Exhibit 3.6
MORNING PRIDE MANUFACTURING L.L.C.
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
This Limited Liability Company Operating Agreement (AGREEMENT) is adopted
as of July 31, 1998, by Norcross Safety Products L.L.C., a Delaware limited
liability company (NSP), as the initial member (together with any subsequently
admitted member, the MEMBERS).
ARTICLE 1
ORGANIZATION
1.1. FORMATION. The Members have formed Morning Pride Manufacturing
L.L.C., a Delaware limited liability company (the COMPANY) pursuant to the
Delaware limited liability Company Act (the ACT). The Members authorized Xxxxxxx
X. Xxxxx to file the Company's Certificate of Formation which Certificate of
Formation was filed with the Delaware Secretary of State on July 27, 1998.
1.2. NAME. The Company shall operate under the name Morning Pride
Manufacturing L.L.C. or such other name as the Board of Managers from time to
time may select.
1.3. PRINCIPAL OFFICE. The principal office of the Company shall be
located at 0000 Xxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxxxxx 00000-0000 or such other
location as the Board of Managers may determine.
1.4. PURPOSES. The purposes of the Company are to carry on any or all
lawful businesses, purposes or activities for which limited liability companies
may be organized under the Act.
1.5. POWERS. The Company shall possess and may exercise all powers and
privileges granted by Delaware law to limited liability companies, and all
powers incidental thereto, to the extent necessary or convenient to the conduct
of its business, purposes or activities.
1.6. TERM. The Company commenced as a limited liability company upon the
filing of its Certificate of Formation in the office of the Secretary of State
of Delaware and shall continue in perpetuity unless terminated as provided
below.
1.7. DEFINITIONS. Defined words or phrases are in italics the first time
they appear. Except as otherwise specified, definitions are contained in Article
2.
ARTICLE 2
DEFINITIONS
The terms set forth below shall have the following meanings in this
Agreement:
ADJUSTED CAPITAL ACCOUNT DEFICIT means (for United States federal income
tax purposes) with respect to any Member the deficit balance, if any, in such
Member's Capital Account as of the end of any calendar year after giving effect
to the following adjustments:
(a) Credit to such Capital Account the sum of (i) any amount
which such Member is obligated to restore to such Capital Account pursuant
to any provision of this Agreement, plus (ii) an amount equal to such
Member's share of Company Minimum Gain as determined under Regulation
Section 1.704-2(g)(1) and such Member's share of Member Nonrecourse Debt
Minimum Gain as determined under Regulation Section 1.704-2(i)(5), plus
(iii) any amounts which such Member is deemed to be obligated to restore
pursuant to Regulation Section 1.704-1(b)(2)(ii)(c); and
(b) Debit to such Capital Account the items described in
Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6).
CAPITAL ACCOUNTS means the Capital Accounts of the Members established in
accordance with Section 6.1 hereof.
CAPITAL CONTRIBUTIONS means the amount of cash and the Asset Value of any
property other than cash contributed to the Company by a Member in accordance
with Article 4 hereof.
CODE means the Internal Revenue Code of 1986, as from time to time amended.
A reference to a Section of the Code shall refer to the corresponding provision
of any successor statute.
JOINDER AGREEMENT means an agreement substantially in the form of the
attached Schedule B.
PROFITS and LOSSES for any calendar year or other period means an amount
equal to the Company's taxable income for United States federal income tax
purposes for such year or period determined in accordance with Code Section
703(a) and the Regulations thereunder with the following adjustments:
(a) All items of income, gain, loss, and deduction of the Company
required to be stated separately shall be included in taxable income or
loss;
(b) Income of the Company exempt from United States federal
income tax shall be treated as taxable income;
(c) Expenditures of the Company described in Code Section
705(a)(2)(B) or treated as such expenditures under Regulation Section
1.704-1(b)(2)(iv)(i) shall be subtracted from taxable income; and
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(d) Items which are specially allocated under Section 63 of this
Agreement shall not be taken into account.
REGULATIONS means the United States federal income tax regulations,
including temporary (but not proposed) regulations, promulgated under the Code.
TRANSFER means any disposition; directly or indirectly, by operation of law
or otherwise, voluntarily or involuntarily, by intestacy, will, trust, or estate
distribution, or INTER VIVOS action, including any sale, gift, pledge,
encumbrance or other creation of a security interest, attachment, the creation
of any interest in the Company or distribution from the Company for the benefit
of creditors.
UNIT means an interest in the Company.
ARTICLE 3
MANAGEMENT
3.1. MANAGEMENT OF COMPANY AFFAIRS. The Company shall be managed by its
Board of Managers. Notwithstanding any other provisions of this Section 3.1, for
so long as NSP owns greater than 50% of the Units owned by Members, the Managers
of NSP shall serve as the Board of Managers of the Company. The initial Managers
shall be Xxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxx and Xxxxxx Xxxx, who will serve as
such until they are removed, resign or otherwise cease to act as managers of
NSP. The Members, at any time may, but need not, appoint an additional Manager
or Managers of the Company as provided below. A Manager may be selected or
removed at any time by Members owning more than 50% of the Units owned by
Members (including, for this purpose, such Units owned by the Manager to be
removed). A Manager may resign at any time by written notice to the Members. In
the event that a Manager is removed or otherwise ceases to be a Manager, the
Members owning more than 50% of the Units may, but need not, appoint a
successor. In the event all of the Managers are removed or otherwise cease to be
Managers, the Members owning more than 50% of the Units shall appoint at least
one new Manager of the Company. Except as specifically provided otherwise, an
action or decision of a majority of the Board of Managers shall be as effective
as if made by all Managers. Any action or decision may be taken by the Board of
Managers without a meeting if a consent in writing, setting forth the action or
decision so taken, is signed by all of the Managers. To facilitate management,
the signature of any Manager shall be sufficient to bind the Company and no
third party need inquire into the authority of a Manager to bind the Company.
The Managers and the Members agree not to take any action to bind the Company
except in accordance with this Agreement.
3.2. AUTHORITY OF MANAGERS. The Board of Managers is authorized on
behalf of the Company to do all things which, in its sole judgment, are
necessary or desirable to carry out the purposes of the Company, including:
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(a) To approve overall strategy as presented by officers of the
Company;
(b) To appoint officers of the Company;
(c) To expend Company funds or to borrow as the Board of Managers
deems appropriate for the conduct of the Company's business;
(d) To collect obligations payable to the Company and take any
lawful means for the recovery thereof by legal process or otherwise, and
to execute and deliver a satisfaction and release therefor, together with
the right to compromise any claim;
(e) To invest and reinvest available funds in investments that,
in the judgment of the Board of Managers, are consistent with the purposes
and objectives of the Company;
(f) To vote or give proxies to vote any stock or other voting
security, to exercise management rights as a general partner or as a
manager or member of a limited liability company, and to enter into or
oppose, alone or with others, voting trusts, mergers, consolidations,
foreclosures, liquidations, reorganizations or other changes in the
financial structure of any business organization or buy-sell, stock
restriction or stock redemption agreement;
(g) To lease, sell, exchange, pledge, encumber or grant an option
for the sale of all or any portion of the real and personal property of the
Company, at such rental, price or amount for each, and upon such other
terms, as the Board of Managers deems proper;
(h) To perform all of the Company's obligations under any
agreement entered into by the Company;
(i) To select and retain accountants, attorneys and other
advisers (including investment advisers and property managers) to provide
services for the Company;
(j) To execute, acknowledge and deliver any and all instruments
to effectuate the foregoing; and
(k) To take any other action deemed necessary or desirable by
the Board of Managers to carry out the purposes, affairs and business of
the Company.
3.3. OFFICERS. The Board of Managers may delegate its management
responsibility to Company officers as follows:
(a) OFFICERS. The officers of the Company shall be a president
and a secretary. The Board of Managers may also choose a chairman of the
board, one or more vice-chairmen, one or more vice presidents, a treasurer,
and one or more assistant secretaries and assistant treasurers, and such
additional officers and agents as the Board of Managers
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may deem necessary from time to time. Any two or more offices may be held
by the same person, except that no person shall serve simultaneously both
as president and as secretary or assistant secretary. Those officers chosen
by the Board of Managers shall have such authority and shall perform such
duties as the Board of Managers from time to time may prescribe.
(b) CHIEF EXECUTIVE OFFICER. The Board of Managers shall
designate the chief executive officer of the Company. The chief executive
officer shall be the principal executive officer of the Company and shall
in general supervise and control all of the business and affairs of the
Company, unless otherwise provided by the Board of Managers.
(c) ELECTIONS AND TERM OF OFFICE. The officers of the Company
shall be appointed by the Board of Managers. Each officer shall hold office
until a successor shall have been elected and qualified, until such
officer's earlier death or resignation, or until such officer's removal in
the manner provided below.
(d) REMOVAL. Any officer or agent of the Company may be removed
by the Board of Managers whenever in its judgment the best interests of the
Company would be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
(e) VACANCIES. A vacancy in any office of the Company because of
death, resignation, removal, disqualification or otherwise may be filled by
the Board of Managers.
3.4. COMPENSATION. The Managers and officers may be paid reasonable
compensation for services rendered to the Company and shall be reimbursed for
any expense properly incurred on behalf of the Company, all as determined by the
Board of Managers.
3.5. RELATED PARTY TRANSACTIONS. The Board of Managers may cause the
Company to obtain products or services from a Member or from entities
controlling, controlled by or under common control with a Member and to pay such
Member or entities reasonable fees for such products and services.
3.6. BOOKS AND RECORDS. The Company's books and records shall be
maintained by the Board of Managers at the principal office of the Company and
shall reflect clearly and accurately all transactions and other matters relative
to the Company's activities as are usually maintained for similar activities.
3.7. TAX MATTERS PARTNER. NSP shall be the Company's Tax Matters Partner
as defined in Code Section 6231(a)(7). The Board of Managers at any time may
appoint a new Tax Matters Partner who shall be a Member and who shall act at the
direction of the Board of Managers.
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3.8. ACCOUNTING CONVENTIONS. The Company shall keep its accounting
records and shall report its income for income tax purposes on a calendar year
basis using such method of accounting as the Board of Managers shall determine.
ARTICLE 4
CAPITAL CONTRIBUTIONS
4.1. COMPANY UNITS. The capital of the Company shall be divided into
Units, which shall not be evidenced by certificates issued by the Company.
4.2. INITIAL CAPITAL CONTRIBUTIONS. The initial Members shall make
Capital Contributions and receive Units as shown on Schedule A.
4.3. ADMISSION OF NEW MEMBERS. A person may be admitted as a new Member
with the approval of all Members and completion of the procedures of paragraph
4.4, on making the appropriate capital contribution and signing a Joinder
Agreement. Notwithstanding the foregoing, Xxxxxxx and Xxxx Xxxxxxxx (the
GRANTEES), as grantees under that certain Option Agreement, dated as of July 31,
1998, between the Company and the Grantees may be admitted as Members upon the
exercise of their option to purchase Units under such Agreement.
4.4. ADDITIONAL CAPITAL CONTRIBUTIONS. No Member shall be required to
make any Capital Contribution in addition to that Member's initial Capital
Contribution. If the Board of Managers determines that an additional Capital
Contribution is required and no new Member is to be admitted in exchange for a
Capital Contribution under paragraph 4.3, each Member shall have the right to
contribute the same proportion of the additional capital as the number of the
Member's Units bears to the total number of Units owned by each Member who
exercises the right to contribute. The Company shall issue an appropriate number
of Units in exchange for such contribution.
ARTICLE 5
DISTRIBUTIONS
The Company shall make distributions to the Members as determined from time
to time by the Board of Managers.
ARTICLE 6
ALLOCATIONS
6.1. CAPITAL ACCOUNTS. A Capital Account shall be maintained for each
Member in accordance with Regulation Sections 1.704-1(b) and 1.704-2 and to
which the following provision applies to the extent not inconsistent with such
Regulation:
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(a) There shall be credited to each Member's Capital Account (i)
such Member's Capital Contributions; (ii) such Member's distributive share
of Profits; (iii) any items of income or gain specially allocated to such
Member under Section 6.3 of this Agreement; and (iv) the amount of any
Company liabilities (determined as provided in Code Section 752(c) and the
Regulations thereunder) assumed by such Member or to which property
distributed to such Member is subject;
(b) There shall be debited to each Member's Capital Account (i)
the amount of money and the Asset Value of any property distributed or paid
as a redemption to such Member pursuant to this Agreement; (ii) such
Member's distributive share of Losses; (iii) any items of expense or loss
which are specially allocated to such Member under Section 6.3 of this
Agreement, and (iv) the amount of liabilities (determined as provided in
Code Section 752(c) and the Regulations thereunder) of such Member assumed
by the Company or to which property contributed to the Company by such
Member is subject; and
(c) The Capital Account of any transferee shall include the
appropriate portion of the Capital Account of the Member from which the
transferee's Units were obtained.
The Members intend the Capital Accounts be maintained in accordance with
Regulation Sections 1.704-1(b) and 1.704-2, and to accomplish that purpose the
Board of Managers is authorized to modify the manner in which the Capital
Accounts are maintained and adjustments thereto are computed, and to make any
appropriate adjustments thereto, so that Capital Account balances will be
maintained consistent with such Regulation, provided that such modifications and
adjustments will not materially affect the amount distributed to any Member upon
dissolution of the Company.
6.2. Allocations of Profits and Losses.
(a) ALLOCATION OF PROFITS. Profits for a period shall be
allocated ratably to the holders of Units.
(b) ALLOCATION OF LOSSES. Losses for a period shall be allocated
ratably to the Unit holders.
(c) AUTHORITY TO VARY ALLOCATIONS. The Board of Managers has the
authority to vary these allocations to the extent necessary to comply with
federal income tax laws.
6.3. Special Allocations.
(a) LIMITATION ON LOSSES. Notwithstanding any other provision of
this Agreement, Losses allocated to any Member pursuant to this Agreement
shall not exceed the maximum amount of Losses that may be allocated without
causing such Member to have an Adjusted Capital Account Deficit at the end
of the tax year for which the allocation is made. Any Loss that cannot be
allocated to a Member as a result of the
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limitation contained in this subsection (a) shall be allocated to the other
Members to the extent possible; provided, however, that the Board of
Managers shall have the authority to specifically allocate items of Company
income and gain for subsequent years in an amount and manner sufficient to
offset the Loss so allocated to the other Members.
(b) MINIMUM GAIN CHARGEBACK. Notwithstanding any other provision
of this Article 6, if there is a net decrease in Company Minimum Gain (as
defined in Regulation Section 1.704-2(d)) during any Company tax year, then
each Member shall be allocated such amount of income and gain for such year
(and subsequent years, if necessary) determined under and in the manner
required by Regulation Section 1.704-2(g)(1) and (g)(3) as is necessary to
meet the requirements for a minimum gain chargeback as provided in
Regulation Section 1.704-2(f).
(c) MEMBER NONRECOURSE DEBT MINIMUM GAIN CHARGEBACK.
Notwithstanding any other provision of this Article 6 except Section
6.3(b), if there is a net decrease in Member Nonrecourse Debt Minimum Gain
(as determined in accordance with Regulation Section 1.704-2(i)(5))
attributable to a Member Nonrecourse Debt (as defined in Regulation Section
1.704-2(b)(4)) during any tax year, any Member who has a share of the
Member Nonrecourse Debt Minimum Gain attributable to such Member
Nonrecourse Debt determined in accordance with Regulation Section
1.704-2(i)(5) shall be allocated such amount of income and gain for such
year (and subsequent years, if necessary) determined under and in the
manner required by Regulation Section 1.704-2(i)(4) as is necessary to meet
the requirements for a minimum gain chargeback as is provided in that
Regulation.
(d) QUALIFIED INCOME OFFSET. If a Member unexpectedly receives
any adjustment, allocation or distribution described in Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain shall
be specially allocated to such Member in an amount and manner sufficient to
eliminate, to the extent required by the Regulations, the Adjusted
Capital Account Deficit of such Member as quickly as possible, provided
that an allocation pursuant to this subsection (c) 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 6.3 of
this Agreement tentatively have been made as if this subsection (d) were
not in this Agreement.
(e) CODE SECTION 754 ADJUSTMENT. To the extent that an adjustment
to the Basis of any asset pursuant to Code Section 734(b) or Code Section
743(b) is required to be taken into account in determining Capital Accounts
as provided in Regulation Section 1.704-1(b)(2)(iv)(m), the adjustment
shall be treated (if an increase) as an item of gain or (if a decrease) as
an item of loss, and such gain or loss shall be allocated to the Members
consistent with the allocation of the adjustment pursuant to such
Regulation.
(f) NONRECOURSE DEDUCTIONS. Nonrecourse Deductions (as determined
under Regulation Section 1.704-2(c)) for any tax year shall be allocated to
the Members ratably in accordance with their Unit ownership.
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(g) MEMBER NONRECOURSE DEDUCTIONS. Any Member Nonrecourse
Deduction (as defined in Regulation Section 1.704-2(i)(2)) shall be
allocated pursuant to Regulation Section 1.704-2(i) to the Member who bears
the economic risk of loss with respect to the Member Nonrecourse Debt to
which it is attributable.
(h) PURPOSE AND APPLICATION. The purpose and the intent of the
special allocations provided for in this Section 6.3 are to comply with the
provisions of Regulations Section 1.704-1(b) and Section 1.704-2, and such
special allocations are to be made so as to accomplish that result.
However, to the extent possible, the Board of Managers in allocating items
of income, gain, loss, or deduction among the Members shall take into
account the special allocations in such a manner that the net amount of
allocations to each Member shall be the same as such Member's distributive
share of Profits and Losses would have been had the events requiring the
special allocations not taken place. The Board of Managers shall apply the
provisions of this Section 6.3 in whatever order they reasonably believe
will minimize any economic distortion that otherwise might result from the
application of the special allocations.
(i) TAX ALLOCATIONS. The Members' distributive shares of all
items of Company income, gain, loss, and deduction are the same as their
distributive shares of Company Profits and Losses.
ARTICLE 7
TRANSFERS AND WITHDRAWALS
7.1. TRANSFERS TO MEMBERS. A Unit may be Transferred to any Member at
any time.
7.2. REGISTERED TRANSFERS TO OTHERS. Any unit may be Transferred to any
transferee other than a Member only if the transferor first offers to the
Company and then to the other Members the right to purchase all such Units
proposed to the Transferred (OFFERED UNITS) at the price and the terms set forth
below:
(a) THIRD PARTY SALES. If the proposed Transfer is a sale to a
person or an entity that is not a Member, the transferor shall provide
written notice (ORIGINAL NOTICE) to the Company of the identity of the
proposed transferee and the date, price and terms of the proposed Transfer
at least 30 days before the date of the proposed sale. The Board of
Managers then may cause the Company to purchase all, but not less than all,
of the Offered Units on the terms and conditions set forth below, or,
within 15 days of receiving the Original Notice, provide all the Members
written notice of their option to purchase among any one or more of the
Members all, but not less than all, of the Offered Units and the terms and
conditions of sale. The Company or the Members may exercise their options
to purchase all, but not less than all, of the Offered Units by giving
written notice to the transferor within 25 days after the Company receives
the Original Notice. If the Members offer to purchase more than the Offered
Units, the Offered Units shall be
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purchased by each purchasing Member in the same proportion as that
Member's number of Units of the same class, if any, otherwise as that
Member's Capital Account balance, bears to the aggregate number of Units of
the same class owned by, or to the aggregate Capital Account balances of,
as the case may be, the Members exercising their options to purchase under
this subparagraph, or as they otherwise may agree. The purchase of the
Offered Units shall be on the same terms and conditions of the proposed
sale and shall occur within 120 days of the Original Notice.
(b) OTHER TRANSFERS. If the proposed Transfer is an involuntary
conveyance for any reason, including as a result of the bankruptcy,
liquidation, dissolution or death of a Member, the transferor (or the
personal representative, in the case of decedent, or the Board of Managers
on the transferor's behalf) shall provide written notice (ORIGINAL NOTICE)
to the Company of the identity of the proposed transferee and the date and
terms of the proposed Transfer. Within 45 days after receipt of the
Original Notice, the Board of Managers shall determine the fair market
value of the Offered Units as described in subparagraph 7.2(c) and shall
give the Members written notice thereof (VALUE NOTICE). The Board of
Managers then may cause the Company to elect to purchase all, but not less
than all, of the Offered Units on the terms and conditions set forth below,
or, within 15 days after the date of the Value Notice, provide all the
Members written notice of their option to purchase among any one or more of
the Members all, but not less than all, of the Offered Units at the Units
fair market value. The Company or the Members may exercise their options to
purchase the Offered Units by giving written notice to the transferor
within 45 days after the date of the Value Notice. If the Members offer to
purchase more than the Offered Units, the Offered Units shall be purchased
by each purchasing Member in the same proportion as that Member's number of
Units of the same class, if any, otherwise as that Member's Capital Account
balance, bears to the aggregate number of Units of the same class owned by,
or to the aggregate Capital Account balances of, as the case may be, the
Members exercising their options to purchase under this subparagraph, or as
they otherwise may agree. The purchase price shall be the fair market value
of the Units determined as provided in subparagraph 7.2(c) to be paid
within 120 days of the Original Notice.
(c) FAIR MARKET VALUE. The fair market value of a Unit for
purposes of this Agreement shall be the amount agreed upon between the
holder and the Company or, in the absence of agreement, the amount
determined by an independent appraiser selected by the Company and
reasonably acceptable to the holder. The fees of any such independent
appraiser shall be paid by the Company.
(d) COMPLETION OF PROPOSED TRANSFER. If the options described
above are not exercised in full, the proposed Transfer of the Units may
occur on the date and on the same terms and conditions as set forth in the
Original Notice. Subsequent Transfers of those Units shall be subject to
the provisions of this Article 7.
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(e) RIGHTS OF TRANSFEREES. A transferee of Units who is not a
Member shall become a Member only with the approval of all Members and on
signing a Joinder Agreement.
7.3. SECURITIES LAW TRANSFER RESTRICTIONS. All Members acknowledge that
the Units have not been registered under the Securities Act of 1973, as amended
(the 1933 ACT), in reliance on applicable exemptions. Therefore, the Members
hereby agree that Units shall be nontransferable, except in compliance with the
1933 Act and applicable state securities laws, and any Transfer not in
compliance shall be void. As an additional condition precedent to the Transfer
of any Units, the Board of Managers may require an opinion of counsel
satisfactory to the Board of Managers that such Transfer will be made in
compliance with the 1933 Act and applicable state securities laws and such
transferor shall be responsible for paying any attorneys' fees incurred in
connection with the opinion.
7.4. UNAUTHORIZED TRANSFERS. The transferor shall be deemed to have
provided the Original Notice as described in subparagraph 7.2 on the date on
which the Company receives notice of any Transfer not permitted under this
Agreement.
7.5. RIGHTS OF ASSIGNEES. A transferee of Units who is not admitted as a
Member shall have only the rights of an assignee. An assignee of Units who is
not a Member shall not be entitled to interfere in the management of the
Company's affairs, vote, receive any information of Company transactions or
inspect the Company books. The assignee shall merely be entitled to receive, in
accordance with the terms of the assignment, the distributions to which the
assignor otherwise would be entitled.
ARTICLE 8
RIGHTS AND OBLIGATIONS OF MEMBERS
8.1. LIABILITY OF MEMBERS. Except as otherwise agreed with creditors, no
Member, as such, shall be liable for the satisfaction of Company obligations.
8.2. MANAGEMENT RESPONSIBILITY. Except as otherwise specifically
provided, all management responsibility is vested in the Board of Managers. No
Member, as such, shall take part in the management of the activities of the
Company.
8.3. MEMBERS' MEETING. There shall be at least one meeting of the
Members each year, which shall be scheduled by the Managers (and which may be
held jointly with a meeting of the members of NSP). Additional meetings of the
Members shall be called by the Managers on the request of Members owning Units
representing, in the aggregate, not less than twenty-five percent (25%) of the
total Units owned by Members. In addition to the Members, holders of instruments
convertible into or exercisable for Units shall be invited to attend (but not
vote at) the meetings of Members. Written notice of any meeting of the Members
shall be given, personally or by mail, to each Member and invitee not less than
three (3) days prior to the
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meeting, except as otherwise required by the Act. Such notice shall state the
place, date and hour of the meeting.
8.4. INDEMNIFICATION.
(a) Any person who was or is a party, or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an
action by or in the right of the Company) by reason of the fact that such
person 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 member,
manager, director, officer, employee or agent of another limited liability
company, corporation, partnership, joint venture, trust or other
enterprise, shall be indemnified by the Company against expenses (including
attorney's fees), judgments, fines, and amounts paid in settlement actually
and reasonably incurred by such person in connection with such action, suit
or proceeding, if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of NOLO CONTENDERE or its
equivalent, shall not, of itself, create a presumption that (i) such person
did not act in good faith and in a manner which such person reasonably
believed to be in or not opposed to the best interests of the Company or
(ii) with respect to any criminal action or proceeding, had reasonable
cause to believe that such person's conduct was unlawful.
(b) 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
action or suit by or in the right of the Company to procure a judgment in
its favor by reason of the fact that such person is or was Manager, Member,
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 against expenses (including
attorney's fees) actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit if such
person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the Company provided that
no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of such person's duty to the
Company, unless, and only to the extent that, the court in which the action
or suit was brought shall determine upon application that, despite the
adjudication of liability, but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper.
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(c) To the extent that a Manager, Member, officer, employee or
agent of the Company has been successful on the merits or otherwise in the
defense of any action, suit or proceeding referred to in subparagraphs
8.4(a) and 8.4(b) above, or in defense of any claim, issue or matter
therein, such person shall be indemnified against expenses (including
attorney's fees) actually and reasonably incurred by such person in
connection therewith.
(d) Any indemnification under subparagraphs 8.4(a) and 8.4(b)
above (unless ordered by a court) shall be made by the Company only as
authorized in the specific case upon a determination that indemnification
of the Manager, Member, officer, employee or agent is proper in the
circumstances because such person has met the applicable standard of
conduct set forth in such subparagraphs. Such determination shall be made
by a vote of the Members owning a majority of the Units.
(e) Expenses incurred in defending a civil or criminal action,
suit or proceeding may be paid by the Company in advance of the final
disposition of such action, suit or proceeding as authorized by the Members
in the specific case upon receipt of an undertaking by or on behalf of the
Manager, Member, officer, employee or agent to repay such amount unless it
shall ultimately be determined that such person is entitled to be
indemnified by the Company as authorized in this paragraph 8.4.
(f) The indemnification provided by this paragraph 8.4 shall not
be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any agreement, or otherwise.
ARTICLE 9
COMPANY DISSOLUTION AND LIQUIDATION
9.1. DISSOLUTION OF COMPANY. Unless the Company's shall have been sooner
dissolved in accordance with the provisions of the Act, the Company shall
dissolve on the earlier of:
(a) the ninetieth (90th) day following the bankruptcy, death,
dissolution, expulsion, incapacity or withdrawal of any Member, unless at
least a majority of the capital interests and a majority of the interests
in profits of all surviving Members are sooner voted in favor of the
continuation of the Company; or
(b) December 31, 2035.
9.2. DISSOLUTION PROCEDURES.
(a) On dissolution of the Company, the Board of Managers, or, if
none, the remaining Members, or, if none, a liquidator selected by the
assignees owning more than 50% of the outstanding Units, shall immediately
commence to wind up the Company's
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affairs. The holders shall continue to share profits and losses during the
period of liquidation in accordance with Article 6 hereof.
(b) Following the payment of or provision for all debts and
liabilities of the Company and all expenses of liquidation, and subject to
the right of the Board of Managers or the Members or the liquidator, as the
case may be, to set up such cash reserves as they decide shall be
reasonably necessary for any contingent or unforeseen liabilities or
obligations of the Company, the proceeds of the liquidation and any other
funds (or other remaining assets) of the Company shall be distributed, in
cash or in kind or partly in each, to the Members as provided in Article 5
hereof.
(c) Each Member shall look solely to the assets of the Company
for all distributions with respect to the Company and its Capital
Contribution thereto and share of profits or losses thereof, and shall have
no recourse therefor (upon dissolution or otherwise) against any other
Member.
(d) Upon the completion of the liquidation of the Company and the
distribution of all Company funds and other assets, the Company shall
terminate and the Board of Managers, or, if none, the Members shall have
the authority to file a Certificate of Cancellation with the Delaware
Secretary of State as well as any and all other documents required to
effectuate the dissolution and termination of the Company.
ARTICLE 10
MISCELLANEOUS
10.1. WAIVER OF PARTITION. Each Member hereby waives any right to seek a
court decree of dissolution of partition or to seek the appointment by a court
of a liquidator for the Company.
10.2. RIGHT TO DISTRIBUTION IN KIND. No Member shall have any right to
demand or receive any particular property on liquidation of the Company or to
demand the return of the Member's Capital Contribution to the Company. The
property to be received by any Unit holder on liquidation of the Company shall
be determined by the Board of Managers.
10.3. INTEGRATED AGREEMENT. This Agreement constitutes the entire
agreement among the parties. It supersedes any prior agreements, negotiations or
understandings among them, and it may be amended only as provided in Article 11.
10.4. BINDING AGREEMENT. This Agreement shall bind the successors and
assigns of the parties hereto.
10.5. GOVERNING LAW. Except as otherwise specifically provided, Delaware
law shall govern this Agreement and all questions arising hereunder.
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10.6. NOTICES. All notices, offers and acceptances and other
communications hereunder required to be in writing shall be delivered in person,
by telecopy with confirmation or by overnight delivery service with receipt, or
shall be deposited in the United States Mail, postage prepaid, by certified or
registered mail, return receipt requested, to the address shown on Schedule A. A
communication shall be deemed received: (i) if by personal delivery, on the date
delivered, (ii) if by telecopy, on the date confirmed, (iii) if by overnight
delivery service, on the date delivered and (iv) if by mail, five days after
mailing.
10.7. POWER OF ATTORNEY. Each of the Members does hereby irrevocably
appoint the chief executive officer of the Company as the Member's attorney with
full power and authority for such Member to execute, swear to, acknowledge,
deliver and file or record in the appropriate public offices (i) all Articles,
certificates, and other instruments (including counterparts of this Agreement),
and all amendments thereto which the Board of Managers deems appropriate to
qualify, or to the continue the qualification of, the Company as a limited
liability company in any jurisdiction in which the Company has operations, (ii)
all instruments that the Board of Managers deems appropriate to reflect any
modification of this Agreement, (iii) all conveyances and other instruments that
the Board of Managers deems appropriate to reflect the dissolution and winding
up of the Company, and (iv) all forms of consent that may be appropriate to
admit a new Member and all other instruments that the Board of Managers deems
appropriate relating to the admission of a new Member. The foregoing Power of
Attorney is irrevocable and a power coupled with an interest and shall survive
the death, dissolution or legal termination of a Member.
10.8. COUNTERPARTS. This Agreement may be executed in multiple
counterparts.
ARTICLE 11
AMENDMENTS
This Agreement shall not be amended to change any Unit holder's share of
liabilities or distributions without the consent of such holder. Subject to the
preceding sentence, this Agreement may be amended with the consent of Members
owning more than 50% of the Units. The Board of Managers shall amend Schedule A
of this Agreement to reflect admissions and withdrawals of Members, Transfers of
Units, Capital Contributions (including tax basis and agreed value) and
redemptions of Units.
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This Agreement is executed as of the date first written above by the
Members.
NORCROSS SAFETY PRODUCTS L.L.C.
/s/ Xxxxxx X. Xxxxxxxx
-------------------------------
By: Xxxxxx X. Xxxxxxxx
Its: Chief Executive officer
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SCHEDULE A
INITIAL CAPITALIZATION
Initial Capital Contribution
----------------------------
Member
------ Agreed Value Units
------------ -----
Norcross Safety Products L.L.C. $ 2,000,000 333,333
