Irving H. Picard v. Saul B. Katz et al

Filing 153

DECLARATION of DANA M. SESHENS in Support re: 143 MOTION in Limine TO BAR USE OF PREJUDICIAL PHRASE., 145 MOTION in Limine TO EXCLUDE STERLING STAMOS DOCUMENTS.. Document filed by Charles 15 Associates, Charles 15 LLC, Charles Sterling LLC, Charles Sterling Sub LLC, College Place Enterprises LLC, Coney Island Baseball Holding Company LLC, Estate of Leonard Schreier, FFB Aviation LLC, FS Company LLC, Fred Wilpon Family Trust, Arthur Friedman, Ruth Friedman, Iris J. Katz and Saul B. Katz Family Foundation, Inc., Judy and Fred Wilpon Family Foundation, Inc., Amy Beth Katz, David Katz, Dayle Katz, Gregory Katz, Howard Katz, Iris Katz, 157 J.E.S. LLC, Air Sterling LLC, BAS Aircraft LLC, Jason Bacher, Bon Mick Family Partners LP, Bon-Mick, Inc., Brooklyn Baseball Company LLC, C.D.S. Corp., Michael Katz, Saul B. Katz, Todd Katz, Katz 2002 Descendants' Trust, Heather Katz Knopf, Natalie Katz O'Brien, Mets II LLC, Mets Limited Partnership, Mets One LLC, Mets Partners, Inc., Minor 1 (REDACTED), Minor 2 (REDACTED), L. Thomas Osterman, Phyllis Rebell Osterman, Realty Associates Madoff II, Red Valley Partners, Robbinsville Park LLC, Ruskin Garden Apartments LLC, Saul B. Katz Family Trust, Michael Schreier, Deyva Schreier Arthur, See Holdco LLC, See Holdings I, See Holdings II, Sterling 10 LLC, Sterling 15C LLC, Sterling 20 LLC, Sterling Acquisitions LLC, Sterling American Advisors II LP, Sterling American Property III LP, Sterling American Property IV LP, Sterling American Property V LP, Sterling Brunswick Corporation, Sterling Brunswick Seven LLC, Sterling Dist Properties LLC, Sterling Equities, Sterling Equities Associates, Sterling Equities Investors, Sterling Heritage LLC, Sterling Internal V LLC, Sterling Jet II Ltd., Sterling Jet Ltd., Sterling Mets Associates, Sterling Mets Associates II, Sterling Mets LP, Sterling Pathogenesis Company, Sterling Third Associates, Sterling Thirty Venture LLC, Sterling Tracing LLC, Sterling Twenty Five LLC, Sterling VC IV LLC, Sterling VC V LLC, Edward M. Tepper, Elise C. Tepper, Jacqueline G. Tepper, Marvin B. Tepper, Valley Harbor Associates, Kimberly Wachtler, Philip Wachtler, Bruce N. Wilpon, Daniel Wilpon, Debra Wilpon, Fred Wilpon, Jeffrey Wilpon, Jessica Wilpon, Judith Wilpon, Richard Wilpon, Scott Wilpon, Valerie Wilpon, Wilpon 2002 Descendants' Trust, Robin Wilpon Wachtler. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H, # 9 Exhibit I, # 10 Exhibit J, # 11 Exhibit K, # 12 Exhibit L, # 13 Exhibit M, # 14 Exhibit N, # 15 Exhibit O, # 16 Exhibit P)(Seshens, Dana)

EXHIBIT H

LIMITED LIABILITY COMPANY AGREEMENT

OF

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STAMOS PARJNERS ASSOCIATES, LLC
)Jated as ofJune 15,2002

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9296075.14

CONFIDENTIAL INFORMATION
NH0000043

TABLE OF CONTENTS

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ARTICLE T General ......................................................................................................................... !
Sec. 1.0\.
Name and Address ............................... :···•···--·····--···--........................................ !
Sec. 1.02.
·Tenn ................................:·-················································--·--'···············:···--·····1
Sec. !.03.
Purpose and Powers. of the. Companv ...............................................................1
Registered Office:.Recistered Aaent ................................................................. !
Sec. 1.04.
Sec. LOS.
The Members ., ........................................................................... ,....................... 2
Sec. 1.06 ..
Liabilitv of Members ......................................................................................... 2 ·
Transfers ofihterest ............................................... :........................................... .3
Sec. 1.07.

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ARTICLE II Management ..................................................... ,......................................................... 3
Sec. 2.01.
Management of the·Companv ........................................................................... .3
Sec. 2.02.
Authority of the Managin!! Member ......................................... -. ..... :................ .3
Sec. 2.03.
Reliance by Third Parties .................................................................................. .5
Covenant of Cbirlidentiality: Non-DiSpanmement: NonSec. 2.04..
Solicitation: Non-Competition ................................,, ........................... ,................ 5
Sec. :2.05.
Exculpation .........................................................................................................?
Sec. 2.06.
Jndemnification .... c ............................................................................................7
Sec. 2.07c
Other Matters Concerning the Members ......................................................... ...8
Sec. 2.08.
Exnenses .............................................................................................................8

ARTlCLE III Capital Accounts ....................................................................................................... 9
Sec. 3.01.
Sec. 3.02.

Delinitions..........................................................................................................9

Se.c. 3.03.
Sec. 3.04.

Capital Accounts................................... , ........................................ ,.................. ll
Investment Percenta11:es: Incentive Percentages: Oocratfug
Percentages ................ :..... ."................................................................................12
.General Allocations ......................................................................................... 13

Sec. 3.05..
Sec. 3.06.
Sec. 3.07.
Sec. 3.08.

Sec. 3.09.
Sec. 3.10.
Sec. 3.11.

Capital Contributions .._,,,, ................ ~.L···--···•••u•••n•·••••••· .. ••••••·•···L.................... IO

~r:A~~~~~~~~~~~~.::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::i~
Allocations ofNet Income and Net Losses for .Federal Income
Tax Purooses ................, ............. .-..................................................................... 15
Determination bv the Managing Member of Certain Matters ......................... 16
Adjustments bv the Managing Member to Take Accollilt of
.lntei:im Year Events ............ , .... ,....................................................................... 16.
Investment in Additional Funds ....................................................................... l6

ARTICLE f\1 Loans to Members; Compensation of the Members; Withdrawals;
Distributions; Lirilltations on Distributions and Withdrawals ......................... l6
Loans to Members............................................................................................ 16
Sec. 4.01.
Compensation of the Members ........................................................................ !6
Sec. 4.02.
Sec.4.03.
Withdrawals ....................·..............................................................., .................. 16
Sec. 4.04.
Distributions ........................................................... :.......................................... !?
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NH0000044

Se<;. 4.05.

Limitation on Distributions and Withdrawals .................................................. l7

ARTICLE V Admission. of New Members .............................................:..................................... 18
Sec. 5.01.
Admission· of Additional or Substitute Members ............................................ 18
ARTICLE VI Withdr-awal, Reduced Interest, Death, Disability, Adjudication of
Incompetency, Dis·solution Or Bankruptcy ...................................................... 18
WithdrawaL Reduced Interest. Death. Disabilitv. Adjudication
Sec. 6.01.
of Incompetencv. Dissolution or Bankruptcy of a Member ..........,-................. 18
Sec. 6.02. ·
Ri2hts of Reduced lnterestMembers...............................................................20
Sec. 6.03.
Pavments to Withd.rawine Members ................................................................2l
Limitations on Distributions ........................................................................... 22
Sec. 6.04.
ARTICLE VII Duration and Term.fuation of the Company ...........................................................22
Sec. 7.01.
Duration of CompanY .......................................................................................22
Se.c. 7.02.
Termination ofCompanv .................................................................................22
ARTICLE VIII Tax.Return5;·Reportsto Members .......................................................................22
Sec. 8.01.
FilinuofTaxRetun:is .......................................................................................22
Sec. 8.02.
Reports to Current and Fonner Members ........................................................22
Sec. 8.03.
Tax.Matters Partner.... ,.....................................................................................23
Sec. 8.04.
Books and Records ..........................................................................................23

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ARTICLE IX Miscellaneous ................................................................................................:........ 23
Sec. 9.01.
Generai .............................................................................................................23
Sec. 9.02.
Power of Attorney ... ~...... c................................................................................23
Sec. 9.03.
Amendments ....................................................................................................24
Sec. 9.04.
Choice ofLaw ..................................................................................................24
Secc 9.05.
·Notices ............................................. , ................................ :...............................24
Sec. 9.06.Goodwili ..........................................................................................................24
Sec. 9.07.
Treatment ofPavments ....................................................................................24
Sec. 9.08.
Adjustment ofBasis of Companv Propertv..................................... ,............... 24
Sec, 9.09.
Headiile:s ............... , ...................., .... ,, ..._
................_
............ ,.................... ,..........25

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The undersigned (the "Members", which term shall collectively include the
undersigned "Managing Member" and "Non-Managing Member", and- any persons or entities
(each, a "Person") hereafter admitted to the Company pursuant to Article V of this Agreement as
Managing. or Non-Managing Member, and shall exclude any persons; who cease to be Members
pursuant to Article VI of tills Agreement) hereby enter· into this Operating Agreement, dated as
of June 15, 2002 (the "Agreement"), of Stamos Partner Associates, LLC (the "Company").. The
Company was foirned as of June .3; 2002 upon the filing of' a Certificate of Formation with the
Secretary of State of the State of Delaware, pursuant to the provisions of the Delaware Limited
Liability Company Act (6 Del. Q. § 18-101, ~ g;g.) _(the "Act"). The Company shall be
governed by, and operated pursuant to, the terms-and provisions of this Agreement.
ARTICLE I
General
Sec. l.OL
Name and Address. The name of the Company is ''Stamos
Partners Associates, LLC" The ivfanag_ing Member may change tbe name of the Company or
adopt such trade or fictitious names as he may detennine. '):he principal office of tbe Company
shall be located at 575 Fifth Avenue,. 401h Floor, New York, New. York 10017 or such other
location as the Managing Member shall designate.

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Sec. 1.02.
Term. The term ·of the- ComP.anY began on the date the certificate
offorrnation of the Company was filed, and shall continue· until tenninated as provided herein.
Sec. 1.03.

Purnose and Powers of the Comoanv.

(a).
The purpose of' the Company is to engage in any phase of investing and
trading in secilrities _and other fimincial irist11ltllents and in any financing activities, including,
without limitation, prov.iding, directly or througb subpartnerships, joint ventures or subsidiaries,
a :full range of investment advisory services. The· purpose of the Company also is to invest in
and act a:s the general partner·or- managing member of (or serve in. a .similar capacity with respect
to) SP Capital Fund I, L.P. ("Fimd I"), SP Capital Fund II, L.P. ("Fund It') and other investment
partnerships, limited liability companies or. similar investment vehicies that the Managing
Member or his affiliates may .elect to form (each such investment vel:ricle, a "Fund" and
collectively,_ the· "Fonds"). Such investment vehicles shall operate pursuant to such limited
partnership agreements, operating agreements ot other· .governing documents as the Managing
Member shall'determine (each a "Fimd Agreell\ent",.and collectively, fue·';Fimd Agreements").
The Company may engage in such other activities as are necessary or incidental to the foregoing
puzposes.

The Company shall have the power to engage in all actions, ptoceedings,
(b)
activities and transactions that the Managing Member may deem necessary or advisable in
connection with the foregoing purposes.

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Sec. 1.04.
Registered Office:. Registered Agent. The regiStered office of the
Company in the State of Delaware is National Corporate Research, Ltd., 615 South DuPont
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Highway, Dover, Delaware 19901. The name _and address of the registered agent of the
Company for service of process on the Company in the State of Delaware is National Corporate
Research, Ltd,, 615 South DUPont Highway, Dover, Delaware 19901. Such office and such
agent may be changed from time to time·by'the Managing Member in his sole discretion.

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Sec, 1.05.
The Members. The Managing Member of the Company. is Peter S.
Stamos, and each other Member admitted to· the Company is a Non-Managing Member, UIJiess
designated a managing member by the Managing Member. The nani.e, address and Capital
Contribution (as defined in S.ecc 3,02) of each of the Members are set forth in a schedule entitled .
"Schedlile of Members'' (.herein called "Schedule A"), which shall be tiled with the books and
records of the Company at the Company's· principal office. (as set forth in Sec. 1.01) and is
hereby incorporated by· reference .and made a part of this Agreement. Each Non-Managing
Member shall be designated by" the' Managing Member· as a "Class A Member" or a "Class B
Member", and,· for these purposes, the Managing Member shall be designated a Class A
Member. For purposes. of Sees. 3.04 and 6.02, PeterS. Stamp_s shall be· designated as the Special
Class- A Member and Saul B. Katz shall be designated as the Special Class B Member, and each
of Mr. Stamos and l'v!r. Katz shall serve in such capacity until such tii:ne as. his interest in the
Company is· terminated or he is readered tlllable to perfoim his duties hereunder by death,
disability or incompetency. In the event tliat either Mr. Stamos or Mr- :Katz withdraws from· the
Company or is unable to perform his duties as the Special Class· A Member or Special: Cl.Ss B
Member, respectively,. the Members of the applicable class,_ o.ther than any Reduced Interest
Member (as defmed in Section 6.0J.(a)) of such class, shall, by majority vote (in accordance with
the Members' Incentive Percentages), designate a Member _of such class as the Special Class A
Member or Special Class B Member, as applicable. All. of the foregoing designations- shall be
reflected on Schedul;> A. -

~ used in this Agreement.. the tenn "former Member" refers to such persons or
entities· as hereafter from time to time cease to be Member(s), whether voluntarily or othenv.isc,
·
pursuant to the terms and: provisions of this Ag;reement.
Liability of Members. The Members and former Members shall be
Sec. 1.06.
·liable for ihe'repayment and discharge of all debts and obligations of the Company attributable to
any· fiscal year (or relevant portion thereof) during which they are or·were Members of the
Company only to the extent of their respective interests in. the Company in the .fiscal year (or
relevant p.ortion thereof) to which any such debts and obligations _are attributable.
The. Members and· all former Members shall share all losses, liabilities or
. expenses- suffered or incurred by virtue of the operation of the preceding paragraph. of this. Sec.
1.06 in the proportions of their-respective interests in the Company for the fiscal year (or relevant
portion tliereo.f) to which any debts or obligations of the Company are' attributable. A Member's
or former Member's share of all losses, liabilities or expenses shall not be greater than such
Member's interest in the Company for such fiscal year (or relevant portion thereof).
As used. in this Sec. 1.06, the terms "interests in the Company" and "interest in the
Company" shall mean with respect to any fiscal year (or relevant portion thereof) and with
respect to each- Member (or fonner Member) the Capital Accounts (as defined in Sec. 3.03) that
such Member (or former Member) would have received (or in fact did receive) pursuant \O the
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tenns 1md provisions of Article. VI upon withdrawal from the_ Company as of the end of such ·
fiscal year (or relevant portion thereof):
Nonvithstanding any other provision in this Agi:eement (except Sec. 3.02(a)), in.
no event shall any Member- (including any Reduced Interest Member) or former Member be
obligated to make any additional contribution whatsoever to the Company, or have any liability
for the·.repayment and discharge of the debts and obligations of the Company (apart from such.
Member's interest in the Company), except that a Member (including a Reduced. Interest
Member) or· former Member may be required by the Managing Member, acting in his sole
discretion; for purposes of meeting such Member's obligations under this Sec. 1.06, to make·
additional contributions or payments, respectively, up to, but in no event in excess of, the
aggi:egate amount of returns of capital and other amounts actually received by him/her from the
Company during or after the :fiscal year to which any debtor obligation is attributable.

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Sec. 1.07.
Transfers of Interest. Except as otherwise expressly provided in
this Agi:eement, no Member shall liave· the right to sell, assign, pledge, transfer or otherwise
dispose. of all or any part ofhls/her interest in the Company, Without the consent of the Managing
Member. Each Non-Managing Member may assigtt all or a portion of hlS!her interest in the.
Company (e;<cluding the voth:ig rights relating thereto,. whlch shall remain wit!). such NonManaging .Member) and all or a portion of his/her Incentive Percentage (as defined in Sec.
·:>.04(0)) and hls/her Operating Percentage (as defined in Sec. 3,04(c)), to a trust created for the
benefit of one or more. of hlS!her parents, spouse or children or other peu,ons or entities
designated by. snch Non-Managing Member (a "Related Trust"). A Related Trust shall be
admitted to the Company as a non-voting Non-Managing Member. Any purported sale,
assignment, pledge, transfer or other disposition of all or any part of an interest in the Company
in <;Ontravention of this Sec. 1.07 shall be nllll and vtlid and of no force. and effect.
ARTICLE II

Management
Sec. 2.01.
Management of the Company. Except as otherwise provided
·herein, the power to make investment decisions with regard to. the assets and· liabilities of the
Company and to make decisions with regard to the management of the Compaoy shall be vested
exclusively in the Managing Member, or such other Members or officers as may from time to
time hereafter be designated by the Managing Member. Except as authorized by the Managing
Member. or as. otherwise provided herein, the other Members shall have no right Ol' authoritY to
act on ·behalf of ·the Company in connection with aoy matter.
Authority of the Managing Member. The Managing Member shall
Sec. 2.02.
have the authority, on. behalf and in the name of the Company, to take· a:IlY action or make any
decisions on behalf of the Company hereunder, to carry out any and all of the. purpo.ses of the
Company set forth in· Sec. 1.03 and to perform all acts and enter into and perform all contracts
and other undertakings which he may deem necessary or advisable or incidental thereto,
including, without lii:nitation, the. power to:

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(i)
dfrect the formulation of investment policies and strategieS for the
Funds utilizing a multi-asset, multiple portfolio approach whereby the assets of the Funds shall
from tim~ to. time be committed by the Company to investment partnerships and/or managed
accounts ("Investment Vehicles~') that invest Qr trade in Se.curities (as defined below) and that
wilt be mana~J:ed by portfolio managers having discretionary trading authority;
(ii)
determine the assets to be committed to each Investmem Vehicle,.
identify the most appropriate investmel).t ad•isors to serve as portfolio managers, and invest in
such Investment Vehicles,. which investments shall be ·subject in each case to the terms and
conditions of the resyective governing documents of such entity;
(iii)
invest the cash balances of the Funds in any money market
instruments he deems appropriate and to reinvest any income earned thereon in accordance with
the investment· programs of the Funds;
·
(iv}
borrow or raise monies; on behalf of the Funds, and, from time to
time without limitation as to amount or manner and time of repayment, issue, accept, endorse
and execute yromissory notes, dr~, bills of exchange, warrants, bonds, debentures and other
negotiable or non-negotiable instruments and evidences of indebtedness, and secure the payment
of rucb. or other obligations by mortgage upon, or hypothecation or pledge of, all or part of the
property of the Funds, whether at the time oWned or thereafter acquired, to, among other things,
meet. withdrawal requests which would otherwise result in the premature liquidation of
Investments and otherwise conduct the Funds' trading activities;

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{v)
open, maintain ru:Jd close bank accounts and brokerage· accounts in
tb.e name· of each Fund as a whole and. draw checks or· other orders for the payment of monies in
respect thereof.
{vi)
do any and all acts on behalf of the Funds, and exercise all rights
of the Funds, with respect to their interest in· any person; fii:rn,. co:rporation or other entity,
including,. without limitation;. the voting of inttrests in the Imrestment Vehicles, participation in
arrangements with creditors, the institution and settlement. or compromise of suits and
administrative proceedings and o\her like or similar matte•s;

or

(vii) organize one or more corpo,ations, partnerships
other entities
formed ·to hold record title, as nominee for the Funds, to Securities or funds attributable to the
·
Ftinds;
(viii) authorize any employee or other agent of the Compani or agents
or employees. of the Ftmds to act tor· and on behalf of the Company or the Funds in all matters
incidental to the foregoing; and
(ix)
engage personncl, whether part-time or full-time, attorneys,
consultants and independent accountants or such other persons as th.e Company may deem
necessary or advisable.

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The term "Securities", as used herein, shall be given its broadest possible meaning and shall
include, but not be limited to, capital stock; shares of beneficial interest;. partnership interes~ and
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siinilar fii:lancial instruments; interestS in real estate and· real estate related assets; bonds, notes
and debentures (whether subordinated, convertible or otherwise); currencies; interest rate,
cmrency; commodity, equity and other derivative products, including, without limitation, (i)
futures contracts (and options thereon) relating to· srock indices, clJiTencies, United State~
Government securities and securities of foreign govemments, other financial instruments and,all
other commodities, (ii) swaps, options, warrants, caps, cQllars, floors and forward :rate
agreements, (iii) spot and fonvard currency transactions and (iv) agreements relating· to or
securing such. transactions; equipment lease certificates; equipment trust certificates; loans;
accounts and notes f!'Ceivable and payable held by trade or otlier.creditors; trade acceptances;
contract and other claims; executory contracts; participations therein; murual funds; money
market fjmds; obligations of the United ·States, any state thereof, foreign governments and
instrumentalities of any of them; commercial paper; certificates of deposit; bankers' acceptances;
trust receipts and other obligations; and instruments or evidences of indebt~dness of whatever
kind o~ nature of any person, corporation, government or other entity whatsoever; whether or not
publicly traded or readily marketable.
Sec. 2.03.
Reliance bv Third Parties. Persons dealing with the Company are
entitled to rely conclusively upon the certificate of any Member to the effect that such Member is
then acting as a Managing Member, and upon the power and authority of the Managing Member
.as herein set forth.
Sec. 2.()4.
Covenant
Solicitation; Non-Competitionc.

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·I

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of

Confidentialitv;

.Non-Disparagement;

Non-

(a)
Prior to the withdrawal from the Company of a Member, and ihereafter
without limitation of time, sncli Member shall not knowingly divulge, furnish or make available
to any third person, without ihe prior -Mitten .consent ofthe Managing Member,.any trade secrets
or other confidential information· concerning the. Company, any of its Affiliates (as defined
below) or any· oftheir clients, or any busiJ:l.esS of the fOregoing, including, without limitation, (i)
information concerning the operations, systems, services, personnel and financial affairs of ihe
Company or any of its Affiliates, (ii} computer software, forms, contracts, agreements, literature
or other doctunerits designed, developed or Written by, for, with or on behalf of the Company,
any of its Affiliates or any of their clients and tili) the identity of any clients of the Company or
its Affiliates or other information about such clients or their investments and positions in any
investment fund for which. the Company or an Affiliate is a general partner (or acting· in a similar
capacity) or information about any fund advised by the Company or an Affiliate.
· Notwithstanding the foregoing, nothing .herein shall prev<lnt a Member from responding to
lawful subpoenas or court orders without the Managing M<lrober's prior v.xitten con5ent;
provided that such Member shall have given the Company prior written notice of any such
subpoena promptly following receiptthereot:
"Affiliate", when used v.1th respect to any Person, shall mean (a) any other Person
at ihe time directly or indirectly controlling, controlled by or under direct or indU:ect common
control with s.uch Person, (b) any other Person of which such Person at the time owns, or has the·
right to acquire, directly or indicectly, I 0% or more on a consolidated basis of the equity or ·
beneficial interest of such Person, (c) any oilier Person which at the time owns, or has the· right to
acquire, direct! y or indirectly, I 0% or more of any class of !lie capital stock or beneficial interest
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.of such Person, (d) any ex.ecutive officer, director, employee or other agent of such Person, and
(e). when used with respect to an individual, shall include a spouse, any ancestor or descendant,
or any. other relative {by blood, adoption or marriage), within the second degree of such
individuaL
.·~

(b)
Prior t~ the. withdrawal from the Company of a Member, and thereafter
without limliation of time, such Member shall not disparage or defame ilie Company, its
Affiliates, or current or fanner officers, directors, shareholders, partners or members of any of
tbem, .in corrununications with ·investors, clients, potential clients, competitors, the media, or
other persons \vith. wham any of the above do business or may do business;

(c)
Prior to the withdrawal from the Company of a Member, and for a period
of24 months thereafter, such Member shall not, directly or indirectly, on behalf of such Member
or any other person, (i) solicit, .induce or encourage the resignation of any Member or any
employee of the Company or its Affiliates, or hire any Member or employee who·m the Company
or its Affiliates ·employed at any time. during' the six month period preceding· the \vithdrawal of .
such Member, or (ii}. in any way interfere or attempt to interfere with the relationship between
the Company and its Affiliates and any oftheir Members or employees.

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(4)
Prior to the >vithdtawal from the Company of a Member, and for a period
of24 months thereafter, such Member shall.not, directly or indirectly, on behalf of such Member
· or any other person, solicit the business of, or provide. services for, any client of the··company or
its Affiliates; and prior to the withdrawal of a Member, and thereafter without limitation of time,
such Member shall not in any way interfere or attempt to interfere with ·theTelationship between
the Company and its-Affiliates and anY oftheir clients. Notwithstanding the foregoing, from and
after the withdra\V:al of a Member, such Member may solicit the business of, or provide services
for, such person's. parents, spouse, children, siblings, parents-in-law, children-in-law or siblings- ·
jn,...Jnw.

to

{e)
Prior the "'ithdrawal from the Compa)ly of a Member, and for. a period
of 12 months thereafter, such Member shaH nat Compete (as defined below) with the Company
or any· of the Company's Affiliates. For purposes of this Agreement, the term "Compete" shall
111ean to directly or indirectly, whether individually; as a director, partner, owner; employee,
consultant or ~gent of any business, person or entity, or in any other capacity, other than. on
behalf of the Company or an Affiliate of the Company, provide Investment management,
investment advisory or other s.ervices to any collective investment vehicle (domestic or foreign)·
that is not registered as an open-end investment company under the Investment Company Act of
1940, as amended. A Member that is subject to the 12-month non-competition provisions of this·
Sec.. 2.04(e) shall notify the Managing Member of the name an<i address of each business to
which he·provides services during such 12-month. period. Such notice must be provided promptly
follt>wing the date as of which such services commence. Not\vithstanding the. foregoing, in no
event shall EIIen Haring be deemed to have breached this Sec. 2.04(e) bY,- her engagement in the
operations of her current investment advisory business and her provision of i.nvestment advisory
services to funds of funds that are current! y her clients.
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Sec. 2.115.

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·Exculpation.

(a)
No Member or Affiliate (collectively, the "Indemnified Parties") shall be
liable to any Member or the Company for any acts or omissions, unless such acts or omissions
arise out of; or are attributable to, the gra:>s negligence, willful misconduct or bad faith of the
Indemnified Party; nor shalllUiy Indemnified .Party be liable to any Member or the Company for
any action or inaction of any broker or other agent of the· Company, pro.Yided that such broker or
agent was· selected, engaged qr retained by such· Indemnified Party in accordance with the
s.tandard· of care set forth above. Any Indemnified Party may consult with counsel, accountants,
i;westment bankers, financial adVisers, appraisers and other specialized, reputable, professional
consultants or advis.ers in respecr.of Company affairs and be fully protected and justified in any
action. or inaction which is taken in accordance with the advice. or opinion of such persons, .
provided that they shall have heeh selected in accordance with the standard of care set forth.
above.
Notwithstan\fing any of the· foregoing to· the contrary, the provisions of
(b)
this Sec, 2.05 shall not be construed so as to relieve· (or attempt to relieve) the Indemnified
Parties of any liability to the extent (b.ut only tQ the extent) that such liability may ilot be waived,
modified or.limited·nnder applicable law, but sha.ll be construed so as. to effectuate the provisions
of this Sec. 2.05 to the fullest extent permitted by law..
Sec. 2:06.

(

Indemnification.

(a)
Each Indemnified Party shall,. in accordance with this Sec. 2.06, be
indemnified· and held hinmless by the Company from and: against any and alL losses, claims,
damages, liabilities, expenses (including legal and other professional fees and disbursements),
. judgments, fines~ settlemento.;~ and other amounts (collectively~ the· "Ind~mni:fication
Obligations") arising. from any and all claims, demands; actions, suits ot proceedings. (whether
civil, criminal, administrative or investigative), actual or threatened, in which such Indemnified
Party may be involved, as a party· or otherwise, by reason of such person's service to or on behalf
of, or management of the affilirs of, the Company, or rendering of advice or consultation with
respect thereto,. or which relate to the Company, its properties,. business or- affairs; whether 9r not
the Indemnified Party·cmitinues to b·e. such at the time any such Indemnification· Obligation is
paid or in.curred, pro•ided that such Indemnification Obligation resulted fro.m action or inaction
of such Indemnified Party that did not constitute gross negligence, willful misconduct or bad
faith; The Company shall also indemnify and hold harmless an Indemnified P,.rty from and
against any Indemnification Obligation suffered or sustained by such Indemnified Party by
reason of any action or inaction of any brolcer or other .agent of the Company; provided.
however, that such broker or agent was selected, engaged or retained· by such Indemnified Party
in. accordance with the standard of care set furth above. The· termination of a proceeding by
judgment, order, settlement, conviction. or upon a plea of nolo contendere, or its equivalent, shall
not,. of itself, create a presumption that such Indemnification Obligation resulted from the gross
negligence, willful misconduct or bad faith of such Indemnified P;u-tyc E'<penses (including legal
and other professional fees and disbursements) incurred in any proc.eeding will be paid by the
Company In advance of the final diSposition of such proceeding upon receipt of an undertaking
by or on behalf of such Indemnified Party to repay such amount if it shall ultimately be

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determined that such Indemnified Party is nat entitled to be indemnified by the Company as
authorized hereunder.
(b)

The indemnification provided by this Sec. 2.06 shall not be deemed to be

exclu~ive of any other rights to which each Jndemni:fied. Party may be entitled under· any

agreement; or as a matter of law, or otherwise, .both as to action in such Jndenmified Party's
official capacity and to action in another capacity, and shalr continue .S to. such. Indemnified
Part¥· who has ceased to have an official capacity for acts or omissions during such official
capacity or otherwise when acting, at the request ofthe· Managing Member and shall inure.to the
benefit of the heirs, successors and administrators of such Indemnified Party.
(c)
The Managing Member shall have the power to purchase and maintain
insurance on. behalf of its.elf.and each Indemnified Party, arthe expense of the Company, against
any liability which may b.e asserted against or incurred by them in any sue!). capacity, whethe.r or
not the Company wonid have the po'Mlt to indenmify the Indemnified Parties against such
liability under the provisions of this Agreement.
(d)
Notwithstanding any of the foregoing to the contrary, tlie provisions of
this Sec. 2·. 06 shall not be construed so as to provide for the indemnification of an Ihdemnified
Party for any liability to the extent (but only to the extent) that such indeninification would be in
viola:tion of applicable law or that such. liability may· not be waived, modified or limited under
applicable law, .but shall be construed so· as to effectuate the provisions of this Sec. 2.06. to the
fullest. extent pennitted by law.

(

Sec. 2.07..
(a)

Other Matters Concerning the Meinbersc

Each Member may rely, and shall be protected in acting or refraining from

acting, upon any resolution, certificate, statement,.. instrument: opinion,. report, notice,.

rcques.t~

consent, order, bond, debenture or other paper or document believed by him/.ller to be genuine
and to have been signed or presented by the.proper party or parties.
(b)
In the sole. discretion. of l:he Managing Member, ilie Company· may enter
into supplementary agreements with one or more Members regarding· the rigb.ts and obligatiGns
of such Member( s) witb. respect to the Company. Among other things, such agreements may
provide for allocations and distributions to. a Member, including, but not limited to, allocations
and distn'butions to such Member after such Member has become a Reduced Jnterest Member in
accordance with· Sec. 6.01 (each, a ;,Supplementary Agreement"). The Members acknowledge
and agree that, in the. event of any conflict between the terms' of such Supplementary Agreements
and the terms of this. Agreement with respect to the rights and. obligations of such signatory
Members, the terms of such Supplementary Agreements shall control.
Sec. 2.08.
Expenses, Except as pro¥ided in Sees .. 3.02(c) or 3.05(c) 1\ereof;
the Company shall be responsible for payin~ and the Managing Memb~r shall pay directly out of
Company funds, all reasonable. costs and expenses incurred in connection with the business of
the Company, including, without limitation; ·any ant-of-pocket expenses of the Managing
Member incurred fn connection with the business of the Company, liability and other insurance

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premiums, expenses incurred in the preparation of reports to the Mernber and any legal,
accounting and other professional fees ami expenses.

ARTICLE III
Capital Accounts
Sec. .3.01.
Definitions. For purposes- or this Agteement, the following tenns
shall be defined as set.forth herein:
"Accounting Period" means a period (i) the ftrst day of which is (A) the
(a)
first business day of each calendar quarter, (B) the date on which there are contributions to the
capital of the Company or any material amount is credited to a Capital Account (detennined as
provided herein) other than on a illQ rata basis, (C) the first day of any accounting period of any
.Fund or (D) such other date deemed appropriate by t):le Managing Member, and (ii) the last day
of which is (A) the day prior to the cominencement of any Accounting Period, (B) the date on
which there are withdrawals or distributions from the capital of the Company or any material
arnount.is, debited <!gainst, any Capital Account other than on a !lr.Q.rata basis, or (C) such other
date deemed appropriate by the Managing Member.

(b)

(

"Co<;le" means the Internal Revenue Code of 1986, as amended.

"Incentive A)ioeation" means any perfonnance-based allocation of net
(c)
capital appreciation or net profits from the Funds to the· Company pursuant to the fund
Agreements, out shall not include allocations of net capital appreciation or net ·profits made· to
the Company by virtue ofits capital invested in a Fund.

(d)
The occurrence of a 11Forfeiting Event'' \\oith. respect to a particular
Member shall mean that such Member: (i) has commi~ed.- an act of fraud, dishonesty,
misrepresentation ot breach of trust; (ii) has been conviCted. of a felony or any offense involving
moral turpitude; (iii}has been found by-any U.S. regulatory body or self-regulatory organization
t.o have,. or )!RJ; ente_red into a consent decree determining that he/she has, violated any U.S.
reg)liatory requirement or a rule. of a selfi:egulatory organization; (iv) has, in the capacity of au
executive or employee of the· Company or an Affiliate, committed an act constituting gross
negligence l'>t willful misconduct or otherwise has had hislher employment with or ownership
interest in an Affiliiite terminated for ca)lse; (v) has violated in any material respect this
Agreement or any other ilgreement with respect to the Company or its Affiliates; or· (vi) has
voluntarily Y..itbdrawn from the Company, other than pursuant to Sec. 6.0 I (a)
(e)
"Fund Net losses'' means, Y..ith respect to any Accounting Period, the
arnollllt of loss debited to the capital account of the Company in a Fund pursuant to a Fund
Agreement for such Accounting l'eriod in respect of its capital invested in. such Fund.

(f)
"Fund Net Profits" means, with. respect to any Accounting Period, the
amount of income or gain credited to the capital account of the Company in a Fund pursuant to
the FUild Agreement for such Accounting Period in respect of its capital invested in such Fund.

(
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(g)
"Net Income" or "Net Losses" means, with respect to any Accounting
Period, the' sum. of: (i) Fund Net Profits or Fund Net Losses for such period; (ii) plus the
Operating Net Profits or minus the Operating Net Losses for such period; and (iii) plus the
·
Incentive Allocation for such period.
(h)

"Operating Net Profits!' or "Operating Net Losses" means, with respect to

any A.ccounting Period, the ta.Xable income or tax loss of the· Company for such. period for

Federal Jnc:ome ta.x purposes, increased by the amount of any tax-exempt income of the
Company during such period and decreased by the amount of any Code Section 705(a)(2)(B}
expenditures (within the meaning of Treasury Regulation Section 1.704-l(b)(2)(iv)(i)) of the
Company; provided, however, that Operating Net Profits or Operating Net Losses shall be
computed without regard to the amount of any items of income, gain; loss or deduction that are
attributable, to Incentive Allocations, Fund Net Profits or Fund Net Losses. In the· event that the
Capital Accounts are adjusted pursuant to Sec, 3.03(b) hereof, the Operating Net Profits or
Operating Net Losses. of the Company (and the constituent items of income, gain, kiss and
deduction) realized th.ereafter shall be computed in accordance with the principles of Treasury
Regulation Section 1.704-1 (b)(2)(i:v)(g) ...
(i)
"Section 704(c) Property" means any Company property that is revalued
P,urSUailt to· Sec. 3.03(b) hereof if the fair market value of such property differs from its adjusted
qa~is

as of the date of such revaluation.
Sec.

(

3~02.

Capital Contributions. ·

Each Member has made (or, simultaneously herewith, :shall make) a
(a)
capital contribution to the Company in the amount.set.forth on Schedule A hereto. In addition,
the Managing Member may require each Member (including a Reduced Interest Member) to
make an additional capital contn'bution in the event that the Company is required to eoutribtite
addltlol;lH) capital to a Fund· in order to maintain the lesser of $500,000 or :2% of the aggregate
capital accounts of such Fund.' In such event, no Member shall be required to make an additional
c.apital contribution..ih, an amount greater than such Member's. !lffi. raia share (based on lnc.entive
Percentages) of the Company's reqni~ed contribution to· such Fund.
(b)
The Members may make additional capital contributions to the Company
at the times and in the aggregate amounts permitted by the Managing Member in his sole
discretion.
All capital contributions to the Company under this Sec. 3.. 02 shall be
.
(c)
credited to the Members' relevant Investment- Capital Accounts (as defined in Sec. 3.03 (a)(i)
below) and contributed to such Fund as shall be agreed to by the Managing Member and the
Member making the contribution; provided, however, t.l:tat any amounts desigrated by the
Managing Member, in his sole discretion, to. be used for expenses of the Company, or such
amounts· as. the. Managing Member and the Member making the contribution agree, shall be used
for investments other than as part of the Company's capital contributions to the Funds shall be
credited to the Members' Operating Capitai Accounts (as defined· in Sec. 3.03(a)(ii) below).

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(d)
A l'.·fember shall not have any obligation to .the Company or to any other
Member _to re•'tore any negative balance in the Capital Accounts of such Member_ No interest
shall be paid. by the Company on any capital contributions.
Sec.3.03.

(

(

Capital Accounts.

(i)
Investment Capital Accounts. There shall be established for each ·
(a)
Member on the books of the Company a sepatate investment capital account for each Member
who maRes a capital contribution to .the Company which is then contributed to a Fund or who is
entitled to- receive an Incentive Allocation Ylith respect to such Fund pursuant to Sec. 3.05(b)
llereof(eacb, an "Investment Capital Account"). Each separate Investment Capital Account shall
be maintained and adjusted as provided in Sec. 3.02(c) and 'this Sec. 3.03. Each separate
Investment Capital Account of a .Merober shall with respect to a Fund be credited with (A) the
amount of all cash capital contributions by suth Member to the· Company for recontribution to
the particular Fund and (B) the fair market value of any property contributed by such Member·to
the Company· for recontribution io the. particular Fund (net of any liabilities secured by such
property that ·the· Company is c-onsidered to assume. or·take subject to under Section 754. of the
··code), eXl:ept -to the extent the am9unts in (A) or (B} are credited to the Operating Capital
Accounts. of the Members pursuant to· Sec.. 3.02(c). The Investment Capital Accmmt of a
Member shall. be Increased. by any amounts credited to such. Member's Investment ~apital
Account with respect to the particular Fund pUJ:sirant to S~cs. 3~05(8.) and 3.05(b), and decreased
by (A). any amount debited to such )vfember's Investment Capital Account with respect to a
particular Fund pursuant to Sec,. 3.Q5(a); {!3) the amount of any cash distributed to such Member
from such- Investment Capital Account ·pursuant tl) this Agreement and (C) the fair market value
of any asset distributed in kind to such Membet from such particular Investment Capital Account
(net of any liabilities secured by such asset that such Member is considered to assume. or take
subject to under Section 752 of' the Code). Tbe Investment Capital Account of a Member also
shall be adjusted appropriately to reflect any· other adjustment required pursuant to Treasury
Regulation Sections 1.70.){-l or 1.704-2, or, in the sole dis.cretion·ofthe Managiilg.Membexo, Sec.
3.06 hereof.
Operating Capital Account. -There ~hall be established for each
(ii)
Member on the books of the Company an operating capital account (an "Operating Capital
Account"), whicl! shall he maintained and. adjusted as provided in. Sec. 3.02(c) arid this Sec. 3.03,
The Operating Capitar Account of a Member shall be credited with the amount ofall cash capital
contributions by such Member to the Com_pany which are credited. to the Member's Operating
Capital Account pursuant to Sec. 3 .02(c). The Operating Capital Account of a Member Shall be
increased by any amounts credited to such Member's Operating Capital Account pursuant to Sec.
3.05(c) or 3.06 (to the extent not taken into account pursuant to Sec. 3.03(a)(iJ. hereof), and
decreased by (A} any amount debited to such Member's. Operating Capital Account pursuant to
Sec. 3c05(c)or 3.06 (to the extent not taken into account pursuant to sec. 3.03(a)(i) hereof), (B)
the amount of any cash distributed to such Member from his/her Operating_ Capital Account
pursuant to this Agreement and (C) the fair market value of any asset distributed In kind to such
Member from such Member's Operating Capital Account (net of any liabilities secured by such
asset that such Member .is considered to assume ot take subject to Wider Section 752 of the
Code).

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(b)
Upon the occurrence of any event specified in Treasury Regulation
Section J.704-1(b)(2)(iv)(f) or as authorized by such Section v.ith respect to securities readily
tradable on an established securities .market, the Managing Member may cause the Investment
Capital Accounts or Operating Capital Accounts of the Members to be adjusted to reflect the fair
,narket value. of the Company's assets at such time (as determined by the Managing Member in
hi> sole discretion) in accordance with sue!> Regulation.
Sec. 3.04.

Investment

Percentages·:

Incentive

Percentages:

Operating

Percentaees.
(a)
An "Investment Percentage" shall be deiermined for each. Investment
Capital AccoUI1t v.-itb. respect to a Fund for each Member (including a Reduced. Interest Member)
for each fiscal year (or other Accounting Period) by dividing the amount of each. Member's
Investment Capital Account with respect to such Fund as ofthe beginning of such period by the
sum of the Investment Capital Accounts of all Members as ofthe beginning of such period with
zespect to ~uch F\liJd. NotWithstanding the foregoing; for purj>oses of determining the allocation
of Fund Net Profits or Fund Net Losses under Sec. 3.05(a) as of the last day. of an Accounting
Period· with respect to a particular Fund, any Incentive· Allocation which has been credited to a
Member's Investment Capital Account under Sec; 3.05(\l) as of the end of the prior Accounting
Period shall be included in his/her Investment Capital Account witli respect to a particular Fund
only if such amount has been reinvested in the Fund by the Company on behalf of the Member as
of the beginning of the current A-ccounting Period. The stnn of rl1e Investment Per.centagcs with
respect ·to each Fund sliall equal roo· percent.

(

(b)
The "Incentive Percentages" of:. (i) the Class A Mcmbei'S shall be as set
:forth in the Schetlule and .may be modified by the Special Class A Member at any time and from
time to time. during. a fiscal year or; \vith respect to anyjiscal year, wfthin.45 days after the end
of such fiscal year; provided~ however. that the Incentive Percentage with respect to each Fund
of.any Class A .Member whose .interest in the Company is te!lllinated in accordance with Sec. ·
6.01 shall lle reallocated,
the sole discretion of the Special Class A Member, among any
remaiiJ.ing Gl.ass A Members or, if no Class A Members remain in the Company, among tlie
remaining Class B Members in the sole discretion of the Special Class B Member; provided,
further, that any such reallocations shall be subject to the continUing interest of any Reduc;ed
Interest Class A Member (as defined in Section 6.01(!)) pursuant to a Supplementary Agreement
in accordance with Sec. 6.02(a); and (ii) the Class. B Members shall be as set (orth in the
Schedule .and may be modified by the Special Class B Member at ~y time and from time to time
during. a fiscal year or, with respect to any .fiscal year, within 45 days after the end of such fiscal
yeai; provided, however, that the Iricentive Percentage with respect each Fund. of any Class B
Member· ·whose interest in the Company is tenninated in accordance with Sec. 6.01 shall be
reallocated, in the sole discretion of the Special Class B Member, among. any remaining Class B
Members or, if no Class B Members remain in the Company, among· .the remaining Class A
Members in the sole discretion of the Special Class A Member; provided. further, that any such
.reallocations shall be subject to the continuing futerest of any Reduced Interest Class B Member
(as, defined in Section 6.01(£)) pursuant to a Supplementary Agreement in accordmJce with Sec.
6.02(a). The sum of the Incentive Percentages of all of the Members with respect to each Fund
shall equal I 00 percent.

m

!o

(

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(

(c)
The "Operating Percentages" of: (i) the Class A Members shall be as set
forth in the Schedule and may be modified by the Special Class A Member at any time and from
time to time dpring a fiscal year or, with respect to any fiscal year, within 45 days after the end
of such fiscal year; provided, however, that the Operating Percentage of any Class A Member
whose interest in the Company is terminated in accordance with Sec. 6.01 shall be reallocated, in
the sole discretion o{the Special Class' A Member, among any remaining Class. A Members or, if
. no Class A MemberHemain in the· Company, among the remaining Class B Members in the-. sole
discretion of the Special Class B Member; provided, further. tliat. any such reallocations shall be
subject to the continuing interest of any Reduced Interest Class A Member pursuant to a
Supplementary Agreement in accordance -.vith Sec. 6.02(a); and ('ri) the Class B Members shall
.be as ser forth in .the Schedule and may be modified by the Special C)ass B Member at any time
and. from time to time dilring a fiscal year or, with respect to any fiscal year, within 45 days after
the end of such ·fiscal year; provided, howevet. that the. Operating Percentage of any Class B
Member whose interest in the Company is tenninated in accordance with Sec. 6.01 shan· be
reallocated, in the sole discretion of the. Special· Class B Member, among any remaining Class· B
Members or, if no Class B Members remain in the Company, among the. remaining Class A
Members in the sole discretion. of the Special Class A Member; provided, further, that any such
reallocations shall be subject to the continuing interest of any Rednced Interest Class B Member
pursuant to a Supplementary Agreement in accordance with Sec. 6.02(a). Tlie sum of the
Operating: Percenll!ges of al.l. ofthe Mem!Jers shill! equal 100 percent.
·
Sec. 3.05.
General Allocations. As· of the close of business on the last day of
the relevant Accowtting Periad, subject to Sec. 3.06, allpcations to the Members shall be made as
follows:
·
(a)
Fund Net Profits and Fund Net Losses shall be credited or debited to the
applicable Investment Capitar Accounts. of all Members in accordance with their respective
Investment Percentages. for ;;.uch FUnd as of such date.

(b)
Any Incentive Allocations occurring during or as of the end t>f an
Accounting Period shall be. credited to· the applicable Investment Capital Acco.unts of the
Members. in accordance with their respective Incentive Percentages for such Fund as of such
date.
(c)
Any Operating Net Profits or Operating Net Losses for each Accoilnting
Peribd shall be credited or debited to the Operating Capital Acc.ounts of the Members in
accordance with their Opernting. Percentages ·as .of such date. Notwithstanding. the foregoing, if
any Member vays an ·amowtt of expenses of tlie Company· which is disproportionate to his!her
Operating. Percentage, such expense shall be specifically allocated to such Member and debite.d
solely to snch Member's Operating Capil:af Account.

(.

(d)
In the event the Managing Member detetmines that any security position
or·se.ciu:ity positions, or class of security positions .ofthe·Company are inappropriate (for tax or
regulatory reasons, or any other reasons as· to which the Managing Member and any oiher
Member or Members agree) for any Member, the Managing Member may determine that such
Member (the ''Nonqualifying Member") shall not participate in the income, gains, losses or
expenses arising from such security positions, and shall so indicate upon the books of the
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Company. In such event .the allocations of gains and losses among the Members, as provi<!ed in

this Article III,. shall be adjusted so that the Capital Accounts of the Nonqualifying Members are
neither credited with any gains or income nor debited with any losses or expenses, relating to
such security positions, and such gains, income, losses and expenses shall be allocated among
the other Members in the proportion oftheir respective Operating Percentages for such fiscal
yeat,. and the Managing Member· shall make such qther adjustments (to take into account that
Nonqualifying Members do not participate in certain. security positions) regarding the allocation
·of pr.ofits, gains and losses· among the Members for such fiscal year, including taxes thereon
pursuant to Sec. 3.08, as the Managing Member determines to be equitable.
Sec. 3.06.
Special Allocations. (a) Section 7041b) Allocation Limitations.
Notwithstanding Sec. 3.05, sp.ecial allocations of Net Income, Net Losses or specific items of
income, gain, loss or deduction may be required.tbr any fiscal year ( m: o.ther Accounting. Period)
as follows:·
(i)
Minimum Gain Chargeback. The .Company shall allocate items of
income and gain among the Members. at such times and in such amounts as necessary to satisfy
the minimum gain chargeback. requirements of Treasury Regulation Se.ctions 1.704-2(f) and
!.704-2(j){4).

(ii)
Qualified Income Offset. The Company shall specially allocate
items ofincome and.gain'when and tathe extent required to satisfy the "qualified income offset"
requirement within the meanfug o;fTreasury Regulation Section 1.704-1 (b)(2)(ii)(d).

(

'·--::''

(b)

Allocations in:Liguidation.

.

(i)
Notwithstanding any provision in Sec. 3.05' or this Sec. 3.06 (other
than 3.06(b)(ii)) to the contrary, in the event that the Company sells or otherwise disposes of all
its noncash assets or any othet event occurs that will lead to a .liquidation the Company, then
Net Income and Net Losses {and, if necessary, the constituent items of income; gain, loss and
deduction) Sball. be specially· allocated among the Members as required. to cause liquidating
distributions pttrsuant tu Sec. 4.04(c) to be eqtiival~nt io the distributions that would have
.occurred.had Sees. 4.04(a) and.4.04(1)}been the operative provisions.

of

(ii}
Upon the sal.e of all or substantially all of the assets of the
Company, the Managing Member shall specially allocate proceeds of such sale among the
Members (including. :Reduced Interest Members) in accordance with any separate written
agreement betWeen· t]Je ·company and such Member or, to the extent there is no such agreement
with respectto a Member, in the sole discretion of the Managfug Member.
(C")
Adjustment of Allocations. In the everit that the Managing Member
reasonallly detezmines that the allocations otherwise required pursuant to Sec. 3.05 or this Sec.
3.06 would not properly reflect the economic <irrangement of the Members or would otherwise
cause any inequitable or onerous result for any Member, then, notwithstanding any provision .in
this Agreement to the contrary, the Managing Member may adjust such. allocations in such
manner as the Managfug Member reasonably determines·to be required tQ prevent such result

\
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(d)
Capital Accounts. The Managing Member shall equitably deteonine
whether allocaiions pursuant to this Sec. 3..06 shall be made to a Member's separate Investment
Capital Accounts Or Operating Capital Account.
Sec. 3.07.
Liabilities. Liabilities shall be determined in accordance with
generally accepted: accounting ptinciples applied on a consistent basis;. provided. however, that
the Managing Member, in his .sole discretion, may provide reserves for estimated acctued
expenses, liabilities or contingencies," whether or not in accordance with generally accepted
accounting principles.
Sec. 3.08.
Allocations ofNet Income and Net Losses for Federal IncomeTa-<
Puroose.<. The Company's ordinary income and losses, capital gains and losses and other· items
as determined .for Federal income. tax purposes (and each item of income, gain, loss or deduction
entering into the. computation thereof) shall be allocated to the Members in (he.sa,me·proportions
as the corresponding "book" items· are. allocated pursuant to Sees. 3.05 and 3.06.
Notwithstanding-the foregoing sentence, Federal income tax items relating to any Section 704(c)
Property shall be allocated among the Members in accordance with the principles of Section
704(c). of the Code and Treasury Regulation Sections L704-!(b)(2)(iv)(f) and (g), .1.704I{b)(4)(i) and L704-3(e) to tiuce into account the difference between the fair market value and
the trot basis of such Section 704(c) Property as of the date of its revaluation. pursuant to Sec.
3.03{b) hereof or its-contribution to the Company. Items.descnoed In. this Sec. 3.08 shall-neither
be credited nor· charged ·to. ihe Members' ·Investment Capital Accounts pr Operating Capital
Accounts.

(

If the Company realizes capital gains (including short-term capital gain) for
Federal. income: tax purposes ("gains'') for any fiscal year during or as .ofthe end of which .one or
more p·ositive Basis Members (as hereinafter defined) withdraw from th.e Company pursuant to
this Agreement, the Mannging Member may elect to allocate such· gains as ·follows: (i) to
allocate such gains among such Positive Basis Members, P!Q· rata ~proportion to the respective
Positive Basis (as hereinafter· defined) of each such .Positive. Basis Member, until either the full
am.o.unt of such gains. shall have. been so allocated. or the Positive Basis of each such Positive
Basis Member shaH have been eliminated, and (ii) to allocate any galns not so allocated to
Positive Basis Members to the other Members· in: such manner· as shall equitably reflect the
amounts allocated: to such ·Members' Investment Capital Accounts and Operating_ Capital
Accounts purswmt to Sees. 3.05 and 3.06.

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 the total of his/her Investment
Capital Accounts and Operating Capital Account as of such tinie exceeds his/her "adjusted tax
basis", for Federal income ta,'( purposes, in his/her 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 withqut regard to
such Member's share of liabilities of the Company under Section 752 of the Code), and .(ii) the
term "Positive Basis Member". shall mean any Member who v,ithdraws from the Company and
wbo has a Positive Basis aS of the effective date of his/her withdrawal, but such Member shall
cease fo be a Positive Basis Member at su·ch time as he shall have received allocations purSuant

<.
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to clause (i) of the preceding paragraph equal to. his/her Positive Basis as of the effective date of
hisiher withdrawal.
Sec. 3 .09.
. Determination bv the Matla!!ine .Member of Certain Matters. All
matters concerning. valuations, the application of Sees. 3.11 and 9.07 and the allocation of
ti)Xable income, deductions,. credits, Net Income and Net Losses among the Members, including
ta.xes thereon and accounting· procedures, not expressly provided for by the terms of this
Agreement, shall be equitably determined in good. faith by the Managing Member; whose
determination shall be final, conclusive and binding as to all of the Members.
Sec. 3.10.
Adjustments by the Manal!illf! Member to Take Account oJ1nterim
Year Bvents. fu the event that a Member shall be admitted to, or shall withdraw from, the
Company other·than at the end of the. Company's fL,cal year, allocations among the Members and
accounting pr.o.cedures shall be equitably determined in good faith by ·the Managing. Member,
whose determination shall be final, conclusive and binding as to all ofthe Members.
Sec, 3.11.
Investment in Additional Funds, fu the event that the Company
becomes a general partner in· one or more investment ·funds. in addition to Fund I and Fund )!~. the
Managing Member shall apply the· principles ofArticle Ill, Sec. 4.03 and Sec. 4.04(a), insofar as
such priilciples affect Investment Capiral Accounts (including' withdrawals mid distributions
therefrom),. Investment Percentages and Incentive Allocations, on a separate basis with respect to
each investment fund in wbich·the Company is a general partner..

ARTICLE IV
Loans to MemberS; Compensation of the MemberS;. Withdrawals;
Distributions; Limitations on Distributions and. Withdra\\;,ls
SecA.Ol.
Loans to· Members. Without the consent of the Managing
Membm;,. which consent may· be withheld in his sole discretion, the Company shall not make
loans to any Member. If the Managing Member decides to make· a loan to a Member, and the
proceeds ibr such loan are ma:de available fl:om a withdrawal of funds from a Ftmd, such
Member's Investment Capital Account sball be re.duced by tbe outstanding amount of the loan.
Sec. 4"02.
Compensation of tbe Members. W:itbout the consent of the
Managing Member, the Company shall not pay a salary or other compensation to any Member
for seryices rendered by such Member to the Co~pany.

(

Sec. 4.03.
Withdrawals. Eltcept as provided in this Sec. 4.03, without the
·consent of the .1Y1anaging Member, no Member may make withdrawals from his/her Investment
Capital Accounts or Operating Capital Account. Each Member shall. be entitled to give notice to
the Managing Member to request the· withdntwal of a portion of his/her Investment Capital
Accounts. Upon receipt of SJ.!Ch notice and subject t!J the limitations on withdrawal in Sec. 4.05,
to the extent such amolint is invested in a Fund, the Managing Member shall use his best efforts
to cause such amotmt to be withdrawn from the appropriate Fund (at such times and on such
tenns, as such withdrawals are permitted under the Fund Agreement), and distributed to such
Member. Any amount so distributed to such Member shall reduce his/her Investment Capital
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Account !'rom which such amounts are withdrawn as oC the date of such wiihdrawal. The
Members acknowledge that the ability to make withdrawals from a Fund may be limited by
notice provisions and limitations on liquidity set forth in a Fund Agreement.
Distributions. Except to the extent provided in ·Sec. 4.03,
Sec. 4.04.
distribUtions shall b~ made to the Members at the times and in ihe amounts detemrined by the
Managing Member. The Managing Member shall determine whether amounts to. be distributed
are· attributable to a Member's Investment Capital' Accounts· or Operating Capital Account. Such
di'stributions shall be made as follows:·
(a)
All amounts available for distribution which are attributable to amounts in
the Members' Investment Capital Accounts. shall be. distributed to the Members
(i) . first, in the amounts available for distribution pursuant to ·requests
to withdraw amounts made· under Sec. 4.03 hereof; and
("ri)
then, in accordance. with, and in proportion to, their respective
separate Investment Capital Accounts after adjustment for distributions made ·pursuant to
Sec. 4.04(a}(i) hereof unless theo Managing Member· determines that an amount to be
distributed pursuant to ihis Sec .. 4.04(a)(ii) is attributable to a ·particular Fund in which
. case such amount shall be· distributed. .in accordance with, · aod in proportion to, the
Members' separate Investment Capital Accounts with respect to such Fund .

(.._

.(b)
All other amounts available for distribution which are attributable to
aniounts· .in the Members' Operating Capital Accounts shall be. distributed to the Members in
accordance wi¢, and in proportion to, their respective Operating Capital Accounts.
(c)
Notwithstanding ;II!y other provision in this Sec. 4.04, all amounts
distributed in connection with a liquidation of the Company o• the sale or other disposition of all
or slibstimtially all oftlie. assets· of the Company that leads to a liquidation of the Company shall
be distributed to the Members in accordance with,· and in proportion to, their respective
Investment Capital Account and Operating Capital Account balances;. as ad].usted for all
Company. operations up to and including the date of such distribution.
(d)
At the sole discretion of the Managing Member, the Company may
distrib_ute any assets in.kihd. If cash and property are to be distributed in. kind simultaneously,
'the Company shall distribute such cash and property in kind fu the .same proportion to each
Member, unless otherwise determined by·!he Managing Member. 'For purposes of detennihing
amounts distributable to the.respective M:embers 'under this· Sec. '4.04(d), any property to be
di~tributed ih kind shall have the value· assigned to such property by the Managing Member, and
the amount of income or loss that would have been.realized.had such assets been s.old at their fair
market values shall be. allocated according to the Members' Investment. Percentages or Operating·
Percentages, as applicable (or
any- other manner deemed appropriate by the Managing
Member) to the applicable Capital Accounts af the Members (as determined by the Mnnaging
Member) pursuant to.Secs, 3.05 and 3.06 immediately prior to such distribution.

m

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Sec. 4.05.
Limitation on Distributions and Withdrawals. Distributions and
pemiitted withdrawals are subject to the provision by :ihe Company for (i) all Company liabilities
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in accordance with the Delaware· Act a.,d (ii) reserves for liabilities taken in accordance with
Sec. 3.07 hereof. The unused portion of any cash reserve shall be distributed, with interest at the
prevailing· savings bank rate for unrestricted d~osits from time to time in effect in New York,
New York, as· determined by the Managing Member, ·atrer the Managing Member has
determined thqt the need theretor shall have ceased.
ARTICLEV
Admission ofNew Members

Sec. 5.01..
Admission of Additional or Substitute Members. The Managing
Member may at any time admit one or more new Members, subject to the condition that each
such· new Member shall execute an appropriate supplement to this Agreement pursuant to which.
he/she agrees to be bound by the. terms and provisions hereof, ·The name and residence address
.of each new Member admitted to the Company under this Sec. 5.01 shall be reflected on
Schedule A
of the effective dine of his/her 'l!lrilission, and each new Member shall be
·designated ·thereon as a Class A Member or a Class B Member.. The Managing Member shall
admit a. Related Trust. of any Member as a nQn-voting Non-Managing Member in connection
with an assigrunent referred to in Sec. 1.07. Admission ofa new Member shall not be a cause for
dissoli:!tion of the Company.

as

ARTICLE VI
WithdraY!al, Reduced Interest, Death, Disability; Adjudication oflncompetency,
Dissolution or Bankruptcy

(

Sec·. 6.01.

Wlth'ilrawal. Reduced Interest Death, Disabilitv. Adjudication of

Incompetencv. Dissolution or Baukmptcv of a Member.

(a)
Except as otherwise provided in. this Sec. 6.01, no Member may
voluntarily withdraw 'Or resign from the Company. Subject to Sections 6.0l{f) and 6.03 hereof, a.
Member, together witll.his/lier Relll.ted. Trust, may c 0mple.tely withdraw ftom the Company or, if
S!lch Member has entered into a Supplementary Agreement with the Company providing for
continuing allocations and distributions, elect to become a reduced interest Member (a "Reduced
Interest Member"): (i) at the end of any fiscal ~ein- of the Company, Upon 45 days' prior Written
notice to the Mimaging Member; or (ii) at
time with the consent of the Managing Member,
which consent may be withheld in his sole discretion. Withdrawals, as distinct from an election
to become a Reduced Interest Mem):ler, pursllllllt to Sees. 6.0!(a)(i) or 6~0l(a)(ii) are hereinafter
·
referred' to as "Voluntary Withdrawals."

any

\.

."ulyMember, together with his/her Related Trust, may b!l required: (i) to
(b)
withdraw immediately from the Company, upon written notice from the· Managing Member, at
any time for any reason or no reason, including, without limitation, upon the occurrence of a
Forfeiting Event; or (ii) if such Member has entered into a· Supplementary Agreement with the
Company providing for continuing allocations and distributions, to become a Reduced Interest
Member, upon .notice from the Managing_ Member, at any· time for any reason or no reason,
except if a Forfeiting Event has occurred with respect to such Member.
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(c)
ln ilie event of the death, adjudication of incompetency, dissolution or
bankruptcy. of a Member (each, a "conversion event"), the interest of such Member, together with
the interest of his/her Relat~d Trust; shall continue at the risk of the Compa,ny business until the
last day of the ·fiscal year in which such event occurs or,. if earlier, the temrinaclon of ·the
Company, as of which date the. Member and his/her Related Trust shall be deemed: withdrawn
from the Company· for purposes of this. $ec. 6.01 ;. provided, however, that if such Member has
entered' into a Supplementary· Agreement with the Company providing for continuing. allocations
and. distributions and the Compa,ny will continue after the last day of such fiscal year, such
Member, together. with his/her Related Trust, shall become a Reduced Interest Meinber effective
as of the date of such con¥ersiiln. event. For puxposes ·of this. Agreement, a reference to a
"Member" who has died, been. adjudicated incompetent,. dissolved or bec.ome bankrupt shail be
constrUed to include such Member's estate or other remaining legal interest, unless otherwise
provided herein.

If a Member shall become disabled, and sucl:r disability shall continue for a period
of six consecutive months, the Managing Member (or, if the disabled Member is the Managing
Member, the remaining· Members). may require such Member, together wit.h his/her Related
Trust, to·withdraw-:from·the Company as of the last day ofthe.fiscal year in which the sL'<:•month
period shall expire, unless such Member has entered into a .Supplementary Agreement with the
Company pro:viding for continuing allocations. and distributions, in which case the Managing
MeJJi.ber !1\aY require such Member to become a Reduced: I:nterest Membe.r, upon notice from the
Managing Meniber, effective as of such. dat.e. For puxposcs of this Sec 6.01, a ;Member is
"disabled" if because. of disease or injury ·such Member is rendered unable to perform his/her
duties under this Agreement.
(d)
Upon the withdrawal, death, disaJ>ility, adjudication of incompetency,
dissolution or bankruptcy of the· last Managing Member (including if, as a resrilt of such event;
Such· Managing Member bec<_>~es a Reduced Intere~t Member)l the Company shall be wound up

and tenuinated .in accordance with s·ec. 7.02,. Ut!less, within ·60 days after such event, remaining
Members· representing a majority of the remaining Operating Percentages of the Coutpany agree
in writing to continue the bi!Siness. of the CQmpany. and, if necessary, to. the appointment,
effective as of the date, of such event, of'one or inore substitute· Managing Member(s).
(e)
A ;Member that makes a Voluntary Withdrawal, or· that is requjrcd to
withdraw,. dies; becomes. incompetent or bankrUpt or dissolves,. and his/her Related Trust or legal
representatives; shall have no right to tike part in the management of the. business of the
Company, and neither. such Member nor his/.her Related Trust shall be inC!uded.in calci:uating the
interests of the Members required to tike action-under any provisions ofthis Agreement.

(

(f)
In the event that a. Member beco.mes a Reduced Interest Member in
accordance with the foregoing provisions of this. Sec. 6.01, such Reduced Interest Member,
together with his/her Related· Trust, may give notice· to the Managing· Member, pursuant to s·ec.
4.03; to request the withdrawal of a portion of his/her Investment Capital Accounts; provided,
however, that, until such time as such Reduced Interest Member has withdrawn from the
Company pursuant to· this Sec. 6.0 1, such R~duced lnterest Member may not withdraw an
amount that worild resuit in his/her- Investment Capital' Account balance being ·less thilll an
amount, to be determined by the Managing Member, equal to the greater of such Reduced
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Interest Member's NQ rata sliare of the Company's aggregate capital account balar,ce
requirements for each Fund and such Recjuced Interest Member's initial capital contribution to
the Company. A Reduced Interest Member shall remain a Member and shall retain. a'!! of his/her
rights and obligations under the Agreement and the Act, except: (x) that such Reduced Interest
Me!tiber and hi~er Related Trust or legal representatives shall have no right to take part in the
management of the. business of the Company, and neither such Reduced Inter~st Member nor
his/her Related Trust shaU be included in calculating the interests ofthe Members required. to
rake action under any provisions of the· Agreement, and' (y) as otherwise provided herein. A
Member of a class that becomes a Reduced Interest Member pursuant to this Sec. 6.0 I shall be
referred to herein as a "Reduced Interest Class A Member" or a "Reduced Interest Class B
Member," ~s applicable.
Sec. 6.02.

Ri!!hts of Reduced Interest Members.

Subject to paragraphs (b) and (c). of this Section 6.02, in the eventthat a
(a)
Member becomes a Reduced Interest Member in accordance. with Section 6.01, such Member,
hiS/her Related Trust or his/her legal representatives shall continue to receive allocations and
distributions hereunder in his/her capacity· as: a Reduced Interest: Member-, as. follows:

(
'··

(i)
for the fiscal year in which or at the conclusion of which helshe
becomes a Reduced Interest Member, such Member's, together with his/her Related Tius~s,
Incentive Percentages and Operating Percentages shall remain as set forth on. Schedule A as of
\he date of· the applicable conversion event or notice of conversion to a Reduced. Interest
Member, as app!icalile (unless such Percentages are subsequently modified by the· Special Class
A Mem:ber or Special Class B Member, as applicable, in hls sole discretion pursuant to Sec.
3.04); and ·
(ii)

thereafter~

the II_lcentive Percentages and Operating Percentages of

Suc::h Reduced Interest Member, together with hiS/her Related Trust, shall be reduced in
aocordance with the terms of the applicable Supplementary Agreement.
(b)
In the eyent that: (i) a Reduced Interest Member elects to; withdraw·from the
Partnership pursu.ant to Section 6.0l(a), or (ii) a Forfeiting·. Event occurs with respect to a Reduced
Interest Member, during .a period in wirich such Reduced Interest· Member, together with his/her
Related Trust, is receiving continuing allocations· and distributions pursuant to a Supplementary
Agreement, allocations and distributions pursuant to.- such Supplementary Agreement shall
immediately cease and- such. Reduced Interest Member, together with his/he~: Related Tru5t, or
his/her legal representatives, shall be paid the amount of their respective Capital Account ·in
accordance with, in the case of clause (i), Section 6,03(a) and, in the case of clause (ii), Section
6.03{b).

(

(c)
In the event that a Reduced Interest Member, or a Member who would
otherwise become a Reduced Interest Member, is required· to. withdraw from the Company
pursuant to Section 6.0l(b)(i) other than as a result of a Forfeiting Event and prior to such time as
his/her Incentive Percentage and Operating. Percentag~ are reduced to 0% under the relevant
Supplementary Agreement, such Reduced Interest Member shall continue to be entiiled to receive
allocations and di:Striliutions pursuant .to such Supplementary Agreement, in his/her capacity as a
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formet Member, until such time as his/her Incentive Percentage and Operati.Dg Percentage are.
reduced to 0% under such Supplementary Agreement. In the event that a former Member receives
continui.Dg allocationS and distributions pursuant to a Supplementary Agreement in accordance
with the preceding sentence and, as a result, ·the Company is subject to additional tax liability in
respect of su.ch distributions, the Managi.IJg. Member, in its sole discretion, may a.djust .the
allocations or distributions:to such former Member to the extent necessary· to prevent such result or
require such former Member to enter i.Dto an appropriate indemnification agreement with respect to
such ta."< liability. Any persons who cease to be Members pursuant to this· Article VI will be
deemed "Members" solely for purposes of receiving allocations and distributions, if any, pursuant
to the terms of a Supplementary Agreement
(d)
In no event shiill continni.Dg allocations and distributions to a Reduced
Interest Member of a class reduce or otherwise affect the allocations and distributions to the
Members of the· other class.
Sec. 6.03.

(_

Pavments to Withdrawing Members.

(a)
Subject to Sec. 6.03, a Memlier, including· a Reduced Interest Member,
that withdraws or. is required to withdraw· by the Managing· Member ather than as. a result of a
F9rfeiting Event, or the legal representative of a Member that has been deemed to have
withdrawn due to death, an adjudication of inco!)lpetency, dissolution or a decll)I"ation of
bankruptcy, together with hislher Related Trust, shall in all evenu; be. entitled to be paid the .
amount of such Memb.er's or-Related Trust's' Capital 1\.cCoimts, including any Incentive
1\.llocation or other Net Income allocated thereto for the fiscal year during which such
tenninating event occurs, as soon as practicable following the. end of such fis<;al year. Any .
withdrawal with respect to an lnvesiment Capital Account attributable to a Fund may only be
.made to the extent that the amount of the withdrawal may be withdrawn by the Company as
general partner of such FUhd pursuant to the terms of the·applicabie Fund Agreement. .Any such
withdrawal,. and.<jistributions in respect therepf, shall be made in accordance with, and subject to,
the terms of the applicable Fimd Agreement.
·
(b)
Subject to Sec. 6,03, in. the event that a Mem.ber, including a Reduced
Interest Member, is requited to\v!thdraw as a result of a Forfeiting Event or requests a Volwitary
·withdrawal prior to the occurrence or a Fori'eiting Event with respect to. such Member; such
Member· ·and his/her Related Trust shall be entitled to be paid the amount of their respective
Capital Accounts detennined as of the effective date of withdrawal, subjeet to this paragraph,
and shall not be entitled to any unallocated fuc~ntive Allocations or other Net fucome in which
the Mern.ber and his/her Related Trust would otherWise .share. Payment of such Capital 1\.ccount
balances shall be-made· as sqon as. pracricable following the end ofthe· fiscal year during which
such withdrawal occurs. Amounts forfeited by a ~!ember of a class under ti>Js paragraph shall be
reallocated· to and among the remaining Members of such class (excluding Reduced Inte,est
Members) in proportion to their Operating Percentages, subj.ec! to the sole discretion of the
Special Cia'" A Member or Special Class B Member, as .applicable, to. reallocate such amounts
among the Members of such class. Amounts forfeited .by the last remaining Member of a class
under this paragraph shall be reallocated to and among the remaining Members of·the other class
in proportion to their Operating Percentages, subject to the sole discretion of the Managing
Member to reallocate such amounts among such Members.
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(c)
Following payments to a Member and his/her Related Trust, if applicable,
or his/her legal representatives pursuant to paragraphs (a) or (b) of this Sec .. 6.03, such Member
and his/her Related Trust, or his/her iegal representatives shall not be entitled to any other
allocations and distributions, except as separately agreed in ''iriting.
Sec. 6.04.
Limitations on Distributions. The right of any withdrawn Member,
Reduced Interest Member and Related Trust or any Member's legal .representatives to receive
distributions pursuant to this Article VI is subject to the provision by the Managing Member for
all Company liabilities· in accordance with the. Act, and. for reserves for liabilities taken in
accordance with Secc 3.07 hereof.· The unused portion of any reserve shall be· distributed after
the Managing Member shall have determined that the need therefor shall have cea:sed.
ARTICLE VII
Duration and Termination of the Company
Sec. 7~01.
Duration of Company. ·The Company shall continue to operate
until the earlier of the following dates: (i) December 31, 2050, (ii) any date during the
Company's duration by· decision of th~: Managing Member; (iii) the occurrence of an event
described in Sec: 6.01(d), unless the Company is continued pursuant to Sec. 6.0l(d); or (iv) the
effective date of a decree ofjl)d[cial dissolution under the Act.

(

sec. 7.02.
Termination of Company. Upon the. dissolution. of the Company
as provided in: Sec. 7.01, the Managing Member, out of Company assets, sh11ll pay first the
expenses of winding up, liquidation and dissoluiion of the Company, and thereafter all of the
remaining.assets of the Company shall be distributed in the foliowing order:
(a)

to.cretUtors~

(b)

to all Iii/embers, in accordance witliSec. 4.04(c).

in the order of priority as provided. by law; and

Any Fund Net Profits or Fuod Net Losses,. Incentive Allocations and Operating
Net Profits or Operating Net Losses attributaqle to the termination of the Company shall be
allocated among the Members in accordance with Secs.. 3.05 and 3.06.hereof.
ARTICLE VIII
Tax Retun:Js;. Reports to Members
Sec. KOL
Fmng of Tax .Returns. The Managing Member or his. d~signated
agent, at the Company's expense, 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.
S<;c. 8.0.2.

(

.end of each fiscal

Reports to. Current and Former Members. Within 90 days after the

y~ or as s·oon thereafter as is reasonably practicable, the Company shall

prepare and mail, or cause its accountants to prepare and mail, to each Member and, to the extent
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necessruy, to each former Member (or his OJ' her legal representative), a report sening forth in
sufficient detail that information which v.~ll enable such Member or former Member (or his or
her legal representative) to prepare his or her federal, state and local til.x -ref.l!rns in accordance
with the laws, rules and regulations then prevailing.
Sec. 8.03..
Ta.'< Matters Partner. The Managing Member shall be designated
on the. Company's annual Federal information tax return and shal! have full power and
responsibility as the-Tax Matters Partner of the Company for purposes of Section 6231 (a)(7) of
the Code:· Each person (for purposes of this Sec. 8.03, called a "Pass-TlllU Partner") that holdS or
controls an interest as a Member on behalf of,_ or for the be,efit of, another person or persons, .or
which. Pass-Th:ru Partner is beneficially owned (directly or indirectly) by anoth.er person or
persons, shall, within 30 days following- receipt from the Tax Matters Partner of any notice,
demand, reqnest for information or similar document, convey such notice or other document in
writing to all holders of benefici.il interests in the Company holding such interests through such
Pass-Th.ru Partner. In the event the Company shall be the subject of an income ta.'< 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 authoriz.ed to act for, and its decision shall be final and. binding upon, the Company and each
M~mber thereof. All expens;ls incurred in co.nnection with any such audit, investigation,
settlement qr review shall be borne by the Company.

(

Sec. 8.04.
Books and Records. The Managing Member shall. cause to be kept
complete and accurate books of accmmt and records with respect to· the Company's business.
Each Member and his/her duly authorized representatives shail have the righ.t to examine the
company books, recordS and documents dUring, normal. business hours upon. prior notice to the
Managing Member. The Company's books of account shail be kept using th.e same method. of
accounting used by th:e Partnership, except as· oth.erwise determined by the Managing 'Member.
Tbe Company's. independent auditors shall be. Ernst & Young LLP or such other independent
accounting firm as may be selected· from time w time by the Managing. Member; provided,
however, thafthe Managing Member, in its sole discretion, may-decline to c.ause.the Company's
bOoks and records to be audited.

ARTICLE IX
Miscellaneous
Sec. 9.01.
General. ·this.Agreement' (a) shall be binding an the executors,
administrators,. estates, heirs~ legai successors and representatives oftbe Members; and (b) may
l?e executed, through ih.e use of seplmlte signature pages or in any number of counterparts "ith
the same effect as l.f tbe partie.s executing such counterparts had all executed one counterpart;
provided. however. that each such counterpart shall have been executed by "'Managing Member
and that the counterparts, in the aggregate, shall have been signed by all ofthe Members.

\.

Sec. 9.02.
Power of Attomev. Each of the Members hereby appoints the
Managing Member, or any Member or Members then acting as a Managing Member, with power ·
of substitution as his or her troe and lawful representative and. attomey-i':l-fact, in his or her
name, place and stead to make, execute, .sign, acknowledge, swear to and file:
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(a)
any and all instruments, certificates., and Gther documents which may be
deemed necessary or desirable to effect the winding-up and tennination of the Company;
(b)
any business certificate, fictitious mime certificate, amendment thereto, or
other instrument or document of any kind necessary or desirable to accomplish the business,
purpose and objectives of the Company, or required by any applicable federal; state or local law;
and
(c)
all amendments or modifications to the Agreement to the extent made in
accordance with Sec. 9.03 hereof·

The power ofattm;ney hereby granted by each of the Members is coupled· with an
interest, is irrevocable, and shall survive, and shall not be. affected by, the subsequent death,
disability, incapacity, adjudication of incompetency, termination, bankruptcy or insolvency· of
such Member.
Sec. 9.03.
· Amendments. The teiJIIS andprovisions of this Agreement may be.
modified or amended at any time and from time to lime by the Managing Member.
.
. .

(

Sec.-9.04.
Choice of Law. Notwithstanding the. place where this Agreement
may he executed by any of the parties· hereto, the parties eX)Jres.s!y agree that all the terms and
provisions hereof shall be construed under t!le laws of the State of Delaware. and, without
limitation ther.eof, that the .A:ct as now adopted or as-may be hereajl:er a\'llended. shall govern this
Agreement.
Notices. Eac\1 notice· or other communication relating to this·
See. 9.05.
Agreement shall be in writing and delivered in person or by registered or certified maiL All such
commmiications to the Company shall be addressed to its prinoipal office and place ofbusiness.
All such communications addressed· to a Member (or such Member's legal representative) shall.
· be addressed to such Member at the address set forth ht SchedUle A Any Member may
designate a new address by notice to that effect giyen. to the Company. Unless otherwise
specifically provided in tbis Agreement, a notice shall be deemed to have been effectively given
when. mailed: by registered or certified-mail to the proper address or deiivered in person.
Sec. 9.06.
GoodwilL No-value shall be placed on the name or goodwill of the ·
Company, \'ihich shall belong exclusively to the Managing Member.
Sec. 9.07.
Treatment ofPavments. To, the extetit any payments. hereunder are
subJect to Section 736 of-the Code, the Members agree and the Company agrees that, to the
extent pennissible, all. such pl'\yments shall be-treated as p'!yments described in Section 736(a)(l)
ofthe.Code.

(

Adjustment of Basis of Comnanv PropertY. In the event of a
Sec. 9c08.
distribution of Company property to a Member or .an assignment or other transfer (including by
reason of death) of all or a: part of the interest ·of a Member in the Company, the Managing
Member, in. his discretion., may cause the Company to elect,. pursuant to Section 754 of the Code,
or the corresponding provision of subsequent law, to adjust the l?asis of the Compan]ls property
as proviqed by Sections 734 and 743 of the Code.
9296076.14

-24-

CONFIDENTIAL INFORMATION
NH0000069

'

Sec. 9.09.
Headin!!s. The titles of the Articles and the headi.ngs of the
Sections Of this Agreement are for convenience of reference only, and are no.t to be considered in
construing the terms and provisions of this Agreement.

IN WITNESS WHEREOF, the undersigned have duly executed this Limited
Liability Company Agreement as of the date first set forth above.

:MANAGL'IG MEMBER:

Dr. PeterS. Stamos

NON-M.ilu"fAGING MEMBERS:
Each person who· shall sign a Member Signature
Page in the form attached hereto and who shalt be
·accepted by the: Managing Member to the Company
as a Member.

(

9196016.i4

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CONFIDENTIAL INFORMATION
NH0000070

"
OPERATING AGREEiVIENT

(

OF
STAMOS PARTNERS ASSOCIATES LLC
MEMBER SIGNATURE PAGE ·
By its signature below, the undersigned hereby agrees. that effective as ofthe date
of the undersigned's adrniss.ion io Stamos Partners Associates LLC as a Member, the
undersigned shall (i) be bound by each and every term and provision of the Operating Agreement
of Stamos Partners Associates LLC, as the same may be. duly amended from time t 0 time in
accordance with the provisions thereof, and (ii) become and be a pany to said Operating
Agreement of Stamos Parmers Asso<;iates LLC.

Signature

Print Name

Accepted '1'1d Agreed to
as of this _ _ day of _ _ _-'"'. 200_.
Managing Member

BY:~------------­
Peter Stamos

(
'·
9296076.!4

-26-

CONFIDENTIAL INFORMATION
NH0000071

v

SCHEDULE A
SCHEDULE OF MEMBERS

incentive

Capital
Contribution

Class

Pe~centage

Operating
Percentage

$41,000

A

20.5%

20.5%

Noreen Hmington

$20,000.

A

10%

10%

Spiro Stamas·

$12,000

A

6%

6%

Der.ek Daley

$20,000

A

lOo/o

10%

Ellen Horing

$5,000

A

2.5%

2.5%

Kevin Okimoto

$i,OOO

A

.5%

5%

Ashok Chacbra

$1,000

A

.5.%

.5%

FredWiipon

$15,300

B

7.65%

7.65%

$11,000

g

5.5%

5.5%

Da:vid M. Katz

$13,490

B

6.745%

6..745%

RichardA. Wilpon

$,14,290

B

7.145%

7.H5%

Michael Katz

$14,2.90·

.B

7.145%

7.145%

L, Thomas Ostemtan

$6,.120

B

3.06%

3.06%

Arthur Friedn;Jan

$1,020

B

.51%

.S!%

JeffreyS. Wilpon

$10,200

B

5.1%

5.1%

Marvin B: Tepper

$14,2"90

B

7.145%

7.145%

Member

Peter S. Stamos
Spccial.CI~s A

c

Member

Lui B. Katz

l.)pecinl

Add<ess

Cla,ss.B·M~b~

!
'

92960]6.111

CONFIDENTIAL INFORMATiON
NH0000072