FOURTH AMENDED AND RESTATED OPERATING AGREEMENT OF MACRO SECURITIES DEPOSITOR, LLC (a Delaware Limited Liability Company) by MACROMARKETS LLC, as the sole Member dated as of August 27th, 2007
EXHIBIT
3.2
FOURTH
AMENDED AND RESTATED
OF
MACRO
SECURITIES DEPOSITOR, LLC
(a
Delaware Limited Liability Company)
by
MACROMARKETS
LLC,
as
the
sole Member
dated
as
of August 27th, 2007
TABLE
OF CONTENTS
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Page
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ARTICLE
I
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DEFINITIONS
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Section
1.1
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Definitions
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2
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ARTICLE
II
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ORGANIZATIONAL
MATTERS
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Section
2.1
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Formation
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5
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Section
2.2
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Name
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6
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Section
2.3
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Principal
Place of Business
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6
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Section
2.4
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Registered
Office in Delaware
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6
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Section
2.5
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Registered
Agent
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6
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Section
2.6
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Purposes
and Powers
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6
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Section
2.7
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Filings
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8
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Section
2.8
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Conduct
of Business
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8
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Section
2.9
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Tax
Reporting and Characterization
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10
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Section
2.10
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Term
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10
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ARTICLE
III
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THE
MEMBERS
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Section
3.1
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The
Members
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10
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Section
3.2
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Powers
of Members
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10
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Section
3.3
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Limited
Liability of the Members
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10
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i
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ARTICLE
IV
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MANAGEMENT
OF THE COMPANY;
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THE
BOARD OF MANAGERS; OFFICERS
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Section
4.1
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General
Management of the Company
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10
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Section
4.2
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Appointment
and Term
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11
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Section
4.3
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Number
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11
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Section
4.4
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Procedure
for Action by the Board
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11
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(a)
Voting
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11
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(b)
Actions Requiring Unanimous Consent
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11
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(c)
Place of Meetings
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11
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(d)
Annual Meetings
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12
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(e)
Special Meetings
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12
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(f)
Quorum
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12
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(g)
Participation in Meetings by Conference Telephone
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12
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(h)
Waiver of Notice
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12
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(i)
Adjournment
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12
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(j)
Action Without Meeting
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12
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Section
4.5
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Power
to Bind Company
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12
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Section
4.6
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Restrictions
on the Power of the Managers
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12
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Section
4.7
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Obligations
of the Managers
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13
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Section
4.8
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Liability
of Managers
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14
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Section
4.9
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Resignation
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14
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Section
4.10
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Removal
of Managers
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14
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Section
4.11
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Filling
of Vacancies
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14
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Section
4.12
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Managers'
Compensation
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14
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ii
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Section
4.13
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Officers
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14
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(a)
Appointment of Officers
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14
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(b)
Powers
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14
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(c)
Removal and Filling of Vacancy of Officers
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15
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(d)
Liability of Officers
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15
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Section
4.14
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Tax
Matters Partner
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15
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Section
4.15
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Duty
of Care of Managers and Officers
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15
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Section
4.16
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Appointment
of Committees
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15
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ARTICLE
V
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CAPITAL
STRUCTURE AND CONTRIBUTIONS
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Section
5.1
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Capital
Structure
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16
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Section
5.2
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Capital
Contributions
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16
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Section
5.3
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Capital
Accounts
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16
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Section
5.4
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Additional
Financing
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16
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ARTICLE
VI
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PROFITS
AND LOSSES; DISTRIBUTIONS
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Section
6.1
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Basic
Allocations
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16
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Section
6.2
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Regulatory
Allocations
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17
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Section
6.3
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Allocations
Upon Transfer or Admission
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17
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Section
6.4
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Distributions
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17
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ARTICLE
VII
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ACCOUNTING
AND RECORDS
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Section
7.1
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Books
and Records
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18
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Section
7.2
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Delivery
to Member and Inspection
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18
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Section
7.3
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Bank
Accounts
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18
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iii
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ARTICLE
VIII
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EXCULPATION;
LIABILITIES: INDEMNIFICATION
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Section
8.1
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Exculpation
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18
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Section
8.2
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Liabilities:
Indemnification
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19
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Section
8.3
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Amendments:
Indemnification
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20
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Section
8.4
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Insurance
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20
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ARTICLE
IX
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DISSOLUTION
AND WINDING UP
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Section
9.1
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Dissolution
of the Company
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20
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Section
9.2
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Certificate
of Cancellation
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21
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Section
9.3
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Winding
Up
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21
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Section
9.4
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Order
of Payment of Liabilities Upon Dissolution
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21
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ARTICLE
X
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MISCELLANEOUS
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Section
10.1
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Amendments
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22
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Section
10.2
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Assignments;
Additional Members
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22
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Section
10.3
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Severability
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23
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Section
10.4
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Successors
and Assigns
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23
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Section
10.5
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Limited
Liability Company
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23
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Section
10.6
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Benefits
of Agreement; No Third Party Rights
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23
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Section
10.7
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Headings
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23
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Section
10.8
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Governing
Law
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23
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Section
10.9
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Counterparts
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23
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iv
THIRD
AMENDED AND RESTATED
OF
MACRO
Securities Depositor, LLC
(A
Delaware Limited Liability Company)
This
Fourth Amended and Restated Operating Agreement, (as further amended,
supplemented or otherwise modified and in effect from time to time, the
"Agreement")
of
MACRO Securities Depositor, LLC, a Delaware limited liability company
(the
"Company"),
is
made as of this 27th day of August 2007 by MacroMarkets LLC, a Delaware
limited liability company ("MM"),
as the
sole member of the Company (a "Member"
and,
together with any other entity that may from time to time become a member
of the
Company, the
"Members").
RECITALS
WHEREAS,
MM formed the Company as a limited liability company under the laws of Delaware
pursuant to the provisions of the Delaware Limited Liability Company Act,
6 Del.
C. ' 18-101,
et seq.
(as
amended and in effect from time to time, and any successor statute, the
"Act");
and
WHEREAS,
a Certificate of Formation (as such certificate may be amended from time
to
time, the "Certificate
of Formation")
was
filed with the Secretary of State of the State of Delaware; and
WHEREAS,
MM provided for the management of the business and affairs of the Company
by
executing an operating agreement governing the conduct of such management
and
affairs on April 28, 2004 (the "Original
Operating Agreement");
and
WHEREAS,
MM amended and restated the Original Operating Agreement on April 7, 2006
(the
"Amended
and Restated Operating Agreement");
and
WHEREAS,
pursuant to Section 5 of that certain agreement between Claymore Group Inc.
("Claymore")
and MM
dated as of June 28, 2006 (the "Distribution
Agreement"),
Claymore purchased 50% of the equity of the Company and thereby became a
member
of the Company; and
WHEREAS,
pursuant to Section 5 of the Distribution Agreement, MM agreed to cause the
Company's Operating Agreement to be amended to provide that MM and Claymore
have
equal management and membership rights in the Company; and
WHEREAS,
pursuant to that certain agreement between Claymore and MM, dated as of August
13, 2007 (the "Termination
Agreement"),
Claymore sold the equity it holds in the Company to MM and, concurrently
therewith, Claymore resigned as a member of the Company and the officers
of
Claymore who had served on the Company's Board of Managers also resigned
from
such functions; and
WHEREAS,
the Member desire to further amend and restate the Amended and
Restated
1
Operating
Agreement in accordance with the Termination Agreement.
NOW,
THEREFORE, the Member by this Agreement amend and restate in whole the operating
agreement for the Company under the laws of the State of Delaware upon the
terms
and subject to the conditions of this Agreement.
ARTICLE
I
DEFINITIONS
Section
1.1 Definitions.
Whenever used in this Agreement, capitalized terms will have the meanings
assigned to them herein. All references herein to "this
Agreement"
are to
this Operating Agreement as amended, supplemented or otherwise modified and
in
effect from time to time, and all references herein to Articles, Sections
and
subsections are to Articles, Sections and subsections of this Agreement unless
otherwise specified.
"Act"
has the
meaning set forth in the recitals.
“Adjusted
Capital Account”
means,
for each Member, such Member’s Capital Account balance increased by such
Member’s share of “minimum gain” and of “partner nonrecourse debt minimum gain”
(as determined pursuant to Treasury Regulation Sections 1.704-2(g) and
1.704-2(i)(5), respectively).
"Affiliate"
means,
in respect of any specified Person, any other Person that directly or indirectly
controls, is controlled by or is under direct or indirect common control
with
the specified Person. For purposes of this Agreement, "control"
(including, with correlative meanings, the terms "controlled
by"
and
"under
common control with"),
as
used with respect to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies
of
such Person, whether through the ownership of voting securities, by agreement
or
other-wise.
"Agreement"
has the
meaning set forth in the preamble hereto.
"Board
of Managers" has
the
meaning set forth in Section 4.1.
"Capital
Account"
means a
separate account maintained for each Member and adjusted in accordance with
Treasury Regulations under Section 704 of the Code. To the extent consistent
with such Treasury Regulations, the adjustments to such accounts shall include
the following:
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(i)
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There
shall be credited to each Member's Capital Account the amount of
any cash
(which shall not include imputed or actual interest on any deferred
contributions) actually contributed by such Member to the capital
of the
Company, the fair market value (without regard to Code Section
7701(g)) of
any property contributed by such Member to the capital of the Company,
the
amount of liabilities of the Company assumed by the Member or to
which
property distributed to the Member was subject and such Member's
share of
the Net Profits of the Company and of any items in the nature of
income or
gain separately allocated to the Members; and there shall be charged
against each Member's Capital Account the amount of all cash distributions
to such Member, the fair market value (without regard to Code Section
7701(g)) of any property distributed to such Member by the Company,
the
amount of liabilities of the Member assumed by the Company or to
which
property contributed by the Member to the Company was subject and
such
Member's share of the Net Losses
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2
of
the
Company and of any items in the nature of losses or deductions separately
allocated to the Members.
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(ii)
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If
the Company at any time distributes any of its assets in-kind to
any
Member, the Capital Account of each Member shall be adjusted to
account
for that Member's allocable share of the Net Profits, Net Losses
or items
thereof that would be realized by the Company if it sold the assets
that
were distributed at their respective fair market values (taking
Code
Section 7701(g) into account) immediately prior to their
distribution.
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(iii)
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If
elected by the Company, at any time specified in Treasury Regulation
Section 1.704-1(b)(2)(iv)(f),
the Capital Account balance of each Member shall be adjusted to
the extent
provided under such Treasury Regulation to reflect the Member's
allocable
share (as determined under Article V) of the items of Net Profits
or Net
Losses that would be realized by the Company if it sold all of
its
property at its fair market value (taking Code Section 7701(g)
into
account) on the day of the
adjustment.
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(iv)
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In
the event any interest in the Company is transferred in accordance
with
the terms of this Agreement, the transferee shall succeed to the
Capital
Account of the transferor to the extent it relates to the transferred
interest.
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"Capital
Contribution"
means
the total value of cash and the agreed fair market value of other property
(net
of liabilities secured by such contributed property that the Company is
considered to assume or take subject to pursuant to Code Section 752)
contributed by the Member to the Company pursuant to this
Agreement.
"Carrying
Value"
means,
with respect to any asset, the asset's adjusted basis for federal income
tax
purposes; provided, however, that (i) the initial Carrying Value of any asset
contributed to the Company shall be adjusted to equal its gross fair market
value at the time of its contribution and (ii) the Carrying Values of all
assets
held by the Company shall be adjusted to equal their respective gross fair
market values (taking Code Section 7701(g) into account) upon an adjustment
to
the Capital Accounts of the Members described in paragraph (iii) of the
definition of "Capital
Account."
The
Carrying Value of any asset whose Carrying Value was adjusted pursuant to
the
preceding sentence thereafter shall be adjusted in accordance with the
provisions of Treasury Regulation Section 1.704-1(b)(2)(iv)(g).
"Certificate
of Formation"
has the
meaning set forth in the recitals.
"Certificates"
has the
meaning set forth in Section 2.6(a)(v).
"Claymore"
has
the
meaning set forth in the preamble hereto.
"Code"
means
the Internal Revenue Code of 1986, as amended (or any successor
law).
"Company"
has the
meaning set forth in the preamble hereto.
"control"
has the
meaning set forth in the definition of the term "Affiliate"
above.
"Damages"
has the
meaning set forth in Section 8.2(a).
3
"DRE"
has the
meaning set forth in Section 2.9.
"Eligible
Investment" has
the
meaning set forth in Section 2.6(a)(ii).
"Fiscal
Year"
means
the Company's fiscal year, which shall be the calendar year, or such other
period designated by the Member as may be required or allowed by the Code,
except that the initial fiscal year will commence on the filing of the
Certificate of Formation in the office of the Secretary of State of the State
of
Delaware and will end as required pursuant to the Code.
"General
Assets"
has the
meaning set forth in Section 2.8(a)(i).
"Indemnified
Party"
has the
meaning set forth in Section 8.2(a).
"Manager"
or
"manager"
has the
meaning set forth in Section 4.2.
"Member"
has the
meaning set forth in the preamble hereto.
"MM"
has
the
meaning set forth in the preamble hereto.
"Net
Profits"
and
"Net
Losses"
mean the
taxable income or loss, as the case may be, for a period as determined in
accordance with Code Section 703(a) computed with the following
adjustments:
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(i)
|
Items
of gain, loss, and deduction shall be computed based upon the Carrying
Values of the Company 's assets (in accordance with Treasury Regulation
Sections 1.704(b)(2)(iv)(g) and/or 1.704-3(d)) rather than upon
the
assets' adjusted bases for federal income tax
purposes;
|
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(ii)
|
Any
tax-exempt income received by the Company shall be included as
an item of
gross income;
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(iii)
|
The
amount of any adjustments to the Carrying Values of any assets
of the
Company pursuant to Code Section 743 shall not be taken into
account;
|
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(iv)
|
Any
expenditure of the Company described in Code Section 705(a)(2)(B)
(including any expenditures treated as being described in Section
705(a)(2)(B) pursuant to Treasury Regulations under Code Section
704(b))
shall be treated as a deductible
expense;
|
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(v)
|
The
amount of items of income, gain, loss or deduction specially allocated
to
any Members pursuant to Section 5.4 shall not be included in the
computation; and
|
| (vi) |
The
amount of any items of Net Profits or Net Losses deemed realized
pursuant
to
paragraphs (ii) and (iii) of the definition of "Capital
Account"
shall be included in
the computation.
|
"Notes"
has the
meaning set forth in Section 2.6(a)(v).
"Percentage
Interest" means,
with respect to any Member, a fraction, expressed as a percentage, equal
to such
Member's (or its predecessor's) equity ownership interest in the
Company.
4
"Person"
means a
legal person, including any individual, corporation, estate, partnership
(limited or general), joint venture, association, joint stock company, limited
liability company, limited liability partnership, trust, unincorporated
organiza-tion or government or any agency or political subdivision thereof,
or
any other entity of whatever nature.
"Secretary
of State"
means
the Secretary of State of the State of Delaware.
"Security"
has the
meaning set forth in Section 2.6(a)(v).
"Securitization
Documents"
have
the meaning set forth in Section 2.6(a)(v).
"Securitization
Trusts"
have
the meaning set forth in Section 2.6(a)(v).
"Service
Provider Contracts"
have
the meaning set forth in Section 2.6(a)(vii).
“Target
Balance”
means,
for each Member at any point in time, either (i) a positive amount equal
to the
net amount, if any, the Member would be entitled to receive or (ii) a negative
amount equal to the net amount the Member would be required to pay or contribute
to the Company or to any third party, assuming, in each case, that (A) the
Company sold all of its assets for an aggregate sale price equal to their
aggregate Carrying Value (assuming for this purpose only that the Carrying
Value
of any asset that secures a liability that is treated as “nonrecourse” for
purposes of Treasury Regulation Section 1.1001-2 is no less than the amount
of
such liability that is allocated to such asset in accordance with Treasury
Regulation Section 1.704-2(d)(2)); (B) all liabilities of the Company were
paid
in accordance with their terms from the amounts specified in clause (A) of
this
sentence; (C) any Member that was obligated to contribute any amount to the
Company pursuant to this Agreement or otherwise (including the amount a Member
would be obligated to pay to any third party pursuant to the terms of any
liability or pursuant to any guaranty, indemnity or similar ancillary agreement
or arrangement entered into in connection with any liability of the Company)
contributed such amount to the Company; (D) all liabilities of the Company
that
were not completely repaid pursuant to clause (B) of this sentence were paid
in
accordance with their terms from the amounts specified in clause (C) of this
sentence; and (E) the balance, if any, of any amounts held by the Company
were
distributed in accordance with Section 6.2(a) hereof.
"Tax
Matters Partner"
shall
have the meaning provided in Section 4.14.
"Transfer
Agreements"
has the
meaning set forth in Section 2.6(a)(iv).
"Securitization
Trusts"
has the
meaning set forth in Section 2.6(a)(iv).
ARTICLE
II
ORGANIZATIONAL
MATTERS
Section
2.1 Formation.
Xxxx
Xxxxxxx has caused the Certificate of Formation attached hereto as Exhibit
A
to be
executed, delivered and filed with the Secretary of State of the State of
Delaware. Xxxx Xxxxxxx is hereby designated as an "authorized person" within
the
meaning of the Act and such filing is hereby approved and ratified in all
respects. Upon the filing of the Certificate of Formation with the Secretary
of
State of the State of Delaware, each Member, each Manager and each officer
of
the Company identified herein at the time of such formation or at any time
thereafter in accordance with this Agreement, will be designated as an
"authorized person" and each will continue as a designated "authorized person"
with the meaning of the Act. Any Member, any Manager or any officer of the
Company, as an authorized person within the meaning of the Act, may execute,
deliver and file, or
5
cause
the
execution, delivery and filing of, all certificates (and any amendments and/or
restatements thereof) required or permitted by the Act to be filed with the
Secretary of State of the State of Delaware. Any Member, any Manager or any
officer of the Company may execute, deliver and file any other certificates
(and
any amendments and/or restate-ments thereof) necessary for the Company to
qualify to do business in any jurisdiction in which the Company may wish
to
conduct business. The rights and liabilities of the Members shall be determined
pursuant to the Act and this Agreement. To the extent that the rights or
obligations of any Member is different by reason of any provision of this
Agreement than they would be in the absence of such provision, this Agreement
shall, to the fullest extent permitted by the Act, control.
Section
2.2 Name.
The
name of the limited liability company will be "MACRO Securities Depositor,
LLC."
The business of the Company will be carried on in such name with variations
and
changes as the Board of Managers will determine or deem necessary to comply
with
requirements of the jurisdictions in which the Company's operations are
conducted.
Section
2.3 Principal
Place of Business.
The
principal place of business of the Company, and the place where its books
and
records will be kept, will be 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx Xxx
Xxxx
00000, or such other place or places as the Board of Managers may from time
to
time designate.
Section
2.4 Registered
Office in Delaware.
The
registered office of the Company in the State of Delaware is located at 0000
Xxxxxx Xxxxxx, xx xxx Xxxx xx Xxxxxxxxxx, Xxxxxx of New Castle.
Section
2.5 Registered
Agent
.
The
name and address of the regis-tered agent of the Company for service of process
on the Company in the State of Delaware is The Corporation Trust Company,
0000
Xxxxxx Xxxxxx, xx xxx Xxxx xx Xxxxxxxxxx, Xxxxxx of New Castle.
Section
2.6 Purposes
and Powers.
(a)
The
purposes of the Company are:
(i) to
create, acquire, develop, refine, finance, market, promote, license, sell,
act
as
issuer for, or provide services or products relating to, the synthetic
securitization of macro-economic interests;
(ii) to
acquire from time to time all right, title and interest in and to securities
and
other investment instruments (the "Eligible
Investments")
including but not limited to obligations of the United States and United
States
government agencies, certificates of deposit, corporate or other debt
obligations, commercial paper, time deposits, bankers acceptances, repurchase
agreements and guaranteed investment contracts;
(iii) to
acquire, own, hold, service, sell, assign, pledge and otherwise deal with
the
Eligible Investments and any proceeds or rights associated with the Eligible
Investments;
(iv) to
authorize, issue, acquire, purchase, sell and deliver one or more series
or
classes of bonds, notes or other evidences of indebtedness (the "Notes")
or
certificates (the "Certificates")
or
other securities (collectively, the
"Securities")
secured
or collateralized by, or representing an interest in, one or more pools of
Eligible Investments, provided
that
holders of
6
such
Securities will have no recourse to the Company for any obligations other
than
the Eligible Investments that secure, collateralize, or have interests
represented by, such Securities;
(v) to
form
trusts which will issue the Securities (the "Securitization
Trusts")
and to
act as depositor therefor and enter into, and assume and perform specified
obligations under, trust agreements, indentures, pooling agreements and other
contracts which will govern the activities of the Securitization Trusts (the
"Securitization
Documents");
(vi) to
transfer Eligible Investments or interests therein to the Securitization
Trusts
pursuant to one or more transfer agreements, sale agree-ments, trust agreements,
pooling agreements or other agreements (the "Transfer
Agreements")
to be
entered into by and among, among others, the Company, the Persons named therein
and any entity acting as trustee of the Eligible Investments;
(vii) to
enter
into, and assume specified rights and obligations under, agreements among
the
Securitization Trusts and various licensors, trustees and third-party service
providers (the "Service
Provider Contracts");
(viii) to
file
registration statements with the Securities and Exchange Commission for the
Securities issued by the Securitization Trusts, to act as the issuer with
respect to such public issuances, and to act as the issuer in transactions
exempt from registration under the Securities Act of 1933;
(ix) to
enter
into hedging agreements to reduce the interest rate risk of funding Eligible
Investments and other financial assets of the Company and of trusts which
purchase or fund Eligible Investments; and
(x) to
engage
in any or all lawful activities for which limited liability companies may
be
organized under the Act and which the Board of Managers may deem to be in
the
best interests of the Company, and to do all other things deemed by the Board
of
Managers to be necessary or desirable in connection with any of the Company's
businesses.
(b) The
Company shall have all powers available under the Act which are necessary
or
desirable to accomplish the aforesaid purposes.
(c) The
Company, by or through any Manager or any officer of the Company on behalf
of
the Company, may enter into and perform the
Securitization Documents, the Transfer Agreements, the Service Provider
Contracts and all documents, agreements, certificates, or financing statements
contemplated thereby or related thereto, all without any further act, vote
or
approval of any other Person notwithstanding any other provision of this
Agreement, the Act or applicable law, rule or regulation. The foregoing
authorization will not be deemed a restriction on the powers of any Manager
or
any officer of the Company to enter into other agreements on behalf of the
Company.
7
Section
2.7 Filings.
The
Members shall execute such instruments, certificates, notices and documents,
and
shall do or cause to be done all such filings, recordings, publications and
other acts, as may be necessary or appropriate from time to time to comply
with
all applicable requirements for the formation and operation and, when
appropriate, termination of a limited liability company in the State of
Delaware.
Section
2.8 Conduct
of Business. (a)
Notwithstanding any other provision of this Agreement and any provision of
law
that otherwise so empowers the Company, the Company will not do any of the
following:
(i) create,
incur or assume any indebtedness or issue any security or sell or transfer
any
assets (including the Eligible Investments) or any interests in such assets
to a
Securitization
Trust or other Person which issues a security in respect of any such assets
unless any such indebtedness or security (A) has no recourse to any assets
of
the Company other than the assets to which such indebtedness or security
relates, and (B) does not constitute a claim against the Company if cash
flow
from the assets securing or collateralizing such indebtedness or security
is
insufficient to repay the debt, and in the event such indebtedness or security
is deemed to constitute a claim against the other assets securing or
collateralizing any other indebtedness or security of the Company, or against
any assets which have been pledged, assigned, conveyed or purported to be
conveyed to another Person, such claim will be subordinate to the claims
of such
other indebtedness or security to which those assets relates or of such other
Person; or
(ii) create,
incur or assume any indebtedness or issue any security, or sell or transfer
any
assets (including the Eligible Investments) or any interests in such assets
to a
Securitization Trust or other Person which issues a security in respect of
any
such assets unless the debt holders or transferees (A) agree or are deemed
to
have agreed that the debt, liabilities and obligations incurred, contracted
for
or otherwise existing with respect to such indebtedness or transfer will
be
enforceable against the assets securing or collateralizing such indebtedness
or
security and not against the assets of the Company securing or collateralizing
any other indebtedness or security of the Company, and (B) agree or are deemed
to have agreed that to the extent such debt holders or transferees are deemed
to
have any interest in any assets collateralizing or securing any other
indebtedness or security of the Company, their interest in those assets will
be
subordinate to claims or rights of such other debt holders and transferees
to
those assets and, further, that such agreement will constitute a subordination
agreement for purposes of Section 510(a) of the Bankruptcy Code.
(b) The
Company will at all times:
(i) maintain
its existence as a limited liability company and remain in good standing
under
the laws of the State of Delaware;
(ii) observe
all limited liability company procedures required by this Agreement and such
others, if any, as may be from time to time required by the
Act;
8
(iii) ensure
that (x) the business and affairs of the Company are at all times managed
by or
under the direction of the Board of Managers, (y) the Board of Managers will
have duly authorized all actions requiring such authorization and, (z) when
required by law or by this Agreement, the Com-pany will have obtained the
proper
authorization for action from its Members;
(iv) maintain
the Company's books, financial statements, accounting records and other limited
liability company documents and records separate from those of the Members,
any
Affiliate thereof or any other entity;
(v) not
commingle the Company assets with those of the Members or any Affiliate thereof
and not hold itself out as being liable for the debts of another;
(vi) maintain
its bank accounts, books of account and payroll (if any) separate from those
of
its Affiliates, the Members or any of the Members' Affiliates or any other
Person or entity; and ensure that its funds and other assets will at all
times
be readily distinguishable from the funds and other assets of its Affiliates,
the Members and any of the Members' Affiliates or any other Person or
entity;
(vii) act
solely in its own name and through its own managers and agents so as not
to
mislead others as to its identity or the identity of any Affiliate and correct
any known misunderstanding regarding its separate identity, and conduct all
oral
and written communications of the Company, including without limitation letters,
invoices, contracts, statements and applica-tions solely in the name of the
Company;
(viii) separately
manage its liabilities from those of the Members or any of their Affiliates
and
pay its own liabilities, including all administrative expenses, from its
own
separate assets, provided that any Members or any Affiliate thereof may pay
certain of the organizational costs of the Company, and the Company will
reimburse the Members or any such Affiliate for its allocable portion of
shared
expenses paid by the Members or such Affiliate, and provided,
further,
that
any Members may pay fees and expenses and indemnify parties pursuant to Section
2.8(d);
(ix) at
all
times maintain an arm's length relationship with any Affiliates;
(x) have
a
sufficient number of Managers and any other authorized agents to manage its
operations; and
(xi) maintain
adequate capital in light of its contemplated business operations.
(c) The
Company will not assume the liabilities of any Member or any Affiliate thereof,
and will not guarantee the liabilities of any Member or any Affiliate thereof,
provided
however,
that
this
Section
2.8(c)
will not
prevent Section
8.2
herein
to apply.
9
(d) Notwithstanding
any provision in this Agreement to the contrary, any Member, in its own
capacity, or any Affiliate of a Member, (i) may pay fees and expenses of
and
indemnify trustees relating to the Trusts and (ii) may indemnify any
underwriter, placement agent, initial purchaser for resale or other Person
performing similar functions in connection with the issuance of any
Securities.
Section
2.9 Tax
Reporting and Characterization.
It is
the Mem-ber's express intention that for purposes of federal, state and local
income tax laws the Company be treated as an entity disregarded as separate
from
the Member (a "DRE")
so
long as there is only one Member for U.S. federal income tax purposes and
for
any period when there are two or more Members to be treated as a partnership,
and the Tax Matters Partner is expressly authorized to make any election
it
deems necessary or appropriate to effect or maintain such treatment.
Section
2.10 Term.
Unless
terminated in accordance with this Agreement and the Act, the Company will
have
perpetual existence. The existence of the Company as a separate legal entity
will continue until cancellation of the Certificate of Formation as provided
in
the Act.
ARTICLE
III
THE
MEMBERS
Section
3.1 The
Members
.
The
names and addresses of the Members and their initial Percentage Interests
are as
follows:
Member Percentage
Interest
MacroMarkets
LLC
100%
Section
3.2 Powers
of
Members.
The
Members (acting in their capacity as such) will have the authority to take
all
actions specifically enumerated in the Certificate of Formation or this
Agreement.
Section
3.3 Limited
Liability of the Members.
Except
as required under the Act or as expressly set forth in this Agreement, all
debts, obligations and liabilities of the Company, whether arising in contract,
tort or otherwise, will be solely the debts, obligations and liabilities
of the
Company, and no Member will be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being a member
of the
Company.
ARTICLE
IV
MANAGEMENT
OF THE COMPANY;
THE
BOARD OF MANAGERS; OFFICERS
Section
4.1 General
Management of the Company.
Subject
to such matters which are expressly reserved hereunder or under the Act to
the
Members for decision, the business, properties and affairs of the Company
will
be managed by a board of managers (the "Board
of Managers")
which,
without limiting the generality of the foregoing, will have the power to
appoint
officers of the Company, to appoint and direct agents, to grant general or
limited authority to officers, employees and agents of the Company, and to
make,
execute and deliver contracts and other instru-ments and documents in the
name
and on behalf of the Company.
10
Section
4.2 Appointment
and Term.
The
Members will be entitled to appoint from time to time persons to serve as
the
managers (each, a "Manager")
on the
Board of Managers. Managers will serve until their respective successors
are
appointed by the Members, as provided under Section 4.11 herein, or until
their
earlier death, disability, resignation, retirement or removal, pursuant to
Section 4.10 herein. Each Manager is hereby designated as a "manager" of
the
Company within the meaning of Section 18-101(10) of the Act.
Section
4.3 Number.
The
Board of Managers will consist of three individuals designated by the Members,
or their assigns pursuant to Section 10.2 herein. As of the date hereof,
the
Managers will be:
Xxxxxx
Xxxxxxx, III
Xxxxxx
Xxxx
Xxxx
Xxxxxxxx
Section
4.4 Procedure
for Action by the Board
(a) Voting.
Any
action permitted or required to be taken by the Board of Managers may be
taken
by a simple majority of the members of the Board of Managers except for actions
that require unanimous consent of the members of the Board of Directors pursuant
to Section 4.4(b); provided,
however,
that
the Board of Managers may delegate the day-to-day management of the Company
to
an individual or entity which may or may not be a Manager. Each Manager has
the
right to one vote. Each Manager not only has the right to his own vote, but
may
vote by proxy for one other Manager.
(b) Actions
Requiring Unanimous Consent.
Notwithstanding any other provision of this Agreement and any provision of
law
that otherwise so empowers the Company, the Members, the Board of Managers
or
any Person on behalf of the Company, neither the Company, the Members, the
Board
of Managers nor any other Person on behalf of the Company will, without the
written consent of 100% of the Members, do any of the following:
(i) dissolve
or liquidate, in whole or in part, consolidate or merge with or into any
other
entity or convey or transfer the Company's properties and assets substantially
as an entirety to any entity; or
(ii) institute
proceedings to be adjudicated bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the Company or
file
a petition seeking, or consent to, reorganization or relief under any applicable
federal or state law relating to bankruptcy, or consent to the appointment
of a
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or a substantial part of the Company's property, or make any
assignment for the benefit of creditors, or admit in writing the Company's
inability to pay the Company's debts generally as they become due, or take
corporate action in furtherance of any such action.
(c) Place
of Meetings.
Regular
or special meetings of the Board of Managers shall be held at any place within
or without the State of New York, New Jersey or Illinois, which has been
designated in the notice of the meeting, or, if not stated therein, as
designated by resolution of the Board. In the absence of such designation,
meetings shall be held at a principal executive office of the
Company.
11
(d) Annual
Meetings.
Not
less than once each fiscal year on the dates and at the times published by
the
Board of Managers at the beginning of each fiscal year, the Board of Managers
shall hold a regular meeting at the principal executive office of the company,
or at any other place that has been designated by the Board of Managers,
for the
purpose of organization, and the transaction of other business. Notice of
these
meetings shall not be required unless the date, time or place of the meeting
is
changed.
(e) Special
Meetings.
Special
meetings of the Board of Managers for any purpose or purposes may be called
at
any time by the elected president of the Company, the designated secretary
of
the Company or by any two Managers upon twenty-four hours written or personal
notice (confirmed by telecopy). Unless given personally, any such notice
shall
be addressed or delivered to each Manager at such Manager's address as it
is
shown upon the records of the Company or as may have been given to the Company
by the Manager for the purposes of notice.
(f) Quorum.
All of
the Managers constitutes a quorum of the Board of Managers for the transaction
of business, except to adjourn as hereinafter provided. Every act or decision
made by a greater than two-thirds majority of the Managers present at a meeting
duly held at which a quorum is present shall be regarded as the act of the
Board
of Managers, unless a greater number is required by law, by contract or
hereunder. A meeting at which a quorum is initially present may continue
to
transact business notwithstanding the withdrawal of Managers, if any action
taken is approved by at least a majority of the required quorum for such
meeting.
(g) Participation
in Meetings by Conference Telephone.
Managers may participate in a meeting through the use of conference telephone
or
similar communications equipment, so long as all Managers participating in
such
meeting can hear one another. Such participation shall constitute presence
in
person at such meeting.
(h) Waiver
of Notice.
Notice
of a meeting need not be given to any Manager who signs a waiver of notice
of a
consent to holding the meeting or an approval of the minutes thereof, whether
before or after the meeting, or who attends the meeting without protesting,
prior thereto or at its commencement, the lack of notice to such Manager.
All
such waivers, consents or approvals shall be filed with the Company=s
records
or made a part of the minutes of the meeting.
(i) Adjournment.
A
majority of the Managers present, whether or not a quorum is present, may
adjourn any Board of Managers meeting to another time and place. If a meeting
is
adjourned, notice of any adjournment to another time or place shall be given
prior to the time of the adjourned meeting to the Managers that were not
present
at the time of adjournment.
(j) Action
Without Meeting.
Any
action required or permitted to be taken by the Board of Managers may be
taken
without a meeting and without prior notice if such number of Managers sufficient
to approve such action pursuant to the Act or the terms of this agreement
consent thereto in writing. Such written consent or consents shall be filed
with
the minutes of the proceedings of the Board of Managers.
Section
4.5 Power
to Bind Company.
Notwithstanding the last sentence of Section 18-402 of the Act, except as
otherwise specifically provided herein, only the Managers and authorized
officers of the Company (acting in their capacity as such) will have authority
to bind the Com-pany to any third party with respect to any matter.
Section
4.6 Restrictions
on the Power of the Managers.
The
Board of Managers will not have the authority to:
12
(a) cause
the
Company to do any acts in violation of or in breach of any agreement entered
into by the Company to the extent such acts are not expressly permitted by
this
Agreement;
(b) take
any
action in contravention of the Act, the Certificate of Formation or this
Agreement (each as may be amended, supplemented or otherwise modified and
in
effect from time to time);
(c) to
the
fullest extent permitted by law, take any action that would make it impossible
to carry on the ordinary business of the Company;
(d) admit
any
Person as a member of the Company;
(e) knowingly
perform any act that would subject any Member to loss of limited liability
in
any jurisdiction; or
(f) take
any
action to amend or modify the Certificate of Formation or this
Agreement.
Section
4.7 Obligations
of the Managers.
(a)
Subject
to Section 4.4(b), as long as any Securities are outstanding and until all
obligations of the Company pursuant to the Securitization Documents, the
Transfer Agreements and the Service Provider Contracts have been satisfied,
the
Board of Managers will take all action that may be necessary or appropriate
for
the continuation of the Company's valid existence as a limited liability
company
under the laws of the State of Delaware (and each other jurisdiction in which
such existence is necessary to protect the limited liability of the Members
or
to enable the Company to conduct the business in which it is
engaged).
(b) Each
Manager will devote to the Company such time as he or she deems necessary
to
conduct the Company's business and affairs in an appropriate
manner.
(c) The
Board
of Managers will use their reasonable best efforts, in the conduct of the
Company's activities and business, to put all Persons with whom the Company
deals on notice that the Member is not liable for the Company's obligations
and
all agreements to which the Company is a party will include a statement to
the
effect that the Company is a limited liability company formed under the Act;
provided,
however,
the
failure to include such a statement in an agreement to which the Company
is a
party will not affect the Company's power and authority or authorization
to
enter into such agreement.
(d) The
Board
of Managers will prepare or cause to be prepared and will file or cause to
be
filed on or before the due date (or any extension thereof) any federal, state
or
local tax returns required to be filed by the Company. The Board of Managers
will cause the Company to pay any taxes payable by the Company; provided, however,
that
the Managers will not be required to cause the Company to pay any tax so
long as
the Company is contesting in good faith and by appropriate legal proceedings
the
validity, applicability or amount thereof and such contest does not materially
endanger any right or interest of the Company.
13
(e) The
Board
of Managers will, from time to time, submit, or cause to be submitted, to
any
appropriate state securities administrator all documents, papers, statistics
and
reports required to be filed with or submitted to such state securities
administrator.
(f) The
Board
of Managers will use their best efforts to cause the Company to be formed,
reformed, or qualified to engage in investment activities, or be registered
under any applicable assumed or fictitious name statute or similar law in
any
state in which the Company then makes investments or transacts business,
if such
formation, reformation, qualification or registration is necessary or desirable
in order to protect the limited liability of the Members or to permit the
Company lawfully to own or make investments or transact business.
Section
4.8 Liability
of Managers.
No
person who is a Manager of the Company shall be personally liable under any
judgment of a court, or in any other manner, for any debt, obligation, or
liability of the Company, whether that liability or obligation arises in
contract, tort, or otherwise, solely by reason of being a Manager of the
Company.
Section
4.9 Resignation.
Any
Manager may resign at any time upon written notice of resignation to the
Member.
Any resignation will be effective immediately unless a date certain is specified
for it to take effect, in which event it will be effective upon such date,
and
acceptance of any resignation will not be necessary to make it effective,
irrespective of whether the resignation is tendered subject to such
acceptance.
Section
4.10 Removal
of Managers.
Any
Manager may be removed, either for or without cause, by the Member who appointed
him or her pursuant to Section 4.3 hereof.
Section
4.11 Filling
of Vacancies.
In the
case of any increase in the number of Managers, or of any vacancy in the
Board
of Managers, the additional Manager will be appointed by the Member having
the
right to so appoint such Manager pursuant to Section 4.3 hereof.
Section
4.12 Managers'
Compensation.
Any or
all Managers may receive such reasonable compensation for their services,
whether in the form of salary or otherwise, with expenses, if any, as the
Board
of Managers and the Members may from time to time determine.
Section
4.13 Officers.
(a) Appointment
of Officers.
The
Board of Managers, by a greater than two-thirds majority, may from time to
time
appoint authorized officers of the Company who may, on behalf of the Company,
execute agreements to which the Company is a party and any document or
certificate to be delivered in connection herewith or pursuant hereto. The
officers of the Company shall have such titles as determined by the Board
of
Managers. The officers shall serve at the pleasure of the Board of Managers,
subject to all rights, if any, of an officer under any contract of employment
or
other agreement.
(b) Powers.
Each
authorized officer will have the right and authority to take all actions
specifically enumerated in the Certificate of Formation or this Agreement
which
may be taken by the Company or which the authorized officer otherwise deems
necessary, useful or appropriate for the day-to-day management and conduct
of
the Company's business. All instruments, contracts, agreements and documents
providing for the acquisition, mortgage or disposition of property of the
Company will be valid and binding on the Company only if executed by an
authorized officer of the Company.
14
(c) Removal
and Filling of Vacancy of Officers.
Subject
to the rights, if any, of an officer under a contract of employment, any
officer
may be removed, either with or without cause, by the Board of Managers at
any
time. A vacancy in any office because of death, resignation, removal,
disqualification or any other cause may be filled only by the Board of Managers.
The Board of Managers may at any time terminate or modify the authority of
any
agent.
(d) Liability
of Officers.
No
person who is an officer of the Company shall be personally liable under
any
judgment of a court, or in any other manner, for any debt, obligation, or
liability of the Company, whether that liability or obligation arises in
contract, tort, or otherwise, solely by reason of being an officer of the
Company.
Section
4.14 Tax
Matters Partner.
For any
peiod where the Company is not a DRE, the Board of Managers shall designate
a
Member to serve as the "Tax Matters Partner" within the meaning of Section
6231(a)(7) of the Code, and to manage administrative tax proceedings conducted
at the Partnership level by the Internal Revenue Service with respect to
Company
income tax matters. If at any time such person is not eligible under the
Code to
serve, or refuses to serve, as the Tax Matters Partner, another Member shall
be
designated by the Board of Managers to serve as the Tax Matters Partner.
The Tax
Matters Partner is hereby authorized to and is specifically directed and
authorized to take whatever steps the Tax Matters Partner in its discretion
deems necessary or desirable to perfect such designation, including, without
limitation, filing any forms or documents with the Internal Revenue Service
and
taking such other action as may from time to time be required under Treasury
Regulations. Without limiting the generality of the foregoing, the Tax Matters
Partner shall only be permitted to make any income tax election on behalf
of the
Company (included those permitted to be made pursuant to Section 754) with
the
consent of a two-thirds majority of the Board of Managers. The Tax Matters
Partner shall serve as Tax Matters Partner until its resignation or until
the
designation of its successor, whichever occurs sooner. The initial Tax Matters
Partner shall be Claymore Group Inc.
Section
4.15 Duty
of Care of Managers and Officers.
Except
to the extent otherwise provided herein:
(a) Each
Manager and officer of the Company will, to the fullest extent permitted
by law,
including Section 18-1101(c) of the Act, discharge his or her duties in good
faith, with the care an ordinarily prudent person in a like position would
exercise under similar circumstances, and in a manner the Manager reasonably
believes to be in the best interests of the Company.
(b) Each
Manager and officer of the Company may rely on information or advice received
from other persons if that reliance is consistent with the standard of care
set
forth in Section 4.15(a) above.
Section
4.16 Appointment
of Committees.
The
Board of Managers, by a resolution adopted by a greater than two-thirds
majority, shall designate an audit committee and may designate one or more
other
committees, each of which, to the extent provided in such resolution, shall
have
and exercise all the powers and authority of the Board of Managers except
as
otherwise prohibited by law.
15
ARTICLE
V
CAPITAL
STRUCTURE AND CONTRIBUTIONS
Section
5.1 Capital
Structure.
Simultaneously with the execution and delivery of this Agreement, MacroMarkets
LLC will be admitted as the sole member of the Company, with a 100% Percentage
Interest in the Company.
Section
5.2 Capital
Contributions.
From
time to time, the Board of Managers may determine that the Company requires
capital and may request each Member to make contributions to the capital
of the
Company pro rata based on the Members’ Percentage Interests or in an amount
determined by the Board of Managers. Each Member may, but is not required
to,
make such additional capital contributions as it may determine in its sole
discretion. A capital account will be maintained for each Member, to which
contributions and profits will be credited and against which distributions
and
losses will be charged.
Section
5.3 Capital
Accounts.
For
each Member (and each permitted assignee), the Company shall establish and
maintain a separate Capital Account. Each Member shall initially contribute
$1.00, and its Capital Account shall be credited with such amount.
Section
5.4 Additional
Financing.
Except
as otherwise provided in this Article V, no Member shall be obligated or
permitted to contribute any additional capital to the Company without the
consent of the Board of Managers. No interest shall accrue on any contributions
to the capital of the Company, and no Member shall have the right to withdraw
or
to be repaid any capital contributed by it or to receive any other payment
in
respect of its interest in the Company, including without limitation as a
result
of the withdrawal or resignation of such Member from the Company, except
as
specifically provided in this Agreement. The records of the Company shall
be
adjusted to reflect any additional contributions to the capital of the Company
made pursuant to Section
5.2.
ARTICLE
VI
PROFITS
AND LOSSES; DISTRIBUTIONS
Section
6.1 Basic
Allocations.
(a) For
so
long as the Company is a DRE, Net Profits and Net Losses of the Company for
any
fiscal period shall be allocated to the Member; at all other times, they
shall
be allocated among the Members in such proportions and in such amounts as
may be
necessary so that following such allocations, the Adjusted Capital Account
balance of each Member equals such Member’s then Target Balance.
(b) If
the
amount of Net Profits or Net Losses allocable to the Members pursuant to
Section
6.1(a) for a period is insufficient to allow the Adjusted Capital Account
balance of each Member to equal such Member’s Target Balance, such Net Profits
or Net Losses shall be allocated among the Members in such a manner as to
decrease the differences between the Members’ respective Adjusted Capital
Account balances and their respective Target Balances in proportion to such
differences.
(c) Allocations
of Net Profits and Net Losses provided for in this Section
6.1
shall
generally be made as of the end of the fiscal year of the Company; provided,
however,
that
allocations of items of Net Profits and Net Losses described in clause (vi)
of
the definition of "Net
Profits"
and
"Net
Losses"
shall
be made at the time deemed realized as described in the definition of
"Capital
Account."
16
Section
6.2 Regulatory
Allocations.
For all
periods when the Company is not a DRE, notwithstanding the provisions of
Section
6.1
above,
the following allocations of Net Profits, Net Losses and items thereof shall
be
made in the following order of priority:
(a) Items
of
income or gain (computed with the adjustments contained in paragraphs (i),
(ii),
(iii), (iv), (v) and (vi) of the definition of "Net
Profits"
and
"Net
Losses")
for
any taxable period shall be allocated to the Members in the manner and to
the
minimum extent required by the "minimum gain chargeback" provisions of Treasury
Regulation Section 1.704-2(f) and Treasury Regulation Section 1.704-2(i)(4).
(b) All
"nonrecourse deductions" (as defined in Treasury Regulation Section
1.704-2(b)(1)) of the Company for any year shall be allocated to the Members
in
accordance with their respective Percentage Interests; provided,
however,
that
nonrecourse deductions attributable to "partner nonrecourse debt" (as defined
in
Treasury Regulation Section 1.704-2(b)(4)) shall be allocated to the Members
in
accordance with the provisions of Treasury Regulation Section 1.704-2(i)(1).
(c) Items
of
income or gain (computed with the adjustments contained in paragraphs (i),
(ii),
(iii), (iv), (v) and (vi) of the definition of "Net
Profits"
and
"Net
Losses")
for
any taxable period shall be allocated to the Members in the manner and to
the
extent required by the "qualified income offset" provisions of Treasury
Regulation Section 1.704-1(b)(2)(ii)(d).
(d) In
no
event shall Net Losses of the Company be allocated to a Member if such
allocation would cause or increase a negative balance in such Member's Capital
Account (determined for purposes of this Section 5.02(d) only, by increasing
the
Member's Capital Account balance by the amount the Member is obligated to
restore to the Company pursuant to Treasury Regulation Section
1.704-1(b)(2)(ii)(c)
and the
amount the Member is deemed obligated to restore to the Company pursuant
to
Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5)) and decreasing
it
by the amounts specified in Treasury Regulations
Section 1.704-1(b)(2)(ii)(d)(4)(5)
and
(6).
(e) Except
as
otherwise provided herein or as required by Code Section 704, for tax purposes,
all items of income, gain, loss, deduction or credit shall be allocated to
the
Members in the same manner as are Net Profits and Net Losses; provided,
however,
that if
the Carrying Value of any property of the Company differs from its adjusted
basis for tax purposes, then items of income, gain, loss, deduction or credit
related to such property for tax purposes shall be allocated among the Members
so as to take account of the variation between the adjusted basis of the
property for tax purposes and its Carrying Value in the manner provided for
under Code Section 704(c) using any permitted method as selected by the Board
of
Managers in their sole discretion.
Section
6.3 Allocations
Upon Transfer or Admission.
In the
event that a Member acquires an interest in the Company either by transfer
from
another Member or by acquisition from the Company, if after such acquisition
the
Company is not a DRE, the Net Profits, Net Losses gross income, nonrecourse
deductions and items thereof attributable to the interest so transferred
or
acquired shall be allocated among the Members based on a method chosen by
the
Board of Managers, in its sole discretion, which method shall comply with
Section 706 of the Code and shall be binding on all Members. For purposes
of
determining the date on which the acquisition occurs, the Company may make
use
of any convention allowable under Section 706(d) of the Code.
Section
6.4 Distributions.
(a)
From time to time, the Board of Managers will cause the Company to distribute
any cash held by it which is not reasonably necessary for the operation of
the
Company or the performance of its obligations under the Securitization
Documents, the Transfer
17
Agreements
and the Service Provider Contracts unless such distribution would violate
Section 18-607 or 18-804 of the Act or of any other applicable law. The
distributions of the Company will be allocated to the Members in accordance
with
their Percentage Interests.
(b) Net
proceeds upon liquidation of the Company shall be distributed in accordance
with
Section
9.4.
(c) The
Board
of Managers in their sole discretion may withhold and pay any taxes with
respect
to any Member, and any such taxes may be withheld from any distribution
otherwise payable to such Member or, if no sufficiently large distribution
is
imminent, the Board of Managers may require the relevant Member to promptly
reimburse the Company for the amount of such tax withheld and paid over by
the
Company. No such reimbursement will be considered a capital contribution
for
purposes of this Agreement. Taxes withheld on amounts directly or indirectly
payable to the Company and taxes otherwise paid by the Company shall be treated
for purposes of this Agreement as distributed to the appropriate Members
and
paid by the appropriate Members to the relevant taxing
jurisdiction.
ARTICLE
VII
ACCOUNTING
AND RECORDS
Section
7.1 Books
and Records.
The
books and records of the Company shall be kept, and the financial position
and
the results of its operations recorded, in accordance with such accounting
procedures and principles as the Board of Managers may deem
appropriate.
Section
7.2 Delivery
to Member and Inspection.
Upon
the request of any Member, the Board of Managers shall promptly deliver to
the
Member, or permit the Member to inspect during normal business hours, at
the
expense of the Company, any information which the Member may reasonably
request.
Section
7.3 Bank
Accounts.
The
Board of Managers will maintain the funds of the Company in one or more separate
bank accounts in the name of the Company, and shall not permit the funds
of the
Company to be co-mingled in any fashion with the funds of any other
Person.
ARTICLE
VIII
EXCULPATION;
LIABILITIES: INDEMNIFICATION
Section
8.1 Exculpation.
Notwithstanding any other provisions of this Agreement, whether express or
implied, or obligation or duty at law or in equity, none of the Members,
the
Managers, or any officers, directors, stockholders, partners, employees,
representatives or agents of any of the foregoing, nor any officer, employee,
representative or agent of the Company or any of its Affiliates will, to
the
fullest extent permitted by law, be liable to the Company or any other Person
for any act or omission (in relation to the Company, this Agreement, any
related
document or any transaction contemplated hereby or thereby) taken or omitted
by
such Person bound by this Agreement in the reasonable belief that such act
or
omission is in or not contrary to the best interests of the Company and is
within the scope of authority granted to such Person by the Agreement, provided
such act or omission
18
does
not
constitute fraud, deceit, gross negligence, reckless or intentional misconduct
or a knowing violation.
Section
8.2 Liabilities:
Indemnification.
(a)
Subject
to Section
8.2(f),
any
Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit, proceeding or claim, whether
civil, criminal, administrative or investigative, by reason of the fact that
such Person is or was a Member, Manager, officer, partner, trustee, employee,
agent or legal representa-tive of the Company (each, an "Indemnified
Party"),
will
be indemnified and held harmless by the Company to the fullest extent legally
permissible against all expenses, claims, damages, liabilities and losses
(including without limitation, judgments, interest on judgments, fines, charges,
costs, amounts paid in settlement, expenses and attorneys' fees incurred
in
investigating, preparing or defending any action, claim suit, inquiry,
proceeding, investigation or any appeal taken from the foregoing by or before
any court or governmental, administrative or other regulatory agency, body
or
commission), whether pending or merely threatened, whether or not any
Indemnified Party is or may be a party thereto, including interest on any
of the
foregoing (collectively, "Damages")
arising
out of, or in connection with, the management or conduct of the business
and
affairs of the Company, except for any such Damages to the extent that they
are
found by a court of competent jurisdiction to have resulted from fraud, deceit,
gross negligence, reckless or intentional misconduct or a knowing violation
of
the Indemnified Parties or willful violations of the express provisions hereof
by the Indemnified Parties; provided,
however,
the
foregoing shall not require the Company to indemnify and hold harmless any
Person in connection with any action, suit, proceeding, claim or counterclaim
initiated by or on behalf of such Person. The Indemnified Parties may consult
with counsel and accountants with respect to the affairs of the Company and
will
be fully protected and justified, to the extent allowed by law, in acting,
or
failing to act, if such action or failure to act is in accordance with the
advice or opinion of such counsel or accountants.
(b) The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, will not,
of
itself, create a presumption that the Person seeking indemnification did
not act
in good faith and in a manner which such Person reasonably believed to be
in or
not opposed to the best interest of the Company or its creditors, and, with
respect to any criminal action or proceeding, had reasonable cause to believe
that such Person's conduct was unlawful. Entry of a judgment by consent as
part
of a settlement will not be deemed a final adjudication of liability for
gross
negligence or misconduct in the performance of duty, nor of any other issue
or
matter.
(c) Subject
to Section
8.2(f),
unless
the Board of Managers otherwise determines, in its sole discretion, expenses
(including attorneys' fees and disbursements) incurred by an Indemnified
Party
in defending any civil, criminal, administrative or investigative action,
suit
or proceeding shall, to the fullest extent permitted by law, be paid by the
Company in advance of the final disposition of such action, suit, proceeding
or
claim upon receipt of an undertaking by or on behalf of such Indemnified
Party
to repay such amount if there shall be a final adjudication or determination
that such Indemnified Party is not entitled to indemnification as provided
herein; provided,
however,
that
the foregoing shall not require the Company to advance amounts to any
Indemnified Party in connection with any action, suit, proceeding, claim
or
counterclaim initiated by or on behalf of such Indemnified Party. Expenses
(including attorneys' fees and disbursements) incurred by other Indemnified
Parties in defending in any civil, criminal, administrative or investigative
action, suit, proceeding or claim shall be paid by the Company upon such
terms
and conditions, if any, as the Board of Managers deems appropriate.
19
(d) To
the
fullest extent permitted by law, including Section 18-1101(c) of the Act,
no
Manager of the Company will be personally liable to the Company for monetary
damages for any breach of fiduciary duty by such person as a
Manager.
(e) The
indemnification and advancement of expenses provided by this Section
8.2
will not
be deemed exclusive of any other rights to which those seeking indemnification
or advancement may by entitled under any agreement, vote of the Board of
Managers or otherwise, both as to action in an official capacity and as to
action in another capacity while holding such office, and will continue as
to a
Person who has ceased to be a Manager, employee or agent and will inure to
the
benefit of the heirs, executors and administrators of such Person.
(f) Any
amounts payable by the Company in accordance with this Section
8.2
will be
payable solely to the extent of funds available therefor. The Company's
obligations under this Section
8.2
will, to
the fullest extent permitted by law, not constitute a claim against the Company
to the extent that the Company does not have funds sufficient to make payment
of
such obligations. Any claim that an Indemnified Party may have at any time
against the Company that it may seek to enforce hereunder will be subordinate
to
the payment in full (including post-petition interest, in the event that
the
Company becomes a debtor or debtor in possession in a case under any applicable
federal or state bankruptcy, insolvency or other similar law now or hereafter
in
effect or otherwise subject to any insolvency, reorganization, liquidation,
rehabilitation or other similar proceedings) of the claims of the holders
of any
Securities which are collateralized or secured by the assets of the Company
and
of claims (if any) of any Person to which Eligible Investments (or interests
therein) have been transferred pursuant to any Transfer Agreement.
Section
8.3 Amendments:
Indemnification.
The
indemnities contained in Section
8.2
will
survive the resignation, removal or termination of any Indemnified Party
or the
termination of this Agreement. Any repeal or modification of this Article
VIII
will not adversely affect any rights of such Indemnified Party pursuant to
this
Article VIII, including the right to indemnification and to the advancement
of
expenses of an Indemnified Party existing at the time of such repeal or
modifications with respect to any acts or omissions occurring prior to such
repeal or modification.
Section
8.4 Insurance.
The
Company shall have the power to purchase and maintain insurance on behalf
of any
Person who is or was a Manager, officer or agent of the Company against any
liability asserted against such Person and incurred by such Person in any
capacity, or arising out of such Person's status as an agent, whether or
not the
company would have the power to indemnify such Person against such liability
under the provisions of Section 8.2 or under applicable law.
ARTICLE
IX
DISSOLUTION
AND WINDING UP
Section
9.1 Dissolution
of the Company.
The
Company will be dissolved upon any of the following events:
(i) the
termination of the legal existence of the last remaining member of the Company
or the occurrence of any other event which terminates the continued membership
of the
20
last
remaining member of the Company in the Company unless the business of the
Company is continued in a manner permitted by this Agreement or the Act;
(ii) the
entry
of a decree of judicial dissolution under the Act; or
(iii) the
termination of the Company by the Board of Managers.
Section
9.2 Certificate
of Cancellation.
As soon
as possible following the occurrence of any of the events specified in Section
9.1, the Board of Managers (if the Board of Managers has not wrongfully
dissolved the Company) or the Members, shall execute a Certificate of
Cancellation in such form as shall be prescribed by the Act and file the
Certificate of Cancellation as required by the Act.
Section
9.3 Winding
Up.
Upon
the occurrence of any event specified in Section
9.1,
the
Company shall continue solely for the purpose of winding up its affairs in
an
orderly manner, liquidating its assets, and satisfying the claims of its
creditors. The Board of Managers (if the Board of Managers has not wrongfully
dissolved the Company) or the Members shall be responsible for overseeing
the
winding up and liquidation of Company, shall take full account of the
liabilities of Company and its assets, shall cause its assets to be sold
or
distributed, and if sold, shall cause its assets to be sold as promptly as
is
consistent with obtaining the fair market value thereof, and shall cause
the
proceeds therefrom, to the extent sufficient therefor, to be applied and
distributed as provided in Section
9.4.
The
Persons winding up the affairs of the Company shall give written notice of
the
commencement of winding up by mail to all known creditors and claimants whose
addresses appear on the records of the Company.
Section
9.4 Order
of Payment of Liabilities Upon Dissolution.
(a)
After
determining that all known debts and liabilities of the Company in the process
of winding-up, including without limitation, debts and liabilities to any
Member
as a creditor of the Company and any Capital Contributions, have been paid
or
adequately provided for, the remaining assets will be distributed to the
Member,
except if the Company is not a DRE at that time, then to the Members in
proportion to, and to the extent of, their positive Capital Account
balances
(after
such balances have been adjusted pursuant to Article V to reflect all debits
and
credits required by applicable Treasury Regulations under Section 704(b)
of the
Code for all events through and including the distribution in liquidation
of the
Company) in proportion to, and to the extent of, such positive balances.
In the
event that any part of such net assets consists of notes or accounts receivable
or other noncash assets, the Board of Managers or liquidator may take whatever
steps they deem appropriate to convert such assets into cash or into any
other
form which would facilitate the distribution thereof. If any assets of the
Company are to be distributed in kind, such assets shall be distributed on
the
basis of their fair market value net of any liabilities.
(b) A
payment
of a debt or liability, whether the whereabouts of the creditor is known
or
unknown, will be deemed adequately provided for if the payment has been provided
for by either of the following means:
(i) payment
thereof has been assumed or guaranteed in good faith by one or more financially
responsible Persons or by the United States government or any agency thereof,
and the provision, includ-ing the financial responsibility of the Person,
was
determined in good faith and with reasonable care by the Member or Board
of
Managers to be adequate at the time of any distribution of the assets pursuant
to this Section; or
21
(ii) the
amount of the debt or liability has been deposited in an account for the
benefit
of the creditor.
This
Section
9.4
shall
not prescribe the exclusive means of making adequate provision for debts
and
liabilities.
ARTICLE
X
MISCELLANEOUS
Section
10.1 Amendments.
Except
as provided in Section
2.1
with
respect to amendments required by law, this Agreement and the Certificate
of
Formation may be amended only in writing by Members holding at least a greater
than two-thirds majority of the Percentage Interests. An amendment will become
effective as of the date specified in the approval of the Members, or if
none is
specified, as of the date of such approval or as otherwise provided in the
Act.
Section
10.2 Assignments;
Additional Members.
(a)
No
Member may sell, assign or transfer in whole or in part its Percentage Interest
without the consent of the other Member. If the other Member so consents,
then
upon the assignment by the Member of all of its limited liability company
interest in the Company pursuant to this Section
10.2,
the
assignee will be admitted to the Company as a member of the Company upon
its
execution of an instrument signifying its agreement to be bound by the terms
and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission will be deemed effective immediately
prior to the assignment and, immediately following such admission, the assignor
Member will cease to be a member of the Company. Notwithstanding anything
in
this Agreement to the contrary, any successor to a Member by merger or
consolidation in compliance with this Agreement will, without any further
act,
be the Member hereunder, and such merger or consolidation will not constitute
an
assignment for purposes of this Agree-ment and the Company will continue
without
dissolution.
(b) One
or
more additional members of the Company may be admitted to the Company only
upon
the unanimous consent of the Members.
(c) Notwithstanding
the provisions of Section
10.2(a),
no
Transfer of the interest of a Member, or any portion thereof, shall be made
if
the Company is advised by counsel that such Transfer (i) may require
registration under the Securities Act, (ii) may result in the violation of
any
applicable state securities laws, (iii) unless approved by the Board of
Managers, may result in a termination of the Company under Section 708 of
the
Code, (iv) may result in the treatment of the Company as an association taxable
as a corporation or as a “publicly-traded limited partnership” for federal,
state or local tax purposes, (v) may require the Company to register as an
“investment company” under applicable state or federal laws or to modify the
particular exemption from such registration on which any such entity has
elected
to rely, or (vi) may violate or result in the breach of the provisions of
any
agreement between the Company and a third party or of then applicable rules
and
regulations of any governmental authority having jurisdiction over such
Transfer. In connection with any such Transfer, the Transferring Member shall
provide the Company with sufficient information to allow counsel for the
Company
to make a determination that the proposed Transfer will not result in any
of the
consequences referred to in clauses (i) to (vi) of the preceding
sentence.
22
Section
10.3 Severability.
If any
one or more of the covenants, agreements, provisions or terms of this Agreement
will be for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms will be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and will in no way affect
the
validity or enforceability of the other provisions of this
Agreement.
Section
10.4 Successors
and Assigns.
All
covenants and agreements contained herein will be binding upon, and inure
to the
benefit of, the Member and its successors and permitted assigns, all as herein
provided.
Section
10.5 Limited
Liability Company.
The
Members intend to form a limited liability company and do not intend to form
a
partnership under the laws of the State of Delaware or any other
laws.
Section
10.6 Benefits
of Agreement; No Third-Party Rights.
None of
the provisions of this Agreement (including Section
5.2)
will be
for the benefit of or enforceable by any creditor of the Company or by any
creditor of the Member. Nothing in this Agreement will be deemed to create
any
right in any Person (other than the Indemnified Parties) not a party hereto,
and
this Agreement will not be construed in any respect to be a contract in whole
or
in part for the benefit of any third Person.
Section
10.7 Headings.
The
headings of the various Articles and Sections herein are for convenience
of
reference only and will not define or limit any of the terms or provisions
hereof.
Section
10.8 Governing
Law.
THIS
AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS
THEREOF.
Section
10.9 Counterparts.
This
Agreement may be executed in counterparts, each of which when so executed
will
be an original, but all of which together will constitute one and the same
agreement.
23
IN
WITNESS WHEREOF, the undersigned Members have duly executed this Agreement
as of
this 27th
day of
August, 2007.
By: MACROMARKETS
LLC,
as
Member
By:
/s/ Xxxxxx Xxxxxxx, III
Name: Xxxxxx
Xxxxxxx, III
Title: Chief
Executive Officer
EXHIBIT
A
CERTIFICATE
OF FORMATION
filed
with Delaware Secretary of State
Filed
as
Exhibit 3.1 to this Registration Statement
A-1
