XXXXXX CAPITAL PARTNERS, L.L.C.
A Delaware Limited Liability Company
LIMITED LIABILITY COMPANY AGREEMENT
Dated as of December 26, 2000
THE MEMBERSHIP INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY
AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933 OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH INTERESTS MAY NOT BE
SOLD, ASSIGNED, PLEDGED, OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE
REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND COMPLIANCE WITH
THE OTHER RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.
TABLE OF CONTENTS
SECTION HEADING PAGE
ARTICLE I DEFINITIONS................................................1
Section 1.1 Definitions................................................1
Section 1.2. Construction...............................................5
Section 1.3. Including..................................................6
ARTICLE II ORGANIZATION...............................................6
Section 2.1. Formation..................................................6
Section 2.2. Name.......................................................6
Section 2.3. Registered Office; Registered Agent; Principal Office;
Other Offices............................................6
Section 2.4. Purposes...................................................6
Section 2.5. Powers of the Company......................................7
Section 2.6. Foreign Qualification......................................8
Section 2.7. Term.......................................................9
Section 2.8. No State-Law Partnership...................................9
ARTICLE III MEMBERSHIP; CAPITAL CONTRIBUTIONS; ADDITIONAL INTERESTS....9
Section 3.1. Members....................................................9
Section 3.2. No Liability of Members....................................9
Section 3.3. Initial Capital Contributions.............................10
Section 3.4. Issuance of Additional Interests; Additional Members......10
Section 3.5. Certification of Percentage Interests.....................11
ARTICLE IV CAPITAL ACCOUNTS..........................................11
Section 4.1. Establishment and Determination of Capital Accounts.......11
Section 4.2. Computation of Amounts....................................11
Section 4.3. Negative Capital Accounts.................................12
Section 4.4. Company Capital...........................................12
ARTICLE V DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES..........12
Section 5.1. Generally.................................................12
Section 5.2. Distributions.............................................12
Section 5.3. Allocation of Profits and Losses..........................13
Section 5.4. Regulatory and Special Allocations........................13
Section 5.5. Tax Allocations: Code Section 704(c)......................14
ARTICLE VI MANAGEMENT................................................15
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Section 6.1. Management by Members.....................................15
Section 6.2. Unanimous Consent.........................................15
Section 6.3. Managing Member...........................................16
Section 6.4. Meeting of Members........................................18
Section 6.5. Liability for Certain Acts................................18
Section 6.6. Members Have No Exclusive Duty to Company.................18
Section 6.7. Indemnity of the Members, Employees and Other Agents......19
ARTICLE VI EXCULPATION AND INDEMNIFICATION...........................19
Section 7.1. Performance of Duties; No Liability of Member and
Officers................................................19
Section 7.2. Transactions Between the Company and the Members..........19
Section 7.3. Insurance.................................................19
ARTICLE VIII TAXES.....................................................19
Section 8.1. Tax Returns...............................................19
Section 8.2. Tax Matters Member........................................20
ARTICLE IX BOOKS, REPORTS AND COMPANY FUNDS..........................20
Section 9.1. Maintenance of Books......................................20
Section 9.2. Owner Tax Information.....................................20
Section 9.3. Company Funds.............................................20
ARTICLE X TRANSFERS AND OTHER EVENTS................................21
Section 10.1. Transfer in General.......................................21
Section 10.2. Transfer to a Permitted Transferee........................21
Section 10.3. Transfer to Other Than a Permitted Transferee.............21
Section 10.4. Transferee's Rights and Obligations.......................23
Section 10.5. Complete Transfer of Membership Interest Results in
Termination of Status...................................24
Section 10.6. Void Assignment...........................................24
Section 10.7. Substituted Member........................................24
Section 10.8. Effect of Assignment......................................25
Section 10.9. Transfer Fees and Expenses................................25
Section 10.10. Other Limitations.........................................25
Section 10.11. Effective Date............................................25
Section 10.12. Effect of Death or Incapacity.............................25
Section 10.13 Transfers by Sole Member..................................25
Section 10.14. Representations of New Members............................25
ARTICLE XI DISSOLUTION, LIQUIDATION AND TERMINATION..................26
Section 11.1. Dissolution...............................................26
Section 11.2. Liquidation and Termination...............................26
Section 11.3. Cancellation of Certificate...............................27
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ARTICLE XII GENERAL/MISCELLANEOUS PROVISIONS..........................27
Section 12.1. Offset....................................................27
Section 12.2. Notices...................................................27
Section 12.3. Entire Agreement..........................................28
Section 12.4. Effect of Waiver or Consent...............................28
Section 12.5. Amendment or Modification.................................28
Section 12.6. Binding Effect............................................28
Section 12.7. Governing Law; Severability...............................28
Section 12.8. Further Assurances........................................28
Section 12.9. Waiver of Certain Rights..................................28
Section 12.10. Indemnification and Reimbursement for Payments on Behalf
of an Owner.............................................29
Section 12.11. Notice to Members of Provisions...........................29
Section 12.12. Counterparts..............................................29
Section 12.13. Consent to Jurisdiction...................................29
Section 12.14. Headings..................................................30
Section 12.15. Remedies..................................................30
XXXXXX CAPITAL PARTNERS, L.L.C.
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LIMITED LIABILITY COMPANY AGREEMENT
OF
XXXXXX CAPITAL PARTNERS, L.L.C.
A DELAWARE LIMITED LIABILITY COMPANY
THIS LIMITED LIABILITY COMPANY AGREEMENT of Xxxxxx Capital Partners,
L.L.C., dated and effective as of December 26, 2000, is adopted by, and executed
and agreed to, for good and valuable consideration, by Xxxxx X. Xxxxxx, Xxxx
Xxxx Xxxxx, Xxxx X. Xxxxxx, Xxxx X. Xxxxxx and Bessemer Trust Company, N.A.,
solely as trustees of the Xxxxx X. Xxxxxx Qualified Terminable Interest Property
Marital Deduction Trust created under the Fourth Amendment and Restatement of
Declaration of Trust Establishing the Xxxx X. Xxxxxx Revocable Trust, dated
September 22, 1984 (the "QTIP TRUST") and Xxxxx X. Xxxxxx, solely as trustee of
the Xxxxx X. Xxxxxx Revocable Trust, dated September 22, 1984 (the "REVOCABLE
TRUST") and each other Person who becomes a Member (collectively, the "MEMBERS")
and in accordance with the terms of this Agreement.
WHEREAS, the Members wish to form a limited liability company pursuant
to the Act by filing a Certificate of Formation of the Company (the
"CERTIFICATE") with the Secretary of State of the State of Delaware and by
entering into this Agreement;
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein made and intending to be legally bound, the Members hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. As used in this Agreement, the following terms
have the following meanings:
"ACT" means the Delaware Limited Liability Company Act, Title 6,
ss.ss.18-101, ET SEQ., and any successor statute, as amended from time to time.
"ADDITIONAL INTERESTS" has the meaning given that term in Section 3.4.
"AFFILIATE" of, or a Person "Affiliated" with, a specified Person means
a Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Person
specified.
"AGREEMENT" means this Limited Liability Company Agreement, as executed
and as it may be amended, modified, supplemented or restated from time to time,
as the context requires.
"ASSIGNEE" means any owner of an Economic Interest who (or which) is
not a Member. No owner of an Economic Interest who (or which) is not a Member
shall be deemed a "member" (as that term is used in the Act) of the Company.
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"ASSIGNEE INTEREST" means an Economic Interest owned by an Assignee.
"BOOK VALUE" means, with respect to any Company property, the Company's
adjusted basis for federal income tax purposes, adjusted from time to time to
reflect the adjustments required or permitted by Treasury Regulation Section
1.704-1(b)(2)(iv)(d)-(g) (PROVIDED that, in the case of permitted adjustments,
the Company chooses to make such adjustments); PROVIDED that the Book Value of
any asset contributed to the Company shall be equal to the fair market value of
the contributed asset on the date of contribution.
"CAPITAL ACCOUNT" has the meaning given that term in Section 4.1.
"CAPITAL CONTRIBUTION" means the aggregate contributions made by an
Owner to the Company pursuant to Article III as of the date in question, as
shown opposite such Owner's name on Schedule A, as the same may be amended from
time to time.
"CERTIFICATE" has the meaning given that term in the Preamble.
"CLASS A MEMBER" means the QTIP Trust, the Revocable Trust and each
Person who holds Class A Membership Interests and is hereafter admitted as a
Class A Member in accordance with the terms of this Agreement and the Act.
"CLASS A MEMBER PERCENTAGE INTEREST" means, at any time with respect to
a Class A Member, a percentage equal to a fraction, (a) the numerator of which
is the number of Units held by such Class A Member at such time and (b) the
denominator of which is the aggregate number of Units held by all Class A
Members at such time, in each case as reflected in the books and records of the
Company.
"CLASS B MEMBER" means the QTIP Trust, the Revocable Trust and each
Person who holds Class B Membership Interests and is hereafter admitted as a
Class B Member in accordance with the terms of this Agreement and the Act.
"CODE" means the Internal Revenue Code of 1986 and any successor
statute, as amended from time to time.
"COMPANY" means the Delaware limited liability company formed pursuant
to the Certificate and this Agreement.
"COMPANY MINIMUM GAIN" has the meaning set forth for "partnership
minimum gain" in Treasury Regulation Section 1.704-2(d).
"ECONOMIC INTEREST" means an Owner's share of the Company's net
profits, net losses, and distributions pursuant to this Agreement and the Act,
but Economic Interests other than Membership Interests shall not include any
right to participate in the management or affairs of the Company, including the
right to vote on, consent to or otherwise participate in any decision of the
Members, or any right to receive information concerning the business and affairs
of the Company, in each case to the extent provided for herein or otherwise
required by the Act.
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"FAIR MARKET VALUE OF THE CONSIDERATION" means the fair market value of
the consideration that would be received by a Transferring Member or Assignee,
as reported in the written notice required by Section 10.3(b)(i). Such fair
market value shall be determined by an independent appraisal performed by a
qualified appraiser selected by the Managing Member (or if none, the Class A
Members) once one or more Members have agreed to purchase the offered Membership
Interest pursuant to Section 10.3(b)(ii). The decision of such appraiser shall
be conclusive on all parties. The fees and costs of such appraiser shall be paid
by the Transferring Member or Assignee.
"FAIR VALUE" of a Membership Interest means, as of the effective date
of a purchase pursuant to a right of first refusal as provided in Article X, the
fair value on such date of such Membership Interest within the meaning of
Section 604 of the Act. The Fair Value of such Membership Interest shall be
determined by an independent appraisal performed by a qualified appraiser
selected by the Managing Member (or if none, by the Class A Members), once one
or more Members or the Company has agreed to purchase the offered Membership
Interest pursuant to Section 10.3(b). The decision of such appraiser shall be
conclusive on all parties. The fees and costs of such appraiser shall be paid by
the Transferring Member or Assignee.
"FIRST REFUSAL PERCENTAGE" for a Member who has exercised his right of
first refusal to purchase a Membership Interest in a transaction under Section
10.3(b) means the percentage equivalent derived from a fraction the numerator of
which is the Member's Percentage Interest and the denominator of which is the
sum of all of the Member Percentage Interests of the Members who have exercised
their right of first refusal with respect to such transaction.
"FISCAL YEAR" of the Company means the calendar year.
"FISCAL QUARTER" of the Company means each calendar quarter ending
March 31, June 30, September 30 and December 31.
"INCAPACITY" or "INCAPACITATED" means (a) with respect to a natural
person, (1) such person is under a legal disability (under the laws of such
person's domicile), (2) such person has been certified in writing to be unable
to manage his financial affairs by the principal physician attending to such
person's care, and the Members may rely upon written notice of that
determination without any duty to inquire into the authenticity of the
certification or any of the facts upon which it is based, (3) such person's
whereabouts are unknown and the Members have not been able to locate such person
for at least ninety (90) days, or (4) the bankruptcy of such person and (b) with
respect to any other Person, the bankruptcy, liquidation, dissolution, or
termination of such Person.
"INDEMNIFYING OWNER" has the meaning given that term in Section 12.10.
"LOSSES" means items of Company loss and deduction determined according
to Section 4.2.
"MANAGING MEMBER" has the meaning set forth in Section 6.3.
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"MEMBER" means an Owner who is admitted as a Member in accordance with
the terms of this Agreement and the Act. The Members shall constitute the
"members" (as that term is defined in the Act) of the Company.
"MEMBER MINIMUM GAIN" has the meaning set forth for "partner
nonrecourse debt minimum gain" in Treasury Regulation Section 1.704-2(i).
"MEMBER NONRECOURSE DEDUCTIONS" has the meaning set forth for "partner
nonrecourse deductions" in Treasury Regulation Section 1.704-2(i).
"MEMBERSHIP INTEREST" means a Member's interest in the Company,
including such Member's Economic Interest and the right, if any, to participate
in the management of the business and affairs of the Company, including the
right, if any, to vote on, consent to, or otherwise participate in any decision
or action of or by the Members and the right to receive information concerning
the business and affairs of the Company, in each case to the extent expressly
provided in this Agreement or otherwise required by the Act.
"MEMBER PERCENTAGE INTEREST" means, at any time with respect to a
Member, a percentage equal to a fraction, (a) the numerator of which is the
number of Units held by such Member at such time and (b) the denominator of
which is the aggregate number of Units held by all Members at such time, in each
case as reflected in the books and records of the Company.
"OWNER" means any owner of an Economic Interest, whether such Owner is
a Member or an Assignee.
"PERCENTAGE INTEREST" means, at any time with respect to an Owner, a
percentage equal to a fraction, (a) the numerator of which is the number of
Units held by such Owner at such time and (b) the denominator of which is the
aggregate number of Units held by all Owners at such time, in each case as
reflected in the books and records of the Company. For purposes of this
Agreement, the Percentage Interest shall be carried out to three decimal places.
"PERMITTED TRANSFEREE" means any one or more of the following:
(a) Xxxxx X. Xxxxxx, her ancestors, and her descendants;
(b) a Member, an ancestor of a Member, and a descendant of a
Member;
(c) one or more organizations described in Sections 170(c),
2055(a), and 2522(a) of the Code;
(d) the decedent's estate or guardianship estate of any of the
persons listed in (a), (b) or of an Assignee of such persons, or a
revocable trust substitute for a decedent's estate exclusively for the
benefit of one or more of the persons listed in (a), (b) or of an
Assignee of such persons; and
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(e) a trust the terms of which provide that any Membership
Interest is held, at the time of the Transfer of the Membership
Interest to the trust, exclusively for the benefit of one or more of
the persons listed in (a) or (b);
PROVIDED, HOWEVER, for purposes of (d) and (e) above, the remaindermen
of a trust shall not be considered in determining whether a trust is
exclusively for the benefit of one or more of the persons listed in (a)
or (b).
"PERSON" means any natural person, partnership (whether general or
limited), limited liability company, trust, estate, association, corporation,
custodian, nominee or any other individual or entity in its own or any
representative capacity.
"PROFITS" means items of Company income and gain determined according
to Section 4.2.
"SOLE DISCRETION": In the case of any vote, consent, or approval under
this Agreement to be made in a party's "sole discretion," each party may grant
or withhold such vote, consent or approval (a) in its sole and absolute
discretion, (b) with or without cause, (c) subject to such conditions as it
shall deem appropriate, and (d) without taking into account the interests of,
and without incurring liability to, the Company, any Owner or any Officer or
employee of the Company.
"TAX MATTERS MEMBER" has the meaning given to that term in Section 8.2.
"TAXABLE YEAR" means the Company's taxable year ending December 31 (or
part thereof, in the case of the Company's last taxable year), or such other
year as is (i) required by Section 706 of the Code or (ii) determined by the
Class A Members.
"TRANSFER" means, as a noun, a transaction by which a Member or
Assignee assigns all or any portion of a Membership Interest or any interest
therein to another person, and includes a sale, assignment, gift, bequest,
pledge, encumbrance, hypothecation, mortgage, exchange, distribution from a
trust, or any other disposition. "Transfer" means, as a verb, to voluntarily or
involuntarily enter into a transaction described above as a Transfer.
"UNIT" means an Economic Interest of an Owner in the Company
representing a fractional part of the Economic Interests of all Owners.
Other terms defined in this Agreement have the meanings so given them.
SECTION 1.2. CONSTRUCTION. Whenever the context requires, the gender of
all words used in this Agreement includes the masculine, feminine and neuter and
the singular number includes the plural number and vice versa. All references to
Articles and Sections refer to articles and sections of this Agreement, and all
references to Schedules are to Schedules attached hereto, each of which is made
a part hereof for all purposes.
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SECTION 1.3. INCLUDING. Reference in this Agreement to "including,"
"includes" and "include" shall be deemed to be followed by "without limitation."
ARTICLE II
ORGANIZATION
SECTION 2.1. FORMATION. The Company has been organized as a Delaware
limited liability company by the execution and filing of the Certificate by an
authorized person (within the meaning of the Act), under and pursuant to the
Act. The rights, powers, duties, obligations and liabilities of the Members and
those of other Owners shall be determined pursuant to the Act and this
Agreement. To the extent that the rights, powers, duties, obligations and
liabilities of any Owner are different by reason of any provision of this
Agreement than they would be in the absence of such provision, this Agreement
shall, to the extent permitted by the Act, control.
SECTION 2.2. NAME. The name of the Company is "Xxxxxx Capital Partners,
L.L.C.", and all Company business shall be conducted in that name or in such
other names that comply with applicable law as the Class A Members may select
from time to time.
SECTION 2.3. REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE;
OTHER OFFICES. The registered office of the Company required by the Act to be
maintained in the State of Delaware shall be the office of the initial
registered agent named in the Certificate or such other office (which need not
be a place of business of the Company) as the Class A Members may designate from
time to time in the manner provided by law. The registered agent of the Company
in the State of Delaware shall be the initial registered agent named in the
Certificate or such other Person or Persons as the Class A Members may designate
from time to time in the manner provided by law. The principal office of the
Company shall be at such place as the Class A Members may designate from time to
time, which need not be in the State of Delaware, and the Company shall maintain
records there. The Company may have such other offices as the Class A Members
may designate from time to time.
SECTION 2.4. PURPOSES. The general purpose of this Company is to
provide a business structure for the members of the family of Xxxxx X. Xxxxxx
and trusts for their benefit that will enable them to pool and invest assets
with a goal towards long-term growth of investments under consolidated ownership
and management. In addition, the Company may engage in any other lawful act or
activity for which limited liability companies may be organized under the Act.
The Company may engage in any and all activities necessary, desirable or
incidental to the accomplishment of the foregoing. Notwithstanding anything
herein to the contrary, nothing set forth herein shall be construed as
authorizing the Company to possess any purpose or power, or to do any act or
thing, forbidden by law to a limited liability company organized under the laws
of the State of Delaware. The Company is created (i) to consolidate ownership of
the stock in Winnebago Industries, Inc. held by the Members into one single
voting block and to maintain the Members' influence over Winnebago Industries
Inc., (ii) to pool assets to lower operating costs and increase diversification,
thereby increasing asset value over time, (iii) to simplify annual giving and
the management of assets through consolidation, (iv) to protect Company assets
from creditors of individual Members, including protection against claims of
divorced spouses, and
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(v) to protect the personal assets of the Members from debts of or claims
arising in connection with the ownership and operation of the real estate owned
by the Company.
SECTION 2.5. POWERS OF THE COMPANY.
(a) POWER AND AUTHORITY. Subject to the provisions of this Agreement,
the Company shall have the power and authority to take any and all actions
necessary, appropriate, proper, advisable, convenient or incidental to or for
the furtherance of the purposes set forth in Section 2.04, including the power:
(i) to conduct its business, carry on its operations and have
and exercise the powers granted to a limited liability company by the
Act in any state, territory, district or possession of the United
States, or in any foreign country that may be necessary, convenient or
incidental to the accomplishment of the purpose of the Company;
(ii) to acquire by purchase, lease, contribution of property
or otherwise, own, hold, operate, maintain, finance, refinance,
improve, lease, sell, convey, mortgage, transfer, demolish or dispose
of any real or personal property that may be necessary, convenient or
incidental to the accomplishment of the purpose of the Company;
(iii) to enter into, perform and carry out contracts of any
kind, including contracts with any Owner or any Affiliate thereof, or
any agent of the Company necessary to, in connection with, convenient
to or incidental to the accomplishment of the purpose of the Company;
(iv) to purchase, take, receive, subscribe for or otherwise
acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge, or
otherwise dispose of, and otherwise use and deal in and with, shares or
other interests in or obligations of domestic or foreign corporations,
associations, general or limited partnerships (including the power to
be admitted as a partner thereof and to exercise the rights and perform
the duties created thereby), trusts, limited liability companies
(including the power to be admitted as a member or appointed as a
manager thereof and to exercise the rights and perform the duties
created thereby) or other entities or direct or indirect obligations of
the United States or of any government, state, territory, governmental
district or municipality or of any instrumentality of any of them;
(v) to lend money for any proper purpose, to invest and
reinvest its funds and to take and hold real and personal property for
the payment of funds so loaned or invested;
(vi) to xxx and be sued, complain and defend, and participate
in administrative or other proceedings, in its name;
(vii) to appoint employees and agents of the Company and
define their duties and fix their compensation;
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(viii) to indemnify any Person in accordance with the Act and
to obtain any and all types of insurance;
(ix) to cease its activities and cancel its Certificate;
(x) to negotiate, enter into, renegotiate, extend, renew,
terminate, modify, amend, waive, execute, acknowledge or take any other
action with respect to any lease, contract or security agreement in
respect of any assets of the Company;
(xi) to borrow money and issue evidences of indebtedness and
guaranty indebtedness (whether of the Company or any of its
subsidiaries), and to secure the same by a mortgage, pledge or other
lien on the assets of the Company;
(xii) to pay, collect, compromise, litigate, arbitrate or
otherwise adjust or settle any and all other claims or demands of or
against the Company or to hold such proceeds against the payment of
contingent liabilities;
(xiii) to make, execute, acknowledge and file any and all
documents or instruments necessary, convenient or incidental to the
accomplishment of the purpose of the Company.
(xiv) to establish an employee benefit and welfare plan for
the benefit of the employees of the Company; and
(xv) to open bank and brokerage accounts in the name of the
Company.
(b) DESIGNATED AUTHORITY. Subject to the provisions of this Agreement,
the Class A Members may authorize any Person (including any Member or Officer)
to enter into and perform any obligation imposed by any document on behalf of
the Company.
(c) MERGER. Subject to the provisions of this Agreement, the Company
may merge with, or consolidate into, another limited liability company
(organized under the laws of Delaware or any other state), a corporation
(organized under the laws of Delaware or any other state) or other business
entity (as defined in Section 18-209(a) of the Act), regardless of whether the
Company is the survivor of such merger or consolidation.
SECTION 2.6. FOREIGN QUALIFICATION. The Members shall cause the Company
to comply with all requirements necessary to qualify the Company as a foreign
limited liability company in any jurisdiction in which the Company owns property
or transacts business to the extent, in the reasonable judgment of the Members,
such qualification or registration is necessary or advisable for the protection
of the limited liability of the Members or to permit the Company lawfully to own
property or transact business. Each Member shall, execute, acknowledge, swear to
and deliver any or all certificates and other instruments conforming with this
Agreement that are necessary or appropriate to qualify, continue or terminate
the Company as a foreign limited liability company in all such jurisdictions in
which the Company may conduct business.
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SECTION 2.7. TERM. The term of the Company commenced on the date the
Certificate was filed with the office of the Secretary of State of Delaware and
shall continue in existence until 11:59 p.m. Eastern Standard Time on December
31, 2050 or dissolution prior thereto as determined under Section 11.1.
SECTION 2.8. NO STATE-LAW PARTNERSHIP. The Members intend that the
Company shall not be a partnership (including, without limitation, a limited
partnership) or joint venture, and that no Member or Assignee shall be a partner
or joint venturer of any other Member or Assignee, for any purposes other than
federal and, if applicable, state tax purposes, and this Agreement shall not be
construed to the contrary. The Members intend that the Company shall be treated
as a partnership for federal and, if applicable, state income tax purposes, and
each Owner and the Company shall file all tax returns and shall otherwise take
all tax and financial reporting positions in a manner consistent with such
treatment.
ARTICLE III
MEMBERSHIP; CAPITAL CONTRIBUTIONS; ADDITIONAL INTERESTS
SECTION 3.1. MEMBERS.
(a) NAMES, ETC. Subject to the following sentence, the names,
residence, business or mailing addresses, Capital Contributions, Membership
Class and the Units of the Members (and other Owners, if any) are set forth on
Schedule A, as such Schedule shall be amended from time to time in accordance
with the terms of this Agreement. Any reference in this Agreement to Schedule A
shall be deemed to be a reference to Schedule A as amended and in effect from
time to time. Each Person (excluding Assignees) listed on Schedule A, upon (i)
his or its execution of this Agreement or counterpart thereof and (ii) receipt
(or deemed receipt) of such Person's Capital Contribution as set forth on
Schedule A, is hereby admitted to the Company as a Member of the Company.
(b) LOANS BY MEMBERS. No Member, as such, shall be required to lend any
funds to the Company or to make any additional contribution of capital to the
Company, except as otherwise required by applicable law or by this Agreement.
Any Member may, with the approval of the Members, make loans to the Company, and
any loan by a Member to the Company shall not be considered to be a Capital
Contribution.
SECTION 3.2. NO LIABILITY OF MEMBERS.
(a) NO LIABILITY. Except as otherwise required by applicable law and as
expressly set forth in this Agreement, no Member shall have any personal
liability whatever in such Member's capacity as a Member, whether to the
Company, to any of the other Owners, to the creditors of the Company or to any
other third party, for the debts, liabilities, commitments or any other
obligations of the Company or for any losses of the Company. Each Member shall
be liable only to make such Member's Capital Contribution to the Company and the
other payments provided expressly herein.
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(b) DISTRIBUTION. In accordance with the Act and the laws of the State
of Delaware, a member of a limited liability company may, under certain
circumstances, be required to return amounts previously distributed to such
member. It is the intent of the Members that no distribution to any Owner
pursuant to Article V hereof shall be deemed a return of money or other property
paid or distributed in violation of the Act. The payment of any such money or
distribution of any such property to an Owner shall be deemed to be a compromise
within the meaning of the Act, and the Owner receiving any such money or
property shall not be required to return to any Person any such money or
property. However, if any court of competent jurisdiction holds that,
notwithstanding the provisions of this Agreement, any Owner is obligated to make
any such payment, such obligation shall be the obligation of such Owner and not
of any other Owner.
SECTION 3.3. INITIAL CAPITAL CONTRIBUTIONS. Each Member shall make a
Capital Contribution to the Company in cash or assets or evidence of
indebtedness in the amount set forth opposite such Member's name on Schedule A
hereto. Upon receipt of the Capital Contribution set forth opposite such
Member's name on Schedule A, each Member shall be deemed to own the number of
Units of the Membership Class set forth opposite such Member's name on Schedule
A.
SECTION 3.4. ISSUANCE OF ADDITIONAL INTERESTS; ADDITIONAL MEMBERS.
(a) ADDITIONAL INTERESTS. Subject to Section 10.1, the Class A Members
shall have the right to cause the Company to issue or sell to any Person
(including Owners and Affiliates of Members) any of the following (which for
purposes of this Agreement shall be "Additional Interests"): (i) additional
Membership Interests or other interests in the Company (including new classes or
series thereof having different rights); (ii) obligations, evidences of
indebtedness or other securities or interests convertible into or exchangeable
for Membership Interests or other interests in the Company; and (iii) warrants,
options or other rights to purchase or otherwise acquire Membership Interests or
other interests in the Company. The Class A Members shall determine the terms
and conditions governing the issuance of such Additional Interests, including
the number and designation of such Additional Interests, the preference (with
respect to distributions, in liquidation or otherwise) over any other Membership
Interests or other interests in the Company and any required contributions in
connection therewith.
(b) ADDITIONAL MEMBERS AND INTERESTS. In order for a Person to be
admitted as a Member of the Company with respect to an Additional Interest: (i)
such Person shall have delivered to the Company a written undertaking to be
bound by the terms and conditions of this Agreement and shall have delivered
such documents and instruments as the Class A Members determine to be necessary
or appropriate in connection with the issuance of such Additional Interest to
such Person or to effect such Person's admission as a Member; and (ii) the
Members shall amend Schedule A without the further vote, act or consent of any
other Person to reflect such new Person as a Member. Upon the amendment of
Schedule A, such Person shall be deemed to have been admitted as a Member and
shall be listed as such on the books and records of the Company and thereupon
shall be issued his or its Membership Interest, including any Economic Interest
that corresponds to and is part of such Membership Interest. If an Additional
Interest is issued to an existing Member, the Members shall amend Schedule A
without the
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further vote, act or consent of any other Person to reflect the issuance of such
Additional Interest and, upon the amendment of such Schedule A, such Member
shall be issued his or its Additional Interest, including any Economic Interest
that corresponds to and is part of such Additional Interest.
SECTION 3.5. CERTIFICATION OF PERCENTAGE INTERESTS. The Company may in
its discretion issue certificates to the Owners representing the Percentage
Interest held by each Owner, and such certificates may distinguish between Class
A Membership Interests, Class B Membership Interests and Assignee Interests.
ARTICLE IV
CAPITAL ACCOUNTS
SECTION 4.1. ESTABLISHMENT AND DETERMINATION OF CAPITAL ACCOUNTS. A
capital account ("CAPITAL ACCOUNT") shall be established for each Owner on the
books of the Company initially reflecting an amount equal to such Owner's
initial Capital Contribution pursuant to Section 3.03. Each Owner's Capital
Account shall be (a) increased by any additional Capital Contributions made by
such Owner pursuant to the terms of this Agreement and such Owner's share of
items of income and gain allocated to such Owner pursuant to Article V, (b)
decreased by such Owner's share of items of loss, deduction and expense
allocated to such Owner pursuant to Article V and any distributions to such
Owner of cash or the fair market value of any other property (net of liabilities
assumed by such Owner and liabilities to which such property is subject)
distributed to such Owner and (c) adjusted as otherwise required by the Code and
the regulations thereunder, including but not limited to, the rules of Treasury
Regulation Section 1.704-1(b)(2)(iv); PROVIDED that, in the case of any
adjustment permitted by Treasury Regulation Section 1.704-1(b)(2)(iv)(f), such
adjustment may be made at the discretion of the Managing Member (or, if none,
the Class A Members). Any references in this Agreement to the Capital Account of
an Owner shall be deemed to refer to such Capital Account as the same may be
increased or decreased from time to time as set forth above.
SECTION 4.2. COMPUTATION OF AMOUNTS. For purposes of computing the
amount of any item of Company income, gain, loss, or deduction to be allocated
pursuant to this Article IV and to be reflected in the Capital Accounts, the
determination, recognition and classification of any such item shall be the same
as its determination, recognition and classification for federal income tax
purposes (including any method of depreciation, cost recovery or amortization
used for this purpose), PROVIDED that:
(a) The computation of all items of income, gain, loss and
deduction shall include tax-exempt income and those items described in
Treasury Regulation Section 1.704-1(b)(2)(iv)(i), without regard to the
fact that such items are not includable in gross income or are not
deductible for federal income tax purposes.
(b) If the Book Value of any Company property is adjusted
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or (f),
the amount of such adjustment shall be taken into account as gain or
loss from the disposition of such property.
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(c) Items of income, gain, loss or deduction attributable to
the disposition of Company property having a Book Value that differs
from its adjusted basis for tax purposes shall be computed by reference
to the Book Value of such property.
(d) Items of depreciation, amortization and other cost
recovery deductions with respect to Company property having a Book
Value that differs from its adjusted basis for tax purposes shall be
computed by reference to the property's Book Value in accordance with
Treasury Regulation Section 1.704-1(b)(2)(iv)(g).
(e) To the extent an adjustment to the adjusted tax basis of
any Company asset pursuant to Code Sections 732(d), 734(b) or 743(b) is
required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m),
to be taken into account in determining Capital Accounts, the amount of
such adjustment to the Capital Accounts shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis).
SECTION 4.3. NEGATIVE CAPITAL ACCOUNTS. No Owner shall be required to
pay to the Company or any other Owner any deficit or negative balance which may
exist from time to time in such Owner's Capital Account.
SECTION 4.4. COMPANY CAPITAL. No Owner shall be paid interest on any
Capital Contribution to the Company or on such Owner's Capital Account, and no
Owner shall have any right (a) to demand the return of such Owner's Capital
Contribution or any other distribution from the Company (whether upon
resignation, withdrawal or otherwise), except upon dissolution of the Company
pursuant to Article XI hereof or (b) to cause a partition of the Company's
assets.
ARTICLE V
DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES
SECTION 5.1. GENERALLY. Subject to the provisions of Section 18-607 of
the Act, the Class A Members shall determine the amounts and timing of
distributions to Owners, in each case subject to the retention and establishment
of reserves of, or payment to third parties of, such funds as they deem
necessary with respect to the reasonable business needs of the Company which
shall include the payment or the making of provision for the payment when due of
the Company's obligations, including the payment of any management or
administrative fees and expenses or any other obligations.
SECTION 5.2. DISTRIBUTIONS. Distributions to be made at any time shall
be made to each Owner according to its Percentage Interest; PROVIDED, HOWEVER,
that distributions other than in proportion to an Owner's Percentage Interest
may be made by the approval of the Class A Members.
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SECTION 5.3. ALLOCATION OF PROFITS AND LOSSES. (a) Subject to Section
5.4, Profits and Losses for any fiscal period shall be allocated to the Owners'
Capital Accounts in proportion to their Percentage Interests.
(b) For purposes of allocating Profits and Losses pursuant to this
Article V for any fiscal period, each Owner's Percentage Interest for such
fiscal period shall be determined based on the Capital Accounts of the Owners at
the beginning of such fiscal period, PROVIDED that, if there is a change in any
Owner's interest in the Company (within the meaning of Section 706(d) of the
Code) during any fiscal period, the Owners' Percentage Interests for such fiscal
year shall be determined by the Managing Member (or, if none, by the Class A
Members), taking into account the Capital Accounts of the Owners at the
beginning of such fiscal period and immediately following such change, using any
reasonable method that is permitted under Section 706 of the Code.
SECTION 5.4. REGULATORY AND SPECIAL ALLOCATIONS. Notwithstanding the
provisions of Section 5.3:
(a) If there is a net decrease in Company Minimum Gain during
any Taxable Year, each Owner shall be specially allocated items of
taxable income or gain for such Taxable Year (and, if necessary,
subsequent Taxable Years) in an amount equal to such Owner's share of
the net decrease in Company Minimum Gain, determined in accordance with
Treasury Regulation Section 1.704-2(g). The items to be so allocated
shall be determined in accordance with Treasury Regulation Sections
1.704-2(f)(6) and 1.704-2(j)(2). This paragraph is intended to comply
with the minimum gain chargeback requirement in Treasury Regulation
Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Owner Nonrecourse Deductions shall be allocated in the
manner required by Treasury Regulation Section 1.704-2(i). Except as
otherwise provided in Treasury Regulation Section 1.704-2(i)(4), if
there is a net decrease in Member Minimum Gain during any Taxable Year,
each Owner that has a share of such Member Minimum Gain shall be
specially allocated items of taxable income or gain for such Taxable
Year (and, if necessary, subsequent Taxable Years) in an amount equal
to that Owner's share of the net decrease in Member Minimum Gain. Items
to be allocated pursuant to this paragraph shall be determined in
accordance with Treasury Regulation Sections 1.704-2(i)(4) and
1.704-2(j)(2). This paragraph is intended to comply with the minimum
gain chargeback requirements in Treasury Regulation Section
1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) If any Owner unexpectedly receives any adjustments,
allocations or distributions described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of taxable income and gain
shall be specially allocated to such Owner in an amount and manner
sufficient to eliminate the adjusted capital account deficit
(determined according to Treasury Regulation Section
1.704-1(b)(2)(ii)(d)) created by such adjustments, allocations or
distributions as quickly as possible. This paragraph is intended to
comply with the qualified income offset.
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(d) requirement in Treasury Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
(e) The allocations set forth in paragraphs (a), (b) and (c)
above (the "REGULATORY ALLOCATIONS") are intended to comply with
certain requirements of the Treasury Regulations under Code Section
704. Notwithstanding any other provisions of this Article V (other than
the Regulatory Allocations), the Regulatory Allocations shall be taken
into account in allocating Profits and Losses among Owners so that, to
the extent possible, the net amount of such allocations of Profits and
Losses and other items and the Regulatory Allocations (including
Regulatory Allocations that, although not yet made, are expected to be
made in the future) to each Owner shall be equal to the net amount that
would have been allocated to such Owner if the Regulatory Allocations
had not occurred.
SECTION 5.5. TAX ALLOCATIONS: CODE SECTION 704(c). (a) The income,
gains, losses, deductions and expenses of the Company shall be allocated, for
federal, state and local income tax purposes, among the Owners in accordance
with the allocation of such income, gains, losses, deductions and expenses among
the Owners for computing their Capital Accounts, except that if any such
allocation is not permitted by the Code or other applicable law, the Company's
subsequent income, gains, losses, deductions and expenses shall be allocated
among the Owners for tax purposes to the extent permitted by the Code and other
applicable law, so as to reflect as nearly as possible the allocation set forth
herein in computing their Capital Accounts.
(b) In accordance with Code Section 704(c) and the Treasury Regulations
thereunder, income, gain, loss, deduction and expense with respect to any
property contributed to the capital of the Company shall, solely for tax
purposes, be allocated among the Owners so as to take account of any variation
between the adjusted basis of such property to the Company for federal income
tax purposes and its fair market value at the time of contribution under any
allocation method permitted under Treasury Regulation Section 1.704-3, as
determined by the Managing Member (or, if none, by the Class A Members).
(c) If the Book Value of any Company asset is adjusted pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(f) as provided in the definition
of Book Value, subsequent allocations of items of taxable income, gain, loss,
deduction and expense with respect to such asset shall take account of any
variation between the adjusted basis of such asset for federal income tax
purposes and its Book Value in the same manner as under Code Section 704(c).
(d) Allocations of tax credit, tax credit recapture, and any items
related thereto shall be allocated to the Owners according to their interests in
such items as determined by the Managing Member (or, if none, by the Class A
Members) taking into account the principles of Treasury Regulation Section
1.704-1(b)(4)(ii).
(e) Any elections or other decisions relating to such allocations shall
be made by the Managing Member (or, if none, by the Class A Members) in any
manner that reasonably reflects the purpose and intent of this Agreement.
Allocations pursuant to this Section 5.5 are solely for purposes of federal,
state and local taxes and shall not affect, or in any way be taken into account
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in computing, any Owner's Capital Account or share of Profits, Losses, other
items or distributions pursuant to any provisions of this Agreement.
ARTICLE VI
MANAGEMENT
SECTION 6.1. MANAGEMENT BY MEMBERS. The management of the Company is
fully vested in the Class A Members, acting exclusively in their membership
capacities, and such Members shall have the power and authority to do all such
acts described in Section 2.5 in a manner consistent with the Class A Members'
fiduciary duty to all Members. For purposes of the preceding sentence, the Class
A Members' fiduciary duty to all Members shall be determined under Delaware law
as the fiduciary duty of voting Members to fellow Members including nonvoting
Members or, if and to the extent that Delaware law has not established such a
standard, the fiduciary duty under Delaware law of general partners to fellow
partners including limited partners. To facilitate the orderly and efficient
management of the Company, the Class A Members shall act through the delegation
of certain responsibility and authority to the Managing Member pursuant to
Section 6.3. Except as otherwise provided, any action taken by the Members
hereunder shall require the consent of Members representing a majority of the
Member Percentage Interests, any action taken by the Class A Members hereunder
shall require the consent of Class A Members representing a majority of the
Class A Member Percentage Interests, and any action taken by the Class B Members
hereunder shall require the consent of Class B Members representing a majority
of the Class B Member Percentage Interests.
SECTION 6.2. UNANIMOUS CONSENT. Notwithstanding the delegation of
responsibility and authority to the Managing Member pursuant to Section 6.3, the
following actions shall require the unanimous approval of the Members:
(a) causing or permitting the Company to dispose of or
encumber all or substantially all of its assets;
(b) causing or permitting the Company to be dissolved,
terminated or liquidated under Article XI;
(c) causing or permitting the Company to merge, consolidate or
convert into any other entity; or
(d) causing or permitting the Company to become bankrupt (but
this provision shall not be construed to require any Member to ensure
the profitability or solvency of the Company).
These provisions of Section 6.2 shall apply notwithstanding the negligence,
gross negligence, intentional misconduct, strict liability or other fault or
responsibility of a Member or its representative.
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SECTION 6.3. MANAGING MEMBER. The Class A Members hereby delegate the
authority described in Section 6.3(b) to the Member or Members that are
designated as the "Managing Member" in accordance with this Section. Decisions
or actions taken by the Managing Member in accordance with the provisions of
this Agreement shall constitute decisions or actions by the Company and shall be
binding on each Member, Managing Member, Officer and employee of the Company.
For so long as there is more than one Managing Member, no action, except for the
removal of a Managing Member or day-to-day administrative matters, shall be
taken by the Managing Member except pursuant to the unanimous agreement of the
Managing Members. The Managing Member shall be designated, and shall exercise
such delegated authority, in accordance with the following provisions and the
other provisions of this Agreement:
(a) DESIGNATION AND CESSATION. Initially, there will be no
Managing Member. Any Managing Member that is designated in accordance
with this Section 6.3(a) shall cease to be the Managing Member upon any
of the following events:
(i) the Managing Member disposes of all of his
Membership Interest;
(ii) the Managing Member is removed as provided in
Section 6.3(g); or
(iii) the Managing Member resigns as Managing Member
by giving notice thereof to the other Members (which
resignation shall become effective 90 days after delivery of
such notice, unless an earlier or later date of effectiveness
is agreed to by the other Class A Members).
Upon the occurrence of any of the events described in the
immediately preceding sentence, another Member (that consents to serve
as such) may be designated as a successor Managing Member by the
consent of the Class A Members; PROVIDED, HOWEVER, that unless
otherwise agreed to by all of the Members, a Member who has been
removed as Managing Member as provided in Section 6.3(g) may not
designate himself as a successor Managing Member hereunder.
(b) DUTY AND AUTHORITY. Except as provided in Section 6.2, the
Managing Member is hereby delegated the duty and authority to manage
the Company, including the duty and authority to exercise those powers
described in Section 2.5, all in a manner consistent with the Managing
Member's fiduciary duty to all Members. For purposes of the preceding
sentence, the Managing Member's fiduciary duty to all Members shall be
determined under applicable Delaware law or, if and to the extent that
Delaware law has not established such a standard, the fiduciary duty
under Delaware law of a general partner to limited partners. During any
such time that a Managing Member is delegated the duty and authority to
manage the Company hereunder, no other Member shall exercise his or her
powers to manage the Company, except as provided in Section 6.2.
(c) OFFICERS. The Managing Member may designate one or more
Persons to be Officers of the Company. Any Officers so designated shall
have such titles and, subject to the other provisions of this
Agreement, have such authority and perform such
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duties as the Managing Member may delegate to them and shall serve
under the direction and supervision of, and subject to and replacement
by, the Managing Member.
(d) COMPENSATION TO MANAGING MEMBER. The Managing Member shall
receive such compensation from the Company for serving in such capacity
as shall be approved from time to time by the Class A Members.
(e) LIMITATIONS OF DUTIES, INDEMNIFICATION. The Managing
Member shall be liable to the Company and the other Members for its
gross negligence or intentional misconduct in the management of the
Company; but the Managing Member (or its representative), its
affiliates and their respective directors, officers, employees and
agents (the "MANAGING-MEMBER INDEMNIFIED PARTIES") shall not be liable
to the Company, any third party, any other Member or representative, or
any officer or employee of the Company for any acts or omissions that
do not constitute gross negligence or intentional misconduct, including
the negligence, strict liability or other fault or responsibility
(short of gross negligence or intentional misconduct) of the Managing
Member (the "MANAGING-MEMBER INDEMNIFIED ACTS"); and the Company shall
indemnify, protect, defend, release and hold harmless each
Managing-Member Indemnified Party from and against any claims asserted
by or on behalf of any person that arise out of, relate to or are
otherwise attributable to, directly or indirectly, the Managing-Member
Indemnified Acts.
(f) LIMITATION OF OTHER MEMBERS' AUTHORITY. Each Member, other
than the Managing Member, agrees that it will not exercise its
authority under the Act to bind or commit the Company to agreements,
transactions or other arrangements, or to hold itself out as an agent
of the Company.
(g) REMOVAL. The Managing Member may be removed with or
without cause by the consent of Members representing both (i) fifty
percent (50%) or more of the Class A Member Percentage Interests and
(ii) all of the Class A Membership Interests other than the Managing
Member's Membership Interest. Alternatively, the Managing Member may be
removed for cause by the consent of Members representing either (x) a
majority of the Class A Member Percentage Interests or (y) all of the
Class A Membership Interests other than the Managing Member's
Membership Interest. For purposes of this subsection, "CAUSE" shall
mean that in the execution of his duties as Managing Member, the
Managing Member has committed negligence, gross negligence, or a breach
of one or more fiduciary duties to one or more other Members. The
finding that the removal is for cause by the Members voting for removal
under this subsection shall create a presumption that such cause
exists, PROVIDED that:
(i) said presumption may be overcome by the removed
Managing Member in a legal proceeding or arbitration
proceeding challenging the validity of his removal under this
subsection, and if the Managing Member is successful the
Managing Member shall be entitled to reimbursement from the
Company for the Managing Member's costs of said challenge,
with such costs to be charged against the interests of the
Members who sought removal; and
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(ii) where the Members voting for removal of the
Managing Member under this subsection represent all of the
Class A Membership Interests other than that of the Managing
Member but less than a majority of the Class A Member
Percentage Interests, the Managing Member may elect to reverse
the presumption of cause and remain as Managing Member by
executing a binding legal agreement, secured by the Managing
Member's Membership Interest, agreeing (A) to pay all legal
costs incurred by the other Members in any legal proceeding or
arbitration proceeding in which the other Members successfully
establish cause for removal of the Managing Member, and (B) to
resign upon any final judgment or arbitration ruling that
establishes cause for removal.
SECTION 6.4. MEETING OF MEMBERS. (a) Members shall hold meetings at
such time during normal business hours and place as shall be determined by the
Managing Member (or if none, by the Class A Members). Meetings of Members may be
held at any place either within or without the State of Delaware. If all of the
Members shall meet at any time and place, within or without the State of
Delaware, and consent to the holding of a meeting at such time and place, such
meeting shall be valid without call or notice, and at such meeting lawful action
may be taken. At all meetings of Members, a Member may vote in person or by
proxy executed in writing by the Member in favor of another Member. Such proxy
shall be filed with the Member of the Company before or at the time of the
meeting. No proxy shall be valid after eleven months from the date of its
execution, unless otherwise provided in the proxy.
(b) Action required or permitted to be taken at a meeting of Members
may be taken without a meeting if the action is evidenced by one or more written
consents describing the action taken, signed by each Member entitled to vote and
delivered to one of the Members of the Company for inclusion in the minutes or
for filing with the Company records. Action taken under this Section is
effective when all Members entitled to vote have signed the consent, unless the
consent specifies a different effective date.
SECTION 6.5. LIABILITY FOR CERTAIN ACTS. Each Member shall perform his
duties as Member in good faith, in a manner he reasonably believes to be in the
best interests of the Company, and with such care as an ordinarily prudent
person in a like position would use under similar circumstances. A Member shall
not be liable to the Company or to any Member for any loss or damage sustained
by the Company or any Member, unless the loss or damage shall have been the
result of deceit, gross negligence, intentional misconduct or a wrongful taking
by the Member.
SECTION 6.6. MEMBERS HAVE NO EXCLUSIVE DUTY TO COMPANY. (a) A Member
shall not be required to manage the Company as his sole and exclusive function
and he may have other business interests and engage in activities in addition to
those relating to the Company. Neither the Company nor any Owner shall have any
right, by virtue of this Agreement, to share or participate in such other
investments or activities of the Member or to the income or proceeds derived
therefrom.
(b) A Member's ownership interest in the Company shall not be his sole
and exclusive function and he may have other business interests and engage in
activities in addition to those
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relating to the Company. Neither the Company nor any Owner shall have any right,
by virtue of this Agreement, to share or participate in such other investments
or activities of the Members or to the income or proceeds derived therefrom.
SECTION 6.7. INDEMNITY OF THE MEMBERS, EMPLOYEES AND OTHER AGENTS. The
Company shall, to the maximum extent permitted under Section 15-10 of the Act,
indemnify and make advances for expenses to Members.
ARTICLE VI
EXCULPATION AND INDEMNIFICATION
SECTION 7.1. PERFORMANCE OF DUTIES; NO LIABILITY OF MEMBER AND
OFFICERS. No Member shall have any duty to the Company or any Member of the
Company except as expressly set forth herein or in other written agreements. No
Member of the Company shall be liable to the Company or to any Owner for any
loss or damage sustained by the Company or to any Owner, unless the loss or
damage shall have been the result of gross negligence or intentional misconduct
by the Member. No Member of the Company shall be personally liable under any
judgment of a court, or in any other manner, for any debt, obligation or
liability of the Company, whether that liability or obligation arises in
contract, tort or otherwise, solely by reason of being a Member or Officer of
the Company or any combination of the foregoing.
SECTION 7.2. TRANSACTIONS BETWEEN THE COMPANY AND THE MEMBERS.
Notwithstanding that it may constitute a conflict of interest, the Members or
their Affiliates may engage in any transaction (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service or the establishment of any salary, other compensation or other terms of
employment) with the Company so long as such transaction is approved by the
disinterested Members representing a majority of the Class A Member Percentage
Interests other than the Class A Member Percentage Interests of any
non-disinterested Members.
SECTION 7.3. INSURANCE. The Company may, but is not obligated to,
purchase and maintain insurance, at its expense, to protect itself and any
Member, Officer or agent of the Company who is or was serving at the request of
the Company as a manager, director, officer, partner, venturer, proprietor,
trustee, employee, agent or similar functionary of a foreign or domestic limited
liability company, corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise against any expense, liability
or loss, whether or not the Company would have the power to indemnify such
Person against such expense, liability or loss under this Article VII.
ARTICLE VIII
TAXES
SECTION 8.1. TAX RETURNS. The Company shall cause to be prepared and
filed all necessary federal and state income tax returns for the Company, and
shall make any elections the
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Managing Member (or if none, the Class A Members) may deem appropriate and in
the best interests of the Members. Each Owner shall furnish to the Company all
pertinent information in its possession relating to Company operations that is
necessary to enable the Company's income tax returns to be prepared and filed.
SECTION 8.2. TAX MATTERS MEMBER. The Managing Member (or if none, a
Member elected by the Class A Members) shall be the "tax matters partner" of the
Company pursuant to Section 6231(a)(7) of the Code (the "TAX MATTERS MEMBER").
If there is more than one Managing Member, then the Managing Member with the
greater Percentage Interest shall be the Tax Matters Member. The Tax Matters
Member shall take such action as may be necessary to cause each Member to become
a "notice partner" within the meaning of Section 6223 of the Code. The Tax
Matters Member is authorized to represent the Company before the Internal
Revenue Service and any other governmental agency with jurisdiction, and to sign
such consents and to enter into settlements and other agreements with such
agencies as the Tax Matters Member deems necessary or advisable. The Tax Matters
Member shall also have the power to elect to have the "partnership audit rules"
apply to the Company pursuant to Section 6231 of the Code if determined to be in
the best interest of the Members.
ARTICLE IX
BOOKS, REPORTS AND COMPANY FUNDS
SECTION 9.1. MAINTENANCE OF BOOKS. The Company shall keep appropriate
books and records of accounts in accordance with U.S. generally accepted
accounting principles and shall keep minutes of the proceedings of its Members
and each committee. All decisions as to accounting matters, except as
specifically provided to the contrary herein, shall be made by the Managing
Member (or, if none, by the Class A Members). The Fiscal Year shall be the
accounting year of the Company for financial reporting purposes.
SECTION 9.2. OWNER TAX INFORMATION. Within ninety (90) days after the
end of each Taxable Year, the Company will cause to be delivered to each Person
who was an Owner at any time during such Taxable Year a Form K-1 and such other
information, if any, with respect to the Company as may be necessary for the
preparation of such Owner's federal, state and local income tax returns,
including a statement showing such Owner's share of income, gain or loss,
expense and credits for such Taxable Year for federal income tax purposes. Any
deficiency for taxes imposed on any Owner (including penalties, additions to tax
or interest imposed with respect to such taxes) shall be paid by such Owner, and
if paid by the Company, shall be recoverable from such Owner pursuant to Section
12.10.
SECTION 9.3. COMPANY FUNDS. The Company may not commingle the Company's
funds with the funds of any Owner or the funds of any Affiliate of any Owner.
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ARTICLE X
TRANSFERS AND OTHER EVENTS
SECTION 10.1. TRANSFER IN GENERAL. No Member or Assignee may Transfer
any part or all of such Person's Membership Interest, except as provided in this
Article X. Any purported Transfer of a Membership Interest not in conformance
with this Article X shall be null and void and of no effect.
SECTION 10.2. TRANSFER TO A PERMITTED TRANSFEREE. Any Member or
Assignee may Transfer any part or all of his Membership Interest to a Permitted
Transferee upon such terms and conditions as the transferring party may decide.
In the case of a Transfer of a Class B Membership Interest, such Permitted
Transferee will become an Assignee (but will not become a Substituted Member
unless he complies with the procedures specified in Section 10.7). In the case
of a Transfer of a Class A Membership Interest, such Permitted Transferee will
become a Class A Member; PROVIDED, HOWEVER, that if a lapse of the transferor's
voting right with respect to the Transferred Class A Membership Interest would
not be treated as a transfer by the transferor by gift under Code Section
2704(a), then such Permitted Transferee will become an Assignee (but will not
become a Substituted Member unless he complies with the procedures specified in
Section 10.7).
SECTION 10.3. TRANSFER TO OTHER THAN A PERMITTED TRANSFEREE. Any Member
or Assignee may Transfer any part or all of his Membership Interest to a party
other than a Permitted Transferee by complying with either (a) or (b) below. In
the case of such a Transfer of a Class B Membership Interest, the transferee
will become an Assignee (but will not become a Substituted Member unless he
complies with the procedures specified in Section 10.7). In the case of such a
Transfer of a Class A Membership Interest, the transferee will become a Class A
Member; PROVIDED, HOWEVER, that if a lapse of the transferor's voting right with
respect to the Transferred Class A Membership Interest would not be treated as a
transfer by the transferor by gift under Code Section 2704(a), then the
transferee will become an Assignee (but will not become a Substituted Member
unless he complies with the procedures specified in Section 10.7). Although
certain trusts may qualify as a Permitted Transferee, whenever (i) the interests
in such a trust terminate or change so that the trust no longer meets the
definition of a Permitted Transferee or (ii) an interest would be distributed
from a trust that is a Permitted Transferee to an individual or entity that is
not then a Permitted Transferee, such action shall be deemed to be a Transfer to
other than a Permitted Transferee and shall be subject to the provisions of this
Section 10.3, PROVIDED that for purposes of subsection 10.3(b), any such deemed
Transfer shall be deemed to be made for consideration equal to the Fair Value of
the interest in question.
(a) Any Member or Assignee may Transfer any part or all of his
Membership Interest to a Person other than a Permitted Transferee, upon
such terms and conditions as the Transferring party may decide, with
the advance written consent of all of the Members, which consent shall
not be unreasonably withheld. Such advance written consent shall be
effective for a period of six (6) months.
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(b) Alternatively, a Membership Interest may be Transferred to
a Person other than a Permitted Transferee by compliance with the
following provisions:
(i) Any Member or Assignee who wishes to Transfer any
of his Membership Interest to a Person other than a Permitted
Transferee as a result of a bona fide offer not solicited by
such Member or Assignee, or who has reason to believe that an
involuntary Transfer or a Transfer by operation of law or a
testamentary Transfer (by will or otherwise) to a Person other
than a Permitted Transferee is reasonably foreseeable, shall
first give each Member written notice of his intent to
Transfer such Membership Interest or of his knowledge that
such involuntary Transfer or Transfer by operation of law or
testamentary Transfer (by will or otherwise) is reasonably
foreseeable. Such notice of intent must contain a description
of what portion of his total Membership Interest would be so
Transferred; the consideration that would be paid, if any; the
terms of Transfer and of any payment of consideration
(including, but not limited to, the relative percentages of
cash and debt, and the duration, interest rate, and payment
schedule of any debt instruments); the name, address (both
home and office), and business or occupation of the Person to
whom such Membership Interest would be transferred; and any
other facts that are or would reasonably be deemed material to
the proposed Transfer.
(ii) Upon the receipt of such notice, each Member
shall have a right to purchase part or all of the offered
Membership Interest up to but not exceeding the fraction of
the offered Membership Interest represented by such Member's
First Refusal Percentage. Each Member may exercise this right
of first refusal to purchase his First Refusal Percentage by
giving the Managing Member (or if none, the Class A Members)
and the Transferring Member or Assignee written notice within
thirty (30) days after receipt of the latter's notice.
(iii) The Company shall have the right to purchase
the offered or remaining Membership Interest in the event none
of the Members exercises his right of first refusal or any
Member exercises less than his right to purchase his First
Refusal Percentage of the offered Membership Interest. The
Company may exercise its right to purchase the offered or
remaining Membership Interest by giving written notice to each
Member within thirty (30) days after receipt of the
Transferring Member's or Assignee's notice.
(iv) If none of the Members or the Company so agree
to buy the entire offered Membership Interest, the
Transferring Member or Assignee may complete the intended
Transfer. If such Transfer is not completed within thirty (30)
days after expiration of the thirty (30) day period referred
to in (ii) and (iii) above, any attempted Transfer will be
deemed to be made pursuant to a new transaction and this
Article X shall again apply.
(v) If one or more of the Members or the Company does
so agree to buy the entire offered Membership Interest, the
purchase price to be paid, and
-22-
terms to be offered, by the Company and each Member who elects
to buy part of the offered Membership Interest shall be such
proportionate share of the following two components:
(I) The same consideration, both as to price
and terms, as contained in the written notice of
intent to Transfer.
(II) The excess, if any, of the Fair Value
of the offered Membership Interest over the Fair
Market Value of the Consideration to be received. At
the buyer's option, this component shall be paid
either (1) in cash at closing or (2) one-quarter (_)
in cash at closing, and the balance under a
promissory note payable in twenty (20) equal
quarterly principal payments beginning three months
after the date of such closing, with interest added
to each installment computed on the outstanding
principal balance at the "applicable Federal rate"
(as determined pursuant to Code Section 1274). The
buyer shall give the selling Member or Assignee a
promissory note as evidence of this debt, to be
secured by the purchased Membership Interest. Any
part or all of the remaining balance of the
obligation under the note may be prepaid at any time
without penalty or premium.
(vi) The purchase of a Membership Interest pursuant
to Section 10.3(b)(v) will take place at a closing to be held
not later than the tenth (10th) day after the date on which
the appraisals of the Fair Value of the offered Membership
Interest and the Fair Market Value of the Consideration, if
any, are completed. The closing shall be held during normal
business hours at such location as the parties select. Upon
closing, the Company shall adjust its books to reflect the
Transfer of the Membership Interest.
SECTION 10.4. TRANSFEREE'S RIGHTS AND OBLIGATIONS. (a) With respect to
any Transfer of a Membership Interest, Profits, Losses and other items or
distributions shall be allocated between the transferor and the transferee
according to Code Section 706. Distributions made before the effective date of
such Transfer shall be paid to the transferor, and distributions made after such
date shall be paid to the transferee.
(b) Subject to subsection (c) of this Section, a Transfer of a Class A
Membership Interest shall constitute the transferee as a Class A Member entitled
to all the rights of a Class A Member with respect to such assigned interest,
and acceptance of such Class A Membership Interest shall constitute an agreement
by the transferee to be bound by the provisions of this Agreement.
(c) A Transfer of a Class B Membership Interest, and a Transfer of a
Class A Membership Interest in which a lapse of the transferor's voting right
with respect to the Transferred Class A Membership Interest would not be treated
as a transfer by the transferor by gift under Code Section 2704(a), shall
constitute the transferee as an Assignee as to such Transferred Membership
Interest. Accordingly, if such transferee is also a Member, then (i) the
-23-
provisions of this Agreement applicable to Members shall be applied separately
to such Person with respect to his Membership Interests held as a Member, and
(ii) similarly, the provisions of this Agreement applicable to Assignees shall
be applied separately to such Person with respect to his Membership Interests
held as an Assignee, in each case as if such Person did not own a Membership
Interest in the other capacity.
(d) As a condition of any Person having any rights of an Assignee, any
such Person shall be required to execute a counterpart of this Agreement and any
other document reasonably requested by the Managing Member (or if none, the
Class A Members).
(e) Any valid Transfer of a Class B Membership Interest, or of a Class
A Membership Interest in which a lapse of the transferor's voting right with
respect to the Transferred Class A Membership Interest would not be treated as a
transfer by the transferor by gift under Code Section 2704(a), shall effect only
a Transfer of the transferring Member's Economic Interest. Unless and until an
Assignee becomes a Member with respect to a Membership Interest held as an
Assignee by complying with the provisions of Section 10.7, the assignor shall
not be relieved of its obligations hereunder and the Assignee shall not be
entitled to any of the rights granted to a Member under this Agreement or under
applicable law with respect to such Membership Interest. Instead, such Assignee
shall have only such rights as are expressly granted to an Assignee hereunder.
Further, such Assignee shall be bound by all limitations and obligations
contained herein with respect to Assignees.
SECTION 10.5. COMPLETE TRANSFER OF MEMBERSHIP INTEREST RESULTS IN
TERMINATION OF STATUS. A Member ceases to be a Member hereunder upon assignment
or other Transfer of all of the Member's Membership Interest.
SECTION 10.6. VOID ASSIGNMENT. Any Transfer by any Member in
contravention of this Agreement shall be void and ineffectual and shall not bind
or be recognized by the Company or any other party. In the event of any Transfer
in contravention of this Agreement, the purported transferee shall have no right
to any Profits, Losses or distributions of the Company or any other rights of a
Member.
SECTION 10.7. SUBSTITUTED MEMBER. (a) An Assignee of any Units or other
interests in the Company (or any portion thereof), in accordance with the
provisions of this Article, shall become a substituted Member entitled to all
the rights of a Member with respect to such assigned interest if and only if (i)
the assignor gives the Assignee such right (which shall be presumed in the case
of any voluntary Transfer unless the instrument of assignment expressly
precludes such right), (ii) such admission is consented to in writing by all of
the Class A Members, and (iii) the Assignee has agreed in writing to be bound by
the provisions of this Agreement.
(b) The Company shall be entitled to treat the record owner of any
Units or other interest in the Company as the absolute owner thereof and shall
incur no liability for distributions of cash or other property made in good
faith to such owner until such time as a written assignment of such Units or
other interest in the Company is permitted pursuant to the terms and conditions
of Sections 10.2 and 10.3 and this Section 10.7, has been received and accepted
by the non-transferring Members and has been recorded on the books of the
Company.
-24-
(c) Upon the admission of a substituted Member, Schedule A attached
hereto shall be amended to reflect the name, address, Membership Class and Units
and other interests in the Company of such substituted Member and to eliminate
the name and address of and other information relating to the assigning Member
with regard to the assigned Units and other interests in the Company.
SECTION 10.8. EFFECT OF ASSIGNMENT. Following an assignment of an
interest that is permitted under this Article X, the transferee of such interest
shall be treated as having made all of the Capital Contributions in respect of,
and received all of the distributions received in respect of, such interest,
shall succeed to the Capital Account associated with such interest, and shall
receive allocations and distributions under Articles V and XI in respect of such
interest as if such transferee were a Member.
SECTION 10.9. TRANSFER FEES AND EXPENSES. The transferor and transferee
of any Economic Interest shall be jointly and severally obligated to reimburse
the Company for all reasonable expenses (including attorneys' fees and expenses)
of any Transfer or proposed Transfer of such interest, whether or not
consummated.
SECTION 10.10. OTHER LIMITATIONS. In order to permit the Company to
qualify for the benefit of a "safe harbor" under Code Section 7704,
notwithstanding anything to the contrary in this Agreement, no Transfer shall be
permitted or recognized (within the meaning of Treasury Regulation Section
1.7704-1(d)) by the Company or the Members if and to the extent that such
Transfer would cause the Company to have more than 100 partners (within the
meaning of Treasury Regulation Section 1.7704-1(h), including the look-through
rule in Treasury Regulation Section 1.7704-1(h)(3)).
SECTION 10.11. EFFECTIVE DATE. Any Transfer and any related admission
of a Person as a Member in compliance with this Article X shall be deemed
effective on such date that the transferee or successor in interest complies
with the requirements of this Agreement.
SECTION 10.12. EFFECT OF DEATH OR INCAPACITY. Except as otherwise
provided herein, the death or Incapacity of a Member shall not dissolve or
terminate the Company. In the event of such death or Incapacity of a Class B
Member, the executor, administrator, guardian, trustee, or other personal
representative of the Incapacitated Member shall be deemed to be the Assignee of
such Member's Economic Interest and may, subject to the terms and conditions set
forth in Section 10.7, become a substituted Member. In the event of such death
or Incapacity of a Class A Member, the executor, administrator, guardian,
trustee, or other personal representative of the Incapacitated Member shall be
deemed to be a Class A Member.
SECTION 10.13 TRANSFERS BY SOLE MEMBER. Consent of the non-transferring
Members shall not be required for any purpose under this Article in the event of
a Transfer by the sole Member of the Company.
SECTION 10.14. REPRESENTATIONS OF NEW MEMBERS. Each Member represents
and warrants that (a) the Member's interest in the Company is intended to be and
is being acquired solely for the Member's own account for the purpose of
investment and not with a view to any sale or other
-25-
disposition of all or any part thereof, (b) the Member is aware that interests
in the Company have not been registered under the Securities Act, that such
interests cannot be sold or otherwise disposed of unless they are registered
thereunder or unless an exemption from such registration is available, that the
Company has no present intention of so registering such interests under the
Securities Act, and that accordingly such Member is able and is prepared to bear
the economic risk of making a Capital Contribution and to suffer a complete loss
of investment, and (c) the Member's knowledge and experience in financial and
business matters are such that the Member is capable of evaluating the risks of
making a Capital Contribution. The foregoing representations and warranties may
be relied upon by the Company and by the other Members in connection with each
Member's investment in the Company.
ARTICLE XI
DISSOLUTION, LIQUIDATION AND TERMINATION
SECTION 11.1. DISSOLUTION. The Company shall be dissolved and its
affairs shall be wound up on the first to occur of the following:
(a) the expiration of its term pursuant to Section 2.7;
(b) the unanimous vote of the Members; or
(c) the entry of a decree of judicial dissolution of the
Company under Section 18-802 of the Act.
The death or Incapacity of a Member, or the occurrence of any other event that
terminates the continued membership of a Member in the Company, shall not cause
a dissolution of the Company, and the Company shall continue in existence
subject to the terms and conditions of this Agreement.
SECTION 11.2. LIQUIDATION AND TERMINATION. On dissolution of the
Company, the Managing Member or such other or additional Class A Member or
Members shall act as liquidators. The liquidators shall proceed diligently to
wind up the affairs of the Company and make final distributions as provided
herein and in the Act. The costs of liquidation shall be borne as a Company
expense. Until final distribution, the liquidators shall continue to operate the
Company properties with all of the power and authority of the Managing Member.
The steps to be accomplished by the liquidators are as follows:
(a) As promptly as possible after dissolution and again after
final liquidation, the liquidators shall cause a proper accounting to
be made by a recognized firm of certified public accountants of the
Company's assets, liabilities and operations through the last day of
the calendar month in which the dissolution occurs or the final
liquidation is completed, as applicable.
-26-
(b) The liquidators shall pay, satisfy or discharge from
Company funds all of the debts, liabilities and obligations of the
Company (including, without limitation, all expenses incurred in
liquidation) or otherwise make adequate provision for payment and
discharge thereof (including, without limitation, the establishment of
a cash fund for contingent liabilities in such amount and for such term
as the liquidator may reasonably determine).
(c) All remaining assets of the Company shall be distributed
to the Owners in accordance with their positive Capital Account
balances (adjusted for all distributions and allocations pursuant to
Article V for all periods ending on or before the date of the
distribution).
(d) The liquidators shall cause only cash, evidences of
indebtedness and other securities to be distributed in any liquidation.
The distribution of cash and/or property to an Owner in accordance with
the provisions of this Section 11.2 constitutes a complete return to
the Owner of its Capital Contributions and a complete distribution to
the Owner of its interest in the Company and all the Company's property
and constitutes a compromise to which all Owners have consented within
the meaning of the Act. To the extent that an Owner returns funds to
the Company, it has no claim against any other Owner for those funds.
SECTION 11.3. CANCELLATION OF CERTIFICATE. On completion of the
distribution of Company assets as provided herein, the Company is terminated,
and shall file a certificate of cancellation with the Secretary of State of the
State of Delaware, cancel any other filings made pursuant to Section 2.1 and
take such other actions as may be necessary to terminate the Company.
ARTICLE XII
GENERAL/MISCELLANEOUS PROVISIONS
SECTION 12.1. OFFSET. Whenever the Company is to pay any sum to any
Owner, any amounts that Owner owes to the Company may be deducted from that sum
before payment; provided that the full amount that would otherwise be
distributed shall be debited from the Owner's Capital Account pursuant to
Section 4.1.
SECTION 12.2. NOTICES. Except as expressly set forth to the contrary in
this Agreement, all notices, requests or consents provided for or permitted to
be given under this Agreement must be in writing and must be given either by
depositing that writing in the United States mail, addressed to the recipient,
postage paid, and registered or certified with return receipt requested or by
delivering that writing to the recipient in person, by courier, or by facsimile
transmission; and a notice, request, or consent given under this Agreement is
effective on receipt by the Person who receives it. All notices, requests and
consents to be sent to an Owner must be sent to or made at the address (or
facsimile number) given for that Owner on Schedule A, or such other address (or
facsimile number) as that Owner may specify by notice to the Members. Any
notice, request or consent to the Company must be given to the Managing Member
(or if none, to the Class A Members). Whenever any notice is required to be
given by law or this Agreement, a
-27-
written waiver thereof, signed by the Person entitled to notice, whether before
or after the time stated therein, shall be deemed equivalent to the giving of
such notice.
SECTION 12.3. ENTIRE AGREEMENT. This Agreement and other written
agreements among the Members of even date herewith constitute the entire
agreement among the Members relating to the Company and supersedes all prior
contracts or agreements with respect to the Company, whether oral or written.
SECTION 12.4. EFFECT OF WAIVER OR CONSENT. A waiver or consent, express
or implied, to or of any breach or default by any Person in the performance by
that Person of its obligations hereunder or with respect to the Company is not a
consent or waiver to or of any other breach or default in the performance by
that Person of the same or any other obligations of that Person hereunder or
with respect to the Company. Failure on the part of a Person to complain of any
act of any Person or to declare any Person in default hereunder or with respect
to the Company, irrespective of how long that failure continues, does not
constitute a waiver by that Person of its rights with respect to that default
until the applicable statute-of-limitations period has run.
SECTION 12.5. AMENDMENT OR MODIFICATION. This Agreement and any
provision hereof may be amended or modified from time to time only by a written
instrument adopted by the unanimous vote of all Class A Members.
SECTION 12.6. BINDING EFFECT. Subject to the restrictions on Transfers
set forth in this Agreement, this Agreement is binding on and shall inure to the
benefit of the Members and their respective heirs, legal representatives,
successors and permitted assigns.
SECTION 12.7. GOVERNING LAW; SEVERABILITY. THIS AGREEMENT IS GOVERNED
BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE
EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE
OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. In the
event of a direct conflict between the provisions of this Agreement and any
provision of the Certificate or any mandatory provision of the Act, the
applicable provision of the Certificate or the Act shall control. If any
provision of this Agreement or the application thereof to any Person or
circumstance is held invalid or unenforceable to any extent, the remainder of
this Agreement and the application of that provision to other Persons or
circumstances is not affected thereby and that provision shall be enforced to
the greatest extent permitted by law.
SECTION 12.8. FURTHER ASSURANCES. In connection with this Agreement and
the transactions contemplated hereby, each Member shall execute and deliver any
additional documents and instruments and perform any additional acts that may be
necessary or appropriate to effectuate and perform the provisions of this
Agreement and those transactions.
SECTION 12.9. WAIVER OF CERTAIN RIGHTS. Each Member irrevocably waives
any right it may have to demand any distributions or withdrawal of property from
the Company or to maintain any action for dissolution (except pursuant to
Section 18-802 of the Act) of the Company or for partition of the property of
the Company.
-28-
SECTION 12.10. INDEMNIFICATION AND REIMBURSEMENT FOR PAYMENTS ON BEHALF
OF AN OWNER. If the Company is obligated to pay any amount to a governmental
agency (or otherwise makes a payment) because of a Member's status or otherwise
specifically attributable to a Member (including, without limitation, federal,
state or local withholding taxes imposed with respect to any issuance of Units
or other interests to a Member or any payments to a Member, federal withholding
taxes with respect to foreign Persons, state personal property taxes, state
unincorporated business taxes, ETC.), then such Member (the "INDEMNIFYING
MEMBER") shall indemnify the Company in full for the entire amount paid
(including, without limitation, any interest, penalties and expenses associated
with such payments). The amount to be indemnified shall be charged against the
Capital Account of the Indemnifying Member, and, at the option of the Managing
Member (or if none, the Members), either:
(a) promptly upon notification of an obligation to indemnify
the Company, the Indemnifying Member shall make a cash payment to the
Company equal to the full amount to be indemnified (and the amount paid
shall be added to the Indemnifying Member's Capital Account but shall
not be treated as a Capital Contribution), or
(b) the Company shall reduce distributions that would
otherwise be made to the Indemnifying Member, until the Company has
recovered the amount to be indemnified (provided that the amount of
such reduction shall be deemed to have been distributed for all
purposes of this Agreement, but such deemed distribution shall not
further reduce the Indemnifying Member's Capital Account).
An Indemnifying Member's obligation to make contributions to the Company under
this Section 12.10 shall survive the termination, dissolution, liquidation and
winding up of the Company and, for purposes of this Section 12.10, the Company
shall be treated as continuing in existence. The Company may pursue and enforce
all rights and remedies it may have against each Indemnifying Owner under this
Section 12.10, including instituting a lawsuit to collect such contribution with
interest calculated at Prime Rate plus five percentage points per annum (but not
in excess of the highest rate per annum permitted by law).
SECTION 12.11. NOTICE TO MEMBERS OF PROVISIONS. By executing this
Agreement, each Member acknowledges that it has actual notice of (a) all of the
provisions hereof (including, without limitation, the restrictions on the
Transfer set forth in Article X) and (b) all of the provisions of the
Certificate.
SECTION 12.12. COUNTERPARTS. This Agreement may be executed in multiple
counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same
instrument.
SECTION 12.13. CONSENT TO JURISDICTION. Each Member irrevocably submits
to the non-exclusive jurisdiction of the state courts of the State of Delaware
for the purposes of any suit, action or other proceeding arising out of this
Agreement or any transaction contemplated hereby. Each Member further agrees
that service of any process, summons, notice or document by U.S. certified or
registered mail to such Member's respective address set forth above shall be
effective service of process in any action, suit or proceeding in Delaware with
respect to any matters to
-29-
which it has submitted to jurisdiction as set forth above in the immediately
preceding sentence. Each Member irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby in the state courts of
the State of Delaware and hereby irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in such court has been brought in an inconvenient forum.
SECTION 12.14. HEADINGS. The headings used in this Agreement are for
the purpose of reference only and will not otherwise affect the meaning or
interpretation of any provision of this Agreement.
SECTION 12.15. REMEDIES. The Company and the Members shall be entitled
to enforce their rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement (including costs of
enforcement) and to exercise any and all other rights existing in their favor.
The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that the
Company or any Member may in its or his sole discretion apply to any court of
law or equity of competent jurisdiction for specific performance or injunctive
relief (without posting a bond or other security) in order to enforce or prevent
any violation or threatened violation of the provisions of this Agreement.
* * *
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IN WITNESS WHEREOF, the Members have executed this Agreement as of the
date first set forth above.
By its Members:
XXXXX X. XXXXXX REVOCABLE TRUST, DATED
SEPTEMBER 22, 1984;
By: Xxxxx X. Xxxxxx, Trustee
/s/ Xxxxx X. Xxxxxx
-------------------------------------
XXXXX X. XXXXXX QUALIFIED TERMINABLE
INTEREST PROPERTY MARITAL DEDUCTION
TRUST CREATED UNDER THE FOURTH
AMENDMENT AND RESTATEMENT OF
DECLARATION OF TRUST ESTABLISHING THE
XXXX X. XXXXXX REVOCABLE TRUST, DATED
SEPTEMBER 22, 1984
By: Xxxxx X. Xxxxxx, Trustee
s/ Xxxxx X. Xxxxxx
-------------------------------------
By: Bessemer Trust Company, N.A., Trustee
/s/ Xxxxx X. Xxxxxxxxxx
-------------------------------------
By: Xxxx Xxxx Xxxxx, Trustee
/s/ Xxxx Xxxx Xxxxx
-------------------------------------
By: Xxxx X. Xxxxxx, Trustee
/s/ Xxxx X. Xxxxxx
-------------------------------------
By: Xxxx X. Xxxxxx, Trustee
/s/ Xxxx X. Xxxxxx
-------------------------------------
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SCHEDULE A
A-1
-------------------------------------------------------------------------------------------------------------------------
TOTAL
CAPITAL MANNER OF MEMBERSHIP
MEMBERS (OR OTHER OWNERS) NOTICE ADDRESS CONTRIBUTION CONTRIBUTION CLASS UNITS
-------------------------- ------------------------------- ------------ ---------------- ---------- ----------- ---------
Xxxxx X. Xxxxxx 31,799.32 shares Class A 0.3905
Qualified Terminable of Winnebago
Interest Property Industries, Inc.
Marital stock
Deduction Trust
-------------------------- ------------------------------- ------------ ---------------- ---------- ----------- ---------
Xxxxx X. Xxxxxx 49,633.74 shares
Revocable Trust, dated of Winnebago
September 22, 1984 Industries, Inc.
stock Class A 0.6095
-------------------------- ------------------------------- ------------ ---------------- ---------- ----------- ---------
Xxxxx X. Xxxxxx 3,148,132.68
Qualified Terminable shares of
Interest Property Winnebago
Marital Industries, Inc.
Deduction Trust stock Class B 38.6591
-------------------------- ------------------------------- ------------ ---------------- ---------- ----------- ---------
Xxxxx X. Xxxxxx 4,913,740.26
Revocable Trust, dated shares of
September 22, 1984 Winnebago
Industries, Inc.
stock Class B 60.3409
-------------------------- ------------------------------- ------------ ---------------- ---------- ----------- ---------
-------------------------- ------------------------------- ------------ ---------------- ---------- ----------- ---------
-------------------------- ------------------------------- ------------ ---------------- ---------- ----------- ---------
-------------------------- ------------------------------- ------------ ---------------- ---------- ----------- ---------
-------------------------- ------------------------------- ------------ ---------------- ---------- ----------- ---------
-------------------------- ------------------------------- ------------ ---------------- ---------- ----------- ---------
A-2
