Exhibit 3.26
[EXECUTION COPY]
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M-FOODS DAIRY TXCT, LLC
A Delaware Limited Liability Company
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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.
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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 ...................................... 12
SECTION 2.3 Term ...................................... 12
SECTION 2.4 Purpose ................................... 12
SECTION 2.5 Powers .................................... 12
SECTION 2.6 Foreign Qualification ..................... 13
SECTION 2.7 Registered Office; Registered Agent;
Principal Office; Other Offices ........... 13
SECTION 2.8 No State-Law Partnership .................. 13
ARTICLE III ............................................................... 14
MANAGEMENT .......................................................... 14
SECTION 3.1 The Management Committee; Delegation of
Authority and Duties ...................... 14
SECTION 3.2 Establishment of Management Committee ..... 15
SECTION 3.3 Management Committee Meetings ............. 16
SECTION 3.4 Chairman .................................. 17
SECTION 3.5 Approval or Ratification of Acts or
Contracts ................................. 17
SECTION 3.6 Action by Written Consent or Telephone
Conference ................................ 17
SECTION 3.7 Officers .................................. 17
SECTION 3.8 Management Matters ........................ 19
SECTION 3.9 Liability of Unitholders .................. 20
SECTION 3.10 Indemnification ........................... 21
ARTICLE IV ................................................................ 22
CAPITAL CONTRIBUTIONS; ALLOCATIONS; DISTRIBUTIONS ................... 22
SECTION 4.1 Capital Contributions ..................... 22
SECTION 4.2 Capital Accounts .......................... 22
SECTION 4.3 Allocations of Net Income and Net Loss .... 22
SECTION 4.4 Distributions ............................. 26
SECTION 4.5 Security Interest and Right of Set-Off .... 29
ARTICLE V ................................................................. 29
WITHDRAWAL; DISSOLUTION; TRANSFER OF MEMBERSHIP
INTERESTS; ADMISSION OF NEW MEMBERS ................................. 29
SECTION 5.1 Unitholder Withdrawal ..................... 29
SECTION 5.2 Dissolution ............................... 29
SECTION 5.3 Transfer by Unitholders ................... 30
SECTION 5.4 Admission or Substitution of New Members .. 31
SECTION 5.5 Compliance with Law ....................... 31
ARTICLE VI ................................................................ 31
REPORTS TO MEMBERS; TAX MATTERS ..................................... 31
SECTION 6.1 Books of Account .......................... 31
SECTION 6.2 Reports ................................... 32
SECTION 6.3 Fiscal Year ............................... 32
SECTION 6.4 Certain Tax Matters ....................... 32
ARTICLE VII ............................................................... 34
MISCELLANEOUS ....................................................... 34
SECTION 7.1 Schedules ................................. 34
SECTION 7.2 Governing Law ............................. 34
SECTION 7.3 Successors and Assigns .................... 34
SECTION 7.4 Confidentiality ........................... 34
SECTION 7.5 Amendments ................................ 34
SECTION 7.6 Notices ................................... 35
SECTION 7.7 Counterparts .............................. 35
SECTION 7.8 Power of Attorney ......................... 35
SECTION 7.9 Entire Agreement .......................... 36
SECTION 7.10 Section Titles ............................ 36
LIMITED LIABILITY COMPANY AGREEMENT
OF
M-FOODS DAIRYTXCT, LLC
A Delaware Limited Liability Company
THIS LIMITED LIABILITY COMPANY AGREEMENT of M-Foods Dairy TXCT, LLC,
dated and effective as of April 10, 2001 (this "Agreement"), is adopted,
executed and agreed to, for good and valuable consideration, by 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 any 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.
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" means the Delaware Limited Liability Company Act, Title 6,
▇▇.▇▇. 18-101, et seq, as it may be amended from time to time.
"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.
"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
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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 initially be as set forth on
Schedule A attached hereto; provided that the Gross Asset Value of such Initial
Capital Contribution and the number of Preferred Units, Class A Units and Class
B Units may be adjusted on or before the date sixty days from the date hereof to
reflect the fair market value of such Unitholder's Initial Capital Contribution
as determined by an independent appraisal performed by a party chosen by the
Representatives).
"Certificate" has the meaning set forth in Section 2.1.
"Class A Unit" means the Class A Units of the Company.
"Class B Unit" means the Class B 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.
"Common Units" means, collectively, the Class A Units and the Class
B Units of the Company.
"Company" means M-Foods Dairy TXCT, LLC, a Delaware limited
liability company.
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"Company Minimum Gain" has the meaning set forth in Regulations
Section 1.704-2(d).
"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" means M-Foods Dairy, LLC, a Delaware limited liability
company.
"Dairy LLC Agreement" means that certain Limited Liability Company
Agreement of M-Foods Dairy, LLC, dated as of the date hereof.
"Dairy Preferred Units" means the units representing fractional
parts of the interest of certain unitholders in Net Income, Net Losses and
distributions and having the rights and obligations in Dairy specified with
respect to the preferred units as such term is defined in the Dairy LLC
Agreement.
"Dairy Preferred Return" of the Dairy Preferred Units means, as of
any date, an amount equal to the aggregate "Preferred Return" (as such term is
defined in the Dairy LLC Agreement) accrued on all Dairy Preferred Units for all
periods prior to such date (including partial periods).
"Dairy Preferred Capital" of the Dairy Preferred Units means, as of
any date, the aggregate "Capital Contributions" (as such term is defined in the
Dairy LLC Agreement) made or deemed to be made in exchange for all Dairy
Preferred Units.
"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
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
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subsidiaries or Affiliates 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.
"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; provided that with respect to the
Initial Capital Contributions such determination of gross fair market
value shall remain subject to adjustment made within sixty (60) days after
the date hereof as determined by an independent appraiser chosen by the
Representatives:
(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
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(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.
(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 Dairy Holdings, LLC, a Delaware limited
liability company.
"Initial Capital Contribution" has the meaning set forth in Section
4.1.
"Management Committee" means the Management Committee established
pursuant to Section 3.2.
"Member" means Holdings, Kohler Mix Specialties of Connecticut,
Inc., a Connecticut corporation, Midwest Mix, Inc., a Minnesota corporation, 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).
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"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.
"MFI" 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;
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(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
(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.
"Preferred Unit" means a Unit representing a fractional part of the
interest of a Unitholder in Net Income, Net Losses and distributions and having
the rights and obligations specified with respect to the Preferred Units in this
Agreement.
"Preferred Return" with respect to each holder of Preferred Units
means (A) during the period ending on the earlier of (1) a Sale of the Company
or (2) the second anniversary of the date hereof, the greater of (i) 100% of the
Net Income of the Company, excluding Net Income earned in connection with a Sale
of the Company and (ii) an amount, accrued on a daily basis and, beginning July
1, 2001, compounded quarterly on January 1, April 1, July 1 and October 1 of
each year, from the day on which such Unitholder makes a Capital Contribution in
respect of Preferred Units through the date of distribution equal to 10% per
annum of the excess, if any, of (z) such Unitholder's aggregate Capital
Contribution in respect of Preferred Units plus the aggregate amount compounded
pursuant to this definition through the end of the previous quarter on each day
during such period over (y) the aggregate amount of all distributions made on or
prior to such day to such Unitholder in respect of Preferred Units, and (B)
following the earlier of (1) a Sale of the Company or (2) the second anniversary
of the date hereof, 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 in
respect of Preferred Units through the date of distribution equal to 10% per
annum of the excess, if any, of (z) such Unitholder's aggregate Capital
Contribution in respect of Preferred Units plus the aggregate amount compounded
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pursuant to this definition through the end of the previous quarter on each day
during such period over (y) the aggregate amount of all distributions made on or
prior to such day to such Unitholder in respect of Preferred Units. 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.
"Required Interest" means a majority of the Preferred Units and the
Class A Units voting as a single class.
"Sale of the Company" means the consummation of a transaction,
whether in a single transaction or in a series of related transactions that are
consummated contemporaneously (or consummated pursuant to contemporaneous
agreements), with any other Person or group of related Persons on an
arm's-length basis, pursuant to which such party or parties (a) acquire,
directly or indirectly, (whether by merger, Unit purchase, recapitalization,
reorganization, redemption, issuance of Units or otherwise) more than 50% of the
Common Units or (b) acquire assets constituting all or substantially all of the
assets of the Company on a consolidated basis; provided, however, that in no
event shall a Sale of the Company be deemed to include any transaction effected
for the purpose of changing, directly or indirectly, the form of organization or
the organizational structure of the Company.
"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.
"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.
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"Tax Matters Member" has the meaning set forth in Section 6.4(b).
"Unit" means the Preferred Units, Class A Units and Class B Units.
"Unitholder" means a Member or Assignee who holds an Economic
Interest in Preferred, Class A or Class B Units.
"Unpaid Preferred Return" with respect to each holder of Preferred
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 Preferred Capital" with respect to each Unitholder means
the excess, if any, of (i) such Unitholder's aggregate Capital Contributions in
respect of Preferred Units 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") by Holdings, 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.
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SECTION 2.2 Name. The name of the Company is "M-Foods Dairy TXCT,
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. 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.
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.
SECTION 2.5 Powers.
(a) Subject to the provisions of this Agreement and the
agreements contemplated hereby, the Company shall have the power and
authority to take any and all actions necessary, appropriate, proper,
advisable, convenient or incidental to or for the furtherance of the
purposes set forth in Section 2.4, including the power:
(i) to conduct its business, carry on its operations and
have and exercise the powers granted to a limited liability company
by Act in any state, territory, district or possession of the United
States, or in any foreign country that may be necessary, convenient
or incidental to the accomplishment of the purpose of the Company;
(ii) to acquire by purchase, lease, contribution of
property or otherwise, own, hold, operate, maintain, finance,
refinance, improve, lease, sell, convey, mortgage, transfer,
demolish or dispose of any real or personal property that may be
necessary, convenient or incidental to the accomplishment of the
purpose of the Company;
(iii) to enter into, perform and carry out contracts of
any kind, including contracts with any Unitholder or any Affiliate
thereof, or any agent of the Company necessary to, in connection
with, convenient to or incidental to the accomplishment of the
purpose of the Company;
(iv) to purchase, take, receive, subscribe for or
otherwise acquire, own, hold, vote, use, employ, sell, mortgage,
lend, pledge or otherwise dispose of, and otherwise use and deal in
and with, shares or other interests in or
11
obligations of domestic or foreign corporations, associations,
general or limited partnerships (including, without limitation, the
power to be admitted as a partner thereof and to exercise the rights
and perform the duties created thereby), trusts, limited liability
companies (including, without limitation, the power to be admitted
as a unitholder or appointed as a manager thereof and to exercise
the rights and perform the duties created thereby) or individuals or
direct or indirect obligations of the United States or of any
government, state, territory, governmental district or municipality
or of any instrumentality of any of them;
(v) to lend money for any proper purpose, to invest and
reinvest its funds and to take and hold real and personal property
for the payment of funds so loaned or invested;
(vi) to ▇▇▇ and be sued, complain and defend, and
participate in administrative or other proceedings in its name;
(vii) to appoint employees and agents of the Company and
define their duties and fix their compensation;
(viii) to indemnify any Person in accordance with the
Act and to obtain any and all types of insurance;
(ix) to cease its activities and cancel its Certificate;
(x) to negotiate, enter into, renegotiate, extend,
renew, terminate, modify, amend, waive, execute, acknowledge or take
any other action with respect to any lease, contract or security
agreement in respect of any assets of the Company;
(xi) to borrow money and issue evidences of indebtedness
and guaranty indebtedness (whether of the Company or any of its
Affiliates (including, but not limited to, MFI)), and to secure the
same by a mortgage, pledge or other lien on the assets of the
Company;
(xii) to pay, collect, compromise, litigate, arbitrate
or otherwise adjust or settle any and all other claims or demands of
or against the Company or to hold such proceeds against the payment
of contingent liabilities; and
(xiii) to make, execute, acknowledge and file any and
all documents or instruments necessary, convenient or incidental to
the accomplishment of the purpose of the Company.
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(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.
SECTION 2.6 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 2.7 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 2.8 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 2.8, 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.
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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.
(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.
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(d) Voting Rights. The holders of all Units shall be entitled
to notice of all Unitholder meetings in accordance with this Agreement,
and except as otherwise required by law, the holders of the Preferred
Units and the Class A Units shall be entitled to vote on all matters
submitted to the Unitholders for a vote with each Preferred Unit and each
Class A Unit entitled to one vote. Except as otherwise required by this
Agreement or by law, the holders of Class B Units shall not be entitled to
a vote on matters submitted to the Unitholders for a vote.
SECTION 3.2 Establishment of Management Committee.
(a) Representatives. There shall be established a Management
Committee composed of two (2) persons ("Representatives"). Thereafter, the
number of Representatives shall be established from time to time by
resolution of the Management Committee. The Representatives shall be
elected from time to time by the holders of the Required Interest present
in person or represented by proxy at any meeting of Unitholders. 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 shall not be deemed to be
"members" or "managers" (as such terms are defined in the Act) of the
Company.
(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.
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
15
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 any Representative. 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 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 MFI.
16
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.
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.
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.
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(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. 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 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
(e) President. The president shall, subject to the powers of
the Management Committee and chief executive officer, have general and
active management 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 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
(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 ▇▇▇ ▇▇▇▇▇▇▇▇.
(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 initially shall be J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇.
18
(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 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) 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.
(b) 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.
19
SECTION 3.9 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 3.10 Indemnification. Subject to the limitations and
conditions provided in this Section 3.10, 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 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 3.10
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 3.10 shall be deemed contract rights, and no amendment,
modification or repeal of this Section 3.10 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
20
in this Section 3.10 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.
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"). Holdings' Initial Capital Contribution shall be
adjusted upward or downward (and Holdings shall make an additional Capital
Contribution or receive a partial return of its Initial Capital Contribution) in
the proportion that the aggregate Capital Contribution of the other members is
adjusted pursuant to the provision contained in the definition of 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:
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(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
(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
simultaneously sold all of its assets for the Gross Asset
Value (as such term is defined in the Dairy LLC Agreement) of
each such asset and distributed the proceeds thereof (after
satisfaction of any liabilities of Dairy) in accordance with
the provisions of Section 4.4 of the Dairy 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 Common Units in
accordance with the number of Common 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
22
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 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).
23
(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).
(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.
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
24
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, 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 Section
4.4(b) as follows:
(i) First, 100% of the Distributable Assets shall be
distributed to the Unitholders holding Preferred Units pro rata in
accordance with each such Unitholder's Unreturned Preferred Capital
until each such Unitholder's Unreturned Preferred 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 Preferred 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 subparagraphs (i) and (ii) above, 100% of the Distributable
Assets shall be distributed to the holders of Preferred Units (in
the proportion that the number of Preferred Units held by each such
Unitholder bears to the aggregate number of all outstanding
Preferred Units), in an amount equal to the excess, if any, of (A)
the sum of the Dairy Preferred Capital and the Dairy Preferred
Return, over (B) the sum of all prior distributions made by the
Company pursuant to this Section 4.4(a)(iii) and all prior
distributions made by Dairy pursuant to Sections 4.4(a)(i) and (ii)
of the Dairy LLC Agreement;
25
(iv) Fourth, after the required distributions pursuant
to subparagraphs (i) through (iii) above, 100% of the Distributable
Assets shall be distributed to the holders of the Common Units all
remaining amounts in the proportion that the number of Common Units
held by each such Unitholder bears to the aggregate number of all
outstanding Common Units.
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.
Notwithstanding any of the foregoing, upon the event of a
distribution of cash or property by Dairy, the Company shall calculate
under Section 4.4(a)(i)-(iv) above the amount that would have been
distributed to each Unitholder holding Preferred Units had all
distributions been made immediately following such distribution by Dairy.
In the event that, according to such calculation, it is determined that
the Unitholders holding Preferred Units have received distributions of
Distributable Assets in an amount greater than the amount to which such
Unitholders would have been entitled had all distributions of
Distributable Assets made by the Company been calculated immediately after
such distribution by Dairy according to Section 4.4(a)(i)-(iv), such
Unitholders shall be obligated to return all amounts in excess of the
amount to which such Unitholders would have been entitled under such
calculation made according to Section 4.4(a)(i)-(iv).
(b) 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, 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 any member of M-Foods Dairy Holdings, LLC, a
Delaware limited liability company, over (ii) all prior distributions
pursuant to this Section 4.4. All distributions made to a Unitholder
pursuant to this Section 4.4(b) 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.
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
26
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. 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 written consent of the Members holding a
majority of the outstanding Class A Units, along with the written
consent of the Members holding a majority of the outstanding Class B
Units;
(ii) the entry of a decree of judicial dissolution of
the Company under Section 18-802 of the Act; and
(iii) upon the liquidation, dissolution or winding up of
the Company.
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.
27
(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 No Transfers by Unitholders. Unless otherwise stated
herein, there shall be no transfers of Units by Unitholders (other than a pledge
of such Units pursuant to that certain Pledge Agreement dated as of the date
hereof by and among the parties thereto), and any transfer or attempted transfer
of Units in violation of any provision of this Agreement shall be void, and the
Company shall not record such transfer on its books or treat any purported
transferee of such Units as the owner of such Units for any purpose.
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. 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
28
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.
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 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.
29
(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.
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 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
30
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 Midwest Mix, Inc., a Minnesota corporation, 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 requested by the Management
Committee.
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.
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
31
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.
SECTION 7.5 Amendments. This Agreement may not be modified or
amended without the written consent of the Members to the fullest extent
allowable under Delaware Law.
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: (▇▇▇) ▇▇▇-▇▇▇▇
32
with a copy to:
▇▇▇▇▇▇▇ Foods, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and 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 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.
33
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.
34
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
M-FOODS DAIRY HOLDINGS, LLC
By: _____________________________
Name: ___________________________
Its: ____________________________
KOHLER MIX SPECIALTIES OF
CONNECTICUT, INC.
By: _____________________________
Name: ___________________________
Its: ____________________________
MIDWEST MIX, INC.
By: _____________________________
Name: ___________________________
Its: ____________________________
[End of Signature Page to Limited Liability Company Agreement]
Schedule A
--------------------------------------------------------------------------------
Name and Address of Member Preferred Units Class A Units Class B Units
--------------------------------------------------------------------------------
M-Foods Dairy Holdings, LLC 0 0 50
c/o Vestar Capital Partners
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
Kohler Mix Specialties of 7,151.96 25 0
Connecticut, Inc.
c/o Kohler Mix Specialties, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
Midwest Mix, Inc. 7,151.96 25 0
c/o Kohler Mix Specialties, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
Exhibit I