EXHIBIT 2.1
EXECUTION COPY
LIMITED LIABILITY COMPANY AGREEMENT
OF XXXXXXXXX LLC
By and Between Xxxxxxxxx, Inc. and Trace Chemicals, Inc.
Effective as of September 23, 1998
TABLE OF CONTENTS
Page
Article I DEFINITIONS 1
Article II ORGANIZATION AND PURPOSE 11
2.1 Organization. 11
2.2 Name of the Company. 11
2.3 Purpose. 11
2.4 Term. 11
2.5 Principal Office. 11
2.6 Registered Agent. 11
2.7 Members. 12
2.8 Management by Board. 12
2.9 Certificate of Membership Interest. 12
Article III CAPITAL 12
3.1 Initial Capital Contributions. 12
3.2 No Additional Capital Contributions Required. 12
3.3 No Interest on Capital Contributions; Deficit Account. 12
3.4 Return of Capital Contributions. 12
3.5 Form of Return of Capital. 12
3.6 Capital Accounts. 13
3.7 Allocations. 14
3.8 Income Tax Allocations. 15
3.9 Currency. 15
3.10 Distributions. 16
Article IV MANAGEMENT 16
4.1 Board. 16
4.2 Managers; Appointment. 20
4.3 Power to Bind Company. 21
4.4 Vacancies. 21
4.5 Quorum. 22
4.6 Meetings. 22
4.7 Action Without a Meeting. 22
4.8 Proxy. 22
4.9 Meeting by Telephone or Video Conference. 23
4.10 Resignations and Removal. 23
4.11 Compensation and Expenses. 23
4.12 Board Chairman. 23
4.13 Deadlock. 23
Article V MEETINGS OF MEMBERS 27
5.1 Meetings of and Voting by Members. 27
5.2 Services; Intercompany Dealings. 27
5.3 Duty of Members. 27
5.4 Resignation or Withdrawal. 28
Article VI OFFICERS 28
6.1 Officers. 28
6.2 Election and Term of Office. 28
6.3 Removal. 28
6.4 Vacancies. 28
6.5 President. 28
6.6 Vice Presidents. 29
6.7 Secretary. 29
6.8 Chief Financial Officer. 29
6.9 Remuneration. 29
Article VII INDEMNIFICATION; LIMITATION OF LIABILITY; OTHER
ACTIVITIES; 29
CONFIDENTIALITY 30
7.1 Indemnification by the Company. 30
7.2 Notice to Company. 30
7.3 Contest by Company. 30
7.4 Advances of Expenses by Company. 30
7.5 Indemnification by a Member. 31
7.6 Notice to Member. 31
7.7 Contest by Member. 31
7.8 Advances of Expenses by Member. 31
7.9 Other. 32
7.10 Effect of Interest in Transaction. 32
7.11 No Third Party Rights. 32
7.12 Insurance. 32
7.13 Limitation of Liability. 33
7.14 Other Activities. 33
7.15 Confidential Information. 34
Article VIII TRANSFERS AND ADMISSION OF NEW MEMBERS 36
8.1 Preemption Rights; Right of First Offer; Rights of First
Refusal. 36
8.2 Involuntary Transfers. 40
8.3 Change of Control 41
8.4 Admission of Transferee. 42
8.5 Rights of Unadmitted Transferees. 43
8.6 No Right to Payment on Disassociation. 43
8.7 Preemptive Rights. 43
8.8 Waiver. 43
Article IX DISSOLUTION AND LIQUIDATION 44
9.1 Events of Dissolution. 44
9.2 Not Dissolution. 44
9.3 Procedure for Winding Up and Dissolution. 44
9.4 Termination. 44
Article X BOOKS, RECORDS, AND ACCOUNTING 44
10.1 Bank Accounts. 44
10.2 Books and Records. 45
10.3 Annual Accounting Period. 45
10.4 Reports. 46
10.5 Tax Matters Member. 47
10.6 Tax Elections. 47
10.7 Title to Company Property. 47
Article XI AMENDMENTS; GENERAL PROVISIONS 48
11.1 Assurances. 48
11.2 Complete Agreement. 48
11.3 Applicable Law. 48
11.4 Section Titles. 48
11.5 Binding Provisions. 48
11.6 Notice. 49
11.7 Terms. 49
11.8 Severability of Provisions. 50
11.9 Alternative Dispute Resolution. 50
11.10 Counterparts. 51
11.11 Estoppel Certificate. 51
11.12 Amendment 51
11.13 Consents. 51
11.14 Legends. 52
11.15 Parties in Interest. 52
11.16 Counting of Time. 52
11.17 English Language. 52
11.18 Exhibits. 52
LIMITED LIABILITY COMPANY AGREEMENT
THIS LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement")
is effective as of September 23, 1998 (the "Effective Date"), by
and between XXXXXXXXX, INC., a corporation organized under the
laws of the State of Minnesota, United States and TRACE
CHEMICALS, INC., a corporation organized under the laws of the
State of Nevada, United States and those parties listed on
Exhibit A as the same may be amended from time to time.
NOW, THEREFORE, for good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, the
parties, intending legally to be bound, agree as follows:
Article I
DEFINITIONS
The following capitalized terms shall have the meaning
specified in this Article I. Other terms are defined in the text
of this Agreement, and, throughout this Agreement, those terms
shall have the meanings respectively ascribed to them:
"Act" means the Delaware Limited Liability Company Act, as the
same may be amended from time to time.
"Active Ingredient" or "Active Ingredients" means any and all
naturally occurring or synthetically produced substances,
compounds, mixtures, or Biologicals, whether now existing or
hereafter developed, which prevent, destroy, repel or mitigate
any Pest, or accelerate or retard the rate of growth, germination
or maturation, or otherwise protect, or alter the behavior of,
seeds, stored grains, or plants or the products thereof, whether
now existing or hereafter developed.
"Affiliate" or "Affiliates" means, with respect to any Person,
any other Person directly or indirectly, through one or more
intermediaries, controlling, controlled by, or under common
control with, such first mentioned Person. As used in this
definition of Affiliate, the term "control" (including
"controlled by" or "under common control with") means the
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person,
whether through ownership of voting securities, as trustee, by
contract, or otherwise.
"Agency" or "Agencies" means individually and collectively, (i)
the United States Environmental Protection Agency, and any other
federal, state, local, provincial or other governmental or
regulatory agency in the Territory which now regulates, or may in
the future regulate, the use, development, registration or sale
of Active Ingredients or Formulations; and (ii) the United States
Patent and Trademark Office, the United States Copyright Office,
and any other federal, state, local, provincial or other
governmental or regulatory agency in the world which now
regulates, or may in the future regulate, the protection, use, or
registration of Technology.
"Agreement" shall have the meaning given to such term in the
Preamble.
"Beneficial Owner" (including with correlative meanings, the term
"Beneficially Owned") means with respect to any Capital Stock,
any Person, who would be deemed a Beneficial Owner under Rule
13d-3 (or any successor rule of similar import) under the
Exchange Act.
"Biological" or "Biologicals" means any and all naturally
occurring or synthetically produced biological organisms which
prevent, destroy, repel or mitigate any Pest, or accelerate or
retard the rate of growth, germination or maturation, or
otherwise protect, or alter the behavior of, seeds, stored
grains, or plants or the products thereof.
"Board" means the individuals appointed by the Members to serve
as Managers pursuant to the provisions of Article IV.
"Bona Fide Offer" means a written offer to purchase all of a
Selling Member's Membership Interest made by a Person who is not
an Affiliate of the Selling Member, containing at least the
following terms of purchase: the offered price, payment terms,
closing date and any significant closing conditions.
"Calculated Purchase Price" means, as to any party's Membership
Interest, an amount equal to the Calculated Purchase Price of the
Company multiplied by the percentage ownership interest in the
Company represented by such Membership Interest. Calculated
Purchase Price, as to the Company, shall mean an amount
denominated in United States Dollars, equal to the product of (a)
the total EBIT of the Company for the twenty-four (24) month
period preceding the date of the revised Soliciting Offer divided
by two (2) and (b) 13.7.
"Capital Account" shall have the meaning given to such term in
Section 3.6.
"Capital Contribution" means the total amount of cash and the
fair market value of any other assets contributed (or deemed
contributed under Regulation Section 1.704-1(b)(2)(iv)(d)) to the
Company by a Member, net of liabilities assumed by the Company or
to which the assets are subject.
"Capital Stock" means any and all (i) shares, interest, units,
participations or other equity equivalents of or equity interests
(however designated) in capital stock of any Person including
shares of preferred or preference stock, (ii) partnership
interest (whether general or limited) in any Person which is a
partnership, (iii) membership interests or limited liability
company interests in any limited liability company, and (iv)
other equity or ownership interests in any Person.
"Capital Transaction" means any transaction not in the ordinary
course of business that results in the Company's receipt of cash
or other consideration other than Capital Contributions,
including, without limitation, proceeds of sales or exchanges or
other dispositions of property not in the ordinary course of
business, financings, refinancings, condemnations, recoveries of
damage awards, and insurance proceeds.
"C&K" means Crompton & Xxxxxxx Corporation, a corporation
organized under the laws of the Commonwealth of Massachusetts,
United States.
"Certificate of Formation" means the certificate of formation
signed by an authorized Person, pursuant to which the Company was
formed, as originally filed with the Secretary of State, as the
same may be amended from time to time in writing signed by an
authorized Person.
"Change of Control" shall mean, with respect to any Member:
(i) any event upon which any Person, other than an
Affiliate of such Member, becomes the Beneficial Owner of Capital
Stock representing: (a) greater than fifty percent (50%) of the
Voting Power of such Member or its Parent; or (b) greater than
thirty percent (30%) of the Voting Power of such Member or its
Parent if any Capital Stock in such Member or its Parent is
Publicly Traded and if no other Person, immediately after the
occurrence of such event, is the Beneficial Owner of more than
thirty percent (30%) of the Voting Power of such Member or its
Parent; in either of (a) or (b), if and only if such Person
and/or any of its Affiliates is engaged in a Crop Protection
Business or is under an obligation to acquire a Crop Protection
Business from other than a Member or its Affiliates; and/or
(ii) any event upon which any Person(s), other than an
Affiliate of such Member, becomes the Beneficial Owner of Capital
Stock representing: (a) greater than fifty percent (50%) of the
Voting Power of such Member or its Parent; or (b) greater than
thirty percent (30%) of the Voting Power of any such Member or
its Parent if any Capital Stock in such Member or its Parent is
Publicly Traded and if no other Person, immediately after the
occurrence of such event, is the Beneficial Owner of more than
thirty percent (30%) of such Voting Power; in either of (a) or
(b), if and only if the direct or indirect ownership of the
Membership Interest of such Member constitutes all or
substantially all of the assets of such Member or its Parent
whose Capital Stock is the subject of this provision; and/or
(iii) the sale, transfer or other disposition (in one
transaction or a series of transactions), to any Person(s), other
than an Affiliate of such Member, of all or a material part of
the assets of the Crop Protection Business of such Member and its
Affiliates, taken as a whole as of the Effective Date of this
Agreement, used in the development and manufacture of Active
Ingredients and Formulations with applications to Seed Treatment;
and/or
(iv) any event upon which any Person(s), other than an
Affiliate of such Member, becomes the Beneficial Owner (in one
transaction or a series of transactions) of Capital Stock
representing: (a) greater than fifty percent (50%) of the Voting
Power of any Affiliate(s) of such Member, other than a Parent,
(an "Indirect Affiliate"); or (b) greater than thirty percent
(30%) of the Voting Power of any such Indirect Affiliate if any
Capital Stock of such Indirect Affiliate or Parent is Publicly
Traded and if no other Person, immediately after the occurrence
of such event, is the Beneficial Owner of more than thirty
percent (30%) of such Voting Power; in either of (a) or (b), if
and only if such Indirect Affiliate(s) owns all or a material
part of the assets of the Crop Protection Business of such Member
and its Affiliates, taken as a whole as of the Effective Date of
this Agreement, used in the development and manufacture of Active
Ingredients and Formulations with applications to Seed Treatment;
and provided, however, the provisions of items (ii), (iii) and
(iv) above notwithstanding, that the sale, transfer, or other
disposition directly or indirectly, by way of Beneficial
Ownership or otherwise to a Person (in one transaction or a
series of related transactions) of ownership or control of both
(1) all or substantially all of the assets of the Crop Protection
Business of such Member and its Affiliates taken as a whole as of
the Effective Date of this Agreement and (2) the Membership
Interest of such Member, shall not constitute a Change of Control
for purposes of this Agreement if such Person and/or any of its
Affiliates is not engaged in the Crop Protection Business; and
further provided, however, the provisions of items (i) through
(iv) and the first proviso above notwithstanding, that any spin-
off, restructuring or other transaction in which all or
substantially all of the Crop Protection Business of such Member
and its Affiliates taken as a whole as of the Effective Date of
this Agreement becomes owned (x) by an independent company or (y)
by a joint venture company whether operated as a corporation,
limited liability company, partnership, limited partnership or
other form of entity, in which independent company or joint
venture such Member or Affiliate thereof owns fifty percent (50%)
or more of the Capital Stock or Voting Power therein, shall not
in any such case constitute a Change of Control if such
independent company or joint venture company undertakes in
writing, in a form and substance reasonably satisfactory to the
other Member, to perform the obligations of an Affiliate pursuant
to the Marketing Agreement and the Post-Exercise Agreement.
"Code" means the Internal Revenue Code of 1986, as may be amended
from time to time, or any corresponding provision of any
succeeding law.
"Company" means the limited liability company formed in
accordance with this Agreement.
"Compete" or "Competes" means to materially compete in all or a
portion of the Seed Treatment business, or to take substantial
steps to materially compete in all or a portion of the Seed
Treatment business.
"Competitor" means a Person that Competes in the Territory,
either directly or indirectly.
"Confidential Information" means all confidential and/or
proprietary information of a Person (the "Owning Person"),
whether arising under statute, common law or otherwise, whether
belonging wholly or in part to the Owning Person, and whether
subject to license or other grant of rights by or to the Owning
Person as licensor or as licensee; but specifically excluding
information that is generally known to those skilled in a
chemical or life sciences field, including without limitation,
the agrochemical field, and information as to a Person (a
"Receiving Person"), and only as to such Receiving Person, that
(1) is lawfully known to such Receiving Person prior to the
disclosure by the Owning Person to such Receiving Person; (2) is
lawfully acquired by such Receiving Person, rightfully furnished
to such Receiving Person, or Publicly Available to such Receiving
Person; (3) is information which such Receiving Person can
document is independently developed by such Receiving Person; (4)
is lawfully reverse engineered by such Receiving Person; or (5)
is required to be disclosed by such Receiving Person pursuant to
law, provided such Receiving Person uses reasonable efforts to
give the Owning Person reasonably detailed prior notice of such
required disclosure and an opportunity to oppose such disclosure.
"Covered Company Person" shall have the meaning given to such
term in Section 7.1.
"Covered Member Person" shall have the meaning given to such term
in Section 7.5
"Crop Protection Business" means the manufacture, sale or
distribution of Active Ingredients, Formulations, Equipment or
Other Products and/or Services.
"Deadlock" means, a situation where there is more than one (1)
Member, and a matter presented to the Board at a meeting or by a
proposed written consent has been considered and voted on by the
Board, and thirty (30) days after the date of the first vote on
the matter, there continues to be a failure of the Board to reach
a decision with respect to such matter, because the voting
Managers are divided, with three (3) voting Managers voting in
favor of the matter or abstaining from voting, and three (3)
voting Managers voting against such matter or abstaining from
voting.
"Dispute" means any dispute, controversy or claim arising out of
or relating to this Agreement, including without limitation, an
alleged failure of a Member to perform any of its obligations
under this Agreement, or any claim which relates to the
Confidential Information of any Member; but, specifically
excluding therefrom, a Deadlock. For purposes of this Agreement,
any disagreement as to whether any dispute, controversy or claim
is a "Dispute", to be resolved pursuant to Section 11.9 hereof
or a "Deadlock" to be resolved pursuant to Section 4.13 hereof,
shall be deemed to be a "Dispute."
"Distribution" or "Distributions" means any cash paid to a Member
by the Company from the operations or capital of the Company,
other than for the payment for goods, equipment or services.
"EBIT" means for any period, net income or loss, plus, to the
extent deducted in computing net income, interest payments and
income taxes paid and/or accrued during such period.
"Effective Date" shall have the meaning given to such term in the
Preamble.
"Equipment" means any and all equipment (i) of a Member or its
Affiliates, that is specifically designed for or directly
applicable to Seed Treatment uses or applications, and (ii) that
the Company or its Affiliates has the right to manufacture,
develop, market or sell whether for Seed Treatment uses and
applications or for other than Seed Treatment uses or
applications, including without limitation, seed treaters, size
rights, screens, cylinders, and samplers.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
in effect on the date in question, unless otherwise specifically
provided.
"Fair Market Value" means, as to any Member's Membership
Interest, an amount equal to the Fair Market Value of the Company
multiplied by the percentage ownership interest in the Company
represented by such Membership Interest. Fair Market Value, as
to the Company, shall mean the cash fair market value that an
unrelated person would pay for one hundred percent (100%)
ownership interest in the Company, in light of all relevant
factors, in an arm's length transaction in which neither party is
compelled to buy or sell, and without any discount or premium
representing control of the enterprise. The Fair Market Value of
the Company shall be determined using a valuation methodology
that values the Company as a going concern and does not take into
account any diminution in value caused by the withdrawal of
either party from the Company or the dissolution of the Company
in accordance with Article IX. The parties shall cooperate with
all reasonable requests from the Neutral Investment Bank for
information necessary for the making of any such determination.
"Fiscal Year" means the fiscal year of the Company, which shall
be the year ending the Saturday closest to the last day of
December.
"Formulation" or "Formulations" means a substance or compound, or
mixture of substances or compounds, which include one or more
Active Ingredients, whether now existing or hereafter developed.
"Governing Body" shall have the meaning given to such term in
Section 7.14.4.
"HSR Act" means the Xxxx Xxxxx Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"Initial Capital Contribution" shall have the meaning given to
such term in Section 3.1.
"Initial Member" or "Initial Members" means Xxxxxxxxx, Inc. and
Trace Chemicals, Inc.
"Interest" or "Interests" means an Interest Holder's share of the
profits and losses of the Company, and right to receive
Distributions from the Company; but, specifically excluding any
Membership Rights.
"Interest Holder" means any Person who holds an Interest, whether
as a Member or an unadmitted assignee of a Member.
"Invest or Participate" means: (a) to acquire as a principal,
partner, shareholder, member, Beneficial Owner or in any similar
capacity, Capital Stock in a Person in excess of five percent
(5%) of the total Capital Stock of such Person; or (b) by
contract or otherwise, to manage, operate or finance a Person, or
to participate in the management, operation or financing of a
Person, or to act as agent, representative, consultant or in any
similar capacity for a Person, or to permit a Person to use the
name of a Member or its Affiliate.
"Involuntary Transfer" means each of the following: (i) the
appointment by a court of competent jurisdiction of a receiver,
liquidator, assignee, custodian, trustee, sequestrator or other
similar agent for a Member or for any substantial part of a
Member's assets or property; (ii) the ordering by a court of
competent jurisdiction of the winding up or liquidation of a
Member's affairs; (iii) the filing with respect to a Member of a
petition in any such involuntary case, involving a Member or its
parent under any bankruptcy, insolvency or other similar law now
or hereafter in effect, which petition remains undismissed for a
period of ninety (90) days or which is dismissed or suspended
pursuant to Section 305 of the Federal Bankruptcy Code (or any
corresponding provision of any future United States bankruptcy
law); (iv) the commencement by a Member of a voluntary case under
any bankruptcy, insolvency or other similar law now or hereafter
in effect; (v) the consent by a Member to the entry of an order
for relief in an involuntary case under any such law, or the
written consent of a Member to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar agent for a Member or
for any substantial part of a Member's assets or property; (vi)
the making by a Member of any general assignment for the benefit
of creditors; (vii) the failure by a Member generally to pay its
debts as such debts become due; (viii) the carrying out by a
court of competent jurisdiction or an authorized Person of a
foreclosure, execution sale or similar realization proceedings by
any Person (a) who or that has a pledge of or has been granted a
lien, security interest or other encumbrance, or (b) who or that
has an order of attachment, garnishment or a charging or similar
order, in or against any of the Interests; or (ix) any other
divestiture of a Member by court order, self-help or other
private action.
"Majority Vote" means, (i) in the case of a reconstituted board
pursuant to Section 4.13.3, the affirmative vote of at least
three (3) of the five (5) Managers on the Board (excluding the
President); (ii) in the case of there being only one Member, the
affirmative vote of at least two (2) of the three (3) voting
Managers on the Board (excluding the President); and (iii) in all
other cases, the vote of at least four (4) of the six (6)
Managers on the Board (excluding the President), in all cases at
a meeting of which a quorum of Managers is participating in
person, by conference telephone, video or similar communications
equipment, or by proxy.
"Manager" or "Managers" means the individuals from time to time
designated pursuant to Article IV of this Agreement as managers
of the Company.
"Marketing Agreement" means that certain Marketing Rights and
Margin Agreement by and among C&K, the Company, Partnership,
Bayer Corporation and Bayer Inc. to be dated as of November ,
1998.
"Member" or "Members" means the Initial Members signing this
Agreement and any Person who subsequently is admitted as a member
of the Company.
"Membership Interest" means a Member's entire interest in the
Company, including without limitation, a Member's Interest and a
Member's Membership Rights.
"Membership Rights" means the right to: (i) inspect the
Company's books and records; (ii) appoint Managers and to
participate in the business, affairs and management of the
Company; and (iii) vote on, consent to or otherwise participate
in any decision or action of the Members pursuant to this
Agreement or the Act; provided, however, that Membership Rights
does not include any right to disclosure of the existence of any
arrangements or agreements, or any terms thereof, that are
protected by confidentiality, secrecy or similar agreements with
third parties, or any other arrangements or agreements that, if
disclosed, would result in the Company being in breach of such
arrangements or agreements.
"Member Vote" means, in the case of two Members, the affirmative
vote of both Members, and in the case of one Member, the
affirmative vote of that one Member.
"Neutral Investment Bank" means an investment banking firm of
international reputation which has not been engaged by a Member
or its Affiliates (a) at any time regarding matters related to
the Company; and (b) in the last two (2) years for any other
matter, and which the Member and its Affiliates agree not to
engage in the subsequent two (2) years.
"Operative Agreements" means the Marketing Agreement, the Pre-
Exercise Agreement, the Post-Exercise Agreement and the Cross
License Agreements, the forms of each of which are attached
hereto as Exhibit D, and incorporated herein by reference.
"Other Products and/or Services" means (i) any products for Seed
Treatment uses or applications, other than Active Ingredients,
Formulations and Equipment including, without limitation,
colorants, dyes, pigments and coatings; and (ii) any activities
of the Company, other than those activities set forth in Sections
4.2 and 4.3 of the Pre-Exercise Agreement and the Post-Exercise
Agreement, specifically designed for or directly applicable to
Seed Treatment uses or applications.
"Parent" means, as to a Member, any Person which is the direct or
indirect Beneficial Owner of fifty percent (50%) or more of the
Capital Stock, having Voting Power, of such Member.
"Partners" means the partners of the Partnership.
"Partnership" means Xxxxxxxxx Partnership, a general partnership
organized under the laws of the Province of Ontario, Canada.
"Percentage" means, as to a Member, the percentage represented by
the relationship of such Member's Units to the total number of
Units outstanding and, as to an Interest Holder who is not a
Member, the percentage of the Member whose Interest has been
acquired by such Interest Holder, to the extent the Interest
Holder has succeeded to that Member's Interest.
"Person" means any individual, corporation, governmental
authority, limited liability company, partnership, trust, estate,
unincorporated association or other entity.
"Pest" means any plant, animal or other organism, when and if
determined by an Agency to be deleterious to man or the
environment.
"Post-Exercise Agreement" means the Post-Exercise Distribution
and Technology License Agreement to be dated as of November ,
1998, by and among GT Seed Treatment Inc., Bayer Corporation and
the Company.
"Pre-Exercise Agreement" means the Pre-Exercise Distribution and
Technology License Agreement to be dated as of November , 1998,
by and among GT Seed Treatment Inc., and the Company.
"Profit" and "Loss" means, for each taxable year of the Company
(or other period for which Profit or Loss must be computed), the
Company's taxable income or loss determined in accordance with
Section 703(a) of the Code, with the following adjustments:
(i) all items of income, gain, loss, deduction, or
credit required to be stated separately pursuant to Section
703(a)(1) of the Code shall be included; and
(ii) any tax-exempt income of the Company, not otherwise
taken into account in computing Profit or Loss, shall be
included; and
(iii) any expenditures of the Company described in Section
705(a)(2)(B) of the Code (or treated as such pursuant to
Regulation Section 1.704-1(b)(2)(iv)(i)) and not otherwise taken
into account in computing Profit or Loss shall be subtracted; and
(iv) gain or loss resulting from any taxable disposition of
Company property shall be computed by reference to the adjusted
book value of the property disposed of, notwithstanding the fact
that the adjusted book value differs from the adjusted basis of
the property for federal income tax purposes; and
(v) in lieu of the depreciation, amortization, or cost
recovery deductions allowable in computing taxable income or
loss, there shall be taken into account the depreciation or
amortization computed for book purposes.
Profit or Loss shall not include any profits made or losses
incurred by any Interest Holder in supply of goods or services to
or from the Company.
"Publicly Available" means that the information in question is
available from a public source; provided, however, information
shall not be deemed to be Publicly Available to a Person unless
the Person contending the information is Publicly Available (i)
has lawfully acquired such information through experimentation,
research or other appropriate method of acquisition, and (ii) if
the form in which the information is held by the Person on a
particular date has commercial value, has acquired such
information in the same form in which it is held by the Person on
such date.
"Publicly Traded" when used in reference to any Capital Stock at
any given date, means Capital Stock which is listed or authorized
for quotation on the New York Stock Exchange, the American Stock
Exchange or on the National Market System of the Nasdaq Stock
Market (or any successor to such entities) or listed on or
included into the free market of any of the Xxxxxxxxx, Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxx or Berlin stock exchange.
"Regulation" or "Regulations" means the income tax regulations as
amended, including any temporary regulations, or any successor
income tax regulation or regulations from time to time
promulgated under the Code.
"Secretary of State" means the Secretary of the State of
Delaware.
"Seed Treatment" means any and all uses or applications of Active
Ingredients, Formulations, Equipment, and Other Products and/or
Services, in connection with seeds or stored grains for
agricultural purposes, whether now existing or hereinafter
developed.
"Subsidiary" means individually and collectively, Agro ST Inc., a
corporation organized under the laws of the State of Delaware,
United States of America, Industrias Xxxxxxxxx X.X. DE C.V. , a
corporation organized under the laws of Mexico, and Trace
Chemicals LLC, a Delaware Limited Company, each a wholly owned
subsidiary of the Company.
"Tax Matters Member" shall have the meaning given to such term in
Section 10.5.
"Technology" means all forms of intellectual property, including
without limitation, copyrights, copyright applications, patents,
patent applications, inventions, processes, production methods,
proprietary information, know-how, trade secrets, information,
trademarks, trademark applications, service marks, trade names,
logos and slogans, identification lists, product and technical
labels, data, including registration data and Agency data, plans,
blueprints, specifications, designs, manufacturing information,
formulation recipes and techniques, seed safety information, seed
testing techniques, efficacy data, environmental, residue,
toxicology and product chemistry information, discoveries,
drawings, recorded knowledge, techniques, ideas, concepts,
surveys, engineering reports, test reports and procedures,
manuals, materials standards, process standards, performance
standards, catalogs, flow charts, formulation or technical
registrations, work techniques, computer and automatic machinery
software and programs, related object and source code and the
like whether or not protected by or protectable by patent,
copyright, trademark, trade secret or other proprietary rights or
by any Agency; but specifically excluding Technology that is
generally known to those skilled in a chemical or life sciences
field, including without limitation, the agrochemical field.
"Territory" means collectively, the Xxxxxx Xxxxxx, Xxxxxx, xxx
xxx Xxxxxx Xxxxxxx Xxxxxx.
"Third Party" or "Third Parties" means any and all Persons other
than the Company, the Partnership, a Member, a Partner or any of
their respective Affiliates.
"Transfer" means, when used as a noun, any voluntary sale,
hypothecation, pledge, assignment or other transfer by a Member,
and, when used as a verb, means for a Member to voluntarily sell,
hypothecate, pledge, assign, or otherwise transfer.
"Transferee" means a Person who is the assignee, purchaser or
transferee of an Interest.
"Units" means the number of units of income, gain, loss and
deduction of a Member or Interest Holder, as the case may be.
"United States" means collectively, the fifty (50) states of the
United States of America, the District of Columbia, and the
Commonwealth of Puerto Rico; but, specifically excluding any
territories and possessions of the United States of America.
"Voting Power" (which term includes the power to vote or to
direct the voting of) when used in reference to any Capital Stock
shall mean the power of the holders of such Capital Stock
generally to vote, with respect to any Person which is a
corporation, for the election of members of the board of
directors and, with respect to any other Person that is not a
corporation, for the Members of the Governing Body of such other
Person.
"U.S. GAAP" means United States generally accepted accounting
principles, consistently applied.
Article II
ORGANIZATION AND PURPOSE
2.1 Organization.
The Company was organized as a limited liability company
pursuant to the Act when the original executed Certificate of
Formation was filed pursuant to the Act. The parties intend that
the Company be operated pursuant to the Act and the provisions of
this Agreement.
2.2 Name of the Company.
The name of the Company shall be "Xxxxxxxxx LLC". The
Company may do business under that name and under any other name
or names that the Board selects. If the Company does business
under a name other than that set forth in its Certificate of
Formation, then the Company shall file an assumed business name
as required by law. The Board may change the name of the Company
by amendment to the Certificate of Formation pursuant to the Act.
2.3 Purpose.
The Company is organized solely for the purposes of: (i)
developing, formulating, manufacturing, registering, marketing
and selling Active Ingredients, Formulations, Equipment, and
Other Products and/or Services for Seed Treatment uses and
applications in the Territory, and to do any and all things
necessary, convenient or incidental thereto. Unless both Members
consent, or unless specifically permitted by the Operative
Agreements, the Company shall have no authority to carry on any
other lawful business for which a limited liability company may
be organized under the Act.
2.4 Term.
The term of the Company shall begin upon the acceptance of
the Certificate of Formation by the Secretary of State and shall
be perpetual, unless its existence is sooner terminated pursuant
to the mandatory provisions of the Act.
2.5 Principal Office.
The principal office of the Company shall be located at 0000
Xxxxxxx Xxxx, Xxxxx 000, Xxxxx, XX 00000, or at any other place
within the State of Texas or elsewhere that the Board selects.
2.6 Registered Agent.
The name and address of the Company's current registered
agent in the State of Delaware is The Corporation Trust Company,
0000 Xxxxxx Xxxxxx, Xxxx xx Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx,
Xxxxxxxx 00000.
2.7 Members.
The name and Percentage of each Member is set forth on
Exhibit A.
2.8 Management by Board.
The Company shall be managed by a Board as provided in
Article IV hereof.
2.9 Certificate of Membership Interest.
A Member's Membership Interest shall be evidenced by a
certificate, the form of which is attached hereto as Exhibit B,
and incorporated herein by reference.
Article III
CAPITAL
3.1 Initial Capital Contributions.
Each Member shall contribute as the Capital Contribution to
be made by it the cash, obligations, other property or services
set forth in the column headed "Initial Capital Contribution" on
Exhibit A to this Agreement. The amount of the initial
contribution of each Member shall be recorded by the Board as a
contribution to the capital of the Company.
3.2 No Additional Capital Contributions Required.
No Member shall be obligated, nor shall any Member have a
right, to contribute any additional capital to the Company,
except with the prior consent of both Members.
3.3 No Interest on Capital Contributions; Deficit Account.
Interest Holders shall not be paid interest on their Capital
Contributions. Except as otherwise required in the Act or this
Agreement, no Interest Holder shall have any liability to restore
all or any portion of a deficit balance in a Capital Account.
3.4 Return of Capital Contributions.
Except as otherwise provided in this Agreement, no Interest
Holder shall have the right to receive any return of any Capital
Contribution.
3.5 Form of Return of Capital.
If a Member is entitled to receive a return of a Capital
Contribution, the Interest Holder shall not have the right to
receive anything but cash in return of the Interest Holder's
Capital Contribution.
3.6 Capital Accounts.
An account ("Capital Account") shall be maintained by the
Company for each Interest Holder in accordance with the following
provisions:
3.6.1. An Interest Holder's Capital Account shall be credited
with the Interest Holder's Capital Contributions, the amount of
any Company liabilities assumed by the Interest Holder (other
than liabilities secured by Company property distributed to the
Interest Holder), and the Interest Holder's allocable share, as
determined by the Company, of profit and any income or gain
specially allocated by the Company to the Interest Holder.
3.6.2. An Interest Holder's Capital Account shall be debited
with the amount of money and the fair market value of any Company
property distributed by the Company to the Interest Holder (net
of liabilities secured by such distributed property that such
Interest Holder is considered to assume or take subject to
Section 752 of the Code), the amount of the Interest Holder's
individual liabilities that are assumed by the Company (other
than liabilities that reduce the amount of any Capital
Contribution made by such Interest Holder), the Interest Holder's
allocable share, as determined by the Company, of loss, and any
item in the nature of expenses or losses specially allocated, as
determined by the Company, to the Interest Holder.
3.6.3. If any Interest is transferred pursuant to the terms
of this Agreement, the Transferee shall succeed to the Capital
Account of the transferor to the extent the Capital Account is
attributable to the transferred Interest. On any such transfer,
and upon the occurrence of any event specified in Regulation
Section 1.704-1(b)(2)(iv)(f), the book value of Company property
(whether tangible or intangible) shall be adjusted to equal
market value, and the Capital Account of each Interest Holder
shall be adjusted to reflect the aggregate adjustment in the same
manner as if the Company had recognized gain or loss equal to the
amount of such aggregate adjustment. It is intended that the
Capital Accounts of all Interest Holders shall be maintained in
compliance with the provisions of Regulation Section 1.704-1(b),
and all provisions of this Agreement relating to the maintenance
of Capital Accounts shall be interpreted and applied in a manner
consistent with that Regulation.
3.6.4. The Company shall: (i) make any adjustments that are
necessary or appropriate to maintain equality between the Capital
Accounts of the Interest Holders and the amount of capital
reflected on the Company's balance sheet, as computed for book
purposes in accordance with Regulations Section 1.704 -
1(b)(2)(iv)(q); and (ii) make any appropriate modifications in
the event unanticipated events might otherwise cause this
Agreement not to comply with Regulation Section 1.704-1(b).
3.7 Allocations.
3.7.1. General Rule for Allocations.
Except as otherwise provided in this Article III, the Profits and
Losses of the Company shall be allocated among the Interest
Holders according to their Percentage Interest. If any Interest
in the Company is transferred during a fiscal year, then items of
Profit and Loss shall each be allocated on the basis of a closing
of the Company's books on the date of such transfer.
3.7.2. Qualified Income Offset.
No Interest Holder shall be allocated Losses or deductions to the
extent that the allocation would cause the Interest Holder to
have an Adjusted Capital Account Deficit. If an Interest Holder
unexpectedly receives any adjustment, allocation, or Distribution
described in Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or
(6) that results in or increases an Adjusted Capital Account
Deficit at the end of any taxable year, then all items of income
and gain of the Company for that taxable year shall be allocated
to that Interest Holder, before any other allocation pursuant to
this Article III (other than those pursuant to Sections 3.7.3.1
and 3.7.3.2), in an amount and manner sufficient to eliminate
such Adjusted Capital Account Deficit as quickly as possible.
This Section 3.7.2 is intended to comply with, and shall be
interpreted consistently with, the "qualified income offset"
provisions of the Regulation Section 1.704-1(b)(2)(ii)(d) and all
other Regulation Sections relating thereto.
3.7.3. Minimum Gain.
3.7.3.1. Except as set forth in Regulation Section 1.704-
2(f), if, during any taxable year, there is a net decrease in
minimum gain, each Interest Holder, prior to any other allocation
pursuant to this Article III, shall be specially allocated items
of gross income and gain for such taxable year (and, if
necessary, subsequent taxable years) in an amount equal to that
Interest Holder's share of the net decrease of minimum gain,
computed in accordance with Regulation Section 1.704-2(g).
Allocations of items of gross income and gain pursuant to this
Section 3.7.3.1 shall be made as described in Regulation Sections
1.704-2(f) and (j). This Section 3.7.3.1 is intended to comply
with, and shall be interpreted consistently with, the "minimum
gain chargeback" provisions of Regulation Section 1.704-2(f) and
all other Regulation Sections relating thereto.
3.7.3.2. Except as set forth in Regulation Section 1.704-
2(i)(4), if, during any taxable year, there is a net decrease in
Member minimum gain, each Interest Holder with a share of that
Member minimum gain as of the beginning of such year, prior to
any other allocation pursuant to this Article III, shall be
specially allocated items of gross income and gain for such
taxable year (and, if necessary, subsequent taxable years) in an
amount equal to that Interest Holder's share of the net decrease
of Member minimum gain, computed in accordance with Regulation
Section 1.704-2(i)(4). Allocations of items of gross income and
gain pursuant to this Section 3.7.3.2 shall be made as described
in Regulation Sections 1.704-2(i)(4) and (j). This Section
3.7.3.2 is intended to comply with, and shall be interpreted
consistently with, the "partner nonrecourse debt minimum gain
chargeback" provisions of Regulation Section 1.704-2(i)(4) and
all other Regulation Sections relating thereto.
3.7.4. Regulatory Allocations.
The allocations set forth in Sections 3.7.2 and 3.7.3 are
included to comply with the requirements of the Regulations. If
allocations under such provisions are different from the
allocations that otherwise would be made under this Article III,
then the Board shall make appropriate allocations, consistent
with the Regulations, so that the net allocations are as much as
possible consistent with the allocations under Section 3.7.1.
3.8 Income Tax Allocations.
3.8.1. Except as otherwise provided in this section,
items of income, gain, deduction and loss shall be determined and
allocated for federal income tax purposes in the same manner as
in Section 3.7.
3.8.2. In accordance with Code Section 704(c) and the
Regulations thereunder, income, gain, loss and deduction with
respect to any property contributed to the capital of the Company
shall, solely for tax purposes, be allocated among the Interest
Holders so as to take account of any variation between adjusted
basis of such property to the Company for federal income tax
purposes and its initial fair market value upon contribution to
the Company.
3.8.3. In the event the Capital Accounts of the Interest
Holders are adjusted pursuant to Section 3.6.2, subsequent
allocation of income, gain, loss and deduction with respect to
property to which the adjustment relates shall, solely for tax
purposes, take into account of any variation between the adjusted
basis of such property to the Company for federal income tax
purposes and its adjusted fair market value.
3.8.4. Unless otherwise agreed to unanimously by the Members,
the Company shall allocate the items in Subsection 3.8.2 and
3.8.3 using the traditional method with curative allocations as
described in Regulation Section 1.704-3(c).
3.9 Currency.
All Capital Contributions to be made to, and Dividends to be
paid by, the Company pursuant to this Agreement shall be made in
the currency of the United States. All other payments to be made
or calculated pursuant to this Agreement shall be made and
calculated in the currency of the United States.
3.10 Distributions.
Distributions other than upon liquidation shall be made to
the Members in proportion to their Percentage Interest and may be
made in cash or in kind. Distributions upon liquidation shall be
made to the Members as provided in Section 9.3.
Article IV
MANAGEMENT
4.1 Board.
Upon the formation of the Company, the Initial Members have
determined to conduct the business and affairs of the Company
through a Board of Managers, who shall act together as a group.
The Managers shall have such rights, duties and powers as are
specified in this Agreement.
4.1.1. The Managers, acting as a Board, have the sole, full
and complete authority, power and discretion to manage and
control the business, affairs and properties of the Company, to
make all decisions regarding those matters and to perform any and
all other acts or activities necessary or appropriate to the
management of the Company's business.
4.1.2. The Board shall have the power to delegate
responsibilities and authority to subcommittees of the Board, or
to such officers as may be appointed by the Board pursuant to
Article VI from time to time, with such general or specific
authority to make any contracts, enter into any transaction, and
make and obtain any commitments on behalf of the Company and to
otherwise conduct or further the Company's business.
4.1.3. Without limiting the generality of Sections 4.1.1 or
4.1.2, the taking of any of the following actions by the Company
shall require the approval of a Majority Vote of the Board:
4.1.3.1. Review and approval of the budget for the Company
for each financial year, and the annual business and midterm
strategic plan for the Company and any subsidiaries thereof.
4.1.3.2. Creation or dissolution of any subsidiaries of the
Company.
4.1.3.3. Establishment or modification of the Company's
capital expenditures budget.
4.1.3.4. Appointment, removal and compensation of the
Company's President and other officers.
4.1.3.5. Establishment, modification or termination of the
Company's compensation and benefit programs for all employees.
4.1.3.6. Establishment or modification of the Company's
dividend and Distribution policies.
4.1.3.7. Incurrence of or payment by the Company of any
expenses for any capital project that exceeds or is estimated to
exceed US$200,000.
4.1.3.8. Creation, amendment, termination or modification of
any arrangement, agreement or contract between the Company or a
Subsidiary and (i) any Member, the Partnership, a Subsidiary, any
Partner, (ii) an Affiliate of a Member, the Partnership, a
Subsidiary or a Partner; or (iii) an employee, executive officer
or director or other board member or representative of a Member,
the Partnership, a Partner or a Subsidiary; provided however,
that any sublicense under the Cross License Agreement between the
Company and its subsidiary Agro ST Inc. must be approved by the
unanimous consent of the Board; any changes in Prices made
pursuant to Article 7 of the Pre-Exercise Agreement shall not
require the Board's approval to be effective; and any changes to
the Prices (as defined in the Marketing Agreement) agreed to by
the Company or a Subsidiary and (i) any Member, the Partnership,
a Subsidiary, any Partner or (ii) an Affiliate of a Member, the
Partnership, a Subsidiary or a Partner pursuant to Section 4 of
the Marketing Agreement shall not require the approval of the
Board to be effective.
4.1.3.9. Acquisitions or disposition of any business of the
Company, and approval of any financing associated with such
acquisition or disposition.
4.1.3.10. Entrance into, or any modification of, any material
research or development contract or obligation by the Company
that would result in the Company exceeding the approved research
or development budget by more than US$200,000.
4.1.3.11. Making of any loan or advance or giving any credit
by the Company in excess of US$100,000, excluding trade credit,
or any modification of the terms thereof.
4.1.3.12. Borrowing of money for and on behalf of the
Company or any subsidiary, which borrowing may in the aggregate
exceed US$100,000, or any modification of the terms thereof,
excluding trade credit.
4.1.3.13. Grant of any mortgages, deeds of trust, security
interests or other liens, or executing and delivering any
instruments to encumber any assets of the Company or its
subsidiaries, to secure repayment of amounts that in the
aggregate exceed US$100,000, or permitting any liens to exist
against assets of the Company or in amounts that in the aggregate
exceed US$100,000.
4.1.3.14. Appointment of outside legal counsel or independent
auditors.
4.1.3.15. Change of the accounting principles used by the
Company.
4.1.3.16. Change of the Company's business philosophy.
4.1.3.17. Purchases by the Company in excess of US$2,000,000
per order.
4.1.3.18. Modification of this Agreement, the
Certification of Formation of the Company, or any subsidiary
thereof, or the certificate of incorporation, bylaws or any other
organizational documents of any subsidiary of the Company.
4.1.3.19. Registration, marketing and development:
(i) any one product or registration, if the cost of such
registering, marketing and developing is expected to exceed
US$400,000 in any one year; and
(ii) products and registrations, if the Company has
materially exceeded or will materially exceed the previously
approved budgets for registering, marketing and developing
products; or if registering, marketing and developing costs will,
in the aggregate, exceed US$1 million for the current fiscal
year.
4.1.3.20. Acquisition by purchase, lease, or otherwise of
any real property.
4.1.3.21. Entrance into any Capital Transaction;
4.1.3.22. Engagement in business in any jurisdiction that
does not provide for the registration of limited liability
companies;
4.1.3.23. Discontinuance of the Company's business;
4.1.3.24. Authorization of any merger, reorganization or
recapitalization of the Company and the material terms and
provisions thereof;
4.1.3.25. Settlement or confession of judgment in any legal
matter exceeding US$250,000.
4.1.3.26. Except as expressly provided in Article IX of this
Agreement, termination, dissolution, liquidation or winding-up of
the Company.
4.1.3.27. Authorization to make all Company elections
permitted under the Code, including, without limitation,
elections of methods of depreciation.
4.1.3.28 The issuance of additional Interests, Membership
Interests, or debt securities in the Company.
4.1.4. Notwithstanding anything to the contrary in this
Agreement or the Operative Agreements, no Member may use its
position as a Member, on the Board or its appointed Managers on
the Board to require that the Company do any act that would
require, or condition any contract, agreement or arrangement with
the other Member or the other Member's Affiliates on, disclosure
of the Confidential Information or Technology of one Member or
its Affiliates to the other Member, or the use of the
Confidential Information or Technology of one Member or its
Affiliates by the other Member.
4.2 Managers; Appointment.
4.2.1. Board Members. Except as provided in Section
4.13 of this Agreement, the Board shall consist of seven (7)
individuals: (i) six (6) Managers, with each Manager entitled to
one vote, and (ii) the President of the Company, who shall be a
non-voting Manager.
4.2.1.1. Initial Appointment. Five (5) of the six (6)
initial voting Managers of the Board shall be appointed by
Xxxxxxxxx, Inc. and the sixth initial voting Manager shall be
appointed by Trace Chemicals, Inc., and shall serve without
additional compensation or benefits from the Company.
4.2.1.2. Sale of Fifty Percent of Membership Interest. Upon
the sale by Xxxxxxxxx, Inc. of a forty-nine percent (49%)
Membership Interest (reducing its 99% Membership Interest to a
50% Membership Interest) and the sale by Trace Chemicals, Inc. of
all of its one percent (1%) Membership Interest to a Person
admitted as a Member, the Board shall be reconstituted, as
follows: (i) Xxxxxxxxx, Inc. shall designate three (3) of the
initial voting Managers to remain on the Board, and shall cause
the other three (3) initial voting Managers to resign, such
resignations to be effective upon the sale of fifty percent (50%)
of the Membership Interest. Upon the receipt by Xxxxxxxxx, Inc.
of such resignations, and upon consummation of the sale, the
newly admitted Member shall be entitled to appoint three (3)
Managers to the Board. As a result of its purchase of fifty
percent (50%) of the Membership Interest, the newly admitted
Member purchasing the fifty percent (50%) of the Membership
Interest shall be entitled to appoint three (3) voting Managers.
Each year at the annual meeting of the Members, Xxxxxxxxx, Inc.
shall be entitled to appoint three (3) voting Managers and the
Member purchasing the fifty percent (50%) of the Membership
Interest shall be entitled to appoint three (3) voting Managers.
Each voting Manager shall hold office for one (1) year terms, or
until his earlier resignation or removal in accordance with this
Agreement and the Act. A voting Manager may be reappointed for
an unlimited number of terms.
4.2.1.3. Subsequent Transfers. Upon the Transfer by a Member
of all of its Membership Interest to a Person who is admitted as
a Member, and other than a Transfer contemplated under Section
4.2.1.2, the transferring Member shall cause the three (3) voting
Managers appointed by such Member to resign, effective upon the
sale. Upon the resignation of the three (3) such voting
Managers, and consummation of the sale, the newly admitted Member
will be entitled to appoint three (3) Managers to the Board.
Thereafter, the newly admitted Member shall be entitled to
appoint three (3) voting Managers and the non-transferring Member
shall be entitled to appoint three (3) voting Managers. Each
voting Manager shall hold office for one (1) year terms, or until
his earlier resignation or removal in accordance with this
Agreement and the Act. A voting Manager may be reappointed for
an unlimited number of terms.
4.2.1.4. Appointment of President as Non-Voting Manager. The
Board of Managers shall appoint the President as a non-voting
Manager.
4.2.2. Duty of Managers. No Manager appointed pursuant to
Section 4.2 or serving as the non-voting Manager shall be liable
to the Company, the other Managers or the Members for monetary
damages for breach of fiduciary duty as a Manager, or otherwise
liable, responsible or accountable to the Company, the other
Managers or the Members for monetary damages or otherwise for any
acts performed, or for any failure to act; provided, however,
that this provision shall not eliminate or limit the liability of
a Manager (i) for any breach of the Manager's duty of loyalty to
the Member appointing such Manager, (ii) for acts or omissions
which involve intentional misconduct or a knowing violation of
law, (iii) for any transaction from which the Manager received
any improper personal benefit; or (iv) for disclosing
Confidential Information in violation of the provisions of this
Agreement.
4.2.3. Duty of Seventh Voting Manager. No Manager appointed
pursuant to Section 4.13.3.2 shall be liable to the Company, the
other Managers or the Members for monetary damages for breach of
fiduciary duty as a Manager or otherwise liable, responsible or
accountable to the Company, the other Managers or the Members for
monetary damages or otherwise for any acts performed, or for any
failure to act; provided, however, that this provision shall not
eliminate or limit the liability of such Manager (i) for any
breach of such Manager's duty of loyalty to the Company, (ii) for
acts or omissions which involve intentional misconduct or a
knowing violation of law, or (iii) for any transaction from which
the Manager received any improper personal benefit; or (iv) for
disclosing Confidential Information in violation of the
provisions of this Agreement.
4.3 Power to Bind Company.
Unless specifically authorized to do so by this Agreement or
by the Majority Vote of the Board, no attorney-in-fact, Manager,
officer, employee or other agent 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. No Member shall
have any power or authority to bind the Company unless the Member
has been specifically authorized by a Majority Vote of the Board
to act as an agent of the Company for that specific purpose.
4.4 Vacancies.
Any vacancy occurring in the voting Managers of the Board,
whether caused by death, resignation, removal or otherwise, may
be filled only by the Member who originally appointed the
vacating voting Manager. A voting Manager appointed to fill a
vacancy shall be appointed for the unexpired term of his
predecessor in office.
4.5 Quorum.
The presence, in person, by conference telephone, video or
similar communications equipment, or by proxy of four (4) voting
Managers, including no less than two (2) voting Managers from
each Member, and in the case of one (1) Member, the presence, in
person, by conference telephone, video or similar communications
equipment, or by proxy of two (2) voting Managers appointed by
such Member, shall constitute a quorum for the transaction of
business at a Board meeting. A Majority Vote of the Board
participating in a duly constituted meeting where there is a
quorum shall be the act of the Board, except as may be otherwise
specifically provided by the Act or this Agreement. In the
absence of a quorum, a majority of Managers present may adjourn
the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present. At
a reconvening of such adjourned meeting at which a quorum shall
be present, any business may be transacted that might have been
transacted at the meeting as originally noticed.
4.6 Meetings.
4.6.1. Regular Meetings. Regular meetings of the Board
shall be held at such times and places as the Board shall
designate; provided, however, that for two (2) years from the
date of admission of a Member pursuant to Section 4.2.1.2,
unless the Board by Majority Vote agrees otherwise, the Board
shall meet at least four (4) times a year. Thereafter, the Board
shall meet at least annually.
4.6.3. Special Meetings. Special meetings of the Board may be
called (i) by the President, (ii) by a Member, or (ii) at the
request of three voting Managers. Written or oral notice of
special meetings shall be given to all Managers at least fourteen
(14) days before the dates of such meetings. No notice need be
given to any Manager who attends in person or to any Manager who,
in a writing executed and filed with the records of the meeting
either before or after the meeting, waives such notice. Such
notice or waiver of notice need not state the purpose or purposes
of such meeting.
4.7 Action Without a Meeting.
Any action that may be taken at a meeting of the Board may
be taken without a meeting if a consent in writing, setting forth
the action so taken or to be taken, shall be signed by all of the
voting Managers. Such consent shall be filed with the minutes of
the Board's meetings.
4.8 Proxy.
A Manager may grant a proxy entitling any other Manager
appointed by the same Member to exercise his voting rights. Such
proxy shall be in writing and shall specify a termination date.
The Managers appointed by the other Member shall be entitled to
inspect the proxy on demand. Any proxy shall be filed with the
minutes of the meeting.
4.9 Meeting by Telephone or Video Conference.
A Manager may participate in a meeting of the Board by means
of conference telephone, video or similar communications
equipment enabling all Managers participating in the meeting to
hear one another, and participation in a meeting shall constitute
presence in person at such meeting.
4.10 Resignations and Removal.
Each Manager shall hold office at the pleasure of the Member
appointing such Manager. The resignation of any Manager shall be
in writing and shall be effective immediately upon acknowledgment
of receipt by a Member. Any Manager may be removed, with or
without cause, as follows (i) at any time, by the Member that
appointed such Manager; (ii) in the case of the President, by a
Majority Vote of the Board; or (iii) by the request of the Member
that appointed such Manager, if such request is made, in
preparation of the admission of a newly admitted Member, and the
appointment of Managers by such newly admitted Member as set
forth in Section 4.2.1.
4.11 Compensation and Expenses.
Managers appointed pursuant to Section 4.2 shall serve
without additional compensation or benefits from the Company.
Each Member is responsible for all expenses incurred by the
voting Managers appointed by that Member in connection with such
Managers' activities as a Manager. The Members shall share
equally the reasonable compensation for and expenses of the
seventh voting Manager appointed pursuant to Section 4.13.3.1.
4.12 Board Chairman.
The initial voting Managers may elect from any of the
initial voting Managers a Chairman of the Board. Upon the sale
of fifty percent (50%) of the Membership Interest as contemplated
in Section 4.2.1.2, the reconstituted Board may elect a Chairman
of the Board from any of the voting Managers. Thereafter, the
Chairman of the Board shall be a voting Manager appointed by the
Members as follows: each year at the annual meeting of Members,
the Chairman shall be appointed by a Member, alternating yearly
between Xxxxxxxxx, Inc. and the Member purchasing the fifty
percent (50%) in Membership Interest. Except as provided in
Section 4.13.3.3, the Chairman shall have no additional vote
other than his vote as a Manager. The Chairman of the Board
shall preside at all meetings of the Board and shall perform such
other duties as may be prescribed from time to time by the Board
and by this Agreement.
4.13 Deadlock.
4.13.1. Memorandum. If Deadlock occurs, a Member may
circulate a memorandum to the other Member and to the parent
company of the other Member by registered mail, return receipt
requested to the address for such other Member and such parent of
such other Member provided in Section 11.6 hereof, stating a
summary of the issue, its proposed resolution of the issue, and
the considerations in support of such proposed resolution. Such
memorandum shall be considered by the president, a member of
board of management or other senior executive (hereinafter
"senior executive") of the parent of the Member. Within twenty
(20) days of receipt of such a memorandum by the parent of the
Member, the senior executives of the parent of each Member shall
meet to negotiate in good faith a mutually satisfactory
resolution of the Deadlock.
4.13.2. Mediation. If such senior executives are not able to
reach a mutually satisfactory resolution of the Deadlock within
thirty (30) days after the date of the first such meeting, then
the Members shall attempt in good faith to mediate a resolution
to the Deadlock in accordance with the procedures set forth in
this Section 4.13 and Exhibit C, parts A and B with a mediator
that is mutually acceptable to both Members. If the Members
cannot agree on such a mediator within such thirty (30) days,
then either or both Members may request, by notice to the other
Member, that a mediator be appointed by the American Arbitration
Association ("AAA") to mediate the resolution of the Deadlock.
4.13.3. Initial Period. For an initial period of five (5)
years after the date of the admission of a Member to the Company
pursuant to Section 4.2.1.2 ("Initial Period"), the following
shall apply:
4.13.3.1. Reconstitution. If a Deadlock has occurred, and
there is no resolution by Members within ninety (90) days after
the date that the mediator is agreed to, or if no agreement is
reached as to a mediator, then within ninety (90) days after the
date the mediator is appointed by AAA, either or both Members may
elect by giving written notice to the other Member that the Board
shall be reconstituted within sixty (60) days thereafter as a
eight (8) person board. The reconstitution means that the six
(6) voting Managers shall be removed by the Members appointing
such Managers, and the following appointments made: (i) each
Member shall appoint three (3) persons not previously Managers of
the Company as voting Managers; (ii) a seventh Manager,
independent of both Members, shall be appointed by mutual
agreement of the Members as a seventh voting Manager; and (iii)
the President shall continue as a non-voting Manager.
4.13.3.2. Seventh Voting Manager. If the Members cannot
mutually agree upon a seventh Manager within thirty (30) days
after the date of such reconstitution as provided in Section
4.13.3.1, then each Member shall select an independent person and
the two persons so chosen shall select the seventh, independent
voting Manager. The seventh Manager shall receive reasonable
compensation to serve on the Board, to be paid as provided in
Section 4.11.
4.13.3.3. No Abstention. Following reconstitution of the
Board as provided in Sections 4.13.3.1 and 4.13.3.2, the Board
shall vote on the issue which is the subject of the Deadlock,
within a reasonable period of time following the reconstitution
of the Board, but in no event later than three (3) months and no
voting Manager (including the Chairman, if any) shall abstain
from voting on the issue which is the subject of the Deadlock.
4.13.3.4. Removal after Vote. After the vote on the issue
which is the subject of the Deadlock, the seventh and independent
Manager may be removed by a vote for such removal by any three
(3) other voting Managers.
4.13.4. Post-Initial Period. If a Deadlock occurs after the
expiration of the Initial Period, and such senior executives are
not able to reach a mutually satisfactory resolution of the issue
which is the subject of the Deadlock within thirty (30) days of
the first meeting of such senior executives, then the Members
shall attempt in good faith to mediate a resolution to the
Deadlock in accordance with this Section 4.13 and Exhibit C,
parts A and B, with a mediator that is mutually acceptable to
both Members. If the Members cannot agree on such a mediator
within such thirty (30) days after such first meeting, one or
both Members may request, by notice to the other Member, that a
mediator be appointed by the AAA to mediate the resolution of the
Deadlock.
4.13.4.1. Sale. In the event that a Deadlock continues for
more than six (6) months after the commencement of mediation in
accordance with Section 4.13.4, then the following shall apply:
4.13.4.1.1 A Member, by notice to the other Member, may
require the Board to solicit proposals from internationally
recognized investment banking firms to provide the services
outlined in Section 4.13.4.1. The Board shall select an
internationally recognized investment banking firm reasonably
acceptable to both Members. If the Members cannot mutually agree
upon such firm within thirty (30) days after the date the
proposals are due to the Board, then each Member shall select a
Neutral Investment Bank, and the two firms so chosen shall select
a third internationally recognized investment banking firm to
provide the services outlined in Section 4.13.4.1. The
internationally recognized investment banking firm selected
pursuant to this Section is hereinafter referred to as the
"Firm."
4.13.4.1.2 The Firm shall promptly solicit bids from
responsible prospective buyers to purchase (i) all, but not less
than all, of the assets of the Company; and/or (ii) all, but not
less than all, of the Membership Interest in the Company.
4.13.4.1.3. Each Member may submit a bid to the Firm to
purchase either the other Member's Membership Interest or all of
the assets of the Company, but no Member may bid, or enter into
an agreement with respect to such bid, with a Person that is not
an Affiliate of such Member.
4.13.4.1.4. If the Members cannot mutually agree on the
selection of a bid within thirty (30) days of the bid submission
date, the Firm shall promptly determine the highest responsible
bid, and notify the Members of its determination.
4.13.4.1.5. Upon the selection of a bid in accordance with
Section 4.13.4.1.4, each Member and the Company shall comply with
the bid. If the bid is to purchase the assets of the Company,
each Member shall cause the Company to sell all of its assets to
the selected bidder. If the bid is to purchase all the
Membership Interest in the Company, or in the case of Section
4.13.4.1.3, the other Member's Membership Interest in the
Company, each Member obligated to sell, shall sell its Membership
Interest to the selected bidder.
4.13.4.1.6. The net proceeds of any sale, occurring pursuant
to this Section 4.13 shall be distributed to: (i) each Member
selling its Membership Interest, or (ii) both Members, if the
assets of the Company are sold, all in accordance with the terms
of this Agreement. The Company shall be responsible for all fees
and costs incurred pursuant to this Section 4.13.
4.13.5. The right of first offer and right of first
refusal in Section 8.1 shall not be applicable in the event that
Deadlock has occurred.
4.13.6. If a sale pursuant to Section 4.13.4.1.5 occurs, then
the following shall apply:
4.13.6.1. In the case of a sale of all the Membership
Interest of both Members, or a sale of the Company's assets to a
Person or Persons not previously a Member and not currently an
Affiliate of a Member, the Members and the parents of both
Members shall be deemed to have "Divested" and to be "Divested
Sponsors" as those terms are defined in the Marketing Agreement.
For purposes of the Marketing Agreement, the date of such sale
shall be the "Divestment Date."
4.13.6.2. In the case of a sale of one Member's Membership
Interest to the other Member or to an Affiliate of the other
Member, or the sale of the Company's assets to one Member or to
an Affiliate of one Member, the Member and parent of the Member
who sells its Membership Interest or causes the Company to sell
the assets to the other Member or its Affiliate, shall be deemed
to have "Divested" and to be a "Divested Sponsor" as those terms
are defined in the Marketing Agreement. For purposes of the
Marketing Agreement, the date of such sale shall be the
"Divestment Date."
4.13.6.3 In the case of a sale of a Member's Membership Interest
to the other Member, to an Affiliate of the other Member, or to
Persons not currently a Member, the selling Member shall have the
obligation to assign the Post-Exercise Agreement to the
purchaser, and Xxxxxxxxx, Inc. shall have the right, but not the
obligation, to assign the Pre-Exercise Agreement to the
purchaser.
Article V
MEETINGS OF MEMBERS
5.1 Meetings of and Voting by Members.
5.1.1. Meetings of the Members shall be held at least
annually in the month of March or such other time as designated
by the Board. A meeting of the Members may be called at any time
by four (4) voting Managers or by a Member Vote. Meetings of
Members shall be held at the Company's principal place of
business or at any other place designated by the Board. Not less
than fourteen (14) days, nor more than ninety (90) days, before
each meeting, the Person calling the meeting shall give written
notice of the meeting to each Member entitled to vote at the
meeting. The notice shall state the time, place, and purpose of
the meeting. Notwithstanding the foregoing provisions, each
Member who is entitled to notice waives notice if before or after
the meeting the Member signs a waiver of the notice that is filed
with the records of Members' meetings or is present at the
meeting in person or by proxy. Unless this Agreement provides
otherwise, at a meeting of the Members, the presence in person or
by proxy of all Members constitutes a quorum. A Member may vote
either in person or by written proxy signed by a duly authorized
officer of the Member.
5.1.2. Except as otherwise provided in this Agreement, the
affirmative vote of all Members shall be required to approve any
matter coming before the Members.
5.1.3. In lieu of holding a meeting, the Members may vote or
otherwise take action by a written instrument indicating the
consent of all Members.
5.1.4. A Member may grant a proxy entitling any other Person
appointed by the same Member to exercise his voting rights. Such
proxy shall be in writing and shall specify a termination date.
The other Member shall be entitled to inspect the proxy on
demand. Any proxy shall be filed with the minutes of the
meeting.
5.2 Services; Intercompany Dealings.
5.2.1. No Member shall be required to perform services
for the Company solely by virtue of being a Member. Unless
approved by Majority Vote of the Board, no Member shall perform
services for the Company or be entitled to compensation for
services performed for the Company.
5.2.2. Notwithstanding the foregoing, the Company is
authorized to enter into the Operative Agreements.
5.3 Duty of Members.
No Member or any of its Affiliates, nor any officer,
director, employee or former employee of any Member or its
Affiliates shall have any obligation, or be liable, to the
Company, or to any Person, including any other Member, or an
Affiliate of a Member, for: (i) exercising any of the rights of
such Member or such Affiliate under this Agreement or any of the
Operative Agreements to which such Member or its Affiliate is or
will be a party; (ii) exercising or failing to exercise its
rights as a Member of the Company; or (iii) breach of any
fiduciary or other similar duty to the Company, or any Person,
including any other Member or an Affiliate of a Member by reason
of such conduct, other than a breach of any Operative Agreement.
5.4 Resignation or Withdrawal.
No Member shall have the right to resign or withdraw from
the Company except upon termination of the Company as provided in
Section 9.4, or upon the transfer of such Member's Membership
Interest in accordance with Section 4.13 or Article VII.
Article VI
OFFICERS
6.1 Officers.
The Board shall have the power and authority to appoint a
president, secretary, chief financial officer, and such other
officers of the Company as the business of the Company may
require, each of whom shall hold office for such period, have
such authority and perform such duties as are provided in this
Agreement or as the Board determines. Any two or more offices
may be filled by the same person, except the offices of president
and chief financial officer.
6.2 Election and Term of Office.
The officers of the Company shall be elected by the Board at
any regular or special meeting of the Board. Each officer shall
hold office until his successor shall have been duly elected and
qualified or until his death, resignation or removal. Election
or appointment of an officer shall not of itself create contract
rights. The Board may authorize the Company to enter into an
employment contract with any officer in accordance with state
law, but no such contract shall impair the right of the Board to
remove any officer at any time in accordance with Section 6.3
hereof.
6.3 Removal.
Any officer may be removed by the Board, whenever in its
judgment the best interests of the Company will be served
thereby, but such removal, other than for cause, shall be without
prejudice to the contract rights, if any, of the person so
removed. The removal of the President shall include the removal
of such individual as a non-voting Manager.
6.4 Vacancies.
A vacancy in any office because of death, resignation,
removal, disqualification or otherwise, may be filled by the
Board for the unexpired portion of the term.
6.5 President.
Except as otherwise provided in this Agreement and
specifically by Section 4.1.2 hereof, the President of the
Company shall act as the chief executive officer and in general
supervise and control the day-to-day business and affairs of the
Company. The President shall see that all orders and resolutions
of the Board are carried into effect. He may sign, with the
Secretary of the Company or any other officer of the Company duly
authorized by the Board, deeds, mortgages, bonds, contracts, or
other instruments that the Board has authorized to be executed,
except in cases where the signing and execution thereof shall be
expressly delegated by the Board or by this Agreement to some
other officer or agent of the Company or shall be required by law
to be otherwise signed or executed. The President shall perform
such other duties as may be prescribed by the Board from time to
time.
6.6 Vice Presidents.
In the absence of the President or in the event of his
death, inability or refusal to act, a Vice President designated
by the Board shall perform the duties of the President, and when
so acting, shall have all the powers of and be subject to all the
restrictions upon the President. Any Vice President shall
perform such duties as from time to time may be assigned to him
by the President and by the Board. The Board may, at its
discretion, delegate to the President the authority to appoint
and remove vice presidents.
6.7 Secretary.
The Secretary shall keep the minutes of the meetings of
Members and of the Board in one or more books provided for such
purpose; cause to be given all notices of meetings of Members and
of the Board; be custodian of the corporate records and of the
seal of the Company and see that the seal of the Company is
affixed to all documents the execution of which on behalf of the
Company under its seal is duly authorized; have charge of the
record of Members; and in general perform all duties incident to
the office of secretary and such other duties as from time to
time may be assigned to the Secretary by the President or by the
Board.
6.8 Chief Financial Officer.
The Chief Financial Officer shall supervise the receipt and
custody of the Company's funds; cause to be kept correct and
complete books and records of account, including full and
accurate accounts of receipts and disbursements, in books
belonging to the Company; assume investment management
responsibility for all funds and securities of the Company; cause
to be prepared, distributed and retained all reports and records
required by law regarding the Company's financial status; and
perform such other duties as may be assigned to him, or
specifically required to be performed by him, by the President
and by the Board.
6.9 Remuneration.
The remuneration of officers shall be fixed from time to
time by the Board; provided, however, that the Board may delegate
to the President the authority to fix the salary of all or any
class of officers except the office of President.
Article VII
INDEMNIFICATION; LIMITATION OF LIABILITY; OTHER ACTIVITIES;
CONFIDENTIALITY
7.1 Indemnification by the Company.
The Company, to the fullest extent permitted by applicable
law, shall indemnify, defend and hold harmless any officer,
employee or agent of the Company (each a "Covered Company
Person") from and against any loss, damage, or claim incurred by
such Covered Company Person, including reasonable attorneys'
fees, disbursements and reasonable settlement payments, incurred
in connection with any claim, action, suit or proceeding or
threat thereof, made or instituted in which such Covered Company
Person may be involved or be made a party by reason of such
Covered Company Person's association with the Company, or by
reason of any act or omission performed or omitted by such
Covered Company Person acting in good faith on behalf of the
Company and in a manner reasonably believed to be within the
scope of authority conferred on such Covered Company Person by or
pursuant to this Agreement, except that no Covered Company Person
shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Covered Company Person by reason
of gross negligence, bad faith, or willful misconduct with
respect to such act or omissions; provided, however, that any
indemnity under this Section 7.1 shall be provided out of and to
the extent of Company assets only, and no other Covered Company
Person and no Member or Manager shall have any personal liability
on account thereof.
7.2 Notice to Company.
In the event that any claim, demand, action, suit or
proceeding shall be instituted or asserted or any loss, damage or
claim shall arise in respect of which indemnity may be sought
pursuant to Section 7.1, such Covered Company Person shall
promptly notify the Company, in writing. Failure to provide
notice shall not affect the obligations hereunder except to the
extent the Company is actually prejudiced thereby.
7.3 Contest by Company.
The Company shall have the right to participate in and/or
control the defense of any such claim, demand, action, suit or
proceeding and, in connection therewith, to retain counsel
reasonably satisfactory to each Covered Company Person, at the
Company's expense, to represent each Covered Company Person and
any others the Company may designate in such claim, demand,
action, suit or proceeding. The Company shall keep the Covered
Company Person advised of the status of such claim, demand,
action, suit or proceeding and the defense thereof and shall
consider in good faith recommendations made by the Covered
Company Person with respect thereto.
7.4 Advances of Expenses by Company.
Expenses incurred by a Covered Company Person in defending any
claim, demand, action, suit, or proceeding subject to Section 7.1
shall, from time to time, upon request by the Covered Company
Person and approval of the Board, be advanced by the Company
prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the Company of an undertaking
by or on behalf of the Covered Company Person to repay such
amount if it shall be ultimately determined in a judicial
proceeding that such Covered Company Person is not entitled to be
indemnified as authorized in Section 7.1.
7.5 Indemnification by a Member.
Each Member, to the fullest extent permitted by applicable
law, shall indemnify, defend, and hold harmless the Company, each
Manager appointed by such Member, (including those who have been,
but no longer are, such Managers) and each other Member
(including those who have been, but no longer are, Members) (each
a "Covered Member Person") from and against any loss, damage, or
claim incurred by such Covered Member Person, including
reasonable attorneys' fees, disbursements and reasonable
settlement payments, incurred in connection with any claim,
action, suit or proceeding or threat thereof, made or instituted:
(i) in which the Company or the other Member may be involved, or
are brought by the Company or the other Member by reason of a
material breach of such Member's representations or covenants
under this Agreement or otherwise or (ii) in which the Manager
appointed by such Member may be involved or be made a party by
reason of such Manager's association with the Company or by
reason of any act or omission performed or omitted by such
Manager acting in good faith on behalf of the Member or the
Company and in a manner reasonably believed to be within the
scope of authority conferred on such Manager by such Member or
the Company, except that no Manager shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by
such Manager by reason of gross negligence, bad faith, or willful
misconduct with respect to such act or omissions.
7.6 Notice to Member.
In the event that any claim, demand, action, suit or
proceeding shall be instituted or asserted or any loss, damage or
claim shall arise in respect of which indemnity may be sought
pursuant to Section 7.5, such Covered Member Person shall
promptly notify the indemnifying Member, in writing. Failure to
provide notice shall not affect the obligations hereunder except
to the extent the indemnifying Member is actually prejudiced
thereby.
7.7 Contest by Member.
The indemnifying Member shall have the right to participate
in and/or control the defense of any such claim, demand, action,
suit or proceeding and, in connection therewith, to retain
counsel reasonably satisfactory to each Covered Member Person, at
the Member's expense, to represent each Covered Member Person and
any others the Member may designate in such claim, demand,
action, suit or proceeding. The Member shall keep the Covered
Member Person advised of the status of such claim, demand,
action, suit or proceeding and the defense thereof and shall
consider in good faith recommendations made by the Covered Member
Person with respect thereto.
7.8 Advances of Expenses by Member.
Expenses incurred by a Covered Member Person in defending any
claim, demand, action, suit, or proceeding subject to Section 7.5
shall, from time to time, upon request by the Covered Member
Person and approval of the indemnifying Member, be advanced by
such Member prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by such Member of an
undertaking by or on behalf of the Covered Member Person to repay
such amount if it shall be ultimately determined in a judicial
proceeding that such Covered Member Person is not entitled to be
indemnified as authorized in Section 7.5.
7.9 Other.
The indemnifications provided by Section 7.1 shall be in addition
to any other rights to which a Covered Company Person may be
entitled under any agreement, vote of the Board, or otherwise as
a matter of law or equity, both as to an action in the
indemnifying party's capacity as Company, and as to an action in
another capacity. The indemnifications provided by Section 7.5
shall be in addition to any other rights to which a Covered
Member Person may be entitled under any agreement, as a matter of
law or equity, or otherwise, both as to an action in the
indemnifying party's capacity as a Member, and as to an action in
another capacity.
7.10 Effect of Interest in Transaction.
No Covered Company Person or Covered Member Person shall be
denied indemnification in whole or in part under this Article VII
or otherwise by reason of the fact that the Covered Company
Person or Covered Member Person had an interest in the
transaction with respect to which the indemnification applies if
the transaction was otherwise permitted or not expressly
prohibited by the terms of this Agreement.
7.11 No Third Party Rights.
The provisions of this Article VII are for the benefit of the
Covered Company Persons and the Covered Member Persons and shall
not be deemed to create any rights for the benefit of any other
Persons.
7.12 Insurance.
7.12.1 The Company shall maintain, at its
expense, an insurance policy or policies with director, officer
or employee coverage of at least FIVE MILLION UNITED STATES
DOLLARS (US$5,000,000), to protect itself and any Covered Company
Person against liability arising out of this Agreement or
otherwise, whether or not the Company would have the power to
indemnify any such person against such liability under the laws
of the State. Each Member shall maintain, at its expense, an
insurance policy or policies to adequately protect itself and any
Manager appointed by such Member against liability arising out of
this Agreement or otherwise, whether or not the Member would have
the power to indemnify any such Manager against such liability
under the laws of the State. Each Member and the Company shall
provide to one another, upon request, evidence of such insurance.
7.12.2 The Company, at its expense, shall
maintain property and casualty and such other insurance, in such
amounts and against such risks, and with such deductibles and
self insured retention limits, as the Board may, by Majority
Vote, determine, provided however, that for the first year after
formation of the Company, the Company shall maintain such other
types and amounts of property and casualty insurance as was
carried and insured against by the Initial Members for their
Business. Upon request, the Company shall deliver to each Member
satisfactory evidence of any such coverage.
7.13 Limitation of Liability.
Neither the Members (nor any of their respective
Affiliates), nor the Managers, nor the Board shall be liable,
responsible or accountable in damages or otherwise to the Company
or the Members for any act or omission by any such Person (which
shall include any applicable entity) performed in good faith
pursuant to the authority granted to such Person by this
Agreement or in accordance with its provisions, and in a manner
reasonably believed by such Person to be within the scope of the
authority granted to such Person and in the best interest of the
Company; provided, however, that such Person shall retain
liability for acts or omissions that involve intentional
misconduct, a knowing violation of the law, a violation of
Section 18-607 of the Act (in the case of Members only) or for any
transaction from which the Person will personally receive a
benefit in money, property, or services to which the Person is
not legally entitled.
7.13.2 Each of the Partners shall at all times duly and punctually pay
and discharge its separate debts, obligations and liabilities of the
Company, whether arising in contract, tort, strict liability or otherwise,
shall be solely the debts, obligations and liabilities of the Company,
and none of the Members or the Managers shall be obligated
personally for any such debt, obligation or liability of the
Company solely by reason of being a Member or a Manager. The
failure of the Company to observe any formalities or requirements
relating to the exercise of its powers or management of its
business or affairs under the Act of this Agreement shall not be
grounds for imposing personal liability on the Members or the
Managers for liabilities of the Company.
7.14 Other Activities.
7.14.1 The Members and the Company each acknowledge that
a fundamental intent of this Agreement and expectation of the
Members and the Company is that, except as expressly provided in
this Agreement or in the Operative Agreements, (i) the Company
shall be the exclusive distribution channel for each Member and
their Affiliates for all Active Ingredients, Formulations,
Equipment and Other Products and/or Services for Seed Treatment
uses and applications in the Territory, and (ii) the Company
shall develop, formulate, manufacture, register, market and sell
Active Ingredients, Formulations, Equipment and Other Products
and/or Services only for Seed Treatment uses and applications
inside the Territory.
7.14.2 The Company and the Members hereto agree to
exercise in good faith all reasonable efforts to satisfy the
intent and expectation set forth in Section 7.14.1. In
furtherance of that intent, and to protect adequately the
Member's Membership Interest in the Company, it is necessary and
essential that the Company and the Members enter into and adhere
to the covenants contained in this Section 7.14.
7.14.3 Except as otherwise provided in the Operative
Agreements, no Member or its Affiliates shall, either directly or
indirectly: (i) Compete with the Company for Seed Treatment uses
and applications in the Territory; (ii) Invest or Participate in
any Person that Competes with the Company for Seed Treatment uses
and applications in the Territory, or market or sell any Post-
Exercise Products to any Person; or (iii) sell, market or
distribute Active Ingredients, Formulations, Equipment and Other
Products and/or Services to any Person that such Member or such
Affiliate knows or has reason to believe intends to market, sell,
distribute, use or apply such Active Ingredients, Formulations,
Equipment or Other Products and/or Services for Seed Treatment
uses or applications inside the Territory.
7.14.4 No employee of the Company, or employee or member
of the board of directors, managing board or similar governing
body ("Governing Body") of a Member or its Affiliates shall
serve as an employee or member of a Governing Body of a
Competitor of the Company.
Except as otherwise provided in the Operative
Agreements, the Company shall not develop, formulate,
manufacture, register, market or sell Active Ingredients,
Formulations, Equipment and Other Products and/or Services for
Seed Treatment uses and applications outside the Territory, or
for other than Seed Treatment, regardless of where the use or
application occurs, or otherwise Compete with either Member in
Seed Treatment uses or applications outside the Territory or in
other than Seed Treatment, regardless of where the use or
application occurs.
Each of the Members and the Company agree that during
the term of this Agreement, and continuing for twelve (12) months
thereafter, it will not, nor will it permit any of its Affiliates
to, solicit for employment or employ any employee employed by the
Company or either Member, other than any employee that has been
terminated by such party prior to such solicitation.
7.15 Confidential Information.
7.15.1 Except as may be specifically authorized in this
Agreement or the Operative Agreements, or as may be permitted by
agreements with Third Parties, or as may be specifically agreed
to by the Members and the Company in a writing signed by all
parties, the Company will hold the Confidential Information of
each Member, the Company and any Third Party in strict confidence
and take all reasonable steps to prevent use by, or disclosure
to, any other Person, which steps will include at least those
taken by the Company to protect its own Confidential Information
of like kind, or use or disclose any such Confidential
Information for any purpose except as provided in this Agreement,
agreements with Third Parties or the Operative Agreements.
7.15.2 Except as may be specifically authorized in this
Agreement or the Operative Agreements, or as may be permitted by
agreements with Third Parties, or as may be specifically agreed
to by the Members and the Company in a writing signed by all
parties, the Members will hold the Confidential Information of
the other Member, the Company and any Third Party in strict
confidence and take all reasonable steps to prevent use by, or
disclosure to, the other Member and any other Third Parties,
which steps will include at least those taken by the Member to
protect its own Confidential Information of like kind, or use or
disclose any such Confidential Information for any purpose except
as provided in this Agreement, agreements with Third Parties or
the Operative Agreements; provided however that a Member may
disclose Confidential Information of the Company and the other
Member to a Third Party in connection with a sale of the
Membership Interest pursuant to Sections 4.13 or Article VIII or
a transfer, by merger, consolidation, sale or otherwise, of the
stock of a Member or its Parent, or of all or substantially all
of the Crop Protection Business of a Member or its direct or
indirect parent; provided that prior to such disclosure, such
Third Party agrees in writing not to disclose such Confidential
Information to any other Third Parties or to otherwise use such
Confidential Information without the prior written permission of
the disclosing Member hereto.
7.15.3
7.15.3.1 Except as specifically authorized in this
Agreement or the Operative Agreements, the Company shall not
disclose any competitively significant Confidential Information
of a Member to any Manager who works in the crop protection or
agrochemical operations group of the other Member.
Except as permitted by agreements with Third
Parties, the Company will not disclose any competitively
significant Confidential Information of a Third Party to any
Member or Manager.
Except as may be specifically authorized in this
Agreement or the Operative Agreements, or as may be permitted by
agreements with a Member or as may be specifically agreed to by a
Member and the Company in writing, the Company will hold the
Confidential Information of each Member and each Member's
Affiliates in strict confidence, and take all reasonable steps to
prevent use by, or disclosure to one Member of Confidential
Information of the other Member, or the other Member's
Affiliates, which steps will include at least those taken by the
Company to protect its own Confidential Information of like kind,
provided however, the Company, subject to Section 7.15.3.1, may
disclose Confidential Information of a Member to the Board to
the extent such disclosure is required to permit the Board to
conduct the business and affairs of the Company pursuant to
Section 4.1. Each Manager shall be required to execute an
undertaking that, in the event the Manager of one Member is given
access to the Confidential Information of the other Member or its
Affiliates as a result of performing his duties on the Board, the
Manager shall hold the Confidential Information of the Member or
its Affiliates in strict confidence, and will not use the
Confidential Information for any purpose other than to perform
his duties on the Board, and will not disclose the Confidential
Information to any Person other than another Manager who is
authorized, pursuant to Section 7.15.3.1, to have access to such
Confidential Information.
Except as required by law and except for Securities and
Exchange Commission filings made by a Member, the Company and the
Members shall not make any announcement, press release or other
public statement relating in any manner to this Agreement, the
terms hereof or the relationship of the Members without first
obtaining the consent of the Members to the disclosure proposed
to be made. The Members hereto shall not unreasonably withhold
their consent to any request made by a party pursuant to this
Section 7.15.4. The Members and the Company shall use their best
efforts to consult and coordinate with each other before making
any announcement, press release or other public statement
required by law to be made.
Agreements with the Company.
Neither Member shall, without the approval of a Majority
Vote of the Board, permit any of its Affiliates to create, amend,
terminate or modify any arrangement, agreement or contract
between the Company and (i) any Member, Xxxxxxxxx Partnership a
Subsidiary or any Partner, (ii) an Affiliate of a Member,
Xxxxxxxxx Partnership, a Subsidiary or a Partner, or(iii) an
employee, executive officer or director or other board member or
representative of a Member, Xxxxxxxxx Partnership, a Partner or a
Subsidiary. Neither Member, shall, without the unanimous consent
of the Board, permit any sublicense under the Cross License
Agreement by it or any of its Affiliates.
Article VIII
TRANSFERS AND ADMISSION OF NEW MEMBERS
8.1 Preemption Rights; Right of First Offer; Rights of First
Refusal.
Except for sales pursuant to Section 4.13, no Member shall
Transfer any or all of its Membership Interest without first
complying with this Section 8.1.
8.1.1. Right of First Offer. If a Member desires to Transfer
its Membership Interest, a Member may so notify the other Member
in the manner provided in Section 8.1.1.1 of its willingness to
Transfer ("Soliciting Offer"). As used in this Section 8.1.1,
the Member desiring to Transfer shall be referred to as the
"Soliciting Member", and the other Member shall be referred to as
the "NonSoliciting Member".
8.1.1.1. The Soliciting Member's Soliciting Offer shall
include: (i) the Percentage of Membership Interest being
proposed for Transfer which shall be that Soliciting Member's
entire Membership Interest; (ii) the date for responding to the
Soliciting Offer, which date shall not be less than thirty (30)
days after the date of the Soliciting Offer; (iii) the date of
closing of the purchase of the Membership Interest, which
purchase date shall not be more than one hundred and eighty (180)
days after the date of the Soliciting Offer; (iv) a proposed
purchase price for the Membership Interest, denominated and
payable in United States Dollars at closing ("Proposed Purchase
Price"); and (v) other basic terms and conditions of the proposed
Transfer.
8.1.1.2. A Soliciting Offer is provisionally accepted by the
NonSoliciting Member if a letter of intent is signed by the
Soliciting Member and the NonSoliciting Member in the manner and
within the time frame required in the Soliciting Offer, subject
to execution of the definitive purchase agreement in accordance
with the provisions of Section 8.1.1.3. The closing of the
transaction contemplated by such Soliciting Offer shall take
place at the office of the Soliciting Member's attorney in the
United States on a date which is the fifth (5) day following the
date that Section 8.1.3 has been satisfied, but in no event later
than one hundred and eighty (180) days after the date of the
Soliciting Offer.
8.1.1.3. If (i) a Soliciting Offer is rejected, or is not
accepted by the NonSoliciting Member as provided in Section
8.1.1.2, or (ii) a definitive purchase agreement is not signed by
both the Soliciting Member and the NonSoliciting Member within
forty-five (45) days of the NonSoliciting Member's acceptance of
such Soliciting Offer, despite the good faith efforts of the
Members to do so, or (iii) the Transfer of the Membership
Interest fails to close in accordance with the terms of the
purchase agreement (including the failure to satisfy Section
8.1.3), then, upon the occurrence of any of (i), (ii) or (iii),
during the period ending sixty (60) months following the date of
this Agreement, the Soliciting Member may provide the
NonSoliciting Member with a revised Soliciting Offer that
replaces the Proposed Purchase Price with the Calculated Purchase
Price and which revises the dates for response and closing to not
less than thirty (30) days from the date of the revised
Soliciting Offer and not more than one hundred and eighty (180)
days from the date of the revised Soliciting Offer, respectively.
8.1.1.4 Upon the occurrence more than sixty (60) months
following the date of this Agreement of any of (i), (ii) or (iii)
as provided in Section 8.1.1.3, if the Soliciting Member so
elects, the Soliciting Member and the NonSoliciting Member shall,
within forty-five (45) days of such occurrence engage a Neutral
Investment Bank to value the Membership Interest of the
Soliciting Member, denominated and payable in United States
Dollars ("IBank Value"). The engagement of the Neutral
Investment Bank shall be on the following terms and conditions:
(x) the banker shall be instructed to determine the Fair Market
Value of the entire Membership Interest of the Soliciting Member,
taking into account the terms and conditions of the Soliciting
Offer, other than price, (y) the instructions provided to the
Neutral Investment Bank are subject to the NonSoliciting Member's
approval, which approval shall not be unreasonably withheld, and
(z) at no time will the Neutral Investment Bank be advised of any
Member's current valuation of the Company and/or its Membership
Interest. Such IBank Value shall be provided within forty-five
(45) days of the engagement of the Neutral Investment Bank.
8.1.1.4.1 The Soliciting Member, after obtaining the
IBank Value as provided in Section 8.1.1.4, may provide the
NonSoliciting Member with a revised Soliciting Offer which
replaces the Proposed Purchase Price with the IBank Value and
which revises the dates for response and for closing to be thirty
(30) days from the date of the revised Soliciting Offer and one
hundred and eighty (180) days from the date of the revised
Soliciting Offer, respectively,
8.1.1.4.2 If within thirty (30) days after obtaining the
IBank Value as provided in Section 8.1.1.4, the Soliciting Member
does not provide the NonSoliciting Member with a revised
Soliciting Offer as provided in Section 8.1.1.4.1, the Soliciting
Member (i) shall pay the fees of the Neutral Investment Bank, and
(ii) may not Transfer its Membership Interest in accordance with
this Section 8.1.1 for a period of eighteen (18) months after the
date of receipt of the IBank Value, after which period the
Soliciting Member may Transfer such interest after again
complying with the provisions of this Section 8.1.1.
8.1.1.5 A revised Soliciting Offer, as provided in Section
8.1.1.3 or Section 8.1.1.4.1 ("Revised Soliciting Offer") is
provisionally accepted by the NonSoliciting Member if a letter of
intent is signed by the Soliciting Member and the NonSoliciting
Member in the manner and within the time frame required in the
Revised Soliciting Offer, subject to execution of the definitive
purchase agreement in accordance with the provisions of Section
8.1.1.6. The closing of the transaction contemplated by such
Revised Soliciting Offer shall take place at the office of the
Soliciting Member's attorney in the United States on a date which
is the fifth day following the date that Section 8.1.3 has been
satisfied, but in no event later than one hundred and eighty
(180) days after the date of the Revised Soliciting Offer, and
the fees of any Neutral Investment Bank engaged as provided in
Section 8.1.1.4 shall be paid one-half by the Soliciting Member
and one-half by the NonSoliciting Member.
8.1.1.6 If (i) a Revised Soliciting Offer is rejected, or is
not accepted by the NonSoliciting Member as provided in Section
8.1.1.5, or (ii) a definitive purchase agreement is not signed by
both the Soliciting Member and the NonSoliciting Member within
forty-five (45) days of the NonSoliciting Member's acceptance of
such Revised Soliciting Offer, despite the good faith efforts of
the Member to do so, or (iii) the Transfer of the Membership
Interest fails to close in accordance with the terms of the
purchase agreement (including the failure to satisfy Section
8.1.3), then, upon the occurrence of any of (i), (ii) or (iii),
the Soliciting Member may, during the eighteen (18) month period
following the occurrence of any of (i), (ii) or (iii),
("Solicitation Period"), Transfer all, but not less than all, of
the Membership Interest to a Third Party, on terms including
purchase price which are reasonably similar to those in the
Revised Soliciting Offer and which are economically equivalent or
greater than those in the Revised Soliciting Offer. Upon the
occurrence of any of (i), (ii) or (iii), the NonSoliciting Member
shall pay the fees of any Neutral Investment Bank, engaged as
provided in Section 8.1.1.4.
8.1.1.7 In the event the Membership Interest is not sold
within the periods provided in Section 8.1.1.5, the Soliciting
Member shall not, after the periods, Transfer such Membership
Interest to any Third Party, without first complying with Section
8.1.2 or, at the Soliciting Member's option, again complying with
this Section 8.1.1.
8.1.2 First Right of Refusal. If a Member at any time
receives a Bona Fide Offer for the purchase of its Membership
Interest, such Member (the "Soliciting Member") may, at its
option, give the other Member (the "NonSoliciting Member")
notice of such Bona Fide Offer (the "Third Party Soliciting Offer
Notice"), provide with the Third Party Soliciting Offer Notice a
copy of the Bona Fide Offer, and offer to Transfer such
Membership Interest to the NonSoliciting Member on the same terms
and conditions, including purchase price, as those contained in
the Bona Fide Offer, except that the closing shall take place at
least ninety (90) days, and no later than one hundred eighty
(180) days after the date of the Third Party Soliciting Offer
Notice.
8.1.2.1 Within thirty (30) days after receipt of the Third
Party Soliciting Offer Notice, the NonSoliciting Member may
elect, by written notice to the Soliciting Member, to purchase
such Membership Interest on the same terms and conditions as
contained in the Bona Fide Offer, as modified by the terms of
Section 8.1.2. Any Transfer shall be subject to the satisfaction
of any necessary approvals as provided in Section 8.1.3.
8.1.2.2 In the event the NonSoliciting Member rejects or
fails to accept such offer within such thirty (30) days as
provided in Section 8.1.2.1, the Soliciting Member shall be free
to Transfer such Membership Interest to such Third Party, on the
terms and conditions set forth in the Bona Fide Offer, subject to
any approvals required pursuant to Section 8.1.3, provided that
such Transfer occurs within two hundred and seventy (270) days
after the rejection or expiration of the period in which the
NonSoliciting Member might have accepted the offer set forth in
the Third Party Soliciting Offer Notice.
8.1.2.3 Any closing shall take place at the office of the
Soliciting Member's attorney in the United States.
8.1.2.4 In the event the Soliciting Member shall not close
the Transfer of such Membership Interest to the Third Party, on
the terms and conditions in the Bona Fide Offer within two
hundred seventy (270) days from the date the NonSoliciting Member
rejects or the expiration of the period in which the
NonSoliciting Member might have accepted the offer set forth in
the Third Party Offer Notice, then, except as may be otherwise
permitted by Section 8.1.1, should such Soliciting Member
thereafter elect to Transfer such Membership Interest to the same
or other Third Party, on the same or other terms and conditions,
the Soliciting Member shall be required to again comply with all
of the terms and provision of Section 8.1.2.
8.1.2.5 No Member may accept any offer from a Third Party for
the purchase of such Member's Membership Interest without such
Member having provided the other Member with a Third Party
Soliciting Offer Notice relative to such offer and having
otherwise complied with this Section 8.1.2.
8.1.3 Approvals. The Transfer of any Membership Interest
pursuant to Section 8.1 shall be subject to the requirements of
the HSR Act and all other applicable federal and state antitrust
statutes and the expiration of any applicable waiting periods in
connection therewith.
8.1.4 Notwithstanding anything to the contrary in Section 8.1, no
Member is obligated to comply with Sections 8.1.1 and 8.1.2 prior
to the Transfer of such Member's Membership Interest to an
Affiliate of such Member, if such Transfer is made with the prior
written consent of the other Member, which consent shall not be
unreasonably withheld, delayed or conditioned.
8.2 Involuntary Transfers.
8.2.1. Upon any Involuntary Transfer of all or any part
of an Interest to anyone other than a Member, the Member
suffering such Involuntary Transfer (the "Suffering Member")
shall immediately give notice of such Involuntary Transfer (the
"Offered Interest Notice") to the Company and the other Member
(the "NonSuffering Member").
8.2.2. If the Interest of a Member suffers an Involuntary
Transfer as described in Section 8.2.1, the NonSuffering Member
shall have the right to make an offer to purchase such Interest
under this Section 8.2.2 upon receipt of the Offered Interest
Notice or upon otherwise learning of the Involuntary Transfer
(the "Offered Interest"). The NonSuffering Member shall have a
period of thirty (30) days after the date of receipt of the
Offered Interest Notice in which to make an written offer (the
"Interest Offer") to purchase the Offered Interest under the
terms and conditions of this Section 8.2. Failure of the
NonSuffering Member to make an Interest Offer with the required
time period shall be deemed a rejection of the Offered Interest.
8.2.3. The purchase price for the Offered Interest shall be
determined in accordance with this Section 8.2.3. The purchase
price to be paid for the Offered Interest shall be equal to the
fair market value of such Offered Interest on the date of the
offer to purchase the Offered Interest (the "Price"). If the
holder of the Offered Interest ("Interest Seller") and the
NonSuffering Member are able to reach agreement as to the Price,
such agreed Price shall govern. If the Interest Seller and the
NonSuffering Member cannot agree on a Price within forty-five
(45) days after the date of the Interest Offer, the Price shall
be determined by a Neutral Investment Bank appointed by the
Interest Seller and the NonSuffering Member within one hundred
and five (105) days after the date of the Interest Offer. If the
Interest Seller and the NonSuffering Member cannot agree on a
Neutral Investment Bank within such period, the Price shall be
determined jointly by a Neutral Investment Bank representing the
Interest Seller and a Neutral Investment Bank representing the
NonSuffering Member (collectively if more than one), each to be
appointed within such sixty (60) day period. If the Neutral
Investment Banks are unable to agree on a Price within thirty
(30) days after the latest date of appointment, they shall within
thirty-five (35) days after such latest date of appointment
select a third Neutral Investment Bank who shall determine within
thirty (30) days after its appointment the Price by arriving at a
valuation either equal to that determined by one of the initial
Neutral Investment Banks or between both initial valuations.
Notwithstanding the foregoing sentence, if the higher of the
values determined by the initial Neutral Investment Banks is not
in excess of 115% of the value determined by the third Neutral
Investment Bank, the Neutral Investment Banks shall be deemed to
have agreed upon a Price equal to the average of the two
determinations. If the two initial Neutral Investment Banks are
unable to agree on a third Neutral Investment Bank, they shall
each appoint an independent Neutral Investment Bank within
thirty-five (35) days after the date that they are unable to
agree on the third Neutral Investment Bank. The two independent
Neutral Investment Banks shall elect within thirty (30) days
after the latest appointment elect a third Neutral Investment
Bank. Each of the Interest Seller and the NonSuffering Member
shall bear the cost and expenses of the Neutral Investment
Bank(s) it or they appoint, and each shall bear one-half of the
cost and expenses of the third Neutral Investment Bank or the
sole Neutral Investment Bank if only one is appointed. The
NonSuffering Member shall have a period of ten (10) days after
the date of agreement as to Price, or after the date of receipt
of the Price calculated by the Neutral Investment Banks in
accordance with this Section 8.2.3 in which to give notice that
it will purchase the Offered Interest at the Price ("Price
Notice"). Failure of the NonSuffering Member to give such notice
within the required time period shall be deemed a rejection of
the Offered Interest.
8.2.4. The Price shall be paid entirely in cash. The closing
of the purchase and sale of the Offered Interest shall occur on
the later of (i) eighty (80) days following the date of the
Interest Offer or (ii) thirty (30) days after the Price Notice.
The Offered Interest shall be transferred free and clear of all
taxes, debts, claims, judgments, liens, encumbrances or other
defects.
8.2.5. Any sale of the Offered Interest shall be subject to
the requirements of the HSR Act and all other applicable federal
and state antitrust statutes and expiration of applicable waiting
periods in connection therewith.
8.2.6. If the Offered Interest is rejected by the
NonSuffering Member as described in Section 8.2.2 or 8.2.3, the
NonSuffering Member will be deemed to have consented to the sale
of the Offered Interest and the Membership Rights associated with
such Offered Interest, and the admission of the purchaser of such
Offered Interest as an admitted Member. If an Involuntary
Transfer is not completed pursuant to Section 8.2, the Interest
Seller shall be deemed to have not received consent from the
NonSuffering Member (unless the NonSuffering Member waives in
writing its right to consent pursuant to Section 8.7) to the sale
of the Membership Interest and admission of the purchaser as a
Member; and accordingly such purchaser shall be a Transferee of
any or part of the Interest of the Interest Seller and shall not
be an admitted Member; and the Interest Seller shall be deemed to
have assigned its Membership Rights, including its right to
appoint Managers, as to such Offered Interest to the NonSuffering
Member. The Offered Interest shall remain subject to this
Section 8.2 with respect to any later Involuntary Transfer.
8.3 Change of Control
Upon the occurrence of a Change of Control with respect to
any Member (the "Notifying Member") the Notifying Member shall
promptly deliver written notice thereof (a "Change of Control
Notice") to the other Member (the "Non-Notifying Member"),
together with reasonable details specifying the applicable
section of this Agreement constituting such Change of Control has
occurred, and such additional information reasonably requested by
the Non-Notifying Member. During the forty-five (45) days
following the date of the Change of Control Notice, the Non-
Notifying Member shall deliver to the Notifying Member a written
response which shall either (i) state that the Non-Notifying
Member will take no action pursuant to this Section regarding
such Change of Control, or (ii) state the Non-Notifying Member's
election to purchase the Notifying Member's Membership Interest
as provided in this Section at the Calculated Purchase Price. The
closing of the resulting transaction will take place within
thirty (30) days after delivery of such response to the Notifying
Member, subject to the requirements of the HSR Act and all other
applicable antitrust statutes and the expiration of applicable
waiting periods in connection therewith. At such closing (x) the
Non-Notifying Member shall deliver to the Notifying Member the
Calculated Purchase Price in U.S. dollars, by wire transfer of
same day funds to the account specified by the Notifying Member
in writing at least two (2) business days prior to such closing
and (y) the Notifying Member shall deliver to the Non-Notifying
Member a written instrument of transfer (in form and substance
reasonably satisfactory to such Non-Notifying Member) duly
authorized, executed and delivered by the Notifying Member,
transferring the Notifying Member's Membership Interest to the
Non-Notifying Member free and clear of all taxes, debts, claims,
judgements, liens, encumbrances or other charges against such
Interest or other defects of title to such Interest. The failure
of any Notifying Member to deliver a Change of Control Notice as
required hereby shall not relieve the Notifying Member of its
obligations hereunder or otherwise affect the rights and
obligations of the parties hereunder. If the Non-Notifying
Member elects to purchase the Notifying Member's Membership
Interest as provided in this Section and if due to the
requirements of applicable antitrust statutes the transaction is
not closed within three hundred sixty (360) days after delivery
to the Notifying Member of the Non-Notifying Member's written
response stating such election, the Notifying Member shall have
no obligation to transfer its Membership Interest to the Non-
Notifying Member pursuant to this Section 8.3.
8.4 Admission of Transferee.
A Transferee will be admitted as a Member only upon the
satisfaction or waiver of conditions set forth in this Section
8.4.
8.4.1. The other Member must consent to the admission of
the Transferee, which consent may be given or denied in the
absolute discretion of the other Member. If a sale is completed
pursuant to Section 4.13, 8.1, 8.2 or 8.3, the Members or Member
shall be deemed to have consented to the Transfer of Membership
Interest and the admission of a Transferee of the Interest as an
admitted Member of the Company. If a Member transfers any or all
of its Membership Interest to an Affiliate of such Member with
the prior written consent of the other Member, the other Member
shall be deemed to have consented to the admission of such
Affiliate as a Member.
8.4.2. The Interest with respect to which the Transferee
is seeking admission as a Member must have been acquired in
accordance with this Agreement.
8.4.3. The Transferee must become a party to this Agreement
as a Member and must execute such documents and instruments as
the other Member may reasonably request (including, without
limitation, amendments to the Agreement or the Certificate of
Formation) to confirm such Transferee as a Member in the Company
and such Transferee's agreement to be bound by the terms and
conditions of this Agreement.
8.4.4. The Transferee must pay or reimburse the Company for
all reasonable legal, filing, and publication costs that the
Company incurs in connection with the admission of the Transferee
as a Member with respect to the Transferred Interests.
8.4.5. The Transferee must provide the Company with an
opinion of counsel satisfactory to counsel for the Company that
the Transfer of the Interest was lawful and in accordance with
the provisions of this Agreement.
8.5 Rights of Unadmitted Transferees.
A Person who becomes a Transferee of Interest but who
is not admitted as a Member pursuant to Section 8.4 shall be
entitled only to allocations and Distributions with respect to
such Interest in accordance with this Agreement. Such Person
shall have no Membership Rights, no right to appoint Managers, no
voting rights, no right to participate in the management of the
business, to see books and records, and shall not have any of the
rights of a Member under the Act or this Agreement.
8.6 No Right to Payment on Disassociation.
In the event of disassociation of a Member (as set forth in
the Act) such dissociated Member or its Transferee shall not be
paid the fair market value of such Member's Interest. The
dissociating Member shall have only the rights specified in this
Agreement.
8.7 Preemptive Rights.
The Members shall have the ability to create and sell any
additional Membership Interest on terms satisfactory to both
Members and to admit the purchaser of such Membership Interest as
a Member pursuant to the terms of this Agreement. Each Member
shall have preemptive rights with respect to any additional
Membership Interest or Interest sold by the Company.
8.8 Waiver.
The right of first offer and/or first refusal contained in
Section 8.1 or the right to purchase the Offered Interest as
provided in Section 8.2 may be waived in a writing signed by a
Member who is entitled to exercise that right with respect to a
particular Transfer or Involuntary Transfer in which event the
Membership Interest may be sold, or a previous Transfer or
Involuntary Transfer may be confirmed to be free and clear of the
provisions of this Section 8. A certificate executed and
acknowledged by the president or other duly authorized officer of
a Member, on behalf of the Member, stating that the provisions of
Sections 8.1 or 8.2 have been met by a Selling Member, Soliciting
Member or Interest Seller, or that the provisions have been duly
waived by the certifying Member, or that the Transfer is exempt
from Sections 8.1 and 8.2 shall be conclusive upon the certifying
Member in favor of all Persons who rely thereon in good faith.
Such certificate shall be furnished to any Member who has in fact
complied with the provisions of Sections 8.1 or 8.2.
Article IX
DISSOLUTION AND LIQUIDATION
9.1 Events of Dissolution.
The Company shall be dissolved upon the happening of any of
the following events:
9.1.1. when terminated pursuant to the terms of Section 2.4;
or
9.1.2. upon the written agreement of all Members.
9.1.3. upon a sale of all or substantially all of the
Company's assets and the receipt of the proceeds therefore.
9.2 Not Dissolution.
The resignation, withdrawal, expulsion, or bankruptcy of a
Member or the occurrence of any other event that otherwise
terminates the continued membership of a Member in the Company
shall not result in the dissolution of the Company, but shall
trigger the provisions set forth in Section 8.2.
9.3 Procedure for Winding Up and Dissolution.
If the Company is dissolved, the Board shall wind up its
affairs. On winding up of the Company, the assets of the Company
shall be distributed, first, to creditors of the Company,
including Members who are creditors, in satisfaction of the
liabilities of the Company, and then, amounts in excess of any
reserves deemed reasonably necessary by the Board to pay all of
the Company's claims and obligations shall be distributed to the
Interest Holders in accordance with their Capital Accounts.
9.4 Termination.
The Board shall comply with any requirements of applicable
law pertaining to the winding up of the affairs of the Company
and the final Distributions of its assets. Upon completion of
the winding up, liquidation and Distributions of the assets, the
Company shall be deemed terminated.
Article X
BOOKS, RECORDS, AND ACCOUNTING
10.1 Bank Accounts.
All funds of the Company shall be deposited in a bank
account or accounts opened in the Company's name. The Board
shall determine the institution or institutions at which the
accounts will be opened and maintained, the types of accounts,
and the Persons who will have authority with respect to the
accounts and the funds therein.
10.2 Books and Records.
10.2.1. The Board shall keep or cause to be kept
separate, complete and accurate books and records of the Company
and supporting documentation of the transactions with respect to
the conduct of the Company's business. Such books and records
shall include, but not be limited to, the following:
(a) a current list of the full name and last known business,
residence and mailing address of each past and present Member and
Manager;
(b) copies of the Company's federal, state and local tax
returns, monthly, quarterly and annual financial statements and
reports described in Section 10.4 of this Agreement for the six
(6) most recent fiscal years;
(c) copies of the Certificate of Formation and prior and
present limited liability company agreements and all amendments
thereto; and
(d) minutes of all meetings of Members and Managers.
10.2.2. Each Member may request and shall promptly receive
copies of and/or may inspect and copy during ordinary business
hours and at the principal place of business of the Company any
and all books and records of the Company, including, but not
limited to, those listed in Section 10.2.1 of this Agreement;
provided, however, that the Company is not obligated to disclose
to any Member any confidentiality, secrecy or similar agreements
with Third Parties, or any agreements that, by doing so, would
result in the Company being in breach of that agreement.
10.2.3. The books and records shall be maintained in
accordance with U.S. GAAP.
10.2.4. Each Member shall reimburse the Company for all costs
and expenses incurred by the Company in connection with the
Member's inspection and copying of the Company's books and
records, but only to the extent such copying requires more than
one (1) person day of the Company's time, otherwise such copying
shall be at the expense of the Company.
10.3 Annual Accounting Period.
The annual accounting period of the Company shall be its
taxable year. The Company's taxable year shall be selected by
the Board, subject to the requirements and limitations of the
Code.
10.4 Reports.
10.4.1. Annual Report. The Company shall file an annual
report as required by the Secretary of State.
10.4.2. Reports to Members. The Managers shall cause to be
prepared and sent to both Members the following, all at the
Company's expense:
(a) on or prior to the last business day of the business
month following the end of each fiscal quarter of a Fiscal Year,
the Company shall cause to be delivered to each Member unaudited
balance sheets of the Company as at the end of such quarter and
the related statements of income and statements of cash flow for
the period from the beginning of such Fiscal Year to the end of
such quarter, and for the period from the beginning of such
quarter to the end of such quarter, in each case prepared in
accordance with U.S. GAAP applied on a basis consistent with the
audited financial statements of the Company, subject to changes
resulting from audit and normal year-end adjustments. The
Company shall also cause to be provided to each Member, together
with such financial statements, such supplemental financial
information of the Company as is necessary to permit the parent
of such Member to prepare consolidated group financial statements
under the accounting standards applicable to the parent of the
Member;
(b) within ninety (90) days after the end of each Fiscal
Year, the Company shall cause to be delivered to each Member
audited balance sheets of the Company as at the end of such
Fiscal Year and the related statements of income and statements
of cash flow of the Company for such Fiscal Year, all in
reasonable detail and accompanied by a report thereon of the
Company's independent auditors as to such financial statements
presenting fairly the financial position of the Company as at the
dates indicated, and the results of their operations, cash flows
and changes in their financial position for the period indicated
in conformity with U.S. GAAP applied on a basis consistent with
prior years (except as noted in the notes thereto), and as to
such audit having been made in accordance with U.S. GAAP. The
Company shall also cause to be provided to each Member, together
with such annual financial statements, a statement of the balance
of such Member's Capital Account. Not more than once per
calendar year in connection with the annual audit, and not more
than once in connection with each other audit conducted at the
unanimous request of the Members, each Member and the principal
independent auditor of the parent of such Member (acting at the
expense of such Member) shall have full access to the audit
workpapers of the Company's auditors prepared in connection with
issuing their audit report on the Company's financial statements
and supporting Company documents (but not to any proprietary data
processes of the Company's auditors), and the right to discuss
such matters with the Company's auditors and management of the
Company;
(c) within fifteen (15) days of the end of each business
month, the Company shall cause to be delivered to each Member
unaudited internal management reports setting forth unaudited
financial statements of the Company, including: balance sheet and
profit and loss statement prepared in accordance with U.S. GAAP;
(d) within five (5) business days following the end of each
business month, the Company shall cause to be delivered to each
Member an unaudited statement of aggregate gross sales and
aggregate net sales for such month;
(e) no later than ninety (90) days before the end of each
Fiscal Year, a proposed budget for the next Fiscal Year.
10.5 Tax Matters Member.
Xxxxxxxxx, Inc. shall be the Company's tax matters partner
("Tax Matters Member"). The Tax Matters Member shall have all
powers and responsibilities of a "tax matters partner" as defined
in Section 6231 of the Code. The Tax Matters Member shall keep
all Members informed of all notices from government taxing
authorities that may come to the attention of the Tax Matters
Member. The Company shall pay and be responsible for all
reasonable Third-Party costs and expenses incurred by the Tax
Matters Member in performing those duties. A Member shall be
responsible for any costs incurred by the Member with respect to
any tax audit or tax-related administrative or judicial
proceeding against any Member, even though it relates to the
Company. The Tax Matters Member shall obtain the approval of all
Members for the filing of each United States federal income tax
return or amended federal income tax return and shall not agree
to any adjustment proposed by the Internal Revenue Service with
respect to the Company, or any tax item of the Company, that may
have an adverse effect on any Member without the approval of all
Members. The Tax Matters Member shall use its best efforts to
keep all Members informed about material developments in any
Internal Revenue Service audit of the Company.
10.6 Tax Elections.
The Board shall have the authority to make all Company
elections permitted under the Code, including, without
limitation, elections of methods of depreciation. The Company
shall make the election under Section 754 of the Code. The
decision to make or not make any other election shall be at the
Board's sole and absolute discretion.
10.7 Title to Company Property.
10.7.1. Except as provided in Section 10.7.2, all real
and personal property acquired by the Company shall be acquired
and held by the Company in its name.
10.7.2. The Board may direct that legal title to all or any
portion of the Company's property be acquired or held in a name
other than the Company's name. Without limiting the foregoing,
the Board may cause title to be acquired and held in its name or
in the names of trustees, nominees, or straw parties for the
Company. It is expressly understood and agreed that the manner
of holding title to the Company's property (or any part thereof)
is solely for the convenience of the Company and all of that
property shall be treated as Company property.
10.7.3. If a Member or an Affiliate of a Member undertakes
significant work with any auditor engaged by the Company, such
Member shall promptly notify the other Member. The other Member
shall have the right to request that the Company's auditor
resign the engagement with the Company. Any auditor engaged by
the Company shall agree in the engagement letter that if such
auditor determines at any time during the engagement that a
conflict of interest exists between the auditor, and the Company
or a Member, the auditor shall notify the Company and the Members
of the conflict of interest. Upon such notification, the Company
or either Member has the right to request that the Company's
auditor resign the engagement with the Company.
Article XI
AMENDMENTS; GENERAL PROVISIONS
11.1 Assurances.
Each Member shall execute all certificates and other
documents and shall do all such filing, recording, publishing,
and other acts as the Board deems appropriate to comply with the
requirements of law for the formation and operation of the
Company and to comply with any laws, rules, and regulations
relating to the acquisition, operation, or holding of the
property of the Company.
11.2 Complete Agreement.
This Agreement constitutes the complete and exclusive
statement of the agreement among the Members. It supersedes all
prior written and oral statements, including any prior
representation, statement, condition, or warranty.
11.3 Applicable Law.
All questions concerning the construction, validity, and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement shall be governed by the
internal law, not the law of conflicts, of the State of Delaware.
11.4 Section Titles.
The headings herein are inserted as a matter of convenience
only and do not define, limit, or describe the scope of this
Agreement or the intent of the provisions hereof.
11.5 Binding Provisions.
This Agreement is binding upon, and inures to the benefit
of, the parties hereto and their respective administrators,
personal and legal representatives, successors, and permitted
assigns.
11.6 Notice.
All notices, offers and other communications required or
permitted by this Agreement shall be in writing in the English
language, may be given by a party or its legal counsel, and shall
be deemed to have been duly given or made (i) when personally
delivered (provided written confirmation thereof is also
delivered in person or by express courier), or (ii) upon delivery
by Federal Express Mail or similar nationally recognized express
courier service which provides evidence of delivery, or (iii)
upon delivery of a facsimile transmission, provided a copy
thereof is also delivered in person or by express courier:
Notice to Xxxxxxxxx, Inc., Trace Chemicals, Inc., and C&K shall
be sufficient if given to:
Crompton & Xxxxxxx Corporation
Xxx Xxxxxxx Xxxxx-Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn.: Xxxxxxx X. Xxxxxxx, Senior Vice President
and Chief Financial Officer
Facsimile Number: (000) 000-0000
Telephone Number: (000) 000-0000
with a copy to:
Crompton & Xxxxxxx Corporation
Xxx Xxxxxxx Xxxxx-Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn.: Xxxx X. Xxxxxxxx XX, Vice President, General Counsel
and Secretary
Facsimile Number: (000) 000-0000
Telephone Number: (000) 000-0000
If to the Company to:
Xxxxxxxxx LLC
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxx, XX 00000
Attn.: X. Xxxxxxx Xxxxxx, President
Facsimile Number: (000) 000-0000
Telephone Number: (000) 000-0000
In the event any Member gives notice to the Company pursuant
to this Agreement, that Member shall also provide a copy of such
notice to the other Member. Each party shall have the right to
designate other or additional addresses or addressees for the
delivery of notices, by giving notice as provided in this Section
11.6.
11.7 Terms.
Common nouns and pronouns shall be deemed to refer to the
masculine, feminine, neuter, singular, and plural, as the
identity of the Person may in the context require.
11.8 Severability of Provisions.
Each provision of this Agreement shall be considered
severable; and if, for any reason, any provision or provisions
herein are determined to be invalid and contrary to any existing
or future law, such invalidity shall not impair the operation of
or affect those portions of this Agreement that are valid.
11.9 Alternative Dispute Resolution.
11.9.1. Subject to Sections 11.9.2 and 11.9.3, if a
Dispute arises under this Agreement that cannot be resolved
informally by the parties in interest (including any Disputes
between any former Member or the successors, trustees, assigns or
administrators of a Member or former Member on the one hand and
the Company on the other hand), a party to the Dispute shall
invoke the procedures set forth in Exhibit C. All Disputes will
be solely and finally settled by this Section 11.9 and such
procedures.
11.9.2. Notwithstanding anything in Section 11.9.1 to the
contrary:
11.9.2.1. Nothing in Section 11.9.1 shall preclude any party
from seeking a preliminary injunction or other provisional
relief, either prior to, during or after the proceeding provided
for in Section 11.9.1, if in its judgment such action is
necessary to avoid irreparable damage or to preserve the status
quo.
11.9.2.2. The parties shall accept as correct, final, binding
and conclusive the determination by the outside accountants then
employed by the Company as to the calculation of any and all
amounts owed by one party to the other hereunder, and such
determination shall not be subject to the provisions of Section
11.9.1. Disputes as to the proper interpretation of the
provisions of this Agreement that describe how those amounts are
to be calculated, however, shall be subject to the provisions of
Section 11.9.1.
11.9.2.3. Any recommendation, approval or determination by
the Members to remove a Person from office that they are
empowered to make, give or withhold, or take under this Agreement
with or without cause when taken in accordance with the terms and
provisions of this Agreement, shall not be subject to the
provisions for dispute resolution in this Section 11.9.
11.9.3. Waiver of Trial By Jury. THE MEMBERS, FOR THEMSELVES
AND FOR THE COMPANY, EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR
ACTIONS OF THE OTHER PARTIES IN CONNECTION HEREWITH.
11.9.4. Consent to Jurisdiction. The Members, for themselves
and for the Company, each irrevocably consent that any action or
proceeding against it under, arising out of or in any manner
relating to this Agreement shall be brought in Delaware state or
Federal court. The Members and the Company hereby each expressly
and irrevocably assent and submit to the personal jurisdiction of
any such court in any such action or proceeding. The Members and
the Company each further irrevocably consent to the service of
summons, notice, or other process relating to any such action or
proceeding by delivery thereof by hand or by mail in the manner
provided for in Section 11.6 of this Agreement and consent that
it may be served with any process or paper by registered mail or
by personal service within or without the State of Delaware, in
accordance with applicable law. The Members and the Company each
waive any objection, claim or defense which it may have at any
time to the laying of venue of any such action or proceeding in
any such court; irrevocably waive any claim that any such action
or proceeding brought in any such court has been brought in an
inconvenient forum; and further irrevocably waive the right to
object, with respect to any such action or proceeding brought in
any such court, that such court does not have jurisdiction over
such party.
11.9.5. Notwithstanding anything in Section 11.9 to the
contrary, a Deadlock shall not be considered a Dispute and shall
not be resolved in accordance with Section 11.9 or Exhibit C, but
shall be resolved in accordance with the provisions of Section
4.13.
11.10 Counterparts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original and all
of which, when taken together, constitute one and the same
document. The signature of any party to any counterpart shall be
deemed a signature to, and may be appended to, any other
counterpart.
11.11 Estoppel Certificate.
Each Member shall, within ten (10) days after written
request by the Board, deliver to the requesting Person a
certificate stating, to the Member's knowledge, that (a) this
Agreement is in full force and effect; (b) this Agreement has not
been modified except by any instrument or instruments identified
in the certificate; and (c) there is no default hereunder by the
requesting Person, or if there is a default, the nature and
extent thereof.
11.12 Amendment
This Agreement may be amended by an affirmative vote of all
Members; provided, however, that no amendment that materially
reduces the Distributions that may be made to a Member (or
changes the Profit or Loss allocation to an Interest Holder) may
be made without such Member's or such Interest Holder's, as the
case may be, prior consent.
11.13 Consents.
Unless otherwise explicitly provided for herein, any and all
consents, agreements or approvals provided for or permitted by
this Agreement shall be in writing and a signed copy thereof
shall be filed and kept with the books of the Company.
11.14 Legends.
If certificates for any Interest are issued that evidence a
Member's Interest, each such certificate shall bear such legends
as may be required by applicable federal and state laws, or as
may be deemed necessary or appropriate by the Board to reflect
restrictions upon transfer contemplated herein.
11.15 Parties in Interest.
Nothing in this Agreement is intended to confer any rights
or remedies on any Persons other than the Company and the
Members. This Agreement shall not be construed to relieve or
discharge any obligations or liabilities of Third Parties, nor
shall it be construed to give Third Parties any right of
subrogation or action over or against the Members or the Company.
11.16 Counting of Time.
Whenever time is to be counted hereunder, counting will
commence on the day notice is deemed duly given pursuant to
Section 11.6 and continue for consecutive calendar days through
and including the final day of the relevant period provided for
in this Agreement.
11.17 English Language.
This Agreement is made and entered into in the English
language, which language shall be controlling in all respects.
All communications and notices from any party to another shall
likewise be in the English language.
11.18 Exhibits.
The Exhibits to this Agreement are as follows and will be
attached hereto and are incorporated herein by reference.
Exhibit A: Member's Names, Percentage, Capital
Contributions.
Exhibit B: Form Of Certificate for Xxxxxxxxx LLC.
Exhibit C: Alternative Dispute Resolution Procedures.
Exhibit D: Forms of Operative Agreements.
(the next page is the signature page)
IN WITNESS WHEREOF, the parties hereto have executed this Limited
Liability Company Agreement as of the date and year first above
written.
TRACE CHEMICALS, INC.
By:/s/X. Xxxxxxx Xxxxxx
X. Xxxxxxx Xxxxxx
President
XXXXXXXXX, INC.
By:/s/X. Xxxxxxx Xxxxxx
X. Xxxxxxx Xxxxxx
President
(Additional Members' Signature Page Attached)
EXHIBIT A
To
Limited Liability Company Agreement
Of Xxxxxxxxx LLC
[Intentionally Deleted]
EXHIBIT B
To
Limited Liability Company Agreement
Of Xxxxxxxxx LLC
CERTIFICATE FOR MEMBERSHIP INTEREST IN XXXXXXXXX LLC
(FACE OF CERTIFICATE)
THE MEMBERSHIP INTERESTS AND UNITS REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE.
SUCH MEMBERSHIP INTERESTS AND UNITS MAY NOT BE SOLD OR
TRANSFERRED UNLESS SUBSEQUENTLY REGISTERED OR UNLESS AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. THE AGREEMENT (AS DEFINED BELOW)
PROVIDES FOR FURTHER RESTRICTIONS ON TRANSFER OF THE MEMBERSHIP
INTERESTS AND UNITS REPRESENTED HEREBY.
Certificate No. ____
X. Xxxxxxx Xxxxxx. as President of XXXXXXXXX LLC, a Delaware
limited liability company (the "Company"), hereby certifies that
__________ is the holder of _____ Units of, and a ________
percent (__%) Membership Interest in, XXXXXXXXX LLC, as those
terms are defined in the Limited Liability Company Agreement of
XXXXXXXXX LLC, effective as of September 23, 1998, as the same
may be amended and restated from time to time (the "Agreement")
(copies of which are on file at the principal office of the
Company).
This Certificate is not negotiable or transferable except by
operation of law, or as otherwise provided in the Agreement, and
any such transfer will be valid only upon delivery of this
Certificate, together with an assignment in a form sufficient to
convey a Membership Interest pursuant to the Agreement and the
Delaware Limited Liability Company Act, as it may be amended and
in effect from time to time, or any successor statute thereto),
duly executed, to the Managers of the Company.
X. Xxxxxxx Xxxxxx, President XXXXXXXXX LLC
A Delaware Limited Liability Company
Effective as of September 23, 1998
EXHIBIT C
To
Limited Liability Company Agreement
Of Xxxxxxxxx LLC
ALTERNATIVE DISPUTE RESOLUTION PROCEDURES
A. Method of Invoking ADR Procedures
1. These procedures may be invoked by any party by
giving written notice to the others of the dispute and
designating one or more persons (collectively, the "Designee") to
act on behalf of the disputing party regarding the dispute. The
other parties shall be required to respond to the disputing
party's notice within ten (10) business days by designating in
writing its own Designee. A party may choose to represent
itself, or if it appoints a Designee, its officers may
nonetheless attend such meetings.
2. The parties, each acting through its Designee, shall
meet at a mutually acceptable time and place within ten (10)
business days after the non-disputing party designates its
Designee to the others. At that meeting, the parties shall
attempt in good faith to negotiate a resolution of the dispute,
or failing that, to agree on a method for resolving the claim or
dispute.
3. If, within ten (10) business days after the first
meeting or within such longer period of time as the parties may
mutually agree, the parties have not succeeded in negotiating a
resolution of the claim or dispute or agreeing on a dispute
resolution mechanism, they shall submit the dispute to mediation
in accordance with the procedures set forth herein.
4. The parties will jointly appoint a mutually
acceptable mediator to mediate the dispute. If the parties are
unable to agree on a mutually acceptable mediator within five (5)
business days after the conclusion of the negotiations described
in paragraph 3 above, then the parties shall select a neutral
Third Party from American Arbitration Association ("AAA") in New
York, New York, with the assistance of AAA, unless the parties
agree otherwise in finding a mutually acceptable mediator.
5. Each party to the dispute shall bear an equal share
of the fees and costs of the mediator, and any fees and costs of
AAA.
6. The parties agree to participate in good faith in the
mediation and negotiations related thereto for a period of thirty
(30) days from appointment of a mediator by any of the parties or
the AAA.
7. The parties agree that the mediation period may be
extended for an additional thirty (30) days beyond the initial
thirty (30) day period upon agreement of the parties. Either
party may terminate the mediation at any time after the initial
thirty (30) days or when any agreed upon extension has expired.
B. Mediation Procedures
1. The mediator shall be neutral and impartial.
2. The mediator shall control the procedural aspects of
the mediation. The parties will cooperate fully with the
mediator.
(a) The mediator is free to meet and
communicate separately with each party.
(b) The mediator will decide when to hold
joint meetings with the parties and when to hold separate
meetings. There shall be no stenographic record of any meeting.
Formal rules of evidence will not apply.
3. Each party may be represented by more than one
person, including an attorney.
4. The process will be conducted expeditiously.
5. The mediator will not transmit information received
from any party to another party or any third person unless
authorized to do so by the party transmitting the information.
6. The entire process is confidential. The parties and
the mediator will not disclose information regarding the process,
including settlement terms, to third persons, unless the parties
otherwise agree. The process shall be treated as a compromise
negotiation for purposes of the applicable rules of evidence.
Further, the parties will not disclose the existence of a dispute
or information regarding the mediation to third persons
including, without limitation, the media.
7. The parties will refrain from pursuing administrative
and/or judicial remedies during the mediation process, except as
otherwise expressly provided in the agreement which incorporates
these procedures. The parties agree that any and all statutes of
limitation or periods of time for taking action shall be tolled
during the time period that the parties are engaged in mediation.
8. Unless all parties and the mediator otherwise agree
in writing:
(a) The mediator will be disqualified as a
witness, consultant or expert in any pending or future
investigation, action or proceeding relating to the subject
matter of the mediation (including any investigation, action or
proceeding which involves persons not parties to this mediation);
(b) The mediator, at the conclusion of the
mediation, will immediately either destroy and certify
destruction of, or return to the providing party, any and all
documents and information in the mediator's possession, whether
or not the mediation was successful; and
(c) The mediator will not be subpoenaed in any
such investigation, action or preceding and all parties will
oppose any effort to have the mediator subpoenaed.
9. The mediator, if a lawyer, may freely express views
to the parties on the legal issues of the dispute.
10. The mediator shall not be liable for any act or
omission in connection with the mediation.
11. The mediator may withdraw at any time by written
notice to the parties (i) for overriding personal reasons, (ii)
if the mediator believes that a party is not acting in good
faith, or (iii) if the mediator concludes that further mediation
efforts would not be useful.
C. Litigation
If the parties do not resolve the dispute through mediation
within the period provided in Part A above, the parties may
pursue any and/or all applicable legal and/or equitable remedies
available to them.
EXHIBIT D
To
Limited Liability Company Agreement
Of Xxxxxxxxx LLC
FORMS OF OPERATIVE AGREEMENTS
1. Marketing Agreement.
2. Pre-Exercise Agreement.
3. Post-Exercise Agreement.
4. Cross License Agreement by and between the Company
and Agro ST Inc.
5. Cross License Agreement by and between the Agro ST
Inc. and the Partnership.
