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LIMITED LIABILITY COMPANY AGREEMENT
OF
TRIAD PARK, LLC
This Limited Liability Company Agreement of Triad Park, LLC, a
Delaware limited liability company (the "COMPANY"), is entered into effective
as of the 26th day of February, 1997, among Triad Systems Corporation, a
Delaware corporation ("TRIAD") and 3055 Management Corp., a California
corporation, as the initial members of the Company, and the Persons who
subsequently become members of the Company in accordance with the provisions of
this Limited Liability Company Agreement.
RECITALS
A. Triad is the owner of certain real estate assets located in the
City of Livermore, State of California, commonly referred to as Triad Park.
Triad and 3055 Management Corp. desire to form the Company to acquire, own,
manage, develop and sell the real estate assets.
B. Following the formation of the Company and the transfer of the
real estate assets to the Company, Triad will transfer its membership interests
in the Company to its shareholders, as a dividend distribution. Upon receipt of
the dividend distribution, the shareholders of Triad shall become members of
the Company.
C. 3055 Management Corp. will contribute cash to the Company for its
membership interest and will be the initial manager of the Company.
Therefore, Triad and 3055 Management Corp., for themselves and on
behalf of the Share Holders (as defined below), agree to form a limited
liability company under the Delaware Limited Liability Company Act on the
following terms and conditions:
SECTION 1. FORMATION
1.1 FORMATION OF COMPANY. The Company has been organized as a
Delaware limited liability company by the filing of a Certificate of Formation
pursuant to the Delaware Limited Liability Company Act with the Delaware
Secretary of State.
1.2 NAME. The name of the Company is "Triad Park, LLC" and all
Company business shall be conducted under that name or such other names that
comply with applicable law as the Manager (as defined below) may select from
time to time.
1.3 PURPOSE AND SCOPE. Subject to the provisions of this
Agreement and the Certificate, the purposes of the Company are to acquire the
Property (as defined below) and to liquidate the Property, and in the course of
liquidating the Property to hold, maintain, operate, develop, improve,
subdivide, lease, finance, refinance, offer for sale and sell the Property and
any portion of the Property, and do any and all other acts or things that may
be necessary, appropriate, proper, advisable, incidental to or convenient for
the furtherance and accomplishment of these purposes,
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including but not limited to entering into joint venture arrangements with
third parties as deemed appropriate to accomplish these purposes.
1.4 TERM. The Company shall commence on the date the Certificate
is filed and shall continue until it is wound up and dissolved pursuant to the
provisions of Section 7 of this Agreement.
1.5 OFFICE; AGENT. The registered office of the Company required
by the Act to be maintained in the State of Delaware shall be located at 0000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, or such other office (which need not
be a place of business of the Company) as the Manager may designate from time
to time in the manner provided by law. The name and address of the registered
agent of the Company shall be The Corporation Trust Company, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000. The Company may have such other offices as
the Manager may designate from time to time.
1.6 DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings:
(a) ACT. The Delaware Limited Liability Company Act, as amended
from time to time.
(b) ADVISORY BOARD. The board described in Section 4.6 of this
Agreement.
(c) AFFILIATE. When used with reference to a specified Person,
(i) any Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the specified
Person, (ii) any Person that is an officer or director of, partner or trustee
of, or serves in a similar capacity with respect to, the specified Person or of
which the specified Person is an officer, director, partner, or trustee, or
with respect to which the specified Person serves in a similar capacity, (iii)
any Person that, directly or indirectly, is the beneficial owner of ten percent
(10%) or more of any class or voting securities of, or otherwise has a
substantial beneficial interest in, the specified Person or of which the
specified Person has a substantial beneficial interest, and (iv) any immediate
family member or spouse of the specified Person.
(d) AGREEMENT. This Limited Liability Company Agreement, as
originally executed and as amended, modified, supplemented or restated from
time to time in accordance with its terms.
(e) BANKRUPTCY. With respect to a Person, the Person (i) makes
an assignment for the benefit of creditors, (ii) files a voluntary petition in
bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has entered against
him an order for relief, in any bankruptcy or insolvency proceeding, (iv) files
a petition or answer seeking for himself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation, (v) files an answer or other pleading admitting or
failing to contest the material allegations of a petition filed against him in
any proceeding of this nature, or (vi) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the Person or of all or any
substantial part of his properties, or (vii) is the subject of any proceeding
against the Person seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute, law
or regulation, if the proceeding has not been dismissed within 90 days after
its commencement.
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(f) BYLAWS. Rules and regulations governing meetings of Share
Holders, voting procedures and similar matters, as adopted and amended from
time to time by the Advisory Board.
(g) CERTIFICATE. The Certificate of Formation of the Company, as
originally filed and as amended or restated from time to time in accordance
with this Agreement and the Act.
(h) CODE. The Internal Revenue Code of 1986 or any successor
statute, as amended from time to time.
(i) COMPANY. Triad Park, LLC, a Delaware limited liability
company.
(j) DISTRIBUTABLE CASH. Cash funds of the Company from any
source, less the sum of (i) an amount sufficient for the payment of all
expenses of the Company then due and payable, (ii) reasonable reserves for the
Company as determined by the Manager and approved by the Advisory Board and
(iii) amounts required to be retained by the Company under the terms of the
Distribution Agreement.
(k) DISTRIBUTION AGREEMENT. The Real Estate Distribution
Agreement among the Xxxxxxx, Xxxxx, 0000 Management Corp. and 0000 Xxxxx Xx.
Corp., a California Corporation, as amended from time to time.
(l) DISTRIBUTION DATE. The date on which Triad completes the
distribution of the Shares to those Persons who were shareholders of Triad on
the Record Date.
(m) FISCAL YEAR. The taxable year of the Company shall end
December 31 of each year.
(n) INITIAL MEMBERS. Triad and 3055 Management Corp.
(o) MAJOR DECISIONS. As defined in Section 4.6(b).
(p) MAJORITY VOTE. The vote of Share Holders holding more than
fifty percent (50%) of the Shares.
(q) MANAGER. 3055 Management Corp., and any Person or Persons
who succeed it as manager of the Company.
(r) PERSON. A natural person, partnership (whether general or
limited and whether domestic or foreign), limited liability company, trust,
estate, association, corporation, custodian, nominee, or any other individual
or entity, in its own or any representative capacity.
(s) PROPERTY. The land and improvements to be contributed to the
Company by Triad pursuant to the Distribution Agreement.
(t) RECORD DATE. The date as of which the Triad stockholders of
record who will receive the distributions of Shares are determined.
(u) RIGHTS AGREEMENT. As defined in Section 9.
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(v) SHARE. A Share Holder's rights as a member in the Company,
collectively, including the right to share in the income, gains, losses,
deductions, credit, or similar items of, and to receive distributions from, the
Company, any right to vote or participate in management, and any right to
information concerning the business and affairs of the Company.
(w) SHARE HOLDER. A Person who is a member in the Company by
being a holder of one or more Shares.
(x) SPINOFF DISTRIBUTION. The distribution by Triad of the
Shares to the Persons who were shareholders of Triad on the Record Date.
(y) TAX DISTRIBUTION. As defined in Section 3.1.
(z) TRANSFER AGENT. The company selected by the Manager, with
the approval of the Advisory Board, to serve as registrar and transfer agent
for the Shares, and any Person or Persons who succeed it as registrar and
transfer agent for the Shares.
(aa) TRANSFER APPLICATION. An application for transfer of Shares
in the form set forth on the back of a Share certificate, substantially in the
form attached to this Agreement as Exhibit A.
(bb) TRIAD. Triad Systems Corporation, a Delaware corporation.
SECTION 2. CAPITALIZATION OF THE COMPANY
2.1 TRIAD CONTRIBUTION. Prior to the Distribution Date, and
subject to terms and conditions of the Distribution Agreement, Triad shall
transfer title to its interest in the Property to the Company, subject only to
the liabilities, liens and encumbrances as are expressly permitted under the
Distribution Agreement, together with such other assets as may be required by
the Distribution Agreement. In exchange for its contribution, Triad shall be
admitted as an Initial Member and shall be issued a number of Shares equal to
the aggregate number of outstanding shares of stock of Triad as of the Record
Date. It is agreed that the fair market value of Triad's contribution shall be
determined based upon an appraisal and shall be consistent with the value used
for Triad's income tax returns.
2.2 3055 MANAGEMENT CORP. CONTRIBUTION. At the time Triad
transfers the Property to the Company, 3055 Management Corp. shall contribute
to the Company its promissory note in an amount equal to 1.01% of the fair
market value of Triad's contribution pursuant to Section 2.1. The promissory
note shall be due and payable 5 days after the Spinoff Distribution, shall be
interest-free if timely paid, and shall contain such other provisions as Triad
may reasonably require. In exchange for its contribution of the promissory
note, 3055 Management Corp. shall be admitted as an Initial Member and shall
be issued a number of Shares equal to 1.01% of the number of Shares issued to
Triad pursuant to Section 2.1.
2.3 ADDITIONAL CAPITAL. No Share Holder shall have any
obligation to contribute additional capital to the Company, other than as
required under Sections 2.1 and 2.2 of this Agreement. If Company capital and
revenues are insufficient to meet its cash requirements and the Company is
unable to obtain loans on terms the Advisory Board deems acceptable, the
Company may issue additional membership interests in exchange for additional
contributions to the capital of the
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Company, on such terms as are determined by the Advisory Board, which may
involve the issuance of more Shares or may involve the issuance of other
membership interests with priority over existing Shares as to distributions,
taxable income or loss, voting rights and participation in management.
Provided the additional membership interests have been issued in conformity
with the determination of the Advisory Board, this Agreement may be amended by
the Manager to reflect the sale of the additional membership interests, the
admission of additional members and any changes in allocations of
distributions, taxable income or loss, voting rights and participation in
management, and such amendment shall not require the approval of the Share
Holders.
2.4 LOANS. Subject to the approval of the Advisory Board, the
Manager, from time to time and in its reasonable judgment, may obtain loans
from third parties to meet operating expenses and capital expenditures of the
Company, which loans may be unsecured or secured by all or a portion of Company
assets. If loans from third parties are unavailable on terms and conditions
which the Manager deems reasonable, then any Share Holder may, but shall not be
obligated to, loan money to the Company. Any loan from a Share Holder shall
bear interest at such rate and be payable on such terms as the lending Share
Holder and the Manager may determine.
SECTION 3. DISTRIBUTIONS AND ALLOCATIONS
3.1 DISTRIBUTIONS. In general, the Company shall distribute
Distributable Cash to the Share Holders at such times and in such amounts as
the Advisory Board may determine. Notwithstanding the preceding sentence, for
each Fiscal Year of the Company in which the Company has taxable income (except
the Fiscal Year in which the Company is liquidated), and to the extent the
Company has sufficient Distributable Cash, the Company shall distribute not
less than an amount equal to the product of (i) the Company's taxable income
multiplied by (ii) the highest marginal federal income tax rate imposed on
individual taxpayers (the "TAX DISTRIBUTION"). The Tax Distribution shall be
completed not later than ninety (90) days after the end of the Fiscal Year in
which the Company has taxable income.
3.2 ALLOCATION OF DISTRIBUTIONS. Distributions of the Tax
Distribution and distributions of Distributable Cash shall be allocated and
distributed to the Share Holders in proportion to their record ownership of
Shares as of the date the distribution is declared. A declared distribution
shall be made as soon as practicable after the declaration date.
3.3 WITHHOLDINGS AS DISTRIBUTIONS. Any amounts withheld by the
Company pursuant to the Code or any other provision of state or local law with
respect to any allocation or distribution to a Share Holder shall be treated as
a distribution to the Share Holder for all purposes under this Agreement. If
withholding payments exceed the amount of distributions the Share Holder would
otherwise have received from the Company, the Share Holder shall be obligated
to return such excess payments to the Company, plus interest at the rate of 10%
per annum from the date(s) of such excess payments.
3.4 LIMITATIONS ON DISTRIBUTIONS. No Share Holder shall become
entitled to any distribution from the Company until such time as the
distribution is actually paid by the Company. No Share Holder has any right to
demand and receive any distribution from the Company in any form other than
money. No Share Holder may be compelled to accept from the Company a
distribution of any asset in kind in lieu of a proportionate distribution of
money being made to other
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Share Holders. No distribution shall be made by the Company if the
distribution is prohibited by Section 18-607(a) of the Act.
3.5 ALLOCATIONS OF INCOME OR LOSS.
(a) Within 45 days after the end of each calendar month, the
Company shall conduct an interim closing of the books as of the end of the last
day of that calendar month. On the basis of the closing of the books for each
calendar month, the Company shall determine the amounts of income, gain, loss,
deduction and credit attributable to that calendar month.
(b) Items of income, gain, loss, deduction or credit of the
Company for any calendar month shall be allocated among the Share Holders of
record as of the last day of that calendar month, in proportion to their
ownership of Shares on such date. For purposes of accounting for transfers of
Shares under this Section 3.5, transfers which are effective on or before the
15th day of a calendar month shall be deemed to be effective as of the first
day of the calendar month, and transfers which are effective after the 15th day
of a calendar month shall be deemed to be effective as of the first day of the
succeeding calendar month. The effective date of a transfer of Shares shall be
determined under Section 5.5 below. The allocations of income, gain, loss,
deduction and credit under this Section 3.5 shall not affect the allocation of
distributions under Sections 3.2 and 7.3.
3.6 REDEMPTION OF SHARES. Within 5 days after 3055 Management
Corp. pays the promissory note described in Section 2.2 of this Agreement, the
Company shall redeem Shares from the Share Holder or Share Holders who are the
stockholders of 3055 Management Corp. The redemption shall be for an amount of
cash equal to the capital contribution of 3055 Management Corp. and the number
of Shares to be redeemed shall be equal to the number of Shares issued to 3055
Management Corp. If 3055 Management Corp. has more than one stockholder, the
redemption shall be in proportion to their ownership of the stock of 3055
Management Corp.
SECTION 4. MANAGEMENT
4.1 MANAGEMENT. The business and affairs of the Company shall be
managed by the Manager. The Manager shall direct, manage, and control the
business of the Company to the best of its ability and shall devote such time
and effort to the business and affairs of the Company as may be necessary and
appropriate for the success of the Company. The Manager need not be a Share
Holder. The initial Manager shall be 3055 Management Corp. who shall continue
as the Manager until it resigns or is removed by the Advisory Board. The
Manager may resign upon 60 days prior written notice to the Advisory Board.
The Manager may be removed at any time, with or without cause, by the Advisory
Board and the Advisory Board may appoint the successor to any Manager who
resigns or is removed.
4.2 SPECIFIC AUTHORITY OF THE MANAGER. Except as otherwise
provided in this Agreement, 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 or activities customary or incident to the
management of the Company's business. Subject to the approval rights of the
Advisory Board for Major Decisions, the Manager shall have the power and
authority to take any of the following actions:
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(a) To operate, maintain, develop and improve the Property and to
apply for and obtain land use entitlements, building permits, zoning
designations and variances, as the Manager determines are necessary or
appropriate or in the best interests of the business of the Company;
(b) To borrow money and, to secure any such borrowings, to
mortgage, pledge or otherwise encumber any and all assets of the Company and
the rights of the Company under any agreements;
(c) To cause to be paid all amounts due and payable by the
Company to any person and to collect all amounts due to the Company;
(d) To lease any portion of the Property, and modify, terminate
or extend any lease of any portion of the Property;
(e) To employ such agents, employees, accountants, attorneys,
consultants and other Persons, including itself and its Affiliates, necessary
or appropriate to carry out the business and affairs of the Company, whether or
not any such persons so employed are affiliated or related to any Share Holder,
and to pay such fees, expenses, salaries, wages and other compensation to such
Persons as the Manager shall in its sole discretion determine, except that any
compensation paid to the Manager or any Affiliate of the Manager shall be
approved by the Advisory Board;
(f) To pay, extend, renew, modify, adjust, submit to arbitration,
prosecute, defend or compromise, upon such terms as it may determine and upon
such evidence as it may deem sufficient, any obligation, suit, liability, cause
of action or claim, including taxes, either in favor of or against the Company;
(g) To pay any and all reasonable fees and to make any and all
reasonable expenditures which it, in its sole discretion, deems necessary or
appropriate in connection with the organization of the Company, the management
of the affairs of the Company, and the carrying out of its obligations and
responsibilities under this Agreement and the Act, and to enforce all rights of
the Company;
(h) To offer for sale, sell, or otherwise dispose of any of any
part of or any interest in the assets owned by the Company;
(i) To file applications, to communicate and otherwise deal with
any and all governmental agencies having jurisdiction over, or in any way
affecting, the Company, the Property, or any aspect of the Company's business;
(j) To make or revoke any election permitted the Company by any
taxing authority;
(k) To maintain such insurance coverage for public liability,
fire and casualty, and any and all other insurance necessary or appropriate to
the business of the Company, in such amounts and of such types, as the Manager
shall determine from time to time, provided the insurance is available on terms
which the Manager deems reasonable;
(l) To apply, in accordance with the provisions of this
Agreement, any insurance proceeds to the restoration of the Property or to
distribute the proceeds;
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(m) To cause to be paid any and all taxes, charges and
assessments that may be levied, assessed or imposed upon the Company and any of
the assets of the Company, unless the same are contested by the Manager in good
faith;
(n) To establish and maintain such reserves as the Manager and
the Advisory Board determine are reasonably necessary or appropriate, and to
invest Company reserves in such liquid investments as the Manager may select
from time to time;
(o) To engage in any kind of activity and to perform and carry
out contracts of any kind necessary to, or in connection with or convenient or
incidental to, the accomplishment of the purposes of the Company, so long as
such activities and contracts may be lawfully carried on or performed by a
limited liability company under applicable law, including but not limited to
joint ventures or other business relationships for the joint development and
sale of the Property or any portion of the Property;
(p) To submit to the vote of the Advisory Board or the Share
Holders any matter which the Manager determines is appropriate for approval;
(q) To admit additional Share Holders or other members and
permit additional capital contributions as provided in Section 2.3 (and
appropriately amend this Agreement if necessary to reflect the admissions and
additional capital contributions and other terms); and
(r) Upon the dissolution of the Company, to liquidate and
terminate the Company in accordance with the provisions of this Agreement.
4.3 LIMITATION ON MANAGER'S AUTHORITY. The Manager shall not have
authority to:
(a) Do any act in contravention of this Agreement or knowingly
refrain from doing any act required by this Agreement;
(b) Perform any act that would subject the Share Holders to
liability for Company obligations in any jurisdiction, or refrain from
performing any act if such failure would subject the Share Holders to personal
liability for Company obligations in any jurisdiction;
(c) Confess a judgment against the Company which would make it
impossible to carry on the business of the Company;
(d) Acquire any real property, including any interest in real
property, or any other illiquid asset, other than the Property (except that
this limitation shall not be construed to prevent the Manager from entering
into lot line adjustments and similar arrangements with adjacent property
owners);
(e) Cause the Company to acquire any asset or enter into any
transaction if the effect of such acquisition or transaction will be the
receipt by the Company of income which is not "qualifying income" as that term
is defined in Section 7704 of the Code;
(f) Take any action that would cause the Company to be taxed
as a corporation for federal income tax purposes; or
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(g) Except as otherwise provided herein, amend this Agreement
without the approval of the Share Holders.
4.4 DUTIES OF THE MANAGER.
(a) Subject to the terms and conditions of this Agreement, the
Manager shall proceed to liquidate the Property.
(b) The Manager shall take all actions which may be necessary or
appropriate for the continuation of the Company's existence as a limited
liability company under the Act and to preserve the limited liability of the
Share Holders.
(c) The Manager shall cause to be prepared and timely filed each
year, at the expense of the Company, all federal, state or local tax or
information returns required of the Company, and shall cause the Company to pay
any and all taxes that may be imposed on the Company, or for which the Company
has a legal obligation to collect and/or remit, when and as the taxes are due.
(d) The Manager shall not be obligated to devote full time to the
affairs of the Company, but shall devote the amount of time reasonably
necessary to manage the Company's business and perform the Manager's duties.
4.5 COMPENSATION. As compensation for additional California tax
liability that the Share Holder-owners of 3055 Management Corp. will suffer,
3055 Management Corp. shall receive an annual fee equal to two percent (2%) of
the net income, if any, allocated to 3055 Management Corp. under Section 3.5
for the previous Fiscal Year. This fee shall be paid within 60 days following
the end of such Fiscal Year. 3055 Management Corp. or any successor Manager
shall be entitled to receive additional compensation from the Company only as
specified in a written agreement between the Manager and the Company, which
agreement and any modifications of the agreement shall require the approval of
the Advisory Board.
4.6 ADVISORY BOARD.
(a) Following the Spinoff Distribution, an advisory board (the
"ADVISORY BOARD") shall be formed. The Advisory Board shall be comprised of
not less than three nor more than five individuals. The exact number of
members of the Advisory Board shall be set from time to time by resolution of
the Advisory Board. The initial members of the Advisory Board shall be those
Persons who were members of the Board of Directors of Triad on the date of the
contribution by Triad contemplated by Section 2.1 and who agree to serve as
members of the Advisory Board. Those initial members of the Advisory Board
shall hold office until the first meeting of Share Holders. Subsequent members
of the Advisory Board shall be elected for two year terms. Members of the
Advisory Board must be at least 18 years of age, but need not be Share Holders.
Each member of the Advisory Board shall hold office until the expiration of the
term for which elected or until a successor has been elected. A member of the
Advisory Board may be removed at any time, with or without cause, by a Majority
Vote. If a vacancy on the Advisory Board exists other than by removal, the
vacancy may be filled by majority vote of the remaining members of the Advisory
Board. If a vacancy on the Advisory Board exists because of the removal of a
member, such vacancy may be filled only by Majority Vote.
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(b) The Advisory Board shall meet with the Manager from time to
time to consider Major Decisions and, in the discretion of its members, to
advise and comment on the Company's business plan. In addition, any member of
the Advisory Board may propose business strategies to the Manager. Except with
respect to Major Decisions, any actions taken by the Advisory Board shall be
advisory only and the Manager shall not be required or otherwise bound to act
in accordance with any recommendations made by the Advisory Board or any of its
members. The following proposed actions of the Company ("MAJOR DECISIONS")
shall require approval of a majority of those members of the Advisory Board
voting at a meeting at which a quorum is present:
(1) Any offer to sell additional Shares or other membership
interests and the rights, preferences and privileges of any additional
membership interests.
(2) The removal of the Manager, the engagement of a successor
Manager, any contract, agreement or transaction with the Manager or
any of its Affiliates and the payment of any compensation to the
Manager or any of its Affiliates pursuant to Section 4.5.
(3) Any contract, lease, agreement, or other transaction
which will or might obligate the Company to perform any duties or make
any payments for a period longer than three years, and the extension
of any contract, lease, agreement, or other transaction beyond three
years.
(4) All sales, leases, or other dispositions of the Property
or any portion of the Property, and the entering into any listing
agreement for the purpose of selling, leasing or disposing of the
Property or any portion of the Property.
(5) Entering into any partnership, joint venture, or similar
arrangement with any Person for the purpose of developing or marketing
the Property or any portion of the Property.
(6) Borrowing money or terminating, modifying, or amending any
agreement relating to Company borrowings.
(7) The construction of improvements to the Property or any
portion of the Property, and the entering into any contracts or
agreements to construct improvements to the Property, except those
improvements required by existing agreements with the City of
Livermore.
(8) Any amendment, modification or termination of the existing
agreements with the City of Livermore.
(9) The appointment and removal of officers of the Company and
the compensation, if any, to be paid to any officers.
(10) The selection and terms of engagement of any management
company to manage the Property and/or the liquidation of the Property.
(11) The amount of any reserves to be retained by the Company
in connection with the determination of Distributable Cash and the
decision to make any distribution of Distributable Cash.
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(12) The adoption of Bylaws and any amendment to the Bylaws.
(13) The filing on behalf of the Company of a voluntary
petition in bankruptcy or request for similar relief under any
statute, law or regulation.
(14) Entering into, and any amendment, modification or
termination of the Rights Agreement, and the exercise of any rights,
powers or elections under the Rights Agreement.
(15) Selection and the terms of engagement of the Company's
independent certified public accountants.
(c) Meetings of the Advisory Board shall be held whenever
called by the Manager or by any member of the Advisory Board. Notice of each
meeting shall be given to each member of the Advisory Board at least two
business days before the date on which the meeting is to be held. Members of
the Advisory Board may participate in a meeting of the Advisory Board by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear one another. A quorum shall
be at least one-half of the members of the Advisory Board. Participation in a
meeting shall be a waiver of the requirement of notice of the meeting.
(d) Any action required or permitted to be taken by the
Advisory Board may be taken without a meeting, if all the members of the
Advisory Board consent in writing to that action. Any action by written
consent shall have the same force and effect as a unanimous vote of the
Advisory Board. All written consents shall be filed with the minutes of the
proceedings of the Advisory Board.
(e) Members of the Advisory Board shall not possess or exercise
any power of a manager under the Act. No member of the Advisory Board is an
agent of the Company and no member of the Advisory Board (other than the
Manager or an officer) can bind or execute any instrument on behalf of the
Company.
(f) Members of the Advisory Board shall be entitled to receive
reimbursement of expenses and an annual retainer fee of $10,000 plus a fee of
$750 for each regular meeting and $250 for each telephonic meeting of the
Advisory Board which they attend, as compensation for their services as members
of the Advisory Board.
4.7 OFFICERS. The Advisory Board may, from time to time, appoint
one or more individuals to be officers of the Company. Any officers so
appointed shall have such authority and perform such duties as set forth in the
Bylaws or as the Advisory Board may, from time to time, delegate to them. Any
number of offices may be held by the same individual. The salaries or other
compensation, if any, of the officers and agents of the Company shall be fixed
from time to time by the Advisory Board. Any officer may be removed from
office, either with or without cause, by the Advisory Board.
4.8 LIABILITY OF MANAGER AND OTHERS. The Manager, an officer, or
a member of the Advisory Board shall not be liable to the Company or the Share
Holders for any mistake of fact or judgment or for the doing of, or failing to
do, any act in conducting the business, operations and affairs of the Company,
which may cause or result in any loss or damage to the Company or the
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Share Holders, unless such mistake, act or failure to act is the result of the
person's fraud, bad faith or willful misconduct. In performing his or her
duties, a Manager, an officer, or a member of the Advisory Board shall be
entitled to rely on information, opinion, reports, or statements, including
financial statements and other financial information, prepared or provided by
any attorney, independent accountant, officer, employee or other agent of the
Company, or other Person as to matters which the Manager, officer, or member of
the Advisory Board believes to be within such Person's professional or expert
competence. The Manager, any officer and the members of the Advisory Board
shall have only the duties imposed upon them by this Agreement.
4.9 INDEMNIFICATION. The Company shall indemnify and hold
harmless, to the fullest extent permitted by law, (i) each Manager, (ii) each
officer, (iii) each member of the Advisory Board, and (iv) each agent, partner,
employee, counsel and Affiliate of each Manager, officer, member of the
Advisory Board, or of any of their Affiliates (individually, an "Indemnified
Party"), as follows:
(a) The Company shall indemnify and hold harmless, to the fullest
extent permitted by law, any Indemnified Party from and against any and all
losses, claims, damages, liabilities, expenses (including legal fees and
expenses), judgments, fines, settlements and other amounts ("Indemnified
Costs") arising from all claims, demands, actions, suits or proceedings
("Actions"), whether civil, criminal, administrative or investigative, in which
the Indemnified Party may be involved, or threatened to be involved, as a party
or otherwise arising as a result of its status as (i) a Manager, (ii) an
officer, (iii) a member of the Advisory Board, or (iv) an agent, partner,
employee, counsel or Affiliate of a Manager, an officer, a member of the
Advisory Board, or any of their Affiliates, regardless of whether the
Indemnified Party continues in the capacity at the time the liability or
expense is paid or incurred, and regardless of whether the Action is brought by
a third party, a Share Holder, or by or in the right of the Company; provided,
however, no such Person shall be indemnified for any Indemnified Costs which
proximately result from the Person's fraud, bad faith or willful misconduct or
the Person's material breach of this Agreement.
(b) The Company shall pay or reimburse, to the fullest extent
allowed by law and consistent with Section 4.9(a) above, in advance of the
final disposition of the proceeding, Indemnified Costs incurred by the
Indemnified Party in connection with any Action that is the subject of Section
4.9(a) above.
(c) Notwithstanding any other provision of this Section 4.9, the
Company shall pay or reimburse Indemnified Costs incurred by an Indemnified
Party in connection with such Person's appearance as a witness or other
participation in a proceeding involving or affecting the Company at a time when
the Indemnified Party is not a named defendant or respondent in the proceeding.
(d) The Manager shall cause the Company to purchase and maintain
insurance or other arrangements on behalf of the Indemnified Parties against
any liability asserted against any Indemnified Party and incurred by any
Indemnified Party in that capacity, or arising out of the Indemnified Party's
status in that capacity, regardless of whether the Company would have the power
to indemnify the Indemnified Party against that liability under this Section
4.9. The indemnification provided by this Section 4.9 shall be in addition to
any other rights to which the Indemnified Parties may be entitled under any
agreement, any vote of the Share Holders, as a matter of law, or otherwise, and
shall inure to the benefit of the heirs, successors, assigns and administrators
of the Indemnified Party.
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(e) An Indemnified Party shall not be denied indemnification in
whole or in part under this Section 4.9 because the Indemnified Party had an
interest in the transaction with respect to which the indemnification applies
if the transaction was otherwise permitted by the terms of this Agreement.
4.10 OTHER ACTIVITIES. Nothing in this Agreement shall be deemed
to restrict or affect the freedom of any Share Holder, any Manager, or any
member of the Advisory Board (or any of their Affiliates) to conduct any
business or activity whatsoever, including real estate activities, or to own
any interest in any business or entity whatsoever without any liability or
accountability arising on the part of any Person to the Company or to any Share
Holder in respect of any income, profit, opportunity or other matter derived
from such business or activity. Neither a Share Holder, a Manager, a member of
the Advisory Board, nor any of their Affiliates shall be obligated to present
any particular investment opportunity to the Company even if such opportunity
is of a character which, if presented to the Company, could be exploited by the
Company, and each Share Holder, Manager and member of the Advisory Board and
any of their Affiliates shall have the right to take for his own account or to
recommend to others any such particular investment opportunity.
4.11 CONFLICTS OF INTEREST. No contract or transaction between
the Company and one or more of the members of the Advisory Board or an
Affiliate of one or more of the members of the Advisory Board shall be void or
voidable solely by reason of such contractual relationship, or solely because
the interested member(s) of the Advisory Board is (are) present at or
participate(s) in the meeting of the Advisory Board which authorizes the
contract or transaction, or solely because his or their votes are counted for
such purpose, if:
(a) The material facts as to his or their relationship and as to
the contract or transaction are disclosed or are known to the Advisory Board
and the Advisory Board in good faith authorizes the contract or transaction by
the affirmative votes of a majority of disinterested members of the Advisory
Board, even though the disinterested members be less than a quorum; or
(b) The material facts as to his or their relationship and as to
the contract or transaction are disclosed or are known to the Share Holders and
the contract or transaction is specifically approved in good faith by a
Majority Vote; or
(c) The contract or transaction is fair to the Company as of the
time it is authorized, approved or ratified by the Advisory Board.
SECTION 5. INTERESTS OF SHARE HOLDERS
5.1 ADMISSION OF SHARE HOLDERS.
(a) The Initial Members of the Company are the Persons
executing this Agreement, each of whom is admitted to the Company as a Share
Holder effective upon the execution by such Person of this Agreement. Upon
completion of the Spinoff Distribution, Triad shall cease to be a Share Holder
and shall have no further rights as a Share Holder under this Agreement or the
Act.
(b) Upon completion of the Spinoff Distribution and upon
registration of their names in the records of the Company, the Persons who
receive Shares from Triad shall be automatically admitted as Share Holders.
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(c) Persons who acquire Shares or other membership interests
pursuant to Section 2.3 of this Agreement shall become members upon execution
of this Agreement and upon registration of their names in the records of the
Company and such other conditions as the Manager may require for admission.
5.2 AUTHORITY OF SHARE HOLDERS. No Share Holder, acting solely
in the capacity of a Share Holder, is an agent of the Company and no Share
Holder (other than a Manager or an officer) can bind or execute any instrument
on behalf of the Company.
5.3 VOTING RIGHTS OF SHARE HOLDERS. The Share Holders shall have
the right to vote on the matters set forth in this Agreement, including the
matters listed in this Section 5.3. Except as otherwise provided in this
Agreement or in the Act, matters on which the Share Holders may vote shall
require approval by Majority Vote. Share Holders shall have the right to vote
on the following matters:
(a) The election and removal of members of the Advisory Board,
pursuant to Section 4.6;
(b) Any amendment of this Agreement; provided, however, (i) no
amendment may require a Share Holder to contribute additional capital to the
Company unless the Share Holder has approved the amendment, and (ii) the
Manager shall have the power to amend this Agreement without the vote of the
Share Holders to the extent permitted under Section 10.10(b);
(c) Any merger of the Company with or into another business
entity;
(d) The dissolution of the Company pursuant to Section 7.1(a);
and
(e) Such other matters as the Manager or the Advisory Board may
from time to time elect to submit to the vote of the Share Holders, it being
understood and agreed that the Manager and the Advisory Board shall not be
obligated to submit any other matters to the vote of the Share Holders.
5.4 WITHDRAWAL. A Share Holder who withdraws or resigns from the
Company, whether by assignment of his Shares or otherwise, shall not have the
right to receive the fair value of his Shares from the Company.
5.5 REGISTRATION AND TRANSFERS OF SHARES.
(a) The Company shall keep or cause to be kept on behalf of
the Company a register in which, subject to such reasonable regulations as it
may prescribe and subject to the provisions of Section 5.5(b), the Company will
provide for the registration and transfer of Shares. The Transfer Agent is
appointed registrar and transfer agent for the purpose of registering Shares
and transfers of Shares as provided in this Agreement. The Company shall not
recognize transfers of Shares unless such transfers are effected in the manner
described in this Section 5.5. Upon surrender of a share certificate for
registration and transfer, and subject to the provisions of Section 5.5(b), the
appropriate officers of the Company or the Manager on behalf of the Company
shall execute and deliver, and the Transfer Agent shall countersign and
deliver, in the name of the holder or the designated transferee or transferees,
as required pursuant to the holder's instructions, one or more new certificates
evidencing the same aggregate number of Shares as was evidenced by the
certificate surrendered.
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(b) The Company shall not recognize any transfer of Shares
until the certificates evidencing the Shares are surrendered for registration
of transfer and the certificates are accompanied by a Transfer Application and
such other instruments and documents as are reasonably required by the Manager
duly executed by the transferee (or the transferee's attorney-in-fact duly
authorized in writing). No charge shall be imposed by the Company for the
transfer; provided, that as a condition to the issuance of any new certificate
under this Section 5.5, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed with respect
to the issuance.
(c) The Company and the Manager shall be entitled to treat the
record owner (as reflected on the books of the Company) of any Shares as the
absolute owner thereof in all respects, and shall incur no liability for
distributions made in good faith to the record owner until such time as a
Transfer Application has been received by the Company. The effective date of a
transfer shall be (i) the date of receipt and acceptance by the Transfer Agent
of the Transfer Application, or (ii) such later date as may be specified in the
Transfer Application.
(d) A transferee of Shares who has completed and delivered a
Transfer Application shall be deemed to have (i) agreed to comply with and be
bound by and to have executed this Agreement, and (ii) represented and
warranted that the transferee has the right, power and authority and, if an
individual, the capacity to enter into this Agreement.
(e) The Manager may impose restrictions on the transfers of
Shares if the Manager determines that restrictions are necessary to avoid a
significant risk of the Company becoming taxable as a corporation or otherwise
to be taxed as an entity for federal income tax purposes. The restrictions may
be imposed by making such amendments to this Agreement as the Manager may
determine to be necessary or appropriate to impose the restrictions; provided,
however, that any amendment that the Manager believes, in the exercise of its
reasonable discretion, could result in the delisting or suspension of trading
of Shares on the principal national securities exchange on which the Shares are
then traded must be approved, prior to the amendment being effected, by the
Advisory Board.
5.6 DECEASED, INCOMPETENT OR DISSOLVED SHARE HOLDER. The death,
incompetence, or dissolution of a Share Holder shall not cause dissolution of
the Company. If a Share Holder who is an individual dies or is adjudged by a
court of competent jurisdiction to be incompetent to manage the Share Holder's
person or property, the Share Holder's executor, administrator, guardian,
conservator, or other legal representative may exercise all of the Share
Holder's rights for the purpose of settling the Share Holder's estate or
administering the Share Holder's property. If a Share Holder is a corporation,
trust, or other entity and is dissolved or terminated, the powers of that Share
Holder may be exercised by its legal representative or successor.
SECTION 6. ACCOUNTING MATTERS
6.1 MAINTENANCE OF RECORDS. The Company shall maintain the
following records:
(a) A current list of the full name and last known business,
residence, or mailing address of each Share Holder and Manager.
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(b) A copy of the Certificate and all amendments, together
with any powers of attorney pursuant to which any amendment has been executed.
(c) Copies of the Company's federal, state and local income
tax or information returns for each Fiscal Year.
(d) Copies of this Agreement and any amendments to this
Agreement, together with any powers of attorney pursuant to which any amendment
has been executed.
(e) True and full information regarding the status of the
business and financial condition of the Company.
(f) True and full information regarding the amount of cash and
a description and statement of the agreed value of any other property or
services contributed by each Share Holder and which each Share Holder has
agreed to contribute in the future, and the date on which each became a Share
Holder.
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6.2 DELIVERY TO SHARE HOLDERS AND INSPECTION.
(a) Except as provided in Section 6.2(b), any Company records
are subject to inspection and copying for a proper purpose at the reasonable
request, and at the expense, of any Share Holder during ordinary business
hours. A Share Holder's agent or attorney has the same inspection and copying
rights as the Share Holder. The right to copy records includes, if reasonable,
the right to receive copies made by photographic, xerographic or other means.
The Company may impose a reasonable charge, not to exceed the estimated cost of
labor and material for production or reproduction, for copies of any
documentation provided to a Share Holder. Any demand by a Share Holder under
this Section shall be in writing and shall state the purpose of such demand.
(b) The Manager shall have the right to keep confidential from
the Share Holders, for such period of time as the Manager deems reasonable, any
information which the Manager reasonably believes to be in the nature of trade
secrets or other information the disclosure of which the Manager in good faith
believes is not in the best interest of the Company or its business or which
the Company is required by law or by agreement with a third party to keep
confidential.
6.3 REPORTS. The Company shall send or cause to be sent to each
Share Holder within 90 days after the end of each Fiscal Year such information
as is necessary to complete federal and state income tax or information returns
for the year.
6.4 TAX AND ACCOUNTING MATTERS.
(a) All accounting matters shall be determined in accordance with
generally accepted accounting practices and principles, consistently applied.
The revenues and expenses and the operations of the Company shall be reported
on the accrual method for both accounting and tax purposes.
(b) The Manager shall be the "tax matters partner" for purposes
of the Code. The tax matters partner shall act on behalf of the Company in the
event of an audit of the Company by the Internal Revenue Service, and may make
such decisions and take such actions in the course of any such audit as he
deems necessary or desirable.
(c) As soon as practicable after the end of each Fiscal Year,
the Company's financial statements shall be audited by a firm of independent
certified public accountants selected by the Manager and approved by the
Advisory Board.
(d) The Company shall elect to be taxed as a partnership for
federal income tax purposes, but shall elect to be taxed as a corporation for
California state income tax purposes.
SECTION 7. DISSOLUTION AND LIQUIDATION
7.1 EVENTS OF DISSOLUTION. Except as otherwise provided in this
Agreement, the Company shall be dissolved and its affairs shall be wound up
upon the happening of the first to occur of the following:
(a) Upon a Majority Vote to dissolve the Company.
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(b) Upon the sale or other disposition of all or substantially
all of the assets and properties of the Company and distribution to the Share
Holders of the proceeds of the sale or other disposition.
The Company shall not dissolve, but shall continue in the event of
the death, retirement, resignation, expulsion, bankruptcy or dissolution of any
Share Holder.
7.2 EFFECT OF DISSOLUTION. Upon any dissolution of the Company
under this Agreement or the Act, except as otherwise provided in this
Agreement, the continuing operation of the Company's business shall be confined
to those activities reasonably necessary to wind up the Company's affairs,
discharge its obligations, and liquidate its assets and properties in a
businesslike manner.
7.3 LIQUIDATION AND TERMINATION.
(a) If the Company is dissolved, then an accounting of the
Company's assets, liabilities and operations through the last day of the month
in which the dissolution occurs shall be made, and the affairs of the Company
shall thereafter be promptly wound up and terminated. Unless the Manager has
dissolved or entered into Bankruptcy, the Manager shall serve as the
liquidating trustee of the Company. If the Manager has dissolved or entered
into Bankruptcy, the Advisory Board shall appoint one or more Persons to serve
as the liquidating trustee of the Company. The liquidating trustee will be
responsible for winding up and terminating the affairs of the Company and will
determine all related matters (including, without limitation, the arrangements
to be made with creditors, to what extent and under what terms the assets of
the Company are to be sold, and the amount or necessity of cash reserves to
cover contingent liabilities) as the liquidating trustee deems advisable and
proper. The liquidating trustee will liquidate the assets of the Company as
promptly as is consistent with obtaining their fair market value, and the
proceeds, to the extent sufficient, will be applied and distributed in the
following order:
(1) To the payment and discharge of all of the Company's
debts and liabilities to creditors (including Share Holders) in the
order of priority as provided by law, other than liabilities for
distributions to Share Holders; and
(2) The balance, if any, to the Share Holders in proportion
to their ownership of Shares as of the date of distribution. All
distributions shall be made by the end of the Fiscal Year in which the
liquidation occurs or, if later, within ninety (90) days after the
date of liquidation.
(b) After all of the assets of the Company have been distributed,
the Company's legal existence shall terminate; however, if at any time
thereafter any funds in any cash reserve fund referred to in Section 7.3(a) are
released because the need for the cash reserve fund has ended, the funds shall
be distributed to the Share Holders in the same manner as if the distribution
had been made pursuant to Sections 7.3(a)(1) and (2) above.
(c) Notwithstanding anything to the contrary in this Agreement,
upon a liquidation within the meaning of Treasury Regulation section
1.704-1(b)(2)(ii)(g), if any Share Holder has a deficit or negative balance in
the Share Holder's capital account (after giving effect to all contributions,
distributions, allocations, and other capital account adjustments for all
taxable years, including the year during which such liquidation occurs), the
Share Holder shall have no obligation to make any capital contribution to the
Company, and the negative balance of the Share Holder's capital account
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shall not be considered a debt owed by the Share Holder to the Company or to
any other Person for any purpose whatsoever.
7.4 CERTIFICATE OF CANCELLATION. Upon the completion of the
winding up of the affairs of the Company, the Manager shall prepare, execute
and deliver to the Delaware Secretary of State a certificate of cancellation in
accordance with Section 18-203 of the Act.
7.5 RECOURSE TO ASSETS. The Share Holders shall look solely to
the assets of the Company for any profits or return of their capital
contributions. If the assets remaining after the payment or discharge of the
debts and liabilities of the Company are insufficient to return a Share
Holder's capital contributions or profits, the Share Holder shall have no
recourse against the Company or the other Share Holders.
SECTION 8. DISPUTE RESOLUTION
8.1 DISPUTE RESOLUTION. Any controversy, dispute or claim
("CLAIM") between any Share Holder and the Company or between the Manager and
the Company, arising out of or relating to this Agreement or the Company,
whether arising in contract or tort, law or equity, shall be subject to a
non-binding mediation, and if not then resolved, may be determined by
litigation, both subject to the provisions of this Section 8.
8.2 MEDIATION.
(a) Any Claim shall first be the subject of a non-binding
mediation ("MEDIATION"), conducted in the County of Alameda, State of
California, by a retired judge or other mediator who is a member of Judicial
Arbitration & Mediation Services, Inc./Endispute ("JAMS") or other agreed upon
mediator. Any Share Holder, Manager or the Company may initiate the Mediation
by written notice to the Company, Manager or the Share Holder(s) involved in
the Claim. The date the notice is given is referred to as the "MEDIATION
INITIATION DATE."
(b) The mediator ("MEDIATOR") shall be selected by mutual
agreement to the parties to the Claim or, if they cannot agree within thirty
(30) days after the Mediation Initiation Date, the Mediator shall be selected
through such procedures as JAMS regularly follows.
(c) The Mediation shall be held within thirty (30) days after
the Mediator is selected, or such longer period as the parties to the Claim and
the Mediator mutually decide.
(d) The Company shall bear the cost of the Mediator's fees and
expenses, but each party to the Claim shall pay its own attorneys' and expert
witness fees and any other related costs.
8.3 LITIGATION.
(a) If the Claim has not been resolved by Mediation as
provided in this Section 8 within one hundred eighty (180) days of the
Mediation Initiation Date, either party may initiate litigation upon ten (10)
days written notice to the other party; provided, however, that if one party
has requested the other to participate in the Mediation and the other has
failed to participate, the requesting party may initiate litigation before the
expiration of the above period.
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(b) The procedures specified in this Section 8 shall be the
sole and exclusive procedures for the resolution of Claims; provided, however,
that a party, without prejudice to the procedures of this Section 8, may file a
complaint for statute of limitations purposes or to seek a preliminary
injunction or other provisional relief judicial relief if in its sole judgment
such action is necessary to avoid irreparable damage or to preserve the status
quo. Despite such action, the parties shall continue to participate in good
faith in the procedures specified in this Section 8.
(c) All applicable statutes of limitation and defenses based
upon the passage of time shall be tolled while the procedures specified in this
Section 8 are pending. The parties will take such action, if any, required to
effectuate the tolling.
(d) Each Share Holder, Manager and the Company irrevocably
submit in any suit, action or proceeding arising out of a Claim to the
jurisdiction of the Superior Court of County of Alameda, State of California or
the United States District Court in the Northern District of California.
(e) In any suit, action or proceeding arising out of a Claim,
each party to the Claim shall pay its own attorneys' and expert witness fees
and any other related costs.
SECTION 9. RIGHTS AGREEMENT
At the discretion of the Advisory Board, the Company may enter
into the Rights Agreement in substantially the form attached to this Agreement
as Exhibit B (the "RIGHTS AGREEMENT") and may perform such acts and make such
elections as are required or permitted under the Rights Agreement.
SECTION 10. GENERAL PROVISIONS
10.1 GOVERNING LAW. This Agreement and the rights of the parties
under this Agreement will be governed by, interpreted, and enforced in
accordance with the laws of the State of Delaware.
10.2 BINDING EFFECT. This Agreement will be binding upon and
inure to the benefit of the Share Holders, and their respective distributees,
successors and assigns; provided, however, nothing contained in this Section
10.2 shall limit the effectiveness of any restriction on transfers of Shares.
10.3 TERMS. Any reference to the Act, the Code or other statutes
or laws will include all amendments, modifications, or replacements of the
specific sections and provisions concerned. In cases of uncertainty this
Agreement shall be construed without regard to which of the parties caused the
uncertainty to exist.
10.4 HEADINGS. All headings are inserted only for convenience
and ease of reference and are not to be considered in the construction or
interpretation of any provision of this Agreement.
10.5 SEVERABILITY. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under the present or future laws effective
during the term of this Agreement, the provision will be fully severable; this
Agreement will be construed and enforced as if the illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of the illegal,
invalid or unenforceable provision, there will be added automatically as a part
of
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this Agreement a provision as similar in terms to the illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
10.6 MULTIPLE COUNTERPARTS. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original, and
counterpart signature pages may be assembled to form a single original
document.
10.7 ADDITIONAL DOCUMENTS AND ACTS. Each Share Holder agrees to
execute and deliver such additional documents and instruments and to perform
such additional acts as may be necessary or appropriate to effectuate, carry
out and perform all of the terms, provisions and conditions of this Agreement
and the transactions contemplated by this Agreement.
10.8 NO THIRD PARTY BENEFICIARY. This Agreement is made solely
and specifically among and for the benefit of the parties, and their respective
successors and assigns subject to the express provisions relating to successors
and assigns, and no other Person will have any rights, interest or claims or be
entitled to any benefits under or on account of this Agreement as a third party
beneficiary or otherwise.
10.9 NOTICES. All notices, consents, requests, demands or other
communications to or upon the respective parties shall be in writing and shall
be effective for all purposes upon receipt on any business day before 5:00 PM
local time and on the next business day if received after 5:00 PM or on other
than a business day, including without limitation, in the case of (i) personal
delivery, (ii) delivery by messenger, express or air courier or similar
courier, (iii) delivery by United States first class certified or registered
mail, postage prepaid and (iv) transmittal by telecopier or facsimile. In this
section "business days" means days other than Saturdays, Sundays, and federal
and state legal holidays. Receipt of communications by United States first
class or registered mail will be sufficiently evidenced by return receipt.
Receipt of communications by facsimile shall be sufficiently evidenced by a
machine generated report of transmission without notation of error. In the
case of illegible or otherwise unreadable facsimile transmissions, the
receiving party shall promptly notify the transmitting party of any
transmission problem and the transmitting party shall promptly resend any
affected pages.
10.10 AMENDMENTS.
(a) AMENDMENTS TO AGREEMENT. Except to the extent the Manager
has the authority to amend this Agreement, it may be amended in whole or in
part only as provided in Section 5.3. Provided an amendment has been approved
as required by this Agreement, the amendment may be signed by the Manager on
behalf of the Share Holders. If any conflict arises between the provisions of
the amendment, or amendments, and the terms of this Agreement, the most recent
provisions shall govern and control.
(b) AMENDMENTS BY MANAGER. This Agreement may be amended by the
Manager without the consent of any of the Share Holders: (1) as provided in
Sections 2.3 and 4.2(q); (2) as provided in Section 5.5(e); (3) to cure any
ambiguity, to correct or supplement any provision of this Agreement which may
be inconsistent with any other provisions of this Agreement, or to make any
other provision with respect to matters or questions arising under this
Agreement not inconsistent with the intent of this Agreement; and (4) to change
any provision of this Agreement required to be
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so changed by the staff of the Securities and Exchange Commission or other
federal agency or a state "Blue Sky" commissioner, a listing agency, or similar
official, which change is deemed by the commissioner, agency, or official to be
for the benefit or protection of the Share Holders.
(c) AMENDMENTS TO CERTIFICATE. The Certificate shall be amended
whenever required by the provisions of this Agreement or by the Act. Any such
amended Certificate shall be filed for record by the Manager as required by the
Act, and this Agreement shall also be amended as necessary to reflect such
change.
10.11 TITLE TO COMPANY PROPERTY. Legal title to all property of
the Company will be held and conveyed in the name of the Company.
10.12 WAIVER. No waiver of any obligations under this Agreement
will be enforceable or admissible unless set forth in a writing signed by the
party against which enforcement or admission is sought. No delay or failure to
require performance of any provision of this Agreement shall constitute a
waiver of that provision as to that or any other instance. Any waiver granted
shall apply solely to the specific instance expressly stated.
10.13 ENTIRE AGREEMENT. This Agreement contains the entire
understanding between the Share Holders and supersedes any prior written or
oral agreements between them regarding the same subject matter. There are no
representations, agreements, arrangements or understandings, oral or written,
between the Share Holders relating to the subject matter of this Agreement
which are not fully expressed in this Agreement.
10.14 NO STATE LAW PARTNERSHIP. The Share Holders intend that
the Company not be a partnership (including, without limitation, a limited
partnership) or joint venture, and that no Share Holder be an agent, partner or
joint venturer of any other Share Holder, for any purposes other than federal
and state tax purposes, and this Agreement shall not be construed to suggest
otherwise.
The Initial Members have executed this Agreement as of the date
set forth above.
TRIAD SYSTEMS CORPORATION, a Delaware corporation 3055 MANAGEMENT CORP., a California corporation
By /S/ XXXXX X. XXXXXX By /s/ XXXXX X. XXXXXX
-------------------- --------------------
Title: President Title: Vice President, Secretary, & CFO
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