OPERATING AGREEMENT
of
WILLAMETTE FOODS MARKETPLACE, LLC,
an Oregon limited liability company
Dated effective as of March 3, 1996
MEMBERS:
PML INVESTMENTS, LLC
and
UNITED RESOURCES, INC.
OPERATING AGREEMENT
OF
WILLAMETTE FOODS MARKETPLACE, LLC
This OPERATING AGREEMENT (this "Agreement") is made and entered into
effective as of March 3, 1996 (the "Effective Date"), by and among PML
INVESTMENTS, LLC ("PML"), and UNITED RESOURCES, INC. ("United").
AGREEMENT
For and in consideration of the mutual covenants contained in this
Agreement, the Members agree as follows:
1. ORGANIZATION OF COMPANY
1.1 NAME
The Members have formed a limited liability company (the "Company")
under the laws of the State of Oregon. The name of the Company Willamette Foods
Marketplace, LLC.
1.2 CERTIFICATE OF FORMATION
Articles of Organization for the Company (the "Certificate") were filed
with the Secretary of State of the State of Oregon on February 26, 1996.
1.3 TERM
The Company shall commence as of the Effective Date of this Agreement
and shall continue until December 31, 2046, unless earlier terminated and
dissolved pursuant to Section 7.1 of this Agreement.
1.4 REGISTERED AGENT
The name and address of the initial registered agent of the Company are
as follows:
Xxxxxx X. Xxxxxx
00000 X.X. Xxxx Xxxx.
Xxxxxxxxx, XX 00000
The registered agent may be changed by the Members from time to time by filing
an amendment to the Certificate in accordance with the Oregon Limited Liability
Act (or any successor statute) as amended from time to time (the "Act").
PAGE 1
1.5 PURPOSES AND NATURE OF BUSINESS
The purposes of the Company shall be (a) to acquire, own, lease, and
operate a retail grocery business located at 0000 0xx Xxxxxx, Xxxx Xxxx, Xxxxxx
00000 (the "Location"), (b) to engage in any other lawful business activity
permitted by the Act, and (c) to engage in all other acts and things necessary,
proper or advisable to effect and carry out any purposes of the Company and to
operate its business.
1.6 DEFECTS AS TO FORMALITIES
No failure to observe any formalities or requirements of this
Agreement, the Certificate or the Act shall be grounds for imposing personal
liability on the Members for liabilities of the Company.
1.7 LIABILITY OF MEMBERS TO THIRD PARTIES; RELIANCE BY THIRD- PARTY
CREDITORS
1.7.1 LIABILITY OF MEMBERS
Except as otherwise provided in the Act or in this Agreement, no Member
shall be personally liable for any debt, obligation or liability of the Company,
whether arising in contract, tort, or otherwise, solely by reason of being a
Member of the Company.
1.7.2 RELIANCE BY THIRD PARTIES
This Agreement is entered into among the Company and the Members for
the exclusive benefit of the Company, its Members, and their successors and
assigns. Specifically (but not by way of limitation), this Agreement is not
intended for the benefit of any creditor of the Company or any other person.
Except to the extent provided by applicable statute, and then only to that
extent, no such creditor or third party shall have any rights under this
Agreement or under any other agreement between the Company and any Member,
either with respect to any contribution to the Company or otherwise.
1.8 DEFINED TERMS
The definitions of certain terms used in this Agreement are set forth
in Exhibit 1.8.
PAGE 2
2. CAPITAL
2.1 CAPITAL CONTRIBUTIONS
Each Member initially shall contribute the respective amounts described
on Exhibit 2.1 ("Initial Capital Contribution") and shall have the respective
Membership Interests described on Exhibit 2.1. Members may make additional
Capital Contributions at such times and in such amounts as shall be determined
by a unanimous vote of the Members. Exhibit 2.1 shall be amended from time to
time to reflect any transfers of Membership Interests, admissions of additional
Members or the making of any additional non-pro rata Capital Contributions.
2.2 COMPANY CAPITAL
(a) No Member shall be paid interest on any Capital Contribution.
(b) No Member shall have the right to withdraw, or receive any return
of, its Capital Contributions, except as may be specifically provided in this
Agreement. No Member shall have priority over any other Member, either as to the
return of its Capital Contributions or as to profits, losses or distributions,
except as otherwise specifically provided in this Agreement.
(c) Under circumstances requiring a return of any Capital Contribution,
no Member shall have the right to receive property, other than cash, except as
may be specifically provided in this Agreement.
(d) A creditor who makes a nonrecourse loan to the Company will not, as
a result of making such a loan, have or acquire at any time any direct or
indirect interest in the profits, capital or property of the Company, except
that if security is given for such a loan then the creditor may be a secured
creditor.
2.3 LOANS
The Company may borrow money from any Member upon such terms and
conditions as may be agreed by the Members. Unless otherwise agreed by a
unanimous vote of all Members, no such loan shall increase the interest of the
Member making the loan in the capital of the Company, or affect the Member's
share of the Profits and Losses of the Company.
2.4 MAINTENANCE OF CAPITAL ACCOUNTS
The Company shall establish and maintain Capital Accounts with respect
to each Member in accordance with the following:
(a) Each Member's Capital Account shall be increased by (i) the
Member's Capital Contributions, (ii) the Member's share of Profits as determined
pursuant to Section 4.4 below, (iii) the amount of any Company liabilities
assumed
PAGE 3
by the Member, and (iv) the amount of any Company liabilities that are secured
by any property distributed to that Member.
(b) Each Member's Capital Account shall be decreased by (i) the amount
of cash and the value of any Company property (other than cash) distributed to
that Member pursuant to any provision of this Agreement, (ii) the Member's share
of Losses as determined pursuant to Section 4.4 below, (iii) the amount of any
liabilities of the Member assumed by the Company, and (iv) the amount of any
liabilities that are secured by any property contributed by the Member to the
Company.
(c) If the Company at any time distributes any of its assets in kind to
any Member, the Capital Accounts shall be adjusted to account for that Member's
allocable share (as determined under Section 4.4 below) of the Profits or Losses
that would have been realized by the Company had it sold the assets that were
distributed at their respective fair market values immediately prior to their
distribution.
(d) In the event of a transfer of all or a portion of a Member's
Membership Interest in the Company in accordance with the terms of this
Agreement, a transferee shall succeed to the Capital Account of the transferor
in proportion to the percentage of the Member's Membership Interest transferred
to that transferee.
(e) The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with those Regulations.
3. MEMBER MANAGEMENT
3.1 MEMBER MANAGED
The business and affairs of the Company are to be managed by the
Members; provided, however, that management of the business and affairs of the
Company shall be vested in the Operating Member (as defined below) as described
in Section 3.1.1 below, and certain major decisions described in Section 3.1.2
below shall require the approval of Members holding at least a specified
percentage of the Membership Interests in the Company.
PAGE 4
3.1.1 APPOINTMENT AND AUTHORITY OF OPERATING MEMBER; TAX MATTERS
MEMBER
(a) Subject to limitations and restrictions set forth in Section 3.1.2,
the Members hereby agree that PML (the "Operating Member") shall, until
otherwise agreed by all of the Members, have the sole and exclusive right to
manage the business and affairs of the Company and shall have all powers and
rights necessary, appropriate or advisable to effectuate and carry out the
purposes and business of the Company. Consistent with and subject to the
foregoing, the Operating Member shall have all of the rights and powers that may
be possessed by a manager in a limited liability company with managers pursuant
to the Act, and such rights and powers as are otherwise conferred by law or as
may otherwise be necessary, advisable, or convenient to the performance or
discharge of the Operating Member's duties under this Agreement and to the
management of the business and affairs of the Company, including, without
limitation, expending funds of the Company in furtherance of the Company's
business, engaging such persons on behalf of and in the name of the Company as
the Operating Member may deem necessary or advisable to effectuate and carry out
the purposes and business of the Company, and executing, delivering, and
performing on behalf of and in the name of the Company, and without the
signature of any other Member, any agreement, document or instrument that the
Operating Member may deem necessary or desirable to effectuate and carry out the
purposes and business of the Company. Notwithstanding its appointment as
Operating Member, PML shall not be required to devote its full time or attention
to the business and affairs of the Company; provided, that its duties are
discharged with the care an ordinarily prudent person in a like position would
exercise under similar circumstances, and in a manner that PML reasonably
believes to be in the best interests of the Company.
(b) PML shall act as tax matters member pursuant to Code Section
6231(a)(7). Any costs incurred by the tax matters member in the performance of
its duties shall be reimbursed by the Company, or if the Company has dissolved,
by the (former) Members, on a basis in proportion to the Members' respective
Member Interests during the fiscal years at issue.
3.1.2 RESTRICTIONS ON AUTHORITY OF MEMBERS
(a) Neither the Operating Member nor any other Member shall have
authority to do or take any of the following actions without the unanimous
approval of all of the Members:
(1) Amend or restate the Certificate or this Agreement;
(2) Sell, exchange or otherwise dispose of or encumber all or
substantially all of the assets of the Company;
PAGE 5
(3) Consolidate or merge the Company with any other entity;
(4) File for bankruptcy by or on behalf of the Company;
(5) admit any additional Members;
(6) Except as otherwise provided in Section 4.3, make
distributions of cash or other assets of the Company to one or more Members
other than in proportion to their respective Membership Interests;
(7) Incur any indebtedness in an amount exceeding $50,000 in any
one instance (except in connection with refinancings and renewals of existing
indebtedness that do not involve material increases in liability to the
Company);
(8) Acquire any land or other real property or any lease or other
interest in land or other real property, in any case, material to the business
of the Company (other than any easement, right-of way, or other similar interest
reasonably necessary or desirable, in the opinion of the Operating Member, for
the ownership or operation of the Company's business at the Location);
(9) Demolish all or substantially all of the Company's existing
leasehold improvements to the real property at the Location (the "Property");
(10) Construct any improvements or make any capital improvements,
repairs, alterations, or changes in or to the Property involving an expenditure
in excess of $50,000 in any one instance; or
(11) Execute any assignment, sublease or other arrangement
involving the rental, use, or occupancy of the Property or any material part
thereof for a term in excess of 12 months (other than in the ordinary course of
business).
(b) No Member (other than the Operating Member) shall have the
authority to bind the Company unless duly authorized by the Operating Member in
accordance with Section 3.1.3 or by all of the Members in accordance with this
Agreement. Each Member shall indemnify, defend and hold harmless the Company and
each of the other Members from and against any claims, losses or damages
resulting from the taking of any action by such Member that is not authorized by
this Agreement.
PAGE 6
3.1.3 DELEGATION BY OPERATING MEMBER
The Operating Member may delegate certain actions or responsibilities,
employ employees, hire agents and appoint officers to act on behalf of the
Company.
3.1.4 MEMBER MEETINGS
The Members shall meet at the times and place as they may from time to
time agree.
3.2 COMPENSATION; EXPENSE REIMBURSEMENT
The Operating Member shall be entitled to compensation for services
rendered to the Company in connection with the management of the Company's
business as provided on Schedule A attached hereto, or as may be unanimously
approved by the Members. The Operating Member shall also be entitled to
reimbursement from the Company for reasonable fees and expenses incurred for or
on behalf of the Company or otherwise in connection with the performance of its
duties hereunder.
3.3 OTHER BUSINESS OF MEMBERS
Except as otherwise may be required by the Act, the Members may engage
in business ventures and activities of any nature and description, independently
or with others and whether or not in competition with the business of the
Company. Neither the Company nor any of the Members shall have any rights in or
to the independent ventures and activities of other Members, or the income or
profits derived therefrom, by reason of their acquisition of an interest in the
Company or their status as Members.
3.4 RIGHT OF COMPANY TO DEAL WITH MEMBERS OR AFFILIATES
The Company may enter into agreements, contracts or arrangements with
one or more of the Members or their affiliates pursuant to which that Member or
affiliate provides financing, goods and/or services to the Company in connection
with the Company's activities; provided, that either (a) the agreements,
contracts or arrangements are (i) on terms no less favorable than the Company
would obtain from an unaffiliated third party and, if such agreements, contracts
or arrangements are material to the business of the Company, the material terms
thereof are disclosed to all Members, or (b) the terms of such agreements,
contracts or arrangements are unanimously approved by all of the Members.
PAGE 7
4. DISTRIBUTIONS AND ALLOCATIONS
4.1 DISTRIBUTIONS
Except as otherwise provided in Section 4.3, distributions of cash or
other assets of the Company shall be made at such times and in such amounts as
may be unanimously agreed by the Members. Except as otherwise provided in
Section 4.3, any such distribution shall be made among the Members in proportion
to the Membership Interest owned by each Member.
4.2 LIMITATIONS ON DISTRIBUTIONS
No distribution shall be made pursuant to Section 4.1 if, after the
distribution is made (a) the Company would be unable to pay its debts as they
become due or the (b) liabilities of the Company (other than liabilities for
which recourse to creditors is limited to specific assets of the Company) would
exceed the fair market value of the Company's assets (net of any liabilities to
which those assets may be subject).
4.3 TAX DISTRIBUTIONS
Notwithstanding any limitations provided elsewhere in this Agreement,
the Company shall, within 30 days after the close of each fiscal quarter of the
Company, distribute to all Members the Estimated Tax Amount calculated for such
fiscal quarter. Each Member's share of the Estimated Tax Amount shall be based
upon such Member's proportionate share of the Company's taxable income allocated
to such Member during the period to which the distribution relates. Any
distributions made pursuant to this Section 4.3 shall apply against the amounts
distributable to the Member pursuant to Section 4.1.
4.4 ALLOCATION OF PROFITS AND LOSSES
Profits and Losses for any fiscal year or other period shall be
allocated among the Members in proportion to their respective Membership
Interests.
PAGE 8
5. INDEMNIFICATION
5.1 INDEMNIFICATION
To the fullest extent not prohibited by law, the Company shall
indemnify and hold harmless each Member of the Company from and against any and
all losses, claims, demands, costs, damages, liabilities (joint and several),
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements, and other amounts arising from any and all claims, demands,
actions, suits, or proceedings, civil, criminal, administrative or
investigative, in which a Member may be involved, or threatened to be involved,
as a party or otherwise, arising out of or incidental to any business of the
Company transacted or occurring while that Member was a Member, regardless of
whether the Member continues to be a Member of the Company at the time any such
liability or expense is paid or incurred.
5.2 NONEXCLUSIVITY OF RIGHTS
The indemnification provided by this Section shall be in addition to
any other rights to which those indemnified may be entitled under any agreement
or vote of the Members, as a matter of law or equity or otherwise, and shall
continue as to a Member who has ceased to serve in that capacity, and shall
inure to the benefit of the heirs, successors, assigns and administrators of the
Member so indemnified.
5.3 INDEMNIFICATION OF OFFICERS, EMPLOYEES AND AGENTS
The Operating Member may cause the Company to indemnify and advance
expenses to any officer, employee or agent of the Company to the same extent and
subject to the same conditions under which it may indemnify, and advance
expenses, to Members under this Section 5.
5.4 INSURANCE
The Company may maintain insurance, at its expense, to protect itself
and any Member, or officer, employee or agent of the Company against any
expense, liability or loss whether or not the Company would have the power to
indemnify such person against such expense, liability or loss under the Act.
6. TRANSFERS OF COMPANY INTERESTS
No Member may sell, assign, transfer, pledge or otherwise encumber such
Member's Membership Interest in the Company without the unanimous consent of the
remaining Members.
PAGE 9
7. DISSOLUTION OF COMPANY; SPECIAL WITHDRAWAL RIGHT
7.1 EVENTS CAUSING DISSOLUTION
The Company shall dissolve upon the happening of any of the following
events:
(i) the Bankruptcy, death, withdrawal, removal or
adjudication of incompetence of a Member unless the remaining
Members, within 120 days of that event, unanimously agree to
continue the Company and, in the event there are fewer than two
remaining Members, admit a new Member;
(ii) the sale or other disposition of all or substantially
all of the assets of the Company and the collection of all
proceeds from that sale or disposition;
(iii) the vote of all Members to dissolve the Company; or
(iv) the expiration of the term of the Company specified in
Section 1.3 above.
7.2 LIQUIDATION
(a) Upon a dissolution of the Company, the Operating Member or
a court-appointed trustee (the "Liquidator") shall take full account of the
Company's assets and liabilities and the Company's property shall be liquidated
as promptly as is consistent with obtaining its fair value. The proceeds from
the liquidation, to the extent they are sufficient, shall be applied and
distributed in the following order and priority:
(i) First, to the payment and discharge of all of the
Company's debts and liabilities (including those to any Members),
including the establishment of any necessary reserves; and
(ii) Thereafter, any remaining property and assets of the
Company shall be distributed among the Members in accordance with
their positive Capital Account balances.
(b) The Capital Account balances of each Member shall be
appropriately adjusted before any distributions are made pursuant to this
Section 7.2, to reflect sales or other dispositions by the Company giving rise
to Capital Account adjustments and to reflect the Capital Account adjustments
provided elsewhere under this Agreement. Profits and Losses resulting from a
liquidation, if any, shall be allocated among the Members as provided for in
Section 4.4. If any assets of the Company are to be distributed in kind, those
PAGE 10
assets shall be distributed to the Members in the percentages of ownership that
reflect the percentage shares of cash that would have been distributed to each
pursuant to this Section 7.2 had the asset been sold at its fair market value.
(c) Each Member shall look solely to the assets of the Company
for all distributions with respect to the Company, including the return of a
Member's Capital Contributions and a Member's share of cash, and shall have no
recourse therefor, upon dissolution or otherwise, against the Company or any
other Member. No Member shall have any right to demand or receive property other
than cash upon dissolution and termination of the Company.
7.3 DEFICIT CAPITAL ACCOUNTS
Notwithstanding anything to the contrary contained in this Agreement,
and notwithstanding any custom or rule of law to the contrary, to the extent
that a deficit, if any, in the Capital Account of any Member results from or is
attributable to (a) deductions and losses of the Company (including non-cash
items such as depreciation), or (b) distributions of money pursuant to this
Agreement to all Members, upon dissolution of the Company that deficit shall not
be an asset of the Company and that Member shall not be obligated to contribute
that amount to the Company to bring the balance of that Member's Capital Account
to zero.
8. BOOKS, RECORDS AND ACCOUNTING
8.1 BOOKS AND RECORDS
The Operating Member shall maintain records and accounts of all
operations and expenditures of the Company.
8.2 ACCOUNTING
The Company's fiscal year shall be the calendar year. Capital Accounts
and the books of record shall be accounted for using generally accepted
accounting principles. For purposes of filing Federal and State income tax
returns, the Company shall be treated as a partnership and accounted for subject
to Subchapter K of the Code and the regulations promulgated thereunder.
9. AMENDMENT
This Agreement may be amended, restated or modified from time to time
only by a written instrument unanimously adopted by the Members. No Member shall
have any vested rights in this Agreement that may not be modified through an
amendment to this Agreement.
PAGE 11
10. MISCELLANEOUS
10.1 FURTHER ASSURANCES
Each party agrees, at the request of any other party, at any time and
from time to time after the date hereof, promptly to execute and deliver all
such further documents, and promptly to take and forbear from all such action,
as may be reasonably necessary or appropriate in order to more effectively
confirm or carry out the provisions of this Agreement.
10.2 GOVERNING LAW
The parties intend that this Agreement shall be governed by and
construed in accordance with the laws of the State of Oregon applicable to
contracts made and to be wholly performed within Oregon by persons domiciled in
Oregon.
10.3 CONSTRUCTION
Whenever the singular number is used in this Agreement and when
required by the context, the same shall include the plural and vice versa, and
the masculine gender shall include the feminine and neuter genders and vice
versa.
10.4 HEADINGS
The headings in this Agreement are inserted for convenience 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.
10.5 EXHIBITS AND SCHEDULES
Exhibits 1.8 and 2.1 and Schedule A are attached to and by this
reference made a part of this Agreement.
10.6 AMENDMENT; WAIVER
This Agreement may not be amended except in writing executed by the
parties. No provision of this Agreement shall be deemed to have been waived
unless such waiver is in writing signed by the waiving party. No failure by any
party to insist upon the strict performance of any provision of this Agreement,
or to exercise any right or remedy consequent upon a breach thereof, shall
constitute a waiver of any such breach, of such provision or of any other
provision. No waiver of any provision of this Agreement shall be deemed a waiver
of any other provision of this Agreement or a waiver of such provision with
respect to any subsequent breach, unless expressly provided in writing.
PAGE 12
10.7 HEIRS, SUCCESSORS AND ASSIGNS
Each and all of the covenants, terms, provisions and agreements
contained in this Agreement shall be binding upon and inure to the benefit of
the parties hereto and, to the extent permitted by this Agreement, their
respective heirs, legal representatives, successors and assigns.
10.8 ATTORNEYS' FEES
If any suit or action arising out of or related to this Agreement is
brought by any party, the prevailing party or parties shall be entitled to
recover the costs and fees (including, without limitation, reasonable attorneys'
fees, the fees and costs of experts and consultants, copying, courier and
telecommunication costs, and deposition costs and all other costs of discovery)
incurred by such party or parties in such suit or action, including without
limitation any post-trial or appellate proceeding, or in the collection or
enforcement of any judgment or award entered or made in such suit or action.
10.9 SEVERABILITY
Any provision of this Agreement that is deemed invalid or unenforceable
shall be ineffective to the extent of such invalidity or unenforceability,
without rendering invalid or unenforceable the remaining provisions of this
Agreement.
10.10 NOTICES
All notices, requests, demands or other communications required or
permitted to be given under this Agreement shall be in writing. Notices may be
served by certified or registered mail, postage paid with return receipt
requested; by private courier, prepaid; by telex, facsimile, or other
telecommunication device capable of transmitting or creating a written record;
or personally. Mailed notices shall be deemed delivered five (5) days after
mailing, properly addressed. Couriered notices shall be deemed delivered on the
date that the courier warrants that delivery will occur. Telex or
telecommunicated notices shall be deemed delivered when receipt is either
confirmed by confirming transmission equipment or acknowledged by the addressee
or its office. Personal delivery shall be effective when accomplished. Unless a
party changes its address by giving notice to the other party as provided
herein, notices shall be delivered to the parties at the following addresses:
If to PML: PML Investments, LLC
00000 XX Xxxx Xxxx.
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
PAGE 13
If to United: United Resources, Inc.
0000 XX Xxxx Xxxx
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
10.11 EXIT STRATEGIES AND CAPITAL CALLS
The Members agree to negotiate in good faith to agree upon and execute,
on or before April 30, 1996, (1) the terms of additional capital contributions
and (2) a buy-sell agreement or other "exit strategy" with respect to their
interests in the Company, which may address, among other matters, the possible
purchase and sale of interests in the Company in the event of deadlock, or on
the Bankruptcy or dissolution of a Member, or on the death of certain principal
owners of the controlling entities of the Members.
10.12 COUNTERPARTS
This Agreement may be executed by the parties in separate counterparts,
each of which when executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument.
[This space intentionally left blank]
PAGE 14
IN WITNESS WHEREOF, the undersigned have executed this OPERATING
AGREEMENT as of the date first above written.
PML INVESTMENTS, LLC
By
-----------------------------------------------
Name:
Title:
UNITED RESOURCES, INC.
By
-----------------------------------------------
Name:
Title:
PAGE 15
EXHIBIT 1.8
DEFINED TERMS
The defined terms used in this Agreement shall, unless the context
otherwise requires, have the meanings specified in this Exhibit A. The singular
shall include the plural and the masculine gender shall include the feminine and
neuter, and vice versa, as the context requires.
"Act" means the Oregon Limited Liability Company Act, and any successor
statute, as amended from time to time.
"Agreement" means this Operating Agreement as originally executed and
as amended or restated from time to time.
"Bankruptcy" means, "bankruptcy" as defined in ORS 63.001(3).
"Capital Account," with respect to any Member, means the account
maintained with respect to a Member determined in accordance with Section 2.4.
"Capital Contribution" means, with respect to any Member, the amount of
money and the initial fair market value of any property or the fair market value
of services contributed or to be contributed to the Company with respect to the
interest in the Company held by such Member.
"Certificate" means the Articles of Organization of the Company as
filed with the Secretary of State of Oregon as the same may be amended or
restated from time to time.
"Code" means the Internal Revenue Code of 1986, as amended, from time
to time, or any corresponding provision or provisions of any succeeding law and
any reference to a Section of the Code shall be deemed to include a reference to
any successor provision thereto.
"Estimated Tax Amount" means the amount equal to the highest federal
and state statutory marginal tax rate for individuals for a given taxable year
multiplied by the taxable income allocable to the Members for the applicable
fiscal quarter pursuant to Section 4.4.
"Majority Interest" means greater than fifty percent (50%) of the
Membership Interests of all of the Members.
"Member" (collectively, "Members") means each of the parties who
executes a counterpart of this Agreement and any successors or assigns admitted
as members pursuant to this Agreement.
"Membership Interest" means the basic share of limited liability
company interest entitling the holder thereof to all rights and benefits of a
Member under this Agreement.
"Profits" and "Losses" means, for each fiscal year (or other period),
an amount equal to the Company's taxable income or loss for such fiscal year (or
other period), determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss, or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:
(a) Any income of the Company that is exempt from federal
income tax and not otherwise taken into account in computing Profits or
Losses pursuant to this definition of "Profits" and "Losses" shall be
added to such taxable income or loss; and
(b) Any expenditures of the Company described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures
pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise
taken into account in computing Profits or Losses pursuant to this
definition of "Profits" and "Losses" shall be subtracted from such
taxable income or loss.
"Regulations" means temporary and final income tax regulations
promulgated under the Code in effect as of the date of filing the Articles and
the corresponding sections of any regulations subsequently issued that amend or
supersede such regulations, from time to time.
EXHIBIT 2.1
INTERESTS OF MEMBERS
Initial Membership
Capital Contributions Interest
--------------------- --------
PML Investments, LLC $204,000 51%
United Resources, Inc. $196,000 49%
SCHEDULE A
MANAGEMENT FEE SCHEDULE -- WILLAMETTE
PML shall be paid a monthly management fee for services rendered by PML
directly to the Company equal to 1.25% of the annual gross sales of the Company.
CONTENTS
1. Organization of Company ........................................................... 1
1.1 Name ................................................................. 1
1.2 Certificate of Formation ............................................. 1
1.3 Term ................................................................. 1
1.4 Registered Agent ..................................................... 1
1.5 Purposes and Nature of Business ...................................... 2
1.6 Defects as to Formalities ............................................ 2
1.7 Liability of Members to Third Parties;
Reliance by Third-Party Creditors .................................... 2
1.7.1 Liability of Members ............................................ 2
1.7.2 Reliance by Third Parties ....................................... 2
1.8 Defined Terms ........................................................ 2
2. Capital ........................................................................... 3
2.1 Capital Contributions ................................................ 3
2.2 Company Capital ...................................................... 3
2.3 Loans ................................................................ 3
2.4 Maintenance of Capital Accounts ...................................... 3
3. Member Management ................................................................. 4
3.1 Member Managed ....................................................... 4
3.1.1 Appointment and Authority of Operating
Member; Tax Matters Member ...................................... 5
3.1.2 Restrictions on Authority of Members ............................ 5
3.1.3 Delegation by Operating Member .................................. 7
3.1.4 Member Meetings ................................................. 7
3.2 Compensation; Expense Reimbursement .................................. 7
3.3 Other Business of Members ............................................ 7
3.4 Right of Company to Deal With Members or
Affiliates ........................................................... 7
4. Distributions and Allocations ..................................................... 8
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4.1 Distributions ........................................................ 8
4.2 Limitations on Distributions ......................................... 8
4.3 Tax Distributions .................................................... 8
4.4 Allocation of Profits and Losses ..................................... 8
5. Indemnification ................................................................... 8
5.1 Indemnification ...................................................... 8
5.2 Nonexclusivity of Rights ............................................. 9
5.3 Indemnification of Officers, Employees and
Agents ............................................................... 9
5.4 Insurance ............................................................ 9
6. Transfers of Company Interests .................................................... 9
7. Dissolution of Company; Special Withdrawal Right .................................. 9
7.1 Events Causing Dissolution ........................................... 9
7.2 Liquidation .......................................................... 10
7.3 Deficit Capital Accounts ............................................. 11
8. Books, Records and Accounting ..................................................... 11
8.1 Books and Records .................................................... 11
8.2 Accounting ........................................................... 11
9. Amendment ......................................................................... 11
10. Miscellaneous ..................................................................... 12
10.1 Further Assurances ................................................... 12
10.2 Governing Law ........................................................ 12
10.3 Construction ......................................................... 12
10.4 Headings ............................................................. 12
10.5 Exhibits and Schedules ............................................... 12
10.6 Amendment; Waiver .................................................... 12
10.7 Heirs, Successors and Assigns ........................................ 13
10.8 Attorneys' Fees ...................................................... 13
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10.9 Severability ......................................................... 13
10.10 Notices .............................................................. 13
10.11 Exit Strategies and Capital Calls .................................... 14
10.12 Counterparts ......................................................... 14
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