Exhibit 4.4
EXECUTION VERSION
SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF
MBW INVESTORS LLC
This Second Amended and Restated Limited Liability Company Agreement of MBW
Investors LLC (the "COMPANY") is made as of April 8, 1998, among the Members of
the Company, and the Persons who become Members of the Company in accordance
with the provisions hereof, and whose names are set forth as Members on
SCHEDULE A hereto.
WHEREAS, Dartford Partnership L.L.C. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ have heretofore
formed a limited liability company pursuant to the Delaware Limited Liability
Company Act, 6 Del. C. Section 18-101, ET SEQ., as amended from time to time
(the "DELAWARE ACT"), by filing a Certificate of Formation of the Company with
the office of the Secretary of State of the State of Delaware on December 20,
1996, and entering into a Limited Liability Company Agreement of the Company,
dated as of December 20, 1996, which was amended and restated as of December 31,
1996 and further amended as of January 16, 1998 (the "ORIGINAL LIMITED LIABILITY
COMPANY AGREEMENT"); and
WHEREAS, the Members desire to continue the Company as a limited liability
company under the Delaware Act and to amend and restate the Original Limited
Liability Company Agreement in its entirety.
NOW THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Members, intending to be
legally bound hereby, amend and restate the Original Limited Liability Company
Agreement in its entirety and agree as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 DEFINITIONS. Unless the context otherwise requires the terms
defined in this Article I shall, for the purposes of this Agreement, have the
meanings herein specified.
"ADDITIONAL MEMBERS" has the meaning set forth in Section 12.1 hereof.
"ADDITIONAL B UNITS" has the meaning given such term in Section 8.3 hereof.
"ADDITIONAL UNITS" has the meaning set forth in Section 12.1 hereof.
"ADMISSION EVENT" means the:
(a) execution of this Agreement or any other writing evidencing
intent to become a Member; and
(b) the making of a Capital Contribution.
"AFFILIATE" means with respect to a specified Person, any Person that
directly or indirectly controls, is controlled by, or is under common control
with the specified Person. As used in this definition, the term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"AGREEMENT" means this Second Amended and Restated Limited Liability
Company Agreement, as amended, modified, supplemented or restated from time to
time.
"ASSIGNEE" means any Person who is an assignee of a Member's interest in
the Company, or part thereof, and who does not become a Member pursuant to
Section 13.3 hereof.
"AURORA FOODS" means Aurora Foods Inc., a Delaware corporation formerly
known as MBW Foods Inc., and any successor thereto.
"AURORA HOLDINGS" means Aurora Foods Holdings Inc., a Delaware corporation
formerly known as MBW Holdings Inc., and any successor thereto.
"AVAILABLE CASH" means all cash (including the net proceeds from capital
transactions and sale of assets not in the ordinary course of business) held and
owned by the Company less any reserve for the working capital and other
foreseeable future needs of the Company, as determined by the Board in its sole
discretion.
"BOARD" has the meaning set forth in Section 6.1.
"CAPITAL ACCOUNT" means, for each Member, the sum of Capital Contributions
made by such Member pursuant to Section 4.1 hereof and such adjustments made
pursuant to Section 4.3 hereof.
"CAPITAL CONTRIBUTION" means, with respect to any Member, the aggregate
amount of money and the value of any property (other than money) contributed to
the Company pursuant to Section 4.1 hereof with respect to the Units held by
such Member. In the case of a Member who acquires an interest in the Company by
virtue of an assignment in accordance with the terms of this Agreement, "Capital
Contribution" has the meaning set forth in Section 4.3(b) hereof.
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"CAUSE" means (i) the failure or inability to cure or remedy, within 20
days after written notice from the Board, any willful misconduct in the course
of rendering services for or on behalf of the Company; (ii) the commission of
any fraudulent act in the course of rendering services for or on behalf of the
Company; or (iii) the conviction of a felony by any court having competent
jurisdiction.
"CERTIFICATE" means the Certificate of Formation and any and all amendments
thereto and restatements thereof filed on behalf of the Company with the office
of the Secretary of State of the State of Delaware pursuant to the Delaware Act.
"CLASS A HOLDER" means any Person listed on SCHEDULE A hereto as a holder
of Class A Units.
"CLASS A UNITS" means the outstanding Class A Units, each of which shall
have the rights, powers and preferences set forth in Section 4.6 hereof.
"CLASS B HOLDER" means any Person listed on SCHEDULE A hereto as a holder
of Class B Units.
"CLASS B UNITS" means the outstanding Class B Units, each of which shall
have the rights, powers and preferences set forth in Section 4.6 hereof.
"CLASS C HOLDER" means any Person listed on SCHEDULE A hereto as a holder
of Class C Units.
"CLASS C UNITS" means the outstanding Class C Units, each of which shall
have the rights, powers and preferences set forth in Section 4.6 hereof.
"CLASS D HOLDER" means any Person listed on SCHEDULE A hereto as a holder
of Class D Units.
"CLASS D UNITS" means the outstanding Class D Units, each of which shall
have the rights, powers and preferences set forth in Section 4.6 hereof.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or any corresponding federal tax statute enacted after the date of this
Agreement. A reference to a specific section (Section ) of the Code refers not
only to such specific section but also to any corresponding provision of any
federal tax statute enacted after the date of this Agreement, as such specific
section or corresponding provision is in effect on the date of application of
the provisions of this Agreement containing such reference.
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"COMPANY" means MBW Investors LLC, the limited liability company heretofore
formed and continued under and pursuant to the Delaware Act and this Agreement.
"CONTRIBUTION" means the contribution to New LLC as of the date of this
Agreement (i) by the Company of all of the outstanding shares of capital stock
of Aurora Holdings, and (ii) by VDK Foods LLC of all of the outstanding shares
of capital stock of VDK Holdings, in each case pursuant to the Contribution
Documents.
"CONTRIBUTION DOCUMENTS" means the Contribution Agreement, dated as of
April 8, 1998, between the Company and VDK Foods LLC, and any and all documents,
agreements, certificates or other instruments required to be executed and
delivered by or on behalf of the Company in connection with the Contribution.
"COVERED PERSON" means a Member, a Member Manager, an Officer, any
Affiliate of a Member, Member Manager or Officer, any officers, directors,
shareholders, partners, employees, representatives or agents of a Member, a
Member Manager, an Officer or their respective Affiliates, or any employee or
agent of the Company or its Affiliates.
"DARTFORD" means Dartford Partnership L.L.C., a Delaware limited liability
company.
"DELAWARE ACT" means the Delaware Limited Liability Company Act, 6 Del.C.
Section 18-101, ET SEQ., as amended from time to time.
"DEPRECIATION" means, for each Tax Year or other period, an amount equal to
the depreciation, amortization or other cost recovery deduction allowable with
respect to an asset for such Tax Year or other period; provided, however, that
if the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such Tax Year or other period,
Depreciation shall be an amount that bears the same ratio to such beginning
Gross Asset Value as the federal income tax depreciation, amortization or other
cost recovery deduction with respect to such asset for such Tax Year or other
period bears to such beginning adjusted tax basis; and provided further, that if
the federal income tax depreciation, amortization or other cost recovery
deduction for such Tax Year or other period is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the Member Managers.
"▇▇▇▇▇▇ ▇▇▇▇▇ ACQUISITION" means the acquisition of the ▇▇▇▇▇▇ ▇▇▇▇▇
business by Aurora Foods pursuant to the Asset Sale and Purchase Agreement,
dated November 25, 1997, by and among The Procter & ▇▇▇▇▇▇ Company, certain
affiliates thereof, and Aurora Foods, as assignee of the Company and Aurora
Holdings.
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"FAIR ASSET VALUE" means the amount for which any asset could be sold in an
arm's length transaction by one who desires to sell, but is not under any urgent
requirement to sell, to a buyer who desires to buy, but is under no urgent
necessity to buy, when both have a reasonable knowledge of the facts, all as
determined by the Board. In determining such Fair Asset Value, furniture,
fixtures and equipment shall be valued at cost less depreciation and the
reasonably foreseeable prospects (including all tax liabilities and, in
particular, tax liabilities upon the sale or other disposition of Company
assets) of the business of the Company shall be taken into account. Securities
which are listed on a national securities exchange shall be valued at the
average last sales price during the immediately preceding 15 days on which such
securities are traded on such exchange or, with respect to any of such dates on
which no sales occurred, at the mean between the high "bid" and low "asked"
prices at the close of business on such date.
"FISCAL YEAR" means (i) the calendar year or (ii) any portion of the period
described in clause (i) of this sentence for which the Company is required to
allocate Profits, Losses and other items of Company income, gain, loss or
deduction pursuant to Article VIII hereof.
"FENWAY" means Fenway Partners Capital Fund, L.P., a Delaware limited
partnership.
"GROSS ASSET VALUE" means, with respect to any asset, such asset's adjusted
basis for federal income tax purposes, except as follows:
(a) the initial Gross Asset Value of any asset contributed by a
Member to the Company shall be the gross fair market value of such asset,
as agreed to by the contributing Member and the Board;
(b) the Gross Asset Value of all Company assets shall be adjusted to
equal their respective Fair Asset Values, as of the following times:
(i) the acquisition of an additional interest in the Company by any new or
existing Member in exchange for more than a DE MINIMIS Capital
Contribution; (ii) the distribution by the Company to a Member of more than
a DE MINIMIS amount of Company assets as consideration for an interest in
the Company; and (iii) the liquidation of the Company within the meaning of
Treasury Regulation Section 1.704-1(b)(2)(ii)(g); provided, however, that
adjustments pursuant to clause (i) and clause (ii) of this sentence shall
be made only if the Board reasonably determines that such adjustments are
necessary or appropriate to reflect the relative economic interests of the
Members in the Company; and
(c) the Gross Asset Value of any Company asset distributed to any
Member shall be the Fair Asset Value of such asset on the date of
distribution, as determined by the distributee Member and the Board.
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If the Gross Asset Value of an asset has been determined or adjusted
pursuant to paragraph (a) or paragraph (b) above, such Gross Asset Value shall
thereafter be adjusted by the Depreciation taken into account with respect to
such asset for purposes of computing Profits and Losses.
"LIQUIDATING TRUSTEE" has the meaning set forth in Section 15.3 hereof.
"MAJORITY VOTE" means the written approval of, or the affirmative vote by,
Members holding a majority of the Voting Units held by Members.
"MANAGEMENT SERVICES AGREEMENT" means the Management Services Agreement,
dated as of December 31, 1996, between Dartford and Aurora Foods, as amended,
modified and supplemented from time to time.
"▇▇▇▇▇▇ DE LEEUW" means, collectively, ▇▇▇▇▇▇ De Leeuw & Co. III, L.P., a
California limited partnership, ▇▇▇▇▇▇ De Leeuw & Co. III (Europe), L.P., a
Bermuda limited partnership, ▇▇▇▇▇▇ De Leeuw & Co. III (Asia), L.P., a Bermuda
limited partnership, Gamma Fund LLC, a California limited liability company,
▇▇▇▇▇▇ De Leeuw & Co. IV, L.P., a California limited partnership, and Delta Fund
LLC, a California limited liability company.
"MDC PERMITTED TRANSFEREE" means with respect to ▇▇▇▇▇▇ De Leeuw, any
partnership with the same controlling general partner as ▇▇▇▇▇▇ De Leeuw and any
of the partners of ▇▇▇▇▇▇ De Leeuw which receive Units upon a distribution to
any such partners by ▇▇▇▇▇▇ De Leeuw.
"MEMBER" means any Person named as a member of the Company on SCHEDULE A
hereto and includes any Person admitted as an Additional Member or a Substitute
Member pursuant to the provisions of this Agreement, and "Members" means two or
more of such Persons when acting in their capacities as members of the Company.
Except as otherwise provided herein, the Members shall constitute one class or
group of members.
"MEMBER MANAGERS" means the Members designated in Section 6.1 hereof as the
member managers of the Company and shall include successors appointed pursuant
to the provisions of this Agreement. A Member Manager shall not be deemed to be
a "manager" within the meaning of the Delaware Act.
"NEW LLC" means Aurora/VDK LLC, a Delaware limited liability company, into
which the Company has agreed to contribute, pursuant to the Contribution
Agreement, all of the outstanding capital stock of Aurora Holdings in exchange
for certain interests in Aurora/VDK LLC, and any surviving entity of a
reorganization (including an incorporation of Aurora/VDK LLC), merger or
consolidation of Aurora/VDK LLC or any successor thereto.
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"NEW LLC ENTITIES" means, collectively, New LLC and any direct or indirect
Subsidiary of New LLC and any successor thereto. The New LLC Entities as of the
effective date of the Contribution are New LLC, Aurora Holdings, Aurora Foods,
VDK Holdings and Van ▇▇ ▇▇▇▇'▇.
"NON-DARTFORD/NON-FENWAY GROUP" means the holders of Class A Units on the
date of this Agreement and their direct or indirect Transferees other than
Dartford, any direct or indirect Permitted Transferee of Dartford, Fenway, and
any direct or indirect Permitted Transferee of Fenway.
"NON-PUBLIC SHAREHOLDERS" of the Public Company means the stockholders of
the Public Company other than any stockholders who acquired their equity
securities of the Public Company pursuant to a registration statement filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, and the rules and regulations thereunder.
"OFFICERS" means officers of the Company appointed by the Board pursuant to
Article VI hereof.
"ORIGINAL B UNITS" has the meaning given such term in Section 8.3 hereof.
"OTHER SUBSIDIARY" means any Subsidiary of the Company, other than any New
LLC Entity that would qualify as a Subsidiary of the Company.
"OUTSTANDING C UNITS PERCENTAGE" means the percentage (with 1.0 equal to
100%) obtained by dividing (X) the number of C Units that are outstanding as of
the time a calculation of the Outstanding C Units Percentage is required to be
made by (Y) 1,300.
"OUTSTANDING D UNITS PERCENTAGE" means the percentage (with 1.0 equal to
100%) obtained by dividing (X) the number of Vested Class D Units outstanding
pursuant to Section 4.6(d) by (Y) the aggregate number of outstanding Class D
Units.
"PERMITTED TRANSFEREES" means the Persons to whom Transfers are permitted
to be made under Section 13.2.
"PERSON" includes any individual, corporation, association, partnership
(general or limited), joint venture, trust, estate, limited liability company,
or other legal entity or organization.
"PROFITS" and "LOSSES" means, for each Tax Year, an amount equal to the
Company's taxable income or loss for such Tax Year, determined in accordance
with Section 703(a) of the Code (but including in taxable income or loss, for
this purpose, all items of income, gain,
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loss or deduction required to be stated separately pursuant to Section 703(a)(1)
of the Code), with the following adjustments:
(a) any income of the Company exempt from federal income tax and not
otherwise taken into account in computing Profits or Losses pursuant to
this definition shall be added to such taxable income or loss;
(b) any expenditures of the Company described in Section 705(a)(2)(B)
of the Code (or treated as expenditures described in Section 705(a)(2)(B)
of the Code pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(i))
and not otherwise taken into account in computing Profits or Losses
pursuant to this definition shall be subtracted from such taxable income or
loss;
(c) in the event the Gross Asset Value of any Company asset is
adjusted in accordance with Paragraph (b) or Paragraph (c) of the
definition of "Gross Asset Value" above, the amount of such adjustment
shall be taken into account as gain or loss from the disposition of such
asset for purposes of computing Profits or Losses;
(d) gain or loss resulting from any disposition of any asset of the
Company with respect to which gain or loss is recognized for federal income
tax purposes shall be computed by reference to the Gross Asset Value of the
asset disposed of, notwithstanding that the adjusted tax basis of such
asset differs from its Gross Asset Value; and
(e) in lieu of the depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such Tax Year or other
period, computed in accordance with the definition of "Depreciation" above.
"PROPORTIONATE PERCENTAGE" means, (i) with respect to each Member that
elects to exercise its rights under Section 12.2 hereof, a percentage (expressed
as a decimal fraction rounded to the nearest one-hundredth) obtained by dividing
(X) the number of all Voting Units owned by such electing Member by (Y) the
aggregate number of Voting Units owned by all Members and (ii) with respect to
Section 14.1 hereof, a percentage (expressed as a decimal fraction rounded to
the nearest one-hundredth) obtained by dividing (X) the number of all Class A
Units proposed to be sold by ▇▇▇▇▇▇ De Leeuw pursuant to the Transfer giving
rise to the Tag-Along Period under Section 14.1 hereof by (Y) the aggregate
number of Class A Units owned by ▇▇▇▇▇▇ De Leeuw.
"PUBLIC COMPANY" means the Company, any New LLC Entity, or any Other
Subsidiary, or any successor thereto, in each case which intends to effect a
Public Offering.
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"PUBLIC OFFERING" means (i) the sale to the public by the Public Company
for its own account of equity securities issued by such Public Company, and/or
(ii) the sale to the public by the Non-Public Shareholders pursuant to a
Secondary Sale of equity securities issued by the Public Company and held by the
Non-Public Shareholders, in either case pursuant to a registration statement
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
"SECONDARY SALE" means any sale by one or more Non-Public Shareholders of
equity securities issued by the Public Company and held by such Non-Public
Shareholders (but not originally issued by the Public Company pursuant to a
Public Offering), whether such sale is pursuant to a registered public offering
under the Securities Act of 1933, as amended, an exemption from the registration
requirements thereof, or otherwise.
"SECURITYHOLDERS AGREEMENT" means the Securityholders Agreement, dated as
of the date hereof, by and among New LLC, the Company, certain Members of the
Company, VDK Foods LLC, and certain members of VDK Foods LLC.
"SUBSIDIARY" with respect to any company means any corporation more than
50% of whose stock or equity securities (measured by virtue of voting rights) in
the aggregate is owned by such company, by one or more Subsidiaries of such
company, or by such company and one or more Subsidiaries of such company.
"SUBSTITUTE MEMBER" means a Person who is admitted to the Company as a
Member pursuant to Section 13.3 hereof, and who is named as a Member on SCHEDULE
A to this Agreement.
"TAX LIABILITY DISTRIBUTIONS" shall have the meaning given such term in
Section 8.2 hereof.
"TAX MATTERS MEMBER" has the meaning set forth in Section 10.1 hereof.
"TAX YEAR" means the 12 month period ending on the last Saturday in
December.
"TRANSACTION" has the meaning set forth in Section 6.12 hereof.
"TRANSFER" means (i) as a noun, any transaction (or the consummation of a
transaction) which has resulted in a change in the ownership of any Unit,
including without limitation, any voluntary or involuntary sale, assignment,
transfer, pledge, hypothecation, encumbrance, disposal, loan, gift, attachment
or levy of, by or with respect to the Member which owns such Unit which has
resulted in a transfer of the voting rights or the rights to distribution with
respect to such Unit, and (ii) as a verb, to make any transaction described in
(i).
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"TREASURY REGULATIONS" means the income tax regulations, including
temporary regulations, promulgated under the Code, as such regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).
"UNIT" means any one of the Class A Units, Class B Units, Class C Units or
Class D Units. Each Unit represents a limited liability company interest in the
Company, with the respective rights, powers and preferences as provided in this
Agreement. All issued Units are held by the Members as set forth on the
SCHEDULE A hereto. If Additional Units are issued as provided in Article XII,
the total number of Units outstanding shall be automatically increased by the
number of Additional Units issued. Upon their issuance, all Units shall be
owned by the Members holding such Units.
"UNRECOUPED CAPITAL CONTRIBUTION" means as to any Member or Assignee the
amount of such Member's or Assignee's Capital Contribution with respect to Class
A Units held by such Member or Assignee minus the aggregate of all distributions
previously made to such Member or Assignee pursuant to Section 8.3(ii) hereof.
"VAN ▇▇ ▇▇▇▇'▇" means Van ▇▇ ▇▇▇▇'▇, Inc., a Delaware corporation, and any
successor thereto.
"VDK FOODS LLC" means VDK Foods LLC, a Delaware limited liability company,
and any successor thereto.
"VDK HOLDINGS" means VDK Holdings, Inc., a Delaware corporation, and any
successor thereto.
"VESTED CLASS D UNITS" means those Class D Units that have vested in
accordance with SCHEDULE C hereto.
"VOTING UNITS" means, collectively, the Class A Units and the Class B
Units which shall vote together as a single class.
Section 1.2 HEADINGS. The headings and subheadings in this Agreement are
included for convenience and identification only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.
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ARTICLE II
CONTINUATION AND TERM
Section 2.1 CONTINUATION.
(a) The Members hereby agree to continue the Company as a limited
liability company under and pursuant to the provisions of the Delaware Act and
agree that the rights, duties and liabilities of the Members and the Member
Managers shall be as provided in the Delaware Act, except as otherwise provided
herein.
(b) Any Person listed on SCHEDULE A hereto that performs an Admission
Event, and any Person listed on SCHEDULE A hereto whose authorized
representative performs an Admission Event, shall be deemed to have evidenced
its intent to become a Member, to have complied with the conditions for becoming
a Member as set forth in this Agreement, and to have requested that the records
of the Company reflect such admission as a Member, and when the records of the
Company are amended to reflect the admission of such Person as a Member, such
Person shall be admitted to the Company as a Member.
(c) The name and mailing address of each Member shall be listed on the
Schedules hereto. The Member Managers shall update any Schedule from time to
time as necessary to accurately reflect the information therein. Any amendment
or revision to a Schedule made in accordance with this Agreement shall not be
deemed an amendment to this Agreement. Any reference in this Agreement to a
Schedule shall be deemed to be a reference to such Schedule as amended and in
effect from time to time.
Section 2.2 NAME. The name of the Company heretofore formed and continued
hereby is MBW Investors LLC. The business of the Company may also be conducted
under any other name or names designated by the Board from time to time.
Section 2.3 TERM. The term of the Company commenced on the date the
Certificate was filed in the office of the Secretary of State of the State of
Delaware and shall continue until December 31, 2021, unless dissolved before
such date in accordance with the provisions of this Agreement. The existence of
the Company as a separate legal entity shall continue until the cancellation of
the Certificate.
Section 2.4 REGISTERED AGENT AND OFFICE. The Company's registered agent
and office in the State of Delaware shall be The Corporation Trust Company,
Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇. At any time, the Board may designate another registered agent
and/or registered office.
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Section 2.5 PRINCIPAL PLACE OF BUSINESS. The principal place of business
of the Company shall be at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Upon 10 days' notice to the Members, the Board may change the
location of the Company's principal place of business.
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY
Section 3.1 PURPOSE. The purpose of the Company is to acquire, hold for
investment, sell and dispose of the stock and other securities, directly or
indirectly, of any Subsidiary, and to engage in all activities necessary,
advisable or incidental thereto, including without limitation engaging in (or
causing or permitting any of its Subsidiaries to engage in) any of the
transactions identified in Sections 3.2 or 6.12 hereof.
Section 3.2 POWERS OF THE COMPANY.
(a) Subject to the provisions of Section 3.3, the Company shall have the
power and authority to take any and all actions necessary, appropriate, proper,
advisable, incidental or convenient to or for the furtherance of the purpose set
forth in Section 3.1, including, but not limited to, the power:
(i) to conduct its business, carry on its operations and have and
exercise the powers granted to a limited liability company by the Delaware
Act in any state, territory, district or possession of the United States,
or in any foreign country that may be necessary, convenient or incidental
to the accomplishment of the purpose of the Company;
(ii) to acquire by purchase, lease, contribution of property or
otherwise, own, hold, operate, maintain, finance, improve, lease, sell,
convey, mortgage, transfer or dispose of any real or personal property that
may be necessary, convenient or incidental to the accomplishment of the
purpose of the Company;
(iii) to enter into, perform and carry out contracts of any kind
convenient to or incidental to the accomplishment of the purpose of the
Company;
(iv) to lend money for its proper purpose, to invest and reinvest its
funds, to take and hold real and personal property for the payment of funds
so loaned or invested;
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(v) to appoint employees and agents of the Company, and define their
duties and fix their compensation;
(vi) to indemnify any Person in accordance with the Delaware Act;
(vii) to cease its activities and cancel its Certificate;
(viii) to negotiate, enter into, renegotiate, extend, renew,
terminate, modify, amend, waive, execute, acknowledge or take any other
action with respect to any lease, contract or security agreement in respect
of any assets of the Company; and
(ix) to guaranty the obligations of any Person and to secure any of
the same by a mortgage, pledge or other lien on the assets of the Company.
(b) The Member Managers and Officers, or any of them, are hereby expressly
authorized to enter into and perform on behalf of the Company the Contribution
Documents and the Securityholders Agreement, but such authorization shall not be
deemed a restriction on the power of the Member Managers to authorize the
Officers to enter into other documents not inconsistent with such Contribution
Documents or Securityholders Agreement on behalf of the Company to the extent
permitted by this Agreement. The Company, Member Managers and the Officers on
behalf of the Company, are expressly authorized to enter into and perform the
Contribution Documents and Securityholders Agreement and are authorized and
directed to take any and all actions contemplated thereby, and to the extent the
Company, Member Managers and the Officers have previously entered into and
performed such agreements not inconsistent with such Contribution Documents or
Securityholders Agreement, such actions are ratified, without any further act,
vote or approval of any Member notwithstanding any other provision of this
Agreement, the Delaware Act or other applicable law.
Section 3.3. LIMITATIONS ON ACTIONS. Anything in this Agreement to the
contrary notwithstanding, the Company shall not hold any investment, incur any
indebtedness or otherwise take any action that would cause any Member of the
Company to realize "unrelated business taxable income" as such term is defined
in Section 512 of the Code.
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ARTICLE IV
CAPITAL CONTRIBUTIONS, UNITS,
CAPITAL ACCOUNTS AND ADVANCES
Section 4.1 CAPITAL CONTRIBUTIONS.
(a) Each Member has contributed to the capital of the Company the amount
of cash set forth opposite the Member's name on SCHEDULE A hereto, and the
Company has issued to each Member the number of Units set forth opposite the
Member's name on SCHEDULE A hereto; PROVIDED, that with respect to the Class D
Holders, the number of Class D Units issued to each Class D Holder and the
respective capital contributions relating thereto shall be maintained on the
books and records of the Company and not set forth on SCHEDULE A hereto.
(b) No Member shall be required to make any additional capital
contribution to the Company.
Section 4.2 STATUS OF CAPITAL CONTRIBUTIONS.
(a) Except as otherwise provided in this Agreement, the amount of a
Member's Capital Contributions may be returned to it, in whole or in part, at
any time, but only with the consent of all Members.
(b) No Member shall receive any interest, salary or drawing with respect
to its Capital Contributions or its Capital Account or for services rendered on
behalf of the Company or otherwise in its capacity as a Member, except as
otherwise specifically provided in this Agreement.
(c) Except as otherwise provided herein and by applicable state law, the
Members shall be liable only to make their Capital Contributions pursuant to
Section 4.1 hereof, and no Member or Assignee shall be required to lend any
funds to the Company or, after a Member's Capital Contributions has been fully
paid pursuant to Section 4.1 hereof, to make any additional capital
contributions to the Company. No Member shall have any personal liability for
the repayment of any Capital Contribution of any other Member or Assignee.
Section 4.3 CAPITAL ACCOUNTS.
(a) An individual Capital Account shall be established and maintained for
each Member. The Capital Account of each Member shall be maintained in
accordance with the rules of Section 704(b) of the Code and the Treasury
Regulations (including Section 1.704-1(b)(2)(iv) thereof) thereunder.
Adjustments shall be made to the Capital Accounts for all distributions and
allocations as required by the rules of Section 704(b) of the Code and the
Treasury Regulations
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thereunder. In general, a Member's Capital Account shall be increased by
(i) the amount of money and the Gross Asset Value of property (net of
liabilities secured by such contributed property that the Company is considered
to assume or to take subject to under Section 752 of the Code) contributed to
the Company by the Member and (ii) allocations to the Member of Profits and
decreased by (i) the amount of money distributed to the Member by the Company,
(ii) the Gross Asset Value of property distributed to the Member by the Company
(net of liabilities secured by such distributed property that such Member is
considered to assume or take subject to under Section 752 of the Code), and
(iii) allocations to the Member of Losses. In the event the Gross Asset Value
of Company assets is adjusted under Article I of this Agreement, the Capital
Accounts of the Members shall be adjusted to reflect the aggregate net
adjustment as if the Company recognized Profits or Losses equal to the amount of
such aggregate net adjustment and such Profits or Losses were allocated to the
Members pursuant to Sections 8.7 and 8.8 of this Agreement. The foregoing
provisions relating to the maintenance of Capital Accounts are intended to
comply with Regulations Sections 1.704-1(b) and 1.704-2 and shall be applied in
a manner consistent with such Regulations.
(b) The original Capital Account established for any Member or Assignee
who acquires an interest in the Company by virtue of a Transfer or an assignment
that does not cause a termination of the Company within the meaning of Code
Section 708(b)(1)(B) and that is in accordance with the terms of this Agreement
shall be in the same amount as, and shall replace, the Capital Account of the
transferor or assignor of such interest, and, for purposes of this Agreement,
such Member or Assignee shall be deemed to have made the Capital Contributions
made by the transferor or assignor of such interest (or made by such
transferor's or assignor's predecessor in interest) and have received the
distributions and been allocated the allocations received by or allocated to the
transferor or assignor of such interest (or received by or allocated to such
transferor's or assignor's predecessor in interest). If the Company has a Code
Section 754 election in effect, the Capital Account will not be adjusted to
reflect any adjustment under Code Section 743. To the extent such Member or
Assignee acquires less than the entire interest in the Company of the transferor
or assignor of the interest so acquired by such Member or Assignee, the original
Capital Account of such Member or Assignee and its Capital Contributions shall
be in proportion to the interest it acquires, and the Capital Account of the
transferor or assignor who retains a partial interest in the Company, and the
amount of its Capital Contributions, shall be reduced in proportion to the
interest it retains. If a Transfer or assignment of an interest in the Company
causes a termination of the Company within the meaning of Code Section
708(b)(1)(B), the income tax consequences of the distribution of the property
and of the deemed immediate contribution of the property to the new limited
liability company (which for all other purposes continues to be the Company)
shall be governed by the relevant provisions of Subchapter K of Chapter 1 of the
Code and the Regulations promulgated thereunder, and the initial Capital
Accounts of the Members and the Assignee in the new limited liability company
shall be determined in accordance with the rules of Treasury Regulations Section
1.704-1(b)(2)(iv)(d), (e), (f), (g) and (h) under Code Section 704 and
thereafter in accordance with this Section 4.3.
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Section 4.4. NEGATIVE CAPITAL ACCOUNTS. At no time during the term of the
Company or upon dissolution and liquidation thereof shall a Member with a
negative balance in his Capital Account have any obligation to the Company or
the other Members to restore such negative balance.
Section 4.5 ADVANCES. If any Member shall advance any funds to the
Company in excess of its Capital Contributions, the amount of such advance shall
neither increase its Capital Account nor entitle it to any increase in its share
of the distributions of the Company. The amount of any such advance shall be a
debt obligation of the Company to such Member and shall be repaid to it by the
Company with interest at a rate equal to the lesser of (i) such rate as the
Board agrees and (ii) the maximum rate permitted by applicable law, and upon
such other terms and conditions as shall be mutually determined by such Member
and the Board. Any such advance shall be payable and collectible only out of
Company assets, and the other Members shall not be personally obligated to repay
any part thereof. No Person who makes any nonrecourse loan to the Company shall
have or acquire, as a result of making such loan, any direct or indirect
interest in the profits, capital or property of the Company, other than as a
creditor.
Section 4.6 UNITS.
(a) DISTRIBUTIONS. Distributions on Units shall be made in accordance
with Article VIII hereof.
(b) VOTING. Except as otherwise provided in this Agreement, (i) the
Members who are Class A Holders shall be entitled to vote on each matter on
which the Members shall be entitled to vote at the rate of one vote for each
Class A Unit held by such Member; (ii) the Members who are Class B Holders shall
be entitled to vote on each matter on which the Members shall be entitled to
vote at the rate of one vote for each Class B Unit held by such Member;
(iii) except as set forth in Section 15.2(b), the Members who are Class C
Holders shall not be entitled to vote their Class C Units on any matter brought
before the Members for a vote; and (iv) the Members who are Class D Holders
shall not be entitled to vote their Class D Units on any matter brought before
Members for a vote.
(c) CLASS C UNITS. The Class C Units shall be subject to repurchase by
the Company in accordance with the provisions set forth on SCHEDULE B hereto.
Any Class C Units that have not been issued or that have been repurchased shall
not be outstanding for purposes of determining the Outstanding C Units
Percentage. Class C Units that are repurchased may not be reissued.
(d) CLASS D UNITS. The Class D Units shall be subject to repurchase by
the Company in accordance with the provisions set forth on SCHEDULE C hereto.
Any Class D Units that have not been issued or that have been repurchased shall
not be outstanding for purposes
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of determining clause (y) of the Outstanding D Units Percentage. Class D Units
that are repurchased may be reissued (subject to Section 12.1(a) hereof).
ARTICLE V
MEMBERS
Section 5.1 POWERS OF MEMBERS. The Members shall have the power to
exercise any and all rights or powers granted to the Members pursuant to the
express terms of this Agreement but subject to the terms and provisions of the
Securityholders Agreement. The Members shall agree to take any and all actions
required by, or approved in accordance with, the Securityholders Agreement.
Except as expressly provided in this Agreement, Members shall have no power as
Members to bind the Company.
Section 5.2 REIMBURSEMENTS. The Company shall reimburse the Members for
all reasonable and necessary out-of-pocket expenses incurred by the Members on
behalf of the Company. The Board's sole determination of which expenses may be
reimbursed to a Member and the amount of such expenses shall be conclusive.
Such reimbursement shall be treated as an expense of the Company that shall be
deducted in computing the Profits and shall not be deemed to constitute a
distributive share of Profits or a distribution or return of capital to any
Member.
Section 5.3 PARTITION. Each Member waives any and all rights that it may
have to maintain an action for partition of the Company's property.
Section 5.4 RESIGNATIONS. Other than any resignation by a Member approved
by a Majority Vote of the Members and any resignation described in Section 13.3,
a Member may not resign from the Company.
ARTICLE VI
BOARD OF MEMBER MANAGERS AND OFFICERS OF THE COMPANY
Section 6.1 DESIGNATION OF BOARD OF MEMBER MANAGERS. The management of
the Company's business shall be vested, to the extent provided in this
Article VI, in a Board of Member Managers of the Company (the "BOARD"),
consisting of three Member Managers who in the aggregate hold at least 20% of
the total interests in the Company. Each Member Manager must be a Member. The
Members hereby designate Dartford, Fenway and ▇▇▇▇▇▇ De Leeuw to serve as the
initial Member Managers on the Board, and such Member Managers hereby accept and
agree to be bound by the terms and conditions of this Agreement. A Member
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Manager that is not an individual shall act through any one of its authorized
representatives. Dartford designates ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ as its initial authorized representatives. Fenway designates ▇▇▇▇▇ ▇▇▇▇
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as its initial authorized representatives. ▇▇▇▇▇▇ De Leeuw
designates ▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ as its initial
authorized representatives. By written notice to all other Member Managers, a
Member Manager may remove and replace any of its authorized representatives from
such position or designate additional persons as authorized representatives of
such Member Manager. Each Member Manager and its designees agrees to act in
accordance with the Securityholders Agreement.
Section 6.2 ELECTION; RESIGNATION; REMOVAL.
(a) Each Member Manager shall serve from the effective date of its
designation until the effective date of its resignation or removal. In the event
any Member Manager ceases to be a Member Manager of the Company whether by
resignation or removal as provided in this Agreement or otherwise, a successor
Member Manager shall be elected by a Majority Vote. The Members agree to vote
for the Member Managers designated in accordance with Section 6.1 hereof. Such
successor Member Manager shall execute an instrument reasonably satisfactory to
the Members accepting and agreeing to the terms and conditions of this
Agreement.
(b) A Member Manager may resign from its position as a Member Manager at
any time upon not less than 10 days' prior written notice to all of the Members.
(c) No initial Member Manager specified in Section 6.1 hereof shall be
removed unless such initial Member Manager or successor Member Manager consents
to such removal; PROVIDED, that (i) Fenway shall automatically be removed as a
Member Manager if Fenway and its Permitted Transferees no longer hold 10% of the
outstanding Voting Units, and (ii) Dartford shall automatically be removed as a
Member Manager if the Management Services Agreement has been terminated in
accordance with its terms AND Dartford and its Permitted Transferees no longer
hold any Units. Any other Member Manager may be removed for Cause by a Majority
Vote. Any removal of a Member Manager shall become effective on such date as
may be specified by the Members voting in favor thereof. Should a Member
Manager that is removed continue to be a Member, such Member shall continue to
participate in the Company as a Member and shall share in the Profits, Losses
and Available Cash in the same ratios, as provided in Article VIII hereof.
Section 6.3 OFFICERS. The Board may appoint agents and employees of the
Company who are designated as officers of the Company. The officers of the
Company shall include a Chairman, one or more Executive Vice Presidents, a
Secretary and such other officers with such titles as may be approved by the
Board. ▇▇▇ ▇. ▇▇▇▇▇▇ shall be Chairman until his resignation or removal. ▇▇▇▇▇
▇. ▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇ shall each be an Executive Vice
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President until his resignation or removal. ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇
shall each be a Vice President until his resignation or removal. M. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ shall be a Vice President and the Secretary until her resignation or
removal. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall each be an Assistant
Secretary until his resignation or removal. The Board may remove any officer so
appointed at any time, with or without Cause, in its absolute discretion. The
Chairman and other officers shall be agents of the Company, authorized to
execute and deliver documents and take other actions on behalf of the Company,
subject to the direction of the Board, and to have such other duties as may be
approved by the Board; PROVIDED, that the delegation of any such power and
authority to the Chairman and other officers shall not limit in any respect the
power and authority of the Member Managers to take such actions (or any other
action) on behalf of the Company as provided in this Agreement. The Secretary
shall record the actions of the Board, certify this Agreement and any related
document or instrument, certify resolutions of the Board, incumbency and other
matters of the Company, and have such other ministerial duties as may be
specified by the Board from time to time.
Section 6.4 BOARD ACTION. Unless otherwise specified in this Agreement,
the Board shall act by majority vote with each Member Manager on the Board
having the following number of votes: ▇▇▇▇▇▇ De Leeuw: two; Fenway: one; and
Dartford: one; PROVIDED, that (i) so long as ▇▇▇▇▇▇ De Leeuw holds more than 50%
of the voting control of the then outstanding Voting Units, ▇▇▇▇▇▇ De Leeuw
shall have the right, by taking such action as would be required under the
Delaware General Corporation Law for a majority shareholder to act without a
meeting, to increase its number of votes to the number of votes that would
constitute a majority of the total votes on the Board. Any authorized
representative of any Member Manager on the Board shall be permitted to cast all
of the votes of such Member Manager. The Board shall act in accordance with the
terms and provisions of the Securityholders Agreement.
Section 6.5 MEETINGS. The Board may hold regular meetings without call or
notice at such places and at such times as the Board may from time to time
determine, provided reasonable notice of the first regular meeting following any
such determination is given to Member Managers absent at the meeting fixing
regular meetings. When called by the Chairman or by Member Managers holding a
majority of votes of the Board, the Board may hold special meetings at such
places and times as are designated in the call of the meeting, upon at least
seven days' notice given by the Secretary or an Assistant Secretary, or by the
officer or Member Manager calling the meeting.
Section 6.6 QUORUM. At any meeting of the Board, the presence of three
Member Managers by at least one of their authorized representatives shall
constitute a quorum. Any meeting may be adjourned from time to time by a
majority of votes, whether or not a quorum is present, and the meeting may be
held as adjourned upon reasonable notice.
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Section 6.7 ACTION BY CONSENT. Any action of the Board may be taken
without a meeting if (i) the Member Managers holding not less than the minimum
number of votes that would be required to approve and adopt such action at a
meeting consent to the action in writing, signed by an authorized representative
of each such Member Manager, (ii) notice of the actions to be approved by such
Member Managers is given to all Member Managers in advance and copies of the
written consents are so delivered to all Member Managers promptly thereafter,
and (iii) the written consents are filed with the records of the meetings of the
Board. Such actions by consent shall be treated for all purposes as actions
taken at a meeting.
Section 6.8 TELEPHONIC MEETINGS. Member Managers, through their
respective authorized representatives, may participate in a meeting of the Board
by means of a conference telephone or similar communications equipment provided
all Member Managers participating in the meeting can hear each other at the same
time, and participation by such means shall constitute presence in person at a
meeting.
Section 6.9 MEMBER MANAGERS AS AGENTS. The Member Managers, to the extent
of the powers set forth herein, are agents of the Company for the purpose of the
Company's business, and the actions of the Member Managers taken in accordance
with such powers shall bind the Company.
Section 6.10 POWERS OF THE BOARD; POWERS OF OFFICERS.
(a) The Board's powers on behalf and in respect of the Company, subject to
the provisions of this Agreement requiring the approval of the Members, shall be
all powers and privileges permitted to be exercised by members that manage the
Company under the Delaware Act, including, without limitation, Section 18-402 of
the Delaware Act; provided, nothing herein shall supersede, limit or otherwise
invalidate any action, authorization or resolution of the Members set forth in
this Agreement including, but not limited to those referred to in
Section 3.2(b).
(b) The Board may delegate any of its powers to the Officers of the
Company, or any one of them, except to the extent that this Agreement requires
the Board to take an action by voting.
(c) The Board hereby delegates to the Officers of the Company the
respective powers delegated to officers of a corporation under the Delaware
General Corporation Law, subject to the powers of a board of directors of a
corporation under such Delaware law; PROVIDED, that the Board reserves the right
to rescind the delegation of any such powers at any time in the sole discretion
of the Board. Notwithstanding the foregoing, all decisions as to the hiring and
terminating the employment of and the compensation of any officer who reports
directly to the Chairman or Chief Executive Officer of the Company shall be
subject to the approval of the Board.
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Section 6.11 REIMBURSEMENT. The Company shall reimburse each Member
Manager for all reasonable and necessary out-of-pocket expenses incurred by such
Member Manager on behalf of the Company according to such terms as shall be
approved by the Board. The Board's sole determination of which expenses may be
reimbursed to a Member Manager and the amount of such expenses shall be
conclusive. Such reimbursement shall be treated as an expense of the Company
that shall be deducted in computing Profits and shall not be deemed to
constitute a distributive share of Profits or a distribution or return of
capital to the Member Manager.
Section 6.12 REQUIRED APPROVALS BY THE BOARD.
(a) Any action or transaction by any of the New LLC Entities that requires
a consent or approval pursuant to the Securityholders Agreement shall be deemed
to have been approved by the Board if the required approval or consent pursuant
to the Securityholders Agreement has been obtained and shall not require any
further approval by the Board. The Board shall cause any vote, approval or
consent by the Company required by the Securityholders Agreement to be effected.
The Board shall not take any action or enter into any transaction inconsistent
with the Securityholders Agreement.
(b) Except for transactions between or among the Company and one or more of
its Other Subsidiaries, or between or among the Company's Other Subsidiaries
themselves, without the approval of the Board, the Company shall neither take
nor permit any of its Other Subsidiaries to take any of the following actions
(each event hereinafter described being hereafter referred to as a
"TRANSACTION") without the approval of the Board:
(i) any sale, Transfer, assignment or other disposition by the
Company of any interest in an Other Subsidiary of the Company, or by any
Other Subsidiary of the Company of any interest in another Other Subsidiary
of the Company;
(ii) any consolidation or merger of the Company with or into any other
limited liability company or other business entity (as defined in Section
18-209(a) of the Delaware Act), or any liquidation, dissolution or
winding-up of the Company;
(iii) (A) any consolidation or merger of any Other Subsidiary of
the Company with or into any business entity (as defined in Section
18-209(a) of the Delaware Act), (B) any sale by any Other Subsidiary of the
Company of all or substantially all of its assets, or (C) any liquidation,
dissolution or winding-up of any Other Subsidiary of the Company;
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(iv) any issuance of any equity securities of any Other Subsidiary of
the Company, or any securities convertible into shares of preferred stock
or common stock of any Other Subsidiary of the Company;
(v) any acquisition by the Company or any Other Subsidiary of the
Company of any stock or assets of another entity or of capital assets, in a
single transaction or a series of related transactions in any 12-month
period, for an aggregate purchase price in excess of $5,000,000;
(vi) any incurrence by the Company or any Other Subsidiary of the
Company of funded debt in a principal amount in excess of $2,500,000;
(vii) any removal of ▇▇. ▇▇▇ ▇. ▇▇▇▇▇▇ as the Chairman of the
Company or any Other Subsidiary of the Company and the hiring or removal of
any successor Chairman or any Chief Executive Officer, President or
Executive Vice President of the Company or any Other Subsidiary;
(viii) any election by Aurora Foods not to extend, or the
termination by Aurora Foods of, the Management Services Agreement.
(ix) any approval of the annual budget for any of the Other
Subsidiaries; and
(x) any selection of the firm of independent public accountants that
will audit the financial statements of the Company or its Other
Subsidiaries.
Section 6.13 BOARD OF DIRECTORS OF SUBSIDIARIES OF THE COMPANY.
(a) The Board of Member Managers of New LLC and the Boards of Directors of
the other New LLC Entities shall be determined in accordance with the terms and
conditions of the Securityholders Agreement. The Board will take such actions
as are necessary to cause the election of such Board of Member Managers and
Boards of Directors in accordance with the Securityholders Agreement.
(b) Each Member Manager agrees to take such action as a Member Manager as
may be necessary to cause a stockholder of any Other Subsidiary to elect the
following persons as members of the Board of Directors of such Other Subsidiary:
(A) three persons designated by ▇▇▇▇▇▇ De Leeuw, (B) two persons designated by
Fenway; PROVIDED, that (1) the number of persons Fenway may designate shall be
reduced to one if Fenway and its Permitted Transferees no longer hold at least
15% of the outstanding Voting Units and (2) the number of persons Fenway may
designate shall be reduced to zero if Fenway and its Permitted Transferees no
longer hold at least 10% of the outstanding Voting Units, and (C) three persons
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designated by Dartford; PROVIDED, that the number of persons Dartford may
designate shall be reduced to zero if Dartford and its Permitted Transferees no
longer hold any Units. Notwithstanding the foregoing:
(i) so long as ▇▇▇▇▇▇ De Leeuw holds more than 50% of the voting
control of the then outstanding Voting Units, ▇▇▇▇▇▇ De Leeuw shall have
the right, by taking such action as would be required under the Delaware
General Corporation Law (including without limitation Section 228 of the
Delaware General Corporation Law) for a majority shareholder to act without
a meeting, to designate a number of additional persons for election as
members of the Board of Directors of such Other Subsidiary which, when
added to the three persons previously designated by ▇▇▇▇▇▇ De Leeuw, would
constitute a majority of members of the Board of Directors of such Other
Subsidiary, and
(ii) unless otherwise directed by all of the Member Managers or as
required to comply with clause (B) or clause (C) of Section 6.13(b) or
subclause (i) above, the number of directors on the Board of Directors of
any Other Subsidiary shall not be less than eight.
(c) In the event ▇▇▇▇▇▇ De Leeuw exercises its rights under this
Section 6.13, the Member Managers agree to take such actions as may be necessary
to cause the election of the additional persons designated by ▇▇▇▇▇▇ De Leeuw as
directors of any Other Subsidiary and to amend the By-Laws of such entity in
connection therewith.
ARTICLE VII
AMENDMENTS AND MEETINGS
Section 7.1 AMENDMENTS. Except as expressly provided in this Agreement,
any amendment to this Agreement (including the Schedules hereto) shall be
adopted and be effective as an amendment hereto if it is approved by the
affirmative vote of Members holding 96% of the outstanding Voting Units. In
addition to the foregoing requirement:
(i) no amendment of this Section 7.1 or of Article VIII hereof (or
the definitions used therein) shall be effective without the written
approval of Members holding a majority of any class of Units that would be
adversely affected by such proposed amendment;
(ii) no amendment of Section 4.6(b) hereof or this Section 7.1(ii)
shall be effective without the written approval of Members holding a
majority of the Class A Units and Class B Units, respectively;
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(iii) no amendment of Section 4.6(c) hereof, SCHEDULE B hereto,
the third sentence of Section 12.1(a) hereof, Section 15.2(b) hereof or
this Section 7.1(iii) shall be effective without the prior written approval
of Members holding a majority of the Class C Units;
(iv) no amendment of SCHEDULE D hereto or this Section 7.1(iv) shall
be effective without the prior written approval of Dartford;
(v) no amendment of Section 6.1 or 6.2 regarding the initial Member
Managers or this Section 7.1(v) shall be made without the unanimous written
consent of such initial Member Managers; and
(vi) no amendment of Section 4.6(d), SCHEDULE C hereto or this
Section 7.1(vi) shall be effective without the prior written approval of
Members holding a majority of the Class D Units.
Notwithstanding the foregoing, the officers of the Company may amend SCHEDULE A
hereto to reflect new Members or Substitute Members duly admitted in accordance
with this Agreement, with such amendment to be effective upon the filing of such
amendment with the books and records of the Company.
Section 7.2 MEETINGS OF THE MEMBERS.
(a) Meetings of the Members may be called by the Board and shall be called
by the Board upon the written request of the Chairman or of Members holding 20%
of the outstanding Voting Units. The call shall state the location of the
meeting and the nature of the business to be transacted. Notice of any such
meeting shall be given to all Members not less than 14 days nor more than 50
days prior to the date of such meeting. Members may vote in person or by proxy
at such meeting. Whenever a vote, consent or approval of Members is permitted
or required under this Agreement, such vote, consent or approval may be given at
a meeting of Members or may be given in accordance with the procedure prescribed
in Section 7.2(e) hereof. Except as otherwise expressly provided in this
Agreement, a vote by Members holding a majority of the Voting Units shall be
required to constitute the act of the Members.
(b) For the purpose of determining the Members entitled to vote on, or to
vote at, any meeting of the Members or any adjournment thereof, the Board or the
Members requesting such meeting may fix, in advance, a date as the record date
for any such determination. Such date shall be not more than 50 days nor less
than 14 days before any such meeting.
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(c) Each Member may authorize any Person to act for it by proxy on all
matters in which a Member is entitled to participate, including waiving notice
of any meeting, or voting or participating at a meeting. Every proxy must be
signed by the Member or its attorney-in-fact. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided in the
proxy. Every proxy shall be revocable at the pleasure of the Member executing
it.
(d) Each meeting of Members shall be conducted by the Board or Members
requesting such meeting or by such other Person that the Board or Members
requesting such meeting may designate.
(e) Except as otherwise provided in this Agreement, any action of the
Members may be taken without a meeting if
(i) the Members holding not less than the minimum number of Voting
Units that would be required to approve and adopt such action at a meeting
consent to the action in writing,
(ii) written notice (delivered in person or by facsimile) of the
actions to be approved by such Members is given to all Members, and
(iii) the written consents are filed with the records of the
meeting of the Members. Such actions by consent shall be treated for all
purposes as actions taken at a meeting.
ARTICLE VIII
DISTRIBUTIONS AND ALLOCATIONS
Section 8.1 GENERAL DISTRIBUTION RULES. Except as provided in Section 8.2
hereof and except with respect to Available Cash up to $8,500,000 which shall be
distributed when received, the Company shall distribute Available Cash pursuant
to the terms hereunder to the Members at such times as shall be determined by
the Board. For purposes of this Article VIII, the term "Member" shall include
an Assignee of a Member and their successors and assigns.
Section 8.2 TAX LIABILITY DISTRIBUTIONS. The Board shall make cash
distributions on or prior to April 15th of each Year to the Members in amounts
intended to enable the Members (or any Person whose tax liability is determined
by reference to the income of a Member) to discharge their United States
federal, state and local income tax liabilities arising from the allocations
made pursuant to this Article VIII with respect to the Company's operations in
the preceding year (a "TAX LIABILITY DISTRIBUTION"). The amount of any such Tax
Liability
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Distribution shall be equal to 50% of the amount of income and gain allocated to
each Member pursuant to this Article VIII; PROVIDED, HOWEVER, if any
distributions are made with respect to the year for which the Tax Liability
Distribution is being determined pursuant to Sections 8.3(iii) through 8.3(viii)
hereof, such distributions shall reduce, by the amount of the distribution under
the relevant Section, the amount of the Tax Liability Distribution resulting
from the allocation of income and gain to such corresponding Section.
Section 8.3 OTHER DISTRIBUTIONS. Distributions other than Tax Liability
Distributions, including without limitation distributions of Available Cash but
not including distributions upon liquidation pursuant to Section 8.4 hereof,
shall be made to the Members as follows:
(i) First, an amount shall be distributed to the
Non-Dartford/Non-Fenway Group, which amount, when added to all prior
distributions made to the Non-Dartford/Non-Fenway Group under Section 8.2
hereof (relating to an allocation of income to the Members in respect of
the distribution made pursuant to this Section 8.3(i)) and this Section
8.3(i) equals $8,500,000 with such distribution to be allocated among such
Persons in proportion to the Class A Units held by them on the date of this
Agreement.
(ii) Next, an amount shall be distributed to the Class A Holders,
which amount, when added to all prior distributions made to such Members
with respect to the Class A Units under this Section 8.3(ii), shall be up
to the aggregate Capital Contributions of all Class A Holders at the time
such distribution is made. Such distribution shall be allocated among the
Class A Holders in proportion to their Capital Contributions.
(iii) Next, an amount shall be distributed to the Class B Holders
holding Class B Units outstanding as of January 1, 1998 ("ORIGINAL B
UNITS"), which amount, when added to all prior distributions made to such
Members with respect to the Original B Units under Section 8.2 and this
Section 8.3(iii), shall be up to the product of (A) $1,000 multiplied by
(B) the number of outstanding Original B Units held by such Class B
Holders. Such distribution shall be allocated among such Class B Holders
in proportion to their respective Original B Units.
(iv) Next, an amount equal to $19,546,500 shall be distributed as
follows: (A) an amount shall be distributed to each Class A Holder and
each Class B Holder holding Original Class B Units, which amount, when
added to all prior distributions made to such Member under Section 8.2 with
respect to such Class A Units and Original B Units (other than those prior
distributions already taken into account in clause (iii) above) and this
Section 8.3(iv) shall produce a return of 10% simple interest per annum on
(i) in the case of a Class A Holder,
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the Unrecouped Capital Contribution of such Class A Holder outstanding from
time to time from December 31, 1996 and (ii) in the case of Class B Holders
holding Original B Units, the portion of the amount payable pursuant to
Section 8.3(iii) which remains undistributed from time to time from
December 31, 1996; (B) if any portion of the $19,546,500 distributable
under this clause (iv) remains undistributed after all distributions
required under subclause (A) above have been made, an amount shall be
distributed to the Class C Holders and the Class D Holders holding Vested
Class D Units in accordance with the principles set forth in Section
8.3(vii) below except that the references to "this Section 8.3(vii)"
therein shall for purposes of this Section 8.3(iv) be references to this
Section 8.3(iv) and any references to Section 8.3(vi) therein shall be
deleted; and (C) if any portion of the $19,546,500 distributable under this
clause (iv) remains undistributed after all distributions required under
subclauses (A) and (B) above have been made, an amount shall be distributed
to the Class A Holders, the Class B Holders holding Original B Units, the
Class C Holders, and the Class D Holders in accordance with the principles
set forth in Section 8.3(viii) below except that with respect to any
distribution to be made to Class A Holders and Class B Holders in
accordance with the principles set forth in such Section 8.3(viii), such
distribution shall be allocated among the Class A Holders and the Class B
Holders in accordance with their respective holdings of Class A Units and
Original B Units. To the extent the amount of any proposed distribution
under subclause (A) or (B) above is not sufficient to provide a full
distribution of the amount required to be distributed to each Member
entitled to receive a distribution with respect thereto, the amount of such
distribution shall be allocated, in the case of subclause (A), between the
Class A Holders as a group and the Class B Holders holding Original B Units
as a group, and in the case of subclause (B), between the Class C Holders
as a group and the Class D Holders holding Vested Class D Units as a group,
based on the respective amounts which each such group would have received
had the total distribution been made.
(v) Next, an amount shall be distributed to the Class B Holders with
respect to all Class B Units other than Original B Units ("ADDITIONAL B
UNITS"), which amount, when added to all prior distributions made to such
Members with respect to such Additional B Units under Section 8.2 and this
Section 8.3(v), shall be up to the product of (A) $1,300 multiplied by (B)
the number of outstanding Additional B Units held by such Class B Holders.
Such distribution shall be allocated among the Class B Holders holding
Additional B Units in proportion to their respective Additional B Units.
(vi) Next, an amount shall be distributed to each Class A Holder and
each Class B Holder, which amount, when added to all prior distributions
made to such Member under Section 8.2 with respect to Class A Units or
Class B
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Units, respectively (other than those prior distributions already taken
into account in clauses (iii) or (v) above), under Section 8.3(iv)(A) above
and under this Section 8.3(vi) shall produce a return of 10% simple
interest per annum and no more on (i) in the case of a Class A Holder, the
Unrecouped Capital Contributions of such Class A Holder outstanding from
time to time from December 31, 1996 and (ii) in the case of the Class B
Holders, the portion of the amount payable pursuant to Section 8.3(iii) and
Section 8.3(v) which remains undistributed from time to time from
December 31, 1996. To the extent the amount of any proposed distribution
under this Section 8.3(vi) is not sufficient to provide a full distribution
of the amount required to be distributed to each Class A Holder and Class B
Holder by this Section 8.3(vi), the amount of such distribution shall be
allocated between the Class A Holders as a group and the Class B Holders as
a group based on the respective amounts which each group would have
received had the total distribution been made.
(vii) Next, an amount shall be distributed to the Class C Holders
and the Class D Holders as follows: (A) an amount shall be distributed to
the Class C Holders, which amount, when added to all prior distributions
made to such Members with respect to the Class C Units under Section 8.2,
Section 8.3(iv)(B) and this Section 8.3(vii), shall be up to the
Outstanding C Units Percentage multiplied by 16.25% of all prior
distributions made pursuant to Section 8.3(iv)(A) and Section 8.3(vi)
above, with such distribution to be allocated among the Class C Holders in
proportion to the Class C Units then held by each of them, and (B) an
amount shall be distributed to the Class D Holders holding Vested Class D
Units, which amount, when added to all prior distributions made to such
Members with respect to the Vested Class D Units under Section 8.2, Section
8.3(iv)(B) and this Section 8.3(vii), shall be up to the Outstanding D
Units Percentage multiplied by 8.75% of all prior distributions made
pursuant to Section 8.3(iv)(A) and Section 8.3(vi) above, with such
distribution to be allocated among the Class D Holders in proportion to the
Vested Class D Units then held by each of them. To the extent the amount
of any proposed distribution under this Section 8.3(vii) is not sufficient
to provide a full distribution of the amount required to be distributed to
each Class C Holder and each Class D Holder holding Vested Class D Units by
this Section 8.3(vii), the amount of such distribution shall be allocated
between the Class C Holders as a group and the Class D Holders holding
Vested Class D Units as a group based on the respective amounts which each
group would have received had the total distribution been made.
(viii) Next, any balance shall be distributed to the Class A
Holders, the Class B Holders, the Class C Holders and the Class D Holders
as follows: (A) 80% of such balance shall be distributed to the Class A
Holders and the Class
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B Holders, with such distribution to be allocated among the Class A Holders
and Class B Holders in accordance with their respective holdings of Class A
Units and Class B Units as if the Class A Units and Class B Units were
Units of a single class; PROVIDED, that the portion of such 80% of such
balance to be distributed to each Class A Holder and Class B Holder shall
be the amount necessary so that all distributions to Class A Holders and
Class B Holders under this Section 8.3(viii), when added to all
distributions under clauses (iv) and (vi) of this Section 8.3, are
proportionate to the number of Class A Units outstanding (with respect to
the Class A Holders) and the number of Class B Units outstanding (with
respect to the Class B Holders); (B) 13% of such balance (such amount the
"13% BALANCE") shall be distributed among the Class C Holders and the Class
A and Class B Holders as follows: (X) an amount equal to the Outstanding C
Units Percentage multiplied by the 13% Balance shall be distributed to the
Class C Holders to be allocated among the Class C Holders in proportion to
the Class C Units then held by each of them and (Y) the portion, if any, of
the 13% Balance remaining on hand after the distribution described in
subclause 8.3(viii)(B)(x) above shall be distributed to the Class A and
Class B Holders as a group to be allocated among such Class A and Class B
Holders in proportion to which their respective holdings of Class A Units
and Class B Units as if the Class A Units and Class B Units were Units of a
single class; and (C) 7% of such balance (such amount the "7% BALANCE")
shall be distributed among the Company on account of the Class D Units and
the Class A, Class B and Class C Holders as follows: (X) an amount equal
to the Outstanding D Units Percentage multiplied by the 7% Balance shall be
distributed to the Class D Holders holding Vested Class D Units to be
allocated among such Class D Holders in proportion to the Vested Class D
Units then held by each of them and (Y) the portion, if any, of the 7%
Balance remaining on hand after the distribution described in subclause
8.3(viii)(C)(x) above shall be distributed to the Class A Holders, the
Class B Holders and the Class C Holders to be allocated among such Holders
in proportion to the aggregate amounts distributed to each of them pursuant
to Sections 8.3(viii)(A) and (B) hereof.
Notwithstanding the foregoing, with respect to any amount stated to be
distributable to holders of Additional B Units pursuant to Section 8.3(v),
8.3(vi) or 8.3(viii) hereof, such amount shall not be distributed as so stated
and shall instead be distributed as follows: (A) 24.3% of such amount shall be
distributed to the Non-Dartford/Non-Fenway Group, with such distribution to be
allocated among such Persons in proportion to the Class A Units held by them on
the date of this Agreement; and (B) 75.7% of such amount shall be distributed to
the Class B Holders holding Additional B Units, with such distribution to be
allocated among such Persons in proportion to their respective Additional B
Units.
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Notwithstanding the foregoing, in the event that distributions have been
made under Sections 8.3(ii)-(vii) above and are then eligible to be made under
Section 8.3(viii), and the Outstanding D Units Percentage is increased from the
percentage in effect at the time distributions were previously made under
Section 8.3(vii) above, additional distributions shall be made under
Section 8.3(vii) above to those Class D Holders holding Vested Class D Units to
the extent their holdings of such Units increased the Outstanding D Units
Percentage, respectively, before any further distributions under
Section 8.3(viii) are made.
Section 8.4 DISTRIBUTION OF PROCEEDS UPON LIQUIDATION. Upon liquidation
of the Company, any distributions shall be made in accordance with the terms and
conditions of Article XV hereof and shall be made by the end of the taxable year
in which the liquidation occurs, or, if later, within ninety (90) days after the
liquidation.
Section 8.5 TAX WITHHOLDING. All amounts withheld pursuant to the Code or
any provision of any state or local tax law with respect to any payment,
distribution or allocation to the Company or the Members shall be treated as
amounts distributed to the Members pursuant to this Article VIII for all
purposes of this Agreement. The Board is authorized to withhold from
distributions, or with respect to allocations, to the Members and to pay over to
any federal, state or local government any amounts required to be so withheld
pursuant to the Code or any provision of any other federal, state or local law
and shall allocate such amounts to those Members or with respect to which such
amounts were withheld.
Section 8.6 LIMITATIONS ON DISTRIBUTION. Notwithstanding any provision to
the contrary contained in this Agreement, the Company shall not make a
distribution to any Member on account of its interest in the Company if such
distribution would violate Section 18-607 of the Delaware Act or other
applicable law.
Section 8.7 ALLOCATION OF PROFITS. Profits of the Company for any Tax
Year shall be allocated in the following order and priority:
(i) First, among the Members in accordance with and in an amount
equal to the cumulative Losses allocated among the Members pursuant to
Section 8.8(ii) hereof for all prior periods and not previously taken into
account under this clause.
(ii) Next, among the Members in accordance with and in an amount equal
to the cumulative Losses allocated among the Members pursuant to
Section 8.8(i) hereof for all prior periods and not previously taken into
account under this clause.
(iii) Next, among the Persons who are members of the
Non-Dartford/Non-Fenway Group, in proportion to, and in an amount equal to
the
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excess, if any, of (A) the cumulative cash distributions that have
previously been made to such Persons under Section 8.3(i) and that each
such Person would have received under such Section for the then current Tax
Year of the Company had an amount of cash at least equal to such Profits
been available for such distribution under such Section over (B) the
cumulative allocations previously made to such Persons pursuant to this
Section 8.7(iii).
(iv) Next, among the Class B Holders in proportion to, and in an
amount equal to the excess, if any, of (A) the cumulative cash
distributions under Section 8.3(iii) that have previously been made to the
Class B Holders and that each Class B Holder would have received under such
Section for the then current Tax Year of the Company had an amount of cash
at least equal to such Profits been available for such distribution under
such Section over (B) the cumulative allocations previously made to the
Class B Holders pursuant to this Section 8.7(iv).
(v) Next, among the Class A Holders, the Class B Holders, the Class C
Holders and the Class D Holders holding Vested Class D Units in proportion
to, and in an amount equal to the excess, if any, of (A) the cumulative
cash distributions under Section 8.3(iv) hereof that have previously been
made to the Class A Holders, the Class B Holders, the Class C Holders and
such Class D Holders and that each Class A Holder, Class B Holder, and
Class C Holder and each such Class D Holder would have received under
Section 8.3(iv) hereof for the then current Tax Year of the Company had an
amount of cash at least equal to such Profits been available for such
distribution under such Section over (B) the cumulative allocations
previously made to the Class A Holders, the Class B Holders and the Class C
Holders and such Class D Holders pursuant to this Section 8.7(v).
(vi) Next, among the Class B Holders in proportion to, and in an
amount equal to the excess, if any, of (A) the cumulative cash
distributions under that Section 8.3(v) hereof that have previously been
made to the Class B Holders and Class B Holder would have received under
such section for the then current Tax Year of the Company had an amount of
cash at least equal to such Profits been available for such distributions
under such Section over (B) the cumulative allocations previously made to
the Class B Holders pursuant to this Section 8.7(vi).
(vii) Next, among the Class A Holders and the Class B Holders in
proportion to, and in an amount equal to the excess, if any, of (A) the
cumulative cash distributions under Section 8.3(vi) hereof that have
previously been made to the Class A Holders and Class B Holders and that
each Class A Holder and Class
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B Holder would have received under Section 8.3(vi) hereof for the then
current Tax Year had an amount of cash at least equal to such Profits been
available for such distribution under such Section over (B) the cumulative
allocations previously made to the Class A Holders and Class B Holders
pursuant to this Section 8.7(vii).
(viii) Next, among the Class C Holders and Class D Holders holding
Vested Class D Units in proportion to, and in an amount equal to the
excess, if any, of (A) the cumulative cash distributions under
Section 8.3(vii) that have previously been made to the Class C Holders and
such Class D Holders and that each Class C Holder and each such Class D
Holder would have received under Section 8.3(vii) hereof for the current
Tax Year of the Company had an amount of cash at least equal to such
Profits been available for distribution under such Section over (B) the
cumulative allocations previously made to the Class C Holders and such
Class D Holders pursuant to this Section 8.7(viii).
(ix) Next, among the Members in proportion to and in an amount equal
to the excess, if any, of (A) the cumulative cash distributions under
Section 8.3(viii) hereof that have previously been made to such Members and
that such Member would have received under Section 8.3(viii) hereof for the
then current Tax Year had an amount of cash at least equal to such Profits
been available for such distribution under such Section over (B) the
cumulative allocations previously made to the Members pursuant to this
Section 8.7(ix).
Notwithstanding the foregoing, profits that would be allocated to the
Additional B Units pursuant to SECTIONS 8.7(vi), 8.7(vii) OR 8.7 (ix) shall be
allocated to the Additional B Units and the Non-Dartford/Non-Fenway Group in the
amounts and proportions of the distributions required under SECTIONS 8.3(v),
8.3(vi) OR 8.3(viii) as adjusted by SECTION 8.3 hereof. For purposes of
determining Profits allocations under this Section 8.7, amounts actually
distributed under the relevant paragraph of Section 8.3 shall be increased by
the amount of the reduction under such paragraph that was made to reflect the
Section 8.2 distribution referred to therein.
Section 8.8 ALLOCATION OF LOSSES. Losses of the Company for any Tax Year
shall be allocated in the following order and priority:
(i) First, to offset any Profits previously allocated under
Section 8.7 in the inverse order and priority in which such Profits were
allocated; and
(ii) Next, in the following order (a) to the Class A Holders to the
extent of their Capital Contributions and (b) to the Class A Holders and
the Class
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B Holders in accordance with their respective PRO RATA portion of Class A
Units and Class B Units taken together for this purpose as a single class
of Units.
Section 8.9. SPECIAL ALLOCATIONS. The following special allocations shall
be made in the following order:
(i) QUALIFIED INCOME OFFSET. Notwithstanding the foregoing, in the
event that any Member receives any adjustments, allocations or
distributions described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) of
the Treasury Regulations, items of Company income and gain (including gross
income) shall be specially allocated to each such Member in a manner and
amount sufficient to eliminate, to the extent required by such Regulations,
the negative balance in the Capital Account of the Member described in
Section 1.704-1(b)(2)(ii)(d)(3) of the Treasury Regulations as quickly as
possible.
(ii) GROSS INCOME ALLOCATION. In the event any Member has a deficit
Capital Account at the end of any Tax Year, each such Member shall be
specially allocated items of Company income and gain in the amount of such
deficit Capital Account as quickly as possible, provided that an allocation
pursuant to this Section 8.9(ii) shall be made only if and to the extent
that such Member would have a deficit Capital Account in excess of such sum
after all other allocations provided for in this Article VIII have been
made as if Section 8.9(i) and (ii) were not in this Agreement.
Section 8.10 ALLOCATION RULES.
(a) In the event Members are admitted to the Company pursuant to this
Agreement on different dates, the Profits (or Losses) allocated to the Members
for each Tax Year during which Members are so admitted shall be allocated among
the Members in proportion to the respective Units that each holds from time to
time during such Tax Year in accordance with Section 706 of the Code, using any
convention permitted by law and selected by the Board.
(b) For purposes of determining the Profits, Losses or any other items
allocable to any period, Profits, Losses and any such other items shall be
determined on a daily, monthly or other basis, as determined by the Board using
any method that is permissible under Section 706 of the Code and the Treasury
Regulations thereunder.
(c) Except as otherwise provided in this Agreement, all types of Company
income, gain, loss, deduction and any other allocations not otherwise provided
for shall be divided among the Members in the same proportions as they share
Profits and Losses for the Tax Year in question.
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Section 8.11 TAX ALLOCATIONS OF SECTION 704(C) OF THE CODE.
(a) In accordance with Section 704(c) of the Code and the Treasury
Regulations thereunder, income, gain, loss and deduction with respect to any
property contributed to the capital of the Company shall, solely for income tax
purposes, be allocated among the Members so as to take account of any variation
between the adjusted basis of such property to the Company for federal income
tax purposes and its initial Gross Asset Value (computed in accordance with
Section 1.1 hereof).
(b) In the event the Gross Asset Value of any Company asset is adjusted
pursuant to Paragraph (b) of the definition of "Gross Asset Value" contained in
Section 1.1 hereof, subsequent allocations of income, gain, loss and deduction
with respect to such asset shall take account of any variation between the
adjusted basis of such asset for federal income tax purposes and its Gross Asset
Value in the same manner as under Section 704(c) of the Code and the Treasury
Regulations thereunder.
(c) Any elections or other decisions relating to allocations solely for
tax purposes under this Article VIII, including the selection of any allocation
method permitted under proposed Treasury Regulation Section 1.704-1(c), shall be
made by the Board in any manner that reasonably reflects the purpose and
intention of this Agreement. Allocations pursuant to this Section 8.11 are
solely for purposes of federal, state and local taxes and shall not affect, or
in any way be taken into account in computing, any Member's Capital Account or
share of Profits, Losses, other items or distributions pursuant to any provision
of this Agreement.
(d) The Members are aware of the income tax consequences of the
allocations made by this Article VIII and hereby agree to be bound by the
provisions of this Article VIII in reporting their shares of Company income and
loss for income tax purposes.
ARTICLE IX
BOOKS AND RECORDS
Section 9.1 BOOKS, RECORDS AND FINANCIAL STATEMENTS.
(a) At all times during the continuance of the Company, the Company shall
maintain, at its principal place of business, separate books of account for the
Company that shall show a true and accurate record of all costs and expenses
incurred, all charges made, all credits made and received and all income derived
in connection with the operation of the Company business in accordance with
generally accepted accounting principles consistently applied, and, to the
extent inconsistent therewith, in accordance with this Agreement. Such books of
account, together with a copy of this Agreement and of the Certificate, shall at
all times be maintained
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at the principal place of business of the Company and shall be open to
inspection and examination at reasonable times by each Member and its duly
authorized representative for any purpose reasonably related to such Member's
interest in the Company. The books of account and the records of the Company
shall be examined by and reported upon as of the end of each Fiscal Year by a
firm of independent certified public accountants selected by the Board. Any
Member shall have the right to have a private audit of the Company books and
records conducted at reasonable times and after reasonable advance notice to the
Company for any purpose reasonably related to such Member's interest in the
Company, but any such private audit shall be at the expense of the Member
desiring it, and it shall not be paid for out of Company funds.
(b) The Board shall prepare and maintain, or cause to be prepared and
maintained, the books of account of the Company and the following documents
shall be transmitted by the Board to each Member holding 5% or more of the
outstanding Voting Units at the times hereinafter set forth:
(i) as soon as available and in any event within 95 days after the
end of each Fiscal Year of the Company, a balance sheet of the Company as
of the end of such Fiscal Year and the related statements of income and
cash flows of the Company for such Fiscal Year, all reported on by such
independent public accountants of nationally recognized standing as the
Board shall select;
(ii) as soon as available and in any event within 50 days after the
end of each of the first three quarters of each Fiscal Year of the Company,
a balance sheet of the Company as of the end of such quarter and the
related statements of income and cash flows of the Company for such
quarter; and
(iii) such other financial reports of the Company or any
Subsidiary that the Company or any Subsidiary is required to deliver to its
senior lender, within 5 days after such financial reports are required to
be delivered to such senior lender.
(c) All information contained in any statement or other document
distributed to any Member pursuant to Section 9.1(b) hereof shall be deemed
accurate, binding and conclusive with respect to such Member unless written
objection is made thereto by such Member to the Company within 20 business days
after the receipt of such statement or other document by such Member.
Section 9.2 ACCOUNTING METHOD. The books and records of the Company shall
be kept on the accrual method of accounting applied in a consistent manner and
shall reflect all Company transactions and be appropriate and adequate for the
Company's business.
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Section 9.3 ANNUAL AUDIT. As soon as practical after the end of each
Fiscal Year, but not later than 90 days after such end, the financial statements
of the Company shall be audited by the independent certified public accountants
referred to in Section 9.1(a) hereof, and such financial statements shall be
accompanied by a report of such accountants containing their opinion. The cost
of such audits will be an expense of the Company. A copy of the audited
financial statements and the accountants' report will be furnished to each
Member within 10 business days after their receipt by the Member Manager.
ARTICLE X
TAX
Section 10.1 TAX MATTERS MEMBER.
(a) Dartford is hereby designated as the initial "Tax Matters Member" of
the Company and as the "Tax Matters Partner" for purposes of Section 6231(a)(7)
of the Code and shall have the power to manage and control, on behalf of the
Company, any administrative proceeding at the Company level with the Internal
Revenue Service relating to the determination of any item of Company income,
gain, loss, deduction or credit for federal income tax purposes. The Tax
Matters Member shall not take any action or make any decision that materially
affects the Company or the Members (including without limitation with respect to
income, loss, deduction or credit of the Company) without the prior written
consent of Members by Majority Vote.
(b) The Tax Matters Member shall, within 10 days of the receipt of any
notice from the Internal Revenue Service in any administrative proceeding at the
Company level relating to the determination of any Company item of income, gain,
loss, deduction or credit, mail a copy of such notice to each Member.
(c) The Members may at any time hereafter designate a new Tax Matters
Member by a Majority Vote; provided, however, that only a Member may be
designated as the Tax Matters Member of the Company.
Section 10.2 RIGHT TO MAKE SECTION 754 ELECTION. The Board may, in its
sole discretion, make or revoke, on behalf of the Company, an election in
accordance with Section 754 of the Code, so as to adjust the tax basis of
Company property in the case of a distribution of property within the meaning of
Section 734 of the Code, and in the case of a transfer of a Company interest
within the meaning of Section 743 of the Code. Each of the Members shall, upon
request of the Board, supply the information necessary to give effect to such an
election.
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ARTICLE XI
LIABILITY, EXCULPATION AND INDEMNIFICATION
Section 11.1 LIABILITY. Except as otherwise provided by the Delaware Act,
the debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Covered Person shall be obligated personally
for any such debt, obligation or liability of the Company solely by reason of
being a Covered Person.
Section 11.2 EXCULPATION.
(a) No Covered Person shall be liable to the Company or any other Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Covered Person in good faith on behalf of the
Company and in a manner reasonably believed to be within the scope of authority
conferred on such Covered Person by this Agreement or the Securityholders
Agreement, except that a Covered Person shall be liable for any such loss,
damage or claim incurred by reason of such Covered Person's gross negligence or
willful misconduct.
(b) A Covered Person shall be fully protected in relying in good faith
upon the records of the Company and upon such information, opinions, reports or
statements presented to the Company by any Person as to matters the Covered
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Company, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, Profits, Losses or any other facts
pertinent to the existence and amount of assets from which distributions to
Members might properly be paid.
Section 11.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, a Covered Person has duties
(including fiduciary duties) and liabilities relating thereto to the Company or
to any other Covered Person, a Covered Person acting under this Agreement or the
Securityholders Agreement shall not be liable to the Company or to any other
Covered Person for its good faith reliance on the provisions of this Agreement
or the Securityholders Agreement. The provisions of this Agreement or the
Securityholders Agreement, to the extent that they restrict the duties and
liabilities of a Covered Person otherwise existing at law or in equity, are
agreed by the parties hereto to replace such other duties and liabilities of
such Covered Person.
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(b) Unless otherwise expressly provided herein,
(i) whenever a conflict of interest exists or arises between Covered
Persons, or
(ii) whenever this Agreement, the Securityholders Agreement or any
other agreement contemplated herein or therein provides that a Covered
Person shall act in a manner that is, or provides terms that are, fair and
reasonable to the Company or any Member, the Covered Person shall resolve
such conflict of interest, taking such action or providing such terms,
considering in each case the relative interest of each party (including its
own interest) to such conflict, agreement, transaction or situation and the
benefits and burdens relating to such interests, any customary or accepted
industry practices, and any applicable generally accepted accounting
practices or principles; PROVIDED that the Board shall vote on the adequacy
of any such resolution of conflict of interest by the Covered Person,
making such adjustments to such resolution as the Board in its sole
discretion sees fit; and PROVIDED FURTHER that if such Covered Person is a
Member Manager, such Covered Person shall not vote with the Board on the
adequacy of such resolution. In the absence of bad faith by the Covered
Person, the resolution, action or term so made, taken or provided by the
Covered Person shall not constitute a breach of this Agreement, the
Securityholders Agreement or any other agreement contemplated herein or of
any duty or obligation of the Covered Person at law or in equity or
otherwise.
(c) Whenever in this Agreement or the Securityholders Agreement a Covered
Person is permitted or required to make a decision
(i) in its "discretion" or under a grant of similar authority or
latitude, the Covered Person shall be entitled to consider such interests
and factors as it desires, including its own interests, and shall have no
duty or obligation to give any consideration to any interest of or factors
affecting the Company or any other Person, or
(ii) in its "good faith" or under another express standard, the
Covered Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Agreement, the
Securityholders Agreement or other applicable law.
Section 11.4 INDEMNIFICATION. To the fullest extent permitted by
applicable law, a Covered Person shall be entitled to indemnification from the
Company for any loss, damage or claim incurred by such Covered Person by reason
of any act or omission performed or omitted by such Covered Person in good faith
on behalf of the Company and in a manner
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reasonably believed to be within the scope of authority conferred on such
Covered Person by this Agreement and the Securityholders Agreement, except that
no Covered Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Covered Person by reason of gross negligence or
willful misconduct with respect to such acts or omissions; PROVIDED, HOWEVER,
that any indemnity under this Section 11.4 shall be provided out of and to the
extent of Company assets only, and no Covered Person shall have any personal
liability on account thereof.
Section 11.5 EXPENSES. To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by a Covered Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be advanced
by the Company prior to the final disposition of such claim, demand, action,
suit or proceeding including any claim, demand, action, suit or proceeding with
respect to which such Covered Person is alleged to have not met the applicable
standard of conduct or is alleged to have committed conduct so that, if true,
such Covered Person would not be entitled to indemnification under this
Agreement or the Securityholders Agreement, upon receipt by the Company of an
undertaking by or on behalf of the Covered Person to repay such amount if it
shall be determined that the Covered Person is not entitled to be indemnified as
authorized in Section 11.4 hereof.
Section 11.6 OUTSIDE BUSINESSES. Except as may be provided in other
agreements entered into by such Person and the Company and/or its Subsidiaries,
any Member, Member Manager, Officer or Affiliate thereof may engage in or
possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Company or any of its Subsidiaries, and the Company, the Members, the Member
Managers and the Officers shall have no rights by virtue of this Agreement in
and to such independent ventures or the income or Profits derived therefrom, and
the pursuit of any such venture, even if competitive with the business of the
Company, shall not be deemed wrongful or improper. Except as may be provided in
other agreements entered into by such Person and the Company and/or its
Subsidiaries, no Member, Member Manager, Officer or Affiliate thereof shall be
obligated to present any particular investment opportunity to the Company even
if such opportunity is of a character that, if presented to the Company, could
be taken by the Company, and any Member, Member Manager, Officer or Affiliate
thereof shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
opportunity.
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ARTICLE XII
ADDITIONAL MEMBERS AND UNITS
Section 12.1 ADDITIONAL UNITS.
(a) If approved by a Majority Vote, the Company is authorized to raise
additional capital by offering and selling, or causing to be offered and sold,
additional limited liability company interests in the Company ("ADDITIONAL
UNITS") to any Person in such amounts and on such terms as the Board may
determine. With respect to any issuance of Class D Units, or reissuance of
Class D Units that are forfeited in accordance with SCHEDULE C hereto, the
approval of a Majority Vote of Members shall not be required with respect
thereto; PROVIDED, that (i) any issuance of Class D Units to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
C. ▇▇▇▇ ▇▇▇▇▇▇▇ and the direct reports of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and any other person
that reports to the Chairman or the Chief Executive Officer of Aurora Foods and
that person's direct reports shall be in such amounts as the Chairman of the
Company recommends to the Board subject to the approval of the Board, and
(ii) any issuance of Class D Units to any other person shall be in such amounts
as the President of Aurora Foods and the Chairman of the Company disclose to the
Board after consultation with each other. Notwithstanding the foregoing, the
Company is not authorized to issue any additional Class C Units unless all of
the Class C Holders consent to such issuance in advance thereof. Each Person
who subscribes for any of the Additional Units shall be admitted as an
additional member of the Company (each, an "ADDITIONAL MEMBER" and collectively,
the "ADDITIONAL MEMBERS") at the time such Person (i) executes this Agreement
and the Securityholders Agreement or a counterpart of this Agreement and the
Securityholders Agreement and (ii) is named as a Member on the Schedules hereto.
The legal fees and expenses associated with such admission may be borne by the
Company.
(b) If Additional Units are issued pursuant to this Article XII such
Additional Units will be treated for all purposes of this Agreement as Units as
of the date of issuance.
Section 12.2 PREEMPTIVE RIGHTS. In the event that the Company at any
time shall propose to issue additional Class A Units or units of any other class
of limited liability company interests (other than Class C Units or Class D
Units), or any securities convertible into, or exchangeable for, or any rights,
warrants or options to purchase, any limited liability company interests in the
Company, each Class A Holder and Class B Holder shall have the right to purchase
up to such Holder's Proportionate Percentage of such Additional Units or such
securities being issued. To the extent any such proposed issuance would result
in ▇▇▇▇▇▇ De Leeuw and its Permitted Transferees not holding in excess of 50% of
the outstanding Voting Units, each such Holder who elects to purchase a full
Proportionate Percentage of such Additional Units or securities shall also be
entitled to elect to purchase additional amounts of such Additional Units or
securities up to the amount of such Holder's recalculated Proportionate
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Percentage of the number of Additional Units which the Holders purchasing less
than their full Proportionate Percentages did not purchase.
Section 12.3 ALLOCATIONS. Additional Units shall not be entitled to any
retroactive allocation of the Company's income, gains, losses, deductions,
credits or other items; provided that, subject to the restrictions of Section
706(d) of the Code, Additional Units shall be entitled to their respective share
of the Company's income, gains, losses, deductions, credits and other items
arising under contracts entered into before the effective date of the issuance
of any Additional Units to the extent that such income, gains, losses,
deductions, credits and other items arise after such effective date. To the
extent consistent with Section 706(d) of the Code and Treasury Regulations
promulgated thereunder, the Company's books may be closed at the time Additional
Units are issued (as though the Company's Tax Year had ended) or the Company may
credit to the Additional Units pro rata allocations of the Company' income,
gains, losses, deductions, credits and items for that portion of the Company's
Tax Year after the effective date of the issuance of the Additional Units.
ARTICLE XIII
ASSIGNABILITY AND SUBSTITUTE MEMBERS
Section 13.1 RESTRICTIONS ON TRANSFER.
(a) No Member shall sell or otherwise Transfer any of its Units (whether
now held or hereafter acquired), except in accordance with the terms of this
Agreement and the Securityholders Agreement. Any attempted Transfer of any of a
Member's Units in violation of the terms of this Agreement will be null, void
and of no effect and the proposed transferee shall not be recognized by the
Company as the owner or holder of the Units attempted to be Transferred or any
rights pertaining thereto (including, without limitation, voting rights and
rights to allocations and distributions).
(b) Except as otherwise provided in this Agreement, no Transfer of (i) a
Class A Unit by a Class A Holder, (ii) a Class B Unit by a Class B Holder,
(iii) a Class C Unit by a Class C Holder, or (iv) a Class D Unit by a Class D
Holder may be made without the consent of the Board, which may be withheld in
its sole discretion.
(c) As a condition precedent to the effectiveness of any Transfer of Units
to any Person (other than the Company or a Person that is already a Member and
has executed this Agreement), the transferee shall execute a counterpart of this
Agreement and deliver it to the Company. As a condition precedent to the
effectiveness of any Transfer of Units by a Member or Person who is a signatory
to the Securityholders Agreement (other than to the Company or a Person who is
already a signatory to the Securityholders Agreement), the transferee shall
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execute a counterpart of the Securityholders Agreement and deliver it to the
Company and New LLC.
Section 13.2. PERMITTED TRANSFERS. The rights and obligations under
Section 13.1 of this Agreement will not apply to a Transfer:
(a) to a Member's ancestors or descendants or spouse or to a trust,
partnership, custodianship or other fiduciary account for his or for their
benefit;
(b) if the Member is a partnership or limited liability company, to the
respective partners in such partnership or Affiliates of such partners or
members of such limited liability company;
(c) to an Affiliate of the Member, PROVIDED, that such Affiliate is not
being used as a device to avoid the restrictions on Transfer provided in this
Agreement;
(d) by ▇▇▇▇▇▇ De Leeuw to an MDC Permitted Transferee, or by an MDC
Permitted Transferee to another MDC Permitted Transferee, PROVIDED, that such
MDC Permitted Transferee is not being used as a device to avoid the restrictions
on Transfer provided in this Agreement; or
(e) a Transfer pursuant to Article XIV of this Agreement.
Notwithstanding the foregoing, no Transfer shall be made to a Permitted
Transferee unless such Transfer is permitted under the terms of the
Securityholders Agreement.
Section 13.3 SUBSTITUTE MEMBERS. Any Transfer of Units pursuant to this
Article XIII or XIV including, but not limited to a Transfer made pursuant to
Section 14.1 hereof, shall, nevertheless, not entitle the transferee to become a
Substitute Member or to be entitled to exercise or receive any of the rights,
powers or benefits of a Member other than the right to share in such profits and
losses, to receive distribution or distributions and to receive such allocation
of income, gain, loss, deduction or credit or similar item to which the
transferor Member would otherwise be entitled, to the extent assigned, unless
the transferor Member designates, in a written instrument delivered to the other
Members, its transferee to become a Substitute Member and the non-transferring
Members holding a majority of the capital and Profits interests of the Company
in their sole and absolute discretion, consent to the admission of such
transferee as a Member; and provided further, that such transferee shall not
become a Substitute Member without having first executed an instrument
reasonably satisfactory to the other Members accepting and agreeing to the terms
and conditions of this Agreement and the Securityholders Agreement, including a
counterpart signature page to this Agreement and the Securityholders Agreement,
and without having paid to the Company a fee sufficient to cover all reasonable
expenses of the Company in connection with such transferee's admission as a
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Substitute Member. If a Member Transfers all of its interest in the Company and
the transferee of such interest is entitled to become a Substitute Member
pursuant to this Section 13.3, such transferee shall be admitted to the Company
effective immediately prior to the effective date of the Transfer, and,
immediately following such admission, the transferor Member shall automatically
resign as a Member of the Company. In such event, the Company shall not
dissolve if the business of the Company is continued without dissolution in
accordance with Section 15.2(e) hereof.
Section 13.4 RECOGNITION OF ASSIGNMENT BY COMPANY. No Transfer or
assignment, or any part thereof, that is in violation of this Article XIII shall
be valid or effective, and neither the Company nor the Members shall recognize
the same for the purpose of making distributions pursuant to Article VIII hereof
with respect to such assigned interest or part thereof. Neither the Company nor
the nonassigning Members shall incur any liability as a result of refusing to
make any such distributions to the assignee of any such invalid assignment.
Section 13.5 EFFECTIVE DATE OF TRANSFER. Any valid Transfer of a Member's
interest in the Company, or part thereof, pursuant to the provisions of this
Article XIII shall be effective as of the close of business on the last day of
the calendar month in which such Transfer occurs. The Company shall, from the
effective date of such assignment, thereafter pay all further distributions on
account of the Company interest (or part thereof) so assigned, to the transferee
of such interest, or part thereof. As between any Member and its transferee,
Profits and Losses for the Fiscal Year of the Company in which such Transfer
occurs shall be apportioned for federal income tax purposes in accordance with
any convention permitted under Section 706(d) of the Code and selected by the
Member Manager.
Section 13.6 INDEMNIFICATION. In the case of Transfer or assignment or
attempted Transfer or assignment of an interest in the Company that has not
received the consents required by this Article XIII, the parties engaging or
attempting to engage in such Transfer or assignment shall be liable to indemnify
and hold harmless the Company and the other Members from all costs, liabilities
and damages that any of such indemnified Persons may incur (including, without
limitation, incremental tax liability and lawyers' fees and expenses) as a
result of such Transfer or assignment or attempted Transfer or assignment and
efforts to enforce the indemnity granted hereby.
ARTICLE XIV
TAG-ALONG OPTION AND COME-ALONG OBLIGATION
Section 14.1. TAG-ALONG OPTION. To the extent certain Transfers of Units
are subject to the tag-along provisions in the Securityholders Agreement, this
Section 14.1 shall have
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no force and effect. To the extent certain Transfers of Units are not subject
to the tag-along provisions in the Securityholders Agreement, and subject to
Section 13.1(c) hereof, in the event that ▇▇▇▇▇▇ De Leeuw intends to
voluntarily Transfer to another Person (other than to a Permitted Transferee or
pursuant to a Public Offering) (such Person being the "PURCHASER") any of its
Class A Units, then ▇▇▇▇▇▇ De Leeuw shall deliver to the Company and each other
Member a written notice (the "TAG NOTICE") stating that it intends to make such
a Transfer and setting forth the terms and conditions of such proposed Transfer.
During the 30-day period (the "TAG-ALONG PERIOD") from and after the delivery of
such notice to the Company and such other Members, each Member shall have the
right to elect to sell to the Purchaser, and the Purchaser shall have the
obligation to purchase from such Member, (i) such Member's Proportionate
Percentage of the Class A Units being proposed to be sold pursuant to the notice
on the terms and conditions set forth in the Tag Notice; and (ii) any Class B
Units such Member elects to sell to the Purchaser up to such Member's
Proportionate Percentage of the Class B Units at the fair market value of such
Class B Units as interpolated based upon the price of the Class A Units set
forth in the Tag Notice. In addition, if the proposed Transfer will result in a
Change of Control (as defined in SCHEDULE B to this Agreement), each Member
shall have the right to elect to sell to the Purchaser, and the Purchaser shall
have the obligation to purchase from such Member, any Class C Units and Class D
Units such Member elects to sell to the Purchaser up to such Member's
Proportionate Percentage of the Class C Units or Class D Units, as the case may
be, at the fair market value of such Class C or D Units, as the case may be, as
interpolated based on the price of the Class A Units set forth in the Tag
Notice, provided that the aggregate price for all such Class C and Class D Units
which Members shall have a right to sell pursuant to this Section 14.1 shall not
exceed that percentage of the value that the Purchaser would have paid for all
Class A and B Units which would have been sold pursuant to this Section 14.1 but
for the provisions of this sentence as (X) the fair market value of all Class C
and D Units bears to (Y) the fair market value of all Units of all classes, in
each case as interpolated based on the value of the Class A Units as set forth
in the Tag Notice. In the event that the value of the Class C and D Units that
Members wish to sell exceeds the value that is permitted to be sold pursuant to
the preceding sentence, then any such limitation shall be shared by the Members
wishing to sell such Class C and D Units based upon the relative values of the
respective Class C and D Units they wish to sell.
Section 14.2. COME-ALONG OBLIGATION. So long as the Securityholders
Agreement is in effect, certain Transfers of Units shall be subject to the
drag-along provisions thereof and this Section 14.2 shall have no force and
effect. In the event the Securityholders Agreement is no longer in effect, and
if any Person or group of Persons makes an offer to purchase all outstanding
Units of the Company from all Members (a "TENDER OFFER"), then the Members
(other than any Members who are Affiliates of the Person making the Tender
Offer) who hold 50% or more of the total number of Voting Units held by Members
who are not Affiliates of the Persons making the Tender Offer (the "APPROVING
MEMBERS") may require all other Members ("MINORITY MEMBERS") to sell their Units
pursuant to the Tender Offer. To exercise this right, the Approving Members
must deliver a written notice to the Minority
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Members describing the terms and conditions of the Tender Offer. If such an
exercise has been made by the Approving Members, then each Minority Member shall
be obligated to sell all of its Units pursuant to the Tender Offer. Any amounts
to be received by Members or Assignees in connection with a Transfer of Units
under this Section 14.2 shall be allocated in accordance with Section 15.5
hereof.
ARTICLE XV
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 15.1 NO DISSOLUTION. The Company shall not be dissolved by the
admission of Additional Members or Substitute Members in accordance with the
terms of this Agreement.
Section 15.2 EVENTS CAUSING DISSOLUTION. The Company shall be dissolved
and its affairs shall be wound up upon the occurrence of any of the following
events:
(a) the expiration of the term of the Company, as provided in Section 2.3
hereof;
(b) the written consent of Members holding at least 96% of the outstanding
Voting Units and at least 51% of the Class C Units;
(c) the sale of all or substantially all of the assets of the Company
(other than pursuant to the Contribution) and the expiration of any indemnity
period or escrow or the payment of any deferred payment relating to such sale;
(d) immediately prior to the effectiveness of a Public Offering;
(e) the death, insanity, bankruptcy, retirement, resignation, expulsion or
dissolution of any Member or the occurrence of any other event under the
Delaware Act that terminates the continued membership of a Member in the Company
(other than a resignation described in Sections 5.4 or 13.3 hereof, which
resignation shall not cause the Company to be dissolved and the business of the
Company shall continue without dissolution) unless, within 90 days after the
occurrence of such an event, the remaining Members holding a majority of capital
and Profits interests of the Company agree in writing to continue the business
of the Company and to the appointment, if necessary or desired, effective as of
the date of such event, of one or more Additional Members; or
(f) the entry of a decree of judicial dissolution under Section 18-802 of
the Delaware Act.
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Except as provided in Section 15.2(e), the death, insanity, bankruptcy,
retirement, resignation, expulsion or dissolution of a Member shall not cause
the Company to be dissolved and upon the occurrence of such an event the Company
shall be continued without dissolution.
Section 15.3 NOTICE OF DISSOLUTION. Upon the dissolution of the Company,
the Person or Persons approved by a Majority Vote to carry out the winding up of
the Company (the "LIQUIDATING TRUSTEE") shall promptly notify the Members of
such dissolution.
Section 15.4 LIQUIDATION. Upon dissolution of the Company, the
Liquidating Trustee shall immediately commence to wind up the Company's affairs;
PROVIDED, HOWEVER, that a reasonable time shall be allowed for the orderly
liquidation of the assets of the Company and the satisfaction of liabilities to
creditors so as to enable the Members to minimize the normal losses attendant
upon a liquidation. The Members shall continue to share Profits and Losses
during liquidation in the same proportions, as specified in Article VIII hereof,
as before liquidation. Each Member shall be furnished with a statement prepared
by the Company's certified public accountants that shall set forth the assets
and liabilities of the Company as of the date of dissolution.
(a) The proceeds of any liquidation (or of any transaction that is deemed
to be a liquidation under Section 15.5 hereof) shall be distributed, as
realized, in the following order and priority:
(i) first, to creditors of the Company, including Members who are
creditors, to the extent otherwise permitted by law, in satisfaction of the
liabilities of the Company (whether by payment or the making of reasonable
provision for payment thereof), other than liabilities for distributions to
Members; and
(ii) second, to the Members pursuant to Section 8.3 hereof after
giving effect to all contributions, distributions and allocations for all
periods.
(b) If the Liquidating Trustee shall determine that it is not feasible to
liquidate all of the assets of the Company, then the Liquidating Trustee shall
cause the Fair Asset Value of the assets not so liquidated to be determined.
Any unrealized appreciation or depreciation with respect to such assets shall be
allocated among the Members in accordance with Article VIII as though the
property were sold for its Fair Asset Value and distribution of any such assets
in kind to a Member shall be considered a distribution of an amount equal to the
assets' Fair Asset Value. Such assets, as so appraised, shall be retained or
distributed by the Liquidating Trustee as follows:
(i) The Liquidating Trustee shall retain assets having a Fair Asset
Value equal to the amount by which the net proceeds of liquidated assets
are sufficient to satisfy the requirements of paragraph (a)(i) of this
Section 15.4. The
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foregoing notwithstanding, the Liquidating Trustee shall, to the fullest
extent permitted by law, have the right to distribute property subject to
liens at the value of the Company's equity therein.
(ii) The remaining assets (including mortgages and other receivables)
shall be distributed to the Members in such proportions as shall be equal
to the respective amounts to which each Member is entitled pursuant to
Section 15.4(a) hereof giving full effect in the calculation thereof to any
previous distributions made pursuant to this Section 15.4. If, in the sole
and absolute judgment of the Liquidating Trustee, it shall not be feasible
to distribute to each Member an aliquot share of each asset, the
Liquidating Trustee may allocate and distribute specific assets to one or
more Members as tenants-in-common as the Liquidating Trustee shall
determine to be fair and equitable.
(c) No Member shall have the right to demand or receive property other
than cash upon dissolution and termination of the Company.
Section 15.5 SALE TRANSACTIONS. Any sale of all or substantially all of
the Voting Units in a transaction or series of related transactions, including
without limitation pursuant to a Tender Offer, shall be deemed to be a
liquidation of the Company, and any amounts to be received by Members of
Assignees upon the consummation of any such transaction shall be distributed, as
realized, in accordance with Section 15.4(a) hereof.
Section 15.6 TERMINATION. The Company and this Agreement shall terminate
when all of the assets of the Company, after payment of or due provision for all
debts, liabilities and obligations of the Company, shall have been distributed
to the Members in the manner provided for in this Article XV (including without
limitation after the sale of Units pursuant to a Tender Offer in accordance with
Section 14.2 hereof), and the Certificate shall have been canceled in the manner
required by the Delaware Act.
Section 15.7 CLAIMS OF THE MEMBERS. The Members and Assignees shall look
solely to the Company's assets for the return of their Capital Contributions,
and if the assets of the Company remaining after payment of or due provision for
all debts, liabilities and obligations of the Company are insufficient to return
such Capital Contributions, the Members and Assignees shall have no recourse
against any other Member or the Member Managers or Officers.
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ARTICLE XVI
[Intentionally Omitted]
ARTICLE XVII
REGISTRATION RIGHTS
Section 17.1 REGISTRATION RIGHTS. In the event any New LLC Entity (or
any successor entity into which any New LLC Entity merges or consolidates)
intends to effect a Public Offering, the Class A Holders, the Class B Holders,
the Class C Holders and the Class D Holders shall have such registration rights
with respect to the securities of the Public Company distributed to such Holders
as set forth in the Securityholders Agreement. In the event the Company or any
Other Subsidiary intends to effect a Public Offering of its equity securities
for its own account or for the account of its stockholders in either case
pursuant to a registration statement filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, the Class A Holders, the Class B Holders,
the Class C Holders and the Class D Holders shall have such registration rights
set forth on SCHEDULE E hereto.
ARTICLE XVIII
MISCELLANEOUS
Section 18.1 NOTICES. All notices provided for in this Agreement shall be
in writing, duly signed by the party giving such notice, and shall be delivered
in person or by an acknowledged overnight delivery service, telecopied or mailed
by registered or certified mail, as follows:
(a) if given to the Company, in care of the President at the Company's
mailing address set forth in Section 2.5 hereof with a copy to the Chairman and
the Chief Executive Officer at such address as each such officer shall designate
to the Company;
(b) if given to the Member Managers, at their mailing addresses set forth
on SCHEDULE A attached hereto; or
(c) if given to any Member at the address set forth opposite its name on
SCHEDULE A attached hereto, or at such other address as such Member may
hereafter designate by written notice to the Company.
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All such notices shall be deemed to have been given when received.
Section 18.2 FAILURE TO PURSUE REMEDIES. The failure of any party to seek
redress for violation of, or to insist upon the strict performance of, any
provision of this Agreement shall not prevent a subsequent act, which would have
originally constituted a violation, from having the effect of an original
violation.
Section 18.3 CUMULATIVE REMEDIES. 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 its 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.
Section 18.4 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of all of the parties and, to the extent permitted by this
Agreement, their successors, legal representatives and assigns.
Section 18.5 INTERPRETATION. Throughout this Agreement, nouns, pronouns
and verbs shall be construed as masculine, feminine, neuter, singular or plural,
whichever shall be applicable. All references herein to "Articles," "Sections"
and paragraphs shall refer to corresponding provisions of this Agreement unless
otherwise indicated.
Section 18.6 SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provision were omitted.
Section 18.7 COUNTERPARTS. This Agreement may be executed in any number
of counterparts with the same effect as if all parties hereto had signed the
same document. All counterparts shall be construed together and shall
constitute one instrument.
Section 18.8 INTEGRATION. This Agreement, together with SCHEDULES A, B,
C, D and E hereto and the Securityholders Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.
Section 18.9 GOVERNING LAW. This Agreement, together with SCHEDULES A, B,
C, D and E and the rights of the parties hereunder shall be interpreted in
accordance with the laws of the State of Delaware, and all rights and remedies
shall be governed by such laws without regard to principles of conflict of laws.
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Section 18.10 INCONSISTENCY. In the event of an inconsistency between the
provisions contained in this Agreement, on the one hand, and in the
Securityholders Agreement, on the other hand, the provisions contained in the
Securityholders Agreement will govern.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above stated.
MEMBERS:
DARTFORD PARTNERSHIP L.L.C.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Member
BAIN SECURITIES, INC.
By:
-------------------------------
Name:
Title:
SQUAM LAKE INVESTORS II, L.P.
By:
-------------------------------
Name:
Title:
FENWAY PARTNERS CAPITAL FUND, L.P.
By: Fenway Partners, L.P.,
its general partner
By: Fenway Partners Management, Inc.,
its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Person
-▇▇-
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ & ▇▇. ▇▇▇, L.P.
By: MDC Management Company III, L.P., its
general partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: General Partner
▇▇▇▇▇▇ DE LEEUW & CO. III (EUROPE), L.P.
By: MDC Management Company III, L.P., its
general partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: General Partner
▇▇▇▇▇▇ DE LEEUW & CO. III (Asia), L.P.
By: MDC Management Company IIIA, L.P., its
general partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: General Partner
GAMMA FUND LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: General Partner
-52-
▇▇▇▇▇▇ DE LEEUW & CO. IV, L.P.
By: MDC Management Company IV, L.P., its
general partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: General Partner
DELTA FUND LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Person
CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM
By: /s/ ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
Title: Principal Investment Officer
-53-
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
C. ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇ ▇▇▇▇▇
----------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
-54-
SCHEDULE A
MBW INVESTORS LLC
CAPITAL NUMBER
NAME AND MAILING ADDRESS CONTRIBUTIONS OF UNITS
A. CLASS A UNITS
▇▇▇▇▇▇ De Leeuw & Co. III, L.P. $36,060,025 34,655.765
c/▇ ▇▇▇▇▇▇ De Leeuw & Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ De Leeuw & Co. $2,560,000 2,460.308
(Europe) III, L.P.
c/▇ ▇▇▇▇▇▇ De Leeuw & Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ De Leeuw & Co. III $599,950 576.585
(Asia), L.P.
c/▇ ▇▇▇▇▇▇ De Leeuw & Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Gamma Fund LLC $780,025 749.65
c/▇ ▇▇▇▇▇▇ De Leeuw & Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ De Leeuw & Co. IV, L.P. $43,000,000 33,076.923
c/▇ ▇▇▇▇▇▇ De Leeuw & Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Delta Fund LLC $1,250,000 961.538
c/▇ ▇▇▇▇▇▇ De Leeuw & Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
CAPITAL NUMBER
NAME AND MAILING ADDRESS CONTRIBUTIONS OF UNITS
California Public Employees $25,000,000 21,538.461
Retirement System
Fenway Partners Capital Fund, L.P. $41,250,000 35,480.909(1)
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dartford Partnership L.L.C. $635,385 635.385
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The Ian and ▇▇▇▇▇ ▇▇▇▇▇▇ 1998 $80,000 80.0
Irrevocable Trust
Ray and ▇▇▇▇▇▇ ▇▇▇▇▇ Children's $100,000 100.0
Trust f/b/o ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Ray and ▇▇▇▇▇▇ ▇▇▇▇▇ Children's $100,000 100.0
Trust f/b/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee f/b/o $11,538.50 11.5385
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee f/b/o $11,538.50 11.5385
▇▇▇ ▇. ▇▇▇▇▇▇
▇. ▇▇▇▇ ▇▇▇▇▇▇, Trustee f/b/o $15,384.50 15.3845
▇▇▇▇▇ ▇▇▇▇▇▇
▇. ▇▇▇▇ ▇▇▇▇▇▇, Trustee f/b/o $15,384.50 15.3845
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee f/b/o $15,384.50 15.3845
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $15,384.50 15.3845
Bain Securities, Inc. $1,200,000 1,029.231
Two ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------
(1) FPIP, LLC is the Assignee of 602.6459958 of the Class A Units with a
Capital Contribution therefor of $763,258.98. FPIP Trust, LLC is the
Assignee of 463.5222192 of these Class A Units with a Capital
Contribution therefor of $591,372.20.
-2-
CAPITAL NUMBER
NAME AND MAILING ADDRESS CONTRIBUTIONS OF UNITS
Squam Lake Investors II, L.P. $1,200,000 1,029.231
Two ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $382,000 340.0
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
C. ▇▇▇▇ ▇▇▇▇▇▇▇ $150,700 139.0
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ $389,200 334.0
▇▇▇▇▇▇ ▇▇▇▇▇▇ $397,000 340.0
▇▇▇▇ ▇▇▇▇▇ $200,100 177.0
▇▇▇▇▇ ▇▇▇▇▇▇ $220,000 190.0
▇▇ ▇▇▇▇▇ $120,200 104.0
▇▇▇ ▇▇▇▇▇▇▇▇ $30,000 30.0
▇▇▇▇ ▇▇▇▇▇▇▇ $44,500 40.0
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $26,500 25.0
▇▇▇▇▇ ▇▇▇▇ $39,500 35.0
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ $115,000 100.0
▇▇▇▇▇ ▇'▇▇▇▇▇▇▇-▇▇▇▇ $6,500 5.0
▇▇▇▇ ▇▇▇▇▇▇▇ $31,200 24.0
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $13,000 10.0
▇▇▇ ▇▇▇▇▇▇▇▇▇ $39,000 30.0
▇▇▇▇▇▇ ▇▇▇▇▇▇ $39,000 30.0
▇▇▇▇▇ ▇▇▇▇▇▇ $10,400 8.0
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $6,500 5.0
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $20,800 16.0
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ $59,800 46.0
-3-
CAPITAL NUMBER
NAME AND MAILING ADDRESS CONTRIBUTIONS OF UNITS
▇▇▇▇ ▇▇▇▇▇▇ $6,500 5.0
▇▇▇▇▇ ▇▇▇▇ $6,500 5.0
▇▇▇▇▇ ▇▇▇▇▇ $13,000 10.0
▇▇▇▇ ▇▇▇▇ $19,500 15.0
▇▇▇ ▇▇▇▇▇▇ $80,600 62.0
▇▇▇▇▇ ▇▇▇▇▇▇▇ $19,500 15.0
▇▇▇ ▇▇▇▇▇▇ $6,500 5.0
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $52,000 40.0
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ $52,000 40.0
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $6,500 5.0
▇▇▇ ▇▇▇▇▇ $13,000 10.0
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $6,500 5.0
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $6,500 5.0
▇▇▇▇▇▇▇ ▇▇▇▇▇ $24,700 19.0
▇▇▇▇ ▇▇▇▇▇▇▇ $6,500 5.0
B. CLASS B UNITS
Dartford Partnership L.L.C. $1,000 7,173.077
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
C. CLASS C UNITS
Dartford Partnership L.L.C. $1,000 1,300.0
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
D. CLASS D UNITS (ON FILE AT MBW
INVESTORS LLC)
-4-
SCHEDULE B
TO THE AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF MBW INVESTORS LLC
CLASS C UNITS
(a) DEFINED TERMS. For purposes of this SCHEDULE B (which includes
SCHEDULE B-1), capitalized terms used herein but not otherwise defined in the
Agreement shall have the meanings set forth in (i) paragraph (f) of this
SCHEDULE B or (ii) if not defined in such paragraph (f), in the Second Amended
and Restated Limited Liability Company Agreement of MBW Investors LLC.
(b) [DELETED]
(c) [DELETED]
(d) [DELETED]
(e) PUBLIC OFFERING. In the event the Public Company intends to
consummate a Public Offering:
(i) [DELETED]
(ii) the Class C Units shall be valued as if all of the equity
securities of the Public Company (including those to be sold pursuant to
the Public Offering) were sold at the price per share at which the equity
securities of the Public Company are to be sold pursuant to the Public
Offering (which price shall be before underwriter's discounts and before
expenses) and the aggregate gross proceeds from such hypothetical sale were
distributed pursuant to this Agreement in accordance with Article VIII
thereof;
(iii) immediately prior to the effectiveness of the Public
Offering, the Company shall distribute or cause the distribution to the
Class C Holder(s) the aggregate number of shares of capital stock of the
Public Company equal in value to the value of the Class C Units as
determined in accordance with clause (ii) above; and
(iv) if the Public Company is a New LLC Entity, each Class C Holder
shall be entitled to the registration rights set forth in the
Securityholders Agreement with respect to such Class C Holder. If the
Public Company is not
a New LLC Entity, each Class C Holder shall have the registration rights
set forth in SCHEDULE E to this Agreement.
(f) DEFINITIONS. [DELETED]
-2-
SCHEDULE C
TO THE AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF MBW INVESTORS LLC
CLASS D UNITS
(a) DEFINED TERMS. For purposes of this SCHEDULE C capitalized terms used
herein but not otherwise defined in the Agreement shall have the meanings set
forth in (i) paragraph (f) of this SCHEDULE C or (ii) if not defined in such
paragraph (f), in the Amended and Restated Limited Liability Company Agreement
of MBW Investors LLC.
(b) VESTING. Subject to the remaining provisions of this Schedule C, a
Class D Holder shall become vested in Class D Units as follows:
(i) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and C. ▇▇▇▇ ▇▇▇▇▇▇▇ shall each be vested in 50%
of the Class D Units issued to him on the date of this Agreement. On each
of December 31, 1997 and December 31, 1998, respectively, unless earlier
terminated by the Operating Company in accordance with the terms of his
Employment Agreement with the Operating Company, Messrs. ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ shall each be vested in an additional 25% of the Class D Units
issued to him on the date of this Agreement.
(ii) For any Class D Units issued to a Class D Holder (other than
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and C. ▇▇▇▇ ▇▇▇▇▇▇▇) on the date of this Agreement or on
or before March 31, 1997, such Class D Holder shall become vested in the
following portion of such Class D Units on the following dates:
DATE OF VESTING PERCENTAGE THAT VESTS
--------------- ---------------------
December 31, 1997 25%
December 31, 1998 25%
December 31, 1999 25%
December 31, 2000 25%
(iii) For any Class D Units issued to a Class D Holder after March 31,
1997, such Class Holder shall become vested in such Class D Units on the
following dates:
DATE OF VESTING PERCENTAGE THAT VESTS
--------------- ---------------------
first anniversary of date of issuance 25%
second anniversary of date of issuance 25%
third anniversary of date of issuance 25%
fourth anniversary of date of issuance 25%
(iv) On the effective date of a Change of Control (as defined below),
all outstanding Class D Units that have not vested prior to the effective
date of such Change of Control shall become Vested Class D Units as of the
effectiveness of such Change of Control.
Notwithstanding the foregoing, a Class D Holder and his Permitted Transferees
shall not become vested in Class D Units on the future dates specified above in
clauses (i), (ii) and (iii) unless such Class D Holder has remained in the
continuous employ of the Company (or any Subsidiary) from the date of issuance
of such Class D Units up to and including the date such portion of such Class D
Units may become vested in accordance with this Schedule C.
(c) FORFEITURE; REPURCHASE. Class D Units held by a Class D Holder or his
Permitted Transferees shall be subject to forfeiture to the Company or
repurchase by the Company as provided below:
(i) In the event a Class D Holder's employment by the Company and/or a
Subsidiary of the Company terminates because of discharge or termination by
the Company or its Subsidiary with Cause (as defined below), then (A) all
unvested Class D Units held by such Class D Holder or his Permitted
Transferees at the time of such termination shall be automatically
forfeited to the Company without the payment of any consideration to the
Class D Holder or his Permitted Transferees by the Company, and (B) all
Vested Class D Units held by such Class D Holder or his Permitted
Transferees at the time of such termination shall be subject to repurchase
by the Company at a repurchase price equal to the lesser of (X) $1.00 per
Vested Class D Unit being repurchased and (Y) the fair market value thereof
as determined by the Board in good faith.
(ii) In the event a Class D Holder's employment by the Company and/or
a Subsidiary of the Company terminates because of death or Permanent
Disability (as defined below) of the Class D Holder, then (A) all unvested
Class D Units held by such Class D Holder or his Permitted Transferees at
the time of such termination shall be automatically forfeited to the
Company without the payment of any consideration to the Class D Holder or
his Permitted Transferees (or his estate) by the Company and (B) such Class
D Holder or his Permitted Transferees
-2-
(or his estate) shall continue to hold all Vested Class D Units held at the
time of such termination.
(iii) In the event a Class D Holder's employment by the Company and/or
a Subsidiary of the Company terminates (1) because of discharge or
termination by the Company or its Subsidiary without Cause or (2) with
respect to any Class D Holder which is a party to a written employment
agreement with the Company or a Subsidiary of the Company which provides
such Holder with an express right to terminate such agreement for material
breach by the Company or such Subsidiary, because of termination by the
Class D Holder of such employment for such material breach, then (A) all
unvested Class D Units held by such Class D Holder or his Permitted
Transferees at the time of such termination shall be automatically
forfeited to the Company without the payment of any consideration to the
Class D Holder or his Permitted Transferees by the Company; (B) up to 50%
of the Vested Class D Units held by such Class D Holder or his Permitted
Transferees at the time of such termination shall be subject to repurchase
by the Company at a purchase price equal to the fair market value thereof
(without discount for lack of marketability and minority interest) at the
date of repurchase as determined by the Board in good faith; and (C) the
remaining 50% of the Vested Class D Units held by such Class D Holder or
his Permitted Transferees shall continue to be held and not be subject to
repurchase by the Company.
(iv) In the event a Class D Holder's employment by the Company and/or
a Subsidiary of the Company terminates because of resignation by the Class
D Holder from the Company or its Subsidiary (other than in connection with
a termination by such Class D Holder referenced in subclause (2) of clause
(iii) above), then (A) all unvested Class D Units held by such Class D
Holder or his Permitted Transferees at the time of such termination shall
be automatically forfeited to the Company without the payment of any
consideration to the Class D Holder or his Permitted Transferees by the
Company, and (B) up to 100% of the Vested Class D Units held by such Class
D Holder or his Permitted Transferees at the time of such termination shall
be subject to repurchase by the Company at a repurchase price equal to the
fair market value thereof (without discount for lack of marketability and
minority interest) at the date of repurchase as determined by the Board in
good faith.
(d) PROCEDURES. To exercise any right to repurchase Class D Units
pursuant to this Schedule C, the Company shall deliver a written notice (an
"Election Notice") to the Class D Holder whose Class D Units are being
repurchased within 45 days following the event giving rise to such right. The
Election Notice shall state (i) the number of Class D Units being repurchased
and (ii) the repurchase price therefor. Such repurchase shall be consummated
within 60 days following delivery by the Company of such Election Notice. At
the closing of
-3-
any such purchase, (A) such Class D Holder shall deliver any documentation
reasonably requested by the Company and necessary to Transfer such Class D Units
to the Company and (B) the Company shall deliver in cash or otherwise in
immediately available funds to such Class D Holder the purchase price being paid
by the Company for such Class D Units.
(e) PUBLIC OFFERING. In the event the Public Company intends to
consummate a Public Offering:
(i) subject to clause (vi) below, immediately prior to the effective
date of the Public Offering, all outstanding Class D Units that have not
vested prior to such effective date shall become Vested Class D Units;
(ii) subject to clause (vi) below, the Company's right to repurchase
Vested Class D Units in accordance with this Schedule C shall terminate and
be of no further force and effect, as of the effective date of such Public
Offering;
(iii) the Vested Class D Units shall be valued as if all of the
equity securities of the Public Company (including those to be sold
pursuant to the Public Offering) were sold at the price per share at which
the equity securities of the Public Company are to be sold pursuant to the
Public Offering (which price shall be before underwriter's discounts and
before expenses) and the aggregate gross proceeds from such hypothetical
sale were distributed pursuant to this Agreement in accordance with
Article VIII thereof;
(iv) subject to clause (vi) below, immediately prior to or
simultaneously with the closing of the Public Offering, the Company shall
distribute or cause the distribution to the Class D Holder(s) the aggregate
number of shares of capital stock of the Public Company equal in value to
the value of the Vested Class D Units as determined in accordance with
clause (iii) above;
(v) if the Public Company is a New LLC Entity, each Class D Holder
that executes and delivers a counterpart signature page agreeing to be
bound by the Securityholders Agreement shall have piggyback registration
rights (other than with respect to "Unvested Shares" as defined below) to
the extent set forth in the Securityholders Agreement. Any Class D Holder
that does not execute and deliver such a counterpart signature page shall
not be entitled to any piggyback registration rights under the
Securityholders Agreement. If the Public Company is not a New LLC Entity,
each Class D Holder shall have the registration rights (other than with
respect to Unvested Shares) as are set forth on SCHEDULE E to this
Agreement; and
-4-
(vi) with respect to shares of capital stock of the Public Company
distributed to Class D Holders on account of Class D Units issued after
December 31, 1997 to Class D Holders who were not issued other Class D
Units on or before December 31, 1997 but that had not vested prior to the
effective date of the Public Offering ("RESTRICTED CLASS D UNITS"), the
following provisions shall apply:
(A) Shares of capital stock of the Public Company distributed to
Class D Holders on account of Restricted Class D Units
shall, as of the effective date of the Public Offering, be
"Unvested Shares" for purposes of this clause (vi).
(B) Unvested Shares shall vest and become "Vested Shares" for
purposes of this clause (vi) on the same dates and in the
same percentages that the underlying Restricted Class D
Units would have become Vested Class D Units pursuant to
clause (iii) of paragraph (b) above if no Public Offering
had occurred; PROVIDED, that the Board at its option shall
have the right to accelerate the vesting of such Unvested
Shares. For example, assume a Class D Holder that was not
previously issued Class D Units was issued 8 Class D Units
on January 1, 1998, and the effective date of the Public
Offering was January 2, 1999. All of such Class D Holder's
8 Class D Units would be Vested Class D Units immediately
prior to the effective date of the Public Offering, but 6 of
those 8 Units would be Restricted Class D Units. If 100
shares of capital stock were issued to the Class D Holder on
account of the 8 Class D ▇▇▇▇▇, ▇▇ of such shares would be
Unvested Shares distributed on account of the 6 Restricted
Class D Units. 25 of those 75 Unvested Shares will become
Vested Shares on each of January 1, 2000, January 1, 2001,
and January 1, 2002, respectively.
(C) Unvested Shares shall be subject to forfeiture or repurchase
on the same terms as set forth in paragraph (c) above.
Unvested Shares shall be treated as unvested Class D Units
are treated under such paragraph (c). The Public Company
shall be treated as the Company is treated under such
paragraph (c). Vested Shares shall no longer be subject to
forfeiture to the Public Company or repurchase by the Public
Company.
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With respect to any grant of Class D Units after December 31, 1997 to a Class D
Holder who was issued other Class D Units on or before such date, (A) a
percentage of the Class D Units granted after December 31, 1997 shall be Vested
Class D Units as of the date of grant thereof, with such percentage to be equal
to the percentage of Class D Units issued to such Class D Holder prior to
December 31, 1997 that are Vested Class D Units as of the date of grant of Class
D Units after December 31, 1997; and (B) the remaining Class D Units granted
after December 31, 1997 shall become Vested Class D Units at the same time and
in the same proportions as the Class D Units issued to such Class D Holder prior
to December 31, 1997 but that are not Vested Class D Units as of the date of
grant of Class D Units after December 31, 1997.
(f) DEFINITIONS.
"CAUSE" means (i) embezzlement, theft or other misappropriation of any
property of the Company or any Affiliate, (ii) gross or willful misconduct
resulting in substantial loss to the Company or any Affiliate or substantial
damage to the reputation of the Company or any Affiliate, (iii) any act
involving moral turpitude which results in a conviction for a felony involving
moral turpitude, fraud or misrepresentation, (iv) gross neglect of his assigned
duties to the Company or any Affiliate, (v) gross breach of his fiduciary
obligations to the Company or any Affiliate, or (vi) any chemical dependence
which materially affects the performance of his duties and responsibilities to
the Company or any Affiliate; PROVIDED that in the case of the misconduct set
forth in clauses (iv) and (vi) above, such misconduct shall continue for a
period of 30 days following written notice thereof by the Company to the Holder.
"CHANGE OF CONTROL" means a transaction or series of related transactions
(other than by the Company or any Subsidiary thereof with any other Subsidiary
of the Company) to effect any of the following:
(i) a sale, redemption, exchange or other disposition of shares
(including by way of merger or consolidation) of the Common Stock of the
Aurora Foods (or any successor thereto), par value $.01 per share, or
options or warrants to acquire such Common Stock, after which Aurora
Holdings holds directly of indirectly 50% or less of the then outstanding
shares of such Common Stock;
(ii) a sale, redemption, exchange or other disposition of shares
(including by way of merger or consolidation) of the Common Stock of Aurora
Holdings (or any successor thereto), par value $.01 per share, or options
or warrants to acquire such Common Stock, after which the Company holds
directly or indirectly 50% or less of the then outstanding shares of such
Common Stock;
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(iii) a sale, redemption, exchange or other disposition of Class A
Units (including by way of merger or consolidation), or options or warrants
to acquire Class A Units, after which the Class A Holders holding Class A
Units on the date of this Agreement hold 50% or less of the number of
outstanding Class A Units on the date of this Agreement;
(iv) a sale of all or substantially all of the assets of the Company,
Aurora Holdings or Aurora Foods; or
(v) a liquidation, dissolution, or other winding up of the affairs of
the Company, whether voluntary or involuntary.
Notwithstanding the foregoing, the transactions contemplated under the
Contribution Documents shall not constitute a Change of Control for purposes of
this Schedule C.
"PERMANENT DISABILITY" means, as a result of physical or mental illness or
incapacity, the Holder has been unable to perform his duties to the Company
and/or a Subsidiary of the Company for a period of four consecutive months or
for an aggregate of more than six months in any 12-month period.
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SCHEDULE E
TO THE AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF MBW INVESTORS LLC
REGISTRATION RIGHTS
1. REGISTRATION RIGHTS. The Company will perform and comply, and cause
each of its Subsidiaries to perform and comply, with such of the following
provisions as are applicable to it. Each holder of Units will perform and
comply with such of the following provisions as are applicable to such holder.
Unless this Schedule E otherwise requires, the term the "COMPANY" shall include
Subsidiaries of the Company, as applicable. Capitalized terms used herein but
not otherwise defined herein shall have the meanings given such terms in the
Amended and Restated Limited Liability Company Agreement of MBW Investors LLC,
dated as of December 31, 1996 (the "LLC Agreement").
1.1. DEMAND AND PIGGYBACK REGISTRATION RIGHTS.
1.1.1. REGISTRATION ON REQUEST. Any one or more of the
following (such Persons being the "INITIATING INVESTOR HOLDERS").
(i) one or more holders of Voting Units representing at
least fifty percent (50%) of the total amount of Voting Units
then outstanding, or
(ii) after the second anniversary of the closing of an
initial Public Offering of the Company, if Fenway has not
exercised its right in clause (iii) below, Fenway, or
(iii) after December 31, 2001, if the Company has not
previously closed an initial Public Offering, Fenway,
may, by notice to the Company specifying the intended method or methods of
disposition, request that the Company effect the registration under the
Securities Act of 1933, as amended (the "Securities Act"), for a Public Offering
of all or a specified part of the Units held by such Initiating Investor Holders
(the "REGISTRABLE INVESTOR SECURITIES"). Promptly after receipt of such notice,
the Company will give notice of such requested registration to all other holders
of Units (other than, in the case of the initial Public Offering, of the
Company, the Class D Units) (such Units, collectively with the Registrable
Investor Securities, the "REGISTRABLE SECURITIES"). The Company will then use
its commercially reasonable efforts to effect the registration under the
Securities Act of the Registrable Investor Securities which the Company has been
requested to register by such Initiating Investor Holders together with all
other Registrable Securities which
the issuer has been requested to register pursuant to Section 1.1.2 by other
holders of Registrable Securities by notice delivered to the Company within
twenty (20) days after the giving of such notice by the Company (which request
shall specify the intended method of disposition of such Registrable
Securities), all to the extent requisite to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the Registrable
Securities which the Company has been so requested to register; PROVIDED,
HOWEVER, that the Company shall not be obligated to take any action to effect
any such registration pursuant to this Section 1.1.1:
(a) If the Company has previously effected four
(4) registrations of Registrable Securities under this
Section 1.1.1; PROVIDED, HOWEVER, that no registrations of
Registrable Securities which either (i) shall not have
become and remained effective in accordance with the
provisions of this Section 1, or (ii) shall not have enabled
the Initiating Investor Holders and the holders of
Registrable Securities joining therein to include in such
registration at least 90% of the Registrable Securities
which they desired to include, shall be included in the
calculation of the numbers of registrations contemplated by
this clause (a);
(b) Within 180 days immediately following the
effective date of any registration statement pertaining to
an underwritten public offering of securities of the Company
for its own account (other than a registration on Form S-4
pursuant to Rule 145 of the Securities Act (a "RULE 145
TRANSACTION"), or a registration relating solely to employee
benefit plans);
(c) (i) On Form S-3 (or any successor form), if
the Company has previously effected two or more
registrations of Registrable Securities under this
Section 1.1.1 on Form S-3 (or any such successor forms) or
(ii) on any form other than Form S-3 (or any successor
form), if the Company has previously effected two or more
registrations of Registrable Securities under this
Section 1.1.1 on any such other forms; PROVIDED, HOWEVER,
that no registrations of Registrable Securities which shall
not have become and remained effective in accordance with
the provisions of this Section 1, and no registrations of
Registrable Securities pursuant to which the Initiating
Investor Holders and all other holders of Registrable
Securities joining therein are not able to include at least
90% of the Registrable Securities which they desired to
include, shall be included in the calculation of numbers of
registrations contemplated by this clause (c);
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(d) If the Company shall have furnished to the
Initiating Investor Holders and such other holders of
Registrable Securities which the Company has been requested
to register pursuant to this Section 1.1.1 a certificate,
signed by the President of the Company, stating that in the
good faith judgment of the Board it would be detrimental to
the Company and its shareholders for such Registration
Statement to be filed at the date filing would have been
required, in which case the Company shall have an additional
period of not more than 270 days within which to file such
Registration Statement; PROVIDED, HOWEVER, that the Company
shall not so postpone a registration pursuant to this clause
(d) more than once in any twelve month period;
(e) If the Registration under this Section 1.1.1
covers less than ten percent (10%) of the Registrable
Securities then outstanding and the proposed aggregate
offering price to the public of the Registrable Securities
to be included in the registration by all holders is less
than $5,000,000; or
(f) After the fifth (5th) anniversary of the
closing of the initial Public Offering of the Company's
Common Stock, if the Company's Common Stock shall have been
listed for trading on a national or regional stock exchange
or on NASDAQ National Market, at all times during the
preceding twelve (12) consecutive months.
1.1.2. PIGGYBACK REGISTRATION.
(a) GENERAL. If the Company at any time proposes
to register any of its securities under the Securities Act,
for its own account or for the account of any holder of its
securities, for a Public Offering, the Company will each
such time give notice to all holders of Registrable
Securities of its intention to do so. Any such holder may,
by written response delivered to the Company within twenty
(20) days after the effectiveness of such notice, request
that all or a specified part of the Registrable Securities
held by such holder be included in such registration. Such
response shall also specify the intended method of
disposition of such Registrable Securities. The Company
thereupon will use its commercially reasonable efforts to
cause to be included in such registration under the
Securities Act all Registrable Securities which the Company
has been so requested to register by such
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holders of Registrable Securities, to the extent required to
permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities
so to be registered. No registration of Registrable
Securities effected under this Section 1.1.2 shall relieve
the Company of any of its obligations to effect
registrations of Registrable Securities pursuant to
Section 1.1.1 hereof.
(b) EXCLUDED TRANSACTIONS. The Company shall not
be obligated to effect any registration of Registrable
Securities under this Section 1.1.2 incidental to the
registration of any of its securities in connection with:
(i) Any Public Offering relating to the
acquisition or merger after the date hereof
by the Company or any of its Subsidiaries of
or with any other business.
(ii) Any Public Offering relating to employee
benefit plans or dividend reinvestment plans.
1.1.3. PAYMENT OF EXPENSES. The Company shall pay all
expenses of holders of Registrable Securities incurred in connection
with each registration of Registrable Securities requested pursuant to
this Section 1.1, other than underwriting discount and commission, if
any, and applicable transfer taxes, if any.
1.1.4. ADDITIONAL PROCEDURES.
(a) REGISTRATIONS PURSUANT TO SECTION 1.1.1. In
the case of a registration pursuant to Section 1.1.1 hereof,
whenever holders holding a majority of Units (the "INVESTOR
MAJORITY HOLDERS") shall request that such registration
shall be effected pursuant to an underwritten offering, the
Company shall include such information in the written
notices to holders of Registrable Securities referred to in
Section 1.1.1. In such event, the right of any holder of
Registrable Securities to have securities owned by such
holder included in such registration pursuant to
Section 1.1.1 shall be conditioned upon such holder's
participation in such underwriting and the inclusion of such
holders' Registrable Securities in the underwriting (unless
otherwise mutually agreed upon by the Investor Majority
Holders and such holder) to the
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extent provided herein. If requested by such underwriters,
the Company together with the holders of Registrable
Securities proposing to distribute their securities through
such underwriting will enter into an underwriting agreement
with such underwriters for such offering containing such
representations and warranties by the Company and such other
terms and provisions as are customarily contained in
underwriting agreements with respect to secondary
distributions, including, without limitation, customary
indemnity and contribution provisions.
(b) REGISTRATIONS PURSUANT TO SECTION 1.1.2.
Holders of Registrable Securities participating in any
Public Offering pursuant to Section 1.1.2 shall take all
such actions and execute all such documents and instruments
that are reasonably requested by the Company to effect the
sale of their Registrable Securities in such Public
Offering, including, without limitation, being parties to
the underwriting agreement entered into by the Company and
any other selling shareholders in connection therewith and
being liable in respect of the representations and
warranties by, and the other agreements (including customary
selling stockholder indemnifications and "lock-up"
agreements) on the part of, the Company and any other
selling shareholders to and for the benefit of the
underwriters in such underwriting agreement; PROVIDED,
HOWEVER, that (i) with respect to individual
representations, warranties and agreements of sellers of
Registrable Securities in such Public Offering, the
aggregate amount of such liability shall not exceed the
lesser of (A) such holder's pro rata portion of any such
liability, in accordance with such holder's portion of the
total number of Registrable Securities included in the
offering or (B) such holder's net proceeds from such
offering.
1.2. CERTAIN OTHER PROVISIONS.
1.2.1. UNDERWRITER'S CUTBACK. Notwithstanding any contrary
provision of this Section 1, if, in connection with any registration
of Registrable Securities, the underwriter determines that marketing
factors (including, without limitation, an adverse effect on the per
share offering price) require a limitation of the number of shares to
be underwritten, the underwriter may limit the number of Registrable
Securities to be included in the registration and underwriting or may
exclude Registrable Securities entirely from such registration and
underwriting, subject to the terms of this paragraph. The Company
shall so advise all holders of the Company's securities that would
otherwise be registered and underwritten
-5-
pursuant hereto, and the number of shares of such securities,
including Registrable Securities, that may be included in the
registration and underwriting (and thereby sold by Persons other than
the Company) shall be allocated so that the number of Registrable
Securities that may be included shall be allocated among the holders
of Registrable Securities thereof in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held
by each such holder at the time of filing the Registration Statement.
No securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such
registration. If any holder of Registrable Securities disapproves of
the terms of the underwriting, it may elect to withdraw therefrom by
written notice to the Company and the underwriter. The Registrable
Securities so withdrawn shall also be withdrawn from registration.
1.2.2. OTHER ACTIONS. If and in each case when the Company
is required to use its commercially reasonable efforts to effect a
registration of any Registrable Securities as provided in this
Section 1, the Company shall take appropriate and customary actions in
furtherance thereof, including, without limitation: (i) filing with
the Securities and Exchange Commission (the "COMMISSION") a
registration statement and using reasonable efforts to cause such
registration statement to become effective, (ii) preparing and filing
with the Commission such amendments and supplements to such
registration statements as may be required to comply with the
Securities Act and to keep such registration statement effective for a
period not to exceed 180 days from the date of effectiveness or such
earlier time as the Registrable Securities covered by such
registration statement have been disposed of in accordance with the
intended method of distribution therefor or the expiration of the time
when a prospectus relating to such registration is required to be
delivered under the Securities Act, (iii) use its commercially
reasonable efforts to register or qualify such Registrable Securities
under the state securities or "blue sky" laws of such jurisdictions as
the sellers shall reasonably request; PROVIDED, HOWEVER, that the
Company shall not be obligated to file any general consent to services
of process or to qualify as a foreign corporation in any jurisdiction
in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it would not
otherwise be so subject; and (iv) otherwise cooperate reasonably with,
and take such customary actions as may reasonably be requested by the
holders of Registrable Securities in connection with such
registration.
1.2.3. LOCK-UP. For a period of the lesser of (i) 180 days
from the effective date of any registration statement filed by the
Company, or (ii) the shortest period applicable to any Affiliate (as
defined in the Securities Act) of the Company who is a selling
shareholder pursuant to such registration statement, each holder of
Registrable Securities of the Public Company shall refrain from
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directly or indirectly selling such securities except pursuant to such
registration statement.
1.2.4. BLACK-OUT. Upon receipt of any notice from the
Company of the happening of any event of which any prospectus included
in such registration statement, as then in effect, includes an untrue
statement of material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, each holder of Registrable Securities will forthwith
discontinue such holder's disposition of Registrable Securities
pursuant to the registration statement until such holder receives
copies of a supplemental or amended prospectus from the Company and,
if so directed by the Company, shall deliver to the Company all
copies, other than permanent file copies, then in such holders'
possession of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.
1.2.5. SELECTION OF UNDERWRITERS AND COUNSEL. The
underwriters and legal counsel to be retained in connection with any
Public Offering shall be selected by the Board.
1.3. INDEMNIFICATION AND CONTRIBUTION.
1.3.1. INDEMNITIES OF THE COMPANY. In the event of any
registration of any Registrable Securities or other securities of the
Company or any of its Subsidiaries under the Securities Act pursuant
to this Section 1 or otherwise, and in connection with any
registration statement or any other disclosure document produced by or
on behalf of the Company including, without limitation, reports
required or other documents filed under the Exchange Act, and other
documents pursuant to which securities of the Company are sold
(whether or not for the account of the Company), the Company will, and
hereby does, and will cause its Subsidiaries, jointly and severally
to, indemnify and hold harmless each seller of Registrable Securities,
any other holder of securities who is or might be deemed to be a
controlling Person of the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, their respective
direct and indirect partners, advisory board members, directors,
officers and shareholders, and each other Person, if any, who controls
any such seller or any such holder within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (each such person
being referred to herein as a "COVERED PERSON"), against any losses,
claims, damages or liabilities, joint or several, to which such
Covered Person may be or become subject under the Securities Act, the
Exchange Act, state securities or blue sky laws, common law or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings
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in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained
or incorporated by reference in any registration statement under the
Securities Act, any preliminary prospectus or final prospectus
included therein, or any related summary prospectus, or any amendment
or supplement thereto, or any document incorporated by reference
therein, (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or (iii) any violation or alleged
violation by the Company of any federal, state or common law rule or
regulation applicable to the Company, and will reimburse such Covered
Person for any legal or any other expenses incurred by it in
connection with investigating or defending any such loss, claim,
damage, liability, action or proceeding; PROVIDED, HOWEVER, that
neither the Company nor any of its Subsidiaries shall be liable to any
Covered Person in any such case to the extent that any such loss,
claim, damage, liability, action or proceeding arises out of or is
based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement, incorporated document or other such
disclosure document in reliance upon and in conformity with written
information furnished to the Company through an instrument duly
executed by such Covered Person specifically stating that it is for
use in the preparation thereof. The indemnities of the Company and of
its Subsidiaries contained in this Section 1.3.1 shall remain in full
force and effect regardless of any investigation made by or on behalf
of such Covered Person and shall survive any transfer of securities.
1.3.2. INDEMNITIES TO THE COMPANY. The Company may
require, as a condition to including any securities in any
registration statement filed pursuant to this Section 1, that the
Company shall have received an undertaking satisfactory to it from the
prospective seller of such securities, to indemnify and hold harmless
the Company, each director of the Company, each officer of the Company
who shall sign such registration statement and each other Person
(other than such seller), if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (each such person being referred to herein as a "COVERED
PERSON") with respect to any statement in or omission from such
registration statement, any preliminary prospectus or final prospectus
included therein, or any amendment or supplement thereto, or any other
disclosure document (including, without limitation, reports and other
documents filed under the Exchange Act) or any document incorporated
therein, if such statement or omission was made in reliance upon and
in conformity with written information furnished to the Company
through an instrument executed by such seller, specifically stating
that it is for use in the preparation of such registration statement,
incorporated document, or other
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disclosure document. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling Person and shall
survive any transfer of securities.
1.3.3. INDEMNIFICATION PROCEDURES. Promptly after receipt
by a Covered Person of notice of the commencement of any action or
proceeding involving a claim of the type referred to in the foregoing
provisions of this Section 1.3, such Covered Person will, if a claim
in respect thereof is to be made by such Covered Person against any
indemnifying party, give written notice to each such indemnifying
party of the commencement of such action; PROVIDED, HOWEVER, that the
failure of any Covered Person to give notice to such indemnifying
party as provided herein shall not relieve any indemnifying party of
its obligations under the foregoing provisions of this Section 1.3,
except and solely to the extent that such indemnifying party is
actually prejudiced by such failure to give notice. In case any such
action is brought against a Covered Person, each indemnifying party
will be entitled to participate in and to assume the defense thereof,
jointly with any other indemnifying party similarly notified, to the
extent that it may wish, with counsel reasonably satisfactory to such
Covered Person (who shall not, except with the consent of the Covered
Person, be counsel to such an indemnifying party), and after notice
from an indemnifying party to such Covered Person of its election so
to assume the defense thereof, such indemnifying party will not be
liable to such Covered Person for any legal or other expenses
subsequently incurred by the latter in connection with the defense
thereof; PROVIDED, HOWEVER, that (i) if the Covered Person reasonably
determines that there may be a conflict between the positions of such
indemnifying party and the Covered Person in conducting the defense of
such action or if the Covered Person reasonably concludes that
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them, then counsel for the Covered Person shall conduct the defense to
the extent reasonably determined by such counsel to be necessary to
protect the interests of the Covered Person and such indemnifying
party shall employ separate counsel for its own defense, (ii) the
indemnifying party shall bear the legal expenses incurred in
connection with the conduct of, and the participation in, the defense
as referred to in clauses (i) and (ii) above. If, within a reasonable
time after receipt of the notice, such indemnifying party shall not
have elected to assume the defense of the action, such indemnifying
party shall be responsible for any legal or other expenses incurred by
such Covered Person in connection with the defense of the action,
suit, investigation, inquiry or proceeding. No indemnifying party
will consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Covered Person of a release from all
liabilities in respect to such claim or litigation.
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1.3.4. CONTRIBUTION. If the indemnification provided for
in Sections 1.3.1 or 1.3.2 hereof is unavailable to a party that would
have been a Covered Person under any such Section in respect of any
losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to therein, then each party that would have
been an indemnifying party thereunder shall, in lieu of indemnifying
such Covered Person, contribute to the amount paid or payable by such
Covered Person as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such
proportion as is appropriate to reflect the relative fault of such
indemnifying party on the one hand and such Covered Person on the
other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof). The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by such
indemnifying party or such Covered Person and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The parties agree that it would
not be just or equitable if contribution pursuant to this
Section 1.3.4 were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to in the preceding sentence. The amount paid
or payable by a contributing party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 1.3.4 shall include any legal or
other expenses reasonably incurred by such Covered Person in
connection with investigating or defending any such action or claim.
No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
1.3.5. LIMITATION ON LIABILITY OF HOLDERS OF REGISTRABLE
SECURITIES. The liability of each holder of Registrable Securities in
respect of any indemnification or contribution obligation of such
holder arising under this Section 1.3 shall not in any event exceed an
amount equal to the net proceeds to such holder (after deduction of
all underwriters' discounts and commissions and all other expenses
paid by such holder in connection with the registration in question)
from the disposition of the Registrable Securities disposed of by such
holder pursuant to such registration.
1.4. SURVIVAL.
1.4.1. SURVIVAL. The registration rights set forth in this
Section 1 shall survive the dissolution of MBW Investors LLC pursuant to Section
15.2(d) of the LLC Agreement and shall remain binding on the Subsidiaries of MBW
Investors LLC.
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