company under the Delaware Act.
4.3 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.
4.4 TRANSFER OF INTERESTS OF MEMBERS.
(a) An Interest of a Member may be Transferred only (i) by
operation of law pursuant to the death, bankruptcy, insolvency or dissolution
of such Member or (ii) with the written consent of the Board of Managers (which
may be withheld in its sole and absolute 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), or (iii) a distribution from
a qualified retirement plan or an individual retirement account, unless it
consults with counsel to the Company and counsel to the Company confirms that
such Transfer will not cause the Company to be treated as a "publicly traded
partnership" taxable as a corporation.
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(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 such person's beneficial owners if
such a person is a "private investment company" as defined in paragraph (d)(3)
of Rule 205-3 under the Advisers Act) is a person whom the Board of Managers
believe meets the requirements of paragraph (d)(1) of Rule 205-3 under the
Advisers Act or successor rule thereto; (ii) the entire Interest of the Member
is Transferred to a single transferee; and (iii) after the Transfer, the
balance of the Capital Account of the Transferee is not less than $150,000. Any
transferee which acquires an Interest by operation of law as the result of the
death, bankruptcy, insolvency or dissolution 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 Company as a Member. Each Member
effecting a Transfer and its transferee agree to pay all expenses, including
attorneys' and accountants' fees, incurred by the Company in connection with
such Transfer.
(c) Each Member shall indemnify and hold harmless the
Company, 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 4.4 and (ii) any
misrepresentation by such Member in connection with any such Transfer.
4.5 TRANSFER OF INTERESTS OF SPECIAL ADVISORY MEMBER.
The Adviser may not Transfer its Interest as the Special
Advisory Member.
4.6 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 withdraw or tender to the Company for repurchase that Interest or
portion thereof. The Board of Managers may from time to time, in its complete
and exclusive discretion and on such terms and conditions as it may determine,
cause the Company to repurchase Interests or portions thereof pursuant to
written tenders. However, the Company 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 effect that such more frequent offers would not cause
any adverse tax consequences to the Company or the Members. In determining
whether to cause the Company to repurchase Interests or portions thereof
pursuant to written tenders, the Board of Managers shall consider the
recommendation of the Adviser, and shall also consider the following factors,
among others:
(1) whether any Members have requested to
tender Interests or portions thereof to the
Company;
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(2) the liquidity of the Company's assets;
(3) the investment plans and working capital
requirements of the Company;
(4) the relative economies of scale with
respect to the size of the Company;
(5) the history of the Company in repurchasing
Interests or portions thereof;
(6) the economic condition of the securities
markets; and
(7) the anticipated tax consequences of any
proposed repurchases of Interests or
portions thereof.
The Board of Managers shall cause the Company to repurchase Interests or
portions thereof pursuant to written tenders only on terms fair to the Company
and to all Members or one or more classes of Members (including persons holding
Interests acquired from Members), as applicable.
(b) A Member who tenders for repurchase only a portion of
such Member's Interest shall be required to maintain a Capital Account balance
equal to the greater of (i) $150,000, net of the Incentive Allocation, if any,
that would be debited against such Capital Account if the date of repurchase of
such Interest or portion thereof were a date on which an Incentive Allocation
would otherwise be made (the "Tentative Incentive Allocation") or (ii) the
amount of the Tentative Incentive Allocation.
(c) The Adviser may tender its Interest or a portion
thereof as a Member or Special Advisory Member of the Company under Section
4.6(a) hereof.
(d) If the Adviser's status as Special Advisory Member is
terminated pursuant to Section 4.1 hereof, it (or its trustee or other legal
representative) may, by written notice to the Board of Managers within 60 days
of the effective date of such termination, tender to the Company for repurchase
all or any portion of its Special Advisory Account. Not later than thirty (30)
days after the receipt of such notice, the Board of Managers shall cause such
tendered portion of the Special Advisory Account to be repurchased by the
Company for cash.
(e) The Board of Managers may cause the Company 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
4.4 hereof, or such an Interest or portion
thereof has vested in any person by
operation of law as the result of the
death, dissolution, bankruptcy or
incompetency of a Member;
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(2) ownership of such an Interest by a Member
or other person will cause the Company to
be in violation of, or require registration
of any Interest or portion thereof under,
or subject the Company to additional
registration or regulation under, the
securities laws of the United States or any
other relevant jurisdiction;
(3) continued ownership of such an Interest may
be harmful or injurious to the business or
reputation of the Company, the Managers or
the Adviser, or may subject the Company or
any of the Members to an undue risk of
adverse tax or other fiscal consequences;
(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; or
(5) it would be in the best interests of the
Company, as determined by the Board of
Managers in their absolute discretion, for
the Company to repurchase such an Interest
or portion thereof.
(f) Repurchases of Interests or portions thereof by the
Company shall be payable promptly after the expiration date of such repurchase
in accordance with the terms of the Company's repurchase offer. Payment of the
purchase price shall consist of cash and/or: (i) a promissory note from the
Company, or (ii) marketable Securities (valued at net asset value in accordance
with this Agreement and distributed to tendering Members on a pari passu basis)
in an aggregate amount equal to at least 90% of the estimated unaudited net
asset value of the interests tendered, determined as of the expiration date.
Payment of this estimated amount will be made promptly after the expiration
date of the tender offer in accordance with the terms of any written offer from
the Company to repurchase interests. Generally, in addition to any payments
made as described above, payment pursuant to a tender will also consist of a
promissory note from the Company that neither bears interest nor is
transferable entitling the holder thereof to a contingent payment equal to the
excess, if any, of (a) the net asset value of the interests tendered as of the
expiration date, determined based on the audited financial statements of the
Company, over (b) the cash payment (the "Contingent Amount Note"). The
Contingent Amount Note would be delivered to the tendering Member promptly
after the expiration date and would be payable in cash promptly after
completion of the audit of the financial statements of the Company. It is
anticipated that the audit of the Company's financial statements will be
completed within 60 days after the end of each year. The Company does not
impose any charges on a repurchase of interests or portion of interests in the
Company.
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------------------------------------
ARTICLE V
CAPITAL
------------------------------------
5.1 CONTRIBUTIONS TO CAPITAL.
a) The minimum initial contribution of each Member to the
capital of the Company shall be such amount as the Board of Managers, in its
discretion, may determine from time to time, but in no event shall be less than
$150,000; provided, however, that the minimum initial contribution of each
Member that is a director, officer or employee of CIBC WM or its affiliates may
be as determined by the Board of Managers from time to time. The amount of the
initial contribution of each Member shall be recorded on the books and records
of the Company upon acceptance as a contribution to the capital of the Company.
The Managers shall not be entitled to make voluntary contributions of capital
to the Company as Managers of the Company, but may make voluntary contributions
to the capital of the Company as Members. The Adviser may make voluntary
contributions to the capital of the Company as a Member.
(b) The Members and the Adviser, as a Member, may make
additional contributions to the capital of the Company of at least $25,000,
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 Company except to the extent
provided in Section 5.7 hereof.
(c) Except as otherwise permitted by the Board of Managers,
(i) initial and any additional contributions to the capital of the Company by
any Member shall be payable in cash or in such Securities that the Board of
Managers, in its absolute discretion, may agree to accept on behalf of the
Company, and (ii) initial and any additional contributions in cash shall be
payable in readily available funds at the date of the proposed acceptance of
the contribution. The Company shall charge each Member making a contribution in
Securities to the capital of the Company such amount as may be determined by
the Board of Managers not exceeding 2% of the value of such contribution in
order to reimburse the Company for any costs incurred by the Company by reason
of accepting such Securities, and any such charge shall be due and payable by
the contributing Member in full at the time the contribution to the capital of
the Company to which such charges relate is due. The value of contributed
Securities shall be determined in accordance with Section 7.3 hereof as of the
date of contribution.
(d) The minimum initial and additional contributions set
forth in (a) and (b) of this Section 5.1 may be reduced by the Board of
Managers.
5.2 RIGHTS OF MEMBERS TO CAPITAL.
No Member shall be entitled to interest on his contribution to
the capital of the Company, nor shall any Member be entitled to the return of
any capital of the Company except
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(i) upon the repurchase by the Company of a part or all of such Member's
Interest pursuant to Section 4.6 hereof, (ii) pursuant to the provisions of
Section 5.7(c) hereof or (iii) upon the liquidation of the Company'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
Company's property or to compel any sale or appraisal of the Company's assets.
5.3 CAPITAL ACCOUNTS.
(a) The Company shall maintain a separate Capital Account
for each Member.
(b) Each Member's Capital Account shall have an initial
balance equal to the amount of cash and the value of any Securities (determined
in accordance with Section 7.3 hereof) constituting such Member's initial
contribution to the capital of the Company.
(c) Each Member's Capital Account shall be increased by the
sum of (i) the amount of cash and the value of any Securities (determined in
accordance with Section 7.3 hereof) constituting additional contributions by
such Member to the capital of the Company permitted pursuant to Section 5.1
hereof, plus (ii) all amounts credited to such Member's Capital Account
pursuant to Sections 5.4 through 5.7 or 5.9 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 4.6, 5.11 or
6.2 hereof which are not reinvested, plus (ii) any amounts debited against such
Capital Account pursuant to Sections 5.4 through 5.9 hereof.
(e) The Company shall maintain a Special Advisory Account
for the Adviser in its capacity as Special Advisory Member solely for purposes
of receiving the Incentive Allocation pursuant to Section 5.8 hereof. The
Special Advisory Account shall have an initial balance of zero.
5.4 ALLOCATION OF NET PROFIT AND LOSS.
As of the last day of each Fiscal Period, any Net Profit or Net
Loss for the Fiscal Period shall be allocated among and credited to or debited
against the Capital Accounts of the Members in accordance with their respective
Investment Percentages for such Fiscal Period.
5.5 ALLOCATION OF INSURANCE PREMIUMS AND PROCEEDS.
(a) Any premiums payable by the Company for Insurance
purchased pursuant to Section 3.8(d) hereof shall be apportioned evenly over
each Fiscal Period or portion thereof falling within the period to which such
premiums relate under the terms of such Insurance, and the portion of the
premiums so apportioned to any Fiscal Period shall be allocated among and
debited against the Capital Accounts of each Member who is a member of the
Company during such Fiscal Period in accordance with such Member's Investment
Percentage for such Fiscal Period.
(b) Proceeds, if any, to which the Company may become
entitled pursuant to such Insurance shall be allocated among and credited to
the Capital Accounts of each Member who
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is a member of the Company during the Fiscal Period in which the event which
gives rise to recovery of proceeds occurs in accordance with such Member's
Investment Percentage for such Fiscal Period.
5.6 ALLOCATION OF CERTAIN WITHHOLDING TAXES AND OTHER EXPENDITURES.
(a) If the Company incurs a withholding tax or other tax
obligation with respect to the share of Company income allocable to any Member,
then the Board of Managers, without limitation of any other rights of the
Company or the Managers, shall cause the amount of such obligation to be
debited against the Capital Account of such Member when the Company pays such
obligation, and any amounts then or thereafter distributable to such Member
shall be reduced by the amount of such taxes. 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 Company as a contribution to the
capital of the Company, upon demand of the Board of Managers, the amount of
such excess. 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; provided, that in the
event that the Board of Managers determines that a Member is eligible for a
refund of any withholding tax, the Board of Managers may, at the request and
expense of such Member, assist such Member in applying for such refund.
(b) Except as otherwise provided for in this Agreement and
unless prohibited by the 1940 Act, any expenditures payable by the Company, to
the extent determined by the Board of Managers to have been paid or withheld on
behalf of, or by reason of particular circumstances applicable to, one or more
but fewer than all of the Members, shall be charged to only those Members on
whose behalf such payments are made or whose particular circumstances gave rise
to such payments. Such charges shall be debited from the Capital Accounts of
such Members as of the close of the Fiscal Period during which any such items
were paid or accrued by the Company.
5.7 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 which the Board of Managers in its sole
discretion deems necessary or appropriate. The Board of Managers may increase
or reduce any such reserves from time to time by such amounts as the Board of
Managers in its sole discretion deems necessary or appropriate. The amount of
any such reserve, or any increase or decrease therein, shall be proportionately
charged or credited, as appropriate, to the Capital Accounts of those parties
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.
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(b) If at any time an amount is paid or received by the
Company (other than contributions to the capital of the Company, 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 Company'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 parties who were Members during such prior Fiscal Period
or Periods.
(c) If any amount is required by paragraph (a) or (b) of
this Section 5.7 to be charged or credited to a party who is no longer a
Member, such amount shall be paid by or to such party, 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 Company 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 party ceased to be a Member. To the extent that a former
Member fails to pay to the Company, 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.
5.8 INCENTIVE ALLOCATION.
(a) So long as the Adviser serves as the Special Advisory
Member of the Company, the Incentive Allocation shall be debited against the
Capital Account of each Member as of the last day of each Allocation Period
with respect to such Member and the amount so debited shall simultaneously be
credited to the Special Advisory Account or, subject to compliance with the
1940 Act and the Advisers Act, to the Capital Accounts of such Members who are
directors, officers or employees of CIBC WM or its Affiliates, or with respect
to which such directors, officers or employees are the sole beneficial owners,
as have been designated in any written notice delivered by the Adviser to the
Board of Managers within 90 days after the close of such Allocation Period.
(b) By the last business day of the month following the
date on which an Incentive Allocation is made, the Special Advisory Member may
withdraw up to 100% of the Incentive Allocation (computed on the basis of
unaudited data) that was credited to the Special Advisory Account. Within 30
days after the completion of the audit of the books of the Company for the year
in which allocations to the Special Advisory Account are made, the Company
shall pay to the Special Advisory Member any additional amount of Incentive
Allocation determined to be owed to the Special Advisory Member based on the
audit, and the Special Advisory Member shall pay to the Company any excess
amount of Incentive Allocation determined to be owed to the Company.
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5.9 ALLOCATION OF ORGANIZATIONAL EXPENSES.
(a) As of the first Expense Allocation Date, Organizational
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 5.9 on the preceding Expense
Allocation Date will be credited to the Capital Account of such Member, and
Organizational Expenses shall then be re-allocated among and debited against
the Capital Accounts of all Members in accordance with their respective Capital
Percentages on such Expense Allocation Date.
5.10 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 5.10 shall be made pursuant to the
principles of Sections 704(b) and 704(c) of the Code and in conformity with
Regulations Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(4)(i) and 1.704-3(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 Company 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 one or more Positive Basis Members (as
hereinafter defined) withdraw from the Company pursuant to Article IV or VI,
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 5.3;
provided, however, that if, following such fiscal year, the Company realizes
gains from a sale of Securities the proceeds of which are designated on the
Company's books and records as being used to effect payments of all or part of
the interest in the Company of any Positive Basis Member, there shall be
allocated to any Positive Basis Member an amount of such gains equal to the
amount, if any, by which his or its Positive Basis as of the effective date of
his or its withdrawal exceeds the amount allocated to him or it pursuant to
clause (i) of this sentence.
If the Company 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 one or more Negative Basis Members (as
hereinafter defined) withdraw from the Company pursuant to
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Article IV or VI, 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 5.3; provided, however, that if, following such fiscal
year, the Company realizes losses from a sale of Securities the proceeds of
which are designated on the Company's books and records as being used to effect
payments of all or part of the interest in the Company of any Negative Basis
Member, there shall be allocated to any Negative Basis Member an amount of such
losses equal to the amount, if any by which his or its Negative Basis as of the
effective date of his or its withdrawal exceeds the amount allocated to him or
it pursuant to clause (i) of this sentence.
As used herein, (i) the term "Positive Basis" shall mean, with
respect to any Member and as of any time of calculation, the amount by which
its interest in the Company as of such time exceeds its "adjusted tax basis",
for Federal income tax purposes, in its interest in the Company as of such time
(determined without regard to any adjustments made to such "adjusted tax basis"
by reason of any transfer or assignment of such interest, including by reason
of death, and without regard to such Member's share of the liabilities of the
Company under Section 752 of the Code), and (ii) the term "Positive Basis
Member" shall mean any Member who withdraws from the Company and who has
Positive Basis as of the effective date of its withdrawal, but such Member
shall cease to be a Positive Basis Member at such time as it shall have
received allocations pursuant to clause (i) of the second paragraph of this
Section 5.10 equal to its Positive Basis as of the effective date of its
withdrawal.
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 in the Company as of such time is less than its "adjusted tax
basis", for Federal income tax purposes, in its interest in the Company as of
such time (determined without regard to any adjustments made to such "adjusted
tax basis" by reason of any transfer or assignment of such interest, including
by reason of death, and without regard to such Member's share of the
liabilities of the Company under Section 752 of the Code), and (ii) the term
"Negative Basis Member" shall mean any Member who withdraws from the Company
and who has Negative Basis as of the effective date of its withdrawal, 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 5.10 equal to its Negative Basis as of the effective date of its
withdrawal.
Notwithstanding anything to the contrary in the foregoing, if
the Company realizes taxable gains in any fiscal year with respect to which the
Special Advisory Member is entitled to an Incentive Allocation under Section
5.8 hereof, the Board of Managers (at the request of the Special Advisory
Member) may specially allocate such gains to the Special Advisory Member in an
amount by which the Incentive Allocation exceeds the Special Advisory Member's
"adjusted tax basis" (determined without regard to any allocation to be made
pursuant
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to this paragraph) in its interest in the Company as of the time it withdraws
such Incentive Allocation. The Special Advisory Member's "adjusted tax basis",
for these purposes, shall be increased by any amount of the Incentive
Allocation withdrawal which it elects to contribute as a Member to the Company
as of the date of the withdrawal of the Incentive Allocation.
5.11 DISTRIBUTIONS.
(a) The Board of Managers may, in its sole
discretion, authorize the Company to make distributions in cash at any time to
all of the Members on a pro rata basis in accordance with the Members'
Investment Percentages.
(b) The Board of Managers may withhold taxes from
any distribution to any Member to the extent required by the Code or any other
applicable law. For purposes of this Agreement, any taxes so withheld by the
Company with respect to any amount distributed by the Company 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.
5.12 FOREIGN WITHHOLDING.
Notwithstanding any provision of this Agreement to the contrary,
the Board of Managers shall withhold and pay over to the Internal Revenue
Service, pursuant to Section 1441, 1442, 1445 or 1446 of the Code, or any
successor provisions, at such times as required by such Sections, such amounts
as the Company is required to withhold under such Sections, as from time to
time are in effect. To the extent that a foreign Member claims to be entitled
to a reduced rate of, or exemption from, U.S. withholding tax pursuant to an
applicable income tax treaty, or otherwise, the foreign Member shall furnish
the Board of Managers with such information and forms as such foreign 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 foreign
Member represents and warrants that any such information and forms furnished by
such foreign Member shall be true and accurate and agrees to indemnify the
Company 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.
Any amount of withholding taxes withheld and paid over
by the Board of Managers with respect to a foreign Member's distributive share
of the Company's gross income, income or gain shall be treated as a
distribution to such foreign Member and shall be charged against the Capital
Account of such foreign Member.
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--------------------------
ARTICLE VI
DISSOLUTION AND LIQUIDATION
---------------------------
6.1 DISSOLUTION.
The Company shall be dissolved:
(1) upon the affirmative vote to dissolve the
Company 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 Company;
(3) upon the expiration of any two year period
which commences on the date on which any
Member has submitted a written notice to the
Company requesting to tender its entire
Interest for repurchase by the Company if such
Interest has not been repurchased by the
Company;
(4) as required by operation of law.
Dissolution of the Company 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 Company as provided above, but the
Company shall not terminate until the assets of the Company 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 Company as provided in
Section 6.1 hereof, the Board of Managers shall promptly appoint the
Administrator as the liquidator and the Administrator shall liquidate the
business and administrative affairs of the Company, except that if the Board of
Managers does not appoint the Administrator as the liquidator or the
Administrator 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 Company. 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
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liquidator shall deem appropriate in its sole discretion as applicable) shall
be distributed in the following manner:
(1) the debts of the Company, 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 Company's assets to the
Members has been completed, shall first be
paid on a pro rata basis;
(2) such debts, liabilities or obligations as are
owing to the Members shall next be paid in
their order of seniority and on a pro rata
basis;
(3) The Special Advisory Member shall next be paid
any balance in the Special Advisory Account
after giving effect to the Incentive
Allocation, if any, to be made pursuant to
Section 5.8 hereof; and
(4) 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 Company, the Board of Managers or
other liquidator may distribute ratably in kind any assets of the Company;
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 Company shall adopt for tax accounting purposes any
accounting method which the Board of Managers shall decide in its sole
discretion is in the best interests of the Company. The Company's accounts
shall be maintained in U.S. currency.
(b) After the end of each taxable year, the Company shall
furnish to each Member such information regarding the operation of the Company
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.
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(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 Company shall furnish to each Member a semi-annual report and
an annual report containing the information required by such Act. The Company
shall cause financial statements contained in each annual report furnished
hereunder to be accompanied by a certificate of independent public accountants
based upon an audit performed in accordance with generally accepted accounting
principles. The Company 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, the Allocation Change with respect to
any Member, or any components comprising any of the foregoing as it considers
appropriate to reflect fairly and accurately the financial results of the
Company 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 Company 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
Company, no value shall be placed on the goodwill or name of the Company, or
the office records, files, statistical data or any similar intangible assets of
the Company not normally reflected in the Company'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 Company will value interests in Investment Funds
not managed by the Subadvisers at fair value, which ordinarily will be the
value determined by their Investment Managers in accordance with the policies
established by the relevant Investment Fund.
(c) The value of Securities and other assets of the Company
and the net worth of the Company 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.
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---------------------------
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
Company;
(2) reduce the Capital Account of a Member or
Special Advisory Account other than in
accordance with Article V; or
(3) modify the events causing the dissolution of
the Company;
may be made only if (i) the written consent of each Member adversely affected
thereby is obtained prior to the effectiveness thereof or (ii) such amendment
does not become effective until (A) each Member has received written notice of
such amendment and (B) any Member objecting to such amendment has been afforded
a reasonable opportunity (pursuant to such procedures as may be prescribed by
the Board of Managers) to tender his entire Interest for repurchase by the
Company.
(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 which 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, including but
not limited to, to satisfy the requirements,
or to reflect any relaxation of such
requirements in the future, of the Bank
Holding Company Act or other U.S. or Canadian
banking laws, or any regulations, guidelines
or policies or interpretations of the banking
regulatory agencies or the staff thereof, or
to cure any ambiguity or to correct or
supplement any provision
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hereof which may be inconsistent with any
other provision hereof, provided that such
action does not adversely affect the rights of
any Member in any material respect; and
(3) amend this Agreement to make such changes as
may be necessary or advisable to ensure that
the Partnership will not be treated as an
association taxable as a corporation or as a
publicly traded partnership 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 Company'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 which 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 Company;
and
(3) all such other instruments, documents and
certificates which, in the opinion of legal
counsel to the Company, 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 Company shall
determine to do business, or any political
subdivision or agency thereof, or which such
legal counsel may deem necessary or
appropriate to effectuate, implement and
continue the valid existence and business of
the Company 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 Company without such
Member's consent. If an amendment to the Certificate or this Agreement or any
action by or with respect to the Company is taken in the manner contemplated by
this Agreement, each Member agrees that, notwithstanding any objection which
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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 which 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 Company.
(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 Company 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 Company
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.
Notices which may or 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 Company. 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 which is not
made pursuant to the terms of this Agreement shall be void.
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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 which affect numerous aspects of the conduct of
the Company'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.
8.6 CHOICE OF LAW; ARBITRATION.
(a) 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.
(b) UNLESS OTHERWISE AGREED IN WRITING, EACH MEMBER AND THE
SPECIAL ADVISORY MEMBER AGREES TO SUBMIT ALL CONTROVERSIES ARISING BETWEEN
MEMBERS OR ONE OR MORE MEMBERS OR THE SPECIAL ADVISORY MEMBER AND THE COMPANY
TO ARBITRATION IN ACCORDANCE WITH THE PROVISIONS SET FORTH BELOW AND
UNDERSTANDS THAT:
(1) ARBITRATION IS FINAL AND BINDING ON THE
PARTIES;
(2) THEY ARE WAIVING THEIR RIGHT TO SEEK REMEDIES
IN COURT, INCLUDING THE RIGHT TO A JURY TRIAL;
(3) PRE-ARBITRATION DISCOVERY IS GENERALLY MORE
LIMITED AND DIFFERENT FROM COURT PROCEEDINGS;
(4) THE ARBITRATOR'S AWARD IS NOT REQUIRED TO
INCLUDE FACTUAL FINDINGS OR LEGAL REASONING
AND A PARTY'S RIGHT TO APPEAL OR TO SEEK
MODIFICATION OF RULINGS BY ARBITRATORS IS
STRICTLY LIMITED; AND
(5) THE PANEL OF ARBITRATORS WILL TYPICALLY
INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR
ARE AFFILIATED WITH THE SECURITIES INDUSTRY.
(c) ALL CONTROVERSIES THAT MAY ARISE AMONG MEMBERS AND ONE
OR MORE MEMBERS OR THE SPECIAL ADVISORY MEMBER AND THE COMPANY CONCERNING THIS
AGREEMENT SHALL BE DETERMINED BY ARBITRATION IN NEW YORK CITY IN ACCORDANCE
WITH THE FEDERAL ARBITRATION ACT, TO THE FULLEST EXTENT PERMITTED BY LAW. ANY
ARBITRATION UNDER THIS AGREEMENT SHALL BE DETERMINED BEFORE AND IN ACCORDANCE
WITH THE RULES THEN OBTAINING OF EITHER THE NEW YORK STOCK EXCHANGE, INC. (THE
"NYSE") OR THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (THE "NASD"),
AS THE MEMBER OR SPECIAL ADVISORY MEMBER OR ENTITY INSTITUTING THE ARBITRATION
MAY ELECT. IF THE NYSE OR NASD DOES NOT ACCEPT THE ARBITRATION FOR
CONSIDERATION, THE ARBITRATION SHALL BE SUBMITTED TO, AND DETERMINED IN
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ACCORDANCE WITH THE RULES THEN OBTAINING OF, THE CENTER FOR PUBLIC RESOURCES,
INC. IN NEW YORK CITY. JUDGMENT ON ANY AWARD OF ANY SUCH ARBITRATION MAY BE
ENTERED IN THE SUPREME COURT OF THE STATE OF NEW YORK OR IN ANY OTHER COURT
HAVING JURISDICTION OF THE PERSON OR PERSONS AGAINST WHOM SUCH AWARD IS
RENDERED. ANY NOTICE OF SUCH ARBITRATION OR FOR THE CONFIRMATION OF ANY AWARD
IN ANY ARBITRATION SHALL BE SUFFICIENT IF GIVEN IN ACCORDANCE WITH THE
PROVISIONS OF THIS AGREEMENT. EACH MEMBER AGREES THAT THE DETERMINATION OF THE
ARBITRATORS SHALL BE BINDING AND CONCLUSIVE UPON THEM.
(d) NO MEMBER SHALL BRING A PUTATIVE OR CERTIFIED CLASS
ACTION TO ARBITRATION, NOR SEEK TO ENFORCE ANY PRE-DISPUTE ARBITRATION
AGREEMENT AGAINST ANY PERSON WHO HAS INITIATED IN COURT A PUTATIVE CLASS
ACTION; OR WHO IS A MEMBER OF A PUTATIVE CLASS WHO HAS NOT OPTED OUT OF THE
CLASS WITH RESPECT TO ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION
UNTIL: (i) THE CLASS CERTIFICATION IS DENIED; OR (ii) THE CLASS IS DECERTIFIED;
OR (iii) THE MEMBER IS EXCLUDED FROM THE CLASS BY THE COURT. SUCH FORBEARANCE
TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF ANY
RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN.
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, the
Special Advisory Member and the Company. 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 Company.
8.9 MERGER AND CONSOLIDATION.
(a) The Company 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 which 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 Company 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 partnership 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.
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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 Company such information
regarding the affairs of the Company as is just and reasonable under the
Delaware Act, subject to reasonable standards (including standards governing
what information and documents are to be furnished, at what time and location
and at whose expense) established by the Board of Managers.
(b) Each Member covenants that, except as required by
applicable law or any regulatory body, it will not divulge, furnish or make
accessible to any other person the name and/or address (whether business,
residence or mailing) of any Member (collectively, "Confidential Information")
without the prior written consent of the Board of Managers, which consent may
be withheld in their 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 Company. Accordingly, in addition to any and all
other remedies at law or in equity to which the non-breaching Members and the
Company 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 Company 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 Company and at such other times thereafter as
the Board of Managers may request, whether he is a "United States Person"
within the meaning of Section 7701(a)(30) of the Code on forms to be provided
by the Company, and shall notify the Company 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.
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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 their designated agent shall prepare
and file, or cause the accountants of the Company to prepare and file, a
Federal information tax return in compliance with Section 6031 of the Code and
any required state and local income tax and information returns for each tax
year of the Company.
8.15 TAX MATTERS PARTNER.
(a) A Manager who is a Member shall be designated on the
Company's annual Federal income tax return, and have full powers and
responsibilities, as the Tax Matters Partner of the Company 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 Company 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 Company under Section 6231(a)(7)
of the Code shall be indemnified and held harmless by the Company 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 Partner") that holds or controls an interest as a Member on
behalf of, or the benefit of, another person or persons, or which Pass-Thru
Partner 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 Company holding such interests through such Pass-Thru Partner. In the event
the Company shall be the subject of an income tax audit by any Federal, state
or local authority, to the extent the Company 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 Company and each Member thereof.
All expenses incurred in connection with any such audit, investigation,
settlement or review shall be borne by the Company.
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8.16 SECTION 754 ELECTION.
In the event of a distribution of Company 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 Company, at the request of a Member,
the Board of Managers, in its discretion, may cause the Company to elect,
pursuant to Section 754 of the Code, or the corresponding provision of
subsequent law, to adjust the basis of the Company property as provided by
Sections 734 and 743 of the Code.
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THE UNDERSIGNED ACKNOWLEDGES HAVING READ THIS AGREEMENT IN ITS ENTIRETY
BEFORE SIGNING, INCLUDING THE PRE-DISPUTE ARBITRATION CLAUSE SET FORTH IN
SECTION 8.6 AND 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:
--------------------------------------
--------------------------------------
--------------------------------------
ORGANIZATIONAL MEMBER:
--------------------------------------
MEMBERS:
Each person who shall sign a Member
Signature Page and who shall be accepted by
the Board of Managers to the Company as a
Member.
SPECIAL ADVISORY MEMBER:
CIBC XXXXXXXXXXX ADVISERS, L.L.C.
By: CIBC World Markets Corp.
Managing Member
By: -----------------------------
Name:
Title:
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