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LIMITED LIABILITY COMPANY AGREEMENT
OF
CONNING INVESTMENT PARTNERS II, L.L.C.
THIS LIMITED LIABILITY COMPANY AGREEMENT (the "Agreement"),
dated as of this ------- day of -----------------, 1997 is made by
and among those individuals, firms, corporations and other entities
listed in Schedule A hereto and any additional parties who execute
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a counterpart to this Agreement (such individuals and any
additional parties admitted to the limited liability company formed
hereby after the effective date of this Agreement, being referred
to herein as the "Members"). The Members agree to form and carry
on a limited liability company (the "Company") subject to the terms
of this Agreement in accordance with the provisions of the Delaware
Limited Liability Company Act, Del. Code Ann. Sections 18-101
through 18-1107 (1992), as amended (the "LLC Act").
ARTICLE I
FIRM NAME; REGISTERED OFFICE AND AGENT; PURPOSES
1.1 FIRM NAME; REGISTERED OFFICE AND AGENT. The name of the
Company is CONNING INVESTMENT PARTNERS II, L.L.C. The principal
office of the Company shall be located initially at CityPlace II,
185 Asylum Street, Hartford, Connecticut 06103-4105. The initial
address of the Company's registered office in Delaware is: c/o
Prentice-Hall Corporation Systems, Inc., 32 Lookerman Square, Suite
L-130, Dover, County of Kent, Delaware 19901. The Company's
initial registered agent at such address for service of process is
Prentice-Hall Corporation System, Inc.
1.2 PURPOSE; POWERS. The Company is formed for the principal
purpose of serving as the general partner of Conning Insurance
Capital Limited Partnership II (the "Domestic Fund") and the
investment general partner of Conning Insurance Capital
International Partners II (the "International Fund" and together
with the Domestic Fund, the "Funds") and to engage in any lawful
business or other activity permitted under the LLC Act. The
Company shall have all powers available to it as a limited
liability company under the LLC Act.
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ARTICLE II
MEMBERS & INTERESTS
2.1 IDENTIFICATION. Each Member shall have an interest in
the Company (an "Interest") initially represented by his or its
capital subscription ("Subscription") to the Company, and with
respect to such Interest, shall be entitled to a percentage share
in respect of certain Company allocations and distributions to be
made hereunder (a "Percentage Interest"). The names and addresses
of the Members, their respective Subscriptions and Percentage
Interests are set forth on Schedule A hereto.
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2.2 INTERESTS. Company Interests have not been registered
under the Securities Act of 1933, and therefore may not be sold or
otherwise transferred unless they are registered under the
Securities Act of 1933 or an exemption from registration is
available. Each Member shall be entitled to have a certificate
representing his interest in the Company, signed by, or in the name
of the Company by the appropriate officer or officers of the
Company. Any or all of the signatures on the certificate may be a
facsimile. In case any officer, who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to
be an officer before such certificate is issued, it may be issued
by the Company with the same effect as if he were such officer at
the date of issue. The Manager Member may direct a new certificate
or certificates to be issued in place of any certificate or
certificates theretofore issued by the Company alleged to have been
lost, stolen or destroyed and as a condition precedent thereof,
require the owner of such certificate to give the Company indemnity
against any claim that may be made against the Company with respect
to the lost, stolen or destroyed certificate.
2.3 LIMITATION OF LIABILITY. No Member shall be liable under
a judgment, decree or order of any court, or in any other manner,
for a debt, obligation or liability of the Company, except as
provided by law or as specifically provided otherwise herein. No
Member shall be required to make any contribution to the Company by
reason of any negative balance in the Member's Capital Account,
except as specifically provided otherwise herein, nor shall any
negative balance in a Member's Capital Account create any liability
on the part of the Member to any third party.
2.4 VOTING. Except as may otherwise be provided by this
Agreement or the Certificate of Formation, the Company Interests
shall vote together as a single class on all matters to be voted on
by Members. Whenever action is required or permitted by this
Agreement to be taken by a specified percentage in interest of the
Members, such action shall be deemed to be valid if taken by
written vote or written consent, or by vote or consent at a
meeting, by those Members whose Percentage Interests as reflected
in Schedule A hereto represent the specified percentage of the
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aggregate Percentage Interests of all Members at the time, except
as specifically provided otherwise herein.
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ARTICLE III
MANAGER MEMBER
3.1 MANAGEMENT AND CONTROL OF THE COMPANY. Conning &
Company, a Connecticut corporation and a Member of the Company,
shall act and serve as the sole manager of the Company ("Manager
Member"). Subject to the provisions of this Agreement, the
management, policies and control of the Company shall be vested
exclusively in the Manager Member.
3.2 POWERS. Subject to the provisions of this Agreement, the
Manager Member shall have the power on behalf and in the name of
the Company to carry out and implement any and all of the purposes
of the Company and to exercise any of the powers of the Company,
including, without limitation, the power to:
(i) open, maintain and close accounts with brokers and
give instructions or directions in connection therewith;
(ii) open, maintain and close bank accounts and draw
checks or other orders for the payment of money;
(iii) receive, receipt for and dispose of and deal in
all securities, checks, money and other assets or liabilities
of the Company;
(iv) hire employees or retain investment bankers,
attorneys, accountants, consultants, custodians, contractors
and other agents, and pay them compensation;
(v) execute on behalf of the Company, any agreement
between the Company and the Domestic or the International Fund
or any amendment or termination thereof;
(vi) enter into, make and perform such contracts,
agreements and other undertakings, and do any and all such
other acts required of the Company or the Funds with respect
to the Company's or the Funds' interest in any corporation,
partnership, limited partnership, trust, association or other
entity or activity, including but not limited to entering into
agreements with respect to such interests, which agreements
may contain such terms, conditions and provisions as the
Manager Member in its sole discretion shall approve;
(vii) make all elections for the Company that are
permitted under tax or other applicable laws, including,
without limitation, an election under Section 754 of the Code;
and
(viii) maintain one or more offices within or without
the State of Connecticut and in connection therewith rent or
acquire office space and do such other acts as may be
advisable in connection with the maintenance of such offices;
provided, however, that
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maintaining such offices, renting or acquiring office space and doing any
such other acts shall not affect the limited liability of the Members as
set forth in Section 2.3 hereof.
3.3 CERTIFICATE OF LIMITED LIABILITY COMPANY. The Manager
Member shall file for record with the appropriate public
authorities and, if required, publish the Certificate of Formation
of Limited Liability Company of the Company and any amendments
thereto, and shall take all such other action as may be required to
preserve the limited liability of the Members in any jurisdiction
in which the Company shall conduct its activities. In addition,
the Manager Member shall execute and file all requisite documents
and instruments to enable the Company to qualify to do business as
a foreign limited liability company in Connecticut and in each
other jurisdiction for which such qualification may be necessary or
appropriate for the conduct of the business of the Company.
3.4 DUTY OF CARE. The Manager Member shall exercise its best
judgment in conducting the Company's operations and in performing
its other duties hereunder. The Manager Member shall not incur any
liability to the Company, any Member or any other Person for any
loss suffered by the Company or such other Member or Person which
arises out of any action or omission of the Manager Member or any
Affiliate of the Manager Member assisting the Manager Member, at
the Manager Member's request, in performing the Manager Member's
duties hereunder; provided, however, that (i) the Manager Member or
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such Affiliate of the Manager Member acted in good faith and in a
manner such Person reasonably believed to be in, or not opposed to,
the best interests of the Company and, with respect to any criminal
action or proceeding, had no reasonable cause to believe such
Person's conduct was unlawful, and (ii) such course of conduct did
not constitute gross negligence or willful misconduct of the
Manager Member or such Affiliate of the Manager Member. No
Affiliate of the Manager Member shall incur any liability to the
Company, any Member or any other Person for any loss suffered by
the Company or such other Member or Person which arises out of any
action or omission of the Manager Member, or out of any action or
omission of such Affiliate of the Manager Member taken or suffered
by such Affiliate of the Manager Member in the course of providing
assistance to the Manager Member at the Manager Member's request;
provided, however, that (i) such Affiliate of the Manager Member
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acted in good faith and in a manner such Affiliate of the Manager
Member reasonably believed to be in, or not opposed to, the best
interests of the Company and, with respect to any criminal action
or proceeding, had no reasonable cause to believe such Person's
conduct was unlawful, and (ii) such course of conduct did not
constitute gross negligence or willful misconduct of such Affiliate
of the Manager Member. No Affiliate of the Manager Member shall be
liable for any action taken or omitted by any other Affiliate of
the Manager Member unless such action or omission was taken or
suffered by such other Affiliate of the Manager Member while acting
as an agent of such Affiliate of the Manager Member and, with
respect to such action or omission, such other Affiliate of the
Manager Member did not satisfy the requirements of clauses (i) and
(ii) of the preceding sentence. Neither the Manager Member nor any
Affiliate of the Manager Member shall be liable for the negligence,
whether of omission or commission, dishonesty or bad faith of any
employee, broker or other agent of the Company selected by the
Manager Member with reasonable care. The Manager Member and each
Affiliate of the Manager Member shall be fully protected and
justified with
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respect to any action or omission taken or suffered by any of them in
good faith if such action or omission is taken or suffered in reliance
upon and in accordance with the opinion or advice as to matters of law of
legal counsel, or as to matters of accounting of accountants, selected by
any of them with reasonable care. In addition, the Manager Member and
each of its Affiliates shall be entitled to indemnification by the Company
to the extent provided in Article XIII hereof.
3.5 MANAGEMENT FEE; NO SALARY. The Manager Member shall
receive and be entitled to retain all Management Fee amounts
payable and paid by the Funds under Section 8.3 of the respective
Partnership Agreements of each of the Funds, net of Administrative
Expenses required to be paid by the Company as general partner of
the Funds under Section 8.1 of the respective Partnership Agreements.
The Manager Member shall receive no other amounts as salary or other
compensation from the Company, but shall be entitled to its share of
allocations and distributions made by the Company determined in the manner
set forth herein.
3.6 TAX MATTERS MEMBER. The "tax matters partner", as
defined in Section 6231 of the Code, of the Company shall be the
Manager Member (the "Tax Matters Member"). The Tax Matters Member
shall not resign as Tax Matters Member unless, on the effective
date of such resignation, the Company has designated another Member
as Tax Matters Member and that Member has given its consent in
writing to its appointment as Tax Matters Member. The Tax Matters
Member shall receive no additional compensation from the Company
for its services in that capacity, but all expenses incurred by the
Tax Matters Member in such capacity shall be borne by the Company.
The Tax Matters Member is authorized to employ such accountants,
attorneys and agents as it, in its sole discretion, determines are
necessary to or useful in the performance of its duties. Any
Person who serves as Tax Matters Member shall not be liable to the
Company or to any Member for any action it takes or fails to take
as Tax Matters Member with respect to any administrative or
judicial proceeding involving "partnership items" (as defined in
Section 6231 of the Code) of the Company, unless such action or
failure to act constitutes a violation of the Manager Member's duty
of care set forth in Section 3.4.
ARTICLE IV
OFFICERS; COMMITTEES
4.1 OFFICERS. The Manager Member shall designate any of its
officers from time to time, and separately may appoint other
Persons, including but not limited to individual Members, to serve
as officers of the Company, with such officers of the Manager
Member (and/or officers of the Company) to be responsible for the
general overall supervision of the business and affairs of the
Company. Any Person appointed as an officer of the Company shall
have such titles, terms of office and duties as the Manager Member
may from time to time determine, and such officers may include a
president, one or more vice presidents, a secretary and one or more
assistant secretaries, a treasurer and one or more assistant
treasurers, a Chief Executive Officer and a Chief Financial
Officer. The officers of the Manager Member and such other
officers of the Company may sign any and all deeds, mortgages,
bonds, contracts or other instruments on
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behalf of the Company, except in cases where the signing or execution
thereof shall be expressly delegated by this Agreement or by statute to
some other agent of the Company; and, in general, the officers of the
Manager Member and the officers of the Company shall perform all duties as
may be prescribed by the Manager Member. All actions of the Company,
except amending the Certificate of Formation or this Agreement or the
admission of new Members and except as otherwise provided in this
Agreement or the Certificate of Formation, may be taken by the appropriate
officers of the Manager Member or the Company without obtaining consent of
the other Members.
4.2 ELECTION AND TENURE. The election and tenure of any
officer of the Manager Member shall be determined in accordance
with the policies and provisions of the Manager Member. Any
officers of the Company shall be designated by the Manager Member
annually. Each officer shall hold office from the date of officer
designation until the next annual meeting or designation, as the
case may be, and until his successor shall have been designated,
unless the officer shall sooner resign or be removed. The initial
officers of the Company appointed by the Manager Member shall be:
Name Position
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Maurice W. Slayton Chief Executive Officer
John B. Clinton President
Fred M. Schpero Secretary
4.3 RESIGNATIONS; REMOVAL; VACANCIES. Any officer of the
Company may resign at any time by giving written notice to the
Manager Member, and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it
effective. Any officer may be removed at any time by the Manager
Member with or without cause. A vacancy in any officer position
may be filled by the Manager Member.
ARTICLE V
CAPITAL CONTRIBUTIONS; PERCENTAGE INTERESTS
5.1 CAPITAL CONTRIBUTIONS. The Manager Member shall make a
capital contribution to the Company equal to its capital account as
a general partner in the Funds and will make additional capital
contributions as and when required to permit the Company to satisfy
its obligations as general partner of the Funds. Each other Member
shall make capital contributions equal in amount to its
Subscription upon his, her or its admission to the Company.
5.2 NO INTEREST OR WITHDRAWALS. No interest shall accrue on
any capital contribution made by a Member, and no Member shall have
the right to withdraw or to be repaid any of his capital
contributions so made, except as specifically provided in this
Agreement.
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5.3 ADJUSTMENTS OF PERCENTAGE INTERESTS. The Manager Member,
without the consent of any Member, may at any time or from time to
time increase the Percentage Interest of any Member by reduction of
the Manager Member's Percentage Interest.
ARTICLE VI
CAPITAL ACCOUNTS
6.1 CAPITAL ACCOUNTS. There shall be established on the
books of the Company a capital account ("Capital Account") for each
Member that shall consist of such Member's initial capital
contribution to the Company as reflected in the books and records
of the Company,
(a) increased by
(i) any additional capital contributions made
by such Member as so reflected, and
(ii) any amounts from time to time added to the
Capital Account of such Member pursuant to Article VII;
(b) decreased by
(i) any distributions made to such Member
pursuant to Article VIII, and
(ii) any amounts from time to time subtracted
from the Capital Account of such Member pursuant to Article
VII; and
(c) otherwise adjusted in accordance with the tax
accounting principles set forth in Treasury Regulations Section
1.704-1(b)(2)(iv).
6.2 ACCOUNTING FOR DISTRIBUTIONS IN KIND. For purposes of
maintaining Capital Accounts when Company property is distributed
in kind;
(i) the Company shall treat such property as if it had
been sold for its fair market value on the date of
distribution;
(ii) any difference between the fair market value of
such property as so determined and the Cost of such property
shall be allocated to the Capital Accounts of the Members
pursuant to Section 7.3; and
(iii) the Capital Account of any Member receiving a
distribution of such property shall be reduced by the fair
market value of the property so received, net of any
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liabilities that such Member is considered to assume or take
subject to under Section 752 of the Code.
6.3 COMPLIANCE WITH TREASURY REGULATIONS. The foregoing
provisions and the other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with
Code Section 704(b) and Treasury Regulations Section 1.704-1(b),
and shall be interpreted and applied in a manner consistent with
such regulations.
6.4 EFFECT OF ASSIGNMENT. In the event of any assignment of
any Interest pursuant to Section 9.3, the assignee shall succeed to
the Capital Account of the assignor in respect of the Interest
transferred.
ARTICLE VII
ALLOCATIONS
7.1 GENERAL. Company income, gain, loss and expenses shall
be allocated to the Capital Accounts of the Members and distributed
to such Members in accordance with this Article VII. No interest
shall accrue on the Capital Account or capital contributions of any
Member, and no member shall have the right to withdraw funds or
property from the Company for any reason, except as specifically
provided in this Agreement.
7.2 NET GAIN OR LOSS. As of the end of each year of the
Company, and after giving effect to the allocations set forth in
Sections 7.3, 7.4 and 7.6(b), the Net Gain or Loss of the Company
for such fiscal period shall be allocated as follows:
(a) All Net Gain or Loss attributable to allocations
made by the Funds to the Company in its capacity as general partner
of the Funds:
(i) which are made with respect to the capital
contribution of the Manager Member in its capacity as former
general partner of the Funds shall be allocated to the Manager
Member; and
(ii) which are made other than with respect to
the capital contribution of the Manager Member as former
general partner of the Funds (e.g., the Company's "carried
interest" in the profits or losses or net profits or losses of
the Funds) shall be allocated among the Members in proportion
to their respective Percentage Interests.
(b) All Management Fee income and all expenses
attributable to Administrative Expenses of the Funds, and all
Short-Term Income shall be allocated to the Manager Member.
(c) All other Net Gain or Loss of the Company shall be
allocated to all Members in proportion to their respective
Percentage Interests.
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7.3 TIMING OF ALLOCATIONS ON DISTRIBUTIONS IN KIND. Any Net
Gain or Loss of the Company that is attributable to a distribution
of property in kind by the Company or the Funds shall be allocated
as follows (subject to the other provisions of this Article VII):
(a) Net Gain or Loss of the Company attributable to
amounts allocated by the Funds to the Company in its capacity as
the general partner of the Funds as a result of distributions in
kind of Fund property shall be allocated to all Members, at the
time such allocations are made by the Funds, on the same basis that
an equivalent amount of Net Gain or Loss attributable to Fund
allocations would be allocated by the Company for a hypothetical
fiscal year ending immediately prior to the distribution in kind by
the Funds that gave rise to such Net Gain or Loss.
(b) Net Gain or Loss resulting pursuant to Section 6.2
from the distribution by the Company of its property in kind shall
be allocated to all Members, immediately prior to the time such
distribution is made, on the same basis that an equivalent amount
of Net Gain or Loss not attributable to Fund allocations would be
allocated for a hypothetical fiscal year ending immediately prior
to the distribution in kind that gave rise to such Net Gain or
Loss.
(c) For purposes of applying the loss allocation
limitations of Section 7.4 in the case of an allocation of Net Gain
or Loss pursuant to subsections (a) or (b) above for a hypothetical
fiscal year, the actual balances in the Members' Capital Accounts
shall be adjusted to reflect prior distributions in kind made
during such hypothetical fiscal year by the Funds or the Company,
but not any realized gains or losses of the Company for such
hypothetical fiscal year.
7.4 REGULATORY ALLOCATIONS. The following provisions are
included in order to comply with tax rules set forth in the Code
and to permit the Company to obtain the benefits of a "safe harbor"
provided by Treasury Regulation Section 1.704-1(b)(2)(ii)(d).
(a) If and to the extent that any allocation of Net
Loss, Issuance Items or other items of loss, expense (or portion
thereof) to any Member would cause such Member's Capital Account to
be negative by an amount which exceeds such Member's Restoration
Amount or would further reduce a balance in such Member's Capital
Account that is already negative by an amount which exceeds such
Member's Restoration Amount, then such loss, expense or charge (or
portion thereof) shall be allocated first to the Capital Accounts
of the other Members in proportion to the positive balances in
their respective Capital Accounts until all such Capital Accounts
are reduced to zero, then to the Capital Accounts of Members with
Restoration Amounts, in proportion to their respective Restoration
Amounts, until each such Member's Capital Account is negative by an
amount equal to such Member's Restoration Amount; then to the
Capital Account of the Manager Member until the Capital Account of
the Manager Member is negative by an amount equal to its
Restoration Amount; and then to the Capital Accounts of the Members
and Retired Members in proportion to their Percentage Interests;
provided that an allocation pursuant to this Section 7.4(a) shall
be made only if and to the extent that such Member would have a
Capital Account that is negative by an amount which exceeds such
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Member's Restoration Amount after all allocations provided for in
this Article VII have been made tentatively as if this Section 7.4
were not included in this Agreement.
(b) If any Member unexpectedly receives an adjustment,
allocation or distribution described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), and such adjustment,
allocation or distribution causes such Member to have a deficit
balance in such Member's Capital Account, there shall be allocated
to such Member items of income and gain (consisting of a pro rata
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portion of each item of Company income, including gross income, and
gain for such fiscal period) in an amount and manner sufficient to
eliminate such Member's deficit Capital Account balance, to the
extent required by Treasury Regulation Section 1.704-
1(b)(2)(ii)(d), as quickly as possible, provided that an allocation
pursuant to this Section 7.4(b) shall be made only if and to the
extent that such Member would have a negative Capital Account after
all allocations provided for in this Section 7.4 have been made
tentatively as if this Section 7.4(b) were not included in this
Agreement. The foregoing sentence is intended to constitute a
"qualified income offset" provision as described in Treasury
Regulation Section 1.704-1(b)(2)(ii)(d), and shall be interpreted
and applied in all respects in accordance with that Section.
(c) In the event that any Member has a negative
Capital Account at the end of any Company fiscal year which is in
excess of such Member's Restoration Amount, there shall be
allocated to such Member items of Company income (including gross
income) and gain in the amount of such excess as quickly as
possible, provided that an allocation pursuant to this Section
7.4(c) shall be made only if and to the extent that the deficit in
such Member's Capital Account would exceed such Company's
Restoration Amount after all allocations provided for in this
Article VII have been made tentatively as if Section 7.4(b) hereof
and this Section 7.4(c) were not included in this Agreement.
(d) To the extent that an adjustment to the adjusted
tax basis of any Company asset pursuant to Section 743(b) of the
Code is required, pursuant to Treasury Regulation Section 1.704-
1(b)(2)(iv)(m), to be taken into account is determining Capital
Accounts, the amount of such adjustment to the Capital Accounts
shall be treated as an item of gain (if the adjustment increases
the basis of the asset) or loss (if the adjustment decreases such
basis) and such gain or loss shall be specially allocated to the
Members in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such
Section of the Regulations.
(e) The allocations set forth in Sections 7.4(a),
7.4(b), 7.4(c) and 7.4(d) hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Treasury Regulation
Section 1.704-1(b). Notwithstanding any other provisions of this
Article VII (other than the Regulatory Allocations), the Regulatory
Allocations shall be taken into account in allocating subsequent
Net Gain, Net Loss, Issuance Items and items of income, gain, loss
and deduction among the Members so that, to the extent possible,
the net amount of such allocations of subsequent Net Gain, Net
Loss, Issuance Items and other items and the Regulatory Allocations
to each Member shall be equal to the net amount that would have
been allocated to each such Member pursuant to the provisions of
this Article VII if the Regulatory Allocations had not occurred.
For purposes of applying the foregoing sentence, allocations
pursuant to this Section
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7.4(e) shall be made with respect to allocations pursuant to Section
7.4(d) only to the extent the Manager Member reasonably determines that
such allocations will otherwise be inconsistent with the economic
agreement among the Members.
(f) If the Company, in its capacity as general partner
of the Funds, receives any special allocations from the Funds pursuant to
certain provisions of the Funds' respective Partnership Agreements dealing
with certain "extraordinary allocations", the Manager Member, after
consulting with the Company's accountants and other advisors, shall
allocate such amounts among the Members in a manner consistent with the
economic arrangements among the Members and the purpose of such
provisions.
7.5 ADJUSTMENTS TO REFLECT CHANGE IN INTERESTS.
Notwithstanding the foregoing, with respect to any fiscal period
during which any Member's interest in the Company changes,
allocations of Net Gain or Loss shall be adjusted appropriately to
take into account the varying interests of the Members during such
period. The Manager Member shall consult with the Company's
accountants and other advisors and shall select the method of
making such adjustments, which method shall be used consistently
thereafter.
7.6 TAX ALLOCATIONS.
(a) For federal, state and local income tax purposes,
Company income, gain, loss, deduction or credit (or any item
thereof) for each fiscal year shall be allocated to and among the
Members in order to reflect the allocations made pursuant to the
provisions of this Article VII for such fiscal year (other than
allocations of items which are not deductible or are excluded from
taxable income), taking into account any variation between the
adjusted tax basis and book value of Company property in accordance
with the principles of Section 704(c) of the Code.
(b) Any income, gain, loss or deduction realized as a
direct or indirect result of the issuance of a Company interest by
the Company to a Member, the issuance to the Company of an interest
in the Funds or changes during the term of the Company in any
Member's Percentage Interest or Subscription ("Issuance Items")
shall be allocated among the Members so that, to the extent
possible, the net amount of such Issuance Items, together with all
other allocations under this Agreement to each Member, shall be
equal to the net amount that would have been allocated to each such
Member if the Issuance Items had not been realized. Issuance Items
allocated to any Member shall be added to such Member's Capital
Account if such items constitute income or gain, and shall be
subtracted from that Capital Account if such items constitute
losses or expenses.
7.7 TIMING OF ALLOCATIONS. The Manager Member, in its sole
discretion, may cause the Company to make the allocations described
in this Article VII (other than allocations for tax purposes
pursuant to Section 7.6) as of a time other than the end of a
fiscal year on the basis of an interim closing of the Company's
books at such time, but only if the Funds make interim allocations.
In such event, each short fiscal period attributable to any such
interim closing shall constitute a fiscal year for purposes of this
Article VII.
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ARTICLE VIII
DISTRIBUTIONS
8.1 TIMING OF DISTRIBUTIONS. The Company intends to
distribute promptly to the Members all cash and other property it
receives in distributions from the Funds or any other source;
provided, however, that the Manager Member may defer any such
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distribution to provide for liabilities or obligations of the
Company or to establish appropriate reserves.
8.2 TAX DISTRIBUTIONS.
(a) The Company intends to distribute to the Members,
as it is received, the amount ("Tax Distribution") of any
distribution received from the Funds as a tax distribution. Such
distribution shall be made to the Members in amounts which would
enable the Members to satisfy their respective tax liabilities,
assuming for this purpose that all Members are subject to the
highest rate of tax that may be applicable to any Member, as
determined by the Manager Member in consultation with accountants
to the Company.
(b) Notwithstanding the foregoing: (i) amounts
otherwise distributable to any Member as Tax Distributions with
respect to any taxable year may be reduced (but not below zero) by
any other distributions made by the Company to such Member during
such fiscal year; and (ii) the aggregate amount of distributions
that otherwise would be made pursuant to this Section 8.2 with
respect to any taxable year may be reduced or eliminated to the
extent determined by the Manager Member pursuant to the proviso to
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Section 8.1.
(c) To the extent the Company receives from the Funds
any amounts which are treated under such Fund's Partnership
Agreement as an advance against tax distributions to permit the
Members of the Company to make estimated tax payments, such
amounts, when received by the Members, shall similarly be treated
as advances against Tax Distributions, and shall be subject to
return by the Members to the Company to the extent such advances
are determined by the Manager Member to have been excessive upon
calculation at the end of the fiscal year of the correct amount of
tax distributions to be made by such Fund to the Company and Tax
Distributions to be made by the Company to its Members.
8.3 ADDITIONAL DISTRIBUTIONS. All additional distributions,
other than Liquidating Distributions, shall be made as follows:
(a) As long as any Member has a positive balance in
his Capital Account, all cash or property received during the
fiscal year by the Company which is attributable to cumulative Net
Gain (e.g., in excess of prior Net Loss) or Short-Term Income that
has been allocated in accordance with Article VII shall be
distributed to the extent possible to the Members in proportion to
the respective allocations of each such item under Article VII. Cash
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or property received which is not attributable to Net Gain or
Short Term Income shall be distributed to the Members in proportion
to their respective Capital Accounts.
(b) If no Member has a positive balance in his Capital
Account, distributions shall be made to all Members in proportion
to their respective Percentage Interests.
8.4 OPERATIONAL RULES.
(a) For purposes of Section 8.3, the Capital Account
balances of the Members shall be adjusted, prior to determining the
amount of any distribution provided for therein, to reflect all
prior Company distributions and all distributions made
contemporaneously with the distributions provided for in Section
8.3, as well as all Company Net Gain or Net Loss attributable to
any distributions previously or contemporaneously made in kind.
(b) The valuation of securities distributed in kind
shall be made in the manner provided in Article XII. Each class of
securities to be distributed in kind shall be distributed to the
Members in proportion to their respective shares of the entire
amount to be distributed (determined as provided in Sections 8.3
or, with respect to Liquidating Distributions, Section 11.3),
except to the extent that a disproportionate distribution of such
securities is necessary in order to avoid distributing fractional
shares. For purposes of the preceding sentence, each lot of stock
or other securities having a separately identifiable tax basis or
holding period shall be treated as a separate class of securities.
8.5 TAX WITHHOLDING. If the Company incurs a tax withholding
obligation with respect to any Member, any amount required to be
withheld by the Company with respect to such Member shall be
treated for all purposes of this Agreement as if it had been
transferred to such Member by the Company as an interest-free
advance. Amounts treated as advanced to any Member pursuant to
this Section 8.5 shall be repaid by such Member to the Company
within thirty (30) days after the Company delivers a written
request to such Member for such repayment; provided, however, that
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if any such repayment is not made, the Company shall collect such
unpaid amounts from any Company distributions that otherwise would
be made to such Member. Any part of such withheld amount not
collected by the Company from such distributions shall be charged
to such Member's Capital Account at such time as the Manager Member
in its sole discretion shall determine, but in no event later than
the time immediately preceding the Company's final Liquidating
Distribution to such Member.
8.6 CERTAIN DISTRIBUTIONS PROHIBITED. Anything in this
Article VIII to the contrary notwithstanding, all Company
distributions shall be subject to the following limitations:
(i) No distribution shall be made to any Member if,
and to the extent that, such distribution would not be
permitted under the LLC Act.
(ii) No distribution other than a Tax Distribution shall be
made to any Member to the extent that such distribution, if made,
would cause the deficit balance, if any, in the
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Capital Account of such Member (determined without regard to any
allocations made pursuant to Section 7.4(c)) to exceed such Member's
Restoration Amount.
8.7 CONSENT TO DISTRIBUTIONS. Each Member, by becoming a
Member, consents to any such distribution hereafter made or omitted
to be made to the Members or any of them in accordance with this
Article VIII.
ARTICLE IX
LIMITATION ON TRANSFERS OF COMPANY INTERESTS OF MEMBERS;
ADMISSION OF NEW MEMBERS
9.1 TRANSFERS GENERALLY PROHIBITED. Except as provided in
this Article IX, a Member may not transfer, sell, assign, gift,
pledge, hypothecate, or otherwise dispose of such Member's Company
Interest.
9.2 ADMISSION OF NEW MEMBERS.
(a) The Company shall not directly issue any
additional Company Interests after the date of this Agreement.
(b) In the case of an assignee of an Interest a new
Member may be admitted to the Company, only as provided in Section
9.3, which admission shall be effective only after the consents
required by that section are obtained and such assignee's admission
is reflected in Schedule A hereto. In addition, admission of a new
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Member is conditioned upon the execution of a counterpart copy of
this Agreement by such new Member.
9.3 LIMITATIONS ON TRANSFERS OF COMPANY INTERESTS.
(a) No sale, assignment, gift, pledge, hypothecation
or other disposition or encumbrance of an interest in the Company
(collectively, a "Transfer") shall be made to any person or entity
that is not already a Member without the prior written consent of
the Manager Member and, if the Manager Member is transferring part
or all of its interest to such person or entity, the prior written
consent of a majority of the non-transferring Members and Retired
Members. In addition, in order to ensure that the Company lacks
the corporate characteristic of "free transferability of interests"
for tax purposes: (i) whether the consent of a majority of the non-
transferring Members and Retired Members to the transfer of any
Member's Interest in the Company has been obtained will be
determined in accordance with Internal Revenue Service Revenue
Procedure 95-10, 1995-3 I.R.B. 30 ("Revenue Procedure 95-10"), or
any successor administrative or authoritative judicial guidance;
(ii) as permitted by Revenue Procedure 95-10, a majority of the
non-transferring Members and Retired Members shall consist of (w)
Members and Retired Members holding a majority of the capital
interests in the Company then held by all non-transferring Members
and Retired Members, (x) Members and Retired Members holding a
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majority of the profit interests in the Company then held by all
non transferring Members and Retired Members, (y) a majority in
interest of the non transferring Members and Retired Members, as
determined pursuant to Revenue Procedure 94-46, 1994-28 I.R.B. 129
("Revenue Procedure 94-46"), or (z) a majority of the non-
transferring Members and Retired Members determined on a per capita
basis (as determined by Manager Member); and (iii) the Manager
Member in its sole discretion shall select which of foregoing
clauses (w), (x), (y) or (z) shall apply to any particular proposed
transfer.
(b) The Manager Member shall not consent to the
admission of an assignee as a Member until the Manager Member has
received an opinion of counsel to the Company or of other counsel
reasonably satisfactory to the Manager Member (which opinion shall
be obtained at the expense of the assignee) that such admission
will not result in (i) a violation of applicable law or this
Agreement, (ii) the Company being classified as an association
taxable as a corporation under Section 7701 of the Code, (iii) the
Company becoming subject to tax as a corporation under Section 7704
of the Code, or (iv) the Company being deemed terminated pursuant
to Section 708 of the Code. Further, the Manager Member shall not
cause or permit the transfer of Percentage Interests of Members or
Retired Members to be transferred to other Members or Retired
Members if any such transfer would result in the Company being
deemed to be "terminated" under Section 708 of the Code.
(c) The Manager Member shall not cause or permit
interests in the Company to become registered under the Securities
Act of 1933, as amended, or "readily traded on an established
securities market," and shall withhold its consent to any Transfer
that, to its knowledge after reasonable inquiry, would otherwise be
accomplished by a trade on a "secondary market (or the substantial
equivalent thereof)," in each case within the meaning of Section
7704 or 469(k) of the Code and any Treasury Regulations promulgated
thereunder that are in effect at the time of the proposed Transfer.
ARTICLE X
WITHDRAWAL OR RESIGNATION OF RETIRED MEMBERS
10.1 WITHDRAWALS GENERALLY. Except as otherwise provided in
this Article X, without the prior written consent of the Manager
Member, no Member shall have the right to resign or withdraw from
the Company prior to the dissolution and winding up of the Company.
Any distribution to a resigning Member shall be in accordance with
an agreement between the Member and the Company that is approved by
the Manager Member.
10.2 WITHDRAWAL UPON BANKRUPTCY. In the event of the
occurrence with respect to any Member of an event described in
Section 18-304 of the LLC Act as in effect on the date hereof, such
Member shall thereupon for purposes of this Agreement be deemed to
have withdrawn as of the date thereof, and in such event such
Member's interest in the Company as
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a Member shall automatically be converted into a Retired Member's interest
in accordance with the provisions of this Article X.
10.3 RETIRED MEMBER. A Member who withdraws, or the personal
representative or estate of a Member who shall be deemed to have
withdrawn, shall retain an interest in the Company as a Retired
Member; such former Member's interest in the Company as a Member
shall be automatically converted into a Retired Member's; and such
Person shall be considered a Retired Member for all purposes under
the terms of this Agreement.
10.4 RETIRED MEMBER PARTICIPATION. A Retired Member shall
take no part in the management, policy or control of the Company
and shall have no power or authority to undertake any activities on
behalf of the Company or to sign for or to bind the Company. Any
Retired Member shall be bound by the terms of this Agreement and by
all action taken by the Manager Members or the Members. No Retired
Member, or trust for the benefit of a Retired Member or the
children of a Retired Member, shall participate in any consent of
the Members for any purpose hereunder except as may be required
under the Code.
ARTICLE XI
DISSOLUTION
11.1 DISSOLUTION. The Company shall be dissolved and its
affairs shall be wound up upon the first to occur of the following:
(a) Thirty (30) years from the date of the formation
of the Company;
(b) The written consent of all of the Members;
(c) The death, adjudication of incompetence,
retirement, resignation, expulsion, bankruptcy or dissolution of
the Manager Member, or the occurrence of any other event which
terminates the continued membership of the Manager Member in the
Company, unless within 90 days after the event(s) giving rise to
the dissolution of the Company a majority in interest of the
remaining Members (determined in accordance with Revenue Procedure
95-10 and 94-46, or any successor administrative or authoritative
judicial guidance) agree in writing to continue the business of the
Company; or
(d) The entry of a decree of judicial dissolution
under law.
11.2 WINDING UP. The Manager Member, or if none, a person
approved by Members holding at least fifty percent (50%) of the
Percentage Interests may wind up the Company's affairs, unless
otherwise provided by law.
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11.3 DISTRIBUTION OF ASSETS. Upon the winding up of the
Company, the individual charged with winding up the Company first
shall make payment of, or adequate provisions for, the debts,
expenses and obligations of the Company. The remaining assets of
the Company shall be distributed as Liquidating Distributions as
follows: any Net Gain or Loss realized in connection with the
liquidation of the Company shall be allocated among the Members
pursuant to Article VII, and the remaining assets of the Company
shall then be distributed to the Members in proportion to the
positive balances in their respective Capital Accounts (and, if a
distribution in kind is to be made, after allocating any Net Gain
or Loss attributable to such distribution). In performing their
duties, the liquidator(s) are authorized to sell, exchange or
otherwise dispose of the assets of the Company in such reasonable
manner as the liquidator(s) shall determine to be in the best
interest of the Members. During the liquidation of the Company,
the liquidator(s) shall furnish to the Members the financial
statements and other information specified in Article XIII.
11.4 NO LIABILITY FOR RETURN OF CAPITAL.
(a) The liquidator(s), the Manager Member and their
respective officers, directors, agents, partners and Affiliates
shall not be personally liable for the return of the capital
contributions of any Member. No Member (other than the Managing
Member, to the extent required by Section 11.4(b)) shall be liable
to restore to the Company any deficit balance in such Member's
Capital Account if any such deficit should exist after the
Company's final liquidating distribution.
(b) If, after the Company has made its final
Liquidating Distribution, the Manager Member's Capital Account is
negative, then, notwithstanding foregoing, the Manager Member shall
return to the Company part or all of the distributions received by
it pursuant to Article VIII or this Article XI in an aggregate
amount equal to such deficit but not in excess of such Manger
Member's Restoration Amount. Returns made by the Manager Member
pursuant to this Section 11.4 shall be made in cash. The Manager
Member shall use best efforts to make any such returns and/or
payments promptly and in any event in conformity with the timing
requirements of Treasury Regulation Section 1.704-1(b)(2)(ii)(g).
Amounts repaid by the Manager Member pursuant to this Section 11.4
shall be paid to the Funds in satisfaction of the Company's
obligation to restore a deficit in its capital account as
maintained by each such Fund, paid to other creditors of the
Company or distributed to Members with positive balances in their
Capital Accounts in proportion to such balances.
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ARTICLE XII
VALUATION OF COMPANY ASSETS
12.1 VALUATION BY MANAGER MEMBER. Whenever valuation of
Company assets or net assets is required by this Agreement, the
fair market value of such assets shall be determined by the Manager
Member in good faith.
12.2 GOODWILL. The Company's name and goodwill shall, as
among the Members, be deemed to have no value and shall belong to
the Company or any successor thereof, and no Member shall have any
right or claim individually to the use thereof. Upon termination
of the Company, all rights to the name of the Company and any
goodwill associated with that name shall be assigned to the Manager
Member.
ARTICLE XIII
BOOKS AND RECORDS; FISCAL MATTERS
13.1 BOOKS AND RECORDS. The books and records of the Company
shall be kept at the principal office of the Company or at such
other places, within or without the State of Delaware, as the
Manager Member shall from time to time determine.
13.2 INSPECTION. Any Member of record shall have the right to
examine, at any reasonable time or times for any purposes related
to the Member's ownership of Company Interests, the books and
records of account, minutes, and records of Members and to make
copies thereof. Such inspection may be made by any agent or
attorney of the Member. Upon the written request of any Member of
the Company, the Company shall mail to such Member its most recent
financial statements, showing in reasonable detail its assets and
liabilities and the results of its operations.
13.3 FISCAL YEAR. The fiscal year of the Company shall end on
the last day of December each year, unless otherwise determined by
the Manager Member.
13.4 DEPOSITS. All funds of the Company shall be deposited
from time to time to credit of the Company in such banks, trust
companies or other depositories as the Manager Member may select.
13.5 CHECKS, PROFITS, ETC. All checks, drafts or other orders
for the payment of money, and all notes or other evidences of
indebtedness issued in the name of the Company shall be signed by
an officer of the Manger Member or any of the President, CEO or the
Secretary of the Company.
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13.6 LOANS. No loans shall be contracted on behalf of the
Company and no evidences of indebtedness shall be issued in its
name unless authorized by the Manager Member. Such authority may
be general or confined to specific instances.
13.7 CONTRACTS. The Manager Member may authorize any officer
or agent of the Company to enter into any contract or execute any
instrument in the name of and on behalf of the Company, and such
authority may be general or confined to specific instances.
13.8 ACCOUNTANT. An accountant will be selected from time to
time by the Manager Member to perform such tax and accounting
services as may be required from time to time. The accountant may
be removed by the Manager Member without assigning any cause.
13.9 LEGAL COUNSEL. One or more attorney(s) at law will be
selected from time to time by the Manager Member to review the
legal affairs of the Company and to perform such other services as
may be required and to report to the Manager Member with respect
thereto. The legal counsel may be removed by the Manager Member
without assigning any cause.
ARTICLE XIV
INDEMNIFICATION
14.1 INDEMNIFICATION OF MEMBERS.
(a) To the greatest extent not inconsistent with the
laws and public policies of Delaware, the Company shall indemnify
any Member made a party to any proceeding because such individual
is or was a Member, as a matter of right, against all liability
incurred by such individual in connection with any proceeding;
provided, however, that it shall be determined in the specific case
- -------- -------
in accordance with Section 14.1(d) that indemnification of such
individual is permissible in the circumstances because the
individual has met the standard of conduct for indemnification set
forth in Section 14.1(c). The Company shall pay for or reimburse
the reasonable expenses incurred by a Member in connection with any
such proceeding in advance of final disposition thereof if: (i)
the individual furnishes the Company a written affirmation of the
individual's good faith belief that he has met the standard of
conduct for indemnification described in Section 14.1(c); (ii) the
individual furnishes the Company a written undertaking, executed
personally or on such individual's behalf, to repay the advance if
it is ultimately determined that such individual did not meet such
standard of conduct; and (iii) a determination is made in
accordance with Section 14.1 that based upon facts then known to
those making the determination, indemnification would not be
precluded under this Section 14.1. The undertaking described in
clause (ii) above must be a general obligation of the individual,
subject to such reasonable limitations as the Company may permit,
but need not be secured and may be accepted without reference to
financial ability to make repayment. The Company shall indemnify
a Member who is wholly successful, on the merits or otherwise, in
the defense of any such proceeding, as a matter of right, against
reasonable expenses incurred by the individual in
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connection with the proceeding without the requirement of a determination
as set forth in Section 14.1(c). Upon demand by the Member for
indemnification or advancement of expenses, as the case may be, the
Company shall expeditiously determine whether the Member is
entitled thereto in accordance with this Section 14.1. The
indemnification and advancement of expenses provided for under this
Section 14.1 shall be applicable to any proceeding arising from
acts or omissions occurring before or after the adoption of this
Section 14.1.
(b) The Company shall have the power, but not the
obligation, to indemnify any individual who is or was an employee
or agent of the Company to the same extent as if such individual
was a Member, including any and all officers.
(c) Indemnification of a Member is permissible under
this Section 14.1 only if: (i) he conducted himself in good faith;
(ii) he reasonably believed that his conduct was in or at least not
opposed to the Company's best interest and was within the authority
delegated to him by this Agreement or was delegated by the Manager
Member (or by a majority in Percentage Interest of other Members;
if the Manager Member is the subject of indemnification); (iii) in
the case of any criminal proceeding, he had no reasonable cause to
believe his conduct was unlawful; and (iv) the termination of any
such proceeding by judgment, order, settlement, conviction or upon
a plea of nolo contendere or its equivalent is not, of itself,
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determinative that the individual did not meet the standard of
conduct described in this Section 14.1(c).
(d) A determination as to whether indemnification or
advancement of expenses is permissible shall be made by the Manager
Member (or by the affirmative vote of a majority in Percentage
Interests of all other Members if the Manager Member is party to
the proceeding). A Member who is a party to a proceeding may apply
for indemnification from the Company to the court, if any,
conducting the proceeding or to another court of competent
jurisdiction. On receipt of an application, the court, after
giving notice the court considers necessary, may order
indemnification if it determines:
(i) in a proceeding in which the Member is
wholly successful, on the merits or otherwise, the Member
is entitled to indemnification under this Section 14.1,
in which case the court shall order the Company to pay
the Member his reasonable expenses incurred to obtain
such court ordered indemnification; or
(ii) the Member is fairly and reasonably
entitled to indemnification in view of all the relevant
circumstances, whether or not the Member met the standard
of conduct set forth in Section 14.1(c).
(e) Nothing contained in this Section 14.1 shall limit
or preclude the exercise or be deemed exclusive of any right under
the law, by contract or otherwise, relating to indemnification of
or advancement of expenses to any individual who is or was a Member
of the Company or is or was serving at the Company's request as a
director, officer, partner, manager, trustee, employee, or agent of
another foreign or domestic company, partnership, association,
limited liability company, corporation, joint venture, trust,
employee benefit plan, or other
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enterprise, whether for-profit or not. Further, any Member shall be
entitled to seek indemnification from any and all other sources, including
officers and directors insurance or indemnification from Conning & Company
and/or indemnification from the Funds, to the extent applicable. It is
the intent of this Section 14.1 to provide indemnification to Members to
the fullest extent now or hereafter permitted by the law consistent with
the terms or conditions of this Section 14.1. Indemnification shall be
provided in accordance with this Section 14.1 irrespective of the nature
of the legal or equitable theory upon which a claim is made, including,
without limitation, negligence, breach of duty, mismanagement, waste,
breach of contract, breach of warranty, strict liability, violation of
federal or state securities law, violation of the Employee Retirement
Income Security Act of 1974, as amended, or violation of any other state
or federal law or violation of any law of any other jurisdiction.
(f) For purposes of this Section 14.1:
(i) The term "expenses" includes all direct
and indirect costs (including, without limitation,
counsel fees, retainers, court costs, transcripts, fees
of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges,
postage, delivery service fees and all other
disbursements or out-of-pocket expenses) actually
incurred in connection with the investigation, defense,
settlement or appeal of a proceeding or establishing or
enforcing a right to indemnification under this Section
14.1, applicable law or otherwise.
(ii) The term "liability" means the obligation
to pay a judgment, settlement, penalty, fine, excise tax
(including an excise tax assessed with respect to an
employee benefit plan), or reasonable expenses incurred
with respect to a proceeding.
(iii) The term "party" includes an individual
who was, is or is threatened to be made, a named
defendant or respondent in a proceeding.
(iv) The term "proceeding" means any
threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal.
(g) The Company may purchase and maintain insurance
for its benefit, the benefit of any individual who is entitled to
indemnification under this Section 14.1, or both, against any
liability asserted against or incurred by such individual in any
capacity or arising out of such individual's service with the
Company, whether or not the Company would have the power to
indemnify such individual against such liability.
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ARTICLE XV
MEETINGS
15.1 ANNUAL MEETING. The annual meeting of the Members shall
be held within three (3) months of the end of the Company's fiscal
year on a date set by the Manager Member, for the purpose of
electing any Officers and for the transaction of such other
business as may come before the meeting. If the election shall not
be held on the day designated by the Manager Member for the annual
meeting of the Members, or at any adjournment thereof, the Members
shall cause the election to be held at a special meeting of the
Members as soon thereafter as it may conveniently be held.
15.2 REGULAR OR SPECIAL MEETINGS. The Members may by
resolution prescribe the time and place for the holding of regular
meetings and may provide that the adoption of such resolution shall
constitute notice of such regular meetings. If the Members do not
prescribe the time and place for the holding of regular meetings,
such regular meetings shall be held at the time and place specified
by the Manager Member in the notice of such regular meeting.
Special meetings of the Members, for any purpose or purposes,
unless otherwise prescribed by statute, may be called by a majority
of the Members or by the Manager Member.
15.3 NOTICE OF MEETING. Written or telephonic notice stating
the place, day and hour of the meeting and, in case of a special
meeting, the purposes for which the meeting is called, shall be
delivered not less than three (3) days before the date of the
meeting, either personally or by mail, by or at the direction of
the Manager Member, to each Member of record entitled to vote at
such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to
the Member at his address as it appears on the books of the
Company, with postage thereon prepaid. When all the Members of the
Company are present at any meeting, or if those not present deliver
a written, signed waiver of notice of such meeting, or subsequently
ratify all the proceedings thereof, the transactions of such
meeting are as valid as if a meeting were formally called and
notice had been given.
15.4 QUORUM. At any meeting of the Members, holders of at
least a majority of Percentage Interests as reflected in Schedule A
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hereto, represented in person or by proxy, shall constitute a
quorum at such meeting. If less than said majority of the equity
interests are represented at a meeting, a majority of the interests
so represented may adjourn the meeting from time to time without
further notice. At such adjourned meeting at which a quorum shall
be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
The Members present at a duly called meeting at which a quorum of
Members initially is present or represented may continue to
transact business until adjournment, notwithstanding the withdrawal
of enough Members to leave less than a quorum.
15.5 PROXIES. At all meetings of Members, a Member may vote
by proxy executed in writing by the Member or by his duly
authorized attorney-in-fact. Such proxy shall be filed with the
Manager Member of the Company before or at the time of the meeting.
No proxy shall be valid after three (3) months from date of
execution, unless otherwise provided in the proxy.
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15.6 MANNER OF ACTING.
(a) Formal Action by Members. Action of Members
representing at least a majority in Percentage Interest of all
Members shall constitute the effective act of the Members, whether
taken at a meeting or by written instrument, unless otherwise
provided expressly herein. The Manager Member shall preside at
meetings of the Members. A record shall be maintained of the
meetings of the Members. The Members may adopt their own rules of
procedure which shall not be inconsistent with this Agreement.
(b) Presumption of Assent. A Member of the Company
who is present at a meeting of the Members at which action on any
matter is taken shall be presumed to have assented to the action
taken, unless his dissent shall be entered in the minutes of the
meeting or unless he shall file his written dissent to such action
with the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by certified mail
to the secretary of the meeting immediately after the adjournment
of the meeting. Such right to dissent shall not apply to a Member
who voted in favor of such action.
(c) Action by Consent. Unless otherwise provided by
law, any action required to be taken at a meeting of the Members,
or any other action which may be taken at a meeting of the Members,
may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by a majority of the
Members entitled to vote with respect to the subject matter
thereof.
(d) Telephonic Meetings. Members of the Company may
participate in any meeting of the Members by means of conference
telephone or similar communication if all persons participating in
such meeting can hear one another for the entire discussion of the
matter(s) to be voted upon. Participating in a telephonic meeting
shall constitute presence in person at such meeting.
ARTICLE XVI
MISCELLANEOUS
16.1 NOTICE. Except as otherwise provided in this Agreement,
any notice required or permitted to be given pursuant to the
provisions of the LLC Act, the Certificate of Formation of the
Company or this Agreement shall be effective as of the date
personally delivered, or if sent by mail, on the fifth day after
deposit with the United States Postal Service, prepaid and
addressed to the intended receiver at his last known address as
shown in the records of the Company.
16.2 WAIVER OF NOTICE. Whenever any notice is required to be
given pursuant to the provisions of the LLC Act, the Certificate of
Formation of the Company or this Agreement, a
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waiver thereof, in writing, signed by the persons entitled to such notice,
whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
16.3 GENDER AND NUMBER. Whenever the context requires, the
gender of all words used herein shall include the masculine,
feminine and neuter, and the number of all words shall include the
singular and plural thereof.
16.4 ARTICLES AND OTHER HEADINGS. The Articles and other
headings contained in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation.
16.5 GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
16.6 AMENDMENTS. This Agreement may be altered, amended,
restated, or repealed and a new Agreement may be adopted by consent
of all of the Members, after notice and opportunity for discussion
of the proposed alteration, amendment, restatement, or repeal.
16.7 REMEDIES UPON BREACH. Any Member of the Company who
fails to perform in accordance with the terms and conditions of
this Agreement shall keep and save harmless the assets of the
Company and shall indemnify the Company and the Members of the
Company from any and all claims, demands and actions of every kind
and nature whatsoever which may arise out of or by reason of such
violation of any terms of this Agreement.
16.8 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all
of which taken together shall constitute one Agreement.
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THE UNDERSIGNED, being all of the Members of Conning
Investment Partners II, L.L.C., a Delaware limited liability
company, hereby evidence their adoption and ratification of the
foregoing Limited Liability Company Agreement of the Company.
MANAGER MEMBER:
CONNING & COMPANY
By: ------------------------------
Name:
Title:
MEMBERS:
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APPENDIX A
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TABLE OF DEFINITIONS
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"ADMINISTRATIVE EXPENSES" shall have the meaning assigned to
-----------------------
such term in Section 8.1 of the respective Partnership Agreements
of each of the Funds.
"AFFILIATE" shall mean, with respect to the Person to which it
---------
refers, a Person that directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under common
control with, such subject Person; provided, however, that all
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Members of the Company and all officers, directors and employees of
the Manager Member shall be deemed to be Affiliates of the Company.
"CAPITAL ACCOUNT" shall have the meaning set forth in Section 6.1.
---------------
"CODE" shall mean the Internal Revenue Code of 1986 and the
----
rules and regulations promulgated thereunder, as amended from time
to time.
"COMPANY" shall have the meaning set forth in the preamble to
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this Agreement.
"COST" shall mean, with respect to Company assets and unless
----
the context otherwise requires, the Company's adjusted tax basis of
such assets for federal income tax purposes, provided that (i) if
the Company has made an election under Section 754 of the Code,
such tax basis shall be determined after giving effect to
adjustments made under Section 734 of the Code but without regard
to adjustments made under Section 743 of the Code; and (ii) the
Cost of any securities or other property received by the Company in
distributions made by the Funds shall be deemed to equal the fair
market value of such property, as determined pursuant to the Funds
Partnership Agreements, as of the date such property is distributed
by the Funds.
"DOMESTIC FUND" shall have the meaning set forth in Section 1.2.
-------------
"FUNDS" shall have the meaning set forth in Section 1.2.
-----
"INTEREST" shall mean a Member's interest in the Company.
--------
"INTERNATIONAL FUND" shall have the meaning set forth in Section 1.2
------------------
"ISSUANCE ITEMS" shall have the meaning set forth in Section 7.6(b).
--------------
"LIQUIDATING DISTRIBUTION" shall mean any distribution made by
------------------------
the Company after the latest to occur of (a) the Company's dissolution,
determined pursuant to Article XI, and (b) the date on which the Company
has received its final distribution from the Funds.
"LLC ACT" shall have the meaning set forth in the preamble to
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this Agreement.
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"MANAGEMENT FEE" shall have the meaning assigned to such term
--------------
in Section 8.3 of the respective Partnership Agreements of each of
the Funds.
"MANAGER MEMBER" shall mean Conning & Company, a Connecticut
--------------
corporation, and its successors and assigns.
"MEMBERS" shall have the meaning set forth in the preamble to
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this Agreement.
"NET GAIN OR LOSS" shall mean, with respect to any fiscal
----------------
period, the sum of (a) all amounts allocated for such fiscal period
to the Company pursuant to the Fund Partnership Agreements to the
Company in its capacity as the general partner of the Funds, (b)
net gain or loss from the sale or exchange of the Company's capital
assets during such fiscal period, (c) gain or loss deemed to have
been realized by the Company, pursuant to Section 6.2, on a
distribution in kind of its assets during such fiscal period, and
(d) other items of income, gain, loss, deduction and expense of the
Company for such fiscal period that are not included in (a), (b) or
(c), including any income which is exempt from federal income tax,
all Company losses and all expenses properly chargeable to the
Company, whether deductible or non-deductible and whether described
in Section 705(a)(2)(B) of the Code, treated as so described
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(i), or
otherwise except for Issuance Items. Net Gain or Loss shall be
determined in accordance with tax accounting principles rather than
generally accepted accounting principles.
"PARTNERSHIP AGREEMENTS" shall mean (a) in the case of the
----------------------
Domestic Fund, the Limited Partnership Agreement dated as of
December 23, 1988 of Conning Insurance Capital Limited Partnership
II, and (b) in the case of the International Fund, the Limited
Partnership Agreement dated as of December 16, 1988 of Conning
Insurance Capital International Partners II
"PERSON" shall mean any individual, partnership, corporation,
------
trust or other entity.
"PERCENTAGE INTEREST" shall mean, with respect to any Member
-------------------
and at any time, the amount set forth at such time opposite such
Member's name in Schedule A under the heading "Percentage Interest."
----------
"RESTORATION AMOUNT" shall mean, (a) with respect to any
------------------
Member and at any time, any amount of such Member's Subscription
that such Member has not contributed in cash to the Company as of
such time; and (b) in the case of the Manager Member only, an
additional amount equal to the excess at such time (if any) of (A)
the aggregate amount of distributions received by the Company from
the Funds as of such time over (B) the aggregate amount of
distributions that the Company would have received from the Funds
as of such time if the Company had made all of its capital
contributions to the Funds in exchange for a limited partnership
interest in the Fund and did not hold an interest as the general
partner of the Fund (such excess, if any, constituting
overdistributions made by the Funds to the Company in its capacity
as general partner of the Funds with respect to the Company's 20%
"carried interest" in the Funds' cumulative net profits).
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"RETIRED MEMBER" shall have the meaning set forth in Section 10.3.
--------------
"SECURITIES ACT" shall mean the Securities Act of 1933, as
--------------
amended from time to time.
"SHORT-TERM INCOME" shall mean interest and dividend income
-----------------
earned on temporary investment of capital contributions or
distributions received from the Funds which are held by the Company
pending investment in the Funds, disbursement for expenses or
distribution to the Members.
"SUBSCRIPTION" shall mean, with respect to any Member, the
------------
total amount which such Member has agreed to contribute to the
Company as reflected on hereto.
"TAX DISTRIBUTION" shall have the meaning set forth in Section 8.2.
----------------
"TAX MATTERS MEMBER" shall have the meaning set forth in
------------------
Section 3.6.
"TRANSFER" shall mean any transfer, sale, assignment, gift,
--------
pledge, hypothecation or other disposition of an Interest in the
Company.
* * *
Schedule listing the name, initial capital contribution and
percentage interest of each Member.
29