EXHIBIT 10.64
Revocation and Substitution Agreement
among
CareView Communications, Inc.
T2 Consulting, LLC
Tommy G. Thompson
Gerald L. Murphy
and
Dennis M. Langley
Dated August 20, 2010
1
TABLE OF CONTENTS
ARTICLE I. DEFINED TERMS AND TITLES | 1 | |
1.1 Defined Terms | 1 | |
ARTICLE II. DISSOLUTION AND DISTRIBUTIONS | 3 | |
2.1 General | 3 | |
2.2 Thompson Distributions and Interests | 3 | |
2.3 Murphy Distributions and Interests | 4 | |
2.4 Langley Distributions and Interests | 4 | |
ARTICLE III. RELEASES AND REPRESENTATIONS | 4 | |
3.1 Warranties and Representations | 4 | |
3.2 General Release | 5 | |
3.3 Revocation and Substitution | 5 | |
ARTICLE IV. MISCELLANEOUS | 5 | |
4.1 Construction | 5 | |
4.2 Counterparts | 5 | |
4.3 Further Assurances | 5 | |
4.4 Governing Law | 5 | |
4.5 Severability | 5 | |
4.6 Survival | 6 | |
4.7 Time | 6 | |
4.8 Representation By Independent Counsel | 6 |
EXHIBITS | ||
Exhibit 1.1.A | February 2005 CareView/T2 Agreement | |
Exhibit 1.1.B | T2 Operating Agreement | |
Exhibit 2.1.A | Form of CareView Warrant | |
Exhibit 2.2.A | T2 Certificate of Cancellation | |
Exhibit 2.2.B | T2 Statement of Unanimous Consent | |
Exhibit 2.4 | Form of Gross Income Interests | |
Exhibit 3.1.A | Warranties and Representations | |
Exhibit 3.1.B | CareView’s Secretary Certificate |
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REVOCATION AND SUBSTITUTION AGREEMENT
This Revocation and Substitution Agreement (hereinAgreement) is entered into this 20th day of August 2010, among CareView Communications, Inc. (CareView), T2 Consulting, LLC (T2), Tommy G. Thompson (Thompson), Gerald L. Murphy (Murphy) and Dennis M. Langley (Langley). The parties hereto may be referred to herein collectively as “Parties” and singularly as a “Party”.
WHEREAS,T2 entered into that particular “Subscription and Investor Rights Agreement” dated February 28, 2005, as well as certain related documents thereto requiring the unanimous written consent ofT2’s members (the October 29, 2007 Unanimous Written Consent of Members of T2 relating to the acquisition of CareView by Ecogate, Inc., and the October 29, 2007 Unanimous Written Consent of Members of T2 relating to the assignment of Article IV Payments, and the October 29, 2007 Assignment and Assumption Agreement and Consent), complete photocopies of the same are collectively attached hereto as Exhibit 1.1.A (herein theFebruary 2005 CareView-TX/T2 Agreement); and
WHEREAS, theParties desire to revoke theFebruary 2005 CareView-TX/T2 Agreement and substitute in its stead the terms hereof relating back in timeab initio to the date of theFebruary 2005 CareView-TX/T2 Agreement; and
WHEREAS, the members ofT2 wish to dissolveT2 pursuant to the terms hereof and theT2 Statement of Unanimous Consent and theT2 Certificate of Cancellation(Exhibits 2.2.A and 2.2.B hereto); and
WHEREAS,T2 currently owns 14,475,666 shares ofCareViewwhich constitutes 11.4% of the issued and outstanding shares ofCareView which currently consists of 126,745,215 shares.
NOW THEREFORE, for good and valuable consideration the receipt of which is hereby acknowledged, theParties hereto hereby agree to the terms of thisAgreement, to-wit:
ARTICLE I.
DEFINED TERMS AND TITLES
1.1Defined Terms. The titles and subtitles of Articles, Sections and Subsections of thisAgreement are for convenience only, are not part of the terms of thisAgreement, are without legal or contractual significance, and as such shall not govern the terms of thisAgreement or in any way influence the interpretation of thisAgreement. The terms used herein shall be ascribed the definitions given thereto in theFebruary 2005 CareView-TX/T2 Agreementand its Glossary. In addition, the following terms used herein shall be ascribed the following definitions, to-wit:
Agreement orAugust 2010 CareView/T2 Agreement shall mean this particular agreement amongCareView,T2,Thompson,Murphy andLangley.
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CareView shall mean CareView Communications, Inc., a Nevada corporation, and its predecessor, Ecogate, Inc. CareView Communications, LLC converted into a Texas corporation (“CareView-TX”) and was subsequently acquired by Ecogate, Inc., a California corporation in 2007, in which CareView-TX became a wholly owned subsidiary of Ecogate, Inc. Thereafter, Ecogate, Inc. changed its name to CareView Communications, Inc. and subsequently converted from a California corporation to a Nevada corporation. Hence, the termCareView herein shall refer to CareView Communications, Inc., a Nevada corporation, and its predecessor Ecogate, Inc., a California corporation, and its subsidiary, CareView-TX.
Closing shall mean the date of the closing of the transactions set forth herein.
February 2005 CareView-TX/T2 Agreement shall have the meaning ascribed thereto in the first “Whereas” clause of thisAgreement and a copy thereof is attached hereto as Exhibit 1.1.A.
Langley shall mean Dennis M. Langley.
Manager(s)andMember(s)shall have the meanings ascribed thereto in theT2 Operating Agreement.
Murphy shall mean Gerald L. Murphy.
Party(s)/Parties when used plurally shall mean theParties to theAgreement and any of its executed Exhibits, and when used singularly shall mean any one of theParties.
T2 shall mean T2 Consulting, LLC, a Delaware limited liability company whose sole members and managers areThompson,Murphy andLangley.
T2’s CareView Interests shall mean all of the interests held byT2 inCareView which consists of: i) 14,475,666 shares of Common Stock ofCareView; and ii) anAdjusted Gross Income Interest inCareView-TX’srevenues.
T2’s CareView Stock shall mean 14,475,666 shares of the Common Stock ofCareView representing 11.4% of 100% of the issued and outstanding stock ofCareView as of today’s date; which theParties stipulate to be the appropriate number and percentage of shares ofCareViewCommon Stock resulting from the original 17% ownership interest inCareView-TX acquired byT2 on February 28, 2005, after dilution as a result ofCareView’s Initial Public Offering and subsequent pro-rata dilutions.
T2 Certificate of Cancellation shall mean the Certificate of Cancellation to be filed of record with the State of Delaware a copy of which is attached hereto as Exhibit 2.2.A, “T2 Certificate of Cancellation”.
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T2 Members shall meanThompson,Murphy andLangley.
T2 Operating Agreement shall mean the operating agreement which governed the operations and conduct ofT2, and itsMembers andManagers, a copy of which is attached hereto as Exhibit 1.1.B, “T2 Operating Agreement”.
T2 Statement of Unanimous Consent shall mean that particular Statement Of Unanimous Consent to Action Taken In Lieu of a Special Meeting of The Members of T2 Consulting, LLC, a copy of which is attached hereto as Exhibit 2.2.B, “T2 Statement of Unanimous Consent”.
Thompson shall mean Tommy G. Thompson.
ARTICLE II.
DISSOLUTION AND DISTRIBUTIONS
2.1General. Contemporaneous with theClosing of thisAgreement,T2 shall dissolve withThompson receiving the distribution of assets set forth in Section 2.2, “Thompson Distributions and Interests” hereof;Murphy receiving the distribution of assets set forth in Section 2.3, “Murphy Distributions and Interests” hereof; andLangley receiving the distribution of assets set forth in Section 2.4, “Langley Distributions and Interests” hereof. AfterClosing,CareView shall request its transfer agent to cancel stock certificate #3090 for 14,475,666 shares ofCareViewCommon Stock issued toT2 and to reissue 4,825,222 shares toThompson, 4,825,222 shares toMurphy and 4,825,222 shares toLangley. All such shares shall be “restricted” and may not be sold, transferred or hypothecated without compliance with the registration requirements of the Securities Act of 1933, as amended or in reliance upon an available exemption therefrom, as determined by counsel for CareView. Additionally, atClosing, in exchange for the revocation of theFebruary 2005 CareView-TX/T2 Agreement, CareView shall issue to each ofMurphy, Thompson and Langley, a five-year Common Stock Purchase Warrant to purchase 1,000,000 underlying shares ofCareView’s Common Stock at an exercise price of $1.00 per share, pursuant to theCareView Warrant in the form attached hereto as Exhibit 2.1, “Form of CareView Warrant,” and shall issue to each ofThompson, Murphy andLangleya one-third ownership in a one and one-half percent (1 1/2%)Gross Income Interest in the form attached hereto as Exhibit 2.4, “Form of Gross Income Interest.”
2.2Thompson Distributions and Interests.Thompson is aMember andManager ofT2, owning a 33.33% interest in the equity ofT2,and the assets ofT2currently consist of: i)T2’s CareView Stock, and ii)T2’s Adjusted Gross Income Interest inCareView-TX. UponClosing andT2’sdissolution pursuant to Exhibits 2.2.A and 2.2.B,Thompson’s interests inT2 shall be dissolved and the following assets shall be distributed byT2 toThompson in complete satisfaction of any and all obligations or interests dueThompson byT2, to-wit: i)Thompson shall receive 4,825,222 restricted shares of Common Stock ofCareView ( 1/3 ofT2’s CareView Stock) which shares shall
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be acquired for investment and not for further distribution; and ii) a one-third ownership interest in a one and one-half percent (1 1/2%)Gross Income Interest inCareView, consistent with Exhibit 2.4, “Form of Gross Income Interest.”Thompson is both aMember and aManager ofT2 as well as the Chairman of the Board of Directors ofCareView. Consequently,Thompson has appropriately recused himself and abstained from any votes or discussions ofCareView regarding the subject matter of thisAgreement vis-à-visCareView.
2.3Murphy Distributions and Interests.Murphy is aMember andManager ofT2, owning a 33.33% interest in the equity ofT2,and the assets ofT2currently consist of: i)T2’s CareView Stock, and ii) theT2’s Adjusted Gross Income Interest inCareView-TX. UponClosing andT2’sdissolution,Murphy’s interests inT2 shall be dissolved and the following assets shall be distributed byT2 toMurphy in complete satisfaction of any and all obligations or interests dueMurphy byT2, to-wit: i)Murphy shall receive 4,825,222 restricted shares of Common Stock ofCareView (1/3 ofT2’s CareView Stock) which shares shall be acquired for investment and not for further distribution; and ii) a one-third ownership interest in a one and one-half percent (1 1/2%)Gross Income Interest inCareView, consistent with Exhibit 2.4, “Form of Gross Income Interest.”
2.4Langley Distributions and Interests.Langley is aMember andManager ofT2, owning a 33.33% interest in the equity ofT2, and the assets ofT2currently consist of: i)T2’s CareView Stock, and ii) theT2’s Adjusted Gross Income Interest inCareView-TX. UponT2’s Closing and dissolution,Langley’s interests inT2 shall be dissolved and the following assets shall be distributed byT2 toLangley in complete satisfaction of any and all obligations or interests dueLangley byT2, to-wit: i)Langley shall receive 4,825,222 restricted shares of Common Stock ofCareView (1/3 ofT2’s CareView Stock) which shares shall be acquired for investment and not for further distribution; and ii) a one-third ownership interest in a one and one-half percent (1 1/2%)Gross Income Interest inCareView.in a form consistent with Exhibit 2.4, “Form of Gross Income Interest”.
ARTICLE III.
RELEASES AND REPRESENTATIONS
3.1Warranties and Representations. The warranties and representations of theParties are set forth in Exhibit 3.1.A, “Warranties and Representations”, the terms of which are incorporated herein which Exhibit 3.1 also has Exhibits thereto. Additionally, theT2 Statement of Unanimous Consentis attached hereto as Exhibit 2.2.B authorizing and approving thisAgreement and its terms and CareView’s Secretary’s Certificate certifying CareView’s approval of thisAgreement and its terms is attached hereto as Exhibit 3.1.B.
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3.2General Release. UponClosing and subject to the rights contained herein and in the Exhibits hereto, theParties hereby unconditionally, absolutely, irrevocably, mutually and forever waive, discharge and fully release each other and each of their respective present or former stockholders, members, partners, officers, directors, managers, assigns, successors, predecessors, principals, agents, employees, representatives, attorneys and accountants, from any and all rights, actions, causes of action, claims, contracts, obligations, offsets, defenses, demands, damages, costs, expenses, attorneys’ fees, compensation, debts and liabilities of any kind or nature whatsoever, under contract, at law or in equity, known or unknown, contingent or mature, liquidated or unliquidated (and all remedies with respect thereto) based in whole or in part on any act, omission, event, occurrence, condition or thing arising out of theFebruary 2005 CareView-TX/T2 Agreement, or relating to theFebruary 2005 CareView-TX/T2 Agreement or prior to the date hereof; provided, however, that this Section 3.2 shall not affect any rights of any party arising under, or the right of any party to enforce, thisAgreementor any Exhibits, as applicable.
3.3Revocation and Substitution.UponClosing, theFebruary 2005 CareView-TX/T2 Agreementshall be revoked and the terms of thisAgreement and its Exhibits shall be substituted in its stead as if they had been in effect and binding on thePartiesas of February 28, 2005.
ARTICLE IV.
MISCELLANEOUS
4.1Construction. TheParties hereto acknowledge and agree that eachParty has participated in the drafting of thisAgreement and that the normal rules of construction to the effect that any ambiguity is to be resolved against the draftingParty shall not apply to the interpretation of thisAgreement. No inference in favor of, or against, anyParty shall be drawn by the fact that oneParty has drafted any portion hereof.
4.2Counterparts. ThisAgreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which shall constitute one and thesame instrument.
4.3Further Assurances. Each of theParties hereto, without further consideration, agrees to execute and deliver such other documents and take such other action, whether prior to or subsequent toClosing, as may be necessary to more effectively consummate the intent and purpose of thisAgreement.
4.4Governing Law. ThisAgreement shall be enforced in accordance with and governed by the laws of the State of Texas.
4.5Severability. If, for any reason whatsoever, any one or more of the provisions of thisAgreement shall be held or deemed to be inoperative, unenforceable or invalid as applied to any particular case or in all cases, such circumstances shall not have the effect of rendering such provision invalid in any other case or of rendering any of the other provisions of thisAgreement inoperative, unenforceable or invalid.
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4.6Survival. All of the terms, conditions, warranties and representations contained in thisAgreement shall survive the execution hereof and delivery of the consideration and theClosing hereunder.
4.7Time. Time is and shall be of the essence under thisAgreement.
4.8Representation By Independent Counsel. Each of theParties were represented by independent legal counsel and other professional counsel or were given the right to be so represented and voluntarily waived the same.
(Signature page follows)
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IN WITNESS WHEREOF, the undersigned hereto have duly executed and delivered thisAgreementto be effective as of the date first above written.
CAREVIEW COMMUNICATIONS, INC. | ||
By | /s/ Steven G. Johnson | |
Steven G. Johnson, President | ||
T2 CONSULTING, LLC | ||
By | /s/ Dennis M. Langley | |
Dennis M. Langley | ||
Its: | Manager | |
THOMPSON | ||
/s/ Tommy G. Thompson | ||
Tommy G. Thompson, Personally and | ||
as a Member and a Manager of T2 | ||
LANGLEY | ||
/s/ Dennis M. Langley | ||
Dennis M. Langley, Personally and | ||
as a Member and a Manager of T2 | ||
MURPHY | ||
/s/ Gerald L. Murphy | ||
Gerald L. Murphy, Personally and | ||
as a Member and a Manager of T2 |
Ratified and Confirmed by: | ||
CareView Communications, Inc., a Texas corporation | ||
By: | /s/ Steven G. Johnson | |
Steven G. Johnson, President |
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EXHIBIT 1.1.A.
FEBRUARY 2005 CAREVIEW-TX/T2 AGREEMENT
1
EXHIBIT 1.1.B.
T2 OPERATING AGREEMENT
1
LIMITED LIABILITY COMPANY AGREEMENT
OF
T2 CONSULTING, LLC
DATED AS OF FEBRUARY 28, 2005
1
TABLE OF CONTENTS
ARTICLE I: FORMATION AND OFFICES | 1 | |||
1.1 | Glossary and Interpretation | 1 | ||
1.2 | Formation | 1 | ||
1.3 | Principal Office | 1 | ||
1.4 | Registered Office and Registered Agent | 1 | ||
1.5 | Purpose of Company | 1 | ||
1.6 | Date of Dissolution | 2 | ||
1.7 | Delivery of Copies to Members | 2 | ||
ARTICLE II: CAPITALIZATION, DISTRIBUTIONS AND ALLOCATIONS | 2 | |||
2.1 | Initial Capital Contributions | 2 | ||
2.2 | Additional Capital Contributions | 2 | ||
2.3 | Preemptive Rights | 2 | ||
2.4 | Cash Distributions Prior to Dissolution | 2 | ||
2.5 | Persons Entitled to Distributions | 3 | ||
2.6 | Reserves | 3 | ||
2.7 | Allocation of Profits and Losses | 3 | ||
2.8 | Withholding Taxes | 3 | ||
ARTICLE III: MEMBERS | 3 | |||
3.1 | Meetings of Members; Place of Meetings | 3 | ||
3.2 | Quorum; Voting Requirement | 4 | ||
3.3 | Proxies | 4 | ||
3.4 | Action Without Meeting | 4 | ||
3.5 | Notice | 4 | ||
3.6 | Powers of the Members | 4 | ||
3.7 | Other Business Ventures | 4 | ||
ARTICLE IV: MANAGERS | 5 | |||
4.1 | Powers of the Managers | 5 | ||
4.2 | Limitation on Powers of Managers | 5 | ||
4.3 | Duties of Managers | 6 | ||
4.4 | Number, Appointment, Tenure and Election of Managers | 7 | ||
4.5 | Removal, Resignation and Election of a Manager | 7 | ||
4.6 | Compensation | 7 | ||
4.7 | Meetings of and Voting by Managers | 7 | ||
4.8 | Authority to Execute Documents to be Filed Under the Act | 8 | ||
ARTICLE V: LIABILITY AND INDEMNIFICATION | 8 | |||
5.1 | Liability of Members and Managers | 8 | ||
5.2 | Indemnification | 8 |
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5.3 | Expenses | 9 | ||
5.4 | Non-Exclusivity | 9 | ||
5.5 | Insurance | 9 | ||
5.6 | Duties | 9 | ||
ARTICLE VI: TRANSFERS OF INTERESTS AND ASSIGNMENTS; WITHDRAWAL | 10 | |||
6.1 | General Restrictions | 10 | ||
6.2 | Permitted Transfers | 11 | ||
6.3 | Substitute Members | 11 | ||
6.4 | Effect of Admission as a Substitute Member | 11 | ||
6.5 | Additional Members | 11 | ||
6.6 | Purchase Terms Varied By Agreement | 12 | ||
ARTICLE VII: DISSOLUTION AND TERMINATION | 12 | |||
7.1 | Events Causing Dissolution | 12 | ||
7.2 | Notices to Secretary of State | 12 | ||
7.3 | Cash Distributions Upon Dissolution | 12 | ||
7.4 | In-Kind | 13 | ||
ARTICLE VIII: ACCOUNTING AND BANK ACCOUNTS | 13 | |||
8.1 | Fiscal Year and Accounting Method | 13 | ||
8.2 | Books and Records | 13 | ||
8.3 | Books and Financial Reports | 14 | ||
8.4 | Tax Returns and Elections | 14 | ||
8.5 | Bank Accounts | 14 | ||
ARTICLE IX: DISPUTE RESOLUTION | 14 | |||
9.1 | Disputes | 14 | ||
9.2 | Payment Cures | 15 | ||
9.3 | Enforceable At Law And In Equity | 15 | ||
9.4 | Governing Law | 15 | ||
9.5 | Invalidity In Part | 15 | ||
9.6 | Cy-Pres | 16 | ||
ARTICLE X: MISCELLANEOUS | 16 | |||
10.1 | Notice | 16 | ||
10.2 | Further Assurances | 16 | ||
10.3 | Title to Property; No Partition | 16 | ||
10.4 | Waiver of Default | 17 | ||
10.5 | Amendment | 17 | ||
10.6 | No Third Party Rights | 17 | ||
10.7 | Severability | 17 | ||
10.8 | Nature of Interest in the Company | 17 | ||
10.9 | Binding Agreement | 17 | ||
10.10 | Counterparts | 17 |
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10.11 | Entire Agreement | 17 | ||
10.12 | Representations and Acknowledgments | 17 | ||
10.13 | Non Disclosure | 18 | ||
10.14 | Buy/Sell Agreement | 18 |
EXHIBIT 1.1 – GLOSSARY | 1 | |||
EXHIBIT 2.1 - MEMBERS | 1 | |||
EXHIBIT 2.4 - TAXES | 1 | |||
EXHIBIT 9.1 - ARBITRATION | 1 | |||
EXHIBIT 10.14 – BUY/SELL AGREEMENT | 1 |
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LIMITED LIABILITY COMPANY AGREEMENT
OF
T2CONSULTING, LLC
THIS LIMITED LIABILITY COMPANY AGREEMENT is made and entered into as of the 28th day of February, 2005 (the “Effective Date”) by and among thePersons executing thisAgreement asMembers on the signature page hereof.
WHEREAS, theMembers have caused T2 Consulting, LLC (the “Company”) to be formed on February 28, 2005 as a limited liability company under the Delaware Limited Liability Company Act and, as required thereunder, do hereby adopt this Limited LiabilityCompany Agreement as the limited liability company agreement of theCompany;
WHEREAS, by executing thisAgreement, each of theMembers hereby (a) ratifies the formation of theCompany and the filing of theCertificate, (b) confirms and agrees to theMembers’ status as members of theCompany, and (c) continues the existence of theCompany for the purposes hereinafter set forth, subject to the terms and conditions hereof;
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereto agree as follows:
ARTICLE I
FORMATION AND OFFICES
2.5Glossary and Interpretation. The headings of the Articles and Sections of thisAgreement are for convenience only and shall not be considered in construing or interpreting any of the terms or provisions hereof. The words such as “herein,” “hereinafter,” “hereof,” and “hereunder” refer to thisAgreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires. The singular shall include the plural, and vice versa, unless the context otherwise requires.
1.2Formation. Pursuant to theAct, theMembers have formed a Delaware limited liability company effective upon the filing of theCertificate of theCompany with the Secretary of State of Delaware.
1.3Principal Office. The principal office of theCompany shall be located at 5225 Renner Road, Shawnee, KS 66217, or at such other place(s) as theManagers may determine from time to time.
1.4Registered Office and Registered Agent. The location of the registered office and the name of the registered agent of theCompany in the State of Delaware shall be as stated in theCertificate, as determined from time to time by theManagers.
1.5Purpose of Company. The purpose for which theCompany is organized is to transact any or all lawful business for which a limited liability company may be organized under theAct. Subject to the provisions of thisAgreement, theCompany shall have the power to do
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any and all acts and things necessary, appropriate, advisable or convenient for the furtherance and accomplishment of the purposes of theCompany, including, without limitation, to engage in any kind of activity and to enter into and perform obligations of any kind necessary to or in connection with, or incidental to, the accomplishment of the purposes of theCompany, so long as said activities and obligations may be lawfully engaged in or performed by a limited liability company under theAct.
1.6Date of Dissolution. The duration of theCompany shall be perpetual.
1.7Delivery of Copies to Members. Upon the return by the Secretary of State of Delaware to theCompany of any document “Filed” with the Secretary of State of Delaware relating to theCompany, neither theCompany nor thePerson executing such document shall be required to deliver or mail a copy thereof to anyMember.
ARTICLE II
CAPITALIZATION, DISTRIBUTIONS AND ALLOCATIONS
2.1Initial Capital Contributions. EachMember shall make an initialCapital Contribution to the capital of theCompany in an amount set forth opposite suchMember’s name and address on the attached Exhibit 2.1, “Members”. Hereafter, the names, addresses andCapital Contributions of theMembers shall be reflected in the books and records of theCompany.
2.2Additional Capital Contributions. NoMember (orAssignee) shall be required or permitted to make any additionalCapital Contribution except as otherwise provided in thisAgreement. NoMember shall have the right to reduce suchMember’sCapital Contribution or to receive any distributions from theCompany except as provided in Sections 2.1, “Initial Capital Contributions”, and 7.3, “Cash Distributions Upon Dissolution”. NoMember shall be entitled to receive or be credited with any interest on the balance of suchMember’sCapital Contribution at any time.
2.3Preemptive Rights. In the event additionalCapital Contributions are to be made to theCompany by new or existingMembers, then each currentMember shall have the preemptive right to make such additionalCapital Contributions (pro-rata, in proportion to suchMember’sPercentage Interest).
2.4Cash Distributions Prior to Dissolution. The Managers shall have the right to determine how much Net Cash Flow, if any, of the Company shall be distributed among the Members each year; provided, however, if suchNet Cash Flow is otherwise available, theManagers shall distribute to theMembers an amount ofNet Cash Flow sufficient for theMembers to satisfy their respective income tax liabilities arising by virtue of the allocations in Exhibit 2.4, “Cash Distributions Prior to Dissolution”, hereof, assuming eachMember is subject to tax at the highest marginal federal tax bracket for married individuals filing jointly and at the highest such marginal rate applicable to New York residents. AnyNet Cash Flow of theCompany to be distributed shall be distributed among theMembers,prorata in proportion to their respectivePercentage Interests. Notwithstanding anything to the contrary herein provided, no distribution hereunder shall be permitted to the extent prohibited by theAct. Currently,
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among other prohibitions, theAct prohibits theCompany from making a distribution to the extent that, after giving effect to the distribution, liabilities of theCompany exceed the fair value of the assets of theCompany. No distribution ofNet Cash Flow or other cash made to anyMember shall be determined a return or withdrawal of aCapital Contribution unless so designated by theManagers in their sole and exclusive discretion.
2.5Persons Entitled to Distributions. All distributions ofNet Cash Flow to theMembers under Section 4.1, “Powers of the Managers”, hereof shall be made to thePersons shown on the records of theCompany to be entitled thereto as of the last day of the fiscal period prior to the time for which such distribution is to be made, unless the transferor and transferee of anyInterest otherwise agree in writing to a different distribution and such distribution is consented to in writing by theManagers.
2.6Reserves. TheManagers shall have the right to establish, maintain and expend reserves to provide for working capital, future investments, debt service and such other purposes as they may deem necessary or advisable.
2.7Allocation of Profits and Losses. AllProfits and Losses for Tax Purposes of theCompany and all special allocations of theCompany shall be made in accordance with attached Exhibit 2.4, “Taxes”.
2.8Withholding Taxes. If theCompany is required to withhold any portion of any amounts distributed, allocated or otherwise attributable to aMember of theCompany by applicable U.S. federal, state, local or foreign tax laws, theCompany may withhold such amounts and make such payments to taxing authorities as are necessary to ensure compliance with such tax laws. Any funds withheld by reason of this Section 2.8, “Withholding Taxes”, shall nonetheless be deemed distributed to suchMember in question for purposes of Article II, “Capitalization, Distributions and Allocations”, and Article IX, “Dispute Resolution”. If theCompany does not withhold from actual distributions any amounts it was required to withhold by applicable tax laws, theCompany may, at its option, (i) require theMember to which the withholding was credited to reimburse theCompany for withholding required by such laws, including any interest, penalties or additions thereto; or (ii) reduce any subsequent distributions to suchMember by such withholding, interest, penalties or additions thereto. The obligation of aMember to reimburse theCompany for such amounts shall continue after suchMember transfers or liquidates its interest in theCompany. EachMember agrees to furnish theCompany with any representations and forms as shall reasonably be requested by theCompany to assist in determining the extent of, and in fulfilling, any withholding obligations it may have.
Article III
MEMBERS
3.1Meetings of Members; Place of Meetings. Meetings of theMembers may be held for any purpose or purposes, unless otherwise prohibited by law or by theCertificate, and may be called by theManagers or byMembers owning not less than 25% of thePercentage Interests. All meetings of theMembers shall be held at the principal offices of theCompany as set forth in Section 1.3, “Principal Office”, hereof, or at such other place as shall be designated from time to time by theManagers and stated in theNotice of the meeting or in a duly executed
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waiver of theNotice thereof.Members may participate in a meeting of theMembers by means of conference telephone or other similar communication equipment whereby allMembers participating in the meeting can hear each other. Participation in a meeting in this manner shall constitute presence in person at the meeting.
3.2Quorum; Voting Requirement. The presence, in person or by proxy, of aRequisite Voting Majority in Interest shall constitute a quorum for the transaction of business by theMembers. The affirmative vote of theRequisite Voting Majority in Interestshall constitute a valid decision of theMembers, except where a larger vote is required by theAct, theCertificate or thisAgreement.
3.3Proxies. At any meeting of theMembers, everyMember having the right to vote thereat shall be entitled to vote in person or by proxy appointed by an instrument in writing (by means of electronic transmission or as otherwise permitted by applicable law) signed by suchMember and bearing a date not more than one year prior to such meeting.
3.4Action Without Meeting. Any action required or permitted to be taken at any meeting of theMembers may be taken without a meeting, without priorNotice and without a vote if a consent in writing setting forth the action so taken is signed byMembers having not less than the minimumPercentage Interests that would be necessary to authorize or take such action at a meeting of theMembers. PromptNotice of the taking of any action taken pursuant to this Section 3.4, “Action Without Meeting”, by less than the unanimous written consent of theMembers shall be given to thoseMembers who have not consented in writing. A consent transmitted by electronic transmission by aMember shall be deemed to be written and signed for purposes of this Section 3.4, “Action Without Meeting”. A consent may be executed by facsimile and may be executed in counterparts.
3.5Notice.Notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose for which the meeting is called shall be delivered not less than five (5) days nor more than sixty (60) days before the date of the meeting by or at the direction of theManagers or otherPersons calling the meeting, to eachMember entitled to vote at such meeting. When anyNotice is required to be given to anyMember hereunder, a waiver thereof in writing signed by theMember, whether before, at, or after the time stated therein, shall be equivalent to the giving of suchNotice. AMember may also waiveNotice by attending a meeting without objection to a lack ofNotice.
3.6Powers of the Members. NoMember, acting solely in his, her or its capacity as aMember, shall act as an agent of theCompany or have any authority to act for or to bind theCompany.
3.7Other Business Ventures. AnyMember orManager may engage in or possess an interest in other business ventures of every nature and description, independently or with others, whether or not similar to or in competition with the business of theCompany, and neither theCompany nor theMembers shall have any right by virtue of thisAgreement in or to such other business ventures or to the income or profits derived there from. Unless otherwise agreed to, noManager shall be required to devote all suchManager’s time or business efforts to the affairs of theCompany, but shall devote so much of suchManager���s time and attention to theCompany as is reasonably necessary and advisable to manage the affairs of theCompany to the best advantage of theCompany.
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ARTICLE IV
MANAGERS
4.1Powers of the Managers. Except as otherwise provided hereunder, the business and affairs of theCompany shall be managed by theManagers. Any decision or act of theManagers within the scope of theManagers’ power and authority granted hereunder shall control and shall bind theCompany.
4.2Limitation on Powers of Managers. Without the approval of theRequisite Voting Majority in Interestof theMembers, theManagers shall not have the authority to:
A. cause theCompany to make any loan to anyMember;
B. enter into or amend any transaction between theCompany and aMember or anAffiliate of aMember or an employee of either except in connection with transactions made on an arms-length basis at the then-prevailing market rates;
C. assume, endorse, provide collateral for, incur or guarantee, act as surety for, or become liable for any indebtedness for borrowed money on behalf of theCompany in excess of Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate outstanding at any one time, grant any guarantee of third party indebtedness for borrowed money, grant any guarantee of third party obligations outside of the ordinary course of business or in excess of Two Hundred Fifty Thousand Dollars ($250,000) in the ordinary course of business, or refinance or materially modify the terms of any such indebtedness or guarantees of theCompany;
D. sell, exchange, lease, mortgage, pledge or otherwise dispose of all or substantially all of theProperty in a single transaction or series of related transactions;
E. terminate, dissolve or wind-up theCompany;
F. (1) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of theCompany or of all or a substantial part of the assets of theCompany, (2) admit in writing theCompany’s inability to pay its debts as they become due, (3) make a general assignment for the benefit of creditors, (4) have an order for relief entered against theCompany under applicable federal bankruptcy law, or (5) file a voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors or taking advantage of any insolvency law or any answer admitting the material allegations of a petition filed against theCompany in any bankruptcy, reorganization or insolvency proceeding;
G. commingle theCompany’s funds with those of any otherPerson;
H. delegate to one or more otherPersons theManager’s rights and powers to manage and control the business and affairs of theCompany;
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I. permit voluntary additionalCapital Contributions by existingMembers except on a pro-rata basis;
J. amend theCertificate of Formation;
K. issue anInterest to anyPerson and admit suchPerson as an additionalMember unless permitted to do so without such approval in Section 6.5, “Additional Members”;
L. approve a merger or consolidation of theCompany with or into anotherPersonor the acquisition by theCompany of another business (either by asset, stock or interest purchase) or any equity of another entity;
M. change the status of theCompany from one in which management is vested in theManagers to one in which management is vested in theMembers;
N. authorize any transaction, agreement or action on behalf of theCompany that is unrelated to its purpose as set forth in thisAgreement, that otherwise contravenes thisAgreement or that is not within the usual course of the business of theCompany; or
O. redeem anyInterests or recapitalize theCompany; or
P. subject to Section 6.5, “Additional Members”, as to additionalMembers, determine, modify, compromise or release the amount and character of the contributions which aMember shall make, or shall promise to make, as the consideration for the issuance of anInterest.
4.3Duties of Managers. In addition to the rights and duties of theManagers set forth elsewhere in thisAgreement and subject to the other provisions of thisAgreement, theManagers shall be responsible for and are hereby authorized to:
A. control the day to day operations of theCompany;
B. hire or appoint employees, agents, independent contractors or officers of theCompany;
C. carry out and effect all directions of theMembers;
D. select and engage theCompany’s accountants, attorneys, engineers and other professional advisors;
E. apply for and obtain appropriate insurance coverage for theCompany;
F. temporarily invest funds of theCompany in short term investments where there is appropriate safety of principal;
G. acquire in the name of theCompany by purchase, lease or otherwise, any real or personal property which may be necessary, convenient or incidental to the accomplishment of the purposes of theCompany;
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H. engage in any kind of activity and perform and carry out contracts of any kind necessary to, in connection with, or incidental to the accomplishment of the purposes of theCompany, so long as said activities and contracts may be lawfully carried on or performed by a limited liability company under theAct and are in the ordinary course of theCompany’s business; and
I. negotiate, execute and perform all agreements, contracts, leases, loan documents and other instruments and exercise all rights and remedies of theCompany in connection with the foregoing.
4.4Number, Appointment, Tenure and Election of Managers. The initialManagers of theCompany shall be: Tommy G. Thompson, Gerald L. Murphy and Dennis M. Langley (the “Initial Managers”). TheMembers by a vote of theRequisite Voting Majority In Interestmay, from time to time, amend this Section 4.4, “Number, Appointment, Tenure and Election of a Manager”, to increase or decrease the number ofManagers, but in no instance shall the number ofManagers be less than one. In such event theMembers shall elect the required number of additionalManagers or designate (as hereinafter provided) theManagers who shall no longer hold such office in the event the number is decreased.
4.5Removal, Resignation and Election of a Manager. AnyManager may be removed from such position at any time, with or without cause, by unanimous vote of all of theMembers. AManager may resign from such position at any time upon giving thirty (30) days’ priorNotice to theMembers. Any vacancy created in a manager position by the removal or resignation of aManager or otherwise shall be filled by a newManager selected by unanimous agreement.
4.6Compensation. Except as provided elsewhere in thisAgreement, noManager orMember shall be entitled to compensation for any services suchManager or suchMember may render to or for theCompany or be entitled to reimbursement of any general overhead expenses incurred by suchManager orMember in his, her or its capacity as aManager orMember. EachManager and, where applicable,Member, shall be entitled to reimbursement from theCompany for all reasonable direct out-of-pocket expenses incurred on behalf of theCompany upon presentation to theCompany of receipts or other appropriate documentation evidencing such expenses.
4.7Meetings of and Voting by Managers. Meetings of theManagers shall be held at such time and at such places as they shall determine. In addition, any oneManager may, upon giving four (4) days’Notice to the others, call a meeting of theManagers. No meeting of theManagers shall be held without a quorum being present, which shall consist of a majority of theManagers.Managers may participate in a meeting of theManagers by means of conference telephone or other similar communication equipment whereby allManagers participating in the meeting can hear each other. Participation in a meeting in this manner shall constitute presence in person at the meeting.Action of theManagers shall require the favorable vote of a majority of allManagers. EachManager shall have one (1) vote on all matters. TheManagers shall make every reasonable effort to keep theMembers advised of all pending matters, prospective decisions and actions taken and shall consult with theMembers on such matters as they deem appropriate.
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Any action required or permitted by thisAgreement to be taken at any meeting of theManagers may be taken without a meeting, without priorNotice and without a vote, if a consent in writing, setting forth the action so taken, is signed byManagers having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which allManagers entitled to vote thereon were present and voted. PromptNotice of the taking of any action taken pursuant to this Section 4.7, “Meetings of and Voting By Manager”, by less than the unanimous written consent of theManagers shall be given to thoseManagers who have not consented in writing. A consent transmitted by electronic transmission by aManager shall be deemed to be written and signed for purposes of this Section 4.7, “Meetings of and Voting By Manager”. A consent may be executed by facsimile and may be executed in counterparts. When anyNotice is required to be given to anyManager hereunder, a waiver thereof in writing, signed by theManager, whether before, at or after the time stated therein, shall be equivalent to the giving of suchNotice. Further, aManager may waiveNotice of a meeting by attending such meeting without objection to a lack ofNotice.
4.8Authority to Execute Documents to be Filed Under the Act. AnyManager shall have the power and authority to execute, on behalf of theCompany, theManagers or theMembers, any document filed with the Secretary of State of Delaware pursuant to the terms of theAct.
ARTICLE V
LIABILITY AND INDEMNIFICATION
5.1Liability of Members and Managers. AMember shall only be liable to make the payment of theMember’s initialCapital Contribution pursuant to Section 2.1, “Initial Capital Contributons”, hereof. NoMember orManager shall be liable for any obligations of theCompany or any otherMember orManager, unless personally guaranteed by theMember orManager pursuant to a separate document. NoMember, except as otherwise specifically provided in theAct, shall be obligated to pay any distribution to or for the account of theCompany or any creditor of theCompany.
5.2Indemnification. TheMembers, theManagers, any officers of theCompany appointed by theManagers, and theirAffiliates, and their respective stockholders, members, managers, directors, officers, partners, agents and employees (individually and collectively, an “Indemnitee”) shall be indemnified and held harmless by theCompany from and against any and all losses, claims, damages, liabilities, expenses (including legal fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative (each a “Claim”), in which theIndemnitee may be involved, or threatened to be involved, as a party or otherwise by reason of suchIndemnitee’s status as any of the foregoing, which relates to or arises out of theCompany, its assets, business or affairs, if in each of the foregoing cases (i) theIndemnitee acted in good faith and in a manner suchIndemnitee believed to be in, or not opposed to, the best interests of theCompany, and, with respect to any criminal proceeding, had no reasonable cause to believe suchIndemnitee’s conduct was unlawful, (ii) theIndemnitee’s conduct did not constitute gross negligence or willful or wanton misconduct, (iii) theIndemnitee did not breach his, her or its duty of loyalty to theCompany or theMembers, and (iv) theIndemnitee did not receive any improper personal benefit with respect to the transaction at issue. The termination of any action,
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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 theIndemnitee acted in a manner contrary to that specified in (i), (ii), (iii) or (iv) above. Any indemnification pursuant to this Article V, “Liability and Indemnification”, shall be made only out of the assets of theCompany, and noManager orMember shall have any personal liability on account thereof.
In the event that an amendment to thisAgreement reduces or eliminates anyIndemnitee’s right to indemnification pursuant to this Article V, “Liability and Indemnification”, such amendment shall not be effective with respect to anyIndemnitee’s right to indemnification that accrued prior to the date of such amendment. For purposes of this Section, a right to indemnification shall accrue as of the date of the event underlying theClaim that gives rise to such right to indemnification. All calculations ofClaims and the amount of indemnification to which anyIndemnitee is entitled under this Article V, “Liability and Indemnification”, shall be made (i) giving effect to the tax consequences of any suchClaim and (ii) after deduction of all proceeds of insurance net of retroactive premiums and self-insurance retention recoverable by theIndemnitee with respect to suchClaims.
5.3Expenses. Expenses (including reasonable legal fees and expenses) incurred by anIndemnitee in defending any claim, demand, action, suit or proceeding described in Section 5.2, “Indemnification”, may, from time to time, be advanced by theCompany prior to the final disposition of such claim, demand, action, suit or proceeding, in the discretion of theManagers, upon receipt by theCompany of an undertaking by or on behalf of theIndemnitee to repay such amount if it shall be determined that theIndemnitee is not entitled to be indemnified as authorized in this Article V, “Liability and Indemnification”.
5.4Non-Exclusivity. The indemnification and advancement of expenses set forth in this Article V, “Liability and Indemnification”, shall not be exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any statute, theAct, theCertificate, thisAgreement, any other agreement, a vote ofMembers, a policy of insurance or otherwise, and shall not limit in any way any right which theCompany may have to make additional indemnifications with respect to the same or differentPersons or classes ofPersons, as determined by theManagers. The indemnification and advancement of expenses set forth in this Article V, “Liability and Indemnification”, shall continue as to anIndemnitee who has ceased to be a namedIndemnitee and shall inure to the benefit of the heirs, executors, administrators, successors and assigns of such aPerson.
5.5Insurance. TheCompany may purchase and maintain insurance on behalf of theIndemnitees against any liability asserted against them and incurred by them in such capacity, or arising out of their status asIndemnitees, whether or not theCompany would have the power to indemnify them against such liability under this Article V, “Liability and Indemnification”.
5.6Duties. AMember orManager shall discharge his, her or its duties hereunder in good faith, with the care a corporate officer of like position would exercise under similar circumstances, in the manner he, she or it reasonably believes to be in the best interest of theCompany, and shall not be liable for any such action so taken or any failure to take such action, if he, she or it performs such duties in compliance with this Section 5.6, “Duties”. Except as provided in this Section 5.6, “Duties”, and anyPerson who is aMember and who is not aManager shall have no duties to theCompany or to the otherMembers solely by reason of acting in his, her or its capacity as aMember.
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ARTICLE VI
TRANSFERS OF INTERESTS AND ASSIGNMENTS; WITHDRAWAL
6.1General Restrictions.
6.1.1 | NoMember mayTransfer all or any part of suchMember’sInterest, except as provided in this Article VI, “Transfers of Interests and Assignments; Withdrawal”. Any purportedTransfer of anInterest or a portion thereof in violation of the terms of thisAgreement shall be null and void and of no effect. If theManagers determine in their sole discretion that anyTransfer will result in a termination of theCompany underCode § 708(b)(1)(B), then theManagers may deem suchTransfer shall to be null and void. A permittedTransfer shall be effective as of the date specified in the instruments relating thereto. Any transferee desiring to make a furtherTransfer shall become subject to all the provisions of this Article VI, “Transfers of Interests and Assignments; Withdrawal”, to the same extent and in the same manner as anyMember desiring to make anyTransfer. |
6.1.2 | NoMember shall have the right to withdraw voluntarily from theCompanyas aMember, except upon ninety (90) days’Noticeto the otherMembers and with the consent of aMajority in Interest.Payment if any, to anyMemberwho voluntarily withdraws in accordance with this Subsection 6.1.2 shall be made in accordance with Section 6.6, “Purchase Terms Varied By Agreement”. |
6.1.3 | All voting rights shall be forfeited with respect to all or any part of anInterest which isTransferredother than to a transferee who becomes a substituteMember(in accordance with Section 6.3, “Substitute Members”), whether suchTransferis voluntary or involuntary, by order of a court or by operation of law. |
6.1.4 | APerson shall cease to be aMember upon assignment of all suchMember’sInterest. |
6.1.5 | In the event, that anAssignee exists, the voting percentages of all theMembers(other than theMember who has withdrawn from theCompany as aMember or hasTransferred his, her or itsInterest) shall be adjusted on aprorata basis to equal 100%, until such time as theAssignee of theInterest is admitted as a substituteMember pursuant to Section 6.3, “Substitute Members”, at which time, the voting percentages shall then be adjusted again on aprorata basis to equal 100%, taking into account such substituteMember’sInterest. AnAssignee has only those rights described in the definition ofAssignee. |
6.1.6 | If aMember who is an individual dies or a court of competent jurisdiction judges theMember to be incompetent to manage his or her person or property, |
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then theMember’s executor, administrator, guardian, conservator or other legal representative shall automatically become anAssignee of suchMember’sInterest. |
6.1.7 | TheCompany, eachMember and any otherPerson having business with theCompany need deal only with theMembers who are admitted asMembers or as substituteMembers, and they shall not be required to deal with any otherPerson by reason ofTransfer of anInterest by aMember or by reason of the death of aMember, except as otherwise provided in thisAgreement. In the absence of the substitution (as provided in Section 6.3, “Substitute Members”) of aMember for aTransferring or a deceasedMember, any payment to aMember or to aMember’s executors or administrators shall acquit theCompany of all liability to any otherPerson who may be interested in such payment by reason of aTransfer by, or the death of, suchMember. |
6.2Permitted Transfers. Except as otherwise provided in this Section, eachMember shall have the right toTransfer (and the transferee will become a substitute member upon compliance with Section 6.3, “Substitute Members”), by a written instrument, all or any part of suchMember’sInterest, if, and only if (i) theManagers have consented in writing to suchTransfer, or (ii) if aManager orAffiliate of aManager is the transferor, aMajority in Interest (determined by excluding theManager involved) has consented in writing to suchTransfer, or (iii) if theTransfer is to aPermitted Assignee. Upon the death of aMember (or upon the death of the grantor of a trust which is aMember) all or any portion of suchMember’sInterest may beTransferred by the terms of the trust that is theMember, or by will, or by the terms of a trust created during the life of aMember (or during the life of the grantor of aMember), or by any other non-probateTransfer document executed by theMember during suchMember’s life, to one or morePermitted Assignees.
6.3Substitute Members. No transferee of all or part of aMember’sInterest shall become a substituteMember in place of the transferor unless and until: the transferee has executed an instrument accepting and adopting the terms and provisions of theCertificate and thisAgreement; and the transferee has caused to be paid all reasonable expenses of theCompany in connection with the admission of the transferee as a substituteMember.
6.4Effect of Admission as a Substitute Member. A transferee who has become a substituteMember has, to the extent of theTransferredInterest, all the rights, powers and benefits of and is subject to the restrictions and liabilities of aMember under theCertificate, thisAgreement and theAct. Upon admission of a transferee as a substituteMember, the transferor of theInterest so acquired by the substituteMember shall cease to be aMember of theCompany to the extent of suchTransferredInterest.
6.5Additional Members. After the formation of theCompany, anyPerson acceptable to aMajority in Interest may become an additionalMember of theCompany for such consideration as a vote of aMajority in Interest shall determine, provided that such additionalMember complies with all the requirements of a transferee under Section 6.3, “Substitute Members”. Prior to the admission of an additionalMember, theManager may revalue theCapital Account balances of theMembers consistent with the provisions ofTreasury Regulations§ 1.704-1(b)(2)(iv)(f) and (g). No additionalMember shall be entitled to any retroactive allocation of losses, income or expense deductions incurred by theCompany.
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6.6Purchase Terms Varied By Agreement. Provided that the restrictions set forth in thisAgreement have been satisfied, nothing contained herein is intended to prohibit theMembers from agreeing upon other terms and conditions for the purchase by theCompany or any otherMember of theInterest (or any portion thereof) of anyMember desiring to retire, withdraw or resign.
ARTICLE VII
DISSOLUTION AND TERMINATION
7.1Events Causing Dissolution. TheCompany shall be dissolved upon the first to occur of the following events: i) the vote of aMajority in Interest to dissolve; or ii) the sale or other disposition of substantially all of the assets of theCompany and the receipt and distribution of all the proceeds therefrom; or iii) except as otherwise agreed upon in thisAgreement, any other event causing a dissolution of theCompany under the provisions of theAct. Upon anEvent of Withdrawal of aMember or upon the occurrence of any other event which terminates the continued membership of aMember in theCompany, theCompany shall not be dissolved and the business of theCompany shall continue. EachMember hereby specifically consents to such continuation of the business of theCompany upon theEvent of Withdrawal of anyMember. Within ninety (90) days after the occurrence of an event that terminates the continued membership of the last remainingMember, the personal representative of such last remainingMember or its nominee or designee shall be obligated to agree in writing to continue theCompany effective as of the occurrence of the event that terminated the continued membership of the last remainingMember, and such personal representative or nominee or designee shall automatically be deemed admitted as aMember, effective as of the occurrence of the event that terminated the continued membership of the last remainingMember.
7.2Notices to Secretary of State. As soon as possible following the occurrence of the events specified in Section 7.1, “Events Causing Dissolution”, above, theCompany shall file aCertificate of Cancellation with the Secretary of State of Delaware which cancels theCertificate of Formation.
7.3Cash Distributions Upon Dissolution. Upon the dissolution of theCompany as a result of the occurrence of any of the events set forth in Section 7.1, “Events Causing Dissolution”, theManagers shall proceed to wind up the affairs of and liquidate theCompany and theLiquidation Proceeds shall be applied and distributed in the following order of priority:
First, to the payment of debts and liabilities of theCompany in the order of priority as provided by law (including any loans or advances that may have been made by any of theMembers to theCompany) and the expenses of liquidation.
Second, to the establishment of any reserve which theManagers may deem reasonably necessary for any contingent, conditional or unasserted claims or obligations of theCompany. Such reserve may be paid over by theManagers to an escrow agent to be held for disbursement in payment of any of the aforementioned liabilities and, at the expiration of such period as shall be deemed advisable by theManagers, for distribution of the balance in the manner provided in this Article VII, “Dissolution and Termination”.
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Third, pro rata to theMembers in the amounts equal to their thenCapital Contributions.
Finally, the remaining balance of theLiquidation Proceeds, if any, to theMembers, pro rata in proportion to their respectivePercentage Interests.
7.4In-Kind. Notwithstanding the foregoing, in the event theManagers shall determine that an immediate sale of part or all of theProperty would cause undue loss to theMembers, or theManagers determine that it would be in the best interest of theMembers to distribute theProperty to theMembers in-kind (which distributions do not, as to the in-kind portions, have to be in the same proportions as they would be if cash were distributed, but all such in-kind distributions shall be equalized, to the extent necessary, with cash), then theManagers may either defer liquidation of, and withhold from distribution for a reasonable time, any of theProperty except that necessary to satisfy theCompany’s debts and obligations, or distribute theProperty to theMembers in-kind.
ARTICLE VIII
ACCOUNTING AND BANK ACCOUNTS
8.1Fiscal Year and Accounting Method. The fiscal year and taxable year of theCompany shall be as designated by theManagers in accordance with theCode. TheManagers shall also determine the accounting method to be used by theCompany.
8.2Books and Records. The books and records of theCompany shall be maintained at its principal place of business. TheCompany shall keep the following books and records:
A. A current and past list, setting forth in alphabetical order the full name and last known mailing address of eachMember andManager to the extent provided by theAct, which shall be provided to the Secretary of State of Delaware, without cost, upon his, her or its written request;
B. A copy of theCertificate and amendments thereto together with executed copies of any powers of attorney pursuant to which theCertificate or any amendments have been executed;
C. Copies of theCompany’s federal, state and local income tax returns and reports, if any, for the three most recent years or, if such returns and reports were not prepared for any reason, copies of the information and records provided to, or which should have been provided to, theMembers to enable them to prepare their federal, state and local tax returns for such period;
D. Copies of thisAgreement, and all amendments thereto, and copies of any written operating agreements no longer in effect together with executed copies of any powers of attorney pursuant to which such documents have been executed;
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E. Copies of any financial statements of theCompany for the three (3) most recent years;
F. Copies of writings setting out the amount of cash and a statement of the agreed value of other property or services contributed or agreed to be contributed by eachMember;
G. Copies of any written promise by aMember to make a contribution to theCompany;
H. Copies of any written consents by theMembers to the admission of anyPerson as aMember of theCompany; and
I. Copies of any other instruments or documents reflecting matters required to be in writing pursuant to thisAgreement.
EachMember (or suchMember’s designated representative) shall have the right during ordinary business hours and upon reasonableNotice to inspect and copy (at suchMember’s own expense) the books and records of theCompany required to be kept by Section 8.2, “Books and Records”, hereof.
8.3Books and Financial Reports. Proper and complete records and books of account shall be kept by theManagers in which shall be entered all transactions and other matters relative to theCompany business. TheCompany’s books and records shall be prepared in accordance with generally accepted accounting principles, consistently applied. TheCompany shall have prepared at least annually, at theCompany’s expense, financial statements (balance sheet, statement of income or loss,Members’ equity, and changes in financial position) prepared in accordance with generally accepted accounting principles. Copies of such statements and any accompanying report shall be distributed to theMembers within 120 days after the close of each taxable year of theCompany or as soon thereafter as possible.
8.4Tax Returns and Elections. TheCompany shall cause to be prepared and timely filed all federal, state and local income tax returns or other returns or statements required by applicable law. As soon as reasonably practicable after the end of each fiscal year of theCompany, theCompany shall cause to be prepared and delivered to eachMember all information with respect to theCompany necessary for theMember’s federal and state income tax returns.
8.5 Bank Accounts. All funds of theCompany shall be deposited in a separate bank, money market or similar account(s) approved by theManagers and in theCompany’s name. Withdrawals there from shall be made only byPersons authorized to do so by theManagers.
Article IX
DISPUTE RESOLUTION
9.1Disputes. Any and allDisputes between or among theParties hereto shall be resolved pursuant to this Article IX, “Dispute Resolution” and Exhibit 9.1, “Arbitration”. In the event aParty believes any otherParty is in breach of the terms hereof for any reason(s), it shall provide written notice of such purported breach(es) describing such breach(es) with particularity
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(in fact and in legal impact) and the purported breaching Party shall be granted thirty (30) days from its actual receipt of such notice to cure said breach(es) if it concurs that the complaint(s) constitutes a breach(es) hereof, and if so cured by the purported breaching Party, the breach(es) shall be deemed to have never occurred.
In the event theParties cannot agree as to whether the complaint(s) constitutes a breach(es) of the terms hereof, and the purported breachingParty does not elect to undertake the expense of resolving the complaint(s), then theParties agree to submit the facts toArbitration pursuant to the subsequent Sections of this Article IX “Dispute Resolution”, and Exhibit 9.1, “Arbitration”. If theArbitrator determines any action or inaction of the purported breachingParty in fact constitutes a breach(es) of the terms hereof, then the breachingParty shall have thirty (30) days from the date theArbitrator’s decision becomes final to cure said breach(es), and if so cured by the breachingParty, shall be deemed to have never occurred. In no event shall the remedy of termination or cancellation of thisAgreement be employed; and, unless specified otherwise herein to the contrary, aParty shall not be responsible for punitive or consequential damages for a breach of thisAgreement.
9.2Payment Cures. Unless expressly specified otherwise herein to the contrary, a breachingParty shall only be obligated to the non-breachingParty for said non-breachingParty’s actual damages (plus interest at two (2) points above thePrime Ratefrom the date of the occurrence or loss) proximately caused by the breach of theAgreement. In the alternative, theParty alleged to be in default may place the disputed amount in an interest-bearing,Third Party escrow account, and theParty ultimately determined to be entitled to such amount shall receive the interest accrued thereon in such escrow account.
9.3Enforceable At Law And In Equity. It is stipulated that theParties’ agreement to arbitrate shall be enforceable via specific performance and/or injunctive relief from any court and/orGovernmental Authority with jurisdiction. The award and judgment rendered by theArbitrator shall be final and conclusive, and theParties stipulate that legal and/or equitable judgment may be entered upon jurisdiction in accordance with theArbitration Act and/or any court and/orGovernmental Authority with jurisdiction. Such judgment shall also be binding and fully enforceable upon theParties via any and allGovernmental Authority(s) have jurisdiction.
9.4Governing Law. ThePartiesattorn to the State of Delaware and mutually agree that thisAgreement shall be construed in accordance with the generalLaws of the State of Delaware. ThisAgreement shall be construed according to and governed by the laws of the State of Delaware.
9.5Invalidity In Part. If any provision of thisAgreement and/or the application thereof to anyParty or any circumstance shall be found to be contrary to, or inconsistent with or unenforceable under any jurisdictionally applicableLaw, theLaw shall control and theAgreement shall be deemed modified accordingly, but in other respects the same shall continue in full force and effect subject to the modifications necessary to preserve the intent and considerations due theParties as set forth in the subsequent sentence. The generalLaws of the State of Delaware shall be invoked duringArbitration regardingDisputes.
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9.6Cy-Pres. It is the express intention of theParties hereto that thisAgreement not be invalidated by the current or future existence of a jurisdictionally applicableLaw, known or unknown; but rather it is the intention of theParties that the principle ofCy-Pres apply in the event part or all of thisAgreement is so invalidated; and further that thisAgreement shall be reconstituted and enforceable by theParties hereto, their successor and/or assigns in such a manner so as to fully carry out, implement and execute the intentions of theParties and provide the mutual considerations contemplated by theParties hereto.
ARTICLE X
MISCELLANEOUS
10.1Notice. All required notices and other correspondence required or made necessary by the terms of this Agreement shall be delivered to the respective parties hereto by registered mail, return receipt requested at the following addresses:
Tommy G. Thompson: | 3101 North Hampton Drive, #1611 | |
Alexandria, VA 22302 | ||
Gerald L. Murphy: | 4707 E. 21st St. | |
Tulsa, OK 74117 | ||
Telefax: (918) 712-0055 | ||
Dennis M. Langley: | 5225 Renner Road | |
Shawnee, KS 66217 | ||
Telefax: (913) 962-6517 |
Or to such addresses as any party hereto may unilaterally designate in writing to the other parties. Duplicate notices may also be given by any of the following forms: telegram, telex, telecopy and/or personal delivery. A notice shall be deemed received when the first form of notice or duplicate notice is actually received by the party to whom it is addressed.
10.2Further Assurances. The parties hereby agree to execute acknowledge and deliver to each other any further writings, documents, consents, waivers, releases, contracts, liens, mortgages, assignments, acknowledgements, guarantees, transfers acknowledgements, instruments, powers of attorney, authorizations, filings, applications, reports, etc. that may be reasonably required to give full force and effect to the provisions of this Agreement, and to take such further actions reasonably required in fulfillment of obligations set forth herein or in furtherance of the intent hereof.
10.3Title to Property; No Partition. Title to theProperty shall be held in the name of theCompany. NoMember shall individually have any ownership interest or rights in theProperty except indirectly by virtue of suchMember’s ownership of anInterest. NoMember shall have any right to any specific assets of theCompany upon the liquidation of, or any distribution from, theCompany. TheMembers agree that theProperty is not and will not be suitable for partition. Accordingly, each of theMembers hereby irrevocably waives any and all right suchMember may have to maintain any action for partition of any of theProperty.
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10.4Waiver of Default. No consent or waiver, express or implied, by theCompany or aMember with respect to any breach or default by theCompany or aMember hereunder shall be deemed or construed to be a consent or waiver with respect to any other breach or default by any party of the same provision or any other provision of thisAgreement. Failure on the part of theCompany or aMember to complain of any act or failure to act of theCompany or aMember or to declare such party in default shall not be deemed or constitute a waiver by theCompany or theMember of any rights hereunder.
10.5Amendment. Except as otherwise expressly provided elsewhere in thisAgreement, thisAgreement shall not be altered, modified or changed except by an amendment approved by theRequisite Voting Majority In Interest. In addition to any amendments otherwise authorized herein, amendments may be made to thisAgreement from time to time by theManagers without the consent of theMembers (i) to cure any ambiguity or to correct or supplement any provision herein which may be inconsistent with any other provision herein or (ii) to delete or add any provisions of thisAgreement required to be so deleted or added by federal, state or local law or by the Securities and Exchange Commission, the Internal Revenue Service, or any other Federal agency or by a state securities or “blue sky” commission, a state revenue or taxing authority or any other similar entity or official.
10.6No Third Party Rights. None of the provisions contained in thisAgreement shall be for the benefit of or enforceable by any third parties, including creditors of theCompany. The parties to thisAgreement expressly retain any and all rights to amend thisAgreement as herein provided, notwithstanding any interest in thisAgreement or in any party to thisAgreement held by any otherPerson.
10.7Severability. In the event any provision of thisAgreement is held to be illegal, invalid or unenforceable to any extent, the legality, validity and enforceability of the remainder of thisAgreement shall not be affected thereby and shall remain in full force and effect and shall be enforced to the greatest extent permitted by law.
10.8Nature of Interest in the Company.AMember’sInterest shall be personal property for all purposes.
10.9Binding Agreement. Subject to the restrictions on the disposition ofInterests herein contained, the provisions of thisAgreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, personal representatives, successors and permitted assigns.
10.10Counterparts. ThisAgreement may be executed in several counterparts, all of which together shall constitute one agreement binding on all parties hereto, notwithstanding that all the parties have not signed the same counterpart.
10.11Entire Agreement. ThisAgreement contains the entire agreement between the parties and supersedes all prior writings or agreements with respect to the subject matter hereof.
10.12Representations and Acknowledgments. EachMember does hereby represent and warrant by the signing of a counterpart of thisAgreement that theInterest acquired by him, her or it was acquired for his, her or its own account, for investment only, and not for the benefit
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of any otherPerson, and not for resale to any otherPerson or future distribution, and that he, she or it has relied solely on the advice of his, her or its personal tax, investment or other advisor(s) in making his, her or its investment decision. TheManagers have not made and hereby make no warranties or representations other than those set forth in thisAgreement. EachMember acknowledges and agrees that the firm of Bryan Cave LLP has represented theCompany and not anyMember individually. EachMember acknowledges and agrees that suchMember has been advised to seek separate counsel with respect to theCompany, thisAgreement and all matters pertaining thereto.
10.13Non Disclosure. EachMember for itself and on behalf of itsAffiliates agrees to keep the provisions of thisAgreement and all exhibits, appendices and exhibits hereto in confidence except pursuant to the requirements of applicable law and shall not publish or otherwise disclose the same at any time without the prior written consent of all theMembers.
10.14Buy/Sell Agreement. TheMembersare entering into aBuy/Sell Agreementas more particularly set forth in Exhibit 10.14, “Buy/Sell Agreement”, hereto, the terms of which are incorporated herein.
Remainder of page left intentionally blank. Signature page to follow.
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IN WITNESS WHEREOF, the parties hereto have caused thisAgreement to be duly executed as of the date first written above or consent to and ratify the terms hereof as if executed on such date.
MEMBERS |
/s/ Tommy G. Thompson |
Tommy G. Thompson |
/s/ Gerald L. Murphy |
Gerald L. Murphy |
/s/ Dennis M. Langley |
Dennis M. Langley |
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EXHIBIT 1.1 – GLOSSARY
The terms of theGlossary have been incorporated by reference into theAgreement and Exhibits thereto pursuant to Section 1.1, “Glossary and Interpretation”, thereof, and thisGlossary is attached as Exhibit 1.1 to theAgreement.
Act.Act means the Delaware Limited LiabilityCompany Act, Title 6, Chapter 18, DelawareCode Annotated, as amended from time to time.
Affiliate.Affiliate of a specifiedPerson (the “Specified Person”) means anyPerson (a) who directly or indirectly controls, is controlled by, or is under common control with theSpecified Person; (b) who owns or controls ten percent (10%) or more of theSpecified Person’s outstanding voting securities or equity interests; (c) of whom suchSpecified Person owns or controls ten percent (10%) or more of the outstanding voting securities or equity interests; (d) who is a director, partner, manager, executive officer or trustee of theSpecified Person; (e) in whom theSpecified Person is a director, partner, manager, executive officer or trustee; or (f) who has any relationship with theSpecified Person by blood, marriage or adoption, not more remote than first cousin.
Agreement.Agreement means this Limited LiabilityCompany Agreement, as amended or restated from time to time.
Assignee.Assignee means anyPerson who is the holder of anInterest but is not then aMember. AnAssignee shall not be entitled to participate in the management of the business and affairs of theCompany or to become or to exercise the rights of aMember, including the right to vote, the right to require any information or accounting of theCompany’s business or the right to inspect theCompany’s books and records. AnAssignee shall only be entitled to receive, to the extent of theInterest held by suchAssignee, the share of distributions and profits, including distributions representing the return ofCapital Contributions, to which the transferor would otherwise be entitled with respect to theTransferredInterest. AnAssignee shall not have the right to vote his, her or itsTransferredInterest until the transferee is admitted to theCompany as a substituteMember with respect to theTransferredInterest.
Capital Contribution.Capital Contribution means the total amount of cash, other property, services rendered, a promissory note or other obligation to contribute cash or property or perform services. Any reference in thisAgreement to theCapital Contribution of aMember shall include theCapital Contribution made by any predecessor holder of theInterest of thatMember.
Certificate of Formation orCertificate.Certificate of Formation orCertificate means theCertificate of Formation of theCompany filed with the Secretary of State of Delaware, as amended or restated from time to time.
Code.Codemeans the Internal RevenueCode of 1986, as amended from time to time, including the rules and regulations promulgated thereunder.
Company.Companymeans T2 Consulting, LLC.
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Event of Withdrawal.Event of Withdrawalmeans an event that causes aPerson to cease to be aMember as provided in theAct which events include, but are not limited to, (a) voluntary withdrawal to the extent permitted by Section 6.1, “General Restrictions”, (b) assignment (in accordance with the provisions of thisAgreement) of all of aMember’sInterest, (c) the making of an assignment for the benefit of creditors, (d) being subject to Bankruptcy (as defined in Section 18-304 of theAct), (e) appointment of a trustee or receiver for theMember or for all or any substantial part of his, her or its property, (f) in the case of aMember who is a natural person (1) his or her death, (2) his or her retirement, or (3) the entry by a court of competent jurisdiction adjudicating him or her incompetent to manage his or her person or estate, (g) in the case of aMember that is a trust (1) the termination of the trust or (2) a distribution of its entireInterest but not merely the substitution of a new trustee, (h) in the case of aMember that is a general or limited partnership (1) the dissolution and commencement of winding up of the partnership or (2) a distribution of its entireInterest, (i) in the case of aMember that is a corporation (1) the filing of articles of dissolution or their equivalent for the corporation, (2) a revocation of its charter or (3) a distribution of its entireInterest, (j) in the case of aMember that is an estate the distribution by the fiduciary of the estate’s entireInterest, (k) in the case of aMember that is a limited liability company (1) the filing of articles of dissolution or termination or their equivalent for a limited liability company or (2) a distribution of its entireInterest, or (l) in the case of aMember that is a limited partnership (1) the filing of articles of dissolution or termination or their equivalent for a limited partnership or (2) a distribution of its entireInterest.
Initial Managers.Initial Managershas the meaning set forth in Section 4.4, “Number, Appointment, Tenure and Election of Managers”.
Interest.Interestrefers to all of aMember’s (or anAssignee’s) rights and interests in theCompany in suchMember’s (orAssignee’s) capacity as aMember (or anAssignee), all as provided in theCertificate, thisAgreement and theAct together with the obligations of suchMember (orAssignee) to comply with all the terms and provisions of theAgreement and theAct.
Liquidation Proceeds.Liquidation Proceedsmeans allProperty at the time of liquidation of theCompany and all proceeds thereof.
Managers.Managersmeans thePersons designated or elected from time to time pursuant to thisAgreement as managers of theCompany, acting in their capacity asManagers.
Members.Members means thosePersons executing thisAgreement as members of theCompany, including any substituteMembers or additionalMembers, in each suchPerson’s capacity as aMember of theCompany.
Net Cash Flow.Net Cash Flowmeans, with respect to any fiscal period, all operating and investment revenues during such period and any amounts theretofore held in any reserve which theManagers determine need not be held any longer in reserve, all determined in accordance with theCompany’s method of accounting, lessOperating Expenses.
Notice.Notice means a writing, containing the information required by thisAgreement to be communicated to aPerson in accordance with Section 10.1, “Notice”.
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Operating Expenses.Operating Expensesmeans, with respect to any fiscal period, (a) to the extent paid other than with cash withdrawn from reserves therefore, the amount of cash disbursed in such period in order to operate theCompany and to pay all expenses (including, without limitation, management fees, wages, taxes, insurance, repairs, and/or other costs and expenses) incident to the ownership or operation of theProperty or theCompany and (b) the amount of any reserves created during such period or the amount of any increase in any existing reserve, as provided in Section 2.3, “Preemptive Rights”.
Percentage Interest.Percentage Interestof aMember means, at any particular time, a ratio, expressed as a percentage, which is the ratio that theCapital Contribution of suchMember bears to the totalCapital Contributions of allMembers.
Permitted Assignee.Permitted Assigneemeans (i) anyMember orMember’sAffiliate, (ii) the settlor of a trust that is aMember, or (iii) any trust for the benefit of, in part or in whole, aMember, aMember’s spouse or any of aMember’s descendants, and/or step children, so long as, in each case, each trustee entitled to vote there under is also either aMember or a settlor of a trust that is aMember.
Person.Personmeans any natural person, partnership (whether general or limited), trust, estate, association, corporation, custodian, nominee or any other individual or entity in its own or any representative capacity, in each case, whether domestic or foreign, or a limited liability company or foreign limited liability company.
Property.Propertymeans all properties and assets that theCompany may own or otherwise have an interest in from time to time.
Requisite Voting Majority in Interest.Requisite Voting Majority in Interestmeans any individualMember or group ofMembers holding an aggregate of more than 70% of thePercentage Interests held by allMembers.
Transfer.Transfermeans (a) when used as a verb, to give, sell, exchange, assign, transfer, pledge, hypothecate, bequeath, devise or otherwise dispose of or encumber, and (b) when used as a noun, the nouns corresponding to such verbs, in either case voluntarily or involuntarily, by operation of law or otherwise
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EXHIBIT 2.1 - MEMBERS
Name | Initial Capital Contribution | Percentage Interest | ||||
Tommy G. Thompson | $ | 5,000 | 33.33 | % | ||
Gerald L. Murphy | $ | 5,000 | 33.33 | % | ||
Dennis M. Langley | $ | 5,000 | 33.34 | % | ||
$ | 15,000 | 100 | % |
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EXHIBIT 2.4 - TAXES
1. | Definitions. |
“Capital Account” means a separate account established by theCompany and maintained for eachMember in accordance with this Exhibit 2.4, “Taxes”.
“Member’s Share of Company Minimum Gain” means an amount determined (i) in accordance with rules applicable to partnerships in Treasury Regulation Section 1.704 2(g) with respect to a nonrecourse liability of theCompany in which noMember bears the economic risk of loss and (ii) in accordance with rules applicable to partnerships in Treasury Regulation Section 1.704-2(i) with respect to a nonrecourse liability of theCompany in which anyMember bears any portion of the economic risk of loss.
“Minimum Gain” means the amount of gain, if any, as set forth in rules applicable to partnerships inTreasury Regulations Section 1.704-2(d) that would be realized by theCompany if it disposed of (in a taxable transaction) property subject to a nonrecourse liability of suchCompany, in full satisfaction of such liability (and for no other consideration).
“Profits and Losses For Tax Purposes” means, for accounting and tax purposes, the various items with respect to partnerships set forth in Section 702(a) of theCode and all applicable regulations, or any successor law, and shall include, but not be limited to, items such as capital gain or loss, tax preferences, credits, depreciation, other deductions and depreciation recapture.
“Treasury Regulations” means the regulations promulgated by the Treasury Department with respect to theCode, as such regulations are amended from time to time, or corresponding provisions of future regulations.
2. | Maintenance ofCapital Accounts. |
TheCompany shall maintain for eachMember a separate account (“Capital Account”) in accordance with the rules applicable to partnerships in Treasury Regulation 1.704 1(b)(2)(iv) or any successorTreasury Regulations which by their terms would be applicable to theCompany. NoMember shall be entitled to receive or be credited with any interest on the balance of suchMember’s Capital Account at any time.
3. | Allocation ofProfits and Losses For Tax Purposes. |
Except as otherwise provided inSection 2.7, “Allocation of Profits and Losses for Tax Purposes and Special Allocations”, of this Exhibit 2.4, “Taxes”, all Profits and Losses for Tax Purposes of theCompany shall be allocated among theMembers in accordance with their respectivePercentage Interests.
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4. | Special Allocations. |
4.1 Notwithstanding any other provisions of thisAgreement to the contrary, if the amount of any Minimum Gain at the end of any taxable year is less than the amount of such Minimum Gain at the beginning of such taxable year, there shall be allocated to eachMember gross income or gain (in respect of the current taxable year and any future taxable year) in an amount equal to suchMember’s share of the net decrease in Minimum Gain during such year in accordance with Treasury Regulation Section 1.704 2(f). Such allocation of gross income and gain shall be made prior to any other allocation of income, gain, loss, deduction or Section 705(a)(2)(B) expenditure for such year. Any such allocation of gross income or gain pursuant to this Section 4.1 shall be taken into account, to the extent feasible, in computing subsequent allocations of income, gain, loss, deduction or credit of theCompany so that the net amount of all items allocated to eachMember pursuant to this paragraph shall, to the extent possible, be equal to the net amount that would have been allocated to each suchMember pursuant to the provisions of this paragraph if the allocations made pursuant to the first sentence of this paragraph had not occurred. This provision is intended to be a minimum gain chargeback as described in Treasury Regulation Section 1.704 2(f) and shall be interpreted consistent therewith.
4.2 Notwithstanding any other provisions of thisAgreement to the contrary, except as provided in Section 4.1 above of this Exhibit 2.4, “Taxes”, if there is a net decrease (as determined in accordance with Treasury Regulation Section 1.704 2(i)(3)) during a taxable year in Minimum Gain attributable to a non recourse debt of theCompany for which anyMember bears the economic risk of loss (as determined accordance with Treasury Regulation Section 1.704-2(b)(4)), then anyMember with a share of the Minimum Gain (as determined in accordance with Treasury Regulation Section 1.704 2(i)(5)) attributable to such debt (determined at the beginning of such taxable year) shall be allocated in accordance with Treasury Regulation Section 1.704 2(i)(4) items ofCompany income and gain for such taxable year (and, if necessary, for subsequent years) in an amount equal to suchMember’s share of the net decrease in the Minimum Gain attributable to suchMember in accordance with Treasury Regulation Section 1.704 2(i). Any allocations of items of gross income or gain pursuant to this paragraph shall not duplicate any allocations of gross income or gain pursuant toSection 2.7, “Allocation of Profits and Losses for Tax Purposes and Special Allocations” of this Exhibit 2.4, “Taxes” and shall be taken into account, to the extent feasible, in computing subsequent allocations of theCompany, so that the net amount of all items allocated to eachMember pursuant to this paragraph shall, to the extent possible, be equal to the net amount that would have been allocated to eachMember pursuant to the provisions of this paragraph if the allocations made pursuant to the first sentence of this paragraph had not occurred. This provision is intended to be a partner minimum gain chargeback as described in Treasury Regulation Section 1.704 2(i)(4) and shall be interpreted consistent therewith.
4.3 Notwithstanding any other provisions of thisAgreement to the contrary, except as provided in Sections 4.1 and 4.2 of this Exhibit 2.4, “Taxes”, if anyMember unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulation Section 1.704 1(b)(2)(ii)(d)(4), (5) or (6) that reduces anyMember’s Capital Account below zero or increases the negative balance in suchMember’s Capital Account (taking into account suchMember’s deficit restoration obligation), gross income and gain shall be allocated to suchMember in an amount and manner sufficient to eliminate any negative balance in suchMember’s
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Capital Account (taking into account suchMember’s deficit restoration obligation) created by such adjustments, allocations or distributions as quickly as possible in accordance with Treasury Regulation Section 1.704 1(b)(2)(ii)(d). Any such allocation of gross income or gain pursuant to this paragraph shall be in proportion with such negativeCapital Accounts of theMembers. Any allocations of items of gross income or gain pursuant to this paragraph shall not duplicate any allocations of gross income or gain made pursuant to Section 4.1 or 4.2 of this Exhibit 2.4, “Taxes” and shall be taken into account, to the extent feasible, in computing subsequent allocations of income, gain, loss, deduction or credit, so that the net amount of all items allocated to eachMember pursuant to this paragraph shall, to the extent possible, be equal to the net amount that would have been allocated to each suchMember pursuant to the provisions of this paragraph if such adjustments, allocations or distributions had not occurred. This provision is intended to be a qualified income offset as described in Treasury Regulation Section 1.704 1(b)(2)(ii)(d) and shall be interpreted consistent therewith.
4.4 Any item ofCompany loss, deduction or Section 705(a)(2)(B) expenditure that is attributable to a non recourse debt of theCompany for which anyMember bears the economic risk of loss (as determined in accordance with rules applicable to partnerships in Treasury Regulation Section 1.704-2(b)(4)) shall be allocated to suchMember in accordance with Treasury Regulation Section 1.704 2(i).
4.5 In accordance with Section 704(c) and the Regulations thereunder, if property is contributed to theCompany and the fair market value of such property on the date of its contribution differs from the adjusted tax basis of such property, any income, gain, loss and deduction with respect to such property shall, solely for tax purposes, be allocated among theMembers so as to take into account any variation between the adjusted tax basis to theCompany of such property for federal income tax purposes and the fair market value of such property on the date of contribution to theCompany. Such allocations shall be made using a reasonable method that is consistent with the purpose of Section 704(c) of theCode pursuant to Treasury Regulation Section 1.704-3.
5. | Persons Entitled to Allocations. |
With respect to any period in which a transferee of the interest of aMember is first entitled to a share of the Profits And Losses For Tax Purposes, theCompany shall, with respect to such Profits And Losses For Tax Purposes, allocate such items among thePersons who were entitled to such items on a basis consistent with the provisions of theCode and theTreasury Regulations.
6. | Tax Matter Member. |
Until otherwise determined by aMajority in Interest, Dennis Langley is hereby designated as theCompany’s “Tax MattersMember,” which shall have the same meaning as “tax matters partner” under theCode, and in such capacity is hereby authorized and empowered to act for and represent theCompany and each of theMembers before the Internal Revenue Service and any court with respect to any audit or examination of anyCompany tax return and before any court and to retain such experts (including, without limitation, outside counsel or accountants) as deemed necessary. The Tax MattersMember shall keep allMembers fully informed of the
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progress of any examination of, audit of or other proceeding related to the affairs of theCompany. EachMember and formerMember agrees to cooperate with the Tax MattersMember and to do or refrain from doing any or all things reasonably required by theMembers in connection with the conduct of such proceedings.
7. | Negative Balance. |
NoMember with a negative balance in suchMember’s Capital Account shall have any obligation to theCompany or any otherMember to restore said negative balance to zero.
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EXHIBIT 9.1 - ARBITRATION
This Exhibit 9.1, “Arbitration”, is to that particularAgreement among the Tommy Thompson, Gerald L. Murphy and Dennis M. Langley dated the 28th day of February, 2005. The terms of this Exhibit 9.1, “Arbitration”, and theAgreement are hereby incorporated into one another. AllDisputes between or among theMembersand theirAffiliated Entities(including their officers, directors, and shareholders,), regardless of the nature thereof, which have not been resolved by theMembersprior toArbitration as described in Article IX, “Dispute Resolution”, of theAgreement, shall be submitted toArbitration (pursuant to the terms of theAgreement and this Exhibit thereto) under the rules and procedures of the American Arbitration Association unless theParties mutually agree in writing otherwise. TheMembers (including their officers, directors, and shareholders,) expressly stipulate all suchDisputes, which have not been resolved by theMembers (including their officers, directors, and shareholders,) or cured pursuant to Article IX, “Dispute Resolution”, of theAgreement shall be submitted toArbitration hereunder. It is the expressed intent of theMembers (including their officers, directors, and shareholders,) hereto, to theAgreement that any and allDisputeswhich may arise between or among theMembersand theirAffiliated Entity(s) (including their officers, directors, and shareholders,) shall either be resolved or cured pursuant to Article IX, “Dispute Resolution”, of theAgreement or be submitted to and determined byArbitration,even if the Disputearises extrinsic of the Termof theAgreement.
A. | ARBITRATION NOTICE. Notice of the demand for Arbitration (as provided for in Article IX “Dispute Resolution”, of the Agreement shall be filed in writing with the other Member(s) to the Agreement. The demand for Arbitration shall be made within a reasonable time [not less than ten (10) days and not more than sixty (60) days] after the notice is received. In no event shall notice be given after the date when the institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations or the terms of the Agreement. |
B. | CHOOSING AN ARBITRATOR. TheMembers shall select one (1) mutually agreed uponArbitrator to sit during theArbitration proceedings and render judgment thereon. If theMembers are unable to mutually agree upon anArbitrator within ten (10) days of eitherParty filing a claim under thisArbitration Exhibit, (or later if by mutual agreement) then theArbitrator shall be selected by the Federal District Court in Kansas City, Kansas, but shall be a lawyer or judge with a background in energy and utility law. |
C. | LOCATION OF HEARING. ActualArbitration hearings shall take place in Kansas City, Kansas, unless otherwise mutually agreed to, in writing. |
D. | PRESENTATION OF ARGUMENTS. All arguments must be presented in no more than thirty (30) days after the start of theArbitration hearings. Failure to present arguments within the time allotted shall be considered a default only in respect to the matter presented forArbitration. If anyMemberso defaults, it hereby agrees to forfeit all other remedies available to it in law, equity or otherwise for the matter being arbitrated only. |
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E. | RENDERING OF DECISION. After each side rests in theArbitration hearing, the decision of theArbitrator must be rendered in writing within ten (10) days, however, a decision rendered extrinsic of such time frame shall be valid and binding on theMembers. If eitherMemberbelieves the decision to be ambiguous or unclear in any manner, it shall submit its questions in writing to theArbitrator and to the otherMember which may elect to submit comments on the questions in writing to theArbitrator and to the questioningParty within ten (10) days, and theArbitrator shall respond thereto in writing within ten (10) days of their receipt of the later of the questions or the comments on the questions. |
F. | REMEDIES AND RULES OF CONSTRUCTION. In theArbitration of anyDispute between theMembers hereto (including their officers, directors, and shareholders), theArbitrator is expressly instructed and restricted as follows: |
1. | Absent an expressed written statement(s) herein and/or in any relevant and applicableAgreement(s)to the contrary, the terms of any relevantAgreement(s) may not be revised, rewritten or modified by theArbitrator (such terms can only be interpreted in accordance with the guidelines and directives herein contained). |
2. | TheArbitrator is requested to seek to determine the intent of each of theMembers and to the extent that intent can be achieved without interfering with the intent of the otherMember(s) or the terms of theAgreement, the intent of theMembers may be harmonized in theArbitrator’s ruling. |
3. | The common law principle of legal construction that the document is to be strictly construed against the drafting party is expressly waived by theMembers hereto (including their officers, directors, and shareholders), and theArbitrator is expressly instructed not to apply such principle in his/her deliberations. |
4. | TheArbitrator must resolve the conflict; i.e., theArbitrator may not allow the conflict to remain unresolved. |
5. | Arbitrator may not deliver a decision which is arbitrary, capricious or which revises, rewrites or ignores the terms of thisAgreement, and if he/she does so, the decision may be submitted for review to the Court, which is hereby requested to overturn, revise and/or remand the same. |
6. | The award and judgment rendered by theArbitrator shall be final and conclusive, and the parties stipulate that legal and/or equitable judgment may be entered upon it in any court having jurisdiction. It is also stipulated and agreed and the specific intent of theMembers hereto that termination of theAgreement shall not be a remedy available to anyMember. TheArbitrator or the Court specifically may not order termination of theAgreement in rendering its decision. |
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7. | It is stipulated that this agreement to arbitrate shall be enforceable via specific performance and/or injunctive relief. It is also stipulated and agreed that theArbitrator in rendering his/her decision shall be authorized to order the future specific performance of the terms of any and allAgreement(s), and in the same decision award aMember(s) monetary damages as to the failure of the otherMember(s) to perform its previous obligations to the otherMember(s). |
8. | AnyMember(s) shall be entitled to the pre and post judgment remedy of attaching or offsetting funds in order to pay any amount due or owing to it by the otherMember(s)pursuant to theAgreement. If the pre and/or post judgment, self-help remedy of attaching or offsetting income is disputed it shall be decided as otherDisputes between or among theMembers, with no penalty(s) being awarded for the use of pre and/or post judgment, self-help remedies, even if the use thereof is held to have been in error. |
G. | COSTS OF ARBITRATOR. AllCosts of Arbitration shall be borne by the losingMember(s). The losingMember(s) shall be theMember(s) designated as such by theArbitrator. In the event certainMembers prevail on certain issues and lose on others, the cost ofArbitration shall be apportioned between theMembers in any manner theArbitrator orders.Costs of Arbitration include, but are not limited to the following with interest thereon from the date such expenses are accrued, to wit: i) expenses and fees of theArbitrator; ii) legal expenses of theMembers during the course of and in preparation forArbitration and/or involving or enforcing the processArbitration and/or enforcing the decision or judgment of theArbitrator via legal proceedings; iii) travel and out-of-pocket expenditures of anyMember in preparation forArbitration; and iv) accounting, professional and/or expert witness fees actually expended by anyMember in preparation for or during the course ofArbitration. In the event there is any dispute regarding what constitutes anArbitration expense or the reasonableness of a particular item of expense submitted, theArbitrator shall resolve the same. |
H. | APPLICATION OF ARBITRATION ACT. Except as herein expressly provided, the provisions of theArbitration Actshall apply; and wherever and whenever there is a conflict between the provisions of theArbitration Actand theAgreement(s), the provisions of the relevantAgreement(s) shall prevail. |
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EXHIBIT 10.14 – BUY/SELL AGREEMENT
Buy/Sell Option. AnyMember may, at any time after the second anniversary of the date of thisAgreementand for any reason, advise the otherMembers that suchMember(theNotifying Party) is electing to require the otherMembers(theReceiving Party) to either purchase thePercentage Interestof theNotifying Memberor, if theReceiving Partydoes not so elect to purchase itsPercentage Interest, sell itsPercentage Interestto theNotifying Party.
Contents of Notice by Notifying Party. TheNotifying Party shall concurrently give theCompanyand theReceiving Partywritten notification of its intent to exercise its rights under Section 10.14, “Buy/Sell Agreement”, of theAgreement. Such written notification shall not be deemed validly given unless it shall set forth at least the following:
(a) | The price and terms which theNotifying Partyis establishing for the purchase or sale of itsPercentage Interest; and |
(b) | The date, which shall not be more than ninety (90) days subsequent to the date of the written notice, on which theNotifying Partywill close acquisition of thePercentage Interestowned by theReceiving Partyif theReceiving Partydoes not purchase thePercentage Interestowned by theNotifying Party. |
Response by Other Party. Within thirty (30) days after receipt of the written notice from theNotifying Party, theReceiving Partymay, by notice to theNotifying Party and theCompany, elect to purchase thePercentage Interestowned by theNotifying Party for the purchase price (on a percentage point basis) set forth in theNotifying Party’s written notice. The election by theReceiving Partyto purchase thePercentage Interest owned by theNotifying Party shall specify a date for the closing of the purchase, which date shall not be more than ninety (90) days after the date of theNotifying Party’s notice.
Purchase of Percentage Interest. If theReceiving Party does not elect to purchase thePercentage Interestowned by theNotifying Partyfor the purchase price set forth in theNotifying Party’swritten notice, theReceiving Party shall be deemed to have conclusively elected to sell itsPercentage Interest for the per percentage purchase price set forth in theNotifying Party’s written notice and theNotifying Partyshall be obligated to purchase theReceiving Party’s Percentage Interest at the per percentage price and terms set forth in said notice. Such purchase by theNotifying Partyof thePercentage Interestowned by theReceiving Partyshall take place on the date designated in theNotifying Party’s written notice.
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EXHIBIT 2.1.A.
FORM OF CAREVIEW WARRANT
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NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE REGISTERED HOLDER OF THIS WARRANT HAS AGREED THAT NO SALE, PLEDGE OR OTHER TRANSFER OF THIS WARRANT OR ANY OF SAID SHARES MAY BE MADE WITHOUT REGISTRATION UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW, UNLESS THE HOLDER SHALL DELIVER TO THE ISSUER AN OPINION (IN FORM SATISFACTORY TO THE ISSUER) OF COUNSEL SATISFACTORY TO THE ISSUER THAT NO SUCH REGISTRATION IS REQUIRED.
CAREVIEW COMMUNICATIONS, INC.
COMMON STOCK PURCHASE WARRANT
Date: , 20 | Shares |
This certifies that, for value received, , an individual, or assigns, is entitled, subject to the terms and conditions hereinafter set forth, at or before 5:00 p.m., New York time, on the date five (5) years after the date of this Warrant (the “Termination Date”), but not thereafter, to purchase up to shares (the “Shares”) of Common Stock, par value $0.001 per share (“Common Stock”), of CareView Communications, Inc., a Nevada corporation (the “Company”). The purchase price payable upon the exercise of this Warrant shall initially be $ per share (the “Warrant Price”).
Upon delivery of this Warrant with written notice of exercise duly executed in form and substance reasonably satisfactory to the Company, together with payment of the Warrant Price for the shares of Common Stock thereby purchased, at the principal office of the Company or at such other address as the Company may designate by notice in writing to the registered holder hereof (the “Holder”), the Holder shall be entitled to receive a certificate or certificates for the Shares so purchased. All Shares issued upon the exercise of this Warrant will, upon issuance, be fully paid and nonassessable and free from all taxes, liens and charges with respect thereto.
This Warrant is subject to the following terms and conditions:
Section 1. Term of Warrant; Exercise of Warrant
Subject to the terms of this Warrant, the Holder shall have the right, at any time during the period commencing at 9:00 a.m., New York time, on the date hereof, until 5:00 p.m., New York time, on the Termination Date, to purchase from the Company the number of fully paid and nonassessable Shares to which the Holder may at the time be entitled to purchase pursuant to this Warrant, upon surrender, to the Company at this principal office, of this Warrant certificate, together with the Purchase Form attached hereto duly completed and signed, and upon payment to the Company of the Warrant Price for the number of Shares in respect of which this Warrant is then being exercised. Payment of the aggregate Warrant Price shall be made in cash or by certified or cashier’s check, or a combination thereof.
Section 2. Registration and Transfer
2.1.Registration. This Warrant is registered on the books of the Company. The Company shall be entitled to treat the Holder as the sole owner of this Warrant for all purposes and shall not be bound to recognize any equitable or other claim to or interest in this Warrant on the part of any other person, and shall not be liable for any registration of transfer of this Warrant which is to be registered in the name of a fiduciary or the nominee of a fiduciary unless made with actual knowledge that a fiduciary or nominee is committing a breach of trust in requesting such registration of transfer.
2.2.Transfer. This Warrant shall be transferable only on the books of the Company maintained at its principal office, wherever located, upon delivery of this Warrant either duly endorsed by the Holder or by the Holder’s duly authorized attorney or representative, or accompanied by proper evidence of succession, assignment, or authority to transfer. In all cases of transfer by an attorney, the original letter of attorney, duly approved, or an official copy thereof, duly certified, shall be deposited and remain with the Company. In case of transfer by executors, administrators, guardians or other legal representatives, duly authenticated evidence of their authority shall be produced, and may be required to be deposited and remain with the Company in its discretion. Upon any registration of transfer, the Company shall execute and deliver a new Warrant to the person entitled thereto.
Section 3. Exchange of Warrant Certificate
This Warrant certificate may be exchanged for another certificate or certificates entitling the Holder to purchase a like aggregate number of Shares as this certificate then entitles the Holder to purchase. Any Holder of this Warrant desiring to exchange this Warrant certificate shall make such request in writing delivered to the Company, and shall surrender this certificate, properly endorsed, to the Company. Thereupon, the Company shall execute and deliver to the person entitled thereto a new Warrant certificate or certificates, as the case may be, as so requested.
Section 4. Payment of Taxes
The Company will pay all documentary stamp taxes, if any, attributable to the initial issuance of Shares upon the exercise of this Warrant; provided that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in such issuance.
Section 5. Mutilated or Missing Warrant
In case the certificate evidencing this Warrant shall be mutilated, lost, stolen or destroyed, the Company may, in its discretion, issue and deliver in exchange and substitution for
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and upon cancellation of this certificate if it is mutilated, or in lieu of and substitution for this certificate if it is lost, stolen or destroyed, a new Warrant certificate of like tenor and representing an equivalent right or interest, but only upon receipt of evidence satisfactory to the Company of such loss, theft or destruction of this Warrant and indemnity, if requested, also satisfactory to the Company. Applicants for such substitute Warrant certificate shall also comply with such other reasonable regulations and pay such other reasonable charges as the Company may prescribe.
Section 6. Reservation of Shares
There have been reserved, and the Company shall at all times keep reserved, out of its authorized Common Stock a number of shares of Common Stock sufficient to provide for the exercise of the rights of purchase represented by this Warrant. Any transfer agent for the Common Stock or for any other shares of the Company’s capital stock issuable upon the exercise of any of the rights of purchase aforesaid will be irrevocably authorized and directed at all times to reserve such number of authorized shares as shall be requisite for such purpose.
Section 7. Purchase by the Company
The Company shall have the right, except as limited by law, other agreements or herein, to purchase or otherwise acquire this Warrant at such times, in such manner and for such consideration as it may deem appropriate and as shall be agreed with the Holder of this Warrant.
Section 8. Adjustment of Warrant
If the Company shall at any time subdivide or combine its outstanding shares of Common Stock, or if the Common Stock issuable upon exercise of this Warrant shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification, or otherwise, or if at any time there shall be a capital reorganization of the Company’s Common Stock or merger or consolidation of the Company with or into another corporation, or the sale of the Company’s properties and assets as, or substantially as, an entirety to any other person, this Warrant shall thereafter evidence the right to purchase the number of shares of Common Stock or other securities or other property that would have been issuable as a result of that change with respect to the Shares of Common Stock which were purchasable under this Warrant immediately before that subdivision or combination.
Section 9. Fractional Interests
The Company shall not be required to issue fractional Shares on the exercise of this Warrant. If any fraction of a Share would, except for the provisions of this Section 9, be issuable on the exercise of this Warrant (or specified portion thereof), the Company shall pay an amount in cash equal to the current fair market value of a Share, as reasonably determined by the Company, multiplied by such fraction.
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Section 10. No Right as Stockholders; Notices to Holder
Nothing contained in this Warrant shall be construed as conferring upon the Holder or the Holder’s transferees the right to vote or to receive dividends or to consent or to receive notice as stockholders in respect of any meeting of stockholders for the election of directors of the Company or any other matter, or any rights whatsoever as stockholders of the Company, except and unless to the extent specifically stated herein.
Section 11. Supplements and Amendments
The Company may from time to time supplement or amend this Warrant, without the approval of the Holder, in order to cure any ambiguity or to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder which the Company may deem necessary or desirable and which shall not be inconsistent with the provisions of this Warrant and which shall not adversely affect the interest of the Holder. Any other amendment to this Warrant may be made only by a written instrument executed by the Company and the Holder.
Section 12. Successors
All the covenants and provisions of this Warrant by or for the benefit of the Company or the Holder shall bind and inure to the benefit of their respective successors and assigns hereunder.
Section 13. Applicable Law
This Warrant shall be deemed to be a contract made under the laws of the State of Nevada and for all purposes shall be construed in accordance with the laws of said state.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer and its corporate seal to be affixed thereto.
Date: , 20
CAREVIEW COMMUNICATIONS, INC. | ||||
By: |
| |||
Name: | John R. Bailey | |||
Title: | Chief Financial Officer |
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EXHIBIT 2.2.A.
T2 CERTIFICATE OF CANCELLATION
STATE OF DELAWARE
CERTIFICATE OF CANCELLATION
1. | The name of the limited liability company is: T2 Consulting, LLC |
2. | The certificate of Formation of the limited liability company was filed on May 24, 2005. |
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Cancellation this 20th day of August, A.D. 2010.
By: | /s/ Dennis M. Langley | |
Authorized Person(s) |
Name: | Dennis M. Langley |
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EXHIBIT 2.2.B.
T2 STATEMENT OF UNANIMOUS CONSENT
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STATEMENT OF UNANIMOUS CONSENT
TO ACTION TAKEN IN LIEU OF A
SPECIAL MEETING OF THE MEMBERS
OF
T2 CONSULTING, LLC
In lieu of a special meeting of theMembers of T2 Consulting, LLC, a Delaware limited liability company (theCompany), the undersigned, being the onlyMembers of saidCompany entitled to vote on the resolution set forth below, do hereby consent to the adoption of, and do hereby adopt, the following resolution and declare them to be in full force and effect as if it had been duly adopted at a meeting of theMembers of theCompany, duly called, noticed and held, to-wit:
RESOLVED, that theAugust 2010 CareView/T2 Agreement shall mean that particular agreement a photocopy of which is attached hereto as[Exhibit A]. The terms used herein shall be ascribed the definitions given thereto in theAugust 2010 CareView/T2 Agreement[Exhibit A] hereto. This dissolution is subject to the condition precedent or the concomitant requirement that theAugust 2010 CareView/T2 Agreement Close pursuant to its terms. The terms of which are hereby authorized as being binding on theCompany and itsMembers, and are hereby incorporated into the terms of this resolution.
FURTHER RESOLVED, that simultaneous with theClosing, theMembers do hereby unanimously approve of the voluntary dissolution and liquidation of theCompany, under and pursuant to the laws of the State of Delaware that theMembers of theCompany be, and are hereby authorized, empowered and directed to take such steps as are necessary to dissolve and liquidate theCompany, and that theCompany will promptly proceed to wind up and settle its affairs, collect its assets, convey and dispose of its properties, pay, satisfy, and discharge its liabilities and obligations, and do all other acts required to liquidate its business and obligations, distribute its remaining assets, either in kind as provided for herein, to itsMembers.
FURTHER RESOLVED, that Dennis M. Langley, aMember, is authorized to file of record with the State of Delaware the attached Certificate of Cancellation once suchClosing is completed, contemporaneous with theClosing.
FURTHER RESOLVED, that the current assets of theCompany consist of: i) 14,475,666 shares ofCareView common stock, and ii) theT2’sAdjusted Gross Income Interests inCareView. These assets shall be distributed by theCompany at theClosing toThompson, Murphy andLangley as set forth in [Sections 2.2, 2.3 and 2.4] of theAugust 2010 CareView/T2 Agreement as well as the Exhibits thereto.
FURTHER RESOLVED, that theMembers and theCompanyhereby unconditionally, absolutely, irrevocably, mutually and forever waive, discharge and fully release each other and each of their respective present or formerMembers, partners, officers, directors, principals, agents, employees, representatives, attorneys and accountants, from any and all rights, actions, causes of action, claims, contracts, obligations, offsets, defenses, demands, damages, costs, expenses, attorneys’ fees, compensation, debts and liabilities of any kind or nature whatsoever, under contract, at law or in equity, known or unknown, contingent or mature, liquidated or
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unliquidated (and all remedies with respect thereto) based in whole or in part on any act, omission, event, occurrence, condition or thing arising out of theCompany up to and through the date of theClosing.
Dated: August 20, 2010.
/s/ Tommy G. Thompson |
Tommy G. Thompson, Member and Manager |
/s/ Gerald L. Murphy |
Gerald L. Murphy, Member and Manager |
/s/ Dennis M. Langley |
Dennis M. Langley, Member and Manager |
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EXHIBIT 2.4.
FORM OF GROSS INCOME INTERESTS
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EXHIBIT 3.1.A
SCHEDULE OF
REPRESENTATIONS AND WARRANTIES
1.Representations and Warranties of CareView.CareView hereby represents and warrants toT2,Thompson,Murphy andLangley as follows (each of which shall survive without contractual limitations the execution and delivery of theAgreementand the consummation of the transactions contemplated hereby):
a.Organization and Standing.CareView is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has full power and authority to conduct its business as presently conducted and as proposed to be conducted by it and to enter into and perform theAgreement and to carry out the transactions contemplated by theAgreement.CareView shall furnish to each of the otherParties, upon request, true and complete copies of all of its charter and/or formation documents and/or agreements, each as amended to date and presently in effect.
b.CareView Capitalization. CareView is authorized by its Articles of Incorporation to issue up to 320,000,000 shares of stock, of which 300,000,000 shares are common stock, par value of $0.001 per share (the “Common Stock”) and 20,000,000 shares are preferred stock, par value of $0.001 per share (the “Preferred Stock”). As of the date of this Agreement, CareView had 126,745,215 shares of Common Stock issued and outstanding and zero shares of Preferred Stock issued and outstanding. The Company also had outstanding options and warrants to purchase shares of the Company’s Common Stock as outlined in its financial statements for the period ended March 31, 2010 as publicly disclosed and published in the OTC Disclosure and News Service on March 30, 2010.
c.Issuance of Ownership Interests. The reissuance and delivery of theCareView Stock transferred byT2toThompson, Murphy andLangleyand the offer, issuance and delivery of theCareView Warrantsand Gross Income Interest toThompson, Murphyand Langley in accordance with theAgreement have been duly authorized by all necessary action on the part ofCareView, and the same when so issued and delivered, will be duly and validly issued, fully paid, and non-assessable.
d.Authority for Agreement.The execution, delivery and performance byCareView of theAgreement and all other agreements required to be entered into pursuant to theAgreement have been duly authorized by all necessary action, and when duly executed and delivered byCareView by the President ofCareView (who is fully authorized on behalf ofCareView to execute and bindCareView to the terms of theAgreement) or by any
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other authorized representative ofCareView, theAgreement and its relevant Exhibits shall become binding and enforceable againstCareView. TheAgreement and its relevant Exhibits constitute valid and binding obligations ofCareView enforceable in accordance with their respective terms. Neither the execution nor performance of theAgreement and its relevant Exhibits byCareView will violate any provision of law nor conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, its charter documents and agreements or any indenture, lease, agreement or other instrument to whichCareView is a party or by which it or any of its properties are bound, or any decree, judgment, order, statute, rule or regulation applicable toCareView.
e.Governmental Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority is required on the part ofCareView in connection with the execution and delivery of theAgreement, the reissuance and delivery of theCareView Stock transferred byT2 toThompson, Murphy andLangley, the offer, issuance and delivery of theCareView WarrantsandGross Income Interest,or the other transactions contemplated by theAgreement and its Exhibits.
f.Litigation. Other than as disclosed in CareView’s Quarterly Report for the period ended March 31, 2010 as publicly disclosed and published in the OTC Disclosure and News Service on March 30, 2010 and as outlined in the draft of the Company’s Registration Statement on Form 10, there is no action, suit, proceeding or investigation pending, or, to the best ofCareView’sknowledge, any basis therefor or threat thereof, againstCareViewwhich questions the validity of theAgreement, its Exhibits or the right ofCareViewto enter into it, or which might result, either individually or in the aggregate, in any material adverse change in the assets, condition (financial or otherwise), business or prospects ofCareView, nor is there any litigation pending, or, to the best ofCareView’sknowledge, any basis therefor or threat thereof, againstCareViewby reason of the past employment relationships, the proposed activities ofCareViewor negotiations byCareViewwith possible investors inCareView.
g.Financial Statements. The Company’s financial statements for period ended March 31, 2010 were publicly disclosed and published in the OTC Disclosure and News Service on March 30, 2010, and present fairly the financial condition and results of operations ofCareView, as of the dates and for the periods indicated, and were prepared in accordance with generally accepted accounting principles in all material respects.
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h.Property and Assets.CareViewhas good and marketable title to all of its properties and assets, including all properties and assets reflected in theBalance Sheet, except those disposed of in the ordinary course of business.
i.Compliance.CareView has, in all material respects, complied with all laws, regulations and orders applicable to its present and proposed business and has all materials permits and licenses required hereby.
j.Absence of Changes. Since theBalance Sheet Date, there has been no material adverse change in the condition, financial or otherwise, net worth, prospects or results of operations ofCareView.
k.Disclosures. Neither theAgreement nor any Exhibit thereto, nor any report, certificate or instrument furnished to any of the otherParties by CareViewin connection with the transactions contemplated by theAgreement, when read together, contains or will contain any material misstatement of fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading.CareView knows of no information or fact which has or would have a material adverse effect on the financial condition, business or prospects ofCareView which has not been disclosed to the otherParties.
2.Representations and Warranties of T2. Each of the followingPartiesrepresents and warrants toCareView as follows:
a.Authority.T2,Thompson, Murphyand Langley have the authority to enter into the terms of theAgreement and its Exhibits. TheAgreement, its Exhibits and all otheragreements or transactions contemplated within theAgreement shall constitute valid and binding obligations of the relevantParties, enforceable against each relevantParty in accordance with their respective terms.
b.Accredited Investor.Thompson, Murphyand Langley individually represent they are “accredited investors” within the meaning of Rule 501 under the Securities Act and shall be experienced in evaluating and investing in companies such asCareView, and are able to fend for themselves in the transactions contemplated by theAgreement and its Exhibits.
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EXHIBIT 3.1.B.
CAREVIEW’S SECRETARY CERTIFICATE
CAREVIEW COMMUNICATIONS, INC.
CERTIFICATE OF SECRETARY
Pursuant to provisions of the Revocation and Substitution Agreement dated August 20, 2010, by and between CareView Communications, Inc., a Nevada corporation (the “Company”), T2 Consulting, LLC, Tommy G. Thompson, Gerald L. Murphy, and Dennis M. Langley, individually and each as members of T2 Consulting, LLC, the undersigned, as Secretary of the Company, hereby certifies the following as of the Closing Date:
(i) Each representation and warranty contained in the Revocation and Substitution Agreement is true and correct with the same effect as though such representation and warranty had been made on and as of the date of this Secretary’s Certificate.
(ii) The Company has performed and complied with all covenants, agreements, obligations, and conditions contained in the Revocation and Substitution Agreement required to be performed or complied with by the Company prior to or at the date of this Secretary’s Certificate.
(iii) The Company’s Board of Directors held a meeting on August 19, 2010, at which a quorum was present, and adopted a resolution to approve the Company’s entry into the Revocation and Substitution Agreement and authorizes its President, Steven G. Johnson, to execute same in the name of and on behalf of the Company.
All capitalized terms used herein but not otherwise defined shall have the meaning ascribed to them in the Agreement Regarding Gross Income Interest.
IN WITNESS WHEREOF, the undersigned has executed and delivered this certificate this 20th day of August, 2010.
/s/ John R. Bailey |
John R. Bailey |
Secretary |
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