EXHIBIT 10.17
OPERATING AGREEMENT
THIS OPERATING AGREEMENT (the "Agreement") is made and entered into as of
July_____, 2001 by and among NARBITEC, L.L.C., a Florida limited liability
company (the "Company"), and the members (individually, a "Member" and
collectively, the "Members") listed on Schedule "A" hereto.
RECITALS:
WHEREAS, the parties hereto have formed the Company as a limited liability
company under applicable Florida law; and
WHEREAS, the parties hereto wish to enter into an agreement which will
govern certain aspects of the operation and governance of the Company.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties contained herein, and for 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.
PARTIES, AUTHORIZATION AND PURPOSE OF THIS AGREEMENT
SECTION 1.1. FORMATION; TERM
(a) The Members hereby acknowledge and agree that (i) the Company has
been formed as a limited liability company under the Florida Limited Liability
Company Act (Chapter 608 of the Florida Statutes) (the "Act"), and (ii) the
rights, duties and obligations of the Members shall be as provided in the Act
except as otherwise provided herein or in the Company's Articles of Organization
(the "Articles of Organization"').
(b) Upon the execution of this Agreement, each party listed on Schedule
"A" hereto shall become a Member of the Company. Each Member's mailing address
and Capital Contribution (each, a "Capital Contribution") made to the Company
shall be listed on Schedule "A", which shall be amended from time to reflect
updated or revised information.
(c) No person may become a Member of the Company without first assenting
to and signing a copy of this Agreement. Any act by the Company to offer or
provide Member status, or to reflect that status in the Company's Required
Records (as defined herein), shall automatically include the condition that the
person becoming a Member must first execute this Agreement. The Company shall
not accept a contribution from, or accord Member status to, any person who has
not first executed this Agreement. The Company's acceptance of a contribution
from a person who has not executed this Agreement does not waive that person's
obligation to execute this Agreement,
(d) The duration of the Company's existence shall be perpetual unless
sooner terminated in accordance with the terms hereof.
(e) No Transfer (as defined herein) of a Unit (as defined herein) is
effective unless it complies with Article XI hereof and the assignee has
consented to and executed a counterpart of this Agreement.
(f) This Agreement is made pursuant to Florida Statutes Section
608.423(1).
ARTICLE II.
DEFINITIONS
SECTION 2.1. DEFINITIONS
For purposes of this Agreement, the following terms have the following
meanings:
(a) "APPROVAL" means the approval of the Members who hold a majority of
the then outstanding Units (as defined herein) or a majority of the Managers (as
defined herein), as applicable and as modified by other specific provisions of
this Agreement
(b) "BOARD OF MANAGERS" means the governing body of the Company which is
composed of Managers (as defined herein).
(c) "BONA FIDE OFFER" shall mean an offer in writing, signed by the
offeror, who must be a person or entity financially capable of carrying out the
terms of the offer, in a form legally enforceable against the offeror.
(d) "BRIGHTSTAR" shall mean Brightstar Corp., a Delaware corporation.
(e) "CAPITAL ACCOUNT" means the account of any Member, maintained as
provided in Section 7.2.
(f) "CAPITAL INTEREST" means the right of any Member to be paid the
amount in that Member's Capital Account.
(g) "CODE" means the Internal Revenue Code of 1986, as amended, and any
successor to that Code.
(h) "DEFAULT RULE" means a rule stated in the Act:
(i) which structures, defines, or regulates the governance,
operations or any other aspects of a limited liability company organized under
the Act, and
(ii) which applies except to the extent it is negated or modified
through the provisions of a limited liability company's articles of organization
or operating agreement.
(i) "DISINTERESTED" means, with respect to a Member or Manager and with
respect to a particular transaction, a Member or Manager who (i) is not a party
to that transaction, (ii) has
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no material financial interest in any organization that is a party to that
transaction, and (iii) is not related by blood or marriage to any person, who
either is a party to that transaction or has a material financial interest in
any organization that is a party to that transaction.
(j) "DISSOLUTION" means the termination of the Company's legal
existence.
(k) "FISCAL YEAR" means the annual period for which the Company files
its federal income tax return.
(l) "INITIAL MEMBERS" means Brightstar and Xxxxx Xxxxx.
(m) "MANAGER" means a person duly elected under Article VIII hereof to
manage the business of the Company.
(n) "NAREA" shall mean Xxxxx Xxxxx.
(o) "REQUIRED RECORDS" means those records that Florida Statutes Section
608.4101 requires the Company to maintain.
(p) "TRANSFER" shall have the meaning set forth in Section 11.1 hereof.
ARTICLE III.
BACKGROUND OF THIS AGREEMENT
SECTION 3.1 BUSINESS
The purpose of the Company shall be to engage in the management of market
research, product design, product development, product field testing, product
manufacturing, and commercialization of wireless products (the "Products") in
Latin America and to engage in any and all activities incident to or in
furtherance of any of the foregoing and to engage in any other activities
approved by the Board of Managers in accordance with the terms of this Agreement
and not otherwise specifically prohibited under the laws of the State of
Florida. As of the date of this Agreement, the principal place of business of
the Company is 0000 X.X. 000xx Xxxxxx, Xxxxx, Xxxxxxx 00000.
SECTION 3.2. INTENT OF THIS AGREEMENT
The parties hereto have reached an understanding concerning various
aspects of (i) their business relationship with each other and (ii) the
organization, operation and governance of the Company and its business. They
wish to use rights created by applicable law to document that understanding and
their interest. The parties hereto intend this Agreement will control the
business and affairs of the Company, including, without limitation, the
Company's governance structure, the Company's Dissolution, winding up and
termination, relations among the Members and the relationship between the
Members and the Managers.
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SECTION 3.3. INVALIDITY AND UNREASONABLENESS OF EXPECTATIONS NOT INCLUDED IN
THIS AGREEMENT
(a) The Members fear the uncertainty and the potential for discord that
would exist if the unstated expectation of any Member can be used to gain
advantage through litigation.
(b) The Members therefore agree that:
(i) it is unreasonable for any Member to have or rely on an
expectation that is not reflected in this Agreement, the Articles of
Organization or the Act;
(ii) any Member who has or develops an expectation contrary to or
in addition to this Agreement, the Articles of Organization or the Act has a
duty to
(A) immediately inform all other Members, and
(B) promptly attempt to have this Agreement amended to
reflect the expectation;
(iii) the failure of a Member who has or develops an expectation
contrary to or in addition to the contents of this Agreement to obtain an
amendment of this Agreement as provided in Section 3.3(b)(ii) is evidence that
the expectation was not reasonable and estops that Member from asserting that
expectation as a basis for any claim against the Company or any other Member.
SECTION 3.4. ADVICE OF COUNSEL
Each Member hereby:
(a) understands, agrees and acknowledges that this Agreement contains
legally binding provisions, and
(b) has either consulted their or its own lawyer or consciously decided
not to consult their or its lawyer regarding this Agreement and such Member's
rights and obligations hereunder.
ARTICLE IV.
RELATIONSHIP OF THIS AGREEMENT TO THE
ACT AND TO THE ARTICLES OF ORGANIZATION
SECTION 4.1. RELATIONSHIP OF THIS AGREEMENT TO THE ACT
To the extent allowed by applicable law:
(a) if any provision of this Agreement conflicts with a Default Rule or
other provision of applicable law, this Agreement shall control, and
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(b) if it is necessary to construe a Default Rule or other provision of
applicable law in a certain manner in order to effectuate any provision of this
Agreement, such Default Rule or other provision of applicable law shall be
construed accordingly.
SECTION 4.2. CONFLICTS WITH ARTICLES OF ORGANIZATION
If a provision of this Agreement differs from or conflicts with a
provision of the Articles of Organization, then to the extent allowed by
applicable law this Agreement shall control.
ARTICLE V.
MEMBERSHIP AND CONTRIBUTIONS
SECTION 5.1. MEMBERS
(a) There shall be a single class of Members.
(b) Additional Members of the Company may be admitted in accordance with
the terms of this Agreement. The address of each additional Member shall be
added to Schedule "A", which shall be amended by the addition of the address of
each additional Member.
(c) The Company shall be authorized to issue 10,000 membership units
(the "Units"). The Units owned by each Member shall be as set forth on Schedule
"A."
(d) Except as otherwise provided herein, any Member shall have the right
to voluntarily resign or otherwise withdraw from the Company without the
Approval of the remaining Members.
(e) Members shall have the powers and authority conferred upon them
pursuant to the Act and this Agreement. Members shall have the right to attend
all meetings of the Members.
(f) Except as otherwise provided herein or by the Act, each Member shall
be entitled to one vote for each Unit owned by the Member on all matters on
which Members are entitled to vote or consent pursuant to the Act or this
Agreement.
(g) No Member in his or its capacity as a Member may bring a suit or
action against the Company or against any other Member in the other Member's
capacity as a Member for any reason except to obtain urgent judicial relief or
to enforce an arbitration order under Article XX hereof.
SECTION 5.2. UNITS
(a) Ownership rights in the Company are reflected by Units as recorded
in the Required Records. Each Unit:
(i) has equal governance rights with every other Unit and in
matters subject to a vote of the Members has one vote (except as otherwise
specifically provided herein); and
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(ii) except as otherwise specifically provided herein, each Unit
has equal rights with every other Unit with respect to sharing of profits and
losses and with respect to distributions.
(b) The Company will issue certificates representing Units to all
Members.
(c) Each certificate representing Units shall contain the following
legends and any other restrictive legends that the Board of Managers chooses to
put on the certificates:
"THE UNITS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE, AND
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS DULY
REGISTERED AND/OR QUALIFIED UNDER THE ACT AND ALL APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY THAT THE PROPOSED OFFER, SALE OR TRANSFER IS EXEMPT FROM
THE REQUIREMENTS OF THE ACT AND ALL APPLICABLE STATE SECURITIES LAWS
THE INTERESTS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS AND AGREEMENTS CONTAINED IN, AND MAY NOT BE SOLD,
ASSIGNED, TRANSFERRED, ENCUMBERED, PLEDGED OR OTHERWISE DISPOSED OF
EXCEPT IN COMPLIANCE WITH, THE OPERATING AGREEMENT OF NARBITEC,
L.L.C. (THE "COMPANY"). BY ACCEPTANCE OF THE INTERESTS EVIDENCED BY
THIS CERTIFICATE, THE HOLDER AGREES TO BE BOUND BY ALL OF THE TERMS
AND PROVISIONS OF SUCH OPERATING AGREEMENT AND ALL AMENDMENTS
THERETO. COPIES OF THE OPERATING AGREEMENT ARE ON FILE IN THE
PRINCIPAL OFFICE OF THE COMPANY"
SECTION 5.3. ISSUANCE OF UNITS
(a) The Board of Managers shall determine the consideration for which
the Company issues all Units; provided, however, that such consideration must be
fair to the Company and in all cases must be adequate and reasonable. For each
Member, the Required Records shall state the value and nature of the
contribution received by the Company and the number of Units received in return
by the Member.
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(b) No Member has any right to make additional contributions or obtain
additional Units except in the sole discretion of the Board of Managers, and
each Member specifically acknowledges and agrees that no such rights, including,
without limitation, preemptive rights, are granted to any Member hereunder,
(c) The Company may accept additional Capital Contributions and issue
additional Units in the sole discretion of the Board of Managers.
(d) Notwithstanding any other provision hereof, all new Members who are
issued Units by the Company after the date of this Agreement must, as a
condition precedent to such issuance, execute a counterpart of this Agreement.
SECTION 5.4. MANDATORY ADDITIONAL CONTRIBUTIONS
Except as otherwise provided in separate agreements or as provided in
Section 5.9 hereof, the Company has no right to require any Member to make
additional contributions. This Section does not release any Member from any
obligation or promise of future performance that the Company accepted as a
contribution, including, without limitation, the Initial Members' obligation to
make Capital Contributions as described in Section 5.9 hereof.
SECTION 5.5. NO RIGHTS OF REDEMPTION OR RETURN OF CONTRIBUTION
No Member has a right to have his Units redeemed or his contribution
returned (prior to the Dissolution of the Company) without the Approval of the
Board of Managers which may be withheld in the Board of Managers' sole
discretion, even if that Member becomes a Dissociated Member prior to
termination of the Company. The Company may not redeem any Units without the
written consent of the Member who owns those Units.
SECTION 5.6. ADVANCES
If a Member lends or advances funds to the Company, the amount of such
loans or advances shall not be treated as a Capital Contribution, but shall be a
debt due from the Company to such Member to be repaid in accordance with the
terms of such loan or advance.
SECTION 5.7. NOT FOR BENEFIT OF CREDITORS
The provisions of this Article V are not intended to be for the benefit of
any creditor or other person to whom any debts, liabilities, or obligations are
owed by (or who otherwise has any claim against) the Company or any of the
Members, and no such creditor or other person shall obtain any right under such
provisions or shall by reason of any such provisions make any claim in respect
of any debt, liability, obligation, or claim against the Company or any of the
Members.
SECTION 5.8. FORMATION COSTS
All costs and expenses incurred with respect to the formation of the
Company shall be borne by the Company.
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SECTION 5.9. INITIAL MEMBERS' CAPITAL CONTRIBUTIONS
Each of the Initial Members hereby covenants and agrees to make the full
Capital Contributions listed on Schedule "A" hereto.
ARTICLE VI.
PROFITS, LOSSES AND DISTRIBUTIONS;
TRANSACTIONS WITH THE COMPANY
SECTION 6.1. ALLOCATION OF PROFITS AND LOSSES
(a) Except as otherwise provided herein, the Company's profits and
losses shall be allocated during each Fiscal Year according to the number of
Units owned by a Member.
(b) For any Unit not owned for the entire Fiscal Year, any such
allocations shall be prorated for the time such Unit was owned during that
Fiscal Year.
SECTION 6.2. DISTRIBUTIONS
Subject to applicable law, cash distributions, if any, shall be made to
the Members as determined by the Board of Managers, in its sole discretion.
Notwithstanding the foregoing, it is the Company's intent that all amounts
available for distribution under applicable law be distributed to the Members
except for funds which are retained by the Company in the sole discretion of the
Board of Managers for valid business purposes, including, without limitation, as
working capital reserves; provided, however, that the Company shall distribute,
on an annual basis, such amounts to the Members as necessary to enable the
Member with the highest tax rate to pay all applicable taxes payable by the
Member on the allocation to it of Company profits. The immediately preceding
sentence shall in no manner be deemed to modify Section 6.3(a) below with
respect to the allocation of distributions in accordance with the number of
Units owned by the Members. Except as specifically provided in this Section 6.2
or elsewhere in this Agreement, no Member has a right to any distributions prior
to the termination of the Company.
SECTION 6.3. ALLOCATION OF DISTRIBUTIONS
(a) Distributions, if any, will be allocated according to the number of
Units owned.
(b) For any Unit not owned for the entire Fiscal Year, such allocation
will be prorated for the time such Unit was owned during that Fiscal Year.
SECTION 6.4. DISTRIBUTIONS UPON DISSOLUTION OF THE COMPANY
(a) At the Dissolution of the Company, subject to Article XII hereof and
after the Company has satisfied or provided for the satisfaction of all the
Company's debts and other obligations, the Company's assets will be distributed
in cash to the Members whose interests have not been previously redeemed as
follows:
(i) first, in discharge of their respective Capital Interests; and
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(ii) then, in proportion to their Units.
(b) If the Company lacks sufficient assets to make the distributions
described in Section 6.4(a), the Company will make distributions in proportion
to the amount in the respective Capital Interests of the Members whose interests
have not been previously redeemed.
SECTION 6.5. DISTRIBUTIONS IN KIND
(a) No Member has a right to any distribution in any form other than
cash.
(b) The Company may not make a distribution in kind unless
(i) the Member receiving the in-kind distribution consents,
(ii) all Members receive undivided interests in the same property,
or
(iii) all Members receive, in proportion to their rights to
distribution, interests in substantially equivalent property.
SECTION 6.6. DISTRIBUTIONS SUBJECT TO SET-OFF BY THE COMPANY
All distributions to be made to Members hereunder are subject to set-off
by the Company (a) for any outstanding obligation of a Member to make a Capital
Contribution to the Company; and (b) for any outstanding debt owed by a Member
to the Company.
SECTION 6.7. OTHER TRANSACTIONS
(a) With the Approval of the Board of Managers, the Company may borrow
money from and enter into any other transactions with a Member who is not a
Manager.
(b) The Company may enter into transactions (including borrowing money)
with a Manager, whether or not the Manager is a Member, with the written
approval of a majority of the Disinterested Managers. To be valid, such approval
must be based on all material information concerning both the proposed
transaction and the Manager's relationship to the proposed transaction.
ARTICLE VII.
TAX MATTERS
SECTION 7.1. TAX CHARACTERIZATION AND RETURNS
(a) It is the intent of the Members that the Company will be treated as
a partnership (and not as a corporation) for federal and state tax purposes. All
provisions of this Agreement and the Articles of Organization are to be
construed to preserve that tax status.
(b) Within ninety (90) days after the end of each Fiscal Year, the
Members will cause to be delivered to each person who was a Member at any time
during such Fiscal Year a
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Schedule K-l and such other information as may be necessary for the preparation
of each Member's federal or state income tax returns.
SECTION 7.2. CAPITAL ACCOUNTS
The Company will establish a Capital Account for each Member and will
maintain each Capital Account according to the following rules:
(a) Maintenance. The Company will maintain the Capital Accounts in
accordance with Treasury Regulations Section 1.704-l(b)(2)(iv).
(b) Negative Capital Account and Qualified Income Offset. A Member shall
not be liable to fund any deficit in that Member's Capital Account at any time.
Notwithstanding any other provision of this Agreement, if a Member receives an
adjustment, allocation, or distribution as described in Treasury Regulations
Section 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-
1(b)(2)(ii)(d)(6), and such adjustment, allocation, or distribution results in a
deficit balance in that Member's Capital Account, the Member will be allocated
items of income and gain in an amount and manner sufficient to eliminate the
deficit balance or the increase in the deficit balance as quickly as possible.
It is intended that this subdivision will meet the requirements of a "qualified
income offset" as defined in Treasury Regulations Section 1.704-1 (b)(2)(ii)(d),
and this subdivision is to be interpreted and applied consistent with that
intention.
(c) Non-recourse Deductions. If a Member's Capital Account has a deficit
balance at any time and the deficit or increase in deficit was caused by the
allocation of non-recourse deductions as defined in Treasury Regulations Section
1.704-2(b), then beginning in the first taxable year of the Company in which
there are non-recourse deductions or in which the Company makes a distribution
of proceeds of a non-recourse liability that are allocable to an increase in
minimum gain as defined in Treasury Regulations Section 1.704-2(d) and
thereafter throughout the full term of the Company, the following rules shall
apply:
(i) Non-recourse deductions shall be allocated to the Members in a
manner that is reasonably consistent with the allocations that have substantial
economic effect as defined in Treasury Regulations Section 1.704-1 or some other
significant item attributable to the property securing the non-recourse
liabilities, if applicable; and
(ii) If there is a net decrease in minimum gain for a taxable year,
each Member will be allocated items of Company income and gain for that year
equal to that Member's share of the net decrease in minimum gain as defined in
Treasury Regulations Section 1.704-2(g)(2).
SECTION 7.3. ACCOUNTING DECISIONS
(a) The Board of Managers shall make all decisions as to the Company's
accounting matters.
(b) The Board of Managers may, in their sole discretion, cause the
Company to make any elections available under the Code.
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SECTION 7.4. TAX MATTERS MEMBER
The Board of Managers shall designate a Member to act on behalf of the
Company as the "tax matters member" within the meaning of Section 6231(a)(7) of
the Code.
ARTICLE VIII.
MANAGEMENT
SECTION 8.1. MANAGEMENT BY BOARD OF MANAGERS
Except as otherwise provided in this Agreement or by any non-waivable
provision of applicable law, the Board of Managers shall have full, exclusive
charge and control over the management and operation of the affairs of the
Company and the Company's business, and all decisions relating to the management
and operation of the Company shall be made by the Board of Managers in its sole
discretion. All decisions or other actions taken or made by the Board of
Managers shall be binding on all of the Board of Members and the Company. The
Board of Managers shall have all powers necessary to operate and conduct the
business of the Company and to act on behalf of the Company in all matters
relating to the business of the Company. The Board of Managers may delegate
responsibility for the management of the Company to such Persons as the Board of
Managers may from time to time select. Except as set forth below, all matters to
be decided by the Board of Managers shall be by majority vote of the Managers.
The following matters require the affirmative vote of all of the Managers of the
Company:
(a) The issuance of Membership Interest to any person or entity;
(b) A change in the purposes of the Company and/or any decision to
invest in, acquire, own, operate or manage any New Business (as defined herein).
"New Business" means any business engaged in any business other than the
purposes specifically set forth in this Agreement;
(c) Any Corporate Transaction (as defined below). "Corporate
Transaction" means any transaction (i) involving the sale, lease, transfer or
other disposition of all or substantially all of the assets of the Company; (ii)
involving the consolidation of the Company with, or the merger or amalgamation
of the Company with or into, any other entity or (c) involving the offer or sale
of debt or equity securities or interests of the Company;
(d) The decision to change the fundamental structure of the Company;
(e) The dissolution or liquidation of, or the filing of a petition under
any bankruptcy or other insolvency law by, the Company, including a decision to
distribute assets to any Member upon the dissolution or liquidation of the
Company; and
(f) The making of tax elections and other decisions affecting the tax
treatment of a Member.
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SECTION 8.2. APPOINTMENT AND REPLACEMENT OF MANAGERS
The Board of Managers shall consist of three (3) Managers who shall be
elected by the Members owning a majority of the Units in attendance at the
annual meeting of the Members at which a quorum exists. The elected Managers
shall serve until the earlier of: (a) their successors being duly elected and
qualified; (b) their death, resignation or retirement; or (c) their removal by
vote or written consent of those Members owning a majority of the Units.
Notwithstanding the foregoing, for so long as: (i) Brightstar is a Member, each
Member agrees to vote its Units for the election of one (1) Manager to be
nominated by Brightstar, and (ii) Narea is a Member, each Member agrees to vote
its Units for the election of one (1) Manager to be nominated by Narea, and
(iii) Brightstar and Narea are Members, each Member agrees to vote its Units for
the election of (1) Manager to be mutually agreed upon by Brightstar and Narea.
In the event of the death, resignation, retirement or removal of a Manager
nominated by Brightstar, Narea or both, then the Member or Members nominating
such Manager shall have the right to nominate such Manager's successor and the
Members agree to vote their Units for the election of such nominee.
SECTION 8.3. OFFICERS
The Board of Managers shall elect the officers of the Company, who shall
serve at the direction and discretion of the Board of Managers; provided,
however, that Narea shall be the initial President of the Company.
SECTION 8.4 MANAGER COMPENSATION.
The Managers shall not receive any compensation to serve in their
capacities as Managers; provided, however, that the compensation may be changed
from time to time by an affirmative vote of Members (including the Manager, if a
Member) entitled to vote thereon, and no Manager shall be prevented from
receiving such compensation because such Manager also is a Member of the
Company. In addition, each Manager shall be fully and entirely reimbursed by the
Company for any and all reasonable out-of-pocket costs and expenses incurred by
the Manager in connection with the management and supervision of the business of
the Company and the performance of its duties hereunder.
SECTION 8.5 AUTHORITY AND LIABILITY OF MEMBERS.
Except as otherwise provided herein, the Members shall take no part in the
conduct or control of the Company business and shall have no right or authority
to act for or bind the Company. Except as expressly set forth in the Act or this
Agreement, the Members shall not be personally liable for any of the Company's
losses, debts, obligations or liabilities beyond their respective Capital
Accounts.
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ARTICLE IX
MEMBER MEETINGS
SECTION 9.1. ACTS OF MEMBERS
Except to the extent that applicable law, the Company's Articles of
Organization, or this Agreement require otherwise, an act of the Members
consists of either:
(a) a vote of the holders of at least a majority of the then outstanding
Units present at a properly called meeting of the Members, when a Members'
Quorum (as defined herein) is present, pursuant to Section 9.8 hereof, or
(b) written, action without a meeting, as provided in Section 9.9
hereof.
SECTION 9.2. REQUIRED ANNUAL MEETING
The Members will meet at least annually. The Board of Managers will give
notice of this annual meeting, complying with Section 9.4 hereof.
SECTION 9.3. SPECIAL MEETINGS
(a) A special meeting (a "Special Meeting") of the Members may be called
for any purpose or purposes at any time by the Board of Managers or by any
Member or Members owning at least a majority of the then outstanding Units.
(b) For any Special Meeting not called by the Board of Managers, those
persons who are demanding the Special Meeting must give written notice to the
Chief Executive Officer or President of the Company specifying the purposes of
such Special Meeting. Within thirty (30) days after the Chief Executive Officer
or President receives a demand under this paragraph, the Managers must call a
Special Meeting of the Members. If the Managers fail to call the Special Meeting
as required by this paragraph, the person making the demand may, at the expense
of the Company, call such Special Meeting by giving the notice described in
Section 9.4.
SECTION 9.4. NOTICE OF MEETINGS
Written notice of each meeting of the Members, stating the date, time, and
place and, in the case of a Special Meeting, the purpose or purposes, must be
given to every Member at least ten (10) days and not more than sixty (60) days
prior to the meeting. The business transacted at a Special Meeting is limited to
the purposes stated in the notice of the meeting.
SECTION 9.5. LOCATION AND CONDUCT OF THE MEETINGS; ADJOURNMENTS
(a) Each meeting of the Members shall be held at the Company's principal
place of business or at some other suitable location as designated by the Board
of Managers.
(b) The Board of Managers will select a Member to chair each meeting of
the Members.
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(c) Any meeting of the Members may be adjourned from time to time to
another date and time and, subject to Section 9.5(a), to another place. If at
the time of adjournment the person chairing the meeting announces the date,
time, and place at which the meeting will be reconvened, it is not necessary to
give any further notice of the reconvening.
SECTION 9.6. WAIVER OF NOTICE
(a) A Member may waive notice of the date, time, place, and purpose or
purposes of a meeting of Members. A waiver may be made before, at, or after the
meeting, in writing, orally, or by attendance at such meeting.
(b) Attendance by a Member at a meeting constitutes a waiver of notice
of that meeting, unless the Member objects at the beginning of the meeting to
the transaction of business because the meeting is not properly called or
convened, or objects before a vote on an item of business because the item may
not properly be considered at that meeting and does not participate in the
consideration, of the item at that meeting.
SECTION 9.7. PROXIES
(a) A Member may cast or authorize the casting of a vote by filing a
written appointment of a revocable proxy with any Manager at or before the
meeting at which the appointment is to be effective. The Member may sign or
authorize the written appointment by facsimile transmission stating, or
submitted with information sufficient to determine, that the Member authorized
the transmission; provided, however, that the Member must manually execute the
original appointment document. Any copy, facsimile or other reproduction of the
original of either the writing or the transmission may be used in lieu of the
original, if it is a complete and legible reproduction of the entire original.
(b) A Member may not grant or appoint an irrevocable proxy.
SECTION 9.8. MEMBERS' QUORUM
For any meeting of the Members, a quorum (a "Members' Quorum") shall
consist of the Members who own at least a majority of the then-outstanding
Units. A Members' Quorum must be present at all times during a meeting of the
Members. The Members present may continue to transact business until
adjournment, even though the departure of Members originally present leaves less
than the proportion otherwise required for a Members' Quorum.
SECTION 9.9. ACTION WITHOUT A MEETING
Any action required or permitted to be taken at a meeting of the Members
may be taken without a meeting by written consent signed by the Members who own
the number of Units which would be required to take the same action at a meeting
of the Members at which such Members were present. The written consent is
effective when signed by Members owning the required number of Units, unless a
different effective time is provided in the written action. The written consent
may be signed in separate counterparts. When written action is taken by less
than all Members, the Company will immediately notify "all Members of the
action's text and effective date. Failure to provide such notice shall not
invalidate the written action.
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ARTICLE X.
REQUIRED RECORDS
SECTION 10.1. CONTENTS AND LOCATION OF REQUIRED RECORDS
The Company will maintain the Required Records at its principal place of
business or at some other location chosen by the Board of Managers.
SECTION 10.2. ACCESS TO REQUIRED RECORDS
(a) Upon at least thirty (30) days prior written notice to the Company,
any Member may inspect and review the Required Records and may, at the Member's
expense, cause the Company to make copies of such Required Records; provided,
however, that prior to such inspection and review of any of the Required Records
the Member must (i) demonstrate that his demand for such inspection is made in
good faith and for a proper purpose, and (ii) describe with reasonable
particularity his purpose and the Required Records he desires to inspect.
(b) Any Member's access to the Required Records must take place during
the Company's regular business hours. The Company may, in the Board of
Managers' discretion, impose additional conditions and restrictions on a
Member's access to the Required Records to the extent allowed by applicable law,
including, without limitation, the prior execution of a confidentiality
agreement.
ARTICLE XI.
TRANSFERS OF UNITS
SECTION 11.1. RESTRICTIONS ON TRANSFERS
(a) No Member shall voluntarily or involuntarily (whether by operation
of law or otherwise) sell, assign, transfer, devise, encumber, pledge, give,
devise, bequeath, hypothecate or otherwise dispose of ("Transfer") any or all of
its Units now or hereafter legally or beneficially owned by a Member, except as
otherwise specifically provided in this Agreement. Any Transfer of Units made by
any Member shall be void unless otherwise specifically authorized by this
Agreement. Notwithstanding the foregoing, any Member may Transfer its Units to a
person who is also a Member at the time of such Transfer.
(b) Any Transfer of Units shall be effective only to give the person to
whom the Units were Transferred (the "Transferee") the right to receive the
share of tax allocations and distributions to which the person transferring (the
"Transferor") would otherwise be entitled. Except as otherwise provided herein,
no Transferee of Units shall have the right to become a substituted Member
unless approved by the Members who own at least a majority of the then
outstanding Units (excluding the Units involved in the Transfer), and the
Transferee agrees in writing to be bound by all the terms and conditions of this
Agreement as then in effect. Unless and until a Transferee is admitted as a
substituted Member, the Transferee shall have no right to exercise any of the
powers, rights, and privileges of a Member under this Agreement.
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(c) No Member shall cause or permit to be created a lien or security
interest which affects or might affect its Units, except with the Approval of
the Board of Managers.
(d) Each Member agrees not to Transfer all or any part of his Units (or
take or omit any action, filing election, or other action, which could result in
a deemed transfer) if such Transfer (either considered alone or in the aggregate
with prior transfers by other Members) would result in the termination of the
Company for federal income tax purposes. To enable the Members to identify
Transfers which could result in such a termination, each Member covenants and
agrees to inform the Board of Managers prior to any proposed Transfer (or deemed
Transfer for purposes of the Code).
(e) Each purported Transfer which does not comply with the provisions of
this Article XI shall be void and of no effect, and shall not be given effect in
the Company's corporate records.
SECTION 11.2 RIGHT OF FIRST REFUSAL.
(a) If at any time any Member desires to sell all or any of its Units on
a current or deferred basis pursuant to a bona fide offer from any person other
than another Member (the "Non-Member Buyer"), then such Member (the "Seller")
shall, if the Seller desires to accept such offer, deliver a written offer (the
"Offer") to sell such Units (the "Offered Units") to the Company and the other
Members (the "Other Members" and collectively with the Company, the
"Purchasers") for the consideration and on the terms and conditions not less
favorable to the Purchasers than those on which the Seller proposes to sell such
Offered Units to the Non-Member Buyer. The Offer shall disclose the identity of
the Non-Member Buyer, the Offered Units proposed to be sold, the total Units
owned by the Seller, the material terms and conditions of the Offer (including
price), and any other material facts relating to the proposed sale. The Offer
shall further state that the Purchasers may acquire, in accordance with the
provisions of this Agreement, all but not less than all of the Offered Units for
the price and upon the other terms and conditions, including deferred payment
(if applicable), as set forth therein.
(b) Each of the Other Members shall have the absolute right to purchase
that percentage of the Offered Units as shall be equal to the number of Offered
Units multiplied by a fraction, the numerator of which shall be equal to the
number of Units then owned by such Other Member and the denominator of which is
the number of Units then owned by all of the Other Members. The Offered Interest
that each Other Member is entitled to purchase under this Section 11.2(b) shall
be referred to as his "Pro Rata Fraction".
(c) The Other Members shall have a "right of oversubscription" such that
if any Other Member fails to accept the Offer as to his Pro Rata Fraction, the
remaining Other Members who have exercised their right to the Pro Rata Fraction
of the Offer shall, among them, have the right to purchase up to the balance of
the Offered Units not so purchased. Such right of oversubscription may be
exercised by any such remaining Other Members by accepting the Offer as to more
than his Pro Rata Fraction. If, as a result thereof, such oversubscriptions
exceed the total Offered Units available in respect of such oversubscription
privilege, the oversubscribing Other Members shall be reduced with respect to
their oversubscriptions on a pro rata basis in
16
accordance with their respective Pro Rata Fractions or as they may otherwise
agree among themselves.
(d) If any Other Member desires to purchase all or any part of the
Offered Units, such Other Member shall notify the Seller, in writing and within
thirty (30) days of its receipt of the Offer, of its election to purchase all or
any party of the Offered Units. Such notice shall, when taken in conjunction
with, the Offer, constitute a valid, legally binding and enforceable agreement
for the sale and purchase of such Offered Units (subject to the aforesaid
limitations as to the right of an Other Member to purchase more than its Pro
Rata Fraction).
(e) If the Other Members do not purchase any, or purchase some but not
all, of the Offered Units, then the Company shall have the option, exercisable
within fifteen (15) days after the end of the thirty (30) day period following
the date the Offer was delivered to all of the Other Members, to acquire all but
not less than all of the Offered Units not otherwise acquired by the Other
Members. If the Company desires to acquire such Offered Units, the Company shall
communicate its election to the Seller in writing within the fifteen (15) day
exercise period.
(f) Unless otherwise mutually agreed upon by the parties, the closing of
the purchase and sale of the Offered Units to be sold to Purchasers pursuant to
this Section 11.2 shall be made at the offices of the Company on the forty fifth
(45th) day following the date the Offer was delivered to the purchasing
Purchaser of such Units (or if such forty fifth (45th) day is not a business
day, then on the next succeeding business day), At such closing., the purchase
and sale of the Offered Units shall be effected by the Seller's delivery to each
Purchaser of a certificate or certificates evidencing the Offered Units to be
purchased, duly endorsed for transfer to such Purchaser, against payment to the
Seller of the purchase price therefor by such Purchaser.
(g) If the Purchasers do not purchase all of the Offered Units, then no
Purchaser shall have any right to purchase any portion of the Offered Units and
the Seller may, sell all, but not less than all, of the Offered Units to the
Non-Member Buyer at any time within thirty (30) days after the earlier to occur
of: (i) the closing date described in Section 11.2(f) above; (ii) the latest
date on which the Purchasers deliver to the Seller notice that they will not
purchase all of the Offered Units; or (iii) the latest date on which the Offer
to the Purchasers has expired and the Purchasers have not exercised their right
to purchase all of the Offered Units. Any such sale shall be to the Non-Member
Buyer at not less than the price and upon other terms and conditions, if any,
not more favorable to the Non-Member Buyer than those specified in the Offer.
Any Offered Units not sold within such thirty (30) day period shall continue to
be subject to the requirements of a prior offer pursuant to this Section 11.2.
As a condition to the sale of the Offered Units to the Non-Member Buyer, the
Non-Member Buyer shall agree in writing to be bound by all of the provisions of
this Agreement to the same extent as if the Non-Member Buyer was a party to this
Agreement, including, without limitation, an acknowledgment that the Offered
Units so sold shall continue to be subject to any of restrictions imposed by
this Agreement
(h) If the Non-Member Buyer's written offer (and the Seller's
corresponding Offer to the Purchasers) provides for the payment of consideration
other than cash (herein, "Unique Consideration"), then any Purchaser may, in its
notice of exercise, in lieu of Unique Consideration, substitute cash
consideration which shall be determined by mutual agreement of
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the Offerer and such Purchaser within forty (40) days after the Offerer's offer
is made, or, failing such agreement, by arbitration in Miami-Dade County,
Florida, as provided in Section 20.2 below. Any Purchaser's notice of exercise
shall be sufficient if it states that such Purchaser shall pay cash
consideration to be determined in accordance with this Section 11.2(h).
SECTION 11.3 FAILURE TO DELIVER UNITS.
If a Member becomes obligated to sell any Units under this Agreement and
fails to deliver such Units in accordance with the terms of this Agreement, the
person entitled to acquire such Units may, at its option, in addition to all
other remedies he may have, send to such Member the purchase price for such
Units as is herein specified. Thereupon, the Company upon written notice to the
Member: (a) shall cancel on its books the certificate or certificates
representing the Units to be sold; and (b) shall issue, in lieu thereof, in the
name of such person entitled to acquire such Units, a new certificate or
certificates representing such Units, and thereupon all of the Member's rights
in and to such Units shall terminate.
SECTION 11.6 SUBSTITUTE MEMBERS.
The assignee of a Unit shall have the right to become a substitute Member
in the Company if (i) the assignor so provides in the instrument of assignment,
(ii) the assignee agrees in writing to be bound by the terms of this Agreement
and the Articles of Organization, as amended to the date thereof, (iii) written
consent to such assignment has been obtained from the other Members entitled to
vote thereon, (iv) the assignee pays the reasonable costs incurred by the
Company in preparing and recording any necessary amendments to this Agreement
and the Articles of Organization, and (v) the assignor and assignee otherwise
agree to be bound by the terms of the Act, and (vi) assignor and assignee shall
perform such other acts as the Members deem reasonably necessary for the benefit
of the Company.
SECTION 11.7 WITHDRAWAL OF A MEMBER
(a) A Member shall withdraw from the Company upon the occurrence of one
of the following events:
(i) The Member dies (or, if the member is an entity, it incurs a
dissolution or equivalent event);
(ii) The Member incurs a physical or mental disability, whereby the
member is unable to participate in the business and internal affairs of the
Company for 180 consecutive days. Whether a Member has incurred a disability
shall be determined by the Manager, in its sols discretion;
(iii) The Member becomes bankrupt or insolvent;
(iv) The member voluntary renounces its right to participate in the
business and internal affairs of the company. A Member may resign as a Member of
the Company by giving written notice of resignation to the other Members. The
resignation shall be effective ninety days after all of the other Members have
received the notice; or
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(v) The Member transfers all of the Member's Units to another
Person, in accordance with the terms of this Agreement.
(b) Except as provided in this Section 11.7(b) and as otherwise provided
in this Agreement, a Member's withdrawal shall not entitle the Member to receive
any distribution of Company profits or other assets or to receive any payment
for the Member's Units. Notwithstanding the foregoing, upon withdrawal of a
Member, the other Members of the Company shall have the right to: (i) dissolve
the Company in accordance with Section 12 hereof; or (ii) repay to the
withdrawing Member, within a reasonable time after withdrawal, the positive
account balance, if any, in the withdrawing Member's Capital Account.
ARTICLE XII.
DISSOLUTION
SECTION 12.1. EVENTS OF DISSOLUTION
Except as otherwise provided herein, the Company shall be dissolved and
wound up upon the first to occur of one of the following events:
(a) The decision of the Board of Managers; or
(b) The occurrence of any event that causes the Dissolution of the
Company under the Act, unless the business of the Company is continued pursuant
to Section 12.2 hereof.
SECTION 12.2. CONTINUATION OF BUSINESS
As provided in the Articles of Organization, the death, dissolution, the
adjudication of incompetency by a court of competent jurisdiction, or insolvency
(whether voluntary or involuntary) of a Member (a "Dissociation Event") shall
not result in the Dissolution of the Company, and the business and existence of
the Company shall continue notwithstanding the occurrence of the Dissociation
Event. Each party hereto hereby consents to and agrees that (a) the business and
existence of the Company shall continue notwithstanding the occurrence of a
Dissociation Event, and (b) it is their intent that the provisions of this
Agreement, including, without limitation, the provisions of this Section 12.2,
and the Articles satisfy all applicable requirements for continuation of the
Company's business and existence upon the occurrence of a Dissociation Event,
including, without limitation, the requirements of Florida Statutes Section
608.441.
SECTION 12.3. FAILURE TO CONTINUE THE BUSINESS OF THE COMPANY
(a) If Dissolution of the Company occurs, then the Board of Managers
shall wind up the affairs of the Company in accordance with applicable law.
(b) After paying or providing for the payment of all Company debts, the
proceeds of sale of the Company's assets shall be distributed to the Members in
accordance with their Capital Accounts. If the Board of Managers determine that
an immediate sale would be financially inadvisable, it may defer sale of the
Company assets for a reasonable time, or distribute the
19
assets in kind (after payment of or provision for all Company debts). If any
assets are distributed in kind, then they shall be distributed on the basis of
the fair market value thereof as determined by independent appraisal, and shall
be deemed to have been sold at fair market value. Unless the Members otherwise
agree, there shall be distributed to the Members, as tenants-in-common,
undivided interests in the assets equal to the distributions to which they are
entitled.
(c) The Company shall terminate when all assets of the Company have been
sold and/or distributed and all affairs of the Company have been wound up.
ARTICLE XIII.
INDEMNIFICATION
SECTION 13.1. DEFINITIONS
For purposes of this Article XIII, the terms defined in this Section have
the meanings given them.
(a) "Official Capacity" means (i) with respect to a Manager, the
position of Manager in the Company, (ii) with respect to a person other than a
Manager, the elective or appointive office or position held by an officer, or
the efforts undertaken by a Member of the Company who acts on behalf of and at
the request of the Company, or the employment or agency relationship undertaken
by an employee or agent of the Company, and (iii) with respect to a Manager,
officer, employee, or agent of the Company who, while a Manager, officer,
employee, or agent of the Company, is or was serving at the request of the
Company or whose duties in that position involve or involved service as a
manager, officer, partner, trustee, or agent of another organization or employee
benefit plan, the position of that person as a Manager, officer, partner,
trustee, employee, or agent, as the case may be of the other organization or
employee benefit plan.
(b) "Proceeding" means a threatened, pending or completed civil,
criminal, administrative, arbitration or investigative proceeding regarding the
Company or the persons acting on behalf of the Company.
(c) "Special legal counsel" means counsel who has not represented the
Company, a related company, or a Manager, officer, employee or agent whose
indemnification is in issue.
SECTION 13.2. MANDATORY INDEMNIFICATION; STANDARD
(a) The Company shall indemnify a person made or threatened to be made a
party to a Proceeding by reason of the former or present Official Capacity of
that person against judgments, penalties, fines, including, without limitation,
excise taxes, settlements, and reasonable expenses, including attorney fees and
disbursements, incurred by that person in connection with the Proceeding, if,
with respect to the acts or omissions of the person complained of in the
Proceeding, the person:
(i) has not been indemnified by another organization or entity for
the same judgments, penalties, fines,including, without limitation, excise
taxes, settlements, and
20
reasonable expenses, including attorney fees and disbursements, incurred by the
person in connection with the Proceeding with respect to the same acts or
omissions;
(ii) acted in good faith;
(iii) received no improper personal benefit;
(iv) in the case of a criminal proceeding, had no reasonable cause
to believe the conduct was unlawful; and
(v) reasonably believed that the conduct was in the best interests
of the Company, or that the conduct was not opposed to the best interests of the
Company. If the person's acts or omissions complained of in the proceeding
relate to conduct as a Manager, officer, trustee, employee, or agent of an
employee benefit plan, the conduct is not considered to be opposed to the best
interests of the Company if the person reasonably believed that the conduct was
in the best interests of the participants or beneficiaries of the employee
benefit plan.
(b) The termination of a proceeding by judgment, order, settlement, or
conviction or upon a plea of nolo contendere or its equivalent does not, of
itself, establish that the person did not meet the criteria set forth in this
Section 13.2.
(c) Subject to the standards contained in Section 13.2(a) hereof, to the
extent permitted by applicable law, all Managers shall be released from
liability and held harmless (as provided herein) for all damages and monetary
relief resulting from or in connection with any act or omission arising out of
or in connection with their Official Capacity.
SECTION 13.3. ADVANCES
If a person is made or threatened to be made a party to a Proceeding based
on that person's Official Capacity, the person is entitled, upon written request
to the Company, to payment or reimbursement by the Company of reasonable
expenses, including attorney fees and disbursements, incurred by the person in
advance of the final disposition of the Proceeding
(a) upon receipt by the Company of a written affirmation by the person
of a good faith belief that the criteria for indemnification set forth in
Section 13.2 have been satisfied and a written undertaking by the person to
repay all amounts so paid or reimbursed by the Company, if it is ultimately
determined that the criteria for indemnification have not been satisfied, and
(b) after a determination that the facts men known to those making the
determination would not preclude indemnification under this Article.
The written undertaking required by paragraph (a) above is an unlimited
general obligation of the person making it, but need not be secured and will be
accepted without reference to financial ability to make the repayment.
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SECTION 13.4. DETERMINATION OF ELIGIBILITY
(a) All determinations as to whether indemnification of a person is
required because the criteria stated in Section 13.2 have been satisfied and as
to whether a person is entitled to payment or reimbursement of expenses in
advance of the final disposition of a Proceeding as provided in Section 13.3
will be made:
(i) by a majority of the Disinterested Managers;
(ii) if a determination is not made under clause (i), by Special
Legal Counsel, selected either by Approval of the Board of Managers or by a
committee authorized by the Board of Managers;
(iii) if a determination is not made under clauses (i) or (ii), by a
majority of the Members, excluding the votes to be cast by Members who are
parties to the Proceeding; or
(iv) if an adverse determination is made under clauses (i) through
(iii) or under Section 13.5(d), or if no determination is made under clauses (i)
through (iii) or under Section 13.5(b) within sixty (60) days after the
termination of a Proceeding or after a request for an advance of expenses, as
the case may be, by a court in Florida, which may be the same court in which the
Proceeding involving the person's liability is taking or has taken place, upon
application of the person and any notice the court requires.
(b) With respect to a person who is not, and was not at the time of the
acts or omissions complained of in the Proceeding, a Manager, officer, or person
possessing, directly or indirectly, the power to direct or cause the direction
of the management or policies of the Company, the determination whether
indemnification of this person is required because the criteria set forth in
Section 13.2 have been satisfied and whether this person is entitled to payment
or reimbursement of expenses in advance of the final disposition of a Proceeding
as provided in Section 13.3 may be made by an appointed committee of the Board
of Managers, if any, having at least one member who is a Manager. This committee
shall report at least annually to the Board of Managers.
SECTION 13.5. INSURANCE
The Company may purchase and maintain insurance on behalf of a person in
that person's Official Capacity against any liability asserted against and
incurred by the person in or arising from that capacity, whether or not the
Company would have been required to indemnify the Person against the liability
under the provisions of this Article XIII.
SECTION 13.6. DISCRETIONARY INDEMNIFICATION OF OTHERS
Nothing in this Article XIII shall limit the ability of the Board of
Managers to cause the Company to indemnify any person or entity not described in
this Article XIII pursuant to, and to the extent described in, an agreement
authorized by the Approval of the Board of Managers.
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ARTICLE XIV.
REPRESENTATIONS AND WARRANTIES
SECTION 14.1. REPRESENTATIONS AND WARRANTIES OF MEMBERS
Each Member, in the Member's capacity as a Member, represents and warrants
to the Company and each other Member as follows:
(a) If applicable, the Member is an entity in good standing and
organized under the laws of its state of organization and its status is active;
(b) The Member has the requisite authority to enter into this Agreement
and to incur and perform its obligations under this Agreement in accordance with
its terms. The Member is not prevented from doing so by order of any court or
other governmental authority, by any agreement with a third party (including an
employment agreement, non-competition agreement or nondisclosure agreement) or
by any other cause. The execution, delivery, and performance by the Member of
this Agreement has been authorized by all necessary action. Upon the execution
and delivery of this Agreement, this Agreement shall constitute a valid and
binding agreement of the Member, enforceable against the Member in accordance
with its terms.
(c) In negotiating and entering into this Agreement, the Member has
acted fairly and in good faith and has disclosed to the other Members all
information reasonably likely to be relevant to them in determining whether to
enter into this Agreement; and
(d) Before signing this Agreement and accepting its terms, the Member
has had a reasonable opportunity to consider the terms hereof and to review them
with the Member's own independent attorney, accountant and other advisors.
SECTION 14.2. DUTY TO UPDATE
If, after a Member signs this Agreement, the Member discovers that any of
the above representations were materially incorrect when made or have become
materially incorrect, the Member shall promptly so advise the Company and the
other Members.
ARTICLE XV.
DUTY OF CARE
SECTION 15.1. DUTY OF CARE
In participating in any matter (a "Company Matter") relating to the
business or internal affairs of the Company, each Manager shall use his best
efforts to further the interests of the Company.
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SECTION 15.2. DUTY TO OBTAIN INFORMATION
Before making any decision or taking any action in an Company Matter,
Managers shall use their best efforts to obtain all relevant information.
SECTION 15.3. DUTY TO ACT WITHIN AUTHORITY.
No Member shall act as an agent for the Company in any Company Matter
except as authorized by this Agreement or by the Board of Managers.
ARTICLE XVI.
DUTY OF LOYALTY
SECTION 16.1. DUTY OF LOYALTY
In all Company Matters Mangers shall act solely for the benefit of the
Company and not for their personal benefit.
SECTION 16.2. DUTIES WITH RESPECT TO COMPANY BUSINESS OPPORTUNITIES
If a Manager learns (whether in the course of Company business or
otherwise) of a business opportunity potentially of interest to the Company, the
Manager shall promptly disclose the opportunity to the Company.
SECTION 16.3. DUTIES OF GOOD FAITH AND FAIR DEALING
In all Company Matters, Managers shall act in good faith and shall deal
fairly with the Company and with the Members.
SECTION 16.4. CONFLICTS OF INTEREST
No contract or other transaction between the Company and any Manager or
Member shall be void or voidable or in any way affected solely for this reason,
or solely because such Member is present at or participates in the meeting which
authorized the contract or transaction. Interested Members may be counted in
determining the presence of a quorum at a meeting of the Members which
authorized the contract or transaction. This Section 16.4 shall not be construed
to impair, invalidate, or in any way affect any contract or other transaction
which would otherwise be valid under the laws (common, statutory, or otherwise)
applicable thereto.
ARTICLE XVII.
DUTY OF CONFIDENTIALITY
SECTION 17.1. DUTY OF CONFIDENTIALITY
Each Member:
24
(a) Shall, at all times, maintain the confidentiality of Confidential
Information (as defined in Section 17.2);
(b) Except as required by law or regulation or by order of any
regulatory body, shall not disclose Confidential Information to any third party
without the Approval of the Board of Managers;
(c) Shall use Confidential Information only for the benefit of the
Company; and
(d) Promptly after ceasing to be a Member, shall return to the Company
all documents and other media containing Confidential Information.
SECTION 17.2. DEFINITION OF CONFIDENTIAL INFORMATION
For purposes of this Agreement, "Confidential Information" means (i) the
terms of this Agreement; provided, however, that a Member may disclose these
terms on a confidential basis to the Member's professional advisers; and (ii)
information relating to the Company, its Members and its business, investments
and potential business and investments, including, without limitation, trade
secrets, financial information, marketing and business plans, investment and
management strategies, methods of providing services, practices, documentation,
drawings, facilities, customers, policies, suppliers, pricing, customer lists
and. leads, and other information and know-how that has actual or potential
economic value to the Company because it is not generally known to others and is
not readily ascertainable by them
SECTION 17.3. EXCEPTIONS TO DUTY OF CONFIDENTIALITY
Section 17.1. shall not apply to information;
(a) Which enters the public domain through no fault of a Member;
(b) The disclosure of which is required by final order of a court of
competent jurisdiction; or
(c) The disclosure of which is made on a confidential basis to an
arbitrator in an arbitration under Article XX.
SECTION 17.4. BINDING EFFECT; TERMINATION
This Article XVII shall bind each Member even after the Member ceases to
be a member of the Company. Subject to any contrary arrangement with a third
party, this Article XVII shall terminate upon the termination of the existence
of the Company.
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ARTICLE XVIII.
REMEDIES
SECTION 18.1. SPECIFIC ENFORCEMENT
All breaches of this Agreement are subject to specific enforcement,
without prejudice to the right to seek damages or other remedies.
SECTION 18.2. ATTORNEY'S FEES AND OTHER LITIGATION EXPENSES
In any action involving the Company and a Member or a Manager, the
prevailing party in such action shall be entitled to collect its attorney's fees
and other costs and expenses of arbitration or litigation.
ARTICLE XIX.
AMENDMENTS
SECTION 19.1. REQUIREMENTS FOR AMENDMENT
Any amendment to this Agreement or the Company's Articles of Organization
shall require the Approval of the Board of Managers and the Members who own at
least a majority of the then-outstanding Units.
ARTICLE XX.
DISPUTE RESOLUTION
SECTION 20.1. DISPUTE RESOLUTION THROUGH AMICABLE DISCUSSIONS
(a) The Members shall attempt to settle any and all claims,
controversies and disputes arising from the execution of, or in connection with
the performance of this Agreement, and the operation of the Company through
amicable discussions between the Members. Such consultations shall be commenced
by a written submission of the claim, controversy or dispute to the other
Members, specifying the nature of the claim, controversy or dispute, presenting
any facts or circumstances supporting the submitting Member's position that may
assist the Members in resolving the dispute, and proposing the submitting
Member's desired resolution of the claim, controversy or dispute. The Members
shall then attempt to resolve the same to their mutual satisfaction within
thirty (30) days of the date of such submission.
(b) In the event no resolution can be reached through the amicable
consultations described in Section 20.1 (a) at the end of the period set forth
therein, then the Members shall engage a mediator, who shall be acceptable to
all parties, within fifteen (15) days after the end of the period set forth in
Section 22.1 (a) to further attempt to resolve the claim, controversy or dispute
through amicable discussions. Each Member shall be entitled to be accompanied at
such meetings by a reasonable number of advisors selected by him.
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SECTION 20.2. DISPUTE RESOLUTION THROUGH ARBITRATION
(a) In case any claim, controversy or dispute which has been submitted
for resolution pursuant to Section 20.1 has not been resolved at the end of the
periods set forth therein, the submitting Member shall then be entitled to
submit the claim, controversy or dispute to the American Arbitration Association
for binding arbitration pursuant to the Rules of the American Arbitration
Association provided that:
(i) there shall be three (3) arbitrators chosen by the American
Arbitration Association,
(ii) the arbitration proceeding shall be held in Miami-Dade County,
Florida,
(iii) the substantive law of the State of Florida shall be applied
to the interpretation, execution, performance and application of this Agreement
and to the operation of the business,
(iv) The Members further agree that the arbitration award shall be
considered as a settlement of the dispute among them and all Members shall
accept it as the binding resolution of such dispute. Accordingly, the
arbitration award shall be final, binding and enforceable in accordance with its
terms upon all of the Members, and a judgment upon the arbitration award may be
entered in any court having jurisdiction. Any laws allowing, permitting or
providing for judicial review de nova of such arbitration award are hereby
waived by each of the Members hereto.
(v) The costs and expenses of any such arbitration, including a
reasonable allowance for attorneys' fees and expenses, shall be borne by the
Company, or as otherwise specified in the arbitration award.
(vi) Nothing in this Article XX, however, shall prevent any Member
from obtaining injunctive or any other equitable relief in an action in any
court having jurisdiction thereof.
SECTION 20.3. PENDENCY OF DISPUTE RESOLUTION PROCEEDINGS; SURVIVAL
During the pendency of any dispute resolution proceeding pursuant to this
Article XX, this Agreement shall, subject to any right of termination, continue
to be performed by all of the Members hereto, except for the matters giving rise
to the claim, controversy or dispute. The provisions of this Article XX shall
survive any expiration, termination, cancellation or non-renewal of this
Agreement.
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ARTICLE XXI.
MISCELLANEOUS
SECTION 21.1. GOVERNING LAW; VENUE
This Agreement, and any question, dispute, or other matter related to or
arising from this Agreement, shall be governed by the laws of the State of
Florida. Subject to the provisions of Article XX hereof, any action or
proceeding arising out of or in connection with this Agreement shall be brought
in the applicable Federal or state court located in Miami-Dade County, Florida,
and the parties hereto hereby waive any objection they may have to this choice
of venue, including, without limitation, an objection based on the assertion
that such venue constitutes an inconvenient forum.
SECTION 21.2. KEY MAN INSURANCE
The Board of Managers may, in its sole discretion, cause the Company to
purchase "key man" insurance for the benefit of the Company on any of the
Company's Managers, Members or key employees.
SECTION 21.3. BINDING EFFECT
This Agreement shall bind all Members and their respective distributees,
successors, and permitted assigns and any other person claiming a right or
benefit under or covered by this Agreement.
SECTION 21.4. SEVERABILITY
If any provision of this Agreement is held to be illegal, invalid, or
unenforceable:
(a) that provision shall be fully severable and this Agreement shall be
construed and enforced as if such illegal, invalid, or unenforceable provision
had never been part of this Agreement;
(b) the remaining provisions of this Agreement shall remain in full
force and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance from this Agreement; and
(c) in the place of the illegal, invalid, or unenforceable provision, a
legal, valid, and enforceable provision that is as similar to the illegal,
invalid, or unenforceable provision as possible shall be inserted into this
Agreement.
SECTION 21.5. COUNTERPARTS
This Agreement may be executed in counterparts, each of which will be
considered an original and all of which together will constitute one document.
Proving the execution and contents of this document against a party may be done
by producing any copy of this Agreement signed by that party.
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SECTION 21.6. ADDITIONAL DOCUMENTS AND ACTS
Each Member shall execute and deliver all additional documents and perform
all such additional acts as may be necessary or appropriate in the sole
discretion of the Board of Managers to effectuate and perform all of the terms,
provisions and conditions of this Agreement and the transactions contemplated by
this Agreement.
SECTION 21.7. RESTRICTED SECURITIES
The Members acknowledge that their Units have not been registered under
the Securities Act or under the securities laws of Florida or any other state,
and that their Units may not be transferred except in transactions that are
exempt under applicable federal and state securities laws or pursuant to
effective registrations thereunder an in compliance with this Agreement. Each of
the Members represents and warrants to the Company and to the other Members that
it is acquiring the interests solely for his own account, and not with a view
to, or for resale in connection with, any distribution thereof.
SECTION 21.8. PROTECTION OF LIMITED LIABILITY STATUS
Each Member shall take all reasonable measures to protect the limited
liability of the Members in their capacity as Members and Managers. These
measures shall include the following:
(a) causing the abbreviation "L.L.C." to appear after the name of the
Company in all Company stationery, checks, business cards, invoices,
advertisements and other media containing the name of the Company and likely to
be read or heard by third parties.
(b) The Company shall have its own books and accounts, which shall be
maintained separately from those of each Member. For the term of the Company and
for a period of four (4) years thereafter, the Members shall cause to be
maintained and preserved all books of account and other relevant documents of
the Company. The assets of the Company shall not be commingled with those of any
Member. No Member shall borrow money or other assets from the Company or lend
money or other assets to the Company except on the basis of reasonable
documentation and arm's length terms. All Company funds will be deposited in its
name in an account or accounts maintained with such bank or banks selected by
the Board of Managers.
SECTION 21.9. NOTICES
All notices, requests, consents and other communications required or
permitted under this Agreement shall be in writing (including telex, fax and
telegraphic communication) and shall be (as elected by the person giving such
notice) hand delivered by messenger or courier service, faxed or mailed (airmail
if international) by registered or certified mail (postage prepaid), return
receipt requested, to the address of such party as indicated on Schedule "A".
Each such notice shall be deemed delivered: (a) on the date delivered if by
personal delivery; (b) on the date communicated if by telegraph; (c) on the date
of transmission with confirmed answer back if by telex, fax or other telegraphic
method; and (d) on the date upon which, the return receipt is signed or delivery
is refused or the notice is designated by the postal authorities as not
deliverable, as
29
the case may be, if mailed. Any change its address must be made by giving
written, notice of the change to the Company and to each Member.
SECTION 21.10 ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement among the Members with
respect to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, both written and oral, by or among
the Members and the Company with respect to such subject matter. This Agreement
may not be amended or modified in any way except by a written instrument
executed by the Company and all of the Members.
SECTION 21.11 NO WAIVERS.
The waiver of any party's prompt and complete performance, or breach or
violation, of any provision of this Agreement shall not operate as, nor be
construed to be, a waiver of any subsequent obligation to perform, breach or
violation, and the waiver by any party hereto to exercise any right or remedy
that he or it may possess shall not operate as, nor be construed to be, the
waiver of such right or remedy by any other party or parties or a bar to the
exercise of such right or remedy by such party or parties upon the occurrence
of any subsequent obligation to perform, breach or violation.
SECTION 21.12 SPECIFIC PERFORMANCE.
The Members acknowledge and agree that they would be irreparably harmed if
the terms of this Agreement were not capable of being specifically enforced and
that the remedies of specific performance and injunction may be sought and
obtained independent of or concurrent with any other proceeding. Notwithstanding
any provision to the contrary in this Agreement, the Company shall be entitled,
if it so elects, to institute and prosecute proceedings at law or in equity in
any court of competent jurisdiction to enforce specific performance of this
Agreement. The parties further agree that such equitable relief provided herein
shall not in any way limit or deny any other remedy (legal or equitable) which a
party might otherwise have. In addition, all parties to this Agreement hereby
expressly waive any objection, in any such action, that the party seeking
equitable relief has or may have an adequate remedy at law and hereby consent to
any such equitable action.
SECTION 21.13 HEADINGS.
The section and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of any or all of the provisions of this Agreement.
SECTION 21.14 PRONOUNS AND PLURALS.
Whenever the context may require, any pronoun used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the singular
forms of nouns, pronouns and verbs shall include the plural and vice versa.
30
SECTION 21.15 SUBSEQUENT MEMBERS.
Any person who becomes a Member of the Company after the execution of this
Agreement shall be deemed to have consented hereto, and to be bound hereby as if
it had actual notice of this Agreement at the time he acquired its Units.
SECTION 21.16 INDEPENDENT REPRESENTATION.
Each party hereto acknowledges and agrees that Xxxxxxxxxxx & Xxxxxxxx LLP
has represented the Company in connection with this Agreement. Each of the
parties hereto acknowledges that Xxxxxxxxxxx & Xxxxxxxx LLP represents both the
Company and Brightstar in unrelated matters and the parties hereto specifically
waive any conflict as a result of such other representation and this Agreement.
Each Shareholder specifically acknowledges and agrees that it has had the
opportunity to seek independent counsel of its own choice in connection with
this Agreement.
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IN WITNESS WHEREOF, this Operating Agreement has been duly executed on
behalf of the parties hereto as of the date first above written.
THE COMPANY:
NARBITEC, L.L.C.
By: /s/ Xxxxx Xxxxx
-----------------------------
Name: Xxxxx Xxxxx
Its: President
MEMBERS:
BRIGHTSTAR CORP.
By: /s/ Xxxxxxx Xxxxxx
----------------------------
Name: Xxxxxxx Xxxxxx
Its: President and CEO
/s/ Xxxxx Xxxxx
--------------------------
Xxxxx Xxxxx
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SCHEDULE A
LIST OF MEMBERS AS OF JULY , 2001
NAME AND ADDRESS CAPITAL CONTRIBUTION UNITS PERCENTAGE INTEREST
---------------- -------------------- ----- -------------------
Brightstar Corp. $60,000 500 50%
0000 X.X. 000xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxx
Xxxxx Xxxxx $60,000 500 50%
0000 X. Xxxxxxx Xxxx Xx.
Xxxxxxxx, Xxxxxxx 00000
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