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EXHIBIT 2.1
AMENDED AND RESTATED OPERATING AGREEMENT
OF
XXXXXXXXXXXXX.XXX, LLC,
A DISTRICT OF COLUMBIA LIMITED LIABILITY COMPANY
ORGANIZED UNDER
THE DISTRICT OF COLUMBIA LIMITED LIABILITY COMPANY ACT
ARTICLE I
INITIAL DATE, PARTIES, AUTHORIZATION, AND PURPOSE
OF THIS AGREEMENT
SECTION 1.01 INITIAL DATE; INITIAL PARTIES
(a) This Agreement was first made on April 20, 2000 and was
initially agreed to by XxxXxxxxxxxxx.xxx, LLC ("the Company") and all persons
who on that date were Members of the Company, i.e., Xxxxxxx Xxxxxx, holder of
8,225 Membership Units, Xxxxxxx X. Xxxxxxx, holder of 300 Membership Units;
Xxxxx X. Xxxxxxx, holder of 300 Membership Units; Xxxxxx X. Xxxxxx, holder of
150 Membership Units; Xxxx X. Xxxxxx, holder of 150 Membership Units; and
WebWorld Studios, Inc., holder of 600 Membership Units (collectively, the
"Founding Members").
(b) In accordance with a Purchase Agreement to be executed
simultaneously with this Agreement, Xxxxxxx X. Xxxx has agreed to purchase 2,050
Membership Units and E2Enet, Inc. has agreed to purchase 8,225 Membership Units
(collectively, the "Investing Members"). The provisions of said Purchase
Agreement are incorporated herein by this reference.
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SECTION 1.02 SUBSEQUENT PARTIES; ASSENT AS A PRECONDITION TO BECOMING A MEMBER
OR TO OBTAINING RIGHTS TO BECOME A MEMBER
(a) No person may become a Member of the Company without first
assenting to and signing this Agreement. Any act by the Company to offer or
provide Member status, or reflect that status in the Company's Required Records,
automatically includes the condition that the person becoming a Member first
assent to and sign this Agreement.
(b) If:
(i) the Company offers, makes, or signs a Purchase
Agreement or Contribution Allowance Agreement, or any other agreement that
permits or requires a person to make a contribution and become a Member, and
(ii) the other party to the Purchase Agreement,
Contribution Allowance Agreement, or other agreement is not already a Member and
has not already assented to and signed this Agreement, then the Company's action
automatically includes the condition that the other party assent to and sign
this Agreement before that person actually makes a contribution or becomes a
Member.
(c) The Company is obligated not to accept a contribution from, or
accord Member status to, any person who has not first assented to and signed
this Agreement. The Company's acceptance of a contribution from a person who has
not signed this Agreement does not waive that person's obligation to sign this
Agreement.
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(d) No transfer of a Membership Unit or the governance rights of
any Membership Unit is effective unless the assignment complies with Section
12.01 and the assignee has assented to and signed this Agreement.
SECTION 1.03 AUTHORIZATION OF THIS AGREEMENT
This Agreement is made under the District of Colombia Limited Liability Company
Act (the "Act").
ARTICLE II
DEFINITIONS
SECTION 2.01 DEFINITIONS
For purposes of this Agreement, unless the language or context clearly indicates
that a different meaning is intended, the words, terms and phrases defined in
this section have the following meanings:
(a) "Act of the members" has the meaning stated in Section 10.01.
(b) "Agreement" means this Operating Agreement, as amended from
time to time under Article XVIII.
(c) "Capital Account" means the account of any Member or
Dissociated Member, maintained as provided in Section 7.02.
(d) "Capital Interest" means the right of any Member or
Dissociated Member to be paid the amount in that Member's or Dissociated
Member's Capital Account.
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(e) "Code" means the Internal Revenue Code of 1986, as amended,
and any successor to that Code.
(f) "Company" means XxxXxxxxxxxxx.Xxx, LLC, a District of Columbia
Limited Liability Company, organized under the District of Columbia Limited
Liability Company Act.
(g) "Purchase Agreement" means an agreement between a person and
the Company, under which:
(i) the person agrees to make a contribution in the
future to the Company;
(ii) the Company agrees that, at the time specified for
the contribution in the future, the Company will accept the contribution,
reflect the contribution in the Required Records, issue to the person a
specified number of Membership Units, and accord the person status as a Member
(if the person is not already a Member).
(h) "Contribution Allowance Agreement" means an agreement between
a person and the Company, under which:
(i) the person has the right, but not the obligation, to
make a contribution to the Company in the future; and
(ii) the Company agrees that, if the person makes the
specified contribution at the time specified in the future, the Company will
accept the contribution, reflect the contribution in the Required Records, issue
to the person a specified number of Membership Units, and accord the person
status as a Member (if the person is not already a Member).
(i) "Core business" means the Company's business involving website
design, consulting and management related to providing information about
personal milestones -- births, deaths, baptisms, confirmations, graduations,
engagements, weddings -- in an open, yet secure internet environment.
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(j) "Default rule" means a rule stated in the Act:
(i) which structures, defines, or regulates the finances,
governance, operations, or other aspects of a limited liability company
organized under the Act, and
(ii) which applies except to the extent it is negated or
modified through the provisions of a limited liability company's articles of
organization or operating agreement.
(k) "Disinterested" means, with respect to a Manager or Member and
with respect to a particular transaction or other undertaking, a Manager or
Member who (i) is not a party to that undertaking, (ii) has no material
financial interest in any organization that is a party to that undertaking, and
(iii) is not related by blood or marriage to any person who either is a party to
that undertaking or has a material financial interest in any organization that
is a party to that undertaking.
(l) "Dissociation of a Member" or "Dissociation" occurs when the
Company has notice or knowledge of an event that has terminated a Member's
continued Membership in the Company.
(m) "Financial Rights" means a Member's rights to share in profits
and losses, a Member's rights to receive distributions and a Member's Capital
Interest.
(n) "Fiscal Year" means the annual period upon which the Company
files its federal tax return.
(o) "Governance Rights" means all of a Member's rights as a Member
in the Company, other than financial rights and the right to assign financial
rights.
(p) "LLC Act" means the District of Columbia Limited Liability
Company Act.
(q) "Manager" means a person duly elected under Article VIII to
manage the business of the Company, as well as any person who serves in an
interim capacity under that Article.
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(R) "Member" means a person who owns at least one Membership Unit
and whose ownership of one or more Membership Units is reflected in the Required
Records.
(S) "Membership Unit" has the meaning stated in Section 5.01.
(T) "Person" includes a natural person, domestic or foreign
limited liability company, corporation, partnership, limited partnership, joint
venture, association, business trust, estate, trust, enterprise, and any other
legal or commercial entity.
(U) "Required Records" means those records specified in Section
11.01.
(V) "Successor LLC" means a limited liability company organized
under Section 15.02 to participate as the surviving organization in a merger
with the Company after the Company is dissolved.
(W) "Termination of the Company" means, as defined in DC Code
ss.29-1347, the end of the Company's legal existence.
(X) "Transfer" includes an assignment, conveyance, lease,
mortgage, security interest, deed, encumbrance, and gift.
ARTICLE III
BACKGROUND OF THIS AGREEMENT
SECTION 3.01 HISTORY AND NATURE OF THE COMPANY
(a) The Company is organized in the District of Columbia and is
engaged in the business of creating and maintaining an e-commerce social site on
the Web providing information about personal milestones -- births, deaths,
baptisms,
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confirmations, graduations, weddings, etc, -- in an open, yet secure environment
(the "Business"). As of the initial date of this Agreement, the Company's
principal place of business is 0000 00xx Xxxxxx, XX, Xxxxx Xxxxx, Xxxxxxxxxx, XX
00000.
(b) The business of the Company was commenced by Xxxxxxx Xxxxxx
and was performed initially through Trysail, Inc., a corporation solely owned by
Xxxxxxx Xxxxxx. Subsequently, Xx. Xxxxxx formed a Virginia corporation under the
name of "Milestones, Inc.," which was also solely owned by Xxxxxxx Xxxxxx, who
caused the transfer of all of the business and assets related to the Business
from Trysail, Inc., to Milestones, Inc. Additional investments were made into
Milestones, Inc., and its stock was held by the Founding Members identified in
Section 1.01(a) of this Agreement in the same portions as their Membership Units
in the Company as set forth in said Section 1.01(a).
(c) Subsequently, it was determined that the business should be in
the form of a limited liability company, and the Company was formed and all
business, property, rights, assets, obligations and liabilities related to the
Business has been transferred by merger from Milestones, Inc., to the Company.
SECTION 3.02 INTENT OF THIS AGREEMENT
(a) The parties to this Agreement have reached an understanding
concerning various aspects of (i) their business relationship with each other
and (ii) the organization and operation of the Company and its business. They
wish to use rights created by statute to record and bind themselves to that
understanding.
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(b) The parties intend this Agreement to control, to the extent
stated or fairly implied, the business and affairs of the Company, including the
Company's governance structure and the Company's dissolution, winding up, and
termination, as well as the relations among the Company's Members and persons
who have signed Purchase Agreements and Contribution Allowance Agreements.
SECTION 3.03 INVALIDITY AND UNREASONABLENESS OF EXPECTATIONS NOT INCLUDED IN
THIS AGREEMENT
(a) The Members fear the uncertainty and the potential for discord
that would exist if:
(i) the unstated expectation of one or more Members can
be used to gain advantage through litigation, or
(ii) expectations stated or expressed outside the confines
of this Agreement can become actionable even though not all Members agree with
those expectations or have assented to them and even though some Members have
expressed or may harbor conflicting expectations.
(b) The Members therefore agree that:
(i) it is unreasonable for any Member to have or rely on
an expectation that is not reflected in this Agreement;
(ii) any Member who has or develops an expectation
contrary to or in addition to the contents of this Agreement has a duty to
(A) immediately inform the Managers and all
other Members, and
(B) promptly seek to have this Agreement amended
to reflect the expectation;
(iii) the failure of a Member who has or develops an
expectation contrary to or in addition to the contents of this Agreement to
obtain an amendment of this Agreement as provided
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in Section 3.03(b)(ii) is evidence that the expectation was not reasonable and
estops that Member from asserting that expectation as a basis for any claim
against the Company or any other Member;
(iv) no Member has a duty to agree to an amendment
proposed under Section 3.03(b)(ii) if the Member in good faith
(A) holds an inconsistent expectation, or
(B) believes that the amendment is not in the
best interests of the Company or is contrary to the legitimate self-interests of
the Member.
SECTION 3.04 ADVICE OF COUNSEL
Each person signing this Agreement:
(a) understands that this Agreement contains legally binding
provisions,
(b) has had the opportunity to consult with a lawyer, and
(c) has either consulted a lawyer or consciously decided not to
consult a lawyer.
ARTICLE IV
RELATIONSHIP OF THIS AGREEMENT
TO THE DEFAULT RULES PROVIDED BY THE LLC ACT
AND TO THE ARTICLES OF ORGANIZATION
SECTION 4.01 RELATIONSHIP OF THIS AGREEMENT TO THE DEFAULT RULES PROVIDED BY THE
LLC ACT
Regardless of whether this Agreement specifically refers to particular default
rules:
(a) if any provision of this Agreement conflicts with a default
rule, the provision of this Agreement controls and the default rule is modified
or negated accordingly, and
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(b) if it is necessary to construe a default rule as modified or
negated in order to effectuate any provision of this Agreement, the default rule
is modified or negated accordingly.
SECTION 4.02 RELATIONSHIP BETWEEN THIS AGREEMENT AND THE ARTICLES OF
ORGANIZATION
If a provision of this Agreement differs from a provision of the Company's
articles of organization, then to the extent allowed by law this operating
agreement will govern.
ARTICLE V
CAPITAL STRUCTURE: MEMBERSHIP AND CONTRIBUTIONS
SECTION 5.01 MEMBERSHIP UNITS
(a) Ownership rights in the Company are reflected in Membership
Units, as recorded in the Required Records. Each Membership Unit:
(i) has equal governance rights with every other
Membership Unit and in matters subject to a vote of the Members has one vote;
and
(ii) subject to Sections 6.08(c) and 6.05(a), each
Membership Unit has equal rights with every other Membership Unit with respect
to sharing of profits and losses and with respect to distributions.
(b) Assignment of a Member's Membership Unit may be accomplished
only by complying with Section 12.01 of this Agreement.
(c) The Company will not issue any certificates of Membership
Units, but will at the written request of a Member provide certified statements
of Membership interests, stating the number of Membership Units owned, as well
as any effective assignments of rights under those Units, as of the date the
statement is provided.
SECTION 5.02 ISSUANCE OF MEMBERSHIP UNITS BY THE COMPANY
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(a) The Managers will determine when and for what consideration
the Company will issue Membership Units. For each Member, the Required Records
state the value and nature of the contribution received by the Company and the
number of Membership Units received in return by the Member.
(b) Except as otherwise provided in this Agreement (including the
Purchase Agreement referenced in Section 1.01(b) hereof), no member has the
right to make additional contributions or obtain additional units, and no member
has any preemptive rights.
SECTION 5.03 NO RIGHT OF COMPANY TO REQUIRE ADDITIONAL CONTRIBUTIONS
Except as provided in a Purchase Agreement, the Company has no right to require
any Member to make additional contributions. This section does not release any
Member from any obligation or promise of future performance that the Company
accepted as a contribution.
SECTION 5.04 COMPANY'S RIGHT TO ACCEPT ADDITIONAL CONTRIBUTIONS LIMITED
(a) The Company may not accept additional contributions, make
Purchase Agreements or Contribution Allowance agreements, or create or allocate
additional Membership Units except as approved by an act of the Members.
(b) To be effective, the approval required by this section must
specify the number of Units authorized. The approval may, but need not, specify
the amount, nature, and value of the consideration to be received, the identity
of the contributor or would-be contributor, a deadline by which the authorized
contribution must be received, or any other condition on the approval.
(c) Approval under this section is not effective to authorize the
creation of a separate class or series of Membership Units.
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SECTION 5.05 NO RIGHTS OF REDEMPTION OR RETURN OF CONTRIBUTION
Subject to any applicable provision hereof, no Member has a right to have its
Membership Units redeemed or its contribution returned prior to the termination
of the Company, even if the Member dissociates prior to termination of the
Company. Even at termination, the right to return of contribution or redemption
is subject to Article XV.
ARTICLE VI
CAPITAL STRUCTURE: PROFITS, LOSSES, DISTRIBUTIONS,
AND TRANSACTIONS BETWEEN MEMBERS AND THE COMPANY
SECTION 6.01 ALLOCATION OF PROFITS AND LOSSES
(a) Except as stated in Section 6.08(c), profits and losses are
allocated each fiscal year according to the number of Membership Units owned, as
reflected in the Required Records.
(b) For any Membership Unit not owned by the same person for the
entire fiscal year, the allocation will be prorated.
SECTION 6.02 NO RIGHT TO INTERIM DISTRIBUTIONS
(a) Subject to Section 6.02(b), no Member has a right to any
distribution prior to the termination of the Company.
(b) Within thirty (30) days of receiving the K-1 form and any
other information provided under Section 7.01, a Member may apply to the
Managers for a distribution equal to the amount of federal and state income tax
liability the Member will incur on account of the Member's interest in the
Company during the preceding Fiscal Year. A Member who applies under this
paragraph must provide the Managers with an explanation of the liability amount
and any other documentation or
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information the Managers reasonably and promptly require. Within three (3) weeks
of receiving the application and any required documentation and information, the
Managers will:
(i) cause the Company to make a distribution to the
applying Member in the requested amount,
(ii) cause the Company to make a distribution to the
applying Member in an amount less than the requested amount, or
(iii) determine that no distribution will be made.
In determining whether to act under clause (ii) or clause (iii), the Managers
will consider the financial state of the Company, the completeness, accuracy,
and validity of the explanation, documentation, and other information provided
by the requesting Member, the balance in the requesting Member's capital
account, and any obligations the Member may owe the Company (whether or not past
due). If the Managers act under clause (ii) or clause (iii), the Managers will
give the Member a brief written explanation of their action within seven (7)
days after taking the action and such action shall be final and binding.
SECTION 6.03 ALLOCATION OF INTERIM DISTRIBUTIONS
(a) Except as stated in Section 6.08(c), interim distributions, if
made, will be allocated according to the number of Membership Units owned, as
reflected in the Required Records.
(b) For any Membership Unit not owned by the same person for the
entire fiscal year, the allocation will be prorated.
SECTION 6.04 NO RIGHT TO DISTRIBUTION UPON DISSOCIATION
A Member's dissociation does not entitle the Member to any distribution,
regardless of whether the dissociation causes the Company to dissolve.
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SECTION 6.05 DISTRIBUTIONS UPON TERMINATION OF THE COMPANY
(a) At the Termination of the Company, subject to Article XV and
after the Company has satisfied or provided for the satisfaction of all of the
Company's debts and other obligations, the Company's assets will be distributed
in cash to the Members and any dissociated Members whose interests have not been
previously redeemed as provided in Sections 13.03 and 15.03 as follows:
(i) first, in discharge of their respective Capital
Interests; and
(ii) then, in proportion to their Membership Units.
(b) If the Company lacks sufficient assets to make the
distributions described in Section 6.05(a), the Company will make distributions
in proportion to the amount in the respective Capital Interests of the Members
and dissociated Members whose interests have not been previously redeemed.
SECTION 6.06 DISTRIBUTIONS IN KIND
(a) No Member has a right to any distribution in any form other
than money.
(b) The Company may not make a distribution in kind unless
(i) the Member receiving the in-kind distribution
consents,
(ii) all Members receive undivided interests in the same
property, or
(iii) all Members receive, in proportion to their rights to
distribution, interests in substantially equivalent property.
SECTION 6.07 DISTRIBUTIONS SUBJECT TO SET-OFF BY THE COMPANY
All distributions are subject to set-off by the Company for any
past-due obligation of a Member to make a contribution to the Company.
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SECTION 6.08 LOANS FROM AND OTHER TRANSACTIONS WITH MEMBERS AND MANAGERS
(a) With the approval of the Managers, the Company may borrow
money from and enter into other transactions with a Member who is not a Manager.
(b) The Company may enter into transactions and other undertakings
(including borrowing money) with a Manager, whether or not the Manager is a
Member, with the written approval of
(i) a majority of the Disinterested Managers (regardless
of whether the Disinterested Managers constitute a quorum under Section
8.05(a)(iii) for other purposes);
(ii) the Members owning a majority of Membership Units
owned by Disinterested Members (regardless of whether, for other purposes, the
Disinterested Members own enough Units to constitute a quorum under Section
10.08 or to accomplish action without a meeting under Section 10.09); or
(iii) all the Members, whether or not they would ordinarily
have voting power. To be valid, the approval must be based on all material
information concerning both the undertaking and the Interested Manager's
relationship to the undertaking. Valid approval under this paragraph constitutes
approval under the LLC Act. This paragraph does not apply to the compensation
arrangements for Managers, which are controlled by the Engagement Contracts
referred to in Section 8.01.
(c) On account of loans made, or transactions performed, by a
Member under this section, the Managers may increase, temporarily or
permanently, a Member's right to share in profits and distributions.
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(d) Borrowing from or engaging in other transactions with one or
more Members (whether or not the Member is a Manager) does not obligate the
Company to provide comparable opportunities to other Members.
ARTICLE VII
TAX MATTERS
SECTION 7.01 TAX CHARACTERIZATION AND RETURNS
(a) The Members acknowledge that the Company will be treated as a
"partnership" for federal and District of Columbia tax purposes. All provisions
of the Company's articles of organization and the Company's operating agreement
are to be construed so as to preserve that tax status.
(b) Within ninety (90) days after the end of each Fiscal Year, the
Managers will cause to be delivered to each person who was a Member at any time
during such Fiscal Year a Form K-1 and such other information, if any, with
respect to the Company as may be necessary for the preparation of each Member's
federal or state income tax (or information) returns, including a statement
showing each Member's share of income, gain or loss, and credits for the Fiscal
Year.
SECTION 7.02 CAPITAL ACCOUNTS
The Company will establish a Capital Account for each Member and will maintain
each Account according to the following rules:
(a) Maintenance. The Company will maintain the Capital Accounts in
accordance with Treasury Regulations ss. 1.704-1(b)(2)(iv).
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(b) Liquidation Payments. If the Company liquidates itself or a
Member's Membership interest, subject to Article XV, the Company will make
liquidating distributions in accordance with Section 6.05.
(c) Negative Capital Account and Qualified Income Offset. A Member
is not liable to fund any deficit in the Member's Capital Account at any time.
Notwithstanding any other provision in this Agreement, if a Member unexpectedly
receives an adjustment, allocation, or distribution described in Treasury
Regulations xx.xx. 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), and the unexpected adjustment, allocation, or
distribution results in a deficit balance in the Capital Account for the Member,
the Member will be allocated items of income and gain in an amount and manner
sufficient to eliminate the deficit balance or the increase in the deficit
balance as quickly as possible. It is intended that this subdivision will meet
the requirements of a "qualified income offset" as defined in Treasury
Regulations ss. 1.704-1(b)(2)(ii)(d), and this subdivision is to be interpreted
and applied consistent with that intention.
(d) Nonrecourse Deductions. If a Member's Capital Account has a
deficit balance at any time and the deficit or increase in deficit was caused by
the allocation of nonrecourse deductions as defined in Treasury Regulations ss.
1.704-2(b), then beginning in the first taxable year of the Company in which
there are nonrecourse deductions or in which the Company makes a distribution of
proceeds of a nonrecourse liability that are allocable to an increase in minimum
gain as defined in Treasury Regulations ss. 1.704-2(d) and thereafter throughout
the full term of the Company, the following rules shall apply:
(i) Nonrecourse deductions shall be allocated to the
Members in a manner that is reasonably consistent with the allocations that have
substantial economic effect as defined in
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Treasury Regulations ss. 1.704-1 or some other significant item attributable to
the property securing the nonrecourse liabilities, if applicable; and
(ii) If there is a net decrease in minimum gain for a
taxable year, each Member will be allocated items of Company income and gain for
that year equal to that Member's share of the net decrease in minimum gain as
defined in Treasury Regulations ss. 1.704-2(g)(2).
SECTION 7.03 ACCOUNTING DECISIONS
(a) The Managers will make all decisions as to accounting matters,
and
(b) The Managers may cause the Company to make whatever elections
the Company may make under the Code, including the election referred to in
Section 754 of the Code to adjust the basis of Company assets.
SECTION 7.04 "TAX MATTERS PARTNER"
The Managers will designate a Member to act on behalf of the Company as the "tax
matters partner" within the meaning of Section 6231(a)(7) of the Code.
ARTICLE VIII
GOVERNANCE: MANAGERS
SECTION 8.01 MANAGEMENT COMMITTEE
The Company will be managed by a management committee, consisting of seven (7)
Managers, who are Xxxxxxx Xxxxxx, Xxxxxxx X. Xxxxxxx and Xxxx Xxxxx (selected by
the Founding Members) and Xxxxxxx X. Xxxx, H. Xxx Xxxx, _______________ and
_____________ (selected by E2E). The
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Company shall pay all expenses of the Managers selected by E2E to attend
Management Committee meetings or organizational meetings of the Company.
SECTION 8.02 ELECTION OF MANAGEMENT COMMITTEE
(a) Each Manager will be elected annually by the Members at a
regularly scheduled meeting during the month of May. The Founding Members shall
elect three (3) Managers to serve on the management committee and E2E, subject
to its agreement with Xxxxxxx Xxxxxx, shall elect four (4) Managers to serve on
the management committee. Managers need not be Members. Following their election
Managers will serve until (i) removal, (ii) resignation, or (iii) election of a
successor, whichever occurs first.
(b) Members may not cumulate their votes.
SECTION 8.03 REMOVAL AND REPLACEMENT OF MANAGERS
(a) The Members may remove any Manager, without having to possess,
state, or prove cause, by an act of the Members owning seventy-five percent
(75%) of the Membership Units. The removal of a Manager without stating or
proving cause does not bar a later claim that the Manager engaged in misconduct
while a Manager.
(b) The Members will elect a replacement Manager at a properly
scheduled meeting of the Members, following the same procedures and requirements
applicable to a regular, annual election. The replacement Manager shall be
nominated and elected by the party who elected the Manager who is being
replaced. The same meeting that votes removal may also elect a replacement
Manager. Once elected, the replacement Manager will serve the unexpired term of
the removed Manager.
SECTION 8.04 RESIGNATION AND REPLACEMENT OF A MANAGER
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(a) A Manager may resign by providing written notice to the
Management Committee. The resignation takes effect when received at that
address, or at a later date stated in the notice of resignation.
(b) The Members will elect a replacement Manager at a properly
scheduled meeting of the Members, following the same procedures and requirements
applicable to a regular, annual election. The replacement Manager shall be
nominated and elected by the party who elected the Manager who has resigned. The
same meeting that votes removal may also elect a replacement Manager. Once
elected, the replacement Manager will serve the unexpired term of the resigned
Manager.
SECTION 8.05 AUTHORITY OF THE MANAGEMENT COMMITTEE
(a) Subject to Article IX and except as provided in Section
8.05(b):
(i) The Management Committee, acting as a group, has sole
authority to manage the Company and is authorized to make any contracts, enter
into any transactions, and make and obtain any commitments on behalf of the
Company to conduct or further the Company's business;
(ii) Each Manager has one vote in Management Committee
decisions;
(iii) Action by the Management Committee requires either
(A) a resolution approved by the affirmative
vote of at least a majority of the Managers present at a meeting of the
Managers, (1) scheduled by a prior act of the Managers or called upon at least
two (2) business days' written notice signed by at least two (2) Managers, (2)
with a quorum present of at least seventy-five per cent (75%) of the Managers,
or
(B) a written action, signed by at least that
number of Managers necessary to adopt a resolution at a properly called meeting
attended by all the Managers entitled to vote on the matter.
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(b) The Management Committee may delegate to a subcommittee of
Managers, an individual Manager, or an employee of the Company any of the
Management Committee's responsibilities and authority except borrowing money on
behalf of the Company, entering into contracts involving more than $10,000,
entering into leases of real property, agreeing to the issuance, registration or
acquisition of any Membership Units of the Company, the purchase of any security
of any other entity, the merger, association or affiliation of the Company with
any other entity, or any other action which affects the organization or
structure of the Company. This provision does not alter or waive any duty that a
Manager may have to the Company concerning the Manager's exercise of management
authority.
SECTION 8.06 DUTIES OF MANAGERS
(a) Each Manager must discharge his, her, or its duties in good
faith, with the care an ordinarily prudent person in a like position would
exercise under similar circumstances, and in a manner the Manager reasonably
believes to be in the best interests of the Company.
(b) A Manager may rely on information received from other persons
if that reliance is consistent with the Manager's duties under Section 8.06(a).
SECTION 8.07 NONLIABILITY OF MANAGERS FOR ACTS OR OMISSIONS IN THEIR OFFICIAL
CAPACITY
To the full extent permitted by DC Code ss.29-1014, all Managers are
released from liability for damages and other monetary relief on account of any
act, omission, or conduct in the Manager's Managerial capacity. No amendment or
repeal of this section affects any liability or alleged liability of any Manager
for any acts, omission, or conduct that occurred prior to the amendment or
repeal.
SECTION 8.08 NO AUTHORITY OF MEMBERS
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Except as authorized by the Managers, no Member has the authority to make any
contracts, enter into any transactions, or make any commitments on behalf of the
Company.
ARTICLE IX
LIMITATIONS ON MANAGERIAL POWERS
SECTION 9.01 OFFICERS OF THE COMPANY
(a) The Company will retain Xxxxxxx Xxxxxx as Chief Executive
Officer of the Company. The duties of the Chief Executive Officer are as
described in his Engagement Contract. The Company may not remove the Chief
Executive Officer except for cause as specified in his Engagement Contract.
(b) If for any reason the individual identified in Section 9.01(a)
ceases to serve, the Managers will promptly nominate a successor. The Managers
may not, however, engage the nominated individual without the prior approval of
Members owning fifty-one percent (51%) of the Membership Units.
SECTION 9.02 ACTIONS REQUIRING SUPERMAJORITY CONSENT
(a) The Managers have no authority or power to take the following
actions without the prior written approval of E2E and such other Members, which
together with E2E, own eighty percent (80%) of the Membership Units:
(i) the making of any Purchase Agreements or Contribution
Allowance Agreements;
(ii) the issuance of any additional Membership Units;
(iii) the amendment of the Company's articles of
organization, operating agreement or organizational documents of any successor
entity;
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(iv) the sale, assignment or other disposition in a single
transaction or in a series of related transactions, of all or any material
portion of the Company's assets;
(v) any change in the location of the Company's
managerial and operations offices (the Company's managerial and operational
offices shall be located for at least 18 months after the date hereof in office
space immediately adjacent to E2Enet, Inc.);
(vi) the dissolution, winding up or liquidation of the
Company;
(vii) the addition of any new Member to the Company;
(viii) the borrowing in a single transaction, or in a series
of related transactions, of more than $20,000 from one or more lenders;
(ix) the merger, consolidation or other combination of the
Company with any other legal entity;
(x) any dividend or distribution to Members;
(xi) the creation of any committee of the Management
Committee and the designation of the representatives to such committee;
(xii) any acquisition or disposition of assets (including
stock or other equity interests) in a transaction or a series of transactions
having an aggregate purchase price in excess of $50,000;
(xiii) make any distribution with respect to Member's
Membership Units in connection with the redemption or repurchase thereof;
(xiv) the increase in salaries, bonuses, perks or other
compensation for managers and officers; and
(xv) any public offering to the Company, any of its
subsidiaries or any successor entities thereto.
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SECTION 9.03 OTHER PROVISIONS LIMITING MANAGERIAL AUTHORITY
When some other provision of this Agreement states procedures for taking
particular actions or accomplishing specified results, that provision states the
sole method for taking that action or accomplishing that result.
ARTICLE X
ACTS OF MEMBERS AND MEMBER MEETINGS
SECTION 10.01 ACTS OF MEMBERS
Except to the extent that the LLC Act, the articles of organization, or this
operating agreement require otherwise, an act of the Members consists of either:
(a) a majority vote of the Membership Units present at a properly
called meeting of the Members, when a quorum is present, or
(b) written action without a meeting, as provided in Section
10.09.
SECTION 10.02 REQUIRED ANNUAL MEETING
The Members will meet at least annually during the month of May as required by
Section 8.02. The Managers will give notice of this annual meeting, complying
with Section 10.04.
SECTION 10.03 SPECIAL MEETINGS
(a) A special meeting of the Members may be called for any purpose
or purposes at any time by an act of the Managers under Section 8.05(a), or by
any two or more Managers, or by one or more Members owning at least ten percent
(10%) of the Membership Units of the Company entitled to vote.
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(b) For any special meeting not called by an act of the Managers,
those persons who are demanding the special meeting must give written notice to
the Chief Executive Officer of the Company specifying the purposes of the
meeting. Within thirty (30) days after said Officer receives a written demand
under this paragraph, the Managers must call a special meeting of the Members.
If the Managers fail to call the special meeting as required by this paragraph,
the person or persons making the demand may, at the expense of the Company, call
the meeting by giving the notice described in Section 10.04.
SECTION 10.04 NOTICE OF MEETINGS
Written notice of each meeting of the Members, stating the date, time, and place
and, in the case of a special meeting, the purpose or purposes, must be given to
every Member at least ten (10) days and not more than sixty (60) days prior to
the meeting. The business transacted at a special meeting of Members is limited
to the purposes stated in the notice of the meeting.
SECTION 10.05 LOCATION AND CONDUCT OF THE MEETINGS; ADJOURNMENTS
(a) Each meeting of the Members will be held at the Company's
principal place of business or at some other suitable location, as designated by
the Managers.
(b) The Managers will select a Manager to chair each meeting of
the Members.
(c) Any meeting of the Members may be adjourned from time to time
to another date and time and, subject to Section 10.05(a), to another place. If
at the time of adjournment the person chairing the meeting announces the date,
time, and place at which the meeting will be reconvened, it is not necessary to
give any further notice of the reconvening.
SECTION 10.06 WAIVER OF NOTICE
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(a) A Member may waive notice of the date, time, place, and
purpose or purposes of a meeting of Members. A waiver may be made before, at, or
after the meeting, in writing, orally, or by attendance.
(b) Attendance by a Member at a meeting is a waiver of notice of
that meeting, unless the Member objects at the beginning of the meeting to the
transaction of business because the meeting is not properly called or convened,
or objects before a vote on an item of business because the item may not
properly be considered at that meeting and does not participate in the
consideration of the item at that meeting.
SECTION 10.07 PROXIES
(a) A Member may cast or authorize the casting of a vote by filing
a written appointment of a revocable proxy with the Chief Executive Officer of
the Company at or before the meeting at which the appointment is to be
effective. The Member may sign or authorize the written appointment by telegram,
cablegram, or other means of electronic transmission stating, or submitted with
information sufficient to determine, that the Member authorized the
transmission. Any copy, facsimile, telecommunication, or other reproduction of
the original of either the writing or the transmission may be used in lieu of
the original, if it is a complete and legible reproduction of the entire
original.
(b) A member may not grant or appoint an irrevocable proxy.
SECTION 10.08 QUORUM
For any meeting of the Members, a quorum consists of a majority of the
Membership Units. If a quorum is present when a properly called meeting is
convened, the Members present may continue
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to transact business until adjournment, even though the departure of Members
originally present leaves less than the proportion otherwise required for a
quorum.
SECTION 10.09 ACTION WITHOUT A MEETING
Any action required or permitted to be taken at a meeting of the Members may be
taken without a meeting by written action signed by the Members who own the
number of Membership Units equal to the number of Units that would be required
to take the same action at a meeting of the Members at which all Members were
present. The written action is effective when signed by Members owning the
required number of Units, unless a different effective time is provided in the
written action. When written action is taken by less than all Members, the
Company will immediately notify all Members of the action's text and effective
date. Failure to provide the notice does not invalidate the written action.
ARTICLE XI
REQUIRED RECORDS
SECTION 11.01 CONTENTS AND LOCATION OF REQUIRED RECORDS
The Company will maintain at its principal place of business, or at some other
location chosen by the Managers, the following records: Insurance records,
Members' records, Purchase Agreements, Contribution Allowance Agreements,
Assignments, Indemnification Agreements, Engagement Agreements, Financial
Records, Leases, material contracts, and all other records material to the
operation of the Company's business.
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SECTION 11.02 ACCESS TO REQUIRED RECORDS
(a) After giving reasonable advance notice to the Company, any
Member may inspect and review the Required Records and may, at the Member's
expense, have the Company make copies of any portion or all of the Records.
(b) Unless the Company agrees otherwise, all Member access to the
Required Records must take place during the Company's regular business hours.
The Company may impose additional reasonable conditions and restrictions on
Members' access to the Required Records, including specifying the amount of
advance notice a Member must give and the charges imposed for copying.
ARTICLE XII
TRANSFER RESTRICTIONS
SECTION 12.01 TRANSFER OF MEMBERSHIP INTERESTS
Before assigning a Membership Unit to anyone, a Founding Member (other than
Xxxxxxx Xxxxxx) must first offer his/its respective Membership Unit(s) to
Xxxxxxx Xxxxxx, second to E2Enet, Inc., and third to the Company and Xxxxxxx
Xxxxxx must first offer his Membership Units to E2Enet, Inc., and second to the
Company.
ARTICLE XIII
MEMBER DISSOCIATION: EFFECT ON DISSOCIATED MEMBER
SECTION 13.01 IF DISSOLUTION RESULTS
If the dissociation of a Member results in the dissolution of the Company, the
Dissociated Member will have any rights of a Member who has not dissociated,
subject to Section 13.03.
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SECTION 13.02 IF DISSOLUTION IS AVOIDED
If the dissociation does not result from an expulsion under Section 13.03 and
does not result in the dissolution of the Company:
(a) The Dissociated Member loses, without compensation, all
Governance Rights but will retain the Financial Rights owned before the
dissociation;
(b) Subject to Section 13.04, the Dissociated Member will be
considered to have, as if no dissociation had occurred,
(i) the same right to share in profits and losses under
Section 6.01,
(ii) the same right to distributions under Sections 6.03
and 6.05,
(iii) the same Capital Interest; and
(c) Neither the Company nor the remaining Members are obligated to
purchase the interest of or to make any payment to the Dissociated Member.
SECTION 13.03 DAMAGES AND SET-OFFS
(a) No Member has the right to dissociate before the end of the
duration of the Company as stated in the articles of organization. If a Member
dissociates before that time and the dissociation result from volitional conduct
of the Member that could reasonably be characterized as resignation, retirement
or withdrawal, then the Dissociated Member is liable to the Company for damages
resulting from the wrongful dissociation.
(b) The Company may set off any amounts or obligations owed by a
Dissociated Member to the Company against any amounts due the dissociated
Member, regardless of the cause of the Member's dissociation and regardless of
whether the Member's Dissociation results in dissolution of the Company.
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ARTICLE XIV
MEMBER DISSOCIATION: EFFECT ON THE COMPANY
SECTION 14.01 DISSOLUTION AVOIDANCE
A Member's dissociation will not cause the Company to dissolve if
(a) more than one Member remains, or, if only one Member remains,
within forty-five days after the dissociation the Company issues at least one
Membership Unit to a new Member, and
(b) within sixty days after the dissociation Majority-In-Interest
Consent is obtained to avoid dissolution and to continue the existence and
business of the Company.
SECTION 14.02 AGREEMENT TO GIVE DISSOLUTION AVOIDANCE CONSENT
(a) Subject to Section 14.02(b), within thirty days after the
Dissociation of a Member each remaining Member will consent to avoid dissolution
and continue the existence and business of the Company. Each Member will give
the consent in a form satisfactory to the Managers.
(b) The consent required by this section may be given through the
holder of a revocable proxy authorized in Section 10.07. By this Agreement, each
Member appoints the Chief Executive Officer as the holder of the Member's proxy
for this purpose.
ARTICLE XV
BUSINESS CONTINUATION IN THE EVENT OF DISSOLUTION
SECTION 15.01 TRIGGERING EVENTS
(a) Subject only to Section 15.01(b), if the Company dissolves for
any reason at any time, the affairs of the Company will be wound up and its
legal existence terminated by merging the Company into a Successor LLC, as
provided in Section 15.02.
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(b) Section 15.02 will not apply and the Company will be
liquidated under DC Code ss.ss.00-0000-00 if
(i) within forty-five days after the dissolution Members
owning more than fifty percent (50%) of all Membership Units notify the Company
in writing that they object to proceeding under Section 15.02,
(ii) only one Member remains, or
(iii) more than twenty-five years have passed since the
initial date of this Agreement,
SECTION 15.02 BUSINESS CONTINUITY
(a) Subject only to Section 15.01(b), as soon as dissolution
occurs the Managers will:
(i) organize the Successor LLC,
(ii) develop a plan of merger that complies with Section
15.02(c) for the Company and the Successor LLC,
(iii) approve the plan of merger on behalf of the Company
and submit the plan to the Company's Members for approval at a properly called
meeting of the Members,
(iv) cause the Managers of the Successor LLC to approve
the plan of merger and submit the plan to the Members of the Successor LLC for
approval, and
(v) cause the Members of the Successor LLC to approve the
plan of merger.
(b) When the plan of merger is presented to the Members for
approval, the Members will, subject to Section 15.03,
(i) vote to approve the plan, and
(ii) sign any documents that the plan requires them to
sign or whose execution is necessary to proper implementation of the plan.
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(c) The plan of merger must provide that
(i) the Successor LLC will be the surviving organization
in the merger,
(ii) all the assets and liabilities of the Company will be
transferred to the Successor LLC and the Successor LLC will continue the
business of the Company under the same name,
(iii) all Membership Units of the Members, including all
Financial Rights (whether or not assigned) will be converted into Membership
Units in the Successor LLC having substantially identical terms,
(iv) the Successor LLC will have articles of organization
and an operating agreement that are substantially equivalent to the articles of
organization and operating agreement in effect for the Company immediately prior
to the merger, and
(v) the rights of any dissociated Members as described in
Article XIII will apply against the Successor LLC.
SECTION 15.03 DISSENTERS' RIGHTS
(a) Any person who is a Member at the time of dissolution can
dissent from the implementation of the business continuation agreement stated in
this section by giving written notice to the Company within five (5) days after
the Managers present the plan for a vote and by voting against the proposed
merger.
(b) A Member who properly dissents under Section 15.03(a) will be
cashed out of the dissolved Company as if the Company had expelled the Member
under Section 13.03, except that if the Company properly chooses to make
installment payments, the obligation to make those payments will transfer to the
Successor LLC as part of the merger contemplated by this article.
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ARTICLE XVI
INDEMNIFICATION
SECTION 16.01 DEFINITIONS
For purposes of this article, the terms defined in this section have the
meanings given to them.
(a) "Company" includes any domestic or foreign company that was
the predecessor of this Company in a merger or other transaction in which the
predecessor's existence ceased upon consummation of the transaction.
(b) "Official capacity" means (i) with respect to a Manager, the
position of Manager in the Company, (ii) with respect to a person other than a
Manager, the elective or appointive office or position held by an officer,
member of a committee of the Management Committee, if any, or the efforts
undertaken by a Member of the Company who acts on behalf of and at the request
of the Company, or the employment or agency relationship undertaken by an
employee or agent of the Company, and (iii) with respect to a Manager, member
officer, employee, or agent of the Company who, while a Manager, officer,
employee, or agent of the Company, is or was serving at the request of the
Company or whose duties in that position involve or involved service as a
Manager, officer, partner, trustee, or agent of another organization or employee
benefit plan, the position of that person as a Manager, officer, partner,
trustee, employee, or agent, as the case may be, of the other organization or
employee benefit plan.
(c) "Proceeding" means a threatened, pending, or completed civil,
criminal, administrative, arbitration, or investigative proceeding, including a
proceeding by or in the right of the Company.
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(d) "Special legal counsel" means counsel who has not represented
the Company or a related company, or a Manager, officer, member of a committee
of the Management Committee, if any, employee, or agent whose indemnification is
in issue.
SECTION 16.02 MANDATORY INDEMNIFICATION; STANDARD
(a) The Company will indemnify a person made or threatened to be
made a party to a proceeding by reason of the former or present official
capacity of the person against judgments, penalties, fines, including, without
limitation, excise taxes assessed against the person with respect to an employee
benefit plan, settlements, and reasonable expenses, including attorney fees and
disbursements, incurred by the person in connection with the proceeding, if,
with respect to the acts or omissions of the person complained of in the
proceeding, the person
(i) has not been indemnified by another organization or
employee benefit plan for the same judgments, penalties, fines, including,
without limitation, excise taxes assessed against the person with respect to an
employee benefit plan, settlements, and reasonable expenses, including attorney
fees and disbursements, incurred by the person in connection with the proceeding
with respect to the same acts or omissions;
(ii) acted in good faith;
(iii) received no improper personal benefit;
(iv) in the case of a criminal proceeding, had no
reasonable cause to believe the conduct was unlawful; and
(v) in the case of acts or omissions occurring in the
official capacity described in Section 16.01(b)(i) or Section 16.01(b)(ii),
reasonably believed that the conduct was in the best interests of the Company,
or in the case of acts or omissions occurring in the official capacity
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described in Section 16.01(c)(iii), reasonably believed that the conduct was not
opposed to the best interests of the Company. If the person's acts or omissions
complained of in the proceeding relate to conduct as a Manager, officer,
trustee, employee, or agent of an employee benefit plan, the conduct is not
considered to be opposed to the best interests of the Company if the person
reasonably believed that the conduct was in the best interests of the
participants or beneficiaries of the employee benefit plan.
(b) The termination of a proceeding by judgment, order,
settlement, or conviction or upon a plea of nolo contendere or its equivalent
does not, of itself, establish that the person did not meet the criteria set
forth in this Section 16.02.
SECTION 16.03 ADVANCES
If a person is made or threatened to be made a party to a proceeding, the person
is entitled, upon written request to the Company, to payment or reimbursement by
the Company of reasonable expenses, including attorney fees and disbursements,
incurred by the person in advance of the final disposition of the proceeding,
(a) upon receipt by the Company of a written affirmation by the
person of a good faith belief that the criteria for indemnification set forth in
Section 16.02 have been satisfied and a written undertaking by the person to
repay all amounts so paid or reimbursed by the Company, if it is ultimately
determined that the criteria for indemnification have not been satisfied, and
(b) after a determination that the facts then known to those
making the determination would not preclude indemnification under this article.
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The written undertaking required by paragraph (a) above is an unlimited general
obligation of the person making it, but need not be secured and will be accepted
without reference to financial ability to make the repayment.
SECTION 16.04 REIMBURSEMENT TO WITNESS
Subject to the qualification under the standards described in Section 16.02, the
Company will reimburse expenses, including attorney fees and disbursements,
incurred by a person in connection with an appearance as a witness in a
proceeding at a time when the person has not been made or threatened to be made
a party to a proceeding.
SECTION 16.05 DETERMINATION OF ELIGIBILITY
(a) All determinations as to whether indemnification of a person
is required because the criteria stated in Section 16.02 have been satisfied and
as to whether a person is entitled to payment or reimbursement of expenses in
advance of the final disposition of a proceeding as provided in Section 16.03
will be made:
(i) by the Management Committee by a majority of a quorum
(Managers who are at the time parties to the proceeding shall not be counted for
determining either a majority or the presence of a quorum);
(ii) if a quorum under clause (i) cannot be obtained, by a
majority of a committee of the Management Committee, if any, consisting solely
of two or more Managers not at the time parties to the proceeding, duly
designated to act in the matter by a majority of the full Management Committee,
if any, including Managers who are parties;
(iii) if a determination is not made under clause (i) or
clause (ii), by special legal counsel, selected either by a majority of the
Management Committee or a committee by vote
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pursuant to clause (i) or clause (ii) or, if the requisite quorum of the full
Management Committee cannot be obtained and the committee cannot be established,
by a majority of the full Management Committee, if any, including Managers who
are parties;
(iv) if a determination is not made under clauses (i)
through (iii), by the Members, excluding the votes held by parties to the
proceedings; or
(v) if an adverse determination is made under clauses (i)
through (iv) or under paragraph (b), or if no determination is made under
clauses (i) through (iv) or under paragraph (b) within sixty (60) days after the
termination of a proceeding or after a request for an advance of expenses, as
the case may be, by the Superior Court of the District of Columbia, which may be
the same court in which the proceeding involving the person's liability is
taking or has taken place, upon application of the person and any notice the
court requires.
(b) With respect to a person who is not, and was not at the time
of the acts or omissions complained of in the proceedings, a manager, officer,
or person possessing, directly or indirectly, the power to direct or cause the
direction of the management or policies of the Company, the determination
whether indemnification of this person is required because the criteria set
forth in Section 16.02 have been satisfied and whether this person is entitled
to payment or reimbursement of expenses in advance of the final disposition of a
proceeding as provided in Section 16.03 may be made by an annually appointed
committee of the Management Committee, if any, having at least one member who is
a Manager. The committee shall report at least annually to the Management
Committee.
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SECTION 16.06 INSURANCE
The Company may purchase and maintain insurance on behalf of a person in that
person's official capacity against any liability asserted against and incurred
by the person in or arising from that capacity, whether or not the Company would
have been required to indemnify the person against the liability under the
provisions of this article.
SECTION 16.07 DISCLOSURE
The amount of any indemnification or advance paid pursuant to this article and
to whom and on whose behalf it was paid will be included in the Required
Records.
SECTION 16.08 DISCRETIONARY INDEMNIFICATION OF OTHERS
Nothing in this Article XVI limits the ability of the Management Committee to
cause the Company to indemnify any person or entity not described in this
Article XVI pursuant to, and to the extent described in, an agreement authorized
by an act of the Managers.
ARTICLE XVII
REMEDIES FOR BREACH
SECTION 17.01 SPECIFIC ENFORCEMENT
Except for the provisions of Section 14.02, all breaches of this Agreement are
subject to specific enforcement, without prejudice to the right to seek damages
or other remedies.
SECTION 17.02 CONCURRENT OR CONSECUTIVE CAUSATION OF DAMAGES
(a) If two or more Members breach this Agreement and those
breaches combine in any way, concurrently or consecutively, to produce harm to
the Company, then those Members are jointly and severally liable to the Company
for the entirety of the harm. This paragraph precludes a Member who has breached
this Agreement from asserting that another Member's prior, contemporaneous,
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or subsequent breach constitutes a superseding, intervening, or independent
cause or in any way releases the breaching Member from liability.
(b) Section 17.02(a) does not preclude breaching Members from
seeking contribution or indemnity from each other, or otherwise seeking to
allocate among themselves the responsibility and liability for the harm caused
to the Company.
SECTION 17.03 ATTORNEY FEES AND OTHER LITIGATION EXPENSES
If the Company resorts to litigation to remedy a breach of this Agreement by a
Member or former Member and the Company prevails in the litigation, in addition
to any other remedies available to the Company under this Agreement or by law
the Company may collect its reasonable attorney fees and other costs and
expenses of litigation.
ARTICLE XVIII
AMENDMENTS
SECTION 18.01 REQUIREMENTS FOR AMENDMENTS
To be effective, any amendment to this Agreement must be approved by an act of
the Members reflecting approval by Members owning eighty percent (80%) of the
Membership Units.
ARTICLE XIX
CERTAIN COVENANTS AND REPRESENTATIONS OF THE MEMBERS
SECTION 19.1 PROHIBITION ON VOTING TRUSTS
No Member shall enter into any voting trust or other agreement pursuant to which
such Member or such Member's representative to the Management Committee agrees
to vote in concert with any other Member or its representative to the Management
Committee, respectively, or otherwise restrict any of its rights as a Member.
The immediately preceding sentence shall not be deemed to restrict
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the ability of Members to confer with one another with regard to any matter with
respect to the Company or its business or to disclose views or positions with
respect to Company matters.
SECTION 19.2 CONFIDENTIALITY.
Each Member agrees that it will not, directly or indirectly, without the prior
approval of the Management Committee, use or disclose to any person, firm or
corporation, any information, trade secrets, confidential customer information,
technical data or know-how relating to the products, processes, methods,
equipment or business practices of the Company, except to the extent any of the
foregoing (i) is or becomes available to the public other than as a result of
disclosure by such Member or any of its affiliates or the directors, officers,
employees, agents, advisors and controlling persons of it or any of its
affiliates, except as any Member may disclose to its lenders, rating agencies
and business, legal and financial advisors or (ii) is required by applicable law
or regulation or by legal process. In the event any Member is required by
applicable law or regulation or by legal process to disclose any of the
foregoing, it will provide the Company and other Members with prompt notice
thereof to enable them to seek an appropriate protective order.
SECTION 19.3 REPRESENTATIONS AND WARRANTIES.
As of the date hereof, each of the Members hereby makes each of the following
representations and warranties applicable to such Member, and such warranties
and representations shall survive the execution of this Agreement:
(a) Such Member is either an individual or a corporation or other
entity duly organized, validly existing, and in good standing under the laws of
the jurisdiction of its incorporation or formation. Each such corporation or
entity has the corporate or other power and authority to own its property and
carry on its business as owned and carried on at the date hereof and as
contemplated
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hereby. Each such Member is duly licensed or qualified to do business and in
good standing in each of the jurisdictions in which the failure to be so
licensed or qualified would have a material adverse effect on its financial
condition or its ability to perform its obligations hereunder. Each such Member
has the corporate or other power and authority to execute and deliver this
Agreement and to perform its obligations hereunder and the execution, delivery,
and performance of this Agreement and to perform its obligations hereunder and
the execution, delivery, and performance of this Agreement has been duly
authorized by all necessary corporate or other action. This Agreement
constitutes the legal, valid, and binding obligation of such Member.
(b) Neither the execution, delivery, and performance of this
Agreement nor the consummation by such Member of the transactions contemplated
hereby (i) will conflict with, violate, or result in a breach of in any material
respect any law, regulation, order, writ, injunction, decree, determination, or
award of any court, any governmental department, board, agency, or
instrumentality, domestic or foreign, or any arbitrator, applicable to such
Member, (ii) will conflict with or violate any of the terms, conditions, or
provisions of the articles of incorporation, bylaws, partnership agreement or
similar organizational documents of such Member, or (iii) will conflict with,
violate, result in a breach of, constitute a default (or an event which, with
notice or lapse of time or both would become a default) under, accelerate or
permit the acceleration of the performance required by, give to others any
material interests or rights, or require any consent, authorization, or approval
under any indenture, mortgage, lease agreement, or instrument to which such
Member, or any of its wholly owned affiliates is a party or by which such
Member, or any of its wholly owned affiliates is or may be bound.
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(c) Any material registration, declaration, or filing with, or
consent, approval, license, permit, or other authorization or order by, any
governmental or regulatory authority, domestic or foreign, that is required in
connection with the valid execution, delivery, acceptance, and performance by
such Member under this Agreement or the consummation by such Member of any
transaction contemplated hereby has been completed, made, or obtained on or
before the effective date of this Agreement.
(d) There are no actions, suits, proceedings, or investigations
pending or, to the knowledge of such Member, threatened against or affecting
such Member in any court or before or by any governmental department, board,
agency, or instrumentality, domestic or foreign, or any arbitrator which could,
if adversely determined (or, in the case of an investigation could lead to any
action, suit, or proceeding, which if adversely determined could) reasonably be
expected to materially impair such Member's ability to perform its obligations
under this Agreement or to have a material adverse effect on the consolidated
financial condition of such Member, and such Member has not received any
currently effective notice of any default, and such Member is not in default,
under any applicable order, writ, injunction, decree, permit, determination, or
award of any court, any governmental department, board, agency, or
instrumentality, domestic or foreign or any arbitrator which could reasonably be
expected to materially impair such Member's ability to perform its obligations
under this Agreement or to have a material adverse effect on the consolidated
financial condition of such Member.
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ARTICLE XX
MISCELLANEOUS
SECTION 20.01 GOVERNING LAW
This Agreement, and any question, dispute, or other matter related to or arising
from this Agreement, will be governed by the laws of the District of Columbia.
SECTION 20.02 BINDING EFFECT
This Agreement binds all Members and their respective distributees, successors,
and assigns and any other person claiming a right or benefit under or covered by
this Agreement.
SECTION 20.03 SEVERABILITY
If any provision of this Agreement is held to be illegal, invalid, or
unenforceable,
(a) that provision will be fully severable and this Agreement will
be construed and enforced as if the illegal, invalid, or unenforceable provision
had never been part of this Agreement;
(b) the remaining provisions of this Agreement will remain in full
force and will not be affected by the illegal, invalid, or unenforceable
provision or by its severance from this Agreement; and
(c) in the place of the illegal, invalid, or unenforceable
provision, there will be added automatically to this Agreement a legal, valid,
and enforceable provision that is as similar to the illegal, invalid, or
unenforceable provision as possible.
SECTION 20.04 MULTIPLE COUNTERPARTS
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This Agreement may be executed in several counterparts, each of which will be
considered an original and all of which will constitute one and the same
document. Proving the execution and contents of this document against a party
may be done by producing any copy of this Agreement signed by that party.
SECTION 20.05 ADDITIONAL DOCUMENTS AND ACTS
Each Member agrees to execute and deliver whatever additional documents and to
perform such additional acts as may be necessary or appropriate to effectuate
and perform all of the terms, provisions, and conditions of this Agreement and
the transactions contemplated by this Agreement.
SECTION 20.06 NOTICES
(a) Any notice to be given or made to the Company, its Managers,
its Chief Executive Officer, or any Member must be in writing and will be
considered to have been given when delivered to the address specified in the
Company's Required Records.
(b) A person who wants to change its address as specified in the
Required Records may do so by giving written notice of the change to the Company
and to each Member. The change takes effect five days after the notice is given.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
XXXXXXXXXXXXX.XXX, LLC ("the Company")
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------
Xxxxxxx Xxxxxx, President and CEO
0000 00xx Xxxxxx, Xxxxx Xxxxx
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00
Xxxxxxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 (Fax)
/s/ Xxxxxxx Xxxxxx
------------------------------------------
Xxxxxxx Xxxxxx, Individually
see above for address and telephone numbers.
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxx, Individually
Xxxxxx & Xxxxxxx, PLLC
0000 00xx Xxxxxx, XX, Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 (Fax)
/s/ Xxxxx X. Xxxxxxx
------------------------------------------
Xxxxx X. Xxxxxxx, Individually
00000 Xxxxxxxx'x Xxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxx 00000
0(000) 000-0000
0(000) 000-0000 (Fax)
/s/ Xxxxxx X. Xxxxxx
------------------------------------------
Xxxxxx X. Xxxxxx, Individually
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, 00000
(000) 000-0000
(000) 000-0000 (Fax)
/s/ Xxxx X. Xxxxxx
------------------------------------------
Xxxx X. Xxxxxx, Individually
00000 Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
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(000) 000-0000
(000) 00000000 (Fax)
WebWorld Studios, Inc.
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Xxxx Xxxxxxx, President
000 X. Xxxxxxxxx Xx.
Xxxxxxxxx, XX 00000
000-000-0000
000-000-0000 (fax)
E2Enet, Inc.
By: /s/ Xxxx Xxxxx
-------------------------------------
Xxxx Xxxxx, Xxxxxxxxx
X0X Net, Inc.
c/o U.S. Viewing Corporation
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 (Fax)
/s/ Xxxxxxx X. Xxxx
------------------------------------------
Xxxxxxx X. Xxxx, Individually
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c/o Xxxx-Xxxxxxxxx Management
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx Xxxxxx, Xxxxxxxx 00000
(000) 000-0000
(000) 000-0000 (Fax)
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