OPERATING AGREEMENT
OF
CELTIC BREW LLC
a New York limited liability company
This Operating Agreement (the "Agreement") is entered into as of
December 2, 1996, by and among American Craft Brewing International Limited, a
Bermuda company ("AmBrew International"), and Xxxxx XxXxxxxxx (collectively, the
"Members").
The parties have agreed to organize and operate a limited
liability company in accordance with the terms and subject to the conditions set
forth in this Agreement.
The parties agree as follows:
1. Organization. The parties hereby organize a limited liability
company pursuant to the New York Limited Liability Company Law (the "Act") and
the provisions of this Agreement and, for that purpose, authorize and direct
AmBrew International to execute and file the Articles of Organization of this
limited liability company with the New York Department of State ("Department of
State").
2. Name. The name of the limited liability company shall be
Celtic Brew LLC (the "Company").
3. Purpose. The purpose of the Company is to engage in any lawful
act or activity for which limited liability companies may be formed under the
Act and to engage in any and all activities necessary or incidental thereto.
4. Principal Office. The Company's principal place of business
shall be located at Xxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxx
00000. The Company may have such other business offices within or without the
State of New York as determined from time to time.
5. Term. The term of the Company shall begin upon the filing of
the Articles of Organization with the Department of State and shall continue
until dissolved in accordance with this Agreement.
6. Members; Percentage Interests. (a) The name, present mailing
address and percentage interest (the "Percentage Interest") of each Member is
set forth on Exhibit A.
(b) Whenever a new Member is admitted, Exhibit A shall be amended
to reflect the changes in Percentage Interests of Members for succeeding
periods determined on the basis of the terms upon which the new Member is
admitted.
(c) Whenever a Member withdraws or is expelled, Exhibit A shall
be amended to give effect to the changes in Percentage Interests of Members
for succeeding periods resulting from the withdrawal or expulsion.
7. Capital Contributions; Capital Accounts. (a) Upon the
execution of this Agreement, the Members shall respectively contribute to the
Company cash or other property in the amounts or having the net agreed value
respectively set forth on Exhibit A (the "Initial Capital Contributions").
(b) Except as otherwise provided in this Agreement or by
applicable law, no Member shall be required to make additional capital
contributions without his consent. Except with the consent of the Managing
Member (defined below), no Member shall be entitled to make any additional
capital contribution.
(c) There shall be established and maintained for each Member a
separate capital account ("Capital Account"). There shall be added to the
Capital Account of each Member (i) the amount of any money, and the net
agreed value (the "Carrying Value") of any other property, contributed by the
Member to the Company as capital and (ii) income and gain allocated to the
Member by the Company in accordance with Section 8 of this Agreement, and
there shall be subtracted from such Capital Account (x) the amount of any
money, and the fair market value of any other property, distributed to the
Member and (y) losses and expenses allocated to the Member by the Company in
accordance with Section 8 of this Agreement. If property other than cash is
distributed to the Members (whether in liquidation of the Company or
otherwise), for purposes of computing Capital Accounts the property will be
deemed to have been sold by the Company for its fair market value and the
income, gain, loss or expense from the deemed sale will be allocated in
accordance with Section 8.
(d) All capital, whenever contributed, shall be subject in all
respects to the risks of the business and subordinate in right of payment to
the claims of present or future creditors of the Company and of any successor
firm in accordance with this Agreement.
(e) No interest shall be allowed to any Member by reason of the
amount of his capital contribution or Capital Account except as provided in
Section 20.
8. Allocations. (a) Subject to Section 8(c) and Section 8(d)
below, each item of income, gain, loss or expense of the Company for any period
shall be allocated to the Members' Capital Accounts in proportion to their
respective Percentage Interests for such periods except that: (i) if at the time
of any allocation the amount of any loss or expense to be allocated to a
Member's Capital Account would cause the Member's Capital Account to be less
than zero, then the Member's Capital Account shall be allocated that portion of
loss or expense that will cause the Member's Capital Account to equal
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zero,and the balance shall be reallocated among the Capital Accounts of all
other Members (to the extent that doing so would not cause such Capital Accounts
to be less than zero), pro rata in accordance with the balances of the other
Members' Capital Accounts immediately prior to the reallocation (any such
reallocated loss or expense being sometimes called an "Additional Loss
Allocation") and (ii) at the time of any allocation of income or gain, any
Member has an "Unreimbursed Additional Loss Allocation" (as defined below), then
the income or gain of the Company being allocated at the time shall be allocated
(A) first to the Capital Accounts of Members who have Unreimbursed Loss
Allocations, pro rata in accordance with the respective aggregate amounts of
such Member's Unreimbursed Additional Loss Allocations at the time, until there
shall be no remaining Unreimbursed Additional Loss Allocations and (B)
thereafter, except as otherwise required by Section 8(c) and Section 8(d), in
accordance with Members' Percentage Interests. "Unreimbursed Additional Loss
Allocation" of a Member at any time shall mean the excess, at the time, of the
aggregate amount of all Additional Loss Allocations allocated to the Member's
Capital Account up to that time over the aggregate amount of income or gain
allocated to the Member's Capital Account pursuant to the clause (ii)(A) of the
preceding sentence up to that time.
(b) Income, gain, loss, and expenses shall be determined for this
purpose in the same manner used in determining the Company's taxable income
or loss for federal income tax purposes, except that (i) there shall be added
any income exempt from federal income tax; (ii) there shall be subtracted any
expenditures that are neither deductible nor chargeable to capital account;
(iii) in the case of any property contributed as capital, Carrying Value
rather than adjusted tax basis shall be used to compute gain or loss
resulting from any disposition of the property and depreciation, amortization
and other cost recovery deductions and similar items of income or deduction
in respect of such property shall be calculated as if the adjusted tax basis
of the asset were its Carrying Value; (iv) unrealized gain or loss
attributable to any property distributed to Members shall be deemed realized
immediately prior to the distribution and (v) appropriate adjustments shall
be made to reflect any deemed sale or purchase of assets and deemed
realization of items of income, gain, loss or expense as a result of a
revaluation of assets upon the admission, withdrawal or expulsion of a Member
as provided for herein. Such allocations shall be made for each period (an
"Allocation Period") commencing with the date of the filing of the Articles
of Organization with the Department of State or the day after an Allocation
Event and ending on the date of the next succeeding Allocation Event. An
"Allocation Event" shall mean any one of the following: (i) the end of a
calendar year, (ii) the admission, withdrawal or expulsion of a Member, (iii)
the termination of the Company for federal income tax purposes, (iv) the
dissolution of the Company and (v) any other event which the Members, in
their discretion, designate as an "Allocation Event". In case any person
shall be admitted as a new Member to the Company, or any Member shall
withdraw or be expelled from the Company or shall die, the Company shall be
deemed to have sold its assets for their respective fair market values, as
determined in good faith by the Managing Member, and concurrently repurchased
such assets, on the date of such event for the same consideration.
(c) In accordance with Section 704(c) of the Internal Revenue
Code of 1986, as amended (such Code, as amended from time to time or any
successor federal income tax legislation, being herein called the "Code"),
income, gain, loss and expense with respect to any property contributed to
the capital of the Company shall, solely for income tax purposes, be
allocated among
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the Members so as to take account of any variation between the adjusted
basis of such property of the Company for federal income tax purposes and
the Carrying Value of such contributed property.
(d) (i) Notwithstanding subsection 8(a), if a Member unexpectedly
receives any adjustments, allocations or distributions described in clause
(ii) of this Section 8(d), items of income and gain shall be specially
allocated to the Member's Capital Account so as to eliminate the Adjusted
Capital Account Deficit (as hereinafter defined) as quickly as possible.
(ii) An "Adjusted Capital Account Deficit" shall be the
deficit balance in a Member's Capital Account as of the end of a fiscal year,
decreased by:
(A) allocations of deduction and loss to the Member that
are reasonably expected to be made in subsequent years by reason
of a gift of an equity interest in the Company, varying equity
interests in the Company during a fiscal year, or a distribution
of unrealized receivables or inventory items (as described in
Section 1.704-1(a)(2)(ii)(d)(5) of the Treasury Regulations under
the Code); and
(B) distributions to the Member that are reasonably
expected to be made in subsequent years in excess of offsetting
increases to the Member's Capital Account that are reasonably
expected to occur.
(iii) Any allocation of items of income or gain pursuant
to clause (i) of this Subsection 8(d) shall be taken into account in
computing subsequent allocations under this Section, so that the net effect
of the allocations under this Subsection shall be the same as if no
allocation had been made under this Subsection.
(iv) This Subsection (d) is intended to comply with the
provisions of Treasury regulation Section 1.704-1(b)(2)(ii)(d) and shall be
applied in a manner consistent with that intent.
9. Distributions. (a) Except as otherwise provided in Section
9(b) and Section 20 below or as otherwise required by the Act, distributions to
Members shall be made at such time and in such form and amounts as the Managing
Member shall from time to time determine; provided, however, that all such other
distributions shall be made pro rata in accordance with the respective Members'
Percentage Interests at the time of the distribution.
(b) To the extent the Company is required by law to make tax
payments on behalf of a Member, such payments shall be treated as
distributions to the Member on whose behalf the payment is made.
10. Management. (a) There shall at all times be one Member who is
designated the Managing Member of the Company to serve until a successor is
elected or appointed as provided herein. AmBrew International is hereby
appointed as the initial Managing Member. The property, business and affairs of
the Company shall be managed by its Managing Member. Except where the Members'
approval is expressly required by this Agreement or by the Act, the Managing
Member shall
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have full authority, power and discretion to make all decisions with respect to
the Company's business and to perform such other services and activities as set
forth in this Agreement. The Managing Member shall be agent of the Company for
the purpose of its business and the act of the Managing Member, including the
execution in the name of the Company of an instrument, for apparently carrying
on in the usual way the business of the Company shall bind the Company, unless
(i) the Managing Member has in fact no authority to act for the Company in the
particular matter and (ii) the person with whom the Managing Member is dealing
has knowledge that the action has not been so approved. Unless otherwise
expressly authorized by this Agreement or the Members as set forth herein, the
act of the Managing Member that is not apparently for carrying on the Company's
business in the ordinary course shall not bind the Company.
(b) Except as otherwise expressly provided in this Agreement or
the Act, no Member, solely by reason of being a Member, shall have the right
to control or manage, or shall take any part in the control or management of,
the property, business or affairs of the Company.
(c) Members, by a vote of the majority in interest of all of the
Members, may elect additional Managing Members at any meeting of Members.
Members may at any time, at a meeting at which a quorum is present remove a
Managing Member with or without cause.
(d) The Managing Member need not be an individual or a resident
of the State of New York. A Managing Member shall automatically cease to be a
Managing Member if such Managing Member ceases to be a Member. The Managing
Member may from time to time create or designate additional classes of
managers or officers having such relative rights, powers, duties, preferences
and limitations as the Managing Member shall determine, subject to the
limitations set forth in this Agreement.
(e) Except as otherwise provided in this Agreement, any vacancy
occurring for any reason in the office of the Managing Member, whether
resulting from the death, resignation or removal of the Managing Member or
otherwise, may be filled only by a vote of the majority in interest of all of
the Members; provided, however, that no Managing Member may be elected
pursuant to this Section unless, in the opinion of counsel to AmBrew
International, the election would not adversely affect the Company's status
as a partnership for United States federal income tax purposes.
(f) No Member shall be elected or shall continue as the Managing
Member if such Member's Percentage Interest is not at least 1%.
11. Meetings of and Voting by Members. (a) A meeting of the
Members may be called at any time by those Members holding an aggregate of at
least 25% of the Percentage Interests then held by Members. Meetings of Members
shall be held at the Company's principal place of business or at any other place
agreed to by the Managing Member. Not less than 10 nor more than 60 days before
each meeting, the person calling the meeting shall give written notice of the
meeting to each Member entitled to vote at the meeting. The notice shall state
the place, date, hour and purpose of the meeting. Notwithstanding the foregoing
provisions, each Member who is entitled to notice waives
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notice if before or after the meeting the Member signs a waiver of the notice
which is filed with the records of Members' meetings, or is present at the
meeting in person or by proxy without objecting to the lack of notice. Unless
this Agreement provides otherwise, at a meeting of Members, the presence in
person or by proxy of Members holding not less than a majority of the Percentage
Interests then held by Members constitutes a quorum. A Member may vote either in
person or by written proxy signed by the Member or by the Member's duly
authorized attorney in fact.
(b) Each Member shall be entitled to vote on all matters
presented to the Members.
(c) Except as otherwise provided in this Agreement, the
affirmative vote of Members holding at least a majority of the Percentage
Interests then held by all the Members, at a meeting at which a quorum is
present, shall be required to approve any matter coming before the Members,
including, without limitation, each of the following:
(i) approval of the sale, exchange, lease, mortgage,
pledge or other transfer of all, or substantially all, of the assets or
business of the Company;
(ii) approval of a merger or consolidation of the Company
with or into another limited liability company, foreign limited
liability company or other entity;
(iii) assignment for the benefit of creditors of the
Company, filing of a voluntary bankruptcy petition, or consent to an
involuntary petition, under Title 11 of the United States Bankruptcy
Code or under the laws of the Republic of Ireland; and
(iv) amendment of the Articles of Organization.
(d) In lieu of holding a meeting, the Members may vote or
otherwise take action by a written instrument indicating the consent of the
Members holding such Percentage Interests as would be required for Members to
take action under this Agreement. If such consent is not unanimous, prompt
notice shall be given to those Members who have not consented in writing but
who would have been entitled to vote thereon had such action been taken at a
meeting.
(e) Members may participate in a meeting by conference telephone
or similar communications equipment, by means of which all persons
participating in the meeting can hear each other, and such participation
shall constitute presence in person at such meeting.
(f) The affirmative vote of disinterested Members holding a
majority of the Percentage Interests held by all disinterested Members shall
be required for loaning funds to, or guaranteeing any obligation or liability
of, or entering into any other agreement, transaction or arrangement with any
Member, Managing Member or any affiliate of any thereof by the Company.
12. Creation of Different Classes of Membership Interests. With
the consent of Members holding not less than a majority of the aggregate
Percentage Interests of all Members, the Company may issue membership interests
(including warrants, options, rights or convertible
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instruments), from time to time in one or more classes, or one or more series of
such classes, which classes or series shall have, subject to the provisions of
applicable law, such designations, preferences and relative, participating,
optional or other special rights as shall be fixed by such Members, including,
without limitation, with respect to (a) the allocation of income, gain, loss or
expense to each such class or series; (b) the right of each such class or series
to share in distributions; (c) the rights of each such class or series upon
dissolution and liquidation of the Company; and (d) the right of each such class
or series to vote on, or take action with respect to, Company matters, including
matters relating to the relative rights, preferences and privileges of such
class or series, to the extent permitted by applicable law, if any such class or
series is granted such voting rights.
13. Assignments. (a) A Member may not sell, assign or otherwise
transfer in whole or in part such Member's membership interest in the Company
without the written consent of the Managing Member, which consent may be
withheld in its sole discretion. Any sale, assignment or other transfer that is
not in compliance with this Section shall be null and void. All buyers,
assignees and other transferees are subject to the requirements of admission as
an additional Member pursuant to Section 15.
(b) The restrictions set forth in this Section shall not apply to
the transfer of a membership interest from a deceased Member to his personal
representative or estate.
14. Withdrawal and Expulsion. (a) Any Member may withdraw from
the Company by giving written notice to the Members of his election to do so,
and such withdrawal shall be effective at the expiration of 3 months after the
giving of such notice or at such earlier date as shall be fixed by the Managing
Member. Promptly upon receipt of such notice, the Managing Member shall give the
other Members written notice of such election to withdraw. Until such withdrawal
becomes effective, such Member shall in all respects continue to be a Member
hereunder.
(b) With the consent of Members holding a majority of the
Percentage Interests, the Managing Member shall have the right to expel and
cause the withdrawal of any Member from the Company for Cause (as defined
herein) at any time by delivering to such Member a written notice setting
forth the effective date of his expulsion and stating that such expulsion is
for Cause pursuant to this Section 14(b), and on the date so fixed, such
Member shall automatically withdraw and cease to be a Member. For purposes of
this Section 14(b), Cause shall mean:
(i) any conduct by a Member in the course of the Company's
business other than in good faith; or
(ii) any breach by a Member of any material obligation
under this Agreement not cured within 10 days after notice in writing
from the Managing Member.
15. Admission of Additional Members by the Company. One or more
additional Members of the Company may be admitted to the Company at any time or
from time to time with the affirmative vote of Members holding a majority in
Percentage Interests of all Members and upon such
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terms and conditions as such Members may approve. Each new Member will be
required to execute an agreement pursuant to which such Member becomes bound by
the terms of this Agreement.
16. Events of Dissolution. The Company shall be dissolved upon
the happening of any of the foll wing events:
(a) the affirmative vote of Members holding a majority
of the Percentage Interests held by all Members;
(b) the death, incapacity, bankruptcy, dissolution, expulsion or
withdrawal of a Member unless the remaining Members, by the affirmative vote
of Members holding a majority of the Percentage Interests held by the
remaining Members, within 90 days thereafter, elect to continue the business
of the Company pursuant to the terms of this Agreement; or
(c) the entry of a decree of judicial dissolution under Section
702 of the Act.
17. Liability of Members. The Members shall not have any
liability (personal or otherwise) for the obligations or liabilities of the
Company except to the extent provided in the Act.
18. Exculpation of Managing Member. The Managing Member shall not
have liability (personal or otherwise) to the Company or its Members for damages
for any breach of duty in such capacity, provided that nothing in this Section
shall eliminate or limit the liability of the Managing Member if a judgment or
other final adjudication adverse to him establishes that his acts or omissions
were in bad faith or involved intentional misconduct or a knowing violation of
law or that he personally gained in fact a financial profit or other advantage
to which the Managing Member was not legally entitled or that with respect to a
distribution to Members the acts of the Managing Member were not performed in
accordance with the Act.
19. Indemnification. To the fullest extent permitted by law, the
Company shall indemnify and hold harmless the Managing Member and Members of the
Company and their respective directors, trustees, shareholders, officers,
employees and agents (collectively, the "Indemnitees"), from and against any and
all costs, liabilities, claims, expenses, including reasonable attorneys' fees,
and damages (collectively, "Losses") paid or incurred by any such Indemnitee in
connection with the conduct of the Company's business in accordance with this
Agreement and the Act, except that no Indemnitee shall be entitled to
indemnification in respect of any Loss incurred by such Indemnitee by reason of
such Indemnitee's willful misconduct. Any indemnity under this Section shall be
provided out of and to the extent of Company assets only and no Member shall
have any personal liability on account thereof. All rights of an Indemnitee
under this Section shall survive the dissolution of the Company and the
withdrawal of the Indemnitee from membership in the Company and shall inure to
the benefit of its heirs, personal representatives, successors and assigns.
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20. Liquidation; Payments to Deceased, Incapacitated, Dissolved,
Withdrawing and Expelled Members if Business is Continued. (a) Upon dissolution
of the Company, unless the remaining Members elect to continue the business of
the Company as provided above, the Managing Member (or if the Managing Member
refuses, such other person selected by the Members) shall be the liquidator of
the Company (collectively, the "Liquidator"). The Liquidator shall liquidate the
assets of the Company and apply and distribute the proceeds of such liquidation
in the following order of priority, unless otherwise required by mandatory
provisions of applicable law:
(i) to creditors of the Company (including Members);
(ii) to the Members, to the extent of and in proportion to
the balances in their respective Capital Accounts, after adjustment to
reflect any income, gain, loss or expense for the fiscal year (as
defined in Section 24 herein) in which such liquidation occurs; and
(iii) the balance, if any, to the Members in proportion
to their then Percentage Interests.
provided, however, that the Liquidator may place in escrow a reserve of cash
or other assets of the Company for contingent liabilities in an amount
determined by the Liquidator to be appropriate for such purposes.
(b) In case a Member (the "Affected Member") withdraws or
is expelled, the following shall be applicable:
(i) The Percentage Interest of any such Affected Member
shall cease on the date immediately following the effective date of such
withdrawal or expulsion (such date is the "termination date").
(ii) The Company shall deliver to the Affected Member or
his personal representative any property owned by the Member that is in
the possession of the Company and shall pay to the Member or his
personal representative the balance of any amount owed by the Company to
the Member (other than any amount owed with respect to the Member's
Capital Account) less any amounts due the Company by such Member,
including amounts payable pursuant to Section 20(b)(iv).
(iii) The Company shall pay to the Affected Member or his
personal representative an amount equal to the positive balance in such
Member's Capital Account as of the date of the termination date
determined after making all appropriate adjustments to reflect any
events occurring at or prior to the date of the termination date. In
determining items of income, gain, loss, and expense for the Allocation
Period ending on the date of the termination date, it shall be assumed
that all property owned by the Company was sold on the termination date
for its fair market value as determined by the Managing Member.
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(iv) Payments to an Affected Member or his personal
representative of amounts due under this Section shall be made in cash
or, in case payment in cash is not reasonably practicable (in the
judgment of the Managing Member), in other property having, in the
reasonable opinion of the Managing Member, a fair market value equal to
the amount due, (aa) in the case of a Member who withdraws voluntarily
in three equal annual installments, the first of which shall be payable
on the first annual anniversary of the first January 1, April 1, July 1
or October 1 next following the date of withdrawal; (bb) in the case of
any Member expelled for Cause, in five equal annual installments, the
first of which shall be payable on the first annual anniversary of the
first January 1, April 1, July 1 or October 1 next following the date of
expulsion; and (cc) in any other case on the last day of the twelve
month period commencing on the first calendar quarter next following the
date of dissolution; provided, however, that the Managing Member may
elect to pay any unpaid amount due the Member at any earlier time in its
discretion.
(v) Any net amount due to the Company from an Affected
Member or due from the Company to an Affected Member or his personal
representative shall bear interest from the date of dissolution until
paid at a rate per annum equal to the rate announced by The Chase
Manhattan Bank (and its successors) in New York City from time to time
as its prime rate, changing as and when said prime rate shall change.
21. Right to Compel Cash Sale. (a) If any Member or group of
Members holding at least 51% of the Percentage Interests (which Member or group
is referred to herein as the "51% Group") proposes to sell, assign or otherwise
transfer ("Transfer") for cash all Percentage Interests owned by the 51% Group
to a purchaser (the "Purchaser") in an arms-length transaction, it may, at its
option, require the remaining Members to Transfer all, but not less than all, of
the Percentage Interests owned by them to the Purchaser on the same terms and
conditions upon which the 51% Group is selling its Percentage Interests. If
AmBrew International holds more than 50% of the Company's Percentage Interests
and the Purchaser offers to purchase for cash consideration other assets of
AmBrew International in addition to the Percentage Interests of the 51% Group,
then the Company shall retain an independent investment bank to value the
Designated Interests (defined below) and the 51% Group, if it has exercised its
option under this Section 21, shall be obligated to pay such value to the
Members other than those that are part of the 51% Group.
(b)(i) The Percentage Interests to be Transferred by
each of the Members other than those that are part of the 51% Group are referred
to in this Section 21 as the "Designated Interests". The 51% Group shall give
notice of the exercise of their rights pursuant to this Section 21 to each of
the remaining Members setting forth the cash consideration to be paid by the
Purchaser and the other terms and conditions of such Transfer. Within 15 days of
such notice by the 51% Group, each of the remaining Members shall deliver to a
representative of the 51% group designated in the notice such instruments as may
be required to Transfer the Designated Interests held by such Member.
(ii) If, within 120 days after the 51% Group gives such
notice, the Transfer of all the Percentage Interests of the members in
accordance herewith is not completed, the 51%
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Group shall return to each remaining Member all instruments previously
delivered to such representative, and all the restrictions on sale or
other disposition contained in this Agreement with respect to membership
interests owned by Members shall again be in effect.
(iii) Simultaneously with the consummation of the Transfer
of membership interests of the 51% Group and of the remaining Members
pursuant to this Section 21, the 51% Group shall cause the Purchaser to
remit directly to each remaining Member the total sales price of the
Designated Interests of such Member Transferred pursuant hereto, and
shall furnish such other evidence of the completion and time of
completion of such sale or other disposition and the terms thereof as
may be reasonably requested by such Members. The 51% Group may deduct
from the sales price payable to each other Member pursuant to this
Section 21 such Member's pro rata portion of the out-of-pocket fees and
expenses payable in respect of the completion of such Transfer,
including, without limitation, reasonable brokers', legal and accounting
fees and expenses.
22. Buy-Sell Between Partners. (a) Either AmBrew International on
the one hand or the other Members acting collectively on the other hand (in
either case, the "Buy-Sell Offeror") may, by written notice (the "Buy-Sell
Selling Notice") to the other(s) (the "Buy-Sell Receiver"), offer to either:
(i) buy from the Buy-Sell Receiver all, but not less than
all, of the Buy-Sell Receiver's Percentage Interests in the Company
(whether of the Buy-Sell Offeror or the Buy-Sell Receiver, such
interests referred to as the "Buy-Sell Interests"); or
(ii) sell to the Buy-Sell Receiver all, but not less than
all, of the Buy-Sell Offeror's Buy-Sell Interests.
As used in this Section 22, the term "Selling Member" shall mean
the Member(s) that sells its Buy-Sell Interests and the term "Purchasing
Member" shall mean the Member(s) that purchases the Buy-Sell Interests of the
Selling Member. The Buy-Sell Selling Notice shall state the Buy-Sell
Offeror's desire to purchase the Buy-Sell Receiver's Buy-Sell Interests or
sell the Buy-Sell Offeror's Buy-Sell Interests in accordance with the terms
set out therein (collectively, the "Buy-Sell Transfer Terms"), which terms
shall (x) include, without limitation, the purchase or sales price for the
Buy-Sell Interests of the Buy-Sell Receiver or the Buy-Sell Offeror, as the
case may be, and (y) be subject to the provisions of this Section 22. The
Buy-Sell Selling Notice shall be a firm, legally binding and irrevocable
offer for 90 days from the date of its delivery to the Buy-Sell Receiver.
(b) The Buy-Sell Receiver shall, within 90 days after the date
upon which the Buy-Sell Selling Notice shall have been given by the Buy-Sell
Offeror, give a notice ("Buy-Sell Notice of Election") to the Buy-Sell
Offeror as to whether it desires (i) to sell its Buy-Sell Interests in
accordance with the Buy-Sell Transfer Terms or (ii) to purchase the Buy-Sell
Interests of the Buy-Sell Offeror in accordance with the Buy-Sell Transfer
Terms. In the event that the Buy-Sell Receiver elects to purchase the
Buy-Sell Interests of the Buy-Sell Offeror on the Buy-Sell Transfer Terms,
then the Buy-Sell Receiver shall deliver to counsel for the Buy-Sell Offeror
in escrow, by wire transfer of immediately available funds in accordance with
such escrow agent's instructions or by
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certified check or bank cashier's check, an amount equal to 5% of the portion
of the Buy-Sell purchase price, which amount will be released from escrow and
paid at closing to the Selling Member (the "Buy-Sell Deposit").
(c) In the event that, within the 90-day period referred to in
the last sentence to Section 22(a), either: (i) the Buy-Sell Receiver elects
to sell its Buy-Sell Interests in accordance with the Buy-Sell Transfer
Terms, or (ii) the Buy-Sell Receiver shall not have delivered a Buy-Sell
Notice of Election within such 90-day period to the Buy-Sell Offeror, or
(iii) the Buy-Sell Receiver shall have delivered a Buy-Sell Notice of
Election declining to purchase the Buy-Sell Interests of the Buy-Sell Offeror
in accordance with the Buy-Sell Transfer Terms, then, (x) the Buy-Sell
Receiver shall be deemed to have irrevocably elected to sell its Buy-Sell
Interests in accordance with the Buy-Sell Transfer Terms and (y) the Buy-Sell
Offeror shall be obligated to purchase, and the Buy-Sell Receiver shall be
obligated to sell, the Buy-Sell Receiver's Buy-Sell Interests in accordance
with the Buy-Sell Transfer Terms (provided that if the Buy-Sell Selling
Notice states the desire of the Buy-Sell Offeror to sell its Buy-Sell
Interests, the purchase price of the Buy-Sell Interests of the Buy-Sell
Receiver shall be the same price per Percentage Interest as the sales price
of the Buy-Sell Interests of the Buy-Sell Offeror contained in the Buy-Sell
Transfer Terms); in either case, the Buy-Sell Offeror shall then be the
Purchasing Member and the Buy-Sell Receiver shall be the Selling Member. Once
the Buy-Sell Receiver has by its action obligated the Buy-Sell Offeror to
purchase the Buy-Sell Interests of the Buy-Sell Receiver, the Buy-Sell
Offeror shall deliver to counsel for the Selling Member, in escrow, by wire
transfer of immediately available funds in accordance with such escrow
agent's instructions or by certified check or bank cashier's check, an amount
equal to the Buy-Sell Deposit.
(d) The closing date for purchasing the Selling Member's Buy-Sell
Interests (the "Buy-Sell Closing Date") shall be set by the Purchasing Member
in a notice to the Selling Member; provided, however, that the date so chosen
as the Buy-Sell Closing Date must not be later than 9 months after the
delivery of the Buy-Selling Notice (the "Buy-Sell Closing Period"); provided,
further, that the Buy-Sell Closing Period may be extended for an additional
45 day period if, prior to the end of the Buy-Sell Closing Period, the
Purchasing Member delivers to the Selling Member a binding commitment (which
is unconditional except for commercially reasonable and customary closing
conditions) from an institutional lender that is reasonably acceptable to the
Selling Member pursuant to which such institutional lender agrees to finance
all or a portion of the Buy-Sell Purchase Price on or prior to the end of
such 45 day extended period.
(e) On the Buy-Sell Closing Date the Purchasing Member shall
deliver by wire transfer or by a certified check or bank cashiers check drawn
upon a New York bank which is a member of the New York Clearing House
Association in a sum equal to the balance of that portion of the Buy-Sell
Purchase Price which is to be paid for the Buy-Sell Interests of the Selling
Member and shall otherwise comply with Buy-Sell Transfer Terms, and all
amounts paid into escrow by the Purchasing Member shall be released from
escrow and paid to the Selling Member.
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(f) The Buy-Sell Transfer Terms shall (i) require payment in cash
for the Buy-Sell Interests and (ii) require that the Buy-Sell Interests be
sold by the Selling Member free and clear of any liens and encumbrances
against same.
(g) On the Buy-Sell Closing Date, each Member shall execute,
acknowledge and deliver to each other Member such instruments, and take such
other actions, as such other Member shall reasonably request in order to
effectuate the purchase and sale of the Selling Member's Buy-Sell Interests
in accordance with the Buy-Sell Transfer Terms and otherwise in accordance
with the provisions of this Section 22; provided, however, that no Selling
Member shall be required to make any representations to any Purchasing Member
other than the representation that the Selling Member is transferring its
Buy-Sell Interests free and clear of any liens, claims and encumbrances of
any kind.
(h) If a Member(s) fails for any reason to purchase or sell upon
the Buy-Sell Transfer Terms and otherwise in accordance with this Section 22,
then such Member(s) shall be deemed a defaulting Member(s) hereunder and the
non-defaulting Member(s) shall have the following options, in each case to be
exercised or commenced within 90 days of the date of such default:
(i) to retain the Buy-Sell Deposit (if the defaulting
Member(s) was to be the Purchasing Member) as liquidated damages and
continue the Company, it being agreed that the damages arising from a
breach by a Member of its obligations under this Section 22 are impossible
to ascertain with certainty and the Buy-Sell Deposit represents a good
faith estimate of the damages likely to be incurred by the non-defaulting
Member(s); or
(ii) to retain the Buy-Sell Deposit (if the defaulting
Member(s) was to be the Purchasing Member) and then elect, by notice to the
defaulting Member(s), on the date set forth in such notice by the
non-defaulting Member(s), within 3 months after the Buy-Sell Closing Date,
to purchase the Buy-Sell Interests of the defaulting Member(s) for a
purchase price equal to (x) the Buy-Sell purchase price for the Buy-Sell
Interests of the defaulting Member(s) multiplied by 90% minus (y) the
Buy-Sell Deposit retained by the non-defaulting Member(s), such election to
be made in the sole and absolute discretion of the non-defaulting
Member(s); or
(iii) to elect (if the defaulting Member(s) was to be the
Selling Member), by notice to the defaulting Member(s), on the date set
forth in such notice, within 3 months after the Buy-Sell Closing Date, to
purchase the Buy-Sell Interests of the defaulting Member(s) at the Buy-Sell
Purchase Price for the Buy-Sell Interests of the defaulting Member(s)
multiplied by 90%, in which case upon payment of such purchase price the
defaulting Member shall cease to have any rights to its Buy-Sell Interests,
except for the right to surrender such Buy-Sell Interests in exchange for
payment of such purchase price.
23. Time of the Essence. Time is of the essence with respect to
each of the dates and time periods set forth in Sections 21 and 22.
24. Tax Matters. The Company's fiscal and taxable year will end
each October 31. The Managing Member shall be the only Member authorized to
prepare, execute and file tax returns and
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tax reports on behalf of the Company and to represent the Company before any
taxing authority. The Members shall, on each such Member's tax return, treat
each item of income, gain, loss or expense derived from the Company in a manner
consistent with the treatment of such item on the Company's tax returns and
reports.
25. Other Investments. Nothing in this Agreement shall be deemed
to limit or proscribe the ability of the Members or their respective affiliates
to invest in other entities or operate other businesses, including breweries, in
Ireland or elsewhere.
26. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York (other than the
conflicts of law rules), all rights and remedies being governed by said laws.
27. CONSENT TO JURISDICTION. EACH OF THE MEMBERS HEREBY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW
YORK CITY FOR THE PURPOSE OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO
THE COMPANY OR THIS AGREEMENT. EACH OF THE MEMBERS IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND
ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM. EACH MEMBER CONSENTS TO THE SERVICE OF PROCESS IN ANY
SUCH PROCEEDING BY THE DELIVERY (BY OVERNIGHT COURIER) TO IT AT ITS ADDRESS SET
FORTH IN EXHIBIT A HERETO, OR SUCH OTHER ADDRESS AS THE MEMBER SHALL HAVE
NOTIFIED THE COMPANY IN WRITING. EACH MEMBER FURTHER AGREES THAT A FINAL
JUDGMENT IN ANY SUCH PROCEEDING SHALL BE CONCLUSIVE AND BINDING AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.
28. Amendments. (a) Except as otherwise provided by this
Agreement or the Act, this Agreement may be amended by the affirmative vote of
Members holding 66 2/3% of the Percentage Interests.
(b) Notwithstanding anything to the contrary contained in this
Section 28, the Managing Member may modify the provisions of this Agreement
without the consent of the Members if, upon advice of counsel to the Company,
the modification is necessary to cause the Company to be or to continue to be
classified as a partnership for United States federal income tax purposes.
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(c) Notwithstanding anything to the contrary contained in this
Section 28, any amendment to this Agreement that would adversely affect the
liabilities of a Member solely by virtue of being a member of the Company
shall require the consent of each Member affected.
29. Counterparts. This Agreement may be executed in several
counterparts and all counterparts so executed shall together be deemed to
constitute one complete agreement, and each such counterpart shall be deemed to
be an original, binding the party or parties subscribed thereto.
30. Power of Attorney. Each Member hereby constitutes and
appoints the Managing Member or if a Liquidator shall have been selected
pursuant to Section 20, the Liquidator of the Company as such Member's true and
lawful agent and attorney-in-fact ("Agent"), with full power of substitution,
with full power and authority in such Member's name, place and stead to execute,
acknowledge, deliver and file all such documents which the Agent deems necessary
or appropriate (i) to continue the existence or qualification of the Company as
a limited liability company under the laws of any state or jurisdiction, (ii) to
reflect amendments to this Agreement or the Articles of Organization made
pursuant hereto or (iii) to reflect the dissolution or liquidation of the
Company pursuant to the terms hereof. The foregoing power of attorney is hereby
declared irrevocable and a power coupled with an interest and shall survive the
death or incapacity of any Member and shall extend to such Member's successors
and assigns, heirs or representatives.
31. Headings. The headings of the paragraphs of this Agreement
are inserted for convenience only and shall not constitute a part hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date set forth above.
AMERICAN CRAFT BREWING
INTERNATIONAL LIMITED
By_______________________________________
Name: Xxxxx X. Xxx
Title: Executive Vice President, Chief
Operating Officer and Secretary
_______________________________________
XXXXX XxXXXXXXX
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Exhibit A
to
Operating Agreement
of
CELTIC BREW LLC
Initial Capital
Name of Member Address Percentage Interest Contribution
-------------- ------- ------------------- ------------
1. American Craft One Galleria Boulevard 60% US$600,000
Brewing International Xxxxxxxx, Xxxxxxxxx 00000
Limited
2. Aidan XxXxxxxxxx Xxxxxxx and Western Brewery 40% US$400,000
Limited
Xxxxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxx Xxxxx
XXXXXXX
