EXHIBIT 10.35
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COINMACH HOLDINGS, LLC
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LIMITED LIABILITY COMPANY AGREEMENT
Dated as of March 6, 2003
THE COMPANY INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH INTERESTS MAY NOT BE
SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE
REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND COMPLIANCE WITH
THE OTHER SUBSTANTIAL RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.
THE COMPANY INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT
ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER SPECIFIED IN THE
SECURITYHOLDERS AGREEMENT, DATED AS OF MARCH 6,2003, AS AMENDED OR MODIFIED FROM
TIME TO TIME, AMONG THE ISSUER (THE "LLC") AND CERTAIN INVESTORS, AND THE LLC
RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH INTERESTS UNTIL SUCH
CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO ANY TRANSFER. A COPY OF SUCH
CONDITIONS SHALL BE FURNISHED BY THE LLC TO THE HOLDER HEREOF UPON WRITTEN
REQUEST AND WITHOUT CHARGE.
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TABLE OF CONTENTS
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ARTICLE I CERTAIN DEFINITIONS .............................................. 1
ARTICLE II ORGANIZATIONAL MATTERS ........................................... 10
2.1 Formation .......................................................... 10
2.2 The Certificate, Etc ............................................... 10
2.3 Name ............................................................... 10
2.4 Purpose ............................................................ 10
2.5 Powers of the LLC .................................................. 11
2.6 Foreign Qualification .............................................. 12
2.7 Principal Office; Registered Office ................................ 12
2.8 Term ............................................................... 13
2.9 No State-Law Partnership ........................................... 13
2.10 No UBTI ............................................................ 13
ARTICLE III UNITS; CAPITAL ACCOUNTS .......................................... 13
3.1 Unitholders ........................................................ 13
3.2 Unitholder Meetings ................................................ 15
3.3 Action of Unitholders by Written Consent or Telephone Conference ... 17
3.4 Issuance of Additional Units and Interests ......................... 18
3.5 Capital Accounts ................................................... 18
3.6 Negative Capital Accounts .......................................... 19
3.7 No Withdrawal ...................................................... 19
ARTICLE IV DISTRIBUTIONS AND ALLOCATIONS .................................... 20
4.1 Distributions ...................................................... 20
4.2 Priority of Class B Preferred Units on Allocations and Redemption .. 22
4.3 Allocations ........................................................ 23
4.4 Special Allocations ................................................ 23
4.5 Tax Allocations .................................................... 24
4.6 Indemnification and Reimbursement for Payments on Behalf of a
Unitholder ......................................................... 24
ARTICLE V BOARD OF MANAGERS; OFFICERS ...................................... 25
5.1 Management by the Board of Managers ................................ 25
5.2 Composition and Election of the Board of Managers .................. 26
5.3 Board Meetings and Actions by Written Consent ...................... 27
5.4 Committees; Delegation of Authority and Duties ..................... 29
5.5 Officers ........................................................... 29
ARTICLE VI GENERAL RIGHTS AND OBLIGATIONS OF UNITHOLDERS .................... 31
6.1 Limitation of Liability ............................................ 31
6.2 Lack of Authority .................................................. 31
6.3 No Right of Partition .............................................. 32
6.4 Unitholders Right to Act ........................................... 32
6.5 Conflicts of Interest .............................................. 32
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TABLE OF CONTENTS
(continued)
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6.6 Transactions Between the LLC and the Unitholders ................... 32
ARTICLE VII EXCULPATION AND INDEMNIFICATION .................................. 32
7.1 Exculpation ........................................................ 32
7.2 Right to Indemnification ........................................... 32
7.3 Advance Payment .................................................... 33
7.4 Indemnification of Employees and Agents ............................ 33
7.5 Appearance as a Witness ............................................ 33
7.6 Nonexclusivity of Rights ........................................... 33
7.7 Insurance .......................................................... 34
7.8 Savings Clause ..................................................... 34
ARTICLE VIII BOOKS, RECORDS, ACCOUNTING AND REPORTS ........................... 34
8.1 Records and Accounting ............................................. 34
8.2 Fiscal Year ........................................................ 34
8.3 Transmission of Communications ..................................... 34
8.4 LLC Funds .......................................................... 34
ARTICLE IX TAXES ............................................................ 35
9.1 Tax Returns ........................................................ 35
9.2 Tax Elections ...................................................... 35
9.3 Tax Matters Partner ................................................ 35
ARTICLE X TRANSFER OF LLC INTERESTS ........................................ 35
10.1 Transfers by Unitholders ........................................... 35
10.2 Effect of Assignment ............................................... 36
10.3 Restriction on Transfer ............................................ 36
10.4 Transfer Fees and Expenses ......................................... 36
10.5 Void Transfers ..................................................... 36
ARTICLE XI ADMISSION OF UNITHOLDERS ......................................... 36
11.1 Substituted Unitholders ............................................ 36
11.2 Additional Unitholders ............................................. 37
11.3 Optionholders ...................................................... 37
ARTICLE XII WITHDRAWAL AND RESIGNATION OF UNITHOLDERS ........................ 37
12.1 Withdrawal and Resignation of Unitholders .......................... 37
12.2 Withdrawal of a Unitholder ......................................... 37
ARTICLE XIII DISSOLUTION AND LIQUIDATION ...................................... 37
13.1 Dissolution ........................................................ 37
13.2 Liquidation and Termination ........................................ 38
13.3 Cancellation of Certificate ........................................ 38
13.4 Reasonable Time for Winding Up ..................................... 38
13.5 Return of Capital .................................................. 39
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TABLE OF CONTENTS
(continued)
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ARTICLE XIV VALUATION ........................................................ 39
14.1 Determination ...................................................... 39
14.2 Fair Market Value .................................................. 39
ARTICLE XV GENERAL PROVISIONS ............................................... 40
15.1 Power of Attorney .................................................. 40
15.2 Amendments ......................................................... 40
15.3 Title to LLC Assets ................................................ 40
15.4 Remedies ........................................................... 41
15.5 Successors and Assigns ............................................. 41
15.6 Severability ....................................................... 41
15.7 Incorporation of the LLC ........................................... 41
15.8 Opt-in to Article 8 of the Uniform Commercial Code ................. 41
15.9 Notice to Unitholder of Provisions ................................. 42
15.10 Counterparts ....................................................... 42
15.11 Consent to Jurisdiction ............................................ 42
15.12 Descriptive Headings; Interpretation ............................... 42
15.13 Applicable Law ..................................................... 43
15.14 Addresses and Notices .............................................. 43
15.15 Creditors .......................................................... 43
15.16 Waiver ............................................................. 43
15.17 Further Action ..................................................... 43
15.18 Offset ............................................................. 43
15.19 Entire Agreement ................................................... 43
15.20 Delivery by Facsimile .............................................. 44
15.21 Survival ........................................................... 44
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COINMACH HOLDINGS, LLC
LIMITED LIABILITY COMPANY AGREEMENT
This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement"), dated as of
March 6, 2003, is entered into by and among Coinmach Holdings, LLC (the "LLC")
and the Unitholders.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Capitalized terms used but not otherwise defined herein shall have the
following meanings:
"Additional Unitholder" means a Person admitted to the LLC as a Unitholder
pursuant to Section 11.2.
"Additional Securities" shall have the meaning set forth in Section 3.4.
"Adjusted Capital Account Deficit" means with respect to any Capital
Account as of the end of any Taxable Year, the amount by which the balance in
such Capital Account is less than zero. For this purpose, such Person's Capital
Account balance shall be
(i) reduced for any items described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5), and (6), and
(ii) increased for any amount such Person is obligated to contribute or is
treated as being obligated to contribute to the LLC pursuant to Treasury
Regulation Section 1.704-1(b)(2)(ii)(c) (relating to partner liabilities to a
partnership) or 1.704-2(g)(l) and 1.704-2(i) (relating to Minimum Gain).
"Affiliate" of any particular Person means (i) any other Person
controlling, controlled by, or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, by contract, or otherwise, and (ii) if such Person is a
partnership, any partner thereof and (iii) without limiting the foregoing and
with respect only to GTCR-CLC, any investment fund controlled by GTCR LLC.
"Agreement" means this Limited Liability Company Agreement, as amended or
modified from time to time in accordance with the terms hereof.
"Assignee" means a Person to whom an LLC Interest has been transferred in
accordance with the terms of this Agreement and the other agreements
contemplated hereby, but who has not become a Unitholder pursuant to Article X.
"Board" means the Board of Managers established pursuant to Section 5.2.
"Book Value" means, with respect to any LLC property, the LLC's adjusted
basis for federal income tax purposes, adjusted from time to time to reflect the
adjustments required or permitted by Treasury Regulation Section
1.704-1(b)(2)(iv)(d)-(g).
"Capital Account" means the capital account maintained for a Unitholder
pursuant to Section 3.5.
"Capital Contributions" means any cash, cash equivalents, promissory
obligations, or the Fair Market Value of other property that a Unitholder
contributes or is deemed to have contributed to the LLC with respect to any Unit
pursuant to Sections 3.1 or 3.4, or, with respect to Class A Preferred Units,
pursuant to any Equity Participation Agreement.
"Certificate" means the LLC's Certificate of Formation as filed with the
Secretary of State of Delaware.
"Change in Ownership" means (i) any sale, transfer, or issuance or series
of sales, transfers, and/or issuances of Common Units by the LLC or any holders
thereof which results in any Person or group of Persons (as the term "group" is
used under the Securities Exchange Act), other than GTCR-CLC, GIC, the
TCW/Crescent Purchasers, and their respective Affiliates, owning more than 50%
of the Common Units outstanding at the time of such sale, transfer, or issuance
or series of sales, transfers, and/or issuances or (ii) the transfer or series
of related transfers by GTCR-CLC and its Affiliates (to Persons who are not
Affiliates of GTCR-CLC) of interests of Common Units representing more than 50%
of the outstanding Common Units as of the last such transfer.
"Class A Preferred Unit" means a Unit representing a fractional part of
the interest of a Unitholder in Profits, Losses and Distributions and having the
rights and obligations specified with respect to the Class A Preferred Units in
this Agreement.
"Class A Unpaid Yield" of any Class A Preferred Unit means, as of any
date, an amount equal to the excess, if any, of (a) the aggregate Class A Yield
accrued on such Class A Preferred Unit for all periods prior to such date
(including partial periods), over (b) the aggregate amount of prior
Distributions made by the LLC that constitute payment of Class A Yield on such
Class A Preferred Unit.
"Class A Unreturned Capital" of any Class A Preferred Unit means, as of
any date, the aggregate Capital Contributions made or deemed to be made in
exchange for such Class A Preferred Unit reduced by all Distributions made by
the LLC that constitute a return of Class A Unreturned Capital under Section
4.1(a)(ii).
"Class A Yield" means, with respect to each Class A Preferred Unit, the
amount accruing on such Class A Preferred Unit on a daily basis from the date of
issuance, at the rate of 8% per annum, compounded on the last day of each
calendar quarter, on (a) the Class A Unreturned Capital of such Class A
Preferred Unit plus (b) as the case may be, the Class A Unpaid Yield thereon for
all prior quarterly periods. In calculating the amount of any Distribution to be
made during a period, the portion of the Class A Yield with respect to such
Class A Preferred Unit for
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the portion of the quarterly period elapsing before such Distribution is made
shall be taken into account in determining the amount of such Distribution.
"Class B Preferred Unit" means a Unit representing a fractional part of
the interest of a Unitholder in Profits, Losses and Distributions and having the
rights and obligations specified with respect to the Class B Preferred Units in
this Agreement.
"Class B Unpaid Yield" of any Class B Preferred Unit means, as of any
date, an amount equal to the excess, if any, of (a) the aggregate Class B Yield
accrued on such Class B Preferred Unit for all periods prior to such date
(including partial periods), over (b) the aggregate amount of prior
Distributions made by the LLC that constitute payment of Class B Yield on such
Class B Preferred Unit.
"Class B Unreturned Capital" of any Class B Preferred Unit means, as of
any date, the aggregate Capital Contributions made or deemed to be made in
exchange for such Class B Preferred Unit reduced by all Distributions made by
the LLC that constitute a return of Class B Unreturned Capital under Section
4.1(a)(iv).
"Class B Yield" means, with respect to each Class B Preferred Unit, the
amount accruing on such Class B Preferred Unit on a daily basis from the date of
issuance, at the rate of 12.5% per annum from July 5, 2000 until November 15,
2002 and thereafter at the rate of 14% per annum, compounded on the last day of
each calendar quarter, on (a) the Class B Unreturned Capital of such Class B
Preferred Unit plus (b) as the case may be, the Class B Unpaid Yield thereon for
all prior quarterly periods. In calculating the amount of any Distribution to be
made during a period, the portion of the Class B Yield with respect to such
Class B Preferred Unit for the portion of the quarterly period elapsing before
such Distribution is made shall be taken into account in determining the amount
of such Distribution. The yield on each Class B Preferred Unit issued on March
6,2003 shall be deemed to begin accruing on July 5, 2000 despite its later
issuance.
"Class C Preferred Unit" means a Unit representing a fractional part of
the interest of a Unitholder in Profits, Losses and Distributions and having the
rights and obligations specified with respect to the Class C Preferred Units in
this Agreement.
"Class C Unpaid Yield" of any Class C Preferred Unit means, as of any
date, an amount equal to the excess, if any, of (a) the aggregate Class C Yield
accrued on such Class C Preferred Unit for all periods prior to such date
(including partial periods), over (b) the aggregate amount of prior
Distributions made by the LLC that constitute payment of Class C Yield on such
Class C Preferred Unit.
"Class C Unreturned Capital" of any Class C Preferred Unit means, as of
any date, the aggregate Capital Contributions made or deemed to be made in
exchange for such Class C Preferred Unit reduced by all Distributions made by
the LLC that constitute a return of Class C Unreturned Capital under Section
4.1(a)(vi).
"Class C Yield" means, with respect to each Class C Preferred Unit, the
amount accruing on such Class C Preferred Unit on a daily basis from the date of
issuance, at the rate of 8% per annum, compounded on the last day of each
calendar quarter, on (a) the Class C Unreturned
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Capital of such Class C Preferred Unit plus (b) as the case may be, the Class C
Unpaid Yield thereon for all prior quarterly periods. In calculating the amount
of any Distribution to be made during a period, the portion of the Class C Yield
with respect to such Class C Preferred Unit for the portion of the quarterly
period elapsing before such Distribution is made shall be taken into account in
determining the amount of such Distribution. The yield on each Class C Preferred
Unit issued on March 6, 2003 shall be deemed to begin accruing on the Original
Purchase Date despite its later issuance.
"Coinmach Class A Preferred Stock" means the Class A Preferred Stock of
Coinmach Laundry Corporation, a Delaware corporation.
"Coinmach Operating" means Coinmach Operating Corporation, a Delaware
corporation.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Co-Investor Contribution Agreement" means the Co-Investor Contribution
Agreement, dated as of March 5,2003 among the LLC, GIC and the TCW/Crescent
Purchasers.
"Common Unit" means a Unit representing a fractional part of the interest
of a Unitholder in Profits, Losses and Distributions and having the rights and
obligations specified with respect to the Common Units in this Agreement;
provided that in the event of any Distributions upon a "Common Unit" which has
not vested in accordance with the terms and conditions set forth in the Equity
Participation Agreements or other agreement pursuant to which such Unit was
issued (to the extent such agreement provides for vesting), such Distribution
shall be placed in escrow with a national commercial bank of recognized standing
and released to the holder of such Unit at the time such Unit is vested; and
provided, further, that if the employment with the Company and its Subsidiaries
of the holder of such "Common Unit" is terminated for any reason prior to the
time that such Common Unit becomes vested, any prior Distribution attributable
to such unvested Common Units shall be released from the escrow to the Company
immediately upon such termination.
"Common Unitholder" means a holder of Common Units.
"Contribution Agreements" mean, collectively, the Co-Investor Contribution
Agreement, the Employee Contribution Agreements, the Jefferies Contribution
Agreement, the GTCR-LLC Contribution Agreement and the Management Contribution
Agreement.
"Delaware Act" means the Delaware Limited Liability Company Act, 6 Del.L.
Section 18-101, et seq., as it may be amended from time to time, and any
successor to the Delaware Act.
"Distribution" means each distribution made by the LLC to a Unitholder,
whether in cash, property or securities of the LLC and whether by liquidating
distribution, redemption, repurchase, or otherwise; provided that any
recapitalization or exchange or conversion of securities of the LLC (including
any exchange of Units for Class A Preferred Units), redemption of securities of
the LLC pursuant to any Equity Participation Agreement and any subdivision (by
Unit split or otherwise) or any combination (by reverse Unit split or otherwise)
of any outstanding Units shall not be deemed a Distribution.
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"Employee Contribution Agreements" mean the Employee Contribution
Agreements, each dated as of December 6, 2002 between Coinmach Holdings, LLC and
each of the individuals listed on the Schedule of Employees attached thereto.
"Equity Participation Agreements" means, collectively, those Equity
Participation Agreements entered into between the LLC, and each of the employees
of Coinmach Operating that have acquired Equity Securities of the LLC, and any
other agreements for the sale of Equity Securities between the LLC and any
employees of the LLC or its Subsidiaries which are designated as "Equity
Participation Agreements" by the Board.
"Equity Securities" means (i) Units or other equity interests in the LLC
or a corporate successor (including other classes or groups thereof having such
relative rights, powers, and duties as may from time to time be established by
the Board, including rights, powers, and/or duties senior to existing classes
and groups of Units and other equity interests in the LLC), (ii) obligations,
evidences of indebtedness, or other securities or interests convertible or
exchangeable into Units or other equity interests in the LLC or a corporate
successor, and (iii) warrants, options, or other rights to purchase or otherwise
acquire Units or other equity interests in the LLC or a corporate successor.
"Event of Withdrawal" means the death, retirement, resignation, expulsion,
bankruptcy or dissolution of a Unitholder or the occurrence of any other event
that terminates the continued membership of a Unitholder in the LLC.
"Family Group" means a Unitholder's spouse and descendants (whether
natural or adopted), and any trust, family limited partnership, limited
liability company or other entity wholly owned, directly or indirectly, by such
Unitholder or such Unitholder's spouse and/or descendants that is and remains
solely for the benefit of such Unitholder and/or such Unitholder's spouse and/or
descendants and any retirement plan for such Unitholder.
"Fair Market Value" means, with respect to any asset or equity interest,
its fair market value determined according to Article XlV.
"Fiscal Quarter" means each calendar quarter ending March 31, June 30,
September 30, and December 31.
"Fiscal Year" means the LLC's annual accounting period established
pursuant to Section 8.2.
"Fundamental Change" means (a) any sale or transfer of more than 50% of
the assets of the LLC and its Subsidiaries on a consolidated basis (measured
either by book value in accordance with generally accepted accounting principles
consistently applied or by fair market value determined in the reasonable good
faith judgement of the LLC's Board) in any transaction or series of transactions
(other than in the ordinary course of business) and (b) any merger or
consolidation to which the LLC is a party, except for a merger in which the LLC
is the surviving company, the terms of each class of the Preferred Units are not
changed, and the Preferred Units are not exchanged for cash, securities, or
other property, and after giving effect to such merger, the holders of the LLC's
outstanding Common Units possessing a majority of the voting power (under
ordinary circumstances) to elect a majority of the Board immediately prior to
the merger
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shall continue to own the LLC's outstanding Common Units possessing the voting
power (under ordinary circumstances) to elect a majority of the Board.
"GIC" means Filbert Investment Pte Ltd.
"Governmental Entity" means the United States of America or any other
nation, any state or other political subdivision thereof, or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of government or any agency or department or subdivision of any
governmental authority, including the United States federal government or any
state or local government.
"GTCR" means (i) GTCR Fund VII, L.P., a Delaware limited partnership, (ii)
GTCR Co-Invest, L.P., a Delaware limited partnership and (iii) any investment
fund managed by GTCR LLC that purchases Units and that becomes an Additional
Unitholder pursuant to Section 11.2.
"GTCR-CLC" means GTCR-CLC,LLC, a Delaware limited liability company.
"GTCR-CLC Contribution Agreement" means the GTCR-CLC Contribution
Agreement, dated as of March 5,2003 between Coinmach Holdings, LLC and GTCR-CLC.
"GTCR Equity" means (i) the Class C Preferred Units and Common Units
initially issued to GTCR or its Affiliates pursuant to the GTCR-CLC Contribution
Agreement, and (ii) any securities issued directly or indirectly with respect to
the foregoing securities by way of Unit split, Unit dividend, or other division
of securities, or in connection with a combination of securities,
recapitalization, merger, consolidation, or other reorganization. As to any
particular securities constituting GTCR Equity, such securities shall cease to
be GTCR Equity when they have been (a) effectively registered under the
Securities Act and disposed of in accordance with the registration statement
covering them, (b) distributed to the public through a broker, dealer, or market
maker pursuant to Rule 144 under the Securities Act (or any similar provision
then in force), or (c) repurchased by the LLC or any Subsidiary thereof.
"GTCR LLC" means GTCR Xxxxxx Xxxxxx, L.L.C., a Delaware limited liability
company.
"Indebtedness" means at a particular time, without duplication, (i) any
indebtedness for borrowed money or issued in substitution for or exchange of
indebtedness for borrowed money, (ii) any indebtedness evidenced by any note,
bond, debenture or other debt security, (iii) any indebtedness for the deferred
purchase price of property or services with respect to which A Person is liable,
contingently or otherwise, as obligor or otherwise (other than trade payables
and other current liabilities incurred in the ordinary course of business which
are not more than 120 days past due), and (iv) any commitment by which a Person
assures a creditor against loss (including contingent reimbursement obligations
with respect to letters of credit).
"Jefferies" means Jefferies & Company, Inc.
"Jefferies Contribution Agreement" means the Jefferies Contribution
Agreement, dated as of March 5,2003 between Coinmach Holdings, LLC and
Jefferies.
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"Junior Securities" means any Equity Securities of the LLC, except for the
Class A Preferred Units and Class B Preferred Units.
"Liens" means any mortgage, pledge, security interest, encumbrance, lien,
or charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof), any sale of
receivables with recourse against the LLC, any Subsidiary or any Affiliate
thereof, any filing or agreement to file a financing statement as debtor under
the Uniform Commercial Code or any similar statute other than to reflect
ownership by a third party of property leased to the LLC, any Subsidiary or any
Affiliate under a lease which is not in the nature of a conditional sale or
title retention agreement, or any subordination arrangement in favor of another
Person (other than any subordination arising in the ordinary course of
business).
"LLC" means Coinmach Holdings, LLC, a Delaware limited liability company.
"LLC Interest" means the interest of a Unitholder in Profits, Losses, and
Distributions.
"Losses" means items of LLC loss and deduction determined according to
Section 3.5.
"Manager" means a current manager on the Board, who, for purposes of the
Delaware Act, will be deemed a "manager" (as defined in the Delaware Act) but
will be subject to the rights, obligations, limitations and duties set forth in
this Agreement.
"Management Contribution Agreements" means the Management Contribution
Agreements, dated as of March 5, 2003 between Coinmach Holdings, LLC and each
of the individuals listed on the Schedule of Senior Managers attached thereto.
"Minimum Gain" means the partnership minimum gain determined pursuant to
Treasury Regulation Section 1.704-2(d).
"Officers" means each person designated as an officer of the LLC to whom
authority and duties have been delegated pursuant to Section 5.5, subject to any
resolution of the Board appointing such person as an officer or relating to such
appointment.
"Original Purchase Date" means, (i) in the case of GTCR-CLC, GIC, the TCW
Crescent Purchasers, Xxxxxxxx Xxxxx, Xxxxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxx and
Xxxxx X. Xxxxxxx, July 5, 2000, (ii) in the case of the Other Managers, December
17, 2000, and (iii) in the case of Xxxxxxx X. Xxxxxx, (A) with respect to 304.54
Class C Units, July 5, 2000 and (B) with respect to 63 Class C Units, December
17,2000.
"Other Managers" means, collectively, Xxxxxxx X. Close, Xxxx X. Xxxxxx,
Xxxxx X. XxXxxxxxx, Xxxxxx X. Xxxxxxxxx, Xxxxx Xxxxxxxxx, R. Xxxxxx Xxxxxxx II,
Xxxxxxx Xxxxx, Xxxxxx Sazzmann, Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx.
"Permitted Transferee" means (i) with respect to any Unitholder who is a
natural person, a member of such Unitholder's Family Croup, and (ii) with
respect to any Unitholder which is an entity, any of such Unitholder's
Affiliates.
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"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, any other business entity, or a
Governmental Entity.
"Preferred Unit" means a Unit having the relative rights, powers and
duties specified with respect to Preferred Units in this Agreement and includes
any Unit that is a Class A Preferred Unit, Class B Preferred Unit, or Class C
Preferred Unit.
"Proceeding" has the meaning set forth in Section 7.2.
"Profits" means items of LLC income and gain determined according to
Section 3.5.
"Public Offering" means any sale of the common equity securities of the
LLC (or a successor thereto) pursuant to an effective registration statement
under the Securities Act filed with the Securities and Exchange Commission on
Form S-1 (or a successor form adopted by the Securities and Exchange
Commission); provided that the following shall not be considered a Public
Offering: (i) any issuance of common equity securities as consideration for a
merger or acquisition, and (ii) any issuance of common equity securities or
rights to acquire common equity securities to employees of the LLC or its
Subsidiaries as part of an incentive or compensation plan.
"Public Sale" means any sale of Equity Securities to the public pursuant
to an offering registered under the Securities Act or to the public through a
broker, dealer or market maker pursuant to the provisions of Rule 144 (or any
similar provision then in effect) adopted under the Securities Act (other than
Rule 144(k) prior to a Public Offering).
"Registration Agreement" means the Registration Agreement, dated as of
March 6, 2003 by and among the LLC, the Unitholders and any other Persons party
thereto from time to time, as the same may be amended from time to time.
"Required Interest" means a majority of the Common Units.
"Regulatory Allocations" has the meaning set forth in Section 4.5(e).
"Sale of the LLC" means any transaction or series of transactions pursuant
to which any Person or group of related Persons (other than GTCR and its
Affiliates) in the aggregate acquire(s) (i) Equity Securities of the LLC
possessing the voting power (other than voting rights accruing only in the event
of a default or breach) to elect a majority of the LLC's Board (whether by
merger, consolidation, reorganization, combination, sale or transfer of the
LLC's Equity Securities, securityholder or voting agreement, proxy, power of
attorney or otherwise) or (ii) all or substantially all of the LLC's assets
determined on a consolidated basis; provided that a Public Offering shall not
constitute a Sale of the LLC.
"Securities" means notes, stocks, bonds, debentures, evidences of
indebtedness, certificates of interest or participation in any profit-sharing
agreement, partnership interests, beneficial interests in trusts,
collateral-trust certificates, pre-organization certificates or subscriptions,
transferable shares, investment contracts, voting-trust certificates,
certificates of deposit for securities, certificates of equity interests,
notional principal contracts and certificates
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of interest or participation in, temporary or interim certificates for, receipts
for or warrants or rights or options to subscribe to or purchase or sell any of
the foregoing, and any other items commonly referred to as securities.
"Securities Act" means the Securities Act of 1933, as amended, and
applicable rules and regulations thereunder, and any successor to such statute,
rules, or regulations. Any reference herein to a specific section, rule, or
regulation of the Securities Act shall be deemed to include any corresponding
provisions of future law.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended, and applicable rules and regulations thereunder, and any successor to
such statute, rules, or regulations. Any reference herein to a specific section,
rule, or regulation of the Securities Exchange Act shall be deemed to include
any corresponding provisions of future law.
"Securityholders Agreement" means the Securityholders Agreement, dated as
of March 6, 2003 by and among the LLC, GTCR-CLC (or an Affiliate thereof),
Jefferies, GIC, TWC/Crescent Purchasers and the other Persons party thereto from
time to time, as the same may be amended from time to time.
"Subsidiary" means, with respect to any Person, any corporation, limited
liability company, partnership, association, or business entity of which (i) if
a corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers, or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a limited liability company,
partnership, association, or other business entity (other than a corporation), a
majority of partnership or other similar ownership interest thereof is at the
time owned or controlled, directly or indirectly, by that Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association, or other business entity
(other than a corporation) if such Person or Persons shall be allocated a
majority of limited liability company, partnership, association, or other
business entity gains or losses or shall be or control any managing director or
general partner of such limited liability company, partnership, association, or
other business entity. For purposes hereof, references to a "Subsidiary" of any
Person shall be given effect only at such times that such Person has one or more
Subsidiaries, and, unless otherwise indicated, the term "Subsidiary" refers to a
Subsidiary of the LLC.
"Substituted Unitholder" means a Person that is admitted as a Unitholder
to the LLC pursuant to Section 11.1.
"Tax" or "Taxes" means any federal, state, local, or foreign income, gross
receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use,
transfer, registration, value added, excise, natural resources, severance,
stamp, occupation, premium, windfall profit, environmental, customs, duties,
real property, personal property, capital stock, social security, unemployment,
disability, payroll, license, employee, or other withholding, or other tax, of
any kind whatsoever, including any interest, penalties, or additions to tax or
additional amounts in respect of the foregoing.
9
"Tax Distribution" has the meaning set forth in Section 4.1(b).
"Tax Matters Partner" has the meaning set forth in Section 9.3.
"Taxable Year" means the LLC's Fiscal Year unless the Board determines
otherwise in compliance with applicable laws.
"TCW/Crescent Purchasers" means, collectively, TCW/Crescent Mezzanine
Partners II, L.P., a Delaware limited partnership, TCW/Crescent Mezzanine Trust
II, a Delaware business trust, TCW Leveraged Income Trust, L.P., a Delaware
limited partnership, TCW Leveraged Income Trust II, L.P., a Delaware limited
partnership and TCW Leveraged Income Trust IV, L.P., a Delaware limited
partnership (each individually a "TCW/Crescent Purchaser").
"Transaction Documents" means this Agreement, and all other agreements,
instruments, certificates, and other documents to be entered into or delivered
by any Unitholder in connection with the transactions contemplated to be
consummated pursuant to this Agreement and any side agreements related thereto.
"Transfer" means any sale, transfer, assignment, pledge, mortgage,
exchange, hypothecation, grant of a security interest or other direct or
indirect disposition or encumbrance of an interest (including, without
limitation, by operation of law) or the acts thereof, but explicitly excluding
conversions or exchanges of one class of Unit to or for another class of Unit.
The terms "Transferee," "Transferred," and other forms of the word "Transfer"
shall have correlative meanings.
"Treasury Regulations" means the income tax regulations promulgated under
the Code and effective as of the date hereof.
"Unit" means an LLC Interest of a Unitholder or an Assignee in the LLC
representing a fractional part of the LLC Interests of all Unitholders and
Assignees and shall include Class A Preferred Units, Class B Preferred Units,
Class C Preferred Units and Common Units; provided that any class or group of
Units issued shall have relative rights, powers, and duties set forth in this
Agreement and the LLC Interest represented by such class or group of Units shall
be determined in accordance with such relative rights, powers, and duties set
forth in this Agreement.
"Unitholder" means any owner of one or more Units as reflected on the
LLC's books and records, and any person admitted to the LLC as an Additional
Unitholder or Substituted Unitholder; but only for so long as such person is
shown on the LLC's books and records as the owner of one or more Units.
"Unitholder Group" has the meaning set forth in Section 6.5.
"Unvested Unit" shall have the meaning ascribed to such term in the Equity
Participation Agreements.
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ARTICLE II
ORGANIZATIONAL MATTERS
2.1 FORMATION. The LLC has been organized as a Delaware limited liability
company by the filing with the Secretary of State of the State of Delaware of
the Certificate under and pursuant to the Delaware Act and shall be continued in
accordance with this Agreement.
2.2 THE CERTIFICATE, ETC. The Certificate was filed with the Secretary of
State of the State of Delaware on November 15, 2002. The Unitholders hereby
agree to execute, file and record all such other certificates and documents,
including amendments to the Certificate, and to do such other acts as may be
appropriate to comply with all requirements for the formation, continuation and
operation of a limited liability company, the ownership of property, and the
conduct of business under the laws of the State of Delaware and any other
jurisdiction in which the LLC may own property or conduct business.
2.3 NAME. The name of the LLC shall be "Coinmach Holdings, LLC". The Board
in its sole discretion may change the name of the LLC at any time and from time
to time. Notification of any such change shall be given to all Unitholders. The
LLC's business may be conducted under its name and/or any other name or names
deemed advisable by the Board.
2.4 PURPOSE. The purpose and business of the LLC shall be to acquire,
hold, protect, conserve, manage, repurchase and dispose of the stock and other
securities of its Subsidiaries and engaging in all activities necessary or
reasonably incidental to the foregoing. Notwithstanding anything herein to the
contrary, nothing set forth herein shall be construed as authorizing the LLC 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.
(a) Board of Managers. Subject to the provisions of this Agreement, the
Securityholders Agreement, the Registration Agreement and the other agreements
contemplated hereby and thereby, (i) the LLC may, with the approval of the
Board, enter into and perform under any and all documents, agreements and
instruments, all without any further act, vote or approval of any Unitholder,
and (ii) the Board may authorize any Person (including any Unitholder or
Officer) to enter into and perform under any document, agreement or instrument
on behalf of the LLC.
(b) Merger. Subject to the provisions of this Agreement and the
Securityholders Agreement, the LLC may, with the approval of the Board and
GTCR-CLC and without the need for any further act, vote or approval of any
Unitholder, 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 Delaware Act), regardless of
whether the LLC or such other entity is the survivor.
2.5 POWERS OF THE LLC. Subject to the provisions of this Agreement, the
Securityholders Agreement and the agreements contemplated hereby, the LLC shall
have the
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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:
(a) to conduct its business, carry on its operations and have and exercise
the powers granted to a limited liability company by the Delaware Act in any
state, territory, district or possession of the United States, or in any foreign
country that may be necessary, convenient or incidental to the accomplishment of
the purpose of the LLC;
(b) to enter into, perform and carry out contracts with any Unitholder or
any Affiliate thereof, any Subsidiary or any stockholder, unitholder, member,
employee, officer, director or Affiliate of such Subsidiary, or any agent of the
LLC, necessary to, in connection with, convenient to or incidental to the
accomplishment of the purpose of the LLC;
(c) 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
obligations of its Subsidiaries;
(d) to xxx and be sued, complain and defend, and participate in
administrative or other proceedings in its name;
(e) to appoint employees and agents of the LLC and define their duties and
fix their compensation;
(f) to indemnify any Person in accordance with the Delaware Act and to
obtain any and all types of insurance;
(g) to cease its activities and cancel its Certificate;
(h) subject to the provisions of Section 2.10 hereof, to borrow money and
issue evidences of indebtedness and guaranty indebtedness (whether of the LLC or
any of its Subsidiaries), and to secure the same by a mortgage, pledge or other
lien on the assets of the LLC;
(i) to pay, collect, compromise, litigate, arbitrate or otherwise adjust
or settle any and all other claims or demands of or against the LLC or to hold
such proceeds against the payment of contingent liabilities; and
(j) to make, execute, acknowledge and file any and all documents or
instruments necessary, convenient or incidental to the accomplishment of the
purpose of the LLC.
2.6 FOREIGN QUALIFICATION. Prior to the LLC's conducting business in any
jurisdiction other than Delaware, the Board shall cause the LLC to comply, to
the extent procedures are available and those matters are reasonably within the
control of the Board, with all requirements necessary to qualify the LLC as a
foreign limited liability company in that jurisdiction. At the request of the
Board or any Officer, each Unitholder shall execute, acknowledge, swear to and
deliver all certificates and other instruments conforming with this Agreement
that are necessary or appropriate to qualify, continue and terminate the LLC as
a
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foreign limited liability company in all such jurisdictions in which the LLC may
conduct business.
2.7 PRINCIPAL OFFICE; REGISTERED OFFICE. The principal office of the LLC
shall be located at 000 Xxxx Xxxxxxxx, Xxxxxxxxx, XX 00000, or at such other
place as the Board may from time to time designate, and all business and
activities of the LLC shall be deemed to have occurred at its principal office.
The LLC may maintain offices at such other place or places as the Board deems
advisable. Notification of any such change shall be given to all Unitholders.
The registered office of the LLC required by the Delaware 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 LLC) as the Board may designate from time to time in the manner
provided by law. The registered agent of the LLC in the State of Delaware shall
be the initial registered agent named in the Certificate or such other Person or
Persons as the Board may designate from time to time in the manner provided by
law.
2.8 TERM. The term of the LLC commenced upon the filing of the Certificate
in accordance with the Delaware Act and shall continue in existence until
termination and dissolution thereof in accordance with the provisions of Article
XIII.
2.9 NO STATE-LAW PARTNERSHIP. The Unitholders intend that the LLC not be a
partnership (including, without limitation, a limited partnership) or joint
venture, and that no Unitholder be a partner or joint venturer of any other
Unitholder by virtue of this Agreement (except for tax purposes as set forth in
the next succeeding sentence of this Section 2.9), and neither this Agreement
nor any other document entered into by the LLC or any Unitholder relating to the
subject matter hereof shall be construed to suggest otherwise. The Unitholders
intend that the LLC shall be treated as a partnership for federal and, if
applicable, state or local income tax purposes, and that each Unitholder and the
LLC shall file all tax returns and shall otherwise take all tax and financial
reporting positions in a manner consistent with such treatment. Without the
consent of the holders of the Required Interest, the LLC shall not make an
election to be treated as a corporation for federal income tax purposes pursuant
to Treasury Regulation 301.7701-3 (or any successor regulation or provision)
and, if applicable, state and local income tax purposes.
2.10 NO UBTI. Notwithstanding anything herein to the contrary, the LLC
shall not engage in any transaction which is reasonably likely to cause
GTCR-CLC, or any of its Affiliates, or any direct or indirect partner(s) of its
Affiliates, or any TCW/Crescent Purchaser or any of its Affiliates, which are
exempt from income taxation under Section 501(a) of the Code to recognize
unrelated business taxable income as defined in Section 512 and Section 514 of
the Code.
2.11 NO INCOME FROM COMMERCIAL ACTIVITY. Notwithstanding anything herein
to the contrary, the LLC will use reasonable efforts not to engage in
transactions which will cause GIC to recognize income from a commercial activity
with the meaning of Section 892(a)(2) of the Code.
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ARTICLE III
UNITS; CAPITAL ACCOUNTS
3.1 UNITHOLDERS.
(a) Each Person named on Schedule A attached hereto has made Capital
Contributions to the LLC as set forth on Schedule A in exchange for the Units
specified thereon, and each Unitholder's initial Capital Account established
pursuant to such Capital Contributions is set forth on Schedule A. Any reference
in this Agreement to Schedule A shall be deemed to be a reference to Schedule A
as amended and in effect from time to time. The LLC and each Unitholder shall
file all tax returns, including any schedules thereto, in a manner consistent
with such initial Capital Accounts. Each Person listed on Schedule A upon (i)
his, her or its execution of this Agreement or a counterpart thereto or
agreement to be bound hereby and (ii) receipt (or deemed receipt) by the LLC of
such Person's Capital Contribution as set forth on Schedule A, is hereby
admitted to the LLC as a Unitholder of the LLC. Each Unitholder's interest in
the LLC, including such Unitholder's interest in Profits, Losses and
Distributions of the LLC and the right to vote on certain matters as provided in
this Agreement, shall be represented by the Units owned by such Unitholder. The
ownership of Units shall entitle each Unitholder to allocations of Profits and
Losses and other items and distributions of cash and other property as set forth
in Article IV hereof. The Board may in its discretion issue certificates to the
Unitholders representing the Units held by each Unitholder.
(b) Representations and Warranties of Unitholders. Each Unitholder hereby
represents and warrants to the LLC and acknowledges that: (i) such Unitholder
has knowledge and experience in financial and business matters and is capable of
evaluating the merits and risks of an investment in the LLC and making an
informed investment decision with respect thereto; (ii) such Unitholder has
reviewed and evaluated all information necessary to assess the merits and risks
of his, her or its investment in the LLC and has had answered to such
Unitholder's satisfaction any and all questions regarding such information;
(iii) such Unitholder is able to bear the economic and financial risk of an
investment in the LLC for an indefinite period of time; (iv) such Unitholder is
acquiring interests in the LLC for investment only and not with a view to, or
for resale in connection with, any distribution to the public or public offering
thereof; (v) the interests in the LLC have not been registered under the
securities laws of any jurisdiction and cannot be disposed of unless they are
subsequently registered and/or qualified under applicable securities laws
(except for transactions exempt from registration under the securities laws) and
the provisions of this Agreement have been complied with; (vi) to the extent
applicable, the execution, delivery and performance of this Agreement have been
duly authorized by such Unitholder and do not require such Unitholder to obtain
any consent or approval that has not been obtained and do not contravene or
result in a default under any provision of any law or regulation applicable to
such Unitholder or other governing documents or any agreement or instrument to
which such Unitholder is a party or by which such Unitholder is bound; (vii) the
determination of such Unitholder to purchase interests in the LLC has been made
by such Unitholder independent of any other Unitholder and independent of any
statements or opinions as to the advisability of such purchase, which may have
been made or given by any other Unitholder or by any agent or employee of any
other Unitholder; (viii) the interests in the LLC were not offered to such
Unitholder by means of general solicitation or general advertising; and
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(ix) this Agreement is valid, binding and enforceable against such Unitholder in
accordance with its terms.
(c) No Liability of Unitholders.
(i) No 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 Unitholder's capacity as a Unitholder, whether to
the LLC, to any of the other Unitholders, to the creditors of the LLC or to any
other third party, for the debts, liabilities, commitments or any other
obligations of the LLC or for any losses of the LLC. Each Unitholder shall be
liable only to make such Unitholder's Capital Contribution to the LLC and the
other payments provided expressly herein.
(ii) Distribution. In accordance with the Delaware Act and the laws
of the State of Delaware, a Unitholder of a limited liability company may, under
certain circumstances, be required to return amounts previously distributed to
such Unitholder. It is the intent of the Unitholders that no distribution to any
Unitholder pursuant to Article IV hereof shall be deemed a return of money or
other property paid or distributed in violation of the Delaware Act. The payment
of any such money or distribution of any such property to a Unitholder shall be
deemed to be a compromise within the meaning of the Delaware Act, and the
Unitholder 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
Unitholder is obligated to make any such payment, such obligation shall be the
obligation of such Unitholder and not of any other Unitholder.
3.2 UNITHOLDER MEETINGS.
(a) Voting of Unitholders. A quorum shall be present at a meeting of
Unitholders if the Unitholders holding the Required Interest are represented at
the meeting in person or by proxy. With respect to any matter, other than a
matter for which the affirmative vote of the holders of a specified portion of
all Unitholders entitled to vote is required by the Delaware Act or by this
Agreement, the affirmative vote of the Unitholders holding the Required Interest
at a meeting of Unitholders at which a quorum is present shall be the act of the
Unitholders.
(b) Place. All meetings of the Unitholders shall be held at the principal
place of business of the LLC or at such other place within or without the State
of Delaware as shall be specified or fixed in the notices or waivers of notice
thereof; provided that any or all Unitholders may participate in any such
meeting by means of conference telephone or similar communications equipment
pursuant to Section 3.3(d).
(c) Adjournment. Notwithstanding the other provisions of the Certificate
or this Agreement, the chairman of the meeting or the Unitholders holding the
Required Interest shall have the power to adjourn such meeting from time to
time, without any notice other than announcement at the meeting of the time and
place of the holding of the adjourned meeting. If such meeting is adjourned by
the Unitholders, such time and place shall be determined by a vote of the
Unitholders holding the Required Interest. Upon the resumption of such adjourned
15
meeting, any business may be transacted that might have been transacted at the
meeting as originally called.
(d) Annual Meeting. An annual meeting of the Unitholders, for the election
of the Managers and for the transaction of such other business as may properly
come before the meeting, shall be held at such place, within or without the
State of Delaware, on such date and at such time as the Board shall fix and set
forth in the notice of the meeting, which date shall be within thirteen months
subsequent to the date of organization of the LLC or the last annual meeting of
Unitholders, whichever most recently occurred.
(e) Special Meetings. Special meetings of the Unitholders for any proper
purpose or purposes may be called at any time by the Board or the Unitholders
holding 25% of the Common Units. If not otherwise stated in or fixed in
accordance with the remaining provisions hereof, the record date for determining
Unitholders entitled to call a special meeting is the date any Unitholder first
signs the notice of that meeting. Only business within the purpose or purposes
described in the notice (or waiver thereof) required by this Agreement may be
conducted at a special meeting of the Unitholders.
(f) Notice. A written or printed notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than 10 or more than 60
days before the date of the meeting, either personally, by mail or by facsimile,
by or at the direction of the Board or the Unitholders calling the meeting to
each Unitholder. If mailed, any such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the Unitholder at its address
provided for in the LLC's books and records, or to such other address or to the
attention of such other person as the recipient party has specified by prior
written notice to the sending party. A Unitholder may waive notice of any
meeting, and attendance by a Unitholder at a meeting shall constitute a waiver
of notice by such Unitholder, except when the Unitholder attends the meeting for
the express purpose of objecting at the beginning of the meeting to the
transaction of business because the meeting was not lawfully called or convened.
(g) Record Date. The date on which notice of a meeting of Unitholders is
mailed or the date on which the resolution of the Board declaring a distribution
is adopted, as the case may be, shall be the record date for the determination
of the Unitholders entitled to notice of or to vote at such meeting (including
any adjournment thereof) or the Unitholders entitled to receive such
distribution.
(h) Required Interest. Except as otherwise expressly provided for in this
Agreement, all matters to be voted on pursuant to this Agreement shall require
the vote of Unitholders holding the Required Interest which vote shall only be
valid and binding if a notice of the meeting at which such vote is taken is
given to all Unitholders in accordance with Section 3.2(f)
(i) Proxies. A Unitholder may vote either in person or by proxy executed
in writing by the Unitholder. A telegram, telex, cablegram or similar
transmission by the Unitholder, or a photographic, photostatic, facsimile or
similar reproduction of a writing executed by the Unitholder shall be treated as
an execution in writing for purposes of this Section 3.2(i). Proxies for use at
any meeting of Unitholders or in connection with the taking of any action by
written
16
consent pursuant to Section 3.3 shall be filed with the Secretary of the LLC,
before or at the time of the meeting or execution of the written consent as the
case may be. All proxies shall be received and taken charge of and all ballots
shall be received and canvassed by the Secretary of the LLC, who shall decide
all questions concerning the qualification of voters, the validity of the
proxies and the acceptance or rejection of votes, unless an inspector or
inspectors shall have been appointed by the chairman of the meeting, in which
event such inspector or inspectors shall decide all such questions. No proxy
shall be valid after 11 months from the date of its execution unless otherwise
provided in the proxy. A proxy shall be revocable unless the proxy form
conspicuously states that the proxy is irrevocable and the proxy is coupled with
an interest. Should a proxy designate two or more Persons to act as proxies,
unless that instrument shall provide to the contrary, a majority of such Persons
present at any meeting at which their powers thereunder are to be exercised
shall have and may exercise all the powers of voting or giving consents thereby
conferred, or if only one be present, then such powers may be exercised by that
one; or, if an even number attend and a majority do not agree on any particular
issue, the LLC shall not be required to recognize such proxy with respect to
such issue if such proxy does not specify how the Units that are the subject of
such proxy are to be voted with respect to such issue.
(j) Conduct of Unitholder Meetings. All meetings of the Unitholders shall
be presided over by the chairman of the meeting, who shall be one of the
Chairman or Vice Chairman (or a representative thereof). The chairman of any
meeting of Unitholders shall determine the order of business and the procedure
at the meeting, including such regulation of the manner of voting and the
conduct of discussion as seem to him in order.
(k) Voting Rights. The holders of the Common 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 Common Units shall be entitled
to vote on all matters submitted to the Unitholders for a vote with each Common
Unit (other than Unvested Units) entitled to one vote. Except as otherwise
required by this Agreement or by law, the holders of Class A Preferred Units,
Class B Preferred Units and Class C Preferred Units shall not be entitled to a
vote on matters submitted to the Unitholders for a vote.
3.3 ACTION OF UNITHOLDERS BY WRITTEN CONSENT OR TELEPHONE CONFERENCE.
(a) Written Consent in Lieu of Meeting. Any action required or permitted
to be taken at any annual or special meeting of Unitholders may be taken without
a meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by the Unitholder or
Unitholders holding not less than the minimum percentages of Units that would be
necessary to take such action at a meeting at which all Unitholders entitled to
vote on the action were present and voted. Every written consent shall bear the
date of signature of each Unitholder who signs the consent. No written consent
shall be effective to take the action that is the subject to the consent unless,
within 60 days after the date of the earliest dated consent delivered to the LLC
in the manner required by this Section 3.3(a), a consent or consents signed by
the Unitholder or Unitholders holding not less than the minimum Units that would
be necessary to take the action that is the subject of the consent are delivered
to the LLC by delivery to its registered office, its principal place of business
or the chief executive officer. Delivery shall be by hand or certified or
registered mail, return receipt requested.
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Delivery to the LLC's principal place of business shall be addressed to the
chief executive officer. A telegram, telex, cablegram or similar transmission by
a Unitholder, or a photographic, photostatic, facsimile or similar reproduction
of a writing signed by a Unitholder, shall be regarded as signed and validly
delivered by the Unitholder for purposes of this Section 3.3(a). Prompt notice
of the taking of any action by Unitholders without a meeting by less than
unanimous written consent shall be given to those Unitholders who did not
consent in writing to the action.
(b) Record Date for Written Consent in Lieu of Meeting. The record date
for determining Unitholders entitled to consent to action in writing without a
meeting shall be the first date on which a signed written consent setting forth
the action taken or proposed to be taken is delivered to the LLC by delivery to
its registered office, its principal place of business, or the chief executive
officer. Delivery shall be by hand or by certified or registered mail, return
receipt requested. Delivery to the LLC's principal place of business shall be
addressed to the chief executive officer. A telegram, telex, cablegram or
similar transmission by A Unitholder, or a photographic, photostatic, facsimile
or similar reproduction of a writing signed by a Unitholder, shall be regarded
as signed and validly delivered by the Unitholder for purposes of this Section
3.3(b).
(c) Filings. If any action by Unitholders is taken by written consent, any
certificate or documents filed with the Secretary of State of Delaware as a
result of the taking of the action shall state, in lieu of any statement
required by the Delaware Act concerning any vote of Unitholders, that written
consent has been given in accordance with the provisions of the Delaware Act and
that any written notice required by the Delaware Act has been given.
(d) Telephone Conference. Unitholders may participate in and hold a
meeting by means of conference telephone or similar communications equipment by
means of which all Persons participating in the meeting can hear each other, and
participation in such meeting shall constitute attendance and presence in person
at such meeting, except where a Person participates in the meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
3.4 ISSUANCE OF ADDITIONAL UNITS AND INTERESTS. Subject to compliance with
the provisions of this Agreement, the Contribution Agreements, and the
Securityholders Agreement, the Board shall have the right to cause the LLC to
issue or sell to any Person (including Unitholders and Affiliates) any of the
following (which for purposes of this Agreement shall be "Additional
Securities"): (i) additional Units or other interests in the LLC (including
other classes or series thereof having different rights), (ii) obligations,
evidences of indebtedness, or other securities or interests convertible or
exchangeable into Units or other interests in the LLC, and (iii) warrants,
options, or other rights to purchase or otherwise acquire Units or other
interests in the LLC. Subject to the provisions of this Agreement, the
Contribution Agreements, and the Securityholders Agreement, the Board shall
determine the terms and conditions governing the issuance of such Additional
Securities, including the number and designation of such Additional Securities,
the preference (with respect to distributions, liquidations, or otherwise) over
any other Units and any required contributions in connection therewith. Any
Person who acquires Units may be admitted to the LLC as a Unitholder pursuant to
the terms of Section 11.2 hereof. If any Person acquires additional Units or
other interests in the LLC or is
18
admitted to the LLC as an additional Unitholder, Schedule A shall be amended to
reflect such additional issuance and/or Unitholder, as the case may be.
Notwithstanding anything herein to the contrary, Class A Preferred Units shall
be reserved for issuance in exchange for other Units pursuant to the terms of
the Employee Contribution Agreements, and such Class A Preferred Units may be
issued only in exchange for other Units pursuant to the terms of the Employee
Contribution Agreements and under no other circumstances.
3.5 CAPITAL ACCOUNTS.
(a) The LLC shall maintain a separate Capital Account for each Unitholder
according to the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). For
this purpose, the LLC may (in the discretion of the Board), upon the occurrence
of the events specified in Treasury Regulation Section 1.704-l(b)(2)(iv)(f),
increase or decrease the Capital Accounts in accordance with the rules of such
regulation and Treasury Regulation Section 1.704-1(b)(2)(iv)(g) to reflect a
revaluation of LLC property. Without limiting the foregoing, each Unitholder's
Capital Account shall be adjusted:
(i) by adding any additional Capital Contributions made by such
Unitholder in consideration for the issuance of Units;
(ii) by deducting any amounts paid (including the Fair Market Value
of property other than cash) to such Unitholder in connection with the
redemption or other repurchase by the LLC of Units;
(iii) by adding any Profits allocated in favor of such Unitholder
and subtracting any Losses allocated in favor of such Unitholder; and
(iv) by deducting any distributions paid in cash or the Fair Market
Value of any other assets distributed to such Unitholder by the LLC on Units.
(b) For purposes of computing the amount of any item of LLC income, gain,
loss, or deduction to be allocated pursuant to Article IV and to be reflected in
the Capital Accounts, the determination, recognition, and classification of any
such item shall be the same as its determination, recognition, and
classification for federal income tax purposes (including any method of
depreciation, cost recovery, or amortization used for this purpose); provided
that:
(i) The computation of all items of income, gain, loss, and
deduction shall include those items described in Code Section 705(a)(l)(B) or
Code Section 705(a)(2)(B) and Treasury Regulation Section 1.704-1(b)(2)(iv)(i),
without regard to the fact that such items are not includable in gross income or
are not deductible for federal income tax purposes.
(ii) If the Book Value of any LLC property is adjusted pursuant to
Treasury Regulation Section 1.704-l(b)(2)(iv)(e) or (f), the amount of such
adjustment shall be taken into account as gain or loss from the disposition of
such property.
(iii) Items of income, gain, loss, or deduction attributable to the
disposition of LLC property having a Book Value that differs from its adjusted
basis for tax purposes shall be computed by reference to the Book Value of such
property.
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(iv) Items of depreciation, amortization, and other cost recovery
deductions with respect to LLC property having a Book Value that differs from
its adjusted basis for tax purposes shall be computed by reference to the
property's Book Value in accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(g).
(v) To the extent an adjustment to the adjusted tax basis of any LLC
asset pursuant to Code Sections 732(d), 734(b) or 743(b) is required, pursuant
to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis).
3.6 NEGATIVE CAPITAL ACCOUNTS. No Unitholder shall be required to pay to
any other Unitholder or the LLC any deficit or negative balance which may exist
from time to time in such Unitholder's Capital Account (including upon and after
dissolution of the LLC).
3.7 NO WITHDRAWAL. No Person shall be entitled to withdraw any part of
such Person's Capital Contributions or Capital Account or to receive any
Distribution from the LLC, except as expressly provided herein or in the other
agreements referred to herein.
3.8 LOANS FROM UNITHOLDERS. Loans by Unitholders to the LLC shall not be
considered Capital Contributions. If any Unitholder shall loan funds to the LLC,
the making of such loans shall not result in any increase in the amount of the
Capital Account of such Unitholder. The amount of any such loans shall be a debt
of the LLC to such Unitholder and shall be payable or collectible in accordance
with the terms and conditions upon which such loans are made.
ARTICLE IV
DISTRIBUTIONS AND ALLOCATIONS
4.1 DISTRIBUTIONS.
(a) Distributions Generally. Except as otherwise set forth in this Section
4.1, and subject to the provisions of Section 18-607 of the Delaware Act, the
Board may in its sole discretion make Distributions at any time or from time to
time. All Distributions shall be made only in the following order and priority:
(i) First, to the Unitholders holding Class A Preferred Units, an
amount equal to the aggregate Class A Unpaid Yield (in the proportion that each
Unitholder's share of Class A Unpaid Yield bears to the aggregate Class A Unpaid
Yield) until each such Unitholder has received Distributions in respect of such
Unitholder's Class A Preferred Units in an amount equal to the aggregate Class A
Unpaid Yield on such Unitholder's outstanding Class A Preferred Units as of the
time of such Distribution, and no Distribution or any portion thereof may be
made pursuant to Sections 4.l(a)(ii) through (vii) below until the entire amount
of the Class A Unpaid Yield on the outstanding Class A Preferred Units as of the
time of such Distribution has been paid in full.
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(ii) Second, to the Unitholders holding Class A Preferred Units, an
amount equal to the aggregate Class A Unreturned Capital with respect to such
Units (in the proportion that each Unitholder's share of Class A Unreturned
Capital with respect to such Class A Preferred Units bears to the aggregate
amount of Class A Unreturned Capital with respect to all Class A Preferred
Units) until each such Unitholder has received Distributions in respect of such
Unitholder's Class A Preferred Units in an amount equal to the aggregate Class A
Unreturned Capital with respect to such Unitholder's Class A Preferred Units as
of the time of such Distribution, and no Distribution or any portion thereof may
be made pursuant to Sections 4.1(a)(iii) through (vii) below until the entire
amount of Class A Unreturned Capital with respect to the outstanding Class A
Preferred Units as of the time of such Distribution has been paid in full.
(iii) Third, to the Unitholders holding Class B Preferred Units, an
amount equal to the aggregate Class B Unpaid Yield (in the proportion that each
Unitholder's share of Class B Unpaid Yield bears to the aggregate Class B Unpaid
Yield) until each such Unitholder has received Distributions in respect of such
Unitholder's Class B Preferred Units in an amount equal to the aggregate Class B
Unpaid Yield on such Unitholder's outstanding Class B Preferred Units as of the
time of such Distribution, and no Distribution or any portion thereof may be
made pursuant to Sections 4.1(a)(iv) through (vii) below until the entire amount
of the Class B Unpaid Yield on the outstanding Class B Preferred Units as of the
time of such Distribution has been paid in full.
(iv) Fourth, to the Unitholders holding Class B Preferred Units, an
amount equal to the aggregate Class B Unreturned Capital with respect to such
Units (in the proportion that each Unitholder's share of Class B Unreturned
Capital with respect to such Class B Preferred Units bears to the aggregate
amount of Class B Unreturned Capital with respect to all Class B Preferred
Units) until each such Unitholder has received Distributions in respect of such
Unitholder's Class B Preferred Units in an amount equal to the aggregate Class B
Unreturned Capital with respect to such Unitholder's Class B Preferred Units as
of the time of such Distribution, and no Distribution or any portion thereof may
be made pursuant to Sections 4.1(a)(v) through (vii) below until the entire
amount of Class B Unreturned Capital with respect to the outstanding Class B
Preferred Units as of the time of such Distribution has been paid in full.
(v) Fifth, to the Unitholders holding Class C Preferred Units, an
amount equal to the aggregate Class C Unpaid Yield (in the proportion that each
Unitholder's share of Class C Unpaid Yield bears to the aggregate Class C Unpaid
Yield) until each such Unitholder has received Distributions in respect of such
Unitholder's Class C Preferred Units in an amount equal to the aggregate Class C
Unpaid Yield on such Unitholder's outstanding Class C Preferred Units as of the
time of such Distribution, and no Distribution or any portion thereof may be
made pursuant to Sections 4.1(a)(vi) or (vii) below until the entire amount of
the Class C Unpaid Yield on the outstanding Class C Preferred Units as of the
time of such Distribution has been paid in full.
(vi) Sixth, to the Unitholders holding Class C Preferred Units, an
amount equal to the aggregate Class C Unreturned Capital with respect to such
Units (in the proportion that each Unitholder's share of Class C Unreturned
Capital with respect to such Class C Preferred
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Units bears to the aggregate amount of Class C Unreturned Capital with respect
to all Class C Preferred Units) until each such Unitholder has received
Distributions in respect of such Unitholder's Class C Preferred Units in an
amount equal to the aggregate Class C Unreturned Capital with respect to such
Unitholder's Class C Preferred Units as of the time of such Distribution, and no
Distribution or any portion thereof may be made pursuant to Section 4.1(a)(vii)
below until the entire amount of Class C Unreturned Capital with respect to the
outstanding Class C Preferred Units as of the time of such Distribution has been
paid in full.
(vii) Seventh, to the Unitholders holding Common Units, all
remaining amounts distributable on such date under this Section 4.1(a), pro rata
according to such holders' ownership of Common Units immediately prior to such
Distribution.
For purposes of determining the amount of any Distribution that is allocable to
a Unitholder pursuant to this Section 4.l(a), the amount of each Distribution
shall be the amount of cash plus the Fair Market Value of any other property
distributed by the LLC.
(b) Tax Distributions. Notwithstanding any other provision herein to the
contrary, so long as the LLC is treated as a partnership for federal and state
income tax purposes, the LLC shall use its best efforts to distribute to the
Unitholders of each class of Units within 15 days after the end of each Fiscal
Quarter of the LLC, to the extent that funds are legally available therefor and
would not impair the liquidity of the LLC with respect to working capital,
capital expenditures, debt service, reserves, or otherwise and would not be
prohibited under any credit facility to which the LLC or any Subsidiary is a
party, an amount of cash (in the proportion that each Unitholder's Units of such
class bears to the aggregate Units of such class) (a "Tax Distribution") which
in the good faith judgment of the Board equals the excess, if any, of (i) the
product of (x) the amount of taxable income allocable to the Unitholders of such
class in respect of the period beginning on the date hereof and ending at the
close of such Fiscal Quarter, multiplied by (y) the combined maximum federal,
state, and local income tax rate to be applied with respect to such taxable
income (calculated by using the highest maximum combined marginal federal,
state, and local income tax rates to which any Unitholder may be subject and
taking into account the deductibility of state income tax for federal income tax
purposes) for such period (making an appropriate adjustment for any rate changes
that take place during such period) over (ii) all prior distributions made to
the Unitholders of such class pursuant to this subsection (b) and subsection (a)
above. All Tax Distributions shall be treated as an advance of Distributions to
the Unitholders of such class for purposes of Section 4.1(a).
(c) Persons Receiving Distributions. Each Distribution shall be made to
the Persons shown on the LLC's books and records as Unitholders as of the date
of such Distribution; provided, however, that any transferor and transferee of
Units may mutually agree as to which of them should receive payment of any
Distribution under Section 4.1.
(d) Distributions upon Sale of the LLC. In the event of a Sale of the LLC,
each Unitholder shall receive in exchange for the Units held by such Unitholder
the same portion of the aggregate consideration from such sale or exchange that
such Unitholder would have received if such aggregate consideration had been
distributed by the LLC in accordance with the provisions of Section 4.1(a).
Each holder of Units shall take all necessary or desirable actions in
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connection with the distribution of the aggregate consideration from such sale
or exchange as requested by the LLC.
(e) Distributions Upon Fundamental Change, Change In Ownership or Public
Offering. In the event of a Fundamental Change, Change in Ownership or Public
Offering (each, a "Triggering Event"), and to the extent not prohibited under
any credit facility to which the LLC or any of its Subsidiaries is a party, the
LLC shall distribute to the holders of Class A Preferred Units, Class B
Preferred Units and Class C Preferred Units outstanding at the time of such
event an amount equal to the lesser of (i) the proceeds received by the LLC from
such Triggering Event, which proceeds shall be distributed in accordance with
provisions of Section 4.1(a) hereof and (ii) an amount equal, in the aggregate,
to the sum of the Class A Unreturned Capital, the Class A Unpaid Yield, the
Class B Unreturned Capital, the Class B Unpaid Yield, the Class C Unreturned
Capital and the Class C Unpaid Yield.
(f) Distributions Upon Redemption of Coinmach Class A Preferred Stock. The
LLC shall distribute to GIC and the TCW/Crescent Purchasers, on July 5, 2010,
the proceeds (if any) received by the LLC from the redemption of Coinmach Class
A Preferred Stock which it holds, pro rata among such Unitholders based on the
aggregate Class B Unreturned Capital and Class B Unpaid Yield held by each such
Unitholder on such date; provided, that in no event shall the proceeds
distributed to GIC and the TCW/Crescent Purchasers pursuant to this Section
4.l(f) exceed the aggregate Class B Unreturned Capital and Class B Unpaid Yield
on the Class B Preferred Units held by such Unitholder as of July 5,2010.
4.2 PRIORITY OF CLASS B PREFERRED UNITS ON DISTRIBUTIONS AND REDEMPTION.
So long as any Class B Unpaid Yield or Class B Unreturned Capital remains
outstanding, without the prior written consent of the holders of at least 70% of
the outstanding units of Class B Preferred Units, the LLC shall not, nor shall
it permit any Subsidiary to issue any Equity Securities having rights or
preferences equal or senior to those of the Class B Preferred Units (other than
the Class A Preferred Units) or redeem, purchase, or otherwise acquire directly
or indirectly any Junior Securities, nor shall the LLC directly or indirectly
pay or declare any distributions upon any Junior Securities, other than tax
distributions pursuant to Section 4.1(b); provided that the LLC may repurchase
Junior Securities (i) from present or former employees of the LLC and its
Subsidiaries in accordance with employment agreements in effect on such
repurchase date with respect to such employees and (ii) pursuant to the
Securityholders Agreement.
4.3 PRIORITY OF CLASS C PREFERRED UNITS ON DISTRIBUTIONS AND REDEMPTION.
The LLC shall not redeem any Class C Preferred Units so long as any Class A
Preferred Units or Class B Preferred Units remain outstanding. So long as any
Class C Preferred Units remain outstanding, without the prior written consent of
the holders of a majority of the outstanding units of Class C Preferred Units,
the LLC shall not, nor shall it permit any Subsidiary to redeem, purchase, or
otherwise acquire directly or indirectly any Common Units, nor shall the LLC
directly or indirectly pay or declare any distributions upon any Common Units,
other than tax distributions pursuant to Section 4.1(b); provided that the LLC
may repurchase Common Units (i) from present or former employees of the LLC and
its Subsidiaries in accordance with employment agreements in effect on such
repurchase date with respect to such employees and (ii) pursuant to the
Securityholders Agreement.
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4.4 ALLOCATIONS. Except as otherwise provided in Section 4.5, Profits
and Losses for any Fiscal Year shall be allocated among the Unitholders in such
a manner that, as of the end of such Fiscal Year, the sum of (i) the Capital
Account of each Unitholder, (ii) such Unitholder's share of Minimum Gain (as
determined according to Treasury Regulation Section 1.704-2(g)), and (iii) such
Unitholder's partner nonrecourse debt minimum gain (as defined in Treasury
Regulation Section 1.704-2(i)(2)) shall be equal to the respective net amounts,
positive or negative, which would be distributed to them, determined as if the
LLC were to (i) liquidate the assets of the LLC for an amount equal to their
Book Value, and (ii) distribute the proceeds of liquidation pursuant to Section
13.2.
4.5 SPECIAL ALLOCATIONS.
(a) Losses attributable to partner nonrecourse debt (as defined in
Treasury Regulation Section 1.704-2(b)(4)) shall be allocated in the manner
required by Treasury Regulation Section 1.704-2(i). If there is a net decrease
during a Fiscal Year in partner nonrecourse debt minimum gain (as defined in
Treasury Regulation Section 1.704-2(i)(3)), Profits for such Fiscal year (and,
if necessary, for subsequent Fiscal Years) shall be allocated to the
Unitholders in the amounts and of such character as determined according to,
and subject to the exceptions contained in, Treasury Regulation Section
1.704-2(i)(4).
(b) If there is a net decrease in Minimum Gain during any Fiscal Year,
each Unitholder shall be allocated Profits for such Fiscal Year (and, if
necessary, for subsequent Fiscal Years) in the amounts and of such character as
determined according to, and subject to the exceptions contained in, Treasury
Regulation Section 1.704-2(f). This Section 4.5(b) is intended to be a minimum
gain chargeback provision that complies with the requirements of Treasury
Regulation Section 1.704-2(f), and shall be interpreted in a manner consistent
therewith.
(c) If any Unitholder that unexpectedly receives an adjustment,
allocation, or distribution described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6) has an Adjusted Capital Account Deficit
as of the end of any Taxable Year, computed after the application of Sections
4.5(c) and 4.5(d) but before the application of any other provision of this
Article IV, then Profits for such Taxable Year shall be allocated to such
Unitholder in proportion to, and to the extent of, such Adjusted Capital
Account Deficit. This Section 4.5(c) is intended to be a qualified income
offset provision as described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted in a manner consistent therewith.
(d) Profits and Losses shall be allocated in a manner consistent with
the manner that the adjustments to the Capital Accounts are required to be made
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(j), (k) and (m).
(e) The allocations set forth in Sections 4.5(a)-(d) (the "Regulatory
Allocations") are intended to comply with certain requirements of Sections
1.704-1(b) and 1.704-2 of the Treasury Regulations. The Regulatory Allocations
may not be consistent with the manner in which the Unitholders intend to
allocate Profit and Loss of the LLC or make LLC distributions. Accordingly,
notwithstanding the other provisions of this Article IV, but subject to the
Regulatory Allocations, income, gain, deduction, and loss shall be reallocated
among the Unitholders so as to eliminate the effect of the Regulatory
Allocations and thereby cause the
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respective Capital Accounts of the Unitholders to be in the amounts (or as close
thereto as possible) they would have been if Profit and Loss (and such other
items of income, gain, deduction, and loss) had been allocated without reference
to the Regulatory Allocations. In general, the Unitholders anticipate that this
will be accomplished by specially allocating other Profit and Loss (and such
other items of income, gain, deduction, and loss) among the Unitholders so that
the net amount of the Regulatory Allocations and such special allocations to
each such Unitholder is zero.
4.6 TAX ALLOCATIONS.
(a) The income, gains, losses, deductions, and credits of the LLC will
be allocated, for federal, state, and local income tax purposes, among the
Unitholders in accordance with the allocation of such income, gains, losses,
deductions, and credits among the Unitholders for computing their Capital
Accounts; except that, if any such allocation is not permitted by the Code or
other applicable law, then the LLC's subsequent income, gains, losses,
deductions, and credits will be allocated among the Unitholders so as to reflect
as nearly as possible the allocation set forth herein in computing their Capital
Accounts.
(b) Items of LLC taxable income, gain, loss, and deduction with
respect to any property contributed to the capital of the LLC shall be allocated
among the Unitholders in accordance with Code Section 704(c) so as to take
account of any variation between the adjusted basis of such property to the LLC
for federal income tax purposes and its Book Value.
(c) If the Book Value of any LLC asset is adjusted pursuant to the
requirements of Treasury Regulation Section l.704-l(b)(2)(iv)(e) or (f)
subsequent allocations of items of taxable income, gain, loss, and deduction
with respect to such asset shall take account of any variation between the
adjusted basis of such asset for federal income tax purposes and its Book Value
in the same manner as under Code Section 704(c).
(d) Allocations of tax credits, tax credit recapture, and any items
related thereto shall be allocated to the Unitholders according to their
interests in such items as determined by the Board taking into account the
principles of Treasury Regulation Section 1.704-1(b)(4)(ii).
(e) Allocations pursuant to this Section 4.6 are solely for purposes
of federal, state, and local taxes and shall not affect, or in any way be taken
into account in computing, any Unitholder's Capital Account or Unit of Profits,
Losses, Distributions, or other LLC items pursuant to any provision of this
Agreement.
4.7 INDEMNIFICATION AND REIMBURSEMENT FOR PAYMENTS ON BEHALF OF A
UNITHOLDER. If the LLC is required by law to make any payment that is
specifically attributable to a Unitholder or a Unitholder's status as such
(including federal withholding taxes, state personal property taxes, and state
unincorporated business taxes), then such Unitholder shall indemnify the LLC in
full for the entire amount paid (including interest, penalties and related
expenses). The LLC may pursue and enforce all rights and remedies it may have
against each Unitholder under this Section 4.7, including instituting a lawsuit
to collect such indemnification and contribution with interest calculated at a
rate equal to 10% per annum, compounded as of the last day of each year (but not
in excess of the highest rate per annum permitted by law). The
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LLC's rights under this Section 4.7 shall survive a liquidation or dissolution
of the LLC and any amounts recovered shall be distributed in accordance with
Section 13.2 hereof.
ARTICLE V
BOARD OF MANAGERS; OFFICERS
5.1 MANAGEMENT BY THE BOARD OF MANAGERS.
(a) Unitholders Elect Board. The Unitholders shall not manage and
control the business and affairs of the LLC, except for situations in which the
approval of the Unitholders is required by this Agreement or by non-waivable
provisions of applicable law. The Board shall be elected by the Unitholders
pursuant to Section 5.2(a).
(b) Authority of Board of Managers.
(i) Except for situations in which the approval of the Common
Unitholders is otherwise required, subject to the provisions of Section
5.1(b)(ii), (A) the powers of the LLC shall be exercised by or under the
authority of, and the business and affairs of the LLC shall be managed under the
direction of, the Board and (B) subject to the terms and conditions of the
GTCR-CLC Contribution Agreement, the Board may make all decisions and take all
actions for the LLC not otherwise provided for in this Agreement, including the
following:
(A) entering into, making and performing contracts, agreements
and other undertakings binding the LLC that may be necessary, appropriate or
advisable in furtherance of the purposes of the LLC and making all decisions and
waivers thereunder;
(B) maintaining the assets of the LLC in good order;
(C) collecting sums due the LLC;
(D) opening and maintaining bank and investment accounts and
arrangements, drawing checks and other orders for the payment of money and
designating individuals with authority to sign or give instructions with respect
to those accounts and arrangements;
(E) to the extent that funds of the LLC are available
therefor, paying debts and obligations of the LLC;
(F) acquiring, utilizing for LLC purposes and disposing of any
asset of the LLC;
(G) hiring and employing executives, Officers, supervisors and
other personnel;
(H) selecting, removing and changing the authority and
responsibility of lawyers, accountants and other advisers and consultants;
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(I) entering into guaranties on behalf of the LLC's
Subsidiaries;
(J) obtaining insurance for the LLC;
(K) determining distributions of cash and other property of
the LLC as provided in Article IV;
(L) establishing reserves for commitments and obligations
(contingent or otherwise) of the LLC; and
(M) establishing a seal for the LLC.
(ii) The Board may act (A) by resolutions adopted at a meeting and
by written consents pursuant to Section 5.3, (B) by delegating power and
authority to committees pursuant to Section 5.4, and (C) by delegating power and
authority to any Officer pursuant to Section 5.5(a).
(iii) Each Unitholder acknowledges and agrees that no Manager
shall, as a result of being a Manager (as such), be bound to devote all of his
business time to the affairs of the LLC, and that he and his Affiliates do and
will continue to engage for their own account and for the accounts of others in
other business ventures.
(c) Fiduciary Duties. Each Manager shall owe such fiduciary duties to
the LLC as a director owes to a corporation under the Delaware General
Corporation Law from time to time.
(d) Officers. The management of the business and affairs of the LLC by
the Officers and the exercising of their powers shall be conducted under the
supervision of and subject to the approval of the Board.
5.2 COMPOSITION AND ELECTION OF THE BOARD OF MANAGERS.
(a) Number and Election. The number of Managers on the Board shall be
established by the terms and conditions of the Securityholders Agreement, as
amended from time to time. The Managers shall be elected in accordance with the
terms of the Securityholders Agreement, or at such time as the Securityholders
Agreement is no longer in effect, by the holders of the Required Interest
present in person or represented by proxy at any meeting of the Unitholders. The
Managers shall be elected in this manner, except as provided in Section 5.2(d).
(b) Term. Members of the Board shall serve until their resignation,
death or removal or the election of their successors in accordance with the
terms of the Securityholders Agreement, or at such time as the Securityholders
Agreement is no longer in effect, in accordance with the terms hereof. Members
of the Board need not be Unitholders and need not be residents of the State of
Delaware. A member of the Board may resign as such by delivering his, her or its
written resignation to the LLC at the LLC's principal office addressed to the
Board. Such resignation shall be effective upon receipt unless it is specified
to be effective at some other time or upon the happening of some other event.
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(c) Removal and Resignation. Any Manager or the entire Board may only
be removed in accordance with the terms of the Securityholders Agreement. At
such time as the Securityholders Agreement is no longer in effect, any Manager
or the entire Board may be removed at any time, with or without cause, by the
holders of the Required Interest. Any Manager may resign at any time upon
written notice to the Board. Such resignation shall take effect on the date of
the receipt of such notice or at any later date specified therein, and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
(d) Vacancies. Vacancies and newly created managerships resulting from
any increase in the authorized number of Managers may be filled only in
accordance with the terms of the Securityholders Agreement, or at such time as
the Securityholders Agreement is no longer in effect, by a representative
designated by the holders of the Required Interest. Each Manager so chosen shall
hold office until a successor is duly elected and qualified or until his or her
earlier death, resignation or removal as herein provided.
(e) Reimbursement. The LLC shall pay all reimbursable out-of-pocket
costs and expenses incurred by each member of the Board incurred in the course
of their service hereunder, including in connection with attending regular and
special meetings of the Board, any board of managers or board of directors of
any of the LLC's Subsidiaries and any committee thereof.
(f) Compensation of Managers. Managers shall receive no compensation
for serving in such capacity.
(g) Reliance by Third Parties. Any Person dealing with the LLC, other
than a Unitholder, may rely on the authority of the Board (or any Officer
authorized by the Board) in taking any action in the name of the LLC without
inquiry into the provisions of this Agreement or compliance herewith, regardless
of whether that action actually is taken in accordance with the provisions of
this Agreement. Every agreement, instrument or document executed by the Board
(or any Officer authorized by the Board) in the name of the LLC with respect to
any business or property of the LLC shall be conclusive evidence in favor of any
Person relying thereon or claiming thereunder that (i) at the time of the
execution or delivery thereof, this Agreement was in full force and effect, (ii)
such agreement, instrument or document was duly executed according to this
Agreement and is binding upon the LLC and (iii) the Board or such Officer was
duly authorized and empowered to execute and deliver such agreement, instrument
or document for and on behalf of the LLC.
5.3 BOARD MEETINGS AND ACTIONS BY WRITTEN CONSENT.
(a) Quorum; Voting. A majority of the total number of Managers fixed
by, or in the manner provided in, this Agreement must be present (including
pursuant to Section 5.3(h)) in order to constitute a quorum for the transaction
of business of the Board (provided that a quorum must at all times include at
least one Manager designated by GTCR-CLC) and except as otherwise provided in
this Agreement, the act of a majority of the Managers present at a meeting of
the Board at which a quorum is present shall be the act of the Board. A Manager
who is present at a meeting of the Board 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
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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 LLC immediately after the adjournment of the meeting. Such right
to dissent shall not apply to a Manager who voted in favor of such action.
(b) Place; Attendance. Meetings of the Board may be held at such place
or places as shall be determined from time to time by resolution of the Board.
At all meetings of the Board, business shall be transacted in such order as
shall from time to time be determined by resolution of the Board. Attendance of
a Manager at a meeting shall constitute a waiver of notice of such meeting,
except where a Manager 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) Meeting In Connection With Unitholder Meeting. In connection with
any meeting of Unitholders at which Managers are elected, the Managers may, if a
quorum is present, hold a first meeting for the transaction of business
immediately after and at the same place as such meeting of the Unitholders.
Notice of such meeting at such time and place shall not be required.
(d) Time, Place and Notice. Regular meetings of the Board shall be
held at such times and places as shall be designated from time to time by
resolution of the Board. Notice of such meetings shall not be required.
(e) Special Meetings. Special meetings of the Board may be called by
any Manager on at least 24 hours' notice to each other Manager. 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.
(f) Chairman and Vice Chairman. The Board shall designate one of the
Managers to serve as Chairman and a different Manager to serve as Vice Chairman.
The Chairman shall preside at all meetings of the Board. If the Chairman is
absent at any meeting of the Board, the Vice Chairman shall preside over such
Board meeting. If the Chairman and Vice Chairman are absent, the Managers
present shall designate a member to serve as interim chairman for that meeting.
Neither the Chairman nor Vice Chairman, except in their capacity as an Officer,
shall have the authority or power to act for or on behalf of the LLC, to do any
act that would be binding on the LLC or to make any expenditure or incur any
obligation on behalf of the LLC or authorize any of the foregoing.
(g) Board Meetings. There shall be meetings of the Board from time to
time as requested by holders of the Required Interest.
(h) Action by Written Consent or Telephone Conference. Any action
permitted or required by the Delaware Act, the Certificate or this Agreement to
be taken at a meeting of the Board or any committee designated by the Board may
be taken without a meeting if a consent in writing, setting forth the action to
be taken, is signed by all the Managers or members of such committee, as the
case may be. Such consent shall have the same force and effect as a unanimous
vote at a meeting and may be stated as such in any document or instrument filed
with the Secretary of State of Delaware, and the execution of such consent shall
constitute attendance
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or presence in person at a meeting of the Board or any such committee, as the
case may be. Subject to the requirements of the Delaware Act, the Certificate or
this Agreement for notice of meetings, unless otherwise restricted by the
Certificate, the Managers or members of any committee designated by the Board
may participate in and hold a meeting of the Board or any 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.
5.4 COMMITTEES; DELEGATION OF AUTHORITY AND DUTIES.
(a) Committees; Generally. The Board may, from time to time, designate
one or more committees, each of which shall include at least one (1) Manager
designated BY GTCR-CLC. Any such committee, to the extent provided in the
enabling resolution or in the Certificate or this Agreement, shall have and may
exercise all of the authority of the Board. At every meeting of any such
committee, the presence of a majority of all the members thereof shall
constitute a quorum, and the affirmative vote of a majority of the members
present shall be necessary for the adoption of any resolution. The Board may
dissolve any committee at any time, unless otherwise provided in the Certificate
or this Agreement.
(b) Audit Committee. The Board may establish an audit committee to
select the LLC's independent accountants and to review the annual audit of the
LLC's financial statements conducted by such accountants.
(c) Delegation; Generally. The Board may, from time to time, delegate
to one or more Persons (including any Manager or Officer) such authority and
duties as the Board may deem advisable in addition to those powers and duties
set forth in Section 5.1(b) hereof. The Board also may assign titles (including
chairman, chief executive officer, president, vice president, secretary,
assistant secretary, treasurer and assistant treasurer) to any Manager,
Unitholder or other individual and may delegate to such Manager, Unitholder or
other individual certain authority and duties. Any number of titles may be held
by the same Manager, Unitholder or other individual. Any delegation pursuant to
this Section 5.4(c) may be revoked at any time by the Board.
(d) Third-party Reliance. Any Person dealing with the LLC, other than
a Unitholder, may rely on the authority of any Officer in taking any action in
the name of the LLC without inquiry into the provisions of this Agreement or
compliance herewith, regardless of whether that action actually is taken in
accordance with the provisions of this Agreement.
5.5 OFFICERS.
(a) Designation and Appointment. The Board may (but need not), from
time to time, designate and appoint one or more persons as an Officer of the
LLC. No Officer need be a resident of the State of Delaware, a Unitholder or a
Manager. Any Officers so designated shall have such authority and perform such
duties as the Board may, from time to time, delegate to them. The Board may
assign titles to particular Officers. Unless the Board otherwise decides, if
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the title is one commonly used for officers of a business corporation formed,
the assignment of such title shall constitute the delegation to such Officer of
the authority and duties that are normally associated with that office, subject
to (i) any specific delegation of authority and duties made to such Officer by
the Board pursuant to the third sentence of this Section 5.5(a) or (ii) any
delegation of authority and duties made to one or more Officers pursuant to the
terms of Section 5.4(c) and 5.5(c). Each Officer shall hold office until such
Officer's successor shall be duly designated and shall qualify or until such
Officer's death or until such Officer shall resign or shall have been removed in
the manner hereinafter provided. Any number of offices may be held by the same
individual. The salaries or other compensation, if any, of the Officers and
agents of the LLC shall be fixed from time to time by the Board.
(b) Resignation. Any Officer (subject to any contract rights available
to the LLC, if applicable) may resign as such at any time. Such resignation
shall be made in writing and shall take effect at the time specified therein, or
if no time be specified, at the time of its receipt by the Board. 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, by the Board whenever in its judgment the best interests of
the LLC shall be served thereby; provided, however, that such removal shall be
without prejudice to the contract rights, if any, of the individual so removed.
Designation of an Officer shall not of itself create contract rights. Any
vacancy occurring in any office of the LLC may be filled by the Board.
(c) Duties of Officers; Generally. The Officers, in the performance of
their duties as such, shall owe to the Unitholders 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. The following
Officers, to the extent such Officers have been appointed by the Board, shall
have the following duties:
(i) Chief Executive Officer. Subject to the powers of the Board,
the chief executive officer of the LLC shall be in the general and active charge
of the entire business and affairs of the LLC, and shall be its chief
policy-making Officer. The president, chief financial officer and each other
senior officer of the LLC shall report directly to the chief executive officer.
The chief executive officer shall see that all orders and resolutions of the
Board are carried into effect. The chief executive officer shall have such other
powers and perform such other duties as may be prescribed by the Board.
(ii) President. The president shall, subject to the powers of the
Board and the chief executive officer, be the chief administrative officer of
the LLC and shall have general charge of the business, affairs and property of
the LLC, and control over its Officers (other than the chief executive officer),
agents and employees. The president shall see that all orders and resolutions of
the Board and the chief executive officer are carried into effect. He or she
shall be responsible for the employment of employees, agents and Officers (other
than the chief executive officer) as may be required for the conduct of the
business and the attainment of the objectives of the LLC. He or she shall have
authority to suspend or to remove any employee, agent or Officer (other than the
chief executive officer) of the LLC and, in the case of the suspension for cause
of any such Officer, to recommend to the Board what further action should be
taken. In the absence of the president, his or her duties shall be performed and
his or her authority may be exercised by the chief executive officer. In the
absence of the president and the chief executive officer, the
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\duties of the president shall be performed and his or her authority may be
exercised by such Officer as may have been designated as the most senior officer
of the LLC. The president shall have such other powers and perform such other
duties as may be prescribed by the chief executive officer or the Board.
(iii) 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
LLC, including accounts of its assets, liabilities, receipts, disbursements,
gains, losses, capital and Units. The chief financial officer shall have the
custody of the funds and securities of the LLC, and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the LLC, and shall
deposit all moneys and other valuable effects in the name and to the credit of
the LLC in such depositories as may be designated by the Board. The chief
financial officer shall have such other powers and perform such other duties as
may be prescribed by the chief executive officer or the Board.
(iv) Vice President(s). The vice president(s) shall perform such
duties and have such other powers as the chief executive officer, the president,
the chief operating officer or the Board may from time to time prescribe, and
may have such further denominations as "Executive Vice President," "Senior Vice
President," "Assistant Vice President," and the like.
(v) Secretary.
(A) The secretary shall attend all meetings of the Board 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 Board
when required.
(B) The secretary shall keep all documents as may be required
under the Delaware Act or this Agreement. 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 Board. The secretary shall have the
general duties, powers and responsibilities of a secretary of a corporation.
(C) If the Board 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 Board may from time to time prescribe.
(vi) Treasurer. The treasurer shall have the custody of the LLC's
funds and securities; shall keep full and accurate accounts of receipts and
disbursements in books belonging to the LLC; shall deposit all monies and other
valuable effects in the name and to the credit of the LLC as may be ordered by
the Chairman, the chief financial officer, or the Board; shall cause the funds
of the LLC to be dispersed when such disbursements have been duly authorized,
taking proper vouchers for such disbursements; and shall render to the Chairman,
the chief financial officer and the Board, at its regular meeting or when the
board so requires, an account of the LLC; shall have such powers and perform
such duties as the Board, the Chairman, the chief financial officer or this
Agreement may, from time to time, prescribe. If required by the Board, the
treasurer shall give the LLC a bond (which shall be rendered every six years) in
such
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sums and with such surety or sureties as shall be satisfactory to the Board for
the faithful performance of the duties of the office of treasurer and for the
restoration to the LLC, in case of death, resignation, retirement, or removal
from office, of all books, papers, vouchers, money, and other property of
whatever kind in the possession or under the control of the treasurer belonging
to the LLC. The assistant treasurer, or if there are more than one, the
assistant treasurers in the order determined by the Board shall, in the absence
or disability of the treasurer, perform the duties and exercise the powers of
the treasurer. The assistant treasurers shall perform such other duties and have
such other powers as the Board, the Chairman, the chief financial officer, the
treasurer or this Agreement may, from time to time, prescribe.
ARTICLE VI
GENERAL RIGHTS AND OBLIGATIONS OF UNITHOLDERS
6.1 LIMITATION OF LIABILITY. Except as otherwise provided by
applicable law, the debts, obligations, and liabilities of the LLC, whether
arising in contract, tort, or otherwise, shall be solely the debts, obligations,
and liabilities of the LLC, and no Unitholder shall be obligated personally for
any such debt, obligation, or liability of the LLC solely by reason of being a
Unitholder of the LLC; provided that a Unitholder shall be required to return to
the LLC any Distribution made to it in clear and manifest accounting or similar
error. The immediately preceding sentence shall constitute a compromise to which
all Unitholders have consented within the meaning of the Delaware Act.
Notwithstanding anything contained herein to the contrary, the failure of the
LLC to observe any formalities or requirements relating to the exercise of its
powers or management of its business and affairs under this Agreement or the
Delaware Act shall not be grounds for imposing personal liability on the
Unitholders for liabilities of the LLC.
6.2 LACK OF AUTHORITY. No Unitholder in his, her, or its capacity as
such (other than the members of the Board acting as the Board or an authorized
Officer of the LLC) has the authority or power to act for or on behalf of the
LLC in any manner, to do any act that would be (or could be construed as)
binding on the LLC or to make any expenditures on behalf of the LLC, and the
Unitholders hereby consent to the exercise by the Board of the powers conferred
on it by law and this Agreement.
6.3 NO RIGHT OF PARTITION. No Unitholder shall have the right to seek
or obtain partition by court decree or operation of law of any LLC property, or
the right to own or use particular or individual assets of the LLC.
6.4 UNITHOLDERS RIGHT TO ACT. For situations which the approval of any
Unitholders or class thereof (rather than the approval of the Board on behalf of
the Unitholders) is required, the Unitholders shall act through meetings and
written consents as described in Section 3.2.
6.5 CONFLICTS OF INTEREST. A Unitholder, its Affiliates and each of
their respective stockholders, directors, officers, controlling persons,
partners and employees (collectively, the "Unitholder Group") may have business
interests and engage in business activities in addition to those relating to the
LLC and its Subsidiaries, except as any such Person may have otherwise agreed
with the LLC in writing. Neither the LLC nor any of the other Unitholder shall
have any rights by virtue of this Agreement in any business ventures of any such
Person except for any
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business interests or activities which any such Person has agreed in writing
with the LLC to not pursue or consummate (whether directly or indirectly), in
which case all of such Person's direct and indirect interest in such business
interests or activities shall become an asset of the LLC and the LLC shall be
entitled to all rights in such business interests or activities and to all
income or profits derived therefrom.
6.6 TRANSACTIONS BETWEEN THE LLC AND THE UNITHOLDERS. Subject to
Section 5.1(c), notwithstanding that it may constitute a conflict of interest,
the Unitholders or their Affiliates may engage in any transaction (including the
purchase, sale, lease or exchange of any property or rendering of any service or
the establishment of any salary, other compensation or other terms of
employment) with the LLC so long as such transaction is approved by the Board
and otherwise complies with the provisions set forth in Section 144 of the
Delaware General Corporation Law (as if the LLC were a corporation).
ARTICLE VII
EXCULPATION AND INDEMNIFICATION
7.1 EXCULPATION. No Officer or Manager shall be liable to any other
Officer, Manager, the LLC or to any Unitholder for any loss suffered by the LLC
unless such loss is caused by such Person's gross negligence, willful
misconduct, violation of law or material breach of this Agreement. The Officers
and Managers shall not be liable for errors in judgment or for any acts or
omissions that do not constitute gross negligence, willful misconduct, violation
of law or material breach of this Agreement. Any Officer or Manager may consult
with counsel and accountants in respect of LLC affairs, and provided such Person
acts in good faith reliance upon the advice or opinion of such counsel or
accountants, such Person shall not be liable for any loss suffered by the LLC in
reliance thereon.
7.2 RIGHT TO INDEMNIFICATION. Subject to the limitations and
conditions as provided in this Article VII, 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, 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 or she, or a Person of whom he or she
is the legal representative, is or was a Unitholder, Manager or Officer, or
while a Unitholder, Manager or Officer is or was serving at the request of the
LLC as a manager, director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another foreign or domestic limited
liability company, corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise shall be indemnified by the LLC
to the fullest extent permitted by Section 145 of the Delaware General
Corporation Law (as if the LLC were a corporation), as the same exist or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the LLC to provide broader indemnification rights
than said law permitted the LLC to provide prior to such amendment) against
judgments, penalties (including excise and similar taxes and punitive damages),
fines, settlements and reasonable expenses (including attorneys' fees) actually
incurred by such Person in connection with such Proceeding, and indemnification
under this Article VII shall continue as to a Person who has ceased to serve in
the capacity which initially entitled such Person to indemnity hereunder and
shall inure to the
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benefit of such Person's heirs, executors and permitted assigns. The rights
granted pursuant to this Article VII shall be deemed contract rights, and no
amendment, modification or repeal of this Article VII shall have the effect of
limiting or denying any such rights with respect to actions taken or Proceedings
arising prior to any amendment, modification or repeal. It is expressly
acknowledged that the indemnification provided in this Article VII could involve
indemnification for negligence or under theories of strict liability.
7.3 ADVANCE PAYMENT. Reasonable expenses incurred by a Person of the
type entitled to be indemnified under Section 7.2 who was, is or is threatened
to be made a named defendant or respondent in a Proceeding shall be paid by the
LLC in advance of the final disposition of the Proceeding unless otherwise
determined by the Board in the specific case upon receipt of an undertaking by
or on behalf of such Person to repay such amount if it shall ultimately be
determined that he or she is not entitled to be indemnified by the LLC.
7.4 INDEMNIFICATION OF EMPLOYEES AND AGENTS. The LLC, by adoption of a
resolution of the Board, may indemnify and advance expenses to an employee or
agent of the LLC to the same extent and subject to the same conditions under
which it may indemnify and advance expenses to Persons who are not or were not
Managers or Officers but who are or were serving at the request of the LLC as a
manager, director, officer, partner, venturer, proprietor, trustee, employee,
agent or similar functionary of another foreign or domestic limited liability
company, corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan or other enterprise against any liability asserted against
him and incurred by him in such a capacity or arising out of his status as such
a Person to the same extent that it may indemnify and advance expenses to
Managers and Officers under this Article VII.
7.5 APPEARANCE AS A WITNESS. Notwithstanding any other provision of
this Article VII, the LLC shall pay or reimburse reasonable out-of-pocket
expenses incurred by a Manager or Officer in connection with his appearance as a
witness or other participation in a Proceeding at a time when he is not a named
defendant or respondent in the Proceeding.
7.6 NONEXCLUSIVITY OF RIGHTS. The right to indemnification and the
advancement and payment of expenses conferred in this Article VII shall not be
exclusive of any other right which a Manager, Officer or other Person
indemnified pursuant to Section 7.2 may have or hereafter acquire under any law
(common or statutory), provision of the Certificate or this Agreement,
agreement, vote of Unitholders or disinterested Managers or otherwise.
7.7 INSURANCE. The LLC may purchase and maintain insurance, at its
expense, to protect itself and any Person who is or was serving as a Manager,
Officer or agent of the LLC or is or was serving at the request of the LLC as a
manager, director, officer, partner, venturer, proprietor, trustee, employee,
agent or similar functionary of another foreign or domestic limited ability
company, corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan or other enterprise against any expense, liability or
loss, whether or not the LLC would have the power to indemnify such Person
against such expense, liability or loss under this Article VII.
7.8 SAVINGS CLAUSE. If this Article VII or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the LLC
shall nevertheless indemnify
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and hold harmless each Manager, Officer or any other Person indemnified pursuant
to this Article VII as to costs, charges and expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement with respect to any
action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Article VII that shall not have been invalidated and to the fullest extent
permitted by applicable law.
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
8.1 RECORDS AND ACCOUNTING. The LLC shall keep, or cause to be kept,
appropriate books and records with respect to the LLC's business, including all
books and records necessary to provide any information, lists, and copies of
documents required to be provided pursuant to Section 8.3 or pursuant to
applicable laws. All matters concerning (i) the determination of the relative
amount of allocations and distributions among the Unitholders pursuant to
Articles III and IV and (ii) accounting procedures and determinations, and other
determinations not specifically and expressly provided for by the terms of this
Agreement, shall be determined by the Board, whose determination shall be final
and conclusive as to all of the Unitholders absent manifest clerical error. Any
Unitholder of record, in person or by attorney or other agent, shall, upon
written demand under oath stating the purpose thereof, have the right during the
usual hours for business to inspect for any proper purpose the LLC's ledger, a
list of its Unitholders, and its other books and records, and to make copies or
extracts therefrom. A proper purpose shall mean any purpose reasonably related
to such Person's interest as a Unitholder. In every instance where an attorney
or other agent shall be the person who seeks the right to inspection, the demand
under oath shall be accompanied by a power of attorney or such other writing
which authorizes the attorney or other agent to so act on behalf of the
Unitholder. The demand under oath shall be directed to the LLC at its registered
office in the State of Delaware or at its principal place of business. The LLC
shall have a reasonable amount of time to respond to any such request.
8.2 FISCAL YEAR. The fiscal year (the "Fiscal Year") of the LLC shall
constitute the 12-month period ending on December 31 of each calendar year, or
such other annual accounting period as may be established by the Board.
8.3 TRANSMISSION OF COMMUNICATIONS. Each Person that owns or controls
Units on behalf of, or for the benefit of, another Person or Persons shall be
responsible for conveying any report, notice, or other communication received
from the Board to such other Person or Persons.
8.4 LLC FUNDS. The Board and Officers may not commingle the LLC's
funds with the funds of any Unitholder or Manager.
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ARTICLE IX
TAXES
9.1 TAX RETURNS. The LLC shall prepare and file all necessary federal and
state income tax returns, including making the elections described in Section
9.2. Each Unitholder shall furnish to the LLC all pertinent information in its
possession relating to LLC operations that is necessary to enable the LLC's
income tax returns to be prepared and filed.
9.2 TAX ELECTIONS. Except as otherwise expressly provided or prohibited
herein, the LLC shall make any election the LLC may deem appropriate and in the
best interests of the Unitholders.
9.3 TAX MATTERS PARTNER. GTCR-CLC (or an Affiliate so designated by GTCR-
CLC) shall be the "tax matters partner" of the LLC pursuant to Section
6231(a)(7) of the Code (the "Tax Matters Partner"). The Tax Matters Partner
shall take such action as may be necessary to cause each other Unitholder to
become a "notice partner" within the meaning of Section 6223 of the Code. The
Tax Matters Partner shall inform each other Unitholder of all significant
matters that may come to its attention in its capacity as Tax Matters Partner by
giving notice thereof on or before the fifth business day after becoming aware
thereof and, within that time, shall forward to each other Unitholder copies of
all significant written communications he may receive in that capacity. The Tax
Matters Partner may not take any action contemplated by Sections 6222 through
6232 of the Code without the consent of the Board, but this sentence does not
authorize the Tax Matters Partner (or any Manager) to take any action left to
the determination of an individual Unitholder under Sections 6222 through 6232
of the Code.
ARTICLE X
TRANSFER OF LLC INTERESTS
10.1 TRANSFERS BY UNITHOLDERS.
(a) No Unitholder shall Transfer any interest in any Units except to
Permitted Transferees and in compliance with this Article X. Except for
Transfers made in compliance with the Securityholders Agreement, the
Contribution Agreements, the Equity Participation Agreements and the
Registration Agreement, no Unitholder shall Transfer, or offer or agree to
Transfer, all or any part of any interest of such Person's Units without the
prior written consent of the Board, which consent may be withheld in the Board's
sole discretion. With the Board's consent, a Unitholder may Transfer all or any
part of such Person's Units, subject to compliance with this Agreement
(including, without limitation, Section 10.1 (b)).
(b) Each transferee of Units or other interest in the LLC shall, as a
condition precedent to such Transfer, execute a counterpart to this Agreement
pursuant to which such transferee shall agree to be bound by the provisions of
this Agreement.
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10.2 EFFECT OF ASSIGNMENT.
(a) Any Unitholder who shall assign any Units or other interest in the LLC
shall cease to be a Unitholder of the LLC with respect to such Units or other
interest and shall no longer have any rights or privileges of a Unitholder with
respect to such Units or other interest.
(b) Any Person who acquires in any manner whatsoever any Units or other
interest in the LLC, irrespective of whether such Person has accepted and
adopted in writing the terms and provisions of this Agreement, shall be deemed
by the acceptance of the benefits of the acquisition thereof to have agreed to
be subject to and bound by all of the terms and conditions of this Agreement
that any predecessor in such Units or other interest in the LLC of such Person
was subject to or by which such predecessor was bound.
10.3 RESTRICTION ON TRANSFER. In order to permit the LLC to qualify for
the benefit of a "safe harbor" under Code Section 7704, notwithstanding anything
to the contrary in this Agreement, no Transfer of any Unit or economic interest
shall be permitted or recognized by the LLC or the Board (within the meaning of
Treasury Regulation Section 1.7704-1(d)) if and to the extent that such Transfer
would cause the LLC to have more than 100 partners (within the meaning of
Treasury Regulation Section 1.7704-1 (h), including the look-through rule in
Treasury Regulation Section 1.7704- 1(h)(3)).
10.4 TRANSFER FEES AND EXPENSES. The transferor and transferee of any
Units or other interest in the LLC shall be jointly and severally obligated to
reimburse the LLC for all reasonable expenses (including attorneys' fees and
expenses) of any Transfer or proposed Transfer, whether or not consummated.
10.5 VOID TRANSFERS. Any Transfer by any Unitholder of any Units or other
interest in the LLC in contravention of this Agreement (including, without
limitation, the failure of the transferee to execute a counterpart in accordance
with Section 10.1(b)) or which would cause the LLC to not be treated as a
partnership for U.S. federal income tax purposes shall be void and ineffectual
and shall not bind or be recognized by the LLC or any other party. No purported
assignee shall have any right to any profits, losses or distributions of the
LLC.
ARTICLE XI
ADMISSION OF UNITHOLDERS
11.1 SUBSTITUTED UNITHOLDERS. In connection with the transfer of an LLC
Interest of a Unitholder permitted under the terms of this Agreement and the
other Transaction Documents, the transferee shall become a Substituted
Unitholder on the effective date of such Transfer, which effective date shall
not be earlier than the date of compliance with or waiver of the conditions to
such Transfer (unless one of the conditions to such Transfer is that Board or
Unitholder consent is required for the admission of such transferee, in which
case such consent must first be obtained), including executing counterparts of,
and become a party to, this Agreement and the other Transaction Documents to
which the transferor Unitholder was a party, and such admission shall be shown
on the books and records of the LLC.
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11.2 ADDITIONAL UNITHOLDERS. A Person may be admitted to the LLC as an
Additional Unitholder only as contemplated under, and in compliance with, the
terms of this Agreement, including furnishing to the Board (a) a letter of
acceptance, in form satisfactory to the Board, of all the terms and conditions
of this Agreement, including the power of attorney granted in Section 15.1, and
(b) such other documents or instruments as may be necessary or appropriate to
effect such Person's admission as a Unitholder (including counterparts or
joinders to all applicable Transaction Documents). Such admission shall become
effective on the date on which the Board determines in its sole discretion that
such conditions have been satisfied and when any such admission is shown on the
books and records of the LLC.
11.3 OPTIONHOLDERS. Except as set forth in this Agreement, no Person that
holds securities (including options, warrants, or rights) exercisable,
exchangeable, or convertible into Units shall have any rights with respect to
such Units until such Person is actually issued Units upon such exercise,
exchange, or conversion and, if such Person is not then a Unitholder, is
admitted as a Unitholder pursuant to Section 11.2.
ARTICLE XII
WITHDRAWAL AND RESIGNATION OF UNITHOLDERS
12.1 WITHDRAWAL AND RESIGNATION OF UNITHOLDERS. No Unitholder shall have
the power or right to withdraw or otherwise resign or be expelled from the LLC
prior to the dissolution and winding up of the LLC pursuant to Article XII,
except as otherwise expressly permitted by this Agreement or any of the other
agreements contemplated hereby. Notwithstanding that payment on account of a
withdrawal may be made after the effective time of such withdrawal, any
completely withdrawing Unitholder will not be considered a Unitholder for any
purpose after the effective time of such complete withdrawal, and, in the case
of a partial withdrawal, such Unitholder's Capital Account (and corresponding
voting and other rights) shall be reduced for all other purposes hereunder upon
the effective time of such partial withdrawal.
12.2 WITHDRAWAL OF A UNITHOLDER. No Unitholder shall have the power or
right to withdraw or otherwise resign from the LLC except, simultaneous with the
Transfer of all of a Unitholder's Units in a Transfer permitted by this
Agreement and, if such Transfer is to a person or entity that is not a
Unitholder, the admission of such person or entity as a Unitholder pursuant to
Section 11.1.
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
13.1 DISSOLUTION. The LLC shall not be dissolved by the admission of
Additional Unitholders or Substituted Unitholders, or by the death, retirement,
expulsion, bankruptcy or dissolution of a Unitholder. The LLC shall dissolve,
and its affairs shall be wound up upon the first to occur of the following:
(a) at any time by the Board; or
39
(b) the entry of a decree of judicial dissolution of the LLC under Section
35-5 of the Delaware Act or an administrative dissolution under Section 18-802
of the Delaware Act.
Except as otherwise set forth in this Article XIII, the LLC is
intended to have perpetual existence. An Event of Withdrawal shall not cause a
dissolution of the LLC and the LLC shall continue in existence subject to the
terms and conditions of this Agreement.
13.2 LIQUIDATION AND TERMINATION. On dissolution of the LLC, the Board
shall act as liquidator or may appoint one or more representatives or
Unitholders as liquidator. The liquidators shall proceed diligently to wind up
the affairs of the LLC, sell all or any portion of the LLC assets for cash or
cash equivalents as they deem appropriate, and make final distributions as
provided herein and in the Delaware Act. The costs of liquidation shall be borne
as an LLC expense. Until final distribution, the liquidators shall continue to
operate the LLC properties with all of the power and authority of the Board. The
liquidators shall pay, satisfy, or discharge from LLC funds all of the debts,
liabilities, and obligations of the LLC (including all expenses incurred in
liquidation) or otherwise make adequate provision for payment and discharge
thereof (including the establishment of a cash fund for contingent liabilities
in such amount and for such term as the liquidators may reasonably determine)
and shall promptly distribute the remaining assets to the holders of Units in
accordance with Section 4.l(a). Any non-cash assets will first be written up or
down to their Fair Market Value, thus creating Profit or Loss (if any), which
shall be allocated in accordance with Sections 4.4 and 4.5. In making such
distributions, the liquidators shall allocate each type of asset (ie., cash,
cash equivalents, securities, etc.) among the Unitholders ratably based upon the
aggregate amounts to be distributed with respect to the Units held by each such
holder. Any such distributions in kind shall be subject to (x) such conditions
relating to the disposition and management of such assets as the liquidators
deem reasonable and equitable and (y) the terms and conditions of any agreement
governing such assets (or the operation thereof or the holders thereof) at such
time.
The distribution of cash and/or property to a Unitholder in accordance with the
provisions of this Section 13.2 constitutes a complete return to the Unitholder
of its Capital Contributions and a complete distribution to the Unitholder of
its interest in the LLC and all the LLC's property and constitutes a compromise
to which all Unitholders have consented within the meaning of the Delaware Act.
To the extent that a Unitholder returns funds to the LLC, it has no claim
against any other Unitholder for those funds.
13.3 CANCELLATION OF CERTIFICATE. On completion of the distribution of LLC
assets as provided herein, the LLC shall be terminated (and the LLC shall not be
terminated prior to such time), and the Board (or such other Person or Persons
as the Delaware Act may require or permit) shall file a certificate of
cancellation with the Secretary of State of Delaware, cancel any other filings
made pursuant to this Agreement that are or should be canceled, and take such
other actions as may be necessary to terminate the LLC. The LLC shall be deemed
to continue in existence for all purposes of this Agreement until it is
terminated pursuant to this Section 13.3.
13.4 REASONABLE TIME FOR WINDING UP. A reasonable time shall be allowed
for the orderly winding up of the business and affairs of the LLC and the
liquidation of its assets pursuant to Section 13.2 in order to minimize any
losses otherwise attendant upon such winding up.
40
13.5 RETURN OF CAPITAL. The liquidators shall not be personally liable for
the return of Capital Contributions or any portion thereof to the Unitholders
(it being understood that any such return shall be made solely from LLC assets).
ARTICLE XIV
VALUATION
14.1 DETERMINATION. Subject to Section 14.2, the Fair Market Value of the
assets of the LLC or of a LLC Interest will be determined by the Board (or, if
pursuant to Section 13.2, the liquidators) in its good faith judgement in such
manner as its deems reasonable and using all factors, information and data
deemed to be pertinent.
14.2 FAIR MARKET VALUE. "Fair Market Value" of (i) a specific LLC asset
will mean the amount which the LLC would receive in an all-cash sale of such
asset (free and clear of all Liens and after payment of all liabilities secured
only by such asset) in an arms-length transaction with an unaffiliated third
party consummated on the day immediately preceding the date on which the event
occurred which necessitated the determination of the Fair Market Value (and
after giving effect to any transfer taxes payable in connection with such sale);
and (ii) the LLC will mean the amount which the LLC would receive in an all-cash
sale of all of its assets and businesses as a going concern (free and clear of
all Liens and after payment of indebtedness for borrowed money) in an
arms-length transaction with an unaffiliated third party consummated on the day
immediately preceding the date on which the event occurred which necessitated
the determination of the Fair Market Value (assuming that all of the proceeds
from such sale were paid directly to the LLC other than an amount of such
proceeds necessary to pay transfer taxes payable in connection with such sale,
which amount will not be received or deemed received by the LLC). After a
determination of the Fair Market Value of the LLC is made as provided above, the
Fair Market Value of a Unit will be determined by making a calculation
reflecting the cash distributions which would be made to the Unitholders in
accordance with this Agreement in respect of such Unit if the LLC were deemed to
have received such Fair Market Value in cash and then distributed the same to
the Unitholders in accordance with the terms of this Agreement incident to the
liquidation of the LLC after payment to all of the LLC's creditors from such
cash receipts other than payments to creditors who hold evidence of indebtedness
for borrowed money, the payment of which is already reflected in the calculation
of the Fair Market Value of the LLC and assuming that all of the convertible
debt and other convertible securities were repaid or converted (whichever yields
more cash to the holders of such convertible securities) and all options to
acquire Units (whether or not currently exercisable) that have an exercise price
below the Fair Market Value of such Units were exercised and the exercise price
therefor paid. Except as otherwise provided herein or in any agreement, document
or instrument contemplated hereby, any amount to be paid under this Agreement by
reference to the Fair Market Value shall be paid in full in cash, and any Unit
being transferred in exchange therefor will be transferred free and clear of all
Liens.
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ARTICLE XV
GENERAL PROVISIONS
15.1 POWER OF ATTORNEY.
(a) Each Unitholder hereby constitutes and appoints each member of the
Board and the liquidators, with full power of substitution, as his true and
lawful agent and attorney-in-fact, with full power and authority in his or its
name, place and stead, to execute, swear to, acknowledge, deliver, file, and
record in the appropriate public offices (i) this Agreement, all certificates,
and other instruments and all amendments (in the manner set forth herein)
thereof in accordance with the terms hereof which the Board deems appropriate or
necessary to form, qualify, or continue the qualification of, the LLC as a
limited liability company in the State of Delaware and in all other
jurisdictions in which the LLC may conduct business or own property; (ii) all
instruments which the Board deems appropriate or necessary to reflect any
amendment, change, modification, or restatement of this Agreement in accordance
with its terms; (iii) all conveyances and other instruments or documents which
the Board deems appropriate or necessary to reflect the dissolution and
liquidation of the LLC pursuant to the terms of this Agreement, including a
certificate of cancellation; and (iv) all instruments relating to the admission,
withdrawal, or substitution of any Unitholder pursuant to Article XI and XII.
(b) The foregoing power of attorney is irrevocable and coupled with an
interest, and shall survive the death, disability, incapacity, dissolution,
bankruptcy, insolvency, or termination of any Unitholder and the Transfer of all
or any portion of his or its LLC Interest and shall extend to such Unitholder's
heirs, successors, assigns, and personal representatives.
15.2 AMENDMENTS. This Agreement may be amended from time to time by a
written instrument by the holders of the Required Interest; provided that, no
amendment or modification pursuant to this Section 15.2 that would adversely
affect any class of Units in a manner different than other Units (as the case
may be) shall be effective against the holders of such class of Units (as the
case may be) without the prior written consent of (i) in the case of Common
Units, Class A Preferred Units and Class C Preferred Units, holders of at least
a majority of Units of such class materially and adversely affected thereby or
(ii) in the case of Class B Preferred Units, holders of at least 70% of such
class; and provided, further, that no amendment or modification pursuant to this
Section 15.2 that would affect the rights of a Unitholder or group of
Unitholders specifically granted such rights by name shall be modified without
that Unitholder's (or a majority of that group of Unitholders') consent.
15.3 TITLE TO LLC ASSETS. LLC assets shall be deemed to be owned by the
LLC as an entity, and no Unitholder, individually or collectively, shall have
any ownership interest in such LLC assets or any portion thereof. Legal title to
any or all LLC assets may be held in the name of the LLC or one or more
nominees, as the Board may determine. The Board hereby declares and warrants
that any LLC assets for which legal title is held in its name or the name of any
nominee shall be held in trust by the Board or such nominee for the use and
benefit of the LLC in accordance with the provisions of this Agreement. All LLC
assets shall be recorded as the property of the LLC on its books and records,
irrespective of the name in which legal title to such LLC assets is held.
42
15.4 REMEDIES. Each Unitholder and the LLC shall have all rights and
remedies set forth in this Agreement and all rights and remedies which such
Person has been granted at any time under any other agreement or contract and
all of the rights which such Person has under any law. Any Person having any
rights under any provision of this Agreement or any other agreements
contemplated hereby shall be entitled to enforce such rights specifically
(without posting a bond or other security), to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights
granted by law.
15.5 SUCCESSORS AND ASSIGNS. All covenants and agreements contained in
this Agreement shall bind and inure to the benefit of the parties hereto and
their respective heirs, executors, administrators, successors, legal
representatives, and permitted assigns, whether so expressed or not.
15.6 SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal, or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality, or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed, and enforced
in such jurisdiction as if such invalid, illegal, or unenforceable provision had
never been contained herein.
15.7 INCORPORATION OF THE LLC. The Board may, in order to facilitate a
public offering of securities of the LLC, or for other reasons that the Board
deems in the best interests of the LLC, cause the LLC to incorporate its
business, or any portion thereof, including (i) the transfer of all of the
assets of the LLC, subject to the LLC's liabilities, or the transfer of any
portion of such assets and liabilities, to one or more corporations in exchange
for shares of such corporation(s) and the subsequent distribution of such
shares, at such time as the Board may determine, to the Unitholders on a pro
rata basis, (ii) conversion of the LLC into a corporation pursuant to 6 Del. C.
Sec.18-216 (or any successor Section thereto) or (iii) by Transfer by each
Unitholder of Units held by such Unitholder to one or more corporations in
exchange for shares of such corporation(s) (including by merger of the LLC into
a corporation) and, in connection therewith, each Unitholder agrees to the
Transfer of its Units in accordance with the terms of exchange as provided by
the Board and further agrees that as of the effective date of such exchange any
Unit outstanding thereafter which shall not have been tendered for exchange
shall represent only the right to receive a certificate representing the number
of shares of such corporation(s) as provided in the terms of such exchange. In
connection with any such reorganization or exchange as provided above, each
Unitholder of a particular class shall receive the same form of securities and
the same amount of securities per Unit of such class and if any holders of a
class of Units are given an option as to the form and amount of securities to be
received, each holder of such class of Units shall be given the same option. The
LLC shall pay any and all organizational, legal and accounting expenses and
filing fees incurred in connection with such incorporation transaction,
including, without limitation, any fees related to a filing under the
Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements Act of 1976, as amended, if
applicable. This Section 15.7 is subject to the terms and conditions of Sections
5 and 6 of the Securityholders Agreement.
43
15.8 OPT-IN TO ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE. The Unitholders
hereby agree that the Units shall be securities governed by Article 8 of the
Uniform Commercial Code of the State of Delaware (and the Uniform Commercial
Code of any other applicable jurisdiction).
15.9 NOTICE TO UNITHOLDER OF PROVISIONS. By executing this Agreement, each
Unitholder acknowledges that it has actual notice of (a) all of the provisions
hereof (including the restrictions on the transfer set forth herein), and (b)
all of the provisions of the Certificate.
15.10 COUNTERPARTS. This Agreement may be executed in multiple
counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same
instrument.
15.11 CONSENT TO JURISDICTION. Each Unitholder irrevocably submits to the
nonexclusive jurisdiction of the United States District Court for the State of
Delaware and the state courts of the State of Delaware for the purposes of any
suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby. Each Unitholder further agrees that service of
any process, summons, notice or document by United States certified or
registered mail to such Unitholder's respective address set forth in the LLC's
books and records or such other address or to the attention of such other person
as the recipient party has specified by prior written notice to the sending
party shall be effective service of process in any action, suit or proceeding in
Delaware with respect to any matters to which it has submitted to jurisdiction
as set forth above in the immediately preceding sentence. Each Unitholder
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in the United States District Court for the State of
Delaware or the state courts of the State of Delaware and hereby irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in such court has been brought in an
inconvenient forum.
15.12 DESCRIPTIVE HEADINGS; INTERPRETATION. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement. Whenever required by the context, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine, or neuter forms, and the singular form of nouns, pronouns, and verbs
shall include the plural and vice versa. The use of the word "including" in this
Agreement shall be by way of example rather than by limitation. Reference to any
agreement, document, or instrument means such agreement, document, or instrument
as amended or otherwise modified from time to time in accordance with the terms
thereof, and if applicable hereof. Without limiting the generality of the
immediately preceding sentence, no amendment or other modification to any
agreement, document, or instrument that requires the consent of any Person
pursuant to the terms of this Agreement or any other agreement will be given
effect hereunder unless such Person has consented in writing to such amendment
or modification. Wherever required by the context, references to a Fiscal Year
shall refer to a portion thereof. The use of the words "or," "either," and "any"
shall not be exclusive. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall
44
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Wherever a conflict exists between this
Agreement and any other agreement, this Agreement shall control but solely to
the extent of such conflict.
15.13 APPLICABLE LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware, without giving effect to
any choice of law or conflict of law rules or provisions (whether of the State
of Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware. Any dispute relating
hereto shall be heard in the state or federal courts of Delaware, and the
parties agree to jurisdiction and venue therein.
15.14 ADDRESSES AND NOTICES. All notices, demands, or other communications
to be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given or made when (a)
delivered personally to the recipient, (b) telecopied to the recipient (with
hard copy sent to the recipient by reputable overnight courier service (charges
prepaid) that same day) if telecopied before 5:OO p.m. Chicago, Illinois time on
a business day, and otherwise on the next business day, or (c) one business day
after being sent to the recipient by reputable overnight courier service
(charges prepaid). Such notices, demands, and other communications shall be sent
to the address for such recipient set forth in the LLC's books and records, or
to such other address or to the attention of such other person as the recipient
party has specified by prior written notice to the sending party. Any notice to
the Board or the LLC shall be deemed given if received by the Board at the
principal office of the LLC designated pursuant to Section 2.7.
15.15 CREDITORS. None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditors of the LLC or any of its Affiliates,
and no creditor who makes a loan to the LLC or any of its Affiliates may have or
acquire (except pursuant to the terms of a separate agreement executed by the
LLC in favor of such creditor) at any time as a result of making the loan any
direct or indirect interest in LLC Profits, Losses, Distributions, capital, or
property other than as a secured creditor.
15.16 WAIVER. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement, or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute a waiver of any such breach or any other covenant, duty, agreement,
or condition. Each Unitholder irrevocably waives any right it may have under
Section 18-305 of the Delaware Act.
15.17 FURTHER ACTION. The parties shall execute and deliver all documents,
provide all information, and take or refrain from taking such actions as may be
necessary or appropriate to achieve the purposes of this Agreement.
15.18 OFFSET. Whenever the LLC is to pay any sum to any Unitholder or any
Affiliate or related person thereof, any amounts that such Unitholder or such
Affiliate or related person owes to the LLC may be deducted from that sum before
payment.
15.19 ENTIRE AGREEMENT. This Agreement, those documents expressly referred
to herein, the other documents of even date herewith, and the other Transaction
Documents embody
45
the complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements, or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
15.20 DELIVERY BY FACSIMILE. This Agreement, the agreements referred to
herein, and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall reexecute original forms thereof and deliver them to all
other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.
15.21 SURVIVAL. Sections 4.7, 6.1, 7.1 and 7.2 shall survive and continue
in full force in accordance with its terms notwithstanding any termination of
this Agreement or the dissolution of the LLC.
* * * * *
46
IN WITNESS WHEREOF, the undersigned have executed or caused to be executed
on their behalf this Limited Liability Company Agreement as of the date first
written above.
COINMACH HOLDINGS, LLC
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------
Name:
Its:
GTCR-CLC, LLC
By: GTCR Fund VII, L.P.
Its: Managing Member
By: GTCR Partners VII,L.P.
Its: General Partner
By: GTCR Xxxxxx Xxxxxx, L.L.C.
Its: General Partner
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Its: Principal
TCW/CRESCENT MEZZANINE PARTNERS II, L.P.
TCW/CRESCENT MEZZANINE TRUST II
By: TCW/Crescent Mezzanine II, L.L.C.,
as investment manager
By: TCW/Crescent Mezzanine, L.L.C.,
its managing owner
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: XXXXXXX X. XXXXXXXX
Title: MANAGING DIRECTOR
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW Advisors (Bermuda), Ltd.,
as general partner
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
By: TCW Investment Management Company,
as Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: XXXXXXX X. XXXXXXXX
Title: MANAGING DIRECTOR
SIGNATURE PAGE TO LLC AGREEMENT (CONT'D)
TCW LEVERAGED INCOME TRUST II, L.P.
By: TCW (XXXX XX), L.P.,
as general partner
By: TCW Advisors (Bermuda), Ltd.,
as general-partner
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
By: TCW Investment Management Company,
as Investment Advisor I
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: XXXXXXX X. XXXXXXXX
Title: MANAGING DIRECTOR
TCW LEVERAGED INCOME TRUST IV, L.P.
By: TCW Asset Management Company, as Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: XXXXXXX X. XXXXXXXX
Title: MANAGING DIRECTOR
By: TCW Asset Management Company, as managing member
of TCW (XXXX XX), L.L.C., the general partner
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
SIGNATURE PAGE TO LLC AGREEMENT (CONT'D)
FILBERT INVESTMENT PTE LTD
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Its: Director
XXXXXXXXX & COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Its: Vice Chairman
SIGNATURE PAGE TO LLC AGREEMENT (CONT'D)
/s/ Xxxxxxxx Xxxxx
-----------------------------------
Xxxxxxxx Xxxxx
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxx
-----------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxx
SIGNATURE PAGE TO LLC AGREEMENT (CONT'D)
