Exhibit 2.5
NUTRISYSTEM DIRECT, L.L.C.
OPERATING AGREEMENT
This Operating Agreement (this "Agreement") is made as of September 30,
1999, by xxxxxxxxxxx.xxx inc., a Delaware corporation with its principal place
of business at 000 Xxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx 00000 (the "Member").
RECITALS:
WHEREAS, NutriSystem Direct, L.L.C. (the "Company") was formed as a limited
liability company on February 6, 1998 under the Pennsylvania Limited Liability
Company Law of 1994; and
WHEREAS, the initial members of the Company (the "Former Members")
consisted of HPF Holdings, Inc., Xxxxx X. Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxxxxx
Xxxxxx, Xxxxxxx Xxxxxx and Xxxxxxxxx X. Xxxxx; and
WHEREAS, pursuant to a Stock Exchange and Purchase Agreement dated August
16, 1999 among the Former Members and the Member (as successor to Ansama Corp.,
a Nevada corporation), the Former Members have assigned to the Member 100% of
the Interests in the Company; and
WHEREAS, the Member is now the sole member of the Company; and
WHEREAS, the Member wishes, by this Agreement, to provide for the
administration of the business and affairs of the Company and the rights and
obligations of the Member with respect thereto;
NOW, THEREFORE, in consideration of the premises and covenants herein
contained and intending to be legally bound hereby, the Member hereby agrees as
follows:
1. Definitions. For purposes of this Agreement, the following terms shall
have the following definitions:
"Act" means the Pennsylvania Limited Liability Company Law of 1994, 15
P.S. '8901, et seq.
"Capital" means the sum of all of the money and other property
contributed to the Company by the Member and the Former Members as Capital
Contributions from time to time.
"Capital Contribution" means each initial and subsequent contribution
to the Capital of the Company.
"Certificate" means the Certificate of Organization of the Company
filed with the Department of State of the Commonwealth of Pennsylvania, as
amended from time to time.
"Distributable Cash" means, for any fiscal year, the total cash gross
receipts of the Company from all sources during such year less (i) any
reserves established by action of the Member, (ii) payments of interest and
principal on any liabilities of the Company and (iii) the expenditures
incurred by the Company during such year other than those paid out of
reserves previously established pursuant to clause (i) hereof.
"Interest in the Company" means the Member's percentage ownership
interest in the Company.
"Transfer" means any and all types of transfers including, but not
limited to, any sale, conveyance, assignment, disposition, distribution,
encumbrance, pledge, mortgage, hypothecation or gift.
2. Name. The name of the Company shall be "NutriSystem Direct, L.L.C." and
all business of the Company shall be conducted under that name or such
fictitious names as may be designated by the Member from time to time.
3. Registered Office. The registered office and the principal place of
business of the Company shall be maintained at 000 Xxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxxxx 00000. The Company may from time to time change such registered
office and principal place of business with the consent of the Member. The
Member agrees to execute and deliver all necessary documents in connection with
the registration of the Company in all jurisdictions requiring such
registration.
4. Purposes. The purposes of the Company are to engage in the provision of
weight loss services and products and all other lawful activities incidental or
related thereto.
5. Term; Fiscal Year. The Company shall continue until terminated in
accordance with this Agreement. The fiscal year of the Company shall end on
December 31.
6. Member and its Interest.
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(a) Member. The Member is the sole member of the Company and owns a
100% Interest in the Company.
(b) Capital Contribution. Based upon Capital Contributions made to the
Company by the Former Members, which have been assigned to the Member, the
aggregate Capital Contribution of the Member as of the date of this Agreement is
$100,000. The Member shall not be entitled to receive any interest on any
Capital Contribution. The Member shall not be obligated to make any additional
Capital Contribution to the Company; provided, however, that this Agreement
shall be amended from time to time to reflect any additional Capital
Contributions made by the Member to the Company.
7. Allocation of Profits and Losses and Cash Distributions.
(a) Profits and Losses. All income, expenses, deductions, profits and
losses of the Company for both book and tax purposes shall be allocated to the
Member.
(b) Cash Distributions. Distributable Cash shall be distributed to the
Member annually based upon actual amounts available, unless waived by the Member
in whole or in part.
8. Management of the Company.
(a) General Management. Management and control of the operations of
the Company and all decisions with respect to the Company's affairs shall rest
exclusively with the Member.
(b) Conduct of Company Affairs by the Member. The Member shall have
the right to act for and on behalf of the Company. Without limiting the
generality of any of the foregoing provisions of this Section 8(b), the Member
shall have the authority to perform the following acts:
(i) monitor, supervise, manage and control the business
activities of the Company and its employees;
(ii) open, maintain and close bank accounts and draw checks,
drafts or orders for the payment of money;
(iii) receive, dispose of and deal in all checks, money and other
personal property of the Company;
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(iv) employ or retain employees, engineers, consultants,
attorneys, accountants and agents and terminate such employment;
(v) maintain one or more offices and, in connection therewith,
rent or acquire office space and do such other acts as may be necessary or
appropriate in connection with the maintenance of such offices;
(vi) expend the capital and revenues of the Company in
furtherance of the Company's business;
(vii) enter into agreements and contracts with third parties,
terminate such agreements, and institute, defend and settle litigation arising
therefrom, and give receipts, releases and discharges with respect to all of the
foregoing and any matters incident or related thereto;
(viii) borrow money and issue guaranties and evidences of
indebtedness;
(ix) purchase, lease or otherwise acquire all or substantially
all of the properties, assets, stock or other equity interests of another
entity;
(x) maintain at the expense of the Company such insurance
coverage as the Member shall determine for workers' compensation, comprehensive
general liability, product liability, property liability and professional
liability, if available, and any and all other insurance necessary or
appropriate to the business of the Company;
(xi) acquire by purchase, lease or otherwise any real or personal
property that may be necessary, convenient or incidental to the accomplishment
of the purposes of the Company;
(xii) determine the accounting methods and conventions to be used
in the preparation of the Company's financial statements and tax returns and
make any and all elections under the tax laws of the United States, the several
states and other relevant jurisdictions as to the treatment of the Company's
income, expenses, deductions, profits and losses and any other method or
procedure relating to the preparation of the Company's financial statements and
tax returns; and
(xiii) engage in any kind of activity and perform and carry out
contracts of any kind necessary to, or in connection with, or incidental to the
accomplishment of the purposes of the Company.
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(c) Indemnification of the Member. The Company shall indemnify and
hold harmless the Member from all liabilities, losses, costs, expenses and
damages including, without limitation, reasonable attorneys' fees, and for
judgments and amounts paid in settlement of any action, suit or proceeding or
arising from any threatened, pending, settled or completed action, suit or
proceeding in which the Member is or was a party or threatened to be made a
party arising from or relating to the Company; provided that the Member's act or
omission was not the result of willful misconduct or recklessness on the part of
the Member. The foregoing right of indemnification shall be in addition to any
other rights to which the Member may otherwise be entitled and shall inure to
the benefit of the successors and assigns of the Member.
(d) Dealings with the Member and its Affiliates. The Company may
employ, appoint, contract or otherwise deal with the Member and any person or
entity affiliated with or related to the Member without restriction and without
any effect on the validity of such dealings.
9. Liabilities and Rights of Member. Notwithstanding anything to the
contrary contained herein, the liability of the Member for the debts,
obligations and expenses of the Company shall in no event exceed the aggregate
amount of its Capital Contributions to the Company, except as otherwise required
by law.
10. Banking; Books and Records.
(a) Banking. All funds of the Company shall be deposited and kept in
its name in such Company bank account or accounts as shall be designated by the
Member. All withdrawals therefrom shall be made upon checks or drafts signed by
the Member or employees of the Company duly authorized by the Member pursuant to
Section 8(b) hereof.
(b) Books and Records. The Member shall be responsible for overseeing
the maintenance of the Company's books and records. The Company's books and
records shall at all times be maintained in the principal office or such other
office as the Member shall designate for such purpose, and shall be open to the
inspection and examination at reasonable times by the Member or its duly
authorized representatives.
11. Transfer of Interests.
(a) Transfers by the Member. The Member may transfer all, or any
portion of, its Interest in the Company or rights in its Interest in the Company
to one or more successors.
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(b) Admission of Members. Additional Members may be admitted to the
Company upon the approval of the Member. No prospective Member may be admitted
to the Company until such prospective Member shall execute a joinder to this
Agreement in form and substance satisfactory to the Company, whereby the
additional Member agrees to be bound by all of the terms and conditions of this
Agreement then in effect. Upon the admission of each additional Member, the
Interest in the Company of such additional Member shall be as specified at the
time such new Member shall be admitted, the Interests in the Company of all
other Members of the Company shall be proportionately reduced and this Agreement
shall be amended to reflect the Capital Contributions and respective Interests
in the Company of the Members as so changed.
12. Termination and Liquidation.
(a) Termination. The existence of the Company shall terminate upon the
occurrence of any of the following: (i) the written consent of the Member to
dissolve the Company and the filing of a certificate of dissolution pursuant to
the Act; (ii) the sale of all or substantially all of the assets owned by the
Company and the collection of all of the net proceeds therefrom or (iii) the
entry of a decree of judicial dissolution pursuant to the Act.
(b) Liquidation. In the event of the termination of the Company, the
Member shall within a reasonable period of time prepare, or cause to be
prepared, a full and accurate statement of the Company's assets and liabilities
and results of operations since the last previous statement, convert the
Company's assets to cash, collect all amounts due the Company, including amounts
owed by the Member, discharge the debts of the Company and then cause all
remaining funds to be distributed to the Member.
13. Miscellaneous.
(a) Amendments. Amendments to this Agreement shall become effective
only upon the execution of a written instrument describing such amendments
signed by the Member.
(b) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania.
(c) Headings. The headings herein have been included for convenience
of reference only and shall not be considered in interpreting this Agreement.
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(d) Integration. This Agreement constitutes the entire agreement of
the Member with respect to the subject matter hereof and shall supersede all
oral agreements and prior writings with respect to the subject matter hereof.
(e) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the Member and its successors and assigns.
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IN WITNESS WHEREOF, the Member has executed this Agreement as of the day
and year first above written.
XXXXXXXXXXX.XXX INC.
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
President
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