SCHEDULE 13E-3
EXHIBIT (D)(4)
MEMBERS AGREEMENT
This Agreement is made this 20th day of March 2000 (the "Effective Date")
between Xxxxxx X. Xxxx ("Xxxx") and The Xxxx Family Revocable Lifetime A B Trust
dated October 14, 1998 ("Trust").
WHEREAS, Xxxx and Trust, who are owners of outstanding units ("Units") of AZI
LLC, an Arizona limited liability company (the "Company"), believe it is in
their respective mutual best interests to provide for the restrictions on the
transfer of their Units as set forth herein as are necessary to ensure the
harmonious and successful management and control of the Company.
NOW THEREFORE, in consideration of the mutual promises and undertakings of the
parties hereto, and intending to be legally bound, the parties agree as follows:
1. RESTRICTION ON TRANSFER OF THE TRUST'S UNITS. During the term of this
Agreement, Trust shall not transfer, alienate, sell, assign, pledge, encumber,
exchange or otherwise dispose of all, or any portion of, or any rights or rights
in any of his Units, or contract to do any of such things (each a "Prohibited
Transfer") except as permitted under the terms of this Agreement. Trust hereby
acknowledges the reasonableness of this prohibition in view of the purposes of
the Company and the relationship of the parties hereto. Any attempted Prohibited
Transfer in violation of this Section 1 shall be deemed invalid, null and void,
and of no force or effect. Any person to whom Units are attempted to be
transferred in violation of this Section 1 shall not be entitled to vote on
matters coming before members of the Company, participate in the management of
the Company, receive distributions from the Company, or have any rights in or
with respect to such Units.
2. BUY OUT OF THE TRUST.
(a) Xxxx may at any time after five years from the Effective Date, or within
thirty days of the death of both G. Xxxxx Xxxx and Xxxxx Xxxxx Xxxx (husband and
wife), elect in a written notice to Trust or his representative, if any, to
purchase for cash all of the Units then held by Trust at a price equal to the
greater of Trust's then existing capital account in the Company (as defined in
the Company's Operating Agreement of even date herewith) or the Agreed Value of
such Units. For purposes of this Section 2, "Agreed Value" means the product of
(i)a fraction, the numerator of which is the number of Units to be purchased
under this Section 2 and the denominator of which is the total number of Units
of the Company then outstanding multiplied by (ii) the product of (A) five times
the EBITDA of the Company, (defined as operating income (loss) before
depreciation and amortization expense and excluding charges for interest expense
and interest income and before provision for income taxes), computed in
accordance with generally accepted accounting principles, for the full taxable
year immediately preceding the year in which the event giving rise to the
purchase of the Units under this Section 2 occurred less (B) the then existing
principal amount of interest bearing indebtedness of the Company plus (C) the
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book value of the assets of the Company not used in the ordinary course of its
business determined in accordance with GAAP.
(b) The closing date of a purchase of Units by Xxxx under this Section2 shall
occur within not less than thirty days following the date of Xxxx'x notification
to Trust of his election to purchase the Units permitted under this Section2.
(c) In the event that during the one year following the closing date of Units by
Xxxx under this Section 2 Xxxx sells all, or any portion, of such Units to a
third party at a per Unit price that is greater than the per Unit price paid to
Trust or his representative, if any, by Xxxx under Section 2(a), then Xxxx shall
be required to immediately pay to Trust or his representative, if any, upon the
completion of such resale an amount equal to the product of (i) such per Unit
price difference multiplied by (ii) the total number of such Units resold by
Xxxx.
3. TRUST'S RIGHT OF CO-SALE.
(a) If Xxxx proposes to sell or transfer any Units held by Xxxx before Xxxx has
acquired all of the Units held by Trust in accordance with Section 2, then Xxxx
shall promptly give written notice (the "Proposed Sale Notice") to Trust at
least 15 days prior to the closing of such sale or transfer. The Proposed Sale
Notice shall describe in reasonable detail the proposed sale or transfer
including, without limitation, the number of Units to be sold or transferred,
the nature of such sale or transfer, the consideration to be paid, and the name
and address of each prospective purchaser or transferee.
(b) Trust shall have the right, exercisable upon written notice to Xxxx (the
"Participation Notice") within ten days after the Proposed Sale Notice to
participate in such sale of Units on the same terms and conditions; provided,
however, the number of Units that Trust may sell hereunder shall not exceed an
amount equal to the product of (i) the total number of Units then held by Trust
multiplied by (ii) a fraction, the numerator of which is the number of Units
reflected in the Proposed Sale Notice and the denominator of which is the total
number of Units held by Xxxx immediately before the giving of the Proposed Sale
Notice. The Participation Notice shall indicate the number of Units that Trust
wishes to sell under his right to participate.
(c) If Trust elects to participate in the sale pursuant to this Section3, Trust
shall effect his participation in the sale by promptly delivering to Xxxx for
transfer to the prospective purchaser one or more certificates, properly
endorsed for transfer, which represent the number of Units which Trust elects to
sell.
(d) The Unit certificate or certificates that Trust delivers to Xxxx pursuant to
Section 3(c) shall be transferred to the prospective purchaser in consummation
of the sale of the Units pursuant to the terms and conditions specified in the
Proposed Sale Notice, and Xxxx shall concurrently therewith remit to Trust that
portion of the sale proceeds to which Trust is entitled by reason of its
participation in such sale.
(e) In the event that the prospective purchaser(s) purchase(s) fewer Units than
set forth in the Proposed Sale Notice, the Units sold by Xxxx and Trust shall be
reduced pro rata based on the number of Units they would have been entitled to
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sell had the purchaser(s) purchased all the Units set forth in the Proposed Sale
Notice.
(f) If Trust elects not to participate in the sale of the Units subject to the
Proposed Sale Notice, Xxxx may, not later than sixty days following delivery to
Trust of the Proposed Sale Notice, enter into an agreement providing for the
closing of the transfer of the Units covered by the Proposed Sale Notice within
thirty days of such agreement on terms and conditions not more materially
favorable to Xxxx than those described in the Proposed Sale Notice.
(g) Notwithstanding the foregoing, the co-sale rights of Trust set forth in this
Section3 shall not apply to (i) any transfer of Units held by Xxxx to Xxxxxx X.
Xxxxxxxx ("Xxxxxxxx") upon Xxxx'x death in accordance with that certain Members
Agreement between Xxxx and Xxxxxxxx of even date herewith and (ii) any pledge of
Units made by Xxxx pursuant to a bona fide loan transaction with a financial
institution that creates a mere security interest or to the foreclosure of such
pledge; provided that in the event of any transfer made pursuant to one of the
foregoing exemptions: (A) Xxxx shall inform Trust of such pledge or transfer
prior to effecting it and (B)the pledgee or transferee shall furnish Trust with
a written agreement to be bound by and comply with all of the provisions of
Section3.
4. TERM. This Agreement shall terminate upon the occurrence of any of the
following events: (i) cessation of the Company's business, (ii) the bankruptcy,
receivership or dissolution of the Company, (iii) upon Trust's death and Xxxx'x
failure to elect to purchase Units held by Trust in accordance with Section 2 or
(iv) the elapse of ten years following the date of this Agreement.
5. GENERAL PROVISIONS.
(a) All notices under the provisions of this Agreement shall be given by
certified mail, return receipt requested, or registered mail and shall be deemed
received when mailed to the addresses of Xxxx or Trust as listed on the records
of the Company.
(b) This Agreement shall be governed by the laws of the State of Arizona in all
respects.
(c) This Agreement may be executed simultaneously and by facsimile signature in
counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
(d) No provision of this Agreement shall be altered, amended or revoked except
by an instrument in writing signed by the parties hereto.
(e) This Agreement shall extend to and be binding upon the successors, assigns
and legal representatives of the parties hereto.
(f) In the event that any provision of this Agreement is determined by any court
of competent jurisdiction to be illegal or unenforceable, such illegal or
unenforceable provision shall be severed, and the remainder of this Agreement
shall continue in full force and effect.
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(g) This Agreement constitutes the full and entire understanding and agreement
between the parties with regard to the subjects hereof and no party shall be
liable or bound to any other in any manner by any covenants and agreements
except as specifically set forth herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the day and year first above written.
XXXX TRUST
/s/ Xxxxxx X. Xxxx /s/ G. Xxxxx Xxxx
Xxxxxx X. Xxxx G. Xxxxx Xxxx
March 20, 2000 March 20, 2000
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