EXHIBIT 10.52
FOURTH AMENDED AND RESTATED OPERATING AGREEMENT dated as of September 28,
2005, of LPA INVESTMENT LLC, a Delaware limited liability company (the
"Company"), among X.X. XXXXXX PARTNERS (23A SBIC), L.P., a Delaware limited
liability partnership ("JPMP"); XXXXXX X. XXXX ("King"); KING CHILDREN TRUST
PARTNERSHIP (the "King Partnership"), and the other Persons signatory hereto
from time to time.
The parties are entering into this Agreement for the purpose of
amending and restating the Third Amended and Restated Operating Agreement of the
Company dated as of July 31, 2003. The Company has been formed as a limited
liability company pursuant to the provisions of the Delaware Limited Liability
Company Act, 6 Del. C. Section 18-101 et seq. (the "Delaware Act"). This
Agreement is the limited liability agreement of the Company for purposes of the
Delaware Act.
ACCORDINGLY, in consideration of the mutual covenants and agreements
contained in this Agreement, the sufficiency of which is hereby acknowledged,
the parties agree as set forth below.
1. Definitions; Rules of Construction.
(a) When used in this Agreement, the following capitalized terms have
the meanings ascribed to them below:
"Affiliate" means, with respect to any Person, (i) a director or
executive officer of such Person, (ii) a spouse, parent, sibling or descendant
of such Person (or a spouse, parent, sibling or descendant of any director or
executive officer of such Person), and (iii) any other Person that, directly or
indirectly through one or more intermediaries controls, is controlled by or is
under common control with such Person. The term "control" means and includes the
possession, directly or indirectly, of the power to direct the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Applicable Law" means, as to any Person, all provisions of laws,
statutes, ordinances, rules, regulations, permits, certificates or orders of any
Governmental Authority applicable to such Person or any of its assets or
property and all judgments applicable to such Person.
"Board of Managers" means the board of managers of the Company
consisting of JPMP and King. The Chief Executive Officer of Parent shall be a
non-voting observer of the Board of Managers entitled to attend all meetings of
the Board of Managers scheduled from time to time.
"Capital Contribution" means, with respect to any Member, the amount
of capital contributed by such Member to the Company, as determined in
accordance with Section 8.
"Cause", with respect to any Other Member,
(i) shall have the meaning ascribed to such term in such Other
Member's written employment agreement with the Parent or any of its
Subsidiaries, as applicable,
(ii) if such Other Member is not a party to a written employment
agreement with Parent or its Subsidiaries at such time or if "Cause" is not
defined in such Other Member's written employment agreement, shall mean (A)
any action by such Other Member involving willful malfeasance in connection
with his employment having a material adverse effect on the Company or its
Subsidiaries and their Affiliates, (B) material breach by such Other Member
of this Agreement or any other agreement entered into between such Other
Member and the Company or its Subsidiaries and their Affiliates after a
written notice of such breach shall have been delivered to such Other
Member and, if such breach can be cured, such breach shall not have been
cured prior to the tenth day after delivery of such notice, (C) willful
neglect of duties of such other Member or the failure to follow the lawful
directions of the Company, its Subsidiaries and their Affiliates after a
written demand for substantial performance is delivered to such Other
Member by the board of directors of Parent which demand specifically
identifies the manner in which the board of directors of Parent believes
that he has not substantially performed his duties or (D) such Other Member
being convicted of any felony (or any misdemeanor involving the property or
assets of the Company or any of its Subsidiaries) under the laws of the
United States or any State. For purposes of this definition of Cause,
action or inaction by the Other Member shall not be considered "willful"
unless done or omitted by such Other Member (a) intentionally and not in
good faith, and (b) without reasonable belief that such Other Member's
action was in the best interests of the Company or the Parent or its
Subsidiaries, and shall not include failure to act by reason of partial or
total incapacity due to physical or mental illness.
"Class A Units" means the class A units of the Company, which the
Company shall be authorized to issue from time to time pursuant to such
agreements as the Board of Managers shall approve, including pursuant to options
or warrants.
"Class B Units" means the class B units of the Company, which the
Company shall be authorized to issue from time to time pursuant to such
agreements as the Board of Managers shall approve, including pursuant to options
or warrants.
"Class C Units" means the class C units of the Company, which the
Company shall be authorized to issue from time to time pursuant to such
agreements as the Board of Managers shall approve, including pursuant to options
or warrants.
"Code" means the Internal Revenue Code of 1986, as amended.
"Disability" means the incapacitation or disability of such Other
Member by accident, sickness or otherwise so as to render such Other Member
mentally or physically
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incapable of performing the services required to be performed by such Other
Member pursuant to the terms of his or her employment with the Company, its
Subsidiaries or their Affiliates, as applicable, for any period of ninety (90)
consecutive days or for an aggregate of 180 days in any period of 365
consecutive days.
"Employment Termination Date" means the date such Other Member's
employment with the Company, its Subsidiaries or their Affiliates is terminated.
"Encumbrance" means any mortgage, lien, judgment, claim, security
interest, pledge, escrow, charge or other encumbrance of any kind or character
whatsoever.
"Fair Market Value Evaluation Committee" shall have the meaning set
forth in Section 12(b).
"Good Reason", with respect to any Other Member,
(i) shall have the meaning ascribed to such term in such Other
Member's written employment agreement with the Parent or any of its
Subsidiaries, as applicable, or
(ii) if such Other Member is not a party to a written employment
agreement with Parent or its Subsidiaries at such time or if "Good Reason"
is not defined in such Other Member's written employment agreement, shall
mean the occurrence of any of the following events without such Other
Member's express prior written consent and which event shall not have been
cured within a 10 day period after notice from such Other Member:
(A) any material reduction by Parent, its Subsidiaries and
their Affiliates of such Other Member's duties or responsibilities; or
(B) a reduction by Parent, its Subsidiaries and their
Affiliates in such Other Member's base salary as in effect at the
commencement of employment or as the same may be increased from time
to time during the terms of such Other Member's employment.
"Governmental Authority" means any domestic or foreign government or
political subdivision thereof, whether on a federal, state or local level and
whether executive, legislative or judicial in nature, including any agency,
authority, board, bureau, commission, court, department or other instrumentality
thereof.
"Heritage Member" means (i) JPMP, King and the King Partnership so
long as they are Members and (ii) any other Member designated a "Heritage
Member" by the Board of Managers from time to time.
"Initial Distribution Amount" means an amount equal to the sum of (x)
$32,000,000 and (y) the additional Capital Contributions, if any, made by JPMP
after the date hereof.
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"Interest" means the ownership interest of a Member in the Company,
consisting of (i) such Member's ownership of Units and right to receive a
portion of distributions, (ii) such Member's right to vote or grant or withhold
consents with respect to Company matters as provided herein or in the Delaware
Act and (iii) such Member's other rights and privileges as herein provided.
"Joinder" means the Joinder in the form of Exhibit B attached hereto
or such other form approved by the Board of Managers from time to time.
"Majority in Interest of the Members" means, at any time, the Members
who hold in the aggregate greater than 50% of the Class A Units.
"Members" shall mean any Person holding a Unit and who shall be
admitted as additional or substituted Members pursuant to this Agreement, so
long as they remain Members.
"Net Profits and Net Losses" means the net taxable income or net
taxable loss of the Company, respectively, as determined for federal income tax
purposes, for each fiscal year of the Company, plus any income that is exempt
from federal income tax and minus expenditures that are not deductible in
computing federal taxable income and not properly chargeable to Capital
Accounts, in each case to the extent such items are not otherwise taken into
account in computing Net Profits or Net Losses.
"Other Member" means a Member who is not a Heritage Member.
"Other Member Units" means (i) the Units and any other Securities of
the Company acquired by such Other Member from time to time and (ii) any
Securities issued or issuable directly or indirectly with respect to the
Securities referred to in clause (i) above by way of conversion, dividend, or
stock split or in connection with a combination, recapitalization, merger,
consolidation or other reorganization.
"Parent" means LPA Holding Corp., a Delaware corporation.
"Person" shall be construed broadly and shall include an individual, a
partnership, a corporation, an association, a joint stock company, a limited
liability company, a trust, a joint venture, an unincorporated organization and
a governmental entity or any department, agency or political subdivision
thereof.
"Permitted Transfer" means, in the case of any Other Member, a
Transfer of units to (i) an immediate family member of such Other Member or (ii)
a trust or estate planning-related entity for the benefit of such Other Member.
"Permitted Transferee" means, in the case of any Other Member, each
transferee of Other Member Units pursuant to a Permitted Transfer consummated in
accordance with Section 13(e) hereof. Each Permitted Transferee shall be deemed
to be an "Other Member".
"Repurchase Notice" means the written notice of the Company or its
designees notifying such Other Member of (i) the Company's or its designee's
intent to exercise its or their rights under Section 12; (ii) the number of
Other Member Units to be purchased; (iii) the price to
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be paid for each Other Member Unit; and (iv) the date for consummation of the
proposed purchase of such Other Member Units.
"Regulatory Sideletter" shall have the meaning set forth in Section
6(a).
"Sale Transaction" means the consummation of (i) the Transfer (in one
or a series of related transactions) of all or substantially all of the
Company's assets to a Person or a group of Persons acting in concert; (ii) the
sale or transfer (in one or a series of related transactions) of a majority of
the outstanding Securities of the Company to one Person or a group of Persons
acting in concert; or (iii) the merger or consolidation of the Company with or
into another Person, in each case in clauses (ii) and (iii) above, under
circumstances in which the holders of a majority of the voting power of the
outstanding Securities of the Company immediately prior to such transaction own
less than a majority in voting power of the outstanding Securities of the
Company or the surviving or resulting corporation or acquirer, as the case may
be, immediately following such transaction. A sale (or multiple related sales)
of one or more Subsidiaries of the Company (whether by way of merger,
consolidation, reorganization or sale of all or substantially all assets or
Securities) which constitutes all or substantially all of the consolidated
assets of the Company shall be deemed a Sale Transaction.
"Securities" means "Securities" as defined in Section 2(1) of the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"Service Factor" for such Other Member shall be the number of months
specified in such Other Member's executed Joinder Agreement.
"Subsidiary" means with respect to any Person, any limited liability
company, partnership or corporation of which the units of control having a
majority of the general voting power in electing the board of directors or
managers of such entity are, at the time as of which any determination is being
made, owned by such Person either directly or indirectly through subsidiaries.
"Transferee" means a Person acquiring Securities of the Company
(including Other Member Units) through a Transfer.
"Trigger Event" means written notice to the Company by JPMP of its
election to increase the number of votes granted to JPMP as a member of the
Board of Managers pursuant to Section 5 hereof.
"Units" means collectively or individually the Class A Units, the
Class B Units and the Class C Units and any other Securities issued by the
Company in exchange for or as a distribution related to any of the foregoing.
"Unvested Units" means a number of Other Member Units equal to the
total number of Other Member Units held by such Other Member as of the date of
the Repurchase Notice minus the number of Vested Units held by such Other Member
as of the date of the Repurchase Notice.
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"Vested Units" means the product of (1) the total number of Other
Member Units held by such Other Member as of the date of the Repurchase Notice
and (2) a fraction, the numerator of which is the Service Factor plus the number
of months that have passed since the date such Other Member first becomes a
"Member" hereunder through the Employment Termination Date and the denominator
of which is 48.
(b) The title of and the section and paragraph headings in this
Agreement are for convenience of reference only and shall not govern the
interpretation of any of the terms or provisions of this Agreement.
(c) The use herein of the masculine, feminine or neuter forms shall
also denote the other forms, as in each case the context may require.
2. Name; Formation; Issuance of Units.
(a) The name of the Company shall be "LPA Investment LLC" or such
other name as the Board of Managers may from time to time hereafter designate.
(b) The Company was formed upon the execution and filing by Xxxx X.
Xxxxxxxxx (such Person being hereby authorized to take such action) with the
Secretary of State of the State of Delaware of a certificate of formation of the
Company on March 13, 1998.
(c) The Company shall be authorized to issue from time to time up to
1,000,000 Units, of which 750,000 shall be Class A Units, 150,000 shall be Class
B Units and 100,000 shall be Class C Units. Units may be issued pursuant to such
agreements as the Board of Managers shall approve, including pursuant to options
or warrants.
(d) On the date hereof, each Member hereby agrees to exchange its
outstanding equity Securities in the Company for the number and class of Units
set forth on Schedule I. Each Member shall retain the Capital Account it had on
the date hereof, which is reflected on Schedule I.
(e) Schedule II sets forth (i) the names of the Members, (ii) the
number of Units held by each such Member on the date hereof after giving effect
to the transactions contemplated by Section 2(d) and (iii) the Capital Account
of each such Member. Without further action from the Company or any of the
Members, Schedule II shall be amended from time to time to record the effects of
(i) the addition of any new Members, (ii) the issuance and purchase of any
additional Units and (iii) changes in the Capital Accounts of the Members.
(f) The parties hereto have previously ratified and confirmed the
filing of the Certificate of Formation.
3. Purpose.
The purpose of the Company shall be to engage in any lawful business
that may be engaged in by a limited liability company organized under the
Delaware Act, as such business activities may be determined by the Board of
Managers from time to time.
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4. Offices.
(a) The principal office of the Company, and such additional offices
as the Board of Managers may determine to establish, shall be located at such
place or places inside or outside the State of Delaware as the Board of Managers
may designate from time to time.
(b) The registered office of the Company in the State of Delaware and
the registered agent of the Company for service of process at such address are
as set forth in the Certificate of Formation.
5. Management of the Company.
(a) Subject to the delegation of rights and powers provided for
herein, the Board of Managers shall have the sole right to manage the business
of the Company and shall have all powers and rights necessary, appropriate or
advisable to effectuate and carry out the purposes and business of the Company.
Prior to a Trigger Event, the Board of Managers shall have five votes, with JPMP
having two votes and King having three votes. After a Trigger Event, the Board
of Managers shall have five votes, with JPMP having four votes and King having
one vote. A member of the Board of Managers that is not an individual may act
through its duly authorized representative. In his/her capacity as a non-voting
observer of the Board of Managers, the Chief Executive Officer of Parent shall
be entitled to: (i) attend all meetings of the Board of Managers and receive
prior notice of such meetings and (ii) receive all reports and information
provided to the other members of the Board of Managers from time to time solely
in their capacity as members of the Board of Managers.
(b) No Member, by reason of such Member's status as such, shall have
any authority to act for or bind the Company but shall have only the right to
vote on or approve the actions herein specified to be voted on or approved by
such Member.
(c) Except as otherwise expressly provided for herein, no Other Member
shall have any voting rights hereunder or under the LLC Act with respect to
their ownership of Class A Units, Class B Units or Class C Units.
(d) The officers of the Company, if any, shall be, and shall be
elected, removed and perform such functions, as are determined by the Board of
Managers from time to time The Board of Managers may appoint, employ, or
otherwise contract with such other Persons for the transaction of the business
of the Company or the performance of services for or on behalf of the Company as
it shall determine in its sole discretion. The Board of Managers may delegate to
any officer of the Company or to any such other Person such authority to act on
behalf of the Company as the Board of Managers may from time to time deem
appropriate in its sole discretion.
(e) Except as otherwise provided by the Board of Managers, when the
taking of such action has been authorized by the Board of Managers, any officer
of the Company or any other Person specifically authorized by the Board of
Managers may execute any contract or other agreement or document on behalf of
the Company and may execute and file on behalf of the Company with the Secretary
of State of the State of Delaware any certificates of amendment to the Company's
certificate of formation, one or more restated certificates of formation and
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certificates of merger or consolidation and, upon the dissolution and completion
of winding up of the Company, or as otherwise provided in the Delaware Act, a
certificate of cancellation canceling the Company's certificate of formation.
6. Regulatory Matters.
(a) Each Member agrees to cooperate with the Company in all reasonable
respects in complying with the terms and provisions of the letter agreement
between the Company and JPMP, a copy of which is attached hereto as Exhibit A,
regarding regulatory matters (the "Regulatory Sideletter"), including without
limitation, voting to approve amending this Agreement in a manner reasonably
acceptable to the Members and JPMP or any Affiliate of JPMP entitled to make
such request pursuant to the Regulatory Sideletter in order to remedy a
Regulatory Problem (as defined in the Regulatory Sideletter).
(b) The Company and each Member agree not to amend or waive the voting
or other provisions of this Agreement if such amendment or waiver would cause
JPMP or any of its Affiliates to have a Regulatory Problem. JPMP agrees to
notify the Company as to whether or not it would have a Regulatory Problem
promptly after JPMP has notice of such amendment or waiver.
7. Members; Representations of Members.
(a) The name and business, mailing or residence address of and number
of Units held by the Members (after giving effect to Section 2(d)) are set forth
on Schedule II. Schedule II shall be amended from time to time to reflect the
names and business, mailing or residence address of and number of Units held by
each Person who shall become Members after the date hereof.
(b) Upon the acquisition of a Unit after the date hereof (pursuant to
issuance by the Company, Transfer by any Member or otherwise), such Member makes
the following representations and warranties to the Company on the date of
acquisition thereof:
(i) The execution and delivery of this Agreement by such Member
has been duly authorized, validly executed and delivered and this Agreement
constitutes the legal and binding obligation of such Member, enforceable
against such Member in accordance with its terms.
(ii) The Member understands that (A) the Units have not been
registered under the Securities Act or registered or qualified under
applicable state securities laws by reason of their issuance by the Company
in a transaction exempt from the registration and qualification
requirements of the Securities Act and applicable state securities laws,
and (B) the Units issued to the Member must be held by the Member
indefinitely unless a subsequent disposition thereof is registered or
qualified under the Securities Act and applicable state securities Laws, or
are exempt from such registration or qualification. The Member further
understands that in connection with the Transfer of the Units, that the
Company may request, and if so requested the Member will furnish, such
certificates, legal opinions and other information as the Company may
reasonably require to confirm that such share Transfer complies with the
foregoing.
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(iii) The Member further understands that, with respect to the
Units, the exemption from registration afforded by Rule 144 (the provisions
of which are known to the Member) promulgated under the Securities Act
depends on the satisfaction of various conditions, and that, if applicable,
Rule 144 may only afford the basis for sales only under certain
circumstances and only in limited amounts.
(iv) The Member will not Transfer the Units acquired by it
hereunder, except in compliance with this Agreement.
(v) The Member is acquiring the Units for its own account, for
investment only and not with a view to, or an intention of, the
distribution thereof in violation of the Securities Act or any applicable
state securities laws.
(vi) The Member has no need for liquidity in its investment in
the Units and is able to bear the economic risk of his investment in the
Units for an indefinite period of time.
(vii) The Member has been represented by counsel and/or advisors
in connection with the execution and delivery of this Agreement and has had
an opportunity to ask questions and receive answers concerning the terms
and conditions of the offering of the Units and has had full access to or
been provided with all such other information concerning the Company as he
has requested.
(viii) The Member has such knowledge and experience in financial
and business matters and with respect to investments in Securities of
privately held companies such that the Member is capable of evaluating the
risks and merits of its investment in the Units.
(ix) Neither the issuance of the Units to the Member nor any
provision contained in this Agreement shall entitle any Member to obtain
employment with or remain in the employment of the Company or any of its
Subsidiaries or Affiliates or affect any right the Company or any
Subsidiary or Affiliate of the Company may have to terminate the Member's
employment, pursuant to an applicable employment agreement or otherwise for
any reason.
8. Capital Contributions; Issuance of Units; Capital Accounts.
(a) The Heritage Members have contributed to the Company on or prior
to the date hereof the amount set forth in Schedule I in respect of the Units
set forth in Schedule I by payment of cash in such amount. The equity value of
the Company as of the date hereof is $32,000,000.
(b) A separate capital account shall be maintained on the books of the
Company for each Member (the "Capital Account"), which shall be adjusted (1) as
of December 31 of each year, (2) immediately prior to the acquisition of any
Membership interest by any Person, (3) effective as of the date of sale of the
Company and (4) the date of (and immediately prior to) dissolution of the
Company, as follows:
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(i) the amount of money and the fair market value of property
(net of any liabilities secured by such property that the Company assumes
or takes subject to) contributed by such Member to the Company shall be
credited to such Member's Capital Account;
(ii) the amount of any distributions (including the fair market
value (as determined by the Board of Managers in good faith) of property
other than cash (net of any liabilities that such Member assumes or takes
subject to) distributed to such Member by the Company to shall be debited
from such Member's Capital Account; and
(iii) Net Profits incurred by the Company since the last date on
which Net Profits or Net Losses shall have been allocated to the Members
shall be credited to such Member's Capital Account and Net Losses incurred
by the Company since the last date on which Net Losses or Net Profits shall
have been allocated to the Members shall be debited to such Member's
Capital Account, which allocations shall be made in the amounts on
proportions set forth in Sections 8(c) and (d), hereof.
(c) Net Profits and Net Loss shall be allocated among the Members so
as to reduce, proportionately, the difference between their respective "Target
Capital Accounts" and Capital Accounts. For purposes of the foregoing, a
Member's "Target Capital Account" shall be equal to the amount such Member would
be entitled to receive if the Company sold all of its assets for their book
value, settled all of its liabilities according to their terms and distributed
all of its remaining cash pursuant to Section 9 hereof.
(d) Notwithstanding any provision of this Agreement to the contrary,
each Member's Capital Accounts shall be maintained and adjusted in accordance
with the Code, including (i) the adjustments permitted or required by Code
Section 704(b) and, to the extent applicable, the principles expressed in Code
Section 704(c) and the regulations promulgated thereunder and (ii) adjustments
required to maintain Capital Accounts in accordance with the "substantial
economic effect test" set forth in the regulations promulgated under Code
Section 704(b).
(e) Any Member, including any substitute Member, who shall receive any
interest in the Company by means of a transfer to him from another Member shall
have a Capital Account that reflects the Capital Account associated with the
transferred interest in the Company.
9. Distributions.
(a) The Company shall distribute assets, whether in cash or in kind,
at such times and in such amounts as the Board of Managers may determine;
provided that, all such distributions shall be made in the following order of
priority, and such distributions shall be pro rata to the holders of each class
of units, in accordance with the number of Units of such class held by such
Member:
(i) first, 99% to the Members holding Class A Units and 1% to the
Members holding Class B Units until the aggregate distributions made
pursuant to this clause equal the Initial Distribution Amount; then
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(ii) second, 91% to the Members holding Class A Units, 1% to the
Members holding Class B Units and 8% to the Members holding Class C Units
until the aggregate amount distributed pursuant to this clause equals
$32,500,000; then
(iii) third, 89% to the Members holding Class A Units, 1% to the
Members holding Class B Units and 10% to the Members holding Class C Units
until the aggregate amount distributed pursuant to this clause equals
$50,000,000; then
(iv) fourth, 79% to the Members holding Class A Units, 1% to the
Members holding of Class B Units and 20% to the Members holding Class C
Units until the aggregate amount distributed pursuant to this clause equals
$50,000,000; then
(v) fifth, 100% to the Members holding Class C Units until the
aggregate amount distributed pursuant to this clause equals $5,000,000; and
(vi) thereafter, 69% to the Members holding Class A Units, 1% to
the Members holding Class B Units and 30% to the Members holding Class C
Units.
10. Liability for Return of Capital.
No Member shall have any liability for the return of any Member's
Capital Contribution, which Capital Contribution shall be payable solely from
the assets of the Company at the absolute discretion of the Board of Managers,
subject to the requirements of the Delaware Act.
11. Administrative Matters.
(a) The Company hereby designates JPMP as the "Tax Matters Partner"
for purposes of Code Section 6231 and the regulations promulgated thereunder.
The Tax Matters Partner shall promptly advise each Member of any audit
proceedings proposed to be conducted with respect to the Company.
(b) It is the intention of the Members that the Company shall be taxed
as a "partnership" for federal, state, local and foreign income tax purposes.
The Members shall take all reasonable actions, including the amendment of this
Agreement and the execution of other documents, as may reasonably be required in
order for the Company to qualify for and receive "partnership" treatment for
federal, state, local and foreign income tax purposes.
(c) The fiscal year of the Company shall be the calendar year. The
books and records of the Company shall be maintained in accordance with
generally accepted accounting principles and Code Section 704(b) and the
regulations promulgated thereunder.
12. Repurchase of Other Member Units.
The provisions set forth in this Section 12 shall apply to the Other
Members and any Permitted Transferee of such Other Members.
(a) In the event that such Other Member's employment with the Company,
its Subsidiaries or their Affiliates is terminated for any reason at any time,
JPMP or its designee
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shall have the right (but not the obligation), upon delivery of a Repurchase
Notice to such Other Member, to repurchase all of the Other Member Units owned
by such Other Member and its Transferees (the "Repurchase Right"). If JPMP or
its designee elects to exercise the Repurchase Right, JPMP or its designee shall
deliver the Repurchase Notice on or before the 180th day after the Employment
Termination Date. The closing of any repurchase of Other Member Units pursuant
to this Section 12 shall occur on or before the date that is 30 days after the
date of delivery of the Repurchase Notice.
(b) In the event JPMP or its designee elects to exercise its
Repurchase Right, the repurchase price shall be determined as set forth below.
(i) In the event that an Other Member's employment with the
Company, its Subsidiaries or their Affiliates is terminated for any reason
(other than a termination (i) for Good Reason, (ii) without Cause or (iii)
upon the death or Disability of such Other Member), the price to be paid by
JPMP or its designee to repurchase each Vested Unit shall be an amount
equal to $.01 (as adjusted for splits, combinations, recapitalizations and
similar transactions).
(ii) In the event that an Other Member's employment with the
Company, its Subsidiaries or their Affiliates is terminated for (A) Good
Reason, (B) without Cause or (C) due to death or Disability of such Other
Member, the price to be paid by JPMP or its designee to repurchase each
Vested Unit shall be an amount equal to the fair market value of such Units
as of the Employment Termination Date. The determination of fair market
value of such Vested Units shall be made by the good faith majority
decision of a committee (the "Fair Market Value Evaluation Committee)
consisting of (1) two designees of JPMP and (2) the Chief Executive Officer
of Parent at such time. In the event that the Fair Market Value Evaluation
Committee is to determine the value of Vested Units owned by the Chief
Executive Officer of Parent, the third member of the Fair Market Value
Evaluation Committee shall be Xxxx Xxxxxx or the Chief Financial Officer of
Parent at such time.
(iii) In the event that an Other Member's employment with the
Company, its Subsidiaries or their Affiliates is terminated for any reason,
the price to be paid by JPMP or its designee to repurchase each Unvested
Unit shall be $.01 (as adjusted for splits, combinations, recapitalizations
and similar transactions).
(iv) The purchase price to be paid by JPMP or its designees shall
be paid in cash in a single lump sum payment. The Persons purchasing the
Units pursuant to this Section 12 will be entitled to require such Other
Member to provide representations and warranties regarding (i) his or its
power, authority and legal capacity to enter into such Transfer; (ii) valid
right, title and interest in such Units and the Other Member's ownership of
such Units; (iii) the absence of any Encumbrances on such Units; and (iv)
the absence of any violation, default, or acceleration of any agreement or
instrument pursuant to which such Other Member or the assets of such Other
Member are bound as the result of such sale. JPMP or its designee shall
have the right to revoke the Repurchase Notice at any time. Should JPMP or
any of its designees elect to exercise the purchase rights pursuant to this
Section 12 and such Other Member fails to deliver all of
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such Units in accordance with the terms hereof, JPMP may, at its option, in
addition to all other remedies it may have, deliver the purchase price to
the Company to be held for the benefit of and payment over to such Other
Member in accordance herewith, whereupon (i) the Company shall cancel on
its books the such Units registered in the name of the Other Member and
(ii) issue to the purchaser, in lieu thereof, Units registered in the
purchaser's name (or if the Company is the purchaser, cancel such Units),
and all of such Other Member's right, title, and interest in and to such
Units shall terminate in all respects.
(c) Notwithstanding the foregoing, in the event that any Other
Member's employment with the Company, its Subsidiaries or their Affiliates is
terminated for any reason at any time and such Other Member has Transferred
Other Member Units to a Permitted Transferee, JPMP or its designee shall have
the right (but not the obligation), upon delivery of a Repurchase Notice to such
Permitted Transferee, to repurchase all of the Other Member Units owned by such
Permitted Transferee in accordance the provisions of this Section 12 on the same
terms and conditions as if JPMP or its designee were to repurchase such Other
Member Units directly from the Person who originally Transferred such Other
Member Units to such Permitted Transferee.
13. Transfers of Units and Interests.
(a) Except as required by Sections 12, 13(b), or 13(c), no Member may
sell, assign, pledge or otherwise transfer or encumber (collectively,
"Transfer"), other than to Permitted Transferees in accordance with the terms
hereof, all or any part of its Units or other part of its Interest, and no
transferees of all or any part of the Units of a Member shall be admitted as a
substituted Member, without, in either event, having obtained the prior written
consent of a Majority in Interest of the Members, which consent may be withheld
in their sole discretion. Any Transfer or attempted Transfer of any Interest in
the Company in violation of any the provisions of this Section 13 shall be void,
and the Company shall not record such Transfer on its books or treat any
purported transferee of such Units as the owner of such Units for any purpose.
The Company shall amend Schedule II hereto from time to time to reflect
Transfers made in accordance with, and as permitted under, this Section 13. Upon
the Transfer of all Units held by a Member, such Person shall no longer be
deemed to be a "Member" hereunder and shall have no rights as a "Member"
hereunder.
(b) If the Board of Managers approves a Sale Transaction, each Other
Member shall consent to and raise no objections against the Sale Transaction,
and if the Sale Transaction is structured as a sale of the issued and
outstanding Securities of the Company (whether by merger, recapitalization,
consolidation or sale or transfer of Units or otherwise), then each Other Member
shall waive any dissenters rights, appraisal rights or similar rights in
connection with such Sale Transaction and each Other Member shall agree to sell
his or her Units on the terms and conditions approved by the Board of Managers.
Each Other Member shall take all necessary and desirable actions in connection
with the consummation of the Sale Transaction, including, but not limited to,
the execution of such agreements and instruments (including Member resolutions)
and other actions necessary to provide the representations, warranties,
indemnities, covenants, conditions, escrow agreement and other provisions and
agreements relating to such Sale Transaction. In the event that any Other Member
fails for any
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reason to take any of the foregoing actions after reasonable notice thereof, he
or it hereby grants an irrevocable power of attorney and proxy to the Company to
take all necessary actions and execute and deliver all documents deemed by the
Company necessary to effectuate the terms of this Section 13(b).
(c) If and whenever the Company proposes to register any of its
Securities under the Securities Act for its own account (or otherwise), each
Other Member agrees not to effect (other than pursuant to such registration) any
public sale or distribution (including, but not limited to, any sale pursuant to
Rule 144 or Rule 144A of the Securities Act) of any Units or any other
Securities of the Company until 180 days after (or with respect to the Company's
initial public offering of Units under the Securities Act 270 days after), and
during the twenty (20) days prior to, the effective date of such registration.
(d) Notwithstanding anything to the contrary contained herein, JPMP
may Transfer any Units to any employee, officer, director or consultant of the
Company or its Subsidiaries.
(e) No Transfer of any Other Member Units by any Other Member to a
Permitted Transferee shall become effective until the Permitted Transferee
(unless already party to this Agreement) executes and delivers to the Company a
Joinder. Upon such Permitted Transfer and such execution and delivery, the
Permitted Transferee shall be bound by, and entitled to the benefits of, this
Agreement.
14. Withdrawal.
No Member shall have the right to withdraw from the Company except
with the consent of the Board of Managers. The provisions hereof with respect to
distributions upon withdrawal are exclusive, and no Member shall be entitled to
claim any further or different distribution upon withdrawal under Section 18-604
of the Delaware Act or otherwise.
15. Additional Members.
The Board of Managers shall have the right to cause the Company to
issue additional Units and to admit additional Members upon the acquisition of
such Units upon such terms and conditions, at such time or times, and for such
Capital Contributions as shall be determined by the Board of Managers. In
connection with the admission of an additional Member, the Company shall amend
Schedule II hereof to reflect the name, address of and the number of Units held
by, the additional Member. Prior to the admission of any Person as a Member,
such Person shall execute a Joinder.
16. Dissolution.
(a) The Company shall be dissolved and its affairs wound up and
terminated upon the first to occur of the following:
(i) March 13, 2023; or
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(ii) the determination of the Board of Managers and a Majority in
Interest of the Members to dissolve the Company.
(b) Upon dissolution of the Company, the Company's affairs shall be
promptly wound up in accordance with the provisions of this Section 16. The
Company shall engage in no further business except as may be necessary, in the
reasonable discretion of the Board of Managers, to preserve the value of the
Company's assets during the period of dissolution and liquidation.
(c) Distributions to the Members in liquidation may be made in cash or
in kind, or partly in cash and partly in kind, as determined by the Board of
Managers.
(d) The Net Profits and Net Losses of the Company during the period of
dissolution and liquidation shall be allocated among the Members in accordance
with the provisions of Section 8.
(e) The assets of the Company (including, without limitation, proceeds
from the sale or other disposition of any assets during the period of
dissolution and liquidation) shall be applied as follows:
(i) First, to repay any indebtedness of the Company, whether to
third parties or the Members, in the order of priority required by law;
(ii) Second, to any reserves which the Board of Managers
reasonably deems necessary for contingent or unforeseen liabilities or
obligations of the Company (which reserves when they become unnecessary
shall be distributed in accordance with the provisions of (iii), below);
and
(iii) Third, to the Members in accordance with Section 9.
17. Limitation on Liability.
The debts, obligations and liabilities of the Company, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Member of the Company shall be obligated
personally for any such debt, obligation or liability of the Company solely by
reason of being a Member. No Member shall be liable to the Company, any other
Member or any third party for any breach of any representation or warranty or
failure by the Company to comply with any of its covenants or agreements
contained in this Agreement.
18. Amendments.
Except as expressly set forth herein, this Agreement may be amended
only upon the written consent of the Board of Managers and a Majority in
Interest of the Members; provided, however, that the approval of holders
representing a majority of the Class A Units and the approval of holders
representing a majority of the Class C Units shall be required to amend or
modify Sections 1 (with respect to the following definitions only: Cause,
Disability, Good Reason, Service Factor, Unvested Units and Vested Units), 8, 9,
12(b) and 13(a) hereof.
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19. Governing Law.
This Agreement shall be governed by and construed in accordance with
the domestic laws of the State of Delaware without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the state of Delaware.
20. Entire Agreement.
This Agreement and the other agreements and documents referenced
herein (including, but not limited to, the schedules and the exhibits (in their
executed form) attached hereto) and any other document or agreement
contemporaneously entered into contain all of the agreements among the parties
hereto with respect to the transactions contemplated hereby and supersede all
prior agreements or understandings, oral and written, among the parties with
respect thereto, including without limitation the Third Amended and Restated
Operating Agreement of the Company dated as of the July 31, 2003.
21. Initial Public Offering.
In the event of a reorganization of the Company in contemplation of an
initial public offering, the Members shall negotiate in good faith for a
customary registrations rights agreement setting forth the rights of each class
of Members to participate in any public registration of Securities of the
Company (subject to customary cut backs, priorities and holdbacks).
22. Counterpart Signatures
This Agreement may be executed in counterparts, each of which will be
deemed an original and all of which together shall constitute one document. A
facsimile signature by a party shall constitute due execution of this Agreement
by such party.
* * * * *
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IN WITNESS WHEREOF, the undersigned have duly executed this Fourth
Amended and Restated Operating Agreement as of the date first written above.
X.X. XXXXXX PARTNERS (23A SBIC), L.P.
By: X.X. Xxxxxx Partners (23A SBIC Manager),
Inc., its General Partner
By: /s/ Xxxxx Xxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxx
--------------------------------------
Title:
-------------------------------------
/s/ Xxxxxx X. Xxxx
--------------------------------------------
Xxxxxx X. Xxxx
KING CHILDREN TRUST PARTNERSHIP
By: Xxxxxxxx X. Xxxxxxxxx, as Trustee of the
Xxxxxxx Xxxxx King Trust, the Xxxxxxxx
Xxxxxxxxx Xxxx Trust and the
Xxxxxx X. Xxxx Trust, the sole
general partners
By: /s/ Xxxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
--------------------------------------
Title: Trustee
-------------------------------------
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