LIMITED LIABILITY COMPANY AGREEMENT OF UNITED STATES COMMODITY FUNDS LLC Dated as of June 12, 2008
Exhibit 3.4
FOURTH
AMENDED AND RESTATED
OF
UNITED
STATES COMMODITY FUNDS LLC
Dated
as of June 12, 2008
CONTENTS
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Page
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ARTICLE
I DEFINITIONS
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2
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ARTICLE
II ORGANIZATIONAL MATTERS
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3
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Section
2.1
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Formation
and Continuation
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3
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Section
2.2
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Name
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3
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Section
2.3
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Purposes
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3
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Section
2.4
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Powers
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3
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Section
2.5
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Offices:
Statutory Agent
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3
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ARTICLE
III MEMBER
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4
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Section
3.1
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Membership
Interest
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4
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Section
3.2
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Capital
Contribution
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4
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Section
3.3
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Uncertificated
Membership Interest
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4
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Section
3.4
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Rights
of the Member
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4
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ARTICLE
IV DIRECTORS
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4
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Section
4.1
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Number
and Qualification
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4
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Section
4.2
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Election
and Term of Office
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4
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Section
4.3
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Resignation
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4
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Section
4.4
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Removal
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5
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Section
4.5
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Vacancies
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5
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Section
4.6
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General
Powers
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5
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Section
4.7
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Compensation
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5
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ARTICLE
V MEETINGS OF DIRECTORS
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5
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Section
5.1
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Place
of Meeting
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5
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Section
5.2
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Annual
Meeting
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5
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Section
5.3
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Regular
Meetings
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5
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Section
5.4
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Special
Meetings
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5
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Section
5.5
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Quorum
and Action
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6
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Section
5.6
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Presumption
of Assent to Action
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6
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Section
5.7
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Telephonic
Meetings
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6
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Section
5.8
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Action
Without Meeting
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6
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Section
5.9
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Waiver
of Notice
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6
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ARTICLE
VI COMMITTEES OF THE DIRECTORS
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7
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Section
6.1
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Company
and Authorities
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7
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Section
6.2
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Audit
Committee
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7
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Section
6.3
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Minutes
and Rules of Procedure
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7
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Section
6.4
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Vacancies
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7
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Section
6.5
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Telephonic
Meetings
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7
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Section
6.6
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Action
Without Meeting
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8
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ARTICLE
VII OFFICERS
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8
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Section
7.1
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Positions
and Powers
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8
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Section
7.2
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Election,
Term of Office and Qualification
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8
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Section
7.3
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Resignation
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8
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Section
7.4
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Removal
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8
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Section
7.5
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Vacancies
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8
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Section
7.6
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The
President
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8
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Section
7.7
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The
Vice Presidents
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9
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Section
7.8
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The
Secretary
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9
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Section
7.9
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Assistant
Secretaries
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9
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Section
7.10
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The
Treasurer
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9
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Section
7.11
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Assistant
Treasurers
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9
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Section
7.12
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Treasurer’s
Bond
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9
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Section
7.13
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Other
Officers
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10
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Section
7.14
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Salaries
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10
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ARTICLE
VIII CAPITAL ACCOUNT
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10
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Section
8.1
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Capital
Account
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10
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ARTICLE
IX DISTRIBUTIONS
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10
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Section
9.1
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Distributions
During Term of Company
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10
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Section
9.2
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Distributions
Upon Liquidation
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10
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Section
9.3
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Limitation
on Distributions
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10
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ARTICLE
X INDEMNIFICATION
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10
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Section
10.1
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Definitions
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10
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Section
10.2
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Indemnification
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11
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Section
10.3
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Successful
Defense
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11
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Section
10.4
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Determinations
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11
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Section
10.5
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Advancement
of Expenses
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12
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Section
10.6
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Other
Indemnification and Insurance
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12
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Section
10.7
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Construction
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12
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Section
10.8
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Continuing
Offer, Reliance, etc
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12
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Section
10.9
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Effect
of Amendment
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13
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ARTICLE
XI DISSOLUTION AND FINAL LIQUIDATION
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13
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Section
11.1
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Dissolution
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13
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Section
11.2
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Winding
Up
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13
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Section
11.3
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Distribution
of Assets
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13
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Section
11.4
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Revocation
of Voluntary Dissolution Proceedings
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13
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ii
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ARTICLE
XII AMENDMENT
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13
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Section
12.1
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Amendment
of Agreement.
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13
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ARTICLE
XIII GENERAL PROVISIONS
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13
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Section
13.1
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Liability
to Third Parties.
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13
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Section
13.2
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Waiver
of Notice.
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14
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Section
13.3
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Seal.
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14
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Section
13.4
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Fiscal
Year.
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14
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Section
13.5
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Checks,
Notes, Etc.
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14
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Section
13.6
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Voting
Upon Securities by the Company.
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14
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Section
13.7
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Titles
and Captions.
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14
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Section
13.8
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Pronouns
and Plurals.
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14
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Section
13.9
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Subject
to All Laws.
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14
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Section
13.10
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Allocation
of Profits and Losses; Tax Status.
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14
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iii
FOURTH AMENDED AND RESTATED
OF
UNITED
STATES COMMODITY FUNDS LLC
THIS FOURTH AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT of UNITED STATES COMMODITY FUNDS LLC, is
entered into as of the 12th day of
June, 2008, by Xxxxxxxxxx Holdings, Inc., as the sole member of the limited
liability company.
Recitals:
A. The
Company was formed as a Delaware limited liability company under the name
“Standard Asset Management, LLC” by filing a certificate of formation pursuant
to the Delaware Limited Liability Company Act (as amended from time to time, and
together with any successor statute, the “Act”) that was accepted for filing by
the Secretary of State on May 10, 2005 and amended on June 10, 2005 to rename
the Company “Victoria Bay Asset Management, LLC”; and
B. The
Member entered into a limited liability company agreement dated as of May 10,
2005 as amended and restated by the First Amended and Restated Limited Liability
Company Agreement dated as of September 30, 2005, regarding the operation of the
Company and its rights and obligations therein, as further amended and restated
by the Second Amended and Restated Limited Liability Company Agreement dated as
of September 8, 2006, and as further amended and restated by the Third Amended
and Restated Limited Liability Company Agreement dated as of December 12, 2006
(the “LLC Agreement”);
C. The
Company has filed an amendment to the certificate of formation to rename the
Company “United States Commodity Funds LLC”; and
D. The
Member desires to amend and restate the LLC Agreement to reflect the new name of
the Company;
NOW, THEREFORE, the Member,
intending to be legally bound hereby, agrees as follows:
ARTICLE
I
DEFINITIONS
When used
in this Fourth Amended and Restated Limited Liability Company Agreement, the
following terms shall have the respective meanings assigned to them in this
Article I or in the Sections referenced below:
“Act” shall have the
meaning specified in the recitals to this Agreement.
“Agreement” means this
Fourth Amended and Restated Limited Liability Company Agreement, as amended from
time to time.
“Board of Directors”
means the board of directors of the Company provided for in Article IV of this
Agreement.
“Certificate” means
the Certificate of Formation of the Company filed in the office of the Secretary
of State on May 10, 2005, as amended from time to time.
“Code” means the
Internal Revenue Code of 1986, as amended.
“Company” the Delaware
limited liability company known as “United States Commodity Funds LLC”, as such
limited liability company may be constituted from time to time.
“Indemnitee” shall
have the meaning specified in Section 10.1(a).
“Management Director”
shall mean a Person selected in accordance with Article IV of this Agreement who
shall have the powers and duties to manage the business and affairs of the
Company and exercise its powers to the extent set forth in this Agreement, the
Certificate and the Act. Each Management Director shall be a
“manager” of the Company within the meaning of the Act.
“Member” means
Xxxxxxxxxx Holding, Inc., a Delaware corporation, and its
successors.
“Non-Management
Director” shall mean any Person selected in accordance with Article IV of
this Agreement who is not a Management Director.
“Official Capacity”
shall have the meaning specified in Section 10.1(b).
“Person” means any
individual, corporation, limited liability company, partnership, trust, estate
or other entity.
“Proceeding” shall
have the meaning specified in Section 10.1(c).
“Property” means any
Company property, real or personal, tangible or intangible, including but not
limited to any legal or equitable interest in such property, ownership interests
in entities owning real or personal property, and money.
2
“Regulations” means,
except where the context indicates otherwise, the final, temporary, or proposed
regulations of the Department of the Treasury under the Code as such regulations
may be lawfully changed from time to time.
“Secretary of State”
means the Secretary of State of the State of Delaware.
“U.S.” means the
United States of America.
ARTICLE
II
ORGANIZATIONAL
MATTERS
Section
2.1
Formation and
Continuation.
(a) The
Company was formed upon the issuance by the Secretary of State of the
Certificate for the Company. This Agreement shall be effective at the
time of such filing. Xxxxxxxx X. Xxxxxx is hereby designated as an
authorized person, within the meaning of the Act, to execute, deliver and file
such certificate of formation, and any action taken prior to the execution of
this Agreement in connection therewith by any such person is hereby ratified and
confirmed. In addition, Xxxxxx Xxx is designated as an authorized
person within the meaning of the Act. The Management Directors may
designate any person to be an authorized person, within the meaning of the
Act.
(b) The
Company shall continue in existence from the date of its formation in
perpetuity, unless earlier dissolved pursuant to Article XI of this
Agreement.
(c) The
parties hereto intend that this Agreement shall constitute a “limited liability
company agreement” within the meaning of Section 18-101(7) of the
Act.
Section
2.2
Name. The name
of the Company is “United States Commodity Funds LLC”. The name of
the Company may be changed from time to time by amendment of the
Certificate. The Company may transact business under an assumed name
by filing an assumed name certificate in the manner prescribed by applicable
law.
Section
2.3 Purposes. The
Company may engage in any lawful business unless a more limited purpose is
stated in the Certificate.
Section
2.4 Powers.
The
Company shall have the powers provided for a limited liability company under the
Act and any powers otherwise allowed under any applicable law.
Section
2.5 Offices: Statutory
Agent.
(a) The
Company’s principal office and the address thereof may be established and
changed from time to time by the Management Directors.
(b) The
registered office of the Company in Delaware shall be the office of the
statutory agent of the Company in Delaware. The statutory agent of
the Company in Delaware is the Corporation Service Company and its address in
the State of Delaware is 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx
00000, County of New Castle. The Company’s registered office,
registered agent and the addresses thereof may be changed from time to time by
the Management Directors in accordance with the Act.
3
(c) The
Company may also have offices at such other places, both within and without the
State of Delaware, as the Management Directors may from time to time
determine or the business of the Company may require.
ARTICLE
III
MEMBER
Section
3.1 Membership
Interest. The
Member is admitted as a member of the Company upon the execution and delivery of
this Agreement, and is the only member of the Company. The Member has
a one hundred percent (100%) interest in the Company and in the profits and
losses thereof.
Section
3.2 Capital
Contribution The
Member made an initial contribution to the capital of the Company, in cash, the
amount of $1,000.00 at time the Company was formed. The Member is not
obligated to make any additional capital contributions to the
Company.
Section
3.3 Uncertificated
Membership Interest. No
certificates shall be issued evidencing the membership interest in the
Company.
Section
3.4 Rights of the
Member. The
Member, in its capacity as such, shall take no part in the management or control
of the Company’s business and shall have no right to act for or bind the Company
or to vote on matters other than the matters specified in this Agreement or
required by any non-waivable provision of the Act.
ARTICLE
IV
DIRECTORS
Section
4.1 Number and
Qualification. There
shall be seven Directors, four of which shall be Management Directors and three
of which shall be Non-Management Directors. The Management Directors
may change the number of Management Directors and Non-Management Directors from
time to time by written consent of the Management
Directors. Directors need not be residents of the State of
Delaware. The Member shall elect the Management Directors and the Non-Management
Directors.
Section
4.2 Election and Term of
Office. The
Directors shall be elected by written consent of the Member (except as provided
in Section 4.8). Each Director elected shall hold office until his
successor shall be chosen by written consent of the Member and shall qualify, or
until his death or his resignation or removal in the manner hereinafter
provided.
Section
4.3 Resignation. Any
Director may resign at any time by giving written notice to the President or
Secretary of the Company. Such resignation shall take effect at the
time specified therein, and unless otherwise specified therein, the acceptance
of such resignation shall not be necessary to make it effective.
4
Section
4.4 Removal. By
written consent of the Member, any Director or Directors, including all of the
Directors, may be removed, either with or without cause.
Section
4.5 Vacancies. Any
vacancy occurring in the Directors (including a vacancy resulting from an
increase in the authorized number of Directors) may be filled by the written
consent of the Member. A Director elected to fill a vacancy shall be
elected for the unexpired term of his predecessor in office.
Section
4.6 General
Powers. 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, the
Management Directors, subject to the terms of this Agreement. The
Non-Management Directors shall only have such authority as the Management
Directors expressly confer upon them. Notwithstanding the foregoing
provisions of this Section 4.6, each of Xxxxxxxx X. Xxxxxx and
Xxxxxx Xxx, so long as he shall remain a Manager and in his capacity as such,
shall have the right to act for and bind the Company, but no other individual
Manager, in his capacity as such, shall have the right to act for or bind the
Company.
Section
4.7 Compensation. Management
Directors as such shall not receive any stated salary for their service, but
expenses of attendance, if any, may be allowed for attendance at any regular or
special meeting of the Directors or a committee thereof, provided that nothing
herein contained shall be construed to preclude any Management Director from
serving the Company in any other capacity and receiving compensation
therefore.
Non-Management
Directors may receive compensation for their services together with expenses of
attendance, if any, for attendance at any regular or special meeting of the
Directors or a committee thereof, as such compensation and expenses may be
determined from time to time by the Management Directors.
ARTICLE
V
MEETINGS
OF DIRECTORS
Section
5.1 Place of
Meeting. The
Directors of the Company may hold their meetings, both regular and special,
either within or without the State of Delaware.
Section
5.2 Annual
Meeting. An
annual meeting of the Directors shall be held at such time and place as shall be
fixed by the consent in writing of a majority of the Directors, and no notice to
the newly elected Directors of such meeting shall be necessary in order legally
to constitute the meeting, provided a quorum shall be present.
Section
5.3 Regular
Meetings Regular
meetings of the Directors, in addition to the annual meetings referred to in
Section 5.2, may be held without notice at such time and place as shall from
time to time be determined by the Directors.
Section
5.4 Special Meetings.
Special
meetings of the Directors may be called by the Chairman, if one shall be
elected, the Vice Chairman, if one shall be elected, or by the President, on one
(1) day’s notice (oral or written) to each Director. Special meetings
shall be called by the President or the Secretary on like notice on the written
request of any Director. Neither the purpose of, nor the business to
be transacted at, any special meeting of the Directors need be specified in the
notice or waiver of notice of such meeting.
5
Section
5.5 Quorum and
Action. At all
meetings of the Directors, the presence of a majority of the number of
Management Directors fixed by or in accordance with this Agreement shall be
necessary and sufficient to constitute a quorum for the transaction of
business. Subject to the preceding sentence, the act of a majority of
the Management Directors at any meeting at which a quorum is present shall be
the act of the Directors unless the act of a greater number is required by law,
the Certificate or this Agreement. If a quorum shall not be present
at any meeting of the Directors, the Directors present may adjourn the meeting
from time to time without notice other than announcement at the meeting until a
quorum shall be present.
Section
5.6 Presumption of Assent to
Action. A
Director who is present at a meeting of the Directors at which action on any
matter is taken shall be presumed to have assented to the action taken unless
his dissent shall be entered in the minutes of the meeting or unless he shall
file his written dissent to such action with the secretary of the meeting before
the adjournment thereof or shall forward such dissent by registered mail to the
Secretary of the Company immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a Director who
votes in favor of such action.
Section
5.7 Telephonic
Meetings. Directors
may participate in and hold a meeting of the Directors by means of conference
telephone or similar communications equipment by means of which all Directors
participating in the meeting can hear each other. Participation in a
meeting pursuant to this Section shall constitute presence in person at such
meeting, except where a Director participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.
Section
5.8 Action Without
Meeting Any
action required or permitted to be taken at a meeting of the Directors may be
taken without a meeting if a consent in writing, setting forth the action so
taken, is signed by all the Management Directors, or members of the committee,
as the case may be, and such consent shall have the same force and effect as a
unanimous vote at a meeting.
Section
5.9 Waiver of
Notice. Attendance
of a Director at a meeting shall constitute a waiver of notice of such meeting
except where a Director attends a meeting for the express purpose of objecting
to the transaction of any business on the grounds that the meeting is not
lawfully called or convened.
6
ARTICLE
VI
COMMITTEES
OF THE DIRECTORS
Section
6.1 Company and
Authorities. Subject
to Section 6.2, the Management Directors, by written consent, may designate from
among the Directors one or more committees, each of which shall be comprised of
one or more Directors, and may designate one or more Directors as alternate
members of any committee, who may, subject to any limitations imposed by the
Management Directors, replace absent or disqualified Directors at any meeting of
that committee. Any such committee, to the extent provided in such
resolution, shall have and may exercise all of the authority of the Directors in
the business and affairs of the Company, subject to the limitations set forth in
the Act or this Agreement and Section 6.2. The members of each such
committee shall serve at the pleasure of the Management Directors, subject to
the limitations set forth in Section 6.2.
Section
6.2 Audit
Committee.
(a) The
audit committee shall consist of all of the Non-Management
Directors.
(b) Notwithstanding
anything in this Agreement to the contrary, the Management Directors shall
establish and maintain an audit committee in compliance with, and granted the
requisite authority and funding pursuant to, any applicable (1) federal
securities laws and regulations, including the Xxxxxxxx-Xxxxx Act of 2002, and
(2) rules, policies and procedures of any national securities exchange on which
the securities issued by any of United States Oil Fund, LP, United States
Natural Gas Fund, LP, United States 12 Month Oil Fund, LP, United States
Gasoline Fund, LP, United States Heating Oil Fund, LP or any other fund for
which the Company acts as general partner, are listed and traded.
Section
6.3 Minutes and Rules of
Procedure. Each
committee designated by the Management Directors shall keep regular minutes of
its proceedings and report the same to the Management Directors when
required. Subject to the provisions of this Agreement, the members of
any committee may fix such committee’s own rules of procedure.
Section
6.4 Vacancies. The
Management Directors shall have the power at any time to fill vacancies in, to
change the membership of, or to dissolve, any committee, provided that with
respect to the audit committee, the Management Directors shall only have the
power to fill vacancies and change the membership of such committee to the
extent permitted by Section 6.2.
Section
6.5 Telephonic
Meetings. Members
of any committee designated by the Management Directors may participate in or
hold a meeting by use of conference telephone or similar communications
equipment by means of which all committee members participating in the meeting
can hear each other. Participation in a meeting pursuant to this
Section shall constitute presence in person at such meeting, except where a
committee member participates in the meeting for the express purpose of
objecting to the transaction of any business on the grounds that the meeting is
not lawfully called or convened.
7
Section
6.6 Action Without
Meeting. Any
action required or permitted to be taken at a meeting of any committee
designated by the Management Directors may be taken without a meeting if a
consent in writing, setting forth the action so taken, is signed by all the
members of the committee, and such consent shall have the same force and effect
as a unanimous vote at a meeting.
ARTICLE
VII
OFFICERS
Section
7.1 Positions and
Powers.
(a) The
Management Directors may, by written consent, appoint a President, one or more
Vice Presidents, a Secretary, a Treasurer, one or more Assistant Secretaries,
one or more Assistant Treasurers and other officers. One individual
may hold any two or more of these offices.
(b) Every
officer is an agent of the Company for the purpose of its
business. The act of an officer, including the execution in the name
of the Company of any instrument for apparently carrying on in the usual way the
business of the Company, binds the Company unless the officer so acting
otherwise lacks authority to act for the Company and the Person with whom the
officer is dealing has knowledge of the fact that the officer has no such
authority.
Section
7.2 Election, Term of Office and
Qualification. Any
officer duly appointed by the Management Directors shall hold office until his
successor shall have been duly appointed and qualified or until his death or his
resignation or removal in the manner hereinafter provided.
Section
7.3 Resignation. Any
officer may resign at any time by giving written notice thereof to the
Management Directors or to the President or Secretary of the
Company. Any such resignation shall take effect at the time specified
therein and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section
7.4 Removal. Any
officer may be removed at any time with or without cause by written consent of
the Management Directors. The removal of any officer shall be without
prejudice to the contract rights, if any, of the individual so
removed. Appointment of an officer or agent shall not of itself
create any contract rights.
Section
7.5 Vacancies. A
vacancy in any office may be filled for the unexpired portion of the term by the
Management Directors by written consent.
Section
7.6 The
President. The
President shall be the chief executive officer of the Company. He
shall have general and active management of the business of the Company, shall
have the general supervision and direction of all other officers of the Company
with full power to see that their duties are properly performed and shall see
that all orders and resolutions of the Management Directors are carried into
effect. Without limiting the authority of the Management Directors to
sign deeds, bonds, mortgages, contracts and other documents on behalf of the
Company, the President may sign, with any other proper officer, any deeds,
bonds, mortgages, contracts and other documents which the Management Directors
have authorized to be executed, except where required by law to be otherwise
signed and executed and except where the signing and execution thereof shall be
expressly delegated by the Management Directors or this Agreement to some other
officer or agent of the Company. In addition, the President shall
perform whatever duties and shall exercise all the powers that are given to him
by the Management Directors.
8
Section
7.7 The Vice
Presidents. The
Vice Presidents shall perform the duties as are given to them by this Agreement
and as may from time to time be assigned to them by the Management Directors or
by the President. At the request of the President, or in his absence
or disability, the Vice President designated by the President (or in the absence
of such designation, the senior Vice President), shall perform the duties and
exercise the powers of the President.
Section
7.8 The
Secretary. The
Secretary shall be custodian of the limited liability company records and shall
perform such other duties as may be prescribed by the Management Directors or by
the President, under whose supervision he shall be. He shall keep in
safe custody the seal of the Company and, when authorized by the Management
Directors, affix the same to any instrument requiring it, and when so affixed,
it may be attested by his signature or by the signature of the Treasurer or an
Assistant Secretary.
Section
7.9 Assistant
Secretaries. The
Assistant Secretaries shall perform the duties as are given to them by this
Agreement or as may from time to time be assigned to them by the Management
Directors or by the Secretary. At the request of the Secretary, or in
his absence or disability, the Assistant Secretary designated by the Secretary
(or in the absence of such designation the senior Assistant Secretary), shall
perform the duties and exercise the powers of the Secretary.
Section
7.10 The
Treasurer. The
Treasurer shall have custody of and be responsible for all funds and securities
of the Company, shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Company and shall deposit all monies and
other valuable effects in the name and to the credit of the Company in such
depositories as may be designated by the Management Directors. He
shall disburse the funds of the Company as may be ordered by the Management
Directors, taking proper vouchers for such disbursements, and shall render to
the President and the Management Directors, whenever they may require it, an
account of all his transactions as Treasurer and of the financial condition of
the Company.
Section
7.11 Assistant
Treasurers. The
Assistant Treasurers shall perform the duties as are given to them by this
Agreement or as may from time to time be assigned to them by the Management
Directors or by the Treasurer. At the request of the Treasurer, or in
his absence or disability, the Assistant Treasurer, designated by the Treasurer
(or in the absence of such designation, the senior Assistant Treasurer), shall
perform the duties and exercise the powers of the Treasurer.
Section
7.12 Treasurer’s
Bond. If
required by the Management Directors, the Treasurer and any Assistant Treasurer
shall give the Company a bond in such sum and with such surety or sureties as
shall be satisfactory to the Management Directors for the faithful performance
of the duties of his office and for the restoration to the Company, in case of
his death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the Company.
9
Section
7.13 Other
Officers. The
Management Directors may appoint by written consent such other officers and
agents as the Management Directors shall deem necessary who shall hold their
offices for such terms, have such authority and perform such duties as the
Management Directors may from time to time determine.
Section
7.14 Salaries. The
salary or other compensation of officers may be fixed from time to time by the
Management Directors.
ARTICLE
VIII
CAPITAL
ACCOUNT
Section
8.1 Capital
Account. A
capital account shall be maintained for the Member in accordance with § 704 (b)
of the Code and the Regulations thereunder.
ARTICLE
IX
DISTRIBUTIONS
Section
9.1 Distributions During Term of
Company. The
Management Directors in their sole discretion prior to dissolution of the
Company may, but shall not be obligated to, distribute such Property of the
Company, whether in cash or in kind, as the Management Directors may from time
to time deem advisable, after the Management Directors have established such
reserves as the Management Directors consider appropriate.
Section
9.2 Distributions Upon
Liquidation. On
the winding up of the Company pursuant to Section 11.2 hereof, all assets of the
Company shall be distributed in accordance with Section 11.3.
Section
9.3 Limitation on
Distributions. Notwithstanding
anything in this Agreement to the contrary, no distribution shall be made if it
would not be permitted by the Act.
ARTICLE
X
INDEMNIFICATION
Section
10.1 Definitions. In
this Article:
(a) “Indemnitee”
means (i) any present or former director or officer of the Company, and (ii) any
person who while serving in any of the capacities referred to in clause (i) of
this sentence served at the Company’s request as a director or officer of any
other entity.
(b) “Official
Capacity” means the elective or appointive office of the Company held by such
Person or the employment or agency relationship undertaken by such Person on
behalf of the Company, but in each case does not include service for any other
foreign or domestic limited liability company, corporation or any partnership,
joint venture, sole proprietorship, trust, employee benefit plan or other
enterprise.
10
(c) “Proceeding”
means any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative, arbitrative or investigative, any appeal in
such an action, suit or proceeding, and any inquiry or investigation that could
lead to such an action, suit or proceeding.
Section
10.2 Indemnification. The
Company shall indemnify every Indemnitee against all judgments, penalties
(including excise and similar taxes), fines, amounts paid in settlement and
reasonable expenses actually incurred by the Indemnitee in connection with any
Proceeding in which he was, or is threatened to be, named as a defendant or
respondent, or in which he was or is a witness without being named as a
defendant or respondent, by reason, in whole or in part, of his serving or
having served, or having been nominated or designated to serve, in any of the
capacities referred to in Section 10.1, if it is determined in accordance with
Section 10.4 that the Indemnitee (a) conducted himself in good faith, (b)
reasonably believed, in the case of conduct in his Official Capacity, that his
conduct was in the Company’s best interests and, in all other cases, that his
conduct was at least not opposed to the Company’s best interests, and (c) in the
case of any criminal proceeding, had no reasonable cause to believe that his
conduct was unlawful; provided, however, that in the event that an Indemnitee is
found liable to the Company or is found liable on the basis that personal
benefit was improperly received by the Indemnitee, the indemnification (i) is
limited to reasonable expenses actually incurred by the Indemnitee in connection
with the Proceeding and (ii) shall not be made in respect of any Proceeding in
which the Indemnitee shall have been found liable for willful or intentional
misconduct in the performance of his duty to the Company. Except as
provided in the proviso to the first sentence of this Section 10.2, no
indemnification shall be made under this Section 10.2 in respect of any
Proceeding in which such Indemnitee shall have been (x) found liable on the
basis that personal benefit was improperly received by him, whether or not the
benefit resulted from an action taken in the Indemnitee’s Official Capacity, or
(y) found liable to the Company. The termination of any Proceeding by
judgment, order, settlement or conviction, or on a plea of nolo contendere or its
equivalent, is not of itself determinative that the Indemnitee did not meet the
requirements set forth in clauses (a), (b) or (c) in the first sentence of this
Section 10.2. An Indemnitee shall be deemed to have been found liable
in respect of any claim, issue or matter only after the Indemnitee shall have
been so adjudged by a court of competent jurisdiction after exhaustion of all
appeals therefrom. Reasonable expenses shall include, but not be
limited to, all court costs and all fees and disbursements of attorneys for the
Indemnitee. The indemnification provided herein shall be applicable
whether or not negligence or gross negligence of the Indemnitee is alleged or
proven.
Section
10.3 Successful
Defense. Without
limiting the generality of Section 10.2 and in addition to the indemnification
provided for in Section 10.2, the Company shall indemnify every Indemnitee
against reasonable expenses incurred by such Indemnitee in connection with any
Proceeding in which he is a witness or a named defendant or respondent because
he served in any of the capacities referred to in Section 10.1, if such
Indemnitee has been wholly successful, on the merits or otherwise, in defense of
the Proceeding.
Section
10.4 Determinations. Any
indemnification under Section 10.2 (unless ordered by a court of competent
jurisdiction) shall be made by the Company only upon a determination that
indemnification of the Indemnitee is proper in the circumstances because he has
met the applicable standard of conduct. Such determination shall be
made by written consent of the Management Directors. Determination as
to reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible. In the event a
determination is made under this Section that the Indemnitee has met the
applicable standard of conduct as to some matters but not as to others, amounts
to be indemnified may be reasonably prorated.
11
Section
10.5 Advancement of
Expenses. Reasonable
expenses (including court costs and attorneys’ fees) incurred by an Indemnitee
who was or is threatened to be made a named defendant or respondent in a
Proceeding shall be paid by the Company at reasonable intervals in advance of
the final disposition of such Proceeding, and without making any of the
determinations specified in Section 10.4, after receipt by the Company of (a) a
written affirmation by such Indemnitee of his good faith belief that he has met
the standard of conduct necessary for indemnification by the Company under this
Article and (b) a written undertaking by or on behalf of such Indemnitee to
repay the amount paid or reimbursed by the Company if it shall ultimately be
determined that he is not entitled to be indemnified by the Company as
authorized in this Article. Such written undertaking shall be an unlimited
obligation of the Indemnitee but need not be secured, and it may be accepted
without reference to financial ability to make
repayment. Notwithstanding any other provision of this Article, the
Company may pay or reimburse expenses incurred by an Indemnitee in connection
with his appearance as a witness or other participation in a Proceeding at a
time when he has not been named as a defendant or respondent in the
Proceeding.
Section
10.6 Other Indemnification and
Insurance. The
indemnification provided by this Article shall (a) not be deemed exclusive of,
or to preclude, any other right to which those seeking indemnification may at
any time be entitled under the Certificate, any law, agreement or written
consent of the Management Directors, or otherwise, or under any policy or
policies of insurance purchased and maintained by the Company on behalf of any
Indemnitee, both as to action in an Official Capacity and as to action in any
other capacity, (b) continue as to a Person who has ceased to be in the capacity
by reason of which he was an Indemnitee with respect to matters arising during
the period he was in such capacity, (c) inure to the benefit of the heirs,
executors and administrators of such a Person, and (d) not be required if and to
the extent that the Person otherwise entitled to payment of such amounts
hereunder has actually received payment herefore under any insurance policy,
contract or otherwise.
Section
10.7 Construction. The
indemnification provided by this Article shall be subject to all valid and
applicable laws, and in the event this Article or any of the provisions hereof
or the indemnification contemplated hereby are found to be inconsistent with or
contrary to any such valid laws, the latter shall be deemed to control and this
Article shall be regarded as modified accordingly and, as so modified, to
continue in full force and effect.
Section
10.8 Continuing Offer, Reliance,
etc. The
provisions of this Article (a) are for the benefit of, and may be enforced by,
each Indemnitee of the Company, as if set forth in their entirety in a written
instrument duly executed and delivered by the Company and such Indemnitee and
(b) constitute a continuing offer to all present and future
Indemnitees.
12
Section
10.9 Effect of
Amendment. No
amendment, modification or repeal of this Article or any provision hereof shall
in any manner terminate, reduce or impair the right of any past, present or
future Indemnitees to be indemnified by the Company, nor the obligation of the
Company to indemnify any such Indemnitees, under and in accordance with the
provisions of the Article as in effect immediately prior to such amendment,
modification or repeal with respect to claims arising from or relating to
matters occurring, in whole or in part, prior to such amendment, modification or
repeal, regardless of when such claims may arise or be asserted.
ARTICLE
XI
DISSOLUTION
AND FINAL LIQUIDATION
Section
11.1 Dissolution. Notwithstanding
the retirement, resignation, expulsion, bankruptcy or dissolution of the Member,
or the occurrence of any other event that terminates the continued membership of
the Member in the Company, the term of the Company shall continue from the date
of its formation in perpetuity, unless earlier dissolved on the earliest to
occur of:
(a) An
election to dissolve the Company made by written consent of the Member;
or
(b) The
entry of a decree of judicial dissolution under the Act.
Section
11.2 Winding
Up. On
the dissolution of the Company, the Company’s affairs shall be wound up as soon
as reasonably practicable. The winding up shall be accomplished by
the Management Directors.
Section
11.3 Distribution of
Assets. On
the winding up of the Company, its assets shall be applied in the manner, and in
the order of priority, provided for in the Act.
Section
11.4 Revocation of Voluntary
Dissolution Proceedings. At
any time before the filing of a certificate of cancellation with the Secretary
of State, the Company may revoke voluntary dissolution proceedings by the
written consent of the Member.
ARTICLE
XII
AMENDMENT
Section
12.1 Amendment of
Agreement. This
Agreement may not be amended, supplemented or repealed except by the Member in
writing.
ARTICLE
XIII
GENERAL
PROVISIONS
Section
13.1 Liability to Third
Parties. Except
as otherwise expressly provided by the Act, the debts, obligations and
liabilities of the Company, whether arising in contract, tort or otherwise,
shall be the debts, obligations and liabilities solely of the Company, and
neither the Member or any Director shall be obligated personally for any such
debt, obligation or liability of the Company by reason of being the Member or a
Director of the Company.
13
Section
13.2 Waiver of
Notice.
(a) Whenever,
under applicable law, the Certificate or this Agreement, any notice is required
to be given to the Member or any Director, a waiver thereof in writing signed by
the Person or Persons entitled to such notice, whether before or after the time
stated therein, shall be equivalent to the giving of such notice.
Section
13.3 Seal. If
one be adopted, the Company seal shall have inscribed thereon the name of the
Company and shall be in such form as may be approved by the Management
Directors. Such seal may be used by causing it or a facsimile of it
to be impressed or affixed or in any manner reproduced.
Section
13.4 Fiscal
Year. The
fiscal year of the Company shall be the calendar year, or as the Member may
designate by resolution, subject to the provisions of Code § 706.
Section
13.5 Checks, Notes,
Etc. All
checks or demands for money and notes of the Company shall be signed by such
officer or officers or such other Person or Persons as the Management Directors
may from time to time designate by written consent. The Management
Directors may authorize by written consent any officer or officers or such other
Person or Persons to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Company, and such authority may
be general or confined to specific instances.
Section
13.6 Voting Upon Securities by
the Company. Unless
otherwise ordered by the Management Directors, the President, acting on behalf
of the Company, shall have full power and authority to attend and to act and to
vote at any meeting of security holders of any corporation, partnership, limited
liability company or other entity in which the Company may hold interests and,
at any such meeting, shall posses and may exercise any and all of the rights and
powers incident to the ownership of such interests which, as the owner thereof,
the Company might have possessed and exercised, if present. The
Management Directors by written consent from time to time may confer like powers
upon any other individual or individuals.
Section
13.7 Titles and
Captions. All
article or section titles or captions in this Agreement are for convenience
only. They shall not be deemed part of this Agreement and in no way
define, limit, extend or describe the scope or intent of any provisions
hereof.
Section
13.8 Pronouns and
Plurals. Whenever
the context may require, any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns, pronouns and verbs shall include the plural and vice versa.
Section
13.9 Subject to All
Laws. The
provisions of this Agreement shall be subject to all valid and applicable laws,
including but not limited to the Act as now or hereafter amended, and in the
event that any of the provisions of this Agreement are found to be inconsistent
with or contrary to any such valid laws, the latter shall be deemed to control
and this Agreement shall be deemed modified accordingly and, as so modified, to
continue in full force and effect.
Section
13.10 Allocation of Profits and
Losses; Tax Status. The
Company’s profits and losses shall be allocated to the Member. At all
times that the Company has only one member (who owns 100% of the membership
interests in the Company), it is the intention of the Member that the Company be
disregarded for federal income tax purposes. No Person shall take any
action that would be inconsistent with such treatment.
14
IN WITNESS WHEREOF, the Member
has executed this Agreement as of the day and year first above
written.
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Xxxxxxxxxx
Holdings, Inc.
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By:
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/s/ Xxxxxxxx Xxxxxx
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Xxxxxxxx
X. Xxxxxx
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President
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