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EXHIBIT 10.13
OPERATING AGREEMENT
OF
NOTICOM INTERNATIONAL, LLC
Effective as of July 22, 1998
LIMITED LIABILITY COMPANY INTERESTS IN NOTICOM INTERNATIONAL, LLC HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS ("THE STATE ACTS") AND HAVE BEEN
SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND THE STATE ACTS, INCLUDING PARAGRAPH (13) OF CODE SECTION
10-5-9 OF THE GEORGIA SECURITIES ACT OF 1973, AS AMENDED, SECTIONS 409.402(B)(9)
AND (10) OF THE MISSOURI UNIFORM SECURITIES ACT, AND SECTION 4(2) OF THE
SECURITIES ACT. THE LIMITED LIABILITY COMPANY INTERESTS HAVE BEEN ACQUIRED FOR
INVESTMENT PURPOSES ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED,
SOLD OR TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND CONDITION OF THIS
AGREEMENT AND IN A TRANSACTION WHICH IS EITHER EXEMPT FROM REGISTRATION UNDER
THE SECURITIES ACT AND THE STATE ACTS OR PURSUANT TO AN EFFECTIVE REGISTRATION
UNDER THE SECURITIES ACT AND THE STATE ACTS.
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TABLE OF CONTENTS
Page
ARTICLE I
FORMATION................................................................................................1
1.1 Organization....................................................................................1
1.2 Agreement.......................................................................................1
1.3 Name............................................................................................1
1.4 Articles of Organization........................................................................1
1.5 Term............................................................................................1
1.6 Registered Agent and Office.....................................................................1
1.7 Principal Office................................................................................1
1.8 Persons Considered to be Members................................................................2
1.9 Units...........................................................................................2
1.9.1 Class A Membership Units...............................................................2
1.9.2 Class B Membership Units...............................................................2
1.9.3 Initial Ownership. ...................................................................2
ARTICLE II
NATURE OF BUSINESS.......................................................................................3
ARTICLE III
ACCOUNTING AND RECORDS...................................................................................3
ARTICLE IV
RIGHTS AND DUTIES OF MANAGERS AND MEMBERS................................................................3
4.1 Board of Managers...............................................................................3
4.2 Authority of Managers to Bind the Company.......................................................3
4.3 When Majority Consent of Voting Members Required...............................................4
4.4 When Supermajority Consent of Voting Members Required...........................................4
4.5 Meetings. .....................................................................................5
4.6 Minutes.........................................................................................6
4.7 Managers and Members Shall Have No Exclusive Duty To Company....................................6
4.8 Officers........................................................................................6
4.9 Delegation......................................................................................6
4.10 Accounts........................................................................................6
4.11 Duties; Liability for Certain Acts..............................................................6
4.12 General Authority...............................................................................6
ARTICLE V
LIABILITY OF MEMBERS.....................................................................................7
5.1 Limitation of Liability.........................................................................7
5.2 Representations and Warranties..................................................................7
ARTICLE VI
CAPITAL CONTRIBUTIONS....................................................................................7
6.1 Initial Capital Contributions...................................................................7
6.2 Required Capital Contributions..................................................................8
6.3 Additional Capital Contributions................................................................8
6.4 Right to Raise Additional Capital...............................................................9
6.4.1 Issuance of Units......................................................................9
6.4.2 Additional Members.....................................................................9
6.5 Loans to the Company............................................................................9
6.6 Limits on Additional Capital Contributions and Loans............................................9
6.7. Maintenance of Capital Accounts.................................................................9
6.7.1 Distributions of Property.............................................................10
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6.7.2 Adjustments...........................................................................10
6.7.3 Compliance with Treasury Regulations..................................................10
ARTICLE VII
ALLOCATIONS AND DISTRIBUTIONS...........................................................................10
7.1 Allocations of Tax Profits and Tax Losses......................................................10
7.2. Built-in Gains and Built-in Losses.............................................................11
7.3. Regulatory Allocations.........................................................................11
7.4 Mechanics of Allocations.......................................................................12
7.5 Cash Distributions.............................................................................13
7.5.1 Quarterly Tax Distributions...........................................................13
7.5.2 Other Distributions...................................................................13
7.5.3 Timing................................................................................14
7.5.4 Fees; Reimbursements..................................................................14
7.5.5 Distributions Upon Dissolution........................................................14
7.5.6 Distributions After the Fiscal Year End...............................................14
7.5.7 Withholding...........................................................................14
7.5.8 Consent to Distributions..............................................................14
7.6 Survival of Certain Distribution Rights........................................................14
ARTICLE VIII
TAXES...................................................................................................15
8.1 Elections......................................................................................15
8.2 Taxes of Taxing Jurisdictions..................................................................15
ARTICLE IX
TRANSFER OF MEMBERSHIP INTERESTS........................................................................15
9.1 Restrictions on Transfer.......................................................................15
9.2 Call Option....................................................................................15
9.3 Successors in Interest.........................................................................16
9.4 Assignment of Economic Rights..................................................................16
9.5 Conditions for Transfer........................................................................17
9.6 Retroactive Allocations........................................................................17
9.7 Redemption of Class B Units....................................................................18
ARTICLE X
DISPUTES................................................................................................18
10.1 Dispute Resolution.............................................................................18
10.2 Major Disputes.................................................................................18
ARTICLE XI
DISSOCIATION OF A MEMBER................................................................................18
11.1 Dissociation...................................................................................18
11.2 Rights of Dissociated Member...................................................................19
ARTICLE XII
DISSOLUTION AND WINDING UP..............................................................................19
12.1 Dissolution....................................................................................19
12.2 Effect of Dissolution..........................................................................19
12.3 Distribution of Assets on Dissolution..........................................................19
12.4 Completion of Winding Up; Certificate of Dissolution...........................................21
12.5 Further Assurances.............................................................................21
ARTICLE XIII
INDEMNIFICATION.........................................................................................21
13.1 Indemnification of Members, Managers and Officers..............................................21
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13.2 Discretionary Indemnification of Employees.....................................................21
13.3 Determination of Indemnitee's Compliance with Standard of Conduct..............................21
13.4 Advance Payment of Expenses....................................................................21
13.5 Non-Exclusivity; Survival of Indemnification...................................................21
13.6 Insurance on Indemnitees.......................................................................22
13.7 Interpretation.................................................................................22
ARTICLE XIV
SPECIAL COVENANTS.......................................................................................22
14.1 Conflicting Interest Transactions..............................................................22
14.2 Managers and Members Shall Have No Exclusive Duty To Company...................................22
ARTICLE XV
MISCELLANEOUS PROVISIONS................................................................................22
15.1 No Partnership Intended, Except for Tax Purposes...............................................22
15.2 Rights of Creditors and Third Parties under Agreement..........................................23
15.3 Miscellaneous Provisions. .....................................................................23
15.3.1 Entire Agreement....................................................................23
15.3.2 Application of Georgia Law..........................................................23
15.3.3 Construction........................................................................23
15.3.4 Headings............................................................................23
15.3.5 Waivers.............................................................................23
15.3.6 Rights and Remedies Cumulative......................................................23
15.3.7 Severability........................................................................23
15.3.8 Heirs, Successors and Assigns.......................................................23
15.3.9 Counterparts; Copies................................................................23
15.3.10 Amendments..........................................................................23
15.3.11 Notices.............................................................................24
15.3.12 No Engagement of Services...........................................................24
15.3.13 Representations and Warranties......................................................24
15.3.14 Force Majeure.......................................................................24
15.4 Definitions....................................................................................24
15.4.1 "Advance Notification System".......................................................24
15.4.2 "Affiliate".........................................................................24
15.4.3 "Appraised Value" ..................................................................24
15.4.4 "Assignment Agreements".............................................................25
15.4.5 "Built-in Gains"....................................................................25
15.4.6 "Built-in Losses"...................................................................25
15.4.7 "BusCall"...........................................................................25
15.4.8 "BusCall Agreement".................................................................25
15.4.9 "Cash and Cash Equivalents".........................................................25
15.4.10 "Class A Membership Units"..........................................................25
15.4.11 "Class B Membership Units"..........................................................25
15.4.12 "Code" and "Regulations"............................................................25
15.4.13 "Company"...........................................................................25
15.4.14 "Deadlock Event"....................................................................25
15.4.15 "Development Services"..............................................................26
15.4.16 "Distributable Cash"................................................................26
15.4.17 "Fair Value"........................................................................26
15.4.18 "Field".............................................................................27
15.4.19 "Fiscal Year".......................................................................27
15.4.20 "Global Preference Percentage"......................................................27
15.4.21 "Intellectual Property".............................................................27
15.4.22 "License Agreement".................................................................27
15.4.23 "Majority in Interest"..............................................................27
15.4.24 "Managers"..........................................................................27
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15.4.25 "Manufacturing Agreement"...........................................................27
15.4.26 "Market Value"......................................................................27
15.4.27 "Member"............................................................................28
15.4.28 "Membership Interest"...............................................................28
15.4.29 "Membership Units"..................................................................28
15.4.30 "Preferred Global Return"...........................................................28
15.4.31 "Preferred Global Allocation Balance"...............................................28
15.4.32 "Preferred Global Distribution Balance".............................................28
15.4.33 "Property"..........................................................................28
15.4.34 "Purchase Agreement"................................................................28
15.4.35 "Reserves"..........................................................................29
15.4.36 "Successor in Interest".............................................................29
15.4.37 "Supermajority in Interest of the Voting Members"...................................29
15.4.38 "Tax Profits" and "Tax Losses"......................................................29
15.4.39 "Technology"........................................................................29
15.4.40 "Technology Agreement"..............................................................29
15.4.41 "Transfer"..........................................................................29
15.4.42 "Voting Members"....................................................................29
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OPERATING AGREEMENT
OF
NOTICOM INTERNATIONAL, LLC
THIS OPERATING AGREEMENT FOR NOTICOM INTERNATIONAL, LLC (the "Agreement")
is made and entered into this 22nd day of July, 1998, by and among NOTICOM
INTERNATIONAL, LLC, a Georgia limited liability company (the "Company"), GLOBAL
RESEARCH SYSTEMS, INC., a Georgia corporation ("Global"), and XXXXXXX, INC., a
Missouri corporation ("XxXxxxx") (with each of Global, XxXxxxx and each other
individual or entity executing this Agreement together with each and every other
member hereafter admitted to the Company as such being hereinafter individually
referred to as a "Member" and collectively referred to as the "Members").
ARTICLE I
FORMATION
1.1 Organization. The Members hereby organize the Company as a Georgia
limited liability company pursuant to the provisions of the Georgia Limited
Liability Company Act set forth under O.C.G.A. Sections 00-00-000, et. seq. (the
"Act").
1.2 Agreement. For and in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Members hereby agree to the
terms and conditions of the Agreement, as it may from time to time be amended
according to its terms.
1.3 Name. The name of the Company is NOTICOM INTERNATIONAL, LLC. All
business of the Company shall be conducted under its legal name or under such
fictitious or assumed business names as may be determined by the Members.
1.4 Articles of Organization. Articles of Organization (as so filed and as
hereafter duly amended, the "Articles"), for the Company were filed on July 2,
1998 with the Secretary of State of Georgia. The Members agree to execute such
further documents (including amendments to the Articles of Organization) and
take such further action as is appropriate to comply with the requirements of
law for the formation or operation of a limited liability company in all states,
countries and other jurisdictions where the Company may conduct its business.
1.5 Term. The Company shall be dissolved and its affairs wound up in
accordance with the Act and the Agreement upon either (i) the termination of the
License Agreement (in which event the Company shall be dissolved in accordance
with the applicable provisions of Article Twelve of this Agreement) or (ii) the
dissolution of BusCall, unless the term shall be extended by amendment to this
Agreement and the Articles, or unless the Company shall be sooner dissolved and
its affairs wound up in accordance with the Act or this Agreement.
1.6 Registered Agent and Office. The Company's initial registered office
shall be at the office of its registered agent at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxx
Xxxxx, Xxxx Xxxxxxx 00000
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the name of its initial registered agent at such address is Xxxx X. Xxxxxx III.
The registered office and registered agent may be changed from time to time by
filing the address of the new registered office and/or the name of the new
registered agent with the Secretary of State of Georgia pursuant to the Act and
the applicable rules promulgated thereunder.
1.7 Principal Office. The principal office of the Company shall be located
in Destin, Florida.
1.8 Persons Considered to be Members. "Member" means a person who has
agreed to be bound by this Agreement and who has been admitted as a member of
the Company pursuant to the Act and this Agreement, but excludes a Dissociated
Member. The names and addresses of the initial Members are set forth below each
such Member's signature to this Agreement.
1.9 Units. The Company shall be authorized to issue two (2) separate
classes of Membership Units representing ownership interests in the Company
namely the Class A Membership Units and the Class B Membership Units each which
class of Membership Units shall have those relative rights set forth below.
1.9.1 Class A Membership Units. All of the voting rights and authority
with respect to the Company and its operations including all rights to vote,
control and participate in the management of the Company and its capital,
operations and profits, appoint, elect and remove any Managers who may be
responsible for managing the affairs and operations of the Company, and
otherwise decide upon any matter or thing whatsoever affecting the Company and
its operations shall be vested in the Members owning the Class A Membership
Units. No individual or entity holding or having claim to any Class A Membership
Units shall be entitled to exercise any voting rights attributable thereto
unless and until such individual or entity is admitted as a Member of the
Company in accordance with the provisions of this Agreement. Each Class A
Membership Unit shall be entitled to cast one vote and, unless otherwise
specifically provided herein, a majority by number of the votes entitled to be
cast shall control and determine the matter at issue. The Company shall not
issue fractional shares of any Class A Membership Unit. No other Membership
Units issued by the Company (including without limitation Class B Membership
Units) shall be entitled to exercise any voting rights with respect to the
Company or its operations. The owners of the Class A Membership Units shall be
entitled to all notices of all meetings of the Members and shall be entitled to
vote on all questions or issues that may be presented to and decided upon by the
Members of the Company. Except as to voting rights or any other differentiation
or restriction expressly made applicable to the Class A Membership Units
hereunder, the rights of the owners of the Class A Membership Units shall be the
same in all respects to the rights of the owners of all other Membership Units
(including without limitation Class B Membership Units) hereunder such rights to
include the right to receive distributions and allocations hereunder.
1.9.2 Class B Membership Units. The Company shall not issue fractional
shares of any Class B Membership Unit. The Class B Membership Units shall not be
entitled to exercise any voting rights with respect to the Company or its
operations or the election or removal of the Company's Managers it being
expressly intended and understood that such voting rights shall be exclusively
vested in the Class A Membership Units. The owners of the Class B Membership
Units shall not be entitled to any notices of any meetings of the Members and
shall not be entitled to participate in such meetings or to vote on any
questions or issues that may be presented to and decided upon by the Members of
the Company. Except as to voting rights or any other differentiation or
restriction expressly made applicable to the Class B Membership
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Units hereunder, the rights of the owners of the Class B Membership Units shall
be the same in all respects to the rights of the owners of all other Membership
Units (including without limitation Class A Membership Units) hereunder such
rights to include the rights to receive distributions and allocations hereunder.
No individual or entity holding or having claim to any Class B Membership Units
shall be entitled to exercise or receive any rights attributable thereto unless
and until such individual or entity is admitted as a Member of the Company in
accordance with the provisions of this Agreement.
1.9.3 Initial Ownership. Initially, the following Members shall own
the following number of Membership Units in the Company:
Class A Class B
Member Membership Units Membership Units
------ ---------------- ----------------
XxXxxxx 1,000 -0-
Global 1,000 -0-
ARTICLE II
NATURE OF BUSINESS
The Company may engage in any lawful business permitted by the Act or the
laws of any jurisdiction in which the Company may do business. The Company shall
have the authority to do all things necessary or convenient to accomplish its
purpose and operate its business.
ARTICLE III
ACCOUNTING AND RECORDS
The Company shall maintain at its principal office such records as may be
required by the Act or other applicable laws.
ARTICLE IV
RIGHTS AND DUTIES OF MANAGERS AND MEMBERS
4.1 Board of Managers. Management of the operations of the Company shall
be conducted by a Board of Managers which Board of Managers shall act through or
with the affirmative approval or consent of a Majority in Interest of the Board
of Managers. The Voting Members shall appoint a Board of Managers comprised of
six (6) individuals, or such greater or lesser number unanimously agreed to by
all Voting Members which shall in all events be an even number. One-half (1/2)
of the total number of members of the Board of Managers shall be appointed by
Global and one-half (1/2) of the total number of members of the Board of
Managers shall be appointed by XxXxxxx. Any Manager of the Company may resign at
any time by giving thirty (30) days' written notice to the Voting Members of the
Company. The resignation of any Manager shall take effect upon receipt of notice
thereof or at such later time as shall be specified in such notice; and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective. In the event of the withdrawal, resignation or
removal of any member of the Board of Managers, the Member initially selecting
and nominating such Manager shall select and nominate the successor to such
Manager. All Voting Members agree to vote their Class A Membership Units in the
Company so as to cause the Board of Managers to
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consist of those individuals nominated by Global and XxXxxxx in conformity with
the foregoing sentence. The initial Board of Managers shall be:
MANAGER APPOINTED BY:
------- -------------
Xxxxx X. XxXxxxx XxXxxxx
Xxxxxxx X. Xxxxxxx XxXxxxx
Xxxxxx Xxxxxxx XxXxxxx
M. Xxxxx Xxxxx Global
Xxxx X. Xxxxx Global
Xxxxx Xxxx Global
4.1.1 The provisions of Section 4.1 notwithstanding, if either Global
or XxXxxxx (a "party") should own more than 50% of all the issued and
outstanding Class A Membership Units of the Company then the Board of Managers
shall be comprised of seven (7) members. The party with the controlling interest
shall appoint such seventh member of the Board of Managers. This seventh
position shall exist only at such time as the ownership is not equal and one of
the parties has the controlling interest.
4.2 Authority of Managers to Bind the Company. Except as otherwise set
forth in the Agreement, the Board of Managers shall have the authority to bind
the Company, and exercise such authority through officers, agents or committees
of the Company designated by the Board of Managers and approved by a Majority in
Interest of the Voting Members (but with respect to agents or committees, only
to the extent of the authority granted). In particular and without limitation,
the Board of Managers has the authority to do any of the following:
4.2.1 Institute, prosecute and defend any proceeding in the Company's
name.
4.2.2 Purchase, receive, lease or otherwise acquire, and sell, convey,
mortgage, pledge, lease, exchange, and otherwise dispose of Company Property
provided that the dollar amount of such transaction or the value of Company
Property involved in such transactions does not exceed limits set by a Majority
in Interest of the Voting Members from time to time.
4.2.3 Enter into contracts and guaranties, incur liabilities, borrow
money, issue notes, bonds and other obligations, and secure any of its
obligations by mortgage or pledge of any of the Company's Property or income
provided that the dollar amount of such transaction or the value of property
involved in such transactions does not exceed limits set by a Majority in
Interest of the Voting Members from time to time.
4.2.4 Manage and operate any Company Property.
4.2.5 Establish Company offices and exercise the powers of the Company
within or without the State of Georgia or any other jurisdiction in which the
Company conducts business.
4.2.6 Purchase insurance for the benefit of the Company.
4.2.7 Make donations to the public welfare or for religious,
charitable,
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scientific, literary or educational purposes provided that the amount of such
donations does not exceed limits set by a Majority in Interest of the Voting
Members from time to time.
4.2.8 Generally do any other act that furthers the business and
affairs of the Company that is not expressly required by the Agreement or
applicable law to be approved by all or a Majority in Interest of the Voting
Members.
4.3 When Majority Consent of Voting Members Required. Notwithstanding any
other provision of the Agreement other than a provision requiring the approval
of any act by a larger number of the Voting Members, the affirmative vote or
written consent of a Majority in Interest of the Voting Members shall be
required to approve any of the following actions:
4.3.1 The authorization of any indemnification pursuant to Article
XIII, other than the mandatory indemnification provided in Section 13.1.
4.3.2 Lending the Company's money, investing and reinvesting the
Company's funds, and receiving and holding property as security for repayment of
indebtedness owed to the Company, provided that no money shall be loaned to
Members other than as advances for business expenses to be incurred in the
ordinary course of business of the Company.
4.3.3 Causing the Company to invest in corporations, partnerships,
joint ventures, limited liability companies or other associations of any kind
with any person or persons.
4.3.4 Causing the Company to establish capital and operating budgets.
4.4 When Supermajority Consent of Voting Members Required. Notwithstanding
any other provision of the Agreement, the affirmative vote or written consent of
a Supermajority in Interest of the Voting Members shall be required to approve
any of the following actions:
4.4.1 Except as otherwise specifically provided under Section 6.2 of
this Agreement, the call for additional capital contributions, or the issuance
of additional Membership Units to any one or more Members.
4.4.2 Other than as required under this Agreement or the Technology
Agreement, granting to any third party or parties any rights or interest in or
disclosing any information concerning any patents, trade secrets, know-how,
trademarks, trade names or copyrights in which the Company holds any interest,
other than the marketing of Products and Technology to customers or the
development of Products or Technology in the ordinary course of business.
4.4.3 The continuation of the Company after a Dissolution Event (as
defined herein).
4.4.4 The amendment of this Agreement.
4.4.5 The merger or consolidation of the Company with another entity.
4.4.6 The dissolution and liquidation of the Company other than as the
result of a Dissolution Event.
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4.4.7 The sale of substantially all the Property of the Company.
4.4.8 Causing the Company to enter into any agreement, modify, amend
or terminate any agreement with any Member or Affiliate of any Member including
without limitation the Assignment Agreements, the License Agreement, the
Manufacturing Agreement or Technology Agreement.
4.4.9 The addition of additional Members.
4.4.10 Making distributions of cash or other Property to the Members
except pursuant to the provisions of Section 7.5.1.
4.5 Meetings. Meetings of the Board of Managers for such business as may
properly come before the Board of Managers may be called by any Manager.
Meetings of the Members for any purpose may be called by any Voting Member. The
times, dates, places and purposes of the Board of Managers' or Members' meetings
shall be designated in a written notice given in person or mailed by the person
or persons calling the meeting to each other Manager or Voting Member, not less
than two nor more than thirty days before the date of the meeting; if mailed,
the notice shall be addressed to such Manager or Voting Member at the Manager's
or Voting Member's address on the records of the Company. If a meeting is
adjourned to a different date, time or place, notice need not be given of the
new date, time or place if the new date, time or place is announced at the
meeting before an adjournment is taken. Any Voting Member or Manager may waive
notice of a meeting before or after the meeting. All waivers of notice must be
in writing, be signed by the Voting Member or Manager entitled to the notice and
be delivered to the Company for inclusion in the appropriate records. Neither
the business to be transacted at, nor the purpose of, a meeting must be
specified in a written waiver of notice. Attendance at a meeting shall
constitute a waiver of notice of the meeting, unless at the beginning of the
meeting the Manager or Voting Member gives written notice of objection to
holding the meeting or transacting business at the meeting. A Manager or Voting
Member may vote in person or by proxy. No proxy shall be valid for more than
eleven months after the date of its execution unless a longer period is
expressly provided in the appointment form. Any action required or permitted to
be taken at a Managers' or Members' meeting may be taken without a meeting,
without prior notice and without a vote if one or more written consents
describing the action to be taken are signed and dated by a sufficient number of
Managers or Voting Members authorized hereunder to take such action. Unless
otherwise provided for herein, the affirmative vote or consent by a Majority in
Interest of the Managers or Voting Members shall be required to approve any
matter presented to the Board of Managers or the Voting Members for vote,
provided that any such matter acted upon by the Board of Manager must receive
the affirmative vote of at least one Manager appointed by each of the Members
unless the provisions of Section 4.1.1 are in effect.
4.6 Minutes. The Managers, the Members and each committee shall keep
minutes of its proceedings, which shall be open for inspection by any Voting
Member upon reasonable prior notice to the Company.
4.7 Managers and Members Shall Have No Exclusive Duty To Company. A
Manager or a Member may have other business interests and may engage in other
activities in addition to those relating to the Company. Neither the Company nor
any Member shall have any right, by virtue of this Agreement, to share or
participate in such other activities or investments of a Member or the income or
proceeds derived therefrom. Neither a Member nor a Manager shall incur any
liability to the Company or to any of the Members as a result of engaging in any
other business.
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4.8 Officers. The number and titles of officers of the Company and other
persons who may act as authorized agents of the Company shall be fixed from time
to time by a Majority in Interest of the Board of Managers. The officers shall
have such titles, duties, authorities and responsibilities as may be delegated
to them from time to time by a Majority in Interest of the Board of Managers.
The officers shall be elected from time to time by, and serve at the pleasure
of, a Majority in Interest of the Board of Managers, provided that each officer,
to be elected, must receive the affirmative vote of at least one Manager
appointed by each Member unless the provisions of Section 4.1.1 are in effect. A
Majority in Interest of the Board of Managers may remove an officer, with or
without cause, at any time, subject to any contractual rights of such officer.
In the event of the death, resignation or removal of an officer, a Majority in
Interest of the Board of Managers shall elect a successor who shall serve the
remainder of the term of his or her predecessor.
4.9 Delegation. A Majority in Interest of the Board of Managers may
delegate in writing any and all authority which such Majority in Interest is
empowered to exercise hereunder to any one or more of the members of the Board
of Managers or any officer or officers of the Company whereupon such delegee
shall thereafter be entitled to exercise such authority so delegated hereunder.
4.10 Accounts. All funds of the Company shall be deposited in its name in
an account or accounts as shall be designated from time to time by a Majority in
Interest of the Managers. All funds of the Company shall be used solely for the
business of the Company. If any bank requires a prescribed form or forms of
resolutions relating to such accounts of the Company or to any application,
statement, instrument, or other documents connected with the accounts, the
resolutions contained in any such prescribed form will be deemed to have been
adopted by the Members, and a Majority in Interest of the Managers of the
Company are authorized to certify the adoption of any such resolution as though
it were unanimously adopted by the Members, and to insert all such resolutions
in the records of the Company.
4.11 Duties; Liability for Certain Acts. In managing the business or
affairs of the Company, each Member, Manager, and officer of the Company shall
act in the manner provided by Section 00-00-000 of the Act. Except for acts or
omissions undertaken in contravention of this Agreement, no Member, Manager or
officer shall be deemed to have guaranteed nor shall have any obligation with
respect to the return of a Member's capital contributions in the Company or
profits from the operation of the Company. Except for acts or omissions
undertaken in contravention of this Agreement, each Member's, Manager's, and
officer's liability to the Company, the Members, and the other Managers and
officers shall be limited and the Members, Managers, and officer's shall be
indemnified as set forth in Article XII of this Agreement. No Member, Manager,
or officer shall be liable, solely by reason of being a Member, Manager,
officer, agent, or employee of the Company, under a judgment, decree, or order
of a court, or in any other manner, for a debt, obligation, or liability of the
Company, whether arising in contract, tort, or otherwise, or for the acts or
omissions of any other Member, Manager, officer, agent, or employee of the
Company, whether arising in contract, tort, or otherwise, except as provided in
Section 00-00-000 of the Act (liability for wrongful distributions).
4.12 General Authority. Unless expressly authorized to do so by this
Agreement, no one or more of the Members, Managers, officers, employees or other
agents of the Company shall have any power or authority to bind the Company in
any way, to pledge its credit or to render it liable for any purpose.
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ARTICLE V
LIABILITY OF MEMBERS
5.1 Limitation of Liability. No Member shall be liable as such for the
liabilities of the Company.
5.2 Representations and Warranties. Each Member hereby represents and
warrants to the Company and each other Member that such Member is acquiring such
Member's Membership Units for the Member's own account as an investment and
without an intent to distribute the Membership Units; and such Member
acknowledges that the Membership Units have not been registered under the
Securities Act of 1933 or any state securities laws, and that in addition to the
other restrictions provided herein the Membership Units may not be resold or
transferred by the Member without appropriate registration or the availability
of an exemption from such requirements. Each Member agrees to hold harmless and
indemnify the Company, its officers, directors, agents and other Members, from
and against any loss or damages incurred as a result of any breach of such
representation and warranty.
ARTICLE VI
CAPITAL CONTRIBUTIONS
6.1 Initial Capital Contributions. Each of the initial Members shall pay
in to the capital of the Company One Thousand Dollars ($1,000) in exchange for
their respective Membership Units in the Company and shall make the following
additional capital contributions in cash, property and services:
MEMBER CONTRIBUTION
GLOBAL RESEARCH The assignment and delivery of (i) all Technical Information,
SYSTEMS, INC. currently owned by Global; (ii) all Technology currently owned
by Global, which is not otherwise sold to XxXxxxx or assigned
to Holding Venture by Global pursuant to the Purchase
Agreement; and (iii) Global's rights and obligations under the
Exclusive Territory License Agreement dated April 6, 1998 by
and between Global and Midwest Wireless Communications, LLC;
the collective value of all such additional contributions is
agreed by all Members to be $2,313,000, all of which
contributions shall be made within three days of the execution
of this Agreement.
XXXXXXX, INC. (i) Cash in the amount of $1,813,000, which contribution
shall be made within three days of the execution of the
Agreement.
(ii) The performance of and payment for Development
Services having a value of not less than $500,000,
which performance or payment shall be completed
within one year from the date of this Agreement;
provided, that should XxXxxxx fail to provide
Development Services in such amount within such
time frame, then within ten (10) days from and
after the first anniversary of the date of this
Agreement, XxXxxxx shall make an additional cash
contribution equal to the difference between
$500,000 less the amount of such Development
Services so provided to the Company. If such value
of the Development Services provided by XxXxxxx
through the first anniversary of this Agreement is
greater than $500,000, the Company shall reimburse
XxXxxxx for the amount of such
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excess shall be promptly reimbursed to XxXxxxx within 30 days
of the submission by XxXxxxx of an invoice to the Company with
respect thereto, subject to the Company's reasonable
verification of such invoice. Attached hereto as Exhibit "A"
is further classification of Development Services.
No interest shall accrue on any capital contribution and no Member shall have
the right to withdraw or be repaid any capital contribution except as provided
in this Agreement.
6.2 Required Capital Contributions. If either (i) during the first twelve
(12) month period during which this Agreement remains in effect, the Cash and
Cash Equivalents of the Company (including Reserves) should be less than One
Hundred Thousand Dollars ($100,000) or (ii) at any time after the first
anniversary of the date of this Agreement, the Cash and Cash Equivalents of the
Company (including Reserves) should be less than Five Hundred Thousand Dollars
($500,000), then either Global or XxXxxxx (the "Calling Member") may, by means
of written notice to the Company and each other Member (a "Call Notice"),
require each Member to contribute an amount to the capital of the Company
consisting of the product of such Member's Membership Interest multiplied by the
amount of such deficiency. In the event either XxXxxxx or Global requires any
such capital contributions hereunder, each Member shall make such capital
contributions within fifteen (15) days after such Member delivers or receives
such Call Notice (whichever is applicable). If any Member defaults in its
obligations to make any capital contribution required hereunder, then the
Calling Member may, at its option, contribute the defaulting Member's required
amount to the Company or the Company may, at the Calling Member's option, retain
all distributions which such defaulting Member is entitled to receive hereunder
up to the amount of such defaulting Member's obligations hereunder which amounts
shall be deemed to have been distributed to such defaulting Member hereunder and
re-contributed to the Company. If a Member defaults in its obligation to make a
capital contribution required hereunder, the nondefaulting Member with respect
to such required capital contribution hereunder shall be entitled to receive
additional Class A Membership Units in exchange for its capital contribution.
The number of additional Class A Membership Units a nondefaulting Member
shall be entitled to shall equal the following:
6.2.1 If such a default occurs before the earlier of (i) the first
anniversary of this Agreement or (ii) the default in such obligation to make an
aggregate of $375,000 of capital contributions by such Member (a "$375,000
Capital Call"), then such number of Class A Membership Units shall be the
amount of additional capital contributed by the nondefaulting Member in excess
of that capital contribution by the defaulting Member, divided by the book value
of a Membership Unit immediately before the Member made the additional capital
contribution. For purposes of the preceding sentence, the book value of a
Membership Unit shall equal the quotient of (1) an amount equal to the sum of
all contributions to the capital of the Company increased by Tax Profits,
excluding Built-in Gains, Built-in Losses, and two-thirds (subject to any
adjustment in the Global Preference Percentage pursuant to Section 15.4.20) the
cumulative Tax Profits allocable to Global under Section 7.1.3, and decreased by
(i) Tax Losses, excluding Built-in Gains and Built-in Losses, and (ii)
distributions under Section 7.5 and 7.6 other than distributions to Global of
the Preferred Global Distribution Balance divided by (2) the aggregate number of
Membership Units outstanding immediately before the capital contribution was
made by the nondefaulting Member.
6.2.2 If such a default occurs after the earlier of (i) the first
anniversary of this
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Agreement or (ii) a $375,000 Capital Call, then such number of Class A
Membership Units shall be the amount of additional capital contributed by the
nondefaulting Member in excess of that capital contribution by the defaulting
Member, divided by the Fair Value of a Membership Unit immediately before the
Member made the additional capital contribution.
6.3 Additional Capital Contributions. Solely to the extent approved by a
Supermajority in Interest of the Voting Members from time to time, the Members
may be permitted (but not required) to make additional capital contributions if
and to the extent they so desire, and if a Supermajority in Interest of the
Voting Members so determine that such additional capital contributions are
necessary or appropriate in connection with the conduct of the Company's
business (including without limitation, expansion or diversification). In such
event, all Members shall have the opportunity (but not the obligation) to
participate in such additional capital contributions on a pro rata basis in
accordance with their relative Membership Interests determined as of the date
such additional capital contributions are so approved by a Supermajority in
Interest of the Voting Members. Except as otherwise agreed by a Supermajority in
Interest of the Voting Members, no Member making any additional capital
contributions hereunder shall be entitled to receive additional Membership Units
in exchange therefore. Each Member acknowledges and agrees that should
additional capital contributions be authorized hereunder in which capital
contributions a Member does not participate and should a Supermajority in
Interest of the Voting Members agree that any Member or Members making any such
capital contributions should be entitled to receive additional Membership Units
in exchange therefore, the Membership Interest of each Member who declines to
participate in such capital contributions will be diluted as a result of such
circumstances.
6.4 Right to Raise Additional Capital.
6.4.1 Issuance of Units. If at any time and from time to time a
Supermajority in Interest of the Voting Members determines that additional funds
are required by the Company for or in respect to its business for any of its
obligations, expenses, costs, liabilities or expenditures, the Managers, upon
receiving the written consent of a Supermajority in Interest of the Voting
Members, may cause the Company to sell additional Membership Units and admit
additional Members upon the terms and conditions and, for such prices as are
agreed to by a Supermajority in Interest of the Voting Members. Any Person who
acquires any Membership Units which have been offered in accordance with the
provisions of this Section 6.4.1 may be admitted to the Company as a new Member
(or if such Person is already a Member, his Membership Interest may be
increased), and no further consent of such admission (or increase in an existing
Member's Membership Interest) by the existing Members shall be required. By
virtue of this provision, an existing Member's Membership Interest may be
diluted upon the sale of such additional Membership Units, and each Member
hereby consents to such dilution provided the conditions of this Section 6.4
have been satisfied.
6.4.2 Additional Members. Except as provided under Section 6.4.1, no
additional person or entity shall be entitled to acquire or obtain any
Membership Units or otherwise be admitted as a Member of the Company except as
otherwise specifically permitted under this Agreement.
6.5 Loans to the Company. If at any time and from time to time additional
funds are required by the Company for or in respect to its business or any of
its obligations, expenses, costs, liabilities or expenditures, in lieu of
raising such additional funds from any bank, savings and loan, or other
financial institution or third party, the Company may obtain such loans in such
amounts, upon such terms and conditions and from such Members as a Supermajority
in Interest
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of the Members shall deem appropriate. No Member shall be required to make any
loan to the Company hereunder unless otherwise agreed to in writing by such
Member. Any loan to the Company by a Member shall not be a capital contribution
to the Company, but shall be a debt due such Member in its capacity as a
creditor of the Company. Such loan(s) may have such preference, priority or
security position as may be permissible under law and as may be determined by a
Supermajority in Interest of the Voting Members and as is acceptable to the
Member advancing the same.
6.6 Limits on Additional Capital Contributions and Loans.. Except as to
(i) the initial capital contributions required to be made by any Member to the
Company as set forth in Section 6.1 of this Agreement, (ii) the required capital
contributions required to be made by any Member to the Company as set forth in
Section 6.2 of this Agreement, (iii) any Member's obligation to pay the purchase
price for any additional Membership Units purchased by such Member pursuant to
Section 6.3 or 6.4 hereunder, or (iv) any obligation to make any loan to the
Company which has been agreed to in writing by any Member in accordance with
Section 6.5 hereof, no Member shall be required by any person or entity
(including in the name or on behalf of the Company) to make any capital
contributions or loan to the Company. This Section 6.6 shall inure to the
benefit of each Member it being the parties intention that no other third party
shall constitute a third party beneficiary of any provisions of this Agreement
and that neither the Company, nor any Member or Members nor any other creditor,
person or entity be entitled or empowered to require any Member to make
additional capital contributions or loans to the Company for any purpose
whatsoever.
6.7. Maintenance of Capital Accounts. The Company shall establish and
maintain a capital account for each Member according to Code Section 704(b) and
the Regulations under such Code Section. A Member's capital account shall
initially be the agreed value of the initial capital contributed by such Member
and the Members agree that the value shall initially and pursuant to Section 6.1
be as follows:
XxXxxxx $2,314,000
Global $2,314,000
Each Member's capital account shall thereafter be credited with (i) the amount
of the Member's additional cash contributions (if any), other than those
required under Section 6.1, (ii) the agreed value of the Member's additional
contributions of property or services (if any), other than those required under
Section 6.1, and (iii) the Member's share of Tax Profits excluding Built-in
Gains and Built-in Losses, and shall be debited with (a) the amount of cash
withdrawals and distributions, (b) the agreed value of property distributions
and (c) the Member's share of Tax Losses excluding Built-in Gains and Built-in
Losses. The provisions of this Section and the other applicable sections of this
Agreement shall be construed in a manner consistent with Regulations Section
1.704(b)(2)(iv).
6.7.1 Distributions of Property. On the distribution of Property to a
Member, prior to reducing such Member's capital account by the fair market value
of the Property hereunder, the capital accounts shall first be adjusted to
reflect the allocation of the Built-in Gain or Built-in Losses inherent in such
Property (that has not previously been reflected in the capital accounts) as
though the Property were sold on the distribution date at its fair market value.
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6.7.2 Adjustments. Adjustments to the capital accounts hereunder shall
be made with reference to the Federal tax treatment of the item giving rise to
the adjustment at the Company level without regard to any elective tax treatment
of such items at the Member level.
6.7.3 Compliance with Treasury Regulations. The foregoing provisions
and the other provisions of this Agreement relating to the maintenance of
capital accounts are intended to comply with Regulations Section 1.704-l(b), and
shall be interpreted and applied in a manner consistent with such Regulations.
In the event the Members shall determine that it is prudent to modify the manner
in which the capital accounts, or any debits or credits thereto (including,
without limitation, debits or credits relating to liabilities that are secured
by contributed or distributed property or that are assumed by the Company or
Members), are computed in order to comply with such Regulations, the Members may
make such modifications as they deem reasonably necessary, provided that such
modifications are not likely to have a material effect on the amounts
distributable to any Member pursuant to this Agreement. The Members shall also
make any appropriate modifications in the event unanticipated events might
otherwise cause this Agreement not to comply with Treasury Regulations Section
1.704-l(b).
ARTICLE VII
ALLOCATIONS AND DISTRIBUTIONS
7.1 Allocations of Tax Profits and Tax Losses. Except as may be required
by Section 704(c) of the Code and exclusive of any allocations required under
Section 704(c), the allocations, Tax Profits and Tax Losses shall be allocated
among the Members as follows:
7.1.1 All Tax Losses shall be allocated among the Members in
proportion to the "Members" respective Membership Interests.
7.1.2 The first cumulative One Million Dollars ($1,000,000) of Tax
Profits generated by the Company shall be allocated among the Members in
proportion to the "Members" respective Membership Interests.
7.1.3 All cumulative Tax Profits of the Company in excess of One
Million Dollars ($1,000,000) shall be allocated, until such time as Global has
been allocated the full Preferred Global Allocation Balance, as follows: (i) to
Global: the portion of the cumulative Tax Profits in excess of One Million
Dollars ($1,000,000) equal to the Global Preference Percentage; and (ii) to
XxXxxxx: the remaining portion.
7.1.4 From and after Global has been allocated the entire Preferred
Global Allocation Balance in the manner provided under Section 7.1.3, all Tax
Profits of the Company shall be allocated among the Members in proportion to the
"Members" respective Membership Interests.
7.2. Built-in Gains and Built-in Losses. Built-in Gains and Built-in Losses
shall be allocated to the Members according to the principles of Code Section
704(c) and the regulations thereunder.
7.3. Regulatory Allocations. At the end of each Fiscal Year and
notwithstanding any other provision of this Article VII, the following special
allocations shall be made for both capital account and for federal income tax
purposes:
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7.3.1 Notwithstanding any other provision of this Agreement (except as
provided in Section 7.3.2, if there is a net decrease in Minimum Gain (as
defined below) for any Fiscal Year of the Company, each Member shall be
allocated, on an equal basis, before any other allocation of Company items for
such taxable year, a share of items of gross income and gain for such year (and,
if necessary, for subsequent years) equal to such decrease. The income allocated
pursuant to this Section 7.3.1 in any taxable year shall consist first of gains
recognized from the disposition of property subject to one or more nonrecourse
liabilities of the Company, and any remainder shall consist of an equal portion
of other items of income or gain of the Company.
7.3.2 The allocation otherwise required pursuant to Section 7.3.1
shall not apply to any Member to the extent that: (i) such Member's share of the
net decrease in Minimum Gain is caused by a guarantee, refinancing or other
change in any instrument evidencing a nonrecourse debt of the Company which
causes such debt to become partially or wholly recourse debt or a Member
nonrecourse debt (as defined below), and the Member owning such Membership
Interest bears the economic risk of loss (within the meaning of Treasury
Regulations Section 1.752-2) for such changed debt; (ii) such Member's share of
the net decrease in Minimum Gain results from the repayment of a nonrecourse
liability of the Company, which repayment is made using funds contributed by the
Member owning such Ownership Interest to the capital of the Company; (iii) the
Internal Revenue Service ("IRS"), pursuant to Regulations Section 1.704-2(f)(4),
waives the requirement of such allocation in response to a request for such
waiver made by the Company (which request the Company may make if approved by a
Supermajority in Interest of the Voting Members); or (iv) additional exceptions
to the requirement of such allocation are established by revenue rulings issued
by the IRS pursuant to Regulations Section 1.704-2(f)(5), which exceptions apply
to such Membership Interest of the Member owning the same, as determined by
counsel to the Company.
7.3.3 Notwithstanding any other provision of this Agreement, if a
Member unexpectedly receives an adjustment, allocation or distribution described
in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes or
increases an excess deficit capital account balance with respect to such Member,
items of the Company's gross income and gain shall be specially allocated to
such Member in an amount and manner sufficient to eliminate such excess deficit
capital account balance as quickly as possible.
7.3.4 If at the end of any Fiscal Year, a Member has an excess deficit
capital account balance, items of Company income or gain shall be allocated to
such Member in an amount and manner sufficient to eliminate such excess deficit
capital account balance as quickly as possible.
7.3.5 For purposes of this Section 7.3, the following terms shall have
the following meanings:
"Minimum Gain" shall have the meaning given such term in
Regulations Section 1.704-2, and shall generally mean the amount by which
the nonrecourse liabilities secured by any Property of the Company exceed
the adjusted tax basis of such Property as of the date of determination. A
Member's share of Minimum Gain (and any net decrease thereof) at any time
shall be determined in accordance with Regulations Section 1.704-2.
"excess deficit capital account balance" of any Member shall be
the capital account balance of such Member, adjusted as provided in the
immediately following sentence, to the extent, if any, that such balance is
a deficit (after adjustment).
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For purposes of determining the existence and amount of an excess deficit
capital account balance, the capital account balance of a Member shall be
adjusted by: (A) crediting thereto (1) that portion of any deficit capital
account balance that such Member is required to restore under the terms of
this Agreement, if any, and (2) the amount of such Member's share of
Minimum Gain, including any "partner nonrecourse debt minimum gain" (as
defined in Regulations Section 1.704-2(i)(2); and (B) charging thereto the
items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)
that apply to such Member. The existence and amount of any excess deficit
capital account balance at the end of any year shall be determined before
any other allocations provided for in this Article VII for such year have
been made.
7.3.6 Notwithstanding any other provision of this Agreement, any
expenditure described in Code Section 705(a)(2)(B), loss or deduction that is
attributable to partner nonrecourse debt (as defined in Regulations Section
1.704-2(b)(4)) shall be allocated to those Members that bear the economic risk
of loss for such partner nonrecourse debt, and among such Members as provided in
Regulations Section 1.704-2(i). If there is a net decrease for a Fiscal Year in
any partner nonrecourse debt minimum gain (as defined in Regulations Section
1.704-2(i)(2)), each Member with a share of such partner nonrecourse debt
minimum gain as of the beginning of such year shall be allocated items of gross
income and gain in the manner and to the extent provided in Regulations Section
1.704-2(i).
7.3.7 The foregoing provisions of this Section 7.3 are intended to
comply with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted
consistently with this intention. Any terms used in such provisions that are not
specifically defined in this Agreement shall have the meaning, if any, given
such terms in the Regulations cited above.
7.3.8 If any allocation of gain, income, loss, expense or any other
item is made pursuant to Section 7.3.1, 7.3.3, 7.3.4 or 7.3.6 of this Agreement
(the "Regulatory Allocations") with respect to one or more Members (such Members
being herein referred to as the "Deficit Members"), then the balance of such
items for the current and all subsequent fiscal years shall be allocated among
the Members other than the Deficit Members as if such items were allocated among
all the Members (including the Deficit Members) without regard to the Regulatory
Allocations, until the amount of such items that would have been allocated to
the Deficit Members but for the Regulatory Allocations, equals the amount
actually allocated to the Deficit Members pursuant to the Regulatory
Allocations.
7.3.9 Any depreciation recapture recognized pursuant to Code Sections
1245 and 1250 shall be allocated to the Members in the same proportions that the
depreciation or cost recovery deductions giving rise to such recapture were
allocated among such Members or their respective predecessors-in-interest.
7.3.10 In the event that there is a determination that Code Section
483 or Code Section 1274 (both relating to imputed interest with respect to
deferred payment sales of property) is applicable to any loans between the
Company and a Member, or that any loan between a Member and the Company is
subject to Code Section 7872 (relating to imputed interest with respect to
below-market interest rate loans), any income or deduction attributable to
interest on such a loan (whether stated or unstated) shall be allocated solely
to such Member.
7.4 Mechanics of Allocations. The Members have the authority to vary the
allocations provided hereunder to the extent necessary to comply with federal
income tax laws, so long as there is no material adverse effect on the amounts
distributable to any holder of any
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Membership Units. When the Company is dissolved and wound-up pursuant to this
Agreement, all items of income, gain, loss and deduction not previously
allocated shall be allocated to the Members pursuant to this Article. Whenever a
share of the Company's Tax Profits, Tax Losses, or other tax items is credited
or charged to the capital account of a Member, every item of income, gain, loss
or deduction entering into the computation of such Tax Profits, Tax Losses or
other item (or other relevant period) shall be considered either credited or
charged as the case may be, and every item of credit or tax preference relating
to Tax Profits, Tax Losses, or other tax item and applicable to the period
during which such Tax Profits, Tax Losses or other item as realized shall be
allocated to the applicable capital account in the same proportion. The methods
set forth in this Article for allocations are hereby expressly consented to by
each Member as an express condition to becoming a Member. Allocations made in
this Article shall be made to each person or entity holding any Membership Units
who or which has not been admitted as a Member hereunder to the same extent as
such allocations would be made to a Member owning such Membership Units.
7.5 Cash Distributions. The following shall apply to cash distributions:
7.5.1 Quarterly Tax Distributions. On or before the last day of each
of March, May, August, and December of each calendar year, the Company shall
distribute and each Member shall be entitled to receive an amount of
Distributable Cash equal to the product of (i) the highest combined effective
Federal and State of Georgia income tax rate imposed on the ordinary income of
an individual or a corporation (whichever is higher) multiplied by (ii) either
(a) with respect to the March and December payments, the Tax Profits, if any,
allocable to such Member hereunder for the calendar quarter then ended or (b)
with respect to the May and August payments, the estimated Tax Profits (based on
actual results to date and anticipated future results), if any, anticipated as
being allocable to such Member hereunder for the then current calendar quarter
in which such date occurs. Notwithstanding the immediate preceding sentence, the
Company shall not be required, except with the consent of a Supermajority in
Interest in the Voting Members, to make such a distribution to the extent such
distribution would require the that the Company borrow money or would result in
either (i) during the first twelve (12) month period during which this Agreement
remains in effect, the Cash and Cash Equivalents of the Company (including
Reserves) being less than One Hundred Thousand Dollars ($100,000) or (ii) at any
time after the first anniversary of the date of this Agreement, the Cash and
Cash Equivalents of the Company (including Reserves) being less than Five
Hundred Thousand Dollars ($500,000).
7.5.2 Other Distributions. From time to time, but no less frequently
than semi-annually, the Members shall determine to what extent, if any, the
Company's Distributable Cash exceeds the current and anticipated needs,
including, without limitation, needs for operating expenses, debt service,
acquisitions, and Reserves, if any, plus amounts required to be distributed
pursuant to Section 7.5.1. To the extent such excess exists, the Company shall
make cash distributions to the Members in the manner hereinafter provided.
(a) An aggregate amount equal to the difference between One
Million Dollars ($1,000,000) less the aggregate distributions required
under Section 7.5.1 above as made by the Company to all Members as of the
date of the anticipated distribution hereunder shall be distributed to the
Members in proportion to each Member's respective Membership Interest.
(b) From and after the date on which the Company has made
aggregate distributions to the Members under Section 7.5.2(a) of
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this Agreement of $1,000,000, the Company shall thereafter, until such time
as Global has been allocated the full Preferred Global Distribution
Balance, distribute all Distributable Cash available therefor as follows:
(i) to Global: the portion of the Distributable Cash equal to the Global
Preference Percentage; and (ii) to XxXxxxx: the remaining portion.
(c) From and after the date on which the Company has made
sufficient distributions to the Members under Section 7.5.2(b) of this
Agreement such that Global has received its entire Preferred Global
Distribution Balance, the Company shall thereafter distribute all
Distributable Cash available therefor to the Members in proportion to each
Member's respective Membership Interest in the Company.
7.5.3 Timing. All distributions which shall be made in accordance with
Section 7.5.2 of this Article shall be distributed to the Members at such times
as the Members determine pursuant to Section 4.4.10 to be advantageous and
practical for the Company. That portion of any distribution of Distributable
Cash which is allocable to any Membership Interest shall be made to the Member
who owns the Membership Units giving rise to such Membership Interest on the day
of the distribution.
7.5.4 Fees; Reimbursements. Each Member shall be entitled to receive
such compensation and such other fees in payment for all services rendered by
such Member, in his, her or its capacity other than that of a Member, for and on
behalf of the Company in such amount and at such time or times as a
Supermajority in Interest of the Voting Members shall determine.
7.5.5 Distributions Upon Dissolution. Notwithstanding anything herein
to the contrary, upon the occurrence of an event of dissolution as provided in
Article XII hereof, cash distributions occurring in connection with such event
of dissolution and thereafter shall be made in accordance with Article XII
hereof.
7.5.6 Distributions After the Fiscal Year End. The Members may, to the
extent consistent with this Article, elect to have distributions made after the
end of a Fiscal Year relate back to such Fiscal Year, provided, however, that
any such distribution must be made within forty-five (45) days after the end of
such Fiscal Year.
7.5.7 Withholding. The Company shall be authorized to withhold from
amounts to be distributed to any Member hereunder any withholding required by
the Code or any provision of any statute or state or local tax law, and to pay
such amounts to the Internal Revenue Service or other appropriate taxing
authority. Any such amounts withheld shall be treated as having been distributed
to such Member pursuant to this Article for all purposes of this Agreement.
7.5.8 Consent to Distributions. The methods set forth in this Article
for distributions are hereby expressly consented to by each Member as an express
condition to becoming a Member. Distributions required to be made under this
Article shall be made to each holder of any one or more Membership Units who has
not been admitted as a Member of the Company under this Agreement to the same
extent as such distributions would be made to a Member owning such Membership
Units.
7.6 Survival of Certain Distribution Rights. In the event Global shall
withdraw from the Company for any reason prior to its receipt of the entire
Preferred Global Distribution Balance and either (i) the Company is not
dissolved as a result of such withdrawal or (ii) the
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Company is thereafter or thereupon dissolved without Global participating in
such dissolution as a Member of the Company, then Global shall remain entitled
to receive payments from the Company and the Company shall remain obligated to
make payments to Global totaling the unpaid Preferred Global Distribution
Balance as of the date of Global's withdrawal (the "Withdrawal Date") all in the
manner hereinafter provided. From and after the date on which the Company has
made aggregate distributions to its Members totaling One Million Dollars
($1,000,000) and until such time as Global has received payments from the
Company totaling the Preferred Global Distribution Balance, the Company shall
make no distributions to its members unless any such distribution is accompanied
by a payment to Global of an amount equal to "X" times the amount so distributed
by the Company to its members. "X" shall equal the Global Preference Percentage
as of the Withdrawal Date divided by (100% less such Global Preference
Percentage). All payments made to Global hereunder shall be made to Global in
its capacity other than that as a Member and as such, shall be deductible to the
Company and included in the income of Global. It is all parties intention that
the obligations of the Company to cause Global to receive the Preferred Global
Distribution Balance survive Global's withdrawal from the Company.
ARTICLE VIII
TAXES
8.1 Elections. A Supermajority in Interest of the Voting Members may make
any tax elections for the Company allowed under the Code or the tax laws of any
state or other jurisdiction having taxing jurisdiction over the Company;
provided, however, that a Majority in Interest of the Voting Members shall make
any required elections and take any other steps required to cause the Company to
be taxed as a partnership for Federal income tax purposes.
8.2 Taxes of Taxing Jurisdictions. To the extent that the laws of any
taxing jurisdiction require, each Member will submit an agreement indicating
that the Member will make timely income tax payments to the taxing jurisdiction
and that the Member accepts personal jurisdiction of the taxing jurisdiction
with regard to the collection of income taxes attributable to the Member's
income, and interest, and penalties assessed on such income. The Company may,
where permitted by the rules of any taxing jurisdiction, file a composite,
combined or aggregate tax return reflecting the income of the Company and pay
the tax, interest and penalties of the Members on such income to the taxing
jurisdiction, in which case the Company shall inform the Members of the amount
of such tax interest and penalties so paid.
ARTICLE IX
TRANSFER OF MEMBERSHIP INTERESTS
9.1 Restrictions on Transfer. Except as otherwise specifically provided
under this Article, no Member shall have the right to sell, dispose of, pledge,
hypothecate, encumber or in any other manner transfer all or any part of his,
her or its respective Membership Units (including Class A Membership Units and
Class B Membership Units) or the Membership Interest represented thereby without
the prior written consent of a Supermajority in Interest of the Voting Members.
Any attempted disposition of all or any part of a Member's respective Membership
Units (including Class A Membership Units or Class B Membership Units) or the
Membership Interest represented thereby other than as specifically and expressly
permitted in this Article or approved in writing by a Supermajority in Interest
of the Voting Members shall be null and void ab initio and be of no effect
whatsoever. Any disposition of any Membership Units for which the consent of a
Supermajority in Interest of the Voting Members is obtained shall be effectuated
only after compliance with all conditions contained in Section 9.5 hereof.
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9.2 Call Option.
9.2.1 At any time from and after January 1, 2004 (but in no event
prior thereto), should either Global or XxXxxxx (the "Initiating Member") desire
to purchase all, but not less than all, of the Membership Units owned by the
other of the aforenamed Members (the "Target Member"), the Initiating Member
shall make a written offer (the "Offer") to the Target Member to purchase the
Membership Units owned by the Target Member for the Market Value thereof. If at
any time during the term of this Agreement, should either Global or XxXxxxx
cease to be a Member of the Company upon the happening of any event set forth in
Section 11.1, and if XxXxxxx or Global, respectively, (also the "Initiating
Member") then desires to purchase all, but not less than all, of the Membership
Units owned by the other of the aforenamed Members (also the "Target Member"),
the Initiating Member shall make a written offer (also an "Offer") to the Target
Member to purchase the Membership Units owned by the Target Member for the
Market Value thereof. Such Offer shall be irrevocable except as otherwise
provided herein. During the thirty (30) day period from and after the date of
the Target Member's receipt of such Offer, the Target Member and the Initiating
Member shall discuss the determination of the Market Value of the Target
Member's Membership Units in the Company. If during such thirty day period, the
Target Member and the Initiating Member agree in writing upon the Market Value
of the Target Member's Membership Units in the Company, then the Initiating
Member shall purchase and the Target Member shall sell all Membership Units in
the Company owned by the Target Member for the Market Value so determined all as
provided hereunder. If during such thirty day period, the Target Member and the
Initiating Member are unable to agree as to the Market Value of the Target
Member's Membership Units, then the Market Value of each Membership Unit in the
Company shall be determined in the manner and under the process provided under
Section 15.4.26 of this Agreement. Within ten (10) days from and after the final
determination of the Market Value by means of any appraisal process provided
under Section 15.4.26, the Target Member shall notify the Initiating Member of
the Target Member's acceptance of the Initiating Member's Offer (in which event
the Initiating Member shall purchase and the Target Member shall sell all
Membership Units in the Company owned by the Target Member for the Market Value
so determined under such appraisal process) or rejection of the Initiating
Member's Offer. If the Target Member accepts the Initiating Member's Offer and
the Market Value finally determined hereunder exceeds the Initial Proposed Value
by more than ten percent (10%) of such Initial Proposed Value, then the
Initiating Member shall be entitled to revoke the Offer whereupon such Offer and
the process initiated under this Section 9.2 shall cease to continue or apply.
If the Target Member rejects the Initiating Member's Offer, then within thirty
(30) days from and after the Initiating Member's receipt of such rejection, the
Initiating Member and the Target Member shall meet at the principal office of
the Company at which meeting each of them shall bid on the price such Member is
willing to pay for the Membership Units owned by the other of them; provided,
that in support of any bid made by any Member, such Member shall certify and
provide reasonable evidence to the other that such Member has a sufficient
source of funds to fulfill any bid so submitted. As a result of such bidding
process, the Member bidding the highest price shall be entitled to purchase from
the other, all Membership Units in the Company owned by such other Member for
the price so bid all in the manner hereinafter provided.
9.2.2 On the date which is thirty (30) days from and after the date on
which it is finally determined as to which of the Initiating Member or the
Target Member shall purchase the Membership Units owned by the other of them and
the purchase price (the "Applicable Price") to be paid therefor all in
accordance with Section 9.2.1 above (or such earlier date mutually agreed to
between the Initiating Member and the Target Member), the Initiating Member and
the Target Member shall meet (the "Closing") at the principal office of the
Company at which
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Closing (i) the purchasing Member shall deliver the Applicable Price to the
selling Member in immediately available and good funds and (ii) the selling
Member shall deliver all such instruments and documents as the purchasing Member
reasonably requests so as to transfer and convey good right, title and interest
in and to all Membership Units in the Company owned by the selling Member and
the Membership Interest represented thereby to the purchasing Member free and
clear of all liens and encumbrances of any nature whatsoever.
9.2.3 No Initiating Member shall be entitled to exercise the right and
entitlements provided under this Section 9.2 of this Agreement unless such
Initiating Member also exercise those rights and entitlements provided under
Section 9.2 of the BusCall Agreement; it being the Members, intention that any
disposition of all Membership Units in the Company by a Member under this
Section 9.2 be accompanied by a similar disposition of all of such Member's
membership units in BusCall pursuant to Section 9.2 of the BusCall Agreement.
9.2.4 In the event any Member invokes the application of the
provisions contained under this Section 9.2 on three (3) separate occasions with
the result being such Member's revocation of the Offer made by such Member as
permitted hereunder on each of said three occasions, such Member shall
thereafter have no right or entitlement to invoke any further application of
this Section 9.2.
9.3 Successors in Interest. Each Member shall be entitled to cause its
Membership Units in the Company to be transferred and assigned to such Member's
Successor in Interest or to any wholly owned subsidiary of such Member without
obtaining the consent of the Company or any other Voting Members provided, that
as a condition to such transfer and assignment, (i) all conditions imposed under
Section 9.5 shall be satisfied, (ii) there shall be no increase in the liability
and or responsibility of the Company or any other Member as a result of such
transfer and assignment, and (iii) either (y) the transferring or assigning
Member shall remain jointly and severally liable with the transferee or assignee
for the performance of all obligations and responsibilities of the transferee or
assignee under this Agreement, or (x) the transferee or assignee shall have
shareholders' or owners' equity at least equal to that of the transferring or
assigning Member after giving effect to such transfer or assignment.
9.4 Assignment of Economic Rights. Each Member shall be entitled to
voluntarily assign solely such Member's right to receive any distributions under
this Agreement to such persons or entities selected by such Member provided,
that as a condition to such transfer and assignment, there shall be no increase
in the liability and or responsibility of the Company or any other Member as a
result of such assignment or any other requirements or conditions imposed upon
the Company to make any distributions hereunder. In the event of any Member's
assignment of such Member's right to receive distributions hereunder, no
assignee of any such rights shall thereafter be entitled to exercise any
applicable voting rights, if any, or participate in any management decisions
with respect to the Company or its operations
9.5 Conditions for Transfer. Notwithstanding anything contained herein to
the contrary, no transferee, purchaser or recipient of any Membership Units in
the Company will become a Member of the Company unless and until all of the
following conditions are satisfied; provided, that all or any number of the
following conditions may be waived in writing by a Supermajority in Interest of
the Voting Members:
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(i) the transferring Member (or such Member's legal
representative) must have executed a written instrument of transfer of such
Member's Membership Units in form and substance reasonably satisfactory to
a Supermajority in Interest of the Voting Members;
(ii) the transferee must have executed a written agreement, in
form and substance reasonably satisfactory to a Supermajority in Interest
of the Voting Members including the transferring Member (or such
transferring Member's legal representative), to assume all of the duties
and obligations of the transferring Member under this Agreement, as well as
the BusCall Agreement, Purchase Agreement, Manufacturing Agreement,
Technology Agreement and Assignment Agreements, and to be bound by and
subject to all of the terms and conditions of such agreements as applicable
to the transferring Member or the transferring Member's Membership Units so
transferred;
(iii) the transferring Member (or such transferring Member's
legal representative) and the transferee must have executed a written
agreement, in form and substance reasonably satisfactory to a Supermajority
in Interest of the Voting Members, to indemnify and hold the Company and
all Members harmless from and against any loss or liability attributable to
any change in the tax status of the Company resulting from the transfer;
(iv) upon request by any of the Voting Members, the transferring
Member (or such transferring Member's legal representative) and the
transferee must have delivered to the Company a written opinion of counsel
for the Company or of other counsel reasonably satisfactory to a
Supermajority in Interest of the Voting Members (which opinion shall be
obtained at the expense of the transferring Member and the transferee) that
such transfer will not result in (i) a violation of applicable law
(including applicable securities laws) or this Agreement, (ii) the Company
being classified as an association or other entity taxable as a corporation
for any federal, state, local or other income tax purpose, or (iii) the
Company being deemed terminated pursuant to Code Section 708 or any
comparable future section of the Code.
A transferee who does not become a substituted Member will be entitled
to receive only that portion of the distributions or allocations to which the
transferring Member would otherwise be entitled with respect to the Membership
Units which are the subject of such transfer. If the requirements set forth in
Section 9.5(i) through (iv) are not satisfied, then the proposed transferee
shall have no right to vote any Class A Membership Units, if any, so transferred
on any question relating to the Company, to otherwise participate in the
management of the business and affairs of the Company, to otherwise exercise any
right, power, privilege, or other incident of ownership regarding any proposed
transferred Membership Units, or to become a Member but rather, the transferee
shall merely be the holder of said Membership Units.
9.6 Retroactive Allocations. No new Member of the Company shall be
entitled to any retroactive allocation of losses, income or expense deductions
incurred by the Company. The Managers may, at their option, at the time a new
member is admitted, close the Company books (as though the Company's tax year
had ended) or make pro rata allocations of loss, income and expense deductions
to a new Member for that portion of the Company's tax year in which such new
Member was admitted in accordance with the provisions of 706(d) of the Code and
the Treasury Regulations promulgated thereunder. No person or entity shall be
admitted as a transferee until all of the requirements set forth in Section
9.5(i) through (iv) are satisfied.
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9.7 Redemption of Class B Units. [RESERVED]
ARTICLE X
DISPUTES
10.1 Dispute Resolution. Upon the occurrence of the initial Deadlock Event,
resolution of such Deadlock Event including all undertakings of the Company in
connection therewith shall be decided by Global whereupon the Company shall
undertake all actions required by Global in connection therewith. Resolution of
the second Deadlock Event occurring hereunder including all undertakings of the
Company in connection therewith shall be decided by XxXxxxx whereupon the
Company shall undertake all actions required by XxXxxxx in connection therewith.
Thereafter, resolution of each subsequent Deadlock Event shall be decided on a
rotating basis by whichever of Global or XxXxxxx did not decide the last
previously occurring Deadlock Event.
10.2 Major Disputes. All parties acknowledge and agree that the provisions
contained under Section 10.1 shall apply only as to the resolution of Deadlock
Events and that any disputes arising between the parties with regard to any
matter or thing which does not constitute a Deadlock Event shall not be subject
to resolution under Section 10.1 but rather, may only be resolved by the
agreement of the requisite number of Voting Members required under this
Agreement or by means of the disputing parties resort to all available legal or
equitable remedies.
ARTICLE XI
DISSOCIATION OF A MEMBER
11.1 Dissociation. A Member shall cease to be a Member of the Company upon
the happening of any of the following events (a "Dissociation"):
11.1.1 The attempted transfer (other than as permitted under this
Agreement) of any portion of a Member's Membership Units or the Membership
Interest represented thereby; or
11.1.2 The withdrawal of the Member in the exercise of such Member's
statutory withdrawal right; or
11.1.3 The bankruptcy of the Member; or
11.1.4 In the case of a Member that is a limited liability company or
other separate organization other than a corporation, the dissolution and
commencement of winding up of the Member; or
11.1.5 In the case of a Member that is a corporation, the filing of
articles of dissolution for the corporation or the revocation of its charter
(except an involuntary administrative dissolution if the corporation is promptly
reinstated after notice thereof, provided that applicable state law treats the
reinstatement as relating back to and effective as of the effective date of the
administrative dissolution); or
11.1.6 A successful claim by any person of a right to all or any
portion of the Member's Membership Units or the Membership Interest represented
thereby on the basis that such interest has been transferred to such claimant by
operation of law or otherwise, except pursuant to a transfer permitted under
this Agreement.
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11.2 Rights of Dissociated Member. In the event of the Dissociation of any
Member (a "Dissociated Member"):
11.2.1 If the Dissociation is followed by the winding up of the
Company, the Dissociated Member shall be entitled to participate financially in
the winding up of the Company to the same extent as any other Member except
that, if the Dissociation is in violation of this Agreement, any distributions
to which the Dissociated Member would have been entitled shall be reduced by the
damages sustained by the Company as a result of the dissolution and winding up;
or
11.2.2 If the Dissociation is not followed by the winding up of the
Company, the Dissociated Member shall have only the right to receive the
allocations of profits or losses and the distributions payable with respect to
the Dissociated Member's interest.
ARTICLE XII
DISSOLUTION AND WINDING UP
12.1 Dissolution. The Company shall be dissolved and its affairs wound up,
upon the first to occur of the following events (which, unless the Members agree
to continue the business as provided below, shall constitute "Dissolution
Events"):
12.1.1 The expiration of the term set forth in Section 1.5, unless the
business of the Company is continued with the consent of a Majority in Interest
of the Voting Members;
12.1.2 The written consent of a Supermajority in Interest of the
Voting Members; and
12.1.3 The Dissociation of any Member, unless within 90 days after the
Dissociation the remaining Members elect to continue the business of the
Company.
12.2 Effect of Dissolution. Upon dissolution, the Company shall cease all
business except that incident to the winding up of its affairs, but the Company
shall not be terminated, but shall continue in existence until the winding up of
its affairs is completed and a Certificate of Dissolution has been issued by the
Secretary of State of Georgia. A Majority in Interest of the Board of Managers
as of the date of the Dissolution Event shall have full authority over all
matters related to the winding up of the Company.
12.3 Distribution of Assets on Dissolution. Upon dissolution of the Company
for any reason, the Company shall promptly commence to wind-up its affairs. A
reasonable period of time will be allowed for the orderly termination of the
Company's business, the discharge of its liabilities and the distribution or
liquidation of its remaining Property so as to enable the Company to minimize
the normal losses attendant to the liquidation process. The Managers will cause
a full accounting of the assets and liabilities of the Company as of the date of
dissolution to be taken and a written statement thereof will be furnished to
each Member within sixty (60) days after such date. Such accounting and
statement will be prepared under the direction of the Managers or, if the
Managers so determine, by a liquidating trustee selected by a Majority in
Interest of the Managers. In winding up the affairs of the Company, a Majority
in Interest of the Managers shall undertake the following:
12.3.1 Sell or otherwise liquidate all of the Company's Property as
promptly as practicable (except to the extent a Majority in Interest of the
Managers may determine or be
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required hereunder to distribute any Property in kind to the Members); provided,
that except in the case of a liquidation of the Company by reason of the
bankruptcy or insolvency of Global, the Managers shall not be authorized to sell
or otherwise liquidate the Company's interest, if any, in or to the License
Agreement, the Technology or the Intellectual Property;
12.3.2 Subject to Section 12.3.5 below, allocate any profit or loss
resulting from such sales to the Members in accordance with Article IX hereof;
12.3.3 Discharge all liabilities of the Company, including liabilities
to Members who are creditors, in the order of priority and to the extent
otherwise permitted by law, other than liabilities to Members for distributions;
12.3.4 Establish such Reserves as the Managers deem to be reasonably
necessary;
12.3.5 Distribute the remaining Property in the following order:
(i) First, distribute to the Members an aggregate amount
equal to the difference between One Million Dollars ($1,000,000) less
the aggregate distributions made under Sections 7.5.1 and 7.5.2(a) as
made by the Company in proportion to each Member's respective
Membership Interest.
(ii) Then, to Global in an amount equal to Global's Preferred
Global Distribution Balance immediately prior to the distribution; and
(iii) If any Property of the Company (including the License
Agreement, the Technology or the Intellectual Property) is to be
distributed in kind, the Appraised Value (net of any liability secured
by such Property that the Member receiving the Property is considered
to assume or take subject to under Code Section 752) of such Property
as of the date of dissolution shall be determined in the manner
provided under Section 15.4.3 of this Agreement. Such Property shall
be deemed to have been sold as of the date of dissolution for its
Appraised Value and the capital accounts of the Members shall be
adjusted pursuant to the provisions of this Agreement to reflect such
deemed sale.
(iv) In the event of a liquidation of the Company by reason
other than the bankruptcy or insolvency of Global and except as
otherwise agreed to by Global (with Global having the right to
unilaterally decline to receive the Company's interest, if any, in the
License Agreement, the Technology, and the Intellectual Property
hereunder), the Managers shall distribute all of the Company's right,
title and interest in and to the Intellectual Property, the
Technology, and the License Agreement (if any) to Global; provided,
that in making such in kind distribution, the Appraised Value of such
Intellectual Property, the Technology, and the License Agreement so
distributed shall be deemed to have been distributed to Global and
charged against any amounts which Global is entitled to receive (after
giving affect to the provisions contained in Sections 12.3.5 above) as
a result of the liquidation of the Company hereunder; provided,
further, that should the amount charged to Global in connection with
the distribution by the Company of its interest in the Intellectual
Property, the Technology or the License Agreement to Global hereunder
exceed the amount to which Global is entitled to receive as a result
of the dissolution of the Company,
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then (a) Global shall receive the Company's interest in the License
Agreement, the Intellectual Property and the Technology in complete
satisfaction of all dissolution distributions due it hereunder and
(ii) Global shall make a cash payment equal to such excess to the
Company with the Company thereafter distributing such cash payment to
all other Members hereunder other than Global in proportion to their
respective and relative rights to participate in such liquidation
distribution hereunder.
(v) The positive balance (if any) of each Member's remaining
capital account (as determined after taking into account all capital
account adjustments for the Company's taxable year during which the
liquidation occurs) shall be distributed to the Members, either in
cash or in kind, as determined by the Managers, with any Property
distributed in kind being valued for this purpose at its Appraised
Value. Any such distributions to the Members in respect of their
capital accounts shall be made in accordance with the time
requirements set forth in Section 1.704-1(b)(2)(ii)(b)(2) of the
Treasury Regulations.
(vi) All remaining Property shall go and be distributed to all
Members in proportion to their respective Membership Interests as
determined on the date of such liquidation and distribution.
12.4 Completion of Winding Up; Certificate of Dissolution. The winding up
of the Company shall be completed when all debts, liabilities, and obligations
of the Company have been paid and discharged or reasonably adequate provision
therefor has been made, and all of the remaining property and assets of the
Company have been distributed to the Members. Upon the completion of winding up
of the Company, a Certificate of Dissolution shall be delivered to the Secretary
of State of Georgia for filing. The Certificate of Dissolution shall set forth
the information required by the Act.
12.5 Further Assurances. The Members shall comply with any applicable
requirements of applicable law pertaining to the winding up of the affairs of
the Company and the final distribution of its Property.
ARTICLE XIII
INDEMNIFICATION
13.1 Indemnification of Members, Managers and Officers. The Company shall
indemnify 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, including but not limited to
an action by or in the right of the Company, by reason of the fact that such
person is or was a Member, Manager or officer of the Company, or is or was
serving at the request of the Company as a manager, director, officer, employee
or agent of another company, corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding if such person acted in good
faith and in a manner he or she 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 or her 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 did not act in good
faith and in a manner which he or she reasonably believed to be in or
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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 or her
conduct was unlawful.
13.2 Discretionary Indemnification of Employees. A Majority in Interest of
the Voting Members may extend, on a case-by-case basis, the indemnification
provided in this Article to 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 by reason of the fact that such person is or was an employee or agent
of the Company other than a Member, Manager or officer of the Company.
13.3 Determination of Indemnitee's Compliance with Standard of Conduct. Any
indemnification under this Article, unless ordered by a court, shall be made by
the Company only as authorized in the specific case upon a determination that
indemnification of the Member, Manager, officer, employee or agent is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in this Article. The determination shall be made by a Majority in
Interest of the Voting Members.
13.4 Advance Payment of Expenses. Expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid by the Company in advance of the
final disposition of the action, suit or proceeding as authorized by a Majority
in Interest of the Voting Members in the specific case upon receipt of an
undertaking by or on behalf of the Member, Manager, officer, employee or agent
to repay such amount unless it shall ultimately be determined that he or she is
entitled to be indemnified by the Company as authorized in this Article.
13.5 Non-Exclusivity; Survival of Indemnification. The indemnification
provided by this Article shall not be deemed exclusive of any other rights to
which those seeking indemnification may be entitled under any other provision of
law, the Agreement, or any other agreement, vote of Voting Members or otherwise,
both as to action in his or her official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who has
ceased to be a Member, officer, employee or agent and shall inure to the benefit
of the heirs, executors and administrators of such a person; provided that no
such indemnity shall indemnify any person from or on account of such person's
conduct which was finally adjudged to have been knowingly fraudulent,
deliberately dishonest or willful misconduct.
13.6 Insurance on Indemnitees. In order to satisfy its obligations
hereunder, the Company may purchase and maintain insurance on behalf of any
person who is or was a Member, Manager, officer, employee or agent of the
Company and who is indemnified against liabilities under the provisions of this
Article.
13.7 Interpretation. For the purpose of this Article, references to "the
Company" include all constituent entities absorbed in a consolidation or merger
as well as the Company, so that any person who is or was a manager, director,
officer, employee or agent of such a constituent entity or is or was serving at
the request of such constituent entity as a manager, director, officer, employee
or agent of another company, corporation, partnership, joint venture, trust or
other enterprise shall stand in the same position under the provisions of this
Article with respect to the Company as such person would if he or she had served
the Company in the same capacity. For purposes of this Article, the term "other
enterprise" shall include employee benefit plans; the term "fines" shall include
any excise taxes assessed on a person with respect to an employee benefit plan;
and the term "serving at the request of the Company" shall include any service
as a Member, Manager, officer, employee or agent of the Company which imposes
duties
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on, or involves services by, such Member, Manager, officer, employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he or she
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Company" as referred to in this Article.
ARTICLE XIV
SPECIAL COVENANTS
14.1 Conflicting Interest Transactions. A Supermajority in Interest of the
Voting Members are hereby authorized to approve any "conflicting interest
transaction" in the manner and to the extent provided for in Section 00-00-000
of the Act, as the same may be amended from time to time, and any successor
provisions thereto. In particular, all Members hereby acknowledge and approve of
the Company's execution and performance of each of the Assignment Agreements,
the License Agreement, the Manufacturing Agreement and the Technology Agreement.
14.2 Managers and Members Shall Have No Exclusive Duty To Company. A
Manager or a Member may have other business interests and may engage in other
activities in addition to those relating to the Company. Neither the Company nor
any Member shall have any right, by virtue of this Agreement, to share or
participate in such other activities or investments of a Member or Manager or
the income or proceeds derived therefrom. Neither a Member nor a Manager shall
incur any liability to the Company or to any of the Members as a result of
engaging in any other business.
ARTICLE XV
MISCELLANEOUS PROVISIONS
15.1 No Partnership Intended, Except for Tax Purposes. The Members have
formed the Company under the Act, and expressly do not intend hereby to form a
partnership under any applicable laws of any applicable jurisdictions. The
Members do not intend to be partners one to another, or partners as to any third
party. To the extent any Member, by work or action, represents to another person
that any other Member is a partner or that the Company is a partnership, the
Member making such wrongful representation shall be liable to any other Member
who incurs personal liability by reason of such wrongful representation. The
Members, however, expressly intend to have the Company treated as a partnership
under the Code.
15.2 Rights of Creditors and Third Parties under Agreement. The Agreement
is entered into among the Company and the Members for the exclusive benefit of
the Company, its Members, and their successors and assignees. The Agreement is
expressly not intended for the benefit of any creditor of the Company or any
other person. Except and only to the extent provided by applicable statute, no
such creditor or third party shall have any rights under the Agreement or any
agreement between the Company and any Member with respect to any capital
contribution or otherwise.
15.3 Miscellaneous Provisions.
15.3.1 Entire Agreement. This Agreement together with the BusCall
Agreement, the Assignment Agreements, the Manufacturing Agreement, the License
Agreement, the Technology Agreement and the Purchase Agreement constitutes the
entire agreement between the parties and supersedes any prior understanding or
agreement among them respecting the subject matter hereof or thereof.
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15.3.2 Application of Georgia Law. This Agreement, and the application
of interpretation hereof, shall be governed exclusively by its terms and by the
laws of the State of Georgia, and specifically the Act.
15.3.3 Construction. Whenever the singular number is used in this
Agreement and when required by the context, the same shall include the plural
and vice versa, and the masculine gender shall include the feminine and the
neuter genders and vice versa.
15.3.4 Headings. The headings in this Agreement are inserted for
convenience only and are in no way intended to describe, interpret, define, or
limit the scope, extent or intent of this Agreement or any provision hereof.
15.3.5 Waivers. The failure of any party to seek redress for violation
of or to insist upon the strict performance of any covenant or condition of this
Agreement shall not prevent a subsequent act, which would have originally
constituted a violation, from having the effect of an original violation.
15.3.6. Rights and Remedies Cumulative. The rights and remedies
provided by this Agreement are cumulative and the use of any one right or remedy
by any party shall not preclude or waive the right not to use any or all other
remedies. Such rights and remedies are given in addition to any other rights the
parties may have by law, statute, ordinance or otherwise.
15.3.7 Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid, illegal or
unenforceable to any extent, the remainder of this Agreement and the application
thereof shall not be affected and shall be enforceable to the fullest extent
permitted by law.
15.3.8 Heirs, Successors and Assigns. Each and all of the covenants,
terms, provisions and agreements herein contained shall be binding upon and
inure to the benefit of the parties hereto and, to the extent permitted by this
Agreement, their respective heirs, legal representatives, successors and
assigns. Except as permitted under Article IX no party shall assign its rights,
entitlements, duties or obligations hereunder.
15.3.9 Counterparts; Copies. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. One or more copies of this Agreement may
be executed but it shall not be necessary, in making proof of the existence of
this Agreement, to provide more than one original copy.
15.3.10 Amendments. Any amendment to this Agreement shall be made in
writing and signed by all Members or their respective attorneys-in-fact.
15.3.11 Notices. Whenever this Agreement requires notice to be given
to any Member or Manager, the notice may be given by mail, in person by courier
delivery, or by overnight delivery. All notices required hereunder shall be
addressed and sent to the Member or Manager at his or her last known mailing
address as it appears on the books of the Company. Any such written notice shall
for all purposes of this Agreement be deemed as being delivered hereunder (i) if
mailed, three (3) days after being deposited with the United States Postal
Service, postage prepaid and designated as certified with return receipt
requested, and properly addressed to the addressee, (ii) if sent via overnight
delivery, one (1) day after being deposited with a nationally recognized next
day delivery service with all delivery fees prepaid or (iii) if personally
delivered, when so delivered. Any party may change the address located within
the United States at which such party is to receive
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notice hereunder by delivery of notice of such change of address to the Company
in accordance with this Section 15.3.11. Any party's failure or refusal to
accept any notice or the inability to deliver notice to any address last
reflected on the books and records of the Company shall constitute delivery of
such notice to the party to whom addressed.
15.3.12 No Engagement of Services. Nothing contained in this Agreement
shall be construed to constitute or be evidence of an implied agreement or
understanding on the part of the Company, to employ, engage or retain any Member
or Member's services for any specific period of time, except as expressly agreed
to in writing.
15.3.13 Representations and Warranties. Each party hereto hereby
represents and warrants to the other parties that (i) the entering into by him,
her or it of this Agreement, and the consummation by him, her or it of the
transactions contemplated hereby, does not and shall not violate any agreement
(whether express, implied or by operation of law) with any other person to which
he, she or it is a party or subject, and, (ii) this Agreement is binding upon
him, her or it pursuant to the laws of its domicile.
15.3.14 Force Majeure. Performance by any party under this Agreement
shall be excused for a period of three (3) months if such non-performance is
attributable to fires, strikes, riots, explosions, power blackouts, wars, labor
disputes, government requirements, civil or military authorities, acts of God or
the public enemy, outside vendors or transportation facilities, acts or
omissions of carriers or other causes beyond the control of the parties, whether
or not similar to the foregoing conditions. Upon the occurrence of a force
majeure circumstance, the party to the occurrence will immediately notify and
advise the other parties in writing.
15.4 Definitions. For purposes of this Agreement, unless the context
clearly indicates otherwise, capitalized words or phrases are (unless otherwise
defined in this Agreement) defined as follows:
15.4.1 "Advance Notification System" shall have the meaning provided
under the Purchase Agreement.
15.4.2 "Affiliate" shall have the meaning provided under the Purchase
Agreement. For purposes of this Agreement, the Company, BusCall, Global and
XxXxxxx shall not be deemed "Affiliates" of each other.
15.4.3 "Appraised Value" means with respect to any particular Company
asset as of any particular date the fair market value of such asset as mutually
agreed to in writing by a Majority in Interest of the Voting Members. If no such
agreement is reached within fifteen (15) days from and after the request of any
Voting Member that the Appraised Value of any asset be so agreed, then the
Appraised Value of such asset shall be the fair market value thereof as
determined by a duly qualified appraiser having a minimum of five (5) years
experience in making similar appraisals (a "Qualified Appraiser") as selected by
a Majority in Interest of the Voting Members; provided that if a Majority in
Interest of the Voting Members are unable to agree as to one Qualified
Appraiser, then Global shall select one Qualified Appraiser, XxXxxxx shall
select one Qualified Appraiser, and the two Qualified Appraisers so selected
shall appoint one additional Qualified Appraiser whereupon each Qualified
Appraiser so appointed hereunder shall prepare and deliver to each party seeking
such determination a written appraisal of the fair market value of the
particular Company Asset for which such Appraised Value is being determined and
such Appraised Value shall thereafter be conclusively determined as the average
of the two (2) written appraisals closest in value. Global shall be responsible
for all costs incurred in connection with any Qualified Appraiser selected by
Global, XxXxxxx shall be responsible for all costs incurred in connection with
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any Qualified Appraiser selected by XxXxxxx, and the Company shall be
responsible for all costs incurred in connection with any Qualified Appraiser
selected by either a Majority in Interest of the Voting Members or any third
Qualified Appraiser selected by the two Qualified Appraisers selected by each of
Global and XxXxxxx. Any determinations as to the value of any particular Company
asset made pursuant to this Agreement by any Qualified Appraiser(s) shall be
absolute, final and binding upon all of the parties hereto and shall not be
subject to arbitration, appeal or change.
15.4.4 "Assignment Agreements" shall have the meaning provided under
the Purchase Agreement.
15.4.5 "Built-in Gains" means allocations, pursuant to Code Section
704(c), taken into account in determining Tax Profits or Tax Losses, to the
extent such allocations are attributable to the excess of the agreed value over
the tax basis of property contributed to the Company.
15.4.6 "Built-in Losses" means allocations pursuant to Code Section
704(c), taken into account in determining Tax Profits and Tax Losses, to the
extent such allocations are attributable to the excess of the tax basis over the
agreed value of property contributed to the Company.
15.4.7 "BusCall" shall mean BusCall Properties, LLC, a Georgia limited
liability company.
15.4.8 "BusCall Agreement" means that certain Operating Agreement for
BusCall of even date herewith among BusCall, Global and XxXxxxx, as the same may
be amended or restated from time to time.
15.4.9 "Cash and Cash Equivalents" means all cash available to the
Company from all sources whatsoever including without limitation, any capital
contributions made to the Company from its Members, all Reserves and all
available borrowings or undrawn lines of credit available to the Company which
borrowings or lines of credit have been approved by a Majority in Interest of
the Voting Members in their respective sole discretions.
15.4.10 "Class A Membership Units" means those Membership Units issued
by the Company being designated as such under this Agreement and having those
respective rights and entitlements provided and being subject to those
respective restrictions imposed under this Agreement.
15.4.11 "Class B Membership Units" means those Membership Units issued
by the Company being designated as such under this Agreement and having those
respective rights and entitlements provided and being subject to those
respective restrictions imposed under this Agreement.
15.4.12 "Code" and "Regulations" mean, respectively, the Internal
Revenue Code of 1986, and the regulations promulgated thereunder, in either case
as amended from time to time. A reference to a Section of the Code shall refer
to the corresponding provision of any successor law. the Internal Revenue Code
of 1986, as amended, including effective date and transition rules (whether or
not codified), and any successor thereto. Any reference to a specific section or
sections of the Code shall be deemed to include a reference to any corresponding
provision of succeeding law.
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15.4.13 "Company" means NotiCom International, LLC, a Georgia limited
liability company.
15.4.14 "Deadlock Event" means the inability of a sufficient number of
the Voting Members to reach agreement with respect to any of the matters
concerning the operations of the Company, involving an amount of more than
$10,000, and which requires the consent of such number of the Voting Members
which inability continues for a period of 45 calendar days following the date on
which a written proposal for any such action is given by one Member to the other
Members. If at the end of such 45 day period no agreement is reached, then any
Member may give notice to the other of the occurrence of such Deadlock Event
which notice shall be deemed to have been given when personally delivered or on
the date such notice is mailed by registered or certified mail, return receipt
requested, addressed to the recipient Member's address of record as reflected on
the books of the Company.
15.4.15 "Development Services" means software and hardware development
services rendered, obtained, paid for or provided by XxXxxxx for, in the name,
and on behalf of the Company all of which Development Services shall inure to
the sole and exclusive benefit of the Company and all of which shall be valued
in the manner and methodology described in Exhibit A which is made a part of
this Agreement.
15.4.16 "Distributable Cash" means for any Fiscal Year means all cash,
revenues. proceeds and other funds received by the Company from its operations
including without limitation those received from the sale or disposition of all
or any part of the Company's Property (as hereinafter defined) and all debt
proceeds received under financing secured by all or any part of the Company's
Property, but excluding any and all capital contributions made to the Company by
its members less the sum of the following to the extent paid or set aside by the
Company: (i) all principal and interest payments on indebtedness of the Company
and all other sums due or paid to lenders of the Company; (ii) all cash
expenditures (including expenditures for taxes, fees [including those fees paid
to the Members other than in their capacities as Members of the Company
hereunder], maintenance, capital improvements and other similar operating costs)
incurred incident to the normal organization and operation of the Company's
business; (iii) such reserves as the Managers deem reasonably necessary for the
proper operation of the Company's business. Depreciation and other non-cash
charges and distributions to Members shall not be considered in determining
Distributable Cash. Any available cash in reduction of any capital reserve not
considered a return of capital shall be considered Distributable Cash.
15.4.17 "Fair Value" with respect to any particular Membership Units
as of any particular date shall mean the fair market value (the "Fair Value") of
such Membership Units as of such date as mutually agreed to in writing by the
Members who are making a mandatory capital call pursuant to Section 6.2,
("Non-Defaulting Members"), and the Members who are defaulting in the making of
such capital call ("Defaulting Members"). In the event the Non-Defaulting
Members and the Defaulting Members are unable to agree as to the Fair Value of
such Membership Interests, then the Non-Defaulting Members shall select and
engage an appraiser having a minimum of five (5) years experience in making
similar appraisals (a "Qualified Appraiser") which Qualified Appraiser shall
determine the Fair Value of each Membership Unit in the Company and shall
simultaneously provide a written appraisal report to both the Non-Defaulting
Members and the Defaulting Members disclosing and supporting the Fair Value so
determined. The Fair Value of any Membership Units as determined hereunder shall
be conclusive as to all parties hereto. In determining the Fair Value of any
Membership Units in the Company, the Qualified Appraisers shall not take into
consideration either (i) any amounts owed by any Member to any other Member or
the Company hereunder in connection with such Member's acquisition of any
Membership Units or any assets acquired or
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utilized by the Company in conducting its business operations hereunder or (ii)
any unpaid distributions owed or thereafter becoming owed by the Company to any
Member. The Company shall pay all costs associated with the engagement of the
Qualified Appraiser determining the Fair Value. Any determinations as to the
value of any Membership Units made pursuant to this Agreement by any Qualified
Appraiser(s) shall be absolute, final and binding upon all of the parties hereto
and shall not be subject to arbitration, appeal or change.
Notwithstanding the above, in the event that Fair Value has been determined
as set forth above within one year prior to the default of a Member in its
obligation to make a capital contribution pursuant to Section 6.2, then Fair
Value shall be the value determined pursuant to such appraisal adjusted as
follows: With respect to the period between the effective date of the appraisal
and the date immediately before the capital contribution of the Nondefaulting
Member, the quotient of (i) the sum of all contributions to the capital of the
Company increased by Tax Profits, excluding Built-in Gains, Built-in Losses, and
two-thirds the cumulative Tax Profits allocable to Global under Section 7.1.3,
and decreased by (i) Tax Losses, excluding Built-in Gains and Built-in Losses,
and (ii) distributions under Section 7.5 and 7.6 other than distributions to
Global of the Preferred Global Distribution Balance divided by (2) the aggregate
number of Membership Units outstanding immediately before the capital
contribution was made by the Nondefaulting Member.
15.4.18 "Field" shall have the meaning provided such term under the
Purchase Agreement.
15.4.19 "Fiscal Year" means the Company's fiscal year, which shall be
the year ending December 31; provided, however, that the parties shall apply to
the U.S. Department of Treasury for a fiscal year which is the same as the
fiscal year of XxXxxxx which, if approved, shall be the fiscal year of the
Company.
15.4.20 "Global Preference Percentage" shall be the sum of the
following: (i) 50%; and (ii) the percentage determined by dividing Global's
capital account by twice the total of all Members' capital accounts. Pursuant to
such formula, the initial Global Preference Percentage is 75%.
15.4.21 "Intellectual Property" shall have the meaning provided such
term under the Purchase Agreement.
15.4.22 "License Agreement" shall have the meaning provided such term
under the Purchase Agreement.
15.4.23 "Majority in Interest" means (i) as it applies to Members,
those Members owning more than fifty (50%) percent of all issued and outstanding
Class A Membership Units of the Company and (ii) as it applies to Managers,
those Managers constituting a majority of all persons then serving as Managers
or those members of the Board of Managers constituting a majority of all persons
then serving on the Board of Managers hereunder.
15.4.24 "Managers" means any entities or persons who shall be
appointed or become a manager or a member of the board of managers of the
Company pursuant to the applicable provisions of this Agreement.
15.4.25 "Manufacturing Agreement" shall have the meaning provided such
term under the Purchase Agreement.
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15.4.26 "Market Value" with respect to any particular Membership Units
as of any particular date shall mean the fair market value of such Membership
Units as of such date as mutually agreed to in writing by the Members who are
potentially disposing of such Membership Units (the "Selling Members") and the
Members who are potentially acquiring such Membership Units (the "Acquiring
Members"). In the event the Selling Members and the Acquiring Members are unable
to agree as to the Market Value of such Membership Interests, then the Acquiring
Members shall select and engage an appraiser having a minimum of five (5) years
experience in making similar appraisals (a "Qualified Appraiser") which
Qualified Appraiser shall determine the fair market value (the "Initial Proposed
Value") of each Membership Unit in the Company and shall simultaneously provide
a written appraisal report to both the Selling Members and the Acquiring Members
disclosing and supporting the Initial Proposed Value so determined hereunder. If
within ten (10) days after the Selling Members receive such appraisal report the
Selling Members fail to notify the Acquiring Members as to the Selling Members'
disagreement with the Initial Proposed Value, then the Market Value of each
Membership Unit shall be the Initial Proposed Value. If within ten (10) days
after the Selling Members' receipt of such written appraisal report, the Selling
Members notify the Acquiring Members that they disagree with the Initial
Proposed Value, then the Selling Members shall select and engage a Qualified
Appraiser which Qualified Appraiser shall determine the fair market value (the
"Second Proposed Value") of each Membership Unit in the Company and shall
simultaneously provide a written appraisal report to both the Selling Members
and the Acquiring Members disclosing and supporting the Second Proposed Value so
determined hereunder. If the Second Proposed Value does not exceed the Initial
Proposed Value by more than ten percent (10%) of the Initial Proposed Value,
then the Market Value of each Membership Unit shall equal the average of the
Initial Proposed Value and the Second Proposed Value. If the Second Proposed
Value exceeds the Initial Proposed Value by more than ten percent (10%) of the
Initial Proposed Value, then the two Qualified Appraisers previously selected
shall select a third Qualified Appraiser who shall determine the fair market
value (the "Third Proposed Value") of each Membership Unit in the Company and
shall simultaneously provide a written appraisal report to both the Selling
Members and the Acquiring Members disclosing and supporting the Third Proposed
Value so determined hereunder. In the event a third Qualified Appraiser is
selected hereunder, then the Market Value of each Membership Unit in the Company
shall equal the average of the two of the Initial Proposed Value, the Second
Proposed Value, and the Third Proposed Value which are closest in amount. The
Market Value of any Membership Units as determined hereunder shall be conclusive
as to all parties hereto. In determining the fair market value of any Membership
Units in the Company, the Qualified Appraisers shall not take into consideration
either (i) any amounts owed by any Member to any other Member or the Company
hereunder in connection with such Member's acquisition of any Membership Units
or any assets acquired or utilized by the Company in conducting its business
operations hereunder or (ii) any unpaid distributions owed or thereafter
becoming owed by the Company to any Member. The Acquiring Members shall pay all
costs associated with the engagement of the Qualified Appraiser determining the
Initial Proposed Value, the Selling Members shall pay all costs associated with
the engagement of the Qualified Appraiser determining the Second Proposed Value,
and each of the Selling Members and the Acquiring Members shall pay one-half
(1/2) of all costs associated with the engagement of the Qualified Appraiser
determining the Third Proposed Value; provided, that should the Acquiring
Members fail to acquire the Membership Units subject to appraisal hereunder by
reason of the Acquiring Member's withdrawal from the acquisition process
initiated by the Acquiring Members under this Agreement, then all costs
associated with the engagement of all Qualified Appraisers hereunder shall be
paid by the Acquiring Members. Any determinations as to the value of any
Membership Units made pursuant to this Agreement by any Qualified Appraiser(s)
shall be absolute, final and binding upon all of the parties hereto and shall
not be subject to arbitration, appeal or change.
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15.4.27 "Member" means each of Global, XxXxxxx and each other person
or entity who both hereafter owns any Membership Units in the Company and is
admitted to the Company as a Member all as provided in this Agreement.
15.4.28 "Membership Interest" means with respect to one or more
Members as of any particular date the total number of Membership Units
(including Class A Membership Units and Class B Membership) owned by such Member
or Members expressed as a percentage or fraction of the total number of
Membership Units (including Class A Membership Units and Class B Membership
Units) then issued and outstanding in the Company all determined as of such
date.
15.4.29 "Membership Units" means all ownership interests in the
Company issued by the Company (including without limitation all Class A
Membership Units and Class B Membership Units) and all incidental rights
attendant to such ownership interests bestowed upon the owner thereof hereunder.
15.4.30 "Preferred Global Return" means the sum of One Million Three
Hundred Fourteen Thousand Dollars ($1,314,000).
15.4.31 "Preferred Global Allocation Balance" means as of any
particular date, the difference between (i) the Preferred Global Return less
(ii) the difference between (a) the aggregate allocation of Tax Profits made by
the Company to Global under this Agreement less (b) the aggregate allocation of
Tax Profits made by the Company to XxXxxxx under this Agreement.
15.4.32 "Preferred Global Distribution Balance" means as of any
particular date, the difference between (i) the Preferred Global Return less
(ii) the difference between (a) the aggregate distributions made by the Company
to Global under this Agreement less (b) the aggregate distributions made by the
Company to XxXxxxx under this Agreement.
15.4.33 "Property" at any particular time, shall mean the interest in
all real and personal property of the Company and any other assets or property
(tangible or intangible, xxxxxx, inchoate, fixed or contingent, including cash
and cash equivalents) of the Company including without limitation the
Technology. It is specifically contemplated that the Company may own assets
either directly in its own name or indirectly through its acquisition of an
ownership interest in other third party entities with the express intention that
the Company's interest in any and all third party entities shall constitute
Property hereunder.
15.4.34 "Purchase Agreement" that certain Purchase Agreement of even
date herewith between Global and XxXxxxx, as the same may be amended or restated
from time to time.
15.4.35 "Reserves" shall mean with respect to any fiscal period, funds
set aside or amounts allocated during such period to reserves which shall be
maintained in amounts deemed sufficient or necessary by the Managers to meet the
needs of the business of the Company, including: for (i) working capital to pay
taxes, insurance, debt service or other costs or expenses incident to the
ownership or operation of the Company's business and (ii) contingent and
unforeseen liabilities incurred in the ownership or operation of the Company's
business, in each case which may become due and payable within any period and
for which the cash to make such payments may not be generated by operations
during the period.
15.4.36 "Successor in Interest" shall mean with respect to any Member,
any entity succeeding to all or substantially all of the assets or properties
owned by such Member by reason of any merger, stock sale, recapitalization,
voluntary corporate reorganization (other than pursuant
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to any federal bankruptcy statutes or any other laws affecting creditor's rights
or constituting an assignment for the benefit of creditors), consolidation or
sale of all or substantially all of the assets of or involving such Member.
15.4.37 "Supermajority in Interest of the Voting Members" means (i) as
it applies to Members, those Members owning more than seventy-five percent (75%)
of all issued and outstanding Class A Membership Units of the Company and (ii)
as it applies to Managers, those Managers constituting seventy-five percent
(75%) of all persons then serving as Managers or those members of the Board of
Managers constituting seventy-five percent (75%) of all persons then serving on
the Board of Managers hereunder.
15.4.38 "Tax Profits" and "Tax Losses" for any taxable year mean the
net income or loss of the Company as reported for federal income tax purposes as
to such taxable year, calculated by (i) including all amounts allocated to all
Members under Code Sections 702(a)(1) through 702(a)(8), (ii) increased by
tax-exempt income and (iii) decreased by expenditures described in Code Section
705(a)(2)(B).
15.4.39 "Technology" shall have the meaning provided such term under
the Purchase Agreement.
15.4.40 "Technology Agreement" shall have the meaning provided such
term under the Purchase Agreement.
15.4.41 "Transfer" means any disposition, directly or indirectly, by
operation of law or otherwise, voluntarily or involuntarily, by intestacy, will,
trust or estate distribution, or inter vivos action, including any sale,
assignment, gift, exchange, pledge, encumbrance or other creation of a security
interest, attachment, creation of any interest in the Company or distribution
from the Company for the benefit of creditors, or (without limitation) other
transfer or disposition of a Member's interest in the Company or any right,
title or interest therein, whether absolute or as security, whether voluntary or
involuntary, including any Transfer by operation of law; "Transfer" when used as
a verb means to effect or attempt to effect a Transfer.
15.4.42 "Voting Members" means all Members owning any Class A
Membership Units in the Company.
IN WITNESS WHEREOF, the parties have entered into this Agreement to be
effective as of the date first written above.
By: GLOBAL RESEARCH SYSTEMS, INC. GLOBAL RESEARCH SYSTEMS, INC.
MEMBER
By: /s/ M. Xxxxx Xxxxx By: /s/ M. Xxxxx Xxxxx
----------------------------- --------------------------------
Its President Its President
Attest: /s/ Xxxx Xxxxx Attest: /s/ Xxxx Xxxxx
------------------------- -----------------------------
Its Secretary Its Secretary
(CORPORATE SEAL) (CORPORATE SEAL)
Address: 000 Xxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxxx, Xxxxxxx 00000
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By: XXXXXXX, INC., XXXXXXX, INC.
MEMBER
By: /s/ Xxxxx X. XxXxxxx By: /s/ Xxxxx X. XxXxxxx
--------------------------- ------------------------------
Its President Its President
Address: 0000X Xxxxxxx Xxxx
Xx. Xxxxx, M 63124
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EXHIBIT "A"
Development Services
1. All software development services shall be performed through subcontractors
who shall assign all rights, title and interest in and to the work product
produced in the or through the performance of such services to the Company.
All such software development services shall be valued at the amount set
forth in the relative agreements under which the same are performed which
agreement is mutually satisfactory to both Global and XxXxxxx.
2. All hardware development services shall be performed as mutually determined
by Global and XxXxxxx. All such services shall be valued at XxXxxxx'x cost
if performed by a third party contractor and shall be valued at XxXxxxx'x
direct and indirect cost if performed by XxXxxxx. All such costs shall be
subject to reasonable verification by Global.
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