EXHIBIT 3.9
MEMBER CONTROL AGREEMENT
OF
HERBERGER'S DEPARTMENT STORES, LLC
THIS MEMBER CONTROL AGREEMENT (the "Member Control Agreement") of
Herberger's Department Stores, LLC (the "Company"), effective as of the 6th day
of March, 2006, is made by The Bon-Ton Department Stores, Inc., a Pennsylvania
corporation, as the sole member (the "Member").
RECITALS
WHEREAS, this Member Control Agreement is intended to serve as the member
control agreement relating to the business and affairs of the Company as
provided in Section 322B.37 of the Minnesota Act (as hereinafter defined) and
replaces in its entirety the Operating Declaration of the Company; and
WHEREAS, the Member desires to state this Member Control Agreement, as set
forth below;
NOW; THEREFORE, the Member declares as follows:
1. FORMATION.
Effective with the filing of the Articles of Organization ("Articles"), the
Company constitutes a limited liability company formed pursuant to the Minnesota
Act and other applicable laws of the State of Minnesota. The Board of Governors
shall, when required, file such amendments to or restatements of the Articles,
in such public offices in the State of Minnesota or elsewhere as the Board of
Governors deem advisable to give effect to the provisions of this Member Control
Agreement and the Articles, and to preserve the character of the Company as a
limited liability company.
2. NAME; PLACE OF BUSINESS; REGISTERED OFFICE AND AGENT.
The Company shall conduct its business under the name "Herberger's
Department Stores, LLC" or such other name as the Board of Governors shall
hereafter designate. The principal office and place of business of the Company
shall be located at 000 Xxxx Xxxxxxx, . Xx. Xxxxx, Xxxxxxxxx 00000, or such
other address as the Board of Governors shall hereafter designate. The initial
registered agent for service of process at the registered office of the Company
shall be Corporation Service Company. The registered office of the Company shall
be located at 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000, or such other name as the Board of Governors shall hereafter designate.
3. PURPOSE.
The purposes of the Company are to:
(a) own, hold and manage certain department stores and any other
lawful business in which corporations for profit, professional corporations,
limited partnerships or general partnerships formed in Minnesota may engage;
(b) exercise all powers necessary to or reasonably connected with the
Company's business that may be legally exercised by limited liability companies
under the Minnesota Act; and
(c) engage in all activities necessary, customary, convenient, or
incident to such purposes.
4. STATUTORY COMPLIANCE.
The Company shall exist under and be governed by, and this Member Control
Agreement shall be construed in accordance with, the applicable laws of the
State of Minnesota. The Member shall execute and file such documents and
instruments as may be necessary or appropriate with respect to the formation of,
and the conduct of business by, the Company.
5. TITLE TO COMPANY PROPERTY.
All property shall be owned by the Company and, insofar as permitted by
applicable law, the Member shall have no ownership interest in the property.
Except as provided by law, an ownership interest in the Company shall be
personal property for all purposes.
6. THE BOARD OF GOVERNORS.
6.1 Management. The business and affairs of the Company shall be
managed by a Board of Governors. Except as provided by applicable law, the Board
of Governors shall have full and complete authority, power and discretion to
manage and control the business, affairs and properties of the Company, to make
all decisions regarding those matters and to perform any and all other acts or
activities customary or incident to the management of the Company's business.
6.2 Number and Tenure of Governors. The Board of Governors shall
initially consist of two (2) Governors who shall be as follows: Xxxxx X.
Xxxxxxxxxx and Xxxxx X. Xxxxxxx. The number of Governors shall be fixed from
time to time by the Member, but in no instance shall there be less than two
Governors. Governors shall serve at the discretion of the Member. Governors
shall be appointed by the Member.
6.3 Authority and Duties of Board of Governors. The Board of
Governors, acting by a majority in number of Governors, shall have the sole and
exclusive right to manage and control, and complete and exclusive discretion in
the management and control of, the affairs and business of the Company to the
extent provided herein; and shall have all of the rights and powers of a board
of governors of a limited liability company to the extent permitted by the
Minnesota Act. The Board of Governors shall take all actions necessary or
appropriate (i) for the continuation of the Company's valid existence as a
limited liability company under the laws of the State of Minnesota and of each
other jurisdiction in which such existence is necessary to
protect the limited liability of the Member or to enable the Company to conduct
the business in which it is engaged, and (ii) for the accomplishment of the
Company's purposes.
6.4 Duties of Governors. The Governors shall devote to the Company
such time as may be necessary for the proper performance of all duties of such
Governor under the Minnesota Act, but no Governor shall be required to devote
full time to the performance of such duties and may have other business
interests or engage in other business activities. Neither the Company nor the
Member shall have any right, by virtue of this Member Control Agreement, to
share or participate in other investments or activities of any Governor. No
Governor shall incur liability to the Company or to the Member as a result of
engaging in any other business or venture.
6.5 Compensation. Compensation of Governors shall be fixed from time
to time by the Member, absent which Governors shall serve without compensation.
6.6 Resignation. Any Governor may resign at any time by giving written
notice to the Member. The resignation of a Governor shall take effect 30 days
after receipt of such notice unless sooner accepted by the Member or at such
later time as shall be specified in such notice, and, unless otherwise specified
in such notice, the acceptance of such resignation shall not be necessary to
make it effective.
6.7 Vacancies. Any vacancy occurring for any reason in the number of
Governors, including by reason of an increase in the number of Governors, shall
be filled by the Member. A Governor appointed to fill a vacancy shall hold
office until a successor shall be appointed and shall qualify, or until such
Governor's earlier death, removal or resignation.
6.8 Meetings. Action Without a Meeting. Meetings of the Board of
Governors may be called by a majority of the Governors on no less than 24 hours
notice. Governors may meet at any place within or without the State of Minnesota
as set forth in the notice of the meeting. The Board of Governors may act
without a meeting by consent in writing signed by all of the Governors.
6.9 Officers. The Board of Governors are hereby authorized by the
Member to appoint officers ("Officers") to implement the decisions of the Board
of Governors, including, but not limited to, the administration of the
day-to-day business of the Company and, subject to the other provisions of this
Member Control Agreement, the administration of the ordinary and usual business
affairs of the Company, and the Officers so appointed shall be responsible for
such implementation. Except as expressly provided to the contrary in this Member
Control Agreement, and except as otherwise directed by the Board of Governors,
the Officers are authorized to make decisions relating to the day-today affairs
of the Company and to implement such decisions. In addition, the Board of
Governors is hereby authorized to delegate to the Officers such responsibilities
as deemed appropriate by approval of the Board of Governors, including, but not
limited to, the right to execute and deliver instruments on behalf of the
Company.
6.10 Removal of Officers. Any of the Officers may be removed by the
Board of Governors at any time, by written notice of such removal given without
any prior notice or
warning, for any reason whatsoever, and the Board of Governors shall appoint
such Officer's successor.
6.11 Compensation for Services. Compensation of Officers shall be as
approved by the Board of Governors.
6.12 Liability of the Officers and Governors. As long as an Officer or
a Governor, as applicable, shall act in good faith with respect to the conduct
of the business and affairs of the Company, no such Officer or Governor shall be
liable to the Company or to the Member, in damages or otherwise, for any error
of judgment, for any mistake of fact or of law, or for any other act or thing
which such Officer or Governor, as applicable, may do or refrain from doing in
connection with the business and affairs of the Company, except in the case of
gross negligence, willful misconduct, fraud or bad faith.
7. INDEMNIFICATION OF GOVERNORS AND OFFICERS.
7.1 Generally.
7.1.1 The Company, its receiver or its trustee shall indemnify,
save harmless, and pay all judgments and claims against the Governors or
Officers relating to any liability or damage incurred by reason of any act
performed or omitted to be performed by such Governors or Officers in connection
with the business of the Company, including attorneys' fees incurred by such
Governors or Officers in connection with the defense of any action based on any
such act or omission, which attorneys' fees may be paid as incurred, including
all such liabilities under federal and state securities laws (including the
Securities Act of 1933, as amended, and the Investment Companies Act) as
permitted by law.
7.1.2 The Company shall indemnify, save harmless, and pay all
expenses, costs, or liabilities of any Governors or Officers who for the benefit
of the Company make any deposit, acquire any option, or make any other similar
payment or assume any obligation in connection with any property proposed to be
acquired by the Company and who suffer any financial loss as the result of such
action.
7.1.3 A Governor or Officer shall not be entitled to
indemnification under this Section 7.1 if the conduct of such Governor or
Officer constitutes bad faith, gross negligence or willful or wanton misconduct.
For purposes of this Member Control Agreement, any act or omission, if done or
omitted to be done in reliance, in whole or in part, upon the advice of
independent legal counsel or independent certified public accountants selected
with reasonable care, will be presumed to have been done or omitted to be done
in good faith and not to constitute gross negligence or willful or wanton
misconduct.
7.2 Insurance. The Company may purchase and maintain insurance on
behalf of any one or more indemnitees under Section 7.1 and such other persons
as the Board of Governors shall determine against any liability which may be
asserted against or expense which may be incurred by such person in connection
with the Company's activities, whether or not the Company would have the power
to indemnify such person against such liability or expense under the provisions
of this Member Control Agreement. The Governors and the Company may enter into
indemnity contracts and adopt written procedures pursuant to which arrangements
are made
for the advancement of expenses and the funding of obligations under this
Section 7.2 and containing such other procedures regarding indemnification as
are appropriate.
8. APPOINTMENT OF GOVERNORS AS ATTORNEY-IN-FACT.
The Member irrevocably constitutes and appoints each of the Governors as
the Member's true and lawful attorney and agent, with full power and authority
in the Member's name, place and stead, to execute, acknowledge, deliver, file
and record in the appropriate public offices all certificates or other
instruments (including, without limitation, counterparts of the Articles or of
this Member Control Agreement) which such Governor deems appropriate to qualify
or continue the Company as a limited liability company in jurisdictions in which
the Company conducts business, including amendments to the Articles or this
Member Control Agreement necessary to effect changes of a ministerial nature
which do not materially and adversely affect the rights or increase the
obligations of the Member. Any person dealing with the Company may conclusively
presume and rely upon the fact that any such instrument executed by such agent
and attorney-in-fact is authorized, regular and binding without further inquiry.
9. RIGHTS AND OBLIGATIONS OF THE MEMBER.
9.1 Limitation on Member's Liabilities. The Member's liability shall
be limited as set forth in this Member Control Agreement, the Minnesota Act and
other applicable law. The Member shall not be bound by, or be personally liable
for, the expenses, liabilities or obligations of the Company beyond the amount
contributed by the Member to the capital of the Company, except as provided
under the Minnesota Act.
9.2 Voting Rights. Except as otherwise specifically set forth in this
Member Control Agreement, the Member shall have only the voting rights set forth
in the Minnesota Act.
9.3 Action by Member Without a Meeting. Any action required or
permitted to be taken by the Member may be taken without a meeting by consent in
writing signed by the Member.
10. CAPITAL ACCOUNTS. The Member, as successor to Saks Incorporated (the
"Former Member"), succeeds to the capital account of the Former Member, as such
capital account is reflected on the books of the Company as of the date hereof.
11. DISTRIBUTIONS. All distributions by the Company shall be made at the
discretion of the Board of Governors.
12. BOOKS AND RECORDS.
12.1 Availability. At all times during the existence of the Company,
the Board of Governors shall keep or cause to be kept complete and accurate
books and records appropriate and adequate for the Company's business, and any
records required to be kept under Section 322B.373 of the Minnesota Act. Such
books and records, whether financial, operational or otherwise and including a
copy of this Member Control Agreement and all amendments, shall at all times be
maintained at the principal place of business of the Company. The Member or such
Member's duly authorized representative, subject to reasonable standards
established by the
Board of Governors governing what information and documents are to be furnished
at what time and location and at whose expense, shall have the right at any
time, for any purpose reasonably related to such Member's ownership interest, to
inspect and copy from such books and documents during normal business hours.
12.2 Reports. If requested by the Member, within ninety (90) days
after the end of each fiscal year, the Board of Governors shall cause to be
delivered to the Member a profit and loss statement for, and a balance sheet as
of the end of, such year.
12.3 Registration. The Board of Governors shall file or cause to be
filed on behalf of the Company a registration with the Secretary of State as
required by Section 322B.960 of the Minnesota Act.
12.4 Tax Returns. The Board of Governors shall cause an accountant to
prepare all tax returns that the Company is required to file, if any, and shall
file with the appropriate taxing authorities all such returns in a manner
required for the Company to be in compliance with any law governing the timely
filing of such returns.
12.5 Depositories. The Board of Governors shall maintain or cause to
be maintained one or more accounts for the Company in such depositories as the
Board of Governors shall select. All receipts of the Company from whatever
source received (but no funds not belonging to the Company) shall be deposited
in such accounts, and all expenses of the Company shall be paid from such
accounts. All amounts so deposited shall be received, held and disbursed by an
Officer or Officers designated by the Board of Governors only for the purposes
authorized by this Member Control Agreement. Unless otherwise determined by the
Board of Directors, all signatories on any such account shall be bonded under a
blanket commercial bond insuring the Company against loss, and such accounts
shall be insured against loss from forgery.
13. DISSOLUTION.
13.1 Events Causing Dissolution. The Company shall be dissolved and
its affairs wound up at such time as the Member determines that the Company
should be dissolved, or whenever dissolution is required by law.
13.2 Liquidation of Property and Application of Proceeds.
13.2.1 Winding Up. Upon the dissolution of the Company, the Board
of Governors shall wind up the Company's affairs in accordance with the
Minnesota Act. In winding up the affairs of the Company, the Board of Governors
is authorized to take any and all actions contemplated by the Minnesota Act as
permissible.
13.2.2 Distribution of Proceeds. Upon the winding up of the
Company, the Board of Governors shall distribute the proceeds and undisposed
property as follows:
(i) to creditors, including the Member if the Member is a
creditor (to the extent and in the order of priority provided by law) in
satisfaction of liabilities of the Company, whether by payment or the making of
reasonable provisions for payment thereof; and
(ii) thereafter, to the Member.
IN WITNESS WHEREOF, the sole Member hereby executes this Member Control
Agreement as of the date first above written.
MEMBER:
THE BON-TON DEPARTMENT STORES, INC.
By: /s/ XXXXXX X. XXXXX
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President-General Counsel
and Secretary
