Exhibit 2(a)(2)
XXXXXXXXXX PARTNERS, LLC
A DELAWARE LIMITED LIABILITY COMPANY
LIMITED LIABILITY COMPANY AGREEMENT
DATED AS OF AUGUST 12, 2005
ARTICLE I
Definitions
1.1 Definitions..................................................1
ARTICLE II
Organization; Admission of Members
2.1. Formation of Limited Liability Company.......................4
2.2. Name.........................................................4
2.3. Principal and Registered Office..............................4
2.4. Duration.....................................................5
2.5. Business of the Fund.........................................5
2.6. Board of Managers............................................5
2.7 Members......................................................6
2.8 Organizational Member........................................6
2.9 Both Managers and Members....................................6
2.10 Limited Liability............................................6
ARTICLE III
Management
3.1 Management and Control.......................................7
3.2 Actions by the Board of Managers.............................8
3.3 Meetings of Members..........................................8
3.4 Custody of Assets of the Fund................................9
3.5 Other Activities of Members and Managers.....................9
3.6 Duty of Care.................................................9
3.7 Indemnification..............................................9
3.8 Fees, Expenses and Reimbursement............................11
ARTICLE IV
Termination of Status of Investment Manager and Managers,
Transfers and Repurchases
4.1 Termination of Status of a Manager..........................12
4.2 Removal of the Managers.....................................13
4.3 Transfer of Interests of Members............................13
4.4 Repurchase of Interests.....................................13
ARTICLE V
Capital
5.1 Contributions to Capital....................................16
5.2 Rights of Members to Capital................................16
5.3 Capital Accounts............................................17
5.4 Allocation of Net Profit and Net Loss.......................17
5.5 Allocation of Certain Expenditures..........................17
5.6 Reserves....................................................17
5.7 Tax Allocations.............................................18
5.8 Distributions...............................................18
5.9 Withholding.................................................19
ii
ARTICLE VI
Dissolution and Liquidation
6.1 Dissolution.................................................19
6.2 Liquidation of Assets.......................................20
ARTICLE VII
Accounting, Valuations and Books and Records
7.1 Accounting and Reports......................................20
7.2 Determinations by the Board of Managers.....................21
7.3 Valuation of Assets.........................................21
ARTICLE VIII
Miscellaneous Provisions
8.1 Amendment of Limited Liability Company Agreement............21
8.2 Special Power of Attorney...................................22
8.3 Notices.....................................................23
8.4 Agreement Binding Upon Successors and Assigns...............23
8.5 Applicability of 1940 Act and Form N-2......................24
8.6 Choice of Law...............................................24
8.7 Not for Benefit of Creditors................................24
8.8 Consents....................................................24
8.9 Merger and Consolidation....................................24
8.10 Pronouns....................................................24
8.11 Confidentiality.............................................24
8.12 Certification of Non-Foreign Status.........................25
8.13 Severability................................................25
8.14 Filing of Returns...........................................25
8.15 Tax Matters Partner.........................................25
8.16 Section 754 Election........................................26
iii
XXXXXXXXXX PARTNERS, LLC
LIMITED LIABILITY COMPANY AGREEMENT
THIS LIMITED LIABILITY COMPANY AGREEMENT of Xxxxxxxxxx Partners, LLC
(the "Fund") is dated as of August 12, 2005 by and among Xxxxxxxxxx Management,
LLC as the Organizational Member and those persons hereinafter admitted as
Members.
WHEREAS, the Fund has heretofore been formed as a limited liability
company under the Delaware Limited Liability Company Act pursuant to an initial
Certificate of Formation (the "Certificate") dated and filed with the Secretary
of State of Delaware on April 5, 2005;
NOW, THEREFORE, for and in consideration of the foregoing and the
mutual covenants hereinafter set forth, it is hereby agreed as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions
For purposes of this Agreement:
"1933 Act" means the Securities Act of 1933 and the rules, regulations
and orders under the 1933 Act, as amended from time to time, or any successor
law.
"1940 Act" means the Investment Company Act of 1940 and the rules,
regulations and orders under the 1940 Act, as amended from time to time, or any
successor law.
"Administrator" means the person who provides administrative services
to the Fund pursuant to an administrative services agreement.
"Advisers Act" means the Investment Advisers Act of 1940 and the rules,
regulations and orders promulgated thereunder, as amended from time to time, or
any successor law.
"Affiliate" means an affiliated person of a person as such term is
defined in the 1940 Act.
"Agreement" means this Limited Liability Company Agreement, as amended
from time to time.
"Board of Managers" means the Board of Managers established pursuant to
Section 2.6.
"Business Day" means any day when the New York Stock Exchange is open
for business.
"Capital Account" means, with respect to each Member, the capital
account established and maintained on behalf of each Member pursuant to Section
5.3.
"Capital Contribution" means the contribution, if any, made, or to be
made, as the context requires, to the capital of the Fund, after giving effect
to any applicable placement agent fees, if any, by a Member or former Member, as
the case may be.
-1-
"Certificate" means the Certificate of Formation of the Fund and any
amendments thereto as filed with the office of the Secretary of State of the
State of Delaware.
"Code" means the United States Internal Revenue Code of 1986, as
amended, and as hereafter amended from time to time, or any successor law.
"Delaware Act" means the Delaware Limited Liability Company Act as in
effect on the date hereof and as amended from time to time, or any successor
law.
"Fiscal Period" means the period commencing on the Initial 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 calendar month;
(2) the day preceding any day as of which a new Member is
admitted to the Fund or a contribution to the capital of the
Fund is made pursuant to Section 5.1;
(3) any day on which the Fund repurchases any Interest or
portion of an Interest of any Member;
(4) any day 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; or
(5) the day as of which the Fund dissolves or terminates.
"Fiscal Year" means the period commencing on the Initial Closing Date
and ending on March 31, 2006, and thereafter each period commencing on April 1
of each year and ending on March 31 of each year (or on the date of a final
distribution pursuant to Section 6.2 hereof), unless and until the Board of
Managers shall elect another Fiscal Year for the Fund.
"Form N-2" means the Fund's Registration Statement on Form N-2 filed
with the U.S. Securities and Exchange Commission, as amended from time to time.
"Fund" means Xxxxxxxxxx Partners, LLC.
"Independent Managers" means those Managers who are not "interested
persons" of the Fund as such term is defined by the 1940 Act.
"Interest" means the entire ownership interest in the Fund at any
particular time of a Member or other person to whom an Interest of a Member or
portion thereof has been transferred pursuant to Section 4.3 hereof, including
the rights and obligations of such Member or other person under this Agreement
and the Delaware Act.
"Initial Closing Date" means the first date on or as of which a person
other than an Organizational Member is admitted to the Fund as a Member.
"Investment Funds" means investment funds in which the Fund's assets
are invested.
"Investment Management Agreement" means a separate written agreement
entered into by the Fund pursuant to which the Investment Manager provides
investment advisory services to the Fund.
-2-
"Investment Manager" means Xxxxxxxxxx Investors, LLC, a limited
liability company organized under the laws of Delaware, or any person who may
hereafter serve as the investment adviser to the Fund pursuant to an Investment
Management Agreement.
"Investment Percentage" means a percentage established for each Member
on the Fund's books as of the first day of each Fiscal Period. The Investment
Percentage of a Member for a Fiscal Period shall be determined by dividing the
balance of the Member's Capital Account as of the commencement of such Fiscal
Period by the sum of the Capital Accounts of all of the Members as of the
commencement of such Fiscal Period. The sum of the Investment Percentages of all
Members for each Fiscal Period shall equal 100%.
"Manager" means those natural persons designated as "Managers" in
accordance with this Agreement who have the authority provided for herein, or
any other natural persons who, from time to time after the date of this
Agreement, become Managers in accordance with the terms and conditions of this
Agreement.
"Member" means any person who shall have been admitted to the Fund as a
member (including any Manager in such person's capacity as a member of the Fund
but excluding any Manager in such person's capacity as a Manager of the Fund)
until the Fund repurchases the entire Interest of such person pursuant to
Section 4.4 hereof or a substituted member or members are admitted with respect
to any such person's entire Interest as a member pursuant to Section 4.3 hereof;
such term includes the Investment Manager or an Affiliate of the Investment
Manager to the extent the Investment Manager (or such Affiliate) makes a capital
contribution to the Fund and shall have been admitted to the Fund as a member.
"Net Assets" means the total value of all assets of the Fund, less an
amount equal to all accrued debts, liabilities and obligations of the Fund,
calculated before giving effect to any repurchases of Interests.
"Net Profit" or "Net Loss" means the amount by which the Net Assets as
of the close of business on the last day of a Fiscal Period exceed (in the case
of Net Profit) or are less than (in the case of Net Loss) the Net Assets as of
the commencement of the same Fiscal Period (or, with respect to the initial
Fiscal Period of the Fund, as of the close of business on the Initial Closing
Date), such amount to be adjusted to exclude any items to be allocated among the
Capital Accounts of the Members on a basis that is not in accordance with the
respective Investment Percentages of all Members as of the commencement of such
Fiscal Period pursuant to Sections 5.5 and 5.6 hereof.
"Organizational Member" means Xxxxxxxxxx Management, LLC, a limited
liability company formed under the laws of the State of Delaware.
"Person" means any individual, entity, corporation, partnership,
limited liability company, joint stock company, trust, estate, joint venture, or
unincorporated organization.
"Portfolio Managers" means the unrelated investment advisers that
manage and direct the investment activities of Investment Funds or are retained
to manage and invest designated portions of the Fund's assets.
"Securities" means securities (including, without limitation, equities,
debt obligations, limited partnership interests, limited liability company
interests, options, and other "securities" as that term is defined in Section
2(a)(36) of the 0000 Xxx) and any contracts for forward or future delivery of
any security, debt obligation or currency, or commodity, all types of derivative
instruments and financial instruments and any contracts based on any index or
group of securities, debt obligations or currencies, or commodities, and any
options thereon.
"Separately Managed Account" means an Investment Fund created
specifically to facilitate management of the Fund's assets by a Subadviser.
-3-
"Special Laws or Regulations" means special regulatory or compliance
requirements such as those imposed by the Bank Holding Company Act, certain
Federal Communications Commission regulations, or the Employee Retirement Income
Security Act of 1974, as each may be amended from time to time.
"Subadviser" means any Portfolio Manager selected by the Investment
Manager to directly manage Fund assets through a Separately Managed Account.
"Taxable Year" means a calendar year.
"Transfer" means 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.
"Valuation Date" means the date as of which the Fund values an Interest
for purposes of determining the price at which the Interest is to be purchased
by the Fund pursuant to an offer made by the Fund pursuant to Section 4.4
hereof.
ARTICLE II
ORGANIZATION; ADMISSION OF MEMBERS
2.1. Formation of Limited Liability Company
The Fund has been formed as a limited liability company at the
direction of the Organizational Member who authorized the filing of the
Certificate, which actions are hereby ratified by the execution of this
Agreement. The Board of Managers shall execute and file in accordance with the
Delaware Act any amendment to the Certificate and shall execute and file with
applicable governmental authorities any other instruments, documents and
certificates that, in the opinion of the Fund's legal counsel, may from time to
time be required by the laws of the United States of America, the State of
Delaware or any other jurisdiction in which the Fund shall determine to do
business, or any political subdivision or agency thereof, or that such legal
counsel may deem necessary or appropriate to effectuate, implement and continue
the valid existence and business of the Fund.
2.2. Name
The name of the Fund shall be "Xxxxxxxxxx Partners, LLC" or such other
name as the Board of Managers may hereafter adopt upon (i) causing an
appropriate amendment to the Certificate to be filed in accordance with the
Delaware Act and (ii) taking such other actions as may be required by law.
2.3. Principal and Registered Office
The Fund shall have its principal office at 000 Xxxxx Xxxxxx, Xxxxx
0000, Xxx Xxxx, Xxx Xxxx 00000, or at such other place designated from time to
time by the Board of Managers.
The Fund shall have its registered office in Delaware at 0000
Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, and shall have
Corporation 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.
-4-
2.4. Duration
The term of the Fund commenced on the filing of the Certificate with
the Secretary of State of Delaware and shall continue until the Fund is
dissolved pursuant to Section 6.1 hereof.
2.5. Business of the Fund
(a) The business of the Fund is to purchase, sell (including short
sales), invest and trade in Securities, on margin or otherwise, and to engage in
any financial or derivative transactions relating thereto or otherwise, either
directly or indirectly by investing in Investment Funds. The Fund may execute,
deliver and perform all contracts, agreements, subscription documents and other
undertakings and engage in all activities and transactions as may in the opinion
of the Board of Managers be necessary or advisable to carry out its objective or
business.
(b) The Fund shall operate as a closed-end, non-diversified,
management investment company in accordance with the 1940 Act and subject to any
fundamental policies and investment restrictions as may be adopted by the Board
of Managers and in accordance with the 1940 Act.
2.6. Board of Managers
(a) The number of Managers at the date of this Agreement is fixed
at not more than fifteen (15) Managers and no fewer than two (2). After the
Initial Closing Date, the number of Managers will be fixed from time to time by
the Managers then in office, which number may be greater, or lesser, than
fifteen (15), but no fewer than the minimum number of Managers permitted to
corporations organized under the laws of the State of Delaware, except that no
reduction in the number of Managers will serve to effect the removal of any
Manager.
(b) Prior to the Initial Closing Date, the Organizational Member
shall designate such persons who shall agree to be bound by all of the terms of
this Agreement to serve as Managers on the Board of Managers, subject to the
election of such persons prior to the Initial Closing Date by the Organizational
Member. By signing this Agreement or signing an investor application or
certification in connection with the purchase of an Interest, a Member admitted
to the Fund shall be deemed to have voted for the election of each of the
Managers so designated. After the Initial Closing Date, the Board of Managers
may, subject to the provisions of paragraphs (b) and (c) of this Section 2.6
with respect to the number of and vacancies in the position of Manager and the
provisions of Section 3.3 hereof with respect to the election of Managers to the
Board of Managers by Members, designate any person who shall agree to be bound
by all of the terms of this Agreement as a Manager. The names and mailing
addresses of the Managers shall be set forth in the books and records of the
Fund. The number of Managers shall be fixed from time to time by the Board of
Managers.
(c) Each Manager shall serve on the Board of Managers for the
duration of the term of the Fund, unless his or her status as a Manager shall be
sooner terminated pursuant to Section 4.2 hereof. In the event of any vacancy in
the position of Manager, the remaining Managers may appoint an individual to
serve in such capacity, so long as immediately after such appointment at least
two-thirds ((2)/3) of the Managers then serving would have been elected by the
Members. The Board of Managers may call a meeting of Members to fill any vacancy
in the position of Manager, and shall do so within 60 days after any date on
which Managers who were elected by the Members cease to constitute a majority of
the Managers then serving on the Board of Managers.
(d) In the event that no Manager remains to continue the business
of the Fund, the Organizational Member shall promptly call a meeting of the
Members, to be held within 60 days after the date on which the last Manager
ceased to act in that capacity, for the purpose of determining whether to
continue the business of the Fund and, if the business shall be continued, of
electing the required number of Managers to the Board of Managers. If the
Members shall determine at such meeting not to continue the business of the Fund
or if the required number of Managers is not elected within 60 days after the
date on which the last Manager ceased to act in that capacity, then the Fund
shall be dissolved pursuant to Section 6.1 hereof and the assets of the Fund
shall be liquidated and distributed pursuant to Section 6.2 hereof.
-5-
(e) The Managers may establish and maintain committees of the
Board of Managers, and the Managers may grant to such committees the authority
to, among other things: value the assets of the Fund; select and nominate the
Independent Managers of the Fund; recommend to the Board of Managers the
compensation to be paid to the Independent Managers; and recommend to the Board
of Managers the firm of certified public accountants that will conduct the
Fund's audits.
2.7 Members
(a) After the Initial Closing Date, the Fund shall accept
subscriptions for Interests as of the first day of each month. Any amounts
received in advance of a closing will be placed in an interest-bearing escrow
account with the Escrow Agent prior to their investment in the Fund. All
subscriptions are subject to the receipt of a properly completed subscription
agreement and cleared funds in the full amount of the subscription on or prior
to the applicable dates set out in the subscription agreement. Cleared funds
received prior to the due date set out in the subscription agreement will earn
interest until such due date, and any such interest will be allocated to the
investor, added to the amount of the investor's subscription and invested in the
Fund. The Board reserves the right to reject any subscription for Interests and
the Board may, in its sole discretion, suspend subscriptions for Interests at
any time and from time to time.
(b) The minimum initial investment in the Fund from each investor
is $100,000, and the minimum additional investment in the Fund is $50,000. The
minimum initial and additional investments may be reduced by the Board with
respect to individual investors or classes of investors.
(c) Except as otherwise permitted by the Board, all subscriptions
must be made in cash and must be transmitted by the time and in the manner that
is specified in the subscription documents of the Fund. Subscriptions are
payable in one installment. If the Board agrees to accept a contribution of
securities, the securities shall be valued in the same manner as the Fund values
its other assets.
2.8 Organizational Member
The initial contribution of capital to the Fund by the Organizational
Member shall be represented by an Interest, which Interest shall have the same
rights as other Interests held by Members.
2.9 Both Managers and Members
A Member may at the same time be a Manager and a Member, in which event
such Member's rights and obligations in each capacity shall be determined
separately in accordance with the terms and provisions of this Agreement or as
provided in the Delaware Act.
2.10 Limited Liability
Except as provided under applicable law, a Member shall not be liable
for the Fund's debts, obligations and liabilities in any amount in excess of the
capital account balance of such Member, plus such Member's share of
undistributed profits and assets. Except as required under applicable law, a
Manager shall not be liable for the Fund's debts, obligations and liabilities.
Members and former Members shall be liable for the repayment and
discharge of all debts and obligations of the Fund attributable to any Fiscal
Year (or relevant portion thereof) during which they are or were Members of the
Fund only to the extent of their respective interests in the Fund in the Fiscal
Year (or relevant portion thereof) to which any such debts and obligations are
attributable and shall not otherwise have any liability in respect of the debts
and obligations of the Fund.
-6-
The Members and all former Members shall share all losses, liabilities
or expenses suffered or incurred by virtue of the operation of the preceding
paragraphs of this Sec. 2.10 in proportion to their respective Investment
Percentages for the Fiscal Year (or relevant portion thereof) to which any debts
or obligations of the Fund are attributable. Members or former Members shall
share all losses, liabilities or expenses up to the limit of their respective
interests in the Fund for such Fiscal Year (or relevant portion thereof).
As used in this Sec. 2.10, the terms "interests in the Fund" and
"interest in the Fund" shall mean with respect to any Fiscal Year (or relevant
portion thereof) and with respect to each Member (or former Member) its interest
in its Capital Account that such Member (or former Member) would have received
(or in fact did receive) pursuant to the terms and provisions of Article upon
dissolution of the Fund as of the end of such Fiscal Year (or relevant portion
thereof).
Notwithstanding any other provision in this Agreement, in no event
shall any Member (or former Member) be obligated to make any additional
contribution to the Fund, or have any liability for the repayment and discharge
of the debts and obligations of the Fund, except that a Member (or former
Member) may be required, for purposes of meeting such Member's obligations under
this Sec. 2.10, to make additional contributions or payments, respectively, up
to, but in no event in excess of, the aggregate amount of returns of capital and
other amounts actually received by it from the Fund during or after the Fiscal
Year to which any debt or obligation is attributable.
ARTICLE III
MANAGEMENT
3.1 Management and Control
(a) Management and control of the business of the Fund shall be
vested in the Board of Managers, which shall have the right, power and
authority, on behalf of the Fund and in its name, to exercise all rights, powers
and authority of Managers under the Delaware Act and to do all things necessary
and proper to carry out the objective and business of the Fund and their duties
hereunder. No Manager shall have the authority individually to act on behalf of
or to bind the Fund except within the scope of such Manager's authority as
delegated by the Board of Managers. The parties hereto intend that, except to
the extent otherwise expressly provided herein, (i) each Manager shall be vested
with the same powers, authority and responsibilities on behalf of the Fund as
are customarily vested in each director of a Delaware corporation and (ii) each
Independent Manager shall be vested with the same powers, authority and
responsibilities on behalf of the Fund as are customarily vested in each
director of a closed-end management investment company registered under the 1940
Act that is organized as a Delaware corporation who is not an "interested
person" of such company, as such term is defined by the 1940 Act. During any
period in which the Fund shall have no Managers, the Investment Manager shall
continue to serve as the Investment Manager to the Fund and shall have the
authority to manage the business and affairs of the Fund.
(b) Members shall have no right to participate in and shall take
no part in the management or control of the Fund's business and shall have no
right, power or authority to act for or bind the Fund. Members shall have the
right to vote on any matters only as provided in this Agreement or on any
matters that require the approval of the holders of voting securities under the
1940 Act or as otherwise required in the Delaware Act.
(c) The Board of Managers may delegate to any other person any
rights, power and authority vested by this Agreement in the Board of Managers to
the extent permissible under applicable law, and may appoint persons to serve as
officers of the Fund, with such titles and authority as may be determined by the
Board of Managers consistent with applicable law.
-7-
3.2 Actions by the Board of Managers
(a) Unless provided otherwise in this Agreement, the Board of
Managers shall act only: (i) by the affirmative vote of a majority of the
Managers (including the vote of a majority of the Independent Managers if
required by the 0000 Xxx) present at a meeting duly called at which a quorum of
the Managers shall be present (in person or by telephone, if permitted by the
0000 Xxx) or (ii) by unanimous written consent of all of the Managers without a
meeting, if permitted under the 0000 Xxx.
(b) The Board of Managers may designate from time to time a
Chairman of the Board who shall preside at all meetings of the Board of
Managers. Meetings of the Board of Managers may be called by the Chairman of the
Board or by any two Managers, and may be held on such date and at such time and
place as the Board of Managers shall determine. Each Manager shall be entitled
to receive written notice of the date, time and place of such meeting within a
reasonable time in advance of the meeting. Except as otherwise required by the
1940 Act, notice need not be given to any Manager who shall attend a meeting
without objecting to the lack of notice or who shall execute a written waiver of
notice with respect to the meeting. Managers may attend and participate in any
meeting by telephone if permitted under 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 at
least two-thirds (2/3) of the total number of votes eligible to be cast by all
Members, and may be held at such time, date and place as the Board of Managers
shall determine. The Board of Managers shall arrange to provide written notice
of the meeting, stating the date, time and place of the meeting and the record
date therefor, to each Member entitled to vote at the meeting within a
reasonable time prior thereto. Failure to receive notice of a meeting on the
part of any Member shall not affect the validity of any act or proceeding of the
meeting, so long as a quorum shall be present at the meeting, except as
otherwise required by applicable law. Only matters set forth in the notice of a
meeting may be voted on by the Members at a meeting. The presence in person or
by proxy of Members holding a majority of the total number of votes eligible to
be cast by all Members as of the record date shall constitute a quorum at any
meeting. In the absence of a quorum, a meeting of the Members may be adjourned
by action of a majority of the Members present in person or by proxy without
additional notice to the Members. Except as otherwise required by any provision
of this Agreement or of the 1940 Act, (i) those candidates receiving a plurality
of the votes cast at any meeting of Members shall be elected as Managers and
(ii) all other actions of the Members taken at a meeting shall require the
affirmative vote of Members holding a majority of the total number of votes
eligible to be cast by those Members who are present in person or by proxy at
such meeting.
(b) Each Member shall be entitled to cast at any meeting of
Members a number of votes equivalent to such Member's Investment Percentage as
of the record date for such meeting. The Board of Managers shall establish a
record date not less than 10 days nor more than 60 days prior to the date of any
meeting of Members to determine eligibility to vote at such meeting and the
number of votes that each Member will be entitled to cast at the meeting, and
shall maintain for each such record date a list setting forth the name of each
Member and the number of votes that each Member will be entitled to cast at the
meeting.
(c) A Member may vote at any meeting of Members by a proxy
properly executed in writing by the Member and filed with the Fund before or at
the time of the meeting. A proxy may be suspended or revoked, as the case may
be, by the Member executing the proxy by a later writing delivered to the Fund
at any time prior to exercise of the proxy or if the Member executing the proxy
shall be present at the meeting and decide to vote in person. Any action of the
Members that is permitted to be taken at a meeting of the Members may be taken
without a meeting if consents in writing, setting forth the action taken, are
signed by Members holding a majority of the total number of votes eligible to be
cast or such greater percentage as may be required in order to approve such
action.
-8-
3.4 Custody of Assets of the Fund
The physical possession of all funds, Securities or other properties of
the Fund shall at all times, be held, controlled and administered by one or more
custodians retained by the Fund in accordance with the requirements of the 1940
Act and the rules thereunder.
3.5 Other Activities of Members and Managers
(a) The Managers shall not be required to devote all of their time
to the affairs of the Fund, but shall devote such time as may reasonably be
required to perform their obligations under this Agreement.
(b) Any Member or Manager, and any Affiliate of any Member or
Manager, may engage in or possess an interest in other business ventures or
commercial dealings of every kind and description, independently or with others,
including, but not limited to, acquisition and disposition of Securities,
provision of investment advisory or brokerage services, serving as directors,
officers, employees, advisors or agents of other companies, partners of any
partnership, members of any limited liability company, or trustees of any trust,
or entering into any other commercial arrangements. No Member or Manager shall
have any rights in or to such activities of any other Member or Manager, or any
profits derived therefrom.
3.6 Duty of Care
(a) Neither a Manager nor the Investment Manager shall be liable
to the Fund or to any of its Members for any loss or damage occasioned by any
act or omission in the performance of their services pursuant to any agreement,
including this Agreement, between a Manager, or the Investment Manager and the
Fund for the provision of services to the Fund unless it shall be determined by
final judicial decision on the merits from which there is no further right to
appeal that such loss is due to an act or omission of the Manager or the
Investment Manager, as applicable, constituting willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the performance
of their services to the Fund.
(b) Members not in breach of any obligation hereunder or under any
agreement pursuant to which the Member subscribed for an Interest shall be
liable to the Fund, any Member or third parties only as provided under the
Delaware Act.
3.7 Indemnification
(a) To the fullest extent permitted by law, the Fund shall,
subject to Section 3.7(b) hereof, indemnify each Manager (including for this
purpose his or her respective executors, heirs, assigns, successors or other
legal representatives), against all losses, claims, damages, liabilities, costs
and expenses, including, but not limited to, amounts paid in satisfaction of
judgments, in compromise, or as fines or penalties, and reasonable counsel fees,
incurred in connection with the defense or disposition of any action, suit,
investigation or other proceeding, whether civil or criminal, before any
judicial, arbitral, administrative or legislative body, in which such indemnitee
may be or may have been involved as a party or otherwise, or with which such
indemnitee may be or may have been threatened, while in office or thereafter, by
reason of being or having been a Manager of the Fund or the past or present
performance of services to the Fund by such indemnitee, except to the extent
such loss, claim, damage, liability, cost or expense shall have been finally
determined in a decision on the merits in any such action, suit, investigation
or other proceeding to have been incurred or suffered by such indemnitee by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of such indemnitee's office. The
rights of indemnification provided under this Section 3.7 shall not be construed
so as to provide for indemnification of a Manager for any liability (including
liability under federal securities laws which, under certain circumstances,
impose liability even on persons that act in good faith) to the extent (but only
to the extent) that such indemnification would be in violation of applicable
law, but shall be construed so as to effectuate the applicable provisions of
this Section 3.7 to the fullest extent permitted by law.
-9-
(b) Expenses, including reasonable counsel fees, so incurred by
any such indemnitee (but excluding amounts paid in satisfaction of judgments, in
compromise, or as fines or penalties), may be paid from time to time by the Fund
in advance of the final disposition of any such action, suit, investigation or
proceeding upon receipt of an undertaking by or on behalf of such indemnitee to
repay to the Fund amounts so paid if it shall ultimately be determined that
indemnification of such expenses is not authorized under Section 3.7(a) hereof;
provided, however, that (i) such indemnitee shall provide security for such
undertaking, (ii) the Fund shall be insured by or on behalf of such indemnitee
against losses arising by reason of such indemnitee's failure to fulfill such
undertaking, or (iii) a majority of the Managers (excluding any Manager who is
either seeking advancement of expenses hereunder or is or has been a party to
any other action, suit, investigation or proceeding involving claims similar to
those involved in the action, suit, investigation or proceeding giving rise to a
claim for advancement of expenses hereunder) or independent legal counsel in a
written opinion shall determine based on a review of readily available facts (as
opposed to a full trial-type inquiry) that there is reason to believe such
indemnitee ultimately will be entitled to indemnification.
(c) As to the disposition of any action, suit, investigation or
proceeding (whether by a compromise payment, pursuant to a consent decree or
otherwise) without an adjudication or a decision on the merits by a court, or by
any other body before which the proceeding shall have been brought, that an
indemnitee is liable to the Fund or its Members by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such indemnitee's office, indemnification shall be
provided pursuant to Section 3.7(a) hereof if (i) approved as in the best
interests of the Fund by a majority of the Managers (excluding any Manager who
is either seeking indemnification hereunder or is or has been a party to any
other action, suit, investigation or proceeding involving claims similar to
those involved in the action, suit, investigation or proceeding giving rise to a
claim for indemnification hereunder) upon a determination based upon a review of
readily available facts (as opposed to a full trial-type inquiry) that such
indemnitee acted in good faith and in the reasonable belief that such actions
were in the best interests of the Fund and that such indemnitee is not liable to
the Fund or its Members by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of such
indemnitee's office, or (ii) the Board of Managers secures a written opinion of
independent legal counsel based upon a review of readily available facts (as
opposed to a full trial-type inquiry) to the effect that such indemnification
would not protect such indemnitee against any liability to the Fund or its
Members to which such indemnitee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such indemnitee's office.
(d) Any indemnification or advancement of expenses made pursuant
to this Section 3.7 shall not prevent the recovery from any indemnitee of any
such amount if such indemnitee subsequently shall be determined in a decision on
the merits in any action, suit, investigation or proceeding involving the
liability or expense that gave rise to such indemnification or advancement of
expenses to be liable to the Fund or its Members by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such indemnitee's office. In (i) any suit brought by
a Manager (or other person entitled to indemnification hereunder) to enforce a
right to indemnification under this Section 3.7 it shall be a defense that, and
(ii) in any suit in the name of the Fund to recover any indemnification or
advancement of expenses made pursuant to this Section 3.7 the Fund shall be
entitled to recover such expenses upon a final adjudication that, the Manager or
other person claiming a right to indemnification under this Section 3.7 has not
met the applicable standard of conduct set forth in this Section 3.7. In any
such suit brought to enforce a right to indemnification or to recover any
indemnification or advancement of expenses made pursuant to this Section 3.7,
the burden of proving that the Manager or other person claiming a right to
indemnification is not entitled to be indemnified, or to any indemnification or
advancement of expenses, under this Section 3.7 shall be on the Fund (or any
Member acting derivatively or otherwise on behalf of the Fund or its Members).
-10-
(e) An indemnitee may not satisfy any right of indemnification or
advancement of expenses granted in this Section 3.7 or to which such indemnitee
may otherwise be entitled except out of the assets of the Fund, and no Member
shall be personally liable with respect to any such claim for indemnification or
advancement of expenses.
(f) The rights of indemnification provided hereunder shall not be
exclusive of or affect any other rights to which any person may be entitled by
contract or otherwise under law. Nothing contained in this Section 3.7 shall
affect the power of the Fund to purchase and maintain liability insurance on
behalf of any Manager or other person.
3.8 Fees, Expenses and Reimbursement
(a) The Investment Manager and its Affiliates shall be entitled to
receive such fees for services provided to the Fund as may be agreed to by the
Investment Manager (or its Affiliate) and the Fund pursuant to the Investment
Management Agreement (the "Investment Management Fee") or other applicable
agreement relating to such services, including, but not limited to any payments
made by the Investment Manager to selling agents and other financial advisers
that provide ongoing investor services ("Investor Servicing Fee").
(b) The Board of Managers may cause the Fund to compensate each
Manager who is not an officer or employee of the Investment Manager (or of its
Affiliates) for his or her services as such, and such Manager shall be
reimbursed by the Fund for reasonable travel and out-of-pocket expenses incurred
by him in performing his duties under this Agreement.
(c) The Fund shall bear all expenses incurred in its business and
operations, other than those specifically required to be borne by the Investment
Manager pursuant to the Investment Management Agreement. Expenses to be borne by
the Fund include, but are not limited to, the following:
(i) all expenses related to its investment program, including, but not
limited to, fees paid and expenses reimbursed directly or indirectly
to Investment Funds or Portfolio Managers (including management fees,
performance or incentive fees or allocations and redemption or
withdrawal fees, however titled or structured), all costs and expenses
directly related to portfolio transactions and positions for the
Fund's account such as direct and indirect expenses associated with
the Fund's investments, including its investments in Investment Funds
or Separately Managed Accounts (whether or not consummated), and
enforcing the Fund's rights in respect of such investments, transfer
taxes and premiums, taxes withheld on non-U.S. dividends, fees for
data and software providers, third-party research expenses,
professional fees (including, without limitation, the fees and
expenses of consultants, and experts for advice relating to the Fund
and, if applicable in the event the Fund invests through a Separately
Managed Account (or in connection with its temporary or cash
management investments), brokerage commissions, interest and
commitment fees on loans and debit balances, borrowing charges on
securities sold short, dividends on securities sold but not yet
purchased and margin fees;
(ii) all costs and expenses associated with the establishment of Separately
Managed Accounts (whether or not consummated);
(iii) any non-investment related interest expense;
(iv) attorneys' fees and disbursements associated with preparing and
updating the Fund's Private Placement Memorandum, agreements between
the Fund and its service providers or with qualifying prospective
investors, subscription documents and other Fund-related documents;
-11-
(v) fees and disbursements of any accountants engaged by the Fund, and
expenses related to the annual audit of the Fund;
(vi) the Investment Management Fee, the Investor Servicing Fee and
out-of-pocket expenses reimbursed to the Investment Manager;
(vii) fees paid and out-of-pocket expenses reimbursed to the Administrator,
Custodian or Escrow Agent;
(viii) escrow and other recordkeeping fees and expenses;
(ix) the costs of errors and omissions/directors' and officers' liability
insurance and a fidelity bond;
(x) the fees of the Independent Managers and out-of-pocket expenses of all
Managers in attending meetings of the Board and committees of the
Board;
(xi) the costs of preparing and mailing reports and other communications,
including proxy, tender offer correspondence or similar materials, to
Members;
(xii) all expenses relating to meetings of the Members, including travel
and other out-of-pocket expenses of all Managers in attending such
meetings;
(xiii) all costs and charges for equipment or services used in
communicating information regarding the Fund's transactions among the
Investment Manager and any custodian or other agent engaged by the
Fund; and
(xiv) any extraordinary expenses, including indemnification expenses as
provided for in this LLC Agreement.
The Investment Manager and its Affiliates shall be entitled to
reimbursement from the Fund for any of the above expenses that it pays on behalf
of the Fund.
(d) Subject to procuring any required regulatory approvals, from time
to time the Fund may, alone or in conjunction with other registered or
unregistered investment funds or other accounts for which the Investment
Manager, or any of its Affiliates, acts as general partner or investment
adviser, purchase insurance in such amounts, from such insurers and on such
terms as the Board of Managers shall determine.
ARTICLE IV
TERMINATION OF STATUS OF INVESTMENT MANAGER AND MANAGERS,
TRANSFERS AND REPURCHASES
4.1 Termination of Status of a Manager
The status of a Manager shall terminate if the Manager (i) shall die;
(ii) shall be adjudicated incompetent; (iii) shall voluntarily withdraw as a
Manager (upon not less than 90 days' prior written notice to the other
Managers); (iv) shall be removed pursuant to Section 4.2; (v) shall be certified
by a physician to be mentally or physically unable to perform his or her duties
hereunder; (vi) shall be declared bankrupt by a court with appropriate
jurisdiction, file a petition commencing a voluntary case under any bankruptcy
law or make an assignment for the benefit of creditors; (vii) shall have a
receiver appointed to administer the property or affairs of such Manager; or
(viii) shall otherwise cease to be a Manager of the Fund under the Delaware Act.
-12-
4.2 Removal of the Managers
Any Manager may be removed at any time with or without cause 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 80% of the total number of votes eligible to be cast by
all Members.
4.3 Transfer of Interests of Members
(a) Except as otherwise provided herein, no person may become a
substituted Member without the written consent of the Board, which consent may
be withheld for any reason in its sole discretion. An Interest held by a Member
may be transferred only: (1) by operation of law as a result of the death,
divorce, bankruptcy, insolvency, adjudicated incompetence or dissolution of the
Member; or (2) with the written consent of the Board, which may be withheld in
its sole discretion and is expected to be granted, if at all, only under limited
circumstances. Unless the Fund consults with counsel to the Fund and counsel
confirms that the transfer will not cause the Fund to be treated as a "publicly
traded partnership" taxable as a corporation, the Board generally shall not
consent to a transfer unless the following conditions are met: (1) the
transferring Member has been a Member for at least six months; (2) the proposed
transfer is to be made on the effective date of an offer by the Fund to (3) the
transfer is (a) one 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 transferring Member, for example, certain transfers to
affiliates, gifts and contributions to family entities, (b) to members of the
transferring Member's immediate family (siblings, spouse, parents or children),
or (c) a distribution from a qualified retirement plan or an individual
retirement account. Any pledge, transfer, or assignment not made in accordance
with this Section 4.3 shall be void.
(b) The Board of Managers may not consent to a Transfer of an Interest
or a portion thereof of a Member unless: (i) the person to whom the Interest is
Transferred (or each of the person's beneficial owners if such a person is a
"private investment company" as defined in paragraph (d)(3) of Rule 205-3 under
the Advisers Act) is a person whom the Board of Managers believes meets the
requirements of paragraph (d)(1) of Rule 205-3 under the Advisers Act or any
successor rule thereto; and (ii) the entire Interest of the Member is
Transferred to a single transferee or, after the Transfer of a portion of an
Interest, the balance of the Capital Account of each of the transferee and
transferor is not less than $50,000. Any transferee that acquires an Interest by
operation of law as the result of the death, divorce, bankruptcy, insolvency,
adjudicated incompetency 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 Fund as a Member. Each Member effecting a
Transfer and its transferee agrees to pay all expenses, including attorneys' and
accountants' fees, incurred by the Fund in connection with such Transfer.
(c) Each Member shall indemnify and hold harmless the Fund, the
Managers, the Investment Manager, each other Member and any Affiliate of the
foregoing against all losses, claims, damages, liabilities, costs and expenses
(including legal or other expenses incurred in investigating or defending
against any such losses, claims, damages, liabilities, costs and expenses or any
judgments, fines and amounts paid in settlement), joint or several, to which
such persons may become subject by reason of or arising from (i) any Transfer
made by such Member in violation of this Section 4.3 and (ii) any
misrepresentation by such Member in connection with any such Transfer.
-13-
4.4 Repurchase of Interests
(a) Except as otherwise provided in this Agreement, no Member or other
person holding an Interest or portion thereof shall have the right to withdraw
or tender to the Fund for repurchase that Interest or portion thereof. The Board
of Managers from time to time, in its sole discretion and on such terms and
conditions as it may determine, may cause the Fund to repurchase Interests or
portions thereof pursuant to written tenders. However, the Fund shall not offer
to repurchase Interests on more than four occasions during any one Fiscal Year
unless it has received an opinion of counsel to the effect that such more
frequent offers would not cause any adverse tax consequences to the Fund or the
Members. In determining whether to cause the Fund to repurchase Interests or
portions thereof pursuant to written tenders, the Board of Managers shall
consider the recommendation of the Investment Manager, and shall also consider
the following factors, among others:
(i) whether any Members have requested to tender Interests or
portions thereof to the Fund;
(ii) the liquidity of the Fund's assets (including fees and
costs associated with withdrawing from Investment Funds and/or
disposing of assets managed by Subadvisers);
(iii) the investment plans and working capital and reserve
requirements of the Fund;
(iv) the relative economies of scale of the tenders with
respect to the size of the Fund;
(v) the history of the Fund in repurchasing Interests;
(vi) the availability of information as to the value of the
Fund's interests in Investment Funds;
(vii) the existing conditions of the securities markets and
the economy generally, as well as political, national or
international developments or current affairs;
(viii) any anticipated tax consequences to the Fund of any
proposed repurchases of Interests; and
(ix) the recommendations of the Investment Manager.
The Board of Managers shall cause the Fund to repurchase Interests or
portions thereof pursuant to written tenders only on terms determined by the
Board of Managers to be fair to the Fund and to all Members (including persons
holding Interests acquired from Members), as applicable.
(b) A Member who tenders for repurchase only a portion of the Member's
Interest will be required to maintain a capital account balance equal to
$50,000, if any, that is to be debited to the capital account of the Member as
of the Valuation Date with respect to the portion of the Interest repurchased.
If a Member tenders an amount that would cause the Member's capital account
balance to fall below the required minimum, the Fund reserves the right to
reduce the amount to be purchased from the Member so that the required minimum
balance is maintained.
(c) Interests are expected to be repurchased as of June 30 and December
31 of each year at the net asset value as determined on such applicable dates
(each such date, a "Valuation Date"). However, the Board reserves the right to
offer to repurchase Interests at any time. The Board also reserves the right to
distribute securities as payment for repurchased Interests.
(d) The Board of Managers may cause the Fund to repurchase an Interest
or portion thereof of a Member or any person acquiring an Interest or portion
thereof from or through a Member in the event that the Board of Managers
determines or has reason to believe that:
-14-
(i) such an Interest or portion thereof has been transferred
in violation of Section 4.3 hereof, or such an Interest or
portion thereof has vested in any person by operation of law
as the result of the death, divorce, bankruptcy, insolvency,
adjudicated incompetency or dissolution of a Member;
(ii) ownership of such an Interest by a Member or other person
will cause the Fund to be in violation of, or subject the Fund
to additional registration or regulation under, the
securities, commodities or other laws of the United States or
any other relevant jurisdiction;
(iii) continued ownership of such an Interest may be harmful
or injurious to the business or reputation of the Fund, the
Managers or the Investment Manager, or may subject the Fund or
any of the Members to an undue risk of adverse tax or other
fiscal or regulatory consequences;
(iv) such Member's continued participation in the Fund may
cause the Fund to be classified as a "publicly traded
partnership" within the meaning of Section 7704 of the Code
and the Treasury Regulations thereunder;
(v) 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;
(vi) with respect to a Member subject to Special Laws or
Regulations, the Member is likely to be subject to additional
regulatory or compliance requirements under these Special Laws
or Regulations by virtue of continuing to hold an Interest; or
(vii) it would be in the best interests of the Fund, as
determined by the Board of Managers in its sole discretion,
for the Fund to repurchase such an Interest or portion
thereof.
(e) Repurchases of Interests or portions thereof by the Fund shall be
payable promptly after the date of each such repurchase or, in the case of an
offer by the Fund to repurchase Interests, promptly after the expiration date of
such repurchase offer in accordance with the terms of such offer. Payment of the
purchase price for an Interest (or portion thereof) shall consist of a
non-interest-bearing and non-transferable promissory note (the "Promissory
Note") in an amount equal to the net asset value of the Interest (or portion
thereof) repurchased by the Fund determined as of the date of such repurchase
(the "Repurchase Value"). Two payments shall be made in respect of the
Promissory Note: (i) an amount equal to at least 95% of the estimated Repurchase
Value (the "Initial Payment"); and (ii) an amount equal to the excess, if any,
of the Repurchase Value over the Initial Payment (the "Post-Audit Payment"). The
Initial Payment shall be made on or before the later of (i) 30 days after the
Repurchase Date, or (2) if the Fund has requested withdrawals of its capital
from any Investment Funds, ten business days after the Fund has received at
least 95% of the aggregate amount withdrawn by the Fund from the Investment
Funds. The Post-Audit Payment shall be made promptly after the completion of the
next annual audit of the Fund's financial statements. Notwithstanding anything
in the foregoing to the contrary, the Board of Managers, in its discretion, may
pay any portion of the repurchase price in marketable Securities (or any
combination of marketable Securities and cash) having a value, determined as of
the date of repurchase, equal to the amount to be repurchased.
(f) Upon a vote of a majority of the Board, including a majority of the
Independent Managers, the Fund may suspend or postpone a repurchase offer:
-15-
(i) for any period during which circumstances exist as a
result of which it is not reasonably practicable for the Fund
to dispose of securities it owns or to determine the value of
the Fund's net assets;
(ii) for any other periods that the SEC permits by order for
the protection of Members; or
(iii) for any period as the Board deems advisable to the Fund
and its Members.
(g) A Member may at any time submit to the Fund a written request that
the Fund repurchase the entire Interest of such Member, as contemplated by
Section 6.1(a)(iii) hereof. Any such request shall be sent to the Fund by
registered or certified mail, return receipt requested, and shall be deemed
valid only if the Member has received a letter from the Fund acknowledging its
receipt of the request. The Fund shall send such letter to the Member promptly
upon its receipt of the Member's request.
ARTICLE V
CAPITAL
5.1 Contributions to Capital
(a) The minimum initial contribution of each Member to the capital of
the Fund shall be such amount as the Board of Managers, in its discretion, may
determine from time to time. The amount of the initial contribution of each
Member shall be recorded on the books and records of the Fund upon acceptance as
a contribution to the capital of the Fund. The Managers shall not be entitled to
make contributions of capital to the Fund as Managers of the Fund, but may make
contributions to the capital of the Fund as Members. The Investment Manager may
make contributions to the capital of the Fund as a Member.
(b) Members may make additional contributions to the capital of the
Fund effective as of such times as the Board of Managers, in its discretion, may
permit, subject to Section 2.7 hereof, but no Member shall be obligated to make
any additional contribution to the capital of the Fund except to the extent
provided in Section 5.6 hereof. The minimum initial capital contribution of a
Member to the capital of the Fund shall be such amount as the Board of Managers,
in its sole discretion, may determine from time to time.
(c) Initial and any additional contributions to the capital of the Fund
by any Member shall be payable in cash, payable in readily available funds at
the date of the proposed acceptance of the contribution. The Board of Managers
may, in its sole discretion, allow initial and additional capital contributions
in kind subject to the investment objectives and strategies set forth in the
Fund's Form N-2.
5.2 Rights of Members to Capital
No Member shall be entitled to interest on any contribution to the
capital of the Fund, nor shall any Member be entitled to the return of any
capital of the Fund except (i) upon the repurchase by the Fund of a part or all
of such Member's Interest pursuant to Section 4.4 hereof or (ii) upon the
liquidation of the Fund's assets pursuant to Section 6.2 hereof. No Member shall
be liable for the return of any such amounts. No Member shall have the right to
require partition of the Fund's property or to compel any sale or appraisal of
the Fund's assets.
-16-
5.3 Capital Accounts
(a) The Fund shall maintain a separate Capital Account for each Member.
(b) Each Member's Capital Account shall have an initial balance equal
to the amount of cash and the value of any Securities constituting such Member's
initial contribution to the capital of the Fund.
(c) Each Member's Capital Account shall be increased by the sum of (i)
the amount of cash and the value of any Securities constituting additional
contributions by such Member to the capital of the Fund permitted pursuant to
Section 5.1 hereof, plus (ii) all amounts credited to such Member's Capital
Account pursuant to Sections 5.4 through 5.6 hereof.
(d) Each Member's Capital Account shall be reduced by the sum of (i)
the amount of any repurchase of the Interest, or portion thereof, of such Member
or distributions to such Member pursuant to Sections 4.4, 5.8 or 6.2 hereof
which are not reinvested (net of any liabilities secured by any asset
distributed that such Member is deemed to assume or take subject to under
Section 752 of the Code), plus (ii) any amounts debited against such Capital
Account pursuant to Sections 5.4 through 5.6 hereof.
5.4 Allocation of Net Profit and Net Loss
As of the last day of each Fiscal Period, any Net Profit or Net Loss
for the Fiscal Period shall be allocated among and credited to or debited
against the Capital Accounts of the Members in accordance with their respective
Investment Percentages for such Fiscal Period. If a Member has made more than
one capital contribution, the allocation of Net Profit or Net Loss shall be
determined as if each such capital contribution was a separate Capital Account
of such Member.
5.5 Allocation of Certain Expenditures
Except as otherwise provided for in this Agreement and unless
prohibited by the 1940 Act, any expenditures payable by the Fund, to the extent
determined by the Board of Managers to have been paid or withheld on behalf of,
or by reason of particular circumstances applicable to, one or more but fewer
than all of the Members, shall be charged to only those Members on whose behalf
such payments are made or whose particular circumstances gave rise to such
payments. Such charges shall be debited from the Capital Accounts of such
Members as of the close of the Fiscal Period during which any such items were
paid or accrued by the Fund.
5.6 Reserves
Appropriate reserves may be created, accrued and charged against Net
Assets and proportionately against the Capital Accounts of the Members for
contingent liabilities, if any, as of the date any such contingent liability
becomes known to the Investment Manager or the Board of Managers, such reserves
to be in the amounts that the Board of Managers, in its sole discretion, deems
necessary or appropriate. The Board of Managers may increase or reduce any such
reserves from time to time by such amounts as the Board of Managers, in its sole
discretion, deems necessary or appropriate. The amount of any such reserve, or
any increase or decrease therein, shall be proportionately charged or credited,
as appropriate, to the Capital Accounts of those parties who are Members at the
time when such reserve is created, increased or decreased, as the case may be,
except that, if the reserves, or any increase or decrease in them, is deemed by
the Board, in its sole discretion, to be material, the amount of the reserves,
increase, or decrease may instead be charged or credited to those investors who
were Members at the time, as determined by the Board, 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.
-17-
5.7 Tax Allocations
For each fiscal year, items of income, deduction, gain, loss or credit
as determined for federal income tax purposes will be allocated among the
Members in such manner as to reflect amounts allocated to the Capital Accounts
of the Members under this Agreement. Such allocation will be made pursuant to
the principles of Sections 704(b) and 704(c) of the Internal Revenue Code of
1986, as amended (the "Code"), and in conformity with Regulations xx.xx.
1.704-1(b)(2)(iv)(f) and 1.704-1(b)(4)(i) promulgated thereunder, or the
successor provisions to such Section and Regulations. Notwithstanding anything
to the contrary in this Agreement, there will be allocated to the Members such
gains or income as will be necessary to satisfy the "qualified income offset"
requirements of Regulations ss. 1.704-1(b)(2)(ii)(d).
If the Fund realizes capital gains (including short-term
capital gains) or capital losses for federal income tax purposes for any Fiscal
Year as of the end of which one or more Positive Basis Members (as hereinafter
defined) or Negative Basis Members (as hereinafter defined) withdraw from the
Fund pursuant to Articles IV, VI or VII, the Board of Directors may elect to
allocate such capital gains or capital losses as follows: (i) to allocate such
capital 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 capital gains shall have been so
allocated or the Positive Basis of each such Positive Basis Member shall have
been eliminated, (ii) to allocate any capital gains not so allocated to Positive
Basis Members to the other Members in such manner as shall equitably reflect the
amounts credited to such Members' Capital Accounts pursuant to Sec. 5.4, (iii)
to allocate such capital 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 capital losses
shall have been so allocated or the Negative Basis of each such Negative Basis
Member shall have been eliminated, and (iv) to allocate any capital losses not
so allocated to Negative Basis Members to the other Members in such manner as
shall equitably reflect the amounts credited to such Members' Capital Accounts
pursuant to Sec. 5.4.
As used herein, (i) the term "Positive Basis" shall mean, with
respect to any Members and as of any time of calculation, the amount by which
its interest in the Fund as of such time exceeds its "adjusted tax basis" for
Federal income tax purposes, in its interest in the Fund 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), (ii) the term "Positive Basis Member" shall mean any Member who
withdraws from the Fund and who has Positive Basis as of the effective date of
its withdrawal, but such Member shall cease to be a Positive Basis Member at
such time as it shall have received allocations pursuant to clause (i) of the
preceding sentence equal to its Positive Basis as of the effective date of its
withdrawal, (iii) the term "Negative Basis" shall mean, with respect to any
Member and as of any time of calculation, the amount by which its "adjusted tax
basis" for Federal income tax purposes in its interest in the Fund 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) exceeds its interest in the Fund as of such time, and (iv) the
term "Negative Basis Member" shall mean any Member who withdraws from the Fund
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 preceding sentence equal to
its Negative Basis as of the effective date of its withdrawal.
5.8 Distributions
The Board of Managers, in its sole discretion, may authorize the Fund
to make distributions in cash or in kind at any time to all of the Members on a
pro rata basis in accordance with the Members' Investment Percentages.
-18-
5.9 Withholding
(a) The Board of Managers may withhold and pay over to the Internal
Revenue Service (or any other relevant taxing authority) taxes from any
distribution to any Member to the extent required by the Code or any other
applicable law.
(b) For purposes of this Agreement, any taxes so withheld by the Fund
with respect to any amount distributed by the Fund to any Member shall be deemed
to be a distribution or payment to such Member, reducing the amount otherwise
distributable to such Member pursuant to this Agreement and reducing the Capital
Account of such Member. If the amount of such taxes is greater than any such
distributable amounts, then such Member and any successor to such Member's
Interest shall pay to the Fund as a contribution to the capital of the Fund,
upon demand of the Board of Managers, the amount of such excess.
(c) The Board of Managers shall not be obligated to apply for or obtain
a reduction of or exemption from withholding tax on behalf of any Member that
may be eligible for such reduction or exemption. To the extent that a Member
claims to be entitled to a reduced rate of, or exemption from, a withholding tax
pursuant to an applicable income tax treaty, or otherwise, the Member shall
furnish the Board of Managers with such information and forms as such Member may
be required to complete where necessary to comply with any and all laws and
regulations governing the obligations of withholding tax agents. Each Member
represents and warrants that any such information and forms furnished by such
Member shall be true and accurate and agrees to indemnify the Fund and each of
the Members from any and all damages, costs and expenses resulting from the
filing of inaccurate or incomplete information or forms relating to such
withholding taxes.
ARTICLE VI
DISSOLUTION AND LIQUIDATION
6.1 Dissolution
(a) The Fund shall be dissolved:
(i) upon the affirmative vote to dissolve the Fund by both:
(i) the Board of Managers and (ii) Members holding at least
80% of the total number of votes eligible to be cast by all
Members;
(ii) upon the failure of Members to elect a successor Manager
at a meeting called by the Organizational Member in accordance
with Section 2.6(c) hereof when no Manager remains to continue
the business of the Fund;
(iii) upon the expiration of any two year period that
commences on the date on which any Member has submitted, in
accordance with the procedure specified in Section 4.4(h), a
written notice to the Fund requesting the repurchase of its
entire Interest by the Fund, if such Interest has not been
repurchased by the Fund; or
(iv) as required by operation of law.
(b) Dissolution of the Fund shall be effective on the later of the day
on which the event giving rise to the dissolution shall occur or the conclusion
of any applicable 60 day period during which the Board of Managers and Members
may elect to continue the business of the Fund as provided above, but the Fund
shall not terminate until the assets of the Fund have been liquidated in
accordance with Section 6.2 hereof and the Certificate has been canceled.
-19-
6.2 Liquidation of Assets
(a) Upon the dissolution of the Fund as provided in Section 6.1 hereof,
the Board of Managers shall promptly appoint the Organizational Member as the
liquidator and the Organizational Member shall liquidate the business and
administrative affairs of the Fund, except that if the Board of Managers does
not appoint the Organizational Member as the liquidator or the Organizational
Member is unable to perform this function, a liquidator elected by Members
holding a majority of the total number of votes eligible to be cast by all
Members shall promptly liquidate the business and administrative affairs of the
Fund. Net Profit and Net Loss during the period of liquidation shall be
allocated pursuant to Section 5.4 hereof. The proceeds from liquidation (after
establishment of appropriate reserves for contingencies in such amount as the
Board of Managers or liquidator shall deem appropriate in its sole discretion as
applicable) shall be distributed in the following manner:
(i) the debts of the Fund, other than debts, liabilities or
obligations to Members, and the expenses of liquidation
(including legal and accounting expenses incurred in
connection therewith), up to and including the date that
distribution of the Fund's assets to the Members has been
completed, shall first be paid on a pro rata basis;
(ii) such debts, liabilities or obligations as are owing to
the Members shall next be paid in their order of seniority and
on a pro rata basis; and
(iii) 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 (and credits and debits) 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)(iv).
(b) Anything in this Section 6.2 to the contrary notwithstanding, upon
dissolution of the Fund, the Board of Managers or other liquidator may
distribute in kind any assets of the Fund as close to ratably as reasonably
possible; 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 Fund shall adopt for tax accounting purposes any accounting
method that the Board of Managers shall decide in its sole discretion is in the
best interests of the Fund. The Fund's accounts shall be maintained in U.S.
currency.
(b) After the end of each taxable year, the Fund shall furnish to each
Member such information regarding the operation of the Fund and such Member's
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.
-20-
(c) Except as otherwise required by the 1940 Act, or as may otherwise
be permitted by rule, regulation or order, within 60 days after the close of the
period for which a report required under this Section 7.1(c) is being made, the
Fund shall furnish to each Member a semi-annual report and an annual report
containing the information required by such Act. The Fund shall cause financial
statements contained in each annual report furnished hereunder to be accompanied
by a certificate of independent public accountants based upon an audit performed
in accordance with U.S. generally accepted accounting principles. The Fund may
furnish to each Member such other periodic reports as it deems necessary or
appropriate in its discretion.
7.2 Determinations by the Board of Managers
(a) All matters concerning the determination and allocation among the
Members of the amounts to be determined and allocated pursuant to Article V
hereof, including any taxes thereon and accounting procedures applicable
thereto, shall be determined by the Board of Managers unless specifically and
expressly otherwise provided for by the provisions of this Agreement or required
by law, and such determinations and allocations shall be final and binding on
all the Members.
(b) The Board of Managers may make such adjustments to the computation
of Net Profit or Net Loss, or any components comprising any of the foregoing as
it considers appropriate to reflect fairly and accurately the financial results
of the Fund and the intended allocation thereof among the Members.
7.3 Valuation of Assets
(a) Except as may be required by the 1940 Act, the Board of Managers
shall value or have valued any Securities or other assets and liabilities of the
Fund as of the close of business on the last day of each Fiscal Period in
accordance with such valuation procedures as shall be established from time to
time by the Board of Managers and which conform to the requirements of the 1940
Act. In determining the value of the assets of the Fund, no value shall be
placed on the goodwill or name of the Fund, or the office records, files,
statistical data or any similar intangible assets of the Fund not normally
reflected in the Fund's accounting records, but there shall be taken into
consideration any items of income earned but not received, expenses incurred but
not yet paid, liabilities, fixed or contingent, and any other prepaid expenses
to the extent not otherwise reflected in the books of account, and the value of
options or commitments to purchase or sell Securities or commodities pursuant to
agreements entered into prior to such valuation date.
(b) The Fund will value interests in Investment Funds at their "fair
value," as determined in good faith by the Board of Managers, which value
ordinarily will be the value of an interest in an Investment Fund determined by
the Portfolio Manager of the Investment Fund in accordance with the policies
established by the Investment Fund, absent information indicating that such
value does not represent the fair value of the interest.
(c) The value of Securities and other assets of the Fund and the net
worth of the Fund as a whole determined pursuant to this Section 7.3 shall be
conclusive and binding on all of the Members and all parties claiming through or
under them.
-21-
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:
(i) increase the obligation of a Member to make any
contribution to the capital of the Fund;
(ii) reduce the Capital Account of a Member other than in
accordance with Article V; or
(iii) modify the events causing the dissolution of the Fund;
may be made only if (1) the written consent of each Member adversely affected
thereby is obtained prior to the effectiveness thereof or (2) 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 its entire Interest for repurchase by the Fund
pursuant to Article IV.
(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 8.1 shall specifically include the power to:
(i) restate this Agreement together with any amendments hereto
that have been duly adopted in accordance herewith to
incorporate such amendments in a single, integrated document;
(ii) amend this Agreement (other than with respect to the
matters set forth in Section 8.1(a) hereof) to effect
compliance with any applicable law or regulation or to cure
any ambiguity or to correct or supplement any provision hereof
that may be inconsistent with any other provision hereof; and
(iii) amend this Agreement to make such changes as may be
necessary or advisable to ensure that the Fund will not be
treated as an association or a publicly traded partnership
taxable as a corporation as defined in Section 7704(b) of the
Code.
(d) The Board of Managers shall cause written notice to be given of any
amendment to this Agreement (other than any amendment of the type contemplated
by Section 8.1(c)(i) 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 Fund's assets appointed
pursuant to Section 6.2 hereof with full power of substitution, the true and
lawful representatives and attorneys-in-fact of, and in the name, place and
stead of, such Member, with the power from time to time to make, execute, sign,
acknowledge, swear to, verify, deliver, record, file and/or publish:
(i) any amendment to this Agreement that complies with the
provisions of this Agreement (including the provisions of
Section 8.1 hereof);
-22-
(ii) any amendment to the Certificate required because this
Agreement is amended, including, without limitation, an
amendment to effectuate any change in the membership of the
Fund; and
(iii) all such other instruments, documents and certificates
that, in the opinion of legal counsel to the Fund, may from
time to time be required by the laws of the United States of
America, the State of Delaware or any other jurisdiction in
which the Fund shall determine to do business, or any
political subdivision or agency thereof, or that such legal
counsel may deem necessary or appropriate to effectuate,
implement and continue the valid existence and business of the
Fund as a limited liability company under the Delaware Act.
(b) Each Member is aware that the terms of this Agreement permit
certain amendments to this Agreement to be effected and certain other actions to
be taken or omitted by or with respect to the Fund without such Member's
consent. If an amendment to the Certificate or this Agreement or any action by
or with respect to the Fund is taken in the manner contemplated by this
Agreement, each Member agrees that, notwithstanding any objection that such
Member may assert with respect to such action, the attorneys-in-fact appointed
hereby are authorized and empowered, with full power of substitution, to
exercise the authority granted above in any manner that may be necessary or
appropriate to permit such amendment to be made or action lawfully taken or
omitted. Each Member is fully aware that each Member will rely on the
effectiveness of this special power-of-attorney with a view to the orderly
administration of the affairs of the Fund.
(c) This power-of-attorney is a special power-of-attorney and is
coupled with an interest in favor of each of the Managers and as such:
(i) shall be irrevocable and continue in full force and effect
notwithstanding the subsequent death or incapacity of any
party granting this power-of-attorney, regardless of whether
the Fund or Board of Managers shall have had notice thereof;
and
(ii) 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 Fund as a substituted
Member, this power-of-attorney given by the transferor shall
survive the delivery of such assignment for the sole purpose
of enabling the Board of Managers to execute, acknowledge and
file any instrument necessary to effect such substitution.
8.3 Notices
Except as otherwise set forth in this Agreement, notices that may or
are required to be provided under this Agreement shall be made, if to a Member,
by regular mail, or if to the Fund, the Board of Managers or the Investment
Manager, by hand delivery, registered or certified mail return receipt
requested, commercial courier service, telex or telecopier, and shall be
addressed to the respective parties hereto at their addresses as set forth in
the books and records of the Fund. Notices shall be deemed to have been provided
when delivered by hand, on the date indicated as the date of receipt on a return
receipt or when received if sent by regular mail, commercial courier service,
telex or telecopier. A document that is not a notice and that is required to be
provided under this Agreement by any party to another party may be delivered by
any reasonable means.
8.4 Agreement Binding Upon Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors, assigns, executors,
trustees or other legal representatives, but the rights and obligations of the
parties hereunder may not be Transferred or delegated except as provided in this
Agreement and any attempted Transfer or delegation thereof that is not made
pursuant to the terms of this Agreement shall be void.
-23-
8.5 Applicability of 1940 Act and Form N-2
The parties hereto acknowledge that this Agreement is not intended to,
and does not, set forth the substantive provisions contained in the 1940 Act and
the Form N-2 that affect numerous aspects of the conduct of the Fund's business
and of the rights, privileges and obligations of the Members. Each provision of
this Agreement shall be subject to and interpreted in a manner consistent with
the applicable provisions of the 1940 Act and the Form N-2.
8.6 Choice of Law
Notwithstanding the place where this Agreement may be executed by any
of the parties hereto, the parties expressly agree that all the terms and
provisions hereof shall be construed under the laws of the State of Delaware,
including the Delaware Act without regard to the conflict of law principles of
such State.
8.7 Not for Benefit of Creditors
The provisions of this Agreement are intended only for the regulation
of relations among past, present and future Members, Managers and the Fund. This
Agreement is not intended for the benefit of non-Member creditors and no rights
are granted to non-Member creditors under this Agreement.
8.8 Consents
Any and all consents, agreements or approvals provided for or permitted
by this Agreement shall be in writing and a signed copy thereof shall be filed
and kept with the books of the Fund.
8.9 Merger and Consolidation
(a) The Fund may merge or consolidate with or into one or more limited
liability companies formed under the Delaware Act or other business entities
pursuant to an agreement of merger or consolidation that has been approved in
the manner contemplated by Section 18-209(b) of the Delaware Act.
(b) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, an agreement of merger or consolidation approved in accordance
with Section 18-209(b) of the Delaware Act may, to the extent permitted by
Section 18-209(f) of the Delaware Act, (i) effect any amendment to this
Agreement, (ii) effect the adoption of a new limited liability company agreement
for the Fund if it is the surviving or resulting limited liability Fund in the
merger or consolidation, or (iii) provide that the limited liability Fund
agreement of any other constituent limited liability Fund to the merger or
consolidation (including a limited liability Fund formed for the purpose of
consummating the merger or consolidation) shall be the limited liability Fund
agreement of the surviving or resulting limited liability Fund.
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.
-24-
8.11 Confidentiality
(a) A Member may obtain from the Fund such information regarding the
affairs of the Fund as is just and reasonable under the Delaware Act, subject to
reasonable standards (including standards governing what information and
documents are to be furnished, at what time and location and at whose expense)
established by the Board of Managers.
(b) Each Member covenants that, except as required by applicable law or
any regulatory body, it will not divulge, furnish or make accessible to any
other person the name and/or address (whether business, residence or mailing) of
any Member (collectively, "Confidential Information") without the prior written
consent of the Board of Managers, which consent may be withheld in its sole
discretion.
(c) Each Member recognizes that in the event that this Section 8.11 is
breached by any Member or any of its principals, partners, members, directors,
officers, employees or agents or any of its Affiliates, including any of such
Affiliates' principals, partners, members, directors, officers, employees or
agents, irreparable injury may result to the non-breaching Members and the Fund.
Accordingly, in addition to any and all other remedies at law or in equity to
which the non-breaching Members and the Fund may be entitled, such Members shall
also have the right to obtain equitable relief, including, without limitation,
injunctive relief, to prevent any disclosure of Confidential Information, plus
reasonable attorneys' fees and other litigation expenses incurred in connection
therewith. In the event that any non-breaching Member or the Fund determines
that any of the other Members or any of its principals, partners, members,
directors, officers, employees or agents or any of its Affiliates, including any
of such Affiliates' principals, partners, members, directors, officers,
employees or agents should be enjoined from or required to take any action to
prevent the disclosure of Confidential Information, each of the other
non-breaching Members agrees to pursue in a court of appropriate jurisdiction
such injunctive relief.
8.12 Certification of Non-Foreign Status
Each Member or transferee of an Interest from a Member shall certify,
upon admission to the Fund and at such other times thereafter as the Board of
Managers may request, whether such Member is a "United States Person" within the
meaning of Section 7701(a)(30) of the Code on forms to be provided by the Fund,
and shall notify the Fund within 60 days of any change in such Member's status.
8.13 Severability
If any provision of this Agreement is determined by a court of
competent jurisdiction not to be enforceable in the manner set forth in this
Agreement, each Member agrees that it is the intention of the Members that such
provision should be enforceable to the maximum extent possible under applicable
law. If any provisions of this Agreement are held to be invalid or
unenforceable, such invalidation or unenforceability shall not affect the
validity or enforceability of any other provision of this Agreement (or portion
thereof).
8.14 Filing of Returns
The Board of Managers or its designated agent shall prepare and file,
or cause the accountants of the Fund to prepare and file, a Federal information
tax return in compliance with Section 6031 of the Code and any required state
and local income tax and information returns for each tax year of the Fund.
8.15 Tax Matters Partner
(a) A Manager who is a Member shall be designated on the Fund's annual
Federal income tax return, and have full powers and responsibilities, as the Tax
Matters Partner of the Fund for purposes of Section 6231(a)(7) of the Code. In
the event that no Manager is a Member, a Member shall be so designated. Should
any Member be designated as the Tax Matters Partner for the Fund pursuant to
Section 6231(a)(7) of the Code, it shall, and each Member hereby does, to the
fullest extent permitted by law, delegate to a Manager selected by the Board of
Managers all of its rights, powers and authority to act as such Tax Matters
Partner and hereby constitutes and appoints such Manager as its true and lawful
attorney-in-fact, with power to act in its name and on its behalf, including the
power to act through such agents or attorneys as it shall elect or appoint, to
receive notices, to make, execute and deliver, swear to, acknowledge and file
any and all reports, responses and notices, and to do any and all things
required or advisable, in the Manager's judgment, to be done by such a Tax
Matters Partner. Any Member designated as the Tax Matters Partner for the Fund
under Section 6231(a)(7) of the Code shall be indemnified and held harmless by
the Fund from any and all liabilities and obligations that arise from or by
reason of such designation.
-25-
(b) Each person (for purposes of this Section 8.15, called a "Pass-Thru
Member") that holds or controls an interest as a Member on behalf of, or for the
benefit of, another person or persons, or which Pass-Thru Member is beneficially
owned (directly or indirectly) by another person or persons, shall, within 30
days following receipt from the Tax Matters Partner of any notice, demand,
request for information or similar document, convey such notice or other
document in writing to all holders of beneficial interests in the Fund holding
such interests through such Pass-Thru Member. In the event the Fund shall be the
subject of an income tax audit by any Federal, state or local authority, to the
extent the Fund is treated as an entity for purposes of such audit, including
administrative settlement and judicial review, the Tax Matters Partner shall be
authorized to act for, and its decision shall be final and binding upon, the
Fund and each Member thereof. All expenses incurred in connection with any such
audit, investigation, settlement or review shall be borne by the Fund.
8.16 Adjustment of Basis of Fund Property
In the event of a distribution of Fund property to a Member or an
assignment or other transfer (including by reason of death) of all or part of
the interest of a Member in the Fund, the Fund may be required, or, at the
request of a Member, the Board of Managers, in its discretion, may cause the
Fund, to elect, pursuant to Section 754 of the Code, or the corresponding
provision of subsequent law, to adjust the basis of the Fund property as
provided by Sections 734 and 743 of the Code.
-26-
EACH OF THE UNDERSIGNED ACKNOWLEDGES HAVING READ THIS AGREEMENT IN ITS
ENTIRETY BEFORE SIGNING, INCLUDING THE CONFIDENTIALITY CLAUSE SET FORTH IN
SECTION 8.11.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ORGANIZATIONAL MEMBER:
XXXXXXXXXX MANAGEMENT, LLC
By:
------------------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Member
MEMBERS:
Each person who shall sign
an investor application or
certification and who shall
be accepted by the Board of
Managers to the Fund as a
Member.
-27-
