JOINT VENTURE AGREEMENT
BETWEEN
FLORIDA ROCK INDUSTRIES, INC.
AND
FLORIDA ROCK PROPERTIES, INC.
(a
subsidiary of Patriot Transportation Holding, Inc.)
DATED AS OF OCTOBER 4, 2006
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1 FORMATION OF JOINT VENTURE
1
1.1
Formation
1
1.2
Members and Percentage
Interests
2
1.3
Purpose
2
1.4
Principal Office
2
1.5
Unified Agreement
2
SECTION 2 CAPITAL CONTRIBUTIONS TO JOINT VENTURE
2
2.1
Initial Capital
Contributions
2
2.2
Method of Making
Initial Capital Contributions
3
2.3
Capital Accounts
3
2.4
No Right to Interest
on Capital Contributions or to
Withdraw or Withdraw One's Capital Contributions
4
2.5
Additional Capital
Contributions or Loans
4
SECTION 3 ADDITIONAL TRANSACTIONS
5
3.1
Rivenbark Property
Acquisition Expenses
5
3.2
Brooksville Mining
5
3.3
Additional Property
5
SECTION 4 GOVERNANCE
5
4.1
Management Committee
5
4.2
Appointment and Tenure
of the Committee Members
6
4.3
Meetings of the
Management Committee
6
4.4
Business Plan
6
4.5
Officers of the
Company
7
4.6
Approval Rights of FRP
and FRK
7
4.7
Other Activities of
Members and Committee Members
8
4.8
Salaries of Committee
Members
8
SECTION 5 BUYOUT EVENTS AND TRANSFERS
8
5.1
Put and Call Buy-Sell
8
5.2
Right of First Refusal
9
5.3
Power of Attorney
10
SECTION 6 DISTRIBUTIONS
10
6.1
General
10
6.2
Liquidating
Distributions
10
6.3
Limitations of
Distributions
10
6.4
Return of Capital
10
SECTION 7 ALLOCATIONS
10
7.1
Allocations of Profits
and Losses Among the Members 10
7.2
Special Allocations
11
7.3
Curative Allocations
12
7.4
Other Allocation Rules
12
7.5
Section 704(c)
Allocations
13
<PAGE>
TABLE OF CONTENTS
(continued)
Page
SECTION 8 FEDERAL AND STATE TAX MATTERS
13
8.1
Tax Year and
Accounting Matters
13
8.2
Tax Elections
13
8.3
Tax Matters Partner
14
SECTION 9 INDEMNIFICATION
14
9.1
Indemnification
14
9.2
Advances
14
SECTION 10 DISSOLUTION OF THE COMPANY
15
10.1
Events of Dissolution
15
10.2
Liquidating Distributions
15
SECTION 11 MISCELLANEOUS PROVISIONS
15
11.1
Representations and Warranties of Members
15
11.2
Amendment
16
11.3
Construction
16
11.4
Severability
16
11.5
Burden and Benefit Upon Successors
16
11.6
Further Assurances
16
11.7 Notices
16
11.8
Waiver
16
11.9
Company Property
17
11.10 Counterparts
17
11.11 No Third Party Beneficiary
17
11.12 Governing Law
17
11.13 Survival
17
11.14 Counsel Fees
17
11.15 Entire Agreement
17
11.16 No Agency Relationship
17
11.17 Dispute Resolution
17
List of Schedules and Exhibits
Section Reference
------------------------------
-----------------
Schedule 1 --Definitions
Preamble (Page 1)
Schedule 2 - Description of Brooksville Property Page 1
Schedule 3 - Permitted Encumbrances
Schedule 1 (Page
S1-6)
Schedule 4.1 - Initial Management Committee Members Section 4.1
Exhibit A - Certificate and Plan of Merger
Section 2.2(c)
<PAGE>
JOINT VENTURE AGREEMENT
This
Joint Venture Agreement (this
"Agreement") is
made and
entered into
effective as of the
4th day of October, 2006 (the
"Effective Date")
by and among Florida Rock
Industries,
Inc., a
Florida corporation
("FRK"), and Florida Rock Properties, Inc.
("FRP"), a Florida corporation and wholly owned subsidiary of
Patriot
Transportation
Holding, Inc.
("Patriot").
FRK and FRP are
collectively referred to herein as "Party" or "Parties."
Capitalized
terms used
in this Agreement
shall have the meanings specified in
Schedule 1 to this Agreement.
BACKGROUND
A. FRP owns
3,443 acres of land located in the Brooksville, Florida
area
(the "FRP Property").
FRK has a leasehold interest in the FRP
Property pursuant to a long term lease between FRP and FRK
pursuant
to
which FRI potentially
has the right, upon exercising renewal
options, to use and mine the FRP Property for up to the next 86
years
(the
"FRK Brooksville Leasehold Interest").
B. FRK
owns 553 acres of land
located adjacent to the FRP Property
(the
"FRK Property"). FRK
also owns an additional 288 acre parcel
that
it recently acquired through its wholly owned subsidiary, FRK
Brittle Road LLC (the "Rivenbark Property"). The FRP Property, the
FRK
Property and the Rivenbark Property are collectively referred
to
herein as the "Brooksville Property." The Brooksville Property is
more
specifically described in Schedule 2.
C. FRK
and FRP have
determined, based on their analysis of various
factors, that
the Brooksville Property is
more valuable as
development property than as mining property.
D. At present,
however, FRP cannot develop the FRP Property or sell
the
FRP Property to a third party for development due to the FRK
Brooksville Leasehold Interest; likewise, FRK cannot develop the
FRP
Property under the terms of the existing lease.
E. Accordingly,
the independent directors of FRK and Patriot have
determined that it is in the best interests of each Party to
enter
into
this Agreement to establish a joint venture (the "Joint
Venture") to pursue the development and/or sale of the
Brooksville
Property.
F. In
connection
with entering into
this Agreement, the
Parties
have
agreed to amend certain lease agreements between FRK and FRP
relating to properties other than the Brooksville Property.
AGREEMENT
In
consideration
of the foregoing
recitals which
are hereby
incorporated as a part
of this Agreement, the mutual covenants and
agreements
contained herein, and other good and valuable
consideration, the
receipt and sufficiency of which are hereby
acknowledged, the
Parties, intending to
be legally
bound, hereby
agree as follows:
SECTION 1
FORMATION OF JOINT VENTURE
1.1
Formation.
The Parties hereby
agree to form, organize and
capitalize a new limited liability company (the "Company") under
the
provisions of the
Florida Limited Liability Company Act (the "Act")
and in accordance with
the terms of this Agreement. The business of
the Joint Venture shall be conducted through the Company. The name
of
the Company shall be Brooksville Quarry, LLC.
<PAGE>
1.2
Members and Percentage
Interests. FRK and FRP
each shall
have a 50% Membership Interest in the Company.
1.3
Purpose. The purpose of the Company is (a)
to develop and/or
sell the Brooksville Property (the
"Project") and to
conduct such
other lawful activities as are reasonably necessary or useful to
the
furtherance of
the Project, and (b) to conduct
any other lawful
business of the Joint Venture as the Board may determine from time
to
time. The
Company shall have all powers of
a limited liability
company under
the Act and the power
to do all things
necessary or
convenient to operate its business and accomplish its purpose.
1.4
Principal Office.
The initial principal
office of the Company
shall be 155 East 21st Street, Jacksonville,
Florida 32206.
The
Company may
relocate the principal
office and have such
additional
offices as the Board may deem advisable.
1.5
Unified Agreement.
This Agreement sets
forth the terms of the
Joint Venture and serves as the Operating Agreement of the
Company.
SECTION 2
CAPITAL CONTRIBUTIONS TO JOINT VENTURE
2.1
Initial Capital
Contributions.
Concurrently with the execution
of this Agreement, each Member shall make
the Capital Contributions
described below (the "Initial Capital Contributions") to the
Company
in exchange for a 50% Membership Interest in the Company:
Member
Initial Capital
Percentage
------
Contribution
Interest
------------
--------
Florida Rock
the FRK Property
50%
Industries, Inc.
the FRK Brooksville
Leasehold Interest
the Rivenbark Property
Florida Rock
the FRP Property
50%
Properties, Inc. (subject
to reserved
right to royalties as
described in
Section
3.2)
50% of the Rivenbark
Acquisition Costs
Each such
asset to be contributed shall be contributed free and
clear of any liens and
encumbrances whatsoever, except for Permitted
Encumbrances.
For purposes of
calculating Capital
Accounts, each
Member shall be
credited with an initial Capital Contribution based
on the fair market value of the assets
contributed as
determined
after the closing.
<PAGE>
2.2
Method of Making
Initial Capital Contributions.
(a) FRK shall
contribute its entire fee interest in the FRK
Property and the FRK
Brooksville Leasehold Interest to a newly formed,
wholly owned, single
member limited liability company organized under
the Act ("FRK Newco"), which company shall also hold the fee
interest
in the Rivenbark Property.
(b) FRP shall
contribute its entire fee interest in the FRP
Property and an amount
equal to fifty percent (50%) of the costs incurred
by FRK and
FRK Newco in the acquisition of the
Rivenbark Property
("Rivenbark
Acquisition Expenses") to a newly formed, wholly owned,
single member limited liability company organized under the Act
("FRP
Newco").
(c) Following the
transactions described in Sections 2.2(a)
and 2.2(b), FRK Newco shall be merged with and into FRP Newco in a
merger
(the "Merger") in which FRP Newco is the surviving entity (the
"Surviving Entity"), pursuant to the Certificate and Plan of
Merger
attached hereto as Exhibit A. The Surviving Entity also is
referred
to in this Agreement as the "Company."
(d) As a result of the
Merger, (i) the Articles of Organization
of FRP Newco shall be amended to change the name of the Surviving
Entity
to Brooksville
Quarry, LLC, (ii) this
Agreement shall
become the
Operating Agreement
of the Surviving Entity, (iii) all assets,
properties, rights and
privileges of FRK Newco and FRP Newco shall
become the assets, properties, rights and privileges of the
Surviving
Entity, (iv) the
membership interests of FRK in FRK Newco shall be
converted into a 50% Membership Interest in the Surviving Entity,
(v)
all of the membership interests of FRP in
FRP Newco shall become
a
50% Membership
Interest in the Surviving Entity, and (vi) all of the
managers and
officers of FRP Newco,
if any, shall be
removed and
replaced by the Committee Members and officers designated pursuant
to
this Agreement.
2.3
Capital Accounts.
A single and separate
Capital Account shall
be established for
each Member, which shall initially be set at zero
and to which amounts will thereafter be credited or debited from
time
to time in accordance with the following provisions:
(a) Each Member's
Capital Account shall be credited by (i) such
Member's Initial
Capital Contributions in the amount determined
pursuant to
Section 2.1, (ii) such Members additional Capital
Contributions, (iii) the amount of Profits allocated to
such Member
pursuant to Section 7.1 and any items in the nature of income or
gain
specially allocated to such Member pursuant to Sections 7.2 and
7.3,
and (iv) the amount of any liabilities of the Company assumed by
such
Member or secured by Property distributed to such Member.
(b) Each Member's
Capital Account shall be debited by (i) the
aggregate amount of money and the Gross Asset Value of any
Property
distributed to such Member, (ii) the amount of Losses allocated
to
such Member pursuant to Section 7.1 and any items in the nature
of
expenses or losses specially allocated to such Member pursuant
to
Sections 7.2 and 7.3, and (iii) the amount of any liabilities of
such
Member assumed by the Company or secured by Property contributed
by
such Member to the Company.
(c) In determining the
amount of any liability for purposes of
Section 2.3(a) and
2.3(b) above, there shall be taken into account
the provisions
of Code Section 752(c) and any other applicable
provisions of the Code
and Treasury Regulations, including, without
limitation, Treasury Regulation Section 1.704-1(b)(2)(iv)(c).
<PAGE>
(d) If all or any
portion of a Member's Membership Interest is
transferred, the transferee shall succeed to the Capital
Account of
the assignor
or transferor to the extent it relates to the
transferred Membership Interest.
(e) The foregoing
provisions and other provisions of this
Agreement relating to the determination and maintenance of
Capital
Accounts are intended
to comply with Treasury Regulation Section
1.704-1(b), and shall
be interpreted and applied in a
manner consistent
with such Treasury
Regulation.
The Management
Committee may modify or
adjust the manner in
which the Capital Accounts, or any items of debits
or credits thereto,
are computed in order to comply with such Treasury
Regulation, provided that such modifications or adjustments
are not
likely to have a material effect on the amounts distributable to
any
Member pursuant to Section 10.2 upon the dissolution of the
Company.
2.4
No Right to Interest
on Capital Contributions or to Withdraw or
Withdraw One's Capital
Contributions. Except
as otherwise
provided
or contemplated
herein, no Member shall (a) be paid interest on any
Capital Contributions, (b) have the right to resign, withdraw, or
be
repaid all or any part of that Member's Capital Contributions, or
(c)
have the right to receive, as a
Distribution or return of capital,
any property of the Company other than cash or cash equivalents.
No
Member shall
be entitled to any Distribution, whether upon the
resignation or
withdrawal
of such Member from the Company or
otherwise, except as expressly provided in this Agreement.
2.5
Additional Capital
Contributions or Loans.
(a) Funding Notices.
The Company's
Management Committee may
determine from
time to time that the Company
requires additional
funding from the Members in order to implement the Company's
Business
Plan. In such
case, the Management Committee will cause the Company
to give written notice
(the "Funding Notice") to the Members stating
(i) the aggregate amount of additional funds required from the
Members (the
"Additional Funding
Amount"), (ii) each
Member's Pro
Rata share
of the Additional Funding Amount,
(iii) whether the
Additional Funding Amount will be treated as Capital Contributions
or
as loans from the Members to the Company, (iv)
if the Additional
Funding Amount will be treated as loans, the terms of the loans,
and
(v) the date or dates by which the Additional Funding Amount is to
be
provided by
the Members to the Company. Notwithstanding the
foregoing, without
the approval of the Members, the Management
Committee shall not
issue Funding Notices requiring the Members to
fund aggregate Additional Funding Amounts in excess of $2 million
per
Member, exclusive of Initial Capital Contributions.
(b) Funding by
Members. Each of
the Members shall be obligated
to fund its
Pro Rata share of the Additional Funding Amount in
immediately available
funds in accordance
with the terms of the
Funding Notice.
(c) Failure to Fund.
If one
Member (the "Funding Member")
funds its Pro
Rata share of the
Additional Funding Amount but the
other Member (the "Defaulting Member") fails to fund its Pro Rata
share
by the date
specified in the Funding Notice, the
Company will give
written notice of non-payment to the Defaulting Member with a copy
to
the Funding
Member (the
"Non-Payment Notice").
If the Defaulting
Member fails to cure
such non-payment within thirty (30) days after
receipt of
the Non-Payment Notice
(a "Funding Default"),
then the
Funding Member
may elect to fund the amount not funded by the
Defaulting Member.
In such event, the
amount funded by the
Funding
Member on behalf of the Defaulting Member (the
"Funding Advance")
shall be deemed to be
a loan by the Funding Member to the Defaulting
Member, repayable upon
demand and bearing interest at the Interest
Rate. In
addition, the Funding
Default shall be
deemed to be a
Triggering Event
for purposes of
Section 5.2. Each
Member hereby
acknowledges that the Membership Interests are issued subject to,
and
hereby affirms
the
<PAGE>
grant, to the other Member of a first priority
security interest
in, such Member's Membership
Interest for the
purpose of securing
such Member's obligation to repay to the other
Member any
Funding Advances made by the other
Member and hereby
acknowledges that the other Member shall have all of the rights of
a
secured party under
the Uniform Commercial Code (the "UCC") enacted
in the state of
Florida, including the right to bid for and purchase
such Member's
Membership Interest at any sale conducted pursuant to
the UCC following such Member's default.
SECTION
3
ADDITIONAL TRANSACTIONS
3.1
Rivenbark Property
Acquisition Expenses.
Upon execution of
this Agreement, the Company shall reimburse to FRK fifty percent
(50%)
of the Rivenbark Acquisition Expenses.
3.2
Brooksville Mining.
Following the Merger,
(i) FRK shall be
entitled to continue to conduct mining activities and to operate
its
calcium products plant
on the Brooksville Property (with respect to
the FRP Property, on and subject to all of
the same terms
as the
lease between FRK and
FRP existing prior to the Merger (the "Prior
Mining Lease") except as described herein); (ii) at such time as
such
operations physically
interfere with development of the Brooksville
Property, the mining activities and calcium products plant
shall be
relocated at FRK's expense to the area known as the McCall
Pit (167
acres in the Northwest corner of the Brooksville Property); (iii)
FRK
will be permitted to operate at the McCall
Pit for a minimum of
fifteen (15) years, subject to two five year renewal options at
FRK's
option; (iv) real
estate taxes on the Brooksville Property for the
period after the
effective date of the Merger shall be paid by the
Company; and
(v) to the extent FRK
mines on the FRP
Property, FRK
will pay per ton
royalties to the Company at the same rate as under
the Prior Mining Lease, but without any
obligation to pay
minimum
royalties. The
Company shall distribute all such royalties to FRP
and shall specially allocate all such
royalty income and associated
depletion deductions to FRP.
3.3
Additional Property.
From time to time,
based on analysis of
various factors,
FRK and FRP may decide to contribute additional
properties to the
Joint Venture for development. Upon agreement of
FRK and
FRP,
such
additional
properties
(collectively,
the
"Additional Property")
shall be contributed to the Joint Venture.
The Committee Members shall develop a development plan and a
business
plan for any such Additional Property, and
such Additional Property
shall be developed and/or sold pursuant to the terms hereof.
Following contribution to the Joint Venture, such Additional
Property
shall be deemed included within the term "Joint Venture
Property."
SECTION 4
GOVERNANCE
4.1
Management
Committee.
(a)
The Company shall be
managed by a management committee (the
"Management Committee"), which shall be comprised of four
individuals
(the "Committee Members") designated as provided in Section 4.2.
The
initial Committee Members, who shall serve until their successors
are
selected, are listed on Schedule 4.1.
(b)
Subject to the
approval rights reserved to the Members (FRP
and FRK) specified
in Section 4.6 and any other
limitations
expressly
contained in
this Agreement, the Management
Committee shall
have
exclusive authority
and full discretion with respect to the
management of the Company.
<PAGE>
4.2
Appointment and Tenure
of the Committee Members. The Committee
Members shall be appointed by the Members as follows:
(a) FRK shall have the
sole right to appoint two (2) Committee
Members; and
(b) FRP shall have the
sole right to appoint two (2) Committee
Members.
In the event that any Committee Member resigns,
is removed, or
otherwise fails
to serve as a
Committee Member, the
Member(s) who
appointed such Committee Member, whether FRK or FRP, or FRK
and FRP
jointly, shall be entitled to appoint a Committee Member to fill
such
vacancy. The Committee
Member shall serve in such office until such
Committee Member is removed in accordance with this Section
4.2, or
until the earlier resignation or death of such Committee Member.
Any
Committee Member may be removed at any time with or without cause
by
the Member that
appointed that Committee Member, or, in the case of
the jointly appointed Committee Member, by either Member.
4.3
Meetings of the
Management Committee.
(a) Each Committee
Member shall have one vote. The Management
Committee may act only by (i) majority vote of the Committee
Members
in attendance at a duly called meeting of the Management Committee
at
which a quorum is
present in person or by proxy or (ii) by unanimous
written consent of all
of the Committee Members. Committee Members
may grant their proxy
to any other Committee Member to vote on their
behalf.
(b) The Management
Committee shall elect a Chairman who shall
preside at meetings of the Management Committee. The Chairman shall
establish and announce the schedule and location for regular
meetings
of the Management Committee, which shall be no less frequently
than
quarterly. Regular
meetings may be held as scheduled by the Chairman
without any additional notice of the time, place or purpose of
the
meeting.
(c) The Management
Committee may hold special meetings upon
the call of any
Committee Member.
Except as to a Committee Member who
waives notice in
writing (before or after a meeting), prior notice of
the date, time
and place of the
meeting and the purpose for which such
meeting has been
called shall be given to each Committee Member at
least three
Business Days prior to such meeting. A Committee
Member's attendance
at or participation in
a meeting waives any
required notice to
such Committee Member of the meeting unless such
Committee Member, at
the beginning of the meeting or promptly upon
arrival at the meeting, objects to holding the meeting or
transacting
business at the meeting and does not thereafter vote for or assent
to
action taken at the meeting.
(d) All of the
Committee Members must be present, in person
or by proxy, in order
to establish a quorum at a meeting of the Management
Committee.
(e) Committee Members
may participate in a meeting of the
Management Committee
by means of conference telephone or similar
communications equipment by means of which all persons
participating in
the meeting can hear
each other, and such participation shall constitute
presence in person at such meeting.
4.4
Business Plan.
The Management
Committee shall prepare and
approve a Business Plan in advance for each Fiscal Year, which
shall
be subject to the
approval of the Members. If at any time after the
Company's first Fiscal
Year the Members and Management Committee do
not approve
the Business Plan
prior to the beginning
of the next
Fiscal Year, the previously approved Business Plan shall continue
<PAGE>
to govern (but
with a 5% increase in all budgeted amounts) until
approval by the
Members and Management Committee of the new Business
Plan.
4.5
Officers of the
Company.
(a) The Company shall
have such officers as may be designated
from time to time by the Management Committee, who shall, unless
and until
removed from office,
act as agents of the Company, have such powers
as are usually exercised by comparably designated
officers of a
Florida corporation
and have the power to bind the Company through
the exercise of such
powers, subject to the limitations imposed by
this Agreement
and any other
limitations imposed by the Management
Committee. The
officers shall operate within the scope of the
approved Business Plan, and any material deviations from the
approved
Business Plan shall
require prior approval of the Members provided,
however, that
deviations in
individual line items of the operating
and capital expense budgets shall not require prior approval from
the
Members provided that
the overall deviations do not exceed 10% for
the applicable Fiscal Year. The Management Committee shall
determine
the compensation, if any, for the officers appointed by it.
(b) The Management
Committee shall designate which officers
are to report directly to it.
(c) The Management
Committee may remove any officer at any
time with or without
cause; provided, however, that such
removal
shall not affect the
rights of the Company or of such officer under
any written agreement
between the Company and such officer except in
accordance with the terms of such written agreement (if any).
(d) An officer may
resign as an officer at any time by written
notice to the Management Committee.
The resignation
shall become
effective when
the Company receives the notice unless a later
effective date is specified in the notice.
(e) The officers of
the Company shall not have the authority to
commence any
litigation on behalf of the Company without the prior
approval of the Management Committee.
4.6
Approval Rights of FRP
and FRK.
Notwithstanding anything in
this Agreement to the
contrary, the following actions by the Company
shall require the affirmative, unanimous vote of the Members:
(a) any capital calls
in excess of the amount specified in
Section 2.5(a);
(b) the
selection or replacement of a third party
developer;
(c) Entry into any
agreement with any Affiliate;
(d) The
adoption of a plan of merger or consolidation
involving the Company;
(e) The sale, lease,
exchange, pledge or other disposition
of a significant portion (greater than 20% in value) of the assets
of
the Company in a single or series of related transactions;
(f) Any
transaction
causing the Company
to incur any
indebtedness except to
the extent authorized in the Business Plan
approved by the Members;
<PAGE>
(g) The admission of
any new Member or the creation of any
new class of Membership Interests;
(h) The
amendment of the Articles of Organization of the
Company or of this Agreement;
(i) Causing
the Company to be merged, combined or
consolidated with any other entity;
(j) Adopting
overall financial policies for the Company
including, without
limitation, adopting or changing significant tax
or accounting
principles or policies
except as authorized
in the
Business Plan approved by the Members;
(k)
Assuming,
guaranteeing,
endorsing or
otherwise
becoming liable
for the obligations of
any other Person
except as
authorized in the Business Plan approved by the Members;
(l) Dissolving the
Company; and
(m) Declaring
bankruptcy
of the Company, making an
assignment for the
benefit of its creditors, seeking the appointment
of a trustee, receiver or liquidator of the assets of the Company,
or
any similar action.
For
purposes of this
Agreement, any matter that requires the
affirmative vote
of the Members shall be deemed to require the
affirmative vote of all of the Members (i.e. both FRK and FRP).
4.7
Other Activities of
Members and Committee Members. The Members
and the Committee
Members currently may be engaged in other business
ventures which
are similar to the anticipated business of the
Company. Unless
otherwise prohibited or restricted by any separate
agreement, the conduct
of such ventures by any Member or Committee
Member or the commencement of business
ventures similar to the
business of the Company by any Member or Committee Member at a
later
time shall
not constitute a
breach of the duty of loyalty owed by
such Member or
Committee Member to the Company or its Members under
the Act. Nothing in this Agreement
shall be deemed to
create any
right in any Member to participate in any other business ventures
of
the other Members.
4.8
Salaries of Committee
Members. Each
Committee Member shall
receive compensation as may be determined by the Members from time
to
time and shall be entitled to reimbursement of reasonable and
necessary business expenses advanced on behalf of the Company.
SECTION 5
BUYOUT EVENTS AND TRANSFERS
5.1
Put and Call
Buy-Sell.
(a)
Upon the occurrence of
a Triggering Event, any Eligible Member
(the "Offeror") may
elect, within the 120 day period following the
occurrence of
the Triggering Event, to give
written notice (the
"Buy/Sell Notice") to the other Member (the "Offeree") designating
a
buy/sell price (the
"Buy/Sell Price") and payment terms and stating
that the Buy/Sell
Notice is delivered pursuant to this Section 5.1.
The Buy/Sell Notice shall constitute both (i) an offer by the
Offeror
to sell the Offeror's
Membership Interest to Offeree at the Buy/Sell
Price, and
(ii) an offer by the Offeror to buy the Offeree's
Membership Interest at
the Buy/Sell Price (in each case, free and
clear of all liens
<PAGE>
and encumbrances on such Membership Interest).
(b)
The Buy/Sell Notice
shall be irrevocable for a period of thirty
(30) days following the date of the Buy/Sell Notice (the
"Irrevocable
Period"), and
the Offeree may, by
written notice to Offeror during
such Irrevocable
Period, either accept the Offeror's offer to sell,
or accept the
Offeror's offer to buy (but may not accept both), and
upon acceptance, the
Offeror and the Offeree shall be required to
sell or to buy, as applicable.
After receipt of a
proper Buy/Sell
Notice, no other Buy/Sell Notice may be issued by either
Member.
(c)
If the Offeree fails
to accept either offer within the
Irrevocable Period, the Offeree shall be deemed to have accepted
the
Offeror's offer to buy the Offeree's Membership Interests to
Offeror
at the Buy/Sell Price.
(d)
Unless otherwise
agreed by Offeror and Offeree, the closing of
such purchase and sale
pursuant to this Section 5.1 shall take place
at the principal office of the Company on the fortieth (40th)
business day
after the end of the Irrevocable
Period. All such
closing, the
Member required to buy (the "Buy/Sell Buyer") the
Membership Interest of the other Member (the "Buy/Sell Seller")
shall
pay the Buy/Sell Price
to the Buy/Sell Seller in accordance with the
terms of the Buy/Sell Notice. At such closing, the Buy/Sell Buyer
(i)
shall cause the
Company to pay any indebtedness owed by the Company
to the Buy/Sell Seller and (ii) shall cause the Buy/Sell Seller to
be
released from liability under any guarantees executed by the
Buy/Sell
Seller of the
Company's indebtedness. The Buy/Sell Seller shall be
obligated to deliver to Buy/Sell Buyer a properly executed
assignment
of its entire Membership Interest, free
and clear of all liens
and
encumbrances on such Membership Interest, but if the Buy/Sell
Seller
fails to do so the Buy/Sell Buyer may execute
such assignment
on
behalf of the Buy/Sell Seller pursuant to the
power of attorney
described in Section 5.3 below.
5.2
Right of First
Refusal.
(a) FRK may Transfer
its Membership Interest at any time to
a wholly-owned direct or indirect subsidiary of FRK, and FRP may
transfer
its Membership Interest at any time to a wholly-owned direct or
indirect
subsidiary of
Patriot, and in either
case the subsidiary
shall be
admitted as a Member
of the Company (any transfer pursuant to this
sentence as referred to as a "Permitted Transfer"). All Transfers by
a Member other than pursuant to Sections 5.1, 5.2
or this 5.3(a)
shall require compliance with this Section 5.3.
(b) Prior to making
any Transfer of any portion of its Membership
Interest other than a Permitted Transfer, the Member desiring to
make
the Transfer (for purposes of this Section 5.3, the "Selling
Member")
shall give written
notice (the "First Refusal Notice") to the other
Member (the
"Non-Selling Member").
The First Refusal
Notice shall
contain a full description of the purchase price (including the
cash
equivalent value of any property to be received by the Selling
Member
in the Transfer) and the terms and conditions of the proposed
disposition (including the identity of the proposed transferee).
The
First Refusal Notice
shall constitute an offer by the Selling Member
to sell all, but not less than all, of its Membership Interest to
the
Non-Selling Member in
accordance with the terms set forth in the
First Refusal Notice and the other provisions hereof.
(c) The Non-Selling
Member shall have the right to purchase
all, but not less
than all, of such
Selling Member's Membership Interest
in the Company
by giving written
notice to the Selling Member at any
time before
the expiration of
thirty (30) days after the date the
First Refusal
Notice is received (the "First Refusal Exercise
Period"). Such notice
of acceptance must specify a closing date for
the purchase,
which date shall be
not later than sixty
(60) days
after the date notice of acceptance is given.
<PAGE>
(d)
If the Non-Selling
Member does not agree to purchase all of
the Membership Interests offered by the Selling Member prior to
the end
of the First Refusal Exercise Period, the
Selling Member,
for a
period of sixty (60)
days immediately thereafter, shall be entitled
to sell all of its
Membership Interest to the third party designated
in the First Refusal
Notice on terms not more favorable to the buyer
than to those set forth in the First Refusal Notice; provided,
however, that any the purchaser shall not be admitted as a Member
of
the Company
until the purchaser executes a counterpart of this
Agreement agreeing to
be bound by all of the terms of this Agreement
and to comply with all of the requirements imposed on Members
hereunder.
(e)
The purchase price of
any Membership Interest in the Company
transferred pursuant
to this Agreement shall be paid at the closing
in immediately
available funds (or in
accordance with other
terms
specified in
the First Refusal Notice) against delivery of as
assignment of the Selling Member's Membership Interest free and
clear
of all pledges, liens, and encumbrances.
5.3
Power of Attorney.
Each Member hereby
irrevocably designates
and appoints the
purchasing Member as such Member's lawful attorney-
in-fact to
execute any documents
and to take whatever
actions are
necessary to transfer ownership of such Member's Membership
Interest
upon the books of the Company upon the purchase
of such Member's
Membership Interest
pursuant to Sections
5.1 or 5.2 hereof, as
applicable. Any
transfer of such Membership Interest on the books of
the Company
pursuant to this
provision shall be
deemed to be an
effective transfer
of the Membership Interest
provided that the
purchasing Member has tendered the purchase price to the other
Member
in accordance with Sections 5.1 or 5.2, as applicable.
SECTION 6
DISTRIBUTIONS
6.1
General. Except as otherwise provided in
this Agreement, the
Company shall make Distributions to th
