Exhibit 2.2
OPERATING AGREEMENT
OF
XXXXXXXXXX.XXX, LLC
THIS OPERATING AGREEMENT is made and entered into the 19th
day of April 2000, by and among Covenant Transport, Inc., a
Nevada corporation, X.X. Xxxx Transport Services, Inc., an
Arkansas corporation, M.S. Carriers, Inc., a Tennessee
corporation, Swift Transportation Co., Inc., a Nevada
corporation, U.S. Xpress Enterprises, Inc., a Nevada corporation
and Xxxxxx Enterprises, Inc., a Nebraska corporation, or the
respective affiliates of the foregoing six corporations
(collectively the "Members") and Xxxxxxxxxx.xxx, LLC, a Nevada
limited liability company (the "Company"), to govern certain
aspects of the operations of the Company and to set forth the
rights and obligations of the Members, any Persons subsequently
becoming Members, and their respective successors and assigns.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and in consideration of becoming a Member of
the Company, the undersigned (including parties who subsequently
become parties hereto after the effective date of this Agreement)
agree as follows:
ARTICLE I
DEFINITIONS AND GENERAL PROVISIONS
Section 1.1. Definitions. Unless the context or rules of
grammar otherwise require or unless otherwise expressly provided
in this Agreement, the following capitalized terms used in this
Agreement (and the respective plural or singular forms thereof)
shall have the meanings specified in this Section as follows:
"Act" means Chapter 86 of Title 7 of the Nevada Revised
Statutes, as amended from time-to-time.
"Affiliate" means any Person that is, directly or
indirectly, through one or more intermediaries, controlling,
controlled by, or under common control with a Member. The term
"control," as used in the immediately preceding sentence, means,
with respect to a limited liability company or corporation, the
right to exercise, directly or indirectly, more than 50% of the
voting rights of such limited liability company or corporation
and, with respect to any other Person, the possession, directly
or indirectly, of the power to direct or cause the direction of
the management or policies thereof.
"Agreement" means this Operating Agreement, as amended from
time-to-time.
"Articles" mean the Articles of Organization of the Company
filed with the Nevada Secretary of State, as amended or restated
from time-to-time.
"Available Cash" of the Company means all cash funds of the
Company on hand from time-to-time (other than cash funds obtained
as contributions to the capital of the Company by the Members and
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cash funds obtained from loans to the Company) after (i) payment
of all operating expenses of the Company as of such time, (ii)
provision for payment of all outstanding and unpaid current
obligations of the Company as of such time, and (iii) provision
for a reasonable working capital reserve if such a reserve is
established by the Board of Managers.
"Board of Managers" has the meaning set forth in Section 4.1
of this Agreement.
"Capital Account" means the account established and
maintained for each Member in the manner prescribed by Article
III and in the manner provided in Treasury Regulation Section
1.704-l(b)(2)(iv), as amended from time-to-time.
"Capital Contributions" means the total value of any cash,
property, services rendered, or a promissory note or other
binding obligation to contribute cash or property or to perform
services, that a person transfers to the Company in the capacity
as a Member, as shown on Exhibit B attached to and made a part of
this Agreement, as the same may be amended from time-to-time. Any
reference in this Agreement to the Capital Contributions of a
Member shall include all Capital Contributions previously made by
any prior Member for the interest of such Member, and shall be
reduced by any distributions to such prior Member in return of
the Member's Capital Contributions as contemplated in this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
All references in this Agreement to Code Sections shall include
any and all corresponding provisions of succeeding law.
"Company" means Xxxxxxxxxx.xxx, LLC
"Former Member" means a Person who previously was, but is no
longer, a Member of the Company.
"Initial Members" means Covenant Transport, Inc., X.X. Xxxx
Transport Services, Inc., M.S. Carriers, Inc., Swift
Transportation Co., Inc., U.S. Xpress Enterprises, Inc., and
Xxxxxx Enterprises, Inc., or any Affiliate of any of the
foregoing companies.
"Interest" means the entire ownership interest of a Member
in the Company at any particular time, including the right of
such Member to any and all benefits to which a Member may be
entitled as provided in this Agreement and under the Act,
together with the obligations of such Member to comply with all
of the terms and provisions of this Agreement.
"Losses" or "losses" means losses, and each item of income,
gain, loss, deduction or credit entering into the computation
thereof, as determined in accordance with Treasury Regulation
Section 1.704-l(b)(2)(iv).
"Manager" means any Person or Persons designated as a
Manager or Managers of the Company pursuant to Article IV.
"Member" means a Person that (i) owns an Interest in the
Company, (ii) has been admitted to membership in the Company in
accordance with the Act, the Articles and this Agreement, and
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(iii) has not ceased to be a Member in accordance with the Act,
the Articles and/or this Agreement.
"Membership" means all of the Members.
"Percentage Interest" of a Member means the percentage of
issued and outstanding Units of the Company held by such Member
as set forth opposite the name of such Member under the column
"Percentage Interest" on Exhibit B, as such percentage may be
adjusted from time-to-time pursuant to the terms of this
Agreement.
"Person" means and includes an individual, corporation,
general partnership (including a limited liability partnership),
limited partnership, association, limited liability company,
business trust, or any other legal or commercial entity.
"Profits" or "profits" means income, and each item of
income, gain, loss, deduction or credit entering into the
computation thereof, as determined in accordance with Treasury
Regulation Section 1.704-l(b)(2)(iv).
"Tax Matters Manager" means the "Tax Matters Partner" of the
Company as that term is defined in Code Section 6231.
"Treasury Regulations" means regulations of the United
States Department of the Treasury under the Code, as amended from
time-to-time.
"Units" refers to an interest in the Company to be measured
in such units as may be established pursuant to Article III.
Whenever reference is made to the "Percentage Interest" of a
Member, a Member's Units may be converted into the same by
dividing the Member's number of Units by the total of all Units
outstanding.
Section 1.2. References to Articles, Sections and Exhibits.
References in this Agreement to numbered or lettered "Article" or
"Section" or "subsection" shall, unless the context clearly
indicates otherwise, be construed as referring to a particular
Article, Section or subsection in this Agreement, and references
in this Agreement to "this Article" or "this Section" or "this
subsection" shall be construed as referring, as applicable, to
the Article, Section or subsection in which such reference is
located. References in this Agreement to an "Exhibit" are to a
document so identified that is attached to, and a part of, this
Agreement.
Section 1.3. Coordination with the Act. The Act contains a
number of provisions that govern various aspects of the conduct
of the business and affairs of limited liability companies that
can be "overruled", so to speak, by the provisions of a written
operating agreement adopted by the members of the limited
liability company or by the articles of organization of such
company. In construing this Agreement and the Articles and in
coordinating the provisions hereof and thereof with the Act, it
is the intent of the Members that whenever this Agreement or the
Articles contain provisions addressing a certain subject or
matter, those provisions of this Agreement or the Articles will
control over the provisions of the Act with respect to that same
subject or matter and shall be construed as overruling any
conflicting or different provisions of the Act with respect
thereto even though the provisions of this Agreement or the
Articles do not specifically state that they are intended to
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overrule such provisions of the Act. If this Agreement and the
Articles are silent as to a subject or matter covered by the Act,
the provisions of the Act with respect thereto shall control.
ARTICLE II
ORGANIZATION AND TERM
Section 2.1. Articles of Organization. The Company was
formed by filing the Articles with the Nevada Secretary of State
pursuant to the Act. The rights and liabilities of the Members
shall be as provided under the Act, the Articles and this
Agreement. The Members agree to each of the provisions of the
Articles.
Section 2.2. Name. The name of the Company is
Xxxxxxxxxx.xxx, LLC.
Section 2.3. Principal Place of Business. The principal
place of business of the Company shall be located in or about
Dallas, Texas, at such address as may from time-to-time be
established by the Board of Managers.
Section 2.4. Registered Office and Registered Agent. The
Company's registered office shall be at 000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxxx Xxxx, Xxxxxx 00000, and the name of its registered
agent at such address is Corporate Services of Nevada. The
Company may designate another registered office or agent at any
time by following the procedures set forth in the Act.
Section 2.5. Purpose. The purpose of the Company is to
engage in any and all lawful business activities.
Section 2.6. Effective Date. This Agreement shall become
effective upon execution.
Section 2.7. Term. The term of the Company shall continue in
perpetuity and until the Company is dissolved in accordance with
the provisions of this Agreement or the Act.
Section 2.8. Other Instruments. Each Member hereby agrees,
within ten (10) days after receipt of a written request therefor,
to execute and deliver such other and further documents and
instruments, statements of interest and holdings, designations,
powers of attorney and other instruments, and to take such other
action, as the Company deems necessary, useful, or appropriate to
comply with any laws, rules or regulations or as may be necessary
to enable the Company to fulfill its responsibilities under this
Agreement.
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ARTICLE III
MEMBERS AND CAPITAL STRUCTURE
Section 3.1. Names and Addresses of Members. All Members and
Former Members of the Company, and their last known business,
residence or mailing address, shall be listed on Exhibit A. The
Members shall be required to update Exhibit A from time-to-time
as necessary to accurately reflect the information therein.
Section 3.2. Units Representing Interests. Interests in the
Company shall be represented by the Units held by each Member.
Each Member's respective Units in the Company shall be set forth
on Exhibit B (which shall be updated by the Members from time-to-
time as required to accurately reflect the information therein).
The Members hereby agree that each Unit shall entitle the Member
possessing such Unit to, except as otherwise provided in Articles
VIII and XII, the allocation of an equal proportionate share per
Unit of the Company's Profits and Losses.
Section 3.3. Capital Contributions and Percentage Interests
of Members. The agreed fair market value of the Capital
Contributions to the Company and Percentage Interests of each
Member are set forth on Exhibit B (as same exists at the
Effective Date). Any subsequent Capital Contributions shall be
in such amounts and in such types of property as may be agreed
upon by all of the Members, and shall also be reflected on
Exhibit B (as updated).
Section 3.4. Additional Capital Contributions. Members
shall be permitted from time-to-time to make such additional or
further Capital Contributions, for such consideration and/or
Units, as shall be determined by all the Members. Except to the
extent that a Member shall agree to do so or shall be
contractually obligated to do so, no Member shall be required to
make any additional Capital Contributions to the Company.
Section 3.5. Capital Accounts.
(a) An individual Capital Account shall be established
and maintained on behalf of each Member in the
manner provided by Treasury Regulation Section
1.704-l(b)(2)(iv). To the extent consistent with
Treasury Regulation Section 1.704-l(b)(2)(iv), the
Capital Account of each Member shall consist of
(i) the amount of cash such Member has contributed
to the Company, plus (ii) the agreed fair market
value of any property such Member has contributed
to the Company, net of any liabilities assumed by
the Company or to which such property is subject,
plus (iii) the amount of Profits (including tax-
exempt income) allocated to such Member, less (iv)
the amount of Losses allocated to such Member,
less (v) the amount of all cash distributed to
such Member, less (vi) the fair market value of
any property distributed to such Member, net of
any liability assumed by such Member or to which
such property is subject, less (vii) such Member's
share of any other expenditures which are not
deductible by the Company for federal income tax
purposes or which are not allowable as additions
to the basis of Company property, and (viii)
subject to such other adjustments as may be
required under the Code. The Capital Account of a
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Member shall be increased or decreased, as
relevant or applicable, to reflect adjustments to
basis made pursuant to the Code or Treasury
Regulations.
(b) Except as may be specifically provided otherwise
in this Agreement, no Member shall have any
liability or obligation to the Company, or to any
Member or any other Person, to restore a negative
or deficit balance in such Member's Capital
Account.
Section 3.6. No Redemption Rights. Except as may otherwise
be specifically provided in this Agreement or be determined by
all the Members, no Member or Former Member shall be entitled, at
or after the time the Member ceases to be a Member of the Company
or at any other time, to demand or receive from the Company a
return of any of the Member's Capital Contributions or the
purchase or redemption of, or other payment for, the Member's
Units or Interest.
Section 3.7. Member Loans or Services. Unless otherwise
determined by all the Members, loans or services by any Member to
the Company shall not be considered Capital Contributions.
Section 3.8. Prior Obligations. In the event that any Member
(or any of such Member's shareholders, partners, members, owners,
or Affiliates (collectively, the "Liable Member")) has incurred
any indebtedness or obligation prior to the effective date of
this Agreement that relates to or otherwise affects the Company,
neither the Company nor any Other Member shall have any liability
or responsibility for or with respect to such indebtedness or
obligation unless such indebtedness or obligation is assumed by
the Company pursuant to a written instrument signed by all the
Members. All cost and expenses incurred by any Member arising
by way of organizing expenses for activities undertaken on behalf
of the Company shall be reimbursed to such Member, subject to
approval of the Board.
Section 3.9. Certificates for Units. The Units or Interest
of a Member in the Company may be represented by such
Certificates of Membership, Unit Certificates or similar
instruments, if any, as may from time-to-time be determined by
the Board.
ARTICLE IV
BOARD OF MANAGERS
Section 4.1. Management by Board of Managers. The business
and affairs of the Company shall be managed by, and shall be
under the exclusive control and direction of, a Board of Managers
consisting of no fewer than seven (7) nor more than nine (9)
Managers (the "Board"). One (1) Manager shall be appointed by
each of the Initial Members of the Company; provided, however,
that any Initial Member shall lose such power of appointment upon
the Transfer or attempted Transfer (as defined in Section 11.1
below) of any portion of its Membership Interest prior to any
public offering of equity interests in the Company. One Manager
shall be the individual elected by the Board to serve as the
Company's Chief Executive Officer. The remaining Managers shall
be elected by the majority vote of the appointed Managers. Any
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Manager appointed by an Initial Member may only be removed, or
replaced in the event of resignation, by that Initial Member.
Managers elected by the other Managers may be removed at any time
for any reason by the affirmative vote of a majority of the
Board. The Board shall elect from among the Managers, and may
remove at any time for any reason, a Chairman, who shall preside
at all Board meetings and exercise such other duties as are
usually vested in the office of chairman of the board. In the
absence of the Chairman, the Tax Matters Manager shall preside at
Board meetings as Acting Chairman.
Section 4.2. Authority of Board. The Board, in its sole
and absolute discretion, shall have full and complete power and
authority to make all decisions and to take all actions incident
to the management and conduct of the Company's business and
affairs except that the Board may not, without the unanimous
consent of the Members, do any of the following:
(a) take any action in contravention of this Agreement
or the Act;
(b) take any action resulting in personal liability of
any Member in any jurisdiction;
(c) take any action or make any decision reserved to
the Members in this Agreement or in the Articles;
(d) pledge or assign any of the Company's property as
collateral for the debt of any other person,
corporation or entity or commit the Company to act
as an endorser, guarantor or surety for the
obligations of any other person, corporation or
entity.
Section 4.3. Vote Required. Unless otherwise specified
herein, all actions of the Board shall be taken by the
affirmative vote of a majority of the Managers then appointed or
elected and acting, which must include a majority of the Managers
appointed by the Initial Members.
Section 4.4. Execution of Instruments. All instruments,
contracts, agreements and documents of any type whatsoever to be
executed on behalf of the Company may be executed by such officer
or officers of the Company as shall have been so authorized by
this Agreement or by the Board.
Section 4.5. Authority of Members. Members (in their
capacities as Members) shall not have authority to act for or to
bind the Company except such authority as may from time-to-time
be specifically granted or approved in writing by all Members.
No Member (in the capacity as a Member) shall have the authority
to sign agreements or other instruments on behalf of the Company
or to otherwise act as an authorized agent or other
representative of the Company except as such Member shall have
been specifically authorized as provided in this Agreement.
Section 4.6. Qualifications, Number, Appointment and
Vacancies. Any Person appointed as provided herein, whether or
not such Person is a Member, is qualified to serve as a Manager
of the Company. Managers shall be appointed, and may from time-
to-time be removed and/or replaced (with or without cause), and
vacancies in such position shall be filled, as provided in
Section 4.1 above.
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Section 4.7. Officers and Committees. The Board may from
time-to-time establish such offices and Committees of the
Company, and elect or appoint and grant authority to act to such
officers of the Company, as shall be deemed advisable by the
Board for the day-to-day management and conduct of the Company's
business and affairs. Officers may, but need not, be Members
and/or Managers of the Company. The initial offices and officers
of the Company are described and designated in Article VII.
Officers may be removed (with or without cause) and vacancies in
offices may be filled at any time and from time-to-time by the
Board.
Section 4.8. Reimbursement of Expenses. Each Manager shall
be entitled to reimbursement from the Company of all expenses
reasonably incurred and paid by such Manager on behalf of the
Company. Any question as to whether a Manager is entitled to
reimbursement of expenses under this Section shall be determined
by the Board.
Section 4.9. Liability. Managers shall not be personally
liable for the debts, obligations or liabilities of the Company,
whether arising in contract, tort or otherwise, or for the acts
or omissions of any other Manager, agent or employee of the
Company. A Manager is not liable for any action taken as a
Manager, or for any failure to take any action, unless the
Manager has breached or failed to perform the Manager's duties to
the Company and the breach or failure to perform constitutes
willful, fraud, or a knowing violation.
Section 4.10. Performance of Duties and Reliance on Others.
A Manager shall perform the Manager's duties in good faith, in a
manner the Manager reasonably believes to be in the best interest
of the Company, and with such care as an ordinarily prudent
person in a like position would use under similar circumstances.
In performing the Manager's duties, a Manager shall be entitled
to rely on information, opinions, reports, or statements of the
following persons or groups unless the Manager has knowledge
concerning the matter in question that would cause such reliance
to be unwarranted:
(a) another Manager in the Company or one or more
employees or other agents in the Company whom the
Manager reasonably believes to be reliable and
competent in the matters presented;
(b) any attorney, public accountant or other person as
to matters which the Manager reasonably believes
to be within such person's professional or expert
competence; or
(c) a committee upon which the Manager does not serve,
duly designated in accordance with the provision
of the articles of this Agreement, as to matters
within its designated authority, which committee
the Manager reasonably believes to merit
confidence.
Section 4.11. Compensation. Managers shall be entitled to
such reasonable compensation, if any, as shall from time-to-time
be determined by all the Members. Compensation payable to
Managers shall be treated as expenses of the Company and shall
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not be deemed to constitute distributions to the recipient of any
profit, loss or capital of the Company, even though the Manager
to whom payment is made is also a Member.
Section 4.12. Appointment of Tax Matters Manager. Xxxxx
Xxxxxxxx is hereby designated as the Tax Matters Manager (the
"TMM"). The TMM shall be responsible for all matters involving
Federal, state, local or other taxes of any type. The TMM shall
serve as such until a successor is duly elected by a majority of
the Board and qualified, or until the earlier withdrawal or
retirement of the TMM or removal by a majority of the Board.
Section 4.13. Appointment of Initial Manager(s). The
initial Managers of the Company are: Xxx X. Xxxxxx (U.S.
Xpress), Xxxxx Xxxxxxxx (X.X. Xxxx), Jun-Xxxxx Xx (Chief
Executive Officer), Xxxxx X. Xxxxx (Swift), Xxxxx X. Xxxxxx
(Covenant), Xxxxxxx X. Xxxxxxx (M.S. Carriers), and Xxxxxxxx X.
Xxxxxx (Xxxxxx).
Section 4.14. Meetings of the Board. Regular meetings of
the Board may be held periodically on fixed, predetermined dates
and times if the Board determines that regular meetings should be
held and fixes the dates and times for such meetings in advance
and each Manager is notified of such action. Other meetings of
the Board may be called at any time by the Chairman, Chief
Executive Officer, or a majority of the Managers.
Section 4.15. Notice of Meetings. No notice of regular
meetings shall be required unless the date or time of any such
meeting is changed from the date and time fixed for such meeting,
in which case each Manager shall be notified of such change
orally or in writing at least twenty-four hours before such
meeting. The Company shall give written or oral notice stating
the date, time, and place of any other meeting of the Board to
each Manager of record entitled to vote at the meeting at least
twenty-four hours before the meeting.
Section 4.16. Waiver of Notice. A Manager may waive notice
of any meeting, before or after the date and time of the meeting
as stated in the notice, by delivering a signed waiver to the
Company for inclusion in the minutes. A Manager's attendance at
any meeting in person or by proxy (a) waives objection to lack of
notice or defective notice of the meeting unless the Manager at
the beginning of the meeting objects to holding the meeting or
transacting business at the meeting, and (b) waives objection to
consideration of a particular matter at the meeting that is not
within the purposes described in the meeting notice unless the
Manager objects to considering the matter when it is presented.
Section 4.17. Voting by Proxy. A Manager may appoint a
proxy to vote or otherwise act for the Manager pursuant to a
written appointment form executed by the Manager or the Manager's
duly authorized attorney-in-fact. An appointment of a proxy is
effective when received by the Secretary or other officer or
agent of the Company authorized to tabulate votes. The general
proxy of a fiduciary is given the same effect as the general
proxy of any other Manager. A proxy appointment is valid for 11
months unless otherwise expressly stated in the appointment form.
Section 4.18. Action by Consent. Any action required or
permitted to be taken at a meeting of the Board may be taken
without a meeting if the action is taken in writing by all the
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Managers. The action must be evidenced by one or more written
consents describing the action taken, signed by all the Managers
entitled to vote on the action, and delivered to the Company for
inclusion in the minutes.
Section 4.19. Presence. Any or all Managers may
participate in any regular or other meeting of the Board by, or
through the use of, any means of communication by which all
Managers participating may simultaneously hear each other during
the meeting. A Manager so participating is deemed to be present
in person at the meeting.
Section 4.20. Conduct of Meetings. At any meeting of the
Board, the Secretary of the Company shall prepare minutes of the
meeting, which shall be placed in the minute books of the
Company.
ARTICLE V
THE MEMBERSHIP
Section 5.1. The Membership. The Members as a group shall
be designated and referred to as the Membership.
Section 5.2. Meetings of the Membership. Regular meetings
of the Membership may be held periodically on fixed,
predetermined dates and times if a majority of the Members
determines that regular meetings should be held and fixes the
dates and times for such meetings in advance and each Member is
notified of such action. Other meetings of the Membership may be
called at any time by a majority of the Members.
Section 5.3. Notice of Meetings. No notice of regular
meetings shall be required unless the date or time of any such
meeting is changed from the date and time fixed for such meeting,
in which case each Member shall be notified of such change orally
or in writing at least twenty-four hours before such meeting.
The Company shall give written or oral notice stating the date,
time, and place of any other meeting of the Membership to each
Member of record entitled to vote at the meeting at least twenty-
four hours before the meeting.
Section 5.4. Waiver of Notice. A Member may waive notice
of any meeting, before or after the date and time of the meeting
as stated in the notice, by delivering a signed waiver to the
Company for inclusion in the minutes. A Member's attendance at
any meeting in person or by proxy (a) waives objection to lack of
notice or defective notice of the meeting unless the Member at
the beginning of the meeting objects to holding the meeting or
transacting business at the meeting, and (b) waives objection to
consideration of a particular matter at the meeting that is not
within the purposes described in the meeting notice unless the
Member objects to considering the matter when it is presented.
Section 5.5. Voting by Proxy. A Member may appoint a proxy
to vote or otherwise act for the Member pursuant to a written
appointment form executed by the Member or the Member's duly
authorized attorney-in-fact. An appointment of a proxy is
effective when received by the Secretary or other officer or
agent of the Company authorized to tabulate votes. The general
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proxy of a fiduciary is given the same effect as the general
proxy of any other Member. A proxy appointment is valid for 11
months unless otherwise expressly stated in the appointment form.
Section 5.6. Action by Consent. Any action required or
permitted to be taken at a meeting of the Membership may be taken
without a meeting if the action is taken in writing by all the
Members. The action must be evidenced by one or more written
consents describing the action taken, signed by all the Members
entitled to vote on the action, and delivered to the Company for
inclusion in the minutes.
Section 5.7. Presence. Any or all Members may participate
in any annual, regular or special meeting of the Membership by,
or through the use of, any means of communication by which all
Members participating may simultaneously hear each other during
the meeting. A Member so participating is deemed to be present
in person at the meeting.
Section 5.8. Conduct of Meetings. At any meeting of the
Membership, a majority of the Members shall preside or appoint a
person to preside at the meeting and shall appoint a person to
act as secretary of the meeting. The secretary of the meeting
shall prepare minutes of the meeting, which shall be placed in
the minute books of the Company.
Section 5.9. Voting and Attending by Representatives. Any
Member that is a corporation, partnership, limited liability
company or other entity that is not a natural person may attend
and vote at meetings of the Membership by such representatives as
such Member may select from time-to-time in its sole discretion.
No written proxy or other appointment shall be required with
respect to any such representatives unless a majority of the
Members determines otherwise.
ARTICLE VI
RIGHTS AND OBLIGATIONS OF MEMBERS
Section 6.1. Rights of Members. None of the following
actions may be taken absent the unanimous consent of the Members:
(a) any action taken in contravention of this
Agreement or the Act;
(b) any action taken by the Company resulting in
personal liability of any Member in any
jurisdiction;
(c) the pledge or assignment of any of the Company's
property as collateral for the debt of any other
person, corporation or entity or act committing
the Company to act as an endorser, guarantor or
surety for the obligations of any other person,
corporation or entity;
(d) any distribution of Individual Subscription
Capital (as defined in the Initial Subscription
Agreement entered into by each of the Initial
Members) to the Members;
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(e) additional contributions of capital as described
in Section 3.4 hereof;
(f) the Company's redemption of any Member's Interest
as described in Section 3.6 hereof;
(g) characterizing Member loans or services as Capital
Contributions as provided in Section 3.7 hereof;
(h) dissolution of the Company as provided in Section
12.1(b) hereof; and
(i) any amendments to this Operating Agreement
purporting to limit or alter the rights of the
Members as provided in Section 13.2 hereof.
Section 6.2. Management Fees and Overhead Allocations.
Members and/or Affiliates may from time-to-time provide property
and assets for use by the Company, and in consideration thereof
be entitled to reasonable rents or other compensation or
reimbursement as the Board determines is appropriate. In
addition, Members and/or Affiliates may from time-to-time provide
management, administrative or other services for the Company, as
Managers or otherwise, and in consideration thereof may be
entitled to reasonable management fees, overhead allocations
and/or other compensation as from time-to-time determined by the
Board. In that regard, a Member to whom such sums are payable
may participate as a Manager of the Company in making a
determination of the amount of any such management fees, overhead
allocations, rents, or other compensation or reimbursement
payable to the Member by the Company and such Member will owe no
fiduciary or other duties to any other Members or to the Company
with respect to determining the amounts thereof. All such
payments made to any Member pursuant to this Section shall be
treated as expenses of the Company and shall not be deemed to
constitute distributions to the recipient of any profit, loss or
capital of the Company.
Section 6.3. Reimbursement of Expenses. Each Member shall
be entitled to reimbursement from the Company of all expenses
reasonably incurred and paid by such Member on behalf of the
Company. Any question as to whether a Member is entitled to
reimbursement of expenses under this Section shall be determined
by the Board.
Section 6.4. Waiver of Partition. Each Member, on behalf
of such Member, its successors and its assigns, hereby waives any
rights to have any Company property partitioned.
Section 6.5. Liability. Members shall not be personally
liable for the debts, obligations or liabilities of the Company,
whether arising in contract, tort or otherwise, or for the acts
or omissions of any other Member, agent or employee of the
Company. A Member is not liable for any action taken as a
Member, or any failure to take any action, unless the Member has
breached or failed to perform the Member's duties to the Company
and the breach or failure to perform constitutes willful
misconduct, fraud, or a knowing violation of law.
Section 6.6. Performance of Duties and Reliance on Others.
A Member shall perform the Member's duties as a Member in good
Page 12 of 30 Xxxxxxxxxx.xxx Operating Agreement
faith, in a manner the Member reasonably believes to be in the
best interests of the Company, and with such care as an
ordinarily prudent person in a like position would use under
similar circumstances. In performing the Member's duties, a
Member shall be entitled to rely on information, opinions,
reports, or statements of the following persons or groups unless
the Member has knowledge concerning the matter in question that
would cause such reliance to be unwarranted:
(a) a Manager of the Company or one or more employees
or other agents of the Company whom the Member
reasonably believes to be reliable and competent
in the matters presented;
(b) any attorney, public accountant, or other person
as to matters which the Member reasonably believes
to be within such person's professional or expert
competence; or
(c) a committee upon which the Member does not serve,
duly designated in accordance with a provision of
the Articles or this Agreement, as to matters
within its designated authority, which committee
the Member reasonably believes to merit
competence.
Section 6.7. Compensation. The Company may, but shall not
be obligated to pay any Member or other Person a salary and/or
bonus as compensation for services rendered to the Company. Such
salaries and/or bonuses shall be treated as expenses of the
Company and shall not be deemed to constitute distributions to
the recipient of any profit, loss or capital of the Company, even
though such recipient is a Member of the Company.
Section 6.8. No Right to Withdraw. Members shall not
have any right to withdraw as Members. However, a Member may be
permitted to withdraw as a Member with the written consent of the
Board.
ARTICLE VII
OFFICERS
Section 7.1. Officers. Except as may from time-to-time be
determined otherwise by the Board, the officers of the Company
shall be a President and a Secretary. The Board may also choose
and appoint one or more Vice Presidents, one or more Assistant
Secretaries or Assistant Treasurers and such other officers and
assistant officers as may be deemed necessary or appropriate by
the Board. Officers may, but need not, be Members and/or
Managers of the Company.
Section 7.2. President/Chief Executive Officer. Unless the
Board otherwise provides, the President of the Company shall be
the Chief Executive Officer of the Company with such general
executive powers and duties of supervision and management as are
usually vested in the office of the Chief Executive Officer,
shall carry into effect all directions of the Board, shall sign
all notes, agreements or other instruments in writing made and
entered into for or on behalf of the Company, shall have general
supervision over the business and affairs of the Company, and,
shall preside at all meetings of the Membership.
Page 13 of 30 Xxxxxxxxxx.xxx Operating Agreement
Section 7.3. Vice President. Each Vice President of the
Company shall report directly to the President, or such other
person as the Board may direct from time-to-time, and shall have
such powers and duties as the Board or the President may from
time-to-time prescribe.
Section 7.4. Secretary. The Secretary of the Company shall
keep an accurate record of the proceedings of the meetings of the
Membership and shall perform such other duties as are usually
incident to the office of the Secretary.
Section 7.5. Treasurer. The Treasurer of the Company is
responsible for (a) keeping correct and complete books of account
which show accurately at all times the financial condition of the
Company, (b) safeguarding all funds, notes, securities, and other
valuables which may from time-to-time come into the possession of
the Company, and (c) depositing all funds of the Company with
such depositories as the Board shall designate. The Treasurer
shall furnish at meetings of the Membership, or when otherwise
requested, a statement of the financial condition of the Company.
The Treasurer has such other duties as the Board may from time-to-
time prescribe. The Treasurer shall be entitled to rely and
shall be deemed to be acting in good faith in relying upon the
advice of counsel or the public accountants of the Company.
ARTICLE VIII
ALLOCATIONS AND DISTRIBUTIONS
Section 8.1. Accounting Definitions. The following
capitalized terms, which are used predominantly in this Article,
shall have the following meanings for purposes of this Agreement:
"Adjusted Capital Account Deficit" means, with respect to
any Member, the deficit balance, if any, in such Member's Capital
Account as of the end of the relevant fiscal year, after giving
effect to the following adjustments:
Credit to such Capital Account any amounts which such
Member is obligated to restore pursuant to any provision of
this Agreement or is deemed to be obligated to restore
pursuant to the penultimate sentences of Treasury Regulation
Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
Debit to such Capital Account the items described in
Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-
1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) .
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Treasury Regulation
Section 1.704-l(b)(2)(ii)(d) and shall be applied in a manner
consistent with such intent.
Page 14 of 30 Xxxxxxxxxx.xxx Operating Agreement
"Company Minimum Gain" has the meaning set forth in Treasury
Regulation Sections 1.704-2(b)(2) and 1.704-2(d) with respect to
"partnership minimum gain," substituting the word "member" for
"partner" and "company" for "partnership" wherever they appear.
"Member Nonrecourse Debt" has the meaning set forth in
Treasury Regulation Section 1.704-2(b)(4) with respect to
"partner nonrecourse debt," substituting the word "member" for
"partner" and "company" for "partnership" wherever they appear.
"Member Nonrecourse Debt Minimum Gain" means an amount, with
respect to each Member Nonrecourse Debt, equal to the Company
Minimum Gain that would result if such Member Nonrecourse Debt
were treated as a Nonrecourse Liability, determined in accordance
with Treasury Regulation Section 1.704-2(i)(3).
"Member Nonrecourse Deductions" has the meaning set forth in
Treasury Regulation Sections 1.704-2(i)(1) and 1.704-2(i)(2) with
respect to "partner nonrecourse deductions," substituting the
word "member" for "partner" and "company" for "partnership"
wherever they appear.
"Nonrecourse Deductions" has the meaning set forth in
Treasury Regulation Section 1.704-2(b)(1).
"Nonrecourse Liability" has the meaning set forth in
Treasury Regulation Section 1.7042(b)(3).
Section 8.2. Allocation of Profits and Losses. Except as may
be expressly provided otherwise in this Article, and subject to
the provisions of Sections 704(b) and 704(c) of the Code, the
Profits and Losses of the Company for each fiscal year of the
Company shall be allocated to the Members pro rata in accordance
with their respective Percentage Interests.
Section 8.3. Special Allocations. The following special
allocations shall be made in the following order:
(a) Minimum Gain Chargeback. Except as otherwise
provided in Treasury Regulation Section 1.704-
2(f), notwithstanding any other provision of this
Article, if there is a net decrease in Company
Minimum Gain during any fiscal year, each Member
shall be specially allocated items of Company
income and gain for such fiscal year (and, if
necessary, subsequent fiscal years) in an amount
equal to such Member's share of the net decrease
in Company Minimum Gain, determined in accordance
with Treasury Regulation Section 1.704-2(g).
Allocations pursuant to the previous sentence
shall be made in proportion to the respective
amounts required to be allocated to each Member
pursuant thereto. The items to be so allocated
shall be determined in accordance with Treasury
Regulation Sections 1.704-2(f)(6) and 1.704-
2(j)(2). This subsection is intended to comply
with the minimum gain chargeback requirement in
Treasury Regulation Section 1.704-2(f) and shall
be interpreted consistently therewith.
Page 15 of 30 Xxxxxxxxxx.xxx Operating Agreement
(b) Member Nonrecourse Debt Minimum Gain Chargeback.
Except as otherwise provided in Treasury
Regulation Section 1.704-2(i)(4), notwithstanding
any other provision of this Article, if there is a
net decrease in Member Nonrecourse Debt Minimum
Gain attributable to a Member Nonrecourse Debt
during any fiscal year, each Member who has a
share of the Member Nonrecourse Debt Minimum Gain
attributable to such Member Nonrecourse Debt,
determined in accordance with Treasury Regulation
Section 1.704-2(i)(5), shall be specifically
allocated items of Company income and gain for
such fiscal year (and, if necessary, subsequent
fiscal years) in an amount equal to such Member's
share of the net decrease in Member Nonrecourse
Debt Minimum Gain attributable to such Member
Nonrecourse Debt, determined in accordance with
Treasury Regulation Section 1.704-2(i)(4).
Allocations pursuant to the previous sentence
shall be made in proportion to the respective
amounts required to be allocated to each Member
pursuant thereto. The items to be so allocated
shall be determined in accordance with Treasury
Regulation Sections 1.704-2(i)(4) and 1.704-
2(j)(2). This subsection is intended to comply
with the minimum gain chargeback requirement in
Treasury Regulation Section 1.704-2(i)(4) and
shall be interpreted consistently therewith.
(c) Qualified Income Offset. In the event any Member
unexpectedly receives any adjustments,
allocations, or distributions described in
Treasury Regulation Sections 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) that cause such Member to have
an Adjusted Capital Account Deficit as of the end
of any fiscal year or that increase such Member's
Adjusted Capital Account Deficit, items of Company
gross income and gain shall be specially allocated
to each such Member in an amount and manner
sufficient to eliminate, to the extent and in the
manner required by the Treasury Regulations, the
Adjusted Capital Account Deficit of such Member as
quickly as possible; provided, however, that an
allocation pursuant to this subsection shall be
made only if and to the extent that such Member
would have an Adjusted Capital Account Deficit
after all other allocations provided for in this
Section have been tentatively made as if this
subsection were not in this Agreement. This
subsection is intended to constitute a "qualified
income offset" within the meaning of Treasury
Regulation Section 1.704-1(b)(2)(ii)(d).
(d) Avoidance of Adjusted Capital Account Deficit. To
the extent feasible no Losses shall be allocated
to any Member who, after giving effect to such
allocation and other expected allocations then
anticipated, would have an Adjusted Capital
Account Deficit as of the end of any fiscal year
of the Company. Any such Losses that cannot be
allocated to a Member by reason of this subsection
shall be allocated, to the extent possible, to
other Members as to which this subsection is not
applicable in proportion to their Interests. In
the event that any Member is nevertheless
allocated Losses that cause such Member to have,
or that increase, an Adjusted Capital Account
Page 16 of 30 Xxxxxxxxxx.xxx Operating Agreement
Deficit, items of Company gross income and gain
shall be specially allocated to each such Member
in an amount and manner sufficient to eliminate,
to the extent and in the manner required by the
Treasury Regulations, the Adjusted Capital Account
Deficit of each such Member as quickly as
possible. The allocations pursuant to this
subsection shall be made only if and to the extent
that such Member would have an Adjusted Capital
Account Deficit after all other allocations
provided for in this Article have been tentatively
made as if this subsection were not in the
Agreement.
(e) Nonrecourse Deductions. Nonrecourse Deductions for
any fiscal year shall be specifically allocated
among the Members in proportion to their
Percentage Interests.
(f) Member Nonrecourse Deductions. Any Member
Nonrecourse Deductions for any fiscal year shall
be specially allocated to the Member who bears the
economic risk of loss with respect to the Member
Nonrecourse Debt to which such Member Nonrecourse
Deductions are attributable in accordance with
Treasury Regulation Section 1.704-2(i)(1).
(g) Section 754 Adjustments. To the extent an
adjustment to the adjusted tax basis of any
Company asset pursuant to Section 734(b) or
Section 743(b) of the Code is required pursuant to
Treasury Regulation Section 1.704-
l(b)(2)(iv)(m)(2) or 1.704-l(b)(2)(iv)(m)(4) to be
taken into account in determining Capital Accounts
as the result of a distribution to a Member in
complete liquidation of the Member's Interest in
the Company, the amount of such adjustment to
Capital Accounts shall be treated as an item of
gain (if the adjustment increases the basis of the
asset) or loss (if the adjustment decreases such
basis), and such gain or loss shall be specially
allocated to the Members in accordance with their
Interests in the Company in the event Treasury
Regulation Section 1.704(b)(2)(iv)(m)(2) applies,
or to the Member to whom such distribution was
made in the event Treasury Regulation Section
1.704-l(b)(2)(iv)(m)(4) applies.
Section 8.4. Curative Allocations. The allocations set forth
in Section 8.3 (the "Regulatory Allocations") are intended to
comply with certain requirements of the Treasury Regulations. It
is the intent of the Members that, to the extent possible, all
Regulatory Allocations shall be offset either with other
Regulatory Allocations or with special allocations of other items
of Company Profits or Losses pursuant to this Section.
Therefore, notwithstanding any other provision of this Article
(other than the Regulatory Allocations), the Members shall make
such offsetting special allocations of Company Profits or Losses
so that, after such offsetting allocations are made, each
Member's Capital Account balance is, to the extent possible,
equal to the Capital Account balance such Member would have had
if the Regulatory Allocations were not part of the Agreement and
all Company items were allocated pursuant to Section 8.2.
Section 8.5. Allocations When Interests Vary. Allocations
of Profits and Losses, or each item thereof, shall be made to or
among Members whose Interests vary during any taxable year of the
Page 17 of 30 Xxxxxxxxxx.xxx Operating Agreement
Company, whether such varying Interests are attributable to
Transfers of Interests, the issuance of additional Units or
otherwise, shall be made in accordance with the applicable
provisions of the Code and the Treasury Regulations, using any
permitted method or convention selected by the Managers.
Section 8.6. Discretionary Distributions of Available Cash.
Subject to the provisions of Article XII and Section 6.1(a), the
Board may from time-to-time direct that some or all of the
Available Cash, if any, be distributed to the Members, pro rata
in accordance with their respective Percentage Interests or in
such other manner as all the Managers shall from time-to-time
unanimously determine.
Section 8.7. Distributions of Property. To the extent that
a Member is entitled to a distribution of assets from the Company
or to a return of the Member's Capital Contributions, the Member
shall have only the right to demand and receive cash in
satisfaction thereof.
Section 8.8. Distributions to Members of Record.
Distributions of Company assets in respect of an Interest shall
be made only to the Members who, according to the books and
records of the Company, are the holders of record of the
Interests in respect of which such distributions are made on the
actual date of distribution. Neither the Company nor any Member
shall incur any liability for making distributions in accordance
with the provisions of the preceding sentence, whether or not the
Company or the Member has knowledge or notice of any transfer or
purported transfer of ownership of an Interest.
ARTICLE IX
RECORDS AND ACCOUNTING
Section 9.1. Records and Accounting. The fiscal year of the
Company for financial reporting and for Federal income tax
purposes shall be the calendar year. The books and records of the
Company shall be kept, and the financial position and the results
of its operations recorded, in accordance with generally accepted
accounting principles. The books and records of the Company shall
reflect all Company transactions and shall be appropriate and
adequate for the Company's business. The Company shall keep the
following records and information, and any other records and
information required by the Act, at its principal office:
(a) A list with the full name and last known mailing
address of each Person who is or has been a Member
or Manager of the Company from the date of the
Company's organization.
(b) A copy of the Articles and all amendments or
restatements thereof.
(c) Copies of the Company's Federal, state and local
income tax returns and financial statements for
the three (3) most recent years, or if the returns
and statements were not prepared, copies of the
information and statements provided to or that
Page 18 of 30 Xxxxxxxxxx.xxx Operating Agreement
should have been provided to the Members to enable
them to prepare their Federal, state and local tax
returns for the same period.
(d) Copies of this Agreement and all amendments hereto
and copies of any written operating agreements no
longer in effect.
(e) A writing setting out the following:
(i) The amount of cash, if any, and a statement
of the agreed fair market value of any other
property or services contributed by each
Member and the times at which or events upon
the happening of which any additional
contributions agreed to be made by each
Member are to be made.
(ii) The events, if any, upon the happening of
which the Company is to be dissolved and its
affairs wound up.
(iii) Any other writings required by this
Agreement.
Section 9.2. Access to Accounting Records. Each Member, and
the Member's duly authorized representative, shall have the
right, at the Member's own expense, to inspect and copy the
records listed in Section 9.1 at the principal office of the
Company, upon reasonable request, during ordinary business hours.
Section 9.3 Accounting Decisions. All decisions as to
accounting matters, except as otherwise specifically set forth
herein, shall be made by the Board. The Board may rely upon the
advice of the Company's public accountants as to whether such
decisions are in accordance with generally accepted accounting
principles.
Section 9.4 Federal Income Tax Elections. The Company may
make any and all elections for Federal income tax purposes,
including, but not limited to, the following:
(a) to the extent permitted by applicable law and
regulations, an election to use an accelerated
depreciation method with respect to any
depreciable asset of the Company; and
(b) in case of a transfer of all or part of the
Interest of any Member, an election to adjust the
tax basis of the assets of the Company pursuant to
Code Sections 734, 743, and 754.
Section 9.5 Company Expenses. All of the Company's expenses,
including any expenses incurred by the Managers and Members on
behalf of the Company, shall be paid by the Company. The expenses
to be paid by the Company in connection with the Company's
business shall include, but not be limited to: (a) costs of
personnel employed by the Company and involved in the business of
the Company; (b) costs of borrowed money, taxes and assessments
applicable to the Company; (c) legal, audit, accounting,
appraisal and engineering fees; (d) printing, photocopying and
Page 19 of 30 Xxxxxxxxxx.xxx Operating Agreement
other expenses and taxes incurred in connection with the
issuance, distribution, transfer, registration and recording of
documents evidencing ownership of Units or in connection with the
business of the Company; (e) fees and expenses in connection with
the acquisition, sale, exchange, or other disposition or
financing of the assets of the Company; (f) the cost of insurance
in connection with the business of the Company; (g) expenses of
forming or converting, modifying or terminating the Company; (h)
the cost of preparing and disseminating to Members the reports
contemplated by this Agreement and the cost of preparing and
filing reports and tax returns with governmental agencies; and
(i) the costs incurred in connection with any litigation or
regulatory proceedings in which the Company is involved. The
Managers and Members shall be entitled to reimbursement from the
Company for all expenses of the Company reasonably incurred and
paid by them on behalf of the Company whether prior to or after
the date of the Company's organization.
ARTICLE X
ADDITIONAL MEMBERS AND UNITS
Section 10.1. Issuance of Additional Units. The Company may
from time-to-time issue additional Units by sale or other
issuance to existing Members or other Persons for such
consideration, and upon such terms and conditions, as the Board
shall from time-to-time unanimously determine. Any such sales or
other issuances of Units shall be made in accordance with the
Articles and this Agreement.
Section 10.2. Conditions to Issuance. As a condition to
such issuances, new Members acquiring such Units shall execute
this Agreement and all Members acquiring such Units shall execute
all other documents and instruments as the Company may require.
ARTICLE XI
TRANSFER OF UNITS
Section 11.1. Definition of Transfer. For purposes of this
Agreement the term "Transfer" means, with respect to all or any
portion of a Member's Interest in the Company, any sale, gift,
bequest, assignment, conveyance, transfer, pledge, grant of a
security interest, collateral assignment or other disposition of
all or any portion of such Interest, whether voluntary or
involuntary, including any of the foregoing that occur by
operation of law. The transfer of any Membership Interest by a
Member to any of its Affiliates is specifically permitted, and
excluded from the definition of "Transfer" described in this
paragraph.
Section 11.2. Securities Law Compliance. In addition to
any other restrictions applicable to the Transfer of an Interest,
and unless such requirement shall be waived in writing by the
Company, no Member shall Transfer any Interest in the Company
without registration under applicable federal and state
securities laws unless such Member furnishes to the Company an
opinion of counsel satisfactory to the Company to the effect that
registration under such laws is not required.
Page 20 of 30 Xxxxxxxxxx.xxx Operating Agreement
Section 11.3. Regulatory Compliance. In addition to any
other restrictions applicable to the Transfer of an Interest, and
unless such requirement shall be waived in writing by the
Company, no Member, either individually or in concert with other
Members, shall Transfer any Interest in the Company if such
Transfer will give rise to a requirement that the Company effect
any regulatory or antitrust filings (including filings under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, 15 U.S.C.
ss. 18a), or obtain any regulatory or antitrust approvals,
including the expiration or early termination of mandatory
waiting periods without adverse government action (collectively,
"Antitrust and Regulatory Activities"). Each of the Members will
support the Company's Antitrust and Regulatory Activities.
Section 11.4. Effect of Transfer of Interest. A Transfer
(or attempted Transfer) of any Interest (a) that is prohibited by
the terms of this Agreement or that is prohibited by the terms of
any other contract or agreement by which the Member whose
Interest is the subject of a Transfer (or attempted Transfer) and
the Company are bound; (b) that is made in violation of or
without first complying with any applicable restrictions
(including, without limitation, restrictions providing for a
right of first refusal or option to purchase in favor of another
Person and/or restrictions requiring notice to another Person or
Persons prior to a Transfer) under the terms of this Agreement or
under the terms of any other contract or agreement by which the
Member whose Interest is the subject of a Transfer (or attempted
Transfer) and the Company are bound; or (c) that is made, prior
to any public offering of equity interests in the Company, to any
party which is not an Affiliate of the transferring party (any
such Transfer or attempted Transfer described in clauses (a), (b)
or (c) above is a "Prohibited Transfer"), shall be absolutely
void and of no effect and the Company shall not give any
recognition whatsoever thereto.
Section 11.5. Membership Conditions. A Transferee who has
been approved to become a Member as provided in this Agreement
must comply with or satisfy each of the following conditions in
order to be admitted as a Member:
(a) any conditions or requirements established or
imposed by the Managers in connection with the
approval of the Transferee's admission as a
Member; and
(b) such Transferee must execute an instrument
acceptable to the Company whereby the Transferee
accepts the terms of and becomes a party to and
bound by this Agreement.
Section 11.6. Rights Not Abrogated. A Transfer of an
Interest shall not, in the absence of an effective waiver thereof
or an agreement doing so, abrogate or preclude the exercise or
enforcement of any rights of any Person (other than the
transferor) with respect to the Interest transferred, and the
Transferee shall take such Interest subject thereto.
Page 21 of 30 Xxxxxxxxxx.xxx Operating Agreement
ARTICLE XII
DISSOLUTION AND WINDING UP
Section 12.1. Dissolution. The Company shall be dissolved
and its affairs wound up on the first of the following to occur:
(a) the occurrence of any event specified in the
Articles or this Agreement as an event that will
cause the dissolution of the Company;
(b) the determination of all the Members to dissolve
the Company; or
(c) entering of a decree of judicial dissolution.
The occurrence of an "event of dissociation" with respect to a
Member (as the term "event of dissociation" is defined in the
Act) shall not result in the dissolution of the Company, and the
existence of and conduct of business by the Company shall
continue without interruption following any such occurrence.
Section 12.2. Winding Up. Upon dissolution, the Board shall
proceed to wind up and liquidate the business and affairs of the
Company, and the Company may only carry on business that is
appropriate to wind up and liquidate the business and affairs of
the Company, including the following: (a) collecting the
Company's assets; (b) disposing of properties that will not be
distributed in kind to Members; (c) discharging or making
provision for discharging liabilities; (4) distributing the
remaining property among the Members; and (5) doing every other
act necessary to wind up and liquidate the business and affairs
of the Company. The Board shall follow the procedure for
disposing of known claims set forth in the Act.
Section 12.3. Distribution of Assets. Upon or in
anticipation of the winding up of the Company, the assets shall
be distributed in the following order:
(a) first, to creditors, including Members and
Managers who are creditors to the extent permitted
by law, to satisfy the liabilities of the Company
whether by payment or by the establishment of
adequate reserves, excluding distributions to
Members pursuant to Article VIII;
(b) next, to Members and former Members to satisfy the
Company's liabilities for distributions pursuant
to Article VIII;
(c) next, to Members of the Company in proportion to
their respective positive balances in their
Capital Accounts to the extent each such Member
has a positive balance in his Capital Account as
provided in Treasury Regulation Section 1.704-
1(b)(2)(ii)(b)(2); and
(d) next, to Members of the Company in proportion to
their respective Percentage Interests.
Page 22 of 30 Xxxxxxxxxx.xxx Operating Agreement
ARTICLE XIII
AMENDMENTS
Section 13.1. Proposal of Amendments. Amendments to the
Articles and this Agreement may be proposed in writing by the
Board. If any such proposed amendment could adversely affect the
classification of the Company as a partnership for federal income
tax purposes, the proposed amendment must be accompanied by an
opinion of counsel as to the legality and effect on the Company
and the Members. Copies of any amendments proposed to be made
pursuant to this Section shall be sent to each of the Members.
Section 13.2. Approval by Board. A proposed amendment of the
Articles or this Agreement shall be approved by the affirmative
vote of the Board cast at either a regular meeting or a special
meeting of the Board duly called for the purpose of voting on the
amendment or by the written consent of all the Managers,
provided, however, that no amendment purporting to limit or
change the rights of the Members as described in Section 6.1
hereof will be binding upon the Company or the Members absent the
unanimous consent of the Members thereto. Upon approval of any
amendment as provided in this Section, all Managers, whether or
not they voted for or consented to such amendment, shall be
deemed to have consented to such amendment and shall be bound by
the terms and provisions thereof as if they had so consented.
ARTICLE XIV
MISCELLANEOUS
Section 14.1. Complete Agreement. This Agreement and the
Articles constitute the complete and exclusive statement of
agreement among the Members with respect to their subject matter.
This Agreement and the Articles replace and supersede all prior
agreements by and among the Members or any of them. This
Agreement and the Articles supersede all prior written and oral
statements and no representation, statement, or condition or
warranty not contained in this Agreement or the Articles will be
binding on the Members or have any force or effect whatsoever.
Section 14.2. Governing Law. This Agreement and the rights
of the parties under this Agreement will be governed by,
interpreted, and enforced in accordance with the laws of the
State of Nevada.
Section 14.3. Binding Effect. Subject to the provisions of
this Agreement relating to transferability, this Agreement will
be binding upon and inure to the benefit of the Members, and
their respective Transferees, successors and assigns.
Section 14.4. Headings: Interpretation. All headings herein
are inserted only for convenience and ease of reference and are
not to be considered in the construction or interpretation of any
provision of this Agreement. The singular shall include the
plural, and the masculine gender shall include the feminine and
neuter, and vice versa, as the context requires.
Page 23 of 30 Xxxxxxxxxx.xxx Operating Agreement
Section 14.5. Severability. If any provision of this
Agreement is held to be illegal, invalid, unreasonable, or
unenforceable under the present or future laws effective during
the term of this Agreement, such provision will be fully
severable; this Agreement will be construed and enforced as if
such illegal, invalid, unreasonable, or unenforceable provision
had never comprised a part of this Agreement; and the remaining
provisions of this Agreement will remain in full force and effect
and will not be affected by the illegal, invalid, unreasonable,
or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid,
unreasonable, or unenforceable provision, there will be added
automatically as a part of this Agreement a provision as similar
in terms to such illegal, invalid, unreasonable, or unenforceable
provision as may be possible and be legal, valid, reasonable, and
enforceable.
Section 14.6. Multiple Counterparts. This Agreement may be
executed in several counterparts, each of which will be deemed an
original but all of which will constitute one and the same
instrument. However, in making proof with respect to this
Agreement it will be necessary to produce only one copy hereof
signed by the party to be charged.
Section 14.7. Additional Documents and Acts. Each Member
agrees to execute and deliver such additional documents and
instruments and to perform such additional acts as may be
necessary or appropriate to effectuate, carry out and perform all
of the terms, provisions, and conditions of this Agreement and
the transactions contemplated by this Agreement.
Section 14.8. No Third Party Beneficiary. This Agreement is
made solely and specifically among and for the benefit of the
Members and their respective successors and assigns subject to
the express provisions of this Agreement relating to successors
and assigns; and no other person will have any rights, interest,
or claims under the Agreement or be entitled to any benefits
under or on account of this Agreement as a third party
beneficiary or otherwise.
Section 14.9. Notices. Any notice to be given or to be
served upon the Company or any Member in connection with this
Agreement must be in writing and will be deemed to have been
given and received when delivered to the address specified by the
party to receive the notice. Such notices will be given to a
Member at the address specified on Exhibit A. Any Member or the
Company may, at any time by giving five days' prior written
notice to the other Members and the Company, designate any other
address in substitution of the foregoing address to which such
notice will be given.
Section 14.10. Title to Company Property. Legal title to all
property of the Company will be held and conveyed in the name of
the Company.
Section 14.11. Reliance on Authority of Person Signing
Agreement. In the event that a Member is not a natural person,
neither the Company nor any Member will (a) be required to
determine the authority of the individual signing this Agreement
to make any commitment or undertaking on behalf of such Person or
to determine any fact or circumstance bearing upon the existence
of the authority of such individual, or (b) be required to see to
the application or distribution of proceeds paid or credited to
individuals signing this Agreement on behalf of such entity.
Page 24 of 30 Xxxxxxxxxx.xxx Operating Agreement
Section 14.12. Indemnification. To the fullest extent
allowable by Nevada law (including pursuant to the expanded
rights and financial arrangements that may be granted to persons
under articles of organization, operating agreement, vote of
members or disinterested managers, if any, or otherwise under
such law), the Company shall indemnify Indemnifiable Persons (as
defined below), in the manner and under the circumstances
described in this Section 14.12.
(a) The Company shall indemnify any person who was or
is a party, or is threatened to be made a party,
to any threatened, pending or completed
investigation, claim, action, suit or proceeding,
whether civil, criminal, administrative, or
investigative, including any action by or in the
right of the Company, by reason of the fact that
he is or was a Manager, Member, officer, employee,
or agent of the Company, or is or was serving at
the request of the Company as a Manager, Member,
director, officer, employee, or agent of another
limited liability company, partnership, joint
venture, trust, or other enterprise (any such
person, an "Indemnifiable Person"), against
expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such
Indemnifiable Claim, unless a final adjudication
by a court of competent jurisdiction establishes
that his acts or omissions involved intentional
misconduct, fraud, or a knowing violation of law
and were material to the cause of action. The
termination of any Indemnifiable Claim by
judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the
person's acts or omissions involved intentional
misconduct, fraud, or a knowing violation of law.
(b) To the extent that an Indemnifiable Person has
been successful on the merits or otherwise in
defense of any Indemnifiable Claim, or in defense
of any claim, issue or matter therein, he shall be
indemnified by the Company against expenses,
including attorneys' fees, actually and reasonably
incurred by him in connection with such defense.
(c) Expenses incurred in defending an Indemnifiable
Claim shall be paid by the Company in advance of
the final disposition of such Indemnifiable Claim
upon receipt of an undertaking by or on behalf of
the Indemnifiable Person to repay such amount if
final adjudication by a court of competent
jurisdiction establishes that his acts or
omissions involved intentional misconduct, fraud,
or a knowing violation of law and were material
to the cause of action.
(d) The indemnification provided by this Section 14.12
does not exclude any other rights to which a
person seeking indemnification may be entitled
under any law, articles of organization,
insurance, agreement, vote of Members or
disinterested Managers or otherwise, both as to
action in his official capacity and as to action
in another capacity while holding such office.
The indemnification provided by this Section 14.12
shall continue as to a person who has ceased to be
Page 25 of 30 Xxxxxxxxxx.xxx Operating Agreement
a Member, Manager, officer, employee or agent and
shall inure to the benefit of the heirs, executors
and administrators of such a person. No amendment
to repeal this Section 14.12 shall apply to or
have any effect on the rights of any Indemnifiable
Person under this Section 14.12, which rights came
into existence by virtue of acts or omissions of
such person occurring prior to such amendment or
repeal.
(e) The Company may purchase and maintain insurance on
behalf of any person who is or was a Member,
Manager, officer, employee or agent of the
Company, or is or was serving at the request of
the Company as a Member, Manager, director,
officer, employee or agent of another limited
liability company, corporation, partnership, joint
venture, trust or other enterprise (a "Business
Entity") against any liability asserted against
him and incurred by him in any such capacity, or
arising out of his status as such, whether or not
the Company would have the power to indemnify him
against such liability under the provisions of
this Section 14.12.
(f) For the purposes of this Section 14.12, references
to "the Company" include, in addition to the
Company itself, any corporation resulting from
converting the Company into corporate form, any
surviving Business Entity in any merger or similar
business combination, any constituent Business
Entity (including any constituent of a
constituent) absorbed in consolidation or merger
which, if its separate existence had continued,
would have had power and authority to indemnify
its members, managers, directors, officers,
employees and agents so that any person who is or
was a member, manager, director, officer, employee
or agent of such constituent Business Entity, or
is or was serving at the request of such
constituent Business Entity as a director,
officer, employee or agent of another Business
Entity, shall stand in the same position under the
provisions of this Section 14.12 with respect to
the resulting or surviving Business Entity as he
or she would have with respect to such constituent
Business Entity if its separate existence had
continued.
(g) For purposes of this Section 14.12, references
to "other enterprise" shall include employee
benefit plans; references to "fine" shall include
any excise tax assessed on a person with respect
to an employee benefit plan; references to
"serving at the request of the Company" shall
include any service as a member, manager, trustee,
director, officer, employee or agent of the
Business Entity that imposes duties on, or
involves services by, such member, manager,
director, officer, employee, or agent with respect
to an employee benefit plan, its participants, or
beneficiaries; and masculine references shall
include the feminine.
Section 14.13. Location of Records. The Company shall not
be required to keep the records and documents specified in
Section 86.241 of the Nevada law applicable to limited liability
companies at its office in Nevada.
Page 26 of 30 Xxxxxxxxxx.xxx Operating Agreement
[The following page is the Signature Page]
Page 27 of 30 Xxxxxxxxxx.xxx Operating Agreement
SIGNATURE PAGE OF OPERATING AGREEMENT
OF XXXXXXXXXX.XXX. LLC
DATE INITIAL MEMBERS
---- ---------------
April 19, 2000 Covenant Transport, Inc.
By: Xxxxx X. Xxxxxx
Chairman, President & CEO
April 19, 2000 X.X. Xxxx Transport Services, Inc.
By: Xxxxx Xxxxxxxx
Chairman
April 19, 2000 M.S. Carriers, Inc.
By: Xxxxxxx X. Xxxxxxx
Chairman, President & CEO
April 19, 2000 Swift Transportation Co., Inc.
By: Xxxxx X. Xxxxx
Chairman, President & CEO
April 19, 2000 U.S. Xpress Enterprises, Inc.
By: Xxx X. Xxxxxx
Co-Chairman
April 19, 2000 Xxxxxx Enterprises, Inc.
By: Xxxxxxxx X. Xxxxxx
Chairman & CEO
XXXXXXXXXX.XXX, LLC
By: Xxxxx Xxxxxxxx
Tax Matters Manager
Page 28 of 30 Xxxxxxxxxx.xxx Operating Agreement
EXHIBIT A
to
Operating Agreement
of
Xxxxxxxxxx.xxx, LLC
CURRENT MEMBERS
Covenant Transport, Inc. Swift Transportation Co., Inc.
000 Xxxxxxxxxx Xxxxxxx 0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxxx, XX 00000 Xxxxxxx, XX 00000
X.X. Xxxx Transport Services, Inc U.S. Xpress Enterprises, Inc.
615 X.X. Xxxx Corporate Drive 0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000 Xxxxxxxxxxx, XX 00000
M.S. Carriers, Inc. Xxxxxx Enterprises, Inc.
3171 Directors Row 00000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000 Xxxxx, XX 00000
Page 29 of 30 Xxxxxxxxxx.xxx Operating Agreement
EXHIBIT B
to
Operating Agreement
of
Xxxxxxxxxx.xxx, LLC
CAPITAL
CONTRIBUTION
----------------------------------
MEMBER TYPE AGREED UNITS PERCENT
VALUE INTEREST
---------------------------------- ------------- ---------------- ----- --------
Covenant Transport, Inc. Cash & Assets To be determined 130 13%
X.X. Xxxx Transport Services, Inc. Cash & Assets To be determined 280 28%
M.S. Carriers, Inc. Cash & Assets To be determined 140 14%
Swift Transportation Co., Inc. Cash & Assets To be determined 160 16%
U.S. Xpress Enterprises, Inc. Cash & Assets To be determined 130 13%
Xxxxxx Enterprises, Inc. Cash & Assets To be determined 160 16%
----- ----
TOTAL 1,000 100%
Page 30 of 30 Xxxxxxxxxx.xxx Operating Agreement
