THIRD AMENDED AND RESTATED LIMITED
LIABILITY COMPANY AGREEMENT
THIRD AMENDED AND RESTATED LIMITED LIABILITY COMPANY
AGREEMENT of NEW RIO, L.L.C., a Delaware limited liability
company, dated as of May 9, 1996, by and among Xxxxxx X. Xxxxx,
CHARTERHOUSE EQUITY PARTNERS II, L.P., a Delaware limited
partnership, CHEF NOMINEES LIMITED, a United Kingdom entity, A.S.
ENTERPRISES, L.L.C., a New Jersey limited liability company,
Xxxxxx X. Xxxxxx, Xxxxxxx Xxxx Xxxxxx, Xxxxxx X. Xxxxxx, Xxxx X.
Xxxxxx as Trustee f/b/o Xxxx X. Xxxxxx and Xxxxxx X. Xxxxxx, and
Xxxxxxx X. Xxxxxx as members of the Company.
W I T N E S S E T H:
WHEREAS, all acts and proceedings required by law, by
the Second Amended LLC Agreement and the certificate of formation
of the Company (the "Certificate") to constitute this Agreement a
valid and binding agreement for the uses and purposes set forth
herein, in accordance with its terms, have been done and taken,
and the execution and delivery of this Agreement has in all
respects been duly authorized by the Members;
WHEREAS, the Members desire to revise the Company's
objectives and purposes as described in Section 2.5 hereof from
those set forth in the Second Amended LLC Agreement;
WHEREAS, the Members' ownership interests in the
Company originally consisted of preferred and common membership
interests;
WHEREAS, the Members desire to retire all of the
preferred membership interests set forth in the Second Amended
LLC Agreement; and
WHEREAS, the Members desire to continue the Company and
to amend and restate the LLC Agreement in its entirety for a
third time.
NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration, the receipt of which
is hereby acknowledged, the Members, intending legally to be
bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. (a) Unless otherwise
defined herein, the following capitalized terms shall have the
following respective meanings (such meanings being equally
applicable to both singular and plural form of the terms
defined).
"Act" shall mean the Delaware Limited Liability Company
Act, as amended from time to time.
"Affiliate" shall mean, with respect to any Person, any
Person that Controls, is controlled by or is under common control
with such Person in question.
"Agreement" shall mean this Third Amended and Restated
Limited Liability Company Agreement, as originally executed and
as amended, modified, supplemented or restated from time to time
in accordance with the terms of this Agreement. Words such as
"herein," "hereinafter," "hereof," "hereto," "hereby" and
"hereunder," when used with reference to this Agreement, refer to
this Agreement as a whole, unless the context otherwise requires.
"Allocated Shares" shall mean, in respect of each
Member, the number of Shares initially allocated to such Member,
as set forth on Schedule B to this Agreement, minus the number of
Shares sold in the initial public offering of such shares, minus
the number of such Shares that have been the subject of a
Transfer (which does not include pledges) and plus the number of
additional shares received by the Company in respect of such
Shares or purchased by the Company (which shall be allocated (i)
in respect of the Allocated Shares in respect of which they were
received or (ii) to the benefit of the Member on behalf of which
they were purchased, as the case may be) as permitted by this
Agreement. The number of Shares sold or to be sold in the
initial public offering of such Shares on behalf of each Member
is set forth on Schedule C to this Agreement.
"Amended LLC Agreement" shall mean the Amended and
Restated Limited Liability Company Agreement of New Rio, L.L.C.,
dated as of November 13, 1995, by and among the Members.
"ASE" shall mean A.S. Enterprises, L.L.C., a New Jersey
limited liability company.
"Bankruptcy" of a Member shall mean, and a Member shall
be deemed a "Bankrupt Member" upon, (a) the Member's making an
assignment for the benefit of its creditors; (b) the filing by a
Member of a voluntary petition under any Debtor Relief Laws; (c)
the Member's being adjudged as bankrupt or insolvent, or having
entered against it an order for relief, in any bankruptcy or
insolvency proceeding; (d) the Member's filing a petition or
answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar
relief under any Debtor Relief Law; (e) the Member's answer or
other pleading admitting or failing to contest the material
allegations of a petition filed against it in any proceeding
under any Debtor Relief Law; (f) the Member's seeking, consenting
to or acquiescing in the appointment of a trustee, receiver or
liquidator of the Member or of all or any substantial part of its
properties; or (g) the passage of 120 days after the commencement
of any proceeding against the Member seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any statute, law or regulation if the
proceeding has not been dismissed, or if within 90 days after the
appointment without its consent or acquiescence of a trustee,
receiver or liquidator of the Member or of all or any substantial
part of its properties, the appointment is not vacated or stayed,
or within 90 days after the expiration of any such stay, the
appointment is not vacated.
"Bermans" shall mean, collectively, Xxxxxx X. Xxxxxx,
Xxxxxxx Xxxx Xxxxxx, Xxxxxx X. Xxxxxx, and Xxxx X. Xxxxxx as
Trustee f/b/o Xxxx X. Xxxxxx and Xxxxxx X. Xxxxxx.
"Business Day" shall mean any day on which commercial
banks are not authorized or required to close in New York City.
"Capital Account" shall have the meaning set forth in
Section 3.5 hereof.
"Capital Contributions" shall mean all contributions to
the capital of the Company made by Members pursuant to Section
3.4 hereof.
"CEP" shall mean Charterhouse Equity Partners II, L.P.,
a Delaware limited partnership.
"Certificate" shall have the meaning given to it in the
recitals to this Agreement.
"Chef" shall mean Chef Nominees Limited, a United
Kingdom entity.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time. All references herein to sections of
the Code shall include any corresponding provision or provisions
of succeeding law.
"Company" shall mean New Rio, L.L.C., a Delaware
limited liability company.
"Controls" including, with correlative meanings, the
terms "controlled by" and "under common control with," means, as
to any Person, the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of such Person whether through the ownership of voting
securities or by contract or otherwise.
"Covered Person" shall have the meaning set forth in
Section 10.1 hereof.
"Xxxxxx" shall mean Xxxxxxx X. Xxxxxx.
"Debtor Relief Laws" shall mean the United States
Bankruptcy Code or other similar law.
"Demand Registration Right" shall have the meaning set
forth in Section 11.3(a) hereof.
"Demand Request" shall have the meaning set forth in
Section 11.3(a) hereof.
"Demanding Member" shall have the meaning set forth in
Section 11.3(a) hereof.
"Effective Time" shall have the meaning set forth in
Section 2.1 hereof.
"Fair Market Value" of a Share, as of any date of
determination, shall mean (i) the closing sales price per Share,
on the national securities exchange on which such stock is
principally traded, on the next preceding date on which there was
a sale of such stock on such exchange, or (ii) if the Shares are
not listed or admitted to trading on any such exchange, the
closing price as reported by the Nasdaq Stock Market for the last
preceding date on which there was a sale of such stock on such
exchange, or (iii) if the Shares are not then listed on a
national securities exchange or on the Nasdaq Stock Market, the
average of the highest reported bid and lowest reported asked
prices for the Shares as reported by the National Association of
Securities Dealers, Inc. Automated Quotations ("NASDAQ") system
for the last preceding date on which such bid and asked prices
were reported, or (iv) if the Shares are not then listed on any
securities exchange or prices therefor are not then quoted in the
NASDAQ system, such value as determined in good faith by a
nationally recognized investment banking firm selected by the
Demanding Member.
"Family Group" shall have the meaning set forth in
Section 7.2 hereof.
"Fiscal Year" shall have the meaning set forth in
Section 2.7 hereof.
"Interest" shall mean the entire interest of a Member
in the Company at any particular time, including the right of
such Member to any and all benefits to which a Member may be
entitled as provided in this Agreement, together with the
obligations of such Member to comply with all the terms and
provisions of this Agreement.
"Issuer" shall mean Designer Holdings, Ltd., a Delaware
corporation, or the issuer of any shares or other securities for
which the Shares have been exchanged or into which the Shares
have been converted.
"Lender" shall have the meaning set forth in Section
11.7 hereof.
"Losses" shall mean any and all liabilities, losses,
claims (including allegations), other proceedings, damages,
demands, deficiencies, assessments, judgments, fines, penalties,
costs, expenses (including reasonable legal fees and expenses,
including reasonable legal fees and expenses incurred in the
enforcement of the indemnification obligations under this
Agreement) and liabilities and any interest thereon from the date
incurred at the prime rate announced from time to time by
Citibank, N.A. or any successor thereto.
"LLC Agreement" shall mean the Limited Liability
Company Agreement of New Rio, L.L.C., dated as of August 4, 1994,
by and among the Members named therein.
"Member Managers" shall have the meaning set forth in
Section 4.1(a) hereof.
"Members" shall mean Simon, CEP, Chef, ASE, MLB, PWB,
SEB, Trustee and Xxxxxx, collectively.
"MLB" shall mean Xxxxxx X. Xxxxxx.
"1933 Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"1934 Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
thereunder.
"Non-Demanding Members" shall have the meaning set
forth in Section 11.3(a) hereof.
"Percentage Interest" of a Member shall mean the
percentage set forth opposite the name of the Member under the
column "Percentage Interest" in Schedule A attached hereto, as
such percentage may be adjusted from time to time pursuant to the
terms hereof. The aggregate Percentage Interests shall at all
times equal 100%.
"Permitted Transferee" shall have the meaning set forth
in Section 7.2 hereof.
"Person" means an individual or a corporation, limited
liability company, partnership, trust, incorporated or
unincorporated association, joint venture, joint stock company,
governmental authority or other entity of any kind.
"Pledged Shares" shall have the meaning set forth in
Section 11.7(a) hereof.
"Principal Members" shall mean CEP and Simon.
"Proceeds" shall have the meaning set forth in Section
5.1(a) hereof.
"PWB" shall mean Xxxxxxx Xxxx Xxxxxx.
"Registration Rights Agreement" shall mean the
Registration Rights Agreement, dated as of May 9, 1996, by and
among the Issuer, the Company and Xxxxxx Xxxxx, Inc.
"Regulations" shall mean the regulations promulgated by
the United States Department of the Treasury pursuant to and in
respect of provisions of the Code. All references herein to
sections of the Regulations shall include any corresponding
provision or provisions of succeeding, similar, substitute,
proposed or final Regulations.
"Rights Contribution" shall have the meaning set forth
in Section 4.2(a) hereof.
"Rule 144" shall mean Rule 144 of the 1933 Act.
"Rule 144 Request" shall have the meaning set forth in
Section 11.4 hereof.
"SEB" shall mean Xxxxxx X. Xxxxxx.
"SEC" shall mean the Securities and Exchange Commission
(or any successor agency thereto).
"Second Amended LLC Agreement" shall mean the Second
Amended and Restated Limited Liability Company Agreement of New
Rio, L.L.C., dated as of December 11, 1995, by and among the
Members.
"Second Principal Member" shall have the meaning set
forth in Section 11.3(b) hereof.
"Section 704(c) Property" shall have the meaning set
forth in Section 5.3(d) hereof.
"Service" shall mean the Internal Revenue Service (or
any successor agency thereto).
"Shares" shall mean the shares of Common Stock, par
value $.01 per shares, of Designer Holdings Ltd. owned by the
Company and shall include the shares or other securities of
Designer Holdings Ltd. that are distributed in respect of such
Common Stock and the shares or other securities of any other
Issuer for which such shares of Common Stock have been exchanged
or into which such shares of Common Stock have been converted.
"Simon" shall mean Xxxxxx X. Xxxxx.
"TMP" shall have the meaning set forth in Section
12.4(b) hereof.
"Transfer" shall have the meaning set forth in Section
11.1(a) hereof.
"Trustee" shall mean Xxxx X. Xxxxxx as Trustee f/b/o
Xxxx X. Xxxxxx and Xxxxxx X. Xxxxxx.
"Voting Members" shall have the meaning set forth in
Section 3.2(f) hereof.
ARTICLE II
GENERAL PROVISIONS
SECTION 2.1. Effectiveness of the Agreement.
Notwithstanding anything to the contrary contained herein, this
Agreement shall become effective upon the later of (i) the
consummation of the initial registered public offering of the
common stock of Designer Holdings Ltd. and (ii) the execution by
parties owning at least 80% of the Percentage Interests
("Effective Time"). The Second Amended LLC Agreement shall
continue in full force and effect and shall govern the operation
of the Company at all times prior to such Effective Time.
SECTION 2.2. Continuation. The Members hereby agree
to continue the Company as a limited liability company pursuant
to the Act, upon the terms and subject to the conditions set
forth in this Agreement. The authorized officer or
representative shall file and record any amendments and/or
restatements to the Certificate and such other documents as may
be required or appropriate under the laws of the State of
Delaware and of any other jurisdiction in which the Company may
conduct business. The authorized officer or representative
shall, on request, provide any Member with copies of each such
document as filed and recorded.
SECTION 2.3. Company Name. The name of the Company
shall continue to be "New Rio, L.L.C."
SECTION 2.4. Registered Office; Registered Agent. The
registered office and registered agent of the Company shall be
the Corporation Services, Co., 0000 Xxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, New Castle.
SECTION 2.5. Nature of Business Permitted; Powers.
The Company has been formed for the object and purpose of, and
the nature of the business to be conducted and promoted by the
Company is, owning the Shares, taking any and all lawful actions
with respect to the Shares and exercising any and all rights of a
holder of such Shares including, without limitation exercising
its rights under the Registration Rights Agreement, in each
instance, subject to any other provisions contained herein,
pursuant to the direction of the Members with respect to such
Members' respective Allocated Shares, and taking any other
actions, or exercising any other rights, that may be necessary or
desirable with respect to the foregoing and the maintenance and
operation of a limited liability company formed under the Act.
The Company shall possess and may exercise all the powers and
privileges granted by the Act or by any other law or by this
Agreement, together with any powers incidental thereto, so far as
such powers and privileges are necessary or convenient to the
conduct, promotion or attainment of the business purposes or
activities of the Company.
SECTION 2.6. Business Transactions of a Member with
the Company. In accordance with section 18-107 of the Act, and
except as otherwise provided in this Agreement, a Member may (but
shall be under no obligation to) lend money to, borrow money
from, act as surety, guarantor or endorser for, guarantee or
assume one or more specific obligations of, provide collateral
for, and transact other business with, the Company and, subject
to applicable law, shall have the same rights and obligations
with respect to any such matter as a person who is not a Member.
SECTION 2.7. Fiscal Year. The fiscal year of the
Company (the "Fiscal Year") for financial statement and Federal
income tax purposes shall be the same and shall, except as
otherwise required in accordance with the Code, end on December
31 of each year.
SECTION 2.8. Term. The Company commenced on the date
the Certificate was accepted for filing by the Secretary of State
of the State of Delaware and shall have a term expiring on June
30, 2000, unless dissolution occurs at an earlier time pursuant
to the express provisions of Article VIII below.
SECTION 2.9. No State-Law Partnership. The Members
intend that the Company not be a partnership (including, without
limitation, a limited partnership) or joint venture and that no
Member be an agent, partner or joint venturer of any other Member
for any purposes other than Federal and state tax purposes, and
this Agreement shall not be construed to suggest otherwise.
SECTION 2.10. Election to be Treated as Partnership.
If, subsequent to the formation of the Company, Regulations or
other administrative rules are promulgated that would allow the
Company to make an election to be treated as either a partnership
or an association taxable as a corporation for Federal income tax
purposes, the Company shall promptly make an election to be
treated as a partnership for Federal income tax purposes. In
addition, if a retroactive election to be treated as a
partnership for Federal income tax purposes is permitted by such
Regulations or other administrative rules, then the Company shall
make such retroactive election effective as of the date of
formation of the Company. By executing this Agreement, each of
the Members hereby consents to any election (including both
retroactive and prospective elections) made by the Company for it
to be treated as a partnership for Federal income tax purposes.
ARTICLE III
MEMBERS
SECTION 3.1. Admission of Members. Without the need
for any action of any Person, the Members shall continue as
members of the Company.
SECTION 3.2. Classes and Voting. (a) The Interests as
of the date hereof are held as set forth in Schedule A attached
hereto.
(b) Members shall not be liable for the debts,
obligations or liabilities of the Company, including any such
debts, obligations or liabilities arising under a judgment decree
or order of a court.
(c) Except as otherwise contemplated by Section 8.2
hereof, CEP and ASE (together the "Voting Members") shall each be
entitled to one vote upon all matters upon which Members have the
right to vote, regardless of the respective Interests, held by
the Members. None of Simon, Chef, Xxxxxx or the Bermans shall be
entitled to any vote. Whenever Percentage Interests may be voted
by any Members including, without limitation, pursuant to Section
12.1 hereof, solely for the purposes of determining the
Percentage Interests voting in the event of the death of Simon,
ASE shall be deemed to have the right in all respects to vote all
of the Percentage Interests which the Permitted Transferees of
Simon then own (and accordingly, solely for the purposes of
determining such voting, such Permitted Transferees shall be the
equivalent of Members).
SECTION 3.3. Certificates. Interests in the Company
may be evidenced by a certificate of limited liability company
interest issued by the Company. Such Certificates shall bear the
following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED OR ASSIGNED TO ANY PERSON EXCEPT IN ACCORDANCE WITH
ARTICLE VII OF THE THIRD AMENDED AND RESTATED LIMITED LIABILITY
COMPANY AGREEMENT OF NEW RIO, L.L.C. DATED AS OF May 9, 1996."
SECTION 3.4. Capital Contribution.
(a) Members shall not be required to make any Capital
Contributions to the Company except as expressly provided in this
Section 3.4, cure any deficit Capital Account or return all or
any portion of any Capital Contributions except as otherwise
provided pursuant to applicable law. Upon the unanimous approval
of the Member Managers, a Member may be required to make a Rights
Contribution pursuant to Section 4.2(a) hereof to the extent that
such Member desires to exercise rights under such Section 4.2(a).
(b) If at any time or times the Member Managers
unanimously determine that additional Capital Contributions (by
way of the contribution of cash, property or services to the
Company) are necessary to further the Company's business
purposes, it may request such additional Capital Contributions
from current Members and/or other Persons and in exchange for
such Capital Contributions may admit new Members and/or issue to
contributing Members and/or other Persons such interests in the
Company (including the Interests or interests that are preferred
as to any return of capital or interests that carry a preferred
rate of return on their capital) as the Member Managers
unanimously deem appropriate; and upon such admission or
issuance, this Agreement and all Percentage Interests shall be
amended accordingly (with the Percentage Interests of all Members
not making additional Capital Contributions being diluted
proportionately) and such amendment shall be effective without
any further vote of the Members. Such interests may have any
rights, powers, preferences and duties as determined unanimously
by the Member Managers and allowed under the Act, including
rights, powers, preferences and duties senior to existing
Interests.
(c) No holder of Interests shall be entitled as a
matter of right to subscribe for or purchase, or have any
preemptive right with respect to, any part of any new or
additional issue of any interests of any series whatsoever, or of
interests convertible into any interests of any series
whatsoever, whether now or hereafter authorized and whether
issued for cash or other consideration or by way of dividend, or
any part of any new or additional issue of Interests.
(d) No Member shall receive any interest on its
Capital Contributions to the Company or its Capital Account.
(e) Except as otherwise provided in this Agreement, no
Member shall have the right to withdraw any Capital Contributions
or to demand and receive property of the Company. Except as may
be specifically provided in this Agreement, no Member shall have
the right to any distribution in return for its Capital
Contribution. No Member shall receive out of Company property
any part of its Capital Contribution except as otherwise provided
in this Agreement until all liabilities of the Company, except
liabilities to Members on account of their Capital Contributions,
have been paid or there remains property of the Company
sufficient to pay them.
(f) If at any time or times a Member who is not a
Member Manager makes a capital contribution to the Company, the
Member Managers, in the aggregate, shall make capital
contributions to the Company equal to the lesser of (i) 1.01% of
the capital contributions of the other Members of the Company or
(ii) that amount (including zero) that causes the sum of the
capital accounts of the Member Managers to equal the lesser of
(A) 1% of the total positive capital account balances of all
Members or (B) $500,000.
(g) The Members shall make annual Capital
Contributions in the aggregate amount of up to $50,000 each year
upon written request by the Company to cover the Company's
administrative and operating expenses. Each Member shall
contribute a pro rata portion of such amount based upon such
Member's Percentage Interest as of the date of the notice from
the Company. Notwithstanding anything to the contrary in this
Agreement, no portion of the Capital Contribution provided
pursuant to this Section 3.4(g) shall be used to pay or provide
for any indemnification provided under this Agreement.
(h) If the Capital Account of any Member other than a
Member Manager is reduced to zero and such Member does not have
any Allocated Shares attributed to it, then such Member may
request in writing to withdraw as a member of the Company (or may
be requested in writing by the Member Managers to so resign)
unless any Member Manager reasonably believes that such
resignation may have an adverse effect on any of the continuing
Members or on the Company, provided that a Member Manager shall
not request or be requested to withdraw pursuant to this Section
3.4(h).
SECTION 3.5. Capital Accounts. A separate "Capital
Account" (herein so called) shall be maintained for each Member
for the full term of this Agreement in accordance with the
capital accounting rules of section 1.704-1(b)(2)(iv) of the
Regulations. Each Member shall have only one Capital Account,
regardless of the number of Interests in the Company owned by
such Member and regardless of the time or manner in which such
Interests were acquired by such Member. Pursuant to the rules of
section 1.704-1(b)(2)(iv) of the Regulations, the balance in each
Member's Capital Account shall be:
(a) increased by the amount of money contributed by
such Member (or such Member's predecessor in interest) to the
capital of the Company and decreased by the amount of money
distributed to such Member (or such Member's predecessor in
interest);
(b) increased by the fair market value of each item of
property (determined without regard to section 7701(g) of the
Code) contributed by such Member (or such Member's predecessor in
interest) to the capital of the Company (net of all liabilities
secured by such property that the Company is considered to assume
or take subject to, under section 752 of the Code) and decreased
by the fair market value of each item of property (determined
without regard to section 7701(g) of the Code) distributed to
such Member (or such Member's predecessor in interest) by the
Company pursuant to Article V hereof (net of all liabilities
secured by such property that such Member is considered to assume
or take subject to, under section 752 of the Code);
(c) increased by the amount of each item of Company
profit or income allocated to such Member (or such Member's
predecessor in interest) pursuant to Article V hereof and by
allocations to such Members of income described in section
705(a)(1)(B) of the Code;
(d) decreased by the amount of each item of Company
loss or expense allocated to such Member (or such Member's
predecessor in interest) pursuant to Article V hereof and by
allocations to such Member of expenditures described in section
705(a)(2)(B) of the Code; and
(e) otherwise adjusted in accordance with the
requirements of section 704(b) of the Code and the Regulations
promulgated thereunder.
SECTION 3.6. Liability of Members. Except as
otherwise expressly required by law, all debts, obligations and
liabilities of the Company, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities
of the Company, and no Member shall be obligated personally for
any such debt, obligation or liability of the Company solely by
reason of being a Member.
SECTION 3.7. Access to and Confidentiality of
Information; Records. (a) Each Member shall have the right to
obtain from the Company from time to time upon reasonable demand
for any purpose reasonably related to the Member's interest as a
Member of the Company the documents and other information
described in section 18- 305(a) of the Act.
(b) Any demand by a Member pursuant to this Section
3.7 shall be in writing and shall state the purpose of such
demand.
SECTION 3.8. Meetings of Members. (a) Meetings of the
Members may be called at any time in writing by the request of
any Member Manager or in writing by the request of Members owning
at least 40% of the Interests issued and outstanding and entitled
to vote. Such request shall state the purpose or purposes of the
proposed meeting. The provisions of this Section 3.8 shall apply
to meetings of Members.
(b) Except as otherwise provided by law, both Voting
Members shall constitute a quorum at all meetings of the Members.
(c) Unless otherwise required by law or by this
Agreement, all questions shall be decided by both Voting Members
acting unanimously. To the extent that, for any reason, the
Members other than Voting Members have the right to vote on any
matters, any actions to be taken by the Company must be approved
by seventy-five percent (75%) of the Percentage Interests of the
Members.
(d) Any action required to or which may be taken at a
meeting of Members may be taken without a meeting, without prior
notice and without a vote, if a consent or consents in writing,
setting forth the action so taken, is signed by all the Voting
Members.
SECTION 3.9. Representations and Warranties. Each
Member hereby represents and warrants to the Company and each
other Member that (a) in the case of Members that are not natural
persons, it is duly organized, validly existing and in good
standing under the law of the jurisdiction of its organization,
that the Member has full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder,
and all necessary actions for the due authorization, execution,
delivery and performance of this Agreement by that Member have
been duly taken; (b) the Member has duly executed and delivered
this Agreement; (c) the Member's authorization, execution,
delivery and performance of this Agreement do not conflict with
any other agreement or arrangement to which that Member is a
party or by which it is bound; (d) the Member understands that no
Federal or state agency has made any finding or determination
with respect to the fairness of the Interests for public or
private investment, nor any recommendation or endorsement of the
Interests for investment; (e) the Interests, as an investment,
involve a high degree of risk; (f) there is no market for the
Interests and it may not be possible readily to liquidate such
investment in the Interests at any time; (g) the Interests have
been or are being purchased or transferred for the Member's own
account entirely, for investment and not with a view to or for
resale in connection with any distribution thereof; (h) the
Interests may not be sold without registration under the 1933 Act
or an exemption therefrom and are subject to the restrictions on
transfer contained in this Agreement; (i) the Member is able to
bear the economic risk of its investment in the Company and is
able to hold the Interests for an indefinite period of time; and
(j) the Member understands the merits and risks of its investment
in the Company and the Interests.
ARTICLE IV
GOVERNANCE
SECTION 4.1. Member Managers. The business and
affairs of the Company shall be managed by ASE and CEP (the
"Member Managers"), which acting together shall exercise all the
powers of the Company; provided that (x) if at any time the
Allocated Shares of ASE, Simon and their Permitted Transferees or
the Allocated Shares of CEP and its Permitted Transferees, as the
case may be, aggregate less than 25% of the number of Allocated
Shares held by the Company at that time and (ii) the Fair Market
Value of the Allocated Shares of ASE, Simon and their Permitted
Transferees or the Allocated Shares of CEP and its Permitted
Transferees, as the case may be, is less than $40,000,000 for a
period of 60 consecutive trading days, then ASE or CEP, as the
case may be, but not both of them, shall cease to be a Member
Manager for all purposes under this Agreement; provided, further,
that, upon written notice to the Company and CEP, ASE may
designate Simon as a Member Manager in its place and stead.
Except as otherwise expressly provided in this Agreement, none of
the Member Managers shall take any actions with respect to the
property of the Company without the unanimous consent or
agreement of all Member Managers. No Member Manager may be
removed in his capacity as a Member Manager, except as expressly
provided above in the first or second proviso of this Section
4.1. Only the Member Managers can bind the Company except to the
extent expressly provided for in this Agreement. Each Member
Manager agrees not to resign, withdraw or otherwise retire as a
Member Manager (or Member) (except to the extent the required
consent under Section 8.2 hereof is obtained), dissolve or become
the subject of a Bankruptcy.
SECTION 4.2. Certain Actions. (a) Except as
provided by this Section 4.2(a), the Company shall not pay any
kind of consideration to acquire additional Shares. If the
Company, in its capacity as the legal owner of the Shares,
obtains any right to acquire upon payment any additional Shares,
upon the unanimous approval of all the Member Managers and
subject to their first obtaining advice from tax counsel as to
the tax effect of such Distribution, it shall attempt to
distribute such right to the Members in respect of their
Allocated Shares. If the Company is not able for any reason to
distribute such rights, it shall use its reasonable best efforts
to give prompt notice of such right to all the Members and to
take the actions, if any, directed by each Member in respect of
the Allocated Shares of such Member, provided that the Company
shall require a Member that desires to exercise such rights to
make a contribution to the Company in the amount of any payment
required to be made by the Company (the "Rights Contribution"),
and any such contribution shall be made in advance of such
payment by the Company. Notwithstanding the foregoing to the
contrary, the Company shall not take the action referred to in
the prior sentence if any Member Manager reasonably believes that
any such action would be unlawful, or could have an adverse
effect upon any Member or the Company. Nothing in this Section
4.2(a) shall prevent the Company from receiving additional shares
or other property distributed by the Issuer in respect of its
common stock, in connection with a stock dividend, stock split or
otherwise.
(b) The Company shall vote the Shares and/or exercise
any consents as determined unanimously by the Member Managers;
provided that if the Member Managers are unable to agree, the
Company shall vote its Shares as determined by the Member
Managers in proportion to the number of Allocated Shares
attributed, respectively, to CEP, Chef and their Permitted
Transferees and to ASE, Simon, each of the Bermans and Xxxxxx and
their respective Permitted Transferees.
(c) Upon instruction received from any Member, the
Company shall exercise on behalf of such Member any rights of a
stockholder with respect to the Allocated Shares of such Member,
other than voting (which is dealt with in Section 4.2(b) or
transfer (which is dealt with in Articles VII and XI).
Notwithstanding anything in the foregoing to the contrary, the
Company shall not take the action permitted to be taken pursuant
to the prior sentence if any Member Manager reasonably believes
that any such action would be unlawful, or could have an adverse
effect upon any Member or the Company.
ARTICLE V
DISTRIBUTIONS; ALLOCATIONS; AND INTERESTS
SECTION 5.1. Distributions.
(a) Distributions With Respect to Allocated Shares.
Except as provided in Section 11.7 hereof with respect to Pledged
Shares (i) with respect to any Transfer of Shares by the Company
pursuant to Article XI hereof, the Company shall distribute the
proceeds it receives from such Transfer and any reimbursements it
receives in connection with such Transfer (including, without
limitation, pursuant to the Registration Rights Agreement) less
any and all unreimbursed costs, fees and expenses incurred and
paid for by the Company in connection with such Transfer (the
"Proceeds") to the Members whose Allocated Shares were included
in such Transfer, pro rata on the basis of the number of
Allocated Shares actually included in such Transfer, (ii) with
respect to the sale of Shares by the Company in connection with
the initial public offering of such Shares, the net proceeds of
such sale shall be distributed to the Members pro rata on the
basis of the Shares actually sold, as reflected on Schedule C
hereto and (iii) with respect to cash and any other property
received by the Company as a distribution in respect of the
Allocated Shares, the Company shall distribute such cash or other
property pro rata to the Members to which such Allocated Shares
were attributed as of the date upon which the Company received
such distribution, provided that distributions of property (other
than cash) shall not be made pursuant to this clause (iii) if
such distribution might cause an adverse tax effect for either
Principal Member. Except as provided in Section 4.2(a), all
distributions to be made pursuant to this Section 5.1(a) shall be
made by the Company within one Business Day of its receipt of the
proceeds.
(b) Other Property. Distributions of property other
than those described in Section 5.1(a) shall be made if, as and
when determined unanimously by the Member Managers in their sole
and absolute discretion. Each distribution of such property
shall be distributed to the Members in proportion to the ratio
that their respective Percentage Interests that were theretofore
from time to time outstanding bear to one another.
(c) Notwithstanding the foregoing, if any additional
Capital Contribution has been made pursuant to Section 3.4 hereof
or if any new Interests have been issued by the Company in
accordance therewith, appropriate amendment shall be deemed to be
made to the order of distributions set forth in Section 5.1(b)
hereof to reflect the terms of the new Interest or Capital
Contribution (including, by way of example, any applicable
priority return and/or a preferred return on such capital), and,
notwithstanding Section 12.1 hereof, such amendment shall be
automatic, without the need for Member approval.
(d) The parties hereto acknowledge and agree that
notwithstanding that the provisions of this Article V and Article
VIII hereof only make reference to Members, the distributions and
allocations provided for in this Article V and Article VIII
hereof shall also apply to Permitted Transferees.
SECTION 5.2. Allocation of Profit and Loss. The
profits and losses of the Company shall be determined for each
fiscal year in accordance with the accounting method used by the
Company for Federal income tax purposes and shall be allocated to
the Members as follows:
(a) Net losses shall be allocated to the Members as
follows:
(i) First: To each Member to the extent of any
loss attributable to the Transfer of the Allocated Shares of such
Member;
(ii) Second: To all Members with positive
Capital Accounts to the extent necessary to reduce their Capital
Account balances to zero, proportionately based on those Members'
respective Percentage Interests; and
(iii) Third: The balance of any net losses to
all Members in accordance with their Percentage Interests.
(b) Net profits shall be allocated to the Members as
follows:
(i) First: To the Members to the extent of any
net losses previously allocated to such Members that have not
been offset by allocations of profits pursuant to this Section
5.2(b)(i), proportionately based on such previous allocations of
net losses;
(ii) Second: To each Member to the extent of
any profit attributable to the Transfer of or to distributions
with respect to the Allocated Shares of such Member; and
(iii) Third: The balance of any net profits to
all Members in accordance with their Percentage Interests.
(c) Notwithstanding the foregoing, if any additional
Capital Contribution has been made pursuant to Section 3.4 hereof
or if any new Interests are issued by the Company in accordance
therewith, appropriate amendment shall be deemed to be made to
the allocation of profits and losses set forth in this Section
5.2 to reflect the terms of the new Interest or Capital
Contribution (including, by way of example, a priority return
and/or a preferred return on such capital), and, notwithstanding
Section 12.1 hereof, such amendment shall be automatic, without
the need for Member approval.
(d) Notwithstanding any other provision of this
Agreement to the contrary, if upon liquidation of the Company,
the balance in a Member's Capital Account does not equal the
amount available for distribution to such Member pursuant to
Section 5.1 hereof, profits and losses (including allocations of
gross income, if necessary) shall be allocated to the Members to
the minimum extent necessary to cause the Capital Account of each
Member to equal the amount available for distribution to such
Member pursuant to Section 5.1 hereof.
SECTION 5.3. Special Allocations to Capital Accounts.
Notwithstanding Sections 3.5 and 5.2 hereof:
(a) In the event any Member unexpectedly receives any
adjustments, allocations, or distributions described in section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) of the Regulations, which
create or increase a deficit in the Capital Account of such
Member, then items of Company income and gain (consisting of a
pro rata portion of each item of Company income, including gross
income, and gain for such year and, if necessary, for subsequent
years) shall be specially credited to the Capital Account of such
Member in an amount and manner sufficient to eliminate, to the
extent required by the Regulations, the deficit in the Capital
Account so created as quickly as possible. It is the intent that
this Section 5.3(a) be interpreted to comply with the alternate
test for economic effect set forth in section
1.704-1(b)(2)(ii)(d) of the Regulations.
(b) Notwithstanding any other provision of this
Section 5.3, if there is a net decrease in the Company's minimum
gain as defined in section 1.704-2(d) of the Regulations during a
taxable year of the Company, then the Capital Account of each
Member shall be allocated items of income (including gross
income) and gain for such year (and if necessary for subsequent
years) equal to that Member's share of the net decrease in
Company minimum gain. This Section 5.3(b) is intended to comply
with the minimum gain chargeback requirement of section 1.704-2
of the Regulations and shall be interpreted consistently
therewith. If in any taxable year that the Company has a net
decrease in the Company's minimum gain, if the minimum gain
chargeback requirement would cause a distortion in the economic
arrangement among the Members and it is not expected that the
Company shall have sufficient other income to correct that
distortion, the Member Managers may in their discretion (and
shall, if requested to do so by a Member) seek to have the
Service waive the minimum gain chargeback requirement in
accordance with section 1.704-2(f)(4) of the Regulations.
(c) Beginning in the first taxable year in which there
are allocations of "nonrecourse deductions" (as described in
section 1.704-2(b) of the Regulations), such deductions shall be
allocated to the Members in accordance with, and as a part of,
the allocations of Company profit or loss for such period.
(d) In accordance with section 704(c) of the Code and
the Regulations thereunder, income, gain, loss and deduction with
respect to any property contributed to the capital of the Company
("Section 704(c) Property") shall, solely for tax purposes, be
allocated among the Members so as to take account of any
variation between the adjusted basis of such property to the
Company for Federal income tax purposes and its initial asset
value. In the event that the asset value of any Partnership
asset is adjusted pursuant to section 1.704-1(b)(2)(iv)(f) of the
Regulations, subsequent allocations of 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 gross asset value in the same manner
as under section 704(c) of the Code and the Regulations
thereunder. Notwithstanding anything in this Agreement to the
contrary, all partnership allocations made under section 704(c)
of the Code shall be made using the traditional method described
in section 1.704-3(b) of the Regulations. In accordance with
section 1.704-3(a)(7) and (8), the Allocated Shares attributable
to each Member shall be treated as Section 704(c) Property with
respect to such Member only.
(e) All recapture of income tax deductions resulting
from sale or disposition of Company property shall be allocated
to the Member or Members to whom the deduction that gave rise to
such recapture was allocated hereunder to the extent that such
Member is allocated any gain from the sale or other disposition
of such property.
(f) Any credit or charge to the Capital Accounts of
the Members pursuant to Section 5.3(a), (b) and/or (c) hereof
shall be taken into account in computing subsequent allocations
of profits and losses pursuant to Section 5.2 hereof, so that the
net amount of any items charged or credited to Capital Accounts
pursuant to Section 5.2 and 5.3 shall to the extent possible, be
equal to the net amount that would have been allocated to the
Capital Account of each Member pursuant to the provisions of this
Article V if the special allocations required by Sections 5.3(a),
(b) and/or (c) hereof had not occurred.
SECTION 5.4. Allocation of Income and Loss and
Distributions in Respect of Interests Transferred. (a) If any
Interest in the Company is transferred, or is increased or
decreased by reason of the admission of a new Member or
otherwise, during any fiscal year of the Company, each item of
income, gain, loss, deduction or credit of the Company for such
fiscal year shall be assigned to each day in the particular
period of such fiscal year to which such item is attributable
(i.e., the day on or during which it is accrued or otherwise
incurred) and the amount of each such item so assigned to any
such day shall be allocated to the Member based upon its
respective Interest in the Company at the close of such day. For
the purpose of accounting convenience and simplicity, the Company
may treat a transfer of, or an increase or decrease in, an
Interest in the Company that occurs at any time during a
semi-monthly period (commencing with the semi-monthly period
including the date hereof) as having been consummated on the
first day of such semi-monthly period, regardless of when during
such semi-monthly period such transfer, increase, or decrease
actually occurs (i.e., sales and dispositions made during the
first 15 days of any month may be deemed to have been made on the
first day of the month and sales and dispositions thereafter may
be deemed to have been made on the 16th day of the month).
(b) Distributions of Company assets in respect of an
Interest in the Company shall be made only to the Persons who,
according to the books and records of the Company, are the
holders of record of the Interests in respect of which such
distributions are made on the actual date of distribution.
Neither the Company nor any Member shall incur any liability for
making distributions in accordance with the provisions of the
preceding sentence, whether or not the Company or the Member has
knowledge or notice of any transfer or purported transfer of
ownership of any Interest in the Company that has not been
approved as provided in this Agreement.
ARTICLE VI
DISTRIBUTION
SECTION 6.1. Distribution in Kind. Notwithstanding
the provisions of section 18-605 of the Act, a Member may receive
distributions from the Company in any form other than cash
(except that, anything to the contrary contained in this
Agreement notwithstanding, the Company shall not make any
distributions of Shares other than in liquidation of the Company)
and may be compelled to accept a distribution of any asset in
kind from the Company such that the percentage of the asset
distributed to him exceeds a percentage of that asset which is
equal to the percentage in which the Member shares in
distributions from the Company.
ARTICLE VII
RESTRICTIONS ON TRANSFER GENERALLY
SECTION 7.1. Transfers to be Made Only as Permitted or
Required by this Agreement. The Members may not, directly or
indirectly, sell, assign, transfer, pledge or otherwise encumber
or dispose of (collectively, "transfer") any Interests, except as
specifically permitted or required by this Article VII; any other
purported transfer shall be void and of no effect.
SECTION 7.2. Permitted Transfers. Subject, with
respect to the Member Managers, to the last sentence of Section
4.1(a) hereof, (i) CEP, Chef, Simon or Xxxxxx may transfer any of
their Interests (but not the right to vote or participate in the
management of the Company, except as provided in (x) the last
sentence of Section 3.2(c) hereof and (y) in the last proviso of
the first sentence of Section 4.1 hereof) to any of their
respective Affiliates, (ii) Simon, Xxxxxx and the Bermans may
transfer any of their Interests (but not the right to vote or to
participate in the management of the Company, except as provided
in (x) the last sentence of Section 3.2(c) hereof and (y) in the
last proviso of the first sentence of Section 4.1 hereof) to
their respective spouses, their respective descendants or any
executor, estate, guardian, committee, trustee or other fiduciary
acting as such on behalf or for the benefit of any such spouse or
descendant (Member's "Family Group") and (iii) ASE may transfer
any of its Interests (but not the right to vote or to participate
in the management of the Company, except as provided in (x) the
last sentence of Section 3.2(c) hereof and (y) in the last
proviso of the first sentence of Section 4.1 hereof) to Simon or
any Person to whom Simon could transfer his Interests under this
Section 7.2, in each case subject to written agreement by the
transferee (in form and substance reasonably satisfactory to all
the Member Managers) to be bound by this Article VII, Section 4.1
and Articles X and XII hereof as if the transferee were the
transferring Member. A transferee under this Section 7.2 is
referred to as a "Permitted Transferee." At all times during his
lifetime Simon shall control ASE unless CEP consents upon written
request of Simon, which consent shall not be unreasonably
withheld.
SECTION 7.3. No Transfers. Other than as set forth in
this Agreement, no Member, without the prior written consent of
the Member Managers (which consent may be withheld in the sole
discretion of any Member Manager), shall (i) transfer all or any
part of its direct or indirect Interest in the Company or (ii)
resign as a Member. Without limiting the limitations set forth
in this Section 7.3, no transfer of any Interest in the Company
may be made unless the transferring Member delivers to the
Company an opinion of counsel stating, or other evidence
satisfactory to the Company, that (i) registration of the
transferred Interest in the Company is not required under the
1933 Act, and such transfer shall not violate applicable state
securities or blue sky registration requirements in any respect,
and (ii) such transfer shall not cause the Company to be treated
as an association taxable as a corporation rather than as a
partnership subject to the provisions of Subchapter K of the
Code. Any such opinion of counsel shall be rendered by counsel,
and shall be in form and substance, reasonably acceptable to all
the Member Managers and all costs and expenses thereof shall be
borne by the transferring Member. In no event shall any Interest
in the Company be transferred to a minor (except pursuant to a
bequest by a Member, provided that any right exercised pursuant
to this Agreement shall be exercised on behalf of such minor by
an appropriately appointed custodian under the Uniform Transfers
to Minors Act) or an incompetent or in violation of any state or
Federal law. No consent to a transfer pursuant to this Section
7.3 shall be construed as a consent to any other transfer of the
same or any other interest or Member.
ARTICLE VIII
DISSOLUTION
SECTION 8.1. Dissolution Events. (a) No Member shall
have the right to terminate this Agreement or dissolve the
Company or withdraw or otherwise retire or resign as a Member
except pursuant to the prior written consent of both (a) the
Member Managers and (b) Members representing more than 75% of the
Percentage Interests. Any purported withdrawal, retirement or
resignation without such prior written consent shall be void and
of no effect. Except as expressly provided for herein, a Member
may not withdraw capital from the Company without the prior
written unanimous consent of all the Member Managers.
(b) The Company shall be dissolved upon the first to
occur of any of the following:
(i) The expiration of the term set forth in
Section 2.8 hereof;
(ii) The Bankruptcy, dissolution, death,
insanity, retirement, resignation, or expulsion of any Member
Manager;
(iii) The sale, in one transaction or in a series
of directly related transactions, of all the assets of the
Company; or
(iv) The unanimous agreement of the Member
Managers to dissolve the Company.
Except as expressly set forth above, there are no other events
pursuant to which the Company shall be dissolved and its affairs
wound up. Furthermore, no Member, except pursuant to the
unanimous written consent of the Member Managers, shall wind up
or attempt to wind up the Company. The Company shall not be
dissolved upon the Bankruptcy, (any other bankruptcy event, if
any, described in the Act), dissolution, death, insanity,
retirement, resignation or expulsion of any Member which is not a
Member Manager. Each Member agrees not to apply for judicial
dissolution pursuant to Section 18-802 of the Delaware Limited
Liability Company Act prior to June 30, 2000.
SECTION 8.2. Votes of Members. If an act or other
event described in Section 8.1(b)(ii) hereof occurs and the
Members owning a majority of the profits interests and a majority
of the capital interests owned by all the Members (excluding the
Member Manager whose Bankruptcy, dissolution, death, insanity,
retirement, resignation or expulsion caused such dissolution)
within 90 days of the date of such act or event, elect in writing
to continue the business of the Company such event or other act
shall not constitute a dissolution of the Company.
SECTION 8.3. Termination and Winding Up of the
Company. (a) If the Company is dissolved, then an accounting of
the Company's assets, liabilities and operations through the last
day of the month in which the dissolution occurs shall be made,
and the affairs of the Company shall thereafter be promptly wound
up and terminated. All the Member Managers acting unanimously
shall appoint one or more Persons to serve as the liquidating
trustee of the Company. The liquidating trustee shall be
responsible for winding up and terminating the affairs of the
Company and shall determine all matters in connection therewith
(including, without limitation, the arrangements to be made with
creditors, to what extent and under what terms the assets of the
Company are to be sold, and the amount or necessity of cash
reserves to cover contingent liabilities) as the liquidating
trustee deems advisable and proper; provided that all decisions
of the liquidating trustee shall be made in accordance with the
fiduciary duty owed by the liquidating trustee to the Company and
each of the Members, and any disposition of the properties of the
Company shall be by auction with prior notice to all Persons who
were Members at the time of the dissolution. The liquidating
trustee shall thereafter liquidate the assets of the Company as
promptly as is consistent with obtaining the fair market value
thereof, and the proceeds therefrom, to the extent sufficient
therefor, shall be applied and distributed in the following
order:
(i) To the payment and discharge of all of the
Company's debts and liabilities to creditors (including Members
and the liquidating trustee) in the order of priority as provided
by law, except those to Members of the Company on account of
their Capital Contributions; and
(ii) The balance, if any, to the Members in
accordance with the provisions of Section 5.1(a) hereof, to the
extent that such balance represents the Proceeds from, or
property received in a distribution in respect of, Allocated
Shares, or Section 5.1(b) hereof, to the extent that such balance
arises from other sources.
(b) Notwithstanding anything to the contrary in
Section 8.3(a) hereof, the liquidating trustee shall not sell any
Allocated Shares of a Member without the express written consent
of such Member. Without such consent, any Allocated Shares of
such Member shall be distributed to such Member.
(c) After all of the assets of the Company have been
distributed, the Company shall terminate; if at any time
thereafter any funds in any cash reserve fund referred to in
Section 8.3(a) hereof are released because the need for such cash
reserve fund has ended, such funds shall be distributed to the
Members in the same manner as if such distribution had been made
pursuant to clauses (i) and (ii) of Section 8.3(a) hereof.
ARTICLE IX
REPORTS
SECTION 9.1. Form K-1. After the end of each fiscal
year, the Company shall cause to be prepared and transmitted, as
promptly as possible, and in any event within 90 days of the
close of the fiscal year, a Federal income tax form K-1 for each
Member.
SECTION 9.2. Books and Records. The books and records
of the Company shall, at the cost and expense of the Company, be
kept or caused to be kept by the Company at the principal place
of business of the Company. Such books and records shall be kept
on the basis of a calendar year, and shall reflect all Company
transactions and be appropriate and adequate for conducting the
Company's business. Such books and records shall be kept on the
accrual method of accounting for financial and Federal income tax
purposes.
SECTION 9.3. Bank Accounts. All funds of the Company
shall be deposited in its name in an account or accounts
maintained with such bank or banks selected by the Company. The
funds of the Company shall not be commingled with the funds of
any other Person. Checks shall be drawn upon the Company account
or accounts only for the purposes of the Company and shall be
signed by authorized officers of the Company.
SECTION 9.4. Other Information. The Company may
release such information concerning the operations of the Company
to such sources as is customary in the industry or required by
law or regulation or by order of any regulatory body or generally
accepted accounting practices. For the term of the Company and
for a period of four years thereafter, the Company shall cause
to be maintained and preserved all books of account and other
relevant documents.
ARTICLE X
EXCULPATION AND INDEMNIFICATION
SECTION 10.1. Exculpation. Notwithstanding any other
provisions of this Agreement, whether express or implied, or
obligation or duty at law or in equity, no Member or Member
Manager, nor any of its respective officers, directors,
stockholders, partners, employees, representatives or agents nor
any officer, employee, representative or agent of the Company or
any of its Affiliates (individually, a "Covered Person" and
collectively, the "Covered Persons") shall be liable to the
Company, any Member or any other person for any act or omission
(in relation to the Company, this Agreement, any related document
or any transaction or investment contemplated hereby or thereby)
taken or omitted in good faith by a Covered Person and in the
reasonable belief that such act or omission is in or is not
contrary to the best interests of the Company and is within the
scope of authority granted to such Covered Person by this
Agreement, provided that such act or omission does not constitute
fraud, willful misconduct, bad faith or gross negligence.
SECTION 10.2. Indemnification. (a) The Company shall
indemnify and hold harmless any Person who was or is a party or
is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in
the right of the Company) by reason of the fact that he is or was
a Member, Member Manager, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and other
Losses which, for the purposes of this Section 10.2, shall
include, without limitation, amounts paid in settlement actually
and reasonably incurred by him in connection with such action,
suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best
interests of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person seeking indemnification did
not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the
Company and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful.
(b) The Company shall indemnify and hold harmless any
Person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in
the right of the Company to procure a judgment in its favor by
reason of the fact that he is or was a Member, Member Manager,
officer, employee or agent of the Company, or is or was serving
at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust
or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good
faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and except that no
indemnification shall be made in respect of any claim, issue or
matter as to which such Person shall have been adjudged to be
liable to the Company unless and only to the extent that the
Court of Chancery of the State of Delaware or the court in which
such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all
the circumstances of the case, such Person is fairly and
reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
(c) To the extent that a Member, Member Manager,
employee or agent of the Company has been successful on the
merits or otherwise in defense of any action, suit or proceeding
referred to in (a) and (b) of this Section 10.2, or in defense of
any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under (a) and (b) of this
Section 10.2 (unless ordered by a court) shall be made by the
Company except only in the specific case upon a determination,
upon clear and convincing evidence that indemnification of the
Member, Member Manager, officer, employee or agent is not proper
in the circumstances because he has not met the applicable
standard of conduct set forth in such paragraphs (a) and (b).
(e) Expenses (including attorneys' fees) incurred by
any Member Manager, officer or Member in defending any civil,
criminal, administrative or investigative action, suit or
proceeding may be paid by the Company in advance of the final
disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such officer, Member Manager or
Member to repay such amount if it shall ultimately be determined
that he or it is not entitled to be indemnified by the Company as
authorized in this Section 10.2. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the Member
Managers unanimously deem appropriate.
(f) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.2 shall not
be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under
any law, agreement, vote of Members or disinterested Members or
otherwise, both as to action in an official capacity and as to
action in another capacity while holding such office.
(g) The Company may purchase and maintain insurance on
behalf of any Person who is or was a Member, Member Manager,
officer, employee or agent of the Company, or is or was serving
at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust
or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his
status as such.
(h) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.2 shall,
unless otherwise provided when authorized or ratified, continue
as to a Person who has ceased to be a Member, Member Manager,
officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a Person.
(i) For all purposes of this Article X, Members
include, without limitation, Members acting in the capacity of a
Voting Member or a Principal Member. All references in this
Article X to individuals include, where applicable, references to
entities, including with respect to the right to indemnification
pursuant to this Article X.
ARTICLE XI
THE COMPANY'S REGISTRATION RIGHTS RELATING TO SHARES OF
DESIGNER HOLDINGS AND RELATED RULE 144 SALES
SECTION 11.1. Registration Rights Agreement.
(a) The provisions of this Article XI are intended to
govern the Company's exercise of its registration rights under
the Registration Rights Agreement and the sale or other
disposition by the Company (any such sale or disposition of
Shares, whether pursuant to a registration or otherwise, other
than a pledge as permitted by Section 11.7 hereof, a "Transfer")
of the Shares.
(b) The Company shall exercise its rights under the
Registration Rights Agreement, and shall effect Transfers of
Shares, only as provided in this Article XI. Notwithstanding any
other provision of this Agreement to the contrary, (i) the rights
and obligations of the Members and the Company pursuant to this
Article XI with respect to the Registration Rights Agreement are
subject to the provisions of the Registration Rights Agreement
and (ii) the rights and obligations of the Members and the
Company with respect to the Registration Rights Agreement and all
Transfers of Shares shall be subject to all applicable laws
including, without limitation, the 1933 Act, the 1934 Act and
applicable state securities or blue sky laws.
(c) The rights of any Member to request the
registration or the Transfer of any Shares shall be limited to
the Allocated Shares of such Member, and upon the Transfer by the
Company of all the Allocated Shares of such Member, and the
distribution to such Member of any Proceeds relating to the
Transfer of such shares, all rights of such Member under this
Article XI shall cease.
(d) Notwithstanding any provision in this Agreement to
the contrary, if the Company receives advice from the Issuer, or
if both Member Managers determine in their reasonable judgment,
at the time that the Company receives a request to effect a
registration or a Transfer, that, as applicable, (i) there shall
be an adverse effect on a then contemplated public offering of
the Issuer's securities, (ii) the registration and offering would
interfere with any material financing, acquisition, corporate
reorganization or other material corporate transaction or
development involving the Issuer that is pending or imminent,
(iii) the disclosures that would be required to be made by the
Issuer in connection with such registration or Transfer would be
materially harmful to the Issuer because of transactions then
being considered by, or other events then concerning, the Issuer,
or (iv) registration at the time would require the inclusion of
pro forma or other information, which requirement the Issuer is
reasonably unable to comply with, and the Company promptly gives
notice of that determination to each Member that has requested
such registration or Transfer, which may be a very general
notice, then the Company may defer requesting such registration
or effecting such Transfer. If the Company shall so postpone
requesting a registration statement, the Demanding Member, in the
case of any registration referred to in Section 11.3 hereof,
shall have the right to withdraw its or his Demand Request by
giving written notice to the Company within 30 days after the
receipt of the notice of the postponement and, in the event of
the withdrawal, the Demand Request that was withdrawn shall not
be deemed to have been made.
(e) Notwithstanding the fact that Sections 11.2, 11.3
and 11.4 pertain only to Members, to the extent that any Member
has transferred any Interests to a Permitted Transferee, (i) such
Permitted Transferee shall be deemed for the purpose of this
Article XI to have been apportioned a pro rata share of the
Allocated Shares attributable to such Member (based upon the
amount of the Interest transferred), (ii) all such Permitted
Transferees shall receive any notice to be provided under this
Article XI to the Member and (iii) any notice given or action to
be taken by a Member (other than an action under Section 11.4 or
11.5, which action shall not require the majority referred to in
this clause (iii)) may be given or taken by such Member and the
Permitted Transferees of such Member that have been apportioned a
majority of the Allocated Shares of the Member and the Permitted
Transferees of such Member. Whenever this Article XI shall make
a pro rata allocation based upon the number of Allocated Shares
of a Member, such allocation shall be made upon the basis of the
Allocated Shares of such Member and the Permitted Transferees of
such Member. For the purposes of this Article XI, ASE shall be
deemed to be a Permitted Transferee of Simon.
(f) When this Article XI states that the Company shall
cause the Issuer to take any action, it shall be interpreted to
mean that the Company shall take such actions as all of the
Member Managers believe is reasonably appropriate to cause the
Issuer to take such action.
(g) If the Lender gives notice to the Company that it
has the right to foreclose upon the Pledged Shares, (i) the
Lender shall be deemed for the purpose of this Article XI to have
been apportioned the Pledged Shares as Allocated Shares, (ii) the
Lender shall have the right to receive any notice that would have
been given to a Member with respect to such Allocated Shares,
(iii) any notice given by the Lender or action to be taken by a
Member (other than Simon or CEP) that a Member could take with
respect to such Allocated Shares that were pledged may be given
or taken by the Lender and (iv) such Member shall cease to have
rights and powers under this Article XI with respect to the
Pledged Shares.
SECTION 11.2. Exercise of Piggyback Registration
Rights.
(a) Right to Piggyback. Whenever the Company
receives notice that the Issuer proposes to register any of its
common stock (or securities convertible into or exchangeable or
exercisable for common stock) under the 1933 Act for its own
account or the account of any stockholder of the Issuer (other
than offerings pursuant to employee plans, or noncash offerings
in connection with a proposed acquisition, exchange offer,
recapitalization or similar transaction) and the registration
form to be used can be used for the registration of Shares (a
"Piggyback Registration"), the Company shall give prompt written
notice to each Member of the intention of the Issuer to effect
such a registration and, subject to Section 11.2(c), shall cause
the Issuer to include in such registration all the Shares with
respect to which the Company has received written request
specifying the number of Allocated Shares of a Member for
inclusion therein within 30 days after receipt of the Company's
notice by each Member.
(b) Designation of Pricing. The party initiating a
Piggyback Registration may designate a minimum offering price and
maximum underwriting or selling discounts at which shares of
common stock may be sold.
(c) Priority. If a Piggyback Registration pursuant to
this Section 11.2 involves an underwritten offering, the Company
shall not be required to cause the Issuer to register any
Allocated Shares of any Member unless such Member accepts the
terms of the underwriting agreement, to the extent applicable to
such Member, and then only in such quantity as shall not, in the
written opinion of the managing underwriter, exceed the maximum
shares of common stock (or other securities) that can be marketed
without materially and adversely affecting the offering, if any,
by the Issuer or the stockholder of the Issuer, as the case may
be. If the managing underwriter advises the Company in good
faith that in its opinion the number of securities requested to
be included in such registration exceeds the number that can be
sold in such offering without having an adverse effect on such
offering, including the price at which such securities can be
sold, then the Company shall cause the Issuer to include in such
registration the maximum number of Shares that such underwriter
advises can be so sold, allocated
(i) if such registration was initiated by the Issuer,
(x) first, to the securities the Issuer proposes to sell, (y)
second, among the Shares requested to be included in such
registration by the Members, pro rata, on the basis of the number
of Allocated Shares of each Member, and (z) third, among other
securities, if any, requested and otherwise eligible to be
included in such registration; and
(ii) if such registration was initiated by the Company
at the request of any Demanding Member, (x) first, between the
Allocated Shares requested to be included in such registration by
the Demanding Member and the Second Principal Member, pro rata,
on the basis of the number of Allocated Shares of each, (y)
second, among the Allocated Shares requested to be included in
such registration by any other Members, pro rata, on the basis of
the number of Allocated Shares of each such Member, and (z)
third, to any securities the Issuer proposes to sell.
SECTION 11.3. Exercise of Demand Registration Rights.
(a) Right to Demand.
(i) At any time when permitted by the
Registration Rights Agreement, Simon or CEP (each, a "Demanding
Member") may request the Company to exercise its Demand
Registration Right under the Registration Rights Agreement (a
"Demand Request"), provided that either (x) the Shares requested
to be registered by such Demanding Member have an aggregate Fair
Market Value of at least $20 million or (y) the Shares requested
to be registered constitute all the remaining Allocated Shares of
such Demanding Member. For the purposes of this Section 11.3,
the Allocated Shares attributable to ASE shall be deemed to be
part of the Allocated Shares of Simon, and the Allocated Shares
attributable to Chef shall be deemed to be part of the Allocated
Shares of CEP.
(ii) Within 10 days after receipt of any Demand
Request, the Company shall give written notice of the Demand
Request to the other Members (collectively, the "Non-Demanding
Members") and shall, subject to the provisions of the last
paragraph of this Section 11.3(a), use all reasonable efforts to
exercise the Demand Registration Right with respect to the
Allocated Shares specified in the Demand Request and, subject to
Section 11.3(b), to cause the Issuer to include in the
registration all the additional Shares with respect to which the
Company has received written requests for inclusion therein
within 60 days after the receipt of the Demand Request by the
Non-Demanding Members.
(iii) The Lender shall not have the right to
exercise a demand pursuant to the foregoing provisions of this
Section 11.3(a). If the Lender has the right to foreclose upon
the Pledged Shares, the Lender shall, subject to paragraphs (iv)
and (v) of this Section 11.3(a), have the right to exercise a
Demand Request pursuant to the Registration Rights Agreement,
provided that (i) the Shares requested to be registered by the
Lender have an aggregate Fair Market Value of at least $20
million or (ii) the Shares requested to be registered constitute
all the Pledged Shares.
(iv) Upon the occurrence of Simon's death and/or
the death of his spouse, if the good faith estimate of either
such estate is that estate taxes payable shall exceed $10
million, then the estate, the executor or the personal
representative, as the case may be, of Simon or his spouse, as
the case may be, shall each have the right to exercise a Demand
Request pursuant to the Registration Rights Agreement, provided
that the Shares requested to be registered by such estate,
executor or personal representative have an aggregate Fair Market
Value of at least $20 million, provided, further, that only one
demand may be exercised in respect of the estate of Simon and
only one demand may be exercised in respect of the estate of his
spouse. The Company agrees not to exercise two of the Demand
Registrations provided pursuant to Section 3 of the Registration
Rights Agreement unless requested to do so by Simon's estate or
the estate of Simon's spouse.
(v) The Company shall cause the Issuer to effect
(A) not more than two Demand Registrations by each
Demanding Member pursuant to paragraph (i) of this Section
11.3(a), provided that the Demand Registrations available to each
Demanding Member pursuant to this clause (A) shall be reduced by
one if a Demand Registration has been exercised in respect of the
Allocated Shares of such Demanding Member pursuant to clause (B),
and provided, further, that (x) upon the exercise of the first
Demand Request pursuant to paragraph (iv) of this Section
11.3(a), CEP shall obtain the right to require the Company to
cause the Issuer to effect an additional Demand Registration and
(y) upon the exercise of the second Demand Request pursuant to
paragraph (iv) of this Section 11.3(a), CEP shall obtain the
right to require the Company to cause the Issuer to effect a
second additional Demand Registration,
(B) not more than two Demand Registrations
pursuant to paragraph (iii) of this Section 11.3(a) (one for CEP
and one for Simon), provided that (x) a Demand Registration may
be exercised in respect of the Allocated Shares attributable to
Simon pursuant to this clause (B) only if Simon has not exercised
two Demand Registrations pursuant to clause (A) and (y) a Demand
Registration may be exercised in respect of the Allocated Shares
attributable to CEP pursuant to this clause (B) only if CEP has
not exercised two Demand Registrations pursuant to clause (A),
and
(C) not more than two Demand Registration pursuant
to paragraph (iv) of this Section 11.3(a),
provided that if for any reason the number of demand
registrations available to the Company under the Registration
Rights Agreement is not reduced as a result of any Demand
Request, such Demand Request shall not reduce the number of
Demand Requests that such Demanding Member may request under this
Section 11.3(a), provided, further, that upon Simon's death, if
the Company has not caused two Demand Registrations to be
effected on behalf of Simon pursuant to clause (A) of this
paragraph (v), the Permitted Transferees of Simon that have been
apportioned a majority of the Allocated Shares originally
attributable to Simon shall have the right to request the Company
to cause such remaining Demand Registration or Demand
Registrations.
(vi) Pursuant to the Registration Rights Agreement,
the Issuer shall bear the costs of the Demand Registrations
requested pursuant to this Section 11.3, provided that (x) the
Person requesting a Demand Registration in respect of the
Allocated Shares attributable to Simon shall pay the costs of
such registration for any Demand Registrations after two Demand
Registrations have been effected in respect of the Allocated
Shares attributable to Simon and (y) the Person requesting a
Demand Registration in respect of the Allocated Shares
attributable to CEP shall pay the costs of such registration for
any Demand Registrations after two Demand Registrations have been
effected in respect of the Allocated Shares attributable to CEP.
(vii) The Company confirms and agrees that a Demanding
Member (the "Joining Member") that joins in a Demand Registration
initiated by another Demanding Member shall not by reason thereof
be deemed to have used any of the Demand Registrations provided
herein for such Joining Member.
(b) Priority. If a Demand Request pursuant to this
Section 11.3 involves an underwritten offering, the Company shall
not be required to cause the Issuer to register any Allocated
Shares attributable to any Non-Demanding Member unless such
Non-Demanding Member accepts the terms of the underwriting
agreement, to the extent applicable to it, and then, only in such
quantity as shall not, in the written opinion of the managing
underwriter, exceed the maximum shares of common stock or other
securities that can be marketed without materially adversely
affecting the offering, if any, by the Demanding Member. If the
managing underwriter advises the Company in good faith that in
its opinion the number of securities requested to be included in
such registration exceeds the number which can be sold in such
offering without having an adverse effect on such offering,
including the price at which such securities can be sold, then
the Company shall cause the Issuer to include in such
registration the maximum number of Shares that such underwriter
advises can be so sold, allocated (x) first, to the Allocated
Shares requested to be included in such registration by such
Demanding Member, provided that, if a Non-Demanding Member that
requests inclusion in a Demand Registration is a Principal Member
(the "Second Principal Member"), then first, between the
Allocated Shares requested to be included in such registration by
the Demanding Member and the Second Principal Member, pro rata,
on the basis of the number of Allocated Shares of each, (y)
second, among the Allocated Shares requested to be included in
such registration by any other Member, pro rata, on the basis of
the number of Allocated Shares of each such Member, and (z)
third, to any securities that the Issuer proposes to sell.
(d) Selection of Underwriters. In connection with any
Demand Registration, the Demanding Member, the estate or the
Lender, as the case may be, shall select a managing underwriter
or underwriters, which underwriter or underwriters shall be
nationally recognized and shall be reasonably acceptable to the
Member Managers.
SECTION 11.4. Initiation of a Rule 144 Sale. Any
Member may request all or any portion of the Allocated Shares of
such Member be the subject of a Transfer by the Company (a "Rule
144 Request"). A Rule 144 Request shall specify the number of
Allocated Shares that is subject to such request, provided that a
Member shall not request the inclusion of a number of Shares
during any three-month period that is greater than the maximum
number of Shares that the Company could sell pursuant to Rule 144
multiplied by a fraction, the numerator of which is the number of
Allocated Shares attributable to such Member and the denominator
of which is the total number of Allocated Shares then held by the
Company. Promptly upon receipt of a Rule 144 Request, the
Company shall give each other Member notice of the Rule 144
Request and shall use its best efforts to effect the Transfer of
the Allocated Shares in respect of which the Company receives
written requests for inclusion within 30 days after such Member
shall have received the Company's notice pursuant to this Section
11.4. Any Transfer proposed to be made pursuant to this Section
11.4 (i) shall be subject in all respects to compliance by the
Company with the provisions of Rule 144, (ii) shall be subject to
interruption and termination as a result of any registration of
securities by the Issuer, regardless of whether initiated
pursuant to the Registration Rights Agreement and (iii) shall be
subject to interruption and termination for any of the reasons
set forth in Section 11.1(d).
SECTION 11.5. Individual, Private Sale. Upon written
notice from any Member, to the extent that it may lawfully do so,
the Company shall effect a Transfer of all or any portion of the
Allocated Shares of such Member pursuant to any available
exemption from the registration requirement under the 1933 Act.
No transfer of any such Shares may be made unless such Member
delivers to the Company an opinion of counsel stating, or other
evidence satisfactory to the Company, that registration of such
Shares is not required under the 1933 Act, and such transfer
shall not violate applicable state securities or blue sky laws in
any respect. Any such opinion of counsel shall be rendered by
counsel, and shall be in form and substance, reasonably
acceptable to all the Member Managers and all costs and expenses
thereof shall be borne by such Member. Notwithstanding the
foregoing to the contrary, the Company shall not take the action
referred to in the first sentence of this Section 11.5 if any
Member Manager reasonably believes that any such action would be
unlawful, or could have an adverse effect upon any Member or the
Company.
SECTION 11.6. Reduction of Allocated Shares. Upon the
consummation by the Company of any Transfer of Shares, (i) the
number of Allocated Shares of each Member that caused Shares to
be included in such Transfer shall be reduced by the number of
such Member's Allocated Shares that were actually included in
such Transfer, provided that such reduction shall be made only on
the basis of whole Shares and the Company shall allocate any
fractional Shares among such Members by lot or pursuant to any
other method that the Company deems, in its sole judgment, to be
just and equitable and (ii) the Percentage Interests of the
Members shall be adjusted to reflect the number of remaining
Allocated Shares that are attributable to each such Member (and
to each Member's Permitted Transferees).
SECTION 11.7. Permitted Pledges.
(a) Each Member (each, the "Borrower") shall have the
right to require the Company to make a limited recourse guaranty
of a loan made to the Borrower by one or more lenders
(collectively, the "Lender") and to pledge, as security for such
guaranty, all or any portion of the Allocated Shares attributable
to the Borrower (the "Pledged Shares"), provided that, aside from
recourse to the Borrower and the pledge of the Pledged Shares
permitted by this Section 11.7, such loan and guaranty shall be
without recourse to the Company, any of its property or any of
the Members. Upon notice to the Company that the Borrower has
agreed to provide the guaranty and the pledge the Pledged Shares,
(i) the Company shall cause a certificate representing such
Shares to be issued in its name and shall deliver such
certificate to the Lender together with a power of attorney to
permit the Lender (A) to sell the Shares represented by such
certificate in the name of the Company and, (B) with respect to a
loan to a Borrower that is a Principal Member, to exercise a
Demand Registration right pursuant to the Registration Rights
Agreement and (ii) the Company shall refrain from any action to
effect a Transfer of any portion of the Pledged Shares without
the written consent from the Lender. The documentation relating
to such guaranty and pledge shall be in form and substance
reasonably satisfactory to the Member Managers.
(b) Upon the foreclosure by the Lender upon the
Pledged Shares, the Lender shall have the right to succeed to
applicable rights to direct the Company to effect a Transfer of
the Pledged Shares, and the Company shall distribute the Proceeds
from any such Transfer to the Lender.
SECTION 11.8 Liquidation of the Company. Upon the
liquidation of the Company, (a) the Demand Registration Rights
provided for in Section 11.3(a) shall be distributed,
respectively, to Simon (and his Permitted Transferees, as the
case may be) and to CEP (and its Permitted Transferees, as the
case may be) to the extent that such Demand Registration Rights
have not been exercised and the special Demand Registration
Rights provided in Section 11.3(a)(iv) shall be distributed to
Simon and (b) the piggyback registration rights provided for in
Section 11.2 hereof shall be assigned to each Member and each
Permitted Transferees thereof.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1. Amendments. Except as otherwise
provided in this Agreement and this Section 12, this Agreement
may be amended only with the prior written consent of (a) all the
Member Managers and (b) Members that hold at least 75% of the
Percentage Interests. Without consent or approval of the
Members, Member Managers acting unanimously may amend this
Agreement to reflect changes validly made in the membership of
the Company and in the contributions of the Members to the
Company, in priority returns of capital or priority returns on
capital of any new Interests issued by the Company or any
additional Capital Contributions made to the Company and to cure
any ambiguity or to correct or supplement any provision herein
that may be inconsistent with any other provision herein, if the
correction shall not adversely affect the rights or interests of
the Company or any Member. The Member Managers acting
unanimously also may independently amend this Agreement in order
to add to their duties or surrender any of their rights or powers
for the benefit of the Members or otherwise in order to comply
with the requirements of applicable laws or regulations of any
Federal or state courts, governmental offices or agencies. All
amendments made in accordance with this Section 12.1 shall be
evidenced by a writing executed by the appropriate Persons and a
copy of such written amendments shall be kept at the office of
the Company and provided to the Members promptly after the
adoption thereof. Notwithstanding anything else to the contrary
contained herein, this Agreement shall be amended from time to
time, in each and every manner to comply with the then existing
requirements imposed by the Code or the Service affecting the
status of the Company as a partnership for Federal income tax
purposes. Subject to this Section 12.1, an amendment to this
Agreement that affects (a) the proportionate ownership of
Interests of any Member, (b) such Member's right to participate
in allocations and distributions under this Agreement or (c) the
limited liability of any such Member, shall not be effective or
binding upon such Member without the prior written consent of
such Member. Nothing contained in this Section 12.1 shall in any
way limit the Company's ability to admit new Members and amend
this Agreement as provided in Sections 3.4 and 5.1 hereof. All
consents and waivers must be in writing. The provisions of each
of Articles V, X and XI shall not be amended without the prior
consent of each of Simon, ASE and CEP, to the extent that each of
them is still a Member.
SECTION 12.2. Successors; Counterparts. This
Agreement (a) shall be binding as to the executors,
administrators, estates, heirs and legal successors, or nominees
or representatives, of the Members and (b) may be executed in
several counterparts with the same effect as if the parties
executing the several counterparts had all executed one
counterpart.
SECTION 12.3. Governing Law; Severability. This
Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware without giving effect to the
principles of conflict of laws thereof. In particular, this
Agreement shall be construed to the maximum extent possible to
comply with all the terms and conditions of the Act. If,
nevertheless, it shall be determined by a court of competent
jurisdiction that any provisions or wording of this Agreement
shall be invalid or unenforceable under the Act or other
applicable law, such invalidity or unenforceability shall not
invalidate the entire Agreement. In that case, this Agreement
shall be construed so as to limit any term or provision so as to
make it enforceable or valid within the requirements of
applicable law, and, in the event such term or provisions cannot
be so limited, this Agreement shall be construed to omit such
invalid or unenforceable terms or provisions. If it shall be
determined by a court of competent jurisdiction that any
provision relating to the distributions and allocations of the
Company or to any expenses payable by the Company is invalid or
unenforceable, this Agreement shall be construed or interpreted
so as (a) to make it enforceable or valid and (b) to make the
distributions and allocations as closely equivalent to those set
forth in this Agreement as is permissible under applicable law.
SECTION 12.4. Filings; Tax Matters Partner. (a)
Following the execution and delivery of this Agreement, the
Members shall promptly prepare any documents required to be filed
and recorded under the Act, and the Members shall promptly cause
each such document to be filed and recorded in accordance with
the Act and, to the extent required by local law, to be filed and
recorded or notice thereof to be published in the appropriate
place in each jurisdiction in which the Company may hereafter
establish a place of business. The Members shall also promptly
cause to be filed, recorded and published such statements of
fictitious business name and any other notices, certificates,
statements or other instruments required by any provision of any
applicable law of the United States or any state or other
jurisdiction which governs the conduct of its business from time
to time.
(b) The Company shall file as a partnership for Federal
income tax purposes. CEP shall act as the tax matters partner
(the "TMP") within the meaning of section 6231(a)(7) of the Code.
The TMP shall make all applicable elections, determinations and
other tax decisions for the Company relating to Federal, state or
local tax matters, including, without limitation, the positions
to be taken on the Company's tax returns and the settlement or
further contest and litigation of any audit matters raised by the
Service or any other taxing authority. The Member Managers shall
cause all tax returns of the Company to be timely filed. The TMP
is authorized to represent the Company (at the Company's expense)
in connection with all examinations of the Company's affairs by
tax authorities, including resulting administrative and judicial
proceedings, and to expend Company funds for professional
services and costs associated therewith. Each Member agrees to
cooperate with the TMP and to do or refrain from doing any or all
things reasonably required by the TMP to conduct such
proceedings. In addition, each Member agrees that (i) it shall
not file a statement under section 6224(c)(3)(B) of the Code
prohibiting the TMP from entering into a settlement on its behalf
with respect to Company items; (ii) it shall not form or become a
member of a group of Members having a 5% or greater interest in
the profits of the Company and requesting notices under section
6223(b)(2) of the Code; and (iii) the TMP is authorized to file a
copy of this Agreement with the Service pursuant to section
6224(b) of the Code if necessary to perfect a Member's waiver of
rights hereunder. The Company shall reimburse the TMP for all
reasonable out-of-pocket expenses incurred by it in connection
with any administrative or judicial proceeding with respect to
the tax liabilities of the Company or the Members.
Notwithstanding the foregoing provisions of this Section 12.4,
(a) the TMP shall not take any actions permitted under this
Agreement in its capacity as the TMP unless it obtains the
consent of ASE and (b) if CEP is no longer a Member Manager by
reason of the provisions of Section 4.1, then ASE shall become
the TMP.
SECTION 12.5. Headings. Section and other headings
contained in this Agreement are for reference purposes only and
are not intended to describe, interpret, define or limit the
scope or intent of this Agreement or any provision hereof.
SECTION 12.6. Additional Acts. Each Member agrees to
perform all further acts, including to execute, acknowledge and
deliver any documents, that may be reasonably necessary to carry
out the provisions of this Agreement.
SECTION 12.7. Notices. All notices and other
communications under this Agreement shall be in writing and may
be given by any of the following methods: (a) personal delivery;
(b) facsimile transmission; (c) registered or certified mail,
postage prepaid, return receipt requested; or (d) overnight
delivery service. Notices shall be sent to the appropriate party
at its or his address or facsimile number given below (or at such
other address or facsimile number for that party as shall be
specified by notice given under this Section 12.7):
if to CEP or Chef, to it at:
Charterhouse Equity Partners II, L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mr. A. Xxxxxxxx Xxxxx
Fax: 000-000-0000
with a copy to:
Proskauer Xxxx Xxxxx & Xxxxxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Fax: 000-000-0000
if to Simon or ASE, to him or it at:
0000 Xxxxxxxx
Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Fax: 000-000-0000
with copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Fax: 000-000-0000
and
Xxxxx Xxxxxx Xxxxxxxxx Xxxxx Tischman
Xxxxxxx & Gross, P.A.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Fax: 000-000-0000
If to Xxxxxx, to him at:
Xxxxxxx X. Xxxxxx
00 Xxxxxxx Xxxxx (Xxxxx 0-X)
Xxxxx Xxxxxx, Xxx Xxxx 00000
Fax: 000-000-0000
with a copy to:
Xxxxx Xxxxxx Xxxxxxx & Bull
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, III, Esq.
Fax: 000-000-0000
if to any Xxxxxx, to him or her at:
Xxxxxx X. Xxxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Fax: 000-000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Fax: 000-000-0000
All such notices and communications shall be deemed received upon
(i) actual receipt by the addressee, (ii) actual delivery to the
appropriate address or (iii) in the case of a facsimile
transmission, upon transmission by the sender and issuance by the
transmitting machine of a confirmation slip confirming the number
of pages constituting the notice have been transmitted without
error. In the case of notices sent by facsimile transmission,
the sender shall contemporaneously mail a copy of the notice to
the addressee at the address provided for above. Such mailing
shall in no way alter the time at which the facsimile notice is
deemed received.
SECTION 12.8. Complete Agreement. This Agreement
constitutes the complete agreement among the Members with regard
to the subject matter hereof and supersedes all prior written and
oral statements, discussions, and agreements relating to the
subject matter hereof.
SECTION 12.9. Effect of Non-Public Information.
Anything to the contrary notwithstanding contained in this
Agreement and without limiting the generality of Section 12.12
hereof, neither the Company nor any Member (including, without
limitation any Member Manager) shall have any obligation to
disclose to any Member requesting a sale pursuant to Sections
11.4 or 11.5 hereof and/or any Member causing the exercise of
registration rights hereunder any information of any kind or
nature whatsoever in its or his possession or to which it or he
otherwise has access which does or may cause it or him to believe
that the selling price of the Shares would or may in the future
be higher (including, without limitation whether or not this
information is non-public information and whether or not known to
any such Member (including without limitation any Member Manager)
or the Company by reason of any individual being an officer
and/or director of any Member and/or officer and/or director of
the Issuer).
SECTION 12.10. No Set-Offs. The Company's obligation
to make the distributions of the Proceeds provided for in this
Agreement in connection with the sale of Shares (including,
without limitation in connection with each of (i) the initial
public offering of Designer Holdings, Ltd., (ii) sales effected
at such Member's request pursuant to Rule 144, and (iii) sales
effected at a Member's request pursuant to a demand registration
right or piggy back registration right, shall not be subject to
any set-off, counterclaim, withholding or other offset of any
kind or nature whatsoever (collectively, "Setoff or Withholding")
by the Company or any other Member (it being agreed that to the
extent that the Company or any other Member has any cause of
action or other claim against any such Member entitled to such
proceeds, it or he shall bring any such cause of action or claim
independently). Accordingly, neither the Company nor any Member
shall directly or indirectly attempt, through legal process or
otherwise, to cause any Setoff or Withholding of any Required
Distributions payable to any other Member. For the purposes of
this Section 12.10, any distribution referred to in the next
preceding sentence is herein referred to as a "Required
Distribution". Without limiting the generality of Section 12.11
hereof, the Members agree that the provisions of the first
sentence of this Section 12.10 shall be specifically enforceable
in full and that neither the Company nor any other Member shall,
among other things, assert that monetary damages in connection
with any such cause of action or other claims would constitute a
sufficient remedy. In the event that the Company and/or any
Member breaches the provisions of this Section 12.10 and causes
(notwithstanding any provisions of this Section 12.10) or
attempts to cause any Setoff or Withholding of any Required
Distributions then in addition to such Member's right to
ultimately receive the Required Distribution, and the
indemnification rights set forth in Section 12.15 hereof
(including, without limitation, any attorneys' fees incurred in
enforcing all of its or his rights under this Agreement), the
party breaching this Section 12.10 (whether the Company or any
one or more Members) shall pay to the Member entitled to such
Required Distribution the sum of (a) interest from the date such
Member is entitled to the Required Distribution to the time such
Requesting Member receives such Required Distribution at the
prime rate announced from time to time by Citibank, N.A. or its
successor plus 4% and (b) as liquidated damages, and not as a
penalty, as a reasonable estimate for the potential loss that
such Member entitled to receive the Required Distribution may
suffer, twenty percent (20%) of all Required Distributions which
the Company and/or any other Member attempts to prevent the
Member entitled to receive the Required Distribution from
receiving.
SECTION 12.11. Specific Performance; Remedies.
Without limiting the rights of each party hereto to pursue any
and all legal and equitable rights available to such party for
any other parties' failure to perform its or his obligations
under this Agreement, the parties hereto acknowledge and agree
that a remedy at law for any breach of or other failure to
perform such obligations hereunder may be inadequate and that the
Company and each Member shall be entitled to specific
performance, injunctive relief or other equitable remedies in the
event of any such breach or other failure. Without limiting the
generality of the preceding sentence, such sentence shall apply
specifically to all of Article XI hereof. All rights and
remedies of the parties hereto under any provision of this
Agreement shall be in addition to any other rights and remedies
provided for by any law or equity, all rights and remedies
contemplated in the preceding clause shall be independent and
cumulative, and may, to the extent permitted by law, be exercised
concurrently or separately, and the exercise of any one right or
remedy shall not be deemed to be an election of such right or
remedy or to preclude or waive the exercise of any other right or
remedy.
SECTION 12.12. Other Activities of the Members. The
Members acknowledge that Simon is the President, sole director
and sole shareholder of Apparel Ventures, Inc., a New Jersey
corporation, the managing member of ASE one of the two Member
Managers of the Company and that Simon is the CEO of Designer
Holdings, Ltd. The Members and/or their Affiliates may engage in
any business or activity they choose, whether or not competitive
with any business or activity of the Company, the Issuer or any
of their respective subsidiaries (including that none of the
Company, any of its subsidiaries or any Member shall have any
right, title or interest in or to any such business or activity)
provided that nothing contained herein shall release Simon from
any obligations he may have to Designer Holdings, Ltd. under his
employment agreement. Without limiting the generality of the
preceding sentence, all conflicts of interest of any kind or
nature of each Member Manager and each other Member are hereby
waived including that ASE may direct the Company to vote Shares
on matters as to which Simon is personally interested.
Involvement in any activity described in this Section 12.12 shall
not in any manner preclude the application of the provisions of
Section 10.1 hereof or indemnification under Section 10.2 hereof.
SECTION 12.13. Termination of Investment Agreement.
The Investment Agreement is hereby terminated in all respects
except that, as between Simon and CEP, the provisions of section
10 of the Investment Agreement shall survive to the extent set
forth in such section 10, provided that (a) each of CEP and Simon
agrees that it or he shall not make any claim against the other
pursuant to such section 10 on the basis of facts that it or he
is now actually aware of and (b) it is confirmed and agreed that
claims can only be brought under section 10 against Simon based
upon the representations and warranties contained in sections
9.2.1, 9.2.2, 9.2.3, 9.2.5, 9.2.8, 9.2.21 and 9.2.23 of the
Investment Agreement and that the right to bring claims under
such seven sections shall nevertheless expire on August 4, 1997
except to the extent a claim therefor under such seven sections
is asserted by CEP in a notice delivered to Xxxxx xxxxx to August
4, 1997. It is understood that all representations and
warranties referred to in the preceding sentence were made as of
August 4, 1994.
SECTION 12.14. No Other Restrictions and Dispositions
of Shares. Without the prior unanimous written consent of the
Member Managers, the Company agrees not to enter into any
agreement to not sell or otherwise transfer any of the Shares
except for the lockups provided for in the Registration Rights
Agreement.
SECTION 12.15. Indemnification. The Company and each
Member shall indemnify, defend and hold harmless the Company and
each other Member from and against any and all Losses arising
from or otherwise relating to any breach of this Agreement by the
Company or by such Member.
IN WITNESS WHEREOF, the undersigned have duly executed
this Third Amended and Restated Limited Liability Company
Agreement as of the date first above written.
_________________________
Xxxxxx X. Xxxxx
CHARTERHOUSE EQUITY PARTNERS II, L.P.
By: CHUSA EQUITY INVESTORS II, L.P.,
General Partner
By: CHARTERHOUSE EQUITY II, INC.,
General Partner
_________________________
Attorney-in-Fact
CHEF NOMINEES LIMITED
______________________________
Name:
Title:
A.S. ENTERPRISES, L.L.C.
By: APPAREL VENTURES, INC.,
its General Manager
By:_________________________
Name:
Title:
______________________________
Xxxxxx X. Xxxxxx
______________________________
Xxxxxxx Xxxx Xxxxxx
______________________________
Xxxxxx X. Xxxxxx
______________________________
Xxxx X. Xxxxxx as Trustee f/b/o
Xxxxxx X. Xxxxxx and Xxxx X. Xxxxxx
______________________________
Xxxxxxx X. Xxxxxx
SCHEDULE A
OWNERSHIP OF INTERESTS
Percentage
Name of Member Interest
Charterhouse Equity Partners II, L.P 49.900%
Chef Nominees Limited 0.100%
Xxxxxx X. Xxxxx 44.85%
A.S. Enterprises, L.L.C. 1.25%
Xxxxxx X. Xxxxxx 0.875%
Xxxxxxx Xxxx Xxxxxx 0.318%
Xxxxxx X. Xxxxxx 0.330%
Xxxx X. Xxxxxx as Trustee f/b/o
Xxxx X. Xxxxxx and Xxxxxx X. Xxxxxx 0.977%
Xxxxxxx X. Xxxxxx 1.400%
SCHEDULE B
ALLOCATED SHARES
Number of
Name of Member Shares
Charterhouse Equity Partners II, L.P. 12,092,700
Chef Nominees Limited 24,234
Xxxxxx X. Xxxxx 10,868,889
AS Enterprises, LLC 302,924
Xxxxxx X. Xxxxxx 212,046
Xxxxxxx Xxxx Xxxxxx 77,064
Xxxxxx X. Xxxxxx 79,972
Xxxx X. Xxxxxx as Trustee f/b/o
Xxxx X. Xxxxxx and Xxxxxx X. Xxxxxx 236,765
Xxxxxxx X. Xxxxxx 339,274
SCHEDULE C
SHARES TO BE SOLD IN THE INITIAL PUBLIC OFFERING:
Number of
Name of Member Shares
Charterhouse Equity Partners II, L.P. 3,421,000
Chef Nominees Limited 7,000
Xxxxxx X. Xxxxx 2,305,000
Xxxxxx X. Xxxxxx 59,750
Xxxxxxx Xxxx Xxxxxx 21,900
Xxxxxx X. Xxxxxx 22,500
Xxxx X. Xxxxxx as Trustee f/b/o
Xxxx X. Xxxxxx and Xxxxxx X. Xxxxxx 66,850
Xxxxxxx X. Xxxxxx 96,000
SHARES TO BE SOLD PURSUANT TO THE OVER-ALLOTMENT OPTIONS:
Number of
Name of Member Shares
Charterhouse Equity Partners II, L.P. 637,900
Chef Nominees Limited 1,300
Xxxxxx X. Xxxxx 461,000
Xxxxxx X. Xxxxxx 11,150
Xxxxxxx Xxxx Xxxxxx 4,080
Xxxxxx X. Xxxxxx 4,200
Xxxx X. Xxxxxx as Trustee f/b/o
Xxxx X. Xxxxxx and Xxxxxx X. Xxxxxx 12,470
Xxxxxxx X. Xxxxxx 17,900
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
SECTION 1.1. Definitions . . . . . . . . . . . . . . 2
ARTICLE II GENERAL PROVISIONS
SECTION 2.1. Effectiveness of the Agreement. . . . . . 8
SECTION 2.2. Continuation. . . . . . . . . . . . . . . 8
SECTION 2.3. Company Name. . . . . . . . . . . . . . 9
SECTION 2.4. Registered Office; Registered Agent . . 9
SECTION 2.5. Nature of Business Permitted; Powers. . 9
SECTION 2.6. Business Transactions of a Member
with the Company. . . . . . . . . . . . 9
SECTION 2.7. Fiscal Year . . . . . . . . . . . . . . 10
SECTION 2.8. Term. . . . . . . . . . . . . . . . . . 10
SECTION 2.9. No State-Law Partnership. . . . . . . . 10
SECTION 2.10. Election to be Treated as Partnership . 10
ARTICLE III MEMBERS
SECTION 3.1. Admission of Members. . . . . . . . . . 11
SECTION 3.2. Classes and Voting. . . . . . . . . . . 11
SECTION 3.3. Certificates. . . . . . . . . . . . . . 11
SECTION 3.4. Capital Contribution. . . . . . . . . . 12
SECTION 3.5. Capital Accounts. . . . . . . . . . . . 14
SECTION 3.6. Liability of Members. . . . . . . . . . .15
SECTION 3.7. Access to and Confidentiality of
Information; Records. . . . . . . . . . 15
SECTION 3.8. Meetings of Members . . . . . . . . . . 15
SECTION 3.9. Representations and Warranties. . . . . 16
ARTICLE IV GOVERNANCE
SECTION 4.1. Member Managers . . . . . . . . . . . . 17
SECTION 4.2. Certain Actions . . . . . . . . . . . . 17
ARTICLE V DISTRIBUTIONS; ALLOCATIONS; AND INTERESTS
SECTION 5.1. Distributions. . . . . . . . . . . . . . 19
SECTION 5.2. Allocation of Profit and Loss. . . . . . 20
SECTION 5.3. Special Allocations to Capital
Accounts . . . . . . . . . . . . . . . .21
SECTION 5.4. Allocation of Income and Loss and
Distributions in Respect of
Interests Transferred . . . . . . . . . .23
ARTICLE VI DISTRIBUTION
SECTION 6.1. Distribution in Kind. . . . . . . . . . 24
ARTICLE VII RESTRICTIONS ON TRANSFER GENERALLY
SECTION 7.1. Transfers to be Made Only as Permitted
or Required by this Agreement . . . . . 25
SECTION 7.2. Permitted Transfers . . . . . . . . . . 25
SECTION 7.3. No Transfers. . . . . . . . . . . . . . 26
ARTICLE VIII DISSOLUTION
SECTION 8.1. Dissolution Events. . . . . . . . . . . 27
SECTION 8.2. Votes of Members. . . . . . . . . . . . 28
SECTION 8.3. Termination and Winding Up of the
Company . . . . . . . . . . . . . . . . 28
ARTICLE IX REPORTS
SECTION 9.1. Form K-l. . . . . . . . . . . . . . . . 29
SECTION 9.2. Books and Records . . . . . . . . . . . 29
SECTION 9.3. Bank Accounts . . . . . . . . . . . . . 30
SECTION 9.4. Other Information . . . . . . . . . . . 30
ARTICLE X EXCULPATION AND INDEMNIFICATION
SECTION 10.1. Exculpation . . . . . . . . . . . . . . 30
SECTION 10.2. Indemnification . . . . . . . . . . . . 30
ARTICLE XI THE COMPANY'S REGISTRATION RIGHTS RELATING TO
SHARES OF DESIGNER HOLDINGS AND RELATED
RULE 144 SALES
SECTION 11.1. Registration Rights Agreement . . . . . 33
SECTION 11.2. Exercise of Piggyback Registration
Rights . . . . . . . . . . . . . . . . . 36
SECTION 11.3. Exercise of Demand Registration Rights . 37
SECTION 11.4. Initiation of a Rule 144 Sale. . . . . . 41
SECTION 11.5. Individual, Private Sale . . . . . . . . 42
SECTION 11.6. Reduction of Allocated Shares . . . . . 42
SECTION 11.7 Permitted Pledges. . . . . . . . . . . . 43
ARTICLE XII MISCELLANEOUS
SECTION 12.1. Amendments . . . . . . . . . . . . . . . 44
SECTION 12.2. Successors; Counterparts . . . . . . . . 45
SECTION 12.3. Governing Law; Severability. . . . . . . 45
SECTION 12.4. Filings; Tax Matters Partner . . . . . . 46
SECTION 12.5. Headings . . . . . . . . . . . . . . . . 47
SECTION 12.6. Additional Acts. . . . . . . . . . . . . 47
SECTION 12.7. Notices. . . . . . . . . . . . . . . . . 47
SECTION 12.8. Complete Agreement.. . . . . . . . . . . 49
SECTION 12.9 Effect of Non-Public Information . . . . 49
SECTION 12.10 No Set-Offs . . . . . . . . . . . . . . 50
SECTION 12.11 Specific Performance; Remedies. . . . . 51
SECTION 12.12 Other Activities of the Members . . . . 51
SECTION 12.13 Termination of Investment Agreement . . .52
SECTION 12.14 No Other Restrictions and Dispositions
of Shares. . . . . . . . . . . . . . . . 52
SECTION 12.15 Indemnification . . . . . . . . . . . . .53
________________________________________________________________
THIRD AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
NEW RIO, L.L.C.
Dated as of May 9, 1996
________________________________________________________________
