SCHEDULE 13E-3
EXHIBIT (D)(3)
MEMBERS AGREEMENT
This Agreement is made this 21st day of March 2000 (the "Effective Date")
between Xxxxxx X. Xxxx ("Xxxx") and Chez & Xxxxxxxx Inc. Profit Sharing Plan
dated 12/19/73 ("Xxxxxxxx").
WHEREAS, Xxxx and Xxxxxxxx, 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 XXXXXXXX'X UNITS. During the term of this
Agreement, Xxxxxxxx , except with respect to transfers within his family for
estate planning purposes when any transferees fully assume responsibility for
compliance with this Agreement, 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. Xxxxxxxx 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 XXXXXXXX.
(a) Xxxx may at any time after five years from the Effective Date, or
within thirty days of the death of Xxxxxx X. Xxxxxxxx, elect in a written notice
to Xxxxxxxx or his representative, if any, to purchase for cash all of the Units
then held by Xxxxxxxx at a price equal to the greater of Xxxxxxxx'x 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 book value of the
assets of the Company not used in the ordinary course of its business determined
in accordance with GAAP.
(b) Xxxxxxxx at anytime after 5 years from the effective date may
require that Xxxx purchase on the same terms and conditions and for the same
price as set forth in Section 2(a) above any or all of the units then held by
Xxxxxxxx.
(c) Xxxx may elect to pay for the purchase price of Units purchased
from Xxxxxxxx under this Section 2 in sixty equal monthly installments
commencing on the date such Units are purchased. The unpaid balance of the
purchase price of such Units shall accrue interest, payable with each monthly
installment of such purchase price, a the lower of eight percent or the minimum
rate of interest required at the time of the purchase of Units under this
Section 2 is made, in order to avoid the imputation of a higher rate of interest
under applicable provisions of the Internal Revenue Code and the regulations
issued thereunder. Notwithstanding any of the foregoing provisions of this
Section 2, Xxxx may prepay such purchase price, in whole or in part, at any time
or times, without penalty. Xxxx shall evidence his election to purchase Units on
an installment basis under this Section 2 by executing and delivering his
promissory note to Xxxxxxxx or Xxxxxxxx'x representative, if any, on the closing
date of such purchase.
(d) The closing date of a purchase of Units by Xxxx under this Section
2 shall occur within not less than thirty days following the date of Xxxx'x
notification to Xxxxxxxx of his election to purchase the Units permitted under
this Section 2.
(e) In the event that during the one year following the closing date
of Units by Xxxx under Section 2(a) 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 Xxxxxxxx or his representative, if any, by Xxxx under Section
2(a), then Xxxx shall be required to immediately pay to Xxxxxxxx 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 ("Claw Back Amount"). Additionally, should
Xxxx sell all or substantially all of the assets of AZI LLC during the one year
following the closing date of a Section 2(a) purchased by Xxxx, Xxxx shall be
required to likewise pay the Claw Back Amount to Xxxxxxxx or his personal
representative, if any, calculated in the same manner except that the product
shall be multiplied by the agreed to percentage of assets of AZI LLC actually
sold in the transaction requiring the payment of a Claw Back Amount.
3. BUY OUT OF XXXX.
(a) Xxxxxxxx may within thirty days of the death of Xxxx elect in a
written notice to Xxxx'x representative to purchase for cash all of the Units of
the Company then held by Xxxx at a price equal to the greater of Xxxx'x 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 3, "Agreed Value" shall be calculated in the same manner as
Agreed Value is calculated for the Units that may be purchased by Xxxx under
Section 2. The closing date of a purchase of Units by Xxxxxxxx under this
Section 3 shall occur within not less than thirty days following the date of
Xxxxxxxx'x notification to Xxxx'x representative of his election to purchase the
Units permitted under this Section 3.
(b) Xxxxxxxx may elect to pay for the purchase price of units
purchased from Xxxx pursuant to this Section 3 in accordance with the same terms
and conditions available to Xxxx for the repurchase of the Xxxxxxxx unit set
forth in Section 3(c) herein above.
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(c) In the event that during the one year following the closing date
of Units by Xxxxxxxx under Section 3(a) Xxxxxxxx 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 Xxxx or his representative, if any, by Xxxxxxxx under Section
3(a), then Xxxxxxxx shall be required to immediately pay to Xxxx 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 Xxxxxxxx ("Claw Back Amount"). Additionally,
should Xxxxxxxx sell all or substantially all of the assets of AZI LLC during
the one year following the closing date of a Section 2(a) purchased by Xxxxxxxx,
Xxxxxxxx shall be required to likewise pay the Claw Back Amount to Xxxx or his
personal representative, if any, calculated in the same manner except that the
product shall be multiplied by the agreed to percentage of assets of AZI LLC
actually sold in the transaction requiring the payment of a Claw Back Amount.
(d) In the event that Xxxxxxxx purchases the Units permitted under
this Xxxxxxx 0, Xxxxxxxx agrees to be bound by and comply with all of the
provisions of that certain Members Agreement of even date herewith between Xxxx
and The Xxxx Family Revocable Lifetime A B Trust dated October 14, 1998 as the
assignee of Xxxx thereunder.
4. XXXXXXXX'X 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 Xxxxxxxx in accordance with Section
2, then Xxxx shall promptly give written notice (the "Proposed Sale Notice") to
Xxxxxxxx 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) Xxxxxxxx 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 Xxxxxxxx may sell hereunder shall not exceed
an amount equal to the product of (i) the total number of Units then held by
Xxxxxxxx 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
Xxxxxxxx wishes to sell under his right to participate.
(c) If Xxxxxxxx elects to participate in the sale pursuant to this
Xxxxxxx 0, Xxxxxxxx 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 Xxxxxxxx elects to sell.
(d) The Unit certificate or certificates that Xxxxxxxx delivers to
Xxxx pursuant to Section 4(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 Xxxxxxxx that portion of the sale proceeds to which Xxxxxxxx is
entitled by reason of its participation in such sale.
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(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
Xxxxxxxx shall be reduced pro rata based on the number of Units they would have
been entitled to sell had the purchaser(s) purchased all the Units set forth in
the Proposed Sale Notice.
(f) If Xxxxxxxx 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 Xxxxxxxx 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 Xxxxxxxx set
forth in this Section 4 shall not apply to 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: (i) Xxxx shall inform Xxxxxxxx of such pledge or transfer prior to
effecting it and (ii) the pledgee or transferee shall furnish Xxxxxxxx with a
written agreement to be bound by and comply with all of the provisions of
Section 4.
5. 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 Xxxxxxxx'x death and
Xxxx'x failure to elect to purchase Units held by Xxxxxxxx in accordance with
Section 2 or (iv) the elapse of ten years following the date of this Agreement.
6. 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 Xxxxxxxx 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.
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(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.
(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
Date: March 21, 2000 /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
XXXXXXXX
Date: March 21, 2000 /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
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