Exhibit 3.2
THIRD AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF
AMERICAN SEAFOODS GROUP LLC
TABLE OF CONTENTS
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Page
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ARTICLE I THE COMPANY ................................................. 1
Section 1.1 Formation ..................................................... 1
Section 1.2 Filing ........................................................ 1
Section 1.3 Name .......................................................... 2
Section 1.4 Registered Office, Registered Agent ........................... 2
Section 1.5 Events of Dissolution ......................................... 2
Section 1.6 Management of Business ........................................ 2
Section 1.7 Character of Business ......................................... 3
Section 1.8 Principal Place of Business ................................... 3
Section 1.9 Intent of Parties ............................................. 3
ARTICLE II CONTRIBUTIONS TO CAPITAL .................................... 4
Section 2.1 Capital Contributions ......................................... 4
Section 2.2 No Third Party Beneficiary .................................... 4
Section 2.3 Capital Accounts .............................................. 4
Section 2.4 No Interest; No Return ........................................ 5
ARTICLE III ALLOCATIONS; TAX AND ACCOUNTING MATTERS ..................... 5
Section 3.1 Adjustments to Capital Accounts ............................... 5
Section 3.2 Books of Account .............................................. 9
Section 3.3 Tax Elections and Returns ..................................... 9
Section 3.4 Tax Matters Partner ........................................... 9
ARTICLE IV DISTRIBUTIONS ............................................... 10
Section 4.1 Tax Distributions ............................................. 10
Section 4.2 Other Distributions ........................................... 10
ARTICLE V INDEMNIFICATION ............................................. 10
Section 5.1 Right to Indemnification. ..................................... 10
Section 5.2 Right of Claimant to Bring Suit ............................... 11
Section 5.3 Non-Exclusivity of Rights ..................................... 12
Section 5.4 Insurance ..................................................... 12
Section 5.5 Amendment or Repeal ........................................... 12
ARTICLE VI RIGHTS AND OBLIGATIONS OF MEMBERS ........................... 12
Section 6.1 Authority and Appointment of Managers; Authority of Member. ... 12
Section 6.2 Limited Liability ............................................. 14
Section 6.3 Amendments .................................................... 14
ARTICLE VII TERMINATION ................................................. 14
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TABLE OF CONTENTS
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(continued)
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ARTICLE VIII TRANSFERS OF MEMBERSHIP INTERESTS; ADMISSION OF
ADDITIONAL MEMBERS .......................................... 14
ARTICLE IX MISCELLANEOUS ............................................... 15
Section 9.1 Governing Law ................................................. 15
Section 9.2 Binding Effect ................................................ 15
Section 9.3 Severability .................................................. 15
Schedule A
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THIRD AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF
AMERICAN SEAFOODS GROUP LLC
This Third Amended and Restated Limited Liability Company Agreement
(this "Agreement") is made and entered into as of April 17, 2002, by American
Seafoods Consolidated LLC, a Delaware limited liability company (the "Managing
Member"), as the managing member of American Seafoods Group LLC (the "Company"),
and ASC, Inc. (formerly known as American Seafoods Company), a Washington
corporation, as the non-managing member of the Company ("ASC") (each of the
Managing Member and ASC being referred to herein as a "Member," and collectively
as the "Members"). Defined terms used, but not otherwise defined herein, shall
have the meanings ascribed to such terms on Schedule A hereto.
RECITALS
WHEREAS, the Managing Member previously formed the Company and executed
a Limited Liability Company Agreement of the Company (the "Original LLC
Agreement") dated January 28, 2000;
WHEREAS, the parties entered into the Amended and Restated Limited
Liability Company Agreement of the Company, which amended and restated the
Original LLC Agreement in its entirety, as of February 1, 2000 (the "First
Amended Agreement"), and the Second Amended and Restated Limited Liability
Company Agreement of the Company, which amended and restated the First Amended
Agreement in its entirety, as of March 31, 2001 (the "Existing LLC Agreement");
WHEREAS, the parties desire to enter into this Agreement in order to
set forth the agreement and the relationships as now intended among them;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants, conditions and agreements herein set forth, the parties agree that
the Existing LLC Agreement shall be amended and restated in its entirety as
follows:
ARTICLE I
THE COMPANY
Section 1.1 Formation. The Managing Member previously formed the
Company as its sole member subject to the provisions of the Delaware Limited
Liability Company Act as currently in effect and as the same may be amended from
time to time (the "Act").
Section 1.2 Filing. The Managing Member has caused a Certificate of
Formation that complies with the requirements of the Act to be properly executed
and filed with the Delaware Secretary of State, and the Managing Member, or such
other Persons as may be
authorized by the Members, are hereby designated as authorized
Persons to execute such further documents (including amendments to the
Certificate of Formation) and take such further action as is appropriate to
comply with the requirements of law for the formation or operation of a limited
liability company in all states and counties where the Company may conduct its
business.
Section 1.3 Name. The name of the Company shall be American Seafoods
Group LLC.
Section 1.4 Registered Office, Registered Agent. The location of the
registered office of the Company shall be Corporation Trust Center, 1209 Orange
Street, Wilmington, Delaware, and thereafter at such other location as the
Managing Member may designate. The Company's registered agent at such address
shall be The Corporation Trust Company.
Section 1.5 Events of Dissolution. The Company shall continue until
December 31, 2050, unless sooner dissolved by:
(a) the election of the Managing Member;
(b) any event which makes it unlawful for the business of the Company
to be carried on by the Members; or
(c) any other event causing a dissolution of a limited liability
company under the Act.
Section 1.6 Management of Business. Subject to Section 6.1, the
business of the Company shall be conducted under the management of the Managing
Member. The Managing Member shall be responsible for the management of the
Company's business and affairs, and the Company shall be managed solely by the
Managing Member. Except as otherwise expressly provided in this Agreement, the
Managing Member shall have the exclusive power and authority to take such action
for and on behalf of the Company as the Managing Member shall from time to time
deem necessary or appropriate to carry on the Company's business and to carry
out the purposes for which the Company was organized. Without limiting the
generality of the foregoing, but subject to any express provisions to the
contrary in this Agreement, the Managing Member shall have the right, power and
authority, in the name of, and on behalf of, the Company to:
(a) protect and preserve the title and interest of the Company in the
property and assets owned by the Company;
(b) pay, before delinquency and prior to the addition thereto of
interest or penalties, all taxes, assessments, rent and other impositions
applicable to the
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property and assets owned by the Company and undertake any action or
proceedings seeking to reduce such taxes, assessments, rents or other
impositions;
(c) retain or employ and coordinate the services of all employees,
supervisors, architects, engineers, accountants, attorneys and other
Persons necessary or appropriate to carry out the business of the Company;
(d) maintain casualty and liability insurance and such other insurance
as is customarily maintained by owners of property utilized in a similar
manner in the geographic area in which any property owned by the Company is
located, and pay all insurance premiums, debts and other obligations of the
Company;
(e) after receipt of notice of any violations of any law, rules or
order of any governmental authority having jurisdiction over any Company
property or assets, promptly correct or cure same; and
(f) comply with the terms of all contracts required to be complied with
by the Company.
Except as otherwise provided herein, to the extent the duties of the Managing
Member require expenditures of funds to be paid to third parties, the Managing
Member shall not have any obligations hereunder except to the extent that
Company funds are reasonably available to it for the performance of such duties,
and nothing herein contained shall be deemed to authorize or require the
Managing Member, in its capacity as such, to expend its individual funds for
payment to third parties or to undertake any individual liability or obligation
on behalf of the Company.
Section 1.7 Character of Business. The business of the Company shall be
to transact any and all businesses for which limited liability companies may be
formed under Delaware law and to accomplish any of the foregoing purposes for
its own account or as nominee, agent or trustee for others.
Section 1.8 Principal Place of Business. The location of the principal
place of business of the Company shall be at such place as the Managing Member
from time to time may select.
Section 1.9 Intent of Parties. It is the specific intent of the parties
to this Agreement that the Company will be treated as a partnership for Federal
income tax purposes.
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ARTICLE II
CONTRIBUTIONS TO CAPITAL
Section 2.1 Capital Contributions. The Managing Member has previously
made a Capital Contribution of cash in the amount of $38,656,356, and ASC has
previously made a Capital Contribution with a value of $123,858,732. In no event
shall a Member be required to contribute capital to the Company in excess of its
initial Capital Contribution.
Section 2.2 No Third Party Beneficiary. No creditor or other third
party having dealings with the Company shall have the right to enforce the right
or obligation of any Member to make Capital Contributions or to pursue any other
right or remedy hereunder or at law or in equity, it being understood and agreed
that the provisions of this Agreement shall be solely for the benefit of, and
may be enforced solely by, the parties hereto and their respective successors
and assigns. None of the rights or obligations of the Members herein set forth
to make Capital Contributions to the Company shall be deemed an asset of the
Company for any purpose by any creditor or other third party, nor may such
rights or obligations be sold, transferred or assigned by the Company or pledged
or encumbered by the Company to secure any debt or other obligation of the
Company or of any of the Members. Without limiting the generality of the
foregoing, a deficit capital account of a Member shall not be deemed to be a
liability of such Member nor an asset or property of the Company.
Section 2.3 Capital Accounts. The Company shall maintain a separate
capital account (a "Capital Account") for each member. Capital Accounts shall
consist of such Member's initial Capital Contribution to the Company, (i)
increased by (A) any additional actual or constructive Capital Contributions by
such Member to the Company and (B) any income from time to time credited to the
Capital Account of such Member pursuant to Article III, and (ii) decreased by
(A) any actual or constructive distributions to such Member and (B) any losses
or deductions from time to time charged to the Capital Account of such Member
pursuant to Article III.
Capital Accounts shall be determined and maintained in accordance with
Section 704(b) of the Internal Revenue Code of 1986, as amended (the "Code") and
the Treasury regulations promulgated thereunder ("Regulations"), with such
adjustments as may be required thereby. For purposes of maintaining and
determining Capital Accounts, all property distributed in kind by the Company to
a Member shall be charged to that Member's Capital Account at the fair market
value of such property on the date of distribution, and all property contributed
in kind by a Member to the Company shall be credited to that Member's Capital
Account at the fair market value of such property on the date of contribution.
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Except as expressly required by the Delaware Act, no Member shall have
any obligation to restore a deficit balance in its Capital Account.
Section 2.4 No Interest; No Return. No Member shall be entitled to
interest on its Capital Contribution or on such Member's Capital Account. Except
as provided herein or by law, no Member shall have any right to demand or
receive the return of its Capital Contribution from the Company.
ARTICLE III
ALLOCATIONS; TAX AND ACCOUNTING MATTERS
Section 3.1 Adjustments to Capital Accounts. The Capital Accounts of
the Members shall be adjusted as follows:
(a) Any amounts distributed to a Member shall, at the time of
distribution, be debited against the Capital Account of such Member.
(b) Profits of the Company for each fiscal year shall be credited to
the Capital Accounts of the Members as follows and in the following order
of priority:
(i) first, to the Capital Accounts of the Members, until
aggregate Profits credited under this clause (i) shall equal aggregate
Losses theretofore charged under Section 3.1(c)(iv);
(ii) second, 100% to the Capital Account of ASC, until the
aggregate amount so credited under this clause (ii) shall equal the sum
of (x) the Preferred Return Amount and (y) all amounts theretofore
debited to the Capital Account of ASC under Section 3.1(c)(iii);
(iii) third, 90% to the Capital Account of the Managing Member
and 10% to the Capital Account of ASC, up to an amount equal to $50
million of remaining Profits for such fiscal year; and
(iv) thereafter, 95% to the Capital Account of the Managing
Member and 5% to the Capital Account of ASC.
(c) Losses shall be debited to the Capital Accounts of the Members in
the following order of priority:
(i) first, 95% to the Capital Account of the Managing Member
and 5% to the Capital Account of ASC, until aggregate Losses charged to
the Capital Accounts of the Members under this clause (i) shall equal
the aggregate Profits, if any, theretofore allocated under Section
3.1(b)(iv);
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(ii) second, 90% to the Capital Account of the Managing Member
and 10% to the Capital Account of ASC, until aggregate Losses charged
to the Capital Accounts of the Members under this clause (ii) shall
equal the aggregate Profits theretofore credited to the Capital
Accounts of the Members under Section 3.1(b)(iii);
(iii) third, 100% to the Capital Account of ASC until
aggregate Losses charged to ASC's Capital Account under this clause
(iii) shall equal the aggregate Profits theretofore credited to ASC's
Capital Account under Section 3.1(b)(ii); and
(iv) thereafter, to the Capital Accounts of the Members in
proportion to their respective Capital Contributions.
(d) Notwithstanding any other provision of this Agreement, the
following special allocations shall be made in the following order:
(i) Minimum Gain Chargeback. Notwithstanding any other
provisions of this Section 3.1, if there is a net decrease in
Partnership Minimum Gain during any fiscal year, each Member shall be
specially allocated items of Company income and gain for such year
(and, if necessary, subsequent years) in an amount equal to such
Member's share of the net decrease in Partnership Minimum Gain, as
determined under Regulations Section 1.704-2(g). Allocations pursuant
to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Member pursuant thereto. The
items to be so allocated shall be determined in accordance with
Regulations Section 1.704-2(f)(6). This Section 3.1(d)(i) is intended
to comply with the minimum gain chargeback requirements of Regulations
Section 1.704-2(f) and shall be interpreted consistently therewith.
(ii) Partner Minimum Gain Chargeback. Notwithstanding any
other provision of this Agreement (except Section 3.1(d)(i)), if there
is a net decrease in Minimum Gain Attributable to a Partner Nonrecourse
Debt during any fiscal year, each Member who has a share of the Minimum
Gain Attributable to such Partner Nonrecourse Debt, determined in
accordance with Regulations Section 1.704-2(i)(5), shall be specially
allocated items of Company income and gain for such year (and, if
necessary, subsequent years) in an amount equal to such Member's share
of the net decrease in Minimum Gain Attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5). Allocations pursuant to the previous sentence shall be
made in proportion to the respective amounts required to be allocated
to
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each Member pursuant thereto. The items to be so allocated shall be
determined in accordance with Regulations Section 1.704-2(i)(4). This
Section 3.1(d)(ii) is intended to comply with the minimum gain
chargeback requirement in such Section of the Regulations and shall be
interpreted consistently therewith.
(iii) Qualified Income Offset. In the event any Member
unexpectedly receives any adjustments, allocations or distributions
described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), and after giving
effect to the allocations required under Sections 3.1(d)(i) and
3.1(d)(ii), such Member has an Adjusted Capital Account Deficit, items
of Company income and gain shall be specially allocated to such Member
in an amount and manner sufficient to eliminate, to the extent required
by the Regulations, its Adjusted Capital Account Deficit created by
such adjustments, allocations or distributions as quickly as possible.
(iv) Nonrecourse Deductions. Nonrecourse Deductions for any
fiscal year shall be allocated on a pro rata basis to the Managing
Member and ASC based on their respective shares of Profit or Loss for
the current year.
(v) Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any fiscal year shall be specially allocated to the
Member who bears the economic risk of loss, under Regulations Section
1.704-2(i)(1), with respect to the Partner Nonrecourse Debt to which
such Partner Nonrecourse Deductions are attributable in accordance with
Regulations Section 1.704-2(i)(2).
(vi) Code Section 754 Adjustments. To the extent an adjustment
to the adjusted tax basis of any Company asset pursuant to Section
734(b) or 743 of the Code is required, pursuant to Regulations 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), and such
item of gain or loss shall be specially allocated to the Members in a
manner consistent with the manner in which their Capital Accounts are
required to be adjusted pursuant to such Section of the Regulations.
(vii) Allocations Subsequent to Assignment. To the extent
permitted by the Code, Profits or Losses and other items attributable
to a Membership Interest acquired by reason of an assignment from a
Member
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shall be allocated or adjusted between the assignor or the assignee
based upon an interim closing of the Company's books at assignor's sole
expense.
(viii) Curative Allocations. The allocations set forth in
Sections 3.1(d)(i), (ii), (iii), (v) and (vi) (the "Regulatory
Allocations") are intended to comply with certain requirements of
Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding any
provisions herein to the contrary (other than the Regulatory
Allocations), the Regulatory Allocations shall be taken into account in
allocating other items of income, gain, loss and deduction among the
Members so that, to the extent possible, the cumulative net amount for
the allocations of Company items under this Article III shall be equal
to the net amount that would have been allocated had the Regulatory
Allocations not occurred. This Section 3.1(d)(viii) is intended to
minimize to the extent possible and to the extent necessary any
economic distortions which may result from application of the
Regulatory Allocations and shall be interpreted in a manner consistent
with this intention.
(ix) Excess Nonrecourse Liabilities. For purposes of
allocating "excess nonrecourse liabilities" of the Company under
Regulations Section 1.752-3(a)(3), ASC's interest in Company profits
shall be 10% and the Managing Member's interest in the Company shall be
90%.
(x) Special Allocations of Interest Expense. The Managing
Member shall, for any fiscal year, have the power to specially allocate
to one or more Members an amount of interest expense corresponding to
such portion of the indebtedness of the Company that is allocable to a
distribution to such Member or Members (all as determined by the
Managing Member in its good faith judgment).
(e) Except as otherwise provided in this Section 3.1(e), for federal
and state income tax purposes, each item of income, gain, loss and
deduction (a "Tax Item") shall be allocated among the Members in the same
manner as its correlative item of "book" income, gain, loss or deduction is
allocated among the Members pursuant to this Section 3.1.
If any portion of gain from the sale of property is treated as gain
which is ordinary income by virtue of the application of Code Sections 1245 or
1250 ("Affected Gain"), then (A) such Affected Gain shall be allocated among the
Members in the same proportion that the depreciation and amortization deductions
giving rise to the Affected Gain were allocated and (B) other Tax Items of gain
of the same character that would have been recognized, but for the application
of Code Sections 1245 and/or 1250, shall be
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allocated away from those Members who are allocated Affected Gain pursuant to
Clause (A) so that, to the extent possible, the other Members are allocated the
same amount and type of capital gain that would have been allocated to them had
Code Sections 1245 and/or 1250 not applied. For purposes hereof, in order to
determine the proportionate allocations of depreciation and amortization
deductions for each fiscal year or other applicable period, such deductions
shall be deemed allocated on the same basis as Profits or Losses for such
period.
In accordance with Code Section 704(c) and the Regulations promulgated
thereunder, income, gain, loss and deduction with respect to any property
contributed to the capital of the Company shall, solely for tax purposes, be
allocated among the Members 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 initial Gross Asset Value in accordance with any method selected by the
Managing Member that is permitted under the applicable Regulations.
Section 3.2 Books of Account. At all times during the continuance of
the Company, the Managing Member shall maintain or cause to be maintained full,
true, complete and correct books of account in accordance with generally
accepted accounting principles wherein shall be entered particulars of all
monies, goods or effects belonging to or owing to or by the Company, or paid,
received, sold or purchased in the course of the Company's business, and all of
such other transactions, matters and things relating to the business of the
Company as are usually entered in books of account kept by Persons engaged in a
business of a like kind and character. In addition, the Company shall keep all
records as required to be kept pursuant to the Act. The books and records of
account shall be kept at the principal office of the Company, and each Member
shall at all reasonable times have access to such books and records and the
right to inspect the same.
Section 3.3 Tax Elections and Returns. All elections required or
permitted to be made by the Company under any applicable tax law shall be made
by the Managing Member in its sole discretion.
Section 3.4 Tax Matters Partner. The Managing Member is hereby
designated as the Tax Matters Partner within the meaning of Section 6231(a)(7)
of the Code for the Company; provided, however, (i) in exercising its authority
as Tax Matters Partner it shall be limited by the provisions of this Agreement
affecting tax aspects of the Company; (ii) the Managing Member shall give prompt
notice to the Members of the receipt of any written notice that the Internal
Revenue Service or any state or local taxing authority intends to examine
Company income tax returns for any year, receipt of written notice of the
beginning of an administrative proceeding at the Company level relating to the
Company under Section 6223 of the Code, receipt of written notice of the final
administrative adjustment relating to the Company pursuant to Section 6223 of
the Code, and receipt of any request from the Internal Revenue Service for
waiver of any applicable
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statute of limitations with respect to the filing of any tax return by the
Company; and (iii) the Managing Member shall promptly notify the Members if the
Managing Member does not intend to file for judicial review with respect to any
final administrative adjustment relating to the Company.
ARTICLE IV
DISTRIBUTIONS
Section 4.1 Tax Distributions. Prior to the making of any other
distributions hereunder, to the extent the Company has cash available to it, and
after setting aside appropriate reserves, the Company shall distribute to each
Member, not later than ninety (90) days after the end of each fiscal year of the
Company, cash in an amount that would be sufficient to permit such Member to pay
the Theoretical Tax on the amount of taxable income allocated to such Member
pursuant to Article III hereof for federal income tax purposes, without regard
to the individual tax status of any Member, but after giving effect to (x)
income and losses previously allocated by the Company to such Member in fiscal
years prior to the fiscal year with respect to which the calculation is made,
and (y) any distributions previously made pursuant to this Section 4.1. Each
such distribution shall be referred to in this Agreement as a "Tax
Distribution." A Tax Distribution shall be deemed to have been made on the last
day of the pertinent fiscal year, and taken into account in determining
allocations with respect to such fiscal year, notwithstanding that such Tax
Distribution is made in the following fiscal year. If the Company does not have
sufficient cash available to it to make the full Tax Distribution owing to each
Member for a fiscal year, the Tax Distributions for such fiscal year shall be
made pro rata to the Members in proportion to the Tax Distributions owing to
each Member for such fiscal year. Notwithstanding anything herein to the
contrary, ASC may waive its right to receive all or a portion of any Tax
Distributions required to be distributed to ASC under this Section 4.1.
Section 4.2 Other Distributions. Any other distributions by the Company
(other than pursuant to Article VII) shall be made in such amounts and at such
times and in such proportions as may be determined by the Managing Member,
provided, that no distribution pursuant to this Section 4.2 shall be made if it
would impair ASC's right to receive the balance of its Capital Account pursuant
to Article VII (as determined by the Managing Member in its good faith
judgment).
ARTICLE V
INDEMNIFICATION
Section 5.1 Right to Indemnification.
(a) The Company shall, to the fullest extent permitted by law,
indemnify any and all Indemnitees from and against any and all losses, claims,
damages, liabilities, costs and
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expenses (including attorneys' fees and costs), judgments, fines, settlements,
and other amounts arising from any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, that relate to
the operations of the Company in which any Indemnitee may be involved, or is
threatened to be involved, as a party or otherwise, unless it is established
that an act or omission of the Indemnitee was material to the matter giving rise
to the claim, demand, action, suit or proceeding and (i) was committed in bad
faith, (ii) was the result of active and deliberate dishonesty, or (iii)
constituted gross negligence or willful misconduct or a willful breach of this
Agreement or any other agreement to which such Indemnitee is a party. Any
indemnification pursuant to this Section 5.1 shall be made only out of the
assets of the Company, and no Member shall be required to contribute or advance
funds to the Company to enable the Company to satisfy its obligations under this
Section 5.1.
(b) Reasonable expenses incurred by an Indemnitee who is a party to a
proceeding shall be paid or reimbursed by the Company in advance of the final
disposition of the proceeding upon receipt by the Company of (i) a written
affirmation by the Indemnitee of the Indemnitee's good faith belief that it is
entitled to indemnification by the Company pursuant to this Section 5.1 with
respect to such expenses and proceeding, and (ii) a written undertaking by or on
behalf of the Indemnitee, to and in favor of the Company, wherein the Indemnitee
agrees to repay the amount if it shall ultimately be adjudged not to have been
entitled to indemnification under this Section 5.1.
(c) The provisions of this Section 5.1 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.
Section 5.2 Right of Claimant to Bring Suit. If a claim under Section
5.1 of this Article is not paid in full by the Company within thirty days after
a written claim has been received by the Company, the claimant may at any time
thereafter bring suit against the Company to recover the unpaid amount of the
claim and, if successful in whole or in part, the claimant shall be entitled to
be paid also the expense of prosecuting such claim. In any such action, the
Company shall have the burden of proving that the Indemnitee was not entitled to
the requested indemnification or payment of expenses under applicable law. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the Company) that the claimant has failed to meet a standard of
conduct which makes it permissible under Delaware law for the Company to
indemnify the claimant for the amount claimed. Neither the failure of the
Company to have made a determination prior to the commencement of such action
that indemnification of the claimant is permissible in the circumstances because
he or she has met such standard of conduct, nor an actual determination by the
Company that the claimant has not met such standard of conduct,
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shall be a defense to the action or create a presumption that the claimant has
failed to meet such standard of conduct.
Section 5.3 Non-Exclusivity of Rights. The right to indemnification and
the payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Article shall not be exclusive of any other
right which any Person may have or hereafter acquire under any statute,
agreement, vote of the Members or otherwise.
Section 5.4 Insurance. The Company may maintain insurance, at its
expense, to protect itself and any Indemnitee, against any such expense,
liability or loss, whether or not the Company would have the power to indemnify
such Person against such expense, liability or loss under Delaware law.
Section 5.5 Amendment or Repeal. Any repeal or modification of the
foregoing provisions of this Article V shall not adversely affect any right or
protection hereunder of any Person in respect of any act or omission occurring
prior to the time of such repeal or modification.
ARTICLE VI
RIGHTS AND OBLIGATIONS OF MEMBERS
Section 6.1 Authority and Appointment of Managers; Authority of Member.
(a) Notwithstanding anything else in this Agreement, including without
limitation Section 1.6, but subject to the limitations imposed by the Act and
the Company's Certificate of Formation, authority to manage and control the
business affairs of the Company and to make decisions regarding the ordinary
course of the business of the Company may be vested in one or more managers
(each, a "Manager") who shall be appointed by the Managing Member. At all times,
each Manager shall be a U.S. Citizen, as that term is defined in 46 C.F.R. ss.
356.3(e) (a "U.S. Citizen").
(b) Pursuant to the foregoing, each Manager shall have all the rights
and powers of a Manager as provided in the Act and, except as otherwise provided
by law, any action taken by a Manager in the ordinary course of the Company's
business shall constitute the act of and serve to bind the Company. A Manager
also may have, and may utilize, the title of President, Director, Managing
Director, Chairman, Chief Executive Officer or any other title designated by the
Managing Member. A Manager may also appoint other officers of the Company, who
may have the title of Vice President, Executive Vice President, or any other
title; provided, however, that, so long as any Person occupying any such office
is not a U.S. Citizen, such Person will have no power or authority to (i) act in
the absence or disability of a Manager or (ii) bind the Company without the
express authority of a Manager.
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(c) Notwithstanding subsections (a) and (b), the powers to act on the
following matters are reserved to the Managing Member and may be exercised only
upon, and shall be effective only subject to, the written consent of the
Managing Member:
(i) to adopt, alter, amend or repeal the Certificate of
Formation of the Company or any subsidiary thereof (each, a
"Subsidiary") or any of the provisions of this Agreement or any limited
liability company agreement or operating agreement of any Subsidiary,
including without limitation, the provisions herein specifying the
appointment of Managers;
(ii) to make any material change in the nature of the business
of the Company, including, without limitation, the investment of the
Company's funds in other businesses, the undertaking by the Company of
any new projects which are materially different from the then current
business of the Company;
(iii) to take any steps to merge, consolidate or dissolve the
Company or otherwise to terminate its existence;
(iv) to make any sale, lease, exchange or other disposition of
any Subsidiary, the business of the Company or all or substantially all
of the property or assets of the Company;
(v) to take any action to create a Subsidiary or other
business entity of the Company, or to participate in any joint venture,
association, partnership, limited liability company, or corporation;
(vi) to issue or redeem any membership interests in the
Company;
(vii) to consent to, authorize or take any action of or with
respect to any Subsidiary (whether on behalf of or in the name of such
Subsidiary or otherwise) for which the approval of such Subsidiary's
member(s) is required under such Subsidiary's articles of organization,
certificate of formation, limited liability company agreement,
operating agreement, any similar document or agreement, or the laws of
the jurisdiction under which such Subsidiary is organized;
(viii) to require additional capital contributions or loans
from any Member;
(ix) to approve any transaction with any Manager or with any
Person which directly or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with the Company
or any Subsidiary; and
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(x) to declare bankruptcy or insolvency under any applicable
law or to appoint a receiver, liquidator, sequestrator, trustee or
custodian with power over all or a substantial part of its assets.
(d) The Managing Member shall have the sole authority to remove any
Manager with or without cause by written notice to such Manager. A Manager shall
be deemed to be removed upon any death or disability of such Person. Disability
for purposes hereof shall mean that such Person is unable to perform such
Person's duties hereunder due to mental or physical incapacity for a period of
three (3) months or more.
Section 6.2 Limited Liability. Except as required under the Act or as
expressly set forth in this Agreement, no Member shall be personally liable for
any debt, obligation or liability of the Company, whether that debt, liability
or obligation arises in contract, tort or otherwise.
Section 6.3 Amendments. Amendments to this Agreement may be made only
by an instrument in writing signed by the Managing Member.
ARTICLE VII
TERMINATION
If the Company is dissolved the Managing Member shall proceed with
reasonable promptness to liquidate the Company. The assets of the Company shall
be distributed first to satisfy or provide for the satisfaction of all
liabilities of the Company to creditors, including liquidating expenses and
obligations; and thereafter to the Members in accordance with the positive
Capital Accounts of the Members, after crediting or charging thereto the amounts
required to be credited or charged pursuant to Article III hereof.
ARTICLE VIII
TRANSFERS OF MEMBERSHIP INTERESTS;
ADMISSION OF ADDITIONAL MEMBERS
No Member may transfer all or any portion of its Membership Interest to
any Person other than to an Affiliate of such Member without the express written
consent of the other Members, which consent may be withheld in the sole and
absolute discretion of such other Members.
The Managing Member shall not admit any additional Members into the
Company.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 Governing Law. This Agreement, and any question, dispute,
or other matter related to or arising from this Agreement, will be governed by
the laws of the State of New York without reference to conflict of laws
principles.
Section 9.2 Binding Effect. This Agreement binds the Members and their
respective distributees, successors, and assigns and any other Person claiming a
right or benefit under or covered by this Agreement.
Section 9.3 Severability. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable, (a) that provision will be fully
severable and this Agreement will be construed and enforced as if the illegal,
invalid, or unenforceable provision had never been part of this Agreement; (b)
the remaining provisions of this Agreement will remain in full force and will
not be affected by the illegal, invalid, or unenforceable provision or by its
severance from this Agreement; and (c) in the place of the illegal, invalid, or
unenforceable provision, there will be added automatically to this Agreement a
legal, valid, and enforceable provision that is as similar to the illegal,
invalid, or unenforceable provision as possible.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY. SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
AMERICAN SEAFOODS CONSOLIDATED
LLC
By: AMERICAN SEAFOODS HOLDINGS
LLC,
its Member
By: AMERICAN SEAFOODS, L.P.,
its Managing Member
By: ASC Management, Inc.,
its General Partner
By:_____________________________
Name:
Title:
ASC, INC.
By:______________________________
Name:
Title:
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SCHEDULE A
Definitions
-----------
"Adjusted Capital Account Deficit" means, with respect to any Member,
the deficit balance, if any, in such Member's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:
(i) Credit to such Capital Account any amounts which such
Member is obligated to restore or is deemed to be obligated to restore
pursuant to the penultimate sentences of Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5); and
(ii) Debit to such Capital Account the items described in
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the
Regulations and shall be interpreted consistently therewith.
"Affiliate" means, with respect to any Person, (i) any member of the
Immediate Family of such Person; (ii) any trustee or beneficiary of such Person;
(iii) any legal representative, successor, or assignee of such Person or any
Person referred to in the preceding clauses (i) and (ii); (iv) any trustee for
the benefit of such Person or any Person referred to in the preceding clauses
(i) through (iii); or (v) any Entity which directly or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control
with, such Person or any Person referred to in the preceding clauses (i) through
(iv).
"Annual Preferred Return Amount" means, for each fiscal year, or, in
the case of any fiscal year of less than 12 months, a proportionate amount of,
the product of (x) 8 1/4% and (y) the ASC Unrecovered Capital Amount.
"ASC Unrecovered Capital Amount" means, at any time, the excess of (i)
ASC's initial Capital Contribution over (ii) the cumulative amount distributed
to ASC hereunder (other than distributions in respect of the Preferred Return
Amount). For this purpose, any distribution to ASC shall be treated first as
made in respect of the Preferred Return Amount determined as of the time of such
distribution, and then as a recovery of capital.
"Capital Contribution" means, with respect to any Member, the amount of
money and initial value of any property other than money contributed to the
Company with respect to the Membership Interest held by such Member (net of
liabilities to which such property is subject).
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"Depreciation" means, for each fiscal year, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such fiscal year, except that if the Gross Asset Value
of an asset differs from its adjusted basis for federal income tax purposes at
the beginning of such fiscal year, Depreciation shall be an amount which bears
the same ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization or other cost recovery deduction for such fiscal year
bears to such beginning adjusted tax basis; provided, however, that if the
adjusted basis for federal income tax purposes of an asset at the beginning of
such fiscal year is zero, Depreciation shall be determined with reference to
such beginning Gross Asset Value using any reasonable method selected by the
Managing Member.
"Entity" means any general partnership, limited partnership,
corporation, limited liability company, joint venture, trust, business trust,
cooperative or association.
"Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(i) the initial Gross Asset Value of any asset contributed by
a Member to the Company shall be the gross fair market value of such
asset on the date of contribution to the Company, as determined by the
contributing Member and the Managing Member;
(ii) at the election of the Managing Member, the Gross Asset
Value of all Company assets shall be adjusted to equal their respective
gross fair market values, as determined by the Managing Member, upon
(A) the acquisition of additional interests in the Company by a new or
existing Member in exchange for more than a de minimis Capital
Contribution; (B) the distribution by the Company to a Member of more
than a de minimis amount of Company assets (including money) as
consideration for interests in the Company; or (C) the liquidation of
the Company within the meaning of Section 1.704-1(b)(2)(ii)(g) of the
Regulations; and
(iii) the Gross Asset Value of an asset shall be adjusted each
fiscal year by the Depreciation with respect to such asset taken into
account for purposes of computing Profit or Losses for such year.
"Immediate Family" means, with respect to any individual, such
individual's spouse, parents, parents-in-law, descendants, nephews, nieces,
brothers, sisters, brothers-in-law, sisters-in-law and children-in-law.
"Indemnitee" means (i) the Managing Member, (ii) any owner or principal
of the Managing Member, (iii) any Person that is a director, officer, employee,
agent or
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representative of the Managing Member or the Company, and (iv) such other
Persons as the Managing Member may reasonably designate from time to time.
"Membership Interest" means an ownership interest of a Member in the
Company from time to time, including such Member's Capital Account, and any and
all other benefits to which the holder of such Membership Interest may be
entitled as provided in this Agreement, together with all obligations of such
Person to comply with the terms of this Agreement.
"Minimum Gain Attributable to Partner Nonrecourse Debt" means "partner
nonrecourse debt minimum gain" as determined in accordance with Regulation
Section 1.704-2(i)(2).
"Nonrecourse Deductions" shall have the meaning set forth in Section
1.704-2(b)(1) and (c) of the Regulations.
"Partner Nonrecourse Deductions" shall have the meaning set forth in
Section 1.704-2(i)(1) of the Regulations.
"Partner Nonrecourse Debt" shall have the meaning set forth in Section
1.704-2(b)(4) of the Regulations.
"Partnership Minimum Gain" shall have the meaning set forth in Section
1.704-2(b)(2) and (d)(1) of the Regulations.
"Person" means any individual or Entity.
"Preferred Return Amount" means, at any time, the sum of the Annual
Preferred Return Amounts for the current fiscal year and all prior fiscal years.
"Profit or Losses" means, for each fiscal year or other applicable
period, an amount equal to the Company's taxable income or loss for such year or
period, determined in accordance with Section 703(a) of the Code (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Section 703(a) of the Code shall be included in taxable
income or loss), with the following adjustments:
(i) The computation of all items of income, gain, loss and
deduction shall be made without regard to the fact that items described
in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code are not includable
in gross income or are neither currently deductible nor capitalized for
federal income tax purposes;
(ii) In the event the Gross Asset Value of any Company asset
is adjusted pursuant to clause (ii) of the definition of "Gross Asset
Value," the amount of
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such adjustment shall be taken into account as gain or loss from the
disposition of such asset for purposes of computing Profit and Loss;
(iii) In lieu of the depreciation, amortization and other cost
recovery deductions that would otherwise be taken into account in
computing income or loss, there shall be taken into account
Depreciation for such fiscal year or other period;
(iv) Any income, gain or loss attributable to the taxable
disposition of any Company property shall be determined as if the
adjusted basis of such property as of such date of disposition were
equal in amount to the Company's Gross Asset Value with respect to such
property as of such date; and
(v) Any items specially allocated under Section 3.1(d) shall
not be taken into account.
"Theoretical Tax" means, with respect to an amount, the product of (a)
the amount and (b) the maximum combined United States federal, New York State
and New York City tax rate applicable to an individual resident or corporation
(whichever is higher) on ordinary income and net short-term capital gains or on
net long term capital gains, as applicable, after having given effect to the
deductibility for federal income tax purposes of state and local income taxes.
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