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EXHIBIT 3.7
OPERATING AGREEMENT
OF
STRATEGIC TIMBER TRUST II, LLC
(A GEORGIA LIMITED LIABILITY COMPANY)
**Effective As of October 9, 1998**
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TABLE OF CONTENTS
ARTICLE 1: DEFINITIONS..........................................................................................1
1.1 BASIC TERMS............................................................................1
ARTICLE 2: FORMATION OF COMPANY.................................................................................5
2.1 EFFECT OF THIS AGREEMENT AND THE GEORGIA LIMITED LIABILITY COMPANY
ACT....................................................................................5
2.2 NAME...................................................................................5
2.3 INITIAL PERCENTAGE INTERESTS...........................................................5
2.4 PERMITTED BUSINESSES...................................................................5
2.5 PRINCIPAL PLACE OF BUSINESS............................................................6
2.6 REGISTERED OFFICE AND REGISTERED AGENT.................................................6
2.7 OWNERSHIP..............................................................................6
2.8 WAIVER OF RIGHT OF PARTITION...........................................................6
2.9 LIMITATIONS............................................................................6
ARTICLE 3: REPRESENTATIONS AND WARRANTIES.......................................................................6
3.1 AUTHORITY; ............................................................................6
3.2 SECURITIES COMPLIANCE..................................................................7
ARTICLE 4: RIGHTS AND DUTIES OF MANAGERS; MEETINGS; INDEMNIFICATION;
CONFLICTING INTEREST PROVISIONS DO NOT APPLY......................................................................7
4.1 MANAGEMENT BY MANAGERS.................................................................7
4.2 DECISIONS REQUIRING MEMBER CONSENT.....................................................7
4.3 MANAGERS...............................................................................9
4.4 MEETINGS OF MANAGERS...................................................................9
4.5 MEETINGS OF MEMBERS...................................................................10
4.6 PROVISIONS APPLICABLE TO ALL MEETINGS.................................................10
4.7 OFFICERS..............................................................................11
4.8 LIMITATIONS ON LIABILITY OF MANAGERS AND OFFICERS.....................................11
4.9 INDEMNIFICATION; REIMBURSEMENT OF EXPENSES; INSURANCE.................................11
4.10 CONFLICTING INTEREST TRANSACTION PROVISIONS DO NOT APPLY..............................12
ARTICLE 5: RIGHTS AND OBLIGATIONS OF MEMBERS...................................................................12
5.1 LIMITATION ON LIABILITY...............................................................12
5.2 NO LIABILITY FOR COMPANY OBLIGATIONS..................................................12
5.3 LIST OF MEMBERS.......................................................................12
5.4 ACTIONS OF MEMBERS; NO DISSENTER'S RIGHTS.............................................12
5.5 PRIORITY AND RETURN OF CAPITAL........................................................13
5.6 NO EXCLUSIVE DUTY TO THE COMPANY......................................................13
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ARTICLE 6: CONTRIBUTIONS TO THE COMPANY AND CAPITAL ACCOUNTS...................................................13
6.1 GENERALLY.............................................................................13
6.2 MEMBERS' CAPITAL ACCOUNTS.............................................................13
ARTICLE 7: DISTRIBUTIONS TO MEMBERS............................................................................14
7.1 ALLOCATION OF PROFITS AND LOSSES......................................................14
7.2 DISTRIBUTIONS.........................................................................15
7.3 LIMITATION UPON DISTRIBUTIONS.........................................................16
ARTICLE 8: BOOKS AND RECORDS...................................................................................16
8.1 ACCOUNTING PERIOD.....................................................................16
8.2 RECORDS, AUDITS AND REPORTS...........................................................16
8.3 BOOKS OF ACCOUNT AND RECORDS..........................................................16
8.4 METHODS OF ACCOUNTING.................................................................16
8.5 TAX MATTERS MEMBER....................................................................17
8.6 MATTERS CONCERNING FUNDS..............................................................17
ARTICLE 9: TRANSFERABILITY AND WITHDRAWAL......................................................................17
9.1 TRANSFER LIMITATIONS..................................................................17
(c) Company's Right to Purchase Membership Interest.........................................................17
9.2 TIME OF TRANSFER......................................................................18
9.3 DISTRIBUTIONS AND ALLOCATIONS IN RESPECT OF TRANSFERRED UNIT..........................18
9.4 NO WITHDRAWAL; EVENTS OF DISSOCIATION.................................................19
ARTICLE 10: ADDITIONAL MEMBERS.................................................................................19
10.1 ADMISSION OF A NEW MEMBER.............................................................19
10.2 ALLOCATION............................................................................19
ARTICLE 11: DISSOLUTION AND TERMINATION........................................................................19
11.1 TERMINATION AND WINDING UP OF THE COMPANY.............................................19
11.2 METHOD OF DISTRIBUTION UPON WINDING UP................................................20
11.3 ORDERLY LIQUIDATION...................................................................20
ARTICLE 12: GENERAL PROVISIONS.................................................................................20
12.1 CERTIFICATES REPRESENTING UNITS AND LOST CERTIFICATES.................................20
12.2 CERTIFICATION OF NON-FOREIGN STATUS...................................................20
12.3 SURVIVAL..............................................................................21
ARTICLE 13: AMENDMENT..........................................................................................21
13.1 AMENDMENTS............................................................................21
ARTICLE 14: MISCELLANEOUS PROVISIONS...........................................................................21
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14.1 GOOD FAITH EFFORTS; FURTHER ASSURANCES; COOPERATION...................................21
14.2 NOTICES...............................................................................21
14.3 SUCCESSORS IN INTEREST................................................................22
14.4 SPECIFIC PERFORMANCE..................................................................22
14.5 SEVERABILITY..........................................................................22
14.6 REMEDIES AND COSTS....................................................................23
14.7 INTEGRATION; WAIVER...................................................................23
14.8 CONTROLLING LAW.......................................................................23
14.9 COPIES................................................................................23
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OPERATING AGREEMENT
OF
STRATEGIC TIMBER TRUST II, LLC
(A GEORGIA LIMITED LIABILITY COMPANY)
THE MEMBERSHIP INTERESTS IN STRATEGIC TIMBER TRUST II, LLC HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "1933 ACT") OR ANY STATE SECURITIES LAWS ("STATE ACTS") IN
RELIANCE ON ONE OR MORE EXEMPTIONS THEREUNDER. THE MEMBERSHIP INTERESTS MAY NOT
BE SOLD OR TRANSFERRED EXCEPT IN COMPLIANCE WITH (I) THE TERMS AND CONDITIONS
OF THIS AGREEMENT AND (II) THE 1933 ACT OR ANY APPLICABLE STATE ACTS OR
PURSUANT TO A VALID AND SUBSISTING EXEMPTION THEREFROM.
THIS IS AN OPERATING AGREEMENT by and among C. Xxxxxx Xxxxx,
Xxxxxxxxxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xxxxxxxx Xxxxxx, Xxxxxx X. Xxxxxxx,
Xxxxxxxx X. Xxxxxx and Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP, as the Members (as
defined below) of Strategic Timber Trust II, LLC, a Georgia limited liability
company organized pursuant to the filing of Articles of Organization with the
Georgia Secretary of State on September 23, 1998 (the "COMPANY"), and dated as
of October 9, 1998 and by which the Members, in consideration of the mutual
benefits contained in this Agreement and other good and valuable consideration
(the mutuality, adequacy and sufficiency of which are hereby acknowledged),
hereby agree as follows:
* * *
ARTICLE 1: DEFINITIONS
1.1 BASIC TERMS. The following terms used in this Agreement have
the following meanings:
"ADDITIONAL CAPITAL CONTRIBUTION" means a contribution to the capital
of the Company made by a Member pursuant to Section 6.1(b).
"AFFILIATE" shall mean, with respect to the Company or to any Member
(or as to any other person the affiliates of whom are relevant for
purposes of any of the provisions of this Agreement), any Entity which
directly or indirectly through one or more intermediaries, Controls,
is Controlled by, or is under common Control with, the Company or any
Member.
"AGREEMENT" means this Agreement as originally executed and as amended
from time to time in accordance with the provisions of Article 13.
"ARTICLES OF ORGANIZATION" means the Articles of Organization of the
Company, as filed with the Secretary of State of Georgia and as they
may be amended from time to time.
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"BRIDGE LOAN" means the senior secured loan provided to the Company by
the lenders under that Bridge Loan Agreement dated as of October 9,
1998, among the Company, the lenders party thereto, ABN AMRO Bank
N.V., as administrative agent for the lenders (as the same may be
amended, modified or restated from time to time) having a 12-month
term and in the original principal amount of $35,000,000.
"CAPITAL ACCOUNT" means with respect to any Member, the Capital
Account maintained for such Person pursuant to the provisions of
Section 6.2, which shall be determined and adjusted as required by IRC
ss. 704(b) Regulations.
"CAPITAL CONTRIBUTION" means the amount in cash or agreed-upon value
of property contributed by each Member (or the Member's predecessors
in interest) to the capital of the Company for the Member's Unit or
Units.
"COMPANY" means Strategic Timber Trust II, LLC, a Georgia limited
liability company.
"CONTROL" shall mean the ability, whether by the direct or indirect
ownership of shares or other equity interests, by contract or
otherwise, to elect a majority of the directors of a corporation, to
select the managing partner of a partnership, or otherwise to select,
or have the power to remove and then select, a majority of those
persons exercising governing authority over an Entity. In the case of
a limited partnership, the sole general partner, all of the general
partners to the extent each has equal management control and
authority, or the managing general partner or managing general
partners thereof shall be deemed to have control of such partnership
and, in the case of a trust, any trustee thereof or any person having
the right to select any such trustee shall be deemed to have control
of such trust.
"ENTITY" shall mean any general partnership, limited partnership,
limited liability company, corporation, joint venture, trust, business
trust, real estate investment trust, cooperative or association or
other business entity or organization.
"FINANCING" means collectively the Bridge Loan and Senior Credit
Facilities.
"FINANCING DOCUMENTS" means any and all credit and loan agreements and
related documents evidencing or securing the Financing.
"FISCAL YEAR" means the Company's fiscal year, which is the calendar
year.
"GLLCA" means the Georgia Limited Liability Company Act set forth at
O.C.G.A. ss.00-00-000, et seq., as amended from time to time, and
applicable rules and regulations promulgated thereunder.
"INITIAL CAPITAL CONTRIBUTION" means the initial contribution to the
capital of the Company made by a Member pursuant to this Agreement.
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"IRC" means the Internal Revenue Code of 1986, as amended from time to
time.
"MANAGER" means any Person named in this Agreement or the Articles of
Organization as an initial manager of the Company and any person
subsequently elected as a manager in accordance with the terms of this
Agreement; provided, however, that the term does not include any
Person who has ceased to be a manager of the Company.
"MEMBER" means each of the parties who executes this Agreement as a
Member and each Person who may hereafter become a Member.
"MEMBERSHIP INTEREST" means a Member's entire interest in the Company,
including such Member's interest in his Capital Account, the Net
Profits or Net Losses of the Company and any distributions made by the
Company, and the right to participate in the management of the
business, affairs and properties of the Company, and also including
the right to vote on, consent to, or otherwise participate in any
decision or action of or by the Members granted pursuant to this
Agreement or the GLLCA.
"NET CASH FLOW" means the Company's funds available for distribution
in accordance with Section 7.2, which will be determined with respect
to any period of operation as:
(a) the sum of all cash receipts received during such
period (including the net proceeds of borrowings but
excluding Capital Contributions)
(b) minus the sum of each of the following:
(i) all costs and expenses of the Company paid
during such period (other than depreciation
or other similar noncash expenses)
including, without limitation, principal
payments and other payments in the nature
of debt service on the Financing and any
other loan, capitalized lease or other
obligation of indebtedness
(ii) any other cash expenditures made by the
Company, and
(iii) funds paid into Reserves as required during
such period for the establishment of or
addition to such Reserves as the Managers
shall reasonably deem necessary or
appropriate for the proper operation of the
business of the Company
(c) plus the amount by which any such Reserves shall be
reduced by the Managers.
"NET LOSSES" and "NET PROFITS" means, for each Fiscal Year or other
period, an amount equal to the Company's taxable income or loss for
such year or period, determined in accordance with IRC ss.703(a) (for
this purpose, all items of income, gain, loss or deduction required to
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be stated separately pursuant to IRC ss.703(a)(1) shall be included in
taxable income or loss), with the adjustments required by the IRC
ss.704(b) Regulations.
"OFFICER" is defined in Section 4.7.
"PERCENTAGE INTEREST" means the interest of a Member in the Company,
determined by the proportion of Units owned by such Member to the
total number of Units outstanding, and as adjusted from time to time
in accordance with the terms of this Agreement.
"PERSON" means any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors, and assigns of such
Person where the context so permits.
"PIONEER" means Pioneer Resources, LLC, an Oregon limited liability
company.
"REGULATIONS" means the regulations promulgated under the IRC, as such
regulations may be amended from time to time. All references in this
Agreement to a specific section of the Regulations shall be deemed
also to refer to any corresponding provision of succeeding
regulations.
"RESERVES" means, with respect to any fiscal period, funds set aside
or amounts allocated during such period to reserves which shall be
maintained in amounts deemed sufficient by the Managers for working
capital and to pay taxes, insurance, debt service or other costs or
expenses incident to the ownership or operation of the Company's
business.
"SENIOR CREDIT FACILITIES" means the senior secured credit facilities
provided to Pioneer by the lenders under that Replacement Credit Loan
Agreement dated as of October 9, 1998, among Pioneer, the lenders
party thereto, First Union National Bank, as administrative agent for
the lenders, ABN AMRO Bank N.V. as syndication agent for the lenders
and NationsBank, N.A. as documentation agent for the lenders (as the
same may be amended, modified or restated from time to time) in the
original committed amount of $270,000,000.
"SPECIAL MAJORITY INTEREST" means a number of Units which, taken
together, exceed 75% of the aggregate of all Units.
"TAX MATTERS MEMBER" means Xxxxxx X. Xxxxxxx for purposes of IRC
xx.xx. 6621 through 6233.
"UNIT" means the unit of measure of all Percentage Interests, which
collectively represent one hundred percent (100%) of all Percentage
Interests.
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ARTICLE 2: FORMATION OF COMPANY
2.1 EFFECT OF THIS AGREEMENT AND THE GEORGIA LIMITED LIABILITY
COMPANY ACT. Except as otherwise specifically provided for in this Agreement,
the rights and obligations of the Members and the administration, dissolution,
liquidation, and termination of the Company shall be governed by the GLLCA.
2.2 NAME. The name of the Company is Strategic Timber Trust II,
LLC.
2.3 INITIAL PERCENTAGE INTERESTS. The initial Percentage
Interests of and Units held by the Members are as follows:
Name Percentage Interest Units
---- ------------------- -----
C. Xxxxxx Xxxxx 25.3521% 712.4576
Xxxxxxxxxxx X. Xxxxx 25.3521 712.4576
Xxxxxx X. Xxxxx 25.3521 712.4576
Xxxxxxxx Xxxxxx 5.6338 158.3239
Xxxxxx X. Xxxxxxx 5.6338 158.3239
Xxxxxxxx X. Xxxxxx 5.6338 158.3239
Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP 7.0423 197.9049
-------- --------
Totals = 100.0000% 2810.2494
======== =========
2.4 PERMITTED BUSINESSES. The permitted businesses of the Company
are:
(a) To acquire, hold, own, manage and transfer timberlands;
to sell and otherwise dispose of the timber grown on such property; to acquire
an ownership interest in Entities engaged in similar or related activities; and
to engage in such other activities as shall be necessary, desirable or
appropriate to effectuate the foregoing purposes. In connection with the
foregoing, the Company shall have full power and authority, directly to enter
into, perform, and carry out contracts of any kind, to borrow money and to
issue other evidences of indebtedness, including guaranties of the indebtedness
of Affiliates (including the Financing which indebtedness may be secured by
mortgages, pledges of partnership interests in other Entities, including
Pioneer), security interests or other liens, and to enter into any and all
indentures and other agreements and documents relating to such evidence of
indebtedness, directly or indirectly, and to acquire such assets as may be
necessary or useful in connection with its business;
(b) to accomplish any other lawful business whatsoever;
(c) to exercise all other powers necessary to or reasonably
connected with the Company's business which may be legally exercised by limited
liability companies under the GLLCA; and
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(d) to engage in all activities necessary, customary,
convenient, or incident to any of the foregoing.
2.5 PRINCIPAL PLACE OF BUSINESS. The mailing address and principal
place of business of the Company shall be 0 Xxxxx Xxxxxxxx Xxxxxx, Xxx Xxxxxx,
Xxx Xxxxxxxxx 00000. The Company may locate its places of business and
registered office at any other place or places as the Managers may from time to
time deem advisable.
2.6 REGISTERED OFFICE AND REGISTERED AGENT. The Company's initial
registered office shall be at 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxx,
Xxxxxx Xxxxxx, Xxxxxxx 00000, and the name of its registered agent at such
address shall be Xxxxxxx X. Xxxxxxx. The registered office and registered agent
may be changed from time to time by filing the address of the new registered
office or the name of the new registered agent, as the case may be, with the
Secretary of State of Georgia pursuant to the GLLCA.
2.7 OWNERSHIP. The interest of each Member in the Company is
personal property for all purposes. All property and interests in property, real
or personal, owned by the Company shall be deemed owned by the Company as an
entity, and no Member, individually, shall have any ownership of such property
or interest owned by the Company except as a Member in the Company.
2.8 WAIVER OF RIGHT OF PARTITION. Each of the Members irrevocably
waives, during the term of the Company and during any period of its liquidation
following any dissolution, any right that it may have to maintain any action
for partition with respect to any of the assets of the Company.
2.9 LIMITATIONS. The relationship between and among the parties
shall be limited to the carrying on of the business of the Company in accordance
with the terms of this Agreement. No Member, acting alone, shall have any
authority to act for, or to undertake or assume, any obligation, debt, duty or
responsibility on behalf of any other Member or the Company except as expressly
provided in this Agreement. The Members intend that the Company shall not be a
partnership (including a limited partnership) or joint venture, and that no
Member shall be a partner or joint venturer of any other Member, for any
purposes other than under the IRC and the Regulations and other applicable
federal and state tax laws, and this Agreement shall not be construed to suggest
otherwise.
ARTICLE 3: REPRESENTATIONS AND WARRANTIES
Each Member hereby represents and warrants to each other Member,
severally and not jointly, with respect to himself as follows:
3.1 AUTHORITY; ENFORCEABILITY. Such Member has the power and
authority to execute, deliver and perform this Agreement. Such Member's
execution, delivery and performance of this Agreement is not restricted by or in
violation of (a) any applicable law to which it or he is subject, (b) in the
case of a Member who is not an individual, any document as to its formation or
governance (including articles of incorporation or bylaws or partnership
agreement, as amended or restated), or
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(c) any agreement, commitment, order, ruling or proceeding to which it or he is
a party or to which it or he or any of its or his assets are subject.
3.2 SECURITIES COMPLIANCE. Such Member is acquiring his interest
in the Company for his own account, to hold for investment, and with no
intention of dividing his participation with others or reselling or otherwise
participating, directly or indirectly, in a distribution of his interest in the
Company, or any portion thereof, and shall not make any sale, transfer or other
disposition of its interest in the Company, or any portion thereof, in violation
of this Agreement, the Georgia Securities Act of 1973 as amended, the Securities
Act of 1933 as amended or any other applicable state securities law. The Member
understands that the Company is under no obligation to register the interests in
the Company or take any other action necessary in order to make compliance with
an exemption from registration available. Such Member is an "accredited
investor" as defined in Rule 501(a) promulgated under the Securities Act of
1933, as amended.
ARTICLE 4: RIGHTS AND DUTIES OF MANAGERS; MEETINGS; INDEMNIFICATION; CONFLICTING
INTEREST PROVISIONS DO NOT APPLY
4.1 MANAGEMENT BY MANAGERS.
(a) Generally. Subject to the provisions of Section 4.2, the
powers of the Company shall be exercised by or under the authority of, and the
business, affairs and properties of the Company shall be managed under the
direction of, the Managers. No Member in its capacity as a Member has the
right, power, or authority to act for or on behalf of the Company, to do any
act that would be binding on the Company, or to incur any expenditures on
behalf of the Company.
(b) Decisions. In managing the business and affairs of the
Company and exercising its powers, so long as there is more than one Manager,
the Managers shall act collectively through resolutions adopted at meetings and
in written consents pursuant to Sections 4.4 and 4.6. No Manager has the right,
power, or authority to act for or on behalf of the Company, to do any act that
would be binding on the Company, or to incur any expenditures on behalf of the
Company, except in accordance with the immediately preceding sentence.
Decisions or actions taken by the Managers in accordance with this Agreement
(including this Section 4.1 and Section 4.2) shall constitute decisions or
actions by the Company and shall be binding on each Manager, Member, Officer,
and employee of the Company.
4.2 DECISIONS REQUIRING MEMBER CONSENT. Notwithstanding any power
or authority granted the Managers under the GLLCA, the Articles of Organization
or this Agreement,
(a) the Managers may not make any decision or take any action
for which the consent of a Special Majority Interest or other consent of the
Members is expressly required by the Articles of Organization or this
Agreement, without first obtaining such consent;
(b) the Managers may not approve any action dissolving the
Company pursuant to GLLCA Article 6 without first obtaining the unanimous vote
or consent of all Members:
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(c) the Managers may not make any of the following
decisions or approve any of the following actions without first obtaining the
affirmative vote or consent of (i) the affected Member and (ii) Members
(including the affected Member) holding a Special Majority Interest:
(i) the redemption by the Company of all or a
portion of any Member's Membership Interest;
(ii) a merger of the Company pursuant to GLLCA
Article 9 in which a Member is not entitled to receive consideration for each
of its Units equal to the consideration all other Members immediately prior to
such merger are entitled to receive for each of their Units; or
(iii) any amendment of the Articles of
Organization or this Agreement that:
(1) reduces the Percentage Interest of a
Member relative to that of the other
Members;
(2) materially adversely affects a
Member, except to the extent all
other Members are similarly
affected;
(3) increases the financial obligation
or liability of a Member, including
without limitation any amendment of
Section 6.1(b); and
(d) the Managers may not make any of the following
decisions or approve any of the following actions without first obtaining the
affirmative vote or consent of Members holding a Special Majority Interest:
(i) any merger of the Company pursuant to GLLCA
Article 9 not described in Section 4.2(c)(ii),
(ii) the sale, exchange, lease, or other
disposition of all or substantially all of the property of the Company,
(iii) the admission of any new Member,
(iv) any amendment of the Articles of
Organization or this Agreement not described in Section 4.2(c)(iii), and
(v) the issuance of any Units.
Each Member may, with respect to any vote, consent, or approval that
it is entitled to grant pursuant to this Agreement, grant or withhold such
vote, consent, or approval in its sole discretion. This Section 4.2 shall
supersede ss. 00-00-000 of the GLLCA.
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4.3 MANAGERS.
(a) Number of Managers. The number of Managers of the
Company is one, until such number is changed by a Special Majority Interest.
(b) Initial Managers. The initial Manager of the Company
is Xxxxxx X. Xxxxx.
(c) Resignation and Removal. Each Manager (whether an
initial or a successor Manager) shall cease to be a Manager upon the earliest
to occur of the following events:
(i) such Manager shall be removed, with or
without cause, by Members holding a Special Majority Interest at a meeting of
the Members called for that purpose;
(ii) such Manager shall resign as a Manager, by
giving notice of such resignation to the Members; or
(iii) such Manager shall die or become incapable
of performing substantially all of the normal duties of a Manager.
(d) Vacancies. Any vacancy in any Manager position may be
filled by Members holding a Special Majority Interest at a meeting of the
Members called for that purpose.
4.4 MEETINGS OF MANAGERS. The following provisions apply to
meetings of Managers:
(a) Regular Meetings. Regular meetings of the Managers
may be held on such dates and at such times as shall be determined by the
Managers, with notice of such regular meeting schedule being given to each
Manager that was not present at the meeting at which it was adopted. The
Company shall give reminder notices of regular meetings of the Managers
specifying the place and time of such meeting that is delivered to each other
Manager at least five days prior to such meeting. Neither the business to be
transacted at, nor the purpose of, such regular meeting need be specified in
the notice (or waiver of notice) thereof.
(b) Special Meetings. Special meetings of the Managers
may be called by any Manager by notice specifying the place and time of such
meeting that is delivered to each other Manager at least 24 hours prior to such
meeting. The business to be transacted at, and the purpose of, such special
meeting shall be specified in the notice (or waiver of notice) thereof.
(c) Quorum. Unless otherwise expressly provided in this
Agreement, at any meeting of the Managers, a majority of the Managers shall
constitute a quorum for the transaction of business, and an act of a majority
of the Managers who are present at such a meeting at which a quorum is present
shall be the act of the Managers.
(d) Single Manager. The provisions of this Section 4.4
are inapplicable at any time that there is only one Manager.
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4.5 MEETINGS OF MEMBERS. The following provisions apply to
meetings of the Members:
(a) Annual Meeting. An annual meeting of the Members for
the transaction of such business as may properly come before the meeting shall
be held on such date and at such time as the Managers shall specify in the
notice of the meeting, which shall be delivered to each Member at least 10 days
prior to such meeting. Neither the business to be transacted at, nor the
purpose of, such annual meeting need be specified in the notice (or waiver of
notice) thereof.
(b) Special Meeting. Special meetings of the Members may
be called by the Managers or by Members having among them at least 75% of the
Units. Any such meeting shall be held on such date and at such time as the
Person calling such meeting shall specify in the notice of the meeting, which
shall be delivered to each Member at least 10 days prior to such meeting. The
business to be transacted at, and the purpose of, such special meeting shall be
specified in the notice.
(c) Quorum. Unless otherwise expressly provided in this
Agreement, at any meeting of the Members, a Special Majority Interest,
represented either in person or by proxy, shall constitute a quorum for the
transaction of business, and an act of a Special Majority Interest shall be the
act of the Members, unless the vote of a greater or lesser proportion or number
is otherwise required by the GLLCA, by the Articles of Organization, or by this
Agreement.
(d) Interested Members. Unless otherwise expressly
provided in this Agreement or required by applicable law, Members who have an
interest (economic or otherwise) in the outcome of any particular matter upon
which the Members vote or consent may vote or consent upon any such matter, and
their Units, vote or consent, as the case may be, shall be counted in the
determination of whether the requisite matter was approved by the Members.
4.6 PROVISIONS APPLICABLE TO ALL MEETINGS. In connection with any
meeting of the Managers, Members, or any committee of the Managers, the
following apply:
(a) Place of Meeting. Any such meeting shall be held at
the principal place of business of the Company, unless the notice of such
meeting (or resolution of the Managers) specifies a different place, which need
not be in the State of Georgia.
(b) Waiver of Notice Through Attendance. Attendance of a
Person at such meeting (including attendance pursuant to Section 4.6(d)) shall
constitute a waiver of notice of such meeting, except where such Person attends
the meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
(c) Action by Written Consent. Any action required or
permitted to be taken at such a meeting may be taken without a meeting, without
prior notice, and without a vote if a consent or consents in writing, setting
forth the action so taken, is signed by the Managers or Members having not
fewer than the minimum number of Units or votes that would be necessary to take
the action at a meeting at which all Members, Managers, or members of the
committee, as applicable, entitled to vote on the action were present and
voted.
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(d) Meetings by Telephone. Managers and Members may
participate in and hold such meeting by means of conference telephone, video
conference, or similar communications equipment by means of which all Persons
participating in the meeting can hear each other.
(e) Proxies. Members may vote their Units personally, or
may grant proxies to vote Units held by them. A Member may appoint a proxy by
executing a writing that authorizes another person or persons to act on the
Member's behalf. An appointment of a proxy is valid when received by the
Secretary of the Company. An appointment of a proxy is revocable by the Member
granting it unless the appointment form conspicuously states that it is
irrevocable and the appointment is coupled with an interest. The Company is
entitled to accept the proxy's vote or other action as that of the Member
making the appointment.
4.7 OFFICERS. The Managers may designate one or more Persons to be
officers of the Company ("Officers"), and any Officers so designated shall have
such titles, authorities, duties, and salaries as the Managers may delegate to
them. Any Officer may be removed as such, either with or without cause, by the
Managers. The initial Officers of the Company are as follows:
President C. Xxxxxx Xxxxx
Vice President Xxxxxxxxxxx X. Xxxxx
Vice President & Treasurer Xxxxxx X. Xxxxx
Vice President Xxxxxxxx Xxxxxx
Vice President & Secretary Xxxxxx X. Xxxxxxx
Vice President Xxxxxxxx X. Xxxxxx
Assistant Secretary Xxxxxxx X. Xxxxxxx
4.8 LIMITATIONS ON LIABILITY OF MANAGERS AND OFFICERS. Each
Manager and Officer shall act in a manner he believes in good faith to be in
the best interests of the Company and with such care as an ordinarily prudent
person in a like position would use under similar circumstances. No Manager or
Officer shall be liable to the Company, or its Members, for any action taken in
managing the business or affairs of the Company if he performs the duties of
his office in compliance with the standard contained in this Section 4.8. No
Manager or Officer has guaranteed nor does any Manager or Officer have any
obligation with respect to the return of a Member's Capital Contributions or
profits from the operation of the Company. No Manager shall be liable to the
Company or to any Member for any loss or damage sustained by the Company or any
Member except loss or damage resulting from such Manager's failure to meet the
standard contained in this Section 4.8, intentional misconduct or knowing
violation of law or a transaction for which the Manager received a personal
benefit in violation or breach of the provisions of this Agreement. Each
Manager and Officer shall be entitled to rely on information, opinions, reports
or statements, including financial statements or other financial data prepared
or presented in accordance with the provisions of GLLCA ss. 00-00-000.
4.9 INDEMNIFICATION; REIMBURSEMENT OF EXPENSES; INSURANCE. To the
fullest extent permitted by the GLLCA:
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(a) the Company shall indemnify each Member, Manager and
Officer who was, is, or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding
("Proceeding"), any appeal therefrom, or any inquiry or investigation
preliminary thereto, by reason of the fact that he or she is or was a
Member, Manager or Officer, from and against any loss, cost, expense,
judgment, settlement, penalty or fine with respect to such a
Proceeding;
(b) the Company shall pay or reimburse each Member,
Manager or Officer for expenses incurred by him or her (i) in advance
of the final disposition of a Proceeding to which such Manager or
Officer was, is, or is threatened to be made a party, and (ii) in
connection with his or her appearance as a witness or other
participation in any Proceeding.
The provisions of this Section 4.9 shall not be exclusive of any other right
under any applicable law, provision of the Articles of Organization or this
Agreement, or otherwise. The Company may purchase and maintain insurance to
protect itself and any Manager, Officer, employee, or agent of the Company,
whether or not the Company would have the power to indemnify such Person under
this Section 4.9. As required by the GLLCA, no Member, Manager or Officer shall
be entitled to indemnification or payment or reimbursement of expenses pursuant
to this Section 4.9 for or in connection with (i) intentional misconduct or
knowing violation of law, or (ii) any transaction for which he received a
personal benefit in violation or breach of any provision of this Agreement.
4.10 CONFLICTING INTEREST TRANSACTION PROVISIONS DO NOT APPLY. The
provisions of GLLCA section 00-00-000 shall not apply to the Company. The
Company shall have the right to enter into any contract or transaction with a
Member or Manager or Related Person (as defined in GLLCA ss. 14-11-101(21)) as
freely as with an unrelated third party; provided, however, that no such
contract or transaction shall be entered into without prior notice to all
Members and the Members consent to such contract or transaction by a Special
Majority Interest.
ARTICLE 5: RIGHTS AND OBLIGATIONS OF MEMBERS
5.1 LIMITATION ON LIABILITY. Each Member's liability shall be
limited as set forth in this Agreement, the GLLCA, and other applicable law.
5.2 NO LIABILITY FOR COMPANY OBLIGATIONS. No Member will have any
personal liability for any debts or losses of the Company, except as provided
by applicable law.
5.3 LIST OF MEMBERS. Upon written request of any Member, the
Company shall provide a list showing the names, addresses and Membership
Interest of all Members, and the other information required by GLLCA
ss.00-00-000 and maintained pursuant to Section 8.2.
5.4 ACTIONS OF MEMBERS; NO DISSENTER'S RIGHTS. Except to the
extent otherwise specifically provided in this Agreement or under the GLLCA,
any action on the part of the Company that requires the approval of the Members
shall be approved upon the affirmative vote or consent of a majority
(determined by Percentage Interest) of the Members. No Member voting against
any
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action of the Company, including any merger, sale, exchange, lease or other
disposition of all or substantially all of the property of the Company or
amendment to the Articles of Organization, shall have the benefit of the rights
granted pursuant to GLLCA ss. 14-11-1002 or any other so-called "dissenter's
rights."
5.5 PRIORITY AND RETURN OF CAPITAL. Except as may be expressly
provided in Article 7, no Member shall have priority over any other Member,
either as to the return of Capital Contributions or as to Net Profits, Net
Losses or distributions.
5.6 NO EXCLUSIVE DUTY TO THE COMPANY. The Members may have other
business interests and may engage in other activities in addition to those
relating to the Company. Neither the Company nor any Member shall have any
right, by virtue of this Agreement, to share or participate in such other
investments or activities of any Member or to the income or proceeds derived
therefrom. No Member shall incur liability to the Company or to any of the
other Members as a result of engaging in any other business or venture.
ARTICLE 6: CONTRIBUTIONS TO THE COMPANY AND CAPITAL ACCOUNTS
6.1 GENERALLY.
(a) Initial. Each Member has made an Initial Capital
Contribution in cash or property to the Company as set forth on Exhibit A
attached hereto. By executing this Agreement, each Member agrees that the value
assigned to each non-cash item on Exhibit A was the fair market value of such
asset at the date of contribution.
(b) Additional. No Member shall be required to make an
Additional Capital Contribution to the Company, except as that Member may
otherwise expressly agree in writing. If the Managers determine that the
Company requires additional capital, each Member shall have the right, but not
the obligation, to make an Additional Capital Contribution to the Company. If
some but not all of the Members desire to make additional contributions, such
Additional Capital Contributions shall be made proportionately to the
Percentage Interests of the contributing Members. The Percentage Interests and
Units of the Members shall be adjusted to take into account any Additional
Capital Contributions.
(c) No Interest. No interest shall be paid on any Capital
Contributions.
(d) Annual Reconciliation. The Capital Account of each
Member shall be reconciled annually, at the close of the Company's Fiscal Year.
6.2 MEMBERS' CAPITAL ACCOUNTS.
(a) Generally. A separate Capital Account shall be
established and maintained for each Member. As funded and adjusted in
accordance with this Agreement, the Capital Accounts
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of the Members shall reflect the economic agreement of the Members as to their
intended interests in the Company.
(b) IRC ss. 704(b). The determination and maintenance of
the Members' Capital Accounts, and any adjustments thereof, shall be made in a
manner consistent with tax accounting and other principles set forth in IRC ss.
704(b) and IRC ss. 704(b) Regulations.
ARTICLE 7: DISTRIBUTIONS TO MEMBERS
7.1 ALLOCATION OF PROFITS AND LOSSES.
(a) Net Profits and Net Losses Generally. Except as
otherwise provided in Sections 7.1 (b) and (c), the Net Profits and Net Losses
shall be allocated among the Members as follows:
(i) First, Net Profits in any year shall be
allocated among the Members until the cumulative Net Profits allocated to the
Members pursuant to this Section 7.1(a)(i) are equal to the cumulative Net
Losses allocated to the Members pursuant to Section 7.1(a)(iii) for all prior
periods, and in proportion to the amount of the Net Losses that were allocated
among the Members for such prior periods;
(ii) Then, Net Profits shall be allocated to the
Members in proportion to their respective Percentage Interests;
(iii) First, Net Losses in any year shall be
allocated among the Members, in proportion to and to the extent of, their
positive Capital Account balances; and
(iv) Then, any remaining amount of Net Losses
shall be allocated to the Members in proportion to their respective Percentage
Interests.
(b) Other Allocation Rules.
(i) Chargeback Allocations. Notwithstanding any
other provision of this Article 7, any item of Company income or gain for any
fiscal year (or any portion of any such item) that is required to be allocated
to a Member under the IRC ss. 704(b) Regulations shall be allocated to such
Member for such fiscal year in the manner so required by such Regulations. This
Section 7.1(b)(i) is intended to comply with the "minimum gain chargeback" and
"partner nonrecourse debt minimum gain chargeback" requirements in such
Regulations and shall be interpreted consistently therewith.
(ii) Qualified Income Offset Allocations. Except
as provided in Section 7.1(b)(i), income or gain shall be allocated to the
Members at such times and in such amounts as may be necessary to comply with
the "qualified income offset" provisions of the IRC ss. 704(b) Regulations.
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(iii) Nonrecourse Allocations. "Nonrecourse
deductions" and "nonrecourse liabilities," as defined in the IRC ss. 704(b)
Regulations, for any fiscal year or other period shall be allocated among the
Members in proportion to their respective Percentage Interests. "Partner
nonrecourse deductions" and "partner nonrecourse debt" for any fiscal year or
other period shall be allocated among the Members in accordance with applicable
Regulations under IRC xx.xx. 704 and 752.
(c) Curative Allocations. The allocations set forth in
Sections 7.1(b)(i), (ii) and (iii) above (the "Regulatory Allocations") are
intended to comply with certain of the requirements of the IRC ss. 704(b)
Regulations. The Regulatory Allocations may not be consistent with the manner
in which the Members intend to share distributions from the Company, which is
ratably in accordance with their respective Percentage Interests. Accordingly,
the Managers are hereby is authorized to divide other allocations of income,
gain, deduction or loss among the Members so as to prevent the Regulatory
Allocations from distorting the manner in which distributions from the Company
are intended to be shared among the Members pursuant to this Agreement. The
Managers shall have the discretion to accomplish this result in any reasonable
manner.
(d) Tax Allocations. In accordance with IRC ss. 704(c)
and the Regulations thereunder, income, gain, loss and deduction with respect
to any property contributed to the capital of the Company or with respect to
any property that has been revalued pursuant to the IRC ss.704(b) Regulations
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 fair market value at the date
of contribution or revaluation.
7.2 DISTRIBUTIONS.
(a) While Bridge Loan Outstanding. During the period that
the Bridge Loan is outstanding, the Company shall use all reasonable efforts to
distribute cash to the Members to enable the Members to fund their U.S. federal
income tax liabilities (including any estimated payments thereof) attributable
to income reported (or to be reported) on tax returns of the Company that is
allocated to the Members, including without limitation amounts allocable under
IRC ss. 704(c). For purposes of making the determination of the amount of
distribution under this Section 7.2(b), items of ordinary income or short-term
capital gain will be assumed to be taxed at a rate of either 20% or 28%, as
determined by the Tax Matters Member upon advice of tax counsel; provided,
however, the maximum amount distributable under this Section 7.2(b) in any
fiscal year is the Company's indirect proportionate share of the tax
distributions made by Strategic Timber Partners II, LP, a Georgia limited
partnership in which the Company is an indirect partner.
(b) After Bridge Loan Satisfied. After the Bridge Loan is
satisfied, to the extent Net Cash Flow is available, the Company shall make
distributions to the Members: (i) to enable the Members to pay federal, state
and local income taxes attributable to their Membership Interests (including
quarterly tax distributions), such distributions to be made in an amount equal
to each Member's Percentage Interest of the Company's taxable income for the
period multiplied by an assumed tax rate of 36%, and (ii) at such other times
as the Managers may determine (except in connection with the termination and
winding up of the Company), and all such distributions under this clause (ii)
shall be made among the Members in proportion to their Percentage Interests.
Assets
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or cash available for distribution in connection with the termination and
winding up of the Company shall be distributed in accordance with the
provisions of Article 11.
7.3 LIMITATION UPON DISTRIBUTIONS. No distribution shall be made
to Members if prohibited by GLLCA ss. 00-00-000 or by the terms of the
Financing Documents.
ARTICLE 8: BOOKS AND RECORDS
8.1 ACCOUNTING PERIOD. The Company's accounting period is the
calendar year.
8.2 RECORDS, AUDITS AND REPORTS. At the expense of the Company,
the chief operating officer of the Company shall maintain records and accounts
of all operations and expenditures of the Company. The Company shall keep at
its principal place of business the following records:
(a) A current list of the full name and last known
address of each Member;
(b) Copies of records to enable a Member to determine
the relative voting rights, if any;
(c) A copy of the Articles of Organization of the Company
and all amendments to them;
(d) Copies of the Company's federal, state, and local
income tax returns and reports, if any, for the
three most recent years;
(e) Copies of this Agreement, together with any
amendments hereto; and
(f) Copies of any financial statements of the Company
for the three most recent years.
8.3 BOOKS OF ACCOUNT AND RECORDS. Proper and complete records and
books of account shall be kept or shall be caused to be kept by the Company in
which shall be entered fully and accurately all transactions and other matters
relating to the Company's business in such detail and completeness as is
customary and usual for businesses of the type engaged in by the Company. The
books and records shall at all time be maintained at the principal executive
office of the Company and shall be open to the reasonable inspection and
examination of the Members or their duly authorized representatives during
reasonable business hours.
8.4 METHODS OF ACCOUNTING. All income tax and financial reports
and returns of the Company shall be prepared on an accounting basis approved by
the Managers. All elections with respect to tax matters to be made by or for
the Company shall be made by the Tax Matters Member.
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8.5 TAX MATTERS MEMBER.
(a) The taking of any action and the incurring of any
expense by the Tax Matters Member in connection with any federal, state or
local tax controversy or proceeding, except to the extent required by law, is
in the sole and absolute discretion of the Tax Matters Member. The provisions
relating to indemnification of the Members, set forth in Section 4.9 of this
Agreement, shall be fully applicable to the Tax Matters Member in its capacity
as such.
(b) All third-party costs and expenses incurred by the
Tax Matters Member in performing its duties as such (including legal and
accounting fees and expenses) shall be borne by the Company. Nothing contained
herein shall be construed to restrict the Company from engaging tax consultants
to assist the Tax Matters Member in discharging its duties hereunder.
8.6 MATTERS CONCERNING FUNDS. Funds of the Company shall be
deposited in an account or accounts of a type, in form and name and in a bank
or banks selected by the Managers. All funds of the Company shall be used
solely for the business of the Company or distributed as provided herein.
ARTICLE 9: TRANSFERABILITY AND WITHDRAWAL
9.1 TRANSFER LIMITATIONS.
(a) Generally. No Member may transfer (whether by sale,
assignment, pledge, hypothecation, exchange, gift, bequest or otherwise),
voluntarily or involuntarily, all or any of its Units (collectively
"TRANSFER"), nor shall any Member have the power to substitute a transferee in
its place as a substituted Member, except (i) with the prior written consent of
a Special Majority Interest of the remaining Members, if any (which consent may
be given or withheld in each Member's sole discretion), (ii) each Member may
pledge its Units as required under the terms of the Bridge Loan, or (iii)
pursuant to a merger approved under Section 4.2.
(b) Non-permitted Transferee Has No Right. A Person to
whom a Transfer of any interest is made in contravention of the provisions of
this Section 9.1: (i) shall not become a Member; (ii) shall not be entitled to
participate in any decision in respect of the Company's business in which its
assignor would otherwise have been entitled to participate; (iii) shall have no
right to require any information or accounting of any transactions of the
Company; and (iv) shall not be entitled to vote with respect to any Company
matter. Upon such a Transfer, the transferee shall be entitled only to a share,
based on the percentage of Units transferred, of the Company's Net Profits, Net
Losses and distributions of the Company's assets, if any, in which its assignor
would otherwise have been entitled to share.
(c) Company's Right to Purchase Membership Interest.
(i) Upon a Transfer of any interest in
contravention of the provisions of this Section 9.1, the Company shall have an
irrevocable option to purchase the Membership Interest
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owned by the transferring Member at the time of the Transfer. The Company may
exercise the option at any time prior to the time the transferee of such
Membership Interest is admitted as a Member. The purchase price of the
Membership Interest shall be based on the Membership Interest's fair market
value at the time of the Transfer and shall be determined by agreement of the
Members and the holder of the transferred interest (the "SUCCESSOR"); provided,
that if the Members do not agree on the fair market value for the Membership
Interest within 30 days after the Transfer, the fair market value shall be
determined by a qualified independent appraiser selected by the Company, whose
determination shall be final and binding on all of the parties. The Company
shall have the option of either paying the purchase price in one lump sum
payment or pursuant to an unsecured and subordinated promissory note (the
"NOTE") in five equal annual installments of principal and interest beginning
on the first anniversary date of such purchase, with interest payable on the
unpaid principal balance at the prime interest rate then in effect on the date
of the Note as published in The Wall Street Journal. The Company may, at its
option, prepay any portion or all of any one or more principal installments and
interest on the Note, without prepayment penalty, premium or charge, and
interest on such principal amounts prepaid shall cease to accrue on the date of
such prepayment.
(ii) The Company may exercise this option by
giving a notice in writing to the transferring Member or the Successor. If the
option is exercised by the Company, the closing of the purchase by the Company
of the Membership Interest shall be held at the principal office of the Company
at the date and time set by the Company, which date shall be within 30 days
after the date the Company gives written notice of exercise to the transferring
Member or the Successor. At the closing, the Company shall pay to the Successor
the consideration set forth in paragraph (a) above and the Member and the
Successor shall deliver to the Company all documentation reasonably required by
the Company to effectuate the transfer of the Membership Interest to the
Company.
(d) Absolute Restriction on Transfers. Notwithstanding
any provision of this Agreement to the contrary, transfer of a Unit to any
Person other than the Company or a Member will not be permitted if the Unit
sought to be transferred, when added to the total of all other Units
transferred within the period of twelve (12) consecutive months ending with the
proposed date of the transfer, results in the termination of the Company under
IRC ss. 708, without the prior written consent of a Special Majority Interest
of the Members. At the request, and at the sole cost and expense, of the
transferring Member, the Company will cooperate with such transferring Member
in any reasonable manner in order to determine whether the prospective transfer
will result in termination of the Company under IRC ss. 708.
9.2 TIME OF TRANSFER. Any transfer of a Unit to a third party
under this Article 9 shall be effective as of midnight of the last day of the
calendar month in which it is made, or, at the election of the Managers, as of
opening of business the day following the date of the transfer (the "EFFECTIVE
TRANSFER DATE").
9.3 DISTRIBUTIONS AND ALLOCATIONS IN RESPECT OF TRANSFERRED UNIT.
If any Unit is transferred during any accounting period to a third party or to
a Member in compliance with the provisions of this Article 9, Net Profits, Net
Losses, each item thereof and all other items attributable to such Unit for
such period shall be divided and allocated between the transferor and the
transferee by taking into account their varying interests during the period in
accordance with Article 9 hereof
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and Code Section 706(d), using the Effective Transfer Date as the date upon
which the change in ownership of the Unit occurred, and using any conventions
permitted by the Code or the Regulations and selected by the Managers. All
distributions on or before the Effective Transfer Date shall be made to the
transferor and all distributions thereafter shall be made to the transferee.
Neither the Company, the Managers nor any Member shall incur any liability for
making allocations and distributions in accordance with the provisions of this
Section 9.3, whether or not any of them has knowledge of any transfer of
ownership of any Unit.
9.4 NO WITHDRAWAL; EVENTS OF DISSOCIATION. No Member may withdraw
from the Company prior to the termination of the Company. A Member ceases to be
a Member if and only if: (a) a Member assigns his or her entire Membership
Interest (without regard to whether the assignees of such Membership Interest
become Members) or (b) a Member's entire Membership Interest is purchased or
redeemed by the Company. The foregoing is an exclusive list of events of
dissociation ("EVENTS OF DISSOCIATION") and shall supersede GLLCA ss.
00-00-000.
ARTICLE 10: ADDITIONAL MEMBERS
10.1 ADMISSION OF A NEW MEMBER. From the date of the formation of
the Company, any Person may become a Member of this Company as follows:
(a) upon approval by a Special Majority Interest, by the
issuance of the Company of Units for such consideration as a Special Majority
Interest shall determine, or
(b) as a transferee of a Member's Membership Interest or
any portion thereof (i) permitted under Section 9.1(a) or (ii) subsequently
accepted by a Special Majority Interest, subject to the terms and conditions of
this Agreement.
10.2 ALLOCATION. No new Members shall be entitled to any
retroactive allocation of losses, income or expense deductions incurred by the
Company. Members holding a Special Majority Interest may, at their option, at
the time a Member is admitted, close the Company books (as though the Company's
tax year had ended) or make pro rata allocations of loss, income and expense
deductions to a new Member for that portion of the Company's tax year in which
a Member was admitted in accordance with the provisions of IRC ss.706(d) and
the Regulations promulgated thereunder.
ARTICLE 11: DISSOLUTION AND TERMINATION
11.1 TERMINATION AND WINDING UP OF THE COMPANY. The Company shall
terminate upon the first to occur of: (a) the unanimous agreement of all
Members in writing; or (b) the sale of all or substantially all of the property
of the Company and the distribution to the Members of the proceeds of the sale.
No Event of Dissociation shall cause dissolution or termination of the Company.
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11.2 METHOD OF DISTRIBUTION UPON WINDING UP. Upon termination of
the Company pursuant to Section 11.1 above, the assets of the Company and the
proceeds of any liquidation shall be applied and distributed in the following
manner and order of priority:
(a) to the payment and discharge of all of the Company's
debts and liabilities, including without limitation any debt under the
Financing Documents, and the expenses of liquidation and dissolution;
(b) to the setting up of any reserves reasonably
necessary for any contingent or unforeseen liabilities or obligations of the
Company;
(c) to the payment of the balance, if any, of the
respective Capital Accounts of the Members (after making the allocations
required under the provisions of Article 8), but if the amount available for
such payment shall be insufficient, then pro rata among all of the Members
according to the respective positive balances of their Capital Accounts at such
time; and
(d) the remainder, if any, to the Members in accordance
with their respective Percentage Interests.
11.3 ORDERLY LIQUIDATION. A reasonable time shall be allowed for
the orderly liquidation of the assets of the Company and the discharge of
liabilities to creditors so as to enable the Members to minimize the normal
losses attendant upon a liquidation.
ARTICLE 12: GENERAL PROVISIONS
12.1 CERTIFICATES REPRESENTING UNITS AND LOST CERTIFICATES.
Certificates representing Units signed by the President (or other senior
officer of the Company) shall be issued upon request to each Member certifying
the number of Units owned by such Member. When such certificates are
countersigned (a) by a transfer agent other than the Company or its employee or
(b) by a registrar other than the Company or its employee, the signature of
such officer may be a facsimile. The Managers shall determine from time to time
the form of such certificates and may have placed thereon any legends they deem
appropriate. A new certificate may be issued in the place of any certificate
theretofore issued by the Company, alleged to have been lost or destroyed, and
the Managers may, in their discretion, require the owner of the lost or
destroyed certificate, or his legal representatives, to give the Company a
bond, in such sum as the Managers may direct, to indemnify the Company against
any claim that may be made against the Company on account of the alleged loss
of any such certificate, or the issuance of any such new certificate.
12.2 CERTIFICATION OF NON-FOREIGN STATUS. In order to comply with
IRC ss. 1445 of the IRC and the applicable Regulations thereunder, if the
disposition by the Company of a United States real property interest as defined
in the IRC and Regulations, each Member shall provide to the Company, an
affidavit stating, under penalties of perjury, (i) the Member's address, (ii)
United States Taxpayer identification number, and (iii) that the Member is not
a foreign person as that term is defined in the IRC and Regulations. Failure by
any Member to provide such affidavit by the date
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of such disposition shall authorize the Managers to withhold 10% of each such
Member's distributive share of the amount realized by the Company on the
disposition.
12.3 SURVIVAL. The representations, warranties, covenants and
agreements contained in this Agreement or in any certificate, exhibit, schedule
or other document executed and delivered by a party pursuant to, or in
connection with, this Agreement shall continue for the applicable limitations
period provided by law, and the remedies of a party for breaches of such
representations, warranties, covenants or agreements are not affected by any
investigation by, or knowledge of, the non- breaching party prior to the date
of this Agreement. No party has relied on any other representation, warranty or
assurance in entering into this Agreement.
ARTICLE 13: AMENDMENT
13.1 AMENDMENTS. Any amendment to this Agreement shall be made in
writing and signed by Members holding sufficient interests to approve such
amendment, as provided in Sections 4.2(c)(ii) and 4.2(d)(i).
ARTICLE 14: MISCELLANEOUS PROVISIONS
14.1 GOOD FAITH EFFORTS; FURTHER ASSURANCES; COOPERATION. The
parties shall in good faith undertake to perform their covenants, agreements
and obligations in this Agreement, to satisfy all conditions, and to cause the
purposes of this Agreement to be accomplished promptly in accordance with its
terms. Upon the execution of this Agreement and thereafter, each party shall do
such things as may be reasonably requested by the other party, at the expense
of the requesting party, in order more effectively to accomplish the purposes
and other agreements contemplated by this Agreement. The parties shall
cooperate with each other and their respective counsel and designees in
connection with any steps required to be taken as part of their respective
rights and obligations under this Agreement.
14.2 NOTICES. Each notice, communication and delivery under this
Agreement: (i) shall be made in writing signed by the party giving it; (ii)
shall specify the section of this Agreement pursuant to which given; (iii)
shall either be delivered in person or by telecopier, a nationally recognized
next business day delivery service or first class certified mail, return
receipt requested; (iv) unless delivered in person, shall be given to the
address specified below; (v) shall be deemed to be received (A) if delivered in
person, on the date delivered, or (B) if sent by telecopier, on the date of
telephonic confirmation of receipt or (C) if sent by a nationally recognized
next business day courier service with all costs paid, on the day after the
date delivered to such courier, or (D) if mailed first class certified mail,
return receipt requested, three days after the date so mailed. The addresses
are as follows:
Company: Strategic Timber Trust II, LLC
0 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Attn: C. Xxxxxx Xxxxx
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C. Xxxxxx Xxxxx: 0 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Xxxxxx X. Xxxxx: 0 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Xxxxxxxxxxx X. Xxxxx: 0 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Xxxxxxxx Xxxxxx: 0 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Xxxxxx X. Xxxxxxx: 0 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Xxxxxxxx X. Xxxxxx: 0 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP: 000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxx
Such notice shall be given to such other representatives or at such other
addresses as a party may furnish to the other parties pursuant to the
foregoing. If notice is given pursuant to this Section of a permitted successor
or assign of a party, then notice shall thereafter be given as set forth above
also to such successor or assign of such party.
14.3 SUCCESSORS IN INTEREST. This Agreement is binding upon the
parties and their respective legal representatives, heirs, devisees, legatees,
beneficiaries and successors and assigns and inures to the benefit of the
parties and their respective permitted legal representatives, heirs, devisees,
legatees, beneficiaries and other permitted successors and assigns (and to or
for the benefit of no other person, whether an employee or otherwise,
whatsoever).
14.4 SPECIFIC PERFORMANCE. Each of the parties acknowledges that
the rights contemplated by this Agreement are special, unique and of
extraordinary character and, thus, that if a party breaches this Agreement, an
award of monetary damages would be an inadequate remedy and the other partner
would be entitled (without the posting of a bond or other security) to
equitable relief, including injunctive relief and specific performance (and
each Member hereby irrevocably waives any defense based on the adequacy of the
remedy at law which might be asserted as a bar to such injunctive relief).
14.5 SEVERABILITY. Any determination by any court of competent
jurisdiction of the invalidity of any provision of this Agreement that is not
essential to accomplishing the purposes of this Agreement shall not affect the
validity of any other provision of this Agreement, which shall remain in full
force and effect and which shall be construed as to be valid under applicable
law.
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14.6 REMEDIES AND COSTS. The rights and remedies specified in any
provision of this Agreement are in addition to all other rights and remedies a
party may have under any other agreement or applicable law, including any right
to equitable relief and any right to xxx for damages as a result of a breach of
this Agreement (whether or not it elects to terminate this Agreement), and all
such rights and remedies are cumulative, except that indirect and consequential
damages shall not be recoverable under this Agreement (whether or not based on
contract, tort or any other legal theory and whether or not advised of the
possibility of such damages).
14.7 INTEGRATION; WAIVER. This Agreement and the other agreements
contemplated by this Agreement: (a) supersede all prior negotiations,
agreements and understandings between the parties with respect to its subject
matter and (b) constitute the entire agreement between the parties with respect
to its subject matter. No waiver by any to this Agreement of any provision (or
of a breach of any provision) of this Agreement, whether by conduct or
otherwise, in any one or more instances shall be deemed or construed either as
a further or continuing waiver of any such provision or breach or as a waiver
of any other provision (or of a breach of any other provision) of this
Agreement. No party has relied on any other representation, warranty or
assurance in entering into this Agreement.
14.8 CONTROLLING LAW. This Agreement is governed by, and shall be
construed and enforced in accordance with, the laws of the State of Georgia.
14.9 COPIES. This Agreement may be executed in two or more copies,
each of which shall be deemed an original, and it is not necessary in making
proof of this Agreement or its terms to produce or account for more than one of
such copies.
[signatures on following page]
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DULY EXECUTED by the Members as of the day and year first above
written.
/s/ C. Xxxxxx Xxxxx (L.S.)
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C. Xxxxxx Xxxxx
/s/ Xxxxxx X. Xxxxx (L.S.)
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Xxxxxx X. Xxxxx
/s/ Xxxxxxxxxxx X. Xxxxx (L.S.)
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Xxxxxxxxxxx X. Xxxxx
/s/ Xxxxxxxx Xxxxxx (L.S.)
-------------------------------------
Xxxxxxxx Xxxxxx
/s/ Xxxxxx X. Xxxxxxx (L.S.)
-------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxxxx X. Xxxxxx (L.S.)
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Xxxxxxxx X. Xxxxxx
XXXXXXXXXX, XXXXXX & XXXXXXX, LLP
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
* * * * *
