Exhibit 10.1 |
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF BUTLER NATIONAL AO, LLC |
THE MEMBERSHIP INTERESTS REFERENCED HEREIN HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR PURSUANT TO THE PROVISIONS OF ANY STATE SECURITIES ACT CERTAIN RESTRICTIONS ON TRANSFERS OF MEMBERSHIP INTERESTS ARE SET FORTH HEREIN |
TABLE OF CONTENTS Page ARTICLE 1 FORMATION AND OFFICES 1 FORMATION AND OFFICES* 1.1 Formation 1 1.2 Principal Office 1 1.3 Registered Office and Registered Agent 1 1.4 Purpose of Company 1 1.5 Date of Dissolution 1 1.6 Delivery of Copies to Members 2 ARTICLE 2 DEFINITIONS 2 DEFINITIONS 2 2.1 Terms Defined Herein 2 ARTICLE 3 CAPITALIZATION OF THE COMPANY 6 CAPITALIZATION OF THE COMPANY 6 3.1 Initial Capital Contributions 6 3.2 Description of Authorized Interests 6 3.3 Additional Authorized Interests 6 3.4 Additional Capital Contributions 6 3.5 Capital Withdrawal Rights, Interest and Priority 7 ARTICLE 4 CASH DISTRIBUTIONS; PROFITS AND LOSSES FOR TAX PURPOSES 7 CASH DISTRIBUTIONS; PROFITS AND LOSSES FOR TAX PURPOSES* 4.1 Cash Distributions Prior to Dissolution 7 4.2 Persons Entitled to Distributions 8 4.3 Allocation of Profits and Losses for Tax Purposes and Special Allocations 8 ARTICLE 5 MEMBERS' MEETINGS 8 MEMBERS' MEETINGS* 5.1 Meetings of Members; Place of Meetings 8 5.2 Quorum; Voting Requirement 9 5.3 Proxies 9 5.4 Action Without Meeting 9 5.5 Notice 9 5.6 Waiver of Notice 10 ARTICLE 6 MANAGEMENT AND CONTROL 10 MANAGEMENT AND CONTROL* 6.1 Powers of the Managers 10 6.2 Limitation on Powers of Managers 10 6.3 Duties of Managers 11 6.4 Voting Agreement With Respect to the Company's Board of Managers. 11 6.5 Compensation 12 6.6 Intentionally Deleted 13 6.7 Meetings of and Voting by Managers 13 6.8 Other Business Ventures 14 6.9 Authority to Execute Documents to be Filed Under the Act 14 6.10 Powers of the Members 14 ARTICLE 7 OFFICERS 14 OFFICERS* 7.1 Officers 14 7.2 Chairman of the Board 15 7.3 Vice Chairman of the Board 15 7.4 The President 15 7.5 Vice Presidents 16 7.6 Secretary and Assistant Secretaries 16 7.7 The Treasurer and Assistant Treasurers 16 7.8 Duties of Officers May be Delegated 17 7.9 Removal 17 7.10 Salaries and Compensation 17 7.11 Delegation of Authority to Hire, Discharge and Designate Duties 17 ARTICLE 8 LIABILITY AND INDEMNIFICATION 18 LIABILITY AND INDEMNIFICATION 18 8.1 Liability of Members and Managers 18 8.2 Indemnification 18 8.3 Expenses 18 8.4 Non-Exclusivity 19 8.5 Insurance 19 8.6 Savings Clause 19 8.7 Confidentiality 19 ARTICLE 9 TRANSFERS OF INTERESTS 20 TRANSFERS OF INTERESTS 20 9.1 General Restrictions 20 9.2 Transfers of Interests 21 9.3 Substitute Members 21 9.4 Effect of Admission as a Substitute Member 22 9.5 Drag Along Rights 22 9.6 Tag Along Rights 22 ARTICLE 10 DISSOLUTION AND TERMINATION 22 DISSOLUTION AND TERMINATION 22 10.1 Events Causing Dissolution 22 10.2 Notices to Secretary of State 23 10.3 Cash Distributions Upon Dissolution 23 10.4 In-Kind 23 10.5 Purchase of a Member's Interest 24 ARTICLE 11 ACCOUNTING AND BANK ACCOUNTS 25 ACCOUNTING AND BANK ACCOUNTS 25 11.1 Fiscal Year and Accounting Method 25 11.2 Books and Records 25 11.3 Books and Financial Reports 26 11.4 Tax Returns and Elections 26 11.5 Bank Accounts 26 ARTICLE 12 MISCELLANEOUS 26 MISCELLANEOUS 26 12.1 Title to Property 26 12.2 Waiver of Default 27 12.3 Amendment 27 12.4 No Third Party Rights 27 12.5 Severability 27 12.6 Nature of Interest in the Company 28 12.7 Offset 28 12.8 Binding Agreement 28 12.9 Headings 28 12.10 Word Meanings 28 12.11 Counterparts 28 12.12 Entire Agreement 28 12.13 Representations 28 12.14 Partition 29 12.15 Arbitration 29 12.16 Non-Disclosure 30 12.17 Governing Law 30 SCHEDULE A-1 - MEMBERS 1 SCHEDULE A-2 - INVESTMENT SCHEDULES 1 SCHEDULE B - TAXES* |
OF BUTLER NATIONAL AO, LLC |
THIS LIMITED LIABILITY COMPANY AGREEMENTis made and entered into as of the 8th day of August, 2008, by and among the persons executing this Agreement on the signature page hereof (hereinafter collectively, together with such other persons who may hereafter become members as provided herein, referred to as the "Members" or individually as a "Member"). |
1.1 Formation Pursuant to the Act, the Members have formed a Kansas limited liability company effective upon the filing of the Articles (hereinafter defined) of the Company with the Secretary of State of Kansas. 1.2 Principal Office The principal office of the Company shall be located at 19920 W. 161st St., Olathe, KS 66062 or at such other place(s) as the Managers (hereinafter defined) may determine from time to time. 1.3 Registered Office and Registered Agent The location of the registered office and the name of the registered agent of the Company in the State of Kansas shall be as stated in the Articles, as determined from time to time by the Board of Managers. 1.4 Purpose of Company The purposes for which the Company is organized shall be to engage in the business of providing services to the State of Kansas in compliance with and subject to its agreements with the State in connection with the State's ownership and operation of the Lottery Gaming Facility at the Boot Hill Casino & Resort in Dodge City, Kansas and development of the 55 to 70 acre tract (the "Facility") and transacting any or all lawful business for which a limited liability company may be organized under the Act. The Company may engage in any other activities related or incidental thereto. 1.5 Date of Dissolution The Company shall have a perpetual existence. 1.6 Delivery of Copies to Members Upon the return by the Secretary of State of Kansas to the Company of any document "Filed" with the Secretary of State of Kansas relating to the Company, neither the Company nor the Person executing such document shall be required to deliver or mail a copy thereof to any Member. |
2.1 Terms Defined Herein As used herein, the following terms shall have the following meanings, unless the context otherwise requires: "Act" means the Kansas Revised Limited Liability Company Act, K.S.A. 17-7662 et seq., as amended from time to time. "Affiliate" of a specified person (the "Specified Person") means any person (a) who directly or indirectly controls, is controlled by, or is under common control with the Specified Person; (b) who owns or controls ten percent (10%) or more of the Specified Person's outstanding voting securities or equity interests; (c) of whom such Specified Person owns or controls ten percent (10%) or more of the outstanding voting securities or equity interests; (d) who is a director, partner, manager, executive officer or trustee of the Specified Person; (e) in whom the Specified Person is a director, partner, manager, executive officer or trustee; or (f) who has any relationship with the Specified Person by blood, marriage or adoption, not more remote than first cousin. "Agreement" means this Limited Liability Company Agreement, as amended from time to time. "Appraisal" means a determination of fair market value of the Interest involved as done by a qualified appraiser who is a member of a "big five" accounting firm or the American Society of Appraisers and who is selected by the involved Members (or if such Members cannot agree, one appraiser chosen by the transferring Member, one appraiser chosen by the purchasing Members collectively and one appraiser chosen jointly by such two appraisers); in determining fair market value, the appraiser(s) (a) shall reflect any negative value of the illiquidity of any non-cash property offered by the third party, if any, and (b) shall reflect any control premium which such interest may represent. "Bankruptcy" or "Event of Bankruptcy" with respect to the Company or a Member thereof, means (a) an adjudication that such Member or Company is bankrupt or insolvent, or the entry of an order for relief under the Federal Bankruptcy Code, (b) its inability to pay its debts as they mature, (c) the making by it of an assignment for the benefit of creditors, (d) the filing by it of a petition in bankruptcy or a petition for relief under any section of the Federal Bankruptcy Code or any other applicable bankruptcy or insolvency statute or any answer admitting or failing to deny the allegations of any such petition, (e) the filing against it of any such petition (unless such petition is dismissed or stayed within 90 days from the date of filing thereof), or (f) the appointment of a trustee, conservator or receiver for all or a substantial part of its assets (unless such appointment is vacated or stayed within 90 days from its effective date). "BNSC" means Butler National Service Corporation. "Board of Managers" or "Board" means the Managers as a group. "Articles or Organization" or "Articles" means the Articles of Organization of the Company filed with the Secretary of State of Kansas, as amended or restated from time to time. "Capital Contribution" means the total amount of cash, other property, services rendered, a promissory note or other obligation to contribute cash or property or perform services. Any reference in this Agreement to the Capital Contribution of a Member shall include the Capital Contribution made by any predecessor holder of the Interest of that Member. "Class A Common Interests" means the Common Interests described inSection 3.2(b). "Class B Common Interests" means the Common Interests described inSection 3.2(c). "Class A Preferred Interests" means the Preferred Interests described inSection 3.2(a). "Common Interests" means the Class A Common Interests and Class B Common Interests described inSections 3.2(b) and 3.2(c). "Company" means BUTLER NATIONAL AO, LLC. "Entity" means any foreign or domestic general partnership, limited partnership, limited liability company, limited liability partnership, corporation, joint venture, trust, business trust, cooperative or association. "Event of Withdrawal" means an event that causes a Person to cease to be a Member as provided in the Act, which events include, but are not limited to, (a) an Event of Bankruptcy with respect to such Person, (b) in the case of a Member who is a natural person (I) his/her death or (II) the entry by a court of competent jurisdiction adjudicating him/her incompetent to manage his/her person or estate, (c) in the case of a Member that is a trust (I) the termination of the trust or (II) a distribution of its entire Interest but not merely the substitution of a new trustee, (d) in the case of a Member that is a general or limited partnership (I) the dissolution and commencement of winding up of the partnership or (II) a distribution of its entire Interest, (e) in the case of a Member that is a corporation (I) the filing of articles of dissolution or their equivalent for the corporation, (II) a distribution of its entire Interest, (f)&n bsp;in the case of a Member that is an estate the distribution by the fiduciary of the estate's entire interest in the Company, or (g) in the case of a Member that is a limited liability company (I) the filing of articles of dissolution or termination or their equivalent for a limited liability company or (II) a distribution of its entire Interest. "Extinguished" with respect to the Preferred Interests means the Capital Contributions with respect to the Preferred Interests have been returned to the holders of the Preferred Interests and all of the Preferred Return has been paid to the holders of the Preferred Interests. "Final Approval" means the final approval by the Kansas Lottery Commission, selection by the Lottery Gaming Facility Review Board and clearing of background checks by the Kansas Racing and Gaming Commission. "Interest" refers to all of a Member's rights and interests in the Company in such Member's capacity as a Member (including both Preferred and Common Interests), all as provided in the Articles, this Agreement and the Act. "Liquidation Proceeds" means all Property at the time of liquidation of the Company and all proceeds thereof. "Majority in Interest" means any group of Members holding an aggregate of more than 50% of the voting Interests held by all Members. "Managers" means the Persons designated or elected from time to time as managers of the Company, acting in their capacity as Managers. "Members" means those Persons executing this Agreement as members of the Company, including any Substitute Members, in each such Person's capacity as a Member of the Company. "Notice" means a writing in the form of a notice, consent, or request, as applicable, containing the information required by this Agreement to be communicated to a party, personally delivered or sent by United States mail, postage prepaid, or sent by pre-paid, overnight delivery or sent by telecopy to such party at the last known address or fax number, as the case may be, of such party as shown on the records of the Company, the date of mailing or sending thereof being deemed the date of receipt thereof. "Percentage Interest" of a Member means, at any particular time, a ratio, expressed as a percentage, which is the ratio that the number of issued Interests of such Member bears to the total number of issued Interests of all Members, which percentages are subject to adjustment as provided herein. "Permitted Transfer" of an Interest shall mean any Transfer by a Member: (a) to an Affiliate of such Member so long as such Member has control of or is controlled by such Affiliate; (b) upon the death of any Member who is a natural person, to such Member's estate or executor, as the case may be, with Notice thereof to the Company and the Members; (c) in the event any Member who is a natural person becomes substantially and not temporarily disabled, to such Member's custodian or guardian upon Notice thereof to the Company and the Members; (d) in connection with a withdrawal pursuant toSection 9.1(a); (e) to the Company pursuant toSection 10.5; or (f) as authorized by Section 3.3. "Person" means any individual or Entity. "Preferred Return" means a 15% annual return (compounded quarterly)on the Preferred Capital Contributions and any currently due but unpaid Preferred Return in respect of the Preferred Interests. "Preferred Interest Holder" means a Person holding Preferred Interests. "Preferred Interests" means the Preferred Interests described in Sections 3.2(a). "Prime Rate" means the annual rate of interest reported from time to time inThe Wall Street Journal as the base rate on corporate loans at large money center commercial banks. "Property" means all properties and assets that the Company or its subsidiary Affiliates may own or otherwise have an interest in from time to time. "Substitute Member" shall have the meaning set forth inSection 9.3. "Super Majority in Interest" means a group of Members holding an aggregate of more than 66% of the voting Interests held by all Members. "Tax Distribution" shall have the meaning set forth inSection 4.1(b)(i). "Transfer" means (a) when used as a verb, to give, sell, exchange, assign, transfer, pledge, hypothecate, bequeath, devise or otherwise dispose of or encumber, and (b) when used as a noun, the nouns corresponding to such verbs, in either case voluntarily or involuntarily, by operation of law or otherwise. |
CAPITALIZATION OF THE COMPANY |
3.1 Initial Capital Contributions Each Member shall make an initial Capital Contribution to the capital of the Company in an amount set forth opposite such Member's name and address on the attachedSchedule A-1. The agreed upon fair market value of any contributed property is also set forth onSchedule A-1. Hereafter, the names and Capital Contributions of the Members shall be reflected in the books and records of the Company. 3.2 Description of Interests The following numbers of Interests have been authorized and have been issued to Members as set forth onSchedule A-1.
3.3 Additional Interests The Company is authorized to issue additional Interests to any Person or Persons and for such consideration as is approved in accordance withSection 6.2. 3.4 Additional Capital Contributions No Member shall be required to make any additional Capital Contribution except as otherwise provided in this Agreement and as follows:
(b) The Preferred Interest Holder and BNSC shall each be required to contribute up to $5,000,000 for use by the Company for expansion or for liquidity purposes as the Board determines in exchange for Class B Common Interests. 3.5 Capital Withdrawal Rights, Interest and Priority
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ARTICLE 4 |
4.1 Cash Distributions Prior to Dissolution
4.2 Persons Entitled to Distributions All distributions of cash to the Members underSection 4.1 hereof shall be made to the Persons shown on the records of the Company to be entitled thereto as of the last day of the fiscal period prior to the time for which such distribution is to be made, unless the transferor and transferee of any Interest otherwise agree in writing to a different distribution and such distribution is consented to in writing by the Managers. 4.3 Allocation of Profits and Losses for Tax Purposes and Special Allocations All Profits and Losses for Tax Purposes of the Company and all special allocations of the Company shall be made in accordance withSchedule B attached hereto. |
5.1 Meetings of Members; Place of Meetings Regular meetings of the Members shall be held on an annual basis or more frequently as determined by a Majority in Interest. All meetings of the Members shall be held at the principal offices of the Company as set forth inSection 1.2 hereof, or at such other place as shall be designated from time to time by the Board of Managers and stated in the Notice of the meeting or in a duly executed waiver of the Notice thereof. Special meetings of the Members may be held for any purpose or purposes, unless otherwise prohibited by law or by the Articles, and may be called by the Board of Managers. Members may participate in a meeting of the Members by means of conference telephone or other similar communication equipment whereby all Members participating in the meeting can hear each other. Participation in a meeting in this manner shall constitute presence in person at the meeting. 5.2 Quorum; Voting Requirement The presence, in person or by proxy, of a Majority in Interest shall constitute a quorum for the transaction of business by the Members. Except as provided inSection 6.4 on the election of Managers, the affirmative vote of a Majority in Interest shall constitute a valid decision of the Members, except where a larger vote is required by the Act, the Articles or this Agreement. Only Class A Common Interests and Class A Preferred Interests shall be voting Interests. 5.3 Proxies At any meeting of the Members, every Member having the right to vote thereat shall be entitled to vote in person or by proxy appointed by an instrument in writing signed by such Member and bearing a date not more than one year prior to such meeting. 5.4 Action Without Meeting Any action required or permitted to be taken at any meeting of Members of the Company may be taken without a meeting, without prior notice and without a vote if a consent in writing setting forth the action so taken is signed by Members having not less than the minimum interests that would be necessary to authorize or take such action at a meeting of all of the Members. Prompt Notice of the taking of any action taken pursuant to thisSection 5.4 by less than the unanimous written consent of the Members shall be given to those Members who have not consented in writing. 5.5 Notice Notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose for which the meeting is called shall be delivered personally or sent by mail or by fax not less than five (5) days nor more than sixty (60) days before the date of the meeting by or at the direction of the Board of Managers or other persons calling the meeting, to each Member entitled to vote at such meeting. 5.6 Waiver of Notice When any Notice is required to be given to any Member hereunder, a waiver thereof in writing signed by the Member, whether before, at, or after the time stated therein, shall be equivalent to the giving of such Notice. |
6.1 Powers of the Managers Except as otherwise provided hereunder, the business and affairs of the Company shall be managed by the Managers. Any decision or act of the Board of Managers within the scope of the Managers' power and authority granted hereunder shall control and shall bind the Company. 6.2 Limitation on Powers of Managers
6.3 Duties of Managers In addition to the rights and duties of the Managers set forth elsewhere in this Agreement and subject to the other provisions of this Agreement, the Managers shall be responsible for and are hereby authorized to: 6.4 Voting Agreement With Respect to the Company's Board of Managers. 6.5 Compensation Except as provided inSection 6.6or elsewhere in this Agreement, no Manager or Member shall be entitled to compensation for any services such Manager or such Member may render to or for the Company;provided,however, that nothing herein contained shall be construed to preclude any Manager or Member from serving the Company in any other capacity (such as an officer, employee, or lender) and receiving regular compensation therefore. Each Manager and, where applicable, Member, shall be entitled to reimbursement from the Company for all reasonable direct out-of-pocket expenses incurred on behalf of the Company. 6.6 Management Consulting Fees After the Unreturned Capital Contribution of each Member reaches zero and until such time as substantially all the assets of the Company have been sold, Members holding Class A Common Interests shall pay eight and one-third percent (8.33%) of distributions received by Class A Common Interest holders to Larry J. Woolf. To the extent Preferred Interest Holder and BNSC shall each be required to contribute up to $5,000,000 or such other amount for use by the Company for expansion or for liquidity purposes as the Board determines in exchange for Class B Common Interests, the requirement for the payment of eight and one-third percent (8.33%) of Class A Common Interest holder distribution to Larry J. Woolf shall be suspended until the Preferred Interest Holder and BNSC have each received a return of their respective contribution pursuant toSection 4.1(b)(iii). 6.7 Meetings of and Voting by Managers 6.8 Other Business Ventures Any Member or Manager may engage in or possess an interest in other business ventures of every nature and description, independently or with others, whether or not similar to or in competition with the business of the Company, and neither the Company nor the Members shall have any right by virtue of this Agreement in or to such other business ventures or to the income or profits derived therefrom. Unless otherwise agreed to, no Manager shall be required to devote all such Manager's time or business efforts to the affairs of the Company, but shall devote so much of such Manager's time and attention to the Company as is reasonably necessary and advisable to manage the affairs of the Company to the best advantage of the Company. 6.9 Authority to Execute Documents to be Filed Under the Act Any Manager shall have the power and authority to execute, on behalf of the Company, the Managers or the Members, any document to be filed with the Secretary of the State of Kansas pursuant to the terms of the Act. 6.10 Powers of the Members No Member, acting solely in such Member's capacity as a Member, shall act as an agent of the Company or have any authority to act for or to bind the Company. |
7.1 Officers
Officers of the Company need not be members of the Board of Managers. Any two (2) or more offices may be held by the same person. 7.2 Chairman of the Board The Chairman shall preside at all meetings of the Members and Managers and shall have such other duties as may be prescribed by the Board. 7.3 Vice Chairman of the Board The Vice Chairman of the Board shall, in the absence of the Chairman, preside at all meetings of the Members and Managers and shall have such other duties as may be prescribed by the Board. 7.4 The President Unless the Board otherwise provides, the president shall be the chief executive officer of the Company with such general executive powers and duties of supervision and management as are usually vested in the office of the chief executive officer of a corporation as provided in the General and Business Corporation Law of Kansas, and he/she shall carry into effect all directions and agreements of the Board. The president may execute all instruments for and in the name of the Company or the Managers; provided, however, that the President may not execute any debt instruments, such as bonds, notes, debentures or mortgages, without the prior approval of the Board of Managers. Unless the Board otherwise provides, the president, or any person designated in writing by him/her, shall have full power and authority on behalf of this Company (a) to attend and to vote or take action at any meeting of the holders of securities of corporations or memberships in limited liability companies in which this Company may hold securities or interests, and at such meetings shall possess and may exercise any and all rights and powers incident to being a holder of such securities or interests, and (b) to execute and deliver waivers of Notice and proxies for and in the name of the Company with respect to any securities or interests held by this Company. The president shall, unless the Board otherwise provides, be ex officio a member of all standing committees. The president shall also possess such other or further duties and authority as may be prescribed elsewhere in this Agreement or from time to time by the Board of Managers. 7.5 Vice Presidents In the absence of the president or in the event of the president's disability or inability or unreasonable refusal to act, any vice president may perform the duties and exercise the powers of the president until the Board otherwise provides. Vice presidents shall perform such other duties and have such other authority as the Board may from time to time prescribe. 7.6 Secretary and Assistant Secretaries The secretary shall attend all sessions of the Board and all meetings of the Members, shall prepare minutes of all proceedings at such meetings and shall preserve them in a minute book of the Company. The secretary shall perform similar duties of the executive and other standing committees when requested by the Board or any such committee. The secretary shall see that all books, records, lists and information, or duplicates, required to be maintained by law are so maintained. The secretary shall have the general duties, powers and responsibilities of a secretary of a corporation as provided in the General and Business Corporation Law of Kansas and shall perform such other duties and have such other responsibility and authority as may be prescribed elsewhere in this Agreement or from time to time by the Board of Managers or the president of the Company, under whose direct supervision the secretary shall be. In the absence of the secretary or in the event of the secretary's disability or inability or refusal to act, any assistant secretary may perform the duties and exercise the powers of the secretary until the Board otherwise provides. Assistant secretaries shall perform such other duties and have such other authority as the Board of Managers may from time to time prescribe. 7.7 The Treasurer and Assistant Treasurers The treasurer shall have responsibility for the safekeeping of the funds and securities of the Company, shall keep or cause to be kept full and accurate accounts of receipts and disbursements in books belonging to the Company and shall keep or cause to be kept all other books of account and accounting records of the Company. The treasurer shall deposit or cause to be deposited all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Board of Managers or by any officer of the Company to whom such authority has been granted by the Board. The treasurer shall disburse, or permit to be disbursed, the funds of the Company as may be ordered, or authorized generally, by the Board, and shall render to the president of the Company and the Managers whenever they may require it, an account of all transactions of treasurer and of those under the treasurer's jurisdiction, and of the financial condition of the Company. The treasurer shall perform such other duties and shall have such other responsibility and authority as may be prescribed elsewhere in this Agreement or from time to time by the Board of Managers. The treasurer shall have the general duties, powers and responsibility of a treasurer of a corporation as provided in the General and Business Corporation Law of Kansas and shall, unless otherwise provided by the Board, be the chief financial and accounting officer of the Company. In the absence of the treasurer or in the event of the treasurer's disability or inability or refusal to act, any assistant treasurer may perform the duties and exercise the powers of the treasurer until the Board otherwise provides. Assistant treasurers shall perform such other duties and have such other authority as the Board of Managers may from time to time prescribe. 7.8 Duties of Officers May be Delegated If any officer of the Company be absent or unable to act, or for any other reason that the Board may deem sufficient, the Board may delegate, for the time being, some or all of the functions, duties, powers and responsibilities of any officer to any other officer, or to any other agent or employee of the Company or other responsible person, provided a majority of the whole Board concurs. 7.9 Removal Any officer or agent elected or appointed by the Board of Managers, and any employee, may be removed or discharged by the Board whenever in its judgment the best interests of the Company would be served thereby, but such removal or discharge shall be without prejudice to the contract rights, if any, of the person so removed or discharged. 7.10 Salaries and Compensation Salaries and compensation of all elected officers of the Company shall be fixed, increased or decreased by the Board of Managers, but this power may be delegated to a committee. Salaries and compensation of all appointed officers, agents and employees of the Company may be fixed, increased or decreased by the Board of Managers. Each officer shall be entitled to reimbursement from the Company for all reasonable and direct out-of-pocket expenses incurred on behalf of the Company. 7.11 Delegation of Authority to Hire, Discharge and Designate Duties The Board from time to time may delegate to the president or other officer or executive employee of the Company, authority to control the day to day operation of the Company, and to hire, discharge and fix and modify the duties, salary or other compensation of employees of the Company under the jurisdiction of such person, and the Board may delegate to such officer or executive employee similar authority with respect to obtaining and retaining for the Company the services of attorneys, accountants and other experts. |
8.1 Liability of Members and Managers
8.2 Indemnification The Managers, any officers of the Company appointed by the Managers, their Affiliates, and their respective stockholders, members, managers, directors, officers, partners and employees (individually and collectively, an "Indemnitee") shall be indemnified and held harmless by the Company from and against any and all losses, claims, damages, liabilities, expenses (including legal fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the Indemnitee may be involved, or threatened to be involved, as a party or otherwise by reason of such Indemnitee's status, which relates to or arises out of the Company, its assets, business or affairs, if in each of the foregoing cases (i) the Indemnitee acted in good faith and in a manner such Indemnitee believed to be in, or not opposed to, the best interests of the Company, and, with respect to any cr iminal proceeding, had no reasonable cause to believe such Indemnitee's conduct was unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence or willful or wanton misconduct. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea ofnolocontendere, or its equivalent, shall not, of itself, create a presumption that the Indemnitee acted in a manner contrary to that specified in (i) or (ii) above. Any indemnification pursuant to thisArticle 8 shall be made only out of the assets of the Company and no Manager or Member shall have any personal liability on account thereof. 8.3 Expenses Expenses (including reasonable legal fees and expenses) incurred by an Indemnitee in defending any claim, demand, action, suit or proceeding described inSection 8.2may, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding, in the discretion of the Board of Managers, upon receipt by the Company of an undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that the Indemnitee is not entitled to be indemnified as authorized in thisArticle 8. 8.4 Non-Exclusivity The indemnification and advancement of expenses set forth in thisArticle 8 shall not be exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any statute, the Act, the Articles, this Agreement, any other agreement, a vote of Members, a policy of insurance or otherwise, and shall not limit in any way any right which the Company may have to make additional indemnifications with respect to the same or different persons or classes of persons, as determined by the Board of Managers. The indemnification and advancement of expenses set forth in thisArticle 8 shall continue as to an Indemnitee who has ceased to be a named Indemnitee and shall inure to the benefit of the heirs, executors, administrators, successors and assigns of such a Person. 8.5 Insurance The Company may purchase and maintain insurance on behalf of the Indemnitees against any liability asserted against them and incurred by them in such capacity, or arising out of their status as Indemnitees, whether or not the Company would have the power to indemnify them against such liability under thisArticle 8. 8.6 Savings Clause If thisArticle 8 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to thisArticle 8 as to costs, charges and expenses (including reasonable attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative to the full extent permitted by any applicable portion of thisArticle 8 that shall not have been invalidated and to the fullest extent permitted by applicable law. 8.7 Confidentiality The Members acknowledge that, from time to time, they may receive information from or regarding the Company in the nature of trade secrets or that otherwise is confidential, the release of which to third parties may be damaging to the Company or Persons with which it does business. Each Member shall hold in strict confidence any information it receives regarding the Company that is identified as being confidential (and if that information is provided in writing, that is so marked) and may not disclose it to any Person other than another Member or a Manager, except for disclosures (i) compelled by law (but the Member must notify the other Members promptly of any request for that information, before disclosing it if practicable); (ii) to advisers or representatives of the Member or Persons to which that Member's Interest may be Transferred as permitted by this Agreement, but only if the recipients have agreed to be bound by the provisions of thisSection 8.7; or (iii) of information tha t Member also has received from a source independent of the Company that the Member reasonably believes obtained that information without breach of any obligation of confidentiality. The Members acknowledge that breach of the provisions of thisSection 8.7 may cause irreparable injury to the Company for which monetary damages are inadequate or difficult to compute, or both. Accordingly, the Members agree that the provisions of thisSection 8.7 may be enforced by specific performance. |
9.1 General Restrictions
9.2 Transfers of Interests Any Transfer of an Interest by a Member to a third party (other than a Permitted Transfer) shall be subject to the provisions of this Agreement. 9.3 Substitute Members No transferee of all or part of a Member's Interest shall become a Substitute Member in place of the transferor unless and until: Upon satisfaction of all the foregoing conditions with respect to a particular transferee, the Board of Managers shall cause the books and records of the Company to reflect the admission of the transferee as a Substitute Member to the extent of the transferred Interest held by the transferee. 9.4 Effect of Admission as a Substitute Member A transferee who has become a Substitute Member has, to the extent of the transferred Interest, all the rights, powers and benefits of and is subject to the restrictions and liabilities of a Member of the same class as the transferor under the Articles, this Agreement and the Act. Upon admission of a transferee as a Substitute Member, the transferor of the Interest so held by the Substitute Member shall cease to be a Member of the Company to the extent of such transferred Interest. 9.5 Drag Along Rights In the event that a Member (the "Initiating Member") owning 60% or more of the Percentage Interests arranges for a bona fide third party to purchase or otherwise acquire 100% of the Interests (or assets) of the Company in accordance with this Agreement, then at the option of the Initiating Member, the Initiating Member may give written notice to the other Members of the terms of the offer and the Members shall agree to transfer and hereby agree to transfer all of their Interest in the Company pursuant to the same terms as the Initiating Member is bound. Such other Members will execute and deliver any documents and agreements reasonably requested by the Initiating Member in connection with such transaction. 9.6 Tag Along Rights In the event an Initiating Member wishes to sell any Interests owned by it (the "Selling Party") to any third party (other than in accordance with a Permitted Transfer) (the "Purchaser"), the Selling Party shall cause a written Notice of the offer by the Purchaser to purchase such Interests (a "Tag Along Notice") to be delivered to each of the other Members, setting forth the price to be paid by the Purchaser, the identity of the Purchaser and the other principal terms and conditions of the Purchaser's offer to purchase such Interests. Each such other Member shall have the right to sell to the Purchaser, as a condition of such sale by the Selling Party. The total purchase price shall be allocated among the Interests sold to the Purchaser in the same manner as if the proceeds were distributed by the Company upon liquidation as of the date of the closing of the sale to the Purchaser. Each Member shall notify the Selling Party of its intention to sell its Interests pursuant to thisSection&nbs p;9.6 as soon as practicable after receipt of the Tag Along Notice, but in no event later than 10 days after receipt thereof. The Selling Party and each other Member intending to sell Interests hereunder shall sell to the Purchaser all, or at the option of the Purchaser, any party of the Interests proposed to be sold by them upon terms and conditions (including price), not more favorable to the Purchaser than those set forth in the Tag Along Notice; provided, however, that any purchase of less than all of such Interests by the Purchaser shall be made from the Selling Party and each other Member intending to sell Interests hereunderpro rata based upon the number of Interests then held by the Selling Party and each other Member. In no event shall the Selling Party receive special consideration or a premium in connection with a sale contemplated by thisSection 9.6. |
10.1 Events Causing Dissolution The Company shall be dissolved upon the first to occur of the following events:
10.2 Notices to Secretary of State Following the dissolution and the completion of the winding up of the Company, the Company shall file a Certificate of Cancellation with the Secretary of State of Kansas which cancels the Articles of Formation. 10.3 Cash Distributions Upon Dissolution Upon the dissolution of the Company as a result of the occurrence of any of the events set forth inSection 10.1, the Board of Managers shall proceed to wind up the affairs of and liquidate the Company and the Liquidation Proceeds shall be applied and distributed in the following order of priority: (a) First, to the payment of debts and liabilities of the Company in the order of priority as provided by law (including any loans or advances that may have been made by any of the Members to the Company) and the expenses of liquidation. (b) Second, to the establishment of any reserve which the Managers may deem reasonably necessary for any contingent, conditional or unasserted claims or obligations of the Company. Such reserve may be paid over by the Board of Managers to an escrow agent to be held for disbursement in payment of any of the aforementioned liabilities and, at the expiration of such period as shall be deemed advisable by the Board of Managers, for distribution of the balance in the manner provided in thisArticle 10. (c) Third, to the Members holding Preferred Interests,prorata to and to the extent of the sum of their unpaid Preferred Return and their Unreturned Capital Contributions in respect of their Preferred Interests. (d) Fourth, to the holders of the Class B Common Interestspro rata and in proportion to their Unreturned Capital Contributions with respect to their Class B Common Interests, in an amount equal to their Unreturned Capital Contributions with respect to their Class B Common Interests. (e) Finally, to the Members,pro rata and in proportion to their Percentage Interests. 10.4 In-Kind Notwithstanding the foregoing, in the event the Board of Managers shall determine that an immediate sale of part of or all the Property would cause undue loss to the Members, or the Board of Managers determine that it would be in the best interest of the Members to distribute the Property to the Members in-kind (which distributions do not, as to the in-kind portions, have to be in the same proportions as they would be if cash were distributed, but all such in-kind distributions shall be equalized, to the extent necessary, with cash), then the Board of Managers may either defer liquidation of, and withhold from distribution for a reasonable time, any of the Property except that necessary to satisfy the Company's debts and obligations, or distribute the Property to the Members in-kind. 10.5 Purchase of a Member's Interest (c) The Company shall pay the fees and expenses of the appraiser engaged pursuant to thisSection 10.5 if any, and the cost thereof shall be taken into account by the appraiser in determining the purchase price of the Selling Member's Interest. |
11.1 Fiscal Year and Accounting Method The fiscal year and taxable year of the Company shall be as designated by the Board of Managers in accordance with the Code. The Board of Managers shall also determine the accounting method to be used by the Company. 11.2 Books and Records Each Member (or such Member's designated representative) shall have the right during ordinary business hours and upon reasonable Notice to inspect and copy (at such Member's own expense) for any purpose reasonably related to such Member's interest as a member of the Company:
Each Member (or such Member's designated representative) shall have the right during ordinary business hours and upon reasonable Notice to inspect and copy (at such Member's own expense) the books and records of the Company required to be kept bySection 11.3(b) hereof. 11.3 Books and Financial Reports 11.4 Tax Returns and Elections 11.5 Bank Accounts All funds of the Company shall be deposited in a separate bank, money market or similar account(s) approved by the Board of Managers and in the Company's name. Withdrawals therefrom shall be made only by persons authorized to do so by the Board of Managers. |
12.1 Title to Property Title to the Property shall be held in the name of the Company. No Member shall individually have any ownership interest or rights in the Property except indirectly by virtue of such Member's ownership of an Interest. No Member shall have any right to seek or obtain a partition of any of the assets of the Company, nor shall any Member have the right to any specific assets of the Company upon the liquidation of, or any distribution from, the Company. 12.2 Waiver of Default No consent or waiver, express or implied, by the Company or a Member with respect to any breach or default by the Company or a Member hereunder shall be deemed or construed to be a consent or waiver with respect to any other breach or default by any party of the same provision or any other provision of this Agreement. Failure on the part of the Company or a Member to complain of any act or failure to act of the Company or a Member or to declare such party in default shall not be deemed or constitute a waiver by the Company or the Member of any rights hereunder. 12.3 Amendment
12.4 No Third Party Rights None of the provisions contained in this Agreement shall be for the benefit of or enforceable by any third parties, including creditors of the Company. The parties to this Agreement expressly retain any and all rights to amend this Agreement as herein provided, notwithstanding any interest in this Agreement or in any party to this Agreement held by any other Person. 12.5 Severability In the event any provision of this Agreement is held to be illegal, invalid, unenforceable or not in compliance with the Company's contract with the State of Kansas to manage the operation of the Facility to any extent, such provision shall be disregarded and the legality, validity and enforceability of the remainder of this Agreement shall not be affected thereby and shall remain in full force and effect and shall be enforced to the greatest extent permitted by law. 12.6 Nature of Interest in the Company A Member's Interest shall be personal property for all purposes. 12.7 Offset Whenever the Company is to pay any sum to any Member, any amounts that Member owes the Company may be deducted from that sum before payment. 12.8 Binding Agreement Subject to the restrictions on the disposition of Interests herein contained, the provisions of this Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, personal representatives, successors and permitted assigns. 12.9 Headings The headings of the articles and sections of this Agreement are for convenience only and shall not be considered in construing or interpreting any of the terms or provisions hereof. 12.10 Word Meanings The words such as "herein", "hereinafter", "hereof", and "hereunder" refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires. The singular shall include the plural, and vice versa, unless the context otherwise requires. 12.11 Counterparts This Agreement may be executed in several counterparts, all of which together shall constitute one agreement binding on all parties hereto, notwithstanding that all the parties have not signed the same counterpart. 12.12 Entire Agreement This Agreement contains the entire agreement between the parties and supersedes all prior writings or agreements with respect to the subject matter hereof. 12.13 Representations Each Member does hereby represent and warrant by the signing of a counterpart of this Agreement that the Interest acquired by him/her was acquired for his/her own account, for investment only, and not for the benefit of any other person, and not for resale to any other person or future distribution, and that he/she has relied solely on the advice of his/her personal tax, investment or other advisor(s) in making his/her investment decision. The Managers have not made and hereby make no warranties or representations other than those set forth in this Agreement. 12.14 Partition The Members agree that the Property is not and will not be suitable for partition. Accordingly, each of the Members hereby irrevocably waives any and all right he/she may have to maintain any action for partition of any of the Property. 12.15 Arbitration 12.16 Non-Disclosure Each Member for itself and on behalf of its Affiliates agrees to keep the provisions of this Agreement and all schedules, appendices and exhibits hereto in confidence except pursuant to the requirements of applicable law and shall not publish or otherwise disclose the same at any time without the prior written consent of all the Members. 12.17 Governing Law This Agreement shall be construed according to and governed by the laws of the State of Kansas. |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first written above. THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION |
MEMBERS: BUTLER NATIONAL SERVICE CORPORATION By: /s/ Clark D. Stewart
LARRY J. WOOLF & ASSOCIATES, LLC By: /s/ Larry J. Woolf Name: Larry J. Woolf Title: Manager
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SCHEDULE A-1 - MEMBERS |
Name | Initial Capital | Number and | ||
Butler National Service Corporation | Personal Property valued at $5,000,000 | 30,000,000 Class A Common Interests | ||
Larry J. Woolf & Associates, LLC |
Obligation to fund $5,500,000 plus obligation to fund an additional $14,500,000 cash all as provided on Schedule A-2 hereto |
20,000,000 Class A Preferred Interests* | ||
* If $20,000,000 is not funded by the Class A Preferred Investors on or before December 31, 2009, then the number of Preferred Interests will be reducedpro rata based on the amount actually funded. | ||||
SCHEDULE A-2 - INVESTMENT SCHEDULE
| ||||
Date or Milestone | Investment Amount | |||
Funded on or before August 31, 2008 | $5,500,000 | |||
Balance of $14,500,000 to be funded according to a mutually acceptable budget | $14,500,000 | |||
Total | $20,000,000 |
SCHEDULE B - TAXES |
"Adjusted Capital Account" means the Capital Account balance of a Member increased by such Member's Share of Company Minimum Gain. "Capital Account" means a separate account established by the Company and maintained for each Member in accordance with thisSchedule B. "Code" means the Internal Revenue Code of 1986, as amended. "Member's Share of Company Minimum Gain" means an amount determined (ix) in accordance with rules applicable to partnerships in Treasury Regulation Section 1.704-2(g) with respect to a nonrecourse liability of the Company in which no Member bears the economic risk of loss and (x) in accordance with rules applicable to partnerships in Treasury Regulation Section 1.704-2(i) with respect to a nonrecourse liability of the Company in which any Member bears any portion of the economic risk of loss. "Minimum Gain" means the amount of gain, if any, as set forth in rules applicable to partnerships in Treasury Regulations Section 1.704-2(d) that would be realized by the Company if it disposed of (in a taxable transaction) property subject to a nonrecourse liability of such Company, in full satisfaction of such liability (and for no other consideration). "Profits and Losses For Tax Purposes" means, for accounting and tax purposes, the various items with respect to partnerships set forth in Section 702(a) of the Code and all applicable regulations, or any successor law, and shall include, but not be limited to, items such as capital gain or loss, tax preferences, credits, depreciation, other deductions and depreciation recapture. "Treasury Regulations" means the regulations promulgated by the Treasury Department with respect to the Code, as such regulations are amended from time to time, or corresponding provisions of future regulations. The Company shall maintain for each Member a separate account ("Capital Account") in accordance with the rules applicable to partnerships in Treasury Regulation 1.704-1(b)(2)(iv) or any successor Treasury Regulations which by their terms would be applicable to the Company. No Member shall be entitled to receive or be credited with any interest on the balance of such Member's Capital Account at any time. Except as otherwise provided inSection 4of thisSchedule B, all Profits and Losses for Tax Purposes of the Company shall be allocated among the Members in accordance with thisSection 3. (i) Losses for each year shall be allocated in the following order of priority: (i) First, to the Members,prorata in proportion to the amount by which each Member's Adjusted Capital Account exceeds the sum of said Member's Unreturned Capital Contribution and unpaid Preferred Return, if any, until each Member's Adjusted Capital Account equals the sum of said Member's Unreturned Capital Contribution and unpaid Preferred Return, if any. (ii) Second, to the Members holding Class A Common Interests,prorata in proportion to their positive Adjusted Capital Account balance with respect to their Class A Common Interests, until each Member's Adjusted Capital Account with respect to their Class A Common Interests is reduced to zero. (iii) Third, to the Members holding Class B Common Interests,prorata in proportion to their positive Adjusted Capital Account balance with respect to their Class B Common Interests, until each Member's Adjusted Capital Account with respect to their Class B Common Interests is reduced to zero. (iv) Fourth, to the Preferred Interest Holders,prorata in proportion to their positive Adjusted Capital Account balance with respect to their Preferred Interests until each Preferred Interest Holder's Adjusted Capital Account with respect to their Preferred Interests is reduced to zero. (v) Finally, to the Member or Members who bear the economic risk of loss in accordance with the applicable Treasury regulations. (b) Profits for each year shall be allocated in the following order of priority: (i) First, to the Members with a negative Adjusted Capital Account balance in proportion to their negative Adjusted Capital Account balances until each Member's Adjusted Capital Account is restored to zero. (ii) Second, to the Preferred Interest Holders,prorata in proportion to the sum of their respective Unreturned Capital Contributions and unpaid Preferred Return with respect to their Preferred Interests, until each Preferred Interest Holder's Adjusted Capital Account with respect to their Preferred Interests equals the sum of their respective Unreturned Capital Contributions and unpaid Preferred Return with respect to their Preferred Interests. (iii) Third, to the Members holding Class B Common Interests,prorata in proportion to their respective Unreturned Capital Contributions with respect to their Class B Common Interests, until each Member holding Class B Common Interests' Adjusted Capital Account with respect to their Class B Common Interests equals their respective Unreturned Capital Contributions with respect to their Class B Common Interests. (iv) Fourth, to the Members holding Class A Common Interests,prorata in proportion to their respective Unreturned Capital Contributions with respect to their Class A Common Interests, until each Member holding Class A Common Interests' Adjusted Capital Account with respect to their Class A Common Interests equals their respective Unreturned Capital Contributions with respect to their Class A Common Interests. (v) Finally, to the Members,prorata in accordance with their respective Percentage Interests. With respect to any period in which a transferee of the interest of a Member is first entitled to a share of the Profits And Losses For Tax Purposes, the Company shall, with respect to such Profits And Losses For Tax Purposes, allocate such items among the Persons who were entitled to such items on a basis consistent with the provisions of the Code and the Treasury Regulations. Until otherwise determined by a Majority in Interest, Butler National Service Corporation, is hereby designated as the Company's "Tax Matters Member," which shall have the same meaning as "tax matters partner" under the Code, and in such capacity is hereby authorized and empowered to act for and represent the Company and each of the Members before the Internal Revenue Service and any court with respect to any audit or examination of any Company tax return and before any court and to retain such experts (including, without limitation, outside counsel or accountants) as deemed necessary. No Member with a negative balance in such Member's Capital Account shall have any obligation to the Company or any other Member to restore said negative balance to zero. |