EXHIBIT 10.13
[EXECUTION COPY]
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M-FOODS INVESTORS, LLC
A Delaware Limited Liability Company
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AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
Dated as of April 10, 2001
THE COMPANY INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH INTERESTS MAY NOT
BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT
EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND
COMPLIANCE WITH THE OTHER SUBSTANTIAL RESTRICTIONS ON TRANSFERABILITY SET FORTH
HEREIN.
THE COMPANY INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT
ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER SPECIFIED IN THE
SECURITYHOLDERS AGREEMENT, DATED AS OF THE DATE HEREOF, AS AMENDED OR MODIFIED
FROM TIME TO TIME, AMONG THE COMPANY AND CERTAIN INVESTORS, AND THE COMPANY
RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH INTERESTS UNTIL SUCH TRANSFER
IS IN COMPLIANCE WITH SUCH SECURITYHOLDERS AGREEMENT. A COPY OF THE
SECURITYHOLDERS AGREEMENT SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER OF
SUCH INTERESTS UPON WRITTEN REQUEST AND WITHOUT CHARGE.
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TABLE OF CONTENTS
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ARTICLE I ..........................................................................1
DEFINITIONS...............................................................1
SECTION 1.1 Definitions...........................................1
SECTION 1.2 Terms Generally......................................12
ARTICLE II .........................................................................12
GENERAL PROVISIONS.......................................................12
SECTION 2.1 Formation............................................12
SECTION 2.2 Name.................................................13
SECTION 2.3 Term.................................................13
SECTION 2.4 Purpose; Powers......................................13
SECTION 2.5 Foreign Qualification................................14
SECTION 2.6 Registered Office; Registered Agent; Principal
Office; Other Offices............................................14
SECTION 2.7 No State-Law Partnership.............................14
SECTION 2.8 Amendment and Restatement............................14
SECTION 2.9 Issuance of Additional Units.........................14
ARTICLE III .........................................................................15
MANAGEMENT...............................................................15
SECTION 3.1 The Management Committee; Delegation of
Authority and Duties.............................................15
SECTION 3.2 Establishment of Management Committee................16
SECTION 3.3 Management Committee Meetings........................17
SECTION 3.4 Chairman.............................................18
SECTION 3.5 Approval or Ratification of Acts or Contracts........18
SECTION 3.6 Action by Written Consent or Telephone
Conference.......................................................18
SECTION 3.7 Officers.............................................19
SECTION 3.8 Management Matters...................................21
SECTION 3.9 Securities in Holdings...............................22
SECTION 3.10 Liability of Unitholders............................22
SECTION 3.11 Indemnification by the Company......................22
ARTICLE IV .........................................................................24
CAPITAL CONTRIBUTIONS; ALLOCATIONS; DISTRIBUTIONS........................24
SECTION 4.1 Capital Contributions................................24
SECTION 4.2 Capital Accounts.....................................24
SECTION 4.3 Allocations of Net Income and Net Loss...............24
SECTION 4.4 Distributions........................................28
SECTION 4.5 Security Interest and Right of Set-Off...............31
ARTICLE V .........................................................................31
WITHDRAWAL; DISSOLUTION; TRANSFER OF MEMBERSHIP
INTERESTS; ADMISSION OF NEW MEMBERS......................................31
SECTION 5.1 Unitholder Withdrawal................................31
SECTION 5.2 Dissolution..........................................31
SECTION 5.3 Transfer by Unitholders..............................32
SECTION 5.4 Admission or Substitution of New Members.............33
SECTION 5.5 Compliance with Law..................................33
ARTICLE VI .........................................................................33
REPORTS TO MEMBERS; TAX MATTERS..........................................33
SECTION 6.1 Books of Account.....................................33
SECTION 6.2 Reports..............................................34
SECTION 6.3 Fiscal Year..........................................35
SECTION 6.4 Certain Tax Matters..................................35
ARTICLE VII .........................................................................36
MISCELLANEOUS............................................................36
SECTION 7.1 Schedules............................................36
SECTION 7.2 Governing Law........................................37
SECTION 7.3 Successors and Assigns...............................37
SECTION 7.4 Confidentiality......................................37
SECTION 7.5 Amendments...........................................37
SECTION 7.6 Notices..............................................38
SECTION 7.7 Counterparts.........................................38
SECTION 7.8 Power of Attorney....................................38
SECTION 7.9 Entire Agreement.....................................39
SECTION 7.10 Section Titles......................................39
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
M-FOODS INVESTORS, LLC
A DELAWARE LIMITED LIABILITY COMPANY
THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of
M-Foods Investors, LLC, dated and effective as of April 10, 2001 (this
"AGREEMENT"), is adopted, executed and agreed to, for good and valuable
consideration, by and among Vestar Capital Partners IV, L.P., a Delaware limited
partnership ("VCP"), the Persons listed on SCHEDULE A attached hereto as of the
date hereof upon their execution of this Agreement, and each other Person who at
any time becomes a Member in accordance with the terms of this Agreement and the
Act. Any reference in this Agreement to VCP or any other Member shall include
such Member's Successors in Interest to the extent such Successors in Interest
have become Substitute Members in accordance with the provisions of this
Agreement.
WHEREAS, on December 13, 2000, VCP formed the Company as a
limited liability company under the Delaware Limited Liability Company Act,
Title 6, ▇▇.▇▇. 18-101, et seq, as it may be amended from time to time (the
"ACT"), by executing the Limited Liability Company Agreement of M-Foods
Investors, LLC (the "ORIGINAL AGREEMENT") and filing a Certificate of Formation
with respect thereto with the Delaware Secretary of State; and
WHEREAS, VCP desires to amend and restate the Original Agreement
for the purpose of setting forth the agreements governing the relations among
the Members and to admit additional members.
NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereto, each intending to be legally
bound, agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS.
Unless the context otherwise requires, the following terms shall
have the following meanings for purposes of this Agreement:
"ACT" has the meaning set forth in the preamble above.
"ADDITIONAL MEMBER" means any Person that has been admitted to
the Company as a Member pursuant to SECTION 5.4 by virtue of having received its
Membership Interest from the Company and not from any other Member or Assignee.
"ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any
Unitholder, the deficit balance, if any, in such Unitholder's Capital Account as
of the end of the relevant fiscal year, after giving effect to the following
adjustments:
(i) credit to such Capital Account any amounts
that such Unitholder is obligated to restore pursuant to this
Agreement or is deemed to be obligated to restore pursuant to
Regulations Section 1.704-1(b)(2)(ii)(c) or the penultimate
sentence of each of Regulations Sections 1.704-2(i)(5) and
1.704-2(g)(1); and
(ii) debit to such Capital Account the items
described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5)
and (6).
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted and applied by the Management Committee consistently therewith.
"AFFILIATE" when used with reference to another Person means any
Person (other than the Company), directly or indirectly, through one or more
intermediaries, controlling, controlled by, or under common control with, such
other Person. In addition, Affiliates of a Member shall include all partners,
officers, employees and former partners, officers or employees of, all
consultants or advisors to, and all other Persons who directly or indirectly
receive compensation from, such Member.
"ASSIGNEE" means any transferee to which a Member or another
Assignee has transferred its interest in the Company in accordance with the
terms of this Agreement, but who is not a Member.
"BANKRUPTCY" means, with respect to any Person, the occurrence of
any of the following events: (i) the filing of an application by such Person
for, or a consent to, the appointment of a trustee or custodian of his assets;
(ii) the filing by such Person of a voluntary petition in Bankruptcy or the
seeking of relief under Title 11 of the United States Code, as now constituted
or hereafter amended, or the filing of a pleading in any court of record
admitting in writing his inability to pay his debts as they become due; (iii)
the failure of such Person to pay his debts as such debts become due; (iv) the
making by such Person of a general assignment for the benefit of creditors; (v)
the filing by such Person of an answer admitting the material allegations of, or
his consenting to, or defaulting in answering, a Bankruptcy petition filed
against him in any Bankruptcy proceeding or petition seeking relief under Title
11 of the United States Code, as now constituted or as hereafter amended; or
(vi) the entry of an order, judgment or decree by any court of competent
jurisdiction adjudicating such Person a bankrupt or insolvent or for relief in
respect of such Person or appointing a trustee or custodian of his assets and
the continuance of such order, judgment or decree unstayed and in effect for a
period of 60 consecutive days.
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"CAPITAL ACCOUNT" means, with respect to any Unitholder, the
account maintained for such Unitholder in accordance with the following
provisions:
(a) To each Unitholder's Capital Account there shall
be added such Unitholder's Capital Contributions, such Unitholder's
allocable share of Net Income and any items in the nature of income or
gain which are specially allocated to such Unitholder pursuant to
SECTION 4.3(c) hereof, and the amount of any Company liabilities assumed
by such Unitholder or which are secured by any property distributed to
such Unitholder.
(b) To each Unitholder's Capital Account there shall
be subtracted the amount of cash and the Gross Asset Value of any
property distributed to such Unitholder pursuant to any provision of
this Agreement, such Unitholder's allocable share of Net Losses and any
items in the nature of expenses or losses which are specially allocated
to such Unitholder pursuant to SECTION 4.3(c) hereof, and the amount of
any liabilities of such Unitholder assumed by the Company or which are
secured by any property contributed by such Unitholder to the Company.
(c) In the event any interest in the Company is
transferred in accordance with the terms of this Agreement, the
transferee shall succeed to the Capital Account of the transferor to the
extent it relates to the transferred interest.
(d) In determining the amount of any liability for
purposes of subparagraphs (a) and (b) hereof and SECTION 4.3(b) hereof,
there shall be taken into account Code Section 752(c) and any other
applicable provisions of the Code and Regulations.
(e) The foregoing provisions and the other
provisions of this Agreement relating to the maintenance of Capital
Accounts are intended to comply with Code Section 704(b) and the
Regulations promulgated thereunder, and shall be interpreted and applied
by the Management Committee in a manner consistent with such
Regulations.
"CAPITAL CONTRIBUTION" means, with respect to any Unitholder, the
amount of cash and the initial Gross Asset Value of any property (other than
money) contributed from time to time to the Company by such Unitholder (it being
understood that the Gross Asset Value with respect to property in respect of a
Unitholder's Initial Capital Contribution shall be as set forth on EXHIBIT I
hereto).
"CERTIFICATE" has the meaning set forth in SECTION 2.1.
"CLASS A UNITS" means the Class A Units of the Company.
"CLASS B UNITS" means the Class B Units of the Company.
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"CLASS C FRACTION" means the lesser of (A) one and (B) a
fraction, the numerator of which is the number of Class C Units outstanding at
the date of any such determination and the denominator of which is the number of
Class C Units outstanding on the date of the Initial Capital Contribution after
giving effect to the Initial Capital Contribution (i.e., 100,000), as each of
the numerator and denominator may be adjusted in the event of a
recapitalization, split, dividend, or other reclassification affecting the Class
C Units.
"CLASS C UNITS" means the Class C Units of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute. Any reference herein to a particular
provision of the Code shall mean, where appropriate, the corresponding provision
in any successor statute.
"COMPANY" means M-Foods Investors, LLC, a Delaware limited
liability company.
"COMPANY MINIMUM GAIN" has the meaning set forth in Regulations
Section 1.704- 2(d).
"COMBINED UNITS" means the Target Holders' Class A Units and
Dairy A Units.
"CONTROL" when used with reference to any Person means the power
to direct the management or policies of such Person, directly or indirectly, by
or through stock or other equity ownership, agency or otherwise, or pursuant to
or in connection with an agreement, arrangement or other understanding (written
or oral); and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"DAIRY A UNITS" has the meaning of a "Class A Unit" as such term
is defined in the Dairy Holdings LLC Agreement.
"DAIRY HOLDINGS LLC" means M-Foods Dairy Holdings, LLC, a
Delaware limited liability company.
"DAIRY HOLDINGS LLC AGREEMENT" means that certain Limited
Liability Company Agreement of Dairy Holdings LLC, dated as of April __, 2001,
by and among VCP and the Persons listed on SCHEDULE A thereto.
"DAIRY HOLDINGS LLC CAPITAL CONTRIBUTION" has the meaning of a
"Capital Contribution" as such term is defined in the Dairy Holdings LLC
Agreement.
"DEPRECIATION" means, for each fiscal year or other period, an
amount equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year or other period, Depreciation
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shall be an amount which bears the same ratio to such beginning Gross Asset
Value as the federal income tax depreciation, amortization or other cost
recovery deduction for such year or other period bears to such beginning
adjusted tax basis; PROVIDED, HOWEVER, that if the federal income tax
depreciation, amortization or other cost recovery deduction for such year is
zero, Depreciation shall be calculated with reference to such beginning Gross
Asset Value using any reasonable method selected by the Management Committee.
"DISTRIBUTABLE ASSETS" means, with respect to any fiscal period,
all cash receipts (including from any operating, investing, and financing
activities) and (if distribution thereof is determined to be necessary by a
majority of the Management Committee) other assets of the Company from any and
all sources, reduced by operating cash expenses, contributions of capital to
subsidiaries of the Company and payments (if any) required to be made in
connection with any loan to the Company and any reserve for contingencies or
escrow required, in the good faith judgment of the Management Committee, in
connection therewith.
"ECONOMIC INTEREST" means a Member's or Assignee's share of the
Company's net profits, net losses and distributions pursuant to this Agreement
and the Act, but shall not include any right to participate in the management or
affairs of the Company, including the right to vote in the election of
Representatives, vote on, consent to or otherwise participate in any decision of
the Members or Representatives, or any right to receive information concerning
the business and affairs of the Company, in each case except as expressly
otherwise provided in this Agreement or required by the Act.
"FIRST PERFORMANCE HURDLE" means, that the Target Holders shall
have received (i) on or prior to the first anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 150% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (ii) on or prior to the second anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 175% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (iii) on or prior to the third anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 200% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (iv) on or prior to the fourth anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 225% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (v) on or prior to the fifth anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 249% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders or (vi) at any time after the fifth anniversary of the date of
this Agreement, aggregate distributions (pursuant to this Agreement and the
Dairy Holdings LLC Agreement) with respect to Combined Units equal to an amount
that would produce a Target Holders' IRR equal to or in excess
5
of 20%; it being understood that the terms contained in clauses (i) through (vi)
of this definition shall remain constant and in effect throughout the periods
indicated.
"GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset
contributed by a Unitholder to the Company shall be the gross fair
market value of such asset on the date of the contribution, as
determined by the contributing Unitholder and the Company.
(b) The Gross Asset Values of all Company assets
shall be adjusted to equal their respective gross fair market values, as
determined by the Management Committee, as of the following times:
(i) the acquisition of an additional
interest in the Company after the date hereof by a new or
existing Unitholder in exchange for more than a de minimis
Capital Contribution, if the Management Committee reasonably
determines that such adjustment is necessary or appropriate to
reflect the relative Economic Interests of the Unitholders in
the Company;
(ii) the distribution by the Company to a
Unitholder of more than a de minimis amount of Company property
as consideration for an interest in the Company, if the
Management Committee reasonably determines that such adjustment
is necessary or appropriate to reflect the relative Economic
Interests of the Unitholders in the Company;
(iii) the liquidation of the Company within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); and
(iv) such other times as the Management
Committee shall reasonably determine necessary or advisable in
order to comply with Regulations Sections 1.704-1(b) and
1.704-2.
(c) The Gross Asset Value of any Company asset
distributed to a Unitholder shall be the gross fair market value of such
asset on the date of distribution, as reasonably determined by the
Management Committee taking into account the following proviso; PROVIDED
that, in the case of such assets which are securities, the fair market
value thereof shall be reduced (a) if and to the extent that a block
sale of all of such securities is reasonably likely, in the good faith
judgment of a registered broker-dealer affiliated with a reputable,
nationally recognized brokerage house, to depress the trading price of
such securities, (b) if and to the extent appropriate, in the good faith
judgment of the Management Committee, due to illiquidity of such
securities and (c) for any sales or other commissions reasonably likely
to be incurred or applied in a sale of such securities.
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(d) The Gross Asset Values of Company assets shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or Code Section
743(b), but only to the extent that such adjustments are taken into
account in determining Capital Accounts pursuant to Regulations Section
1.704-1(b)(2)(iv)(m); PROVIDED, however, that Gross Asset Values shall
not be adjusted pursuant to this subparagraph (d) to the extent that the
Management Committee determines that an adjustment pursuant to
subparagraph (b) of this definition of Gross Asset Value is necessary or
appropriate in connection with a transaction that would otherwise result
in an adjustment pursuant to this subparagraph (d).
"HOLDINGS" means M-Foods Holdings, Inc., a Delaware corporation.
"INITIAL CAPITAL CONTRIBUTION" has the meaning set forth in
SECTION 4.1.
"MANAGEMENT COMMITTEE" means the Management Committee established
pursuant to SECTION 3.2.
"MANAGEMENT STOCK PURCHASE AND UNIT SUBSCRIPTION AGREEMENTS" has
the meaning set forth in SECTION 2.9.
"MARATHON" means Marathon Fund Limited Partnership IV, a Delaware
limited partnership.
"MEMBER" means VCP, Marathon, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, the Persons
listed on SCHEDULE A attached hereto and each other Person who is hereafter
admitted as a Member in accordance with the terms of this Agreement and the Act.
The Members shall constitute the "members" (as that term is defined in the Act)
of the Company. Except as otherwise set forth herein or in the Act, the Members
shall constitute a single class or group of members of the Company for all
purposes of the Act and this Agreement.
"MEMBER MINIMUM GAIN" means minimum gain attributable to Member
Nonrecourse Debt determined in accordance with Regulations Section 1.704- 2(i).
"MEMBER NONRECOURSE DEBT" has the meaning set forth in
Regulations Section 1.704-2(b)(4).
"MEMBER NONRECOURSE DEDUCTION" has the meaning set forth in
Regulations Section 1.704- 2(i)(2).
"MEMBERSHIP INTEREST" means, with respect to each Member, such
Member's Economic Interest and rights as a Member.
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"▇▇▇▇▇▇▇ FOODS" means ▇▇▇▇▇▇▇ Foods, Inc., a Minnesota
corporation.
"NET INCOME" or "NET LOSS" means for each fiscal year of the
Company, an amount equal to the Company's taxable income or loss for such fiscal
year, determined in accordance with Code Section 703(a) (for this purpose, all
items of income, gain, loss, or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:
(a) Any income of the Company that is exempt from
federal income tax and not otherwise taken into account in computing Net
Income or Net Loss pursuant to this definition of Net Income or Net Loss
shall be added to such taxable income or loss;
(b) Any expenditures of the Company described in
Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and
not otherwise taken into account in computing Net Income or Net Loss
pursuant to this definition of Net Income or Net Loss shall be
subtracted from such taxable income or loss;
(c) In the event the Gross Asset Value of any
Company asset is adjusted pursuant to subparagraph (b) or (c) of the
definition of Gross Asset Value, the amount of such adjustment shall be
taken into account as gain (if the adjustment increases the Gross Asset
Value of the asset) or loss (if the adjustment decreases the Gross Asset
Value of the asset) from the disposition of such asset for purposes of
computing Net Income or Net Loss;
(d) Gain or loss resulting from any disposition of
property with respect to which gain or loss is recognized for federal
income tax purposes shall be computed by reference to the Gross Asset
Value of the property disposed of, notwithstanding that the adjusted tax
basis of such property differs from its Gross Asset Value;
(e) In lieu of the depreciation, amortization, and
other cost recovery deductions taken into account in computing such
taxable income or loss, Depreciation shall be taken into account for
such fiscal year;
(f) To the extent an adjustment to the adjusted tax
basis of any Company asset pursuant to Code Section 734(b) or 743(b) is
required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) to be
taken into account in determining Capital Accounts as a result of a
distribution other than in liquidation of a Unitholder's interest in the
Company, the amount of such adjustment shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases the basis of the asset) from the disposition of
the asset and shall be taken into account for purposes of computing Net
Income or Net Loss; and
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(g) Notwithstanding any other provision of this
definition of Net Income or Net Loss, any items which are specially
allocated pursuant to SECTION 4.3(c) hereof shall not be taken into
account in computing Net Income or Net Loss. The amounts of the items of
Company income, gain, loss, or deduction available to be specially
allocated pursuant to SECTION 4.3(c) hereof shall be determined by
applying rules analogous to those set forth in this definition of Net
Income or Net Loss.
"NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Section 1.704- 2(b).
"OFFICER" means each Person designated as an officer of the
Company pursuant to and in accordance with the provisions of SECTION 3.7,
subject to any resolution of the Management Committee appointing such Person as
an officer or relating to such appointment.
"ORIGINAL AGREEMENT" has the meaning set forth in the preamble
above.
"PREFERRED RETURN" with respect to each holder of Class A Units
means an amount, accrued on a daily basis and, beginning July 1, 2001,
compounded quarterly on April 1, July 1, October 1 and January 1 of each year,
from the day on which such Unitholder makes a Capital Contribution through the
date of distribution equal to 8% per annum of THE EXCESS, if any, of (i) such
Unitholder's aggregate Capital Contribution plus the aggregate amount compounded
pursuant to this definition through the end of the previous quarter on each day
during such period OVER (ii) the aggregate amount of all distributions made on
or prior to such day to such Unitholder. For purposes of computing the Preferred
Return, each Capital Contribution shall be treated as having been made on the
last day of the calendar month in which such Capital Contribution is received by
the Company (except for the Initial Capital Contribution, which shall be deemed
to have been made on the date hereof), and distributions shall be deemed to have
been made on the last day of the month in which they are made.
"PROCEEDING" has the meaning set forth in SECTION 3.11.
"REGULATIONS" means the Income Tax Regulations, including
temporary Regulations, promulgated under the Code, as such Regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).
"REGULATORY ALLOCATIONS" has the meaning set forth in SECTION
4.3(c) of this Agreement.
"REPRESENTATIVE" has the meaning set forth in SECTION 3.2(a) of
this Agreement.
"SALE OF THE COMPANY" shall mean a "Sale of the Company" (as
defined in the Securityholders Agreement) or a dissolution of the Company in
accordance with this Agreement
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(other than transactions effected for the purpose of changing, directly or
indirectly, the form of organization or the organizational structure of the
Company and/or any of its subsidiaries).
"SECOND PERFORMANCE HURDLE" means that the Target Holders shall
have received (i) on or prior to the first anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 200% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (ii) on or prior to the second anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 225% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (iii) on or prior to the third anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 250% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (iv) on or prior to the fourth anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 275% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (v) on or prior to the fifth anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 305% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders or (vi) at any time after the fifth anniversary of the date of
this Agreement, aggregate distributions (pursuant to this Agreement and the
Dairy Holdings LLC Agreement) with respect to Combined Units equal to an amount
that would produce a Target Holders' IRR equal to or in excess of 25%; it being
understood that the terms contained in clauses (i) through (vi) of this
definition shall remain constant and in effect throughout the periods indicated.
"SECURITIES" means any debt or equity securities of any issuer,
including common and preferred stock and interests in limited liability
companies (including warrants, rights, put and call options and other options
relating thereto or any combination thereof), notes, bonds, debentures, trust
receipts and other obligations, instruments or evidences of indebtedness, other
property or interests commonly regarded as securities, interests in real
property, whether improved or unimproved, interests in oil and gas properties
and mineral properties, short-term investments commonly regarded as money market
investments, bank deposits and interests in personal property of all kinds,
whether tangible or intangible.
"SECURITYHOLDERS AGREEMENT" means the Securityholders Agreement
dated as of the date hereof among the Company and each Member, as it may be
amended or supplemented from time to time.
"SUBSTITUTE MEMBER" means any Person that has been admitted to
the Company as a Member pursuant to SECTION 5.4 by virtue of such Person
receiving all or a portion of a Membership Interest from a Member or its
Assignee and not from the Company.
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"SUCCESSOR IN INTEREST" means any (i) trustee, custodian,
receiver or other Person acting in any Bankruptcy or reorganization proceeding
with respect to; (ii) assignee for the benefit of the creditors of; (iii)
trustee or receiver, or current or former officer, director or partner, or other
fiduciary acting for or with respect to the dissolution, liquidation or
termination of; or (iv) other executor, administrator, committee, legal
representative or other successor or assign of, any Unitholder, whether by
operation of law or otherwise.
"TARGET HOLDERS" means the holders of Class A Units.
"TARGET HOLDERS' IRR" shall mean the cumulative internal rate of
return of the Target Holders (calculated as provided below), as of any date,
where the internal rate of return for such Target Holders shall be the annually
compounded rate of return which results in the following amount having a net
present value equal to zero: (i) the aggregate amount of cash and Gross Asset
Value of any assets distributed to such Target Holders pursuant to SECTIONS 4.4
and 5.2 of this Agreement and SECTIONS 4.4 and 5.2 of the Dairy Holdings LLC
Agreement from time to time on a cumulative basis through such date (PROVIDED
that, in no circumstances shall any fees paid to such Target Holders or expenses
reimbursed to such Target Holders from time to time under this Agreement, the
Dairy Holdings LLC Agreement or otherwise be included in this clause (i)), minus
(ii) the aggregate amount of the Capital Contributions and Dairy Holdings LLC
Capital Contributions made by such Target Holders from time to time on a
cumulative basis through such date. In determining the Target Holders' IRR, the
following shall apply: (a) Capital Contributions and Dairy Holdings LLC Capital
Contributions shall be deemed to have been made on the last day of the month in
which they are made (except for the Initial Capital Contribution (as such term
is defined herein and in the Dairy Holdings LLC Agreement), which shall be
deemed to have been made on the date hereof and/or the date of the Dairy
Holdings LLC Agreement, as applicable); (b) distributions shall be deemed to
have been made on the last day of the month in which they are made; (c) all
distributions shall be based on the amount distributed prior to the application
of any U.S. federal, state, local, or foreign income taxation to the Target
Holders; and (d) the rates of return shall be per annum rates and all amounts
shall be calculated on an annually compounded basis, and on the basis of a
365-day year.
"TAX MATTERS MEMBER" has the meaning set forth in SECTION 6.4(b).
"THIRD PERFORMANCE HURDLE" means that the Target Holders shall
have received (i) on or prior to the first anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 300% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (ii) on or prior to the second anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 325% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (iii) on or prior to the third anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 350% of the
aggregate Capital Contributions
11
and Dairy Holdings LLC Capital Contributions of Target Holders, (iv) on or prior
to the fourth anniversary of the date of this Agreement, aggregate distributions
(pursuant to this Agreement and the Dairy Holdings LLC Agreement) with respect
to Combined Units equal to 375% of the aggregate Capital Contributions and Dairy
Holdings LLC Capital Contributions of Target Holders, (v) on or prior to the
fifth anniversary of the date of this Agreement, aggregate distributions
(pursuant to this Agreement and the Dairy Holdings LLC Agreement) with respect
to Combined Units equal to 448% of the aggregate Capital Contributions and Dairy
Holdings LLC Capital Contributions of Target Holders or (vi) at any time after
the fifth anniversary of the date of this Agreement, aggregate distributions
(pursuant to this Agreement and the Dairy Holdings LLC Agreement) with respect
to Combined Units equal to an amount that would produce a Target Holders' IRR
equal to or in excess of 35%; it being understood that the terms contained in
clauses (i) through (vi) of this definition shall remain constant and in effect
throughout the periods indicated.
"UNITHOLDER" means a Member or Assignee who holds an Economic
Interest in Class A Units, Class B Units or Class C Units.
"UNPAID PREFERRED RETURN" with respect to each holder of Class A
Units means THE EXCESS, if any, of (i) such Unitholder's Preferred Return as of
the date of any such determination OVER (ii) the aggregate amount of all
distributions made to such Unitholder pursuant to or in accordance with SECTION
4.4(a)(ii).
"UNRETURNED CAPITAL" with respect to each Unitholder means THE
EXCESS, if any, of (i) such Unitholder's aggregate Capital Contributions OVER
(ii) the aggregate amount of all distributions made to such Unitholder pursuant
to or in accordance with SECTION 4.4(a)(i).
SECTION 1.2 TERMS GENERALLY. The definitions in
SECTION 1.1 shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The term "person" or
"Person" includes individuals, partnerships (whether general or limited), joint
ventures, corporations, limited liability companies, trusts, estates,
custodians, nominees, governments (or agencies or political subdivisions
thereof) and other associations, entities or groups (as defined in the
Securities Exchange Act of 1934, as amended). The words "include," "includes"
and "including" shall be deemed to be followed by the phrase "without
limitation." All terms herein that relate to accounting matters shall be
interpreted in accordance with generally accepted accounting principles from
time to time in effect. All references to "SECTIONS" and "ARTICLES" shall refer
to Sections and Articles of this Agreement unless otherwise specified. The words
"hereof" and "herein" and similar terms shall relate to this Agreement.
ARTICLE II
GENERAL PROVISIONS
SECTION 2.1 FORMATION. The Company has been organized as
a Delaware limited liability company by the execution and filing of a
Certificate of Formation (the "CERTIFICATE")
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by VCP, as an initial Member, under and pursuant to the Act. The rights, powers,
duties, obligations and liabilities of the Members shall be determined pursuant
to the Act and this Agreement. To the extent that the rights, powers, duties,
obligations and liabilities of any Member are different by reason of any
provision of this Agreement than they would be in the absence of such provision,
this Agreement shall, to the extent permitted by the Act, control.
SECTION 2.2 NAME. The name of the Company is "M-Foods
Investors, LLC," and all Company business shall be conducted in that name or in
such other names that comply with applicable law as the Management Committee may
select from time to time.
SECTION 2.3 TERM. The term of the Company commenced on the
date the Certificate was filed with the office of the Secretary of State of the
State of Delaware and shall continue in existence perpetually until termination
or dissolution in accordance with the provisions of SECTION 5.2.
SECTION 2.4 PURPOSE; POWERS.
(a) GENERAL POWERS. The nature of the business
or purposes to be conducted or promoted by the Company is to engage in
any lawful act or activity for which limited liability companies may be
organized under the Act. The Company may engage in any and all
activities necessary, desirable or incidental to the accomplishment of
the foregoing. Notwithstanding anything herein to the contrary, nothing
set forth herein shall be construed as authorizing the Company to
possess any purpose or power, or to do any act or thing, forbidden by
law to a limited liability company organized under the laws of the State
of Delaware.
(b) COMPANY ACTION. Subject to the provisions of
this Agreement and except as prohibited by applicable law (i) the
Company may, with the approval of the Management Committee, enter into
and perform any and all documents, agreements and instruments
contemplated thereby, all without any further act, vote or approval of
any Member and (ii) the Management Committee may authorize any Person
(including any Member or Officer) to enter into and perform any document
on behalf of the Company.
(c) MERGER. Subject to the provisions of this
Agreement, the Company may, with the approval of the Management
Committee and without the need for any further act, vote or approval of
any Member, merge with, or consolidate into, another limited liability
company (organized under the laws of Delaware or any other state), a
corporation (organized under the laws of Delaware or any other state) or
other business entity (as defined in Section 18-209(a) of the Act),
regardless of whether the Company is the survivor of such merger or
consolidation; PROVIDED THAT, to the extent applicable in connection
with any transaction described in this SECTION 2.4(c), each Unitholder
shall be afforded any rights to which it is entitled to pursuant to
ARTICLE IV of the Securityholders Agreement.
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SECTION 2.5 FOREIGN QUALIFICATION. Prior to the
Company's conducting business in any jurisdiction other than Delaware, the
Management Committee shall cause the Company to comply, to the extent procedures
are available and those matters are reasonably within the control of the
Officers, with all requirements necessary to qualify the Company as a foreign
limited liability company in that jurisdiction.
SECTION 2.6 REGISTERED OFFICE; REGISTERED AGENT;
PRINCIPAL OFFICE; OTHER OFFICES. The registered office of the Company required
by the Act to be maintained in the State of Delaware shall be the office of the
initial registered agent named in the Certificate or such other office (which
need not be a place of business of the Company) as the Management Committee may
designate from time to time in the manner provided by law. The registered agent
of the Company in the State of Delaware shall be the initial registered agent
named in the Certificate or such other Person or Persons as the Management
Committee may designate from time to time in the manner provided by law. The
principal office of the Company shall be at such place as the Management
Committee may designate from time to time, which need not be in the State of
Delaware, and the Company shall maintain records at such place. The Company may
have such other offices as the Management Committee may designate from time to
time.
SECTION 2.7 NO STATE-LAW PARTNERSHIP. The Unitholders
intend that the Company shall not be a partnership (including a limited
partnership) or joint venture, and that no Unitholder, Representative or Officer
shall be a partner or joint venturer of any other Unitholder, Representative or
Officer by virtue of this Agreement, for any purposes other than as set forth in
the last sentence of this SECTION 2.7, and this Agreement shall not be construed
to the contrary. The Unitholders intend that the Company shall be treated as a
partnership for federal and, if applicable, state or local income tax purposes,
and each Unitholder and the Company shall file all tax returns and shall
otherwise take all tax and financial reporting positions in a manner consistent
with such treatment.
SECTION 2.8 AMENDMENT AND RESTATEMENT. This Agreement
amends, restates and supersedes in its entirety the Original Agreement.
SECTION 2.9 ISSUANCE OF ADDITIONAL UNITS. The Management
Committee shall have the right to cause the Company to create and issue
preferred units in connection with the exercise of the Company's rights and/or
obligations to purchase Class A Units, Class B Units and Class C Units from
certain Members each of whom is also a party to a Management Stock Purchase and
Unit Subscription Agreement, dated as of the date hereof, by and between such
Member and the Company (collectively, the "MANAGEMENT STOCK PURCHASE AND UNIT
SUBSCRIPTION AGREEMENTS"). Subject to the provisions of the Management Stock
Purchase and Unit Subscription Agreement, the Management Committee shall
determine the terms and conditions governing the issuance of any of such
preferred units. In addition, the Management Committee shall have the right to
issue Class B Units and Class C Units; PROVIDED THAT, the Management Committee
shall not authorize the issuance of either Class B Units or Class C Units in
excess of the number of such Class B Units and Class C Units, as the case may
be, issued as of the date hereof (it being understood that any Class B Units
14
or Class C Units repurchased by the Company shall no longer be considered
"issued" for purposes hereof) unless (A) for so long as he serves as Chief
Executive Officer of ▇▇▇▇▇▇▇ Foods, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ provides his written
consent to such issuance or (B) if ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ shall cease to be the
Chief Executive Officer of ▇▇▇▇▇▇▇ Foods, the holders of a majority of the
outstanding Class B Units or Class C Units, as the case may be, approve such
issuance. In addition, the holders of a majority of Class A Units shall have the
right to cause the Company to create and issue additional units, PROVIDED that
no such issuance shall adversely affect the relationship among the Class A
Units, Class B Units and Class C Units as set forth herein.
ARTICLE III
MANAGEMENT
SECTION 3.1 THE MANAGEMENT COMMITTEE; DELEGATION OF
AUTHORITY AND DUTIES.
(a) MEMBERS AND MANAGEMENT COMMITTEE. The Members shall
possess all rights and powers as provided in the Act and otherwise by
law. Except as otherwise expressly provided for herein, the Members
hereby consent to the exercise by the Management Committee of all such
powers and rights conferred on them by the Act with respect to the
management and control of the Company. Notwithstanding the foregoing and
except as explicitly set forth in this Agreement, if a vote, consent or
approval of the Members is required by the Act or other applicable law
with respect to any act to be taken by the Company or matter considered
by the Management Committee, each Member agrees that it shall be deemed
to have consented to or approved such act or voted on such matter in
accordance with a vote of the Management Committee on such act or
matter. No Member, in its capacity as a Member, shall have any power to
act for, sign for or do any act that would bind the Company. The
Members, acting through the Management Committee, shall devote such time
and effort to the affairs of the Company as they may deem appropriate
for the oversight of the management and affairs of the Company. Each
Member acknowledges and agrees that no Member shall, in its capacity as
a Member, be bound to devote all of such Member's business time to the
affairs of the Company, and that each Member and such Member's
Affiliates do and will continue to engage for such Member's own account
and for the account of others in other business ventures.
(b) DELEGATION BY MANAGEMENT COMMITTEE. The Management
Committee shall have the power and authority to delegate to one or more
other Persons the Management Committee's rights and powers to manage and
control the business and affairs of the Company, including to delegate
to agents and employees of a Member, a Representative or the Company
(including Officers), and to delegate by a management agreement or
another agreement with, or otherwise to, other Persons. The Management
Committee may authorize any Person (including, without limitation, any
Member, Officer or Representative) to enter into and perform under any
document on behalf of the Company.
15
(c) COMMITTEES. The Management Committee may, from time to
time, designate one or more committees, each of which shall be comprised
of at least two Representatives. Any such committee, to the extent
provided in the enabling resolution and until dissolved by the
Management Committee, shall have and may exercise any or all of the
authority of the Management Committee. At every meeting of any such
committee, the presence of a majority of all the representatives thereof
shall constitute a quorum, and the affirmative vote of a majority of the
representatives present shall be necessary for the adoption of any
resolution. The Management Committee may dissolve any committee at any
time, unless otherwise provided in the Certificate or this Agreement.
SECTION 3.2 ESTABLISHMENT OF MANAGEMENT COMMITTEE.
(a) REPRESENTATIVES. There shall be established a Management
Committee composed of up to nine (9) Persons all of whom shall be
individuals ("REPRESENTATIVES") who shall be elected by a majority vote
of the holders of Class A Units and Class B Units, voting together as a
single class, and each such Member shall have one vote for each Class A
Unit and/or Class B Unit held by such Member. Any Representative may be
removed from the Management Committee at any time by the holders of a
majority of the total voting power of the outstanding Class A Units and
Class B Units. Each Representative shall remain in office until his or
her death, resignation or removal, and in the event of death,
resignation or removal of a Representative, the party or parties, as
applicable, which designated such Representative shall fill the vacancy
created.
(b) DUTIES. The Representatives, in the performance of their
duties, shall owe to the Company and the Members duties of loyalty and
due care of the type owed by the directors of a corporation to such
corporation and its stockholders under the laws of the State of
Delaware.
(c) ABSENCE. A Representative may, in isolated instances
arising from exigent circumstances, designate a Person to act as his or
her substitute and in his or her place at any meeting of the Management
Committee. Such Person shall have all power of the absent
Representative, and references herein to a "Representative" at a meeting
shall be deemed to include his or her substitute. Notwithstanding
anything in this Agreement to the contrary, Representatives, in their
capacities as such, shall not be deemed to be "members" or "managers"
(as such terms are defined in the Act) of the Company; PROVIDED THAT,
for the purpose of clarity and the avoidance of doubt, nothing contained
in this sentence shall relieve or diminish any Representative's duties
under SECTION 3.2(b) hereof.
(d) NO INDIVIDUAL AUTHORITY. No Representative has the
authority or power to act for or on behalf of the Company, to do any act
that would be binding on the Company or to make any expenditures or
incur any obligations on behalf of the Company or authorize any of the
foregoing, other than acts that are expressly authorized by the
Management Committee.
16
(e) CONFLICT. Each provision of this SECTION 3.2 is subject
to the terms and provisions of the Securityholders Agreement, and to the
extent any such provisions apply, they are then to be construed as being
incorporated in this Agreement and made a part hereof.
SECTION 3.3 MANAGEMENT COMMITTEE MEETINGS.
(a) QUORUM. A majority of the total number of
Representatives shall constitute a quorum for the transaction of
business of the Management Committee and, except as otherwise provided
in this Agreement, the act of a majority of the Representatives present
at a meeting of the Management Committee at which a quorum is present
shall be the act of the Management Committee. A Representative who is
present at a meeting of the Management Committee at which action on any
matter is taken shall be presumed to have assented to the action unless
his dissent shall be entered in the minutes of the meeting or unless he
shall file his written dissent to such action with the Person acting as
secretary of the meeting before the adjournment thereof or shall deliver
such dissent to the Company immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a Representative who
voted in favor of such action.
(b) PLACE, WAIVER OF NOTICE. Meetings of the Management
Committee may be held at such place or places as shall be determined
from time to time by resolution of the Management Committee. At all
meetings of the Management Committee, business shall be transacted in
such order as shall from time to time be determined by resolution of the
Management Committee. Attendance of a Representative at a meeting shall
constitute a waiver of notice of such meeting, except where a
Representative attends a meeting for the express purpose of objecting to
the transaction of any business on the ground that the meeting is not
lawfully called or convened.
(c) REGULAR MEETINGS. Regular meetings of the Management
Committee shall be held at such times and places as shall be designated
from time to time by resolution of the Management Committee. Notice of
such meetings shall not be required.
(d) SPECIAL MEETINGS. Special meetings of the Management
Committee may be called on at least 24 hours notice to each
Representative by the chairman or any two Representatives. Such notice
need not state the purpose or purposes of, nor the business to be
transacted at, such meeting, except as may otherwise be required by law
or provided for in this Agreement.
(e) NOTICE. Notice of any special meeting of the Management
Committee or other committee may be given personally, by mail,
facsimile, courier or other means and, if other than personally, shall
be deemed given when written notice is delivered
17
to the office of the Representative at the address of the Representative
in the books and records of the Company.
SECTION 3.4 CHAIRMAN. The Management Committee shall
designate a Representative to serve as chairman. The chairman shall preside at
all meetings of the Management Committee. If the chairman is absent at any
meeting of the Management Committee, a majority of the Representatives present
shall designate another Representative to serve as interim chairman for that
meeting. The chairman shall have no authority or power to act for or on behalf
of the Company, to do any act that would be binding on the Company or to make
any expenditure or incur any obligations on behalf of the Company or authorize
any of the foregoing. The chairman shall initially be ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and
shall continue to be ▇▇. ▇▇▇▇▇▇▇▇▇ during the period during which he is the
Chief Executive Officer of ▇▇▇▇▇▇▇ Foods.
SECTION 3.5 APPROVAL OR RATIFICATION OF ACTS OR CONTRACTS.
Any act or contract that shall be approved or be ratified by the Management
Committee shall be as valid and as binding upon the Company and upon all the
Members (in their capacity as Members) as if it shall have been approved or
ratified by every Member of the Company; PROVIDED, HOWEVER, the Management
Committee shall not permit the Company or its subsidiaries to engage in any act
or enter into any contract or other arrangement involving the payment by the
Company or its subsidiaries of any fees or compensation to VCP or its Affiliates
(excluding from this proviso any fees or compensation payable pursuant to that
certain Management Agreement, dated as of the date hereof, by and among the
Company, Vestar Capital Partners and the other parties named therein) unless a
majority of the Representatives (excluding the Vestar Directors (as such term is
defined in the Securityholders Agreement)) provide written consent to such
action, contract or other arrangement.
SECTION 3.6 ACTION BY WRITTEN CONSENT OR TELEPHONE
CONFERENCE. Any action permitted or required by the Act, the Certificate or this
Agreement to be taken at a meeting of the Management Committee or any committee
designated by the Management Committee may be taken without a meeting if a
consent in writing, setting forth the action to be taken, is signed by a
majority of the Representatives or representatives of such other committee, as
the case may be. Such consent shall have the same force and effect as a vote at
a meeting and may be stated as such in any document or instrument filed with the
Secretary of State of the State of Delaware, and the execution of such consent
shall constitute attendance or presence in person at a meeting of the Management
Committee or any such other committee, as the case may be. Subject to the
requirements of this Agreement for notice of meetings, the Representatives, or
representatives of any other committee designated by the Management Committee,
may participate in and hold a meeting of the Management Committee or any such
other committee, as the case may be, by means of a conference telephone or
similar communications equipment by means of which all Persons participating in
the meeting can hear each other, and participation in such meeting shall
constitute attendance and presence in person at such meeting, except where a
Person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
18
SECTION 3.7 OFFICERS.
(a) DESIGNATION AND APPOINTMENT. The Management Committee
may, from time to time, employ and retain Persons as may be necessary or
appropriate for the conduct of the Company's business (subject to the
supervision and control of the Management Committee), including
employees, agents and other Persons (any of whom may be a Member or
Representative) who may be designated as Officers of the Company, with
titles including "chief executive officer," "chairman," "president,"
"vice president," "treasurer," "secretary," "general manager,"
"director" and "chief financial officer," as and to the extent
authorized by the Management Committee. Any number of offices may be
held by the same Person. In its discretion, the Management Committee may
choose not to fill any office for any period as it may deem advisable.
Officers need not be residents of the State of Delaware or Members. Any
Officers so designated shall have such authority and perform such duties
as the Management Committee may, from time to time, delegate to them.
The Management Committee may assign titles to particular Officers. Each
Officer shall hold office until his successor shall be duly designated
and shall qualify or until his death or until he shall resign or shall
have been removed in the manner hereinafter provided. The salaries or
other compensation, if any, of the Officers of the Company shall be
fixed from time to time by the Management Committee.
(b) RESIGNATION/REMOVAL. Any Officer may resign as such at
any time. Such resignation shall be made in writing and shall take
effect at the time specified therein, or if no time is specified, at the
time of its receipt by the Management Committee. The acceptance of a
resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation. Subject to clauses (d), (e)
and (f) of this SECTION 3.7, any Officer may be removed as such, either
with or without cause at any time by the Management Committee.
Designation of an Officer shall not of itself create any contractual or
employment rights.
(c) DUTIES OF OFFICERS GENERALLY. The Officers, in the
performance of their duties as such, shall owe to the Company duties of
loyalty and due care of the type owed by the officers of a corporation
to such corporation and its stockholders under the laws of the State of
Delaware.
(d) CHIEF EXECUTIVE OFFICER. Subject to the powers of the
Management Committee, the chief executive officer of the Company shall
be in general and active charge of the entire business and affairs of
the Company, and shall be its chief policy making officer. The chief
executive officer shall initially be ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and shall
continue to be ▇▇. ▇▇▇▇▇▇▇▇▇ during the period during which he is the
Chief Executive Officer of ▇▇▇▇▇▇▇ Foods.
(e) PRESIDENT. The president shall, subject to the powers of
the Management Committee and chief executive officer, have general and
active management
19
of the business of the Company; and shall see that all orders and
resolutions of the Management Committee are carried into effect. The
president shall have such other powers and perform such other duties as
may be prescribed by the chief executive officer or the Management
Committee. The president shall initially be ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and shall
continue to be ▇▇. ▇▇▇▇▇▇▇▇▇ during the period during which he is the
Chief Executive Officer of ▇▇▇▇▇▇▇ Foods.
(f) CHIEF FINANCIAL OFFICER. The chief financial officer
shall keep and maintain, or cause to be kept and maintained, adequate
and correct books and records of accounts of the properties and business
transactions of the Company, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses and capital. The
chief financial officer shall have the custody of the funds and
securities of the Company, and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Company, and shall
deposit all moneys and other valuable effects in the name and to the
credit of the Company in such depositories as may be designated by the
Management Committee. The chief financial officer shall have such other
powers and perform such other duties as may from time to time be
prescribed by the chief executive officer or the Management Committee.
The chief financial officer shall initially be ▇▇▇▇ ▇. ▇▇▇▇▇ and shall
continue to be ▇▇. ▇▇▇▇▇ during the period during which he is the Chief
Financial Officer of ▇▇▇▇▇▇▇ Foods.
(g) VICE PRESIDENT(S). The vice president(s) shall perform
such duties and have such other powers as the chief executive officer or
the Management Committee may from time to time prescribe. The Vice
Presidents shall initially be ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
(h) SECRETARY.
(i) The secretary shall attend all meetings of
the Management Committee, and shall record all the proceedings of
the meetings in a book to be kept for that purpose, and shall
perform like duties for the standing committees of the Management
Committee when required. The secretary shall initially be ▇▇▇▇ ▇.
▇▇▇▇▇.
(ii) The secretary shall keep all documents
described in ARTICLE VI and such other documents as may be
required under the Act. The secretary shall perform such other
duties and have such other authority as may be prescribed
elsewhere in this Agreement or from time to time by the chief
executive officer or the Management Committee. The secretary
shall have the general duties, powers and responsibilities of a
secretary of a corporation.
(iii) If the Management Committee chooses
to appoint an assistant secretary or assistant secretaries, the
assistant secretaries, in the order of
20
their seniority, in the absence, disability or inability to act
of the secretary, shall perform the duties and exercise the
powers of the secretary, and shall perform such other duties as
the chief executive officer or the Management Committee may from
time to time prescribe.
SECTION 3.8 MANAGEMENT MATTERS.
(a) TRANSFER OF PROPERTY. All property owned by the Company
shall be registered in the Company's name, in the name of a nominee or
in "street name" as the Management Committee may from time to time
determine. Any corporation, brokerage firm or transfer agent called upon
to transfer any Securities to or from the name of the Company shall be
entitled to rely on instructions or assignments signed or purported to
be signed by any Officer or Representative without inquiry as to the
authority of the Person signing or purporting to sign such instructions
or assignments or as to the validity of any transfer to or from the name
of the Company. At the time of any such transfer, any such corporation,
brokerage firm or transfer agent shall be entitled to assume that (i)
the Company is then in existence and (ii) that this Agreement is in full
force and effect and has not been amended, in each case unless such
corporation, brokerage firm or transfer agent shall have received
written notice to the contrary.
(b) EXISTENCE AND GOOD STANDING. The Management Committee
may take all action which may be necessary or appropriate (i) for the
continuation of the Company's valid existence as a limited liability
company under the laws of the State of Delaware (and of each other
jurisdiction in which such existence is necessary to enable the Company
to conduct the business in which it is engaged) and (ii) for the
maintenance, preservation and operation of the business of the Company
in accordance with the provisions of this Agreement and applicable laws
and regulations. The Management Committee may file or cause to be filed
for recordation in the office of the appropriate authorities of the
State of Delaware, and in the proper office or offices in each other
jurisdiction in which the Company is formed or qualified, such
certificates (including certificates of limited liability companies and
fictitious name certificates) and other documents as are required by the
applicable statutes, rules or regulations of any such jurisdiction or as
are required to reflect the identity of the Members and the amounts of
their respective capital contributions.
(c) INVESTMENT COMPANY ACT. The Management Committee shall
use its best efforts to assure that the Company shall not be subject to
registration as an investment company pursuant to the Investment Company
Act of 1940, as amended.
(d) NO UBTI;ECI. The Company shall not, directly or through
any pass-through entity in which it holds an interest, engage in any
transaction or activity that shall cause its Unitholders, or any of such
Unitholder's limited partners, which, in the case of clause (i), are
exempt from income taxation under Section 501(a) of the Code, or, in the
case of clause (ii), are non-U.S. persons, to recognize (i) unrelated
business taxable income,
21
as defined in Section 512 and Section 514 of the Code, that is taxable
to such Persons under Section 511 of the Code or (ii) income that is
"effectively connected" with a U.S. trade or business, as defined in
Section 864(b) of the Code.
SECTION 3.9 SECURITIES IN HOLDINGS. The Company shall vote
all of the securities it holds in Holdings as directed by the Management
Committee.
SECTION 3.10 LIABILITY OF UNITHOLDERS.
(a) NO PERSONAL LIABILITY. Except as otherwise
required by applicable law and as expressly set forth in this Agreement,
no Unitholder shall have any personal liability whatsoever in such
Person's capacity as a Unitholder, whether to the Company, to any of the
other Unitholders, to the creditors of the Company or to any other third
party, for the debts, liabilities, commitments or any other obligations
of the Company or for any losses of the Company. Each Unitholder shall
be liable only to make such Unitholder's Initial Capital Contribution to
the Company, if applicable, and the other payments provided expressly
herein.
(b) RETURN OF DISTRIBUTIONS. In accordance with the
Act and the laws of the State of Delaware, a member of a limited
liability company may, under certain circumstances, be required to
return amounts previously distributed to such member. It is the intent
of the Members that no distribution to any Member pursuant to ARTICLE V
hereof shall be deemed a return of money or other property paid or
distributed in violation of the Act. The payment of any such money or
distribution of any such property to a Member shall be deemed to be a
compromise within the meaning of the Act, and the Member receiving any
such money or property shall not be required to return to any Person any
such money or property. However, if any court of competent jurisdiction
holds that, notwithstanding the provisions of this Agreement, any Member
is obligated to make any such payment, such obligation shall be the
obligation of such Member and not of any Representative or other Member.
SECTION 3.11 INDEMNIFICATION BY THE COMPANY. Subject to the
limitations and conditions provided in this SECTION 3.11, each Person who was or
is made a party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or arbitrative (hereinafter a "PROCEEDING"), or any
appeal in such a Proceeding or any inquiry or investigation that could lead to
such a Proceeding, by reason of the fact that he, she, or it, or a Person of
which he, she or it is the legal representative, is or was a Unitholder, Officer
or Representative shall be indemnified by the Company to the fullest extent
permitted by applicable law, as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights than said law
permitted the Company to provide prior to such amendment) against all judgments,
penalties (including excise and similar taxes and punitive damages), fines,
settlements and reasonable expenses (including reasonable attorneys' fees and
22
expenses) actually incurred by such Person in connection with such Proceeding,
appeal, inquiry or investigation if such Person acted in Good Faith, and
indemnification under this SECTION 3.11 shall continue as to a Person who has
ceased to serve in the capacity which initially entitled such Person to
indemnity hereunder. The rights granted pursuant to this SECTION 3.11 shall be
deemed contract rights, and no amendment, modification or repeal of this SECTION
3.11 shall have the effect of limiting or denying any such rights with respect
to actions taken or Proceedings, appeals, inquiries or investigations arising
prior to any amendment, modification or repeal. It is expressly acknowledged
that the indemnification provided in this SECTION 3.11 could involve
indemnification for negligence or under theories of strict liability. "GOOD
FAITH" shall mean a Person having acted in good faith and in a manner such
Person reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to a criminal proceeding, having had no reasonable
cause to believe such Person's conduct was unlawful.
23
ARTICLE IV
CAPITAL CONTRIBUTIONS; ALLOCATIONS; DISTRIBUTIONS
SECTION 4.1 CAPITAL CONTRIBUTIONS. The Members listed on
SCHEDULE A hereto have made initial Capital Contributions to the Company in the
amounts and of the type set forth in EXHIBIT I hereto (with respect to each
Member, an "INITIAL CAPITAL CONTRIBUTION").
SECTION 4.2 CAPITAL ACCOUNTS.
(a) CREATION. There shall be established for each
Unitholder on the books of the Company a Capital Account which shall be
increased or decreased in the manner set forth in this Agreement.
(b) NEGATIVE BALANCE. A Unitholder shall not have
any obligation to the Company or to any other Unitholder to restore any
negative balance in the Capital Account of such Unitholder.
SECTION 4.3 ALLOCATIONS OF NET INCOME AND NET LOSS.
(a) TIMING AND AMOUNT OF ALLOCATIONS OF NET INCOME
AND NET LOSS. Net Income and Net Loss of the Company shall be determined
and allocated with respect to each fiscal year of the Company as of the
end of each such year or as circumstances otherwise require or allow.
Subject to the other provisions of this SECTION 4.3, an allocation to a
Unitholder of a share of Net Income or Net Loss shall be treated as an
allocation of the same share of each item of income, gain, loss or
deduction that is taken into account in computing Net Income or Net
Loss.
(b) GENERAL ALLOCATIONS.
(i) NET INCOME AND NET LOSS. After giving
effect to the special allocations provided in SECTIONS 4.3(c)
and 4.3(d), and except as provided in SECTION 4.3(f), all Net
Income and Net Loss of the Company for a fiscal year shall be
allocated to the Unitholders as follows:
(A) FIRST, Net Income will be
allocated to the Unitholders having deficit balances in
their Capital Accounts (computed after giving effect to
all contributions, distributions, allocations and other
Capital Account adjustments for all taxable years (other
than the items comprising the Net Income or Net Loss of
the Company being allocated to the Unitholders for the
current fiscal year), after adding back each
Unitholder's share of Company Minimum Gain and Member
Minimum Gain as provided in Regulations Sections
1.704-2(g) and 1.704-2(i)(5)), to the extent of, and in
proportion to, those deficits, unless satisfied by
allocations under SECTION 4.3(c) hereof; and
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(B) SECOND, Net Income and Net Loss not
allocated under SECTION 4.3(b)(i)(A) will be allocated
so as to cause the credit balance in each Unitholder's
Capital Account (computed in the same manner as provided
parenthetically in SECTION 4.3(b)(i)(A) hereof) to
equal, as nearly as possible, the amount such Unitholder
would receive if the Company sold all of its assets for
the Gross Asset Value of each such asset and distributed
the proceeds thereof (after satisfaction of any
liabilities of the Company) in accordance with the
provisions of SECTION 4.4 hereof (and assuming that
Dairy Holdings LLC simultaneously sold all of its assets
for the Gross Asset Value (as such term is defined in
the Dairy Holdings LLC Agreement) of each such asset and
distributed the proceeds thereof (after satisfaction of
any liabilities of Dairy Holdings LLC) in accordance
with the provisions of Section 4.4 of the Dairy Holdings
LLC Agreement).
(c) ADDITIONAL ALLOCATION PROVISIONS.
Notwithstanding the foregoing provisions of this SECTION 4.3:
(i)
(A) If there is a net decrease in
Company Minimum Gain or Member Minimum Gain during any
fiscal year, the Unitholders shall be allocated items of
Company income and gain for such fiscal year (and, if
necessary, for subsequent fiscal years) in accordance
with Regulations Section 1.704-2(f) or 1.704-2(i)(4), as
applicable. It is intended that this SECTION
4.3(c)(i)(A) qualify and be construed as a "minimum gain
chargeback" and a "chargeback of partner nonrecourse
debt minimum gain" within the meaning of such
Regulations, which shall be controlling in the event of
a conflict between such Regulations and this SECTION
4.3(c)(i)(A).
(B) Any Nonrecourse Deductions for any
fiscal year shall be specially allocated to the holders
of Class A Units in accordance with the number of Class
A Units held by each such Unitholder. Any Member
Nonrecourse Deductions for any fiscal year shall be
specially allocated to the Unitholder(s) who bears the
economic risk of loss with respect to the Member
Nonrecourse Debt to which such Member Nonrecourse
Deductions are attributable, in accordance with
Regulations Section 1.704- 2(i).
(C) If any Unitholder unexpectedly
receives an adjustment, allocation or distribution
described in Regulations Section 1.704-
1(b)(2)(ii)(d)(4), (5) or (6), items of Company income
and gain shall be allocated, in accordance with
Regulations Section 1.704- 1(b)(2)(ii) (d), to the
Unitholder in an amount and manner sufficient to
eliminate, to the extent by such Regulations, the
Adjusted Capital Account Deficit of the Unitholder
25
as quickly as possible. It is intended that this SECTION
4.3(c)(i)(C) qualify and be construed as a "qualified
income offset" within the meaning of Regulations 1.704-
1(b)(2)(ii)(d), which shall be controlling in the event
of a conflict between such Regulations and this SECTION
4.3(c)(i)(C).
(D) The allocations set forth in
SECTIONS 4.3(c)(i)(A), (B) and (C) (the "REGULATORY
ALLOCATIONS") are intended to comply with certain
regulatory requirements, including the requirements of
Regulations Sections 1.704-1(b) and 1.704-2.
Notwithstanding the provisions of SECTION 4.3(b), the
Regulatory Allocations shall be taken into account in
allocating other items of income, gain, loss and
deduction among the Unitholders so that, to the extent
possible, the net amount of such allocations of other
items and the Regulatory Allocations to each Unitholder
shall be equal to the net amount that would have been
allocated to each such Unitholder if the Regulatory
Allocations had not occurred.
(ii) For any fiscal year during which a
Unitholder's interest in the Company is assigned by such
Unitholder, the portion of the Net Income and Net Loss of the
Company that is allocable in respect of such Unitholder's
interest shall be apportioned between the assignor and the
assignee of such Unitholder's interest using any permissible
method under Code Section 706 and the Regulations thereunder, as
determined by the Management Committee.
(iii) In the event that any amount claimed by the
Company to constitute a deductible expense in any fiscal year is
treated for federal income tax purposes as a distribution made to
a Unitholder in its capacity as a partner of the Company and not
a payment to a Unitholder not acting in its capacity as a partner
under Code Section 707(a), then the Unitholder who is deemed to
have received such distribution shall first be allocated an
amount of Company gross income equal to such payment, its Capital
Account shall be reduced to reflect the distribution, and for
purposes of SECTION 4.3, Net Income and Net Loss shall be
determined after making the allocation required by this SECTION
4.3(c)(iii).
(iv) In the event that any amount claimed by the
Company to constitute a distribution made to a Unitholder in its
capacity as a partner of the Company is treated for federal
income tax purposes as a deductible expense of the Company for a
payment to a Unitholder not acting in its capacity as a partner
of the Company, then the Unitholder who is deemed to have
received such payment shall first be allocated the Company
expense item attributable to such payment, its Capital Account
shall be reduced to reflect the allocation, and for purposes of
SECTION 4.3, Net Income and Net Loss shall be determined after
making the allocation required by this SECTION 4.3(c)(iv).
26
(d) REQUIRED TAX ALLOCATIONS. All items of income,
gain, loss, deduction and credit for federal income tax purposes shall be
allocated to each Unitholder in the same manner as the Net Income or Net
Loss (and each item of income, gain, loss and deduction related thereto)
that is allocated to such Unitholder pursuant to SECTION 4.3(a), (b) and
(c) to which such tax items relate. Notwithstanding the foregoing
provisions of this SECTION 4.3, income, gain, loss, deduction, and
credits with respect to property contributed to the Company by a
Unitholder shall be allocated among the Unitholders for federal and state
income tax purposes pursuant to Regulations promulgated under Section
704(c) of the Code, so as to take account of the variation, if any,
between the adjusted basis for federal income tax purposes of the
property to the Company and its initial Gross Asset Value at the time of
contribution. In the event the Gross Asset Value of any Company asset is
adjusted pursuant to subparagraph (b), (c), or (d) of the definition of
Gross Asset Value, subsequent allocations of income, gain, loss,
deduction, and credits with respect to such asset shall take account of
the variation, if any, between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in the same manner
as under Code Section 704(c) and the applicable Regulations consistent
with the requirements of Treasury Regulation Section
1.704-1(b)(2)(iv)(g). Allocations pursuant to this SECTION 4.3(d) are
solely for purposes of federal, state and local income taxes and shall
not affect, or in any way be taken into account in computing, any
Unitholder's Capital Account or share of Net Income, Net Loss, other tax
items or distributions pursuant to any provision of this Agreement.
(e) UNITHOLDERS' TAX REPORTING. The Unitholders
acknowledge and are aware of the income tax consequences of the
allocations made by this SECTION 4.3 and, except as may otherwise be
required by applicable law or regulatory requirements, hereby agree to be
bound by the provisions of SECTION 4.3 in reporting their shares of
Company income, gain, loss, deductions, and credits for federal, state
and local income tax purposes.
(f) WITHHOLDING. Each Unitholder hereby authorizes the
Company to withhold and to pay over any taxes payable by the Company or
any of its Affiliates as a result of the participation by such Unitholder
(or any Assignee of, or Successor in Interest to, such Unitholder) in the
Company; PROVIDED THAT, prior to withholding any amount in respect of
Minnesota income taxes from any Unitholder, the Company shall provide
such Unitholder a reasonable opportunity to provide the Company an
exemption certificate, or its equivalent, to exonerate the Company from
any obligation to withhold such tax. If and to the extent that the
Company shall be required to withhold any taxes, such Unitholder shall be
deemed for all purposes of this Agreement to have received a payment from
the Company as of the time such withholding is required to be paid, which
payment shall be deemed to be a distribution to such Unitholder under
SECTION 4.4(a) or SECTION 5.2 to the extent that the Unitholder is
entitled to receive a distribution and shall be taken into account in
determining the amount of future distributions to such Unitholder. To the
extent that the aggregate of such payments to a Unitholder for any period
exceeds the distributions to which such Unitholder is entitled for such
period, the amount of such excess shall be considered a demand loan from
the Company to such Unitholder, with interest at an interest rate of 9%
compounded annually,
27
which interest shall be treated as an item of Company income until
discharged by such Unitholder by repayment, which may be made in the sole
discretion of the Management Committee out of distributions to which such
Unitholder would otherwise be subsequently entitled. The withholdings
referred to in this SECTION 4.3 shall be made at the maximum applicable
statutory rate under applicable tax law unless the Management Committee
receives documentation, satisfactory to the Management Committee, to the
effect that a lower rate is applicable, or that no withholding is
applicable.
SECTION 4.4 DISTRIBUTIONS.
(a) PRIORITY. Distributable Assets will be distributed
(or set aside for the benefit of the applicable Unitholder in the
discretion of the Management Committee) as soon as reasonably practicable
after such Distributable Assets become available to the Company, subject
to SECTIONS 4.4(b) and (c) as follows:
(i) FIRST, 100% of the Distributable Assets shall
be distributed to the Unitholders pro rata in accordance with each
such Unitholder's Unreturned Capital until each such Unitholder's
Unreturned Capital has been reduced to zero;
(ii) SECOND, after the required distributions
pursuant to subparagraph (i) above, 100% of the Distributable
Assets shall be distributed to the holders of Class A Units, pro
rata in accordance with the aggregate amount of such Unitholders'
Unpaid Preferred Return until each such Unitholder's Unpaid
Preferred Return has been reduced to zero;
(iii) THIRD, after the required distributions
pursuant to subparagraph (ii) above, until the First Performance
Hurdle has been satisfied, 100% of the Distributable Assets shall
be distributed as follows:
(A) 92.5% to the holders of Class A
Units and Class B Units, pro rata in accordance with
the number of Class A Units and Class B Units held by
each such Unitholder; and
(B) (1) a percentage, equal to the
product of (x) 7.5% multiplied by (y) the Class C
Fraction, to the holders of Class C Units, pro rata
in accordance with the number of Class C Units held
by each such Unitholder, and (2) a percentage, if
any, equal to the product of (x) 7.5% multiplied by
(y) one minus the Class C Fraction, to the holders of
Class A and Class B Units, pro rata in accordance
with the number of Class A Units and Class B Units
held by each such Unitholder;
(iv) FOURTH, after the required distributions
pursuant to subparagraph (iii) above, 100% of the Distributable
Assets shall be distributed to the
28
holders of Class C Units, pro rata in accordance with the number
of Class C Units held by each such Unitholder, until the
cumulative amount of distributions made to holders of Class C
Units pursuant to this SECTION 4.4(a)(iv) and SECTION
4.4(a)(iii)(B)(1) above is equal to (1) the product of (x) 12.5%
multiplied by (y) the Class C Fraction, multiplied by (2) the
cumulative distributions made to all Unitholders pursuant to this
SECTION 4.4(a)(iv) and SECTION 4.4(a)(iii) above;
(v) FIFTH, after the required distributions
pursuant to subparagraph (iv) above, until the Second Performance
Hurdle has been satisfied, 100% of the Distributable Assets shall
be distributed as follows:
(A) 87.5% to the holders of Class A Units
and Class B Units, pro rata in accordance with the number
of Class A Units and Class B Units held by each such
Unitholder; and
(B) (1) a percentage, equal to the product
of (x) 12.5% multiplied by (y) the Class C Fraction, to
the holders of Class C Units, pro rata in accordance with
the number of Class C Units held by each such Unitholder,
and (2) a percentage, if any, equal to the product of (x)
12.5% multiplied by (y) one minus the Class C Fraction,
to the holders of Class A and Class B Units, pro rata in
accordance with the number of Class A Units and Class B
Units held by each such Unitholder;
(vi) SIXTH, after the required distributions
pursuant to subparagraph (v) above, until the Third Performance
Hurdle has been satisfied, 100% of the Distributable Assets shall
be distributed as follows:
(A) 75% to the holders of Class A Units
and Class B Units, pro rata in accordance with the number
of Class A Units and Class B Units held by each such
Unitholder; and
(B) (1) a percentage, equal to the product
of (x) 25% multiplied by (y) the Class C Fraction, to the
holders of Class C Units, pro rata in accordance with the
number of Class C Units held by each such Unitholder, and
(2) a percentage, if any, equal to the product of (x) 25%
multiplied by (y) one minus the Class C Fraction, to the
holders of Class A and Class B Units, pro rata in
accordance with the number of Class A Units and Class B
Units held by each such Unitholder; and
(vii) SEVENTH, after the required distributions
pursuant to subparagraph (vi) above, 100% of the Distributable
Assets shall be distributed as follows:
29
(A) 67.5% to the holders of Class A Units
and Class B Units, pro rata in accordance with the number
of Class A Units and Class B Units held by each such
Unitholder; and
(B) (1) a percentage, equal to the product
of (x) 32.5% multiplied by (y) the Class C Fraction to
the holders of Class C Units, pro rata in accordance with
the number of Class C Units held by each such Unitholder,
and (2) a percentage, if any, equal to the product of (x)
32.5% multiplied by (y) one minus the Class C Fraction,
to the holders of Class A Units and Class B Units, pro
rata in accordance with the number of Class A Units and
Class B Units held by each such Unitholder;
PROVIDED that, if the Distributable Assets being distributed consist of
more than one kind of asset, all Distributable Assets consisting of cash
must be distributed before any other kind of asset is distributed.
(b) SUCCESSORS. For purposes of determining the amount
of distributions under this SECTION 4.4, each Unitholder shall be treated
as having received amounts received by its predecessors in respect of any
of such Unitholder's Units.
(c) TAX DISTRIBUTIONS. Subject to the Act and to any
restrictions contained in any agreement to which the Company is bound, no
later than the tenth day of each March, June, September and December, the
Company shall, to the extent of available cash, make a tax distribution
to each Unitholder in an amount equal to the excess of (i) the product of
(A) the cumulative taxable income (including any guaranteed payments for
services that are not actually received by such Unitholder in cash)
attributable to the Unitholder's investment as reported on the
Unitholder's Schedule K-1 allocated by the Company to the Unitholder, in
excess of the federal taxable loss carryforward deduction (assuming that
such carryforward was not applied against any non-Company income of such
Unitholder) to the extent that such loss carry-forward deduction would be
available to offset such taxable income of a Unitholder from its
investment in the Company and (B) the combined maximum federal, state and
local marginal income tax rate (taking into account the deductibility of
state and local taxes and adjusted appropriately for varying rates)
applicable to individuals, over (ii) all prior distributions pursuant to
this SECTION 4.4. All distributions made to a Unitholder pursuant to this
SECTION 4.4(c) on account of the taxable income allocated to such
Unitholder shall be treated as advance distributions under SECTION 4.4(a)
or SECTION 5.2 and shall be taken into account in determining the amount
of future distributions to such Unitholder. For purposes of determining
the amount of distributions to be made to the Unitholders pursuant to
SECTION 4.4(a) or SECTION 5.2, distributions made pursuant to this
SECTION 4.4(c) shall be deemed made at such time as they offset
distributions being made pursuant to SECTION 4.4(a) or SECTION 5.2.
30
SECTION 4.5 SECURITY INTEREST AND RIGHT OF SET-OFF. As security
for any withholding tax or other liability or obligation to which the Company
may be subject as a result of any act or status of any Unitholder, or to which
the Company may become subject with respect to the interest of any Unitholder,
the Company shall have (and each Unitholder hereby grants to the Company) a
security interest in all Distributable Assets distributable to such Unitholder
to the extent of the amount of such withholding tax or other liability or
obligation. The Company shall have a right of setoff against such distributions
of Distributable Assets in the amount of such withholding tax or other liability
or obligation, subject to the proviso in the first sentence of SECTION 4.3(f).
The Company may withhold distributions or portions thereof if it is required to
do so by the Code or any other provision of federal, state or local tax or other
law. Any amount withheld pursuant to the Code or any other provision of federal,
state or local tax or other law with respect to any distribution to a Unitholder
shall be treated as an amount distributed to such Unitholder for all purposes
under this Agreement.
ARTICLE V
WITHDRAWAL; DISSOLUTION; TRANSFER OF MEMBERSHIP INTERESTS;
ADMISSION OF NEW MEMBERS
SECTION 5.1 UNITHOLDER WITHDRAWAL. No Unitholder shall have the
power or right to withdraw or otherwise resign or be expelled from the Company
prior to the dissolution and winding up of the Company except pursuant to a
transfer permitted under this Agreement of all of such Unitholder's Units to an
Assignee, a Member or the Company. Notwithstanding anything to the contrary
contained in the Act, in no event shall any Unitholder be deemed to have
withdrawn from the Company or cease to be a Unitholder upon the occurrence of
any of the events specified in this Agreement, or any events similar thereto,
unless the Unitholder, after the occurrence of any such event, indicates in a
written instrument that the Unitholder has so withdrawn.
SECTION 5.2 DISSOLUTION.
(a) EVENTS. The Company shall be dissolved and its
affairs shall be wound up on the first to occur of the following:
(i) the unanimous vote of the Management
Committee;
(ii) (a) the written consent of the Members
holding a majority of the outstanding Class A Units, and (b) the
written consent of the Members holding a majority of the
outstanding Class B Units;
(iii) the entry of a decree of judicial
dissolution of the Company under Section 18-802 of the Act;
31
(iv) upon consummation of a Sale of the Company
(as defined in the Securityholders Agreement), upon consummation
of a Public Offering (as defined in the Securityholders
Agreement) or upon consummation of a merger or consolidation
pursuant to which the Company is not the surviving entity, each
with the consent of a majority of the Management Committee; and
(v) upon the liquidation, dissolution or winding
up of the Company or Holdings.
Except as provided in this Agreement, the death, retirement, resignation,
expulsion, incapacity, bankruptcy or dissolution of a Member, or the occurrence
of any other event that terminates the continued membership of a Member in the
Company, shall not cause a dissolution of the Company, and the Company shall
continue in existence subject to the terms and conditions of this Agreement.
(b) ACTIONS UPON DISSOLUTION. When the Company is
dissolved, the business and property of the Company shall be wound up and
liquidated by the Management Committee or, in the event of the
unavailability of the Management Committee, such Member or other
liquidating trustee as shall be named by the Management Committee.
(c) PRIORITY. Within 120 calendar days after the
effective date of dissolution of the Company, whether by expiration of
its full term or otherwise, the assets of the Company shall be
distributed in the following manner and order:
(i) All debts and obligations of the Company, if
any, shall first be paid, discharged or provided for by adequate
reserves; and
(ii) The balance shall be distributed to the
Unitholders in accordance with SECTION 4.4.
(d) CANCELLATION OF CERTIFICATE. On completion of the
distribution of Company assets as provided herein, the Company is
terminated, and shall file a certificate of cancellation with the
Secretary of State of the State of Delaware, cancel any other filings
made and take such other actions as may be necessary to terminate the
Company.
SECTION 5.3 TRANSFER BY UNITHOLDERS. Subject to the
Securityholders Agreement and this Agreement, a Unitholder may transfer or
assign all or part of its interest as a Unitholder in the Company to any Person
that agrees in writing to assume the responsibility of a Unitholder. Any Member
who shall assign any Units in the Company shall cease to be a Member of the
Company with respect to such Units and shall no longer have any rights or
privileges of a Member with respect to such Units. Any Member or Assignee who
acquires in any manner whatsoever any Units, irrespective of whether such Person
has accepted and adopted in writing the terms and provisions of this Agreement,
shall be deemed by the acceptance of the benefits of the acquisition thereof to
have agreed to be subject to and bound by all of the terms and conditions of
this Agreement that any
32
predecessor in such Units or other interest in the Company was subject to or by
which such predecessor was bound. No Member shall cease to be a Member upon the
collateral assignment of, or the pledging or granting of a security interest in,
its entire interest in the Company.
SECTION 5.4 ADMISSION OR SUBSTITUTION OF NEW MEMBERS.
(a) ADMISSION. The Management Committee shall have the
right, subject to SECTION 5.3, to admit as a Substitute Member or an
Additional Member, any Person who acquires an interest in the Company, or
any part thereof, from a Member or from the Company; PROVIDED THAT, the
Management Committee shall admit as a Substitute Member, subject to
SECTION 5.4(b), any transferee who acquires an interest in the Company
pursuant to an Exempt Transfer (as such term is defined in the
Securityholders Agreement). Concurrently with the admission of a
Substitute Member or an Additional Member, the Management Committee shall
forthwith cause any necessary papers to be filed and recorded and notice
to be given wherever and to the extent required showing the substitution
of a transferee as a Substitute Member in place of the transferring
Member, or the admission of an Additional Member, all at the expense,
including payment of any professional and filing fees incurred, of the
Substitute Member or the Additional Member.
(b) CONDITIONS. The admission of any Person as a
Substitute or Additional Member shall be conditioned upon (i) such
Person's written acceptance and adoption of all the terms and provisions
of this Agreement, either by (X) execution and delivery of a counterpart
signature page to this Agreement countersigned by a Representative on
behalf of the Company or (Y) any other writing evidencing the intent of
such Person to become a Substitute Member or Additional Member and such
writing is accepted by the Management Committee on behalf of the Company
and (ii) (at the request of the Management Committee) such Person's
execution and delivery of a counterpart to the Securityholders Agreement.
SECTION 5.5 COMPLIANCE WITH LAW. Notwithstanding any provision
hereof to the contrary, no sale or other disposition of an interest in the
Company may be made except in compliance with all federal, state and other
applicable laws, including federal and state securities laws. Nothing in this
SECTION 5.5 shall be construed to limit or otherwise affect any of the
provisions of the Securityholders Agreement or the Management Stock Purchase and
Unit Subscription Agreements, and to the extent any such provisions apply, they
are then to be construed as being incorporated in this Agreement and made a part
hereof.
ARTICLE VI
REPORTS TO MEMBERS; TAX MATTERS
SECTION 6.1 BOOKS OF ACCOUNT. Appropriate books of account shall
be kept by the Management Committee, in accordance with generally accepted
accounting principles, at the principal place of business of the Company, and
each Member shall have access to all books, records and accounts of the Company
and the right to make copies thereof for any purpose reasonably related
33
to the Member's interest as a member of the Company, in each case, under such
conditions and restrictions as the Management Committee may reasonably
prescribe.
SECTION 6.2 REPORTS.
(a) FINANCIAL STATEMENTS. As promptly as practicable
after the close of each fiscal year of the Company, the Management
Committee shall cause an examination of the financial statements of the
Company as of the end of each such fiscal year to be made in accordance
with generally accepted auditing standards as in effect on the date
thereof, by a firm of certified public accountants selected by the
Management Committee. Within 90 days after the close of each fiscal year,
a copy of the financial statements of the Company, including the report
of such certified public accountants, shall be furnished to each
Unitholder and shall include, as of the end of such fiscal year:
(i) a statement prepared by the Company setting
forth the balance of each Unitholder's Capital Account and the
amount of that Unitholder's allocable share of the Company's
items of Net Income or Net Loss and deduction, capital gain and
loss or credit for such year for each of its Economic Interests;
and
(ii) a balance sheet, a statement of income and
expense and a statement of changes in cash flows of the Company
for that fiscal year.
In addition, the Unitholders shall be supplied with all other Company
information necessary to enable each Unitholder to prepare its federal,
state, and local income tax returns.
(b) DETERMINATIONS. All determinations, valuations and
other matters of judgment required to be made for accounting purposes
under this Agreement shall be made by the Management Committee and shall
be conclusive and binding on all Unitholders, their Successors in
Interest and any other Person, and to the fullest extent permitted by
law, no such Person shall have the right to an accounting or an appraisal
of the assets of the Company or any successor thereto; PROVIDED, HOWEVER,
that with respect to determinations or valuations related to any
determination of which performance hurdle applies with respect to any
Company assets distributed in kind, if the holders of a majority of the
Class B Units disagree in good faith with the Management Committee's
determination, then such holders through a single representative shall
promptly notify the Company in writing of such disagreement, in which
event an independent appraiser, accountant or investment banking firm
(the "ARBITER") selected by mutual agreement of such holders and the
Management Committee shall make a determination of the Gross Asset Value
of the Company assets distributed in kind or other disputed item thereof
solely by (i) reviewing a single written presentation timely made by each
of the Company and the representative of such holders setting forth their
respective resolutions of the dispute and the bases therefor and (ii)
accepting either such holders' or the Company's proposed resolution of
the dispute. Promptly following the Company's receipt of such holders'
written notice of disagreement, the
34
Company shall make available to such holders all data (including reports
of employees and outside advisors) relied upon by the Management
Committee in making its determination. Such holders' and the Company's
written presentations must be submitted to the Arbiter within 30 days of
the Arbiter's engagement. The Arbiter shall notify the representative of
such holders and the Company of its decision within 40 days of its
engagement. The party whose proposed resolution is not accepted shall pay
all of the Arbiter's fees and expenses, which in the case of the holders
shall be limited only to those holders challenging the Management
Committee determination. If such holders' proposed resolution is
accepted, the Company also shall pay all of such holders' reasonable
out-of-pocket fees and expenses (including reasonable fees and expenses
of counsel and one appraiser, accountant or investment banking firm)
incurred in connection with the arbitration. Each of the Company and such
holders agrees to execute, if requested by the Arbiter, a reasonable
engagement letter with the Arbiter.
SECTION 6.3 FISCAL YEAR. The fiscal year of the Company shall end
on December 31st of each calendar year unless otherwise determined by the
Management Committee in accordance with Section 706 of the Code.
SECTION 6.4 CERTAIN TAX MATTERS.
(a) PREPARATION OF RETURNS. The Management Committee
shall cause to be prepared all federal, state and local tax returns of
the Company for each year for which such returns are required to be filed
and shall cause such returns to be timely filed. The Management Committee
shall determine the appropriate treatment of each item of income, gain,
loss, deduction and credit of the Company and the accounting methods and
conventions under the tax laws of the United States, the several states
and other relevant jurisdictions as to the treatment of any such item or
any other method or procedure related to the preparation of such tax
returns. The Management Committee may cause the Company to make or
refrain from making any and all elections permitted by such tax laws.
Each Unitholder agrees that it shall not, except as otherwise required by
applicable law or regulatory requirements, (i) treat, on its individual
income tax returns, any item of income, gain, loss, deduction or credit
relating to its interest in the Company in a manner inconsistent with the
treatment of such item by the Company as reflected on the Form K-1 or
other information statement furnished by the Company to such Unitholder
for use in preparing its income tax returns or (ii) file any claim for
refund relating to any such item based on, or which would result in, such
inconsistent treatment. In respect of an income tax audit of any tax
return of the Company, the filing of any amended return or claim for
refund in connection with any item of income, gain, loss, deduction or
credit reflected on any tax return of the Company, or any administrative
or judicial proceedings arising out of or in connection with any such
audit, amended return, claim for refund or denial of such claim, (A) the
Tax Matters Member (as defined below) shall be authorized to act for, and
its decision shall be final and binding upon, the Company and all
Unitholders except to the extent a Unitholder shall properly elect to be
excluded from such proceeding pursuant to the Code, (B) all expenses
incurred by the Tax
35
Matters Member in connection therewith (including attorneys',
accountants' and other experts' fees and disbursements) shall be expenses
of, and payable by, the Company, (C) no Unitholder shall have the right
to (1) participate in the audit of any Company tax return, (2) file any
amended return or claim for refund in connection with any item of income,
gain, loss, deduction or credit (other than items which are not
partnership items within the meaning of Section 6231(a)(4) of the Code or
which cease to be partnership items under Section 6231(b) of the Code)
reflected on any tax return of the Company, (3) participate in any
administrative or judicial proceedings conducted by the Company or the
Tax Matters Member arising out of or in connection with any such audit,
amended return, claim for refund or denial of such claim, or (4) appeal,
challenge or otherwise protest any adverse findings in any such audit
conducted by the Company or the Tax Matters Member or with respect to any
such amended return or claim for refund filed by the Company or the Tax
Matters Member or in any such administrative or judicial proceedings
conducted by the Company or the Tax Matters Member and (D) the Tax
Matters Member shall keep the Unitholders reasonably apprised of the
status of any such proceeding. Notwithstanding the previous sentence, if
a petition for a readjustment to any partnership item included in a final
partnership administrative adjustment is filed with a District Court or
the Court of Claims and the IRS has elected to assess income tax against
a Member with respect to that final partnership administrative
adjustments (rather than suspending assessments until the District Court
or Court of Claims proceedings become final), such Member shall be
permitted to file a claim for refund within such period of time to avoid
application of any statute of limitation provisions which would otherwise
prevent the Member from having any claim based on the final outcome of
that review.
(b) TAX MATTERS MEMBER. The Company and each Member
hereby designate VCP as the "tax matters partner" for purposes of Section
6231(a)(7) of the Code (the "TAX MATTERS MEMBER").
(c) CERTAIN FILINGS. Upon the sale of Company assets or
a liquidation of the Company, Unitholders shall provide the Management
Committee with certain tax filings as reasonably requested by the
Management Committee and required under applicable law.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 SCHEDULES. Without in any way limiting the provisions
of SECTION 6.2, a Representative may from time to time execute on behalf of the
Company and deliver to the Unitholders schedules which set forth the then
current Capital Account balances of each Unitholder and any other matters deemed
appropriate by the Management Committee or required by applicable law. Such
schedules shall be for information purposes only and shall not be deemed to be
part of this Agreement for any purpose whatsoever.
36
SECTION 7.2 GOVERNING LAW. THIS AGREEMENT IS GOVERNED BY AND
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE,
EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE
OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. In the
event of a direct conflict between the provisions of this Agreement and any
provision of the Certificate or any mandatory provision of the Act, the
applicable provision of the Certificate or the Act shall control. If any
provision of this Agreement or the application thereof to any Person or
circumstance is held invalid or unenforceable to any extent, the remainder of
this Agreement and the application of that provision to other Persons or
circumstances is not affected thereby and that provision shall be enforced to
the greatest extent permitted by law.
SECTION 7.3 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective Successors in Interest; PROVIDED that no Person claiming by, through
or under a Member (whether as such Member's Successor in Interest or otherwise),
as distinct from such Member itself, shall have any rights as, or in respect to,
a Member (including the right to approve or vote on any matter or to notice
thereof).
SECTION 7.4 CONFIDENTIALITY. By executing this Agreement, for
three years from the receipt thereof, each Member expressly agrees to maintain
the confidentiality of, and not to disclose to any Person other than the
Company, another Member or a Person designated by the Company or any of their
respective financial planners, accountants, attorneys or other advisors, any
information relating to the business, financial structure, financial position or
financial results, clients or affairs of the Company that shall not be generally
known to the public, except as otherwise required by law or by any regulatory or
self-regulatory organization having jurisdiction and except in the case of any
Member who is employed by any entity controlled by the Company in the ordinary
course of its duties. Notwithstanding the provisions of this SECTION 7.4 to the
contrary, in the event that either of the 4J2R1C Limited Partnership or the 3J2R
Limited Partnership desires to undertake any transfer of its Membership Interest
pursuant to clause (h)(2) of the definition of Exempt Transfer set forth in the
Securityholders Agreement, such transferring entity may, upon the execution of a
confidentiality agreement (in form reasonably acceptable to the Company's legal
counsel) by any bona fide potential transferee (unless such potential transferee
is a direct competitor of the Company or its Affiliates), disclose to such
potential transferee information of the sort otherwise restricted by this
SECTION 7.4 if either of the 4J2R1C Limited Partnership or the 3J2R Limited
Partnership, as the case may be, reasonably believes such disclosure is
necessary for the purpose of transferring such Membership Interest to the bona
fide potential transferee.
SECTION 7.5 AMENDMENTS. The Management Committee may, to the
fullest extent allowable under Delaware law, amend or modify this Agreement;
PROVIDED that, if an amendment or modification adversely affects any class of
Members, such class of Members must approve such amendment or modification;
PROVIDED FURTHER that, the Management Committee may amend this Agreement without
the consent of any class of Members in order to provide for the issuance of any
Company units in accordance with SECTION 2.9 hereof and the terms of the
Management Stock
37
Purchase and Unit Subscription Agreements and to make any such other amendments
as it deems necessary or desirable to reflect such additional issuances PROVIDED
that, no such amendment shall adversely affect the relationship among the Class
A Units, Class B Units and Class C Units as set forth herein; PROVIDED FURTHER
that no amendment shall be effective if such amendment results in Units held by
a Member being redesignated to a different class of Unit than the class of which
it is then included, without such Member's consent; and PROVIDED FURTHER that
SECTION 3.8(d) hereof shall not be amended without the written consent of
Marathon.
SECTION 7.6 NOTICES. Whenever notice is required or permitted by
this Agreement to be given, such notice shall be in writing and shall be given
to any Unitholder at its address or telecopy number shown in the Company's books
and records, or, if given to the Company, at the following address:
c/o Vestar Capital Partners
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Each proper notice shall be effective upon any of the following: (i) personal
delivery to the recipient, (ii) when telecopied to the recipient (with hard copy
sent to the recipient by reputable overnight courier service that same day or
the next business day (charges prepaid)), (iii) one business day after being
sent to the recipient by reputable overnight courier service (charges prepaid)
or (iv) two business days after being deposited in the mails (first class or
airmail postage prepaid).
SECTION 7.7 COUNTERPARTS. This Agreement may be executed in any
number of counterparts (including by means of telecopied signature pages), all
of which together shall constitute a single instrument.
SECTION 7.8 POWER OF ATTORNEY. Each Member hereby irrevocably
appoints each Representative as such Member's true and lawful representative and
attorney-in-fact, each acting alone, in such Member's name, place and stead, (i)
to make, execute, sign and file all instruments, documents and certificates
which, from time to time, may be required to set forth any amendment to this
Agreement or which may be required by this Agreement or by the laws of the
United States
38
of America, the State of Delaware or any other state in which the Company shall
determine to do business, or any political subdivision or agency thereof and
(ii) to execute, implement and continue the valid and subsisting existence of
the Company or to qualify and continue the Company as a foreign limited
liability company in all jurisdictions in which the Company may conduct
business. The chief executive officer, as representative and attorney-in-fact,
however, shall not have any rights, powers or authority to amend or modify this
Agreement when acting in such capacity, except as expressly provided herein.
Such power of attorney is coupled with an interest and shall survive and
continue in full force and effect notwithstanding the subsequent withdrawal from
the Company of any Member for any reason and shall survive and shall not be
affected by the disability or incapacity of such Member.
SECTION 7.9 ENTIRE AGREEMENT. This Agreement amends, restates and
supersedes in its entirety the Original Agreement. This Agreement and the other
documents and agreements referred to herein or entered into concurrently
herewith embody the entire agreement and understanding of the parties hereto in
respect of the subject matter contained herein; PROVIDED that, such other
agreements and documents shall not be deemed to be a part of, a modification of
or an amendment to this Agreement. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
SECTION 7.10 SECTION TITLES. Section titles and headings are for
descriptive purposes only and shall not control or alter the meaning of this
Agreement as set forth in the text hereof.
39
IN WITNESS WHEREOF, the parties have executed this Amended and
Restated Limited Liability Company Agreement as of the day and year first above
written.
VESTAR CAPITAL PARTNERS IV, L.P.
By: Vestar Associates IV, L.P.,
its General Partner
By: Vestar Associates Corporation IV,
its General Partner
By:
---------------------------------------
Name:
Title: Managing Director
VESTAR/▇▇▇▇▇▇▇, LLC
By:
---------------------------------------
Name:
Title:
MARATHON FUND LIMITED PARTNERSHIP IV
By: Miltiades, LLC
Its Sole General Partner
By:
---------------------------------------
Name:
-------------------------------------
Its: Authorized Member
4J2R1C LIMITED PARTNERSHIP
By:
---------------------------------------
Its:
--------------------------------------
By:
---------------------------------------
Its:
--------------------------------------
3J2R LIMITED PARTNERSHIP
By:
---------------------------------------
Its:
--------------------------------------
By:
---------------------------------------
Its:
---------------------------------------
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
[End of Signature Page to Amended and Restated
Limited Liability Company Agreement]
SCHEDULE A (INVESTORS)
CLASS A UNITS Class B Units Class C Units
----------------- -------------------------------------
Vestar Capital Partners IV, L.P. 1,364,976.81 - -
c/o Vestar Capital Partners
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Vestar/▇▇▇▇▇▇▇, LLC 35,023.19 - -
c/o Vestar Capital Partners
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Marathon Fund Limited Partnership IV 350,000.00 - -
c/o Goldner ▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Incorporated
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
4J2R1C Limited Partnership 195,650.00 - -
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
3J2R Limited Partnership 188,125.00 - -
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ - 42,000.00 42,000.00
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇ - 15,000.00 15,000.00
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ - 15,000.00 15,000.00
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ - 12,000.00 12,000.00
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ - 4,000.00 4,000.00
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇ 921.83 3,078.17 4,000.00
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ - 4,000.00 4,000.00
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ - 4,000.00 4,000.00
▇▇▇▇ ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
----------------------------------------------------------------------------------------------------
TOTALS 2,134,696.83 99,078.17 100,000.00
----------------------------------------------------------------------------------------------------
EXHIBIT I (INVESTORS)
INITIAL CAPITAL CONTRIBUTION
-------------------------------------
Vestar Capital Partners IV, L.P. $136,194,519.85
Vestar/▇▇▇▇▇▇▇, LLC $ 3,494,540.46
Marathon Fund Limited Partnership IV $ 34,922,265.08
4J2R1C Limited Partnership $ 19,521,546.18
3J2R Limited Partnership $ 18,770,717.48
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ $ 167,626.87
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇ $ 59,866.74
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 59,866.74
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 47,893.39
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ $ 15,964.46
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 106,102.83
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ $ 15,964.46
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 15,964.46
▇▇▇▇ ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
----------------------------------------------------------------------
TOTALS $213,392,839.00
----------------------------------------------------------------------