EXECUTION COPY
OPERATING AGREEMENT
OF
THE B. MANISCHEWITZ COMPANY, LLC
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OPERATING AGREEMENT
of
THE B. MANISCHEWITZ COMPANY, LLC
OPERATING AGREEMENT (as amended from time to time, this
"Agreement"), dated as of May 31, 1996, among The B. Manischewitz Company, LLC
(the "LLC") and each of the persons identified as a Member on Schedule A
attached hereto (such persons and their respective successors in interests
being hereinafter referred to as a "Member" and collectively, the "Members").
WHEREAS, the Members desire to form a limited liability company under
the Delaware Limited Liability Company Act.
NOW, THEREFORE, in consideration of the mutual covenants expressed
herein, the parties hereby agree as follows:
ARTICLE I
Definitions / Organization and Powers
1.1 Definitions: Rules of Construction. (a) When used
in this Agreement, the following capitalized terms shall have the meanings
ascribed to them below:
"Act" means the Delaware Limited Liability Company Act, 6
Del. C. ss. 18-101 et seq. (as amended from time to time),
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under common
control with such Person.
"Code" means the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.
"Control" (including, with correlative meanings, the terms
"controlling", "controlled by", and "under common control with") as used with
respect to any Person, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract
or otherwise.
"Depreciation" shall mean. with respect to any fiscal year,
an amount equal to the depreciation, amortization or other cost recovery
deduction allowable with respect to an asset for federal income tax purposes,
except that if the Gross Asset Value of the asset differs from its adjusted
tax basis, Depreciation shall be determined in accordance with the methods
used for federal income tax purposes and shall equal the amount that bears the
same ratio to the Gross Asset Value of such asset as the depreciation.
amortization or other cost recovery deduction computed for federal income
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tax purposes with respect to such asset bears to the adjusted federal income tax
bases of such asset, provided, however, that if any such asset that is
depreciable or amortizable has an adjusted federal income tax basis of zero,
the rate of Depreciation shall be as determined by the Members.
"Gross Asset Value" shall mean, with respect to any asset,
the asset's adjusted basis for federal income tax purposes, except that (i)
the Gross Asset Value of any asset contributed to the LLC shall be its gross
fair market value (as agreed upon by the Members) at the time such asset is
contributed or deemed contributed for purposes of computing Capital Accounts,
(ii) upon a contribution of money or other property to the LLC by a new or
existing Member as consideration for Units and upon a distribution of money or
other property to a retiring or continuing Member as consideration for Units,
the Gross Asset Value of all of the assets of the LLC shall be adjusted to
equal their respective gross fair market values (as determined by the
Managers), provided that adjustments pursuant to this clause (ii) shall be
made only if and to the extent that the Managers reasonably determine that
such adjustments are necessary or appropriate to reflect the relative economic
interests of the Members in the LLC. (iii) the Gross Asset Value of any asset
distributed in kind to any Member shall be the gross fair market value of such
asset (as determined by the Managers) on the date of such distribution, and
(iv) the Gross Asset Value of any asset determined pursuant to clauses (i) or
(ii) above shall thereafter be adjusted from time to time by the Depreciation
taken into account with respect to such asset for purposes of determining Net
Profit or Net Loss.
"Majority in Interest" means, at any time, the Members who
hold in the aggregate greater than 50% of the profits and capital interests of
the LLC.
"Member" means any person holding a Unit and who shall be
admitted as an additional or substituted Member pursuant to this Agreement, so
long as they remain Members.
"Net Profit" or "Net Loss" shall mean, with respect to any
fiscal year, the taxable income or loss of the LLC as determined for federal
income tax purposes, with the following adjustments:
(i) Such taxable income or loss shall be increased
by the amount, if any, of tax-exempt income received or accrued by the LLC;
(ii) Such taxable income or loss shall be reduced
by the amount, if any, of all expenditures of the LLC described in Section
705(a)(2)(B) of the Code, including expenditures treated as described therein
under ss. 1.704(b)(2)(iv)(i) of the Treasury Regulations;
(iii) If the Gross Asset Value of any asset is
adjusted pursuant to clause (ii) or (iii) of the definition of Gross Asset
Value, the amount of such adjustment shall be taken into account, immediately
prior to the event giving rise to such adjustment, as gain or loss from the
disposition of such asset for purposes of computing Net Profit or Net Loss;
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(iv) Gain or loss resulting from any disposition of
any asset with respect to which gain or loss is recognized for Federal income
tax purposes shall be computed by reference to the Gross Asset Value of the
asset disposed of, notwithstanding that such Gross Asset Value differs from the
adjusted tax basis of such asset; and
(v) In lieu of the depreciation, amortization, or
other cost recovery deductions taken into account in computing such taxable
income or loss, there shall be taken into account Depreciation for such fiscal
year.
Net profit and Net Loss shall not include any items specially allocated
pursuant to Section 6.3 or 6.4. Any such specially allocated items shall be
determined by applying rules analogous to those set forth above.
"Person" means any individual, partnership, limited
liability company, joint venture, corporation, association, trust, or any
other entity or organization, including a government or political subdivision
or any agency or instrumentality thereof.
"Unit" means, the ownership interest of a Member in the LLC,
consisting of (i) such Member's ownership of Units and right to receive a
portion of distributions, (ii) such Member's right to vote or grant or
withhold consents with respect to LLC matters as provided herein or the Act,
and (iii) such Member's other rights and privileges as herein provided.
1.2 Organization. The LLC has been formed by the filing of
its Certificate of Formation (as amended or restated from time to time, the
"Certificate") with the Secretary of State of the State of Delaware pursuant
to the Act. The Certificate may be restated by the Members as provided in the
Act or amended by the Chairman with respect to the address of the registered
office of the LLC in Delaware and the name and address of its registered agent
in Delaware. Other additions to or amendments of the Certificate shall be
authorized as provided in Section 2.5. The Chairman (as defined in Section
2.3(c)) shall deliver a copy of the Certificate and any amendment thereto to
any Member who so requests.
1.3 Purposes and Powers. The LLC shall have authority to
engage in any lawful business, purpose or activity permitted by the Act and it
shall possess and may exercise all of the powers and privileges granted by the
Act or which may be exercised by any person. together with any powers
incidental thereto, so far as such powers or privileges are necessary or
convenient to the conduct, promotion or attainment of the business, purposes
or activities of the LLC.
1.4 Principal Place of Business. The principal office and
place of business of the LLC shall initially be ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
1.5 Fiscal Year. The fiscal year of the LLC shall end on
December 31 in each year.
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ARTICLE II
Members
2.1 Members. The initial Members of the LLC and their
addresses shall be listed on Schedule A, and such schedule shall be amended
from time to time by the Chairman to reflect any adjustment in the number of
Units owned by each Member, new addresses for existing Members. and the
withdrawal of Members or the admission of additional Members pursuant to this
Agreement. Schedule A shall constitute the record list of the Members for all
purposes of this Agreement.
2.2 Admission of New Members. Additional persons may be
admitted to the LLC as Members and may participate in the profits, losses,
distributions and capital contributions of the LLC upon such terms as are
established by the Managers (as defined in Section 3. 1), which terms may
include, by amendment of this Agreement, the establishment of classes or
groups of Members having different relative rights, powers and duties,
including without limitation, rights and powers which are superior to those of
existing Members, or the right to vote as a separate class or group on
specified matters. New Members shall be admitted at the time when all
conditions to their admission have been satisfied, as determined by the
Managers, and their identity, ownership of Units and capital contributions
under Section 5.2 shall be established by amendment of Schedule A. Any person
awarded an option or granted a warrant under a plan approved by the Managers
and adopted by the Members shall automatically be admitted as a Member upon
the exercise of such option or warrant, and Schedule A shall be amended to
reflect such admission.
2.3 Meetings of Members.
(a) There shall not be any regular meetings of the
Members. Meetings of Members may be called for any proper purpose at any time
by any Member holding at least twenty percent (20%) of the outstanding Units.
The Member calling the meeting shall determine the date, time and place of each
meeting of Members, and written notice thereof shall be given by such Member to
each other Member not less than five (5) days nor more than sixty (60) days
prior to the date of the meeting. Notice shall be sent to Members of record on
the date when the meeting is called. The business of each meeting of Members
shall be limited to the purposes described in the notice.
(b) Persons holding not less than a Majority in
Interest of the Units shall constitute a quorum for the transaction of any
business at a meeting of Members. Members may attend a meeting in person or by
proxy. Members may also participate in a meeting by means of conference
telephone or similar communications equipment which permits all Members present
to hear each other. If less than a quorum of the Members is present, the meeting
may be adjourned by the chairman to a later date, time and place. Notice of an
adjourned meeting shall be given to all Members who did not attend the meeting
so adjourned. When an adjourned meeting is reconvened, any business may be
transacted which might have been transacted at the meeting as originally called.
(c) The chairman elected by the Managers from time
to time (the "Chairman") shall preside at each meeting of the Members and shall
determine the order of business
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and the procedures to be followed at such meeting of Members. The initial
Chairman shall be ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
(d) When any notice is required to be given to any
Member, a waiver thereof in writing signed by the Person entitled to such
notice, whether before, at, or after the time stated therein, shall be
equivalent to the giving of such notice.
2.4 Action Without a Meeting. Any action required or
permitted to be taken at any meeting of Members may be taken without a meeting
if one or more written consents to such action is signed by the holders of not
less than the minimum number of Units required to approve the action being
taken. Such written consents shall be delivered to the Members at the
principal office of the LLC within sixty (60) days after the first consent is
so delivered. The President shall give prompt notice to all Members who did
not consent of any action taken by written consent of Members without a
meeting.
2.5 Voting Generally. Unless otherwise required by the Act
or provided expressly in this Agreement, all actions, approvals and consents
to be taken or given by the Members under the Act, this Agreement or otherwise
shall require the affirmative vote or written consent of the holders of a
Majority in Interest of the Units, as determined by the number of Units held
by each Member specified on Schedule A, entitled to vote thereon. Except to
the extent expressly provided in this Agreement, no Member shall have any
right to vote, or to take any action under Section 2.4, with respect to any
matter including without limitation any merger, consolidation, reorganization,
recapitalization or sale of assets of the LLC.
2.6 Voting Rights. Except as otherwise provided in this
Agreement or required by applicable law, the Members shall be entitled to vote
on each matter on which members of an LLC formed pursuant to the Act have the
right to vote. Each Member shall be entitled to one vote for each Unit held by
such Member.
2.7 Liquidation. Upon any liquidation, dissolution or
winding up of the LLC, the Members shall be entitled to participate in
accordance with the positive capital account balances of the Members, and when
such balances equal zero, ratably in accordance with the number of Units
owned.
2.8 Limitation of Liability. Except as otherwise provided in
the Act, no Member of the LLC shall be obligated personally for any debt,
obligation or liability of the LLC or of any other Member solely by reason of
being a Member of the LLC. Except as otherwise provided in the Act, by law or
expressly in this Agreement, no Member shall have any fiduciary or other duty
to another Member with respect to the business and affairs of the LLC. No
Member shall have any responsibility to restore any negative balance in his
capital account or to contribute to or in respect of the liabilities or
obligations of the LLC except as required by the Act or other applicable law.
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2.9 Liability of a Member to the LLC. When a Member has
received a distribution made by the LLC in violation of this Operating
Agreement or the Act, the Member is liable to the LLC for the amount of such
distribution.
2.10 No Right to Withdraw. No Member shall have any right to
resign or withdraw from the LLC or to receive any distribution or the
repayment of his capital contribution, except distributions provided in
Section 6.1 and Article VII upon dissolution and liquidation of the LLC.
2.11 Rights to Information. Members shall have the right to
receive from the Chairman upon request a copy of the Certificate and of this
Agreement, as amended from time to time, and such other information regarding
the LLC as is required by the Act, subject to reasonable conditions and
standards established by the Members, which may include, without limitation.
withholding or restrictions on the use of confidential information.
2.12 Priority and Return of Capital. Except as expressly
provided in this Agreement, no Member shall have priority over any other
Member, either as to the return of capital contributions or as to profits,
losses or distributions; provided that this Section 2.14 shall not apply to
loans (as distinguished from capital contributions) which a Member has made to
the LLC.
2.13 Members and Managers Business with and Loans to the
LLC. With the consent of the Managers, any Member or Manager may loan money
to, act as surety for, or transact other business with the LLC, and, subject
to other applicable laws, shall have the same rights and obligations with
respect thereto as a Person who is not a Member or a Manager (including, but
not limited to, the payment of commissions and fees), but no such transaction
shall be deemed to constitute a capital contribution to the LLC and shall not
increase the capital account of any Member engaging in any such transaction.
2.14 Outside Activity. Subject to the terms of any
applicable employment contract or other agreement, each Member and Manager may
engage in any capacity (as owner, employee, consultant, or otherwise) in any
activity, whether or not such activity competes with or is benefitted by the
business of the LLC, without being liable to the LLC or the other Members or
Managers for any income or profit derived from such activity. No Member or
Manager shall be obligated to make available to the LLC or any other Member or
Manager any business opportunity of which such Member or Manager is or becomes
aware.
2.15 Record Date. For the purpose of determining Members
entitled to notice of or to vote at any meeting of Members or any adjournment
thereof, or Members entitled to receive payment of any distribution, or in
order to make a determination of Members for any other purpose, the date on
which notice of the meeting is sent or the date on which the resolution
declaring such distribution is adopted, as the case may be, shall be the
record date for such determination of Members. When a determination of Members
entitled to vote at any meeting of Members has been made as provided in this
Section, such determination shall apply to any adjournment thereof.
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ARTICLE III
Management
3.1 Management. The business and affairs of the LLC shall be
managed by a board of managers (each a "Manager," and collectively, the
"Managers"). The Managers shall direct, manage and control the business of the
LLC to the best of such Managers' ability and, except as expressly provided in
this Agreement to the contrary, each Manager shall have full and complete
authority, power and discretion to make any and all decisions and to do any
and all things which the Managers shall deem to be reasonably required in
light of the LLC's business and objectives, and, except as may be otherwise
provided by the Managers, any Manager, Officer (appointed in accordance with
Section 3.8 hereof) and any other person designated by any Manager shall have
the power to make contracts, enter into transactions, and make and obtain any
commitments on behalf of the LLC.
3.2 Number, Tenure, Removal, Oualifications. The initial
number of Managers of the LLC shall be six. The initial Managers shall be
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇. The Managers shall be appointed by a
Majority in Interest of the Members. Each Manager shall hold office until so
removed by a Majority in Interest of the Members, or until such Manager's
death, dissolution or resignation. Vacancies shall be filled by a Majority In
Interest of the Members. The number of Managers of the LLC may be increased or
decreased by a Majority in Interest of the Members.
A Manager need not be a resident of the State of Delaware
nor a Member.
3.3 Liability for Certain Acts. A Manager of the LLC shall
perform such management duties in good faith, in a manner such Manager
reasonably believes to be in the best interests of the LLC, and with such care
as an ordinarily prudent person in a like position would use under similar
circumstances. A Person who so performs such Person's duties shall not have
any liability by reason of being or having been a Manager of the LLC.
In performing the management duties of a Manager, a Manager
shall be entitled to rely on information, opinions, reports or statements,
including financial statements and other financial data, in each case prepared
or presented by persons and groups listed in Sections 3.3(a), (b) and (c)
unless such Manager has knowledge concerning the matter in question that would
cause such reliance to be unwarranted:
(a) one or more employees or other agents of the
LLC whom the Manager reasonably believes to be reliable and competent in the
matters presented;
(b) counsel, public accountants, or other persons
as to matters that the Manager reasonably believes to be within such persons'
professional or expert competence; or
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(c) a committee, upon which such Manager does not
serve, duly designated in accordance with the provisions of this Agreement, as
to matters within its designated authority, which committee the Manager
reasonably believes to merit confidence.
A Manager does not, in any way, guarantee the return of the
Members' capital contributions or a profit for the Members from the operations
of the LLC. A Manager shall not be responsible to any Member because of a loss
of their investment in the LLC or a loss in the operations of the LLC, unless
the loss shall have been the result of the Manager not acting in good faith as
provided in this Section 3.3. The Managers shall be entitled to any other
protection afforded to Managers under the Act.
3.4 Managers Have No Exclusive duty to the LLC. A Manager
shall not be required to manage the LLC as such Manager's sole and exclusive
function, and each Manager may have other, business interests and may engage
in other activities in addition to those relating to the LLC.
3.5 Resignation. Any Manager may resign at any time by
giving written notice to the Chairman, or in the case of Resignation of the
Chairman, the remaining Managers. The resignation of any Manager shall take
effect upon receipt of notice thereof or at such later time as shall be
specified in such notice; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
3.6 Management Fees. The Managers shall be entitled to
receive fees or other compensation for serving as Managers as may be approved
from time to time by the Managers. In addition, (i) consistent with the terms
of this Agreement and applicable law, the LLC shall disburse the Managers for
all costs incurred by them in connection with their service as Managers, and
(ii) Managers may receive compensation as employees of or consultants to the
LLC. The fees hereunder are intended to constitute payments to partners other
than in their capacity as such under Section 707(a) of the Code.
3.7 Tax Matters Partner. The LLC hereby designates MANO
Holdings I, LLC as the "Tax Matters Partner" for the purposes of Code Section
6231 and the regulations promulgated thereunder. The Tax Matters Partner shall
promptly advise each Member of any audit proceedings to be conducted with
respect to the LLC.
3.8 Officers. The officers of the LLC shall be a Chief
Executive Officer, a President, one or more Vice-presidents, a Secretary, one
or more Assistant Secretaries, a Treasurer and one or more Assistant
Treasurers. The LLC also may have, at the discretion of the Managers, such
other officers as may be appointed in accordance with the provisions of this
Section 3.8. Any number of offices may be held by the same person. Officers
may, but need not, be Managers. Officers shall have the power to bind the LLC
and enter into contracts and other agreements on behalf of the LLC.
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(a) Election of Officers. The officers of the LLC
shall be chosen by the Managers, and each shall serve at the pleasure of the
Managers, subject to the rights, if any, of an officer under any contract of
employment.
(b) Additional Officers. The Managers may appoint
and may empower the Chief Executive Officer or the President to appoint such
additional offices as the business of the LLC may require, each of whom shall
hold office for such period, have such authority and perform such duties as are
provided in this Agreement or as the Managers (or, to the extent the power to
prescribe authorities and duties of additional officers is delegated to him or
her, the Chief Executive Officer or the President) may from time to time
determine.
(c) Removal and Resignation of Officers. Subject
to the rights, if any, of an officer under any contract of employment, any
officer may be removed, with or without cause by the Managers or by such
officer, if any, upon whom such power of removal may be conferred by the
Managers. Any officer may resign at any time by giving written notice to the
Managers. Any resignation shall take effect at the date of the receipt of that
notice or at any later time specified in that notice, and unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the LLC under any contract to which the officer is a party.
(d) Vacancies in Office. A vacancy in any office
because of death, resignation, removal, disqualification or other cause shall be
filled by the Managers. The Chief Executive Officer or the President may make
temporary appointments to a vacant office reporting to the Chief Executive
Officer or the President pending action by the Managers.
(e) Chief Executive Officer. The Chief Executive
Officer shall, subject to the control of the Managers, share with the President
the general supervision, direction and control of the business and the offices
of the LLC. He or she shall have the general power and duties of management
usually vested in the office of chief executive officer of a corporation and
shall have such other powers and duties as may be prescribed by the Managers or
this Agreement.
(f) President. The President shall, subject to the
control of the Managers, share with the Chief Executive Officer the general
supervision, direction and control of the business and the officers of the LLC.
He or she shall have the general powers and duties of management usually vested
in the office of President of a corporation and shall have such other powers and
duties as may be prescribed by the Managers or this Agreement.
(g) Secretary. The Secretary shall keep or cause
to be kept at the principal place of business of the LLC, or such other place as
the Managers may direct, a book of minutes of all meetings and actions of the
Managers, committees or other delegates of the Managers and the Members. The
Secretary shall keep or cause to be kept at the principal place of business of
the LLC a register or a duplicate register showing the names of all Members and
their addresses, the class and percentage Units in the LLC held by each, the
number and date of certificates issued for the same, and
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the number and date of cancellation of every certificate surrendered for
cancellation. The Secretary shall give or cause to be given notice of all
meetings of the Members and of the Managers (or committees or other delegates
thereof) required to be given by this Agreement or by applicable law and shall
have such other powers and perform such other duties as may be prescribed by
the Managers, the Chief Executive Officer or the President or by this
Agreement. The Assistant Secretary, or if there be more than one, the
Assistant Secretaries in the order determined by the Managers, shall, in the
absence or disability of the Secretary, perform the duties and exercise the
powers of the Secretary and shall perform such other duties and have such
other powers as the Managers, the Chief Executive Officer, the President, or
Secretary, may, from time to time, prescribe.
(h) Treasurer. The Treasurer shall be the chief
financial officer of the LLC and shall keep and maintain or cause to be kept and
maintained, adequate and correct books and records of accounts of the properties
and business transactions of the LLC. The books of account shall at all
reasonable times be open to inspection by any Manager. The Treasurer shall
deposit all monies and other valuables in the name and to the credit of the LLC
with such depositaries as may be designated by the Managers. He or she shall
disburse the funds of the LLC as may be ordered by the Managers, shall render to
the Chief Executive Officer, the President and the Managers, whenever they
request it, an account of all of his or her transactions as chief financial
officer and of the financial conditions of the LLC and shall have other powers
and perform such other duties as may be prescribed by the Managers, the Chief
Executive Office or the President or by this Agreement. The Assistant Treasurer,
or if there be more than one, the Assistant Treasurers in the order determined
by the Managers, shall. in the absence or disability of the Treasurer, perform
the duties and exercise the powers of the Treasurer and shall perform such other
duties and have such other powers as the Managers, the Chief Executive Officer,
the President, or Treasurer, may, from time to time. prescribe.
ARTICLE IV
Indemnification
4.1 Right to Indemnification. Except as limited by law and
subject to the provisions of this Article, each Member, Officer and Manager
(an "Indemnitee") shall be entitled to be indemnified and held harmless
against any and all losses, liabilities and expenses, including attorneys'
fees, arising from proceedings in which the Indemnitee may be involved, as a
party or otherwise, by reason of its being a Member or Manager of the LLC, or
by reason of its involvement in the management of the affairs of the LLC,
whether or not it continues to be such at the time any such loss, liability or
expense is paid or incurred. The rights of indemnification provided in this
Article will be in addition to any rights to which the Indemnitee may
otherwise be entitled by contract or as a matter of law and shall extend to
its successors and assigns. In particular, and without limitation of the
foregoing, the Indemnitee shall be entitled to indemnification by the LLC
against reasonable expenses (as incurred), including attorneys' fees, incurred
by the Indemnitee in connection with the defense of any action to which the
Indemnitee may be made a party to the fullest extent permitted under the
provisions of the Act or any other applicable statute.
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4.2 Advance Payments. Except as limited by law, expenses
incurred by the Indemnitee in defending any proceeding, including a proceeding
by or in the right of the LLC, shall be paid by the LLC in advance of final
disposition of the proceeding upon receipt of a written undertaking to repay
such amount if such Indemnitee is determined pursuant to this Article or
adjudicated to be ineligible for indemnification, which undertaking shall be
an unlimited general obligation of the Indemnitee but need not be secured and
may be accepted without regard to the financial ability of the Indemnitee to
make repayment.
4.3 Heirs and Personal Representatives. The indemnification
provided by this Article shall inure to the benefit of the heirs and personal
representatives of each Indemnitee.
4.4 Non-Exclusivity. The provisions of this Article shall
not be construed to limit the power of the LLC to indemnify its Members,
officers, employees or agents to the full extent permitted by law or to enter
into specific agreements, commitments or arrangements for indemnification
permitted by law. The absence of any express provision for indemnification
herein shall not limit any right of indemnification existing independently of
this Article.
4.5 Amendment. No amendment or repeal of the provisions of
this Article which adversely affects the rights of any Indemnitee under this
Article with respect to the acts or omissions of such Indeminitee at any time
prior to such amendment or shall apply to such Indemnitee without the written
consent of such Indemnitee.
ARTICLE V
Contributions and Capital Accounts
5.1 Capital Accounts. A separate capital account ("Capital
Account") shall be maintained for each Member, including a Member who
hereafter acquires an interest in the LLC, in accordance with the rules of
Section 704(b) of the Code and Treasury Regulation Sections 1. 704-1(b) and
1.704-2, including without limitation, the provisions regarding qualified
income offsets, non-recourse deductions and minimum gain.
5.2 Capital Contributions. As an initial capital
contribution to the LLC, MANO Holdings Corporation hereby contributes an
undivided interest 100% of its assets and liabilities and KBMC Acquisition
Company, L.P. hereby contributes $15,000,000. In exchange for such
contribution, each Member shall receive that number of Units indicated on
Schedule A. No Member shall be required to make any additional contribution to
the capital of the LLC.
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ARTICLE VI
Distributions and Allocations
6.1 Distribution of LLC Funds. The holders of a Majority in
Interest of the then outstanding Units may in addition to any other
distributions required to be made hereunder, at any time cause the LLC to
distribute cash to the Members in proportion to the ratio that the number of
Units held by such Member bears to the total number of Units then outstanding;
provided that, in the event if it is anticipated that the Members will
recognize taxable income with respect to the LLC for any year, the Managers
shall make a good faith estimate of the amount of such taxable income to be
recognized by each of the Members, and distributions of LLC cash shall be made
to each of the Members (at such times as may be appropriate to permit timely
payment of taxes, including estimated taxes) in an amount equal to (x) the
appropriate effective tax rate (as determined by the Managers) applicable to
such Member or, in the case of taxable income that is passed through to the
shareholders or partners of a Member that is a "Subchapter S" corporation or a
partnership, such Member's shareholders or partners (in each case, such
Member's "Effective Tax Rate"), (y) multiplied by the taxable income
recognized by such Member. This Section 6.1 shall apply to all distributions
other than distributions upon liquidation.
6.2 Distribution of Assets in Kind. No Member shall have the
right to require any distribution of any assets of the LLC in kind. If any
assets of the LLC are distributed in kind, such assets shall be distributed on
the basis of their fair market value as determined by the holders of a
Majority in Interest of the then outstanding Units.
6.3 Allocation of Net Profit and Net Loss. Allocation of Net
Profit and Net Loss shall be made to the Members in accordance with Sections
704(b) and (c) of the Code. Unless otherwise required, such allocations shall
be made to the Members in proportion to the ratio that the number of Units
held by such Member bears to the total number of Units then outstanding.
6.4 Certain Tax Matters.
(a) Except as otherwise provided herein, all
items of LLC income, gain, deduction and loss shall be allocated among the
Members in the same proportion as they share in the Net Profit and Net Loss to
which such items relate. Any credits against income tax shall be allocated in
proportion to the Members' respective numbers of Units.
(b) Income, gain, loss or deductions of the LLC
shall, solely for income purposes, be allocated among the Members in accordance
with Section 704(c) of the Code and the Treasury Regulations promulgated
thereunder, so as to take account of any difference between the adjusted basis
of the assets of the LLC and their respective Gross Asset Values in accordance
with the traditional method with curative allocations set forth in Section
1.704-3(c) of the Treasury Regulations.
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ARTICLE VII
Transfers of Interests
7.1 General Restrictions on Transfer. No transfer of all or
any part of a Member's Units shall be permitted other than (i) pursuant to the
terms of the exercise by Banque Indosuez, as collateral agent, under the terms
of the pledge agreement dated as of May 31, 1996 or (ii) for so long as MANO
Holdings Corporation and KBMC Acquisition Company, L.P. are Members, with the
prior written consent of the non-transferring Members, which consent may be
withheld in their sole discretion; provided that at such time as MANO Holdings
Corporation and KBMC Acquisition Company, L.P. are no longer Members, no
transfers shall be permitted pursuant to this clause (ii).
ARTICLE VIII
Dissolution, Liquidation, and Termination
8.1 Dissolution. The LLC shall dissolve and its affairs
shall be wound up as provided for in Section 18-801 of the Act. If earlier,
the LLC shall terminate on the bankruptcy of any Member.
8.2 Liquidation and Termination. On dissolution of the LLC,
the Managers shall act as liquidating trustee or may appoint one or more
Members as liquidating trustee. The liquidating trustee shall proceed
diligently to wind up the affairs of the LLC and make final distributions as
provided herein and in the Act. The costs of liquidation shall be borne as a
LLC expense. Until final distribution, the liquidating trustee shall continue
to operate the LLC properties with all of the power and authority of the
Manager. The steps to be accomplished by the liquidating trustee are as
follows:
(a) as promptly as possible after dissolution and
again after final liquidation, the liquidating trustee shall cause an accounting
to be made by a firm of independent public accountants of the LLC'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;
(b) the liquidating trustee shall pay, satisfy or
discharge from LLC funds all of the debts, liabilities and obligations of the
LLC (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 escrow fund for contingent
liabilities in such amount and for such term as the liquidating trustee may
reasonably determine); and
(c) all remaining assets of the LLC shall be
distributed to the Members pursuant to Section 2.9.
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8.3 Certificate of Cancellation. On completion of the
distribution of LLC assets as provided herein, the LLC shall be terminated, and
the Managers acting under Section 8.2 (or such other person or persons as the
Act may require or permit) shall file a Certificate of Cancellation with the
Secretary of State of Delaware under the Act, cancel any other filings made
pursuant to Section 1.1, and take such other actions as may be necessary to
terminate the existence of the LLC.
ARTICLE IX
Certificates
9.1 Issuance of LLC Certificates. The Units of each Member
in the LLC shall be represented by an LLC Certificate which shall be in the
form set forth on the attached Exhibit A. Upon the execution of this Agreement
and the payment of the capital contributions by the Members pursuant to
Section 5.2 hereof, the Managers shall cause the LLC to issue one or more LLC
Certificates in the name of each Member certifying that the Person named
therein is the record holder of the Units set forth herein.
9.2 Transfer of LLC Certificates. A Unit which is
transferred in accordance with the terms of Section 7.1 of this Agreement
shall be transferable on the books of the LLC by the record holder thereof in
person or by such record holder's duly authorized attorney, but, except as
provided in Section 9.3 hereof with respect to lost, stolen or destroyed
certificates, no transfer of a Unit shall be entered until the previously
issued LLC Certificate representing such Unit shall have been surrendered to
the LLC and canceled and a replacement LLC Certificate issued to the assignee
of such Unit in accordance with such procedures as the Managers may establish.
The Managers shall issue to the transferring Member a new LLC Certificate
representing the Units not being transferred by the Member, in the event such
Member only transferred some, but not all, of the Units represented by the
original LLC Certificate. Except as otherwise required by law, the LLC shall
be entitled to treat the record holder of an LLC Certificate on its books as
the owner thereof for all purposes regardless of any notice or assertion to
the contrary.
9.3 Lost, Stolen or Destroyed Certificates. The LLC shall
issue a new LLC Certificate in place of any LLC Certificate previously issued
if the record holder of the LLC Certificate:
(a) makes proof by affidavit, in form and
substance satisfactory to the Managers, that a previously issued LLC Certificate
has been lost, destroyed or stolen;
(b) the issuance of a new LLC Certificate before
the LLC has notice that the LLC Certificate has been acquired by a purchaser for
value in good faith and without notice of an adverse claim;
(c) if requested by the Managers, delivers to the
LLC a bond, in form and substance reasonably satisfactory to the Managers, with
such surety or sureties and with fixed or open
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penalty as the Managers may direct, in their reasonable discretion. to
indemnify the LLC against any claim that may be made on account of the
alleged loss, destruction or theft of the LLC Certificate; and
(d) satisfies any other reasonable requirements
imposed by the Managers.
If the Member fails to notify the LLC within a reasonable
time after it has notice of the loss, destruction or theft of an LLC
Certificate, and a transfer of the Unit represented by the LLC Certificate is
registered before receiving such notification, the LLC shall have no liability
with respect to any claim against the LLC for such transfer or for a new LLC
Certificate.
ARTICLE X
General Provisions
10.1 Notices. All notices, requests, or consents provided
for or permitted to be given under this Agreement must be in writing and shall
be deemed effective, unless earlier received, (a) if given by facsimile, when
such facsimile is transmitted to the applicable party at the facsimile number
specified on Schedule A, the appropriate answer back is received and a copy is
sent by a nationally recognized overnight courier service to such party at the
address indicated on Schedule A, (b) three (3) days after being mailed by
certified mail, return receipt requested, postage prepaid by the applicable
party at the address indicated on Exhibit A, (c) one (1) business day after
being sent by a nationally recognized overnight courier service to the
applicable party at the address indicated on Exhibit A, or (d) when delivered
either by hand or by messenger to the applicable party at the address
indicated on Exhibit A.
10.2 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 any obligations with respect to the LLC 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 with respect
to the LLC. Failure on the part of a person to complain of any act of any
person or to declare any person in default with respect to the LLC,
irrespective of how long that failure continues, does not constitute a waiver
by that person of his rights with respect to that default until the applicable
statute-of-limitations period has run.
10.3 Amendment or Modification. This Agreement may be
amended or modified from time to time only by a written instrument signed by
the Members holding a Majority in Interest of the then outstanding Units;
provided, however, that (a) an amendment or modification reducing a Member's
Units (other than to reflect changes otherwise provided by this Agreement) is
effective only with that Member's consent, and (b) an amendment or
modification reducing the required number of Units for any consent or vote in
this Agreement is effective only with the consent or vote of Members having
the required number of Units theretofore required.
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10.4 Binding Effect. Subject to the restrictions on
transfers set forth in this Agreement, this Agreement is binding on and inures
to the benefit of each of the Members and their respective heirs, legal
representatives successors and assigns.
10.5 Governing Law, Severability. This Agreement shall be
governed by, and construed in accordance with the domestic laws of the State
of Delaware, without giving effect to any choice of law or conflict of law
provision (whether of the State of Delaware or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the
State of Delaware. 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 shall be
enforced to the fullest extent permitted by law.
10.6 Specific Performance. The parties agree that the
failure of any party to perform the obligations provided by this Agreement
could result in irreparable damage to the other parties, and that monetary
damages alone would not be adequate to compensate the nondefaulting party for
its or his injury. Any party shall therefore be entitled, in addition to any
other remedies that may be available, including money damages, to obtain
specific performance of the terms of this Agreement. If any action is brought
by any party to enforce this Agreement, any party against which the action is
brought shall waive the defense that there is an adequate remedy at law.
10.7 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 actions, as requested by the Chairman.
10.8 Waiver of Certain Rights. Each Member irrevocably
waives any right it may have to maintain any action for dissolution of the LLC
or for partition of the LLC's property.
10.9 Notice to Members of Provisions of this Agreement. By
executing this Agreement, each Member acknowledges that it has actual notice
of (a) all of the provisions of this Agreement, including, without limitations
the restrictions on the transfer of Units set forth in Article VII, and (b)
all of the provisions of the Certificate. Each Member hereby agrees that this
Agreement constitutes adequate notice of all such provisions, and each Member
hereby waives any requirement that any further notice thereunder be given.
10.10 Counterparts. This Agreement may be executed in any
number of counterparts each of which shall constitute an original but together
shall constitute but one instrument.
* * * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under as of the date set forth above.
MANO HOLDINGS CORPORATION, a Delaware
corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, Vice President
KBMC ACQUISITION COMPANY, L.P.
By: KBMC Management L.P., its general partner
By: KBMC G.P., Inc.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, V.P.
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SCHEDULE A
NAMES, ADDRESSES, INITIAL CAPITAL CONTRIBUTION
AND INTERESTS OF MEMBERS
Members Interest Units
------- -------- -----
MANO HOLDINGS CORPORATION 39.574% 3,957.4
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
KBMC Acquisition Company, L.P. 60.426% 6,042.6
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE A
(POST-MASTER CONTRIBUTION AGREEMENT)
Interest Units
-------- -----
MANO HOLDINGS I, LLC 99% 9,900
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
MANO HOLDINGS II, LLC 1% ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
EXHIBIT B
(FACE OF CERTIFICATE)
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON
_______________, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION
THEREUNDER. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER CONTAINED IN THE ISSUER'S OPERATING
AGREEMENT, A COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE BY THE HOLDER HEREOF
AT THE COMPANY'S PRINCIPAL PLACE OF BUSINESS.
CERTIFICATE FOR LIMITED LIABILITY COMPANY INTEREST
IN
THE B. MANISCHEWITZ COMPANY, LLC
Certificate No.__________ ___________Units
_________________________________as a Manager of The B. Manischewitz Company,
LLC, a Delaware limited liability company (the "LLC") hereby certifies that
______________is the holder of ____________ Units, as that term is defined in
the Operating Agreement of the LLC, dated as of ____________, as amended and
restated from time to time (the "Agreement") (copies of which are on file at the
principal office of the LLC).
This Certificate is not negotiable or transferable except as provided in the
Agreement, and any such transfer will be valid only upon delivery of this
Certificate, together with an assignment in the form set forth on the reverse
hereof (or otherwise acceptable to the Managers and sufficient to convey an
interest in the LLC pursuant to the Delaware Limited Liability Company Act, as
it may be amended and in effect from time to time, or any successor statute
thereto) and the Agreement, duly executed, to the Managers of the LLC.
THE B. MANISCHEWITZ COMPANY, LLC, a Delaware
limited liability company
Dated:______________________ By:____________________________________________
Print Name:_______________________________
Its: Manager
B-1
(REVERSE OF CERTIFICATE)
ASSIGNMENT OF LIMITED LIABILITY COMPANY INTEREST
IN
THE B. MANISCHEWITZ COMPANY, LLC
FOR VALUE RECEIVED, the undersigned ("Assignor") hereby assigns, conveys,
sells and transfers unto
_________________________________
("Assignee")
______________________________________ _____________________________________
(Please insert Social Security or other _____________________________________
identifying number of Assignee) __________________________________
(Please print or typewrite
name address of Assignee)
all rights and interest of Assignor in ____________ Units evidenced hereby
and directs that all future distributions and allocations with respect to such
specified assigned Units be paid or allocated by the LLC to such Assignee. The
Assignor hereby irrevocably constitutes and appoints the Managers, or any of
them, as Assignor's attorney-in-fact with full power of substitution in the
premises to transfer the same on the books of the LLC.
Dated:________________________ _____________________________________________
Signature of Assignor
Note: The signature to any assignment must correspond with the name as
written upon the face of this Certificate, in every particular,
without alteration or enlargement or any change whatever. If the
assignment is executed by an attorney, executor, administrator,
trustee or guardian, the person executing the assignment must give
such person's full title in such capacity, if not on file with the
LLC or its transfer agent, must be forwarded with this Certificate.
The undersigned, a Manager of the LLC, hereby consents to this Assignment
pursuant to the Agreement.
THE B. MANISCHEWITZ COMPANY, LLC, a Delaware
limited liability company
Dated:____________________ By:__________________________________________
Print Name:_____________________________
Its: Manager
THE INTEREST AND UNITS EVIDENCED HEREBY ARE SUBJECT TO ALL TERMS AND
CONDITIONS OF THE AGREEMENT AND UNLESS AND UNTIL ADMITTED TO THE LLC AS A
MEMBER . NO ASSIGNEE SHALL BE ENTITLED TO ANY OF THE RIGHTS, POWERS OR
PRIVILEGES OF THE ASSIGNOR EXCEPT THAT ASSIGNEE SHALL BE ENTITLED TO THE
DISTRIBUTIONS PAID AND ALLOCATIONS MADE WITH RESPECT TO SUCH INTEREST AS
DIRECTED BY THE ASSIGNOR ABOVE.
B-2
