EXHIBIT 2.2
LIMITED LIABILITY COMPANY AGREEMENT
OF
GT LIGHTING, LLC
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II FORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1. Formation and Duration . . . . . . . . . . . . . . . . . . . . 9
2.2. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.3. Principal Office, Registered Office and Registered Agent . . . 10
2.4. Purpose of Company . . . . . . . . . . . . . . . . . . . . . . 10
2.5. Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.7. Qualification in Other Jurisdictions . . . . . . . . . . . . . 10
2.8. No State-Law Partnership . . . . . . . . . . . . . . . . . . . 10
2.9. Effective Date and Termination. . . . . . . . . . . . . . . . 10
ARTICLE III MEMBERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.1. Initial Members. . . . . . . . . . . . . . . . . . . . . . . . 11
3.2. Admission of Additional Members . . . . . . . . . . . . . . . 11
3.3. Agreements with Members or Affiliates . . . . . . . . . . . . 11
3.4. Authority to Execute Documents to be Filed Under the Act . . . 11
3.5. Powers of the Members . . . . . . . . . . . . . . . . . . . . 11
3.6. Liability of Members . . . . . . . . . . . . . . . . . . . . . 11
3.7. Acts of Members . . . . . . . . . . . . . . . . . . . . . . . 11
3.8. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . 12
3.9. Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . 12
3.10. Location and Conduct of the Meetings; Adjournment . . . . . . 12
3.11. Waiver of Notice of Meeting . . . . . . . . . . . . . . . . . 13
3.12. Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.13. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.14. Action Without a Meeting . . . . . . . . . . . . . . . . . . . 13
ARTICLE IV CAPITALIZATION OF THE COMPANY. . . . . . . . . . . . . . . . . 13
4.1. Initial Capital Contributions. . . . . . . . . . . . . . . . . 13
4.2. Additional Capital Contributions . . . . . . . . . . . . . . . 14
4.3. Capital Withdrawal Rights, Interest and Priority . . . . . . . 14
4.4. Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . 14
4.5. Section 754 Election . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE V PROFIT AND LOSS ALLOCATIONS . . . . . . . . . . . . . . . . . . . . 15
5.1. Profits and Losses . . . . . . . . . . . . . . . . . . . . . . 15
5.2. General Provisions . . . . . . . . . . . . . . . . . . . . . . 15
5.3. Special Provisions . . . . . . . . . . . . . . . . . . . . . . 16
5.4. Code section704(c) Allocations . . . . . . . . . . . . . . . . 17
5.5. Allocations Relating to Taxable Issuance of Interests . . . . 17
ARTICLE VI DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1. Distributions. . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2. Mandatory Distributions . . . . . . . . . . . . . . . . . . . 18
ARTICLE VII MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.1. Management Board . . . . . . . . . . . . . . . . . . . . . . . 19
7.2. Initial Management Board . . . . . . . . . . . . . . . . . . . 19
7.3. Authority of the Management Board . . . . . . . . . . . . . . 19
7.4. Action by the Management Board . . . . . . . . . . . . . . . . 20
7.5. Approval Required for Certain Matters . . . . . . . . . . . . 20
7.6. Place of Meetings . . . . . . . . . . . . . . . . . . . . . . 21
7.7. Salary and Expenses . . . . . . . . . . . . . . . . . . . . . 21
7.8. Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . 21
7.9. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . 21
7.10. Action Without a Meeting . . . . . . . . . . . . . . . . . . . 22
7.11. Telephone Meeting . . . . . . . . . . . . . . . . . . . . . . 22
7.12. Records of Action . . . . . . . . . . . . . . . . . . . . . . 22
7.13. Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . 22
7.14. Reliance on Books . . . . . . . . . . . . . . . . . . . . . . 22
7.15. Standard of Care; Liability . . . . . . . . . . . . . . . . . 22
7.16. Chairman of the Board . . . . . . . . . . . . . . . . . . . . 22
ARTICLE VIII OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.1. Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.2. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.3. Resignations . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.4. Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.5. Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IX INDEMNIFICATION AND INSURANCE. . . . . . . . . . . . . . . . . 25
9.1. Indemnification and Advancement of Expenses. . . . . . . . . . 25
9.2. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.3. Limit on Liability of Members . . . . . . . . . . . . . . . . 27
ARTICLE X TRANSFERS, WITHDRAWALS AND DEADLOCK . . . . . . . . . . . . . . . . 27
10.1. General Restriction on Transfers and Withdrawals . . . . . . . 27
10.2. Assignees and Substitute Members . . . . . . . . . . . . . . . 27
10.3. Effect of Admission as a Substitute Member . . . . . . . . . . 28
10.4. Put Right . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.5. Change of Control . . . . . . . . . . . . . . . . . . . . . . 29
10.6. Deadlock . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.7. Offer Right . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.8. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.9. Appraised Value . . . . . . . . . . . . . . . . . . . . . . . 30
10.10. Assignability and Financing. . . . . . . . . . . . . . . . . . 31
10.11. Limited Applicability. . . . . . . . . . . . . . . . . . . . . 32
ARTICLE XI DISSOLUTION AND TERMINATION. . . . . . . . . . . . . . . . . . 32
11.1. Term; Events Causing Dissolution . . . . . . . . . . . . . . . 32
11.2. Distributions Upon Dissolution . . . . . . . . . . . . . . . . 33
11.3. Certificate of Cancellation . . . . . . . . . . . . . . . . . 34
ARTICLE XII ACCOUNTING AND BANK ACCOUNTS . . . . . . . . . . . . . . . . . 34
12.1. Books and Records . . . . . . . . . . . . . . . . . . . . . . 34
12.2. Financial Reports . . . . . . . . . . . . . . . . . . . . . . 35
12.3. Tax Returns and Elections . . . . . . . . . . . . . . . . . . 35
12.4. Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . 35
12.5. Right of Inspection . . . . . . . . . . . . . . . . . . . . . 35
12.6. Financial Accounting . . . . . . . . . . . . . . . . . . . . . 36
12.7. LIFO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE XIII COVENANTS NOT TO COMPETE . . . . . . . . . . . . . . . . . . . 36
ARTICLE XIV REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 37
14.1. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . 37
14.2. Validity. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
14.3. Due Organization . . . . . . . . . . . . . . . . . . . . . . . 37
14.4. Securities Law Matters . . . . . . . . . . . . . . . . . . . . 38
ARTICLE XV MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 38
15.1. Title to Assets. . . . . . . . . . . . . . . . . . . . . . . . 38
15.2. Amendments and Waiver . . . . . . . . . . . . . . . . . . . . 39
15.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
15.4. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
15.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 40
15.6. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
15.7. Successors and Assigns . . . . . . . . . . . . . . . . . . . . 40
15.8. Entire Transaction . . . . . . . . . . . . . . . . . . . . . . 41
15.9. Other Rules of Construction. . . . . . . . . . . . . . . . . . 41
15.10. Partial Invalidity . . . . . . . . . . . . . . . . . . . . . . 41
15.11. Nature of Interest in the Company. . . . . . . . . . . . . . . 41
15.12. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 41
15.13. Power of Attorney. . . . . . . . . . . . . . . . . . . . . . . 41
15.14. Negotiation between Senior Executives. . . . . . . . . . . . . 42
15.15. Stock Options. . . . . . . . . . . . . . . . . . . . . . . . . 42
15.16. Effect of Inconsistencies with the Act . . . . . . . . . . . . 42
15.17. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . 42
15.18. Authorship . . . . . . . . . . . . . . . . . . . . . . . . . . 43
15.19. ▇▇▇▇▇▇ and Affiliates. . . . . . . . . . . . . . . . . . . . . 43
LIMITED LIABILITY COMPANY AGREEMENT
OF
GT LIGHTING, LLC
This Limited Liability Company Agreement is made and entered into this
28th day of April, 1998, by and among GT LIGHTING, LLC, a Delaware limited
liability company (the "COMPANY"), ▇▇▇▇▇▇ INDUSTRIES INC., a Delaware
corporation ("▇▇▇▇▇▇") and THE GENLYTE GROUP INCORPORATED, a Delaware
corporation ("GENLYTE"). ▇▇▇▇▇▇ and Genlyte being all of the initial members of
the Company and hereinafter referred to individually as a "MEMBER" or
collectively as the "MEMBERS."
WHEREAS, the Company was formed on April 24, 1998, pursuant to a
Certificate of Formation dated April 24, 1998, as a limited liability company
under the Delaware Limited Liability Company Act, as amended (the "ACT"), but
has not yet conducted any business;
WHEREAS, the Company was organized to engage in the business,
operations and activities related to the manufacture, sale, marketing and
distribution of consumer, commercial, industrial and outdoor lighting
(collectively, the "BUSINESS");
WHEREAS, the Company is being capitalized with certain assets of
▇▇▇▇▇▇ and Genlyte and certain of their respective Affiliates pursuant to the
Capitalization Agreements; and
WHEREAS, ▇▇▇▇▇▇ and Genlyte, as the Members, wish to adopt this
Agreement (as defined below) as the limited liability company agreement of the
Company;
NOW, THEREFORE, in consideration of the premises and promises herein
contained, the parties agree as set forth below:
ARTICLE I
DEFINITIONS
1.1. DEFINED TERMS. For purposes of this Agreement, unless the
language or context clearly indicates that a different meaning is intended, the
words, terms and phrases defined in this Section have the meanings set forth
below:
(A) "ACT" has the meaning assigned to such term in the
preamble.
(B) "ADDITIONAL CAPITAL CONTRIBUTION" means any Capital
Contribution by Members other than the initial Capital Contributions
as set forth in Section 4.1.
(C) "ADJUSTED CAPITAL ACCOUNT DEFICIT" means (for United
States federal income tax purposes) with respect to any Member the
deficit balance, if any, in such Member's Capital Account as of the
end of any Fiscal Year after giving effect to the following
adjustments:
(i) Credit to such Capital Account the sum of (i)
any amount which such Member is obligated to restore to such
Capital Account pursuant to any provision of this Agreement,
plus (ii) any amount equal to such Member's share of Company
Minimum Gain as determined under Regulation section1.704-
2(g)(1) and such Member's share of Member Nonrecourse Debt
Minimum Gain as determined under Regulation section1.704-
2(i)(5), plus (iii) any amounts which such Member is deemed
to be obligated to restore pursuant to Regulation
section1.704-1(b)(2)(ii)(c);
(ii) Debit to such Capital Account the items
described in Regulation section1.704-1(b)(2)(ii)(d)(4), (5)
and (6); and
(iii) Credit or Debit to such Capital Account any
other items required or permitted to be credited or debited
under section704 of the Code and the Regulations thereunder.
(D) "AFFILIATE" means, when used with reference to a
specified Person, any Person that directly or indirectly through one
or more intermediaries controls or is controlled by or is under common
control with the specified Person.
(E) "AGREEMENT" means this Limited Liability Company
Agreement, as amended from time to time, including all schedules and
exhibits hereto and documents referred to herein or therein.
(F) "APPRAISED VALUE" has the meaning assigned to such term
in Section 10.9(a).
(G) "APPRAISER'S REPORT" has the meaning assigned to such
term in Section 10.9(b).
(H) "ASSET VALUE" with respect to Company assets means:
(i) with respect to any asset contributed to the
Company by a Member, the gross fair market value of such
asset on the date contributed;
(ii) with respect to any asset distributed by the
Company to a Member, the gross fair market value of such
asset on the date distributed by the Company to any Member;
(iii) upon the occurrence of the following events:
(A) the admission of a Member to, or the increase of the
Interest of an existing Member in, the Company in exchange
for a Capital Contribution; (B) full or partial redemption
of a Member's Interest; or (C) the liquidation of the
Company under Regulation section1.704-1(b)(2)(ii)(g); the
Asset Value shall be adjusted to equal the gross fair market
value of such assets, as determined by mutual consent of the
Members on the date such event occurs; provided, however,
that the Company shall redetermine Asset Value upon the
occurrence of any event described in this Section
1.1(h)(iii); or
(iv) the Basis of the asset in all other
circumstances.
For purposes of this Section 1.1(h), the gross fair market
value of any asset shall be determined by the unanimous
consent of the Members. If the Members cannot agree on the
Asset Value for purposes of this Section 1.1(h), the Members
shall enter into an appraisal process substantially similar
to the process set forth in Section 10.9.
(I) "BASIS" with respect to an asset means the adjusted
basis from time to time of such asset for United States federal income
tax purposes.
(J) "BENEFICIAL OWNERSHIP" has the meaning assigned to such
term in Section 1.1(q).
(K) "BUSINESS" has the meaning assigned to such term in the
preamble.
(L) "BUSINESS DAY" means any day on which commercial banks
in the City of New York, New York, are open for business.
(M) "CAPITAL ACCOUNTS" means the Capital Accounts of the
Members established in accordance with Section 4.4 hereof.
(N) "CAPITAL CONTRIBUTION" means the aggregate amount of
cash and the Asset Value of any property other than cash contributed
to the Company by a Member in accordance with Article IV hereof.
(O) "CAPITALIZATION AGREEMENTS" means the Genlyte
Capitalization Agreement and the ▇▇▇▇▇▇ Capitalization Agreement.
(P) "CERTIFICATE" means the Certificate of Formation of the
Company filed with the Secretary of State of Delaware, as amended or
restated from time to time.
(Q) "CHANGE OF CONTROL" shall mean with respect to a party
the occurrence of any of the following events: (i) an acquisition
(whether directly from such party or otherwise) of any voting
securities of such party (the "VOTING SECURITIES") by any "PERSON" (as
the term is used for purposes of Section 13(d) or 14(d) of the
Exchange Act), immediately after which such Person has or would have
"BENEFICIAL OWNERSHIP" (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of twenty-five percent (25%) or more of the
combined voting power of such party's then outstanding Voting
Securities; (ii) the individuals who, as of the date hereof, are
members of the Board of Directors of such party (the "INCUMBENT
BOARD"), cease for any reason to constitute at least seventy-five
percent (75%) of the Board of Directors; provided, however, a "Change
of Control" shall not be deemed to occur if any of such individuals
voluntarily fail to stand for re-election or resign or if the
aggregate number of Directors is reduced so long as, after giving
effect to such failure to stand for re-election, resignation or
reduction, at least seventy-five percent (75%) of the remaining
Directors are members of the Incumbent Board; provided further,
however, that if the election, or nomination for election, by such
party's stockholders of any new director was approved by a vote of at
least seventy-five percent (75%) of the Incumbent Board, such new
director shall, for purposes of this Agreement, be considered a member
of the Incumbent Board; provided further, however, that an individual
shall not be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened "ELECTION CONTEST" (as described in Rule 14a-11 promulgated
under the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board
of Directors (a "PROXY CONTEST") including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy Contest;
(iii) the consummation of, or agreement to consummate: (A) a merger,
consolidation, share exchange or reorganization of such party in which
the stockholders of such party, as a group, cease to hold a majority
equity interest in the surviving entity; (B) a liquidation or
dissolution of or appointment of a receiver, rehabilitator,
conservator or similar person for, such party; or (C) the sale or
other disposition of all or substantially all of the assets of such
party to any Person (other than a transfer to a subsidiary); or (iv)
any other change in "control" of such party. For purposes of the
immediately preceding clause, the term "control" shall have the
meaning ascribed thereto pursuant to Rule 405 of the rules and
regulations of the SEC promulgated pursuant to the Securities Act of
1933, as amended.
(R) "CHANGE OF CONTROL DATE" means the date the Change of
Control occurred.
(S) "CLOSING" has the meaning assigned to it in the Master
Transaction Agreement.
(T) "CLOSING DATE" has the meaning assigned to it in the
Master Transaction Agreement.
(U) "CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statute to such Code.
(V) "COMPANY" means GT Lighting, LLC, the limited liability
company formed by the filing of the Certificate, as constituted from
time to time.
(W) "CONTRACT" has the meaning assigned to such term in the
Genlyte Capitalization Agreement or the ▇▇▇▇▇▇ Capitalization
Agreement, as the case may be.
(X) "CONTRIBUTED ASSETS" has the meaning assigned to such
term in Section 4.1.
(Y) "DEADLOCK" has the meaning assigned to such term in
Section 10.6.
(Z) "DEADLOCK DATE" has the meaning assigned to such term
in Section 10.6.
(AA) "DEFICIENCY" has the meaning assigned to such term in
Section 4.2.
(BB) "DEPRECIATION" for any Fiscal Year or other period
means the cost recovery deduction with respect to an asset for such
year or other period as determined for United States federal income
tax purposes, provided that if the Asset Value of such asset differs
from its Basis at the beginning of such year or other period,
Depreciation shall be determined as provided in Regulation
section1.704-1(b)(2)(iv)(g)(3).
(CC) "DISPUTE" has the meaning assigned to such term in
Section 15.14.
(DD) "EBITDA" means earnings before interest, taxes,
depreciation and amortization of the Company, calculated in accordance
with United States generally accepted accounting principles.
(EE) "EFFECTIVE DATE" has the meaning assigned to such term
in Section 2.9.
(FF) "ESTIMATED QUARTERLY LIABILITY" has the meaning
assigned to such term in Section 6.2(a).
(GG) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
(HH) "FAIR MARKET VALUE" has the meaning assigned to such
term in Section 10.9(a).
(II) "FISCAL YEAR" means the period from January 1 through
December 31 each year.
(JJ) "GENLYTE" means The Genlyte Group Incorporated, a
Delaware corporation.
(KK) "GENLYTE CAPITALIZATION AGREEMENT" means the
Capitalization Agreement dated April 28, 1998 by and between the
Company and Genlyte.
(LL) "GENLYTE CONTRIBUTED ASSETS" means the assets
contributed by Genlyte to the Company pursuant to the Genlyte
Capitalization Agreement.
(MM) "INCUMBENT BOARD" has the meaning assigned to such term
in Section 1.1(q)
(NN) "INITIAL APPRAISER" has the meaning assigned to such
term in Section 10.9(b).
(OO) "INITIAL MEMBERS" means ▇▇▇▇▇▇ and Genlyte.
(PP) "INTEREST" means, with respect to any Member at any
time, the entire interest of such Member in the Company at such time.
Such Interest includes, without limitation, (i) a right of a Member to
receive distributions of revenues, allocations of income and loss and
distributions of liquidation proceeds under this Agreement and
(ii) all management rights, voting rights or rights to consent of a
Member.
(QQ) "ISSUANCE ITEMS" has the meaning assigned to such term
in Section 5.5.
(RR) "LIFO" has the meaning assigned to such term in Section
12.7.
(SS) "LIQUIDATION PROCEEDS" means all property at the time
of liquidation of the Company and all proceeds thereof.
(TT) "LITIGATION" means the case entitled ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
et al., as Trustees of the ▇▇▇▇▇ Creditors Trust v. Bairnco
Corporation, et al., 96 Civ. 7600 (DC) (S.D.N.Y.) involving Genlyte,
including any litigation related thereto and the liabilities and legal
fees associated therewith.
(UU) "MANAGEMENT BOARD" means the management board of the
Company, appointed in writing by the Members and established pursuant
to Article VII hereof.
(VV) "MASTER TRANSACTION AGREEMENT" means the Master
Transaction Agreement dated April 28, 1998 by and between ▇▇▇▇▇▇ and
Genlyte.
(WW) "MEMBERS" means the Initial Members and Persons who
have been admitted under Section 3.2.
(XX) "MEMBER ASSUMED TAX RATE" has the meaning assigned to
such term in Section 6.2(a).
(YY) "MEMBER TAX LIABILITY" has the meaning assigned to such
term in Section 6.2(a).
(ZZ) "NONCOMPETE PERIOD" has the meaning assigned to such
term in Article XIII.
(AAA) "NON-TRANSFERRING MEMBER" has the meaning assigned to
such term in Section 10.9(b).
(BBB) "OFFER EXERCISE DATE" means the date of the Offer
Exercise Notice.
(CCC) "OFFER EXERCISE NOTICE" has the meaning assigned to
such term in Section 10.7.
(DDD) "OFFER RIGHT" has the meaning assigned to such term in
Section 10.7.
(EEE) "PERCENTAGE INTEREST" means, with respect to any Member
at any time, the percentage as set forth in Schedule 4.1.
(FFF) "PERSON" means any individual, partnership, limited
liability company, corporation, cooperative, trust, estate or other
entity.
(GGG) "PRELIMINARY FAIR MARKET VALUE" has the meaning
assigned to such term in Section 10.9(b).
(HHH) "PROFITS" and "LOSSES" for any Fiscal Year or other
period means an amount equal to the Company's taxable income for
United States federal income tax purposes for such year or period
determined in accordance with Code section703(a) and the Regulations
thereunder with the following adjustments:
(i) all items of income, gain, loss and deduction
of the Company required to be stated separately shall be
included in taxable income or loss;
(ii) income of the Company exempt from United
States federal income tax shall be treated as taxable
income;
(iii) expenditures of the Company described in Code
section705(a)(2)(B) or treated as such expenditures under
Regulation section1.704-1(b)(2)(iv)(i) shall be subtracted
from taxable income;
(iv) in the event of an adjustment to the value of
any asset in accordance with Section 1.1(h)(iii), the amount
of such adjustment shall be treated as gain (if an increase)
or loss (if a decrease) from the disposition of such asset
for the purpose of computing Profits and Losses;
(v) gain or loss resulting from the disposition
of property from which gain or loss is recognized for United
States federal income tax purposes shall be determined with
reference to the Asset Value of such property;
(vi) Depreciation shall be determined based upon
Asset Value instead of as determined for United States
federal income tax purposes; and
(vii) items which are specially allocated under
Section 5.3 of this Agreement shall not be taken into
account.
(III) "PROXY CONTEST" has the meaning assigned to such term
in Section 1.1(q)
(JJJ) "PUT EXERCISE NOTICE" has the meaning assigned to such
term in Section 10.4(a).
(KKK) "PUT PRICE" has the meaning assigned to such term in
Section 10.4(b).
(LLL) "PUT RIGHT" has the meaning assigned to such term in
Section 10.4(a).
(MMM) "REGULATIONS" means the United States federal income
tax regulations, including temporary (but not proposed) regulations,
promulgated under the Code.
(NNN) "RELATED PARTY" shall have the meaning assigned to such
term in Section 10.1.
(OOO) "REPRESENTATIVES" means the persons serving on the
Management Board.
(PPP) "SEC" means the Securities and Exchange Commission.
(QQQ) "SECURITIES LAWS" has the meaning assigned to such term
in Section 14.4.
(RRR) "SERVICES AGREEMENT" means the Services Agreement by
and between the Company and ▇▇▇▇▇▇, in a form mutually acceptable to
the parties.
(SSS) "TAX BOOK LOSS" means, for any Fiscal Year, the sum of
(i) the Company's Losses for such Fiscal Year and (ii) the allocations
made pursuant to Section 5.3 (other than any allocation made pursuant
to Section 5.3(e)) for such Fiscal Year.
(TTT) "TAX YEAR" means the Company's fiscal year for United
States federal income tax purposes and shall be the Fiscal Year.
(UUU) "TERRITORY" has the meaning assigned to such term in
Article XIII.
(VVV) "THIRD APPRAISER" has the meaning assigned to such term
in Section 10.9(c).
(WWW) "▇▇▇▇▇▇" means ▇▇▇▇▇▇ Industries Inc., a Delaware
corporation, as well as any of ▇▇▇▇▇▇'▇ wholly-owned subsidiaries
which may, from time to time, hold a portion of ▇▇▇▇▇▇'▇ Interest.
(XXX) "▇▇▇▇▇▇ CAPITALIZATION AGREEMENT" means the
Capitalization Agreement dated April 28, 1998 by and between the
Company and ▇▇▇▇▇▇.
(YYY) "▇▇▇▇▇▇ CONTRIBUTED ASSETS" means the assets
contributed by ▇▇▇▇▇▇ to the Company pursuant to the ▇▇▇▇▇▇
Capitalization Agreement.
(ZZZ) "TRANSFER" means (a) when used as a verb, to give,
sell, exchange, assign, transfer, pledge, lease, hypothecate or
otherwise dispose of, grant a security interest in or encumber (but
shall not include an assignment, pledge or hypothecation of rights to
receive distributions pursuant to Article VI or otherwise hereunder),
and (b) when used as a noun, the nouns corresponding to such verbs, in
either case voluntarily or involuntarily, by operation or law or
otherwise, including any merger, consolidation or sale or exchange of
securities.
(AAAA) "TRANSFER CLOSING DATE" has the meaning assigned to
such term in Section 10.8
(BBBB) "TRANSFERRING MEMBER" has the meaning assigned to such
term in Section 10.9(b).
(CCCC) "UNDERSIGNED" has the meaning assigned to such term in
Article XIV.
(DDDD) "VALUATION DATE" means the date of the Put Exercise
Notice, the Change of Control Date or the Deadlock Date, as the case
may be.
(EEEE) "VOTING SECURITIES" has the meaning assigned to such
term in Section 1.1(q).
ARTICLE II
FORMATION
2.1. Formation and Duration. The Company was formed under the Act
effective upon the filing of the Certificate with the Secretary of State of
Delaware and shall continue until dissolved pursuant to Article XI. The Members
shall, to the extent required by law, and otherwise the Management Board or
authorized officers of the Company shall, execute all amendments to the
Certificate and do all filing, recording and other acts as may be appropriate
under the Act. The Members hereby adopt this Agreement as the limited liability
company agreement of the Company.
2.2. NAME. The name of the Company is GT LIGHTING, LLC To the extent
permitted by the Act, the Company may conduct its business under one or more
assumed names approved by the Management Board.
2.3. PRINCIPAL OFFICE, REGISTERED OFFICE AND REGISTERED AGENT.
(a) The principal office of the Company shall be located at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place(s) as the
Management Board may determine from time to time.
(b) The location of the registered office and the name of the
registered agent of the Company in the state of Delaware shall be as stated in
the Certificate, as determined from time to time by the Management Board.
2.4. PURPOSE OF COMPANY. The purpose of the Company is to engage in
the Business, any lawful business, purpose or activity for which limited
liability companies may be formed under the Act and any and all activities
necessary or incidental to the foregoing.
2.5. POWERS. The Company shall have all power to do any and all acts
and things necessary, appropriate, advisable or convenient for the furtherance
and accomplishment of the purposes of the Company, including to engage in any
kind of activity and to enter into and perform obligations of any kind necessary
to, or in connection with, or incidental to, the accomplishment of the purposes
of the Company, as long as the activities and obligations may be lawfully
engaged in or performed by a limited liability company under the Act.
2.6. FISCAL YEAR. The Company's first fiscal year shall begin on the
Effective Date and end on December 31, 1998. The Company's subsequent fiscal
years shall begin on January 1 and end on December 31 of each succeeding year.
2.7. QUALIFICATION IN OTHER JURISDICTIONS. The Management Board shall
have authority to cause the Company to do business in all jurisdictions in which
the Company shall be required to be so qualified.
2.8. NO STATE-LAW PARTNERSHIP. No provisions of this Agreement shall
be deemed or construed to constitute the Company a partnership (including,
without limitation, a limited partnership) or joint venture, or to constitute
any Member or Representative a partner or joint venturer of or with any other
Member or Representative, for any purposes other than federal and state tax
purposes.
2.9. EFFECTIVE DATE AND TERMINATION. This Agreement shall become
effective on the Closing Date (the "EFFECTIVE DATE"). In the event the Closing
does not occur and the Master Transaction Agreement terminates in accordance
with the terms thereof, this Agreement shall not become effective and shall be
null and void and all of the rights and obligations of the parties hereunder
shall also terminate and be null and void and of no force and effect
simultaneously with the termination of the Master Transaction Agreement.
ARTICLE III
MEMBERS
3.1. Initial Members. As of the date hereof, there are no Members
other than the Initial Members, and no other Person has any right to take part
in the ownership of the Company.
3.2. ADMISSION OF ADDITIONAL MEMBERS. Additional Members of the
Company may only be added if the addition of any such proposed additional Member
is made pursuant to Article X, or is approved in writing, prior to such
admission, by all of the then existing Members, and, in either such case, such
proposed additional Member satisfies the requirements of Section 10.2.
3.3. AGREEMENTS WITH MEMBERS OR AFFILIATES. The Company may, subject
to Section 7.5, enter into contracts or other forms of agreement to acquire,
sell or otherwise dispose of goods or services with a Member or any Affiliate of
a Member. The validity of any transaction, contract, agreement, or payment
involving the Company and any Member or Affiliate of any Member otherwise
permitted under the terms of this Agreement shall not be affected by reason of
(a) the relationship between the Company and such Member or Affiliate, or (b)
the approval of said transaction, contract, agreement, or payment by officers,
directors, or employees of such Member or Affiliate or of the Company; provided,
however, that the terms of any such transaction, contract or agreement shall be
on an arm's length basis.
3.4. AUTHORITY TO EXECUTE DOCUMENTS TO BE FILED UNDER THE ACT. The
Management Board or authorized officers of the Company shall have the power and
authority to execute on behalf of the Company any document required or permitted
to be filed by the Company with the Secretary of State of Delaware pursuant to
the terms of the Act.
3.5. POWERS OF THE MEMBERS. Except as otherwise provided herein, no
Member, acting solely in its capacity as a Member, shall act as an agent of the
Company or have any authority to act for the Company.
3.6. LIABILITY OF MEMBERS. Except as explicitly set forth in any
Capitalization Agreement or agreed to in writing by any Member, no Member shall,
nor shall any Representative, stockholder, officer, director or employee of any
Member, be liable for any debts, liabilities or obligations of the Company under
any theory of liability (including indemnification, contribution or
subrogation); provided that each Member shall be responsible:
(a) for the making of any Capital Contribution to the
Company required to be made by such Member pursuant to the terms of
this Agreement or the Genlyte Capitalization Agreement or ▇▇▇▇▇▇
Capitalization Agreement, as the case may be; and
(b) for the amount of any distribution made to such Member
that must be returned to the Company pursuant to the Act.
3.7. ACTS OF MEMBERS. Subject to Article VII, if, and only if, the
Act expressly requires that the Members act, an act of the Members consists of
either:
(a) a vote of the Members holding more than an aggregate of
50% of the Percentage Interests of the Company present at a properly
called meeting of the Members when a quorum is present; provided,
however, that with respect to the matters set forth in Sections 4.2
and 7.5 and for purposes of determining Asset Value, a majority of the
Members, each of which will be entitled to one vote, will be required;
provided further, however, that this Section 3.7 shall affect Article
VII only to the extent that the Act expressly requires that the
Members act and that such requirement may not be altered by any
agreement by the members of a limited liability company to the
contrary; or
(b) written action without a meeting, as provided in
Section 3.14.
3.8. SPECIAL MEETINGS.
(a) A special meeting of the Members may be called for any purpose or
purposes at any time by the Management Board, or by the Chairman of the Board
and the President.
(b) For any special meeting of the Members not called by an act of
the Management Board, those persons demanding the special meeting must give
written notice to the Management Board specifying the purposes of the meeting.
Within thirty (30) days after the receipt of a demand under this Section, the
Management Board must call a special meeting of the Members. If the Management
Board fails to call the special meeting as required by this Section, the person
or persons making the demand may, at the expense of the Company, call the
meeting by giving the notice described in Section 3.9.
3.9. NOTICE OF MEETINGS. Written notice of each meeting of the
Members, stating the date, time, and place and, in the case of a special
meeting, the purpose or purposes, must be given to every Member at least ten
(10) days and not more than sixty (60) days prior to the meeting. The business
transacted at a special meeting of Members is limited to the purposes stated in
the notice of the meeting.
3.10. LOCATION AND CONDUCT OF THE MEETINGS; ADJOURNMENT.
(a) Each meeting of the Members will be held at the Company's
principal place of business or at some other suitable location as designated by
the Management Board.
(b) The Chairman of the Board or, in his absence, the President,
shall chair each meeting of the Members.
(c) Any meeting of the Members may be adjourned from time to time to
another date and time and, subject to Section 3.10(a), to another place. If at
the time of adjournment the person chairing the meeting announces the date, time
and place at which the meeting will be reconvened, it is not necessary to give
any further notice of the reconvening.
(d) To the extent permitted by law, a Member participating in a
meeting by conference telephone or similar communications equipment by which all
persons participating in the meeting can hear and speak to each other will be
deemed present in person at the meeting and all acts taken by such Member during
his, her or its participation shall be deemed taken at the meeting.
3.11. WAIVER OF NOTICE OF MEETING.
(a) A Member may waive notice of the date, time, place and purpose or
purposes of a meeting of Members. A waiver may be made before, at or after the
meeting, in writing, orally or by attendance.
(b) Attendance by a Member at a meeting is a waiver of notice of that
meeting, unless the Member objects at the beginning of the meeting to the
transaction of business because the meeting is not properly called or convened,
or objects before a vote on an item of business because the item may not
properly be considered at that meeting and does not participate in the
consideration of the item at that meeting.
3.12. PROXIES. A Member may cast or authorize the casting of a vote by
filing a written appointment of a revocable proxy with the Chairman of the Board
or the President of the Company at or before the meeting at which the
appointment is to be effective. The Member may sign or authorize the written
appointment by telecopy or other means of electronic transmission stating, or
submitted with information sufficient to determine, that the Member authorized
the transmission. Any copy, facsimile, telecommunication or other reproduction
of the original of either the writing or the transmission may be used in lieu of
the original, if it is a complete and legible reproduction of the entire
original. A Member may not grant or appoint an irrevocable proxy.
3.13. QUORUM. For any meeting of the Members, a quorum consists of a
majority of the Percentage Interests or the Members as the case may be.
3.14. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at a meeting of the Members may be taken without a meeting by written
action signed by the Members who own the Percentage Interests equal to the
Percentage Interests or by the necessary number of Members, as the case may be,
that would be required to take the same action at a meeting of the Members at
which all Members were present. Such written action may specify a prior or
subsequent effective date.
ARTICLE IV
CAPITALIZATION OF THE COMPANY
4.1. Initial Capital Contributions.
(a) On the Effective Date, ▇▇▇▇▇▇ shall contribute to the Company the
▇▇▇▇▇▇ Contributed Assets pursuant to the ▇▇▇▇▇▇ Capitalization Agreement and
Genlyte shall contribute to the Company the Genlyte Contributed Assets pursuant
to the Genlyte Capitalization Agreement. The ▇▇▇▇▇▇ Contributed Assets and the
Genlyte Contributed Assets are hereinafter referred to as the "CONTRIBUTED
ASSETS."
(b) All Capital Contributions of the Members shall be reflected in
the books and records of the Company. Any cash Capital Contribution shall be in
lawful currency of the United States of America. The Contributed Assets shall
be deemed to have the value, in the aggregate, set forth in a Schedule 4.1(a) to
be mutually agreed upon in writing by the Members prior to the Effective Date.
4.2. ADDITIONAL CAPITAL CONTRIBUTIONS. If additional capital is
required by the Company and all of the Members agree that additional capital can
be contributed by the Members, each Member shall have the right, but not the
obligation, to advance as an additional Capital Contribution (the "ADDITIONAL
CAPITAL CONTRIBUTION") its proportionate share, based on the Percentage Interest
of such Member as of the date of contribution, of the total amount of capital
required. If a Member does not contribute to the Company the full amount of its
share of the Additional Capital Contribution that the Member is entitled to
contribute pursuant to this Section 4.2 (the "DEFICIENCY"), the other Members
shall have the right, but not the obligation, to advance, as an Additional
Capital Contribution, their proportionate share, based on the contributing
Members' Percentage Interests, of the Deficiency. The making of any Additional
Capital Contribution by a Member shall not change any Member's Percentage
Interest.
4.3. CAPITAL WITHDRAWAL RIGHTS, INTEREST AND PRIORITY. Except as
expressly provided in this Agreement:
(a) no Member shall be entitled to withdraw or reduce such
Member's Capital Contribution or any amount from its Capital Account
or to receive any distributions from the Company;
(b) no Member shall be entitled to demand or receive
property other than cash in return for such Member's Capital
Contribution; and
(c) no Member shall be entitled to receive or be credited
with any interest on the balance of such Member's Capital Contribution
or Capital Account at any time.
4.4. CAPITAL ACCOUNTS.
(a) A Capital Account shall be maintained for each Member in
accordance with Regulation sectionsection1.704-1(b) and 1.704-2 and to which the
following provisions apply to the extent not inconsistent with such Regulation:
(i) There shall be credited to each Member's Capital
Account (A) such Member's Capital Contributions; (B) such Member's
distributive share of Profits; (C) any items of income or gain
specially allocated to such Member under Section 5.3 of this
Agreement; and (D) the amount of any Company liabilities (determined
as provided in Code section752(c) and the Regulations thereunder)
assumed by such Member or to which property distributed to such Member
is subject;
(ii) There shall be debited to each Member's Capital Account
(A) the amount of money and the Asset Value of any property
distributed or paid as a redemption to such Member pursuant to this
Agreement; (B) such Member's distributive share of Losses; (C) any
items of expense or loss which are specially allocated to such Member
under Section 5.3 of this Agreement; and (D) the amount of liabilities
(determined as provided in Code section752(c) and the Regulations
thereunder) of such Member assumed by the Company or to which property
contributed to the Company by such Member is subject; and
(iii) The Capital Account of any Transferee (as defined
below) shall include the appropriate portion of the Capital Account of
the Member from which the Transferee's Interest was obtained.
(b) The Members intend that Capital Accounts be maintained in
accordance with Regulation sectionsection1.704-1(b) and 1.704-2, and to
accomplish that purpose the Members are authorized to modify the manner in which
the Capital Accounts are maintained and adjustments thereto are computed, and to
make any appropriate adjustments thereto, so that Capital Account balances will
be maintained consistent with such Regulation, provided that such modifications
and adjustments will not materially affect the amount distributed to any Member
upon dissolution of the Company.
4.5. SECTION 754 ELECTION. In case of a distribution of property made
in the manner provided in Section 734 of the Code, or in the case of a Transfer
of any interest in the Company permitted by this Agreement made in the manner
provided in Section 743 of such Code, the Management Board, on behalf of the
Company, may file an election under Section 754 of the Code in accordance with
the procedures set forth in the applicable Regulations and shall file such an
election in a timely manner at the request of any Member affected by the
distribution or Transfer.
ARTICLE V
PROFIT AND LOSS ALLOCATIONS
5.1. Profits and Losses. Subject to the special allocation
provisions of Sections 5.3, 5.4 and 5.5 of this Agreement, Profits or Losses of
the Company for any Tax Year shall be allocated to the Members in accordance
with their Percentage Interests.
5.2. GENERAL PROVISIONS.
(a) Except as otherwise provided in this Agreement, the Members'
distributive shares of all items of Company income, gain, loss, and deduction
for United States federal income tax purposes shall be the same as their
distributive shares of Company Profits and Losses.
(b) To the extent permitted by Regulations section1.704-2(i)(6) and
section1.704-2(h), the Members shall endeavor to avoid treating distributions of
cash as being from the proceeds of a Nonrecourse Liability (as defined under
Regulation section1.704-2 (b)(3)) or a Member Nonrecourse Debt (as determined
under Regulation section1.704-2(b)(4)).
(c) If there is a change in any Member's Percentage Interest during a
Tax Year, each Member's distributive share of Profits or Losses or any item
thereof for such Tax Year, shall be determined by the proration method
prescribed by Code section706(d) or the Regulations thereunder.
(d) The Members agree to report their shares of income and loss for
United States federal income tax purposes in accordance with the provisions of
this Article V.
5.3. SPECIAL PROVISIONS.
(a) Minimum Gain Chargeback. Notwithstanding any other provision of
this Article V, if there is a net decrease in Company Minimum Gain (as defined
in Regulation section1.704-2(d)) during any Tax Year, then each Member shall be
allocated such amount of income and gain for such year (and subsequent years, if
necessary) determined under and in the manner required by Regulation
section1.704-2(g)(1) and (g)(3) as is necessary to meet the requirements for a
minimum gain chargeback as provided in Regulation section1.704-2(f).
(b) Member Nonrecourse Debt Minimum Gain Chargeback.
Notwithstanding any other provision of this Article V except Section 5.3(a), if
there is a net decrease in Member Nonrecourse Debt Minimum Gain (as determined
in accordance with Regulation section1.704-2(i)(5)) attributable to a Member
Nonrecourse Debt (as defined in Regulation section1.704-2(b)(4)) during any Tax
Year, any Member who has a share of the Member Nonrecourse Debt Minimum Gain
attributable to such Member Nonrecourse Debt determined in accordance with
Regulation section1.704-2(i)(5) shall be allocated such amount of income and
gain for such year (and subsequent years, if necessary) determined under and in
the manner required by Regulation section1.704-2(i)(4) as is necessary to meet
the requirements for a minimum gain chargeback as is provided in that
Regulation.
(c) Qualified Income Offset. If a Member unexpectedly receives any
adjustment, allocation or distribution described in Regulation section1.704-
1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain shall be
specially allocated to such Member in an amount and manner sufficient to
eliminate, to the extent required by the Regulations, the Adjusted Capital
Account Deficit of such Member as quickly as possible, provided that an
allocation pursuant to this subsection (c) shall be made only if and to the
extent that such Member would have an Adjusted Capital Account Deficit after all
other allocations provided for in this Section 5.3 of this Agreement tentatively
have been made as if this subsection (c) were not in this Agreement.
(d) Limitation on Losses. Notwithstanding any other provision of
this Agreement, Losses allocated to any Member pursuant to this Agreement shall
not exceed the maximum amount of Losses that may be allocated without causing
such Member to have an Adjusted Capital Account Deficit at the end of the Tax
Year for which the allocation is made. Any Loss that cannot be allocated to a
Member as a result of the limitation contained in this subsection (d) shall be
allocated to the other Members to the extent possible; provided, however, that
the Management Board shall have the authority and obligation to specifically
allocate items of Company income and gain for subsequent years in an amount and
manner sufficient to offset the Loss so allocated to the other Members.
(e) Code section754 Adjustment. To the extent that an adjustment to
the Basis of any asset pursuant to Code section734(b) or Code section743(b) is
required to be taken into account in determining Capital Accounts as provided in
Regulation sectionl.704-1(b)(2)(iv)(m), the adjustment shall be treated (if an
increase) as an item of gain or (if a decrease) as an item of loss, and such
gain or loss shall be allocated to the Members consistent with the allocation of
the adjustment pursuant to such Regulation.
(f) Nonrecourse Deductions. Nonrecourse Deductions (as determined
under Regulation section1.704-2(c)) for any Tax Year shall be allocated to the
Members in accordance with their Percentage Interests.
(g) Member Nonrecourse Deductions. Any Member Nonrecourse Deduction
(as defined in Regulation sectionl.704-2(i)(2)) shall be allocated pursuant to
Regulation section1.704-2(i) to the Member who bears the economic risk of loss
with respect to the Member Nonrecourse Debt to which it is attributable.
(h) Purpose and Application. The purpose and the intent of the
special allocations provided for in this Section 5.3 are to comply with the
provisions of Regulations sectionl.704-1(b) and sectionl.704-2, and such special
allocations are to be made so as to accomplish that result. However, to the
extent possible, the Members in allocating items of income, gain, loss, or
deduction among the Members shall take into account the special allocations in
such a manner that the net amount of allocations to each Member shall be the
same as such Member's distributive share of Profits and Losses would have been
had the events requiring the special allocations not taken place. The Members
shall apply the provisions of this Section 5.3 in whatever order they reasonably
believe will minimize any economic distortion that otherwise might result from
the application of the special allocations.
5.4. CODE section704(C) ALLOCATIONS. Solely for United States
federal, state, and local income tax purposes and not with respect to
determining any Member's Capital Account, distributive shares of Profits,
Losses, other items, or distributions, a Member's distributive share of income,
gain, loss, or deduction with respect to any property (other than money)
contributed to the Company, or with respect to any property, the Asset Value of
which was adjusted as provided in subsection (iii) of the definition of Asset
Value shall be determined in accordance with the principles set forth in
Regulations under Section 704(c) of the Code and the Regulations thereunder.
5.5. ALLOCATIONS RELATING TO TAXABLE ISSUANCE OF INTERESTS. For
United States federal income tax purposes, any income, gain, loss or deduction
realized by the Company as a direct or indirect result of the issuance of any
Interest by the Company (the "ISSUANCE ITEMS") shall be allocated among the
Members so that, to the extent possible, the net amount of such Issuance Items,
together with all other allocations under this Agreement to each Member, shall
be equal to the net amount that would have been allocated to each such Member if
the Issuance Items had not been realized.
ARTICLE VI
DISTRIBUTIONS
6.1. Distributions. Subject to Sections 6.2 and 7.5, distributions
shall be made at such time and in such amounts as determined by the Management
Board and shall be made among the Members in cash or other property in
proportion to their respective Percentage Interests. Notwithstanding anything
to the contrary herein provided, no distribution hereunder shall be permitted to
the extent prohibited by the Act.
6.2. MANDATORY DISTRIBUTIONS. Notwithstanding the above, the Company
shall make the following distributions to its Members:
(a) The Company, upon advice of and review by its
independent accountants, shall determine in good faith the projected
aggregate Member Tax Liability (as defined below) for each fiscal year
or other period computed on a quarterly basis (the "ESTIMATED
QUARTERLY LIABILITY"). The Company shall distribute to each of the
Members an amount equal to the Estimated Quarterly Liability
attributable to such Member's Percentage Interest in the Company not
earlier than fourteen (14) days prior nor later than two (2) days
prior to the date on which such Member's attributable share of such
Estimated Quarterly Liability is due and payable. Any shortfall in
distributions attributable to a difference between the actual Member
Tax Liability and the Estimated Quarterly Liability previously
distributed to the Member for a Fiscal Year shall be distributed no
later than March 13 of the year following such Fiscal Year. The
"MEMBER TAX LIABILITY" with respect to a taxable year means, for each
Member, the product of (x) the net income or net loss of the Company,
calculated as the items of income (other than tax-exempt income), loss
and deduction described in Section 703(a) of the Code allocable to
such Member for United States federal income tax purposes for the
taxable year, reduced by the sum of net losses or deductions (if any)
allocated to such Member by reason of its Percentage Interest in the
Company in prior taxable years and which have not previously reduced
the net income of the Company allocated to such Member for purposes of
calculating the Member Tax Liability, and (y) the Member's Assumed Tax
Rate.
The "MEMBER'S ASSUMED TAX RATE" shall equal:
A + B
where "A" equals the maximum United States federal income tax rate for
taxable income of corporations filing a return under Section 1 of the
Code, and "B" equals the weighted average effective state and local
tax rate for taxable income of the Members allocated to each Member by
reason of their ownership interest in the Company; and
(b) subject to the provisions of the Act and the terms of
the primary credit facility of the Company, distributions (exclusive
of the tax distributions set forth in Section 6.2(a)) to each of its
Members so that ▇▇▇▇▇▇ receives at least an aggregate of $3,000,000
and Genlyte receives at least an aggregate of $6,375,000 per Fiscal
Year from the Company beginning in Fiscal Year 1999; provided,
however, that prior to any distribution under this Section 6.2(b), the
Management Board shall first consult with the Company's tax counsel.
ARTICLE VII
MANAGEMENT
7.1. Management Board. The Company shall have a Management Board
consisting of six (6) Representatives, two (2) of whom shall be appointed by
▇▇▇▇▇▇ and four (4) of whom shall be appointed by Genlyte, (each such person
being referred to as a "REPRESENTATIVE"). Such Representatives shall
collectively be referred to as the "MANAGEMENT BOARD." In the event of the
removal, resignation or death of a Representative, the vacancy promptly shall be
filled by the Member who appointed the departing Representative. The
appointment of each Representative on the Management Board subsequent to the
initial Representatives named in Section 7.2 hereof shall be evidenced by an
appointment, and acceptance of the appointment, in a writing delivered to the
Company by the Member entitled to appoint such Representative. Each
Representative will serve on the Management Board at the pleasure of the Member
appointing him or her, and may be removed and replaced with a substitute at any
time, with or without cause, by such Member. Each Representative shall be an
officer, director or high-ranking management employee of the appointing Member.
7.2. INITIAL MANAGEMENT BOARD. The initial Representatives shall be
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and another director of ▇▇▇▇▇▇ to be appointed by ▇▇▇▇▇▇ ▇▇▇▇▇
to the Effective Date (appointed by ▇▇▇▇▇▇) and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (appointed by Genlyte).
7.3. AUTHORITY OF THE MANAGEMENT BOARD. (a) Except as otherwise
expressly provided in this Article VII, this Agreement and except for situations
in which the approval of the Members is expressly required by provisions of the
Act, the Management Board shall manage and conduct the business and affairs of
the Company and have the exclusive authority (without the need of separate
approval of the Members) to make all decisions regarding the management and
affairs of the Company and to authorize all things necessary, proper, or
desirable to carry out the Business, including the right to make and enter into
any contracts, enter into any transactions, and make and obtain any commitments
on behalf of the Company to conduct or further the Business.
(b) Subject to the foregoing, the day to day operation of the Company
shall be under the direction of the President, who shall report and be
responsible to the Management Board. The Management Board may delegate such of
the above functions as it deems appropriate and necessary to conduct the daily
operations of the Company. Subject to the provisions of this Agreement, the
Management Board may adopt regulations and policies governing the conduct of its
duties.
7.4. ACTION BY THE MANAGEMENT BOARD. Each Representative shall have
one vote in Management Board decisions. Action by the Management Board requires
either:
(a) a resolution approved by the affirmative vote of a
majority of the Representatives at a meeting of the Representatives,
scheduled by a prior act of the Representatives or called upon at
least three (3) Business Days' written notice signed by a
Representative (subject to a Representative's right to waive notice);
or
(b) a written action, signed by all Representatives (such
written action may specify a prior or subsequent effective date).
7.5. APPROVAL REQUIRED FOR CERTAIN MATTERS. Notwithstanding Section
7.4, the following shall require the approval of at least a majority of the
Representatives, including, in all instances, approval by at least one
Representative appointed by ▇▇▇▇▇▇:
(a) removal of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as President and/or Chief
Executive Officer of the Company or selection of a President or Chief
Executive Officer of the Company other than ▇▇▇▇▇ ▇. ▇▇▇▇▇▇;
(b) removal of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ as Chairman of the Board of
the Company;
(c) a material change in the nature of the Business;
(d) except as provided in Sections 10.4, 10.5, 10.6, 10.7,
10.10(c) or 11.2, acquisition of assets or of equity interests by or
on behalf of the Company and its subsidiaries individually or, in the
case of a series of related transactions, in the aggregate, in excess
of $25,000,000;
(e) except as provided in Sections 10.4, 10.5, 10.6, 10.7,
10.10(c) and 11.2, sale, exchange, assignment, transfer, lease or
other disposition of assets of the Company in excess of $25,000,000;
(f) except as provided in Sections 10.4, 10.5, 10.6 and
10.7, the sale, pledge, lease, encumbrance or granting of a security
interest in all or substantially all of the Company's assets unless
pursuant to the incurrence of indebtedness for money borrowed for
which approval is not required pursuant to Section 7.5(h);
(g) except as provided in Sections 10.4, 10.5, 10.6, 10.7,
10.10(c) and 11.2, a consolidation or merger of the Company with or
into any other Person;
(h) except as provided in Sections 10.4, 10.5, 10.6, 10.7
and 10.10(c), incurrence of indebtedness for money borrowed (net of
cash and cash equivalents) by the Company and its subsidiaries in
excess of three times EBITDA for the four (4) calendar quarters
immediately preceding the quarter in which the indebtedness is to be
incurred;
(i) any amendment to (i) this Agreement or (ii) the
Company's Certificate (unless a Member is required by the Act to file
such amendment to correct any false statement in the Certificate or
this Agreement and except in connection with any action permitted to
be taken by the Company or Genlyte pursuant to Sections 10.4, 10.5,
10.6, 10.7 and 10.10(c));
(j) any voluntary liquidation, dissolution or termination
of the Company pursuant to Article XI below, except as provided in
Sections 10.4, 10.5, 10.6, 10.7 or 10.10(c);
(k) any split, combination, reclassification or, except as
otherwise contemplated by this Agreement, redemption of any Interests;
(l) except as provided in Sections 10.4, 10.5, 10.6, 10.7
and 10.10(c), the admission or removal of any Member and the issuance
by the Company of any additional Interests or other equity interests
(including any interests convertible into equity interests) of the
Company;
(m) distributions in amounts less than the amounts required
by Section 6.2; and
(n) any transactions between the Company and Genlyte or
▇▇▇▇▇▇ or their Affiliates, other than pursuant to the Services
Agreement and other than loans by either Member to the Company to the
extent permitted by the Company's credit facility and other
agreements, the terms of which loans are at least as favorable to the
Company as the terms of the Company's then current primary credit
facility.
To the extent required by applicable law, the matters set forth in Sections
7.5, 10.4, 10.5, 10.6, 10.7 and 10.10(c) may also be subject to approval by the
stockholders of ▇▇▇▇▇▇ and Genlyte.
7.6. PLACE OF MEETINGS. The Management Board may hold its meetings at
the principal business office of the Company or at such other place as it may
from time to time determine.
7.7. SALARY AND EXPENSES. Representatives serving on the Management
Board who are not employees or officers of the Company may receive compensation
for serving as a Representative as the Management Board may from time to time
determine. All Representatives shall be reimbursed for reasonable expenses
incurred by them in connection with attendance at the Management Board meetings.
7.8. REGULAR MEETINGS. Regular meetings of the Management Board shall
be held at least quarterly on such dates as established in advance by resolution
of the Management Board.
7.9. SPECIAL MEETINGS. Special meetings of the Management Board may
be called by the President, Chairman of the Board or any three (3)
Representatives by written notice sent to each Representative in accordance with
Section 15.3. hereof. Such meeting shall be set for a date no sooner than five
(5) Business Days after the date the notice is sent.
7.10. ACTION WITHOUT A MEETING. Any action which is required or
permitted to be taken at a meeting of the Management Board may be taken without
a meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, is signed by all of the Representatives of
each Member and filed with the Company.
7.11. TELEPHONE MEETING. Representatives of the Management Board may
participate in a meeting of the Management Board by means of conference
telephone call or other similar communication equipment whereby all persons
participating in the meeting can hear each other. Participation in the meeting
in this manner constitutes presence in person at the meeting.
7.12. RECORDS OF ACTION. Written records of all action taken by the
Management Board, whether at a regular or special meeting or pursuant to written
consent in accordance with the provisions of Section 7.10, shall be kept at the
principal business office of the Company. Copies of all written approvals of
the Members shall also be kept at such office. The Members shall designate the
person, who may but need not be a Representative, charged with the maintenance
and custody of such records.
7.13. WAIVER OF NOTICE. Whenever any notice is required by the Act,
the Certificate or this Agreement, to be given to any Representative or to any
Member, a waiver thereof in writing, signed by the person or persons entitled to
said notice, whether before or after the time stated therein, and delivered to
the Company for inclusion in the minutes or filing with the Company's records,
shall be deemed equivalent thereto.
7.14. RELIANCE ON BOOKS. A Representative shall, in the performance of
his or her duties, be fully protected in relying in good faith upon the books of
account or reports made to the Company by any of its officers, or by an
independent certified public accountant, or by a professional or expert selected
with reasonable care by the Management Board, or in relying in good faith upon
other records of the Company.
7.15. STANDARD OF CARE; LIABILITY. Every Representative shall
discharge his or her duties in good faith and in a manner he or she believes to
be in the best interests of the Company and in accordance with this Agreement.
Subject to Section 7.14, a Representative shall not be liable for any monetary
damages to the Company for any breach of such duties except (a) for receipt of a
financial benefit to which the Representative is not entitled; (b) voting for or
assenting to a distribution to Members in violation of this Agreement or the
Act; or (c) a knowing violation of the law. No amendment or repeal of Sections
7.14 or 7.15 shall affect any liability or alleged liability of any
Representative for any acts, omissions or conduct that occurred prior to the
amendment or repeal.
7.16. CHAIRMAN OF THE BOARD. The Chairman of the Board shall be the
Chairman of the Management Board and shall perform all duties incident to the
office of Chairman of the Board and such other duties as may from time to time
be assigned to the Chairman of the Board by the Management Board.
ARTICLE VIII
OFFICERS
8.1. Appointment. The Management Board shall, from time to time,
appoint one or more individuals to be officers of the Company. The officers of
the Company shall include a President, a Chief Financial Officer, a Secretary
and a Treasurer. Any officers so appointed shall have such authority and
perform such duties as are set forth herein or as the Management Board may, from
time to time, delegate to them. The Management Board may also appoint other
officers (including one or more Vice Presidents, Assistant Treasurers and one or
more Assistant Secretaries) as may be necessary or desirable. Any two or more
offices may be held by the same person. Each officer shall hold office until
his or her successor shall have been duly elected and qualified, or until his or
her death, or until he or she shall have resigned or have been removed, as
provided in this Section 8.3.
8.2. COMPENSATION. The salaries or other compensation, if any, of
the officers of the Company shall be fixed from time to time by the Management
Board.
8.3. RESIGNATIONS. Any officer of the Company may resign at any time
by giving written notice of resignation to the Company. The notice shall be
sent in accordance with the provisions of Section 15.3, and the resignation of
the officer shall take effect on the deemed date of delivery specified in
Section 15.3, 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.
8.4. REMOVAL. Except as set forth in Section 7.5, any officer of the
Company may be removed, either with or without cause, at any time, by the
Management Board.
8.5. OFFICERS. The officers of the Company shall have the following
duties:
(a) President. The President, who may also be the chief
executive officer of the Company, shall perform all duties incident to
the office of President and such other duties as may from time to time
be assigned the President by the Management Board.
(b) Chief Financial Officer. The Chief Financial Officer
shall perform all duties incident to the office of the Chief Financial
Officer and such other duties as may from time to time be assigned to
the Chief Financial Officer by the Management Board or the President.
(c) Vice President. Each Vice President shall perform all
such duties as from time to time may assigned by the Management Board
or the President. At the request of the President or in the event of
his or her inability as a result of death, disability or removal or
refusal to act if required to do so by the Management Board, the Vice
President, or if there shall be more than one, the Vice Presidents in
the order determined by the Management Board (or if there be no such
determination, then the Vice Presidents in the order of their
election), shall perform the duties of the President, and, when so
acting, shall have the powers of and be subject to the restrictions
placed upon the President in respect of the performance of such
duties.
(d) Treasurer. The Treasurer shall: (i) have charge and
custody of, and be responsible for, all the funds and securities of
the Company; (ii) keep full and accurate accounts of receipts and
disbursements in books belonging to the Company; (iii) render to the
Management Board, whenever the Management Board may require, an
account of the financial condition of the Company; and (iv) in
general, perform all duties incident to the office of Treasurer and
such other duties as from time to time may be assigned by the
Management Board or the President.
(e) Secretary. The Secretary shall: (i) keep or cause to
be kept in one or more books provided for the purpose, minutes of all
meetings of the Management Board and the Members; (ii) see that all
notices are duly given in accordance with the provisions of this
agreement and as required by law; (iii) be custodian of the records of
the Company; (iv) see that the required records, books, reports,
statements, certificates and other documents and records required by
law to be kept and filed, are properly kept and filed; and (v) in
general, perform all duties incident to the office of Secretary and
such other duties as from time to time may be assigned to the
Secretary by the Management Board or the President.
(f) Assistant Treasurer. The Assistant Treasurer, or if
there shall be more than one, the Assistant Treasurers in the order
determined by the Management Board (or if there be no such
determination, then in the order of their election), shall, in the
absence of the Treasurer or in the event of his or her inability as a
result of death, disability or removal or refusal to act if required
to do so by the President, Treasurer or the Management Board, perform
the duties and exercise the powers of the Treasurer and shall perform
such other duties as from time to time may be assigned by the
Management Board or the President.
(g) Assistant Secretary. The Assistant Secretary, or if
there be more than one, the Assistant Secretaries in the order
determined by the Management Board (or if there be no such
determination, then in the order of their election), shall, in the
absence of the Secretary or in the event of the Secretary's inability
as a result of death, disability or removal or refusal to act if
required to do so by the President, Secretary or the Management Board,
perform the duties and exercise the powers of the Secretary and shall
perform such other duties as from time to time may be assigned by the
Management Board or the President.
ARTICLE IX
INDEMNIFICATION AND INSURANCE
9.1. Indemnification and Advancement of Expenses.
(a) The Company shall indemnify and hold harmless, to the fullest
extent authorized by law as the same exists, or may hereafter be amended to
permit the Company to provide broader indemnification rights, any Person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he, she or it is or was a
Representative or officer of the Company or officer, employee, representative or
agent of the Company serving at the request of the Company as a director,
officer, manager, employee, representative or agent of another corporation,
limited liability company, general partnership, limited partnership, joint
venture, trust, business trust or other enterprise or entity, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him, her or it in connection with such
action, suit or proceeding if he, she or it acted in good faith and in a manner
he, she or it reasonably believed to be in or not opposed to the best interests
of the Company and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his, her or its conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that such Person did not act in good faith and in a
manner which he, she or it reasonably believed to be in or not opposed to the
best interests of the Company and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his, her or its conduct was
unlawful. Notwithstanding the foregoing, the Company shall not be obligated to
indemnify any Person to the extent that a claim for indemnification arises out
of a breach of the standard of care contained in Section 7.15 of this Agreement.
(b) To the extent that a Representative, officer, employee,
representative or agent of the Company has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
Section 9.1(a), or in defense of any claim, issue or matter therein, he, she or
it shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him, her or it in connection therewith.
(c) Any indemnification under this Section 9.1 (unless ordered by a
court of competent jurisdiction) shall be made by the Company only as authorized
in the specific case upon a determination that indemnification of the
Representative, officer, employee, representative or agent is proper in the
circumstances because he, she or it has met the applicable standard of conduct
set forth in Section 9.1(a). Such determination shall be made (i) by the
Management Board by a majority vote of Representatives who were not parties to
such action, suit or proceeding or (ii) if the disinterested Representatives so
direct, by independent legal counsel in a written opinion.
(d) Expenses (including attorneys' fees) incurred by a
Representative in defending any civil, criminal, administrative or investigative
action, suit or proceeding shall be paid by the Company in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such Representative to repay such amount if it shall ultimately
be determined that he, she or it is not entitled to be indemnified by the
Company pursuant to this Section 9.1. Such expenses (including attorneys' fees)
incurred by other officers, employees, representatives and agents shall be so
paid upon such terms and conditions, if any, as the Management Board deems
appropriate.
(e) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 9.1 shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may be
entitled under any agreement, vote of disinterested Representatives or
otherwise, both as to action in an official capacity and as to action in another
capacity while holding such office.
(f) For purposes of this Section 9.1, any reference to the "Company"
shall include, in addition to the resulting or surviving entity, any constituent
entity (including any constituent of a constituent) absorbed in a consolidation
or merger which, if its separate existence had continued, would have had power
and authority to indemnify its directors, officers, managers, members,
employees, representatives or agents, so that any Person who is or was a
director, officer, manager, member, employee, representative or agent of such
constituent entity, or is or was serving at the request of such constituent
entity as a director, officer, manager, employee, representative or agent of
another entity, limited liability company, general partnership, limited
partnership, joint venture, trust, business trust or other enterprise or entity,
shall stand in the same position under the provisions of this Section 9.1 with
respect to the resulting or surviving entity as he, she or it would have with
respect to such constituent entity if its separate existence had continued;
provided, however, that nothing contained herein shall require the Company to
indemnify any director, officer, manager, member, employee, representative or
agent of any Member who is not also a director, officer, manager, member,
employee, representative or agent of the Company.
(g) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 9.1 shall continue as to a Person who has
ceased to be a Representative, officer, employee, representative or agent and
shall inure to the benefit of the heirs, executors, administrators, successors
and assigns of such Person.
(h) In addition to the foregoing provisions of Article IX, the
Company shall have the power, to the full extent provided by law, to indemnify
any person for any act or omission of such person against all loss, cost, damage
and expense (including attorneys' fees) if such person is determined (in the
manner provided in Section 9.1(c) hereof), to have acted in good faith and in a
manner he or she reasonably believed to be in, or not opposed to, the best
interest of the Company.
(i) Notwithstanding anything in this Article to the contrary, the
Company will not have the obligation of indemnifying any Person with respect to
proceedings, claims or actions initiated or brought voluntarily by such Person
and not by way of defense.
9.2. INSURANCE. The Company may purchase and maintain insurance or
another arrangement on behalf of any Person who is or was a Representative,
officer, employee, representative or agent identified in Section 9.1, or is or
was serving at the request of the Company as a director, officer, manager,
employee, representative or agent of another entity, limited liability company,
general partnership, limited partnership, joint venture, trust, business trust
or other enterprise or entity, against any liability asserted against such
Person or incurred by such Person in such a capacity or arising out of the
status of such a Person, whether or not the Company would have the power to
indemnify such Person against that liability under Section 9.1 or otherwise.
9.3. LIMIT ON LIABILITY OF MEMBERS. The indemnification set forth in
this Article IX shall in no event cause the Members to incur any personal
liability beyond their total net Capital Contributions, nor shall it result in
any liability of the Members to any third Person.
ARTICLE X
TRANSFERS, WITHDRAWALS AND DEADLOCK
10.1. General Restriction on Transfers and Withdrawals. (a) Except as
set forth in Sections 10.4, 10.5, 10.6, 10.7 and 10.10, no Member may Transfer
all or any part of this Agreement or such Member's Interest without the written
approval of each Non-Transferring Member (as hereinafter defined); provided,
however, that a Member may transfer its Interest to its parent, which shall be
▇▇▇▇▇▇ or a wholly-owned subsidiary of ▇▇▇▇▇▇, or a wholly-owned subsidiary
(collectively, "RELATED PARTY") existing as of the date hereof. No Member may
resign or withdraw from the Company except as provided in this Article X,
without the approval of the Non-Transferring Member.
(b) Subject to the Member's rights under Sections 10.4, 10.5, 10.6, 10.7
and 10.10, no transfer which would result in a termination of the Company under
Section 708(b)(1)(B) of the Code shall be effective unless and until approved by
the Non-Transferring Members.
(c) Any purported Transfer of all or any part of this Agreement or an
Interest in violation of the terms of this Agreement shall be null and void and
of no effect. A permitted Transfer shall be effective as of the date specified
in the instruments relating thereto. Any transferee Member desiring to make a
further Transfer shall be subject to all the provisions of this Article X to the
same extent and in the same manner as any Member desiring to make any Transfer.
10.2. ASSIGNEES AND SUBSTITUTE MEMBERS.
(a) Unless and until admitted as a substitute Member as provided
below, a permitted Transferee of a Member's Interest in whole or in part shall
be an assignee with respect to such Interest or portion thereof and shall not be
entitled to participate in the management of the Business and affairs of the
Company or to become or to exercise the rights of a Member, including the right
to vote, the right to appoint Representatives, the right to require any
information or accounting of the Business or the right to inspect the Company's
books and records or its facilities. Such Transferee shall only be entitled to
receive, to the extent of the Interest Transferred to such Transferee, the share
of distributions, including distributions representing the return of Capital
Contributions, to which the Transferor would otherwise be entitled with respect
to the Transferred Interest or portion thereof.
(b) No Transferee of all or part of a Member's Interest shall become
a substitute Member unless and until:
(i) such Transferee has executed an instrument accepting
and adopting the terms and provisions of the Certificate, this
Agreement and any other documents or agreements executed in connection
herewith; and
(ii) subject to Section 10.5, except in respect of a
Transfer from a Member to a Related Party of such Member, each non-
Transferring Member shall have consented in writing to such Transferee
becoming a substitute Member, which consent shall not be unreasonably
withheld if the conditions set forth in Section 10.2(b)(i) above are
satisfied.
(c) Upon satisfaction of all the foregoing conditions with respect to
a particular Transferee, the Management Board shall cause the books and records
of the Company to reflect the admission of the Transferee as a substitute Member
to the extent of the Interest or portion thereof held by the Transferee.
10.3. EFFECT OF ADMISSION AS A SUBSTITUTE MEMBER. A Transferee who has
become a substitute Member has, to the extent of the Interest Transferred to
such substitute Member, all the right, power and benefit and is subject to all
the restrictions and liabilities of a Member under the Certificate, this
Agreement and the Act. Upon admission of a Transferee as a substitute Member,
the Transferor of the Interest so acquired by the substitute Member shall cease
to be a Member to the extent of such Transferred Interest. A Person shall not
cease to be a Member upon assignment of all such Member's Interest unless and
until the Transferee becomes a substitute Member pursuant to Section 10.2.
10.4. PUT RIGHT.
(a) At any time on or after January 31, 2002, ▇▇▇▇▇▇ shall have the
right (a "PUT RIGHT"), but not the obligation, to require the Company to
purchase all, but not less than all, of ▇▇▇▇▇▇'▇ Interest at the applicable Put
Price (as hereinafter defined). ▇▇▇▇▇▇ shall exercise the Put Right, if at all,
by giving written notice of exercise (a "PUT EXERCISE NOTICE") to the Company
and the other Members.
(b) The purchase price (the "PUT PRICE") applicable to any purchase
of any Member's Interest shall be equal to the Appraised Value of such Interest
as determined pursuant to Section 10.9.
(c) If the Company cannot secure the necessary financing or consents
with respect to ▇▇▇▇▇▇'▇ exercise of its rights pursuant to Section 10.4(a),
▇▇▇▇▇▇ shall have the right, in its sole discretion and without the need of
approval of any other Member or Representative or of any further action, to
cause the entire Company or the Business to be sold by giving notice to the
Management Board and the Management Board shall proceed to sell the entire
Company or Business as soon as reasonably practicable; provided, however, that a
fairness opinion as to such transaction from a recognized investment banking
firm is delivered to the Management Board.
(d) Notwithstanding the foregoing, at any time after receipt of the
Put Exercise Notice, Genlyte shall have the right, in its sole discretion and
without the need of approval of any other Member or Representative or of any
further action, to cause the entire Company or Business to be sold by giving
notice to the Management Board and the Management Board shall proceed to sell
the entire Company or Business as soon as reasonably practicable; provided,
however, that a fairness opinion as to such transaction from a recognized
investment banking firm is delivered to the Management Board.
10.5. CHANGE OF CONTROL.
(a) In the event of a Change of Control of ▇▇▇▇▇▇, the Company shall
have the right, but not the obligation, to purchase ▇▇▇▇▇▇'▇ Interest at the
Appraised Value. Such right shall be exercised by giving notice to ▇▇▇▇▇▇
within 90 days of the effective date of the Change of Control.
(b) In the event of a Change of Control of Genlyte, ▇▇▇▇▇▇ shall have
the right, but not the obligation, to sell its Interest to the Company at the
Appraised Value. Such right shall be exercised by giving notice to the Company
within 90 days of the effective date of the Change of Control.
(c) Notwithstanding the foregoing, if the Company cannot secure the
necessary financing or consents or chooses not to exercise its rights pursuant
to Section 10.5(a), Genlyte shall have the right, in its sole discretion and
without the need of approval of any other Member or Representative or of any
further action, to cause the entire Company or Business to be sold by giving
notice to the Management Board and the Management Board shall proceed to sell
the entire Company or Business as soon as reasonably practicable; provided,
however, that a fairness opinion as to such transaction from a recognized
investment banking firm is delivered to the Management Board.
(d) If the Company cannot secure the necessary financing or consents
with respect to ▇▇▇▇▇▇'▇ exercise of its rights pursuant to Section 10.5(b),
▇▇▇▇▇▇ shall have the right, in its sole discretion and without the need of
approval of any other Member or Representative or of any further action, to
cause the entire Company or Business to be sold by giving notice to the
Management Board and the Management Board shall proceed to sell the entire
Company or Business as soon as reasonably practicable; provided, however, that a
fairness opinion as to such transaction from a recognized investment banking
firm is delivered to the Management Board.
10.6. DEADLOCK.
(a) In the event of a Deadlock (as hereinafter defined), ▇▇▇▇▇▇ may
exercise its Put Right in accordance with Section 10.4 or Genlyte shall have the
right, in its sole discretion and without the need of approval of any other
Member or Representative or of any further action, to cause the entire Company
or Business to be sold; provided, however, that a fairness opinion as to such
transaction from a recognized investment banking firm is delivered to the
Management Board.
(b) A "DEADLOCK" shall be deemed to exist on or after the date
specified in Section 10.4(a) if: (i) the Management Board fails to agree in
accordance with Section 7.5 upon any action, or with respect to any matter, set
forth in Section 7.5; and (ii) such disagreement continues for 90 days (the
"DEADLOCK DATE"); provided, however, that during the 90-day period, negotiations
are conducted to resolve such disagreement pursuant to Section 15.14.
10.7. OFFER RIGHT. On or after the later to occur of (i) the final
settlement or disposition of the Litigation or (ii) January 31, 2002, either
Member shall have the right but not the obligation, to offer to buy the other
Member's interest (an "OFFER RIGHT"). A Member shall exercise its Offer Right,
if at all, by giving written notice of exercise (an "OFFER EXERCISE NOTICE") to
the Company and the other Members. The Members shall negotiate in good faith
the terms of the transaction for a period of 60 days following the date of the
Offer Exercise Notice. If the Members cannot agree on the terms within the 60
day period or on extending the 60 day period, then the Management Board shall
cause the entire Company or Business to be sold to the highest bidder; provided,
however, that a fairness opinion as to such transaction from a recognized
investment banking firm is delivered to the Management Board. Either Member may
participate in the bidding for the purchase of the entire Company or Business
pursuant to this Section 10.7.
10.8. CLOSING. The closing of any purchase of a Member's Interest or
the sale of the Company or the Business, as the case may be, pursuant to
Sections 10.4, 10.5, 10.6 and 10.7 shall take place on a date agreed upon by the
Company or the Non-Transferring Member, as the case may be, and the Transferring
Member, but in no event later than seven (7) months after the date of the Put
Exercise Notice, the Change of Control Date, the Deadlock Date or the Offer
Exercise Date (together with the 60 days plus any extension pursuant to Section
10.7), as the case may be (the "TRANSFER CLOSING DATE"); provided, however, that
Genlyte shall have the one-time right to delay the closing for up to six (6)
months from the anticipated Transfer Closing Date. In addition, ▇▇▇▇▇▇ shall
have the one-time right to delay the closing with respect to the exercise of an
Offer Right for up to six (6) months from the Transfer Closing Date. The time
and place of closing shall be agreed upon by the Company and the Transferring
Member. At the closing, the Company shall make payment of the Appraised Value
by wire transfer of immediately available funds to a bank account designated by
the Transferring Member. Such payment shall be in complete satisfaction of the
Transferring Member's Interest. Also, at the closing, the Transferring Member
shall deliver to the Company such documentation as the Company shall reasonably
request evidencing the Transfer to the Company of the Interest so Transferred,
free of any lien, claim or encumbrance.
10.9. APPRAISED VALUE.
(a) As used herein, "APPRAISED VALUE" means an amount equal to the
Fair Market Value of the Company (determined as set forth below) multiplied by
the Percentage Interest, or portion thereof, that is being put or Transferred,
as the case may be. For purposes of determining Appraised Value, "FAIR MARKET
VALUE" of the Company means the value of the total Interests in the Company
computed as a going concern, including the control premium. The amount of the
Fair Market Value of the Company finally determined in the manner described
below shall be binding and conclusive on all Members and the Company.
(b) The Member Transferring its Interest (the "TRANSFERRING MEMBER")
and the Member(s) not Transferring its Interest (collectively, the "NON-
TRANSFERRING MEMBER ") shall each designate an appraiser (which shall be a
recognized investment banking firm) for the purpose of determining the Fair
Market Value of the Company in accordance with the methodology set forth herein
within ten (10) Business Days of the date of the Put Exercise Notice, the Change
of Control Date or the Deadlock Date, as the case may be. Each such appraiser
(an "INITIAL APPRAISER") shall, as of the Valuation Date, set forth its
preliminary determination of the Fair Market Value of the Company (the
"PRELIMINARY FAIR MARKET VALUE") in writing (together with reasonable detail
showing the method of calculation thereof) and shall deliver a copy of such
written determination (an "APPRAISER'S REPORT") to each of the Company, the
Transferring Member and the Non-Transferring Member, not later than the 30th day
following its retention.
(c) The two Initial Appraisers, if they cannot agree on the Fair
Market Value, shall mutually designate a third appraiser (the "THIRD
APPRAISER"), which shall be a recognized independent investment banking firm, to
make its own independent determination of the Preliminary Fair Market Value in
accordance with the same methodology as set forth above.
(d) The Third Appraiser shall use its best efforts to complete its
determination as soon as practicable, and in any event within thirty (30) days
of its retention. The determination by the Third Appraiser of the Preliminary
Fair Market Value shall be set forth in an Appraiser's Report delivered to the
Company, the Transferring Member and the Non-Transferring Member promptly after
the preparation thereof.
(e) In the event that the determination by the Third Appraiser of the
Preliminary Fair Market Value falls between the determinations by the two
Initial Appraisers, then the determination of the Third Appraiser shall
constitute the Fair Market Value of the Company for purposes of this Section.
In the event, however, that the determination by the Third Appraiser is higher
than the highest determination of the two Initial Appraisers or is lower than
the lowest of such determinations, then the determination by the particular
Initial Appraiser that is closest in value to the determination by the Third
Appraiser shall be deemed to constitute the Fair Market Value of the Company for
purposes of this Section.
(f) Promptly upon final determination of the Fair Market Value of the
Company, the Company shall calculate the Appraised Value and give notice thereof
to the Transferring Member and the Non-Transferring Member. The Transferring
Member shall be responsible for the costs and expenses of the Initial Appraiser
selected by it, and the Non-Transferring Member shall be responsible for the
costs and expenses of the Initial Appraiser selected by the Non-Transferring
Member. The costs and expenses of the Third Appraiser, if any, shall be paid by
the Member whose Initial Appraiser's Appraised Value is farthest from the
Appraised Value determined by the Third Appraiser
10.10. ASSIGNABILITY AND FINANCING.
(a) Notwithstanding anything contained herein to the contrary, the
Company's obligations under Sections 10.4, 10.5 and 10.6 shall be nonrecourse to
the Members and may be assigned by the Company to any third Person approved by
the Representatives of the Non-Transferring Members, provided, that no such
assignment shall be deemed to release the Company from any liability or
obligation hereunder, and, provided, further, that the admission of such third
Person as a Member is subject to the unanimous approval of all Non-Transferring
Members pursuant to Section 10.2 unless otherwise provided in this Section
10.10.
(b) Genlyte shall have the right, in its sole discretion and without
the need of approval of any other Member, Representative or of any further
action, to cause the Company to assign the rights to purchase ▇▇▇▇▇▇'▇ Interest,
pursuant to Sections 10.4, 10.5 and 10.6 to Genlyte; provided, however, that no
such assignment shall be deemed to release the Company from any liability or
obligation hereunder.
(c) Notwithstanding Section 7.5 or Section 10.10(a), Genlyte shall
have the right, in its sole discretion and without the need of approval of any
other Member, Representative or of any further action, to cause the Company to
incur indebtedness, to admit a new Member(s) to merge or consolidate the
Company, or to undertake an initial public offering (including taking corporate
action for the purpose of converting the Company to a corporation), to finance
or effect financing of the payment of the Appraised Value and to satisfy any
obligation or the exercise of any right of the Company and/or Genlyte pursuant
to this Article X. The incurrence of indebtedness, the admission of a new
Member(s) and the completion of an initial public offering shall take place
simultaneously with the closing of any purchase of a Member's Interest or the
sale of the Company or the Business, as the case may be, pursuant to this
Article X to the extent practicable (without in any way limiting ▇▇▇▇▇▇' rights
to be paid in accordance with Article X). In the event the Company is converted
to a corporation in contemplation of an initial public offering pursuant to
Section 10.10(c) and such initial public offering is not completed, ▇▇▇▇▇▇ will
still be entitled to be paid in accordance with the terms of this Article X.
(d) Each of the Members agrees to take all reasonably required
actions and to cause the Company to take all actions reasonably necessary to
convert the form of the Company to a corporation upon or prior to the initial
public offering of equity interests of the Company, if any, pursuant hereto.
(e) Notwithstanding Section 7.5 hereof, actions to be taken by the
Company pursuant to Sections 10.4, 10.5, 10.6 or 10.10 shall be determined by
the Management Board in accordance with the requirements of Section 7.4.
10.11. LIMITED APPLICABILITY. Notwithstanding anything contained herein
to the contrary, the provisions contained in Sections 10.4, 10.5, 10.6 and 10.7,
inclusive, above are applicable only with respect to ▇▇▇▇▇▇ or Genlyte, and are
not exercisable by any subsequent Transferee who is not a wholly-owned
subsidiary of ▇▇▇▇▇▇ or Genlyte, as the case may be.
ARTICLE XI
DISSOLUTION AND TERMINATION
11.1. Term; Events Causing Dissolution. The Company shall continue in
existence until it is dissolved upon the occurrence of any of the following
events:
(a) the unanimous written consent of the Members;
(b) the sale, transfer or other disposition of all or
substantially all of the assets of the Company;
(c) the termination of the Master Transaction Agreement; or
(d) without limiting ▇▇▇▇▇▇'▇ rights to be paid under
Section 10.4, 10.5, 10.6, 10.7, and 10.10(c), a merger of the Company
in which the Company is not the surviving entity or for the purpose of
converting the Company to a corporation in connection with an initial
public offering pursuant to Section 10.10(c);
(e) the bankruptcy, assignment for the benefit of creditors
or the dissolution or liquidation of any Member.
11.2. DISTRIBUTIONS UPON DISSOLUTION.
(a) Upon the dissolution of the Company as a result of the occurrence
of any of the events set forth in Section 11.1 hereof, the Management Board in
accordance with Section 7.4, or if the Members so agree, a liquidating trustee,
shall wind up the affairs of the Company and discharge all of its debts as
follows:
(i) First, to the payment of debts and liabilities of the
Company in the order of priority as provided by law (including any
loans or advances that may have been made by any of the Members to the
Company and any unpaid fees for services) and the expenses of
liquidation.
(ii) Second, to the establishment of any reserve which the
Management Board may deem reasonably necessary for any contingent,
conditional or unasserted claims or obligations of the Company. Such
reserve may be paid over by the Company to an escrow agent selected by
the Company to be held for disbursement in payment of any of the
aforementioned liabilities and, at the expiration of such period as
shall be deemed advisable by the Management Board, for distribution of
the balance, in the manner provided in this Article XI; and
(iii) Finally, the remaining balance of the liquidation
proceeds, if any, to the Members, in accordance with their respective
positive Capital Account balances.
(b) A Member shall not have any obligation to contribute any amount
to the Company in the event of a negative balance in its Capital Account. Any
distribution to a Member under this Article XI shall be made by the end of the
taxable year of the "liquidation" of the Company or, if later, within 90 days of
such "liquidation," as such term is defined by Treasury Regulations
section1.704-1(b)(2)(ii)(g), except as otherwise permitted by Treasury
Regulations section1.704-1(b)(2)(ii)(b). The distribution of cash or property to
a Member in accordance with the provisions of this Section 11.2 shall constitute
a complete return to the Member of its Capital Contributions and a complete
distribution to the Member of its Interest and all the Company's property.
(c) To the extent the Company assets cannot be sold or in the event
the Members otherwise agree, such unsold assets shall be distributed in kind to
the Members, in accordance with Article VI, including any value attributed to
goodwill. In determining whether the Company assets should be sold or
distributed in kind, the Members shall each act reasonably and in good faith
with respect to any proposal from the other Member and the approval requirements
of Section 7.4 shall govern.
(d) If any Company assets are to be distributed in kind to the
Members, the liquidator shall obtain an independent appraisal of the fair market
value of such assets, net of liabilities, at a date reasonably close to the date
of liquidation and shall adjust the Members' Capital Accounts for any unrealized
gain or loss in the same manner as such Capital Accounts would be adjusted under
Article V upon an actual sale of such assets at such appraised value. The
assets shall be distributed in kind to the Members in accordance with Section
11.2. The Capital Account of each Member shall be debited by the appraised
value of the net assets distributed to it. 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 shall
have committed to pay prior to the date of termination.
11.3. CERTIFICATE OF CANCELLATION. When all of the remaining property
and assets of the Company have been distributed, the Certificate shall be
cancelled by filing a certificate of cancellation with the Secretary of State of
Delaware.
ARTICLE XII
ACCOUNTING AND BANK ACCOUNTS
12.1. Books and Records.
(a) The books and records of the Company shall be maintained at its
principal place of business.
(b) The Company shall keep the following books and records:
(i) a current list of Members setting forth the full name
and last known mailing address of each Member;
(ii) a copy of the Certificate and all amendments thereto
together with executed copies of any powers of attorney pursuant to
which any of the foregoing were executed;
(iii) copies of the Company's federal, state, local and
foreign income tax returns and reports, if any, for the six (6) most
recent years or, if such returns and reports were not prepared for any
reason, copies of the information and records provided to, or which
should have been provided to, the Members to enable them to prepare
their federal, state, local and foreign tax returns for such period;
(iv) copies of this Agreement and all amendments thereto,
and copies of any other written agreements among the Members or
between any Member and the Company;
(v) copies of any financial statements of the Company for
the five (5) most recent years;
(vi) copies of any written promise by a Member to make a
contribution to the Company; and
(vii) copies of any other instruments or documents reflecting
matters required to be in writing pursuant to this Agreement, the Act
or at the direction of the Management Board.
12.2. FINANCIAL REPORTS. No later than sixty (60) days after the end
of each Fiscal Year of the Company, the Company shall prepare and deliver to
each Member audited financial statements of the Company audited by the Company's
independent auditors. No later than twenty (20) days after the end of each
fiscal quarter of the Company, the Company shall prepare and deliver to each
Member unaudited financial statements of the Company for such fiscal quarter.
In addition, Genlyte shall deliver to ▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall deliver to Genlyte
copies of all filings made by each of them with the SEC.
12.3. TAX RETURNS AND ELECTIONS. The Company shall prepare and timely
file all federal, state, local and foreign income tax returns or other returns
or statements required by applicable law and shall timely provide the Members
with all information related to the Company needed by the Members to timely
prepare and file all federal, state, local and foreign income tax returns or
other returns or statements required by applicable law. All costs associated
with the preparation and filing of the Company's returns and statements and the
provision of such information shall be borne by the Company. The Company shall
claim all deductions and make such elections for federal or state income tax
purposes which the Management Board reasonably believes will produce the most
favorable tax results for the Members. The Company shall consult with the
Members with respect to deductions and tax elections which may have a material
impact on a Member's tax position before taking such deductions or making such
elections. Genlyte shall act as the "TAX MATTERS PARTNER" of the Company
pursuant to Section 6231(a)(7) of the Code; provided, that its actions as the
tax matters partner shall be subject to review and approval of the Management
Board. The Company shall indemnify Genlyte and its appointed Representatives
against all liabilities and expenses in its capacity as "tax matters partner" to
the fullest extent, but subject to the terms and conditions set forth in Article
IX, as though Genlyte and such Representatives were entitled to indemnification
thereunder.
12.4. BANK ACCOUNTS. All funds of the Company shall be deposited in a
separate bank, money market or similar account(s) approved by the Management
Board and in the Company's name. Withdrawals therefrom shall be made only by
persons authorized to do so by the Management Board.
12.5. RIGHT OF INSPECTION. On written request stating the purpose,
but in no event more than two times per year, a Member may audit, examine and
copy in person, at any reasonable time, for any proper purpose reasonably
related to such Member's Interest, and at the Member's expense, records required
to be maintained under the Act and such other information regarding the
business, affairs and financial condition of the Company as is just and
reasonable for the Member to audit, examine and copy. The right set forth in
this Section 12.5 may be exercised through any agent or employee of such Member
designated by it.
12.6. FINANCIAL ACCOUNTING. The provisions of this Agreement are not
intended to affect financial accounting for the Company. The Company shall
prepare its financial statements in accordance with United States generally
accepted accounting principles consistently applied.
12.7. LIFO. The Company shall adopt the federal income tax accounting
methodology directed by ▇▇▇▇▇▇ for the inventories received by the Company from
▇▇▇▇▇▇ and its wholly-owned subsidiaries. In the case of inventories to be
accounted for on the last-in-first-out ("LIFO") method, the Company shall take
all reasonable measures to ensure the continued use of the LIFO method and avoid
the liquidation of LIFO reserves. ▇▇▇▇▇▇ shall (i), at its cost, be responsible
for the conduct of any income tax or financial reporting examination of such
LIFO methodology and any related issues and (ii) control any settlement or
litigation and bear any and all costs and expenses of such litigation or
settlement and of any proposed adjustments to the taxable income of the Company
with respect to such LIFO inventory, including adjustments which are the result
of settlement or litigation.
ARTICLE XIII
COVENANTS NOT TO COMPETE
▇▇▇▇▇▇ and Genlyte each agree that during the Noncompete Period (as
hereinafter defined), they shall not, directly or indirectly, by or for
themselves or as the agent of another, or through others as their agent:
(a) manufacture, promote, sell or distribute anywhere in
the world (the "TERRITORY"), products or processes, which are similar
to or in competition with those of the Business;
(b) own, manage, operate, be compensated by, participate
in, have any right to or interest in any other business directly or
indirectly engaged in the production, sale or distribution of products
competitive with those of the Business anywhere in the Territory; or
(c) except as may be required by law, divulge, communicate,
use or disclose any confidential proprietary information concerning
the Company or the Business.
"NONCOMPETE PERIOD" means the period from the Effective Date until the
earlier to occur of the following: (i) the dissolution of the Company pursuant
to Article XI or (ii) the date a Member ceases to be a Member.
If, in any judicial proceeding, the duration or scope of the covenants and
agreements contained in this Article XIII shall be adjudicated to be invalid or
unenforceable, the parties agree that those covenants and agreements shall be
deemed amended to reduce such duration or scope to the extent necessary to
permit enforcement of such covenants or agreements, such amendment to apply only
with respect to the operation of such covenants and agreements in the particular
jurisdiction(s) in which such adjudication is made. Genlyte and ▇▇▇▇▇▇ each
further acknowledge and agree that money damages would constitute an inadequate
remedy in the event of a breach of this Article XIII and that in addition to any
other remedies which may be available, the obligations of Genlyte and ▇▇▇▇▇▇
under this Article XIII shall be specifically enforceable.
ARTICLE XIV
REPRESENTATIONS AND WARRANTIES
Each of the parties, severally and not jointly, represents, warrants and
covenants to the other parties to this Agreement (for purposes of this Article,
the "UNDERSIGNED") as of the date hereof and as of the Effective Date. The
representations and warranties set forth below shall survive the Effective Date.
14.1. AUTHORITY. The Undersigned has full capacity right, corporate
power and authority, without the consent of any other Person, to execute and
deliver this Agreement and any other agreement to which it is a party, and to
carry out the transactions contemplated hereby and thereby. Except with respect
to the approval of the stockholders of the Undersigned, all corporate
proceedings required to be taken by such to party to authorize the execution,
delivery and performance of this Agreement and such other agreements and all of
the transactions contemplated hereby and thereby have been duly and properly
taken.
14.2. VALIDITY. This Agreement and any agreement executed in
connection herewith to which the Undersigned is a party have been duly executed
and delivered and constitute lawful, valid and legally binding obligations of
such party, enforceable in accordance with their respective terms. The
execution and delivery of this Agreement and such other agreements and the
consummation of the transactions contemplated hereby and thereby will not result
in the creation of any lien, charge or encumbrance of any kind or the
termination or acceleration of any indebtedness or other obligation of such
party and are not prohibited by, do not violate or conflict with any provision
of, and do not constitute a default under or a breach of (a) the Certificate of
Incorporation or By-laws of such party, (b) any Contract (as defined in the
Capitalization Agreements), (c) any order, writ, injunction, decree or judgment
of any court or governmental agency, or (d) any law, rule or regulation
applicable to the Undersigned.
14.3. DUE ORGANIZATION. The Undersigned is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Delaware and has full power and authority and all requisite rights, permits and
franchises to own, lease and operate its assets and to carry on the business in
which it is engaged.
14.4. SECURITIES LAW MATTERS. With respect to the Interests acquired
by the Undersigned:
(a) The Undersigned has had access to such information
concerning the Contributed Assets and the liabilities to be assumed by
the Company pursuant to the Capitalization Agreements and such
information has been sufficient to enable the Undersigned to make an
informed investment judgment with respect to the Undersigned's
purchase of the Interests;
(b) The Undersigned understands (i) that the Interests
evidenced by this Agreement have not been registered under the
Securities Act of 1933, the Delaware Securities Act or any other state
securities laws (collectively, the "SECURITIES LAWS") because the
Company is issuing these Interests in reliance upon the exemptions
from the registration requirements of the Securities Laws providing
for issuance of securities not involving a public offering, (ii) that
the Company has relied upon the fact that the Interests are not to be
held by either Member with a view to the resale or distribution
thereof, and (iii) that exemption from registration under the
Securities Laws would not be available if the Interests were acquired
by a Member with a view to distribution;
(c) The Undersigned is acquiring its Interest solely for
its own account and not with a view to, or for resale in connection
with, the distribution or other disposition thereof, except for such
distributions and dispositions, which are (i) explicitly permitted or
contemplated under the terms of this Agreement, as well as (ii)
effected in compliance with the Securities Laws or unless the holder
of Interests delivers to the Company an opinion of counsel,
satisfactory to the Company, that such registration or other
qualification under the Securities Laws is not required in connection
with such transfer, offer or sale; and
(d) The Undersigned understands that the Company is under
no obligation to register the Interests or to assist the Undersigned
in complying with any exemption from registration under the Securities
Laws if the Undersigned should at a later date, wish to dispose of the
Interest. Furthermore, the Undersigned realizes that the Interests
are unlikely to qualify for disposition under Rule 144 promulgated
under the Securities Act of 1933, as amended, unless the Undersigned
is not an "affiliate" of the Company and the Interest has been
beneficially owned and fully paid for by the Undersigned for at least
two years.
ARTICLE XV
MISCELLANEOUS
15.1. TITLE TO ASSETS. Title to the Contributed Assets and all other
assets acquired by the Company shall be held in the name of the Company or its
subsidiaries. No Member shall individually have any ownership interest or
rights in the assets of the Company, except indirectly by virtue of such
Member's ownership of an Interest. No Member shall have any right to seek or
obtain a partition of any of the assets of the Company. No Member shall have
the right to any specific assets of the Company upon the liquidation of, or any
distribution from, the Company.
15.2. AMENDMENTS AND WAIVER.
(a) No amendment, waiver or consent with respect to any provision of
this Agreement shall in any event be effective, unless the same shall be in
writing and signed by the parties hereto, and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
(b) The failure of any party at any time or times to require
performance of any provisions hereof shall in no manner affect that party's
right at a later time to enforce the same. No waiver by any party of the breach
of any term or covenant contained in this Agreement in any one or more instances
shall be deemed to be, or construed as, a further or continuing waiver of any
such breach, or a waiver of the breach of any other term or covenant contained
in this Agreement.
15.3. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be, personally delivered or sent by
facsimile transmission with confirming copy sent by overnight courier (such as
Express Mail, Federal Express, etc.) and a delivery receipt obtained and
addressed to the intended recipient as follows:
(a) If to Genlyte:
The Genlyte Group Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇ & English, LLP
Four Gateway Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the ▇▇▇▇▇▇:
▇▇▇▇▇▇ Industries Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(c) If to the Company:
GT Lighting LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇▇ & English, LLP
Four Gateway Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may change its address for receiving notice by written notice given to
the others named above. Notices shall be deemed given as of the date of
receipt.
15.4. EXPENSES. Except as otherwise expressly provided herein, each
party to this Agreement shall pay its own costs and expenses in connection with
the transactions contemplated hereby. Except as otherwise expressly provided
herein, the Company shall not bear any of such expense. The provisions of this
Section 15.4 shall survive any termination of this Agreement.
15.5. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
15.6. CAPTIONS. The captions contained in this Agreement are for
convenience of reference only, shall not be given meaning and do not form a part
of this Agreement.
15.7. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to
the benefit of the parties named herein and their respective successors and
permitted assigns. Except as otherwise provided in this Agreement, including
Section 10.10 hereof, this Agreement shall not be assigned by either party
hereto without the express prior written consent of the other party and
any attempted assignment, without such consents, shall be null and void. This
Agreement does not create any rights, claims or benefits inuring to any person
that is not a party hereto nor create or establish any third-party beneficiary
hereto.
15.8. ENTIRE TRANSACTION. This Agreement and the documents referred to
herein contain the entire agreement and understanding among the parties with
respect to the transactions contemplated hereby and supersede all other
agreements, understandings and undertakings among the parties on the subject
matter hereof. All schedules and exhibits hereto are hereby incorporated by
reference and made a part of this Agreement.
15.9. OTHER RULES OF CONSTRUCTION. References in this Agreement to
sections, schedules and exhibits are to sections of, and schedules and exhibits
to, this Agreement unless otherwise indicated. Words in the singular include
the plural and in the plural include the singular. The word "OR" is not
exclusive. The word "INCLUDING" shall mean including, without limitation. The
term "ORDINARY COURSE" means the ordinary course of the Business consistent with
the past practice of the Business. References to the terms "CONTRACTS" or
"AGREEMENTS" shall each be deemed to include the other and shall include
understandings and arrangements of all types, whether written or oral, and all
amendments thereto. The section and other headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15.10. PARTIAL INVALIDITY. In the event that any provision of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
15.11. NATURE OF INTEREST IN THE COMPANY. A Member's Interest shall be
personal property for all purposes.
15.12. GOVERNING LAW. This Agreement shall be construed according to
and governed by the laws of the state of Delaware, without giving effect to the
conflict of laws principles thereof.
15.13. POWER OF ATTORNEY. The Members, by their execution hereof,
hereby make, constitute and appoint the President of the Company or his designee
as their true and lawful agent and attorney-in-fact, with full power of
substitution and full power and authority in his name, place and ▇▇▇▇▇ to make,
execute, sign, acknowledge, swear to, record and file: (a) the Certificate of
Formation of the Company and all further amendments thereto required by law or
the provisions of this Agreement; (b) all certificates and other instruments
deemed advisable by the Management Board and required to carry out the
provisions of this Agreement and applicable law or to permit the Company to
become, qualify, be authorized or licensed or to continue as a limited liability
company in any jurisdiction where the Company may be or expects to be doing
business; (c) all conveyances and other instruments or papers deemed advisable
by the Management Board to effect the dissolution and termination of the
Company; (d) all fictitious or assumed name certificates required or permitted
to be filed on behalf of the Company; and (e) all other instruments or papers
deemed advisable by the Management Board which may be required by law to be
filed on behalf of the Company. The Members hereby ratify and approve all such
actions that may have been taken prior to the date hereof by such persons
pursuant to this Section 15.13.
15.14. NEGOTIATION BETWEEN SENIOR EXECUTIVES. (a) If any dispute,
controversy or claim arises out of or is related to this Agreement (except for
determinations of the Appraised Value by appraisers under Section 10.9) or any
other agreements executed in connection herewith (a "DISPUTE"), the parties
shall attempt to resolve the Dispute promptly by negotiations between senior
executives who have authority to settle the controversy. Either Member may give
the other Member written notice of any Dispute not resolved in the normal course
of business. Within thirty (30) days after delivery of said notice, senior
executives of both Members shall meet at a mutually acceptable time and place,
to exchange relevant information and to attempt to resolve the Dispute. The
senior executives shall continue to meet either until agreement is reached or
until an impasse is declared by either party.
(b) If a negotiator intends to be accompanied at a meeting by an attorney,
the other negotiator shall be given at least three (3) Business Days' notice of
such intention and may also be accompanied by an attorney. All negotiations
pursuant to this Section 15.14 are confidential and shall be treated as
compromise and settlement negotiations for purposes of all rules of evidence.
15.15. STOCK OPTIONS . The Management Board, on an annual basis, shall
recommend to ▇▇▇▇▇▇ and Genlyte the aggregate amount of non-qualified stock
options that the Management Board would like ▇▇▇▇▇▇ and Genlyte to issue to
Company employees based on the value of the non-qualified stock options of each
of ▇▇▇▇▇▇ and Genlyte, the intention being that ▇▇▇▇▇▇ and Genlyte will issue
non-qualified stock options to Company employees based on their Percentage
Interests or such other arrangements as the parties may agree. In no event,
however, shall ▇▇▇▇▇▇ or Genlyte be obligated to grant the amount of non-
qualified stock options recommended by the Management Board.
15.16. EFFECT OF INCONSISTENCIES WITH THE ACT. Without limitation of
any of the parties' rights under the Capitalization Agreements and the
Collateral Agreements (as defined therein), it is the express intention of the
Members and the Company that this Agreement shall be the sole source of
agreement among them as to the matters covered hereby, and, except to the extent
a provision of this Agreement expressly incorporates federal income tax rules by
reference to sections of the Code or Regulations or is expressly prohibited or
ineffective under the Act, this Agreement shall govern, even when inconsistent
with, or different than, the provisions of the Act or any other law or rule. In
the event the Act is subsequently amended or interpreted in such a way to make
any provision of this Agreement that was formerly invalid valid, such provision
shall be considered to be valid from the effective date of such interpretation
or amendment. The Members and the Company hereby agree that the duties and
obligations imposed on the Members of the Company as such shall be those set
forth in this Agreement and the Capitalization Agreements and the Collateral
Agreements (as defined therein), which are intended to govern the relationship
among the Company and the Members notwithstanding any provision of the Act or
common law to the contrary.
15.17. RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies provided
by this Agreement are cumulative and the use of any one right or remedy by any
party shall not preclude or waive the right to use any or all other remedies.
Said rights and remedies are given in addition to any other rights the parties
may have by law, statute, ordinance or otherwise.
15.18. AUTHORSHIP. The parties hereto agree that the terms and language
of this Agreement were the result of negotiations between the parties and, as a
result, there shall be no presumption that any ambiguities in this Agreement
shall be resolved against either party. Any controversy over construction of
this Agreement shall be decided without regard to events of authorship or
negotiation.
15.19. ▇▇▇▇▇▇ AND AFFILIATES. For purposes of this Agreement, the term
"▇▇▇▇▇▇" shall refer to ▇▇▇▇▇▇ together with its wholly-owned subsidiaries, if
any, that own Interests in the Company and the terms and conditions of this
Agreement shall be binding on ▇▇▇▇▇▇ and its wholly-owned subsidiaries and
▇▇▇▇▇▇ shall cause such wholly-owned subsidiaries to comply with the terms and
conditions of this Agreement to the same extent as they apply to ▇▇▇▇▇▇.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
▇▇▇▇▇▇ INDUSTRIES INC.
By:
Its:
THE GENLYTE GROUP INCORPORATED
By:
Its:
GT LIGHTING, LLC
By:
Its:
SCHEDULE 4.1
MEMBER PERCENTAGE INTEREST
▇▇▇▇▇▇ Industries Inc. and its wholly-owned subsidiaries 32%
The Genlyte Group Incorporated 68
100%