Liabilities; Indemnification. 13 (a) No Member or Manager of the Company, or any combination of the foregoing, 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 such liability or obligation arises in contract, tort or otherwise, solely by reason of being a Member or Manager of the Company or any combination of the foregoing. (b) The Company shall indemnify, defend and hold harmless each Member and Manager, and their respective directors, officers, employees, agents and attorneys from and against any and all third party losses, claims, damages and liabilities arising out of or relating to (i) the Company or the Operations, including without limitation Environmental Liabilities and Continuing Obligations,14 (ii) any Properties assigned to a Member as an objecting Member 12 The second sentence of Section 4.8 was inserted to restrict duties to those set forth in the Modest Form consistent with DLLCA § 18-1101(a). See Modest Form Paper, § 13.05[1]. 13 This new Section 4.9 and the revisions to Section 6.6 constitute a proposal to reconcile various perceived inconsistencies regarding the complex allocation of risk scheme in Form 5, Form 5A and Form 5A LLC. See Modest Form Paper, § 13.05[2]-[3]. 14 The definitions “Environmental Liabilities,” “Environmental Laws” and “Continuing Obligations” are not present in Form 5, but instead are incorporated from Form 5A and Form 5A LLC. The Modest Form does not, pursuant to Section 14.1, but only to the extent arising out of or relating to Operations, including without limitation Environmental Liabilities and Continuing Obligations, conducted prior to the date of such assignment, and (iii) any reimbursements by one Member to the other Member or Manager of any of the foregoing pursuant to Section 6.6, except in any case of clauses (i) through (iii) above to the extent such losses, claims, damages or liabilities arise out of or result from any conduct described in any of clauses (i) through (iii) of Section 4.9(c) below. In all cases of this Section 4.9(b) and without limiting Section 6.6, indemnification shall be provided only out of and to the extent of the net assets of the Company and no Member shall have any personal liability whatsoever on account thereof. Notwithstanding the foregoing, the Company’s indemnification pursuant to this Section 4.9(b) as to third party claims shall be only with respect to such loss, liability or damage that is not otherwise compensated by insurance carried for the benefit of the Company. (c) Subject to Section 4.8, each Member shall indemnify, defend and hold harmless [the Company,15] the other Member, and such other Member’s directors, officers, employees, agents and attorneys from and against any and all losses, claims, damages and liabilities arising out of or relating to (i) any unauthorized act or any assumption of liability by the indemnifying Member (including in its capacity as a Manager), or any of its directors, officers, employees, agents and attorneys done or undertaken, or apparently done or undertaken, on behalf of the Company or the other Member, except pursuant to the authority expressly granted herein or as otherwise agreed in writing between the Members, (ii) any breach by such Member of any of its representations or warranties set forth in this Agreement or (iii) any breach by such Member of any covenant contained in this Agreement caused by or attributable to such Member’s willful misconduct or gross negligence, including in its capacity as a Manager. (d) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NO PERSON OR ENTITY OTHER THAN A MEMBER SHALL HAVE THE RIGHT TO ENFORCE ANY REPRESENTATION OR WARRANTY OF A MEMBER HEREUNDER, OR ANY OBLIGATION OF A MEMBER TO CONTRIBUTE CAPITAL HEREUNDER, TO FUND CONTINUING OBLIGATIONS, TO REIMBURSE OR INDEMNIFY ANY OTHER MEMBER HEREUNDER, AND SPECIFICALLY NEITHER THE COMPANY NOR ANY LENDER OR OTHER THIRD PARTY SHALL HAVE ANY SUCH RIGHTS, IT BEING EXPRESSLY UNDERSTOOD THAT THE REPRESENTATIONS AND WARRANTIES, AND THE CONTRIBUTION, REIMBURSEMENT AND INDEMNIFICATION OBLIGATIONS SET FORTH IN ARTICLES II AND XIII AND however, include the significantly revised scheme for allocating environmental risk between the parties that was adopted in Form 5A and Form 5A LLC. The inclusion of the environmental definitions from Form 5A LLC is merely intended to clarify what liabilities are covered by the allocation present in Form 5. The Modest Form also includes Form 5A provisions in Sections 8.2(p), (q) and (r) providing for the establishment of an environmental compliance fund and the satisfaction by the Company of its Environmental Liabilities and Continuing Obligations, and other provisions regarding environmental compliance, which the authors viewed as desirable and non- controversial. See Modest Form Paper, § 13.04[3]. 15 The Company is a beneficiary of this indemnity because otherwise the entire economic interest in the LLC of the member to be indemnified remains at risk if claims for which one member should be solely liable are brought against the LLC. The parties may prefer to exclude the Company from the indemnity and have their investment in the LLC at risk for actions of the other member. SECTIONS 5.1, 5.2, 5.3, 6.4, 6.6, 6.7, 9.7, 9.8, 10.2, 10.3 AND 12.5 SHALL BE ENFORCEABLE ONLY BY A MEMBER AGAINST ANOTHER MEMBER (WHICH, NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, ARE IN ALL SUCH CASES FOR THE BENEFIT OF THE MEMBERS). FOR THE AVOIDANCE OF DOUBT, THE COMPANY SHALL BE BOUND BY ARTICLES II AND XIII AND SECTIONS 5.1, 5.2, 5.3, 6.4, 6.6, 6.7, 9.7, 9.8, 10.2, 10.3 AND 12.5, BUT SHALL HAVE NO RIGHT TO ENFORCE THOSE PROVISIONS AGAINST A MEMBER, SUCH RIGHTS BEING EXCLUSIVELY VESTED IN THE MEMBERS. [ANY MEMBER MAY BRING A DIRECT ACTION AGAINST ANY OTHER MEMBER WITH RESPECT TO ANY OF ARTICLES II OR XIII OR SECTIONS 5.1, 5.2, 5.3, 6.4, 6.6, 6.7, 9.7, 9.8, 10.2, 10.3 OR 12.5 WITHOUT THE REQUIREMENT TO BRING A DERIVATIVE ACTION OR OTHERWISE SATISFY THE REQUIREMENTS OF SECTIONS 18-1001 THROUGH 18-1004 OF THE ACT OR OTHER SIMILAR REQUIREMENTS.]
Appears in 1 contract
Sources: Limited Liability Company Agreement
Liabilities; Indemnification. 13
(a) No Member or Manager of the Company, or any combination of the foregoing, 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 such liability or obligation arises in contract, tort or otherwise, solely by reason of being a Member or Manager of the Company or any combination of the foregoing.
(b) The Company shall indemnify, defend and hold harmless each Member and Manager, and their respective directors, officers, employees, agents and attorneys from and against any and all third party losses, claims, damages and liabilities arising out of or relating to
to (i) the Company or the Operations, including without limitation Environmental Liabilities and Continuing Obligations,14 (ii) any Properties assigned to a Member as an objecting Member 12 The second sentence of Section 4.8 was inserted to restrict duties to those set forth in the Modest Form consistent with DLLCA § 18-1101(a). See Modest Form Paper, § 13.05[1]. 13 This new Section 4.9 and the revisions to Section 6.6 constitute a proposal to reconcile various perceived inconsistencies regarding the complex allocation of risk scheme in Form 5, Form 5A and Form 5A LLC. See Modest Form Paper, § 13.05[2]-[3]. 14 The definitions “Environmental Liabilities,” “Environmental Laws” and “Continuing Obligations” are not present in Form 5, but instead are incorporated from Form 5A and Form 5A LLC. The Modest Form does not, pursuant to Section 14.1, but only to the extent arising out of or relating to Operations, including without limitation Environmental Liabilities and Continuing Obligations, conducted prior to the date of such assignment, and (iii) any reimbursements by one Member to the other Member or Manager of any of the foregoing pursuant to Section 6.6, except in any case of clauses
clauses (i) through (iii) above to the extent such losses, claims, damages or liabilities arise out of or result from any conduct described in any of clauses (i) through (iii) of Section 4.9(c) below. In all cases of this Section 4.9(b) and without limiting Section 6.6, indemnification shall be provided only out of and to the extent of the net assets of the Company and no Member shall have any personal liability whatsoever on account thereof. Notwithstanding the foregoing, the Company’s indemnification pursuant to this Section 4.9(b) as to third party claims shall be only with respect to such loss, liability or damage that is not otherwise compensated by insurance carried for the benefit of the Company.
(c) Subject to Section 4.8, each Member shall indemnify, defend and hold harmless [the Company,15] the other Member, and such other Member’s directors, officers, employees, agents and attorneys from and against any and all losses, claims, damages and liabilities arising out of or relating to (i) any unauthorized unauthorized* act or any assumption of liability by the indemnifying *Member (including in its capacity as a Manager)*, or any of its directors, officers, employees, agents and attorneys done or undertaken, or apparently done or undertaken, on behalf of the *Company or the other Member, except pursuant to the authority expressly granted herein or as otherwise agreed in writing between the Members, (ii) any breach by such Member of any of its representations or warranties set forth in this Agreement or (iii) any breach by such Member of any covenant contained in this Agreement caused by or attributable to such Member’s willful misconduct or gross negligence, including in its capacity as a Manager.
(d) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NO PERSON OR ENTITY OTHER THAN A MEMBER SHALL HAVE THE RIGHT TO ENFORCE ANY REPRESENTATION OR WARRANTY OF A MEMBER HEREUNDER, OR ANY OBLIGATION OF A MEMBER TO CONTRIBUTE CAPITAL HEREUNDER, TO FUND CONTINUING OBLIGATIONS, TO REIMBURSE OR INDEMNIFY ANY OTHER MEMBER HEREUNDER, AND SPECIFICALLY NEITHER THE COMPANY NOR ANY LENDER OR OTHER THIRD PARTY SHALL HAVE ANY SUCH RIGHTS, IT BEING EXPRESSLY UNDERSTOOD THAT THE REPRESENTATIONS AND WARRANTIES, AND THE CONTRIBUTION, REIMBURSEMENT AND INDEMNIFICATION OBLIGATIONS SET FORTH IN ARTICLES II AND XIII AND however, include the significantly revised scheme for allocating environmental risk between the parties that was adopted in Form 5A and Form 5A LLC. The inclusion of the environmental definitions from Form 5A LLC is merely intended to clarify what liabilities are covered by the allocation present in Form 5. The Modest Form also includes Form 5A provisions in Sections 8.2(p), (q) and (r) providing for the establishment of an environmental compliance fund and the satisfaction by the Company of its Environmental Liabilities and Continuing Obligations, and other provisions regarding environmental compliance, which the authors viewed as desirable and non- controversial. See Modest Form Paper, § 13.04[3]. 15 The Company is a beneficiary of this indemnity because otherwise the entire economic interest in the LLC of the member to be indemnified remains at risk if claims for which one member should be solely liable are brought against the LLC. The parties may prefer to exclude the Company from the indemnity and have their investment in the LLC at risk for actions of the other member. SECTIONS 5.1, 5.2, 5.3, 6.4, 6.6, 6.7, 9.7, 9.8, 10.2, 10.3 AND 12.5 SHALL BE ENFORCEABLE ONLY BY A MEMBER AGAINST ANOTHER MEMBER (WHICH, NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, ARE IN ALL SUCH CASES FOR THE BENEFIT OF THE MEMBERS). FOR THE AVOIDANCE OF DOUBT, THE COMPANY SHALL BE BOUND BY ARTICLES II AND XIII AND SECTIONS 5.1, 5.2, 5.3, 6.4, 6.6, 6.7, 9.7, 9.8, 10.2, 10.3 AND 12.5, BUT SHALL HAVE NO RIGHT TO ENFORCE THOSE PROVISIONS AGAINST A MEMBER, SUCH RIGHTS BEING EXCLUSIVELY VESTED IN THE MEMBERS. [ANY MEMBER MAY BRING A DIRECT ACTION AGAINST ANY OTHER MEMBER WITH RESPECT TO ANY OF ARTICLES II OR XIII OR SECTIONS 5.1, 5.2, 5.3, 6.4, 6.6, 6.7, 9.7, 9.8, 10.2, 10.3 OR 12.5 WITHOUT THE REQUIREMENT TO BRING A DERIVATIVE ACTION OR OTHERWISE SATISFY THE REQUIREMENTS OF SECTIONS 18-1001 THROUGH 18-1004 OF THE ACT OR OTHER SIMILAR REQUIREMENTS.]
Appears in 1 contract
Sources: Limited Liability Company Agreement