FORM F-4
Exhibit 3.4
EXHIBIT 3.4
XXXXX LINES LIMITED, LLC
LIMITED LIABILITY COMPANY AGREEMENT
Dated as of June 25, 1997
XXXXX LINES LIMITED, LLC
LIMITED LIABILITY COMPANY AGREEMENT
a Delaware Limited Liability Company
THIS AGREEMENT is made and entered into as of June 25, 1997 by and
among Xxxxx Lines Limited, LLC, a Delaware limited liability company (the
"Company"), and Xxxxx Lines Limited, a Bermuda corporation ("Xxxxx Bermuda").
PRELIMINARY STATEMENT
WHEREAS, counsel to the Company and Xxxxx Bermuda have heretofore
filed a Certificate of Formation with the Secretary of State of the State of
Delaware to organize the Company under and pursuant to the Delaware Limited
Liability Company Act;
WHEREAS, the Company's primary activity shall initially consist of
becoming a party to the Asset Purchase Agreement dated as of January 24, 1997,
as amended, among Xxxxx Bros. Steamship Co., Inc., Xxxxx Lines, Inc. and Xxxxx
Bermuda (the "Purchase Agreement") in substitution for Xxxxx Bermuda, to
effect the purchase of the "Acquired Assets", as such term is defined in the
Purchase Agreement, and the other transactions contemplated by the Purchase
Agreement to be effected by Xxxxx Bermuda and thereafter to own and operate
the Acquired Assets and otherwise to engage in the business of ocean shipping;
WHEREAS, upon the terms and subject to the conditions set forth
herein, Xxxxx Bermuda is concurrently with the execution of this Agreement
acquiring certain Membership Interests (as herein defined) in the Company; and
WHEREAS, in accordance with the Delaware Limited Liability Company
Act, the Company and Xxxxx Bermuda desire to enter into this Agreement to set
forth the rights, powers and interests of Xxxxx Bermuda with respect to the
Company and its Membership Interests therein and to provide for the management
of the business and operations of the Company;
NOW, THEREFORE, in consideration of the mutual promises and
agreements made herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
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ARTICLE I
GENERAL DEFINITIONS
1.1. Definitions. As used in this Agreement, the following terms
shall each have the meaning set forth in this Article I, (unless the context
otherwise requires).
"Act" means the Delaware Limited Liability Company Act, as it may
be amended from time to time, and any successor to such Act.
"Affiliate" means, when used with reference to a specific Person
(or when not referring to a specific Person shall mean an Affiliate of a
Member), any Person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control with
such specific Person.
"Agreement" means this Limited Liability Company Agreement, as
originally executed and as subsequently amended from time to time in
accordance with the provisions hereof.
"Bankruptcy" means, with respect to any Member, the happening of
any one or more of the following events: (a) a Member (or, in the case of any
Member which is a partnership, any general partner thereof): (i) makes an
assignment for the benefit of creditors; (ii) files a voluntary petition in
bankruptcy; (iii) is adjudged bankrupt or insolvent, or there has been entered
against such Member (or general partner) an order for relief, in any
bankruptcy or insolvency proceeding; (iv) files a petition or answer seeking
in respect of such Member (or general partner) any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any statute, law or regulation; (v) files an answer or other
pleading admitting or failing to contest the material allegations of a
petition filed against such Member (or such general partner) in any proceeding
of a nature described above; or (vi) seeks, consents or acquiesces in the
appointment of a trustee, receiver or liquidator of such Member (or such
general partner) or of all or any substantial part of such Member's (or such
general partner's) properties; or (b) 120 days after the commencement of any
proceeding against any Member (or such general partner) seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any statute, law or regulation, if such
proceeding has not been dismissed, or within 90 days after the appointment
without such Member's (or such general partner's) consent or acquiescence of a
trustee, receiver or liquidator of the Member (or such general partner) or of
all or any substantial part of such Member's (or such general partner's)
properties, if such appointment is not vacated or stayed, or within 90 days
after the expiration of any such stay, if such appointment is not vacated.
"Bankruptcy Code" means Title 11 of the United States Code, as now
in effect or as hereafter amended.
"Board of Managers" means, at any time, the Board of Managers as
then elected in accordance with Section 7.2.
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"Business Day" means any day other than a Saturday, Sunday and
those legal public holidays specified in 5 U.S.C. ss. 6103(a), as may be
amended from time to time.
"Capital Contribution" means the total amount of cash and property,
including Initial Capital Contributions and any additional cash contributions,
if any, contributed to the Company by a Member.
"Certificate of Formation" means the Certificate of Formation of
the Company described in Section 2.1.
"Company" means Xxxxx Lines Limited, LLC, the limited liability
company formed by the filing of the Certificate of Formation, as constituted
from time to time.
"Company Property or Properties" means all interests, properties,
whether real or personal, and rights of any type owned or held by the Company,
whether owned or held by the Company at the date of its formation or
thereafter acquired.
"Initial Capital Contribution" has the meaning specified in Section
4.1.
"Initial Member" means Xxxxx Bermuda and any Affiliate of such
Person that, at the time of determination, holds Membership Interests.
"Interim Capital Transaction" means (a) a transaction pursuant to
which the Company borrows funds, including, without limitation, a refinancing
of any Company debt, (b) a sale, condemnation or other disposition of all or a
portion of the Company assets or (c) the receipt of insurance proceeds or
other damage recoveries by the Company, in any such case which does not result
in and is not entered into in connection with the dissolution and termination
of the Company.
"Managers" means at any time the Persons elected in accordance with
Section 7.2 to serve on the Board of Managers.
"Members" means, at any time, the Persons who then own Membership
Interests in the Company.
"Membership Interest" means, with respect to any Member at any
time, the entire interest of such Member in the Company at such time. Such
interest includes, without limitation, (a) all rights of a Member to receive
distributions of revenues, allocations of income and loss and distributions of
liquidation proceeds under this Agreement and (b) all management rights,
voting rights or rights to consent.
"Notification" means all notices permitted or required to be given
to any Person hereunder. Such Notifications must be given in writing and will
be deemed to be duly given on the date of delivery if delivered in person or
sent by facsimile transmission or on the earlier of actual receipt or three
(3) Business Days after the date of mailing if mailed by registered or
certified mail, first class postage prepaid, return receipt requested, to such
Person, at the last known address of such Person on the Company records.
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"Person" means any general partnership, limited partnership,
corporation, limited liability company, joint venture, trust, business trust,
governmental agency, cooperative, association, individual or other entity, and
the heirs, executors, administrations, legal representatives, successors and
assigns of such person, as the context may require.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsequent Capital Contribution" means a Capital Contribution of
any Member or of all the Members, as the case may be, other than an Initial
Capital Contribution.
"Transfer" means any change in the record or beneficial ownership
of a Membership Interest, whether made voluntarily or involuntarily by
operation of law.
1.2. Interpretation. Each definition in this Agreement includes the
singular and the plural, and reference to the neuter gender includes the
masculine and feminine where appropriate. References to any statute or
Treasury Regulations means such statute or regulations as amended at the time
and include any successor legislation or regulations. The headings to the
Articles and Sections are for convenience of reference and shall not affect
the meaning or interpretation of this Agreement. Except as otherwise stated,
reference to Articles, Sections and Schedules mean the Articles, Sections and
Schedules of this Agreement. The Schedules are hereby incorporated by
reference into and shall be deemed a part of this Agreement.
ARTICLE II
ORGANIZATION
2.1. Formation. The Company has been organized as a Delaware
limited liability company under and pursuant to the Act by the filing of a
Certificate of Formation with the Office of the Secretary of State of Delaware
as required by the Act. In the event of a conflict between the terms of this
Agreement and the Certificate of Formation, the terms of the Certificate of
Formation shall prevail.
2.2. Name. The name of the Company is XXXXX LINES LIMITED, LLC. To
the extent permitted by the Act, the Company may conduct its business under
one or more assumed names deemed advisable by the Board of Managers.
2.3. Purposes. The purposes of the Company are to engage in any
activity and/or business for which limited liability companies may be formed
under the Act (including, without limitation, the activities set forth in the
Preliminary Statement of this Agreement). The Company shall have all the
powers necessary or convenient to effect any purpose for which it is formed,
including all powers granted by the Act. Without limiting the generality of
the foregoing, the Company may from time to time have a company seal, which
may be altered by the Board of Managers, and may use the same by causing it or
a facsimile thereof to be impressed or affixed or in any other manner
reproduced.
2.4. Duration. The Company shall continue in existence perpetually
or until the Company shall be sooner dissolved and its affairs wound up in
accordance with the Act or this Agreement.
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2.5. Registered Office and Registered Agent; Principal Office. (a)
The registered office of the Company required by the Act to be maintained in
the State of Delaware shall be the initial registered office named in the
Certificate of Formation or such other office (which need not be a place of
business of the Company) as the Board of Managers may designate from time to
time in the manner provided by the Act.
(b) The registered agent of the Company in the State of Delaware
shall be the initial registered agent named in the Certificate of Formation or
such other Person or Persons as the Board of Managers may designate in the
manner provided by the Act.
(c) The principal office of the Company shall be at 000 Xxxx
Xxxxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000 or at such place as the Board of Managers
may designate from time to time, which need not be in the State of Delaware,
and the Company shall maintain records there for inspection as required by the
Act. The Company may have such other offices as the Board of Managers may
designate from time to time.
2.6. No State-Law Partnership. No provisions of this Agreement
(including, without limitation, the provisions of Article VII) shall be deemed
or construed to constitute the Company a partnership (including, without
limitation, a limited partnership) or joint venture, or any Member or Manager
a partner or joint venturer of or with any other Member or Manager.
ARTICLE III
MEMBERS
3.1. Initial Member. The Initial Member of the Company is Xxxxx
Bermuda and the address of such Initial Member is c/o CP Ships Holdings Inc.,
00-00 Xxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx. As of the date
hereof, there are no other Members of the Company and no other Person has any
right to take part in the ownership of the Company.
3.2. Admission of Additional Members. Additional Members of the
Company may only be added if the addition of any such proposed additional
Member is approved in writing, prior to such admission, by all the then
existing Members.
3.3. Investment Representations. Each Member hereby represents and
warrants as follows:
(a) Such Member is acquiring its Membership Interest for investment
solely for such Member's own account and not for distribution, transfer or
sale to others in connection with any distribution or public offering.
(b) Such Member is financially able to bear the economic risk of an
investment in the Company and has no need for liquidity in this investment.
Furthermore, the financial capacity of such Member is of such a proportion
that the total costs of such Member's investment in the Company is not
material when compared with such Member's total financial capacity.
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(c) Such Member has such knowledge, experience and skill in
financial and business matters in general and with respect to investments of a
nature similar to an investment in the Company so as to be capable of
evaluating the merits and risks of, and making an informed business decision
with regard to, this investment. Such Member acknowledges and understands that
the purchase of its Membership Interest involves a speculative investment with
no assurance of success.
(d) Such Member (i) has received all information that such Member
deems necessary to make an informed investment decision with respect to an
investment in the Company; (ii) has had the unrestricted opportunity to make
such investigation as such Member desires pertaining to the Company and an
investment therein and to verify any information furnished to such Member; and
(iii) has had the opportunity to ask questions of representatives of the
Company concerning the Company and such Member's investment.
(e) Such Member understands that such Member must bear the economic
risk of an investment in the Company for an indefinite period of time because
(i) the Membership Interests have not been registered under the Securities Act
and applicable state securities laws and (ii) the Membership Interests may not
be sold, transferred, pledged or otherwise disposed of except in accordance
with this Agreement and then only if they are subsequently registered in
accordance with the provisions of the Securities Act and applicable state
securities laws or registration under the Securities Act or any applicable
state securities laws is not required.
(f) Such Member understands that the Company is not obligated to
register the Membership Interests for resale under the Securities Act or any
applicable state securities laws and that the Company is not obligated to
supply such Member with information or assistance in complying with any
exemption under the Securities Act or any applicable state securities laws.
Upon the request of the Company, such Member will provide the Company with an
opinion of counsel satisfactory to the Company that a proposed resale of the
Membership Interests complies with the Securities Act or any applicable state
securities laws.
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.1. Initial Capital Contribution. The Initial Member shall be
obligated to contribute to the initial capital of the Company the sum of
$1,000 in cash (the "Initial Capital Contribution") within three (3) Business
Days (the date of such Initial Capital Contribution being referred to herein
as the "Initial Funding Date") of demand therefor by the Chief Financial
Officer of the Company.
4.2. Initial Membership Interests. Upon making the Initial Capital
Contribution specified in Section 4.1, the Initial Member shall be entitled to
a Membership Interest of 100%.
4.3. No Further Required Capital Contributions. No Initial Member
shall be obligated to make any Capital Contributions other than the Initial
Capital Contributions provided for in Section 4.1.
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4.4. Optional Additional Cash Contributions. In the event that the
Board of Managers determines that the Company requires additional funds for
proper Company purposes other than making distributions to Members, the
Members, or any of them, may make additional cash contributions in such
amounts and upon such terms as the Company and the contributing Members agree.
4.5. Loans From Members. Loans by a Member to the Company shall not
be considered Capital Contributions. If any Member shall advance funds to the
Company in excess of the amounts required hereunder to be contributed by such
Member to the capital of the Company, the making of such advances shall not
result in any increase in the amount of the Capital Account of such Member.
The amounts of any such advances shall be a debt of the Company to such Member
and shall be payable or collectible only out of the Company assets in
accordance with the terms and conditions upon which such advances are made.
The repayment of loans from a Member to the Company upon liquidation shall be
subject to the order of priority set forth in Section 12.4.
ARTICLE V
RIGHTS, POWERS AND OBLIGATIONS OF MEMBERS
5.1. Authority; Liability to Third Parties. No Member has the
authority or power to act for or on behalf of the Company, to do any act that
would be binding on the Company, or to incur any expenditures on behalf of the
Company. No Member shall be liable for the debts, obligations or liabilities
of the Company, including under a judgment decree or order of a court.
ARTICLE VI
MEETINGS OF MEMBERS
6.1. Place of Meetings. All meetings of Members shall be held at
the principal office of the Company as provided in Section 2.5, or at such
other place as may be designated by the Board of Managers or by the Members
calling the meeting.
6.2. Meetings. (a) An annual meeting of Members for the election of
Managers and the transaction of such other business as may properly come
before the Meeting shall be held at such place, on such date and at such time
as the Board of Managers shall determine.
(b) Special meetings of Members for any proper purpose of purposes
may be called at any time by at least two Managers then serving on the Board
of Managers or by the holders of at least a majority of the Membership
Interests then outstanding.
6.3. Notice. A Notification of all meetings, stating the place, day
and hour of the meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than ten
(10) nor more than sixty (60) days before the meeting to each Member entitled
to vote.
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6.4. Waiver of Notice. Attendance of a Member at a meeting shall
constitute a waiver of Notification of the meeting, except where such Member
attends for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
Notification of a meeting may also be waived in writing. Attendance at a
meeting is not a waiver of any right to object to the consideration of matters
required to be included in the Notification of the meeting but not so
included, if the objection is expressly made at the meeting.
6.5. Quorum. The presence, either in person or by proxy, of Members
holding at least a majority of the Membership Interests is required to
constitute a quorum at any meeting of the Members.
6.6. Voting. (a) All Members shall be entitled to vote on any
matter submitted to a vote of the Members. Members may vote either in person
or by proxy at any meeting. Each Member shall be entitled to one vote for each
full percentage of the Membership Interests held by such Member. Fractional
votes shall be permitted.
(b) In all matters other than the election of Managers, the
affirmative vote of the majority of the Membership Interests present in person
or by proxy at the meeting and entitled to vote on the subject matter shall be
the act of the Members. Managers shall be elected by a plurality of the votes
of the Membership Interests present in person or represented by proxy at the
meeting and entitled to vote on the election of Managers.
6.7. Conduct of Meetings. The Board of Managers shall have full
power and authority concerning the manner of conducting any meeting of the
Members, including, without limitation, the determination of Persons entitled
to vote, the existence of a quorum, the satisfaction of the requirements of
this Article VI, the conduct of voting, the validity and effectiveness of any
proxies, and the determination of any controversies, votes or challenges
arising in connection with or during the meeting or voting. The Board of
Managers shall designate a Person to serve as chairperson of any meeting and
shall further designate a Person to take minutes of any meeting. The
chairperson of the meeting shall have the power to adjourn the meeting from
time to time, without notice, other than announcement of the time and place of
the adjourned meeting. Upon the resumption of such adjourned meeting, any
business may be transacted that might have been transacted at the meeting as
originally called.
6.8. Action by Written Consent. Any action that may be taken at a
meeting of the Members may be taken without a meeting if a consent in writing,
setting forth the action to be taken, shall be signed and dated by Members
holding the percentage of Membership Interests required to approve such action
under the Act, the Certificate of Formation or this Agreement. Such consent
shall have the same force and effect as a vote of the signing Members at a
meeting duly called and held pursuant to this Article VI. No prior notice from
the signing Members to the Company or other Members shall be required in
connection with the use of a written consent pursuant to this Section 6.8.
Notification of any action taken by means of a written consent of Members
shall, however, be sent within a reasonable time after the date of the consent
by the Company to all Members who did not sign the written consent.
6.9. Proxies. A Member may vote either in person or by proxy
executed in writing by the Member. A facsimile, telegram, telex, cablegram or
similar transmission by the
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Member or a photographic, photostatic, facsimile or similar reproduction of a
writing executed by the Member shall be treated as an execution in writing for
purposes of this Section 6.9. Proxies for use at any meeting of Members or in
connection with the taking of any action by written consent shall be filed
with the Company before or at the time of the meeting or execution of the
written consent, as the case may be. All proxies shall be received and taken
charge of and all ballots shall be received and canvassed by the Board of
Managers who shall decide all questions touching upon the qualification of
voters, the validity of the proxies, and the acceptance or rejection of votes,
unless an inspector or inspectors shall have been appointed by the chairperson
of the meeting, in which event such inspector or inspectors shall decide all
such questions. No proxy shall be valid after eleven (11) months from the date
of its execution unless otherwise provided in the proxy. A proxy shall be
revocable unless the proxy form conspicuously states that the proxy is
irrevocable and the proxy is coupled with an interest. Should a proxy
designate two or more Persons to act as proxies, unless such instrument shall
provide to the contrary, a majority of such Persons present at any meeting at
which their powers thereunder are to be exercised shall have and may exercise
all the powers of voting or giving consents thereby conferred, or if only one
be present, then such powers may be exercised by that one; or, if an even
number attend and a majority do not agree on any particular issue, the Company
shall not be required to recognize such proxy with respect to such issue if
such proxy does not specify how the Membership Interests that are the subject
of such proxy are to be voted with respect to such issue.
ARTICLE VII
MANAGEMENT OF THE COMPANY
7.1. Management of Business. Except as otherwise expressly provided
in the Act or in this Agreement, the powers of the Company shall be exercised
by or under the authority of, and the business and affairs of the Company
shall be managed under the direction of, a board of Managers (the "Board of
Managers") as described herein, in the same manner as the board of directors
of a Delaware corporation. Except as specifically provided for in this
Agreement or required by the Act, no Member shall have the power to act for or
on behalf of or to bind the Company.
7.2. Board of Managers; Number and Election of Managers. (a) The
Board of Managers shall consist of not less than three (3) Managers, the
number thereof to be determined from time to time by resolution of the Board
of Managers; provided, however, that at all times at least a majority of the
Managers shall be citizens of the United States.
(b) In any election of Managers to serve on the Board of Managers,
each Member shall vote its respective Membership Interests in such manner as
necessary to cause the election of the Managers designated in accordance with
the provisions of subsection (a) above, each of whom shall hold office until
the next annual meeting of Members and the election and qualification of his
or her successor, or until his or her earlier death, resignation or removal.
There shall be no cumulative voting with respect to the election of Managers.
(c) Any Manager may resign at any time by giving written notice to
the Chairman of the Board, the President or the Secretary. Unless otherwise
stated in a notice of
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resignation, it shall take effect when received by the officer to whom it is
directed, without any need for its acceptance. Any Manager or the entire Board
of Managers may be removed, with or without cause, at any time by the Members
holding a majority of the Membership Interests then entitled to vote at an
election of Managers.
(d) Any newly created Manager position or any vacancy occurring in
the Board of Managers for any reason may be filled by a majority of the
remaining Managers, although less than a quorum, or by a plurality of the
votes cast in the election of Managers at a meeting of Members. Each Manager
elected to replace a former Manager shall hold office until the expiration of
the term of office of the Managers whom he or she has replaced and the
election and qualification of his or her successor, or until his or her
earlier death, resignation or removal. A Manager elected to fill a newly
created Manager position shall serve until the next annual meeting of Members
and the election and qualification of his or her successor, or until his or
her earlier death, resignation or removal.
7.3. General Powers of Board of Managers. Except as may otherwise
be expressly provided in this Agreement, the Board of Managers shall have
complete and exclusive discretion in the management and control of the
business and affairs of the Company, including the right to make and control
all ordinary and usual decisions concerning the business and affairs of the
Company. The Board of Managers shall possess all power, on behalf of the
Company, to do or authorize the Company or to direct the executive officers of
the Company, on behalf of the Company, to do all things necessary or
convenient to carry out the business and affairs of the Company.
7.4. Place of Meetings. Meetings of the Board of Managers may be
held either within or without the State of Delaware at whatever place is
specified in the call of the meeting. In the absence of specific designation,
the meetings shall be held at the principal office of the Company as provided
in Section 2.5. The Managers may appoint from among themselves a Chairman of
the Board to preside at meetings of the Board of Managers; provided, however,
that at all times the Chairman of the Board shall be a citizen of the United
States. Any Manager shall be permitted to attend any meeting of the Board of
Managers in person or by conference call pursuant to Section 7.10.
7.5. Regular Meeting. A regular annual meeting of the Board of
Managers shall be held, without call or notice, immediately after and at the
same place as the annual meeting of Members, for the purpose of organizing the
Board of Managers, electing officers and transacting any other business that
may properly come before such meeting. If the Members shall elect the Managers
by written consent of Members as permitted by Section 6.8, a special meeting
of the Board of Managers shall be called as soon as practicable after such
election for the purposes described in the Members preceding sentence.
Additional regular meetings of the Board of Managers may be held without call
or notice at such times as shall be fixed by resolution of the Board of
Managers.
7.6. Special Meetings. Special meetings of the Board of Managers
may be called by the Chairman of the Board, the President, the Secretary, or
by any member of the Board of Managers. Notice of a special meeting of the
Board of Managers shall be given by the person or persons calling the meeting
at least twenty-four hours before the special meeting. The purpose or purposes
of a special meeting need not be stated in the call or notice.
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7.7. Organization. Meetings of the Board of Managers shall be
presided over by the Chairman of the Board, or in his or her absence, by the
President, or in his or her absence by a chairman chosen at the meeting;
provided, however, that at all times the Person presiding over a meeting shall
be a citizen of the United States. The Secretary shall act as secretary of the
meeting, but in his or her absence the chairman of the meeting may appoint any
person to act as secretary of the meeting. A majority of the Managers present
at a meeting, whether or not they constitute a quorum, may adjourn such
meeting to any other date, time or place without notice other than
announcement at the meeting.
7.8. Quorum; Vote Required for Action. At all meetings of the Board
of Managers, (a) a majority of the whole Board of Managers shall constitute a
quorum for the transaction of business; provided, however, that a majority of
each quorum must be citizens of the United States, and (b) the vote of a
majority of the Managers present at a meeting at which a quorum is present
shall be the act of the Board of Managers.
7.9. Committees. The Board of Managers may, by resolution passed by
a majority of the whole Board of Managers, designate one or more committees,
each committee to consist of one or more Managers of the Company; provided,
however, that a majority of each committee shall at all times be citizens of
the United States. The Board of Managers may designate one or more Managers as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of
a member of the committee, the member or members present at any meeting and
not disqualified from voting, whether or not a quorum, may unanimously appoint
another Manager to act at the meeting in place of any such absent or
disqualified member. Any such committee, to the extent permitted by law and
provided in the resolution of the Board of Managers designating such
committee, or an amendment to such resolution, shall have and may exercise all
the powers and authority of the Board of Managers in the management of the
business and affairs of the Company, and may authorize the seal of the Company
to be affixed to all papers which may require it.
7.10. Telephonic Meetings. Managers, or any committee of Managers
designated by the Board of Managers, may participate in a meeting of the Board
of Managers or such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section 7.10 shall constitute presence in person at such meeting.
7.11. Informal Action by Managers. Any action required or permitted
to be taken at any meeting of the Board of Managers, or of any committee
thereof, may be taken without a meeting if all members of the Board of
Managers or such committee, as the case may be, consent thereto in writing
(which may be in counterparts), and the written consent or consents are filed
with the minutes of proceedings of the Board of Managers or such committee.
7.12. Committee Rules. Unless the Board of Managers otherwise
provides, each committee designated by the Board of Managers may make, alter
and repeal rules for the conduct of its business. In the absence of such rules
each committee shall conduct its business in the same manner as the Board of
Managers conducts its business pursuant to this Article VII.
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7.13. Reliance Upon Records. Every Manager, and every member of any
committee of the Board of Managers, shall, in the performance of his or her
duties, be fully protected in relying in good faith upon the records of the
Company and upon such information, opinions, reports or statements presented
to the Company by any of its officers or employees, or committees of the Board
of Managers, or by any other person as to matters the director or member
reasonably believes are within such other person's professional or expert
competence and who has been selected with reasonable care by or on behalf of
the Company, including, but not limited to, such records, information,
opinions, reports or statements as to the value and amount of the assets,
liabilities and/or net profits of the Company, or any other facts pertinent to
the existence and amount of surplus or other funds from which distribution
might properly be declared and paid, or with which Membership Interests might
properly be purchased or redeemed.
7.14. Interested Managers. A Manager who is directly or indirectly
a party to a contract or transaction with the Company, or is a director or
officer of or has a financial interest in any other corporation, limited
liability company, partnership, association or other organization which is a
party to a contract or transaction with the Company, may be counted in
determining whether a quorum is present at any meeting of the Board of
Managers or a committee thereof at which such contract or transaction is
considered or authorized, and such Manager may participate in such meeting and
vote on such authorization to the extent permitted by applicable law.
7.15. Compensation. The Board of Managers shall have the authority
to fix the compensation of Managers. The Managers shall be paid their
reasonable expenses, if any, of attendance at each meeting of the Board of
Managers or a committee thereof and may be paid a fixed sum for attendance at
each such meeting and an annual retainer or salary for services as a Manager
or committee member. No such payment shall preclude any Manager from serving
the Company in any other capacity and receiving compensation therefor.
7.16. Presumption of Assent. Unless otherwise provided by the laws
of the State of Delaware, a Manager who is present at a meeting of the Board
of Managers or a committee thereof at which action is taken on any matter
shall be presumed to have assented to the action taken unless his or her
dissent shall be entered in the minutes of such meeting or unless he or she
shall file his or her written dissent to such action with the person acting as
secretary of such meeting before the adjournment thereof or shall forward such
dissent by registered mail to the Secretary immediately after the adjournment
of such meeting. Such right to dissent shall not apply to a Manager who voted
in favor of such action.
7.17. Power of Attorney. Without limitation of the powers and
duties of the Board of Managers, each Member hereby appoints the Board of
Managers and the Managers serving thereon (and any Liquidator pursuant to
Section 11.2), acting together, as that Member's attorney-in-fact for the
purpose of executing, swearing to, acknowledging, and delivering all
certificates, documents, and other instruments as may be necessary,
appropriate, or advisable in the judgment of the Board of Managers (or the
Liquidator) in furtherance of the business of the Company or complying with
applicable law. This power of attorney is irrevocable and is coupled with an
interest. On request by the Board of Managers (or the Liquidator), a Member
shall confirm its grant of this power of attorney or any use thereof by the
Board of Managers (or
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the Liquidator) and shall execute, swear to, acknowledge, and deliver any such
certificate, document, or other instrument.
ARTICLE VIII
OFFICERS
8.1. Executive Officers; Election; Qualification; Term of Office.
The Board of Managers shall elect a Chairman of the Board from among its
members. The Board of Managers shall also elect a President, a Chief Financial
Officer and a Secretary and may elect one or more Vice Presidents, one or more
Assistant Secretaries, a Treasurer and one or more Assistant Treasurers. Any
number of offices may be held by the same person. Each officer shall hold
office until the first meeting of the Board of Managers after the annual
meeting of Members next succeeding his or her election, and until his or her
successor is elected and qualified or until his or her earlier death,
resignation or removal. The Chairman of the Board and the President shall at
all times be citizens of the United States.
8.2. Resignation; Removal; Vacancies. Any officer may resign at any
time by giving written notice to the Chairman of the Board, the President or
the Secretary. Unless otherwise stated in a notice of resignation, it shall
take effect when received by the officer to whom it is directed, without any
need for its acceptance. The Board of Managers may remove any officer, with or
without cause, at any time, but such removal shall be without prejudice to the
contractual rights of such officer, if any, with the Company. A vacancy
occurring in any office of the Company may be filled for the unexpired portion
of the term thereof by the Board of Managers at any regular or special
meeting.
8.3. Powers and Duties of Executive Officers. The officers of the
Company shall have such powers and duties in the management of the Company as
may be prescribed by the Board of Managers and, to the extent not so provided,
as generally pertain to their respective offices in a Delaware corporation,
subject to the control of the Board of Managers. The Board of Managers may
require any officer, agent or employee to give security for the faithful
performance of his or her duties.
8.4. Chief Executive Officer. Unless the Board of Managers
designates the Chairman of the Board as such, the President shall be the Chief
Executive Officer of the Company and shall in general supervise and control
all of the business affairs of the Company, subject to the direction of the
Board of Managers. The President may execute, in the name and on behalf of the
Company, any deeds, mortgages, bonds, contracts or other instruments which the
Board of Managers or a committee thereof has authorized to be executed, except
in cases where the execution shall have been expressly delegated by the Board
of Managers or a committee thereof to some other officer or agent of the
Company.
8.5. Chief Financial Officer. The Chief Financial Officer shall in
general supervise and control all of the financial affairs of the Company,
subject to the direction of the Board of Managers and the President. In the
absence of the President or his or her inability or refusal to act, the Chief
Financial Officer may execute, in the name and on behalf of the Company, any
deeds, mortgages, bonds, contracts or other instruments which the Board of
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Managers or a committee thereof has authorized to be executed, except in cases
where the execution shall have been expressly delegated by the Board of
Managers or a committee thereof to some other officer or agent of the Company.
8.6. Secretary. In addition to such other duties, if any, as may be
assigned to the Secretary by the Board of Managers, the Chairman of the Board
or the President, the Secretary shall (i) keep the minutes of proceedings of
the Members, the Board of Managers and any committee of the Board of Managers
in one or more books provided for that purpose; (ii) see that all notices are
duly given in accordance with the provisions of this Agreement or as required
by law; (iii) be the custodian of the records of the Company; and (iv) keep or
cause to be kept a register of the name and address of each Member, as the
same shall be furnished to the Secretary by such Member, and the Capital
Contribution of such Member.
8.7. Compensation. The compensation of the officers and agents of
the Company shall be fixed from time to time by the Board of Managers or by
such officer as it shall designate for such purpose. No officer shall be
prevented from receiving such compensation by reason of the fact that he or
she is also a Manager of the Company.
ARTICLE IX
FISCAL MATTERS; BOOKS AND RECORDS
9.1. Ownership of Company Property. Company Property shall be
deemed to be owned by the Company as an entity, and no Member or Manager,
individually or collectively, shall have any ownership interest in such
Company Property or any portion thereof. Title to any or all Company Property
may be held in the name of the Company or one or more nominees, as the Board
of Managers may determine. All Company Property shall be recorded as the
property of the Company on its books and records, irrespective of the name in
which legal title to such Company Property is held.
9.2. Bank Accounts; Investments. Capital Contributions, revenues
and any other Company funds shall be deposited by the Company in a bank
account established in the name of the Company, or shall be invested by the
Company, at the direction of the Board of Managers, in furtherance of the
purposes of the Company. No other funds shall be deposited into Company bank
accounts or commingled with Company investments. Funds deposited in the
Company's bank accounts may be withdrawn only to be invested in furtherance of
the Company's purposes, to pay Company debts or obligations or to be
distributed to the Members pursuant to this Agreement.
9.3. Records Required by Act; Right of Inspection. (a) During the
term of the Company's existence and for a period of four (4) years thereafter,
there shall be maintained in the Company's principal office specified pursuant
to Section 2.5 all records required to be kept pursuant to the Act, including,
without limitation, a current list of the names, addresses and Membership
Interests held by each of the Members (including the dates on which each of
the Members became a Member), copies of federal, state and local information
or income tax returns for each of the Company's tax years, copies of this
Agreement and the Certificate of Formation,
15
including all amendments or restatements, and correct and complete books and
records of account of the Company.
(b) On written request stating the purpose, a Member may examine
and copy in person, at any reasonable time, for any proper purpose reasonably
related to such Member's interest as a Member of the Company, and at the
Member's expense, records required to be maintained under the Act and such
other information regarding the business, affairs and financial condition of
the Company as is just and reasonable for the Member to examine and copy. Upon
written request by any Member made to the Company at the address of the
Company's principal office specified in Section 2.5, the Company shall provide
to the Member without charge true copies of (i) this Agreement and the
Certificate of Formation and all amendments or restatements, and (ii) any of
the tax returns of the Company described above.
9.4. Books and Records of Account. The Company shall maintain
adequate books and records of account that shall be maintained on the accrual
method of accounting and on a basis consistent with appropriate provisions of
the Code, containing, among other entries, a Capital Account for the
Membership Interests held by each Member.
9.5. Delivery of Financial Statements to Members. As to each of the
first three fiscal quarters of the Company and each fiscal year of the
Company, the Company shall send to each Member a copy of (a) the balance sheet
of the Company as of the end of the fiscal quarter or year, (b) an income
statement of the Company for such quarter or year, and (c) a statement showing
the revenues distributed by the Company to Members in respect of such quarter
or year. Such financial statements shall be delivered no later than forty-five
(45) days following the end of the fiscal quarter to which the statements
apply, except that the financial statements relating to the end of the fiscal
year shall be delivered no later than ninety (90) days following the end of
such fiscal year. Each Member shall also have the right to receive copies of
the operating plan, strategic plan and capital expenditure budget of the
Company for any fiscal year upon request.
9.6. Audits. The fiscal year-end financial statements to be
delivered pursuant to Section 9.5 shall be audited. The audit shall be
performed by an accounting firm approved by the Board of Managers.
9.7. Fiscal Year. The Company's fiscal year shall end on December
31 of each calendar year. Each fiscal year shall consist of four quarters
ending on March 31, June 30, September 30 and December 31 of each fiscal year.
Each such quarter shall be referred to as a "fiscal quarter".
ARTICLE X
INDEMNIFICATION AND INSURANCE
10.1. Indemnification and Advancement of Expenses. (a) The Company
shall indemnify any Person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Company), by reason of the fact that he, she or it
is or was a Manager, Member, officer, employee, representative or agent of the
16
Company, or is or was serving at the request of the Company as a director,
officer, manager, employee, representative or agent of another corporation,
limited liability company, general partnership, limited partnership, joint
venture, trust, business trust or other enterprise or entity, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him, her or it in connection with such
action, suit or proceeding if he, she or it acted in good faith and in a
manner he, she or it reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his, her or its conduct was
unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that such Person did
not act in good faith and in a manner which he, she or it reasonably believed
to be in or not opposed to the best interests of the Company, and, with
respect to any criminal action or proceeding, had reasonable cause to believe
that his, her or its conduct was unlawful.
(b) The Company shall indemnify any Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Company to procure a judgment in its
favor by reason of the fact that he, she or it is or was a Manager, Member,
officer, employee, representative or agent of the Company, or is or was
serving at the request of the Company as a director, officer, manager,
employee, representative or agent of another corporation, limited liability
company, general partnership, limited partnership, joint venture, trust,
business trust or other enterprise or entity, against expenses (including
attorneys' fees) actually and reasonably incurred by him, her or it in
connection with the defense or settlement of such action or suit if he, she or
it acted in good faith and in a manner he, she or it reasonably believed to be
in or not opposed to the best interests of the Company, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such Person shall have been adjudged to be liable to the Company unless
and only to the extent that a Delaware state court or the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which such court shall deem proper.
(c) To the extent that a Manager, Member, officer, employee,
representative or agent of the Company has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
paragraphs (a) and (b) of this Section 10.1, or in defense of any claim, issue
or matter therein, he, she or it shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him, her or it
in connection therewith.
(d) Any indemnification under paragraphs (a) and (b) of this
Section 10.1 (unless ordered by a court of competent jurisdiction) shall be
made by the Company only as authorized in the specific case upon a
determination that indemnification of the Manager, Member, officer, employee,
representative or agent is proper in the circumstances because he, she or it
has met the applicable standard of conduct set forth in paragraphs (a) and (b)
of this Section 10.1. Such determination shall be made (i) by the Board of
Managers by a majority vote of Managers who were not parties to such action,
suit or proceeding (even if such Managers constitute less than a quorum of
Managers), (ii) if a quorum of disinterested Managers so directs, by
independent legal counsel in a written opinion or (iii) by the Members.
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(e) Expenses (including attorneys' fees) incurred by a Manager or
Member in defending any civil, criminal, administrative or investigative
action, suit or proceeding shall be paid by the Company in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Manager or Member to repay such amount if
it shall ultimately be determined that he, she or it is not entitled to be
indemnified by the Company pursuant to this Section 10.1. Such expenses
(including attorneys' fees) incurred by other officers, employees,
representatives and agents shall be so paid upon such terms and conditions, if
any, as the Board of Managers deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.1 shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any by-law, agreement, vote of Members or disinterested
Managers or otherwise, both as to action in an official capacity and as to
action in another capacity while holding such office.
(g) For purposes of this Section 10.1, any reference to the
"Company" shall include, in addition to the resulting or surviving business
entity, any constituent business entity (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, managers, members, employees, representatives or agents,
so that any Person who is or was a director, officer, manager, member,
employee, representative or agent of such constituent business entity, or is
or was serving at the request of such constituent business entity as a
director, officer, manager, employee, representative or agent of another
corporation, limited liability company, partnership, joint venture, trust or
other enterprise, shall stand in the same position under the provisions of
this Section 10.1 with respect to the resulting or surviving business entity
as he or she would have with respect to such constituent business entity if
its separate existence had continued.
(h) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.1 shall continue as to a Person who has
ceased to be a Manager, Member, officer, employee, representative or agent and
shall inure to the benefit of the heirs, executors and administrators of such
Person.
(i) Notwithstanding anything in this Article to the contrary, the
Company will not have the obligation of indemnifying any Person with respect
to proceedings, claims or actions initiated or brought voluntarily by such
Person and not by way of defense.
10.2. Insurance. The Company may purchase and maintain insurance or
another arrangement on behalf of any Person who is or was a Manager, Member,
officer, employee, agent or other Person identified in Section 10.1 against
any liability asserted against such Person or incurred by such Person in such
a capacity or arising out of the status of such a Person, whether or not the
Company would have the power to indemnify such Person against that liability
under Section 10.1 or otherwise.
10.3. Limit on Liability of Members. The indemnification set forth
in this Article X shall in no event cause the Members to incur any personal
liability beyond their total Capital Contributions, nor shall it result in any
liability of the Members to any third party.
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ARTICLE XI
DISSOLUTION AND WINDING UP
11.1. Events Causing Dissolution. The Company shall be dissolved
upon the first of the following events to occur:
(a) The written consent of all Members at any time to
dissolve and wind up the affairs of the Company;
(b) The death, retirement, resignation, expulsion, Bankruptcy or
dissolution of any Member or the occurrence of any other event that terminates
the continued membership of any Member in the Company, unless there is at
least one remaining Member and the business of the Company is continued by the
consent of all remaining Members within 90 days following the occurrence of
any such event; or
(c) The occurrence of any other event that causes the dissolution
of a limited liability company under the Act.
11.2. Winding Up. If the Company is dissolved pursuant to Section
11.1, the Company's affairs shall be wound up as soon as reasonably
practicable in the manner set forth below.
(a) The winding up of the Company's affairs shall be supervised by
a liquidator (the "Liquidator"). The Liquidator shall be the Board of Managers
or, if the Members prefer, a liquidator or liquidating committee selected by
the holders of at least a majority of the Membership Interests.
(b) In winding up the affairs of the Company, the Liquidator shall
have full right and unlimited discretion, in the name of and for and on behalf
of the Company to:
(1) Prosecute and defend civil, criminal or
administrative suits;
(2) Collect Company assets, including obligations
owed to the Company;
(3) Settle and close the Company's business;
(4) Dispose of and convey all Company Property for cash, and in
connection therewith to determine the time, manner and terms of any sale
or sales of Company Property, having due regard for the activity and
condition of the relevant market and general financial and economic
conditions;
(5) Pay all reasonable selling costs and other expenses incurred in
connection with the winding up out of the proceeds of the disposition of
Company Property;
(6) Discharge the Company's known liabilities and, if necessary, to
set up, for a period not to exceed five (5) years after the date of
dissolution, such cash
19
reserves as the Liquidator may deem reasonably necessary for any
contingent or unforeseen liabilities or obligations of the Company;
(7) Distribute any remaining proceeds from the
sale of Company Property to the Members;
(8) Prepare, execute, acknowledge and file articles of dissolution
under the Act and any other certificates, tax returns or instruments
necessary or advisable under any applicable law to effect the winding up
and termination of the Company; and
(9) Exercise, without further authorization or consent of any of
the parties hereto or their legal representatives or successors in
interest, all of the powers conferred upon the Board of Managers under
the terms of this Agreement to the extent necessary or desirable in the
good faith judgment of the Liquidator to perform its duties and
functions. The Liquidator (if not a Manager or the Board of Managers)
shall not be liable as a Manager to the Members and shall, while acting
in such capacity on behalf of the Company, be entitled to the
indemnification rights set forth in the Certificate of Formation and in
Article X.
11.3. Compensation of Liquidator. The Liquidator appointed as
provided herein shall be entitled to receive such reasonable compensation for
its services as shall be agreed upon by the Liquidator and the holders of at
least a majority of the Membership Interests.
11.4. Distribution of Company Property and Proceeds of Sale
Thereof. (a) Upon completion of all desired sales of Company Property, and
after payment of all selling costs and expenses, the Liquidator shall
distribute the proceeds of such sales, and any Company Property that is to be
distributed in kind, to the following groups in the following order of
priority:
(1) to satisfy Company liabilities to creditors, including Members,
Managers, officers and employees who are creditors, to the extent
otherwise permitted by law (other than for past due Company
distributions), whether by payment or establishment of reserves;
(2) to satisfy Company obligations to Members and
former Members to pay past due Company distributions;
and
(3) to the Members, in accordance with the positive balances in
their respective Capital Accounts determined after allocating all items
for all periods prior to and including the date of distribution,
including items relating to sales and distributions pursuant to this
Article XI.
All distributions required under this Section 11.4 shall be made to the
Members by the end of the taxable year in which the liquidation occurs or, if
later, within 90 days after the date of such liquidation.
20
(b) The claims of each priority group specified above shall be
satisfied in full before satisfying any claims of a lower priority group. If
the assets available for disposition are insufficient to dispose of all of the
claims of a priority group, the available assets shall be distributed in
proportion to the amounts owed to each creditor or the respective Capital
Account balances or Membership Interests of each Member in such group.
11.5. Final Audit. Within a reasonable time following the
completion of the liquidation, the Liquidator shall supply to each of the
Members a statement that shall set forth the assets and the liabilities of the
Company as of the date of complete liquidation and each Member's pro rata
portion of distributions pursuant to Section 11.4.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1. Counterparts. This Agreement may be executed in several
counterparts, each of which will be deemed an original but all of which will
constitute one and the same agreement.
12.2. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto and contains all of the agreements among
such parties with respect to the subject matter hereof. This Agreement
supersedes any and all other agreements, either oral or written, between such
parties with respect to the subject matter hereof.
12.3. Partial Invalidity. Wherever possible, each provision hereof
shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such provision shall be ineffective to the extent, but only to the
extent, of such invalidity, illegality or unenforceability without
invalidating the remainder of such invalid, illegal or unenforceable provision
or provisions or any other provisions hereof, unless such a construction would
be unreasonable.
12.4. Amendment. Except as expressly provided herein, this
Agreement may be amended only by a written agreement executed by the Company
and all Members.
12.5. Binding Effect. Subject to the provisions of this Agreement
relating to transferability, this Agreement will be binding upon and shall
inure to the benefit of the parties, and their respective distributees, heirs,
successors and assigns.
12.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the local, internal laws of the State of
Delaware. In particular, this Agreement is intended to comply with the
requirements of the Act and the Certificate of Formation. In the event of a
direct conflict between the provisions of this Agreement and the mandatory
provisions of the Act or any provision of the Certificate of Formation, the
Act and the Certificate of Formation, in that order of priority, will control.
12.7. Offset. Whenever the Company is to pay any sum to any Member,
any amounts that Member owes the Company may be deducted from that sum before
payment.
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12.8. Effect of Waiver or Consent. A waiver or consent, express or
implied, to or of any breach or default by any Person in the performance by
that Person of its obligations with respect to the Company is not a consent or
waiver to or of any other breach or default in the performance by that Person
of the same or any other obligations of that Person with respect to the
Company. Failure on the part of a Person to complain of any act of any Person
or to declare any Person in default with respect to the Company, irrespective
of how long that failure continues, does not constitute a waiver by that
Person of its rights with respect to that default until the applicable
statute-of-limitations period has run.
12.9. Further Assurances. In connection with this Agreement and the
transactions contemplated hereby, each Member shall execute and deliver any
additional documents and instruments and perform any additional acts that may
be necessary or appropriate to effectuate and perform the provisions of this
Agreement and such transactions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the dates set below their names, to be effective on the date first above
written.
THE COMPANY:
XXXXX LINES LIMITED, LLC
(a Delaware limited liability
company)
Dated: June 25, 1997 By: /s/ Xxx X. Xxxxxx
-------------------------------
Name: Xxx X. Xxxxxx
Title: Chief Financial Officer
THE INITIAL MEMBER:
XXXXX LINES LIMITED
(a Bermuda corporation)
Dated: June 25, 1997 By: /s/ Xxx X. Xxxxxx
-------------------------------
Name: Xxx X. Xxxxxx
Title: Chief Financial Officer
22
