JOINT VENTURE AGREEMENT
BETWEEN
FLORIDA ROCK INDUSTRIES, INC.
AND
FLORIDA ROCK PROPERTIES, INC.
(a subsidiary of Patriot Transportation Holding, Inc.)
DATED AS OF OCTOBER 4, 2006
TABLE OF CONTENTS Page
SECTION 1 FORMATION OF JOINT VENTURE 1
1.1 Formation 1
1.2 Members and Percentage Interests 2
1.3 Purpose 2
1.4 Principal Office 2
1.5 Unified Agreement 2
SECTION 2 CAPITAL CONTRIBUTIONS TO JOINT VENTURE 2
2.1 Initial Capital Contributions 2
2.2 Method of Making Initial Capital Contributions 3
2.3 Capital Accounts 3
2.4 No Right to Interest on Capital Contributions or to
Withdraw or Withdraw One's Capital Contributions 4
2.5 Additional Capital Contributions or Loans 4
SECTION 3 ADDITIONAL TRANSACTIONS 5
3.1 Xxxxxxxxx Property Acquisition Expenses 5
3.2 Brooksville Mining 5
3.3 Additional Property 5
SECTION 4 GOVERNANCE 5
4.1 Management Committee 5
4.2 Appointment and Tenure of the Committee Members 6
4.3 Meetings of the Management Committee 6
4.4 Business Plan 6
4.5 Officers of the Company 7
4.6 Approval Rights of FRP and FRK 7
4.7 Other Activities of Members and Committee Members 8
4.8 Salaries of Committee Members 8
SECTION 5 BUYOUT EVENTS AND TRANSFERS 8
5.1 Put and Call Buy-Sell 8
5.2 Right of First Refusal 9
5.3 Power of Attorney 10
SECTION 6 DISTRIBUTIONS 10
6.1 General 10
6.2 Liquidating Distributions 10
6.3 Limitations of Distributions 10
6.4 Return of Capital 10
SECTION 7 ALLOCATIONS 10
7.1 Allocations of Profits and Losses Among the Members 10
7.2 Special Allocations 11
7.3 Curative Allocations 12
7.4 Other Allocation Rules 12
7.5 Section 704(c) Allocations 13
TABLE OF CONTENTS
(continued) Page
SECTION 8 FEDERAL AND STATE TAX MATTERS 13
8.1 Tax Year and Accounting Matters 13
8.2 Tax Elections 13
8.3 Tax Matters Partner 14
SECTION 9 INDEMNIFICATION 14
9.1 Indemnification 14
9.2 Advances 14
SECTION 10 DISSOLUTION OF THE COMPANY 15
10.1 Events of Dissolution 15
10.2 Liquidating Distributions 15
SECTION 11 MISCELLANEOUS PROVISIONS 15
11.1 Representations and Warranties of Members 15
11.2 Amendment 16
11.3 Construction 16
11.4 Severability 16
11.5 Burden and Benefit Upon Successors 16
11.6 Further Assurances 16
11.7 Notices 16
11.8 Waiver 16
11.9 Company Property 17
11.10 Counterparts 17
11.11 No Third Party Beneficiary 17
11.12 Governing Law 17
11.13 Survival 17
11.14 Counsel Fees 17
11.15 Entire Agreement 17
11.16 No Agency Relationship 17
11.17 Dispute Resolution 17
List of Schedules and Exhibits Section Reference
------------------------------ -----------------
Schedule 1 --Definitions Preamble (Page 1)
Schedule 2 - Description of Brooksville Property Page 1
Schedule 3 - Permitted Encumbrances Schedule 1 (Page
S1-6)
Schedule 4.1 - Initial Management Committee Members Section 4.1
Exhibit A - Certificate and Plan of Merger Section 2.2(c)
JOINT VENTURE AGREEMENT
This Joint Venture Agreement (this "Agreement") is made and
entered into effective as of the 4th day of October, 2006 (the
"Effective Date") by and among Florida Rock Industries, Inc., a
Florida corporation ("FRK"), and Florida Rock Properties, Inc.
("FRP"), a Florida corporation and wholly owned subsidiary of Patriot
Transportation Holding, Inc. ("Patriot"). FRK and FRP are
collectively referred to herein as "Party" or "Parties." Capitalized
terms used in this Agreement shall have the meanings specified in
Schedule 1 to this Agreement.
BACKGROUND
A. FRP owns 3,443 acres of land located in the Brooksville, Florida
area (the "FRP Property"). FRK has a leasehold interest in the FRP
Property pursuant to a long term lease between FRP and FRK pursuant
to which FRI potentially has the right, upon exercising renewal
options, to use and mine the FRP Property for up to the next 86 years
(the "FRK Brooksville Leasehold Interest").
B. FRK owns 553 acres of land located adjacent to the FRP Property
(the "FRK Property"). FRK also owns an additional 288 acre parcel
that it recently acquired through its wholly owned subsidiary, FRK
Brittle Road LLC (the "Xxxxxxxxx Property"). The FRP Property, the
FRK Property and the Xxxxxxxxx Property are collectively referred to
herein as the "Brooksville Property." The Brooksville Property is
more specifically described in Schedule 2.
C. FRK and FRP have determined, based on their analysis of various
factors, that the Brooksville Property is more valuable as
development property than as mining property.
D. At present, however, FRP cannot develop the FRP Property or sell
the FRP Property to a third party for development due to the FRK
Brooksville Leasehold Interest; likewise, FRK cannot develop the FRP
Property under the terms of the existing lease.
E. Accordingly, the independent directors of FRK and Patriot have
determined that it is in the best interests of each Party to enter
into this Agreement to establish a joint venture (the "Joint
Venture") to pursue the development and/or sale of the Brooksville
Property.
F. In connection with entering into this Agreement, the Parties
have agreed to amend certain lease agreements between FRK and FRP
relating to properties other than the Brooksville Property.
AGREEMENT
In consideration of the foregoing recitals which are hereby
incorporated as a part of this Agreement, the mutual covenants and
agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound, hereby
agree as follows:
SECTION 1
FORMATION OF JOINT VENTURE
1.1 Formation. The Parties hereby agree to form, organize and
capitalize a new limited liability company (the "Company") under the
provisions of the Florida Limited Liability Company Act (the "Act")
and in accordance with the terms of this Agreement. The business of
the Joint Venture shall be conducted through the Company. The name of
the Company shall be Brooksville Quarry, LLC.
1.2 Members and Percentage Interests. FRK and FRP each shall
have a 50% Membership Interest in the Company.
1.3 Purpose. The purpose of the Company is (a) to develop and/or
sell the Brooksville Property (the "Project") and to conduct such
other lawful activities as are reasonably necessary or useful to the
furtherance of the Project, and (b) to conduct any other lawful
business of the Joint Venture as the Board may determine from time to
time. The Company shall have all powers of a limited liability
company under the Act and the power to do all things necessary or
convenient to operate its business and accomplish its purpose.
1.4 Principal Office. The initial principal office of the Company
shall be 000 Xxxx 00xx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000. The
Company may relocate the principal office and have such additional
offices as the Board may deem advisable.
1.5 Unified Agreement. This Agreement sets forth the terms of the
Joint Venture and serves as the Operating Agreement of the Company.
SECTION 2
CAPITAL CONTRIBUTIONS TO JOINT VENTURE
2.1 Initial Capital Contributions. Concurrently with the execution
of this Agreement, each Member shall make the Capital Contributions
described below (the "Initial Capital Contributions") to the Company
in exchange for a 50% Membership Interest in the Company:
Member Initial Capital Percentage
------ Contribution Interest
------------ --------
Florida Rock the FRK Property 50%
Industries, Inc.
the FRK Brooksville
Leasehold Interest
the Xxxxxxxxx Property
Florida Rock the FRP Property 50%
Properties, Inc. (subject to reserved
right to royalties as
described in Section
3.2)
50% of the Xxxxxxxxx
Acquisition Costs
Each such asset to be contributed shall be contributed free and
clear of any liens and encumbrances whatsoever, except for Permitted
Encumbrances. For purposes of calculating Capital Accounts, each
Member shall be credited with an initial Capital Contribution based
on the fair market value of the assets contributed as determined
after the closing.
2.2 Method of Making Initial Capital Contributions.
(a) FRK shall contribute its entire fee interest in the FRK
Property and the FRK Brooksville Leasehold Interest to a newly formed,
wholly owned, single member limited liability company organized under
the Act ("FRK Newco"), which company shall also hold the fee interest
in the Xxxxxxxxx Property.
(b) FRP shall contribute its entire fee interest in the FRP
Property and an amount equal to fifty percent (50%) of the costs incurred
by FRK and FRK Newco in the acquisition of the Xxxxxxxxx Property
("Xxxxxxxxx Acquisition Expenses") to a newly formed, wholly owned,
single member limited liability company organized under the Act ("FRP
Newco").
(c) Following the transactions described in Sections 2.2(a)
and 2.2(b), FRK Newco shall be merged with and into FRP Newco in a merger
(the "Merger") in which FRP Newco is the surviving entity (the
"Surviving Entity"), pursuant to the Certificate and Plan of Merger
attached hereto as Exhibit A. The Surviving Entity also is referred
to in this Agreement as the "Company."
(d) As a result of the Merger, (i) the Articles of Organization
of FRP Newco shall be amended to change the name of the Surviving Entity
to Brooksville Quarry, LLC, (ii) this Agreement shall become the
Operating Agreement of the Surviving Entity, (iii) all assets,
properties, rights and privileges of FRK Newco and FRP Newco shall
become the assets, properties, rights and privileges of the Surviving
Entity, (iv) the membership interests of FRK in FRK Newco shall be
converted into a 50% Membership Interest in the Surviving Entity, (v)
all of the membership interests of FRP in FRP Newco shall become a
50% Membership Interest in the Surviving Entity, and (vi) all of the
managers and officers of FRP Newco, if any, shall be removed and
replaced by the Committee Members and officers designated pursuant to
this Agreement.
2.3 Capital Accounts. A single and separate Capital Account shall
be established for each Member, which shall initially be set at zero
and to which amounts will thereafter be credited or debited from time
to time in accordance with the following provisions:
(a) Each Member's Capital Account shall be credited by (i) such
Member's Initial Capital Contributions in the amount determined
pursuant to Section 2.1, (ii) such Members additional Capital
Contributions, (iii) the amount of Profits allocated to such Member
pursuant to Section 7.1 and any items in the nature of income or gain
specially allocated to such Member pursuant to Sections 7.2 and 7.3,
and (iv) the amount of any liabilities of the Company assumed by such
Member or secured by Property distributed to such Member.
(b) Each Member's Capital Account shall be debited by (i) the
aggregate amount of money and the Gross Asset Value of any Property
distributed to such Member, (ii) the amount of Losses allocated to
such Member pursuant to Section 7.1 and any items in the nature of
expenses or losses specially allocated to such Member pursuant to
Sections 7.2 and 7.3, and (iii) the amount of any liabilities of such
Member assumed by the Company or secured by Property contributed by
such Member to the Company.
(c) In determining the amount of any liability for purposes of
Section 2.3(a) and 2.3(b) above, there shall be taken into account
the provisions of Code Section 752(c) and any other applicable
provisions of the Code and Treasury Regulations, including, without
limitation, Treasury Regulation Section 1.704-1(b)(2)(iv)(c).
(d) If all or any portion of a Member's Membership Interest is
transferred, the transferee shall succeed to the Capital Account of
the assignor or transferor to the extent it relates to the
transferred Membership Interest.
(e) The foregoing provisions and other provisions of this
Agreement relating to the determination and maintenance of Capital
Accounts are intended to comply with Treasury Regulation Section
1.704-1(b), and shall be interpreted and applied in a manner consistent
with such Treasury Regulation. The Management Committee may modify or
adjust the manner in which the Capital Accounts, or any items of debits
or credits thereto, are computed in order to comply with such Treasury
Regulation, provided that such modifications or adjustments are not
likely to have a material effect on the amounts distributable to any
Member pursuant to Section 10.2 upon the dissolution of the Company.
2.4 No Right to Interest on Capital Contributions or to Withdraw or
Withdraw One's Capital Contributions. Except as otherwise provided
or contemplated herein, no Member shall (a) be paid interest on any
Capital Contributions, (b) have the right to resign, withdraw, or be
repaid all or any part of that Member's Capital Contributions, or (c)
have the right to receive, as a Distribution or return of capital,
any property of the Company other than cash or cash equivalents. No
Member shall be entitled to any Distribution, whether upon the
resignation or withdrawal of such Member from the Company or
otherwise, except as expressly provided in this Agreement.
2.5 Additional Capital Contributions or Loans.
(a) Funding Notices. The Company's Management Committee may
determine from time to time that the Company requires additional
funding from the Members in order to implement the Company's Business
Plan. In such case, the Management Committee will cause the Company
to give written notice (the "Funding Notice") to the Members stating
(i) the aggregate amount of additional funds required from the
Members (the "Additional Funding Amount"), (ii) each Member's Pro
Rata share of the Additional Funding Amount, (iii) whether the
Additional Funding Amount will be treated as Capital Contributions or
as loans from the Members to the Company, (iv) if the Additional
Funding Amount will be treated as loans, the terms of the loans, and
(v) the date or dates by which the Additional Funding Amount is to be
provided by the Members to the Company. Notwithstanding the
foregoing, without the approval of the Members, the Management
Committee shall not issue Funding Notices requiring the Members to
fund aggregate Additional Funding Amounts in excess of $2 million per
Member, exclusive of Initial Capital Contributions.
(b) Funding by Members. Each of the Members shall be obligated
to fund its Pro Rata share of the Additional Funding Amount in
immediately available funds in accordance with the terms of the
Funding Notice.
(c) Failure to Fund. If one Member (the "Funding Member")
funds its Pro Rata share of the Additional Funding Amount but the
other Member (the "Defaulting Member") fails to fund its Pro Rata share
by the date specified in the Funding Notice, the Company will give
written notice of non-payment to the Defaulting Member with a copy to
the Funding Member (the "Non-Payment Notice"). If the Defaulting
Member fails to cure such non-payment within thirty (30) days after
receipt of the Non-Payment Notice (a "Funding Default"), then the
Funding Member may elect to fund the amount not funded by the
Defaulting Member. In such event, the amount funded by the Funding
Member on behalf of the Defaulting Member (the "Funding Advance")
shall be deemed to be a loan by the Funding Member to the Defaulting
Member, repayable upon demand and bearing interest at the Interest
Rate. In addition, the Funding Default shall be deemed to be a
Triggering Event for purposes of Section 5.2. Each Member hereby
acknowledges that the Membership Interests are issued subject to, and
hereby affirms the
grant, to the other Member of a first priority
security interest in, such Member's Membership Interest for the
purpose of securing such Member's obligation to repay to the other
Member any Funding Advances made by the other Member and hereby
acknowledges that the other Member shall have all of the rights of a
secured party under the Uniform Commercial Code (the "UCC") enacted
in the state of Florida, including the right to bid for and purchase
such Member's Membership Interest at any sale conducted pursuant to
the UCC following such Member's default.
SECTION 3
ADDITIONAL TRANSACTIONS
3.1 Xxxxxxxxx Property Acquisition Expenses. Upon execution of
this Agreement, the Company shall reimburse to FRK fifty percent (50%)
of the Xxxxxxxxx Acquisition Expenses.
3.2 Brooksville Mining. Following the Merger, (i) FRK shall be
entitled to continue to conduct mining activities and to operate its
calcium products plant on the Brooksville Property (with respect to
the FRP Property, on and subject to all of the same terms as the
lease between FRK and FRP existing prior to the Merger (the "Prior
Mining Lease") except as described herein); (ii) at such time as such
operations physically interfere with development of the Brooksville
Property, the mining activities and calcium products plant shall be
relocated at FRK's expense to the area known as the XxXxxx Pit (167
acres in the Northwest corner of the Brooksville Property); (iii) FRK
will be permitted to operate at the XxXxxx Pit for a minimum of
fifteen (15) years, subject to two five year renewal options at FRK's
option; (iv) real estate taxes on the Brooksville Property for the
period after the effective date of the Merger shall be paid by the
Company; and (v) to the extent FRK mines on the FRP Property, FRK
will pay per ton royalties to the Company at the same rate as under
the Prior Mining Lease, but without any obligation to pay minimum
royalties. The Company shall distribute all such royalties to FRP
and shall specially allocate all such royalty income and associated
depletion deductions to FRP.
3.3 Additional Property. From time to time, based on analysis of
various factors, FRK and FRP may decide to contribute additional
properties to the Joint Venture for development. Upon agreement of
FRK and FRP, such additional properties (collectively, the
"Additional Property") shall be contributed to the Joint Venture.
The Committee Members shall develop a development plan and a business
plan for any such Additional Property, and such Additional Property
shall be developed and/or sold pursuant to the terms hereof.
Following contribution to the Joint Venture, such Additional Property
shall be deemed included within the term "Joint Venture Property."
SECTION 4
GOVERNANCE
4.1 Management Committee.
(a) The Company shall be managed by a management committee (the
"Management Committee"), which shall be comprised of four individuals
(the "Committee Members") designated as provided in Section 4.2. The
initial Committee Members, who shall serve until their successors are
selected, are listed on Schedule 4.1.
(b) Subject to the approval rights reserved to the Members (FRP
and FRK) specified in Section 4.6 and any other limitations expressly
contained in this Agreement, the Management Committee shall have
exclusive authority and full discretion with respect to the
management of the Company.
4.2 Appointment and Tenure of the Committee Members. The Committee
Members shall be appointed by the Members as follows:
(a) FRK shall have the sole right to appoint two (2) Committee
Members; and
(b) FRP shall have the sole right to appoint two (2) Committee
Members.
In the event that any Committee Member resigns, is removed, or
otherwise fails to serve as a Committee Member, the Member(s) who
appointed such Committee Member, whether FRK or FRP, or FRK and FRP
jointly, shall be entitled to appoint a Committee Member to fill such
vacancy. The Committee Member shall serve in such office until such
Committee Member is removed in accordance with this Section 4.2, or
until the earlier resignation or death of such Committee Member. Any
Committee Member may be removed at any time with or without cause by
the Member that appointed that Committee Member, or, in the case of
the jointly appointed Committee Member, by either Member.
4.3 Meetings of the Management Committee.
(a) Each Committee Member shall have one vote. The Management
Committee may act only by (i) majority vote of the Committee Members
in attendance at a duly called meeting of the Management Committee at
which a quorum is present in person or by proxy or (ii) by unanimous
written consent of all of the Committee Members. Committee Members
may grant their proxy to any other Committee Member to vote on their
behalf.
(b) The Management Committee shall elect a Chairman who shall
preside at meetings of the Management Committee. The Chairman shall
establish and announce the schedule and location for regular meetings
of the Management Committee, which shall be no less frequently than
quarterly. Regular meetings may be held as scheduled by the Chairman
without any additional notice of the time, place or purpose of the
meeting.
(c) The Management Committee may hold special meetings upon
the call of any Committee Member. Except as to a Committee Member who
waives notice in writing (before or after a meeting), prior notice of
the date, time and place of the meeting and the purpose for which such
meeting has been called shall be given to each Committee Member at
least three Business Days prior to such meeting. A Committee
Member's attendance at or participation in a meeting waives any
required notice to such Committee Member of the meeting unless such
Committee Member, at the beginning of the meeting or promptly upon
arrival at the meeting, objects to holding the meeting or transacting
business at the meeting and does not thereafter vote for or assent to
action taken at the meeting.
(d) All of the Committee Members must be present, in person
or by proxy, in order to establish a quorum at a meeting of the Management
Committee.
(e) Committee Members may participate in a meeting of the
Management Committee by means of conference telephone or similar
communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation shall constitute
presence in person at such meeting.
4.4 Business Plan. The Management Committee shall prepare and
approve a Business Plan in advance for each Fiscal Year, which shall
be subject to the approval of the Members. If at any time after the
Company's first Fiscal Year the Members and Management Committee do
not approve the Business Plan prior to the beginning of the next
Fiscal Year, the previously approved Business Plan shall continue
to govern (but with a 5% increase in all budgeted amounts) until
approval by the Members and Management Committee of the new Business
Plan.
4.5 Officers of the Company.
(a) The Company shall have such officers as may be designated
from time to time by the Management Committee, who shall, unless and until
removed from office, act as agents of the Company, have such powers
as are usually exercised by comparably designated officers of a
Florida corporation and have the power to bind the Company through
the exercise of such powers, subject to the limitations imposed by
this Agreement and any other limitations imposed by the Management
Committee. The officers shall operate within the scope of the
approved Business Plan, and any material deviations from the approved
Business Plan shall require prior approval of the Members provided,
however, that deviations in individual line items of the operating
and capital expense budgets shall not require prior approval from the
Members provided that the overall deviations do not exceed 10% for
the applicable Fiscal Year. The Management Committee shall determine
the compensation, if any, for the officers appointed by it.
(b) The Management Committee shall designate which officers
are to report directly to it.
(c) The Management Committee may remove any officer at any
time with or without cause; provided, however, that such removal
shall not affect the rights of the Company or of such officer under
any written agreement between the Company and such officer except in
accordance with the terms of such written agreement (if any).
(d) An officer may resign as an officer at any time by written
notice to the Management Committee. The resignation shall become
effective when the Company receives the notice unless a later
effective date is specified in the notice.
(e) The officers of the Company shall not have the authority to
commence any litigation on behalf of the Company without the prior
approval of the Management Committee.
4.6 Approval Rights of FRP and FRK. Notwithstanding anything in
this Agreement to the contrary, the following actions by the Company
shall require the affirmative, unanimous vote of the Members:
(a) any capital calls in excess of the amount specified in
Section 2.5(a);
(b) the selection or replacement of a third party
developer;
(c) Entry into any agreement with any Affiliate;
(d) The adoption of a plan of merger or consolidation
involving the Company;
(e) The sale, lease, exchange, pledge or other disposition
of a significant portion (greater than 20% in value) of the assets of
the Company in a single or series of related transactions;
(f) Any transaction causing the Company to incur any
indebtedness except to the extent authorized in the Business Plan
approved by the Members;
(g) The admission of any new Member or the creation of any
new class of Membership Interests;
(h) The amendment of the Articles of Organization of the
Company or of this Agreement;
(i) Causing the Company to be merged, combined or
consolidated with any other entity;
(j) Adopting overall financial policies for the Company
including, without limitation, adopting or changing significant tax
or accounting principles or policies except as authorized in the
Business Plan approved by the Members;
(k) Assuming, guaranteeing, endorsing or otherwise
becoming liable for the obligations of any other Person except as
authorized in the Business Plan approved by the Members;
(l) Dissolving the Company; and
(m) Declaring bankruptcy of the Company, making an
assignment for the benefit of its creditors, seeking the appointment
of a trustee, receiver or liquidator of the assets of the Company, or
any similar action.
For purposes of this Agreement, any matter that requires the
affirmative vote of the Members shall be deemed to require the
affirmative vote of all of the Members (i.e. both FRK and FRP).
4.7 Other Activities of Members and Committee Members. The Members
and the Committee Members currently may be engaged in other business
ventures which are similar to the anticipated business of the
Company. Unless otherwise prohibited or restricted by any separate
agreement, the conduct of such ventures by any Member or Committee
Member or the commencement of business ventures similar to the
business of the Company by any Member or Committee Member at a later
time shall not constitute a breach of the duty of loyalty owed by
such Member or Committee Member to the Company or its Members under
the Act. Nothing in this Agreement shall be deemed to create any
right in any Member to participate in any other business ventures of
the other Members.
4.8 Salaries of Committee Members. Each Committee Member shall
receive compensation as may be determined by the Members from time to
time and shall be entitled to reimbursement of reasonable and
necessary business expenses advanced on behalf of the Company.
SECTION 5
BUYOUT EVENTS AND TRANSFERS
5.1 Put and Call Buy-Sell.
(a) Upon the occurrence of a Triggering Event, any Eligible Member
(the "Offeror") may elect, within the 120 day period following the
occurrence of the Triggering Event, to give written notice (the
"Buy/Sell Notice") to the other Member (the "Offeree") designating a
buy/sell price (the "Buy/Sell Price") and payment terms and stating
that the Buy/Sell Notice is delivered pursuant to this Section 5.1.
The Buy/Sell Notice shall constitute both (i) an offer by the Offeror
to sell the Offeror's Membership Interest to Offeree at the Buy/Sell
Price, and (ii) an offer by the Offeror to buy the Offeree's
Membership Interest at the Buy/Sell Price (in each case, free and
clear of all liens
and encumbrances on such Membership Interest).
(b) The Buy/Sell Notice shall be irrevocable for a period of thirty
(30) days following the date of the Buy/Sell Notice (the "Irrevocable
Period"), and the Offeree may, by written notice to Offeror during
such Irrevocable Period, either accept the Offeror's offer to sell,
or accept the Offeror's offer to buy (but may not accept both), and
upon acceptance, the Offeror and the Offeree shall be required to
sell or to buy, as applicable. After receipt of a proper Buy/Sell
Notice, no other Buy/Sell Notice may be issued by either Member.
(c) If the Offeree fails to accept either offer within the
Irrevocable Period, the Offeree shall be deemed to have accepted the
Offeror's offer to buy the Offeree's Membership Interests to Offeror
at the Buy/Sell Price.
(d) Unless otherwise agreed by Offeror and Offeree, the closing of
such purchase and sale pursuant to this Section 5.1 shall take place
at the principal office of the Company on the fortieth (40th)
business day after the end of the Irrevocable Period. All such
closing, the Member required to buy (the "Buy/Sell Buyer") the
Membership Interest of the other Member (the "Buy/Sell Seller") shall
pay the Buy/Sell Price to the Buy/Sell Seller in accordance with the
terms of the Buy/Sell Notice. At such closing, the Buy/Sell Buyer (i)
shall cause the Company to pay any indebtedness owed by the Company
to the Buy/Sell Seller and (ii) shall cause the Buy/Sell Seller to be
released from liability under any guarantees executed by the Buy/Sell
Seller of the Company's indebtedness. The Buy/Sell Seller shall be
obligated to deliver to Buy/Sell Buyer a properly executed assignment
of its entire Membership Interest, free and clear of all liens and
encumbrances on such Membership Interest, but if the Buy/Sell Seller
fails to do so the Buy/Sell Buyer may execute such assignment on
behalf of the Buy/Sell Seller pursuant to the power of attorney
described in Section 5.3 below.
5.2 Right of First Refusal.
(a) FRK may Transfer its Membership Interest at any time to
a wholly-owned direct or indirect subsidiary of FRK, and FRP may transfer
its Membership Interest at any time to a wholly-owned direct or indirect
subsidiary of Patriot, and in either case the subsidiary shall be
admitted as a Member of the Company (any transfer pursuant to this
sentence as referred to as a "Permitted Transfer"). All Transfers by
a Member other than pursuant to Sections 5.1, 5.2 or this 5.3(a)
shall require compliance with this Section 5.3.
(b) Prior to making any Transfer of any portion of its Membership
Interest other than a Permitted Transfer, the Member desiring to make
the Transfer (for purposes of this Section 5.3, the "Selling Member")
shall give written notice (the "First Refusal Notice") to the other
Member (the "Non-Selling Member"). The First Refusal Notice shall
contain a full description of the purchase price (including the cash
equivalent value of any property to be received by the Selling Member
in the Transfer) and the terms and conditions of the proposed
disposition (including the identity of the proposed transferee). The
First Refusal Notice shall constitute an offer by the Selling Member
to sell all, but not less than all, of its Membership Interest to the
Non-Selling Member in accordance with the terms set forth in the
First Refusal Notice and the other provisions hereof.
(c) The Non-Selling Member shall have the right to purchase
all, but not less than all, of such Selling Member's Membership Interest
in the Company by giving written notice to the Selling Member at any
time before the expiration of thirty (30) days after the date the
First Refusal Notice is received (the "First Refusal Exercise
Period"). Such notice of acceptance must specify a closing date for
the purchase, which date shall be not later than sixty (60) days
after the date notice of acceptance is given.
(d) If the Non-Selling Member does not agree to purchase all of
the Membership Interests offered by the Selling Member prior to the end
of the First Refusal Exercise Period, the Selling Member, for a
period of sixty (60) days immediately thereafter, shall be entitled
to sell all of its Membership Interest to the third party designated
in the First Refusal Notice on terms not more favorable to the buyer
than to those set forth in the First Refusal Notice; provided,
however, that any the purchaser shall not be admitted as a Member of
the Company until the purchaser executes a counterpart of this
Agreement agreeing to be bound by all of the terms of this Agreement
and to comply with all of the requirements imposed on Members
hereunder.
(e) The purchase price of any Membership Interest in the Company
transferred pursuant to this Agreement shall be paid at the closing
in immediately available funds (or in accordance with other terms
specified in the First Refusal Notice) against delivery of as
assignment of the Selling Member's Membership Interest free and clear
of all pledges, liens, and encumbrances.
5.3 Power of Attorney. Each Member hereby irrevocably designates
and appoints the purchasing Member as such Member's lawful attorney-
in-fact to execute any documents and to take whatever actions are
necessary to transfer ownership of such Member's Membership Interest
upon the books of the Company upon the purchase of such Member's
Membership Interest pursuant to Sections 5.1 or 5.2 hereof, as
applicable. Any transfer of such Membership Interest on the books of
the Company pursuant to this provision shall be deemed to be an
effective transfer of the Membership Interest provided that the
purchasing Member has tendered the purchase price to the other Member
in accordance with Sections 5.1 or 5.2, as applicable.
SECTION 6
DISTRIBUTIONS
6.1 General. Except as otherwise provided in this Agreement, the
Company shall make Distributions to the Members at such times and in
such amounts as the Management Committee may determine from time to
time. All Distributions to Members shall be made to the Members Pro
Rata in accordance with their respective Percentage Interests, except
as provided in Sections 6.2 and 10.2 hereof
6.2 Liquidating Distributions. Upon the dissolution and winding up
of the Company, the provisions relating to Distributions provided in
Section 10.2 rather than this Section 6 shall apply.
6.3 Limitations on Distributions. Notwithstanding any provision to
the contrary contained in this Agreement, the Company shall not be
required to make a Distribution to the extent any such distribution
would violate the Act or other applicable law.
6.4 Return of Capital. Except as expressly required by the Act, no
Member shall be required to return to the Company, or be liable for
the amount of, any Distribution received from the Company.
SECTION 7
ALLOCATIONS
7.1 Allocations of Profits and Losses Among the Members. After
giving effect to the special allocations set forth in Sections 3.2,
7.2 and 7.3, the Company shall allocate its Profits and Losses
between the Members Pro Rata in accordance with the Members'
respective Percentage Interests.
7.2 Special Allocations. The following special allocations shall be
made in the following order:
(a) Company Minimum Gain Chargeback. Except as otherwise
provided in Treasury Regulation Section 1.704-2(f), notwithstanding
any other provision of this Section 7, if there is a net decrease in
Company Minimum Gain during any Company Allocation Year, each Member
shall be specially allocated items of Company income and gain for
such Allocation Year (and, if necessary, subsequent Allocation Years) in
an amount equal to such Member's share of the net decrease in Company
Minimum Gain, determined in accordance with Treasury Regulation
Section 1.704-2(g). Allocations pursuant to the previous sentence
shall be made in proportion to the respective amounts required to be
allocated to each Member pursuant thereto. The items to be so
allocated shall be determined in accordance with Treasury Regulations
Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 7.2(a) is
intended to comply with the minimum gain chargeback requirement in
Treasury Regulation Section 1.704-2(f) and shall be interpreted
consistently therewith.
(b) Member Minimum Gain Chargeback. Except as otherwise
provided in Treasury Regulation Section 1.704-1(i)(4), notwithstanding
any other provision of this Section 7, if there is a net decrease
in Member Nonrecourse Debt Minimum Gain attributable to a Member
Nonrecourse Debt during any Company Allocation Year, each Member who
has a share of the Member Nonrecourse Debt Minimum Gain attributable
to such Member Nonrecourse Debt, determined in accordance with
Treasury Regulation Section 1.704-2(i)(5), shall be specially allocated
items of Company income and gain for such Allocation Year (and, if
necessary, subsequent Allocation Years) in an amount equal to such
Member's share of the net decrease in Member Nonrecourse Debt Minimum
Gain attributable to such Member Nonrecourse Debt, determined in
accordance with Treasury Regulation Section 1.704-2(i)(4).
Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each
Member pursuant thereto. The items to be so allocated shall be
determined in accordance with Treasury Regulations Sections
1.704-2(i)(4) and 1.704-2(j)(2). This Section 7.2(b) is intended to
comply with the minimum gain chargeback requirement in Treasury
Regulation Section 1.704-2(i)(4) and shall be interpreted
consistently therewith.
(c) Qualified Income Offset. In the event any Member unexpectedly
receives any adjustments, allocations, or distributions described in
Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6),
items of Company income and gain shall be specially allocated to each
such Member in an amount and manner sufficient to eliminate, to the
extent required by the Treasury Regulations, such Member's Capital
Account Deficit as quickly as possible, provided that an allocation
pursuant to this Section 7.3(c) shall be made if and only to the
extent that the Member would have a Capital Account Deficit after all
other allocations provided for in this Section 7 have been
tentatively made as if this Section 7.3(c) were not in the Agreement.
This Section 7.2(c) is intended to comply with the "qualified income
offset" provision in Treasury Regulation Section
1.704-1(i)(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
(d) Nonrecourse Deductions. Nonrecourse Deductions for any
Allocation Year shall be specially allocated among the Members Pro
Rata in accordance with their respective Percentage Interests.
(e) Member Nonrecourse Deductions. Any Member Nonrecourse
Deductions for any Allocation Year shall be specially allocated to the
Member who bears the economic risk of loss with respect to the Member
Nonrecourse Debt to which such Member Nonrecourse Deductions are
attributable in accordance with Treasury Regulations Section
1.704-2(i)(1).
(f) Code Section 754 Adjustment. To the extent an adjustment
to the adjusted tax basis of any Company asset pursuant to Section 734(b)
or Section 743(b) of the Code is required, pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(m)(2) or Section
1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining
Capital Accounts as the result of a distribution to a Member in
complete liquidation of his interest in the Company, the amount of
such adjustment to the Capital Accounts shall be treated as an item
of gain (if the adjustment increases the basis of the asset) or loss
(if the adjustment decreases such basis) and such gain or loss shall
be specially allocated to the Members in accordance with their
interests in the Company in the event Treasury Regulation Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom such
distribution was made in the event Treasury Regulation Section
1.704-1(b)(2)(iv)(m)(4) applies.
7.3 Curative Allocations. The allocations set forth in Sections
7.2(a), 7.2(b), 7.2(c), 7.2(d), 7.2(e), and 7.2(f) (the "Regulatory
Allocations") are intended to comply with certain requirements of the
Treasury Regulations. It is the intent of the Members that, to the
extent possible, all Regulatory Allocations shall be offset either
with other Regulatory Allocations or with special allocations of
other items of Company income, gain, loss, or deduction pursuant to
this Section 7.3. Therefore, notwithstanding any other provision of
this Section 7 (other than the Regulatory Allocations), the
Management Committee shall make such offsetting special allocations
of Company income, gain, loss, or deduction in whatever manner it
determines appropriate so that, after such offsetting allocations are
made, each Member's Capital Account balance is, to the extent
possible, equal to the Capital Account balance such Member would have
had if the Regulatory Allocations were not part of the Agreement and
all Company items were allocated pursuant to Section 7.1. In
exercising its discretion under this Section 7.3, the Management
Committee shall take into account future Regulatory Allocations
contained in Sections 7.2(a) and 7.2(b) that, although not yet made,
are likely to offset other Regulatory Allocations previously made
under Sections 7.2(d) and 7.2(e).
7.4 Other Allocation Rules.
(a) Profits, Losses, and any other items of income, gain, loss, or
deduction shall be allocated to the Members pursuant to this Section
7 as of the last day of each Fiscal Year, provided that Profits,
Losses, and such other items shall also be allocated at such times as
the Gross Asset Values of Company assets are adjusted pursuant to
subparagraph (ii) of the definition of "Gross Asset Value" in
Schedule 1.
(b) The Members are aware of the income tax consequences of the
allocations made by this Section 7 and hereby agree to be bound by
the provisions of this Section 7 in reporting their shares of Company
income and loss for income tax purposes.
(c) For purposes of determining the Profits, Losses, or any other
items allocable to any period, Profits, Losses, and any such other
items shall be determined on a daily, monthly, or other basis, as
determined by the Management Committee using any permissible method
under Section 706 of the Code and the Treasury Regulations
thereunder.
(d) Solely for purposes of determining a Member's proportionate
share of the "excess nonrecourse liabilities" of the Company, within
the meaning of Treasury Regulation Section 1.752-3(a)(3), the
Members' interests in Company profits are in proportion to their
Percentage Interests.
7.5 Section 704(c) Allocations.
(a) Except as otherwise provided in this Section 7.5, each
item of income, gain, loss and deduction of the Company for federal
income tax purposes shall be allocated among the Members in the same
manner as such items are allocated for book purposes under this Section 7.
(b) In accordance with Section 704(c) of the Code and the Treasury
Regulations thereunder, income, gain, loss, and deduction with
respect to any property contributed to the capital of the Company
shall, solely for tax purposes, be allocated among the Members so as
to take account of any variation between the adjusted basis of such
property to the Company for federal income tax purposes and its
initial Gross Asset Value (computed in accordance with subparagraph
(a) of the definition of "Gross Asset Value" in Schedule 1).
(c) Any elections or other decisions relating to such allocations
shall be made by the Management Committee in any manner that
reasonably reflects the purpose and intention of this Agreement,
provided that the Company shall elect to apply the "traditional"
allocation method described in Treasury Regulation Section 1.704-
3(b) (or any successor Treasury Regulation), and provided, further,
that any items of loss or deduction attributable to property
contributed by a Member shall, to the extent of an amount equal to
the excess of (A) the federal income tax basis of such property at
the time of its contribution over (B) the Gross Asset Value of such
property at such time, be allocated in its entirety to the such
contributing Member and the tax basis of such property for purposes
of computing the amounts of all items allocated to any other Member
(including a transferee of the contributing Member) shall be equal to
its Gross Asset Value upon its contribution to the Company.
Allocations pursuant to this Section 7.5(d) are solely for purposes
of federal, state, and local taxes and shall not affect, or in any
way be taken into account in computing, any Member's Capital Account
or share of Profits, Losses, other items, or distributions pursuant
to any provisions of this Agreement.
(d) Except as otherwise provided in this Agreement, all items of
Company income, gain, loss, deduction, and any other allocations not
otherwise provided for shall be divided among the Members in the same
proportions as they share Profits or Losses, as the case may be, for
the Allocation Year.
SECTION 8
FEDERAL AND STATE TAX MATTERS
8.1 Tax Year and Accounting Matters. The fiscal year of the Company
(the "Fiscal Year") shall begin on October 1 and end on September 30
of the following calendar year. The Company shall adopt such methods
of accounting and file its tax returns on the methods of accounting
determined by the Management Committee.
8.2 Tax Elections.
(a) The Members agree that the Company shall be classified as a
"partnership" for income tax purposes, and the Members and the
Management Committee shall take any and all action necessary to
effectuate partnership tax treatment.
(b) The Management Committee is authorized to make any and all
elections for federal, state, and local tax purposes including,
without limitation, any election, if permitted by
applicable law: (i)
to make the election provided for a 6231(a)(1)(B)(ii) of the Code;
and (ii) to adjust the basis of Company assets pursuant to Sections
754, 734(b), and 743(b) of the Code (or any comparable provisions of
state or local law) in connection with Transfers of Membership
Interests and Company distributions.
(c) In connection with any Transfer of a Membership Interest, the
Management Committee shall cause the Company, at the written request
of the transferor or the transferee and at the time and in the manner
provided in Treasury Regulation Section 1.754-1(b), to make an
election to adjust the basis of the Company's assets in the manner
provided in Sections 734(b) and 743(b) of the Code and the transferee
shall pay all costs incurred by the Company in connection therewith,
including, without limitation, reasonable attorneys' and accountants'
fees.
8.3 Tax Matters Partner. FRK shall be the "Tax Matters Partner" of
the Company, as that term is used in Subchapter C of Chapter 63 of
Subtitle F of the Code, and the Members will take such actions as may
be necessary, appropriate, or convenient to effect the designation of
FRK as such Tax Matters Partner. Subject to any limitations imposed
by the Management Committee the Tax Matters Partner shall have full
and unlimited discretion (acting in a fiduciary capacity on behalf of
the Company) to perform or to fail to perform any actions or to make
any decisions which under the Code may be made by a Tax Matters
Partner; provided, however, that the Tax Matters Partner shall keep
the Management Committee reasonably informed as to any such actions.
Notwithstanding the foregoing, the Tax Matters Partner shall obtain
the consent of the Members prior to (i) filing a petition for
judicial review of a proposed tax assessment, (ii) filing a petition
for an administrative adjustment, or (iii) entering into any
settlement agreement with a taxing authority that would bind,
directly or indirectly, any other Member.
SECTION 9
INDEMNIFICATION
9.1 Indemnification. Subject to the limitations imposed by the Act
or otherwise imposed by law, the Company shall indemnify and hold
harmless each Person ("Indemnified Person") who was or is made a
party (or is threatened to be made a party) to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative, arbitrative or investigative ("Proceeding")
by reason of the fact that such Indemnified Person is or was a
Member, Committee Member or officer of the Company against judgments,
penalties, fines, settlements and reasonable costs and expenses
(including, without limitation, attorneys' fees) actually incurred by
such Indemnified Person in connection with such Proceeding if such
Indemnified Person acted in good faith and in a manner he, she, or it
reasonably believed to be in, or not opposed to, the best interest of
the Company and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his, her, or its conduct was
unlawful. The Company shall make an indemnification only upon a
determination by the Management Committee or the Members that
indemnification is proper. The Company shall not be liable to make
any payment of amounts otherwise indemnifiable hereunder if and to
the extent that Indemnified Person has received such payment under
any insurance policy maintained by the Company.
9.2 Advances. The Company may pay or reimburse the Indemnified
Person for the reasonable expenses incurred in advance of the final
disposition of the Proceeding and without any determination as to the
Indemnified Person's ultimate entitlement to indemnification;
provided, however, that the payment of such expenses incurred in
advance of the final disposition of a Proceeding shall be made only
upon delivery to the Company of a written affirmation by such
Indemnified Person of his, her, or its good faith belief that he,
she, or it has met the standard of conduct necessary for
indemnification hereunder and a written undertaking, by or on behalf
of such Indemnified Person, to repay all amounts so advanced if it
shall ultimately be determined that such Indemnified Person is not
entitled to be indemnified under the provisions hereof.
SECTION 10
DISSOLUTION OF THE COMPANY
10.1 Events of Dissolution. The Company shall be dissolved and its
affairs wound up upon the first to occur of the following events
("Dissolution Event"):
(a) The written consent of all the Members; or
(b) The entry of an order of dissolution by a court of competent
jurisdiction in accordance with the Act.
10.2 Liquidating Distributions. Upon the occurrence of a Dissolution
Event, the Company shall continue solely for the purposes of winding
up its affairs in an orderly manner, liquidating its assets and
satisfying the claims of its creditors and the Members. Under such
circumstances, the Management Committee shall not take any action
that is inconsistent with, or not necessary or appropriate for, the
winding up of the Company's affairs. To the extent not inconsistent
with the foregoing, all covenants and obligations in this Agreement
shall remain in full force and effect until such time as all of the
Company's assets have been Distributed or otherwise applied in the
manner provided in this Section 10.2. The Management Committee (or
liquidator, as the case may be) shall take full account of the
Company's liabilities and assets, cause the Company's assets to be
liquidated as promptly as is consistent with obtaining a fair value
therefor, and cause the proceeds therefrom, after payment of all
costs and expenses of liquidation, to be applied and Distributed in
the following order and priority:
(a) First, to creditors of the Company, including Members who are
creditors, to the extent permitted by law in satisfaction of
liabilities of the Company, whether by payment or establishment of
reserves;
(b) Second, to the Members, in accordance with positive Capital
Account balances (taking into account all contributions, adjustments,
and allocations made during the year in which the liquidation occurs,
including, without limitation, those specified in Section 7 hereof)
by the later of the close of the Fiscal Year of liquidation of the
Member's interest or within ninety (90) days after liquidation.
SECTION 11
MISCELLANEOUS PROVISIONS
11.1 Representations and Warranties of Members. Each Member
represents and warrants to the Company and to each other Member as
follows:
(a) Such Member is duly organized, validly existing and in good
standing under the laws of the state of Florida.
(b) Such Member has the requisite corporate or similar power and
full authority and capacity to enter into this Agreement and to incur
and perform its obligations under this Agreement.
(c) The execution, delivery, and performance by the Member of this
Agreement has been authorized by all necessary corporate action.
(d) Upon the execution and delivery of this Agreement, this
Agreement shall constitute a legal, valid, and binding obligation of
such Member, enforceable against such Member in accordance with its
terms.
11.2 Amendment. This Agreement may not be amended, modified,
altered, or changed in any respect whatsoever except in a written
instrument duly executed by all of the Members.
11.3 Construction. Whenever the context may require, any noun or
pronoun used herein shall include the corresponding masculine,
feminine, or neuter forms. The singular form of nouns, pronouns, and
verbs shall include the plural and vice versa.
11.4 Severability. Each provision of this Agreement shall be
considered severable and if for any reason any provision or
provisions hereof are determined to be invalid and contrary to
existing or future law, such invalidity shall not impair the
operation of or affect those portions of this Agreement which are
valid, and this Agreement shall remain in full force and effect and
shall be construed and enforced in all respects as if such invalid or
unenforceable provision or provisions had been omitted.
11.5 Burden and Benefit Upon Successors. Except as expressly
otherwise provided herein, this Agreement is binding upon, and inures
to the benefit of, the parties hereto and their respective heirs,
executors, administrators, personal and legal representatives,
successors, and assigns.
11.6 Further Assurances. Each Member hereby agrees that it shall
hereafter execute and deliver such further instruments, provide all
information, and take or forbear such further acts and things as may
be reasonably required or useful to carry out the intent and purpose
of this Agreement and as are not inconsistent with the terms hereof.
11.7 Notices. All notices required or permitted to be given
hereunder shall be in writing and shall be either hand-delivered,
sent by recognized overnight delivery service, by facsimile, or by
U.S. mail (registered or certified, return receipt requested) to the
Members or the Company (as applicable) at the addresses set forth
below, or to such other address as any Member may designate by giving
written notice to the Company in accordance with this Section 11.7:
Florida Rock Industries, Inc.
Attn: Xxxx X. Xxxxx XX
000 X. 00xx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile No. (000) 000-0000
Florida Rock Properties, Inc.
Attn: Xxxx X. Xxxxxxxx
1801 Art Xxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile No. (000) 000-0000
Notices shall be deemed to be effective upon actual receipt by the
addressee.
11.8 Waiver. No consent or waiver, express or implied, by any Party
hereto to or of any breach or default by any other Party hereto in
the performance of its obligations hereunder shall be
deemed or
construed to be a consent or waiver to or of any other breach or
default in the performance by such Party of the same or any other
obligations of such Party hereunder. Failure on the part of any
Party to complain of any act or failure to act of another Party or to
declare another Party in default, irrespective of how long such
failure continues, shall not constitute a waiver by such Party of its
rights hereunder.
11.9 Company Property. All legal title to Company property shall be
held in the name of the Company.
11.10 Counterparts. This Agreement may be signed in any number
of counterparts, including by facsimile or other electronic means,
each of which shall be an original, but all of which together shall
constitute one instrument. Each counterpart may consist of a number
of copies each signed by less than all, but together signed by all,
the Parties hereto.
11.11 No Third Party Beneficiary. This Agreement constitutes an
agreement among the Parties hereto, and none of the agreements,
covenants, representations, or warranties contained herein is for the
benefit of any third party not a Party to this Agreement. Without
limiting the generality of the foregoing, none of the provisions of
this Agreement shall be for the benefit of or enforceable by
creditors of the Company.
11.12 Governing Law. This Agreement and all questions with
respect to the rights and obligations of the Members, the
construction, enforcement, and interpretation hereof, and the
formation, administration, and dissolution of the Company, shall be
governed by the provisions of the Act and other applicable laws of
the State of Florida.
11.13 Survival. All representations and warranties made by each
Member shall be deemed to survive indefinitely.
11.14 Counsel Fees. If any Party finds it necessary to retain
counsel to enforce this Agreement, the substantially prevailing party
in a dispute shall be entitled to its reasonable counsel fees and
costs joint and severally from the other parties to such dispute.
11.15 Entire Agreement. This Agreement, including the exhibits
or other documents or schedules attached hereto or incorporated
herein by reference, constitutes the entire agreement of the Parties
with respect its subject matter. This Agreement supersedes all prior
agreements and oral understandings between the Members with respect
to such matters.
11.16 No Agency Relationship. The Members acknowledge and agree
that there is no agency relationship between them, that a Member
shall have no agency or vicarious liability for the acts or omissions
of another Member, and that the Company shall not be construed as a
partnership for any purpose other than federal and state tax
purposes.
11.17 Dispute Resolution.
(a) In the event of a Deadlock, the Members will make diligent, good
faith attempts to resolve the Deadlock. No Member may deliver a
Buy/Sell Notice under Section 5.1(a) based solely upon the occurrence
of a Deadlock unless the chief executive officer of such Member first
(i) delivers a letter to the chief executive officer of the other
Member explaining in reasonable detail the nature of the Deadlock and
the basis for the Member's position on the issue in dispute, (ii)
offers in such letter to meet with the chief executive officer of the
other Member at a mutually convenient time and location
within ten
(10) days after the date of the letter to attempt to resolve the
dispute, and (iii) if such other chief executive officer agrees to
such a meeting, meets in an effort to resolve the disputed issue. If
those officers cannot resolve the Deadlock within thirty (30)
calendar days after the date of such letter, the Member following
such procedure may deliver a Buy/Sell Notice.
(b) Any other dispute regarding this Agreement shall be resolved by
binding arbitration before one arbitrator selected by mutual
agreement of the Members. If the Members are unable to agree on a
single arbitrator, the arbitrator shall be appointed by the American
Arbitration Association in accordance with the Commercial Arbitration
Rules. The arbitrator will hold a hearing within 60 days following
his/her designation, and will render a resolution of the matter
submitted within 30 days after the hearing. The Members will conduct
the arbitration pursuant to the Commercial Arbitration Rules of the
American Arbitration Association or such other additional procedures
agreed to by the Members; provided, however, that the Members will
have the right to engage in reasonable discovery of documents
involved in the dispute. The Members will hold all arbitration
hearings in Jacksonville, Florida.
* * * * *
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURES APPEAR ON THE FOLLOWING PAGE.]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
FLORIDA ROCK PROPERTIES, INC., a FLORIDA ROCK INDUSTRIES, INC., a
Florida corporation Florida corporation
By: ___________________________ By:___________________________
Print Name: ___________________ Print Name:___________________
Title:_________________________ Title:________________________
SCHEDULE 1
DEFINITIONS
Act shall mean the Florida Limited Liability Company Act,
Florida Statutes 608.401 et seq. as amended from time to time, or
any corresponding provision or provisions of succeeding law.
Additional Funding Amount shall have the meaning ascribed to
such term in Section 2.5(a).
Adjusted Capital Account Deficit means, with respect to a
Member, the deficit balance, if any, in such Member's Capital Account
as of the end of the applicable Fiscal Year, after giving effect to
the following adjustments.
(a) Crediting to such Capital Account any amounts (i)
described in section 1.704-1(b)(2)(ii)(c) of the Treasury Regulations
which such Member is obligated to contribute to the Company pursuant
to this Agreement or applicable law or (ii) which such Member is
deemed obligated to restore pursuant to the penultimate sentences of
Treasury Regulations Sections 1.704-2(g)(1) or 1.704-2(i)(5); and
(b) Debiting to such Capital Account the items described
in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6) of the Treasury Regulations.
The foregoing definition of Adjusted Capital Account Deficit, is
intended to comply with the allocation rules of the alternate test
for economic effect contained in Section 1.704-1(b)(2)(ii)(d) of the
Treasury Regulations and shall be interpreted in a manner that is
consistent with such intent.
Affiliate, with respect to any specified Person, shall mean (i)
any Person directly or indirectly Controlling or under common Control
with the specified Person; (ii) any director, officer, partner,
member, or trustee of the specified Person; (iii) any Person
directly, indirectly, or beneficially owning or controlling 50% or
more of any class of voting interest of the specified Person; and
(iv) any ancestor, spouse, or family member (parent, sibling, or
descendant), whether by blood or marriage, of the specified Person,
or any trust for the primary benefit of such persons.
Agreement shall mean this Joint Venture Agreement and all
annexes, schedules and exhibits attached hereto and made a part
hereof, originally executed and as amended from time to time in
writing.
Bankruptcy means:
(a) The entry of an order for relief with respect to a Member in
proceedings under the Bankruptcy Code.
(b) The filing of an application by a Member for, or its consent to,
the appointment of a trustee, receiver, or custodian of its assets;
(c) The making by a Member of a general assignment for the benefit
of creditors;
(d) The entry of an order, judgment or decree by any court of
competent jurisdiction appointing a trustee, receiver or custodian of
the assets of a Member unless the proceedings and the person
appointed are dismissed within ninety (90) days;
(e) The failure by a Member generally to pay its debts as the debts
become due within the meaning of section 303(h)(1) of the Bankruptcy
Code, or a Member's admission in writing of its inability to pay its
debts as they become due; or
(f) A Member's Membership Interest's becoming subject to the
enforcement of any rights of a creditor of a Member, whether arising
out of an attempted charge upon that Member's Membership Interest by
judicial process or otherwise, if that Member fails to effectuate the
release of those enforcement rights, whether by legal process,
bonding, or otherwise, within ninety (90) days after actual notice of
that creditor's action.
Bankruptcy Code means the United States Bankruptcy Code, as
amended or superseded from time to time.
Brooksville Property shall have the meaning ascribed to such
term in page 1.
Business Plan means the operating and capital expense budget and
business plan of the Company for each Fiscal Year, including, without
limitation, (i) the development plan for the Brooksville Property,
(ii) a projected annual income statement, (iii) a projected balance
sheet as of the end of the Fiscal Year, (iv) a schedule of projected
operating cash flow (including itemized operating revenues and
Project costs and expenses) for such Fiscal Year, (v) a development
schedule identifying projected development periods as well as times
for completion of the various stages of the Project and costs
attributable to each stage, (vi) a description of any proposed
construction and capital expenditures, including projected dates for
commencement and completion of the foregoing, (vii) a marketing plan,
and (ix) a detailed description of such other information, plans,
maps, contracts, agreements, or other matters necessary in order to
inform the Members of all matters relevant to the development,
operation, management and sale of the Project or any portion thereof.
Buy/Sell Buyer shall have the meaning ascribed to such term in
Section 5.1.
Buy/Sell Notice shall have the meaning ascribed to such term in
Section 5.1.
Buy/Sell Price shall have the meaning ascribed to such term in
Section 5.1.
Buy/Sell Seller shall have the meaning ascribed to such term in
Section 5.1.
Capital Account shall mean the Capital Account maintained for
each Member, computed as set forth in Section 2.3 hereof.
Capital Contributions means, with respect to a Member, the
amount of money and the initial Gross Asset Value (as determined by
the Management Committee or as otherwise provided in this Agreement)
of property other than money contributed from time to time by such
Member to the capital of the Company in respect of such Members
Interest (net of the amount of any liabilities of the Member that, in
connection with such contribution, the Company is considered to
assume or take subject to under the last sentence of Treasury
Regulation Section 1.704-1(b)(2)(iv)(c) and, without duplication,
under Section 752 of the Code).
Change in Control means, with respect to a Member, any of the
following events: (i) the acquisition by any person, entity or
"group" (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), of
beneficial ownership (within the
meaning of Rule 13d-3 promulgated
under the Exchange Act) of securities representing fifty percent
(50%) or more of the combined voting power of all outstanding
securities of the Member entitled to vote generally in the election
of directors (excluding any acquisition or holding by (A) the Member;
(B) the directors of the Member as of the date of this Agreement (the
"Incumbent Board"), and (C) persons who as of the date of this
Agreement are deemed to be Affiliates of Xxxxxx X. Xxxxx or Xxxx X.
Xxxxx XX); or (ii) individuals who constitute the Incumbent Board
cease for any reason to constitute at least a majority of the board
of directors of the Member, provided that any person becoming a
director subsequent to the date hereof whose election, or nomination
for the election by the Company's shareholders, was approved by a
vote of at least a majority of the directors comprising the Incumbent
Board shall be considered as though such person were an original
member of the Incumbent Board; or (iii) a merger, consolidation or
similar transaction or series of related transactions that result in
the beneficial owners of the Member immediately prior to such
transactions (or, in the case of a series of related transactions,
immediately prior to the first such related transaction) no longer
owning securities representing a majority of the combined voting
power of all outstanding securities of the Member entitled to vote
generally in the election of directors.
Code shall mean the Internal Revenue Code of 1986, as amended,
or any corresponding provision or provisions of succeeding law.
References to "Code Sections" are references to Sections of the Code.
Committee Members shall have the meaning ascribed to such term
in Section 4.1.
Company has the meaning ascribed to such term in Section 1.1.
Company Minimum Gain has the meaning ascribed to the term
"partnership minimum gain" as set forth in Treasury Regulation
Sections 1.704-2(b)(2) and 1.704-2(d).
Control means the ability, whether by the ownership of shares or
other equity interest, by contract or otherwise, to elect a majority
of the directors of a corporation, independently to select the
managing partner of a partnership or manager of a limited liability
company, or otherwise to have the power independently to remove and
then select a majority of those persons exercising governing
authority over an entity.
Deadlock means the occurrence of a deadlock among the Members
(if action or approval of the Members is required) or a deadlock
among the Committee Members (if no Member approval or action is
required) with respect to the vote or consent to take any action that
will fundamentally change the Company including, without limitation,
(a) approval of the Business Plan, (b) a material change in the
nature of the business of the Company; (c) any sale or disposal of
all or substantially all of the assets of the Company; (d) any
transaction between the Company and any Affiliate; (e) any
transaction by the Company to merge or consolidate with another
Person or any transaction which involves the issuance of any equity
security of the Company to any other Person.
Defaulting Member shall have the meaning ascribed to such term
in Section 2.5(c).
Depreciation means, for each Fiscal Year or portion thereof, an
amount equal to the depreciation, amortization, or other cost
recovery deduction allowable with respect to an asset for such
period, except that if the Gross Asset Value of an asset differs from
its adjusted basis for federal income tax purposes at the beginning
of such Fiscal Year or allocation period, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value
as the federal income tax depreciation, amortization, or
other cost
recovery deduction for such Fiscal Year or period bears to such
beginning adjusted tax basis, provided, however, that if the adjusted
basis for federal income tax purposes of an asset at the beginning of
such Fiscal Year or allocation period is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using
any reasonable method selected by the Management Committee.
Dissolution Event shall have the meaning ascribed to such term
in Section 10.1.
Distributions means, with respect to a Member, the amount of
money and the Gross Asset Value (as determined by the Management
Committee or as otherwise provided in this Agreement) of property
other than money (net of the amount of (a) any liabilities of the
Company that, in conjunction with such Distributions such Member is
considered to assume under the last sentence of Treasury Regulation
Section 1.704-1(b)(2)(iv)(c) and, without duplication, (b) any
liabilities secured by the distributed property to which such Member
is considered to take the property subject under Section 752 of the
Code) distributed to such Member by the Company on account of that
Members Membership Interest or in redemption or liquidation of all or
any portion of such Members Membership Interest. Payments to a
Member (i) pursuant to a loan by such Member to the Company or other
transactions in which such Member is acting other than in its
capacity as "partner" within the meaning of Section 707(a) of the
Code or (ii) which are guaranteed payments within the meaning of
Section 707(c) of the Code shall not be treated as Distributions and
shall not reduce that Member's Capital Account.
Distribute means to make one or more Distributions.
Eligible Member shall mean a Member as to which none of the
following events has occurred: a Change in Control, an Event of
Bankruptcy, a Funding Default and a Prohibited Transfer.
Fair Market Value shall have the meaning ascribed to such term
in Section 5.2.
First Refusal Exercise Period shall have the meaning ascribed to
such term in Section 5.3.
First Refusal Notice shall have the meaning ascribed to such
term in Section 5.3.
Fiscal Year means the fiscal year of the Company as set forth in
Section 8.1.
Funding Default shall have the meaning ascribed to such term in
Section 2.5(c).
Funding Notice shall have the meaning ascribed to such term in
Section 2.5(a).
FRK shall have the meaning ascribed to such term in page 1.
FRK Newco shall have the meaning ascribed to in Section 2.2(a).
FRP shall have the meaning ascribed to such term in page 1.
FRP Newco shall have the meaning ascribed to in Section 2.2(a).
Gross Asset Value means, with respect to any Company asset, the
asset's adjusted basis for federal income tax purposes, except as
follows:
(a) The initial Gross Asset Value of any asset contributed
by a Member to the Company shall be the gross fair market value of
such asset, as determined by the contributing Member and the
Management Committee;
(b) The Gross Asset Values of all Company assets shall be
adjusted to equal their respective gross fair market values, as
determined by the Management Committee, as of the following times:
(A) the acquisition of an additional interest in the Company by any
new or existing Member in exchange for more than a de minimis Capital
Contribution; (B) the distribution by the Company to a Member of more
than a de minimis amount of property as consideration for an interest
in the Company; (C) the liquidation of the Company within the meaning
of Treasury Regulation Section 1.704-1(b)(2)(ii)(g); and (D) in
connection with the grant of an interest in the Company (other than a
de minimis interest) as consideration for the provision of services
to or for the benefit of the Company by an existing Member acting in
a Member capacity, or by a new Member acting in a member capacity in
anticipation of being a Member; provided, however, that adjustments
pursuant to clauses (A), (B), and (D) above shall be made only if the
Management Committee reasonably determines that such adjustments are
necessary or appropriate to reflect the relative economic interests
of the Members in the Company;
(c) The Gross Asset Value of any Company asset distributed
to any Member shall be adjusted to equal the gross fair market value
of such asset on the date of distribution as determined by the
distributee and the Management Committee; and
(d) The Gross Asset Values of Company assets shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Section 734(b) of the Code, but only
to the extent that such adjustments are taken into account in
determining Capital Accounts pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(m) and subparagraph (f) of the definition of
"Profits" and "Losses" in this Schedule 1 or Section 7.2(g),
provided, however, that Gross Asset Values shall not be adjusted
pursuant to this subparagraph (d) to the extent the Management
Committee determines that an adjustment pursuant to subparagraph (b)
hereof is necessary or appropriate in connection with a transaction
that would otherwise result in an adjustment pursuant to this
subparagraph (d).
(e) If the Gross Asset Value of an asset has been
determined or adjusted pursuant to subparagraphs (a), (b), or (d),
such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for
purposes of computing Profits and Losses.
(f) In the event the Gross Asset Value of any Company
asset is adjusted pursuant to subparagraph (b) of this definition of
"Gross Asset Value," subsequent allocations of income, gain, loss,
and deduction with respect to such asset shall take account of any
variation between the adjusted basis of such asset for federal income
tax purposes and its Gross Asset Value in the same manner as under
Section 704(c) of the Code and the Treasury Regulations thereunder.
Indemnified Person shall have the meaning ascribed to such term
in Section 9.1.
Initial Capital Contributions has the meaning ascribed to such
term in Section 2.1.
Interest Rate shall mean an interest rate equal to the default
rate under the Defaulting Member's principal revolving credit
facility at the time of a Funding Default.
Irrevocable Period shall have the meaning ascribed to such term
in Section 5.1.
Joint Venture shall have the meaning ascribed to such term in
page 1.
Losses has the meaning set forth in the definition of "Profits"
and "Losses."
Management Committee shall have the meaning ascribed to such
term in Section 4.1.
Member(s) shall mean any Person that is or becomes a member of
the Company in accordance with this Agreement and as that term is
defined by the Act.
Membership Interest shall mean a Member's interest in the
capital of, and share of the Profits and Losses of, the Company, the
right to receive Distributions, voting rights and management rights
granted under this Agreement and all other rights granted to a Member
under this Agreement or the Act.
Member Nonrecourse Debt has the meaning ascribed to the term
"partner nonrecourse debt" in Treasury Regulation Section
1.704-2(b)(4).
Member Nonrecourse Debt Minimum Gain" means the amount ascribed
to the term "partner nonrecourse debt minimum gain" in Treasury
Regulation Section 1.704-2(i)(2), as determined in accordance with
Treasury Regulation Section 1.704-2(i)(3).
Member Nonrecourse Deductions has the meaning ascribed to the
term "partner nonrecourse deductions" in Treasury Regulations Section
1.704-2(i)(1) and 1.704-2(i)(2).
Merger shall have the meaning ascribed to such term in Section
2.2(c).
Nonrecourse Deductions has the meaning set forth in Treasury
Regulation Sections 1.704-2(b)(1) and 1.704-2(c).
Nonrecourse Liability has the meaning set forth in Treasury
Regulation Section 1.704-2(b)(3).
Non-Defaulting Member shall have the meaning ascribed to such
term in Section 2.5(c).
Non-Selling Member shall have the meaning ascribed to such term
in Section 5.3.
Non-Withdrawing Member shall have the meaning ascribed to such
term in Section 5.2.
Offer shall have the meaning ascribed to such term in Section
5.1.
Offeree shall have the meaning ascribed to such term in Section
5.1.
Offeror shall have the meaning ascribed to such term in Section
5.1.
Patriot shall have the meaning ascribed to such term in page 1.
Percentage Interests shall mean, with respect to each Member,
the percentage interest for such Member set forth opposite the name
of the Member in Section 2.1 hereof.
Permitted Encumbrances shall mean the encumbrances listed in
Schedule 3 attached hereto.
Permitted Transfer shall have the meaning ascribed to such term
in Section 5.2(a).
Person shall mean any individual, partnership, corporation,
association, trust, limited liability company, or other legal entity,
whether foreign or domestic and its heirs, executors, administrators,
legal representatives, successors, and assigns.
Proceeding shall have the meaning ascribed to such term in
Section 9.1.
Profits and Losses means, for each Fiscal Year or allocable
portion thereof, an amount equal to the Company's taxable income or
loss for such year, determined in accordance with Section 703(a) of
the Code (for this purposes, all items of income, gain, loss, or
deduction required to be stated separately pursuant to Code Section
703(a)(1) shall be included in taxable income or loss), with the
following adjustments:
(a) Any income of the Company that is exempt from federal
income tax and not otherwise taken into account in computing Profits
or Losses pursuant to this definition of "Profits" and "Losses" shall
be added to such taxable income or loss;
(b) Any expenditures of the Company described in Section
705(a)(2)(B) of the Code, or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(i), and not otherwise taken into account in
computing Profits or Losses pursuant to this definition of "Profits"
and "Losses" shall be subtracted from such taxable income or loss;
(c) In the event the Gross Asset Value of any Company
asset is adjusted pursuant to subparagraphs (b) or (c) of the
definition of "Gross Asset Value," the amount of such adjustment
shall be taken into account as gain or loss from the disposition of
such asset for purposes of computing Profits or Losses;
(d) Gain or loss resulting from any disposition of Company
assets with respect to which gain or loss is recognized for federal
income tax purposes shall be computed by reference to the Gross Asset
Value of such disposed asset, notwithstanding that the adjusted tax
basis of such asset differs from its Gross Asset Value;
(e) In lieu of the depreciation, amortization, and other
cost recovery deductions taken into account in computing such taxable
income or loss, there shall be taken into account Depreciation for
such Fiscal Year, computed in accordance with the definition of
"Depreciation";
(f) To the extent an adjustment to the adjusted tax basis
of any Company asset pursuant to Section 734(b) of the Code is
required pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining
Capital Accounts as a result of a distribution other than in
liquidation of a Member's interest in the Company, the amount of such
adjustment shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment
decreases the basis of the asset) from the disposition of the asset
and shall be taken into account for purposes of computing Profits or
Losses; and
(g) Notwithstanding any other provision of this definition
of "Profits" and "Losses," any items that are specially allocated
pursuant to Section 7.2 or Section 7.3 shall not be taken into
account in computing Profits or Losses. However, the amounts of the
items of Company income, gain, loss, or deduction available to be
specially allocated pursuant to Sections 7.3 and 7.3 shall be
determined by applying rules analogous to those set forth in
subparagraphs (a) through (f) hereof.
Prohibited Transfer shall mean a Transfer by a Member of its
Membership Interest in violation of the terms of this Agreement,
including Section 5.2 hereof.
Project shall have the meaning as is set forth in Section 1.3.
Pro Rata means an amount in proportion to the Members'
respective Membership Interests in the Company.
Purchase Notice shall have the meaning ascribed to such term in
Section 5.2.
Regulatory Allocations shall have the meaning ascribed to such
term in Section 7.3.
Xxxxxxxxx Acquisition Expenses shall mean the costs incurred (by
FRK or FRK Newco) to acquire the Xxxxxxxxx Property, including the
purchase price, closing costs, attorneys' fees and other out-of-
pocket expenses.
Xxxxxxxxx Property shall have the meaning ascribed to such term
in page 1.
Selling Member shall have the meaning ascribed to such term in
Section 5.3.
Surviving Entity shall have the meaning ascribed to such term in
Section 2.2(a).
Tax Matters Partner shall have the meaning ascribed to such term
in Section 8.3.
Transfer and Transferred means the sale, assignment, transfer,
pledge, encumbrance, or other disposition, by operation of law or
otherwise, of Membership Interests or any part thereof; provided,
however, that a transfer of a Membership Interest pursuant to Section
5.2(a) hereof shall not constitute a "Transfer" for purposes of any
other Section of this Agreement.
Treasury Regulations shall mean the regulations of the United
States Treasury Department, as amended, and any successor provisions
thereto.
Triggering Event shall mean the occurrence of any of the
following events: a Deadlock that is not resolved pursuant to Section
11.17(a) hereof, a Change in Control of a Member, an Event of
Bankruptcy with respect to a Member, a Funding Default by a Member or
a Prohibited Transfer by a Member.
Withdrawing Member shall have the meaning ascribed to such term
in Section 5.2.
SCHEDULE 2
DESCRIPTION OF BROOKSVILLE PROPERTY
---------------------------------
sCHEDULE oMITTED FROM FILING
SCHEDULE 3
PERMITTED ENCUMBRANCES
SCHEDULED OMITTED FROM FILING
SCHEDULE 4.1
INITIAL
MANAGEMENT COMMITTEE MEMBERS
SCHEDULE OMITTED FROM FILING
EXHIBIT A
CERTIFICATE AND PLAN OF MERGER
SCHEDULE OMITTED FROM FILING
