OPERATING AGREEMENT for ALCOR CARE TRUST SUPPORTING ORGANIZATION (ACT), in cooperation with the ALCOR LIFE EXTENSION FOUNDATION (ALCOR) and the ALCOR PATIENT CARE TRUST (PCT)
[Ratified unanimously October 11, 2017]
The ALCOR CARE TRUST SUPPORTING ORGANIZATION (“ACT”) was created by a Trust Agreement on June 6, 2016 and approved on June 20, 2017 as a tax-exempt organization under Internal Revenue Service (IRC) section 501(c)(3), and specifically as a Type II supporting organization under the IRC Section 509(a)(3). The ACT is organized, and at all times hereafter shall be operated, exclusively for the benefit of, to perform the functions of, or to carry out the purposes of, the following charitable organization or any successor organization: ALCOR LIFE EXTENSION FOUNDATION (“Alcor”), Scottsdale, AZ, EIN: 23-7154039
The ACT was created by Alcor and the Alcor Patient Care Trust (“PCT”), a Trust established as part of Alcor on May 4, 1997 and amended on May 2, 1999. The PCT Trust Agreement in Article TENTH (a) authorizes the PCT Trust Board “to form any other separate legal entities to hold title to the assets of the Trust in order to carry out the substantive provisions of this Agreement.” The initial ACT Board of Trustees consisted of five individual Trustees elected by Alcor’s Board of Directors.
FIRST: Scope of Agreement
This Operating Agreement governs the normal activity of the ACT and delineates the relationship between the ACT, Alcor, and the PCT. Nothing in this Operating Agreement shall take precedence over the legal documents which authorize and govern each entity: the Articles of the Trust Agreement for the Alcor Care Trust Supporting Organization, the Articles of the Alcor Patient Care Trust Agreement, and the Articles of Incorporation and Bylaws of Alcor. Any act which would adversely affect the tax-exempt status of Alcor or of the ACT shall be prohibited notwithstanding any provisions in this Agreement inconsistent therewith. Furthermore, to the extent that any provision within this Operating Agreement is inconsistent with any provision within the Trust Agreement for the ACT, the Trust Agreement will govern.
SECOND: Purpose of the Trust
The Alcor Care Trust shall be for the exclusive non-profit scientific research and educational purpose of providing care for individuals (hereinafter called “Patients”) who have been placed into cryopreservation or other forms of biostasis as long-term research donors by Alcor until such future time as it may be possible to repair and revive them to such a condition as will allow them to be considered legally alive, functional, and independent. This applies both to those Patients currently held in biostasis at Alcor and to those Patients who may be placed into biostasis after the ACT has been established.
THIRD: Creation of the ACT Trust Estate
By the terms of a separate signed Agreement, the PCT has transferred certain funds and other assets to the ACT. Those funds, the proceeds of those funds, all additional funds or assets received by the ACT from the PCT, Alcor, or from any other person or source, and all investments or reinvestments thereof, are collectively referred to as the “ACT Trust Estate.”
FOURTH: Duties of the ACT and Investment of the ACT Trust Estate
The primary goal of the ACT is to support Alcor by ensuring that the investments of the Trust Estate are, at minimum, enough to enable the amount of principal plus capital gains plus investment income to cover the expenses of keeping the Patients in biostasis for as many years as may be necessary to provide for their resuscitation and rehabilitation. In order to do this, it is the specific charge of the ACT to invest the Trust Estate in such a manner as to maximize growth while minimizing risk. The ACT Trust Estate shall be held and disposed as follows:
(a) The investment of the Trust Estate shall be solely the responsibility of the ACT and its financial advisors and managers. The Alcor Board of Directors and the PCT Trustees may offer suggestions and advice for investments.
(b) In addition to the goal of covering the expenses of keeping the Patients in biostasis, the ACT shall attempt to accumulate enough funds in the ACT Trust Estate to eventually pay for the successful resuscitation and rehabilitation of the Patients once such action is possible. At such time as Alcor deems that resuscitation and rehabilitation of the Patients is feasible, the ACT shall expend whatever amounts of money are necessary to resuscitate the Patients and reintroduce them to society, as long as on-going care of the Patients remaining in biostasis is not endangered. It is the intent of this Agreement that such resuscitation and rehabilitation proceed in such manner that ongoing Trust Estate earnings reasonably can be predicted to provide for the eventual resuscitation and rehabilitation of all Patients.
(c) Since the successful resuscitation and rehabilitation of the Patients will require new scientific discoveries and the development of new technologies in many fields, a secondary goal for the investment of the Trust Estate is to allow for grants or investments which will support research in those relevant sciences and technologies. To support this goal, the ACT Trustees may create a separate Resuscitation and Rehabilitation Research Account within the ACT. This Research Account may be a bookkeeping account or a physically separate account or a combination of the two.
(d) The ACT may fund such research from the Research Account, when and if acceptable research proposals are offered by Alcor or by others, provided such funding is also approved by (1) the PCT Board of Trustees and (2) the Alcor Board of Directors or a Research Committee authorized to make such decisions on Alcor’s behalf.
(e) At the end of each fiscal year, Alcor management, the PCT Board, and the ACT Board shall jointly determine the total amount of Patient Care expenses for the year and determine what percentage they are of the total amount of Assets Under Management (AUM) plus the amount of cash held by the PCT at the end of the year.
(f) At the end of any fiscal year the ACT may make a contribution to the Research Account, provided that: (1) ACT capital gains and investment income for the year have exceeded 5% of the AUM, (2) the sum of said contribution plus the total patient care costs for that year are no greater than 2% of the total of the ACT AUM and the PCT cash accounts, and (3) the annual patient care costs for each of the preceding 3 years were 2% or less of the ACT AUM plus PCT cash accounts for each year.
(g) If at any time the ACT Board of Trustees deems that the non-research part of the Trust Estate is not sufficient to support the Patients in biostasis, funds may be transferred out of the Research Account to the non-research account.
(h) If the PCT does not have the funds necessary to make a payment to Alcor or other entity for which the PCT is responsible, the ACT shall transfer enough funds to the PCT so that the payment can be made.
(i) In accordance with Article 12.6 of the ACT Trust Agreement, the ACT shall pay all reasonable expenses necessary to achieve the purposes of the Trust, including accounting and legal services on behalf of the Trust, as well as other ancillary services and expenses required for the business of the Trust.
FIFTH: Duties of Alcor
Duties of Alcor, in addition to the duties listed in the Alcor Patient Care Trust Agreement, ARTICLE SIXTH, include:
(a) Selection of Alcor Directors who will be available to serve as replacement ACT Trustees, as may be required.
SIXTH: Duties of PCT
Duties of the PCT, in addition to the duties listed in the Alcor Patient Care Trust Agreement, ARTICLE NINTH, include:
(a) The PCT shall retain enough cash in its accounts to pay the estimated ongoing Patient Care expenses submitted by Alcor. However, if the PCT does not have the funds necessary to make a payment to Alcor or other entity for which the PCT is responsible, the PCT shall request the ACT to transfer the necessary funds to the PCT.
(b) The PCT shall at least once a year disburse to the ACT the amount of funds that are greater than required for expected payment of Patient Care expenses billed by Alcor. This may be done at the end of the year or at such other times as the PCT may deem necessary or desirable.
(c) At any time that the PCT has a meeting of the PCT Trustees, the PCT shall invite all ACT Trustees to attend the meeting.
SEVENTH: Election and Term of the ACT Trustees
(a) There shall be five ACT Trustees. All Trustees must be Cryopreservation Members of Alcor. Three and only three individual Trustees shall be members of Alcor’s Board of Directors. At least three of the individual Trustees should be related to or have had a significant personal involvement (such as a spouse or similar long-term companion) with an Alcor biostasis Patient. Replacement and re-appointment ACT Trustees are elected by the remaining ACT Trustees (pursuant to the ACT Trust Agreement, Article 12, paragraph 8).
(b) No individual Trustee may be an employee of Alcor or receive compensation from the ACT, the PCT, or from Alcor, except for those benefits available to any Alcor member or as otherwise expressly provided herein or in the ACT Trust Agreement.
(c) Alcor shall be responsible for continuing to select at least three Alcor Directors who are available to serve as ACT Trustees. These Alcor Directors shall subsequently be approved by the ACT Trustees (pursuant to the Trust Agreement for the ACT, Article 12, Paragraph 8).
(d) Each Trustee, including the Alcor Director Trustees, shall be elected for a 5 year term. Initially these terms will be staggered at one-year intervals so that no more than one Trustee will normally come up for re-appointment in any one year. If a Trustee resigns or is removed, the replacement Trustee shall fill out the term of the Trustee being replaced. Trustee reappointment elections shall take place in September, at a date subsequent to the annual election of Alcor Directors.
(e) Once this Operating Agreement takes effect, the ACT Trustees shall assign each Trustee to an initial staggered term.
(f) There may be a situation where three appropriate Trustees cannot be found who have a significant personal involvement with an Alcor biostasis patient. In such a case, the Trustees may appoint a Trustee without such personal involvement. Such Trustee shall serve a one-year term. There is no limit on the number of one-year terms such Trustee may serve.
(g) If an individual Trustee’s Cryopreservation agreement with Alcor is cancelled, or if an individual Trustee who is not an Alcor Director representative is elected a Director of the Alcor Board when there are already three Trustees who are Alcor Directors, or if an individual Trustee who is an Alcor Director representative resigns from or is removed from the Alcor Board, that individual Trustee also will be deemed to have resigned his/her position as ACT Trustee at the same time.
(h) No more than two persons may serve as both an ACT Trustee and as a PCT Trustee.
EIGHTH: Officers of ACT Board of Trustees
(a) The ACT Trustees shall elect a Chairperson, Treasurer, and Secretary. No person shall hold more than one of these offices. Elections of officers may be held as necessary, with no fixed term. An election for the position of any or all officers may be called by a majority vote of the individual Trustees at a regularly scheduled or special meeting. Duties of these officers may be as determined by the ACT Trustees, except that: (1) The Secretary shall keep the minutes of meetings and shall certify the decisions of the ACT Trustees as required. (2) The Chairperson and the Treasurer shall be signatories on all ACT accounts. Checks under $2,000 may be signed by any one Trustee, Trust administrator, or Trust staff member designated as a signatory by the ACT Trustees. Any checks over $2,000 must be signed by two signatories, one of which must be the Chairperson or the Treasurer.
(b) Upon the resignation, removal, or death of an officer, the Trustees shall within seven (7) days elect a replacement officer, even if no replacement Trustee has yet been selected.
(c) The Trustees may create other offices or committees as needed.
NINTH: Conduct of ACT Meetings
(a) The ACT Trustees shall meet at least quarterly to discuss the business of the ACT. Meetings by telephone or other means of communication by which all Trustees participating may simultaneously hear each other during the meeting are permitted, unless legal prohibitions exist. Special meetings may be held with 48 hours notice to all individual Trustees from the Secretary or Chairman of the ACT Board of Trustees by telephone, e-mail, or other technology that may be approved by the ACT Trustees.
(b) All PCT Trustees shall be invited to attend meetings of the ACT Board of Trustees. Meetings of the ACT Board of Trustees and PCT Board of Trustees shall be joint meetings provided that both Boards have a quorum and both Boards gave proper meeting notice to their respective Board. Minutes of joint meetings must be filed for both the ACT and the PCT.
(c) A quorum shall consist of three (3) individual Trustees, which must include at least one non-Alcor Director Trustee. No votes shall be taken at any meeting at which a quorum is not present, except that three Trustees may vote to fill a vacant Trustee position, even if all three are also Alcor Directors. If a quorum is lost during the course of a meeting, the meeting must be adjourned until such time as a quorum is present or until the next scheduled meeting.
(d) Except as otherwise specifically provided, the decision of a majority of the individual Trustees shall control; however, a minimum of three assenting votes are required to pass any action, no matter how many individual Trustees are present. A dissenting individual Trustee shall have no liability for participating in or carrying out acts of the controlling individual Trustees.
(e) Any action at a meeting which requires the unanimous approval of the ACT Trustees requires the assent of all individual Trustees. Unless all individual Trustees are present, no unanimous approval may be obtained.
(f) Any action required or permitted to be taken by the ACT Trustees may be taken without a meeting, if all individual Trustees shall individually or collectively consent to such action in writing or by electronic mail or by other technology that may be approved by the ACT Trustees. Such written consent or consents shall be filed with the minutes of the proceedings of the ACT Trustees. Such action by written consent shall have the same force and effect as a unanimous vote of the ACT Trustees. Any certification or other document filed under the provisions of law which relates to action so taken shall state that the action was taken by the unanimous consent of the ACT Trustees without a meeting and that the ACT Operating Agreement authorizes the ACT Trustees to so act, and such statement shall be prima facie evidence of such authority.
TENTH: Termination of Trust
The ACT shall be governed by the provisions of Article “SEVENTEENTH: Termination of Trust” in the Alcor Patient Care Trust Agreement, as may be modified by “Article 9: DISSOLUTION” in the Trust Agreement for the ACT. In addition, the ACT may be terminated when the ACT Trust Estate has zero assets and the ACT Trustees vote to terminate the ACT.
ELEVENTH: Reduction of the ACT Trust Estate
The ACT shall be governed by the provisions of Article “EIGHTEENTH: Reduction of Trust Estate” in the Alcor Patient Care Trust Agreement.
TWELFTH: Amendment of this Agreement
This Agreement may be amended by a 4/5 vote each of the Alcor Board of Directors, the PCT Board of Trustees, and the ACT Board of Trustees. The purpose of the ACT, as described in Article SECOND, shall not be changed.
THIRTEENTH: Captions and Gender
The number used on any Article, Paragraph, or subparagraph, or the heading of any Article, Paragraph, or subparagraph of this Agreement is for convenient reference only and is not to be construed as affecting the meaning expressed herein. In addition, whenever the context requires or admits, the gender and number of words shall be interchangeable.
FOURTEENTH: Governing Law
This Agreement shall be governed by the laws of the State of Arizona and in any conflict between the parties to this Agreement the laws of Arizona shall prevail.
Alcor: The Alcor Life Extension Foundation or any successor organization and the decisions of its Board of Directors, Officers, or other person in authority.
Cryopreservation: The experimental practice of maintaining Patients currently classified as legally “dead” at extremely low temperatures for possible treatment by future medicine.
Biostasis: Complete arrest of biological activity. Cryopreservation is one form of biostasis.
Patient: An individual in biostasis who is under the care and custody of Alcor Life Extension Foundation.
Patient Care: The ongoing activities required to maintain Patients in biostasis.
Cryopreservation Member: An individual who has made the legal and financial arrangements with Alcor Life Extension Foundation for cryopreservation or other form of biostasis, but who has not yet entered biostasis.
Cryopreservation Funding: The money or other assets donated to Alcor at the time a Cryopreservation Member enters biostasis and becomes a Patient. A portion of this funding is reserved for Patient Care expenses.
Resuscitation: The anticipated future processes of repairing Patients to such condition as will allow them to be considered legally alive, functional, and independent.