EXHIBIT 3.2
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SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
COMPLETEL LLC
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TABLE OF CONTENTS
PAGE
ARTICLE I
GENERAL PROVISIONS; DEFINITIONS........................................ 2
Section 1.1 Formation of the Company; Term......................... 2
Section 1.2 Limited Liability Company Agreement.................... 2
Section 1.3 Name................................................... 3
Section 1.4 Purpose and Powers..................................... 3
Section 1.5 Principal Office; Registered Office and Agent.......... 3
Section 1.6 No State-Law Partnership............................... 3
Section 1.7 No UBTI................................................ 3
Section 1.8 Definitions............................................ 4
ARTICLE II
CAPITAL CONTRIBUTIONS AND ACCOUNTS..................................... 13
Section 2.1 Authorized Units....................................... 13
Section 2.2 Capital Contributions and Issuance of Units............ 13
Section 2.3 Capital Accounts....................................... 16
Section 2.4 Negative Capital Accounts.............................. 17
Section 2.5 No Interest............................................ 17
Section 2.6 No Withdrawal.......................................... 17
ARTICLE III
DISTRIBUTIONS AND ALLOCATIONS.......................................... 17
Section 3.1 Distributions.......................................... 17
Section 3.2 Allocations............................................ 20
Section 3.3 Special Allocations.................................... 21
Section 3.4 Tax Allocations........................................ 22
Section 3.5 Curative Allocations................................... 23
ARTICLE IV
THE PREFERRED UNITS.................................................... 24
Section 4.1 Conversion............................................. 24
Section 4.2 Purchase Rights........................................ 31
Section 4.3 Acceleration upon Occurrence of Certain Proceedings.... 31
ARTICLE V
MANAGEMENT............................................................. 32
Section 5.1 Management Authority................................... 32
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TABLE OF CONTENTS
PAGE
Section 5.2 Delegation of Authority................................ 32
Section 5.3 Composition; Meetings; Actions......................... 32
Section 5.4 Indemnification of Members, Representatives, Officers,
and Others ........................................... 33
ARTICLE VI
MEMBERS................................................................ 34
Section 6.1 Limitation of Liability................................ 34
Section 6.2 Lack of Authority of Individual Members................ 35
Section 6.3 Transfer of Company Interests; Withdrawal and Removal.. 35
Section 6.4 No Right of Partition.................................. 36
Section 6.5 Indemnification and Reimbursement for Payments
on Behalf of a Member.................................. 36
Section 6.6 Certain Duties of Representatives and Officers......... 36
Section 6.7 Confidentiality........................................ 37
Section 6.8 Voting Rights.......................................... 38
ARTICLE VII
DISSOLUTION AND LIQUIDATION............................................ 38
Section 7.1 Dissolution............................................ 38
Section 7.2 Liquidation of Company Interests....................... 38
Section 7.3 Valuation.............................................. 40
ARTICLE VIII
BOOKS OF ACCOUNT....................................................... 41
Section 8.1 Records and Accounting................................. 41
Section 8.2 Bank Accounts.......................................... 41
Section 8.3 Fiscal Year............................................ 41
Section 8.4 Tax Elections.......................................... 41
Section 8.5 Tax Reports............................................ 41
Section 8.6 Tax Controversies...................................... 41
Section 8.7 Subpart F Income....................................... 42
ARTICLE IX
POWER OF ATTORNEY...................................................... 42
ARTICLE X
MISCELLANEOUS.......................................................... 42
Section 10.1 Conversion of the Company into a "C" Corporation....... 42
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TABLE OF CONTENTS
PAGE
Section 10.2 Further Action......................................... 44
Section 10.3 Title to Company Assets................................ 44
Section 10.4 Creditors.............................................. 44
Section 10.5 Amendments, Modifications, or Waivers.................. 45
Section 10.6 Successors and Assigns................................. 45
Section 10.7 Remedies............................................... 45
Section 10.8 Governing Law.......................................... 45
Section 10.9 Severability........................................... 45
Section 10.10 Counterparts........................................... 45
Section 10.11 Descriptive Headings; Interpretation................... 46
Section 10.12 Notices................................................ 46
Section 10.13 Complete Agreement..................................... 48
Section 10.14 Business Days.......................................... 48
Section 10.15 Opt-in to Article 8 of the Uniform Commercial Code..... 48
Section 10.16 Delivery by Facsimile.................................. 48
Section 10.17 Effectiveness of Agreement............................. 48
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SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
COMPLETEL LLC
THIS SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
(this "AGREEMENT") is made as of January 28, 1999, by and among the Persons
listed as Members on the signature pages hereto, as well as each other Person
hereafter admitted as a Member (as defined herein) pursuant to the terms of this
Agreement. Certain capitalized terms used herein are defined in Section 1.8.
Xxxxxxxx X. XxXxxxxx ("XXXXXXXX"), Xxxxx X. Xxxxx ("DOVEY"), Xxxxxxx
X. Xxxxxxx ("XXXXXXX"), and Xxxxxxx X. Xxxxxxxxx ("XXXXXXXXX") were originally
parties to a Limited Liability Company Agreement, dated as of January 8, 1998
(the "PRIOR AGREEMENT"), governing the affairs and the conduct of business of a
limited liability company (the "COMPANY") in accordance with the terms of the
Act. On May 18, 0000, XxXxxxxx, Xxxxx, Xxxxxxx, Xxxxxxxxx, and Madison Dearborn
Capital Partners II, L.P. ("MDCP") entered into an Amended and Restated Limited
Liability Company Agreement of CableTel Europe LLC (as amended from time to time
in accordance with its terms, the "FIRST AMENDED AGREEMENT"), pursuant to which
MDCP was admitted as a Member of the Company and the Prior Agreement was amended
and restated in its entirety as set forth in the First Amended Agreement.
Pursuant to an Assignment and Substitution dated June 3, 1998 (the
"XXXXXXXX ASSIGNMENT"), XxXxxxxx transferred all of his Preferred Units and
Common Units in the Company to XxXxxxxx Holdings Limited Partnership ("XXXXXXXX
HOLDINGS") as of the date of the XxXxxxxx Assignment, and in connection
therewith XxXxxxxx Holdings became a Member of the Company in accordance with
the terms of the First Amended Agreement.
As of July 15, 1998, the Members amended the First Amended Agreement
in order to increase the total number of authorized Preferred Units and to admit
Xxxxx X. Xxxxx ("XXXXX") and Xxxxx X. Xxxxxxx ("XXXXXXX") as Members of the
Company.
Pursuant to an Assignment and Purchase Agreement dated as of
November 11, 1998, and a Substitution Agreement dated as of November 11, 1998
(collectively, the "DOVEY ASSIGNMENT"), Dovey transferred all of his Preferred
Units in the Company to Dovey Company LLC ("DOVEY LLC") and certain of his
Common Units in the Company to Dovey Family Partners LLLP ("DOVEY LLLP" and,
collectively with Dovey and Dovey LLC, the "DOVEY HOLDERS"). In connection
therewith, Dovey LLC and Dovey LLLP became Members of the Company in accordance
with the terms of the First Amended Agreement, and the Members amended the First
Amended Agreement in order to increase the total number of authorized Preferred
Units (to accommodate additional Preferred Units issued to Dovey LLC).
As of December 2, 1998, the Members amended the First Amended
Agreement in order to increase the total number of authorized Preferred Units
and to admit Xxxxx X. Xxxxx ("LACEY") as a Member of the Company.
During the period from the date of the First Amended Agreement to
the date hereof, each of the other Persons shown on the attached SCHEDULE OF
INITIAL UNITS as holding Common Units became a Member of the Company in
accordance with the terms of the First Amended Agreement.
As of the date hereof, the Members shown on the attached SCHEDULE OF
INITIAL UNITS as holding Preferred Units have amended and restated the Equity
Purchase Agreement, pursuant to which amendment such Members (including Xxxxxx
X. Xxxx ("XXXX") and Xxxx X. Xxxxx ("XXXXX")) will purchase additional Preferred
Units of the Company on the terms and conditions set forth in the Equity
Purchase Agreement. The parties hereto desire that, effective as of the date
hereof, each of Xxxx and Xxxxx shall be admitted as a Member of the Company and
the First Amended Agreement shall be amended and restated in its entirety as set
forth herein.
NOW, THEREFORE, in consideration of the mutual promises made herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
ARTICLE I
GENERAL PROVISIONS; DEFINITIONS
Section 1.1 FORMATION OF THE COMPANY; TERM. The Company was formed
as of January 8, 1998, by the execution and filing of a certificate of formation
of the Company with the Secretary of State of the State of Delaware setting
forth the information required by the Act (the "CERTIFICATE"). The term of the
Company commenced upon the filing of the Certificate and shall continue in
perpetuity until the dissolution and termination of the Company in accordance
with the provisions of ARTICLE VII hereof.
Section 1.2 LIMITED LIABILITY COMPANY AGREEMENT. The Members have
entered into this Agreement for the purpose of establishing the affairs of the
Company and the conduct of its business in accordance with the provisions of the
Act. The Members hereby agree that during the term of the Company set forth in
SECTION 1.1 the rights and obligations of the Members with respect to the
Company will be determined in accordance with the terms and conditions of this
Agreement and, except where the Act provides that such rights and obligations
specified in the Act shall apply "unless otherwise provided in a limited
liability company agreement" or words of similar effect and such rights and
obligations are set forth in this Agreement, the Act. The Members hereby
incorporate Section 18-210 of the Act (entitled "Contractual Appraisal Rights")
such that dissenting Members shall have contractual appraisal rights in
accordance with such Section with respect to any merger or consolidation in
which the Company is a constituent party to the merger or consolidation or any
sale of all or substantially all of the Company's assets.
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Section 1.3 NAME. The name of the Company shall be "CompleTel LLC"
or such other name or names as may from time to time be designated by the Board
of Managers. The Company's business may be conducted under its name and/or any
other name or names as the Board of Managers may deem advisable.
Section 1.4 PURPOSE AND POWERS. The Company is organized for the
object and purpose of engaging in all such lawful transactions and business
activities as may be determined by the Board of Managers. The Company shall have
any and all powers necessary or desirable to carry out the purposes and business
of the Company, to the extent that the same may be lawfully exercised by limited
liability companies under the Act.
Section 1.5 PRINCIPAL OFFICE; REGISTERED OFFICE AND AGENT.
(a) The principal office of the Company shall be located at 0000
Xxxxxxxx Xxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, or at such other place
(whether inside or outside the State of Delaware) as the Board of Managers may
from time to time designate. The Company may have such other offices (whether
inside or outside the State of Delaware) as the Board of Managers may from time
to time designate.
(b) The registered office of the Company in the State of Delaware is
located at 0000 Xxxxxx Xxxxxx, Xxxx xx Xxxxxxxxxx, Xxxxxx of Xxx Xxxxxx,
Xxxxxxxx 00000. The registered agent of the Company for service of process at
such address is The Corporation Trust Company. The Board of Managers may, in its
discretion, change the registered office and/or registered agent from time to
time by (i) filing the address of the new registered office and/or the name of
the new registered agent with the Secretary of State of the State of Delaware
pursuant to the Act and (ii) giving notice of such change to each of the
Members.
Section 1.6 NO STATE-LAW PARTNERSHIP. The Members intend that the
Company not be a partnership (including, without limitation, a limited
partnership) or joint venture, and that no Member be a partner or joint venturer
of any other Member by virtue of this Agreement, for any purposes other than as
set forth in the immediately following sentence, and neither this Agreement nor
any document entered into by the Company or any Member shall be construed to
suggest otherwise. The Members intend that the Company shall be treated as a
partnership for federal and, if applicable, state or local income tax purposes,
and the Company and each Member shall file all tax returns and shall otherwise
take all tax and financial reporting positions in a manner consistent with such
treatment.
Section 1.7 NO UBTI. Notwithstanding anything herein to the
contrary, the Company shall not, and no Member or Representative (or delegate
thereof) shall (or shall have the power or authority to) cause, permit, or
suffer the Company to: (i) invest directly in any Person considered a
flow-through entity for federal income tax purposes (other than an intermediate
holding company where such investment would not cause any Tax Exempt Partner to
recognize UBTI); (ii) create, incur, assume or suffer to exist any Indebtedness
of the Company; or (iii) knowingly enter into any other transaction that could
cause a Tax Exempt Partner to recognize UBTI as a result of
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its investment in any Member, PROVIDED, HOWEVER, that if such a transaction is
specifically contemplated by this Agreement or the Equity Purchase Agreement or
any of the other agreements contemplated by the exhibits thereto to which the
Company is a party, the Members agree to amend this Agreement or such other
agreements (to the extent they are parties thereto) to the extent necessary to
avoid causing a Tax Exempt Partner to recognize UBTI.
Section 1.8 DEFINITIONS. Capitalized terms used but not otherwise
defined herein shall have the following meanings:
"ACT" means the Delaware Limited Liability Company Act, 6 Del.L.
Section 18-101, ET SEQ., as it may be amended from time to time, and any
successor thereto.
"ADJUSTED CAPITAL ACCOUNT DEFICIT" means with respect to any Capital
Account as of the end of any Taxable Year, the amount by which the balance in
such Capital Account is less than zero. For this purpose, such Person's Capital
Account balance shall be
(i) reduced for any items described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5), and (6), and
(ii) increased for any amount such Person is obligated to
contribute or is treated as being obligated to contribute to
the Company pursuant to Treasury Regulation Section
1.704-1(b)(2)(ii)(c) (relating to partner liabilities to a
partnership) or 1.704-2(g)(1) and 1.704-2(i) (relating to
minimum gain).
"AFFILIATE" of any particular Person means (i) any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, by contract or otherwise, and (ii) if such Person (other than
the Company) is a partnership, any partner thereof.
"AGREEMENT" has the meaning set forth with respect thereto in the
preamble.
"XXXXX" has the meaning set forth with respect thereto in the
preamble.
"BOARD OF MANAGERS" means the board of managers of the Company
described in ARTICLE V.
"BOOK VALUE" means, with respect to any Company property, the
Company's adjusted basis for federal income tax purposes, adjusted from time to
time to reflect the adjustments required or permitted (in the case of permitted
adjustments, to the extent the Company makes such permitted adjustments) by
Treasury Regulation Section 1.704-1(b)(2)(iv)(d)-(g).
"CAPITAL ACCOUNT" has the meaning set forth with respect thereto in
SECTION 2.3(a).
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"CAPITAL CONTRIBUTIONS" means any cash, cash equivalents, promissory
obligations, or the Fair Market Value of other property which a Member
contributes or is deemed to have contributed to the Company with respect to the
issuance of any Unit pursuant to SECTION 2.2, or (in the case of any Preferred
Units) pursuant to the Equity Purchase Agreement, or (in the case of any Senior
Units) pursuant to the Executive Securities Agreements, the Performance Vesting
Agreement, or the Equity Purchase Agreement.
"CERTIFICATE" has the meaning set forth with respect thereto in
SECTION 1.1.
"CLASS A SENIOR UNIT" means a Unit representing a fractional part of
the Members' interests in the Profits, Losses, and Distributions of the Company
and having the rights and obligations specified with respect to Class A Senior
Units in this Agreement.
"CLASS B SENIOR UNIT" means a Unit representing a fractional part of
the Members' interests in the Profits, Losses, and Distributions of the Company
and having the rights and obligations specified with respect to Class B Senior
Units in this Agreement.
"CLASS B SENIOR VALUE" of any Class B Senior Unit as of any
particular date shall be equal to (i) the aggregate Liquidation Value of the
Preferred Unit(s) (including fractional Units) in respect of the forfeiture of
which under the Performance Vesting Agreement such Class B Senior Unit was
issued, as in effect on the date of such forfeiture, MINUS (ii) the aggregate
Distributions of Class B Senior Value made pursuant to SECTIONS 3.1(c)(ii) and
3.1(f)(ii) with respect to such Class B Senior Unit from the date of issuance
prior to such particular date.
"CLASS B SENIOR YIELD," with respect to each Class B Senior Unit,
shall accrue on a daily basis at the rate of 8% per annum of the sum of the
Class B Senior Value plus all accumulated (as provided below) and unpaid Class B
Senior Yield thereon from and including the date of issuance of such Class B
Senior Unit (and with respect to accumulated Class B Senior Yield, from and
including the Yield Reference Dates on which such Class B Senior Yield was
accumulated) to and including the date on which the Class B Senior Value of such
Class B Senior Unit (plus all accrued but unpaid Class B Senior Yield thereon)
is paid. The date on which the Company initially issues any Class B Senior Unit
shall be deemed its "date of issuance" regardless of the number of times
transfer of such Class B Senior Unit is made on the records of the Company and
regardless of the number of certificates (if any) which may be issued to
evidence such Class B Senior Unit. To the extent not distributed on March 31,
June 30, September 30, and December 31 of each year, commencing after the date
of issuance, (the "YIELD REFERENCE DATES"), all Class B Senior Yield which has
accrued on each Class B Senior Unit outstanding during the three-month period
ending on such Yield Reference Date and, with respect to the first Yield
Reference Date, during the period from the date of issuance of each Class B
Senior Unit through such first Yield Reference Date, shall be accumulated (and
shall be referred to herein as "accumulated Class B Senior Yield") and shall
remain accumulated Class B Senior Yield with respect to such Class B Senior Unit
until paid.
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"CLASS C SENIOR UNIT" means a Unit representing a fractional part of
the Members' interests in the Profits, Losses, and Distributions of the Company
and having the rights and obligations specified with respect to Class C Senior
Units in this Agreement.
"XXXXXXXXX" has the meaning set forth with respect thereto in the
preamble.
"CODE" means the United States Internal Revenue Code of 1986, as
amended. Such term shall, at the Board of Managers' sole discretion, be deemed
to include any future amendments to the Code and any corresponding provisions of
succeeding Code provisions (whether or not such amendments and corresponding
provisions are mandatory or discretionary; PROVIDED, however, that if they are
discretionary, the term "Code" shall not include them if including them would
have a material adverse effect on any Member).
"COMMON UNIT" means a Unit representing a fractional part of the
Members' interests in the Profits, Losses, and Distributions of the Company and
having the rights and obligations specified with respect to Common Units in this
Agreement; PROVIDED that with respect to ARTICLE IV hereof, "Common Units" shall
include any securities of any class of the Company's equity securities hereafter
authorized which is not limited to a fixed sum or percentage of par or stated
value with respect to the rights of the holders thereof to participate in
dividends or other interim distributions or in the distribution of assets upon
any liquidation, dissolution or winding up of the Company.
"COMMON UNITS DEEMED OUTSTANDING" means, at any given time, the
number of Common Units actually outstanding at such time, plus the number of
Common Units deemed to be outstanding pursuant to SECTION 4.1(c)(i) and (ii),
whether or not the Options or Convertible Securities are actually exercisable or
convertible at such time, in each case, without duplication.
"COMPANY" has the meaning set forth with respect thereto in the
preamble, and, where the context requires, any successor entity described in
SECTION 10.1.
"CONFIDENTIAL INFORMATION" has the meaning set forth with respect
thereto in SECTION 6.7.
"CONVERSION PRICE" means the conversion price of the Preferred Units
as determined pursuant to SECTION 4.1.
"CONVERSION SECURITY" means a Common Unit of the Company; PROVIDED
that if there is a change such that the securities issuable upon conversion of
the Preferred Units are issued by an entity other than the Company or there is a
change in the type or class of securities so issuable, then the term "Conversion
Security" shall mean one share of the security issuable upon conversion of the
Preferred Units if such security is issuable in shares, or shall mean the
smallest unit in which such security is issuable if such security is not
issuable in shares.
"CONVERTIBLE SECURITIES" means any stock or securities directly or
indirectly convertible into or exchangeable for Common Units.
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"CURRENT PRICE" means, as of any given date, the highest Liquidation
Value of any Preferred Unit outstanding as of such date.
"XXXXXXXX" has the meaning set forth with respect thereto in the
preamble.
"XXXXXXXX ASSIGNMENT" has the meaning set forth with respect thereto
in the preamble.
"XXXXXXXX HOLDINGS" has the meaning set forth with respect thereto
in the preamble.
"DISTRIBUTION" means each distribution made by the Company to a
Member, whether in cash, property or securities of the Company and whether by
liquidating distribution, redemption, repurchase or otherwise; PROVIDED that a
Distribution shall not include any recapitalization or exchange of securities of
the Company, or any subdivision (by Unit split or otherwise) or any combination
(by reverse Unit split or otherwise) of any outstanding Units.
"DOVEY" has the meaning set forth with respect thereto in the
preamble.
"DOVEY ASSIGNMENT" has the meaning set forth with respect thereto in
the preamble.
"DOVEY HOLDERS" has the meaning set forth with respect thereto in
the preamble.
"DOVEY LLC" has the meaning set forth with respect thereto in the
preamble.
"DOVEY LLLP" has the meaning set forth with respect thereto in the
preamble.
"EQUITY PURCHASE AGREEMENT" means that certain equity purchase
agreement dated the date of the First Amended Agreement (and amended and
restated as of the date hereof), by and between the Company, the Investors, and
the other Persons listed on the signature pages thereto as amended from time to
time in accordance with its terms.
"EVENT OF WITHDRAWAL" means the death, retirement, resignation,
expulsion, bankruptcy or dissolution of a Member or the occurrence of any other
event that terminates the continued membership of a Member in the Company.
"EXECUTIVE SECURITIES AGREEMENTS" has the meaning ascribed to such
term in the Equity Purchase Agreement.
"EXECUTIVES" means the Original Executives, Lacey, and each other
holder of the Company's Common Units issued pursuant to the Executive Securities
Agreements.
"FAIR MARKET VALUE" means, with respect to any asset, its fair
market value determined according to SECTION 7.3.
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"FIRST AMENDED AGREEMENT" has the meaning set forth with respect
thereto in the preamble.
"FISCAL PERIOD" means any interim accounting period within a Taxable
Year established by the Board of Managers and which is permitted or required by
Code Section 706.
"FISCAL YEAR" means the Company's annual accounting period
established pursuant to SECTION 8.3.
"HOLLAND" has the meaning set forth with respect thereto in the
preamble.
"XXXXX" has the meaning set forth with respect thereto in the
preamble.
"INDEBTEDNESS" means at a particular time, without duplication, (i)
any indebtedness for borrowed money or indebtedness issued in substitution for
or exchange of indebtedness for borrowed money, (ii) any indebtedness evidenced
by any note, bond, debenture or other debt security, (iii) any indebtedness for
the deferred purchase price of property or services with respect to which a
Person is liable, contingently or otherwise, as obligor or otherwise (other than
trade payables and other current liabilities incurred in the ordinary course of
business which are not more than six months past due), and (iv) any commitment
by which a Person assures a creditor against loss (including, without
limitation, contingent reimbursement obligations with respect to letters of
credit).
"INDEMNIFIED PERSON" has the meaning set forth with respect thereto
in SECTION 5.4.
"INVESTORS" has the meaning set forth with respect thereto in the
Equity Purchase Agreement.
"KEY EMPLOYEE" has the meaning set forth with respect thereto in
SECTION 2.2(c)(ii).
"LACEY" has the meaning set forth with respect thereto in the
preamble.
"XXXX" has the meaning set forth with respect thereto in the
preamble.
"LIQUIDATING DISTRIBUTIONS" has the meaning set forth with respect
thereto in SECTION 3.1(c).
"LIQUIDATION VALUE" of any Preferred Unit as of any particular date
shall be equal to (i) the initial price paid to the Company for such Preferred
Unit on its date of issuance, PLUS (ii) the aggregate additional Capital
Contributions to the Company made pursuant to the provisions of the Equity
Purchase Agreement with respect to such Preferred Unit from the date of issuance
until and including such particular date, and MINUS (iii) the aggregate
Distributions of Liquidation Value made pursuant to SECTIONS 3.1(c)(ii) and
3.1(f)(ii) with respect to such Preferred Unit from the date of issuance prior
to such particular date.
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"LOSSES" means items of Company loss and deduction determined in
accordance with SECTION 2.3(b).
"MDCP" has the meaning set forth with respect thereto in the
preamble.
"MEMBER" means each of the Persons listed on the signature pages
hereto as Members and each Person who is admitted to the Company as a Member
pursuant to SECTION 6.3 or SECTION 2.2, in each case so long as such Person
continues to hold any Units.
"MINIMUM GAIN" means the partnership minimum gain determined
pursuant to Treasury Regulation Section 1.704-2(d).
"NON-PERFORMANCE-VESTING SECURITIES" means Common Units other than
Performance Vesting Securities.
"OPTIONS" means any rights, warrants or options to subscribe for or
purchase Common Units or Convertible Securities.
"ORGANIC CHANGE" has the meaning set forth with respect thereto in
SECTION 4.1(e).
"ORIGINAL EXECUTIVES" means Dovey, Pearson, and Xxxxxxxxx.
"OTHER BUSINESS" has the meaning set forth with respect thereto in
SECTION 6.6.
"XXXXXXX" has the meaning set forth with respect thereto in the
preamble.
"PERFORMANCE VESTING AGREEMENT" means that certain performance
vesting agreement dated the date of the First Amended Agreement (and amended and
restated as of the date hereof), by and between the Company, the Investors, and
certain of the Executives, as amended from time to time in accordance with its
terms.
"PERFORMANCE-VESTING SECURITIES" means Common Units of the Company
that are subject to performance vesting under the provisions of the Performance
Vesting Agreement.
"PERSON" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.
"PREFERRED UNIT" means a Unit representing a fractional part of the
Members' interests in the Profits, Losses, and Distributions of the Company and
having the rights and obligations specified with respect to Preferred Units in
this Agreement.
"PREFERRED YIELD," with respect to each Preferred Unit, shall accrue
on a daily basis at the rate of 8% per annum of the sum of the Liquidation Value
plus all accumulated (as provided
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below) and unpaid Preferred Yield thereon from and including the date of
issuance of such Preferred Unit (and with respect to accumulated Preferred
Yield, from and including the Yield Reference Dates on which such Preferred
Yield was accumulated) to and including the date on which the Liquidation Value
of such Preferred Unit (plus all accrued but unpaid Preferred Yield thereon) is
paid. The date on which the Company initially issues any Preferred Unit shall be
deemed its "date of issuance" regardless of the number of times transfer of such
Preferred Unit is made on the records of the Company and regardless of the
number of certificates (if any) which may be issued to evidence such Preferred
Unit. To the extent not distributed on March 31, June 30, September 30, and
December 31 of each year, commencing after the date of issuance (the "YIELD
REFERENCE DATES"), all Preferred Yield which has accrued on each Preferred Unit
outstanding during the three-month period ending on such Yield Reference Date
and, with respect to the first Yield Reference Date, during the period from the
date of issuance of each Preferred Unit through such first Yield Reference Date,
shall be accumulated (and shall be referred to herein as "accumulated Preferred
Yield") and shall remain accumulated Preferred Yield with respect to such
Preferred Unit until paid.
"PRIOR AGREEMENT" has the meaning set forth with respect thereto in
the preamble.
"PROCEEDINGS" has the meaning set forth with respect thereto in
SECTION 4.3.
"PROFITS" means items of Company income and gain determined
according to SECTION 2.3(b).
"PUBLIC OFFERING" means any underwritten sale of the Company's
common stock pursuant to an effective registration statement under the
Securities Act filed with the Securities and Exchange Commission on Form S-1 (or
a successor form adopted by the Securities and Exchange Commission); PROVIDED
that the following shall not be considered a Public Offering: (i) any issuance
of common stock as consideration for a merger or acquisition, and (ii) any
issuance of common stock or rights to acquire common stock to existing
securityholders or to employees of the Company or its Subsidiaries on Form S-4
or Form S-8 (or a successor form adopted by the Securities and Exchange
Commission) or otherwise.
"PURCHASE RIGHTS" has the meaning set forth with respect thereto in
SECTION 4.2.
"QUALIFIED PUBLIC OFFERING" means a Public Offering where both (i)
the proceeds (net of underwriting discounts and commissions) received by the
Company in exchange for its issuance of shares of common stock in such Public
Offering equal or exceed $60 million, AND (ii) the price per share of common
stock paid to the Company in such Public Offering equals or exceeds the product
of (x) 3.0 TIMES (y) the quotient of (A) the aggregate capital contributions to
the Company under the Equity Purchase Agreement (including the initial purchase
price and all "Subsequent Contributions") made on or prior to the date of such
Public Offering with respect to all "Purchaser Securities" then outstanding,
DIVIDED BY (B) the number of shares of the Company's common stock represented by
all "Purchaser Securities" (on a fully diluted, as-if-converted basis)
outstanding immediately prior to the consummation of such Public Offering. For
purposes of this definition,
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"Subsequent Contributions" and "Purchaser Securities" have the meanings set
forth with respect thereto in the Equity Purchase Agreement.
"REGULATORY ALLOCATIONS" has the meaning ascribed to such term in
SECTION 3.5.
"REPRESENTATIVE" means a representative duly elected to the Board of
Managers as provided in SECTION 5.3.
"REQUIRED VOTE" shall mean the affirmative vote of the holders of a
majority of the Common Units (including the Preferred Units, on an
as-if-converted basis) outstanding as of the record date for such vote.
"SALE OF THE COMPANY" means the arm's length sale of the Company to
a third party or group of third parties acting in concert, pursuant to which
such party or parties acquire (i) equity securities of the Company possessing
the voting power under normal circumstances to control the Company, or (ii) all
or substantially all of the Company's assets determined on a consolidated basis
(in either case, whether by merger, consolidation, sale or transfer of the
Company's equity securities, or sale or transfer of the Company's consolidated
assets).
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
applicable rules and regulations thereunder, and any successor to such statute,
rules or regulations. Any reference herein to a specific section of, or any
rule, regulation, or form promulgated under, the Securities Act shall be deemed
to include any corresponding provisions of future law.
"SECURITIES AND EXCHANGE COMMISSION" means the U.S. Securities and
Exchange Commission and any successor governmental agency or regulatory body.
"SECURITYHOLDERS AGREEMENT" means that certain securityholders
agreement dated the date of the First Amended Agreement (and amended and
restated as of the date hereof), by and between the Company and certain of its
securityholders, as amended from time to time in accordance with its terms.
"SENIOR UNITS" means the Class A Senior Units, the Class B Senior
Units, and the Class C Senior Units.
"SUBSIDIARY" means, with respect to any Person, any corporation,
limited liability company, partnership, association or business entity of which
(i) if a corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity (other than
a corporation), a majority of partnership or other similar ownership interest
thereof is at the time owned or controlled, directly or indirectly, by any
Person or one or more Subsidiaries of that Person or a combination thereof. For
purposes hereof, a Person or Persons shall be deemed
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to have a majority ownership interest in a limited liability company,
partnership, association or other business entity (other than a corporation) if
such Person or Persons shall be allocated a majority of limited liability
company, partnership, association or other business entity gains or losses or
shall be or control any managing director or general partner of such limited
liability company, partnership, association or other business entity. For
purposes hereof, references to a "SUBSIDIARY" of any Person shall be given
effect only at such times that such Person has one or more Subsidiaries, and,
unless otherwise indicated, the term "SUBSIDIARY" refers to a Subsidiary of the
Company.
"TAX EXEMPT PARTNER" means any equityholder of a Member (or, with
respect to any equityholder of a Member that is taxed as a partnership for
federal income tax purposes (a "flow-through entity"), any equityholder of such
flow-through entity) which is exempt from income taxation under Section 501(a)
of the Code.
"TAX MATTERS MEMBER" has the meaning set forth with respect thereto
in SECTION 8.6.
"TAXABLE YEAR" means the Company's accounting period for federal
income tax purposes determined pursuant to SECTION 8.4.
"TRANSFER" has the meaning set forth with respect thereto in
SECTION 6.3.
"TREASURY REGULATIONS" means the income tax regulations promulgated
under the Code and effective as of the date hereof. Such term shall, at the
Board of Managers' sole discretion, be deemed to include any future amendments
to such regulations and any corresponding provisions of succeeding regulations
(whether or not such amendments and corresponding provisions are mandatory or
discretionary; PROVIDED, however, that if they are discretionary, the term
"Treasury Regulations" shall not include them if including them would have a
material adverse effect on any Member).
"UBTI" means unrelated business taxable income as defined in
Section 512 and Section 514 of the Code.
"UNIT" means a Member's interest in the Profits, Losses and
Distributions of the Company representing a fractional part of the aggregate
interests in the Profits, Losses, and Distributions of the Company of all
Members and shall include Common Units, Preferred Units, and Senior Units;
PROVIDED that any class or group of Units issued shall have the relative rights,
powers, duties, and obligations specified with respect to such class or group of
Units in this Agreement, and the interest of such class or group of Units in the
Profits, Losses, and Distributions of the Company shall be determined in
accordance with such relative rights, powers, duties, and obligations.
"UNIT OWNERSHIP LEDGER" has the meaning set forth with respect
thereto in SECTION 2.2(f).
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ARTICLE II
CAPITAL CONTRIBUTIONS AND ACCOUNTS
Section 2.1 AUTHORIZED UNITS. The total authorized Units which the
Company has authority to issue consist of:
(a) 65,750 Preferred Units;
(b) 107,500 Common Units;
(c) an unlimited number of Class A Senior Units, PROVIDED that all
authorized but unissued Class A Senior Units shall be reserved for issuance in
exchange for other Units pursuant to the terms of the Executive Securities
Agreements, and such Class A Senior Units may be issued only in exchange for
other Units pursuant to the terms of the Executive Securities Agreements and
under no other circumstances;
(d) an unlimited number of Class B Senior Units, PROVIDED that all
authorized but unissued Class B Senior Units shall be reserved for issuance in
exchange for other Units pursuant to the terms of the Performance Vesting
Agreement, and such Class B Senior Units may be issued only in exchange for
other Units pursuant to the terms of the Performance Vesting Agreement and under
no other circumstances; and
(e) an unlimited number of Class C Senior Units, PROVIDED that all
authorized but unissued Class C Senior Units shall be reserved for issuance in
exchange for other Units pursuant to the terms of the Equity Purchase Agreement,
and such Class C Senior Units may be issued only in exchange for other Units
pursuant to the terms of the Equity Purchase Agreement and under no other
circumstances.
Section 2.2 CAPITAL CONTRIBUTIONS AND ISSUANCE OF UNITS.
(a) INITIAL ISSUANCES OF COMMON UNITS. Prior to or contemporaneously
with the execution of this Agreement, each Member set forth on the attached
SCHEDULE OF INITIAL UNITS as holding Common Units has, pursuant to the Prior
Agreement, the First Amended Agreement, and/or an Executive Securities Agreement
entered into between the Company and such Member, made Capital Contributions to
the Company in the aggregate amount set forth opposite such Member's name on the
attached SCHEDULE OF INITIAL UNITS in exchange for, and the Company has issued
to such Member, the number of Common Units set forth opposite such Member's name
on the attached SCHEDULE OF INITIAL UNITS.
(b) INITIAL ISSUANCES OF PREFERRED UNITS. Prior to or
contemporaneously with the execution of this Agreement, each Member set forth on
the attached SCHEDULE OF INITIAL UNITS as holding Preferred Units has, pursuant
to the Equity Purchase Agreement, made Capital Contributions to the Company in
the aggregate amounts set forth opposite such Member's name on the attached
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SCHEDULE OF INITIAL UNITS with respect to, and the Company has issued to such
Member, the number of Preferred Units set forth opposite such Member's name on
the attached SCHEDULE OF INITIAL UNITS.
(c) ADDITIONAL ISSUANCES OF COMMON UNITS TO KEY EMPLOYEES.
(i) 1,475 of the Company's authorized but unissued Common
Units (471 of which shall be Performance-Vesting Securities and 1,004 of
which shall be Non-Performance-Vesting Securities) are reserved for
issuance pursuant to this SECTION 2.2(c).
(ii) From time to time on or after the date hereof, the Board
of Managers may approve the offer and issuance of such authorized but
unissued Common Units to management or other key employees (each a "KEY
EMPLOYEE") of the Company and its Subsidiaries. The Company's senior
management shall make recommendations to the Board of Managers concerning,
and the Board of Managers shall have sole and complete power and
discretion to approve and determine, which Key Employees shall be offered
such Common Units, the number of Common Units to be offered and issued to
each such purchasing Key Employee, and the purchase price to be paid for
the Common Units issued to each such purchasing Key Employee. None of the
Common Units reserved for issuance pursuant to this SECTION 2.2(c) shall
be offered or issued to any Person without the prior approval of the Board
of Managers; PROVIDED that the Board of Managers shall not cause or suffer
the Company to issue any of such Common Units to any Person other than a
Key Employee of the Company or its Subsidiaries.
(iii) If at any time after the date hereof (A) the Board of
Managers determines in its sole discretion that the Company and its
Subsidiaries have hired a complete management team and that no further
Common Units are required for issuance to additional Key Employees of the
Company and its Subsidiaries, and (B) there exist as of the date of such
determination any Common Units reserved for issuance pursuant to this
SECTION 2.2(c) that remain authorized and unissued, then (I) there shall
be issued to all Original Executives that continue to be Key Employees of
the Company and its Subsidiaries as of the date of such determination (pro
rata among such Original Executives based on the number of Common Units
held by each such Original Executive) a number of such reserved Common
Units equal to the sum of (1) the lesser of (x) the number (if any) of
Non-Performance-Vesting Securities reserved for issuance pursuant to this
SECTION 2.2(c) that remain authorized and unissued as of the date of such
determination and (y) 1,050 of the number of Non-Performance-Vesting
Securities set forth in SECTION 2.2(c)(i), PLUS (2) the lesser of (x) the
number (if any) of Performance-Vesting Securities reserved for issuance
pursuant to this SECTION 2.2(c) that remain authorized and unissued as of
the date of such determination and (y) 450 of the number of
Performance-Vesting Securities set forth in SECTION 2.2(c)(i), and (II)
any authorized but unissued Common Units reserved for issuance pursuant to
this SECTION 2.2(c) that are not issued pursuant to clause (I) shall as of
the date of such determination be canceled and shall no longer be
considered authorized Common Units for any purpose. For purposes of the
above calculations, each of the numbers of Common Units set forth in this
- 14 -
paragraph (iii) shall be equitably adjusted for any securities splits,
securities dividends, securities combinations, recapitalizations, or
reorganizations affecting the Common Units.
(iv) In connection with any issuance of Common Units to a Key
Employee of the Company and its Subsidiaries pursuant to this
SECTION 2.2(c) (including any issuance to an Original Executive pursuant
to paragraph (iii)), (A) such purchasing Key Employee shall make Capital
Contributions to the Company in exchange for such purchased Common Units
in the aggregate amount equal to the purchase price therefor (as
determined by the Board of Managers); (B) such Key Employee shall execute
a counterpart hereto (or joinder and rights agreement) accepting and
agreeing to be bound by all of the terms and conditions hereof, and shall
enter into such other documents and instruments to effect such purchase as
are required by the Board of Managers (including, without limitation, an
Executive Securities Agreement, a joinder and rights agreement (pursuant
to which such purchasing Key Employee shall become a party to the
Securityholders Agreement, the Registration Agreement, and the Performance
Vesting Agreement), and such other documents, instruments, or certificates
as are determined by the Board of Managers); and (C) such Key Employee's
Executive Securities Agreement shall specify which portion of the Common
Units issued to such Key Employee shall constitute Performance-Vesting
Securities and which portion shall constitute Non-Performance-Vesting
Securities, and the Performance-Vesting Securities shall be subject to
performance vesting under the terms of the Performance Vesting Agreement
(it being understood that in general such Common Units will be issued in
"strips" consisting of Non-Performance-Vesting Securities and
Performance-Vesting Securities in the ratio of 7:3, but that the Board of
Managers may decide to issue such Common Units in such other amounts or
ratios as it shall determine in its sole discretion). Any Common Units
issued to the Original Executives pursuant to SECTION 2.2(c)(iii) above
shall be subject to time vesting under the Executive Securities Agreements
and subject to performance vesting under the Performance Vesting Agreement
in the same manner as the Common Units issued to the Original Executives
under SECTION 2.2(a), and such Common Units issued pursuant to
SECTION 2.2(c)(iii) shall be deemed time vested under the Executive
Securities Agreements and performance vested (or, if applicable,
forfeited) under the Performance Vesting Agreement in the same proportion
as if such Common Units had been issued to the Original Executives on the
date of the First Amended Agreement pursuant to SECTION 2.2(a).
(d) ADDITIONAL ISSUANCES OF UNITS. Subject to the reservation of
Units pursuant to the terms of this Agreement or pursuant to any resolution of
the Board of Managers and to the other restrictions on issuance set forth herein
and in the other agreements to which the Company is a party (including, without
limitation, in Section 6J (Preemptive Rights) of the Equity Purchase Agreement),
the Company shall issue authorized but unissued Units at such times and from
time to time, to such Persons, in such amounts, at such price and on such other
terms and conditions as shall be determined and approved by the Board of
Managers in its sole discretion. If any Units are repurchased, redeemed, or
otherwise reacquired by the Company, such Units shall be returned to authorized
but unissued Units, and such Units shall be available for reissuance in
accordance with
- 15 -
the terms of this SECTION 2.2(d). Other than as set forth in this SECTION 2.2,
the Company shall not offer or issue any Units to any Person.
(e) CERTIFICATES. All Units issued hereunder shall be
uncertificated; PROVIDED that the Board of Managers may approve a specie form of
certificate and issue to the Members such certificates specifying the number and
type of Units held by each such Member.
(f) UNIT OWNERSHIP LEDGER. The Company shall create and maintain a
ledger (the "UNIT OWNERSHIP LEDGER") setting forth the name of each Member and
the number of each class of Units held by each such Member. Upon any change in
the number or ownership of outstanding Units (whether upon an issuance of Units,
a transfer of Units, a cancellation of Units or otherwise), the Company shall
amend and update the Unit Ownership Ledger and shall deliver a copy of such
updated ledger to each holder of Units. The requirements of this paragraph (f)
shall terminate upon a Public Offering.
Section 2.3 CAPITAL ACCOUNTS.
(a) The Company shall establish and maintain a separate "CAPITAL
ACCOUNT" for each Member according to the rules of Treasury Regulation Section
1.704-1(b)(2)(iv). For this purpose, the Company may (in the discretion of the
Board of Managers), upon the occurrence of the events specified in Treasury
Regulation Section 1.704-1(b)(2)(iv)(f), increase or decrease the Capital
Accounts in accordance with the rules of such regulation and Treasury Regulation
Section 1.704- 1(b)(2)(iv)(g) to reflect a revaluation of Company property.
(b) For purposes of computing the amount of any item of Company
income, gain, loss or deduction to be allocated pursuant to Article III and to
be reflected in the Capital Accounts, the determination, recognition and
classification of any such item shall be the same as its determination,
recognition and classification for U.S. federal income tax purposes (including
any method of depreciation, cost recovery or amortization used for this
purpose), PROVIDED THAT:
(i) The computation of all items of income, gain, loss and
deduction shall include those items described in Code Section 705(a)(l)(B)
or Code Section 705(a)(2)(B) and Treasury Regulation Section
1.704-1(b)(2)(iv)(i), without regard to the fact that such items are not
includable in gross income or are not deductible for federal income tax
purposes.
(ii) If the Book Value of any Company property is adjusted
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or (f), the
amount of such adjustment shall be taken into account as gain or loss from
the disposition of such property.
(iii) Items of income, gain, loss or deduction attributable to
the disposition of Company property having a Book Value that differs from
its adjusted basis for tax purposes shall be computed by reference to the
Book Value of such property.
- 16 -
(iv) Items of depreciation, amortization and other cost
recovery deductions with respect to Company property having a Book Value
that differs from its adjusted basis for tax purposes shall be computed by
reference to the property's Book Value in accordance with Treasury
Regulation Section 1.704-1(b)(2)(iv)(g).
(v) To the extent an adjustment to the adjusted tax basis of
any Company asset pursuant to Code Sections 732(d), 734(b) or 743(b) is
required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to
be taken into account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain (if
the adjustment increases the basis of the asset) or loss (if the
adjustment decreases such basis).
(vi) Items of income, gain, loss and deduction of the Company
shall be computed as if the Company had sold any property distributed to a
Member on the date of such distribution at a price equal to its Fair
Market Value at that date.
Section 2.4 NEGATIVE CAPITAL ACCOUNTS. No Member shall be required
to pay to any other Member or the Company any deficit or negative balance which
may exist from time to time in such Member's Capital Account (including upon and
after dissolution of the Company).
Section 2.5 NO INTEREST. Except as otherwise expressly provided
herein, no Member shall be entitled to receive interest from the Company in
respect of any positive balance in its Capital Account, and no Member shall be
liable to pay interest to the Company in respect of any negative balance in its
Capital Account.
Section 2.6 NO WITHDRAWAL. No Person shall be entitled to withdraw
any part of such Person's Capital Contributions or Capital Account or to receive
any Distribution from the Company, except as expressly provided in this
Agreement.
ARTICLE III
DISTRIBUTIONS AND ALLOCATIONS
Section 3.1 DISTRIBUTIONS
(a) Except as otherwise provided herein, the Company shall make
Distributions to the Members in respect of their Units at any time and from time
to time as determined by the Board of Managers in its sole discretion.
(b) The Company shall distribute to each Member within 75 days after
the close of each Taxable Year (or at such earlier times and in such amounts as
determined in good faith by the Board of Managers to be appropriate to enable
such Member to pay estimated income tax liabilities) an amount equal to the
anticipated taxes payable on the share of taxable income allocated
- 17 -
to such Member for such Taxable Year (after taking into account such Member's
share of income, credits, deductions and other items as reported on such Members
Schedule K-1 (Form 1065)), assuming for such determination the highest
applicable marginal United States federal, state, and local income tax rates
applicable to any Member; PROVIDED that such distributions shall be subject to
the availability of cash after the setting aside by the Board of Managers of
appropriate reserves for anticipated or contingent obligations, losses and
commitments of the Company. Tax distributions to a Member pursuant to this
Section 3.1(b) shall be treated as an advance on distributions to which such
Member is entitled under Section 3.1 (other than this Section 3.1(b)) and
Section 7.2, and shall be offset against and reduce the amounts that such Member
would otherwise receive under the provisions of Section 3.1 (other than Section
3.1(b)) and Section 7.2 in the order that such amounts would otherwise be
received.
(c) All Distributions in connection with the liquidation,
dissolution or winding up of the Company ("LIQUIDATING DISTRIBUTIONS") shall be
made to the Members in the following order of priority:
(i) first, to the holders of Class A Senior Units (pro rata
among such holders based upon the aggregate Capital Contributions made in
respect of all Class A Senior Units held by each such holder immediately
prior to such Liquidating Distribution (together with simple yield thereon
at a rate of 8% per annum from the date of issuance to the date of such
Distribution)), until the aggregate amount distributed pursuant to this
subparagraph (i) with respect to the Class A Senior Units is equal to the
aggregate Capital Contributions made in respect of all Class A Senior
Units outstanding immediately prior to such Distribution (together with
simple yield thereon at a rate of 8% per annum from the date of issuance
to the date of such Distribution);
(ii) second, to the holders of Preferred Units and the holders
of Class B Senior Units (pro rata among such holders based on the
aggregate Liquidation Value (together with all accrued but unpaid
Preferred Yield thereon) and Class B Senior Value (together with all
accrued but unpaid Class B Senior Yield thereon) of all Preferred Units
and Class B Senior Units held by each such holder immediately prior to
such Liquidating Distribution), until the aggregate amount distributed
pursuant to this paragraph (ii) is equal to the aggregate Liquidation
Value (together with all accrued but unpaid Preferred Yield thereon) and
Class B Senior Value (together with all accrued but unpaid Class B Senior
Yield thereon) of all Preferred Units and Class B Senior Units outstanding
immediately prior to such Liquidating Distribution;
(iii) third, to the holders of Class C Senior Units (pro rata
among such holders based upon the aggregate Capital Contributions made in
respect of all Class C Senior Units held by each such holder immediately
prior to such Liquidating Distribution (together with simple yield thereon
at a rate of 8% per annum from the date of issuance to the date of such
Distribution)), until the aggregate amount distributed pursuant to this
subparagraph (iii) with respect to the Class C Senior Units is equal to
the aggregate Capital Contributions made in respect of all Class C Senior
Units outstanding immediately prior to such Distribution
- 18 -
(together with simple yield thereon at a rate of 8% per annum from the
date of issuance to the date of such Distribution);
(iv) fourth, to the holders of Common Units (pro rata among
such holders based on the total number of Common Units held by each such
holder immediately prior to such Liquidating Distribution).
(d) The Company shall be required to redeem each Class A Senior Unit
upon the first to occur of a Qualified Public Offering, a Sale of the Company,
or the fourth anniversary of the issuance of such Class A Senior Unit, for an
amount equal to the aggregate Capital Contributions made in respect of such
Class A Senior Unit on or prior to the date of such redemption (together with
simple yield thereon at a rate of 8% per annum from the date of issuance to the
date of such Distribution). After such Distribution has been paid in redemption
of such Class A Senior Unit, such Class A Senior Unit shall be retired by the
Company, and the holder thereof shall have no further rights (including any
rights to receive Profits, Losses, or Distributions from the Company) with
respect to such Class A Senior Unit. Except as set forth in this SECTION 3.1(d)
or with respect to Liquidating Distributions under SECTION 3.1(c)(i) or with
respect to tax distributions under SECTION 3.1(b), no Distributions shall be
made by the Company with respect to any Class A Senior Units.
(e) The Company shall be required to redeem each Class C Senior Unit
upon the first to occur of a Qualified Public Offering, a Sale of the Company,
or the fifth anniversary of the issuance of such Class C Senior Unit, for an
amount equal to the aggregate Capital Contributions made in respect of such
Class C Senior Unit on or prior to the date of such redemption (together with
simple yield thereon at a rate of 8% per annum from the date of issuance to the
date of such Distribution); PROVIDED that no such redeeming Distribution shall
be paid in respect of any Class C Senior Unit until after the full amount of the
aggregate Liquidation Value (plus all accrued Preferred Yield thereon) and Class
B Senior Value (plus all accrued Class B Senior Yield thereon) of all Preferred
Units and Class B Senior Units has been paid. After such Distribution has been
paid in redemption of such Class C Senior Unit, such Class C Senior Unit shall
be retired by the Company, and the holder thereof shall have no further rights
(including any rights to receive Profits, Losses, or Distributions from the
Company) with respect to such Class C Senior Unit. Except as set forth in this
SECTION 3.1(e) or with respect to Liquidating Distributions under
SECTION 3.1(c)(iii) or with respect to tax distributions under SECTION 3.1(b),
no Distributions shall be made by the Company with respect to any Class C
Senior Units.
(f) All Distributions (other than Liquidating Distributions, tax
distributions made pursuant to Section 3.1(b), or redemptions of Class B Senior
Units pursuant to SECTION 4.1(a)) with respect to the Preferred Units and the
Class B Senior Units shall be made to all holders of Preferred Units and Class B
Senior Units: (i) first, pro rata among such holders based on the total accrued
but unpaid Preferred Yield and Class B Senior Yield on all Preferred Units and
Class B Senior Units held by each such holder on the record date for such
Distribution, until the full amount of accrued Preferred Yield and Class B
Senior Yield on all Preferred Units and Class B Senior Units then outstanding
has been paid, and (ii) after all accrued Preferred Yield and Class B Senior
Yield has been paid, pro rata among such holders based on the aggregate
Liquidation Value and Class B Senior
- 19 -
Value of all Preferred Units and Class B Senior Units held by each such holder
on the record date for such Distribution.
(g) All Distributions (other than Liquidating Distributions and tax
distributions made pursuant to Section 3.1(b)) with respect to the Common Units
shall be made to all holders of Common Units, pro rata among such holders based
on the total number of Common Units held by each such holder on the record date
for such Distribution; PROVIDED that no Distributions shall be made with respect
to any Common Units if at the time of or immediately after any such Distribution
the Company has failed to pay the full amount of accrued Preferred Yield and
Class B Senior Yield on the Preferred Units and Class B Senior Units or make any
redemption of Preferred Units or Class B Senior Units required hereunder.
(h) The Members shall look solely to the assets of the Company for
any Distributions, whether Liquidating Distributions or otherwise. If the assets
of the Company remaining after the payment or discharge, or the provision for
payment or discharge, of the debts, obligations, and other liabilities of the
Company are insufficient to make any Distributions, no Member shall have any
recourse against the separate assets of any other Member (except as otherwise
expressly provided herein).
(i) If the Company has, pursuant to any clear and manifest
accounting or similar error, paid any Member an amount in excess of the amount
to which it is entitled pursuant to this ARTICLE III, such Member shall
reimburse the Company to the extent of such excess, without interest, within 30
days after demand by the Company. The Company may set off and apply any amount
otherwise payable to a Member against the amounts due from the Member under this
SECTION 3.1(i).
Section 3.2 ALLOCATIONS.
(a) Except as otherwise provided in SECTION 3.3, Profits and Losses
for any Fiscal Year shall be allocated among the Members in such a manner that,
as of the end of such Fiscal Year, the sum of (i) the Capital Account of each
Member, (ii) such Member's share of Minimum Gain (as determined according to
Treasury Regulation Section 1.704-2(g)), and (iii) such Member's partner
nonrecourse debt minimum gain (as defined in Treasury Regulation Section
1.704-2(i)(3)) shall be equal to the respective net amounts, positive or
negative, which would be distributed to them or for which they would be liable
to the Company under the Act, determined as if the Company were to (i) liquidate
the assets of the Company for an amount equal to their Book Value and (ii)
distribute the proceeds of such liquidation pursuant to SECTION 7.2.
(b) For purposes of this SECTION 3.2, if Profits exceed Losses for a
Fiscal Year, (i) Losses shall first be allocated to Members whose Capital
Accounts are reduced as a result of the allocations under SECTION 3.2(a), in an
amount equal to the amount by which such Capital Accounts have been reduced and
(ii) Profits and any remaining Losses shall be allocated to Members whose
Capital Accounts are increased as a result of the allocations under
SECTION 3.2(a), in the proportion that the amount of the increase in such
Member's Capital Accounts as a result of the allocations
- 20 -
under SECTION 3.2(a) bears to the aggregate amount of the increase in all such
Members' Capital Accounts as a result of the allocations under SECTION 3.2(a).
(c) For purposes of this SECTION 3.2, if Losses exceed Profits for a
Fiscal Year, (i) Profits shall first be allocated to Members whose Capital
Accounts are increased as a result of the allocations under SECTION 3.2(a), in
an amount equal to the amount by which such Capital Accounts have been increased
and (b) Losses and any remaining Profits shall be allocated to Members whose
Capital Accounts are reduced as a result of the allocations under SECTION
3.2(a), in the proportion that the amount of the reduction in such Member's
Capital Accounts as a result of the allocations under SECTION 3.2(a) bears to
the aggregate amount of the reduction in all such Members' Capital Accounts as a
result of the allocations under SECTION 3.2(a).
(d) If deemed appropriate by the Board of Managers in its
discretion in order to cause the allocations pursuant to this SECTION 3.2 to
more closely reflect the actual economic arrangement among the Members, all
Preferred Units shall be treated as converted under SECTION 4.1(a) (and all
Class B Senior Units shall be treated as being entitled to their redemption
proceeds under SECTION 4.1(a)) immediately prior to any hypothetical
liquidation of the Company under SECTION 3.2(a) if such conversion (and
related redemption of Class B Senior Units) would entitle the holders of the
Preferred Units to receive a larger hypothetical distribution (in respect of
the Preferred Units, the Class B Senior Units, and the Conversion Securities
into which such Preferred Units are deemed converted) in connection with such
hypothetical liquidation of the Company (such hypothetical liquidation
determined according to SECTION 3.2(a) as if the Company were to (i)
liquidate the assets of the Company for an amount equal to their Book Value
and (ii) distribute the proceeds of such liquidation pursuant to SECTION
7.2). Whether the Preferred Units shall be treated as converted (and the
Class B Senior Units redeemed) shall be determined separately by the Board of
Managers any time an allocation is required under this SECTION 3.2.
Section 3.3 SPECIAL ALLOCATIONS.
(a) Losses attributable to partner nonrecourse debt (as defined in
Treasury Regulation Section 1.704-2(b)(4)) shall be allocated in the manner
required by Treasury Regulation Section 1.704-2(i). If there is a net decrease
during a Taxable Year in partner nonrecourse debt minimum gain (as defined in
Treasury Regulation Section 1.704-2(i)(3)), Profits for such Taxable Year (and,
if necessary, for subsequent Taxable Years) shall be allocated to the Members in
the amounts and of such character as determined according to Treasury Regulation
Section 1.704-2(i)(4).
(b) Nonrecourse deductions (as determined according to Treasury
Regulation Section 1.704-2(b)(1)) for any Taxable Year shall be allocated to
each Member ratably among such Members based upon the number of outstanding
Units held by each such Member immediately prior to such allocation. Except as
otherwise provided in Section 4.3(a), if there is a net decrease in the Minimum
Gain during any Taxable Year, each Member shall be allocated Profits for such
Taxable Year (and, if necessary, for subsequent Taxable Years) in the amounts
and of such character as determined according to Treasury Regulation Section
1.704-2(f). This Section 3.3(b) is intended to
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be a minimum gain chargeback provision that complies with the requirements of
Treasury Regulation Section 1.704-2(f), and shall be interpreted in a manner
consistent therewith.
(c) If any Member that unexpectedly receives an adjustment,
allocation or distribution described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6) has an Adjusted Capital Account Deficit as
of the end of any Taxable Year, computed after the application of Sections
3.3(a) and 3.3(b) but before the application of any other provision of this
Article III, then Profits for such Taxable Year shall be allocated to such
Member in proportion to, and to the extent of, such Adjusted Capital Account
Deficit. This Section 3.3(c) is intended to be a qualified income offset
provision as described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and
shall be interpreted in a manner consistent therewith.
(d) Profits and Losses described in Section 2.3(b)(v) shall be
allocated in a manner consistent with the manner that the adjustments to the
Capital Accounts are required to be made pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(j), (k) and (m).
(e) If, and to the extent that, any Member is deemed to recognize
any item of income, gain, loss, deduction or credit as a result of any
transaction between such Member and the Company pursuant to Code Sections
1272-1274, 7872, 483, 482, 83 or any similar provision now or hereafter in
effect, and the Board of Managers determines that any corresponding Profit or
Loss of the Company should be allocated to the Members who recognized such item
in order to reflect the Members' economic interests in the Company, then the
Company may so allocate such Profit or Loss.
Section 3.4 TAX ALLOCATIONS
(a) Except as provided in SECTIONS 3.4(b), (c) and (d), the income,
gains, losses, deductions and credits of the Company will be allocated, for
federal, state and local income tax purposes, among the Members in accordance
with the allocation of such income, gains, losses, deductions and credits among
the Members for computing their Capital Accounts; except that if any such
allocation is not permitted by the Code or other applicable law, the Company's
subsequent income, gains, losses, deductions and credits will be allocated among
the Members so as to reflect as nearly as possible the allocation set forth
herein in computing their Capital Accounts.
(b) Items of Company taxable income, gain, loss and deduction with
respect to any property contributed to the capital of the Company shall be
allocated among the Members in accordance with Code Section 704(c) 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 Book Value.
(c) If the Book Value of any Company asset is adjusted pursuant to
the requirements of Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or (f),
subsequent allocations of items of taxable income, gain, loss and deduction with
respect to such asset shall take account of any variation between the adjusted
basis of such asset for federal income tax purposes and its Book Value in the
same manner as under Code Section 704(c).
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(d) Allocations of tax credits, tax credit recapture, and any items
related thereto shall be allocated to the Members according to their interests
in such items as determined by the Board of Managers taking into account the
principles of Treasury Regulation Section 1.704-1(b)(4)(ii).
(e) Allocations pursuant to this SECTION 3.4 are solely for purposes
of federal, state and local taxes and shall not affect, or in any way be taken
into account in computing, any Member's Capital Account or share of Profits,
Losses, Distributions or other Company items pursuant to any provision of this
Agreement.
(f) The Board of Managers may, but shall not be obligated to, elect
to adjust the basis of the assets of the Company for federal income tax purposes
in accordance with Code Section 754.
Section 3.5 CURATIVE ALLOCATIONS. The allocations set forth in
SECTION 3.3 (the "REGULATORY ALLOCATIONS") are intended to comply with
certain requirements of Sections 1.704-1(b) and 1.704-2 of the Treasury
Regulations. The Regulatory Allocations may not be consistent with the manner
in which the Members intend to allocate Profit and Loss of the Company or
make Company distributions. Accordingly, notwithstanding the other provisions
of this Article III, but subject to the Regulatory Allocations, income, gain,
deduction, and loss shall be reallocated among the Members so as to eliminate
the effect of the Regulatory Allocations and thereby cause the respective
Capital Accounts of the Members to be in the amounts (or as close thereto as
possible) they would have been if Profit and Loss (and such other items of
income, gain, deduction and loss) had been allocated without reference to the
Regulatory Allocations. In general, the Members anticipate that this will be
accomplished by specially allocating other Profit and Loss (and such other
items of income, gain, deduction and loss) among the Members so that the net
amount of the Regulatory Allocations and such special allocations to each
such Member is zero. In addition, if in any Taxable Year or Fiscal Period
there is a decrease in partnership minimum gain, or in partner nonrecourse
debt minimum gain, and application of the minimum gain chargeback
requirements set forth in SECTION 3.3(a) or SECTION 3.3(b) would cause a
distortion in the economic arrangement among the Members, the Members may, if
they do not expect that the Company will have sufficient other income to
correct such distortion, request the Internal Revenue Service to waive either
or both of such minimum gain chargeback requirements. If such request is
granted, this Agreement shall be applied in such instance as if it did not
contain such minimum gain chargeback requirement.
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ARTICLE IV
THE PREFERRED UNITS
Section 4.1 CONVERSION.
(a) CONVERSION PROCEDURE.
(i) At any time and from time to time, any holder of Preferred
Units may convert all or any portion of the Preferred Units (including any
fraction of a Unit) held by such holder into a number of Conversion
Securities computed by multiplying the number of Preferred Units to be
converted by $1,000 and dividing the result by the Conversion Price then
in effect.
(ii) If any converting holder holds any Class B Senior Units,
a portion of such Class B Senior Units shall be redeemed simultaneously
with, and contingent upon, the consummation of a conversion of Preferred
Units by such holder equal to the product of (x) the number of Class B
Senior Units held by such converting holder immediately prior to such
conversion TIMES (y) the percentage of the Preferred Units held by such
converting holder immediately prior to such conversion that are being
converted in such conversion, at a price per Class B Senior Unit equal to
the accrued but unpaid Class B Senior Yield on such Class B Senior Unit
(which price shall be paid pursuant to SECTION 4.1(a)(v)(B)).
(iii) Except as otherwise provided herein, each conversion of
Preferred Units shall be deemed to have been effected as of the close of
business on the date on which the certificate or certificates representing
the Preferred Units to be converted have been surrendered for conversion
(or, if none, the date on which a written notice of such conversion has
been presented) at the principal office of the Company. At the time any
such conversion has been effected, the rights of the holder of the
Preferred Units converted as a holder of Preferred Units shall cease and
the Person or Persons in whose name or names any certificate or
certificates for Conversion Securities are to be issued (or, if none, in
whose name or names such Conversion Securities are to be recorded in the
Company's records) upon such conversion shall be deemed to have become the
holder or holders of record of the Conversion Securities represented
thereby.
(iv) Notwithstanding any other provision hereof, if a
conversion of Preferred Units is to be made in connection with any
transaction or proposed transaction affecting the Company (including,
without limitation, a public offering of the Company's securities, change
of control, or a liquidation or dissolution), the conversion of any
Preferred Units may, at the election of the holder thereof, be conditioned
upon the consummation of such transaction, in which case such conversion
shall be deemed to be effective upon the consummation of such transaction
or immediately prior thereto (at the election of such holder).
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(v) As soon as possible after a conversion has been effected
(but in any event within five business days in the case of subparagraph
(A) below), the Company shall deliver to the converting holder:
(A) if the Conversion Securities are certificated, a
certificate or certificates representing the number of Conversion
Securities issuable by reason of such conversion in such name or
names and such denomination or denominations as the converting
holder has specified;
(B) payment in cash of an amount equal to all accrued
but unpaid Preferred Yield with respect to each Preferred Unit
converted (plus, if applicable, the accrued but unpaid Class B
Senior Yield with respect to each Class B Senior Unit redeemed in
connection with such conversion); PROVIDED that if such conversion
is in connection with a public offering of the Company's equity
securities, all or any portion of such Preferred Yield (and, if
applicable, Class B Senior Yield) may at the option of the
converting holder be payable in the form of a number of Common Units
(or equivalent common equity securities of the Company) equal to the
quotient of (x) the amount of Preferred Yield (and, if applicable,
Class B Senior Yield) to be paid in the form of Common Units (or
other common equity securities), DIVIDED BY (y) the gross offering
price per Common Unit (or equivalent common equity security) in such
public offering); and
(C) if the Preferred Units are certificated, a
certificate representing any Preferred Units which were represented
by the certificate or certificates delivered to the Company in
connection with such conversion but which were not converted (and,
if the Class B Senior Units are certificated and any Class B Senior
Units are redeemed in connection with such conversion, a certificate
representing any Class B Senior Units which were represented by the
certificate or certificates delivered to the Company in connection
with such redemption but which were not redeemed).
(vi) The issuance of certificates (if any) for Conversion
Securities upon conversion of Preferred Units shall be made without charge
to the holders of such Preferred Units for any issuance tax in respect
thereof or other cost incurred by the Company in connection with such
conversion and the related issuance of Conversion Securities. Upon
conversion of each Preferred Unit, the Company shall take all such actions
as are necessary in order to insure that the Conversion Securities
issuable with respect to such conversion shall be validly issued, fully
paid and nonassessable, free and clear of all taxes, liens, charges and
encumbrances with respect to the issuance thereof.
(vii) The Company shall not close its books against the
transfer of Preferred Units or of Conversion Securities issued or issuable
upon conversion of Preferred Units in any manner which interferes with the
timely conversion of the Preferred Units. The Company shall assist and
cooperate with any holder of Preferred Units required to make any
governmental filings or obtain any governmental approval prior to or in
connection with any
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conversion of Preferred Units hereunder (including, without limitation,
making any filings required to be made by the Company).
(viii) The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Conversion
Securities, solely for the purpose of issuance upon the conversion of the
Preferred Units, such number of Conversion Securities issuable upon the
conversion of all outstanding Preferred Units. All Conversion Securities
which are so issuable shall, when issued, be duly and validly issued,
fully paid and nonassessable and free from all taxes, liens and charges.
The Company shall take all such actions as may be necessary to assure that
all such shares of Conversion Securities may be so issued without
violation of any applicable law or governmental regulation or any
requirements of any domestic securities exchange upon which Conversion
Securities may be listed (except for official notice of issuance which
shall be immediately delivered by the Company upon each such issuance).
The Company shall not take any action which would cause the number of
authorized but unissued Conversion Securities to be less than the number
of such securities required to be reserved hereunder for issuance upon
conversion of the Preferred Units.
(b) CONVERSION PRICE.
(i) The initial Conversion Price shall be $796.97. In order to
prevent dilution of the conversion rights granted under this SECTION 4.1,
the Conversion Price shall be subject to adjustment from time to time
pursuant to this SECTION 4.1(b).
(ii) If and whenever the Company issues or sells, or in
accordance with SECTION 4.1(c) is deemed to have issued or sold, any
Common Units for a consideration per Unit less than the Current Price in
effect as of the date of such issue or sale, then immediately upon such
issue or sale or deemed issue or sale the Conversion Price shall be
reduced to a new Conversion Price determined by multiplying (A) the
Conversion Price in effect immediately prior to such issue or sale, TIMES
(B) a fraction, the numerator of which shall be the sum of (1) the number
of Common Units Deemed Outstanding immediately prior to such issue or sale
MULTIPLIED BY the Current Price in effect as of the date of such issue or
sale, PLUS (2) the consideration, if any, received by the Company upon
such issue or sale, and the denominator of which shall be the product of
the Current Price in effect as of the date of such issue or sale
MULTIPLIED BY the number of Common Units Deemed Outstanding immediately
after such issue or sale.
(iii) If at any time the Current Price is increased as a
result of a Subsequent Contribution (as defined in the Equity Purchase
Agreement), such higher Current Price shall be retroactively effective as
of the date of the First Amended Agreement for all purposes of this
SECTION 4.1, and the Conversion Price then in effect shall be recalculated
and adjusted to the Conversion Price that would have been determined
pursuant to this SECTION 4.1 (including, without limitation, in connection
with issuances and deemed issuances of Common Units from the date of the
First Amended Agreement until and including the date of such Subsequent
Contribution) had the Current Price been such amount from the date of
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the First Amended Agreement until and including the date of such
Subsequent Contribution (as such amount shall be equitably adjusted to
reflect any stock splits, stock dividends, stock combinations, or
recapitalizations during such period).
(iv) Notwithstanding the foregoing, there shall be no
adjustment to the Conversion Price hereunder with respect to (A) the
issuance of Common Units pursuant to SECTION 2.2(a) or (c) hereof, or (B)
the granting of securities to Key Employees of the Company and its
Subsidiaries, or the issuance of Common Units upon exercise thereof,
pursuant to the Company's Permitted Securities Plan (as defined in the
Equity Purchase Agreement).
(c) EFFECT ON CONVERSION PRICE OF CERTAIN EVENTS. For purposes of
determining the adjusted Conversion Price under SECTION 4.1(b), the following
shall be applicable:
(i) ISSUANCE OF RIGHTS OR OPTIONS. If the Company in any
manner grants or sells any Options and the price per Unit for which Common
Units are issuable upon the exercise of such Options, or upon conversion
or exchange of any Convertible Securities issuable upon exercise of such
Options, is less than the Current Price in effect immediately prior to the
time of the granting or sale of such Options, then the total maximum
number of Common Units issuable upon the exercise of such Options or upon
conversion or exchange of the total maximum amount of such Convertible
Securities issuable upon the exercise of such Options shall be deemed to
be outstanding and to have been issued and sold by the Company at the time
of the granting or sale of such Options for such price per Unit. For
purposes of this paragraph, the "price per Unit for which Common Units are
issuable" shall be determined by dividing (A) the total amount, if any,
received or receivable by the Company as consideration for the granting or
sale of such Options, plus the minimum aggregate amount of additional
consideration payable to the Company upon exercise of all such Options,
plus in the case of such Options which relate to Convertible Securities,
the minimum aggregate amount of additional consideration, if any, payable
to the Company upon the issuance or sale of such Convertible Securities
and the conversion or exchange thereof, by (B) the total maximum number of
Common Units issuable upon the exercise of such Options or upon the
conversion or exchange of all such Convertible Securities issuable upon
the exercise of such Options. No further adjustment of the Conversion
Price shall be made when Convertible Securities are actually issued upon
the exercise of such Options or when Common Units are actually issued upon
the exercise of such Options or the conversion or exchange of such
Convertible Securities.
(ii) ISSUANCE OF CONVERTIBLE SECURITIES. If the Company in any
manner issues or sells any Convertible Securities and the price per Unit
for which Common Units are issuable upon conversion or exchange thereof is
less than the Current Price in effect immediately prior to the time of
such issue or sale, then the maximum number of Common Units issuable upon
conversion or exchange of such Convertible Securities shall be deemed to
be outstanding and to have been issued and sold by the Company at the time
of the issuance or sale of such Convertible Securities for such price per
Unit. For the purposes of
- 27 -
this paragraph, the "price per Unit for which Common Units are issuable"
shall be determined by dividing (A) the total amount received or
receivable by the Company as consideration for the issue or sale of such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or
exchange thereof, by (B) the total maximum number of Common Units issuable
upon the conversion or exchange of all such Convertible Securities. No
further adjustment of the Conversion Price shall be made when Common Units
are actually issued upon the conversion or exchange of such Convertible
Securities, and if any such issue or sale of such Convertible Securities
is made upon exercise of any Options for which adjustments of the
Conversion Price had been or are to be made pursuant to other provisions
of this SECTION 4.1, no further adjustment of the Conversion Price shall
be made by reason of such issue or sale.
(iii) CHANGE IN OPTION PRICE OR CONVERSION RATE. If the
purchase price provided for in any Options, the additional consideration,
if any, payable upon the conversion or exchange of any Convertible
Securities or the rate at which any Convertible Securities are convertible
into or exchangeable for Common Units changes at any time, the Conversion
Price in effect at the time of such change shall be immediately adjusted
to the Conversion Price which would have been in effect at such time had
such Options or Convertible Securities still outstanding provided for such
changed purchase price, additional consideration or conversion rate, as
the case may be, at the time initially granted, issued or sold For
purposes of this SECTION 4.1(c), if the terms of any Option or Convertible
Security which was outstanding as of the date of issuance of the Preferred
Units are changed in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the Common Units
deemed issuable upon exercise, conversion or exchange thereof shall be
deemed to have been issued as of the date of such change; PROVIDED that no
such change shall at any time cause the Conversion Price hereunder to be
increased.
(iv) TREATMENT OF EXPIRED OPTIONS AND UNEXERCISED CONVERTIBLE
SECURITIES. Upon the expiration of any Option or the termination of any
right to convert or exchange any Convertible Security without the exercise
of any such Option or right, the Conversion Price then in effect hereunder
shall be adjusted immediately to the Conversion Price which would have
been in effect at the time of such expiration or termination had such
Option or Convertible Security, to the extent outstanding immediately
prior to such expiration or termination, never been issued. For purposes
of this SECTION 4.1(c), the expiration or termination of any Option or
Convertible Security which was outstanding as of the date of issuance of
the Preferred Units shall not cause the Conversion Price hereunder to be
adjusted unless, and only to the extent that, a change in the terms of
such Option or Convertible Security caused it to be deemed to have been
issued after the date of issuance of the Preferred Units.
(v) CALCULATION OF CONSIDERATION RECEIVED. If any Common Unit,
Option or Convertible Security is issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor shall be
deemed to be the amount received by the Company
- 28 -
therefor (net of discounts, commissions and related expenses). If any
Common Unit, Option or Convertible Security is issued or sold for a
consideration other than cash, the amount of the consideration other than
cash received by the Company shall be the Fair Market Value of such
consideration. If any Common Unit, Option or Convertible Security is
issued to the owners of the non-surviving entity in connection with any
merger in which the Company is the surviving entity, the amount of
consideration therefor shall be deemed to be the Fair Market Value of such
portion of the net assets and business of the non-surviving entity as is
attributable to such Common Unit, Option or Convertible Security, as the
case may be. The Fair Market Value of such consideration shall be
determined in accordance with the provisions of SECTION 7.3.
(vi) INTEGRATED TRANSACTIONS. In case any Option is issued in
connection with the issue or sale of other securities of the Company,
together constituting one integrated transaction in which no specific
consideration is allocated to such Option by the parties thereto, the
Option shall be deemed to have been issued without consideration.
(vii) TREASURY SECURITIES. The number of Common Units
outstanding at any given time shall not include securities owned or held
by or for the account of the Company or any Subsidiary, and the
disposition of any Units so owned or held shall be considered an issue or
sale of Common Units.
(viii) RECORD DATE. If the Company takes a record of the
holders of Common Units for the purpose of entitling them (A) to receive a
dividend or other distribution payable in Common Units, Options or in
Convertible Securities or (B) to subscribe for or purchase Common Units,
Options or Convertible Securities, then such record date shall be deemed
to be the date of the issue or sale of the Common Units deemed to have
been issued or sold upon the declaration of such dividend or upon the
making of such other distribution or the date of the granting of such
right of subscription or purchase, as the case may be.
(d) SUBDIVISION OR COMBINATION OF COMMON UNITS. If the Company at
any time subdivides (by any securities split, securities dividend,
recapitalization or otherwise) one or more classes of its outstanding Common
Units into a greater number of Units, the Conversion Price in effect immediately
prior to such subdivision shall be proportionately reduced, and if the Company
at any time combines (by reverse securities split, securities combination or
otherwise) one or more classes of its outstanding Common Units into a smaller
number of Units, the Conversion Price in effect immediately prior to such
combination shall be proportionately increased.
(e) REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Company's assets or other transaction,
in each case which is effected in such a manner that the holders of Common Units
are entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Units, is
referred to herein as an "ORGANIC CHANGE". Prior to the consummation of any
Organic Change, the Company shall make
- 29 -
appropriate provisions (in form and substance satisfactory to the holders of a
majority of the Preferred Units then outstanding, in their good faith judgment)
to insure that each of the holders of Preferred Units shall thereafter have the
right to acquire and receive, in lieu of or in addition to (as the case may be)
the Conversion Securities immediately theretofore acquirable and receivable upon
the conversion of such holder's Preferred Units, such shares of stock,
securities or assets as such holder would have received in connection with such
Organic Change if such holder had converted its Preferred Units immediately
prior to such Organic Change. In each such case, the Company shall also make
appropriate provisions (in form and substance satisfactory to the holders of a
majority of the Preferred Units then outstanding, in their good faith judgment)
to insure that the provisions of this SECTION 4.1 and SECTION 4.2 hereof shall
thereafter be applicable to the Preferred Units (including, in the case of any
such consolidation, merger or sale in which the successor entity or purchasing
entity is other than the Company, an immediate adjustment of the Conversion
Price to a value equal to the product of (x) the Conversion Price then in effect
TIMES (y) a fraction, the numerator of which is the value for the Common Units
reflected by the terms of such consolidation, merger or sale, and the
denominator of which is the Current Price then in effect, and a corresponding
immediate adjustment in the number of Conversion Securities acquirable and
receivable upon conversion of Preferred Units, if the value so reflected is less
than the Current Price in effect immediately prior to such consolidation, merger
or sale). The Company shall not effect any such consolidation, merger or sale,
unless prior to the consummation thereof the successor entity (if other than the
Company) resulting from consolidation or merger or the entity purchasing such
assets assumes by written instrument (in form and substance satisfactory to the
holders of a majority of the Preferred Units then outstanding, in their good
faith judgment) the obligation to deliver to each such holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to acquire.
(f) CERTAIN EVENTS. If any event occurs of the type contemplated by
the provisions of this SECTION 4.1, but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Board of Managers shall make an appropriate adjustment in the Conversion Price
so as to protect the rights of the holders of Preferred Units; PROVIDED that no
such adjustment shall increase the Conversion Price as otherwise determined
pursuant to this SECTION 4.1 or decrease the number of Conversion Securities
issuable upon conversion of each Preferred Unit.
(g) NOTICES.
(i) Immediately upon any adjustment of the Conversion Price,
the Company shall give written notice thereof to all holders of Preferred
Units, setting forth in reasonable detail and certifying the calculation
of such adjustment.
(ii) The Company shall give written notice to all holders of
Preferred Units at least 20 days prior to the date on which the Company
closes its books or takes a record (a) with respect to any Distribution
upon Common Units, (b) with respect to any pro rata subscription offer to
holders of Common Units, or (c) for determining rights to vote with
respect to any Organic Change, dissolution or liquidation.
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(iii) The Company shall also give written notice to the
holders of Preferred Units at least 20 days prior to the date on which any
Organic Change shall take place.
(h) NO AVOIDANCE. If the Company shall enter into any transaction
for the purpose of avoiding the application of the provisions of this
SECTION 4.1, the benefits provided by such provisions shall nevertheless apply
and be preserved.
(i) MANDATORY CONVERSION. All holders of Preferred Units shall be
required to convert the Preferred Units held by each such holder in accordance
with the provisions of this SECTION 4.1 (A) contemporaneously with any Qualified
Public Offering, or (B) upon the affirmative vote of the holders of a majority
of the Preferred Units then outstanding. Any mandatory conversion under clause
(A) of the immediately preceding sentence shall only be effected at the time of
and subject to the closing of the sale of shares pursuant to such Qualified
Public Offering and upon written notice of such mandatory conversion delivered
by the Company to all holders of Preferred Units at least seven days prior to
such closing.
Section 4.2 PURCHASE RIGHTS. If at any time the Company grants,
issues, distributes or sells any Options, Convertible Securities or rights to
purchase stock, warrants, securities or other property pro rata to the record
holders of any class of Common Units (the "PURCHASE RIGHTS"), then each holder
of Preferred Units shall be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which such holder could have
acquired if such holder had held the number of Conversion Securities acquirable
upon conversion of such holder's Preferred Units immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights,
or if no such record is taken, the date as of which the record holders of Common
Units are to be determined for the grant, issue or sale of such Purchase Rights.
Section 4.3 ACCELERATION UPON OCCURRENCE OF CERTAIN PROCEEDINGS.
The Preferred Units and the Class B Senior Units shall not be redeemable,
except as set forth in this SECTION 4.3 (and, in the case of Class B Senior
Units, SECTION 4.1). If at any time the Company makes an assignment for the
benefit of creditors or admits in writing its inability to pay its debts
generally as they become due; or an order, judgment or decree is entered
adjudicating the Company bankrupt or insolvent; or any order for relief with
respect to the Company is entered under the Federal Bankruptcy Code; or the
Company petitions or applies to any tribunal for the appointment of a
custodian, trustee, receiver or liquidator of the Company or of any
substantial part of the assets of the Company, or commences any proceeding
(other than a proceeding for the voluntary liquidation and dissolution of a
Subsidiary) relating to the Company under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation law
of any jurisdiction; or any such petition or application is filed, or any
such proceeding is commenced, against the Company and either (a) the Company
or any such Subsidiary by any act indicates its approval thereof, consent
thereto or acquiescence therein or (b) such petition, application or
proceeding is not dismissed within 60 days (any of the foregoing, a
"PROCEEDING"), then the holders of a majority of the Preferred Units then
outstanding may demand (by written notice delivered to the Company) immediate
redemption of all or any portion of the Preferred Units and Class B Senior
Units owned by such holders at a price
- 31 -
per Unit equal to the Liquidation Value (or Class B Senior Value, as applicable)
thereof (plus all accrued and unpaid Preferred Yield (or Class B Senior Yield,
as applicable) thereon).
ARTICLE V
MANAGEMENT
THE PROVISIONS OF THIS ARTICLE V ARE SUBJECT TO CERTAIN VOTING
AGREEMENTS AND PROVISIONS RELATING TO THE COMPOSITION OF, AND
THE ELECTION, TERM, RESIGNATION, REMOVAL, AND
REPLACEMENT OF REPRESENTATIVES TO, THE BOARD OF MANAGERS
AND OTHER MATTERS SET FORTH IN THE
SECURITYHOLDERS AGREEMENT (AS DEFINED HEREIN).
Section 5.1 MANAGEMENT AUTHORITY. Except as otherwise expressly
provided in this Agreement, (i) the Board of Managers shall conduct, direct, and
exercise full control over all activities of the Company, (ii) all management
powers over the business and affairs of the Company shall be exclusively vested
in the Board of Managers, and (iii) the Board of Managers shall have the sole
power to bind or take any action on behalf of the Company, or to exercise any
rights and powers (including, without limitation, the rights and powers to take
certain actions, give or withhold certain consents or approvals, or make certain
determinations, opinions, judgments, or other decisions) granted to the Company
under this Agreement or any other agreement, instrument, or other document to
which the Company is a party. No Representative shall individually have the
authority to bind the Company in any way, to take any action that would be (or
could be construed as) binding on the Company, or to make any expenditures on
behalf of the Company, unless such authority has been granted to such
Representative by the Board.
Section 5.2 DELEGATION OF AUTHORITY. The Board of Managers may, from
time to time, (i) appoint one or more Persons to be officers of the Company and
may assign such titles and functions, and delegate such authority and duties, to
such officers as it shall deem necessary or desirable, (ii) appoint, employ or
otherwise contract with such other Persons for the transaction of the business
of the Company or the performance of services for or on behalf of the Company as
it shall determine in its sole discretion, and (iii) delegate to any Person
(including any Member or officer of the Company or any Representative, and
including through the creation of one or more committees) such authority and
powers to act on behalf of the Company as it shall deem advisable in its sole
discretion. Any appointment, employment, or other delegation pursuant to this
SECTION 5.2 may be revoked at any time and for any or no reason by the Board of
Managers in its sole discretion.
Section 5.3 COMPOSITION; MEETINGS; ACTIONS.
(a) The number of Representatives which shall constitute the Board
of Managers as of the date of execution of this Agreement shall be eight (8).
Thereafter, the number of Representatives shall be established from time to time
by a Required Vote. The Representatives shall be elected to the Board of
Managers by a Required Vote. Each Representative shall hold office until a
successor is appointed or until his or her earlier death, resignation or removal
as herein
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provided. Any Representative or the entire Board of Managers may be removed at
any time, with or without cause, by a Required Vote. Vacancies and newly created
Representative positions resulting from any increase in the authorized number of
Representatives may be filled as determined by a Required Vote. Each
Representative so chosen shall hold office until a successor is appointed or
until his or her earlier death, resignation or removal as herein provided.
(b) A majority of the total number of Representatives present in
person or by proxy shall constitute a quorum for the transaction of business.
The vote of a majority of the Representatives present in person or by proxy at a
meeting of the Board of Managers at which a quorum is present shall be the act
of the Board of Managers. Each Representative shall be entitled to one vote on
all matters submitted to a vote of the Board of Managers; PROVIDED that so long
as (and solely to the extent) required by the terms of the Securityholders
Agreement, one of the MDCP Representatives (as such term is defined in the
Securityholders Agreement) (which MDCP Representative shall be designated from
among the MDCP Representations present in person or by proxy for such vote by
the MDCP Representatives present in person (or, if none, by proxy) for such
vote) shall be entitled to two votes (and, during such time as such MDCP
Representative is entitled to two votes, a "majority" of the Representatives
shall for all purposes (including determinations hereunder of the existence of a
quorum or of a majority vote required for action by the Board of Managers) mean
Representatives entitled to cast a majority of the total votes that may be cast
by all Representatives). Notice shall be given at least 48 hours prior to any
meeting of the Board of Managers. Notice may be waived before or after a meeting
or by attendance at such meeting without protest as to the adequacy of notice.
Notice shall be given in the manner described in SECTION 10.12 and shall be
deemed received as provided in SECTION 10.12. Representatives may participate in
a meeting of the Board of Managers by means of a telephone or other
teleconferencing or videoconferencing equipment, and such participation shall
constitute presence in person at such meeting. Any action required or permitted
to be taken by the Board of Managers at a meeting may be taken without a meeting
with the unanimous written consent of all Representatives serving thereon. The
Board of Managers may adopt such other procedures governing meetings and the
conduct of business as it shall deem appropriate.
Section 5.4 INDEMNIFICATION OF MEMBERS, REPRESENTATIVES, OFFICERS,
AND OTHERS.
(a) The Company hereby agrees to indemnify and hold harmless any
Person (each an "INDEMNIFIED PERSON") to the fullest extent permitted under the
Act, as the same now exists or may hereafter be amended, substituted or replaced
(but, in the case of any such amendment, substitution or replacement only to the
extent that such amendment, substitution or replacement permits the Company to
provide broader indemnification rights than the Company is providing immediately
prior to such amendment), against all expenses, liabilities and losses
(including attorney fees, judgments, fines, excise taxes or penalties)
reasonably incurred or suffered by such Person (or one or more of such Person's
Affiliates) by reason of the fact that such Person is or was a Member or is or
was serving as a Representative, officer, employee or agent of the Company or is
or was serving at the request of the Company as a representative, officer,
director, principal, member, employee or agent of another partnership,
corporation, joint venture, limited liability company, trust or other
enterprise; PROVIDED THAT (unless the Board of Managers otherwise consents) no
Indemnified Person
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shall be indemnified for any expenses, liabilities and losses suffered that are
attributable to such Indemnified Person's or its Affiliates' gross negligence,
willful misconduct or knowing violation of law, or for any present or future
breaches of any representations, warranties or covenants by such Indemnified
Person or its Affiliates contained herein or in any other agreement with the
Company, or for any Losses incurred by the Company. Expenses, including attorney
fees, incurred by any such Indemnified Person in defending a proceeding shall be
paid by the Company in advance of the final disposition of such proceeding,
including any appeal therefrom, upon receipt of an undertaking by or on behalf
of such Indemnified Person to repay such amount if it shall ultimately be
determined that such Indemnified Person is not entitled to be indemnified by the
Company.
(b) The right to indemnification and the advancement of expenses
conferred in this SECTION 5.4 shall not be exclusive of any other right which
any Person may have or hereafter acquire under any statute, agreement, by-law,
vote of Representatives or otherwise.
(c) The Company may maintain insurance, at its expense, to protect
any Indemnified Person against any expense, liability or loss described in
paragraph (a) above whether or not the Company would have the power to indemnify
such Indemnified Person against such expense, liability or loss under the
provisions of this SECTION 5.4.
(d) Notwithstanding anything contained herein to the contrary
(including in this SECTION 5.4), any indemnity by the Company relating to the
matters covered in this SECTION 5.4 shall be provided out of and to the extent
of Company assets only and no Member (unless such Member otherwise agrees in
writing or is found in a final decision by a court of competent jurisdiction to
have personal liability on account thereof) shall have personal liability on
account thereof or shall be required to make additional Capital Contributions to
help satisfy such indemnity of the Company.
(e) If this SECTION 5.4 or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify and hold harmless each Indemnified Person pursuant to
this SECTION 5.4 to the fullest extent permitted by any applicable portion of
this SECTION 5.4 that shall not have been invalidated and to the fullest extent
permitted by applicable law.
ARTICLE VI
MEMBERS
Section 6.1 LIMITATION OF LIABILITY. Except as otherwise provided by
applicable laws, the debts, obligations and liabilities of the Company, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the Company, and no Member or Representative shall be
obligated personally for any such debt, obligation or liability of the Company
solely by reason of being a Member or acting as a Representative of the Company;
PROVIDED THAT a Member shall be required to return to the Company any
Distribution made to it in clear and manifest accounting or similar error. The
immediately preceding sentence shall constitute a compromise to
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which all Members have consented within the meaning of the Act. Notwithstanding
anything contained herein to the contrary, the failure of the Company to observe
any formalities or requirements relating to the exercise of its powers or
management of its business and affairs under this Agreement or the Act shall not
be grounds for imposing personal liability on the Members for liabilities of the
Company.
Section 6.2 LACK OF AUTHORITY OF INDIVIDUAL MEMBERS. Unless
delegated such power in accordance with SECTION 5.2, no Member shall in its
capacity as such have the authority or power to act for or on behalf of the
Company in any manner, to do any act that would be (or could be construed as)
binding on the Company, or to make any expenditures on behalf of the Company,
and the Members hereby consent to the exercise by the Board of Managers of the
powers and rights conferred upon it by law and this Agreement.
Section 6.3 TRANSFER OF COMPANY INTERESTS; WITHDRAWAL AND REMOVAL.
(a) THE TRANSFER OF INTERESTS IN THE COMPANY ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER CONTAINED IN THE EQUITY PURCHASE AGREEMENT, THE
SECURITYHOLDERS AGREEMENT, THE PERFORMANCE VESTING AGREEMENT, AND THE EXECUTIVE
SECURITIES AGREEMENTS. IN ADDITION, NO MEMBER MAY TRANSFER ALL OR ANY PORTION OF
SUCH MEMBER'S INTEREST IN THE COMPANY WITHOUT THE PRIOR WRITTEN CONSENT OF THE
BOARD OF MANAGERS (WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD) IF SUCH
TRANSFER WOULD CAUSE THE COMPANY TO HAVE MORE THAN 100 PARTNERS WITHIN THE
MEANING OF TREASURY REGULATION 1.7704-1(h).
(b) No Member may sell, assign, pledge, transfer or otherwise
dispose of all or any portion of such Member's Units (whether with or without
consideration and whether voluntarily or involuntarily or by operation of law)
(a "TRANSFER"), unless (i) such Transfer complies with the relevant provisions
of any agreements to which the Company and such Member are parties, and (ii) the
transferee furnishes to all Members (A) a letter of acceptance, in form
reasonably satisfactory to the Board of Managers, of all the terms and
conditions of this Agreement and (B) such other documents, instruments, or
certificates as shall in good faith be deemed necessary or appropriate by the
Board of Managers in order to effect such Person's admission as a Member.
(c) Any attempted Transfer which violates the provisions of this
SECTION 6.3 shall be void and the purported buyer, assignee, transferee,
pledgee, mortgagee or other recipient shall have no interest in or rights to
Company assets, profits, losses or distributions, and neither the Members nor
the Company shall be required to recognize any such interest or rights.
(d) A Transfer permitted under this SECTION 6.3 shall be effective
as of the date of assignment and compliance with the conditions to such Transfer
set forth herein, and such Transfer shall be shown on the books and records of
the Company. Profits, Losses, and other Company items shall be allocated between
the transferor and the transferee according to Code Section 706. Distributions
made with respect to the transferred Units before the effective date of
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such Transfer shall be paid to the transferor, and Distributions made with
respect to such transferred Units after such date shall be paid to the
transferee.
(e) Any Member who shall transfer any Units shall cease to be the
holder of such Units and, if such Units constitute all of such Member's Company
interests, shall cease to be a Member, and such transferring Member shall no
longer have any rights or privileges hereunder with respect to such transferred
Units; PROVIDED that (i) the applicable provisions of SECTIONS 5.4 and 6.1 shall
continue to inure to such Person's benefit, (ii) such Person shall not be
relieved of any liability of such Person to the Company or the other Members
with respect to the transferred Units that may exist on the transfer date or
that is otherwise specified in the Act and incorporated into this Agreement or
for any present or future breaches of any representations, warranties, or
covenants by such Person contained herein or in the other agreements to which
such Person and the Company are parties.
(f) No Member may, or may be required to, withdraw from the Company,
except upon a Transfer of such Member's Units in accordance with this SECTION
6.3 or upon a permitted repurchase or redemption of such Member's Units pursuant
to the provisions of this Agreement or any other agreement to which the Company
and such Member are parties.
(g) No Person shall be admitted as a Member of the Company, except
upon a Transfer of Units to such Person in accordance with this SECTION 6.3 or
upon the issuance of Units to such Person in accordance with the provisions of
SECTION 2.2.
Section 6.4 NO RIGHT OF PARTITION. No current or former Member shall
have the right to seek or obtain partition by court decree or operation of law
of any Company property, or the right to own or use particular or individual
assets of the Company.
Section 6.5 INDEMNIFICATION AND REIMBURSEMENT FOR PAYMENTS ON BEHALF
OF A MEMBER. Subject to the provisions of the Employment Agreements, if the
Company is obligated to pay any amount to a governmental body (or otherwise
makes a payment) because of a Member's status or otherwise specifically
attributable to a Member (including, without limitation, federal withholding
taxes with respect to foreign members, state personal property taxes, state
unincorporated business taxes, etc.), then such Member shall indemnify the
Company in full for the entire amount paid (including, without limitation, any
interest, penalties and expenses associated with such payments). The Board of
Managers may offset Distributions to which a Member is otherwise entitled under
this Agreement against such Person's obligation to indemnify the Company under
this section.
Section 6.6 CERTAIN DUTIES OF REPRESENTATIVES AND OFFICERS.
(a) Except as otherwise specifically provided in this Agreement or
in the other agreements contemplated hereby, each of the Company's
Representatives and officers shall owe to the Company and the Members the same
duties and obligations that would be owed to a corporation organized under the
Delaware General Corporation Law by its directors and officers (as such duties
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and obligations are defined, described, and explained under the laws of the
State of Delaware); PROVIDED that, to the fullest extent permitted by the
Delaware General Corporation Law as the same exists or may hereafter be amended,
a Representative or officer shall not be liable to the Company or its Members
for monetary damages for any breach of fiduciary duty as a Representative or
officer, and any repeal or modification of this Section 6.6 shall not adversely
affect any right or protection of a Representative or officer of the Company
existing at the time of such repeal or modification.
(b) To the extent that any Representative or officer or Member has
duties (including fiduciary duties) and liabilities relating thereto to the
Company or to any Member, (i) any such Representative, officer or Member acting
under this Agreement shall not be liable to the Company or to any Member for
such Person's good faith reliance on the provisions of this Agreement, the
records of the Company, and such information, opinions, reports, or statements
presented to the Company by any of the Company's officers or employees, by
committees of the Board of Managers, or by any other Person as to matters such
Representative, officer, or Member reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Company, and (ii) the Representative's,
officer's, or Member's duties and liabilities are restricted by the provisions
of this Agreement to the extent that such provisions restrict the duties and
liabilities of the Representatives, officers, or Members otherwise existing at
law or in equity.
Section 6.7 CONFIDENTIALITY. Each Member recognizes and acknowledges
that it may receive certain confidential and proprietary information and trade
secrets of the Company and its Subsidiaries, including but not limited to
confidential information of the Company and its Subsidiaries regarding
identifiable, specific and discrete business opportunities being pursued by the
Company or its Subsidiaries (the "CONFIDENTIAL INFORMATION"). Each Member (on
behalf of itself and, to the extent that such Member would be responsible for
the acts of the following persons under principles of agency law, its directors,
officers, shareholders, partners, employees, agents and members) agrees that it
will not, during or after the term of this Agreement, whether through an
Affiliate or otherwise, take commercial or proprietary advantage of or profit
from any Confidential Information or disclose Confidential Information to any
Person for any reason or purpose whatsoever, except (i) to authorized
representatives and employees of the Company or its Subsidiaries and as
otherwise may be proper in the course of performing such Member's obligations,
or enforcing such Member's rights, under this Agreement; (ii) as part of such
Member's normal reporting or review procedure, or in connection with such
Member's or its Affiliates' normal fund raising, marketing, informational or
reporting activities, or to such Member's (or any of its Affiliates') auditors,
attorneys or other agents; (iii) to any bona fide prospective purchaser of the
equity or assets of such Member or its Affiliates or the Units held by such
Member, or prospective merger partner of such Member or its Affiliates, PROVIDED
that such purchaser or merger partner agrees to be bound by the provisions of
this SECTION 6.7; or (iv) as is required to be disclosed by order of a court of
competent jurisdiction, administrative body or governmental body, or by
subpoena, summons or legal process, or by law, rule or regulation, PROVIDED that
the Member required to make such disclosure shall provide to the Board of
Managers prompt notice of any such disclosure. For purposes of this Section,
"Confidential Information" shall not include any information: (x) of which such
Person (or its Affiliates) became aware prior to its affiliation with the
Company, (y) of which
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such Person (or its Affiliates) learns from sources other than the Company or
its Subsidiaries, whether prior to or after such information is actually
disclosed by the Company or its Subsidiaries, or (z) which is disclosed in a
prospectus or other documents available for dissemination to the public. Nothing
in this SECTION 6.7 shall in any way limit or otherwise modify any
confidentiality covenants entered into by any Member pursuant to any other
agreement to which such Member and the Company or any of its Subsidiaries are
parties.
Section 6.8 VOTING RIGHTS. On all matters which are required
pursuant to this Agreement or the Act or other applicable law to be voted on by
the Company's Members, the holders of Common Units and the holders of Preferred
Units shall be entitled to vote on all such matters voting together as a single
class, with each Common Unit entitled to one vote per Common Unit and each
Preferred Unit entitled to one vote for each Common Unit issuable upon
conversion of such Preferred Unit as of the record date for such vote (or, if no
record date is specified, as of the date of such vote). Except with respect to
the proviso in SECTION 10.5 or as otherwise required by law, the holders of
Senior Units shall have no right to vote such Units on any matter submitted to
the Company's Members for a vote.
ARTICLE VII
DISSOLUTION AND LIQUIDATION
Section 7.1 DISSOLUTION. The Company shall be dissolved, and its
affairs shall be wound up and terminated, upon:
(a) the affirmative vote of the Board of Managers, together with a
Required Vote of the Members, approving such dissolution and liquidation; or
(b) an administrative dissolution or the entry of a decree of
judicial dissolution of the Company under Section 18-802 of the Act.
Except as set forth above or as otherwise required by law, the Company is
intended to have perpetual existence. The Company shall not be dissolved by the
admission of additional or substitute Members or by an Event of Withdrawal, and
upon and after any such admission or event the Company shall continue in
existence subject to the terms and conditions of this Agreement.
Section 7.2 LIQUIDATION OF COMPANY INTERESTS.
(a) Upon dissolution, the Company shall be liquidated in an orderly
manner. The Board of Managers shall act (or it may appoint one or more Members,
Representatives, officers, or other Persons to act) as the liquidators to wind
up the affairs of the Company pursuant to this Agreement and terminate the
Company. The costs of liquidation shall be borne by the Company. Prior to final
distribution and termination, the liquidators shall continue to operate the
Company and its assets with all of the power and authority of the Board. The
steps to be accomplished by the liquidators are as follows:
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(i) the liquidators shall pay, satisfy and discharge all
debts, obligations, and other liabilities of the Company to its creditors
(including, without limitation, all sales commissions or other expenses
incurred in liquidation) or otherwise make adequate provision for payment
and discharge thereof (including, without limitation, establishing cash
reserves to be held in escrow for contingent or unforeseen liabilities of
the Company, in such amounts and for such holding periods as the
liquidators may reasonably determine); and
(ii) after payment or provision for payment of all of the
Company's liabilities has been made in accordance with subparagraph (i),
(A) a final performance vesting determination shall be made under the
Performance Vesting Agreement, if it remains in effect, (B) a final
allocation of all items of income, gain, loss, and expense shall be made
in accordance with SECTION 3.2 hereof, and (C) all remaining assets of the
Company shall be distributed to the Members in accordance with SECTION
3.1(c). Any non-cash assets distributed to the Members shall first be
written up or down to their Fair Market Value, thus creating Profit or
Loss (if any), which shall be allocated in accordance with SECTION 3.2.
(b) In making distributions, the liquidators shall allocate each
type of Company assets among the Members ratably based upon the aggregate
amounts to be distributed with respect to the Units held by each such Member.
(c) The distribution of cash and/or property to a Member in
accordance with the provisions of this SECTION 6.2 constitutes a complete return
to such Member of its Capital Contributions and a complete distribution to the
Member of its interest in the Company and the Company's property. This paragraph
constitutes a compromise to which all Members have consented within the meaning
of the Act.
(d) Upon completion of the distribution of the Company's assets as
provided herein, the Company shall be terminated (and the Company shall not be
terminated prior to such time), and the Board of Managers (or such other Person
or Persons as the Act may require or permit) shall file a certificate of
cancellation with the Secretary of State of Delaware, cancel any other filings
made pursuant to this Agreement that are or should be canceled and take all such
other actions as may be necessary to terminate the Company. The Company shall be
deemed to continue in existence for all purposes of this Agreement until it is
terminated pursuant to this SECTION 7.2(d).
(e) A reasonable time shall be allowed for the orderly winding up of
the business and affairs of the Company and the liquidation of its assets
pursuant to this SECTION 7.2 in order to minimize any losses otherwise attendant
upon such winding up.
(f) The liquidators shall not be personally liable for the return of
Capital Contributions or any portion thereof to any Member (it being understood
that any such return shall be made solely from Company assets).
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Section 7.3 VALUATION.
(a) The "FAIR MARKET VALUE" of any assets to be valued under this
Agreement shall be determined in accordance with this SECTION 7.3.
(b) The Fair Market Value of any asset constituting cash or cash
equivalents shall be equal to the amount of such cash or cash equivalents.
(c) The Fair Market Value of any asset constituting publicly traded
securities shall be the average, over a period of 21 days consisting of the date
of valuation and the 20 consecutive business days prior to that date, of the
average of the closing prices of the sales of such securities on the primary
securities exchange on which such securities may at that time be listed, or, if
there have been no sales on such exchange on any day, the average of the highest
bid and lowest asked prices on such exchanges at the end of such day, or, if on
any day such securities are not so listed, the average of the representative bid
and asked prices quoted in the Nasdaq System as of 4:00 P.M., New York time, or,
if on any day such securities are not quoted in the Nasdaq System, the average
of the highest bid and lowest asked prices on such day in the domestic
over-the-counter market as reported by the National Quotation Bureau
Incorporated, or any similar successor organization.
(d) The Fair Market Value of any assets other than cash, cash
equivalents, or publicly traded securities shall be the fair value of such
assets, determined on the basis of an orderly, arm's length sale (structured to
produce the highest price for such assets) to a willing, unaffiliated buyer (or
to a willing affiliated strategic buyer, PROVIDED that Fair Market Value shall
not include any premium that such an affiliated strategic buyer would be willing
to pay to the extent such premium is attributable solely to such Person's
then-current affiliation, unless such Person has made a fully financed, firm
commitment offer (with no material conditions) to purchase such assets at a
price that includes such premium), taking into account all relevant factors
determinative of value. Such fair value shall be determined jointly by the
Company, the holders of a majority of the Preferred Units then outstanding, and
the holders of a majority of the Common Units then outstanding. If such parties
are unable to reach agreement within a reasonable period of time, such fair
value shall be determined by an independent appraiser experienced in valuing the
type of assets to be valued, which appraiser shall be jointly selected by the
Company, the holders of a majority of the Preferred Units then outstanding, and
the holders of a majority of the Common Units then outstanding. The
determination of such appraiser shall be final and binding on all parties, and
the fees and expenses of such appraiser shall be borne by the Company.
ARTICLE VIII
BOOKS OF ACCOUNT
Section 8.1 RECORDS AND ACCOUNTING. The Company shall maintain
complete and accurate books of account of the Company's affairs at the Company's
principal office, which books
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shall be open to inspection by any Member (or such Member's authorized
representative) at any time during ordinary business hours.
Section 8.2 BANK ACCOUNTS. The Company may establish accounts for
the deposit of Company funds, in such types and at such institutions, as shall
be determined from time to time by the Board of Managers.
Section 8.3 FISCAL YEAR. The Fiscal Year of the Company shall be the
12-month period ending on December 31 of each calendar year, or such other
annual accounting period as may be established by the Board of Managers.
Section 8.4 TAX ELECTIONS. The Taxable Year of the Company shall be
the same as the Company's Fiscal Year, unless the Board of Managers shall
determine otherwise in its sole discretion and in compliance with applicable
laws. The Board of Managers shall in its sole discretion determine whether to
make or revoke any available election pursuant to the Code. Each Member will
upon request supply any information necessary to give proper effect to any such
election.
Section 8.5 TAX REPORTS. The Company shall provide to each Member
within 75 days after the end of each Taxable Year, the Company's tax return and
form K-1 for such Taxable Year, and such other information as may be necessary
for the preparation of each such Member's United States federal and state income
tax returns.
Section 8.6 TAX CONTROVERSIES. The Member having the right to cast
the greatest number of votes in any vote of the Members pursuant to SECTION 6.8
shall be designated the Tax Matters Member and shall be authorized and required
to represent the Company (at the Company's expense) in connection with all
examinations of the Company's affairs by tax authorities, including resulting
administrative and judicial proceedings, and to expend Company funds for
professional services and other expenses reasonably incurred in connection
therewith. Each Member agrees to cooperate with the Company and to do or refrain
from doing any or all things reasonably requested by the Company with respect to
the conduct of such proceedings. The Tax Matters Member shall keep all Members
fully informed of the progress of any examinations, audits or other proceedings,
and all Members shall have the right to participate in any such examinations,
audits or other proceedings. Notwithstanding the foregoing, the Tax Matters
Member shall not settle or otherwise compromise any issue in any such
examination, audit or other proceeding without first obtaining approval of the
Board of Managers.
Section 8.7 SUBPART F INCOME. The Company shall use its reasonable
best efforts to cause its Subsidiaries to avoid recognizing income that would be
includible by the Company and its Members under Code Section 951; PROVIDED THAT
the Company and its Subsidiaries shall be free to take actions which will result
in income includible by the Company and its Members so long as the Company pays
tax distributions to the Members with respect to such income under
Section 3.1(b).
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ARTICLE IX
POWER OF ATTORNEY
Each of the undersigned does hereby constitute and appoint each
Representative and liquidator with full power to act without the others (subject
to the provisions of ARTICLE V hereof), as such Member's true and lawful
representative and attorney-in-fact, in such Member's name, place and stead, to
make, execute, sign, acknowledge and deliver or file in such form and substance
as is approved by the Board of Managers (a) all instruments, documents and
certificates which may from time to time be required by any law to effectuate,
implement and continue the valid and subsisting existence of the Company, or to
qualify or continue the qualification of the Company in the State of Delaware
and in all jurisdictions in which the Company may conduct business or own
property, and any amendment to, modification to, restatement of or cancellation
of any such instrument, document or certificate, (b) all instruments which the
Board of Managers shall deem appropriate to reflect any amendment, change,
modification, or restatement of this Agreement approved in accordance with the
terms hereof, (c) all conveyances and other instruments, documents and
certificates which may be required to effectuate the dissolution and termination
of the Company, and (d) all instruments relating to the admission, withdrawal,
or substitution of any Member in accordance with the terms hereof; PROVIDED,
HOWEVER, that the foregoing power of attorney is limited to the performance of
ministerial acts only and shall not extend to material matters of governance or
economic substance. The powers of attorney granted herein shall be deemed to be
coupled with an interest, shall be irrevocable, and shall survive the death,
disability, incompetency, bankruptcy, insolvency or termination of any Member
and the Transfer of all or any portion of such Member's Company interest, and
shall extend to such Member's heirs, successors, assigns, and personal
representatives.
ARTICLE X
MISCELLANEOUS
Section 10.1 CONVERSION OF THE COMPANY INTO A "C" CORPORATION. At
any time after the date hereof, upon the affirmative vote of the Board of
Managers and the Required Vote of the Members, the Company will be converted
(whether by merger, consolidation, or otherwise) into a corporation (as such
term is used in Subchapter C of the Code, Sections 301, ET SEQ.). Pursuant to
such conversion:
(i) each holder of Preferred Units shall receive in exchange
for such Preferred Units a number of shares of convertible preferred stock
of the Company (having rights and preferences substantially identical to
the Preferred Units) equal to the product of (x) the total number of
shares of convertible preferred stock issued in such conversion TIMES (y)
a fraction, the numerator of which is the number of Preferred Units held
by such holder immediately prior to such conversion, and the denominator
of which is the total number of Preferred Units outstanding immediately
prior to such conversion. Each share of convertible preferred stock
received in such conversion shall, as of immediately after such
conversion,
- 42 -
be deemed to have accrued, paid, unpaid, and accumulated dividends thereon
equal to the respective accrued, paid, unpaid, and accumulated Preferred
Yield existing as of immediately prior to such conversion with respect to
the Preferred Units exchanged in such conversion for such share of
preferred stock;
(ii) each holder of Common Units shall receive in exchange for
such Common Units a number of shares of common stock of the Company
(having rights and preferences substantially identical to the Common
Units) equal to the product of (x) the total number of shares of common
stock issued in such conversion TIMES (y) a fraction, the numerator of
which is the number of Common Units held by such holder immediately prior
to such conversion, and the denominator of which is the total number of
Common Units outstanding immediately prior to such conversion;
(iii) each holder of Class A Senior Units shall receive in
exchange for such Class A Senior Units a promissory note of the Company
with the following terms: (A) an aggregate principal amount equal to the
aggregate Capital Contributions made in respect of all Class A Senior
Units held by such holder immediately prior to such conversion, (B)
accruing simple interest at a rate of 8% per annum, (C) all principal and
accrued interest payable upon the first to occur of a Qualified Public
Offering, a Sale of the Company, or the fourth anniversary of the issuance
of such Class A Senior Units, (D) liquidation rights junior to all senior
debt obligations of the Company, and (E) such other terms and conditions
as are substantially identical to the rights and preferences of the Class
A Senior Units hereunder. Each promissory note received in such conversion
shall, as of immediately after such conversion, be deemed to have accrued
and unpaid interest thereon in an amount equal to simple interest on the
aggregate Capital Contributions made in respect of all Class A Senior
Units exchanged in such conversion for such promissory note, at a rate of
8% per annum, from the date of issuance of such Class A Senior Units to
the date of such conversion);
(iv) each holder of Class B Senior Units shall receive in
exchange for such Class B Senior Units a promissory note of the Company
with the following terms: (A) an aggregate principal amount equal to the
aggregate Class B Senior Value of all Class B Senior Units held by such
holder immediately prior to such conversion, (B) accruing interest in the
same manner and at the same times as the Class B Senior Yield would accrue
on the exchanged Class B Senior Units, (C) principal and accrued interest
payable in the same manner and at the same times as the exchanged Class B
Senior Units would be redeemed pursuant to SECTION 4.1(a)(ii) and would
receive distributions pursuant to SECTIONS 3.1(c) and (f), (D) liquidation
rights junior to all senior debt obligations of the Company and the
promissory notes issued in exchange for the Class A Senior Units, and PARI
PASSU with the payment of the Liquidation Value (and all accrued but
unpaid dividends thereon) of the Company's convertible preferred stock,
and (E) such other terms and conditions as are substantially identical to
the rights and preferences of the Class B Senior Units hereunder. Each
promissory note received in such conversion shall, as of immediately after
such conversion, be deemed to have accrued, paid, unpaid, and accumulated
interest thereon in an amount equal to the accrued, paid, unpaid, and
accumulated Class B Senior Yield,
- 43 -
respectively, existing as of immediately prior to such conversion with
respect to all Class B Senior Units exchanged in such conversion for such
promissory note;
(v) each holder of Class C Senior Units shall receive in
exchange for such Class C Senior Units a promissory note of the Company
with the following terms: (A) an aggregate principal amount equal to the
aggregate Capital Contributions made in respect of all Class C Senior
Units held by such holder immediately prior to such conversion, (B)
accruing simple interest at a rate of 8% per annum, (C) all principal and
accrued interest payable upon the first to occur of a Qualified Public
Offering, a Sale of the Company, or the fifth anniversary of the issuance
of such Class C Senior Units, (D) liquidation rights junior to all senior
debt obligations of the Company, the promissory notes issued in exchange
for Class A Senior Units, the promissory notes issued in exchange for
Class B Senior Units, and the payment of the Liquidation Value (and all
accrued but unpaid dividends thereon) of the Company's convertible
preferred stock, and (E) such other terms and conditions as are
substantially identical to the rights and preferences of the Class C
Senior Units hereunder. Each promissory note received in such conversion
shall, as of immediately after such conversion, be deemed to have accrued
and unpaid interest thereon in an amount equal to simple interest on the
aggregate Capital Contributions made in respect of all Class C Senior
Units exchanged in such conversion for such promissory note, at a rate of
8% per annum, from the date of issuance of such Class C Senior Units to
the date of such conversion).
Section 10.2 FURTHER ACTION. The parties shall execute and deliver
all documents, instruments, and certificates, provide all information, and take
or refrain from taking all such further actions as may be necessary or
appropriate to achieve the purposes of this Agreement and effect the provisions
hereof, as determined in good faith by the Board of Managers.
Section 10.3 TITLE TO COMPANY ASSETS. The Company's assets will be
deemed to be owned by the Company as an entity, and no Member, individually or
collectively, will have any ownership interest in any Company asset or any
portion thereof.
Section 10.4 CREDITORS. None of the provisions of this Agreement
shall be for the benefit of or enforceable by any creditors of the Company or
any of its Affiliates, and no creditor who makes a loan to the Company or any of
its Affiliates may have or acquire at any time as a result of making the loan
any direct or indirect interest in Company Profits, Losses, Distributions,
capital or property other than as a creditor.
Section 10.5 AMENDMENTS, MODIFICATIONS, OR WAIVERS. Any provision of
this Agreement may be amended, modified or waived upon the prior written
approval of the Members by a Required Vote; PROVIDED that any amendment,
modification, or waiver which adversely affects any Member's rights or
obligations hereunder relative to the Members voting in favor thereof, such
amendment, modification, or waiver shall also require the written consent of
such Member so adversely affected; AND PROVIDED FURTHER that if any such
amendment, modification, or waiver is to a provision in this Agreement that
requires a specific vote to take an action thereunder or to take an action with
respect to the matters described therein, such amendment, modification, or
waiver shall
- 44 -
not be effective unless such vote is obtained with respect to such amendment,
modification or waiver.
Section 10.6 SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall inure to the benefit of and be binding upon the
Members and their respective heirs, executors, administrators, legal
representatives, successors and permitted assigns, whether so expressed or not.
Section 10.7 REMEDIES. Each Member shall have all rights and
remedies set forth in this Agreement and all rights and remedies which such
Person has been granted at any time under any other agreement or contract and
all of the rights which such Person has under any law. Any Person having any
rights under any provision of this Agreement or any other agreements
contemplated hereby shall be entitled to enforce such rights specifically
(without posting a bond or other security), to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights
granted by law. No failure by any party to insist upon the strict performance of
any covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute a waiver of
any such breach or any other covenant, duty, agreement or condition.
Section 10.8 GOVERNING LAW. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by, and construed in accordance with, the laws of the State of
Delaware, without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of Delaware or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of Delaware.
Section 10.9 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
Section 10.10 COUNTERPARTS. This Agreement may be executed
simultaneously in two or more separate counterparts, any one of which need not
contain the signatures of more than one party, but each of which will be an
original and all of which together shall constitute one and the same agreement
binding on all the parties hereto.
Section 10.11 DESCRIPTIVE HEADINGS; INTERPRETATION. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a substantive part of this Agreement. Whenever required by the
context, any pronoun used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns, pronouns
and verbs shall include the plural and vice versa. The use of the word
"including" in this Agreement shall be by way of example rather than by
limitation. Reference to any agreement, document or
- 45 -
instrument means such agreement, document or instrument as amended or otherwise
modified from time to time in accordance with the terms thereof, and if
applicable hereof. The use of the words "or," "either" and "any" shall not be
exclusive. The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. If an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement.
Section 10.12 NOTICES. All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when (a) delivered
personally to the recipient, (b) telecopied to the recipient (with hard copy
sent to the recipient by reputable overnight courier service (charges prepaid)
that same day) if telecopied before 5:00 p.m. Chicago, Illinois time on a
business day, and otherwise on the next business day, or (c) one business day
after being sent to the recipient by reputable overnight courier service
(charges prepaid). Such notices, demands and other communications shall be sent
to the following Persons at the following addresses:
TO MDCP:
Three First National Plaza, Suite 3800
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
Xxxxx X. Xxxxx, Xx.
Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE) TO:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
TO XXXXXXXX OR XXXXXXXX HOLDINGS:
0000 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
- 46 -
WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE) TO:
Xxxxxxxx Xxxxx, Esq.
Vice President, Secretary, and General Counsel
XxXxxxxx Financial Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
TO ANY EXECUTIVE: at the Company's address, to the attention of
such Executive
WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE) TO:
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: W. Xxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
TO ANY OTHER MEMBER: at the address for such Member listed in the
Company's records
TO THE COMPANY:
0000 Xxxxxxxx Xxx , Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or to such other address or facsimile number or to the attention of such other
Person as the recipient party has specified by prior written notice to the
sending party.
Section 10.13 COMPLETE AGREEMENT. This Agreement, the documents
expressly referred to herein, and related documents of even date herewith and
therewith embody the complete agreement and understanding among the parties and
terminate, supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way (including, without limitation, the
Prior Agreement and the First Amended Agreement).
- 47 -
Section 10.14 BUSINESS DAYS. If any time period for giving notice or
taking action hereunder expires on a day which is a Saturday, Sunday, or legal
holiday in the State of Colorado, the Republic of France, or the jurisdiction in
which the Company's principal office is located, the time period shall
automatically be extended to the business day immediately following such
Saturday, Sunday, or legal holiday.
Section 10.15 OPT-IN TO ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE.
The Members hereby agree that the Units shall be securities governed by Article
8 of the Uniform Commercial Code of the State of Delaware (and the Uniform
Commercial Code of any other applicable jurisdiction).
Section 10.16 DELIVERY BY FACSIMILE. This Agreement, the agreements
referred to herein, and each other agreement or instrument entered into in
connection herewith or therewith or contemplated hereby or thereby, and any
amendments hereto or thereto, to the extent signed and delivered by means of a
facsimile machine, shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in person. At
the request of any party hereto or to any such agreement or instrument, each
other party hereto or thereto shall reexecute original forms thereof and deliver
them to all other parties. No party hereto or to any such agreement or
instrument shall raise the use of a facsimile machine to deliver a signature or
the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine as a defense to the
formation or enforceability of a contract and each such party forever waives any
such defense.
Section 10.17 EFFECTIVENESS OF AGREEMENT. This Agreement shall be
valid, binding, and effective against each Member (including Xxxx and Xxxxx)
when it has been signed by such Member. Pursuant to Section 10.5 of the First
Amended Agreement, this Agreement amending and restating the First Amended
Agreement shall be valid, binding, and effective against all Members when it has
been signed by Members constituting a Required Vote.
* * * *
- 48 -
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amended and Restated Limited Liability Company Agreement to be signed as of the
date first above written.
MEMBERS:
XXXXXXXX HOLDINGS LIMITED PARTNERSHIP
By LPL Investment Group, Inc.,
its general partner
By /s/ Xxxxxxxx X. XxXxxxxx
----------------------------------------
Xxxxxxxx X. XxXxxxxx, its Chairman
MADISON DEARBORN CAPITAL PARTNERS II, L.P.
By Madison Dearborn Partners II, L.P.,
its general partner
By Madison Dearborn Partners, Inc.,
its general partner
By /s/ Xxxx X. Xxxxxxxx
----------------------------------------
Its Managing Director
----------------------------------------
DOVEY COMPANY LLC
By /s/ Xxxxx X. Xxxxx
----------------------------------------
Xxxxx X. Xxxxx, its manager
DOVEY FAMILY PARTNERS LLLP
By /s/ Xxxxx X. Xxxxx
----------------------------------------
Xxxxx X. Xxxxx, its general partner
/s/ Xxxxx X. Xxxxx
--------------------------------------------
Xxxxx X. Xxxxx
(Signature Page for Second Amended and Restated LLC Agreement)
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxxxxx
/s/ Xxxxx X. Xxxxx
--------------------------------------------
Xxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxx
--------------------------------------------
Xxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxxx
--------------------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxx
--------------------------------------------
Xxxxxx X. Xxxx
/s/ Xxxx X. Xxxxx
--------------------------------------------
Xxxx X. Xxxxx
(Signature Page for Second Amended and Restated LLC Agreement)
OTHER MEMBERS (SIGNATURES OF WHOM ARE NOT
INCLUDED) WHO ARE PARTY TO THIS AGREEMENT
PURSUANT TO THEIR EXECUTIVE SECURITIES
AGREEMENTS (AND/OR JOINDER AGREEMENTS
ENTERED INTO IN CONNECTION THEREWITH):
--------------------------------------------
Xxxxxxx Xxxxxxx
Xxxx Xxxxxx
Xxxx-Xxxxx Le Monze
Xxxxxxx Xxxxxxx
Xxxx Xxxxx
Xxxxxxxxx Xxxxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxxx XxXxxxx
Michel Xxxxxxxxxx
Xxxxx Lauterslager
Xxxx Xxxx
Xxxxxx X. Xxxxx, Xx.
Xxx Xxxxxxxxx
Pierre Wattelier
Xxxxxxxx Xxxxxx
Xxx Xxxxxx
Xxxx-Xxxxxxxx Xxxxxx
Xxxxxx xx Xxxxx
Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxx
Xxxxx XxXxxx
Xxxx-Xxxxxxxxx Xxxxxxx
Xxxxxxx Xxxxx
Xxxxx-Xxxxxxxxx Xxxxxx
Van-Xxxx Xxxxxxxx
Xxxxxxxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxxxxx Burlinchon
Xxxxxx Affret
Xxxx Xxxxxxxxx
Xxxxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxxxx
Xxxxxxxx Xxxxxx
(Signature Page for Second Amended and Restated LLC Agreement)
