EXHIBIT 10.35
FORMATION AGREEMENT
OF
AGS HOLDINGS L.L.C.,
A DELAWARE LIMITED LIABILITY COMPANY
DATED AS OF OCTOBER 17, 1997
FORMATION AGREEMENT
OF
AGS HOLDINGS L.L.C.,
A DELAWARE LIMITED LIABILITY COMPANY
THIS FORMATION AGREEMENT is entered into by TAG-IT PACIFIC L.L.C., a
Delaware limited liability company (the "Member"), and is acknowledged and
accepted by Xxxx Xxxx and Xxxxx Xxxx (collectively, the "Managers"), as of
this 17th day of October, 1997.
A G R E E M E N T S:
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In consideration of the mutual promises herein contained and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Member hereby agrees as follows:
ARTICLE 1
FORMATION OF LIMITED LIABILITY COMPANY
The Member hereby forms a limited liability company (the "Company") under
the provisions of the Delaware Limited Liability Company Act (the "Act") and,
except as herein otherwise expressly provided, the rights and liabilities of
the Member shall be as provided in that Act, as amended from time to time.
On this date, and on behalf of the Company, the Member executed Certificate
of Formation, which shall be promptly filed with the Delaware Secretary of
State in accordance with and pursuant to the Act.
ARTICLE 2
NAME
The business of the Company shall be conducted under the name "AGS
HOLDINGS L.L.C." or such other name as the Managers shall hereafter designate.
ARTICLE 3
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
"ACT" shall mean the Delaware Limited Liability Company Act, as it may be
amended from time to time.
"AGREEMENT" shall mean this Formation Agreement, as amended, modified or
supplemented from time to time.
"AGS" shall mean AGS Stationery, Inc., a California corporation.
"COMPANY" shall mean the limited liability company formed pursuant to
this Agreement, as said company may from time to time be constituted.
"MANAGERS" shall mean Xxxx Xxxx and Xxxxx Xxxx.
"MEMBER" shall mean TAG-IT PACIFIC L.L.C., a Delaware limited liability
company.
"MEMBERSHIP INTEREST" shall mean the Member's ownership interest in the
Company, which includes the Member's share of the profits and losses of the
Company, the Member's right to receive distributions of the Company's assets,
the Member's right to vote or participate in the management of the Company as
permitted in this Agreement, and the Member's right to information concerning
the business and affairs of the Company, as provided in this Agreement and
under the Act.
"TRANSFER" shall mean any transfer, sale, assignment, gift, pledge or
other disposition or encumbrance.
ARTICLE 4
NATURE OF BUSINESS
The business and purpose of the Company is to acquire and hold all of the
issued and outstanding shares of stock in AGS, a lower tier subsidiary of the
Member, to vote such shares of stock and appoint the board of directors of
such corporation, to take all actions as may be appropriate as the sole
shareholder of such corporation, and to engage in any lawful act or activity
related thereto or for which limited liability companies may be organized
under the laws of the State of Delaware.
ARTICLE 5
TERM
The term of the Company shall commence on the date hereof and shall
continue until December 31, 2035, unless earlier terminated under the
provisions of Article 12.
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ARTICLE 0
XXXXXXXXX XXXXX XX XXXXXXXX
The principal business office of the Company shall be located at the
principal office of the Member, or at such other place as may be designated
by the Managers from time to time.
ARTICLE 7
CAPITAL AND CONTRIBUTIONS
As a contribution to the capital of the Company, the Member has caused
the shareholders of AGS to transfer to the Company all of the issued and
outstanding shares of capital stock of AGS, pursuant to the terms of that
certain Exchange Agreement, dated October 17, 1997, by and among the Member,
the Company, AGS, such AGS shareholders and certain other parties. Except as
otherwise required by law, the Member shall not be liable to creditors of the
Company, and shall not be required to make additional capital contributions
to the Company or to restore all or any portion of a deficit balance in the
Member's capital account with the Company.
ARTICLE 8
DISTRIBUTIONS AND ALLOCATIONS
For any fiscal year of the Company, distributions in cash or in kind
shall be made to the Member, at such times and in such amounts as determined
by the Managers. The Managers shall have the absolute discretion to
determine the amount of cash to be withheld from distribution as a reserve
for contingencies and anticipated obligations of the Company. Each item of
the Company's income, gain, loss, deduction or credit shall be allocated to
the Member.
ARTICLE 9
BOOKS AND RECORDS; TAX MATTERS PARTNER
There shall be maintained and kept at all times during the continuation
of the Company proper and usual books of account which shall accurately
reflect the condition of the Company and shall account for all matters
concerning the management thereof; and which books shall be maintained and
kept at the principal office of the Company or at such other place or places
as the Managers may from time to time determine. The Company's books and
records shall be maintained on the basis selected by the Managers. The
fiscal year of the Company shall end on August 31 of each year or such other
date as determined by the Managers. The "tax matters partner" of the Company
within the meaning of section 6231(a)(7) of the Internal Revenue Code
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shall be Xxxx Xxxx or such other person as may be designated by the Managers
from time to time.
ARTICLE 10
MANAGEMENT
The Company shall be managed by the Managers. The Managers shall have
general supervision, direction, and control of the business of the Company,
and shall have the general powers and duties of management typically vested
in the office of president of a corporation, including, but not limited to,
the right to enter into and carry out contracts of all kinds; to employ
employees, agents, consultants and advisors on behalf of the Company; to lend
or borrow money and to issue evidences of indebtedness; to bring and defend
actions in law or at equity; to buy, own, manage, sell, lease, mortgage,
pledge or otherwise acquire or dispose of the Company property. Without
limiting the generality of this paragraph, the Managers shall have power and
authority to act on behalf of the Company, subject to the limitations of the
Act and the limitations set forth hereinafter:
(a) To exercise all rights of the Company as the sole shareholder
of AGS, including without limitation the right to vote the shares of AGS
stock held by the Company, the right to execute written consents and waivers,
and the right to elect and maintain on the board of directors of AGS such
persons as the Managers in their sole discretion shall determined; provided,
however, that at all times such board of directors of AGS shall include at
least one of the Managers;
(b) To acquire, sell, transfer, exchange, lease or dispose of
property from or to any person or entity as the Managers may determine; and
the fact that a Manager or the Member is directly or indirectly affiliated or
connected with any such person or entity shall not prohibit the Managers from
dealing with that person or entity;
(c) To borrow money for the Company from banks, other lending
institutions, the Managers, the Member or affiliates of the Managers or the
Member, or any other individual or entity on such terms as the Managers deem
appropriate, and in connection therewith to hypothecate, encumber and grant
security interests in the assets of the Company to secure repayment of the
borrowed sums;
(d) To purchase liability and other insurance to protect the
property and business of the Company;
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(e) To hold and own any Company real and personal properties in the
name of the Company;
(f) To invest any funds of the Company temporarily (by way of
example but not limitation) in time deposits, short-term governmental
obligations, commercial paper or other investments;
(g) To execute on behalf of the Company all instruments and
documents, including, without limitation, checks; drafts; notes and other
negotiable instruments; mortgages or deeds of trust; security agreements;
financing statements; documents providing for the acquisition, mortgage or
disposition of property of the Company; assignments; bills of sale; leases;
partnership agreements; and any other instruments or documents necessary or
appropriate, in the opinion of the Managers, to the business of the Company;
(h) To employ accountants, legal counsel, managing agents or other
experts to perform services for the Company and to compensate them from
Company funds;
(i) To retain and compensate employees and agents generally, and to
define their duties;
(j) To merge the Company with any other limited liability company,
a corporation or a general or limited partnership;
(k) To enter into any and all other agreements on behalf of the
Company, with any other person or entity for any purpose necessary or
appropriate to the conduct of the business of the Company;
(l) To pay reimbursement from the Company of all expenses of the
Company reasonably incurred and paid by the Managers on behalf of the
Company; and
(m) To do and perform all other acts as may be necessary or
appropriate to the conduct of the business of the Company.
Every contract, deed, mortgage, lease and other instrument executed by
the Managers shall be conclusive evidence in favor of every person or entity
relying thereon or claiming thereunder that, at the time of the delivery
thereof, (i) the Company was in existence, (ii) neither this Agreement nor
the Certificate of Formation had been amended in any manner so as to restrict
the authority of the Managers, and (iii) the execution and delivery of such
instrument was duly authorized by the Managers.
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The Managers may appoint a secretary, a chief financial officer, and such
other officers of the Company as appropriate, each of whom shall hold office
for such period, have such authority and perform such duties as the Managers
determine.
The funds of the Company shall be deposited in such bank account or
accounts, or invested in such interest-bearing or non-interest bearing
investments, as shall be designated by the Managers. All withdrawals from
any such bank accounts shall be made by a Manager or a designated officer of
the Company. Company funds shall be separately identifiable from and not
commingled with those of any other person or entity.
ARTICLE 11
TRANSFER OF MEMBERSHIP INTEREST
There shall be no restrictions on the Transfer by the Member of all or
any portion of, or any interest in, its Membership Interest.
ARTICLE 12
DISSOLUTION OF THE COMPANY
The Company shall be dissolved on the earlier of the following events:
(a) The decision of the Member or the Managers to dissolve;
(b) The sale or liquidation of substantially all the assets of the
Company;
(c) The expiration of the term of the Company, or
(d) As otherwise provided by the Act.
The assets of the Company on winding-up shall be applied first to the
expenses of the winding-up, liquidation and dissolution, then to creditors,
in order of priority as provided by law, and thereafter distributed to the
Member. The Member shall not be personally liable for any debts, liabilities
or obligations of the Company, whether to the Company or to the creditors of
the Company, beyond the amount contributed by the Member to the capital of
the Company, the Member's share of the accumulated but undistributed profits
of the Company, if any, and the amount of any distribution (including the
return of any capital contribution) made to the Member required to be
returned to the Company pursuant to the Act.
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ARTICLE 13
ADMISSION OF NEW MEMBERS; AMENDMENTS
New members may be admitted to the Company as determined by the Member,
and shall be admitted upon such terms and conditions as the Member and the
Managers may determine, consistent with this Agreement, the Company's
Certificate of Formation and any applicable provision of law or rule of a
governmental agency or self-regulating organization which has jurisdiction
over the business of the Company. This Agreement and the Certificate of
Formation may be amended at any time and from time to time as determined by
the Member.
ARTICLE 14
LIABILITY AND INDEMNIFICATION
Neither the Member nor any Manager, officer, employee or agent of the
Company, the Member or a Manager shall be liable to the Company or the Member
for any expenses, damages or losses arising out of the performance of his
duties for the Company other than those expenses, damages or losses directly
attributable to such person or entity not acting in good faith and in a
manner that he reasonably believed to be in or not opposed to the best
interests of the Company or attributable to such person's breach of his duty
of loyalty to the Company. The Company shall indemnify any person or entity
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (including, without limitation, an action by
or in the right of the Company or by the Member) by reason of the fact that
he, she or it is or was the Member, a Manager, or an employee or agent of the
Company, the Member or a Manager against expenses (including attorneys' fees)
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding to the
fullest extent permitted under Delaware law.
ARTICLE 15
MISCELLANEOUS
This Agreement and the rights of the Member hereunder shall be governed
by and interpreted in accordance with the laws of the State of Delaware.
Whenever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement, or the application of such provision to any
person or circumstances shall be held invalid, the remainder of this
Agreement, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected hereby.
Captions contained in this Agreement are inserted only as a matter of
convenience and in no way define, limit or extend the scope or intent of this
Agreement or any provision thereof.
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All pronouns shall be deemed to refer to the masculine, feminine, neuter,
singular or plural, as the identity of the person, firm or corporation may
require in the context thereof.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
executed as of the date first set forth above.
TAG-IT PACIFIC L.L.C.,
a Delaware limited liability company
By: /s/ XXXXX XXXX
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Its: Managing Member
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ACKNOWLEDGED AND ACCEPTED BY:
/s/ XXXX XXXX
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Xxxx Xxxx
/s/ XXXXX XXXX
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Xxxxx Xxxx
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