LIMITED LIABILITY COMPANY AGREEMENT OF SYNCHEALTH MSO, LLC A DELAWARE LIMITED LIABILITY COMPANY
LIMITED LIABILITY COMPANY AGREEMENT
OF
SYNCHEALTH MSO, LLC
A DELAWARE LIMITED LIABILITY COMPANY
This Limited Liability Company Agreement of SyncHealth MSO, LLC (the “Company”) is made and entered into effective as of 1 January 2019 (the “Effective Date”), by and among the Members and the Company.
RECITALS:
WHEREAS, the Company was formed as a limited liability company pursuant to the Delaware Limited Liability Company Act (6 Del. C. § 18-101, et seq., as amended and in effect from time to time, the “Act”) by filing a Certificate of Formation with the Office of the Secretary of State of the State of Delaware;
WHEREAS, reference is made to: (i) that certain Contribution Agreement dated as of even date herewith entered into by and between the Members (the “Contribution Agreement”); (ii) that certain Technology Integration Agreement dated as of even date herewith entered into among the Company and the Alliance Member (the “Integration Agreement”); (iii) that certain Subscription Agreement dated as of even date herewith by and between Trxade Group, Inc. (“Trxade”) and the PanOptic Member (the “Subscription Agreement”); (iv) that certain Shareholder Agreement dated as of even date herewith by and between Trxade and the PanOptic Member; and (v) that certain Letter Agreement dated as of even date herewith by and between the Company, Trxade, the Alliance Member and the PanOptic Member (the “Letter Agreement;” the Contribution Agreement, the Integration Agreement, the Subscription Agreement, the Shareholder Agreement and the Letter Agreement, and all exhibits, schedules and annex are referred to collectively herein as the “Transaction Documents); and
ARTICLE I
As used in this Agreement, the following terms have the meanings set forth below:
“Act” has the meaning set forth in the Recitals.
“Additional Contribution” means, with respect to each Member, any amount contributed by such Member to the Company in excess of the existing Contribution of such Member.
“Additional Member” has the meaning set forth in Section 3.02(d).
“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:
(a) credit to such Capital Account any amounts that such Member is obligated to restore pursuant to any provision of this Agreement or is deemed obligated to restore pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(b) debit to such Capital Account the items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
“Affiliate” of any Person means any Person that directly or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with such Person, and the term “Affiliated” shall have a correlative meaning.
“Agreement” means this Limited Liability Company Agreement, including all schedules hereto, as it may be amended or restated from time to time.
“Alliance Manager” has the meaning set forth in Section 4.01(a)(ii).
“Alliance Member” means Alliance Pharma Solutions, LLC, together with its respective successors and Permitted Transferees.
“Authorized Representative” has the meaning set forth in Section 7.06.
“Bankruptcy” of a Member means (a) the filing by a Member of a voluntary petition seeking liquidation, reorganization, arrangement or readjustment, in any form, of its debts under Title 11 of the United States Code or any other federal or state insolvency law, or a Member’s filing an answer consenting to or acquiescing in any such petition, (b) the making by a Member of any assignment for the benefit of its creditors or (c) the expiration of sixty (60) days after the filing of an involuntary petition under Title 11 of the United States Code, an application for the appointment of a receiver for the assets of a Member, or an involuntary petition seeking liquidation, reorganization, arrangement or readjustment of its debts under any other Federal or state insolvency law, provided that the same shall not have been vacated, set aside or stayed within such sixty-day period.
“Board of Managers” has the meaning set forth in Section 4.01(a)(i).
“Book Item” has the meaning set forth in Section 6.05(a)(i).
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“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks are required or authorized by applicable law to be closed in New York, New York.
“Capital Account” has the meaning set forth in Section 3.09.
“Certificate” means the Certificate of Formation of the Company as filed with the Secretary of State of the State of Delaware pursuant to the Act as set forth in the Recitals, as it may be amended or restated from time to time.
“Change of Control” means:
(a) any sale, lease, exchange, or other transfer (in one transaction or series of related transactions during the twelve month period ending on the date of the most recent sale, lease, exchange or other transfer) of all or substantially all of the assets of the Company to any person or persons acting as a group (as determined pursuant to Treasury Regulations Section 1.409A-3(i)(5)(v)(B) and Internal Revenue Service interpretations thereunder (a “Group”)), other than to a person or Group holding, directly or indirectly, at least fifty percent (50%) of the total fair market value of the outstanding and issued equity interests of the Company, as constituted immediately preceding such event or to a person or Group in which the Alliance Member and the PanOptic Member (or any of their Affiliates) still have the right to designate a majority of the managing members, board of directors, or other board of governance of the acquiring person or Group; or
(b) the acquisition by any person or Group of more than fifty percent (50%) of the total fair market value of the outstanding and issued equity interests in the Company, other than any event as a result of which partners or owners (or their affiliates) of the Company, as constituted immediately preceding such event, hold greater than one-half (50%) of the total fair market value of the outstanding and issued equity interests of the Company; provided, however, that no Change of Control under the foregoing clause (B) shall be deemed to have occurred in the event the Alliance Member and the PanOptic Member (or any of their Affiliates) still have the right to designate a majority of the members of the Company Board.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Company” has the meaning specified in the Preamble.
“Company Business” has the meaning set forth in Section 2.05(a).
“Company Expenses” has the meaning set forth in Section 4.03(a).
“Company Minimum Gain” has the same meaning as “partnership minimum gain” set forth in Regulations Sections 1.704-2(b)(2) and 1.704-2(d).
“Company Register” has the meaning set forth in Section 3.01.
“Contribution” means, with respect to any Member, the amount of money or fair market value of property contributed to the Company by such Member at such time with respect to the Interests held by such Member; “Contributions” means, with respect to any Member, the aggregate amount of money or fair market value of property contributed to the Company by such Member (or its predecessors in interest) with respect to the Interests held by such Member.
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“Control,” “Controlled” and “Controlling” mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting Securities, by contract or otherwise.
“Depreciation” means, for each Fiscal Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable for U.S. federal income tax purposes with respect to an asset for such Fiscal Year, except that (a) with respect to any asset the Gross Asset Value of which differs from its adjusted tax basis for U.S. federal income tax purposes at the beginning of such Fiscal Year and which difference is being eliminated by use of the “remedial method” as defined by Regulations Section 1.704-3(d), Depreciation for such Fiscal Year shall be the amount of book basis recovered for such Fiscal Year under the rules prescribed by Regulations Section 1.704-3(d)(2), and (b) with respect to any other asset the Gross Asset Value of which differs from its adjusted tax basis for U.S. federal income tax purposes at the beginning of such Fiscal Year, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the U.S. federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year bears to such beginning adjusted tax basis; provided, however, that in the case of clause (b) above, if the adjusted tax basis for U.S. federal income tax purposes of an asset at the beginning of such Fiscal Year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Board of Managers.
“Depreciation Recapture” has the meaning set forth in Section 6.05(a)(ii)(B).
“Employee Equity Plan” means any incentive equity plan or arrangement adopted by the Board of Managers for the issuance of Units to officers, directors, managers, employees or consultants of the Company or any of its Subsidiaries.
“Entity” means any general partnership, limited partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative, association or other entity.
“Equity Securities” has the meaning set forth in Section 3.02(a).
“Excluded Opportunity” has the meaning set forth in Section 4.06.
“Fiscal Year” has the meaning set forth in Section 2.08.
“GAAP” means generally accepted accounting principles in the United States.
“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for U.S. federal income tax purposes, except as follows:
(a) the Gross Asset Value of any asset contributed by a Member to the Company is the gross fair market value of such asset as determined by the Board of Managers at the time of contribution;
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(b) the Gross Asset Value of all Company assets shall be adjusted to equal their respective gross fair market values, as determined by the Board of Managers, as of the following times: (i) the acquisition of any additional interest in the Company by any new or existing Member in exchange for more than a de minimis Contribution; (ii) the distribution by the Company to a Member of more than a de minimis amount of property as consideration for an interest in the Company; (iii) the grant of an interest in the Company (other than a de minimis interest) as consideration for the provision of services to or for the benefit of the Company by an existing Member acting in a Member capacity, or by a new Member acting in a Member capacity or in anticipation of becoming a Member; and (iv) the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); provided, however, that the adjustments pursuant to clauses (i), (ii) and (iii) above shall be made only if the Board of Managers reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company;
(c) the Gross Asset Value of any Company asset distributed to any Member shall be adjusted to equal the gross fair market value of such asset on the date of distribution as determined by the Board of Managers; and
(d) the Gross Asset Values of all Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Section 734(b) or Section 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and clause (f) of the definition of “Net Income” and “Net Loss” or Section 6.03(f); provided, however, that such Gross Asset Values shall not be adjusted pursuant to this clause (d) to the extent the Board of Managers reasonably determines that an adjustment pursuant to clause (b) above is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph.
If the Gross Asset Value of a Company asset has been determined or adjusted pursuant to clause (a) or (b) above, such Gross Asset Value shall thereafter be adjusted by Depreciation taken into account with respect to such asset for purposes of computing Net Income or Net Loss.
“Indemnified Party” has the meaning set forth in Section 4.05(a).
“Initial Public Offering” means any initial underwritten sale of common stock or other equity Securities of the Company or any Entity that holds, directly or indirectly, all of the equity interests of the Company, pursuant to an effective registration statement under the Securities Act filed with the Commission on Form S-1 (or a successor form) after which sale such common stock or other equity securities are (a) listed on a national securities exchange or authorized to be quoted on an inter-dealer quotation system of a registered national securities association and (b) registered under the Securities Exchange Act.
“Interest” means the limited liability company interest represented by the Units owned by a Member in the Company at any particular time, including the right of such Member to any and all benefits to which such Member may be entitled as provided in the Act, this Agreement, or otherwise, together with the obligations of such Member to comply with all terms and provisions of this Agreement and the Act.
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“Liquidator” has the meaning set forth in Section 9.03(b).
“Manager” has the meaning set forth in Section 4.01(a)(i).
“Member” means any Person who is listed as a Member of the Company on Schedule I attached hereto, as that exhibit may be amended from time to time, and who has been admitted as a Member of the Company pursuant to the terms and conditions of this Agreement.
“Member Loan” has the meaning set forth in Section 3.08.
“Member Nonrecourse Debt” has the same meaning as the term “partner nonrecourse debt” set forth in Regulations Section 1.704-2(b)(4).
“Member Nonrecourse Debt Minimum Gain” means an amount, with respect to each Member Nonrecourse Debt, equal to the Member Minimum Gain that would result if the Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section 1.704-2(i)(3).
“Net Income” and “Net Loss” 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 Section 703(a) of the Code (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss) with the following adjustments (without duplication):
(a) any income of the Company that is exempt from U.S. federal income tax and not otherwise taken into account in computing Net Income or Net Loss pursuant to this paragraph, shall be added to such income or loss;
(b) any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) of the Code expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income or Net Loss, shall be subtracted from such taxable income or loss;
(c) in the event the Gross Asset Value of any Company asset is adjusted pursuant to clauses (b) or (c) of the definition of “Gross Asset Value”, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Income or Net Loss;
(d) gain or loss resulting from any disposition of Company property with respect to which gain or loss is recognized for U.S. federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;
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(e) in lieu of depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year, computed in accordance with the definition of “Depreciation”;
(f) to the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or Section 743(b) of the Code is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Income or Net Loss; and
(g) any items which are specially allocated pursuant to the provisions of Section 6.03 shall not be taken into account in computing Net Income or Net Loss.
“Nonrecourse Deductions” has the meaning set forth in Regulations Sections 1.704-2(b)(1) and 1.704-2(c).
“Nonrecourse Liability” has the meaning set forth in Regulations Section 1.704-2(b)(3).
“Other Members” means: (i) with regards to a Tag-Along Sale, all the Members other than the Tag Along Seller Member; and (ii) with regards to the Right of First Refusal, the Member who is not the Seller.
“PanOptic Manager” has the meaning set forth in Section 4.01(a)(ii).
“PanOptic Member” means PanOptic Health, LLC., together with its respective successors and Permitted Transferees.
“Partnership Representative” has the meaning set forth in Section 7.03.
“Permitted Transferee” means, with respect to each Member, (a) a corporation, limited liability company or partnership, the stockholders, members or partners of which include only the direct or indirect stockholders, members or partners of such Member or (b) any Affiliate of such Member.
“Person” means any individual or Entity and, where the context so permits, the legal representatives, successors in interest and permitted assigns of such Person.
“Preemptive Right” has the meaning set forth in Section 3.02(b).
“Prime Rate” means the highest prime rate of interest quoted from time to time by The Wall Street Journal as the “base rate” on corporate loans at large money center commercial banks.
“Proposed Issuance Notice” has the meaning set forth in Section 3.02(b).
“Regulations” means the Treasury Regulations promulgated under the Code.
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“Reserves” means the amount of proceeds that the Board of Managers determines in its sole discretion is reasonably necessary to be maintained by the Company for the purpose of paying reasonably anticipated Company Expenses, liabilities and obligations of the Company regardless of whether such Company Expenses, liabilities and obligations are actual or contingent.
“Roll-Up Transaction” has the meaning set forth in Section 13.16.
“Securities” means securities of every kind and nature, including stock, interests, notes, bonds, evidences of indebtedness, options to acquire any of the foregoing, and other business interests of every type, including interests in any Entity.
“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended, and applicable rules and regulations thereunder.
“Securities Act” means the Securities Act of 1933, as amended, and applicable rules and regulations thereunder.
“Subsidiary” means, with respect to any specified Entity, any other Entity in which such specified Entity, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at least fifty percent (50%) of either the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Entity.
“Substituted Member” has the meaning set forth in Section 8.02.
“Tag-Along Notice” has the meaning set forth in Section 8.04(b)(i).
“Tag-Along Notice Period” has the meaning set forth in Section 8.04(b)(iii).
“Tag-Along Offer” has the meaning set forth in Section 8.04(b)(ii).
“Tag-Along Percentage” means a fraction, expressed as a percentage, the numerator of which is the number of Units proposed to be sold by the Tag-Along Seller, and the denominator of which is the total number of Units held by the Tag-Along Seller at such time.
“Tag-Along Portion” means, with respect to any Tagging Person in a Tag-Along Sale, the product of (a) the Tag-Along Percentage and (b) the number of Units held by the Tagging Person immediately prior to such Tag-Along Sale.
“Tag-Along Response Notice” has the meaning set forth in Section 8.04(b)(iii).
“Tag-Along Right” has the meaning set forth in Section 8.04(b)(iii).
“Tag-Along Sale” has the meaning set forth in Section 8.04(a).
“Tag-Along Seller” has the meaning set forth in Section 8.04(a).
“Tagging Person” has the meaning set forth in Section 8.04(a).
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“Tax Amount” means the excess of (a) the product of (i) the Board of Managers’ estimate of taxable income allocated to a Member for the Fiscal Year through the end of the month in which such distribution is made, multiplied by (ii) the highest marginal federal, state and local income tax rate applicable to individuals or corporations resident in New York, New York, the sole assets of which are Units in effect for the Fiscal Year of the distribution, over (b) the amount of distributions previously made to such Member pursuant to Section 5.03 during the Fiscal Year with respect to which the distribution is being made.
“Tax Distribution” has the meaning set forth in Section 5.03.
“Transfer” means to, directly or indirectly, transfer, sell, assign, exchange, hypothecate, pledge or otherwise encumber or dispose of.
“Units” means an ownership interest in the Company, including any and all benefits to which the holder of such Unit may be entitled under this Agreement, together with all obligations of such holder to comply with the terms and conditions of this Agreement.
“Unit Percentage” of any Member at any time means a fraction, expressed as a percentage, the numerator of which is the aggregate number of Units held by such Member at such time, and the denominator of which is the aggregate number of all Units held by all Members at such time.
ARTICLE
II
ORGANIZATION
Section 2.03 Office; Agent for Service of Process. The address of the Company’s registered office in Delaware is c/o the Corporation Service Company, 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx, 00000. The name and address of the registered agent in Delaware for service of process are the Corporation Service Company, 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx, 00000. The Board of Managers may change the registered office and the registered agent of the Company from time to time. The Company shall maintain a principal place of business and office(s) at such place or places as the Board of Managers may from time to time designate.
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Section 2.05 Purpose and Scope.
(a) The purpose and business of the Company (the “Company Business”) is to engage in any lawful business or activity for which a limited liability company may be organized under the Act.
(b) Except as expressly set forth in Section 2.07, the Company shall have the power to do any and all acts reasonably necessary, appropriate, proper, advisable, incidental or convenient to or for the furtherance of the Company Business and for the protection and benefit of the Company, and shall have, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Board of Managers pursuant to this Agreement, including pursuant to Section 2.06.
(a) to do any and all things and perform any and all acts necessary or incidental to the Company Business;
(b) to enter into, and take any action under, any contract, agreement or other instrument as the Board of Managers shall determine to be necessary or desirable to further the objects and purposes of the Company, including contracts or agreements with any Member or prospective Member so long as such contracts and agreements are on commercially reasonable and arm’s-length terms;
(c) to open, maintain and close bank accounts and draw checks or other orders for the payment of money and open, maintain and close brokerage, money market fund and similar accounts;
(d) to hire, for usual and customary payments and expenses, consultants, brokers, attorneys, accountants and such other agents for the Company as it may deem necessary or advisable, and authorize any such agent to act for and on behalf of the Company;
(e) to incur expenses and other obligations on behalf of the Company and, to the extent that funds of the Company are available for such purpose, pay all such expenses and obligations;
(f) to borrow money, guarantee any obligation or grant a security interest in the Company’s assets, which borrowing, guarantee or security interest shall be on such terms as the Board of Managers shall determine;
(g) to bring and defend actions and proceedings at law or in equity and before any governmental, administrative or other regulatory agency, body or commission;
(h) to establish Reserves for contingencies and for any other purpose of the Company;
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(i) to prepare and file all necessary returns and statements, pay all taxes, assessments and other impositions applicable to the assets of the Company, and withhold amounts with respect thereto from funds otherwise distributable to any Member;
(j) to determine the accounting methods and conventions to be used in the preparation of any accounting or financial records of the Company; and
(k) to act for and on behalf of the Company in all matters incidental to the foregoing.
(a) Dissolution, liquidation, reorganization merger, amalgamation, or restructuring of the Company;
(b) Disposition of substantially all of the assets of the Company, except in the ordinary course of the normal business of the Company;
(c) Making capital calls on the Members;
(d) Changing the nature or scope of the Company Business or ceasing to carry on the Company Business, or entering into any business other than the Company Business;
(e) Amendments to the Agreement including any variations of rights attaching to Units in the Company and change in capital structure of the Company;
(f) Disagreement relating to matters of joint responsibilities of the Alliance Member and the PanOptic Member, including without limitation those disagreements arising out of or in connection with the Transaction Documents;
(g) Litigation;
(h) Distributions or other distribution of any Equity Securities;
(i) Transfer of any Company-owned “Intellectual Property” (as that term is defined in the Contribution Agreement) to any third party except for, without limitation, grant of licenses for distributorship, agency, reselling arrangement and/or franchises by the Company in the ordinary course of business;
(j) Increase any Company employee salaries;
(k) Incur debt in excess of $5,000.00;
(l) Approve the Transfer any Units; or
(m) Admit any Additional Member or Substituted Member.
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ARTICLE III
Section 3.02 Additional Contributions; Preemptive Rights; Additional Members.
(a) No Member shall be required to make any Additional Contributions to the Company. In addition, no Member shall be permitted to make any Additional Contributions to the Company without the consent of the Board of Managers. The Board of Managers, subject to the Preemptive Right provided for in Section 3.02(b), shall have the authority to issue Units or other equity securities of the Company, including any security or instrument convertible into equity securities of the Company (“Equity Securities”), in such amounts and at a purchase price per Unit or other Equity Security as determined by the Board of Managers and to amend this Agreement accordingly.
(b) In the event that the Board of Managers determines to issue additional Units or other Equity Securities of the Company to any Member or any of its Affiliates, the Board of Managers shall provide written notice thereof to the Members at least ten (10) Business Days prior to the date of such issuance (the “Proposed Issuance Notice”). From the date of its receipt of the Proposed Issuance Notice, each Member shall have the right (a “Preemptive Right”) to purchase such additional Units or other Equity Securities up to an amount equal to its Unit Percentage, exercisable by notice given to the Company, which shall be an irrevocable election, within ten (10) Business Days after its receipt of the Proposed Issuance Notice. If any Member elects not to exercise its Preemptive Right for the full amount of Units or Equity Securities it is entitled to purchase, the other exercising Members may elect to purchase such Units or Equity Securities on a pro rata basis by indicating such intention in the notice delivered to the Company pursuant to this Section 3.02(b).
(c) Notwithstanding anything to the contrary, if the Board of Managers determines that complying with the provisions of Section 3.02(b) would be materially detrimental to the Company in light of the circumstances, the Company may issue additional Units or other Equity Securities subject to the Preemptive Rights under this Section 3.02 to any Member or its Affiliates without first offering such additional Units or other Equity Securities to any Members or complying with the procedures of Section 3.02(b), so long as each Member receives prompt written notice of the consummation of such issuance and thereafter is given the opportunity to purchase additional Units or other Equity Securities it would have been entitled to purchase pursuant to Section 3.02(b).
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(d) Each new member to be admitted to the Company (each an “Additional Member”) shall execute and deliver a written instrument satisfactory to the Board of Managers, whereby such Additional Member shall become a party to this Agreement, as well as any other documents required by the Board of Managers. Upon execution and delivery of a counterpart of this Agreement and acceptance thereof by the Board of Managers, such Person shall be admitted as a Member. Each such Additional Member shall thereafter be entitled to all the rights and subject to all the obligations of a Member as set forth herein.
Section 3.04 Ownership and Issuance of Units.
(a) The Company has issued Units to each Member in respect of the Interest of such Member. Each Member owns that number of Units as appears next to its name on the Company Register. As of the date hereof (and after giving effect to the transactions consummated under the Transaction Documents), Schedule I sets forth a list of all the Members and the number of Units owned by such Member.
(b) The Board of Managers may issue up to One Million Units in accordance with the terms of this Agreement.
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ARTICLE
IV
MANAGEMENT
Section 4.01 Management and Control of the Company.
(a) (i) The Members have established the Company as a “managers-managed” limited liability company and have agreed to initially designate a board of managers (the “Board of Managers”) of up to three (3) Persons to manage the Company and its and its Subsidiaries’ business and affairs. Each of the Persons appointed to the Board of Managers is referred to herein as a “Manager.” Each Manager shall have one vote for any matter for which approval of the Board of Managers is required by the Act or this Agreement. The size of the Board of Managers may be increased or decreased only with the unanimous written consent of both the Alliance Manager and the PanOptic Manager.
(ii) The Alliance Member shall have the right but not the obligation to designate one of the Managers (the “Alliance Manager”), and the PanOptic Member shall have the right but not the obligation to designate one of the Managers (the “PanOptic Manager”). The Alliance Manager and the PanOptic Manager shall mutually agree on the third Manager (the “Independent Manager”). The Independent Manager may only be removed by the unanimous consent of the Alliance Member and the PanOptic Member, in their sole discretion. None of the Managers, Members and no officer, director, manager, stockholder, partner, member, employee or agent of any Member makes any representation or warranty as to the fitness or competence of the designee of any party hereunder to serve on the Board of Managers by virtue of such party’s execution of this Agreement or by the act of such party in designating such designee pursuant to this Agreement.
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(iii) If at any time any Manager ceases to serve on the Board of Managers (whether due to death, resignation or removal), then only the Member(s) responsible for the designation of such Manager pursuant to Section 4.01(a)(ii) shall be entitled to designate a replacement for such Manager by written notice to each of the Members. The Member(s) entitled to designate a Manager under Section 4.01(a)(ii), and only such Member(s), shall be entitled to remove its or their designated Manager, at any time and from time to time, with or without cause, in its or their sole discretion, and shall give written notice of such removal to each of the Members. If at any time an individual serving as the Independent Manager ceases to be a Manager for any reason, the Company and each Member agrees promptly to act in accordance with the provisions hereof to cause the election of an individual as the Independent Manager. The Board of Managers shall initially be comprised of the individuals set forth on Schedule II, which schedule shall be updated from time to reflect any changes to the Board of Managers pursuant to this Section 4.01.
(iv) The Board of Managers shall have the exclusive right to manage and control the Company, subject to any other provisions herein specifically requiring the approval of the Members. The Board of Managers shall have the right to perform all actions necessary, convenient or incidental to the accomplishment of the purposes and authorized acts of the Company, as specified in Sections 2.05 and 2.06, and the Board of Managers, acting as a body pursuant to this Agreement, shall constitute a “manager” of the Company within the meaning of the Act; provided, however, that no individual Manager shall have the authority or right to act for or bind the Company without the requisite consent of the Board of Managers.
(v) Any action, consent, approval, election, decision or determination to be made by the Board of Managers under or in connection with this Agreement (including any act by the Board of Managers within its “discretion” under this Agreement and the execution and delivery of any documents or agreements on behalf of the Company), shall be in the sole and absolute discretion of the Board of Managers.
(vi) Meetings of the Board of Managers are expected to be held on a quarterly basis, but in any event shall be held not less than annually, when called by either the Alliance Member, the PanOptic Member or any member of the Board of Managers, upon not less than ten (10) business days’ advance written notice to the Managers. Attendance at any meeting of the Board of Managers shall constitute waiver of notice of such meeting. Additionally, a waiver of such notice in writing signed by the Manager entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. The quorum for a meeting of the Board of Managers shall be each of the Alliance Member and the PanOptic Member. Members of the Board of Managers may participate in any meeting of the Board of Managers by conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. All action taken by the Board of Managers shall be by a simple majority of the voting power represented by the Managers present at a meeting thereof in person or by telephone or similar communications equipment.
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(vii) The Board of Managers may create and maintain committees, including an executive committee, an audit committee and compensation committee.
(viii) The Board of Managers may also take action without any meeting of the members of the Board of Managers (or such other governing body) by written consent of all of the Managers setting forth the action to be approved.
(ix) The Company shall pay or cause to be paid all reasonable out-of-pocket expenses incurred by each Manager in connection with traveling to and from and attending meetings of the Board of Managers (and any committee thereof) and while conducting business at the request of the Company.
(b) No Member, in its capacity as such, shall participate in or have any control over the Company Business. Each such Member hereby consents to the exercise by the Board of Managers of the powers conferred upon the Board of Managers by this Agreement. The Members, in their capacities as such, shall not participate in the control, management, direction or operation of the activities or affairs of the Company and shall not have any authority or right, in their capacities as Members of the Company, to act for or bind the Company.
(c) The Board of Managers is authorized to appoint any person as an officer of the Company who shall have such powers and perform such duties incident to such person’s office as may from time to time be conferred upon or assigned to it by the Board of Managers and assign in writing titles (including Chief Executive Officer, President, Vice President, Secretary and Treasurer) to any such person. Any appointment pursuant to this Section 4.01(c) may be revoked at any time by the Board of Managers. In addition, the Board of Managers is authorized to employ, engage and dismiss, on behalf of the Company, any Person, including an Affiliate of any Member if on commercially reasonable and arm’s-length terms, to perform services for, or furnish goods to, the Company. Unless the Board of Managers states otherwise, if the title is one commonly used for officers of a business corporation formed under the Delaware General Corporation Law, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office.
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(a) The Company shall pay for any and all expenses, costs and liabilities incurred in the conduct of the business of the Company in accordance with the provisions hereof (collectively, “Company Expenses”), including:
(i) all routine administrative and overhead expenses of the Company, including fees of auditors, attorneys and other professionals, expenses incurred by the Partnership Representative and expenses associated with the maintenance of books and records of the Company and communications with Members;
(ii) all expenses incurred in connection with any litigation involving the Company and the amount of any judgment or settlement paid in connection therewith;
(iii) all expenses for indemnity or contribution payable by the Company to any Person, whether payable under this Agreement or otherwise and whether payable in connection with any litigation involving the Company;
(iv) all expenses incurred in connection with any indebtedness of the Company; and
(v) all expenses incurred in connection with any liquidation, dissolution or winding up of the Company.
(b) If the Board of Managers shall determine that funds are necessary to pay any Company Expense, then the Company may borrow funds from any Person, including any Member in accordance with Section 3.08, for the purpose of paying such Company Expense.
(a) Subject to applicable law, no Indemnified Party shall be liable, in damages or otherwise, to the Company, the Members or any of their Affiliates for any act or omission performed or omitted by any of them in good faith (including any act or omission performed or omitted by any of them in reliance upon and in accordance with the opinion or advice of experts, including of legal counsel as to matters of law, of accountants as to matters of accounting, or of investment bankers or appraisers as to matters of valuation), except (i) for any act taken by such Indemnified Party purporting to bind the Company that has not been authorized pursuant to this Agreement or (ii) any act or omission with respect to which such Indemnified Party was grossly negligent or engaged in intentional misconduct.
(b) To the extent that, at law or in equity, any Indemnified Party has duties and liabilities relating thereto to the Company or to any Member, such Indemnified Party acting under this Agreement shall not be liable to the Company or to any Member 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 an Indemnified Party otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Indemnified Party, to the maximum extent permitted by applicable law.
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(a) To the fullest extent permitted by applicable law, the Company shall and does hereby agree to indemnify and hold harmless and pay all judgments and claims against the Board of Managers or any individual Manager, any officer of the Company or the Alliance Member in its role as Partnership Representative, any Affiliate thereof and their respective officers, directors, employees, shareholders, partners, managers and members (each, an “Indemnified Party”, each of which shall be a third party beneficiary of this Agreement solely for purposes of this Section 4.05 and Sections 4.04 and 4.07), from and against any loss or damage incurred by an Indemnified Party or by the Company for any act or omission taken or suffered by such Indemnified Party in good faith (including any act or omission taken or suffered by any of them in reliance upon and in accordance with the opinion or advice of experts, including of legal counsel as to matters of law, of accountants as to matters of accounting, or of investment bankers or appraisers as to matters of valuation) in connection with the Company Business, including costs and reasonable attorneys’ fees and any amount expended in the settlement of any claims or loss or damage, except with respect to (i) any act taken by such Indemnified Party purporting to bind the Company that has not been authorized pursuant to this Agreement or (ii) any act or omission with respect to which such Indemnified Party was grossly negligent or engaged in intentional misconduct.
(b) The satisfaction of any indemnification obligation pursuant to Section 4.05(a) shall be from and limited to Company assets (including insurance and any agreements pursuant to which the Company, its officers or employees are entitled to indemnification) and no Member, in such capacity, shall be subject to personal liability therefor.
(c) Expenses reasonably incurred by an Indemnified Party in defense or settlement of any claim that may be subject to a right of indemnification hereunder shall be advanced by the Company prior to the final disposition thereof upon receipt of an undertaking by or on behalf of such Indemnified Party to repay such amount to the extent that it shall be determined upon final adjudication after all possible appeals have been exhausted that such Indemnified Party is not entitled to be indemnified hereunder.
(d) The Company shall purchase and maintain insurance on behalf of all officers, Managers and other Indemnified Parties against any liability which may be asserted against, or expense which may be incurred by, any such Person in connection with the Company’s activities.
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Section 4.07 Limitation of Liability and Fiduciary Duties. Each Manager shall have the same fiduciary duties as a member of a board of directors of a Delaware corporation (assuming such corporation had in its certificate of incorporation a provision eliminating the liabilities of directors as provided in Section 102(b)(7) of the General Corporation Law of the State of Delaware or any successor provisions); provided, however, that, without limiting the generality of the foregoing, whenever the Board of Managers approves or disapproves any action, each Manager shall be entitled to consider such Manager’s own interests or the interests of the Member that designated such Manager. The Company and each Member agree that the provisions of this Agreement (including fiduciary duties) or liabilities of an Indemnified Party that may otherwise exist at law or in equity, shall replace such other duties and liabilities of such Indemnified Party.
ARTICLE
V
DISTRIBUTIONS
(a) first, to the Members in proportion to their respective Capital Accounts up to the amount of their Capital Accounts;
(b) second, all remaining distributions to all Members, pro rata, in accordance with their Unit Percentage.
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Section 5.05 Withholding of Certain Amounts.
(a) Notwithstanding anything to the contrary contained herein, the Board of Managers may withhold from any distribution to any Member contemplated by Sections 5.02 or 5.03 of this Agreement any amounts due from such Member to the Company or to any other Person in connection with the Company Business to the extent not otherwise paid. Any amount withheld pursuant to this Section 5.05(a) shall be applied by the Board of Managers to discharge the obligation in respect of which such amount was withheld.
(b) Notwithstanding anything to the contrary contained herein, all amounts withheld by the Board of Managers pursuant to Section 5.05(a) with respect to a Member shall be treated as if such amounts were distributed to such Member under this Agreement.
(b) Payments to the Company. If the Company receives proceeds in respect of which a tax has been withheld, the Company shall be treated as having received cash in an amount equal to the amount of such withheld tax, and, for all purposes of this Agreement, each Member shall be treated as having received a distribution pursuant to Section 5.02 equal to the portion of the withholding tax allocable to such Member, as reasonably determined by the Board of Managers.
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(c) Over-withholding. Neither the Company nor the Board of Managers shall be liable for any excess taxes withheld in respect of any Member’s interest in the Company, and, in the event of over withholding, a Member’s sole recourse shall be to apply for a refund from the appropriate governmental authority.
(d) Certain Withheld Taxes Treated as Demand Loans. Any taxes withheld pursuant to Section 5.07(a) or (b) shall be treated as if distributed to the relevant Member to the extent an amount equal to such withheld taxes would then be distributable to such Member and, to the extent in excess of such distributable amounts, as a demand loan payable by the Member to the Company with interest at the lesser of (i) the Prime Rate in effect from time to time plus two percent (2%), compounded quarterly, and (ii) the highest rate per annum permitted by law. The Board of Managers may, in its discretion, either demand payment of the principal and accrued interest on such demand loan at any time, and enforce payment thereof by legal process, or may withhold from one or more distributions to a Member amounts sufficient to satisfy such Member’s obligations under any such demand loan.
ARTICLE
VI
ALLOCATIONS
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(d) Deductions Attributable to Member Nonrecourse Debt. Any item of Company loss or expense that is attributable to Member Nonrecourse Debt shall be specially allocated to the Members in the manner in which they share the economic risk of loss (as defined in Regulations Section 1.752-2) for such Member Nonrecourse Debt.
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The allocations pursuant to Sections 6.03(a), 6.03(b) and 6.03(c) shall be comprised of a proportionate share of each of the Company’s items of income or gain. The amounts of any Company income, gain, loss or deduction available to be specially allocated pursuant to this Section 6.03 shall be determined by applying rules analogous to those set forth in clauses (a) through (f) of the definitions of “Net Income” and “Net Loss.” For purposes of determining each Member’s share of Nonrecourse Liabilities, if any, of the Company in accordance with Regulations Section 1.752-3(a)(3), the Members’ interests in Company profits shall be determined in the same manner as prescribed by Section 6.03(e).
(a) Section 704(b) Allocations.
(i) Except as provided in Section 6.05(b) below, each item of income, gain, loss, deduction or credit for U.S. federal income tax purposes that corresponds to an item of income, gain, loss or expense that is either taken into account in computing Net Income or Net Loss or is specially allocated pursuant to Section 6.03 (a “Book Item”) shall be allocated among the Members in the same proportion as the corresponding Book Item.
(ii) (A) If the Company recognizes Depreciation Recapture in respect of the sale of any Company asset,
(1) the portion of the gain on such sale which is allocated to a Member pursuant to Section 6.01 or Section 6.03 shall be treated as consisting of a portion of the Company’s Depreciation Recapture on the sale and a portion of the balance of the Company’s remaining gain on such sale under principles consistent with Regulations Section 1.1245-1, and
(2) if, for U.S. federal income tax purposes, the Company recognizes both “unrecaptured Section 1250 gain” (as defined in Section 1(h) of the Code) and gain treated as ordinary income under Section 1250(a) of the Code in respect of such sale, the amount treated as Depreciation Recapture under Section 6.05(a)(ii)(A)(1) shall be comprised of a proportionate share of both such types of gain.
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(B) For purposes of this Section 6.05(a)(ii), “Depreciation Recapture” means the portion of any gain from the disposition of an asset of the Company which, for U.S. federal income tax purposes, (1) is treated as ordinary income under Section 1245 of the Code, (2) is treated as ordinary income under Section 1250 of the Code, or (3) is “unrecaptured Section 1250 gain” as such term is defined in Section 1(h) of the Code.
ARTICLE VII
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(a) within 60 days after the end of each Fiscal Year, a consolidated balance sheet of the Company and its Subsidiaries as of the end of such Fiscal Year, and consolidated statements of income, retained earnings and cash flows of the Company and its Subsidiaries for such Fiscal Year, prepared in accordance with GAAP and setting forth in each case in comparative form the figures for the previous Fiscal Year, all in reasonable detail and accompanied by the opinion of independent public accountants of recognized national standing selected by the Company; and
(b) within 10 days after the end of each monthly accounting period in each Fiscal Year, a consolidated balance sheet of the Company and its Subsidiaries as of the end of each such quarterly period, and consolidated statements of income, retained earnings and cash flows of the Company and its Subsidiaries for such period and for the current Fiscal Year to date, prepared in accordance with GAAP (subject to normal year-end audit adjustments and the absence of notes thereto) and setting forth in comparative form the figures for the corresponding periods of the previous Fiscal Year, all in reasonable detail and certified by the principal financial or accounting officer of the Company.
ARTICLE
VIII
TRANSFERS
Section 8.01 Transfer in General.
(a) Except as expressly contemplated by this Agreement or with the approval of the Board of Managers, for a period of Twenty Four (24) months following the Effective Date, no Member may Transfer any of its Units except (i) pursuant to Section 8.04 in its capacity as a Tagging Person, (ii) pursuant to Section 8.06 to its Permitted Transferees or (iii) pursuant to Section 13.16 in connection with an Initial Public Offering or Roll-Up Transaction.
(b) A permitted Transfer of Units pursuant to Section 8.01(a) shall be effective as of the date of (i) compliance with the conditions to such transfer referred to in this Section 8.01 and (ii) admission of the Substituted Member pursuant to Section 8.02. All tax items for the partnership taxable year of such Transfer shall be allocated between the transferor and the transferee according to any method permissible under Section 706 of the Code (which method shall be agreed upon between the transferor and the transferee). Distributions made before the effective date of such Transfer shall be paid to the transferor, and Distributions made after such date shall be paid to the transferee.
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(c) Any Member who effectively Transfers any Units pursuant to this Article VIII shall cease to be a Member with respect to such Units and shall no longer have any rights or privileges of a Member with respect to such Units (it being understood, however, that the applicable provisions of Sections 3.07, 4.04, 4.05 and 4.07 shall continue to inure to such Person’s benefit). Nothing contained herein shall relieve any Member who Transfers any Units in the Company from any liability or obligation of such Member to the Company or any of its Subsidiaries or the other Members with respect to such Units that may exist on the date of such Transfer or that is otherwise specified in the Act and incorporated into this Agreement or for any liability to the Company or any of its Subsidiaries or any other Person for any breaches of any representations, warranties or covenants by such Member (in its capacity as such) contained herein or in other agreements with the Company or any of its Subsidiaries.
(d) In addition to any other restrictions on Transfer imposed by this Agreement, (i) no Member may Transfer any Unit (except pursuant to an effective registration statement under the Securities Act) without first delivering to the Board of Managers, if requested, an opinion of counsel (reasonably acceptable in form and substance to the Board of Managers) that neither registration nor qualification under the Securities Act or applicable state securities laws is required in connection with such Transfer and (ii) no Member may Transfer any Unit if such action would cause the Company to be taxable as a “publicly traded partnership” under the Code. The Board of Managers may waive such opinion requirement on advice of counsel acceptable to the Board of Managers.
Section 8.04 Tag-Along Rights.
(a) Subject to Sections 8.01, 8.04(f) and 8.05, and after the provisions of Section 8.07 have been complied with and any transactions entered into thereunder have been consummated, if any Member holding a Unit Percentage in excess of Fifty Percent (50%) proposes to Transfer more than fifty percent (50%) of the Units held by it at any time (a “Tag-Along Sale”), each Other Member may elect, at its option, to participate in the proposed Transfer in accordance with this Section 8.04 (each such electing other Member, a “Tagging Person” and the selling Member, the “Tag-Along Seller”) for the consideration per Unit provided by Section 8.04(b)(v).
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(b) (i) The Tag-Along Seller shall provide each other Member written notice (“Tag-Along Notice”) of the terms and conditions of the Tag-Along Sale and offer each other Member the opportunity to participate in such Transfer and to receive the same consideration, rights and benefits to be received by the Tag-Along Seller in accordance with this Section 8.04.
(ii) The Tag-Along Notice shall identify the number of Units proposed to be Transferred by the Tag-Along Seller (a “Tag-Along Offer”), the consideration for which the Transfer is proposed to be made, the name of the proposed Transferee and all other material terms and conditions of the Tag-Along Offer.
(iii) From the date of its receipt of the Tag-Along Notice, each Tagging Person shall have the right (a “Tag-Along Right”), exercisable by notice (“Tag-Along Response Notice”) given to the Tag-Along Seller, which shall be an irrevocable election, within ten (10) Business Days after its receipt of the Tag-Along Notice (the “Tag-Along Notice Period”), to request that the Tag-Along Seller include in the proposed Transfer the number of Units held by such Tagging Person as is specified in the Tag-Along Response Notice. Each Tagging Person shall be entitled to include in the Tag-Along Response Notice, and sell in the Tag-Along Sale, an amount up to its Tag-Along Portion of Units and each Tag-Along Seller shall be entitled to sell the number of Units which it proposed to be Transferred as set forth in the Tag-Along Notice (reduced, to the extent necessary, so that each Tagging Person shall be able to include its Tag-Along Portion or the portion thereof elected to be included by such Tagging Person, which shall not exceed its Tag-Along Portion). Each Tag-Along Response Notice shall include wire transfer instructions for payment of the purchase price for the Units to be sold in such Tag-Along Sale. Each Tagging Person that exercises its Tag-Along Rights hereunder shall deliver to the Tag-Along Seller, with the Tag-Along Response Notice, a limited power-of-attorney authorizing the Tag-Along Seller to Transfer the Units of such Tagging Person to be included in the Tag-Along Sale, on the terms set forth in the Tag-Along Notice, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Units pursuant to the Tag-Along Notice, and other documents requested by the Tag-Along Seller. Delivery of the Tag-Along Response Notice shall constitute an irrevocable acceptance of the Tag-Along Offer by such Tagging Person, and such other documents requested by the Tag-Along Seller.
(iv) If, at the end of a 90-day period after such delivery of such Tag-Along Response Notice (which 90-day period shall be extended if any of the transactions contemplated by the Tag-Along Offer are subject to regulatory approval until the expiration of ten (10) days after all such approvals have been received), the Tag-Along Seller have not completed the Transfer of all such Units, on substantially the same terms and conditions set forth in the Tag-Along Notice, the Tag-Along Seller shall (A) return to each Tagging Person the limited power-of-attorney that such Tagging Person delivered pursuant to this Section 8.04(b) and any other documents in the possession of the Tag-Along Seller executed by the Tagging Persons in connection with the proposed Tag-Along Sale, and (B) not conduct any Transfer of Units without again complying with this Section 8.04(b), if applicable.
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(v) In the event a Tag-Along Sale is consummated, each Member shall receive in exchange for the Units sold by such Member an amount equal to the amount such Member would have received in respect of such Member’s sold Units if the aggregate consideration from the Tag-Along Sale had been distributed by the Company in complete liquidation pursuant to Section 9.03; provided that, if less than all of the Units of the Company are included in the Tag-Along Sale, then the allocation of such aggregate consideration shall be determined by the Board of Managers in good faith based on the enterprise value of the Company, which shall be computed based upon the consideration being paid in the Tag-Along Sale, and, if necessary, the type and amount of securities sold by the parties in the Tag-Along Sale will be adjusted in good faith as determined by the Board of Managers.
(c) Concurrently with the consummation of the Tag-Along Sale, the Tag-Along Seller shall (i) notify the Tagging Persons thereof and (ii) remit to the Tagging Persons the total consideration for the Units of the Tagging Persons Transferred pursuant thereto, with the cash portion of the purchase price paid by wire transfer of immediately available funds in accordance with the wire transfer instructions in the applicable Tag-Along Response Notices.
(d) If at the termination of the Tag-Along Notice Period any other Member shall not have elected to participate in the Tag-Along Sale, such Member shall be deemed to have waived its rights under Section 8.04(a) with respect to the Transfer of its Units pursuant to such Tag-Along Sale; provided that in no event shall such Member be deemed to have waived its rights under this Section 8.04 with respect to any future Tag-Along Sale.
(e) Notwithstanding anything contained in this Section 8.04, there shall be no liability on the part of the Tag-Along Seller to the Tagging Persons (other than the obligation to return any limited powers-of-attorney received by the Tag-Along Seller) if the Transfer of Units pursuant to this Section 8.04 is not consummated for whatever reason. Whether to effect a Transfer of Units pursuant to this Section 8.04 by the Tag-Along Seller is in the sole and absolute discretion of the Tag-Along Seller.
(f) The provisions of this Section 8.04 shall terminate upon the occurrence of the Initial Public Offering and shall not apply to any proposed Transfer of Units to a Permitted Transferee of the Tag-Along Seller; provided that this Section 8.04 shall apply to a subsequent Transfer of Units by such Permitted Transferee other than as provided by this Section 8.04(f).
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ARTICLE
IX
DISSOLUTION; LIQUIDATION
(a) the decision of the Board of Managers to dissolve the Company provided however that both the Alliance Member and the PanOptic Member must provide written consent for such Dissolution; or
(b) any other event sufficient under the Act to cause the dissolution of the Company.
Notwithstanding anything to the contrary, the occurrence of any event set forth in Section 18-304 of the Act (Events of Bankruptcy) with respect to a Member (or similar Bankruptcy or insolvency event under any law or statute governing such Member) shall not cause such Member to cease to be a Member and, upon the occurrence of such an event, the Company shall continue without dissolution.
(a) Dissolution of the Company shall be effective as of the date on which the event occurs giving rise to the dissolution and all Members shall be given prompt notice thereof in accordance with Article XI, but the Company shall not terminate until the assets of the Company have been distributed as provided for in Section 9.03(c). Notwithstanding the dissolution of the Company, prior to the termination of the Company, the business, assets and affairs of the Company shall continue to be governed by this Agreement.
(b) Upon the dissolution of the Company, the Board of Managers, or, if there is no Board of Managers, a Person selected by the mutual agreement of the Alliance Member and the PanOptic Member, shall act as the liquidator (the “Liquidator”) of the Company to wind up the Company. The Liquidator shall have full power and authority to sell, assign and encumber any or all of the Company’s assets and to wind up and liquidate the affairs of the Company in an orderly and business-like manner.
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(c) The Liquidator shall distribute all proceeds from liquidation in the following order of priority:
(i) first, to creditors of the Company (including creditors who are Members) in satisfaction of the liabilities of the Company (whether by payment or the making of reasonable provision for payment thereof); and
(ii) second, to the Members in the same manner in which distributions are made pursuant to Article V.
(d) The Liquidator shall determine whether any assets of the Company shall be liquidated through sale or shall be distributed in kind. A distribution in kind of an asset to a Member shall be considered, for the purposes of this Article IX, a distribution in an amount equal to the fair market value of the assets so distributed as determined by the Liquidator in its reasonable discretion.
ARTICLE
X
AMENDMENTS
(a) Change in Name or Location. A change in the name of the Company or the location of the principal place of business of the Company;
(b) Change in Members. The admission, dilution, substitution, termination or withdrawal of any Member in accordance with the provisions of this Agreement;
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(d) Changes Which are Inconsequential, Curative or Required. A change that is:
(i) of an inconsequential nature and does not adversely affect any Member in any material respect;
(ii) necessary or desirable to cure any ambiguity or to correct or supplement any provisions of this Agreement;
(iii) required or specifically contemplated by this Agreement;
(iv) necessary to reflect the current Board of Managers on Schedule II following the designation of a replacement Manager by notice to the Board of Managers and the Members in accordance with the provisions of Section 4.01(a); or
(v) necessary to reflect the current Contributions and number of Units held by each Member on the Company Register, following any change to such items in accordance with the provisions of this Agreement; and
ARTICLE
XI
NOTICES
if to the Company, to:
SyncHealth, LLC d/b/a Trxade MSO
0000 Xxxx Xxx
Xxxxxx, XX 00000
Attention: Chief Executive Officer
and if to any Member, to the address or facsimile set forth on the Schedules to this Agreement or any other address or facsimile number as a party may hereafter specify for such purpose to the Company.
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All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a business day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in the place of receipt.
ARTICLE
XII
REPRESENTATIONS
(a) if other than an individual, it is duly organized, validly existing and in good standing under the laws of the jurisdiction where it purports to be organized;
(b) unless disclosed to the Company in writing on or prior to the date hereof, it is a United States person (as defined in Section 7701(a) of the Code);
(c) it has full power and authority to enter into and perform this Agreement;
(d) all actions necessary to authorize the signing and delivery of this Agreement, and the performance of obligations under it, have been duly taken;
(e) this Agreement has been duly signed and delivered by a duly authorized officer or other representative of such Member (if such Member is not an individual) and constitutes the legal, valid and binding obligation of such Member enforceable in accordance with its terms (except as such enforceability may be affected by applicable bankruptcy, insolvency or other similar laws affecting creditors’ rights generally, and except that the availability of equitable remedies is subject to judicial discretion);
(f) no consent or approval of any other Person is required in connection with the signing, delivery and performance of this Agreement by such Member;
(g) the signing, delivery and performance of this Agreement do not violate the organizational documents of such Member (if such Member is not an individual) or any material agreement to which such Member is a party or by which it or its assets are bound; and
(h) all representations and warranties made by a Member in the Subscription Agreements are incorporated herein by reference.
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ARTICLE XIII
Section 13.01 Governing Law. THIS AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT, AND ANY CLAIM OR CONTROVERSY DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT (WHETHER BASED UPON CONTRACT, TORT OR ANY OTHER THEORY), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO ANY CONFLICT OF LAWS PROVISION THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.
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(a) any and all amendments to this Agreement that may be permitted or required by this Agreement or the Act, including amendments required to effect the admission of Additional Members or Substituted Members pursuant to and as permitted by this Agreement or to revoke any admission of a Member which is prohibited by this Agreement or the issuance of any Units or Equity Securities;
(b) any certificate of cancellation of the Certificate that may be necessary upon the termination of the Company;
(c) any business certificate, certificate of formation, amendment thereto, or other instrument or document of any kind necessary to accomplish the Company Business;
(d) all conveyances and other instruments or documents that the Board of Managers deems appropriate or necessary to effectuate or reflect the dissolution, liquidation or winding-up of the Company pursuant to the terms of this Agreement;
(e) compliance with Sections 8.04;
(f) all conveyances and other instruments or documents that the Board of Managers deems appropriate or necessary to effectuate or reflect the conversion, contribution or other actions contemplated by Section 13.16; and
(g) all other instruments that may be required or permitted by law to be filed on behalf of the Company and that are not inconsistent with this Agreement.
The Board of Managers shall not take action as attorney-in-fact for any Member which would in any way increase the liability of the Member beyond the liability expressly set forth in this Agreement or which would diminish the substantive rights of such Member. Each Member authorizes such attorneys-in-fact to take any further action which such attorneys-in-fact shall consider necessary or advisable in connection with any of the foregoing, hereby giving such attorneys-in-fact full power and authority to do and perform each and every act or thing whatsoever necessary or advisable to be done in and about the foregoing as fully as such Member might or could do if personally present, and hereby ratifying and confirming all that such attorneys-in-fact shall lawfully do or cause to be done by virtue hereof. The appointment by each Member of the Board of Managers and its duly authorized officers, agents, successors and assigns with full power of substitution and resubstitution, as aforesaid, as attorneys-in-fact shall be deemed to be a power coupled with an interest in recognition of the fact that each of the Members under this Agreement shall be relying upon the power of the Board of Managers and such officers, managers, agents, successors and assigns to act as contemplated by this Agreement in such filing and other action by it on behalf of the Company. The foregoing power of attorney shall survive the Transfer by any Member of the whole or any part of its Interests hereunder. The foregoing power of attorney may be exercised by such attorneys-in-fact by listing all of the Members executing any agreement, certificate, instrument or document with the signatures of such attorneys-in-fact acting as attorneys-in-fact for all of them.
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Section 13.16 Roll-Up Transaction in Connection with an Initial Public Offering, Tag-Along Sale. Notwithstanding anything to the contrary contained herein, in connection with the Initial Public Offering or a Tag-Along Sale, and upon the request of the Board of Managers, each of the Members hereby agrees that it will, at the expense of the Company, take such action and execute such documents as may reasonably be requested to effect such Initial Public Offering or Tag-Along Sale, including taking all such actions and executing such documents as may reasonably be requested to convert the Company into a corporation or to contribute its respective Units or other Equity Securities to a corporation, in each case substantially concurrently with the closing of the Initial Public Offering or Tag-Along Sale, as applicable (a “Roll-Up Transaction”); provided, that, in connection with any Roll-Up Transaction, the Members shall be entitled to receive that value of capital stock of the corporation whose shares of capital stock are being sold in connection with such Initial Public Offering or Tag-Along Sale, as applicable, as equals the amount such Member would be entitled to receive, relative to the Units or other Equity Securities which such Member held in the Company immediately prior to such conversion or contribution, under Section 9.03 if a liquidation of the Company had occurred immediately prior to the consummation of such Initial Public Offering or Tag-Along Sale, as applicable, with the proceeds in such liquidation equal in amount to the implied aggregate equity valuation of such corporation immediately prior to the consummation of such Initial Public Offering or Tag-Along Sale, as applicable; provided, further, that the shares of capital stock received by each such Member shall as nearly as practicable provide the Member with the same economic and other rights, as such Member was entitled to prior to such conversion or contribution.
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Section 13.17 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE DELAWARE COURT OF CHANCERY (OR, IF THAT COURT DOES NOT HAVE JURISDICTION, TO THE SUPERIOR COURT OF NEW CASTLE COUNTY DELAWARE) AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH COURTS. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED 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 SECTION, AND STIPULATES THAT THE DELAWARE COURT OF CHANCERY (OR, IF THAT COURT DOES NOT HAVE JURISDICTION, THE SUPERIOR COURT OF NEW CASTLE COUNTY DELAWARE) SHALL HAVE IN PERSONAM JURISDICTION AND VENUE OVER EACH OF THE PARTIES FOR THE PURPOSE OF LITIGATING ANY DISPUTE, CONTROVERSY, OR PROCEEDING ARISING OUT OF OR RELATING IN ANY WAY WHATSOEVER TO THIS AGREEMENT. EACH PARTY HEREBY AUTHORIZES AND AGREES TO ACCEPT SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST IT AS CONTEMPLATED BY THIS SECTION BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, TO ITS ADDRESS FOR THE GIVING OF NOTICES AS SET FORTH IN THIS AGREEMENT.
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SYNCHEALTH MSO, LLC | ||
MANAGERS: | ||
By: | Alliance Pharma Solutions, LLC | |
Its: | Manager | |
By: | ||
Name: | Xxxxxxxx Xxxxxxxx | |
Title: | Chief Executive Officer | |
By: | PanOptic Health, LLC | |
Its: | Manager | |
By: | ||
Name: | Xxxxxx Xxxxxxx | |
Title: | Manager |
Signature Page To
Limited Liability Company Agreement Of SyncHealth LLC
MEMBERS: | ||
Alliance Pharma Solutions, LLC | ||
By: | ||
Name: | Xxxxxxxx Xxxxxxxx | |
Title: | Chief Executive Officer | |
PANOPTIC HEALTH, LLC | ||
By: | ||
Name: | Xxxxxx Xxxxxxx | |
Title: | Manager |
Signature Page To
Limited Liability Company Agreement Of Synchealth Llc
SCHEDULE I
The following is as of 1 January 2019:
Name of Member | Address | Capital Account | Number of Units | |||||||
Alliance Pharma Solutions, LLC | 0000
Xxxx X’ Xxxxx Xxxx. Xxxx X’ Xxxxx, XX 00000 Attention: Xxxxx Xxxxxxxx | $ | 250,000 | 300,000 | ||||||
PanOptic Health, LLC | 0000
Xxxxxx Xxxxxx Xx., Xxxxx 000-000 Xxxxxx, XX 00000 ATTN: Xxxxxx Xxxxxxx | $ | 100 | 700,000 | ||||||
TOTAL | 1,000,000 |
Schedule I To
Limited Liability Company Agreement Of Synchealth Llc
SCHEDULE II
BOARD OF MANAGERS
The following is as of 1 January 2019:
Xxxxxx Xxxxxxx (PanOptic Manager)
Xxxxx Xxxxx (Alliance Manager)
TBD (Independent Manager)
Schedule II To
Limited Liability Company Agreement Of Synchealth Llc
LIMITED LIABILITY COMPANY AGREEMENT
OF
SYNCHEALTH MSO, LLC
A DELAWARE LIMITED LIABILITY COMPANY
Dated as of 1 January 2019
THE MEMBERSHIP INTERESTS AND UNITS REPRESENTED BY THIS SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH INTERESTS MAY NOT BE SOLD, OFFERED, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND COMPLIANCE WITH THE OTHER SUBSTANTIAL RESTRICTIONS ON TRANSFER SET FORTH HEREIN.
SUCH INTERESTS ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER SPECIFIED IN THIS AGREEMENT, AND THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH INTERESTS UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO ANY TRANSFER.