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XANTHUS FUND, L.L.C.
(A DELAWARE LIMITED LIABILITY COMPANY)
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LIMITED LIABILITY COMPANY AGREEMENT
DATED AS OF _________, 1999
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CIBC OPPENHEIMER TOWER
ONE WORLD FINANCIAL CENTER, 31ST FLOOR
000 XXXXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
(000) 000-0000
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS........................................................1
ARTICLE II ORGANIZATION; ADMISSION OF MEMBERS...............................10
2.1 Formation of Limited Liability Company...............................10
2.2 Name.................................................................10
2.3 Principal and Registered Office......................................10
2.4 Duration.............................................................10
2.5 Objective and Business of the Company................................11
2.6 Board of Managers....................................................11
2.7 Members..............................................................12
2.8 Special Advisory Member..............................................12
2.9 Organizational Member................................................12
2.10 Both Managers and Members...........................................12
2.11 Limited Liability...................................................13
ARTICLE III MANAGEMENT......................................................13
3.1 Management and Control...............................................13
3.2 Actions by the Board of Managers.....................................14
3.3 Meetings of Members..................................................14
3.4 Custody of Assets of the Company.....................................15
3.5 Other Activities of Members and Managers.............................15
3.6 Duty of Care.........................................................15
3.7 Indemnification......................................................16
3.8 Fees, Expenses and Reimbursement.....................................18
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ARTICLE IV TERMINATION OF STATUS OF ADVISER AND MANAGERS,
TRANSFERS AND REPURCHASES........................................19
4.1 Termination of Status of the Adviser.................................19
4.2 Termination of Status of a Manager...................................20
4.3 Removal of the Managers..............................................20
4.4 Transfer of Interests of Members.....................................20
4.5 Transfer of Interests of Special Advisory Member.....................21
4.6 Repurchase of Interests..............................................21
ARTICLE V CAPITAL 23
5.1 Contributions to Capital.............................................23
5.2 Rights of Members to Capital.........................................24
5.3 Capital Accounts.....................................................24
5.4 Allocation of Net Profit and Loss....................................25
5.5 Allocation of Insurance Premiums and Proceeds........................25
5.6 Allocation of Certain Withholding Taxes and Other Expenditures.......25
5.7 Reserves.............................................................26
5.8 Incentive Allocation.................................................27
5.9 Allocation of Organizational Expenses................................27
5.10 Tax Allocations.....................................................28
5.11 Distributions.......................................................29
5.12 Foreign Withholding.................................................30
ARTICLE VI DISSOLUTION AND LIQUIDATION......................................30
6.1 Dissolution..........................................................30
6.2 Liquidation of Assets................................................31
ARTICLE VII ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS....................32
7.1 Accounting and Reports...............................................32
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7.2 Determinations by the Board of Managers..............................32
7.3 Valuation of Assets..................................................33
ARTICLE VIII MISCELLANEOUS PROVISIONS.......................................33
8.1 Amendment of Limited Liability Company Agreement.....................33
8.2 Special Power of Attorney............................................34
8.3 Notices..............................................................36
8.4 Agreement Binding Upon Successors and Assigns........................36
8.5 Applicability of 1940 Act and Form N-2...............................36
8.6 Choice of Law; Arbitration...........................................36
8.7 Not for Benefit of Creditors.........................................37
8.8 Consents.............................................................38
8.9 Merger and Consolidation.............................................38
8.10 Pronouns............................................................38
8.11 Confidentiality.....................................................38
8.12 Certification of Non-Foreign Status.................................39
8.13 Severability........................................................39
8.14 Filing of Returns...................................................39
8.15 Tax Matters Partner.................................................39
8.16 Section 754 Election................................................40
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XANTHUS FUND, L.L.C
LIMITED LIABILITY COMPANY AGREEMENT
THIS LIMITED LIABILITY COMPANY AGREEMENT of Xanthus Fund, L.L.C. (the
"Company") is dated as of ______, 1999 by and among Xxxxx X. Xxxxxxx, Xxxx
Xxxxxx and Xxxxxxx Xxxxxxxx as the Managers, CIBC Xxxxxxxxxxx Advisers, L.L.C.,
as the Special Advisory Member, Xxxxx X. Xxxxxxx as the Organizational Member,
and those persons hereinafter admitted as Members.
W I T N E S S E T H:
WHEREAS, the Company has heretofore been formed as a limited liability
company under the Delaware Limited Liability Company Act pursuant to an initial
Certificate of Formation (the "Certificate") dated and filed with the Secretary
of State of Delaware on January [7], 1999;
NOW, THEREFORE, for and in consideration of the foregoing and the mutual
covenants hereinafter set forth, it is hereby agreed as follows:
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ARTICLE I
DEFINITIONS
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For purposes of this Agreement:
ADMINISTRATOR The person who provides administrative services to
the Company pursuant to an administrative services
agreement.
ADVISER CIBC Xxxxxxxxxxx Advisers, L.L.C., a limited
liability company organized under Delaware law, or
any person who may hereinafter serve as the
investment adviser to the Company pursuant to an
Investment Advisory Agreement.
ADVISERS ACT The Investment Advisers Act of 1940 and the
rules, regulations and orders thereunder, as amended
from time to time, or any successor law.
AFFILIATE An affiliated person of a person as such term is
defined in the 1940 Act.
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AGREEMENT This Limited Liability Company Agreement, as amended
from time to time.
ALLOCATION CHANGE With respect to each Member for each Allocation
Period, the difference between:
(1) the sum of (a) the balance of such
Member's Capital Account as of the
close of the Allocation Period
(after giving effect to all
allocations to be made to such
Member's Capital Account as of such
date other than any Incentive
Allocation to be debited against
such Member's Capital Account),
plus (b) any debits to such
Member's Capital Account during the
Allocation Period to reflect any
actual or deemed distributions or
repurchases with respect to such
Member's Interest, plus (c) any
debits to such Member's Capital
Account during the Allocation
Period to reflect any Insurance
premiums allocable to such Member,
plus (d) any debits to such
Member's Capital Account during the
Allocation Period to reflect any
items allocable to such Member's
Capital Account pursuant to Section
5.6 hereof; and
(2) the sum of (a) the balance of such
Member's Capital Account as of the
commencement of the Allocation
Period, plus (b) any credits to
such Member's Capital Account
during the Allocation Period to
reflect any contributions by such
Member to the capital of the
Company, plus (c) any credits to
such Member's Capital Account
during the Allocation Period to
reflect any Insurance proceeds
allocable to such Member.
If the amount specified in clause (1)
exceeds the amount specified in clause (2),
such difference shall be a POSITIVE
ALLOCATION Change, and if the amount
specified in clause (2) exceeds the amount
specified in clause (1), such difference
shall be a NEGATIVE ALLOCATION CHANGE.
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ALLOCATION PERIOD With respect to each Member, the period commencing as
of the date of admission of such Member to the
Company, and thereafter each period commencing as of
the day following the last day of the preceding
Allocation Period with respect to such Member, and
ending at the close of business on the first to occur
of the following:
(1) the last day of a Fiscal Year;
(2) the day as of which the Company
repurchases the entire Interest of
such Member;
(3) the day as of which the Company
admits as a substituted Member a
person to whom the Interest of such
Member has been Transferred (unless
there is no change of beneficial
ownership); and
(4) the day as of which the Adviser's
status as the Special Advisory
Member is terminated pursuant to
Section 4.1 hereof.
BOARD OF MANAGERS The Board of Managers established pursuant to Section
2.6.
CAPITAL ACCOUNT With respect to each Member, the capital account
established and maintained on behalf of each Member
pursuant to Section 5.3 hereof.
CAPITAL PERCENTAGE A percentage established for each Member on the
Company's books as of each Expense Allocation Date.
The Capital Percentage of a Member on an Expense
Allocation Date shall be determined by dividing the
amount of capital contributed to the Company by the
Member pursuant to Section 5.1 hereof by the sum of
the capital contributed to the Company by each Member
pursuant to Section 5.1 hereof on or prior to such
Expense Allocation Date. The sum of the Capital
Percentages of all Members on each Expense Allocation
Date shall equal 100%.
CERTIFICATE The Certificate of Formation of the Company and any
amendments thereto as filed with the office of the
Secretary of State of Delaware.
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CIBC OPCO CIBC Xxxxxxxxxxx Corp., or any successor thereto.
CIBC OPCO SERVICES Such administrative services as CIBC
Opco shall provide to the Company pursuant to a
separate written agreement with the Company as
contemplated by Section 3.8(a) hereof.
CLOSING DATE The first date on or as of which a Member other
than the Organizational Member is admitted to the
Company.
CODE The United States Internal Revenue Code of 1986, as
amended and as hereafter amended from time to time,
or any successor law.
COMPANY The limited liability company governed hereby, as
such limited liability company may from time to time
be constituted.
DELAWARE ACT The Delaware Limited Liability Company Act as in
effect on the date hereof and as amended from time to
time, or any successor law.
EXPENSE ALLOCATION DATE The Closing Date, and thereafter each
day on or before December 1, 1999, as of which a
contribution to the capital of the Company is made
pursuant to Section 5.1 hereof.
FISCAL PERIOD The period commencing on the Closing Date, and
thereafter each period commencing on the day
immediately following the last day of the preceding
Fiscal Period, and ending at the close of business on
the first to occur of the following dates:
(1) the last day of a Fiscal Year;
(2) the day preceding any day as of
which a contribution to the capital
of the Company is made pursuant to
Section 5.1; or
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(3) any day (other than one specified
in clause (2) above) as of which
this Agreement provides for any
amount to be credited to or debited
against the Capital Account of any
Member, other than an amount to be
credited to or debited against the
Capital Accounts of all Members in
accordance with their respective
Investment Percentages.
FISCAL YEAR The period commencing on the Closing Date and ending
on December 31, 1999, and thereafter each period
commencing on January 1 of each year and ending on
December 31 of each year (or on the date of a final
distribution pursuant to Section 6.2 hereof), unless
the Board of Managers shall elect another fiscal year
for the Company that is a permissible taxable year
under the Code.
FORM N-2 The Company's Registration Statement on Form N-2
filed with the Securities and Exchange Commission, as
amended from time to time.
INCENTIVE ALLOCATION With respect to each Member, 20% of the amount,
determined as of the close of each Allocation Period
with respect to such Member, by which such Member's
Positive Allocation Change for such Allocation
Period, if any, exceeds any positive balance in such
Member's Loss Recovery Account as of the most recent
prior date as of which any adjustment has been made
thereto.
INDEPENDENT MANAGERS Those Managers who are not "interested persons" of
the Company as such term is defined in the 1940 Act.
INSURANCE One or more "key man" insurance policies on the life
of any principal of a member of the Adviser, the
benefits of which are payable to the Company.
INTEREST The entire ownership interest in the Company at any
particular time of a Member or the Special Advisory
Member, or other person to whom an Interest of a
Member or portion thereof has been transferred
pursuant to Section 4.4 hereof, including the rights
and obligations of such Member or other person under
this Agreement and the Delaware Act.
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INVESTMENT ADVISORY A separate written agreement
AGREEMENT entered into by the Company pursuant to which the
Adviser provides investment advisory services to the
Company.
INVESTMENT PERCENTAGE A percentage established for each Member on the
Company's books as of the first day of each Fiscal
Period. The Investment Percentage of a Member for a
Fiscal Period shall be determined by dividing the
balance of the Member's Capital Account as of the
commencement of such Fiscal Period by the sum of the
Capital Accounts of all of the Members as of the
commencement of such Fiscal Period. The sum of the
Investment Percentages of all Members for each Fiscal
Period shall equal 100%.
LOSS RECOVERY ACCOUNT A memorandum account to be recorded in the books and
records of the Company with respect to each Member,
which shall have an initial balance of zero and which
shall be adjusted as follows:
(1) As of the first day after the close
of each Allocation Period for such
Member, the balance of the Loss
Recovery Account shall be increased
by the amount, if any, of such
Member's Negative Allocation Change
for such Allocation Period and
shall be reduced (but not below
zero) by the amount, if any, of
such Member's Positive Allocation
Change for such Allocation Period.
(2) The balance of the Loss Recovery
Account shall be reduced (but not
below zero) as of the first date as
of which the Capital Account
balance of any Member is reduced as
a result of repurchase or transfer
with respect to such Member's
Interest by an amount determined by
multiplying (a) such positive
balance by (b) a fraction, (i) the
numerator of which is equal to the
amount of the repurchase or
transfer, and (ii) the denominator
of which is equal to the balance of
such Member's Capital Account
immediately before giving effect to
such repurchase or transfer.
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No transferee of any Interest shall succeed to any
Loss Recovery Account balance or portion thereof
attributable to the transferor unless the Transfer by
which such transferee received such Interest did not
involve a change of beneficial ownership.
MANAGER An individual designated as a manager of the Company
pursuant to the provisions of Section 2.6 of the
Agreement and who serves on the Board of Managers of
the Company.
MEMBER Any person who shall have been admitted to the
Company as a member (including any Manager in such
person's capacity as a member of the Company but
excluding any Manager in such person's capacity as a
Manager of the Company) until the Company repurchases
the entire Interest of such person as a member
pursuant to Section 4.6 hereof or a substituted
Member or Members are admitted with respect to any
such person's entire Interest as a member pursuant to
Section 4.4 hereof; such term includes the Adviser to
the extent the Adviser makes a capital contribution
to the Company and shall have been admitted to the
Company as a member, and shall not include the
Special Advisory Member.
NEGATIVE ALLOCATION CHANGE The meaning given such term in the definition of
Allocation Change.
NET ASSETS The total value of all assets of the Company, less an
amount equal to all accrued debts, liabilities and
obligations of the Company, calculated before giving
effect to any repurchases of Interests.
NET PROFIT OR NET LOSS The amount by which the Net Assets as of the close of
business on the last day of a Fiscal Period exceed
(in the case of Net Profit) or are less than (in the
case of Net Loss) the Net Assets as of the
commencement of the same Fiscal Period (or, with
respect to the initial Fiscal Period of the Company,
at the close of business on the Closing Date), such
amount to be adjusted to exclude:
(1) the amount of any Insurance
premiums or proceeds to be
allocated among the Capital
Accounts of the Members pursuant to
Section 5.5 hereof;
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(2) any items to be allocated among the
Capital Accounts of the Members on
a basis which is not in accordance
with the respective Investment
Percentages of all Members as of
the commencement of such Fiscal
Period pursuant to Sections 5.6 and
5.7 hereof; and
(3) Organizational Expenses allocated
among the Capital Accounts of the
Members pursuant to Section 5.9
hereof.
1940 ACT The Investment Company Act of 1940 and the rules,
regulations and orders thereunder, as amended from
time to time, or any successor law.
1934 ACT The Securities Exchange Act of 1934 and the rules,
regulations and orders thereunder, as amended from
time to time, or any successor law.
ORGANIZATIONAL EXPENSES The expenses incurred by the Company in connection
with its formation, its initial registration as an
investment company under the 1940 Act, and the
initial offering of Interests.
ORGANIZATIONAL MEMBER Xxxxx X. Xxxxxxx
POSITIVE ALLOCATION CHANGE The meaning given such term in the definition of
Allocation Change.
SECURITIES Securities (including, without limitation, equities,
debt obligations, options, and other "securities" as
that term is defined in Section 2(a)(36) of the 0000
Xxx) and any contracts for forward or future delivery
of any security, debt obligation or currency, or
commodity, all manner of derivative instruments and
any contracts based on any index or group of
securities, debt obligations or currencies, or
commodities, and any options thereon.
SPECIAL ADVISORY ACCOUNT A capital account established and maintained on
behalf of the Special Advisory Member pursuant to
Section 5.3 hereof solely for the purpose of
receiving the Incentive Allocation.
SPECIAL ADVISORY MEMBER The Adviser in its capacity as the investment
adviser to the Company.
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TRANSFER The assignment, transfer, sale, encumbrance, pledge
or other disposition of all or any portion of an
Interest, including any right to receive any
allocations and distributions attributable to an
Interest.
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ARTICLE II
ORGANIZATION; ADMISSION OF MEMBERS
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2.1 FORMATION OF LIMITED LIABILITY COMPANY.
The Board of Managers shall execute and file in accordance
with the Delaware Act any amendment to the Certificate and shall execute and
file with applicable governmental authorities any other instruments, documents
and certificates which, in the opinion of the Company's legal counsel, may from
time to time be required by the laws of the United States of America, the State
of Delaware or any other jurisdiction in which the Company shall determine to do
business, or any political subdivision or agency thereof, or which such legal
counsel may deem necessary or appropriate to effectuate, implement and continue
the valid existence and business of the Company.
2.2 NAME.
The name of the Company shall be "Xanthus Fund, L.L.C." or
such other name as the Board of Managers may hereafter adopt upon (i) causing an
appropriate amendment to the Certificate to be filed in accordance with the
Delaware Act and (ii) sending notice thereof to each Member.
2.3 PRINCIPAL AND REGISTERED OFFICE.
The Company shall have its principal office at CIBC
Oppenheimer Tower, One World Financial Center, 31st Floor, 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or at such other place designated from time to time by
the Board of Managers.
The Company shall have its registered office in Delaware at
0000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, and shall have Corporation
Service Company as its registered agent for service of process in Delaware,
unless a different registered office or agent is designated from time to time by
the Board of Managers.
2.4 DURATION.
The term of the Company commenced on the filing of the
Certificate with the Secretary of State of Delaware and shall continue until the
Company is dissolved pursuant to Section 6.1 hereof.
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2.5 OBJECTIVE AND BUSINESS OF THE COMPANY.
(a) The objective and business of the Company is to purchase,
sell (including short sales), invest and trade in Securities, on margin or
otherwise, and to engage in any financial or derivative transactions relating
thereto or otherwise. The Company may execute, deliver and perform all
contracts, agreements and other undertakings and engage in all activities and
transactions as may in the opinion of the Board of Managers be necessary or
advisable to carry out its objective or business.
(b) The Company shall operate as a closed-end,
non-diversified, management investment company in accordance with the 1940 Act
and subject to any fundamental policies and investment restrictions set forth in
the Form N-2.
2.6 BOARD OF MANAGERS.
(a) Prior to the Closing Date, the Organizational Member may
designate such persons who shall agree to be bound by all of the terms of this
Agreement to serve as the initial Managers on the Board of Managers, subject to
the election of such persons prior to the Closing Date by the Organizational
Member. By signing this Agreement or the signature page of the Company's
subscription agreement, a Member admitted on the Closing Date shall be deemed to
have voted for the election of each of the initial Managers to the Board of
Managers. After the Closing Date, the Board of Managers may, subject to the
provisions of paragraphs (a) and (b) of this Section 2.6 with respect to the
number of and vacancies in the position of Manager of and the provisions of
Section 3.3 hereof with respect to the election of Managers to the Board of
Managers by Members, designate any person who shall agree to be bound by all of
the terms of this Agreement as a Manager. The names and mailing addresses of the
Managers shall be set forth in the books and records of the Company. The number
of Managers shall be fixed from time to time by the Board of Managers but, at
the Closing Date, shall not be less than three. At and after the Closing Date,
all of the Managers shall be Independent Managers.
(b) Each Manager shall serve on the Board of Managers for the
duration of the term of the Company, unless his status as a Manager shall be
sooner terminated pursuant to Section 4.2 hereof. In the event of any vacancy in
the position of Manager, the remaining Managers may appoint an individual to
serve in such capacity, so long as immediately after such appointment at least
two-thirds (2/3) of the Managers then serving would have been elected by the
Members. The Board of Managers may call a meeting of Members to fill any vacancy
in the position of member of Manager, and shall do so within 60 days after any
date on which Managers who were elected by the Members cease to constitute a
majority of the Managers then serving on the Board of Managers.
(c) In the event that no Manager remains to continue the
business of the Company, the Adviser shall promptly call a meeting of the
Members, to be held within 60 days after the date on which the last Manager
ceased to act in that capacity, for the purpose of determining whether to
continue the business of the Company and, if the business shall be continued, of
electing the required number of Managers to the Board of Managers. If the
Members shall determine at such meeting not to continue the business of the
Company or if the required number of Managers is not elected within 60 days
after the date on which the last Manager ceased
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to act in that capacity, then the Company shall be dissolved pursuant to Section
6.1 hereof and the assets of the Company shall be liquidated and distributed
pursuant to Section 6.2 hereof.
2.7 MEMBERS.
For the first nine months from the Closing Date, the Board of
Managers may admit one or more Members as of the beginning of each calendar
month. Thereafter, the Board of Managers may admit one or more Members as of the
beginning of each calendar quarter, provided, however, that after the Board of
Managers has received notice from the Adviser that the Adviser does not control
the Company for purposes of the Bank Holding Company Act of 1956, as amended,
the Board of Managers may admit one or more Members as of the beginning of each
calendar month or at such other times, but not more frequently than monthly, as
the Board of Managers may determine. Subject to the foregoing terms, Members may
be admitted to the Company subject to the condition that each such Member shall
execute an appropriate signature page of this Agreement or of the Company's
subscription agreement pursuant to which such Member agrees to be bound by all
the terms and provisions hereof. The Board of Managers may in its absolute
discretion reject subscriptions for member Interests in the Company. The
admission of any person as a Member shall be effective upon the revision of the
books and records of the Company to reflect the name and the contribution to the
capital of the Company of such additional Member.
2.8 SPECIAL ADVISORY MEMBER.
Upon signing this Agreement, the Adviser shall be admitted to
the Company as the Special Advisory Member, subject to due approval, in
accordance with the requirements of the 1940 Act, of the Investment Advisory
Agreement. The Interest of the Special Advisory Member shall be non-voting. If
at anytime the Investment Advisory Agreement between the Company and the person
then serving as Adviser terminates, the Board of Managers shall admit as a
substitute Special Advisory Member, upon its signing this Agreement, such person
as may be retained by the Company to provide investment advisory services
pursuant to an Investment Advisory Agreement, subject to the due approval of
such Investment Advisory Agreement in accordance with the requirements of the
1940 Act.
2.9 ORGANIZATIONAL MEMBER.
Upon the admission of any Member, the Organizational Member
shall withdraw from the Company as the Organizational Member and shall be
entitled to the return of his Capital Contribution, if any, without interest or
deduction.
2.10 BOTH MANAGERS AND MEMBERS.
A Member may at the same time be a Manager and a Member, or a
Special Advisory Member and Member, in which event such Member's rights and
obligations in each capacity shall be determined separately in accordance with
the terms and provisions hereof or as provided in the Delaware Act.
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2.11 LIMITED LIABILITY.
Except as provided under applicable law, a Member and the
Special Advisory Member shall not be liable for the Company's debts, obligations
and liabilities in any amount in excess of the capital account balance of such
Member, plus such Member's share of undistributed profits and assets. Except as
provided under applicable law, a Manager shall not be liable for Company's
debts, obligations and liabilities.
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ARTICLE III
MANAGEMENT
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3.1 MANAGEMENT AND CONTROL.
(a) Management and control of the business of the Company
shall be vested in the Board of Managers, which shall have the right, power and
authority, on behalf of the Company and in its name, to exercise all rights,
powers and authority of Managers under the Delaware Act and to do all things
necessary and proper to carry out the objective and business of the Company and
their duties hereunder. No Manager shall have the authority individually to act
on behalf of or to bind the Company except within the scope of such Manager's
authority as delegated by the Board of Managers. The parties hereto intend that,
except to the extent otherwise expressly provided herein, (i) each Manager shall
be vested with the same powers, authority and responsibilities on behalf of the
Company as are customarily vested in each director of a Delaware corporation and
(ii) each Independent Manager shall be vested with the same powers, authority
and responsibilities on behalf of the Company as are customarily vested in each
director of a closed-end management investment company registered under the 1940
Act that is organized as a Delaware corporation who is not an "interested
person" of such company as such term is defined in the 1940 Act. During any
period in which the Company shall have no Managers, the Adviser shall continue
to serve as the Adviser to the Company. During such time period, CIBC Opco shall
continue to provide the CIBC Opco Services to the Company.
(b) Each Member agrees not to treat, on his personal income
tax return or in any claim for a tax refund, any item of income, gain, loss,
deduction or credit in a manner inconsistent with the treatment of such item by
the Company. The Board of Managers shall have the exclusive authority and
discretion to make any elections required or permitted to be made by the Company
under any provisions of the Code or any other revenue laws.
(c) Members shall have no right to participate in and shall
take no part in the management or control of the Company's business and shall
have no right, power or authority to act for or bind the Company. Members shall
have the right to vote on any matters only as provided in this Agreement or on
any matters that require the approval of the holders of voting securities under
the 1940 Act or as otherwise required in the Delaware Act.
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(d) The Board of Managers may delegate to any other person any
rights, power and authority vested by this Agreement in the Board of Managers to
the extent permissible under applicable law.
3.2 ACTIONS BY THE BOARD OF MANAGERS.
(a) Unless provided otherwise in this Agreement, the Board of
Managers shall act only: (i) by the affirmative vote of a majority of the
Managers (which majority shall include any requisite number of Independent
Managers required by the 0000 Xxx) present at a meeting duly called at which a
quorum of the Managers shall be present (in person or, if in person attendance
is not required by the 1940 Act, by telephone) or (ii) by unanimous written
consent of all of the Managers without a meeting, if permissible under the 0000
Xxx.
(b) The Board of Managers may designate from time to time a
Principal Manager who shall preside at all meetings. Meetings of the Board of
Managers may be called by the Principal Manager or by any two Managers, and may
be held on such date and at such time and place as the Board of Managers shall
determine. Each Manager shall be entitled to receive written notice of the date,
time and place of such meeting within a reasonable time in advance of the
meeting. Notice need not be given to any Manager who shall attend a meeting
without objecting to the lack of notice or who shall execute a written waiver of
notice with respect to the meeting. Managers may attend and participate in any
meeting by telephone except where in person attendance at a meeting is required
by the 1940 Act. A majority of the Managers shall constitute a quorum at any
meeting.
3.3 MEETINGS OF MEMBERS.
(a) Actions requiring the vote of the Members may be taken at
any duly constituted meeting of the Members at which a quorum is present.
Meetings of the Members may be called by the Board of Managers or by Members
holding 25% or more of the total number of votes eligible to be cast by all
Members, and may be held at such time, date and place as the Board of Managers
shall determine. The Board of Managers shall arrange to provide written notice
of the meeting, stating the date, time and place of the meeting and the record
date therefor, to each Member entitled to vote at the meeting within a
reasonable time prior thereto. Failure to receive notice of a meeting on the
part of any Member shall not affect the validity of any act or proceeding of the
meeting, so long as a quorum shall be present at the meeting, except as
otherwise required by applicable law. Only matters set forth in the notice of a
meeting may be voted on by the Members at a meeting. The presence in person or
by proxy of Members holding a majority of the total number of votes eligible to
be cast by all Members as of the record date shall constitute a quorum at any
meeting. In the absence of a quorum, a meeting of the Members may be adjourned
by action of a majority of the Members present in person or by proxy without
additional notice to the Members. Except as otherwise required by any provision
of this Agreement or of the 1940 Act, (i) those candidates receiving a plurality
of the votes cast at any meeting of Members shall be elected as Managers and
(ii) all other actions of the Members taken at a meeting shall require the
affirmative vote of Members holding a majority of the total number of votes
eligible to be cast by those Members who are present in person or by proxy at
such meeting.
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(b) Each Member shall be entitled to cast at any meeting of
Members a number of votes equivalent to such Member's Investment Percentage as
of the record date for such meeting. The Board of Managers shall establish a
record date not less than 10 nor more than 60 days prior to the date of any
meeting of Members to determine eligibility to vote at such meeting and the
number of votes which each Member will be entitled to cast thereat, and shall
maintain for each such record date a list setting forth the name of each Member
and the number of votes that each Member will be entitled to cast at the
meeting.
(c) A Member may vote at any meeting of Members by a proxy
properly executed in writing by the Member and filed with the Company before or
at the time of the meeting. A proxy may be suspended or revoked, as the case may
be, by the Member executing the proxy by a later writing delivered to the
Company at any time prior to exercise of the proxy or if the Member executing
the proxy shall be present at the meeting and decide to vote in person. Any
action of the Members that is permitted to be taken at a meeting of the Members
may be taken without a meeting if consents in writing, setting forth the action
taken, are signed by Members holding a majority of the total number of votes
eligible to be cast or such greater percentage as may be required in order to
approve such action.
3.4 CUSTODY OF ASSETS OF THE COMPANY.
The physical possession of all funds, Securities or other
properties of the Company shall at all times, be held, controlled and
administered by one or more custodians retained by the Company in accordance
with the requirements of the 1940 Act and the rules thereunder.
3.5 OTHER ACTIVITIES OF MEMBERS AND MANAGERS.
(a) The Managers shall not be required to devote full time to
the affairs of the Company, but shall devote such time as may reasonably be
required to perform their obligations under this Agreement.
(b) Any Member or Manager, and any Affiliate of any Member or
Manager, may engage in or possess an interest in other business ventures or
commercial dealings of every kind and description, independently or with others,
including, but not limited to, acquisition and disposition of Securities,
provision of investment advisory or brokerage services, serving as directors,
officers, employees, advisors or agents of other companies, partners of any
partnership, members of any limited liability company, or trustees of any trust,
or entering into any other commercial arrangements. No Member shall have any
rights in or to such activities of any other Member or Manager, or any profits
derived therefrom.
3.6 DUTY OF CARE.
(a) A Manager shall not be liable to the Company or to any of
its Members for any loss or damage occasioned by any act or omission in the
performance of his services under this Agreement, unless it shall be determined
by final judicial decision on the merits from which there is no further right to
appeal that such loss is due to an act or omission of such Manager constituting
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willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Manager's office.
(b) Members not in breach of any obligation hereunder or under
any agreement pursuant to which the Member subscribed for an Interest shall be
liable to the Company, any Member or third parties only as provided under the
Delaware Act.
3.7 INDEMNIFICATION.
(a) To the fullest extent permitted by law, the Company shall,
subject to Section 3.7(b) hereof, indemnify each Manager (including for this
purpose their executors, heirs, assigns, successors or other legal
representatives), against all losses, claims, damages, liabilities, costs and
expenses, including, but not limited to, amounts paid in satisfaction of
judgments, in compromise, or as fines or penalties, and reasonable counsel fees,
incurred in connection with the defense or disposition of any action, suit,
investigation or other proceeding, whether civil or criminal, before any
judicial, arbitral, administrative or legislative body, in which such indemnitee
may be or may have been involved as a party or otherwise, or with which such
indemnitee may be or may have been threatened, while in office or thereafter, by
reason of being or having been a Manager of the Company or the past or present
performance of services to the Company by such indemnitee, except to the extent
such loss, claim, damage, liability, cost or expense shall have been finally
determined in a decision on the merits in any such action, suit, investigation
or other proceeding to have been incurred or suffered by such indemnitee by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of such indemnitee's office. The
rights of indemnification provided under this Section 3.7 shall not be construed
so as to provide for indemnification of a Manager for any liability (including
liability under federal securities laws which, under certain circumstances,
impose liability even on persons that act in good faith) to the extent (but only
to the extent) that such indemnification would be in violation of applicable
law, but shall be construed so as to effectuate the applicable provisions of
this Section 3.7 to the fullest extent permitted by law.
(b) Expenses, including reasonable counsel fees, so incurred
by any such indemnitee (but excluding amounts paid in satisfaction of judgments,
in compromise, or as fines or penalties), may be paid from time to time by the
Company in advance of the final disposition of any such action, suit,
investigation or proceeding upon receipt of an undertaking by or on behalf of
such indemnitee to repay to the Company amounts so paid if it shall ultimately
be determined that indemnification of such expenses is not authorized under
Section 3.7(a) hereof; provided, however, that (i) such indemnitee shall provide
security for such undertaking, (ii) the Company shall be insured by or on behalf
of such indemnitee against losses arising by reason of such indemnitee's failure
to fulfill his or its undertaking, or (iii) a majority of the Managers
(excluding any Manager who is either seeking advancement of expenses hereunder
or is or has been a party to any other action, suit, investigation or proceeding
involving claims similar to those involved in the action, suit, investigation or
proceeding giving rise to a claim for advancement of expenses hereunder) or
independent legal counsel in a written opinion shall determine based on a review
of readily available facts (as opposed to a full trial-type inquiry) that there
is reason to believe such indemnitee ultimately will be entitled to
indemnification.
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(c) As to the disposition of any action, suit, investigation
or proceeding (whether by a compromise payment, pursuant to a consent decree or
otherwise) without an adjudication or a decision on the merits by a court, or by
any other body before which the proceeding shall have been brought, that an
indemnitee is liable to the Company or its Members by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such indemnitee's office, indemnification shall be
provided pursuant to Section 3.7(a) hereof if (i) approved as in the best
interests of the Company by a majority of the Managers (excluding any Manager
who is either seeking indemnification hereunder or is or has been a party to any
other action, suit, investigation or proceeding involving claims similar to
those involved in the action, suit, investigation or proceeding giving rise to a
claim for indemnification hereunder) upon a determination based upon a review of
readily available facts (as opposed to a full trial-type inquiry) that such
indemnitee acted in good faith and in the reasonable belief that such actions
were in the best interests of the Company and that such indemnitee is not liable
to the Company or its Members by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of such
indemnitee's office, or (ii) the Board of Managers secures a written opinion of
independent legal counsel based upon a review of readily available facts (as
opposed to a full trial-type inquiry) to the effect that such indemnification
would not protect such indemnitee against any liability to the Company or its
Members to which such indemnitee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of such indemnitee's office.
(d) Any indemnification or advancement of expenses made
pursuant to this Section 3.7 shall not prevent the recovery from any indemnitee
of any such amount if such indemnitee subsequently shall be determined in a
decision on the merits in any action, suit, investigation or proceeding
involving the liability or expense that gave rise to such indemnification or
advancement of expenses to be liable to the Company or its Members by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of such indemnitee's office. In (i) any suit
brought by a Manager (or other person entitled to indemnification hereunder) to
enforce a right to indemnification under this Section 3.7 it shall be a defense
that, and (ii) in any suit in the name of the Company to recover any
indemnification or advancement of expenses made pursuant to this Section 3.7 the
Company shall be entitled to recover such expenses upon a final adjudication
that, the Manager or other person claiming a right to indemnification under this
Section 3.7 has not met the applicable standard of conduct set forth in this
Section 3.7. In any such suit brought to enforce a right to indemnification or
to recover any indemnification or advancement of expenses made pursuant to this
Section 3.7, the burden of proving that the Manager or other person claiming a
right to indemnification is not entitled to be indemnified, or to any
indemnification or advancement of expenses, under this Section 3.7 shall be on
the Company (or any Member acting derivatively or otherwise on behalf of the
Company or its Members).
(e) An indemnitee may not satisfy any right of indemnification
or advancement of expenses granted in this Section 3.7 or to which he or it may
otherwise be entitled except out of the assets of the Company, and no Member
shall be personally liable with respect to any such claim for indemnification or
advancement of expenses.
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(f) The rights of indemnification provided hereunder shall not
be exclusive of or affect any other rights to which any person may be entitled
by contract or otherwise under law. Nothing contained in this Section 3.7 shall
affect the power of the Company to purchase and maintain liability insurance on
behalf of any Manager or other person.
3.8 FEES, EXPENSES AND REIMBURSEMENT.
(a) So long as CIBC Opco provides CIBC Opco Services to the
Company, it shall be entitled to receive fees for such services as may be agreed
to by CIBC Opco and the Company pursuant to a separate written agreement.
(b) The Board of Managers may cause the Company to compensate
each Manager for his services as such. In addition, the Managers shall be
reimbursed by the Company for reasonable out-of-pocket expenses incurred by them
in performing their duties under this Agreement.
(c) The Company shall bear all expenses incurred in the
business of the Company other than those specifically required to be borne by
the Adviser pursuant to the Investment Advisory Agreement or by CIBC Opco
pursuant to the agreement referred to in Section 3.8(a) hereof. Expenses to be
borne by the Company include, but are not limited to, the following:
(1) all costs and expenses related to portfolio
transactions and positions for the Company's
account, including, but not limited to,
brokerage commissions, research fees,
interest and commitment fees on loans and
debit balances, borrowing charges on
Securities sold short, dividends on
Securities sold short but not yet purchased,
custodial fees, margin fees, transfer taxes
and premiums, taxes withheld on foreign
dividends and indirect expenses from
investments in investment funds;
(2) all costs and expenses associated with the
organization and registration of the
Company, certain offering costs and the
costs of compliance with any applicable
federal or state laws;
(3) Attorneys' fees and disbursements associated
with updating the Company's Confidential
Memorandum and subscription documents (the
"Offering Materials"); the costs of printing
the Offering Materials; the costs of
distributing the Offering Materials to
prospective investors; and attorneys' fees
and disbursements associated with the review
of subscription documents executed and
delivered to the Company in connection with
offerings of interests in the Company;
(4) the costs and expenses of holding meetings
of the Board of Managers and any meetings of
Members;
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(5) fees and disbursements of any attorneys,
accountants, auditors and other consultants
and professionals engaged on behalf of the
Company;
(6) the costs of a fidelity bond and any
liability insurance obtained on behalf of
the Company or its Managers;
(7) any fees payable to CIBC Opco for CIBC Opco
Services and the fees of custodians and
persons providing administrative services to
the Company;
(8) all expenses of computing the Company's net
asset value, including any equipment or
services obtained for such purposes;
(9) all charges for equipment or services used
in communicating information regarding the
Company's transactions among the Adviser and
any custodian or other agent engaged by the
Company; and
(10) such other types of expenses as may be
approved from time to time by the Board of
Managers, other than those required to be
borne by the Adviser or CIBC Opco.
The Adviser shall be entitled to reimbursement from the Company for any of the
above expenses that it pays on behalf of the Company.
(d) Subject to procuring any required regulatory
approvals, from time to time the Company may, alone or in conjunction with other
accounts for which the Adviser, or any Affiliate of the Adviser, acts as general
partner or investment adviser, purchase Insurance in such amounts, from such
insurers and on such terms as the Board of Managers shall determine.
---------------------------------
ARTICLE IV
TERMINATION OF STATUS OF ADVISER
AND MANAGERS, TRANSFERS AND REPURCHASES
---------------------------------
4.1 TERMINATION OF STATUS OF THE ADVISER.
The status of the Adviser as the Special Advisory Member shall
terminate if the Investment Advisory Agreement with the Adviser terminates and
the Company does not enter into a new Investment Advisory Agreement with the
Adviser, effective as of the date of such termination.
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4.2 TERMINATION OF STATUS OF A MANAGER.
The status of a Manager shall terminate if the Manager (i)
shall die; (ii) shall be adjudicated incompetent; (iii) shall voluntarily
withdraw as a Manager (upon not less than 90 days' prior written notice to the
other Managers); (iv) shall be removed; (v) shall be certified by a physician to
be mentally or physically unable to perform his duties hereunder; (vi) shall be
declared bankrupt by a court with appropriate jurisdiction, file a petition
commencing a voluntary case under any bankruptcy law or make an assignment for
the benefit of creditors; (vii) shall have a receiver appointed to administer
the property or affairs of such Manager; or (viii) shall otherwise cease to be a
Manager of the Company under the Delaware Act.
4.3 REMOVAL OF THE MANAGERS.
Any Manager may be removed either by (a) the vote or written
consent of at least two-thirds (2/3) of the Managers not subject to the removal
vote or (b) the vote or written consent of Members holding not less than
two-thirds (2/3) of the total number of votes eligible to be cast by all
Members.
4.4 TRANSFER OF INTERESTS OF MEMBERS.
(a) An Interest of a Member may be Transferred only (i) by
operation of law pursuant to the death, bankruptcy, insolvency or dissolution of
such Member or (ii) with the written consent of the Board of Managers (which may
be withheld in its sole and absolute discretion); provided, however, that the
Board of Managers may not consent to any Transfer other than a Transfer (i) in
which the tax basis of the interest in the hands of the transferee is
determined, in whole or in part, by reference to its tax basis in the hands of
the transferor (e.g., certain Transfers to affiliates, gifts and contributions
to family partnerships), (ii) to members of the Member's immediate family
(brothers, sisters, spouse, parents and children), or (iii) a distribution from
a qualified retirement plan or an individual retirement account, unless it
consults with counsel to the Company and counsel to the Company confirms that
such Transfer will not cause the Company to be treated as a "publicly traded
partnership" taxable as a corporation.
(b) The Board of Managers may not consent to a Transfer of an
Interest or a portion thereof of a Member unless: (i) the person to whom such
Interest is Transferred (or each of such person's beneficial owners if such a
person is a "private investment company" as defined in paragraph (d)(3) of Rule
205-3 under the Advisers Act) is a person whom the Board of Managers believe
meets the requirements of paragraph (d)(1) of Rule 205-3 under the Advisers Act
or successor rule thereto; (ii) the entire Interest of the Member is Transferred
to a single transferee; and (iii) after the Transfer, the balance of the Capital
Account of the Transferee is not less than $150,000. Any transferee which
acquires an Interest by operation of law as the result of the death, bankruptcy,
insolvency or dissolution of a Member or otherwise, shall be entitled to the
allocations and distributions allocable to the Interest so acquired and to
Transfer such Interest in accordance with the terms of this Agreement, but shall
not be entitled to the other rights of a Member unless and until such transferee
becomes a substituted Member. If a Member transfers an Interest with the
approval of the Board of Managers, the Board of Managers shall promptly take all
necessary actions so that the transferee to whom such Interest is transferred is
admitted to the Company as a
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Member. Each Member effecting a Transfer and its transferee agree to pay all
expenses, including attorneys' and accountants' fees, incurred by the Company in
connection with such Transfer.
(c) Each Member shall indemnify and hold harmless the Company,
the Managers, the Adviser, each other Member and any Affiliate of the foregoing
against all losses, claims, damages, liabilities, costs and expenses (including
legal or other expenses incurred in investigating or defending against any such
losses, claims, damages, liabilities, costs and expenses or any judgments, fines
and amounts paid in settlement), joint or several, to which such persons may
become subject by reason of or arising from (i) any Transfer made by such Member
in violation of this Section 4.4 and (ii) any misrepresentation by such Member
in connection with any such Transfer.
4.5 TRANSFER OF INTERESTS OF SPECIAL ADVISORY MEMBER.
The Adviser may not Transfer its Interest as the Special
Advisory Member.
4.6 REPURCHASE OF INTERESTS.
(a) Except as otherwise provided in this Agreement, no Member
or other person holding an Interest or portion thereof shall have the right to
withdraw or tender to the Company for repurchase that Interest or portion
thereof. The Board of Managers may from time to time, in its complete and
exclusive discretion and on such terms and conditions as it may determine, cause
the Company to repurchase Interests or portions thereof pursuant to written
tenders. However, the Company shall not offer to repurchase Interests on more
than two occasions during any one Fiscal Year unless it has received an opinion
of counsel to the effect that such more frequent offers would not cause any
adverse tax consequences to the Company or the Members. In determining whether
to cause the Company to repurchase Interests or portions thereof pursuant to
written tenders, the Board of Managers shall consider the recommendation of the
Adviser, and shall also consider the following factors, among others:
(1) whether any Members have requested to tender
Interests or portions thereof to the
Company;
(2) the liquidity of the Company's assets;
(3) the investment plans and working capital
requirements of the Company;
(4) the relative economies of scale with respect
to the size of the Company;
(5) the history of the Company in repurchasing
Interests or portions thereof;
(6) the economic condition of the securities
markets; and
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(7) the anticipated tax consequences of any
proposed repurchases of Interests or
portions thereof.
The Board of Managers shall cause the Company to repurchase Interests or
portions thereof pursuant to written tenders only on terms fair to the Company
and to all Members or one or more classes of Members (including persons holding
Interests acquired from Members), as applicable.
(b) A Member who tenders for repurchase only a portion of such
Member's Interest shall be required to maintain a Capital Account balance equal
to the greater of (i) $150,000, net of the Incentive Allocation, if any, that
would be debited against such Capital Account if the date of repurchase of such
Interest or portion thereof were a date on which an Incentive Allocation would
otherwise be made (the "Tentative Incentive Allocation") or (ii) the amount of
the Tentative Incentive Allocation.
(c) The Adviser may tender its Interest or a portion thereof
as a Member or Special Advisory Member of the Company under Section 4.6(a)
hereof.
(d) If the Adviser's status as Special Advisory Member is
terminated pursuant to Section 4.1 hereof, it (or its trustee or other legal
representative) may, by written notice to the Board of Managers within 60 days
of the effective date of such termination, tender to the Company for repurchase
all or any portion of its Special Advisory Account. Not later than thirty (30)
days after the receipt of such notice, the Board of Managers shall cause such
tendered portion of the Special Advisory Account to be repurchased by the
Company for cash.
(e) The Board of Managers may cause the Company to repurchase
an Interest or portion thereof of a Member or any person acquiring an Interest
or portion thereof from or through a Member in the event that the Board of
Managers determines or has reason to believe that:
(1) such an Interest or portion thereof has been
transferred in violation of Section 4.4
hereof, or such an Interest or portion
thereof has vested in any person by
operation of law as the result of the death,
dissolution, bankruptcy or incompetency of a
Member;
(2) ownership of such an Interest by a Member or
other person will cause the Company to be in
violation of, or require registration of any
Interest or portion thereof under, or
subject the Company to additional
registration or regulation under, the
securities laws of the United States or any
other relevant jurisdiction;
(3) continued ownership of such an Interest may
be harmful or injurious to the business or
reputation of the Company, the Managers or
the Adviser, or may subject the Company or
any of the Members to an undue risk of
adverse tax or other fiscal consequences;
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(4) any of the representations and warranties
made by a Member in connection with the
acquisition of an Interest or portion
thereof was not true when made or has ceased
to be true; or
(5) it would be in the best interests of the
Company, as determined by the Board of
Managers in their absolute discretion, for
the Company to repurchase such an Interest
or portion thereof.
(f) Repurchases of Interests or portions thereof by the
Company shall be payable promptly after the expiration date of such repurchase
in accordance with the terms of the Company's repurchase offer. Payment of the
purchase price shall consist of: (i) cash in an aggregate amount equal to such
percentage, as may be determined by the Board of Managers, of the estimated
unaudited net asset value of Interests repurchased by the Company determined as
of the expiration date of such repurchase (the "Cash Payment"); and, if
determined to be necessary or appropriate by the Board of Managers, (ii) a
promissory note entitling the holder thereof to a contingent payment equal to
the excess, of any, of (x) the net asset value of the Interests repurchased by
the Company as of the expiration date of such repurchases, determined based on
the audited financial statements of the Company for the Fiscal Year in which
such repurchases were effective, over (y) the Cash Payment. Notwithstanding
anything in the foregoing to the contrary, the Board of Managers, in its
discretion, may pay any portion of the purchase 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.
All such repurchases shall be subject to any and all conditions as the Board of
Managers may impose in its sole discretion. The amount due to any Member whose
Interest or portion thereof is repurchased shall be equal to the value of such
Member's Capital Account or portion thereof as applicable as of the effective
date of repurchase, after giving effect to all allocations to be made to such
Member's Capital Account as of such date.
ARTICLE V
CAPITAL
5.1 CONTRIBUTIONS TO CAPITAL.
(a) The minimum initial contribution of each Member to the
capital of the Company shall be such amount as the Board of Managers, in its
discretion, may determine from time to time, but in no event shall be less than
$150,000; provided, however, that the minimum initial contribution of each
Member that is a director, officer or employee of CIBC Opco or its affiliates
may be as determined by the Board of Managers from time to time. The amount of
the initial contribution of each Member shall be recorded on the books and
records of the Company upon acceptance as a contribution to the capital of the
Company. The Managers shall not be entitled to make voluntary contributions of
capital to the Company as Managers of the Company,
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but may make voluntary contributions to the capital of the Company as Members.
The Adviser may make voluntary contributions to the capital of the Company as a
Member.
(b) The Members and the Adviser, as a Member, may make
additional contributions to the capital of the Company of at least $25,000,
effective as of such times as the Board of Managers in its discretion may
permit, subject to Section 2.7 hereof, but no Member shall be obligated to make
any additional contribution to the capital of the Company except to the extent
provided in Section 5.7 hereof.
(c) Except as otherwise permitted by the Board of Managers,
(i) initial and any additional contributions to the capital of the Company by
any Member shall be payable in cash or in such Securities that the Board of
Managers, in its absolute discretion, may agree to accept on behalf of the
Company, and (ii) initial and any additional contributions in cash shall be
payable in readily available funds at the date of the proposed acceptance of the
contribution. The Company shall charge each Member making a contribution in
Securities to the capital of the Company such amount as may be determined by the
Board of Managers not exceeding 2% of the value of such contribution in order to
reimburse the Company for any costs incurred by the Company by reason of
accepting such Securities, and any such charge shall be due and payable by the
contributing Member in full at the time the contribution to the capital of the
Company to which such charges relate is due. The value of contributed Securities
shall be determined in accordance with Section 7.3 hereof as of the date of
contribution.
(d) The minimum initial and additional contributions set forth
in (a) and (b) of this Section 5.1 may be reduced by the Board of Managers.
5.2 RIGHTS OF MEMBERS TO CAPITAL.
No Member shall be entitled to interest on his contribution to
the capital of the Company, nor shall any Member be entitled to the return of
any capital of the Company except (i) upon the repurchase by the Company of a
part or all of such Member's Interest pursuant to Section 4.6 hereof, (ii)
pursuant to the provisions of Section 5.7(c) hereof or (iii) upon the
liquidation of the Company's assets pursuant to Section 6.2 hereof. No Member
shall be liable for the return of any such amounts. No Member shall have the
right to require partition of the Company's property or to compel any sale or
appraisal of the Company's assets.
5.3 CAPITAL ACCOUNTS.
(a) The Company shall maintain a separate Capital Account for
each Member.
(b) Each Member's Capital Account shall have an initial
balance equal to the amount of cash and the value of any Securities (determined
in accordance with Section 7.3 hereof) constituting such Member's initial
contribution to the capital of the Company.
(c) Each Member's Capital Account shall be increased by the
sum of (i) the amount of cash and the value of any Securities (determined in
accordance with Section 7.3 hereof) constituting additional contributions by
such Member to the capital of the Company permitted
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pursuant to Section 5.1 hereof, plus (ii) all amounts credited to such Member's
Capital Account pursuant to Sections 5.4 through 5.7 or 5.9 hereof.
(d) Each Member's Capital Account shall be reduced by the sum
of (i) the amount of any repurchase of the Interest, or portion thereof, of such
Member or distributions to such Member pursuant to Sections 4.6, 5.11 or 6.2
hereof which are not reinvested, plus (ii) any amounts debited against such
Capital Account pursuant to Sections 5.4 through 5.9 hereof.
(e) The Company shall maintain a Special Advisory Account for
the Adviser in its capacity as Special Advisory Member solely for purposes of
receiving the Incentive Allocation pursuant to Section 5.8 hereof. The Special
Advisory Account shall have an initial balance of zero.
5.4 ALLOCATION OF NET PROFIT AND LOSS.
As of the last day of each Fiscal Period, any Net Profit or
Net Loss for the Fiscal Period shall be allocated among and credited to or
debited against the Capital Accounts of the Members in accordance with their
respective Investment Percentages for such Fiscal Period.
5.5 ALLOCATION OF INSURANCE PREMIUMS AND PROCEEDS.
(a) Any premiums payable by the Company for Insurance
purchased pursuant to Section 3.8(d) hereof shall be apportioned evenly over
each Fiscal Period or portion thereof falling within the period to which such
premiums relate under the terms of such Insurance, and the portion of the
premiums so apportioned to any Fiscal Period shall be allocated among and
debited against the Capital Accounts of each Member who is a member of the
Company during such Fiscal Period in accordance with such Member's Investment
Percentage for such Fiscal Period.
(b) Proceeds, if any, to which the Company may become entitled
pursuant to such Insurance shall be allocated among and credited to the Capital
Accounts of each Member who is a member of the Company during the Fiscal Period
in which the event which gives rise to recovery of proceeds occurs in accordance
with such Member's Investment Percentage for such Fiscal Period.
5.6 ALLOCATION OF CERTAIN WITHHOLDING TAXES AND OTHER
EXPENDITURES.
(a) If the Company incurs a withholding tax or other tax
obligation with respect to the share of Company income allocable to any Member,
then the Board of Managers, without limitation of any other rights of the
Company or the Managers, shall cause the amount of such obligation to be debited
against the Capital Account of such Member when the Company pays such
obligation, and any amounts then or thereafter distributable to such Member
shall be reduced by the amount of such taxes. If the amount of such taxes is
greater than any such distributable amounts, then such Member and any successor
to such Member's Interest shall pay to the Company as a contribution to the
capital of the Company, upon demand of the Board of Managers, the amount of such
excess. The Board of Managers shall not be obligated to apply for or obtain a
reduction of or exemption from withholding tax on behalf of any Member that may
be eligible for such reduction or exemption; provided, that in the event that
the Board of Managers determines that a Member is
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eligible for a refund of any withholding tax, the Board of Managers may, at the
request and expense of such Member, assist such Member in applying for such
refund.
(b) Except as otherwise provided for in this Agreement and
unless prohibited by the 1940 Act, any expenditures payable by the Company, to
the extent determined by the Board of Managers to have been paid or withheld on
behalf of, or by reason of particular circumstances applicable to, one or more
but fewer than all of the Members, shall be charged to only those Members on
whose behalf such payments are made or whose particular circumstances gave rise
to such payments. Such charges shall be debited from the Capital Accounts of
such Members as of the close of the Fiscal Period during which any such items
were paid or accrued by the Company.
5.7 RESERVES.
(a) Appropriate reserves may be created, accrued and charged
against Net Assets and proportionately against the Capital Accounts of the
Members for contingent liabilities, if any, as of the date any such contingent
liability becomes known to the Adviser or the Board of Managers, such reserves
to be in the amounts which the Board of Managers in its sole discretion deems
necessary or appropriate. The Board of Managers may increase or reduce any such
reserves from time to time by such amounts as the Board of Managers in its sole
discretion deems necessary or appropriate. The amount of any such reserve, or
any increase or decrease therein, shall be proportionately charged or credited,
as appropriate, to the Capital Accounts of those parties who are Members at the
time when such reserve is created, increased or decreased, as the case may be;
provided, however, that if any such individual reserve item, adjusted by any
increase therein, exceeds the lesser of $500,000 or 1% of the aggregate value of
the Capital Accounts of all such Members, the amount of such reserve, increase,
or decrease shall instead be charged or credited to those parties who were
Members at the time, as determined by the Board of Managers in its sole
discretion, of the act or omission giving rise to the contingent liability for
which the reserve was established, increased or decreased in proportion to their
Capital Accounts at that time.
(b) If at any time an amount is paid or received by the
Company (other than contributions to the capital of the Company, distributions
or repurchases of Interests or portions thereof) and such amount exceeds the
lesser of $500,000 or 1% of the aggregate value of the Capital Accounts of all
Members at the time of payment or receipt and such amount was not accrued or
reserved for but would nevertheless, in accordance with the Company's accounting
practices, be treated as applicable to one or more prior Fiscal Periods, then
such amount shall be proportionately charged or credited, as appropriate, to
those parties who were Members during such prior Fiscal Period or Periods.
(c) If any amount is required by paragraph (a) or (b) of this
Section 5.7 to be charged or credited to a party who is no longer a Member, such
amount shall be paid by or to such party, as the case may be, in cash, with
interest from the date on which the Board of Managers determines that such
charge or credit is required. In the case of a charge, the former Member shall
be obligated to pay the amount of the charge, plus interest as provided above,
to the Company on demand; provided, however, that (i) in no event shall a former
Member be obligated to make a payment exceeding the amount of such Member's
Capital Account at the time to which the charge
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relates; and (ii) no such demand shall be made after the expiration of three
years since the date on which such party ceased to be a Member. To the extent
that a former Member fails to pay to the Company, in full, any amount required
to be charged to such former Member pursuant to paragraph (a) or (b), whether
due to the expiration of the applicable limitation period or for any other
reason whatsoever, the deficiency shall be charged proportionately to the
Capital Accounts of the Members at the time of the act or omission giving rise
to the charge to the extent feasible, and otherwise proportionately to the
Capital Accounts of the current Members.
5.8 INCENTIVE ALLOCATION.
(a) So long as the Adviser serves as the Special Advisory
Member of the Company, the Incentive Allocation shall be debited against the
Capital Account of each Member as of the last day of each Allocation Period with
respect to such Member and the amount so debited shall simultaneously be
credited to the Special Advisory Account or, subject to compliance with the 1940
Act and the Advisers Act, to the Capital Accounts of such Members who are
directors, officers or employees of CIBC Opco or its Affiliates, or with respect
to which such directors, officers or employees are the sole beneficial owners,
as have been designated in any written notice delivered by the Adviser to the
Board of Managers within 90 days after the close of such Allocation Period.
(b) By the last business day of the month following the date
on which an Incentive Allocation is made, the Special Advisory Member may
withdraw up to 100% of the Incentive Allocation (computed on the basis of
unaudited data) that was credited to the Special Advisory Account. Within 30
days after the completion of the audit of the books of the Company for the year
in which allocations to the Special Advisory Account are made, the Company shall
pay to the Special Advisory Member any additional amount of Incentive Allocation
determined to be owed to the Special Advisory Member based on the audit, and the
Special Advisory Member shall pay to the Company any excess amount of Incentive
Allocation determined to be owed to the Company.
5.9 ALLOCATION OF ORGANIZATIONAL EXPENSES.
(a) As of the first Expense Allocation Date, Organizational
Expenses shall be allocated among and debited against the Capital Accounts of
the Members in accordance with their respective Capital Percentages on such
Expense Allocation Date.
(b) As of each Expense Allocation Date following the first
Expense Allocation Date, all amounts previously debited against the Capital
Account of a Member pursuant to this Section 5.9 on the preceding Expense
Allocation Date will be credited to the Capital Account of such Member, and
Organizational Expenses shall then be re-allocated among and debited against the
Capital Accounts of all Members in accordance with their respective Capital
Percentages on such Expense Allocation Date.
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5.10 TAX ALLOCATIONS.
For each fiscal year, items of income, deduction, gain, loss
or credit shall be allocated for income tax purposes among the Members in such
manner as to reflect equitably amounts credited or debited to each Member's
Capital Account for the current and prior fiscal years (or relevant portions
thereof). Allocations under this Section 5.10 shall be made pursuant to the
principles of Sections 704(b) and 704(c) of the Code and in conformity with
Regulations Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(4)(i) and 1.704-3(e)
promulgated thereunder, as applicable, or the successor provisions to such
Section and Regulations. Notwithstanding anything to the contrary in this
Agreement, there shall be allocated to the Members such gains or income as shall
be necessary to satisfy the "qualified income offset" requirement of Treasury
Regulation Section 1.704-1(b)(2)(ii)(d).
If the Company realizes capital gains (including short-term
capital gains) for Federal income tax purposes ("gains") for any fiscal year
during or as of the end of which one or more Positive Basis Members (as
hereinafter defined) withdraw from the Company pursuant to Article IV or VI, the
Board of Managers, unless otherwise determined by the Board of Managers, in its
sole discretion, shall allocate such gains as follows: (i) to allocate such
gains among such Positive Basis Members, pro rata in proportion to the
respective Positive Basis (as hereinafter defined) of each such Positive Basis
Member, until either the full amount of such gains shall have been so allocated
or the Positive Basis of each such Positive Basis Member shall have been
eliminated and (ii) to allocate any gains not so allocated to Positive Basis
Members to the other Members in such manner as shall equitably reflect the
amounts allocated to such Members' Capital Accounts pursuant to Section 5.3;
provided, however, that if, following such fiscal year, the Company realizes
gains from a sale of Securities the proceeds of which are designated on the
Company's books and records as being used to effect payments of all or part of
the interest in the Company of any Positive Basis Member, there shall be
allocated to any Positive Basis Member an amount of such gains equal to the
amount, if any, by which his or its Positive Basis as of the effective date of
his or its withdrawal exceeds the amount allocated to him or it pursuant to
clause (i) of this sentence.
If the Company realizes capital losses (including long-term
capital losses) for Federal income tax purposes ("losses") for any fiscal year
during or as of the end of which one or more Negative Basis Members (as
hereinafter defined) withdraw from the Company pursuant to Article IV or VI, the
Board of Managers, unless otherwise determined by the Board of Managers, in its
sole discretion, shall allocate such losses as follows: (i) to allocate such
losses among such Negative Basis Members, pro rata in proportion to the
respective Negative Basis (as hereinafter defined) of each such Negative Basis
Member, until either the full amount of such losses shall have been so allocated
or the Negative Basis of each such Negative Basis Member shall have been
eliminated and (ii) to allocate any losses not so allocated to Negative Basis
Members to the other Members in such manner as shall equitably reflect the
amounts allocated to such Members' Capital Accounts pursuant to Section 5.3;
provided, however, that if, following such fiscal year, the Company realizes
losses from a sale of Securities the proceeds of which are designated on the
Company's books and records as being used to effect payments of all or part of
the interest in the Company of any Negative Basis Member, there shall be
allocated to any Negative Basis Member an amount of such losses equal to the
amount, if any by which his or its Negative Basis as of the
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effective date of his or its withdrawal exceeds the amount allocated to him or
it pursuant to clause (i) of this sentence.
As used herein, (i) the term "Positive Basis" shall mean, with
respect to any Member and as of any time of calculation, the amount by which its
interest in the Company as of such time exceeds its "adjusted tax basis", for
Federal income tax purposes, in its interest in the Company as of such time
(determined without regard to any adjustments made to such "adjusted tax basis"
by reason of any transfer or assignment of such interest, including by reason of
death, and without regard to such Member's share of the liabilities of the
Company under Section 752 of the Code), and (ii) the term "Positive Basis
Member" shall mean any Member who withdraws from the Company and who has
Positive Basis as of the effective date of its withdrawal, but such Member shall
cease to be a Positive Basis Member at such time as it shall have received
allocations pursuant to clause (i) of the second paragraph of this Section 5.10
equal to its Positive Basis as of the effective date of its withdrawal.
As used herein, (i) the term "Negative Basis" shall mean, with
respect to any Member and as of any time of calculation, the amount by which its
interest in the Company as of such time is less than its "adjusted tax basis",
for Federal income tax purposes, in its interest in the Company as of such time
(determined without regard to any adjustments made to such "adjusted tax basis"
by reason of any transfer or assignment of such interest, including by reason of
death, and without regard to such Member's share of the liabilities of the
Company under Section 752 of the Code), and (ii) the term "Negative Basis
Member" shall mean any Member who withdraws from the Company and who has
Negative Basis as of the effective date of its withdrawal, but such Member shall
cease to be a Negative Basis Member at such time as it shall have received
allocations pursuant to clause (i) of the third paragraph of this Section 5.10
equal to its Negative Basis as of the effective date of its withdrawal.
Notwithstanding anything to the contrary in the foregoing, if
the Company realizes taxable gains in any fiscal year with respect to which the
Special Advisory Member is entitled to an Incentive Allocation under Section 5.8
hereof, the Board of Managers (at the request of the Special Advisory Member)
may specially allocate such gains to the Special Advisory Member in an amount by
which the Incentive Allocation exceeds the Special Advisory Member's "adjusted
tax basis" (determined without regard to any allocation to be made pursuant to
this paragraph) in its interest in the Company as of the time it withdraws such
Incentive Allocation. The Special Advisory Member's "adjusted tax basis", for
these purposes, shall be increased by any amount of the Incentive Allocation
withdrawal which it elects to contribute as a Member to the Company as of the
date of the withdrawal of the Incentive Allocation.
5.11 DISTRIBUTIONS.
(a) The Board of Managers may, in its sole
discretion, authorize the Company to make distributions in cash at any time to
all of the Members on a pro rata basis in accordance with the Members'
Investment Percentages.
(b) The Board of Managers may withhold taxes from any
distribution to any Member to the extent required by the Code or any other
applicable law. For purposes of
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this Agreement, any taxes so withheld by the Company with respect to any amount
distributed by the Company to any Member shall be deemed to be a distribution or
payment to such Member, reducing the amount otherwise distributable to such
Member pursuant to this Agreement and reducing the Capital Account of such
Member.
5.12 FOREIGN WITHHOLDING.
Notwithstanding any provision of this Agreement to the
contrary, the Board of Managers shall withhold and pay over to the Internal
Revenue Service, pursuant to Section 1441, 1442, 1445 or 1446 of the Code, or
any successor provisions, at such times as required by such Sections, such
amounts as the Company is required to withhold under such Sections, as from time
to time are in effect. To the extent that a foreign Member claims to be entitled
to a reduced rate of, or exemption from, U.S. withholding tax pursuant to an
applicable income tax treaty, or otherwise, the foreign Member shall furnish the
Board of Managers with such information and forms as such foreign Member may be
required to complete where necessary to comply with any and all laws and
regulations governing the obligations of withholding tax agents. Each foreign
Member represents and warrants that any such information and forms furnished by
such foreign Member shall be true and accurate and agrees to indemnify the
Company and each of the Members from any and all damages, costs and expenses
resulting from the filing of inaccurate or incomplete information or forms
relating to such withholding taxes.
Any amount of withholding taxes withheld and paid
over by the Board of Managers with respect to a foreign Member's distributive
share of the Company's gross income, income or gain shall be treated as a
distribution to such foreign Member and shall be charged against the Capital
Account of such foreign Member.
ARTICLE VI
DISSOLUTION AND LIQUIDATION
6.1 DISSOLUTION.
The Company shall be dissolved:
(1) upon the affirmative vote to dissolve the
Company by: (i) the Board of Managers or
(ii) Members holding at least two-thirds
(2/3) of the total number of votes eligible
to be cast by all Members;
(2) upon the failure of Members to elect a
successor Manager at a meeting called by the
Adviser in accordance with Section 2.6(c)
hereof when no Manager remains to continue
the business of the Company;
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(3) upon the expiration of any two year period
which commences on the date on which any
Member has submitted a written notice to the
Company requesting to tender its entire
Interest for repurchase by the Company if
such Interest has not been repurchased by
the Company;
(4) as required by operation of law.
Dissolution of the Company shall be effective on the later of the day on which
the event giving rise to the dissolution shall occur or the conclusion of any
applicable 60 day period during which the Board of Managers and Members may
elect to continue the business of the Company as provided above, but the Company
shall not terminate until the assets of the Company have been liquidated in
accordance with Section 6.2 hereof and the Certificate has been canceled.
6.2 LIQUIDATION OF ASSETS.
(a) Upon the dissolution of the Company as provided in Section
6.1 hereof, the Board of Managers shall promptly appoint the Administrator as
the liquidator and the Administrator shall liquidate the business and
administrative affairs of the Company, except that if the Board of Managers does
not appoint the Administrator as the liquidator or the Administrator is unable
to perform this function, a liquidator elected by Members holding a majority of
the total number of votes eligible to be cast by all Members shall promptly
liquidate the business and administrative affairs of the Company. Net Profit and
Net Loss during the period of liquidation shall be allocated pursuant to Section
5.4 hereof. The proceeds from liquidation (after establishment of appropriate
reserves for contingencies in such amount as the Board of Managers or liquidator
shall deem appropriate in its sole discretion as applicable) shall be
distributed in the following manner:
(1) the debts of the Company, other than debts,
liabilities or obligations to Members, and
the expenses of liquidation (including legal
and accounting expenses incurred in
connection therewith), up to and including
the date that distribution of the Company's
assets to the Members has been completed,
shall first be paid on a pro rata basis;
(2) such debts, liabilities or obligations as
are owing to the Members shall next be paid
in their order of seniority and on a pro
rata basis;
(3) The Special Advisory Member shall next be
paid any balance in the Special Advisory
Account after giving effect to the Incentive
Allocation, if any, to be made pursuant to
Section 5.8 hereof; and
(4) the Members shall next be paid on a pro rata
basis the positive balances of their
respective Capital Accounts after giving
effect to all allocations to be made to such
Members' Capital Accounts for the Fiscal
Period ending on the date of the
distributions under this Section 6.2(a)(3).
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(b) Anything in this Section 6.2 to the contrary
notwithstanding, upon dissolution of the Company, the Board of Managers or other
liquidator may distribute ratably in kind any assets of the Company; provided,
however, that if any in-kind distribution is to be made (i) the assets
distributed in kind shall be valued pursuant to Section 7.3 hereof as of the
actual date of their distribution and charged as so valued and distributed
against amounts to be paid under Section 6.2(a) above, and (ii) any profit or
loss attributable to property distributed in-kind shall be included in the Net
Profit or Net Loss for the Fiscal Period ending on the date of such
distribution.
ARTICLE VII
ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS
7.1 ACCOUNTING AND REPORTS.
(a) The Company shall adopt for tax accounting purposes any
accounting method which the Board of Managers shall decide in its sole
discretion is in the best interests of the Company. The Company's accounts shall
be maintained in U.S. currency.
(b) After the end of each taxable year, the Company shall
furnish to each Member such information regarding the operation of the Company
and such Member's Interest as is necessary for Members to complete Federal,
state and local income tax or information returns and any other tax information
required by Federal, state or local law.
(c) Except as otherwise required by the 1940 Act, or as may
otherwise be permitted by rule, regulation or order, within 60 days after the
close of the period for which a report required under this Section 7.1(c) is
being made, the Company shall furnish to each Member a semi-annual report and an
annual report containing the information required by such Act. The Company shall
cause financial statements contained in each annual report furnished hereunder
to be accompanied by a certificate of independent public accountants based upon
an audit performed in accordance with generally accepted accounting principles.
The Company may furnish to each Member such other periodic reports as it deems
necessary or appropriate in its discretion.
7.2 DETERMINATIONS BY THE BOARD OF MANAGERS.
(a) All matters concerning the determination and allocation
among the Members of the amounts to be determined and allocated pursuant to
Article V hereof, including any taxes thereon and accounting procedures
applicable thereto, shall be determined by the Board of Managers unless
specifically and expressly otherwise provided for by the provisions of this
Agreement or required by law, and such determinations and allocations shall be
final and binding on all the Members.
(b) The Board of Managers may make such adjustments to the
computation of Net Profit or Net Loss, the Allocation Change with respect to any
Member, or any components
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comprising any of the foregoing as it considers appropriate to reflect fairly
and accurately the financial results of the Company and the intended allocation
thereof among the Members.
7.3 VALUATION OF ASSETS.
(a) Except as may be required by the 1940 Act, the Board of
Managers shall value or have valued any Securities or other assets and
liabilities of the Company as of the close of business on the last day of each
Fiscal Period in accordance with such valuation procedures as shall be
established from time to time by the Board of Managers and which conform to the
requirements of the 1940 Act. In determining the value of the assets of the
Company, no value shall be placed on the goodwill or name of the Company, or the
office records, files, statistical data or any similar intangible assets of the
Company not normally reflected in the Company's accounting records, but there
shall be taken into consideration any items of income earned but not received,
expenses incurred but not yet paid, liabilities, fixed or contingent, and any
other prepaid expenses to the extent not otherwise reflected in the books of
account, and the value of options or commitments to purchase or sell Securities
or commodities pursuant to agreements entered into prior to such valuation date.
(b) The value of Securities and other assets of the Company
and the net worth of the Company as a whole determined pursuant to this Section
7.3 shall be conclusive and binding on all of the Members and all parties
claiming through or under them.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1 AMENDMENT OF LIMITED LIABILITY COMPANY AGREEMENT.
(a) Except as otherwise provided in this Section 8.1, this
Agreement may be amended, in whole or in part, with: (i) the approval of the
Board of Managers (including the vote of a majority of the Independent Managers,
if required by the 0000 Xxx) and (ii) if required by the 1940 Act, the approval
of the Members by such vote as is required by the 0000 Xxx.
(b) Any amendment that would:
(1) increase the obligation of a Member to make
any contribution to the capital of the
Company;
(2) reduce the Capital Account of a Member or
Special Advisory Account other than in
accordance with Article V; or
(3) modify the events causing the dissolution of
the Company;
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may be made only if (i) the written consent of each Member adversely affected
thereby is obtained prior to the effectiveness thereof or (ii) such amendment
does not become effective until (A) each Member has received written notice of
such amendment and (B) any Member objecting to such amendment has been afforded
a reasonable opportunity (pursuant to such procedures as may be prescribed by
the Board of Managers) to tender his entire Interest for repurchase by the
Company.
(c) The power of the Board of Managers to amend this Agreement
at any time without the consent of the other Members as set forth in paragraph
(a) of this Section 8.01 shall specifically include the power to:
(1) restate this Agreement together with any
amendments hereto which have been duly
adopted in accordance herewith to
incorporate such amendments in a single,
integrated document;
(2) amend this Agreement (other than with
respect to the matters set forth in Section
8.1(b) hereof) to effect compliance with any
applicable law or regulation, including but
not limited to, to satisfy the requirements,
or to reflect any relaxation of such
requirements in the future, of the Bank
Holding Company Act or other U.S. or
Canadian banking laws, or any regulations,
guidelines or policies or interpretations of
the banking regulatory agencies or the staff
thereof, or to cure any ambiguity or to
correct or supplement any provision hereof
which may be inconsistent with any other
provision hereof, provided that such action
does not adversely affect the rights of any
Member in any material respect; and
(3) amend this Agreement to make such changes as
may be necessary or advisable to ensure that
the Partnership will not be treated as an
association taxable as a corporation or as a
publicly traded partnership as defined in
Section 7704(b) of the Code.
(d) The Board of Managers shall cause written notice to be
given of any amendment to this Agreement (other than any amendment of the type
contemplated by clause (1) of Section 8.1(c) hereof) to each Member, which
notice shall set forth (i) the text of the amendment or (ii) a summary thereof
and a statement that the text thereof will be furnished to any Member upon
request.
8.2 SPECIAL POWER OF ATTORNEY.
(a) Each Member hereby irrevocably makes, constitutes and
appoints each Manager, acting severally, and any liquidator of the Company's
assets appointed pursuant to Section 6.2 hereof with full power of substitution,
the true and lawful representatives and attorneys-in-fact of, and in the name,
place and stead of, such Member, with the power from time to time to make,
execute, sign, acknowledge, swear to, verify, deliver, record, file and/or
publish:
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(1) any amendment to this Agreement which
complies with the provisions of this
Agreement (including the provisions of
Section 8.1 hereof);
(2) any amendment to the Certificate required
because this Agreement is amended,
including, without limitation, an amendment
to effectuate any change in the membership
of the Company; and
(3) all such other instruments, documents and
certificates which, in the opinion of legal
counsel to the Company, may from time to
time be required by the laws of the United
States of America, the State of Delaware or
any other jurisdiction in which the Company
shall determine to do business, or any
political subdivision or agency thereof, or
which such legal counsel may deem necessary
or appropriate to effectuate, implement and
continue the valid existence and business of
the Company as a limited liability company
under the Delaware Act.
(b) Each Member is aware that the terms of this Agreement
permit certain amendments to this Agreement to be effected and certain other
actions to be taken or omitted by or with respect to the Company without such
Member's consent. If an amendment to the Certificate or this Agreement or any
action by or with respect to the Company is taken in the manner contemplated by
this Agreement, each Member agrees that, notwithstanding any objection which
such Member may assert with respect to such action, the attorneys-in-fact
appointed hereby are authorized and empowered, with full power of substitution,
to exercise the authority granted above in any manner which may be necessary or
appropriate to permit such amendment to be made or action lawfully taken or
omitted. Each Member is fully aware that each Member will rely on the
effectiveness of this special power-of-attorney with a view to the orderly
administration of the affairs of the Company.
(c) This power-of-attorney is a special power-of-attorney and
is coupled with an interest in favor of each of the Managers and as such:
(1) shall be irrevocable and continue in full
force and effect notwithstanding the
subsequent death or incapacity of any party
granting this power-of-attorney, regardless
of whether the Company or Board of Managers
shall have had notice thereof; and
(2) shall survive the delivery of a Transfer by
a Member of the whole or any portion of such
Member's Interest, except that where the
transferee thereof has been approved by the
Board of Managers for admission to the
Company as a substituted Member, this
power-of-attorney given by the transferor
shall survive the delivery of such
assignment for the sole purpose of enabling
the Board of Managers to execute,
acknowledge and file any instrument
necessary to effect such substitution.
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8.3 NOTICES.
Notices which may or are required to be provided under this
Agreement shall be made, if to a Member, by regular mail, or if to the Board of
Managers or the Adviser, by hand delivery, registered or certified mail return
receipt requested, commercial courier service, telex or telecopier, and shall be
addressed to the respective parties hereto at their addresses as set forth in
the books and records of the Company. Notices shall be deemed to have been
provided when delivered by hand, on the date indicated as the date of receipt on
a return receipt or when received if sent by regular mail, commercial courier
service, telex or telecopier. A document that is not a notice and that is
required to be provided under this Agreement by any party to another party may
be delivered by any reasonable means.
8.4 AGREEMENT BINDING UPON SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, successors, assigns,
executors, trustees or other legal representatives, but the rights and
obligations of the parties hereunder may not be Transferred or delegated except
as provided in this Agreement and any attempted Transfer or delegation thereof
which is not made pursuant to the terms of this Agreement shall be void.
8.5 APPLICABILITY OF 1940 ACT AND FORM N-2.
The parties hereto acknowledge that this Agreement is not
intended to, and does not, set forth the substantive provisions contained in the
1940 Act and the Form N-2 which affect numerous aspects of the conduct of the
Company's business and of the rights, privileges and obligations of the Members.
Each provision of this Agreement shall be subject to and interpreted in a manner
consistent with the applicable provisions of the 1940 Act and the Form N-2.
8.6 CHOICE OF LAW; ARBITRATION.
(a) Notwithstanding the place where this Agreement may be
executed by any of the parties hereto, the parties expressly agree that all the
terms and provisions hereof shall be construed under the laws of the State of
Delaware, including the Delaware Act without regard to the conflict of law
principles of such State.
(b) UNLESS OTHERWISE AGREED IN WRITING, EACH MEMBER AND THE
SPECIAL ADVISORY MEMBER AGREES TO SUBMIT ALL CONTROVERSIES ARISING BETWEEN
MEMBERS OR ONE OR MORE MEMBERS OR THE SPECIAL ADVISORY MEMBER AND THE COMPANY TO
ARBITRATION IN ACCORDANCE WITH THE PROVISIONS SET FORTH BELOW AND UNDERSTANDS
THAT:
(1) ARBITRATION IS FINAL AND BINDING ON THE
PARTIES;
(2) THEY ARE WAIVING THEIR RIGHT TO SEEK
REMEDIES IN COURT, INCLUDING THE RIGHT TO A
JURY TRIAL;
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(3) PRE-ARBITRATION DISCOVERY IS GENERALLY MORE
LIMITED AND DIFFERENT FROM COURT
PROCEEDINGS;
(4) THE ARBITRATOR'S AWARD IS NOT REQUIRED TO
INCLUDE FACTUAL FINDINGS OR LEGAL REASONING
AND A PARTY'S RIGHT TO APPEAL OR TO SEEK
MODIFICATION OF RULINGS BY ARBITRATORS IS
STRICTLY LIMITED; AND
(5) THE PANEL OF ARBITRATORS WILL TYPICALLY
INCLUDE A MINORITY OF ARBITRATORS WHO WERE
OR ARE AFFILIATED WITH THE SECURITIES
INDUSTRY.
(c) ALL CONTROVERSIES THAT MAY ARISE AMONG MEMBERS AND ONE OR
MORE MEMBERS OR THE SPECIAL ADVISORY MEMBER AND THE COMPANY CONCERNING THIS
AGREEMENT SHALL BE DETERMINED BY ARBITRATION IN NEW YORK CITY IN ACCORDANCE WITH
THE FEDERAL ARBITRATION ACT, TO THE FULLEST EXTENT PERMITTED BY LAW. ANY
ARBITRATION UNDER THIS AGREEMENT SHALL BE DETERMINED BEFORE AND IN ACCORDANCE
WITH THE RULES THEN OBTAINING OF EITHER THE NEW YORK STOCK EXCHANGE, INC. (THE
"NYSE") OR THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (THE "NASD"), AS
THE MEMBER OR SPECIAL ADVISORY MEMBER OR ENTITY INSTITUTING THE ARBITRATION MAY
ELECT. IF THE NYSE OR NASD DOES NOT ACCEPT THE ARBITRATION FOR CONSIDERATION,
THE ARBITRATION SHALL BE SUBMITTED TO, AND DETERMINED IN ACCORDANCE WITH THE
RULES THEN OBTAINING OF, THE CENTER FOR PUBLIC RESOURCES, INC. IN NEW YORK CITY.
JUDGMENT ON ANY AWARD OF ANY SUCH ARBITRATION MAY BE ENTERED IN THE SUPREME
COURT OF THE STATE OF NEW YORK OR IN ANY OTHER COURT HAVING JURISDICTION OF THE
PERSON OR PERSONS AGAINST WHOM SUCH AWARD IS RENDERED. ANY NOTICE OF SUCH
ARBITRATION OR FOR THE CONFIRMATION OF ANY AWARD IN ANY ARBITRATION SHALL BE
SUFFICIENT IF GIVEN IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT. EACH
MEMBER AGREES THAT THE DETERMINATION OF THE ARBITRATORS SHALL BE BINDING AND
CONCLUSIVE UPON THEM.
(d) NO MEMBER SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTION
TO ARBITRATION, NOR SEEK TO ENFORCE ANY PRE-DISPUTE ARBITRATION AGREEMENT
AGAINST ANY PERSON WHO HAS INITIATED IN COURT A PUTATIVE CLASS ACTION; OR WHO IS
A MEMBER OF A PUTATIVE CLASS WHO HAS NOT OPTED OUT OF THE CLASS WITH RESPECT TO
ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION UNTIL: (i) THE CLASS
CERTIFICATION IS DENIED; OR (ii) THE CLASS IS DECERTIFIED; OR (iii) THE MEMBER
IS EXCLUDED FROM THE CLASS BY THE COURT. SUCH FORBEARANCE TO ENFORCE AN
AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF ANY RIGHTS UNDER THIS
AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN.
8.7 NOT FOR BENEFIT OF CREDITORS.
The provisions of this Agreement are intended only for the
regulation of relations among past, present and future Members, Managers, the
Special Advisory Member and the Company. This Agreement is not intended for the
benefit of non-Member creditors and no rights are granted to non-Member
creditors under this Agreement.
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8.8 CONSENTS.
Any and all consents, agreements or approvals provided for or
permitted by this Agreement shall be in writing and a signed copy thereof shall
be filed and kept with the books of the Company.
8.9 MERGER AND CONSOLIDATION.
(a) The Company may merge or consolidate with or into one or
more limited liability companies formed under the Delaware Act or other business
entities pursuant to an agreement of merger or consolidation which has been
approved in the manner contemplated by Section 18-209(b) of the Delaware Act.
(b) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, an agreement of merger or consolidation approved in
accordance with Section 18-209(b) of the Delaware Act may, to the extent
permitted by Section 18-209(f) of the Delaware Act, (i) effect any amendment to
this Agreement, (ii) effect the adoption of a new limited liability company
agreement for the Company if it is the surviving or resulting limited liability
company in the merger or consolidation, or (iii) provide that the limited
liability company agreement of any other constituent partnership to the merger
or consolidation (including a limited liability company formed for the purpose
of consummating the merger or consolidation) shall be the limited liability
company agreement of the surviving or resulting limited liability company.
8.10 PRONOUNS.
All pronouns shall be deemed to refer to the masculine,
feminine, neuter, singular or plural, as the identity of the person or persons,
firm or corporation may require in the context thereof.
8.11 CONFIDENTIALITY.
(a) A Member may obtain from the Company such information
regarding the affairs of the Company as is just and reasonable under the
Delaware Act, subject to reasonable standards (including standards governing
what information and documents are to be furnished, at what time and location
and at whose expense) established by the Board of Managers.
(b) Each Member covenants that, except as required by
applicable law or any regulatory body, it will not divulge, furnish or make
accessible to any other person the name and/or address (whether business,
residence or mailing) of any Member (collectively, "Confidential Information")
without the prior written consent of the Board of Managers, which consent may be
withheld in their sole discretion.
(c) Each Member recognizes that in the event that this Section
8.11 is breached by any Member or any of its principals, partners, members,
directors, officers, employees or agents or any of its affiliates, including any
of such affiliates' principals, partners, members, directors, officers,
employees or agents, irreparable injury may result to the non-breaching Members
and the
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Company. Accordingly, in addition to any and all other remedies at law or in
equity to which the non-breaching Members and the Company may be entitled, such
Members shall also have the right to obtain equitable relief, including, without
limitation, injunctive relief, to prevent any disclosure of Confidential
Information, plus reasonable attorneys' fees and other litigation expenses
incurred in connection therewith. In the event that any non-breaching Member or
the Company determines that any of the other Members or any of its principals,
partners, members, directors, officers, employees or agents or any of its
affiliates, including any of such affiliates' principals, partners, members,
directors, officers, employees or agents should be enjoined from or required to
take any action to prevent the disclosure of Confidential Information, each of
the other non-breaching Members agrees to pursue in a court of appropriate
jurisdiction such injunctive relief.
8.12 CERTIFICATION OF NON-FOREIGN STATUS.
Each Member or transferee of an Interest from a Member shall
certify, upon admission to the Company and at such other times thereafter as the
Board of Managers may request, whether he is a "United States Person" within the
meaning of Section 7701(a)(30) of the Code on forms to be provided by the
Company, and shall notify the Company within 30 days of any change in such
Member's status. Any Member who shall fail to provide such certification when
requested to do so by the Board of Managers may be treated as a non-United
States Person for purposes of U.S. federal tax withholding.
8.13 SEVERABILITY.
If any provision of this Agreement is determined by a court of
competent jurisdiction not to be enforceable in the manner set forth in this
Agreement, each Member agrees that it is the intention of the Members that such
provision should be enforceable to the maximum extent possible under applicable
law. If any provisions of this Agreement are held to be invalid or
unenforceable, such invalidation or unenforceability shall not affect the
validity or enforceability of any other provision of this Agreement (or portion
thereof).
8.14 FILING OF RETURNS.
The Board of Managers or their designated agent shall prepare
and file, or cause the accountants of the Company to prepare and file, a Federal
information tax return in compliance with Section 6031 of the Code and any
required state and local income tax and information returns for each tax year of
the Company.
8.15 TAX MATTERS PARTNER.
(a) A Manager who is a Member shall be designated on the
Company's annual Federal income tax return, and have full powers and
responsibilities, as the Tax Matters Partner of the Company for purposes of
Section 6231(a)(7) of the Code. In the event that no Manager is a Member, a
Member shall be so designated. Should any Member be designated as the Tax
Matters Partner for the Company pursuant to Section 6231(a)(7) of the Code, it
shall, and each Member hereby does, to the fullest extent permitted by law,
delegate to a Manager selected by the Board of Managers all of its rights,
powers and authority to act as such Tax Matters Partner
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and hereby constitutes and appoints such Manager as its true and lawful
attorney-in-fact, with power to act in its name and on its behalf, including the
power to act through such agents or attorneys as it shall elect or appoint, to
receive notices, to make, execute and deliver, swear to, acknowledge and file
any and all reports, responses and notices and to do any and all things required
or advisable, in the Manager's judgment, to be done by such a Tax Matters
Partner. Any Member designated as the Tax Matters Partner for the Company under
Section 6231(a)(7) of the Code shall be indemnified and held harmless by the
Company from any and all liabilities and obligations that arise from or by
reason of such designation.
(b) Each person (for purposes of this Section 8.15, called a
"Pass-Thru Partner") that holds or controls an interest as a Member on behalf
of, or for the benefit of, another person or persons, or which Pass-Thru Partner
is beneficially owned (directly or indirectly) by another person or persons,
shall, within 30 days following receipt from the Tax Matters Partner of any
notice, demand, request for information or similar document, convey such notice
or other document in writing to all holders of beneficial interests in the
Company holding such interests through such Pass-Thru Partner. In the event the
Company shall be the subject of an income tax audit by any Federal, state or
local authority, to the extent the Company is treated as an entity for purposes
of such audit, including administrative settlement and judicial review, the Tax
Matters Partner shall be authorized to act for, and its decision shall be final
and binding upon, the Company and each Member thereof. All expenses incurred in
connection with any such audit, investigation, settlement or review shall be
borne by the Company.
8.16 SECTION 754 ELECTION.
In the event of a distribution of Company property to a Member
or an assignment or other transfer (including by reason of death) of all or part
of the interest of a Member in the Company, at the request of a Member, the
Board of Managers, in its discretion, may cause the Company to elect, pursuant
to Section 754 of the Code, or the corresponding provision of subsequent law, to
adjust the basis of the Company property as provided by Sections 734 and 743 of
the Code.
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THE UNDERSIGNED ACKNOWLEDGES HAVING READ THIS AGREEMENT IN ITS ENTIRETY
BEFORE SIGNING, INCLUDING THE PRE-DISPUTE ARBITRATION CLAUSE SET FORTH IN
SECTION 8.6 AND THE CONFIDENTIALITY CLAUSE SET FORTH IN SECTION 8.11.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
MANAGERS:
/s/____________________________________
/s/____________________________________
/s/____________________________________
ORGANIZATIONAL MEMBER:
/s/____________________________________
MEMBERS:
Each person who shall sign
a Member Signature Page and
who shall be accepted by
the Board of Managers to
the Company as a Member.
SPECIAL ADVISORY MEMBER:
CIBC XXXXXXXXXXX ADVISERS, L.L.C.
By: CIBC Xxxxxxxxxxx Corp.
Managing Member
By: /s/___________________________
Name:
Title:
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