Amended and Restated Limited Liability Company Agreement of AdvisorShares Investments, LLC (a Delaware Limited Liability Company) Dated as of October 31, 2008
Exhibit 10.2
Amended
and Restated
of
AdvisorShares
Investments, LLC
(a
Delaware Limited Liability Company)
Dated
as of October 31, 2008
Table
of Contents
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ARTICLE
I DEFINITIONS
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|
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Section
1.01.
|
Definitions
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2
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ARTICLE
II GENERAL
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5 | |
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Section
2.01.
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The
Company
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5
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Section
2.02.
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Name
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6
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Section
2.03.
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Registered
Office; Registered Agent
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6
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Section
2.04.
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Principal
Office in the United States; Other Offices
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6
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Section
2.05.
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Purposes
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6
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|
Section
2.06.
|
Foreign
Qualification
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6
|
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Section
2.07.
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Term
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6
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|
Section
2.08.
|
No
Partnership
|
7
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| ARTICLE III MEMBERS | 7 | |
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Section
3.01.
|
Members
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7
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Section
3.02.
|
Liability
to Third Parties
|
7
|
|
Section
3.03.
|
No
Management Authority
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7
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|
Section
3.04.
|
Information
and Inspection Rights
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7
|
|
Section
3.05.
|
Other
Rights
|
7
|
|
Section
3.06.
|
Indirect
Transfers
|
8
|
|
Section
3.07.
|
Other
Activities
|
8
|
| ARTICLE IV CAPITAL CONTRIBUTIONS | 8 | |
|
Section
4.01.
|
Capital
Contributions
|
8
|
|
Section
4.02.
|
Additional
Contributions
|
8
|
|
Section
4.03.
|
Return
of Contributions; No Interest on Capital
|
9
|
|
Section
4.04.
|
Capital
Accounts
|
9
|
| ARTICLE V ISSUANCE OF UNITS; CERTIFICATES | 10 | |
|
Section
5.01.
|
Issuance
of Units
|
10
|
|
Section
5.02.
|
Issuance
of Additional Units
|
10
|
|
Section
5.03.
|
Grant
of Preemptive Rights
|
10
|
|
Section
5.04.
|
Units
Not Certificated.
|
11
|
|
Section
5.05.
|
Transfers
|
11
|
|
Section
5.06.
|
Record
Holders
|
12
|
|
Section
5.07.
|
Contribution
Defaults of ▇▇▇▇.▇▇▇
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12
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|
Section
5.08.
|
Termination
of Employment of the Founder and Related Matters
|
13
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| ARTICLE VI ALLOCATIONS AND DISTRIBUTIONS | 13 | |
|
Section
6.01.
|
Profits
and Losses Defined
|
13
|
|
Section
6.02.
|
General
Allocations of Profits and Losses
|
14
|
|
Section
6.03.
|
Special
Regulatory Allocations
|
14
|
|
Section
6.04.
|
Allocations
of Tax Incidents.
|
16
|
|
Section
6.05.
|
Distributions
|
16
|
|
Section
6.06.
|
Tax
Liability Distribution
|
16
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| ARTICLE VII BOARD OF DIRECTORS | 17 | |
|
Section
7.01.
|
Management
of the Company; Board of Directors.
|
17
|
|
Section
7.02.
|
Actions
that Require Approval of the Required Percentage of
Units
|
18
|
|
Section
7.03.
|
Committees;
Reliance on Authority.
|
18
|
|
Section
7.04.
|
Number
of Directors; Term of Office
|
19
|
|
Section
7.05.
|
Resignation
|
19
|
|
Section
7.06.
|
Meetings.
|
19
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|
Section
7.07.
|
Action
by Written Consent or Telephone Conference
|
20
|
|
Section
7.08.
|
Compensation
|
20
|
|
Section
7.09.
|
Officers.
|
20
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| ARTICLE VIII MEETINGS OF MEMBERS | 21 | |
|
Section
8.01.
|
Meetings.
|
21
|
|
Section
8.02.
|
Proxies
|
22
|
|
Section
8.03.
|
Conduct
of Meetings
|
22
|
|
Section
8.04.
|
Action
by Written Consent or Telephone Conference.
|
22
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| ARTICLE IX INDEMNIFICATION; LIMITATION OF LIABILITY; CONFIDENTIALITY | 23 | |
|
Section
9.01.
|
Indemnification.
|
23
|
|
Section
9.02.
|
Limitation
of Liability.
|
25
|
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Section
9.03.
|
Savings
Clause
|
25
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|
Section
9.04.
|
Confidentiality
|
25
|
| ARTICLE X TAXES | 26 | |
|
Section
10.01.
|
Tax
Returns
|
26
|
|
Section
10.02.
|
Tax
Elections
|
26
|
|
Section
10.03.
|
Tax
Matters Partner
|
27
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| ARTICLE XI DISPOSITION OF UNITS | 27 | |
|
Section
11.01.
|
Restrictions
on Disposition
|
27
|
|
Section
11.02.
|
Voidance
of Certain Dispositions
|
28
|
|
Section
11.03.
|
Certain
Expenses
|
28
|
|
Section
11.04.
|
Substituted
Members
|
28
|
|
Section
11.05.
|
Drag-Along
Rights
|
28
|
|
Section
11.06.
|
Tag-Along
Rights
|
29
|
|
Section
11.07.
|
Right
of First Offer
|
30
|
|
Section
11.08.
|
Termination
of Restrictions on Disposition.
|
32
|
|
Section
11.09.
|
Allocations
Between Transferor and Transferee.
|
32
|
| ARTICLE XII BOOKS, RECORDS AND ACCOUNTING | 32 | |
|
Section
12.01.
|
Books
and Records
|
32
|
|
Section
12.02.
|
Fiscal
Year
|
32
|
|
Section
12.03.
|
Books
of Account; Tax Return.
|
32
|
| ARTICLE XIII DISSOLUTION, LIQUIDATION AND TERMINATION | 32 | |
|
Section
13.01.
|
Dissolution
|
32
|
|
Section
13.02.
|
Liquidation
and Termination
|
33
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|
Section
13.03.
|
Deficit
Capital Accounts
|
34
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|
Section
13.04.
|
Certificate
of Cancellation
|
35
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| ARTICLE XIV MISCELLANEOUS | 35 | |
|
Section
14.01.
|
Notices
|
35
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|
Section
14.02.
|
Adjustments
to Number of Units
|
35
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|
Section
14.03.
|
Entire
Agreement
|
35
|
|
Section
14.04.
|
Effect
of Waiver or Consent
|
35
|
|
Section
14.05.
|
Amendment
or Modification.
|
36
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|
Section
14.06.
|
Binding
Effect
|
36
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|
Section
14.07.
|
Governing
Law; Severability
|
37
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|
Section
14.08.
|
Further
Assurances
|
37
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|
Section
14.09.
|
Counterparts
|
37
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|
Section
14.10.
|
Construction
|
37
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|
Section
14.11.
|
No
Third Party Beneficiary.
|
37
|
|
Exhibit
A
|
Capital
Contributions and Number of Units
|
|
Amended
and Restated
of
AdvisorShares
Investments, LLC
(a
Delaware Limited Liability Company)
___________________________________________
This
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF ADVISORSHARES
INVESTMENTS, LLC (this “Agreement”)
is made and entered into as of October 31, 2008 by and among each of the Persons
(as hereinafter defined) identified on Exhibit
A hereto as Members (as hereinafter defined) of AdvisorShares
Investments, LLC, a Delaware limited liability company (the “Company”).
W
I T N E S S E T H:
WHEREAS,
on October 12, 2006, the Certificate of Formation (the “Certificate”)
of the Company was filed in the office of the Secretary of State of
Delaware;
WHEREAS,
as of October 12, 2006, ▇▇▇▇ ▇▇▇▇▇▇ (the “Founder”)
entered into the Limited Liability Company Agreement of the Company and the
Founder was admitted as a Member;
WHEREAS,
as of January 1, 2008, the Founder made total capital contributions of $10,000
to the Company;
WHEREAS,
as of September 23, 2008, the Founder contributed all of his interests in the
Company to ▇▇▇▇▇▇ ▇▇▇▇ Group, LLC, a Delaware limited liability company (“Founder
LLC”), Founder LLC was admitted as a Member, and the Founder withdrew as
a Member;
WHEREAS,
on the date hereof, ▇▇▇▇.▇▇▇ Inc., a Delaware corporation (“▇▇▇▇.▇▇▇”)
purchased six million Units from the Company pursuant to the Purchase and
Contribution Agreement (as defined below) and ▇▇▇▇.▇▇▇ desires to be admitted as
a Member pursuant to the terms of conditions of this Agreement; and
WHEREAS,
the parties hereto desire to enter into this Agreement in order to provide for
the regulation and management of the Company and set forth the respective
rights, duties and obligations of the Members in connection
therewith;
NOW,
THEREFORE, in consideration of the premises, the terms and provisions set forth
herein, the mutual benefits to be derived from the performance thereof and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.01. Definitions
. As
used in this Agreement, the terms set forth below have the following respective
meanings:
“Act”
means the Delaware Limited Liability Company Act and any successor statute, in
each case as amended from time to time.
“Adjusted
Capital Account Deficit” means the deficit balance, if any, in a Member’s
Capital Account as of the end of the applicable fiscal year after (i) crediting
thereto any amounts which such Member is obligated to restore pursuant to this
Agreement or Treasury Regulation section 1.704-1(b)(2)(ii)(c) or is deemed to be
obligated to restore pursuant to Treasury Regulation sections 1.704-2(g)(1) and
1.704-2(i)(5); and (ii) debiting to such Capital Account the amounts described
in Treasury Regulation sections 1.704-1(b)(2)(ii)(d)(4), (5) and
(6). The foregoing definition is intended to comply with Treasury
Regulation section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
“Affiliate”
means,
as to any Person, any other Person that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control with
such specified Person. For the purposes of this Agreement, “control”
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative
to the foregoing.
“Board
of Directors” has the meaning set forth in Section 7.01
hereof.
“Budget”
has the meaning set forth in Section 3.04(c) hereof. However, prior
to the achievement of Milestone A, “Budget” shall be the budget attached to the
Purchase and Contribution Agreement as Exhibit D thereto.
“Business
Day” means Monday through Friday of each week, except that a legal
holiday recognized as such by the government of the United States of America or
a date upon which any national securities exchange is closed shall not be
regarded as a Business Day.
“Capital
Account” has the meaning set forth in Section 4.04 hereof.
“Cause”
has the meaning set forth in the Employment Agreement.
“Certificate”
has the meaning set forth in the recitals of this Agreement.
“Class
A Directors” has the meaning set forth in Section 7.04(a)
hereof.
“Class
B Directors” has the meaning set forth in Section 7.04(b) hereof.
“Code”
means the Internal Revenue Code of 1986 and any successor statute, in each case
as amended from time to time.
“Contribution
Default” has the meaning set forth in Section 5.07(a)
hereof.
“Contribution
Obligation” the meaning set forth in the Purchase and Contribution
Agreement.
“Director”
means any Person elected as a member of the Board of Directors as provided in
this Agreement (but does not include any Person who has ceased to be a member of
the Board of Directors).
“Disposition” means
a sale, assignment, transfer, gift, encumbrance, hypothecation, mortgage,
pledge, exchange or any other conveyance or disposition by law or otherwise,
voluntarily or involuntarily, and the terms “Dispose”
and “Disposing”
shall have correlative meanings.
“Drag-Along
Election” has the meaning set forth in Section 11.04(b)
hereof.
“Employment
Agreement” means the employment agreement between the Founder and the
Company, as in effect on the date hereof.
“Founder”
has the meaning set forth in the recitals of this Agreement.
“Founder
LLC” has the meaning set forth in the recitals of this
Agreement.
“Good
Reason” has the meaning set forth in the Employment
Agreement.
“▇▇▇▇.▇▇▇”
has the meaning set forth in the recitals of this Agreement.
“Indemnitee”
has the meaning set forth in Section 9.01 hereof.
“Losses”
has the meaning set forth in Section 6.01 hereof.
“Member”
means any Person admitted to the Company as a member as provided in this
Agreement (but does not include any Person who has ceased to be a
member).
“Milestone
A, B, C or D” and “Milestones”
have the respective meanings set forth in the Purchase and Contribution
Agreement.
“Minimum
Hold Requirement” shall be deemed satisfied so long as such Member holds
at least 10% of the outstanding Units in the Company at the time of such
determination.
“Non-Selling
Member” has the meaning set forth in Section 11.05(a)
hereof.
“Nonrecourse
Deductions” has the meaning set forth in Treasury Regulation section
1.704-2(b)(1), and the amount of Nonrecourse Deductions for a fiscal year shall
be determined in accordance with the rules of Treasury Regulation section
1.704-2(c).
“Nonrecourse
Liability” has the meaning set forth in Treasury Regulation section
1.752-1(a)(2).
“Offeree”
has the meaning set forth in Section 11.06(a) hereof.
“Offeror”
has the meaning set forth in Section 11.06(a) hereof.
“Offer
Notice” has the meaning set forth in Section 11.06(a)
hereof.
“Offer
Notice Period” has the meaning set forth in Section 11.06(b)
hereof.
“Partner
Minimum Gain” means an amount, with respect to each Partner Nonrecourse
Debt, equal to the Partnership Minimum Gain that would result if such Partner
Nonrecourse Debt were treated as a Nonrecourse Liability, determined in
accordance with Treasury Regulation section 1.704-2(i)(3).
“Partner
Nonrecourse Debt” has the meaning set forth in Treasury Regulation
section 1.704-2(b)(4).
“Partner
Nonrecourse Deductions” has the meaning set forth in Treasury Regulation
section 1.704-2(i)(2), and the amount of Partner Nonrecourse Deductions with
respect to a Partner Nonrecourse Debt for a fiscal year shall be determined in
accordance with the rules of Treasury Regulation section
1.704-2(i)(2).
“Partnership
Minimum Gain” has the meaning set forth in Treasury Regulation section
1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as any net
increase or decrease in Partnership Minimum Gain, for a fiscal year shall be
determined in accordance with the rules of Treasury Regulation section
1.704-2(d).
“Person”
means
an individual or a corporation, limited liability company, partnership (whether
general, limited or limited liability), trust, unincorporated organization,
joint stock company, joint venture, association or other entity, or any
government, or any agency or political subdivision
thereof.
“Plan
of Liquidation” has the meaning set forth in Section 13.01
hereof.
“Profits”
has the meaning set forth in Section 6.01 hereof.
“Proposed
Sale” has the meaning set forth in Section 11.05(a) hereof.
“Proposed
Transferee” has the meaning set forth in Section 11.05(a)
hereof.
“Proposed
Third Party Sale” has the meaning set forth in Section 11.06(d)
hereof.
“Pro
Rata Share” has the meaning set forth in Section 5.03(a)
hereof.
“Purchase
and Contribution Agreement” means the Purchase and Contribution
Agreement, dated as of October 31, 2008, among the Company, ▇▇▇▇.▇▇▇, Founder
LLC and the Founder.
“Qualified
Public Offering” means an underwritten public offering of the Units (or
any other equity securities of the Company or any successor corporation or other
entity) under the Securities Act that results in aggregate gross proceeds for
the Company (or such successor) of at least $30.0 million and where the price
per Unit (or such other security) as offered to investors in such offering
(without subtracting any underwriter’s discounts or commissions) is at least
$4.00 (adjusted to reflect any splits, reverse splits or other similar events
which occur after the closing of such public offering).
“Regulatory
Allocations” has the meaning set forth in Section 6.03(g)
hereof.
“Required
Percentage” means Units representing (i) more than seventy five percent
(75%) of the total number of Units held by all Members plus (ii) for so long as
Founder LLC holds at least 50% of the Units held by Founder LLC as of the date
hereof, not less than one (1) Unit held by Founder LLC.
“Required
Sale” has the meaning set forth in Section 11.04(a) hereof.
“Required
Sale Notice” has the meaning set forth in Section 11.04(a)
hereof.
“Required
Sale Transferee” has the meaning set forth in Section 11.04(a)
hereof.
“SEC
Exemptive Order” has the meaning set forth in the Purchase and
Contribution Agreement.
“Securities
Act” means the Securities Act of 1933, as amended.
“Selling
Member” has the meaning set forth in Section 11.05(a)
hereof.
“Tag-Along
Right” has the meaning set forth in Section 11.05(a) hereof.
“Tagging
Member” has the meaning set forth in Section 11.05(a)
hereof.
“Tax
Liability Distribution” has the meaning set forth in Section 6.06
hereof.
“Unit”
means a portion of all or a specified category of the rights, duties,
obligations and ownership interests in the Company including, but not limited
to, rights to a share of the profits and losses of the Company and to receive
distributions of the Company’s assets, which is issued pursuant to this
Agreement (including fractional portions thereof).
ARTICLE
II
GENERAL
Section
2.01. The
Company. The
Company has been organized as a Delaware limited liability company by the filing
of the Certificate in the office of the Secretary of State of the State of
Delaware under and pursuant to the Act. Except as otherwise provided
herein, the rights and obligations of the Members and the administration and
termination of the Company shall be governed by the Act.
Section
2.02. Name. The
name of the Company is “AdvisorShares Investments, LLC” and all Company business
must be conducted in that name or such other names as the Board of Directors may
select from time to time in compliance with applicable
law.
Section
2.03. Registered
Office; Registered Agent
. The
registered office of the Company required by the Act to be maintained in the
State of Delaware shall be the office of the initial registered agent named in
the Certificate or such other office (which need not be a place of business of
the Company) as the Board of Directors may designate from time to time in the
manner provided by applicable law. The registered agent of the
Company in the State of Delaware shall be the initial registered agent named in
the Certificate or such other Person or Persons as the Board of Directors may
designate from time to time in the manner provided by law.
Section
2.04. Principal
Office in the United States; Other Offices. The
principal office of the Company in the United States shall be at such place as
the Board of Directors may designate from time to time, which need not be in the
State of Delaware. The Company may have such other offices as the
Board of Directors may designate from time to time. As of the date of
this Agreement, the principal office of the Company is located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Section
2.05. Purposes. The
Company is formed for the object and purpose of, and the nature of the business
to be conducted and promoted by the Company is (i) pursuing development of
actively managed exchange traded funds and platforms and (ii) engaging in any
lawful activity or activities, entering into obligations, acquiring assets and
operating any existing or such acquired or new businesses and performing
contracts related to or incidental to and necessary, appropriate or convenient
for the accomplishment of the purposes set forth in clause (i) of this Section
2.05. The Company shall possess and may exercise all the powers and
privileges granted by the Act or by any other law or by this Agreement, together
with any powers incidental thereto, insofar as such powers and privileges are
necessary or convenient to the conduct, promotion or attainment of the foregoing
business object and purpose of the Company.
Section
2.06. Foreign
Qualification. Prior
to the Company conducting business in any jurisdiction other than the State of
Delaware, the Board of Directors shall cause the Company to comply, to the
extent procedures are available and those matters are reasonably within the
control of the Board of Directors, with all requirements necessary to qualify
the Company as a foreign limited liability company in that
jurisdiction. At the request of the Board of Directors, each Member
shall execute, acknowledge, swear to, and deliver all certificates and other
instruments conforming with this Agreement that are necessary or appropriate to
qualify, continue and terminate the Company as a foreign limited liability
company in all such jurisdictions in which the Company may conduct
business.
Section
2.07. Term. The
Company’s existence commenced on the date upon which the Certificate was filed
in the office of the Secretary of State of the State of Delaware and shall
continue until the Company is dissolved and its affairs wound up in accordance
with the provisions of Article
XIII.
Section
2.08. No
Partnership. The
Members intend that the Company not be a partnership (including, without
limitation, a limited partnership) or joint venture, and that no Member or
Director be a partner or joint venturer of any other Member or Director by
virtue of the provisions of this Agreement or the arrangements created hereby,
for any purposes other than federal and state tax purposes, and nothing
contained in this Agreement shall be construed to provide
otherwise.
ARTICLE
III
MEMBERS
Section
3.01. Members. From
and after the date hereof, the Members shall be (i) the Persons identified on
Exhibit
A hereto and (ii) any other Persons admitted from time to time as Members
pursuant to the provisions of this Agreement.
Section
3.02. Liability
to Third Parties. 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. To the fullest extent permitted by law, no Member shall be
obligated personally for any such debt, obligation or liability of the Company
solely by reason of being a Member.
Section
3.03. No
Management Authority. No
Member (other than a Member acting in its capacity as a Director or an officer)
shall have the authority or power to act for or on behalf of the Company, to do
any act that would be binding on the Company or to make any expenditures or
incur any liability on behalf of the Company.
Section
3.04. Information
and Inspection Rights. All
Members shall be entitled to the full exercise of their rights under Section
18-305 of the Act. In addition, the Company shall provide each Member
who satisfies the Minimum Hold Requirement, the following information at the
times provided:
(a) quarterly,
within 60 days after the end of each fiscal quarter, unaudited financial
statements with respect to such fiscal quarter, including income statements,
balance sheets and cash flow statements;
(b) annually,
within 120 days after the end of each fiscal year, financial statements,
including income statements, balance sheets and cash flow statements with
respect to such fiscal year, which financial statements shall be audited by an
independent certified public accounting firm of national standing;
and
(c) as soon
as practicable, but in any event at least 30 days before the end of each fiscal
year, a budget and business plan for the next fiscal year (collectively, the
“Budget”),
approved by the Board of Directors and prepared on a monthly basis, including
balance sheets, income statements, and statements of cash flow for such months
and, promptly after prepared, any other budgets or revised budgets prepared by
the Company.
Section
3.05. Other
Rights. Notwithstanding
Section 7.02 or any other provision of this Agreement, the Company may not,
without the prior written consent and approval of all of the Members, (a) amend,
supplement, modify, terminate or waive any provision of this Agreement or other
agreements governing the relative rights and obligations of the Members in a
manner that adversely affects any Member and is prejudicial to such Member
relative to any other Member, or (b) except as otherwise provided herein or in
the Purchase and Contribution Agreement, effectuate any redemption, purchase or
other acquisition or repurchase of any Units in a manner that is not pro rata
among the Members and made on the same terms and conditions (including
consideration) for all Members.
Section
3.06. Indirect
Transfers. If
any Member is an entity that was formed for the purpose of acquiring Units of
the Company or that has no substantial assets other than Units of the Company or
interests in Units of the Company, such Member agrees that (a) the instruments
or certificates evidencing equity interests in such entity (and the other equity
interests in any similar entities controlling such entity) will note the
restrictions contained in this Agreement on the transfer of Units as if such
equity interests were Units and (b) no equity interest may be transferred to any
Person other than in accordance with the terms and provisions of this Agreement
as if such equity interests were Units.
Section
3.07. Other
Activities. Neither
any Member nor Director nor their Affiliates shall be expressly or impliedly
restricted or prohibited under this Agreement from engaging in other activities
or business ventures of any kind or character whatsoever. Except as
may otherwise be otherwise expressly set forth in a separate written agreement,
each of the Members and Directors and their respective Affiliates, shareholders,
directors, officers and employees shall have the right to conduct, or to possess
a direct or indirect ownership interest in, activities and business ventures of
every type and description, including activities and business ventures in direct
competition with the Company. Neither the Company nor any Member
shall have any rights or claims by virtue of this Agreement or the relationships
created hereby in any such activities or business ventures of any Member or its
Affiliates, shareholders, directors, officers and employees (it being expressly
understood and agreed that any and all such rights and claims are hereby
irrevocably waived by each of the Members on his or its behalf and on behalf of
the Company).
ARTICLE
IV
CAPITAL
CONTRIBUTIONS
Section
4.01. Capital
Contributions. On
or prior to the date hereof, cumulative capital contributions of $10,000 were
made to the Company. As of the date hereof, the parties hereto agree
that the respective capital contributions and Capital Accounts (as defined
below) of the Members (or their respective share of any such capital
contributions made by their predecessors in interest, or their respective share
of the Capital Accounts, to the extent such Member is the transferee of one or
more Units) and Units of the Members are as set forth on Exhibit
A hereto.
Section
4.02. Additional
Contributions
. No
Member shall be obligated to make any additional capital contributions to the
Company apart from those capital contributions specified in Section 4.01, and in the case
of ▇▇▇▇.▇▇▇, the capital contributions required under the Purchase and
Contribution Agreement.
Section
4.03. Return
of Contributions; No Interest on Capital
. A
Member is not entitled to the return of any part of its capital contributions to
the Company or to be paid interest in respect of either its Capital Account or
such capital contributions. An unrepaid capital contribution is not a
liability of the Company or of any Member. A Member is not required
to contribute or to lend any cash or property to the Company to enable the
Company to return any Member’s capital contributions.
Section
4.04. Capital
Accounts
. The
Company shall maintain a separate account (“Capital
Account”) for each Member. As of the date of this Agreement,
each Member's Capital Account shall be equal to the amount set forth opposite
such Member's name under the column entitled “Capital Accounts Balances” on
Exhibit
A hereto, and shall subsequently be adjusted as provided
below.
(a) Credits
to Capital Accounts. Each Member’s Capital Account shall be
credited with (i) the amount of cash and the fair market value of other property
(net of liabilities that the Company is considered to assume or take subject to
under section 752 of the Code) contributed by such Member to the capital of the
Company and (ii) allocations to such Member of Profits (or items of income and
gain comprising such Profits) pursuant to Section 6.02 and items of income and
gain pursuant to Section 6.03.
(b) Debits
to Capital Accounts. A Member’s Capital Account shall be
debited with (i) the amount of any cash and the fair market value of any
property distributed to such Member (net of liabilities that such Member is
considered to assume or take subject to under section 752 of the Code) and (ii)
allocations to such Member of Losses (or items of loss and deduction comprising
such Losses) pursuant to Section 6.02 and items of loss and deduction pursuant
to Section 6.03.
(c) Effect
of Property Distributions. If any property other than cash is
distributed to a Member (including distributions in liquidation of the Company),
the Capital Accounts of the Members shall be adjusted as if the property had
instead been sold by the Company for a price equal to its fair market value with
the resulting gain or loss allocated among the Members pursuant to Section 6.02
and Section 6.03 and the proceeds therefrom distributed to such
Members.
(d) Effect
of Transfer of Membership Interest. In the event that any Unit
or interest therein is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of the transferor
Member to the extent such Capital Account relates to the transferred Unit or
interest therein.
(e) Adjustments
for Certain Revaluation Events. Upon the acquisition of an
additional Unit or interest therein by any new or existing Member in exchange
for more than a de minimis capital contribution or contribution of services, or
upon the distribution by the Company to a Member of more than a de minimis
amount of Company property as consideration for a Unit or interest therein, the
Board of Directors shall, immediately prior to such acquisition or distribution,
adjust the Capital Accounts of the Members (provided that the Board of Directors
reasonably and in good faith determines that such adjustments are necessary or
appropriate to reflect the relative economic interests of the Members in the
Company) to reflect the differences between the fair market value (as reasonably
determined by the Board of Directors in good faith) and the book value of all
property held by the Company as if the property had been sold and gain or loss
allocated among the Members pursuant to Section 6.02 and Section
6.03.
(f) Certain
Tax Incidents. The foregoing provisions of this Section 4.04
relating to the maintenance of Capital Accounts are intended to comply with
Treasury Regulation section 1.704-1(b) and shall be interpreted and applied in a
manner consistent with such Treasury Regulations.
ARTICLE
V
ISSUANCE
OF UNITS; CERTIFICATES
Section
5.01. Issuance
of Units. In
exchange for each Member’s capital contribution to the Company
referred to in Section 4.01, the Company shall issue to each Member the number
of Units set forth opposite such Member’s name on Exhibit A
hereto upon the execution and delivery of this Agreement by such
Member.
Section
5.02. Issuance
of Additional Units. Subject
to Section 5.03, Section 7.01 and Section 7.02, and with the prior approval of
the Required Percentage, in order to raise capital or acquire assets, to redeem
or retire any Company debt or for any other proper purpose consistent with the
purposes of the Company set forth in Section 2.05, the Company may from time to
time issue Units to Members or any other Persons (and, in connection with the
issuance thereof, may accept additional contributions from such Persons and
admit any such Persons to the Company as Members). There shall be no
limit on the number of Units that may be so issued. Subject to
Section 7.02(i), the Board of Directors shall have full and absolute discretion
in determining in good faith the consideration therefor and the other terms and
conditions with respect thereto. In connection with any such
issuance, the Board of Directors shall do all other things they shall determine
are necessary or appropriate, including, but not limited to, the filing of any
certificates or other documents with any federal, state or other governmental
agency. The admission of any Person as a Member upon the issuance of
Units pursuant to this Section 5.02 shall be effective only after the new Member
has executed and delivered to the Board of Directors a document, in form and
substance satisfactory to the Board of Directors, that (i) sets forth the
address for notices of such new Member and (ii) includes an agreement on the
part of such Member to be bound by the provisions of this
Agreement. The Board of Directors shall have the power to amend this
Agreement as necessary to reflect the issuance of Units, and such an amendment
need be executed only by an officer of the Company authorized by the Board of
Directors to do so.
Section
5.03. Grant
of Preemptive Rights
. (a) The
Company shall grant to each Member who satisfies the Minimum Hold Requirement
the right, on the terms and conditions set forth in this Section 5.03, to
purchase such Member’s Pro Rata Share (as defined below) of any Units that the
Company may from time to time propose to sell and issue. For purposes
of this Section 5.03, “Pro
Rata Share” shall mean the ratio of Units held by a Member on the day
immediately prior to the date of the notice described in Section 5.03(b) below
to the total number of the then outstanding Units held by all
Members.
(b) If the
Company proposes to undertake an issuance of Units, it shall give each Member
written notice of such proposal describing the Units, the cash consideration to
be paid for such Units and the general terms upon which the Company proposes to
issue such Units. Each Member shall have 15 Business Days from the
date of receipt of the notice to agree to purchase all or any portion of its Pro
Rata Share of such Units for the cash consideration and upon the general terms
specified in the notice by giving written notice to the Company that states the
quantity of Units to be purchased.
(c) Should
any Member not agree to purchase all of its Pro Rata Share of such Units, the
Company shall offer such Member’s remaining Pro Rata Share to those Members that
did so agree, proportionately among them in accordance with their respective
Unit ownership.
(d) Section
5.03(a) shall not apply to (i) the issuance or grant of Units, options or
convertible Units in connection with and pursuant to the terms of any incentive
compensation plan for the Directors and any employees of the Company, as
initially recommended by the Chief Executive Officer of the Company and approved
by the Board of Directors; (ii) the issuance or sale of Units, options or
convertible Units to a seller or its designee in connection with and as
consideration for the Company’s direct or indirect acquisition of an operating
business, which acquisition has been approved by the Board of Directors and the
Required Percentage; (iii) the issuance or sale of Units, options or convertible
Units to financial institutions or commercial lenders or their designees, in
connection with commercial loans to the Company by such financial institutions
or commercial lenders, which are approved by the Board of Directors and the
Required Percentage; (iv) the issuance or sale of Units, options or convertible
Units pursuant to any transaction approved by the Board of Directors primarily
for the purpose of (A) a joint venture, technology licensing or research and
development activity or (B) any other transaction involving strategic or similar
partners, and in each case primarily for purposes other than raising capital;
and (v) the issuance of Units pursuant to the terms of options or convertible
Units which have been issued, sold or granted in compliance with this Section
5.03.
(e) This
Section 5.03 shall terminate and be of no further force or effect upon the
consummation of a Qualified Public Offering.
Section
5.04. Units
Not Certificated.
The Units
shall not be represented by certificates. Upon issuance, redemption,
repurchase, forfeiture or any other adjustment in the number of Units held by
any Member, or the admission of any new member to the Company in accordance with
this Agreement, the Company shall amend Exhibit
A hereto to reflect such issuance, redemption, repurchase, forfeiture or
any other adjustment and such amendment shall not require the further consent of
any Member hereunder.
Section
5.05. Transfers. Units
shall be transferable in the manner prescribed by law and in accordance with and
subject to the provisions of Article XI. Transfers of Units shall be
made on the books of the Company only by the Person named in the certificate or
by its attorney lawfully constituted in writing and upon the surrender of the
certificate therefor, which shall be canceled before a new certificate shall be
issued.
Section
5.06. Record
Holders
. Except
as otherwise required by law, the Company shall be entitled to recognize the
exclusive right of the Person registered on its books as the owner of Units to
receive distributions in respect of such Units and to vote as the owner thereof,
and shall not be bound to recognize any equitable or other claim to or interest
in such Units on the part of any other Person, whether or not the Company shall
have notice thereof.
Section
5.07. Contribution
Defaults of ▇▇▇▇.▇▇▇. Notwithstanding
any other provision of this Agreement:
(a) In
the event ▇▇▇▇.▇▇▇ is in default under the Purchase and Contribution Agreement
with respect to a Contribution Obligation pursuant to Sections 1.2 (d), (e) (f)
or (g) of the Purchase and Contribution Agreement (“Contribution
Default”), then, if the Contribution Default is in connection
with:
(i) Milestone
A, then 5,587,500; or
(ii) Milestone
B, then 4,087,500; or
(iii) Milestone
C, then 3,000,000; or
(iv) Milestone
D, then 1,500,000
Units
held by ▇▇▇▇.▇▇▇ shall be forfeited by ▇▇▇▇.▇▇▇ and cancelled by the Company,
▇▇▇▇.▇▇▇’s percentage interest in the Company shall be proportionately reduced,
and Exhibit
A hereto shall be amended accordingly.
(b) Upon
a forfeiture of Units held by ▇▇▇▇.▇▇▇ pursuant to Section 5.07(a), the Company
and Founder LLC shall have the right at any time to redeem or purchase, as the
case may be, all or any portion of the remaining Units held by ▇▇▇▇.▇▇▇ at the
purchase price of:
(i) in
connection with a Contribution Default following achievement of Milestone A and
prior to achievement of Milestone B, $.04583 per Unit;
or
(ii) in
connection with a Contribution Default following achievement of Milestone B and
prior to achievement of Milestone C, $.2125 per Unit;
or
(iii) in
connection with a Contribution Default following achievement of Milestone C and
prior to achievement of Milestone D, $.3334 per Unit;
or
(iv) in
connection with a Contribution Default following achievement of Milestone D,
$.50 per Unit,
by
delivering written notice of such intent and the general terms upon which the
Company or Founder LLC shall redeem or purchase the Units, as the case may
be.
(c) Upon
a forfeiture of Units held by ▇▇▇▇.▇▇▇ pursuant to Section 5.07(a), the Class A
Directors of the Company shall automatically be removed from the Board of
Directors and the provisions of Section 7.04 shall be amended such that ▇▇▇▇.▇▇▇
will forfeit its right to designate the Class A Directors.
Section
5.08. Termination
of Employment of the Founder and Related Matters. Notwithstanding
any other provision of this Agreement:
(a) In
the event the Founder voluntarily resigns his employment with the Company
without Good Reason or is terminated for Cause, Founder LLC will forfeit 1/36th
of the Units held by Founder LLC as of the date hereof for each month less than
three years following such date that the Founder is initially employed by the
Company.
(b) In
the event the Founder ceases to be Chief Executive Officer of the Company for
any reason other than his voluntary resignation without Good Reason or
termination for Cause, the provisions of clause (a) of this Section 5.08 shall
cease to be of any further force or effect.
ARTICLE
VI
ALLOCATIONS
AND DISTRIBUTIONS
Section
6.01. Profits
and Losses Defined. As
used in this Agreement, the terms “Profits”
and “Losses”
mean, for each taxable year or other relevant period, the Company’s taxable
income or loss for such year or period determined in accordance with
section 703(a) of the Code (including items required to be separately
stated pursuant to section 703(a)(1) of the Code), subject to the following
adjustments:
(a) Any
income or deductions for tax purposes attributable to an election under
section 754 of the Code shall be disregarded;
(b) There
shall be added to taxable income or loss the amount of any receipt that is
permanently excluded from gross income or is exempt from taxation under the
Code, but which is not a capital contribution, loan proceeds, recovery of
capital or part of a non-recognition exchange;
(c) There
shall be subtracted from taxable income or loss any expenditure of the Company
that is not currently deductible nor capitalized for tax purposes (which
expenditures are described in section 705(a)(2)(B) of the
Code);
(d) To the
extent that an adjustment to the adjusted tax basis of any asset of the Company
pursuant to section 734(b) or section 743(b) of the Code is required,
pursuant to Treasury Regulation section 1.704-1(b)(2)(iv)(m), to be taken
into account in determining Capital Accounts, the amount of such adjustment
shall be treated as Profits of the Company (if the adjustment increases the
basis of the asset) or Losses of the Company (if the adjustment decreases the
basis of the asset);
(e) In
accordance with Treasury Regulation sections 1.704-1(b)(2)(iv)(g) and
1.704-1(b)(4)(i), depreciation, amortization, and gain or loss shall be computed
by reference to the book value, rather than the tax basis, of the assets of the
Company, in the manner set forth in Treasury Regulation sections
1.704-1(b)(2)(iv)(g) and 1.704-3(d)(2) (with respect to remedial
allocations).
For these
purposes, the initial book value of property of the Company will equal (i) in
the case of property contributed by a Member to the Company, the fair market
value of such property on the date of contribution as determined in accordance
with Treasury Regulation section 1.704-1(b)(2)(iv)(d), (ii) in the case of
property that is revalued pursuant to Treasury Regulation section
1.704-1(b)(2)(iv)(f), the fair market value of such property on the date of
revaluation, and (iii) in all other cases, the tax basis of such property;
and
(f) Any items
specifically allocated pursuant to Section 6.03 shall be excluded; provided,
however, that adjustments analogous to those provided in paragraphs (a) through
(e) above shall be made to items allocated pursuant to Section
6.03.
Section
6.02. General
Allocations of Profits and Losses
. Except
as otherwise expressly provided in this Agreement, Profits and Losses and, to
the extent necessary, individual items of income, gain, loss or deduction of the
Company shall be allocated among the Members in a manner such that the Capital
Account of each Member, immediately after making such allocation, is, as nearly
as possible, equal (proportionately) to (i) the distributions that would be made
to such Member pursuant to Section 6.05 (if it were applicable) if the
Company were dissolved, its affairs wound up and its assets sold for cash equal
to their book value (determined in accordance with section 704(b) of the Code,
as implemented by Section 4.04 and Section 6.01 hereof), all Company liabilities
were satisfied (limited with respect to each nonrecourse liability to the book
value of the assets securing such liability), and the net assets of the Company
were distributed in accordance with 6.05 to the Members immediately after making
such allocation, minus
(ii) such Member’s share of Partnership Minimum Gain and Partner Minimum Gain,
computed immediately prior to the hypothetical sale of assets.
Section
6.03. Special
Regulatory Allocations
. Notwithstanding
any provision in Section 6.02 to the contrary, the following special allocations
shall be made in the following order of priority.
(a) Minimum
Gain Chargeback. If there is a net decrease in Partnership
Minimum Gain during any fiscal year, each Member shall be specially allocated
items of income and gain of the Company for such fiscal year (and, if necessary,
subsequent fiscal years) in an amount equal to such Member’s share of the net
decrease in Partnership Minimum Gain, determined in accordance with Treasury
Regulation section 1.704-2(g). Allocations made pursuant to the
previous sentence shall be made in proportion to the respective amounts required
to be allocated to each Member pursuant thereto, and the items to be so
allocated shall be determined in accordance with Treasury Regulation section
1.704-2(f)(6).
(b) Partner
Minimum Gain Chargeback. If there is a net decrease in Partner
Minimum Gain attributable to a Partner Nonrecourse Debt during any fiscal year,
each Member who has a share of the Partner Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Treasury Regulation
section 1.704-2(i)(5), shall be specially allocated items of income and gain of
the Company for such fiscal year (and, if necessary, subsequent fiscal years) in
an amount equal to such Member’s share of the net decrease in Partner Minimum
Gain attributable to such Partner Nonrecourse Debt, determined in accordance
with Treasury Regulation section 1.704-2(i)(4). Allocations pursuant
to the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Member pursuant thereto, and the items to be so
allocated shall be determined in accordance with Treasury Regulation section
1.704-2(j)(2)(ii).
(c) Qualified
Income Offset. In the event that any Member unexpectedly
receives any adjustments, allocations or distributions described in Treasury
Regulation sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of income and
gain of the Company shall be specially allocated to such Member in an amount and
manner sufficient to eliminate (to the extent required by the Treasury
Regulations) as quickly as possible any Adjusted Capital Account Deficit created
by such adjustments, allocations or distributions; provided, however, that an
allocation pursuant to this Section 6.03(c) shall be made only if, and to the
extent that, such Member would have had an Adjusted Capital Account Deficit if
all other allocations provided for in Section 6.03 had been tentatively made as
if this Section 6.03(c) were not a part of this
Agreement.
(d) Partnership
Nonrecourse Deductions. Nonrecourse Deductions for any fiscal
year, or portion thereof, shall be allocated to the Members in proportion to the
number of Units held by each of them.
(e) Partner
Nonrecourse Deductions. Any item of Company loss, deduction or
expenditure described in section 705(a)(2)(B) of the Code that is attributable
to a Partner Nonrecourse Debt shall be allocated to those Members that bear the
economic risk of loss for such Partner Nonrecourse Debt, and among such Members
in accordance with the ratios in which they share such economic risk determined
in accordance with Treasury Regulation section
1.704-2(i).
(f) Code
Section 754 Adjustments. To the extent that an adjustment to
the adjusted tax basis of any asset of the Company pursuant to section 734(b) or
section 743(b) of the Code is required, pursuant to Treasury Regulation section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
Profits or Losses resulting from such adjustment shall be specially allocated to
the Members in a manner consistent with the adjustments to their Capital
Accounts required pursuant to such section of the Treasury Regulations. Upon the
disposition of all or any part of any Unit, at the request of the transferee of
such Unit(s), the Company shall elect, pursuant to section 754 of the Code, to
adjust the basis of the Company’s assets as provided in sections 734 and 743 of
the Code.
(g) Curative
Allocations. The allocations set forth in paragraphs (a)
through (f) above (the “Regulatory
Allocations”) are intended to comply with certain provisions of Treasury
Regulation section 1.704-1(b). Notwithstanding any other
provisions of this Article VI, the Regulatory Allocations shall be taken into
account in allocating other Profits and Losses and other items of income and
deduction among the Members so that, to the extent possible, the net amount of
the Regulatory Allocations and the allocations of other Profits, Losses, and
items of income and deductions to each Member shall be equal to the net amount
that would have been allocated to each such Member if the Regulatory Allocations
had not occurred; provided,
however, that Regulatory Allocations set forth in paragraphs (d) and (e)
above that are normally offset by subsequent Regulatory Allocations set forth in
paragraphs (a) and (b) above shall be subject to such adjustment only if the
Board of Directors reasonably determines that a countervailing allocation
pursuant to paragraph (a) or (b) above is unlikely to
occur.
Section
6.04. Allocations
of Tax Incidents.
(a) Except as
otherwise provided below, all items of Company income, gain, loss, deduction, or
credit as computed for federal, state and local tax purposes, shall be allocated
for such purposes among the Members in the same manner as the corresponding item
of income, gain, loss, deduction, or credit was allocated pursuant to Section
6.02 and Section 6.03 for book purposes.
(b) In
accordance with section 704(c) of the Code, income, gain, loss and
deduction with respect to any property contributed to the capital of the Company
shall be allocated among the Members so as to take account of any variation at
the time of contribution between the adjusted basis of such property to the
Company for federal income tax purposes and its fair market
value. For these purposes, property of the Company that is revalued
pursuant to Treasury Regulation section 1.704-1(b)(2)(iv)(f) shall be deemed
contributed to the Company at the time of such
revaluation. Allocations made pursuant to this Section 6.04(b) 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
its share of income, gain, loss, deduction, credit or distributions of the
Company pursuant to any provision of this Agreement.
(c) As
between a transferor and transferee of any Units, each item of income, gain,
loss, deduction, or credit attributable to the transferred Units shall, for tax
purposes, be allocated among the transferor and transferee as if the books of
the Company were closed on the date of the transfer and (i) all items of income,
gain, loss, deduction, or credit attributable to the period ending on or before
the date of the transfer shall be allocated to the transferor and (ii) all items
of income, gain, loss, deduction, or credit attributable to the period beginning
on the day after the date of the transfer shall be allocated to the
transferee.
Section
6.05. Distributions. The
Board of Directors shall from time to time cause the Company to make such
distributions to the Members as the Board of Directors may determine in its sole
discretion, it being understood that the amount of such distributions need not
be limited to the current or accumulated income or gains of the
Company. Any such distributions shall be made to the Members in
proportion to the number of Units held by each of them at the time of such
distribution.
Section
6.06. Tax
Liability Distribution. Notwithstanding
Section 6.05, the Company shall, to the extent it has sufficient cash (as
reasonably determined by the Board of Directors), make pro rata distributions at
least quarterly in a cumulative amount hereunder sufficient, in the
determination of the Board of Directors, to enable each Member (or any Person
whose tax liability is determined by reference to the income of such Member) to
discharge their United States federal, state and local income tax liabilities
(including estimated tax liabilities) attributable to the cumulative items of
net income and net gain over net loss and net deduction, determined for income
tax purposes, allocable to each such Member by the Company (the “Tax
Liability Distribution”). Any such distributions shall be made to the
Members in proportion to the number of Units held by each of them at the time of
such distribution, with the result that Members with tax liabilities that are
disproportionately less than their pro rata interest will receive a Tax
Liability Distribution in excess of their tax liability.
ARTICLE
VII
BOARD
OF DIRECTORS
Section
7.01. Management
of the Company; Board of Directors.
(a) Except
for situations in which the approval of the Members is required by this
Agreement or by nonwaivable provisions of applicable law, the powers of the
Company shall be exercised by or under the authority of, and the business and
affairs of the Company shall be managed under the direction of, the Board of
Directors of the Company (the “Board
of Directors”), who shall collectively constitute “managers” of the
Company within the meaning of the Act. No Director, solely in his or
her capacity as such, shall have any power to act for, sign for or do any act
that would bind the Company, unless the Board of Directors shall provide
otherwise.
(b) In
exercising the powers and managing the business and affairs of the Company, the
Board of Directors shall do all such lawful acts and things as it deems
necessary and proper to comply with the Act and this Agreement. The
Board of Directors may make all decisions and take all actions for the Company
not otherwise provided for in this Agreement, including, without limitation, the
following:
(i) entering
into, making, and performing contracts, agreements, and other undertakings
binding upon the Company that may be necessary, appropriate, or advisable in
furtherance of the purposes of the Company and making all decisions and waivers
thereunder;
(ii) opening
and maintaining bank and investment accounts and arrangements, drawing checks
and other orders for the payment of money and designating individuals with
authority to sign or give instructions with respect to those accounts and
arrangements;
(iii) maintaining
the assets of the Company in good order;
(iv) collecting
sums due the Company;
(v) to the
extent that funds of the Company are available therefor, paying debts and
obligations of the Company;
(vi) acquiring,
utilizing and disposing of any asset of the Company;
(vii) borrowing
money or otherwise committing the credit of the Company and making voluntary
prepayments or obtaining extensions of debt;
(viii) selecting,
removing and changing the authority and responsibility of lawyers, accountants
and other advisers and consultants; and
(ix) obtaining
insurance for the Company.
Section
7.02. Actions
that Require Approval of the Required Percentage of
Units
. Notwithstanding
Section 7.01(b), without the consent and approval of Members holding the
Required Percentage of Units, the Company shall not take any action
to:
(a) make or
consent to a general assignment for the benefit of its
creditors;
(b) sell any
significant asset of the Company;
(c) effect
any merger, consolidation or reorganization of the Company with or into any
other entity, or Dispose of all or substantially all of the Company’s
assets;
(d) effect
any liquidation, dissolution, or winding up of the Company, except in accordance
with Article XIII;
(e) amend,
supplement, modify, terminate or waive any provision of this Agreement or other
agreements governing the relative rights and obligations of the
Members;
(f) issue any
Units, or any option, warrant or right to acquire such Units, except in
compliance with the preemptive rights of the Members set forth in Section
5.03;
(g) materially
change any of the terms of any incentive compensation plan for the Directors and
any employees of the Company;
(h) change
the compensation of any officers of the Company;
(i) effect
the payment or declaration of any dividend on, or repurchase or redemption of,
any Units, except as otherwise expressly set forth
herein;
(j) enter
into any transaction, contract or agreement with any Member or affiliate
thereof, or amendment thereto, other than transactions, contracts or agreements
in effect as of the date hereof;
(k) deviate
by more than 10.0% from the Budget of the Company for that particular year;
or
(l) settle or
compromise any tax dispute.
Section
7.03. Committees;
Reliance on Authority.
(a) In
managing the business and affairs of the Company and exercising its powers, the
Board of Directors shall act (i) collectively through meetings and written
consents pursuant to Section 7.06 and Section 7.07 and (ii) through committees
pursuant to paragraph (b) below.
(b) The Board
of Directors may, from time to time, designate one or more committees, each of
which shall be comprised of one or more Directors. Any such
committee, to the extent provided in such resolution or in this Agreement, shall
have and may exercise all of the authority of the Board of Directors, subject to
the limitations set forth in the Act. At every meeting of any such
committee, the presence of a majority of all the members thereof shall
constitute a quorum, and the affirmative vote of a majority of the members
present at a meeting at which a quorum is present, shall be necessary for the
adoption of any resolution. The Board of Directors may dissolve any
committee at any time, unless otherwise provided
herein.
(c) Any
Person dealing with the Company, other than a Member, may rely on the authority
of any officer of the Company in taking any action in the name of the Company
without inquiry into the provisions of this Agreement or compliance herewith,
regardless of whether that action actually is taken in accordance with the
provisions of this Agreement.
Section
7.04. Number
of Directors; Term of Office. The
Board of Directors shall be divided into two classes designated as Class A
Directors and Class B Directors.
(a) The Class
A Directors of the Company shall be comprised of three (3)
members. Such number may be increased from time to time by the
affirmative vote of the Board of Directors, but may not decreased without the
consent and approval of the all the Units held by ▇▇▇▇.▇▇▇. ▇▇▇▇.▇▇▇
shall have the sole and continuing right to elect the designees (and to remove
any designee and to appoint a replacement in the event of such designee’s
resignation, replacement or death) as a Class A Director. The “Class
A Directors” shall initially be ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇.
(b) The Class
B Directors of the Company shall be comprised of two (2)
members. Such number may be increased from time to time by the
affirmative vote of the Board of Directors, but may not decreased without the
consent and approval of the all the Units held by Founder
LLC. Founder LLC shall have the sole and continuing right to elect
the designees (and to remove any designee and to appoint a replacement in the
event of such designee’s resignation, replacement or death) as the Class B
Director. The “Class
B Directors” shall initially be the Founder.
(c) Each
Director shall hold office until his earlier death, resignation or
removal. Unless otherwise provided in this Agreement, the Directors
need not be Members or residents of the State of
Delaware.
Section
7.05. Resignation. Any
Director may resign at any time. Such resignation shall be made in
writing and shall take effect at the time specified therein, or, if no time be
specified, at the time of its receipt by the remaining Board of
Directors. The acceptance of a resignation shall not be necessary to
make it effective, unless expressly so provided in the resignation.
Section
7.06. Meetings.
Unless
otherwise required by law or provided in this Agreement, the attendance of one
Class A Director and one Class B Director shall constitute a quorum for the
transaction of business of the Board of Directors, and the act of not less than
one Class A Director and one Class B Director at a meeting at which a quorum is
present shall be the act of the Board of Directors. A Director who is
present at a meeting of the Board of Directors at which action on any Company
matter is taken shall be presumed to have assented to the action unless his
dissent shall be entered in the minutes of the meeting or unless he shall file
his written dissent to such action with the Person acting as secretary of the
meeting before the adjournment thereof or shall deliver such dissent to the
Company immediately after the adjournment of the meeting. Such right
to dissent shall not apply to a Director who voted in favor of such
action.
(a) Meetings
of the Board of Directors may be held at such place or places as shall be
determined from time to time by resolution of the Board of
Directors. At all meetings of the Board of Directors, business shall
be transacted in such order as shall from time to time be determined by
resolution of the Board of Directors. Attendance of a Director at a
meeting shall constitute a waiver of notice of such meeting, except where a
Director attends a meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
(b) Meetings
of the Board of Directors may be called by any Director on at least 24 hours’
notice to each other Director. Such notice need not state the purpose
or purposes of, nor the business to be transacted at, such meeting, except as
may otherwise be required by law or provided for by this
Agreement.
Section
7.07. Action
by Written Consent or Telephone Conference. Any
action permitted or required to be taken at a meeting of the Board of Directors
or any committee designated by the Board of Directors may be taken without a
meeting if a consent in writing, setting forth the action to be taken, is signed
by all the Directors or members of such committee, as the case may
be. Such consent shall have the same force and effect as a unanimous
vote at a meeting and may be stated as such in any document or instrument filed
with the Secretary of State of the State of Delaware, and the execution of such
consent shall constitute attendance or presence in person at a meeting of the
Board of Directors or any such committee, as the case may be. Subject
to the requirements of the Act or this Agreement for notice of meetings,
Directors or members of any committee designated by the Board of Directors may
participate in and hold a meeting of the Board of Directors or any committee of
the Board of Directors, as the case may be, by means of a conference telephone
or similar communications equipment by means of which all Persons participating
in the meeting can hear each other, and participation in such meeting shall
constitute attendance and presence in person at such meeting, except where a
Person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
Section
7.08. Compensation
. Any
Director shall receive such compensation, if any, for its services as may be
designated from time to time by the Board of Directors. In addition
to the foregoing, the Board of Directors shall be entitled to be reimbursed for
out-of-pocket costs and expenses incurred in the course of the performance of
their duties as Directors.
Section
7.09. Officers.
(a) The Board
of Directors may, from time to time, designate or remove one or more Persons to
be officers of the Company. Designation of an officer shall not of
itself create contract rights. Except as otherwise provided in this
Agreement, the authority and functions of the officers of the Company shall be
identical to the authority and functions of the officers of a corporation
organized under the Delaware General Corporation Law. The Board of
Directors may assign titles to particular officers. Unless the Board
of Directors decides otherwise, if the title is one commonly used for officers
of a business corporation formed under the Delaware General Corporation Law, the
assignment of such title shall constitute the delegation to such officer of the
authority and duties that are normally associated with that office, subject to
any specific delegation of authority and duties made to such officer by the
Board of Directors. Each officer shall hold office until his
successor shall be duly designated and shall qualify or until his death or until
he shall resign or shall have been removed in the manner hereinafter
provided. Any number of offices may be held by the same
Person. The salaries or other compensation, if any, of the officers
and agents of the Company shall be fixed from time to time by the Board of
Directors.
(b) Any
officer may resign as such at any time. Such resignation shall be
made in writing and shall take effect at the time specified therein, or if no
time be specified, at the time of its receipt by the Board of
Directors. The acceptance of a resignation shall not be necessary to
make it effective, unless expressly so provided in the
resignation.
ARTICLE
VIII
MEETINGS
OF MEMBERS
Section
8.01. Meetings.
A quorum
shall be present at a meeting of Members if the holders of the Required
Percentage of Units are represented at the meeting in person or by
proxy. With respect to any matter, other than a matter for which the
affirmative vote of the holders of the Units of a specified class or any portion
thereof is required by the Act or this Agreement, the affirmative vote of the
holders of a majority of the Units at a meeting of Members at which a quorum is
present shall be the act of the Members.
(a) All
meetings of the Members shall be held at the principal place of business of
the Company or at such other place within or without the State of Delaware as
shall be specified or fixed in the notices or waivers of notice thereof; provided,
however, that any or all Members may participate in any such meeting by
means of conference telephone or similar communications equipment pursuant to
Section 8.04.
(b) Notwithstanding
the other provisions of this Agreement, the chairman of the meeting or the
holders of a majority of Units present and entitled to vote thereat shall have
the power to adjourn such meeting from time to time, without any notice other
than announcement at the meeting of the time and place of the holding of the
adjourned meeting. If such meeting is adjourned by the Members, such
time and place shall be determined by a vote of the holders of a majority of the
Units present and entitled to vote. Upon the resumption of such
adjourned meeting, any business may be transacted that might have been
transacted at the meeting as originally called.
(c) Meetings
of the Members may be called at any time by the Board of Directors or the
holders of the Required Percentage of Units. If not otherwise stated
or fixed in accordance with the remaining provisions hereof, the record date for
determining Members entitled to call a meeting is the date any Member first
executes the notice of such meeting. Neither the business to be
transacted at, nor the purpose of, any meeting of the Members need be specified
in the notice or waiver of notice of such meeting.
(d) Written
or printed notice stating the place, day and hour of the meeting shall be
delivered not less than three (3) days before the date of the meeting by or
at the direction of the Board of Directors or the Person calling the meeting to
each Member entitled to vote at such meeting.
(e) The date
on which notice of a meeting of Members is mailed or the date on which the
resolution of the Board of Directors declaring a distribution is adopted, as the
case may be, shall be the record date for the determination of the Members
entitled to notice of or to vote at such meeting, including any adjournment
thereof, or the Members entitled to receive such
distribution.
Section
8.02. Proxies. A
Member may vote either in person or by proxy executed in writing by the
Member. An electronic transmission by a Member, or a photographic,
photostatic, facsimile or similar reproduction of a writing executed by a
Member, shall be treated as an execution in writing for purposes of this Section
8.02. Proxies for use at any meeting of Members or in connection with
the taking of any action by written consent shall be filed with the Company,
before or at the time of the meeting or execution of the written consent, as the
case may be. All proxies shall be received and taken charge of and
all ballots shall be received and canvassed by the Board of Directors, who shall
decide all questions touching upon the qualification of voters, the validity of
the proxies, and the acceptance or rejection of votes. No proxy shall
be valid after 11 months from the date of its execution unless otherwise
provided in the proxy. A proxy shall be revocable unless the proxy
form conspicuously states that the proxy is irrevocable and the proxy is coupled
with an interest.
Section
8.03. Conduct
of Meetings. All
meetings of the Members shall be presided over by the chairman of the meeting,
who shall be a Director (or representative thereof) designated by a majority of
the Board of Directors. The chairman of any meeting of Members shall
determine the order of business and the procedure at the meeting, including such
regulation of the manner of voting and the conduct of discussion as seem to him
in order.
Section
8.04. Action
by Written Consent or Telephone Conference.
(a) Any
action required or permitted to be taken at any meeting of Members may be taken
without a meeting, without prior notice, and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be signed by the
holder or holders of not less than the minimum number of Units that would be
necessary to take such action at a meeting at which the holders of all Units
entitled to vote on the action were present and voted. Prompt notice
of the taking of the action without a meeting by less than unanimous written
consent shall be given to those Members who have not consented in writing and
who, if the action had been taken at a meeting, would have been entitled to
notice of the meeting if the record date for such meeting had been the date that
written consents signed by a sufficient number of holders to take the action
were delivered to the Company as provided in this Section
8.04.
(b) The
record date for determining Members entitled to consent to action in writing
without a meeting shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Company by delivery to its registered office, its principal place of business,
or the Board of Directors. Delivery shall be by hand or by certified
or registered mail, return receipt requested. Delivery to the
Company’s principal place of business shall be addressed to the Board of
Directors.
(c) If any
action by Members is taken by written consent, any certificate or other document
filed with the Secretary of State of the State of Delaware as a result of the
taking of the action shall state, in lieu of any statement required by the Act
concerning any vote of Members, that written consent has been given in
accordance with the provisions of the Act and that any written notice required
by the Act has been given.
(d) Members
may participate in and hold a meeting by means of conference telephone or
similar communications equipment by means of which all Persons participating in
the meeting can hear each other, and participation in such meeting shall
constitute attendance and presence in person at such meeting, except where a
Person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
ARTICLE
IX
INDEMNIFICATION;
LIMITATION OF LIABILITY; CONFIDENTIALITY
Section
9.01. Indemnification.
(a) To the
fullest extent permitted by law, (i) the Directors, (ii) the Members, (iii)
Affiliates of the Members or the Directors, (iii) officers, directors,
stockholders, members, managers, general partners and employees of the Members
or their respective Affiliates, and (iv) officers, directors, managers and
employees of the Company or its Affiliates who perform or are alleged to perform
any duties, responsibilities or functions for or on behalf of the Company
(individually, an “Indemnitee”)
shall be indemnified and held harmless by the Company from and against any and
all losses, claims, damages, liabilities, whether joint or several, expenses
(including legal fees and expenses), judgments, fines, settlements and other
amounts arising from any and all claims, demands, actions, suits or proceedings,
civil, criminal, administrative or investigative, in which the Indemnitee may be
involved, or threatened to be involved, as a party or otherwise, by reason of
its status specified in clause (i), (ii), (iii) or (iv) above, if (A) the
Indemnitee acted in good faith and in a manner it reasonably believed to be in,
or not opposed to, the best interests of the Company, and, with
respect to any criminal proceeding, had no reasonable cause to believe that its
conduct was unlawful, and (B) the Indemnitee’s conduct did not constitute gross
negligence or willful or wanton misconduct. The termination of any
action, suit or proceeding by judgment, order, settlement or upon a plea of
nolo
contendere, or its equivalent, shall not, of itself, create a presumption
that the Indemnitee failed to meet the standards for indemnification set forth
in the immediately preceding sentence.
(b) To the
fullest extent permitted by law, expenses incurred by an Indemnitee in defending
any claim, demand, action, suit or proceeding subject to this Section 9.01
shall, from time to time, be advanced by the Company prior to the final
disposition of such claim, demand, action, suit or proceeding, upon receipt by
the Company of an undertaking by or on behalf of the Indemnitee to repay such
amount if it shall be determined that such Person is not entitled to be
indemnified as authorized in this Section 9.01.
(c) The
indemnification provided by this Section 9.01 shall be in addition to any other
rights to indemnification or contribution to which those indemnified may be
entitled from the Company pursuant to any agreement of the Company, approval by
the Members or as a matter of law, as to (i) an action in a capacity described
in clause (i), (ii), (iii) or (iv) of paragraph (a) above and (ii) an action in
another capacity, and shall continue as to an Indemnitee who has ceased to serve
in such capacity (but only as to actions taken by such Indemnitee prior to such
Indemnitee ceasing to serve in such capacity) and shall inure to the benefit of
the heirs, successors, assigns and administrators of the
Indemnitee. The Company may indemnify an Indemnitee against, or make
contribution in respect of, losses, claims, damages, liabilities, whether joint
or several, expenses (including legal fees and expenses), judgments, fines,
settlements and other amounts incurred by an Indemnitee on a basis other than
that described in this Section 9.01 if such indemnification or contribution is
approved by the Board of Directors.
(d) To the
extent commercially reasonable, the Company may purchase and maintain insurance
on behalf of the Directors, and such other Persons as the Board of Directors
shall determine, against any liability that may be asserted against or expense
that may be incurred by such Person in connection with the Company’s activities,
regardless of whether the Company would have the power to indemnify such Person
against such liability under the provisions of this Agreement. Any
indemnification under this Section 9.01 shall first be satisfied out of
insurance proceeds to the extent such proceeds have been received by the
Company. In the event that any assets of the Company are used to
satisfy any indemnification obligation hereunder and insurance proceeds are
subsequently received in respect of the losses, claims, damages, liabilities or
expenses in respect of which indemnification has been provided, such proceeds
shall be used to repay the Company for the amounts used by it to satisfy such
indemnification obligation.
(e) Any
indemnification hereunder shall be satisfied solely out of the assets of the
Company. In no event may an Indemnitee subject any of the Members to
personal liability by reason of these indemnification
provisions.
(f) An
Indemnitee shall not be denied indemnification in whole or in part under this
Section 9.01 because the Indemnitee had an interest in the transaction with
respect to which the indemnification applies if the transaction was otherwise
permitted by the terms of this Agreement, provided
that such indemnification shall only extend to such Indemnitee’s activities with
respect to or on behalf of the Company, and not to such Indemnitee’s other
interest in the transaction.
(g) The
indemnification provided in this Section 9.01 is for the benefit of the
Indemnities and shall not be deemed to create any right to indemnification for
any other Persons.
(h) Notwithstanding
any other provision of this Section 9.01, the indemnification provided in this
Section 9.01 shall not be for the benefit of (i) Founder LLC or ▇▇▇▇.▇▇▇ in
connection with any default by Founder LLC or ▇▇▇▇.▇▇▇, as the case may be,
under the Purchase and Contribution Agreement (including, without limitation,
any misrepresentations or defaults under Article 2, Article 3 or Article 4
thereof) and (ii) Founder LLC in connection with any matter set forth on Section
8.1 of the Disclosure Schedule to the Purchase and Contribution
Agreement.
Section
9.02. Limitation
of Liability.
(a) To the
fullest extent permitted by law, except as expressly provided herein, no Member
or Director or any of its affiliates, officers, directors, partners, employees
or agents shall be liable to the Company or any other Member or Director for
losses sustained or liabilities incurred as a result of any act or omission,
unless such action or omission constitutes gross negligence or willful
misconduct.
(b) To the
fullest extent permitted by applicable law, whenever it is provided in this
Agreement that any Director or Member is permitted or required to make a
determination in its “discretion” or “sole discretion” or under a grant of
similar authority or latitude, such person shall be entitled to consider only
such interests and factors as it deems appropriate and shall have no duty or
obligation to give any consideration to any other interest of, or factor
affecting, the Company or the Members or the
Directors.
(c) Each
Member hereby acknowledges that the terms and provisions of this Agreement were
negotiated at arm’s length by parties that are competent and reasonably
knowledgeable with respect to the subject matter hereof. Accordingly,
each Member hereby agrees that any standard of care or duty imposed by the Act
or any other applicable law, rule or regulation shall, to the fullest extent
permitted by law and except as expressly provided herein, be modified, waived or
limited in order to permit the Members and Directors to take any action under
this Agreement or any other agreement contemplated herein and to make any
decision pursuant to the authority prescribed herein or therein so long as such
action or decision is reasonably believed by them to be consistent with the
overall purposes of the Company; provided, however, that the foregoing shall not
be deemed to limit the liability of the Members and Directors for an act or
omission which constitutes gross negligence or willful
misconduct.
Section
9.03. Savings
Clause. If
this Article IX or any portion hereof shall be invalidated on any ground by any
court of competent jurisdiction, then the Company shall nevertheless indemnify
and hold harmless each Director or any other Person indemnified pursuant to this
Article IX as to costs, charges and expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement with respect to any action, suit
or proceeding, whether civil, criminal, administrative or investigative to the
full extent permitted by any applicable portion of this Article IX that shall
not have been invalidated and to the fullest extent permitted by applicable
law.
Section
9.04. Confidentiality
. (a) The
Members shall, and shall direct their directors, officers, constituent partners,
employees, attorneys, accountants, advisers and representatives that have access
to confidential or proprietary information of the Company or its business to,
keep confidential and not disclose any such confidential or proprietary
information of the Company or its business to any other Person without the
express consent of the Company, unless such disclosure shall be required by
applicable law, governmental rule or regulation, court order or administrative
proceeding,
provided that, after putting in place appropriate confidentiality
limitations with relevant third parties, each Member shall be permitted to
disclose such information as it reasonably deems necessary in connection with a
transaction or proposed transaction contemplated by Article XI. The
Members shall also comply with the terms of any confidentiality agreements
entered into by the Company with any third party to the extent any such Person
receives or has access to information provided by such third party pursuant to
the terms of any such agreement.
(b) The
agreement contained in this Section
9.04 shall survive the withdrawal of any Member or any termination or
dissolution of the Company.
ARTICLE
X
TAXES
Section
10.01. Tax
Returns. The
Board of Directors shall cause to be prepared and filed on a timely basis all
necessary federal, state and foreign tax returns for the Company, including the
elections described in Section 10.02. At least 30 days prior to the
date that any such tax return is due, the Board of Directors shall provide a
copy to each Member for his review and comment, and shall incorporate any
comments reasonably proposed by any Member. Each Member shall furnish
to the Board of Directors all information reasonably requested by the Board of
Directors which is necessary to enable the Company’s income tax returns to be
prepared and filed.
Section
10.02. Tax
Elections. The
Company shall make the following elections on the appropriate tax
returns:
(a) to adopt
the calendar year as the Company’s fiscal year;
(b) with the
consent and approval of Members holding the Required Percentage of Units, to
adopt such methods of accounting as are required by the Code or, if more than
one method is permitted by the Code, to adopt such method or methods as the
Board of Directors determines to be in the best interest of all of the
Members;
(c) if a
distribution of Company property as described in section 734 of the Code
occurs or if a transfer of a Unit as described in section 743 of the Code
occurs, on written request of any Member, to elect, pursuant to section 754
of the Code, to adjust the basis of Company
properties;
(d) to elect
to amortize the organizational expenses of the Company and the startup
expenditures of the Company ratably over the period permitted by
sections 195 and 709(b) of the Code; and
(e) with the
consent and approval of Members holding the Required Percentage of Units, any
other election the Board of Directors may deem appropriate and in the best
interests of all of the Members.
Neither
the Company nor any Director or Member may make an election for the Company to
be excluded from the application of the provisions of subchapter K of
chapter 1 of subtitle A of the Code or any similar provisions of applicable
state law, and no provision of this Agreement (including, without limitation,
Section 2.08) shall be construed to sanction or approve such an
election.
Section
10.03. Tax
Matters Partner. The
“tax matters partner” of the Company pursuant to section 6231(a)(7) of the Code
shall be designated by the Board of Directors. The tax matters
partner shall inform each Member of all significant matters that may come to its
attention in its capacity as tax matters partner by giving notice thereof on or
before the fifth Business Day after becoming aware thereof and, within that
time, shall forward to each Member copies of all significant written
communications it may receive in that capacity. The tax matters
partner shall consult with Members in connection with any action contemplated by
Section 6222 through 6232 and shall take endeavor to take actions which are in
the best interest of all of the Members in connection therewith.
ARTICLE
XI
DISPOSITION
OF UNITS
Section
11.01. Restrictions
on Disposition. (a) No
Member shall Dispose of Units or interests therein (other than (i) to an
Affiliate of such Member who shall become a Member in accordance with the
provisions of this Agreement or (ii) to the Solicitation Agent under the
Placement Agent Agreement, dated as of June 23, 2008, between the Company and
▇▇▇▇▇▇ Asset Management, LLC, who shall become a Member in accordance with the
provisions of this Agreement), (b) ▇▇▇▇ ▇▇▇▇▇▇ shall not Dispose of his
membership interests in Founder LLC, in whole or in part, (c) ▇▇▇▇ ▇▇▇▇▇▇ shall
hold 100% of the equity interests in Founder LLC and (d) Founder LLC shall not
issue any additional equity interests, in all cases except for estate planning
purposes (as defined below), until the earlier of (A) the satisfaction of all
payments required to be made by ▇▇▇▇.▇▇▇ under the Purchase and Contribution
Agreement and (B) October 31, 2011. Thereafter, any Disposition of
Units shall be subject to Section 11.05, Section 11.06 and Section
11.07. Notwithstanding anything to the contrary contained herein, no
Member may Dispose of all or any portion of its Units if such Disposition would
cause the Company to lose its status as a partnership for federal income tax
purposes. For purposes of this Section 11.01, “estate planning
purposes” shall mean Dispositions or issuances, as the case may be, with respect
to a particular Member, to
such
Member’s
spouse,
child (natural or adopted), or any other direct lineal descendant or sibling
thereof (or
such Member’s
spouse) (all of the foregoing collectively referred to as “family
members”),
or any custodian or trustee of any trust, partnership or limited
liability
company (or similar vehicle) for the benefit of, or the ownership interests of
which are owned wholly by, such
Member
or any such family members; provided,
that such
Member shall
deliver prior written notice to the Company of such transfer and such
interest
shall at all times remain subject to the terms and restrictions set forth in
this Agreement and such transferee shall, as a condition
to such issuance, deliver an agreement
confirming
that such transferee shall be bound by all the terms and conditions
of this Agreement as such
Member, (but
only with respect to the securities so transferred
to the transferee), without such transferee being admitted as a Member of the
Company; and
provided,
further,
that
in
the case of any such Disposition,
such Disposition
is
made pursuant to a transaction in which there is no consideration actually paid
for such Disposition.
Section
11.02. Voidance
of Certain Dispositions. Any
attempted Disposition in violation of this Article XI shall, except for any
liability on the part of a Member who violates or attempts to violate the
restriction contained herein, be void ab
initio.
Section
11.03. Certain
Expenses. Any
Member effecting a Disposition of Units or any interest therein shall pay, or
reimburse the Company for, all costs incurred by the Company in connection with
such Disposition.
Section
11.04. Substituted
Members. A
transferee that has acquired Units or an interest therein as a result of a
Disposition that otherwise is permitted under, and has been approved in the
manner set forth in, the provisions of this Article XI shall be admitted as a
substituted Member; provided,
however, that admission of a transferee as a Member pursuant to this
Section 11.04 shall be effective only after the new member has executed and
delivered to the Company a document, in form and substance satisfactory to the
Company, that (i) sets forth the address for notices of such transferee and (ii)
includes an agreement on the part of such transferee to be bound by the
provisions of this Agreement. Except as provided in the preceding
sentence, no Member shall have the right to substitute a transferee as a Member
in its place. The Company shall have the power to amend this
Agreement as necessary to reflect a Disposition of Units effected in accordance
with this Section 11.04, and such an amendment need be executed only by an
officer of the Company authorized to do so.
Section
11.05. Drag-Along
Rights. (a) Subject
to Section 11.01 and Section 11.07, if, (i) upon the consent and approval of
Members holding the Required Percentage of Units (provided,
however,
that if ▇▇▇▇.▇▇▇ is in default under the Purchase and Contribution Agreement,
none of the Units held by ▇▇▇▇.▇▇▇ shall be counted towards the calculation of
the Required Percentage) and (ii) after the earlier of (A) the date as of which
the Company’s assets under management exceeds $500,000,000 and (B) October 31,
2011, the Company accepts a bona fide proposal from a Person that is not an
Affiliate of any Member to purchase all, but not less than all, of the Units
outstanding, whether by way of merger, consolidation, sale of Units or
assets, or otherwise (each, a “Required
Sale”), the Company shall give written notice (the “Required
Sale Notice”) to all other Members at least 30 days prior to the closing
of such Required Sale. The Required Sale Notice shall describe in
reasonable detail the terms of the Required Sale and the identity of the Persons
involved in the Required Sale (collectively, the “Required
Sale Transferee”).
(b) If
in the Required Sale Notice the Company requires all Members to participate in
the Required Sale (the “Drag-Along
Election”), upon delivery of the Required Sale Notice, each Member shall
be obligated to sell all, but not less than all, of the Units held by such
Member to the Required Sale Transferee on the same terms and conditions
specified in the Required Sale Notice, to vote their interests in favor of the
Required Sale at any meeting of the Members called to vote on or approve the
Required Sale and/or consent in writing to the Required Sale, to waive
all
dissenters’ or appraisal rights in connection with the Required Sale, to enter
into agreements of sale or merger agreements relating to the Required Sale, to
agree (as to itself) to make to the Required Sale Transferee representations,
warranties, covenants, indemnities and agreements in connection with the
Required Sale, and otherwise to take all actions reasonably necessary or
desirable to cause the Company and the Members to consummate the Required
Sale. Any terms of such Required Sale may be amended from time to
time (so long as they continue to comply with this Section 11.05, and subject to
the continuing requirements of Section 11.07), and any such Required Sale Notice
may be rescinded. The Company shall give prompt written notice of any
such amendment, modification or rescission to all Members. The
obligations of the Members pursuant to this Section 11.05 are in all respects
subject to the satisfaction of the following conditions:
(i) each
Member shall receive the same proportion of the aggregate consideration from
such Required Sale that such Member would have received if such aggregate
consideration had been distributed by the Company to the Members in complete
liquidation pursuant to Article XIII;
(ii) no Member
shall be obligated to make any out-of-pocket expenditure prior to the
consummation of the Required Sale (excluding modest expenditures for postage,
copies, etc.), and no Member shall be obligated to pay more than its pro rata
share (based upon the amount of consideration received) of reasonable expenses
incurred in connection with a consummation of the Required Sale to the extent
such costs are incurred for the benefit of all Members and are not otherwise
paid by the Company or the Required Sale Transferee (costs incurred by or on
behalf of a Member for its sole benefit will not be considered costs of the
transaction hereunder), provided,
that a Member’s liability for such expenses shall not exceed the total purchase
price received by such Member for its Units; and
(iii) in the
event that the Members are required to provide any representations or
indemnities in connection with the Required Sale (other than representations and
indemnities concerning each Member’s valid ownership of its Units, free of all
liens and encumbrances (other than those arising under applicable securities
laws), and each Member’s authority, power, and right to enter into and
consummate such purchase or merger agreement without violating any other
agreement), then each Member shall not be liable for more than its pro rata
share (based upon the amount of consideration received) of any liability for
misrepresentation or indemnity, and such liability shall not exceed the total
purchase price received by such Member for its Units, after taxes and expenses,
and such liability shall be satisfied solely out of any funds escrowed for such
purpose.
Section
11.06. Tag-Along
Rights. (a) With
respect to any proposed Disposition permitted by this Article XI (other than to
an Affiliate, pursuant to a Required Sale or following a Qualified Public
Offering) (a “Proposed
Sale”) by any Member (each, a “Selling
Member”), and subject to Section 11.07, each Member who is not a Selling
Member (each, a “Non-Selling
Member”) who exercises its rights under this Section 15.05(a) (a “Tagging
Member”) shall have the right (the “Tag-Along
Right”) to require the proposed transferee (the “Proposed
Transferee”) to purchase from such Tagging Member its proportional shares
of the Units to be sold to the
Proposed
Transferee on identical terms (including, without limitation, time of payment
and form of consideration) as those given to the Selling Member. A
Tagging Member’s proportional share of the Units to be sold to the Proposed
Transferee shall equal the product of (i) the number of Units held by such
Tagging Member divided by the aggregate number of Units held by the Selling
Member and all Tagging Members (including the applicable Tagging Member)
participating in such Disposition multiplied by (ii) the aggregate number of
Units to be sold to the Proposed Transferee in such Disposition. In
order to be entitled to exercise its Tag-Along Right pursuant to this Section
11.06, each Tagging Member must agree (as to itself) to make to the Proposed
Transferee the same representations, warranties, covenants, indemnities and
agreements as the Selling Member agrees to make in connection with the Proposed
Sale; provided,
further that (i) in no event shall a Tagging Member be required to make
representations and warranties or provide indemnities as to any other Tagging
Members or the Selling Member (other than Affiliates of such Tagging Member) and
(ii) no Tagging Member shall be liable for more than its pro rata share (based
upon the amount of consideration received) of any liability for
misrepresentation or indemnity, and such liability shall not exceed the total
purchase price received by such Tagging Member for its Units, after taxes and
expenses, and such liability shall be satisfied solely out of any funds escrowed
for such purpose.
(b) The
Selling Member will give notice to each Non-Selling Member of each Proposed Sale
not later than ten (10) Business Days after the execution of the definitive
agreement relating to the Proposed Sale, setting forth the number of Units
proposed to be so Disposed of, the name and address of the Proposed Transferee,
the names of any significant Affiliates of the Proposed Transferee, the proposed
amount and form of consideration (and if such consideration consists in part or
in whole of property other than cash, the Selling Member will provide such
information, to the extent reasonably available to the Selling Member, relating
to such non-cash consideration as the Non-Selling Member may reasonably request
in order to evaluate such non-cash consideration) and other terms and conditions
of payment offered by the Proposed Transferee. The Selling Member
will deliver or cause to be delivered to each Tagging Member copies of all
transaction documents relating to the Proposed Sale as the same become
available. The Tag-Along Rights provided by this Section 11.06 must
be exercised by the Non-Selling Members within 15 Business Days following
effectiveness pursuant to Section 14.01 of the notice required by the preceding
sentence by delivery of a written notice to the Selling Member indicating its
desire to exercise its rights and specifying the number of Units it desires to
Dispose of.
(c) If
any Tagging Member exercises its rights under this Section 11.06, the closing of
the purchase of the Units with respect to which such rights have been exercised
will take place concurrently with the closing of the sale of the Selling
Member’s Units to the Proposed Transferee.
Section
11.07. Right
of First Offer. (a) Subject
to Section 11.01, no Member may Dispose of any of its Units without first
offering to sell such Units to the other Members pursuant to the provisions of
this Section 11.07. Any Member wishing to Dispose of all or any of
its Units (the “Offeror”)
shall deliver a written notice (an “Offer
Notice”) to all other Members (collectively, the “Offeree”)
not less than 60 days prior to offering, or soliciting offers for, its Units
from any Person.
The Offer
Notice shall describe in reasonable detail the number of Units being offered,
the cash purchase price requested and such other information of the proposed
Disposition that a reasonable buyer would require. Upon receipt of an
Offer Notice from the Offeror, each Offeree shall have the right to purchase all
of the Units being offered pursuant to this Section 11.07 and the Offeror agrees
not to sell such Units prior to the earlier of (a) the expiration of the Offer
Notice Period (as defined below), or (b) the communication to the Offeror of the
decision by the Offeree not to purchase any or all of such
Units.
(b) No
later than 30 days after the date of the effectiveness pursuant to Section 14.01
of the Offer Notice (the “Offer
Notice Period”), the Offeree must notify the Offeror of its decision with
respect to the offer set forth in the Offer Notice.
(c) If
the option set forth in Section 11.07(a) is exercised by any Offeree, then such
Offeree shall arrange with the Offeror a mutually convenient time (not later
than 90 days after the date of the Offer Notice) to consummate such purchase and
sale and, at that time, shall pay to the Offeror cash consideration for the
Units subject to such purchase and sale, by delivering a certified bank check or
checks or by wiring same day funds upon the instructions of the Offeror in the
amount of the purchase price for such Units against delivery to such Offeree by
the Offeror of such Units. If the option set forth in Section
11.07(a) is exercised by an Offeree who then defaults on its obligation to
purchase, without limiting any rights the Offeror may have, the Offeree shall
lose any further rights pursuant to this Section 11.07. If the option
set forth in Section 11.07(a) is exercised by more than one Member, then each
participating Member shall be entitled to purchase its pro rata share
(determined by reference to the ratio of Units held by such Member to the
aggregate number of Units held by all participating Members) of the Units
subject to the Offer Notice.
(d) If,
at the end of the Offer Notice Period, no Offeree has exercised the right of
first offer for all of the Units described in the Offer Notice in the manner set
forth above, the Offeror may, during the next succeeding 180 days or, if
applicable, within ten (10) Business Days after all required regulatory consents
have become final, sell such Units not purchased by the Offeree on terms no more
favorable to the transferee(s) thereof than those specified in the Offer Notice
(any such proposed sale a “Proposed
Third Party Sale”); provided,
that in the event that the per Unit price in a Proposed Third Party Sale is less
than 90% of the price per Unit specified in the Offer Notice, then the Offeror
must, prior to consummating such Proposed Third Party Sale, re-offer the
applicable Units to the other Members at such reduced price, which offer may be
accepted by the Offerees only within five (5) Business Days in the manner
specified above. For purposes of comparing the per Unit price
in a Proposed Third Party Sale with the per Unit price specified in the Offer
Notice, any non-cash consideration included in such Proposed Third Party Sale
shall be valued at fair market value as of the time of any agreement with
respect to such Proposed Third Party Sale, as reasonably determined by the
Offeror in good faith. Promptly after such sale, (i) the Offeror
shall notify the Company of the consummation thereof and shall furnish such
evidence of the completion and time of completion of such sale and of the terms
thereof as may reasonably be requested by the Company and, thereafter, (ii) the
Company shall deliver notices to the Offeror and the transferee who has
purchased such Units of the registration of the transfer of such
Units. If, at the end of the 180-day period or, if applicable, the
ten (10) Business Day period following regulatory consent, referred to in this
Section 11.07(d), the Offeror has not completed the sale of such Units as
aforesaid, all the restrictions on transfer contained herein, including this
Section 11.07, shall again be in effect with respect to such Units.
Section
11.08. Termination
of Restrictions on Disposition.
Notwithstanding
anything to the contrary contained herein, the restrictions on Disposition
contained in Section 11.01, Section 11.05, Section 11.06 and Section 11.07 shall
terminate upon the Company’s consummation of a Qualified Public
Offering.
Section
11.09. Allocations
Between Transferor and Transferee.
If any
Disposition of a Unit occurs during a fiscal year, Article VI shall be applied
to the assignor and assignee on the basis of an interim closing of the books of
the Company as of the date of such Disposition.
ARTICLE
XII
BOOKS,
RECORDS AND ACCOUNTING
Section
12.01. Books
and Records. The
Board of Directors of the Company shall keep or cause to be kept at the
principal office of the Company complete and accurate books and records of
account, including such records as are required to be maintained by the Company
at its principal office under section 18-305(a) of the Act. Pursuant
to section 18-305(d) of the Act, any records maintained by the Company in the
regular course of its business may be maintained in other than a written form,
provided,
however, that the records so kept shall be convertible into written form
within a reasonable period of time.
Section
12.02. Fiscal
Year. The
fiscal year of the Company shall be the calendar year.
Section
12.03. Books
of Account; Tax Return.
The
Company shall prepare and file on a timely basis all federal, state, local and
foreign income and other tax returns required to be filed by the
Company. The Company shall also keep or cause to be kept complete and
appropriate records and books of account in which shall be entered all such
transactions and other matters relative to the Company’s operations, business
and affairs as are usually entered into records and books of account maintained
by Persons engaged in businesses of like character or which are required by the
Act. Except as otherwise expressly provided herein, such books and
records shall be maintained utilizing the accrual method of accounting in
accordance with generally accepted accounting principles. Within 75
days of the end of each fiscal year, the Company shall provide each Member with
the Company’s Form 1065, a Schedule K-1 for such fiscal year and such other
United States federal and state income tax reporting information, if any, as is
required by law.
ARTICLE
XIII
DISSOLUTION,
LIQUIDATION AND TERMINATION
Section
13.01. Dissolution. The
Company shall dissolve and its affairs shall be wound up on the first to occur
of the following:
(a) the
execution of a written consent to dissolution by Members holding the Required
Percentage of Units; and
(b) entry of
a decree of judicial dissolution of the Company under section 18-802 of the
Act.
Notwithstanding
anything to the contrary in this Article XIII, if the Company shall be dissolved
by written consent pursuant to paragraph (a) above and the aforementioned
written consent so provides, the liquidation of the Company, the winding up of
its affairs and the distribution of its assets shall be effected in accordance
with the terms and provisions of a plan of liquidation adopted by the Board of
Directors (a “Plan
of Liquidation”) and the applicable provisions of the Act; provided,
however, that the terms of any such Plan of Liquidation shall not alter
the priorities in which the assets of the Company are to be distributed to the
Members in accordance with 13.02(d). A Plan of Liquidation adopted
pursuant to this Section 13.01 may provide for (i) the appointment of the Person
or Persons that are to act as liquidators, who may be the Board of Directors,
(ii) the terms and conditions upon which the assets of the Company are to be
sold, transferred or otherwise disposed of, including the price or range of
prices at which specific assets are to be sold, transferred or otherwise
disposed of or the method by which such prices are to be determined and the
Person or Persons to which such assets are to be sold, transferred or otherwise
disposed of (which may, subject to Section 7.02(i), include one or more Members
or their Affiliates), (iii) the manner in which the business of the Company will
be conducted until its affairs have been completely wound up, (iv) the manner in
which the Company will pay or provide for the payment of its debts, liabilities
and obligations and any known or unknown claims against the Company, (v) the
manner, form and timing of distributions to the Members, including any
procedures or conditions that must be complied with by the Members in order to
receive distributions (which may include execution of a letter of transmittal
containing such terms and provisions as shall be determined by the Board of
Directors in its sole discretion and surrender by the Members of the
certificates evidencing any Units held by them) and whether distributions will
be made in cash or in kind, or both, and (vi) such other matters as the Board of
Directors shall determine are necessary or appropriate in connection with the
liquidation of the Company, the winding up of its affairs and the distribution
of its assets.
Section
13.02. Liquidation
and Termination. If
the Company has been dissolved in accordance with Section 13.01, the liquidation
of the Company, the winding up of its affairs and the distribution of its assets
shall be effected (i) if a Plan of Liquidation has been adopted in accordance
with Section 13.01, in the manner provided in the Plan of Liquidation and (ii)
if no such Plan of Liquidation has been adopted, in the manner determined by the
liquidators in accordance with the provisions of this Section
13.02. On dissolution of the Company, the Board of Directors shall
act as liquidators. The liquidators shall proceed diligently to wind
up the affairs of the Company and make final distributions as provided herein
and in the Act. The costs of liquidation shall be borne as a Company
expense. Until final distribution, the liquidators shall continue to
operate the Company properties with all of the power and authority of the Board
of Directors. The steps to be accomplished by the liquidators are as
follows:
(a) as
promptly as possible after dissolution and again after final liquidation, the
liquidators shall cause a proper accounting to be made of the Company’s assets,
liabilities and operations through the last day of the calendar month in which
the dissolution occurs or the final liquidation is completed, as
applicable;
(b) to
the extent required by the Act, the liquidators shall cause notice to be mailed
to each known creditor of and claimant against the Company;
(c) the
liquidators shall cause the Company to (i) pay or make reasonable provision for
all claims and obligations, including all contingent, conditional or unmatured
contractual claims, known to the Company, (ii) make such provision as will be
reasonably likely to be sufficient to provide compensation for any claim against
the Company which is the subject of a pending action, suit or proceeding to
which the Company is a party and (iii) make such provision as will be reasonably
likely to be sufficient to provide compensation for claims that have not been
made known to the Company or that have not arisen but that, based on the facts
known to the Company, are likely to arise or to become known to the Company
within ten years after the date of dissolution, in each case as and to the
extent required by section 18-804 of the Act; and
(d) all
remaining assets of the Company shall be distributed to the Members as
follows:
(i) the
liquidators may sell any or all Company property, including, subject to Section
7.02(i), to Members, and any resulting gain or loss from each sale shall be
computed and allocated to the Capital Accounts of the
Members;
(ii) with
respect to all Company property that has not been sold, the fair market value of
that property shall be determined and the Capital Accounts of the Members shall
be adjusted to reflect the manner in which the unrealized income, gain, loss,
and deduction inherent in property that has not been reflected in the Capital
Accounts previously would be allocated among the Members if there were a taxable
disposition of that property for the fair market value of that property on the
date of distribution; and
(iii) Company
property shall be distributed among the Members in the same manner as set forth
in Section 6.05. The foregoing distributions shall be made by the end
of such taxable year (or, if later, 90 days after the date of the
liquidation).
All
distributions in kind to the Members shall be made subject to the liability of
each distributee for costs, expenses, and liabilities theretofore incurred or
for which the Company has committed prior to the date of termination and those
costs, expenses, and liabilities shall be allocated to the distributee pursuant
to this Section 13.02. The distribution of cash or property to a
Member in accordance with the provisions of this Section 13.02 constitutes a
complete return to the Member of its capital contributions and a complete
distribution to the Member in respect of its Units and all the Company’s
property and constitutes a compromise to which all Members have consented within
the meaning of section 18-502(b) of the Act. To the extent that a
Member returns funds to the Company, it has no claim against any other Member
for those funds.
Section
13.03. Deficit
Capital Accounts. Notwithstanding
anything to the contrary contained in this Agreement, and notwithstanding any
custom or rule of law to the contrary, to the extent that the deficit, if any,
in the Capital Account of any Member results from or is attributable to
deductions and losses of the Company (including non-cash items such as
depreciation), or distributions of money pursuant to this Agreement to all
Members in proportion to the number of Units held by them, upon dissolution of
the Company such deficit shall not be an asset of the Company and such Members
shall not be obligated to contribute such amount to the Company to bring the
balance of such Member’s Capital Account to zero.
Section
13.04. Certificate
of Cancellation. On
completion of the distribution of Company assets as provided herein, the Board
of Directors (or such other Person or Persons as the Act may require or permit)
shall file a Certificate of Cancellation with the Secretary of State of the
State of Delaware, cancel any other filings made pursuant to Section 2.06 and
take such other actions as may be necessary to terminate the existence of the
Company.
ARTICLE
XIV
MISCELLANEOUS
Section
14.01. Notices. Except
as expressly set forth to the contrary in this Agreement, all notices, requests
or consents provided for or permitted to be given under this Agreement must be
in writing and must be given either by depositing that writing in the United
States mail, addressed to the recipient, with postage paid thereon, and
registered or certified with return receipt requested or by delivering that
writing to the recipient in person, by courier or by facsimile
transmission. A notice, request or consent given under this Agreement
is deemed given upon receipt, if delivered in person, five (5) Business Days
after being mailed or on the first Business Day after being sent by nationally
recognized overnight courier or by facsimile transmission. All
notices, requests and consents to be sent to a Member must be sent to or made at
the addresses set forth opposite such Member’s name on Exhibit
A attached hereto or such other address as that Member may specify by
notice to the Company. Any notice, request or consent to the Company
or the Board of Directors must be given to the Board of Directors at the
addresses of Founder LLC and ▇▇▇▇.▇▇▇ set forth on Exhibit
A, until such time as such address is changed by agreement of Founder LLC
and ▇▇▇▇.▇▇▇. Whenever any notice is required to be given by law or
this Agreement, a written waiver thereof, signed by the Person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
Section
14.02. Adjustments
to Number of Units. All
number of Units specified in this Agreement shall be appropriately adjusted for
any Unit split, distribution, recapitalization, conversion or other change
affecting the Company’s outstanding Units.
Section
14.03. Entire
Agreement. Except
as otherwise provided herein or in the Purchase and Contribution Agreement, this
Agreement constitutes the entire agreement of the Members relating to affairs of
the Company and the conduct of its business and supersedes all prior contracts
or agreements with respect to the Company, whether oral or
written.
Section
14.04. Effect
of Waiver or Consent. A
waiver or consent, express or implied, to or of any breach or default by any
Person in the performance by that Person of its obligations with respect to the
Company is not a consent or waiver to or of any other breach or default in the
performance by that Person of the same or any other obligations of that Person
with respect to the Company. Failure on the part of a Person to
complain of any act of any Person or to declare any Person in default with
respect to the Company, irrespective of how long that failure continues, does
not constitute a waiver by that Person of its rights with respect to that
default.
Section
14.05. Amendment
or Modification.
Subject in
all respects to Section 3.05 and Section 7.02(e), this Agreement generally may
be modified or amended only with the written consent of the Board of Directors
and the consent and approval of Members holding the Required Percentage
of Units; provided,
however, that:
(a) The
Board of Directors shall have the power, without the consent of the Members, to
amend this Agreement as may be required to reflect the admission, substitution,
termination, or withdrawal of Members in accordance with this
Agreement;
(b) Subject
to subsections (c) through (f) below, the Board of Directors shall have the
power to amend this Agreement as may be required to (i) reflect any change that
does not adversely affect any Member and (ii) cure any ambiguity, correct or
supplement any provision in this Agreement not inconsistent with the law or with
other provisions, or make other changes with respect to matters arising under
this Agreement that will not be inconsistent with the Act or with the provisions
of this Agreement;
(c) If
any such amendment would cause the dissolution of the Company prior to the time
set forth in Section 13.01, this Agreement shall not be amended without the
consent of each Member;
(d) No
amendment that would cause the Company to fail to be treated as a limited
liability company for state law purposes or change the limited liability status
of any Member or that would change the participation of any Member in the
income, gain, loss, deductions, expenses, credits, capital or distributions of
the Company or that would otherwise adversely affect in any respect the
financial or economic terms to which a Member is entitled prior to the approval
of the proposed amendment may be made without the written consent of such Member
(except for amendments to admit Members pursuant to the terms of this
Agreement);
(e) No
amendment that would cause the Company to fail to be treated as a partnership
for federal income tax purposes may be made without the consent of all Members;
and
(f) No
amendment shall be made to change the level of Units ownership required for any
consents required hereunder to the taking of any action, unless such amendment
is approved by the Members holding an aggregate number of Units in the Company
equal to or in excess of the required amount.
Section
14.06. Binding
Effect. Subject
to the restrictions on Dispositions set forth in this Agreement, this Agreement
is binding on and inures to the benefit of the Members and their respective
heirs, legal representatives, successors, and assigns. No party may
assign this Agreement or any of its rights hereunder to any Person (other than a
transferee of Units previously owned or held by such party that acquired the
same in compliance with the provisions of this Agreement) without the prior
written consent of each of the other parties hereto.
Section
14.07. Governing
Law; Severability. THIS
AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REGARD TO ANY CONFLICT OF LAWS RULE OR PRINCIPLE
THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW
OF ANOTHER JURISDICTION. In the event of a direct conflict between
the provisions of this Agreement and (a) any provision of the Certificate or (b)
any mandatory provision of the Act or (to the extent such statutes are
incorporated into the Act) the Delaware General Corporation Law or the Delaware
Code, the applicable provision of the Certificate, the Act, the Delaware General
Corporation Law or the Delaware Code, as the case may be, shall
control. If any provision of this Agreement or the application
thereof to any Person or circumstance is held invalid or unenforceable to any
extent, the remainder of this Agreement and the application of that provision to
other Persons or circumstances is not affected thereby and that provision shall
be enforced to the greatest extent permitted by law.
Section
14.08. Further
Assurances. In
connection with this Agreement and the transactions contemplated hereby, each
Member shall execute and deliver such additional documents and instruments and
perform such additional acts that may be necessary or appropriate to effectuate
and perform the provisions of this Agreement and those
transactions.
Section
14.09. Counterparts. This
Agreement may be executed in any number of counterparts with the same effect as
if all signing parties had signed the same document. All counterparts
shall be construed together and constitute the same
instrument.
Section
14.10. Construction. Whenever
the context requires, the gender of all words used in this Agreement includes
the masculine, feminine, and neuter. All references to Articles and
Sections refer to articles and sections of this Agreement.
Section
14.11. No
Third Party Beneficiary.
This
Agreement is made solely and specifically among and for the benefit of the
parties hereto, and their respective successors and assigns (except that the
provisions of Section 9.01 shall inure to the benefit of each of the
Indemnitees), and no other Person (except to the extent provided in the
immediately preceding parenthetical) shall have any rights, interest or claims
hereunder or be entitled to any benefits under or on account of this Agreement
as a third party beneficiary or otherwise. No third party, including
any creditor of the Company, shall have any right to enforce any contribution of
capital or other advance of funds by any Member.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the Members have executed this Agreement as of the day and year
first above written.
▇▇▇▇▇▇
▇▇▇▇ Group, LLC
By: /ss/
▇▇▇▇
▇▇▇▇▇▇
Name: ▇▇▇▇
▇▇▇▇▇▇
Title: Managing
Member
▇▇▇▇.▇▇▇
Inc.
By: /ss/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Title: Chief
Executive Officer
Exhibit
A
Capital
Contributions and Number of Units
|
Name
of Member
|
Address
|
Number
of
Units
|
Capital
Contribution
|
Capital
Account
Balances
|
|
▇▇▇▇▇▇
▇▇▇▇ Group, LLC
|
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
4,000,000
|
$10,000
|
$2,666,667
|
|
▇▇▇▇.▇▇▇
Inc.
|
▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇
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With
a copy to:
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Pillsbury
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Fax:
212.298-9931
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6,000,000
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$275,000
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$4,000,000
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