Exhibit B-6
OPERATING AGREEMENT
OF
WHITING LEASING LLC
(AN INDIANA LIMITED LIABILITY COMPANY)
TABLE OF CONTENTS
ARTICLE 1 - FORMATION, NAME, AND PRINCIPAL PLACE OF BUSINESS........................................ 1
1.1 Formation......................................................................... 1
1.2 Name ......................................................................... 1
1.3 Principal Place of Business....................................................... 1
1.4 Registered Agent.................................................................. 1
ARTICLE 2 - DEFINITIONS............................................................................. 2
2.1 Definitions....................................................................... 2
ARTICLE 3 - PURPOSE AND SCOPE OF THE COMPANY........................................................ 2
3.1 Purpose and Scope of the Company. ................................................ 2
3.2 Business Opportunities............................................................ 3
ARTICLE 4 - TERM.................................................................................... 3
4.1 Term of the Company............................................................... 3
ARTICLE 5 - CAPITAL CONTRIBUTIONS AND ADVANCES...................................................... 3
5.1 Capital Contributions............................................................. 3
5.2 Units ......................................................................... 4
ARTICLE 6 - ALLOCATION OF PROFITS AND LOSSES; DISTRIBUTIONS
AND PAYMENTS TO MEMBERS.................................................................... 4
6.1 Distributions..................................................................... 4
6.2 Allocation Rules.................................................................. 4
ARTICLE 7 - STATUS OF THE MEMBER.................................................................... 4
7.1 Liability......................................................................... 4
7.2 Status of the Interest in the Company............................................. 5
7.3 Resignation Prohibited............................................................ 5
7.4 Bankruptcy, Insolvency or Dissolution of the Member............................... 5
ARTICLE 8 - TRANSFER OF INTERESTS................................................................... 5
8.1 Transfer.......................................................................... 5
ARTICLE 9 - MEETINGS AND VOTING..................................................................... 5
9.1 Annual Meetings................................................................... 5
9.2 Action by the Member.............................................................. 5
ARTICLE 10 - MANAGEMENT............................................................................. 6
10.1 Board of Managers................................................................. 6
10.2 Duties............................................................................ 6
10.3 Resignation....................................................................... 6
10.4 Removal........................................................................... 6
10.5 Vacancies......................................................................... 6
10.6 Annual Meetings................................................................... 6
10.7 Special Meetings.................................................................. 7
10.8 Action by Unanimous Written Consent............................................... 7
10.9 Quorum............................................................................ 7
10.10 Organization...................................................................... 7
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ARTICLE 11 - OFFICERS.............................................................................. 7
11.1 Officers......................................................................... 7
11.2 President........................................................................ 7
11.3 Vice President................................................................... 8
11.4 Secretary........................................................................ 8
11.5 Assistant Secretary.............................................................. 8
11.6 Treasurer........................................................................ 8
11.7 Assistant Treasurer.............................................................. 8
11.8 Controller....................................................................... 9
11.9 Assistant Controller............................................................. 9
11.10 Delegation of Authority.......................................................... 9
11.11 Execution of Documents........................................................... 9
ARTICLE 12 - DISSOLUTION AND TERMINATION........................................................... 9
12.1 Dissolution...................................................................... 9
12.2 Winding Up and Termination....................................................... 10
ARTICLE 13 - FISCAL AFFAIRS........................................................................ 10
13.1 Fiscal Year...................................................................... 10
13.2 Books and Records................................................................ 10
13.3 Reports.......................................................................... 10
13.4 Bank Accounts.................................................................... 11
13.5 Tax Returns and Periodic Reports................................................. 11
13.6 Accounting Decisions............................................................. 11
13.7 Income Tax Treatment............................................................. 11
ARTICLE 14 - AMENDMENTS............................................................................ 11
14.1 Procedure for Amendment.......................................................... 11
ARTICLE 15 - MISCELLANEOUS PROVISIONS.............................................................. 11
15.1 Application for Admission to Transact Business................................... 12
15.2 Governing Law.................................................................... 12
15.3 Consents and Approvals........................................................... 12
15.4 Notices.......................................................................... 12
15.5 Reliance on Opinion of Counsel................................................... 12
15.6 Scope of Member's Authority...................................................... 12
15.7 Execution of Company Documents................................................... 12
15.8 Time............................................................................. 12
15.9 Binding Effect................................................................... 12
15.10 Entire Agreement................................................................. 12
15.11 Remedies Not Exclusive........................................................... 15
15.12 Severability..................................................................... 13
15.13 Captions......................................................................... 13
15.14 Identification................................................................... 13
15.15 Creditors........................................................................ 13
15.16 Member's Age and Competence...................................................... 13
ARTICLE 16 - INDEMNIFICATION....................................................................... 13
16.1 Litigation Brought by Third Parties.............................................. 13
16.2 Litigation by or in the Right of the Company..................................... 14
16.3 Successful Defense............................................................... 14
16.4 Determination of Conduct......................................................... 14
16.5 Advance Payment.................................................................. 14
16.6 Article 16 Not Exclusive......................................................... 15
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16.7 Insurance........................................................................ 15
16.8 Effect of Invalidity............................................................. 15
16.9 Definition of Company............................................................ 15
16.10 Change in Law.................................................................... 15
16.11 Indemnification.................................................................. 15
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OPERATING AGREEMENT
OF
XXXXXXX LEASING LLC
THIS AGREEMENT is made and entered into as of the 24th day of
April, 2003, by and between Primary Energy, Inc., an Indiana corporation, as the
sole member (the "Member") and Xxxxxxx Leasing LLC (the "Company").
W I T N E S E T H:
WHEREAS the Member has formed a limited liability company,
governed by the Indiana Business Flexibility Act (the "Act"), under the name and
style of Xxxxxxx Leasing LLC; and
WHEREAS the Member has agreed to make contributions of capital
to the Company in exchange for the Company agreeing to conduct the Company
business pursuant to the terms of this operating agreement (the "Agreement"),
which shall govern the rights and duties of the Member and the Company, and
which constitutes their entire agreement from and after the date hereof;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants of the parties hereto, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Member and the Company hereby agree as follows:
ARTICLE 1
FORMATION, NAME, AND PRINCIPAL PLACE OF BUSINESS
1.1 FORMATION. The Member has formed the Company as a limited
liability company under the provisions of the Act upon the terms and conditions,
and for the limited purposes and scope, set forth in this Agreement.
1.2 NAME. The firm name and style under which the Company will
conduct its business is Xxxxxxx Leasing LLC.
1.3 PRINCIPAL PLACE OF BUSINESS. The principal place of
business and principal office of the Company shall be 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxxxxxx, XX 00000. The Company may change such place of business and
office, and may have such additional places of business and offices, as the
Member may determine.
1.4 REGISTERED AGENT. The Company shall maintain in the State
of Indiana a registered office and a registered agent. The initial registered
agent of the Company shall be Xxxx X. Xxxxxxxx. The address of the Company's
initial registered agent is, and the address of the Company's initial registered
office shall be, 000 X. 00xx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000.
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ARTICLE 2
DEFINITIONS
2.1 DEFINITIONS.
(a) As used throughout this Agreement:
(1) "Code" shall mean the Internal Revenue Code of
1986, as amended.
(2) The term "Person" includes any corporation, firm,
limited liability company,
partnership, trust, or other form of association.
(b) Other Defined Terms. The following table indicates the
location in this Agreement of the other terms defined herein:
DEFINED TERM LOCATION
------------ --------
Act..................................... Page 1
Action.................................. Page 13
Agreement............................... Page 1
Another Entity.......................... Page 13
Authorized Capacity..................... Page 13
Board of Managers....................... Page 2
Company................................. Page 1
Company Person.......................... Page 13
Dissolving Event........................ Page 9
Expenses................................ Page 13
Managers................................ Page 2
Member.................................. Page 1
ARTICLE 3
PURPOSE AND SCOPE OF THE COMPANY
3.1 PURPOSE AND SCOPE OF THE COMPANY. The purpose of the
Company shall be to pursue any lawful business, purpose or activity permitted by
the Act. The Company, acting by and through its managers ("Managers") or
officers, shall have all powers necessary or desirable in connection with the
foregoing, including but not limited to, the power to: (i) enter into
agreements, and execute documents and instruments, including leases, mortgages,
evidences of indebtedness, construction, development, management, and other
contracts; (ii) borrow money, and open and maintain bank accounts authorizing
withdrawals on the signatures of one or more Persons as the board of managers of
the Company (the "Board of Managers") may designate; (iii) sell or assign any or
all of the assets of the Company; and (iv) execute such other documents and take
such other actions as may be necessary or desirable from time to time to carry
out any purpose authorized pursuant to this Section 3.1.
3.2 BUSINESS OPPORTUNITIES.
(a) Nothing contained in this Agreement shall be deemed to
restrict, in any way, the freedom of the Member to conduct, independently of the
Company, any business or
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other activity whatsoever, whether or not similar to, or competitive with, the
business of the Company, without any accountability to the Company.
(b) The Member shall not be required to submit any other
investment or business opportunity to the Company. The Member does not violate
any duty or obligation to the Company merely because the Member's conduct
furthers the Member's own interest. The Member may lend money to and transact
other business with the Company. The rights and obligations of the Member who
lends money to or transacts business with the Company are the same as those of a
Person who is not a Member, subject to other applicable laws. No transaction
with the Company shall be voidable solely because the Member has a direct or
indirect interest in the transaction if the transaction is fair to the Company.
ARTICLE 4
TERM
4.1 TERM OF THE COMPANY. The Company shall have a perpetual
existence, unless it is terminated as provided in Article 12 of this Agreement
or by operation of law.
ARTICLE 5
CAPITAL CONTRIBUTIONS AND ADVANCES
5.1 CAPITAL CONTRIBUTIONS. The Member shall make the
contribution described on Exhibit A at the time and on the terms specified on
Exhibit A. If no time for the contribution is specified, the contribution shall
be made upon the execution of this Agreement by the parties hereto. The value of
such contribution shall be as set forth on Exhibit A. No interest shall accrue
on any contribution and the Member shall not have the right to withdraw or be
repaid any contribution except as provided in this Agreement.
In addition to the initial contribution, as described in Exhibit A to
this Agreement, the Member may make additional contributions to the Company.
Except to the extent of the contributions described in Exhibit A to this
Agreement, the Member shall not be obligated to make any additional
contributions to the Member's capital account in the Company.
5.2 UNITS. The Company shall have units of membership
representing the entire ownership interest in the Company. The Company shall be
authorized to issue 100 of such units of membership. Upon making the capital
contribution described above, the Company shall issue all 100 units of
membership to the Member.
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ARTICLE 6
ALLOCATION OF PROFITS AND LOSSES;
DISTRIBUTIONS AND PAYMENTS TO MEMBERS
6.1 DISTRIBUTIONS.
(a) Except as provided in paragraph (b) of this Section 6.1
and as provided in Article 12 of this Agreement, the Company may make
distributions as determined by the Board of Managers from time to time and in
accordance with this Agreement.
(b) Notwithstanding the provisions of the preceding paragraph,
no distribution may be made to the Member to the extent that at the time of the
distribution, after giving effect to the distribution, the aggregate liabilities
of the Company (other than: (i) liabilities to the Member on account of its
interest in the Company and (ii) liabilities for which the recourse of creditors
is limited to the assets of the Company) exceed the aggregate fair market value
of the Company's assets or such distribution otherwise would cause the Company
to become insolvent; provided, however, that the fair market value of an asset
that is subject to a liability for which the recourse of creditors is limited
shall be included in the aggregate fair market value of the Company's assets
only to the extent that the fair market value of the asset exceeds such
liability. If the Member receives a distribution in violation of this paragraph,
it shall be obligated to return to the Company that portion of the distribution
made in violation of this paragraph.
(3) For all purposes of this Agreement, amounts withheld
pursuant to the Code, or a provision of any state or local tax law, with respect
to a payment or distribution to the Company or to the Member shall be treated as
amounts distributed to the Member.
6.2 ALLOCATION RULES. All profits, losses and credits, both
for the purposes of maintaining the Member's capital account in the Company, and
for Federal, state and local income tax purposes, shall be allocated to the
Member.
ARTICLE 7
STATUS OF THE MEMBER
7.1 LIABILITY. The Member shall not be bound by, or be
personally liable for, the expenses, liabilities, or obligations of the Company
beyond the amount agreed to be contributed by it to the capital of the Company
pursuant to this Agreement, and except as otherwise provided in this Agreement,
the Member shall not be responsible for losses sustained by the Company.
7.2 STATUS OF THE INTEREST IN THE COMPANY. The Member's
interest in the Company shall be fully paid and nonassessable. The Member shall
not have the right to reduce its contributions to the capital of the Company,
except as otherwise expressly provided in this Agreement. Furthermore, the
Member shall not have the right to demand or receive property
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other than cash in return for the Member's contribution, or as to profits,
losses, or distributions. The cost of defending any action brought against the
Company or the Member, or both, with respect to Company matters shall be borne
by the Company.
7.3 RESIGNATION PROHIBITED. Except as otherwise expressly
provided in this Agreement, the Member may not resign as a Member prior to the
dissolution and winding up of the Company.
7.4 BANKRUPTCY, INSOLVENCY OR DISSOLUTION OF THE MEMBER. Upon
the bankruptcy, insolvency or dissolution of the Member, the legally authorized
representative, or successor in interest of the Member shall have the same
rights as the Member previously possessed.
ARTICLE 8
TRANSFER OF INTERESTS
8.1 TRANSFER. The Member's interest in the Company shall be
transferrable in whole or in part without the consent of any other Person
(including, but not limited to, the Company), and the assignee shall be admitted
as a Member and admitted to all the rights of the Member who has assigned any
portion of its interest in the Company.
ARTICLE 9
MEETINGS AND VOTING
9.1 ANNUAL MEETINGS. The Member shall hold its annual meeting
on the second Wednesday in the month of April of each year (if such day is not a
legal holiday, and if a holiday, then on the first following day that is not a
legal holiday) for the purpose of organization, election of managers, and
consideration of any other business that may be brought before the meeting. No
notice shall be necessary for the holding of this annual meeting. If such
meeting is not held as above provided, the Managers may be elected in the manner
provided in Section 9.2 following.
9.2 ACTION BY THE MEMBER. Provided that the Company shall
continue to be owned by a single Member, formal meetings shall not be required
for the Member to take any action required or allowed pursuant to this Agreement
or by the Act. Any such action may be taken without a meeting and without a vote
if a consent in writing, setting forth the action so taken, is signed by a duly
authorized officer, employee or agent of the Member. Each such consent shall be
delivered to the Company.
ARTICLE 10
MANAGEMENT
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10.1 BOARD OF MANAGERS. The Board of Managers shall have the
authority to manage the business and affairs of the Company. The Board of
Managers shall initially consist of two Managers and shall consist of such
number of Managers, not less than two nor more than seven members, as determined
from time to time by the Board of Managers. The initial Managers of the Company
shall be Xxxx X. Xxxxxxx, Xxxxx X. Xxxxxx and V. Xxxxxxx Xxxxxxxx. The Managers
shall be elected annually by the Member. Such Managers shall hold office until
the next annual meeting of the Member and until their successors are elected and
qualified or until their earlier resignation or removal. Managers need not be
Members.
10.2 DUTIES. The Board of Managers may employ such agents,
employees and officers as it may deem advisable, and fix the rate of
compensation of all agents, employees and officers. Each Manager's duty of care
in the discharge of each Manager's duties to the Company is limited to
refraining from engaging in reckless conduct, intentional misconduct or a
knowing violation of law. In discharging its duties, the Managers shall be fully
protected in relying in good faith upon the records required to be maintained
under Article 13 of this Agreement and upon such information, opinions, reports,
or statements by any of its agents, or by any other Person, as to matters the
Managers reasonably believes are within such other Person's professional or
expert competence and who has been selected with reasonable care by or on behalf
of the Company, including information, opinions, reports, or statements as to
the value and amount of the assets, liabilities, profits, or losses of the
Company or any other facts pertinent to the existence and amount of assets from
which distributions to the Member may properly be paid.
10.3 RESIGNATION. A Manager may resign at any time by filing
his written resignation with the Secretary.
10.4 REMOVAL. Any one or more Managers may be removed,
with or without cause, at any time by the written act of the Member.
10.5 VACANCIES. In case of any vacancy in the Board of
Managers through death, resignation, removal or other cause, the Member may
elect a successor to fill such vacancy until his or her successor is elected and
qualified.
10.6 ANNUAL MEETINGS. The Board of Managers shall meet each
year on the second Wednesday in the month of April of each year (if such day is
not a legal holiday, and if a holiday, then on the first following day that is
not a legal holiday) for the purpose of organization, election of officers, and
consideration of any other business that may be brought before the meeting. No
notice shall be necessary for the holding of this annual meeting. If such
meeting is not held as above provided, the election of officers may be had at
any subsequent meeting of the Board of Managers specifically called in the
manner provided in Section 10.7 following.
10.7 SPECIAL MEETINGS. Special meetings of the Board of
Managers may be called at any time by the President or by any of the Managers at
any place within or without the State of Indiana, by giving, or causing the
Secretary or the Assistant Secretary to give, to each Manager, either personally
or by mail or by telegram, at least two (2) days' notice of the time, place and
purpose of such meeting.
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10.8 ACTION BY UNANIMOUS WRITTEN CONSENT. Formal meetings
shall not be required for the Managers to take any action required or allowed
pursuant to this Agreement or by the Act. Any such action may be taken without a
meeting and without a vote if a consent in writing, setting forth the action so
taken, is signed by all of the Managers. Each such consent shall be delivered to
the Company.
10.9 QUORUM. At any meeting of the Board of Managers, the
presence of a majority of the members of the Board of Managers elected and
qualified shall constitute a quorum for the transaction of any business. A vote
of the majority of the Managers where a quorum is present shall constitute an
act of the Board of Managers.
10.10 ORGANIZATION. The President, and in his absence the Vice
President and in their absence any Manager present, shall call meetings of the
Board of Managers to order, and shall act as chairman of such meetings. The
Secretary or the Assistant Secretary of the Company shall act as secretary of
all meetings of the Board of Managers, but in the absence of the Secretary or
the Assistant Secretary the presiding officer may appoint any Manager to act as
secretary of the meeting.
ARTICLE 11
OFFICERS
11.1 OFFICERS. The officers of the Company shall be chosen by
the Board of Managers and shall consist of a President, a Secretary, an
Assistant Secretary, and a Treasurer. One person may hold any two offices except
those of President and Secretary. Such officers shall be elected by the Board of
Managers at its annual meeting, and shall hold office for one year and/or until
their respective successors are duly elected and shall have qualified. The Board
of Managers may, from time to time, elect or appoint such other officers and
agents, such as one or more Vice Presidents, one or more Assistant Treasurers, a
Controller, or one or more Assistant Controllers, as it shall deem necessary,
who shall hold their offices for such terms and shall exercise such powers and
perform such duties as may be prescribed by the Board of Managers. Vacancies
among the officers of the Company shall be filled by the Board of Managers. Any
officer or agent elected or appointed by the Board of Managers may be removed at
any time by the affirmative vote of a majority of the whole Board of Managers.
11.2 PRESIDENT. The President of the Company shall preside at
all meetings of the Member and of the Board of Managers. He or she shall have
general supervision over the management and direction of the affairs of the
Company, subject to the control of the Board of Managers, and shall have such
other powers and duties as may be prescribed by the Board of Managers. Subject
to the control of the Board of Managers, the President shall have supervision of
all departments and of all Vice Presidents and other officers of the Company;
the President shall have such other powers and perform such other duties as from
time to time may be prescribed for him or her by the Board of Managers.
11.3 VICE PRESIDENT. In the absence of the President, or in
case of their inability or refusal to act, the Vice Presidents, if there be one
or more Vice Presidents, in the
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order of their respective elections, as appears from the record thereof, shall
have all of the powers and shall perform all of the duties of the President; and
each of the Vice Presidents shall have such other powers and shall perform such
other duties as from time to time may be prescribed for him or her by the Board
of Managers.
11.4 SECRETARY. The Secretary shall attend and keep the
minutes of all meetings of the Board of Managers and of the Member. He or she
shall have charge and custody of the limited liability company records of the
Company, and shall in general perform all the duties incident to the office of
the Secretary of a Company, subject at all times to the direction and control of
the Board of Managers or of the President.
11.5 ASSISTANT SECRETARY. The Assistant Secretary shall have
such duties and powers as may be prescribed for him or her by the Board of
Managers or be delegated to him or her by the President. In the absence or
disability of the Secretary, his or her powers and duties shall devolve upon the
Assistant Secretary, and he or she shall thereupon have and exercise such powers
and duties during such absence or disability of the Secretary.
11.6 TREASURER. The Treasurer shall have charge of, and shall
be responsible for, the collection, receipt, custody and disbursement of the
funds of the Company, and shall also have the custody of all securities
belonging to the Company. He or she shall disburse the funds of the Company as
may be ordered by the Board of Managers, taking proper receipts or making proper
vouchers for such disbursements, and shall at all times preserve the same during
his term of office. When necessary or proper, he or she shall endorse, on behalf
of the Company, all checks, notes, or other obligations payable to the Company
or coming into his possession for and on behalf of the Company, and shall
deposit the funds arising therefrom, together with all other funds of the
Company coming into his possession, in the name and to the credit of the Company
in such bank or banks as the Board of Managers shall from time to time by
resolution direct. He or she shall perform all duties which are incident to the
office of treasurer of a Company, subject at all times to the direction and
control of the Board of Managers and President. He or she shall give the Company
a bond if required by the Board of Managers in a sum, and with one (1) or more
sureties, satisfactory to the Board of Managers, 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 or other property of whatever kind in his possession or under
his control belonging to the Company.
11.7 ASSISTANT TREASURER. Each of the Assistant Treasurers, if
there be one or more Assistant Treasurers, shall have such powers and duties as
may be prescribed for him or her by the Board of Managers or be delegated to him
or her by the President. In the absence or disability of the Treasurer, his
powers and duties shall devolve upon such one of the Assistant Treasurers as the
Board of Managers or the President shall designate, or, if there be but one
Assistant Treasurer, then upon such Assistant Treasurer; and he or she shall
thereupon have and exercise such powers and duties during such absence or
disability of the Treasurer. Each Assistant Treasurer shall likewise give the
Company a bond if required by the Board of Managers upon like terms and
conditions as the bond required of the Treasurer.
11.8 CONTROLLER. The Controller, if there be a Controller,
shall have control over all accounts and records pertaining to moneys,
properties, materials and supplies. He or she
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shall have executive direction of the bookkeeping and accounting departments,
and shall have general supervision over the records in all other departments
pertaining to moneys, properties, materials and supplies. He or she shall have
charge of the preparation of the financial budget, and such other powers and
duties as are commonly incident to the office of comptroller of a Company,
subject at all times to the direction and control of the Board of Managers and
the President.
11.9 ASSISTANT CONTROLLER. Each of the Assistant Controllers,
if there be one or more Assistant Controllers, shall have such powers and duties
as may be prescribed for him or her by the Board of Managers or be delegated to
him or her by the President. In the absence or disability of the Controller, his
powers and duties shall devolve upon such one of the Assistant Controllers as
the Board of Managers or the President may designate, or, if there be but one
Assistant Controller, then upon such Assistant Controller; and he or she shall
thereupon have and exercise such powers and duties during such absence or
disability of the Controller.
11.10 DELEGATION OF AUTHORITY. In case of the absence of any
officer of the Company, or for any other reason that the Board of Managers may
deem sufficient, the Board of Managers may delegate the powers or duties of such
officer to any other officer or to any Manager, for the time being, provided a
majority of the entire Board of Managers concurs therein.
11.11 EXECUTION OF DOCUMENTS. Unless otherwise provided by the
Board of Managers, all contracts, leases, commercial paper and other instruments
in writing and legal documents, shall be signed by the President or a Vice
President. All bonds, deeds and mortgages shall be signed by the President or a
Vice President. All checks, drafts, notes and orders for the payment of money
shall be signed by those officers or employees of the Company as the Managers
may from time to time designate.
ARTICLE 12
DISSOLUTION AND TERMINATION
12.1 DISSOLUTION. The Company shall be dissolved and its
affairs wound up, upon the first to occur of the following events (a "Dissolving
Event"):
(a) The determination of the Member that the Company dissolve;
and
(b) A decree of judicial dissolution pursuant to 23-18-9-2 of
the Act.
Upon a Dissolving Event, the Company shall be wound up and terminated pursuant
to Section 12.2 of this Article.
12.2 WINDING UP AND TERMINATION. If the Company is
dissolved, its affairs shall be concluded in the following manner:
(a) The Member (or its legally authorized representative or
successor in interest) shall proceed with the liquidation of the Company, and
the proceeds of such liquidation
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(less any reasonable portion thereof reserved for a reasonable time to pay
contingent or unforeseen Company liabilities) shall be applied and distributed
as follows:
(1) First, to the creditors of the Company, excluding
the Member, in satisfaction
of all such liabilities of the Company;
(2) Second, to the Member in full repayment of any
loans made by the Member to the Company; and
(3) Third, to the Member.
(b) A reasonable time shall be allowed for the orderly
liquidation of the assets of the Company and the discharge of liabilities to
creditors.
ARTICLE 13
FISCAL AFFAIRS
13.1 FISCAL YEAR. The fiscal year of the Company shall be
December 31.
13.2 BOOKS AND RECORDS. The Company shall keep adequate books
of account on the cash or accrual basis to the extent permitted by the Code
wherein shall be recorded all contributions to the capital of the Company, and
all income, distributions, expenses, and transactions of the Company. The
Company also shall maintain as a part of the books and records of the Company
the name and address of the Member. The Member's name and address may be changed
by the Member by written notice to the Company. Such books of account, along
with the Company's federal, state, and local income tax returns (if any) for
each of the six preceding taxable years of the Company, shall be kept at the
principal office of the Company.
13.3 REPORTS.
(a) On or before March 31 of each year, the Company shall
cause to be furnished to the Member, at the expense of the Company: (i) an
adequate accounting of the activities of the Company for the previous year, and
(ii) a report to the Member containing information with respect to the Company
to be used in preparing the Member's Federal, state, and local income tax
returns.
(b) In addition, the Company shall cause to be furnished to
the Member, within 45 days subsequent to the close of each of the first three
calendar quarters of each year, an adequate accounting of the Company's
operations during such calendar quarter if requested by the Member.
(c) The reports required by this Section 12.3 may be unaudited
and shall be prepared in accordance with generally accepted accounting
principles.
13.4 BANK ACCOUNTS. All funds of the Company shall be
deposited in its name in such money market, checking, and savings accounts,
certificates of deposit, and U.S. government obligations as the Member may
designate. Withdrawals therefrom shall be made
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upon such signatures as the Member may designate. Notwithstanding anything to
the contrary contained in this Agreement, the Company shall maintain its own
separate and distinct books of account, bank accounts, and Company records, and
shall not commingle its assets or funds with those of any other Person.
13.5 TAX RETURNS AND PERIODIC REPORTS. In addition to the
reports required under Section 12.3 of this Article, the Company shall cause
such annual income tax returns, if any, and periodic reports for the Company as
are required by applicable law to be prepared and filed with the appropriate
authorities. The income tax returns of the Company shall be prepared and filed
on the basis of the accounting method selected by the Member.
13.6 ACCOUNTING DECISIONS. All decisions as to accounting
principles, except as specifically provided to the contrary herein, shall be
made by the Member.
13.7 INCOME TAX TREATMENT. For all federal, state and
local income tax purposes, the Company shall be treated as a branch or division
of the Member, rather than as an association taxable as a Company.
ARTICLE 14
AMENDMENTS
14.1 PROCEDURE FOR AMENDMENT. This Agreement may only be
amended upon the written consent of the Member and the Company.
ARTICLE 15
MISCELLANEOUS PROVISIONS
15.1 APPLICATION FOR ADMISSION TO TRANSACT BUSINESS. The
Company is hereby authorized by the Member to file, and upon execution of this
Agreement shall file, in accordance with applicable law, all documents necessary
for the formation of the Company.
15.2 GOVERNING LAW. This Agreement and the rights of the
parties hereunder shall be interpreted in accordance with the laws of the State
of Indiana, including the Act. The Member's interest in the Company shall be
personal property for all purposes. All real and other property owned by the
Company shall be deemed to be owned by the Company as an entity (and may be held
in the name of a nominee for the Company), and the Member individually shall not
have any ownership of such property.
15.3 CONSENTS AND APPROVALS. Whenever the consent or approval
of the Member is required or permitted under this Agreement, such consent or
approval may be evidenced by a written consent signed by Member.
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15.4 NOTICES. Except as otherwise expressly provided herein,
all notices under this Agreement shall be in writing and shall be given to the
Member at its address set forth in Exhibit A hereto (or at such other address as
the Member hereafter may specify by notice to the Company), and to the Company
at its principal office. Unless delivered personally, each such notice shall be
given by certified mail, postage prepaid. Each notice shall be effective when so
delivered or five days after being so mailed whichever is earlier.
15.5 RELIANCE ON OPINION OF COUNSEL. No duly authorized act or
failure to act by the Member that causes or results in loss or damage to the
Company shall subject the Member to liability if the Member's act or failure to
act was pursuant to opinion of legal counsel employed on behalf of the Company.
15.6 SCOPE OF MEMBER'S AUTHORITY. Except as otherwise provided
in this Agreement, the Member shall not have any authority to act for, or to
assume any obligation or responsibility on behalf of the Company. No Person
dealing with Member shall be required to determine the Member's authority to
perform any undertaking on behalf of the Company, or to determine any fact or
circumstance bearing upon the existence of such authority.
15.7 EXECUTION OF COMPANY DOCUMENTS. Any contract, agreement,
instrument, or other document to which the Company is a party may be signed by
any duly authorized officer or agent of the Company, and no other signature or
signatures shall be required.
15.8 TIME. Time is of the essence for all purposes under
this Agreement.
15.9 BINDING EFFECT. Subject to the limits on transferability
contained herein, each and all of the covenants, terms, provisions, and
agreements contained herein shall be binding upon and inure to the benefit of
the parties hereto, and their respective heirs, assigns, successors, and legal
representatives.
15.10 ENTIRE AGREEMENT. This Agreement, including the Exhibits
hereto, contains the entire agreement between the parties hereto relative to the
operation of the Company. Except as expressly provided herein, no variation,
modification or change to this Agreement shall be binding upon any party hereto,
unless set forth in a document duly executed by or on behalf of such party. From
time to time and at all times, each party hereto shall do all such other and
further acts as reasonably may be necessary in order fully to perform and carry
out the terms and intent of this Agreement.
15.11 REMEDIES NOT EXCLUSIVE. Any remedy herein contained for
breach of an obligation hereunder shall not be deemed to be exclusive, and shall
not impair the right of any party to exercise any other right or remedy, whether
for damages, injunction, or otherwise.
15.12 SEVERABILITY. If any provision of this Agreement, or the
application thereof to any Person or circumstance, is invalid or unenforceable
to any extent, then the remainder of this Agreement, and the application of such
remaining provisions to other Persons or circumstances, shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
12
15.13 CAPTIONS. Article and Section titles and captions
contained in this Agreement are inserted only as a matter of convenience and for
reference, and in no way define, limit, extend, or describe the scope of this
Agreement or the intent of any provision hereof.
15.14 IDENTIFICATION. Whenever the singular number is used in
this Agreement and when required by the context, the same shall include the
plural, and the masculine gender shall include the feminine and neuter genders.
15.15 CREDITORS. No provision of this Agreement shall be
construed for the benefit of or be enforceable by any creditor of the Company.
15.16 MEMBER'S AGE AND COMPETENCE. Notwithstanding any
contrary provision of this Agreement, no Member or assignee of the interest
thereof shall be a Person or organization prohibited by law from becoming such.
Any assignment of an interest in the Company to a Person or organization not
meeting such standard shall be void and ineffectual, and shall not bind the
Company.
ARTICLE 16
INDEMNIFICATION
16.1 LITIGATION BROUGHT BY THIRD PARTIES. The Company shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, formal or informal (other than
an action by or in the right of the Company) (an "Action") by reasons of the
fact that he or she is or was a manager, officer, employee or agent of the
Company (a "Company Person"), or is or was serving at the request of the Company
as a manager, officer, employee, agent, partner, trustee or member or in another
authorized capacity (collectively, an "Authorized Capacity") of or for another
corporation, unincorporated association, business trust, partnership, joint
venture, limited liability company, trust or other legal entity, whether or not
organized or formed for profit (collectively, "Another Entity"), against
expenses (including attorneys' fees), judgments, penalties, fines and amounts
paid in settlement actually and reasonably incurred by him or her in connection
with such Action ("Expenses") if he or she acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The termination of
any Action by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the Company, or, with
respect to any criminal action or proceeding, that the person had reasonable
cause to believe his or her conduct was unlawful.
16.2 LITIGATION BY OR IN THE RIGHT OF THE COMPANY. The
Company shall indemnify any person who was or is a party or is threatened to be
made a party to any action by or in the right of the Company to procure a
judgment in its favor by reason of the fact that he or she is or was a Company
Person, or was serving at the request of the Company in an Authorized
13
Capacity of or for Another Entity against Expenses actually and reasonably
incurred by him or her in connection with that defense or settlement of such
action if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Company, except
that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable for willful
negligence or misconduct in the performance of his or her duty to the Company
unless and only to the extent that a court of equity or the court in which such
action was pending shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
such court of equity or other court shall deem proper.
16.3 SUCCESSFUL DEFENSE..To the extent that a person who is or
was a Company Person or is or was serving in an Authorized Capacity of Another
Entity at the request of the Company and has been successful on the merits or
otherwise in defense of any action, referred to in Section 16.1 or 16.2 of this
Article, or in defense of any claim, issue or matter therein, he or she shall be
indemnified against Expenses actually and reasonably incurred by him or her in
connection therewith.
16.4 DETERMINATION OF CONDUCT. Any indemnification under
Section 16.1 or 16.2 of this Article (unless ordered by a court) shall be made
by the Company only upon a determination that indemnification of the person is
proper in the circumstances because he or she has met the applicable standard of
conduct set forth in said Section 16.1 or 16.2. Such determination shall be made
(a) by the Board of Managers by a majority vote of a quorum consisting of the
Managers not at the time parties to such action, suit or proceeding, or (b) by
special legal counsel, or (c) by the Member, provided, however, that interests
in the Company owned by or voted under the control of persons who are at the
time parties to such action, suit or proceeding may not be voted on the
determination.
16.5 ADVANCE PAYMENT.....The Company shall advance Expenses
reasonably incurred by any Company Person in any Action in advance of the final
disposition thereof upon the undertaking of such party to repay the advance
unless it is ultimately determined that such party is entitled to
indemnification hereunder, if (a) the indemnitee furnishes the Company a written
affirmation of his or her good faith belief that he or she has satisfied the
standard of conduct in Section 16.1 or 16.2 and (b) a determination is made by
those making the decision pursuant to Section 16.4 that the facts then known
would not preclude indemnification under this Article 16.
16.6 ARTICLE 16 NOT EXCLUSIVE. The indemnification provided by
this Article 16 shall not be deemed exclusive of any other rights to which any
person may be entitled under any agreement, vote of the Member or disinterested
managers, or otherwise, both as to action in his or her official capacity and as
to action in another capacity while holding such office, and shall continue as
to a person who has ceased to be a manager, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
16.7 INSURANCE. The Company may purchase and maintain
insurance on behalf of any person who is or was a Company Person or is or was
serving at the request of the Company in an Authorized Capacity of or for
Another Entity against any liability asserted against
14
him or her and incurred by him or her in any such capacity, or arising out of
his or her status as such, whether or not the Company would have the power to
indemnify him or her against such liability under the provisions of this Article
16 or the Indiana Business Corporation Law.
16.8 EFFECT OF INVALIDITY. The invalidity or unenforceability
of any provision of this Article 16 shall not affect the validity or
enforceability of the remaining provisions of this Article 16.
16.9 DEFINITION OF COMPANY. For purposes of this Article 16,
references to "the Company" shall include, in addition to the surviving or
resulting limited liability company, any constituent company (including any
constituent of a constituent) absorbed in a consolidation or merger.
16.10 CHANGE IN LAW. Notwithstanding the foregoing provisions
of Article 16, the Company shall indemnify any person who is or was a Company
Person or is or was serving at the request of the Company in an Authorized
Capacity of or for Another Entity to the full extent permitted by the Indiana
Business Corporation Law or by any other applicable law, as may from time to
time be in effect.
16.11 INDEMNIFICATION. The Company shall indemnify the Member
for all costs, losses, liabilities and damages paid or accrued by the Member or
its agent in connection with the business of the Company, to the fullest extent
provided or allowed by the laws of the State of Indiana.
15
IN WITNESS WHEREOF, the parties hereto being duly sworn, have
signed and acknowledged this instrument as of the day and year first above
written.
MEMBER: COMPANY:
PRIMARY ENERGY, INC. XXXXXXX LEASING LLC
______________________________ ______________________________
By: __________________________ By: __________________________
Its:__________________________ Its:__________________________
EXHIBIT A TO
XXXXXXX LEASING LLC OPERATING AGREEMENT
NAME, ADDRESS, TAXPAYER VALUE OF CASH AND PROPERTY CONTRIBUTED TO
IDENTIFICATION NUMBER DATE OF MEMBERSHIP CAPITAL
------------------------- ------------------ -----------------------------------------
Primary Energy, Inc. April 24, 2003 $1,000
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Tax I.D. #00-0000-000