OPERATING AGREEMENT
OF
COWBOY ASPHALT TERMINAL, L.L.C.
THIS OPERATING AGREEMENT of COWBOY ASPHALT TERMINAL, L.L.C. (this
"Agreement"), is made and entered into effective as of the 12th day of February
1999, by and among CROWN ASPHALT PRODUCTS COMPANY, a Utah corporation ("Capco"),
and FORELAND ASPHALT CORPORATION, a Utah corporation ("Foreco") (collectively
referred to herein as the "Members").
RECITALS
A. The parties desire to engage in the business of acquiring, holding,
managing, and operating an asphalt terminal.
B. On or about June 16, 1998, Articles of Organization were filed with
the Division of Corporations and Commercial Code of the Department of Commerce,
state of Utah, to form Cowboy Asphalt Terminal, L.L.C. (the "Company").
C. It is the intent of the parties that additional improvements for the
joint use of the parties will be made by the Company to that portion of the
Property (as defined below) that is designated for the joint use of the parties,
in which case the parties will share in the cost and expense of such
improvements in proportion with their Ownership Percentages (as defined below)
and will receive an increase in each such party's Capital Account in the amount
paid by such party. Further, upon the mutual agreement of the parties, each
party may erect and install equipment and other improvements, as such party's
sole and separate property and at its sole cost and expense, on that portion of
the Property that is designated for such Party's exclusive use, in which case
the cost and expense of such improvements shall not be treated as Capital
Contributions and such improvements will be owned by the party bearing the cost
thereof and not by the Company.
D. The parties hereto desire to provide for the regulation and management
of the affairs of the Company.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
ARTICLE I
DEFINED TERMS
When used in this Agreement, the following terms shall have the meanings
set forth below:
1.1 "Act" shall mean the Utah Limited Liability Company Act, as amended or
revised from time to time.
1.2 "Affiliate" of a Person shall mean a Person, directly or indirectly,
through one or more intermediaries, controlling, controlled by, or under common
control with the Person in question. The term "control," as used in the
immediately preceding sentence, means, respecting a Person that is a
corporation, the right to exercise, directly or indirectly, more than 50% of the
voting rights attributable to the shares of the controlled corporation, and,
respecting a Person that is not a corporation, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of the controlled Person.
1.3 "Agreement" shall mean this Operating Agreement of Cowboy Asphalt
Terminal, L.L.C., as originally executed and as amended from time to time.
Words such as "herein," "hereinafter," "hereof," "hereto," "hereby," and
"hereunder," when used with reference to this Agreement, refer to this Agreement
as a whole, unless the context otherwise requires.
1.4 "Available Cash" of the Company shall mean all cash funds of the
Company on hand from time to time (including cash funds obtained as
contributions to the capital of the Company by the Members, loans to the
Company, and net proceeds from Capital Transactions, but excluding cash funds
obtained from Terminating Transactions) after (i) payment of all expenses of the
Company as of such time, including all costs, expenses, or charges respecting
the ownership, operation, development, maintenance, and upkeep of the Company
property, including ad valorem taxes, debt amortization (including interest
payments), advertising expenses, professional fees, wages, and utility costs,
(ii) provision for payment of all outstanding and unpaid current obligations of
the Company as of such time, and (iii) provision for an adequate working capital
reserve as determined by the Manager to be reasonably necessary for operations
of the business of the Company.
1.5 "Capital Account" shall have the meaning set forth in Section 3.3(a).
1.6 "Capital Transaction" shall mean a transaction (i) pursuant to which
the Company borrows funds, (ii) pursuant to which part of the assets of the
Company are sold, condemned, exchanged, abandoned or otherwise disposed of,
(iii) pursuant to which insurance proceeds or other damages are recovered by the
Company in respect of a capital asset of the Company (and, not for such items as
business interruption or similar items), or (iv) that, in accordance with
generally accepted accounting principles, is otherwise considered capital in
nature.
1.7 "Code" shall mean the Internal Revenue Code of 1986, as amended (or
any corresponding provision or provisions of succeeding law).
1.8 "Company" shall mean the limited liability company operated pursuant
to the terms hereof for the limited purposes and scope set forth herein.
1.9 "Fiscal Year" of the Company shall mean the calendar year.
1.10 "Liquidation" of a Member's interest shall mean and shall be deemed to
occur upon the earlier of (i) the date upon which the Company is terminated
under section 708(b)(1) of the Code; (ii) the date upon which the Company ceases
to be a going concern (even though it may continue in existence for the limited
purpose of winding up its affairs, paying its debts, and distributing any
remaining Company assets to the Members); or (iii) the date upon which there is
a liquidation of the Member's interest (but the Company is not terminated) under
section 1.761-1(d) of the Regulations.
1.11 "Manager" shall mean the Person designated pursuant to Section 5.3 to
manage and operate the business of the Company.
1.12 "Members" shall mean the parties to this Agreement and such other
persons or entities that are admitted to the Company as additional or
substituted Members. Reference to a "Member" shall mean any one of the Members.
1.13 "Net Income or Loss" of the Company for any Fiscal Year (or portion
thereof) shall mean the excess or deficit, as the case may be, of (i) the gross
income of the Company derived from Operations as calculated under federal income
tax accounting principles for such Fiscal Year over (ii) all items of expense
[incurred, in case the Company selects the accrual method of accounting for tax
purposes, or paid, in the case the Company selects the cash method of accounting
for tax purposes,] by the Company respecting Operations during such Fiscal Year
which are allowable as deductions under federal income tax accounting principles
and depreciation, cost recovery or other amortization deduction allowable to the
Company for federal income tax purposes respecting any Company asset for such
Fiscal Year.
1.14 "Operations" shall mean revenue producing activities of the Company
other than (a) activities relating to Capital Transactions; or (b) activities
conducted separately by either Capco or Foreland. It is contemplated that
Operations shall be limited to ownership of the Property and the leasing of tank
capacity as the Members shall agree.
1.15 "Ownership Percentage" means, respecting each Member, the product of
(a) 100%, multiplied by (b) a fraction, the numerator of which shall be the
number of Units held by such Member and the denominator of which shall be the
total number of Units outstanding at that time.
1.16 "Person" shall mean any individual, partnership, corporation, trust or
other entity or association.
1.17 "Property" shall mean the Cowboy Asphalt Terminal comprising the real
property located in ▇▇▇▇▇ County, Utah, as more particularly described in
Exhibit "A" attached hereto and incorporated herein by this reference, together
with the buildings, fixtures, and improvements and certain items of personal
property from time-to-time located thereon, excluding improvements to the
Property made pursuant to Section 3.2(d).
1.18 "Regulations" shall mean the regulations promulgated by the United
States Department of the Treasury pursuant to and in respect of provisions of
the Code. All references herein to sections of the Regulations shall include
any corresponding provision or provisions of succeeding, similar, substitute
proposed or final Regulations.
1.19 "Terminating Transaction" shall mean a sale, condemnation, exchange or
other disposition, whether by foreclosure, abandonment, or otherwise, of all or
substantially all of the then remaining assets of the Company which is entered
into in connection with the dissolution, termination and winding up of the
Company or that will result in the dissolution of the Company.
1.20 "Unit" shall mean an interest in the Company consisting of the rights,
covenants, and responsibilities more particularly set forth herein.
ARTICLE II
GENERAL PROVISIONS
2.1 Formation of the Company. The Members previously formed the Company
as a limited liability company pursuant to the provisions of the Act, by filing
Articles of Organization with the Division of Corporations and Commercial Code
of the Department of Commerce, state of Utah, and hereby adopt this Agreement to
provide for the regulation and management of the affairs of the Company.
2.2 Name. The business of the Company shall be conducted under the name
"Cowboy Asphalt Terminal, L.L.C." or such other name that the Members may
select.
2.3 Purposes and Scope. Subject to the provisions of this Agreement, the
Company is formed to acquire, hold, manage, and operate an asphalt receiving,
processing, storage, and handling terminal, to engage in any activity necessary
or convenient to accomplish its purposes and operate its business as set forth
herein as the Members may from time-to-time determine; and to exercise all
powers permitted thereby. This Agreement does not and shall not be construed to
govern any business relationships between the parties other than those specified
in this Agreement.
2.4 Articles of Organization. The Members further agree and obligate
themselves to execute, acknowledge, file, record and/or publish, as necessary,
such amendments to the Articles of Organization as may be required by the terms
hereof or by law and such other certificates and documents as may be appropriate
to comply with the requirements of law for the continuation, preservation,
and/or operation of the Company as a limited liability company.
2.5 Fictitious Name. Concurrently with the execution of this Agreement,
the Company shall make any filings or disclosures required by the laws of the
state of Utah respecting its use of a fictitious name, if any.
2.6 Ownership. The interest of each Member in the Company shall be
personal property for all purposes. All property and interests in property, real
or personal, owned by the Company shall be deemed owned by the Company as an
entity, and no Member, individually, shall have any ownership in any property or
interest in property owned by the Company except as a Member in the Company.
Each of the Members irrevocably waives, during the term of the Company and
during any period of its liquidation following any dissolution, any right that
such Member may have to maintain any action for partition respecting any of the
assets of the Company.
2.7 Membership Certificates. Units of membership interest in the Company
shall be represented by certificates which shall state on their face the name of
the Company and that it is organized under the laws of the state of Utah, the
name of the Member to whom the certificate is issued, and the number and, if
applicable, the class or other designation of the series, if any, the
certificate represents. Each share certificate must be signed by the Manager
and may contain such other information as the Manager or the Members consider
necessary or appropriate. The Company shall maintain a membership ledger
indicating the name, address, certificate serial number, and number of units or
other interests held by each Member from time to time, showing the cancellation
of certificates, as appropriate.
2.8 No Individual Authority. Except as otherwise specifically provided in
this Agreement, no Member, acting alone, shall have any authority to act for, or
to undertake or assume any obligation, debt, duty or responsibility on behalf
of, any other Member or the Company.
2.9 Place of Business. The principal place of business of the Company
shall be at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, or at
such other or additional place or places as the Members shall reasonably
determine.
2.10 Term of the Company. The term of the Company shall continue until
terminated pursuant to the provisions of this Agreement or such other date as
the Members shall select in accordance with the provisions of Section 8.1.
2.11 Registered Agent. The registered agent of the Company shall be ▇▇▇
▇▇▇▇▇▇, whose office address is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
2.12 Registered Office. The registered office of the Company shall be ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
ARTICLE III
CAPITAL CONTRIBUTIONS
3.1 Initial Capital Contributions; Units. In connection with the
formation of the Company, each Member shall be deemed to have contributed to the
capital (the "Capital Contributions") of the Company the approximate amount of
cash paid to ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ R.I.C. through November 30, 1998, respecting the
payments due under that certain amortization schedule regarding the purchase of
the Property, and has been credited with the number of Units, set forth opposite
such Member's name set forth below:
OWNERSHIP
NAME CONTRIBUTION UNITS HELD PERCENTAGES
------------------------------ ------------ ---------- -----------
Crown Asphalt Products Company $174,533 66.67 66.67%
Foreland Asphalt Corporation $87,267 33.33 33.33%
3.2 Additional Contributions.
(a) Each Member shall be obligated to contribute one-half of (i) such
additional amounts as may be required, not to exceed a total of $650,000,
for the Company to fulfill its obligations under such corrective action
plan that may be acceptable to the Company and the Utah Department of
Environmental Quality for environmental management, remediation, and
containment costs of bringing the Property into compliance with applicable
environmental laws respecting conditions existing as of the date of this
Agreement, which such additional contribution shall be paid within ten (10)
days after demand therefor by the Manager; and (ii) such additional amounts
required to cover legal costs incurred in obtaining title to the Property
from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇.▇.▇., or relating to the environmental remediation
work referenced in clause (i).
(b) Each Member shall be obligated to contribute, pro rata in
proportion to its Ownership Percentage, such additional amounts as may be
required for the Company to fulfill its obligations under the following:
(i) the payment of the balance of the purchase price for the
Property as reflected under that certain Memorandum of Closing dated
January 7, 1999, attached hereto as Exhibit "B" for by and between
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇.▇.▇., Inc., and the Company and the special warranty
deed, trust deed note, deed of trust, and other documents to be
executed and delivered in consummation of the transaction contemplated
thereby;
(ii) environmental management and containment costs other than
those described in subparagraph (a) of this Section 3.2, which such
additional contribution shall be paid within ten (10) days after
demand therefor by the Manager;
(iii) the Company's expenses for Operations, which such
additional contribution shall be paid within ten (10) days after
demand therefor by the Manager; and
(iv) the construction of capital improvements to the Property
that, in the judgment of the Manager and, if required in accordance
with the provisions of Section 5.7, the approval of the Members, will
be beneficial to the business interests and for the joint use of both
Members.
(c) Any additional Capital Contributions of a Member shall increase
the Member's Capital Account, but as long as such contributions are made in
proportion to their respective obligations as set forth in subparagraph (a)
and (b) above of this Section 3.2, shall not result in an increase in the
number of Units held by the Members. No Member shall be required to
purchase additional Units or make any additional Capital Contributions
beyond those set forth in Section 3.1 and this Section 3.2, respectively.
(d) In addition to the foregoing, the Members anticipate that each
Member may deem it necessary or desirable to make certain capital
improvements to the Property intended to benefit only such Member in all
material respects and not the other Member, all as more particularly
provided in this Section 3.2(d). To the extent that the improvement sought
to be made is located in the area set forth on Exhibit "C" as being devoted
to the exclusive use of the Member making such improvement, no approval
from any other Member shall be required. If, however, the subject
improvement is to be located on an area not designated on Exhibit "C" for
such Member's exclusive use, any such improvements shall be made only upon
the prior written consent of both Members, which such consent shall not be
unreasonably withheld if, in the exercise of the Members' reasonable
commercial judgment, it does not appear that it will be likely that the
proposed improvements will materially and interfere on a recurring basis
with the continued use of the remainder of the facility in accordance with
then contemporaneous practice. The Member receiving the principal benefits
of such capital improvements shall fund all related costs and expenses of
installation, construction, and operation of such improvements and shall be
entitled to all revenues and profits in connection therewith. The payment
of such costs and expenses of installation and construction shall in no
event be treated as additional Capital Contributions or loans to the
Company but shall be for the sole account of the Member bearing such
payments. All improvements to the Property made pursuant to this Section
3.2(d) shall be owned solely by the Member funding the installation,
construction and operation thereof, and shall not be considered Company
property..
3.3 Capital Accounts.
(a) A separate "Capital Account" (herein so called) shall be
maintained for each Member in accordance with the capital accounting rules
of section 1.704-1(b)(2)(iv) of the Regulations. Each Member shall have
only one Capital Account, regardless of the number or classes of Units in
the Company owned by such Member and regardless of the time or manner in
which such Units were acquired by such Member. Pursuant to the basic rules
of section 1.704-1(b)(2)(iv) of the Regulations, the balance of each
Member's Capital Account shall be:
(i) credited with: (1) the amount of money contributed by such
Member to the Company and the fair market value of any property
contributed by such Member to the Company (net of liabilities secured
by such property that the Company assumes or takes subject to); (2)
except as provided below, the amount of taxable income or gain
allocated to such Member; and (3) such Member's pro rata share of any
tax exempt income or gain of the Company; and
(ii) debited with: (1) the amount of money (excluding guaranteed
payments) and the agreed fair market value of any property distributed
to such Member (net of liabilities secured by such property that the
Member assumes or takes subject to); (2) except as provided below, the
amount of taxable loss and deductions (or items thereof) allocated to
such Member; and (3) such Member's pro rata share of any expenditures
of the Company described in section 705(a)(2)(B) of the Code (or
expenditures which are so treated under section 1.704-(b) of the
Regulations); and
(iii) otherwise adjusted in accordance with the other capital
account maintenance rules of section 1.704-1(b)(2)(iv) of the
Regulations.
In addition, if property is distributed in kind by the Company, the Capital
Accounts of the Members shall be adjusted to reflect the manner in which
the unrealized income, gain, loss and deduction inherent in such property
(that has not already been reflected in the Members' Capital Accounts)
would be allocated to the Members if there were a taxable disposition of
such property for its agreed fair market value on the date of distribution.
(b) Notwithstanding the foregoing, if property is contributed to the
Company by a Member, the Company shall thereafter compute gain, loss and
depreciation in respect of the contributed property separately for book and
tax purposes as required by sections 1.704-1(b)(2)(iv), 1.704-1(b)(4)(i)
and 1.704-(b)(4)(iii) of the Regulations. Such items so computed for book
purposes shall be allocated among the Members in the manner provided in
Article IV below and shall be reflected in the Members' Capital Accounts by
appropriate increases or decreases thereto as required by section
1.704-1(b)(2)(iv)(b) of the Regulations. Such items so allocated for tax
purposes shall not be reflected in the Members' Capital Accounts.
(c) Notwithstanding the foregoing, it is the intention of the Members
that their Capital Accounts in the Company be maintained strictly in
accordance with the capital account maintenance requirements of section
1.704-1(b) of the Regulations, and that their Capital Accounts be adjusted
to the extent required by the provisions of such Regulations or any
successor provisions thereto.
(d) A loan by a Member to the Company shall not be considered a
contribution of money to the capital of the Company, and the balance of
such Member's Capital Account shall not be increased by the amount so
loaned, unless such loan is determined by the Internal Revenue Service in a
final administrative proceeding to be a Capital Contribution by such
Member. No repayment of principal or interest on any such loan, or
reimbursement made to a Member respecting advances or other payments made
by such Member on behalf of the Company, or payments of fees to a Member or
its Affiliates which are made by the Company shall be considered a return
of capital or in any manner affect the balance of such Member's Capital
Account.
(e) Notwithstanding any other provision in this Agreement to the
contrary, in the event that a Member has a negative balance in its Capital
Account following the Liquidation of such Member's interest in the Company
or the occurrence of a Terminating Transaction or other event resulting in
the termination of the Company (such Member's Capital Account balance to be
determined after it has been adjusted to reflect (i) all Company
transactions during the Fiscal Year in question, including gain or loss
realized in connection with a Terminating Transaction and (ii) the gain or
loss which would be recognized by the Company if it were to sell its
remaining assets for the fair market value thereof), such Member shall
contribute to the Company an amount of money equal to such negative balance
by the later of (1) the end of the Fiscal Year during which the Member's
interest is liquidated or the Terminating Transaction occurs or (2) ninety
(90) days after the date on which the Member's interest is liquidated or
the Terminating Transaction occurs. Amounts contributed to the Company
pursuant to this Section 3.3(e) shall be paid to the Company's creditors or
distributed to the other Members in accordance with the positive balances
in their respective Capital Accounts (after such Capital Accounts have been
adjusted in the manner provided herein).
3.4 Return of Capital. Except to the extent provided in Article IV below,
no Member shall have the right to demand or receive the return of such Member's
Capital Contributions to the Company.
3.5 No Interest on Capital Contributions. Except as otherwise provided
herein, no Member shall receive any interest on such Member's Capital
Contributions to the Company or such Member's Capital Account, notwithstanding
any disproportion therein as between the Members.
ARTICLE IV
ALLOCATIONS AND DISTRIBUTIONS
4.1 Distributions of Available Cash. The Manager, in its sole discretion,
shall determine whether the Company should distribute its Available Cash;
provided, however, that the Manager shall use its best efforts to distribute
sufficient Available Cash to allow the Members to meet their obligations to
federal and state taxing authorities. In the event that the Manager decides
that part or all of the Company's Available Cash should be distributed to the
Members, such Available Cash shall be distributed to the Members pro rata in
accordance with their respective Ownership Percentages. Notwithstanding the
foregoing, the net proceeds of a Terminating Transaction shall be distributed in
accordance with Section 8.2 hereof.
4.2 Allocations of Income and Loss. Subject to the provision of Section
4.3, the Company's items of Net Income and Loss from Operations for each Fiscal
Year and gain and loss realized by the Company in connection with each Capital
Transaction, after giving effect to all Capital Account adjustments attributable
to contributions and distributions of money and property made during such Fiscal
Year (but excluding income and loss, if any, that is required to be separately
determined and allocated to the Members for federal income tax purposes in the
same manner as prescribed under section 704(c) of the Code), shall be allocated
to the Members, pro rata in accordance to their respective Ownership
Percentages.
4.3 Limitations and Qualifications Regarding Allocations. Notwithstanding
the provisions of Section 4.2, Net Income and Loss for each Fiscal Year and gain
and loss realized by the Company (or items of income, gain, loss, deduction, or
credit, as the case may be) shall be allocated in accordance with the following
provisions. If the allocation of Net Loss (or items thereof) as provided in
Section 4.2 hereof would cause or increase a deficit balance in a Member's
Capital Account, there shall be allocated to such Member only that amount of net
loss (or items thereof) as will not cause or increase a deficit balance in the
Member's Capital Account. The net loss (or items thereof) that would, absent
the application of the preceding sentence, otherwise be allocated to such Member
shall be allocated (i) first, to other Members having positive balances in their
Capital Accounts, in proportion to such positive balances; and (ii) second, to
all the Members in accordance with their respective Ownership Percentages. For
purposes hereof, each Member's Capital Account shall be reduced for the items
described in clauses (4), (5), and (6) of Regulation section 1.704-
1(b)(2)(ii)(d). If any allocation of net loss (or items thereof) is made under
this Section 4.3, any allocation of Net Income and gain (including income and
gain exempt from tax) of the Company allocated thereafter shall first be
allocated as necessary to offset in reverse order the allocation made pursuant
to this Section 4.3.
4.4 Allocation of Income and Loss and Distributions in Respect of Units
Transferred.
(a) If any Units in the Company are transferred, or are increased or
decreased by reason of the admission of a new Member or otherwise, during
any Fiscal Year of the Company, each item of income, gain, loss, deduction,
or credit of the Company for such Fiscal Year shall be assigned pro rata to
each day in the particular period of such Fiscal Year to which such item is
attributable (i.e., the day on or during which it is accrued or otherwise
incurred) and the amount of each such item so assigned to any such day
shall be allocated to the Members based upon their respective Units in the
Company at the close of such day. For purposes of accounting convenience
and simplicity, the Company shall treat a transfer of, or an increase or
decrease in, Units in the Company which occurs at any time during a semi-
monthly period (commencing with the semi-monthly period including the date
hereof) as having been consummated on the first day of such semi-monthly
period, regardless of when during such semi-monthly period such transfer,
increase, or decrease actually occurs (i.e., sales and dispositions made
during the first fifteen (15) days of any month will be deemed to have been
made on the first day of the month and sales and dispositions thereafter
will be deemed to have been made on the 16th day of the month).
(b) Distributions of assets of the Company in respect of Units in the
Company shall be made only to the persons or entities who, according to the
books and records of the Company, are the holders of record of Units in
respect of which such distributions are made on the actual date of
distribution or, if authorized by the record holder of such Units as
evidenced by written notice to the Manager, such holder's designee.
Neither the Company nor the Manager shall incur any liability for making
distributions in accordance with the provisions of the preceding sentence,
whether or not the Company, the Members, or the Manager have knowledge or
notice of any transfer or purported transfer of ownership of any Units in
the Company.
(c) Notwithstanding any provision above to the contrary, gain or loss
of the Company realized in connection with a sale or other disposition of
any of the assets of the Company shall be allocated solely to the parties
owning Units in the Company as of the date such sale or other disposition
occurs.
ARTICLE V
STATUS OF MEMBERS AND MANAGEMENT OF THE COMPANY
5.1 Participation in Management. Except as otherwise provided herein, the
Members shall not participate in the management or control of the Company's
business nor shall they transact any business for the Company, nor shall they
have the power to act for or bind the Company, said powers being vested solely
and exclusively in the Manager.
5.2 Limited Liability. Except as otherwise provided herein to the
contrary, the Members shall not be bound by, or personally liable for, the
expenses, liabilities, or obligations of the Company, except as provided in the
Act.
5.3 Management. Unless the Articles of Organization have dispensed with
or limited the authority of the Manager, all power 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 Manager. The Manager shall
have exclusive power and control over the business of the Company; only the
Manager shall have the power to bind the Company. The initial Manager shall be
Capco. The Manager shall act as such until (a) its resignation, withdrawal,
removal, bankruptcy, or dissolution; or (b) the dissolution of the Company,
whichever occurs first. Manager vacancies shall be filled by the Members.
5.4 Removal of Manager. The Members shall have the right, without further
obligation to the Manager other than for reimbursement of expenses previously
incurred, to remove, with or without cause, the Manager.
5.5 Members, Manner of Acting.
(a) Unless the Articles of Organization provide otherwise, any or all
Members may participate in a meeting by, or conduct the meeting through the
use of, any means of communication by which all Members participating may
simultaneously speak to and be heard by each other during the meeting. A
Member participating in a meeting by this means is deemed to be present in
person at the meeting.
(b) A Member who is present at a meeting of the Members when an
action is taken is deemed to have assented to the action taken unless: (1)
it objects at the beginning of the meeting (or promptly upon its arrival)
to holding it or transacting business at the meeting; or (2) its dissent or
abstention from the action taken is entered in the minutes of the meeting;
or (3) it delivers written notice of its dissent or abstention to the
presiding officer of the meeting before its adjournment or to the Company
immediately after adjournment of the meeting. The right of dissent or
abstention is not available to a Member who votes in favor of the action
taken.
(c) Unless the Articles of Organization provide otherwise, any action
required or permitted to be taken by the Members at a meeting may be taken
without a meeting if the required majority of the Members as set forth in
subparagraph (d) below sign a written consent (unless the action which is
the subject of the consent requires a greater percentage under the Articles
of Organization or this Agreement) describing the action taken, and the
consents are filed with the records of the Company. Action taken by
consents is effective when the last Member signs the consent, unless the
consent specifies a subsequent effective date. A signed consent has the
effect of a meeting vote and may be described as such in any document.
(d) Unless this Agreement or the Articles of Organization require a
greater percentage, the Members shall determine all matters based upon the
approval or consent of at least 75% in Ownership Interest in the Company.
In the event that, for any reason, at least 75% in Ownership Interest of
the Members shall not be able to agree on a matter under consideration by
the Members, within five days after the matter is submitted to the Members,
the resolution thereof shall be determined by the majority decision of a
panel consisting of one unrelated, independent third party selected by each
Member (which appointment shall have been made within 15 days after the
disputed matter is submitted to the Members or the Member who shall not
have made such appointment shall have been deemed to have consented to the
disputed matter) and one unrelated, independent third party selected by the
persons so selected. All matters submitted to dispute resolution as
described in this Section 5.5(d) shall have been finally resolved within 30
days.
5.6 Manager; Specific Powers. Except as otherwise specifically provided
in this Agreement, all matters in connection with the day-to-day conduct of the
Company's business and the use or disposition of its assets shall be decided
solely by the Manager. Without limiting the generality of the foregoing, the
Manager shall have the power and authority on behalf of the Company to:
(a) acquire such tangible and intangible personal property as may be
necessary or desirable to carry on the business of the Company;
(b) negotiate leases for and execute and deliver leases for office
space for the operation of the Company's business;
(c) purchase equipment, supplies, and materials and produce and
market products as, in its sole discretion, it shall deem advisable;
(d) employ, terminate the employment of, supervise, and compensate
such persons, firms, or corporations as, in its sole discretion and
judgment, it shall deem advisable for the proper operation and management
of the business of the Company;
(e) invest Company funds in interest-bearing accounts, commercial
paper, government securities, certificates of deposit, or similar
investments;
(f) execute promissory notes, deeds of trust, regulatory agreements,
and all other documents, agreements, or certifications;
(g) sell, transfer, exchange (whether or not qualifying as a tax-free
exchange under section 1031 of the Internal Revenue Code), assign, convey,
lease, further encumber, hypothecate or otherwise dispose of all or any
part of the assets of the Company in the ordinary course of the business of
the Company;
(h) execute and file all reports and maintain all records required by
law or by this Agreement; and
(i) coordinate the management and operation of the Company and
perform other normal business functions and otherwise operate and manage
the business and affairs of the Company in accordance with and as limited
by this Agreement.
5.7 Limitation on Powers and Authority of Manager. Notwithstanding the
provisions of this Article V or any other provisions herein, the Manager shall
not have the right or power to do any of the following without the consent of
Members holding 75% or more of all of the outstanding Units.
(a) Take any action respecting the Company's rights and obligations
as successor in interest to that certain Letter of Intent dated November
12, 1990, between ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇.▇.▇., Inc., an Idaho corporation, which
appears therein as "Seller," for the sale of the Property to Crysen
Refining, Inc., which has thereafter assigned its rights under the Purchase
Arrangement to Refinery Technologies, Inc., which has in turn assigned
certain of its rights to the Company.
(b) Submit any corrective action plan or other remediation proposal
to the Utah Department of Environmental Quality or any other governmental
authority or bind the Company in any way respecting any such matter;
(c) Perform any act that would make it impossible to carry on the
ordinary business of the Company;
(d) Confess a judgment against the Company;
(e) Use the Company name, credit or assets for other than Company
purposes;
(f) Perform any act in contravention of this Agreement;
(g) Amend this Agreement;
(h) Commingle the funds of the Company with the funds of any other
person or entity;
(i) Submit any dispute involving the Company to binding arbitration;
(j) Execute or deliver any assignment for the benefit of the
creditors of the Company;
(i) Cause the Company to borrow any sums for which the Members have
recourse liability;
(k) Transact any business on behalf of the Company in any
jurisdiction, unless the Members would not, as a result thereof, become
Manager and have any liability greater than that provided in this
Agreement;
(l) Cause the Company to borrow or incur any indebtedness, in the
aggregate, in excess of $100,000;
(m) Obligate the Company to make capital expenditures in excess of
$100,000 in any calendar year;
(n) Dispose of all or any part of the Property described in Exhibit
"A" or the buildings, fixtures, or improvements from time to time located
thereon or dispose of all or substantially all of the assets or the
goodwill of any business of the Company or any of its businesses, all
except for routine sales, leases, other transfers, replacements,
renovations, and repairs in the ordinary course of the Company's business
that do not, singly or in the aggregate, have a material adverse effect on
the business of the Company;
(o) Admit a person or entity as a Member, except as provided herein,
except that Capco shall be entitled to transfer its interest as a Member in
the Company at any time to Crown Asphalt Distribution, L.L.C., a Utah
limited liability company ("CAD") without obtaining the consent of any
Member or Manager of the Company; and
(p) In case of an actual emergency, the Manager may take on behalf of
the Company any reasonable action it deems necessary to protect life or
property, to protect the assets of the Company, or to comply with
applicable law, without the approval of the Members as required elsewhere
within this Section 5.7 if time does not permit obtaining such approval.
The Manager shall promptly notify the Members of the emergency or
unexpected expenditure. Any Member may thereafter dispute the
reasonableness or necessity of an expenditure incurred by the Manager for
any such action by giving written notice of such dispute to the Manager.
Thereafter, the Manager and the Member shall negotiate in good faith to
resolve such dispute. In the event any dispute is not resolved, the
provisions of Section 5.5(d) shall apply.
5.8 Standard of Conduct. The Manager at all times shall operate and
manage the business and affairs of the Company in a reasonable and prudent
manner.
5.9 Compensation of Manager.
(a) Except as agreed to by the Members, the Manager shall not receive
compensation in consideration of the performance of the duties and
responsibilities of the Manager. However, the Manager shall be reimbursed
for all costs and expenses incurred on behalf of the Company. Except as
otherwise provided herein, neither the Manager nor any other Member shall
be entitled to a fee for services to the Company in its capacity as a
Member.
(b) The Company shall be obligated, and the Manager is authorized, to
pay from Company assets all expenses relating to the organization of the
Company. Such expenses may be paid directly by the Company or paid by the
Manager and then reimbursed by the Company. Without limiting the
generality of the foregoing, such organizational expenses include legal,
accounting, consulting, duplication and printing, telephone, telex,
postage, air freight, travel and entertainment, and other expenses and fees
(including filing fees) paid or incurred in organizing the Company. No
part of the amount so paid pursuant to this section shall be deemed to be a
management fee payable to the Manager.
(c) The Manager shall devote such time, effort, and skill to the
affairs of the Company as the Members may deem to be reasonably required
for the welfare and success of the Company, but shall not be obligated to
devote all of its business time to the affairs of the Company.
5.10 Use of Facilities. The Members shall have the right to use the
facilities comprising the Property without cost or the payment of any
consideration other than the Capital Contributions to the Company. Each Member
shall be entitled to the exclusive use of that portion of the Property more
particularly set forth in Exhibit "C" attached hereto and incorporated herein by
this reference. Each Member shall be entitled to make that portion of the
property marked as Reserved for such Member Exclusive to that Member by written
notice to the Company of its intent to utilize such Property in their respective
businesses ninety (90) days prior to such action. Any revenues generated from
the property marked Exclusive shall be the sole property of that respective
Member. Any revenues generated from the property marked Reserved or Joint will
be allocated according to Sharing Ratio subject to the change of certain
property from Reserved to Exclusive. The portions of the Property not
designated for the exclusive use of either Member shall be available for the use
of both Members, as coordinated from time-to-time by the Members.
5.11 Execution of Documents. Except as limited by Section 5.7, the Manager
is hereby authorized to execute on behalf of the Company any and all documents
in connection with the Company's business including, but not limited to, deeds,
deeds of trust, promissory notes, guaranties, leases, certificates, affidavits,
assignments, security agreements and contracts.
5.12 Tax Matters Member.
(a) The Manager is hereby designated the "tax matters partner" as
that term is defined in section 6231(a)(7) of the Code (referred to herein
as the "Tax Matters Member").
(b) The Tax Matters Member shall take no action in such capacity
without the authorization or consent of the other Members, other than such
action as the Tax Matters Member may be required to take by law. The Tax
Matters Member shall use its best efforts to comply with the
responsibilities outlined in sections 6222 through 6232 of the Code and in
doing so shall incur no liability to the other Members. Notwithstanding
the Tax Matters Member's obligation to use its best efforts in the
fulfillment of its responsibilities, the Tax Matters Member shall not be
required to incur any expenses for the preparation for or pursuance of
administrative or judicial proceedings unless the Members agree on a method
for sharing such expenses.
(c) The Tax Matters Member shall not enter into any extension of the
period of limitations for making assessments on behalf of the other Members
without first obtaining the written consent of the other Members.
(d) No Member shall file, pursuant to section 6227 of the Code, a
request for an administrative adjustment of items for any Company taxable
year without first notifying the other Members. If the other Members agree
with the requested adjustment, then the Tax Matters Member shall file the
request for administrative adjustment on behalf of the Member. If
unanimous consent is not obtained within thirty (30) calendar days from
such notice, or within the period required to timely file the request for
administrative adjustment, if shorter, any Member, including the Tax
Matters Member, may file a request for administrative adjustment on its own
behalf.
(e) Any Member intending to file a petition under sections 6226,
6228, or other section of the Code respecting any item or other matter
involving the Company shall notify the other Members of such intention and
the nature of the contemplated proceeding. In the case where the Tax
Matters Member is the Member intending to file such petition on behalf of
the Company, such notice shall be given within a reasonable period of time
to allow the other Members to participate in the choosing of the forum in
which such petition will be filed. If the Members do not agree on the
appropriate forum, then the appropriate forum shall be decided by vote of a
majority in interest of the Members. Each Member shall have a vote in
accordance with its aggregate percentage right to distributions of
Available Cash for the year under audit. If such a majority cannot agree,
then the Tax Matters Member shall choose the forum. If any Member intends
to seek review of any court decision rendered as a result of a proceeding
instituted under the preceding provisions of this Section 5.12(e), then
such Member shall notify the other Members of such intended action.
(f) The Tax Matters Member shall not bind any Member to a settlement
agreement without obtaining the written concurrence of such Member. For
purposes of this Section 5.12(f), the term "settlement agreement" shall
include a settlement agreement at either an administrative or judicial
level. Any Member who enters into a settlement agreement respecting any
partnership items, as defined in section 6231(a)(3) of the Code, shall
notify the other Members of such settlement agreement and its terms within
ninety (90) calendar days from the date of settlement.
(g) The provisions of this Section 5.12 shall survive the termination
of the Company or the termination of any Member's interest in the Company
and shall remain binding on the Members for a period of time necessary to
resolve with the Internal Revenue Service or the United States Department
of the Treasury any and all matters regarding the United States federal
income taxation of the Company.
5.13 Other Tax Elections. The Manager may, in its sole discretion, make or
revoke the elections referred to in section 754 of the Code or any corresponding
provisions of state tax laws. Each of the Members will upon request supply the
information necessary to properly give effect to such elections. The Manager
shall revalue Company property to its fair market value (taking into account
section 7701(g) of the Code) on the revaluation date in accordance with section
1.704-1(b)(2)(iv)(f) of the Regulations, and shall adjust the Capital Accounts
of the Members as described herein when any new or existing Member contributes
money or other property (other than a de minimis amount) to the Company in
exchange for an interest in the Company or when the Company distributes money or
other property (other than a de minimis amount) to a withdrawing or continuing
Member in exchange for all or a portion of such Member's interest in the
Company.
5.14 Inconsistent Treatment of Item. If any Member intends to file a
notice of inconsistent treatment under section 6222(b) of the Code, then such
Member shall give reasonable notice under the circumstances to the other Members
of such intent and the manner in which the Member's intended treatment of an
item is (or may be) inconsistent with the treatment of that item by the other
Members.
ARTICLE VI
MEMBERS' RESPONSIBILITIES AMONG THEMSELVES
6.1 Liability of Manager to the Other Members. The Manager, its
directors, officers, shareholders, representatives, employees and agents shall
not be liable to the Company or to the other Members for losses sustained or
liabilities incurred as a result of any good faith error in judgment or mistake
of law or fact, or for any act done or omitted to be done in good faith in
conducting the Company's business, unless such error, mistake, act or omission
was performed or omitted fraudulently, or constituted willful misconduct or a
breach of this Agreement. This provision is not for the benefit of any third
party.
6.2 Company Indemnity to Manager. The Company shall protect, defend,
indemnify and hold harmless the Manager and each of its directors, officers,
shareholders, representatives, employees and agents (collectively, the
"Indemnified Parties"), from and against any loss, expense, damage or injury
suffered or sustained by any of them by reason of any acts, omissions, or
alleged acts or omissions arising out of the activities of any Indemnified Party
on behalf of the Company or in furtherance of the interests of the Company,
including, but not limited to, any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim if the acts,
omissions or alleged acts or omissions upon which such actual or threatened
action, proceeding or claim is based were for a purpose believed in good faith
by any Indemnified Party, to be in the best interest of the Company or were not
performed or omitted fraudulently and did not constitute willful misconduct or a
breach of this Agreement by such Indemnified Party. The Company shall further
indemnify and hold harmless each Indemnified Party for losses or liabilities due
to the negligence, including gross negligence, dishonesty, willful misconduct,
or bad faith of any employee, broker, or other agent of the Company if such
employee, broker, or agent was solicited, engaged, or retained and supervised by
the Manager with reasonable care. The Members each acknowledge that the
intention of the preceding provisions is to cause the Company to indemnify the
Manager respecting the Manager's negligence, but in no event shall the Manager
be indemnified respecting its gross negligence or willful misconduct.
6.3 Conflicts of Interest. This Agreement shall not preclude the Company
from dealing with any Member or any Member's Affiliates in connection with the
business of the Company as independent contractors or as agents for others, and
such Affiliates may receive from such others or the Company normal profits,
compensation, commissions or other income incident to such dealings. The amount
payable by the Company to any Member or any Affiliate of any Member shall not be
greater than the amount which the Company would have to pay under an arms-length
contract with a non-related entity.
6.4 Members Look Solely to Company Assets. Each Member shall look solely
to the assets of the Company for all distributions respecting the Company and
return of its Capital Contributions, and no Member shall have any recourse in
connection therewith against any Member except as provided in Section 6.1.
6.5 Dealings Outside the Company. Neither the Manager nor any Member shall
be required to devote full time to Company business, and the Manager and Members
may, at any time and from time to time, engage in and possess an interest in
other business ventures of any and every type and description, independently or
with others. Specifically, the Members anticipate that Capco will exploit the
facilities and services of the Company, in conjunction with improvements to the
Property made by Capco pursuant to Section 3.2(d), solely to operate an
integrated paving asphalt business and that Foreco will exploit the facilities
and services of the Company, in conjunction with improvements to the Property
made by Foreland pursuant to Section 3.2(d), solely to operate an integrated
roofing asphalt business, Neither the Company nor any Member shall by virtue of
this Agreement have any right, title or interest in or to such independent
venture of any Member.
6.6 Respective Responsibilities for Damages. Each Member agrees to
indemnify and hold harmless the Company and the other Member from any injury,
damages, costs, liability, fines, causes of action or fees (including reasonable
attorney's fees) resulting from, or alleged to result from, the business
activities of such Member as described in Section 6.5 which are conducted upon
the Property or in conjunction with improvements to the Property made by such
Member pursuant to Section 3.2(d),.
6.7 Non-Solicitation. No Member shall solicit, divert, hire, or induce,
or attempt to solicit, divert, or hire any of the other's employees who are
providing substantially full-time services to such party while they are Members
of the Company or affiliated with any Member of the Company.
6.8 Confidentiality. Each Member agrees to keep confidential and not use,
reveal, provide, or transfer to any third party any confidential information
("Confidential Information") it obtains or has obtained concerning any other
Member, except (a) disclosure to actual or prospective sources of debt or equity
funding for such Member, including their legal, accounting, and other advisors,
(b) to the extent that disclosure to a third party is required by applicable
law; (c) information that, at the time of disclosure, is generally available to
the public (other than as a result of a breach of this Agreement or any other
confidentiality agreement to which the party is subject or which it has
knowledge), as evidenced by generally available documents or publications; (d)
information that was in its possession prior to disclosure (as evidenced by
appropriate written materials) and was not acquired directly or indirectly from
the other Members; (e) to its employees, consultants, or advisors for the
purposes of carrying out their duty hereunder to the extent disclosure is
necessary or advisable; (f) to third parties to the extent necessary to enforce
this Agreement; provided, however, that in the case of disclosure pursuant to
(e), the party or parties to whom disclosure is made shall agree to be bound by
this confidentiality provision. The obligation of each Member not to disclose
Confidential Information except as provided herein shall not be affected by
either the termination of this Agreement or the resignation or removal of any
Member of the Company.
ARTICLE VII
TRANSFERS OF MEMBER INTERESTS
7.1 Assignment of Member's Interest. Subject to the provisions of this
Article VII, a Member may assign or transfer that Member's interest in the
Company at any time, either voluntarily by an instrument in writing or
involuntarily by court order or by operation of law. Upon the assignment or
transfer of a Member's interest in the Company, (i) the Company shall not be
required to recognize any such assignment or transfer until the Company has
received written notice of the same; (ii) no such assignment or transfer of an
interest in the Company, whether voluntary or involuntary, shall of itself,
dissolve the Company; (iii) the assignee or transferee of the Member's interest
in the Company shall not thereby become entitled to vote or otherwise
participate in the management of the Company's business and affairs, or to
require any information or accounts of Company transactions, or to inspect the
Company books and records, or to become a Member; (iv) the assignee or
transferee shall only be entitled to receive, in accordance with the contract or
order of assignment or transfer, the share of profits or other compensation by
way of income and the return of contributions to which the assigning Member
would otherwise be entitled under this Agreement and, in case of the winding-up
of the Company, the assignee or transferee shall be entitled to receive such
distributions as would otherwise be made to the assigning Member.
7.2 Admission as Substituted Member. With the exception of permitted
transfers as provided in Section 7.7 of this Agreement, no purchaser, assignee
or other transferee (by conveyance, operation of law or otherwise) of all or any
part of an interest in the Company shall have the right to become a substituted
Member in place of that person's seller, assignor or transferor, and, thereby,
become entitled to vote and participate in the management of the business and
affairs of the Company, unless all of the following conditions are satisfied
(all subsequent references in this agreement to "assignor" and "assignee" shall
be construed to include sellers and purchasers, transferors and transferees,
donors and donees, and otherwise, as the case may be):
(a) The fully-exercised and acknowledged written instrument or order
of sale, assignment or transfer, which sets forth the intention of the
assignor that the assignee become a substituted Member in that Member's
place, has been filed with the Company;
(b) The assignor and assignee execute and acknowledge such other
instruments as the Members may from time to time reasonably require, in
order to effect such admission, including the written acceptance and
adoption by the assignee of the provisions of this Agreement;
(c) The assignee shall bear all reasonable expenses incurred in
effecting the substitution; and
(d) Members (other than the assignor) have consented in writing to
the substitution, which consent shall be exercisable in the Member's sole
discretion.
7.3 Right of First Refusal to Purchase Units.
(a) If any Member desires to assign, transfer or otherwise dispose of
all or any portion of such Member's interest in the Company for value other
than in accordance with the provisions of Section 7.4, the other Member
shall have the option to purchase all or any part of such interest.
(b) The Member(s) desiring to so dispose of its Transferable Interest
(a "Transferring Member") shall give written notice (a "Transfer Notice")
to the other Member setting forth (i) that the Transferring Member desires
to transfer its Units or other interest in the Company (the "Transferable
Interest"); (ii) the identity and address of the proposed purchaser or
other transferee thereof; (iii) that the Transferring Member has received a
bona fide offer for all or a portion of the Transferable Interest, if a
sale is contemplated; (iv) the cash and other consideration (per Unit and
in the aggregate) to be received by the Transferring Member in connection
with such disposition; (v) a true copy of the offer or agreement, if any,
for such sale or other disposition and a certification by the Transferring
Member that, to the best of his knowledge and belief, the offer or
agreement is genuine and in all respects what it purports to be; (vi) an
offer to sell to the other Member the Transferable Interest in accordance
with this Section 7.3; and (vii) such other information as may be necessary
or desirable in order to afford to the other Member the benefits intended
to be conferred by this Section 7.3. To the extent the terms of such sale
or other transfer provide for the receipt by the Transferring Member of
consideration other than cash or cash equivalents, the Transfer Notice
shall also include a fair market appraisal of such consideration prepared
by a qualified independent appraiser.
(c) The other Member shall have ten (10) days after the effective
date of the Transfer Notice to elect to purchase all, but not less than
all, of the Transferable Interest, without regard to whether the
Transferring Member proposed initially to sell only a portion of such
Transferring Member's Units or other interest in the Company.
(d) If the other Member has timely elected to purchase all of the
Transferable Interest, then the other Member shall purchase all, but not
less than all, of the Transferable Interest, on a date and at a time
designated by the other Member in a written notice to be given at least two
(2) days in advance to the Transferring Member by the other Member, and at
the principal place of business of the Company. At the closing, the
Transferring Member shall deliver certificates or other evidence of
ownership representing the Transferable Interest being purchased, duly
endorsed in blank or accompanied by duly executed transfer documents
acceptable to the other Member.
(e) The purchase by the other Member shall be at the price per Unit
or per percentage interest and upon the same terms and conditions as
contained in the Transfer Notice unless the parties shall agree otherwise;
provided, however, that if the Transfer Notice provides for payment of all
or any portion of the purchase price by delivery of consideration other
than cash or cash equivalents, the other Member may make payment of such
portion of the purchase price in cash or cash equivalents in the amount of
the fair market value of such non-cash consideration as set forth in the
appraisal accompanying the Transfer Notice. If, however, the other Member
electing to purchase the Transferable Interest shall object to such
appraisal of the non-cash consideration within the period set forth above
for electing to purchase the Transferable Interest, the other Member shall
within such period select an independent appraiser to determine such fair
market value. In the event that the independent appraisers selected by
each of the Transferring Member and the other Member cannot agree on the
fair market value, then the two independent appraisers shall mutually
select a third independent appraiser to determine the fair market value,
and the value selected by such third independent appraiser shall be binding
on all of the parties hereto. Each such independent appraiser may use any
customary method of determining fair market value. Each party shall bear
the cost of the independent appraiser selected by that party, and the cost
of the independent appraiser, if any, mutually selected by the two
independent appraisers shall be paid one-half by the Transferring Member
and one-half by the other Member electing to purchase.
(f) If the other Member does not timely elect to purchase all of the
Transferable Interest pursuant to this Section 7.3, the Transferring
Member, within thirty (30) days after the expiration of the applicable
option exercise period, may transfer the Transferable Interest to the
purchaser or other transferee named in the Transfer Notice for the
consideration and on the other terms set forth in the Transfer Notice and
not otherwise. Upon failure of the Transferring Member to effect such
transfer pursuant to the terms and conditions contained in the Transfer
Notice within such thirty (30)-day period, the right to transfer such
interest shall lapse, and any desired transfer thereafter shall be made
only upon compliance again with the notice and election procedures of this
Section 7.3.
(g) Purchasing Members shall become substituted Members respecting
interests purchased under this Section 7.3 as soon as the purchase has been
accomplished according to the terms hereof. Any other purchaser or
transferee of a Transferring Member's interest shall not be entitled to
become a substitute Member except as provided in Section 7.2.
7.4 Encumbrances.6 Other Encumbrances{tc \l 2 ".6 Other
Encumbrances"}.
(a) Notwithstanding any other provision in this Article VII respecting
the transfer of a Member's interest in the Company in other circumstances,
in the event that any Member (an "Encumbering Member") desires hereafter to
encumber in any way all or any part of its Units or the capital
improvements of such Encumbering Member on or appurtenant to the Property
as contemplated by Section 3.2(d), it shall be able to do so only if it
gives written notice (an "Encumbrance Notice") to the other Member at least
30 days prior to granting or otherwise creating such encumbrance and
obtains the written consent of the other Member to such encumbrance, which
consent may be granted or withheld at the sole discretion of such other
Member. The Encumbrance Notice shall set forth or otherwise include
(i) the number or other amount of Units or the capital improvements of such
Encumbering Member on or appurtenant to the Property as contemplated by
Section 3.2(d) that the Encumbering Member desires to encumber (the
"Collateral"); (ii) a description of the proposed encumbrance; (iii) the
identity and address of the person to whom or for whose benefit such
encumbrance is to be granted or created (the "Secured Party"); (iv) the
amount of the indebtedness (the "Secured Indebtedness") to be secured by
such encumbrance and the principal terms thereof to be secured by such
encumbrance; and (v) a true copy of the definitive Secured Party
Undertaking (hereafter defined) duly executed by the Secured Party.
(b) The Secured Party Undertaking (herein so called) shall evidence the
obligation of the Secured Party (or any assignee or successor thereof),
before taking any action to enforce any right which the Secured Party may
have to execute on such encumbrance, including a conveyance in lieu of
foreclosure, against the Collateral, to (i) give written notice (a "Sale
Notice") to the other Member and Refinery Technologies, Inc. ("RTI") and
(ii) afford to the other Member and RTI successive options to purchase the
Collateral and the right to notice of any execution or foreclosure sale or
conveyance in lieu thereof and as hereinafter provided in this Section 7.4.
(c) The Sale Notice shall set forth (i) the identity and address of the
Encumbering Member or other then current holder of the Collateral; (ii) the
number or other amount of Units or the capital improvements of such
Encumbering Member on or appurtenant to the Property as contemplated by
Section 3.2(d) then comprising the Collateral; (iii) the fair market value
of such Collateral as determined by a qualified independent appraiser
engaged by the Secured Party; and (iv) the identity and address of the
Secured Party.
(d) During the period consisting of 30 days after the delivery of the
Sale Notice to the other Member and RTI and the date of the proposed
foreclosure sale or conveyance in lieu thereof as provided in subparagraph
(c) above, first the other Member and, if not exercised by such other
Member, then RTI shall have the right to purchase all, but not less than
all, of the Collateral from the Secured Party at a price agreed to by them
or, in the absence of such agreement, at the fair market value of such
Collateral as set forth in the Sale Notice. If, however, the other Member
or RTI shall object to such appraisal of the Collateral within five days
after receipt of such Sale Notice, the other Member (but not RTI) shall
within such five days appoint an independent appraiser to determine such
fair market value. In the event that the independent appraisers selected
by each of the Secured Party and the other Member cannot agree on the fair
market value, then the two independent appraisers shall mutually select a
third independent appraiser to determine the fair market value, and the
value selected by such third independent appraiser shall be binding on all
of the parties hereto. Each such independent appraiser may use any
customary and accepted method of determining fair market value. The Secured
Party and the other Member each shall bear the cost of the independent
appraiser selected by it, and the cost of the independent appraiser, if
any, mutually selected by the two independent appraisers shall be paid
one-half by the Secured Party and one-half by the other Member. The
election of the other Member or RTI to purchase the Collateral shall be
evidenced by its timely written notice to the Secured Party at its address
set forth in the Sale Notice. In the event both the other Member and RTI
both elect to purchase the Collateral, the election of the other Member
shall be accepted, and the Collateral shall be sold to the other Member on
the terms and conditions set forth herein. Capco's and Foreco's rights
under this Section 7.4 with respect to any sale of the Collateral by
Secured Party shall be in lieu of, and not in addition to, Capco's,
Foreco's and RTI's respective rights under the Assignment and Agreement
entered into September 11, 1998, a copy of which is attached hereto as
Exhibit "D" (the "Assignment and Agreement"), which shall otherwise remain
in full force and effect.
(e) If the Collateral is not sold to the other Member or RTI in
accordance with subparagraph (d) above, the Secured Party shall have the
right to take a conveyance in lieu of foreclosure or dispose of such
Collateral (w) at either private or public sale, (x) by way of one or more
contracts, (y) as a unit or in parcels, and (z) on any terms, all as the
Secured Party may determine; provided that such disposition, including the
method, manner, time, place and terms of sale are commercially reasonable.
All of the Collateral shall be offered and sold separate from and not as
part of a unit including other collateral of the Secured Party.
(f) If all or any portion of the Collateral is to be sold to the other
Member or RTI in accordance with this Section 7.4, then such sale shall be
closed not more than 60 days after the determination of the purchase price
in accordance with Section 7.4(d) on a date and at a time designated by the
Secured Party in a written notice given by the Secured Party to the
purchasing other Member or RTI, as the case may be. On such date and at
such time, payment of such purchase price in cash or other immediately
available funds shall be made to the Secured Party at its office, against
receipt of documents evidencing and assigning to the purchasing Company,
other Members or RTI, as the case may be, the Collateral being purchased
and all encumbrances securing the same (or corresponding part thereof
proportional to the Secured Indebtedness so purchased), without
restriction.
(g) If the sale to the other Member or RTI, as the case may be, is not
closed within the 60-day period provided for in subparagraph (f) of this
Section 7.4, Secured Party shall be entitled to exercise its rights under
paragraph (e) of this Section 7.4; provided that RTI shall not have the
right to exercise its rights under the Assignment and Agreement more than
once. Any transfer of any or all of the Collateral upon foreclosure by the
Secured Party following compliance with the preceding provisions of this
Section 7.4 shall thereafter continue to be subject to the provisions of
this Agreement, and the transferee shall assume all obligations hereunder.
(h) Upon compliance by the Secured Party with the provisions of this
Article VII, such Secured Party, or the purchaser on any foreclosure sale,
shall be admitted as a Member of the Company on its written notice to the
Company of its election to become a Member, without the consent of either
the Company or any other Member.
7.5 Purchase of Specialized Improvements. If, upon the withdrawal of a
Member from the Company, whether in connection with a transaction described in
Section 7.3 or otherwise but other than as provided in and in accordance with
Section 7.4, the other Member shall have the option to purchase any equipment
and other improvements (the "Specialized Improvements") at the Property that
were funded solely by the withdrawing Member, were treated as owned by such
withdrawing Member and not by the Company, and respecting which the withdrawing
Member was not treated as having made a contribution to the capital of the
Company pursuant to Section 3.2. The price of such purchase shall be determined
by the mutual consent of the withdrawing Member and the other Member. If the
other Member elects not to purchase the Specialized Improvements, the
withdrawing Member shall have the right to (a) if the withdrawal is in
connection with a transaction described in Section 7.3 respecting which the
other Member did not elect to purchase the Transferable Interest, sell the
Specialized Improvements together with the Transferable Interest, (b) remove the
Specialized Improvements from the Property and restore the premises in all
material respects to their condition prior to the construction or installation
of the Specialized Improvements at the sole cost of the withdrawing Member,
without liability for consequential damages, or (c) abandon the Specialized
Improvements to the Company.
7.6 Option to Purchase Interest Upon Certain Events.
(a) If all or any portion of a Member's interest is proposed to be
transferred other than as provided in and in accordance with Section 7.4
pursuant to (i) an adjudication of the Member as a bankrupt; (ii) an entry
of an order, judgment or decree by any court of competent jurisdiction
appointing a trustee, receiver or liquidator of the assets of the Member;
(iii) an assignment or attempted assignment by the Member for the benefit
of creditors; or (iv) the institution or attempted institution of voluntary
bankruptcy proceedings by the Member, then, in any such event (an "Option
Event"), the Company and, to the extent the Company does not elect to
purchase all of such interest, the other Member shall have the option, but
not the obligation, to purchase from such Member (or from such Member's
legal successor(s)) (the "Subject Member") all or any portion of the
Subject Member's interest in the Company transferred, as the Company or the
other Member may elect, without respect to whether all or only a portion of
such Member's interest was initially subject to the proposed transfer.
(b) Not later than ninety (90) days after the occurrence of an Option
Event, the Subject Member (or the Subject Member's successor(s)) shall
notify the Company of such occurrence, which notice shall set forth (i) a
description of the Option Event; (ii) the Units (the "Option Units") that
the Company and the other Member have the right to purchase pursuant to
this Section 7.6 by reason of such Option Event; (iii) the identity of the
Subject Member; and (iv) such other information as may be necessary or
desirable in order to afford to the Company and the other Member the
benefits intended to be conferred by this Section 7.6. Following the
receipt of such notice, the Company shall give like notice to the other
Member of the occurrence of the Option Event and of its option to purchase
the Subject Member's interest pursuant to this Agreement.
(c) The Company shall have ten (10) days after the effective date of
the Option Notice to elect to purchase all or any part of the Option Units.
To the extent the Company does not elect to purchase all of such interest,
the other Member shall have twenty (20) days after the date of the
expiration of the Company's option to elect to purchase all or any part of
the Option Units, such election to be made by delivering written notice of
such election to the Subject Member within such twenty (20)-day period.
(d) If the Company and/or the other Member have timely elected to
purchase Option Units, then the Company and the electing other Member shall
purchase that part of the Option Units that it has elected to purchase
within five (5) days after expiration of the applicable option exercise
period on a date and at a time designated by the Company and/or other
Member in a written notice to be given at least two (2) days in advance to
the Subject Member by the Company and/or other Member, and at the principal
place of business of the Company.
(e) The purchase price for the Option Units purchased by the Company
or other Member shall be the fair market value ("FMV") of the interest as
of the date of the occurrence of the Option Event as determined herein.
The Company shall pay for and obtain an independent appraisal of all real
estate. Listed securities shall be valued at the latest closing price for
such securities. All other assets shall be valued at their book value, net
of depreciation and amortization. The FMV of the interest being purchased
shall be based on the relative percentage of ownership of the Company based
on the total number of Units outstanding as of the valuation date
multiplied by the sum of (i) the fair market value of the real estate as
determined by appraisal; plus (ii) the market price for any listed
securities; plus (iii) the book value, net of depreciation and
amortization, of all other assets; minus (iv) total Company liabilities at
the valuation date.
(f) Payment by the Company or the Members of the purchase price for
Option Units shall be made in cash or other immediately available funds at
closing.
(g) If and to the extent that the Company and/or the other Member do
not purchase all of the Option Units pursuant to the preceding provisions
of this Section 7.6, then the remaining Option Units shall be transferred
to the person or persons to whom the same would have passed in the absence
of the provisions of this Agreement.
7.7 Option to Purchase Property.
(a) If the Company desires to assign, transfer or otherwise dispose
of the Property for value, Capco and Foreco shall have the option,
exercisable first by Capco and thereafter by Foreco, to purchase all of the
Property desired to be sold by the Company. If the Company has not
received an offer from a third party for the purchase of the Property, the
price and terms of such sale shall be as agreed to by Capco or Foreco and
the Company.
(b) If the Company has received an offer from a third party
purchaser, the Company shall notify Capco and Foreco setting forth (i) the
identity and address of the proposed purchaser or other transferee thereof;
(ii) that the Company has received a bona fide offer therefor, if a sale is
contemplated; (iii) the cash and other consideration to be received by the
Company in connection with such disposition; (iv) a true copy of the offer
or agreement, if any, for such sale or other disposition and a
certification by the Company that, to the best of its knowledge and belief,
the offer or agreement is genuine and in all respects what it purports to
be; (v) an offer to sell the Property to Capco and Foreco in accordance
with this Section 7.7; and (vi) such other information as may be necessary
or desirable in order to afford to Capco and Foreco the benefits intended
to be conferred by this Section 7.7. To the extent the terms of such sale
or other transfer provide for the receipt by the Company of consideration
other than cash or cash equivalents, the notice shall also include a fair
market appraisal of such consideration prepared by a qualified independent
appraiser.
(c) Capco shall have ten (10) days after the effective date of the
notice to elect to purchase all of the Property. To the extent Capco does
not elect to purchase all of the Property, Foreco shall have ten (10) days
after the date of the expiration of Capco's option to elect to purchase all
of the Property. Any such election to be made by delivering written notice
of such election to the Company within such applicable ten (10)-day period.
(d) If Capco or Foreco has timely elected to purchase all of the
Property, then such electing party shall purchase the Property within five
(5) days after expiration of the applicable period set forth herein, on a
date and at a time designated by the electing party in a written notice to
be given at least two (2) days in advance to the Company by the electing
party, and at the principal place of business of the Company. At the
closing, the Company shall deliver a special warranty deed and other
transfer documents acceptable to the electing party duly executed on behalf
of the Company.
(e) The purchase by the electing party shall be at the price and upon
the same terms and conditions as contained in the notice unless the Company
and all Members shall agree otherwise; provided, however, that if the
notice provides for payment of all or any portion of the purchase price by
delivery of consideration other than cash or cash equivalents, the electing
party may pay such portion of the purchase price in cash or cash
equivalents in the amount of the fair market value of such non-cash
consideration as set forth in the appraisal accompanying the notice. If,
however, the electing party shall object to such appraisal of the non-cash
consideration within the period set forth above for electing to purchase
the Property, the fair market value shall be determined as set forth in
Section 7.3(f).
(f) If neither Capco nor Foreco timely elects to purchase all of the
Property pursuant to this Section 7.7, the Company, within thirty (30) days
after the expiration of the applicable option exercise period, may transfer
the Property to the purchaser or other transferee named in the notice for
the consideration and on the other terms set forth in the notice and not
otherwise. Upon failure of the Company to effect such transfer pursuant to
the terms and conditions contained in the notice within such thirty (30)-
day period, the right to transfer such interest shall lapse, and any
desired transfer thereafter shall be made only upon compliance again with
the notice and election procedures of this Section 7.7.
7.8 Permitted Transfers. Nothing in this Agreement shall be deemed to
prohibit or limit the sale, assignment or transfer from a Member of all or any
part of the Member's interest in the Company to
(a) another existing Member of the Company,
(b) either (i) a Member's wholly owned subsidiary corporation or
limited liability company (ii) a limited partnership of which only entities
described in clause (i) hereof are the general partners, (iii) a limited
liability company of which only entities described in clause (i) hereof are
the managers;
(c) a general partnership or joint venture consisting only of
entities described in clauses (i) through (iii) of subparagraph (b),
(d) in the case of Capco, the transfer to CAD; or
(e) any other person to which all other Members consent in writing;
provided, that in each case the interest in the Company so sold, assigned or
transferred continues to be subject to the provisions of this Agreement in all
respects. No such sale, assignment or transfer shall create a right, interest
or power in any other Member, or in the Company, or any other person, to
purchase or acquire such interest in the Company, nor shall the Member who
desires to sell, assign or transfer all or any part of that Member's interest in
the Company to another Member be required to obtain the prior consent of the
other Members or the Company or to offer such interest to the other Members or
to the Company.
ARTICLE VIII
DISSOLUTION AND TERMINATION
8.1 Events of Dissolution. The Company shall, without further action of
the Members, be dissolved upon the first to occur of the following:
(a) The dissolution of the Company by judicial decree;
(b) The merger or consolidation of the Company with another limited
liability company or other entity where the Company is not the surviving
entity;
(c) The sale of all or substantially all of the assets of the
Company;
(d) December 31, 2048; or
(e) The written consent to dissolve of Members holding in the
aggregate at least 75% of the outstanding Units.
Unless approved by Members holding, in the aggregate, at least 75% of the
outstanding Units, no Member shall have the right, and all Members hereby agree
not, to dissolve, terminate, partition, or liquidate, or to petition a court for
the dissolution, termination, partition, or liquidation of, the Company except
as provided in this Agreement.
8.2 Winding Up and Liquidation. Upon the occurrence of an event of
dissolution as provided in Section 8.1, the Company shall be wound up and
liquidated as rapidly as business circumstances will permit by selling Company
assets and distributing the proceeds from any such sale or sales of the assets
of the Company as follows and in the following order of priority:
(a) to pay the expenses of winding up and to pay or provide for
payment of all amounts owing by the Company to creditors other than
Members;
(b) to establish any reserves which the Members may deem necessary
for any anticipated, contingent or unforeseen liabilities or obligations of
the Company arising out of, or in connection with, the conduct of the
Company business;
(c) to pay all amounts owing by the Company to any Member as a
creditor;
(d) thereafter to the Members in accordance with their Ownership
Percentages up to the amount of $2,500,000; and
(e) then in equal portions to Capco and Foreland.
8.3 Authority to Wind Up. The winding up of the Company and liquidation
of its assets shall be conducted by the Manager or, if there is no Manager, as
determined by the remaining Members.
ARTICLE IX
BOOKS OF ACCOUNT, ACCOUNTING, REPORTS, AND BANKING
9.1 Books of Account. The Company books and records of account shall be
maintained at the principal office of the Company or at such other location and
by such person or persons as may be designated by the Manager. The Company
shall pay the direct expense of maintaining its books of account.
9.2 Method of Accounting. The Company books of account shall be
maintained and kept on a basis of accounting determined by the Members and
consistently applied.
9.3 Financial Statements. Upon receipt of a written request from any
Member, within ninety (90) days after the close of each Fiscal Year of the
Company, the Company shall provide to each Member either unaudited or audited
(as determined by the Members in their reasonable discretion) financial
statements which fairly represent the financial condition of the Company as of
the end of such Fiscal Year. Such financial statements shall indicate the share
of each Member in the net income, net loss, depreciation and other relevant
fiscal items of the Company for such Fiscal Year. Each Member shall be entitled
to receive copies of all federal, state and local income tax returns and
information returns, if any, which the Company is required to file.
Additionally, quarterly, to the extent both requested by any Member and
regularly prepared by the Company, the Company shall make available to any
Member copies of the Company's financial documentation respecting the prior
quarter, including, without limitation, balance sheets and income statements.
9.4 Bank Accounts. The funds of, and all monies actually received by the
Company shall be deposited in a separate bank account or accounts in a national
or state banking institution in the name of the Company. The Manager or agent
of the Company shall be authorized to draw checks upon such account or accounts;
provided, however, that no funds shall be withdrawn from any such account or
accounts except for Company purposes.
9.5 Tax Returns. The Manager shall, for each Fiscal Year, file or caused
to be filed at the expense of the Company and on behalf of the Company, a
partnership return within the time prescribed by law (including extensions) for
such filing and shall deliver to each Member a copy of such Member's K-1
relating to such return. The Manager shall also file or caused to be filed at
the expense of the Company and on behalf of the Company such state and/or city
income tax returns as may be required by law.
9.6 Audit. Each Member shall have the right at all reasonable times
during usual business hours to audit, examine, and make copies of or extracts
from the books of accounts and other records of the Company. Such right may be
exercised through any agent or employee of such Member designated by such
Member. Each Member shall bear all expenses incurred in any examination made
for such Member's account.
9.7 Meetings. The Company shall hold an annual meeting of the Members at
a time, date and place as determined by the Members. Special meetings of the
Members, for any purpose or purposes described in the meeting notice, may be
called by the Manager or by Members holding in the aggregate at least 33% of the
outstanding Units.
9.8 Records. The Company shall keep at its place of business the
following records: (a) a current list in alphabetical order of the full name
and last known business street address of each Member; (b) a copy of the stamped
Articles of Organization and all certificates of amendment thereto, together
with executed copies of any powers of attorney pursuant to which any certificate
of amendment has been executed; (c) copies of the Company's federal, state, and
local income tax returns and reports, if any, for the three (3) most recent
fiscal years; (d) copies of any financial statements of the Company for the
three (3) most recent fiscal years; (e) a copy of this Agreement plus all
amendments thereto; (f) unless otherwise set forth in the Articles of
Organization or this Agreement, a written statement of (i) the amount of cash
and a description and statement of the agreed value of the other property or
services contributed or agreed to be contributed by each Member, (ii) the times
at which, or events on the happening of which, any additional contributions
agreed to be made by each Member are to be made, (iii) the right of any Member
to receive distributions which include a return of all or any of the Member's
contributions, and (iv) any event upon the happening of which the Company is to
be dissolved and its affairs wound up. These records shall be subject to
inspection and copying at the reasonable request, and at the expense, of any
Member during ordinary business hours.
ARTICLE X
MISCELLANEOUS
10.1 Notices. All notices and other communications made or required to be
given pursuant to this Agreement shall be in writing and shall be deemed given
if delivered personally or by facsimile transmission (if receipt is confirmed by
the facsimile operator of the recipient), or delivered by overnight courier
service or mailed by registered or certified mail (return receipt requested),
postage prepaid, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice; provided that notices
of a change of address shall be effective only upon receipt thereof):
If to Capco, to: Crown Asphalt Products Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇, President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Foreco, to: Foreland Asphalt Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice hereunder delivered in person or by facsimile (if receipt is
confirmed by the facsimile operator of the recipient) shall be deemed given on
the date thereof; any notice by registered or certified mail shall be deemed
given three (3) days after the date of mailing; and any notice by overnight
courier shall be deemed given two (2) days after shipment or the date of
receipt, whichever is earlier.
10.2 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Members, their successors and assigns.
10.3 Duplicate Originals. For the convenience of the Members, any number
of counterparts hereof may be executed, and each of such counterparts shall be
deemed to be an original instrument, and all of which, taken together, shall
constitute one agreement.
10.4 Construction. The title of articles and sections herein have been
inserted as a matter of convenience for reference only and shall not control or
affect the meaning or construction of any of the terms or provisions herein.
10.5 Governing Law. This Agreement is entered into and shall be governed
by the laws of the state of Utah. To the extent permitted by the Act and other
applicable law, the terms and provisions of this Agreement shall control in the
event of any conflict between such terms or provisions and the Act.
10.6 Other Instruments. The parties hereto covenant and agree that they
will execute such assumed name certificates and other and further instruments
and documents which are or may become necessary or convenient to effectuate and
carry out the purposes of the Company created by this Agreement.
10.7 Legal Construction. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if the invalid, illegal or unenforceable provision had never been
contained herein. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be automatically added as part of this
Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
10.8 Gender and Number. Wherever the context shall so require all words
herein in any gender shall be deemed to include the masculine, feminine or
neuter gender, all singular words shall include the plural and all plural words
shall include the singular.
10.9 Reliance. No person dealing with any Manager shall be required to
determine his authority to make any commitment or undertaking on behalf of the
Company, nor to determine any fact or circumstances bearing upon the existence
of such authority. In addition, no purchaser of any asset of the Company from a
Manager shall be required to see to the application or distribution of revenues
or proceeds paid or credited in connection therewith, unless such purchaser
shall have received notice affecting same.
10.10 Entirety and Modifications. This Agreement embodies the entire
agreement between the parties hereto and supersedes any prior understandings or
written or oral agreements between the parties respecting the subject matter of
this Agreement. No term, condition or provision of this Agreement shall be
altered, amended or modified without the prior written consent of Members
holding at least 75% of the issued and outstanding Units, except as provided to
the contrary in this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed by the undersigned as
of the date first above written.
Capco:
CROWN ASPHALT PRODUCTS COMPANY
By /s/ ▇▇▇ ▇▇▇▇▇▇, President
Foreco:
FORELAND ASPHALT CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Exhibit A...Property Description
Exhibit B...Memorandum of Closing
Exhibit C...Use of Facilities
Exhibit D...Assignment and Agreement
