EXHIBIT 10.1
LIMITED LIABILITY COMPANY AGREEMENT
OF
XXXXXXXXXXXXXXXXX.XXX, LLC
A DELAWARE LIMITED LIABILITY COMPANY
EFFECTIVE AS OF OCTOBER 13, 1999
THE INTERESTS DESCRIBED AND REPRESENTED BY THIS LIMITED LIABILITY COMPANY
AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"
OR ANY APPLICABLE STATE SECURITIES LAWS ("STATE ACTS") AND ARE RESTRICTED
SECURITIES AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR QUALIFICATION UNDER THE ACT AND APPLICABLE
STATE ACTS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND
APPLICABLE STATE ACTS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
TABLE OF CONTENTS
Page
Article 1. DEFINITIONS.......................................................................... 1
1.1 Accretion Amount....................................................................... 1
1.2 Act.................................................................................... 1
1.3 Affiliate.............................................................................. 1
1.4 Agreement.............................................................................. 1
1.5 Business............................................................................... 1
1.6 Business Plan.......................................................................... 1
1.7 Capital Account........................................................................ 1
1.8 Capital Contribution................................................................... 1
1.9 Certificate of Formation or Certificate................................................ 2
1.10 Change of Control...................................................................... 2
1.11 Code................................................................................... 2
1.12 Common Unit............................................................................ 2
1.13 Company................................................................................ 2
1.14 Company Property....................................................................... 2
1.15 Confidential Information............................................................... 2
1.16 Deficit Capital Account................................................................ 3
1.17 Depreciation........................................................................... 3
1.18 Distributable Cash..................................................................... 3
1.19 Distribution........................................................................... 3
1.20 Economic Interest...................................................................... 3
1.21 Economic Interest Owner................................................................ 4
1.22 Entity................................................................................. 4
1.23 Equity Owner........................................................................... 4
1.24 Fiscal Year............................................................................ 4
1.25 Gross Asset Value...................................................................... 4
1.26 Holders................................................................................ 5
1.27 IPO.................................................................................... 5
1.28 Intellectual Property Rights........................................................... 5
1.29 License Agreement...................................................................... 5
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1.30 Majority Interest...................................................................... 6
1.31 Manager................................................................................ 6
1.32 Member................................................................................. 6
1.33 Membership Interest.................................................................... 6
1.34 Navigant............................................................................... 6
1.35 Navigant Options....................................................................... 6
1.36 Navigant Dilutive Units................................................................ 6
1.37 NII.................................................................................... 6
1.38 NII Sale............................................................................... 6
1.39 Noncompetitive Activity................................................................ 6
1.40 Och-Ziff Partners Domestic............................................................. 7
1.41 Och-Ziff Partners Overseas............................................................. 7
1.42 Och-Ziff Partners...................................................................... 7
1.43 Ownership Interest..................................................................... 7
1.44 Preferred Sale Fee..................................................................... 7
1.45 Proportionately Dilutive Units......................................................... 7
1.46 Put Period............................................................................. 7
1.47 Put Right.............................................................................. 7
1.48 Person................................................................................. 7
1.49 Preferred-to-Common Conversion Option.................................................. 8
1.50 Preferred Units........................................................................ 8
1.51 Profits and Losses..................................................................... 8
1.52 Proportionately........................................................................ 9
1.53 Redemption Price....................................................................... 9
1.54 Regulations............................................................................ 9
1.55 Reorganization......................................................................... 9
1.56 Reserves............................................................................... 9
1.57 Sale or Sell........................................................................... 9
1.58 Secretary of State..................................................................... 9
1.59 Selling Equity Owner................................................................... 9
1.60 Sharing Ratio.......................................................................... 9
1.61 State.................................................................................. 9
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1.62 Successor Corporation.................................................................. 9
1.63 Two-Thirds Interest.................................................................... 10
1.64 Unrecovered Losses..................................................................... 10
1.65 Voting Interest........................................................................ 10
Article 2. FORMATION OF COMPANY.................................................................. 10
2.1 Formation.............................................................................. 10
2.2 Name................................................................................... 10
2.3 Principal Place of Business............................................................ 10
2.4 Registered Office and Registered Agent................................................. 10
2.5 Term................................................................................... 10
Article 3. BUSINESS OF COMPANY................................................................... 10
3.1 Permitted Business..................................................................... 10
Article 4. NAMES AND ADDRESSES OF EQUITY OWNERS.................................................. 11
Article 5. RIGHTS AND DUTIES OF MANAGER AND OFFICERS............................................. 11
5.1 Management.............................................................................. 11
5.2 Number, Tenure and Qualifications....................................................... 12
5.3 Certain Powers of Manager............................................................... 12
5.4 Limitations on Authority................................................................ 13
5.5 Liability for Certain Acts.............................................................. 14
5.6 Manager and Members Have No Exclusive Duty to Company; Noncompetition Covenant.......... 14
5.7 Bank Accounts........................................................................... 16
5.8 Indemnity of the Manager, Employees and Other Agents.................................... 16
5.9 Resignation............................................................................. 16
5.10 Removal................................................................................ 16
5.11 Vacancies.............................................................................. 16
5.12 Compensation, Reimbursement, Organization Expenses..................................... 17
5.13 Annual Operating Plan.................................................................. 17
5.14 Right to Rely on the Manager........................................................... 18
5.15 Officers............................................................................... 18
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Article 6. RIGHTS AND OBLIGATIONS OF EQUITY OWNERS............................................... 20
6.1 Limitation of Liability................................................................ 20
6.2 List of Equity Owners.................................................................. 20
6.3 Equity Owners Have No Agency Authority................................................. 21
6.4 Company Books.......................................................................... 21
6.5 Priority and Return of Capital......................................................... 21
6.6 License Agreement...................................................................... 21
6.7 Warrants............................................................................... 21
Article 7. MEETINGS OF MEMBERS................................................................... 21
7.1 No Required Meetings................................................................... 21
7.2 Place of Meetings...................................................................... 21
7.3 Notice of Meetings..................................................................... 21
7.4 Meeting of all Members................................................................. 22
7.5 Record Date............................................................................ 22
7.6 Quorum................................................................................. 22
7.7 Manner of Acting....................................................................... 22
7.8 Proxies................................................................................ 22
7.9 Action by Members Without a Meeting.................................................... 23
7.10 Waiver of Notice....................................................................... 23
Article 8. CONTRIBUTIONS TO THE COMPANY AND CAPITAL ACCOUNTS..................................... 23
8.1 Members' Capital Contributions......................................................... 23
8.2 Additional Contributions............................................................... 23
8.3 Capital Accounts....................................................................... 23
8.4 Withdrawal or Reduction of Equity Owners' Contributions to Capital..................... 24
Article 9. ALLOCATIONS, INCOME TAX, DISTRIBUTIONS, ELECTIONS AND REPORTS......................... 24
9.1 Allocations of Profits and Losses from Operations...................................... 24
9.2 Special Allocations to Capital Accounts................................................ 25
9.3 Credit or Charge to Capital Accounts................................................... 27
9.4 Distributions.......................................................................... 27
9.5 Limitation Upon Distributions.......................................................... 27
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9.6 Accounting Principles.................................................................. 28
9.7 Interest on and Return of Capital Contributions........................................ 28
9.8 Loans to Company....................................................................... 28
9.9 Accounting Period...................................................................... 28
9.10 Records and Reports.................................................................... 28
9.11 Returns and Other Elections............................................................ 29
9.12 Tax Matters Partner.................................................................... 30
9.13 Certain Allocations for Income Tax (But Not Book Capital Account) Purposes............. 31
Article 10. TRANSFERABILITY...................................................................... 31
10.1 General................................................................................ 31
10.2 Right of First Refusal and Co-Sale..................................................... 32
10.3 Transferee Not Member in Absence of Consent............................................ 33
10.4 Additional Conditions to Recognition of Transferee..................................... 34
10.5 Put Rights............................................................................. 35
10.6 Sales to Affiliates.................................................................... 37
10.7 Right of First Offer................................................................... 38
Article 11. ISSUANCE OF MEMBERSHIP INTERESTS; OPTIONS; CONVERSION RIGHTS......................... 39
11.1 Issuance of Additional Membership Interests to New Members; Right of First Offer....... 39
11.2 Navigant Options....................................................................... 39
11.3 Conversion of Preferred Units to Common Units.......................................... 40
11.4 Issuance of Common Units (and Options to Acquire Common Units) to Employees; Dilution.. 40
11.5 Conversion of Common Units Upon Reorganization......................................... 41
11.6 Part Year Allocations With Respect to New Members...................................... 42
Article 12. DISSOLUTION AND TERMINATION.......................................................... 42
12.1 Dissolution............................................................................ 42
12.2 Effect of Dissolution.................................................................. 42
12.3 Winding Up, Liquidation and Distribution of Assets..................................... 42
12.4 Filing or Recording Statements......................................................... 45
12.5 Return of Contribution Nonrecourse to Other Equity Owners.............................. 45
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Article 13. MISCELLANEOUS PROVISIONS............................................................. 45
13.1 Notices............................................................................... 45
13.2 Books of Account and Records.......................................................... 45
13.3 Application of State Law.............................................................. 45
13.4 Waiver of Action for Partition........................................................ 46
13.5 Amendments............................................................................ 46
13.6 Execution of Additional Instruments................................................... 46
13.7 Construction.......................................................................... 46
13.8 Effect of Inconsistencies with the Act................................................ 46
13.9 Waivers............................................................................... 47
13.10 Rights and Remedies Cumulative........................................................ 47
13.11 Attorneys' Fees....................................................................... 47
13.12 Severability.......................................................................... 47
13.13 Heirs, Successors and Assigns......................................................... 47
13.14 Creditors............................................................................. 47
13.15 Counterparts.......................................................................... 47
13.16 Rule Against Perpetuities............................................................. 48
13.17 Power of Attorney..................................................................... 48
13.18 Investment Representations............................................................ 48
13.19 Representations and Warranties........................................................ 49
13.20 ERISA Representation and Covenant..................................................... 51
13.21 Confidential Information.............................................................. 51
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This Limited Liability Company Agreement is made and entered into effective
as of the 13th day of October, 1999, (the "Effective Date") by and among the
Company and each of the Members whose signatures appear on the signature page
hereof (the "Initial Members"). In consideration of the mutual covenants herein
contained and for other good and valuable consideration, the Members and the
Company (and each person who subsequently becomes an Equity Owner) hereby agree
as follows:
Article 1.
DEFINITIONS
The following terms used in this Agreement shall have the following
meanings (unless otherwise expressly provided herein):
1.1 Accretion Amount. Accretion Amount shall mean an amount, computed
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without duplication, at the rate of six percent (6%) compounded annually on
$1,000 per Preferred Unit commencing on the Effective Date and ending on the
earlier of the date of dissolution of the Company, the date the Put Option is
exercised pursuant to Section 10.5 or the date the Preferred Units are converted
to Common Units, as appropriate.
1.2 Act. Act shall mean the Delaware Limited Liability Company Act, as
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amended from time to time.
1.3 Affiliate. Affiliate shall mean, with respect to any Person, (i) any
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Person directly or indirectly controlling, controlled by, or under common
control with such Person, and (ii) any Person owning or controlling ten percent
(10%) or more of the outstanding voting interests of such Person. For purposes
of this definition, the term "controls," "is controlled by," or "is under common
control with" shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
1.4 Agreement. Agreement shall mean this Limited Liability Company
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Agreement as originally executed and as amended from time to time.
1.5 Business. Business is defined in Section 3.1.
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1.6 Business Plan. Business Plan is defined in Section 3.1.
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1.7 Capital Account. Capital Account as of any given date shall mean the
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Capital Account of each Equity Owner as described in Article 8 and maintained to
such date in accordance with this Agreement.
1.8 Capital Contribution. Capital Contribution shall mean any
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contribution to the capital of the Company in cash or property by an Equity
Owner whenever made. "Initial Capital Contribution" shall mean the initial
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contribution to the capital of the Company pursuant to this Agreement as shown
on Exhibit 8.1.
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1.9 Certificate of Formation or Certificate. The Certificate of Formation
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or Certificate shall mean the Certificate of Formation of the Company as filed
with the Secretary of State as the same may be amended from time to time.
1.10 Change of Control. Change of Control means (a) any merger or
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consolidation to which NII is a party except for a merger in which after giving
effect to such merger, the holders of NII's outstanding capital stock possessing
a majority of the voting power to elect a majority of the surviving
corporation's board of directors ("Voting Power") immediately prior to the
merger shall continue to own the surviving corporation's outstanding capital
stock possessing the Voting Power, and (b) any transaction or series of related
transactions in which capital stock representing in excess of 50% of NII's
Voting Power is transferred.
1.11 Code. Code shall mean the Internal Revenue Code of 1986, as amended
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from time to time.
1.12 Common Unit. Common Unit means an Ownership Interest in the Company
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which entitles the Equity Owner who holds such Common Unit to the following:
(a) a Proportionate share of the Profits and Losses allocated to all
Common Units,
(b) a Proportionate share of the Voting Interests attributable to all
Common Units held by Members, and
(c) such other rights and obligations set forth in this Agreement.
1.13 Company. Company shall mean XxxxxxxxXxxxxxxxx.xxx, LLC, a Delaware
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limited liability company.
1.14 Company Property. All assets (real or personal, tangible or
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intangible, including cash) of the Company.
1.15 Confidential Information. Confidential Information means any
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proprietary information, whether written or oral, pertaining to the business,
financial condition, strategies, plans, policies, clients or customers,
inventions, trade secrets, computer programs, or processes of the disclosing
party (i) that is furnished or disclosed by the disclosing party to the
recipient or to the recipient's employees, representatives or agents, and (A) in
the case of written information, is conspicuously marked as proprietary or
confidential, or (B) in the case of information which is provided orally, is
stated to be proprietary or confidential at the time of disclosure and after
disclosure is reduced to writing or other tangible form and delivered within 10
business days in accordance with this agreement to the party receiving such
disclosure. Confidential Information shall not include any information that (X)
is already known to the receiving party at the time of receipt, as evidenced by
written records made prior to such receipt,
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or (Y) is independently developed or formulated by the receiving party, or (Z)
otherwise is or becomes generally available to the public through no fault of
the receiving party.
1.16 Deficit Capital Account. Deficit Capital Account shall mean with
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respect to any Equity Owner, the deficit balance, if any, in such Equity Owner's
Capital Account as of the end of the Fiscal Year, after giving effect to the
following adjustments:
(a) credit to such Capital Account the amount, if any, which such
Equity Owner is obligated to restore under Section 1.704-1(b)(2)(ii)(c) of the
Regulations, as well as any addition thereto pursuant to the next to last
sentence of Sections 1.704-2(g)(1) and (i)(5) of the Regulations, after taking
into account thereunder any changes during such year in partnership minimum gain
as determined in accordance with Section 1.704-2(d) of the Regulations ("Company
Minimum Gain") and in any partner nonrecourse debt minimum as determined under
Section 1.704-2(i)(3) of the Regulations ("Member Minimum Gain"); and
(b) debit to such Capital Account the items described in Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.
This definition of Deficit Capital Account is intended to comply with the
provisions of Regulations Sections 1.704-1(b)(2)(ii)(d) and 1.704-2, and shall
be interpreted consistently with those provisions.
1.17 Depreciation. For each Fiscal Year, an amount equal to the
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depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such Fiscal Year, except that if the Gross Asset Value
of an asset differs from its adjusted basis for federal income tax purposes at
the beginning of such Fiscal Year, Depreciation shall be an amount which bears
the same ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization, or other cost recovery deduction for such Fiscal
Year bears to such beginning adjusted tax basis; provided, however, that if the
adjusted basis for federal income tax purposes of an asset at the beginning of
such Fiscal Year is zero, Depreciation shall be determined with reference to
such beginning Gross Asset Value using any reasonable method selected by the
Manager.
1.18 Distributable Cash. All cash, whether revenues or other funds
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received by the Company, less the sum of the following to the extent paid or set
aside by the Company: (i) all principal and interest payments on indebtedness
of the Company and all other sums paid to lenders; (ii) all cash expenditures
incurred incident to the normal operation of the Company's business; and (iii)
Reserves.
1.19 Distribution. Any Sale of Company Property from the Company to or
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for the benefit of an Equity Owner by reason of such Equity Owner's ownership of
an Economic Interest.
1.20 Economic Interest. An Equity Owner's share of one or more of the
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Profits, Losses and Distributions pursuant to this Agreement and the Act,
including such rights
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that the Equity Owner has with respect to any Common Units or Preferred Units
held by it, but shall not include any right to participate in the management or
affairs of the Company, including, the right to vote on, consent to or otherwise
participate in any decision of the Members or Manager.
1.21 Economic Interest Owner. The owner of an Economic Interest who is
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not a Member.
1.22 Entity. Any general partnership (including a limited liability
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partnership), limited partnership (including a limited liability limited
partnership), limited liability company, corporation, joint venture, trust,
business trust, cooperative or association or any foreign trust or foreign
business organization.
1.23 Equity Owner. An Economic Interest Owner or a Member.
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1.24 Fiscal Year. The taxable year of the Company shall be a calendar
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year unless another year is required for federal income tax purposes.
1.25 Gross Asset Value. Gross Asset Value means, with respect to any
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asset, the asset's adjusted basis for federal income tax purposes, except as
follows:
(a) The initial Gross Asset Value of any asset contributed by an
Equity Owner to the Company shall be the gross fair market value of such asset,
as determined by the contributing Member and the Manager, provided that the
initial Gross Asset Values of the assets contributed to the Company pursuant to
Section 8.1 hereof shall be as set forth in Exhibit 8.1, and provided further
that, if the contributing Member is a Manager, the determination of the fair
market value of any other contributed asset shall require the consent of the
other Members owning a Majority Interest (determined without regard to the
Voting Interest of such contributing Member);
(b) The Gross Asset Values of all Company assets shall be adjusted
to equal their respective gross fair market values, as reasonably determined by
the Manager as provided in Article 11 and as of the following times: (i) the
acquisition of an additional interest by any new or existing Equity Owner in
exchange for more than a de minimis contribution of property (including money);
(ii) the Distribution by the Company to an Equity Owner of more than a de
minimis amount of property as consideration for an Ownership Interest; and (iii)
the liquidation of the Company within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses
(1) and (ii) above shall be made only if the Manager reasonably determines that
such adjustments are necessary or appropriate to reflect the relative economic
interests of the Equity Owners in the Company;
(c) The Gross Asset Value of any Company asset Distributed to any
Equity Owner shall be adjusted to equal the gross fair market value of such
asset on the date of Distribution as determined by an independent appraiser
selected by the Manager or by agreement of the Members holding not less 90% of
all Voting Interests; and
4
(d) The Gross Asset Values of Company assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Section 734(b) or Section 743(b) of the Code, but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulation Section 1.704-1(b)(2)(iv)(m) and Section 8.3 and
subparagraph (e) under the definition of Profits and Losses; provided, however,
that Gross Asset Values shall not be adjusted pursuant to this subparagraph (d)
of this definition to the extent that the Manager determines that an adjustment
pursuant to subparagraph (b) of this definition is necessary or appropriate in
connection with a transaction that would otherwise result in an adjustment
pursuant to this subparagraph (d).
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
subparagraph (a), (b) or (d) of this definition, then such Gross Asset Value
shall thereafter be adjusted by the Depreciation taken into account with respect
to such asset for purposes of computing Profits and Losses.
1.26 Holders. Holders is defined in Section 10.5(a).
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1.27 IPO. IPO shall mean an initial public offering of Company common
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stock which shall: (a) be effected by means of a firm-commitment underwriting
managed by one or more nationally recognized investment banking firms; (b) be
registered with the Securities and Exchange Commission under the Securities Act;
(c) involve the listing of the Company common stock on any national securities
exchange; and (d) raise gross proceeds to Company which result in a "total
valuation" of the Company immediately after the IPO of $75,000,000 or more. For
purposes of this definition, "total valuation" shall be (i) the initial price
per share of the Company's common stock offered to the public times the total
number of shares of the Company's common stock outstanding immediately after the
Closing of the offering, plus (ii) the fair market value (as determined in good
faith by the Manager) of any outstanding securities of the Company which are not
common stock.
1.28 Intellectual Property Rights. Intellectual Property Rights shall
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mean any (i) patents, patent applications, patent disclosures and all related
continuation, continuation-in-part, divisional, reissue, reexamination, utility
model, certificate of invention and design patents, design patent applications,
design registrations and applications for design registrations, and mask work
rights, (ii) trademarks, tradenames, service marks, trade dress, logos, and
registrations and applications for registration thereof, (iii) copyrights and
registrations and applications for registration thereof, (iv) trade secrets and
confidential business information (whether patentable or unpatentable and
whether or not reduced to practice), know-how, manufacturing and production
processes and techniques, research and development information, and
copyrightable works, (v) other proprietary rights relating to any of the
foregoing, and (vi) copies and tangible embodiments thereof.
1.29 License Agreement. License Agreement is defined in Section 6.7.
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1.30 Majority Interest. One or more Voting Interests of Members which
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taken together exceed 50% of the aggregate of all Voting Interests.
1.31 Manager. Manager shall mean one or more Managers. Specifically,
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"Manager" shall mean Navigant, and any Person that succeeds it in that capacity.
1.32 Member. Each of the parties who executes a counterpart of this
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Agreement as a Member (an "Initial Member") and each of the parties who may
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hereafter become a Member. If a Person is a Member immediately prior to the
purchase or other acquisition by such Person of an Economic Interest, such
Person shall have all of the rights of a Member with respect to such purchased
or otherwise acquired Ownership Interest, as the case may be.
1.33 Membership Interest. A Member's entire interest in the Company,
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including such Member's Economic Interest and such other rights and privileges
that the Member may enjoy by being a Member.
1.34 Navigant. Navigant shall mean XxxxxxxxXxxxxxxxx.xxx Holdings, inc.
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a Delaware Corporation.
1.35 Navigant Options. Navigant Options is defined in Section 11.2(a).
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1.36 Navigant Dilutive Units. Navigant Dilutive Units is defined in
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Section 11.4(b).
1.37 NII. NII shall mean Navigant International, Inc., a Delaware
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Corporation.
1.38 NII Sale. NII Sale shall mean: (i) the sale for cash, promissory
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notes and/or stock of a corporation (other than NII or an Affiliate of NII
immediately before the sale) of 100 percent of the capital stock of NII and 100%
of all options and warrants to acquire capital stock of NII; or (ii) the merger
of NII with or into another corporation (other than NII or an Affiliate of NII
immediately before the sale) pursuant to which 100 percent of the issued and
outstanding capital shares of NII and 100 percent of the options and warrants to
purchase capital stock of NII are exchanged for cash, notes and/or publicly
traded capital stock of the acquiring corporation or an Affiliate of the
acquiring corporation, or (iii) a sale or other disposition of all or
substantially all of NII's assets. The value of the stock received, if any,
shall be determined as of the closing of the NII Sale, based upon the closing
price of such stock for the 15 trading days immediately preceding, and
including, the date of closing of the NII Sale.
1.39 Noncompetitive Activity. Noncompetitive Activity shall mean either:
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(a) Any leisure travel business booked through traditional channels,
including by way of a person-to-person meeting, telephone, facsimile, mail,
telephone or E-Mail provided that such business was not initiated from a web-
based contact; or
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(b) Any business travel booked through any means whatsoever,
including without limitation, from a web based contact.
1.40 Och-Ziff Partners Domestic. Och-Ziff Partners Domestic shall mean
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OZ Domestic Partners, L.P., a Delaware limited partnership.
1.41 Och-Ziff Partners Overseas. Och-Ziff Partners Overseas shall mean
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OZ SPCI, Ltd., a Cayman Islands exempt organization.
1.42 Och-Ziff Partners. Och-Ziff Partners shall mean collectively, Och-
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Ziff Partners Domestic and Och-Ziff Partners Overseas.
1.43 Ownership Interest. Ownership interest shall mean:
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(a) in the case of a Member, the Member's Membership Interest; and
(b) in the case of an Economic Interest Owner, the Economic Interest
Owner's Economic Interest.
1.44 Preferred Sale Fee. Preferred Sale Fee shall mean an amount equal
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to the sum of the following per Preferred Unit:
(a) $1,000, plus
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(b) the Accretion Amount through the closing date of the NII Sale,
plus
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(c) the lesser of:
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(1) The product of: (x) positive remainder, if any, of the
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sales price per common share of NII (adjusted as appropriate to taking into
account any stock split or other recapitalization of NII's common stock
subsequent to the Effective Date), minus $9.00, multiplied by (y) 133.333,
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and
(2) $1,200.
1.45 Proportionately Dilutive Units. Proportionately Dilutive Units is
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defined in Section 11.4(c).
1.46 Put Period. Put Period means any period of time during which the
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Put Right may be exercised as set forth in Section 10.5.
1.47 Put Right. Put Right is defined in Section 10.5.
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1.48 Person. Any individual or Entity, and the heirs, executors,
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administrators, legal representatives, successors, and assigns of such "Person"
where the context so permits.
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1.49 Preferred-to-Common Conversion Option. Preferred-to-Common
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Conversion Option is defined in Section 10.5(c).
1.50 Preferred Units. Preferred Unit means an Ownership Interest in the
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Company which entitles the Equity Owner who holds such Preferred Unit to the
following:
(a) the Put Right described in Section 10.5, and
(b) such other rights set forth in this Agreement.
1.51 Profits and Losses. Profits and Losses shall mean for each Fiscal
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Year of the Company an amount equal to the Company's net taxable income or loss
for such year as determined for federal income tax purposes (including
separately stated items) in accordance with the accounting method and rules used
by the Company and in accordance with Section 703 of the Code with the following
adjustments:
(a) Any items of income, gain, loss and deduction allocated to
Equity Owners pursuant to Sections 9.2, 9.3 or 9.13 shall not be taken into
account in computing Profits or Losses;
(b) Any income of the Company that is exempt from federal income tax
and not otherwise taken into account in computing Profits and Losses (pursuant
to this definition) shall be added to such taxable income or loss;
(c) Any expenditure of the Company described in Section 705(a)(2)(B)
of the Code and not otherwise taken into account in computing Profits and Losses
(pursuant to this definition) shall be subtracted from such taxable income or
loss;
(d) In the event the Gross Asset Value of any Company asset is
adjusted pursuant to subparagraphs (b) or (c) of the definition of Gross Asset
Value, the amount of such adjustment shall be taken into account as gain or loss
from the disposition of such asset for purposes of computing Profits and Losses;
(e) Gain or loss resulting from any disposition of any Company asset
with respect to which gain or loss is recognized for federal income tax purposes
shall be computed with reference to the Gross Asset Value of the asset disposed
of, notwithstanding that the adjusted tax basis of such asset differs from its
Gross Asset Value;
(f) 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; and
(g) To the extent an adjustment to the adjusted tax basis of any
Company asset pursuant to Section 734(b) or Section 743(b) of the Code is
required pursuant to Section 1.704-1(b)(2)(iv)(m)(4) of the Regulations to be
taken into account
8
in determining Capital Accounts as a result of a Distribution other than in
liquidation of an Ownership Interest, the amount of such adjustment shall be
treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases the basis of the asset) from the
disposition of the asset and shall be taken into account for purposes of
computing Profits or Losses.
1.52 Proportionately. With respect to Common Units, Proportionately
---------------
means the number of Common Units held by an Equity Owner in proportion to the
number of Common Units held by all Equity Owners. With respect to Preferred
Units, Proportionately means the number of Preferred Units held by an Equity
Owner in proportion to the number of Preferred Units held by all Equity Owners.
1.53 Redemption Price. Redemption Price means the purchase price paid
----------------
upon exercise of the Put Right as set forth in Section 10.5.
1.54 Regulations. Regulations shall include proposed, temporary and
-----------
final regulations promulgated under the Code in effect as of the date of filing
the Certificate and the corresponding sections of any regulations subsequently
issued that amend or supersede such regulations.
1.55 Reorganization. Reorganization shall mean the conversion of the
--------------
Company to a corporation, an IPO or the sale of all Ownership Interests in the
Company.
1.56 Reserves. Reserves shall mean, with respect to any fiscal period,
--------
funds set aside or amounts allocated during such period to reserves which shall
be maintained in amounts deemed sufficient by the Manager for working capital
and for payment of taxes, insurance, debt service or other costs or expenses
incident to the ownership or operation of the Company's business.
1.57 Sale or Sell. A sale, assignment, exchange or other transfer
------------
(whether or not such transfer is for consideration and, in the case of transfers
of Preferred Units or Common Units, whether or not such transfer is a direct or
indirect transfer of such Units). A Sale shall include a direct pledge,
hypothecation or grant of a security interest.
1.58 Secretary of State. The secretary of state of the State.
------------------
1.59 Selling Equity Owner. Any Equity Owner which Sells all or any
--------------------
portion of its Ownership Interest.
1.60 Sharing Ratio. Sharing Ratio shall be as shown on Exhibit 1.
------------- ---------
1.61 State. State shall mean the State of Delaware.
-----
1.62 Successor Corporation. Successor Corporation is defined in Section
---------------------
11.5.
9
1.63 Two-Thirds Interest. Two Thirds Interest shall mean one or more
-------------------
Voting Interests of Members which when taken together exceed 66.67% of the
aggregate of all Voting Interests at the time of the determination thereof.
1.64 Unrecovered Losses. Unrecovered Losses shall have the meaning set
------------------
forth in Section 9.1.
1.65 Voting Interest. The Voting Interest of a Member shall be
---------------
determined by dividing the number of Common Units owned by a Member by the total
number of Common Units held by all Members. As of the date of this Agreement,
the Voting Interests are as shown on Exhibit 1.
---------
Article 2.
FORMATION OF COMPANY
2.1 Formation. On September 22, 1999, the Company was formed pursuant
---------
to the Act by the execution and delivery of a Certificate of Formation to the
Secretary of State in accordance with and pursuant to the Act. The Company and
the Members hereby forever discharge the organizer, and the organizer shall be
indemnified by the Company and the Member from and against, any expense or
liability actually incurred by the organizer by reason of having been the
organizer of the Company.
2.2 Name. The name of the Company is XxxxxxxxXxxxxxxxx.xxx, LLC.
----
2.3 Principal Place of Business. The principal place of business of
---------------------------
the Company shall be 00 Xxxxxxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000. The
Company may locate its places of business and registered office at any other
place or places as the Manager may from time to time deem advisable.
2.4 Registered Office and Registered Agent. The Company's initial
--------------------------------------
registered office and the name of the registered agent at such address shall be
as set forth in the Certificate. The registered office and registered agent may
be changed from time to time by filing the address of the new registered office
and/or the name of the new registered agent with the Secretary of State pursuant
to the Act.
2.5 Term. The term of the Company shall commence with the filing of
----
the Certificate of Formation and shall continue in existence until it terminates
in accordance with the provisions of this Agreement or the Act.
Article 3.
BUSINESS OF COMPANY
3.1 Permitted Business. The business of the Company shall be:
------------------
(a) To implement the electronic consumer leisure travel business as
such services are more fully described on identified on Exhibit 3.1 (the
"Business"), in
10
accordance with the initial business plan (the "Business Plan") which is
attached as Exhibit 3.1;
(b) To own, operate, expand or Sell the Business, including without
limitation engaging in a Reorganization;
(c) To acquire the assets, stock or other equity interests of other
businesses or assets which are necessary to, or reasonably connected with, the
Business;
(d) To invest cash or other assets in other Entities, if such
investment is necessary to or reasonably connected with the Business;
(e) To exercise all other powers necessary to, or reasonably
connected with, the Business which may be legally exercised by limited liability
companies under the Act.
(f) To engage in all activities necessary, customary, convenient or
incident to any of the foregoing.
Article 4.
NAMES AND ADDRESSES OF EQUITY OWNERS
The names and addresses of the Initial Members are as set forth on Exhibit
-------
13.1.
----
The names and addresses of other Equity Owners shall be maintained as
provided under Section 13.1.
Article 5.
RIGHTS AND DUTIES OF MANAGER AND OFFICERS
5.1 Management. The business and affairs of the Company shall be
----------
managed by its Manager. Except for situations in which the approval of the
Members is expressly required by this Agreement or by non-waivable provisions of
applicable law, the Manager shall have full and complete authority, power and
discretion to manage and control the business, affairs and properties of the
Company, to make all decisions regarding those matters and to perform any and
all other acts and activities customary or incident to the management of the
Company's business. At any time when there is more than one Manager, any one
Manager may take any action permitted to be taken by the Manager, unless the
approval of all of the Managers then appointed is expressly required pursuant to
this Agreement or the Act or unless a majority of the Managers provide written
notice to the remaining Manager(s) prior to such Manager(s) taking a specified
action that the Manager is not authorized to take such action. Unless
authorized to do so by this Agreement or by the Manager, no officer, attorney-
in-fact, employee or other agent of the Company shall have any power or
authority to bind the Company in any way, to pledge its credit or to render it
liable pecuniarily for any purpose.
11
5.2 Number, Tenure and Qualifications. The Company shall initially have
---------------------------------
one (1) Manager. The number of Managers shall be fixed from time to time by the
affirmative vote of Members holding at least a Two-Thirds Interest, but in no
instance shall there be less than one Manager. Each Manager shall hold office
until such Manager resigns pursuant to Section 5.9 or is removed pursuant to
Section 5.10. A Manager shall be appointed by the affirmative vote of Members
holding at least a Two-Thirds Interest. A Manager need not be a resident of the
State or a Member.
5.3 Certain Powers of Manager. Without limiting the generality of
-------------------------
Section 5.1 but subject to the limitations of Section 5.4, the Manager shall
have power and authority on behalf of the Company:
(a) To acquire property from any Person as the Manager may
determine. The fact that a Manager or an Equity Owner is directly or indirectly
Affiliated or connected with any such Person shall not prohibit the Manager from
dealing with that Person, provided that except as otherwise expressly provided
in this Agreement (including without limitation, Section 8.1), the terms of any
such dealing are not less favorable to the Company than could be obtained from
an unrelated party; and provided further that except as expressly provided
otherwise in this Agreement, the aggregate fair market value of any property
acquired by the Company from NII or its Affiliates during any Fiscal Year shall
not exceed $50,000 in any Fiscal Year without Oz Domestic's prior written
consent;
(b) To borrow money for the Company from banks, other lending
institutions, on such terms as the Manager deems appropriate, and in connection
therewith, to hypothecate, encumber and grant security interests in Company
Property to secure repayment of the borrowed sums;
(c) To purchase liability and other insurance to protect the
Company's property and business;
(d) To hold and own any Company real and/or personal properties in
the name of the Company;
(e) To invest any Company funds (by way of example but not
limitation) in time deposits, short-term governmental obligations, commercial
paper or other investments;
(f) To execute on behalf of the Company all instruments and
documents, including, without limitation, checks, drafts, notes and other
negotiable instruments; mortgages or deeds of trust; security agreements;
financing statements; documents providing for the acquisition, mortgage or
disposition of Company Property; assignments; bills of sale; leases; partnership
agreements; operating (or limited liability company) agreements of other limited
liability companies; and any other instruments or documents necessary, in the
opinion of the Manager, to the conduct of the business of the Company;
12
(g) To employ accountants, legal counsel, managing agents or other
experts to perform services for the Company and to compensate them from Company
funds;
(h) To enter into any and all other agreements on behalf of the
Company, with any other Person for any purpose (including fulfillment and other
contracts with NII and its Affiliates), in such forms as the Manager may approve
provided that except as otherwise expressly provided in this Agreement the terms
of any such dealing are not less favorable to the Company than are provided by
NII or its Affiliates to unrelated third parties;
(i) To execute and file such other instruments, documents and
certificates which may from time to time be required by the laws of the State or
any other jurisdiction in which the Company shall determine to do business, or
any political subdivision or agency thereof, to effectuate, implement, continue
and defend the valid existence of the Company;
(j) To enter into the License Agreement attached hereto as Exhibit
5.3(j);
(k) To appoint officers of the Company (subject to Section
5.4(a)(1)); and
(l) To do and perform all other acts as may be necessary or
appropriate to the conduct of the Company's business.
5.4 Limitations on Authority.
------------------------
(a) Notwithstanding any other provision of this Agreement, the
Manager shall not cause or commit the Company to do any of the following without
consulting with the Och-Ziff Partners:
(1) Appoint or elect a president of the Company;
(2) Enter into any agreement for the purchase of stock or of
all or substantially all of the assets of any Person or Entity, or for the
merger or consolidation with or into any Person or Entity if the purchase
price is not greater than $5,000,000; or
(3) Cause the Company to issue additional Common Units, except
as provided in Article 11;
(b) Without the prior written approval of both Navigant and Och-
Ziff Partners, which approval may not be unreasonably withheld if so requested
by the Manager, the Manager shall not cause or commit the Company to do any of
the following:
13
(1) Except as provided in Section 5.3(a), 5.3(h), 5.3(j) and
5.12 or otherwise expressly provided in this Agreement, engage in
transactions with Affiliates without the consent of both Och-Ziff Partners
and Navigant;
(2) Issue Preferred Units to any Person other than Och-Ziff
Partners;
(3) Cause the Company to undergo a Reorganization (subject also
to the notice requirement contained in Section 10.5(c));
(4) Enter into any agreement for the purchase of stock or of all
or substantially all of the assets of any Person or Entity, or for the
merger or consolidation with or into any Person or Entity if the purchase
price is greater than $5,000,000; or
(5) The sale of all or substantially all of the Company's
assets.
(c) All of Och-Ziff Partners' approval rights pursuant to this
Section 5.4(b) shall terminate in the event that it exercises the Put Right, and
thereafter the Manager shall not cause or commit the Company to do any of things
specified in Section 5.4(b) without the consent of a Majority Interest, which
consent may be unreasonably withheld.
5.5 Liability for Certain Acts.
--------------------------
(a) Subject only to Section 10.5, the Manager does not, in any way,
guarantee the return of the Equity Owners' Capital Contributions or a profit for
the Equity Owners from the operations of the Company.
(b) The Manager shall not be liable to the Company or to any Member
for any loss or damage sustained by the Company or any Member (or successor
thereto), except to the extent, if any, that the loss or damage shall have been
the result of gross negligence, fraud, deceit or willful misconduct.
5.6 Manager and Members Have No Exclusive Duty to Company;
------------------------------------------------------
Noncompetition Covenant.
-----------------------
(a) Except as expressly provided in Section 5.6(b):
(1) The Manager and the Members shall have no exclusive duty to
act on behalf of the Company.
(2) Each Manager and Member may have other business interests
and may engage in other activities in addition to those relating to the
Company.
14
(3) Neither the Company nor any Manager shall have any right, by
virtue of this Agreement, to share or participate in any other investments
or activities of any other Manager or Member.
(4) Neither any Manager nor any Equity Owner shall incur any
liability to the Company or to any of the Equity Owners as a result of
engaging in any other business or venture.
(b) Restriction on Competition.
(1) During the term of the Term of this Agreement, neither the
Manager nor the Members shall directly or indirectly, for their own account
or on behalf of or in conjunction with any other person, company,
partnership, corporation, business, group, or other entity (each, a
"Person"):
(i) engage, as an officer, director, shareholder, owner,
partner, joint venturer, or in a managerial capacity, whether as an
employee, independent contractor, consultant, advisor, or sales
representative, in (A) any travel agency business in direct competition
with the Company or (B) any business selling any products or services in
direct competition with the Company;
(ii) call upon any Person who is an employee of the Company
or its subsidiaries for the purpose or with the intent of enticing such
employee away from or out of the employ of the Company or its subsidiaries;
or
(iii) call upon any Person who or that is, at that time, or
has been, within one (1) year prior to that time, a customer of the Company
for the purpose of soliciting or selling products or services in direct
competition with the Company.
(2) The foregoing covenants shall not be deemed to prohibit the
Manager or the Members from acquiring as an investment not more than fifty
percent (50%) of the capital stock of a competing business, so long as the
Manager or Member does not effectively control such business or participate
in the day to day management of such business.
(3) NII further agrees that it will conduct all of its
electronic consumer leisure travel business through the Company.
(4) The restrictions on competition contained in this Section
5.6 shall not apply to Noncompetitive Activities. Noncompetitive Activities
shall not be deemed to be competitive with the Company's business, and
neither NII nor its Affiliates shall be restricted in any way from engaging
in Noncompetitive Activities:
15
5.7 Bank Accounts. The Manager may from time to time open bank
-------------
accounts in the name of the Company, and the Manager shall be the sole signatory
thereon, unless the Manager determine otherwise.
5.8 Indemnity of the Manager, Employees and Other Agents.
----------------------------------------------------
(a) The Company shall indemnify each Manager and make advances for
expenses to the maximum extent permitted under the Act, except to the extent the
claim for which indemnification is sought results from an act or omission for
which the Manager may be held liable to the Company or a Member under Section
5.5(b). The Company shall indemnify its employees and other agents who are not a
Manager to the fullest extent permitted by law, provided that such
indemnification in any given situation is approved by a Majority Interest.
(b) Expenses (including legal fees and expenses) incurred by a
Manager in defending any claim, demand, action, suit or proceeding subject to
subsection (a) above shall be paid by the Company in advance of the final
disposition of such claim, demand, action, suit or proceeding upon receipt of an
undertaking (which need not be secured) by or on behalf of the Manager to repay
such amount if it shall ultimately be finally determined by a court of competent
jurisdiction and not subject to appeal, that the Manager is not entitled to be
indemnified by the Company as authorized hereunder.
5.9 Resignation. Any Manager may resign at any time by giving written
-----------
notice to the Members. The resignation of any Manager shall take effect upon
receipt of notice thereof or at such later time as shall be specified in such
notice; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective. The resignation of a
Manager who is also an Equity Owner shall not affect the Manager's rights as an
Equity Owner.
5.10 Removal. At a meeting called expressly for that purpose, all or
-------
any lesser number of Managers may be removed, with or without cause, only with
the consent of Members holding a Two-Thirds Interest (inclusive of any Voting
Interests held by the Manager or its Affiliates). The removal of a Manager who
is also a Member shall not affect the Manager's rights as a Member and shall not
constitute a withdrawal of a Member.
5.11 Vacancies. Any vacancy occurring for any reason in the number of
---------
Managers shall be filled by the affirmative vote of Members holding a Two-Thirds
Interest (determined without regard to any Voting Interest owned by a Manager
who was removed pursuant to Section 5.10 during the preceding 24-month period).
Any Manager's position to be filled by reason of an increase in the number of
Managers shall be filled by the affirmative vote of a Two-Thirds Interest.
16
5.12 Compensation, Reimbursement, Organization Expenses.
--------------------------------------------------
(a) Except as provided in Section 5.12(c), the Manager shall not be
compensated for its services to the Company, except as approved by both Navigant
and Och-Ziff Partners. Upon the submission of appropriate documentation each
Member shall be reimbursed by the Company for reasonable out-of-pocket expenses
incurred on behalf, or at the request, of the Company.
(b) Upon the submission of appropriate documentation the Company
shall reimburse Och-Ziff Partners and NII for their legal expenses reasonably
incurred by them in connection with the formation, organization and
capitalization of the Company, including the legal fees incurred in connection
with negotiating and drafting this Agreement and any ancillary document;
provided that such reimbursement shall not exceed $65,000 for either Och-Ziff
Partners (collectively) or NII.
(c) NII shall be reimbursed for expenses it incurs in connection
with shared services (including without limitation, ticket fulfillment, payroll,
human resources, accounting, 24-hour services, facilities, rent, utilities,
administrative costs, and third party expenses). Such reimbursement shall be on
a per transaction, per call, per person or other reasonable basis, provided that
the terms of any such reimbursement are not less favorable to the Company than
could be obtained from an unrelated party.
(d) The Manager shall cause the Company to make an appropriate
election to treat the expenses incurred by the Company in connection with the
formation and organization of the Company to be amortized under the 60-month
period beginning with the month in which the Company begins business to the
extent that such expenses constitute "organizational expenses" of the Company
within the meaning of Code Section 709(b)(2).
5.13 Annual Operating Plan. The Manager shall prepare for the approval
---------------------
of the Members holding a Two-Thirds Interest each Fiscal Year (no later than
thirty (30) days prior to the end of the then current Fiscal Year) a business
plan ("Annual Operating Plan") for the next Fiscal Year, setting forth at a
minimum the estimated receipts (including capital calls) and expenditures
(capital, operating and other) of the Company in sufficient detail to provide an
estimate of cash flow, capital proceeds and other financial requirements of the
Company for such year. Any such Annual Operating Plan shall also include such
other information or other matters necessary in order to inform the Members of
the Company's business and to enable the Members to make an informed decision
with respect to their approval of such Annual Operating Plan. The Members shall
review the proposed Annual Operating Plan and shall offer any revisions thereto
within 30 days. After the final Annual Operating Plan has been approved by the
Members holding a Two-Thirds Interest, the Manager shall implement the Annual
Operating Plan and shall be authorized to make only the expenditures and incur
only the obligations provided for therein (subject to Section 5.4(b)).
Notwithstanding the foregoing, the Manager may make any expenditure or incur any
obligation, whether or not such expenditure or obligation is provided for in an
Annual Operating Plan, which is
17
the legal obligation of the Company and not within the reasonable control of the
Manager (e.g., real or personal property taxes). If Members holding a Two-Thirds
Interest are not able to agree on an Annual Operating Plan for any year, each
line item in the Annual Operating Plan for the prior year shall be increased by
the percentage increase in the CPI Index from the first day for which the
previous Annual Operating Plan was in effect to the first day for which the new
Annual Operating Plan is to be in effect. As used herein, "CPI Index" shall mean
the Consumer Price Index for All Items All Urban Consumers (DPI-U)
(1982-84 = 100) for the United States, as published by the United States
Department of Labor's Bureau of Labor Statistics (the "Bureau"). Should the
Bureau discontinue the publication of the above index, or publish the index less
frequently, or alter the index in some other manner, then the Manager shall,
from time to time, adopt a substitute index or substitute procedure which
reasonably reflects and monitors consumer prices, and the resulting plan shall
be the Annual Operating Plan for the current year.
5.14 Right to Rely on the Manager.
----------------------------
(a) Any Person dealing with the Company may rely (without duty of
further inquiry) upon a certificate signed by any Manager as to:
(i) The identity of any Manager or Equity Owner;
(ii) The existence or nonexistence of any fact or facts
which constitute a condition precedent to acts on behalf of the Company
by any Manager or which are in any other manner germane to the affairs of
the Company;
(iii) The Persons who are authorized to execute and deliver
any instrument or document of the Company; or
(b) Any act or failure to act by the Company or any other matter
whatsoever involving the Company or any Equity Owner.
5.15 Officers. In exercising the authority, powers and rights granted
--------
to it under this Agreement, the Manager may exercise such authority, powers and
rights directly or through officers appointed by the Manager pursuant to the
following terms and conditions.
(a) The Manager at any time and from time to time shall have the
authority to appoint a President, a Chairman, one or more Vice Presidents, a
Secretary, a Treasurer and a Controller. The Manager at any time and from time
to time may also appoint such other officers as it shall deem necessary,
including one or more Assistant Vice Presidents, one or more Assistant
Treasurers and one or more Assistant Secretaries, who shall hold their offices
for such terms as shall be determined by the Manager, and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Manager.
18
(b) The salaries of the officers shall be fixed by the Manager,
except that the Manager may delegate to any officer or officers the power to fix
the compensation of any officer appointed in accordance with the second sentence
of 5.5(a).
(c) Each officer shall hold office for one (1) year after his or
her appointment by the Manager and until his or her successor is chosen or until
his or her earlier resignation, death, removal or termination of his or her
office. Any officer may be removed with or without cause by the Manager whenever
in its judgment the best interests of the Company would be served thereby. Any
officer may resign by giving written notice to the Manager. The resignation
shall be effective upon receipt, or at such time as may be specified in such
notice.
(d) The Chairman, when one is appointed, may be declared by the
Manager to be the Chief Executive Officer of the Company and, if so, shall have
general and active management of the business of the Company and shall see that
all orders and resolutions of the Manager are carried into effect. He shall be
ex officio a member of all standing committees, unless otherwise provided in the
resolution appointing the same. The Chairman shall call meetings of the Members
and the Manager to order and shall act as chairman of such meetings.
(e) When no Chairman has been appointed, or if a Chairman has been
appointed and not declared to be the Chief Executive Officer, or in the event of
the death or disability of the Chairman or at his request, the President shall
have general and active management of the business of the Company and shall see
that all orders and resolutions of the Manager are carried into effect. The
President shall also have such powers and perform such duties as are
specifically imposed upon him by law and as may be assigned to him by the
Manager or the Chairman. The President shall be ex officio a member of all
standing committees, unless otherwise provided in the resolution appointing such
committees. In the absence of a Chairman serving as Chief Executive Officer,
the President shall call meetings of the Members and the Manager to order and
shall act as chairman of such meetings. If no other officers are appointed, the
President shall also have all of the powers and perform the duties of Secretary
and Treasurer.
(f) The Vice Presidents shall perform such duties as are generally
performed by vice presidents of corporations. The Vice Presidents shall perform
such other duties and exercise such other powers as the Manager, the Chairman or
the President shall request or delegate. The Assistant Vice Presidents shall
have such powers, and shall perform such duties, as may be prescribed from time
to time by the Manager, the Chairman or the President.
(g) The Secretary shall attend all meetings of the Manager and all
meetings of the Members and shall record all votes and the minutes of all
proceedings in books to be kept for that purpose. He or she shall give, or
cause to be given, any notices required to be given of any meetings of the
Members and of the Manager, and shall perform such other duties as may be
prescribed by the Manager, the Chairman or the President. The Assistant
Secretary or Assistant Secretaries shall, in the absence or
19
disability of the Secretary, or at the Secretary's request, perform the duties
and exercise the powers and authority herein granted to the Secretary.
(h) The Treasurer shall have charge of and be responsible for all
funds, securities, receipts and disbursements of the Company, and shall deposit
or cause to be deposited, in the name of the Company, all moneys or other
valuable effects in such banks, trust companies, or other depositories as shall
from time to time be selected by the Manager. He or she shall render to the
Chairman, the President and the Manager, whenever requested, an account of the
financial condition of the Company, and, in general, he or she shall perform all
the duties incident to the office of treasurer of a corporation, and such other
duties as may be assigned to him or her by the Manager, the Chairman or the
President.
(i) The Manager may appoint a Controller who shall keep or cause to
be kept in the books of the Company provided for that purpose a true account of
all transactions, and of the assets and liabilities, of the Company. The
Controller shall prepare and submit to the Chairman or the President such
financial statements and schedules as may be required to keep such officer
currently informed of the operations and financial condition of the Company, and
shall perform such other duties as may be assigned by the Manager, the Chairman
or the President.
(j) In case of the absence of any officer of the Company, or for
any other reason that the Manager may deem sufficient, the Manager may delegate,
for the time being, any or all of the powers or duties of such officer to any
other officer.
(k) The Manager may authorize any officer or officers, agent or
agents, to enter into any contract or execute and deliver any instrument in the
name of and on behalf of the Company. Such authority may be general or confined
to specific instances. No loans shall be contracted on behalf of the Company
and no evidences of indebtedness shall be issued in its name unless authorized
by a resolution of the Manager. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the Company shall be signed by the President, or by such officer or officers,
agent or agents of the Company as authorized by the Manager and in such manner
as shall from time to time be determined by written resolution of the Manager.
Article 6.
RIGHTS AND OBLIGATIONS OF EQUITY OWNERS
6.1 Limitation of Liability. Except as otherwise provided by the
-----------------------
non-waivable provisions of the Act or by this Agreement, no Equity Owner shall
be liable for an obligation of the Company solely by reason of being or acting
as an Equity Owner.
6.2 List of Equity Owners. Upon written request of any Member made in
---------------------
good faith and for a purpose reasonably related to the Member's rights as Member
under this Agreement (which reason shall be set forth in the written request),
the Manager shall
20
provide a list showing the names, addresses and Ownership Interests of all
Equity Owners. Economic Interest Owners shall have no rights to information
under this Section 6.2.
6.3 Equity Owners Have No Agency Authority. Except as expressly
--------------------------------------
provided in this Agreement, the Equity Owners (in their capacity as Equity
Owners) shall have no agency authority on behalf of the Company.
6.4 Company Books. In accordance with Section 9.10 herein, the Manager
-------------
shall maintain and preserve, during the term of the Company, and for five (5)
years thereafter, all accounts, books, and other relevant Company documents.
Upon reasonable request, each Member shall have the right, during ordinary
business hours, to inspect and copy such Company documents at the requesting
Member's expense.
6.5 Priority and Return of Capital. Except as may be expressly
------------------------------
provided in Article 9, no Equity Owner shall have priority over any other Equity
Owner, either as to the return of Capital Contributions or as to Profits, Losses
or Distributions; provided, however, that this Section 6.5 shall not apply to
loans (as distinguished from Capital Contributions) which an Equity Owner has
made to the Company.
6.6 License Agreement. Simultaneous with the execution of this
-----------------
Agreement, NII and the Company shall execute a License Agreement, substantially
in the form attached as Exhibit 5.3(j) (the "License Agreement").
6.7 Warrants. Simultaneous with the execution of this Agreement, the
--------
Company shall issue a warrant to purchase an aggregate of 50,000 Common Units to
the Och-Ziff Partners (in proportion to their respective Sharing Ratios)
substantially in the form attached hereto as Exhibit 6.7.
Article 7.
MEETINGS OF MEMBERS
7.1 No Required Meetings. The Members may, but shall not be required
--------------------
to hold any annual, periodic or other formal meetings. However, meetings of the
Members may be called by any Manager, or by any Member or Members holding at
least 10% of the Voting Interests.
7.2 Place of Meetings. The Member or Members calling the meeting may
-----------------
designate any place within the State as the place of meeting for any meeting of
the Members; and Members holding a Two-Thirds Interest may designate any place
outside the State as the place of meeting for any meeting of the Members. If no
designation is made, or if a special meeting be otherwise called, the place of
meeting shall be the principal executive office of the Company in the State.
7.3 Notice of Meetings. Except as provided in Section 7.4, written
------------------
notice stating the place, day and hour of the meeting and the purpose or
purposes for which the meeting is called shall be delivered not less than ten
(10) nor more than fifty (50) days
21
before the date of the meeting, either personally or by mail, by or at the
direction of the Member or Members calling the meeting, to each Member entitled
to vote at such meeting.
7.4 Meeting of all Members. If all of the Members shall meet at any
----------------------
time and place, either within or outside of the State, and consent to the
holding of a meeting at such time and place, such meeting shall be valid without
call or notice, and at such meeting lawful action may be taken.
7.5 Record Date. For the purpose of determining Members entitled to
-----------
notice of or to vote at any meeting of Members or any adjournment thereof, or
Members entitled to receive payment of any Distribution, or in order to make a
determination of Members for any other purpose, the date on which notice of the
meeting is mailed or the date on which the resolution declaring such
Distribution is adopted, as the case may be, shall be the record date for such
determination of Members. When a determination of Members entitled to vote at
any meeting of Members has been made as provided in this Section 7.5, such
determination shall apply to any adjournment thereof.
7.6 Quorum. Members holding at least a Majority Interest, represented
------
in person or by proxy, shall constitute a quorum at any meeting of Members. In
the absence of a quorum at any such meeting, a majority of the Voting Interests
so represented may adjourn the meeting from time to time for a period not to
exceed 60 days without further notice. However, if the adjournment is for more
than 60 days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
Member of record entitled to vote at the meeting. At such adjourned meeting at
which a quorum shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally noticed. The
Members present at a duly organized meeting may continue to transact business
until adjournment, notwithstanding the withdrawal during such meeting of that
number of Voting Interests whose absence would cause less than a quorum.
7.7 Manner of Acting. If a quorum is present, the affirmative vote of
----------------
Members holding a Two-Thirds Interest shall be the act of the Members, unless
the vote of a greater or lesser proportion or number is otherwise required by
the Act or by this Agreement. Unless otherwise expressly provided herein,
Members who have an interest (economic or otherwise) in the outcome of any
particular matter upon which the Members vote or consent may vote or consent
upon any such matter and their Voting Interest, vote or consent, as the case may
be, shall be counted in the determination of whether the requisite matter is
approved by the Members.
7.8 Proxies. At all meetings of Members, a Member who is qualified to
-------
vote may vote in person or by proxy executed in writing by the Member or by a
duly authorized attorney-in-fact. Such proxy shall be filed with the Manager
before or at the time of the meeting. No proxy shall be valid after eleven
months from the date of its execution, unless otherwise provided in the proxy.
22
7.9 Action by Members Without a Meeting. Action required or permitted
-----------------------------------
to be taken at a meeting of Members may be taken without a meeting if the action
is evidenced by one or more written consents or approvals describing the action
taken and signed by Members holding sufficient Voting Interests, as the case may
be, to approve such action had such action been properly voted on at a duly
called meeting of the Members. Action taken under this Section 7.9 is effective
when Members with the requisite Interests or Voting Interests, as the case may
be, have signed the consent or approval, unless the consent specifies a
different effective date. The record date for determining Members entitled to
take action without a meeting shall be the date the first Member signs a written
consent.
7.10 Waiver of Notice. When any notice is required to be given to any
----------------
Member, a waiver thereof in writing signed by the person entitled to such
notice, whether before, at, or after the time stated therein, shall be
equivalent to the giving of such notice.
Article 8.
CONTRIBUTIONS TO THE COMPANY AND CAPITAL ACCOUNTS
8.1 Members' Capital Contributions. Not later than three days after
------------------------------
each of the parties has executed this Agreement and delivered an executed copy
of same to the Manager, each Equity Owner shall contribute such amount as is set
forth in Exhibit 8.1 hereto as its share of the Initial Capital Contribution.
-----------
8.2 Additional Contributions. Except as set forth in Section 8.1, no
------------------------
Equity Owner shall be required to make any Additional Capital Contributions. To
the extent unanimously approved by the Manager, from time to time, the Equity
Owners may be permitted to make additional Capital Contributions if and to the
extent they so desire, and if the Manager determines that such additional
Capital Contributions are necessary or appropriate in connection with the
conduct of the Company's business (including without limitation, expansion or
diversification). In such event, the Equity Owners shall have the opportunity
(but not the obligation) to participate in such additional Capital Contributions
proportionate to their Sharing Ratios.
8.3 Capital Accounts.
----------------
(a) A separate Capital Account shall be maintained for each Equity
Owner. Each Equity Owner's Capital Account shall be increased by (1) the amount
of money contributed by such Equity Owner to the Company; (2) the fair market
value of property contributed by such Equity Owner to the Company (net of
liabilities secured by such contributed property that the Company is considered
to assume or take subject to under Section 752 of the Code); (3) allocations to
such Equity Owner of Profits; and (4) any items in the nature of income and gain
which are specially allocated to the Equity Owner pursuant to Sections 9.2 and
9.3. Each Equity Owner's Capital Account shall be decreased by (1) the amount
of money Distributed to such Equity Owner by the Company; (2) the fair market
value of property Distributed to such Equity Owner by the Company (net of
liabilities secured by such Distributed property that such Equity Owner
23
is considered to assume or take subject to under Section 752 of the Code); (3)
any items in the nature of deduction and loss that are specially allocated to
the Equity Owner pursuant to Sections 9.2 and 9.3; and (4) allocations to such
Equity Owner of Losses.
(b) Without limiting the other rights and duties of a transferee of
an Ownership Interest pursuant to this Agreement, in the event of a permitted
sale or exchange of an Ownership Interest in the Company, (1) the Capital
Account of the transferor shall become the Capital Account of the transferee to
the extent it relates to the transferred Ownership Interest in accordance with
Section 1.704-1(b)(2)(iv) of the Regulations; and (2) the transferee shall be
treated as the transferor for purposes of allocations and distributions pursuant
to Article 9 to the extent that such allocations and distributions relate to the
transferred Ownership Interest.
(c) Subject to Section 11.5, upon liquidation of the Company,
liquidating Distributions shall be made in accordance with the positive Capital
Account balances of the Equity Owners, as determined after taking into account
all Capital Account adjustments for the Company's taxable year during which the
liquidation occurs. Liquidation proceeds shall be paid in accordance with
Section 12.3 and Section 9.4(b). The Company may offset damages for breach of
this Agreement by any Equity Owner whose interest is liquidated (either upon the
withdrawal of the Equity Owner or the liquidation of the Company) against the
amount otherwise Distributable to such Equity Owner. Subject to Section 8.1, no
Equity Owner shall have any obligation to restore all or any portion of a
deficit balance in such Equity Owner's Capital Account.
8.4 Withdrawal or Reduction of Equity Owners' Contributions to Capital.
------------------------------------------------------------------
(a) An Equity Owner shall not receive a Distribution of any part of
its Capital Contribution to the extent such Distribution would violate Section
9.5.
Article 9.
ALLOCATIONS, INCOME TAX,
DISTRIBUTIONS, ELECTIONS AND REPORTS
9.1 Allocations of Profits and Losses from Operations. Except as
-------------------------------------------------
provided in Sections 9.2 and Section 9.3, and Article 11, the Profits and Losses
for each Fiscal Year shall be allocated as follows:
(a) Losses shall be allocated as follows:
(1) First, to the Och-Ziff Partners pro rata in accordance
with their respective Common Units until the total Unrecovered Losses (as
defined in Section 9.1(b)(1)) allocated pursuant to this Section
9.1(a)(1) equals $2,500,000;
(2) Thereafter, to the Equity Owners Proportionately in
accordance with their Common Units.
24
(b) Profits shall be allocated as follows:
(1) First, to each Equity Owner which previously has been
allocated Losses pursuant to Section 9.1(a) which have not been fully
offset by allocations of Profit pursuant to this Section 9.1(b)(1),
Section 11.2, Section 11.3 and Section 11.4 ("Unrecovered Losses") until
the total amount of Profits allocated to each such Equity Owner pursuant
to this Section 9.1(b)(1), Section 11.2, Section 11.3 and Section 11.4 is
equal to the total amount of Losses which have been allocated to such
Equity Owner pursuant to Section 9.1(a). Profits allocated pursuant to
this Section 9.1(b)(1) shall be allocated to the Equity Owners in
proportion to their respective Unrecovered Losses; and
(2) Second, to the holders of the Common Units,
Proportionately.
9.2 Special Allocations to Capital Accounts. Notwithstanding Section
---------------------------------------
9.1 hereof:
(a) In the event that any Equity Owner unexpectedly receives any
adjustments, allocations or Distributions described in Sections
1.704-1(b)(2)(ii)(d)(4), (5), or (6) of the Regulations, which create or
increase a Deficit Capital Account of such Equity Owner, then items of Company
income and gain (consisting of a pro rata portion of each item of Company
income, including gross income, and gain for such year and, if necessary, for
subsequent years) shall be specially allocated to such Equity Owner in an amount
and manner sufficient to eliminate, to the extent required by the Regulations,
the Deficit Capital Account so created as quickly as possible. It is the intent
that this Section 9.2(a) be interpreted to comply with the alternate test for
economic effect set forth in Section 1.704-1(b)(2)(ii)(d) of the Regulations.
(b) The Losses allocated pursuant to Section 9.1 hereof shall not
exceed the maximum amount of Losses that can be so allocated without causing any
Member to have a Deficit Capital Account at the end of any Fiscal Year. In the
event that some, but not all, of the Members would have Deficit Capital Accounts
as a consequence of an allocation of Losses pursuant to Section 9.1 hereof, the
limitation set forth in the preceding sentence shall be applied on a Member by
Member basis so as to allocate the maximum permissible Losses to each Member
under Section 1.704-1(b)(2)(ii)(d) of the Regulations. All Losses in excess of
the limitation set forth in this Section 9.2(b) shall be allocated to the
Members in proportion to their respective positive Capital Account balances, if
any, and thereafter to the Members in accordance with their interests in the
Company as determined by the Manager in their reasonable discretion. In the
event that any Equity Owner would have a Deficit Capital Account at the end of
any Fiscal Year which is in excess of the sum of any amount, if any, that such
Equity Owner is obligated to restore to the Company under Section
1.704-1(b)(2)(ii)(c) of the Regulations and such Equity Owner's share of Company
Minimum Gain as defined in Section 1.704-2(g)(1) of the Regulations (which is
also treated as an obligation to restore in accordance with Section
1.704-1(b)(2)(ii)(d) of the Regulations), the Capital Account of such Equity
25
Owner shall be specially credited with items of Company income (including gross
income) and gain in the amount of such excess as quickly as possible.
(c) Notwithstanding any other provision of this Section 9.2, if
there is a net decrease in the Company Minimum Gain as during a Fiscal Year,
then the Capital Accounts of each Equity Owner shall be allocated items of
income (including gross income) and gain for such Fiscal Year (and if necessary
for subsequent Fiscal Years) equal to that Equity Owner's share of the net
decrease in Company Minimum Gain. This Section 9.2(c) is intended to comply with
the minimum gain chargeback requirement of Section 1.704-2 of the Regulations
and shall be interpreted consistently therewith. If in any Fiscal Year that the
Company has a net decrease in the Company Minimum Gain, if the minimum gain
chargeback requirement would cause a distortion in the economic arrangement
among the Equity Owners and it is not expected that the Company will have
sufficient other income to correct that distortion, the Manager may in their
discretion (and shall, if requested to do so by a Member) seek to have the
Internal Revenue Service waive the minimum gain chargeback requirement in
accordance with Section 1.704-2(f)(4) of the Regulations.
(d) Notwithstanding any other provision of this Section 9.2 except
Section 9.2(c), if there is a net decrease in Member Minimum Gain attributable
to a Member Nonrecourse Debt during any Company Fiscal Year, each Member who has
a share of the Member Minimum Gain as of the beginning of the Fiscal Year shall
be specially allocated items of Company income and gain for such Fiscal Year
(and, if necessary, subsequent Fiscal Years) equal to such Member's share of the
net decrease in Member Minimum Gain attributable to such Member Nonrecourse
Debt. A Member's share of the net decrease in Member Minimum Gain shall be
determined in accordance with Section 1.704-2(i)(4) of the Regulations;
provided, however, that a Member shall not be subject to this provision to the
extent that an exception is provided by Section 1.704-2(i)(4) of the Regulations
and any Revenue Rulings issued with respect thereto. Any Member Minimum Gain
allocated pursuant to this provision shall consist of first, gains recognized
from the disposition of Company property subject to the Member Nonrecourse Debt,
and, second, if necessary, a pro rata portion of the Company's other items of
income or gain (including gross income) for that Fiscal Year. This Section
9.2(d) is intended to comply with the minimum gain chargeback requirement in
Section 1.704-2(i)(4) of the Regulations and shall be interpreted consistently
therewith.
(e) Items of Company loss, deduction and expenditures described in
Section 705(a)(2)(B) of the Code which are attributable to any nonrecourse debt
of the Company and are characterized as partner nonrecourse deductions under
Section 1.704-2(i) of the Regulations shall be allocated to the Equity Owners'
Capital Accounts in accordance with said Section 1.704-2(i) of the Regulations.
(f) Beginning in the first taxable year in which there are
allocations of "nonrecourse deductions" (as described in Section 1.704-2(b) of
the Regulations), such deductions shall be allocated to the Equity Owners in the
same manner as Loss is allocated for such period.
26
(g) To the extent that an adjustment to the adjusted tax basis of
any Company asset pursuant to Section 734(b) or 743(b) of the Code is required
pursuant to Section 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4) of the
Regulations, to be taken into account in determining Capital Accounts as the
result of a Distribution to an Equity Owner in complete liquidation of its
Ownership Interest, the amount of such adjustment to Capital Accounts shall be
treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases such basis), and such gain or loss shall be
specially allocated to the Equity Owners in accordance with their interests in
the Company in the event Section 1.704-1(b)(2)(iv)(m)(2) of the Regulations
applies, or to the Equity Owner to whom such Distribution was made in the event
Section 1.704-1(b)(2)(iv)(m)(4) of the Regulations applies.
(h) Any income, gain, loss or deduction realized by the Company as
a direct or indirect result of the issuance of an interest in the Company by the
Company to an Equity Owner (the "Issuance Items") shall be allocated among the
Equity Owners so that, to the extent possible, Capital Accounts of the Equity
Owners with respect to each their Common Units (i.e., determined without regard
to the portion of an Equity Owner's Capital Account which is determined with
reference to such Equity Owner's Preferred Units) is Proportionate.
9.3 Credit or Charge to Capital Accounts. Any credit or charge to the
------------------------------------
Capital Accounts of the Equity Owners pursuant to Sections 9.2(a), 9.2(b),
9.2(c), 9.2(d), 9.2(e), 9.2(f) and 9.2(g) ("Regulatory Allocations") hereof
shall be taken into account in computing subsequent allocations of Profits and
Losses pursuant to Section 9.1, so that the net amount of any items charged or
credited to Capital Accounts pursuant to Section 9.1 and the Regulatory
Allocations hereof and this Section 9.3 shall to the extent possible, be equal
to the net amount that would have been allocated to the Capital Account of each
Equity Owner pursuant to the provisions of this Article 9 if the special
allocations required by the Regulatory Allocations hereof had not occurred.
9.4 Distributions. Except as provided in Sections 8.3(c) (with respect
-------------
to liquidating Distributions), Section 10.5 with respect to the Put Right, and
Section 9.5 (with respect to limitations on Distributions), the Manager shall
Distribute Distributable Cash to the Equity Owners not less frequently than
quarterly as follows:
(a) Distributions made before the dissolution of the Company shall
be to the holders of the Common Units, Proportionately.
(b) Distributions made after the dissolution of the Company shall
be to the Equity Owners in accordance with their positive Capital Accounts,
provided, however, that all liquidating distributions shall be made first to the
Holders who hold Preferred Units at the time of dissolution, if any, until such
Holders have received a liquidating distribution equal to $1,000 per Preferred
Unit plus the Accretion Amount.
9.5 Limitation Upon Distributions. No Distribution shall be made if
-----------------------------
such Distribution would violate the Act.
27
9.6 Accounting Principles. For financial reporting purposes, the
---------------------
Company shall use accounting principles applied in accordance with generally
accepted accounting principles using the accrual method of accounting, unless
the Company is required to use a different method of accounting for federal
income tax purposes, in which case that method of accounting shall be the
Company's method of accounting.
9.7 Interest on and Return of Capital Contributions. No Member shall
-----------------------------------------------
be entitled to interest on its Capital Contribution or to return of its Capital
Contribution, except as otherwise specifically provided for herein.
9.8 Loans to Company. Nothing in this Agreement shall prevent any
----------------
Member from making secured or unsecured loans to the Company by agreement with
the Company.
9.9 Accounting Period. The Company's accounting period shall be the
-----------------
Fiscal Year.
9.10 Records and Reports. At the expense of the Company, the Manager
-------------------
shall maintain records and accounts of all operations and expenditures of the
Company as follows:
(a) At a minimum the Company shall keep at its principal place of
business the following records:
(1) A current list of the full name and last known business,
residence, or mailing address of each Equity Owner and Manager, both past
and present;
(2) A copy of the Certificate of Formation of the Company
and all amendments thereto, together with executed copies of any powers
of attorney pursuant to which any amendment has been executed;
(3) Copies of the Company's federal, state, and local income
tax returns and reports, if any, for the four (4) most recent Fiscal
Years;
(4) Copies of the Company's currently effective written
Agreement, copies of any writings permitted or required with respect to
an Equity Owner's obligation to contribute cash, property or services,
and copies of any financial statements of the Company for the three (3)
most recent Fiscal Years;
(5) Minutes of every annual, special meeting and court-
ordered meeting;
(6) Any written consents obtained from Members for actions
taken by Members without a meeting.
28
(b) The Company shall cause the preparation and distribution to
each Member of the following reports on the activities and financial position of
the Company, which reports shall be prepared in accordance with generally
accepted accounting principles consistently applied:
(1) Within 30 days after the end of each of the first three
quarters, (A) balance sheet as of the end of such quarter, and (B) a
detailed statement of income or loss both for the quarterly period just
ended and with respect to the second and third quarters, for the period
commencing with the first day of the Fiscal year and ending on the last
day of the respective quarter ("Year-To-Date).
(2) Within 60 days after the end of each Fiscal Year, (A) a
balance sheet as of the end of such Fiscal Year, and (B) a detailed
statement of income or loss for such Fiscal Year.
(3) The Company shall also provide audited financial
statements to each Member no later than 75 days after the end of each
Fiscal Year.
9.11 Returns and Other Elections.
---------------------------
(a) Subject to Section 9.11(b), the Manager shall cause the
preparation and timely filing of all tax returns required to be filed by the
Company pursuant to the Code and all other tax returns deemed necessary and
required in each jurisdiction in which the Company does business. Copies of
such returns, or pertinent information therefrom, shall be furnished to the
Equity Owners within a reasonable time after the end of the Fiscal Year.
(b) With respect to any income tax returns required to be filed by
the Company, the Manager shall provide Och-Ziff Partners Domestic and its
authorized representatives with copies of such completed tax returns and any
applicable work papers on or prior to the fifteenth day of the third month
following the close of the Company's taxable year, and Och-Ziff Partners
Domestic and its authorized representatives shall have the right to review such
tax returns prior to their filing. The Manager and Och-Ziff Partners Domestic
agree to consult and resolve in good faith any issues arising as a result of the
review of such tax returns by Och-Ziff Partners Domestic or its authorized
representatives and to mutually consent to their filing. If the Manager and Och-
Ziff Partners Domestic agree as to the contents of such returns, then the
Manager shall file such returns as soon as practicable thereafter. In the event
the parties are unable to resolve any dispute prior to the first day of the
fourth month following the close of the Company's taxable year, the parties
shall jointly select an independent accounting firm to resolve any issue in
dispute as promptly as possible. If such accounting firm is unable to make a
determination with respect to any disputed issue prior to the due date
(including extensions) for filing the tax returns in question, then the Manager
may file such tax returns on the due date (including extensions) therefor
29
without such determination having been made and without Och-Ziff Partners
Domestic's consent. Notwithstanding the filing of such tax returns, the
accounting firm mutually selected by the parties to resolve the dispute shall
make a determination with respect to any disputed issues, and the Company shall
file amended tax returns consistent with such determination if the determination
of the accounting firm is inconsistent with the manner in which such disputed
matter was reported on the tax return.
(c) All elections permitted to be made by the Company under federal
or state laws shall be made by the Manager in its sole discretion; provided,
however, that the Manager shall make any tax election requested by Members
owning a Majority Interest.
9.12 Tax Matters Partner.
-------------------
(a) Navigant is hereby designated the Tax Matters Partner ("TMP")
as defined in Section 6231(a)(7) of the Code. The TMP and the other Members
shall use their reasonable efforts to comply with the responsibilities outlined
in Sections 6221 through 6233 of the Code (including any Regulations promulgated
thereunder), and in doing so shall incur no liability to any other Member.
(b) Except as expressly authorized by this Agreement, the TMP shall
not make any decision or take any action without the prior authorization of
Members holding a Majority Interest.
(c) The TMP shall cause the Och-Ziff Partners to be treated as
"notice partners" within the meaning of Section 6231(a)(8) of the Code. The TMP
shall notify the Och-Ziff Partners regarding, and the Och-Ziff Partners shall
have the right to participate in, (i) any administrative or judicial proceeding
relating to the determination of partnership items at the Company level, and
(ii) any discussions with the Internal Revenue Service relating to any Member
related tax matters. In addition, the TMP shall provide the Och-Ziff Partners,
if they so request, with copies of notices, correspondence, work papers,
documents or such other relevant tax related information as such Member
reasonably may request. The TMP shall from time to time upon request of an Och-
Ziff Partner confer, and cause the Company accountants and tax attorneys to
confer, with such Och-Ziff Partner and its attorneys and accountants on any
matters relating to a Company tax item, return or election. The TMP and the
Och-Ziff Partners shall attempt in good faith to agree upon (i) the filing of
any amended income tax returns, (ii) any proposed extension of the statute of
limitations, (iii) the initiation and conduct of any administrative or judicial
contest of any disputed issue with the IRS and (iv) any proposed settlement or
compromise of any disputed issue.
(d) Subject to Section 9.12(c), the TMP shall not, except with the
prior approval of Members holding a Majority Interest, (i) initiate any action
or proceeding or file any pleading, (ii) compromise or settle any issue, (iii)
extend any statute of limitations, or (iv) take any action contemplated by
Sections 6222 through 6232 of the
30
Code. Notwithstanding the foregoing, the TMP shall not without the prior written
approval of the Och-Ziff Partners enter into a settlement agreement which binds
the Och-Ziff Partners pursuant to Section 6224(c)(3) of the Code. The Och-Ziff
Partners shall have the maximum rights permitted by law to elect not to be bound
by the TMP in any administrative or judicial matter and, at the request of the
Och-Ziff Partners, the TMP shall cooperate fully with the Och-Ziff Partners in
making any such election.
(e) An Och-Ziff Partner may engage legal counsel, certified public
accountants, or others in its own behalf at its sole cost and expense. The
provisions of this Section 9.13 shall survive the termination of the Company or
the termination of any Member's interest, and shall remain binding on the
Members for a period of time necessary to resolve with the Internal Revenue
Service any and all matters whether in an administrative or judicial proceeding
regarding the federal income taxation of the Company for any open tax year or
years.
9.13 Certain Allocations for Income Tax (But Not Book Capital Account)
-----------------------------------------------------------------
Purposes.
--------
(a) In accordance with Section 704(c)(1)(A) of the Code and Section
1.704-1(b)(2)(i)(iv) of the Regulations, if a Member contributes property with
an initial Gross Asset Value that differs from its adjusted basis at the time of
contribution, income, gain, loss and deductions with respect to the property
shall, solely for federal income tax purposes (and not for Capital Account
--------------------------------------
purposes), be allocated among the Equity Owners so as to take account of any
variation between the adjusted basis of such property to the Company and its
Gross Asset Value at the time of contribution pursuant to the traditional method
under Section 1.704-3(b) of the Regulations.
(b) All recapture of income tax deductions resulting from Sale or
disposition of Company property shall be allocated to the Equity Owners to whom
the deduction that gave rise to such recapture was allocated hereunder to the
extent that such Equity Owner is allocated any gain from the Sale or other
disposition of such property.
Article 10.
TRANSFERABILITY
10.1 General.
-------
(a) Except as otherwise specifically provided herein, no Equity
Owner shall have the right to Sell the Equity Owner's Ownership Interest.
(b) Subject to: (i)the Put Right (defined in Section 10.5), (ii)
Section 11.2, (iii) Section 11.4, and (iv) a Reorganization of the Company
pursuant to the terms of this Agreement, no Equity Owner shall have the right to
Sell that Equity Owner's Ownership Interest for a period of 24 months following
the Effective Date of this
31
Agreement without the unanimous written consent of all Members, which may be
unreasonably withheld.
(c) Each Equity Owner hereby acknowledges the reasonableness of
the restrictions on Sale of Ownership Interests imposed by this Agreement in
view of the Company purposes and the relationship of the Equity Owners.
Accordingly, the restrictions on Sale contained herein shall be specifically
enforceable.
(d) In the event that any Equity Owner pledges or otherwise
encumbers any of its Ownership Interest as security for repayment of a
liability, any such pledge or hypothecation shall be made pursuant to a pledge
or hypothecation agreement that requires the pledgee or secured party to be
bound by all the terms and conditions of this Article 10, and shall require the
prior unanimous written consent of all Members.
10.2 Right of First Refusal and Co-Sale.
----------------------------------
(a) Upon the expiration of the 24-month period described in
Section 10.1(b) above, subject to Sections 11.2 and 11.4, and provided that an
IPO has not occurred, an Equity Owner which desires to sell all or any portion
of its Ownership Interest to a third party purchaser other than a Member shall
obtain from such third party purchaser ("Third Party Purchaser") a bona fide
written offer to purchase such interest, stating the terms and conditions upon
which the purchase is to be made and the consideration offered therefor ("Third
Party Offer"). The Selling Equity Owner shall give written notification ("Notice
of Sale") to the Company and the other Equity Owners who are Members (the
"Remaining Members"), by certified mail or personal delivery, of its intention
to so Sell such Ownership Interest (the "Offered Interest"). The Notice of Sale
shall be accompanied by a copy of the Third Party Offer. If any portion of the
purchase price offered by such third party purchaser consists of consideration
other than cash or a promissory note ("Non-cash Consideration"), then: the
Notice of Sale also shall be accompanied by a good faith estimate by the Selling
Equity Owner of the fair market value of the Non-cash Consideration ("Purchase
Price").
(b) The Remaining Members shall have the option ("Buy Option") to
purchase all, but not less than all, of the Offered Interest, on a basis pro
rata to the Sharing Ratios of the Remaining Members exercising such option
pursuant to this Section 10.2(b). The Buy Option may be exercised by one or more
of the Remaining Members by giving written notification ("Buy Notice") to the
Selling Equity Owner within thirty (30) days after receiving the Notice of Sale
(the "Option Period"). Each Remaining Member who timely gives a Buy Notice
("Buying Member") shall purchase such portion of the Offered Interest which is
equal to the relative Sharing Ratios of all of the Buying Members. Subject to
Section 10.2(d), if there are no Buying Members, the Buy Option shall terminate
and at any time within ninety (90) days following the expiration of the Option
Period, the Selling Equity Owner shall be entitled to consummate the Sale of the
Offered Interest to the Third Party Purchaser or one or more of its Affiliates
upon terms no less favorable than are set forth in the Third Party Offer.
32
(c) If there is at least one Buying Member (i) the Buying Members
shall designate the time, date and place of closing, provided that the date of
closing shall be within thirty (30) days after the receipt of the Buy Notice,
and (ii) at the closing, the Buying Members shall purchase, and the Selling
Equity Owner shall Sell, the Offered Interest for an amount equal to the lesser
of (i) the Purchase Price, or (ii) the amount of the Selling Equity Owner's
Capital Account plus a six percent (6%) annualized rate of return accruing on
the excess of any Capital Contributions (including the agreed value of any
capital contributions) over the amount of any distributions to such Equity Owner
pursuant to Section 9.4(a) in the case of Common Units proposed to be sold and
pursuant to Section 9.4(b) in the case of Preferred Units proposed to be sold,
calculated from the dates of such respective Capital Contributions and
distributions. The Buy Option shall be exercised in accordance with such other
terms and conditions set forth in the Third Party Offer.
(d) Co-Sale Right. To the extent that the Buy Option is not
-------------
exercised by the Remaining Members, each Remaining Member shall have the right
(the "Co-Sale Right"), exercisable upon written notice to the Company within
fifteen (15) business days after the expiration of the Option Period, beginning
with the day following the expiration thereof, to participate in such Selling
Equity Owner's sale of Offered Interest pursuant to the specific terms and
conditions of such Notice of Sale. To the extent a Remaining Member exercises
such Co-Sale Right in accordance with the terms and conditions set forth below,
the Offered Interest which Selling Equity Owner may sell pursuant to such Notice
of Sale shall be correspondingly reduced. The Co-Sale Right of each Remaining
Member shall be subject to the following terms and conditions.
(1) Calculation. Each Remaining Member may participate in
-----------
the sale of the Offered Interest on a basis pro rata to the Sharing Ratios
of the Selling Equity Owner and the Remaining Members exercising such Co-
Sale Right.
(2) Delivery of Certificates. Each Remaining Member
------------------------
participating in the Co-Sale Right may effect its participation in the sale
by delivering to the Selling Equity Owner for transfer to the Third Party
Purchaser one or more certificates, properly endorsed for transfer, which
represent the interests, which such Remaining Member elects to sell.
(e) A Sale of an Offered Interest pursuant to this Section 10.2,
shall be subject to Sections 10.3 and 10.4.
10.3 Transferee Not Member in Absence of Consent.
-------------------------------------------
(a) Except as provided in this Section 10.3(a) and Section 10.6,
if Members holding Two-Thirds of the Voting Interests (including the Voting
Interest of the Member proposing to Sell its Ownership Interest) do not approve
by written consent the proposed Sale of the Selling Equity Owner's Ownership
Interest to a transferee which is not a Member immediately prior to the Sale,
then the proposed transferee shall have no right to participate in the
management of the business and affairs of the
33
Company or to become a Member. Such transferee shall be merely an Economic
Interest Owner. No Sale of a Member's Membership Interest (including any Sale of
the Economic Interest or any other Sale which has not been approved as provided
herein) shall be effective unless and until written notice (including the name
and address of the proposed transferee and the date of such Sale) has been
provided to the Company and the non-transferring Members.
(b) Upon and contemporaneously with any Sale of a Member's
Ownership Interest, the Selling Equity Owner shall cease to have any residual
rights associated with the Ownership Interest transferred to the transferee.
10.4 Additional Conditions to Recognition of Transferee.
--------------------------------------------------
(a) If a Selling Equity Owner Sells an Ownership Interest to a
Person who is not already a Member, as a condition to recognizing one or more of
the effectiveness and binding nature of such Sale (subject to Section 10.3
above), the remaining Members may require the Transferring Equity Owner and the
proposed successor-in-interest to execute, acknowledge and deliver to the
Manager such instruments of transfer, assignment and assumption and such other
certificates, representations and documents, and to perform all such other acts
which the Manager may deem necessary or desirable to accomplish any one or more
of the following:
(1) constitute such successor-in-interest as an Equity
Owner;
(2) confirm that the proposed successor-in-interest as an
Economic Interest Owner, or to be admitted as a Member, has accepted,
assumed and agreed to be subject and bound by all of the terms, obligations
and conditions of this Agreement, as the same may have been further amended
(whether such Person is to be admitted as a new Member or will merely be an
Economic Interest Owner);
(3) preserve the Company after the completion of such Sale,
under the laws of each jurisdiction in which the Company is qualified,
organized or does business;
(4) maintain the status of the Company as a partnership for
federal tax purposes; and
(5) assure compliance with any applicable state and federal
laws, including securities laws and regulations.
(b) Any Sale of an Ownership Interest and admission of a Member in
compliance with this Article 10 shall be deemed effective as of the last day of
the calendar month in which the remaining Members' consent thereto was given.
The Selling Equity Owner hereby indemnifies the Company and the remaining
Members against any and all loss, damage, or expense (including, without
limitation, tax liabilities or loss of
34
tax benefits) arising directly or indirectly as a result of any Sale or
purported Sale in violation of this Article 10.
10.5 Put Rights. The holders of the Preferred Units (the "Holders")
----------
shall have the right to require the Company to repurchase all of the Preferred
Units (the "Put Right") upon the occurrence of any of the following and subject
to the conditions set forth below:
(a) Subject to Section 10.5(g), if an IPO has not occurred within
24 months after the Effective Date then the Holders shall have the right to
exercise the Put Right at an aggregate purchase price equal to the remainder of:
---------
(x) either (i) $14,062,500 ($1,125 per Preferred Unit) in the event the Put
Right is exercised within 90 days after the second anniversary of the Effective
Date, or (ii) $14,937,500 ($1195 per Unit) in the event that the Put Right is
exercised within 90 days after the third anniversary of the Effective date,
minus (y) the aggregate amount of any distributions made pursuant to Section
-----
9.4(b) with respect to the Preferred Units. Such Put Right may be exercised
only during the 90-day period beginning on each of the second or third
anniversary of the Effective Date.
(b) If NII is in default of (x) the Consolidated Leverage Ratio in
Section 7.9(a) of the Amended and Restated Credit Agreement, dated August 6,
1999, among NII, the Lenders named therein (the "Lenders") and others (the
"Credit Agreement") or (y) the Consolidated Net Worth Coverage in Section 7.9(c)
of the Credit Agreement, then the Holders shall have the right to exercise the
Put Right, unless the Lenders have waived the default. Within 45 days after the
end of each of its fiscal quarters, NII shall provide the Holders with a
certificate of a daily authorized officer stating that NII is in compliance with
Sections 7.9(a) and 7.9(c) of the Credit Agreement, or, if not, a description of
the default. Such Put Right may be exercised at any time during the 30 day
period following the Holders' receipt of an officer's certificate stating that
NII is in default.
(c) Upon a Change of Control of NII, the Holders may exercise the
Put Right at any time during the 30 day period following the effective date of
the Change of Control; provided that the Holders may not exercise the Put Right
if immediately following the Change of Control, the Holders, their Affiliates or
any Persons acting in concert with the Holders and/or their Affiliates own (x)
50% or more of the Voting Power of NII or (y) all or substantially all of the
assets of NII.
(d) Upon the purchase by NII (in public or private transactions)
of 25% or more of its outstanding common stock within a 60 day period (the "25%
Purchase"), the Holders shall have the right to exercise the Put Right at any
time during the 30-day period following the 25% Purchase.
35
(e) The following terms and conditions shall apply to the exercise
of the Put Right:
(1) The Redemption Price for the Preferred Units purchased
pursuant to Sections 10.5(b), (c) and (d) shall equal the remainder of (x)
$1,000 per Preferred Unit, plus the Accretion Amount to the date the Put
Option is exercised, minus (y) the aggregate amount of any distribution
made pursuant to Section 9.4(b) with respect to the Preferred Units;
(2) Prior to the expiration of any Put Period, the Holders
shall give notice to the Company of their intention to exercise the Put
Right (the "Put Notice");
(3) The Company shall pay the Redemption Price (in cash or
readily available funds) to the Holders within 30 days of receiving the Put
Notice (the "Put Closing Date"); and
(4) On the Put Closing Date, the Holders shall transfer the
Preferred Units to the Company free and clear of all liens and encumbrances
whatsoever, subject to the terms of this Agreement.
(f) In the event that both:
(i) The Holders timely exercise the Put Right in
accordance with this Section 10.5, and are ready, willing and able to
transfer the Preferred Units to the Company free and clear of all liens and
encumbrances whatsoever, subject to the terms of this Agreement, and
(ii) the Company fails to timely purchase all or any
portion of the Preferred Units in accordance with this Section 10.5 or is
for any reason unable to timely pay the Redemption Price,
then NII shall purchase from the Holders, and the Holders shall transfer to NII
(free and clear of all liens and encumbrances), any of such Preferred Units
which are not purchased by the Company, no later than 35 days after the date of
the Put Notice, at the Redemption Price per Preferred Unit. In such event, NII
shall thereafter have the option at any time to require the Company to purchase
the Preferred Units for an amount equal to the Redemption Price per Preferred
Unit, plus eight percent (8%) per annum from the date that NII purchased the
Preferred Units from the Holders.
(g) Notwithstanding anything to the contrary in this Agreement,
the Company may not undergo a Reorganization unless it has given at least 30
days advance written notice of such Reorganization to the Holders, if any. At
any time after the Effective Date and prior to the expiration of 30 days after
written notice from Navigant to the Holders that the Company will undergo a
Reorganization (the "Preferred-to-Common Conversion Period"), the Holders may
exercise the Put Right in the manner
36
described in Section 10.5(a) and Section 10.5(f). If the Holders do not exercise
the Put Right within such Preferred-to-Common Conversion Period, then in
connection with the Reorganization, the Preferred Units shall be canceled and
the Holders shall receive in exchange therefor, that number of common shares in
the Successor Corporation which is equal to the number of common shares in the
Successor Corporation that the Holders would have received had they converted
their Preferred Units to Common Units pursuant to Section 11.3, immediately
prior to the Reorganization.
(h) If the Company is converted to a corporation then at the time
of the conversion, the Company shall enter into a Registration Agreement in
substantially the form of Exhibit 10.5(h).
(i) NII shall give notice ("Sale Notice") to the Holders prior to
a NII Sale. If, and only if, within 15 calendar days after the Sale Notice, the
Holders give notice to NII of the Holders' decision to exercise their rights
under this Section 10.5(i) ("Exit Notice"), then (x) NII shall pay to Holders an
amount equal to the Preferred Sale Fee at the closing of the NII Sale, and
Holders shall transfer to NII 12,500 Preferred Units free and clear of all liens
and encumbrances; and (y) NII shall pay to the Och-Ziff Partners an amount equal
to $2,500,000, and the Och-Ziff Partners shall transfer to NII, free and clear
of all liens and encumbrances, all 125,000 Common Units issued to the Och-Ziff
Partners on the Effective Date together with all of the warrants issued to the
Och-Ziff Partners pursuant to the Warrant Agreement set forth in Exhibit 6.7 and
any Common Units acquired pursuant to the exercise of any warrants pursuant to
the Warrant Agreement.
10.6 Sales to Affiliates. An Equity Owner may Sell all or any portion
-------------------
of its Membership Interest to an Affiliate which:
(1) is an Entity which directly or indirectly owns not less
than eighty percent (80%) of the voting interests in the Selling Equity
Owner,
(2) is an Entity in which the Selling Equity Owner directly
or indirectly owns not less than eighty percent (80%) of the voting
interests, or
(3) is an Entity in which not less than 80% of the voting
interests are directly or indirectly held by an Entity which directly or
indirectly owns not less than 80% of the Selling Equity Owner,
and such Sale shall not be subject to the restrictions on Sale contained in
Section 10.1, Section 10.2, Section 10.3, or Section 10.5, provided, however,
that the transferee shall be subject to all of the restrictions on Sale
contained in this Article 10 to the same extent as was the Selling Equity Owner
prior to such Sale. A transferee pursuant to this Section 10.6 shall
automatically be admitted as a Member upon compliance with Section 10.4.
37
10.7 Right of First Offer.
--------------------
(a) Upon approval by the Manager to offer to issue additional
Ownership Interests in the Company, the Manager shall provide the holders of the
Preferred Units with notice of the proposed offer and issuance which notice
shall state:
(1) the aggregate number of Ownership Interests to be
offered and the designation of such Interests (the "Offered Interests"),
and the purchase price for the Offered Interests;
(2) the other terms and conditions upon which the Company is
offering the Offered Interests;
(3) the holders of the Preferred Units shall have the right
to purchase any or all of the Offered Interests; and
(4) the date the purchase price for the Offered Interests is
due and the date the Offered Interests will be issued, which date shall not
be less than 30 days after this notice is delivered to the holders of the
Preferred Units.
(b) No later than 10 business days after the notices have been
given by the Manager pursuant to Section 10.7(a), each of the holders of the
Preferred Units shall notify the Manager whether it elects to acquire any or all
of the Offered Interests. The Manager shall promptly notify all holders of
Preferred Units that have elected to purchase Offered Interests (the
"Participating Members") of the total amount of Offered Interests that the
holders of Preferred Units have elected to purchase and the number of Offered
Interests that the holders of the Preferred Units have not elected to purchase.
Within five business days after that notice is given, each of the Participating
Members shall notify the Manager whether it elects to purchase all or any
portion of the remaining Offered Interests. If more than one Participating
Member elects to purchase the remainder of such Offered Interests, the remainder
of the Offered Interests shall be allocated among such Participating Members
upon such basis as they may agree or, in the absence of an agreement, in
proportion to the number of Units owned by such Participating Member relative to
such other Participating Members.
(c) To the extent that the Participating Members do not elect to
acquire all of the Offered Interest, the Manager may offer the remainder of the
Offered Interests to third parties on terms and conditions that are not more
favorable to such third party than those set forth in the notice provided in
Section 10.7(a) for a period of six months. If the Manager determines that it is
necessary to change any of the terms and conditions of the offering of the
remainder of the Offered Interests in a way that is materially more favorable to
prospective purchasers (e.g., a purchase price reduction of five percent or
----
more), then the Manager shall first re-offer the remainder of the Offered
Interests to the
38
holders of the Preferred Interests in accordance with the preceding terms of
this Section 10.7.
(d) This Section 10.7 shall not apply to any Units issued: (i)
pursuant to the exercise of a warrant pursuant to the Warrant Agreement
attached as Exhibit 6.7 or (ii) pursuant to the exercise of an option or
conversion privilege described in the Section 11.2, 11.3 or 11.4.
Article 11.
ISSUANCE OF MEMBERSHIP INTERESTS; OPTIONS; CONVERSION RIGHTS
11.1 Issuance of Additional Membership Interests to New Members; Right
-----------------------------------------------------------------
of First Offer.
---------------
(a) Subject to Section 5.4 and Section 11.4, from the date of the
formation of the Company, any Person may become a Member of the Company and
receive from the Company Common Units or Preferred Units upon such terms
approved by Members holding not less than 90% of the Voting Interests. Except
as expressly provided otherwise in Section 11.4, any issuance of Common Units or
Preferred Units, as the case may be, shall Proportionately reduce the Common
Units or Preferred Units, as appropriate, held by all Equity Owners.
11.2 Navigant Options.
----------------
(a) Navigant is hereby granted options ("Navigant Options") to
purchase for an exercise price of ten dollars ($10) per Unit, 111,111 Common
Units, exercisable at any time after the Effective Date upon fifteen (15) days
notice to the other Member(s). Upon exercise of any Navigant Options pursuant
to this Section 11.2, the Gross Asset Values of the Company assets shall be
adjusted to their respective fair market values as determined by the Manager in
its reasonable discretion. Any Profit or Loss arising from such adjustment
shall be allocated to the Common Units in a manner to cause the capital account
balance attributable to each Common Unit to be Proportionate to, or as close as
possible to Proportionate, to each other Common Unit (i.e., determined without
regard to the portion of an Equity Owner's Capital Account which is determined
with reference to such Equity Owner's Preferred Units). Navigant may transfer
or exchange all or any portion of the Navigant Options granted pursuant to this
Section 11.2 to any Person who is an employee or independent contractor of
either (i) NII's Affiliates, or (ii) NII on or after the Effective Date.
(b) Navigant may transfer or exchange the Navigant Options or the
Units acquired upon exercise of the Navigant Options to any Affiliate of NII, or
to any employee or independent contractor of NII or any of its Affiliates
("Navigant Service Performer"). Navigant may purchase from a Navigant Service
Performer (or his or her successor) a Navigant Option or Common Units acquired
upon exercise of a Navigant
39
Option without regard to any restrictions on transfer contained in Article 10 of
this Agreement. Any Navigant Options which are transferred to Navigant Service
Performers shall be reflected in a Unit Option Agreement substantially in the
form attached as Exhibit 11.2(b). Persons who acquire Common Units pursuant to
the exercise of a Navigant Option shall execute a Unit Restriction Agreement in
substantially the form attached as Exhibit A to the Unit Option Agreement
attached as Exhibit 11.2(b).
11.3 Conversion of Preferred Units to Common Units. At the election of
---------------------------------------------
the Holders upon ten (10) days advance written notice to the Company, at any
time prior to the earlier of: (i) the expiration of the Preferred-to-Common
Conversion Period (defined in Section 10.5(c))or (ii) the dissolution of the
Company, each Preferred Unit may be converted into that number of Common Units
which is equal to the sum of the following (x) 10, plus (y) the Accretion Amount
with respect to each such Preferred Unit divided by 125. Upon the conversion of
the Preferred Units to Common Units, the Gross Asset Values of the Company
assets shall be adjusted to their respective fair market values as determined by
the Manager in its reasonable discretion. Any Profit or Loss arising from such
adjustment shall be allocated to the Common Units in a manner to cause the
capital account balance attributable to each Common Unit to be Proportionate to,
or as close as possible to Proportionate, to each other Common Unit (i.e.,
----
determined without regard to the portion of an Equity Owner's Capital Account
which is determined with reference to such Equity Owner's Preferred Units).
11.4 Issuance of Common Units (and Options to Acquire Common Units) to
-----------------------------------------------------------------
Employees; Dilution.
-------------------
(a) Navigant may cause the Company to issue up to 115,000 Common
Units (or options to purchase Common Units) to any one or more Company employees
or independent contractors, or to the employees or independent contractors of
any Entity in which not less than 80% of the interests in profits and losses are
directly or indirectly owned by Company ("Company Subsidiary"), under the terms
of any agreement between the Company and/or Company Subsidiary and an employee
or pursuant to any employee benefit plan of the Company whether qualified or
nonqualified (such agreement or plan shall be hereafter collectively referred to
as a "Plan") which is approved by the Manager. Common Units issued pursuant to
Section 11.2 shall not be considered Units issued pursuant to this Section 11.4.
(b) Except as provided in Section 11.4(c), in the event that the
Company issues Common Units pursuant to Section 11.4(a), including the exercise
of options issued pursuant to Section 11.4(a):
(1) The number of outstanding Common Units owned by the
Och-Ziff Partners immediately prior to such issuance shall not be reduced
as a result of such issuance, and
(2) The number of Common Units owned by Navigant shall be
reduced by the number of Common Units issued pursuant to Section 11.4(a).
40
Units described in this Section 11.4(b) shall be referred to as Navigant
Dilutive Units.
(c) The Common Units of all Equity Owners and the holders of
options to acquire Common Units will be subject to dilution, Proportionately, in
the event that Common Units (or options to acquire Common Units) are issued to
employees or independent contractors of businesses or Entities acquired directly
or indirectly by the Company after the Effective Date. Units described in this
Section 11.4(c) shall be referred to as "Proportionately Dilutive Units").
(d) If any of the Navigant Dilutive Units or any options to acquire
Navigant Dilutive Units are forfeited by one or more holders (or their
successors), then notwithstanding anything in this Agreement, such Navigant
Dilutive Units or options to acquire Navigant Dilutive Units shall be forfeited
to Navigant (and not to the Company). Navigant may purchase from a Navigant
Service Performer (or his or her successor) Navigant Dilutive Units or any
options to acquire Navigant Dilutive Units without regard to any restrictions on
transfer contained in Article 10 of this Agreement. Notwithstanding anything to
the contrary in Section 10.2 and 10.3, Navigant Dilutive Units shall be subject
to transfer restrictions contain in a Unit Restriction Agreement substantially
in the form attached as Exhibit 11.4(d).
(e) If any Proportionately Dilutive Units or any options to acquire
Proportionately Dilutive Units are forfeited by one or more holders (or their
successors), then notwithstanding anything in this Agreement, such
Proportionately Dilutive Units or options to acquire Proportionately Dilutive
Units shall be forfeited to the Company (and not directly to a Member).
Notwithstanding anything to the contrary in Section 10.2 and 10.3 of this
Agreement, Proportionately Dilutive Units shall be subject to transfer
restrictions contained in a Unit Restriction Agreement substantially in the form
attached as Exhibit 11.4(e).
(f) Upon issuance of any Units pursuant to this Section 11.4, the
Gross Asset Values of the Company assets shall be adjusted to their respective
fair market values as determined by the Manager in its reasonable discretion.
Any Profit or Loss arising from such adjustment shall be allocated to the Common
Units in a manner to cause the capital account balance attributable to each
Common Unit to be Proportionate to, or as close as possible to Proportionate, to
each other Common Unit (i.e., determined without regard to the portion of an
Equity Owner's Capital Account which is determined with reference to such Equity
Owner's Preferred Units).
11.5 Conversion of Common Units Upon Reorganization. Notwithstanding
----------------------------------------------
anything to the contrary in this Agreement: (i) in the event that the Company
undergoes a Reorganization ("Successor Corporation"), each Common Unit shall be
converted to the same number of common shares in the resulting corporation
("Successor Corporation") as is each and every other Common Unit, and (ii) each
option to acquire Common Units in the Company, shall, if not exercised prior to
such Reorganization, be converted to an option to acquire the same number of
common shares of the Successor
41
Corporation that would have been issued to such option holder if such option had
been converted to Common Units immediately prior to the Reorganization, and the
exercise price of such options shall be adjusted accordingly to reflect the
Reorganization.
11.6 Part Year Allocations With Respect to New Members. No new Equity
-------------------------------------------------
Owners shall be entitled to any retroactive allocation of losses, income or
expense deductions incurred by the Company. In accordance with the provisions
of Section 706(d) of the Code and the Regulations promulgated thereunder, the
Manager may, at its option, at the time a Member is admitted, close the Company
books (as though the Company's Fiscal Year had ended) or make pro rata
allocations of loss, income and expense deductions to a new Equity Owner for
that portion of the Company's Fiscal Year in which an Equity Owner became an
Equity Owner.
Article 12.
DISSOLUTION AND TERMINATION
12.1 Dissolution.
-----------
(a) The Company shall be dissolved only upon the occurrence of any
of the following events:
(1) Prior to the third anniversary of the Effective Date, by
the unanimous written agreement of Members, provided, however, that any
dissolution which is caused by a Reorganization may be approved by
Members holding a Two-Thirds Interest;
(2) Subsequent to the third anniversary of the Effective
Date, by one or more Members holding a Two-Thirds Interest.
Notwithstanding anything to the contrary in the Act, the Company shall not be
dissolved upon the death, retirement, resignation, expulsion, bankruptcy or
dissolution of an Equity Owner.
(b) As soon as possible following the occurrence of any of the
events specified in Section 12.1(a) effecting the dissolution of the Company,
the appropriate representative of the Company shall execute all documents
required by the Act at the time of dissolution and file or record such
statements with the appropriate officials.
12.2 Effect of Dissolution. Upon dissolution, the Company shall cease
---------------------
to carry on its business, except insofar as may be necessary for the winding up
of its business, but its separate existence shall continue until winding up and
Distribution is completed.
12.3 Winding Up, Liquidation and Distribution of Assets.
--------------------------------------------------
(a) Upon dissolution, an accounting shall be made by the Company's
Manager of the accounts of the Company and of the Company's assets, liabilities
and
42
operations, from the date of the last previous accounting until the date of
dissolution. The Manager shall immediately proceed to wind up the affairs of the
Company.
(b) If the Company is dissolved, other than a dissolution which is
caused by a Reorganization, and its affairs are to be wound up, the Manager
shall:
(1) Sell or otherwise liquidate all of the Company's assets
as promptly as practicable (except to the extent that particular assets
are to be distributed to Members as provided in (4) below and except to
the extent that the Manager may determine to Distribute in kind any
assets to one or more Equity Owners);
(2) Allocate any Profit or Loss resulting from such Sales to
the Equity Owners' Capital Accounts in accordance with Article 9 hereof,
provided however, that any such Profit or Loss (including profit or loss
-------- -------
pursuant to Section 12.3(b)(5) below), shall first be allocated to the
Equity Owners so as to cause the Capital Account of each Equity Owner
(after taking into account any adjustment pursuant to this Agreement in
connection with any redemption and/or sale of the Preferred Units
pursuant to Section 10.5) to be Proportionate to the Capital Account of
each other Equity Owner on the basis of the number of Common Units held
by each respective Equity Owner;
(3) Discharge all liabilities of the Company, including
liabilities to Equity Owners who are also creditors, to the extent
otherwise permitted by law, other than liabilities to Equity Owners for
Distributions and the return of capital, and establish such Reserves as
may be reasonably necessary to provide for contingent liabilities of the
Company (for purposes of determining the Capital Accounts of the Equity
Owners, the amounts of such Reserves shall be deemed to be an expense of
the Company);
(4) Subject to Section 9.4(b), Distribute the remaining
assets to the Equity Owners in accordance with their positive Capital
Account balances:
(i) first, distribute to each of the Initial Members
an undivided one-half interest, or, pursuant to subsection (c) below,
distribute to Navigant the entire interest, as applicable, in all
Intellectual Property Rights of the Company. NII and its Affiliates, and
each Initial Member, as applicable, shall be entitled to use such
Intellectual Property distributed pursuant to this subsection (i) in any
manner without notice or accounting to the other;
(ii) second, distribute in kind any other assets, if
any, which the Manager determines are to be distributed to Equity Owners.
(5) If any assets of the Company are to be distributed in
kind, the net fair market value of such assets as of the date of
dissolution shall be determined by an independent appraiser selected by
the Manager, or by
43
Agreement of the Members holding not less than 90 percent of the Voting
Interests. Such assets shall be deemed to have been sold as of the date
of dissolution for their fair market value, and the Capital Accounts of
the Equity Owners shall be adjusted pursuant to the provisions of Article
9 and Section 8.3 of this Agreement to reflect such deemed Sale; and
(6) The positive balance (if any) of each Equity Owner's
Capital Account (as determined after taking into account all Capital
Account adjustments for the Company's Fiscal Year during which the
liquidation occurs) shall be Distributed to the Equity Owners, either in
cash or in kind, as determined by the Manager, with any assets
Distributed in kind being valued for this purpose at their fair market
value. Any such Distributions to the Equity Owners in respect of their
Capital Accounts shall be made in accordance with the time requirements
set forth in Section 1.704-1(b)(2)(ii)(b)(2) of the Regulations.
(7) Any Intellectual Property Rights of a Member or its
Affiliates immediately prior to dissolution or termination of the Company
("Member IP") shall be retained by the Member and any licenses or other
rights granted to the Company with respect to such Member IP shall
terminate at the time the Company is terminated or dissolved.
(c) Upon dissolution of the Company, other than a dissolution which
is caused by a Reorganization, Navigant shall, at Navigant's option, have the
first right to require the Company to transfer solely to Navigant (or its
designee) any or all Intellectual Property Rights of the Company (other than
Member IP, which shall be governed exclusively by subsection (b)(7) above) in
consideration either for the payment by Navigant to the Company of an amount of
cash equal to the fair market value of such Intellectual Property Rights
(determined by a mutual agreement of the Members or if they cannot agree, by
independent appraisal) or for a reduction in Navigant's Capital Account in an
amount equal to such fair market value. If Navigant does not exercise its right
to acquire any Intellectual Property Rights of the Company, then each Initial
Member shall receive an undivided one-half interest in such Intellectual
Property Rights as set forth in subsection (b)(4)(i) above. The cost of any
appraisal(s) shall be borne by the Company.
(d) Notwithstanding anything to the contrary in this Agreement,
upon a liquidation within the meaning of Section 1.704-1(b)(2)(ii)(g) of the
Regulations, if any Equity Owner has a Deficit Capital Account (after giving
effect to all contributions, Distributions, allocations and other Capital
Account adjustments for all Fiscal Years, including the year during which such
liquidation occurs), such Equity Owner shall have no obligation to make any
Capital Contribution, and the negative balance of such Member's Capital Account
shall not be considered a debt owed by such Equity Owner to the Company or to
any other Person for any purpose whatsoever.
(e) Upon completion of the winding up, liquidation and
Distribution of the assets, the Company shall be deemed terminated.
44
(f) The Manager shall comply with any applicable requirements of
applicable law pertaining to the winding up of the affairs of the Company and
the final Distribution of its assets.
12.4 Filing or Recording Statements. Upon the conclusion of winding up,
------------------------------
the appropriate representative of the Company shall execute all documents
required by the Act at the time of completion of winding up and file or record
such statements with the appropriate officials.
12.5 Return of Contribution Nonrecourse to Other Equity Owners. Except
---------------------------------------------------------
as provided by law and Subject to Section 10.5, upon dissolution, each Equity
Owner shall look solely to the assets of the Company for the return of its
Capital Contribution. If the Company property remaining after the payment or
discharge of the debts and liabilities of the Company is insufficient to return
the cash contribution of one or more Equity Owners, such Equity Owners shall
have no recourse against any other Equity Owner.
Article 13.
MISCELLANEOUS PROVISIONS
13.1 Notices. Any notice, demand, or communication required or
-------
permitted to be given by any provision of this Agreement shall be deemed to have
been sufficiently given or served if sent by telecopy or facsimile transmission,
delivered by messenger or overnight courier, or mailed, certified first class
mail, postage prepaid, return receipt requested, and addressed or sent to the
Equity Owner's and/or Company's address, as set forth on Exhibit 13.1. Such
notice shall be effective: (a) if delivered by messenger or by overnight
courier, upon actual receipt (or if the date of actual receipt is not a business
day, upon the next business day); (b) if sent by telecopy or facsimile
transmission, upon confirmation of receipt (or if the date of such confirmation
of receipt is not a business day, upon the next business day); or (c) if mailed,
upon the earlier of three (3) business days after deposit in the mail and the
delivery as shown by return receipt therefor. Any Equity Owner or the Company
may change its address by giving notice in writing to the Company and the other
Equity Owners of its new address.
13.2 Books of Account and Records. Proper and complete records and
----------------------------
books of account shall be kept or shall be caused to be kept by the Manager, in
which shall be entered fully and accurately all transactions and other matters
relating to the Company's business in such detail and completeness as is
customary and usual for businesses of the type engaged in by the Company. Such
books and records shall be maintained as provided in Section 9.10. The books
and records shall at all times be maintained at the principal executive office
of the Company and shall be open to the reasonable inspection and examination of
the Equity Owners or their duly authorized representatives during reasonable
business hours.
13.3 Application of State Law. This Agreement, and the application and
------------------------
interpretation hereof, shall be governed exclusively by its terms and by the
laws of the State, and specifically the Act.
45
13.4 Waiver of Action for Partition. Each Equity Owner irrevocably
------------------------------
waives during the term of the Company any right that it may have to maintain any
action for partition with respect to the Company Property.
13.5 Amendments. This Agreement may be amended only with the written
----------
agreement of Members holding not less than ninety percent (90%) of the Voting
Interests. No amendment which has been agreed to in accordance with the
preceding sentence shall be effective to the extent that such amendment has a
Material Adverse Effect upon one or more Equity Owners who did not agree in
writing to such amendment. For purposes of the preceding sentence, "Material
Adverse Effect" shall mean any modification of the relative rights to
Distributions by the Company (including allocations of Profits and Losses which
are reflected in the Capital Accounts). Without limiting the generality of the
foregoing: an amendment which has a proportionate effect on all Equity Owners
(or in the case of a redemption of Ownership Interests or issuance of additional
Ownership Interests, an amendment which has a proportionate effect on all Equity
Owners immediately after such redemption or issuance) with respect to their
rights to Distributions shall be deemed to not have a Material Adverse Effect on
Equity Owners who do not agree in writing to such amendment. Notwithstanding
the foregoing provisions of this Section 13.5, no amendment shall be made to a
provision herein which requires the vote, approval or consent of the Members
holding more than ninety percent (90%) of the Voting Interests, unless Members
holding such greater Voting Interests approve of such amendment.
13.6 Execution of Additional Instruments. Each Equity Owner hereby
-----------------------------------
agrees to execute such other and further statements of interest and holdings,
designations, powers of attorney and other instruments necessary to comply with
any laws, rules or regulations.
13.7 Construction. Whenever the singular number is used in this
------------
Agreement and when required by the context, the same shall include the plural
and vice versa, and the masculine gender shall include the feminine and neuter
genders and vice versa.
13.8 Effect of Inconsistencies with the Act. It is the express
--------------------------------------
intention of the Equity Owners and the Company that this Agreement shall be the
sole source of agreement among them, and, except to the extent that a provision
of this Agreement expressly incorporates federal income tax rules by reference
to sections of the Code or Regulations or is expressly prohibited or ineffective
under the Act, this Agreement shall govern, even when inconsistent with, or
different than, the provisions of the Act or any other law or rule. In the event
that the Act is subsequently amended or interpreted in such a way to make valid
any provision of this Agreement that was formerly invalid, such provision shall
be considered to be valid from the effective date of such interpretation or
amendment. The Members and the Company hereby agree that the duties and
obligations imposed on the Members as such shall be those set forth in this
Agreement, which is intended to govern the relationship among the Company and
the Equity Owners, notwithstanding any provision of the Act or common law to the
contrary.
46
13.9 Waivers. The failure of any party to seek redress for violation
-------
of or to insist upon the strict performance of any covenant or condition of this
Agreement shall not prevent a subsequent act, which would have originally
constituted a violation, from having the effect of an original violation.
13.10 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 the right to use any or all other remedies.
Said rights and remedies are given in addition to any other rights the parties
may have by law, statute, ordinance or otherwise.
13.11 Attorneys' Fees. Should the Company or any party to this
---------------
Agreement reasonably retain counsel for the purpose of enforcing or preventing
breach of any provision of this Agreement, including but not limited to
instituting any action or proceeding to enforce any provision of this Agreement,
for damages by reason of any alleged breach of any provision of this Agreement,
for damages by reason of any alleged breach of any provision of this Agreement,
for a declaration of such party's rights or obligations under this Agreement or
for any other judicial remedy, then, if the matter settled by judicial
determination or arbitration, the prevailing party (whether at trial, on appeal,
or arbitration) shall be entitled, in addition to such other relief as may be
granted, to be reimbursed by the losing party for all costs and expenses
incurred, including, but not limited to, reasonable attorneys' fees and costs
for services rendered to the prevailing party.
13.12 Severability. If any provision of this Agreement or the
------------
application thereof to any person or circumstance shall be invalid, illegal or
unenforceable to any extent, the remainder of this Agreement and the application
thereof shall not be affected and shall be enforceable to the fullest extent
permitted by law. Without limiting the generality of the foregoing sentence, to
the extent that any provision of this Agreement is prohibited or ineffective
under the Act or common law, this Agreement shall be considered amended to the
smallest degree possible in order to make the Agreement effective under the Act
or common law.
13.13 Heirs, Successors and Assigns. Each and all of the covenants,
-----------------------------
terms, provisions and agreements herein contained shall be binding upon and
inure to the benefit of the parties hereto and, to the extent permitted by this
Agreement, their respective heirs, legal representatives, successors and
assigns.
13.14 Creditors. None of the provisions of this Agreement shall be for
---------
the benefit of or enforceable by any creditors of the Company.
13.15 Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
47
13.16 Rule Against Perpetuities. The parties hereto intend that the
-------------------------
Rule Against Perpetuities (and any similar rule of law) not be applicable to any
provisions of this Agreement. However, notwithstanding anything to the contrary
in this Agreement, if any provision in this Agreement would be invalid or
unenforceable because of the Rule Against Perpetuities or any similar rule of
law but for this Section 13.16, the parties hereto hereby agree that any future
interest which is created pursuant to said provision shall cease if it is not
vested within twenty-one (21) years after the death of the survivor of the group
composed of the undersigned individuals and their issue who are living on the
effective date of this Agreement.
13.17 Power of Attorney. Each Equity Owner hereby irrevocably makes,
-----------------
constitutes and appoints the Manager, with full power of substitution, so long
as such Manager are acting in such a capacity (and any successor Manager thereof
so long as such Manager is acting in such capacity), its true and lawful
attorney, in such Equity Owner's name, place and stead (it is expressly
understood and intended that the grant of such power of attorney is coupled with
an interest) to make, execute, sign, acknowledge, swear and file with respect to
the Company:
(a) all documents which the Manager deems necessary or desirable to
effect the dissolution and termination of the Company;
(b) all such other instruments, documents and certificates which
may from time to time be required by the laws of the State or any other
jurisdiction in which the Company shall determine to do business, or any
political subdivision or agency thereof, to effectuate, implement, continue and
defend the valid existence of the Company; and
(c) all instruments, documents and certificates which the Manager
deems necessary or desirable in connection with a Reorganization which has been
authorized in accordance with the terms of this Agreement.
This power of attorney shall not be affected by and shall survive the
bankruptcy, insolvency, death, incompetency, or dissolution of an Equity Owner
and shall survive the delivery of any assignment by the Equity Owner of the
whole or any portion of its Ownership Interest. Each Equity Owner hereby
releases each Manager from any liability or claim in connection with the
exercise of the authority granted pursuant to this power of attorney, and in
connection with any other action taken by such Manager pursuant to which such
Manager purports to act as the attorney-in-fact for one or more Equity Owners,
if the Manager believed in good faith that such action taken was consistent with
the authority granted to it pursuant to this Section 13.17.
13.18 Investment Representations. The undersigned Equity Owners, if
--------------------------
any, understand (1) that the Ownership Interests evidenced by this Agreement
have not been registered under the Securities Act of 1933, the State Securities
Act or any other state securities laws (the "Securities Acts") because the
Company is issuing these Ownership Interests in reliance upon the exemptions
from the registration requirements of the
48
Securities Acts providing for issuance of securities not involving a public
offering, (2) that the Company has relied upon the fact that the Ownership
Interests are to be held by each Equity Owner for investment, and (3) that
exemption from registrations under the Securities Acts would not be available if
the Ownership Interests were acquired by an Equity Owner with a view to
Distribution.
Accordingly, each Equity Owner hereby confirms to the Company that such
Equity Owner is acquiring the Ownership Interests for such own Equity Owner's
account, for investment and not with a view to the resale or Distribution
thereof. Each Equity Owner agrees not to Sell or offer for Sale any portion of
the Ownership Interests unless there is an effective registration or other
qualification relating thereto under the Securities Act of 1933 and under any
applicable state securities laws or unless the holder of Ownership Interests
delivers to the Company an opinion of counsel, satisfactory to the Company, that
such registration or other qualification under such Act and applicable state
securities laws is not required in connection with such offer or Sale. Each
Equity Owner understands that the Company is under no obligation to register the
Ownership Interests or to assist such Equity Owner in complying with any
exemption from registration under the Securities Act if such Equity Owner should
at a later date, wish to dispose of the Ownership Interest. Furthermore, each
Member realizes that the Ownership Interests are unlikely to qualify for
disposition under Rule 144 of the Securities and Exchange Commission unless such
Equity Owner is not an "affiliate" of the Company and the Ownership Interest has
been beneficially owned and fully paid for by such Equity Owner for at least
three years.
Each Equity Owner, prior to acquiring an Ownership Interest, has made an
investigation of the Company and its business, and the Company has made
available to each Equity Owner, all information with respect to the Company
which such Equity Owner needs to make an informed decision to acquire the
Ownership Interest. Each Equity Owner has relied on its own tax and legal
advisors in connection with such Equity Owner's decision to acquire an Ownership
Interest. Each Equity Owner considers himself, herself or itself to be a person
possessing experience and sophistication as an investor which are adequate for
the evaluation of the merits and risks of such Equity Owner's investment in the
Ownership Interest.
13.19 Representations and Warranties.
------------------------------
(a) In General. As of the date hereof, each of the Equity Owners
----------
hereby makes each of the representations and warranties applicable to such
Equity Owner as set forth in Section 13.19(b) hereof, and such warranties and
representations shall survive the execution of this Agreement.
(b) Representations and Warranties. Each Member hereby
------------------------------
represents and warrants that:
(1) Due Incorporation or Formation; Authorization of
------------------------------------------------
Agreement. Such Equity Owner is a corporation duly organized or a
---------
partnership
49
or limited liability company duly formed, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation or
formation and has the corporate, partnership or limited liability company
power and authority to own its property and carry on its business as owned
and carried on at the date hereof and as contemplated hereby. Such Equity
Owner 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. Such Equity Owner has
the corporate, partnership or limited liability company power and authority
to execute and deliver 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, partnership or limited
liability company action. This Agreement constitutes the legal, valid, and
binding obligation of such Equity Owner.
(2) No Conflict with Restrictions; No Default. Neither
-----------------------------------------
the execution, delivery, and performance of this Agreement nor the
consummation by such Equity Owner of the transactions contemplated hereby
(1) will conflict with, violate, or result in a breach of any of the terms,
conditions, or provisions of 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 Equity Owner or any of its Affiliates, (2) will conflict
with, violate, result in a breach of, or constitute a default under any of
the terms, conditions, or provisions of the articles of incorporation,
bylaws, partnership agreement, limited liability company agreement or
operating agreement of such Equity Owner or any of its Affiliates or of any
material agreement or instrument to which such Equity Owner or any of its
Affiliates is a party or by which such Equity Owner, or any of its
Affiliates is or may be bound or to which any of its material properties or
assets is subject, (3) will conflict with, violate, result in a breach of,
constitute a default under (whether with notice or lapse of time or both),
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 Equity Owner or any of its Affiliates is a
party or by which such Equity Owner or any of its Affiliates is or may be
bound, or (4) will result in the creation or imposition of any lien upon
any of the material properties or assets of such Equity Owner or any of its
Affiliates.
(3) Government Authorizations. Any registration,
-------------------------
declaration, or filing with, or consent, approval, license, permit, or
other authorization or order by, any government or regulatory authority,
domestic or foreign, that is required in connection with the valid
execution, delivery, acceptance, and performance by such Equity Owner under
this Agreement or the consummation by such Equity Owner of any transaction
contemplated hereby has been completed, made, or obtained on or before the
effective date of this Agreement.
50
(4) Litigation. There are no actions, suits, proceedings,
----------
or investigations pending or, to the knowledge of such Equity Owner or any
of its Affiliates, threatened against or affecting such Equity Owner or any
of its Affiliates or any of their properties, assets, or businesses 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 Equity Owner'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
Equity Owner or any of its Affiliates has not received any currently
effective notice of any default, and such Equity Owner or any of its
Affiliates 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
Equity Owner's ability to perform its obligations under this Agreement or
to have a material adverse effect on the consolidated financial condition
of such Equity Owner.
(5) Investment Company Act; Public Utility Holding Company
------------------------------------------------------
Act. Neither such Equity Owner nor any of its Affiliates is, nor will the
---
Company as a result of such Equity Owner holding an Ownership Interest be,
an "investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940. Neither such Equity Owner nor any of its
Affiliates is, nor will the Company as a result of such Equity Owner
holding an Ownership Interest be, a "holding company," "an affiliate of a
holding company," or a "subsidiary of a holding company," as defined in, or
subject to regulation under, the Public Utility Holding Company Act of
1935.
13.20 ERISA Representation and Covenant. Och-Ziff Partners hereby
---------------------------------
represents, warrants and covenants that (a) its investment in the Company does
not create "plan assets" under Department of Labor Regulation 2510.3-101 and (b)
Och-Ziff Partners will not permit any investment or take any action in the
future that would create "plan assets."
13.21 Confidential Information. All Confidential Information of an
------------------------
Equity Owner shall remain the property of such Equity Owner. Except as set
forth herein or in the License Agreement, the Company shall not, at any time,
use (except in the business of the Company) or disclose to any Person any
Confidential Information of an Equity Owner.
(a) Except as set forth herein, no Equity Owner shall prior to the
completion of the winding up and liquidation of the Company (the "Liquidation")
or for a period of two years thereafter, use or disclose to any Person (except
in the business of the Company) any Confidential Information of the Company.
The foregoing limitation shall not apply to the use or disclosure by Navigant of
any Intellectual Property Rights of
51
Navigant, including any Intellectual Property Rights obtained by Navigant from
the Company pursuant to this Agreement or the License Agreement.
(b) Notwithstanding anything to the contrary in this Agreement, an
Equity Owner may disclose Confidential Information (i) with the prior written
consent of the other Equity Owner; (ii) to the extent necessary to comply with
applicable law, or an order or information request of any civil or judicial
authority, in which event the party making such disclosure shall so notify the
other parties as promptly as practicable and if possible, prior to making such
disclosure shall seek confidential treatment of such information; (iii) to its
auditors, attorneys or other professional advisors; provided that such Equity
--------
Owner shall be liable for any breach of this Section caused by such auditors,
attorneys or professional advisors; or (iv) in connection with the enforcement
of such Equity Owner's rights under this Agreement or any agreement which is
expressly contemplated herein.
(c) Upon request, the Company and each of the Equity Owners shall
return to the owner of any Confidential Information all copies, transcriptions
of other reproductions of, and any notes relating to, such owner's Confidential
Information. The parties acknowledge and agree that each of the parties would
be irreparably harmed if any of its Confidential Information were to be used or
disclosed in violation of this Agreement, and further agree that each of the
parties shall have the right to seek and obtain injunctive relief upon any
violation of this Section 13.20, in addition to all of the rights and remedies
available at law or in equity.
(d) The terms of confidentiality under this Agreement shall not be
construed to limit any Equity Owner's (or its Affiliates') rights to
independently develop or acquire services or products without use of another
party's Confidential Information. Nothing in this Section 13.20 shall be deemed
to grant to either Equity Owner a license under any other Equity Owner's
Intellectual Property Rights.
52
CERTIFICATE
IN WITNESS WHEREOF, the parties hereto have hereunto executed this Agreement
as of the Effective Date.
COMPANY:
--------
XXXXXXXXXXXXXXXXX.XXX, LLC
By:__________________________________
Title:___________________________
XxxxxxxxXxxxxxxxx.xxx Holdings, inc.
Its: Manager
MEMBERS:
--------
XXXXXXXXXXXXXXXXX.XXX HOLDINGS, INC.
By:____________________________________
Name:__________________________________
Title:_________________________________
OZ DOMESTIC PARTNERS, L.P.
By:____________________________________
Name:__________________________________
Title:_________________________________
OZ SPCI, LTD.
By:____________________________________
Name:__________________________________
Title:_________________________________
53
NAVIGANT INTERNATIONAL, INC.
By:______________________________
Name:____________________________
Title:___________________________
54
EXHIBIT 3.1
XXXXXXXXXXXXXXXXX.XXX
BUSINESS PLAN, JULY 1999
*
*This confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities and
Exchange Act of 1934, as amended.
Exhibit 5.3(j)
License Agreement
This License Agreement is made this 13/th/ day of October, 1999, by and
between Navigant International, Inc., a Delaware corporation ("Navigant"), and
XxxxxxxxXxxxxxxxx.xxx, LLC, a Delaware limited liability company (the
"Company").
Recitals
A. The Company has been formed for the purpose of developing and/or
acquiring and operating an electronic consumer leisure travel business (the
"Business"), as described in the Company's initial business plan, which is
attached as Exhibit 3.1 to the LLC Agreement (as defined below).
B. Navigant desires to grant to the Company a non-exclusive license
(without the right to sublicense) to use certain of its intellectual property,
as described in this Agreement, in the conduct of the Business, subject to the
terms and conditions set forth in this Agreement.
C. The Company desires to accept such license from Navigant.
Agreements
NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Navigant and the Company agree as follows:
1. Definitions. In addition to certain terms defined elsewhere in this
-----------
Agreement, when used with initial capital letters, the terms listed below shall
have the following meanings:
1.1 "Affiliate" means, with respect to Navigant, any other person
or entity controlling, controlled by or under common control with Navigant.
Control means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of an entity, whether through
the ownership of voting securities or voting interests, by contract or
otherwise.
1.2 "Company Owned IP" means all Intellectual Property Rights
owned by the Company as of the Effective Date or developed or acquired by or on
behalf of the Company and its Affiliates after the Effective Date, but shall not
be deemed to include the Licensed IP or any Enhancements of the Licensed IP.
1.3 "Effective Date" means the date set forth in the introductory
paragraph to this Agreement.
1.4 "Enhancements" means any and all modifications, updates,
enhancements, translations and compilations.
1.5 "Intellectual Property Rights" means any (i) patents, patent
applications, patent disclosures and all related continuation, continuation-in-
part, divisional, reissue, reexamination, utility model, certificate of
invention and design patents, design patent applications, design registrations
and applications for design registrations, and mask work rights, (ii)
trademarks, tradenames, service marks, trade
dress, logos, and registrations and applications for registration thereof, (iii)
copyrights and registrations and applications for registration thereof, (iv)
trade secrets and confidential business information (whether patentable or
unpatentable and whether or not reduced to practice), know-how, manufacturing
and production processes and techniques, research and development information,
and copyrightable works, (v) other proprietary rights relating to any of the
foregoing, and (vi) copies and tangible embodiments thereof.
1.6 "Licensed IP" means all Intellectual Property Rights owned by
Navigant as of the Effective Date, or developed or acquired by or on behalf of
Navigant after the Effective Date, that relate to, or are useful in connection
with the development and operation of, the Business, including the items
described on Schedule 1.6 attached hereto, but excluding the Navigant
------------
Trademarks.
1.7 "LLC Agreement" means that certain Limited Liability Company
Agreement of XxxxxxxxXxxxxxxxx.xxx, LLC, dated effective as of October 13, 1999.
1.8 "Navigant Trademarks" means the trade names, trademarks and
service marks of Navigant set forth on Schedule 1.8 attached hereto.
------------
2. Licenses to Company.
-------------------
2.1 Grant of License. Navigant hereby grants to the Company the
----------------
non-exclusive, perpetual (except as provided herein), royalty-free right and
license to use the Licensed IP in connection with the development, marketing,
maintenance, operation and support of the Business (the "License"). The term
"use" shall include the right to copy, display and perform the Licensed IP,
prepare Enhancements of the Licensed IP, and copy, display and perform such
Enhancements of the Licensed IP, provided that any and all Enhancements of the
Licensed IP, including but not limited to Enhancements of the Licensed IP
developed by a third party on behalf of the Company, shall be the sole property
of Navigant. During the term of the License, Company shall have the right to
use, in accordance with the terms of the License and this Agreement, any
Enhancement of the Licensed IP that is developed by or on behalf of the Company.
2.2 Trademark License. Navigant hereby grants to the Company the
-----------------
non-exclusive, perpetual (except as provided herein), royalty-free right and
license to use the Navigant Trademarks in connection with the operation of the
Business (the "Trademark License"), provided that the Company (i) does not
create a unitary composite xxxx involving any of the Navigant Trademarks without
the prior written approval of Navigant; (ii) displays symbols and notices
provided by Navigant indicating the trademark status and ownership of the
Navigant Trademarks; and (iii) uses the Navigant Trademarks in accordance with
reasonable quality control guidelines, if any, provided to the Company in
writing by Navigant.
(1) Ownership of Navigant Trademarks. The Company
--------------------------------
acknowledges that its utilization of the Navigant Trademarks shall not
create in it, nor will it represent that is has, any right, title or
interest in or to the Navigant Trademarks, other than as expressly provided
in this Agreement. The Company shall not do anything contesting or
impairing the Intellectual Property Rights of Navigant in the Navigant
Trademarks, including seeking to register
2
the Navigant Trademarks as part of a composite trademark, trade name or
service xxxx.
(2) Infringement Proceedings. The Company shall promptly
------------------------
notify Navigant of any unauthorized use of the Navigant Trademarks of
which it has knowledge, and shall provide Navigant with its reasonable
cooperation and assistance, at Navigant's cost, with respect to any
proceedings brought by Navigant with respect to such infringement or
alleged infringement.
2.3 No Sublicense. The Company shall not sublicense any of the
-------------
rights granted pursuant to this Section 2 without Navigant's prior written
consent.
2.4 Notice of Enhancements. The Company shall provide prompt
----------------------
written notice to Navigant, and shall provide a copy and all information
reasonably requested by Navigant related thereto, of any Enhancement of the
Licensed IP developed by or on behalf of the Company.
2.5 Termination of Licenses. The License and the Trademark License
-----------------------
shall terminate upon any of the following events:
(1) immediately and without notice upon the dissolution of
the Company, other than a dissolution which is caused by a Reorganization
(as defined in the LLC Agreement);
(2) upon written notice to the Company in the event a
receiver is appointed for the Company, or the Company makes an assignment
for the benefit of creditors, becomes insolvent, or voluntary or
involuntary proceedings are instituted by or against such other party under
any bankruptcy or insolvency laws and such proceedings are not terminated
within 90 days; or
(3) immediately and without further notice if the Company is
in breach of any material provision of this Agreement and does not cure
such breach within a period of 30 days after receipt of written notice
specifying such breach.
3. Proprietary Rights. The Company acknowledges that, as between
------------------
Navigant and Licensee, all right, title and interest in and to, and ownership
of, all Intellectual Property Rights in the Licensed IP and any Enhancements
thereof or copies thereof (collectively, the "Navigant IP Rights") shall at all
times reside exclusively in Navigant or such third parties as Navigant may in
its sole discretion determine. The Company shall place appropriate notices
provided by Navigant of Navigant's ownership of the Navigant IP Rights in
connection with all uses thereof and shall comply with all reasonable directions
which may be submitted by Navigant from time to time regarding the form and
placement of patent, copyright and other proprietary rights notices with respect
to the Navigant IP Rights. The Company shall be entitled only to such rights
with respect to the Navigant IP Rights as are specifically granted in this
Agreement and to no other rights. If the Company, or any third party engaged by
the Company, is deemed by a trier of fact to have any ownership interest in any
Navigant IP Rights, the Company agrees to assign, or use commercially reasonable
efforts to cause such third party to assign, all of such ownership interests to
Navigant. The Company shall reasonably cooperate with Navigant and shall cause
to be executed all such instruments and documents as
3
Navigant may reasonably request in connection with such assignment. The Company
shall not take any action that might encumber or expose the Navigant IP Rights
or the license rights granted herein to any claims, liens or other forms of
encumbrance; provided, however, that the Company may pledge its rights under
this Agreement for financing purposes, including any assignment of such rights
to a lender required in connection therewith. The Company acknowledges that
Navigant and its Affiliates are in the travel services business, and it is the
express understanding and agreement of the parties that Navigant and its
Affiliates shall own and be entitled to use the Navigant IP Rights in connection
with all current and any future businesses or services, subject to any
limitations set forth in the LLC Agreement or any collateral agreement to which
Navigant is a party.
4. License to Navigant.
-------------------
4.1 Grant of License. The Company hereby grants to Navigant the
----------------
non-exclusive, perpetual, royalty-free right and license to use the Company
Owned IP in connection with the development, marketing, maintenance, operation
and support of any business of Navigant or its Affiliates, subject to any
limitations set forth in the LLC Agreement or any collateral agreement to which
Navigant is a party (the "Cross License"). The term "use" shall include the
right to copy, display, perform and prepare Enhancements of the Company Owned
IP, provided that any and all Enhancements of the Company Owned IP made by or on
behalf of Navigant shall be the sole property of the Company. The terms of (i)
Sections 2.3 (other than with respect to a sublicense to an Affiliate of
Navigant), 2.4, 5.2 and 6.2 (other than with respect to a sale, transfer or
assignment to an Affiliate of Navigant), and (ii) Section 3 (but only during the
term of the License and the Trademark License) shall apply mutatis mutandis to
the Cross License granted in this Section 4 such that the Company shall have the
same benefits and rights (except as modified herein) with respect to the Company
Owned IP and Enhancements thereto as Navigant has with respect to the Licensed
IP pursuant to said Sections.
4.2 Limitation. Notwithstanding the Cross License granted in
----------
Section 4.1, if the Company is restricted in its use of all or part of the
Company Owned IP or any Enhancement thereto as a result of the provisions of the
LLC Agreement, the parties agree to negotiate in good faith the terms of the
respective uses by each party of such Company Owned IP or Enhancement.
5. Representations, Warranties and Limitations.
-------------------------------------------
5.1 Authority. Each party to this Agreement hereby represents and
---------
warrants that it has the right, and sufficient authority, to enter into this
Agreement.
5.2 Disclaimer of Performance Warranties. The Licensed IP is
------------------------------------
licensed "AS IS" and without any warranty of any kind relating to the
performance or sufficiency thereof.
5.3 Proprietary Rights Warranty and Indemnity by Navigant. Navigant
-----------------------------------------------------
hereby represents and warrants that it owns (and will continue to own for the
duration of this Agreement) all right, title and interest in and to the Licensed
IP and the Navigant Trademarks. Navigant shall defend any suit or proceeding
brought against the Company insofar as such suit or proceeding shall be based
upon a claim that the use of the Licensed IP or the Navigant Trademarks by
Company in
4
accordance with the terms of this Agreement infringes, violates or constitutes a
wrongful use of any United States Intellectual Property Right or any Canadian or
United Kingdom trademark right. The Company shall notify Navigant in writing of
any such suit or proceeding promptly upon first learning of such suit or
proceeding, and shall provide Navigant, at Navigant's sole cost, with such
assistance and cooperation as Navigant may reasonably request in the defense
thereof. Navigant shall have sole control over any such suit or proceeding;
provided, however, that Navigant shall not settle any such suit or proceeding on
behalf of the Company without the Company's consent, which shall not be
unreasonably withheld. Navigant shall pay all damages and costs finally awarded
against the Company (or payable by the Company pursuant to a settlement
agreement) in connection with any such suit or proceeding. If in Navigant's
opinion any of the Licensed IP or Navigant Trademarks is likely to or becomes
the subject of a claim for patent, copyright, trade secret or other intellectual
property right infringement, Navigant may, at its option and expense, either
procure for the Company the right to continue to use such Licensed IP or
Navigant Trademark or replace or amend the same to eliminate the infringement.
If Navigant is unable, after making all reasonable efforts, to take either such
action, Navigant shall be entitled to terminate the License or the Trademark
License, as the case may be, with respect to such infringing Licensed IP or
Navigant Trademark. Navigant shall have no obligation to defend and shall not be
liable for any infringement or claim thereof for any claim based upon (i) the
operation or use of the Licensed IP with any programs or data not supplied or
approved in writing by Navigant if such infringement would have been avoided by
the operation or use of the Licensed IP without such programs or data, or (ii)
for any claim based upon an Enhancement of the Licensed IP made by or on behalf
of Company.
5.4 Disclaimer. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, NAVIGANT
----------
AND THE COMPANY HEREBY DISCLAIM ALL WARRANTIES WHETHER EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT TO THE LICENSED IP AND THE COMPANY OWNED IP,
RESPECTIVELY. NEITHER NAVIGANT NOR THE COMPANY SHALL UNDER ANY CIRCUMSTANCES BE
LIABLE TO EACH OTHER OR ANY THIRD PARTY FOR CONSEQUENTIAL, INDIRECT, INCIDENTAL,
SPECIAL OR EXEMPLARY DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREIN, EVEN IF SUCH PARTY IS APPRISED OF THE
LIKELIHOOD OF SUCH DAMAGES OCCURRING.
5.5 Limitation on Applicability. Notwithstanding anything in this
---------------------------
Agreement to the contrary, but subject to any applicable limitations under the
LLC Agreement, the Company shall not be precluded from performing any act or
using any Intellectual Property Right, including without limitation the Navigant
IP Rights, in a manner which would have been permissible (i) had the parties not
entered into this Agreement, and (ii) with respect to any Navigant IP Rights,
had Navigant willfully disclosed such elements to the Company, or had the
Company otherwise lawfully obtained such elements..
6. General.
-------
6.1 Entire Agreement. This Agreement, the Schedules hereto and the
----------------
LLC Agreement constitute the entire agreement between the parties with respect
to
5
the subject matter hereof and supersede all prior agreements, oral or written,
and all other communications relating to the subject matter hereof. No amendment
or modification of any provision of this Agreement shall be effective unless set
forth in a document that is executed by both parties to this Agreement.
6.2 Assignment. Subject to the proviso in Section 3 with respect to
----------
pledges and assignments in respect of financing, the Company shall not sell,
transfer or assign any right or obligation hereunder without the prior written
consent of Navigant. Any act in derogation of the foregoing shall be null and
void.
6.3 Force Majeure. Neither party shall be held liable for failure
-------------
to fulfill its obligations hereunder if such failure is due to a natural
calamity, act of government or similar cause beyond the reasonable control of
such party.
6.4 Notices. All notices, reports, records, or other communications
-------
which are required or permitted to be given to the parties under this Agreement
shall be sufficient in all respects if given in writing and delivered in person,
by telecopy, by overnight courier, or by certified mail, postage prepaid, return
receipt requested, to the receiving party at the following address:
If to Navigant:
Navigant International, Inc.
00 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Fax No.: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Holland & Xxxx LLP
000 Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
If to the Company:
c/o Navigant International, Inc.
00 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
6
Fax No.: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxxxxxx, Esq.
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as such party may have given to the other by notice
pursuant to this Section. Notice shall be deemed given on the date of delivery,
in the case of personal delivery or telecopy, or on the delivery or refusal
date, as specified on the return receipt, in the case of overnight courier or
certified mail.
6.5 Governing Law. The validity, construction, and performance of
-------------
this Agreement shall be governed by the internal laws of the State of New York,
without reference to the conflicts of laws principles thereof.
6.6 Severability. If any provision of this Agreement is held by a
------------
court of competent jurisdiction to be contrary to law, the remaining provisions
of this Agreement shall remain in full force and effect.
6.7 Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be an original instrument, and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the Effective Date.
NAVIGANT INTERNATIONAL, INC.
By: ________________________________
Name: ________________________________
Title:________________________________
XXXXXXXXXXXXXXXXX.XXX, LLC
By: XxxxxxxxXxxxxxxxx.xxx Holdings, Inc.,
its Manager
By: ____________________________
Name:____________________________
Title:___________________________
7
Schedule 1.6
to
License Agreement
dated October 13, 1999
by and between
Navigant International, Inc.
and
XxxxxxxxXxxxxxxxx.xxx, LLC
Licensed IP*
-----------
. Internet technology that relates to, or is useful in connection with the
development and operation of, the Business
. Know-how, techniques, and research and development that relate to, or are
useful in connection with the development and operation of, the Business
. Trade secrets, including access to customer lists, that relate to, or are
useful in connection with the development and operation of, the Business
*Schedule to be finalized after execution of Agreement
8
Schedule 1.8
to
License Agreement
dated October 13, 1999
by and between
Navigant International, Inc.
and
XxxxxxxxXxxxxxxxx.xxx, LLC
Navigant Trademarks*
-------------------
Xxxx Country Application Number Application Date
NAVIGANT USA 75/596,878 11/30/98
CANADA pending 5/3/99
U.K. 2198926 6/1/99
FLYING BIRD DESIGN USA 75/596,880 11/30/98
*Information regarding applications and registrations to be updated after
execution.
9
Exhibit 6.7
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAW OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
TO THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
XXXXXXXXXXXXXXXXX.XXX, LLC
COMMON STOCK PURCHASE WARRANT
No. W-[ ] October 13, 1999
Void after October 13, 2009 Warrant to Purchase
50,000 Common Units
XxxxxxxxXxxxxxxxx.xxx, LLC, a Delaware Limited Liability Corporation (the
"Company"), for value received, hereby certifies that the Och-Ziff Partners (as
defined in the LLC Agreement), or registered assigns (the "Holder"), is entitled
to purchase from the Company 50,000 duly authorized, validly issued, fully paid
and nonassessable Common Units of the Company (the "Common Units"), at a
purchase price of $60.00 per unit, at any time or from time to time prior to
5:00 P.M., New York City time, on October 13, 2009 (the "Expiration Date"), all
subject to the terms, conditions and adjustments set forth below in this Warrant
(the "Warrant").
This Warrant is issued in connection with the Limited Liability Company
Agreement of the Company (the "LLC Agreement"). The Warrant originally so
issued evidences rights to purchase an aggregate of 50,000 Common Units subject
to adjustment as provided herein. For purposes herein, prior to such time as an
IPO shall occur, the term Common Stock shall mean Common Units, and subsequent
to an IPO, the term Common Stock shall mean shares of the Company as reorganized
pursuant to an IPO. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned such terms in the LLC Agreement.
1. DEFINITIONS. As used herein, unless the context otherwise
-----------
requires, the following terms shall have the meanings indicated:
"Business Day" shall mean any day other than a Saturday or a Sunday or
------------
a day on which commercial banking institutions in the City of New York are
authorized by law to be closed. Any reference to "days" (unless Business Days
are specified) shall mean calendar days.
"Commission" shall mean the Securities and Exchange Commission or any
----------
successor agency having jurisdiction to enforce the Securities Act.
"Common Units" shall have the meaning assigned to it in the
------------
introduction to this Warrant, such term to include any stock into which such
Common Unit shall have been changed or any stock resulting from any
reclassification of such Common Unit, and all other stock of any class or
classes (however designated) of the Company the holders of which have the right,
without limitation as to amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference.
"Company" shall have the meaning assigned to it in the introduction to
-------
this Warrant, such term to include any corporation or other entity which shall
succeed to or assume the obligations of the Company hereunder in compliance with
Section 4.
"Convertible Securities" shall mean any evidences of indebtedness,
----------------------
shares of stock (other than Common Stock) or other securities directly or
indirectly convertible into or exchangeable for Additional Shares of Common
Stock.
"Current Market Price" shall mean, on any date specified herein, the
--------------------
average of the daily Market Price during the 10 consecutive trading days
commencing 15 trading days before such date, except that, if on any such date
the shares of Common Stock are not listed or admitted for trading on any
national securities exchange or quoted by the NASD automated quotation system in
the over-the-counter market, the Current Market Price shall be the Market Price
on such date.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended from time to time, and the rules and regulations thereunder, or any
successor statute.
"Expiration Date" shall have the meaning assigned to it in the
---------------
introduction to this Warrant.
"Fair Value" shall mean, on any date specified herein (i) in the case
----------
of cash, the dollar amount thereof, (ii) in the case of a security, the Current
Market Price, and (iii) in all other cases, the fair value thereof determined in
good faith by the Board of Directors of the Company. For the purpose of clause
(iii), the Fair Value of any Company Common Stock or Other Securities shall not
be less than the per share consideration (measured on a fully-converted basis)
received by the Company in a third party transaction occurring simultaneously
with or most recently preceding the Board's determination of Fair Value.
"Holder" shall have the meaning assigned to it in the introduction to
------
this Warrant.
"LLC Agreement" shall have the meaning assigned to it in the
-------------
introduction to this Warrant.
"Market Price" shall mean, on any date specified herein, the amount
------------
per share of the Common Stock, equal to (i) the last reported sale price of such
Common Stock, regular way, on such date or, in case no such sale takes place on
such date, the average of the closing bid and asked prices thereof regular way
on such date, in either case as officially reported on the
2
principal national securities exchange on which such Common Stock is then listed
or admitted for trading, (ii) if such Common Stock is not then listed or
admitted for trading on any national securities exchange but is designated as a
national market system security by the NASD, the last reported trading price of
the Common Stock on such date, (iii) if there shall have been no trading on such
date or if the Common Stock is not so designated, the average of the closing bid
and asked prices of the Common Stock on such date as shown by the NASD automated
quotation system, or (iv) if such Common Stock is not then listed or admitted
for trading on any national exchange or quoted in the over-the-counter market,
the Fair Value thereof.
"NASD" shall mean the National Association of Securities Dealers, Inc.
----
"Options" shall mean any rights, options or warrants to subscribe for,
-------
purchase or otherwise acquire either Additional Shares of Common Stock or
Convertible Securities.
"Other Securities" shall mean any stock (other than Common Stock) and
----------------
other securities of the Company or any other Person (corporate or otherwise)
which the holders of the Warrant at any time shall be entitled to receive, or
shall have received, upon the exercise of the Warrant, in lieu of or in addition
to Common Stock, or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other Securities
pursuant to Section 4 or otherwise.
"Person" shall mean any individual, firm, partnership, corporation,
------
trust, joint venture, association, joint stock company, limited liability
company, unincorporated organization or any other entity or organization,
including a government or agency or political subdivision thereof, and shall
include any successor (by merger or otherwise) of such entity.
"Purchase Price" shall mean initially $60.00 per share, subject to
--------------
adjustment and readjustment from time to time as provided in Section 3, and, as
so adjusted or readjusted, shall remain in effect until a further adjustment or
readjustment thereof is required by Section 3.
"Restricted Securities" shall mean (i) any warrants bearing the
---------------------
applicable legend set forth in Section 10.2, (ii) any shares of Common Stock (or
Other Securities) issued or issuable upon the exercise of the Warrant which are
(or, upon issuance, will be) evidenced by a certificate or certificates bearing
the applicable legend set forth in such Section, and (iii) any shares of Common
Stock (or Other Securities) issued subsequent to the exercise of any of the
Warrant as a dividend or other distribution with respect to, or resulting from a
subdivision of the outstanding shares of Common Stock (or Other Securities) into
a greater number of shares by reclassification, stock splits or otherwise, or in
exchange for or in replacement of the Common Stock (or Other Securities) issued
upon such exercise, which are evidenced by a certificate or certificates bearing
the applicable legend set forth in such Section.
"Securities Act" shall mean the Securities Act of 1933, as amended
--------------
from time to time, and the rules and regulations thereunder, or any successor
statute.
3
2. EXERCISE OF WARRANT.
-------------------
2.1. Manner of Exercise; Payment of the Purchase Price. (a) This
-------------------------------------------------
Warrant may be exercised by the Holder hereof, in whole or in part, at any time
or from time to time prior to the Expiration Date, by surrendering to the
Company at its principal office this Warrant, with the form of Election to
Purchase Shares attached hereto as Exhibit A (or a reasonable facsimile thereof)
duly executed by the Holder and accompanied by payment of the Purchase Price for
the number of shares of Common Stock specified in such form.
(b) Payment of the Purchase Price may be made as follows (or by any
combination of the following): (i) in United States currency by cash or
delivery of a certified check or bank draft payable to the order of the Company
or by wire transfer to the Company, (ii) by cancellation of such number of the
shares of Common Stock otherwise issuable to the Holder upon such exercise as
shall be specified in such Election to Purchase Shares, such that the excess of
the aggregate Current Market Price of such specified number of shares on the
date of exercise over the portion of the Purchase Price attributable to such
shares shall equal the Purchase Price attributable to the shares of Common Stock
to be issued upon such exercise, in which case such amount shall be deemed to
have been paid to the Company and the number of shares issuable upon such
exercise shall be reduced by such specified number, or (iii) by surrender to the
Company for cancellation certificates representing shares of Common Stock of the
Company owned by the Holder (properly endorsed for transfer in blank) having a
Current Market Price on the date of Warrant exercise equal to the Purchase
Price.
2.2. When Exercise Effective. Each exercise of this Warrant shall be
-----------------------
deemed to have been effected immediately prior to the close of business on the
Business Day on which this Warrant shall have been surrendered to, and the
Purchase Price shall have been received by, the Company as provided in Section
2.1, and at such time the Person or Persons in whose name or names any
certificate or certificates for shares of Common Stock (or Other Securities)
shall be issuable upon such exercise as provided in Section 2.3 shall be deemed
to have become the holder or holders of record thereof for all purposes.
2.3. Delivery of Stock Certificates, etc.; Charges, Taxes and
--------------------------------------------------------
Expenses. (a) As soon as practicable after each exercise of this Warrant, in
--------
whole or in part, and in any event within five (5) Business Days thereafter, the
Company shall cause to be issued in the name of and delivered to the Holder
hereof or as the Holder may direct,
(i) a certificate or certificates for the number of shares of Common
Stock (or Other Securities) to which the Holder shall be entitled upon such
exercise plus, in lieu of issuance of any fractional share to which the
Holder would otherwise be entitled, if any, a check for the amount of cash
equal to the same fraction multiplied by the Current Market Price per share
on the date of Warrant exercise, and
(ii) in case such exercise is for less than all of the shares of
Common Stock purchasable under this Warrant, a new warrant or warrants of
like tenor, for the balance of the shares of Common Stock purchasable
hereunder.
4
(b) Issuance of certificates for shares of Common Stock upon the
exercise of this Warrant shall be made without charge to the Holder hereof
for any issue or transfer tax or other incidental expense, in respect of
the issuance of such certificates, all of which such taxes and expenses
shall be paid by the Company.
2.4. Company to Reaffirm Obligations. The Company shall, at the time
-------------------------------
of each exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing its continuing obligation to afford to such Holder all
rights to which such Holder shall continue to be entitled after such exercise in
accordance with the terms of this Warrant, provided that if the Holder of this
Warrant shall fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford such rights to the Holder.
3. ADJUSTMENT OF COMMON STOCK ISSUABLE UPON EXERCISE.
-------------------------------------------------
3.1. Adjustment of Number of Shares.
------------------------------
Upon each adjustment of the Purchase Price as a result of the
calculations made in this Section 3, this Warrant shall thereafter evidence the
right to receive, at the adjusted Purchase Price, that number of shares of
Common Stock (calculated to the nearest one-hundredth) obtained by dividing (i)
the product of the aggregate number of shares covered by this Warrant
immediately prior to such adjustment and the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price by (ii) the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
3.2. Treatment of Stock Dividends, Stock Splits, etc. In case the
-----------------------------------------------
Company at any time or from time to time after the date hereof shall declare or
pay any dividend on the Common Stock payable in Common Stock, or shall effect a
subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock), then, and in each such case, the Purchase Price in
effect immediately prior to such declaration or subdivision shall be
proportionately reduced and the number of shares of Common Stock obtainable upon
exercise of this Warrant shall be proportionately increased.
3.3. Adjustments for Combinations, etc. In case the outstanding
---------------------------------
shares of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Purchase Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.
3.4. Dilution in Case of Other Securities. In case any Other
------------------------------------
Securities shall be issued or sold or shall become subject to issue or sale upon
the conversion or exchange of any stock (or Other Securities) of the Company (or
any issuer of Other Securities or any other Person referred to in Section 4) or
to subscription, purchase or other acquisition pursuant to any Options issued or
granted by the Company (or any such other issuer or Person) for a consideration
such as to dilute, on a basis consistent with the standards established in the
other provisions of this Section 3, the purchase rights granted by this Warrant,
then, and in each such case, the
5
computations, adjustments and readjustments provided for in this Section 3 with
respect to the Purchase Price and the number of shares purchasable upon Warrant
exercise shall be made as nearly as possible in the manner so provided and
applied to determine the amount of Other Securities from time to time receivable
upon the exercise of the Warrant, so as to protect the holders of the Warrant
against the effect of such dilution.
3.5. De Minimis Adjustments. If the amount of any adjustment of the
----------------------
Purchase Price per share required pursuant to this Section 3 would be less than
$.02, such amount shall be carried forward and adjustment with respect thereto
made at the time of and together with any subsequent adjustment which, together
with such amount and any other amount or amounts so carried forward, shall
aggregate a change in the Purchase Price of at least $.02 per share. All
calculations under this Warrant shall be made to the nearest .001 of a cent or
to the nearest one-hundredth of a share, as the case may be.
3.6. Abandoned Dividend or Distribution. If the Company shall take a
----------------------------------
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or other distribution (which results in an adjustment to the
Purchase Price under the terms of this Warrant) and shall, thereafter, and
before such dividend or distribution is paid or delivered to stockholders
entitled thereto, legally abandon its plan to pay or deliver such dividend or
distribution, then any adjustment made to the Purchase Price and number of
shares of Common Stock purchasable upon Warrant exercise by reason of the taking
of such record shall be reversed, and any subsequent adjustments, based thereon,
shall be recomputed.
3.7. IPO Restructuring. Notwithstanding anything else contained in
-----------------
this Warrant, upon the occurrence of an IPO, this Warrant, including the
Purchase Price and the number of Common Units being offered under this Warrant,
as adjusted, shall be adjusted and converted into a Warrant entitling the Holder
to purchase that number of shares of Common Stock as shall be determined in
accordance with the ratio used to convert the Common Units into Common Stock
upon the IPO, and that the Purchase price shall be adjusted accordingly to
reflect the conversion.
4. CONSOLIDATION, MERGER, ETC.
--------------------------
4.1. Adjustments for Consolidation, Merger, Sale of Assets,
------------------------------------------------------
Reorganization, etc. In case the Company after the date hereof (a) shall
-------------------
consolidate with or merge into any other Person and shall not be the continuing
or surviving corporation of such consolidation or merger, or (b) shall permit
any other Person to consolidate with or merge into the Company and the Company
shall be the continuing or surviving Person but, in connection with such
consolidation or merger, the Common Stock or Other Securities shall be changed
into or exchanged for stock or other securities of any other Person or cash or
any other property, or (c) shall transfer all or substantially all of its
properties or assets to any other Person, or (d) shall effect a capital
reorganization or reclassification of the Common Stock or Other Securities,
then, and in the case of each such transaction, proper provision shall be made
so that, upon the basis and the terms and in the manner provided in this
Warrant, the Holder of this Warrant, upon the exercise hereof at any time after
the consummation of such transaction, shall be entitled to receive (at the
aggregate
6
Purchase Price in effect at the time of such consummation for all Common Stock
or Other Securities issuable upon such exercise immediately prior to such
consummation), in lieu of the Common Stock or Other Securities issuable upon
such exercise prior to such consummation, the highest amount of securities, cash
or other property to which such Holder would actually have been entitled as a
stockholder upon such consummation if such Holder had exercised this Warrant
immediately prior thereto, subject to adjustments (subsequent to such
consummation) as nearly equivalent as possible to the adjustments provided for
in Sections 3 through 5.
4.2. Assumption of Obligations. Notwithstanding anything contained
-------------------------
in the Warrant or in the LLC Agreement to the contrary, the Company shall not
effect any of the transactions described in clauses (a) through (d) of Section
4.1 unless, prior to the consummation thereof, each Person (other than the
Company) which may be required to deliver any stock, securities, cash or
property upon the exercise of this Warrant as provided herein shall assume, by
written instrument delivered to, and reasonably satisfactory to, the Holder of
this Warrant, (a) the obligations of the Company under this Warrant (and if the
Company shall survive the consummation of such transaction, such assumption
shall be in addition to, and shall not release the Company from, any continuing
obligations of the Company under this Warrant) and (b) the obligation to deliver
to the Holder such shares of stock, securities, cash or property as, in
accordance with the foregoing provisions of this Section 4, the Holder may be
entitled to receive. Nothing in this Section 4 shall be deemed to authorize the
Company to enter into any transaction not otherwise permitted by the LLC
Agreement.
5. OTHER DILUTIVE EVENTS. In case any event shall occur as to
---------------------
which the provisions of Section 3 or Section 4 hereof are not strictly
applicable or if strictly applicable would not fairly protect the purchase
rights of the Holder in accordance with the essential intent and principles of
such Sections, then, in each such case, the Board of Directors of the Company
shall make an adjustment in the application of such provisions, in accordance
with such essential intent and principles, so as to preserve, without dilution,
the purchase rights represented by this Warrant.
6. NO DILUTION OR IMPAIRMENT. The Company shall not, by amendment
-------------------------
of its certificate of incorporation or through any consolidation, merger,
reorganization, transfer of assets, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the Holder of
this Warrant against dilution or other impairment. Without limiting the
generality of the foregoing, the Company (a) shall not permit the par value of
any shares of stock receivable upon the exercise of this Warrant to exceed the
amount payable therefor upon such exercise, (b) shall take all such action as
may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of stock, free from all taxes,
liens, security interests, encumbrances, preemptive rights and charges on the
exercise of the Warrant from time to time outstanding, and (c) shall not take
any action which results in any adjustment of the Purchase Price if the total
number of shares of Common Stock (or Other Securities) issuable after the action
upon the full exercise of the Warrant would exceed the total number of shares of
7
Common Stock (or Other Securities) then authorized by the Company's certificate
of incorporation and available for the purpose of issue upon such exercise.
7. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment
-----------------------------
or readjustment in the shares of Common Stock (or Other Securities) issuable
upon the exercise of this Warrant, the Company at its expense shall promptly
compute such adjustment or readjustment in accordance with the terms of this
Warrant and prepare a certificate, signed by the Chairman of the Board,
President or one of the Vice Presidents of the Company, and by the Chief
Financial Officer, the Treasurer or one of the Assistant Treasurers of the
Company, setting forth such adjustment or readjustment and showing in reasonable
detail the method of calculation thereof and the facts upon which such
adjustment or readjustment is based, including a statement of (a) the
consideration received or to be received by the Company for any Additional
Shares of Common Stock issued or sold or deemed to have been issued, (b) the
number of shares of Common Stock outstanding or deemed to be outstanding, and
(c) the Purchase Price in effect immediately prior to such issue or sale and as
adjusted and readjusted (if required by Section 3) on account thereof. The
Company shall forthwith mail a copy of each such certificate to each holder of a
Warrant and shall, upon the written request at any time of any holder of a
Warrant, furnish to such holder a like certificate. The Company shall also keep
copies of all such certificates at its principal office and shall cause the same
to be available for inspection at such office during normal business hours by
any holder of a Warrant or any prospective purchaser of a Warrant designated by
the holder thereof. The Company shall, upon the request in writing of the Holder
(at the Company's expense), retain independent public accountants of recognized
national standing selected by the Board of Directors of the Company to make any
computation required in connection with adjustments under this Warrant, and a
certificate signed by such firm shall be conclusive evidence of the correctness
of such adjustment, which shall be binding on the Holder and the Company.
8. NOTICES OF CORPORATE ACTION. In the event of:
---------------------------
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend payable otherwise than out of earnings
or earned surplus, determined in accordance with generally accepted
accounting principles (other than a regularly scheduled cash dividend
payable out of consolidated earnings or earned surplus, determined in
accordance with generally accepted accounting principles, in an amount not
exceeding the amount of the immediately preceding cash dividend for such
period) or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities
or property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company, any consolidation
or merger involving the Company and any other Person, any transfer, sale or
other disposition of all or substantially all the assets of the Company to
any other Person or any other capital transaction, or
8
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
the Company shall mail to each holder of a Warrant a notice specifying (i) the
date or expected date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, and (ii) the date or expected date on which any
such reorganization, reclassification, recapitalization, consolidation, merger,
transfer, sale, disposition, dissolution, liquidation or winding-up is to take
place and the time, if any such time is to be fixed, as of which the holders of
record of Common Stock (or Other Securities) shall be entitled to exchange their
shares of Common Stock (or Other Securities) for the securities or other
property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation or
winding-up. Such notice shall be mailed at least 30 days prior to the date
therein specified.
9. REGISTRATION OF COMMON STOCK Company covenants and agrees that
----------------------------
all shares of Company Common Stock which may be issued upon exercise of this
Warrant will have, upon issuance in accordance with the terms of this Warrant,
registration rights on terms in accordance with the form of Registration
Agreement attached as Exhibit __ to the LLC Agreement.
10. RESTRICTIONS ON TRANSFER.
------------------------
10.1. Restrictions on Transfer. This Warrant and all Common Stock
------------------------
(and Other Securities) issuable upon exercise of this Warrant shall be subject
to the same restrictions on transfer as an Equity Owner's Interest as set forth
in the LLC Agreement.
10.2. Restrictive Legends. Except as otherwise permitted by this
-------------------
Section 10, each Warrant (including each Warrant issued upon the transfer of any
Warrant) and certificate for Common Stock (or Other Securities) issued upon the
exercise of any Warrant, and each certificate issued upon the transfer of any
such Common Stock (or Other Securities), shall be stamped or otherwise imprinted
with a legend in substantially the following form:
"THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAW OF ANY STATE, AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
SUCH ACT AND SUCH LAWS."
10.3. Transfer to Comply With the Securities Act. Restricted
------------------------------------------
Securities may not be sold, assigned, pledged, hypothecated, encumbered or in
any manner transferred or disposed of, in whole or in part, except in compliance
with the provisions of the Securities Act and state securities or Blue Sky laws
and the terms and conditions hereof.
9
11. AVAILABILITY OF INFORMATION. So long as the Company shall not
---------------------------
have filed a registration statement pursuant to Section 12 of the Exchange Act
or a registration statement pursuant to the requirements of the Securities Act,
the Company shall, at any time and from time to time, upon the request of any
holder of Restricted Securities and upon the request of any Person designated by
such holder as a prospective purchaser of any Restricted Securities, furnish in
writing to such holder or such prospective purchaser, as the case may be, a
statement as of a date not earlier than 12 months prior to the date of such
request of the nature of the business of the Company and the products and
services it offers and copies of the Company's most recent balance sheet and
profit and loss and retained earnings statements, together with similar
financial statements for such part of the two preceding fiscal years as the
Company shall have been in operation, all such financial statements to be
audited to the extent audited statements are reasonably available, provided
that, in any event the most recent financial statements so furnished shall
include a balance sheet as of a date less than 16 months prior to the date of
such request, statements of profit and loss and retained earnings for the 12
months preceding the date of such balance sheet, and, if such balance sheet is
not as of a date less than six months prior to the date of such request,
additional statements of profit and loss and retained earnings for the period
from the date of such balance sheet to a date less than six months prior to the
date of such request. If the Company shall have filed a registration statement
pursuant to the requirements of Section 12 of the Exchange Act or a registration
statement pursuant to the requirements of the Securities Act, the Company shall
timely file the reports required to be filed by it under the Securities Act and
the Exchange Act (including but not limited to the reports under Sections 13 and
15(d) of the Exchange Act referred to in subparagraph (c) of Rule 144 adopted by
the Commission under the Securities Act)) and will take such further action as
any holder of Restricted Securities may reasonably request, all to the extent
required from time to time to enable such holder to sell Restricted Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 and Rule 144A under the Securities Act, as
such rules may be amended from time to time, or (b) any other rule or regulation
now existing or hereafter adopted by the Commission. Upon the request of any
holder of Restricted Securities, the Company will deliver to such holder a
written statement as to whether it has complied with such requirements.
12. RESERVATION OF STOCK, ETC. The Company shall at all times
--------------------------
reserve and keep available, solely for issuance and delivery upon exercise of
the Warrant, the number of shares of Common Stock (or Other Securities) from
time to time issuable upon exercise of the Warrant. All shares of Common Stock
(or Other Securities) issuable upon exercise of the Warrant shall be duly
authorized and, when issued upon such exercise, shall be validly issued and, in
the case of shares, fully paid and nonassessable with no liability on the part
of the holders thereof, and, in the case of all securities, shall be free from
all taxes, liens, security interests, encumbrances, preemptive rights and
charges. The transfer agent for the Common Stock, which may be the Company
("Transfer Agent"), and every subsequent Transfer Agent for any shares of the
Company's capital stock issuable upon the exercise of any of the purchase rights
represented by this Warrant, are hereby irrevocably authorized and directed at
all times until the Expiration Date to reserve such number of authorized and
unissued shares as shall be requisite for such purpose. The Company shall keep
copies of this Warrant on file with the Transfer Agent for the Common Stock and
with every subsequent Transfer Agent for any shares
10
of the Company's capital stock issuable upon the exercise of the rights of
purchase represented by this Warrant. The Company shall supply such Transfer
Agent with duly executed stock certificates for such purpose. All Warrant
Certificates surrendered upon the exercise of the rights thereby evidenced shall
be canceled, and each such canceled Warrant shall constitute sufficient evidence
of the number of shares of stock which have been issued upon the exercise of
such Warrant. Subsequent to the Expiration Date, no shares of stock need be
reserved in respect of any unexercised Warrant.
13. REGISTRATION AND TRANSFER OF WARRANTS, ETC.
-------------------------------------------
13.1. Warrant Register; Ownership of Warrant. Each warrant issued by
--------------------------------------
the Company shall be numbered and shall be registered in a warrant register (the
"Warrant Register") as it is issued and transferred, which Warrant Register
shall be maintained by the Company at its principal office or, at the Company's
election and expense, by a Warrant Agent or the Company's transfer agent. The
Company shall be entitled to treat the registered holder of any warrant on the
Warrant Register as the owner in fact thereof for all purposes. If and when any
warrant is properly assigned in blank, the Company shall treat the bearer
thereof as the owner of such warrant for all purposes. Subject to Section 10, a
warrant, if properly assigned, may be exercised by a new holder without a new
warrant first having been issued.
13.2. Transfer of Warrant. Subject to compliance with Section 10, if
-------------------
applicable, this Warrant and all rights hereunder are transferable in whole or
in part, without charge to the Holder hereof, upon surrender of this Warrant
with a properly executed Form of Assignment attached hereto as Exhibit B at the
principal office of the Company. Upon any partial transfer, the Company shall
at its expense issue and deliver to the Holder a new Warrant of like tenor, in
the name of the Holder, which shall be exercisable for such number of shares of
Common Stock with respect to which rights under this Warrant were not so
transferred.
13.3. Replacement of Warrant. On receipt by the Company of evidence
----------------------
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant or, in the case of any such mutilation, on surrender
of such Warrant to the Company at its principal office and cancellation thereof,
the Company at its expense shall execute and deliver, in lieu thereof, a new
Warrant of like tenor.
13.4. Adjustments To Purchase Price and Number of Shares.
--------------------------------------------------
Notwithstanding any adjustment in the Purchase Price or in the number or kind of
shares of Common Stock purchasable upon exercise of this Warrant, any Warrant
theretofore or thereafter issued may continue to express the same number and
kind of shares of Common Stock as are stated in this Warrant, as initially
issued.
13.5. Fractional Shares. Notwithstanding any adjustment pursuant to
-----------------
Section 3 in the number of shares of Common Stock covered by this Warrant or any
other provision of this Warrant, the Company shall not be required to issue
fractions of shares upon exercise of this Warrant or to distribute certificates
which evidence fractional shares. In lieu of fractional shares, the Company
shall make payment to the Holder, at the time of exercise of this Warrant as
herein
11
provided, in an amount in cash equal to such fraction multiplied by the Current
Market Price of a share of Common Stock on the date of Warrant exercise.
14. REMEDIES; SPECIFIC PERFORMANCE. The Company stipulates that
------------------------------
there would be no adequate remedy at law to the Holder of this Warrant in the
event of any default or threatened default by the Company in the performance of
or compliance with any of the terms of this Warrant and accordingly, the Company
agrees that, in addition to any other remedy to which the Holder may be entitled
at law or in equity, the Holder shall be entitled to seek to compel specific
performance of the obligations of the Company under this Warrant, without the
posting of any bond, in accordance with the terms and conditions of this Warrant
in any court of the United States or any State thereof having jurisdiction, and
if any action should be brought in equity to enforce any of the provisions of
this Warrant, the Company shall not raise the defense that there is an adequate
remedy at law. Except as otherwise provided by law, a delay or omission by the
Holder hereto in exercising any right or remedy accruing upon any such breach
shall not impair the right or remedy or constitute a waiver of or acquiescence
in any such breach. No remedy shall be exclusive of any other remedy. All
available remedies shall be cumulative.
15. NO RIGHTS OR LIABILITIES AS SHAREHOLDER. Nothing contained in
---------------------------------------
this Warrant shall be construed as conferring upon the Holder hereof any rights
as a stockholder of the Company or as imposing any obligation on the Holder to
purchase any securities or as imposing any liabilities on the Holder as a
stockholder of the Company, whether such obligation or liabilities are asserted
by the Company or by creditors of the Company.
16. NOTICES. All notices and other communications (and deliveries)
-------
provided for or permitted hereunder shall be made in writing by hand delivery,
telecopier, any courier guaranteeing overnight delivery or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed (a) if to the Company, to the attention of its President at its
principal office located at __________________ or such other address as may
hereafter be designated in writing by the Company to the Holder in accordance
with the provisions of this Section, or (b) if to the Holder, at its address as
it appears in the Warrant Register.
All such notices and communications (and deliveries) shall be deemed
to have been duly given: at the time delivered by hand, if personally
delivered; when receipt is acknowledged, if telecopied; on the next Business
Day, if timely delivered to a courier guaranteeing overnight delivery; and five
days after being deposited in the mail, if sent first class or certified mail,
return receipt requested, postage prepaid; provided, that the exercise of any
Warrant shall be effective in the manner provided in Section 2.
17. AMENDMENTS. This Warrant and any term hereof may not be amended,
----------
modified, supplemented or terminated, and waivers or consents to departures from
the provisions hereof may not be given, except by written instrument duly
executed by the party against which enforcement of such amendment, modification,
supplement, termination or consent to departure is sought.
12
18. DESCRIPTIVE HEADINGS, ETC. The headings in this Warrant are for
--------------------------
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Warrant otherwise
requires: (1) words of any gender shall be deemed to include each other gender;
(2) words using the singular or plural number shall also include the plural or
singular number, respectively; (3) the words "hereof", "herein" and "hereunder"
and words of similar import when used in this Warrant shall refer to this
Warrant as a whole and not to any particular provision of this Warrant, and
Section and paragraph references are to the Sections and paragraphs of this
Warrant unless otherwise specified; (4) the word "including" and words of
similar import when used in this Warrant shall mean "including, without
limitation," unless otherwise specified; (5) "or" is not exclusive; and (6)
provisions apply to successive events and transactions.
19. GOVERNING LAW. This Warrant shall be governed by, and construed
-------------
in accordance with, the laws of the State of New York (without giving effect to
the conflict of laws principles thereof).
20. JUDICIAL PROCEEDINGS; WAIVER OF JURY. Any legal action, suit or
------------------------------------
proceeding brought against the Company with respect to this Warrant may be
brought in any federal court of Colorado or the Southern District of New York or
any state court located in New York County, State of New York, or in Denver or
Arapahoe County, Colorado and by execution and delivery of this Warrant, the
Company hereby irrevocably and unconditionally waives any claim (by way of
motion, as a defense or otherwise) of improper venue, that it is not subject
personally to the jurisdiction of such court, that such courts are an
inconvenient forum or that this Warrant or the subject matter may not be
enforced in or by such court. The Company hereby irrevocably and
unconditionally consents to the service of process of any of the aforementioned
courts in any such action, suit or proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, at its address set forth or
provided for in Section 16, such service to become effective 10 days after such
mailing. Nothing herein contained shall be deemed to affect the right of any
party to serve process in any manner permitted by law or commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction to enforce judgments obtained in any action, suit or proceeding
brought pursuant to this Section. The Company irrevocably submits to the
exclusive jurisdiction of the aforementioned courts in such action, suit or
proceeding. THE COMPANY HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION,
SUIT OR PROCEEDING, WHETHER AT LAW OR EQUITY, BROUGHT BY IT OR THE HOLDER IN
CONNECTION WITH THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
13
21. COSTS AND ATTORNEYS' FEES. In the event that any action, suit or
-------------------------
other proceeding is instituted concerning or arising out of this Warrant, the
Company agrees and the Holder, by taking and holding this Warrant agrees, that
the prevailing party shall recover from the non-prevailing party all of such
prevailing party's costs and reasonable attorneys' fees incurred in each and
every such action, suit or other proceeding, including any and all appeals or
petitions therefrom.
XXXXXXXXXXXXXXXXX.XXX, LLC
By:________________________________
Title:
14
EXHIBIT A to
Common Stock Purchase Warrant
-----------------------------
[FORM OF]
ELECTION TO PURCHASE SHARES
The undersigned hereby irrevocably elects to exercise the Warrant to
purchase ____ Common Units ("Common Units"), of XxxxxxxxXxxxxxxxx.xxx, LLC. and
hereby makes payment of $________ therefor, or makes payment therefor by
reduction pursuant to Section 2.1(b)(iii) of the Warrant of the number of shares
of Common Stock otherwise issuable to the Holder upon Warrant exercise by ___
shares or makes payment therefor by delivery of the following Common Stock
Certificates of the Company (properly endorsed for transfer in blank) for
cancellation by the Company pursuant to Section 2.1(b)(iv) of the Warrant,
certificates of which are attached hereto for cancellation _______________ [list
certificates by number and amount]]. The undersigned hereby requests that
certificates for such shares be issued and delivered as follows:
ISSUE TO:_______________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
________________________________________________________________________________
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO:_____________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
If the number of shares of Common Stock purchased (and/or reduced)
hereby is less than the number of shares of Common Stock covered by the Warrant,
the undersigned requests that a new Warrant representing the number of Common
Units not so purchased (or reduced) be issued and delivered as follows:
ISSUE TO:_______________________________________________________________________
(NAME OF HOLDER)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
DELIVER TO:_____________________________________________________________________
(NAME OF HOLDER/1/)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
Dated: _________ __, ____ [OCH-ZIFF ENTITY]
By____________________________
Name:
Title:
15
EXHIBIT B to
Common Unit Purchase Warrant
----------------------------
[FORM OF] ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto the Assignee named below all of the rights of the undersigned to
purchase Common Units, ("Common Units") of XxxxxxxxXxxxxxxxx.xxx, LLC
represented by the Warrant, with respect to the number of units of Common Units
set forth below:
Name of Assignee Address No. of Shares
---------------- ------- -------------
and does hereby irrevocably constitute and appoint ________ Attorney to make
such transfer on the books of XxxxxxxxXxxxxxxxx.xxx, LLC maintained for that
purpose, with full power of substitution in the premises.
Dated: _______________, ____ [OCH-ZIFF Entity]
By_____________________________
Name:
Title:
16
Exhibit 8.1
INITIAL CAPITAL CONTRIBUTIONS
Name of Initial Capital Type of Units/Percentage
------- --------------- ------------------------
Initial Member Contribution Ownership*
-------------- ------------ ---------
Navigant Internet technology, know- 750,000 Common Units
how, trade secrets
trademarks, trade names
trade secrets including
access to customer list, the
contribution of which are
governed exclusively by the
License Agreement, and the
Business Plan with an
agreed value of
$15,000,000.
Och-Ziff Partners $853,250 42,662.5 Common Units
Domestic
$4,266,250 4,266.25 Preferred Units
convertible into (x) 42,662.5
Common Units
plus (y) an amount of Common
Units which is equal to the
Accretion Amount dividend by 125
Och-Ziff Partners $1,646,750 82,337.5 Common Units
Overseas
$8,233,750 8,233.75 Preferred Units
convertible into (x) 82,337.5
Common Units
plus (y) an amount of Common
Units which is equal to the
Accretion Amount divided by 125
Exhibit 10.5(h)
XxxxxxxxXxxxxxxxx.xxx, Inc.
Registration Agreement
TABLE OF CONTENTS
Page
----
Article I Certain Definitions............................................. 1
Article II Registration Rights............................................. 3
2.1 Demand Registrations................................................ 3
2.2 Piggyback Registrations............................................. 4
2.3 Expenses of Registration............................................ 5
2.4 Registration Procedures............................................. 5
2.5 Indemnification..................................................... 6
2.6 Other Obligations................................................... 8
2.7 Termination of Registration Rights.................................. 9
Article III Miscellaneous................................................. 9
3.1 Governing Law....................................................... 9
3.2 Successors and Assigns.............................................. 9
3.3 Entire Agreement: Amendment and Waiver.............................. 9
3.4 Notices, Etc........................................................ 9
3.5 Delays or Omissions................................................. 10
3.6 Severability........................................................ 10
3.7 Counterparts........................................................ 10
3.8 Specific Enforcement................................................ 10
REGISTRATION AGREEMENT
This Registration Agreement (this "Agreement") dated as of
___________, ____, is by and among (i) XxxxxxxxXxxxxxxxx.xxx, Holdings Inc., a
Delaware corporation (the "Company"), (ii) Oz Domestic Partners, L.P. and OZ
SPCI, Ltd. (the "Investors"), and (iii) XxxxxxxxXxxxxxxxx.xxx Holdings, Inc. and
Navigant International, Inc. (the "Management Holders"). The Investors and the
Management Holders are referred to collectively as the "Stockholders."
The Investors and certain of the Management Holders were members of
XxxxxxxxXxxxxxxxx.xxx, LLC, a Delaware limited liability company (the "LLC").
The LLC has been reorganized into the Company. One of the conditions to the
reorganization is that the Company enter into this Agreement.
Now, Therefore, in consideration of the mutual promises and covenants
set forth herein, the parties agree as follows:
Article I
Certain Definitions
As used in this Agreement, the following terms shall have the
following respective meanings:
1.1 "Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
1.2 "Common Stock" shall mean the Company's Common Stock, $.__ par
value per share.
1.3 "Exchange Act" shall mean the Securities Exchange Act of 1934 (or
any similar successor federal statute), as amended, and the rules and
regulations thereunder, all as the same shall be in effect from time to time.
1.4 "Initiating Investor Holders" shall mean holders of Investor
Registrable Securities representing not less than thirty-three percent (33%) of
the then-outstanding Investor Registrable Securities.
1.5 "Initiating Management Holders" shall mean holders of Management
Registrable Securities representing not less than thirty-three percent (33%) of
the then-outstanding Management Registrable Securities.
1.6 "Investor Registrable Securities" shall mean the Investor Stock;
provided, however, that Investor Registrable Securities shall not include any
shares of Investor Stock that have previously been registered under the
Securities Act or that have otherwise been sold to the public in an open-market
transaction under Rule 144.
1.7 "Investor Stock" shall mean (i) shares of Common Stock owned by
the Investors or any transferee thereof; (ii) shares of Common Stock issued or
issuable upon the conversion or exercise of any stock, warrants, options or
other securities of the Company owned by the Investors or any transferee
thereof; and (iii) any shares of Common Stock issued as a dividend or other
distribution with respect to or in exchange for or in replacement of the shares
referenced in (i) and (ii)above.
1.8 "Management Registrable Securities" shall mean the Management
Stock; provided, however, that Management Registrable Securities shall not
include any shares of Management Stock that have previously been registered
under the Securities Act or that have otherwise been sold to the public in an
open-market transaction under Rule 144.
1.9 "Management Stock" shall mean (i) shares of Common Stock owned by
the Management Holders or any transferee thereof; (ii) shares of Common Stock
issued or issuable upon the conversion or exercise of any options or other
securities of the Company owned by the Management Holders or any transferee
thereof; and (iii) any shares of Common Stock issued as a dividend or other
distribution with respect to or in exchange for or in replacement of the shares
referenced in (i) and (ii) above.
1.10 "Registrable Securities" shall mean Investor Registrable
Securities and Management Registrable Securities.
1.11 The terms "registers," "registered" and "registration" shall
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and the declaration or ordering
of the effectiveness of such registration statement by the Commission.
1.12 "Registration Expenses" shall mean all expenses incurred in
effecting any registration pursuant to this Agreement, including without
limitation all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, expenses of any regular or special audits incident to or required
by any such registration, and the fees and expenses of one counsel for the
selling holders of Registrable Securities, but excluding Selling Expenses.
1.13 "Rule 144" shall mean Rule 144 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
1.14 "Securities Act" shall mean the Securities Act of 1933 (or any
similar successor federal statute), as amended, and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
1.15 "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities.
2
Article II
Registration Rights
2.1 Demand Registrations.
(a) Request for Registration by Investors. At any time or times after
the effective date of the first registration statement filed by the Company
under the Securities Act, the Initiating Investor Holders or the Initiating
Management Holders may require that the Company effect a registration under the
Securities Act one time utilizing a registration on Form S-1 or any similar form
(a "Long Form Registration") or, if available, a Form S-3 or any similar form (a
"Short-Form Registration") (each, a "Demand Registration"). Upon receipt of
written notice of such demand, the Company will promptly give written notice of
the proposed registration to all other holders of Registrable Securities and
will include in such registration all Registrable Securities specified in such
demand, together with all Registrable Securities of any other holder of
Registrable Securities joining in such demand as are specified in a written
request received by the Company within twenty (20) days after delivery of the
Company's notice. Each of the Initiating Investor Holders and Initiating
Management Holders shall be entitled to initiate one Demand Registration under
this Section 2.1(a).
(b) Deferral of Demand Registrations. The Company shall file a
registration statement with respect to a Demand Registration requested pursuant
to Section 2.1(a) above as soon as practicable after receipt of the demand of
the Initiating Holders or the Management Initiating Holders, as the case may be;
provided, however, that if in the good faith judgment of the Board of Directors
of the Company, such registration would be seriously detrimental to the Company
in that such registration would interfere with a proposed primary registration
of securities by the Company or any other material corporate transaction and the
Board of Directors concludes, as a result, that it is advisable to defer the
filing of such registration statement at such time (as evidenced by an
appropriate resolution of the Board), then the Company shall have the right to
defer such filing for the period during which such registration would be
seriously detrimental; provided, however, that the Company may not defer the
filing for a period of more than one hundred eighty (180) days after receipt of
the demand of the Initiating Investor Holders or Initiating Management Holders
unless if, at the end of such one hundred eighty (180) day period the reason for
the deferral still exists and the Company is taking reasonable steps to
eliminate it, then the Company may defer the filing for an additional one
hundred eighty (180) day period.
(c) Underwriting. If the Initiating Investor Holders or Initiating
Management Holders intend to distribute the Registrable Securities covered by a
Demand Registration by means of an underwriting, they shall so advise the
Company as a part of their demand made pursuant to Section 2.1 (a), and the
Company shall include such information in its written notice to holders of
Registrable Securities. The Company shall have the right to select the managing
underwriter(s) for an underwritten Demand Registration, subject to the approval
of the parties initiating the Demand Registration (which shall not be
unreasonably withheld or delayed. The right of any holder of
3
Registrable Securities to participate in an underwritten Demand Registration
shall be conditioned upon such holder's participation in such underwriting in
accordance with the terms and conditions thereof, and the Company and such
holders will enter into an underwriting agreement in customary form.
(d) Priorities. The holders of Registrable Securities will have
priority over any other securities included in their Demand Registration. If
other securities are included in any Demand Registration initiated by the
Initiating Investor Holders or the Initiating Management Holders that is not an
underwritten offering, all Registrable Securities included in such offering
shall be sold prior to the sale of any of such other securities. If other
securities are included in any Demand Registration initiated by the Initiating
Investor Holders or the Initiating Management Holders that is an underwritten
offering, and the managing underwriter for such offering advises the Company
that in its opinion the amount of securities to be included exceeds the amount
of securities which can be sold in such offering without adversely affecting the
marketability thereof, the Company will include in such registration all
Registrable Securities requested to be included therein prior to the inclusion
of any other securities. If the number of Registrable Securities requested to be
included in such registration exceeds the amount of securities which in the
opinion of such underwriter can be sold without adversely affecting the
marketability of such offering, such Registrable Securities shall be included
pro rata among the holders thereof based on the percentage of the outstanding
Common Stock held by each such Stockholder (assuming the conversion of all
securities and the exercise of all options, warrants and similar rights held by
such Stockholder).
2.2 Piggyback Registrations.
(a) Request for Inclusion. If, at any time or times after the
effective date of the first registration statement filed by the Company under
the Securities Act, the Company shall determine to register any of its
securities for its own account or for the account of other security holders of
the Company on any registration form (other than Form S-4 or S-8 or any similar
forms) which permits the inclusion of Registrable Securities (a "Piggyback
Registration"), the Company will promptly give each holder of Registrable
Securities written notice thereof and, subject to Section 2.2(c), shall include
in such registration all the Registrable Securities requested to be included
therein pursuant to the written requests of holders of Registrable Securities
received within twenty (20) days after delivery of the Company's notice.
(b) Underwriting. If the Piggyback Registration relates to an
underwritten public offering, the Company shall so advise the holders of
Registrable Securities as a part of the written notice given pursuant to Section
2.2(a). In such event, the right of any holder of Registrable Securities to
participate in such registration shall be conditioned upon such holder's
participation in such underwriting in accordance with the terms and conditions
thereof. All holders of Registrable Securities proposing to distribute their
securities through such underwriting shall (together with the Company) enter
into an underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Company.
4
(c) Priorities. If such proposed Piggyback Registration is an
underwritten offering and the managing underwriter for such offering advises the
Company that the amount of securities requested to be included therein exceeds
the amount of securities that can be sold in such offering, any securities to be
sold by the Company in such offering shall have priority over any Registrable
Securities, and, except as otherwise provided in Section 2.1(a), the number of
shares to be included by a holder of Registrable Securities in such registration
shall be reduced pro rata on the basis of the percentage of the outstanding
Common Stock held by such Stockholder (assuming the conversion of all securities
and the exercise of all options, warrants and similar rights held by such
Stockholder) and all other holders exercising similar registration rights.
2.3 Expenses of Registration. All Registration Expenses incurred in
connection with the Demand Registrations and all Piggyback Registrations shall
be borne by the Company. All Selling Expenses relating to Registrable
Securities included in any Demand or Piggyback Registration shall be borne by
the holders of such securities pro rata on the basis of the number of shares
sold by them.
2.4 Registration Procedures. In the case of each registration
effected by the Company pursuant to this Article II, the Company will keep each
holder of Registrable Securities advised in writing as to the initiation of such
registration and as to the completion thereof. At its expense, the Company will
use its reasonable efforts to:
(a) cause such registration to be declared effective by the Commission
and, in the case of a Demand Registration, keep such registration effective for
a period of one hundred eighty (180) days or until the holders of Registrable
Securities included therein have completed the distribution described in the
registration statement relating thereto, whichever first occurs;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement (including post-effective amendments) as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement;
(c) obtain appropriate qualifications of the securities covered by
such registration under state securities or "blue sky" laws in such
jurisdictions as may be requested by the holders of Registrable Securities;
provided, however, that the Company shall not be required to file a general
consent to service of process in any jurisdiction in which it is not otherwise
subject to service in order to obtain any such qualification;
(d) furnish such number of prospectuses and other documents incident
thereto, including any amendment of or supplement to the prospectus, as a holder
of Registrable Securities from time to time may reasonably request;
(e) notify each holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be
5
delivered under the Securities Act, of the happening of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or incomplete in the light of the circumstances then existing,
and at the request of any such holder, prepare and furnish to such holder a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or incomplete
in the light of the circumstances then existing;
(f) cause all Registrable Securities covered by such registration to
be listed on each securities exchange or inter-dealer quotation system on which
similar securities issued by the Company are then listed;
(g) provide a transfer agent and registrar for all Registrable
Securities covered by such registration and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration;
(h) otherwise comply with all applicable rules and regulations of the
Commission; and
(i) in connection with any underwritten Demand Registration, the
Company will enter into an underwriting agreement reasonably satisfactory to the
Investor Initiating Holders and the Management Initiating Holders containing
customary underwriting provisions, including indemnification and contribution
provisions.
2.5 Indemnification.
(a) The Company will indemnify each holder of Registrable Securities,
each of such holders' officers, directors, partners, agents, employees and
representatives, and each person controlling such holder within the meaning of
Section 15 of the Securities Act, with respect to each registration,
qualification or compliance effected pursuant to this Article II, against all
expenses, claims, losses, damages and liabilities (or actions, proceedings or
settlements in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by the Company of the
Securities Act or any rule or regulation thereunder applicable to the Company
and relating to action or inaction required of the Company in connection with
any such registration, qualification or compliance, and will reimburse each such
indemnified person for any legal and any other expenses reasonably incurred in
connection with investigating and defending or settling
6
any such claim, loss, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such claims,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission based upon written information furnished to the Company by
such holder of Registrable Securities and stated to be specifically for use
therein. It is agreed that the indemnity agreement contained in this Section
2.5(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company (which consent has not been unreasonably withheld).
(b) Each holder of Registrable Securities included in any registration
effected pursuant to this Article II shall indemnify the Company, each of its
directors, officers, agents, employees and representatives, and each person who
controls the Company within the meaning of Section 15 of the Securities Act,
each other such holder of Registrable Securities, and each of their officers,
directors and partners, and each person controlling such holders, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse such indemnified persons
for any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in strict conformity with written information furnished to the
Company by such holder of Registrable Securities; provided, however, that no
holder of Registrable Securities shall be liable hereunder for any amounts in
excess of the net proceeds received by such holder pursuant to such
registration.
(c) Each party entitled to indemnification under this Section 2.5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnified Party,
who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2.5 to the extent such
failure is not prejudicial. No Indemnifying Party in the defense of any such
claim or litigation shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which does not
include an unconditional release of such Indemnified Party from all liability in
respect to such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question
7
as an Indemnifying Party may reasonably request in writing and as shall be
reasonably required in connection with defense of such claim and litigation
resulting therefrom.
(d) If the indemnification provided for in this Section 2.5 is held by
a court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage or expense referred to therein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with the statements or omissions which resulted in such loss, liability, claim,
damage or expense as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in an underwriting agreement
entered into in connection with an underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.
2.6 Other Obligations. With a view to making available the benefits
of certain rules and regulations of the Commission which may effectuate the
registration of Registrable Securities or permit the sale of Registrable
Securities to the public without registration, the Company agrees to:
(a) after its initial registration under the Securities Act, exercise
reasonable best efforts to cause the Company to be eligible to utilize Form S-3
(or any similar form) for the registration of Registrable Securities;
(b) at such time as any Registrable Securities are eligible for
transfer under Rule 144(k), upon the request of the holder of such Registrable
Securities, remove any restrictive legend from the certificates evidencing such
securities at no cost to such holder;
(c) make and keep available public information as defined in Rule 144
under the Securities Act at all times from and after ninety (90) days following
its initial registration under the Securities Act;
(d) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
at any time after it has become subject to such reporting requirements; and
8
(e) furnish any holder of Registrable Securities upon request a
written statement by the Company as to its compliance with the reporting
requirements of Rule 144 (at any time from and after ninety (90) days following
the effective date of the first registration statement filed by the Company for
an offering of its securities to the general public), and of the Securities Act
and the Exchange Act (at any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents as a holder of Registrable
Securities may reasonably request in availing itself of any rule or regulation
of the Commission (including Rule 144A) allowing a holder of Registrable
Securities to sell any such securities without registration.
2.7 Termination of Registration Rights. The right of any holder of
Registrable Securities to request inclusion of Registrable Securities in any
registration pursuant to this Article II shall terminate when (i) all
Registrable Securities beneficially owned by such holder of Registrable
Securities may immediately be sold under Rule 144(k), and (ii) the Company's
Common Stock is listed on a national securities exchange or traded in The Nasdaq
Stock Market.
Article III
Miscellaneous
3.1 Governing Law. This Agreement shall be governed in all respects by the
laws of the State of Delaware.
3.2 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
At the request of the Company, a transferee of Investor Stock or Management
Stock will execute a copy of this Agreement.
3.3 Entire Agreement: Amendment and Waiver. This Agreement supersedes any
other agreement, whether written or oral, that may have been made or entered
into by the parties hereto relating to the matters contemplated hereby and
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof. In particular, the execution of this
Agreement shall terminate all prior stockholders agreements and registration
rights agreements, or any similar agreement to the foregoing, among any Investor
and the Company. Neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated except by a written instrument signed by the
Company and the holders of at least (a) two-thirds of the outstanding Investor
Stock and (b) two-thirds of the outstanding Management Stock, and any such
amendment, waiver, discharge or termination shall be binding on all the
Stockholders.
3.4 Notices, Etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given:
(i) upon personal
9
delivery to the party to be notified, (ii) when sent by confirmed telex,
facsimile or e-mail if sent during normal business hours of the recipient, if
not, then on the next business day, (iii) five (5) days after having been sent
by registered or certified mail, return receipt requested, postage prepaid, or
(iv) one (1) day after deposit with a nationally recognized overnight courier,
special next day delivery, with verification of receipt. All communications
shall be sent to the Company at ____________ and to a Stockholder at the address
reflected in the Company's stock ledger or at such other address as such
Stockholder shall have furnished to the Company in writing.
3.5 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any Stockholder under this Agreement shall impair
any such right, power or remedy of such Stockholder nor shall it be construed to
be a waiver of any such breach or default, or an acquiescence therein, or of or
in any similar breach or default thereafter occurring; nor shall any waiver of
any single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any Stockholder of any breach or default
under this Agreement or any waiver on the part of any Stockholder of any
provisions or conditions of this Agreement must be made in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
Stockholder, shall be cumulative and not alternative.
3.6 Severability. Unless otherwise expressly provided herein, a
Stockholder's rights hereunder are several rights, not rights jointly held with
any of the other Stockholders. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
3.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
3.8 Specific Enforcement. Any holder of Investor Stock or Management
Stock shall be entitled to specific enforcement of its rights under this
Agreement. The parties acknowledge that money damages would be an inadequate
remedy for a breach of this Agreement and consent to an action for specific
performance or other injunctive relief in the event of any such breach.
10
In Witness Whereof, the parties hereto have executed this Stockholders
Agreement effective as of the day and year first above written.
XXXXXXXXXXXXXXXXX.XXX, HOLDINGS INC.
By: ____________________________________
Name: __________________________________
Title: _________________________________
Investors:
OZ DOMESTIC PARTNERS, L.P..
By: ____________________________________
Name: __________________________________
Title: _________________________________
OZ SPCI, Ltd.
By: ____________________________________
Name: __________________________________
Title: _________________________________
11
Management Holders:
XXXXXXXXXXXXXXXXX.XXX HOLDINGS, INC.
By: ____________________________________
Name: __________________________________
Title: _________________________________
NAVIGANT INTERNATIONAL, INC.
By: ____________________________________
Name: __________________________________
Title: _________________________________
12
EXHIBIT 11.2(b)
TO XXXXXXXXXXXXXXXXX.XXX, LLC AGREEMENT
FORM OF
XXXXXXXXXXXXXXXXX.XXX LLC
UNIT OPTION AGREEMENT
This Unit Option Agreement is effective as of the ___/th/ day of October,
1999 (the "Effective Date"), by and among XxxxxxxxXxxxxxxxx.xxx, LLC (the
"Company"),__________("Optionee"), and XxxxxxxxXxxxxxxxx.xxx Holdings, inc.
("Navigant").
The Company and Optionee agree as follows:
1. Grant of Option.
---------------
Pursuant to that certain Option Exchange Agreement of even date herewith,
Optionee received an option (the "Option") to purchase ________ of the Company's
Common Units (as defined in the Limited Liability Company Agreement of the
Company) (the "Common Units"), subject to the terms and conditions of this
Agreement and the LLC Agreement. The Common Units represented by this Unit
Option Agreement shall represent ___________ of the 111,111 Common Units which
may be issued pursuant to Section 11.2(b) of the Company Limited Liability
Company Agreement.
2. Date of Grant.
-------------
The effective date of the grant of the Option is the Effective Date.
3. Exercise Price of Units.
-----------------------
The purchase price per share for each Common Unit that may be purchased
upon exercise of the Option is Ten Dollars ($10.00).
4. Expiration Date.
---------------
Unless sooner terminated as provided in Section 10 of this Agreement, the
Option shall expire and terminate on December 31, 2009, and in no event shall
the Option be exercisable after that date.
5. Vesting of Option.
-----------------
The Option granted herein shall become one hundred percent (100%) vested on
the Effective Date.
6. Manner of Exercise.
------------------
The Option shall be exercisable, in whole or in part, from time to time, by
giving written notice of exercise to the Company. Such notice shall specify the
number of Common Units with respect to which the Option is being exercised and
the amount of payment therefor and shall be
accompanied by (1) payment in full of the purchase price of the shares to be
purchased, (2) payment of such amount as the Company shall determine to be
sufficient to satisfy any liability it may have for any withholding of federal,
state or local income or other taxes incurred by reason of the exercise of the
Option, (3) a representation meeting the requirements of Section 7 if requested
by the Company, and (4) a Unit Restriction Agreement in substantially the form
attached as Exhibit A, if requested by the Company. Payment for Common Units
shall be in the form of either (i) cash, (ii) a certified or bank cashier's
check to the order of the Company, or (iii) in any combination thereof.
7. Investment Representation.
-------------------------
Upon demand by the Company, Optionee shall deliver to the Company a
representation in writing that the purchase of all Common Units with respect to
which notice of exercise of the Option has been given by Optionee is being made
for investment only and not for resale or with a view to distribution, and
containing such other representations and provisions with respect thereto as the
Company may require. Upon such demand, delivery of such representation promptly
and prior to the transfer or delivery of any such Common Units and prior to the
expiration of the option period shall be a condition precedent to the right to
purchase such Common Units.
8. Unit Restriction Agreement.
--------------------------
Upon exercise of the Option, the Optionee shall execute and deliver to the
Company, a Unit Restriction Agreement in substantially the form attached to this
Agreement as Exhibit A. Execution and delivery of the Unit Restriction
---------
Agreement prior to the transfer or delivery of any Common Units and prior to the
expiration of the option period shall be a condition precedent to the right to
purchase such Common Units.
9. Transfer of Common Units to Optionee.
------------------------------------
As soon as practicable after Optionee has given the Company written notice
and has otherwise met the requirements of Section 6, the Company shall issue or
transfer the number of Common Units as to which the Option has been exercised
and shall deliver to Optionee a certificate or certificates thereof, registered
in Optionee's name. No Common Units shall be issued until full payment therefor
shall be made. In no event shall the Company be required to transfer fractional
Common Units to Optionee, and, in lieu thereof, the Company may pay an amount in
cash equal to the fair market value of such fractional Common Units on the date
of exercise. If the issuance or transfer of Common Units by the Company would
for any reason, in the opinion of counsel for the Company, violate any
applicable federal or state laws or regulations, the Company may delay issuance
or transfer of such Common Units to the Optionee until compliance with such laws
can reasonably be obtained. In no event shall the Company be obligated to
effect or obtain any listing, registration, qualification, consent or approval
under any applicable federal or state laws or regulations or any contract or
agreement to which the Company is a party with respect to the issuance of any
such Common Units.
10. Nontransferability of Option.
----------------------------
Except with the prior written consent of the Company, the Option is not
transferable by Optionee other than by Will or the laws of descent and
distribution, and the Option shall be exercisable during Optionee's lifetime
only by Optionee. Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of the Option contrary to the provisions hereof, or upon the
levy of any attachment or similar process upon the Option, the Option shall
immediately become null and void.
2
11. Withholding for Taxes.
---------------------
The Company shall have the right to deduct from Optionee's salary any
federal or state taxes required by law to be withheld with respect to the
exercise of the Option.
12. Transactions Affecting Common Units.
-----------------------------------
If the Company is merged or consolidated with another entity and the
Company is not the surviving entity, or if all or substantially all of the
assets of the Company are acquired by another entity, or if the Company is
liquidated or reorganized, the Company shall, as to the Option, either (1) make
appropriate provision for the protection of the Option by the substitution on an
equitable basis of the right thereafter to exercise the Option for the kind and
amount of securities and/or other property receivable upon such event by a
holder of the number of Common Units for which the Option could have been
exercised immediately prior to such event, if the Option had then been
exercisable, provided that no additional benefits shall be conferred upon
Optionee as a result of such substitution, or (2) upon written notice to
Optionee, provide that the Option must be exercised within a specified number of
days of the date of such notice or they will be terminated.
13. Amendment.
---------
This Agreement shall not be amended, modified or revoked except by
agreement in writing signed by the Company and Optionee.
14. Governing Law.
-------------
The internal laws of the State of Delaware (irrespective of its choice of
laws principles) shall govern the validity of this Agreement, the construction
of its terms and the interpretation and enforcement of the rights and duties of
the parties hereto.
15. Miscellaneous.
-------------
This Agreement constitutes the entire understanding and agreement of the
parties with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements or understandings, inducements or conditions, express
or implied, written or oral, between the parties with respect hereto. If any
provision of this Agreement, or the application thereof, shall for any reason
and to any extent be invalid or unenforceable, the remainder of this Agreement
and the application of such provision to other circumstances shall be
interpreted so as best to reasonably effect the intent of the parties hereto.
All notices or other communications which are required to be given or may be
given to either party pursuant to the terms of this Agreement shall be in
writing and shall be delivered personally or by registered or certified mail,
postage prepaid, to the address of the parties as set forth on the signature
page to this Agreement. Notice shall be deemed given on the date of delivery in
the case of personal delivery or on the delivery date as specified on the return
receipt in the case of registered or certified mail. Either party may change
its address for such communications by giving notice thereof to the other party
in conformity with this Section 15. This Agreement may not be assigned by the
Company at any time or by Optionee during his life without the written consent
of the other. Subject to this limitation, this Agreement shall be binding upon,
and inure to the benefit of, the parties and their heirs, beneficiaries,
personal representatives, successors and assigns.
3
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the Effective Date, executed this _____ day of ________________,
1999.
XxxxxxxxXxxxxxxxx.xxx LLC
By:_____________________________
Title:__________________________
Date:___________________________
XxxxxxxxXxxxxxxxx.xxx
Holdings, Inc.
By:_____________________________
Title:__________________________
Date:___________________________
OPTIONEE
________________________________
Date ___________________________
Address:________________________
________________________
________________________
4
EXHIBIT A
(to Unit Option Agreement)
UNIT RESTRICTION AGREEMENT
(Options to Acquire Navigant Units Pursuant to 11.2 of LLC Agreement)
This Unit Restriction Agreement (the "Agreement") is entered into as of
October ___, 1999, by and between XxxxxxxxXxxxxxxxx.xxx Holdings, inc., a
Delaware corporation ("Navigant"), XxxxxxxxXxxxxxxxx.xxx, LLC, and
___________________________________ (the "Unit Holder").
RECITALS:
1. Navigant was granted an option to acquire 111,111 Common Units in
XxxxxxxxXxxxxxxxx.xxx, LLC, a Delaware limited liability company (the "Company")
pursuant to Section 11.2 of the Company's Limited Liability Agreement ("LLC
Agreement").
2. Effective April ____, 1999, Unit Holder was granted an option to acquire
___ common shares in Navigant for $10.00 per common share.
3. Pursuant to that certain Option Exchange Agreement of even date
herewith, Navigant transferred to Unit Holder an Option ("Unit Option") to
acquire ____ Common Units in Company ("Units") in exchange for the transfer by
Unit Holder to Navigant of his option to acquire ____ common shares of Navigant.
The Company desires to impose restrictions in connection with the Units
acquired by the Unit Holder upon exercise of the Unit Option, and Unit Holder
agrees to accept these restrictions.
AGREEMENT:
Now, therefore, the parties hereto agree as follows:
1. Restriction on Transfer of Units.
1.1 Unit Holder shall not sell, assign, give, pledge, encumber or
otherwise transfer (hereinafter, "transfer") any of the Units, or any right or
interest therein, or any certificate therefor, now owned or hereafter acquired
whether voluntarily, involuntarily or by operation of law, except transfers to
Permitted Transferees as provided in Section 2.1 or bona fide transfers subject
to and made as provided in Article 3 or Article 4. Any transfer or attempted
transfer made in violation of this Agreement shall be void and neither Navigant
nor the Company shall recognize or give effect to such
transfer on its books and records, or recognize the persons or entities to whom
such transfer has been made as the legal or beneficial holder of the Units or
Unit Option.
1.2 No transfer or attempted transfer of any Units shall be effective
unless such Units shall remain subject to the terms and conditions of this
Agreement and unless and until the proposed transferee, including a Permitted
Transferee as defined in Section 2.1, shall accept the terms and conditions of
this Agreement by executing and delivering to Navigant a Statement of Acceptance
in the form attached hereto as Exhibit A. Upon the execution and delivery of
---------
the Statement of Acceptance, the transferee shall thereafter be deemed to be a
signatory party to this Agreement in the position of the Unit Holder.
2. Permitted Transfers.
2.1 The Unit Holder shall have the right to transfer all or any part of
the Units to the following transferees (the "Permitted Transferees"), subject to
the requirements of Section 1.2 above: (a) a trust established for the sole
benefit of the Unit Holder or any of the Unit Holder's spouse, children or
grandchildren; and (b) the personal representatives, beneficiaries or estate of
the Unit Holder upon the Unit Holder's death, whether transferred by will or
intestacy.
3. Navigant's Right of First Refusal.
3.1 Navigant shall have the right of first refusal, as hereinafter
provided, with respect to any proposed transfer of Units or Unit Options by the
Unit Holder, except transfers to Permitted Transferees.
3.2 Except with respect to transfers of the Units or Unit Options to
Permitted Transferees, the Unit Holder shall, 60 days prior to a proposed
transfer of the Units or Unit Options, deliver written notice to Navigant
stating the number of Units or Unit Options and the interest therein proposed to
be transferred (collectively, the "Offered Units"), the name of the proposed
transferee(s) and the manner, time, terms and conditions of the proposed
transfer. Navigant shall, for a period of 60 days following such notice, have
an irrevocable option to purchase all or part of the Offered Units in accordance
with the manner, time, terms and conditions specified in the notice of proposed
transfer.
3.3 Navigant may elect to exercise its option to purchase all or part of
the Offered Units by giving written notice to the Unit Holder of such intention
within the 60 day period following Navigant's receipt of Unit Holder's notice of
proposed transfer. Upon receipt of such notice, the Unit Holder shall be bound
to transfer the Offered Units subject to such notice to Navigant, free and clear
of all liens and encumbrances, and in accordance with the terms set forth in the
notice of proposed transfer.
2
3.4 If Navigant elects not to exercise its option to purchase all of the
Offered Units during the 60 day period, the Unit Holder may, within 90 days of
the last day of such 60 day period, transfer to the proposed transferee(s) the
part of the Offered Units that Navigant elected not to purchase, but only in
accordance with the terms set forth in the notice of proposed transfer.
Notwithstanding any provision herein to the contrary, all Offered Units
transferred to such transferees in accordance with the provisions of this
Section 3.4 shall remain subject to the provisions and restrictions of this
Agreement and all such transferees shall execute and deliver to Navigant a
Statement of Acceptance as provided in Section 1.2. If the Unit Holder does not
make the transfer to the proposed transferee(s) within the 90 day period
provided in this Section 3.4, the Unit Holder shall be required again to comply
with the provisions of this Agreement before the Unit Holder may make any
subsequent transfer of any part of the Offered Units.
3.5 Notwithstanding any provision herein to the contrary, if the notice of
proposed transfer specifies a consideration in other than United States money,
Navigant shall have the right to acquire the Offered Units for the United States
money equivalent of the specified consideration. If the notice of proposed
transfer specifies any other manner, time, term or condition that cannot be
complied with without unreasonable effort, Navigant shall have the right to
acquire the Offered Units by complying with the reasonable equivalent of the
specified manner, time, terms or conditions.
3.6 If the notice of proposed transfer specifies that the Offered Units
are to be transferred without full consideration as a gift, Navigant shall have
the right to acquire the Offered Units at a price per Unit equal to their then
current value as determined pursuant to Article 5. The manner and time at which
the purchase and sale of the Offered Units shall take place shall be determined
in accordance with Article 5.
4. Navigant's Purchase of the Units Upon Termination of Employment.
4.1 Navigant shall have the right to purchase all or any part of the Units
and held by the Unit Holder, upon the terms and conditions provided herein, in
the event that (a) the Unit Holder's full-time employment with all of Company
and Navigant International, Inc. and each of its subsidiary corporations (or
other entities) is terminated for any reason (the "Unit Holder's Departure").
4.2 Navigant may exercise its right to purchase Units upon the Unit
Holder's Departure by providing written notice of such intention to the Unit
Holder, stating the time, manner, terms and conditions of the repurchase in
accordance with this Section 4.2. Such notice must be given within 60 days
following the date of the Unit Holder's Departure. The purchase price for the
Units that Navigant elects to purchase shall be the Units' then current value as
determined pursuant to Article 5. The manner and time at which the purchase and
sale of the Units shall take place shall be determined in accordance with
Article 5.
3
4.3 The Unit Holder may retain all of the Units with respect to which the
right of repurchase has not been exercised. Such Units shall remain subject to
the terms and conditions of this Agreement, and the Unit Holder shall comply
with the provisions of Article 3 herein prior to any subsequent transfer of such
Units.
4.4 In the event the Unit Holder delivers a notice of proposed transfer
pursuant to Section 3.2 within the period in which Navigant may exercise its
right of repurchase under this Article 4, Navigant may elect to make the
purchase pursuant to either Article 3 or Article 4, in Navigant's sole
discretion.
5. Value of Units; Closing of Purchase and Sale.
5.1 In the case of a purchase made pursuant to Section 3.6, the current
value of the Units, on a per Unit basis, shall be deemed to be the amount paid
per Unit for the Common Units of the Company by investors in the last offering
(a "Qualifying Offering") in which the Company sold Common Units. In the case
of a purchase made pursuant to Article 4, the current value of the Units shall
be the greater of (a) the amount determined pursuant to the preceding sentence,
or (b) the amount paid for the Units. An offering of Common Units by the
Company shall not be deemed to be a Qualifying Offering unless the last sale of
Common Units in such offering occurred not more than one year prior to the
Determination Date (as defined below), and provided further that the gross
proceeds to the Company in such offering were not less than $500,000. If there
is no such Qualifying Offering, then the current value of the Units shall be
determined by agreement between Navigant and the Unit Holder, and failing such
agreement, by an independent appraiser selected by agreement between Navigant
and the Unit Holder. In the absence of agreement concerning the selection of an
independent appraiser, the current value of the Units shall be determined by a
panel of three appraisers selected as follows: The Unit Holder shall select one
independent appraiser, Navigant shall select one independent appraiser and the
two appraisers so selected shall select a third independent appraiser. The
decision of a majority of the three appraisers with respect to the current value
of the Units shall be final and binding upon the parties. If one party selects
an appraiser and the other party fails to select the second appraiser within ten
days after the receipt of notice of the selection of the first appraiser, the
decision of the first appraiser alone shall be final and binding upon the
parties. Cost of the appraisal shall be split equally between the parties. In
the case of a gift referenced in Section 3.6, the Determination Date shall be
the date of receipt by Navigant of the notice of proposed transfer. In case of
the Unit Holder's Departure, the Determination Date shall be the date of the
Unit Holder's Departure.
5.2 A purchase and sale required pursuant to Section 3.6 or Article 4
shall take place at a closing at a time and place designated by Navigant;
provided, however, that the time must be within 90 days of the Determination
Date. At the closing, the Unit Holder shall transfer the Offered Units or the
Units, as the case may be, to Navigant free
4
and clear of all liens and encumbrances and in accordance with the terms of this
Agreement. In return, Navigant shall pay the Unit Holder not less than 25% of
the purchase price in cash or certified funds and the remainder by execution and
delivery of Navigant's Promissory Note, bearing interest at the rate per annum
equal to the "Prime Rate" as listed by The Wall Street Journal on the business
-----------------------
day preceding the date of the Promissory Note. The Promissory Note shall provide
for payment in three equal annual installments of principal and interest on the
first, second and third anniversaries of the closing date. The Promissory Note
shall be prepayable, without penalty, in whole or in part, with prepayments
applied to the last installment or installments coming due.
6. Notices.
6.1 All notices or other communications required under this Agreement or
given in connection herewith shall be in writing and shall either be delivered
personally, in which event the effective date shall be the date of delivery, or
shall be sent by United States mail addressed as hereinafter set forth, postage
pre-paid, registered or certified, return receipt requested, in which event the
effective date shall be the delivery or refusal date as specified on the return
receipt. Unless otherwise directed by notice in writing, all notices shall be
addressed as follows:
(a) To Navigant at:
XxxxxxxxXxxxxxxxx.xxx, inc.
00 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxx
Xxxxxx X. Over, Jr., Esq.
(b) To the Unit Holder at:
The address of the Unit Holder set forth on the
transfer records of Navigant.
7. Termination.
7.1 Notwithstanding any provision herein to the contrary, this Agreement
shall terminate, and neither party shall have any further obligation to the
other, upon the occurrence of any of the following events:
(a) Permanent cessation of the Company's business.
(b) The insolvency, receivership or dissolution of the Company.
5
(c) The voluntary written agreement of Navigant, upon the approval of
its Board of Directors, and the Unit Holder.
(d) The occurrence of both:
(i) the conversion of the Company to a corporation, and
(ii) the consummation of an underwritten public offering of
shares of common stock of the successor corporation to the Company.
(e) any merger or consolidation to which the Company is a party,
except for a merger in which after giving effect to such merger, the holders of
a majority of the Company's Voting Interests (as defined in the Company's
Limited Liability Company Agreement) immediately prior to the merger shall
continue to own a majority of the Voting Interests in the surviving corporation,
(b) any transaction or series of related transactions in which more than 50% of
the Company's Voting Interests are transferred, or (c) a sale or other
disposition of all or substantially all of the Company's assets.
(f) December 31, 2016.
8. Specific Enforcement.
8.1 Because of the unique value of the Units, in addition to any other
remedies which Navigant may have upon the breach of the agreements contained
herein, the obligations of the Unit Holder shall be specifically enforceable.
9. Company Limited Liability Company Agreement.
9.1 Unit Holder hereby understands and acknowledges that such Unit Holder
has read and understands the LLC Agreement and has had ample opportunity to
consult with such Unit Holder's legal and tax advisor prior to signing this
Agreement and exercising the Unit Option. Unit Holder hereby agrees to all
terms and conditions of the LLC Agreement. Unit Holder further acknowledges and
agrees that in the event of a Reorganization (as defined in the LLC Agreement),
Unit Holders' shares in the Successor Corporation (as defined in the LLC
Agreement) shall be subject to the same transfer restrictions contained herein
to which the Unit Holder's Units are subject, until such time that this
Agreement is terminated pursuant to Section 7 hereof.
10. Modification.
10.1 This Agreement may only be altered or amended by a written instrument
signed by Navigant and the Unit Holder setting forth such changes.
6
11. Costs of Enforcement.
11.1 In any action at law or in equity to enforce any of the provisions or
rights under this Agreement, the unsuccessful party of such litigation, as
determined by any court of competent jurisdiction in a final judgment or decree,
shall pay the successful party or parties all costs, expenses and reasonable
attorneys' fees incurred therein by such party or parties (including without
limitation such costs, expenses and fees on any appeals), and if such successful
party shall recover judgment in any action or proceeding, such costs, expenses
and attorneys' fees shall be included as part of the judgment.
12. Severability.
12.1 The invalidity or unenforceability of any provision hereof shall in no
way affect the validity or enforceability of any other provision hereof.
13. Entire Agreement; Counterparts; Headings.
13.1 This Agreement constitutes the entire agreement between the parties
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, representations and understandings. This Agreement
may be executed in counterparts, all of which shall be deemed to be one and the
same instrument, and it shall be sufficient for each party to have executed at
least one, but not necessarily the same, counterpart. The headings contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement in any way. This Agreement has been
negotiated by the respective parties hereto and the language hereof shall not be
construed for or against any party.
14. Assignment.
14.1 This Agreement shall be binding upon the parties and their respective
legal representatives, beneficiaries, successors and assigns.
15. Governing Law.
15.1 This Agreement and the rights and obligations of the parties hereto
shall be governed by and construed and enforced in accordance with the laws of
the State of Delaware, without regard to the conflicts of laws principles of
such State.
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
XXXXXXXXXXXXXXXXX.XXX HOLDINGS, INC.
By: _______________________________________
Title: ____________________________________
Date: _____________________________________
XXXXXXXXXXXXXXXXX.XXX, LLC
By: _______________________________________
Title: ____________________________________
Date: _____________________________________
Unit Holder
___________________________________________
Date: _____________________________________
8
EXHIBIT A
STATEMENT OF ACCEPTANCE
Reference is made to that certain Unit Restriction Agreement effective as
of _________________________, 19__, by and between XxxxxxxxXxxxxxxxx.xxx
Holding, inc., ("Navigant"), XxxxxxxxXxxxxxxxx.xxx LLC (the "Company") and
______________________________ (the "Restriction Agreement"). As a proposed
recipient of certain options covered by said Restriction Agreement and LLC
Agreement, the undersigned hereby agrees that such Units, upon receipt, shall
remain subject to all of the terms and conditions of said Restriction Agreement
and LLC Agreement and all rights and obligations thereunder arising prior to
such receipt, and that upon such receipt the undersigned shall be deemed
automatically to have accepted all of the terms and conditions of said
Restriction Agreement and LLC Agreement as therein provided, and that the
undersigned shall thereafter be deemed to be a signatory party to said
Restriction Agreement and LLC Agreement in the position of the Unit Holder. It
is understood that upon execution of the Statement of Acceptance the same shall
be attached to said Restriction Agreement and LLC Agreement and shall thereupon
form a part thereof without any further action.
Dated: _________________________, 19__.
UNIT HOLDER
________________________________________
Date: __________________________________
EXHIBIT 11.4(D)
UNIT RESTRICTION AGREEMENT
(Navigant Dilutive Units pursuant to Section 11.4(d) of the LLC Agreement)
This Unit Restriction Agreement (the "Agreement") is entered into as of
October ___, 1999, by and between XxxxxxxxXxxxxxxxx.xxx Holdings, inc., a
Delaware corporation ("Navigant"), XxxxxxxxXxxxxxxxx.xxx LLC, a Delaware limited
liability company (the "Company"), and ___________________________________ (the
"Unit Holder").
RECITALS:
1. Effective ___________, 1999, Unit Holder was granted an option to
acquire ___ Common Units in the Company.
2. Unit Holder has exercised all or a portion of such Option.
3. The Company desires to impose restrictions in connection with the Units
acquired by the Unit Holder upon exercise of the Unit Option, and Unit Holder
agrees to accept these restrictions.
AGREEMENT:
Now, therefore, the parties hereto agree as follows:
1. Restriction on Transfer of Units.
1.1 Unit Holder shall not sell, assign, give, pledge, encumber or
otherwise transfer (hereinafter, "transfer") any of the Units, or any right or
interest therein, or any certificate therefor, now owned or hereafter acquired
whether voluntarily, involuntarily or by operation of law, except transfers to
Permitted Transferees as provided in Section 2.1 or bona fide transfers subject
to and made as provided in Article 3 or Article 4. Any transfer or attempted
transfer made in violation of this Agreement shall be void and neither Navigant
nor the Company shall recognize or give effect to such transfer on its books and
records, or recognize the persons or entities to whom such transfer has been
made as the legal or beneficial holder of the Units or Unit Option.
1.2 No transfer or attempted transfer of any Units shall be effective
unless such Units shall remain subject to the terms and conditions of this
Agreement and unless and until the proposed transferee, including a Permitted
Transferee as defined in Section 2.1, shall accept the terms and conditions of
this Agreement by executing and delivering to Navigant a Statement of Acceptance
in the form attached hereto as Exhibit A. Upon the
---------
execution and delivery of the Statement of Acceptance, the transferee shall
thereafter be deemed to be a signatory party to this Agreement in the position
of the Unit Holder.
1.3 Notwithstanding anything to the contrary in this Agreement, any
Units or options to acquire Units which are forfeited by Unit Holder (pursuant
to the terms of any plan, or option grant or other agreement or option) shall be
forfeited to Navigant.
2. Permitted Transfers.
2.1 The Unit Holder shall have the right to transfer all or any part of
the Units to the following transferees (the "Permitted Transferees"), subject to
the requirements of Section 1.2 above: (a) a trust established for the sole
benefit of the Unit Holder or any of the Unit Holder's spouse, children or
grandchildren; and (b) the personal representatives, beneficiaries or estate of
the Unit Holder upon the Unit Holder's death, whether transferred by will or
intestacy.
3. Navigant's Right of First Refusal.
3.1 Navigant shall have the right of first refusal, as hereinafter
provided, with respect to any proposed transfer of Units by the Unit Holder,
except transfers to Permitted Transferees.
3.2 Except with respect to transfers of the Units to Permitted
Transferees, the Unit Holder shall, 60 days prior to a proposed transfer of the
Units, deliver written notice to Navigant stating the number of Units and the
interest therein proposed to be transferred (the "Offered Units"), the name of
the proposed transferee(s) and the manner, time, terms and conditions of the
proposed transfer. Navigant shall, for a period of 60 days following such
notice, have an irrevocable option to purchase all or part of the Offered Units
in accordance with the manner, time, terms and conditions specified in the
notice of proposed transfer.
3.3 Navigant may elect to exercise its option to purchase all or part of
the Offered Units by giving written notice to the Unit Holder of such intention
within the 60 day period following Navigant's receipt of Unit Holder's notice of
proposed transfer. Upon receipt of such notice, the Unit Holder shall be bound
to transfer the Offered Units subject to such notice to Navigant, free and clear
of all liens and encumbrances, and in accordance with the terms set forth in the
notice of proposed transfer.
3.4 If Navigant elects not to exercise its option to purchase all of the
Offered Units during the 60 day period, the Unit Holder may, within 90 days of
the last day of such 60 day period, transfer to the proposed transferee(s) the
part of the Offered Units that Navigant elected not to purchase, but only in
accordance with the terms set forth in the notice of proposed transfer.
Notwithstanding any provision herein to the contrary, all Offered Units
transferred to such transferees in accordance with the provisions of this
2
Section 3.4 shall remain subject to the provisions and restrictions of this
Agreement and all such transferees shall execute and deliver to Navigant a
Statement of Acceptance as provided in Section 1.2. If the Unit Holder does not
make the transfer to the proposed transferee(s) within the 90 day period
provided in this Section 3.4, the Unit Holder shall be required again to comply
with the provisions of this Agreement before the Unit Holder may make any
subsequent transfer of any part of the Offered Units.
3.5 Notwithstanding any provision herein to the contrary, if the notice
of proposed transfer specifies a consideration in other than United States
money, Navigant shall have the right to acquire the Offered Units for the United
States money equivalent of the specified consideration. If the notice of
proposed transfer specifies any other manner, time, term or condition that
cannot be complied with without unreasonable effort, Navigant shall have the
right to acquire the Offered Units by complying with the reasonable equivalent
of the specified manner, time, terms or conditions.
3.6 If the notice of proposed transfer specifies that the Offered Units
are to be transferred without full consideration as a gift, Navigant shall have
the right to acquire the Offered Units at a price per Unit equal to their then
current value as determined pursuant to Article 5. The manner and time at which
the purchase and sale of the Offered Units shall take place shall be determined
in accordance with Article 5.
4. Navigant's Purchase of the Units Upon Termination of Employment.
4.1 Navigant shall have the right to purchase all or any part of the
Units and held by the Unit Holder, upon the terms and conditions provided
herein, in the event that (a) the Unit Holder's full-time employment with all of
Company and Navigant International, Inc. and each of its subsidiary corporations
(or other entities) is terminated for any reason (the "Unit Holder's
Departure").
4.2 Navigant may exercise its right to purchase Units upon the Unit
Holder's Departure by providing written notice of such intention to the Unit
Holder, stating the time, manner, terms and conditions of the repurchase in
accordance with this Section 4.2. Such notice must be given within 60 days
following the date of the Unit Holder's Departure. The purchase price for the
Units that Navigant elects to purchase shall be the Units' then current value as
determined pursuant to Article 5. The manner and time at which the purchase and
sale of the Units shall take place shall be determined in accordance with
Article 5.
4.3 The Unit Holder may retain all of the Units with respect to which
the right of repurchase has not been exercised. Such Units shall remain subject
to the terms and conditions of this Agreement, and the Unit Holder shall comply
with the provisions of Article 3 herein prior to any subsequent transfer of such
Units.
3
4.4 In the event the Unit Holder delivers a notice of proposed transfer
pursuant to Section 3.2 within the period in which Navigant may exercise its
right of repurchase under this Article 4, Navigant may elect to make the
purchase pursuant to either Article 3 or Article 4, in Navigant's sole
discretion.
5. Value of Units; Closing of Purchase and Sale.
5.1 In the case of a purchase made pursuant to Section 3.6, the current
value of the Units, on a per Unit basis, shall be deemed to be the amount paid
per Unit for the Common Units of the Company by investors in the last offering
(a "Qualifying Offering") in which the Company sold Common Units. In the case of
a purchase made pursuant to Article 4, the current value of the Units shall be
the greater of (a) the amount determined pursuant to the preceding sentence, or
(b) the amount paid for the Units. An offering of Common Units by the Company
shall not be deemed to be a Qualifying Offering unless the last sale of Common
Units in such offering occurred not more than one year prior to the
Determination Date (as defined below), and provided further that the gross
proceeds to the Company in such offering were not less than $500,000. If there
is no such Qualifying Offering, then the current value of the Units shall be
determined by agreement between Navigant and the Unit Holder, and failing such
agreement, by an independent appraiser selected by agreement between Navigant
and the Unit Holder. In the absence of agreement concerning the selection of an
independent appraiser, the current value of the Units shall be determined by a
panel of three appraisers selected as follows: The Unit Holder shall select one
independent appraiser, Navigant shall select one independent appraiser and the
two appraisers so selected shall select a third independent appraiser. The
decision of a majority of the three appraisers with respect to the current value
of the Units shall be final and binding upon the parties. If one party selects
an appraiser and the other party fails to select the second appraiser within ten
days after the receipt of notice of the selection of the first appraiser, the
decision of the first appraiser alone shall be final and binding upon the
parties. Cost of the appraisal shall be split equally between the parties. In
the case of a gift referenced in Section 3.6, the Determination Date shall be
the date of receipt by Navigant of the notice of proposed transfer. In case of
the Unit Holder's Departure, the Determination Date shall be the date of the
Unit Holder's Departure.
5.2 A purchase and sale required pursuant to Section 3.6 or Article 4
shall take place at a closing at a time and place designated by Navigant;
provided, however, that the time must be within 90 days of the Determination
Date. At the closing, the Unit Holder shall transfer the Offered Units or the
Units, as the case may be, to Navigant free and clear of all liens and
encumbrances and in accordance with the terms of this Agreement. In return,
Navigant shall pay the Unit Holder not less than 25% of the purchase price in
cash or certified funds and the remainder by execution and delivery of
Navigant's Promissory Note, bearing interest at the rate per annum equal to the
"Prime Rate" as listed by The Wall Street Journal on the business day preceding
-----------------------
the date of the
4
Promissory Note. The Promissory Note shall provide for payment in three equal
annual installments of principal and interest on the first, second and third
anniversaries of the closing date. The Promissory Note shall be prepayable,
without penalty, in whole or in part, with prepayments applied to the last
installment or installments coming due.
6. Notices.
6.1 All notices or other communications required under this Agreement or
given in connection herewith shall be in writing and shall either be delivered
personally, in which event the effective date shall be the date of delivery, or
shall be sent by United States mail addressed as hereinafter set forth, postage
pre-paid, registered or certified, return receipt requested, in which event the
effective date shall be the delivery or refusal date as specified on the return
receipt. Unless otherwise directed by notice in writing, all notices shall be
addressed as follows:
(a) To Navigant at:
XxxxxxxxXxxxxxxxx.xxx, inc.
00 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxx
Xxxxxx X. Over, Jr., Esq.
(b) To the Unit Holder at:
The address of the Unit Holder set forth on the
transfer records of Navigant.
7. Termination.
7.1 Notwithstanding any provision herein to the contrary, this Agreement
shall terminate, and neither party shall have any further obligation to the
other, upon the occurrence of any of the following events:
(a) Permanent cessation of the Company's business.
(b) The insolvency, receivership or dissolution of the Company.
(c) The voluntary written agreement of Navigant, upon the approval
of its Board of Directors, and the Unit Holder.
(d) The occurrence of both:
(i) the conversion of the Company to a corporation, and
5
(ii) the consummation of an underwritten public offering of
shares of common stock of the successor corporation to the Company.
(e) any merger or consolidation to which the Company is a party,
except for a merger in which after giving effect to such merger, the holders of
a majority of the Company's Voting Interests (as defined in the Company's
Limited Liability Company Agreement) immediately prior to the merger shall
continue to own a majority of the Voting Interests in the surviving corporation,
(b) any transaction or series of related transactions in which more than 50% of
the Company's Voting Interests are transferred, or (c) a sale or other
disposition of all or substantially all of the Company's assets.
(f) December 31, 2016.
8. Specific Enforcement.
8.1 Because of the unique value of the Units, in addition to any other
remedies which Navigant may have upon the breach of the agreements contained
herein, the obligations of the Unit Holder shall be specifically enforceable.
9. Company Limited Liability Company Agreement.
9.1 Unit Holder hereby understands and acknowledges that such Unit
Holder has read and understands the LLC Agreement and has had ample opportunity
to consult with such Unit Holder's legal and tax advisor prior to signing this
Agreement and exercising the Unit Option. Unit Holder hereby agrees to all terms
and conditions of the LLC Agreement. Unit Holder further acknowledges and agrees
that in the event of a Reorganization (as defined in the LLC Agreement), Unit
Holders' shares in the Successor Corporation (as defined in the LLC Agreement)
shall be subject to the same transfer restrictions contained herein to which the
Unit Holder's Units are subject, until such time that this Agreement is
terminated pursuant to Section 7 hereof.
10. Modification.
10.1 This Agreement may only be altered or amended by a written
instrument signed by Navigant and the Unit Holder setting forth such changes.
11. Costs of Enforcement.
11.1 In any action at law or in equity to enforce any of the provisions
or rights under this Agreement, the unsuccessful party of such litigation, as
determined by any court of competent jurisdiction in a final judgment or decree,
shall pay the successful party or parties all costs, expenses and reasonable
attorneys' fees incurred therein by such party or parties (including without
limitation such costs, expenses and fees on any
6
appeals), and if such successful party shall recover judgment in any action or
proceeding, such costs, expenses and attorneys' fees shall be included as part
of the judgment.
12. Severability.
12.1 The invalidity or unenforceability of any provision hereof shall in
no way affect the validity or enforceability of any other provision hereof.
13. Entire Agreement; Counterparts; Headings.
13.1 This Agreement constitutes the entire agreement between the parties
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, representations and understandings. This Agreement
may be executed in counterparts, all of which shall be deemed to be one and the
same instrument, and it shall be sufficient for each party to have executed at
least one, but not necessarily the same, counterpart. The headings contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement in any way. This Agreement has been
negotiated by the respective parties hereto and the language hereof shall not be
construed for or against any party.
14. Assignment.
14.1 This Agreement shall be binding upon the parties and their
respective legal representatives, beneficiaries, successors and assigns.
15. Governing Law.
15.1 This Agreement and the rights and obligations of the parties hereto
shall be governed by and construed and enforced in accordance with the laws of
the State of Delaware, without regard to the conflicts of laws principles of
such State.
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
XXXXXXXXXXXXXXXXX.XXX HOLDINGS, INC.
By:____________________________________
Title:_________________________________
Date:__________________________________
XXXXXXXXXXXXXXXXX.XXX, LLC
By:____________________________________
Title:_________________________________
Date:__________________________________
Unit Holder
_______________________________________
Date:__________________________________
8
EXHIBIT A
STATEMENT OF ACCEPTANCE
Reference is made to that certain Unit Restriction Agreement effective as
of _________________________, 19__, by and between XxxxxxxxXxxxxxxxx.xxx
Holding, inc., ("Navigant"), XxxxxxxxXxxxxxxxx.xxx LLC (the "Company") and
______________________________ (the "Restriction Agreement"). As a proposed
recipient of certain options covered by said Restriction Agreement and LLC
Agreement, the undersigned hereby agrees that such Units, upon receipt, shall
remain subject to all of the terms and conditions of said Restriction Agreement
and LLC Agreement and all rights and obligations thereunder arising prior to
such receipt, and that upon such receipt the undersigned shall be deemed
automatically to have accepted all of the terms and conditions of said
Restriction Agreement and LLC Agreement as therein provided, and that the
undersigned shall thereafter be deemed to be a signatory party to said
Restriction Agreement and LLC Agreement in the position of the Unit Holder. It
is understood that upon execution of the Statement of Acceptance the same shall
be attached to said Restriction Agreement and LLC Agreement and shall thereupon
form a part thereof without any further action.
Dated: _________________________, 19__.
UNIT HOLDER
____________________________________________
Date:_______________________________________
EXHIBIT 11.4(E)
UNIT RESTRICTION AGREEMENT
(Member Dilutive Units pursuant to Section 11.4(e) of the LLC Agreement)
This Unit Restriction Agreement (the "Agreement") is entered into as of
October ___, 1999, by and between XxxxxxxxXxxxxxxxx.xxx Holdings, inc., a
Delaware corporation ("Navigant"), XxxxxxxxXxxxxxxxx.xxx LLC, a Delaware limited
liability company (the "Company"), and ___________________________________ (the
"Unit Holder").
RECITALS:
1. Effective ___________, 1999, Unit Holder was granted an option to
acquire ___ Common Units in the Company.
2. Unit Holder has exercised all or a portion of such Option.
3. The Company desires to impose restrictions in connection with the Units
acquired by the Unit Holder upon exercise of the Unit Option, and Unit Holder
agrees to accept these restrictions.
AGREEMENT:
Now, therefore, the parties hereto agree as follows:
1. Restriction on Transfer of Units.
1.1 Unit Holder shall not sell, assign, give, pledge, encumber or
otherwise transfer (hereinafter, "transfer") any of the Units, or any right or
interest therein, or any certificate therefor, now owned or hereafter acquired
whether voluntarily, involuntarily or by operation of law, except transfers to
Permitted Transferees as provided in Section 2.1 or bona fide transfers subject
to and made as provided in Article 3 or Article 4. Any transfer or attempted
transfer made in violation of this Agreement shall be void and neither Navigant
nor the Company shall recognize or give effect to such transfer on its books and
records, or recognize the persons or entities to whom such transfer has been
made as the legal or beneficial holder of the Units or Unit Option.
1.2 No transfer or attempted transfer of any Units shall be effective
unless such Units shall remain subject to the terms and conditions of this
Agreement and unless and until the proposed transferee, including a Permitted
Transferee as defined in Section 2.1, shall accept the terms and conditions of
this Agreement by executing and delivering to Navigant a Statement of Acceptance
in the form attached hereto as Exhibit A. Upon the
---------
execution and delivery of the Statement of Acceptance, the transferee shall
thereafter be deemed to be a signatory party to this Agreement in the position
of the Unit Holder.
1.3 Notwithstanding anything to the contrary in this Agreement, any Units
or options to acquire Units which are forfeited by Unit Holder (pursuant to the
terms of any plan, or option grant or other agreement or document) shall be
forfeited to the Company.
2. Permitted Transfers.
2.1 The Unit Holder shall have the right to transfer all or any part of
the Units to the following transferees (the "Permitted Transferees"), subject to
the requirements of Section 1.2 above: (a) a trust established for the sole
benefit of the Unit Holder or any of the Unit Holder's spouse, children or
grandchildren; and (b) the personal representatives, beneficiaries or estate of
the Unit Holder upon the Unit Holder's death, whether transferred by will or
intestacy.
3. Company's Right of First Refusal.
3.1 The Company shall have the right of first refusal, as hereinafter
provided, with respect to any proposed transfer of Units by the Unit Holder,
except transfers to Permitted Transferees.
3.2 Except with respect to transfers of the Units to Permitted
Transferees, the Unit Holder shall, 60 days prior to a proposed transfer of the
Units or Unit Options, deliver written notice to Company stating the number of
Units and the interest therein proposed to be transferred (the "Offered Units"),
the name of the proposed transferee(s) and the manner, time, terms and
conditions of the proposed transfer. Company shall, for a period of 60 days
following such notice, have an irrevocable option to purchase all or part of the
Offered Units in accordance with the manner, time, terms and conditions
specified in the notice of proposed transfer.
3.3 Company may elect to exercise its option to purchase all or part of
the Offered Units by giving written notice to the Unit Holder of such intention
within the 60 day period following Company's receipt of Unit Holder's notice of
proposed transfer. Upon receipt of such notice, the Unit Holder shall be bound
to transfer the Offered Units subject to such notice to Company, free and clear
of all liens and encumbrances, and in accordance with the terms set forth in the
notice of proposed transfer.
3.4 If Company elects not to exercise its option to purchase all of the
Offered Units during the 60 day period, the Unit Holder may, within 90 days of
the last day of such 60 day period, transfer to the proposed transferee(s) the
part of the Offered Units that Navigant elected not to purchase, but only in
accordance with the terms set forth in the notice of proposed transfer.
Notwithstanding any provision herein to the contrary, all Offered Units
transferred to such transferees in accordance with the provisions of this
2
Section 3.4 shall remain subject to the provisions and restrictions of this
Agreement and all such transferees shall execute and deliver to Navigant a
Statement of Acceptance as provided in Section 1.2. If the Unit Holder does not
make the transfer to the proposed transferee(s) within the 90 day period
provided in this Section 3.4, the Unit Holder shall be required again to comply
with the provisions of this Agreement before the Unit Holder may make any
subsequent transfer of any part of the Offered Units.
3.5 Notwithstanding any provision herein to the contrary, if the notice of
proposed transfer specifies a consideration in other than United States money,
the Company shall have the right to acquire the Offered Units for the United
States money equivalent of the specified consideration. If the notice of
proposed transfer specifies any other manner, time, term or condition that
cannot be complied with without unreasonable effort, the Company shall have the
right to acquire the Offered Units by complying with the reasonable equivalent
of the specified manner, time, terms or conditions.
3.6 If the notice of proposed transfer specifies that the Offered Units
are to be transferred without full consideration as a gift, the Company shall
have the right to acquire the Offered Units at a price per Unit equal to their
then current value as determined pursuant to Article 5. The manner and time at
which the purchase and sale of the Offered Units shall take place shall be
determined in accordance with Article 5.
4. Company's Purchase of the Units Upon Termination of Employment.
4.1 The Company shall have the right to purchase all or any part of the
Units and held by the Unit Holder, upon the terms and conditions provided
herein, in the event that (a) the Unit Holder's full-time employment with all of
Company and each of its subsidiary corporations (or other entities) is
terminated for any reason (the "Unit Holder's Departure").
4.2 The Company may exercise its right to purchase Units upon the Unit
Holder's Departure by providing written notice of such intention to the Unit
Holder, stating the time, manner, terms and conditions of the repurchase in
accordance with this Section 4.2. Such notice must be given within 60 days
following the date of the Unit Holder's Departure. The purchase price for the
Units that the Company elects to purchase shall be the Units' then current value
as determined pursuant to Article 5. The manner and time at which the purchase
and sale of the Units shall take place shall be determined in accordance with
Article 5.
4.3 The Unit Holder may retain all of the Units with respect to which the
right of repurchase has not been exercised. Such Units shall remain subject to
the terms and conditions of this Agreement, and the Unit Holder shall comply
with the provisions of Article 3 herein prior to any subsequent transfer of such
Units.
3
4.4 In the event the Unit Holder delivers a notice of proposed transfer
pursuant to Section 3.2 within the period in which the Company may exercise its
right of repurchase under this Article 4, the Company may elect to make the
purchase pursuant to either Article 3 or Article 4, in the Company's sole
discretion.
5. Value of Units; Closing of Purchase and Sale.
5.1 In the case of a purchase made pursuant to Section 3.6, the current
value of the Units, on a per Unit basis, shall be deemed to be the amount paid
per Unit for the Common Units of the Company by investors in the last offering
(a "Qualifying Offering") in which the Company sold Common Units. In the case
of a purchase made pursuant to Article 4, the current value of the Units shall
be the greater of (a) the amount determined pursuant to the preceding sentence,
or (b) the amount paid for the Units. An offering of Common Units by the
Company shall not be deemed to be a Qualifying Offering unless the last sale of
Common Units in such offering occurred not more than one year prior to the
Determination Date (as defined below), and provided further that the gross
proceeds to the Company in such offering were not less than $500,000. If there
is no such Qualifying Offering, then the current value of the Units shall be
determined by agreement between the Company and the Unit Holder, and failing
such agreement, by an independent appraiser selected by agreement between the
Company and the Unit Holder. In the absence of agreement concerning the
selection of an independent appraiser, the current value of the Units shall be
determined by a panel of three appraisers selected as follows: The Unit Holder
shall select one independent appraiser, the Company shall select one independent
appraiser and the two appraisers so selected shall select a third independent
appraiser. The decision of a majority of the three appraisers with respect to
the current value of the Units shall be final and binding upon the parties. If
one party selects an appraiser and the other party fails to select the second
appraiser within ten days after the receipt of notice of the selection of the
first appraiser, the decision of the first appraiser alone shall be final and
binding upon the parties. Cost of the appraisal shall be split equally between
the parties. In the case of a gift referenced in Section 3.6, the Determination
Date shall be the date of receipt by the Company of the notice of proposed
transfer. In case of the Unit Holder's Departure, the Determination Date shall
be the date of the Unit Holder's Departure.
5.2 A purchase and sale required pursuant to Section 3.6 or Article 4
shall take place at a closing at a time and place designated by the Company;
provided, however, that the time must be within 90 days of the Determination
Date. At the closing, the Unit Holder shall transfer the Offered Units or the
Units, as the case may be, to the Company free and clear of all liens and
encumbrances and in accordance with the terms of this Agreement. In return, the
Company shall pay the Unit Holder not less than 25% of the purchase price in
cash or certified funds and the remainder by execution and delivery of the
Company's Promissory Note, bearing interest at the rate per annum equal to the
"Prime Rate" as listed by The Wall Street Journal on the business day preceding
-----------------------
the date
4
of the Promissory Note. The Promissory Note shall provide for payment
in three equal annual installments of principal and interest on the first,
second and third anniversaries of the closing date. The Promissory Note shall
be prepayable, without penalty, in whole or in part, with prepayments applied to
the last installment or installments coming due.
6. Notices.
6.1 All notices or other communications required under this Agreement or
given in connection herewith shall be in writing and shall either be delivered
personally, in which event the effective date shall be the date of delivery, or
shall be sent by United States mail addressed as hereinafter set forth, postage
pre-paid, registered or certified, return receipt requested, in which event the
effective date shall be the delivery or refusal date as specified on the return
receipt. Unless otherwise directed by notice in writing, all notices shall be
addressed as follows:
(a) To the Company at:
XxxxxxxxXxxxxxxxx.xxx, LLC
00 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxx
Xxxxxx X. Over, Jr., Esq.
(b) To the Unit Holder at:
The address of the Unit Holder set forth on the
transfer records of Navigant.
7. Termination.
7.1 Notwithstanding any provision herein to the contrary, this Agreement
shall terminate, and neither party shall have any further obligation to the
other, upon the occurrence of any of the following events:
(a) Permanent cessation of the Company's business.
(b) The insolvency, receivership or dissolution of the Company.
(c) The voluntary written agreement of Navigant, upon the approval of
its Board of Directors, and the Unit Holder.
(d) The occurrence of both:
(i) the conversion of the Company to a corporation, and
5
(ii) the consummation of an underwritten public offering of
shares of common stock of the successor corporation to the Company.
(e) any merger or consolidation to which the Company is a party,
except for a merger in which after giving effect to such merger, the holders of
a majority of the Company's Voting Interests (as defined in the Company's
Limited Liability Company Agreement) immediately prior to the merger shall
continue to own a majority of the Voting Interests in the surviving corporation,
(b) any transaction or series of related transactions in which more than 50% of
the Company's Voting Interests are transferred, or (c) a sale or other
disposition of all or substantially all of the Company's assets.
(f) December 31, 2016.
8. Specific Enforcement.
8.1 Because of the unique value of the Units, in addition to any other
remedies which Navigant may have upon the breach of the agreements contained
herein, the obligations of the Unit Holder shall be specifically enforceable.
9. Company Limited Liability Company Agreement.
9.1 Unit Holder hereby understands and acknowledges that such Unit Holder
has read and understands the LLC Agreement and has had ample opportunity to
consult with such Unit Holder's legal and tax advisor prior to signing this
Agreement and exercising the Unit Option. Unit Holder hereby agrees to all
terms and conditions of the LLC Agreement. Unit Holder further acknowledges and
agrees that in the event of a Reorganization (as defined in the LLC Agreement),
Unit Holders' shares in the Successor Corporation (as defined in the LLC
Agreement) shall be subject to the same transfer restrictions contained herein
to which the Unit Holder's Units are subject, until such time that this
Agreement is terminated pursuant to Section 7 hereof.
10. Modification.
10.1 This Agreement may only be altered or amended by a written instrument
signed by Navigant and the Unit Holder setting forth such changes.
11. Costs of Enforcement.
11.1 In any action at law or in equity to enforce any of the provisions or
rights under this Agreement, the unsuccessful party of such litigation, as
determined by any court of competent jurisdiction in a final judgment or decree,
shall pay the successful party or parties all costs, expenses and reasonable
attorneys' fees incurred therein by such party or parties (including without
limitation such costs, expenses and fees on any
6
appeals), and if such successful party shall recover judgment in any action or
proceeding, such costs, expenses and attorneys' fees shall be included as part
of the judgment.
12. Severability.
12.1 The invalidity or unenforceability of any provision hereof shall in no
way affect the validity or enforceability of any other provision hereof.
13. Entire Agreement; Counterparts; Headings.
13.1 This Agreement constitutes the entire agreement between the parties
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, representations and understandings. This Agreement
may be executed in counterparts, all of which shall be deemed to be one and the
same instrument, and it shall be sufficient for each party to have executed at
least one, but not necessarily the same, counterpart. The headings contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement in any way. This Agreement has been
negotiated by the respective parties hereto and the language hereof shall not be
construed for or against any party.
14. Assignment.
14.1 This Agreement shall be binding upon the parties and their respective
legal representatives, beneficiaries, successors and assigns.
15. Governing Law.
15.1 This Agreement and the rights and obligations of the parties hereto
shall be governed by and construed and enforced in accordance with the laws of
the State of Delaware, without regard to the conflicts of laws principles of
such State.
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
XXXXXXXXXXXXXXXXX.XXX, LLC
By: __________________________________
Title: _______________________________
Date: ________________________________
Unit Holder
______________________________________
Date: ________________________________
8
EXHIBIT A
STATEMENT OF ACCEPTANCE
Reference is made to that certain Unit Restriction Agreement effective as
of _________________________, 19__, by and between XxxxxxxxXxxxxxxxx.xxx
Holding, inc., ("Navigant"), XxxxxxxxXxxxxxxxx.xxx LLC (the "Company") and
______________________________ (the "Restriction Agreement"). As a proposed
recipient of certain options covered by said Restriction Agreement and LLC
Agreement, the undersigned hereby agrees that such Units, upon receipt, shall
remain subject to all of the terms and conditions of said Restriction Agreement
and LLC Agreement and all rights and obligations thereunder arising prior to
such receipt, and that upon such receipt the undersigned shall be deemed
automatically to have accepted all of the terms and conditions of said
Restriction Agreement and LLC Agreement as therein provided, and that the
undersigned shall thereafter be deemed to be a signatory party to said
Restriction Agreement and LLC Agreement in the position of the Unit Holder. It
is understood that upon execution of the Statement of Acceptance the same shall
be attached to said Restriction Agreement and LLC Agreement and shall thereupon
form a part thereof without any further action.
Dated: _________________________, 19__.
UNIT HOLDER
___________________________________________
Date: _____________________________________
Exhibit 13.1
NAME, ADDRESS AND FACSIMILE NUMBER OF EQUITY OWNERS
---------------------------------------------------
Name/Address Facsimile Number
Navigant International, Inc. 303-706-0678
00 Xxxxxxxxx Xxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
With a copy to: 303-295-8261
Xxxxx X. Xxxxxx, Esq.
Holland & Xxxx LLP
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Och-Ziff Partners
Och-Ziff Capital Management Group
CitiCorp Center
000 Xxxx 00/xx/
00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
----------------------------------------- ----------------------
With a copy to:
Xxxxxxx X. Xxxxxxxxxx, Esq. 000-000-0000
Xxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
-----------------------------------------
-----------------------------------------
