EXHIBIT 10.4
OPERATING AGREEMENT
FOR
SFF PRODUCTION, LLC
A Delaware Limited Liability Company
This OPERATING AGREEMENT (this "Agreement") of SFF PRODUCTION, LLC (the
"Company"), effective as of December 4, 2007, is (a) adopted by the Managers (as
defined in Section 5.01), (b) executed and agreed to, for good and valuable
consideration, by the Members (as defined in Section 2.01), and (c) supersedes
and replaces all prior Operating Agreements adopted for the Company.
Article 1
Organization
1.01. Formation. The Company has been organized as a Delaware limited
liability company by the filing of a Certificate of Formation (the
"Certificate") under and pursuant to the Delaware Limited Liability Company Act
(as amended from time to time, the "Act").
1.02. Name. The name of the Company is "SFF PRODUCTION, LLC" and all
Company business must be conducted in that name, or such other names that may be
selected by the Managers and that comply with applicable law.
1.03. Registered Office; Registered Agent; Offices. The registered
office and registered agent of the Company in the State of Delaware shall be as
specified in the Certificate or as designated by the Managers in the manner
provided by applicable law. The offices of the Company shall be at such places
as the Managers may designate, which need not be in the State of Delaware.
1.04. Purposes. The purpose of the Company is to engage in any and all
lawful activities for which limited liability companies may be organized.
1.05 Foreign Qualification. Prior to the Company's conducting business
in any jurisdiction other than Delaware, the Managers shall cause the Company to
comply with all requirements necessary to qualify the Company as a foreign
limited liability company in that jurisdiction.
1.06. Term. The term of the Company commenced on the filing of the
Certificate with the Secretary of State of Delaware and shall be perpetual
unless dissolved as provided in this Agreement.
1.07. No State-Law Partnership. The Members intend that the Company not
be a partnership (including a limited partnership) or joint venture, and that no
Member be a partner or joint venturer of any other Member, for any purposes
other than applicable tax laws, and this Agreement may not be construed to
suggest otherwise.
Article 2
Membership; Dispositions of Interests
2.01. Members; Sharing Ratios. The members of the Company ("Members")
are the persons or entities ("Persons") executing this Agreement as of the date
hereof as members and each Person that is hereafter admitted to the Company as a
member in accordance with this Agreement. If a Member shall have made a
Disposition (as defined in Section 2.02) of all or any portion of its interest
in the Company ("Membership Interest"), but shall have retained any rights
therein, then solely with respect to the Membership Interest (or portion
thereof) so disposed, all references to "Member" that appear in Article 4 and
Section 9.02(b) shall be deemed to refer to the assignee of such Membership
Interest. The sharing percentage of each Member executing this Agreement (the
"Sharing Ratio") is set forth on Exhibit A.
2.02. Dispositions of Membership Interests. A Member may not make a
sale, assignment, transfer, conveyance, gift, bequest, exchange, or other
disposition (voluntarily, involuntarily, or by operation of law) ("Disposition")
of all or any portion of its Membership Interest, other than a Disposition to a
Permitted Transferee (as hereinafter defined), a Disposition to another Member
in accordance with Article 7, or a Disposition resulting from the death of such
Member to a person who is not a Permitted Transferee (each a "Permitted
Disposition"), except upon compliance with Section 7.03 and with the consent of
a Majority Interest (as defined in Section 5.07), calculated without reference
to the Member desiring to make such Disposition, and (without limiting the
generality of Section 5.07) each Member's consent may be given or withheld in
the Member's sole and absolute discretion, with or without cause, and subject to
such conditions as such Member shall deem appropriate ("Sole Discretion"). Any
attempted Disposition of all or any portion of a Membership Interest, other than
in strict accordance with this Section 2.02, shall be null and void ab initio. A
Permitted Transferee who is a natural person shall be admitted to the Company as
a Member without the consent of the other Members and a Permitted Transferee who
is not a natural person shall have the right upon its designation of a single
representative with full power and authority to act on behalf of the Permitted
Transferee to be admitted to the Company as a Member without the consent of the
other Members. Except for a Permitted Transferee, a Person to whom a Membership
Interest is Disposed may be admitted to the Company as a Member only with the
unanimous consent of the other Members. In connection with any Disposition of a
Membership Interest or any portion thereof, and any admission of an assignee as
a Member, the Member making such Disposition and the assignee shall furnish the
other Members with such documents regarding the Disposition as a Majority
Interest may request (in form and substance satisfactory to a Majority
Interest), including a copy of the Disposition instrument, a ratification by the
assignee of this Agreement (if the assignee is to be admitted as a Member), a
legal opinion that the Disposition complies with applicable federal and state
securities laws, and a legal opinion that the Disposition will not result in the
Company's termination under Section 708 of the Internal Revenue Code of 1986 (as
amended from time to time, the "Code"). "Permitted Transferee" for purposes of
this Section 2.02 shall mean (i) a partner, member, and/or shareholder of a
Member, (ii) a Member's children, the estate of a deceased Member, the
beneficiaries under such deceased Member's last will and testament, a spouse of
a Member, a trust created by a Member or under a deceased Member's last will and
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testament for the benefit of such Member's immediate family (including a
charitable remainder trust), or (iii) a corporation, limited liability company,
or a partnership controlled by a Member or by a Member-controlled entity. The
Members agree that breach of the provisions of this Section 2.02 may cause
irreparable injury to the Company for which monetary damages (or other remedy at
law) are inadequate in view of (i) the complexities and uncertainties in
measuring the actual damages that would be sustained by reason of the failure of
a Member to comply with such provisions, and (ii) the uniqueness of the Company
business and the relationship among the Members. Accordingly, the Members agree
that the provisions of this Section 2.02 may be enforced by specific
performance.
2.03. Encumbrances of Membership Interests. A Member may not pledge,
mortgage, subject to a security interest or lien, or otherwise encumber
(voluntarily, involuntarily, or by operation of law) all or any portion of its
Membership Interest without the consent of the Managers and a Majority Interest,
calculated without reference to the Member desiring to make such encumbrance.
2.04. Creation of Additional Membership Interests. Additional
Membership Interests may be created and issued to existing Members or to other
Persons, and such other Persons may be admitted to the Company as Members, at
the direction of the Managers and a Majority Interest, on such terms and
conditions, and with such Sharing Ratios and commitments, as the Managers and a
Majority Interest may determine at the time of admission. The Managers may
reflect the admission of any new Members or the creation of any new class or
group of Members in an amendment to this Agreement that need be executed only by
the Managers.
2.05. Liability to Third Parties. Unless expressly agreed to in writing
by the Member or Manager, as the case may be, no Member or Manager shall be
liable for the debts, obligations or liabilities of the Company.
2.06. Spouses of Members. Spouses of the Members do not become Members
as a result of such marital relationship. Each spouse of a Member (who is not
himself or herself a Member) has executed this Agreement and does acknowledge
and understand that this Agreement specifically covers all interest in the
Company now owned, hereafter acquired by, or otherwise attributed to their
spouse.
2.07. Expulsion. A Member may not be expelled from the Company.
Article 3
Capital Contributions
3.01. Initial Contributions. Upon execution of this Agreement by each
Member, such Member shall have made, or shall contemporaneously make, the
contributions to the capital of the Company ("Capital Contributions") described
for that Member in Exhibit A, and reflected in the books of account established
for the Company.
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3.02. Subsequent Contributions. Without creating any rights in favor of
any third party, each Member shall contribute to the Company that Member's
Sharing Ratio of such additional capital that in the judgment of the Managers
and a Majority Interest is necessary to enable the Company to cause the assets
of the Company to be properly operated and maintained and to discharge its
costs, expenses, obligations, and liabilities.
3.03. Failure to Contribute. (a) If a Member does not timely contribute
all or any portion of a Capital Contribution that Member is required to make as
provided in this Agreement, the Managers may cause the Company to exercise, on
notice to that Member (the "Delinquent Member"), one or more of the following
remedies:
(i) taking such action (including court proceedings),
at the cost and expense of the Delinquent Member, as the Managers may deem
appropriate to obtain payment by the Delinquent Member of the portion of the
Delinquent Member's Capital Contribution that is in default, together with
interest thereon from the date that the Capital Contribution was due until the
date that it is made, at a rate per annum equal to the lesser of (A) the maximum
rate permitted by applicable law or (B) 2% plus the minimum prime lending rate
as published in the Money Rates Section of The Wall Street Journal with
adjustments to be made on the same date as any change in that rate;
(ii) exercising the rights of a secured party under
the Uniform Commercial Code of the State of Delaware, as more fully set forth in
Section 3.03(b); or
(iii) exercising any other rights and remedies
available at law or in equity.
(b) Each Member grants to the Company, as security for the
payment of all Capital Contributions that Member has agreed to make, a security
interest in and a general lien on its Membership Interest and the proceeds
thereof, all under the Uniform Commercial Code of the State of Delaware. On any
default in the payment of a Capital Contribution, the Company is entitled to all
the rights and remedies of a secured party under the Uniform Commercial Code of
the State of Delaware with respect to the security interest granted in this
Section 3.03(b). Each Member shall execute and deliver to the Company all
financing statements and other instruments that the Managers may request to
effectuate and carry out the preceding provisions of this Section 3.03(b). At
the option of the Managers, this Agreement or a carbon, photographic, or other
copy hereof may serve as a financing statement.
3.04. Return of Contributions. A Member is not entitled to the return
of any part of its Capital Contributions or to be paid interest in respect of
either its capital account or its Capital Contributions. An un-repaid Capital
Contribution is not a liability of the Company or of any Member. A Member is not
required to contribute or to lend any cash or property to the Company to enable
the Company to return any Member's Capital Contributions.
3.05. Advances by Members. If the Company does not have sufficient cash
to pay its obligations, any Member(s) that may agree to do so with the consent
of the Managers may advance all or part of the needed funds to or on behalf of
the Company, at such interest rate and on such other terms as such Member and
the Managers may agree. An advance described in this Section 3.05 constitutes a
loan from the Member to the Company and is not a Capital Contribution.
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3.06. Capital Accounts. A capital account shall be established and
maintained for each Member. Each Member's capital account (a) shall be increased
by (i) the amount of cash funds contributed by that Member to the Company, (ii)
the fair market value of property contributed by that Member to the Company (net
of liabilities secured by the contributed property that the Company is
considered to assume or take subject to under section 752 of the Code), and
(iii) allocations to that Member of the Company income and gain (or items
thereof), including income and gain exempt from tax and income and gain
described in Treas. Reg. ss. 1.704-1(b)(2)(iv)(g), but excluding income and gain
described in Treas. Reg. ss. 1.704-1(b)(4)(i), and (b) shall be decreased by (i)
the amount of cash funds distributed to that Member by the Company, (ii) the
fair market value of property distributed to that Member by the Company (net of
liabilities secured by the distributed property that the Member is considered to
assume or take subject to under section 752 of the Code), (iii) allocations to
that Member of expenditures of the Company described in section 705(a)(2)(B) of
the Code, and (iv) allocations of Company loss and deduction (or items thereof),
including loss and deduction described in Treas. Reg. ss. 1.704-1(b)(2)(iv)(g),
but excluding items described in clause (b)(iii) above and loss or deduction
described in Treas. Reg. ss. 1.704-1(b)(4)(i) or ss. 1.704-1(b)(4)(iii). The
Members' capital accounts also shall be maintained and adjusted as permitted by
the provisions of Treas. Reg. ss. 1.704-1(b)(2)(iv)(f) and as required by the
other provisions of Treas. Reg. ss. 1.704-1(b)(2)(iv) and 1.704-1(b)(4),
including adjustments to reflect the allocations to the Members of depreciation,
depletion, amortization, and gain or loss as computed for book purposes rather
than the allocation of the corresponding items as computed for tax purposes, as
required by the Treas. Reg. ss. 1.704-1(b)(2)(iv)(g). On the transfer of all or
part of a Membership Interest, the capital account of the transferor that is
attributable to the transferred Membership Interest or part thereof shall carry
over to the assignee in accordance with the provisions of Treas. Reg. ss.
1.704-1(b)(2)(iv)(1).
Article 4
Distributions and Allocations
4.01. Distributions. The Company will distribute Net Cash Flow (as
defined in this Section 4.01) to the Members in proportion to their Sharing
Ratios at such times as the Managers shall determine; provided that, unless
restricted by the terms of any loan agreement, indenture, or other agreement to
which the Company is or becomes a party, the Company will make distributions of
cash on hand at least equal to the Maximum Tax Liability for each year at such
times (considering, among other factors, the requirements to make quarterly
estimated tax payments) that each Member will receive such distributions prior
to the times payments of taxes or estimated taxes are due. All distributions
under this Section 4.01 shall be made to the Members in proportion to their
Sharing Ratios. The term "Maximum Tax Liability" means for any taxable year, the
sum of hypothetical federal, state and local taxes which shall be determined by
multiplying the Company's taxable income (as determined under Section 703 of the
Code including items required to be separately stated under Section 703(a)(1) of
the Code) for such year by (i) for purposes of determining the hypothetical
federal tax, the highest marginal federal income tax rate in effect for such
year (including any surtax or surcharge) and (ii) for purposes of determining
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state and local taxes, the highest effective state and local tax rate, as the
case may be, imposed on such taxable income, taking into account state and local
rates in effect in any jurisdiction in which any Member is subject to a tax on
its allocable share of the Company's taxable income. In the case of any Member,
which is, an entity treated as a pass-through tax entity for federal, state or
local purposes, the partners, members, beneficiaries or shareholders (as the
case may be) of such entity shall be considered as Members for purposes of
applying the immediate preceding sentence. The term "Net Cash Flow" shall mean
all cash funds derived by the Company (including interest received on reserves,
borrowings and capital transactions), without reduction for any non-cash
charges, but less cash funds used to pay current operating expenses, debt
payments, capital expenditures and establish reasonable reserves for future
expenses and costs as determined by the Managers.
4.02. Allocations. Except as may be required by Code Section 704(c) and
Treasury Regulation Section 1.704-1(b)(2)(iv)(d)(3), all items of income, gain,
loss, deduction, and credit of the Company shall be allocated to the Members in
their Sharing Ratios.
4.03 Stop Loss. Notwithstanding any other provision hereof to the
contrary, no item of loss or deduction of the Company shall be allocated to a
Member if such allocation would result in a deficit balance in such Member's
capital account established and maintained pursuant to Section 3.06. Such item
of loss or deduction shall be allocated among the Members whose capital account
balances are positive in proportion to such positive balances to the extent
necessary to reduce the balances of such other Member's capital accounts
balances to zero, it being the intention of the Members that no Member's capital
account balance shall fall below zero while any other Member's capital account
has a positive balance. If there have been allocations of loss or deduction
pursuant to this Section 4.03, then all items of income, gain and credit of the
Company first allocated after such allocations of loss or deduction pursuant to
this Section 4.03 shall be allocated among the Members to offset in reverse
order such allocations of loss or deduction and thereafter in accordance with
Section 4.02.
4.04 Qualified Income Offset. A Member who unexpectedly receives any
adjustment, allocation, or distribution described in Treas. Reg.
ss.1.704-1(b)(2)(ii)(d)(4), (5), or (6) will be specially allocated items of
income or gain (consisting of a prorata portion of each item of partnership
income, including gross income, and gain for such year) in an amount and in the
manner sufficient to eliminate any deficit balance in his capital account as
quickly as possible; provided, however, that an allocation shall be made
pursuant to this Section 4.04 only if and to the extent that such Member would
have a deficit in his capital account after all allocations in this Article 4
have been tentatively made as if this Section 4.04 were not in these
Regulations. This Section 4.04 is intended to satisfy the provisions of Treas.
Reg. ss.1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
Article 5
Management
5.01. Management by Managers. (a) Subject to the provisions of Section
5.02, the powers of the Company shall be exercised by or under the authority of,
and the business and affairs of the Company shall be managed under the direction
of, managers of the Company ("Managers"). No Member in its capacity as a Member
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has the right, power, or authority to act for or on behalf of the Company, to do
any act that would be binding on the Company, or to incur any expenditures on
behalf of the Company.
(b) In managing the business and affairs of the Company and
exercising its powers, the Managers shall act (i) collectively through
resolutions adopted at meetings and in written consents pursuant to Sections
5.04 and 5.08; and (ii) through committees and individual Managers to which
authorities and duties have been delegated pursuant to Section 5.05. No Manager
has the right, power, or authority to act for or on behalf of the Company, to do
any act that would be binding on the Company, or to incur any expenditures on
behalf of the Company, except in accordance with the immediately preceding
sentence. Decisions or actions taken by the Managers in accordance with this
Agreement (including this Section 5.01 and Section 5.02) shall constitute
decisions or actions by the Company and shall be binding on each Manager,
Member, Officer (as defined in Section 5.09), and employee of the Company.
5.02. Decisions Requiring Member Consent. Notwithstanding any power or
authority granted the Managers under the Act, the Certificate or this Agreement,
the Managers may not make any decision or take any action for which the consent
of a Majority Interest or other consent of the Members is expressly required by
the Act, the Certificate or this Agreement, without first obtaining such
consent.
Each Member may, with respect to any vote, consent, or approval that it
is entitled to grant pursuant to this Agreement, grant or withhold such vote,
consent, or approval in its Sole Discretion.
5.03. Selection of Managers. The number of Managers of the Company
shall be no fewer than three (3) and no more than five (5). Each Manager must be
elected by a Majority Interest. Each Manager shall cease to be a Manager upon
the earliest to occur of the following events: (a) such Manager shall be
removed, with or without cause, by a Majority Interest at a meeting of the
Members called for that purpose; (b) such Manager shall resign as a Manager, by
giving notice of such resignation to the Members; or (c) such Manager shall die,
wind up and terminate (unless its business is continued without the commencement
of liquidation or winding up). Any vacancy in any Manager position may be filled
by a Majority Interest at a meeting of the Members called for that purpose, or
by a majority of the remaining Managers, though less than a quorum of the
Managers.
5.04. Meetings of Managers. Meetings of the Managers may be called by
any Manager by notice thereof (specifying the place and time of such meeting)
that is delivered to each other Manager at least 24 hours prior to such meeting.
Neither the business to be transacted at, nor the purpose of, such meeting need
be specified in the notice (or waiver of notice) thereof. Unless otherwise
expressly provided in this Agreement, at any meeting of the Managers, a majority
of the Managers shall constitute a quorum for the transaction of business, and
an act of a majority of the Managers who are present at or participate in such a
meeting at which a quorum is present or participating shall be the act of the
Managers. The provisions of this Section 5.04 shall be inapplicable at any time
that there is only one Manager.
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5.05. Committees of Managers; Delegation of Authority to Individual
Managers. The Managers may designate one or more committees, each of which shall
be comprised of one or more of the Managers, and may designate one or more of
the Managers as alternate members of any committee. Any such committee, to the
extent provided in the resolution establishing it, shall have and may exercise
all of the authority that may be exercised by the Managers. Regular and special
meetings of such committee shall be held in the manner designated by the
Managers or, if not so designated, by such committee. The Managers may dissolve
any committee at any time. In addition, the Managers may delegate to one or more
Managers such authority and duties, and assign to them such titles, as the
Managers may deem advisable. Any such delegation may be revoked at any time by
the Managers.
5.06. Compensation. The Managers shall receive such compensation, if
any, for their services as may be designated by a Majority Interest. In
addition, the Managers shall be entitled to be reimbursed for out-of-pocket
costs and expenses incurred in the course of their service hereunder.
5.07. Meetings of Members. Meetings of the Members may be called by the
Managers or by Members having among them at least ten percent (10%) of the
Sharing Ratios of all Members. Any such meeting shall be held on such date and
at such time as the Person calling such meeting shall specify in the notice of
the meeting, which shall be delivered to each Member at least ten (10) days
prior to such meeting. Only business within the purpose or purposes described in
the notice (or waiver thereof) for such meeting may be conducted at such
meeting. Unless otherwise expressly provided in this Agreement, at any meeting
of the Members, Members holding among them at least a majority of all Sharing
Ratios (a "Majority Interest"), represented either in person or by proxy, shall
constitute a quorum for the transaction of business, and an act of a Majority
Interest shall be the act of the Members.
5.08. Provisions Applicable to All Meetings. In connection with any
meeting of the Managers, Members, or any committee of the Managers, the
following provisions shall apply:
(a) Place of Meeting. Any such meeting shall be held at the
principal place of business of the Company, unless the notice of such meeting
(or resolution of the Managers or committee, as applicable) specifies a
different place, which need not be in the State of Delaware.
(b) Waiver of Notice Through Attendance. Attendance of a
Person at such meeting (including pursuant to Section 5.08(e)) shall constitute
a waiver of notice of such meeting, except where such Person attends the meeting
for the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
(c) Proxies. A Person may vote at such meeting by a written
proxy executed by that Person and delivered to another Manager, Member, or
member of the committee, as applicable. A proxy shall be revocable unless it is
stated to be irrevocable.
(d) Action by Written Consent. Any action required or
permitted to be taken at such a meeting may be taken without a meeting, without
prior notice, and without a vote if a consent or consents in writing, setting
forth the action so taken, is signed by the Managers, Members, or members of the
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committee, as applicable, having not fewer than the minimum number of Sharing
Ratios or votes that would be necessary to take the action at a meeting at which
all Members, Managers, or members of the committee, as applicable, entitled to
vote on the action were present and voted.
(e) Meetings by Electronic Means. Managers, Members, or
members of the committee, as applicable, may participate in and hold such
meeting by means of telephone conference, videoconference, the internet, any
other electronic communications equipment, or any combination thereof by means
of which all Persons participating in the meeting can communicate with each
other.
5.09. Officers. The Managers may designate one or more Persons to be
officers of the Company ("Officers"), and any Officers so designated shall have
such title, authorities, duties, and salaries as the Managers may delegate to
them. Any Officer may be removed as such, either with or without cause, by the
Managers.
5.10. Limitations on Liability of Managers. The liability of the
Managers to the Company and the Members shall be limited to the extent, if any,
now or hereafter set forth in the Certificate.
5.11. Conflicts of Interest. Subject to the other express provisions of
this Agreement, each Member, Manager, Officer, or affiliate thereof may engage
in and possess interests in other business ventures, independently or with
others, excluding ones in competition with the primary business of the Company.
The Company may transact business with any Member, Manager, Officer, or
affiliate thereof, provided the terms of those transactions are no less
favorable than those the Company could obtain from unrelated third parties. Any
Member or affiliate thereof may purchase service from the Company upon terms
which are as favorable to the Member or affiliate as may be obtained from an
unrelated provider of the same service.
5.12. Indemnification; Reimbursement of Expenses; Insurance. To the
fullest extent permitted by the Act: (a) the Company shall indemnify each
Manager who was, is, or is threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding ("Proceeding"), any appeal
therein, or any inquiry or investigation preliminary thereto, by reason of the
fact that he or she is or was a Manager; (b) the Company shall pay or reimburse
a Manager for expenses incurred by him or her (i) in advance of the final
disposition of a Proceeding to which such Manager was, is, or is threatened to
be made a party, and (ii) in connection with his or her appearance as a witness
or other participation in any Proceeding. The Company shall indemnify and
advance expenses to an Officer of the Company to the extent required to do so by
the Act or other applicable law. The Company, by adoption of a resolution of the
Managers, may indemnify and advance expenses to an Officer, employee, or agent
of the Company to the same extent and subject to the same conditions under which
it may indemnify and advance expenses to Managers. The provisions of this
Section 5.12 shall not be exclusive of any other right under any law, agreement,
the provision of the Certificate or this Agreement, or otherwise. The Company
may purchase and maintain insurance to protect itself and any Manager, Officer,
employee, or agent of the Company, whether or not the Company would have the
power to indemnify such Person under this Section 5.12.
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Article 6
Taxes
6.01. Tax Returns. The Company shall prepare and timely file all
federal, state, and local tax returns required to be filed by the Company. Each
Member shall furnish to the Company all pertinent information in its possession
relating to the Company's operations that is necessary to enable the Company's
tax returns to be timely prepared and filed. The Company shall deliver a copy of
each such return to the Members, together with such additional information as
may be required by the Members in order for the Members to timely file their
individual returns reflecting the Company's operations. The Company shall bear
the costs of the preparation and filing of its returns.
6.02. Tax Elections. The Company shall make the following elections on
the appropriate tax returns:
(a) to adopt a fiscal year beginning January 1st, and ending
December 31st; and
(b) any other election the Managers may deem appropriate and
in the best interests of the Members.
6.03. Tax Matters Member. The Managers shall designate, if applicable,
one Member to be the "tax matters partner" of the Company pursuant to Code
Section 6231(a)(7) (the "Tax Matters Member"). The Tax Matters Member shall take
such action as may be necessary to cause to the extent possible each other
Member to become a "notice partner" within the meaning of Code Section 6223. The
Tax Matters Member shall inform each other Member of all significant matters
that may come to its attention in its capacity as Tax Matters Member by giving
notice thereof on or before the fifth business day after becoming aware thereof
and, within that time, shall forward to each other Member copies of all
significant written communications it may receive in that capacity. The Tax
Matters Member shall take no action without the authorization of a Majority
Interest, other than such action as may be required by applicable law. Any cost
or expense incurred by the Tax Matters Member in connection with its duties,
including the preparation for or pursuance of administrative or judicial
proceedings, shall be paid by the Company.
Article 7
Buy-Out Procedures
7.01 Procedure for Offer to Purchase. In the event a Member
(hereinafter referred to for purposes of this Article 7 only as "Buying Member")
shall desire to purchase the entire Membership Interest of any other Member
(hereinafter referred to for purposes of this Article 7 only as "Selling
Member"), Buying Member shall give notice to Selling Member of its intention to
acquire Selling Member's entire Membership Interest and the terms of such offer
to purchase ("Offer to Purchase"). The Members hereby agree that upon the
issuance of an Offer to Purchase, Selling Member shall have an irrevocable right
of first refusal ("Right of First Refusal") for no more than thirty (30) days
after the date of its receipt of the Offer to Purchase, to purchase Buying
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Member's entire Membership Interest under the same terms, including purchase
price, as provided in Buying Member's Offer to Purchase.
7.02 Selling Member's Options. Selling Member shall provide notice to
Buying Member, no more than thirty (30) days (the "Time Period") after receipt
of Buying Member's Offer to Purchase, of its intention to either:
(a) accept the Offer to Purchase;
(b) reject the Offer to Purchase; or
(c) exercise its Right of First Refusal to purchase Buying
Member's entire Membership Interest pursuant to Section 7.01.
If Selling Member does not respond as provided in this Section 7.02, then Buying
Member's Offer to Purchase shall be deemed to have been rejected by Selling
Member.
7.03 Preferential Purchase Right.
(a) Procedure. Should any Member at any time desire to make a
Disposition of all or a portion of its Membership Interest pursuant to a bona
fide offer from another Person (except for a Permitted Disposition as described
in the Section 2.02), such Member (the "Disposing Member") shall promptly give
notice thereof (the "Disposition Notice") to the Company and the other Members.
The Disposition Notice shall set forth all relevant information with respect to
the proposed Disposition, including the name and address of the prospective
acquirer, the purchase price, the precise Membership Interest that is the
subject of the Disposition, and any other terms and conditions of the proposed
Disposition. The other Members shall have the preferential right to acquire such
Membership Interest for the same purchase price, and on the same terms and
conditions, as are set forth in the Disposition Notice, except as provided
otherwise in this Section 7.03. Each Member (other than the Disposing Member)
shall have thirty (30) days following its receipt of the Disposition Notice in
which to notify the Disposing Member whether such Member desires to exercise its
preferential right. (A notice in which a Member exercises such right is referred
to herein as an "Exercise Notice", and a Member who delivers an Exercise Notice
is referred to herein as a "Purchasing Member"). Any Member who does not respond
during the applicable period shall be deemed to have waived such right. If there
is more than one Purchasing Member, each Purchasing Member shall participate in
the purchase in the same proportion that its Sharing Ratio bears to the
aggregate Sharing Ratios of all Purchasing Members (or on such other basis as
the Purchasing Members may mutually agree).
(b) Non-Cash Consideration. If any portion of the purchase
price, as disclosed in the Disposition Notice, is to be paid in a form other
than cash, the following procedures shall be applicable:
(i) If any portion of the purchase price is to be
represented by a promissory note (which term shall include any form of deferred
payment obligation), the Disposition Notice shall set forth the terms of such
promissory note. With respect to such portion of the purchase price, each
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Purchasing Member shall have the option (to be elected in its Exercise Notice),
either (A) to deliver an equivalent promissory note, or (B) to pay in cash the
principal amount of such promissory note.
(ii) If any portion of the purchase price is to be
payable in a form other than cash or a promissory note, the Disposition Notice
shall set forth the Disposing Member's best estimate of the fair market value
thereof. If one or more Purchasing Members disagree with such estimate, and if
such disagreement is not resolved within twenty (20) days following delivery of
the Disposition Notice, any such Person, by notice to the others, may require
the determination of fair market value to be made pursuant to Article 11 and the
period for return of the Exercise Notice shall be extended until such
disagreement can be resolved. With respect to such portion of the purchase
price, each Purchasing Member shall have the option, to be elected in its
Exercise Notice, either (A) to make such portion of the price in the same form
as is specified in the Disposition Notice, or (B) to pay in cash the fair market
value of such portion of the price.
(c) Closing. If the preferential right is exercised in
accordance with this Section 7.03, the closing of such purchase shall occur
within thirty (30) days after the expiration of the preferential right period.
At the closing, (i) the Disposing Member shall execute and deliver to the
Purchasing Members (A) an assignment of the Membership Interest described in the
Disposition Notice, in form and substance reasonably acceptable to the
Purchasing Members, containing a general warranty of title as to such Membership
Interest (including that such Membership Interest is free and clear of any
encumbrances) and (B) any other instruments reasonably requested by the
Purchasing Members to give effect to the purchase; and (ii) the Purchasing
Members shall deliver to the Disposing Member the purchase price specified in
the Disposition Notice. The Sharing Ratios and capital accounts of the Members
shall be deemed adjusted to reflect the effect of the purchase.
(d) Waiver of Preferential Right. If following compliance with
this Section 7.03, no Members deliver an Exercise Notice, the Disposing Member
shall have the right, subject to compliance with the provisions of Section 2.02,
to Dispose of the Membership Interest described in the Disposition Notice to the
proposed assignee strictly in accordance with the terms of the Disposition
Notice for a period of ninety (90) days after the expiration of the preferential
right period. If, however, the Disposing Member fails so to Dispose of the
Membership Interest within such ninety (90) day period, the proposed Disposition
shall again become subject to the preferential right set forth in this Section
7.03.
Article 8
Books, Records and Bank Accounts
8.01. Maintenance of Books. The Managers shall keep or cause to be kept
at the principal office of the Company complete and accurate books and records
of the Company, supporting documentation of the transactions with respect to the
conduct of the Company's business, and minutes of the proceedings of its
Managers and Members. The books and records shall be maintained with respect to
accounting matters in accordance with sound accounting practices, and all books
and records shall be available at the Company's principal office for examination
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by any Member or the Member's duly authorized representative at any and all
reasonable times during normal business hours.
8.02. Reports. Within seventy-five (75) days after the end of each
taxable year, the Managers shall cause to be sent to each Person who was a
Member at the end of such taxable year a complete accounting of the financial
affairs of the Company for the taxable year then ended.
8.03. Accounts. The Managers shall establish one or more separate bank
and investment accounts and arrangements for the Company, which shall be
maintained in the Company's name with financial institutions and firms that the
Managers determine. The Managers may not commingle the Company's funds with the
funds of any Manager or Member.
Article 9
Dissolution, Winding Up, and Termination
9.01. Dissolution. (a) The Company shall dissolve and its affairs shall
be wound up on the first to occur of the following events:
(i) the unanimous consent of the Members; or
(ii) entry of a decree of judicial dissolution of the
Company under Section 18-802 of the Act.
(b) The death, expulsion, withdrawal, or dissolution of any
Member, or the occurrence of any other event that terminates the continued
membership of any Member in the Company shall not cause the Company to be
dissolved. In the event of the death of a Member of the Company, the Company
shall not be dissolved but shall continue uninterrupted with such deceased
Member's estate, beneficiaries of such deceased Member's estate and/or any other
Permitted Transferee of such deceased Member automatically becoming a Member.
9.02. Winding Up and Termination. (a) On the occurrence of an event
described in Section 9.01(a), the Managers shall act as liquidator or may
appoint one or more Members as liquidator. The liquidator shall proceed
diligently to wind up the affairs of the Company as provided in the Act. Until
final distribution, the liquidator shall continue to operate the Company
properties with all of the power and authority of the Managers. The costs of
winding up shall be borne as a Company expense.
(b) Any assets of the Company remaining at the conclusion of
the winding up process shall be distributed among the Members in accordance with
their positive capital accounts. All distributions in kind to the Members shall
be made subject to the liability of each distributee for costs, expenses, and
liabilities theretofore incurred or for which the Company has committed prior to
the date of termination. The distribution of cash and/or property to a Member in
accordance with the provisions of this Section 9.02(b) constitutes a complete
return to the Member of its Capital Contributions and a complete distribution to
the Member of its Membership Interest and all the Company's property and
13
constitutes a compromise to which all Members have consented within the meaning
of Section 18-502(b) of the Act.
(c) On completion of such final distribution, the Managers
shall file a Certificate of Cancellation with the Secretary of State of
Delaware, cancel any other filings made pursuant to Section 1.05, and take such
other actions as may be necessary to terminate the existence of the Company.
9.03. No Restoration of Deficit Capital Accounts. No Member shall be
required to pay to the Company, to any other Member or to any third party any
deficit balance that may exist from time to time in any capital or similar
account maintained for such Member for any purpose.
Article 10
Investment and Other Representations of the Members
10.01. Investment Intent. EACH OF THE MEMBERS DOES HEREBY REPRESENT AND
WARRANT TO THE COMPANY AND TO EACH OF THE OTHER MEMBERS THAT HE, SHE OR IT HAS
ACQUIRED HIS, HER OR ITS INTEREST IN THE COMPANY FOR INVESTMENT, SOLELY FOR HIS,
HER OR ITS OWN ACCOUNT, WITH THE INTENTION OF HOLDING SUCH INTEREST FOR
INVESTMENT, AND WITHOUT ANY INTENTION OF PARTICIPATING DIRECTLY OR INDIRECTLY IN
ANY REDISTRIBUTION OR RESALE OF ANY PORTION OF SUCH INTEREST IN VIOLATION OF THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY APPLICABLE
STATE SECURITIES LAW.
10.02. Unregistered Membership Interests. EACH OF THE MEMBERS DOES
HEREBY ACKNOWLEDGE THAT HE, SHE OR IT IS AWARE THAT HIS, HER OR ITS INTEREST IN
THE COMPANY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT IN RELIANCE UPON
EXEMPTIONS CONTAINED IN SUCH SECURITIES ACT AND THAT HIS, HER OR ITS INTEREST IN
THE COMPANY HAS NOT BEEN REGISTERED UNDER THE SECURITIES LAW OF ANY STATE IN
RELIANCE UPON THE EXEMPTIONS CONTAINED IN SUCH STATE SECURITIES LAW.
10.03. Nature of Investment. EACH OF THE MEMBERS DOES HEREBY REPRESENT
AND WARRANT TO THE COMPANY AND TO EACH OF THE OTHER MEMBERS THAT HE, SHE OR IT
IS A SOPHISTICATED INVESTOR AND THE NATURE AND AMOUNT OF THE CAPITAL
CONTRIBUTION HE, SHE OR IT AGREES TO MAKE HEREUNDER IS CONSISTENT WITH HIS, HER
OR ITS INVESTMENT PROGRAM AND THAT SUCH MEMBER HAS SUFFICIENT LIQUID ASSETS TO
ABSORB THE LOSS OF HIS, HER OR ITS ENTIRE INVESTMENT IN THE COMPANY. FURTHER,
EACH OF THE MEMBERS DOES HEREBY ACKNOWLEDGE THAT:
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(A) PRIOR TO HIS, HER OR ITS EXECUTION OF THIS AGREEMENT, HE, SHE
OR IT HAS BEEN FURNISHED WITH SUFFICIENT WRITTEN AND ORAL
INFORMATION ABOUT THE COMPANY AND THE BUSINESS TO BE OPERATED
BY THE COMPANY TO ALLOW SUCH MEMBER TO MAKE AN INFORMED
INVESTMENT DECISION PRIOR TO PURCHASING AN INTEREST IN THE
COMPANY;
(B) HE, SHE OR IT IS FULLY FAMILIAR WITH THE BUSINESS PROPOSED TO
BE CONDUCTED BY THE COMPANY AND WITH THE COMPANY'S USE AND
PROPOSED USE OF THE PROCEEDS OF THE SALE OF THE MEMBERSHIP
INTERESTS;
(C) THE OFFER AND PURCHASE OF HIS, HER OR ITS INTEREST IN THE
COMPANY HAS BEEN MADE IN THE COURSE OF A NEGOTIATED
TRANSACTION INVOLVING DIRECT COMMUNICATION BETWEEN SUCH MEMBER
AND A REPRESENTATIVE OF THE COMPANY;
(D) HE, SHE OR IT HAS EITHER (I) HAD EXPERIENCE IN BUSINESS
ENTERPRISES OR INVESTMENTS ENTAILING RISK OF A TYPE OR TO A
DEGREE SUBSTANTIALLY SIMILAR TO THOSE ENTAILED IN AN
INVESTMENT IN THE COMPANY, OR (II) HAS OBTAINED INDEPENDENT
FINANCIAL ADVICE WITH RESPECT TO HIS, HER OR ITS INVESTMENT IN
THE COMPANY;
(E) HE, SHE OR IT HAS BEEN ADVISED THAT HIS, HER OR ITS MEMBERSHIP
INTEREST MAY NOT BE SOLD, ASSIGNED OR OTHERWISE TRANSFERRED
EXCEPT IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING SAID
INTEREST UNDER THE SECURITIES ACT OF 1933, AND THAT HE, SHE OR
IT WILL HAVE NO RIGHTS TO REQUIRE REGISTRATION OF HIS, HER OR
ITS MEMBERSHIP INTEREST UNDER THE SECURITIES ACT OF 1933, AND,
IN VIEW OF THE NATURE OF THE TRANSACTION, REGISTRATION IS
NEITHER CONTEMPLATED NOR LIKELY; AND
(F) PRIOR TO HIS, HER OR ITS EXECUTION OF THIS AGREEMENT, HE, SHE
OR IT RECEIVED A COPY OF THIS AGREEMENT AND THAT HE, SHE OR IT
HAS EXAMINED THIS DOCUMENT OR CAUSED THIS DOCUMENT TO BE
EXAMINED BY HIS, HER OR ITS REPRESENTATIVE OR ATTORNEY.
15
10.04. Valid Existence. Each Member represents and warrants to the
Company and each other Member that:
(a) If that Member is a corporation, it is duly organized, validly
existing, and in good standing under the laws of the state of
its incorporation and is duly qualified and in good standing
as a foreign corporation in the jurisdiction of its principal
place of business (if not incorporated therein);
(b) If that Member is a partnership, trust, or other entity, it is
duly formed, validly existing, and (if applicable) in good
standing in the jurisdiction of its principal place of
business (if not formed therein);
(c) It has full corporate, partnership, trust or other applicable
power and authority to enter into this Agreement and to
perform its obligations hereunder and all necessary actions by
the board of directors (or trustees), shareholders, members,
managers, partners, beneficiaries, or other persons necessary
for the due authorization, execution, delivery, and
performance of this Agreement by that Member have been duly
taken;
(d) It has duly executed and delivered this Agreement; and
(e) The execution, delivery, and performance of this Agreement do
not conflict with any other agreement or arrangement to which
such Member is a party or by which it is bound.
10.05. Indemnity and Survival. Each of the Members does hereby agree to
hold the Company harmless and to indemnify the Company against all liabilities,
costs and expenses incurred by the Company as a result of any sale or
distribution by such Member in violation of the Securities Act of 1933. All
representations, warranties and indemnities made by such Member with reference
to the Securities Act of 1933 shall be deemed to be equally applicable in
connection with the securities law of Delaware or any other state. All
representations, warranties and agreements shall survive until the dissolution
and termination of the Company, except to the extent that a representation,
warranty or agreement expressly provides otherwise.
Article 11
Alternative Dispute Resolution ("ADR")
11.01. Agreement to Use Procedure. The Members have entered into this
Agreement in good faith and in the belief that it is mutually advantageous to
them. It is with that same spirit of cooperation that they pledge to attempt to
resolve any dispute amicably without the necessity of litigation. Accordingly,
they agree if any dispute arises between them relating to this Agreement (the
"Dispute"), they will first utilize the procedures specified in this Article
(the "Procedure") prior to any Additional Proceedings (defined below in Section
11.11).
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11.02. Initiation of Procedure. The Member seeking to initiate the
Procedure (the "Initiating Member") shall give written notice to the other
Members, describing in general terms the nature of the Dispute, the Initiating
Member's claim for relief and identifying one or more individuals with authority
to settle the Dispute on such Member's behalf. The Member(s) receiving such
notice (the "Responding Member"), whether one or more shall have fifteen (15)
business days within which to designate by written notice to the Initiating
Member, one or more individuals with authority to settle the Dispute on such
Member's behalf. The individuals so designated shall be known as the "Authorized
Individuals". The Initiating Member and the Responding Member shall collectively
be referred to as the "Disputing Members" or individually "Disputing Member".
11.03. Direct Negotiations. The Authorized Individuals shall be
entitled to make such investigation of the Dispute as they deem appropriate, but
agree to promptly, and in no event later than thirty (30) days from the date of
the Initiating Member's written notice, meet to discuss resolution of the
Dispute. The Authorized Individuals shall meet at such times and places and with
such frequency as they may agree. If the Dispute has not been resolved within
thirty (30) days from the date of their initial meeting, the Disputing Members
shall cease direct negotiations and shall submit the Dispute to mediation in
accordance with the following procedure.
11.04. Selection of Mediator. The Authorized Individuals shall have
fifteen (15) business days from the date they cease direct negotiations to
submit to each other a written list of acceptable qualified attorney-mediators
not affiliated with any of the Members. Within five (5) days from the date of
receipt of such list, the Authorized Individuals shall rank the mediators in
numerical order of preference and exchange such rankings. If one or more names
are on both lists, the highest ranking person shall be designated as the
mediator. If no mediator has been selected under this procedure, the Disputing
Members agree jointly to request a State or Federal District Judge of their
choosing to supply within ten (10) business days a list of potential qualified
attorney-mediators. Within fifteen (15) business days of receipt of the list,
the Authorized Individuals shall again rank the proposed mediators in numerical
order of preference and shall simultaneously exchange such list and shall select
as the mediator the individual receiving the highest combined ranking. If such
mediator is not available to serve, they shall proceed to contact the mediator
who was next highest in ranking until they are able to select a mediator.
11.05. Time and Place of Mediation. In consultation with the mediator
selected, the Authorized Individuals shall promptly designate a mutually
convenient time and place for the mediation, and unless circumstances require
otherwise, such time shall be not later than forty-five (45) days after
selection of the mediator.
11.06. Exchange of Information. In the event any Disputing Member to
this Agreement has substantial need for information in the possession of another
Disputing Member to this Agreement in order to prepare for the mediation, all
Disputing Members shall attempt in good faith to agree to procedures for the
expeditious exchange of such information, with the help of the mediator if
required.
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11.07. Summary of Views. At least seven (7) days prior to the first
scheduled session of the mediation, each Disputing Member shall deliver to the
mediator and to the other Disputing Members a concise written summary of its
views on the matter in Dispute, and such other matters required by the mediator.
The mediator may also request that a confidential issue paper be submitted by
each Disputing Member to him or her.
11.08. Parties to be Represented. In the mediation, each Disputing
Member shall be represented by an Authorized Individual and may be represented
by counsel at such Disputing Member's own expense. In addition, each Disputing
Member may, with permission of the mediator, bring such additional Persons as
needed to respond to questions, contribute information, and participate in the
negotiations.
11.09. Conduct of Mediation. The mediator shall determine the format
for the meetings, designed to assure that both the mediator and the Authorized
Individuals have an opportunity to hear an oral presentation of each Disputing
Member's views on the matter in dispute, and that the Authorized Individuals
attempt to negotiate a resolution of the matter in dispute, with or without the
assistance of counsel or others, but with the assistance of the mediator. To
this end, the mediator is authorized to conduct both joint meetings and separate
private caucuses with the Disputing Members. The mediation session shall be
private. The mediator will keep confidential all information learned in private
caucus with any Disputing Member unless specifically authorized by such
Disputing Member to make disclosure of the information to the other Disputing
Member. The Disputing Members agree to sign a document agreeing that the
mediator shall be governed by the provisions of Delaware law and such other
rules as the mediator shall prescribe. The Disputing Members commit to
participate in the proceedings in good faith with the intention of resolving the
Dispute if at all possible.
11.10. Termination of Procedure. The Disputing Members agree to
participate in the mediation procedure to its conclusion. The mediation shall be
terminated: (i) by the execution of a settlement agreement by the Disputing
Members; (ii) by a declaration of the mediator that the mediation is terminated;
or (iii) by a written declaration of a Disputing Member to the effect that the
mediation process is terminated at the conclusion of one full day's mediation
session. Even if the mediation is terminated without a resolution of the
Dispute, the Disputing Members agree not to terminate good faith negotiations
and not to commence any Additional Proceedings prior to the expiration of five
(5) business days following the mediation. Notwithstanding the foregoing, any
Disputing Member may commence Additional Proceedings within such five (5)
business day period if the Dispute could be barred by an applicable statute of
limitations.
11.11. Arbitration. The parties agree to participate in good faith in
the Alternative Dispute Resolution ("ADR") to its conclusion. If the Disputing
Members are not successful in resolving the dispute through the ADR, then the
Disputing Members may agree to submit the matter to binding arbitration or a
private adjudicator, or either Disputing Member may seek an adjudicated
resolution through the appropriate court ("Additional Proceedings").
11.12. Fees of Mediation; Disqualification. The fees and expenses of
the mediator shall be shared equally by the Disputing Members. The mediator
18
shall be disqualified as a witness, consultant, expert or counsel for any
Disputing Member with respect to the Dispute and any related matters.
11.13. Confidentiality. The entire mediation process is confidential,
and no stenographic, visual or audio record shall be made. All conduct,
statements, promises, offers, views and opinions, whether oral or written, made
in the course of the mediation by any Disputing Member, their agents, employees,
counsel, representatives or other invitees and by the mediator are confidential
and shall, in addition and where appropriate, be deemed privileged. Such
conduct, statements, promises, offers, views and opinions shall not be
discoverable or admissible for any purpose, including impeachment, in any
litigation or other proceeding involving the parties and shall not be disclosed
to anyone not an agent, employee, expert, witness, or representative of any of
the Members; provided, however, that evidence otherwise discoverable or
admissible is not excluded from discovery or admission as a result of its use in
the mediation.
Article 12
General Provisions
12.01. Offset. Whenever the Company is to pay any sum to any Member,
any amounts that Member owes the Company may be deducted from that sum before
payment.
12.02. Notices. Except as otherwise provided, all notices, requests, or
consents under this Agreement shall be (a) in writing, (b) delivered to the
recipient in person, by courier or mail or by facsimile, telegram, telex,
cablegram, email, instant message, or similar electronic transmission, (c) if to
a Member, delivered to such Member at the applicable address on Exhibit A or
such other address as that Member may specify by notice to the Managers and
other Members, (d) if to the Managers or the Company, delivered to the Managers
at the registered office of the Company, or at such other address as the
Managers may specify by notice to the Members, and (e) effective only upon
actual receipt by such Person(s). Whenever any notice is required to be given by
applicable law, the Certificate, or this Agreement, a written waiver thereof,
signed by the Person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.
12.03. Writings and Signatures. Under this Agreement, "signature" and
"signed" means any symbol executed or adopted by a person with present intention
to authenticate a writing. Unless the context requires otherwise, the term
includes a digital signature, an electronic signature, and a facsimile of a
signature. "Written" or "writing" means an expression of words, letters,
characters, numbers, symbols, figures, or other textual information that is
inscribed on a tangible medium or that is stored in an electronic or other
medium that is retrievable in a perceivable form. Unless the context requires
otherwise, the term (i) includes stored or transmitted electronic data and
transmissions and reproductions of writings; and (ii) does not include sound or
video recordings of speech other than transcriptions that are otherwise
writings.
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12.04. Entire Agreement; Supersedure. This Agreement constitutes the
entire agreement of the Members relating to the Company and supersedes all prior
contracts or agreements with respect to the Company, whether oral or written.
12.05. Effect of Waiver or Consent. A waiver or consent, express or
implied, to or of any breach or default by any Person in the performance by that
Person of its obligations with respect to the Company is not a consent or waiver
to or of any other breach or default in the performance by that Person of the
same or any other obligations of that Person with respect to the Company.
12.06. Amendments of Certificate and Agreement. The Certificate and
this Agreement may be amended or restated only with the approval of the Managers
and a Majority Interest.
12.07. Binding Effect. Subject to the restrictions on Dispositions set
forth in this Agreement, this Agreement is binding on and shall inure to the
benefit of the Members and their respective heirs, legal representatives,
successors, and assigns.
12.08. Governing Law; Severability. THIS AGREEMENT IS GOVERNED BY AND
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
(EXCLUDING ITS CONFLICT-OF-LAWS RULES). If any provision of this Agreement or
the application thereof to any Person or circumstance is held invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of that provision to other Persons or circumstances is not affected thereby and
that provision shall be enforced to the greatest extent permitted by applicable
law.
12.09. Construction. Unless the context requires otherwise: (a) the
gender (or lack of gender) of all words used in this Agreement includes the
masculine, feminine, and neuter; (b) the word "including" means "including,
without limitation"; (c) references to Articles and Sections refer to Articles
and Sections of this Agreement; and (d) references to Exhibits are to the
Exhibits attached to this Agreement, each of which is made a part hereof for all
purposes.
12.10. Further Assurances. In connection with this Agreement and the
transactions contemplated hereby, each Member shall execute and deliver any
additional documents and instruments and perform any additional acts that may be
necessary or appropriate to effectuate and perform the provisions of this
Agreement and those transactions.
12.11. Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute the same instrument. Delivery of an
executed signature of this Agreement by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.
12.12 Informed Decision. Each Member, by executing this Agreement,
represents and warrants that he has been furnished with sufficient written and
oral information about the Company and the business to be operated by the
Company to allow him to make an informed decision prior to purchasing a
Membership Interest in the Company.
12.13 Admonition. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, P.C. (the "Law Firm") has
exclusively represented the Company in the preparation of this Agreement and has
20
not undertaken to assist the Members, or render legal or investment advice to
the Members. The Law Firm has not acted as securities counsel to the Company or
any Member, and fully disclaims any engagement as such counsel. The Law Firm
makes no representation regarding the undertaking of the Company or the
prospective value of any Member's interest in the Company. Each Member does
hereby acknowledge that the Law Firm has directed that he/she/it seek competent
outside counsel and business advice other than from the Law Firm, as to the
effects, consequences and legalities of this Agreement and the opportunity
offered hereunder.
Adopted by the undersigned Managers effective on the 4th day of
December, 2007.
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▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
WHEREOF, following adoption of this Agreement by the Managers, the
Members have adopted and executed this Agreement to be effective as of the date
first set forth above.
[MEMBER SIGNATURE PAGES FOLLOW]
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EXHIBIT A
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