POS AMI

As filed with the Securities and Exchange Commission on June 29, 2006

Investment Company Act File No. 811-21818

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

	FORM N-2/A
	REGISTRATION STATEMENT
	UNDER
	THE INVESTMENT COMPANY ACT OF 1940	x
	Amendment No. 1	x
MERCANTILE LONG-SHORT MANAGER MASTER FUND LLC
	(Exact Name of Registrant as Specified in Its Charter)
	Two Hopkins Plaza Baltimore, MD 21201
	(Address of Principal Executive Offices)
	(410) 237-5900
	(Registrant’s Telephone Number, including Area Code)
	Mercantile Capital Advisors, Inc. Two Hopkins Plaza Baltimore, MD 21201 Attn: Jennifer E. Vollmer
	(Name and Address of Agent for Service)
	Copies to:
S. Elliott Cohan Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas New York, New York 10036		Yukako Kawata Davis Polk & Wardwell 450 Lexington Avenue New York, New York 10017
EXPLANATORY NOTE
This Registration Statement has been filed by the Registrant pursuant to Section 8(b) of the Investment Company Act of 1940, as amended (the “1940 Act”). However, interests in the Registrant have not been and are not being registered under the Securities Act of 1933, as amended (the “1933 Act”), since such interests will be issued solely in private placement transactions that do not involve any “public offering” within the meaning of Section 4(2) of the 1933 Act and the regulations thereunder. Investment in the Registrant may be made only by U.S. and non-U.S. investment companies and other investment vehicles that are “accredited investors” within the meaning of Regulation D under the 1933 Act or that the Registrant determines are eligible to invest in accordance with Regulation D under the 1933 Act. The Registrant may decline to accept any investment in its discretion. This Registration Statement does not constitute an offer to sell, or the solicitation of an offer to buy, any interest in the Registrant.

CONTENTS OF REGISTRATION STATEMENT

     This registration statement of Mercantile Long-Short Manager Master Fund LLC (the “Master Fund”) contains the following documents:

Facing Sheet
Explanatory Note
Contents of Registration Statement
Part A
Part B
Part C
Signature Page
Exhibits

PART A

     Responses to Items 1, 2, 3.2, 4, 5, 6 and 7 of Part A have been omitted pursuant to Paragraph 3 of Instruction G of the General Instructions to Form N-2.

     Responses to certain Items required to be included in Part A of this Registration Statement are incorporated herein by reference from the amended Registration Statement on Form N-2 of Mercantile Long-Short Manager Fund LLC (“MLSMF”) (1933 Act File No. 333-128729 and 1940 Act File No. 811-21258), as filed with the Securities and Exchange Commission (the “SEC”) on June 29, 2006 (“MLSMF’s Registration Statement on Form N-2”).

ITEM 3. FEE TABLE AND SYNOPSIS

     The following table describes the fees and expenses that an investor that buys and holds interests in the Master Fund will pay. The table reflects all expected ordinary operating expenses of the Master Fund. The purpose of the table is to assist an investor in understanding the various costs and expenses that an investor in the Master Fund will bear.

     Investors in the Master Fund will also bear any asset-based and performance-based fees and other expenses incurred by the Master Fund as an investor in the underlying investment vehicles in which the Master Fund invests its assets. These indirect items are not reflected in the following table or the example below. For a more complete description of the various fees and expenses of the Master Fund, see sections “Summary of Fees and Expenses” and “Fund Expenses” in MLSMF’s prospectus included in MLSMF’s Registration Statement on Form N-2.

Annual Expenses (as a percentage of net assets of the Master Fund):
Management Fee	1.25	%
Other Expenses(1)	0.61	%
Total Annual Expenses	1.86	%

(1) Because the Master Fund is a newly established investment company registered under the Investment Company Act of 1940, as amended, Other Expenses have been estimated based on anticipated contributions to the Master Fund and anticipated expenses for the current fiscal year. Other Expenses have been estimated based upon Master Fund assets of $99,342,662 and consist of fees and expenses including, without limitation, an administrative fee of 0.20% of the Master Fund’s net assets, custodian fees and expenses, Directors’ fees and Directors’ and officers’ insurance, and expenses in connection with the ongoing offering of the Master Fund’s interests. Certain transaction fees, management, incentive and administrative fees and other expenses applicable to feeder funds that invest in the Master Fund are applied at the feeder fund level rather than at the Master Fund level.

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Example

     You would pay the following expenses on a $1,000 investment in the Master Fund, assuming a 5% annual return:

1 year	3 years	5 years	10 years
$24	$74	$127	$276

     The example is based on the fees and expenses set out above and should not be considered a representation of future expenses. Actual expenses may be greater or less than those shown.

     Moreover, the rate of return of the Master Fund may be greater or less than the hypothetical 5% return used in the example. The Master Fund cannot provide assurance that it will achieve a 5% return, or any return, on its investments. A greater rate of return than that used in the example would increase the amount of certain fees and expenses.

ITEM 8. GENERAL DESCRIPTION OF THE REGISTRANT

     Mercantile Long-Short Manager Master Fund LLC is registered under the 1940 Act as a closed-end, non-diversified management investment company. The Master Fund was organized as a limited liability company under the laws of the State of Delaware on August 4, 2005. The Master Fund is a “master” fund within what is known in the investment company industry as a “master-feeder” structure. Within this structure, one or more feeder funds invest all or substantially all of their investable assets in a master fund. The feeder funds’ investment objectives are the same as those of the master fund. Information about the Master Fund and the master-feeder structure of which it forms a part is incorporated herein by reference from sections “The Fund’s Structure” and “Structural Diagram” in MLSMF’s prospectus included in MLSMF’s Registration Statement on Form N-2.

     Interests in the Master Fund are issued solely in private placement transactions that do not involve any “public offering” within the meaning of Section 4(2) of, and/or Regulation D under, the 1933 Act. Investments in the Master Fund generally may be made only by U.S. and non-U.S. investment companies or other investment vehicles that are both “accredited investors” within the meaning of Regulation D under the 1933 Act and “qualified clients,” as defined in Rule 205-3 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). The Master Fund may decline to accept any investment in its discretion. This Registration Statement, as amended, does not constitute an offer to sell, or the solicitation of an offer to buy, any “security” within the meaning of the 1933 Act.

     Information on the Master Fund’s investment objective, strategies and policies, the kinds of securities in which the Master Fund principally invests, other investment practices of the Master Fund and the risk factors associated with investments in the Master Fund are incorporated herein by reference from the sections “Investment Program,” “Investment Policies and Restrictions,” “Types of Investments and Related Risks” and “Other Risks” in MLSMF’s prospectus included in MLSMF’s Registration Statement on Form N-2.

ITEM 9. MANAGEMENT

     A description of how the business of the Master Fund is managed is incorporated herein by reference from the sections “Management of the Fund,” “The Manager,” “The Adviser,” “Investment Management Agreements,” “Investment Advisory Agreement,” “Administrator,” “Custodian and Escrow Agent,” and “Fund Expenses” in MLSMF’s prospectus included in MLSMF’s Registration Statement on Form N-2. The following list identifies the specific sections of MLSMF’s prospectus under which the information required by Item 9 of Form N-2 may be found; each listed section is incorporated herein by reference.

Item 9.1(a)	Management of the Fund – Board of Directors; Directors and Officers
Item 9.1(b)	The Manager; The Adviser; Investment Management Agreements; Investment Advisory Agreement
Item 9.1(c)	The Adviser
Item 9.1(d)	Administrator

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Item 9.1(e)	Custodian and Escrow Agent
Item 9.1(f)	Summary of Fees and Expenses; Fund Expenses; Management Fee
Item 9.1(g)	Brokerage
Item 9.2(a)	Not Applicable
Item 9.2(b)	Not Applicable
Item 9.2(c)	Not Applicable
Item 9.2(d)	Not Applicable

     Mercantile Capital Advisors, Inc. (the “Manager”) is the investment manager of the Master Fund and oversees the management of the day-to-day operations of the Master Fund under the supervision of the Master Fund’s Board of Directors (the “Board”). The Manager is registered as an investment adviser under the Advisers Act and is a corporation formed under the laws of the State of Maryland. The Manager is a wholly-owned subsidiary of Mercantile-Safe Deposit & Trust Company (“MSD&T”). Mercantile Bankshares Corporation (“MBC”) is a holding company for MSD&T and its affiliates.

     The Manager has delegated its responsibilities for formulating a continuing investment program for the Master Fund and decisions regarding the Master Fund’s purchases and withdrawals of interests in the investment funds in which the Master Fund invests to Advantage Advisers Management, L.L.C. (the “Adviser”), a Delaware limited liability company. The Adviser is part of the Alternative Investments Group of Oppenheimer Asset Management Inc., an affiliate of Oppenheimer & Co. Inc. Oppenheimer’s Alternative Investments Group provides high net worth and institutional investors with a wide range of non-traditional investment strategies and services through its consulting services, managed account capabilities and numerous proprietary strategies.

ITEM 9.3. CONTROL PERSONS'

     MLSMF, a Delaware limited liability company, and Mercantile Long-Short Manager Offshore Fund for Tax-Exempt/Deferred Investors (TEDI) LDC, a Cayman Islands limited duration company (the “Offshore Fund”), each will invest substantially all of its assets in the Master Fund. MLSMF and the Offshore Fund, in the aggregate, are expected to own 100% of the beneficial interests of the Master Fund. The Offshore Fund will be controlled by Mercantile Long-Short Manager Fund for Tax-Exempt/Deferred Investors (TEDI) LLC, a Delaware limited liability company, which will invest substantially all of its assets in the Offshore Fund and will act as the managing member of the Offshore Fund. Additional information about control persons of the Master Fund is incorporated herein by reference from the section “Outstanding Securities” in MLSMF’s prospectus included in MLSMF’s Registration Statement on Form N-2.

ITEM 10. CAPITAL STOCK, LONG-TERM DEBT, AND OTHER SECURITIES

ITEM 10.1. CAPITAL STOCK

     The Master Fund is organized as a limited liability company under the laws of the State of Delaware and intends to be classified as a partnership for income tax purposes. An investor that acquires an interest in the Master Fund (a “Member”) will agree to be bound by, and its rights in the Master Fund will be established and governed by, the Limited Liability Company Agreement dated August 4, 2005 (as amended from time to time, the “LLC Agreement”), which is included as an exhibit to this Registration Statement. The following is a summary description of certain provisions of the LLC Agreement. The description of such provisions is not definitive and is qualified in its entirety by reference to the LLC Agreement.

     The beneficial interest in the Master Fund are divided into interests (“Interests”). The amount of Interests in the Master Fund is unlimited. All Interests issued by the Master Fund are fully paid and nonassessable. Members have no preemptive or other rights to subscribe to any additional Interests or other securities issued by the Master Fund.

     The Board is vested with the right, power and authority to do all things necessary to carry out the investment objective and business of the Master Fund. Members in their capacity as such have no right to participate in the

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management or control of the Master Fund and may not act for or bind the Master Fund. Members have the right to vote only (i) for the election of Directors; (ii) with respect to any amendment of the LLC Agreement, to the extent and as set forth therein; and (iii) with respect to such additional matters relating to the Master Fund as may be required by the LLC Agreement, applicable law, or as the Board may consider necessary or desirable. The Board may call a meeting of Members to fill any vacancy in the position of a Director, and must do so within 60 days after any date on which Directors who were elected by the Members cease to constitute a majority of the Board then serving.

     With respect to any matter, each Member has the right to cast a number of votes based on the value of the Member’s investment percentage at a meeting of Members called by the Board or by Members holding at least a majority of the total number of votes eligible to be cast. Members may vote in person or by proxy. Only matters set forth in the notice of a meeting may be voted on by Members at a meeting.

     Prospective investors may be admitted as Members to the Master Fund as set forth in the LLC Agreement upon, among other things, execution and delivery of the Master Fund’s investor application or certification, or without such execution and delivery, if the prospective investor through its action, including payment for an Interest, complies with the conditions of becoming a Member and agrees to be bound by the terms of the LLC Agreement. The Board may in its sole discretion reject any subscription for Interests. The Board may suspend subscriptions for Interests at any time. Interests will be issued only in transactions not requiring registration under the 1933 Act.

     The Master Fund shall be dissolved by an affirmative vote by: (1) the Board or (2) Members holding at least two-thirds (2/3) of the total number of votes eligible to be cast by all Members; or upon the expiration of any two-year period that commences on the date on which any Member has submitted a written notice to the Master Fund requesting to tender its entire Interest for repurchase by the Master Fund if that Interest has not been repurchased by the Master Fund; or upon the failure of Members to elect successor Directors at a meeting called by the Manager when no Director remains to continue the business of the Master Fund; or as required by operation of law. Upon the occurrence of any event of dissolution, the Board or the Manager, acting as liquidator under appointment by the Board (or another liquidator, if the Board does not appoint the Manager to act as liquidator or is unable to perform this function), are charged with winding up the affairs of the Master Fund and liquidating its assets. Upon the liquidation of the Master Fund, its assets would be distributed (1) first to satisfy the debts, liabilities and obligations of the Master Fund (other than debts to Members) including actual or anticipated liquidation expenses, (2) next to repay debts owing to the Members, and (3) finally to the Members proportionately in accordance with the balances in their respective capital accounts. Assets may be distributed in kind on a pro rata basis if the Board or liquidator determines that the distribution of assets in kind would be in the interests of the Members in facilitating an orderly liquidation.

     The Master Fund may merge or consolidate with or into one or more limited liability companies formed under the Delaware Limited Liability Company Act (“Delaware Act”) or other business entities pursuant to an agreement of merger or consolidation which has been approved in the manner contemplated by Section 18-209(b) of the Delaware Act. The Master Fund may sell, lease or exchange all or substantially all of the Master Fund’s property upon such terms and conditions when and as authorized by the Board.

     No Member or other person holding an Interest or a portion thereof has the right to require the Master Fund to redeem its Interest or a portion thereof. No public market exists for the Interests and none is expected to develop. Consequently, Members may not be able to liquidate their investment other than as a result of repurchases of Interests by the Master Fund. The Board, from time to time, in its sole discretion and on such terms and conditions as it may determine, may cause the Master Fund to repurchase Interests or portions thereof pursuant to written tenders. The Board expects that the Master Fund will offer to repurchase Interests from Members on a quarterly basis in order to permit MLSMF, the Offshore Fund and other feeder funds to conduct repurchase offers for their interests. However, there is no assurance that the Board will, in fact, decide to undertake any repurchase offer. The Master Fund will repurchase Interests or portions thereof only on terms fair to the Master Fund and all Members.

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ITEM 10.2. LONG-TERM DEBT

     Not applicable.

ITEM 10.3. GENERAL

     Not applicable.

ITEM 10.4. TAXES

     Information on the taxation of the Master Fund is incorporated by reference from the section “Tax Aspects” in MLSMF’s prospectus included in MLSMF’s Registration Statement on Form N-2.

ITEM 10.5. OUTSTANDING SECURITIES

(1) Title of Class	(2) Amount Authorized	(3) Amount Held by Registrant or for its Own Account	(4) Amount Outstanding Exclusive of Amount Shown Under (3), as of May 10, 2006
Limited Liability	Unlimited	N/A	$108,500
Company Interests

ITEM 10.6. SECURITIES RATINGS

     Not applicable.

ITEM 11. DEFAULTS AND ARREARS ON SENIOR SECURITIES

     Not applicable.

ITEM 12. LEGAL PROCEEDINGS

     Not applicable.

ITEM 13. TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION

     Not applicable.

PART B

     Part B of this Registration Statement of Mercantile Long-Short Manager Master Fund LLC should be read in conjunction with Part A. Capitalized terms used in this Part B and not otherwise defined have the meanings given them in Part A of this Registration Statement.

     Responses to certain Items required to be included in Part B of this Registration Statement are incorporated herein by reference form MLSMF’s Registration Statement on Form N-2.

ITEM 14. COVER PAGE

     Not applicable.

ITEM 15. TABLE OF CONTENTS

     Not applicable.

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ITEM 16. GENERAL INFORMATION AND HISTORY

     Not applicable.

ITEM 17. INVESTMENT OBJECTIVE AND POLICIES

     Information on the fundamental investment restrictions and the non-fundamental investment policies and restrictions of the Master Fund, the types of securities bought and investment techniques used by the Master Fund and certain risks attendant thereto, as well as other information on the Master Fund’s investment program, is incorporated by reference from the sections “Investment Program,” “Investment Policies and Restrictions,” “Types of Investments and Related Risks” and “Other Risks” in MLSMF’s prospectus included in MLSMF’s Registration Statement on Form N-2.

ITEM 18. MANAGEMENT

     Information about the Directors and officers of the Master Fund, their roles in the management of the Master Fund, the compensation of the Directors, and the committees of the Board of the Master Fund is incorporated by reference from the sections “Management of the Fund” and “Codes of Ethics” in MLSMF’s prospectus included in MLSMF’s Registration Statement on Form N-2.

ITEM 19. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

     MLSMF and the Offshore Fund each will invest substantially all of its assets in the Master Fund and, in the aggregate, are expected to own 100% of the Interests. Because MLSMF and the Offshore Fund may at that time be deemed to control the Master Fund, MLSMF and the Offshore Fund may take actions affecting the Master Fund without the approval of any other investor. The addition of other investors in the Master Fund may alter MLSMF’s and the Offshore Fund’s ability to control the Master Fund.

     Each of MLSMF and the Offshore Fund has informed the Master Fund that whenever it is requested to vote on any proposal of the Master Fund, it will seek voting instructions from its interest holders on such proposal and, if required, will hold a meeting of the interest holders, and will cast its vote as instructed by its interest holders. It is anticipated that any other investor in the Master Fund would follow the same or a similar practice.

The address of MLSMF and the Offshore Fund is the same as that of the Master Fund.

As of June 30, 2006, no Director or officer of the Master Fund owned any Interests.

ITEM 20. INVESTMENT ADVISORY AND OTHER SERVICES

     Information on the investment management and other services provided for or on behalf of the Master Fund is incorporated herein by reference from the following sections in MLSMF’s prospectus included in MLSMF’s Registration Statement on Form N-2; each section is incorporated herein by reference.

Item 20.1 (a)	The Adviser
Item 20.1 (b)	The Adviser
Item 20.1 (c)	Investment Advisory Agreement; Management Fee; Incentive Fee
Item 20.2	The Adviser; Investment Advisory Agreement
Item 20.3	Not Applicable
Item 20.4	The Manager; Investment Management Agreements; Administrator; Custodian and Escrow Agent
Item 20.5	Not Applicable
Item 20.6	Custodian and Escrow Agent
Item 20.7	Accountants and Legal Counsel
Item 20.8	Not Applicable

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ITEM 21. PORTFOLIO MANAGERS

     Information concerning the Adviser’s compensation structure, other accounts managed by the Adviser, potential conflicts of interest and the Adviser’s security ownership is incorporated herein by reference from the section “The Adviser” and “Conflicts of Interest” in MLSMF’s prospectus included in MLSMF’s Registration Statement on Form N-2.

ITEM 22. BROKERAGE ALLOCATION AND OTHER PRACTICES

     A description of the Master Fund’s brokerage allocation and other practices is incorporated herein by reference from the section “Brokerage” in MLSMF’s prospectus included in MLSMF’s Registration Statement on Form N-2.

ITEM 23. TAX STATUS

     Information on the taxation of the Master Fund is incorporated by reference from the section “Tax Aspects” in MLSMF’s prospectus included in MLSMF’s Registration Statement of Form N-2.

ITEM 24. FINANCIAL STATEMENTS

Financial statements of the Master Fund are presented beginning on the following page.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Member and Board of Directors of
Mercantile Long-Short Manager Master Fund LLC:

We have audited the accompanying statement of assets and liabilities of Mercantile Long-Short Manager Master Fund LLC (the "Fund") and the related statement of operations as of and for the period ended May 10, 2006. These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Mercantile Long-Short Manager Master Fund LLC as of May 10, 2006 and the results of its operations for the period then ended, in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP
Chicago, Illinois
June 2, 2006

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Mercantile Long-Short Manager Master Fund LLC
Statement of Assets and Liabilities
May 10, 2006

Assets
Cash and cash equivalents	$	108,500
Total assets		108,500
Liabilities
Organization costs payable		8,500
Total liabilities		8,500
Net assets	$	100,000
Member's capital	$	100,000

The accompanying notes are an integral part of the financial statements.

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Mercantile Long-Short Manager Master Fund LLC
Statement of Operations
Period Ended May 10, 2006

Expenses
Organization costs	$	8,500
Total expenses		8,500
Net investment loss		(8,500	)
Net decrease in member's capital from operating activities	$	(8,500	)

The accompanying notes are an integral part of the financial statements.

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Mercantile Long-Short Manager Master Fund LLC
Notes to Financial Statements
May 10, 2006

1.	Organization
	Mercantile Long-Short Manager Master Fund LLC (the “Master Fund”) is a limited liability company organized under the laws of the state of Delaware and registered under the Investment Company Act of 1940, as amended (the “1940 Act”) as a closed-end, non-diversified, investment management company on August 4, 2005. The Master Fund is a “master” fund within a “master-feeder” structure. Within this structure, one or more feeder funds invest all or substantially all of their investable assets in a master fund. The feeder funds’ investment objectives are substantially the same as those of the master fund.
	The Master Fund seeks capital appreciation by investing substantially all of its assets in privately placed investment vehicles, typically referred to as hedge funds (“Investment Funds”) managed by third-party investment managers (“Investment Managers”) who employ a variety of alternative investment strategies. The Master Fund invests in a portfolio of Investment Funds that have either a low correlation with the equity and fixed income markets, or which, when balanced with other strategies, lower the correlation of the Master Fund’s total performance to the equity and fixed income markets. The asset-based fees of the Investment Managers are generally expected to range from 1% to 3% annually of the net assets under their management and the performance or incentive allocations to the Investment Managers are generally expected to be 20% of net profits annually.
	The Master Fund’s Board of Directors (the "Board") has overall responsibility to manage and control the business operations of the Master Fund on behalf of the members. At least a majority of the Board is and will be persons who are not "interested persons" (as defined in the 1940 Act) with respect to the Master Fund.
	Mercantile Capital Advisors, Inc. (“MCA” or the “Managing Member”) serves as the investment manager of the Master Fund subject to the ultimate supervision of and any policies established by the Board, pursuant to the terms of an investment management agreement with the Master Fund. MCA provides the Master Fund with ongoing investment guidance, policy direction, and monitoring of the Master Fund.
	MCA is registered as an investment adviser under the Investment Advisers Act of 1940, as amended. MCA is a wholly owned subsidiary of Mercantile Safe Deposit & Trust Company (“MSD&T”) which is a wholly owned subsidiary of Mercantile Bankshares Corporation (“MBC”), a financial holding company.
	Initial and additional subscriptions for limited liability company interests (“Interests”) by eligible members are generally accepted at the beginning of each calendar month, unless otherwise determined at the discretion of MCA. The Master Fund reserves the right to reject any subscriptions for Interests in the Master Fund. The Master Fund from time to time may offer to repurchase outstanding Interests pursuant to written tenders by members. These repurchases will be made at such times and on such terms as may be determined by the Board, in its complete and absolute discretion. The Managing Member expects the Master Fund to repurchase Interests on September 30, 2006 and quarterly thereafter.

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Mercantile Long-Short Manager Master Fund LLC
Notes to Financial Statements
May 10, 2006

2.	Significant Accounting Policies
The Master Fund’s financial statements are prepared in conformity with accounting principles generally accepted in the United States. The following is a summary of the significant accounting policies followed by the Master Fund:
A.	Portfolio Valuation
	The net asset value of the Master Fund is determined as of the close of business at the end of each month in accordance with the valuation principles set forth below or as may be determined from time to time pursuant to policies established by the Board.
	Investments in Investment Funds are presented in the accompanying financial statements at fair value. Fair value as of each month-end ordinarily will be the value determined as of such month-end for each Investment Fund in accordance with the Investment Fund’s valuation policies and reported at the time of the Master Fund’s valuation. As a general matter, the fair value of the Master Fund’s interest in an Investment Fund will represent the amount that the Master Fund could reasonably expect to receive from an Investment Fund if the Master Fund’s interest were redeemed at the time of valuation, based on information reasonably available at the time the valuation is made and that the Master Fund believes to be reliable. In the unlikely event that an Investment Fund does not report a month-end value to the Master Fund on a timely basis, the Master Fund would determine the fair value of such Investment Fund based on the most recent value reported by the Investment Fund, as well as any other relevant information available at such time.
	Considerable judgment is required to interpret the factors used to develop estimates of fair value. Accordingly, the estimates may not be indicative of the amounts the Master Fund could realize in a current market exchange and the differences could be material to the financial statements. The use of different factors or estimation methodologies could have a significant effect on the estimated fair value.
B.	Income Recognition and Security Transactions
	Interest income is recorded on an accrual basis. Dividend income is recorded on the ex-dividend date. Realized gains and losses from Investment Fund transactions are calculated on the identified cost basis. Investments are recorded on the effective date of the subscription in the Investment Fund.
	Distributions from Investment Funds, if any, will be classified as investment income or realized gains in the Statement of Operations, or alternatively, as a decrease to the cost of the investments based on the U.S. income tax characteristics of the distribution if such information is available. In cases where the tax characteristics of a distribution from an Investment Fund are not available, such distribution will be classified as investment income.

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Mercantile Long-Short Manager Master Fund LLC
Notes to Financial Statements
May 10, 2006

C.	Fund Expenses
	The Master Fund will bear all expenses incurred in its business. The expenses of the Master Fund include, but are not limited to, the following: all costs and expenses related to investment transactions and positions for the Master Fund's account; legal fees; accounting and auditing fees; custodial fees; costs of computing the Master Fund's net asset value; costs of insurance; registration expenses; due diligence, including travel and related expenses; expenses of meetings of the Board and members; all costs with respect to communications to members; and other types of expenses as may be approved from time to time by the Board.
D.	Income Taxes
	The Master Fund intends to be treated as a partnership for Federal income tax purposes. Each member is responsible for the tax liability or benefit relating to their distributive share of taxable income or loss. Accordingly, no provision for Federal income taxes is reflected in the accompanying financial statements.
E.	Distribution Policy
	The Master Fund has no present intention of making periodic distributions of its net investment income or capital gains, if any, to members. The amount and frequency of distributions, if any, will be determined in the sole discretion of the Board.
F.	Cash and Cash Equivalents
	The Master Fund treats all highly liquid financial instruments with an original maturity of three months or less as cash equivalents.
G.	Capital Accounts
	Net profits or net losses of the Master Fund for each fiscal period will be allocated to the capital accounts of members as of the last day of each fiscal period in accordance with members’ respective investment percentages of the Master Fund. Net profits or net losses will be measured as the net change in the value of the net assets of the Master Fund during a fiscal period, before giving effect to any repurchases of interest in the Master Fund, and excluding the amount of any items to be allocated to the capital accounts of the members of the Master Fund, other than in accordance with the members’ respective investment percentages.
H.	Use of Estimates
	The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires MCA to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reported period. MCA believes that the estimates utilized in preparing the Master Fund’s financial statements are reasonable and prudent; however, actual results could differ from these estimates.

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Mercantile Long-Short Manager Master Fund LLC
Notes to Financial Statements
May 10, 2006

3.	Management Fee, Incentive Fee, Related Party Transactions and Other
	The Master Fund pays MCA a quarterly management fee at the annual rate of 1.25% of the net asset value of the Master Fund as of the last day of the quarter including assets attributable to MCA and before giving effect to any repurchases by the Master Fund.
	Advantage Advisers Management, LLC (the “Adviser”) is the investment adviser of the Master Fund. The Adviser is responsible for providing day-to-day investment management services to the Master Fund. In consideration for such services, MCA pays the Adviser half of the management and incentive fees earned from the Master Fund.
	The Master Fund has also retained MCA to serve as the administrator to the Master Fund. The Master Fund will pay MCA an administration fee. MCA has engaged SEI Investments Global Fund Services (“SEI”) to serve as the Master Fund's sub-administrator. SEI provides administrative, accounting, and investor services to the Master Fund as well as serving in the capacity of transfer and distribution disbursing agent for the Master Fund. As compensation for services provided, MCA will pay SEI a fee pursuant to a written agreement between MCA and SEI.
	SEI Private Trust Company acts as custodian (the “Custodian”) for the Master Fund’s assets. In consideration for such services, the Master Fund will pay the Custodian a monthly fee, based on month-end net assets, at an annual rate of up to 0.01%.
4.	Concentration of Risk
	The Master Fund invests primarily in Investment Funds that are not registered under the 1940 Act and invest in and actively trade securities and other financial instruments using different strategies and investment techniques that may involve significant risks. These Investment Funds may invest a high percentage of their assets in specific sectors of the market in order to achieve a potentially greater investment return. As a result, the Investment Funds may be more susceptible to economic, political, and regulatory developments in a particular sector of the market, positive or negative, and may experience increased volatility of the Investment Funds’ net asset value.
	Various risks are also associated with an investment in the Master Fund, including risks relating to the multi- manager structure of the Master Fund, risks relating to compensation arrangements and risks relating to the limited liquidity of Interests.
	In the normal course of business the Master Fund enters into contracts that contain a variety of representations, which provide general indemnifications. The Master Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Master Fund that have not yet occurred. However, based on experience, the Master Fund expects the risk of loss to be remote.

15

PART C
OTHER INFORMATION

ITEM 25. FINANCIAL STATEMENTS AND EXHIBITS

(1)	Financial Statements:
	Included in Part B of this Registration Statement:
	Report of Independent Registered Public Accounting Firm, dated June 2, 2006
	Statement of Assets and Liabilities as of May 10, 2006
	Statement of Operations for the period ended May 10, 2006
	Notes to Financial Statements, dated May 10, 2006
(2)	Exhibits:

(a)(i)	Certificate of Formation(1)
(a)(ii)	Limited Liability Company Agreement
(b)	Not applicable
(c)	Not applicable
(d)	Refer to Exhibit (a)(ii)
(e)	Not applicable
(f)	Not applicable
(g)(i)	Form of Investment Management Agreement between Registrant and Mercantile Capital
	Advisors, Inc.(2)
(g)(ii)	Form of Investment Advisory Agreement among Registrant, Mercantile Capital Advisors, Inc.
	and Advantage Advisers Management, L.L.C.(2)
(h)	Not applicable
(i)	Not applicable
(j)	Form of Custodian Services Agreement between Registrant and SEI Private Trust Company
(k)(i)	Form of Administration Agreement between Registrant and Mercantile Capital Advisors, Inc.
(k)(ii)	Form of Sub-Administration Agreement between Mercantile Capital Advisors, Inc. and SEI
	Investments Global Funds Services(2)
(k)(iii)	Form of Expense Limitation Agreement among Registrant, Mercantile Long-Short Manager Fund
	LLC and Mercantile Capital Advisors, Inc.(2)
(l)	Not applicable
(m)	Not applicable
(n)(i)	Opinion and Consent of Davis Polk & Wardwell on tax matters
(n)(ii)	Consent of Independent Registered Public Accounting Firm
(o)	Not applicable
(p)	Form of Agreement Regarding Initial Capital(1)
(q)	Not applicable
(r)(i)	Code of Ethics of the Registrant(1)
(r)(ii)	Code of Ethics of Mercantile Capital Advisors, Inc.(1)
(r)(iii)	Code of Ethics of Advantage Advisers Management, L.L.C.(1)
(s)	Powers of Attorney(1)

(1)	Incorporated by reference to the Registrant’s Registration Statement on Form N-2 filed with the SEC on September 30, 2005 (Exhibits (2)(a)(i), (2)(p), (2)(r)(i)-(iii) and (2)(s)) (Reg. No. 811-21818).
(2)	Incorporated herein by reference to MLSMF’s Registration Statement on Form N-2 (1933 Act File No. 333-128729 and 1940 Act File No. 811-21258) filed with the SEC on June 29, 2006 (Exhibits 2(g)(ii), (2)(g)(iii), (2)(k)(ii) and (2)(k)(iv)).

16

ITEM 26. MARKETING ARRANGEMENTS

     Not applicable.

ITEM 27. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

All figures are estimates.
Registration fees	$	0
Accounting fees and expenses	$	8,500
Legal fees and expenses	$	30,000
Printing and engraving expenses	$	500
[Other expenses]	$	1,000
Total	$	40,000

ITEM 28. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL

     The following entities may be considered to be under common control with the Registrant at the time of this filing:

Mercantile Long-Short Manager Fund LLC;

Mercantile Long-Short Manager Fund for Tax-Exempt/Deferred Investors (TEDI) LLC;

Mercantile Alternative Strategies Fund LLC;

Mercantile Alternative Strategies Fund for Tax-Exempt/Deferred Investors (TEDI) LLC;

Mercantile Alternative Strategies Master Fund LLC;

Mercantile Absolute Return Fund LLC;

Mercantile Absolute Return Fund for Tax-Exempt/Deferred Investors (TEDI) LLC;

Mercantile Absolute Return Master Fund LLC;

(each organized under the laws of Delaware); and

Mercantile Funds, Inc. (organized under the laws of Maryland)

     Each of these entities has a Board of Directors that is identical in composition to the Board of Directors of each other entity and the Registrant. In addition, Mercantile-Safe Deposit & Trust Company, a trust company licensed in the State of Maryland, owns in excess of 25% of the voting securities of each of the above entities. MSD&T is a wholly-owned subsidiary of Mercantile Bankshares Corporation, a financial holding company regulated by the Board of Governors of the Federal Reserve System. MBC owns in excess of 25% of each of the above entities other than Mercantile Funds, Inc.

ITEM 29. NUMBER OF HOLDERS OF SECURITIES

     The following table sets forth the number of record holders of each class of the Registrant’s securities at May 31, 2006.

Title of Class	Number of Record Holders
Limited liability company interests	1

17

ITEM 30. INDEMNIFICATION

     Registrant’s LLC Agreement contains provisions limiting the liability, and providing indemnification, of the Registrant’s Directors and officers under certain circumstances.

     Registrant hereby undertakes that it will apply the indemnification provision of the Registrant’s LLC Agreement in a manner consistent with Release 40-11330 of the SEC under the 1940 Act, so long as the interpretation therein of Sections 17(h) and 17(i) of such Act remains in effect.

     Insofar as indemnification for liability arising under the 1933 Act, may be permitted to Directors, officers and controlling persons of the Registrant pursuant to the provisions described in this Item 30, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a Director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such Director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue.

ITEM 31. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

     Information as to the directors, executive officers and members of Mercantile Capital Advisors, Inc., the Registrant’s investment manager, and of Advantage Advisers Management, L.L.C., the Registrant’s investment adviser, together with information as to any other business, profession, vocation or employment of a substantial nature engaged in by such persons or entities in the last two years is incorporated by reference from “Item 31. Business and Other Connections of Investment Adviser” in MLSMF’s Registration Statement on Form N-2.

ITEM 32. LOCATION OF ACCOUNTS AND RECORDS

     All accounts, books and other documents required to be maintained by Section 31(a) of the 1940 Act and the rules thereunder are maintained at the offices of Mercantile Capital Advisors, Inc., the Registrant’s investment manager and administrator, at Two Hopkins Plaza, Baltimore, Maryland 21201.

ITEMS 33. MANAGEMENT SERVICES

     Not applicable.

ITEM 34. UNDERTAKINGS

     Not applicable.

18

SIGNATURES

     Pursuant to the requirements of the Investment Company Act of 1940, as amended, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Baltimore, Maryland, on the 29^th day of June 2006.

	Mercantile Long-Short Manager Master Fund LLC
	By:	*
		Name:	Kevin A. McCreadie
		Title:	President
*By:	/s/ Savonne L. Ferguson
	as attorney-in-fact

* Pursuant to power of attorney filed as part of the Registrant’s Registration Statement on Form N-2 filed with the SEC on September 30, 2005 (Exhibit (2)(s)) (Reg. No. 811-21818).

19

INDEX TO EXHIBITS
Exhibit Number	Description
2(a)(ii)	Limited Liability Company Agreement
2(j)	Form of Custodian Services Agreement between Registrant and SEI Private Trust Company
2(k)(ii)	Form of Administration Agreement between Registrant and Mercantile Capital Advisors, Inc.
2(n)(i)	Opinion and Consent of Davis Polk & Wardwell on tax matters
2(n)(ii)	Consent of Independent Registered Public Accounting Firm

20

EX-2.A.II

Exhibit 2(a)(ii)

MERCANTILE LONG-SHORT MANAGER MASTER FUND LLC

LIMITED LIABILITY COMPANY AGREEMENT

August 4, 2005

Table of Contents
			Page
Article I. Definitions			1
Section	1.1.	ADMINISTRATIVE SERVICES	1
Section	1.2.	ADMINISTRATOR	1
Section	1.3.	ADMINISTRATION AGREEMENT	1
Section	1.4.	ADVISER	2
Section	1.5.	ADVISERS ACT	2
Section	1.6.	AFFILIATE	2
Section	1.7.	AGREEMENT	2
Section	1.8.	BOARD	2
Section	1.9.	CAPITAL ACCOUNT	2
Section	1.10.	CERTIFICATE	2
Section	1.11.	CHAIRMAN	2
Section	1.12.	CLOSING DATE	2
Section	1.13.	CODE	2
Section	1.14.	DELAWARE ACT	2
Section	1.15.	DIRECTOR	2
Section	1.16.	FISCAL PERIOD	2
Section	1.17.	FISCAL YEAR	3
Section	1.18.	FORM N-2	3
Section	1.19.	INDEPENDENT DIRECTORS	3
Section	1.20.	INTEREST	3
Section	1.21.	INVESTMENT ADVISORY AGREEMENT	3
Section	1.22.	INVESTMENT FUNDS	3
Section	1.23.	INVESTMENT MANAGERS	3
Section	1.24.	INVESTMENT MANAGEMENT AGREEMENT	3
Section	1.25.	INVESTMENT PERCENTAGE	3
Section	1.26.	MANAGEMENT FEE	4
Section	1.27.	MANAGER	4
Section	1.28.	MASTER FUND	4
Section	1.29.	MEMBER	4
Section	1.30.	NET ASSETS	4
Section	1.31.	NET PROFITS OR NET LOSSES	4
Section	1.32.	NOTICE DATE	4
Section	1.33.	1940 ACT	4
Section	1.34.	ORGANIZATIONAL MEMBER	4
Section	1.35.	PERSON	5
Section	1.36.	PLACEMENT AGENT	5
Section	1.37.	PROMISSORY NOTE	5
Section	1.38.	SECURITIES	5
Section	1.39.	TAXABLE YEAR	5
Section	1.40.	TRANSFER	5
Section	1.41.	VALUATION DATE	5

i

Table of Contents
			Page
Article II. ORGANIZATION; ADMISSION OF MEMBERS			5
Section	2.1.	Formation of Limited Liability Company	5
Section	2.2.	Name	5
Section	2.3.	Principal and Registered Office	6
Section	2.4.	Duration	6
Section	2.5.	Objective and Business of the Master Fund	6
Section	2.6.	Board of Directors	6
Section	2.7.	Members	7
Section	2.8.	Placement Fees	7
Section	2.9.	Limited Liability	8
Article III. MANAGEMENT			8
Section	3.1.	Management and Control	8
Section	3.2.	Actions by the Board of Directors	9
Section	3.3.	Meetings of Members	10
Section	3.4.	Custody of Assets of the Master Fund	10
Section	3.5.	Other Activities of Members, the Manager and Directors	11
Section	3.6.	Duty of Care	11
Section	3.7.	Indemnification	11
Section	3.8.	Fees, Expenses and Reimbursement	14
Article IV. TERMINATION OF STATUS OF MANAGER AND DIRECTORS,
TRANSFERS AND REPURCHASES			15
Section	4.1.	Termination of Status of the Manager	15
Section	4.2.	Termination of Status of a Director	16
Section	4.3.	Removal of the Directors	16
Section	4.4.	Removal of the Manager	16
Section	4.5.	Transfer of Interests of Members	16
Section	4.6.	Repurchase of Interests	17
Article V. CAPITAL			20
Section	5.1.	Contributions to Capital	20
Section	5.2.	Rights of Members to Capital	20
Section	5.3.	Capital Accounts	20
Section	5.4.	Allocation of Net Profits and Net Losses	21
Section	5.5.	Allocation of Insurance Premiums and Proceeds	21
Section	5.6.	Allocation of Certain Expenditures	22
Section	5.7.	Reserves	22
Section	5.8.	Tax Allocations	22
Section	5.9.	Distributions	24
Section	5.10.	Withholding	24
Article VI. DISSOLUTION AND LIQUIDATION			25
Section	6.1.	Dissolution	25
Section	6.2.	Liquidation of Assets	25

ii

Table of Contents
			Page
Article VII. ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS			26
Section	7.1.	Accounting and Reports	26
Section	7.2.	Determinations by the Board of Directors	27
Section	7.3.	Valuation of Assets	27
Article VIII. MISCELLANEOUS PROVISIONS			27
Section	8.1.	Amendment of Limited Liability Company Agreement	27
Section	8.2.	Special Power of Attorney	28
Section	8.3.	Notices	30
Section	8.4.	Agreement Binding Upon Successors and Assigns	30
Section	8.5.	Applicability of 1940 Act and Form N-2	30
Section	8.6.	Choice of Law; Arbitration	30
Section	8.7.	Not for Benefit of Creditors	31
Section	8.8.	Consents	32
Section	8.9.	Merger and Consolidation	32
Section	8.10.	Pronouns	32
Section	8.11.	Confidentiality	32
Section	8.12.	Severability	33
Section	8.13.	Master-Feeder Structure	33
Section	8.14.	Filing of Returns	33
Section	8.15.	Tax Matters Partner	34
Section	8.16.	Section 754 Election; Mandatory Basis Adjustments	34

iii

LIMITED LIABILITY COMPANY AGREEMENT

OF

MERCANTILE LONG-SHORT MANAGER MASTER FUND LLC

A Delaware Limited Liability Company

Dated as of August 4, 2005

Two Hopkins Plaza, Baltimore, Maryland 21201

(410) 237-5100

     THIS LIMITED LIABILITY COMPANY AGREEMENT of Mercantile Long-Short Manager Master Fund LLC (the “Master Fund”) is dated as of August 4, 2005 by and among Mercantile Capital Advisors, Inc. as the manager (“MCA” or the “Manager”), Mercantile Long-Short Manager Fund LLC as Organizational Member, and those persons hereinafter admitted as Members.

     WHEREAS, the Master Fund has heretofore been formed as a limited liability company under the Delaware Limited Liability Company Act pursuant to an initial Certificate of Formation (the “Certificate”) dated and filed with the Secretary of State of Delaware on August 4, 2005;

     NOW, THEREFORE, for and in consideration of the foregoing and the mutual covenants hereinafter set forth, it is hereby agreed as follows:

Article I.
Definitions

     For purposes of this Agreement:

     Section 1.1. ADMINISTRATIVE SERVICES. Such administrative services as the Administrator may provide to the Master Fund pursuant to a separate written agreement with the Master Fund.

     Section 1.2. ADMINISTRATOR. MCA or any person who may hereafter provide Administrative Services to the Master Fund pursuant to the Administration Agreement. For purposes of this Agreement the term “Administrator” includes a “Sub-Administrator”.

     Section 1.3. ADMINISTRATION AGREEMENT. A separate written agreement entered into by the Master Fund and the Administrator pursuant to which the Administrator provides Administrative Services to the Master Fund.

     Section 1.4. ADVISER. Any person, registered under the Advisers Act, that is retained by the Manager to provide investment advisory services to the Master Fund pursuant to the Investment Advisory Agreement.

     Section 1.5. ADVISERS ACT. The Investment Advisers Act of 1940, as amended, and the rules, regulations and orders thereunder, as amended from time to time, or any successor law.

     Section 1.6. AFFILIATE. Affiliated person as that term is defined in the 1940 Act.

     Section 1.7. AGREEMENT. This Limited Liability Company Agreement, as amended from time to time.

     Section 1.8. BOARD. The Board of Directors established pursuant to Section 2.6.

     Section 1.9. CAPITAL ACCOUNT. With respect to each Member, the capital account established and maintained on behalf of each Member pursuant to Section 5.3.

     Section 1.10. CERTIFICATE. The Certificate of Formation of the Master Fund and any amendments thereto as filed with the office of the Secretary of State of Delaware.

     Section 1.11. CHAIRMAN. The Director selected to preside over meetings of the Board.

     Section 1.12. CLOSING DATE. The first date on or as of which a Member other than the Organizational Member is admitted to the Master Fund.

     Section 1.13. CODE. The United States Internal Revenue Code of 1986, as amended, and as hereafter amended from time to time, or any successor law.

     Section 1.14. DELAWARE ACT. The Delaware Limited Liability Company Act as in effect on the date hereof and as amended from time to time, or any successor law.

     Section 1.15. DIRECTOR. An individual designated as a Director of the Master Fund who is delegated authority provided for in Section 2.6 of this Agreement. For purposes of this Agreement the term “Director” has the same meaning as the term “Manager” as such term is defined under the Delaware Act (but is not the same as the term “Manager” as used in this Agreement).

     Section 1.16. FISCAL PERIOD. The period commencing on the Closing Date of the Master Fund, and thereafter each period commencing on the day following the last day of the preceding Fiscal Period, and ending at the close of business on the first to occur of the following dates:

(a)	the last day of a Fiscal Year;
(b)	the last day of a Taxable Year;

2

(c)	the day preceding the date on which a contribution to the capital of the Master Fund is made;
(d)	the day on which a substitute member is admitted;
(e)	the day on which the Master Fund repurchases any Interest, or portion of an Interest, of a Member; or
(f)	any day on which any amount is credited to, or debited against, the Capital Account of a Member, other than an amount to be credited to, or debited against, the Capital Account of all Members in accordance with their respective Investment Percentages.

     Section 1.17. FISCAL YEAR. The period commencing on the Closing Date and ending on March 31, 2007, and thereafter each period commencing on April 1 of each year and ending on March 31 of the following year (or on the date of a final distribution pursuant to Section 6.2 hereof), unless the Board elects another fiscal year for the Master Fund.

     Section 1.18. FORM N-2. The Master Fund’s Registration Statement on Form N-2 filed with the Securities and Exchange Commission, as amended from time to time.

     Section 1.19. INDEPENDENT DIRECTORS. Those Directors who are not “interested persons” of the Master Fund as such term is defined in the 1940 Act.

     Section 1.20. INTEREST. The ownership interest in the Master Fund at any particular time of a Member, or other person to whom an Interest of a Member or portion thereof has been transferred pursuant to Section 4.5 hereof, including the rights and obligations of such Member or other person under this Agreement and the Delaware Act.

     Section 1.21. INVESTMENT ADVISORY AGREEMENT. A separate written agreement entered into by the Adviser, the Manager and the Master Fund pursuant to which the Adviser provides advisory services to the Master Fund.

     Section 1.22. INVESTMENT FUNDS. Unregistered general or limited partnerships or pooled investment vehicles and/or registered investment companies in which the Master Fund invests its assets that are advised by an Investment Manager.

     Section 1.23. INVESTMENT MANAGERS. Third party investment managers designated by the Adviser to manage a portion of the assets of the Master Fund through the investment by the Master Fund in an Investment Fund.

     Section 1.24. INVESTMENT MANAGEMENT AGREEMENT. Separate written agreements entered into (i) by the Master Fund and the Manager and (ii) by the Master Fund and any feeder fund which invests its assets in the Master Fund, pursuant to which the Manager provides investment management services to the Master Fund.

     Section 1.25. INVESTMENT PERCENTAGE. A percentage established for each Member on the Master Fund’s books as of the first day of each Fiscal Period. The Investment

 3

Percentage of a Member for a Fiscal Period shall be determined by dividing the balance of the Member’s Capital Account as of the commencement of such period by the sum of the Capital Accounts of all of the Members as of the commencement of such period. The sum of the Investment Percentages of all Members for each Fiscal Period shall equal 100%.

     Section 1.26. MANAGEMENT FEE. The fee paid to the Manager out of the Master Fund’s assets pursuant to the Investment Management Agreement, and debited against Members’ Capital Accounts, as provided in Section 3.8(f) of this Agreement.

     Section 1.27. MANAGER. Mercantile Capital Advisors Inc., a Maryland corporation, or any person who may hereinafter serve as the investment manager to the Master Fund pursuant to the Investment Management Agreement.

     Section 1.28. MASTER FUND. The limited liability company governed hereby, as such limited liability company may from time to time be constituted.

     Section 1.29. MEMBER. Any person who shall have been admitted to the Master Fund as a member until the Master Fund repurchases the entire Interest of such person as a member pursuant to Section 4.6 hereof or a substituted member or members are admitted with respect to any such person’s entire Interest as a member pursuant to Section 4.5 hereof.

     Section 1.30. NET ASSETS. The total value of all assets of the Master Fund, less an amount equal to all accrued debts, liabilities and obligations of the Master Fund, calculated before giving effect to any repurchases of Interests.

     Section 1.31. NET PROFITS OR NET LOSSES. The amount by which the Net Assets as of the close of business on the last day of a Fiscal Period exceed (in the case of Net Profit) or are less than (in the case of Net Loss) the Net Assets as of the commencement of the same Fiscal Period (or, with respect to the initial Fiscal Period of the Master Fund, at the close of business on the Closing Date), such amount to be adjusted to exclude:

(a)	the amount of any insurance premiums or proceeds to be allocated among the Capital Accounts of the Members pursuant to Section 5.4 hereof; and
(b)	any items to be allocated among the Capital Accounts of the Members on a basis that is not in accordance with the respective Investment Percentages of all Members as of the commencement of such Fiscal Period pursuant to Section 5.6 and Section 5.7 hereof.

     Section 1.32. NOTICE DATE. The date, as specified in any tender offer made by the Master Fund, by which Members choosing to tender Interests for repurchase must notify the Master Fund of their intent.

     Section 1.33. 1940 ACT. The Investment Company Act of 1940 and the rules, regulations and orders thereunder, as amended from time to time, or any successor law.

     Section 1.34. ORGANIZATIONAL MEMBER. Mercantile Long-Short Manager Fund LLC, a Delaware limited liability company.

4

     Section 1.35. PERSON. Any individual, entity, corporation, partnership, association, limited liability company, joint-stock company, trust, estate, joint venture, organization, or unincorporated organization.

     Section 1.36. PLACEMENT AGENT. An agent hired by the Manager to sell Interests in the Master Fund.

     Section 1.37. PROMISSORY NOTE. A non-interest bearing and non-transferable promise of the Master Fund to pay which will contain terms providing for payment to a redeeming Member at two separate times.

     Section 1.38. SECURITIES. Securities (including, without limitation, equities, debt obligations, options, and other “securities” as that term is defined in Section 2(a)(36) of the 1940 Act) and any contracts for forward or future delivery of any security, debt obligation or currency, or commodity, all types of derivative instruments and any contracts based on any index or group of securities, debt obligations or currencies, or commodities, and any options thereon, as well as investments in registered investment companies and private investment funds.

     Section 1.39. TAXABLE YEAR. The period from January 1 to December 31 of each year.

     Section 1.40. TRANSFER. The assignment, transfer, sale, encumbrance, pledge or other disposition of all or any portion of an Interest, including any right to receive any allocations and distributions attributable to an Interest. Verbs, adverbs or adjectives such as “Transfer,” “Transferred” and “Transferring” have correlative meanings.

     Section 1.41. VALUATION DATE. The date as of which the Interests to be repurchased by the Master Fund are valued by the Master Fund.

Article II.
ORGANIZATION; ADMISSION OF MEMBERS

     Section 2.1. Formation of Limited Liability Company.

     The Board shall execute and file in accordance with the Delaware Act any amendment to the Certificate and shall execute and file with applicable governmental authorities any other instruments, documents and certificates that, in the opinion of the Master Fund’s legal counsel, may from time to time be required by the laws of the United States of America, the State of Delaware or any other jurisdiction in which the Master Fund shall determine to do business, or any political subdivision or agency thereof, or that such legal counsel may deem necessary or appropriate to effectuate, implement and continue the valid existence and business of the Master Fund.

     Section 2.2. Name.

     The name of the Master Fund shall be Mercantile Long-Short Manager Master Fund LLC or such other name as the Board may hereafter adopt upon (i) causing an appropriate amendment

5

to the Certificate to be filed in accordance with the Delaware Act and (ii) sending notice thereof to each Member.

     Section 2.3. Principal and Registered Office.

(a)	The Master Fund shall have its principal office at Two Hopkins Plaza, Baltimore, Maryland, 21201, or at such other place designated from time to time by the Board.
(b)	The Master Fund shall have its registered office in Delaware at 2711 Centreville Road, Suite 400, Wilmington, Delaware, 19808 and shall have Corporation Service Company as its registered agent for service of process in Delaware, unless a different registered office or agent is designated from time to time by the Board.

     Section 2.4. Duration.

     The term of the Master Fund commenced on the filing of the Certificate with the Secretary of State of Delaware and shall continue until the Master Fund is dissolved pursuant to Section 6.1 hereof.

     Section 2.5. Objective and Business of the Master Fund.

(a)

The objective of the Master Fund is to seek equity-like capital appreciation while attempting to limit risk through the use of a multi-strategy, multi-manager, diversified investment philosophy. The business of the Master Fund is to purchase, sell (including short sales), invest and trade in Securities, on margin or otherwise, and to engage in any financial or derivative transactions relating thereto or otherwise. The Master Fund may execute, deliver and perform all contracts, agreements, subscription documents and other undertakings and engage in all activities and transactions as may in the opinion of the Board be necessary or advisable to carry out its objective or business.

(b)

The Master Fund shall operate as a closed-end, non-diversified, management investment company in accordance with the 1940 Act and subject to any policies and investment restrictions set forth in the Form N-2.

     Section 2.6. Board of Directors.

(a) Prior to the Closing Date, the Organizational Member may designate such persons who shall agree to be bound by all of the terms of this Agreement to serve as the initial Directors on the Board, subject to the election of such persons prior to the Closing Date by the Organizational Member. By agreeing to be bound by the terms of this Agreement, a Member admitted on the Closing Date shall be deemed to have voted for the election of each of the initial Directors to the Board. After the Closing Date, the Board may, subject to the provisions of paragraphs (a) and (b) of this Section 2.6 with respect to the number of, and vacancies in, the position of Director and the provisions of Section 3.3 hereof with respect to the

6

	election of Directors to the Board by Members, designate any person who shall agree to be bound by all of the terms of this Agreement as a Director. The names and mailing addresses of the Directors shall be set forth in the books and records of the Master Fund. The number of Directors shall be fixed from time to time by the Board.
(b)	Each Director shall serve on the Board for the duration of the term of the Master Fund, unless his or her status as a Director shall be sooner terminated pursuant to Section 4.2 hereof. In the event of any vacancy in the position of Director, the remaining Directors serving on the Board may appoint an individual to serve in such capacity, so long as immediately after such appointment at least two-thirds (2/3) of the Directors then serving would have been elected by the Members. The Board may call a meeting of Members to fill any vacancy in the position of Director, and shall do so within 60 days after any date on which Directors who were elected by the Members cease to constitute a majority of the Directors then serving on the Board.
(c)	In the event that no Director remains to continue the business of the Master Fund, the Manager shall promptly call a meeting of the Members, to be held within 60 days after the date on which the last Director ceased to act in that capacity, for the purpose of determining whether to continue the business of the Master Fund and, if the business shall be continued, of electing the required number of Directors to the Board. If the Members shall determine at such meeting not to continue the business of the Master Fund or if the required number of Directors is not elected within 60 days after the date on which the last Director ceased to act in that capacity, then the Master Fund shall be dissolved pursuant to Section 6.1 hereof and the assets of the Master Fund shall be liquidated and distributed pursuant to Section 6.2 hereof.

     Section 2.7. Members.

     The Board expects to admit Members as of the first business day of each calendar month. Members may be admitted to the Master Fund subject to the condition that each such Member shall execute and deliver the Master Fund’s investor application or certification pursuant to which such Member agrees to be bound by all the terms and provisions hereof, or without such execution and delivery, if such Member orally, in writing, or by other action, including, but not limited to, payment for an Interest, complies with the conditions for becoming a Member and pursuant to which such Member agrees to be bound by all the terms and provisions hereof. The Board may in its sole discretion reject any subscription for Interests. The Board may, in its sole discretion, suspend subscriptions for Interests at any time. The admission of any Person as a Member shall be effective upon the revision of the books and records of the Master Fund to reflect the name and the contribution to the capital of the Master Fund of such additional Member.

     Section 2.8. Placement Fees

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     A Member may be charged a placement fee when a Placement Agent is used to place such Member’s Interest.

     Section 2.9. Limited Liability.

     Except as provided under applicable law, including capital contribution obligations, a Member shall not be liable for the Master Fund’s debts, obligations and liabilities in any amount in excess of such Member’s contributions to the capital of the Master Fund (plus such Member’s share of undistributed profits and assets). Except as provided under applicable law, a Director shall not be liable for the Master Fund’s debts, obligations and liabilities.

Article III.
MANAGEMENT

     Section 3.1. Management and Control.

(a)

Management and control of the business of the Master Fund shall be vested in the Board, which shall have the right, power and authority, on behalf of the Master Fund and in its name, to exercise all rights, powers and authority of “manager” as defined under the Delaware Act (but is not the same as the term “Manager” as defined in this Agreement) and to do all things necessary and proper to carry out the objective and business of the Master Fund and their duties hereunder. No Director shall have the authority individually to act on behalf of or to bind the Master Fund except within the scope of such Director’s authority as delegated by the Board. The parties hereto intend that, except to the extent otherwise expressly provided herein, (i) each Director shall be vested with the same powers, authority and responsibilities on behalf of the Master Fund as are customarily vested in each director of a Delaware corporation and (ii) each Independent Director shall be vested with the same powers, authority and responsibilities on behalf of the Master Fund as are customarily vested in each director of a closed-end management investment company registered under the 1940 Act that is organized as a Delaware corporation who is not an “interested person” (as such term is defined in the 1940 Act) of such company. During any period in which the Master Fund shall have no Directors, the Manager shall continue to provide management and administrative services to the Master Fund. The Manager will oversee the day-to-day management of the Master Fund and, subject to the approval of the Board, has the authority to: approve the acceptance of initial and subsequent subscriptions on behalf of the Master Fund; determine whether future subscriptions should be accepted; make determinations on the transfer of Interests; and manage and oversee the general administrative and operational aspects of the Master Fund.

(b)

Members shall have no right to participate in and shall take no part in the management or control of the Master Fund’s business and shall have no right, power or authority to act for or bind the Master Fund. Members shall have the right to vote on any matters only as provided in this Agreement or on any matters

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	that require the approval of the holders of voting securities under the 1940 Act or as otherwise required in the Delaware Act.
(c)	The Board may delegate to a committee or to any other person any rights, power and authority vested by this Agreement in the Board to the extent permissible under applicable law.
(d)	The Master Fund will file a tax return as a partnership for U.S. federal income tax purposes. Except as otherwise specifically provided herein, all decisions for the Master Fund relating to tax matters including, without limitation, whether to make any tax elections, the positions to be made on the Master Fund’s tax returns and the settlement or further contest or litigation of any audit matters raised by the Internal Revenue Service or other taxing authority, will be made by the Board. All actions (other than ministerial actions) taken by the Manager, as designated in this Section 3.1 and Section 3.2 below, will be subject to the approval of the Board. Each Member agrees not to treat, on its own income tax return or any claim for a tax refund, any item of income, gain, loss, deduction or credit in a manner inconsistent with the treatment of such item by the Master Fund.

     Section 3.2. Actions by the Board of Directors.

(a)	Unless provided otherwise in this Agreement, the Board shall act only: (i) by the affirmative vote of a majority of the Directors (including the vote of a majority of the Independent Directors, if required by the 1940 Act) present at a meeting duly called at which a quorum of the Directors shall be present (in person or, if in person attendance is not required by the 1940 Act, by telephone) or (ii) by unanimous written consent of all of the Directors without a meeting, if permissible under the 1940 Act.
(b)	The Board may designate from time to time a Chairman who shall preside at all meetings. Meetings of the Board may be called by the Chairman or by any two Directors, and may be held on such date and at such time and place as the Board shall determine. Each Director shall be entitled to receive written notice of the date, time and place of such meeting within a reasonable time in advance of the meeting. Notice need not be given to any Director who shall attend a meeting without objecting to the lack of notice or who shall execute a written waiver of notice with respect to the meeting. Directors may attend and participate in any meeting by telephone except where in person attendance at a meeting is required by the 1940 Act. A majority of the Directors shall constitute a quorum at any meeting.
(c)	The Board may designate from time to time agents and employees of the Master Fund who shall have the same powers and duties on behalf of the Master Fund (including the power to bind the Master Fund) as are customarily vested in officers of a Delaware corporation, and designate them as officers of the Master Fund.

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     Section 3.3. Meetings of Members.

(a)	Actions requiring the vote of the Members may be taken at any duly constituted meeting of the Members at which a quorum is present. Meetings of the Members may be called by the Board or by Members holding a majority of the total number of votes eligible to be cast by all Members, and may be held at such time, date and place as the Board shall determine. The Board shall arrange to provide written notice of the meeting, stating the date, time and place of the meeting and the record date therefor, to each Member entitled to vote at the meeting within a reasonable time prior thereto. Failure to receive notice of a meeting on the part of any Member shall not affect the validity of any act or proceeding of the meeting, so long as a quorum shall be present at the meeting, except as otherwise required by applicable law. Only matters set forth in the notice of a meeting may be voted on by the Members at a meeting. The presence in person or by proxy of Members holding a majority of the total number of votes eligible to be cast by all Members as of the record date shall constitute a quorum at any meeting. In the absence of a quorum, a meeting of the Members may be adjourned by action of a majority of the Members present in person or by proxy without additional notice to the Members. Except as otherwise required by any provision of this Agreement or of the 1940 Act, (i) those candidates receiving a plurality of the votes cast at any meeting of Members shall be elected as Directors and (ii) all other actions of the Members taken at a meeting shall require the affirmative vote of Members holding a majority of the total number of votes eligible to be cast by those Members who are present in person or by proxy at such meeting.
(b)	Each Member shall be entitled to cast at any meeting of Members a number of votes equivalent to such Member’s Investment Percentage as of the record date for such meeting. The Board shall establish a record date not less than 10 nor more than 90 days prior to the date of any meeting of Members to determine eligibility to vote at such meeting and the number of votes that each Member will be entitled to cast thereat, and shall maintain for each such record date a list setting forth the name of each Member and the number of votes that each Member will be entitled to cast at the meeting.
(c)	A Member may vote at any meeting of Members by a proxy properly executed in writing by the Member and filed with the Master Fund before or at the time of the meeting. A proxy may be suspended or revoked, as the case may be, by the Member executing the proxy by a later writing delivered to the Master Fund at any time prior to exercise of the proxy or if the Member executing the proxy shall be present at the meeting and decide to vote in person. Any action of the Members that is permitted to be taken at a meeting of the Members may be taken without a meeting if consents in writing, setting forth the action taken, are signed by Members holding a majority of the total number of votes eligible to be cast or such greater percentage as may be required in order to approve such action.

     Section 3.4. Custody of Assets of the Master Fund.

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     The physical possession of all funds, Securities or other properties of the Master Fund shall at all times be held, controlled and administered by one or more custodians retained by the Master Fund in accordance with the requirements of the 1940 Act. The Manager will have no responsibility, other than that associated with the oversight and supervision of custodians retained by the Master Fund, with respect to the collection of income or the physical acquisition or safekeeping of the funds, Securities or other assets of the Master Fund, all duties of collection, physical acquisition or safekeeping being the sole obligation of such custodians.

     Section 3.5. Other Activities of Members, the Manager and Directors.

(a)

Neither the Manager nor any Director shall be required to devote its full time to the affairs of the Master Fund, but shall devote such time as may reasonably be required to perform its obligations under this Agreement.

(b)

Any Member, Manager or Director, and any Affiliate of any Member, Manager or Director, may engage in or possess an interest in other business ventures or commercial dealings of every kind and description, independently or with others, including, but not limited to, acquisition and disposition of Securities, provision of investment advisory or brokerage services, serving as directors, officers, employees, advisors or agents of other companies, partners of any partnership, members of any limited liability company, or trustees of any trust, or entering into any other commercial arrangements. No Member, Manager or Director shall have any rights in or to such activities of any other Member, Manager or Director, or any profits derived therefrom.

     Section 3.6. Duty of Care.

(a)

The Manager and Directors shall not be liable to the Master Fund or to any of its Members for any loss or damage occasioned by any act or omission in the performance of their services under this Agreement, unless it shall be determined by final judicial decision on the merits from which there is no further right to appeal that such loss is due to an act or omission of such Manager or Director constituting willful misfeasance, bad faith, or gross negligence of the duties involved in the conduct of such Manager’s or Director’s office.

(b)

Members not in breach of any obligation hereunder or under any agreement pursuant to which the Member subscribed for an Interest shall be liable to the Master Fund, any Member or third parties only as provided under the Delaware Act.

     Section 3.7. Indemnification.

(a) To the fullest extent permitted by law, the Master Fund shall, subject to Section 3.7(b) hereof, indemnify the Manager and Adviser (including for this purpose each officer, director, member, partner, principal, employee or agent of, or any Person who controls, is controlled by or is under common control with, the Manager or Adviser or partner of the Manager or Adviser and their respective executors, heirs, assigns, successors or other legal representatives), its officers

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	and each Director (and his respective executors, heirs, assigns, successors or other legal representatives) (each such person an “indemnitee”) against all losses, claims, damages, liabilities, costs and expenses, including, but not limited to, amounts paid in satisfaction of judgments, in compromise, or as fines or penalties, and reasonable counsel fees, incurred in connection with the defense or disposition of any action, suit, investigation or other proceeding, whether civil or criminal, before any judicial, arbitral, administrative or legislative body, in which such indemnitee may be or may have been involved as a party or otherwise, or with which such indemnitee may be or may have been threatened, while in office or thereafter. Except to the extent that such loss, claim, damage, liability, cost or expense shall have been finally determined in a judicial decision on the merits from which no further right to appeal may be taken in any such action, suit, investigation or other proceeding to have been incurred or suffered by such indemnitee by reason of willful misfeasance, bad faith, breach of fiduciary duty or gross negligence of the duties involved in the conduct of such indemnitee’s office. The rights of indemnification provided under this Section 3.7 shall not be construed so as to provide for indemnification of a Director for any liability (including liability under federal securities laws which, under certain circumstances, impose liability even on persons that act in good faith) to the extent (but only to the extent) that such indemnification would be in violation of applicable law, but shall be construed so as to effectuate the applicable provisions of this Section 3.7 to the fullest extent permitted by law.
(b)	Expenses, including reasonable counsel fees, so incurred by any such indemnitee (but excluding amounts paid in satisfaction of judgments, in compromise, or as fines or penalties), may be paid from time to time by the Master Fund in advance of the final disposition of any such action, suit, investigation or proceeding upon receipt of an undertaking by or on behalf of such indemnitee to repay to the Master Fund amounts so paid if it shall ultimately be determined that indemnification of such expenses is not authorized under Section 3.7 hereof; provided, that (i) such indemnitee shall provide security for such undertaking, (ii) the Master Fund shall be insured by or on behalf of such indemnitee against losses arising by reason of such indemnitee’s failure to fulfill such undertaking, or (iii) a majority of the Directors (excluding any Director who is either seeking advancement of expenses hereunder or is or has been a party to any other action, suit, investigation or proceeding involving claims similar to those involved in the action, suit, investigation or proceeding giving rise to a claim for advancement of expenses hereunder) or independent legal counsel in a written opinion determines based on a review of readily available facts (as opposed to a full trial-type inquiry) that there is reason to believe such indemnitee ultimately will be entitled to indemnification.
(c)	As to the disposition of any action, suit, investigation or proceeding (whether by a compromise payment, pursuant to a consent decree or otherwise) without an adjudication or a decision on the merits by a court, or by any other body before which the proceeding shall have been brought, that an indemnitee is liable to the Master Fund or its Members by reason of willful misfeasance, bad faith, breach of

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	fiduciary duty or gross negligence of the duties involved in the conduct of such indemnitee’s office, indemnification shall be provided pursuant to Section 3.7(a) hereof if:
(i)	approved as in the best interests of the Master Fund by a majority of the Directors (excluding any Director who is either seeking indemnification hereunder or is or has been a party to any other action, suit, investigation or proceeding involving claims similar to those involved in the action, suit, investigation or proceeding giving rise to a claim for indemnification hereunder) upon a determination based upon a review of readily available facts (as opposed to a full trial-type inquiry) that such indemnitee acted in good faith and in the reasonable belief that such actions were in the best interests of the Master Fund and that such indemnitee is not liable to the Master Fund or its Members by reason of willful misfeasance, bad faith, breach of fiduciary duty or gross negligence of the duties involved in the conduct of such indemnitee’s office, or
(ii)	the Board secures a written opinion of independent legal counsel based upon a review of readily available facts (as opposed to a full trial-type inquiry) to the effect that such indemnification would not protect such indemnitee against any liability to the Master Fund or its Members to which such indemnitee would otherwise be subject by reason of willful misfeasance, bad faith, breach of fiduciary duty or gross negligence of the duties involved in the conduct of such indemnitee’s office.

(d) Any indemnification or advancement of expenses made pursuant to this Section 3.7 shall not prevent the recovery from any indemnitee of any such amount if such indemnitee subsequently is determined in a final judicial decision on the merits in any action, suit, investigation or proceeding involving the liability or expense that gave rise to such indemnification or advancement of expenses to be liable to the Master Fund or its Members by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of such indemnitee’s office. In (i) any suit brought by an indemnitee (or other person entitled to indemnification hereunder) to enforce a right to indemnification under this Section 3.7 it shall be a defense that, and (ii) in any suit in the name of the Master Fund to recover any indemnification or advancement of expenses made pursuant to this Section 3.7 the Master Fund shall be entitled to recover such expenses upon a final adjudication that, the indemnitee under this Section 3.7 has not met the applicable standard of conduct set forth in this Section 3.7. In any such suit brought to enforce a right to indemnification or to recover any indemnification or advancement of expenses made pursuant to this Section 3.7, the burden of proving that the indemnitee is not entitled to be indemnified, or to any indemnification or advancement of expenses, under this Section 3.7 shall be on the Master Fund (or any Member acting derivatively or otherwise on behalf of the Master Fund or its Members).

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(e)	An indemnitee may not satisfy any right of indemnification or advancement of expenses granted in this Section 3.7 or to which such indemnitee may otherwise be entitled except out of the assets of the Master Fund, and no Member shall be personally liable with respect to any such claim for indemnification or advancement of expenses.
(f)	The rights of indemnification provided hereunder shall not be exclusive of or affect any other rights to which any person may be entitled by contract or otherwise under law. Nothing contained in this Section 3.7 shall affect the power of the Master Fund to purchase and maintain liability insurance on behalf of the Manager, any Director, the Adviser or other person.

     Section 3.8. Fees, Expenses and Reimbursement.

(a)	So long as the Administrator provides Administrative Services to the Master Fund, it shall be entitled to receive reasonable and customary fees for such services as well as out-of-pocket expenses as may be agreed to by the Administrator and the Master Fund pursuant to the Administration Agreement.
(b)	The Board may cause the Master Fund to compensate each Director for his or her services rendered in connection with the Master Fund. In addition, the Directors shall be reimbursed by the Master Fund for reasonable out-of-pocket expenses incurred by them in performing their duties under this Agreement.
(c)	The Master Fund shall bear all expenses related to its investment program. Expenses to be borne by the Master Fund (both directly and indirectly) include, but are not limited to: fees paid and expenses reimbursed to Investment Funds or Investment Managers (including management fees, performance or incentive fees or allocations and redemption or withdrawal fees, however titled or structured); all costs and expenses directly related to portfolio transactions and positions for the Master Fund’s account such as direct and indirect expenses associated with the Master Fund’s investments, including its investments in Investment Funds (whether or not consummated), and enforcing the Master Fund’s rights in respect of such investments; transfer taxes and premiums; taxes withheld on non-U.S. dividends; fees for data and software providers; research expenses; professional fees (including, without limitation, the fees and expenses of consultants, attorneys and experts); if applicable in connection with temporary or cash management investments, brokerage commissions, interest and commitment fees on loans and debit balances, borrowing charges on securities sold short, dividends on securities sold but not yet purchased and margin fees; any non-investment related interest expense; attorneys’ fees and disbursements associated with preparing and updating the offering materials and with qualifying prospective investors; fees and disbursements of any accountants engaged by the Master Fund, and expenses related to the annual audit of the Master Fund; record-keeping and custody fees and expenses; the costs of errors and omissions / directors’ and officers’ liability insurance and a fidelity bond; the Management Fee; the costs of preparing and mailing reports and other communications, including proxy, tender offer

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	correspondence or similar materials, to Members; fees and travel expenses of Directors relating to meetings of the Board and committees thereof; all costs and charges for equipment or services used in communicating information regarding the Master Fund’s transactions; and any extraordinary expenses, including indemnification expenses as provided for in this Agreement.
(d)	Subject to procuring any required regulatory approvals, from time to time the Master Fund may, alone or in conjunction with other accounts for which the Manager, or any of its affiliates, acts as general partner or investment adviser, purchase insurance in such amounts, from such insurers and on such terms as the Board shall determine.
(e)	Expenses incurred in connection with the ongoing offering of Interests will be borne by the Master Fund.
(f)	In consideration for providing investment management services to the Master Fund and so long as the Manager provides investment management services to the Master Fund, the Manager shall be entitled to receive the Management Fee from the Master Fund’s net assets. The Management Fee will be an expense paid out of the Master Fund’s assets, and will be reflected in each Member’s Capital Account as a reduction to Net Profits or an increase to Net Losses credited to or debited against each Member’s Capital Account. The Manager shall, in its sole discretion, be entitled to reduce the Management Fee, provided such reduction is for the benefit of all Members on an equal and pro rata basis.
(g)	In the event that the Master Fund is terminated other than at the end of a fiscal quarter or if the Manager is terminated other than at the end of a fiscal quarter or if the effective date of a Member’s redemption is other than at the end of a fiscal quarter, then the Management Fee provided above shall be computed on the basis of the period ending on the last business day prior to the termination or redemption date subject to a pro rata adjustment based on the number of days elapsed in the current fiscal quarter as a percentage of the total number of days in such quarter.

Article IV.
TERMINATION OF STATUS OF MANAGER AND DIRECTORS, TRANSFERS AND
REPURCHASES

     Section 4.1. Termination of Status of the Manager.

     The status of the Manager as an investment manager of the Master Fund shall be terminated if the Investment Management Agreement between the Master Fund and the Manager terminates and the Master Fund does not enter into a new investment management agreement with the Manager, effective as of the date of such termination; or, at any time, (i) by the Master Fund on 60 days’ written notice to the Manager, without the payment of any penalty, by a vote of a majority of the entire Board or by vote of a majority of the outstanding voting securities of the

15

Master Fund, or (ii) upon 90 days’ written notice by the Manager. The Investment Management Agreement will automatically and immediately terminate in the event of its assignment by the Manager, provided that an assignment to a successor to all or substantially all of the Manager’s business or to a wholly-owned subsidiary of such successor which does not result in a change of actual control of the Manager’s business shall not be deemed to be an assignment for the purposes of the Investment Management Agreement.

     Section 4.2. Termination of Status of a Director.

     The status of a Director shall terminate if the Director, pursuant to Delaware law, is removed, resigns or is subject to various disabling events such as death, incapacity or bankruptcy. A Director may resign, subject to giving 90 days’ prior written notice to the other Directors if such resignation is likely to affect adversely the tax status of the Master Fund.

     Section 4.3. Removal of the Directors.

     Any Director may be removed either by (a) the vote or written consent of at least two-thirds (2/3) of the Directors not subject to the removal vote or (b) the vote or written consent of Members holding not less than two-thirds (2/3) of the total number of votes eligible to be cast by all Members.

     Section 4.4. Removal of the Manager.

     The Manager may be removed as Manager under this Agreement by the vote or written consent of Members holding not less than 80% of the total number of votes eligible to be cast by all Members.

     Section 4.5. Transfer of Interests of Members.

(a)	An Interest of a Member may be transferred only (i) by operation of law pursuant to the bankruptcy, insolvency or dissolution of such Member or (ii) under certain limited circumstances with the written consent of the Board (which may be withheld in its sole discretion).
(b)	The Board may not consent to a Transfer unless:
	(i)	(x) the Master Fund consults with legal counsel to the Master Fund and counsel confirms that the Transfer will not cause the Master Fund to be treated as a “publicly traded partnership” taxable as a corporation or be subject to any other adverse tax or regulatory treatment and (y) the following conditions are met: (i) the Transferring Member has been a Member for at least six (6) months; (ii) the proposed Transfer is to be made on a Valuation Date; and (iii) the Transfer is one in which the tax basis of the Interest in the hands of the transferee is determined, in whole or in part, by reference to its tax basis in the hands of the Transferring Member (e.g., certain Transfers to affiliates); and

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	(ii)	(x) the person to whom the Interest is Transferred (or each of the person’s beneficial owners if such a person is a “private investment company” as defined in paragraph (d)(3) of Rule 205-3 under the Advisers Act) is a person whom the Board believes meets the requirements of paragraph (d)(1) of Rule 205-3 under the Advisers Act or any successor rule thereto and (y) the entire Interest of the Member is Transferred to a single transferee or, in the case of multiple transferees, after the Transfer of a portion of an Interest, the balance of the Capital Account of each transferee and the remaining balance of the Capital Account of the transferor (if any) is each not less than $50,000 or such lesser amount as the Board may determine in its sole discretion.
(c)	Any transferee that acquires an Interest by operation of law as the result of the bankruptcy, insolvency or dissolution of a Member, shall be entitled to the allocations and distributions allocable to the Interest so acquired and to Transfer such Interest in accordance with the terms of this Agreement, but shall not be entitled to the other rights of a Member unless and until such transferee becomes a substituted Member. Once a Member obtains the approval of the Board and satisfies the other requirements to transfer its Interests, the Board shall promptly take all necessary actions so that the transferee to whom such Interest is transferred is admitted to the Master Fund as a Member.
(d)	In no event, however, will any transferee or assignee be admitted as a Member without the consent of the Board, which may be withheld in its sole discretion. Any pledge, transfer, or assignment not made in accordance with this Section 4.5 shall be void.
(e)	The admission of any transferee as a substituted Member will be effective upon the execution and delivery by, or on behalf of, the substituted Member of this Agreement or an instrument that constitutes the execution and delivery of this Agreement. Each Member and transferee agrees to pay all expenses, including attorneys’ and accountants’ fees, incurred by the Master Fund in connection with any Transfer. If a Member Transfers its entire Interest as a Member, it will not cease to be a Member unless and until the transferee is admitted to the Master Fund as a substituted Member in accordance with this Section 4.5.
(f)	Each Member shall indemnify and hold harmless the Master Fund, the Directors, the Manager, each other Member and any Affiliate of the foregoing against all losses, claims, damages, liabilities, costs and expenses (including legal or other expenses incurred in investigating or defending against any such losses, claims, damages, liabilities, costs and expenses or any judgments, fines and amounts paid in settlement), joint or several, to which such persons may become subject by reason of, or arising from, (i) any Transfer made by such Member in violation of this Section 4.5 and (ii) any misrepresentation by such Member in connection with any such Transfer.

     Section 4.6. Repurchase of Interests.

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(a)	Except as otherwise provided in this Agreement, no Member or other person holding an Interest or portion thereof shall have the right to withdraw or tender to the Master Fund for repurchase that Interest or portion thereof. The Board from time to time, in its sole discretion and on such terms and conditions as it may determine, may cause the Master Fund to repurchase Interests or portions thereof pursuant to written tenders. However, the Master Fund shall not offer to repurchase Interests on more than four occasions during any Taxable Year unless it has received an opinion of counsel to the effect that such more frequent offers would not cause any adverse tax consequences to the Master Fund or Members. In determining whether to cause the Master Fund to repurchase Interests pursuant to written tenders, the Board shall consider the recommendation of the Manager, and shall also consider the following factors, among others:
	(i)	whether any Members have requested to tender Interests or portions thereof to the Master Fund;
	(ii)	the liquidity of the Master Fund’s assets (including fees and costs associated with withdrawing from Investment Funds);
	(iii)	the investment plans and working capital and reserve requirements of the Master Fund;
	(iv)	the relative economies of scale with respect to the size of the Master Fund;
	(v)	the history of the Master Fund in repurchasing Interests; and
	(vi)	the anticipated tax consequences of any proposed repurchases of Interests.

     The Board shall cause the Master Fund to repurchase Interests or portions thereof pursuant to written tenders only on terms fair to the Master Fund and to all Members (including persons holding Interests acquired from Members), as applicable.

(b)	A Member tendering for repurchase only a portion of the Member’s Interest will be required to maintain a Capital Account balance of at least $50,000 after giving effect to the repurchase. If a Member tenders an amount that would cause the Member’s Capital Account balance to fall below the required minimum, the Manager reserves the right to reduce the amount to be repurchased from the Member so that the required minimum balance is maintained or to repurchase the Member’s entire Interest in the Master Fund.
(c)	Repurchases pursuant to Master Fund tender offers shall be effective after receipt and acceptance by the Master Fund of all eligible written tenders of Interests from Members and, unless otherwise determined by the Board from time to time, including as a result of changes in applicable law or the interpretation thereof, shall be subject to the following repurchase procedures:
	(i)	Members choosing to tender an Interest for repurchase must do so by the applicable Notice Date. Generally, the Notice Date will be the last calendar day of

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	the third month prior to the month containing the date as of which Interests are to be repurchased. (For example, the Notice Date for a repurchase offer having a December 31 repurchase date would be September 30.) Interests (or portions thereof) will be valued as of the Valuation Date (which date, unless otherwise determined by the Board, shall be the last business day of the month in which such Interests are to be repurchased);
	(ii)	Promptly after the Notice Date, the Master Fund will give to each Member whose Interest has been accepted for repurchase a Promissory Note entitling the Member to be paid an amount equal to the value, determined as of the Valuation Date, of the repurchased Interest;
	(iii)	The Promissory Note, which will be non-interest bearing and non-transferable, is expected to contain terms providing for payment at two separate times;
	(iv)	The initial payment in respect of the Promissory Note (the “Initial Payment”) will be in an amount equal to at least 90% of the estimated value of the repurchased Interest, determined as of the Valuation Date.
		The Initial Payment will be made as of the later of (1) a period of within 30 days after the Valuation Date, or (2) if the Master Fund has requested withdrawals of its capital from any Investment Funds in order to fund the repurchase of Interests, within ten business days after the Master Fund has received at least 90% of the aggregate amount withdrawn from such Investment Funds; and
	(v)	The second and final payment in respect of the Promissory Note (the “Post-Audit Payment”) will be in an amount equal to the excess, if any, of (1) the value of the repurchased Interest, determined as of the Valuation Date and based upon the results of the annual audit of the Master Fund’s financial statements for the year in which the Valuation Date occurs, over (2) the Initial Payment. The Manager anticipates that the annual audit of the Master Fund’s financial statements will be completed within 60 days after the end of each Fiscal Year and that the Post-Audit Payment will be made promptly after the completion of the audit.
	(vi)	Although the amounts required to be paid by the Master Fund under the Promissory Note will generally be paid in cash, the Master Fund may under certain limited circumstances pay all or a portion of the amounts due by an in-kind distribution of securities.
(d)	Notwithstanding anything in the foregoing to the contrary, the Board, in its discretion, may pay all or any portion of the repurchase price in marketable Securities (or any combination of marketable Securities and cash) having a value, determined as of the date of repurchase, equal to the amount to be repurchased. All repurchases of Interests shall be subject to any and all conditions as the Board may impose in its sole discretion. The amount due to any Member whose Interest

19

	or portion thereof is repurchased shall be equal to the audited value of such Member’s Capital Account or portion thereof, as applicable, as of the Valuation Date, after giving effect to all allocations to be made to such Member’s Capital Account as of such date.
(e)	The Board may, in its sole discretion, elect to impose charges on Members who submit their Interest for repurchase.

Article V.
CAPITAL

     Section 5.1. Contributions to Capital.

(a)	The minimum initial contribution of each Member to the capital of the Master Fund shall be $75,000, subject to the discretion of the Manager to accept initial investments in lesser amounts. The amount of the initial contribution of each Member shall be recorded on the books and records of the Master Fund upon acceptance as a contribution to the capital of the Master Fund.
(b)	The Members may make additional contributions to the capital of the Master Fund of at least $10,000 (subject to the discretion of the Manager to accept additional contributions in lesser amounts), effective as of such times as the Manager, in its discretion, may permit, subject to Section 2.7 hereof, but no Member shall be obligated to make any additional contribution to the capital of the Master Fund except to the extent provided in Section 5.7 hereof.
(c)	Except as otherwise permitted by the Board, (i) initial and any additional contributions to the capital of the Master Fund by any Member shall be payable in cash, and (ii) initial and any additional contributions in cash shall be payable in readily available funds.

     Section 5.2. Rights of Members to Capital.

     No Member shall be entitled to interest on any contribution to the capital of the Master Fund, nor shall any Member be entitled to the return of any capital of the Master Fund except (i) upon the repurchase by the Master Fund of a part or all of such Member’s Interest pursuant to Section 4.6 hereof or (ii) upon the liquidation of the Master Fund’s assets pursuant to Section 6.2 hereof. Except as specified in the Delaware Act, or with respect to distributions or similar disbursements made in error, no Member shall be liable for the return of any such amounts. No Member shall have the right to require partition of the Master Fund’s property or to compel any sale or appraisal of the Master Fund’s assets.

     Section 5.3. Capital Accounts.

(a) The Master Fund shall maintain a separate Capital Account for each Member.

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(b)	Each Member’s Capital Account shall have an initial balance equal to the amount of cash constituting such Member’s initial contribution to the capital of the Master Fund.
(c)	Each Member’s Capital Account shall be increased by the sum of (i) the amount of cash constituting additional contributions by such Member to the capital of the Master Fund permitted pursuant to Section 5.1 hereof, plus (ii) all amounts credited to such Member’s Capital Account pursuant to Section 5.4 through Section 5.7 hereof.
(d)	Each Member’s Capital Account shall be reduced by the sum of (i) the amount of any repurchase of the Interest, or portion thereof, of such Member or distributions to such Member pursuant to Section 4.6, Section 5.9, Section 5.10 or Section 6.2 hereof that are not reinvested (net of any liabilities secured by any asset distributed that such Member is deemed to assume or take subject to under Section 752 of the Code), plus (ii) any amounts debited against the Member’s Capital Account pursuant to Section 5.4 through Section 5.7 hereof.
(e)	In the event all or a portion of the Interest of a Member is Transferred in accordance with the terms of this Agreement, the Transferee will succeed to the Capital Account of the Transferor to the extent of the Transferred Interest or portion of an Interest.
(f)	No Member will be required to pay the Master Fund or any other Member any deficit in such Member’s Capital Account upon dissolution of the Master Fund or otherwise.

     Section 5.4. Allocation of Net Profits and Net Losses.

     As of the last day of each Fiscal Period, any Net Profits or Net Losses for the Fiscal Period shall be allocated among and credited to or debited against the Capital Accounts of the Members in accordance with their respective Investment Percentages for such Fiscal Period.

     Section 5.5. Allocation of Insurance Premiums and Proceeds.

(a)

Any premiums payable by the Master Fund for insurance purchased pursuant to Section 3.8(c) and (d) hereof shall be apportioned evenly over each Fiscal Period or portion thereof falling within the period to which such premiums relate under the terms of such insurance, and the portion of the premiums so apportioned to any Fiscal Period shall be allocated among and debited against the Capital Accounts of each Member who is a member of the Master Fund during such Fiscal Period in accordance with such Member’s Investment Percentage for such Fiscal Period.

(b)

Proceeds, if any, to which the Master Fund may become entitled pursuant to such insurance shall be allocated among and credited to the Capital Accounts of each Member who is a member of the Master Fund during the Fiscal Period in which

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the event that gives rise to recovery of proceeds occurs in accordance with such Member’s Investment Percentage for such Fiscal Period.

     Section 5.6. Allocation of Certain Expenditures.

     Except as otherwise provided for in this Agreement and unless prohibited by the 1940 Act, any expenditures payable by the Master Fund, to the extent determined by the Board to have been paid or withheld on behalf of, or by reason of particular circumstances applicable to, one or more but fewer than all of the Members, shall be charged to only those Members on whose behalf such payments are made or whose particular circumstances gave rise to such payments. Such charges shall be debited from the Capital Accounts of such Members as of the close of the Fiscal Period during which any such items were paid or accrued by the Master Fund.

     Section 5.7. Reserves.

(a)

Appropriate reserves may be created, accrued and charged against Net Assets and proportionately against the Capital Accounts of the Members for contingent liabilities, if any, as of the date any such contingent liability becomes known to the Manager or the Board. Such reserves will be in the amounts that the Board, in its sole discretion, deems necessary or appropriate. The Board may increase or reduce any such reserves from time to time by such amounts as the Board, in its sole discretion, deems necessary or appropriate. The amount of any such reserve, or any increase or decrease therein, shall be proportionately charged or credited, as appropriate, to the Capital Accounts of those parties who are Members at the time when such reserve is created, increased or decreased, except that if any such individual reserve item, adjusted by any increase therein, exceeds the lesser of $500,000 or 1% of the aggregate value of the Capital Accounts of all such Members, then the amount of the reserve, increase or decrease may instead be charged or credited to those parties who were Members at the time, as determined by the Board in its sole discretion, of the act or omission giving rise to the contingent liability for which the reserve was established, increased or decreased in proportion to their Capital Accounts at that time.

(b)

If at any time an amount is paid or received by the Master Fund (other than contributions to the capital of the Master Fund, distributions or repurchases of Interests or portions thereof) and such amount exceeds the lesser of $500,000 or 1% of the aggregate value of the Capital Accounts of all Members at the time of payment or receipt and such amount was not accrued or reserved for but would nevertheless, in accordance with the Master Fund’s accounting practices, be treated as applicable to one or more prior Fiscal Periods, then such amount shall be proportionately charged or credited, as appropriate, to those parties who were Members during such prior Fiscal Period or Periods.

     Section 5.8. Tax Allocations.

(a) For each Fiscal Year, items of income, deduction, gain, loss or credit shall be allocated for income tax purposes among the Members in such manner as to

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reflect equitably amounts credited or debited to each Member’s Capital Account for the current and prior fiscal years (or relevant portions thereof). Allocations under this Section 5.8 shall be made pursuant to the principles of Sections 704(b) and 704(c) of the Code, and in conformity with Treasury Regulations Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(4)(i) and 1.704-3(e) promulgated thereunder, as applicable, or the successor provisions to such Section and Regulations. Notwithstanding anything to the contrary in this Agreement, there shall be allocated to the Members such gains or income as shall be necessary to satisfy the “qualified income offset” requirements of Treasury Regulation Section 1.704- 1(b)(2)(ii)(d).

(b)

If the Master Fund realizes capital gains (including short-term capital gains) for U.S. federal income tax purposes for any Fiscal Year during or as of the end of which the Interests of one or more Positive Basis Members (as hereinafter defined) are repurchased by the Master Fund pursuant to Article IV, the Manager may elect to allocate net gains as follows:

	(i)	to such Positive Basis Members, in proportion to the Positive Basis (as hereinafter defined) of each such Positive Basis Member, until either the full amount of the net gains has been so allocated or the Positive Basis of each Positive Basis Member shall have been eliminated; and
	(ii)	any net gains not so allocated to Positive Basis Members to the other Members in a manner that equitably reflects the amounts credited to the Members’ Capital Accounts.
(c)	If the Master Fund realizes capital losses for U.S. federal income tax purposes for any Fiscal Year during or as of the end of which the Interests of one or more Negative Basis Members (as hereinafter defined) are repurchased by the Master Fund under Article IV of this Agreement, the Manager may elect to allocate net losses as follows:
	(i)	to such Negative Basis Members, in proportion to the Negative Basis (as hereafter defined) of each Negative Basis Member, until either the full amount of net losses will have been so allocated or the Negative Basis of each Negative Basis Member has been eliminated, and
	(ii)	any net losses not so allocated to Negative Basis Members, to the other Members in a manner that reflects equitably the amounts credited to the Members’ Capital Accounts.
(d)	As used herein, (i) the term “Positive Basis” means, with respect to any Member and as of any time of calculation, the amount by which the value of its Interest as of such time exceeds its “adjusted tax basis,” for U.S. federal income tax purposes, in its Interest 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 and without regard to such Member’s share of the

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liabilities of the Master Fund under Section 752 of the Code), and (ii) the term “Positive Basis Member” means any Member whose Interest is repurchased by the Master Fund and who has Positive Basis as of the effective date of the repurchase, but such Member shall cease to be a Positive Basis Member at such time as it shall have received allocations pursuant to clause (i) of paragraph (b) equal to its Positive Basis as of the effective date of such repurchase.

(e)

The term “Negative Basis” means, with respect to any Member and as of any time of calculation, the amount by which the Member’s “adjusted tax basis,” for U.S. federal income tax purposes, in the Member’s Interest in the Master Fund as of that time (determined without regard to any adjustments made to the “adjusted tax basis” by reason of any Transfer or assignment of the Interest and without regard to such Member’s share of the liabilities of the Master Fund under Section 752 of the Code) exceeds the value of its Interest as of such time. As used in this Section 5.8, the term “Negative Basis Member” means any Member whose Interest is repurchased by the Master Fund and who has Negative Basis as of the effective date of the repurchase, but such Member shall cease to be a Negative Basis Member at such time as it shall have received allocations pursuant to clause (i) of paragraph (c) equal to its Negative Basis as of the effective date of such repurchase.

     Section 5.9. Distributions.

     The Board, in its sole discretion, may authorize the Master Fund to make distributions in cash or in kind at any time to all of the Members on a pro rata basis in accordance with the Members’ Investment Percentages.

     Section 5.10. Withholding.

(a)	The Board may withhold and pay over to the Internal Revenue Service (or any other relevant taxing authority) taxes from any distribution to any Member to the extent required by the Code or any other applicable law.
(b)	For purposes of this Agreement, any taxes so withheld by the Master Fund, or withheld by any other person, with respect to any amount distributed by the Master Fund to any Member shall be deemed to be a distribution or payment to such Member pursuant to this Agreement, reducing the amount otherwise distributable to such Member pursuant to this Agreement and reducing the Capital Account of such Member. If the amount of such taxes is greater than any such distributable amounts, then such Member and any successor to such Member’s Interest shall pay to the Master Fund as a contribution to the capital of the Master Fund, upon demand of the Board, the amount of such excess.
(c)	The Board shall not be obligated to apply for or obtain a reduction of or exemption from withholding tax on behalf of any Member that may be eligible for such reduction or exemption. To the extent that a Member claims to be entitled to a reduced rate of, or exemption from, a withholding tax pursuant to an

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applicable income tax treaty, or otherwise, the Member shall furnish the Board with such information and forms as such Member may be required to complete where necessary to comply with any and all laws and regulations governing the obligations of withholding tax agents. Each Member represents and warrants that any such information and forms furnished by such Member shall be true and accurate and agrees to indemnify the Master Fund and each of the Members from any and all damages, costs and expenses resulting from the filing of inaccurate or incomplete information or forms relating to such withholding taxes.

Article VI.
DISSOLUTION AND LIQUIDATION

     Section 6.1. Dissolution.

     The Master Fund shall be dissolved:

(a)	upon the affirmative vote to dissolve the Master Fund by: (i) the Board or (ii) Members holding at least two-thirds (2/3) of the total number of votes eligible to be cast by all Members;
(b)	upon the failure of the Members to elect a successor Director at a meeting called by Manager in accordance with Section 2.6 hereof when no Director remains to continue the business of the Master Fund;
(c)	upon the expiration of any two year period that commences on the date on which any Member has submitted a written notice to the Master Fund requesting to tender its entire Interest for repurchase by the Master Fund, if such Interest has not been repurchased by the Master Fund; or
(d)	as required by operation of law.

     Dissolution of the Master Fund shall be effective on the later of the day on which the event giving rise to the dissolution shall occur, but the Master Fund shall not terminate until the assets of the Master Fund have been liquidated in accordance with Section 6.2 hereof and the Certificate has been canceled.

     Section 6.2. Liquidation of Assets.

(a) Upon the dissolution of the Master Fund as provided in Section 6.1 hereof, the Board shall promptly appoint the Board or Manager as the liquidator and the Board or Manager shall liquidate the business and administrative affairs of the Master Fund, except that if the Board does not appoint the Manager as the liquidator or the Board is unable to perform this function, another liquidator will be elected by the Board. Net Profits and Net Losses during the period of liquidation shall be allocated pursuant to Section 5.4 hereof. The proceeds from liquidation (after establishment of appropriate reserves for contingencies in such

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	amount as the Board or other liquidator shall deem appropriate in its sole discretion as applicable) shall be distributed in the following manner:
	(i)	the debts, liabilities and obligations of the Master Fund, other than debts to Members, and the expenses of liquidation (including legal and accounting expenses incurred in connection therewith), up to and including the date that distribution of the Master Fund’s assets to the Members has been completed, shall first be paid on a proportionate basis;
	(ii)	such debts, liabilities or obligations as are owing to the Members shall next be paid in their order of seniority and on a proportionate basis; and
	(iii)	the Members shall next be paid on a proportionate basis the positive balances of their respective Capital Accounts after giving effect to all allocations to be made to such Members’ Capital Accounts for the Fiscal Period ending on the date of the distributions under this Section 6.2.
(b)	Anything in this Section 6.2 to the contrary notwithstanding, upon dissolution of the Master Fund, the Board or other liquidator may distribute ratably in kind any assets of the Master Fund; provided, however, that if any in-kind distribution is to be made (i) the assets distributed in kind shall be valued pursuant to Section 7.3 hereof as of the actual date of their distribution and charged as so valued and distributed against amounts to be paid under Section 6.2(a) above, and (ii) any profit or loss attributable to property distributed in-kind shall be included in the Net Profits or Net Losses for the Fiscal Period ending on the date of such distribution.

Article VII.
ACCOUNTING, VALUATIONS AND BOOKS AND RECORDS

     Section 7.1. Accounting and Reports.

(a)	The Master Fund shall adopt for tax accounting purposes any accounting method that the Board shall decide in its sole discretion is in the best interests of the Master Fund. The Master Fund’s accounts shall be maintained in U.S. currency.
(b)	After the end of each Taxable Year, the Master Fund shall furnish to each Member such information regarding the operation of the Master Fund and such Member’s Interest as is necessary for Members to complete U.S. federal and state income tax or information returns and any other tax information required by U.S. federal and state law.
(c)	Except as otherwise required by the 1940 Act, or as may otherwise be permitted by rule, regulation or order, within 60 days after the close of the period for which a report required under this Section 7.1 is being made, the Master Fund shall furnish to each Member an unaudited semi-annual report and an audited annual report containing the information required by such Act. The Master Fund shall

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cause financial statements contained in each annual report furnished hereunder to be accompanied by a certificate of independent public accountants based upon an audit performed in accordance with generally accepted accounting principles. The Master Fund may furnish to each Member such other periodic reports as it deems necessary or appropriate in its discretion.

     Section 7.2. Determinations by the Board of Directors.

(a)

All matters concerning the determination and allocation among the Members of the amounts to be determined and allocated pursuant to Article V hereof, including any taxes thereon and accounting procedures applicable thereto, shall be determined by the Board unless specifically and expressly otherwise provided for by the provisions of this Agreement or required by law, and such determinations and allocations shall be final and binding on all the Members.

(b)

The Board may make such adjustments to the computation of Net Profits or Net Losses, and the allocation thereof to a Member’s Capital Account, or any components comprising any of the foregoing as it considers appropriate to reflect fairly and accurately the financial results of the Master Fund and the intended allocation thereof among the Members.

     Section 7.3. Valuation of Assets.

(a)	Valuation of Securities and other assets shall be made by the Board in accordance with the requirements of the 1940 Act and the valuation procedures adopted by the Board.
(b)	The value of the assets and liabilities shall be determined by reference to the latest market prices and values available and in further accordance with the valuation procedures adopted by the Board.
(c)	The value of Securities and other assets of the Master Fund and the net worth of the Master Fund as a whole determined pursuant to this Section 7.3 shall be conclusive and binding on all of the Members and all parties claiming through or under them.

Article VIII.
MISCELLANEOUS PROVISIONS

     Section 8.1. Amendment of Limited Liability Company Agreement.

(a) Except as otherwise provided in this Section 8.1, this Agreement may be amended, in whole or in part, with: (i) the approval of the Board (including the vote of a majority of the Independent Directors, if required by the 1940 Act) without the Members approval; and (ii) if required by the 1940 Act, the approval of the Members by such vote as is required by the 1940 Act.

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(b)	Any amendment that would:
	(i)	increase the obligation of a Member to make any contribution to the capital of the Master Fund;
	(ii)	reduce the Capital Account of a Member other than in accordance with Article V; or
	(iii)	modify the events causing the dissolution of the Master Fund;

may be made only if (i) the written consent of each Member adversely affected thereby is obtained prior to the effectiveness thereof or (ii) such amendment does not become effective until (A) each Member has received written notice of such amendment and (B) any Member objecting to such amendment has been afforded a reasonable opportunity (pursuant to such procedures as may be prescribed by the Board) to tender its entire Interest for repurchase by the Master Fund.

(c)	The power of the Board to amend this Agreement at any time without the consent of the other Members as set forth in paragraph (a) of this Section 8.1 shall specifically include the power to:
	(i)	restate this Agreement together with any amendments hereto that have been duly adopted in accordance herewith to incorporate such amendments in a single, integrated document;
	(ii)	amend this Agreement (other than with respect to the matters set forth in Section 8.1(b) hereof) to effect compliance with any applicable law or regulation or to cure any ambiguity or to correct or supplement any provision hereof that may be inconsistent with any other provision hereof; and
	(iii)	amend this Agreement to make such changes as may be necessary or advisable to ensure that the Master Fund will not be treated as an association or a publicly traded partnership taxable as a corporation as defined in Section 7704(b) of the Code for U.S. federal income tax purposes.
(d)	The Board shall cause written notice to be given of any amendment to this Agreement to each Member, which notice shall set forth (i) the text of the proposed amendment or (ii) a summary thereof and a statement that the text of the amendment thereof will be furnished to any Member upon request.

     Section 8.2. Special Power of Attorney.

(a) Each Member hereby irrevocably makes, constitutes and appoints each Director, acting severally, and any liquidator of the Master Fund’s assets appointed pursuant to Section 6.2 hereof with full power of substitution, the true and lawful representatives and attorneys-in-fact of, and in the name, place and stead of, such

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	Member, with the power from time to time to make, execute, sign, acknowledge, swear to, verify, deliver, record, file and/or publish:
	(i)	any amendment to this Agreement that complies with the provisions of this Agreement (including the provisions of Section 8.1 hereof);
	(ii)	any amendment to the Certificate required because this Agreement is amended, including, without limitation, an amendment to effectuate any change in the membership of the Master Fund; and
	(iii)	all such other instruments, documents and certificates that, in the opinion of legal counsel to the Master Fund, may from time to time be required by the laws of the United States of America, the State of Delaware or any other jurisdiction in which the Master Fund shall determine to do business, or any political subdivision or agency thereof, or that such legal counsel may deem necessary or appropriate to effectuate, implement and continue the valid existence and business of the Master Fund as a limited liability company under the Delaware Act.
(b)	Each Member is aware that the terms of this Agreement permit certain amendments to this Agreement to be effected and certain other actions to be taken or omitted by or with respect to the Master Fund without such Member’s consent.
	If an amendment to the Certificate or this Agreement or any action by or with respect to the Master Fund is taken in the manner contemplated by this Agreement, each Member agrees that, notwithstanding any objection that such Member may assert with respect to such action, the attorneys-in-fact appointed hereby are authorized and empowered, with full power of substitution, to exercise the authority granted above in any manner that may be necessary or appropriate to permit such amendment to be made or action lawfully taken or omitted. Each Member is fully aware that each Member will rely on the effectiveness of this special power-of-attorney with a view to the orderly administration of the affairs of the Master Fund.
(c)	This power-of-attorney is a special power-of-attorney and is coupled with an interest in favor of each of the Directors and as such:
	(i)	shall be irrevocable and continue in full force and effect notwithstanding the subsequent death or incapacity of any party granting this power-of- attorney, regardless of whether the Master Fund or Board shall have had notice thereof; and
	(ii)	shall survive the delivery of a Transfer by a Member of the whole or any portion of such Member’s Interest, except that where the transferee thereof has been approved by the Board for admission to the Master Fund as a substituted Member or upon the withdrawal of a Member from the Master Fund pursuant to a periodic tender, this power-of-attorney given by the transferor shall survive the delivery of such assignment or withdrawal for

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the sole purpose of enabling the Board to execute, acknowledge and file any instrument necessary to effect such substitution or withdrawal.

     Section 8.3. Notices.

     Notices that may or are required to be provided under this Agreement shall be made, if to a Member, by regular mail, or if to the Board or the Manager, by hand delivery, registered or certified mail return receipt requested, commercial courier service, telex or telecopier, and shall be addressed to the respective parties hereto at their addresses as set forth in the books and records of the Master Fund. Notices shall be deemed to have been provided, when delivered by hand, on the date indicated as the date of receipt on a return receipt or when received if sent by regular mail, commercial courier service, telex or telecopier. A document that is not a notice and that is required to be provided under this Agreement by any party to another party may be delivered by any reasonable means.

     Section 8.4. Agreement Binding Upon Successors and Assigns.

     This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors, assigns, executors, trustees or other legal representatives, but the rights and obligations of the parties hereunder may not be Transferred or delegated except as provided in this Agreement and any attempted Transfer or delegation thereof that is not made pursuant to the terms of this Agreement shall be void.

     Section 8.5. Applicability of 1940 Act and Form N-2.

     The parties hereto acknowledge that this Agreement is not intended to, and does not, set forth the substantive provisions contained in the 1940 Act and the Form N-2 that affect numerous aspects of the conduct of the Master Fund’s business and of the rights, privileges and obligations of the Members. Each provision of this Agreement shall be subject to, and interpreted in a manner consistent with the applicable provisions of, the 1940 Act and the Form N-2.

     Section 8.6. Choice of Law; Arbitration.

(a)

Notwithstanding the place where this Agreement may be executed by any of the parties hereto, the parties expressly agree that all the terms and provisions hereof shall be construed under the laws of the State of Delaware, including the Delaware Act without regard to the conflict of law principles of such State.

(b)

To the extent such action is consistent with the provisions of the 1940 Act and any other applicable law, except as provided in Section 8.11(b) of this Agreement, each Member agrees to submit all controversies arising between or among Members or one or more Members and the Master Fund in connection with the Master Fund or its businesses or concerning any transaction, dispute or the construction, performance or breach of this Agreement or any other agreement relating to the Master Fund, whether entered into prior to, on or subsequent to the date of this Agreement, to arbitration in accordance with the provisions set out in this Section 8.6. EACH MEMBER UNDERSTANDS THAT ARBITRATION IS

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	FINAL AND BINDING ON THE MEMBERS AND THAT THE MEMBERS IN EXECUTING THIS AGREEMENT ARE WAIVING THEIR RIGHTS TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT TO JURY TRIAL.
(c)	Controversies will be finally settled by, and only by, arbitration in accordance with the commercial arbitration rules of the American Arbitration Association (the “AAA”) to the fullest extent permitted by law. The place of arbitration will be New York, New York. Any arbitration under this Section 8.6 will be conducted before a panel of three arbitrators. The Member or Members initiating arbitration under this Section 8.6 will appoint one arbitrator in the demand for arbitration. The Member or Members against whom or which arbitration is sought will jointly appoint one arbitrator within 30 business days after notice from the AAA of the filing of the demand for arbitration. The two arbitrators nominated by the Members will attempt to agree on a third arbitrator within 30 business days of the appointment of the second arbitrator. If the two arbitrators fail to agree on the third arbitrator within the 30-day period, then the AAA will appoint the third arbitrator within 30 business days following the expiration of the 30-day period.
	Any award rendered by the arbitrators will be final and binding on the Members, and judgment upon the award may be entered in the supreme court of the state of New York and/or the U.S. District Court for the Southern District of New York, or any other court having jurisdiction over the award or having jurisdiction over the Members or their assets. The arbitration agreement contained in this Section 8.6 will not be construed to deprive any court of its jurisdiction to grant provisional relief (including by injunction or order of attachment) in aid of arbitration proceedings or enforcement of an award. In the event of arbitration as provided in this Section 8.6, the arbitrators will be governed by and will apply the substantive (but not procedural) law of Delaware, to the exclusion of the principles of the conflicts of law of Delaware. The arbitration will be conducted in accordance with the procedures set out in the commercial arbitration rules of the AAA. If those rules are silent with respect to a particular matter, the procedure will be as agreed by the Members, or in the absence of agreement among or between the Members, as established by the arbitrators. Notwithstanding any other provision of this Agreement, this Section 8.6(c) will be construed to the maximum extent possible to comply with the laws of the State of Delaware, including the Uniform Arbitration Act (10 Del. C. (S) 5701 et seq.) (the “Delaware Arbitration Act”). If, nevertheless, it is determined by a court of competent jurisdiction that any provision or wording of this Section 8.6(c), including any rules of the AAA, are invalid or unenforceable under the Delaware Arbitration Act or other applicable law, such invalidity will not invalidate all of this Section 8.6(c). In that case, this Section 8.6(c) will be construed so as to limit any term or provision so as to make it valid or enforceable within the requirements of the Delaware Arbitration Act or other applicable law, and, in the event such term or provision cannot be so limited, this Section 8.6(c) will be construed to omit such invalid or unenforceable provision.

     Section 8.7. Not for Benefit of Creditors.

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     The provisions of this Agreement are intended only for the regulation of relations among past, present and future Members, Directors, the Manager and the Master Fund. This Agreement is not intended for the benefit of non-member creditors and no rights are granted to non-Member creditors under this Agreement.

     Section 8.8. Consents.

     Any and all consents, agreements or approvals provided for or permitted by this Agreement (including minutes of any meeting) shall be in writing and a signed copy thereof shall be filed and kept with the books of the Master Fund.

     Section 8.9. Merger and Consolidation.

(a)

The Master Fund may merge or consolidate with or into one or more limited liability companies formed under the Delaware Act or other business entities pursuant to an agreement of merger or consolidation that has been approved in the manner contemplated by Section 18-209(b) of the Delaware Act or may sell, lease or exchange all or substantially all of the Master Fund property, including its good will, upon such terms and conditions and for such consideration when and as authorized by the Board. The Board alone may approve, and Member approval shall not be required for, any merger or consolidation of the Master Fund or any sale, lease or exchange of Master Fund property, if such action would not have the effect of (i) increasing the obligation of a Member to make any contribution to the capital of the Master Fund, (ii) reducing the Capital Account of a Member other than in accordance with Article V hereof, or (iii) modifying the events causing the dissolution of the Master Fund.

(b)

Notwithstanding anything to the contrary contained elsewhere in this Agreement, an agreement of merger or consolidation approved in accordance with Section 18- 209(b) of the Delaware Act may, to the extent permitted by Section 18-209(f) of the Delaware Act, (i) effect any amendment to this Agreement, (ii) effect the adoption of a new limited liability company agreement for the Master Fund if it is the surviving or resulting limited liability company in the merger or consolidation, or (iii) provide that the limited liability company agreement of any other constituent limited liability company to the merger or consolidation (including a limited liability company formed for the purpose of consummating the merger or consolidation) shall be the limited liability company agreement of the surviving or resulting limited liability company.

     Section 8.10. Pronouns.

     All pronouns shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons, firm or corporation may require in the context thereof.

     Section 8.11. Confidentiality.

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(a)	A Member may obtain from the Master Fund such information regarding the affairs of the Master Fund as is just and reasonable under the Delaware Act, subject to reasonable standards (including standards governing what information and documents are to be furnished, at what time and location and at whose expense) established by the Board.
(b)	Each Member covenants that, except as required by applicable law or any regulatory body, it will not divulge, furnish or make accessible to any other person the name and/or address (whether business, residence or mailing) of any Member (collectively, “Confidential Information”) without the prior written consent of the Board, which consent may be withheld in its sole discretion.
(c)	Each Member recognizes that in the event that this Section 8.11 is breached by any Member or any of its principals, partners, members, directors, officers, employees or agents or any of its affiliates, including any of such affiliates’ principals, partners, members, directors, officers, employees or agents, irreparable injury may result to the non-breaching Members and the Master Fund. Accordingly, in addition to any and all other remedies at law or in equity to which the non-breaching Members and the Master Fund may be entitled, such Members shall also have the right to obtain equitable relief, including, without limitation, injunctive relief, to prevent any disclosure of Confidential Information, plus reasonable attorneys’ fees and other litigation expenses incurred in connection therewith. In the event that any non-breaching Member or the Master Fund determines that any of the other Members or any of its principals, partners, members, directors, officers, employees or agents or any of its affiliates, including any of such affiliates’ principals, partners, members, directors, officers, employees or agents should be enjoined from or required to take any action to prevent the disclosure of Confidential Information, each of the other non- breaching Members agrees to pursue in a court of appropriate jurisdiction such injunctive relief.

     Section 8.12. Severability.

     If any provision of this Agreement is determined by a court of competent jurisdiction not to be enforceable in the manner set forth in this Agreement, each Member agrees that it is the intention of the Members that such provision should be enforceable to the maximum extent possible under applicable law. If any provisions of this Agreement are held to be invalid or unenforceable, such invalidation or unenforceability shall not affect the validity or enforceability of any other provision of this Agreement (or portion thereof).

     Section 8.13. Master-Feeder Structure.

     As permitted by the 1940 Act, and pursuant to a resolution of a majority of the Directors, the Master Fund forms part of a master-feeder structure, in which feeder funds may invest all of their assets into the Master Fund, rather than making investments in Securities directly.

     Section 8.14. Filing of Returns.

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     The Board or its designated agent shall prepare and file, or cause the accountants of the Master Fund to prepare and file, a U.S. 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 Taxable Year of the Master Fund.

     Section 8.15. Tax Matters Partner.

(a)

The Manager shall be designated on the Master Fund’s annual federal income tax return, and have full powers and responsibilities, as the Tax Matters Partner of the Master Fund for purposes of Section 6231(a)(7) of the Code. In the event the Manager cannot act as Tax Matters Partner, another Member shall be so designated. Should any Member other than the Manager be designated as the Tax Matters Partner for the Master Fund pursuant to Section 6231(a)(7) of the Code, it shall, and each Member hereby does, to the fullest extent permitted by law, delegate to the Manager all of its rights, powers and authority to act as such Tax Matters Partner and hereby constitutes and appoints the Manager as its true and lawful attorney-in-fact, with power to act in its name and on its behalf, including the power to act through such agents or attorneys as it shall elect or appoint, to receive notices, to make, execute and deliver, swear to, acknowledge and file any and all reports, responses and notices, and to do any and all things required or advisable, in the Manager’s judgment, to be done by such a Tax Matters Partner. Any Member designated as the Tax Matters Partner for the Master Fund under Section 6231(a)(7) of the Code shall be indemnified and held harmless by the Master Fund from any and all liabilities and obligations that arise from or by reason of such designation.

(b)

Upon the request of the Tax Matters Partner, each person (for purposes of this Section 8.15(b), called a “Pass-Thru Partner”) that holds or controls an interest as a Member on behalf of, or for the benefit of, another person or persons, or which Pass-Thru Partner is beneficially owned (directly or indirectly) by another person or persons, shall, within 30 days following receipt from the Tax Matters Partner of any notice, demand, request for information or similar document, convey such notice or other document in writing to all holders of beneficial interests in the Master Fund holding such interests through such Pass-Thru Partner. In the event the Master Fund shall be the subject of an income tax audit by any federal, state or local authority, to the extent the Master Fund is treated as an entity for purposes of such audit, including administrative settlement and judicial review, the Tax Matters Partner shall be authorized to act for, and its decision shall be final and binding upon, the Master Fund and each Member thereof. All expenses incurred by the Master Fund or the Tax Matters Partner in connection with any such audit, investigation, settlement or review shall be borne by the Master Fund.

     Section 8.16. Section 754 Election; Mandatory Basis Adjustments.

(a) In the event of a distribution of Master Fund property to a Member or an assignment or other Transfer of all or part of the Interest of a Member in the Master Fund, at the request of a Member, the Manager, in its discretion, may

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	cause the Master Fund to elect, pursuant to Section 754 of the Code, or the corresponding provision of subsequent law, to adjust the basis of the Master Fund property as provided by Sections 734 and 743 of the Code.
(b)	In connection with a repurchase of a Member’s Interest or a distribution to a Member, such Member shall, at the request of the Manager, provide the Master Fund with any information necessary to enable the Manager to determine the adjusted U.S. federal income tax basis of such Member’s Interest immediately prior to such repurchase or distribution.
(c)	In connection with any Transfer of an Interest, the transferee shall provide the Master Fund, within 30 days after such Transfer, with the written notice described in Section 3 of Notice 2005-32, 2005-16 I.R.B. 895 (or any successor regulation or administrative pronouncement).

[Signature Page to Follow]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

MANAGER:
MERCANTILE CAPITAL ADVISORS, INC.
By:	/s/ David L. Meyer
	Name:	David L. Meyer
	Title:	Senior Vice President/Chief Operating Officer
ORGANIZATIONAL MEMBER:
MERCANTILE LONG-SHORT MANAGER FUND LLC
By:	/s/ Kevin A. McCreadie
	Name:	Kevin A. McCreadie
	Title:	President

MEMBERS:

Each person who shall agree to be bound by the terms of this Agreement and who shall be accepted by the Board to the Master Fund as a Member.

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EX-2.J

Exhibit 2(j)

CUSTODIAN SERVICES AGREEMENT

THIS CUSTODIAN SERVICES AGREEMENT is entered into as of__________ , 2006, by and between SEI PRIVATE TRUST COMPANY, a savings association supervised by the Office of Thrift Supervision ("SEI Trust"), and MERCANTILE LONG-SHORT MANAGER MASTER FUND LLC, a Delaware limited liability company (the "Fund").

W I T N E S S E T H:

     WHEREAS, the Fund is registered as a closed-end, non-diversified management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and

     WHEREAS, the Fund wishes to retain SEI Trust to provide custodian services, and SEI Trust wishes to furnish custodian services, either directly or through an affiliate or affiliates, as more fully described herein.

     NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:

1. DEFINITIONS.

(a)	1933 ACT means the Securities Act of 1933, as amended.
(b)	1934 ACT means the Securities Exchange Act of 1934, as amended.
(c)	AUTHORIZED PERSON means any officer of the Fund and any other person authorized by the Fund to give Oral or Written Instructions on behalf of the Fund. An Authorized Person's scope of authority may be limited by setting forth such limitation in a written document signed by both parties hereto.
(d)	BOOK-ENTRY SYSTEM means Federal Reserve Treasury book-entry system for United States and federal agency securities, its successor or successors, and its nominee or nominees and any book-entry system maintained by an exchange registered with the SEC under the 1934 Act.
(e)	CEA means the Commodities Exchange Act, as amended.
(f)	INTERESTS mean the limited liability company interests of any series or class of the Fund.
(g)	ORAL INSTRUCTIONS mean oral instructions received by SEI Trust from an Authorized Person or from a person reasonably believed by SEI

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	Trust to be an Authorized Person. SEI Trust may, in its sole discretion in each separate instance, consider and rely upon instructions it receives from an Authorized Person via electronic mail as Oral Instructions.
(h)	PROPERTY means:

(i)	any and all securities and other investment items which the Fund may from time to time deposit, or cause to be deposited, with SEI Trust or which SEI Trust may from time to time hold for the Fund;
(ii)	all income in respect of any of such securities or other investment items;
(iii)	all proceeds of the sale of any of such securities or investment items; and
(iv)	all proceeds of the sale of securities issued by the Fund, which are received by SEI Trust from time to time, from or on behalf of the Fund.

(i)	SEI TRUST means SEI Private Trust Company or a subsidiary or affiliate of SEI Private Trust Company.
(j)	SEC means the Securities and Exchange Commission.
(k)	SECURITIES LAWS mean the 1933 Act, the 1934 Act, the 1940 Act and the CEA.
(l)	WRITTEN INSTRUCTIONS mean (i) written instructions delivered by hand, mail or facsimile sending device and signed by two Authorized Persons and received by SEI Trust or (ii) trade instructions transmitted by means of an electronic transaction reporting system which requires the use of a password or other authorized identifier in order to gain access. The instructions may be delivered electronically or by hand, mail or facsimile sending device.

2.      APPOINTMENT. The Fund hereby appoints SEI Trust to provide custodian services to the Fund, and SEI Trust accepts such appointment and agrees to furnish such services.

3.      DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will provide SEI Trust with the following:

(a) at SEI Trust's request, certified or authenticated copies of the resolutions of the Fund's board of directors, approving the appointment of SEI Trust or its affiliates to provide services;

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	(b)	a copy of the Fund's most recent effective registration statement;
	(c)	a copy of the Fund's advisory and sub-advisory agreements;
	(d)	a copy of the Fund's administration agreement; and
	(e)	certified or authenticated copies of any and all amendments or supplements to the foregoing.
4.	COMPLIANCE WITH LAWS.

     SEI Trust undertakes to comply with material applicable requirements of the Securities Laws and material laws, rules and regulations of governmental authorities having jurisdiction with respect to the duties to be performed by SEI Trust hereunder. Except as specifically set forth herein, SEI Trust assumes no responsibility for compliance with such laws by the Fund or any other entity.

5. INSTRUCTIONS.

(a)	Unless otherwise provided in this Agreement, SEI Trust shall act only upon Oral Instructions or Written Instructions.
(b)	SEI Trust shall be entitled to rely upon any Oral Instruction or Written Instruction it receives from an Authorized Person (or from a person reasonably believed by SEI Trust to be an Authorized Person) pursuant to this Agreement. SEI Trust may assume that any Oral Instructions or Written Instructions received hereunder are not in any way inconsistent with the provisions of organizational documents of the Fund or of any vote, resolution or proceeding of the Fund's board of directors or of the Fund's members, unless and until SEI Trust receives Written Instructions to the contrary, SEI Trust has actual knowledge to the contrary, or such Oral Instructions or Written Instructions are not the type of Oral Instructions or Written Instructions that an Authorized Person is authorized to give and the Fund has given SEI Trust written notice of the relevant limitation on the types of Oral Instructions or Written Instructions that such Authorized Person is authorized to give and such Oral Instructions or Written Instructions are clearly not with such authorized types.
(c)	The Fund agrees to forward to SEI Trust Written Instructions confirming Oral Instructions (except where such Oral Instructions are given by SEI Trust or its affiliates) so that SEI Trust receives the Written Instructions by the close of business on the same day that such Oral Instructions are received by SEI Trust. The fact that such confirming Written Instructions are not received by SEI Trust or differ from the Oral Instructions shall in no way invalidate the transactions or enforceability of the transactions

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		authorized by the Oral Instructions or SEI Trust's ability to rely upon such Oral Instructions.
6.	RIGHT TO RECEIVE ADVICE.
	(a)	ADVICE OF THE FUND. If SEI Trust is in doubt as to any action it should or should not take, SEI Trust may request directions or advice, including Oral Instructions or Written Instructions, from the Fund.
	(b)	ADVICE OF COUNSEL. If SEI Trust shall be in doubt as to any question of law pertaining to any action it should or should not take, SEI Trust may request advice from reputable counsel of its own choosing and which counsel is reasonably acceptable to the Fund (who may be counsel for the Fund, the Fund's investment adviser or SEI Trust, at the option of SEI Trust), and such cost shall be borne by the Fund.
	(c)	CONFLICTING ADVICE. In the event of a conflict between directions or advice or Oral Instructions or Written Instructions SEI Trust receives from the Fund, and the advice it receives from counsel, SEI Trust shall be entitled to rely upon and follow the advice of counsel. In the event SEI Trust relies on the advice of counsel, SEI Trust remains liable for any action or omission on the part of SEI Trust that constitutes willful misfeasance, bad faith, gross negligence or reckless disregard by SEI Trust of any duties, obligations or responsibilities set forth in this Agreement.
	(d)	PROTECTION OF SEI TRUST. SEI Trust shall be indemnified by the Fund and without liability for any action SEI Trust reasonably takes or does not take in reliance upon directions or advice or Oral Instructions or Written Instructions SEI Trust receives from or on behalf of the Fund or from counsel to the Fund and which SEI Trust believes, in good faith, to be consistent with those directions or advice or Oral Instructions or Written Instructions. Nothing in this section shall be construed so as to impose an obligation upon SEI Trust in the absence of SEI Trust’s gross negligence (i) to seek such directions or advice or Oral Instructions or Written Instructions, or (ii) to act in accordance with such directions or advice or Oral Instructions or Written Instructions.

7.      RECORDS; VISITS. The books and records pertaining to the Fund, which are in the possession or under the control of SEI Trust shall be the property of the Fund. Such books and records shall be prepared and maintained as required by the 1940 Act (specifically including but not limited to Section 31 thereof and Rule 31a-1 and 31a-2) and other applicable securities laws, rules and regulations. The Fund and Authorized Persons shall have access to such books and records at all times during SEI Trust's normal business hours. Upon the reasonable request of the Fund, copies of any such books and records shall be provided by SEI Trust to the Fund or to an authorized representative of the Fund, at the Fund's expense. No records of the Fund in possession

4

of SEI Trust may be destroyed other than in accordance with the standard policies and procedures of SEI Trust in effect from time to time. In the event of the termination of this Agreement, all books and records maintained pursuant to this Section 7 shall be delivered in accordance with Section 16 of this Agreement.

8.      CONFIDENTIALITY. Each party shall keep confidential any information relating to the other party's business ("Confidential Information"). Confidential Information shall include (a) any data or information that is competitively sensitive material, and not generally known to the public, including, but not limited to, information about product plans, marketing strategies, finances, operations, customer relationships, customer profiles, customer lists, sales estimates, business plans, and internal performance results relating to the past, present or future business activities of the Fund or SEI Trust, their respective subsidiaries and affiliated companies and the customers, clients and suppliers of any of them; (b) any scientific or technical information, design, process, procedure, formula, or improvement that is commercially valuable and secret in the sense that its confidentiality affords the Fund or SEI Trust a competitive advantage over its competitors; (c) all confidential or proprietary concepts, documentation, reports, data, specifications, computer software, source code, object code, flow charts, databases, inventions, know-how, and trade secrets, whether or not patentable or copyrightable; and (d) anything designated as confidential. Notwithstanding the foregoing, information shall not be subject to such confidentiality obligations if it: (a) is already known to the receiving party at the first time it is obtained; (b) is or becomes publicly known or available through no wrongful act of the receiving party; (c) is rightfully received from a third party who, to the best of the receiving party's knowledge, is not under a duty of confidentiality; (d) is released by the protected party to a third party without restriction; (e) is required to be disclosed by the receiving party pursuant to a requirement of a court order, subpoena, governmental or regulatory agency or law (provided the receiving party will provide the other party written notice of such requirement, to the extent such notice is permitted); (f) is relevant to the defense of any claim or cause of action asserted against the receiving party; or (g) has been or is independently developed or obtained by the receiving party.

9.      COOPERATION WITH ACCOUNTANTS. SEI Trust shall cooperate with the Fund's independent public accountants and shall take all reasonable action to make any requested information available to such accountants as reasonably requested by the Fund.

10.      SEI SYSTEM. SEI Trust shall retain title to and ownership of any and all data bases, computer programs, screen formats, report formats, interactive design techniques, derivative works, inventions, discoveries, patentable or copyrightable matters, concepts, expertise, patents, copyrights, trade secrets, and other related legal rights utilized by SEI Trust in connection with the services provided by SEI Trust to the Fund.

11.      DISASTER RECOVERY. SEI Trust shall enter into and shall maintain in effect with appropriate parties one or more agreements making reasonable provisions for emergency use of electronic data processing equipment to the extent appropriate equipment is available. In the event of equipment failures, SEI Trust shall, at no

5

additional expense to the Fund, take reasonable steps to minimize service interruptions. SEI Trust shall have no liability with respect to the loss of data or service interruptions caused by equipment failure provided such loss or interruption is not caused by SEI Trust’s own willful misfeasance, bad faith, gross negligence or reckless disregard of its duties or obligations under this Agreement.

12.      COMPENSATION. As compensation for the services rendered by SEI Trust under this Agreement, the Fund will pay to SEI Trust the fee set forth in Schedule B of this Agreement. The Fund acknowledges that SEI Trust may receive float benefits in connection with maintaining certain accounts required to provide services under this Agreement.

13.      INDEMNIFICATION. The Fund agrees to indemnify and hold harmless SEI Trust and its affiliates, including their respective officers, directors, agents and employees, from all taxes, charges, expenses, assessments, claims and liabilities (including, without limitation, attorneys' fees and disbursements and liabilities arising under the Securities Laws and any state and foreign securities and blue sky laws) arising directly or indirectly from any action or omission to act which SEI Trust takes in connection with the provision of services to the Fund. Neither SEI Trust, nor any of its affiliates, shall be indemnified against any liability (or any expenses incident to such liability) caused by SEI Trust's or its affiliates' own willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of SEI Trust’s activities under this Agreement. The provisions of this Section 13 shall survive termination of this Agreement.

14.      RESPONSIBILITY OF SEI TRUST.

(a)

SEI Trust shall be under no duty to take any action hereunder on behalf of the Fund except as specifically set forth herein or as may be specifically agreed to by SEI Trust and the Fund in a written amendment hereto. SEI Trust shall be obligated to exercise reasonable care and diligence in the performance of its duties hereunder and to act in good faith in performing services provided for under this Agreement. SEI Trust shall be liable only for any damages arising out of SEI Trust's failure to perform its duties under this Agreement to the extent such damages arise out of SEI Trust's willful misfeasance, bad faith, gross negligence or reckless disregard of its duties under this Agreement. SEI Trust shall not be relieved of its responsibilities or liabilities if it engages sub-custodians or other agents to perform its duties hereunder.

(b)

Notwithstanding anything in this Agreement to the contrary, (i) provided that SEI Trust has acted in accordance with the standard of care set forth in Section 14(a), SEI Trust shall not be liable for losses, delays, failure, errors, interruption or loss of data occurring directly or indirectly by reason of circumstances beyond its reasonable control, including without limitation acts of god; action or inaction of civil or military authority; public enemy;

6

	war; terrorism; riot; fire; flood; sabotage; epidemics; labor disputes; civil commotion; interruption, loss or malfunction of utilities, transportation, computer or communications capabilities; insurrection; elements of nature; or non-performance by a third party; and (ii) SEI Trust shall not be under any duty or obligation to inquire into and shall not be liable for the validity or invalidity, authority or lack thereof, or truthfulness or accuracy or lack thereof, of any instruction, direction, notice, instrument or other information which SEI Trust reasonably believes to be genuine.
(c)	Notwithstanding anything in this Agreement to the contrary, neither SEI Trust nor its affiliates shall be liable for any consequential, special or indirect losses or damages, whether or not the likelihood of such losses or damages was known by SEI Trust or its affiliates.
(d)	No party may assert a cause of action against SEI Trust or any of its affiliates that allegedly occurred more than 12 months immediately prior to the filing of the suit (or, if applicable, commencement of arbitration proceedings) alleging such cause of action.
(e)	Each party shall have a duty to mitigate damages for which the other party may become responsible.
The provisions of this Section 14 shall survive termination of this Agreement.

15.      DESCRIPTION OF SERVICES. SEI Trust shall perform the custodian services set forth in Schedule A hereto. SEI Trust may sub-contract with third parties to perform certain of the services to be performed by SEI Trust hereunder; provided, however, that SEI Trust shall remain principally responsible to the Fund for the acts and omissions of such other entities. In meeting its duties hereunder, SEI Trust shall have the general authority to do all acts deemed in SEI Trust’s good faith belief to be necessary and proper to perform its obligations under this Agreement.

16.      DURATION AND TERMINATION. This Agreement shall continue until terminated by the Fund or SEI Trust on sixty (60) days' prior written notice to the other party. In the event this Agreement is terminated (pending appointment of a successor to SEI Trust or vote of the members of the Fund to dissolve or to function without a custodian of its cash, securities or other property), SEI Trust shall not deliver the Fund’s cash, securities or other property to the Fund. It may deliver them to a bank or trust company, which is a “bank” as defined in the 1940 Act, of SEI Trust's choice, having an aggregate capital, surplus and undivided profits, as shown by its last published report, of not less than twenty million dollars ($20,000,000), as a custodian for the Fund to be held under terms similar to those of this Agreement. SEI Trust shall not be required to make any delivery or payment of assets upon termination of this Agreement until full payment shall have been made to SEI Trust of all of its fees, compensation, costs and expenses (such expenses include, without limitation, expenses associated with movement (or duplication) of records and materials and conversion thereof to a successor service

7

provider, or to a bank or trust company pending appointment of such successor, and all trailing expenses incurred by SEI Trust); provided, however, that any amounts owed to SEI Trust which the Fund has specified to SEI Trust in writing as in dispute to payment prior to such termination shall be held in escrow pending resolution of such dispute. SEI Trust shall have a security interest in and shall have a right of setoff against the Property as security for the payment of such fees, compensation, costs and expenses.

17.      NOTICES. Notices shall be addressed (a) if to SEI Trust at One Freedom Valley Drive, Oaks, Pennsylvania 19456, Attention: General Counsel; (b) if to the Fund, to Mercantile Capital Advisors, Inc., at Two Hopkins Plaza, Baltimore, Maryland 21201, Attention: General Counsel; or (c) if to neither of the foregoing, at such other address as shall have been given by like notice to the sender of any such notice or other communication by the other party. If notice is sent by confirming electronic, hand or facsimile sending device, it shall be deemed to have been given immediately. If notice is sent by first-class mail, it shall be deemed to have been given five days after it has been mailed. If notice is sent by messenger, it shall be deemed to have been given on the day it is delivered.

18.      AMENDMENTS. This Agreement, or any term hereof, may be changed or waived only by a written amendment, signed by the party against whom enforcement of such change or waiver is sought.

19.      DELEGATION; ASSIGNMENT. SEI Trust may assign its rights and delegate its duties hereunder to any affiliate of SEI Investments Company provided that SEI Trust gives the Fund 30 days' prior written notice of such assignment or delegation; and provided further that no such assignment will relieve SEI Trust of any of its obligations hereunder.

20.      COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

21.      FURTHER ACTIONS. Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof.

22.      MISCELLANEOUS.

(a)	ENTIRE AGREEMENT. This Agreement embodies the entire agreement and understanding between the parties and supersedes all prior agreements and understandings relating to the subject matter hereof, provided that the parties may embody in one or more separate documents their agreement, if any, with respect to delegated duties.
(b)	NO REPRESENTATIONS OR WARRANTIES. Except as expressly provided in this Agreement, SEI Trust hereby disclaims all representations and warranties, express or implied, made to the Fund or any other person,

8

	including, without limitation, any warranties regarding quality, suitability, merchantability, fitness for a particular purpose or otherwise (irrespective of any course of dealing, custom or usage of trade), of any services or any goods provided incidental to services provided under this Agreement. SEI Trust disclaims any warranty of title or non-infringement except as otherwise set forth in this Agreement.
(c)	NO CHANGES THAT MATERIALLY AFFECT OBLIGATIONS. Notwithstanding anything in this Agreement to the contrary, the Fund agrees not to make any modifications to its registration statement or adopt any policies which would affect materially the obligations or responsibilities of SEI Trust hereunder without the prior written approval of SEI Trust, which approval shall not be unreasonably withheld or delayed.
(d)	CAPTIONS. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect.
(e)	GOVERNING LAW. This Agreement shall be deemed to be a contract made in Pennsylvania and governed by the laws of the Commonwealth of Pennsylvania, without regard to principles of conflicts of law.
(f)	PARTIAL INVALIDITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.
(g)	SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.
(h)	FACSIMILE SIGNATURES. The facsimile signature of any party to this Agreement shall constitute the valid and binding execution hereof by such party.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.

SEI PRIVATE TRUST COMPANY

By:

Name:

Title:

MERCANTILE LONG-SHORT MANAGER MASTER FUND LLC

By:

Name:

Title:

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SCHEDULE A

DESCRIPTION OF SERVICES.

SEI Trust shall provide the following list of services to the Fund:

1.	DELIVERY OF THE PROPERTY. The Fund will deliver or arrange for delivery to SEI Trust, all the Property owned by it, including cash received as a result of the distribution of Interests, during the term of this Agreement. SEI Trust will not be responsible for such Property until actual receipt.
2.	RECEIPTS AND DISBURSEMENT OF MONEY. SEI Trust, acting upon Written Instructions, shall open and maintain separate accounts in the Fund's name (“Accounts”) and shall hold in such Accounts all cash received from or for the account of the Fund, subject to the terms of this Agreement.
	SEI Trust shall make cash payments from or for the Accounts of the Fund only for:

(a)	purchases of securities in the name of the Fund, SEI Trust, SEI Trust's nominee or a sub-custodian or nominee thereof as provided in Section 9 and for which SEI Trust has received a copy of the broker’s or dealer’s confirmation or payee's invoice, as appropriate;
(b)	purchase or redemption of Interests of the Fund delivered to SEI Trust;
(c)	payment of, subject to Written Instructions, interest, taxes, administration, accounting, distribution, advisory, management fees or similar expenses which are to be borne by the Fund;
(d)	payment to, subject to receipt of Written Instructions, the Fund's investor services agent, as agent for the members, of an amount equal to the amount of dividends and distributions stated in the Written Instructions to be distributed in cash by the investor services agent to members, or, in lieu of paying the Fund's investor services agent, SEI Trust may arrange for the direct payment of cash dividends and distributions to members in accordance with procedures mutually agreed upon from time to time by and among the Fund, SEI Trust and the Fund's investor services agent;
(e)	payments, upon receipt of Written Instructions, in connection with the conversion, exchange or surrender of securities owned or subscribed to by the Fund and held by or delivered to SEI Trust;
(f)	payments made to a sub-custodian pursuant to provisions in sub-section (c) of this Section; and

11

	(g)	other payments, upon Written Instructions.
		SEI Trust is hereby authorized to endorse and collect all checks, drafts or other orders for the payment of money received as custodian for the Accounts.
3.	RECEIPT OF SECURITIES; SUB-CUSTODIANS.
	SEI Trust shall hold all securities received by it for the Accounts in a separate account that physically segregates such securities from those of any other persons, firms or corporations, except for securities held in a book-entry system. All such securities shall be held or disposed of only upon Written Instructions of the Fund pursuant to the terms of this Agreement. SEI Trust shall have no power or authority to assign, hypothecate, pledge or otherwise dispose of any such securities or investment, except upon the express terms of this Agreement or upon Written Instructions authorizing the transaction. In no case may any member of the Fund's board of directors, or any officer, employee or agent of the Fund withdraw any securities.
	At SEI Trust's own expense and for its own convenience, SEI Trust may enter into sub-custodian agreements with other banks or trust companies to perform duties described in this Section 3 with respect to domestic assets. Such bank or trust company shall have an aggregate capital, surplus and undivided profits, according to its last published report, of at least one million dollars ($1,000,000), if it is a subsidiary or affiliate of SEI Trust, or at least twenty million dollars ($20,000,000) if such bank or trust company is not a subsidiary or affiliate of SEI Trust. In addition, such bank or trust company must be qualified to act as custodian under the 1940 Act and agree to comply with the relevant provisions of applicable rules and regulations. Any such arrangement will not be entered into without prior written notice to the Fund (or as otherwise provided in the 1940 Act).
	In addition, SEI Trust may enter into arrangements with sub-custodians with respect to services regarding foreign assets. Any such arrangement will be entered into with prior written notice to the Fund (or as otherwise provided in the 1940 Act).
	SEI Trust shall remain responsible for the performance of all of its duties as described in this Agreement and shall hold the Fund harmless from its own acts or omissions, under the standards of care provided for herein, or the acts and omissions of any sub-custodian chosen by SEI Trust under the terms of this Section 3.

4. TRANSACTIONS REQUIRING INSTRUCTIONS. Upon receipt of Oral Instructions or Written Instructions and not otherwise, SEI Trust, directly or through the use of the book-entry system, shall:

12

(a)	deliver any securities held for the Fund against the receipt of payment for the sale of such securities;
(b)	execute and deliver to such persons as may be designated in such Oral Instructions or Written Instructions, proxies, consents, authorizations, and any other instruments whereby the authority of the Fund as owner of any securities may be exercised;
(c)	deliver any securities to the issuer thereof, or its agent, when such securities are called, redeemed, retired or otherwise become payable at the option of the holder; provided that, in any such case, the cash or other consideration is to be delivered to SEI Trust;
(d)	deliver any securities held for the Fund against receipt of other securities or cash issued or paid in connection with the liquidation, reorganization, refinancing, tender offer, merger, consolidation or recapitalization of any corporation, or the exercise of any conversion privilege;
(e)	deliver any securities held for the Fund to any protective committee, reorganization committee or other person in connection with the reorganization, refinancing, merger, consolidation, recapitalization or sale of assets of any corporation, and receive and hold under the terms of this Agreement such certificates of deposit, interim receipts or other instruments or documents as may be issued to it to evidence such delivery;
(f)	make such transfer or exchanges of the assets of the Fund and take such other steps as shall be stated in said Oral Instructions or Written Instructions to be for the purpose of effectuating a duly authorized plan of liquidation, reorganization, merger, consolidation or recapitalization of the Fund;
(g)	release and deliver or exchange securities owned by the Fund in connection with any conversion of such securities, pursuant to their terms, into other securities;
(h)	release and deliver securities owned by the Fund for the purpose of redeeming in kind shares of the Fund upon delivery thereof to SEI Trust; and
(i)	release and deliver or exchange securities owned by the Fund for other purposes.
	SEI Trust must also receive a certified resolution describing the nature of the corporate purpose and the name and address of the person(s) to whom delivery shall be made when such action is pursuant to Section 4(i).

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5.

USE OF BOOK-ENTRY SYSTEM. SEI Trust is authorized and instructed, on a continuous basis, to deposit in the book-entry system all securities belonging to the Fund eligible for deposit therein and to utilize the book-entry system to the extent possible in connection with settlements of purchases and sales of securities by the Fund, and deliveries and returns of securities loaned, subject to repurchase agreements or used as collateral in connection with borrowings. SEI Trust shall continue to perform such duties until it receives Written Instructions or Oral Instructions authorizing contrary actions.

SEI Trust shall administer the book-entry system as follows:

(a)	With respect to securities of the Fund which are maintained in the book-entry system, the records of SEI Trust shall identify by book-entry or otherwise those securities belonging to the Fund.
(b)	Assets of the Fund deposited in the book-entry system will at all times be segregated from any assets and cash controlled by SEI Trust in other than a fiduciary or custodian capacity but may be commingled with other assets held in such capacities.

	SEI Trust will provide the Fund with such reports on its own system of internal control as the Fund may reasonably request from time to time.
6.	REGISTRATION OF SECURITIES. All securities held for the Fund which are issued or issuable only in bearer form, except such securities held in the book-entry system, shall be held by SEI Trust in bearer form; all other securities held for the Fund may be registered in the name of the Fund, SEI Trust, the book-entry system, a sub-custodian, or any duly appointed nominee of the Fund, SEI Trust, book-entry system or sub-custodian. The Fund reserves the right to instruct SEI Trust as to the method of registration and safekeeping of the securities of the Fund. The Fund agrees to furnish to SEI Trust appropriate instruments to enable SEI Trust to hold or deliver in proper form for transfer, or to register in the name of its nominee or in the name of the book-entry system or in the name of another appropriate entity, any securities which it may hold for the Accounts and which may from time to time be registered in the name of the Fund.
7.	VOTING AND OTHER ACTION. Neither SEI Trust nor its nominee shall vote any of the securities held pursuant to this Agreement by or for the account of the Fund, except in accordance with Written Instructions. SEI Trust, directly or through the use of the book-entry system, shall execute in blank and promptly deliver all notices, proxies and proxy soliciting materials received by SEI Trust as custodian of the Property to the registered holder of such securities. If the registered holder is not the Fund, then Written Instructions or Oral Instructions must designate the person who owns such securities.

14

8. TRANSACTIONS NOT REQUIRING INSTRUCTIONS. In the absence of contrary Written Instructions, SEI Trust is authorized to take the following actions:

(a) COLLECTION OF INCOME AND OTHER PAYMENTS.

(i)	collect and receive for the account of the Fund, all income, dividends, distributions, coupons, option premiums, other payments and similar items, included or to be included in the Property, and, in addition, promptly advise the Fund of such receipt and credit such income, as collected, to the Fund's custodian account;
(ii)	endorse and deposit for collection, in the name of the Fund, checks, drafts, or other orders for the payment of money;
(iii)	receive and hold for the account of the Fund all securities received as a distribution on the Fund's securities as a result of a stock dividend, share split-up or reorganization, recapitalization, readjustment or other rearrangement or distribution of rights or similar securities issued with respect to any securities belonging to the Fund and held by SEI Trust hereunder;
(iv)	present for payment and collect the amount payable upon all securities which may mature or be, on a mandatory basis, called, redeemed, or retired, or otherwise become payable on the date such securities become payable; and
(v)	take any action which may be necessary and proper in connection with the collection and receipt of such income and other payments and the endorsement for collection of checks, drafts, and other negotiable instruments.

(b) MISCELLANEOUS TRANSACTIONS.

(i) SEI Trust is authorized to deliver or cause to be delivered Property against payment or other consideration or written receipt therefor in the following cases:

• for examination by a broker or dealer selling for the account of the Fund in accordance with street delivery custom;

• for the exchange of interim receipts or temporary securities for definitive securities; and

• for transfer of securities into the name of the Fund or SEI Trust or a sub-custodian or a nominee of one of the foregoing, or for exchange of securities for a different number of bonds,

15

certificates, or other evidence, representing the same aggregate face amount or number of units bearing the same interest rate, maturity that, in any such case, the new securities are to be delivered to SEI Trust.

(ii) unless and until SEI Trust receives Oral Instructions or Written Instructions to the contrary, SEI Trust shall:

• pay all income items held by it which call for payment upon presentation and hold the cash received by it upon such payment for the account of the Fund;

• collect interest and cash dividends received, with notice to the Fund, to the account of the Fund;

• hold for the account of the Fund all stock dividends, rights and similar securities issued with respect to any securities held by SEI Trust; and

• execute as agent on behalf of the Fund all necessary ownership certificates required by the Internal Revenue Code or the Income Tax Regulations of the United States Treasury Department or under the laws of any state now or hereafter in effect, inserting the Fund's name on such certificate as the owner of the securities covered thereby, to the extent it may lawfully do so.

9. PURCHASES OF SECURITIES. SEI Trust shall settle purchased securities upon receipt of Oral Instructions or Written Instructions that specify:

(a)	the name of the issuer and the title of the securities, including CUSIP number if applicable;
(b)	the number of shares or the principal amount purchased and accrued interest, if any;
(c)	the date of purchase and settlement;
(d)	the purchase price per unit;
(e)	the total amount payable upon such purchase; and
(f)	the name of the person from whom or the broker through whom the purchase was made. SEI Trust shall upon receipt of securities purchased by or for the Fund pay out of the moneys held for the account of the Fund the total amount payable to the person from whom or the broker through whom the purchase was made, provided that the same conforms to the total amount payable as set forth in such Oral Instructions or Written Instructions.

16

10. SALES OF SECURITIES. SEI Trust shall settle sold securities upon receipt of Oral Instructions or Written Instructions that specify:

(a)	the name of the issuer and the title of the security, including CUSIP number if applicable;
(b)	the number of shares or principal amount sold, and accrued interest, if any;
(c)	the date of trade and settlement;
(d)	the sale price per unit;
(e)	the total amount payable to the Fund upon such sale;
(f)	the name of the broker through whom or the person to whom the sale was made;
(g)	the location to which the security must be delivered and delivery deadline, if any; and
SEI Trust shall deliver the securities upon receipt of the total amount payable to the Fund upon such sale, provided that the total amount payable is the same as was set forth in the Oral Instructions or Written Instructions. Notwithstanding the other provisions thereof, SEI Trust may accept payment in such form as shall be satisfactory to it, and may deliver securities and arrange for payment in accordance with the customs prevailing among dealers in securities.

11. REPORTS; PROXY MATERIALS.

(a) SEI Trust shall furnish to the Fund the following reports:

(i)	such periodic and special reports as the Fund may reasonably request;
(ii)	a monthly statement summarizing all transactions and entries for the account of the Fund, listing each portfolio security belonging to the Fund with the adjusted average cost of each issue and the market value at the end of such month and stating the cash account of the Fund including disbursements;
(iii)	the reports required to be furnished to the Fund pursuant to Rule 17f-4 of the 1940 Act; and
(iv)	such other information as may be agreed upon from time to time between the Fund and SEI Trust.

17

(b)      SEI Trust shall transmit promptly to the Fund any proxy statement, proxy material, legal claim, class action, court notice, notice of a call or conversion or similar communication received by it as custodian of the Property. SEI Trust shall be under no other obligation to inform the Fund as to such actions or events. For clarification, upon termination of this Agreement SEI Trust shall have no responsibility to transmit such material or to inform the Fund or any other person of such actions or events.

12.

CREDITING OF ACCOUNTS. If SEI Trust in its sole discretion credits an Account with respect to (a) income, dividends, distributions, coupons, option premiums, other payments or similar items on a contractual payment date or otherwise in advance of SEI Trust's actual receipt of the amount due, (b) the proceeds of any sale or other disposition of assets on the contractual settlement date or otherwise in advance of SEI Trust's actual receipt of the amount due or (c) provisional crediting of any amounts due, and (i) SEI Trust is subsequently unable to collect full and final payment for the amounts so credited within a reasonable time period using reasonable efforts or (ii) pursuant to standard industry practice, law or regulation SEI Trust is required to repay to a third party such amounts so credited, or if any Property has been incorrectly credited, SEI Trust shall have the absolute right in its sole discretion without demand to reverse any such credit or payment, to debit or deduct the amount of such credit or payment from the Account, and to otherwise pursue recovery of any such amounts so credited from the Fund. Nothing herein or otherwise shall require SEI Trust to make any advances or to credit any amounts until SEI Trust's actual receipt thereof. The Fund hereby grants a first priority contractual possessory security interest in and a right of setoff against the assets maintained in an Account hereunder in the amount necessary to secure the return and payment to SEI Trust of any advance or credit made by SEI Trust (including reasonable charges related thereto) to such Account.

13.

COLLECTIONS. All collections of monies or other property in respect, or which are to become part, of the Property (but not the safekeeping thereof upon receipt by SEI Trust) shall be at the sole risk of the Fund. If payment is not received by SEI Trust within a reasonable time after proper demands have been made, SEI Trust shall notify the Fund in writing, including copies of all demand letters, any written responses and memoranda of all oral responses and shall await instructions from the Fund. SEI Trust shall not be obliged to take legal action for collection unless and until reasonably indemnified to its satisfaction. SEI Trust shall also notify the Fund as soon as reasonably practicable whenever income due on securities is not collected in due course and shall provide the Fund with periodic status reports of such income collected after a reasonable time.

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SCHEDULE B

Fees

The Fund shall pay SEI Trust compensation at the annual rate of .01% of the net assets of the Fund. Such compensation shall be calculated and accrued monthly, and paid to SEI Trust quarterly, within 10 business days of quarter-end.

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EX-2.K.II

Exhibit 2(k)(ii)

ADMINISTRATION AGREEMENT

     THIS AGREEMENT is made as of this_____day of________, 2006, by and between Mercantile Long-Short Manager Master Fund LLC, a Delaware limited liability company (the “Company”), a registered, non-diversified, closed-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), consisting of limited liability company interests (the “Interests”); and Mercantile Capital Advisors, Inc., a Maryland corporation (the “Administrator”).

     WHEREAS, the Company desires the Administrator to provide, and the Administrator is willing to provide administrative, accounting, investor and recordkeeping services to the Company on the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained, the Company and the Administrator hereby agree as follows:

     ARTICLE 1. Retention of the Administrator. The Company hereby retains the Administrator to furnish the Company with accounting, administrative, investor and recordkeeping services as set forth in this Agreement, and the Administrator hereby accepts such employment.

     ARTICLE 2. Administrative and Accounting Services. The Administrator shall perform or arrange for and supervise the performance by others of the accounting, investor, administrative and recordkeeping services necessary for the operation of the Company.

     ARTICLE 3. Duties of the Administrator.

     In performing its duties under this Agreement, the Administrator will act in all material respects in accordance with the Company’s Limited Liability Company Agreement and registration statement (including information incorporated therein by reference) (the “prospectus”), as they may be amended (provided copies are delivered to the Administrator). The Administrator (i) shall not have or be required to have any authority to supervise the investment or reinvestment of the securities or other properties which comprise the assets of the Company and (ii) shall not provide any investment advisory services to the Company, and shall have no liability related to the foregoing. The Administrator shall provide the Company with all necessary office space, equipment, supplies, personnel, personnel compensation and facilities (including facilities for meetings of the Company’s members (“Members”) and Board of Directors) for providing such services. The Administrator may sub-contract with third parties to perform certain or all of the services to be performed by the Administrator hereunder; provided, however, that the Administrator shall remain principally responsible to the Company for the acts and omissions of such other entities. In meeting its duties hereunder, Administrator shall have the general authority to do all acts deemed in the Administrator’s good faith belief to be necessary and proper to perform its obligations under this Agreement.

     ARTICLE 4. Allocation of Charges and Expenses.

     (A) The Administrator. The Administrator shall furnish at its own expense the executive, supervisory and clerical personnel necessary to perform its obligations under this

Agreement. The Administrator shall also pay all compensation, if any, of officers of the Company who are affiliated persons of the Administrator or any affiliated corporation of the Administrator; provided, however, that unless otherwise specifically provided, the Administrator shall not be obligated to pay the compensation of any employee of the Administrator retained by the Directors of the Company to perform services on behalf of the Company.

     (B) Company Expenses. The Company assumes and shall pay or cause to be paid all other expenses of the Company not otherwise allocated in this Agreement, including, without limitation, organizational costs, taxes, expenses for legal and auditing services, the expenses of preparing (including typesetting), printing and mailing reports, prospectuses, statements of additional information, proxy solicitation and tender offer materials and notices to Members, all expenses incurred in connection with issuing and redeeming Interests, the costs of pricing services, the costs of custodial services, the cost of initial and ongoing registration of the Interests under Federal and state securities laws, fees and out-of-pocket expenses of Directors who are not affiliated persons of the Administrator or any affiliated corporation of the Administrator, the costs of Directors’ meetings, insurance, interest, brokerage costs, litigation and other extraordinary or nonrecurring expenses, and all fees and charges of service providers to the Company. The Company shall reimburse the Administrator for its reasonable out-of-pocket expenses, including all reasonable charges for SAS 70 audit charges, and reasonable copying, postage, telephone, and fax charges incurred by the Administrator in the performance of its duties.

     ARTICLE 5. Compensation of the Administrator. The Company shall pay to the Administrator compensation at the annual rate equal to 0.20% (20 basis points) of the net assets of the Company until this Agreement is terminated in accordance with Article 7. Such compensation shall be calculated and accrued monthly, and paid to the Administrator quarterly, within 30 days of quarter-end, otherwise the Administrator shall be entitled to charge and/or set-off such amounts against any account of the Company. If this Agreement becomes effective subsequent to the first day of a month or terminates before the last day of a month, the Administrator’s compensation for that part of the month in which this Agreement is in effect shall be prorated in a manner consistent with the calculation of the fees as set forth above.

     ARTICLE 6. Standard of Care; Limitation of Liability of the Administrator. The Administrator shall exercise due care and diligence to ensure the accuracy of all services performed under this Agreement. The duties of the Administrator shall be confined to those expressly set forth herein, and no implied duties are assumed by or may be asserted against the Administrator hereunder. The Administrator shall not be liable for any error of judgment or mistake of law or for any loss arising out of any investment or for any act or omission in carrying out its duties hereunder, except a loss resulting from willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of reckless disregard of its obligations and duties hereunder. (As used in this Article 6, the term “Administrator” shall include officers, employees, sub-administrators and other agents of the Administrator as well as that entity itself.) Under no circumstances shall the Administrator be liable to the Company for consequential, indirect or punitive damages. So long as the Administrator, or its agents, act without willful misfeasance, bad faith or gross negligence in the performance of their respective duties, and without reckless disregard of their respective obligations and duties hereunder, the Company assumes full responsibility and shall indemnify the Administrator and hold it harmless from and

against any and all actions, suits and claims, whether groundless or otherwise, and from and against any and all losses, damages, costs, charges, reasonable counsel fees and disbursements, payments, expenses and liabilities (including reasonable investigation expenses) arising directly or indirectly out of any act or omission of the Administrator in carrying out its duties hereunder.

     So long as the Company, or its agents, act without willful misfeasance, bad faith or gross negligence in the performance of their respective duties, and without reckless disregard of their respective obligations and duties hereunder, the Administrator shall indemnify the Company and hold it harmless from and against any and all actions, suits and claims, whether groundless or otherwise, and from and against any and all losses, damages, costs, charges, reasonable counsel fees and disbursements, payments, expenses and liabilities (including reasonable investigation expenses) arising directly or indirectly out of any act or omission of the Company in carrying out its duties hereunder.

     The indemnity and defense provisions set forth herein shall indefinitely survive the termination of this Agreement.

     The indemnification rights hereunder shall include the right to reasonable advances of defense expenses in the event of any pending or threatened litigation with respect to which indemnification hereunder may ultimately be merited. If in any case a party hereunder (the “Indemnifying Party”) is asked to indemnify or hold the other party harmless (the “Indemnified Party”), the Indemnified Party shall promptly notify and advise the Indemnifying Party of the pertinent facts concerning the situation in question, and the Indemnified Party will use all reasonable care to identify and notify the Indemnifying Party promptly concerning any situation which presents or appears likely to present the probability of such a claim for indemnification, but failure to do so shall not affect the rights hereunder.

     The Indemnifying Party shall be entitled to participate at its own expense in, or, if it so elects, to assume the defense of, any suit brought to enforce any claims subject to this indemnity provision. If the Indemnifying Party elects to assume the defense of any such claim, the defense shall be conducted by counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party, whose approval shall not be unreasonably withheld. In the event that the Indemnifying Party elects to assume the defense of any suit and retain counsel, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it. If the Indemnifying Party does not elect to assume the defense of a suit, it will reimburse the Indemnified Party for reasonable fees and expenses of any counsel retained by the Indemnified Party.

     The Indemnified Party may apply to the Indemnifying Party at any time for instructions and may consult with counsel for the Indemnifying Party or the Company as applicable, or its own counsel and the Company’s accountants and other experts, at the Indemnifying Party’s expense, with respect to any matter arising in connection with the Indemnified Party’s duties. The Indemnified Party shall not be liable or accountable for any action taken or omitted by it in good faith in accordance with such instruction or with the opinion of such counsel, accountants or other experts.

     Also, the Indemnified Party shall be protected in acting upon any document which it reasonably believes to be genuine and to have been signed or presented by the proper authorized person or persons. Nor shall the Indemnified Party be held to have notice of any change of authority of any officers, employee or agent of the Indemnifying Party until receipt of written notice thereof from the Indemnifying Party.

     The Indemnified Party shall be liable for the performance or omissions of any unaffiliated third parties to whom the Indemnified Party has delegated its duties hereunder.

     The Administrator is entitled to rely on the price information provided by the underlying funds in which the Company invests and brokers in order to calculate the Company’s net asset value and the Administrator shall not be liable for any valuation errors resulting from the use of such information, provided the Administrator complies with the valuation procedures described in the Company’s prospectus and adopted by the Company.

     ARTICLE 7. Duration and Termination of this Agreement. This Agreement shall become effective on the date set forth above and shall remain in effect for one year (the “Initial Term”). Thereafter, this Agreement shall continue in effect for successive one-year terms (each a “Renewal Term”), unless terminated in accordance with the provisions of this Article 7. This Agreement may be terminated only: (a) by either party at the end of the Initial Term or the end of any Renewal Term on 90 days’ prior written notice; (b) by either party on such date as is specified in written notice given by the terminating party, in the event of a material breach of this Agreement by the other party, provided the terminating party has notified the other party of such material breach at least 45 days prior to the specified date of termination and the breaching party has not remedied such breach by the specified date; or (c) as to the Company, effective upon the liquidation of the Company. For purposes of this paragraph, the term “liquidation” shall mean a transaction in which the assets of the Company are sold or otherwise disposed of and proceeds therefrom are distributed in cash to the Members in complete liquidation of the Interests of such Members.

     ARTICLE 8. Activities of the Administrator. The services of the Administrator rendered to the Company are not to be deemed to be exclusive. The Administrator is free to render such services to others and to have other businesses and interests.

     ARTICLE 9. Proprietary and Confidential Information. The Administrator agrees on behalf of itself and its employees to treat confidentially and as proprietary information all records and other information relative to the Company and its Members received by the Administrator in connection with this Agreement, including any non-public personal information as defined in Regulation S-P, and that it shall not use or disclose any such information except for the purpose of carrying out the terms of this Agreement; provided, however, that Administrator may disclose such information as required by law, or after prior notification to and approval in writing by the Company, which approval may not be withheld where the Administrator may be exposed to civil or criminal contempt proceedings or penalties for failure to comply.

     ARTICLE 10. Certain Records. The Administrator shall maintain customary records in connection with its duties as specified in this Agreement. Any records required to be maintained and preserved pursuant to Rules 31a-1 and 31a-2 under the 1940 Act which are prepared or

maintained by the Administrator on behalf of the Company shall be prepared and maintained at the expense of the Administrator, but shall be the property of the Company and will be made available or surrendered promptly to the Company on request.

     In case of any request or demand for the inspection of such records by another party, the Administrator may exhibit such records to any person in any case where it is advised by its counsel that it may be held liable for failure to do so, unless (in cases involving potential exposure only to civil liability) the Company will indemnify the Administrator against such liability.

     ARTICLE 11. Compliance with Governmental Rules and Regulations. The Administrator undertakes to comply in all material respects with applicable requirements of the Securities Act of 1933, the Securities Exchange Act of 1934, the 1940 Act, the USA PATRIOT Act and any laws, rules and regulations of governmental authorities having jurisdiction with respect to the duties to be performed by the Administrator hereunder including any applicable anti-money laundering laws and regulations.

     ARTICLE 12. Internet Access. Data and information may be made electronically accessible to the Company through Internet access to one or more links provided by the Administrator or a sub-administrator (“Web Link”). All rights in Web Link (including text and “look and feel” attributes) are owned by the sub-administrator. Any commercial use of the content or any other aspect of Web Link requires the written permission of the sub-administrator. Use of the Web Link by the Company will be subject to any terms of use set forth on the web site. Web Link and the information (including text, graphics and functionality) in the Web Link is presented “As Is” and “As Available” without express or implied warranties including, but not limited to, implied warranties of non-infringement, merchantability and fitness for a particular purpose. The sub-administrator neither warrants that the Web Link will be uninterrupted or error free, nor guarantees the accessibility, reliability, performance, timeliness, sequence, or completeness of information provided on the Web Link.

     ARTICLE 13. Entire Agreement; Amendments. This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement, draft or proposal with respect to the subject matter hereof. This Agreement or any part hereof may be changed or waived only by an instrument in writing signed by the party against which enforcement of such change or waiver is sought.

     ARTICLE 14. Assignment. This Agreement shall not be assignable by either party without the prior written consent of the other party.

     ARTICLE 15. Agreement for Sole Benefit of the Administrator and the Company. This Agreement is for the sole and exclusive benefit of the Company and the Administrator and will not be deemed to be for the direct or indirect benefit of the clients or customers of the Company or the Administrator. The clients or customers of the Company or the Administrator will not be deemed to be third party beneficiaries of this Agreement nor to have any other contractual relationship with the Company by reason of this Agreement and each party hereto agrees to indemnify and hold harmless the other party from any claims of its clients or customers against

the other party including any attendant expenses and attorneys’ fees, based on this Agreement or the services provided hereunder.

     ARTICLE 16. Waiver. Any term or provision of this Agreement may be waived at any time by the party entitled to the benefit thereof by written instrument executed by such party. No failure of either party hereto to exercise any power or right granted hereunder, or to insist upon strict compliance with any obligation hereunder, and no custom or practice of the parties with regard to the terms of performance hereof, will constitute a waiver of the rights of such party to demand full and exact compliance with the terms of this Agreement.

     ARTICLE 17. Notice. Any notice required or permitted to be given by either party to the other shall be deemed sufficient if sent by registered or certified mail, federal express (or substantially similar delivery service), postage prepaid, addressed by the party giving notice to the other party at the last address furnished by the other party to the party giving notice: if to the Administrator at: Two Hopkins Plaza, Baltimore, MD 21201; and if to the Company, Attention: Mercantile Long-Short Manager Master Fund LLC, c/o SEI Mutual Fund Services, One Freedom Valley Drive, Oaks, Pennsylvania, 19456.

     ARTICLE 18. Force Majeure. No breach of any obligation of a party to this Agreement will constitute an event of default or breach to the extent it arises out of a cause, existing or future, that is beyond the control and without negligence of the party otherwise chargeable with breach or default, including without limitation: work action or strike; lockout or other labor dispute; flood; war; riot; theft; earthquake or natural disaster. Either party desiring to rely upon any of the foregoing as an excuse for default or breach will, when the cause arises, give to the other party prompt notice of the facts which constitute such cause; and, when the cause ceases to exist, give prompt notice thereof to the other party.

     ARTICLE 19. Equipment Failures. In the event of equipment failures beyond the Administrator’s control, the Administrator shall take reasonable steps to ensure that any sub-administrator can minimize service interruptions but shall have no liability with respect thereto. The sub-administrator shall be required to develop and maintain a plan for recovery from equipment failures which may include contractual arrangements with appropriate parties making reasonable provision for emergency use of electronic data processing equipment to the extent appropriate equipment is available.

     ARTICLE 20. Definitions of Certain Terms. The term “affiliated person,” when used in this Agreement, shall have the meaning specified in the 1940 Act and the rules and regulations thereunder, subject to such exemptions as may be granted by the Securities and Exchange Commission.

     ARTICLE 21. Headings. All Article headings contained in this Agreement are for convenience of reference only, do not form a part of this Agreement and will not affect in any way the meaning or interpretation of this Agreement. Words used herein, regardless of the number and gender specifically used, will be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine, or neuter, as the contract requires.

     ARTICLE 22. Governing Law. This Agreement shall be construed in accordance with the laws of the State of Delaware without giving effect to the conflicts of laws principles thereof, and the applicable provisions of the 1940 Act. To the extent that the applicable laws of the State of Delaware, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act, the latter shall control.

     ARTICLE 23. Multiple Originals. This Agreement may be executed in two or more counterparts, each of which when so executed shall be deemed to be an original, but such counterparts shall together constitute but one and the same instrument.

     ARTICLE 24. Binding Agreement. This Agreement, and the rights and obligations of the parties hereunder, shall be binding on, and inure to the benefit of, the parties and their respective successors and assigns.

     ARTICLE 25. Severability. If any part, term or provision of this Agreement is held to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term or provision held to be illegal or invalid.

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the day and year first above written.

MERCANTILE CAPITAL ADVISORS, INC.

By:

Name:

Title:

MERCANTILE LONG-SHORT MANAGER MASTER FUND LLC

By:

Name:

Title:

EX-2.N.I

Exhibit 2(n)(i)

OPINION OF DAVIS POLK & WARDWELL

June 30, 2006

Re: Mercantile Long-Short Manager Master Fund LLC

Mercantile Capital Advisors, Inc.
Two Hopkins Plaza
Baltimore, MD 21201

Ladies and Gentlemen:

     We have acted as counsel to Mercantile Capital Advisors, Inc. (the “Adviser”), in connection with the offering of interests in Mercantile Long-Short Manager Fund LLC, a Delaware limited liability company (the “Taxable Investor Fund”), and Mercantile Long-Short Manager Fund for Tax-Exempt/Deferred Investors (TEDI) LLC (the “Tax-Exempt Investor Fund”), a Delaware limited liability company. The Taxable Fund will invest all of its investable assets in equity interests in Mercantile Long-Short Manager Master Fund LLC, a Delaware limited liability company (the “Fund”). The Tax-Exempt Investor Fund will invest all of its investable assets in equity interests in Mercantile Long-Short Manager Fund for Tax-Exempt/Deferred Investors (TEDI) LDC (the “Offshore Fund”), a limited duration company incorporated on February 8, 2006, under The Companies Law (2004 Revision) of the Cayman Islands. The Offshore Fund, in turn, will invest all of its investable assets in equity interests in the Fund.

     This opinion is being delivered in connection with (1) the Registration Statement on Form N-2/A (File Nos. 333-128729 and 811-21258) filed by the Taxable Investor Fund and (2) the Registration Statement on Form N-2/A (File Nos. 333-128731 and 811-21819) filed by the Tax-Exempt Investor Fund with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”), and the Investment Company Act of 1940, as amended (the “Investment Company Act”), and (3) the Registration Statement on Form N-2/A (File No. 811-21818) filed by the Fund with the SEC under the Investment Company Act (together, the “Registration Statements”).

Capitalized terms used in this opinion and not defined herein have the meanings assigned to them in the LLC Agreement.

     The Fund was organized pursuant to the Limited Liability Company Agreement dated as of August 4, 2005 (the “LLC Agreement”). The sole investment assets of the Fund will be equity interests in investment funds, typically known as “hedge funds,” managed by investment managers that employ a variety of alternative investment strategies with a small-capitalization focus (such funds, the “Investment Funds”). The Investment Funds will invest in and actively trade securities and other financial instruments using strategies and investment techniques with significant risk characteristics, including risks arising from the volatility of the equity markets, the risks of short sales, the risks of leverage, the potential illiquidity of derivative instruments and the risk of loss from counterparty defaults.

     We have examined originals or copies, certified or otherwise, identified to our satisfaction, of such documents, certificates and other instruments, and have conducted such other investigations of fact and law, as we have deemed necessary for the purposes of this opinion.

DISCUSSION

     Treasury Regulations Section 301.7701 -3 provides that an entity such as the Fund will be classified as a partnership for U.S. federal income tax purposes unless it elects to be classified as an association taxable as a corporation. Section 3.1(d) of the LLC Agreement provides that the Fund will file a tax return as a partnership for U.S. federal income tax purposes. You have represented, and we have assumed for purposes of this opinion, that the Fund has never elected, and will not elect, to be classified under Treasury Regulations Section 301.7701 as an association taxable as a corporation. In the absence of such an election, the Fund will be treated as a partnership for U.S. federal income tax purposes unless it is a publicly traded partnership under Section 7704 of the Internal Revenue Code of 1986, as amended (the “Code”).

     Under Section 7704 of the Code, a publicly traded partnership is generally treated as a corporation for U.S. federal tax purposes, with the result, among other things, that its income is subject to U.S. corporate income tax. A partnership will be a publicly traded partnership if (i) interests in the partnership are traded on an established securities market or (ii) interests in the partnership are readily tradable on a secondary market or the substantial equivalent thereof.¹ For this purpose, (i) an interest in a partnership includes any financial instrument or contract the value

     ¹ I.R.C. § 7704(b).

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of which is determined in whole or in part by reference to the partnership (a “Derivative”) and (ii) entering into a Derivative is a transfer of an interest in the partnership.² As used herein, the term “Interest” means (i) a limited liability company interest in the Fund and (ii) a Derivative on the Fund. You have represented, and we have assumed for purposes of this opinion, that Interests will not be traded on an established securities market, as defined in Treasury Regulations Section 1.7704-1(b).³

     Treasury Regulations Section 1.7704-1 contains guidelines for determining whether interests in a partnership that are not traded on an established securities market are readily tradable on a secondary market or the substantial equivalent thereof (“Readily Tradable”). In general, partnership interests will be considered to be Readily Tradable if, “taking into account all of the facts and circumstances, the Members are readily able to buy, sell or exchange their partnership interests in a manner that is comparable, economically, to trading on an established securities market.”⁴ For purposes of determining whether partnership interests are Readily Tradable, a transfer of a partnership interest includes a redemption by the partnership.⁵

     Treasury Regulations Section 1.7704-1 establishes various safe harbors from Readily Tradable status, including rules for disregarding certain transactions involving transfers or redemptions of partnership interests (such transactions, “Private Transactions”). Among the transactions that qualify as Private Transactions are (i) transfers in which the basis of the partnership interest in the hands of the transferee is determined, in whole or in part, by reference to its tax basis in the hands or the transferor and (ii) transfers not recognized by the

     ² Treas. Reg. § 1.7704-1(a)(2)(i)(B). An interest in a partnership or corporation that holds an interest in a lower-tier partnership is not, however, treated as an interest in the lower-tier partnership for this purpose. Treas. Reg. § 1.7704 - -1(a)(2)(iii).

     ³ An established securities market includes (i) a national securities exchange registered under section 6 of the Securities Exchange Act of 1934 (the “1934 Act”); (ii) a national securities exchange exempt from registration under section 6 of the 1934 Act because of the limited volume of transactions; (iii) a foreign securities exchange that, under the law of the jurisdiction where it is organized, satisfies regulatory requirements that are analogous to the regulatory requirements under the 1934 Act described in (i) or (ii) above; (iv) a regional or local exchange; and (v) an interdealer quotation system that regularly disseminates firm buy or sell quotations by identified brokers or dealers by electronic means or otherwise. Treas. Reg. § 1.7704 - -1(b).

     ⁴ Treas. Reg. § 1.7704-1(c)(1).

     ⁵ Treas. Reg. § 1.7704-1(a)(3). By contrast, issuances of interests by a partnership in exchange for cash, property or services are disregarded for purposes of determining whether interests in the partnership are Readily Tradable.

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partnership.⁶ Failure to meet one of the safe harbors is disregarded in determining whether interests in a partnership are Readily Tradable under the general facts-and-circumstances test.⁷

     Treasury Regulations Section 1.7704-1(c)(2) provides that, under the general facts-and-circumstances test, partnership interests will be treated as Readily Tradable if (i) the interests are regularly quoted by any person, such as a broker or dealer, making a market in the interests; (ii) any person regularly makes available to the public, including customers or subscribers, bid or offer quotes with respect to the interests and stands ready to effect buy or sell transactions at the quoted prices for itself or on behalf of others; (iii) the holder of an interest has a readily available, regular and ongoing opportunity to sell or exchange the interest through a public means of obtaining or providing information of offers to buy, sell, or exchange the interests; or (iv) prospective buyers and sellers otherwise have the opportunity to buy, sell or exchange the interests in a time frame and with the regularity and continuity that is comparable to that described in (i), (ii) or (iii).

     Interests in a partnership will not be treated as Readily Tradable (or as traded on an established securities market that consists of an interdealer quotation system that regularly disseminates firm buy or sell quotations by identified brokers or dealers by electronic means or otherwise) even if they otherwise would have been so treated, unless (i) the partnership participates in the establishment of the secondary market (or interdealer quotation system) or the inclusion of its interests thereon or (ii) the partnership recognizes any transfers made on the secondary market by redeeming the transferor Member’s interest or admitting the transferee as a Member or otherwise recognizing any rights of the transferee to receive partnership distributions (directly or indirectly) or to acquire an interest in the capital or profits of the partnership.⁸

     The legislative history of Section 7704 of the Code states that the Readily Tradable test is intended to “be applied to encompass in the definition of publicly traded partnerships those partnerships that are not traded on established securities markets, but whose Members are nevertheless readily able to buy, sell or exchange their partnership interests in a manner that is comparable, economically,

     ⁶ Treas. Reg. § 1.7704-1(e)(1)(i), -(ii), -(iii), -(v), -(x). For this purpose, a partnership recognizes a transfer by redeeming the transferor partner or admitting the transferee as a partner or otherwise recognizing any rights of the transferee, such as a right to receive partnership distributions, directly or indirectly, or to acquire an interest in the capital or profits of the partnership. Treas. Reg. § 1.7704 - -1(d)(2).

     ⁷ Treas. Reg. § 1.7704-1(c)(3).

     ⁸ Treas. Reg. § 1.7704-1(d).

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to trading on established securities markets.”⁹ Thus, “the substantial equivalent of a secondary market exists where prospective buyers and sellers have the opportunity to buy, sell or exchange interests in a time frame and with the regularity and continuity that the existence of a market maker would provide.”¹⁰ The relevant report notes that a “regular plan of redemptions” indicates that partnership interests are Readily Tradable if “holders of interests have readily available, regular and ongoing opportunities to dispose of their interests.”¹¹

     It is expected that (i) Interests will not be regularly quoted by any person, such as a broker or dealer, making a market in the Interests; (ii) no person will regularly make available to the public, including customers or subscribers, bid or offer quotes with respect to Interests and stand ready to effect buy or sell transactions at the quoted prices for itself or on behalf of others; and (iii) no holder of an Interest will have a readily available, regular and ongoing opportunity to sell or exchange the Interest through a public means of obtaining or providing information of offers to buy, sell or exchange Interests.

     The LLC Agreement provides that a Member’s Interest may be transferred only (i) by operation of law pursuant to the bankruptcy, insolvency or dissolution of the Member or (ii) with the written consent of the Board, which may be withheld in the Board’s sole discretion. The LLC Agreement further provides that the Board may not consent to any assignment, transfer, sale, encumbrance, pledge or other disposition of all or any portion of an Interest (a “Transfer”)¹² unless (i) the Fund consults with legal counsel to the Fund and counsel confirms that the Transfer will not cause the Fund to be treated as a “publicly traded partnership” taxable as a corporation or to be subject to any other adverse tax or regulatory treatment; (ii) the Transferring Member has been a Member for at least six months; (iii) the Transfer is to be made on a date on which Interests to be repurchased by the Fund pursuant to a tender offer (as discussed below) are valued by the Fund; (iv) the Transfer is one in which the tax basis of the Interest in the hands of the transferee is determined, in whole or in part, by reference to its tax basis in the hands of the Transferring Member (e.g., certain Transfers to affiliates) and (v) certain other requirements are met. Under the LLC Agreement, any Transfer not made in accordance with the foregoing restrictions is treated as void.

     ⁹ H.R. Conf. Rep. No. 495, 100th Cong., 1st Sess. 947-48 (1987).

     ¹⁰ Id. at 948.

     ¹¹ Id. at 949.

     ¹² The verb “Transfer” and the adjective “Transferring” have correlative meanings.

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     The only permitted Transfers that do not constitute Private Transactions are transfers by operation of law pursuant to the bankruptcy, insolvency or dissolution of the relevant Member. We do not believe that a transfer by operation of law upon the occurrence of an extraordinary event of this nature provides Members with liquidity in respect of their Interests “that is comparable, economically, to trading on an established securities market.”¹³ Thus, we do not believe that any Transfer permitted under the LLC Agreement has caused, or will cause, the Interests to be Readily Tradable. Moreover, pursuant to the LLC Agreement, any Transfer other than a permitted Transfer will not be recognized by the Fund.

     Except as described below, no Member or other person holding an Interest has the right to withdraw all or any portion of the Interest or to tender the Interest or any portion thereof to the Fund. The Board may from time to time cause the Fund to repurchase Interests or portions of Interests pursuant to written tender offers, subject to significant limitations imposed by the LLC Agreement. The Fund may not offer to repurchase Interests on more than four occasions during any Taxable Year unless it has received an opinion of counsel to the effect that such more frequent offers would not cause any adverse tax consequences to the Fund or the Members. A Member tendering for repurchase of only a portion of the Member’s Interest will be required to maintain a Capital Account balance of at least $50,000 after giving effect to the repurchase. Unless otherwise determined by the Board, Members choosing to tender an Interest for repurchase must so notify the Fund by the last day of the third month prior to the month containing the date as of which the Interests are to be repurchased. You have represented, and we have assumed for purposes of this opinion, that it would be impossible, as an administrative matter, for the Fund to repurchase Interests pursuant to a tender offer on a date that is fewer than 30 days after the last day on which Members are permitted to notify the Fund of their intention to tender Interests for repurchase pursuant to such offer.

     Interests will be valued as of the last business day of the month in which such Interests are to be repurchased, unless otherwise determined by the Board (such day, a “Valuation Date”). The initial payment in respect of a repurchase will be equal to at least 90% of the estimated value of the repurchased Interest, determined as of the Valuation Date, and will be made within 30 days after the Valuation Date or, if later, within ten business days after the Master Fund has received at least 90% of the aggregate amount, if any, withdrawn from Investment Funds to fund the repurchase of Interests. An amount equal to the excess, if any, of (x) the value of the repurchased Interest, determined as of the Valuation Date and based on the results of the Fund’s annual audit, over (y) the initial payment

     ¹³ Treas. Reg. § 1.7704-1(c).

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will be paid to the relevant Member promptly after completion of the annual audit. The Board may elect to impose charges on Members who submit their Interests for repurchase.

     We believe that the limited repurchase opportunities provided by the Fund’s tender offers have not given, and will not give, Members and their prospective transferees “the opportunity to buy, sell or exchange interests in a time frame and with the regularity and continuity that the existence of a market maker would provide.”¹⁴ We note that the investment results of the Fund have historically varied substantially, and that it is expected that the investment results of the Fund will continue to vary substantially, on a daily, monthly, quarterly and annual basis. Particularly given this volatility, the Fund’s tender offers have not provided, and will not provide, Members with liquidity in respect of their Interests “that is comparable, economically, to trading on an established securities market.”¹⁵

     It is possible that the Fund will qualify under one or more of the safe harbors under Treasury Regulations Section 1.7704-1. Treasury Regulations Section 1.7704-1 provides, however, that the failure of a partnership to satisfy one of the safe harbors is to be disregarded in determining whether interests in the partnership are readily tradable on a secondary market or the substantial equivalent thereof.¹⁶ Thus, without regard to the possible application of the safe harbor provisions, we are of the opinion that, taking into account all of the facts and circumstances, the Interests have not been, and will not be, Readily Tradable.

CONCLUSION

     On the basis of the foregoing, it is our opinion that, for U.S. federal income tax purposes, the Fund will be treated as a partnership and not as an association taxable as a corporation or a publicly traded partnership taxable as a corporation.

     In rendering the foregoing opinion, we have assumed with your approval that (i) the provisions of the LLC Agreement are valid and enforceable as a matter of Delaware law; (ii) the LLC Agreement sets forth the entire agreement of the parties with respect to the subject matter thereof; and (iii) the Fund has always been, and will continue to be, operated in accordance with the terms of the LLC Agreement and the Members will comply with the terms of the LLC Agreement in all respects.

     ¹⁴ H.R. Conf. Rep. No. 495, 100th Cong., 1st Sess. 948 (1987).

     ¹⁵ Treas. Reg. § 1.7704-1(c).

     ¹⁶ Treas. Reg. § 1.7704-1(c)(3).

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     We are members of the Bar of the State of New York. The foregoing opinion is based upon, and limited to, (i) facts (including the terms of the LLC Agreement) as of the date hereof, (ii) the representations contained in the representation letter dated June 30, 2006 (the “Representation Letter”), which you have delivered to us in connection with this opinion, and (iii) federal laws of the United States of America as contained in the Internal Revenue Code of 1986, as amended, Treasury regulations, administrative decisions and court decisions as of the date hereof. This opinion is also based upon the assumption that the Fund will continue to be operated at all times in accordance with past practices and with the representations set forth in the Representation Letter. We do not undertake to update this opinion unless specifically engaged by you in the future to do so.

     We consent to the filing of this opinion as an exhibit to the Registration Statement and the references to our firm name under the heading “Tax Aspects—U.S. Federal Income Tax Considerations” in the Registration Statements. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.

Very truly yours,

/s/ DAVIS POLK & WARDWELL

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EX-2.N.II

Exhibit 2(n)(ii)

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

We consent to the use in this Amendment No. 1 to Registration Statement No. 811-21818 on Form N-2/A of our report dated June 2, 2006, relating to the financial statements of Mercantile Long-Short Manager Master Fund LLC.

DELOITTE & TOUCHE LLP
Chicago, Illinois
June 28, 2006