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EXHIBIT 10.1
LIMITED LIABILITY COMPANY AGREEMENT
OF
TMCT, LLC
Dated as of August 8, 1997
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ARTICLE I DEFINED TERMS...............................................1
SECTION 1.1 DEFINITIONS................................................1
SECTION 1.2 HEADINGS...................................................6
ARTICLE II FORMATION AND TERM.........................................6
SECTION 2.1 FORMATION..................................................6
SECTION 2.2 NAME.......................................................6
SECTION 2.3 TERM.......................................................7
SECTION 2.4 REGISTERED AGENT AND OFFICE................................7
SECTION 2.5 PRINCIPAL PLACE OF BUSINESS................................7
SECTION 2.6 QUALIFICATION IN OTHER JURISDICTIONS.......................7
ARTICLE III PURPOSE AND POWERS OF THE COMPANY..........................7
SECTION 3.1 PURPOSE....................................................7
SECTION 3.2 POWERS OF THE COMPANY......................................7
SECTION 3.3 LIMITATIONS ON COMPANY POWERS..............................9
SECTION 3.4 SPECIFIC AUTHORIZATION.....................................9
ARTICLE IV CAPITAL CONTRIBUTIONS, INTERESTS AND CAPITAL ACCOUNTS.....9
SECTION 4.1 CAPITAL CONTRIBUTIONS......................................9
SECTION 4.2 MEMBER'S INTEREST..........................................9
SECTION 4.3 CAPITAL ACCOUNTS..........................................10
ARTICLE V MEMBERS......................................................11
SECTION 5.1 POWERS OF MEMBERS.........................................11
SECTION 5.2 REIMBURSEMENTS............................................11
SECTION 5.3 PARTITION.................................................11
SECTION 5.4 ASSIGNMENTS BY AND WITHDRAWAL OF MEMBERS..................11
ARTICLE VI MANAGEMENT.................................................13
SECTION 6.1 MANAGEMENT OF THE COMPANY.................................13
SECTION 6.2 POWERS OF THE MANAGING MEMBER.............................13
SECTION 6.3 INVESTMENT COMMITTEE......................................14
SECTION 6.4 TRUSTS PORTFOLIO COMMITTEE................................15
SECTION 6.5 ACTIONS REQUIRING MUTUAL AGREEMENT........................16
SECTION 6.6 RELIANCE BY THIRD PARTIES.................................16
SECTION 6.7 PROPERTIES COMMITTEE......................................17
ARTICLE VII MEETINGS OF MEMBERS........................................18
SECTION 7.1 MEETINGS OF THE MEMBERS...................................18
SECTION 7.2 PLACE OF MEETINGS; PARTICIPATION BY TELEPHONE.............19
SECTION 7.3 NOTICE OF MEETINGS........................................19
SECTION 7.4 ACTION WITHOUT MEETING....................................19
ARTICLE VIII ALLOCATIONS...............................................19
SECTION 8.1 FIXED INCOME PORTFOLIO....................................19
SECTION 8.2 PROPERTIES................................................20
SECTION 8.3 TMC COMMON................................................20
SECTION 8.4 TMC PREFERRED.............................................21
SECTION 8.5 EQUITY PORTFOLIO..........................................22
SECTION 8.6 TRUSTS PORTFOLIO..........................................23
SECTION 8.7 ALLOCATED EXPENSES........................................23
SECTION 8.8 TMC MEMBERS AND TRUSTS....................................23
SECTION 8.9 REGULATORY ALLOCATIONS....................................23
SECTION 8.10 TAX ALLOCATIONS; SECTION 704(C) OF THE CODE..............24
ARTICLE IX DISTRIBUTIONS...............................................25
SECTION 9.1 PORTFOLIO AND REPLACEMENT PORTFOLIO.......................25
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SECTION 9.2 PROPERTIES................................................25
SECTION 9.3 TMC SHARES................................................25
SECTION 9.4 TRUSTS PORTFOLIO..........................................25
SECTION 9.5 TMC MEMBERS AND TRUSTS....................................26
SECTION 9.6 LIQUIDATING DISTRIBUTIONS.................................26
SECTION 9.7 OTHER DISTRIBUTIONS.......................................26
SECTION 9.8 LIMITATION ON DISTRIBUTIONS...............................26
ARTICLE X BOOKS AND RECORDS...........................................27
SECTION 10.1 BOOKS, RECORDS AND FINANCIAL STATEMENTS..................27
SECTION 10.2 ACCOUNTING METHOD........................................27
SECTION 10.3 AUDIT....................................................28
ARTICLE XI TAX MATTERS................................................28
SECTION 11.1 TAX MATTERS MEMBER.......................................28
SECTION 11.2 RIGHT TO MAKE SECTION 754 ELECTION.......................28
SECTION 11.3 TAXATION AS PARTNERSHIP..................................28
ARTICLE XII LIABILITY, EXCULPATION AND INDEMNIFICATION................29
SECTION 12.1 LIABILITY.................................................29
SECTION 12.2 EXCULPATION..............................................29
SECTION 12.3 DUTIES AND LIABILITIES OF COVERED PERSONS................29
SECTION 12.4 INDEMNIFICATION..........................................30
SECTION 12.5 EXPENSES.................................................30
SECTION 12.6 INSURANCE................................................30
SECTION 12.7 OUTSIDE BUSINESS.........................................30
ARTICLE XIII DISSOLUTION, LIQUIDATION AND TERMINATION..................31
SECTION 13.1 DISSOLUTION...............................................31
SECTION 13.2 NOTICE OF DISSOLUTION....................................31
SECTION 13.3 LIQUIDATION..............................................31
SECTION 13.4 TERMINATION..............................................31
SECTION 13.5 CLAIMS OF THE MEMBERS....................................31
ARTICLE XIV REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MEMBERS...32
SECTION 14.1 REPRESENTATIONS..........................................32
SECTION 14.2 CONFIDENTIALITY..........................................32
ARTICLE XV MISCELLANEOUS..............................................33
SECTION 15.1 AMENDMENTS...............................................33
SECTION 15.2 NOTICES..................................................33
SECTION 15.3 FAILURE TO PURSUE REMEDIES...............................34
SECTION 15.4 CUMULATIVE REMEDIES......................................34
SECTION 15.5 BINDING EFFECT...........................................34
SECTION 15.6 INTERPRETATION...........................................34
SECTION 15.7 SEVERABILITY.............................................34
SECTION 15.8 COUNTERPARTS.............................................34
SECTION 15.9 INTEGRATION..............................................34
SECTION 15.10 GOVERNING LAW...........................................34
SECTION 15.11 CONSENT TO JURISDICTION AND FORUM SELECTION.............34
SECTION 15.12 ATTORNEYS' FEES.........................................35
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LIMITED LIABILITY COMPANY AGREEMENT
OF
TMCT, LLC
This Limited Liability Company Agreement of TMCT, LLC (the "Company")
is made as of August 8, 1997 (this "Agreement"), by and among The Times Mirror
Company, a Delaware corporation ("TMC"), Candle Holdings Corporation, a Delaware
corporation ("Sub 1"), Fortify Holdings Corporation, a Delaware corporation
("Sub 2"), Xxxxxxx Xxxxxx & Company, Incorporated, a New York corporation,
Xxxxx-Year Book, Inc., a Missouri corporation, Newsday, Inc., a New York
corporation, The Hartford Courant Company, a Connecticut corporation, and The
Baltimore Sun Company, a Maryland corporation (collectively, with TMC, Sub 1 and
Sub 2, the "TMC Members"), Xxxxxxxx Trust No. 1 ("Trust 1") and Xxxxxxxx Trust
No. 2 ("Trust 2"), as Members of the Company.
WHEREAS, Trust 1, Trust 2 and the TMC Members wish to form a limited
liability company pursuant to the Delaware Limited Liability Company Act, 6 Del.
C. Section 18-101, et seq., as amended from time to time (the "Delaware Act"),
by filing a Certificate of Formation of the Company with the office of the
Secretary of State of the State of Delaware and entering into this Agreement.
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Members hereby agree as
follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1 DEFINITIONS. Unless the context otherwise requires, the
terms defined in this Article I shall, for the purposes of this Agreement, have
the meanings herein specified.
"Affiliate" means with respect to a specified Person, any
Person that directly or indirectly controls, is controlled by, or is under
common control with, the specified Person, including (A) all lineal descendants
and spouses of such Person; (B) all trusts for the benefit of such Person or any
person described in clause (A) and the trustees of such trusts; (C) all legal
representatives of such Person or any person or trust described in clauses (A)
or (B); (D) all partnerships, corporations, limited liability companies or other
entities controlling, controlled by or under common control with such Person or
any person, trust or other entity described in clauses (A), (B) or (C).
"Control" for these purposes shall mean the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of any
person or entity, whether through the ownership of voting securities, by
contract, or otherwise.
"Agreement" means this Limited Liability Company Agreement of
the Company, as amended, modified, supplemented or restated from time to time.
"Allocated Expenses" means those expenses of the Company that
are not directly attributable to the TMC Shares, the Portfolio, the Replacement
Portfolio or the Properties.
"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:
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(i) 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
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(ii) Debit to such Capital Account the items described in 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) of
the Treasury Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Treasury
Regulations and shall be interpreted consistently therewith.
"Capital Account" means, with respect to any Member, the
account maintained for such Member in accordance with the provisions of Section
4.3 hereof.
"Capital Contribution" means, with respect to any Member, the
aggregate value of cash and the initial Gross Asset Value of any property (other
than cash) contributed to the Company pursuant to Section 4.1 which is set forth
in Schedule A attached hereto.
"Certificate" means the Certificate of Formation of the
Company, in the form attached hereto as Exhibit A, and any and all amendments
thereto and restatements thereof filed on behalf of the Company with the office
of the Secretary of State of the State of Delaware pursuant to the Delaware Act.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any corresponding federal tax statute enacted after the
date of this Agreement.
"Company" means TMCT, LLC, the limited liability company
formed under and pursuant to the Delaware Act and this Agreement.
"Contribution Agreement" means that Contribution Agreement
dated as of August 8, 1997 among the Members pursuant to which they have agreed
to contribute cash, TMC Shares and Properties to the Company and have agreed
upon the initial Gross Asset Value of contributions other than cash.
"Covered Person" means (i) any Member, any Affiliate of a
Member or any officers, directors, trustees, shareholders, beneficiaries,
partners, employees, representatives or agents of a Member or its respective
Affiliates, (ii) any officer of the Company, or (iii) any employee or agent of
the Company or its Affiliates who is designated as a Covered Person by the
Managing Member.
"Delaware Act" means the Delaware Limited Liability Company
Act, 6 Del. C. Section 18-101, et seq., as amended from time to time.
"Depreciation" means, for each Fiscal Year or other period, an
amount equal to the depreciation, amortization or other cost recovery deduction
allowable under the Code with respect to an asset for such Fiscal Year or other
period; provided, however, that if the Gross Asset Value of an asset differs
from its adjusted basis for federal income tax purposes at the beginning of such
Fiscal Year or other period, Depreciation shall be an amount that bears the same
ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization or other cost recovery deduction with respect to such
asset for such Fiscal Year or other period bears to such beginning adjusted tax
basis; and provided further, that if the federal income tax depreciation,
amortization or other cost recovery deduction for such Fiscal Year or
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other period is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the Managing
Member.
"Equity Portfolio" means the assets of the Portfolio other
than debt obligations or instruments.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute thereto.
"Fiscal Year" means (i) the period commencing upon the
formation of the Company and ending on December 31, 1997, (ii) any subsequent
twelve (12) month period commencing on January 1 and ending on December 31, or
(iii) any portion of the period described in clause (ii) of this sentence for
which the Company is required to allocate items of Company income, gain,
expense, loss or deduction pursuant to Article VIII hereof.
"Fixed Income Portfolio" means the assets of the Portfolio
consisting of debt obligations or instruments.
"Gross Asset Value" means, with respect to any asset, such
asset's adjusted basis for federal income tax purposes, except as follows:
(a) the initial Gross Asset Value of any asset
contributed by a Member to the Company shall be the gross fair market
value of such asset, as agreed among the Members in the Contribution
Agreement and set forth on Schedule A hereto;
(b) the Gross Asset Value of all Company assets shall
be adjusted to equal their respective gross fair market values, as
determined by Mutual Agreement, as of the following times: (i) the
distribution by the Company to a Member of more than a de minimis
amount of Company assets as consideration for part or all of such
Member's Interest; (ii) the contribution to the Company by a Member of
more than a de minimis amount of assets in exchange for an Interest;
and (iii) the liquidation of the Company within the meaning of Treasury
Regulation Section 1.704-1(b)(2)(ii)(g); and
(c) the Gross Asset Value of any Company asset
distributed to any Member shall be the gross fair market value of such
asset on the date of distribution, as determined by Mutual Agreement.
If the Gross Asset Value of an asset has been determined or
adjusted pursuant to paragraph (a) or paragraph (b) above, such Gross Asset
Value shall thereafter be adjusted by the Depreciation taken into account with
respect to such asset for purposes of computing items of income, gain, expense,
loss or deduction.
"Interest" means, with respect to any Member at any time, a
Member's limited liability company interest in the Company which represents a
Member's share of the items of income, gain, expense, loss or deduction of the
Company, as provided in Article VIII, and a Member's right to receive
distributions of the Company's assets, as provided in Article IX, including a
Member's right to any and all benefits to which such Member may be entitled as
provided in this Agreement, together with the obligations of such Member to act
in accordance with all of the terms and provisions of this Agreement and the
Delaware Act.
"Investment Committee" means the Investment Committee
appointed by the Members in accordance with Section 6.3.
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"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time and any successor statute thereto.
"Lease" means the lease pursuant to which TMC, as initial
lessee, leases from the Company real property contributed to the Company by TMC
or an Affiliate.
"Managing Member" means the Member appointed to manage the
affairs of the Company pursuant to Section 6.1, which initially shall be TMC.
The Managing Member shall be deemed to be a "manager" within the meaning of the
Delaware Act.
"Member" means one or more of Trust 1, Trust 2 or any of the
TMC Members individually, when acting in the capacity of each as a member of the
Company, and "Members" means Trust 1, Trust 2 and each of the TMC Members,
collectively, when acting in their capacities as members of the Company. For all
purposes of the Delaware Act, all Members shall constitute a single class or
group of members.
"Mutual Agreement" means the agreement of (i) TMC, or, if TMC
is no longer a Member, its Affiliates who are Members or, if no TMC Affiliate is
a Member, the Members holding a majority in interest, if any, of the Interests
initially held by the TMC Members, and (ii) (A) each of Trust 1 and Trust 2,
until the Trust Termination, (B) thereafter, the Representatives; (C) provided,
however, if Trust 1 and Trust 2 and each of their respective Transferees through
a Permitted Disposition are no longer Members of the Company, the holders, if
any, of a majority in interest of the Interests initially held by the Trust
Members.
"Permitted Disposition" means a Transfer, in whole or in part,
(a) of a TMC Member's Interest by a TMC Member to another TMC Member or to one
or more Affiliates of such TMC Member, (b) by Trust 1 or Trust 2 to any
sub-trust with the same trustees as, and with a term measured by the same lives
as, Trust 1 or Trust 2, respectively, or (c) upon the Trust Termination, by
Trust 1 or Trust 2 or by any sub-trust that received its Interest pursuant to a
Permitted Disposition to the beneficiaries of such Trusts or sub-trusts.
"Person" means any individual, corporation, association,
partnership (general or limited), joint venture, trust, estate, limited
liability company, or other legal entity or organization.
"Portfolio" means the Securities and other properties
purchased by the Company with the initial cash contributed by the Members
pursuant to the Contribution Agreement and the Securities bought and sold by the
Company thereafter all in accordance with Section 6.3 under the direction of the
Investment Committee.
"Properties" means the real property contributed to the
Company by the TMC Members pursuant to the Contribution Agreement, or any real
property which may be acquired by the Company in exchange or substitution for
any real property held by the Company.
"Properties Committee" means the Properties Committee
appointed by the Members in accordance with Section 6.7.
"Properties Committee Change Date" means the date on which TMC
ceases to be the lessee of the Properties and the Company continues to own the
Properties.
"Replacement Portfolio" means the Securities purchased by the
Company with any cash proceeds received upon the sale, exchange or other
disposition of all or part of any of the Properties, and the Securities bought
and sold by the Company thereafter all in accordance with Section 6.3 under the
direction of the Investment Committee.
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"Representatives" means no less than two and no more than five
Persons who shall act as representatives of the Trust Members with respect to
this Agreement and the rights of Trust Members hereunder following the Trust
Termination, who are Trust Members and who are elected as such by Trust Members
holding, in the aggregate, a majority of the interest in the Company initially
held by Trust 1 and Trust 2. The presence of Trust Members holding a majority in
interest of the Interests initially held by the Trust Members shall be required
to constitute a quorum for the transaction of business to elect Representatives.
All matters shall be deemed approved by the Trust Members at any meeting duly
called and held, a quorum being present, by the affirmative vote of Trust
Members holding a majority in interest of the Interests initially held by the
Trust Members. Any action required or permitted to be taken at any meeting of
the Trust Members may be taken without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by Trust
Members holding a majority in interest of the Interests initially held by the
Trust Members and such written consent is filed with the minutes of the Trust.
"SEC" means the Securities and Exchange Commission or any
successor entity charged with enforcing the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute thereto.
"Securities" shall mean capital stock, limited or general
partnership interests, limited liability company interests, bonds, notes,
debentures and other obligations, investment contracts and other instruments or
evidences of indebtedness commonly referred to as securities and any rights,
warrants and options related thereto.
"Tax Matters Member" shall be the Member designated to act as
Tax Matters Member pursuant to Section 11.1(b), which initially shall be TMC.
"TMC Common" means the Series A Common Stock, par value $.01
per share, of TMC.
"TMC Preferred" means the 8% Convertible Preferred Stock,
Series A, par value $.01 per share, of TMC.
"TMC Shares" means the TMC Common and the TMC Preferred
contributed to the Company by Trust 1 and Trust 2 pursuant to the Contribution
Agreement.
"Transfer" shall have the meaning set forth in Section 5.4 of
the Agreement. The terms "Transferring," "Transferor," "Transferee" and
"Transferred" shall have meanings correlative to the meaning of "Transfer."
"Treasury Regulations" means the income tax regulations,
including temporary regulations, promulgated under the Code, as such regulations
may be amended from time to time (including corresponding provisions of
succeeding regulations).
"Trust Interest" means the Interest held by Trust Members.
"Trust Members" means Trust 1, Trust 2 and any successors in
interest to Trust 1 or Trust 2 who acquire their interests in a Permitted
Disposition.
"Trust Termination" means the termination of Trust 1, Trust 2
and any sub-trust thereof in accordance with their respective terms.
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"Trusts Portfolio" means the properties purchased by the
Company with the cash transferred to such Trusts Portfolio pursuant to Section
9.4 hereof and other properties bought and sold by the Company thereafter in
accordance with Section 9.4 under the direction of the Trusts Portfolio
Committee.
SECTION 1.2 HEADINGS. The headings and subheadings in this Agreement
are included for convenience and identification only and are in no way intended
to describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.
ARTICLE II
FORMATION AND TERM
SECTION 2.1 FORMATION.
(a) The Members hereby agree to form the Company as a limited
liability company under and pursuant to the provisions of the Delaware Act and
agree that the rights, duties and liabilities of the Members shall be as
provided in the Delaware Act, except as otherwise provided herein. Pursuant to
Section 18-201(d) of the Delaware Act, this Agreement shall be effective as of
the date hereof.
(b) Upon the execution of this Agreement, Trust 1, Trust 2 and
each of the TMC Members shall be automatically admitted as Members of the
Company.
(c) The name and mailing address of each Member and the amount
contributed to the capital of the Company shall be listed on Schedule A attached
hereto. Each Member is required to provide any changes to its information set
forth on Schedule A to the Managing Member who shall be required to update
Schedule A from time to time as necessary to accurately reflect the information
therein.
(d) Xxxx Xxxxxxx, as an "authorized person" within the meaning
of the Delaware Act, has executed, delivered and filed the Certificate with the
Secretary of State of the State of Delaware. Xxxxxx Xxxxxxxx, as an "authorized
Person" within the meaning of the Delaware Act, has executed, delivered and
filed the Certificate of Correction of the Certificate of the Company with the
Secretary of State of the State of Delaware. Upon such filing, Xxxx Xxxxxxx'x
and Xxxxxx Xxxxxxxx'x xxxxxx as "authorized persons" shall cease. Any Member of
the Company, as an authorized person within the meaning of the Delaware Act,
shall execute, deliver and file any and all amendments or restatements to the
Certificate.
SECTION 2.2 NAME. The name of the limited liability company formed
hereby and by the filing of the Certificate is TMCT, LLC. The business of the
Company may be conducted upon compliance with all applicable laws under any
other name designated by the Managing Member.
SECTION 2.3 TERM. The term of the Company shall commence on the date of
the filing of the Certificate in the office of the Secretary of State of the
State of Delaware and shall continue perpetually unless the Company is dissolved
in accordance with the provisions of this Agreement. Pursuant to Section
18-201(d) of the Delaware Act, this Agreement shall be effective as of the date
hereof. The existence of the Company as a separate legal entity shall continue
until cancellation of the Certificate in the manner required by the Delaware
Act.
SECTION 2.4 REGISTERED AGENT AND OFFICE. The Company's registered agent
and office in Delaware shall be Corporation Service Company, 0000 Xxxxxx Xxxx,
Xxxxxxxxxx,
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County of Xxxxxxxxx, Xxxxxxxx 00000. At any time, the Managing Member may
designate another registered agent and/or registered office.
SECTION 2.5 PRINCIPAL PLACE OF BUSINESS. The principal place of
business of the Company shall initially be at 1 Times Xxxxxx Xxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000. At any time, the Managing Member may change the
location of the Company's principal place of business.
SECTION 2.6 QUALIFICATION IN OTHER JURISDICTIONS. The Managing Member
shall cause the Company to be qualified, formed or registered under assumed or
fictitious name statutes or similar laws in any jurisdiction in which the
Company transacts business in which such qualification, formation or
registration is required or desirable. The Managing Member, as an authorized
person within the meaning of the Delaware Act, shall execute, deliver and file
any certificates (and any amendments and/or restatements thereof) necessary for
the Company to qualify to do business in a jurisdiction in which the Company may
wish to conduct business.
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY
SECTION 3.1 PURPOSE. The Company is formed for the object and purpose
of, and the nature of the business to be conducted and promoted by the Company
is, acquiring and owning the TMC Shares, the Properties and the Portfolio and
managing the assets of the Company in accordance with the provisions of the
Agreement, and engaging in any lawful act or activity for which limited
liability companies may be formed under the Delaware Act which is necessary,
convenient, desirable or incidental to the foregoing.
SECTION 3.2 POWERS OF THE COMPANY.
(a) The Company shall have the power and authority to take any
and all actions necessary, appropriate, proper, advisable, convenient or
incidental to or for the furtherance of the purpose set forth in Section 3.1,
including, but not limited to, the power:
(i) to conduct its business, carry on its operations
and have and exercise the powers granted to a limited liability company
by the Delaware Act, any other law, or this Agreement in any state,
territory, district or possession of the United States, or in any
foreign country that may be necessary, convenient or incidental to the
accomplishment of the purpose of the Company;
(ii) to acquire by purchase, lease, contribution of
property or otherwise, own, hold, operate, maintain, finance, improve,
lease, sell, convey, mortgage, transfer, demolish or dispose of any
real or personal property that may be necessary, convenient or
incidental to the accomplishment of the purpose of the Company;
(iii) to enter into, perform and carry out contracts
of any kind, including, without limitation, contracts with any Member
or any Affiliate thereof, or any agent of the Company necessary to, in
connection with, convenient to, or incidental to the accomplishment of
the purpose of the Company;
(iv) to invest and reinvest its funds, and to take
and hold real and personal property for the payment of funds so
invested;
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(v) to xxx and be sued, complain and defend, and
participate in administrative or other proceedings, in its name;
(vi) to appoint employees and agents of the Company,
and define their duties and fix their compensation;
(vii) to indemnify any Person in accordance with the
Delaware Act and to obtain any and all types of insurance;
(viii) to negotiate, enter into, renegotiate, extend,
renew, terminate, modify, amend, waive, execute, acknowledge or take
any other action with respect to any lease, contract or security
agreement in respect of any assets of the Company;
(ix) to borrow money and issue evidences of
indebtedness, and to secure the same by a mortgage, pledge or other
lien on the assets of the Company;
(x) to pay, collect, compromise, litigate, arbitrate
or otherwise adjust or settle any and all other claims or demands of or
against the Company or to hold such proceeds against the payment of
contingent liabilities;
(xi) to make, execute, acknowledge and file any and
all documents or instruments necessary, convenient or incidental to the
accomplishment of the purpose of the Company;
(xii) to purchase, take, receive, subscribe for or
otherwise acquire, own, hold, vote, use, employ, sell, mortgage, lend,
pledge, or otherwise dispose of, and otherwise use and deal in and
with, share or other interests in or obligations of domestic or foreign
corporations, associations, general or limited partnerships (including
the power to be admitted as a partner thereof and to exercise the
rights and perform the duties created thereby), trusts, limited
liability companies (including the power to be admitted as a member or
appointed as a manager thereof and to exercise the duties created
thereby), or individuals or direct or indirect obligations of the
United States or of any government, state, territory, governmental
district or municipality or of any instrumentality of any of them;
(xiii) to lend money for any proper purpose, to
invest and reinvest its funds, and to take and hold real and personal
property for the payment of funds so loaned or invested; and
(xiv) to cease its activities and cancel its
Certificate.
(b) The Managing Member, subject to any limitations set forth
in this Agreement, may authorize any Person (including, without limitation, any
other Member) to enter into any agreement or instrument on behalf of the Company
and to perform or cause to be performed the Company's obligations thereunder.
(c) The Company may merge with, or consolidate into, another
Delaware limited liability company or other business entity (as defined in
Section 18-209(a) of the Delaware Act) upon Mutual Agreement.
(d) Nothing in this Section 3.2 shall be deemed to authorize
the officers, the Investment Committee, the Properties Committee or the Managing
Member to authorize the Company to take any action set forth above in this
Section 3.2 without the required approval of the members of the Investment
Committee pursuant to Section 6.3, the members of the
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Properties Committee pursuant to Section 6.7 or the Members pursuant to Section
6.5 or any other provisions of this Agreement.
SECTION 3.3 LIMITATIONS ON COMPANY POWERS. Notwithstanding the
foregoing provisions of Section 3.2, the Company shall not do business in any
jurisdiction that would jeopardize the limitation on liability afforded to the
Members under the Delaware Act or this Agreement.
SECTION 3.4 SPECIFIC AUTHORIZATION. The Company, and the Managing
Member on behalf of the Company, may enter into and perform the Contribution
Agreement without any further act, vote or approvals of any Member or other
Person, notwithstanding any provision of this Agreement, the Delaware Act or
other applicable law, rule or regulation. The authorization set forth in the
prior sentence shall not be deemed to be a restriction on the Managing Member's
entering into other agreements on behalf of the Company.
ARTICLE IV
CAPITAL CONTRIBUTIONS, INTERESTS
AND CAPITAL ACCOUNTS
SECTION 4.1 CAPITAL CONTRIBUTIONS.
(a) Each Member has made its Capital Contribution, described
on Schedule A, pursuant to the terms of the Contribution Agreement.
(b) No Member shall be required to make any additional Capital
Contribution to the Company. A Member may make additional Capital Contributions
to the Company only upon Mutual Agreement.
SECTION 4.2 MEMBER'S INTEREST.
A Member's Interest shall for all purposes be personal property. A
Member has no interest in specific Company property. All property of the
Company, whether real or personal, tangible or intangible, shall be deemed to be
owned by the Company as an entity, and no Member, individually, shall have any
direct ownership in such property.
SECTION 4.3 CAPITAL ACCOUNTS.
(a) A separate Capital Account will be maintained for
each Member.
(b) Each Member's Capital Account will be increased by:
(i) The amount of cash contributed by the Member to
the Company;
(ii) The Gross Asset Value of real, personal,
tangible and intangible property (other than cash) contributed by the
Member to the Company pursuant to Section 4.1;
(iii) Allocations to the Member of items of income or
gain (other than allocations under Section 8.10); and
(iv) The amount of any liabilities of the Company
assumed by such Member or liabilities that are secured by any property
distributed to such Member.
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(c) Each Member's Capital Account will be decreased by:
(i) The amount of cash distributed to the Member by
the Company;
(ii) The Gross Asset Value of property (other than
cash) distributed to the Member by the Company;
(iii) Allocations to the Member of items of
deduction, loss or expense (other than allocations under Section 8.10);
and
(iv) The amount of any liabilities of such Member
assumed by the Company or liabilities that are secured by any property
contributed by such Member.
(d) In the event the Gross Asset Value of any asset of the
Company is adjusted as provided in paragraph (b) under the definition of Gross
Asset Value, any resulting gain or loss shall be allocated among the Members in
accordance with Article VIII.
(e) In the event of a sale or exchange of all or part of an
Interest, a pro rata portion of the Capital Account of the transferor shall
become the Capital Account of the transferee to the extent it relates to the
transferred Interest in accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(l).
(f) The manner in which Capital Accounts are to be maintained
pursuant to this Section 4.3 is intended to comply with the requirements of Code
Section 704(b) and the Treasury Regulations promulgated thereunder, including,
without limitation, Treasury Regulation Section 1.704-1(b)(2)(iv). If the manner
in which Capital Accounts are to be maintained pursuant to this Article IV
should be modified to comply with Code Section 704(b) and the Treasury
Regulations thereunder, then, notwithstanding anything to the contrary, the
method in which Capital Accounts are maintained shall be so modified; provided,
however, that any change in the manner of maintaining Capital Accounts shall not
alter the economic agreement between or among the Members without Mutual
Agreement.
ARTICLE V
MEMBERS
SECTION 5.1 POWERS OF MEMBERS. The Members shall have the power to
exercise any and all rights or powers granted to the Members pursuant to the
express terms of this Agreement. No Member shall have the power to act for or on
behalf of, or to bind, the Company without the prior written approval of the
Managing Member. All Members shall constitute one class or group of members of
the Company for all purposes of the Delaware Act.
SECTION 5.2 REIMBURSEMENTS. The Company shall reimburse the Members and
officers of the Company for all ordinary, reasonable and necessary out-of-pocket
expenses incurred by the Members or such officers on behalf of the Company with
the approval of the Managing Member. Such reimbursement shall be treated as an
expense of the Company and shall be allocated in accordance with Article VIII,
and shall not be deemed to constitute a distributive share of income or a
distribution or return of capital to any Member.
SECTION 5.3 PARTITION. Each Member waives any and all rights that it
may have to maintain an action for partition of the Company's property.
SECTION 5.4 ASSIGNMENTS BY AND WITHDRAWAL OF MEMBERS.
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(a) Prohibited Transfers. No Member may resign or withdraw
from the Company without Mutual Agreement. No Member shall sell, transfer,
assign, convey, pledge, mortgage, encumber, hypothecate or otherwise dispose of
or suffer the creation of an interest in or lien on (a "Transfer") all or any
part of its Interest without Mutual Agreement (which can be withheld by such
other Members in their sole and absolute discretion); provided, however, that
such consent shall not be necessary with respect to any proposed Transfer which
constitutes a Permitted Disposition.
(b) Conditions to Transfer. Any purported Transfer of all or
any part of its Interest by a Member shall require the Member to notify the
Company of such Transfer, including the name and address of the Transferee. Any
Transfer by the TMC Members shall also be conditioned on compliance with Section
5.4(f)(iv)(A).
(c) Nonconforming Transfers Void. Any actual or purported
Transfer of all or part of the Interest of any Member that does not comply with
the provisions of Section 5.4 shall be void and shall not bind the Company. The
Company shall incur no liability for distributions made to any Transferor prior
to compliance with Section 5.4 with respect to the Interest or portion thereof
that is the subject of any such actual or purported Transfer.
(d) Transferee of Trust Members. Subject to Subsection (f)
below, any Transferee of an Interest in the Company upon a Permitted Disposition
by the Trust Members shall automatically become a Member with respect to such
transferred Interest, subject to applicable law and upon execution of this
Agreement, a counterpart of this Agreement or other documents agreeing to be
bound by the provisions of this Agreement. Other than as provided in the
previous sentence, no Transferee of a Trust Member's Interest or portion thereof
shall be admitted as a Member without Mutual Agreement.
(e) Transferee of TMC Members. Subject to Subsection (f)
below, any Transferee of a TMC Member that is a Member shall automatically
become a Member with respect to the Interest so transferred. A Transferee of a
TMC Member that is not a Member shall not be admitted as a Member without Mutual
Agreement, provided that this restriction shall be automatically removed and
eliminated with respect to such a Transferee in a Permitted Disposition at such
time as all states in which the Company conducts business conform to the
"check-the-box" federal income tax rules relating to partnership classification,
and subject to Subsection (f) below and applicable law, and upon execution of
this Agreement, a counterpart of this Agreement or other documents agreeing to
be bound by the provisions of this Agreement, such Transferee in a Permitted
Deposition shall automatically become a Member with respect to such transferred
Interest. Other than as provided in the foregoing sentences, no Transferee of a
TMC Member's Interest or portion thereof shall be admitted as a Member without
Mutual Agreement.
(f) Conditions for Admissions. No Transferee shall be admitted
as a Member without satisfying the following conditions (any one or more of
which may be waived by Mutual Agreement):
(i) the Transferor or Transferee shall undertake to
pay all expenses incurred by the Company in connection therewith;
(ii) the Company shall receive from the Person to
whom such Transfer is to be made a counterpart of this Agreement
executed by or on behalf of such Person and such other documents,
instruments and certificates as may reasonably be requested by the
Managing Member pursuant to which such Transferee shall become bound by
this Agreement with respect to the Interest, or portion thereof, so
Transferred;
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(iii) the Company shall receive from the proposed
Transferor and Transferee such documents, opinions, instruments and
certificates as required by Mutual Agreement;
(iv) the Company shall receive an opinion of counsel
to the Company substantially to the effect that the admission of the
Transferee as a Member (or in the case of Section 5.4(b), the
consummation of such Transfer):
(A) will not cause the Company to be
terminated pursuant to Section 708 of the Code if such
termination would have a material adverse effect on any
Member, to lose its status as a partnership for United States
federal and state income tax purposes, or to be considered a
publicly traded partnership under Section 7704(b) of the Code;
and
(B) complies with all applicable laws and
regulations, including, without limitation, applicable federal
and state securities laws and the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
(v) The Members hereby waive the requirements of this
Subsection (f) with respect to any Transfer by any TMC Member of its
Interest to TMC.
(g) Transfer of Control. TMC shall not, without Mutual
Agreement, Transfer Control of Candle Holdings Corporations or Fortify Holdings
Corporation, or any other entity substantially all of the value of which is
attributable to its Interests in the Company, to any Person that is not an
Affiliate of TMC.
ARTICLE VI
MANAGEMENT
SECTION 6.1 MANAGEMENT OF THE COMPANY. TMC shall be the Managing Member
and, in such capacity, subject to the management of the Portfolio and the
Replacement Portfolio by the Investment Committee in accordance with Section 6.3
hereof, the management of the Properties by the Properties Committee in
accordance with Section 6.7 hereof and the requirements set forth in Section 6.4
hereof, shall manage the Company in accordance with this Agreement until such
time as TMC elects to resign as Managing Member (after providing not less than
three (3) months' prior written notice to all other Members), in which event the
Members shall elect a Managing Member by Mutual Agreement to replace TMC. Except
as otherwise set forth in this Agreement, the Managing Member shall have full,
exclusive and complete discretion to manage and control the business and affairs
of the Company, to make all decisions affecting the business and affairs of the
Company and to take all such actions as the Managing Member deems necessary or
appropriate to accomplish the purpose of the Company set forth herein. The
Managing Member may appoint individuals as officers or employees of the Company
with such titles as it may elect, including but not limited to President,
Treasurer and Secretary. Except as provided herein, the officers of the Company
shall have such powers and duties in the management of this Company as may be
prescribed in a resolution by the Managing Member and, to the extent not
provided as generally pertains to their respective offices, as if the Company
were a corporation governed by the General Corporation Law of the State of
Delaware, subject to the control and removal by the Managing Member.
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SECTION 6.2 POWERS OF THE MANAGING MEMBER. Subject to the limitations
otherwise set forth in this Agreement, the Managing Member shall have the right,
power and authority, in the management of the business and affairs of the
Company, to do or cause to be done any and all acts, at the expense of the
Company, deemed by the Managing Member to be necessary or appropriate to
effectuate the business, purposes and objectives of the Company. Without
limiting the generality of the foregoing, the Managing Member shall have the
power and authority to:
(a) establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including with
respect to allocations and distributions;
(b) bring and defend on behalf of the Company actions and
proceedings at law or in equity before any court or governmental, administrative
or other regulatory agency, body or commission or otherwise;
(c) execute all documents or instruments, perform all duties
and powers and do all things for and on behalf of the Company in all matters
necessary, desirable, convenient or incidental to the purpose of the Company,
including, without limitation, all documents, agreements and instruments related
thereto and the consummation of all transactions contemplated thereby; and
(d) in its sole discretion, provide for payment to any person
serving on the Investment Committee or the Properties Committee as compensation
for such person's services to the Company.
The expression of any power or authority of the Managing Member in this
Agreement shall not in any way limit or exclude any other power or authority
which is not specifically or expressly set forth in this Agreement.
It is acknowledged that the power and authority of the Managing Member
includes the power and authority to direct the vote of the TMC Shares (including
for purposes of this paragraph any other shares of the capital stock of TMC that
may be held by the Company from time to time) and that such TMC shares shall,
unless otherwise provided for herein, be voted at the direction of the Managing
Member. However, it is acknowledged, as a result of the foregoing and Section
160(c) of the Delaware General Corporation Law, and it is otherwise agreed by
the Members, that the TMC Shares shall not be entitled to vote or counted for
quorum purposes with respect to any proposal submitted to the stockholders of
TMC. If, the foregoing notwithstanding, it is determined by a court of competent
jurisdiction that the TMC Shares are eligible to vote and shall be counted for
quorum purposes then, with respect to any proposal submitted for approval to the
stockholders of TMC, the Managing Member shall cause the TMC Shares to be (and,
whether or not the Managing Member did so, TMC shall treat the TMC Shares as
having been) voted for or against, or abstained or withheld from voting, in the
same proportion as the capital stock of TMC held by TMC stockholders other than
the Company is voted with respect to such proposal.
SECTION 6.3 INVESTMENT COMMITTEE.
(a) Number of Investment Committee Members. The number of
members of the Investment Committee shall be three. TMC shall have the right to
designate one member of the Investment Committee (the "TMC Designated Investment
Committee Member"), of which the initial designee shall be Xxxxxx Xxxxxxxx.
Trust 1 and Trust 2 shall have the right to designate two members (the "Trust
Designated Investment Committee Members"), of which the initial members shall be
Xxxxxx X. Xxxxxxxxxx and Xxxxxxx Xxxxxxxxx, Xx.; provided, however, that
following the Trust Termination, such Trust Designated Investment Committee
Members
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shall be designated by the Representatives. Each member of the Investment
Committee shall hold office until his or her successor shall have been
designated pursuant to paragraph (d) below or until such member of the
Investment Committee shall resign or shall have been removed in the manner
provided herein. All members of the Investment Committee shall be either (i)
Members of the Company, (ii) officers, directors, trustees, employees or
beneficiaries of a Member of the Company or (iii) after the Trust Termination,
the Representatives.
(b) Removal of Investment Committee Members. Any member of the
Investment Committee may be removed at any time, with or without cause, by the
Member(s) then entitled to designate such member of the Investment Committee.
(c) Resignation. Any Person may resign as a member of the
Investment Committee at any time by giving written notice to the Investment
Committee. Any such resignation shall take effect at the time specified therein,
or, if the time is not specified, immediately upon its receipt by the Investment
Committee. Acceptance of such resignation shall not be necessary to make it
effective.
(d) Vacancies. Any vacancy on the Investment Committee,
whether because of death, resignation, disqualification, removal, expiration of
term or any other cause shall be filled by designation by the Member(s) who
appointed the member of the Investment Committee whose departure created such
vacancy. Such designation shall be effected by notice delivered to the
Investment Committee. Each member of the Investment Committee so chosen to fill
a vacancy shall remain a member of the Investment Committee until his or her
successor shall have been designated or until he or she shall resign or shall
have been removed in the manner herein provided.
(e) Powers of Investment Committee. The Investment Committee
shall have full, exclusive and complete authority with respect to the management
of the Portfolio and the Replacement Portfolio within the investment guidelines
set forth in Exhibit B hereto. The investment guidelines may be changed only by
Mutual Agreement. The Portfolio and the Replacement Portfolio shall be
maintained separately so that each can be identified readily.
(f) Meetings; Place of Meetings; Telephonic Participation.
Meetings of the Investment Committee may be held at such times and places within
or without the State of Delaware as the Investment Committee may from time to
time by resolution designate or as shall be designated by the Person or Persons
calling the meeting in the notice or waiver of notice of any such meeting.
Regular meetings of the Investment Committee shall be held not less than
quarterly. Special meetings of the Investment Committee shall be held whenever
called by a member of the Investment Committee or the Managing Member. Notice of
the time and place of each such special meeting shall be sent by facsimile
transmission, telegraph or cable or be delivered personally or mailed to and
received by each member of the Investment Committee not less than 24 hours
before the time at which the meeting is to be held. Notice of the purpose of a
special meeting need not be given. Notice of any meeting of the Investment
Committee shall not be required to be given to any member of the Investment
Committee who waives such notice in writing or who is present at such meeting.
At the request of any Investment Committee member, any or all Investment
Committee members may participate in any meeting of the Investment Committee by
means of conference telephone or similar communications equipment pursuant to
which all Persons participating in the meeting of the Investment Committee can
hear each other, and such participation shall constitute presence in person at
such meeting. Minutes of the meetings shall be recorded.
(g) Manner of Acting and Quorum. Except as otherwise provided
in this Agreement or the Delaware Act, the presence of (i) a majority of the
members of the Investment Committee and (ii) a number of Trust Designated
Investment Committee Members equal or
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greater than the number of TMC Designated Investment Committee Members shall be
required to constitute a quorum for the transaction of business at any meeting
of the Investment Committee. The Investment Committee members shall act only as
an Investment Committee, and the individual members shall have no power as such.
Each member shall have one vote. All matters shall be deemed approved by the
Investment Committee at any meeting duly called and held, a quorum being
present, by the affirmative vote of a majority of the authorized number of
members of the Investment Committee.
(h) Action Without Meeting. Any action required or permitted
to be taken or which may be taken at any meeting of the Investment Committee may
be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by the
TMC Designated Investment Committee Member and at least one of the Trust
Designated Investment Committee Members and such written consent is filed with
the minutes of proceedings of the Investment Committee.
SECTION 6.4 TRUSTS PORTFOLIO COMMITTEE. The Trusts Portfolio Committee
shall consist of the Trust Designated Investment Committee Members and shall
have full, exclusive and complete authority with respect to the management of
the Trusts Portfolio.
SECTION 6.5 ACTIONS REQUIRING MUTUAL AGREEMENT. The following actions
and other actions so designated throughout this Agreement shall not be taken by
the Company, whether at the direction of the Managing Member or at the direction
of the Investment Committee or the Properties Committee, without Mutual
Agreement:
(a) Any Transfer or other distribution or encumbrance of
assets of the Company (other than distributions under Article IX, dispositions
or encumbrances of investments in the Portfolio and Replacement Portfolio
subject to approval by the Investment Committee, and dispositions or
encumbrances of Properties subject, on and after the Properties Committee Change
Date, to approval by the Properties Committee);
(b) Any acquisition of assets by the Company (other than
acquisitions of assets in the Portfolio and Replacement Portfolio, subject to
approval by the Investment Committee, and acquisitions of Properties subject, on
and after the Properties Committee Change Date, to approval by the Properties
Committee);
(c) The incurrence of any indebtedness by the Company (other
than indebtedness incurred in the management of the Portfolio and Replacement
Portfolio, subject to the approval of the Investment Committee, and indebtedness
incurred in the management of the Properties subject, on and after the
Properties Committee Change Date, to approval by the Properties Committee);
(d) To the extent permitted by law, the liquidation or
dissolution of the Company;
(e) Any change in the business purpose of the Company;
(f) Any merger, consolidation or reorganization of the Company
with any other Person;
(g) Any change in the investment guidelines set forth in
Exhibit B hereto;
(h) Any issuance of an equity interest in the Company or any
admission of a new Member (other than pursuant to Section 5.4(d), in connection
with a Transfer in conformity with Section 5.4); or
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(i) Arrangements not contemplated by this Agreement between
the Company and any Member providing for pecuniary benefits to any Member.
SECTION 6.6 RELIANCE BY THIRD PARTIES. Any Person dealing with the
Company may rely upon a certificate signed by the Managing Member or any officer
appointed by the Managing Member including, but not limited to, the President,
any Vice President, the Secretary or the Treasurer as to:
(a) the identity of the members of the Investment Committee or
Properties Committee or any Member hereof;
(b) the existence or non-existence of any fact or facts which
constitute a condition precedent to acts by the Company or in any other manner
germane to the affairs of the Company;
(c) the Persons who are authorized to execute and deliver any
instrument or document of or on behalf of the Company; or
(d) any act or failure to act by the Company or as to any
other matter whatsoever involving the Company or any Member.
SECTION 6.7 PROPERTIES COMMITTEE.
(a) Number of Properties Committee Members. The number of
members of the Properties Committee shall be three. TMC shall have the right to
designate two members of the Properties Committee (the "TMC Designated
Properties Committee Members"), of which the initial designees shall be Xxxxxx
Xxxxxxxx and Xxxxxx X. Xxxxxx. Trust 1 and Trust 2 shall have the right to
designate one member of the Properties Committee (the "Trust Designated
Properties Committee Member"), who initially shall be Xxxxxxx Xxxxxxxxx, Xx.;
provided, however, that following the Trust Termination, such Trust Designated
Properties Committee Member shall be designated by the Representatives; and
provided, further, that on and after the Properties Committee Change Date, TMC
shall have the right to designate one member of the Properties Committee and
Trust 1 and Trust 2 (or the Representatives, as applicable) shall have the right
to designate two members of the Properties Committee. Each member of the
Properties Committee shall hold office until his or her successor shall have
been designated pursuant to paragraph (d) below or until such member of the
Properties Committee shall resign or shall have been removed in the manner
provided herein. All members of the Properties Committee shall be either (i)
Members of the Company, (ii) officers, directors, trustees, employees or
beneficiaries of a Member of the Company or (iii) after the Trust Termination,
the Representatives.
(b) Removal of Properties Committee Members. Any member of the
Properties Committee may be removed at any time, with or without cause, by the
Member(s) then entitled to designate such member of the Properties Committee.
(c) Resignation. Any Person may resign as a member of the
Properties Committee at any time by giving written notice to the Properties
Committee. Any such resignation shall take effect at the time specified therein,
or, if the time is not specified, immediately upon its receipt by the Properties
Committee. Acceptance of such resignation shall not be necessary to make it
effective.
(d) Vacancies. Any vacancy on the Properties Committee,
whether because of death, resignation, disqualification, removal, expiration of
term or any other cause shall be filled by designation by the Member(s) who
appointed the member of the Properties Committee whose departure created such
vacancy. Such designation shall be effected by notice delivered to the
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Properties Committee. Each member of the Properties Committee so chosen to fill
a vacancy shall remain a member of the Properties Committee until his or her
successor shall have been designated or until he or she shall resign or shall
have been removed in the manner herein provided.
(e) Powers of Properties Committee. The Properties Committee
shall have full, exclusive and complete authority with respect to the management
of the Properties.
(f) Meetings; Place of Meetings; Telephonic Participation.
Meetings of the Properties Committee may be held at such times and places within
or without the State of Delaware as the Properties Committee may from time to
time by resolution designate or as shall be designated by the Person or Persons
calling the meeting in the notice or waiver of notice of any such meeting.
Regular meetings of the Properties Committee shall be held not less than
quarterly. Special meetings of the Properties Committee shall be held whenever
called by a member of the Properties Committee or the Managing Member. Notice of
the time and place of each such special meeting shall be sent by facsimile
transmission, telegraph or cable or be delivered personally or mailed to and
received by each member of the Properties Committee not less than 24 hours
before the time at which the meeting is to be held. Notice of the purpose of a
special meeting need not be given. Notice of any meeting of the Properties
Committee shall not be required to be given to any member of the Properties
Committee who waives such notice in writing or who is present at such meeting.
At the request of any Properties Committee member, any or all Properties
Committee members may participate in any meeting of the Properties Committee by
means of conference telephone or similar communications equipment pursuant to
which all Persons participating in the meeting of the Properties Committee can
hear each other, and such participation shall constitute presence in person at
such meeting. Minutes of the meetings shall be recorded.
(g) Manner of Acting and Quorum. Except as otherwise provided
in this Agreement or the Delaware Act, the presence of a majority of the members
of the Properties Committee shall be required to constitute a quorum for the
transaction of business at any meeting of the Properties Committee; provided
that (a) the Trust Designated Properties Committee Member may act alone with
respect to declaration, prosecution or waiver of an "event of default" (as
defined in the Lease), and (b) waivers or consents with respect to the Lease,
and actions and decisions with respect to any renewals of the Lease or
purchasers of real property pursuant to the option set forth in the Lease shall
require unanimous consent of all members of the Properties Committee, and (c)
any TMC Designated Properties Committee Member may act alone with respect to any
actions or decisions relating to participation in business improvement districts
or similar programs. Except as otherwise set forth herein, the Properties
Committee members shall act only as a Properties Committee, and the individual
members shall have no power as such. Each member shall have one vote. Except as
otherwise provided herein, all matters shall be deemed approved by the
Properties Committee at any meeting duly called and held, a quorum being
present, by the affirmative vote of a majority of the authorized number of
members of the Properties Committee.
(h) Action Without Meeting. Any action required or permitted
to be taken or which may be taken at any meeting of the Properties Committee may
be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by the
Trust Designated Properties Committee Member and at least one of the TMC
Designated Properties Committee Members (or on or after the Properties Committee
Change Date, by the TMC Designated Properties Committee Member and at least one
of the Trust Designated Properties Committee Members) and such written consent
is filed with the minutes of proceedings of the Properties Committee.
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ARTICLE VII
MEETINGS OF MEMBERS
SECTION 7.1 MEETINGS OF THE MEMBERS. Meetings of the Members may be
called at any time by the Managing Member, Trust 1 or Trust 2 or, after the
Trust Termination, the Representatives, or within two days after written notice
requesting such a meeting is received by the Managing Member from any Member.
Each meeting of Members shall be conducted by such Person that the Managing
Member may designate or, if the Managing Member fails to do so, by such other
Person that a majority of the Members present in person or by proxy specify.
SECTION 7.2 PLACE OF MEETINGS; PARTICIPATION BY TELEPHONE. All meetings
of the Members of the Company shall be held at such places, within or without
the State of Delaware, as may from time to time be designated by the Managing
Member and specified in the respective notices or waivers of notice thereof.
Participation in any meeting may be by means of conference telephone or similar
communications equipment pursuant to which all persons participating in the
meeting can hear each other, and such participation shall constitute presence in
person at such meeting. Minutes of the meetings shall be recorded.
SECTION 7.3 NOTICE OF MEETINGS. Notice of each meeting of the Members
of the Company shall be given not less than ten (10) days nor more than sixty
(60) days before the date of the meeting to each Member of record entitled to
vote at such meeting by delivering a typewritten or printed notice thereof to
such Member personally, or by depositing such notice in the United States mail,
in a postage prepaid envelope, directed to such Member at such Member's post
office address furnished by such Member to the Secretary of the Company for such
purpose or, if such Member shall not have furnished to the Secretary of the
Company an address for such purpose, then at such Member's post office address
last known to the Company, or by transmitting a notice thereof to such Member at
such address by facsimile, telegraph, cable or wireless. Every notice of a
meeting of the Members shall state the place, date and hour of the meeting, and
the purpose or purposes for which the meeting is called. Notice of any meeting
of Members shall not be required to be given to any Member who shall have waived
such notice, and such notice shall be deemed waived by any Member who shall
attend such meeting in person or by proxy, except for any Member who shall
attend such meeting for the express purpose of objecting, at the beginning of
the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Except as otherwise expressly required by law,
notice of any adjourned meeting of the Members need not be given if the time and
place thereof are announced at the meeting at which the adjournment is taken.
SECTION 7.4 ACTION WITHOUT MEETING. Any action required to be taken or
which may be taken at any meeting of Members of the Company may be taken without
a meeting, without prior notice and without a vote, if there is Mutual Agreement
in writing, setting forth the action so taken.
ARTICLE VIII
ALLOCATIONS
SECTION 8.1 FIXED INCOME PORTFOLIO. All items with respect to the Fixed
Income Portfolio for any Fiscal Year shall be allocated as follows:
(a) Ordinary Profits and Losses. All items of interest,
original issue discount, market discount, dividends and other items of ordinary
income from the Fixed Income Portfolio
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and all related items of ordinary deduction or expense shall be allocated 80% to
the Trusts and 20% to the TMC Members.
(b) Gains. All items of gain from any sale, exchange,
redemption or similar transactions relating to the assets in the Fixed Income
Portfolio shall be allocated as follows:
(i) 80% to the Trusts and 20% to the TMC Members
until the aggregate amount allocated under this Section 8.1(b)(i) is
equal to the aggregate items of loss, expense, or deductions allocated
under Section 8.1(c)(iv);
(ii) 100% to the TMC Members until the aggregate
amount allocated under this Section 8.1(b)(ii) is equal to the
aggregate items of loss, expense, or deductions allocated under section
8.1(c)(iii);
(iii) 100% to the TMC Members until the aggregate
amount allocated under this Section 8.1(b)(iii) is equal to
$40,350,826; and
(iv) Thereafter, 80% to the Trusts and 20% to the TMC
Members.
(c) Losses. All items of loss, expense or deduction from any
sale, exchange, redemption or similar transactions relating to the assets in the
Fixed Income Portfolio shall be allocated as follows:
(i) 80% to the Trusts and 20% to the TMC Members
until the aggregate amount allocated under this Section 8.1(c)(i) is
equal to the aggregate gains allocated under Section 8.1(b)(iv);
(ii) 100% to the TMC Members until the aggregate
amount allocated under this Section 8.1(c)(ii) is equal to the
aggregate gains allocated under section 8.1(b)(iii);
(iii) 100% to the TMC Members until the aggregate
amount allocated under this Section 8.1(c)(iii) is equal to
$40,350,826; and
(iv) Thereafter, 80% to the Trusts and 20% to the TMC
Members.
(d) Replacement Portfolio. All items with respect to the
Replacement Portfolio shall be allocated 85% to the Trusts and 15% to the TMC
Members.
SECTION 8.2 PROPERTIES. All items with respect to the Properties for
any Fiscal Year shall be allocated as follows:
(a) Ordinary Profits and Losses. All items of rent and other
ordinary income from the Properties and all related items of ordinary deduction
or expense, other than Depreciation, shall be allocated 80% to the Trusts and
20% to the TMC Members.
(b) Gains. All recapture of Depreciation and all items of gain
from any sale, exchange or similar transactions relating to the Properties shall
be allocated 80% to the Trusts and 20% to the TMC Members.
(c) Losses. All Depreciation and all items of loss, expense or
deduction from any sale, exchange, or similar transactions relating to the
Properties shall be allocated 80% to the Trusts and 20% to the TMC Members.
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SECTION 8.3 TMC COMMON. All items with respect to the TMC Common for
any Fiscal Year shall be allocated as follows:
(a) Ordinary Profits and Losses. All dividends and other items
of ordinary income from the TMC Common and all related items of deduction or
expense shall be allocated 20% to the Trusts and 80% to the TMC Members.
(b) Gains. All items of gain from any sale, exchange,
redemption, partial or complete liquidation, extraordinary dividend or similar
transactions relating to the TMC Common shall be allocated as follows:
(i) 10% to the Trusts and 90% to the TMC Members
until the aggregate amount allocated under this Section 8.3(b)(i) is
equal to the aggregate items of loss, expense or deduction allocated
under Section 8.3(c)(iv);
(ii) 100% to the Trusts until the aggregate amount
allocated under this Section 8.3(b)(ii) is equal to the aggregate items
of loss, expense or deduction allocated under Section 8.3(c)(iii);
(iii) 100% to the Trusts until the aggregate amount
allocated to the Trusts under this Section 8.3(b)(iii) is equal to
$50,763,540; and
(iv) Thereafter, 10% to the Trusts and 90% to the TMC
Members.
(c) Losses. All items of loss, expense or deduction from any
sale, exchange, redemption, partial or complete liquidation, extraordinary
dividend or similar transactions relating to the TMC Common shall be allocated
as follows:
(i) 10% to the Trusts and 90% to the TMC Members
until the aggregate amount allocated under this Section 8.3(c)(i) is
equal to the aggregate gains allocated under Section 8.3(b)(iv);
(ii) 100% to the Trusts until the aggregate amount
allocated under this Section 8.3(c)(ii) is equal to the aggregate gains
allocated under section 8.3(b)(iii);
(iii) 100% to the Trusts until the aggregate amount
allocated to the Trusts under this Section 8.3(c)(iii) is equal to
$50,763,540; and
(iv) Thereafter, 10% to the Trusts and 90% to the TMC
Members.
SECTION 8.4 TMC PREFERRED. All items with respect to the TMC Preferred
for any Fiscal Year shall be allocated as follows:
(a) Ordinary Profits and Losses. All dividends and other items
of ordinary income from the TMC Preferred and all related items of deduction or
expense shall be allocated 20% to the Trusts and 80% to the TMC Members.
(b) Gains. All items of gain from any sale, exchange,
redemption, partial or complete liquidation, extraordinary dividend or similar
transactions relating to the TMC Preferred shall be allocated as follows:
(i) 20% to the Trusts and 80% to the TMC Members
until the aggregate amount allocated under this Section 8.4(b)(i) is
equal to the aggregate items of loss, expense or deduction allocated
under Section 8.4(c)(iv);
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(ii) 100% to the Trusts until the aggregate amount
allocated under this Section 8.4(b)(ii) is equal to the aggregate items
of loss, expense or deduction allocated under Section 8.4(c)(iii);
(iii) 100% to the Trusts until the aggregate amount
allocated to the Trusts under this Section 8.4(b)(iii) is equal to
$44,259,600; and
(iv) Thereafter, 20% to the Trusts and 80% to the TMC
Members.
(c) Losses. All items of loss, expense or deduction from any
sale, exchange, redemption, partial or complete liquidation, extraordinary
dividend or similar transactions relating to the TMC Preferred shall be
allocated as follows:
(i) 20% to the Trusts and 80% to the TMC Members
until the aggregate amount allocated under this Section 8.4(c)(i) is
equal to the aggregate gains allocated under Section 8.4(b)(iv);
(ii) 100% to the Trusts until the aggregate amount
allocated under this Section 8.4(c)(ii) is equal to the aggregate gains
allocated under Section 8.4(b)(iii);
(iii) 100% to the Trusts until the aggregate amount
allocated to the Trusts under this Section 8.4(c)(iii) is equal to
$44,259,600; and
(iv) Thereafter, 20% to the Trusts and 80% to the TMC
Members.
SECTION 8.5 EQUITY PORTFOLIO. All items with respect to the Equity
Portfolio for any Fiscal Year shall be allocated as follows:
(a) Ordinary Profits and Losses. All dividends and other items
of ordinary income from the Equity Portfolio and all related items of ordinary
deduction or expense shall be allocated 80% to the Trusts and 20% to the TMC
Members.
(b) Gains. All items of gain from any sale, exchange,
redemption, partial or complete liquidation, extraordinary dividend or similar
transactions relating to the assets in the Portfolio shall be allocated as
follows:
(i) 80% to the Trusts and 20% to the TMC Members
until the aggregate amount allocated under this Section 8.5(b)(i) is
equal to the aggregate items of loss, expense or deduction allocated
under Section 8.5(c)(iv);
(ii) 100% to the TMC Members until the aggregate
amount allocated under this Section 8.5(b)(ii) is equal to the
aggregate items of loss, expense or deduction allocated under section
8.5(c)(iii);
(iii) 100% to the TMC Members until the aggregate
amount allocated under this Section 8.5(b)(iii) is equal to $9,502,314;
and
(iv) Thereafter, 80% to the Trusts and 20% to the TMC
Members.
(c) Losses. All items of loss, expense or deduction from any
sale, exchange, redemption, partial or complete liquidation, extraordinary
dividend or similar transactions relating to the assets in the Equity Portfolio
shall be allocated as follows:
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(i) 80% to the Trusts and 20% to the TMC Members
until the aggregate amount allocated under this Section 8.5(c)(i) is
equal to the aggregate gains allocated under Section 8.5(b)(iv);
(ii) 100% to the TMC Members until the aggregate
amount allocated under this Section 8.5(c)(ii) is equal to the
aggregate gains allocated under Section 8.5(b)(iii);
(iii) 100% to the TMC Members until the aggregate
amount allocated under this Section 8.5(c)(iii) is equal to $9,502,314;
and
(iv) Thereafter, 80% to the Trusts and 20% to the TMC
Members.
SECTION 8.6 TRUSTS PORTFOLIO. All items with respect to the Trusts
Portfolio shall be allocated 100% to the Trusts.
SECTION 8.7 ALLOCATED EXPENSES. Allocated Expenses for any Fiscal Year
shall be apportioned among the Portfolio, the Replacement Portfolio, the
Properties, the TMC Common and the TMC Preferred based on the ratio of the gross
revenues from each category of assets to the total gross revenue of the Company
(excluding gross revenue attributable to the Trusts Portfolio) for such Fiscal
Year. Amounts so apportioned (hereinafter "Portfolio Allocated Expenses,"
"Replacement Portfolio Allocated Expenses," "Properties Allocated Expenses,"
"TMC Common Allocated Expenses," and "TMC Preferred Allocated Expenses,"
respectively) shall be allocated in accordance with Sections 8.1(a), 8.1(d),
8.2(a), 8.3(a) and 8.4(a), respectively, among the Members.
SECTION 8.8 TMC MEMBERS AND TRUSTS. Allocations among the TMC Members
shall be pro rata based upon the percentages set forth in Schedule 8.8.
Allocations among the Trusts shall be pro rata based upon the percentages set
forth in Schedule 8.8.
SECTION 8.9 REGULATORY ALLOCATIONS. (a) The foregoing provisions of
this Article VIII shall be subject to the following limitation: no Member shall
be allocated any items of loss, expense or deduction hereunder if such
allocation results in a Capital Account deficit for such Member. Any balance of
such items of loss, expense or deduction shall be specially allocated to the
other Members in proportion to their positive Capital Account balances.
(b) Notwithstanding the foregoing provisions of this Article
VIII, in the event any Member unexpectedly receives any adjustments, allocations
or distributions described in Sections 1.704(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) of the Treasury Regulations,
items of income and gain shall be specially allocated to each such Member in an
amount and manner sufficient to eliminate, to the extent required by the
Treasury Regulations, the Adjusted Capital Account Deficit of such Member as
quickly as possible, provided that an allocation pursuant to this Section 8.9(b)
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
VIII have been tentatively made as if this Section 8.9(b) were not in the
Agreement.
(c) The allocations set forth in Sections 8.9(a) and (b) (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 income,
gain, loss or deduction pursuant to this Section 8.9. Therefore, notwithstanding
any other provision of this Article VIII (other than the Regulatory
Allocations), the Members by Mutual Agreement shall make such offsetting special
allocations of income, gain, loss or deduction in
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whatever manner they determine is appropriate 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 items were
allocated pursuant to Article VIII (other than Sections 8.9(a) and (b)).
SECTION 8.10 TAX ALLOCATIONS; SECTION 704(c) OF THE CODE.
(a) In accordance with Section 704(c) of the Code and the
Treasury Regulations thereunder, income, gain, loss and deduction with respect
to any property contributed to the capital of the Company shall, solely for
income tax purposes, be allocated among the Members so as to take account of any
variation between the adjusted basis of such property to the Company for federal
income tax purposes and its initial Gross Asset Value (computed in accordance
with paragraph (a) of the definition of "Gross Asset Value" contained in Section
1.1 hereof).
(b) In the event the Gross Asset Value of any Company asset is
adjusted pursuant to paragraph (b) of the definition of "Gross Asset Value"
contained in Section 1.1 hereof, subsequent allocations of income, gain, loss
and deduction with respect to such asset shall take account of any variation
between the adjusted basis of such asset for federal income tax purposes and its
Gross Asset Value in the same manner as under Section 704(c) of the Code and the
Treasury Regulations thereunder.
(c) Any elections or other decisions relating to allocations
under this Section 8.10, shall be made by the Managing Member in any manner that
reasonably reflects the purpose and intention of this Agreement. All items
relevant under Section 704(c) of the Code shall be allocated based on the
"traditional method" defined in Treasury Regulations Section 1.704-3(b), and the
excess of depreciation with respect to the Properties allowed for income tax
purposes over Depreciation shall be allocated to the TMC Members. Allocations
pursuant to this Section 8.10 are solely for purposes of federal, state and
local taxes and shall not affect, or in any way be taken into account in
computing, any Member's Capital Account, other items or distributions pursuant
to any provision of this Agreement.
(d) The Members are aware of the income tax consequences of
the allocations made by this Article VIII and hereby agree to be bound by the
provisions of this Article VIII in reporting their shares of Company income and
loss for all income tax purposes.
ARTICLE IX
DISTRIBUTIONS
SECTION 9.1 PORTFOLIO AND REPLACEMENT PORTFOLIO.
(a) Cash generated from interest, original issue discount,
market discount, dividends, and other items of ordinary income from the Fixed
Income Portfolio and the Equity Portfolio less (i) expenses related to the
administration of the Fixed Income Portfolio and the Equity Portfolio and (ii)
Portfolio Allocated expenses, shall be distributed 80% to the Trusts and 20% to
the TMC Members.
(b) Cash, if any, generated from any taxable gain on
disposition of any assets of the Portfolio and corresponding to items allocated
to the Members under Sections 8.1(b)(iii) and (iv) and 8.5(b)(iii) and (iv) (in
each case less any related expense or deduction allocated under Sections 8.1(c)
and 8.5(c)) shall be distributed to such Members in the order and in
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proportion to the amounts of such taxable gain corresponding to items allocated
under Sections 8.1(b)(iii) and (iv) and 8.5(b)(iii) and (iv).
(c) Cash generated from interest, original issue discount,
market discount, dividends, and other items of ordinary income from the
Replacement Portfolio less (i) expenses related to the administration of the
Replacement Portfolio and (ii) Replacement Portfolio Allocated Expenses, shall
be distributed 85% to the Trusts and 15% to the TMC Members.
(d) Cash, if any, generated from any taxable gain on
disposition of any assets of the Replacement Portfolio less any related expense
or deduction shall be distributed 85% to the Trusts and 15% to the TMC Members.
SECTION 9.2 PROPERTIES.
(a) Cash generated from rent and other items of ordinary
income from the Properties less (i) any expenses related to the administration
of the Properties and (ii) Properties Allocated Expenses, shall be distributed
80% to the Trusts and 20% to the TMC Members.
(b) Cash, if any, generated from any gain from any sale,
exchange, disposition or similar transactions relating to the Properties shall
be distributed to the Members in the order and the proportion to the amount of
such gain allocated under Section 8.2(b). Any other amounts of cash received by
the Company upon the sale, exchange, disposition or similar transactions
relating to the Properties, shall be invested by the Investment Committee and
shall be accounted for separately as the "Replacement Portfolio."
SECTION 9.3 TMC SHARES. Cash generated from dividends and other items
of ordinary income from the TMC Shares less (i) any expenses related to the TMC
Shares, (ii) TMC Common Allocated Expenses, and (iii) TMC Preferred Allocated
Expenses, shall be distributed 20% to the Trusts and 80% to the TMC Members.
SECTION 9.4 TRUSTS PORTFOLIO. The Trusts shall have the right to have
the Company transfer any distributions to which the Trusts are otherwise
entitled under this Agreement to a separate Company account designated as the
Trusts Portfolio. The Trusts Portfolio shall be invested as determined by a
committee comprised of the Trust Designated Investment Committee Members (the
"Trusts Portfolio Committee"). The Trusts Portfolio Committee shall have the
right to require the distribution to the Trust Members of all or a portion of
the assets or proceeds in the Trusts Portfolio at any time and from time to
time.
SECTION 9.5 TMC MEMBERS AND TRUSTS. Distributions to the TMC Members
pursuant to Sections 9.1, 9.2 and 9.3 shall be divided among the TMC Members
based upon the percentages set forth in Schedule 8.8. Distributions to the
Trusts pursuant to Sections 9.1, 9.2 9.3 and 9.4 shall be divided among the
Trust Members based upon the percentages set forth in Schedule 8.8. The amounts
to be distributed to the Members pursuant to Sections 9.1 through 9.4 shall be
advanced by the Company to the Members at such times as are determined by Mutual
Agreement, but in no event less frequently than once per calendar quarter. The
amounts so advanced to the Members shall be treated as advances or drawings of
money against their distributive shares of Company income and as current
distributions made on the last day of the Company's taxable year.
SECTION 9.6 LIQUIDATING DISTRIBUTIONS. Liquidating distributions shall
be made in accordance with the Member's positive Capital Account balances. Prior
to any liquidating distributions, the assets of the Company shall be appraised
at fair market value by an appraiser selected by Mutual Agreement. Any items of
income, gain, loss, expense or deduction that would have resulted had such
assets been sold at such appraised fair market value shall be
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allocated to the Members in accordance with Article VIII. Each Member shall then
be entitled to receive cash and property with a fair market value equal to the
positive balance in such Member's Capital Account after the foregoing
allocations. No Member shall have the right to receive any particular asset of
the Company, and the nature of the assets to be distributed to each Member shall
be as agreed to by Mutual Agreement at such time; provided, however, that TMC
and the TMC Members will act in this regard through a special committee of the
Board of Directors of TMC, comprised solely of directors who are not trustees,
beneficiaries or Affiliates of Trust 1 and Trust 2. If the Members are unable to
agree upon the distribution of particular assets after a reasonable period of
negotiation, the Members, acting by Mutual Agreement, shall cause the orderly
sale of the assets of the Company, and after the allocation of all items of
income, gain, loss, expense or deduction from such sale of the assets in
accordance with Article VIII, shall distribute the proceeds from such sales,
proportionately among each class of assets to be distributed, to the Members in
accordance with their positive Capital Account balances. No Member shall have
the obligation to restore or repay any negative balance in its Capital Account.
SECTION 9.7 OTHER DISTRIBUTIONS. Any other distributions of cash and
property shall be made only to the extent provided for by Mutual Agreement.
SECTION 9.8 LIMITATION ON DISTRIBUTIONS. Notwithstanding any provision
to the contrary contained in this Agreement, the Company, and the Managing
Member on behalf of the Company, shall not be required to make a distribution to
any Member on account of its Interests if such distribution would violate
Sections 18-607 or 18-804(a)(1) of the Delaware Act or other applicable law.
ARTICLE X
BOOKS AND RECORDS
SECTION 10.1 BOOKS, RECORDS AND FINANCIAL STATEMENTS.
(a) At all times during the continuance of the Company, the
Company shall maintain, at its principal place of business, separate books of
account for the Company that shall show a true and accurate record of all costs
and expenses incurred, all charges made, all credits made and received and all
income derived in connection with the operation of the Company business in
accordance with generally accepted accounting principles consistently applied,
and, to the extent inconsistent therewith, in accordance with this Agreement. In
accordance with Section 18-305 of the Delaware Act, such books of account,
together with a copy of this Agreement and of the Certificate, shall at all
times be open to inspection and examination at reasonable times by each Member
and its duly authorized representative for any purpose reasonably related to
such Member's interest as a member of the Company.
(b) The following financial information shall be transmitted
by the Managing Member to each Member:
(i) within three (3) months after the close of each
Fiscal Year:
(A) an audited balance sheet of the Company
as of the close of such Fiscal Year;
(B) an audited statement of Company profits
and losses for such Fiscal Year;
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(C) a statement of such Member's Capital
Account as of the close of such Fiscal Year, and
changes therein during such Fiscal Year; and
(D) a statement indicating such Member's
share of each item of Company income, gain, loss,
deduction or credit for such Fiscal Year for income
tax purposes.
(ii) within 90 days after the close of each quarter:
(A) an unaudited balance sheet as of the
close of such quarter; and
(B) an unaudited statement of Company
profits and losses for such quarter.
(iii) within 30 days after the close of each calendar
month, a report of Company profit and loss for such month.
SECTION 10.2 ACCOUNTING METHOD. For both financial and tax reporting
purposes and for purposes of determining profits and losses, the books and
records of the Company shall be kept on the accrual method of accounting applied
in a consistent manner and shall reflect all Company transactions and be
appropriate for the Company's business.
SECTION 10.3 AUDIT. At any time and in the sole discretion of the
Managing Member, the financial statements of the Company may be audited by TMC's
independent certified public accountants, with such audit to be accompanied by a
report of such accountant containing its opinion. The cost of such audits will
be an expense of the Company. A copy of any such audited financial statements
and accountant's report will be made available for inspection by the Members.
ARTICLE XI
TAX MATTERS
SECTION 11.1 TAX MATTERS MEMBER.
(a) The Tax Matters Member shall arrange for the preparation
of and timely filing of all returns relating to Company income, gains, losses,
deductions and credits, as necessary for federal, state and local income tax
purposes. Each Member agrees to furnish the Company with any representations and
forms as shall reasonably be requested by the Company to assist it in
determining the extent of and in fulfilling its tax obligations.
(b) TMC is hereby designated as "Tax Matters Member" of the
Company for purposes of Section 6231(a)(7) of the Code and is authorized and
required to represent the Company in connection with any administrative
proceeding at the Company level with the Internal Revenue Service relating to
the determination of any item of Company income, gain, loss, deduction or credit
for federal income tax purposes. If for any reason the Tax Matters Member
resigns or can no longer serve in that capacity, the Members may, by Mutual
Agreement, designate another Member to be the Tax Matters Member. Any action or
decision by a Member in its capacity as Tax Matters Member shall be taken or
made by Mutual Agreement.
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(c) The Tax Matters Member shall, within ten (10) days of the
receipt of any notice from the Internal Revenue Service in any administrative
proceeding at the Company level relating to the determination of any Company
item of income, gain, loss, deduction or credit, mail a copy of such notice to
each Member.
SECTION 11.2 RIGHT TO MAKE SECTION 754 ELECTION. The Tax Matters Member
may make or revoke, on behalf of the Company, all elections in accordance with
Section 754 of the Code, so as to adjust the basis of Company property in the
case of a distribution of property within the meaning of Section 734 of the
Code, and in the case of a transfer of a Company interest within the meaning of
Section 743 of the Code. Each Member shall, upon request of the Tax Matters
Member, supply the information necessary to give effect to such an election. Any
Trust Member or Representative has the right to require the Tax Matters Member
to make a Section 754 election.
SECTION 11.3 TAXATION AS PARTNERSHIP. The Company shall be treated as a
partnership for U.S. federal income tax purposes.
ARTICLE XII
LIABILITY, EXCULPATION AND INDEMNIFICATION
SECTION 12.1 LIABILITY. Except as otherwise provided by the Delaware
Act, the debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Covered Person shall be obligated personally
for any such debt, obligation or liability of the Company solely by reason of
being a Covered Person.
SECTION 12.2 EXCULPATION.
(a) No Covered Person shall be liable to the Company or any
other Covered Person for any loss, damage or claim incurred by reason of any act
or omission performed or omitted by such Covered Person in good faith on behalf
of the Company and in a manner reasonably believed to be within the scope of
authority conferred on such Covered Person by this Agreement.
(b) A Covered Person shall be fully protected in relying in
good faith upon the records of the Company and upon such information, opinions,
reports or statements presented to the Company by any Person as to matters the
Covered Person reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable care by or on
behalf of the Company, including information, opinions, reports or statements as
to the value and amount of the assets, liabilities, profits, losses, or any
other facts pertinent to the existence and amount of assets from which
distributions to Members might properly be paid.
SECTION 12.3 DUTIES AND LIABILITIES OF COVERED PERSONS.
(a) To the extent that, at law or in equity, a Covered Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Company or to any other Covered Person, a Covered Person acting under this
Agreement shall not be liable to the Company or to any other Covered Person for
its good faith reliance on the provisions of this Agreement. The provisions of
this Agreement, to the extent that they restrict the duties and liabilities of a
Covered Person otherwise existing at law or in equity, are agreed by the parties
hereto to replace such other duties and liabilities of such Covered Person.
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(b) Unless otherwise expressly provided herein, (i) whenever a
conflict of interest exists or arises between Covered Persons, or (ii) whenever
this Agreement or any other agreement contemplated herein provides that a
Covered Person shall act in a manner that is, or provides terms that are, fair
and reasonable to the Company or any Member, the Covered Person shall resolve
such conflict of interest, taking such action or providing such terms,
considering in each case the relative interest of each party (including its own
interest), such conflict, agreement, transaction or situation and the benefits
and burdens relating to such interests, any customary or accepted industry
practices, and any applicable generally accepted accounting practices or
principles. In the absence of bad faith by the Covered Person, the resolution,
action or term so made, taken or provided by the Covered Person shall not
constitute a breach of this Agreement or any other agreement contemplated herein
or of any duty or obligation of the Covered Person at law or in equity or
otherwise.
(c) Whenever in this Agreement a Covered Person is permitted
or required to make a decision (i) in its "discretion" or under a grant of
similar authority or latitude, the Covered Person shall be entitled to consider
such interests and factors as it desires, including its own interests, and shall
have no duty or obligation to give any consideration to any interest of or
factors affecting the Company or any other Person, or (ii) in its "good faith"
or under another express standard, the Covered Person shall act under such
express standard and shall not be subject to any other or different standard
imposed by this Agreement or other applicable law.
SECTION 12.4 INDEMNIFICATION. To the fullest extent permitted by
applicable law, a Covered Person shall be entitled to indemnification from the
Company for any loss, damage or claim incurred by such Covered Person by reason
of any act or omission performed or omitted by such Covered Person in good faith
on behalf of the Company and in a manner reasonably believed to be within the
scope of authority conferred on such Covered Person by this Agreement; provided,
however, that any indemnity under this Section 12.4 shall be provided out of and
to the extent of Company assets only, and no Covered Person shall have any
personal liability on account thereof.
SECTION 12.5 EXPENSES. To the fullest extent permitted by applicable
law, expenses (including legal fees) incurred by a Covered Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Company prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Company of an undertaking by or
on behalf of the Covered Person to repay such amount if it shall be determined
that the Covered Person is not entitled to be indemnified as authorized in
Section 12.4 hereof.
SECTION 12.6 INSURANCE. The Company may purchase and maintain
insurance, to the extent and in such amounts as the Managing Member shall deem
reasonable, on behalf of Covered Persons and such other Persons as the Managing
Member shall determine, against any liability that may be asserted against or
expenses that may be incurred by any such Person in connection with the
activities of the Company or such indemnities, regardless of whether the Company
would have the power to indemnify such Person against such liability under the
provisions of this Agreement. The Managing Member and the Company may enter into
indemnity contracts with Covered Persons and adopt written procedures pursuant
to which arrangements are made for the advancement of expenses and the funding
of obligations under Section 12.5 hereof and containing such other procedures
regarding indemnification as are appropriate.
SECTION 12.7 OUTSIDE BUSINESS. Any Member or Affiliate thereof may
engage in or possess an interest in other business ventures of any nature or
description independently or with others, similar or dissimilar to the business
of the Company, and the Company and the Members shall have no rights by virtue
of this Agreement in and to
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such independent ventures or the income or profits derived therefrom, and the
pursuit of any venture, even if competitive with the business of the Company,
shall not be deemed wrongful or improper. No Member or Affiliate thereof shall
be obligated to present any particular investment opportunity to the Company
even if such opportunity is of a character that, if presented to the Company,
could be taken by the Company, and any Member or Affiliate thereof shall have
the right to take for its own account (individually or as a partner,
shareholder, fiduciary or otherwise) or recommend to others any such particular
investment opportunity.
ARTICLE XIII
DISSOLUTION, LIQUIDATION AND TERMINATION
SECTION 13.1 DISSOLUTION. The Company shall be dissolved and its
affairs shall be wound up upon the occurrence of any of the following events:
(a) The death, insanity, bankruptcy or dissolution of the
Managing Member, or the occurrence of any other event that terminates the
continued membership of the Managing Member, unless remaining Members holding at
least a "majority in interest" (within the meaning of Revenue Procedure 94-46)
of the remaining Members agree to continue the Company within 90 days following
the occurrence of any such event;
(b) the entry of a decree of judicial dissolution under
Section 18-802 of the Delaware Act; or
(c) by Mutual Agreement.
SECTION 13.2 NOTICE OF DISSOLUTION. Upon the dissolution of the
Company, the Managing Member shall promptly notify the Members of such
dissolution.
SECTION 13.3 LIQUIDATION. Upon dissolution of the Company, such
person(s) who shall be selected by Mutual Agreement, as liquidating trustee(s),
shall immediately commence to wind up the Company's affairs; provided, however,
that a reasonable time shall be allowed for the orderly liquidation of the
assets of the Company and the satisfaction of liabilities to creditors so as to
enable the Members to minimize the normal losses attendant upon a liquidation.
In the period of dissolution and liquidation of the Company, the Members shall
be allocated all items as specified in Article VIII hereof, and shall receive
distributions of cash as provided by Sections 9.1, 9.2, 9.3, 9.4 and 9.5;
provided, however, that the liquidating trustees shall have the discretion to
set aside adequate reserves for the payment of the Company's expenses and
liabilities including all contingent, conditional or unmatured liabilities of
the Company. The proceeds of liquidation shall be distributed in accordance with
Section 9.6 after satisfaction of the liabilities of the Company, whether by
payment or the making of reasonable provision for the payment thereof.
SECTION 13.4 TERMINATION. The Company shall terminate when all of the
assets of the Company have been distributed in the manner provided for in this
Article XIII, and the Certificate shall have been canceled in the manner
required by the Delaware Act.
SECTION 13.5 CLAIMS OF THE MEMBERS. Members and former Members shall
look solely to the Company's assets for the return of their Capital
Contributions, and if the assets of the Company remaining after payment of or
due provision for all debts, liabilities and obligations
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of the Company are insufficient to return such Capital Contributions, the
Members and former Members shall have no recourse against the Company or any
other Member.
ARTICLE XIV
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE MEMBERS
SECTION 14.1 REPRESENTATIONS. Each Member represents and warrants to
and covenants with the other Members and the Company as follows:
(a) If such Member is an entity, it is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or formation with all requisite power and authority to enter into
this Agreement and to perform its obligations hereunder.
(b) This Agreement constitutes the legal, valid and binding
obligation of such Member enforceable against such Member in accordance with its
terms.
(c) No consents or approvals from, or notification of or
filings with any governmental authority or other Person are required for such
Member to enter into this Agreement. All action on the part of such Member
necessary for the authorization, execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby, have been duly taken.
(d) The execution and delivery of this Agreement by such
Member and the consummation of the transactions contemplated hereby by such
Member do not conflict with or contravene the provisions of any organizational
document, agreement or instrument by which such Member or such Member's
properties are bound or any law, rule, regulation, order or decree to which such
Member or such Member's properties are subject.
(e) Such Member's Interest in the Company is intended to be
and is being acquired solely for such Member's own account for investment and
with no present intention of distributing or reselling all or any part thereof;
such Member acknowledges that it is able and is prepared to bear the economic
risk of making all Capital Contributions contemplated hereby and to suffer a
complete loss thereof.
SECTION 14.2 CONFIDENTIALITY.
(a) CONFIDENTIAL INFORMATION. Each Member shall, except as may
be specifically permitted hereunder, (i) use its best efforts to protect the
proprietary or confidential information of the Company in the same manner it
protects its own proprietary or confidential information, (ii) not disclose to
any other Person (other than to Affiliates who have a legitimate need for or
right to such information and who are advised of the confidential nature of such
information; provided, however, that such Member shall be liable for any
disclosure or use of such information by such Affiliate as if such Member had so
disclosed or used such information) the existence or terms of this Agreement, or
any other contract or agreement between the Company, the Members or the Members'
Affiliates, unless the Managing Member has consented thereto, and (iii) not use
the confidential and proprietary information of the others except to the extent
and for the purposes contemplated in this Agreement or permitted by any other
contract or agreement between the Company, the Members or any of the Members'
Affiliates.
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(b) EXCEPTIONS. The obligations of confidentiality and nonuse
imposed under this Section 14.2 shall not apply to any confidential or
proprietary information of the disclosing party which:
(i) is or becomes public or available to the general
public otherwise than through any act or default of the non-disclosing
party;
(ii) is obtained or derived from a third party which,
to the best knowledge of the non-disclosing party, is lawfully in
possession of such information and does not hold such information
subject to any confidentiality or nonuse obligations; or
(iii) is required or appropriate to be disclosed by
one of the parties pursuant to applicable law (including, without
limitation, disclosure required or appropriate under the Securities Act
or the Securities Exchange Act); provided, however, that (A) the
obligations of confidentiality and nonuse shall continue to the fullest
extent not in conflict with such law or order, and (B) if and when a
party is required to disclose such confidential or proprietary
information pursuant to any such law or order, such party shall use its
best efforts to (1) give the other party prompt notice of such
requirement so as to permit such party time in which to appeal, oppose
or take other protective action and (2) obtain a protective order or
take such other actions as will prevent or limit, to the fullest extent
possible, public access to, or disclosure of, such confidential or
proprietary information.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 AMENDMENTS. Any amendment to this Agreement shall be
adopted and be effective as an amendment hereto if approved by Mutual Agreement;
provided, however, that no amendment shall be made, and any such purported
amendment shall be void and ineffective, to the extent the result thereof would
be to cause the Company to be treated as anything other than a partnership for
purposes of United States income taxation.
SECTION 15.2 NOTICES. All notices provided for in this Agreement shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows.
(a) If given to the Company, in care of the Managing Member at
the Company's mailing address set forth below:
The Times Mirror Company
Times Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: General Counsel
(b) If given to any Member, at the address set forth on
Schedule A or, if a current address does not appear on Schedule A, on the books
and records of the Company.
All such notices shall be deemed to have been given when received.
SECTION 15.3 FAILURE TO PURSUE REMEDIES. The failure of any party to
seek redress for violation of, or to insist upon the strict performance of, any
provision of this
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Agreement shall not prevent a subsequent act, which would have originally
constituted a violation from having the effect of an original violation.
SECTION 15.4 CUMULATIVE REMEDIES. The rights and remedies provided by
this Agreement are cumulative and the use of any one right or remedy by any
party shall not preclude or waive its right to use any or all other remedies.
Said rights and remedies are given in addition to any other rights the parties
may have by law, statute, ordinance or otherwise.
SECTION 15.5 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of all of the parties and, to the extent permitted by this
Agreement, their successors, legal representatives and assigns.
SECTION 15.6 INTERPRETATION. Throughout this Agreement, nouns, pronouns
and verbs shall be construed as masculine, feminine, neuter, singular or plural,
whichever shall be applicable. All references herein to "Articles," "Sections"
and "Paragraphs" shall refer to corresponding provisions of this Agreement.
SECTION 15.7 SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provision were omitted.
SECTION 15.8 COUNTERPARTS. This Agreement may be executed in any number
of counterparts with the same effect as if all parties hereto had signed the
same document. All counterparts shall be construed together and shall constitute
one instrument.
SECTION 15.9 INTEGRATION. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.
SECTION 15.10 GOVERNING LAW. This Agreement and the rights of the
parties hereunder shall be interpreted in accordance with the laws of the State
of Delaware, and all rights and relies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 15.11 CONSENT TO JURISDICTION AND FORUM SELECTION. To the
fullest extent permitted by law, the parties hereto agree that all actions or
proceedings arising in connection with this Agreement shall be tried and
litigated exclusively in the State and Federal courts located in the County of
Los Angeles, State of California or the State of Delaware. The aforementioned
choice of venue is intended by the parties to be mandatory and not permissive in
nature, thereby precluding the possibility of litigation between the parties
with respect to or arising out of this Agreement in any jurisdiction other than
that specified in this paragraph. To the fullest extent permitted by law, each
party hereby waives any right it may have to assert the doctrine of forum non
conveniens or similar doctrine or to object to venue with respect to any
proceeding brought in accordance with this paragraph, and stipulates that the
State and Federal courts located in the County of Los Angeles, State of
California or the State of Delaware shall have in personam jurisdiction and
venue over each of them for the purpose of litigating any dispute, controversy,
or proceeding arising out of or related to this Agreement. To the fullest extent
permitted by law, each party hereby authorizes and accepts service of process
sufficient for personal jurisdiction in any action against it as contemplated by
this paragraph by registered or certified mail, return receipt requested,
postage prepaid, to its address for the giving of notices as set forth in this
Agreement.
SECTION 15.12 ATTORNEYS' FEES. If either party to this Agreement shall
bring any action, suit, counterclaim, appeal or arbitration for any relief
against the other to enforce the
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terms hereof or to declare rights hereunder (collectively, an "Action"), the
losing party shall pay to the prevailing party a reasonable sum for attorneys'
fees and costs incurred in bringing and prosecuting such Action and/or enforcing
any judgment, order, ruling, or award. For the purposes of this paragraph,
attorneys' fees shall include, without limitation, fees incurred in discovery,
postjudgment motions and collection actions, and bankruptcy litigation.
"Prevailing party" within the meaning of this paragraph includes, without
limitation, a party who agrees to dismiss an Action on the other party's payment
of the sums allegedly due or performance of the covenants allegedly breached, or
who obtains substantially the relief sought by it.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
date first above stated.
MEMBERS:
The Times Mirror Company,
a Delaware corporation
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------------------
Candle Holdings Corporation, a Delaware corporation
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------------------
Fortify Holdings Corporation, a Delaware corporation
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------------------
Xxxxxxx Xxxxxx & Company, Incorporated, a
New York corporation
By: /s/ Xxxx X. Xxxxx
-----------------------------------------------
Xxxxx-Year Book, Inc., a Missouri corporation
By: /s/ Xxxx X. Xxxxx
-----------------------------------------------
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Newsday, Inc., a New York corporation
By: /s/ Xxxx X. Xxxxx
-----------------------------------------------
The Hartford Courant Company, a Connecticut corporation
By: /s/ Xxxx X. Xxxxx
-----------------------------------------------
The Baltimore Sun Company, a Maryland corporation
By: /s/ Xxxx X. Xxxxx
-----------------------------------------------
39
Xxxxxxxx Trust No. 1
By: /s/ Xxxxxxxxx Xxxxxxx Xxxxxxx
-----------------------------------------------
Xxxxxxxxx Xxxxxxx Xxxxxxx, as trustee of Xxxxxxxx
Trust No. 1 under Trust Agreement dated June 26,
1935
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------------------
Xxxxx Xxxxxxxx, as trustee of Xxxxxxxx Trust No. 1
under Trust Agreement dated June 26, 1935
By: /s/ Xxxxxxx Xxxxxxxxx, Xx.
-----------------------------------------------
Xxxxxxx Xxxxxxxxx, Xx., as trustee of Xxxxxxxx
Trust No. 1 under Trust Agreement dated June 26,
1935
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxxxxxx, as trustee of Xxxxxxxx Trust
No. 1 under Trust Agreement dated June 26, 1935
By: /s/ Xxxxxxx Xxxxxxxx Frost
-----------------------------------------------
Xxxxxxx Xxxxxxxx Xxxxx, as trustee of Xxxxxxxx
Trust No. 1 under Trust Agreement dated June 26,
1935
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------------
Xxxxxxx Xxxxxx, as trustee of Xxxxxxxx Trust No. 1
under Trust Agreement dated June 26, 1935
By: /s/ Xxxx X. Xxxx
-----------------------------------------------
Xxxx X. Xxxx, as trustee of Xxxxxxxx Trust No. 1
under Trust Agreement dated June 26, 1935
40
Xxxxxxxx Trust No. 2
By: /s/ Xxxxxxxxx Xxxxxxx Xxxxxxx
-----------------------------------------------
Xxxxxxxxx Xxxxxxx Xxxxxxx, as trustee of Xxxxxxxx
Trust No. 2 under Trust Agreement dated June 26,
1935
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------------------
Xxxxx Xxxxxxxx, as trustee of Xxxxxxxx Trust No. 2
under Trust Agreement dated June 26, 1935
By: /s/ Xxxxxxx Xxxxxxxxx, Xx.
-----------------------------------------------
Xxxxxxx Xxxxxxxxx, Xx., as trustee of Xxxxxxxx
Trust No. 2 under Trust Agreement dated June 26,
1935
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxxxxxx, as trustee of Xxxxxxxx Trust
No. 2 under Trust Agreement dated June 26, 1935
By: /s/ Xxxxxxx Xxxxxxxx Frost
-----------------------------------------------
Xxxxxxx Xxxxxxxx Xxxxx, as trustee of Xxxxxxxx
Trust No. 2 under Trust Agreement dated June 26,
1935
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------------
Xxxxxxx Xxxxxx, as trustee of Xxxxxxxx Trust No. 2
under Trust Agreement dated June 26, 1935
By: /s/ Xxxx X. Xxxx
-----------------------------------------------
Xxxx X. Xxxx, as trustee of Xxxxxxxx Trust No. 2
under Trust Agreement dated June 26, 1935
