Exhibit 3.12
APPLIED THERMAL TECHNOLOGIES LLC
A DELAWARE LIMITED LIABILITY COMPANY
LIMITED LIABILITY COMPANY AGREEMENT
DATED AS OF February 2, 2000
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS.............................................................................1
1.1 DEFINITIONS.............................................................................1
1.2 CONSTRUCTION............................................................................4
1.3 INCLUDING...............................................................................4
ARTICLE II - ORGANIZATION............................................................................4
2.1 FORMATION...............................................................................5
2.2 NAME....................................................................................5
2.3 REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE; OTHER OFFICES....................5
2.4 PURPOSES................................................................................5
2.5 POWERS OF THE COMPANY...................................................................5
2.6 FOREIGN QUALIFICATION...................................................................7
2.8 NO STATE-LAW PARTNERSHIP................................................................8
ARTICLE III - MEMBERSHIP; CAPITAL CONTRIBUTIONS; ADDITIONAL INTERESTS.................................8
3.1 MEMBERS.................................................................................8
3.2 NO LIABILITY OF MEMBERS.................................................................9
3.3 INITIAL CAPITAL CONTRIBUTIONS...........................................................9
3.4 ISSUANCE OF ADDITIONAL INTERESTS; ADDITIONAL MEMBERS....................................9
3.5 CERTIFICATION OF UNITS.................................................................10
ARTICLE IV - CAPITAL ACCOUNTS.......................................................................11
4.1 ESTABLISHMENT AND DETERMINATION OF CAPITAL ACCOUNTS....................................11
4.2 COMPUTATION OF AMOUNTS.................................................................11
4.3 NEGATIVE CAPITAL ACCOUNTS..............................................................12
4.4 COMPANY CAPITAL........................................................................12
ARTICLE V - DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES.......................................12
5.2 DISTRIBUTIONS..........................................................................12
5.3 ALLOCATION OF PROFITS AND LOSSES.......................................................13
5.4 REGULATORY AND SPECIAL ALLOCATIONS.....................................................13
5.5 TAX DISTRIBUTIONS......................................................................14
5.6 TAX ALLOCATIONS: CODE SECTION 704(C)...................................................15
ARTICLE VI - MANAGEMENT.............................................................................17
6.1 THE MANAGING MEMBER; DELEGATION OF AUTHORITY AND DUTIES................................17
6.2 OFFICERS...............................................................................18
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ARTICLE VII - EXCULPATION AND INDEMNIFICATION........................................................19
7.1 PERFORMANCE OF DUTIES; NO LIABILITY OF MEMBER AND OFFICERS.............................19
7.2 COMPETING ACTIVITIES...................................................................20
7.3 TRANSACTIONS BETWEEN THE COMPANY AND THE MEMBERS.......................................20
7.4 Indemnification........................................................................21
7.5 Power to Indemnify in Actions, Suits or Proceedings
Other Than Those by or in the Right of the Company.....................................21
7.6 Power to Indemnify in Actions, Suits or Proceedings by
or in the Right of the Company.........................................................21
7.7 Authorization of Indemnification.......................................................22
7.8 Good Faith Defined.....................................................................22
7.9 Indemnification by a Court.............................................................22
7.10 Advancement or Reimbursement of Expenses...............................................23
7.11 Nonexclusivity and Survival of Indemnification.........................................23
7.12 Insurance..............................................................................23
7.13 SAVINGS CLAUSE.........................................................................23
ARTICLE VIII - TAXES..................................................................................24
8.1 TAX RETURNS............................................................................24
8.2 TAX MATTERS PARTNER....................................................................24
ARTICLE IX - BOOKS, REPORTS AND COMPANY FUNDS.......................................................24
9.1 MAINTENANCE OF BOOKS...................................................................24
9.2 MEMBER TAX INFORMATION.................................................................24
ARTICLE X - TRANSFERS AND OTHER EVENTS.............................................................25
10.1 ASSIGNMENT BY MEMBERS..................................................................25
10.2 VOID ASSIGNMENT........................................................................25
10.3 SUBSTITUTED MEMBER.....................................................................25
10.4 EFFECT OF ASSIGNMENT...................................................................26
10.5 LEGEND.................................................................................26
10.6 TRANSFER FEES AND EXPENSES.............................................................26
10.7 OTHER LIMITATIONS......................................................................26
10.8 EFFECTIVE DATE.........................................................................26
10.9 EFFECT OF INCAPACITY...................................................................26
ARTICLE XI - DISSOLUTION, LIQUIDATION AND TERMINATION...............................................27
11.1 DISSOLUTION............................................................................27
11.2 LIQUIDATION AND TERMINATION............................................................27
11.3 CANCELLATION OF CERTIFICATE............................................................28
ARTICLE XII - GENERAL/MISCELLANEOUS PROVISIONS.......................................................28
12.1 OFFSET.................................................................................28
12.2 NOTICES................................................................................28
12.3 ENTIRE AGREEMENT.......................................................................28
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12.4 EFFECT OF WAIVER OR CONSENT............................................................28
12.5 AMENDMENT OR MODIFICATION..............................................................29
12.6 BINDING EFFECT.........................................................................29
12.7 GOVERNING LAW..........................................................................29
12.8 FURTHER ASSURANCES.....................................................................29
12.9 WAIVER OF CERTAIN RIGHTS...............................................................29
12.10 NOTICE TO MEMBERS OF PROVISIONS........................................................30
12.11 COUNTERPARTS...........................................................................30
12.12 CONSENT TO JURISDICTION................................................................30
12.13 HEADINGS...............................................................................30
12.14 REMEDIES...............................................................................30
12.15 SEVERABILITY...........................................................................30
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LIMITED LIABILITY COMPANY AGREEMENT
of
APPLIED THERMAL TECHNOLOGIES, LLC
A Delaware Limited Liability Company
THIS LIMITED LIABILITY COMPANY AGREEMENT (the "Agreement") of Applied
Thermal Technologies, LLC (the "Company") is entered into as of the ___day of
February, 2000 by and among Aavid Thermalloy, LLC, a Delaware limited liability
company (the "Member") and the Company.
WHEREAS, pursuant to the Certificate of Formation (the "Certificate"),
the Company was formed;
WHEREAS, pursuant to a contribution agreement, Aavid Thermal Products,
Inc., a New Hampshire corporation contributed the stock of Applied Thermal
Technologies, Inc., a New Hampshire corporation, to the Company in exchange for
Common Units (as defined herein) of the Company; and
WHEREAS, and pursuant to the Plan and Agreement of Merger dated as of
August 23, 1999, Applied Thermal Technologies, Inc., a New Hampshire
corporation was merged into the Company, with the Company surviving; and
WHEREAS, the Common Units held by Aavid Thermal Products, Inc. were
contributed to Aavid Thermalloy, LLC, a Delaware limited liability company; and
WHEREAS, the parties hereto desire to enter into this Limited Liability
Company Agreement to provide for, among other things, the respective rights,
obligations and interests of the parties hereto to each other and certain other
matters.
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein made and intending to be legally bound, the Members hereby agree as
follows:
ARTICLE I - DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, the following terms
have the following meanings:
"Act" means the Delaware Limited Liability Company Act, Title 6,
Sections18-101, et seq., and any successor statute, as amended from time to
time.
"Additional Interests" has the meaning given that term in Section 3.4.
"Affiliate" of, or a Person "Affiliated" with, a specified Person means
a Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Person
specified.
"Agreement" means this Limited Liability Company Agreement, as executed
and as it may be amended, modified, supplemented or restated from time to time,
as the context requires.
"Book Value" means, with respect to any Company property, the Company's
adjusted basis for federal income tax purposes, adjusted from time to time to
reflect the adjustments required or permitted by Treasury Regulation Section
1.704-1(b)(2)(iv)(d)--(g); provided that the Book Value of each asset of the
Company shall be adjusted as of the date hereof pursuant to Treasury Regulation
Section 1.704-1(b)(2)(iv)(f) in a manner determined by the Managing Member such
that the aggregate Book Value of the Company's assets (net of the Company's
liabilities) as of such date is equal to the aggregate initial Capital Account
balances of the members (immediately after the Members' actual or deemed Capital
Contributions pursuant to Section 3.3).
"Capital Account" has the meaning given that term in Section 4.1.
"Capital Contribution" means the aggregate contributions made by a
Member to the Company pursuant to Article III as of the date in question, as
shown opposite such Member's name on Schedule A, as the same may be amended from
time to time.
"Certificate" has the meaning given that term in the Preamble.
"Certificated Interests" has the meaning given that term in Section
10.5.
"Common Unit" means a Unit representing a fractional part of the
Membership Interests of the Members and having the rights and obligations
specified with respect to Common Units in this Agreement.
"Code" means the Internal Revenue Code of 1986 and any successor
statute, as amended from time to time.
"Company" means Applied Thermal Technologies, LLC, from and after its
formation as a Delaware limited liability company pursuant to the Certificate.
"Company Minimum Gain" has the meaning set forth for "Partnership
minimum gain" in Treasury Regulation Section 1.704-2(d).
"Economic Interest" means a Member's or Economic Owner's share of the
Company's net profits, net losses and distributions pursuant to this Agreement
and the Act, but shall not include any right to participate in the management or
affairs of the Company, including the right to vote on, consent to or otherwise
participate in any decision of the Members, or any
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right to receive information concerning the business and affairs of the Company,
in each case to the extent provided for herein or otherwise required by the Act.
"Economic Owner" means any owner of an Economic Interest who is not a
Member. No owner of an Economic Interest which is not a Member shall be deemed a
"member" (as that term is used in the Act) of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Fiscal Period" of the Company means the Fiscal Year or any portion
thereof for which determinations are being made pursuant to this Agreement.
"Fiscal Quarter" of the Company means each calendar quarter ending
March 31, June 30, September 30 and December 31.
"Fiscal Year" of the Company means the calendar year.
"Incapacity" or "Incapacitated" means (a) with respect to a natural
person, the bankruptcy, death, incompetency or insanity of such individual and
(b) with respect to any other Person, the bankruptcy, liquidation, dissolution
or termination of such Person.
"Losses" means items of Company loss and deduction determined according
to Section 4.2.
"Managing Member" has the meaning given to that term in Section 6.1.
"Member" means the initial Members and each Person who is hereafter
admitted as a Member in accordance with the terms of this Agreement and the Act.
The Members shall constitute the "members" (as that term is defined in the Act)
of the Company.
"Member Minimum Gain" has the meaning set forth for "partner
nonrecourse debt minimum gain" in Treasury Regulation Section 1.704-2(i).
"Member Nonrecourse Deductions" has the meaning set forth for "partner
nonrecourse deductions" in Treasury Regulation Section 1.704-2(i).
"Membership Interest" means a Member's interest in the Company,
including such Member's Economic Interest and the right, if any, to participate
in the management of the business and affairs of the Company, including the
right, if any, to vote on, consent to or otherwise participate in any decision
or action of or by the Members and the right to receive information concerning
the business and affairs of the Company, in each case to the extent expressly
provided in this Agreement or otherwise required by the Act.
"Net Losses" means for any Fiscal Period the excess, if any, of Losses
over Profits for such period, disregarding Losses and Profits specifically
allocated pursuant to Section 5.4.
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"Net Profits" means for any Fiscal Period the excess, if any, of
Profits over Losses for such period, disregarding Profits and Losses
specifically allocated pursuant to Section 5.4.
"Officer" means each Person designated as an officer of the Company
pursuant to Section 6.2 for so long as such Person remains an officer pursuant
to the provisions of Section 6.2.
"Person" means a natural person, partnership (whether general or
limited), limited liability company, trust, estate, association, corporation,
custodian, nominee or any other individual or entity in its own or any
representative capacity.
"Profits" means items of Company income and gain determined according
to Section 4.2.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Tax Matters Member" has the meaning given to that term in Section 8.2.
"Taxable Year" means the Company's taxable year ending December 31 (or
part thereof, in the case of the Company's last taxable year), or such other
year as is (i) required by Section 706 of the Code or (ii) determined by the
Managing Member.
"Transfer" has the meaning given that term in Section 10.1.
"Unit" means a Membership Interest of a Member in the Company
representing a fractional part of the Membership Interests of all Members and
shall include the Common Units; provided that any class of Units issued shall
have designations, preferences or special rights set forth in this Agreement and
the Membership Interest represented by such class of Units shall be determined
in accordance with such designations, preferences or special rights.
Other terms defined in this Agreement have the meanings so given them.
1.2 CONSTRUCTION. Whenever the context requires, the gender of all
words used in this Agreement includes the masculine, feminine and neuter and the
singular number includes the plural number and vice versa. All references to
Articles and Sections refer to articles and sections of this Agreement, and all
references to Schedules are to Schedules attached hereto, each of which is made
a part hereof for all purposes.
1.3 INCLUDING. Reference in this Agreement to "including,"
"includes" and "include" shall be deemed to be followed by "without limitation."
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ARTICLE II - ORGANIZATION
2.1 MERGER AND RIGHTS OF MEMBERS. The Company was formed and Aavid
Thermalloy, LLC became a member of the Company in the manner set forth in the
recitals to this Agreement. This Agreement is the Limited Liability Company
Agreement of the Company.
The rights, powers, duties, obligations and liabilities of the Members
shall be determined pursuant to the Act and this Agreement. If there is a
conflict between the provisions of this Agreement and the Act, the provisions of
this Agreement shall control, except if the conflict is with respect to a
provision which would cause the Company not to be taxed for federal income tax
purposes as a partnership or a provision of the Act that cannot be waived by
agreement among the Members, in which case the provisions of the Act shall
control. If there is a conflict between this Agreement and the Certificate, the
provisions of the Certificate shall control.
2.2 NAME. The name of the Company is "Applied Thermal
Technologies, LLC" and all Company business shall be conducted in that name or
in such other names that comply with applicable law as the Managing Member may
select from time to time.
2.3 REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE; OTHER
OFFICES. The registered office of the Company required by the Act to be
maintained in the State of Delaware shall be the office of the initial
registered agent named in the Certificate or such other office (which need not
be a place of business of the Company) as the Managing Member may designate from
time to time in the manner provided by law. The registered agent of the Company
in the State of Delaware shall be the initial registered agent named in the
Certificate or such other Person or Persons as the Managing Member may designate
from time to time in the manner provided by law. The principal office of the
Company shall be at such place as the Managing Member may designate from time to
time, which need not be in the State of Delaware, and the Company shall maintain
records there. The Company may have such other offices as the Managing Member
may designate from time to time.
2.4 PURPOSES. The nature of the business or purposes to be
conducted or promoted by the Company is to engage in any lawful act or activity
for which limited liability companies may be organized under the Act. The
Company may engage in any and all activities necessary, desirable or incidental
to the accomplishment of the foregoing. Notwithstanding anything herein to the
contrary, nothing set forth herein shall be construed as authorizing the Company
to possess any purpose or power, or to do any act or thing, forbidden by law to
a limited liability company organized under the laws of the State of Delaware.
2.5 POWERS OF THE COMPANY.
(a) POWER AND AUTHORITY. Subject to the provisions of this
Agreement, the Company shall have the power and authority to take any
and all actions necessary, appropriate, proper, advisable, convenient
or incidental to or for the furtherance of the purposes set forth in
Section 2.4, including the power:
5
(i) to conduct its business, carry on its operations
and have and exercise the powers granted to a limited
liability company by the Act in any state, territory, district
or possession of the United States, or in any foreign country
that may be necessary, convenient or incidental to the
accomplishment of the purpose of the Company;
(ii) to acquire by purchase, lease, contribution of
property or otherwise, own, hold, operate, maintain, finance,
refinance, improve, lease, sell, convey, mortgage, transfer,
demolish or dispose of any real or personal property that may
be necessary, convenient or incidental to the accomplishment
of the purpose of the Company;
(iii) to enter into, perform and carry out contracts
of any kind, including contracts with any Member or any
Affiliate thereof, or any agent of the Company necessary to,
in connection with, convenient to or incidental to the
accomplishment of the purpose of the Company;
(iv) to purchase, take, receive, subscribe for or
otherwise acquire, own, hold, vote, use, employ, sell,
mortgage, lend, pledge, or otherwise dispose of, and otherwise
use and deal in and with, shares or other interests in or
obligations of domestic or foreign corporations, associations,
general or limited partnerships (including the power to be
admitted as a partner thereof and to exercise the rights and
perform the duties created thereby), trusts, limited liability
companies (including the power to be admitted as a member or
appointed as a manager thereof and to exercise the rights and
perform the duties created thereby) or individuals or direct
or indirect obligations of the United States or of any
government, state, territory, governmental district or
municipality or of any instrumentality of any of them;
(v) to lend money for any proper purpose, to invest
and reinvest its funds and to take and hold real and personal
property for the payment of funds so loaned or invested;
(vi) to sue and be sued, complain and defend, and
participate in administrative or other proceedings, in its
name;
(vii) to appoint employees and agents of the Company
and define their duties and fix their compensation;
(viii) to indemnify any Person in accordance with the
Act and to obtain any and all types of insurance;
(ix) to cease its activities and cancel its
Certificate;
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(x) to negotiate, enter into, renegotiate, extend,
renew, terminate, modify, amend, waive, execute, acknowledge
or take any other action with respect to any lease, contract
or security agreement in respect of any assets of the Company;
(xi) to borrow money and issue evidences of
indebtedness and guarantee indebtedness (whether of the
Company or any of its subsidiaries), and to secure the same by
a mortgage, pledge or other lien on the assets of the Company;
(xii) to pay, collect, compromise, litigate,
arbitrate or otherwise adjust or settle any and all other
claims or demands of or against the Company or to hold such
proceeds against the payment of contingent liabilities; and
(xiii) to make, execute, acknowledge and file any and
all documents or instruments necessary, convenient or
incidental to the accomplishment of the purpose of the
Company.
(b) MANAGING MEMBER. Subject to the provisions of this
Agreement, (i) the Company, and the Managing Member on behalf of the
Company, may enter into and perform any and all documents, agreements
and instruments contemplated hereby, all without any further act, vote
or approval of any Member and (ii) the Managing Member may authorize
any Person (including any Member or Officer) to enter into and perform
any document on behalf of the Company.
(c) MERGER. Subject to the provisions of this Agreement and
the Merger Agreement, the Company may, with approval of the Managing
Member and without the need for any further act, vote or approval of
any Member, merge with, or consolidate into, another limited liability
company (organized under the laws of Delaware or any other state), a
corporation (organized under the laws of Delaware or any other state)
or other business entity (as defined in Section 18-209(a) of the Act),
regardless of whether the Company is the survivor of such merger or
consolidation.
2.6 FOREIGN QUALIFICATION. The Managing Member shall cause the
Company to comply with all requirements necessary to qualify the Company as a
foreign limited liability company in any jurisdiction in which the Company owns
property or transacts business to the extent, in the reasonable judgment of the
Managing Member, such qualification or registration is necessary or advisable
for the protection of the limited liability of the Members or to permit the
Company lawfully to own property or transact business. The Managing Member may
and, at the request of the Managing Member or any officer, each Member shall,
execute, acknowledge, swear to and deliver any or all certificates and other
instruments conforming with this Agreement that are necessary or appropriate to
qualify,
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continue or terminate the Company as a foreign limited liability company in all
such jurisdictions in which the Company may conduct business.
2.8 NO STATE-LAW PARTNERSHIP. The Members intend that the Company
shall not be a partnership (including, without limitation, a limited
partnership) or joint venture, and that no Member, Economic Owner or Officer
shall be a partner or joint venturer of any other Member, Economic Owner or
Officer, for any purposes other than federal and, if applicable, state tax
purposes, and this Agreement shall not be construed to the contrary. The Members
intend that the Company shall be treated as a partnership for federal and, if
applicable, state income tax purposes, and each Member and the Company shall
file all tax returns and shall otherwise take all tax and financial reporting
positions in a manner consistent with such treatment.
ARTICLE III - MEMBERSHIP; CAPITAL CONTRIBUTIONS; ADDITIONAL INTERESTS
3.1 MEMBERS.
(a) NAMES, ETC. Subject to the following sentence, the name,
residence, business or mailing address, Capital Contribution and the
Units of the Members shall be set forth on Schedule A, as such Schedule
shall be amended from time to time in accordance with the terms of this
Agreement. Any reference in this Agreement to Schedule A shall be
deemed to be a reference to Schedule A as amended and in effect from
time to time. Each Person listed on Schedule A, upon (i) his or its
execution of this Agreement or counterpart thereof and (ii) receipt (or
deemed receipt) of such Person's Capital Contribution as set forth on
Schedule A, is hereby admitted to the Company as a Member of the
Company.
(b) CAPITAL CONTRIBUTIONS; LOANS BY MEMBERS. No Member, as
such, shall be required to lend any funds to the Company or to make any
additional contribution of capital to the Company, except as otherwise
required by applicable law or by this Agreement. Any Member may, with
the approval of the Managing Member, make loans to the Company, and any
loan by a Member to the Company shall not be considered to be a Capital
Contribution. Each Member shall be required to make additional Capital
Contributions only at such times and in such amounts as may be approved
by the Members unanimously. The obligations of Members to make
additional Capital Contributions and their liability to the Company and
other Members with respect thereto shall not confer any rights on any
third parties. Unless otherwise determined by the Members unanimously,
all additional Capital Contributions shall be made in proportion to the
number of Common Units held by each of the Members.
(c) REPRESENTATIONS AND WARRANTIES OF MEMBERS. Each Member
hereby represents and warrants to and acknowledges with the Company
that: (i) such Member is acquiring interests in the Company for
investment only and not with a view to, or for resale in connection
with, any distribution to the public or
8
public offering thereof; (ii) the interests in the Company have not
been registered under the securities laws of any jurisdiction and
cannot be disposed of unless they are subsequently registered and/or
qualified under applicable securities laws and the provisions of this
Agreement have been complied with; (iii) the execution, delivery and
performance of this Agreement have been duly authorized by such Member
and do not require such Member to obtain any consent or approval that
has not been obtained and do not contravene or result in a default
under any provision of any law or regulation applicable to such Member
or other governing documents or any agreement or instrument to which
such Member is a party or by which such Member is bound and (iv) this
Agreement is valid, binding and enforceable against such Member in
accordance with its terms.
3.2 NO LIABILITY OF MEMBERS.
(a) NO LIABILITY. Except as otherwise required by applicable
law and as expressly set forth in this Agreement, no Member shall have
any personal liability whatever in such Member's capacity as a Member,
whether to the Company, to any of the other Members, to the creditors
of the Company or to any other third party, for the debts, liabilities,
commitments or any other obligations of the Company or for any losses
of the Company. Each Member shall be liable only to make such Member's
Capital Contribution to the Company and the other payments provided
expressly herein.
(b) RETURN OF DISTRIBUTIONS. In accordance with the Act and
the laws of the State of Delaware, a member of a limited liability
company may, under certain circumstances, be required to return amounts
previously distributed to such Member. It is the intent of the Members
that no distribution to any Member pursuant to Article V hereof shall
be deemed a return of money or other property paid or distributed in
violation of the Act. A Member receiving the payment of any such money
or distribution of any such property shall not be required to return to
any Person any such money or property. However, if any court of
competent jurisdiction holds that, notwithstanding the provisions of
this Agreement, any Member is obligated to make any such payment, such
obligation shall be the obligation of such Member and not of any other
Member.
3.3 INITIAL CAPITAL CONTRIBUTIONS. Each Member has made a Capital
Contribution to the Company in cash, property, assets or evidence of
indebtedness in the amount set forth opposite such Member's name on Schedule A
hereto. Upon receipt of the Capital Contribution set forth opposite such
Member's name on Schedule A, each Member shall be deemed to own the number of
Common Units set forth opposite such Member's name on Schedule A.
3.4 ISSUANCE OF ADDITIONAL INTERESTS; ADDITIONAL MEMBERS.
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(a) ADDITIONAL INTERESTS. Subject to Section 10.7, the
Managing Member shall have the right to cause the Company to issue or
sell to any Person (including Members and Affiliates of Members) any of
the following (which for purposes of this Agreement shall be
"Additional Interests"): (i) additional Membership Interests or other
interests in the Company (including new classes or series thereof
having different rights); (ii) obligations, evidences of indebtedness
or other securities or interests convertible into or exchangeable for
Membership Interests or other interests in the Company; and (iii)
warrants, options or other rights to purchase or otherwise acquire
Membership Interests or other interests in the Company. The Managing
Member shall determine the terms and conditions governing the issuance
of such Additional Interests, including the number and designation of
such Additional Interests, the preference (with respect to
distributions, in liquidation or otherwise) over any other Membership
Interests and any required contributions in connection therewith.
(b) ADDITIONAL MEMBERS AND INTERESTS. In order for a Person to
be admitted as a Member of the Company with respect to an Additional
Interest:
(i) such Person shall have delivered to the Company a
written undertaking to be bound by the terms and conditions of
this Agreement and shall have delivered such documents and
instruments as the Managing Member determines to be necessary
or appropriate in connection with the issuance of such
Additional Interest to such Person or to effect such Person's
admission as a Member; and (ii) the Managing Member or the
Secretary of the Company shall amend Schedule A without the
further vote, act or consent of any other Person to reflect
such new Person as a Member. Upon the amendment of Schedule A,
such Person shall be deemed to have been admitted as a Member
and shall be listed as such on the books and records of the
Company and thereupon shall be issued his or its Membership
Interest, including any Economic Interest that corresponds to
and is part of such Membership Interest. If an Additional
Interest is issued to an existing Member, the Managing Member
or the Secretary of the Company shall amend Schedule A without
the further vote, act or consent of any other Person to
reflect the issuance of such Additional Interest and, upon the
amendment of such Schedule A, such Member shall be issued his
or its Additional Interest, including any Economic Interest
that corresponds to and is part of such Additional Interest.
3.5 CERTIFICATION OF UNITS. The Company shall issue certificates
to the Members representing the Membership Interest held by each Member (the
"Certificated Interests"). The Members agree that the Certificated Interests
shall be deemed to be securities as defined in the Uniform Commercial Code, and
any pledge of or grant of a security interest in any Certificated Interests
shall be subject to the provisions of the Uniform Commercial Code.
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ARTICLE IV - CAPITAL ACCOUNTS
4.1 ESTABLISHMENT AND DETERMINATION OF CAPITAL ACCOUNTS. A capital account
("Capital Account") shall be established for each Member and Economic Owner on
the books of the Company initially reflecting an amount equal to such Member's
or Economic Owner's initial Capital Contribution pursuant to Section 3.3. Each
Member's and Economic Owner's Capital Account shall be (a) increased by any
additional Capital Contributions made by such Member or Economic Owner pursuant
to the terms of this Agreement and such Member's or Economic Owner's share of
items of income and gain allocated to such Member or Economic Owner pursuant to
Article V, (b) decreased by such Member's or Economic Owner's share of items of
loss, deduction and expense allocated to such Member or Economic Owner pursuant
to Article V and any distributions to such Member or Economic Owner of cash or
the fair market value of any other property (net of liabilities assumed by such
Member or Economic Owner and liabilities to which such property is subject)
distributed to such Member or Economic Owner and (c) adjusted as otherwise
required by the Code and the regulations thereunder, including but not limited
to, the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Any references
in this Agreement to the Capital Account of a Member or an Economic Owner shall
be deemed to refer to such Capital Account as the same may be increased or
decreased from time to time as set forth above.
4.2 COMPUTATION OF AMOUNTS. For purposes of computing the amount
of any item of Company income, gain, loss or deduction to be allocated pursuant
to Article IV and to be reflected in the Capital Accounts, the determination,
recognition and classification of any such item shall be the same as its
determination, recognition and classification for federal income tax purposes
(including any method of depreciation, cost recovery or amortization used for
this purpose), provided that:
(a) The computation of all items of income, gain, loss and
deduction shall include tax-exempt income and those items described in
Treasury Regulation Section 1.704-1(b)(2)(iv)(i), without regard to the
fact that such items are not includable in gross income or are not
deductible for federal income tax purposes.
(b) If the Book Value of any Company property is adjusted
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or (f),
the amount of such adjustment shall be taken into account as gain or
loss from the disposition of such property.
(c) Items of income, gain, loss or deduction attributable to
the disposition of Company property having a Book Value that differs
from its
11
adjusted basis for tax purposes shall be computed by reference to the
Book Value of such property.
(d) Items of depreciation, amortization and other cost
recovery deductions with respect to Company property having a Book
Value that differs from its adjusted basis for tax purposes shall be
computed by reference to the property's Book Value in accordance with
Treasury Regulation Section 1.704-1(b)(2)(iv)(g).
(e) To the extent an adjustment to the adjusted tax basis of
any Company asset pursuant to Code Sections 732(d), 734(b) or 743(b) is
required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m),
to be taken into account in determining Capital Accounts, the amount of
such adjustment to the Capital Accounts shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis).
4.3 NEGATIVE CAPITAL ACCOUNTS. No Member or Economic Owner shall
be required to pay to the Company or any other Member or Economic Owner any
deficit or negative balance which may exist from time to time in such Member's
or Economic Owner's Capital Account.
4.4 COMPANY CAPITAL. No Member or Economic Owner shall be paid
interest on any Capital Contribution to the Company or on such Member's or
Economic Owner's Capital Account, and no Member or Economic Owner shall have any
right (a) to demand the return of such Member's or Economic Owner's Capital
Contribution or any other distribution from the Company (whether upon
resignation, withdrawal or otherwise), except upon dissolution of the Company
pursuant to Article XI hereof or (b) to cause a partition of the Company's
assets.
ARTICLE V - DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES
5.1 GENERALLY. Subject to the provisions of Section 18-607 of the
Act and Section 5.5, the Managing Member shall have sole discretion regarding
the amounts and timing of distributions to Members and Economic Owner, in each
case subject to the retention and establishment of reserves of, or payment to
third parties of, such funds as it deems necessary with respect to the
reasonable business needs of the Company which shall include the payment or the
making of provision for the payment when due of the Company's obligations,
including the payment of any management or administrative fees and expenses or
any other obligations.
5.2 DISTRIBUTIONS. Subject to Section 5.5, distributions to be
made on any date shall be made to the holders of Common Units in proportion to
their ownership of Common Units.
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5.3 ALLOCATION OF PROFITS AND LOSSES.
(a) NET PROFITS. For each Fiscal Period of the
Company, after adjusting each Member's Capital Account for all Capital
Contributions and distributions during such Fiscal Period and all
special allocations pursuant to Section 5.4 with respect to such Fiscal
Period, all Net Profits shall be allocated to the Capital Account of
each Member and Economic Owner, pro rata, in proportion to the number
of Common Units held.
(b) NET LOSSES. For each Fiscal Period of the
Company, after adjusting each Member's Capital Account for all Capital
Contributions and distributions during such Fiscal Period and all
special allocations pursuant to Section 5.4 with respect to such Fiscal
Period, all Net Losses shall be allocated to the Capital Account of
each Member and Economic Owner, pro rata in accordance with the number
of Common Units held.
5.4 REGULATORY AND SPECIAL ALLOCATIONS. Notwithstanding the
provisions of Section 5.3:
(a) COMPANY MINIMUM GAIN. If there is a net decrease in
Company Minimum Gain during any Taxable Year, each Member and Economic
Owner shall be specially allocated Profits for such Taxable Year (and,
if necessary, subsequent Taxable Years) in an amount equal to such
Member's and Economic Owner's share of the net decrease in Company
Minimum Gain, determined in accordance with Treasury Regulation Section
1.704-2(g). The items to be so allocated shall be determined in
accordance with Treasury Regulation Sections 1.704-2(f)(6) and
1.704-2(j)(2). This paragraph is intended to comply with the minimum
gain chargeback requirement in Treasury Regulation Section 1.704-2(f)
and shall be interpreted consistently therewith.
(b) NONRECOURSE DEDUCTIONS. Member Nonrecourse Deductions
shall be allocated in the manner required by Treasury Regulation
Section 1.704-2(i). Except as otherwise provided in Treasury Regulation
Section 1.704-2(i)(4), if there is a net decrease in Member Minimum
Gain during any Taxable Year, each Member and Economic Owner that has a
share of such Member Minimum Gain shall be specially allocated Profits
for such Taxable Year (and, if necessary, subsequent Taxable Years) in
an amount equal to that Member's and Economic Owner's share of the net
decrease in Member Minimum Gain. Items to be allocated pursuant to this
paragraph shall be determined in accordance with Treasury Regulation
Sections 1.704-2(i)(4) and 1.704-2(j)(2). This paragraph is intended to
comply with the minimum gain chargeback requirements in Treasury
Regulation Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.
(c) QUALIFIED INCOME OFFSET. If any Member or Economic Owner
unexpectedly receives any adjustments, allocations or distributions
described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5)
or (6), Profits shall be
13
specially allocated to such Member or Economic Owner in an amount and
manner sufficient to eliminate the adjusted capital account deficit
(determined according to Treasury Regulation Section
1.704-1(b)(2)(ii)(d)) created by such adjustments, allocations or
distributions as quickly as possible. This paragraph is intended to
comply with the qualified income offset requirement in Treasury
Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
(d) REGULATORY ALLOCATIONS. The allocations set forth in
paragraphs (a), (b) and (c) above (the "Regulatory Allocations") are
intended to comply with certain requirements of the Treasury
Regulations under Code Section 704. Notwithstanding any other
provisions of this Article V (other than the Regulatory Allocations),
the Regulatory Allocations shall be taken into account in allocating
Profits and Losses among Members and Economic Owners so that, to the
extent possible, the net amount of such allocations of Profits and
Losses and other items and the Regulatory Allocations (including
Regulatory Allocations that, although not yet made, are expected to be
made in the future) to each Member and Economic Owner shall be equal to
the net amount that would have been allocated to such Member or
Economic Owner if the Regulatory Allocations had not occurred.
5.5 TAX DISTRIBUTIONS.
(a) QUARTERLY DISTRIBUTIONS. Notwithstanding Sections 5.1 and 5.2
above, so long as the Managing Member has not determined in good faith that such
distribution would be prohibited or create a default or event of default under
the Act or any financing agreement to which the Company or its Members is
subject, then (i) at least ten business days before each date prescribed by the
Code for calendar year corporations to pay quarterly installments of estimated
tax, the Company shall distribute to the Members and Economic Owners an amount
of cash equal to the excess of (x) the Quarterly Estimated Tax Amount for the
quarter of the Taxable Year with respect to which such distribution is being
made over (y) the amount of Distributions (if any) previously made pursuant to
Section 5.2 during such quarter; (ii) if the aggregate amount of such quarterly
distributions with respect to any Taxable Year is less than the Company's Tax
Amount for such Taxable Year, the Company shall distribute an amount of cash
equal to the balance of such Tax Amount ("Shortfall Distributions"); and (iii)
the Company shall use its best efforts to make such Shortfall Distributions at,
on or before the date prescribed by the Code (without extensions) for calendar
year corporations to file federal income tax returns. Distributions pursuant to
this Section 5.5 shall be made among the Members and Economic Owners in the same
proportion that the Company's taxable income for the Taxable Year is allocated
among the Members and Economic Owners, as determined by the Managing Member.
Distributions pursuant to this Section 5.5 shall be treated as advance
distributions (and shall be offset against future distributions to such Member
or Economic Owner) pursuant to Section 5.2(a), (b) or (c), as appropriate. If
the aggregate amount of such distributions under this Section 5.5 with respect
to any Taxable Year exceeds a Member's or Economic Owner's share
14
of the Company's Tax Amount for such Taxable Year, the Company's obligations to
make future distributions to such Member or Economic Owner pursuant to this
Section 5.5 shall be reduced by the amount of such excess until such excess has
been fully deducted from such distributions.
(b) TAX AMOUNT. The Company's "Tax Amount" for a Taxable Year
shall be the federal, state, and local income taxes which would be
payable by the Company if the Company were taxed for such Taxable Year
at the highest marginal federal, state and local corporate income tax
rate applicable to any Member on the Company's taxable income for the
Taxable Year (computed as if the Company had elected to carry forward
all loss and credit carryovers, taking into account the character of
any loss and credit carry forward as a capital or ordinary loss). The
amounts in respect of tax withholding on payments to or from the
Company for which Members or Economic Owners (or owners directly or
indirectly of such Members or Economic Owners) are credited under
applicable tax law shall be credited against payments of the Tax Amount
to such Members or Economic Owners. The Company's Tax Amount shall be
determined initially by the Managing Member on the basis of figures set
forth on IRS Form 1065 filed by the Company and the similar state or
local forms filed by the Company but shall be subject to subsequent
adjustment pursuant to audit, litigation, settlement, amended return,
or the like.
(c) ESTIMATED TAX AMOUNT. The Company's "Estimated Tax Amount"
for a Taxable Year (or Fiscal Period) shall be the Company's Tax Amount
for such Taxable Year (or Fiscal Period) as estimated from time to time
by the Managing Member. In making such estimate, the Managing Member
shall take into account amounts shown on IRS Form 1065 filed by the
Company and similar state or local forms filed by the Company for the
preceding taxable year and other adjustments as in the reasonable
business judgment of the Managing Member are necessary or appropriate
to reflect the estimated operations of the Company for the Taxable Year
(or Fiscal Period). The Company's "Quarterly Estimated Tax Amount" for
any quarter of a Taxable Year shall be the excess of (x) the product of
(I) 1/4 in the case of the first quarter of the Taxable Year, 1/2 in
the case of the second quarter of the Taxable Year, 3/4 in the case of
the third quarter of the Taxable Year and 1 in the case of the fourth
quarter of the Taxable Year and (II) the Company's Estimated Tax Amount
for such Taxable Year over (y) all prior distributions of Quarterly
Estimated Tax Amounts for such Taxable Year.
5.6 TAX ALLOCATIONS: CODE SECTION 704(C).
(a) ALLOCATIONS. The income, gains, losses, deductions and
expenses of the Company shall be allocated, for federal, state and
local income tax purposes, among the Members and Economic Owners in
accordance with the allocation of such income, gains, losses,
deductions and expenses among the Members and Economic Owners for
computing their Capital Accounts, except that if any such
15
allocation is not permitted by the Code or other applicable law, the
Company's subsequent income, gains, losses, deductions and expenses
shall be allocated among the Members and Economic Owners for tax
purposes to the extent permitted by the Code and other applicable law,
so as to reflect as nearly as possible the allocation set forth herein
in computing their Capital Accounts.
(b) CONTRIBUTED PROPERTY. In accordance with Code Section
704(c) and the Treasury Regulations thereunder, income, gain, loss,
deduction and expense with respect to any property contributed to the
capital of the Company shall, solely for tax purposes, be allocated
among the Members and Economic Owners so as to take account of any
variation between the adjusted basis of such property to the Company
for federal income tax purposes and its fair market value at the time
of contribution under the curative allocation method described in
Treas. Reg. Section 1.704-3(c).
(c) ADJUSTED BOOK VALUE. If the Book Value of any Company
asset is adjusted pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(f) as provided in the definition of Book Value,
subsequent allocations of items of taxable income, gain, loss,
deduction and expense with respect to such asset shall take account of
any variation between the adjusted basis of such asset for federal
income tax purposes and its Book Value in the same manner as under Code
Section 704(c).
(d) TAX CREDITS. Allocations of tax credit, tax credit
recapture, and any items related thereto shall be allocated to the
Members and Economic Owners according to their interests in such items
as determined by the Managing Member taking into account the principles
of Treasury Regulation Section 1.704-1(b)(4)(ii).
(e) TAX ELECTIONS. Any elections or other decisions relating
to such allocations shall be made by the Managing Member in any manner
that reasonably reflects the purpose and intent of this Agreement.
Allocations pursuant to this Section 5.6 are solely for purposes of
federal, state and local taxes and shall not affect, or in any way be
taken into account in computing, any Member's or Economic Owner's
Capital Account or share of profits, losses, other items or
distributions pursuant to any provisions of this Agreement.
[(f) EXCESS NONRECOURSE LIABILITIES. For purposes of
determining the Members and Economic Owners' shares of excess
nonrecourse liabilities under Treasury Regulation Section 1.752-3, the
Members' and Economic Owners' percentage interests in Company profits
shall, if any Preferred Units are outstanding, be equal to their
percentage interests in Net Profits allocable pursuant to Section
5.3(a)(iii).]
16
ARTICLE VI - MANAGEMENT
6.1 THE MANAGING MEMBER; DELEGATION OF AUTHORITY AND DUTIES.
(a) MEMBERS AND MANAGING MEMBER. Except as otherwise required
by the Act, the business and affairs of the Company shall be managed by
or under the direction of a "manager" (as that term is defined in the
Act) who shall be a Member (the "Managing Member"). The Managing Member
initially shall be Aavid Thermalloy, LLC. The Managing Member shall be
selected by the holders of a majority of the Common Units. Except as
otherwise expressly provided for in this Agreement, the Members hereby
consent to the exercise by the Managing Member of all such powers and
rights conferred on them by the Act with respect to the management and
control of the Company. Notwithstanding the foregoing and except as
explicitly set forth in this Agreement, if a vote, consent or approval
of the Members is required by the Act or other applicable law with
respect to any act to be taken by the Company or matter considered by
the Managing Member, the Members agree that they shall be deemed to
have consented to or approved such act or voted on such matter in
accordance with the determination of the Managing Member on such act or
matter. No Member, in his or its capacity as a Member, shall have any
power to act for, sign for or do any act that would bind the Company.
The Managing Member shall devote such time and effort to the affairs of
the Company as he or it may deem appropriate for the oversight of the
management and affairs of the Company.
(b) DELEGATION BY MANAGING MEMBER. The Managing Member shall
have the power and authority to delegate to one or more other Persons
the Managing Member's rights and powers to manage and control the
business and affairs of the Company, including to delegate to agents
and employees of a Member or the Company (including Officers), and to
delegate by a written agreement with, or otherwise to, other Persons.
The Managing Member may authorize any Person (including, without
limitation, any Member or Officer) to enter into and perform under any
document on behalf of the Company.
(c) RESIGNATION. The Managing Member may resign by delivering
his or its written resignation to the Company. Such resignation shall
be effective fourteen (14) business days following receipt of such
resignation by the Company unless some later time is specified in such
resignation.
(d) REMOVAL. The Members with the power to select the Managing
Member may remove any Managing Member at any time.
(e) VACANCY. If a vacancy in the position of Managing Member
should for any reason occur, a replacement Managing Member shall be
appointed by the Members with the power to select the Managing Member.
17
(f) COMPENSATION. The Managing Member shall not be entitled to
compensation from the Company in connection with its activities as
Managing Member; provided that the foregoing shall not prevent the
Managing Member from receiving reimbursement for out-of-pocket expenses
incurred by the Managing Member on behalf of the Company, receiving
distributions as a Member pursuant to this Agreement or otherwise
receiving compensation from the Company for actions unrelated to its
activities as Managing Member.
(g) COMMITTEES. The Managing Member may, from time to time,
designate one or more committees. Any such committee, to the extent
provided in the enabling resolution and until dissolved by the Managing
Member, shall have and may exercise any or all of the authority of the
Managing Member. At every meeting of any such committee, the presence
of a majority of all the representatives thereof shall constitute a
quorum, and the affirmative vote of a majority of the representatives
present shall be necessary for the adoption of any resolution. The
Managing Member may dissolve any committee at any time.
6.2 OFFICERS.
(a) DESIGNATION AND APPOINTMENT. The Managing Member may, from
time to time, employ and retain Persons as may be necessary or
appropriate for the conduct of the Company's business, including
employees, agents and other Persons (any of whom may be a Member) who
may be designated as Officers of the Company, with titles including but
not limited to "chief executive officer," "chairman," "president," vice
president," "treasurer," "secretary," "general manager," "director" and
"chief financial officer," as and to the extent authorized by the
Managing Member. Any number of offices may be held by the same person.
In its discretion, the Managing Member may choose not to fill any
office for any period as it may deem advisable. Officers need not be
residents of the State of Delaware or Members. Any Officers so
designated shall have such authority and perform such duties as the
Managing Member may, from time to time, delegate to them. The Managing
Member may assign titles to particular Officers. Each Officer shall
hold office until his successor shall be duly designated and shall
qualify or until his death or until he shall resign or shall have been
removed in the manner hereinafter provided. The salaries or other
compensation, if any, of the Officers of the Company shall be fixed
from time to time by the Managing Member.
(b) RESIGNATION/REMOVAL. Any Officer may resign as such at any
time. Such resignation shall be made in writing and shall take effect
at the time specified therein, or if no time is specified, at the time
of its receipt by the Company. The acceptance of a resignation shall
not be necessary to make it effective, unless expressly so provided in
the resignation. Any Officer may be removed as such, either with or
without cause at any time by the Managing
18
Member. Designation of an Officer shall not of itself create any
contractual or employment rights.
(c) DUTIES OF OFFICERS GENERALLY. The Officers, in the
performance of their duties as such, shall owe to the Company duties of
loyalty and due care of the type owed by the officers of a corporation
to such corporation and its stockholders under the laws of the State of
Delaware.
(d) CHIEF EXECUTIVE OFFICER. Subject to the powers of the
Managing Member, the Chief Executive Officer of the Company shall be in
general and active charge of the entire business and affairs of the
Company, and shall be its Chief Executive Officer and chief policy
making Officer.
(e) CHIEF FINANCIAL OFFICER. The chief financial officer, if
any, shall keep and maintain, or cause to be kept and maintained,
adequate and correct books and records of accounts of the properties
and business transactions of the Company, including accounts of its
assets, liabilities, receipts, disbursements, gains, losses, capital
and Units. The chief financial officer shall have the custody of the
funds and securities of the Company, and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
Company, and shall deposit 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 Managing Member. The chief financial officer shall
have such other powers and perform such other duties as may from time
to time be prescribed by the chief executive officer or the Managing
Member.
ARTICLE VII - EXCULPATION AND INDEMNIFICATION
7.1 PERFORMANCE OF DUTIES; NO LIABILITY OF MEMBER AND OFFICERS. No
Member (including the Managing Member) shall have any duty to the Company or any
Member of the Company except as expressly set forth herein or in other written
agreements. No Member (including the Managing Member) or Officer of the Company
shall be liable to the Company or to any Member for any loss or damage sustained
by the Company or to any Member, unless the loss or damage shall have been the
result of gross negligence, fraud or intentional misconduct by the Member
(including the Managing Member) or Officer in question or breach of such
Person's duties pursuant to this Agreement. In performing such Person's duties,
each such Person shall be entitled to rely in good faith on the provisions of
this Agreement and on information, opinions, reports or statements (including
financial statements and information, opinions, reports or statements as to the
value or amount of the assets, liabilities, profits or losses of the Company or
any facts pertinent to the existence and amount of assets from which
distributions to Members might properly be paid) of the following other Persons
or groups: one or more Officers or employees of the Company; any attorney,
independent accountant, appraiser or other expert or professional employed or
engaged by or on behalf of the Company, the Managing Member or any committee of
the Managing Member; or any other Person who has been selected with reasonable
care by or on
19
behalf of the Company, the Managing Member or any committee of the Managing
Member in each case as to matters which such relying Person reasonably believes
to be within such other Person's competence. The preceding sentence shall in no
way limit any Person's right to rely on information to the extent provided in
Section 18-406 of the Act. No Member (including the Managing Member) or Officer
of the Company shall be personally liable under any judgment of a court, or in
any other manner, for any debt, obligation or liability of the Company, whether
that liability or obligation arises in contract, tort or otherwise, solely by
reason of being a Member or Officer of the Company or any combination of the
foregoing.
7.2 COMPETING ACTIVITIES. Except as may otherwise be agreed in
writing and subject to the duties and obligations of the Managing Member and
Officers to the Company:
(a) the Members and the officers, directors, security holders,
partners, members, managers, agents, employees and Affiliates of each
of them, may engage or invest in, own and/or manage, independently or
with others, any business activity of any type or description,
including without limitation those that might be in direct or indirect
competition with the Company;
(b) neither the Company nor any other Member shall have any
right in or to any of such other ventures or activities or to the
income or proceeds derived therefrom;
(c) neither the Members nor the officers, directors, security
holders, partners, members, managers, agents, employees or Affiliates
of any of them shall be obligated to present any investment opportunity
or prospective economic advantage to the Company, even if the
opportunity is of the character that, if presented to the Company,
could be taken advantage of by the Company; and
(d) the Members and the officers, directors, security holders,
partners, members, managers, agents, employees and Affiliates of each
of them shall have the right to hold any investment opportunity or
prospective economic advantage for their own account or to recommend
such opportunity to Persons other than the Company.
7.3 TRANSACTIONS BETWEEN THE COMPANY AND THE MEMBERS.
Notwithstanding that it may constitute a conflict of interest, the Members or
their Affiliates may engage in any transaction (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service or the establishment of any salary, other compensation or other terms of
employment) with the Company so long as such transaction is approved by the
Managing Member, or if such transaction is with the Managing Member or one of
its Affiliates, the written consent of all the disinterested Members. No Member
shall be deemed by reason of Section 6.1 to have approved any such transaction.
20
7.4 INDEMNIFICATION. Each person who at any time shall be, or shall
have been, a Member, officer, employee or agent of the Company, or any person
who, while a Member, officer, employee or agent of the Company, is or was
serving at the request of the Company as a director, member, manager, officer,
partner, venturer, proprietor, trustee, employee, agent or similar functionary
of another Person, shall be entitled to indemnification as and to the fullest
extent permitted by the provisions of Delaware Law or any successor statutory
provisions, as from time to time amended. The foregoing right of indemnification
shall not be deemed exclusive of any other rights to which one to be indemnified
may be entitled as a matter of law or under this Agreement, any other agreement,
by vote of the Members or otherwise, both as to any action in an official
capacity and as to action in another capacity while holding such office. Any
repeal of this Section 7.4 shall be prospective only, and shall not adversely
affect any right of indemnification existing at the time of such repeal or
modification or thereafter arising as a result of acts or omissions prior to the
time of such repeal or modification.
7.5 POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS OTHER THAN
THOSE BY OR IN THE RIGHT OF THE COMPANY. Without limiting the provisions of
Section 7.4, subject the Section 7.7, the Company shall indemnify, to the full
extent not prohibited by law, any person who was or is a party or is threatened
to be made a party (including a witness) to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Company) by reason
of the fact that he is or was a Member, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
member, manager, officer, employee or agent of another entity, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
7.6 POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS BY OR IN THE
RIGHT OF THE COMPANY. Without limiting the provisions of Section 7.4, subject to
Section 7.7, the Company shall, to the full extent not prohibited by law,
indemnify any person who was or is a party or is threatened to be made a party
(including a witness) to any threatened, pending or completed action, suit or
proceeding by or in the right of the Company to procure a judgment in its favor
by reason of the fact that he is or was a Member, officer, employee or agent of
the Company, or is or was serving at the request of the Company as a director,
member, manager, officer, employee or agent of another entity against expenses
(including attorneys' fees)
21
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company; except that no indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable to
the Company unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the court
shall deem proper.
7.7 AUTHORIZATION OF INDEMNIFICATION. Any indemnification under this
Article VII (unless ordered by a court) shall be made by the Company as
permitted by Delaware Law or as authorized in the specific case upon a
determination that indemnification is proper in the circumstances because it is
permitted under Delaware Law or the applicable standards of conduct set forth in
Section 7.5 or Section 7.6, as the case may be, have been met. Such
determination shall be made, in the case of any Member or officer, employee or
agent, (i) by a vote of the disinterested Members or (ii) if a majority of
Members are not disinterested, by independent legal counsel in a written
opinion. To the extent, however, that the Member, officer, employee or agent of
the Company has been successful on the merits or otherwise in defense of any
action, suit or proceeding described above, or in the defense of any claim,
issue or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith, without the necessity of authorization in the specific case.
7.8 GOOD FAITH DEFINED. For purposes of any determination under this
Article VII, a person shall be deemed to have acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company, or, with respect to any criminal action or proceeding, to have had
no reasonable cause to believe his conduct was unlawful, if his action is based
upon the records of the Company and upon such information, opinions, reports or
statements presented to the Company by any of the other Members, officers,
employees or committees of the Company or by any other person as to matters the
person seeking indemnification reasonably believes are within such other
person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Company, including information, opinions,
reports or statements as to the value and amount of assets, liabilities, profits
or losses of the Company or any other facts pertinent to the existence and
amount of assets from which distributions to the Members might properly be paid.
The provisions of this Section 7.8 shall not be deemed to be exclusive or to
limit in any way the circumstances in which a person may be deemed to have met
the applicable standards of conduct set forth in the provisions of Delaware Law,
or in Section 7.5 or Section 7.6, as the case may be.
7.9 INDEMNIFICATION BY A COURT. Notwithstanding any contrary
determination in the specific case under Section 8.4, and notwithstanding the
absence of any determination thereunder, any Member, officer, employee or agent
may apply to
22
any court of competent jurisdiction for indemnification to the extent otherwise
permissible under Delaware Law or this Article VII. The basis of such
indemnification by a court shall be a determination by such court that
indemnification of the Member, officer, employee or agent is proper in the
circumstances because it is permitted under the provisions of the Delaware Law,
or the Member, officer, employee or agent has met the applicable standards of
conduct set forth in Section 7.5 or Section 7.6, as the case may be. Notice of
any application for indemnification pursuant to this Section 7.9 shall be given
to the Company promptly upon the filing of such application.
7.10 ADVANCEMENT OR REIMBURSEMENT OF EXPENSES. The Company shall pay in
advance or reimburse expenses actually or reasonably incurred or anticipated by
such Member or officer in connection with his appearance as a witness or other
participation in a proceeding whether or not such Member or officer is a named
defendant or a respondent in the proceeding. To obtain indemnification or an
expense advance, the person requesting indemnification shall submit to the
Company a written request with such information as is reasonably available to
him. If the expense advance is to be paid prior to final disposition of the
proceeding, there shall be included a written statement of such person's good
faith belief that he has met the necessary standard of conduct under the
Delaware Law and an undertaking to repay any amount paid if it is ultimately
determined that those conduct requirements were not met.
7.11 NONEXCLUSIVITY AND SURVIVAL OF INDEMNIFICATION. The
indemnification and advancement of expenses provided by, or granted pursuant to,
the other subsections of this Article VII shall not be deemed exclusive of any
other rights to which one seeking indemnification and advancement of expenses
may be entitled under this Agreement, any other agreement, by vote of Members or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, it being the policy of the Company
that indemnification of any person specified in this Article VII shall be made
to the fullest extent permitted by law. The provisions of this Article VII shall
not be deemed to preclude the indemnification of any person who is not specified
in this Article VII but whom the Company has the power or obligation to
indemnify under the provisions of the Delaware Act or otherwise.
7.12 INSURANCE. The Company may purchase and maintain insurance on
behalf of any person who is or was a Member, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a member,
manager, director, officer, employee or agent of an entity against any liability
asserted against him and incurred by him in any such capacity or arising out of
his status as such, whether or not the Company would have the power or the
obligation to indemnify him against such liability under the provisions of this
Article VII.
7.13 SAVINGS CLAUSE. If this Article VII 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 Person indemnified
pursuant to this Article VII as to costs, charges and expenses (including
reasonable attorneys' fees), judgments, fines and
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amounts paid in settlement with respect to any such proceeding, appeal, inquiry
or investigation to the full extent permitted by any applicable portion of this
Article VII that shall not have been invalidated and to the fullest extent
permitted by applicable law.
ARTICLE VIII - TAXES
8.1 TAX RETURNS. The Company shall cause to be prepared and filed all
necessary federal, state and local income tax returns for the Company, and shall
make any elections the Managing Member may deem appropriate and in the best
interests of the Members. Each Member shall furnish to the Company all pertinent
information in its possession relating to Company operations that is necessary
to enable the Company's income tax returns to be prepared and filed.
8.2 TAX MATTERS PARTNER. The Managing Member shall be the "tax matters
partner" of the Company pursuant to section 6231(a)(7) of the Code (the "Tax
Matters Member"). The Tax Matters Member shall take such action as may be
necessary to cause each other Member to become a "notice partner" within the
meaning of section 6223 of the Code. The Tax Matters Member is authorized to
represent the Company before the Internal Revenue Service and any other
governmental agency with jurisdiction, and to sign such consents and to enter
into settlements and other agreements with such agencies as the Managing Member
deems necessary or advisable.
ARTICLE IX - BOOKS, REPORTS AND COMPANY FUNDS
9.1 MAINTENANCE OF BOOKS. The Company shall keep books and records of
accounts in accordance with U.S. generally accepted accounting principles and
shall keep minutes of the proceedings of its Members and each committee. The
Fiscal Year shall be the accounting year of the Company for financial reporting
purposes.
9.2 MEMBER TAX INFORMATION. Within ninety (90) days after the end of
each Taxable Year, the Managing Member or Officers will cause to be delivered to
each Person who was a Member or Economic Owner at any time during such Taxable
Year a Form K-1 and such other information, if any, with respect to the Company
as may be necessary for the preparation of such Member's or Economic Owner's
federal, state and local income tax returns, including a statement showing such
Member's or Economic Owner's share of income, gain or loss, expense and credits
for such Taxable Year for federal income tax purposes. Any deficiency for taxes
imposed on any Member or Economic Owner (including penalties, additions to tax
or interest imposed with respect to such taxes) shall be paid by such Member or
Economic Owner, and if paid by the Company, shall be recoverable from such
Member or Economic Owner pursuant to Section 12.10; provided, however, that this
sentence shall not be construed to prevent the operation of Sections 5.5 or 5.2.
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ARTICLE X - TRANSFERS AND OTHER EVENTS
10.1 ASSIGNMENT BY MEMBERS. Each Member may sell, assign, transfer,
exchange, mortgage, pledge, grant a security interest in, or otherwise dispose
of or encumber (including by operation of law) all or any part of such Member's
Membership Interest (including any Units or other Economic Interest) (each such
event, a "Transfer"), provided that no such Transfer will be effective unless
and until the transferee shall have executed and delivered to the Company an
agreement in form and substance satisfactory to the Managing Member to be bound
by the provisions of this Agreement applicable to the Membership Interest
Transferred, and no such assignment shall relieve the assignor of its
obligations hereunder unless such assignee is admitted as a substitute Member
pursuant to Section 10.3.
10.2 VOID ASSIGNMENT. Any Transfer by any Member in contravention of
this Agreement shall be void and ineffectual and shall not bind or be recognized
by the Company or any other party. In the event of any Transfer in contravention
of this Agreement, the purported transferee shall have no right to any profits,
losses or distributions of the Company or any other rights of a Member.
10.3 SUBSTITUTED MEMBER.
(a) CONDITIONS. An assignee of any Units or other interests in
the Company (or any portion thereof), in accordance with the provisions
of this Article X, shall become a substituted Member entitled to all
the rights of a Member with respect to such assigned interest if and
only if (i) the assignor gives the assignee such right, (ii) the
Managing Member has granted its prior written consent to such
assignment and substitution, which consent may be withheld in the sole
discretion of the Managing Member; (iii) the Managing Member has taken
such action, if any, as may be necessary or required to maintain the
status of the Company as a partnership for federal income tax purposes;
and (iv) the assignee has agreed in writing to be bound by the
provisions of this Agreement.
(b) RECORD HOLDER. The Company shall be entitled to treat the
record owner of any Units or other interest in the Company as the
absolute owner thereof and shall incur no liability for distributions
of cash or other property made in good faith to such owner until such
time as a written assignment of such Units or other interest in the
Company, which assignment is consented to by the Managing Member (which
consent may be withheld in the Managing Member's sole discretion), is
permitted pursuant to the terms and conditions of Section 10.1 and this
Section 10.3, has been received and accepted by the Managing Member and
has been recorded on the books of the Company.
(c) SCHEDULE A. Upon the admission of a substituted Member,
Schedule A attached hereto shall be amended to reflect the name,
address and Units and other interests in the Company of such
substituted Member and to eliminate the
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name and address of and other information relating to the assigning
Member with regard to the assigned Units and other interests in the
Company.
10.4 EFFECT OF ASSIGNMENT. Following an assignment of an interest that
is permitted under this Article X, the transferee of such interest shall be
treated as having made all of the Capital Contributions in respect of, and
received all of the distributions received in respect of, such interest, shall
succeed to the Capital Account associated with such interest and shall receive
allocations and distributions under Articles V and XI in respect of such
interest as if such transferee were a Member.
10.5 LEGEND. The Certificated Interests will bear the following legend:
"THE INTEREST REPRESENTED BY THIS CERTIFICATE WAS ORIGINALLY ISSUED AS
OF February 2, 2000, HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN
EXEMPTION FROM REGISTRATION THEREUNDER. THE TRANSFER OF THE INTEREST
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED
IN A LIMITED LIABILITY COMPANY AGREEMENT, AS AMENDED, GOVERNING THE
ISSUER (THE "COMPANY"), BY AND AMONG CERTAIN INVESTORS. A COPY OF SUCH
CONDITIONS SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON
WRITTEN REQUEST AND WITHOUT CHARGE."
10.6 TRANSFER FEES AND EXPENSES. The transferor and transferee of any
Membership Interest shall be jointly and severally obligated to reimburse the
Company for all reasonable expenses (including attorneys' fees and expenses) of
any Transfer or proposed Transfer of such interest, whether or not consummated.
10.7 OTHER LIMITATIONS. In order to permit the Company to qualify for
the benefit of a "safe harbor" under Code Section 7704, notwithstanding anything
to the contrary in this Agreement, no Transfer shall be permitted or recognized
(within the meaning of Treasury Regulation Section 1.7704-1(d)) by the Company
or the Members if and to the extent that such Transfer would cause the Company
to have more than 100 partners (within the meaning of Treasury Regulation
Section 1.7704-1(h), including the look-through rule in Treasury Regulation
Section 1.7704-1(h)(3)).
10.8 EFFECTIVE DATE. Any Transfer and any related admission of a Person
as a Member in compliance with this Article X shall be deemed effective on such
date that the transferee or successor in interest complies with the requirements
of this Agreement.
10.9 EFFECT OF INCAPACITY. Except as otherwise provided herein, the
Incapacity of a Member shall not dissolve or terminate the Company. In the event
of such Incapacity, the executor, administrator, guardian, trustee or other
personal representative of the
26
Incapacitated Member shall be deemed to be the assignee of such Member's
Economic Interest and may, subject to the terms and conditions set forth in
Section 10.3, become a substituted Member.
ARTICLE XI - DISSOLUTION, LIQUIDATION AND TERMINATION
11.1 DISSOLUTION. The Company shall be dissolved and its affairs shall
be wound up on the unanimous vote of the Members or as otherwise provided under
the Delaware Act.
11.2 LIQUIDATION AND TERMINATION. On dissolution of the Company, the
Managing Member or such other or additional Member or Members as designated by
the Managing Member shall act as liquidator(s). The liquidator(s) shall proceed
diligently to wind up the affairs of the Company and make final distributions as
provided herein and in the Act. The costs of liquidation shall be borne as a
Company expense. Until final distribution, the liquidator(s) shall continue to
operate the Company properties with all of the power and authority of Managing
Member and Members, subject to the power of the Managing Member to remove and
replace such liquidator(s). The steps to be accomplished by the liquidator(s)
are as follows:
(a) As promptly as possible after dissolution and again after
final liquidation, the liquidator(s) shall cause a proper accounting to
be made by a recognized firm of certified public accountants of the
Company's assets, liabilities and operations through the last day of
the calendar month in which the dissolution occurs or the final
liquidation is completed, as applicable.
(b) The liquidator(s) shall pay, satisfy or discharge from
Company funds all of the debts, liabilities and obligations of the
Company (including, without limitation, all expenses incurred in
liquidation) or otherwise make adequate provision for payment and
discharge thereof (including, without limitation, the establishment of
a cash fund for contingent liabilities in such amount and for such term
as the liquidator may reasonably determine).
(c) After satisfying (whether by payment or reasonable
provision for payment) the debts and liabilities of the Company to the
extent required by law, including without limitation debts and
liabilities to Members who are creditors of the Company to the extent
permitted by law, the remaining assets shall be distributed to the
Members in accordance with their positive Capital Account balances.
Such liquidating distributions shall be made by the end of the
Company's taxable year in which the Company is liquidated, or, if later, within
ninety (90) days after the date of such liquidation. The liquidator(s) shall
cause only cash, evidences of indebtedness and other securities to be
distributed in any liquidation. The distribution of cash and/or property to a
Member in accordance with the provisions of this Section
27
11.2 constitutes a complete return to the Member of its Capital Contributions
and a complete distribution to the Member of its interest in the Company and all
the Company's property. To the extent that a Member returns funds to the
Company, it has no claim against any other Member for those funds.
11.3 CANCELLATION OF CERTIFICATE. On completion of the distribution of
Company assets as provided herein, the Company is terminated, and shall file a
certificate of cancellation with the Secretary of State of the State of
Delaware, cancel any other filings made pursuant to Section 2.1 and take such
other actions as may be necessary to terminate the Company.
ARTICLE XII - GENERAL/MISCELLANEOUS PROVISIONS
12.1 OFFSET. Whenever the Company is to pay any sum to any Member, any
amounts that Member owes to the Company may be deducted from that sum before
payment; provided that the full amount that would otherwise be distributed shall
be debited from the Member's Capital Account pursuant to Section 4.1.
12.2 NOTICES. Except as expressly set forth to the contrary in this
Agreement, all notices, requests or consents provided for or permitted to be
given under this Agreement must be in writing and must be given either by
depositing that writing in the United States mail, addressed to the recipient,
postage paid, and registered or certified with return receipt requested or by
delivering that writing to the recipient in person, by courier, or by facsimile
transmission; and a notice, request, or consent given under this Agreement is
effective on receipt by the Person who receives it. All notices, requests and
consents to be sent to a Member must be sent to or made at the address (or
facsimile number) given for that Member on Schedule A, or such other address (or
facsimile number) as that Member may specify by notice to the other Members. Any
notice, request or consent to the Company or the Managing Member must be given
to the Managing Member or, if appointed, the Secretary of the Company at the
Company's chief executive offices. Whenever any notice is required to be given
by law or this Agreement, a written waiver thereof, signed by the Person
entitled to notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice.
12.3 ENTIRE AGREEMENT. This Agreement and other written agreements
among the Members of even date herewith constitute the entire agreement among
the Members relating to the Company and supersedes all prior contracts or
agreements with respect to the Company, whether oral or written.
12.4 EFFECT OF WAIVER OR CONSENT. A waiver or consent, express or
implied, to or of any breach or default by any Person in the performance by that
Person of its obligations hereunder or with respect to the Company is not a
consent or waiver to or of any other breach or default in the performance by
that Person of the same or any other obligations of that Person hereunder or
with respect to the Company. Failure on the part of a Person to complain of any
act of any Person or to declare any Person in default hereunder or with respect
to the Company, irrespective of how long that failure continues, does not
constitute a waiver by
28
that Person of its rights with respect to that default until the applicable
statute-of-limitations period has run.
12.5 AMENDMENT OR MODIFICATION. This Agreement and any provision hereof
may be amended or modified from time to time only by a written instrument
adopted by the Managing Member and may be amended only with the written consent
of the Managing Member; provided, however, that (a) except as otherwise
expressly provided herein, an amendment or modification (other than amendments
or modifications adding new classes of interests or issuing Additional
Interests) (x) reducing disproportionately a Member's Units or other interest in
profits or losses or in distributions, (y) increasing a Member's Capital
Contribution or (z) increasing any other obligation of a Member to the Company
in respect of any Membership Interest in a manner which is disproportionately
adverse to such Member relative to such obligations of other Members in respect
of Membership Interests of the same class or type, shall in each case be
effective only with that Member's consent or (b) an amendment or modification
reducing the required interest for any consent or vote in this Agreement shall
be effective only with the consent or vote of Members having the interest
theretofore required. Notwithstanding the preceding sentence, (i) the Managing
Member may amend and modify the provisions of this Agreement (including Article
V) and Schedule A hereto to the extent necessary to reflect the issuance of
interests (including new classes of interests) in the Company, and admission or
substitution of any Member, permitted under this Agreement and (ii)
notwithstanding anything to the contrary in this Agreement, this Agreement may
be amended or modified to the extent necessary to effectuate the issuance of
Additional Interests pursuant to Section 3.4 at the direction of the Managing
Member.
12.6 BINDING EFFECT. Subject to the restrictions on Transfers set forth
in this Agreement, this Agreement is binding on and shall inure to the benefit
of the Members and their respective heirs, legal representatives, successors and
permitted assigns.
12.7 GOVERNING LAW. THIS AGREEMENT IS GOVERNED BY AND SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE EXCLUDING ANY
CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE
CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. In the event
of a direct conflict between the provisions of this Agreement and any provision
of the Certificate or any mandatory provision of the Act, the applicable
provision of the Certificate or the Act shall control.
12.8 FURTHER ASSURANCES. In connection with this Agreement and the
transactions contemplated hereby, each Member shall execute and deliver any
additional documents and instruments and perform any additional acts that may be
necessary or appropriate to effectuate and perform the provisions of this
Agreement and those transactions.
12.9 WAIVER OF CERTAIN RIGHTS. Each Member irrevocably waives any right
it may have to demand any distributions or withdrawal of property from the
Company or to maintain any action for dissolution (except pursuant to Section
18-802 of the Act) of the Company or for partition of the property of the
Company.
29
12.10 NOTICE TO MEMBERS OF PROVISIONS. By executing this Agreement,
each Member acknowledges that it has actual notice of (a) all of the provisions
hereof (including, without limitation, the restrictions on the transfer set
forth in Article X) and (b) all of the provisions of the Certificate.
12.11 COUNTERPARTS. This Agreement may be executed in multiple
counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same
instrument.
12.12 CONSENT TO JURISDICTION. Each Member irrevocably submits to the
non-exclusive jurisdiction of the United States District Court for the District
of Delaware and the state courts of the State of Delaware, for the purposes of
any suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby. Each Member further agrees that service of any
process, summons, notice or document by U.S. certified or registered mail to
such Member's respective address set forth above shall be effective service of
process in any action, suit or proceeding in Illinois with respect to any
matters to which it has submitted to jurisdiction as set forth above in the
immediately preceding sentence. Each Member irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement or the transactions contemplated hereby in the
United States District Court for the District of Delaware or the state courts of
the State of Delaware, and hereby irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in such court has been brought in an inconvenient forum.
12.13 HEADINGS. The headings used in this Agreement are for the purpose
of reference only and will not otherwise affect the meaning or interpretation of
any provision of this Agreement.
12.14 REMEDIES. The Company and the Members shall be entitled to
enforce their rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement (including costs of
enforcement) and to exercise any and all other rights existing in their favor.
The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that the
Company or any Member may in its or his sole discretion apply to any court of
law or equity of competent jurisdiction for specific performance or injunctive
relief (without posting a bond or other security) in order to enforce or prevent
any violation or threatened violation of the provisions of this Agreement.
12.15 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
30
IN WITNESS WHEREOF, the Members have executed this Agreement as of the
date first set forth above.
MANAGING MEMBER:
AAVID THERMALLOY, LLC
By: /s/
------------------
Name:
Title:
THE COMPANY:
APPPLIED THERMAL TECHNOLOGIES, LLC
By: /s/
-----------------
Name:
Title:
42215.1
31
SCHEDULE A
Capital Common
Members Notice Address Contribution Units
- ------- -------------- ------------ -----
Aavid Thermal One Eagle Square
Products, LLC Concord, NH 03301