EXHIBIT 10.1
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Autobytel.Europe LLC
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SECOND AMENDED AND RESTATED
OPERATING AGREEMENT
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Dated as of March 28, 2002
TABLE OF CONTENTS
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I. DEFINITIONS.............................................................................................2
1.1 "ABT"..........................................................................................2
1.2 "ABT Contribution".............................................................................2
1.3 "Act"..........................................................................................2
1.4 "Adjusted Capital Account Deficit".............................................................2
1.5 "Affiliate"....................................................................................2
1.6 "Agreement"....................................................................................2
1.7 "Acquisition" shall have the meaning set forth in Section 7.13.................................2
1.8 "Acquisition Notice" shall have the meaning set forth in Section 7.13..........................2
1.9 "Assets".......................................................................................3
1.10 "Authorized Person"............................................................................3
1.11 "Business".....................................................................................3
1.12 "Business Day".................................................................................3
1.13 "Capital Account"..............................................................................3
1.14 "Capital Contribution".........................................................................3
1.15 "Certificate"..................................................................................3
1.16 "Code".........................................................................................3
1.17 "Company"......................................................................................3
1.18 "Expiration Date"..............................................................................3
1.19 "Fair Market Value"............................................................................4
1.20 "Fiscal Year"..................................................................................4
1.21 "Interest".....................................................................................4
1.22 "IPO"..........................................................................................4
1.23 "License Agreement"............................................................................4
1.24 "Majority in Interest".........................................................................4
1.25 "Members"......................................................................................4
1.26 "Member Nonrecourse Debt"......................................................................4
1.27 "Member Nonrecourse Debt Minimum Gain".........................................................4
1.28 "Member Nonrecourse Deductions"................................................................5
1.29 "Minority Protected Member"....................................................................5
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1.30 "NASDAQ".......................................................................................5
1.31 "NOC"..........................................................................................5
1.32 "Non-ABT Voting Interests".....................................................................5
1.33 "Ownership Percentage".........................................................................5
1.34 "Person".......................................................................................5
1.35 "Pon"..........................................................................................5
1.36 "Profit or Loss"...............................................................................5
1.37 "Related Party"................................................................................6
1.38 "Securities Act"...............................................................................6
1.39 "Subsidiary"...................................................................................6
1.40 "Tax Matters Partner"..........................................................................6
1.41 "Treasury Regulations".........................................................................6
1.42 "Voting Interest"..............................................................................6
1.43 "Voting Percentage"............................................................................6
II. THE COMPANY.............................................................................................7
2.1 Formation of the Company......................................................................7
2.2 Company Name and Office.......................................................................7
2.3 Purposes of the Company.......................................................................7
2.4 Term of the Company...........................................................................7
2.5 Title to Property.............................................................................7
III. CAPITAL CONTRIBUTIONS...................................................................................7
3.1 Initial Capital Contribution..................................................................7
3.2 No Further Contributions or Loans.............................................................7
3.3 Dilution......................................................................................8
IV. VOTING AGREEMENT........................................................................................8
4.1 Board of Managers of the Company..............................................................8
4.2 Member Voting................................................................................10
4.3 Vacancies/Removals...........................................................................10
4.4 No Voting or Conflicting Agreements..........................................................11
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4.5 Actions Consistent with Agreement.............................................................11
4.6 Amendments to Organizational Documents........................................................11
4.7 Expiration of Rights..........................................................................11
V. MANAGEMENT AND OPERATIONS OF THE COMPANY...............................................................11
5.1 Management Generally..........................................................................11
5.2 Meetings of the Board of Managers.............................................................11
5.3 Powers of the Board of Managers...............................................................12
5.4 Duties and Obligations of the Board of Managers...............................................13
5.5 No Compensation for the Board of Managers.....................................................13
5.6 Reimbursement of Expenses.....................................................................13
5.7 Officers......................................................................................13
VI. POWERS AND WARRANTIES OF THE MEMBERS; ADMISSION OF NEW MEMBERS.........................................14
6.1 Powers of the Members.........................................................................14
6.2 Meetings of Members...........................................................................14
6.3 Examination of Company Records................................................................14
6.4 Admission of New Members......................................................................14
VII. RIGHTS AND RESTRICTIONS ON TRANSFERS BY THE MEMBERS....................................................15
7.1 Restrictions on Transfers Generally...........................................................15
7.2 Right of First Offer..........................................................................15
7.3 Tag Along Right...............................................................................16
7.4 Drag Along Right..............................................................................16
7.5 Transfers to Affiliates.......................................................................17
7.6 ABT Option....................................................................................17
7.7 Transferees Subject to Agreement..............................................................18
7.8 Exchange Rights...............................................................................18
7.9 Participation Rights..........................................................................18
7.10 Preemptive Rights.............................................................................19
7.11 Expiration of Rights and Restrictions.........................................................20
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7.12 ABT Ownership.................................................................................20
7.13 Liquidation Right Following Acquisition.......................................................20
VIII. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS......................................................20
8.1 Member Representation.........................................................................20
8.2 Company Representation........................................................................23
8.3 Non-Solicitation; Non-Hire....................................................................24
8.4 Disclosure of Member Identity.................................................................24
8.5 Annual Budget.................................................................................24
8.6 Reserved......................................................................................24
8.7 Insurance.....................................................................................24
8.8 Reserved......................................................................................24
8.9 Annual Budget.................................................................................24
8.10 Related Party Transactions....................................................................25
8.11 Delivery of Financial Statements..............................................................25
IX. DISTRIBUTIONS..........................................................................................25
9.1 Distributions.................................................................................25
9.2 Establishment of Reserves.....................................................................25
9.3 Liquidating Distributions.....................................................................26
X. MAINTENANCE OF CAPITAL ACCOUNTS; ALLOCATIONS...........................................................26
10.1 Allocations of Profit or Loss.................................................................26
10.2 Tax Allocations; Certain Book/Tax Differences.................................................26
10.3 Special Allocations...........................................................................27
10.4 Allocations Upon Transfer of Interests in the Company.........................................28
XI. ACCOUNTING PROCEDURE; TAX MATTERS......................................................................28
11.1 Fiscal Year...................................................................................28
11.2 Books of Account..............................................................................28
11.3 Preparation and Filing of Income Tax Returns and Other Writings...............................29
11.4 Controversies with the Internal Revenue Service...............................................29
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XII. LIMITATIONS ON LIABILITIES; INDEMNIFICATION; RIGHT TO CONDUCT OTHER BUSINESS...........................29
12.1 Liability of Members..........................................................................29
12.2 Indemnification...............................................................................30
12.3 Right to Conduct Other Business...............................................................30
XIII. POWER OF ATTORNEY......................................................................................30
13.1 Authority to Execute Documents................................................................30
13.2 Survival of Power.............................................................................31
XIV. AMENDMENT AND DISSOLUTION..............................................................................31
14.1 Amendment.....................................................................................31
14.2 Dissolution...................................................................................31
14.3 Distributions Upon Dissolution................................................................32
14.4 No Obligation to Restore Deficit Capital Accounts.............................................33
XV. MISCELLANEOUS..........................................................................................34
15.1 Injunctive Relief.............................................................................34
15.2 Further Assurances............................................................................34
15.3 Governing Law; Dispute Resolution.............................................................34
15.4 Entire Agreement..............................................................................35
15.5 Binding Effect................................................................................35
15.6 Invalidity of Provision.......................................................................35
15.7 Notices.......................................................................................35
15.8 Headings......................................................................................35
15.9 Gender and Number.............................................................................35
15.10 Counterparts and Execution....................................................................35
15.11 Consents and Waivers..........................................................................35
15.12 Rights and Remedies Cumulative................................................................36
15.13 Waiver of Right to Partition..................................................................36
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Schedule A Capital Contribution and Ownership Percentages ........................................S-1
Exhibit 1 Intercompany Software License Agreement ...............................................E-1
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SECOND AMENDED AND RESTATED
OPERATING AGREEMENT
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This SECOND AMENDED AND RESTATED OPERATING AGREEMENT (this
"AGREEMENT") is dated as of March 28, 2002 by and among Autobytel.Europe LLC, a
Delaware limited liability company (the "COMPANY"), Autobytel Inc. (formerly
xxxxxxxxx.xxx inc.), a Delaware corporation ("ABT"), Pon Holdings B.V., a
Netherlands corporation ("PON"), and any other Person who shall execute this
Agreement or a counterpart thereof and become a Member (as defined below) on or
after the date hereof.
RECITALS
WHEREAS, on or about August 28, 1997, a Certificate of
Formation was filed for the Company with the office of the Secretary of State of
the State of Delaware under the name Auto-By-Tel International LLC.
WHEREAS, on or about March 8, 1999, the name of the Company
was changed to Autobytel.Europe LLC by filing with the Secretary of State of the
State of Delaware an amendment to the Certificate of Formation.
WHEREAS, on January 6, 2000, the Company and the Persons that
were Members on that date entered into an Amended and Restated Operating
Agreement, which agreement was amended by the First Amendment to Amended and
Restated Operating Agreement dated January 27, 2000 and the Second Amendment to
Amended and Restated Operating Agreement dated April 6, 2000 (collectively, the
"PRIOR AGREEMENT"), pursuant to which the parties thereto set forth their
agreements with respect to the management of the Company, as well as certain
other matters.
WHEREAS, pursuant to, and in accordance with, Section 14.1 of
the Prior Agreement, the parties hereto desire to amend and restate the Prior
Agreement in its entirety, such that upon execution of this Agreement, the Prior
Agreement shall be of no force and effect and shall be superceded in its
entirety by this Agreement.
NOW, THEREFORE, in consideration of the mutual premises,
agreements and covenants set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending legally to be bound, hereby agree to amend and restate
the Prior Agreement in its entirety as follows:
TERMS OF AGREEMENT
I. DEFINITIONS
The following terms when used in this Agreement, including its
preamble and recitals, shall have the following meanings, such meanings to be
equally applicable to the singular and plural forms thereof:
1.1 "ABT" shall mean Autobytel Inc. (formerly xxxxxxxxx.xxx
inc.), a Delaware corporation.
1.2 "ABT CONTRIBUTION" shall have the meaning ascribed to such
term in footnote 1 to Schedule A.
1.3 "ACT" shall mean the Limited Liability Company Act,
Delaware Code Annotated, Title 6, Sections 18-101 et seq., as from time to time
amended.
1.4 "ADJUSTED CAPITAL ACCOUNT DEFICIT" shall mean, with
respect to any Member for any Fiscal Year, the deficit balance, if any, in such
Member's Capital Account as of the end of such Fiscal Year after giving effect
to the following adjustments: (a) crediting to such Capital Account any amounts
that such Member is obligated to restore as described in the penultimate
sentences of Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5) and
(b) debiting to such Capital Account the items described in Treasury Regulation
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition of
"Adjusted Capital Account Deficit" is intended to comply with the provisions of
Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
1.5 "AFFILIATE" shall mean, with respect to any Person, any
Person that, directly or indirectly, controls, is controlled by, or is under
common control with, such Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of (i) the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise, and (ii) more than
fifty percent (50%) of the equity interest entitled to vote for the election of
directors or equivalent governing body; it being understood that Pon shall be
deemed an Affiliate of any NOC or licensee in which it owns an interest, whether
directly or indirectly.
1.6 "AGREEMENT" shall have the meaning ascribed to such term
in the preamble hereto.
1.7 "ACQUISITION" shall have the meaning set forth in SECTION
7.13.
1.8 "ACQUISITION NOTICE" shall have the meaning set forth in
SECTION 7.13.
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1.9 "ASSETS" shall mean any real, personal or other property,
whether tangible or intangible, acquired or owned by the Company at any time.
1.10 "AUTHORIZED PERSON" shall mean and refer to an authorized
agent of the Members, who is authorized under this Agreement to form the Company
under and pursuant to the Act by filing the Certificate on behalf of the Members
and to be an "authorized person" within the meaning of the Act, with the
authority upon approval by the managers to execute, deliver and file any
certificates (and amendments and restatements thereof) with the Delaware
Secretary of State.
1.11 "BUSINESS" shall mean any electronic commerce relating to
any automotive-related product or service including, without limitation, the
sale or lease of any new or used vehicle, any related financing, insurance or
warranty product or service, and any after-market product or service.
1.12 "BUSINESS DAY" shall mean any day except Saturday, Sunday
or other day on which commercial banks located in California are authorized by
law to be closed for business.
1.13 "CAPITAL ACCOUNT" shall mean, with respect to each
Member, the account established for such Member on the books of the Company
which shall be (a) increased by (i) the total amount of money and Fair Market
Value of property contributed to the Company by such Member, and (ii) the amount
of Company income and gain attributable to and allocated to such Member pursuant
to this Agreement, and (b) decreased by (i) the amount of cash and the Fair
Market Value of property distributed by the Company to such Member (net of any
liability secured by such property that the Member is considered to assume or
take subject to pursuant to Section 752 of the Code) pursuant to ARTICLES IX and
XIV hereof, and (ii) the amount of Company losses and deductions allocated to
such Member pursuant to this Agreement. Each Member's Capital Account shall be
maintained and adjusted in accordance with Treasury Regulation Sections
1.704-1(b) and 1.704-2.
1.14 "CAPITAL CONTRIBUTION" shall mean, with respect to any
Member, a contribution to the capital (whether in cash or otherwise) of the
Company made by such Member.
1.15 "CERTIFICATE" shall mean that certain Certificate of
Formation of the Company filed with the Office of the Secretary of State of the
State of Delaware, as the same may be amended from time to time.
1.16 "CODE" shall mean the Internal Revenue Code of 1986, as
amended, or any corresponding provision of any succeeding law.
1.17 "COMPANY" shall have the meaning ascribed to such term in
the recitals hereto.
1.18 "EXPIRATION DATE" shall mean the first to occur of (i)
the effective date of an IPO or (ii) the effective date of any transaction,
which when aggregated with all other
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transactions, results in a sale, exchange or other transfer of more than fifty
percent (50%) of the Voting Percentages or Ownership Percentages in the Company
for shares or other interests in a publicly-traded entity that is not an
Affiliate of any Member.
1.19 "FAIR MARKET VALUE" shall mean the commercially
reasonable value as determined by the board of managers, unless, at the time of
such determination, the determination of fair market value concerns a
transaction between (a) the Company and one or more Members holding a majority
of the Voting Percentages, in which case, the determination by the board of
managers shall be confirmed by independent appraisal performed by an investment
banking firm with international expertise and reputation selected by ABT and
consented to by the Members holding at least fifty percent (50%) of the total
Non-ABT Voting Interests, which consent shall not be unreasonably withheld, or
(b) two or more Members, in which case the Fair Market Value shall be determined
by independent appraisal performed by an investment banking firm mutually
selected by such Members.
1.20 "FISCAL YEAR" shall mean the twelve (12) month period
ending December 31.
1.21 "INTEREST" shall mean a Member's entire interest in the
Company, including, but not limited to, its Voting Interest and Ownership
Percentage.
1.22 "IPO" shall mean a public offering, which when aggregated
with all prior public offerings, constitutes an offering registered under the
Securities Act or other foreign securities laws of more than twenty percent
(20%) of the Voting Interests or Ownership Percentages of the Company, excluding
any registration of securities offered pursuant to any employee benefit plan.
1.23 "LICENSE AGREEMENT" shall have the meaning set forth in
SCHEDULE A hereof.
1.24 "MAJORITY IN INTEREST" shall mean any Member or group of
Members holding an aggregate of more than fifty percent (50%) of the total
Voting Interests of the Company.
1.25 "MEMBERS" shall mean Pon, ABT and each Person hereafter
admitted to the Company as a Member as provided in this Agreement.
1.26 "MEMBER NONRECOURSE DEBT" shall have the meaning set
forth in Treasury Regulation Section 1.704-2(b)(4).
1.27 "MEMBER NONRECOURSE DEBT MINIMUM GAIN" shall mean an
amount, with respect to each Member Nonrecourse Debt, equal to Company Minimum
Gain that would result if such Member Nonrecourse Debt were treated as a
nonrecourse liability, determined in accordance with Treasury Regulation Section
1.704-2(i)(3).
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1.28 "MEMBER NONRECOURSE DEDUCTIONS" shall have the meaning
set forth in Treasury Regulation Section 1.704-2(i).
1.29 "MINORITY PROTECTED MEMBER" shall have the meaning set
forth in SECTION 4.1(d).
1.30 "NASDAQ" shall mean the Nasdaq National Market System.
1.31 "NOC" shall mean any business operating in Europe which
licenses or sublicenses ABT's brand name, other than the Company.
1.32 "NON-ABT VOTING INTERESTS" shall mean, at any given time,
those Voting Interests owned or controlled by Persons other than ABT or its
Affiliates.
1.33 "OWNERSHIP PERCENTAGE" shall mean, as to each Member,
such Member's allocable share of all income, gains, losses, deductions and
credits of the Company as set forth on SCHEDULE A hereto, as may be amended from
time to time hereafter.
1.34 "PERSON" shall mean and include an individual, a
corporation, a limited liability company, an association, a partnership, a joint
venture, a trust or estate, a government or any department or agency thereof, or
any other entity or governmental body.
1.35 "PON" shall mean Pon Holdings B.V., a Netherlands
corporation.
1.36 "PROFIT OR LOSS" shall mean, for each Fiscal Year or
portion thereof, an amount equal to the Company's taxable income or loss for
such Fiscal Year or portion thereof, determined in accordance with Section
703(a) of the Code (for this purpose, all items of income, gain, loss, deduction
or credit 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:
(a) any income of the Company that is attributable
to an Asset and is exempt from federal income tax and not otherwise taken into
account in computing Profits or Losses pursuant to this definition of "Profits"
or "Losses" shall be added to such taxable income or loss;
(b) any expenditures of the Company that are
described in Section 705(a)(2)(B) of the Code or treated as Code Section
705(a)(2)(B) expenditures pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(i), and not otherwise taken into account computing Profits or
Losses pursuant to this definition of "Profits" or "Losses," shall be subtracted
from such taxable income or loss;
(c) gain or loss resulting from any disposition of
an Asset with respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the accounting book basis of the
property disposed of, notwithstanding that the adjusted tax basis of such
property differs from its accounting book basis;
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(d) any increase or decrease to Assets as a result
of any adjustment to the accounting book basis of Company assets pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(f) shall be added to or subtracted
from, as the case may be, such taxable income or loss;
(e) in lieu of the 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 or portion thereof, computed in accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(g), if applicable; and
(f) any items specially allocated pursuant to
Sections 10.2(b) and 10.3 hereof shall not be considered in determining Profit
or Loss.
If such Profit or Loss as calculated hereby is a positive number, it shall
sometimes be referred to herein as "Profit," and if such Profit or Loss as
calculated hereby is a negative number, it shall sometimes be referred to herein
as "Loss."
1.37 "RELATED PARTY" shall mean, with respect to a Person, (a)
any Affiliate or ten percent (10%) or more equity holder of such Person or (b)
any Affiliate or ten percent (10%) or more equity holder of the Person described
in clause (a) above; provided, however, that if the Person described in clause
(a) above is a publicly held company, any shareholder or equityholder of such
company owning less than fifteen percent (15%) of all outstanding shares or
ownership interests shall not be considered a "Related Party"; provided,
further, that the Company and any wholly-owned subsidiary of the Company shall
not be considered to be "Related Parties" with respect to each other.
1.38 "SECURITIES ACT" shall mean the Securities Act of 1933,
as amended.
1.39 "SUBSIDIARY" (including when used in the lower case form)
of a Person shall mean any corporation, partnership, limited liability company,
joint venture, or other entity in which at least fifty percent (50%) of the
outstanding voting power of such entity is owned, directly or indirectly, by
such Person.
1.40 "TAX MATTERS PARTNER" shall have the meaning ascribed to
such term in SECTION 11.4 hereof.
1.41 "TREASURY REGULATIONS" shall mean the income tax
regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
1.42 "VOTING INTEREST" shall mean the voting interest of a
Member to vote on matters with respect to the Company.
1.43 "VOTING PERCENTAGE" with respect to a Member shall mean
the percentage of the total Voting Interests of the Company held by such Member.
The Voting Percentage of each Member is set forth on SCHEDULE A.
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II. THE COMPANY
2.1 FORMATION OF THE COMPANY. ABT, as the initial Member,
authorized the Authorized Person to act as organizer and to form the Company
under and pursuant to the Act by filing the Certificate on behalf of the
Members. This Agreement is subject to, and governed by, the Act and the
Certificate. In the event of a direct conflict between the provisions of this
Agreement and either the mandatory provisions of the Act or the Certificate,
such mandatory provisions of the Act or the Certificate (as the case may be)
will be controlling.
2.2 COMPANY NAME AND OFFICE. The name of the Company shall be
"Autobytel.Europe LLC." The Company shall maintain a registered office in
Delaware, and the name and address of the Company's registered agent in Delaware
is The Corporation Trust Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000. Such office and such agent may be changed from time to time by the board
of managers. If the registered agent is changed, the Certificate shall be
amended to reflect such change. The principal office of the Company is currently
located at 00000 XxxXxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxx 00000, but may be
relocated to a different address by the board of managers. The Company may
maintain such additional offices as may be designated from time to time by the
board of managers for the purpose of carrying out the business of the Company.
2.3 PURPOSES OF THE COMPANY. The purpose of the Company shall
be to engage in all lawful activities (including, without limitation, entering
into, exercising the rights and enjoying the benefits of the Company under, and
discharging the obligations of the Company under, all lawful contracts,
agreements and documents) that may be necessary, appropriate, advisable or
convenient to the Company.
2.4 TERM OF THE COMPANY. The term of the Company commenced on
the date of the filing of the Certificate as required by Section 18-201 of the
Act and shall continue in existence until the dissolution (and subsequent
termination of the Company after the winding up of its affairs) as provided in
this Agreement.
2.5 TITLE TO PROPERTY. Legal title to all Assets of the
Company shall be taken and at all times held in the name of the Company or any
subsidiary thereof.
III. CAPITAL CONTRIBUTIONS
3.1 INITIAL CAPITAL CONTRIBUTION. Prior to the date hereof,
each Member has contributed or cause to be contributed to the Company the assets
specified on SCHEDULE A. No interest shall be paid by the Company on any Capital
Contribution. No Member shall be entitled to withdraw from the Company, or
demand the return of any part of its Capital Contribution or any balance in its
Capital Account, or to receive any distribution, except in accordance with the
terms of this Agreement.
3.2 NO FURTHER CONTRIBUTIONS OR LOANS. The liability of the
Members to the Company, in their capacity as Members, is limited to their
Capital Contributions made to the
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Company. The Capital Contributions set forth on SCHEDULE A constitute the only
funds that the Members are required to furnish to the Company, whether by way of
contribution of capital, loan, or otherwise. Unless agreed to by a Majority in
Interest, the Members may not make any additional Capital Contributions to the
Company.
3.3 DILUTION. The Interests of each Member is set forth on
SCHEDULE A hereto. Upon (i) the admission of a new Member to the Company, or
(ii) the making of additional Capital Contributions to the Company by an
existing Member, the Interests set forth on SCHEDULE A hereto shall be adjusted
to reflect any decrease or increase thereto caused by such events.
IV. VOTING AGREEMENT
4.1 BOARD OF MANAGERS OF THE COMPANY.
(a) Subject to SECTION 4.1(a)(iii) hereof, prior to
the Expiration Date the board of managers of the Company shall be comprised of
five (5) members and shall be constituted as set forth in this SECTION 4.1(a)
(and, to the extent practicable, the Company shall cause the boards of
directors, boards of managers, and similar governing bodies of any subsidiary of
the Company to be similarly constituted):
(i) So long as ABT (including its Affiliates)
holds less than a Majority in Interest, (a) ABT shall appoint that number of
persons to the board of managers equal to one (1) less than a majority and (b)
Pon shall appoint that number of persons to the board of managers equal to a
majority.
(ii) So long as ABT (including its Affiliates)
holds more than a Majority in Interest, (a) ABT shall appoint that number of
persons to the board of managers equal to one (1) more than a majority and (b)
Pon shall appoint the remaining members.
(iii) Notwithstanding and other provision of
this SECTION 4.1(a), by the unanimous vote of the managers, the board of
managers may increase the number of managers on the board.
(b) The presence, in person or by proxy, of a
majority of the managers shall constitute a quorum for the transaction of
business by the board of managers. At a meeting of the managers in which a
quorum is present, subject to SECTION 4.1(d), the affirmative vote of a majority
of the managers present at the meeting, in person or by proxy, shall constitute
a valid decision of the board of managers.
(c) Reserved.
(d) For so long as ABT or Pon, respectively, owns
Voting Interests (including any rights or options to purchase or acquire Voting
Interests) representing
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twenty-five percent (25%) or more of the Voting Percentage of the Company, but
less than a Majority in Interest (the "MINORITY PROTECTED MEMBER"), then the
consent of the Managers appointed by the Minority Protected Member shall be
required for the Company or any subsidiary thereof to approve or otherwise take
any of the following actions:
(i) appointing or removing any manager (or
director with respect to any subsidiary, as applicable) or board committee
member designated, or entitled to be designated, by the Minority Protected
Member;
(ii) declaring or paying any dividends or
distributions;
(iii) modifying this Agreement or any other
organizational document with respect to the Company, or any of the constituent
documents of a subsidiary;
(iv) approving, ratifying, or otherwise
consenting to the Company's or any subsidiary's business plan or any material
amendment, supplement, or modification thereto or renewal thereof;
(v) effecting any merger, consolidation,
corporate reorganization or other fundamental business change;
(vi) selling, transferring, encumbering, or
otherwise disposing of twenty percent (20%) or more of the Assets of the Company
or any subsidiary in one transaction or a series of related transactions;
(vii) entering into, waiving, or modifying any
agreement (other than this Agreement) among the Company and its Interest holders
or between the Company and any Affiliate of an Interest holder (other than a
subsidiary of the Company) in any material respect;
(viii) redeeming or repurchasing any Interest or
portion thereof, other than on any pro rata basis, or repurchasing or repaying
any indebtedness of the Company or any of its subsidiaries prior to its stated
maturity in excess of twenty percent (20%) of the principal amount thereof;
(ix) approving, ratifying, or otherwise
consenting to the Company's annual operating budget, or any amendment,
supplement, modification thereto in excess of twenty percent (20%) of any
expenditure contained therein;
(x) assuming, guarantying or otherwise becoming
liable for any debt of any kind, other than trade debt incurred in the ordinary
course of business or other debt in an aggregate amount outstanding at any time
not in excess of twenty percent (20%) of the amount budgeted therefor in the
Company's annual budget;
9
(xi) entering into, or otherwise becoming liable
under, any off-balance sheet financing transaction in an amount, for any
transaction or series of related transaction, in excess of twenty percent (20%)
of the amount budgeted therefor in the Company's annual budget;
(xii) adopting any employee stock purchase or
stock option plan, or issuing any Interest in the Company pursuant to such plan;
(xiii) entering into, waiving, or modifying any
license agreement between the Company and a NOC;
(xiv) registering or offering the Company's or
any subsidiary's securities for public sale;
(xv) issuing or granting any Interests or rights
or options to purchase or acquire Interests; and
(xvi) a material change to, or the Company's
termination of, the License Agreement.
(e) Notwithstanding SECTION 4.1(d), any action by
the board of managers concerning the enforcement of a contract between the
Company or any subsidiary thereof and ABT shall be decided by a vote of a
majority of the non-ABT appointed managers.
4.2 MEMBER VOTING.
(a) The presence, in person or by proxy, of a
Majority in Interest shall constitute a quorum for the transaction of business
by the Members. Except as otherwise stated in this Agreement, the affirmative
vote or written consent of a Majority in Interest shall constitute a valid
decision of the Members.
(b) Notwithstanding any other provision of this
Agreement, to the extent applicable law requires the Members to approve any of
the actions set forth in SECTION 4.1(d), then such actions shall be deemed to be
approved by the Members only with the prior written approval of (i) a Majority
in Interest and (ii) the Minority Protected Member.
(c) Notwithstanding any other provision of this
Agreement, for so long as ABT owns any Interests, any action to approve or
otherwise take any action to declare bankruptcy, enter into suspension of
payments, or to dissolve, voluntarily liquidate, or voluntarily wind-up the
Company or any subsidiary thereof shall be approved by ABT.
4.3 VACANCIES/REMOVALS. Each Member shall have the right to
remove from the board of managers of the Company, with or without cause, any
person or persons appointed solely by such Member as a manager.
10
4.4 NO VOTING OR CONFLICTING AGREEMENTS. Each Member agrees
that it will not, and will not permit any Affiliate to, grant any proxy or enter
into or agree to be bound by any voting trust with respect to its Voting
Interests or to enter into any member agreements or arrangements of any kind
with any Person with respect to its Voting Interests in any such case in a
manner that is inconsistent with the provisions of this Agreement.
4.5 ACTIONS CONSISTENT WITH AGREEMENT. The managers and
Members shall not take any action inconsistent with the provisions of this
Agreement.
4.6 AMENDMENTS TO ORGANIZATIONAL DOCUMENTS. Except for those
rights reserved in SECTIONS 4.1(d)(iii), and 4.2 hereof, each Member agrees to
vote its entire Voting Interest in favor of amending or changing this Agreement
or the Certificate as may be required, in the opinion of the board of managers,
to consummate an initial public offering.
4.7 EXPIRATION OF RIGHTS. On and after the Expiration Date,
SECTIONS 4.1(a) and (d), 4.4 and 4.6 shall expire and be of no further force and
effect.
V. MANAGEMENT AND OPERATIONS OF THE COMPANY
5.1 MANAGEMENT GENERALLY. Subject to the provisions of this
Agreement and the Act, the business and affairs of the Company shall be managed
under the sole direction of the board of managers. All powers of the Company may
be exercised by the board of managers, except as conferred on or reserved to the
Members by the Act or this Agreement. The board of managers shall not, except by
a vote of Majority in Interest but subject to SECTION 4.1(d) and SECTION 4.2,
take any action on behalf of or in the name of the Company or enter into any
commitment or obligation binding upon the Company, except for actions authorized
under or within the scope of the authority granted to the board of managers
pursuant to this Agreement and the Act.
5.2 MEETINGS OF THE BOARD OF MANAGERS. Meetings of the board
of managers shall be held quarterly or at such other time as the board of
managers may determine by vote of a majority of the managers. Meetings shall be
held at the principal place of business of the Company or at such other place as
may be designated in the notice or waivers of notice of such meeting as
determined by the board of managers. Notice of any meeting of the board of
managers shall be given no fewer than ten (10) Business Days and no more than
twenty (20) Business Days prior to the date of the meeting. The attendance of a
manager at any meeting shall constitute a waiver of notice of such meeting,
except where a manager attends a meeting for the express purpose of objecting to
the transaction of any business because the meeting is not lawfully called or
convened. Unless specifically prohibited by the Certificate or the Act, subject
to SECTION 4.1(d), any action required to be taken at a meeting of the board of
managers, or any other action which may be taken at a meeting of the board of
managers, may be taken without a meeting if a consent in writing, setting forth
the action so taken, shall be signed by (i) the managers having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting if five (5) days prior written notice of action to be taken
by written consent was delivered to all members of the board of managers or (ii)
by all
11
members of the board of managers. Subject to SECTION 4.1(d), any such consent
signed by the managers having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting shall have the
same effect as if such action had been taken at a duly called meeting of the
managers and may be stated as such in any document filed with the Secretary of
State of the State of Delaware or with anyone else. Any manager may participate
in and act at any meeting through the use of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear and speak with each other.
5.3 POWERS OF THE BOARD OF MANAGERS. Without in any way
limiting the generality of the foregoing, but subject to the express provisions
of this Agreement, the board of managers shall have, on behalf of the Company,
all rights and powers that may be possessed by a manager under the Act, to the
extent granted by this Agreement, to manage and administer the Company in
accordance with the terms of this Agreement and to perform all acts which it
may, in its sole discretion, deem necessary or desirable, including, but not
limited to, the power to:
(a) Carry out all of the transactions contemplated
hereunder.
(b) Perform all acts, exercise all rights, and make
all decisions for and on behalf of the Company required or permitted to be taken
by the Company.
(c) Acquire, manage and dispose of any and all
property, real or personal, whether tangible or intangible, on behalf of the
Company, including through foreclosure or otherwise.
(d) Borrow money on behalf of the Company from any
Person (including, without limitation, from any Member or any Affiliate of any
Member) or cause the Company to lend money to any Person (including, without
limitation, to any Member or any Affiliate of any Member), and sell, assign,
exchange, transfer, pledge, grant a security interest in, or otherwise encumber
or dispose of, any and all of the Assets of any nature whatsoever.
(e) Compromise, arbitrate or otherwise adjust claims
in favor of or against the Company and initiate, prosecute and defend any
litigation relating to any Company business.
(f) Employ, engage, or subcontract with attorneys,
accountants, bookkeepers, underwriters, escrow agents, depositories, agents for
collection, banks, builders, and any other service provider as the board of
managers may determine to be appropriate, and to terminate the services of any
such entities, all at such time or times as the board of managers may determine.
(g) Negotiate, execute, deliver and perform any and
all contracts and other documents on behalf of the Company, including, but not
limited to, promissory notes, security agreements, contracts of purchase and
sale, deeds and assignments,
12
and to take any and all other action, as the board of managers deems
appropriate, to effectuate any such transaction.
(h) Acquire and enter into any contract of insurance
for the Company that the board of managers deems necessary and proper for the
protection of the Company, either for the conservation of its Assets or for any
purpose convenient or beneficial to the Company.
(i) With reasonable notice and at a mutually agreed
time during regular business hours, to examine the Company's financial records,
including any NOC financial records in the possession of the Company, and
discuss the Company's accounting practices with its independent public
accountants.
5.4 DUTIES AND OBLIGATIONS OF THE BOARD OF MANAGERS.
(a) The board of managers shall take all reasonable
action that may be necessary or appropriate for the continuation of the
Company's valid existence as a limited liability company under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Members or to enable the
Company to conduct the business in which it is engaged.
(b) The board of managers shall use its best efforts
to at all times conduct the affairs of the Company and its Affiliates in such a
manner that the Members shall limit their liability with respect to any Company
liability or obligation to their respective Capital Contributions.
5.5 NO COMPENSATION FOR THE BOARD OF MANAGERS. No manager
shall receive from the Company any cash or other compensation for the services
he/she shall provide to the Company for his/her services as a manager under this
Agreement.
5.6 REIMBURSEMENT OF EXPENSES. Notwithstanding SECTION 5.5
above, each manager shall be entitled to reimbursement from the Company for the
reasonable expenses that he/she pays for or incurs directly on behalf of the
Company in his/her role as a manager, including for attending meetings of the
board of managers.
5.7 OFFICERS. The officers of the Company shall consist of
Dries van der Vossen as President, Xxxx Xxxxxx as Chief Technology Officer and
Secretary and such other officers as may be designated by the board of managers.
The officers shall be appointed by, and shall exercise such powers and perform
such duties as are prescribed by, the board of managers. Each officer shall hold
office for the term for which he or she is appointed and until his or her
successor is elected and qualified. The Company may compensate each officer for
such officer's services in such amounts as are determined by the board of
managers in its sole and absolute discretion. The board of managers may remove
any officer at any time, with or without cause.
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VI. POWERS AND WARRANTIES OF THE MEMBERS;
ADMISSION OF NEW MEMBERS
6.1 POWERS OF THE MEMBERS. Except as expressly provided in
this Agreement, the Members shall take no part in the management of the business
or transact any business for the Company and shall have no power to sign for or
bind the Company solely in their capacity as Members; provided, however, that
the Members shall have the approval and consent rights provided under the Act
and this Agreement.
6.2 MEETINGS OF MEMBERS. A meeting of the Members may be
called by (i) the holder or holders of a Voting Percentage of at least twenty
percent (20%), except as otherwise provided by the Act, (ii) a majority of the
managers, or (iii) the President of the Company. Meetings shall be held at the
principal place of business of the Company or at such other place as may be
designated in the notice or waivers of notice of such meeting as determined by
the Members. Notice of any meeting of the Members shall be given no fewer than
ten (10) Business Days and no more than twenty (20) Business Days prior to the
date of the meeting. The attendance of any Member at any meeting shall
constitute a waiver of notice of such meeting, except where such Member attends
a meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened. Unless
specifically prohibited by the Certificate or the Act, subject to SECTION 4.2,
any action required to be taken at a meeting of the Members, or any other action
which may be taken at a meeting of the Members, may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
(i) holders of Voting Percentages not less than the minimum percentage that
would be necessary to authorize or take such action at a meeting at which the
holders of all the Voting Interests were present and voting if five (5) days
prior written notice of action to be taken was delivered to all Members or (ii)
by all of the Members. Subject to SECTION 4.2, any such consent shall have the
same effect as if such action had been taken at a duly called meeting of the
Members and may be stated as such in any document filed with the Secretary of
State of the State of Delaware or with anyone else. Any Member may participate
in and act at any meeting through the use of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other.
6.3 EXAMINATION OF COMPANY RECORDS. Each Member or its
representative may, during regular business hours, examine and copy (at such
Member's expense) the minutes of the meetings of Members or the board of
managers and the list of Members (where such records are maintained) of the
Company.
6.4 ADMISSION OF NEW MEMBERS. Except for those rights reserved
in SECTIONS 4.1(d)(iii), 4.1(d)(xv), and 4.2 hereof, the Company, with the
approval of the board of managers may, admit additional Persons to the Company
as Members from time to time and create and sell and issue Interests to those
Persons without approval of the existing Members. Any new Member, prior to its
admission as a Member, shall be required to execute this Agreement or a
counterpart to this Agreement, which evidences such new Member's agreement to be
bound to the terms and conditions of this Agreement.
14
VII. RIGHTS AND RESTRICTIONS ON TRANSFERS BY THE MEMBERS
7.1 RESTRICTIONS ON TRANSFERS GENERALLY. Each Member hereby
agrees that such Member shall not, and shall not permit any of its Affiliates
to, directly or indirectly, sell, transfer or otherwise dispose of all or any
part of its Interest except: (i) pursuant to the terms and conditions of this
Article VII; (ii) pursuant to an exemption from registration under the
Securities Act and any state securities or blue sky laws; and (iii) if the
transferee agrees in writing to be bound by the terms hereof and be deemed to be
a Member under this Agreement; provided, that if such transfer is to any Person
or Affiliate of any Person that is in competition with ABT, the Company or any
Affiliate of ABT or the Company, the written consent of ABT shall be required.
7.2 RIGHT OF FIRST OFFER.
(a) If a Member desires to sell, transfer or
otherwise dispose of any of its Interest (other than to an Affiliate thereof),
the Member (the "SELLER") shall first deliver a written notice to each other
Member of such proposed sale, transfer or other disposition (the "FIRST OFFER
NOTICE"); provided, that this SECTION 7.2 shall not apply to the ABT Option (as
defined in SECTION 7.6). The First Offer Notice shall contain (i) the proposed
purchase price, (ii) the Interest or portion thereof proposed to be sold or
transferred and (iii) the terms of payment and other material terms and
conditions of the Seller's offer.
(b) Each Member shall have the right, exercisable
upon written notice to the Seller within fifteen (15) days after receipt of the
First Offer Notice, to either: (i) purchase, on the terms and conditions as set
forth in the First Offer Notice all, but not less than all, of the Interest that
is the subject of the First Offer Notice on a pro rata basis based on the
Ownership Percentage owned by each Member electing to participate in the right
of first offer (the "FIRST PURCHASE RIGHT") or (ii) notify the Seller in writing
of a price per share (the "MEMBER STATED PRICE") at which such Member would be
willing to purchase the Interest specified in the First Offer Notice (the
"ALTERNATIVE MEMBER OFFER"). Each Member electing to exercise the First Purchase
Right shall notify the Seller in writing of such election (the "NOTICE OF FIRST
OFFER ACCEPTANCE") and shall complete the First Purchase Right within sixty (60)
days after delivery of the Notice of First Offer Acceptance.
(c) If no Member elects to exercise the First
Purchase Right pursuant to SECTION 7.2(b) above, the Seller may, not later than
one hundred twenty (120) days following the expiration of the Members' First
Purchase Rights, transfer the Interest that was the subject of the First Offer
Notice on substantially the same terms and conditions as those described in the
First Offer Notice (other than price) to either (i) the Member that delivered
the Alternative Member Offer with the highest Member Stated Price (an
"ALTERNATIVE MEMBER OFFER SALE") at the Member Stated Price included in such
Alternative Member Offer or (ii) to a third party at a price per share that is
at least ten percent (10%) greater than the highest Member Stated Price, if any
(a "PERMITTED THIRD PARTY SALE"); provided, however, that any Member (including
its Affiliates) that holds a majority Voting Percentage (a "MAJORITY MEMBER")
must also comply with the terms of SECTION 7.3, to the extent applicable, before
transferring its Interest pursuant to a Permitted Third Party Sale. Any proposed
transfer on terms and conditions
15
materially different or at a lower price than one hundred ten percent (110%) of
the highest Member Stated Price, as well as any proposed transfer more than one
hundred twenty (120) days following the expiration of the First Purchase Right,
shall again be subject to the First Purchase Right of the other Members as set
forth in this SECTION 7.2 and shall require compliance with the procedures as
described in this SECTION 7.2.
7.3 TAG ALONG RIGHT.
(a) If a Permitted Third Party Sale would cause the
Majority Member (the "SELLING MEMBER") to own less than a Majority in Interest,
then prior to transferring such Interest pursuant to such Permitted Third Party
Sale, the Selling Member shall notify each other Member in writing (the "TAG
ALONG NOTICE") of such proposed transfer identifying (i) the name and address of
the proposed buyer and (ii) the proposed purchase price, the terms of payment
and other material terms and conditions of the proposed buyer's offer. Within
fifteen (15) days of receipt of a Tag Along Notice, each Member shall notify
(the "TAG ALONG ELECTION NOTICE") the Selling Member if it elects to participate
in such transfer (the "TAG ALONG RIGHT") and shall state the Interest that such
Member desires to sell. Each Member electing to participate in the Tag Along
Right (a "TAG ALONG MEMBER") may elect to sell up to such number of Interests as
is equal to the total number of Interests held by such Tag Along Member
multiplied by a fraction, the numerator of which shall be the number of
Interests proposed to be sold by such Selling Member and the denominator of
which shall be the aggregate number of Interests held by such Selling Member.
Each Tag Along Member shall have the right and be obligated to (i) sell to the
proposed buyer, at the same price and on the same terms as the Selling Member,
the number of Interests stated in its Tag Along Election Notice and (ii) enter
into a purchase agreement substantially similar in form and substance to the
purchase agreement the Selling Member executes. The number of Interests that the
Selling Member may sell will be reduced by the number of Interests sold by the
Tag Along Members.
(b) In the event that the proposed buyer does not
purchase the portion of the Interests that the Tag Along Member elects to sell
pursuant to the foregoing on the same terms and conditions as the Interests
purchased from the Selling Member, then the Selling Member shall not be
permitted to sell any Interests to the proposed buyer. If no Tag Along Election
Notice is received within fifteen (15) days of the receipt of the Tag Along
Notice, the Selling Member shall have the right for a period of one hundred
twenty (120) days thereafter to transfer the Interests to the proposed buyer on
terms and conditions no more favorable to the Selling Member than those stated
in the Tag Along Notice.
7.4 DRAG ALONG RIGHT.
(a) If the Majority Member proposes to sell in a
bona fide arm's length Permitted Third Party Sale or an Alternative Member Offer
Sale all Interests collectively owned by it and its Affiliates (the
"TRANSFERRING MEMBER") to any Person or Persons who are not Affiliates of the
Majority Member and in which the Majority Member does not have a five percent
(5%) or greater equity interest (the "PROPOSED TRANSFEREE"), the Transferring
Member shall have the right (the "DRAG ALONG RIGHT"), subject to applicable law
16
and compliance with any other restrictions applicable to such transfer, to
require all Members to sell all Interests then held by the other Members to the
Proposed Transferee, on the same terms and conditions as are applicable to the
Transferring Member.
(b) The Drag Along Right may be exercised only after
January 6, 2004, and if prior to the Expiration Date, only with the written
consent of a majority of the Voting Interests not held by the Majority Member.
(c) To exercise a Drag Along Right, the Transferring
Member shall give each Member (each, a "DRAG ALONG MEMBER"), at least fifteen
(15) days prior to the proposed transfer to the Proposed Transferee, a written
notice (the "DRAG ALONG NOTICE") containing (i) the name and address of the
Proposed Transferee and (ii) the proposed purchase price, the terms of payment
and other material terms and conditions of the Proposed Transferee's offer. Each
Drag Along Member shall thereafter be obligated to (i) sell to the Proposed
Transferee all Interests owned by such Drag Along Member and (ii) enter into a
purchase agreement on the same economic terms and substantially similar in form
and substance to the purchase agreement the Transferring Member executes;
provided, however, that in no event shall the purchase agreement provide for an
indemnity payable by a Drag Along Member greater than the proceeds received by
that Drag Along Member from the Proposed Transferee. If the sale is not
consummated within a period of one hundred twenty (120) days following the date
of the Drag Along Notice, then each Drag Along Member shall no longer be
obligated to sell such Member's Interests pursuant to such Drag Along Right but
shall remain subject to the provisions of this SECTION 7.4 with respect to any
subsequent proposed transfer described in this SECTION 7.4.
7.5 TRANSFERS TO AFFILIATES. Notwithstanding anything to the
contrary contained in this ARTICLE VII, any Member ("TRANSFEROR") may transfer
any or all of its Interest to an Affiliate (each a "PERMITTED TRANSFEREE"),
provided, however, that in each case such transfer shall be subject to the
Transferor and Permitted Transferee agreeing in writing, for the benefit of the
Company and the other Members (who shall be third party beneficiaries of such
agreement) that the Transferor will repurchase such Interests in the event such
Permitted Transferee ceases to be an Affiliate; and provided, further, that the
Permitted Transferee may only transfer its Interests to the Transferor from whom
it received such Interests or any of such Transferor's Permitted Transferees or
otherwise in accordance with the terms hereof.
7.6 ABT OPTION. Beginning on the date on which Pon and ABT
agree in writing on a business plan for the Company and ending on the second
(2nd) anniversary of such date (the "OPTION EXPIRATION DATE") ABT (including its
Affiliates) shall have an option (the "ABT OPTION") to purchase from Pon, at
Fair Market Value, that portion of Pon's Interest such that, after the exercise
of such option, ABT's (including its Affiliates) Voting Percentage and Ownership
Percentage shall equal fifty one percent (51%), respectively. ABT shall exercise
the ABT Option by delivering to Pon written notice of such election on or prior
to the Option Expiration Date and, in such event, ABT and Pon shall mutually
select an investment banking firm to appraise the Fair Market Value of the
Interests to be transferred pursuant to the ABT Option no later than thirty (30)
days after such notice was received by Pon. The investment
17
banking firm shall have forty five (45) days to make such appraisal and shall
deliver such appraisal in writing to ABT and Pon within such forty five (45) day
period. No later than ten (10) days after the appraisal is delivered, ABT shall
deliver to Pon, in cash or other agreed upon means, the Fair Market Value of the
Interests to be transferred, and thereafter EXHIBIT A of this Agreement shall be
amended, without any vote of the Members or board of managers, to accurately
reflect the Voting Percentages and Ownership Percentages of Pon and ABT as a
result of the exercise of the ABT Option. Notwithstanding any other provision
contained in this Agreement, all or any portion of an Interest that may be
transferred by Pon after the date hereof shall continue to be subject to the ABT
Option.
7.7 TRANSFEREES SUBJECT TO AGREEMENT. Any transferor of any
Interest shall, as a condition of the consummation of such transfer, sale or
other disposition, require the transferee to agree in writing to be subject to
and bound by the terms of this Agreement as a Member under this Agreement (it
being understood that the transferee shall be subject to the obligations of the
transferor but shall not be entitled to the rights of the transferor unless the
transferor expressly assigns such rights and, with respect to which, if
assigned, the transferor shall cease to be entitled, to the extent of such
assignment). Any transfer made in violation of this SECTION 7.7 shall be null
and void.
7.8 EXCHANGE RIGHTS.
(a) ABT shall have the right to exchange shares of
its common stock or pay cash, or any combination thereof, for all or any portion
of the Interests held by any Member (the "EXCHANGE RIGHTS"); provided, however,
that within one hundred twenty (120) days of the Exchange Rights Notice (as
defined below), ABT shall file a registration statement with the United States
Securities and Exchange Commission (the "SEC") to register under the Securities
Act any ABT common stock that has been exchanged pursuant to this SECTION 7.8.
ABT will use its commercially reasonable best efforts to have such registration
statement declared effective by the SEC as soon thereafter as possible. The
Exchange Rights may be exercised multiple times with respect to the Interests of
one or more Members.
(b) To exercise any Exchange Rights, ABT shall give
the relevant Member (each an "EXCHANGE RIGHTS MEMBER") a written notice of ABT's
exercise of the Exchange Rights (the "EXCHANGE RIGHTS NOTICE") stating (i) the
Fair Market Value of the Interests of the Exchange Rights and (ii) the number of
shares of ABT common stock and/or the amount of cash to be paid. The value of
ABT common stock shall be based on the ten (10) day average price of ABT common
stock as quoted on NASDAQ immediately prior to the date of delivery of the
Exchange Rights Notice.
7.9 PARTICIPATION RIGHTS.
(a) Except with respect to (i) a registration
relating solely to employee benefit plans, (ii) a registration relating solely
to a transaction pursuant to Rule 145 of the Securities Act, or (iii) an initial
public offering, if at any time the Company determines to register under the
Securities Act any of its Interests in an offering in the United States or any
jurisdiction in Europe and if at such time any Member is not able to transfer or
sell its Interests
18
without registration by the Company due to restrictions placed on such transfer
or sale by the securities laws of that jurisdiction (a "RESTRICTED MEMBER"), the
Company will:
(i) give each Restricted Member 20 days prior
written notice of such registration (a "REGISTRATION NOTICE"); and
(ii) include in such registration (and any
related qualification under blue sky laws or other compliance requirement), and
in any underwriting involved therein, all the Interests specified in a written
request received by the Company within fifteen (15) days after the Company's
delivery of the Registration Notice.
(b) If the registration of which the Company gives
notice is for an offering involving an underwriting, the Company shall so advise
the Restricted Members as part of the Registration Notice. In such event, the
right of any Restricted Member to participate in the registration will be
conditioned upon the Restricted Member's participation in such underwriting and
the inclusion of such Restricted Member's Interests in the underwriting to the
extent provided herein. All Restricted Members proposing to distribute their
securities through such underwriting shall (together with the Company) enter
into an underwriting agreement in customary form with the managing underwriter
selected by the Company; provided, however, that in no event shall the
underwriting agreement provide for an indemnity payable by a Restricted Member
greater than the proceeds received by that Restricted Member from the offering.
(c) Notwithstanding any other provision of this
SECTION 7.9, if the managing underwriter determines that marketing factors
require limitation of the number of Interests to be underwritten, the managing
underwriter may exclude some or all Interests requested to be included in such
registration by the Restricted Members. In the event the managing underwriter
determines to exclude some or all Interests, the number of Interests held by
Restricted Members that may be included in the registration and underwriting
shall be allocated among all Restricted Members who have requested to be
included in the registration in proportion, as nearly as practicable, to the
respective Interests held by all such requesting Restricted Members at the time
of the registration.
7.10 PREEMPTIVE RIGHTS.
(a) If at any time the Company determines to issue
additional Interests (or other equity interests) in the Company to any Member
(the "PURCHASING MEMBER") it shall deliver a written notice to each other Member
of such proposed issuance (the "PREEMPTIVE NOTICE"). The Preemptive Notice shall
contain (i) the proposed issuance price, (ii) the total number of Interests
proposed to be issued, (iii) the identity of the Purchasing Member, and (iv) any
other material terms and conditions of the issuance.
(b) Each other Member shall have the right,
exercisable upon written notice to the Company within fifteen (15) days after
receipt of the Preemptive Notice (the "PREEMPTIVE RIGHTS NOTICE PERIOD"), to
purchase, on the terms and conditions as set forth in the Preemptive Notice the
Interests (or other equity interests) proposed to be issued on a
19
pro rata basis based on the Ownership Percentage owned by each other Member
electing to participate in the preemptive right (the "PREEMPTIVE RIGHT"). Any
and all Members electing to exercise the Preemptive Right within the Preemptive
Rights Notice Period shall enter into a purchase agreement with the Company and
the Purchasing Member within sixty (60) days following the date of the
Preemptive Notice on substantially similar terms and conditions as described in
the Preemptive Notice.
(c) If no other Member exercises the Preemptive
Right within the Preemptive Rights Notice Period, the Company may, not later
than sixty (60) days following expiration of the Preemptive Rights, conclude the
issuance of Interests (or other equity interests) to the Purchasing Member on
the same economic terms and substantially the same terms and conditions as
described in the Preemptive Notice. Any proposed issuance of Interests (or other
equity interests) to a Purchasing Member on terms and conditions materially
different from those described in the Preemptive Notice or any proposed issuance
more than sixty (60) days following the expiration of the Preemptive Right,
shall again be subject to the Preemptive Right of the other Members as set forth
in this SECTION 7.10 and shall require compliance with the procedures as
described in this SECTION 7.10.
7.11 EXPIRATION OF RIGHTS AND RESTRICTIONS. The provisions set
forth in ARTICLE VII hereof, shall expire and be of no further force and effect
on and after the Expiration Date to the extent permitted by law, except that the
provisions of SECTIONS 7.4, 7.6, 7.8, and 7.9 shall survive the Expiration Date
and SECTIONS 7.2 and 7.3 shall survive for any Member that owns a five percent
(5%) or greater Ownership Percentage.
7.12 ABT OWNERSHIP. Without the prior written consent of ABT,
the Company shall not issue any interest in the Company.
7.13 LIQUIDATION RIGHT FOLLOWING ACQUISITION. If either Pon or
ABT (i) is merged or consolidated with an unaffiliated third party and is not
the surviving entity of such merger or consolidation, or (ii) transfers all or
substantially all its assets to an unaffiliated third party, or (iii) is
otherwise acquired in connection with one transaction or series of related
transactions, (each an "Acquisition") the acquired party (or its successor)
shall, no later than ten (10) days after the effective date of the Acquisition,
deliver to the non-acquired party written notice of the occurrence of such
Acquisition (the "Acquisition Notice"). At any time within 120 days after its
receipt of the Acquisition Notice, the non-acquired party may, by delivery of
written notice to the acquired party (or its successor), elect to dissolve the
Company in accordance with the terms of this Agreement, and in such event, both
Pon and ABT (or their respective successors) shall take all actions reasonably
necessary to dissolve the Company in accordance with the terms of this
Agreement.
VIII. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 MEMBER REPRESENTATION. As of the date on which any Member
acquires an Interest, such Member represents, warrants and covenants as to
itself to the Company as follows:
20
(a) No Other Agreement Concerning Interests. It is
not, after giving effect to the transactions occurring on or as of the date
hereof, a party to any other agreement with respect to the holding, voting,
acquisition or disposition of any Interests, except as contemplated by this
Agreement;
(b) Experience; Risk. It has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the purchase of the Interests pursuant to this Agreement
and of protecting its interests in connection herewith. It has the ability to
bear the economic risk of the investment, including complete loss of the
investment. It is experienced in evaluating and investing in new companies such
as the Company;
(c) Investment. It is acquiring the Interests for
its own account, not as a nominee or agent, and not with a view to, or for
resale in connection with, any distribution thereof, and it has no present
intention of selling, granting any participation in, or otherwise distributing
the same. It understands that the Interests have not been registered under the
Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of its
representations as expressed herein;
(d) Restricted Securities. It understands and
acknowledges that the Interests are characterized as "restricted securities"
under United States federal securities laws inasmuch as they are being acquired
from the Company in a transaction not involving a public offering and that under
such laws and applicable regulations the Interests may be resold without
registration under the Securities Act or other applicable foreign securities
laws only in certain limited circumstances. It acknowledges that the Interests
must be held indefinitely unless subsequently registered under the Securities
Act or other applicable foreign securities laws or an exemption from such
registration is available;
(e) No Public Market. It understands and
acknowledges that no public market now exists for any of the securities issued
by the Company and that there can be no assurance that a public market will ever
exist therefor;
(f) Authorization. It has the full right, power and
authority to enter into and perform its obligations under this Agreement and,
when executed and delivered by it, this Agreement will constitute its valid and
binding obligation, enforceable in accordance with its terms, subject to the
laws of general application relating to bankruptcy, insolvency and the relief of
debtors, rules of law governing specific performance, injunctive relief and
other equitable remedies;
(g) Government Consents. No consent, approval or
authorization of or designation, declaration or filing with any state, federal,
or any foreign governmental authority on the part of the Member is required in
connection with the valid execution and delivery of this Agreement by the
Member, and the consummation by the Member of the transactions contemplated
hereby;
21
(h) Legends. It is understood that each certificate
representing the Interests and any securities issued in respect thereof or
exchange therefor shall bear the legends below in substantially the following
form (in addition to any legend required under applicable securities laws).
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "ACT"). NO SALE OR DISPOSITION OF THESE
SECURITIES MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE ACT OR RECEIPT OF A NO ACTION LETTER FROM
THE SECURITIES AND EXCHANGE COMMISSION.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO,
AND MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH AN AGREEMENT
AMONG THE COMPANY AND THE HOLDER OF THESE SECURITIES AND
CERTAIN OTHER HOLDERS OF THE COMPANY'S SECURITIES, A COPY OF
WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
(i) Accredited Investor Status. It presently
qualifies as an "accredited investor" within the meaning of Regulation D (17
C.F.R. 230.501) of the rules and regulations promulgated under the Securities
Act;
(j) Brokers or Finders. It has not incurred, and
will not incur, directly or indirectly, any liability for brokerage or finders'
fees or agents' commissions or any similar charges in connection with this
Agreement or any transaction contemplated hereby;
(k) Market Standoff. It agrees that if so requested
by the Company or any representative of the underwriters in connection with
registration of the initial public offering or any secondary offering of any
securities of the Company under the Securities Act or under applicable foreign
securities laws, it shall not sell or otherwise transfer any Interests or other
securities of the Company during the 180 day period following the effective date
of such registration statement or other applicable document so long as at least
ninety percent (90%) of all non-ABT Members are similarly restricted. The
Company may impose stop transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such 180 day period; and
(l) Access to Information. It has had the
opportunity to ask questions of, and to receive answers from, appropriate
executive officers of the Company with respect to the terms and conditions of
the transactions contemplated hereby and with respect to the business, affairs,
financial condition and results of operations of the Company. It has had access
to such financial and other information as is necessary in order for it to make
a fully informed decision as to investment in the Company, and has had the
opportunity to obtain any additional information necessary to verify any of such
information to which it has had access.
22
8.2 COMPANY REPRESENTATION. As of the date on which a Member
acquired an Interest directly from the Company, the Company represents, warrants
and covenants to that Member as follows:
(a) No Other Agreement Concerning Interests. Except
for this Agreement and any agreement pursuant to which any existing Member has
purchased Interests from the Company, the Company is not a party to any other
agreement with respect to the holding, voting, acquisition or disposition of any
Interests;
(b) Valid Issuance. The Interests when issued in
accordance with the provisions of this Agreement will be validly issued, fully
paid and nonassessable Interests of the Company; provided, however, that such
Interests may be subject to restrictions on transfer under United States' state
and/or federal securities laws or other foreign securities laws as set forth
herein;
(c) Governmental Consent, etc. No consent, approval
or authorization of or designation, declaration or filing with any state or
federal governmental authority on the part of the Company is required in
connection with the valid offer, sale or issuance of the Interests, except the
qualification under the California Corporate Securities Law or other applicable
state securities laws, of the offer and sale of the Interests, which filing and
qualification, if required, will be effected in a timely manner
(d) Brokers and Finders. The Company has not
incurred, and will not incur, directly or indirectly, any liability for
brokerage or finders' fees or agents' commissions or any similar charges in
connection with this Agreement or any transactions contemplated hereby;
(e) Authorization. The Company has the full right,
power and authority to enter into and perform its obligations under this
Agreement and, when executed and delivered by it, this Agreement will constitute
its valid and binding obligation, enforceable in accordance with its terms,
subject to the laws of general application relating to bankruptcy, insolvency
and the relief of debtors, rules of law governing specific performance,
injunctive relief and other equitable remedies;
(f) Financial Statements. The Company shall
maintain, for each quarter and each fiscal year, statements of income,
stockholder's equity, cash flow and balance sheets of the Company on a
consolidated basis setting forth, in each case, in comparative form,
corresponding consolidated figures from the preceding fiscal year or
corresponding quarter of the preceding fiscal year, as applicable, all in
accordance with generally accepted accounting principles in the United States
("GAAP"); and
(g) No Conflicts. Neither the execution and delivery
by the Company of this Agreement nor the consummation of the transactions
contemplated hereby will conflict with or result in a breach in any material
respect of any agreement or instrument to which the Company is a party.
23
(h) Reserved.
(i) Compliance with Law and Regulation. The Company
is and will continue to be in compliance with all applicable laws, statutes,
ordinances, regulations, rules, and other requirements imposed by any United
States federal, state, or local governmental authority ("GOVERNMENTAL
Authority") which could have a material adverse affect on the Company. The
Company has not received any written notice to the effect, or has otherwise been
advised, that it is not in compliance with any of such laws, statutes,
ordinances, regulations, rules or other requirements imposed by an Governmental
Authority.
8.3 NON-SOLICITATION; NON-HIRE. Each Member other than ABT,
for so long as such Member holds the largest equity interest in any NOC and for
one year thereafter, agrees not to directly or indirectly, on its own behalf or
on behalf of or in conjunction with any Person, recruit, solicit, or induce or
attempt to recruit, solicit, hire or induce any employee of the Company, ABT,
any NOC or any subsidiary of the Company, ABT or any NOC (or any Person who was
an employee of the Company, ABT, any NOC or any subsidiary of the Company, ABT
or any NOC within twelve (12) months of the date of solicitation) to become
employed by or to be engaged in a business which is competitive or may be
competitive with the Company, ABT, any NOC or any subsidiary of the Company, ABT
or any NOC.
8.4 DISCLOSURE OF MEMBER IDENTITY. The Company and the Members
will not disclose the terms and conditions of each Member's investment in the
Company without the prior written consent of the affected Member; provided,
however, that the Company and any Member may disclose (i) the name of each
Member to the public, (ii) the terms and conditions of any Member's investment
in the Company to its Affiliates or any other potential Member, and (iii) any
information to the extent required by law.
8.5 ANNUAL BUDGET. By December 31 of each year, the Chief
Executive Officer of the Company shall propose and the board of managers shall
approve an annual budget detailing the expenses of the Company on a consolidated
basis for the following year.
8.6 RESERVED.
8.7 INSURANCE. The Company shall maintain insurance covering
actions and omissions by the officers, managers and directors of the Company and
its subsidiaries pursuant to customary terms approved by the board of managers,
to the extent such insurance is available to the Company.
8.8 RESERVED.
8.9 ANNUAL BUDGET. No later than thirty (30) days after the
beginning of each fiscal year (as set forth in SECTION 11.1 hereof), the board
of managers shall approve, subject to SECTIONS 4.1(d) and 4.2 hereof, a
comprehensive business plan, including financial and operating plans, for the
Company and its subsidiaries for such fiscal year. Such business plan shall
include, at a minimum, (a) the business goals for the Company and its
subsidiaries, (b) capital and operating budgets for the succeeding three (3)
years, (c) cash flow and other financial
24
projections for the succeeding three (3) years, (d) material contracts and other
transactions to be entered into by the Company and its subsidiaries, and (e)
plans, if any, for material changes in the Business, management, direction, or
operation of the Company or its subsidiaries. Any material amendment,
supplement, or modification of such business plan shall not be effective unless
and until it is approved by the board of managers, subject to SECTIONS 4.1(d)
and 4.2 hereof.
8.10 RELATED PARTY TRANSACTIONS. The Company shall not enter
into, or permit any of its subsidiaries to enter into, any transaction with a
Related Party of the Company or such subsidiary, unless (a) the disinterested
managers of the Company's board of managers shall have determined that the terms
of such transaction are fair and reasonable and no less favorable to the Company
or such subsidiary than those that could be obtained in an arms' length
transaction with a Person that is not a Related Party of the Company or such
subsidiary and (b) such transaction is otherwise approved by such disinterested
managers in accordance with the terms and conditions of this Agreement;
provided, that any transaction with respect to the License Agreement shall not
be subject to SECTION 8.10(a) hereof.
8.11 DELIVERY OF FINANCIAL STATEMENTS. The Company shall cause
to be prepared and distributed to each Member (a) audited consolidated financial
statements no later than sixty (60) days after the end of each calendar year,
(b) unaudited consolidated financial statements no later than thirty (30) days
after the end of each calendar quarter, and (c) an unaudited consolidated
balance sheet and statement of income or loss, as applicable, no later than ten
(10) days after the end of each calendar month, each prepared in accordance with
GAAP applied on a consistent basis.
IX. DISTRIBUTIONS
9.1 DISTRIBUTIONS. Except as provided in SECTION 14.3 hereof
in connection with the dissolution and liquidation of the Company, the Company
shall make distributions to the Members, in accordance with, and in proportion
to, their respective Ownership Percentages, out of the available net cash flow
(after the establishment of reserves under SECTION 9.2 hereof) within three (3)
months after the end of each calendar year, subject to the prior approval by the
Members pursuant to SECTION 4.2 hereof. Notwithstanding anything in this
Agreement to the contrary, neither the Company nor any person on behalf of the
Company shall make any distributions except to the extent permitted under the
Act or other applicable law.
9.2 ESTABLISHMENT OF RESERVES. Notwithstanding anything to the
contrary in SECTION 9.1 hereof, the board of managers may retain an amount of
cash it deems reasonably necessary to satisfy the obligations of the Company on
an annual net operating basis including, without limitation, debt payments,
legal fees and expenses, audit costs and unforeseen contingencies. Other Company
funds that the board of managers determines are not needed for Company reserves
or operations shall be distributed to the Members from time to time in the board
of managers' sole and absolute discretion in accordance with SECTION 9.1 hereof.
25
9.3 LIQUIDATING DISTRIBUTIONS. Notwithstanding SECTIONS 9.1
and 9.2 hereof, cash or other property of the Company available for distribution
upon the dissolution and liquidation of the Company (including cash received
upon the sale or other disposition of the Assets in anticipation of
liquidation), shall be distributed as provided in accordance with the provisions
of SECTION 14.3 hereof.
X. MAINTENANCE OF CAPITAL ACCOUNTS; ALLOCATIONS
10.1 ALLOCATIONS OF PROFIT OR LOSS.
(a) Profit. The Company shall establish for each
Member on the books of the Company a Capital Account. For each Fiscal Year or
portion thereof, Profit shall be allocated among the Members (after giving
effect to the allocations contained in SECTIONS 10.2 and 10.3) first in the
proportion and to the extent that Losses have been allocated to the Members
pursuant to SECTION 10.1(b); and thereafter to the Members in accordance with
their respective Ownership Percentages.
(b) Losses. The Company shall allocate Losses to the
Members in accordance with their respective Ownership Percentages.
(c) Notwithstanding the foregoing, except in
connection with a sale or disposition of the ABT Contribution, any Profit or
Loss attributable to any appreciation or depreciation in the ABT Contribution
shall be allocated to ABT; provided, however, that for purposes of this SECTION
10.1(c), a disposition or sale of the ABT Contribution shall not include an
assignment of any such Assets to ABT.
10.2 TAX ALLOCATIONS; CERTAIN BOOK/TAX DIFFERENCES.
(a) All items of income, gain, loss, deduction and
credit shall be allocated in the manner that the corresponding item of Profit or
Loss was allocated pursuant to SECTION 10.1.
(b) In accordance with Section 704(c) of the Code
and the applicable Treasury Regulations thereunder, income, gain, loss,
deduction and tax depreciation with respect to any Asset contributed to the
capital of the Company or otherwise revalued on the books of the Company shall,
solely for income tax purposes, be allocated among the Members so as to take
into account any variation between the adjusted tax basis of such property to
the Company and the fair market value of such property as determined at the time
of the contribution or revaluation. In addition, the board of managers, with the
prior approval of ABT, may make "curative" or "remedial" allocations (within the
meaning of the Treasury Regulations under Section 704(c) of the Code) in any
manner that reasonably reflects the purpose and intention of this Agreement,
including (i) "curative" allocations which offset the effect of the "ceiling
rule" for a prior taxable year (within the meaning of Treasury Regulation
Section 1.704-3(c)(3)(ii)) and (ii) "curative" allocations from the disposition
of contributed property (within the meaning of Treasury Regulation Section
1.704-3(c)(3)(iii)(B)). The foregoing allocations made pursuant
26
to this SECTION 10.2(b) shall be as determined by the board of managers (with
the prior approval of ABT) in accordance with any permissible method under
Section 704(c) of the Code and any applicable Treasury Regulations thereunder.
10.3 SPECIAL ALLOCATIONS. The following special allocations
shall be made in the following order of priority:
(a) Minimum Gain Chargeback. Except as otherwise
provided in Treasury Regulations Section 1.704-2(f), notwithstanding any other
provision of this ARTICLE X, if there is a net decrease in Company Minimum Gain
during any Fiscal Year, each Member shall be specially allocated items of
Company income and gain for such period in proportion to and to the extent of an
amount equal to the portion of such Member's share of the net decrease in
Company Minimum Gain, determined in accordance with Treasury Regulations
Sections 1.704-2(f) and 2(g). The items so allocated shall be determined in
accordance with Treasury Regulation Sections 1.704-2(f)(6) and 1.704-2(j)(2).
This Section 10.3(a) is intended to comply with the minimum gain chargeback
requirement in Treasury Regulation Section 1.704(f) and shall be interpreted
consistently therewith.
(b) Qualified Income Offset. If any Member
unexpectedly receives an adjustment, allocation or distribution described in
Treasury Regulation Section 1.704-l(b)(2)(ii)(d)(4), (5) or (6), items of
Company income and gain shall be specially allocated to such Member in an amount
and manner sufficient to eliminate, to the extent required by Treasury
Regulation Section 1.704-1(b)(2)(ii)(d), the Adjusted Capital Account Deficit of
such Member as quickly as possible, provided that an allocation pursuant to this
Section 10.3(b) shall be made only if and to the extent that such Member would
have an Adjusted Capital Account Deficit after all other allocations provided
for in this ARTICLE X have been tentatively made as if this SECTION 10.3(b) were
not in this Agreement. This SECTION 10.3(b) is intended to comply with the
"qualified income offset" provision of such Treasury Regulation Section and
shall be interpreted consistent therewith.
(c) Special Income Allocation. In the event any
Member has a deficit Capital Account balance at the end of any Fiscal Year or
portion thereof that is in excess of the amount such Member is obligated to
restore pursuant to Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5),
each such Member shall be specially allocated items of Company income and gain
in the amount of such excess as quickly as possible, provided that an allocation
pursuant to this SECTION 10.3(c) shall be made only if and to the extent that
such Member would have an Adjusted Capital Account Deficit after all other
allocations provided for in this Agreement have been tentatively made as if this
SECTION 10.3(c) were not in this Agreement.
(d) Nonrecourse Deductions. Nonrecourse Deductions
for any Fiscal Year or portion thereof in respect of an Asset shall be allocated
(as nearly as possible) under Treasury Regulation Section 1.704-2 among the
Members in accordance with their relative Ownership Percentages in the case of
Nonrecourse Deductions in respect of an Asset.
27
(e) Member Nonrecourse Deductions. Any Member
Nonrecourse Deductions for any Fiscal Year or other period shall be allocated to
the Member that potentially bears an economic risk of loss with respect to the
Member Nonrecourse Debt to which such Member Nonrecourse Deductions are
attributable in accordance with the principles set forth in Treasury Regulation
Section 1.704-2(i).
(f) Member Minimum Gain Chargeback. Except as
otherwise provided in Treasury Regulation Section 1.704-2(i), if there is a net
decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member
Nonrecourse Debt during any Fiscal Year or portion thereof, each Member who has
a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member
Nonrecourse Debt, determined in accordance with Treasury Regulation Section
1.704-2(i)(5), shall be specially allocated items of Company income and gain for
such Fiscal Year (and if necessary, subsequent Fiscal Years) in an amount equal
to such Member's share of the net decrease in Member Nonrecourse Debt,
determined in accordance with Treasury Regulations Section 1.704-2(i)(4).
Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Member pursuant thereto. The
items to be so allocated shall be determined in accordance with Treasury
Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This SECTION 10.3(f) is
intended to comply with the minimum gain chargeback requirement in Treasury
Regulation Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.
10.4 ALLOCATIONS UPON TRANSFER OF INTERESTS IN THE COMPANY. In
the event of a transfer of an Interest in the Company permitted under this
Agreement, all items of income, gain, loss, deduction and credit for the Fiscal
Year in which the transfer occurs shall be allocated for Federal income tax
purposes between the transferor and the transferee on the basis of the ownership
of the Interests at the time the particular item is taken into account by the
Company for Federal income tax purposes, except to the extent otherwise required
by law. Distributions made on or after the effective date of transfer shall be
made to the transferee, regardless of when such distributions accrued on the
books of the Company. The effective date of the transfer shall be (a) in the
case of a voluntary transfer, the actual date the transfer is recorded on the
books of the Company, or (b) in the case of an involuntary transfer, the date of
the operative event.
XI. ACCOUNTING PROCEDURE; TAX MATTERS
11.1 FISCAL YEAR. The fiscal year of the Company shall begin
on January 1 and shall end on December 31 of each year.
11.2 BOOKS OF ACCOUNT. At all times during the existence and
continuance of the Company, the board of managers shall cause to be kept
accurate, complete, and proper books, records, and accounts pertaining to the
Company's affairs, including: (a) a list of all Members and their Capital
Contributions, Ownership Percentages, Voting Percentages and Capital Accounts,
(b) a copy of the Certificate and all amendments thereto and all powers of
attorney pursuant to which any Certificate has been executed, (c) a copy of this
Agreement and all amendments thereto, (d) copies of the Company's federal, state
and local tax returns and financial statements, and (e) the Company's books and
records. Such books and records shall be
28
kept on the accrual basis of accounting in conformity with GAAP. The method of
accounting followed by the Company for Federal income tax purposes shall be the
accrual method. All books, records, and accounts of the Company shall be kept at
its principal office or at such other office as the board of managers may
designate for such purpose.
11.3 PREPARATION AND FILING OF INCOME TAX RETURNS AND OTHER
WRITINGS. ABT shall cause the preparation and timely filing of all Company tax
returns, shall on behalf of the Company make such tax elections (including,
without limitation, any election under Section 754 of the Code, which Section
754 election may be made in the Tax Matters Partners' discretion, upon the
written request of any Member), determinations, and allocations which it, in its
sole and absolute discretion, deems to be appropriate, and shall timely make all
other tax related filings required by any governmental authority having
jurisdiction to require such filing, the cost of which shall be borne by the
Company. ABT will furnish copies of such returns to each Member upon request.
ABT shall also cause to be delivered to the Members, within ninety (90) days
after the expiration of each tax year of the Company, a Form K-1 prepared by the
Company or the Company's accountant. This form shall show the allocation of
Profit or Loss of the Company for Federal income tax purposes, including all
separately stated items, to each Member. No election shall be made by the
Company or any Member to be excluded from the application of the provisions of
subchapter K of the Code or from any similar provision of state and local tax
laws.
11.4 CONTROVERSIES WITH THE INTERNAL REVENUE SERVICE. In the
event of any controversy with the Internal Revenue Service or any other taxing
authority involving the Company or any individual Member or Members, the outcome
of which may adversely affect the Company, directly or indirectly, or the amount
of the allocation of income, gain, loss, deduction, or credit of the Company to
such Member, the Company may, at its option, incur expenses it deems necessary
or advisable in the interest of the Company in connection with any such
controversy, including, without limitation, reasonable attorneys' and
accountants' fees. ABT is hereby designated by the Members as the "TAX MATTERS
PARTNER" of the Company as defined in Section 6231(a)(7) of the Code and in such
capacity shall represent the Company in any disputes, controversies or
proceedings with the Internal Revenue Service. The Company will promptly send to
each Member a copy of all correspondence sent to or received from the Internal
Revenue Service by the Company.
XII. LIMITATIONS ON LIABILITIES; INDEMNIFICATION;
RIGHT TO CONDUCT OTHER BUSINESS
12.1 LIABILITY OF MEMBERS. The operating or other losses of
the Company shall be solely the liability of the Company, and no Member shall be
obligated personally for any such operating or other loss solely by reason of
being a Member. In no event shall the liability of a Member exceed, in the
aggregate, the amount of its Capital Contributions and no creditors shall have
the right to attach or garnish or compel the contribution by any Member of any
additional sums of capital.
29
12.2 INDEMNIFICATION. The Company shall, to the fullest extent
permitted by applicable law, indemnify and hold harmless, the board of managers
(and former managers), any Authorized Person and any agent, officer,
representative and/or employee thereof or Person who is deemed to control either
the board of managers or an Authorized Person (hereinafter collectively referred
to as the "INDEMNITEES") from and against any losses, claims, damages,
liabilities or actions, joint or several, to which such Indemnitees may be
subject by virtue of any act performed by such Indemnitee, or omitted to be
performed by any such Indemnitee, in connection with the business of the Company
or its formation, including, without limitation, the service by any such
Indemnitee as a director, manager, officer or other like position with respect
to any subsidiary of the Company, any NOC or any other entity at the request of
the Company, and shall reimburse each such Indemnitee for any legal or other
expenses reasonably incurred by such Person in connection with investigating,
defending or preparing to defend any such loss, claim, damage, liability or
action; provided, however, that the Company shall not be liable to any
Indemnitee to the extent that in the final non-appealable judgment of a court of
competent jurisdiction such loss, claim, damage, liability or action is found to
arise from such Indemnitee's gross negligence or willful misconduct. Expenses
incurred by an Indemnitee in defending a civil or criminal action, suit or
proceeding arising out of or in connection with this Agreement or the Company's
business or affairs shall be paid by the Company in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
the Indemnitee to repay such amount plus reasonable interest in the event that
it shall ultimately be determined that the Indemnitee was not entitled to be
indemnified by the Company in connection with such action. The foregoing rights
of indemnification shall not be exclusive of any other rights to which such
Indemnitee may be entitled. No amendment of this Agreement shall limit or
eliminate the right to indemnification provided hereunder with respect to acts
or omissions occurring prior to such amendment or repeal. The Company may carry
insurance protecting it and potential Indemnitees from liabilities to third
parties, to the extent practicable.
12.3 RIGHT TO CONDUCT OTHER BUSINESS. Except as provided in
SECTIONS 7.1, 7.2, 7.3, and 8.3 hereof, nothing contained in this Agreement
shall be deemed to restrict in any way the freedom of each Member, the board of
managers, and any manager thereof, and their Affiliates, including any director,
officer, or employee of such person, to conduct any other business or any other
activity whatsoever, including without limitation, the acquisition, holding and
disposing of real estate, securities or assets of any entity without having or
incurring any obligation to offer any interest therein to the Company or any
other Member.
XIII. POWER OF ATTORNEY
13.1 AUTHORITY TO EXECUTE DOCUMENTS. During the life of the
Company and (to the extent a manager remains) during any additional period
authorized in accordance with this Agreement to dissolve, liquidate and wind up
the affairs of the Company, each of the undersigned Members hereby irrevocably
designates and appoints Xxxxxx Xxxxxx and Xxxxx Xxxx, and each of them, and any
successors of such managers, and any duly appointed agent of such managers, with
full power of substitution, to be the Member's true and lawful attorney-in-fact
with the power from time to time in the name, place and stead of the Member to
do any
30
ministerial act necessary to qualify the Company to do business under the laws
of any jurisdiction in which it is necessary to file any instrument in writing
in connection with such qualification, and to make, execute, swear to and
acknowledge, amend, file, record, deliver and publish in conformance with the
provisions of this Agreement (i) the Certificate for the Company, (ii) a
counterpart of this Agreement or of any amendment hereto for the purpose of
filing or recording such counterpart in any jurisdiction in which the Company
may own property or transact business, (iii) all certificates and other
instruments necessary to qualify or continue the Company as a limited liability
company in Delaware or in any jurisdiction where the Company may own property or
be doing business, (iv) any fictitious or assumed name certificate required or
permitted to be filed by or on behalf of the Company, (v) any other instrument
that is now or may hereafter be required by law to be filed for or on behalf of
the Company, (vi) any other instruments or documents that the board of managers
deems necessary to conduct the operation of the Company; provided, that, such
instrument or document is not inconsistent with the terms of this Agreement in
effect at that time and does not result in a material liability to such Member,
(vii) any amendment to this Agreement adopted pursuant to SECTION 14.1 hereof
and (viii) a certificate or other instrument evidencing the dissolution or
termination of the Company when such shall be appropriate in Delaware and each
other jurisdiction in which the Company shall own property or do business.
13.2 SURVIVAL OF POWER. The existence of this power of
attorney shall not preclude execution of any such instrument by a Member
individually on any such matter. This limited power of attorney shall not be
revoked and shall survive the assignment or transfer by a Member of all or part
of its Interest in the Company and, being coupled with an interest, shall
survive the death, incapacity or dissolution of the Member to the extent that it
may legally contract for such survival. Any person dealing with the Company may
conclusively presume and rely upon the fact that any such instrument executed by
such agent and attorney-in-fact is authorized, regular and binding without
further inquiry.
XIV. AMENDMENT AND DISSOLUTION
14.1 AMENDMENT. No provision of this Agreement may be amended
without the prior written consent of the holders of at least seventy six percent
(76%) of all Voting Interests; provided, however, that no amendment of this
Agreement shall, without the consent of the affected Member, (i) increase the
liability of a Member beyond the liability of such Member expressly set forth in
this Agreement or otherwise modify or affect the limited liability of such
Member, or (ii) change the method or calculation of distributions or allocations
made under the provisions of ARTICLES IX AND X hereof to any Member (except as
otherwise provided in this Agreement); and, provided further, that no amendment
to SECTIONS 4.1(a) or (d), SECTION 4.2 or SECTION 14.1 of this Agreement shall
be effective without the prior written consent of ABT.
14.2 DISSOLUTION.
(a) Subject to SECTION 4.2, the Company shall be
dissolved and its business wound up and terminated on the earlier of:
31
(i) The date on which at least eighty percent
(80%) of the Interests of the Company as of January 1 of any year are
transferred (other than to Affiliates of Members), or all of the Assets
(excluding the ABT Contribution) have been disposed of and, to the extent
legally available, the net proceeds therefrom distributed to the Members;
provided, however, such a transfer of Interests or disposition of Assets will
not be deemed a dissolution of the Company or an event triggering dissolution or
winding up of the Company if such event is pursuant to a merger, sale,
reorganization, reformation or similar restructuring in which after such event
the Members prior to such transaction collectively own at least 50% of the
equity of the entity that owns or controls substantially all of the Assets after
such transaction;
(ii) The date on which the Company is dissolved
by operation of law or judicial decree;
(iii) The date on which all of the Members agree
to terminate the Company;
(iv) The occurrence of any other event causing
the dissolution of a limited liability company under the Act; or
(v) Two (2) years after the date hereof, unless
prior to that date, the Members agree to continue the existence of the Company.
(b) Upon dissolution of the Company, the board of
managers shall give written notice of such dissolution to the Members which
shall state that the Assets are to be liquidated in an orderly fashion with
appropriate reserves maintained for then existing and potential obligations and
contingent liabilities of the Company. Upon dissolution for any reason
whatsoever, the Company shall thereafter engage in no further business other
than that necessary to wind up the business and to distribute the Assets.
14.3 DISTRIBUTIONS UPON DISSOLUTION.
(a) Upon dissolution of the Company, (i) the ABT
Contribution shall be assigned back to ABT and (ii) the board of managers shall
act as liquidating trustee regarding the disposition of the Assets (excluding
the ABT Contribution, the "REMAINING ASSETS") for cash, to pay and discharge all
liabilities and obligations of the Company and to distribute all cash remaining
and any Remaining Assets which cannot be disposed of to the Members as described
below. The liquidating trustee shall be under no liability with respect to the
Remaining Assets held by the Company upon dissolution except to hold and
maintain the same in the Company until disposed of in accordance with the terms
of this Agreement and the Act. Unless agreed to by all Members, and to the
extent commercially reasonable, every reasonable effort shall be made to dispose
of the Remaining Assets so that the liquidating distributions to the Members
shall be made in cash. If any non-cash Remaining Assets must be distributed in
kind, the liquidating trustee shall ascertain the fair market value of such
Remaining Assets by appraisal or other reasonable means of such Remaining Assets
remaining unsold and each Member's Capital Account shall be charged or credited,
as the case
32
may be, as if such Remaining Assets had been sold at such fair market value and
the net gain or net loss realized thereby had been allocated to and among the
Members in accordance with SECTION 10.2 hereof. All of the Remaining Assets,
including, without limitation, all cash and property, if any, then on hand in
the Company, shall be applied and distributed, with reference to the fair market
value thereof, by the liquidating trustee. A reasonable time shall be allowed
for the orderly liquidation of the Remaining Assets and the discharge of
liabilities to creditors so as to minimize any losses attendant upon a
liquidation. The proceeds from the liquidation, after the distribution of the
ABT Contribution to ABT pursuant to the first sentence hereof, to the extent
sufficient therefor, shall be applied and distributed in the following order:
(i) To the creditors of the Company, whether by
payment or the making of an agreement for payment;
(ii) To setting up the reserves that the
liquidating trustee may deem necessary or reasonable for contingent or
unforeseen liabilities or obligations of the Company or of the liquidating
trustee arising out of or in connection with the Company or its liquidation; and
(iii) To the Members in proportion to the
Members' Ownership Percentages, after giving effect to all contributions,
distributions and allocations for all periods; provided that if one Member's
Capital Account is reduced to zero, then distributions will be made to the
remaining Member until both Members' Capital Accounts are reduced to zero, and
then distributions will again be made to the Members in accordance with
Ownership Percentages.
(b) All reasonable attempts shall be made to cause
any distributions to Members under this ARTICLE XIV upon liquidation to be made
by the end of the taxable year in which the liquidation of the Company occurs.
(c) The liquidating trustee shall comply with the
terms of this Agreement and any requirements of the Act or other applicable law
pertaining to the winding up of a limited liability company, at which time the
Company shall stand liquidated.
(d) The liquidating trustee shall be under no
liability with respect to the Assets held by the Company upon dissolution except
to hold and maintain the same in the Company until disposed of in accordance
with the terms of this Agreement and the Act. The Members shall look solely to
the Assets for the return of their respective Capital Contributions and, if the
Assets remaining after the payment or discharge of the debts and liabilities of
the Company are insufficient to return their Capital Contributions, they shall
have no recourse against the liquidating trustee or any Member for that purpose.
14.4 NO OBLIGATION TO RESTORE DEFICIT CAPITAL ACCOUNTS. No
Member with a deficit balance in its Capital Account shall have any obligation
to the Company or any other Member to restore said deficit balance. In addition,
except as expressly provided by agreement or relevant documentation, no venturer
or partner in any Member shall have any liability to the Company or any other
Member for any deficit balance in such venturer's or partner's capital
33
account in the Member in which it is a partner or venturer. Furthermore, a
deficit Capital Account balance of a Member (or a capital account of a partner
or venturer in a Member) shall not be deemed to be a liability of such Member
(or of such venturer or partner in such Member) or an Asset of the Company or
any Member.
XV. MISCELLANEOUS
15.1 INJUNCTIVE RELIEF. The parties acknowledge that it will
be impossible to measure in money the damages that would be suffered if the
parties fail to comply with certain of the obligations imposed on them by this
Agreement, including without limitation those obligations set forth in ARTICLES
IV, VII AND VIII and that in the event of any such failure, an aggrieved Person
will be irreparably damaged and will not have an adequate remedy at law. Any
such Person shall, therefore, in addition and not in lieu of any other remedy
available to an aggrieved Person, be entitled to injunctive relief and/or
specific performance to enforce such obligations, and if any action is brought
in equity to enforce any of such provisions of this Agreement, none of the
parties hereto shall raise the defense that there is an adequate remedy at law.
15.2 FURTHER ASSURANCES. Each party hereto shall do and
perform or cause to be done and performed all such further acts and things and
shall execute and deliver all such other agreements, certificates, instruments
and documents as any other party hereto reasonably may request in order to carry
out the intent and accomplish the purposes of this Agreement.
15.3 GOVERNING LAW; DISPUTE RESOLUTION. This Agreement shall
be construed and enforced in accordance with, and the rights of the parties
shall be governed by, the laws of the State of Delaware without regard to
principles of conflict of laws.
(a) If a dispute arises under this Agreement, it
should be referred to the president or chief executive officer of each Member
for resolution, and such persons shall use their best efforts to resolve the
matter for no less than thirty (30) days. Any matter such persons are unable to
resolve within such period must be submitted to the dispute resolution procedure
set forth in SECTION 15.3(b).
(b) Any dispute or claim arising out of or in
connection with this Agreement not resolved by SECTION 15.3(a) above, must be
finally settled by binding arbitration under the Rules of Conciliation and
Arbitration of the American Arbitration Association (the "RULES") by one (1)
arbitrator appointed in accordance with such Rules within a period of ninety
(90) days from the date such dispute is submitted to arbitration. Judgment on
the award rendered may be entered in any court having jurisdiction thereof. The
place of arbitration shall be New York, New York. Any monetary award must be
calculated and denominated in United States dollars and the arbitration must be
conducted in the English language. Notwithstanding the other provisions of this
SECTION 15.3, any party may apply to any court of competent jurisdiction for
injunctive or equitable relief.
34
15.4 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof,
and supersedes all prior and contemporaneous agreements and understandings of
the parties with respect thereto, including the Operating Agreement of the
Company dated September 30, 1997 and the Amended and Restated Operating
Agreement, dated as of January 6, 2000, as amended through but not including the
date hereof.
15.5 BINDING EFFECT. This Agreement shall be binding on and
inure to the benefit of the parties hereto and, subject to the terms and
provisions hereof, their respective, heirs, administrators, executors, legal
representatives, successors and permitted assigns.
15.6 INVALIDITY OF PROVISION. The invalidity or
unenforceability of any provision of this Agreement in any jurisdiction shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of this Agreement, including
that provision, in any other jurisdiction.
15.7 NOTICES. All notices and other communications given or
made hereunder shall be in writing and, unless otherwise provided herein, shall
be deemed to have been given when received by the party to whom such notice is
to be given (i) by an overnight delivery service or by mail at its address set
forth on the signature pages hereto, or such other address for the party as
shall be specified by notice given pursuant hereto, (ii) by electronic facsimile
(fax) to such party at the facsimile number set forth on the signature pages
hereto, or such other facsimile number for the party as shall be specified by
notice given pursuant hereto, or (iii) by e-mail at the e-mail address set forth
on the signature pages hereto, or such other e-mail address for the party as
shall be specified by notice given pursuant hereto.
15.8 HEADINGS. The descriptive headings of the several
sections of this Agreement are inserted for convenience only and do not
constitute part of this Agreement.
15.9 GENDER AND NUMBER. Whenever required by the context, as
used in this Agreement, the singular number shall include the plural, the neuter
shall include the masculine or the feminine gender and the masculine gender
shall include the neuter or the feminine gender.
15.10 COUNTERPARTS AND EXECUTION. This Agreement may be
executed in multiple counterparts, each of which shall be deemed an original
agreement and all of which shall constitute one agreement among each of the
parties hereto, notwithstanding that all of the parties are not signatories to
the original or the same counterpart, to be effective as of the day and year
first set forth above.
15.11 CONSENTS AND WAIVERS. A Member's waiver, consent,
failure to object, failure to seek redress, course of conduct or failure to
insist upon the strict performance of any covenant or condition of this
Agreement shall not be considered or construed as a waiver or consent for
subsequent matters or other obligations or rights of the Member. No waiver of
any term or provision of this Agreement shall be effective unless in writing
signed by the party to be charged.
35
15.12 RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies
provided by this Agreement are cumulative and the use of any one right or remedy
by any party shall not preclude or waive its right to use any or all other
remedies. Such rights and remedies are given in addition to any other rights the
parties may have by law, statute, ordinance, or otherwise.
15.13 WAIVER OF RIGHT TO PARTITION. Each of the parties hereto
irrevocably waives during the term of the Company any right that it may have to
maintain any action for partition with respect to an Asset.
36
IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first above written.
AUTOBYTEL.EUROPE LLC
By: /s/ Xxxxx Xxxx
------------------------------------
Name: Xxxxx Xxxx
Title: Manager
Notice Information:
Autobytel.Europe LLC
Attention: Xxxxx Xxxx, Esq.
Facsimile: 000-000-0000
Email: xxxxxx@xxxxxxxxx.xxx
Copy to:
Autobytel Inc.
00000 XxxXxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
X.X.X.
Attention: Xxxxx Xxxx, Esq.,
General Counsel
Facsimile: 000-000-0000
E-mail: xxxxxx@xxxxxxxxx.xxx
37
MEMBERS:
AUTOBYTEL INC.
By: /s/ Xxxxx Xxxx
---------------------------------
Name: Xxxxx Xxxx
Title: Executive Vice President
Notice Information:
Autobytel Inc.
00000 XxxXxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
X.X.X.
Attention: Xxxxx Xxxx, Esq.
Facsimile: 000-000-0000
E-mail: xxxxxx@xxxxxxxxx.xxx
PON HOLDINGS B.V.
By: /s/ Henk Rottinghuis
--------------------------------
Name: Henk Rottinghuis
Title: CEO
Notice Information:
Pon AutomobieHandel B.V.
Xxxxxxxxxxxx 0
0000 XX Xxxxxxx
Xxxxxxxxxxx
Attention: Henk Rottinghuis
Facsimile: 011 33 133 494 8714
E-mail:
SCHEDULE A
CAPITAL CONTRIBUTIONS AND
OWNERSHIP PERCENTAGES
==========================================================================================================
CAPITAL OWNERSHIP VOTING
MEMBERS CONTRIBUTION PERCENTAGE PERCENTAGE
----------------------------------------------------------------------------------------------------------
Autobytel Inc. ABT Contribution(1) plus $5 49.0% 49.0%
million
----------------------------------------------------------------------------------------------------------
Pon Holdings, B.V. $8.7 million 51.0% 51.0%
----------------------------------------------------------------------------------------------------------
Total $13.7 million and ABT 100% 100%
Contribution
==========================================================================================================
----------
(1) ABT has contributed to the Company the following assets (collectively, the
"ABT Contribution"): (a) an exclusive, royalty-free, perpetual license to use or
sublicense to NOC's the use of the "autobytel" brand name and ABT's proprietary
software pursuant to the terms of the Intercompany Software License Agreement
dated January 6, 2000 by and between ABT and the Company, as amended from time
to time (the "LICENSE AGREEMENT"); (b) assignment of the License and Services
Agreement, dated as of August 7, 1998 by and between ABT and Auto-By-Tel AB; and
(c) assignment of the License and Services Agreement, dated as of November 28,
1998 by and between ABT and Auto by Tel UK Limited.
